HC Deb 23 February 1966 vol 725 cc420-558

3.50 p.m.

The Chancellor of the Duchy of Lancaster (Mr. Douglas Houghton)

I beg to move, That this House approves the achievements to date and the aims of Her Majesty's Government to improve and develop the social services as rapidly as possible within the framework of the National Plan on the principles of a free National Health Service, comprehensive welfare services, a fair share of rising living standards for those in retirement, and the provision of contributory benefits and pensions based on earnings; and while welcoming the expansion and development of private superannuation schemes rejects them as a substitute for a comprehensive social security system. This debate is not, as far as I know, part of the Prime Minister's early warning system. It has been arranged, more or less in the ordinary course of business, chiefly for the benefit of the Opposition. We thought that they would welcome this opportunity to deploy their philosophy and new strategy on social security, and we welcome the opportunity of putting in a few words of our own. In recent months, we have had three instalments of the Conservative Party's revised thinking on the Welfare State, and we are sure that the House and country will wish to hear more about it. No political party in opposition lightly repudiates the things which it did in government, and that, I have no doubt, is why the Leader of the Opposition is taking the debate seriously; and, for other reasons, so are we.

The Times, to which we all turn for guidance in these matters, said yesterday that it would be deplorable if this debate were to lapse into political bickering. It is perhaps not a good omen that the right hon. Member for Leeds, North-East (Sir K. Joseph) has been dropped from the Opposition Front Bench team this afternoon, because he would have brought a thorough grasp of this subject to our debate. Instead, we are to have the right hon. and learned Member for St. Marylebone (Mr. Hogg), who as a shadow Minister is somewhat foot-loose and is reputed to be bored with inactivity, but now perhaps reassured, if not exuberant, at his landslide victory in the Time and Tide ballot for the future leadership of the Conservative Party.

Although he is not yet in the lead, we understand that he is to bring up the rear, which is an important rôle in the execution of all strategy.

Sir Harmar Nicholls (Peterborough) rose

Mr. Houghton

I have only just begun. The hon. Gentleman must not be so importunate.

The main feature of the new Conservative strategy is the scrapping of its own graduated pensions scheme, with, of course, accrued benefits preserved, and a switch to the compulsory extension—

Sir Harmar Nicholls rose

Mr. Speaker

Order. The hon. Member for Peterborough (Sir Harmar Nicholls), who knows that the right hon. Gentleman has not given way, must not go on asking.

Sir Harmar Nicholls

On a point of explanation. I was not certain that the right hon. Gentleman had heard me.

Mr. Houghton

I was saying that the main feature of the new Conservative strategy is the scrapping of its own graduated penions scheme, with accrued benefits preserved, and a switch to the compulsory extenion of occupational schemes to cover the whole employed population.

We on this side are as ready as the Opposition to end this bucket shop of a graduated scheme, which collects so much and pays out so little in graduated pensions. It is the biggest South Sea Bubble of modern times. I am sorry that the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) has left the Chamber, because he must mourn the passing of the scheme of which he was the principal architect some years ago.

Apart from the financial deceptions of the whole scheme, what makes it so ridiculous in terms of benefits is that nothing can apparently be done to maintain the real value of the 6d. bricks. Although the real value of the benefits has fallen during the past five years and flat-rate benefits have been improved roughly every two years, the extra pension for every £7 10s. contributed by men and £9 contributed by women still remains at the original amount of 6d. How long would this erosion of the real value of these paltry benefits have been allowed to continue? The mischief, I suspect, lay in the probability that if graduated benefits were improved it would be unfair to all those contracted out. The Conservative Government saw or found no way out of this dilemma.

So we, too, intend to scrap the existing graduated scheme, but certainly not in favour of a general switch to occuptional schemes as the way out. Occupational schemes are not the answer. Apart from all other objections, which are many, this new Conservative policy founders on one fact alone, and it is this: occupational schemes, however good, however universal, can be no substitute for a national scheme, and I hope to prove this to the satisfaction of hon. Members on the evidence that I will produce under four heads: first, coverage of occupational schemes at present and the leeway to be made up; secondly, the inadequacy of the pensions payable; thirdly, the problem of inflation and the absence of provision for pension increases in most schemes; and, fourthly, the problem of transferability of pension rights.

First, on coverage, precise figures are hard to come by, and quite misleading information is trotted out as fact. The best information available to me is this. Organisations having pension schemes now employ about four-fifths of the national labour force, but only half of that force is pensionable under those schemes. The main reasons are probably, first, the exclusion of women and of persons of youthful age or short service as being too mobile to be worth including in the scheme; and, secondly, the omission of manual workers, possibly on the ground that, in relation to their earnings, the National Insurance provisions are regarded as sufficient for them without supplementation. Although the numbers of pensionable employees are still growing, it seems unlikely that they will ever reach anything like 100 per cent. of the labour force.

Next, the inadequacy of pensions payable and the pace of maturity of private schemes. Since almost all private schemes are based on length of service and accumulation of reserves, the pace of maturity, which is all important, must be very slow. Just how slow this would be can be deduced from the amounts of pensions now being paid. The number now drawing occupational pensions is about 2 million. The number drawing pensions has doubled since 1956. There are 1½ million men and ½ million women, including widows. The amounts of pension payable range from less than 10s. a week to over £20 a week. About half of all those on occupational pensions today receive less than £2 a week and probably a quarter receive less than £1 a week. This means that probably half of all the 2 million on occupational pensions today are receiving a total combined pension, including National Insurance retirement pension, of less than £6 a week for single persons and less than £8 10s. for a married couple. Taking into account the addition for rent and special needs, these figures are not much above National Assistance level. In fact, many of these people are on National Assistance.

Another point is the extent to which occupational schemes are incomplete. For example, on the death of a pensioner there is normally nothing for his widow unless he has forgone some of his own pension to provide for this. Most pensions are too small to enable the pensioner to afford to give up part of his pension in this way. Nor do many schemes provide anything but a lump sum when the member dies in service.

Occupational schemes take so long to develop that they are no substitute for a national scheme. The great boon of a national scheme is that it can, and should, shorten the period to qualify for the substantive benefits of the scheme. Owing to late entry, many hundreds of thousands, if not millions, of people in occupational schemes today will never qualify for the full pension provided by their schemes. In many schemes, it takes between 30 and 40 years to get to maturity.

Thirdly, the problem of inflation. What does the "new strategy" say to this? On page 9, the booklet "The New Strategy for Social Security" states: …given reasonable price stability, sensible investment with a broad spread should enable occupational schemes to keep pace with price changes and pensions to be increased after retirement. That is not a strategy: it is a hope.

What does the record show? In the public sector, this is partly achieved by means of the Pensions (Increase) Acts. On neither side of the House, however, would we congratulate ourselves on having given satisfaction to public service pensioners in this regard. In the private sector, there is some augmentation of pensions at or after retirement, but less than half the schemes have so far any provision for this. Where it is provided, it rarely exceeds the scale of public service pensions increases. An adequate topping-up of pensions is generally regarded as too expensive for private arrangements and is practicable only under a national pensions scheme.

I come to the fourth point, that of transferability. There are about 60,000 different occupational schemes of every size and variety. Few of them are alike, though many have some features in common. The striking fact is that 90 per cent. of all those who leave pensionable employment do so after less than 10 years' pensionable service. Less than 5 per cent. of those who transfer to other jobs after less than 10 years' service have any preservation or transfer of pension. What happens in the majority of cases is that a lump sum refund of contributions is given, with or without interest. Many people are given no option, but a disturbingly large number of younger people prefer to take the cash.

I know that the "new strategy" states that Subject to a qualifying period of service, occupational pensions will be preserved on any change of employment up to the minimum standard specified. The minimum standard specified appears to be on page 8 of the pamphlet, which states that 25 to 30 would be the minimum age and that it would apply to those earning over £9 a week. Even if the minimum age for transferability was put as low as 25, however, and the qualifying service as low as five years, a high proportion of those who change their jobs would be excluded from any provision for transferability or preservation. The conclusion, therefore, is that under the "new strategy" many thousands of comparatively young people would sacrifice valuable accrued pension rights unless transfer or preservation was made obligatory in this area of the highest mobility.

I warn the House that for sheer complexity and baffling problems of standards and common denominators, the transferability of private pension rights is no foundation whatever for a national scheme. It would be absolutely crazy to attempt to make it so.

I stress, as did my right hon. Friend the Minister of Pensions and National Insurance the other day, that we have nothing against occupational schemes. Nothing that I am saying must be regarded as depreciating in any way the value of occupational schemes. The proposition in the "new strategy", however, is to make them the foundation on an obligatory basis of a national scheme. That is what I am criticising.

There are certain consequences of scrapping the existing graduated scheme. Here we come to what is, I have no doubt, the tiresome question in the mind of the right hon. Baronet the Member for Leeds, North-East of the financing of the flat-rate scheme, which is to be retained. The abandonment of the present graduated scheme would present a financial problem of some magnitude. The flatrate benefits are, as the House knows, heavily subsidised from graduated contributions to the tune of over £300 million a year.

How, then, does the "New Strategy for Social Security" propose to cope with this enormous financial problem? This pamphlet seems to be keeping all its options open, but one method which it proposes, on page 7, is to do away with graduated benefits but to keep graduated contributions. What a wonderful answer to the problem. I should like to be there when that is discussed with the T.U.C. Another option would be to keep flat-rats contributions for employees and have graduated contributions for employers only. Very well. I will go straight from Congress House to the headquarters of the Confederation of British Industry and see what they say about it.

A third way, however—another ingenious one which is surely the product of the brain of the right hon. Baronet—is to have a two-or three-tier scale of flat-rate contributions according to low, medium or high earnings but for, presumably, a one-level flat-rate pension. These ideas will, no doubt, lead to highly diverting discussions in various quarters if they ever get to that stage. It is no wonder that The Times, to which on this occasion I pay humble respect, says that the word for this is "inflationary".

I come, therefore, to my conclusions on the "new strategy". I say that there is no evidence under any of the four heads of examination which could possibly justify abandoning the present Government concept of a new national scheme based upon earnings and adjusted from time to time to take account of changes in real standards. I repeat that nothing which I have said in any way depreciates the value of occupational schemes.

No State scheme can satisfy every requirement. There is a partnership here that we would wish to foster and encourage. Occupational schemes and the State scheme can live together to give mutual support, but I repeat that occupational schemes cannot be an effective substitute for a national scheme.

It would be a profound mistake to impose upon occupational schemes, as the "new strategy" proposes, obligations and burdens which it would be quite wrong, if not impossible, for them to carry. On coverage, on the rate of maturity of pension, on the adequacy of the pension itself, and on the problem of inflation and transferability, a State scheme can meet requirements and it would be a grave mistake to turn back.

I ask the Leader of the Opposition, therefore, what are the trumpeters on the Front Bench opposite sounding now? Is it reveille or is it retreat? It is not a new strategy for social security. It is a new retreat from social security. This is not "Putting Britain Right Ahead". It is putting Britain right behind again. These are the clarion calls which the Opposition hope will gain support in any forthcoming election there might be.

Now I want to turn to our own aims for social security. [HON. MEMBERS: "Hear, hear."] Well, I have given the Opposition a pretty good measure of time. There is no selfish impulse in this debate at all. If hon. and right hon. Gentleman opposite wish to hear a closer examination of their scheme, then I am quite prepared to give it, but I am sure that both sides of the House are anxious to know more of our own aims for social security. Labour strategy for the future of social security lies in the opposite direction from the Tory new thinking.

We intend to replace the existing discredited graduated scheme and the flat-rate scheme by a new combined and comprehensive scheme of earnings-related benefits and graduated contributions. That is the principal job of the major review. There were some suggestions on the benches opposite in the debate last week that the major review is now overdue, and I see that The Times, once more, has been getting at me on this very point. "When are we to see it?" hon. Members are asking. Well, who are they to ask, who had nothing to show after 13 years of office except a miserable graduated scheme which they now propose to abandon?

But I would wish to stress to them something that I think is probably too readily taken for granted. The House has already seen the first fruits of the major review in the earnings-based unemployment, sickness, industrial injury, and widows' benefits which my right hon. Friend proposed to the House last week. This was a scheme which the last Government said they would bring in, but did not. We have given it priority for reasons which I explained in a speech in the debate on the Address on 10th November, 1965. We regarded this as urgently necessary as a contribution to the promotion of economic growth. It will support the Redundancy Payments Act which came into operation last December.

The House should not minimise the importance of a major break-through introducing for the first time in this country a scheme of social benefits related directly to earnings. There were many difficulties of policy and administration to be overcome, and this experience has proved extremely valuable and helpful in the work in progress on our proposals for earnings-based pensions. Nor should we underestimate the economic and social significance of this new scheme, because it is likely to cost about £70 million in the first full year, and contributions are being increased to match.

A later phase in the development of our plans will be a scheme for earnings-based pensions. We need time for this, and we need greater strength in the economy as well. It is a highly complex undertaking, involving fundamental change. We have to produce a practical scheme with all the figures filled in—not a party political broadcast. We spell it out in paragraph 7 on page 204 of the National Plan. But time is not the only factor, and it looks as if the scheme may be ready before the economy is strong enough to take it; but take it it will, because we are going to get the economy strong enough to do so.

Here I must refer to the self-imposed discipline in real public expenditure by which the Government have resolved to keep growth in social and other expenditure within the available resources. The House heard the statement made by the Chancellor of the Exchequer a little earlier, and the White Paper entitled "Public Expenditure, Planning and Control" is now available. The figures are pretty clear from the National Plan, pages 202–4, and also paragraph 27 and Appendix II of the White Paper.

We start with the cost of the existing level of benefits in 1965–6, which totals about £2,400 million. The growing numbers of pensioners and children entitled to benefits mean that, even if there were no further changes in benefits provided, the total cost would increase by 1969–70 to rather more than £2,500 million. That is to say, provision is made for natural growth in the existing scheme, rising to an additional expenditure of about £150 million a year by 1970. But the National Plan provides for an increase by 1969–70 to £2,920 million. It provides for expenditure by 1970 of £387 million more than would be needed merely to maintain the current value of the existing benefits for the rising number of people qualified for them.

Provision for rising prices is already made in the basic provision for social security expenditure. The £387 million I have mentioned is provision for expenditure on top of the rising cost both of increasing numbers and of higher benefits to take account of rising prices. In other words, the £387 million by 1970 makes provision for improvements in real standards of social benefits.

Paragraph 8 on page 204 of the National Plan says: How this— that is, the £387 million— can best be applied, apart, from the introduction of earnings-related unemployment and sickness benefit…will need to be considered in the further stages of the review of social security. Earnings-related short-term benefits will absorb something like £70 million a year. That will come out of the £387 million.

Further increases in the real value of cash benefits, whether National Assistance or National Insurance, or both, before 1970 will also be debited against that financial provision, and this is where decisions on priorities will have to be made. I can obviously give no forecast of those today. The House needs no prompting from me as to where the choice will lie.

Mr. Paul Dean (Somerset, North)

The right hon. Gentleman has given specific figures of the increased expenditure which he expects between now and 1970. Can he translate that into easier terms of expenditure, and tell us how large that is likely to be—how large the increase for the pensioner?

Mr. Houghton

I cannot translate this into possible, and still less into the probable, rises in the level of flat-rate pensions because this provision is for social benefits and not solely or necessarily for those with flat-rate benefits. I stress again that this is an area of choice.

I also want to stress that there is no room within the limits of expenditure which we have set ourselves in the interests of sound financial policy for any significant expenditure before 1970 on the new national superannuation scheme on which we are working at the present time. We cannot move faster than our economic growth will allow. We said so in 1964, we have said it many times since, and I repeat it again today.

Looking at the timetable for the run up to 1970, we intend to put the scheme in a White Paper, followed by what, I fear, will be a big, complicated Bill, to draft regulations and other arrangements for administration and to fix the operative date—all of these processes to be completed by 1970. On this timetable we aim at producing a White Paper some time next year. The timetable is governed by the disciplines of public expenditure as well as by the size of the job. As the Motion says, our plans for the improvement of the social services are part of the National Plan, and our social services will be developed within that plan. Faster progress depends on faster economic growth.

I now turn to one of the most burning questions of any modern survey of social security arrangements—benefits according to need. I want to add a postscript to the statement that I made in the course of my speech on 10th November last year about an income guarantee. The House will remember that this was postponed in the Chancellor's announcement on 27th July last year. The income guarantee, together with many other things that we had resolved to do, became a casualty of the bankrupt condition that we inherited from the last Government. [HON. MEMBERS: "Oh."] Is it not tiresome for right hon. Gentlemen opposite to keep hearing this? I am dealing with the restiveness of the Opposition Front Bench at the moment. This is a fact, and it has to be taken into account. Our aim is to attain the highest level of contributory benefits, as of right, which economic growth and public desire will make possible, and to combine with that an acceptable and regulated method of providing family and individual endowments which take account of need.

This is our continuing policy. Our proposed income guarantee, which I described in pamphlets before the last election, would have proved acceptable, and although, for both economic and administrative reasons, we could not proceed with it in its original form—of Income Tax in reverse—we are anxious to do what we can to help those whose resources are less than they really need.

This brings me to the future of National Assistance. Here we must face the fact that behind such phrases as "helping those in need" or "more generous help for those in need" are sensitive human feelings. No one feels that he has gone up in the world when the National Assistance Board officer has left.

With all the Board's understanding of human dignity, and with all its desire to overcome any reluctance to ask for help, there are considerable gaps in this sector of social security, and we have been trying to find out how big these gaps are, and why they are there at all. It is no good talking loosely about helping those in need unless there is a simple and dignified method of doing it. Aid, of whatever kind and to whomsoever it is offered, must be acceptable, and the method of giving it must, above all, be acceptable.

The House will recall that last year the Government carried out a survey into the circumstances of retirement pensioners. No fewer than 9,000 people were interviewed. There is still some work to be done on the detailed analysis of the results, but the broad picture is now clear. One of the main objects of the inquiry was to discover the number of pensioners who could receive National Assistance if they wished, but were not doing so.

In general terms, the findings corroborated those of earlier studies into this matter. The survey showed that there may be about 700,000 retirement pensioners who would receive National Assistance if they asked for it. However, for more than half of them the gap between their resources and their needs, measured by the National Assistance scales, is probably being met either by income which the Board disregards or by help from relatives or friends, particularly those living in the same households. For many of the others the gap appeared to be partly but not wholly met in this way. Nevertheless, there may be up to 250,000 who really need help, but have not asked for it.

The survey tried to find out why people did not apply when they could do so. Of those in the sample about one-third said that they were managing all right and so had not applied. Not much more than one in five said that their pride would not let them apply, or that they disliked charity, or were unwilling to lose their independence, or gave similar reasons. That proportion is reassuringly low.

Surprisingly, however, three out of 10 showed ignorance or misconception, which had prevented their applying, and the proportion was higher among younger pensioners than older ones. The Government and the National Assistance Board have been trying to overcome this problem by a publicity campaign over the last six months, and it seems that they have had some measure of success. My right hon. Friend the Minister of Pensions and National Insurance gave the campaign her public support. There are now nearly 50,000 more retirement pensioners getting the benefit of the pension supplement than there were last June. This is appreciably more than would be expected in the normal course of events.

But the survey shows that we must do better still. We must seek to change the misconceptions associated with National Assistance, however wrongly, in the minds, or perhaps the hearts, of many people, and we have been working on this problem for some time. Our conclusions are nearly complete.

My right hon. Friend the Minister of Pensions and National Insurance will, therefore, shortly be in a position to lay proposals before the House for a scheme to take the place of National Assistance, aimed at securing a better understanding of this part of our social security provisions. One of the key features will be to create a Ministry of Social Security in which the old distinction between National Insurance offices and National Assistance offices will disappear, and the name "National Assistance" will disappear for ever.

While it will remain necessary to look into means and needs to ensure that the non-contribufory benefit which will replace National Assistance is channelled to the right people, we shall change the methods so as to turn the new benefit for the elderly and the long-term cases into something more akin to a pension, payable on a stable basis without frequent inquiry and for long periods. The new Ministry will do more on its own initiative to see that people coming to retirement get all the help, in terms of cash or services, to which they are entitled.

If the House will be patient for a little longer my right hon. Friend the Minister of Pensions and National Insurance will deploy this new approach to the problem. [HON. MEMBERS: "When is the election?"] I have no idea when the election will be, but whatever is to be done will be done shortly—and we shall be here to do it.

Mr. Geoffrey Howe (Bebington)

Will the right hon. Gentleman acknowledge the gratitude which hon. Members on this side feel at the extent to which he has now swallowed at least one half of my right hon. Friend's new policy in its entirety?

Mr. Houghton

If that is the hon. and learned Member's idea of one half there must be something wrong with his arithmetic.

I want to say something about households on low wages. In his recent speech at Birmingham the Leader of the Opposition gave a moving account of the drab and deprived lives of families with low incomes. The tragedy of these impoverished households is, he said, the children. But these tragic families are no new discovery, even for the Leader of the Opposition, surely? They have been in this condition for years and little has been done by the previous Government to help them. It is possible that more than 200,000 families exist on incomes below the National Assistance level, and the tragedy of these households is the children, frequently in the larger families.

Family allowances were last improved over nine years ago. We are now engaged on an urgent study of the whole problem, and have been for a long time. This study goes far beyond family allowances, and takes account of all forms of family support, including educational maintenance grants, school meals and welfare milk.

The Motion refers briefly to the National Health Service. On this, the Government have removed the prescription charge as a major step towards the re-establishment of the concept of a free Service, to which we adhere. On hospitals, the Health Ministers have been reviewing the much publicised but unrealistic Conservative hospital plan and are now devoting substantially greater resources to hospital building than our predecessors planned. The Minister of Health has worked patiently towards removing, wherever possible, the discontents of hard-pressed family doctors. The former Government, in past years, underestimated the nation's need for more doctors and that accounts for the shortage now.

As a first step, we aim at getting an extra 250 medical students a year within the next couple of years. We want family doctors to be happier in their work. Their patients will gain from this and it will promote better health and temper all round. The Minister of Health has produced far-reaching proposals to assist doctors to acquire more suitable premises where they can practise with adequate ancillary help. All this has been explained to the House by my right hon. Friend. I think that it should be stressed that present discussions with the profession represent the first thoroughgoing overhaul of this part of the National Health Service since it began.

I want to refer in my concluding paragraphs on this theme to a lead-in which the right hon. and learned Member for St. Marylebone gave me. I see that in a book, published by Right Angle Books, on the Welfare State there is a quotation from the right hon. and learned Gentleman, who said that the Welfare State can best be regarded as: …the cumulative product of our usually belated responses to three distinct crises in economic history stretching over the best part of 400 years. The right hon. and learned Gentleman thought that the first of these crises was the Agrarian Revolution of the 16th century, leading to the Elizabethan Poor Law; the second, the prolonged Industrial Revolution, whose various phases called for health and factory legislation, and the third, he said, was the Great Depression, when full employment and security against loss of earnings was made the ark of the covenant of those falling below certain living standards.

I think that there is a fourth crisis upon us now, to which there should be no excuse for our "usually belated responses" of the past. This crisis is that of the new industrial and scientific revolution which is yielding rising standards of living for most of the people who now set their heart on economic and social security for themselves and their families far beyond the concept of bare subsistence of the Beveridge era. In this age, the luxuries of yesterday are the commonplace comforts and amenities of today. The social aim of a high-wage economy is far more than an ultimate safeguard against poverty or hardship. It is the positive maintenance of contemporary living standards throughout life against all hazards and especially in retirement, which is the biggest threat of all.

Therefore, the Welfare State is in this new crisis and that is what the debate is about. Our approach to it is not one of belated responses. The party opposite has turned its back on any responses at all to this new challenge—[HON. MEMBERS: "No."] Oh, yes, it has—[HON. MEMBERS: "Oh no it has not."] Oh, yes. With that in mind, I think that I can sum up in a few sentences—[HON. MEMBERS: "Hear, hear."] I am sorry that this is depressing hon. Members so much.

The Government's achievements to date are impressive by any standards of purpose and activity in recent social history. There was certainly nothing to match them in the 13 years of Conservative government—nothing at all. Within the first 12 months, we had improved all social benefits on a massive scale. If we got our priorities wrong, I hope that the Leader of the Opposition will say so. Nine million people have reason to thank the Labour Government for doing what the former Administration had not planned to do and had no intention of doing. In the same time and circumstances, they would have no idea of doing it on such a liberal scale.

Measures which Conservative Governments refused to take—like the belated adjustment of the 10s. widow's pension and the abolition of the earnings rule for widows—we did take. For problems which Conservative Governments found too difficult—like the belated improvement in the conditions of 27,000 old compensation cases—we found the remedy.

The Welfare State is a noble and humanitarian ideal, for which Her Majesty's Government will continue to strive. Public opinion endorses this concept and we are sure that, given the opportunity, it will do so again. We are determined to work for its expansion and development. Thirteen years of Conservative apathy and more recent signs of sabotages—[HON. MEMBERS: "No."] Perhaps hon. Gentlemen would like to hear it again. Thirteen years of apathy and more recent signs of sabotage can then be cast into the limbo of lost opportunities.

4.37 p.m.

Mr. Edward Heath (Bexley)

I beg to move, to leave out from "House" to the end of the Question and to add instead thereof: while regretting the failure of Her Majesty's Government to establish a proper system of priorities in the social services, affirms its determination to maintain and improve the welfare state, and to provide help for those most in need". There are, I think, three great debates on which the British people ought today to be engaged. The first is the organisation and management of our economic affairs, on which everything else depends. The second is the shaping of British foreign policy and the defence effort which is required to support that foreign policy. The third is the basic philosophy underlying the social services and their future development. The first two, we understand, we shall be debating shortly. The third is the one on which we are concentrating today.

All three may well be debated in the General Election, which the Secretary of State for Defence announced yesterday in his excitement, in a rather unusual and what might be deemed somewhat unconstitutional way. Of course, if we had had any doubts about it, we have noted all the announcements of the last few days. I kept a page of my notes clear to write down the announcements which the Chancellor of the Duchy of Lancaster was to make this afternoon in similar vein, but how disappointed his right hon. and hon. Friends behind him are at the lamentable speech which they have heard from him this afternoon.

The right hon. Gentleman's speech had two interesting pieces. First, he paid a very warm tribute to all the achievements of the Conservative Administration over 13 years and pointed out that it was these achievements which provided one lot of the problems for the social services. Secondly, he went on to take at least two of the proposals which I put forward in what is now known—thanks to the right hon. Gentleman—as the Birmingham manifesto, which he described as the abandonment of the Welfare State. It would appear to be a somewhat odd method of abandoning it, when he has taken these proposals and used them himself.

What has not emerged from this lamentable speech—the long catalogue of reviews, studies and examination, all of which, no doubt, are necessary and may, indeed, be admirable, but so far have brought forth no fruits—is any relevant philosophy or strategy about the social services as a whole to deal with Britain in the second half of the sixties and the coming seventies.

I put ours forward in the speech at Birmingham. I intended it as a serious contribution to a national discussion of these problems. The right hon. Gentleman says that it was this which led to this debate. I am delighted to hear it. We welcome the debate. We thought that perhaps he had other ulterior motives behind it. It is now apparent that, whatever his right hon. and hon. Friends thought would emerge, he had nothing to bring forth from the lockers in this case.

I wanted the debate because I wanted to debate our social philosophy and strategy for the rest of this decade and after. The Beveridge Report, a very famous document to which reference has already been made today, was published nearly 25 years ago. Serving in the Armed Forces at that time, I can remember the excitement which it caused even though I was engaged in Army matters and was simply trying to keep in touch with things at home. I remember the discussions that went on, often through the much criticised A.B.C.A. It remains in mind that in the dreariness and bloodshed of war one felt that here were signs of hope and faith for the future. This did more than any other single document on social security in our history to establish a basis for our social services.

But the Beveridge Report was fashioned in an atmosphere of war-weariness, fear and flagging national energy and confidence. It was a concept based on statistical information at least 30 years old and very often older. It was concerned with the state of Britain in the 'twenties and 'thirties. But today we are living in a different country. The entire background has now changed. What must happen is that the Welfare State as it has been created over these years, including the early work of Mr. Churchill and Mr. Beveridge, as they then were, in the Ministry of Labour and elsewhere, must be brought up to date to do a better job for a different time and different circumstances. It is to that problem that we in this House ought constantly now to devote our minds.

I believe that today our people want two things, two fundamental things, in the social services. First, they want those most in need to receive additional help. The right hon. Gentleman has rather criticised the idea of people most in need receiving additional help, but we all know about this from going round our constituencies. One thing which has impressed me since 1950, when I became a Member of this House, has been to notice at each election the diminishing number of particular groups of those who were suffering hardship or difficulties of various kinds. They were gradually diminishing. One could not get rid of them all at once, but gradually they diminished, and one felt encouraged by this. As the right hon. Gentleman says, some groups remain.

What is even more important, surely the right hon. Gentleman will agree, is that fresh groups have emerged. It is to these groups that we have to devote our thoughts. The crying need today is to reshape our social policies so that more help is given to the groups which are most in need—the elderly, the lonely, the widows, the children deserted by their fathers, and many others. What has happened is that they have been left behind as islands of poverty and hardship with the advancing prosperity of the country as a whole. The right hon. Gentleman has, quite rightly, paid tribute to that prosperity, but it is that prosperity which has created the problems.

I believe that to talk of it in these terms is not to be critical, as the right hon. Gentleman rather tended to criticise, but that it is, indeed, the language of humanity, because we understand the difficulties and problems of these people. But it is also the language of priorities, and it is the language of priorities which is important if one is to bring them help or enable them to have a less difficult time.

Some of us—some on this Front Bench today—were engaged as our first work when we came into the House of Commons on the publication of a small booklet called "One Nation". It still bears reading today, 16 years later, because it was based on the language of priorities as well as the language of humanity. Such success as we had in the social services in those 13 years was due to the fact that our Administration—and many of those who wrote "One Nation" were in that Administration—followed that language to help those who most needed help.

