Speeches, etc.

Margaret Thatcher

HC I 2R [National Insurance Bill]

Document type: Speeches, interviews, etc.
Venue: House of Commons
Source: Hansard HC [670/672-78]
Editorial comments: Around 2000. MT intervened at c674 (Harriet Slater speaking).
Importance ranking: Trivial
Word count: 2039
[column 672]

Mrs. Harriet Slater (Stoke-on-Trent, North)

The hon. Member for Uxbridge (Mr. Curran) has continually referred to the speech made by my hon. Friend the Member for Coventry, East (Mr. Crossman), but if I understood both speeches correctly, there is a fundamental difference between the approach of the two hon. Members to this question. [column 673]

The hon. Member for Uxbridge based his whole argument on the fact, to use a phrase which he used and which I thought very unfortunate, that somehow we have to find how to help those at “the bottom of the heap” . His argument is that we must help only those who are desperately in need. My hon. Friend the Member for Coventry, East is anxious to establish a pensions scheme which will give to all people something more related to their earnings and which would not introduce the idea of a means test, which to me seemed to be the fundamental argument of the hon. Member for Uxbridge.

Mr. Curran

I appreciate the courtesy of the hon. Lady in giving way. I am sure that she does not wish to misrepresent me. I want urgently to help the people who need help. I do not mind how widely we define them. Maybe we should define more widely the people who need help. I urge that whatever money we can afford to give for the relief of people who are hard up we should concentrate, every penny, on those who need it instead of disbursing it among those who do not.

Mrs. Slater

That reinforces my argument that the basic approach of the hon. Member is a means test philosophy, that we should have a means test on the benefits which we give to these people.

I am sure all of us welcome these increases, but we have been told that the factor which has urged these new increases in benefits is the terrific increase in the rate of unemployment. We are told that that is the reason why the Government have introduced this Bill now. Yet, as recently as just before Christmas, members of the Trades Union Congress interviewed the Chancellor of the Exchequer with a view to securing higher rates of unemployment pay. They were told by the Chancellor that he was unable to suggest an early solution along those lines. Yet now, because over the last month the situation has worsened terrifically—not entirely because of the weather but greatly due to the policy of the Tory Government—we have this Bill.

We welcome the fact that, while increases will be made to the unemployed, other basic rates are to be increased. The Joint Parliamentary Secretary said in the debate on this problem—I think it was in November—that the Government [column 674]were unable to give increases in the basic benefit. I have not got the report of that debate with me, but she used a phrase to the effect that they were “reluctant to be milked” .

The Joint Parliamentary Secretary to the Ministry of Pensions and National Insurance (Mrs. Margaret Thatcher)

I did not speak in that debate.

Mrs. Slater

It was in the last but one debate. She used the phrase that the Government would not be milked by the kind of people we represent.

Mrs. Thatcher

indicated dissent.

Mrs. Slater

I shall get the Report afterwards and show it to the hon. Lady.

My hon. Friend the Member for Bedwellty (Mr. Finch) said that the unemployed are in a very difficult situation. They get unemployment benefit only for the period covered by their stamps. Their stamps may cover the period if it is short-term unemployment, but when a man is 45—certainly when he is 50—he finds it increasingly difficult to obtain employment.

Mr. Bence

Is my hon. Friend aware that many men in Scotland who are 45 and over cannot find jobs in other industries because of the independent schemes run by employers?

Mrs. Slater

I think that is so. Some research has been done on this problem. It has been found that as a man approaches the age of 50—certainly when he is 60—if he is suddenly thrown out of work it is almost a sheer impossibility for him to find a job.

Such people are affected by rationalisation of industry. I represent a constituency in which the pottery industry, a craft industry, is centred. It was thought that rationalisation would never apply to that industry. It was thought that it would not be possible to modernise the way in which cups and saucers are dipped, but that is now done mechanically and fewer people are required in the industry. Cups and plates go along on an endless belt and are dipped automatically and the labour of many people is done away with.

Large firms have discovered that through rationalisation, automisation and mechanisation they can considerably reduce the number of persons [column 675]employed. In my village the firm of British Aluminium is closing down a whole factory and 1,000 people will be thrown on to the labour market. They will be given some compensation, but what is that in place of a job when their unemployment benefit expires in eighteen months? What is that to the man of 55 or 56 who has to wait ten years before he can receive old-age pension? People affected in this way know quite well that a firm such as British Aluminium might give £¼ million in total in compensation, but that has no real relation in value to the large amounts of compensation given to directors. It is not a real share of the cake. The only thing that these people have been able to give to the industry is their work either by hand or brain.

In Firefighter, the Fire Brigades Union newspaper, it was shown that the relation of unemployment pay rates to contributions has been going down steadily over the years. A single man in 1924 earning 56s. a week and becoming unemployed had 18s. a week benefit. That was 32 per cent. of his earnings. In 1955, if he earned £11 3s. he got 40s. a week unemployment pay, 18 per cent. of his earnings. In 1961 earnings were 307s. and unemployment pay was 57s. 6d., or 19 per cent. of the earnings. Thus, the real value of the benefits as a proportion of a man's wages has gradually decreased.

