The party opposite raised some pensions by 4s., but I am sure that the right hon. Member would not and could not deny that those pensioners for whom benefits were raised were still far from getting pensions of the same purchasing power as the 26s. which they received when the pension was first introduced.
The only reason more was not done, or done sooner, was that economic conditions did not allow it. As long as the country was faced with the threat of recurring crises it was impossible to build securely for the future in this or in any other economic or social field. Our hopes of maintaining the value of our improvements, let alone of making further improvements in the future, must depend upon our ability to maintain economic stability in the years ahead.
The hon. Member for Walthamstow, East was not satisfied with all that the Bill does. Who is ever satisfied? I hope that we shall never be satisfied with any measure of social improvement, because there must always be many further advances to be made. The stage which we have reached was not achieved in 10 years or even in one generation. It has been built steadily, brick upon brick, for 100 years or more and, therefore, there will always be much more to do.
Apart from pointing the further direction in which we would all like to see more progress made, we must all welcome the results of the Bill and on the whole must be pleased and surprised with the size of the increases which are being made. Every benefit covered by the Bill will be at a record level, and by that I mean higher in purchasing power and not merely in monetary value.
The only difference of opinion between us is about the method by which we are achieving this result. It appears, on the face of it, merely to be a difference of opinion concerning the amount of the increase in contribution. This difference has developed along the normal lines of division between the two sides of the House. That is not surprising. Nobody likes paying more money for anything if he can help it. The Opposition would be less than human if they did not try to gain some popularity out of that very natural dislike.
However, it is obvious, particularly since the speech of the right hon. Member for Ebbw Vale (Mr. Bevan) and the way in which the right hon. Member for Battersea, North (Mr. Jay) was interrupted from his own side, that the difference of opinion goes far deeper than one between the two sides of the House merely on the size of the extra contribution. It is not so much an argument between the Government and the Opposition as an argument, as in so many cases lately, within the Opposition itself. The hon. Member for Cardiff, West (Mr. G. Thomas) smiles, but if he was present during the events which I have just described he will find it difficult to deny what I have said.
The real argument is between hon. Members opposite who want to maintain the insurance principle and those who want to get rid of it. The right hon. Member for Ebbw Vale spent a great deal of time saying why the insurance principle was bunkum. He wasted a lot of effort. No one on either side of the House who has given any real attention to the social services has ever taken the insurance principle in the completely literal and technical sense of the term. It is a term which we have all come to understand and which it has been convenient to continue using.
Perhaps it would be more accurate to say that we believe in a contributory system aided by State funds. Whether we mean "insurance principle" in the technical sense of the term or not, I believe that the maintenance and the strengthening of the contributory principle is worth paying for. Moreover, I believe the majority of people in the country think it worth paying for. I do not believe people are dismayed by the extra contributions which are demanded. The benefits are higher than they were expected to be and the extra contributions are less severe than was feared by most people, and the majority believe that they are getting, and will get still more in the future, a fair return for their contributions.
People desire to maintain a sense of independence in these matters, and whether they have a real contractual agreement such as is implicit in a true insurance principle or not, is beside the point. Psychologically, they have the satisfaction of paying contributions during their working lives and knowing that, as a result, when they are sick or retire, they will get benefits as of right. People value that sense of independence and wish to maintain it. Hon. Gentlemen opposite and other bodies, such as the T.U.C., who adhere to the contributory principle are far nearer the real sympathies and feelings of the average man in the street than the right hon., Member for Ebbw Vale and others like him who want eventually to destroy the contributory principle.
We ought not to be unmindful of the dangers of weakening or abolishing the contributory principle. There is danger in having the benefits paid out of the general fund of taxation. If times of economic crisis arose, a Chancellor might feel that an arbitrary change could be made in the level of benefits and in the conditions of their receipt. That is a far greater danger if the benefits are paid purely from taxation than if they are paid out of a Fund based on a strong contributory principle.
Experience in one or two other countries bears that out. I believe, for example, in Sweden, where the benefits are paid entirely out of taxation, it has been found impossible in practice—or, at any rate, it has not happened in practice—to have any pension without a means test; every pension under those conditions is subject to some form of means test. It is far better to have a contributory principle and benefits as of right than to pay all the benefits out of the pool of the general fund of taxation with the risk of their being controlled year by year in the Budget by the Chancellor of the time.
Consequently, the only real question for us to ask ourselves is whether the contributions which are demanded are reasonable ones. I do not propose to go into a lot of figures; I shall make only one or two comments. It cannot be denied that, on average, the increased contribution will be a smaller percentage of earnings than the original contributions under the 1946 Act.