Mr. E. Fernyhough (Jarrow)

But was not the right hon. Gentleman a prominent member of the Administration which gave £80 million relief to Surtax payers at the same time as it doubled the prescription charges?

Mr. Heath

It is fair to raise that point. This is not only part of the debate about social services. It is also part of the great debate about the economy of the country and what will give it the dynamism which will allow us to do what we want for the social services. That is the whole point. [HON. MEMBERS: "Answer the question."] I believe that those—they include members of the Government—who denounce this approach to the social services today, as the right hon. Gentleman did, are rigid, backward-looking, unrealistic and old-fashioned.

The plain fact is that when today people are confronted with the choice of whether the Government should insist that there should be free prescriptions for those who do not need them as well as for those who do, or whether, instead, we should have better hospitals, they prefer to have better hospitals with special arrangements for those who need the free prescriptions. This is the plain fact. All hon. Members on the Government side of the House know it. What they were doing—[Interruption.]

Mr. Ted Leadbitter (The Hartlepools) rose

Hon. Members

Sit down.

Mr. Deputy Speaker (Sir Samuel Storey)

Order. If the right hon. Member for Bexley (Mr. Heath) does not give way, the hon. Member for The Hartlepools (Mr. Leadbitter) must not persist.

Mr. Leadbitter rose

Hon. Members

Sit down.

Mr. Deputy Speaker

Order. The hon. Member for The Hartlepools must behave himself.

Mr. Heath

I did not realise that the hon. Gentleman was so ignorant.

This is the plain choice which faces the people today in their philosophy on the social services. For the right hon. Gentleman and his colleagues, it is back to Beveridge in its original form, a blanket coverage for everything, whether it is required or not. This is the fundamental distinction between the two parties and the two sides of the House.

The second thing which our people want is the standard of the social services as a whole to be raised considerably, whether it is in the National Health Service, in education, or in pensions when people retire. What they are feeling more and more is that the social services, their organisation and their efficiency, have not kept pace with the changes in our modern society and with the greater prosperity and affluence which we have. This is what they feel, and hon. Members opposite are agreeing with this by nodding.

This is the language, I believe, of efficiency and satisfaction. Again, it is the language of priorities, and it is here that the Government have got their priorities wrong again. It is only by allowing the prosperous society—or, as the right hon. Gentleman called it, the affluent society—an opportunity to make greater provision for itself wherever possible, only by allowing—indeed, encouraging—it to make better provision for itself where it is able to do so, that the State itself will muster the resources to provide better standards for the social services as a whole. This is undoubtedly true, and it is one of the facts which the right hon. Gentleman and his right hon. and hon. Friends refuse to acknowledge.

Who would be the first today to take a fresh look at the whole system, to gather round him the young enthusiasts with fresh ideas who are in tune with these changes in our society? Who would be the first to use all the resources of the voluntary societies as well as the resources of the Departments of State if he were alive today? The first person to do this would be Lord Beveridge himself. He would be the first to say, "Look at the achievements—now let us refashion this to meet the needs of today."

We ourselves said in our election manifesto that we would review the whole Beveridge system. The Chancellor of the Duchy has apparently been doing it—at least, we understand that that was his task. We have done it ourselves with our own resources as well. I suspect that our resources are greater than those of the Chancellor of the Duchy of Lancaster, hidden away, as he is, in his monastic cell, with two secretaries—and I do not mean that—[Laughter.] Perhaps even "monastic cell" is the wrong description—but with no power over social service Ministries, and only getting, I suspect, such information as they are pleased to let him have, which will suit their own cause and their own jealous Departments.

What the Government need to do is to review and create new policies. At the last election they had two fundamental planks, and they were both vote-winners—let us not disagree on that; we both agree that they were vote winners. They have both been abandoned. One was the minimum income guarantee. There was an absolutely unqualified promise that it would be introduced immediately—not according to the economic situation or economic conditions. All the other promises were qualified—let us be quite fair—but not the minimum income guarantee. That has now been abandoned, and what the right hon. Gentleman said this afternoon shows that it is absolutely dead.

Then there was the question of half pay on retirement. This it was that the right hon. Lady now the Minister of Pensions and National Insurance said had been worked out in detail when the party opposite was in opposition. But it has not been introduced and, in fact, it was not worked out. So it has now been abandoned also, and the Labour Party is now left absolutely naked, and it ought to be ashamed.

The right hon. Gentleman knows that we on this side always had doubts about the minimum income guarantee. It deals with incomes, but not with needs, and this is a fundamental objection to it. And it means an administrative machinery which would deter most people, or a good many people, who ought to be using it—far more than those figures the right hon. Gentleman has given today. Half pay on retirement was, I think, the latest abortive scheme of the right hon. Gentleman who is the Minister of Housing and Local Government. He has had two and a half or three abortive schemes, and they have all now gone the same way, without any help from the House of Lords. And that is the end of this one.

I put forward the fruits of our own work in the speech at Birmingham, which I believe was a comprehensive policy. It was immediately attacked by the Minister of Housing and Local Government with a nasty smear. He accused us of abandonment of the Welfare State and a return to the means test. He did not even accuse us of going back to Beveridge. He said that we were going back to 1931. That is his mentality at once. He cannot consider a comprehensive policy on its merits and examine it bit by bit; he just has to smear as hard as he can—a nasty, emotive, sneering speech.

The right hon. Gentleman was paid during the war, and he has written very fully about it, and has congratulated himself, quite rightly, on it, to deceive and trick our enemies, and he is now being paid, not as Minister of Housing and Local Government, but by his party, to deceive and trick the British people. It has all happened before. The Prime Minister himself, in his election address in 1951, said: The Tories, while paying lip-service to the Welfare State, would, in fact, slash the social services in their mad desire to reduce taxation on the rich. That is what the right hon. Gentleman repeated in his own speech.

In 1951–52, expenditure on the social services was £2,000 million; in 1962–63, it was £4,602 million. In 1951–52, the proportion of the gross national product going to the social services was 15.9 per cent.; in 1962–63, it was 18.2 per cent. The right hon. Gentleman's remarks will not have any more effect on the people than did the remarks of the Prime Minister in 1951.

Mr. David Ginsburg (Dewsbury) rose

Mr. Heath

No, I must get on.

Let us look at the main items with which we ought to deal in this situation. We are moving, and have been moving, rapidly into a middle-income society—[Interruption.] When we have average earnings of over £20 a week we have moved a long way from the figures of 1935, which Lord Beveridge used. The right hon. Gentleman has always criticised affluence, but, at the same time, he has tried to get himself re-elected by putting forward proposals for greater affluence. That has always been the contradiction. My criticism is not of affluence, but of the fact that there is not a sufficient growth of wealth in the country, and that people are being left behind.

I do not believe that in Britain today there is a sufficient realisation of what sort of life is possible in modern terms. People do not have the realisation of the life that is possible for Australians, New Zealanders, Canadians, Scandinavians, or many Europeans today. They do not have a conception of it, and until they do get that conception I do not believe that they will make the necessary effort to make that sort of life possible; the sort of life in which wear and tear is removed and in which there is real opportunity for creative leisure. That is why I want the people to have a wider concept of life as a whole as well as of the social services.

If we are to deal with these groups which have been left behind in the move forward to prosperity, there is one general theme on which I want to express my views to the House. What we must have is a more flexible use of our resources to help those people who are in difficulty and hardship, and want help. The right hon. Gentleman mentioned, quite rightly, that there were many thousands of households below the income level which the N.A.B. considers to be the minimum. Of course, the minimum is always relative, and has been raised very considerably. But the right hon. Gentleman did not say that there was anything he proposed to do about it.

There are the low-wage earners with the young families—and particularly those with below-average pay and above-average families. These are the people in the group the right hon. Gentleman mentioned whom we know are in particular trouble; and it is the tragedy of the children—and not only of the individual children. It is a tragedy that this is a vicious circle in which there is poverty, hardship and misery—and very often in the same area as there are large classes and few teachers—and it leads in some cases to delinquency. So the process goes on. This vicious circle has to be broken.

Then there are the long-term unemployed. Their numbers are not enormous, as the right hon. Gentleman knows, but it is important, I think, to remember that one-third of all the children helped by the National Assistance Board came from a household of the long-term unemployed. There are the elderly poor. Some of them are just above the Assistance scales but, at the same time, they have little savings, because in the 'twenties and 'thirties, the time of which Beveridge wrote, they had little opportunity to save.

These groups are well known to the right hon. Gentleman, but there are the new groups emerging and perhaps he would like to listen to what they are. I know that he knows his Beveridge; perhaps he would like me to bring him up to date. They are the chronic sick and severely disabled, whom the right hon. Gentleman's wage-related benefits Bill will not help—

Mr. William Hamilton (Fife, West)

What do the Tories propose to do?

Mr. Heath

To bring up the standard of the whole of the social services. [HON. MEMBERS: "Oh."] Do not get so excited. If the right hon. Member for Easington (Mr. Shinwell) listens patiently, he will hear a great deal.

Then there are the families in which the father has died, or has deserted the wife. In 1961, there were 180,000 children in this category. Then there are the elderly and those who have looked after their parents all their lives, the single daughter who, perhaps, has to live without any real financial support. [An Hon. Member: "New groups?"] Some are more deserving in present circumstances than the older groups. Of course, this was not catered for by Beveridge.

Then there are the widows whose husbands died relatively young and who find it difficult to return to work and to get a decent standard of living. There are anomalies about fixing the age at 50—

Mr. Ioan L. Evans (Birmingham, Yardley)

Will the right hon. Gentleman give way?

Mr. Heath

No. I will not. If the right hon. Member for Easington does not want to hear about them, he need not stay here.

Mr. Evans rose

Mr. Deputy Speaker

Order. The hon. Member must not persist in this way.

Mr. Heath

Then there are those, well known to us all, whom I would call the stragglers, self-reliant and thrifty, who maintain high standards and are always having to make ends meet because they are just above the line at which the N.A.B. regulations are drawn.

Mr. Leadbitter

How many are there opposite?

Mr. Deputy Speaker

Order. We are having too much recumbent comment this afternoon. Hon. Members must not be so thin-skinned. They must listen to the debate.

Mr. Heath

This means that whereas the emphasis over the past 25 years since Beveridge has been to a very great extent on flexibility, we need now to shift the emphasis on to the special cases I have been discussing. The right hon. Gentleman may have more of them. Let us use our resources much more flexibly. Sometimes it will have to be done by cash, which the Minister does not appear to like doing, sometimes with special arrangements for cash, sometimes by tax allowances, and sometimes by special care.

My right hon. Friends made proposals when discussing the Bill upstairs in Committee which would deal with some of these cases. All those proposals were turned down by the Minister on the ground that we must await the review, but we have been given no indication of when it will come forward. We are being asked to take no kind of action about these groups until something which may never appear, comes. This is wrong and it shows that the right hon. Gentleman has not an understanding of using such resources as he can get from the Chancellor flexibly to deal with these cases.

The chronic sick could have a special benefit of £1 a week after the first six months to deal with their particular problems. Widows could have particular arrangements if one removed the rigid rule about the age of 50. I welcome the fact that the right hon. Gentleman dealt with the question of the 10s. widow. It would be possible to deal with these people in exactly the same way. It would be possible also to help the low earners with special allowances for children. But the right hon. Gentleman has shown that he is committed to dealing with family allowances over the whole field.

This is a clear example of where, in this prosperous society, we cannot show that people need increases right across the field, but we can show that low-wage earners, especially those with above the average number of children, require increases. Why not take special action to deal with them? I put this to the right hon. Gentleman—[HON. MEMBERS: "Means test."] The hon. Member for Penistone (Mr. Mendelson) does not seem to realise that means test is just an empty cry. His right hon. Friends are today operating a means test on the National Assistance Board. The hon. Member does not seem to realise that the minimum income guarantee is just a means test.

Mr. J. J. Mendelson (Penistone) rose

Hon. Members

Sit down.

Mr. Deputy Speaker

Order. The hon. Member for Penistone (Mr. Mendelson) must remain seated.

Mr. Mendelson

On a point of order, Mr. Deputy Speaker. Is it not a well-established custom that if a right hon. Member on the Front Bench refers to another hon. Member directly he should give way?

Mr. Deputy Speaker

That is not a point of order.

Mr. Heath rose

Mr. Mendelson

Give way.

Mr. Deputy Speaker

Order. The hon. Member for Penistone must remain seated.

Mr. Mendelson

Running away.

Mr. Heath

The hon. Member for Penistone is a student of politics. At one time he used to lecture on politics with great distinction, but what is affronting British people today, when they are thinking about these matters, are the empty parrot cries which he spends his time uttering.

Mr. Mendelson rose

Mr. Deputy Speaker

I hope that I shall not have to ask the hon. Member for Penistone not to do this again.

Mr. Heath

Then I come to another group where we believe that action ought to be taken in the Bill which originally was introduced by my hon. Friend the Member for Abingdon (Mr. Neave) and which is now to be introduced by my hon. Friend the Member for Honiton (Mr. Mathew). That is a Bill which would affect a particular group of 200,000 people. I understand that it is possible from figures provided, although they cannot be absolutely accurate, that between 25,000 and 50,000 of those who would have been eligible for that help have died since the Bill was filibustered on a famous occasion by the Paymaster-General.

I was hoping that the right hon. Gentleman would say today that the Government would themselves support that Bill. The right hon. Gentleman is one whom we respect for his interest in these matters and for his integrity. We hope that he will at least prevent his right hon. Friend the Paymaster-General from doing a similar filibuster on this occasion.

Mr. William Hamilton rose

Mr. Heath

If the hon. Member for Fife, West (Mr. William Hamilton) is claiming to be responsible for that filibuster himself, I will give way.

Mr. William Hamilton

No. I wanted to ask the right hon. Member what advice he has given to his hon. and right hon. Friends on the Opposition Front Bench, who, when they were Ministers, did nothing about this matter, but, in fact, advised the House to reject a similar proposal.

Mr. Heath

I am giving the same advice that I am giving to the Government because I think it right that the Bill should be supported.

Then there are the retired Service pensioners, military and civil. They should be brought up to the 1956 level, which is not what the right hon. Gentleman has done in his Bill, because then it would remove a whole mass of anomalies and an immense amount of friction. These are all discriminations in favour of these people. This does not mean the abandonment of the Welfare State; it means improving the Welfare State.

We should discriminate also—I said this at Birmingham—in favour of those particular areas in the country which have the most difficult problems—those with bad housing, bad schools, oversized classes, those things which lead to rootlessness. [HON. MEMBERS: "Oh."] What did I hear? Hon. Gentlemen really should not jeer, because what I heard with the greatest pleasure was that when the Prime Minister himself went to Birmingham he decided to announce that this was desirable. A fortnight later he followed in my footsteps and, in that guidance to the Press with which we are all familiar, said that he had read about it two days previously and had decided to go to Birmingham and announce it.

The other way in which we must be discriminating and flexible is in shifting taxpayers' and ratepayers' money from purposes which can be left to people to do privately to purposes where only the public can carry out the task. Obviously, the main place here is in subsidised rents for council houses. The Family Expenditure Survey showed that half of all households with over £30 a week are paying under £2 a week in rent for council houses. Can the right hon. Gentleman or his hon. Friends really justify that for a moment in any form in the social services today, when we have such crying needs for more housing, for more schools, for more hospitals? In fairness to the right hon. Gentleman, he does not try. The day after my Birmingham speech he wrote an article in the People. If it was not written by him, it was ghosted, I suppose.

The Minister of Housing and Local Government (Mr. Richard Crossman)

It was an interview.

Mr. Heath

It is headed: This is Dick Crossman's Promise. The other heading is this: Action at last. And about time too! We agree with that. The right hon. Gentleman then said this: Charge the rich man £1,000 a year rent—that will sort the problem out. That is what the right hon. Gentleman wants to do, but he is not doing anything about it. All he did was to criticise my Birmingham speech without putting forward a proposal for dealing with this question.

Why does not the right hon. Gentleman deal with it—because he has not got the guts to do so, to use the fashionable word. Every Tuesday and Thursday afternoon at Question Time we have the somewhat unedifying spectacle of the Prime Minister publicly revealing what he is pleased to call his guts. Now that we are all aware that he has got them, would it not be better if he used them and did something with them? This is what we expect.

The second main theme which I put before the House is that what we ought to try to do—[Interruption.] This really has become a very interesting social services debate. What we ought to do is to reduce the reliance of the individual citizen on the State and give back to individuals, wherever possible, the freedom and opportunity to provide for themselves. We should encourage them to do that, whether it is to acquire a home of their own because of pride of ownership—there is every indication, as hon. Members know, that the great majority of people want to own a home of their own—or whether it is a pension of their own chosen by themselves with which no one can interfere.

At the moment, the right hon. Gentleman and his hon. Friends are urging everybody in the country to work harder and have greater productivity. They are even going so far as to try to introduce more incentives for people to do this. What is the point of all this if people who follow their advice are not then able to a greater extent to do what they want with the proceeds of their own energy?

What an extraordinary thing it is that hon. Members opposite should challenge the idea that we should return to greater dependence on individuals and that we should all do more to stand on our own feet. This is what the right hon. Gentleman and his hon. Friends are doing—challenging the whole concept of individuality for the people. The British people prefer to help themselves rather than be helped. We should foster self-reliance and family ties as well as community ties.

From the point of view of housing I have put forward three proposals which I wish to repeat to the House, as to how we can encourage home ownership. First, we believe that it should be possible through the building societies to help those who have mortgages, but who do not pay taxes at the full rate. This would deal with this particular problem and enable them better to own their own homes. Secondly, we believe that we should help those who accumulate deposits and who wish to buy a house by a capital scheme to help them with their deposits. Thirdly, we believe that we ought to be willing to reintroduce the scheme to help with the purchase of pre-1919 houses. These are three positive proposals to help ownership. I believe that they are of the utmost importance. Again, they are a form of social service and a form of discrimination which we believe in, because it would be helping those who are prepared to help themselves.

Next, there is the question of the occupational pension scheme. The Chancellor of the Duchy of Lancaster dealt with this very fully today. My right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) put it forward in considerable detail in the debate on the Address. Today the Chancellor of the Duchy of Lancaster raised some points which I will try to deal with. We believe that this is a good idea, because better terms can be secured out of an occupational pension of this kind. There are better benefits and greater choice. The right hon. Gentleman argued against this today. We have worked this out in detail with expert actuarial advice and we put it forward as a serious scheme worked out in detail, quite unlike the schemes which the Minister of Housing and Local Government put forward to the electorate at the last election.

I want to emphasise, because there seems to be some misunderstanding about this, that these schemes are on top of the State basic scheme. The right hon. Gentleman would have found this out if he had read my Birmingham speech properly. It is absolutely clear in it.

Mr. Ivor Richard (Barons Court)

It is not in it.

Mr. Heath

It is. We say that in addition to the basic scheme there should be occupational schemes. [Interruption.] Let us agree on it now. This is the whole point. It was absolutely clear in the speech my right hon. Friend made on the Address and it was absolutely clear in my Birmingham speech. Therefore, it is not the abandonment of the universal scheme, nor of the Beveridge scheme, nor of the Welfare State.

Mr. Richard rose

Mr. Heath

No. I shall not give way. I will look at my speech later. It has been absolutely clear from the beginning. It is in "Putting Britain Right Ahead" and it was also in my right hon. Friend's speech. It is in addition to the basic scheme.

Mr. Grossman

As the right hon. Gentleman has rightly said, I tried to sum up his Birmingham manifesto as fairly as I could. I summed it up in words I will now quote. I want to know in what way the right hon. Gentleman thinks these words are an unfair description of what he has said this afternoon, or what he said in his Birmingham speech. I said: Under a Tory Government, he now reveals, a flat-rate pension"— that is the present universal one— will be kept at bare subsistence level and everyone will be forced to become members of privately-financed pensions schemes. He tells us that they have all got to be brought in and you can only abolish poverty by putting the pensions scheme on top of the flat rate, i.e. the flat rate is below subsistence. In what conceivable way did I misinterpret what the right hon. Gentleman said?

Mr. Heath

I can tell the right hon. Gentleman very quickly, but what he has proved is that it is absolutely clear that the scheme is on top of the basic scheme. [HON. MEMBERS: "Answer."] Let me deal with the right hon. Gentleman's specific point. There is a basic scheme and there is nothing there which says that it is subsistence or below subsistence.

Mr. Grossman rose

Mr. Heath

No, there is nothing—because that is not the intention. We have always kept the basic scheme above subsistence, and while we were in power it rose faster than the cost-of-living and, indeed, the earnings of the ordinary population These are facts and the right hon. Gentleman has no justification whatever for saying that we intend to keep the basic pension at subsistence level, and he cannot find anything in print to show that.

Mr. Grossman rose

Mr. Heath

The right hon. Gentleman can make his point when he winds up the debate.

This has been a carefully worked out scheme with the best actuarial advice and we do not believe that the right hon. Gentleman's objections are valid. There are 12 million people out of 20 million in such schemes at the moment. Therefore, this has gone more than half way, according to the Comptroller and Auditor General's Report for last year. Secondly, on the question of adequacy we propose to lay down a minimum for these schemes to ensure that they are adequate.

It has been made absolutely plain, also, that this would include widows and it would be on the lines of a capital sum of £1,000 which they would get for investment in income-producing securities. Therefore, from this point of view we do not accept the right hon. Gentleman's argument. From the inflation point of view, we believe that these schemes have a better chance of keeping up with inflation—not the sort of inflation we shall have from the right hon. Gentleman, or one of his successors—but any reasonable inflation. We are advised, also, that from the point of view of transferability this will work as well. We shall examine the right hon. Gentleman's points and any evidence that he adduces, and anything that he likes to give us we will study because we are intent on this proposal.

Mr. Crossman

I should like to save time on the reply to the debate and answer the right hon. Gentleman on this matter now. He says that I was unfair in saying that he wanted to keep the flat-rate scheme at subsistence level. If I understood him rightly, he said that that was absurd, because we should remember how good it was during 13 years of Tory rule. But does not the right hon. Gentleman know that the flat-rate scheme under the Tory Government had to be brought up to the National Assistance level? It was below that level. I therefore could not understand what he meant when he said that it was a subsistence level.

Mr. Heath

I made the point absolutely clear that we always raised these pensions faster than prices, and, indeed, faster than earnings, proportionately. This is sufficient guarantee to the right hon. Gentleman on the point that he makes.

From the point of view of financing the flat-rate scheme, the Chancellor of the Duchy of Lancaster is right. We have proposed that there should be a transfer of the cost of this to the employer's contribution, exactly in the same way as is done in European countries. As the present Government are priding themselves that in their taxation system they are moving towards Europe, this is one example which they can follow. We believe that this has the further advantage of bringing about economy in the use of manpower, which is desired by the First Secretary, and that it will help us to make better use of our resources as a whole.

I want to finish with some particular proposals. First, one has to have a strategy to carry through these policies, as well as constantly watching the situation to see whether new cases of discrimination in favour are required. This is why we propose to combine the Ministry of National Insurance with the Ministry of Health, bringing in the National Assistance Board, abolishing the title, and making it into a Welfare Executive. This is not, as has been alleged, just an organisational change for the sake of tidying up Whitehall. It has the definite purpose of bringing various means of meeting need, both in cash and in care, together.

The right hon. Gentleman has said that he is accepting two-thirds of this proposal. He is not bringing in the Ministry of Health. This is a matter which can be debated from the point of view of reorganisation of government, but we believe that it is more feasible and more worth while to make this proposal when we are making a change. We are glad, however, that the right hon. Gentleman is to do this, because we believe that it will be of great help in the welfare services.

Local authorities and voluntary services have a great part to play and we propose an invitation to local authorities to do the cross-fertilisation which is necessary in the exchange of views between them and in keeping them all up to the level of the best. This is another matter which the right hon. Gentleman indicated. He said that I was setting up an inspectorate to go round and look into the means of individuals. How could he possibly get that idea?

It is described as an inspectorate to look into the work with the local authorities, to keep them up to scratch. In fact, I compared it with the Inspectorate of the Ministry of Education. Why cannot the Minister treat the matter seriously? Once again, he just made an ass of himself.

In voluntary services, far more needs to be done to encourage groups of young people to do very worth-while tasks. We all know towns and cities in our constituencies where this work is now being highly organised. The main thing is to have specific jobs to which they can devote their energies. This work can be helped by grants on condition that the work is finished and by other forms of encouragement. The main thing is to get the social priorities right. As the right hon. Gentleman said, there is need for greater development of hospitals. There is less spent on hospitals today, because right hon. Gentlemen opposite introduced free prescriptions for everybody. As a result, less is being done for the hospitals than otherwise could have been done—and this is what priorities mean.

The same thing applies to education. Technical and university education is being held back, and, at the same time, the National Plan provides for a vast increase in expenditure on school meals by 1970. In a prosperous society do hon. Gentlemen opposite say that that is justified? They are holding back technical and university education at the same time as there is a mass of expenditure which is indiscriminate and not wanted everywhere. The priorities, therefore, are wrong.

The real problem is how to raise the standards of the rest. This is the major problem with which we are confronted and to which we have to confine our resources. I return therefore to the fact that a key to all this is to get the priorities right and to see that where people want to be self-reliant they have the opportunity of their own house, their own pension, their own treatment—whatever it may be. We should discriminate to help those who are most in need.

The Chancellor of the Duchy of Lancaster ended with very eloquent remarks about the country today, and in many ways I agree with him. When we are discussing the Welfare State and the social services it should be remembered that the Welfare State is only part of Britain today, though a vital part. There is all the rest of the country which needs to be dealt with. There are all the old cities which need to be rebuilt. There are still the slag heaps. [HON. MEMBERS: "Oh."] There is no point in hon. Members sneering. I did as much as anyone in the North-East to help get the slag heaps removed.

Mr. Leadbitter rose

Mr. Deputy Speaker

Order. If the right hon. Gentleman does not give way, the hon. Gentleman must resume his seat.

Mr. Heath

There are all these things needing to be dealt with. We need to use our country better for leisure and recreation. We need to give people better opportunities to live a life of quality in which they can enjoy books, music, plays and all the other things. Therefore, when we maintain our determination not only to keep the Welfare State, but to improve it, let us realise, also, that this is only part of the great task of creating, all together, a better country.

5.32 p.m.

Mr. Kevin McNamara (Kingston upon Hull, North)

Coming here from the North-East, I wish, first, to thank hon. Members on both sides who have welcomed me. In particular, I thank the hon. Gentleman opposite who offered me a regular pair after the General Election. I am only too happy to think that hon. Members opposite feel that the future of the Labour Government is so secure. I thank those hon. and right hon. Members who worked so hard to get me here, my hon. and right hon. Friends and, especially, hon. and right hon. Gentlemen on the benches opposite. If only they had stayed in Hull, North, a little longer, had spoken a little more and had worked a little harder, I might have had a decent majority.

I am particularly fortunate in following Mr. Henry Solomons as Member for Hull, North. I speak here from personal knowledge as a friend for not only did I follow him to the House but I voted to send him here in October, 1964. In that short time, despite being dogged by ill health, which was not helped by the rigorous disciplines of the first Session of this Parliament, Henry Solomons won the respect and admiration of his constituents by his untiring efforts on their behalf. People whom I meet and letters in my post speak an eloquent tribute to the work which he did on behalf of the electorate of Hull, North.

My constituency is situated in a proud and famous city, famous for, and proud of, its rôle in the constitutional and political history of our nation. In 1642, to preserve the political liberties of the subject and the rights and privileges of this House, it slammed its gates in the face of King Charles. In 1964, because it realised that political liberty can be freely exercised only against a background of social security, it returned three Members to these benches.

The theme throughout my by-election campaign was the need to organise the nation's resources to achieve social justice and the proper recognition of the dignity of the individual and the sanctity of family life. To achieve these ends, it is necessary to organise the resources of our country, to use them to pull down the slums, to build schools and hospitals and to extend and improve the whole range of our social and welfare benefits.

In the election campaign, as we on this side—hon. Members opposite did the same—trudged in the snowstorms the grim streets of parts of my constituency, its sprawling slums, its many terraces of damp overcrowded houses, houses without internal sanitation and many with only an outside tap, we saw the evils of an early industrial unplanned England, evils which hon. Members opposite were not only prepared to tolerate but to accentuate by the passing of the 1957 Rent Act, which allowed Rachmanism to develop. No wonder that the people of West Central Ward, Paragon Ward, Park Ward, and Botanic Ward were, apparently, without hope. But they were not, in fact, without hope, for in another part of my constituency where, apparently, the television cameras and the newspaper reporters did not penetrate, there could have been seen the Orchard Park development where the progressive Labour Council is building a fine new estate of houses, of good schools, of old people's homes, and of modern welfare centres. It is a new development of which any council could be proud.

But there is a tale to be told about this estate. When Hull Corporation first negotiated to buy the land, it was to cost approximately £70,000. When right hon. and hon. Members opposite were in Government and, eventually, gave the corporation permission to buy, the 1959 Act had been passed and the land cost not £70,000 but £500,000. This is why I was particularly proud, on the day when I first took my seat in the House, that I went through the Division Lobby to vote for the Second Reading of the Land Commission Bill.

Hon Members opposite talk eloquently of turning pensions over to private enterprise, and there is a positive fear in many parts of the country that they intend to do the same with the National Health Service. In the autumn of last year, a doctor in my constituency, because of the frustration he felt after years of neglect of general practice when the Opposition were in power, tried to establish a private scheme. We costed it on the basis of the doctor's proposed charges and the cost of drugs as supplied to the National Health Service. We then compared those costs with the direct cost of the National Health Service to the ordinary person, and we circulated the results of our calculations in a leaflet distributed among my constituents on behalf of our former Member.

