§ Order for Second Reading read.
§ 4.3 p.m.
§ The Minister of Health (Sir Kingsley Wood)
I beg to move, "That the Bill he now read a Second time."
This Measure will concern at least 2,000,000 persons. It is designed to enable them to participate in the benefits of the Widows', Orphans' and Old Age Contributory Pensions Act on a voluntary basis. That Act has certainly proved to be one of the most beneficial and popular of our insurance Measures. It is interesting on this occasion to see the extent of the operation of that Act today. Some 4,500,000 persons, widows, wives and children, have participated in the pensions and allowances provided by the Act; some £350,000,000 has been paid in pensions and allowances, and a further £170,000,000 has been paid to persons over the age of 70 by virtue of the Act's provisions; and at the end of last year 1,900,000 persons under the age of 70 were in receipt of pensions and allowances, while a further 1,100,000 were in receipt of over-70 pensions.
Members of the House are, of course, well aware that the persons who have these benefits to-day and have received them in the past are, in broad, persons who are already compulsorily insured under the National Health Insurance Act or who, having once been insurably employed, have elected afterwards to become voluntary contributors. My right hon. Friend the Chancellor of the Exchequer on the Second Reading of the principal Act referred to the beneficial effect that the Measure was likely to have on a considerable section of the life of the nation, and it has indeed proved to be a most successful and vital part of our great social insurance system. But there was one considerable gap in its provisions, and I think every Member will agree with me when I say that there have been persistent requests from a section of the community, many of whom pay to help to provide for others this protection which they need just as much themselves. I 386 know that the right hon. Gentleman sitting opposite will agree with me that our scheme of social insurance, considerable and extensive as it is, cannot be regarded as complete so long as persons with small incomes but not themselves insurably employed are unable to share in its benefits.
It is most interesting to look at a list of the variety of callings of people who will be concerned with this Measure. This Bill has been popularly called "The Black-Coated Workers' Bill." That does not by any means adequately describe its scope. It affects a good many people who work most of the time without any coat at all, and I think this afternoon of all kinds and conditions of men and women, small shopkeepers of all kinds, newsagents, tobacconists, the owners of the small village shops, various independent workers like the plumber, the joiner, the chimney sweep and the village blacksmith, the hedger, the ditcher, the thatcher, the carter and the woodcutter; and let me assure some hon. Members who have seen me recently in this connection, it includes many women working in independent occupations, like the dressmaker, the music teacher and women engaged in domestic duties. There is also a large number of other independent workers, like the free-lance journalist, illustrators and smallholders, and in addition we must not forget that there are others, men and women, who are employed under a contract of service but are excluded from the present scheme because their rate of remuneration is over £250 per annum and they are not engaged in manual labour.
All these will be affected by this Measure, also certain accountants, bank clerks, salesmen, travellers, as well as the skippers of fishing trawlers and the hard-hit class of engineers in the mercantile marine, who at present are not in the scheme. I also think of ministers of religion. I know so well that large numbers of them find it difficult, as do their churches, to make such provision as is made by this Measure. There are also many men teachers who, we all know, desire to make provision for widows' and orphans' pensions. That is just a small list—I could extend it—of the men and women who will be affected by these proposals and about whom we shall all be thinking this afternoon. They are examples of many types of persons who will be enabled to obtain, at any rate, 387 some measure of insurance protection under this scheme.
If the House will bear with me I shall first refer to some of the difficulties of a scheme of this character and to the necessity for laying down certain conditions in the interests of the solvency of the scheme and in justice to the beneficiaries and the State. With this particular problem many Ministers who have occupied my position have endeavoured to deal, and I hope that all of them will be glad to see a Measure of this kind put on the Statute Book. I think it can be said—I do not believe that there is much opposition to the statement—that it would be almost impossible to make a scheme of this kind compulsory. I do not know whether it is desirable to do so, and in any event it is almost impossible to make a scheme of the kind compulsory, because experience has undoubtedly shown—the hon. Gentleman opposite who is taking part in the Debate will confirm me—that compulsory contributions can be successfully collected only when linked with the payment of wages, and when responsibility for their due payment is fixed upon an employer, and many of the beneficiaries under this scheme will not be under a contract of service to an employer.
There is another aspect on which I must dwell in relation to the financial responsibility which we all have to bear in passing a Measure of this kind. Undoubtedly a scheme of voluntary insurance does involve a certain amount of risk. A voluntary scheme of this character must inevitably be heavily weighted against the State which is guaranteeing it. Why do I say that? Because we cannot disguise the fact that a person quite naturally—I am not criticising—who satisfies the broad qualifying conditions of the scheme can in the first place make a proposal for insurance at a time most suitable to himself, and further in the case of an insurance with the attractions of widows' and orphans' pensions the individual is likely to wait until he contemplates marriage or possibly until he has children, and in some cases, as we know, until he begins to suspect that he may not be a first-class life. It is more than reasonable, therefore, it is essential, that if the scheme is not to be unfair between applicants and not indefensibly expensive 388 to the taxpayer, we must lay down two broad principles, with which I hope the House will agree. In the first place, in a voluntary scheme of this character it is obvious that contributions should increase with the age of entrants and, as there is to be no medical examination whatever, there must be a substantial waiting period before benefits are payable.
But I must warn the House that, even with these conditions, there is bound to be a considerable selection against the scheme and we have to recognise—and the Chancellor has recognised it—that a great part of the cost of this adverse selection against an insurance scheme of this kind must fall on the Exchequer, and unless the Exchequer were willing to take its part, the scheme would be quite impossible. Many of these difficulties—I hope all—have been surmounted, and fair and reasonable conditions, even generous conditions, have been laid down. I beg hon. Members to realise that this is an insurance scheme, and provision must be made for the payment of an adequate number of premiums and matters of that kind. It would be impossible in a scheme of this kind, for instance, for someone to come along at a particular age and say, "I will now give you a cheque for a certain amount of back contributions which I reckon I should have paid at the rate of so much a week, and that is the contribution that I am going to make to the scheme." No insurance institution in the country, no State, could father a proposition of that character. Nevertheless, provision will be found in the scheme for matters which, I am sure, the House would desire to find there. Notwithstanding the difficulties with which we have had to contend, we have been able to make provision for continuance in insurance even when full contributions have not been paid, and for maintaining the insurance of a contributor who is unable to pay contributions owing to protracted illness which prevents him from earning a living. Those are two most valuable provisions, and I hope the House will agree that they are satisfactory.
Now, may I first describe the position of the permanent part of the scheme, and then deal with matters which will arise, and special provisions that will be made, during the first 12 months. So far as what we call post-initial entrants to the scheme are concerned, the Bill provides for their 389 acceptance after the first year, up to the age of 40, at a rate of contribution which varies according to the age of the entrant. The House will see the rates specified in the Government Actuary's White Paper and the consequences to the national Exchequer which arise therefrom, and also in the Memorandum which is attached to the Bill. Not so much public attention has been paid, perhaps naturally, to the permanent part of the scheme, but I ask the House to pay attention, because it is important, to the substantial assistance which the State is giving so far as the permanent character of the scheme is concerned, particularly in the matter of providing for over-70 pensions to such of these entrants as would not otherwise be entitled to them. These entrants will be accepted at contributions varying according to age, rising from 1s. 3d. a week for men whose age does not exceed 21 to 2s. 11d. a week for men between 39 and 40, the corresponding scale for women being graded from 6d. to 11d. a week.
In order that the House and the country may know what this means from the point of view of benefit to anyone who comes in after the first 12 months, I should like to give two illustrations. I will take a man of 40 who pays 2s. 11d. a week. If the contribution represented the full value of the benefits of the scheme, including the cost of pensions over 70, it would mean that a married man of 40, instead of paying 2s. 11d., would have to pay 5s. 1d. Similarly a woman of the age of 40, if she came in after the first year she would have to pay only 11d. but, if the full actuarial value was taken into account, without any aid from the Exchequer at all, instead of having to pay 11d. she would have to pay 2s. 4d. Contributions of this order might well be prohibitive for the persons for whom the scheme is designed. To show how the respective contributions of the individuals and of the State, which is coming to their assistance, have been apportioned in respect to this very vital matter of post-initial entrants, both men and women will only pay contributions equivalent in the average case to the benefits up to the age of 70, leaving the Exchequer to pay the whole cost of administration and to bear the strain due to selection against the scheme, which will certainly be heavy a t the higher ages, and also the cost of pensions at 70, to which, in a substantial number of cases, the persons concerned would not otherwise be entitled.
390 Therefore, the scheme is of a particularly favourable and attractive character and should be of real assistance to the men and women whom we all desire to benefit.
Now I should like to say something about the initial entrants who come in during the first year. One of the main reasons for the introduction of the scheme was to give full opportunity for the enjoyment of these benefits to certain sections of the community who have never been within the scope of compulsory insurance, and, therefore, have never had a chance of voluntary insurance. There are also a number of people who have had an opportunity of voluntary insurance for some of these purposes and have missed it, but a great section of people, I have recently discovered, have never had a chance of coming within a scheme of this character, and, therefore, the Government believe that it is certainly justifiable to give them a special opportunity on a more generous scale than that proposed permanently. Therefore, the Bill permits of entrance within a year of the inception of the scheme at a favourable flat rate, subject to a maximum age limit of 55. I saw a statement in one of the insurance papers that they never expected the Government would be able to make the age as late as 55. It is a very valuaable feature of the scheme. Indeed, I do not think I am exaggerating when I say it is a wonderful bargain.
No doubt, the great majority of the men who enter will be married, and many of them will be getting on in years. The scheme will, naturally, be most attractive to them. I should like to give two instances—many could be given—of what the scheme may mean to them. In the case of a married man who, by reason of the condition as to means, would not at present be entitled to an old age pension at 70, the actuarial value of all the benefits conferred by the Bill would be equivalent at the age of 45, to a weekly contribution of 6s. 8d., and of 15s. 1d. at the age of 55. That is what he would have to pay on a proper actuarial basis. Instead of that, all he is asked for is 1s. 3d. The capital value of the benefits of the scheme for a man of 55 with an average family is estimated at about £300, and those full benefits can be secured for a minimum payment of £31 5s., and, in fact, a widow could secure a pension for life with children's allowances, when her husband might have contributed no more 391 than a sum of £6 10s. There can be no question about the generous character of the scheme and the advantages which it undoubtedly affords to all those who will take this wonderful opportunity of coming in during the first 12 months.
I have been referring to the position of the married men, and I would now like to say a word about the unmarried men in relation to this scheme, because there are some good reasons why unmarried men should join the scheme early in life. It may not be known to hon. Members that only one man in 10 remains a bachelor all through life. In the 20–25 year age group the percentage of bachelors is 86; in the 25 to 30 years age group it is 48, and in the 30 to 35 years age group it is 22. With those figures confronting him, the unmarried man of 30 would not be wise to defer insuring until he married, say, seven years later. He would then have to pay 2s. 6d. a week. It is true that he saves 1s. 3d. a week for seven years, but he will have to pay an extra 1s. 3d. a week for 28 years if he lives until 65. I would make this further observation from my personal experience that it is generally much easier for a bachelor to pay 1s. 3d. a week than for a married man to pay 2s. 6d. a week.
