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National Insurance (Increased Benefits And Pensions)

Volume 498: debated on Tuesday 8 April 1952

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I wish, with permission, to make a short statement relating to National Insurance benefits and pensions.

Following my discussions with industry, the Government have decided to introduce at the earliest possible moment a Bill containing proposals on the lines indicated by my right hon. Friend the Chancellor of the Exchequer in his Budget statement. These proposals are:
  • (1) an increase in the rate of family allowances from 5s. to 8s. a week;
  • (2) an increase in National Insurance benefits, including unemployment, sickness and widows' benefits and retirement pension from the present figures of 26s. single and 42s. married to 32s. 6d. single and 54s. married. These higher rates of retirement pension will be paid at the existing ages of 65 for men and 60 for women. They will also be made available to existing pensioners in Great Britain whether they reached pension age before or after 1st October, 1951. In this way we shall get rid of an anomaly, and restore the principle of uniformity in the main rates of benefit;
  • (3) an increase in the basic rate of industrial injuries benefit from 45s. to 55s.
  • These proposals will for the first full year cost, for family allowances which come out of the Exchequer about £37 million, and for National Insurance and Industrial Injuries benefits which come out of the Insurance Funds about £60 million and £3 million respectively.

    The Bill will also contain consequential alterations to other rates and provision for additional contributions in respect of the insurance benefits. These will be substantially those mentioned by the Chancellor but with adjustments to avoid the inclusion of odd halfpennies which give great inconvenience to employed persons and their employers.

    A White Paper will be made available with the Bill explaining the changes proposed.

    I hope to bring the new rates of retirement pension into operation at the end of September, family allowances by the beginning of September, and other improvements such as those for sickness and unemployment towards the end of July. The new rates of contribution would become payable in October.

    There is, however, a vast amount of work to be done and a lot of complicated arrangements to be made, but with goodwill in all quarters of the House, I hope we may be able to adhere to this time table.

    I find it difficult to equate some of these new benefits and pensions to the increased cost of living, the removal of the food subsidies and the imposition of the health charges. I understand from the Minister that there will be a White Paper which, I take it, will meet all these points, and that we shall be able to discuss it in detail when considering the Bill.

    I want to ask the right hon. Gentleman one question which I consider of paramount importance to the poorer people of this country. Has he discussed this matter with the Minister of Food in order that these new pensions and benefits will synchronise with the increase in food prices? I see from the statement that these benefits will not operate until late in the year. I understand from the Minister of Food, although he has not committed himself at Question time and has been a little reluctant to commit himself, that he proposes to increase the price of food long before these increases will operate. As this is a very important matter, I should like the Minister, if he can, to tell me what is the position.

    The right hon. Lady would not expect me to answer for the Minister of Food any details of increases of food prices. I can only say, in regard to my proposals, that we are bringing each one of these improvements into operation at the earliest possible date from the administrative point of view.

    The Minister indicated that there would be an increase for single persons with 26s. and for a couple with 42s. Will he give some indication of the increase that will be granted to a single person drawing 30s. at the moment and a couple drawing 50s.?

    I thought that I had made it plain that we were restoring uniformity of rates by raising both of these classes to 32s. 6d. and 54s., respectively. The hon. Member will bear in mind that, under the arrangements for which the last Government were responsible, there are persons coming on to retirement pension today at 26s. per week, and they will get a 25 per cent. increase on their pension rate.

    In view of the fact that the cost of living has increased quite a lot since the Chancellor's statement, will the right hon. Gentleman try to make arrangements whereby the retirement pension increase will take effect from the date of the Budget?

    I am afraid that is quite impossible. None of my predecessors in this office has ever found it possible to make increases in pensions retroactive.[An HON. MEMBER: "What about the doctors?"] This is an insurance scheme; that is the difference.

    Can the Minister say if the Government proposed to do anything to assist the non-contributory pensioner, who did not get an increase on the last occasion, because there is grave disquiet in the country among these people, who think that they ought at least to have some consideration in view of the fact that the rising cost of living is now having its effect upon them?

    The right hon. Member for Fulham, West (Dr. Summerskill) last year did not do anything for the noncontributory pensioner. We have nothing to do with the non-contributory pensioner in the National Insurance Scheme. The whole of their money for pensions

    Division No. 65.]


    [3.40 p.m.

    Aitken, W. T.Bennett, William (Woodside)Butler, Rt. Hon. R. A. (Saffron Walden)
    Allan, R. A. (Paddington, S.)Bevins, J. R. (Toxteth)Carr, Robert (Mitcham)
    Alport, C. J. M.Birch, NigelCarson, Hon. E.
    Amory, Heathcoat (Tiverton)Bishop, F. P.Cary, Sir Robert
    Anstruther-Gray, Major W. J.Black, C. W.Channon, H.
    Arbuthnot, JohnBoothby, R. J. G.Churchill, Rt. Hon. W. S.
    Ashton, H. (Chelmsford)Bossom, A. C.Clarke, Col. Ralph (East Grinstead)
    Assheton, Rt. Hon. R. (Blackburn, W.)Bowen, E. R.Clarke, Brig. Terence (Portsmouth, W.)
    Astor, Hon. J. J. (Plymouth, Sutton)Boyd-Carpenter, J. A.Cole, Norman
    Baker, P. A. D.Boyle, Sir EdwardColegate, W. A.
    Baldock, Lt.-Cmdr. J. M.Braine, B. R.Cooper, Sqn. Ldr. Albert
    Baldwin, A. E.Braithwaite, Lt.-Cdr. G. (Bristol, N.W.)Cooper-Key, E. M.
    Barber, A. P. L.Bromley-Davenport, Lt.-Col. W. H.Craddock, Beresford (Spelthorne)
    Barlow, Sir JohnBrooke, Henry (Hampstead)Cranborne, Viscount
    Beach, Maj. HicksBrooman-White, R. C.Crookshank, Capt. Rt. Hon. H. F. C.
    Beamish, Maj. TuftonBuchan-Hepburn, Rt. Hon. P. G. T.Crosthwaite-Eyre, Col. O. E.
    Bell, Philip (Bolton, E.)Bullard, D. G.Crouch, R. F.
    Bell, Ronald (Bucks, S.)Bullock, Capt. M.Crowder, John E. (Finchley)
    Bennett, F. M. (Reading, N.)Bullus, Wing-Commander E. E.Crowder, Petre (Ruislip—Northwood)
    Bennett, Sir Peter (Edgbaston)Burden, F. F. A.Cuthbert, W. N.
    Bennett, Dr. Reginald (Gosport)Butcher, H. W.Darling, Sir William (Edinburgh, S.)

    comes out of the Exchequer, and the pensions themselves are administered by the Assistance Board. They will benefit to the extent that they are being supplemented today by the rise in the Assistance scales which I announced yesterday.

    On the application of the proposal now submitted to the House, would it not be better if the Minister indicated to the House and to the country that the increased rates amount to 2s. 6d. and 4s., instead of saying that it is going up from 26s. to 32s. 6d. and from 42s. to 54s.?

    No, Sir, I regard it as a perfectly indefensible and intolerable anomaly that persons attaining the pension age under this Government should obtain a lower pension than they obtained if they reached the pension age before 1st October last year, and I gather that throughout the country there has been a widespread desire to see uniformity.

    Order. We shall have a White Paper. There is no Question before the House at the moment.