The hon. Member for Acton (Mr. Holland) said that the Bill was another instance of Tory humanitarianism. It is certainly what we understand by Tory humanitarianism, because its real purpose is twofold: it is supposedly giving an increase in benefits to these people before a General Election—there is no possible doubt about that; I am not crystal gazing, for it is one of a series of sensible deductions.

Mr. Bence

It will not work this time.

Mrs. Slater

Secondly, what people do not realise, and will not realise until later, is where the money is being obtained to pay for these increased benefits. Under the Bill the Exchequer proposes to contribute £28 million, plus £2 million for increases in industrial injury benefits. The worker will find £130 million of the extra cost. This is a real burden to the railway worker who is taking home less than £10 a week and to some miners, who are [column 676]taking home less than £12 a week, for it is another 1s. on their contributions. The Government are supposedly giving increases to those beneficiaries, but the workers themselves will pay for it by the extra 1s. a week which, under the Bill, both men and women will have to pay.

In addition, several hon. Members served in a Committee dealing with the graduated pensions scheme. We told the Government that the scheme would not work, and we have been proved right, because so many people have contracted out of it. As my hon. Friend the Member for Coventry, East said, that was a Bill to suit the insurance people of this country, not the workers. The Government now propose to increase the earnings limit from £15 to £18. What happens as a result of this? As a result, £48 million will come out of the graduated scheme in order to pay for these increases. In effect, it is not the Government who are the generous people in making these increases but the workers, who have to pay in order that these increases may be made.

Let us look at some of these increases. We asked that old-age pensioners should be given increased basic rates. The hon. Member for Uxbridge told us that not everybody needed them. He said that they should get them from National Assistance rather than from an increase in the basic rate. But look even at the new basic rates in the Bill—an increase from 57s. 6d. to 67s. 6d. for a single person and from 92s. 6d. to £5 9s. for a married couple. Many hon. Members opposite have not a clue how far £5 9s. will go for a married couple. Let hon. Members bear in mind the weather which we have been having. Let them remember that many of these old folk have had to pay increased rents over the last year. Look at the price of coal, electricity and gas. Let hon. Members read what was written by an ex-Member of the House, Lena Jeger, in the Guardian today. She tells a very sad story of a woman who is going to die, not because she is 80 but because she is cold and hungry and because she has not enough on which to live. As I have said before, there are many people who spend more in one night out than they expect these old folk to live on for the whole week.

Particularly during the last few weeks, these old people have had the extra expense of finding warmth. In addition, [column 677]many of them have faced the terrible need of having to buy warmer underclothing. I have been told by some voluntary organisations that the requests for warm clothing have increased considerably, so much so that the W.V.S. in my locality have made a public appeal to try to get warmer clothing for people who are living on small incomes or old-age pensions.

What is wrong with us today is that we have a wrong sense of values. We are living at a time when we are repeatedly told from the Government benches that we are living in an affluent society. More and more people are better off, and yet we have the absolute disgrace in this country that we expect millions of our people to live well below the poverty line. As my hon. Friend the Member for Bedwellty pointed out, even the rates in the Bill are not above the subsistence level which is considered adequate today.

When he introduced the Bill the Minister said that more people would be getting a share of the national cake, but the question is, how big a share of the national cake are we giving our people? Last year we made more millionaires in this country; the number increased by about 14. Hon. Members may say that that is not very much, but it shows the difference between the well-off few at one end of the scale and, at the other end, the very large number of people who are suffering a standard of living well below the subsistence level.

The question also arises of the 10s. widow and other widows which was discussed on Friday. Surely on Friday the Minister could have agreed to give some payment to the 10s. widow, who feels a terrible injustice. Instead of promising to look at the matter he could have abolished the earnings rule for widows immediately.

The only sensible solution to the problem of our old people is that put forward by the Labour Party in its book on pensions. The Government adopted some of these ideas when they introduced their graduated pension scheme. But until we have a scheme which relates the amount of benefit which a person gets when he retires to his earnings while he is at work, so that he receives a sum approaching half of his [column 678]earnings, we shall always be throwing people out of work when they are 60 or 65 into a situation in which their standard of living is suddenly and considerably reduced. The same problem arises with the sick. These are people who, through no fault of their own, find that their needs have increased considerably just because they are ill. We ought to make sure at least that these people are given an adequate amount on which to live while their earning capacity is reduced.

To approach the whole problem from a means test point of view is unworthy of us in Britain. We must make our people realise before the General Election that these increases, which we welcome, because they are some relief to the people who need them, will be paid for by the workers. The danger is that we shall have a General Election between the benefits and the increase in contributions and before people have realised that they have to pay. This is not humanitarianism. It is not absolute justice. It is merely patching up the situation which we have allowed to grow up without getting down to the real approach to adequate pensions and benefits for people who are in need.