Now I come to a more delicate subject as far as Members of this House are concerned, namely, the position in regard to women. I do not hesitate, after reflecting on all that hon. Members have said to me in this connection, to describe this scheme as one largely for the benefit of women. The insurances provided for in the scheme are mainly for the benefit of women. Why do I say that? Because the chief attraction for men will be that the scheme enables them to make provision for widows and children in the event of premature death. I referred just now to the position of men entrants who pay 1s. 3d. a week. I have had the figures provided for me, and when anyone says that women are being unfairly treated under this scheme I would point out that, of that 1s. 3d., nearly 1s. is apportioned for making provision for the wife, widow or children. If 250,000 men enter the scheme in the first year we may very well assume that not more than 30,000 of them will be unmarried, because, as I have said, the scheme will 392 be most attractive to married men and on that basis, over 200,000 women will benefit either as wives or widows of insured men. Of course, as the number of men entrants increases, so will the number of women who receive benefit rise in proportion. It is in this way that women will be the largest participators in the benefits of the scheme, and in the substantial contributions which the Exchequer is making.
I will give two further illustrations. On the average, 1,000 men dying at the age of 45 will leave 2,400 dependants—widows and children under 16. One can visualise the benefit of the scheme in respect of those women. I would also like the House to realise that at the age of 65, four out of every five women in this country will be widows or married women, and when one discusses the benefits of the scheme to women, that is a vital consideration.
The right hon. Gentleman has spoken about the number of men who remain bachelors all their lives. Can he say how many women remain spinsters all their lives?
§ Sir K. Wood
I am afraid I cannot satisfy the hon. Lady's inquiry. It has also been alleged that in the matter of State help women are not being treated as we would desire them to be treated. [An HON. MEMBER: "What is desirable?"] I would put it this way, that we ought to treat them fairly. Deductions have been drawn from the Government Actuary's Report to the effect that the State provides for women's insurance a capital sum of £40 per head, as contrasted with a capital sum of £70 per head for men's insurance. That leaves out of account the material and vital factor that the respective contributions which are being paid, are 1s. 3d. a week for men and 6d. a week for women. If the State grants for each sex bore the same ratio to the contributions, either the State grant for women's insurance must be reduced to £28 per head, or the grant for men's insurance must be increased to £100. On this basis, obviously, in the matter of State grants the new scheme is more generous to women than to men, and, in fact, of that £70 per head paid in respect of men's insurance, by far the greater part will benefit women whether as wives or widows.
393 I want to say something now with regard to the benefits of the scheme to women and the attractions which, I hope, it will have for them. I believe there will be an appreciable number of women, particularly at the higher ages, who will be desirous of securing old age pensions for a weekly contribution of 6d. The Government Actuary in his report puts the number of unmarried women of middle age at 500,000 who would satisfy the conditions of eligibility in the first year of the scheme. The liability of the Exchequer for each 1,000 women entrants from this section will be £40,000, apart from the liability for over-70 pensions which falls wholly upon the Exchequer. Under the existing National Insurance scheme, as hon. Gentlemen opposite know so well, a woman may be insured before marriage either as an employé or as a voluntary contributor. After marriage, under the present scheme she is not entitled to be insured as a voluntary contributor. Under this scheme the door is open, and those married women whose husbands are not compulsorily insured will, for the first time, be entitled to insure for old age pensions.
The question of the income limits has also been the subject of a certain amount of mild criticism. The Government have introduced this Bill in order to assist a considerable number of persons who are not without their economic difficulties, and who are in much the same position as the average insured person. That was the statement in the Government's manifesto on the subject, and the State is helping them—I suggest quite properly —because it is exceedingly difficult, if not impossible, for persons in this category to make adequate provision for widows and orphans and for old age out of their own resources. Speaking for myself, and I think, possibly, for a number of hon. Members, I do not regard it as the function of State insurance to supersede private thrift, and it is not intended to extend the scheme—involving as it does large Exchequer contributions —to people who might reasonably be regarded as able to provide for their own social protection.
The difference between the £400 a year income limit for men, and the £250 a year income limit for women, is not one of sex differentiation at all. It has relationship to the responsibilities and the 394 burdens that have to be carried. The married man will need to make provision, not only for his old age but for his wife, and, in case he should not survive, for pension and allowances for his widow and children. The benefit for which the women will insure will be the Old Age Pension and, of course, the contributions are adjusted accordingly. I would point out to those who speak to me about the position of the unmarried women, with incomes of over £250 a year, that when it is a case of giving assistance from the State, it ought to be known that such a woman at age 25 can get to-day from an insurance institution an Old Age pension of 10s. a week for life at the age of 65 next birthday, with a return of premiums in certain cases, for a weekly premium of about 1s. 6d. I have listened to all that has been said on that point, and it is a cause of grief to me that I have to disagree with some of my hon. Friends on this matter, even though the disagreement may be only a temporary one. I would ask them to remember that the greater part of the man's risk is the security of his wife in her old age, or his widow and children in the event of his premature death, and there is no such cover available for him in an insurance institution on any terms that he could reasonably afford. There is no comparison —I do not hesitate to say so—between the two cases. Under this scheme we give adequate benefit and security according to needs, circumstances, burdens and responsibilities in a fair and proper way. As far as the State contribution and help is concerned, if anything, it errs in favour of women rather than men.
In concluding my observations on this particular matter I should like to remind the House, in order that Members may be able to deal with it when they speak to their constituents, that the rise in the income limit which is proposed in the Bill will give to many people another chance of voluntary insurance in addition to that in connection with National Health Insurance. They will get one more chance, and I hope they will avail themselves of it. Let me say a few words about the stipulations in the Bill regarding persons in receipt of unearned income and the reason why we have made these conditions. The scheme is primarily designed for the assistance of persons who derive a livelihood from earnings. In 395 their case old age normally involves loss of earnings, while the death of the wage-earner deprives his family of their means of livelihood. But when the income is derived from investments or from other sources not being earned, there is ordinarily little or no loss of income on account of age or death. The man with an income of £400 a year derived from investments alone may have a capital of £10,000 to £12,000, and I do not think it would be fair to the taxpayer to ask him to contribute in such a case.
On the other hand, in the case of persons with small incomes not derived from earnings, women, for instance, who are possessed of small life interests or living on an interest yield on small amounts of capital, it would not be fair to debar them from the benefits of a scheme of provision for old age pensions which is open to persons with much larger incomes derived from earnings. In their case it cannot be said that their income or the equivalent capital enables them to make such provision as I have mentioned. Apart from the reservation as to unearned income, I would point out that the scheme does not debar unoccupied persons from taking part. There must be many persons, especially women, who are compelled to undertake such occasional work, not amounting to insurable employment, as they can find, to eke out a small private income, and who cannot be described as mainly depending upon the earnings thus obtained. I am glad to say that, in general, such persons will at present be qualified for the old age pension at 70, but in the few years before that age is reached it is, I regret to say, too frequently the case that either the capacity for work fails or the difficulty of securing work increases. I think many such persons, particularly women, will be attracted to a plan under which they may obtain the assurance of some income from the age of 65.
I must say a few words about the Exchequer liability under the Bill. It is right that the House should be made aware of what it means. The scheme will impose a considerable liability upon the Exchequer. It can be said with perfect accuracy that some amount of State assistance, in most cases a large amount, will be required to support nearly every pensioner under this scheme. I hope that the House, when it looks upon what are 396 very considerable proportions of Exchequer aid in this connection, will agree that this is an act of justice and that, therefore, the Exchequer contribution is defendable on that account. It is impossible to present a detailed statement of future income and expenditure under this scheme. We do not know the number of people who will enter, nor do we know—and this is most important from the insurance point of view—the average age and the marital status of the entrants, but it is manifest that at least in the case of entrants at the outset the benefits will have to be provided very largely at the expense of the Exchequer.
As regards men, the great majority will be married. It is estimated that the number of married men in Great Britain aged under 55, not already insured, may be put at about 1,500,000, of whom some three-fourths will be eligible under this scheme. The estimate is that if there are 250,000 men entrants in the first year, the Exchequer liability for benefits up to the age of 70, may be put at £17,500,000. If there are 100,000 women entrants in the first year, the Exchequer liability in respect of them for benefits up to the age of 70 may be put at £4,000,000. Taking these numbers of men and women together, and adding the expenses of administration, the capital value of the Exchequer liability is likely to be £23,000,000 for the 350,000 initial entrants. That is a sum which can be redeemed in 30 years by an annual charge of £1,200,000 which is proposed to be made under the terms of the Financial Resolution.
I cannot prophesy the number of people who will come into the scheme—I hope it will be considerable—but if there is double the number of entrants, 700,000 men and women—and the number may very well be that—the Exchequer liability will be £43,000,000. That excludes the consideration of the financial commitments as far as regards pensions over the age of 70. I have so been been dealing only with the cost of pensions up to that age, but pensioners under this scheme will be guaranteed pensions for life, irrespective of means, and the cost of these old age pensions after the age of 70 will fall directly upon the Exchequer. Here I enter upon a somewhat speculative region. In the case of the person with an income approaching £400 a year, it is highly probable that he would be debarred from getting an old age pension 397 at 70 on the ground of means. The grant of an over-70 pension to such a person and his wife under the new scheme will impose a definite new charge upon the Exchequer. It is obviously impossible to say what proportion of the new entrants would have qualified for the over-70 pensions on the existing basis, but it is estimated, and I think it is a fair estimate, that half of the men who become special voluntary contributors and a quarter of the women, would not qualify for such pensions on the existing basis. Taking men and women together, the Government Actuary concludes that on the basis of 350,000 initial entrants the present value of the additional cost of over-70 pensions is about £14,000,000. This would, in about 30 years' time, involve an annual charge of over £1,500,000, and for double the number of entrants the corresponding figures are £26,000,000 and £3,000,000 respectively. If we take these two figures together, I think that most hon. Members will agree that the Exchequer is making most substantial contributions to the scheme.
Let me say a few words with regard to one or two matters with which I have been asked to deal, because there has been a certain amount of public correspondence and questions have been asked about them. Let me deal with the position of the existing voluntary contributors. It is very interesting to see what may happen from the consequences of the introduction of this scheme so far as men and women are concerned. The number of voluntary contributors for health and pensions to-day is about 650,000. Before the contributory pensions scheme was introduced there were only 45,000 voluntary contributors. It is evident, therefore, that the voluntary pensions scheme has proved a great attraction to voluntary contributors. There is no doubt—it is no reflection upon the existing insurance scheme—that many persons in the past have been deterred from becoming voluntary contributors by reason of the compulsion to contribute to both health insurance and pensions. In future, persons who become voluntary contributors will not, on ceasing to be insurably employed, be compelled to insure under both schemes, but they may do so if they desire. They will have free choice.