We prepared this leaflet in question and answer form, and some of the questions and answers are most revealing. First, under the heading, Cost of private medicine outside the Health Service for a family with two children there are these questions and answers: Q. What will it cost if we do not visit the doctor during the year? A. 9s. a week. Q. What does the present National Health Service cost? A. 3s. 4d. a week if you pay a National Insurance stamp.… Q. What will be the cost if the doctor pays two visits to one of my children? A. Between 10s. and £1. Q. What is the cost under the National Health Service? A. Nothing. Q. What if the doctor prescribes for my child a 2 oz. bottle of penicillin? A. At least 10s.—probably more. We also costed various ailments. For instance, the treatment for diabetes is insulin and the cost of private treatment to last one week would be 4s.—but nothing under the National Health Service. For heart trouble, the cost of private treatment by Lasix tablets at the rate of one a day would be 50 tablets for 32s 6d.—but nothing under the National Health Service. For bronchitis, the killer disease of the North, treatment with Ledermycin would cost 16s. 4d. for a four-day course—but under the National Health Service, nothing.

In a well known, mildly radical Left-wing reformist paper called Tribune, there appeared in a letter this week the following verse in a song entitled "The Blue Flag". The first verse epitomised for me the social philosophy of the benches opposite. The verses are to the tune of "Maryland, my Maryland" and the first verse goes: The People's Flag is truest blue, What Crossman says is just untrue, The Welfare State is here to stay For those who can afford to pay. Of all hon. Members in this House, I least of all want an early General Election. Perhaps that is why no one asks me. But if we are to have one, there is no issue on which I should like to fight it more than the social policies of this party and of this Government.

Let us consider what has been achieved in these 16 fruitful months after 13 sterile years. For homes, the linchpin of any social policy, we have had the Rent Act, the Land Commission Bill, the Rating Bill, the new reforms of housing subsidies, the National Housing Plan and proposals for leasehold reform.

For health, we have had the abolition of the National Health Service prescription charges, the new charter for general practitioners, now under negotiation, and a realistic hospital plan. For social security, we have had a whole range of increased benefits, together with wage-related benefits for unemployment, sickness and widows. Considering all this, Mr. Speaker, I rejoice at the prospect of joining battle with the parties opposite.

Speaking on Second Reading of the National Insurance Bill, the hon. Member for Braford, West (Mr. Tiley) spoke of the North "Hell" by-election. I understand his feelings and can assure him and his right hon. and hon. Friends of an equally warm reception throughout the whole country when it is decided by the Prime Minister to seek an extension of the Government's mandate.

I was advised that it is in the tradition of the House that a maiden speech should be temperate, moderate and non-controversial. I trust that I have not transgressed that tradition of this honourable House, of which I have been privileged to become the newest Member.

5.43 p.m.

Mr. Airey Neave (Abingdon)

I congratulate the hon. Member for Kingston upon Hull, North (Mr. McNamara) on his maiden speech. Highly controversial though it was, it was none the worse for that. He was in combative mood, as he might well be after his recent battle. But when he next speaks, perhaps the reply to attacks on this side of the House will be slightly less good-natured. Nevertheless, what I say now to him I say in all sincerity.

I was delighted to hear my right hon. Friend the Leader of the Opposition say that he supports the proposal contained in the Private Member's Bill that I initiated in the last Session, but for which I was unable to achieve a Second Reading. That Bill was to pay pensions out of the National Insurance Fund to old-age non-pensioners, and I am glad to hear that the Opposition Front Bench proposes to support the almost identical Bill of which my hon. Friend the Member for Honiton (Mr. Mathew) is due to move the Second Reading on 25th March.

I was extremely disappointed that, on the other hand, the Chancellor of the Duchy of Lancaster, a man of sympathy and compassion for old people, did not mention the subject, although he is well aware of it. I hope that the Minister of Housing and Local Government intends to refer to it.

Mr. Crossman indicated assent.

Mr. Neave

I am glad that the right hon. Gentleman is nodding and indicating that he will reply. I propose to devote my speech to the subject and to ask the Government to take action as early as possible.

It is a crying scandal that 200,000 old people are completely excluded from National Insurance. There is great concern about this on both sides of the House and I hope that the right hon. Gentleman will have something constructive to say about what the Government propose to do. We may have our different methods and, indeed, we may differ perhaps fundamentally in our approach, but we must concentrate on people who are really in need. This group of old people certainly come within that category. Before the Government or anyone else indulge in self-congratulatory Motions on the Order Paper, we should know what action is to be taken to remedy this most unfair situation, which should not be allowed to continue.

The position of these old people has become particularly acute during the last two or three years and warnings on both sides of the House have been given about this. The Government can have no possible excuse for not taking urgent action. It may be that this development in the Welfare State is a legacy of the past, because the Labour Government excluded these people by the 1946 Act from the National Insurance Scheme and it may also be true that subsequent Conservative Governments supported the contributory principle in this respect. But I shall show that no actuarial basis for the contributory principle is left today and therefore that is no answer to the proposition that these people should be given pensions. There is need for a special scheme for them.

The Chancellor of the Duchy of Lancaster mentioned astronomical figures of money to be spent on the future of our social security services by 1970. He pointed out that 50,000 people will be getting pension supplements in June. What is clearly needed is action for those who have been left out. As my right hon. Friend said, this is a gap in the whole system. In debating future policy, we must surely consider this small group, for whom there is widespread sympathy. There is evidence of real hardship among them.

If both sides of the House aim to remedy poverty and need, the first thing is to abolish anomalies of this kind. My right hon. Friend reminded the House of the frustration of my Bill last Session. I do not want to exacerbate things. No more need be said. The whole country knows about that episode of 26th March, 1965. The very old people who suffered as a result refer to that day as "Black Friday". I think they are thoroughly justified in that expression of feeling.

Perhaps I can explain the problem in a little more detail, since the Minister says that he will reply to my comments, and I am grateful to him. Two groups are involved. First, there are those excluded on 5th July, 1948, and set out in the Schedule to the Bill to be presented by my hon. Friend the Member for Honiton. These people and their wives were excluded because they were over pensionable age. The other group are the widows of such men who have not themselves subsequently become insured and women who were widows over pensionable age on 5th July, 1948.

I have urged the Government to pay them a pension at the discretion of the Minister out of the National Insurance Fund. This was the only constitutional way in which I could make this proposal in private Members' time and I still think that the only way in which to tackle this as a matter of urgency is to pay these people out of the National Insurance Fund.

The right hon. Lady the Minister of Pensions and National Insurance should approach the Treasury and get something done about this. It is urgent, because, as my right hon. Friend said, since I presented my Private Member's Bill and hon. Members discussed the matter in the early part of last year, about 50,000 of these old people have died. There were 250,000 of them and the current number is now 200,000. These are rough estimates, because these people have not made contributions and therefore have no contribution records. However, those are the figures which I received from the Ministry of Pensions and National Insurance yesterday morning.

I should like to say how grateful I am to the Ministry which throughout this controversy has supplied me with much of the information upon which to base my proposals. It has been very difficult to analyse these groups and break them down, because of the lack of information about them, as they have not contributed under the compulsory insurance scheme which was introduced on 5th July, 1948.

What was disturbing the right hon. Lady when I last spoke on the subject in the House was that the immediate post to the National Insurance Fund of paying a full retirement pension to these non-pensioners, was about £50 million. The latest figure, given to me officially yesterday morning, was a decrease of £10 million gross. That is to say, the current gross cost has declined to £40 million. While the Government should honour this commitment as a matter of justice, it is rare in social service matters for a commitment to be declining, and that is all the more justification for early action. I very much regret that the Chancellor of the Duchy of Lancaster did not see his way to saying something about that. The figures which I was given yesterday also showed that savings in payments from the National Assistance Board would be a decline from £20 million to £17 million.

Therefore, this is a proposal the costs of which would be declining. I calculate that the current net cost would be £23 million a year for paying the full pension and it would have been £30 million in March, 1965, when I attempted to introduce my Bill. That is a very strong argument, quite apart from the justice of the matter, for all of us supporting early action. That seems to be the main reason why the Government of the day have a responsibility for taking it.

These people were excluded in 1948 partly because all political parties then adhered very rigidly—and did until recently—to the principle of contributions in National Insurance. However, that has long since lost any actuarial basis, for the overwhelming proportion of the retirement pension is now covered not by contributions, but by general taxation. That meets the argument which has been advanced in various quarters, and not only by the Government, that my proposal would be a breach of the principle of contributions. In a realistic sense, it no longer would be.

Before 1948, there were income limits for voluntary and compulsory insurance schemes and on 5th January, 1942, the limit was set at £420 a year. That was under the 1936 and 1937 Acts. We all know that there were also "exempt" persons who had certificates exempting them from liability to contribute to the pre-1948 scheme. It is often said that these people should have paid contributions up to 1948, but some, clearly, could not do so, for they did not fulfil the conditions of the income limits. Some did not choose to become insured voluntarily when they ceased to be insured compulsorily. That is perfectly true, but there are also those who chose not to become "special voluntary contributors" in 1938 and those who could not fulfil other conditions. However, is it fair or realistic or reasonable to say that the same conditions should apply today?

It is perfectly true that most of these are professional people and in 1948 most of them had savings of some kind, but was it foreseen in 1948 by either side of the House what the value of money would be today? It is for that reason that the responsibility falls upon all of us, but especially upon the Government of the day, to take action about this matter.

There are some very hard cases. Among the "excepted" professions and occupations were many teachers, who are now more than 80 years old, and those who were in employment under the Crown, under local or public authorities, railway or statutory companies. Most of them were excluded in 1948 because they were not "existing contributors" or "existing beneficiaries" under the pre-war schemes. In effect, they were refused the right to contribute to the compulsory scheme on 5th July, 1948, because of that, or because they were above pension-able age at that date.

They have now lived more than another 20 years since that bar to their ability to contribute and it seems grossly unfair that it should still be held against them. Times have changed and what might have seemed fair and reasonable to the House in 1948 is not necessarily regarded as fair and reasonable today.

I would like to give only one example, which has been quoted before, of the sort of ludicrous anomaly which occurs in our much vaunted Welfare State. I was sent a copy of a letter from an old clergyman in a clergymen's home, saying: I live in a house for retired clergy. Only one of us is young enough to have a retirement pension. On the other hand, the committee who manage the place are all old age pensioners."— drawing their retirement pensions. That is a ridiculous situation in the Welfare State, whatever party may be in power. What could be more pathetic and anomalous than that? I know that other hon. Members have had similar letters. I have had letters from old people of more than 90 in the same situation, some of them living alone. There can be no doubt that very different conditions prevailed in 1948, in terms of the value of their savings—

While it is impossible at the moment to break down the exact categories for lack of the contribution records of these old people, the right course for the Minister to take, if she has no surplus in the National Insurance Fund from which to pay the £23 million which will be needed in the first year—less in subsequent years as the numbers inevitably decline—is to go to the Chancellor of the Exchequer to say that she must have the money. These old people cannot wait—I do not want to labour that—and their number is declining at the rate of 50,000 a year. Some action must be taken by those who have the power to do so.

It is argued that there are 500,000 other old people who have reduced pensions and that action cannot be taken on behalf of the pre-1948 group without including those who retired after 1948. That is not necessarily a valid argument. As a first step, we could take those whose age was over 84—and most of those who retired before 1948 are now over 84. The main distinction between those who retired before and those who retired after 1948 is that the latter had the opportunity to contribute to the 1948 compulsory scheme and the former did not. That is a most important distinction, especially as we are discussing priorities. There were also those who paid contributions for ten years from 1948 as late entrants and withdrew their contributions and there are others on small fixed incomes who retired after 1948, but who found it impossible to continue to pay contributions and who, therefore, have reduced pensions.

I am well aware of that. I have also had correspondence with the Prime Minister and he has said, in addition to what has been said by the Minister, that one cannot do anything for one group without the other. I should like to see something done for both, but I believe that the great age of the 1948 people commands respect and is a good reason why we should take them first.

I want to refer to the supposed answer to my proposals in March, 1965. The right hon. Lady the Minister of Pensions and National Insurance, who is not in her place, answered me on that occasion by saying that it was quite all right because the Government were going to introduce a minimum income guarantee and that that was the answer to my Bill. It is doubly unfortunate, therefore, that when this scheme was deferred in July by the Chancellor of the Exchequer, and now seems to be sunk without trace according to the Chancellor of the Duchy of Lancaster, nothing should be done to meet the pledge given to me.

I have correspondence showing quite clearly that this pledge was given. It was said on several occasions, by the right hon. Lady and other members of the Government. When the National Plan came out it said that the income guarantee "would not contribute towards faster economic growth." I will not argue that point. The point is that it is not coming and there is an even stronger case today than when I first introduced this matter to the House for the Government to take action. They have a duty to do so.

The Government also said that increasing the National Assistance scales would help. That might apply in some cases, but what of those who are not on National Assistance, who are selling up their small capital in order to avoid this? We have heard from the right hon. Gentleman the Chancellor of the Duchy that there are many old people who still dislike the idea of National Assistance? This is particularly true of this group of people who, I have readily said, come from the professional classes. There are many who have resources, but they are dwindling. If benefit is extended to them under the National Insurance Scheme they would have to pay tax and the Government would find that the cost of the exercise would be reduced. There are also those who are just above the National Assistance level who put aside money for their retirement only to find that they have been forced on to National Assistance.

I do not believe that putting up the National Assistance scales by itself—and this appeared on the Order Paper of another place during a debate there in May, 1965, as one of the achievements of the Government and as an answer to my Bill—is the answer. The real point here is that because of their age, and considerable evidence of hardship, these people should have a pension under the National Insurance Scheme as of right. Other solutions which the Government have proposed having failed, they have now to find something.

My Bill would give the Minister wide powers to take into account the contribution records of any of these old people. Those who are on National Assistance now would not add to the cost of bringing the whole group into insurance. If one looks at the argument from that viewpoint there is no other answer other than bringing them into insurance. I fear that many are too proud to apply for National Assistance, but this cannot be allowed to continue. There cannot be any Member on either side of the House who would wish this.

The problem is daily growing more acute. They are a small group which is coming into prominence more and more through letters to hon. Members on both sides of the House, and it is a matter of justice that the Government should take action immediately. This is particularly so in view of the numbers who have already died. I have never, in my speeches in this House or in my Private Member's Bill, suggested a flat-rate pension. I have always said that the Minister should have power to make regulations. In view of the fact that the Ministry cannot say exactly how many people there are because of the lack of contribution records, I imagine that she will have to make regulations under which these old people would have to apply for National Insurance pensions. The Government have had this matter before them since they came into office, and they have no excuse for not taking action.

I should be very grateful to hear from the right hon. Gentleman the Minister of Housing and Local Government, when he winds up the debate, what he proposes to do. I hope that he will decide to give way on this point. The fact that there are 50,000 less indicates what a drop there has been, and it will be lower at the end of this year. I hope that he will act immediately. The country will judge him and his Government upon what he says tonight. Members on both sides of the House realise that this argument has to be answered. He and his right hon. Friends have so far dropped all of the promised schemes which could have covered these people and in these circumstances I appeal to him for justice for non-pensioners.

6.6 p.m.

Mr. William Hamilton (Fife, West)

I do not want to appear to be unkind to the hon. Gentleman the Member for Abingdon (Mr. Neave), but he made a very dishonest speech. It was dishonest for two reasons. First, the numbers of people to whom he is referring must have been much greater in 1951 than they were in 1964. During that time the Government resolutely refused to do anything about it. Secondly, he must know—

Mr. Neave rose

Mr. Hamilton

I will give way in a moment. He must know that for good or ill the National Insurance Scheme is a contributory scheme and that no one can get anything out of it if they have not put into it. When the hon. Gentleman the Member for Honiton (Mr. Mathew) introduced his Bill, and when there was a possibility that it might be adopted, if not accepted, I was approached by workers in my constituency saying that if the Bill went through they would stop their contributions, because if people could get a pension without having contributed then, although it might not be their fault that they had not done so, the fact that one was getting a pension without having contributed would have dire consequences and the most adverse reactions among millions of workers, who had contributed all of their working life.

Mr. Neave

I do not know whether the hon. Gentleman's constituents would be representative of the whole country in their view about these old people. I do not think so. If he looks at the original Bill and the Bill of my hon. Friend the Member for Honiton, he will see express powers given to the Minister to take account—by paying a reduced pension—of the fact that the old people had not paid contributions. This is the only way of doing it. The hon. Gentleman also said that I was dishonest. I should believe more in his sincerity, and in that of his hon. and right hon. Friends, in making a remark about the last Government if there had been any evidence—and I have made great researches in the Library about this—of any hon. Members on the other side of the House or on the then Opposition Front Bench raising this matter in the House during the 13 years that the Conservative Government were in power.

Mr. Hamilton

The hon. Gentleman cannot ride off on that. The Tory Party had an enormous majority in their 13 years, during which time they could have done virtually anything. I will refer to their record later in my speech. I would now like to quote from an article in the New Society of 14th January, 1965. It made several comments on the hon. Gentleman's Bill including the following: …a substantial proportion of this outlay would go to relatively well to do middle-class people. It seems to be quite against the tenor of the proposals which the Conservative Party are currently putting before the people to suggest that benefits should go to people who did not really need them. If the test is to be need, then a lot of the people, or some of the people to whom he is referring, and to whom he wants to give benefits without their having contributed, would benefit quite substantially.

Mr. Neave

The hon. Gentleman has no evidence of that.

Mr. Hamilton

In passing, I want to refer to the speech of the Leader of the Opposition. However humane he may sound today, there is and always has been, a large body of Tory opinion—ever since Lloyd George's Government in 1906—which has attacked the whole concept of the Welfare State. Subsidies, grants, loans—whatever it may be—were all right for private enterprise and middle and upper class people, whether private coal owners, railway companies, shipowners, aircraft firms, steel barons, farmers or university students. All these people could put their hands into the public purse without let or hindrance. It is very wicked for council house tenants to do the same. The old and the sick must not do it. There must be some kind of needs test, I think the Conservatives are now calling it.

When the hon. Member for Uxbridge (Mr. Curran)—I am glad to see him here—wrote in Crossbow in the autumn of 1960 We are in danger of creating a mass of passive recipients", he was merely repeating sentiments always held by a very big proportion of the Conservative Party. The "passive recipients" to whom he referred were not the aircraft companies, farmers or ship-owners, but the greedy old folk getting free prescriptions, the school "kids" getting subsidised school meals, the wicked council tenants, with their two cars, four incomes and cocktail cabinets.

The hon. Gentleman was saying in fewer words what has been said by the right hon. Members for Enfield, West (Mr. Iain Macleod) and Wolverhampton, South-West (Mr. Powell), neither of whom, significantly enough, has yet put in an appearance in this debate. They wrote a joint pamphlet as long ago as 1952. The right hon. Member for Enfield, West said that the real question we had to ask about the social services was Should any social service be provided without a means test? This was the question which the right hon. Gentleman asked. Presumably, by inference, the answer was "no".

Those two right hon. Gentlemen are Front Bench spokesmen for the Conservative Party. The right hon. and learned Member for St. Marylebone (Mr. Hogg) also is on record as decrying the principles on which the Welfare State is based. The former Prime Minister—

Mr. Quintin Hogg (St. Marylebone) rose

Mr. Hamilton

In a moment. The attitude of the former Prime Minister and Leader of the Opposition whom the Conservative Party got rid of was the donation attitude towards the old people at the last election.

There are, therefore, at least four right hon. Members of the Opposition Front Bench who believe that the Welfare State is weakening the moral fibre of the nation.

Mr. Hogg rose

Mr. Hamilton

The right hon. and learned Gentleman must contain himself. I will give way when I want to give way, not when he wants to intervene.

I should like to quote the Bow Group again. When it celebrated its 15th anniversary, it published—incidentally, shortly after the National Health Service charges had been boosted by the right hon. Member for Wolverhampton, South-West—a collection of 10 essays. The Bow Group is supposed to be the progressive element in the Conservative Party. Let me quote what it has to say. A Godfrey Hodgson argued that we had to have educational expansion. He said: …over the next 10 or 20 years we would have to increase the proportion of the national income spent on education from 3.5 per cent. to 5 per cent.; and this should be done, not by cutting expenditure on defence or social services, but by introducing the contributory principle into state education. For example, if a fee of £5 per term were introduced for each of the 2.7 million children at maintained or direct-grant secondary schools, and if 10 per cent. of the children were excused the fee entirely and a further one-quarter of them were allowed to pay only half, the taxpayer would be saved over £31 millions a year. That is well over one-sixth of the cost of secondary education. Mr. Hodgson went on: Now that there is a demand for the grammar school, people may be expected to pay something for it. So it goes on.

A magazine is sent to me, for some unknown reason, every month or every quarter called "Freedom First". It is the magazine of an organisation called the Society for Individual Freedom. Let me quote—

Mr. Hogg rose

Mr. Hamilton

No. The right hon. and learned Gentleman is getting a very salutary lesson and he will have to take it.

Mr. Hogg

On a point of order. It will be within the recollection of yourself, Mr. Deputy Speaker, and of the House that the hon. Gentleman promised "in a moment" to give way. He has broken his promise.

Mr. Deputy Speaker

That is not a point of order.

Mr. Hamilton

I will give way when I want to give way.

Mr. Hogg

The hon. Gentleman has broken his promise.

Mr. Hamilton

I will fulfil my promise in good time.

An article in this magazine talks about the Welfare State having resulted in: insidious erosion of individual and parental responsibility, production"— this is interesting— of a hard and growing core of those unwilling to work"— the destruction of self-respect and self-reliance through surfeit! The president of this particular outfit is Sir Louis Gluckstein. Some of the vice-presidents are Lord Broughshane, Lord Coleraine, Lord Teviot, Sir John Rodgers, Member of Parliament, and Victor Montagu, who used to be a Member of this House—all staunch Tories. So the story goes on. I will now give way to the right hon. and learned Member for St. Marylebone.

Mr. Hogg

Since the hon. Gentleman did not give way when he referred to me, I will content myself by saying this to him. He has attributed views to me which he must know to be wholly untrue. For 28 years I have been a Member of one House of Parliament or the other, and I supported the principles of the Welfare State before the hon. Gentleman was a blush on his father's cheek.

Mr. Hamilton

The right hon. and learned Gentleman should read his own speeches and the speeches of his father. Not only he but his father has a record of contempt for the principles of the Welfare State. If he will be good enough to see me behind the Chair, I will refer him to a speech which I made in the House some years ago in which I quoted his remarks on the Welfare State. The Star, which was then in existence, gave a warning to the British people—"Beware the Welfare State"—as a direct result of the right hon. and learned Gentleman's comments on it. The right hon. and learned Gentleman should not come here in a white sheet and say that he has always stood for the principles of the Welfare State. He was in the Government which sought to undermine it by putting on Health Service charges at the same time as they gave £80 million a year to Surtax payers.

The Leader of the Opposition talked this afternoon about building one nation. The proposals which the Conservative Party is putting forward will deliberately create two nations. I will refer to that in a moment. I want to put on the record a little more about Tory proponents of the ideas which I have adduced from other quotations.

A Mr. D.S. Lees, in "Lloyds Bank Review" of April, 1960, referred to the National Health Service and argued that the time had come when future increases in health expenditure should be regarded as consumption and not as investment and that further increases in health expenditure will be a burden and not a benefit. A burden to whom? A burden to the taxpayers, not to the people suffering from ill health and going to their doctor, hospital or dentist. Earlier in the same article Mr. Lees had put the mouthwatering proposition, for some, that had the Health Service not been introduced at all there would probably have been a tax saving of £500 million. It would be much higher than that now. That was written in 1960. Put in perspective", he went on, this means that Purchase Tax could be abolished or the standard rate of Income Tax reduced by 2s. That is how the Tory mind thinks. This, Mr. Lees argued, would have meant greater incentives to work, to save, to cut costs and to raise investment.

That theme was echoed as recently as the last disastrous Conservative Party conference, in October, by the right hon. Member for Enfield, West. On 14th October, the hall rang with his theme of creating incentives by reducing taxes, to which he pledged his party. On the very same day, I should say in parenthesis, the hon. Lady the Member for Finchley (Mrs. Thatcher) said that the party opposite would increase taxes by £100 million by transferring some of the rate burden to the Exchequer.

Let me refer to another article by, I presume, a Conservative—it could only be a Conservative who writes this kind of rubbish—in the "Statist" by Arthur Seldon on 25th November, 1961, headed "Welfare—public or private". His argument was exactly the same as the Leader of the Opposition used this afternoon that as affluence increases, so we should expect more and more people to provide for their own individual requirements in health services, housing, education, pensions and the rest. He went on to say: But there is little sign so far of a coherent design to redirect the weight of expenditure on the social services in recognition of social and economic change. If I may go on quoting: Apart from some courageous decisions on food subsidies and rents some years ago, there is little evidence that the social services are being redirected to fit the 1960s rather than the 1940s, in which they were last redesigned. I should like to know from the Opposition whether, if they get back to power again, the Rent Act will come back and rents will be allowed to find their own level. This is what their policy means. In the same context, will they go to the country and say that they will reimpose prescription charges? We are entitled to know these answers. The party opposite have complained about our priorities being all wrong. It is up to them to tell the people—the old and the sick—whether they will reimpose the charge of 2s. per item for every prescription that people get from the chemist. People in private houses in London are entitled to know whether Rachman will be taken off the leash if the party opposite get back to power. People are entitled to know these things.

If I might reiterate what Crossbow said in June, 1963—I keep referring to Crossbow because these are the progressive element in the Tory Party; God knows what the reactionaries are like; these at least are the progressives—this is what it wrote in June, 1963: We should aim to achieve a major expansion of non-Exchequer funds by the deliberate encouragement of the private sector of medicine. It was against that background, that enormous volume of Tory Party opinion over the years, that their Leader made that ill-fated speech on 5th February last, a speech described, not by my right hon. Friend, but by the Sunday Telegraph on 6th February as a plan "to dismantle the Welfare State". This was a Conservative newspaper's condensation of the contents of that speech.

The Leader of the Opposition would be the first to admit—or should be, at least—that inspiring, eloquent, heart-warming oratory is not one of his strong points; but there was, I thought, a genuine catch in his voice as he talked of the poverty still remaining in our midst. He talked this afternoon about new problems arising. My God, they have been there for generations. It just shows the great gulf between hon. Members opposite and us when they say that new groups have arisen that have been there all the time, as successive reports and investigations by sociologists have shown.

As anybody who saw it on television will know, the right hon. Gentleman's well-rehearsed and new-found compassion evoked not a single handclap among his hand-picked Tory audience. His plea for the greatest national heartbreak of the fatherless families and for those struggling along on low fixed incomes was met with uncomprehending stares. The right hon. Gentleman will find that it is hard for him to whip up compassion for those unfortunate people among the matchet-faced business men who did so well out of 13 years of legalised looting, bringing the economy to the brink of disaster in the process. Now, however, the looting has ended. The batteries of Tory compassion that have been flat for so long must be recharged.

As we have seen in this House over the last 16 months, nothing quickened the Tory social conscience more than to find their backsides on the Opposition benches. No case of hardship or poverty escapes them. The widows, the orphans, the hard-pressed ratepayers and the old ladies in Bournemouth and Bath with no pensions were all included in the speech of the Leader of the Opposition. The only group he missed out were middle-aged bachelors. The milk of human kindness gushes in torrents from the breasts that were as barren as the Sahara for 13 years. Whom do they think they are kidding?

Both major parties are committed to the long overdue overhaul of the National Insurance Scheme, but it is clear that we start from entirely different concepts. The Tory Party, far from producing new thinking on social services and National Insurance, want to return to the nineteenth century Poor Law. Their argument is that because individual affluence is growing—and it is not growing consistently or comprehensively over the entire community; let us never forget that—each person is, presumably, increasingly able to buy such prescriptions, pensions and National Insurance as he wants. Private provision via personal insurance and increased freedom of choice is the argument, and, therefore, private insurance should be encouraged by tax reliefs: for example, as to owner-occupiers—the right hon. Gentleman spelt some of it out this afternoon—and tax relief from interest on mortgage payments which already is given.

The State system would be only for those who could not afford to make their own private provision. Despite what the right hon. Gentleman said this afternoon, the aim is a subsistence level for that system. Whatever that is, it is certainly not new thinking. It is the "donation" attitude of the right hon. Member for Kinross and West Perthshire (Sir Alec Douglas-Home). It is the two-nation concept, one nation living on means-tested pensions, means-tested medicine, means-tested education, means-tested family allowances and means-tested housing, whilst the other sector is contracted out of that, fending for themselves and in the process making the insurance companies, the private schools and the private building speculators all richer and happier. Under the Tory proposals we are to have this wonderful new welfare executive to seek out people in need—a vast bureaucracy of snoopers seeking out people who are really needy. Who is to decide? Who is to decide their need? They are to be the second-class citizens.

There is to be another class—the first-class, of worthy citizens. Who are they? They are to be given taxation encouragement for housing; grants are to be given to young people to help pay their house deposits; there is to be tax relief to all owner-occupiers who do not pay Income Tax at the standard rate and who, therefore, do not get maximum benefit from the current taxation system.

This is an important proposal. I would not put it in the highest priority. When I go round my constituency I do not see many young people who would benefit from that. Most of them in my constituency and, I suspect, most ordinary working people throughout the country, still want accommodation to rent rather than to own.

Be that as it may, on the pension side the right hon. Gentleman talked about encouragement for occupational pension schemes. I would ask the right hon. Gentleman who is to reply for the Opposition to be good enough to reply in great detail to the questions posed by Professor Titmuss, in an article in The Guardian some few days ago. He posed a large number of pertinent questions which need to be answered before the country is prepared to accept the Tory scheme to be worth while; I would say that schemes like that, occupational schemes, are very expensive in contributions for both employers and employees.

To relate that to conditions in Scotland, I commend an article in a recent issue of the Westminster Bank Review, from which one sees that there are large regional variations in incomes, and one finds that more than 40 per cent. of all personal incomes in Scotland are less than £10 a week and more than 90 per cent. of all personal incomes in Scotland are less than £1,000 a year or £20 a week. So for them there is not much in an occupational scheme. An occupational scheme would take, in weekly contributions, what on incomes of that size would be a very large proportion.