398 In addition—and I have discussed this matter with the Consultative Council of the Approved Societies—this concession will be the same to existing voluntary contributors, who will be allowed to insure if they like under both schemes as heretofore, or they can insure for health only or for pensions only. There has been some misapprehension in this connection. There is nothing in the Bill which requires these persons to pay increased contributions for health and pensions benefits for which they are at present insured, or to satisfy the conditions as to age, income and residence which apply to the new class of contributors introduced by the Bill. They have the same rights as the new entrants in the matter of benefits on lapse, maintenance of insurance for a minimum payment of 26 contributions a year and graded pensions if they should be unable for any reason to keep up the average of 50 contributions a year.
§ Sir K. Wood
As far as they are concerned, I think their existing rate is most favourable. On transfer, their former insurance will be counted in full towards all the benefits of the new scheme. Let me say a few words as regards persons already possessing pension rights or other analogous rights. There have been a certain number of letters addressed to my Department on this subject, and a certain amount of misapprehension exists as to the scope of the exclusion of persons already securely provided for in regard to pensions equivalent to those provided under the new scheme. The exclusion applies only to employment where superannuation or any provision is by Act of Parliament or by undertakings approved by the Minister of Health. The employments in question are mainly employments under the Crown or under a local or other public authority, employment as clerk or other salaried official by a railway or other statutory company, or permanent employment by persons authorised by Parliament to construct or carry on works of public utility such as gas as electricity.
I want it to be understood that a person in an employer's private scheme 399 who does not come within the categories I have mentioned can, of course, apply to enter the scheme and receive benefits. Persons who are only protected for old age will be allowed to come under the scheme for widows' and orphans' pensions; a large class to whom the provision applies consists of male teachers and I have to thank their representative bodies for the kind messages they have sent me in relation to this scheme. Regarding the collection of contributions, so far as initial entrants are concerned the present system of stamped cards will be maintained. It is proposed that a card should be stamped each week with the value of the weekly contribution. The stamp will be of the existing health and pension range with two new values of 1s. 3d. and 6d. and the third of 5½d. for an ordinary woman voluntary contributor who has insured for pensions only. So far as the later entrants are concerned, it will not be possible, because of the great variety of rates of contribution, to provide a stamp for each weekly value. A contribution card will, therefore, be specially designed and stamps provided to admit of payment of the half year's premiums by convenient instalments. Cards when stamped will be sent post free to the appropriate central department in England, the Ministry of Health; in Wales, the Welsh Board of Health, and in Scotland, the Department of Health of Scotland.
Applications for admission to the scheme can be made immediately after the passing of the Bill. Every one will be anxious to see it on the Statute Book, but applications need not be postponed until the day fixed for the commencement of the Act, which is 3rd January next. There is a special provision for people who are between 54 and 55 years of age at the commencement of the Act. They may give notice, within the first year of the scheme, but if given after the 55th birthday the insurance will run from the 55th birthday itself.
I submit this scheme to the House as another considerable and desirable addition to our social services. The task of framing such a scheme has not been an easy one. It has baffled many. We had to start with the knowledge that, quite properly, the great bulk of the entrants to the scheme would have much to gain from it, and the dice would be heavily 400 loaded against the Exchequer. We had at the same time to devise a scheme so that the premiums must be within the resources of those whom we desire to help. The Exchequer does indeed make a substantial contribution to its finances. I emphasise that this scheme is essentially a contributory one. It is a voluntary scheme. It encourages self-help. The State will be helping those who are helping themselves, but who, unaided, find the task well nigh impossible. I think few, if any, will grudge this financial aid to a section of the community, often overlooked, who contribute substantially to the revenue and who, while subject to the same vicissitudes, at present receive none of the benefits given to the insured worker. I can promise the House that we shall examine the precise terms of this Measure when we get it to Committee, but I commend it to the House as one more Measure of British social security and justice and one which I suggest will take a considerable place among social services which are unequalled in the world, and to which in recent years we have made such a substantial contribution.
§ 5.8 p.m.
§ Mr. Rhys Davies
I can, I think, genuinely and sincerely, on behalf of every Member of the House of Commons, congratulate the right hon. Gentleman on the manner in which he has introduced his Bill. An insurance Bill of this kind is naturally very complicated, and I wish I had the felicity which the Minister possesses, especially to disarm his women critics. The House will notice that the Labour party has not put down any Motion in regard to this Measure. We naturally accept these small instalments of State collectivism on the way as it were. Governments in Europe have been talking for a long time past about collective security, but I am satisfied that the ordinary people in all those countries have at the same time been seeking domestic security; and, in so far as this Bill provides that modicum of social security, we welcome the Measure. We have seen the extension of State intervention in insurance increasing from year to year, but this Bill, is about the smallest in its scope of all such Measures that have been introduced. The Minister, however, is an adept at proclaiming loudly what is 401 to come. He can always make the smallest things look very big.
Without being too critical of the Measure, it may be said that the black-coated workers, so-called, have demanded bread but in this Bill the right hon. Gentleman is giving them a bone—[Horn. MEMBERS: "Oh! "]—as I shall be able to prove later. Whatever criticism may be levelled against the provisions of the Bill, however, they are above all a vindication of the principle of State intervention in social insurance. No private insurance company could possibly provide even these small amounts of benefit at 65 years of age for the same limited weekly contribution, and I hope I may be pardoned for saying that when a Labour Government comes into power one of its first tasks will be to take out of the hands of private enterprise that part of insurance which exploits the industrial and family life of this nation. I am glad the Minister is making this small contribution towards that end. If I had my way the first insurance that I would nationalise would be workmen's compensation, in which 45 per cent. of the premium income is expended in profit and working expenses.
This Bill is obviously the response of the National Government to the insistent and persistent demand of a section of the people for an old age pension. I do not think there is any difference of opinion among Members of all parties in the House that the people of this country are annually becoming more pension-minded. The reason is obvious. The small shopkeeper in particular—a strong element in society in this country—has been complaining for years that he has been placed at a disadvantage by comparison with the policeman, the teacher, the municipal employé and the civil servant, and indeed in some cases by comparison with the ordinary wage-earning class in relation to pensions. Those black-coated people have been left to fend for themselves, and this Bill meets in part their demands. The Bill will establish for the first time in this country a centralised State contributory pensions scheme without any local agents to collect the contributions or administer the benefits. The approved society system is discarded entirely; and so far as pensions are concerned I am almost of opinion that that is all to the good.
402 There is one thing above all that our successors in this Assembly will find as the generations roll on, that however small the scope of this Bill may be, it does provide a basis for the future on which Governments will be able to establish pensions for almost all classes of the community. That is the greatest value of the Bill. The Minister did not mention the propaganda carried on by the spinsters in this country, and I am wondering whether he will be good enough when he has finished his conversation with his most bitter enemy—
§ Mr. Davies
I do not think the right hon. Gentleman will mind my mentioning, in passing, the agitation of the spinsters. Their complaint has some reason behind it. They make the charge with some justification that the unmarried woman within the present pension and National Health Insurance schemes is not securing benefits in proportion to contributions as the wives and widows of male insured persons. I hope the Parliamentary Secretary when he replies to-night will deal with that complaint. But in considering an extension of our pensions schemes I am sorry that the right hon. Gentleman forgot the saddest case of all. I am sure that I speak on behalf of hon. Members in all parties when I say that the most pathetic case under our present pensions scheme is that of the married man, the workman, who arrives at 65 years of age and is discharged from his employment because he gets an old age pension of 10s. a week. His wife may be 63. I have come across cases over and over again of the old gentleman who, though he has contributed towards a pension scheme, when he is dismissed from his job, has to turn to the Poor Law to supplement his old age pension. I should have thought that the right hon. Gentleman would have favourably considered that case, but he has obviously not done so.
In spite of all that the right hon. Gentleman has said to-day the Bill is after all but a very small contribution in comparison with the demands of the case. At the moment thousands of working people are arranging with their employers and have established in many industries pensions schemes on a scale which makes the scheme in this Bill look 403 ridiculous and feeble. In the steel and paper-making industries, and in the cooperative movement, with which I happen to be associated, over 100,000 co-operative employés are already covered by an old age pension scheme which is superior to the one contained in this Bill. There is a growing demand for old age pensions schemes among the working people and they and the best employers are joining together to build up superannuation and pensions schemes to assist old employés at 65 when they are thrown on the State pension of 10s. per week. Therefore, in spite of the welcome we give to this further contribution towards State pensions, it is but a feeble attempt to meet the demands of the people. There has, of course, always been a strong demand for a non-contributory pension scheme, and we must remember that the first old age pension scheme was on a non-contributory basis.
In 1911 the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) introduced his National Health Insurance and Unemployment Insurance Scheme, and from that date onwards the State, in spite of subsidising social insurance, has, in the main, thrown the cost of these schemes on the employers and work-people. If you calculate the total amount of the workman's contributions to all these schemes, pensions, health, insurance and unemployment, I can assure the right hon. Gentleman that in a large number of cases, especially in Lancashire, the deductions amount to about 10 per cent. of the total wage earned by the worker. Really, I am beginning to get a little alarmed at the proportion for these purposes which is being deducted from wages. I think I know why our working people are suffering all these deductions so willingly. The reason is that once they pay a contribution they will get benefits without the imposition of a means test. It is astonishing how deep this means test business has cut into the minds and hearts of our people. They will do a great deal to avoid it. Therefore I say, that the main reason why they are willing to see these contributions mounting up week after week by way of deductions from their wages is because there will be no means test when they receive their benefits. The Bill helps in some measure too because there will be no means test after 70 years of age.
404 The nation is becoming more pension-minded, more especially because the average age at death is being extended every year. There is nothing in this world that a man fears more than to be friendless and helpless in old age. In future, the small shopkeeper, farmer and minister of religion will be given the opportunity voluntarily to follow the workman in this connection. There is one thing which affects me deeply in considering a Bill of this kind. The issue has been raised on many occasions in Motions and speeches in this House. One of the most urgent questions which the Government have to face is not merely the provision of a pension scheme which will satisfy human requirements, but the industrial nations of the world are being brought face to face with something much bigger. We require fewer and fewer working people to produce the same amount of goods, and in the end, no matter what Government may be in office, in the not far distant future they will be compelled to look at pension schemes not in the light of providing bread for aged people but to meet the insistent demand of engineering science so that people can be taken out of industry at an earlier age to make room for the young. I should have thought the right hon. Gentleman would have told us something about that problem to-day. I read with great interest his first book explaining the National Health Insurance Scheme of 1911, and I hope he will not be too conceited when I say that I was one of a large audience which listened to an oration from him on that burning subject.