I want to end my speech now fairly quickly. No doubt our National Insurance scheme will be overhauled by whoever wins the next election—which means us; we are all agreed on that. We in the Labour Party regard the welfare services as weapons or instruments in the struggle against the maldistribution of wealth in this country. This is a basic concept which distinguishes us from hon. Gentlemen opposite. The redistributive element influences very deeply our thinking on these issues. We regard all these services not as first aid or charity to second rate citizens—and they are not too generous, and often very mean—but as the shouldering of national burdens by those best able to bear them. The challenge is bound to be enormous and expensive. Several reports, as I have said, over the years have revealed poverty, still, on a massive scale, especially among children and the old.

Quite frankly, I should like to see a start from the principle of getting rid of the stamped card. The whole idea of a nation of stamp lickers, as it was referred to years ago, is still very much with us. I should like to see a social welfare tax, a progressive tax on all tax-paying members of the community, and the yield redistributed, as we believe in redistribution overall of the wealth.

This is the great issue in front of the electorate in the election next month—as I hope it will be. I am sure, whether we conduct the election on the issues either of the Welfare State or of aircraft carriers, the British people will ensure that we shall win.

6.35 p.m.

Mr. Bernard Braine (Essex, South-East)

We have had a characteristic speech from the hon. Gentleman the Member for Fife, West (Mr. William Hamilton). I do not propose to reply—[HON. MEMBERS: "Oh."]—to all of his distortions—

Mr. Richard

Because the hon. Gentleman cannot.

Mr. Braine

—for two reasons. I regard his strictures upon my hon. Friend the Member for Abingdon (Mr. Neave) as nauseating in the extreme. I seem to recall that he played an ignoble part in frustrating my hon. Friend's Bill last year, a Bill which ought to have been dealt with by the Government. I can understand the Government's point of view and that it was the Government's job to defeat that Bill. Nor does it lie in the hon. Gentleman's mouth to talk about compassion, because that Bill dealt with the position of elderly non-pensioners, some of whom might be well to do, but 50 per cent. of whom are drawing National Assistance. Quite a number of them are constituents of mine. I regard the hon. Member's remarks as nauseating—

Several Hon. Members rose

Mr. Deputy Speaker (Mr. Roderic Bowen)


Mr. Braine

The second reason why I do not propose to follow the hon. Gentleman's line of argument is that, after all, we have heard it all before from more eminent persons. The right hon. Gentleman the Prime Minister, in his election address in 1951, said that if the Tories were victorious in the election The Welfare State will go completely. That was the line then. Apparently, it is the line now. It was not effective then and it will be no more effective when next the country comes to decide.

The right hon. Member for Sowerby (Mr. Houghton) dismissed the record of the 13 years of Tory administration and the social services. I regret that he did so. I have—I think that the whole House has—a high regard for him; he is a kindly soul, and tries to be fair. On this occasion, however, he just simply did not consult the record. Expenditure on social services in those 13 years rose from £1,100 million to £2,760 million. It was more than doubled in money terms and there was an increase of 74 per cent. in real terms. The main National Insurance benefits were increased five times, National Assistance scales were increased eight times. Pensions and benefits rose more than twice as fast as the percentage rise in prices, and were kept broadly in line with average male industrial earnings. As a result, their real value increased by 50 per cent. These are the facts, and they do not square with what the right hon. Gentleman said or what the hon. Gentleman the Member for Fife, West said. Public service pensions were increased five times and the earnings limit for widows and pensioners was also raised five times.

Thus, we can dismiss with contempt the charge that the Conservatives are trying to undermine the Welfare State. It is quite true that there is a difference between the two sides of the House. I do not see why we should attack each other about this. Let us, rather, try to understand why there is a difference and not be abusive about it, as was the hon. Gentleman. [HON. MEMBERS: "Oh."] The distinguishing feature of the Conservative attitude to the social services is that we feel that if all the available resources are devoted to the making of equal payments to everyone regardless of real need, then, obviously, too little is left for the really needy. I shall give some illustrations of this in a moment.

If anyone is undermining the Welfare State it is the Government. Not because they want to: I do not say that for one moment; I have a great respect for their social philosophy and their attitude towards these problems; I cannot say that it has not at sometime or another influenced my mind. It is because they are getting their priorities wrong.

My hon. Friends and I passionately believe in the Welfare State, in the sense that society has a clear, moral duty to make provision for unemployment, sickness, physical and mental handicap and retirement in old age, and to provide a floor of social security below which nobody, however old, ill, feckless or unfortunate, should be allowed to fall. The assumption made by hon. Members opposite, that ours is the first and best Welfare State in the world, and that there is nothing much that we need do with it except have a review and adjust a little here the there, is no longer true. In some measure we are beginning to lag behind other countries. As my right hon. Friend the Member for Bexley (Mr. Heath) made clear, it is over 20 years since Lord Beveridge first formulated his proposals and the Coalition Government approved them. Since then, there have been the most dramatic changes in every aspect of our social and economic life.

In those circumstances, it is hardly surprising that many of the assessments that Lord Beveridge and the politicians of the day made are now invalid. After all, they were haunted by memories of the persistent unemployment and chronic deflation of the inter-war years. They did not foresee that the post-war decades would witness inflation and full employment. They did not foresee that the improvement in living standards in the 13 years of Tory rule alone were greater than the improvement in all the other years of the century put together. They did not foresee that the post-war decades would bring far-reaching changes in the structure of our population. I remember that in the late 1940s it was generally held that our population was static and ageing, and that a contracting number of workers would have to support an ever-increasing army of dependants. That view has proved to be wrong. We are now a growing nation, with more babies being born and with more old people living longer.

Lord Beveridge and the politicians of the day assumed that once we had provided over a period of years, a comprehensive health service, expenditure on health would tend to fall. As a result of better medical care the total volume of sickness in the community would fall. They were quite wrong. The cost of medical care has trebled since the introduction of the National Health Service, and with people living longer the view of the medical authorities is that the total volume of sickness in our community is unlikely to be reduced.

We now know that over the next 20 years the number of people aged 65 and over will be 30 per cent. greater than it is today, and that the number of people aged 75 and over will be 40 per cent. greater. In other words, the picture has completely changed. A very distinguished medical authority—Dr. Logan, Reader of Social Medicine at the Medical Care Research Unit of Manchester University—has written: The explosive development of medical science in the past two decades, with the use of new drugs and modern surgery, is changing the pattern of disease so greatly that it is shifting the load of sickness into middle and later life and out of hospital into care in the home and community. This has enormous implications for our society and for our social services. The founders of the Welfare State did not forsee these things, and there is no reason why they should. What they did, on the other hand, was to bequeath to us a whole range of social services which have become institutionalised and self-perpetuating and which grow ever-more costly yet fail to meet changing needs.

That is the point that my right hon. Friend the Member for Bexley was making in his speech in Birmingham. Referring to the Conservative Policy Group, which has been studying these matters for the past year, he said that it had. already shown the Welfare State to be out of date in many ways, failing to meet efficiently the needs of today, inadequately preparing for the demands of tomorrow. What we want, what we are undertaking, is a completely fresh look at the pattern of our social services, the way we spend our limited resources on those in need and the way we provide for our own old age. What is wrong with that? That seems to be an eminently sensible and reasonable objective for any political leader to pursue.

For that speech my right hon. Friend was bitterly attacked. The content of the speech was misrepresented. It has been alleged by hon. Members opposite that the speech meant that we were undermining the welfare State. For them to argue, as they have been doing, that taking a fresh look at the Welfare State is to undermine it is not only nonsense; it shows that hon. Members opposite are either totally out of touch with what the people are thinking on this subject, or that they imagine that misrepresentation of this kind may give them an electoral advantage.

I prefer to think that the former alternative is the true one. But if I am wrong, the party opposite will find that our people are not such fools as it thinks they are. Most people can give instances of the way in which the Welfare State is breaking down and has moved far from the glorious concept painted in 1945.

I want to put one or two questions to the Government—questions that have been put to me by my constituents. First, why should wealthy company directors, film stars and retired field marshals be able to draw their basic retirement pensions at the appropriate age when many of our oldest, poorest and frailest citizens draw no pension? There are now 6 million pensioners drawing State retirement pensions—my figures may not be quite as accurate as they could be, because it is some time since I have had access to up-to-date information—and their numbers will rise to 8 million in the next 20 years. Thanks to the growth of private pension schemes, more than half of our pensioners in the 1970s, and about two-thirds in the 1980s, will have made their own provision. In many cases, they will have made very good provision.

On present form, however, all of them will get an ever-increasing share of whatever is paid out by way of State pension, whether or not they need it. This inevitably means that in relative terms there will be less available for those who are really in need. Where is the social justice in that?

Mr. Crossman

Is the hon. Member telling us that his Leader was wrong in saying that he wanted to retain the comprehensive basic pension? The hon. Member now seems to be arguing that there should not be a basic pension for everybody.

Mr. Braine

I am arguing nothing of the kind. If the right hon. Gentleman will listen to the questions that I am putting he will realise the case that I am building up against the present system. I hope that when he replies he will be able to show that he accepts these anomalies and injustices as matters which must be remedied, and that there will thus be more common ground between us. Let him hear me out.

Secondly, why should each family, whether or not it needs it, receive the family allowance, although if a family provides a home for a sick dependent relative it gets no assistance at all? Last week the party opposite made marginal improvements in respect of pensions and sickness benefits for everyone—I am not quarrelling with the Bill; my hon. Friends and I fully accept most of it—but denied the provision of invalidity benefit for the long-term sick. I suggest that what should concern us is the extent to which a family unit, whether composed of young children or of old dependent sick folk is at risk and in need. This is the consideration.

The Minister of Housing and Local Government has now walked out, having interrupted me in the middle of my speech—I hope that there is good reason for it—but I trust that the House will bear with me, because the kind of questions I am asking are the kind of questions which have been put to all of us, including hon. Members opposite. After all, we are all constituency Members; we all care for our constituents and their well-being and we must all have had this experience. Why must thousands of relatively prosperous council tenants have their rents subsidised by poorer neighbours who happen to be owner-occupiers? What should concern us is the capacity of the tenant to meet the cost of shelter.

Mr. Walter Monslow (Barrow-in-Furness)

Is the hon. Gentleman not aware that the rebate by way of Income Tax which is paid to owner-occupiers is higher than that paid to subsidised tenants in council houses?

Mr. Braine

I have no doubt that one can modify the argument, but, basically, some families whose total income is £30 or £40 a week are living in council houses, and their rents are subsidised by poorer people who are drawing National Assistance.

Mr. William Molloy (Ealing, North) rose—

Mr. Braine

I am putting a case which I think needs an answer. If I do not give way to the hon. Gentleman, it is not out of discourtesy. I know how interested he is in this subject, and I hope that he will catch your eye later, Mr. Deputy Speaker.

Why do we insist on full contributions before paying sickness benefit, but not in the case of industrial accident or disease? What matters, surely, is the impact that the sickness has on the man and his family, not what caused it. Why should the widow of an insured man be treated less favourably if he died at home than if he died as a result of an accident at work? In both cases the widow suffers exactly the same deprivation. I give these examples—I could mention others—because they are illustrations of the way in which our existing social security system is riddled with anomalies and little injustices of every kind.

This was not planned. Nobody planned the system in this way. This is not the result of deliberate intent on the part of politicians or bureaucrats. These anomalies have arisen largely for historical reasons, and unless something is done drastically to change the whole structure, they will continue. The inequities will grow as long as we cling to the present system of flat-rate benefits and discourage those people who are willing and able to make provision for themselves.

I would add something which is my own view only and is not necessarily shared by my hon. Friends. That is that we should drop the pretence that we are operating an actuarially sound insurance system and recognise that meeting genuine needs arising from specified contingencies should be the first charge on society. We should link benefits with average earnings, and pensions should have some built-in safeguard against inflation. We should finance the whole system out of a straightforward social security tax which everyone would pay as a fixed proportion of his income and to which employers could contribute. Whether that idea is workable or not, it is generally agreed—certainly, on this side of the House—that there must be fundamental rethinking of the whole system.

In heaven's name, how can we call this a Welfare State when our oldest and poorest citizens draw no pension at all, when about one-fifth of pensioners and about three-quarters of our older pensioners are obliged to ask for National Assistance?

Is it wrong to question this state of affairs? Was it wrong of my right hon. Friend the Member for Bexley to remind his audience at Birmingham that there are people suffering deprivation and hardship in our affluent society and to declare his determination to adjust the priorities? Of course, we all know that poverty today is relative. Social conditions are changing. That is why it is right to challenge the assumptions upon which the present system was founded more than 20 years ago. That is why it was right for my right hon. Friend to call for a re-examination of the priorities. I hope that that is what the Government themselves are doing in their review.

I do not wish to detain the House much longer, except to take a brief look at health and welfare. Here is a field where the priorities have been going hopelessly wrong. I hope that no hon. Member opposite thinks that our present arrangements are satisfactory. Consider the arrangements for the care of the elderly, which is one of the biggest social problems facing the country. Although the situation varies from area to area, there is a noticeable lack of co-ordination between the various services, between the statutory services and between them and the voluntary services.

We all know that there is often poor co-ordination between the three elements of the National Health Service—the family doctors, the hospitals and the local authority services—and where the service works well this is not due to its structure but to the devotion and the quality of the people operating it. Between local health and welfare authorities and local housing authorities, which are not always coterminous, there is sometimes no co-ordination at all. In some areas, there is good co-operation between the statutory and voluntary services, but in others there is not.

The result I saw for myself when I was a Parliamentary Secretary to the Ministry of Health—one could visit one borough and see first-class services—meals on wheels for the old people, an excellent medical officer of health, adequate care for the mentally disabled—and over the other side of the street one would be in the neighbouring authority's area where nothing like the same provision existed.

I remember one W.V.S. worker in my constituency telling me with great pride of the joy she had experienced when starting to take hot meals round to old people in her district. She encountered an old gentleman of 90 who had been a widower for many years and who told her that the meal she had given him was the first hot meal he had had for 10 years. But this is a voluntary service. It works well in some parts of my constituency, but not in others, and in some constituencies it does not exist at all. This is a matter which should cause us all concern.

We all know of cases where, because of inadequate medical attention or failure to apply for National Assistance—I am delighted at the Government's steps to publicise the facilities there are in this respect—or unsatisfactory home conditions, some old people fall ill and die of sheer neglect or have to be taken to hospital, where they linger for a long time at considerable public expense.

We all know the answer. This is why it is a great pity that the Minister of Housing and Local Government is not here. If only local authorities provided more flats with wardens in attendance and could provide more home nurses, home help and meals on wheels, it would be possible to preserve the dignity and independence of our old folk for longer and, at the same time, reduce the amount of illness and treat it more easily. On average, old people admitted to hospital today do not suffer from one complaint. When they are examined, they are found, on average, to be suffering from five or six complaints, because of neglect. Therefore, if one could give more adequate attention in the community, one could reduce in large measure the pressure on the hospitals and the amount of sickness in the community.

The answer, then, is to insist that this must be a priority, to change the structure of our welfare services and to find the necessary resources. When one looks at the Health Service in this way, one sees why we on this side criticise the dropping of prescription charges. It was in answer to me last week that the Minister of Health admitted that the increase in consumption of medicine in this country during the past year, since the prescription charges were taken off, has gone up by 40 million additional prescriptions. The country must have become awfully sick under a Labour Government to have been consuming such a vast amount of medicine. We know from market research surveys that a very large part of the additional consumption is for trivial reasons—though not all of it.

The answer to the hon. Member for Fife, West, who asked whether a future Conservative Government would put prescription charges back on the old and sick, is that old-age pensioners, by definition those who are most needy, and those on National Assistance, never paid them. If one allows for exemption from the charges, and one must—a whole category of people should not be required to pay for their essential drugs—everyone knows that there are other matters clamouring for attention and resources, such as additional hospital building.

Women are demanding an adequate national screening service for cervical cancer, in which respect we lag far behind. Is the House aware, for example, that one out of every five diabetics dies without ever seeing a doctor, that there is an enormous amount of anaemia among women which is not treated, and that psychotic depression is a condition which doctors hardly ever encounter because people do not know that they are suffering from it? There is an enormous quantity of illness which is not treated, or is treated inadequately.

Why is this? It is not a question of paying more money to doctors. That is a problem which the Minister of Health will have to face. It is because the workload of the doctors is far too great for them to practise good medicine. If there were an extra £25 million or £30 million to spare, I could spend it now within the National Health Service itself, essentially for the good of the patients.

Therefore, I say that it does not lie in the mouths of hon. Gentlemen opposite to say that we are trying to undermine the Welfare State. What we are seeking to do is put the emphasis on real need. It does not lie in their mouths for another reason. While the Conservative Government, when in office, may not have spent enough money on the social services, they spent a growing proportion of a rising gross national production on them. When we look, despite all the high promises of the Labour Party, at the National Plan—the blueprint for the future Britain which has been fashioned by the Government, though we have seen very little of it yet—we see that the share of the gross national product devoted to health between now and 1970 will be slightly smaller than it is at the moment. Why should this be? We have had no answer from the Government. The Minister of Housing and Local Government is not here. I hope that someone will pass on to him that it is essential for him to answer this question.

All the evidence suggests—I see at least one former Minister of Health in the House who will support me—that there will be a greater need for investment in health in the future than ever before, not less. The pattern of sickness is changing. People's expectation of better treatment is rising. For these reasons, my right hon. Friend has provoked the Government into staging this debate. I am glad that he has done so. He has done a great service in focusing attention on the need to refashion the Welfare State. The view of the Opposition is that the Welfare State is not a sacred cow and that its rules and regulations are not the tablets sent down from Sinai.

Our institutions are here to serve the needs of our people, and policies must surely reflect the needs, aspirations and hopes of our people, which are changing all the time. I suggest that at all times it is important to use scarce resources economically. If we do not use our resources properly, we shall not be able to devote a sufficient margin to these important services. But it is even more important, as my right hon. Friend said in his speech at Birmingham, to have a clear idea of how we can use those resources to build a better, a kinder and yet a more self-reliant and a healthier society.

7.5 p.m.

Mrs. Shirley Williams (Hitchin)

I want to draw attention to one or two of the points in the speech of the hon. Member for Essex, South-East (Mr. Braine). He was very generous in congratulating my right hon. Friend the Minister of Pensions and National Insurance on having asked the National Assistance Board to go out and find elderly people who have not yet approached the Board on their own behalf. In so generously paying that compliment, he took away what had been one of the main points of the address of the Leader of the Opposition at Birmingham, when the right hon. Gentleman asked for exactly that which had been done some weeks ago by my right hon. Friend.

The hon. Gentleman listed a number of anomalies in the Welfare State. Many of us on this side would agree with him and would also wish to see them removed. But they in no way had the slightest bearing on the approach that one takes—whether by a comprehensive system or a selective one—to the financing of the Welfare State. While I go along with what the hon. Gentleman said about anomalies, they have no bearing whatever on the conclusion which he reached in the last few minutes of his speech.

I turn to the remarks of the Leader of the Opposition. I think that there was some truth in his analysis of the changing situation of our economy, but there were also two falsehoods. The right hon. Gentleman has already been told by an hon. Friend of mine that the special groups have been there since time immemorial. The only difference is that the disabled, handicapped, young chronic sick, young widows and fatherless families are not special new groups but are simply becoming more and more obvious by comparison with the affluence of a substantial part of—but by no means all—the population.

Another weakness in the right hon. Gentleman's analysis was that he completely disregarded a substantial fact relating to the economic movements of the last 10 years. There has been a good deal of evidence to suggest that, far from a further narrowing, the income spread has widened again in the last ten years. This is partly as a result of changes in the Surtax rules and partly as a result of an increase in the National Insurance contributions. There is very substantial evidence to show that there has been a widening out of the income spread and that we are moving away from greater equality in incomes, or were doing so until the Finance Act introduced by the Chancellor of the Exchequer last year, which went some way towards narrowing the gap.

Let us look more closely at the arguments for what I believe to be the specific principle which lies behind the fact that the Opposition are bringing the Welfare Slate into politics. Fundamentally, there are only three things which could emerge as a result of their suggested changes in the way in which the Welfare State is financed. The first possibility is that exactly the same resources will be employed as are employed today in welfare, at constant prices, that we have no substantial increase in those resources, but that they are financed by a smaller share of taxation and a larger share of private fee-paying in one form or another. That is a possible point of view. But let us be absolutely clear about it. What it means is a redistribution of income from the poor to the wealthy. It cannot mean anything else. By its nature the tax system is progressive, and by its nature the system of fee-paying is bound to be flat rate or else must substantiate a different quality of service.

There is another possibility, that the same level of resources is used but that the proportion of the resources going to the wealthy as against the less wealthy is increased. I think that if those who are better off start paying for a much larger part of the Welfare State, they will want better value for money, and that means a better share and more of those resources for themselves. That means, in turn, that apart from the group at the very lowest level, the group that is obviously destitute, or nearly destitute, those in what we might call the last 7th, 8th and 9th percentile of the community—would be the very group, many of them in dire need of welfare services, most likely to be priced out of the market.

We quite accept from the Opposition that they mean to give some sort of free service for those at the very bottom, but we are very worried about the very substantial number on low incomes, who are just above National Assistance Board rates. What will happen to them? If I understand the Opposition's thesis correctly, they will be squeezed out to take a smaller share of these resources, but it is these groups of people with fairly large families, perhaps with a mentally retarded or other handicapped child, which are among the heaviest users of the welfare services—

Sir Keith Joseph (Leeds, North-East)

Can the hon. Lady tell the House where she draws any evidence at all for her second assumption—or, indeed, for her first assumption, but I am interested now in her second assumption—that my right hon. Friend is suggesting that the National Health Service should change in any way? All that is in debate between the two sides of the House in regard to the National Health Service is about some part of the prescription charge, but the hon. Lady is erecting a greater superstructure of assumption on that, quite unjustifiably. I ask her for evidence.

Mrs. Williams

If my recollection is correct, I did not specifically mention the National Health Service but was speaking about the whole range of the social services, and particularly pointing out that the suggestions made in the speech of the Leader of the Opposition with regard to pension arrangements will clearly lead to a comprehensive State scheme at a low base level, complimented by supplementary schemes which will subsequently be financed largely on a private basis. I was also replying to the suggestion made about the possibility of maintaining, and conceivably enlarging, the fee-paying element in welfare services. I was not talking about the National Health Service—

Mr. Charles Curran (Uxbridge)

I am following the hon. Lady's argument with great interest. She is discussing one of three possible assumptions about the Tory proposals. Will she agree that there is a fourth that she might examine just as well? Supposing we assume that the State continues to devote under a future Tory Government the same proportion of the national income to the social services as is devoted now, but concentrates that proportion on the people who need it instead of spreading it universally, would she not agree that on that basis the worse off would do much better than now?

Mrs. Williams

Let me answer both of those points together. First of all, the Conservative Party has never defined what it means by those in need. Secondly, the Leader of the Opposition said at Birmingham that we must lessen dependence on the State, and give back to individuals the freedom and the opportunity to provide for themselves—create the conditions for them to do that. Either that means nothing or it must mean something, and I am not suggesting what. But it must imply a larger share of private schemes in the welfare services.

There is a third suggestion that we need to look at, and that is that we maintain the basic State services—and let me make it clear to the right hon. Gentleman the Member for Leeds, North-East (Sir K. Joseph) that I am not suggesting that the Conservative Party is trying to get rid of such essential services—but concentrate them on those "in need"—as yet not defined.

The third possibility is the argument put forward by hon. and right hon. Members opposite, even in this debate, that a greater share of resources would be available if we began to attract to the financing of the welfare service a substantial extra slice of income coming from those willing to buy services, over and above what they can get from the State.

Let us look at that proposition in terms of what seems to me a crucial element in it. Is it the case that the resources for the welfare services over the next four or five years are elastic or not? I know the argument that they are not, and that is so for one quite physical reason that has nothing to do with policy on either side. It is simply due to the fact that, unlike the suggestion made by the hon. Member for Essex, South-East, over the next five years the proportion of elderly and the proportion of young will become very heavy in relation to the working population.

The working population between 1965 and 1970 will increase by rather less than 4.8 per cent. The proportion of people already going into the teaching service over five years will increase by 25 per cent. The number going into the health services, public administration and education is to increase, according to the National Plan, by more than the total increase in the working population in those five years. Quite clearly, there comes a limit, a limit set simply by the size of the increase of population, on the supply of trained people for welfare services which, incidentally has been made more difficult by policies followed by the Opposition in the past.

In the past, the Opposition's own policies have restricted the supply of a good many of these trained people in the social services. Perhaps the best example was their acceptance of the Willink Report on the supply of doctors, but there are other instances, such as their dilatory attitude towards increases in teacher supply. All this means that there is a direct limit, not set by the Government but by the past policies of the Opposition, on the actual capacity of our human resources to meet a very great additional demand on the welfare services in the next two or three years—

Mr. Howe

Perhaps the hon. Lady will allow me to identify two fallacies in an argument that has some force. First, one simply cannot regard the resources, either human or financial, as being defined without any elasticity within the propositions of the National Plan. Would she not agree, for example, that a country spending £550 million on sweets, ice cream and soft drinks has resources in its pocket which, if the machinery were there, could be diverted to the provision of social services? That is the first point. The other—

Mr. Speaker

Order. The purpose of an intervention is to make a brief point.

Mr. Howe

Then perhaps I may make the second point very briefly. Would not the hon. Lady agree from her own interest in nursery schools—

Mr. Speaker

Order. This is getting beyond the purpose of intervention. I think that the first point is enough.

Mrs. Williams

I appreciate what the hon. and learned Gentleman said, but I do not agree that we are talking of financial resources. I am specifically not talking of financial resources but of resources in trained human beings, and this, as anybody in the social services knows, is one of the most definite bottlenecks we have to deal with in the next few years.

Let me look rather more closely at this proposition. If there is a finite increase, and a fairly small one, in the proportion of our resources that may be made available simply because of the human resources element, which I stress, the suggestion that there should be an introduction of the power of the market into the welfare services means a larger share for those capable of paying for the services and less for those not capable of doing so.

Let us take the proposition a stage further. If we consider what people are paying for, they must be paying for something over and above what they will get from the free service, and everything over and above will be taken away from those who are still on the free service. This is the whole weakness of the Opposition argument, because ultimately we reach the stage where we concentrate on the very small number in need—and, of course, the whole history of societies that we look at, in the United States and elsewhere, suggests that that small group gets a lower and lower standard of provision—relatively speaking, not absolutely—because the articulate, the politically interested, the young, the strong and the vigorous are not there to speak for them. They fall silent and cannot speak for themselves.

Another point which it is crucial to make is that in these circumstances in which there is some degree of the power of the purse operating within the structure of a social service, we begin to get fragmentation. I do not believe the case has been made, even on the grounds of efficiency. It has been pointed out that occupational private schemes are relatively expensive in terms of contribution. A medicare insurance service is extremely expensive. Dr. Brian Abel-Smith has pointed out that as much as 50 per cent. of the cost of a private medicare scheme may be absorbed in the cost of administration and in profit.

All this brings me to two conclusive concluding points. First, on the basis of efficiency I do not believe the case for private schemes has been made against the case for public schemes, for the reasons I have argued. Secondly, on the ground of freedom of choice I do not think the case has been made. Freedom of choice is meaningful only for the fairly wealthy, but meaningless for the less well-off part of the population. What freedom of choice have I if my child cannot get through the 11-plus examination if I am not rich enough to buy his way out? What freedom of choice is there for less well-off parents to pay a doctor in order to jump the queue? And the queue will lengthen if we adopt the Opposition's proposals. This is the crucial point which hon. Members opposite, if they are as compassionate as they say they are, and I am not going to say they are not—

Mr. William Hamilton

Why not?

Mrs. Williams

Unless they can meet these crucial points far more than they have done up to now, in the view of my hon. Friends and myself their entire case falls to the ground.

7.21 p.m.

Mr. Charles Curran (Uxbridge)

I listened with very great interest to the hon. Lady the Member for Hitchin (Mrs. Shirley Williams). I should like her to agree with me at any rate as far as this. She appeared to be arguing that the present Welfare State structure is substantially all right. She does not wish to see any radical change in that structure. I think that that is a fair summary of what the hon. Lady said.

Mrs. Shirley Williams

That was not the point I was making, but that the anomalies and weaknesses can be cured as well, if not better, within a comprehensive system.

Mr. Curran

I want to proceed on the assumption that the hon. Lady considers the present method of providing social services is basically all right, that there are anomalies, that modifications may be necessary, but that, basically, we should keep the structure which we have now. That is a perfectly arguable proposition and the hon. Lady has argued it very skilfully. But I should like her to agree that there is an increasingly powerful case against it, a case accepted not only by members of the Tory Party, but accepted increasingly by a very large number of people in the country, not because of reasoning but simply because they watch the way in which this structure operates.

There are members of the hon. Lady's own party who concede this. I can quote a number of them, but I shall content myself by quoting one, an authority whom I am sure the hon. Lady will hail with gusto, Professor Titmuss. For the purpose of this debate I looked at a pamphlet which he wrote for the Fabian Society—no doubt the hon. Lady will recall it, a pamphlet called "The Irresponsible Society"—in which he said: Many of us must now admit that we put too much faith in the 'forties in the concept of universality as applied to social security. Mistakenly, it was linked with economic egalitarianism. Those who have benefited most are those who have needed it least. The Tory Party says "ditto" to Professor Titmuss, so do an increasingly large number of voters.

I was interested in an argument put by the hon. Member for Fife, West (Mr. William Hamilton), who quoted—or so he said—something which I wrote on the Welfare State. He did not have the courtesy to give way when I sought to put him right. I have stated the argument which he was travestying in a large number of newspapers. I have found all over the country—this goes for Scotland as well as the south of England—increasing approval for the case we are making against the Welfare State: that it is not doing what it ought to be doing, that it is not giving maximum help to the people who need it: that, in the words of Professor Titmuss, "Those who have benefited most are those who have needed it least".

I take one illustration of this, and I invite the hon. Lady to agree that this is a real point, not simply a debating point. Take the position of people who now draw the State retirement pension. There are more than 6 million of them. They are given an equal, uniform pension. It is not big enough by itself to live on. So one in every five of them, 20 per cent., gets National Assistance. A number of other pensioners ought to get it, but, for one reason or another, do not. We had some statistics about them from the Chancellor of the Duchy of Lancaster at the beginning of the debate.

Assume for the sake of argument that these others amount to a further 20 per cent. These 40 pr cent. who receive the State retirement pension are so poor that they get, or ought to get, a National Assistance supplement. These two-fifths, these two old-age pensioners in five, are the worst off. How, under the present Welfare State structure, can we help them? The only way through the National Insurance Scheme is by increasing the old-age pension for them all. As the hon. Lady will agree, that means that, whatever sum of money we devote to increasing the pension, three-fifths of it will go to those who need it least and only two-fifths to those who need it most.

This is a difficulty which cannot be overcome so long as we stick to universality. I have given the example of pensions. But it applies also to other social services, for instance, family allowances. If I had to specify where the darkest areas of poverty are in this country I should say they are not among old people, but among large families with low earning power. This is not said as often as it should be because, unfortunately, those children have no votes, whereas pensioners have.

Family allowances are paid indiscriminately. True, when we pay the allowance to a rich family, the rich family pays it back in Income Tax. But the global sum we devote to family allowances ought not to be distributed both to those families which are poor and those families which are so rich that they do not need the money and pay it back in tax. If we cut out the families who are so rich that they pay the money back in Income Tax, and concentrated the whole sum on those who are so poor that they do not have to pay Income Tax, does not the hon. Lady agree that those families would be better off than they are now? If we were to depart from universality and go over to selectivity would that not be better than the present method?

Mrs. Shirley Williams

As the hon. Member is probably aware, my party takes the view that old-age pensions could be increased in a different way while still maintaining the idea of universality.

Mr. Curran

Under universality the consequences are as I have described. This fact strikes the ordinary citizen. It is something which the ordinary citizen who is not particularly concerned with political backchat can see for himself. He can see perfectly well that by keeping universality we are giving help to people who do not need it at the expense of people who do need it.

No matter how rich this country becomes, the sum which we can devote to pensions or to anything else will necessarily be limited. If we persist in spreading this limited sum indiscriminately over those who need it and over those who do not, those who are the poorest will get less than they would if there were selectivity.

Mr. Arthur Blenkinsop (South Shields)

I am very interested in the hon. Member's argument. Would he attach that argument also to the question of Income Tax allowances for children?

Mr. Curran

Certainly. I do not want to make debating points. I will make the hon. Gentleman a present of that.

I am concerned with the narrow issue in this debate, namely, whether the present structure of the Welfare State is basically something which we should seek to change. I am arguing that it ought to be radically changed because it now operates in favour of the better-off at the expense of the worse-off. This is the basis of the Tory case.

I hope that we shall not be told many more times in the debate that the Tory Party wants to dismantle the Welfare State. During the last week or so I have rather got the impression that the Labour Party, or at any rate some of its propagandists, are now wheeling out a new spectre for the next election. I have been fighting elections since the war, and I am familiar with the procession of spectres which we have had in the past. There was the spectre of the dole queues, the assertion that anyone who voted Tory was voting for the dole. Then there was the assertion that anyone who voted Tory was voting for war. We had a mythical pool of unemployment—with spectre rising from the pool. We also had the equally bogus spectre of warmongering.

Now it looks as if we are to get a third spectre, the spectre that the Tory Party, if it returns to power, will take a sledgehammer to the Welfare State.

Mr. Molloy

I have been following the hon. Gentleman's argument with interest, because it seems to me to be most authoritative and extraordinarily interesting. However, only a few moments ago he outlined a number of reasons and then said, "That is why the Tory Party is against the Welfare State". The hon. Gentleman is a proper Tory—he wants it both ways.

Mr. Curran

I should have thought that the hon. Gentleman was capable of taking in an argument which has been put in very simple language. Let me try again.

I am not asserting that we should dismantle the Welfare State. Has the hon. Gentleman understood that? I am not asserting that we should destroy it. I am arguing that we should improve it so that it fulfils its purpose more effectively than it does now and gives more help to the poor. If the hon. Gentleman says that he does not agree with that, and thereby puts himself in the position of saying that he wants less help for the poor rather than more, I wish him luck the next time he goes to Ealing.

Mr. Richard

I have been following the hon. Gentleman's argument, I hope. It is a classic statement of the Opposition's case on the social services. Would he not agree that there is a great distinction between a State fund which is merely doled out, so to speak, to those who are in need, which is not what we have, and an insurance scheme into which people put money? A person who pays into an insurance scheme, whether it be private or public, is entitled to get the benefits out.

Mr. Curran

That is perfectly fair, and is the next point I want to come to.

We now run a very large part of the Welfare State on the insurance principle—that is, everybody is required to contribute and, therefore, everybody is entitled to benefit in the circumstances laid down by the scheme. This aspect of the Welfare State is defective, because it is not doing what presumably it was designed to do. It visibly is not giving the maximum help to those who need it. Why should we go on assuming that those who get benefit under the insurance scheme at present are necessarily those who need it most? Would not the hon. Member for Barons Court (Mr. Richard) agree with me that we should give a person help by one test only—whether he needs the money? We should not apply the test of how many stamps he has on his card. At present, the test for help under the State insurance scheme is not need. It is a good contribution record. Does the hon. Gentleman think that that state of affairs results in the maximum help going to those who need it?

Mr. Richard

I am again obliged to the hon. Gentleman. He is making in the form of questions to me the speech I would wish to make. If he wants an answer to the question, I will tell him that, of course, there is a need for a part of the State scheme to deal with those who are not covered sufficiently by an insurance scheme. Again, I ask the hon. Gentleman—he has not faced this question—whether there is not a distinction between an insurance scheme which people pay into and the form of scheme I mentioned formerly? Are not people entitled to get out what they have paid into an insurance scheme?

Mr. Curran

Of course. This is really part of my case. So long as we run the insurance side of the Welfare State on the present basis, obviously everybody is entitled to get benefit out of it. I need not emphasise that. It goes without saying that, so long as we maintain the present system whereby certain sorts of benefits are distributed by reference to insurance contributions, every contributor, whether rich or poor, is entitled to draw out in need.

This method of running the Welfare State means, as I have sought to demonstrate, that only part of a given sum of money goes to those who need it most, and the rest goes to those who do not. I gave the example of pensions. Then I spoke about family allowances. I could give the example of other social services.

Before saying anything further, it is necessary to make abundantly clear where the Tory Party stands about social insurance. I recognise—I hope that this will be noted in Uxbridge as well as in Ealing—that we cannot destroy the existing structure of National Insurance. Whatever else we may do about the social services, we must preserve in full all the rights of existing contributors. There can be no question of dismantling the insurance structure as it applies to any of the contributors. I hope that I make this clear, not merely by implication, but in the plainest language.

The Tory Party is not discussing any demolition job on the Welfare State. We are saying only that it has now been proved to demonstration after 20 years that this method of trying to provide for the poor is defective and must, therefore, be improved. However, we recognise that over 20 years large numbers of rights have been created and large numbers of expectations built up. It would be totally wrong to ignore either the rights or the expectations.

We must consider where we are going from here. What policy do we think should shape this country over the next few decades? I listened with the greatest disappointment to the Chancellor of the Duchy of Lancaster. Everybody in the House must have done so. We have enough experience of him to know that he has many ideas. There may be some Members in the House whom I consider to be stupid, but I assure the right hon. Gentleman that he is not, and never has been, one of them. I was, therefore, very disappointed that he, with his great knowledge of the social services and of the architecture and geography of the Welfare State, should have come up with no fresh ideas.

We have sat here ever since this Parliament met waiting for the right hon. Gentleman to tell us about the review of the social services. Every time we have asked any Questions about any part of the Welfare State we have been met with the slot machine answer from the Front Bench, "Wait for the review by the Chancellor of the Duchy." We have gone on waiting. I suppose that this has been the most protracted parturition on record. The right hon. Gentleman has sat on the Front Bench for 16 months like an elephant in an interesting condition and we have been waiting, waiting and waiting. Now we have the result of all this. It is what we heard from him this afternoon. It disappointed those behind the right hon. Gentleman as much as it surprised us. I had expected a flow of ideas and suggestions from him which would have made life very difficult for the Tory Party.

While, therefore, I am in one sense disappointed, in another sense I am very much relieved, because he has produced nothing whatever in the way of new ideas. He has produced a few battered phrases from the past, but most of the rest of it has been culled without acknowledgment from Tory pamphlets or the speech of my righ hon. Friend the Leader of the Opposition, in Birmingham. It was a confession of intellectual bankruptcy. If this is the best that the Labour Party has to offer us on the Welfare State, the field is clear for us.

We are not prepared, as the Government apparently are, to go on repairing the Beveridgs structure and shoring up bits of it. We are prepared to say—and the Labour Party, to my surprise, is not—that we must ask once more the fundamental question: why do we have a welfare State? We have it to help people who are poor. [HON. MEMBERS: "No."] Surely, we do not have a Welfare State in order to help people who are rich? Surely, the Labour Party is not now committed to doctrine of fair shares for the rich? We are concerned with the poor. Let the rich look after themselves. [HON. MEMBERS: "Oh."] Yes—

Mr. Speaker

Order. This is a place where hon. Gentlemen hear things with which they do not agree, but they listen to them.

Mr. Curran

I think that I can make a case for the view that we take of the future of the Welfare State which will make sense even to hon. Members opposite. We are making a reasoned and rational case which must be met by argument not by interruption.

The case that we make is briefly this. We do not regard the existence of the poor as a permanent fact of our national life. We do not accept that permanently there must be large sections of our citizens too poor to provide themselves with necessities, let alone luxuries. We want an England where there is no poverty, where the ordinary citizen is in a position to do for himself out of his own resources his savings and his earnings what the rich minority can do now.

If anyone asked me what is the level above which nobody needs the Welfare State, I might say that it is about £3,250 a year and that somebody who is receiving that income is not in urgent need of our social services. I should have thought that he is in a position to provide for himself and to leave the Welfare State to those who cannot afford to provide for themselves.

This is the kind of State that we are seeking. We are seeking an England where the ordinary citizen will be rich enough to provide for himself most of the things which the Welfare State now provides for the masses.

Mr. William Hamilton

On a point of order. Is not this a United Kingdom debate? I object to the use of the word "England" all the time.

Mr. Hogg

Further to that point of order. While I sympathise with the preference of the hon. Member for Fife, West (Mr. William Hamilton) for the word "Britain", I hope, Mr. Speaker, that you will not rule the word "England" out of order in this House.

Mr. Speaker

Order. The point which the right hon. and learned Gentleman makes has been made.

Mr. Curran

I would say to the hon. Member for Fife, West (Mr. William Hamilton) that the greater includes the less.

We want to create in this country a society where the level of prosperity rises to a point at which the welfare traditions of the past become archaic. The notion that we must always have in this country a great mass of poor people who must be looked after from above, either by private charity or State paternalism, we regard as abhorrent and as increasingly obsolescent. So far from being satisfied with a society where there are large numbers of people who are poor and need help, we seek to create a society where there is none. Over our last 13 years I think that we can claim that we went some distance towards doing it. While we have gone some distance, however, we have still a long way to go.

But this is the goal towards which we are working. We want a society in which there is no poverty. We regard social services provided from above for people who cannot afford to look after themselves as an important wayside station—but it is a wayside station and not a terminus. This is the difference between us and the Labour Party.

I was disappointed to hear from the Chancellor of the Duchy of Lancaster a speech in which he took for granted the permanent existence of poverty in England, a great mass of poor people who will stay poor and who will have to be looked after from above. I do not want to hurt the right hon. Gentleman's feelings. I have the greatest respect for his intelligence. What I dispute is not his intelligence, but his social outlook. He has the social outlook of somebody running a Crown colony. He regards the natives, the peasants of the country, very much like the old Imperialist "blimps" used to regard the people of Asia—as people to be looked after.

The right hon. Gentleman will look after them in a kindly fashion. But the idea of their being able to look after themselves, instead of having his avuncular attentions, is beyond him. What the Labour Party wants is the social equivalent of a mink-lined soup kitchen, a soup kitchen with all mod. con. On this issue I shall be happy to put our case before any sort of audience of any class in this country.

I would ask them, "What sort of England would you want to live in—an England where the mass of the people are in poverty and are looked after from above, or an England where there is no poverty and where everyone is able to do for himself what only the upper and middle classes can do now?" That is the issue in this debate. As long as the Tory Party is able to present it vigorously to the voters we need have no misgivings about the statement of our case on welfare which was put before the House this afternoon.

7.47 p.m.

Mr. Ioan L. Evans (Birmingham, Yardley)

I hope that the hon. Member for Uxbridge (Mr. Curran) will forgive me if I do not comment upon the remarks which he has just made. They remind me of a story attributed to the Duke of Wellington. Someone asked him, "Excuse me, sir, are you Mr. Jones?" The Duke replied, "Sir, if you believe that, you will believe anything". Anyone who believes that hon. Members opposite come before the House as champions of the Welfare State will believe anything.

There have been frequent references in the debate to the speech made by the Leader of the Opposition in Birmingham. Indeed, it has been said that the debate arose from that speech. It is interesting that both the Leader of the Opposition and the Prime Minister visited Birmingham recently. The. Prime Minister addressed a meeting and then visited an old people's home and opened a new block of flats. The Leader of the Opposition addressed a political meeting in Birmingham, and then for 20 minutes played the organ in the town hall. That typifies the difference between the parties and their approach to this subject.

It is reported that the Leader of the Opposition has said that the country needs two things, and this debate has brought out what those two things are. The first is a General Election and the second is a Labour Government with an increased majority. The Leader of the Opposition in the debate today attacked the Prime Minister. He had to wait for the Prime Minister to go to Moscow before he attacked him. I hope that he repeats that attack on a Tuesday or Thursday when the Prime Minister is here.

We have had an attack on the Prime Minister before from the right hon. Gentleman. Some time ago, he accused the Prime Minister of hedging, but he, of course, is a hedgehog. He is bristling with his difficulties, and he is hibernating in the Tory winter of his own discontents.

When debating the Welfare State, we should remind ourselves that the term "Welfare State" was first used in this country, although it may not have been coined by him, by Archbishop Temple, who was well known for his Socialist beliefs. This was during the war years when there was talk of building a better Britain after the war, the time when Arthur Greenwood, then Minister without Portfolio, set up the Commitee chaired by Sir William Beveridge to investigate the social services.

Time and again the Leader of the Opposition has referred to the Beveridge Report, but what those who have read the Report know is that it was a devastating condemnation of the situation in Britain during the years before the war, when the Tories were in power. When he was in Birmingham, the Leader of the Opposition said that his father had had difficulty in bringing up him and his brother; they could not afford to have a holiday and they could not afford to have luxuries. This was the state of affairs in the right hon. Gentleman's family living in Tory Britain before the war.

There is in the Beveridge Report a phrase which I well remember. Looking at the situation in Britain in the years before the war, Beveridge said that there were five giant evils on the road to progress—want, ignorance, idleness, disease and squalor; and they were rampant in those years.

The Labour Government which came in in 1945 not only implemented the Beveridge proposals but went further and improved upon them. Everyone who has to stand at an election gives lip-service to the Welfare State. Everyone says that he believes in it. But, as the Good Book says, Ye shall know them by their fruits". People are not judged by what they say. People and Governments are judged by what they do. I shall, therefore, examine what the Labour Government did after 1945, what the Tory Government did from 1951 to 1964, and what this Government have done in their 16 months of office.

The Labour Government of 1945—this is undisputed—laid the foundation of the Welfare State. During those years, we had the National Insurance Act, the National Assistance Act replacing the old Poor Laws, the National Insurance (Industrial Injuries) Act, and the National Health Service Act, opposed in its early days by hon. Members opposite but eventually proclaimed by them. In the end, they almost came to the point of claiming parenthood of it, but in the early days they opposed it bitterly, saying that it was socialised medicine.

The 1944 Education Act was implemented by the Labour Government. True, it had Lord Butler's name attached to it and it was an Act of the Coalition Government, but it was the Labour Government who implemented it. For the first time in our country's history we had a policy of full employment in peace time.

Mr. Hogg

I must correct the hon. Gentleman on one point. It is wrong to say that the Conservative Party opposed the National Health Service Act. I was a Member of that Parliament, and I turned up the debate only today. The Conservative Party opposed certain features of the Act, but it accepted a comprehensive system of national health, which was, after all, the basis of the Coalition Government's White Paper in 1944 and has been common ground between the parties ever since 1944.

Mr. Evans

I accept what the right hon. and learned Gentleman says. He was here then and I was not. But my understanding is that the Conservative Party voted against the National Health Service Bill on Second Reading, and I was about to examine more closely how Tory Governments since acted towards it.

Mr. Hogg

The fact is that there was a reasoned Amendment on the Second Reading, the terms of which are on the record, and the speech of Mr. Willink, as he then was, set out exactly the position which I have now rehearsed to the hon. Gentleman.

Mr. Will Griffiths (Manchester, Exchange)

But the right hon. and learned Gentleman and his hon. Friends voted against the Third Reading, too.

Mr. Evans

My hon. Friend reminds me that the Tories voted against the Third Reading. We will look it up. It is a matter of fact. However, if the right hon. and learned Gentleman now says that the Tories were ardently behind the National Health Service, I can only reply that I remember a tremendous amount of controversy at the time when the Labour Government were trying to introduce it.

I have given an outline of the Labour Government's work in establishing the Welfare State. Its foundations were laid at that time and we began to move forward to a new society. In 1951, however, the Tories were returned to power. What was our experience during their 13 years of office? The fabric of the Welfare State was torn. Under the Labour Government, tenants had security of tenure. Now, although Lord Woolton went to the country and said that the Conservatives would not interfere with rent restrictions, the Rent Act is on the Statute Book. This Act meant that thousands of people were thrown on to the streets. I am sure that the right hon. and learned Gentleman has had many such cases in St. Marylebone, as other hon. Members have in their constituencies. In nearly every constituency throughout the country people were evicted because of the Rent Act.

What happened to local authority housing during those years of Tory rule? The Leader of the Opposition says that everyone would like to own his own home. Everyone, of course, would like to go to the Riviera. Everyone would like to come to London and have a nice time, staying in expensive hotels. But there is no question of freedom of choice. Although people may want to own their own homes, there are many thousands who will have to be content to rent a home. In 1963, there was a total of 600,000 families on local authority housing lists, 100,000 more than in 1959. This was progress under the Tories. There were 78,000 on the list in Glasgow, 46,000 in Liverpool and 45,000 in Birmingham. What were the Tories doing about houses for rent? The number of council houses built in Great Britain fell from 233,926 in 1953 to 116,363 in 1963.

Another piece of Tory social legislation was the graduated pension scheme. There have already been references to the Lloyd George Act, and it was said at the time that that Act meant that people would get 9d. for 4d. A man paid 4d. in and got 9d. out. What do we know about the graduated pension scheme? A man pays more into it than he will ever get out. It is a swindle perpetrated on the British people. I hope that, in the near future, my right hon. Friend the Chancellor of the Duchy will get away from this scheme and introduce something much fairer for the people of this country.

The Tories claim that they support the Welfare State, but it is by their actions that they must be judged. They told us that they would do nothing about National Health Service prescriptions, and the right hon. and learned Member for St. Marylebone (Mr. Hogg) has said that they believed in the National Health Service. Free prescriptions were part of the National Health Service, but it was in the Parliament after the Tories took office in 1951 that we had prescription charges.

Mr. Hogg

I know that the hon. Gentleman does not want to misrepresent the facts. The prescription charge was introduced by the Labour Government and the present Prime Minister resigned from that Government because of it.

Mr. Evans

The right hon. and learned Gentleman will find that the Labour Government were considering the possibility of taking action but never took it. It was the 1951 Tory Government who imposed the charge.

Mr. Will Griffiths

The right hon. and learned Member for St. Marylebone (Mr. Hogg) is quite wrong. The charge on prescriptions was introduced by the right hon. Member for Enfield, West (Mr. Iain Macleod) as Minister of Health. It is true that legislation was introduced by the Labour Government but it was never implemented. It was implemented for the first time by the right hon. Member for Enfield, West.

Mr. Hogg

The only point I make is that the hon. Member for Birmingham, Yardley (Mr. Ioan L. Evans) is quite wrong in attributing this idea to the wicked Tories. It was, in fact, the wicked Socialists who did this shameful thing—and Mr. Aneurin Bevan and the right hon. Gentleman the present Prime Minister resigned from the Government because of it.

Mr. Evans

One judges people not by what they say but by what they do—and the Tory Government did this. They imposed the prescription charge. They made it 1s. per prescription. When they were returned to office in 1955 they increased it to 2s. Finally, they made the charge 2s. per item. The present Government have removed the charge. I repeat—let us judge people by what they do, not by what they say.

We have now had the Labour Government barely 16 months. It seems such a short time and yet so much has been achieved. We have gone a long way to restoring a sense of social justice to the conduct of our national life. National Insurance benefits have been improved by the largest amount since 1946, and the same is true of industrial injury benefits. The payment to the 10s. widow has been trebled. Maternity benefits have been improved and National Assistance scales raised. There have also been improvements in war pensions, and local authorities are able to give travel concessions to old people. The earned income relief for people over 65 has been increased. This is in addition to the removal of the prescription charge. One could go into greater detail but I want to turn attention now to education and housing.

Education has been given high priority. There are now 7 million children in our schools. In 10 years' time there will be 9½ million. There is to be a planned expansion with careful attention to priorities. This will deal with the main problems of the shortage of teachers, school building, the reorganisation of secondary education and the need for additional places at the universities.

When the Government came to office, the country was 55,000 teachers short and the number of students in colleges of education has been greatly increased since. It is now approximately 60,000 but is to be increased to 111,000 by 1973—almost double within eight years. A number of other plans were summarised in the speech of my right hon. Friend the Secretary of State for Education and Science to the N.U.T. conference.

We are also very familiar with the story of the school buildings problem. I remind the right hon. and learned Member for St. Marylebone that it was he who was instrumental in preparing the survey of school buildings but did not publish it. The country had to wait for the present Government to come to office to see that report, which he prepared as Secretary of State. The report showed that, in 1963, out of 29,074 schools over two-thirds had one or more serious defects; 17,272 had outdoor sanitation; 8,845 had no staff room; 4,462 had no school hall and 10,764 were on substandard sites.

We are discussing the future of the Welfare State in the light of the Defence Estimates. We must begin to get our priorities right. Next week, hon. Members opposite will be shouting about the need for aircraft carriers. They will do so in the face of the crying needs of our children.

Mr. Hogg

I sincerely apologise for interrupting again, but I must correct the hon. Gentleman once more on his facts. My predecessor was responsible for the schools survey. I did not prepare it. I introduced the "mini-minor" works which the Government have abolished.

Mr. Evans

But the Government of which the right hon. and learned Gentleman was a member refused to publish the survey and the country had to wait until the present Government took office. I was giving credit to the right hon. and learned Gentleman at least for preparing the report. He and his right hon. Friends did not bring the facts before the people.

If we are to have a Welfare State we must concern ourselves with ensuring that the people are adequately housed. Already the Government have announced their national target for 500,000 houses a year—250,000 by local authorities to rent and 250,000 for owner-occupiers. But it is not just a matter of setting targets, and in the last 16 months we have seen so much done by my right hon. Friend the Minister of Housing and Local Government.

The new Rent Act repealed the old Tory Rent Act of 1957 and has restored security to tenants of private landlords. The Land Commission Bill will tackle the problem of the tremendous profits in land sales. Soon we shall have a leasehold reform Bill. Today, many people are in fear of what will happen when their leases expire. Now the Government have introduced the Housing Subsidies Bill and the Building Control Bill.

When the Government look back over the last 16 months they can see that they have done much to restore the Welfare State and the foundations on which we can build not a Welfare State—I think now we must think of a new term for the kind of nation we seek—but a "new society". In the words of the poet, Ill fares the land to hast'ning ills a prey, Where wealth accumulates, and men decay; Princes and lords may flourish, or may fade; A breath can make them, as a breath has made; But a bold peasantry, their country's pride, When once destroy'd, can never be supplied. Let us restore the pride of the people in our country and restore the foundations of the Welfare State and build the new society. That is what the new Government, a Labour Government, will do after the next General Election, whenever it comes.

8.10 p.m.

Mr. David Steel (Roxburgh, Selkirk and Peebles)

If there was anyone outside the House who doubted that a General Election was imminent, his doubts will have been entirely removed by the speeches which we have heard so far today. I must confess that most hon. Members have appeared to be rehearsing their opening election speeches for the campaign. Very few have devoted their remarks strictly to the future of the Welfare State. The hon. Lady the Member for Hitchin (Mrs. Shirley Williams) was a notable exception, and I will return later to what she had to say.

It was extraordinary that in the opening speech we had a Minister of the Crown devoting half of his speech to publications issued by the Conservative Central Office. That seemed to be a complete waste of time to start with. Then we had the Leader of the Opposition charging Ministers with deception and at one point we even had the Prime Minister's guts trailing across the Floor of the House. What that had to do with the Welfare State I cannot think.

I am convinced that more and more people watching from outside the House are becoming somewhat cynical about politics, and no more so than when they consider what happens in these discussions about various provisions in the Welfare State, no more so than when we discuss an issue which has been mentioned several times today—the old-age non-pensioners.

Here we have an example of something which the Labour Party heavily and rightly attacked at the last General Election. We were assured that the minimum income guarantee would be forthcoming. I accept the explanation of the Chancellor of the Exchequer that that has not been possible because of the economic situation, but that is no excuse for nothing having been done for these comparatively few people, the old-age non-pensioners. The event which took place just before I was elected to the House, when the Private Member's Bill of the hon. Member for Abingdon (Mr. Neave) was fillibustered out, seemed to be an extraordinary manoeuvre and made many people outside the House increasingly cynical about politicians. The discussion on this topic this afternoon has been reminiscent of the worst type of Rugby football—"To hell with the ball; let us get on with the bloody game".

The graduated pension scheme is another example which the Labour Party rightly condemned in its period in opposition and at the last General Election. It is still with us and we are only promised that it will be abolished in due course. While they have been in opposition, the Conservatives have managed to do a complete about turn and have also concluded that it is a swindle and should be abolished. It is still with us under a Labour Government and at the next election we shall have the Conservatives saying that it is a disgraceful scheme and that it will have to be abolished. The delay in the production of the survey on social services, being undertaken by the Chancellor of the Duchy of Lancaster and for which we have all been waiting with great interest, seems to be out of all proportion. For example, the earnings rule is still with us. This has been attacked from all sources at various times.

I urge the right hon. Gentleman in considering what should replace the graduated pension scheme not to pour too much scorn on the private pensions schemes. My party and I believe that it is no part of the State's duty to provide compulsory pensions, whether through a national scheme or compulsory private schemes, above a reasonable basic subsistence level. By all means let additional private schemes be encouraged and made to conform to some general pattern which makes them transferable from job to job, and I hope that, despite all the obvious difficulties, that will be the net result of the social services review.

Mr. Molloy

Would not the hon. Gentleman agree that the fact that many of these private schemes are not transferable, which has a grievous effect on the mobility of labour, makes them in that respect as big a swindle as the Tory scheme?

Mr. Steel

I was arguing in favour of their being made transferable. I agree that at present they are as unsatisfactory as the graduated pension scheme. What I am saying is that the fact that they are not transferable at the moment—and I understand that there are 60,000 of them—is no reason for damning and not encouraging them to continue in a revised form.

I want to turn to a matter which has not been mentioned in the debate. It is the need, which I have seen in the short time that I have been a Member of Parliament, to have a complete review of the administration of the various facilities provided by the Welfare State. For example, there is the care of old people who are no longer able to live at home. The most fearful complications arise. Some old folk's homes are under the care of local authorities, while geriatric hospitals are under the care of hospital boards of management. Yet these people may be moved from one to the other and back. I may be anticipating the outcome of the Royal Commission on Local Government, but it seems to me that area health boards should coincide with area regional government and we should get away from the dual, and sometimes triple, control by different authorities of the same welfare facilities.

The Chancellor of the Duchy of Lancaster mentioned the new provisions to provide facilities for G.P.s. In my constituency and in many others comprehensive clinics are needed where G.P.s can practise and in which, certainly in the smaller towns, there can be cottage hospitals and maternity units, and so on, all in one. The G.P.s with whom I have discussed the matter are quite keen to see that pattern developing, and yet there is no encouragement for it. Some G.P.s are going ahead with the Government scheme and are building new surgeries which will be quite separate from future hospital replacements and maternity unit replacements which will come in future years. There is this lack of co-ordination between different aspects of the welfare facilities.

Then there is the matter of financing the Welfare State. I find myself in agreement with the Leader of the Opposition about this. The whole system of stamp licking is not merely administratively cumbersome and out of date, but the National Insurance stamp has now risen to such a level that it is a poll tax and falls most heavily on those who can least afford it and least heavily on those who are wealthy. This is a provision which should be changed and my party and I would prefer a system of a payroll tax, similar to that now used in European countries, which, apart from providing funds for the Welfare State, would encourage the maximum use of available labour.

The Leader of the Opposition—and this is the basic distinction between the Conservative and Labour Parties on the Welfare State—referred to islands of poverty in a sea of prosperity. He was anxious to single out those islands of poverty and for the State to devote its attention to dealing with them and them alone. That is the new policy of the Conservative Party.

My party fundamentally disagrees with this. I do not want the Welfare State to be such that we say to some people "You are an island of poverty and you may therefore have free medicine", or, "You are an island of poverty and we will, therefore, educate your child", or, "You are an island of poverty and we will therefore give you some sort of pension". If that is the tendency which the Conservative Party is to encourage, we shall get a sort of two-tier welfare society and introduce a new concept of haves and have-nots which my party and I would utterly reject.

Mr. Hogg

I am sorry to interrupt again, but this, too, is a misunderstanding of what my right hon. Friend said. The essence of the matter is that there are groups of people, for instance, the chronic sick, who have never been able to earn the wages of full employment. Whatever is done in whatever type of society, they will continue to require help which the fully employed do not need.