There are, of course, some criticisms which must be made on the Bill. I should like the right hon. Gentleman to tell us a little more about those approved societies which the department encouraged into existence to cover persons in excepted employments. He has told us that 650,000 voluntary contributors already in approved societies will not be induced to leave their societies; but at the same time he is going to lay down, so I am informed, that voluntary contributors in future will have two cards, one for health insurance and the other for pension purposes. Is not that a backdoor method of inducing contributors to drop health insurance? The right hon. Gentleman has already said that the present voluntary contributor was induced to attach himself to an approved 405 society because of the pension provisions.. He knows therefore that if the contributions are divided between the two schemes the contributor will be more inclined, to drop health insurance than his pension. There are one or two approved societies whose membership is based almost exclusively on voluntary contributors in excepted employments, and I hope the right hon. Gentleman will not allow these societies to die. Whilst he is not going to induce people to leave the approved society he is at the same time taking away potential members from these societies under Clause 13. I hope he will examine this Clause again.
A word about the income limit. Everybody is becoming a little bewildered by these several income limits. There is an income limit of £250 for non-manual workers in National Health Insurance; there is no income limit for manual workers. There is another limit for Unemployment Insurance and another limit still in this Bill— £400 for men and £250 for women. I should have thought that the right hon. Gentleman would have abolished some of these different income limits and have made them universal. I can quite see the reasonableness in saying that initial entrants may come in on a flat rate of 1s. 3d. for men and 6d. for women up to 55 years of age. After that, however, the scheme is going to be based on strict actuarial calculations. Under the National Health Insurance scheme Some societies pay additional benefits and some pay none. In the very same families you have people paying the same contributions under that scheme and five or six members of that family receiving different rates of benefits. That is regarded as unsatisfactory. But what is going to happen here? One member of a family will be an initial entrant at 1s. 3d. per week and another member after the first year will come in and pay a different rate of contribution to the same fund and will receive a different rate of benefit.
The right hon. Gentleman is obviously capitalist-minded; that is what is wrong with him. He thinks in the same terms as the Prudential Assurance Company, whilst he is still Minister of Health. He has never developed a collective state of mind towards pensions. I would not like to say that this is exactly an insurance scheme, it cannot be based on insurance principles if you always call upon the State to make up deficiencies. But 406 right hon. Gentleman can get to an insurance scheme for the time being. I said a few moments ago that the right hon. Gentleman is very clever at making small things look big—not that he is very big himself ! He said in a grandiloquent fashion that the capital cost of this pensions scheme will amount to millions upon millions. This, however, is what the scheme means in simple terms. About 1,000,000 people may come under the scheme, and the total net cost to the Exchequer will be about £1,000,000 per annum. That will be the net result of it all.
§ Mr. Davies
Let the right hon. Gentleman contradict me later on. At any rate, that is good enough for a politician, especially in dealing with this Government. I would ask the right hon. Gentleman to bear one other thing in mind. Once we say that this is not an insurance scheme based upon actuarial considerations, by relating contributions to benefits, and once we have agreed that the State shall make up deficiencies, it seems to me that we ought to take a bold course and lay down a flat rate of contribution and a flat rate of benefit for all. The right hon. Gentleman was looking round for cheers from this side of the House, but he cannot get them.
§ Mr. Davies
I would ask him to be good enough to take that point into consideration, because it seems to me that all these insurance schemes are becoming very complicated. It will require a very large staff in the pensions department that is to be set up to decide not only the age of entry—when the man or woman enters —but the weekly contributions—how many contributions are paid—and consequently I feel that in the end there would be by simplification a saving in the costs of administration. I do not wish to say very much more at this stage, because we shall have other opportunities of dealing with the details of the Bill later on. There is one thing, however, to which I must refer. The right hon. Gentleman has managed, for the first time, I think, in the history of the House of Commons, to 407 secure a united front among all the women Members. Whether it will be a popular front or not I cannot tell.
§ Mr. Davies
I think the hon. Member has disturbed the equanimity of the Noble Lady. If he has, we shall see how the united front works out in the end; I am not so sure that there will be much backbone in it. There is one feature of this Bill which we naturally welcome. All those who are interested in the endeavours of the trade unions and friendly societies to provide an old age pension will know the tragic side of those efforts. I know of cases where the burden of providing an old age pension of even 5s. a week has been too much for the funds of those societies. Therefore, on that issue alone, this Bill is welcome to some of us, if not indeed to every hon. Member. Having said that, I will turn to another aspect of the Bill, namely, that it tells us in a better form than we have ever been told before the value of insurance as such. Insurance has grown in this country by leaps and bounds in our lifetime—insurance against death, burglary, fire, accidents and injuries of ail kinds—and in the end society is looking for insurance against old age. It is very interesting that as far back as Ibz5—over a century ago—a Select Committee of the House of Commons reported as follows on the value of insurance through friendly societies:Whenever there is a contingency, the cheapest way of providing against it is by uniting with others so that each man may subject himself to a small deprivation in order that no man may he subjected to a great loss.That, I think, is the kernel of the Bill that we are discussing to-day. While I criticise the Bill in part, I also welcome its main provisions. No Government can do a better job than to take interest in the aged. It has been said over and over again that a nation which neglects its children is a nation in decay, but I think the statement can go further—a nation that is not kindly disposed to its old people is a nation that in the end must and ought to perish.
§ 5.38 p.m.
§ Mr. Graham White
Like my hon. Friend the Member for Westhoughton (Mr. Rhys Davies), I wish to welcome this Bill for precisely what it is—an instalment, and a notable instalment, towards the policy of social security to which we have been devoted ever since my right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George) introduced the first insurance and pensions Bill in 1912. To that policy we remain devoted, and we shall advocate it until, humanly speaking, there is a system of complete security. I think my right hon. Friend the Minister of Health may congratulate himself on the Bill in that there is already evidence of very great satisfaction from those sections of the community for whose benefit the Bill is primarily introduced. There have been many expressions of satisfaction, and, having regard to the fact that the pensions benefit is so small—10s. a week, a sum which does not bear any relation to the cost of maintenance—I have been touched by the number of letters that I have received from various individuals who were concerned to know whether or not they would come within the terms of the Bill and who were distressed lest by some means of other they would be outside its scope. In passing, let me say that the statement made towards the end of the right hon. Gentleman's speech that persons between the ages of 54 and 55 will not be excluded from the benefits of the Measure is some answer to many anxious inquiries that I have received, and will relieve the feelings of those people.
We in this country are entitled to take pride in our system of social insurance. We were pioneers in it, we made the experiment and others followed; and I think we have a system which is superior to that of any other country. For the last 30 years, Parliament has been building up this system of social insurance, not according to any comprehensive plan or by any bold scheme of national superannuation, such as is being developed at the present time in the United States of America, but by what might be described as a patchwork policy of progress. Bills have been introduced at one time or another to meet some social stress or social distress, or some economic strain, and the result is that to-day we have a system which is full of anomalies. There 409 may be something to be said for proceeding slowly in these matters, but there is the disadvantage that each patchwork Bill that is introduced creates a certain number of anomalies which leave a sense of dissatisfaction and injustice on the part of those who are outside the scope of it. Some of those anomalies are removed by this Bill, and for that reason we welcome the Bill.
At the same time, the Bill is not by any means free from criticism, and I would like to make one or two criticisms. My right hon. Friend dealt with the criticism which has been made with regard to the fixing of the income limit, and in particular the point which has been urged with great force by the womens' organisations. He dealt with that matter with a tact, a courtesy, I think I may say a charm, and certainly an ability which everybody will recognise, but I do not think that anything he said removed from me the conviction, or altered the plain fact, that the fixing of an income limit of £250 will debar from the benefits of this scheme a very large number of women who certainly are not immune from any of the disabilities, the chances of fate or the slings and arrows of outraged fortune which make it very necessary for them to come within the scheme. That is my feeling and my answer to the reply which my right hon. Friend saw fit to make to the claims of the women with regard to this matter.
I would like to ask why these particular limits have been fixed. If it is not a question which is irrelevant to the discussion, I would ask whether the fixing of these limits has any relation to the Bill which we expect later on with regard to unemployment insurance? If my right hon. Friend, when he replies, says that that is not the case, and if other limits are fixed in that Bill, then the confusion of limits to which my hon. Friend the Member for Westhoughton referred, will probably be still further augmented. I should be glad to know what is the position in that respect, because I think that in the case of unemployment insurance there is a demand for a higher limit than the one at present fixed.
The hon. Member for Westhoughton referred to the National Spinsters' Association and asked for some information on that matter. I would like to associate myself with his request for further information. I think that movement may 410 congratulate itself on the fact that this Bill, within certain limits, meets part of the demands put forward by it in that a certain number of unmarried women over the age of 55 will be entitled to draw a benefit after the payment of a reasonable number of contributions. Whatever criticisms may be made against this Bill by those who may consider that they are not fairly treated, I think no criticism can be made by those who come within the scheme in the first year between the ages of 54 and 55. Whatever may be said by any other section, they certainly will get a very generous deal.
It has been represented to me—and I would like this matter to be dealt with by the Minister who replies—that those who are now voluntary contributors under the existing scheme will have the option to contract out of the existing scheme and to come within the new proposals. It has been suggested to me in certain quarters that it would be much better if they had positively to contract out instead of being automatically transferred to the new Bill unless they express a contrary wish. [Interruption.] That point has been mentioned to me, and no doubt hon. Members will express their opinions on it in the course of the Debate. I hope that this Bill may be the last Bill dealing with social insurance in this country, unless it is the Bill which we anticipate with regard to Unemployment Insurance, to be introduced on the instalment plan.
We have had a very wide experience in this matter in this country, and the situation is changing with regard to this question rapidly. This is accumulating a very serious and increasing liability for old age owing to the increased longevity of the community and the changes in the trend of the population. It is clear that: as years go on, the nation will have a greater liability for old age, and that liability will have to be supported, in all probability, by a very much smaller number of workers. Our system having grown up in the way it has, I do not think that Parliament or the country as a 'whole has the problem in complete perspective. I would say now what I have said in this House on many previous occasions, and which I keep on repeating. The time has come when there should be a complete and comprehensive inquiry into the whole question of old age, and it should 411 be related, in particular, to that problem mentioned by my hon. Friend above the Gangway when speaking just now of the exit from industry.
The United States of America are building up a complete, proper and comprehensive superannuation scheme. We in this country are prepared to pay State pensions of 10s. a week to over 300,000 individuals who are over 65 and are continuing in their work. I do not blame them for continuing in their work, if their pension is only 10s. a week, but it may very well be that, when the rearmament programme is exhausted and perhaps another trade cycle is upon us and industry is on the ebb, this country may be driven to consider every conceivable means for relieving the distress of unemployment. Before those days it will be of the greatest value if we are ready to launch a comprehensive scheme of superannuation. The task is a great one. Our system is now so complicated, has grown up in such a haphazard way and is administered in so many different forms, that it must be the task of a Royal Commission, and the sooner it is set up to consider what is a very important question for the future of the people the better it will be for all concerned, and the many who come after. I express a welcome to this Bill for what it is—an enlargement and an instalment of our system of social security. If my right hon. Friend will, in the course of the later stages of this Bill, see his way to consider, and perhaps to meet, some of the criticisms which we make, we will, when we reach the Third Reading stage, give it a more cordial reception than we can give it at the present time.