Mr. Steel

That is the case with the present scheme. Perhaps I can illustrate where we disagree. Let me take the example of the whole subject of benefits for children. The Leader of the Opposition singled out this example and said that there were large families with low incomes and that they were the people whom he would single out under this head for assistance.

There is a very interesting new Liberal pamphlet published today by Professor Michael Fogarty—I shall be delighted to send a copy to the Chancellor of the Duchy of Lancaster—putting forward a completely new suggestion which is quite opposite to that of the Conservative Party, a suggestion which provides blanket grants.

At present, there are four different ways of providing subsistence aid for children, all totally different. One is the family allowance machinery, another is the amount given in some circumstances by the National Assistance Board, another is the benefits payable under the National Insurance Scheme for people who are unemployed or sick, and the fourth is the Income Tax relief granted for children. The total public expenditure on these four different methods amount to £715 million. It is administratively expensive and cumbersome and it is not effective.

Professor Fogarty puts forward the suggestion, which certainly meets with my approval, that we should automatically give grants for the maintenance of children and these grants should be constant, no matter what the conditions of the breadwinner, whether he is working or unemployed. The scale of the grants should be roughly comparable to the National Assistance scale, ranging from just over £1 for young children to just over £3 for older children at university, etc. If this were done the cost of the proposals would be only slightly greater than the £715 million—about £760 million. It would provide a comprehensive, simple and more effective method of financing the maintenance of children.

This is what the Leader of the Opposition would call a blanket proposal. This is the sort of thing which he utterly rejects.

Mr. Eric Lubbock (Orpington)

My hon. Friend has not pointed out one particular defect of the present system of allowances and tax reliefs which, I think, ought to be emphasised. It is that out of this figure of £715 million no less than £505 million is given in Income Tax and Surtax relief to people who do not really need it.

Mr. Steel

I think that that illustrates the tremendous percentage of the total public benefit which we give for the maintenance of children, which goes to those who are probably better off.

Another factor is that under the present welfare system the services are misused. It is possible for someone to be very nearly better off out of work, if he has a large family and is receiving large allowances, than he would be if he was working. This is clearly an undesirable state of affairs and would be remedied under this new proposal. The Chancellor of the Duchy of Lancaster said that the Government were engaged in "a study of family support". I hope that he will consider this suggestion as being a reasonable one.

I would like to comment on what the hon. Lady the Member for Hitchin said. My party is very much opposed to the development of a two-tier welfare system. Even under our present welfare society, there is a tendency for people to contract out of public facilities, whether free education, free maternity services, or whatever it may be. This tendency means that those who are in the most powerful position in society, who have influence or money, by opting out of public facilities, help to bring about a decline in the level of services provided by the public facilities. The interest is not there and one gets back to the situation of the old poor-house, where nobody was really interested because nobody knew and had experience of what went on in these places. That is the basic danger which I find behind the whole of the philosophy outlined by the Conservative Party tonight.

I turn to the Motion and the Amendment on the Order Paper. It is interesting to see that they are couched in vague and general terms. Both contain similar phrases. One says: …to improve and develop the social services… while the other says: …to maintain and improve the welfare state… I am sure that most hon. Members, without looking at the Order Paper, could not tell which phrase was in the Motion and which was in the Amendment. The whole theory behind the Conservative Amendment—that they will provide help for those most in need—is a selective theory to which would bring about the two-tier distinction in the Welfare State. It is one which the Liberal Party, as the party which laid the foundations of the Welfare State cannot accept. For this reason we cannot accept the Amendment tabled by Her Majesty's Opposition.

At the same time, this is a rather negative reason for supporting the Government and I would point out that we cannot wholly join in the acclamation and self-congratulation contained in the first line of their Motion. None the less, because we believe that the principles on which they are progressing are right, even if they have been extremely dilatory in bringing forward many of the proposals, which the electorate was led to believe would be coming forward sooner, we shall give them support and encouragement in the Lobby tonight.

8.25 p.m.

Mr. William Molloy (Ealing, North)

The hon. Member for Roxburgh, Selkirk and Peebles (Mr. David Steel) will forgive me if I do not follow him in detail in his speech. I was greatly interested in some of the marginal aspects he took up relating to the administration of some of our welfare services. He made some very strong and telling points. It is quite probably true to say that the Liberal Party and the Labour Party are, as far as the implementation and spirit of the welfare services are concerned, kindred spirits. I heard some disgruntled noises from my Front Bench when the hon. Gentleman said that the Liberal Party were the founders of the Welfare State, but I for one am prepared to say that probably the greatest breakthrough we saw in this country towards the ultimate destruction—we have not yet achieved it—of vicious, stinking, privilege, was created by Lloyd George.

We carried on the admirable progress when we were in power in 1945. What I have found interesting during the debate is the dichotomy that exists among members opposite. Let me give an example. The speech of the hon. Gentleman the Member for Essex, South-East (Mr. Braine) was almost an apologia for his Leader's—I nearly said "master's"—speech in Birmingham. It was obvious that he thought that the Leader of the Opposition had been a little too honest. He had gone out of his way to show that what the Tory Party really intend to do is to dismantle the Welfare State. The Member for Essex, South-East was very anxious that this correct impression should not seep through to the British public.

On the other hand we had the contribution from the hon. Gentleman the Member for Uxbridge (Mr. Curran), who went to the other extreme. It seemed that he was pursuing an argument through the process of what I think is sometimes called ratiocination, of showing that this injection of something rotten into the Welfare State, which was the purpose of the speech of the Leader of the Opposition, is something which should be speeded up. He thought that it ought to have been done long ago. During one excited moment we heard from him a lapsus linguae—that it was their intention to destroy the Welfare State. This is honesty by accident, being truthful in temper. I hope that the nation will take note of this. What the Leader of the Opposition did was to try to introduce this surreptitiously. We had all sorts of words placed around it, on the basis of "Come into my parlour said the spider to the fly." But I think that the British public will be far too fly to fall for that sort of gimmick.

Another thing which has fascinated me during the debate has been the number of times that Beveridge has been quoted by the Opposition. The White Papers and the ideas probably flow from the Beveridge Committee, but not once did they say, "as implemented by the Labour Government". That phrase was noticeable because of its omission from the speeches of Members opposite.

We can put forward all sorts of fancy ideas, but the test of the pudding is in the eating. These measures were prepared—and they should have been prepared in the 1920s and not in the 1940s—and implemented in five glorious years after the Second World War. If there is any period in our history of which we can be proud, it is that period from 1945 to 1951 when after the most destructive, terrible and expensive war in mankind's history this little island set about lifting the dignity of ordinary people to a level to which it had never been lifted before by any other nation in the world.

This is why it is such a gruesome comment that it is the party of the wealthy and privileged which set about, not even in an open, honest way but in a cunning, surreptitious way, to undermine the Welfare State and to destroy it. We have had side effects of this attack, and it is about time that the Leader of the Opposition—I wish that he were here because someone should tell him frankly—dropped this idea of setting one set of British people against another—council tenants against those who do not have council houses.

This is a wicked and vicious attack by the right hon. and hon. Members opposite. It would appear from what they say that all council house tenants were millionaires and that they were working a "flanker" on us. It would appear as though we cannot get near council estates because of the Rolls Royces and Jaguars. If we said that it was wrong for the working man to have a Jaguar all the "boys" interested in the motor industry, with their shares, would go stark, raving mad. With all the diversions, dichotomies and quarrels in the Conservative Party, it is fair to say that it is not so much a party, more a way of strife.

We all know what happens. When a family with two or three children of 10, 11, or 12 move into a council house, nothing remarkable happens to them. They do not remain at the age of 10, 11 or 12. They actually grow up and make their contribution to society. They become joiners, fitters, school teachers, scientists, and so on. What do right hon. and hon. Members opposite suggest we should do—chuck them out of their homes? Nobody is willing to measure the contribution which people in council houses make. All we have is this constant harping on the fact that they are subsidised.

Let us consider the argument about subsidy. These people are not really being subsidised. Those of us who have had experience of local authority work know full well that the biggest bugbear is interest rates. It is the usurers we have to subsidise. This is the argument. As Nye Bevan used to say, the founder of the Christian religion lost his temper only once, and that was against the money boys, and he had to chase them out of the temple. The Tories have their deeds inscribed on the altar cloth.

The Leader of the Opposition today constantly harped on the fact that he believed in his philosophy, and tried to explain what his philosophy was. We have heard this many times before. People are not interested in philosophy. They are interested in the fruits of the philosophy. The Leader of the Opposition was like the man who tells us all about the ins and outs of his watch and how it works when all that we have done is to ask him the time. One could write the essentials of the right hon. Gentleman's vast speech on the back of a postage stamp and leave enough room for the Lord's Prayer.

The right hon. Gentleman had the audacity to talk about the language of priorities. Nothing could amaze me more than to hear the Leader of the Conservative Party talking about the language of priorities and including welfare as one of them. The right hon. Gentleman had that wrong as well. He talked about the high cost of preventive medicine. In the language of priorities, we put preventive medicine above curative medicine. This is the quintessence of the Welfare State. That is why we want healthy babies. We want women to be looked after at pre-natal clinics before giving birth to their babies, so that when children are born they are healthy and kept healthy and do not need curative medicine. This might be a bit difficult for the Leader of the Opposition to understand, but I hope that some of his right hon. Friends will try to point it out to him because he is not present to hear me say it.

When we talk about the language of priorities, this is what we mean. It is far better to prevent disease and illness than to wait until somebody has them and, when people cannot stand it any longer, to provide a means of curing them. Even from a practical, economic and—dare I say it?—businesslike point of view, that is the sensible thing to do. The business man would rather have healthy workmen. We would much rather have healthy teachers and scientists than those who have good, astute, capable and able minds but who are racked by some form of disease or ailment which could have been prevented in childhood.

What hon. Members opposite are saying in the arguments which they deployed is that our plans on the Socialist benches for making the Welfare State the massive thing that we want it to be will undermine people. That is quite wrong. The test is that if one measures the happiness, health and even the contentment of the mass of ordinary people during a 20-year period both before and after 1945, one knows which of the two any decent person prefers. There is no comparison. The fundamental reason for this has been the creation of the Welfare State.

When hon. Members opposite tell us that they intend to improve the Welfare State, we have only to look at the record. The fact is that they have been placed in a difficult dilemma. The Conservative Party is the party of privilege, property and power, but somehow they have to come to terms with democracy. Therefore, the language used today by hon. Members opposite would have been looked upon by their predecessors of 50 years ago as some form of refined Marxism and Leninism, so far have hon. Members opposite advanced. But that is not because they want to.

This is the fundamental difference that divides us in this Chamber. While it is our desire to create the Welfare State, hon. Members opposite must hang on to it, because if they do not they will suffer an even bigger political disaster than they will suffer at the next General Election. They do not like the Welfare State; they have no time for it. Their dilemma is in having to acknowledge the necessity of the Welfare State because of the nuisance of democracy and the fact that people have votes.

There were some aspects of my right hon. Friend's speech this afternoon with which I was not altogether happy. [HON. MEMBERS: "Hear, hear."] I am glad to hear that chorus from hon. Members opposite, because I have a few more things to say to them later. Then, however, there will probably be a thundering silence, unless we have the usual demonstration of apoplexy.

We have heard the argument about whether we should continue to be a stamp-licking nation. I for one agree that it is about time we stopped all this. In the various forms of National Insurance, we find means of counting people and putting them into different categories. We have to employ a large group of people to count them, have different fancy-coloured stamps and give people different cards, and we create an expensive problem.

The simplest way, instead of bothering to count everybody, would be to put everybody in. It would not break my heart if a couple of millionaires came in. By putting everybody in, nobody would be left out. Therefore, logically, if everybody is in and nobody is left out, there would be no need to count us. I see no difficulty in a modern nation like ours being able to devise a National Insurance scheme on precisely the same lines as the National Health scheme.

One thing which encourages me to advocate this is that all the knowledgeable and academic and highly educated folk told us in 1946 and 1947, "Your National Health Service is not going to work." If those knowledgeable folk had told us it was going to work I would have been apprehensive. They are submitting the same argument about National Insurance. I hope that the right hon. and learned Member for St. Marylebone will make mention of the fact that perhaps at some time we should make a serious study of whether we can in this little island once again beat the world in this principle of National Insurance, without any form of test and without any form of examination whatever—the principle that just because one is a human being one is entitled to it.

A very brief word about education and then I shall bring my speech to a close. On both sides of the House we have to acknowledge that if we really believe that this nation can keep its head above water, if we really believe we can compete with other large industrial nations—and this is a must—then we cannot go on, as we have for so many years, following the principle of having the best of education for those children who had the good sense to pick very rich parents. We have to put an end to that. If I had my way all the children in the public schools would know that in four years' time there would be no more public schools—and that would be the end of them. There is a problem here with which we have got to come to grips, and my party has not faced up to it fairly and squarely. The fact of the matter is that in this modern, scientific, technological world we cannot afford to lose the contribution which any future scientist or technologist may make irrespective of where he comes from or what his class is, and so on.

This is the essence of what we in this party believe about the Welfare State. It is not merely a question of encouraging people to give of their best; we want people to have welfare, not through a test, not through any examination, but because they are entitled to all the best their nation can give, simply because they are members of that nation, and for no other reason—and if we can afford it, let us give some of it to members of other nations, too.

What fills me with loathing and repugnance is that black core running through the speech of the right hon. Gentleman the Leader of the Opposition—that welfare in the future will go back to the means test of the 'thirties. That would be the most retrograde step this nation could take, and not only for us but for what it would mean for any example we may wish to give to other nations.

We believe that every man and woman and child is entitled to welfare by right. We believe in it because we think that, fundamentally, it enhances dignity. Welfare also means the inclusion of decent, proper leisure; we believe in the good home, in good health—all these things to be put in the place of ugly, repellent fear. I believe that the people of this nation will acknowledge that, and that when they do they will be enriching not only their own lives. I believe that when this Government carry on with their schemes, when they return after the little hullabaloo of a recess which we may be having, whether next month or in a year or so, and carry on with these schemes and put them into practice, we shall not only enrich the lives of our own people but give a lead to all mankind.

8.44 p.m.

Mr. Paul Dean (Somerset, North)

I have only about five minutes, and I shall be very brief. I agree with one thing which the hon. Member for Ealing, North (Mr. Molloy) has just said, and that was the criticism which he made of, and the disappointment he expressed with, the speech by the Chancellor of the Duchy of Lancaster earlier this afternoon. We have been told for many months either that we are starting from scratch, or that we are waiting for the review. We on this side were hoping that on this occasion we should know something at least about what had been happening, that something about the review would have been revealed, that we should have learned what have been its results.

But what do we find? Nothing that the right hon. Gentleman told us today is new. The bulk of it we already knew. We were told that there would be a comprehensive scheme on an earnings-related basis. We knew that already. The right hon. Gentleman did not tell us any of the vital facts. How high will the contributions be? How high will the benefits be? What will be the position of occupational schemes? Will people in them be able to contract out of the Government scheme? The income guarantee seems to be finally dead and buried. The right hon. Gentleman told us that he was anxious to do what he could, but that this thing was out—in great contrast to what his right hon. Friend told us at the last election, that it would be introduced without delay.

As for more help being given to the needy, the right hon. Gentleman put forward a scheme which appeared to be very similar to that proposed by my right hon. Friend the Member for Bexley (Mr. Heath), in his Birmingham speech the other day. I am not going to argue who should claim the benefit for this, but it is very significant that the thoughts which my right hon. Friend put forward are very similar to those put forward by the right hon. Gentleman this afternoon.

The right hon. Gentleman went on to say that in the new scheme he was seeking to bring about a situation in which those in need would receive a single pension with the minimum of tests. I assume that this means that the minimum income guarantee without any means test has already been thrown overboard, and that the right hon. Gentleman now recognises that some test of need or means—however he likes to put it—is required. Apart from that we have been given nothing new in respect of this review.

I want to put forward some of the reasons why I believe it to be essential to devote more resources to the welfare services, and why, if we are to do this, people who can provide for themselves should not be able to rely so much on the State. We have heard that this means putting cash benefits on a means test basis and jumping the queue in the hospital services. I deny both propositions, as did my right hon Friend and those of my hon. Friends who have spoken in the debate.

First, there is mounting evidence that people want to provide more for themselves, and are able to do so. It would be surprising if this were not the case. In these more prosperous days, when people are used to a wide variety of choice in consumer goods, it is natural that they should want a more direct choice in respect of things which are basic to the quality and life of every family. The survey, "Choice In Welfare", brought out some significant facts about the opinion of our people. We cannot rely too much on that survey, because it was a small one. None the less, some significant facts were revealed about the opinions of the vast masses of people who are now comparatively prosperous.

Apparently we are to deny them a choice in health matters. We shall tell them, "You can have as much choice as you like in consumer goods"—what the Prime Minister once referred to as "candy floss"—" but you suddenly become an enemy to society when you spend your money in pensions and health." I do not know whether that is what the Government are saying, but many of their policies appear to be approaching perilously close to that conclusion. Additional resources can be brought in by encouraging people to provide for themselves in this way. After all, subscriptions are coming into occupational pension schemes at a rate of about £1,000 million a year. Although on a very much smaller basis, many millions of pounds of additional resources which would not otherwise be available are coming into health schemes.

Surely this is one of the ways in which we can ensure that those people in our community who must look to the State because they cannot provide for themselves have more of the resources which the State is able to provide.

8.50 p.m.

Mr. Quintin Hogg (St. Marylebone)

When the Home Secretary made his first speech in his new office about crime he taunted my right hon. Friend the Member for Monmouth (Mr. Thorneycroft) that it was a wicked thing to hold a party Division about the subject of crime. We are now discussing the welfare of the individual people of this country and I must say that, if it is wrong to make a party Division about crime, it is exceedingly odd of the party opposite to have done nothing else the whole evening but rehearse what they believe to be their election speeches on the subject of welfare. Of course, we all know that the party opposite cynically make a party issue of whatever they choose and then, when they do not like a subject, says that it is above politics.

As a matter of fact, I think that they were wrong both times. I do not see why we should not have a Division on party lines at the end of a debate. After all, nobody would listen to the wind-up speeches if we did not. I have answered enough debates in another place to know that this is the case.

However, there is another reason which is perhaps more reputable than that. There is, of course, absolutely no reason why the great parties of this country—one or other of which must govern it—should not come to their own independent conclusions about the great issues of the day in the light of the circumstances as they see them and compete for public favour with rival plans. The only qualification of that proposition is that each must honestly try not to misrepresent the other, so that the country can tell what are the points of resemblance between the two plans and what are the points of difference.

In that respect, I agree with the leading article in The Times, to which the Chancellor of the Duchy of Lancaster referred. He and that leading article said that it would be deplorable if this debate should turn out to be nothing more than an occasion for party bickering. From that point of view, although I had been greatly looking forward to this debate, I have been to a certain extent disappointed in its results.

Although I have listened to every speech—with the regrettable exception of that of the hon. Lady the Member for Hitchin (Mrs. Shirley Williams), who, my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) tells me, made an extremely good speech: I was very sorry to have missed it—I shared the disappointment which was expressed not only from my own benches but from the Liberal benches, and by the party opposite as well, with the speech of the right hon. Gentleman the Chancellor of the Duchy. After all, what has he been doing over the last 18 months? He has had nothing else to do. The only point on which I disagreed with my right hon. Friend was when he said that the right hon. Gentleman had only two secretaries. He has had the whole Civil Service behind him. He has had nothing else to do except think about the subject of this debate.

Yet all that the right hon. Gentleman achieved was to spend his first 20 minutes denigrating the constructive proposals of my right hon. Friend and five minutes expatiating on the advantages of the scheme for wage-related benefits already before the House, and then he patted himself on the back because at some time before 1970 the princely sum of £387 million, £70 million of which is already committed to the Bill which is before the House, will be available for human welfare in this country. The mountains were in labour, but the right hon. Gentleman failed to produce a single brown mouse as a result of his terrible exertions.

I will not pursue the right hon. Gentleman far into the personalities with which he began his speech. But he referred to me personally, and there is one thing that I will say to him, because it is not irrelevant to the subject we are discussing. I agree with him that there are many points of view according to which my right hon. Friend the Member for Leeds, North-East could have answered the debate far more capably than I. But I have a qualification to speak in this debate which has been shared by nobody who has so far taken part in it. I am the only person who has so far participated who spoke in the original debate on the Beveridge Report. There are very few Members here who actually attended that debate, but I spoke in it. I remember that occasion, and remember it will.

Mr. E. Shinwell (Easington)

It was a terrible speech.

Mr. Hogg

The right hon. Member for Easington (Mr. Shinwell) must learn to grow old gracefully.

Mr. Shinwell

I have not yet got to writing filthy articles in the Sunday Express.

Mr. Hogg

If I had thought that the right hon. Gentleman was going to give vent to that kind of intervention, I should not have accorded him the privilege of giving way to him.

I wish to refer to the original debate on the Beveridge Report. I remember it well because it was the first speech that I made in this House after having been absent for two years with the Middle East Forces. I came back downgraded medically and with my personal life, as I believed, in ruins. I came back for one simple purpose. My right hon. Friend referred to the excitement and enthusiasm with which the original Beveridge Report—which we are really discussing again tonight—was greeted, as I knew, by the entire fighting services in the Middle East, and, as I believed, by the entire population of this country, and by English-speaking people throughout the world. I came back—I say this deliberately because of the smears which have been cast at my party and myself—for one reason, and one reason only—to support heart and soul the scheme which was embodied in that Report.

It is difficult now, of course, to recapture the feeling of excitement and enthusiasm that existed then. It seems small beer now. What was it? It was 24s. for a single man and 40s., I think, for a married couple. So it was not that which caused the feeling of excitement and hope just after the Battle of Alamein, when Stalingrad was still under siege. The thing that created the hope was the proposition contained in that Report that the author of it believed, and I believed, and the great majority of the people of the country believed, that by a comprehensively organised system of public services want could be abolished; and could, indeed, have been abolished—and I accept what was said by an hon. Member below the Gangway opposite—even under the conditions that existed between the wars.

That is what created the hope, and that was the objective of the institution of the Welfare State—which, I frankly admit, is not a phrase that I would have chosen, although it exists both in the Motion and in the Amendment—which we were debating nearly 23 years ago almost to the very day—February, 1943. And that has proved an objective common to all the main party groups from that time to this.

The Beveridge Report was translated into the 1944 White Papers, and the 1944 White Papers were partly legislated by the children's allowances provisions of 1944 and subsequently by the Labour Government which followed. Ever since then, one Government after another has administered that Report, has extended it, and has improved it all along, and although on occasions there may have been sharp divisions between the two sides, there has been a basic agreement between the two sides of the House as to the desirability of maintaining the policy embodied in those White Papers. There can be no doubt of that.

If we want now to re-examine—as we do want to re-examine, after 23 years—the foundations of that Report, it is not because we repent at all of our solid support: over all that time. When I hear hon. Members opposite talking about the 13 years as though they had been 13 years of regression in this respect, I wonder how they can possibly deceive themselves to that extent.

My hon. Friend the Member for Essex, South-East (Mr. Braine) gave one figure, and I will give another. The proportion of national income devoted to social benefits during the 13 years of Conservative rule rose from 5 per cent. to 7 per cent.—5 per cent. of the lower national income when we took over, and 7 per cent. of the higher national income when we came out of office. I say to hon. and right hon. Members opposite that if they ever do have a record to equal those 13 years, then will come the time—[Interruption.] Do not let them get so cocky, because it will be a very long time before they can rival what we achieved.

Whether we take the figures which I gave or which my hon. Friend gave, or any other criterion one chooses to mention, whether it be education, housing, or the savings of the people, it will be found that, beyond doubt, the 13 years which they deride were the 13 years of most rapid social advance in the history of this Island.

If I believed for a moment that the party to which I belong would abandon the policy which it has pursued during the 23 years since the debate of which I have spoken, I would leave it as certainly as I would leave it if it abandoned private enterprise because the sheet anchor—[Interruption.] It is as well that we should remember this. Neither the Beveridge Report nor the Welfare State which has been erected upon its foundations was a Socialist report or a Socialist plan. The author of that Report believed and the party to which I belong believes that publicly organised social service is compatible with privately-owned industry. This is the sheet anchor of our party. That, in fact, was the belief of the author of that Report.

It is not unreasonable that after 23 years we should begin to rethink some of the foundations upon which we have been building. No set of social institutions are so permanent that they do not require re-examination after 23 years. I think that we were right, Government after Government, to go on building and extending on the same foundations for that period of time. Indeed, there was a special reason why we should, because the Report, in a sentence summed up in the words of the author himself, attached a special significance to the year in which we now are, the financial year 1965–66, the 20th year after the inauguration of the scheme. He said: Briefly, the proposal is to introduce for all citizens adequate pensions without means test by stages over a transition period of twenty years while providing immediate assistance pensions for persons requiring them. That brings us to the year 1965, the year in which we now are—[HON. MEMBERS: "Oh."]—the year 1965–66, the financial year in which we now are. Of course it is right to take note of the fact that we are just as far now from the final scheme envisaged by the author of that Report as we were when he wrote it, because anybody who has read the Beveridge Report will realise that it was designed from its inception as an actuarial scheme.

It was designed from its inception as a scheme whereby the worker contributed, as it were, a sum by way of compulsory saving as a contribution, the employer contributed a sum by way of deferred earnings for his employee as a contribution, and the State contributed what was a redistributive payment by way of contribution. What the author of the Report was saying, 23 years ago, was that 20 years after the inception of the scheme the scheme would be on an actuarial basis. Now we know that it is not. Therefore, it must be clearly right for us to rethink exactly what has gone wrong with it as well as what has gone right with it, and this is the time to do it.

The first thing, which my hon. Friend the Member for Essex, South-East also referred to, is that it is beyond dispute that the Beveridge Report and the system of social security which was designed upon it, and which we are now operating, was from the outset and intrinsically conceived as operating in what we should now call conditions of under-employment.

In paragraph 441 of the Report the author expressly says that the assumption upon which he was working was that over all industry there would be unemployment of 8½ per cent. or, on the pre-war method of calculation, 10 per cent. This was very much more than a mere mistake of pre-vision, because the author was devising a scheme—this was very largely what attracted us all—for winning the previous peace. He was devising a scheme to get rid of the insufficiency of earnings in a condition of under-employment, and for 20 years we have been administering it in conditions of inflation and labour shortage.

If course, we must think whether or not this structure is ideally suited to the purposes which-Sir William Beveridge originally had in mind or which we may have in mind today. Of course, we must ask ourselves whether the finance is right, or whether it perhaps does not enhance the very condition of labour intensiveness which is at the root of many of our economic problems today. One of my hon. Friends referred to the continental systems devised some years later. They, at any rate, give some countenance to the view which I have been suggesting, because, although their benefits are at least comparable with, and in some cases better than, our own, the finance is exacted more as an on-cost on industry and less as a charge on the taxpayer. Are we not entitled to say, as we do in our Amendment, that it must at least be considered at this time, 23 years after the Report was drafted, whether the finance of the scheme is adequately designed for our present needs?

Again, it is beyond doubt that the Report, and the scheme which we are now administering based upon it, took no account of inflation and took no account of improved standards of earnings. Both have over the 23 years fundamentally altered the character of what we have been doing. What was devised as an actuarial scheme has been used by successive Governments—by the present Government and by the Government who preceded them—not as an actuarial scheme, but as a means of transferring the payments made by way of contribution by the worker and his employer directly to the existing beneficiaries.

It is all very well for the Chancellor of the Duchy of Lancaster to say that the scheme for which he, with his right hon. Friend the Minister of Pensions and National Insurance, has been responsible since the inception of this Government is a swindle. The fact is that the swindle, if it be a swindle, consists in transferring from a contributor to the beneficiary without keeping for the benefit of the contributor anything at all. This is what successive Governments have been doing.

The Minister of Housing and Local Government, when he was in opposition, with his felicitous gift of phrase, referred to it as—[An Hon. Member: "A swindle."] No—as "the old evil of the poll tax on the poor". The right hon. Gentleman went on to say this: You cannot possibly allow the National Insurance contribution, a flat-rate poll tax on the lower-paid worker, to be increased once again. It has been' increased once again. The right hon. Gentleman and his Government put up the contribution—the flat-rate poll tax—by an unprecedented amount to finance their social priorities when they got into office. This is one of the things we must examine a little more closely.

Then there is the cost of the scheme. I make no apology for mentioning the cost, because from paragraph 8 of the Report it will be seen that the whole of the scheme was based on the hypothesis that in 1965 the National Health Service, the insurance payments, the children's allowances and the welfare and rehabilitation services would cost no more than £860 million a year, or, in modern terms, £1,700 million. I reckon that the comparable cost at this moment of time is something not far from £3,500 million for all those services.

And it is not as if this was the only increase in public expenditure with which we have had to deal. Yesterday, we were discussing defence. We have a constant pressure to spend more money on the roads, on the schools and on the hospitals. Everybody knows that in isolation each of these items is well merited and well-deserving, but the total effect of it all, as the Chancellor of the Exchequer is constantly reminding us, is something which presents to any Government very considerable problems indeed.

It is, therefore, logical and right that we should re-examine now whether the finance of our scheme, viewed in its context, is being obtained in the best possible way. This brings me to what is to my mind the most poignant fact of all, to which reference has been made in the debate. The cost of the scheme, in its context of the total public expenditure, has become so great that every time the flat-rate pension is increased, as both we and hon. and right hon. Members opposite have increased it, the total increase has been so expensive that, in practice, it has been impossible to allow for the true casualties or the fully-employed society.