§ 5.50 p.m.
§ Mr. Hamilton Kerr
The hon. Member for Westhoughton (Mr. R. Davies), in his lively if critical speech, divided hon. Members in this House into capitalist-minded and State-minded. Whatever section of opinion we represent, I am certain that all Members would like to congratulate the Government upon the Measure they have brought forward this afternoon. Flattering as the suggestion of the hon. Member for Westhoughton was, that this Bill was merely the product of the ingenuity of the Minister of Health and showed his Maskelyne-Devant quality of making something out of nothing, I 412 am afraid that that charge will not really bear inspection. The Bill certainly confers very substantial advantages upon an important section of the community. For the first time an entirely new class has come within the field of insurance—the smaller shopkeepers, assistants, clerks and even ministers of religion. Many of these people have come to expect a certain standard of comfort in their personal surroundings, and many of them possess considerable education. Probably the greater number of them occupy those detached houses which we see stretching in ever greater lines along the great arterial roads leading from our cities. If you went into their houses you would see substantial sets of furniture bought on the instalment system, perhaps from Drages, and if you went into their garages you might find a car. But in times of economic stress, very little stands between the apparent prosperity of these people and total indigence.
The statistical department of the London Press Exchange has given an extremely interesting analysis of the families of this country. It has divided the families roughly into three groups which I will call A. B, and C. The first group, A, comprises 8,642,000 families which earn under £4 a week; the second group, B, comprises 2,511,000 families who earn between £4 and £10 a week, roughly the class covered by the present Bill; while group C, the considerably more prosperous, consist of 616,000 families earning over £10 a week. As the present Bill covers those earning just £4 over to under £8 a week probably at least two-thirds of this class B will come within the category of the Bill. That class B represents no less than 21.3 per cent. of all the families of this country. An analysis of areas likewise shows interesting results. As might be expected, London, which has enjoyed prosperity for a longer period perhaps than any other area, shows the highest percentage of 25 per cent. Even South Wales, which for years has suffered the full bitterness of economic depression, can show 15 per cent., Lancashire 18.8 per cent., and Scotland, ever the home of thrift, 21 per cent.
I was extremely interested on looking through a book written by Colin Clark, University lecturer in statistics at Cambridge, by the figures of unemployment 413 in the black-coated class. In spite of much that has been written and said to the contrary, the figures show that unemployment in this class is nowhere near so prevalent as among unskilled manual workers. The figures which Colin Clark chooses come from 1931, a year of very great industrial depression, and in that period unemployment among unskilled manual workers was no less than 30.5 per cent. But black-coated workers, such as salesmen and shop assistants, showed only 7.9 per cent., and clerks and typists 5.5 per cent. This fact brings me to the main point which I would like briefly to stress in my speech. The hon. Member for Birkenhead, East (Mr. White), in his interesting speech this afternoon, told us how our social service system has grown up by piecemeal methods. We in this country, I believe, enjoy a unique and enviable position in regard to our social services, but these social services, admirable as they are, have, as the hon. Member says, grown up in the course of the last 30 years by piece-meal methods. As occasion arose, or as popular opinion demanded, successive Governments devised machinery to meet particular needs. I feel that perhaps the time has come, as the hon. Member said, to institute an inquiry over the whole field of our social services. How, for instance, does this new insurance scheme which we are adopting to-day, fit into the general scheme of our social services?
I would like to put myself for one or two minutes, firstly, in the position of a working-class man, and then of a black-coated worker, and try to enumerate with how many separate authorities chance may bring me into contact. If I am a working-class man and I send my child to school, or if my house is scheduled in a slum area, or if, through some misfortune, I require public assistance, I deal directly with local authorities, even when those local authorities, as often happens nowadays, are enjoying substantial grants from the national Exchequer. If, on the other hand, through some misfortune I fall out of work, and my insurance runs its course, and I come under unemployment assistance, local officers of the central authority, in this case the Minister of Labour, deal with my particular problems. Here again is a second type of organisation. But if I fall ill, or through my decease my wife is entitled to a 414 widow's pension, in all probability an approved society, working in co-operation with the Ministry of Health, will study my case. If I am fortunate enough to reach the age of 70, then officers of the Board of Customs and Excise deal with me—another authority altogether. I am entitled to a pension over 70 on a noncontributory basis, but I have to contribute towards pensions up to that time.
The black-coated worker who comes into this scheme enjoys the advantages of widows' and old age pensions but does not enjoy the advantages of his fellow worker of health benefit. Again there is an apparent division in the numbers covered by the various schemes. Unemployment insurance is calculated to cover two—thirds of the working population, including their dependants, but contributory pensions cover some 19,000,000 but not in every case the dependants of those insured. The working population of this country contributes towards health and unemployment insurance, but does not contribute towards education, housing, unemployment assistance or public assistance.
These few facts should convince us that the time has come for a survey over the whole field of the social services, to see whether some form of co-ordination is necessary, and, perhaps, whether certain classes have claims upon benefits which they do not at present enjoy; and, lastly, to see that the vast sums to be spent annually are spent to the best advaneage. This factor becomes all the more important when we realise, as the hon. Member for Birkenhead, East (Mr. White) said, that the age status of the population is changing. In the next 30 years we shall see a smaller working-class population supporting a larger insurance-receiving population. In fact the figures show that in 1931 of children under 15, there were 9,000,000, between 15 and 65 there were 31,920,000, and over 65 just under 4,000,000. But by 1961 the population will have changed to the following degree—under nine years, 5,500,000; between 15 and 65,28,800,000; and over 65,5,000,000, an increase of 1,000,000. Therefore, I feel that our social services, admirable as they are at the present moment, can bear looking into. Certainly the man who receives insurance must sometimes be extremely muddled by the number of separate authorities with which 415 he has to deal. He must feel something like the Scotsman who met a friend on the way to look for an undertaker because his wife was ill. He said, "Why man, are you looking for an undertaker?
It is a doctor you want." "Naw, naw man," he replied, "I can't afford to deal with middlemen."
§ 5.59 p.m.
§ Mr. Simpson
It would be ungracious not to recognise the extension of the advantages and benefits which this Measure confers. I do not propose to deal with some of its shortcomings, such as the discrimination between men and women, but to refer particularly to a section of people who may be voluntarily insured at the present time, but who will be excluded under the provisions of this particular Measure. The purpose of the Bill is stated to be an extension of the benefits of voluntary insurance, but there are other purposes of the Bill that are unfortunately not so clearly stated. There are restrictions and cancellations of existing rights that are a real disadvantage to tens of thousands of prospective voluntarily insured persons, and I do not think it would be unfair to say that the Memorandum to the Bill is nothing short of a misleading prospectus inasmuch as it fails to refer to these limitations as well as to the extensions. The Minister did not indicate why the extensions should not have been superimposed upon existing legislation, leaving existing conditions unaffected and giving the community the net advantage of the extension. It has been made clear that those who are already insured, voluntarily and otherwise, will be unaffected, but even in their case they must contract in in order to secure a continuation of their benefits.
At the present time health and pensions insurance arrangements are interlocked, and it has apparently been the specific purpose of the Government to break that interlocking for reasons that are not very clear. The Bill breaks that connection, and I fail to see why we should attempt in this Measure to cancel or interfere with advantages that have been conferred by previous legislation. Even if it is desired to terminate the interlocking arrangements and break into separate divisions the health and the widows', orphans' and old age pensions arrangements, why should it not be possible for those who 416 are already insured in that way to maintain their insurance if they desire and to take advantage of the break to contract out rather than be required to contract in? By a mistake, by misinformation, by indifference or ignorance, it may very well be that a number of the people who are insured in that way at the present time will lose the advantages they presently enjoy and find themselves at a serious disadvantage in a short time.
What is most important for people who are already members of statutory insurance superannuation schemes who are in excepted employment is that they will be precluded in this Measure from becoming members voluntarily of the health and old age pensions provisions. It is true that this Measure will open the gate and be an advantage to those who are in receipt of more than £250 per year. It will give an advantage to them inasmuch as they will be able to take advantage of the widows' and orphans' section for which they may not be eligible, but, at the same time, it will close the gate and be a serious disadvantage to those who are receiving below £250 and who, under existing legislation, can take advantage of health insurance and old age pensions provisions. There are approved societies that were set up for the purpose of catering for that class of person, and they will be closed down and destroyed under this Bill. For those with remuneration exceeding £250, the existing Act provides that widows' and orphans' pensions can only be maintained by their becoming insured for all these three purposes.
Many members of the railway clerical staffs do not become members of an excepted employment immediately. Some are compulsorily required to take up insurance, because they do not immediately on joining the employ of the companies become members of the superannuation funds. They are not at once excepted persons such as they will subsequently become on obtaining such membership. They are required to pay for varying periods, but not necessarily, 104 contributions, which will make them members. Under the 1929 Act they had to pay in that manner without any special benefit, and that Act really imposed a tax, for it was a real imposition on the people concerned without any contingent or subsequent benefit. Women clerks not only 417 had to pay that contribution, but a further tax because, when passing into excepted employment, they had been paying for widows' and orphans' pensions for which any subsequent benefit was extremely unlikely.
There must have been good and excellent reasons for giving excepted persons the right of voluntary insurance in the past. Otherwise, it would not have been conferred in the Acts as they exist. I submit that these good reasons still remain. Indeed, they become stronger in so far as there are continuing extensions of contributory insurance benefits. It is true that the people to whom I refer have provision through a contract with their employers for payment during sickness and for superannuation, but there are, in addition, under the insurance scheme treatment and other benefits that are not included in these private schemes. It seems to me that there is no sound reason why they should not be allowed, if they wish to have the opportunity, to become voluntary contributors for health and old age pensions by paying the amount which is required by way of premium.
This Measure is a reversal of the legislation and social policy that was initiated by a Conservative Government, was extended by a Labour Government, and was affirmed and consolidated in the Act of the National Government in 1936. It is a very desirable thing that everybody in the community should have the advantage of some kind of basic or minimum protection in all these forms of insurance. It seems to me, therefore, in this Measure this most extraordinary unfair, and indeed, an unadvertised phase of the present Bill, while it confers an extension of benefit on some sections of the community at the same time imposes restrictions and limitations on others, and it will certainly destroy approved health societies which are doing exceedingly useful work for their members and are a valuable asset to the social insurance of the community as a whole.
I hope that the Government will give attention to this serious phase of the present Measure, which is a real blot on its advantages and will destroy a form of insurance that is very valuable to people who are in statutory superannuation funds. It really gives a wrong impression compared with the favourable prospectus of 418 this Bill, which gives an unfair representation of its benefits because of these restrictions. Indeed the refusal to allow these people to take up voluntary insurance must be a substantial financial setoff to the much advertised gain to the other section which will come within the ambit of the scheme. I am not in a position to state the number of people who will be affected or the approximate amount of that saving, but it must certainly be substantial. There is no good reason for it, and I hope the Government will so amend the Measure as to allow the continuance of this valuable insurance to this considerable section of the community.