I am not trying on this point to make a party point, or to raise a sentimental one, but one cannot fail to see that certain identifiable groups of people in the fully-employed society are in the same position, through no fault of their own, as the under-employed in the inter-war society. My hon. Friend the Member for Abingdon (Mr. Neave) referred to the very old who could not come into contribution. It is a poor and insufficient answer to say, with the hon. Member for Fife, West (Mr. William Hamilton), that, of course, they did not contribute and so they cannot come in. There was originally a very powerful argument to that effect and it was in the Report, but when each successive ncrease—and this Government have made only the last of a series—consists simply of an uncovenanted benefit taken either from taxation or the increased contribution of the wage-earner and given only to existing recipients, there cannot be any logic or justice in withholding this increase from those who did not contribute at all.

The second class to which I draw the Minister's attention is that of the chronic sick. In that category I include not only those who are suffering from disease, but all those who are suffering from any kind of permanent incapacity, whether from injury or a condition, congenital or supervening, which prevents their earning the full wages of a fully-employed society. It is no good the Liberal Party or right hon. and hon. Members opposite talking about a two-tier system of benefits. The fact is that certain identifiable minorities in the fully employed society are in the same position as though they spent part of their life unemployed. We say—and I have yet to hear an answer from the benches opposite—that something special must be done for them.

Third, there are the children of the low-paid wage-earner, in some cases the victims of the wage-stop, and in some cases the children of large families in low-paid employment. Again, it is no good talking about a means test. They are all identifiable classes which can be identified without a means test. They are in the unusual position in a fully employed society of requiring additional help, and the point is that the existing scheme does nothing for them.

Mr. Shinwell

Did the right hon. and learned Gentleman and his right hon. and hon. Friends do anything for them?

Mr. Hogg

The right hon. Gentleman is entitled to ask that question, and I shall answer it. During our 13 years of office, we put up the total proportion of the national income spent on these purposes from 5 to 7 per cent. We increased the benefit no fewer than five times. Obviously, social policy unrolls as time goes on. We had our system of priorities, which I believe was right, but, as each priority is fulfilled, it only renders more urgent the case of those who have been rightly or, if one likes, wrongly, omitted. This is what we want the Minister to do something about.

The Motion invites us to approve the Government's achievements. This I cannot do. Anyone reading the election promises of the right hon. Gentleman and his right hon. Friends would have been entitled to expect a minimum income guarantee. He would have been entitled to expect half pay on retirement. This is what people were told on the B.B.C.'s T.V. election forum on 23rd September, 1964: What we are going to do now—we are going to do it early because it is urgent, in the first weeks of a Labour Government—is to provide a guaranteed income below which no one will be allowed to fall. I am quoting from the Prime Minister's election broadcast. "One of the first jobs of the Labour Government" would be half pay on retirement. So it was said in "Signpost to the Sixties" and taken up in the election manifesto. Thirdly people would have been entitled to believe the present Chancellor of the Exchequer, the Chancellor of the Duchy and the Prime Minister when they said that all this would be done without increasing the contribution and without a general increase in taxation. Labour will not be a spendthrift Government", said the Chancellor of the Duchy, in his Sowerby election address: It will not need to increase the general level of taxation to pay for its programme. The Chancellor of the Exchequer said, according to a report in The Times on 15th October, 1964: The whole basis of our case is that increased social expenditure will be financed out of the growing expansion of British industry", and he added: We shall not cash cheques until the money is in the bank". He added that that was quite clear. So it was.

In fact, what the Government have done, and what we are being invited to endorse, is to abandon, within weeks of taking office, the minimum income guarantee to the Greek Kalends. They have abandoned half pay on retirement and they have paid for the scheme they have introduced out of the poll tax and a general increase of taxation.

In doing so, they have left the vulnerable classes in the affluent society which I have tried to describe wholly out in the cold; and this has been done under the rubric of national purpose and a due sense of social priorities. I cannot help remembering an article in The Guardian which the right hon. Gentleman the Minister of Housing and Local Government wrote about four years ago. He said: The truth is that in politics there come occasions when honourable men are bound to practise deception and to tell lies, and only hypocrites will impugn their personal integrity when things go wrong and they are caught red-handed. Mr. Speaker, the right hon. Gentleman has been caught red-handed.

Hon. Members

Hear, hear.

9.27 p.m.

The Minister of Housing and Local Government (Mr. Richard Crossman) rose

Hon. Members

Hear, hear.

Mr. Speaker

Order. If the House cannot give the right hon. Gentleman attention, I shall have to catch someone red-handed.

Mr. Crossman

No one can say that we have not had an entertaining debate and I had better start with the right hon. and learned Member for St. Marylebone (Mr. Hogg) because I was fascinated, as always, by his method of thinking and by the question of why we had to have 25 minutes of his memories of the Beveridge Report.

The right hon. and learned Gentleman's memories were a little odd. He seems to have forgotten that Beveridge recommended that short-term benefits should be paid at once and that long-term pensions should be paid for the first time in full in 1968 and that this principle was totally destroyed in 1948, with the full assent of both sides of the House, in recognising that the actuarial calculation was mistaken.

The right hon. and learned Gentleman puzzles me. Now, 20 years later, he says that we must start rethinking. What were the party opposite doing in 1959? Was not that a complete rethink? They sought then to introduce a completely new financial system to remedy all the defects which he was describing just now in a National Insurance structure they themselves thought up. For instance, there is the graduated pension scheme. All we have had tonight is a tremendous shout, an enormous noise, to cover up the fact that they are trying to think of some reason for giving up the scheme other than the fact that it has now been demonstrated to be a swindle.

My right hon. Friend the Chancellor of the Duchy of Lancaster gave the figures of money right hon. Gentlemen opposite collected and which we are still collecting because we have not had time to change the system. [HON. MEMBERS: "Oh."] Certainly. A Tory swindle does not cease to be a swindle because we have not had time to eliminate it. We just want to remind them that it is a swindle before we start eliminating it. We have the facts—£800 million collected in graduated contributions; £2 million paid out. This is the biggest collection ever made and the Economist was right to say that this so-called graduated pension scheme was nothing more than a device for shifting the burden of the weight from one group to another, to the group which could least afford to pay.

I will not say more about the speech of the right hon. and learned Gentleman. It was a good effort but we still remember what he was covering up. He was covering up that his new leader has decided to jettison what the Tories spent years on working out and pushing through and defending and describing as magnificent. They now agree with us that it was a swindle and they are now doing their best to get rid of it. It is very useful to have a debate to enable them to clear their minds—I think that the phrase was from the bottom of their stomachs—and feel better for it.

There were two remarkable speeches. One was from my hon. Friend the Member for Kingston upon Hull, North (Mr. McNamara) who made a very powerful maiden speech and, after the speech of the Leader of the Opposition, it was quite non-controversial in character. Another was the speech of the Leader of the Opposition himself.

The right hon. Gentleman made a speech worth answering. I thought it extremely interesting and I thought that the whole debate gained by the fact that the Leader of the Opposition made a serious, clearly argued case. I want if I can in the first three minutes, for those who had the misfortune not to hear him, to sum up what he said. I should like the right hon. Gentleman to listen very carefully and to interrupt me if I am wrong. He said two things. First, he said that we must go forward from Beveridge, as we have all said, and he told us the direction in which he wished us to go forward.

He said that there were two things which we had to do and which the public was asking of us. One was that we should reshape our social security so that those in need could get additional help. He said that these were a diminishing number but that in our affluent society there were islands of poverty, and he listed the same islands which he listed at Birmingham. He gave the impression at one point of believing that we had a middle-wage economy now and could therefore look not at the problem of poverty in the mass, which was largely solved, but at the problem of reorientating the whole of our social services in a period of affluence for those who have not kept pace with those standards.

Secondly, he said, we must therefore face the fact that when people got on in life and got more respectable, they did not want to have the State scheme, but wanted to have self-reliance, to be owner-occupiers and to be members of B.U.P.A.—the British United—[HON. MEMBERS: "He does not know."]—the organisation for opting out of the Health Service—that they wanted to have a series of private services in addition to the State service.

The right hon. Gentleman said that this was a welcome thing and that people should be encouraged to do this and that we should now look forward to a development in which the State service kept the basis and concentrated the extra money on special needs, while those within the movement to prosperity were concerned with private pensions, schemes for private education, private health—

Mr. Heath indicated dissent.

Mr. Crossman

Not private health—I am glad to know—[Interruption.]—nor education; we are learning. It is always nice to extract from the right hon. Gentleman something specific apart from these general encouragements of self-reliant activities. We now know that this does not apply to the National Health Service, which is to be a free, universal, comprehensive health service. Yes?

Mr. Heath indicated assent.

Mr. Crossman

Education? Are we to have a single comprehensive system of education with no private system outside? Is that what the right hon. Gentleman wants?

Mr. Heath indicated dissent.

Mr. Crossman

He wants a private system. He was a little chary of telling us in particular what the Tories want done in these cases. I like the way he avoided concrete reality.

Was the right hon. Gentleman right in painting a picture of society as one in which poverty is to be found in relatively small islands? We have 6½ million old-age pensioners, 2 million of whom are so miserably poor that they are on National Assistance. Half a million more could be if they went along and qualified for it. At the other end, I would reckon that there are roughly a million who are relatively well off. Then there are the 2½ million at the bottom in grinding poverty and in various degrees of poverty above.

To describe this as an affluent society, with a few islands of special cases seems extraordinary distortion. [Interruption.] The hon. Gentleman was not here to listen. I would say to the right hon. Gentleman—

Mr. Braine rose

Mr. Speaker

Order. I have heard the winding-up speech from one side. I want to hear the other one.

Mr. Crossman

I would say to the right hon. Gentleman that the idea that we can now eliminate mass poverty among the old-aged is a mistaken one. He based the whole of his argument, in his Birmingham speech, for switching from universalism to special need on the idea that only special need was required—that there was no generalised poverty to deal with. This was, I thought, a mistake. Let us take not only old people but wage-earners. The hon. Gentleman called this a middle-wage economy. He might say that if we had wages like the United States. It is worth remembering that 14 per cent. of male wage earners earn less than £13 a week gross. I find it difficult to regard them as members of the affluent society.

Of the 20 million tax payers, we have 4 million with a total income before tax of less than £10 a week and 14 million with a total income before tax of less than £20 a week. When we are looking at whether we can move away from the comprehensive principle to selective needs, we had better face the fact that the comprehensive principle is still needed if we are going to get decent living standards for ordinary people. This is the first possible basic point of disagreement between the right hon. Gentleman and myself.

Mr. Heath

I know that the right hon. Gentleman is trying to make an accurate representation of the situation. I did not at any time suggest—indeed I emphasised the reverse—that we are moving away from the comprehensive principle. What I said was that one needs to take particular action to deal with these groups of the population. These groups which he has quoted are exactly the ones which I mentioned, the low earners. Those were the people whom I said needed special attention.

Mr. Crossman

This is a serious discussion. I calculate that the right hon. Gentleman's special group, who want to be specially looked after and therefore must have some kind of special means test to get their special aid, means that roughly 7 million more people need to be added to those at present on National Assistance. It is a formidable thought that we are going to extend the principle of National Assistance and special discriminating selective aid, after a test of means, to another 7 million people. Those who have studied the problems of National Assistance will realise that if one extends it too widely the whole thing breaks down—the whole essence of it ends. As long as we have large numbers of people in need we ought to stand for the simple and comprehensive principle.

Therefore I make my second point of difference between the right hon. Gentleman and myself. We have laid down and are carrying out phase by phase the major switching we require from Beveridge, which is from flat-rate poverty and flat-rate contributions and flat-rate benefits—which were thought of in terms of mass unemployment and of turning back the poverty of the 1930s and saying that we must have equal suffering—to wage-related, all-in comprehensive security.

What we have put forward in national superannuation, what we are now carrying out step by step, is the transformation of a flat-rate Beveridge system into a wage-related system. But we are not in any way altering its comprehensive character or the fact that benefits should be of right and earned of right by contribution. The difference between the two sides of the House is whether one believes that this is possible.

Mr. Heath

This is extremely interesting as a development of a philosophy, but it does not help the particular cases we were talking about this afternoon. Wage-related benefits do not help low earners with below average earnings and above average families. They do not help the chronic sick. The Minister's right hon. Friend knows that.

Mr. Crossman

If the right hon. Gentleman says that wage-related benefits do not help the low wage earner, why does he propose to compel every low wage earner to join in employers' pension schemes which are nearly all wage related? Why is it that a wage-related employers' scheme which compels every worker to join it is all right and a wage-related State scheme is not?

Mr. Heath

Because, as I told the right hon. Gentleman, special additional action is required.

Mr. Crossman

Now we have it. We now have it laid down in principle by the right hon. Gentleman. There is to be a basic benefit and everybody is to be forced to go into an employer's scheme, and, in addition to what he gets from the employer, he will get something from the right hon. Gentleman. That is not what he said. Apparently, that is what he meant, but he did not say it.

I come to the right hon. Gentleman's remarks about housing. He became very severe about housing and said, "This is the great example of the affluent society. This is the age of owner-occupation". I agree that many people want to be owner-occupiers. The right hon. Gentleman rightly made a number of proposals about improving the position of the owner-occupier, which I shall deal with, but which I find difficult to talk about this evening.

Then the right hon. Gentleman said that basically we want to shift the emphasis and have a drive on owner-occupation and not on houses for rent. I am staggered that Tories can never learn anything. What is the one lesson of the last 13 years? It is that the neglect of houses to rent, the deliberate destruction for years of council schemes, and the abolition of subsidies for some years, produced the situation reported in the Milner Holland Report. It produced a desperate situation in our conurbations. We have the simple Tory view. They say, "We are so affluent that everybody who matters can afford to buy a house". But, as a matter of fact, 40 per cent.—[Interruption.] All right. In that case, why did not right hon. and hon. Members opposite increase the urgency of council building where the social need was infinitely greater, which is in our slums, and provide subsidies for the councils which would enable them to build?

Mr. Heath

We did.

Mr. Crossman

The right hon. Gentleman says that they did. They provided a maximum £24 subsidy per house and then let building costs rise by 50 per cent. and the subsidy remained the same. We have produced a subsidy of £67 a house and have guaranteed the councils that they will get their money at 4 per cent. rate of interest. We have done it. We start the Committee stage of the Bill next Tuesday. This is the difference between the two parties. We realise the social need of council houses.

Here I come to the speech of my hon. Friend the Member for Kingston upon Hull, North. He made a very good speech, but he got an even better vote at Hull. Why? Because practically everybody in Hull thinks that the Leader of the Opposition is wrong. All those in Hull, because they know the poverty, think that council houses are more important than houses to buy. They know that poverty has not been abolished and that there is years of work ahead before the task is completed. The job has to be done and they thank God for a Labour Government who know that the job has to be done.

When I heard the right hon. Gentleman telling me once again that we must put the emphasis on owner occupation as against houses to rent, I could not help remembering his right hon. Friend the Member for Wolverhampton, Southwest (Mr. Powell) in 1957 proclaiming the Rent Act with the announcement that housing was now in balance. Presumably, it has been thought to be in balance ever since. It took a Labour Government to discover that we needed council houses to remove the scandal of Liverpool, Birmingham and Manchester.

There is, however, something for which I thank the right hon. Gentleman. I am grateful that he has supported me in saying that we should give discriminating subsidies to the cities which are hardest hit by slums. That was an excellent idea. I hope that when we come to the Committee stage upstairs of the Housing Subsidies Bill, hon. Members opposite will facilitate its passage with speed. They voted against it on Second Reading. We will see what change occurs in Committee since the right hon. Gentleman—I give him credit for it-knows that the position in Birmingham, Liverpool and the great conurbations is infinitely worse because of the high cost of building and because those unfortunate councils were urged by the Tories to start vast building programmes without an adequate subsidy structure.

I therefore agree with the right hon. Gentleman. We will let those councils have the new subsidy on every house completed—not on every house approved—thereby giving them 18 months of subsidy on houses started under the Tories with a bad subsidy arrangement. This first-rate idea will be a little recompense for all the damage that the Tories did.

Sir John Rodgers (Sevenoaks)

Would the right hon. Gentleman like to say whether he lives in a rent-subsidised house?

Mr. Crossman

I think that the hon. Member knows the answer to that. Why on earth should I live there? I do not live in a subsidised house.

I turn now to health and prescription charges. I will deal with this briefly, because the issue is clear. One can simply say that priorities are different. Here again, we estimate the British people differently. We are told by the Opposition that nobody has any feeling about prescription charges and that they were a mere nothing. The Tories would remit them only for those whose need was proved. [Interruption.] The right hon. Gentleman tells us that he would bring the charges back but that rather more people would be exempted. Is not that what the party opposite say? Are they not committed to bringing the charges back?

Mr. Heath

The Minister heard perfectly well what I said this afternoon, which was that the people would prefer to have more money spent on hospitals and to pay prescription charges with specific categories exempt.

Mr. Crossman

We now have it that the party opposite will bring back the prescription charges but will exempt certain categories. That is a clear answer. They are wrong to do this. We were right to do what we did, because I still believe the principle to be right that the existence of a Health Service means that people pay for the Service when they are healthy but that when they are sick is the one time when they cannot afford to pay.

The main issue which was talked about is that of pensions. Here, there is a genuine difference of opinion about a fairly technical subject. Apparently, the view is now held by the Opposition, after the disaster of their graduated pension scheme, that they must now abandon all State graduated schemes and put their trust in occupational pension schemes. Well, we have a very clear decision. I was rather puzzled when the right hon. Gentleman told me that we in the Labour Party had no policy. I will repeat to him what it is. We did it in three stages. First of all, we did the relief operation of raising very high indeed the flat rate of the existing pensioner, and we did it, frankly, because we do have a principle, which is, that even when this country is in difficulties we do not forget our promises to the needy. [HON. MEMBERS: "Oh."] Well, I must say, I am interested in that reaction. I can only believe that the Conservative Party has consistently used—[Interruption.]

Mr. Speaker

Order. I must call the attention of the House to the fact that if it is not prepared to hear opinions which it does not like people will think it is afraid to hear opinions.

Mr. Crossman

We gave the biggest increase ever given since 1946 because we believed, and rightly, that the old people of this country had had a very raw deal and needed to get something back. If I hear a "boo" and an "oh" I am staggered. That is the party which claims it has studied these things, that it has gone round the country getting contact with reality—and it has not seen what really happens to the sick, the old. Nothing will persuade me that we were not right to do it at the beginning.

The second phase was to begin to introduce the switch from the flat rate to the graduated pension. We have done this to start with, as is known, in the case of sickness and unemployment benefit. That is the first phase of the switchover. It is being done in two parts. Beveridge recommended his scheme to be done in two parts. We are doing this one in two parts. We shall complete it by introducing the graduated pension. So that we have all-in social security with one single contribution for the whole range of benefits—out of a single contribution, but graduated. That will be parallel, as we made clear, with occupational pension schemes, in partnership with the State.

Where we differ from the Opposition is on a very important practical issue. We believe in partnership between the State and private pensions schemes. We believe it can be worked. The same difficulty was shown with the graduated pension and we got the rules for contracting out. I am quite sure it can be overcome, and that we can work a partnership between the State scheme and private graduated schemes.

The timetable of that is fairly clear. We hope to have a White Paper in 1967; in the 1967–68 Session we probably will get that Bill; and we shall hope to have it operating in April, 1969. If anybody thinks a major change of this sort could take less time, I will put this question to the right hon. Gentleman: how many years does he think he will take to compel all the employers in this country to introduce occupational pension schemes? There are, so far, 60,000 completely separate and independent occupational pension schemes, all of which would have to be brought under Government control. These cover only a proportion of the workers.

If all the workers are to be included, if every single worker in a shop is to be included, if every business with only one employee, if every building labourer, is to be brought in, we should have hundreds of thousands of independent pension schemes, all of which have got to be organised and operated and controlled by the State. Really, for an Opposition which claims to be run by business men, and really for an Opposition which, as we learn, has 36 of its members intimately concerned with the insurance industry—[HON. MEMBERS: "Ah."]—for an Opposition with as much knowledge as that to put forward a scheme which no one who runs an occupational pension scheme could possibly recommend with a good conscience! No person concerned with occupational pension schemes would like to see a State pension scheme confined to the basic minimum.

I will tell the right hon. Gentleman why. Because there are three tests of a good pension scheme. The first is whether the pension scheme can be guaranteed to preserve the value of the pension during rising prices—to be what we call dynamic. No private scheme can be dynamic in that sense. The Government can preserve the value, and so can a good employer. If his scheme breaks down he puts his hand into his pocket and says, "I cannot leave my workers in this condition. I will pay out of my own pocket the sum required to make the pension up to its real value."

There are very few funded schemes in this country. Most occupational pension schemes are not funded.

Sir K. Joseph


Mr. Crossman

I said that they were not funded. That means that they are not fully covered by savings. A tiny percentage are, but most rely on extra contributions to keep up with the cost of living.

The second reason why occupational pension schemes can never be an alternative to a State scheme is the problem of transferability of pension rights. A worker covered by a State pension scheme has fully transferable rights within that scheme. It is possible, even if it is difficult, to arrange for transfer outside. But between 100,000 private schemes, some of them run by people who go bankrupt, it is almost impossible.

The Ministry of Labour has had an expert committee studying the question, and its report will be appearing in a few weeks' time. It is not as optimistic as the right hon. Gentleman. As far as I can gather, the pensions of 10 per cent. of all the people in private occupational pension schemes lapse each year, and under 10 per cent. of those who change their jobs today succeed in transferring their pension rights. What is the good of saying that there is no difficulty that these schemes can run into? If we rely totally on occupational pension schemes there is no possibility of adequate transferability, no possibility of guaranteeing that the value of the pension rises either with the cost of living or with wages, and no possibility of providing 100 per cent. cover.

How can we cover the casual labourer? How can we cover the thousands of individuals? There will not be anything approaching a full coverage.

Sir. K. Joseph


Mr. Crossman

The right hon. Gentleman says, "Nonsense". He had better look into this question carefully, as some of us have.

Sir K. Joseph

In the building industry, under the long-established holidays-with-pay scheme, a labourer can work for 50 weeks for 50 different employers, and at the end of the 50th week he can get two weeks' paid holiday. That same system can be used for occupational pensions.

Mr. Crossman

Here we have the difference between the parties. What we have here is an attempt on the part of the party opposite to escape from the responsibility for maintaining comprehensive

social security. Here is a party trying to find an excuse for ratting on that obligation and imposing on the individual the cost. That is why we ask for a vote of confidence in the Government tonight.

The Parliamentary Secretary to the Treasury (Mr. Edward Short) rose in his place and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question put accordingly, That the words proposed to be left out stand part of the Question:—

The House divided: Ayes 302, Noes 280.