§ 6.11 p.m.
§ Mr. Maitland
I am glad to have the opportunity of joining in the general welcome which has been extended from all quarters of the House to this Measure. Several hon. Members have referred, and, I think, with pardonable pride, to the fact that existing schemes of National Health Insurance and old age pensions have withstood since their inception the many vicissitudes through which this country has passed. Since there have been many troubles of a financial character which might have affected the stability of existing schemes, it is evident that in the consideration of any scheme of pensions or superannuation, the first fundamental consideration should be that it is on a sound financial basis. As far as I have been able to judge from a consideration of the Bill, the Financial Memorandum accompanying it, and the Government actuary's report, I am satisfied that this Measure, like its parents, is founded on such a financial basis as to be able to survive the troubles to which it will undoubtedly be subjected.
I should like to refer but in general terms to one or two detailed criticisms which have been made. It will be recognised that in any scheme, whether it be for pensions or superannuation, one of the first problems always arises from the position of the initial entrants. In the case of a superannuation scheme introduced by an employer, the first thing to be done is to make suitable provision for the initial entrants, because the fact that they are initial entrants in itself creates a difficulty that is usually dealt with by the employer putting up the money. That is the way in which the initial entrants have been dealt with under this Bill. The Government, like the employer, have put 419 up the money. In this connection I would like to remind the House that not only the Government, but Members of the House have a double duty. We have to consider the beneficiaries, those whom we desire the scheme to benefit; we have also to consider the general taxpayer, and we as Members cannot shelve that responsibility by saying it is the responsibility of the Government. Nobody can suggest that the position of the taxpayer in this matter should not be considered. To my mind that supplies the answer to some of the questions of a detailed character such as: Why not income limits higher? And why not rates of contribution lower? Regard must be had, first, to the stability of the fund, and, secondly, to our duty to the general taxpayers.
I do not know whether I am being too bold, but I shall venture to give my opinion in regard to the difference in the Bill in regard to income limits between men and women. The apparent inequality struck me at once, and I began to ponder over it, and this was the conclusion I had come to before I had heard what the right hon. Gentleman had to say: In the first place, I did not in any way associate the Bill with the question of equal pay for men and women, and I feel that those who bring that forward are raising an issue with which this Bill was never intended to deal and does not in fact deal. The apparent inequality is rather more numerical than real. The Bill puts the income limit in the case of men at £400 a year. I visualised the type of man who would be covered by that provision, and thought of him as being in the main a married man with a family, and I thought of the many cases where this scheme will prove to be of real benefit to a man in such circumstances. Then I turned my mind to the other side of the picture and asked why the income limit had been fixed at £250 in the case of women, and came to the conclusion that the distinction had been drawn solely on account of the added responsibilities of the men who will be covered by the scheme. It is a differentiation not of worth but of responsibilities. After all, a woman with an income of £400 a year would he in a much better position to make provision independently for her old age, and I was particularly impressed by the statement of the Minister that an annuity which 420 would secure the particular benefit given by this Bill could be secured from independent insurance offices at the rate of, I think, 1s. 6d. a week at the age of 25.
Will the hon. Member tell us what the contribution would have to be if the woman, instead of being aged 25, was aged 40? Any insurance office would charge the woman 5s. per week for a benefit which she would get under the Bill for 6d.
§ Mr. Maitland
I am much obliged to my hon. Friend for that information, but it does not affect my main argument. I rest my case upon this point, and am prepared to stand by it, that in the provision that is made in this Bill consideration has been had specially to the responsibilities of a man, and I think it is a mistake that attempts should be made to bring into this Measure a question which has no relation to it. This legislation is being introduced to give help to the most needy and I would suggest to my hon. Lady Friends who have concentrated on one particular matter that they will find there are many classes of cases which have prior claims on their consideration.
I would turn next to the question of the costs which will fall upon the Exchequer. As Members of this House we have some responsibility for the burden that is imposed upon the Exchequer, especially as some of the charges which will have to be borne will not have to be met out of revenue raised by this Parliament; the task of making provision for them will have to be undertaken by succeeding Parliaments. The charges for which the Treasury are responsible fall largely under two heads. The main charge is in respect of the initial entrants. Those who have read the Government actuary's report will observe that it has not been possible to state precisely the exact financial obligations, but it is perfectly clear that the greater the number of people who come under the scheme the greater will be the amount which the Treasury will have to pay. I do not think that the Treasury have approached this subject in any parsimonious or niggling spirit; the impression I have gained is that they have made a real effort to deal generously with a social problem and to extend the system of insurance, which those in all parts of the House agree should be extended.
421 The Treasury commitments are really substantial. Two million men and women are eligible to come under the scheme. On the basis of 250,000 married men and 100,000 married women the cost to the Treasury will be £23,000,000, or a 30 years annunity of £1,200,000. If we double the figures and assume that there will be 500,000 married men and 200,000 married women the charge to the Treasury will be £43,000,000. I have not very much sympathy with those who feel they are in a position to regard £43,000,000 as a niggling and parsimonious sum, for I look upon it as a substantial contribution to a very worthy cause. There is the further contribution, for which the Treasury has made itself responsible, in regard to pensions over 70. Here again the estimates have been largely framed on guess work, but so far as any estimate is possible it seems to me that the Treasury responsibility might easily vary from £2,000,000 to £4,000,000 a year. I suggest that we, as custodians of the financial resources of the country, must admit that those are generous contributions.
Perhaps the main impression which a consideration of this Bill has left upon my mind is that it is a Measure of wide scope and generosity. As to its scope I have been struck by the variety of people who will be covered by it, the large numbers of small independent self-supporting people, ministers of religion, shopkeepers, farmers, clerks, dressmakers and music teachers. Some may say they do not like these stubborn independent people, but in our heart of hearts we must surely admire them profoundly, because we recognise that they are examples of that sturdy independent spirit which we all regard as a thoroughly British characteristic. They are types of the people who, as the Minister has said, often find themselves unable to provide for themselves the old age pensions which this Bill is designed to give them. Among the people with salaries of from £250 to £400 a year are most worthy and desirable citizens, many of whom have suffered great hardships; but I think the greatest value of this scheme is not represented in terms of pounds, shillings and pence but in the relief from the anxiety which arises in the minds of those who wonder what is to happen to them in their declining years—a relief which cannot be assessed in terms of money.
422 In addition to the financial features of the Bill as instanced in the treatment of initial entrants and the payment of pensions over 70, there are two other important matters which struck me as being very valuable. The first is that no arbitrary line is laid down, except in the case of initial entrants, where it was inevitable. Thereafter we have the very important concession that people can enter this scheme at any date which is convenient to them, and I am very glad that it will not be the case under this Bill, as has happened under other Bills, that people will lose the opportunity of joining the scheme because they have passed the period during which they were eligible. The second concession is the provision for treatment of arrears arising from sickness or misfortune.
I should like to express my personal appreciation of the action of the Government in bringing forward this legislation. I am sure that Members on all sides of the House welcome the fact that the improved state of our national affairs has made this Bill possible, and it is rather a striking coincidence that in the last three days of this week there have been introduced Measures dealing with our domestic and internal affairs which I confidently believe will prove to be of great value to our people. In commending this Measure, which I do with all sincerity, I should like to congratulate the Minister and his Department, and I would also particularly congratulate the Minister upon the lucid manner in which he explained the Bill to us this afternoon.
§ 6.30 p.m.
§ Mr. Logan
I will not say that I was enamoured of the statement made by the Minister, because it was a statement such as I expected he would make. My recollection goes back to the time about 25 years ago when I heard the right hon. Gentleman dealing with the question of National Health Insurance. I see in this Measure to-day a new revelation affecting the amenities and the social life of the nation. A new responsibility is being taken on by the Government, and the end of it may be revolutionary. I can see the passing away of the old system of insurance and State insurance taking its place. I have been an official of a society ever since the inception of the Act, but I say, speaking from the point of view of the nation, that it will be best for all concerned when that day comes, 423 although my livelihood as a general secretary is wrapped up in it. After 25 years' work and experience of the National Health Insurance Acts I can say, quite apart from the vested interest of the societies or of the insured persons, that the time has come when we ought to take account of such a scheme as this, which is of great national importance.
The old age pension is one of the main factors in the life of insured individuals. Most people are obsessed by the fear of old age. We have heard to-day of the loneliness of old age, but a more terrible thing is the penniless old age. It is a most dreadful thing to contend with. The spirit of unrest which is abroad to-day, whether among employed or employers, is aroused by the fact that there is no security. No one is sure that when old age comes that there will be any security, in the present conditions of competition, or that they will be able to sit by their own fireside in peace and comfort instead of having to pass their days in an institution. That is what concerns us. Anything which tends to the uplifting of our people or to bring a higher standard, though it may be small, is welcome. This is only a commencement. It is in its initial stage, and any criticism should be of a constructive kind. It is not only a question of the National Government, because this party may have to follow in their footsteps.
In dealing with a Measure of such importance it is essential that we should realise what is actually happening. The question of the equality of the sexes is of very small importance. To me, that is a matter of minor importance in contrast with the magnitude of the Bill which is before us. In my humble opinion, no such thing is possible as equality of the sexes. Equality means equality in all the burdens of life. It cannot be done, especially by one particular portion. The male portion in the battle of life bears the brunt. There are one or two places in the Bill where the change which is forecast may give rise to difficulties of administration, and it is to those difficulties that I want to call the attention of the House. I hope they will not be stressed in the propaganda associated with the new phase. If we get into our mind what the Bill means there can be no wrong thinking. The Bill deals with a class of person that never before came 424 within the ambit of this insurance. A special voluntary contributor is therefore being set up under the Act. That being so, it gives a flat rate entrance to the male of 1s. 3d., and to the female a flat rate entrance of 6d. for the first year. The rate will fluctuate with the age of entrance. No scheme can be beneficial or elastic unless there is the wherewithal to carry it on, and it has to be found by the income. That is true, whether in my home, the trade union, or the nation. The money has to be found, and if it is not in the till the thing cannot be done. The sooner we understand that, the better for all concerned.
We are told that this is a wonderful scheme, and that it is to cost a little over £1,000,000 per annum. Then, if I may bring in an irrelevancy, we are told that we are to spend £1,500,000,000 on armaments. With all due respect to the Minister I want to contrast those two expenditures. It is considered essential for the protection of the nation that we should spend £1,500,000,000 during the next five years, or £300,000,000 per year upon armaments, yet in 1937, in the British House of Commons, all parties welcome the wonderful Bill to make provision for old age and to give pensions to a particular class. Members of that class have helped to keep many people who have received benefits which they themselves can never obtain. They have never had the opportunity to make provision for themselves, and they could not go into any scheme. To-day their opportunity is dawning and they are coming into their own.
It has been said to-day that we are filling in the gap. I trust that the Minister will not get any bigger or have a swelled feeling because of any bouquet which I may give him in the language which I use. I am delighted to find that there are Ministers on the Front Bench who can produce a scheme of this kind to benefit so many homes in the land. I recognise that with this sum of money going regularly and surely into their homes, many people will have great benefit. The money was never more needed than it is in those walks of life where the income is small although the wants are also very small. The few extra shillings coming in will make a great difference. While I applaud the initial stage of the Bill, I would say that greater things could 425 be done. I do not want any hon. Member to think that because we are giving a widow's mite we are doing all that we should. We are the wealthiest nation in the world. It is a condemnation of all parties that while we must have armaments, and while manufacturers and others are making fortunes, the workers of the nation are not able to obtain the necessaries of life in their old age. That is a terrible indictment.
I do not want to speak of class war or to raise that question in any way, but, whether it be the case of my father or anybody else, if, in his old age, sufficient means are not going into his home, and if, when a person who has given his best to the nation reaches old age, no provision is made for him to have comfort at his own fireside, something is radically wrong in the state of society. It is for that reason that I recognise this Bill as a step in the right direction. [Interruption.] The Noble Lady never had her own fireside.
§ Mr. Logan
There are one or two important items in the Bill of which the Minister should take note. I do not want to go into questions of finance. I have read the Bill, and I want to point out what difficulties ought to be considered. In extension of the scope of voluntary insurance for widows, orphans and aged people, approved societies will not be affected, but the transitional regulations are likely to affect the existing and subsequent voluntary membership of approved societies. The right hon. Gentleman will follow my meaning. I refer to the special class of voluntary contributor which is the "C" class to-day. From conversations I have had I believe that a regulation will be issued notifying all members of approved societies who are voluntary contributors that they have the power of transferring to this State scheme. I want the Minister to pay particular attention to the difficulty which I see here. Whether we like it or not, vested interests have been created in approved societies. The State, the employers, and the employed are working in a tripartite arrangement. Until the State is prepared to take over the full responsibility of that organisation, the organisation must be kept going. Those bodies must carry certain responsibilities, but if you filch from one part of the scheme that particular portion which legiti- 426 mately belongs to the present organisation, the question arises whether compensation should be paid or whether you should not take it over holus-bolus.
Anyone with a knowledge of National Health Insurance will admit that, if you are going to allow under this Bill a special class of voluntary contributors, the very moment that you bring in another class, which has already been created years ago, there is a differentiation which you have to reconcile. I want to give a warning, if possible, to the nation, and to all voluntary contributors under the National Health Insurance scheme, to be very careful before they accept the scheme which is now before the House. It is not that I do not think that the special class for whom at present there is no scheme whatever should not get the full benefit of the present Measure, but I want to give a warning to those who are in National Health Insurance and who are voluntary contributors under the Act.
You have coming under this scheme men whose incomes are under £400 a year, and women whose incomes are under £250. A voluntary contributor under the existing National Health Insurance scheme will be able to apply to become a voluntary contributor under this Bill. I understand that he will be asked, does he wish to transfer to the widows', orphans' and old age pensions scheme? If such a proposition is placed before him, he will be confronted with this position: He is to be asked to take up the widows', orphans' and old age pensions contributory scheme, or he is allowed to remain in his National Health Insurance. I think the right hon. Gentleman said that a card would be issued which would deal only with the widows', orphans' and old age pensions contributory scheme. Those persons who are in the voluntary contributor class to-day will be able to transfer and go out, if they will, from the National Health Insurance benefits and take up the widows', orphans' and old age contributory pension scheme. That may bolster up the scheme, bringing what I would term the illegitimate into the legitimate channel, because this Bill is a Bill to deal with a special class who are not now covered by insurance, and those who come in from, so to speak, the "regular army" are coming in to bolster up a scheme which they have really no right to enter.
427 I contend that we have to be honest in this House. If the Minister is going to issue a notice to all the approved societies, intimating to every Class C member who is a voluntary contributor that he has the option under certain conditions of going out to get these benefits only in the new special class that is being set up, he must remember that additional benefits are being given by the approved societies, and that all insured men who are Class C voluntary contributors with incomes under £250 per annum receive medical benefit, but that, if a member transfers into this new class, he loses his right of National Health insurance as a voluntary contributor. He goes out, he is not entitled to get his medical benefit any more, he will not be able to get additional benefits, and those benefits that he has built up from 1912 until now will be gone for ever. I submit that, while propaganda is going on in regard to bringing in the approved society member, you ought to give to the member the same opportunity as the lapsed member of a society. He is not going to get very much benefit under either scheme, but under the approved society a lapsed member who was a voluntary contributor would be allowed the right of reverting and qualifying for Health Insurance benefits and old age pension within an approved society. I think there has been a suggestion that health benefits, general benefits, and all these other benefits, would be of great service and would be a saving to the State. There is no saving in regard to that class of person unless they get into an approved society or one of the special bodies that are operating. The Deposit Contributors' Act would be of no use to them, and I feel that, if the Minister would take that into consideration, it would be beneficial.
There is one Clause that is very acceptable, and if ever a provision was made to give an opportunity to people to qualify and receive benefit, to give them an easement, it is to be found in this Bill. Anyone with a knowledge of the provisions of the National Health Insurance Acts that deal with Class C voluntary contributors knows that voluntary contributors must pay 45 contributions per year under the existing scheme. Under the new scheme a man or woman can go down to 26 contributions per annum. Of course, there will be a reduction, but they will not be out of benefit, and that benefit can carry 428 on right through their life. I think I have placed before the Minister some practical suggestions for improvements, and I shall make some further observations if I have the opportunity on another occasion. I trust that this Bill may bear good fruit, because I see in it a wonderful asset for the nation.
§ 6.54 p.m.
§ Mrs. Tate
I am sure we are all glad that the hon. Member for the Scotland Division of Liverpool (Mr. Logan) has paid the tribute that he has to this Bill, and I think that Members in all quarters of the House are extraordinarily thankful that so fine a Measure has come before us and are glad to congratulate the Minister on the way in which he presented it, and I feel that it is a Bill which gave evident pleasure to himself. The hon. Member for Westhoughton (Mr. Rhys Davies) said that it represented State intervention. Certainly the State contributions are extremely generous, and we ought to be glad that under the National Government the State can afford to intervene in so generous a manner. How very different would the position have been had the Labour Government been in office. We should then have had no State intervention for these black-coated workers, for the State would be unable to afford help. The hon. Member for Westhoughton also said that the Bill was but a very paltry Measure, and that he belonged to societies which already gave far greater benefits than were to be had under this Bill. What a tribute to the capitalist system—
§ Mr. Rhys Davies
I was speaking of the co-operative movement, and that is not a capitalist concern.
§ Mrs. Tate
The hon. Member did not mention the co-operative movement but even had he done so, I think he will be the last to deny that they have traded, and traded successfully, under a capitalist system, and that only under a capitalist system would it have been possible to provide such benefits as are being given, as anyone can very clearly discover by a study of countries which are not capitalist.
I believe that the class whom we are bringing into insurance now is a class that has very real need of it. The Minister very rightly said that we are providing now for a class who, in the past, 429 have provided for others when they themselves had as great a need. If we are doing that, I think it is the more regrettable that there is in this magnificent Bill an extraordinary injustice to women. The Minister very rightly pointed out that the Bill gives great benefits to women—married women and widows. No one would deny that, but the merits of a Bill do not rest upon whether it gives greater benefits to a larger number of men or whether it gives greater benefits to a larger number of women. The merits of a Bill must depend upon whether it provides for those who are in need and whether it is just. The Minister has certainly not made out a case for justice.
He said that we must consider, when we are regarding these contributions, the dependants. We hear a great deal of men being a logical sex, but on Monday we are coming to this House to consider Ministers' salaries. May I ask whether we are going to consider them on a basis of dependants? Are we going, when we consider those Ministers' salaries, to decide upon one salary for a married Minister with children, and another salary for an unmarried Minister? I am aware that most of our Ministers have reached the age, when owing to the probably rather fortunate vanity of men, few of them have escaped the meshes of matrimony. Nevertheless I do not think we shall hear of the argument of dependants on Monday. What we are doing in one case let us do in another. Are we going in future to provide salaries and to provide benefits simply on the basis of family obligations and dependants? If so, let us do what the hon. Lady the Member for the English Universities (Miss Rathbone) has urged for many years—let us give family allowances. Let us either do that or pay people according to the merits of what their work is worth, and not on their dependants. Certainly do not let us begin introducing this policy by imposing indefensible conditions and restrictions on women. It is going to be extremely unfair to a class of women who can least afford to be so treated.
No one will deny that old age is very much harder for the woman who has had to support herself, and often a large number of relatives as well, although the Minister, apparently, does not accept that. A woman who has had all her life 430 to earn her own living has usually had to do so at a lower salary than a man in the same position would have earned. She has therefore not been able to save as much money as he probably could have saved. Old age for a woman, we realise, lasts longer than for a man, because she has four years longer expectation of life, and also old age for a woman, unfortunately, begins at an earlier age. No one will deny that it is very much more difficult for a middle-aged woman to retain employment than it is for a middle-aged man.
If this new policy were based on the fact that women earn lower salaries than men you could have no justification for it, for some of the women who are going to be affected by this are not the women who earn lower salaries than men. We are going to bring in small shopkeepers, dressmakers and music teachers. The small shopkeeper and the lodging-house keeper may be earning exactly the same amount of money as a man in a like profession. She is probably the only woman who has the opportunity of earning exactly equal wages with a man. A man is allowed to come into this scheme when he is earning less than £400, but he is, unfortunately, more likely than a woman to rise to a very much higher figure than £400 a year. He will probably eventually earn £600, £800 or £1,000 a year and be in much less need of this scheme than a woman who only in very exceptional circumstances is going to be in a position to earn more than £400 a year. I think it is a tragedy that when the Government is bringing in this really magnificent Bill, and when it has done so well that the finances of the country enable us to have such a Bill, that it should be marred by a hideous injustice and should be introducing a new principle that voluntary insurance is to be regulated by the amount of money earned with a differentiation between men and women. We have had injustice between men and women in the past, but it has up to now been in regard to benefits and contributions. We have never before had this wholly new principle brought in that even the salary they earn is to be used to debar women from benefit.
I believe there is another great danger. You will find a certain number of people in the future who will say to a woman "Of course we would like to raise your 431 salary, but it would not be to your advantage to do it; it would put you out of the scheme of insurance." That is a very real danger. It is an argument that is almost certain to be used to keep the wages of women, already much too low, down. I beg of the Minister to make this Bill, which is so good already, perfect by removing the inequality to women.
§ 7.5 p.m.
The hon. Lady the Member for Frome (Mrs. Tate) has put the case against one point in the Bill very clearly. Like the hon. Lady, I pay tribute to the Bill as on the whole a very useful and valuable long-delayed Measure. I was rather surprised when I first read in the King's Speech that the Government were going to single out this particular extension of the pension scheme for priority, because I am not certain that it is the greatest need. It is a great need, but we hope that this Bill will be followed by a Measure which will extend to the black-coated worker the general benefits of health insurance and unemployment insurance. The feature I most warmly welcome in the Bill is that it covers that extraordinarily neglected and amazingly patient person, the worker on his or her own account. That worker has always been left out, and has continued to pay taxation for insurance benefits which he or she has no hope of enjoying. I am, indeed, glad that this Bill recognises the needs of the workers on their own account.