Division No. 32.] AYES [10.0 p.m.
Abse, Leo Davies, S. O. (Merthyr) Heffer, Eric S.
Albu, Austen de Freitas, Sir Geoffrey Herbison, Rt. Hn. Margaret
Allaun, Frank (Salford, E.) Delargy, Hugh Hobden, Dennis (Brighton, K'town)
Alldritt, Walter Dempsey, James Holman, Percy
Allen, Scholefield (Crewe) Diamond, Rt. Hn. John Hooson, H. E.
Armstrong, Ernest Doig, Peter Horner, John
Atkinson, Norman Donnelly, Desmond Houghton, Rt. Hn. Douglas
Bacon, Rt. Hn. Alice Driberg, Tom Howarth, Harry (Wellingborough)
Bagier, Gordon A. T. Duffy, Dr. A. E. P. Howarth, Robert L. (Bolton, E.)
Barnett, Joel Dunn, James A. Howell, Denis (Small Heath)
Baxter, William Dunnett, Jack Howie, W.
Beaney, Alan Edelman, Maurice Hoy, James
Bellenger, Rt. Hn. F. J. Edwards, Rt. Hn. Ness (Caerphilly) Hughes, Cledwyn (Anglesey)
Bence, Cyril Edwards, Robert (Bilston) Hughes, Hector (Aberdeen, N.)
Benn, Rt. Hn. Anthony Wedgwood English, Michael Hunter, Adam (Dunfermline)
Bennett, J. (Glasgow, Bridgeton) Ennals, David Hunter, A. E. (Feltham)
Bessell, Peter Ensor, David Hynd, H. (Accrington)
Binns, John Evans, Albert (Islington, S. W.) Hynd, John (Attercliffe)
Bishop, E. S. Evans, Ioan (Birmingham, Yardley) Jackson, Colin
Blackburn, F. Fernyhough, E. Janner, Sir Barnett
Blenkinsop, Arthur Finch, Harold (Bedwellty) Jeger, George (Goole)
Boardman, H. Fitch, Alan (Wigan) Jenkins, Hugh (Putney)
Boston, Terence Fletcher, Sir Eric (Islington, E.) Jenkins, Rt. Hn. Roy (Stechford)
Bottomley, Rt. Hn. Arthur Fletcher, Ted (Darlington) Johnson, Carol (Lewisham, S.)
Bowden, Rt. Hn. H. W. (Leics S. W.) Fletcher, Raymond (Ilkeston) Johnson, James (K'ston-on-Hull, W.)
Boyden, James Floud, Bernard Johnston, Russell (Inverness)
Braddock, Mrs. E. M. Foley, Maurice Jones, Dan (Burnley)
Bradley, Tom Foot, Sir Dingle (Ipswich) Jones, Rt. Hn. Sir Elwyh (W. Ham, S.)
Bray, Dr. Jeremy Foot, Michael (Ebbw Vale) Jones, J. Idwal (Wrexham)
Broughton, Dr. A. D. D. Ford, Ben Jones, T. W. (Merioneth)
Brown, Rt. Hn. George (Belper) Fraser, Rt. Hn. Tom (Hamilton) Kelley, Richard
Brown, Hugh D. (Glasgow, Provan) Freeson, Reginald Kenyon, Clifford
Brown, R. W. (Shoreditch & Fbury) Galpern, Sir Myer Kerr, Dr. David (W'worth, Central)
Buchan, Norman (Renfrewshire, W.) Garrett, W. E. Leadbitter, Ted
Buchanan, Richard Garrow, Alex Ledger, Ron
Butler, Herbert (Hackney, C.) Ginsburg, David Lee, Rt. Hn. Frederick (Newton)
Butler, Mrs. Joyce (Wood Green) Gourlay, Harry Lee, Miss Jennie (Cannock)
Callaghan, Rt. Hn. James Greenwood, Rt. Hn. Anthony Lever, Harold (Cheetham)
Carmichael, Neil Gregory, Arnold Lever, L. M. (Ardwick)
Carter-Jones, Lewis Grey, Charles Lewis, Ron (Carlisle)
Castle, Rt. Hn. Barbara Griffiths, David (Rother Valley) Lipton, Marcus
Chapman, Donald Griffiths, Rt. Hn. James (Llanelly) Lomas, Kenneth
Coleman, Donald Griffiths, Will (M'chester, Exchange) Loughlin, Charles
Conlan, Bernard Grimond, Rt. Hn. J. Lubbock, Eric
Corbet, Mrs. Freda Gunter, Rt. Hn. R. J. Mabon, Dr. J. Dickson
Craddock, George (Bradford, S.) Hale, Leslie McBride, Neil
Crawshaw, Richard Hamilton, James (Bothwell) McCann, J.
Cronin, John Hamilton, William (West Fife) MacColl, James
Crosland, Rt. Hn. Anthony Hamling, William (Woolwich, W.) MacDermot, Niall
Crossman, Rt. Hn. R. H. S. Hannan, William McGuire, Michael
Cullen, Mrs. Alice Harper, Joseph McInnes, James
Dalyell, Tam Harrison, Walter (Wakefield) McKay, Mrs. Margaret
Darling, George Hart, Mrs. Judith Mackenzie, Alasdair (Ross&Crom'ty)
Davies, G. Elfed (Rhondda, E.) Hattersley, Roy Mackenzie, Gregor (Rutherglen)
Davies, Harold (Leek) Hazell, Bert Mackie, George Y. (C'ness & S'land)
Davies, Ifor (Gower) Healey, Rt. Hn. Denis Mackie, John (Enfielcl, E.)
McLeavy, Frank Parker, John Stonehouse, John
MacMillan, Malcolm Pavitt, Laurence Stones, William
McNamara, Kevin Pearson, Arthur (Pontypridd) Strauss, Rt. Hn. G. R. (Vauxhall)
Mahon, Peter (Preston, S.) Peart, Rt. Hn. Fred Stross, Sir Barnett (Stoke-on-Trent, C.)
Mahon, Simon (Bootle) Pentland, Norman Summerskill, Hn. Dr. Shirley
Mallalieu, E. L. (Brigg) Perry, Ernest G. Swain, Thomas
Mallalieu, J. P. W. (Huddersfield, E.) Popplewell, Ernest Swingler, Stephen
Manuel, Archie Prentice, R. E. Symonds, J. B.
Mapp, Charles Price, J. T. (Westhoughton) Taverne, Dick
Marsh, Richard Probert, Arthur Taylor, Bernard (Mansfield)
Mason, Roy Pursey, Cmdr. Harry Thomas, George (Cardiff, W.)
Maxwell, Robert Randall, Harry Thomas, Iorwerth (Rhondda, W.)
Mayhew, Christopher Rankin, John Thomson, George (Dundee, E.)
Mellish, Robert Redhead, Edward Thornton, Ernest
Mendelson J. J. Rees, Merlyn Thorpe, Jeremy
Mikardo, Ian Reynolds, G. W. Tomney, Frank
Millan, Bruce Rhodes, Geoffrey Tuck, Raphael
Miller, Dr. M. S. Richard, Ivor Urwin, T. W.
Milne, Edward (Blyth) Roberts, Albert (Normanton) Varley, Eric G.
Molloy, William Roberts, Goronwy (Caernarvon) Wainwright, Edwin
Monslow, Walter Robertson, John (Paisley) Walden, Brian (All Saints)
Morris, Alfred (Wythenshawe) Robinson, Rt. Hn. K. (St. Pancras, N.) Wallace, George
Morris, Charles (Openshaw) Rodgers, William (Stockton) Warbey, William
Morris, John (Aberavon) Rogers, George (Kensington, N.) Watkins, Tudor
Mulley, Rt. Hn. Frederick (Sheffield Pk) Rose, Paul B. Weitzman, David
Murray, Albert Ross, Rt, Hn. William Wellbeloved, James
Neal, Harold Rowland, Christopher Wells, William (Walsall, N.)
Newens, Stan Sheldon, Robert White, Mrs. Eirene
Noel-Baker, Francis (Swindon) Shinwell, Rt. Hn. E. Whitlock, William
Noel-Baker, Rt. Hn. Philip (Derby, S.) Shore, Peter (Stepney) Wigg, Rt. Hn. George
Norwood, Christopher Short, Rt. Hn. E. (N'c'tle-on-Tyne, C.) Wilkins, W. A.
Oakes, Gordon Short, Mrs. Renée (W'hampton. N. E.) Willey, Rt. Hn. Frederick
Ogden, Eric Silkin, John (Deptford) Williams, Alan (Swansea, W.)
O'Malley, Brian Silkin, S. C. (Camberwell, Dulwich) Williams, Mrs. Shirley (Hitchin)
Oram, Albert E. (E. Ham, S.) Silverman, Julius (Aston) Williams, W. T. (Warrington)
Orbach, Maurice Silverman, Sydney (Nelson) Willis, George (Edinburgh, E.)
Orme, Stanley Skeffington, Arthur Wilson, William (Coventry, S.)
Oswald, Thomas Slater, Mrs. Harriet (Stoke, N.) Woodburn, Rt. Hn. A.
Owen, Will Slater, Joseph (Sedgefield) Woof, Robert
Padley, Walter Small, William Wyatt, Woodrow
Page, Derek (King's Lynn) Snow, Julian Yates, Victor (Ladywood)
Paget, R. T. Soskice, Rt. Hn. Sir Frank Zilliacus, K.
Palmer, Arthur Spriggs, Leslie
Pannell, Rt. Hn. Charles Steel, David (Roxburgh) TELLERS FOR THE AYES:
Pargiter, G. A. Steele, Thomas (Dunbartonshire, W.) Mr. Sydney Irving and
Park, Trevor (Derbyshire, S. E.) Stewart, Rt. Hn. Michael Mr. George Lawson.
Agnew, Commander Sir Peter Buck, Antony Doughty, Charles
Allan, Robert (Paddington, S.) Bullus, Sir Eric Douglas-Home, Rt. Hn. Sir Alec
Ailason, James (Hemel Hempstead) Burden, F. A. Drayson, G. B.
Amery, Rt. Hn. Julian Campbell, Cordon du Cann, Rt. Hn. Edward
Anstruther-Gray, Rt. Hn. Sir W. Carlisle, Mark Eden, Sir John
Astor, John Carr, Rt. Hn. Robert Elliot, Capt. Walter (Carshalton)
Atkins, Humphrey Cary, Sir Robert Elliott, R. W. (N'c'tle-upon-Tyne, N.)
Awdry, Daniel Channon, H. P. G. Emery, Peter
Balniel, Lord Chataway, Christopher Errington, Sir Eric
Barber, Rt. Hn. Anthony Chichester-Clark, R. Eyre, Reginald
Barlow, Sir John Clark, Henry (Antrim, N.) Farr, John
Batsford, Brian Clark, William (Nottingham, S.) Fisher, Nigel
Beamish, Col. Sir Tufton Clarke, Brig. Terence (Portsmth. W.) Fletcher-Cooke, Charles (Darwen)
Bell, Ronald Cole, Norman Fletcher-Cooke, Sir John (S'pton)
Bennett, Sir Frederic (Torquay) Cooke, Robert Foster, Sir John
Bennett, Dr. Reginald (Glos. & Fhm) Cooper, A. E. Fraser, Rt. Hn. Hugh (St'fford & Stone)
Berkeley, Humphry Cordle, John Fraser, Ian (Plymouth, Sutton)
Berry, Hn. Anthony Corfield, F. V. Gammans, Lady
Biffen, John Costain, A. P. Gardner, Edward
Biggs-Davison, John Courtney, Cdr. Anthony Gibson-Watt, David
Birch, Rt. Hn, Nigel Craddock, Sir Beresford (Speithorne) Giles, Rear-Admiral Morgan
Black, Sir Cyril Crawley, Aidan Gilmour, Ian (Norfolk, Central)
Blaker, Peter Crosthwaite-Eyre, Col. Sir Oliver Gilmour, Sir John (East Fife)
Bossom, Sir Clive Crowder, F. P. Glover, Sir Douglas
Box, Donald Cunningham, Sir Knox Glyn, Sir Richard
Boyd-Carpenter, Rt. Hn. J. Curran, Charles Godber, Rt. Hn. J. B.
Boyle, Rt. Hn. Sir Edward Currie, G. B. H. Goodhart, Philip
Braine, Bernard Dalkeith, Earl of Goodhew, Victor
Brinton, Sir Tatton Dance, James Gower, Raymond
Bromley-Davenport, Lt.-Col. Sir Walter Davies, Dr. Wyndham (Perry Barr) Grant, Anthony
Brooke, Rt. Hn. Henry d'Avigdor-Goldsmid, Sir Henry Grant-Ferris, R.
Brown, Sir Edward (Bath) Dean, Paul Gresham Cooke, R.
Bruce-Gardyne, J. Deedes, Rt. Hn. W. F. Grieve, Percy
Bryan, Paul Digby, Simon Wingfield Griffiths, Eldon (Bury St. Edmunds)
Buchanan-Smith, Alick Dodds-Parker, Douglas Griffiths, Peter (Smethwick)
Gurden, Harold McAdden, Sir Stephen Royle, Anthony
Hall, John (Wycombe) MacArthur, Ian Russell, Sir Ronald
Hall-Davis, A. G. F. Maclean, Sir Fitzroy St. John-Stevas, Norman
Hamilton, Marquess of (Fermanagh) McMaster, Stanley Sandys, Rt. Hn. D.
Hamilton, M. (Salisbury) NcNair-Wilson, Patrick Scott-Hopkins, James
Harris, Frederic (Croydon, N. W.) Maddan, Martin Sharpies, Richard
Harris, Reader (Heston) Maginnis, John E. Shepherd, William
Harrison, Brian (Maldon) Maitland, Sir John Sinclair, Sir George
Harrison, Col. Sir Harwood (Eye) Marples, Rt. Hn. Ernest Smith, Dudley (Br'ntf'd & Chiswick)
Harvey, Sir Arthur Vere (Macclesf'd) Marten, Neil Smith, John
Harvey, John (Walthamstow, E.) Mathew, Robert Smyth, Rt. Hn. Brig. Sir John
Harvie Anderson, Miss Maude, Angus Soames, Rt. Hn. Christopher
Hastings, Stephen Mawby, Ray Spearman, Sir Alexander
Hawkins, Paul Maxwell-Hyslop, R. J. Stainton, Keith
Hay, John Maydon, Lt.-Cmdr. S. L. C. Stanley, Hn. Richard
Heald, Rt. Hn. Sir Lionel Meyer, Sir Anthony Stodart, Anthony
Heath, Rt. Hn. Edward Mills, Peter (Torrington) Stoddart-Scott, Col. Sir Malcolm
Hendry, Forbes Mills, Stratton (Belfast, N.) Studholme, Sir Henry
Higgins, Terence L. Miscampbell, Norman Summers, Sir Spencer
Hiley, Joseph Mitchell, David Talbot, John E.
Hill, J. E. B. (S. Norfolk) Monro, Hector Taylor, Sir Charles (Eastbourne)
Hirst, Geoffrey More, Jasper Taylor, Edward M. (G'gow, Cathcart)
Hobson, Rt. Hn. Sir John Morrison, Charles (Devizes) Taylor, Frank (Moss Side)
Hogg, Rt. Hn. Quintin Mott-Radclyffe, Sir Charles Teeling, Sir William
Hopkins, Alan Munro-Lucas-Tooth, Sir Hugh Temple, John M.
Hordern, Peter Murton, Oscar Thatcher, Mrs. Margaret
Hornby, Richard Neave, Airey Thomas, Sir Leslie (Canterbury)
Howe, Geoffrey (Bebington) Nicholls, Sir Harmar Thomas, Rt. Hn. Peter (Conway)
Hunt, John (Bromley) Nicholson, Sir Godfrey Thompson, Sir Richard (Croydon, S.)
Hutchison, Michael Clark Noble, Rt. Hn. Michael Thorneycroft, Rt. Hn. Peter
Iremonger, T. L, Nugent, Rt. Hn. Sir Richard Tiley, Arthur (Bradford, W.)
Irvine, Bryant Godman (Rye) Onslow, Cranley Tweedsmuir, Lady
Jenkin, Patrick (Woodford) Orr, Capt. L. P. S. van Straubenzee, W. R.
Jennings, J. C. Orr-Ewing, Sir Ian Vaughan-Morgan, Rt. Hn. Sir John
Johnson Smith, G. (East Grinstead) Osborn, John (Hallam) Vickers, Dame Joan
Jones, Arthur (Northants, S.) Osborne, Sir Cyril (Louth) Walder, David (High Peak)
Jopling, Michael Page, John (Harrow, W.) Walker, Peter (Worcester)
Joseph, Rt. Hn. Sir Keith Page, R. Graham (Crosby) Walker-Smith, Rt. Hn. Sir Derek
Kerby, Capt. Henry Pearson, Sir Frank (Clitheroe) Wall, Patrick
Kerr, Sir Hamilton (Cambridge) Peel, John Walters, Dennis
Kershaw, Anthony Percival, Ian Ward, Dame Irene
Kilfedder, James A. Peyton, John Weatherill, Bernard
Kimball, Marcus Pickthorn, Rt. Hn. Sir Kenneth Webster, David
King, Evelyn (Dorset, S.) Pike, Miss Mervyn Wells, John (Maidstone)
Kirk, Peter Pounder, Rafton Whitelaw, William
Kitson, Timothy Powell, Rt. Hn. J. Enoch Williams, Sir Rolf Dudley (Exeter)
Lagden, Godfrey Price, David (Eastleigh) Wilson, Geoffrey (Truro)
Lambton, Viscount Prior, J. M. L. Wise, A. R.
Lancaster, Col. C. G. Quennell, Miss J. M. Wolrige-Gordon, Patrick
Langford-Holt, Sir John Ramsden, Rt. Hn. James Wood, Rt. Hn. Richard
Legge-Bourke, Sir Harry Rawlinson, Rt. Hn. Sir Peter Woodhouse, Hn. Christopher
Lewis, Kenneth (Rutland) Redmayne, Rt. Hn. Sir Martin Woodnutt, Mark
Litchfield, Capt. John Rees-Davies, W. R. Wylie, N. R.
Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfield) Renton, Rt. Hn. Sir David Yates, William (The Wrekin)
Lloyd, Ian (P'tsm'th, Langstone) Ridley, Hn. Nicholas Younger, Hn. George
Lloyd, Rt. Hn. Selwyn (Wirral) Ridsdale, Julian
Longbottom, Charles Roberts, Sir Peter (Heeley) TELLERS FOR THE NOES:
Longden, Gilbert Robson Brown, Sir William Mr. Martin McLaren and
Loveys, W. H. Rodgers, Sir John (Sevenoaks) Mr. Francis Pym.
Lucas, Sir Jocelyn Roots, William

Main Question put:—

The House divided: Ayes 302, Noes 280.

Division No. 33.] AYES [10.14 p.m.
Abse, Leo Binns, John Buchanan, Richard
Albu, Austen Bishop, E. S. Butler, Herbert (Hackney, C.)
Allaun, Frank (Salford, E.) Blackburn, F. Butler, Mrs. Joyce (Wood Green)
Alldritt, Walter Blenkinsop, Arthur Callaghan, Rt. Hn. James
Alien, Scholefield (Crewe) Boardman, H. Carmichael, Neil
Armstrong, Ernest Boston, Terence Carter-Jones, Lewis
Atkinson, Norman Bottomley, Rt. Hn. Arthur Castle, Rt. Hn. Barbara
Bacon, Rt. Hn. Alice Bowden, Rt. Hn. H. W. (Leics S. W.) Chapman, Donald
Bagier, Gordon A. T. Boyden, James Coleman, Donald
Barnett, Joel Braddock, Mrs. E. M. Conlan, Bernard
Baxter, William Bradley, Tom Corbet, Mrs. Freda
Beaney, Alan Bray, Dr. Jeremy Craddock, George (Bradford, S.)
Bellenger, Rt. Hn. F. J. Broughton, Dr. A. D. D. Crawshaw, Richard
Bence, Cyril Brown, Rt. Hn. George (Belper) Cronin, John
Benn, Rt. Hn. Anthony Wedgwood Brown, Hugh D. (Glasgow, Provan) Crosland, Rt. Hn. Anthony
Bennett, J. (Glasgow, Bridgeton) Brown, R. W. (Shoreditch & Fbury) Crossman, Rt. Hn. R. H. S.
Bessell, Peter Buchan, Norman (Renfrewshire, W.) Cullen, Mrs. Alice
Dalyell, Tam Johnson, James (K'ston-on-Hull, W.) Prentice, R. E
Darling, George Johnston, Russell (Inverness) Price, J. T. (Westhoughton)
Davies, G. Elfed (Rhondda, E.) Jones, Dan (Burnley) Probert, Arthur
Davies, Harold (Leek) Jones, Rt. Hn. Sir Elwyn (W. Ham, S) Pursey, Cmdr. Harry
Davies, Ifor (Gower) Jones, J. Idwal (Wrexham) Randall, Harry
Davies S. O. (Merthyr) Jones, T. W. (Merioneth) Rankin, John
de Freitas, Sir Geoffrey Kelley, Richard Redhead, Edward
Delargy, Hugh Kenyon, Clifford Rees, Merlyn
Dempsey, James Kerr, Dr. David (W'worth, Central) Reynolds, G. W.
Diamond, Rt. Hn. John Leadbitter, Ted Rhodes, Geoffrey
Doig, Peter Ledger, Ron. Richard, Ivor
Donnelly, Desmond Lee, Rt. Hn. Frederick (Newton) Roberts, Albert (Normanton)
Driberg, Tom Lee, Miss Jennie (Cannock) Roberts, Goronwy (Caernarvon)
Duffy, Dr. A. E. P. Lever, Harold (Cheetham) Robertson, John (Paisley)
Dunn, James A. Lever, L. M. (Ardwick) Robinson, Rt. Hn. K. (St. Pancras, N.)
Dunnett, Jack Lewis, Ron. (Carlisle) Rodgers, William (Stockton)
Edelman, Maurice Lipton, Marcus Rogers, George (Kensington, N.)
Edwards, Rt. Hn. Ness (Caerphilly) Lomas, Kenneth Rose, Paul B.
Edwards, Robert (Bilston) Loughlin, Charles Ross, Rt. Hn. William
English, Michael Lubbock, Eric Rowland, Christopher
Ennals, David Mabon, Dr. J. Dickson Sheldon, Robert
Ensor, David McBride, Neil Shinwell, Rt. Hn. E.
Evans, Albert (Islington, S. W.) McCann, J. Shore, Peter (Stepney)
Evans, Ioan (Birmingham, Yardley) MacColl, James Short, Rt. Hn. E. (N'c'tle-on-Tyne, C.)
Fernyhough, E. MacDermot, Niall Short, Mrs. Renée (W'hampton, N. E.)
Finch, Harold (Bedwellty) McGuire, Michael Silkin, John (Deptford)
Fitch, Alan (Wigan) McInnes, James Silkin, S. C. (Camberwell, Dulwich)
Fletcher, Sir Eric (Islington, E.) McKay, Mrs. Margaret Silverman, Julius (Aston)
Fletcher, Ted (Darlington) Mackenzie, Alasdair (Ross & Crom'ty) Silverman, Sydney (Nelson)
Fletcher, Raymond (Ilkeston) Mackenzie, Gregor (Rutherglen) Skeffington, Arthur
Floud, Bernard Mackie, George Y. (C'ness & S'land) Slater, Mrs. Harriet (Stoke, N.)
Foley, Maurice Mackie, John (Enfield, E.) Slater, Joseph (Sedgefield)
Foot, Sir Dingle (Ipswich) McLeavy, Frank Small, William
Foot, Michael (Ebbw Vale) MacMillan, Malcolm Snow, Julian
Ford, Ben McNamara, Kevin Soskice, Rt. Hn. Sir Frank
Fraser, Rt. Hn. Tom (Hamilton) Mahon, Peter (Preston, S.) Spriggs, Leslie
Freeson, Reginald Mahon, Simon (Bootle) Steel, David (Roxburgh)
Galpern, Sir Myer Mallalieu, E. L. (Brigg) Steele, Thomas (Dunbartonshire, W.)
Garrett, W. E. Mallalieu, J. P. W. (Huddersfield, E.) Stewart, Rt. Hn. Michael
Garrow, Alex Manuel, Archie Stonehouse, John
Ginsburg, David Mapp, Charles Stones, William
Gourlay, Harry Marsh, Richard Strauss, Rt. Hn. G. R. (Vauxhall)
Greenwood, Rt. Hn. Anthony Mason, Roy Stross, Sir Barnett (Stoke-on-Trent, C.)
Gregory, Arnold Maxwell, Robert Summerskill, Hn. Dr. Shirley
Grey, Charles Mayhew, Christopher Swain, Thomas
Griffiths, David (Rother Valley) Mellish, Robert Swingler, Stephen
Griffiths, Rt, Hn. James (Llanelly) Mendelson, J. J. Symonds, J. B.
Griffiths, Will (M'chester, Exchange) Mikardo, Ian Taverns, Dick
Grimond, Rt. Hn. J. Millan, Bruce Taylor, Bernard (Mansfield)
Gunter, Rt. Hn. R. J. Miller, Dr. M. S. Thomas, George (Cardiff, W.)
Hale, Leslie Milne, Edward (Blyth) Thomas, Iorwerth (Rhondda, W.)
Hamilton, James (Bothwell) Molloy, William Thomson, George (Dundee, E.)
Hamilton, William (West Fife) Monslow, Walter Thornton, Ernest
Handing, William (Woolwich, W.) Morris, Alfred (Wythenshawe) Thorpe, Jeremy
Hannan, William Morris, Charles (Openshaw) Tomney, Frank
Harper, Joseph Morris, John (Aberavon) Tuck, Raphael
Harrison, Walter (Wakefield) Mulley, Rt. Hn. Frederick (Sheffield Pk) Urwin, T. W.
Hart, Mrs. Judith Murray, Albert Varley, Eric G.
Hattersley, Roy Neal, Harold Wainwright, Edwin
Hazell, Bert Newens, Stan Walden, Brian (All Saints)
Healey, Rt. Hn. Denis Noel-Baker, Francis (Swindon) Wallace, George
Heffer, Eric S. Noel-Baker, Rt. Hn. Philip (Derby, S.) Warbey, William
Herbison, Rt. Hn. Margaret Norwood, Christopher Watkins, Tudor
Hobden, Dennis (Brighton, K'town) Oakes, Gordon Weitzman, David
Holman, Percy Ogden, Eric Wellbeloved, James
Hooson, H. E. O'Malley, Brian Wells, William (Walsall, N.)
Horner, John Oram, Albert E. (E. Ham, S.) White, Mrs. Eirene
Houghton, Rt. Hn. Douglas Orbach, Maurice Whitlock, William
Howarth, Harry (Wellingborough) Orme, Stanley Wigg, Rt. Hn. George
Howarth, Robert L. (Bolton, E.) Oswald, Thomas Wilkins, W. A.
Howell, Denis (Small Heath) Owen, Will Willey, Rt. Hn. Frederick
Howie, W. Padley, Walter Williams, Alan (Swansea, W.)
Hoy, James Page, Derek (King's Lynn) Williams, Mrs. Shirley (Hitchin)
Hughes, Cledwyn (Anglesey) Paget, R. T. Williams, W. T. (Warrington)
Hughes, Hector (Aberdeen, N.) Palmer, Arthur Willis, George (Edinburgh, E.)
Hunter, Adam (Dunfermline) Pannell, Rt. Hn. Charles Wilson, William (Coventry, S.)
Hunter, A. E. (Feltham) Pargiter, G. A. Woodburn, Rt. Hn. A.
Hynd, H. (Accrington) Park, Trevor (Derbyshire, S. E.) Woof, Robert
Hynd, John (Attercliffe) Parker, John Wyatt, Woodrow
Jackson, Colin Pavitt, Laurence Yates, Victor (Ladywood)
Janner, Sir Barnett Pearson, Arthur (Pontypridd) Zilliacus, K.
Jeger, George (Goole) Peart, Rt. Hn. Fred
Jenkins, Hugh (Putney) Pentland, Norman TELLERS FOR THE AYES:
Jenkins, Rt. Hn. Roy (Stechford) Perry, Ernest G. Mr. Sydney Irving and
Johnson, Carol (Lewisham, S.) Popplewell, Ernest Mr. George Lawson.
Agnew, Commander Sir Peter Fletcher-Cooke, Sir John (S'pton) MacArthur, Ian
Allan, Robert (Paddington, S.) Foster, Sir John Maclean, Sir Fitzroy
Allason, James (Hemel Hempstead) Fraser, Rt. Hn. Hugh (St'fford & Stone) McMaster, Stanley
Amery, Rt. Hn. Julian Fraser, Ian (Plymouth, Sutton) McNair-Wilson, Patrick
Anstruther-Gray, Rt. Hn. Sir W. Gammans, Lady Maddan, Martin
Astor, John Gardner, Edward Maginnis, John E.
Atkins, Humphrey Gibson-Watt, David Maitland, Sir John
Awdry, Daniel Giles, Rear-Admiral Morgan Marples, Rt. Hn. Ernest
Balniel, Lord Gilmour, Ian (Norfolk, Central) Marten, Neil
Barber, Rt. Hn. Anthony Gilmour, Sir John (East Fife) Mathew, Robert
Barlow, Sir John Glover, Sir Douglas Maude, Angus
Batsford, Brian Glyn, Sir Richard Mawby, Ray
Beamish, Col. Sir Tufton Godber, Rt. Hn. J. B. Maxwell-Hyslop, R. J.
Bell, Ronald Goodhart, Philip Maydon, Lt.-Cmdr. S. L. C.
Bennett, Sir Frederic (Torquay) Goodhew, Victor Meyer, Sir Anthony
Bennett, Or. Reginald (Gos. & Fhm) Gower, Raymond Mills, Peter (Torrington)
Berkeley, Humphry Grant, Anthony Mills, Stratton (Belfast, N.)
Berry, Hn. Anthony Grant-Ferris, R. Miscampbell, Norman
Biffen, John Gresham Cooke, R. Mitchell, David
Biggs-Davison, John Grieve, Percy Monro, Hector
Birch, Rt. Hn. Nigel Griffiths, Eldon (Bury St. Edmunds) More, Jasper
Black, Sir Cyril Griffiths, Peter (Smethwick) Morrison, Charles (Devizes)
Blaker, Peter Gurden, Harold Mott-Radclyffe, Sir Charles
Bossom, Sir Clive Hall, John (Wycombe) Munro-Lucas-Tooth, Sir Hugh
Box, Donald Hall-Davis, A. G. F. Murton, Oscar
Boyd-Carpenter, Rt. Hn. J. Hamilton, Marquess of (Fermanagh) Neave, Airey
Boyle, Rt. Hn. Sir Edward Hamilton, M. (Salisbury) Nicholls, Sir Harmar
Braine, Bernard Harris, Frederic (Croydon, N. W.) Nicholson, Sir Godfrey
Brinton, Sir Tatton Harris, Reader (Heston) Noble, Rt. Hn. Michael
Bromley-Davenport, Lt.-Col. Sir Walter Harrison, Brian (Maldon) Nugent, Rt. Hn. Sir Richard
Brooke, Rt. Hn. Henry Harrison, Col. Sir Harwood (Eye) Onslow, Cranley
Brown, Sir Edward (Bath) Harvey, Sir Arthur Vere (Maccleef'd) Orr, Capt. L. P. S.
Bruce-Gardyne, J. Harvey, John (Walthamstow, E.) Orr-Ewing, Sir Ian
Bryan, Paul Harvie Anderson, Miss Osborn, John (Hallam)
Buchanan-Smith, Alick Hastings, Stephen Osborne, Sir Cyril (Louth)
Buck, Antony Hawkins, Paul Page, John (Harrow, W.)
Bullus, Sir Eric Hay, John Page, R. Graham (Crosby)
Burden, F. A. Heald, Rt. Hn. Sir Lionel Pearson, Sir Frank (Clitheroe)
Campbell, Gordon Heath, Rt. Hn. Edward Peel, John
Carlisle, Mark Hendry, Forbes Percival, Ian
Carr, Rt. Hn. Robert Higgins, Terence L. Peyton, John
Cary, Sir Robert Hiley, Joseph Pickthorn, Rt. Hn. Sir Kenneth
Channon, H. P. G. Hill, J. E. B. (S. Norfolk) Pike, Miss Mervyn
Chataway, Christopher Hirst, Geoffrey Pounder, Raiton
Chichester-Clark, R. Hobson, Rt. Hn. Sir John Powell, Rt. Hn. J. Enoch
Clark, Henry (Antrim, N.) Hogg, Rt. Hn. Quintin Price, David (Eastleigh)
Clark, William (Nottingham, S.) Hopkins, Alan Prior, J. M. L.
Clarke, Brig. Terence (Portsmth, W.) Hordern, Peter Quennell, Miss J. M.
Cole, Norman Hornby, Richard Ramsden, Rt. Hn. James
Cooke, Robert Howe, Geoffrey (Bebington) Rawlinson, Rt. Hn. Sir Peter
Cooper, A. E. Hunt, John (Bromley) Redmayne, Rt. Hn. Sir Martin
Cordle, John Hutchison, Michael Clark Rees-Davies, W. R.
Corfield, F. V. Iremonger, T. L. Renton, Rt. Hn. Sir David
Costain, A. P. Irvine, Bryant Godman (Rye) Ridley, Hn. Nicholas
Courtney, Cdr. Anthony Jenkin, Patrick (Woodford) Ridsdale, Julian
Craddock, Sir Beresford (Spelthorne) Jennings, J. C. Roberts, Sir Peter (Heeley)
Crawley, Aidan Johnson Smith, C. (East Grinstead) Robson Brown, Sir William
Crosthwaite-Eyre, Col. Sir Oliver Jones, Arthur (Northants, S.) Rodgers, Sir John (Sevenoaks)
Crowder, F. P. Jopling, Michael Roots, William
Cunningham, Sir Knox Joseph, Rt. Hn. Sir Keith Royle, Anthony
Curran, Charles Kerby, Capt. Henry Russell, Sir Ronald
Currie, G. B. H. Kerr, Sir Hamilton (Cambridge) St. John-Stevas, Norman
Dalkeith, Earl of Kershaw, Anthony Sandys, Rt. Hn. D.
Dance, James Kilfedder, James A. Scott-Hopkins, James
Davies, Dr. Wyndham (Perry Barr) Kimball, Marcus Sharpies, Richard
d'Avigdor-Goldsmid, Sir Henry King, Evelyn (Dorset, S.) Shepherd, William
Dean, Paul Kirk, Peter Sinclair, Sir George
Deedes, Rt. Hn. W. F. Kitson, Timothy Smith, Dudley (Br'ntf'd & Chiswick)
Digby, Simon Wingfield Lagden, Godfrey Smith, John
Dodds-Parker, Douglas Lambton, Viscount Smyth, Rt. Hn. Brig. Sir John
Doughty, Charles Lancaster, Col. C. G. Soames, Rt. Hn. Christopher
Douglas-Home, Rt. Hn. Sir Alec Langford-Holt, Sir John Spearman, Sir Alexander
Drayson, G. B. Legge-Bourke, Sir Harry Stainton, Keith
du Cann, Rt. Hn. Edward Lewis, Kenneth (Rutland) Stanley, Hn. Richard
Eden, Sir John Litchfield, Capt. John Stodart, Anthony
Elliot, Capt. Walter (Carshalton) Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfield) Stoddart-Scott, Col. Sir Malcolm
Elliott, R. W. (N'c'tle-upon-Tyne, N.) Lloyd, Ian (P'tsm'th, Langstone) Studholme, Sir Henry
Emery, Peter Lloyd, Rt. Hn. Selwyn (Wirral) Summers, Sir Spencer
Errington, Sir Eric Longbottom, Charles Talbot, John E.
Eyre, Reginald Longden, Gilbert Taylor, Sir Charles (Eastbourne)
Farr, John Loveys, W. H. Taylor, Edward M. (G'gow, Cathcart)
Fisher, Nigel Lucas, Sir Jocelyn Taylor, Frank (Moss Side)
Fletcher-Cooke, Charles (Darwen) McAdden, Sir Stephen Teeling, Sir William
Temple, John M. Walker, Peter (Worcester) Wolrige-Gordon, Patrick
Thatcher, Mrs. Margaret Walker-Smith, Rt. Hn. Sir Derek Wood, Rt. Hn. Richard
Thomas, Sir Leslie (Canterbury) Wall, Patrick Woodhouse, Hn. Christopher
Thomas, Rt. Hn. Peter (Conway) Walters, Dennis Woodnutt, Mark
Thompson, Sir Richard (Croydon, S.) Ward, Dame Irene Wylie, N. R.
Thorneycroft, Rt. Hn. Peter Weatherill, Bernard Yates, William (The Wrekin)
Tiley, Arthur (Bradford, W.) Webster, David Younger, Hn. George
Tweedsmuir, Lady Wells, John (Maidstone)
van Straubenzee, W. R. Whitelaw, William TELLERS FOR THE NOES:
Vaughan-Morgan, Rt. Hn. Sir John Williams, Sir Rolf Dudley (Exeter) Mr. Martin McLaren and
Vickers, Dame Joan Wilson, Geoffrey (Truro) Mr. Francis Pym.
Walder, David (High Peak) Wise, A. R.

Resolved, That this House approves the achievements to date and the aims of Her Majesty's Government to improve and develop the social services as rapidly as possible within the framework of the National Plan on the principles of a free National Health Service, comprehensive welfare services, a fair share of rising living standards for those in retirement, and the provision of contributory benefits and pensions based on earnings; and while welcoming the expansion and development of private superannuation schemes rejects them as a substitute for a comprehensive social security system.