As a University Member, I am particularly bound to welcome the Bill, because it will affect a considerable number of those I represent, professional men and women of moderate income, dependent, most of them, entirely on earned salaries and with no security that they will be able to make proper provision out of those salaries for their old age and dependants. So far I am wholly glad the Bill has been introduced. There is just one thing in which I should have liked to have seen the Ministry bolder. I wish that in considering the class of person for whom this Bill is intended they could have experimented on some system of higher or graded rates of benefit with correspondingly higher or graded rates of contribution, because, standards of life being relative, the provision made in this Bill is going to be only a small alleviation of the 432 hard case of a man Or woman in the professional or middle classes who falls on evil times. A widow's pension of 10s., an orphan's pension of the amount stated and an old age pension of 10s. is a very low level, and I believe that many of the men and women concerned would gladly have contributed a higher rate of contribution in order to secure a higher rate of benefit. I am not suggesting that for that purpose the State contribution should be increased. But I believe that the Measure would have been more useful if there had been higher rates of contribution and benefit so as to meet the standards of the people for whom the Bill is intended, without increasing the State burden. It has always seemed to me a curious thing about the insurance system of this country how we go on assuming that a flat rate of contributions and benefits is the natural thing and inevitable, when nearly every country in the world which is experimenting on the social insurance system has put aside the flat rate system in favour of graded contributions and benefits. This would have been a useful time to make a small experiment in that direction.
When the discrimination in the income limit between men and women was made plain by the publication of the Bill just before Easter, it came as a thunderclap, I think, to most of us who were anticipating this Measure. There was no explanation of it either in the Bill or the Actuary's Report, and so it was not until we heard the Minister's speech that we could see exactly on what that differentiation limit —quite a new feature in social insurance —was based. I was not taken by surprise by the Minister's explanation, such as it is. There could be no other explanation. Thinking it over, there was only one thing on which he could base it—the greater average family responsibilities of men as compared with women. Of all the Members of this House there is, perhaps, no one who is less likely than myself to under-estimate the value of that argument, such as it is. I should be sorry to calculate the mass of work and the oceans of ink and paper I have expended in trying to bring home to a neglectful public this very point of the burden of family responsibilities and the need that more should be done by the public to help men in bearing these family responsibilities. Of course, it is true that, taken on the average, a man has a greater 433 claim on his income than a woman, but just because I have given so much thought to that problem, perhaps I see more clearly than some people just why this particular instance of endeavouring to meet that problem is wholly irrelevant to it, and is based on a complete confusion of thought.
If this Bill had been a compulsory Measure extending to the whole class of insured persons within certain income limits, there would have been a ease—I do not think that it would have been a good case—for imposing a different income limit for men and women. But I would like to point out that this is a Bill for voluntary contributors, and it is not meant to cover the whole number of people within the class of persons who are eligible as contributors. That that is so is shown quite clearly in the Actuary's Report and the Minister's own statement. The Actuary, while admitting that no one could be certain what proportion of eligible contributors would contribute, estimates on the basis that it will probably be a proportion of one-fourth or one-fifth. He estimates the same for women. Both the Actuary and the Minister specially referred to the fact that it might be supposed that men would hardly ever contribute until they married, and were beginning to feel the need for making provision through this Measure. That all shows that the whole idea of the Bill is to provide not for everybody within a given class, but for those in that class who have special need for the protection of the Measure. Is anybody going to deny that while men and women have a different average of family responsibility there are plenty of women who have much heavier family responsibilities than have plenty of men, and who have greater claims on their income?
Under this Bill there will be thousands of women who are widows of uninsured men with dependent children to provide for, married women with husbands who have deserted them, or who are unable to work, with children to provide for, women with invalid husbands to provide for, spinsters who, with family claims on their salaries, are asked to keep an aged father or mother and have the greater part of the burden placed on them because brothers they may have have families of their own. The Minister made a special appeal to the bachelor to join, and join early, because though he was not very 434 likely to remain a bachelor, he would need the advantages of the Bill when he married, and had better join while it was cheap. He did not allude to the fact that the proportion of women who will never marry is very much larger, and that they very often have a much greater difficulty than married men in making provision for their old age.
The Bill takes account only of the salary at the time of entry into the scheme. A woman may enter if her income is not more than £250 and the man if his income is not more than £400. The hon. Lady pointed out that there is a far greater chance that later on the man's salary will rise to a very much higher amount, and you will have numerous cases where he is eventually earning a salary out of which he can make provision for his own old age and his widow and dependants without any aid from the State, and he is doing it partly at the expense of a woman with an income, perhaps, a fifth of his, who perhaps has more to do out of it. Another point that should not be forgotten is that the woman's expectation of life is more than a man's. She usually finds it much harder to retain her occupation until an advanced age, and in many occupations a woman over middle age finds it very hard to get a job. Then, while it is true that the burden of family responsibility on a man is heavy while his children are dependent, when they grow up they become an asset instead of a liability and in many cases, if he has not saved enough, he and his wife are able to take refuge in the house of a son or daughter and live at their expense, whereas a spinster has to live alone and look forward to a long, lonely, penurious old age. Therefore, I regret that in a Bill of this sort, which is intended to meet hard cases, there should have been this differentiation between men and women, which is certain to bear hardly on thousands of women who will find themselves excluded.
The Minister, I think, misunderstood one of the arguments addressed to him by some of the women's societies which have circularised him. They put the point, which is of course undeniable, that every woman who actually contributes under the Bill will be a far smaller charge on the Exchequer than a man. According to the Actuary's calculation, the charge on the Exchequer works out at £40 per woman 435 contributor and £70 per man contributor. The right hon. Gentleman seems to think that women were complaining of that and had failed to realise that, though the man got more out of the Bill, he also contributed at a higher rate. Of course the women knew that, and knew that the reason was that the man was contributing for widows' and orphans' pensions and for wives' pensions as well as for the more limited benefits for which women contribute. They did not want to complain about that, but they were making the point that the woman is a cheaper proposition for the Government under the Bill. It is all the meaner of the Government to try to cut down the cost of women even more by making this differential income limit. I hope that on reconsideration they will think better of it. The resentment that this arouses among women will be rather a surprise to them as time goes on. Thousands of women who will not themselves be eligible as contributors will feel the essential injustice of it. Everywhere where it is to the convenience and the profit of the State, or of the fund, or of the male contributor, to treat men and women on the same footing, it is done, but whenever there is a reason for picking out women, finding that they need less, or can contribute less, or that for some reason they should be treated differently, they are always treated differently.
Here is an instance of it. Women in many ways already are contributing a larger proportion of their incomes just because they have smaller families to keep. Take the case, for example, of a man and a woman with salaries, perhaps, of £300. The man is going to be eligible as a contributor under the Bill. He does not pay any Income Tax because the family rebates cut away all the Income Tax. The woman, if she has no children, pays a substantial Income Tax and, of course, pays equally with the man through indirect taxation on tea, cigarettes and the rest of it. She is debarred from coming under this Measure and, as time goes on, she may feel that her need of its benefits is far greater than that of scores of her male competitors who are earning more and getting more assistance from their children in their old age, and whose needs in every way are less than hers. In conversation with the Minister I said that if the Government are anxious to go on losing university seats, they have 436 taken a means admirably adapted to that end. In order to save a very small sum to the Exchequer, they are making a differentiation which will offend all the nurses, midwives, teachers, small shopkeepers, lodging-house keepers, dressmakers, hairdressers and all the trades that the Minister enumerated. They are all cut out because their earnings are rather less than a man's, who has, perhaps, less to do out of his earnings, and who may end up by being a very much richer person. They will bitterly resent it. I hope the Government will reconsider the matter and will introduce some change into the Bill which will give equal treatment to men and women.
§ 7.25 p.m.
§ Sir Richard Meller
The hon. Lady regretted that graded contributions and benefits were not introduced into the schemes of social insurance. Such a method would introduce great difficulties and would probably be impossible in a compulsory scheme. When a scheme is introduced, the Minister has to satisfy Parliament what is likely to be the probable contribution of the State and, if we were to have graded benefits and contributions according to the whim and fancy of the person who claimed to come into the insurance scheme, the Government could not come forward and say what the liabilities were likely to be. Moreover, you have in a compulsory scheme first of all to persuade people that the scheme is necessary, and then get them to agree that the contribution required is one within the realms of possibility for that class of person. The hon. Member for Ashton-under-Lyne (Mr. Simpson) regretted that the present scheme was not an extension of the existing insurance scheme. I do not quarrel with that, but we are dealing at present with the claims of a very deserving section of the community who feel that for a long time they have been left out of the benefits of the National Health Insurance scheme. It is true that in 1911 there was not that alacrity to join in the health insurance scheme, and the development for inclusion in insurance has come about very largely since the introduction of the widows' and orphans' pensions scheme. Past Debates have called forth a tremendous amount of sympathy for those persons whose benefits under the health insurance scheme were likely to be jeopardised, particularly benefits with 437 regard to old age and widows' and orphans' pensions.
The hon. Member for Westhoughton (Mr. Rhys Davies) complained that this was not an insurance scheme, and he quoted from a report of a Select Committee in 1825 dealing with Friendly Societies, an interpretation of insurance, "the combining or uniting with others to meet a contingency." If that is a proper interpretation of insurance—I do not disagree with it—is not this a combining or uniting together of persons to bear one another's burdens? It is not only the persons within the limits of £250 and £400 a year. It is the State, and all that is comprised within the State, coming forward to give such benefits, which could not be obtained in any other way. In the past voluntary effort has done a great deal towards providing against these contingencies, but voluntary effort, unfortunately, was never able to provide benefits on such a wide scale as we are getting under the national scheme. It is, indeed, a remarkable offer that is being made, and I am sure it is going to be taken up very gladly and very widely.
I should like to refer to one class that many of us have come upon since the War, who have felt that provision should be made for their old age but circumstances have changed, trades have gone, and they find themselves in a position very much inferior to that which they expected and are unable to provide a lump sum to purchase an annuity. I should like to point out that the contribution of 1s. 3d. for an initial entrant, as against the cost of benefit in the case of a man of 55 being 15s., that is giving 1s. for 1d.—a great difference between the Insurance Act of 1911 which gave 9d. for 4d. I see the daughter of the right hon. Gentleman the author of the Insurance Act of 1911 sitting in front of me, and I would like to coin another slogan, and say that this is "A bob for a copper." The benefit of 15s. for a flat contribution of 1s. 3d. is a tremendous benefit.
§ It being Half-past Seven of the Clock, and there being Private Business set down by direction of The CHAIRMAN OF WAYS AND MEANS under Standing Order No. 6, further Proceeding was postponed without Question put.