Orders of the Day — NATIONAL INSURANCE &c. BILL

Part of the debate – in the House of Commons at 12:00 am on 19th December 1968.

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Photo of Peter Tapsell Peter Tapsell , Horncastle 12:00 am, 19th December 1968

I suspect that this Bill is not quite as modestly innocuous as the Minister of State suggested in his pleasant opening speech, nor as robustly beneficial a contribution to the festive season as was implied by the right hon. Member for Sowerby (Mr. Houghton). Contrary to what the right hon. Member for Sowerby suggested, the 1966 National Insurance Act has not been forced to lapse in this respect because employers have been unreasonable in making trivial difficulties and in dragging their feet. It goes deeper than that. Clause 1 is made necessary by one of the Government's many broken Election pledges—the failure to introduce a compulsory guaranteed minimum wage.

When the right hon. Lady the Member for Lanarkshire, North (Miss Herbison) made her speech in February, 1966, we were on the eve of a General Election. At that point we had not had the July, 1966 economic crisis. In those days it was both politically attractive and possibly even economically sound to suppose that these proposals could be implemented. The right hon. Member for Sowerby said that at that time it seemed reasonable to suppose that over a period of three years these proposals would be amicably worked out with industry and put into effect. I suggest that one of the reasons why it has not been found possible to do so it that it is not easy to transfer this obligation right across the board from the State to industry until there is a compulsory minimum national wage. If one attempted to do it in the present situation hardship would be caused in many cases.

The transitional period of three years which the right hon. Member for Lanarkshire, North mentioned, when introducing the 1966 National Insurance Act must, therefore, be extended—rather like those other transitional periods at present covering 2½ per cent. house mortgages, the surplus on the balance of payments and the 6 per cent. growth rate in the economy. The Bill is, therefore, only the small tip of a large iceberg.

The Government are never lucky in their attempts to control expenditure. Normally, increased expenditure is caused by the Government introducing new legislation. On this occasion they will be involved in an extra£3 million a year expenditure because they are not able to give effect to legislation which they passed three years ago. The unfortunate people of Britain seem to suffer either way.

In considering Clause 1, three questions must be asked: first, will the proposals be fair to workers; secondly, will they be fair to employers; and, thirdly, will they be fair to the nation as a whole? When one considers whether they will be fair to workers, one must be careful not to fall into the trap which is increasingly being set for us by intellectuals—and particularly those who have never had much to do with assembly lines or blast furnaces—that the workers of this country are a lot of layabouts who will seize every possible opportunity to abuse the National Insurance Scheme.

Those who have had the privilege to represent industrial constituencies know that that is far from the case. One of the great problems in all these matters is how to operate a scheme fairly for the 95 per cent. of our fellow countrymen who would not seek to abuse it, without at the same time laying it open to exploitation by the feckless 5 per cent. who make all our planning in these spheres so difficult.

It is in that context that we must consider the whole idea of the six-day suspension rule. This rule is a fairly new development in the approach to unemployment benefit. Although I fully take the point, which the right hon. Member for Sowerby made about the extent to which these provision have been abused in the past, and the extent to which certain employers have sought to shift their responsibilities on to the National Insurance Scheme, it is not always easy to draw a clear-cut distinction between unemployment and suspension.

The right hon. Member for Sowerby gave an example of a factory in his constituency which sometimes did not require its labour for a fortnight or so, but did not want to get rid of its workers.

There are other examples. A serious fire in a factory might mean that while the workers were not to be dismissed, they could not be employed for two or three weeks, or even longer. As I say, it is not always easy to draw a clear cut distinction in these matters. We should not, therefore, be too certain that the proposed provisions would in all cases be as beneficial in their effect as has been suggested

As to whether or not they will be fair to employers, will the Minister give a clear answer to the question which many hon. Members have asked; do the Government intend to introduce legislation to compel all employers to pay the equivalent of unemployment benefit to suspended or short-time workers? If that is their intention and if it is not to be done by agreement, or when a compulsory national basic minimum wage is in operation, then, this will be difficult at a time when other tax burdens on industry have gone up sharply—this applies particularly to smaller factories. I now represent a constituency which has only small industrial units and they are finding the effects, for example, of the new special import deposits extremely difficult, so the Government should be careful before pressing ahead without the agreement of industry.

As to whether the proposals are likely to be fair to the nation as a whole, one must strike a note of anxiety about whether or not unofficial strikes will be made more likely. It appears on the face of it that, if an employer must pay suspension benefits to any of his employees who are put out of work as a result of an unofficial strike in another part of the industry, or perhaps as a result of the activities of a trade union operating in his factory but different from the union representing the men who are put out of work, the pressures on employers to meet the demands of unofficial strike leaders could be increased.

My only comment about Clause 2 is on the proposal to extend from six months to 12 months the period within which social security benefits may be encashed. As hon. Members have made clear, this is a generally acceptable doc trine, both in terms of extending the period of time and also in keeping some limit on the period. We have all had constituency cases brought to our attention of people who, for good reason, have not claimed their benefit within six months. By extending it to 12 months we appear to be giving a fair answer to this problem. We must thank the National Insurance Advisory Committee for its Report on this subject.

But it is worth noting that the Inland Revenue can claim back money due to it from taxpayers for a period of six years after it becomes due It seems that one criterion is used when the State is owed money and another when it owes money. I have never been able to understand why, in dealing with individuals, the State is always allowed to have the law so heavily loaded in its favour. Why should a national insurance contributor who happens to be, even under the new proposals, a year and a day over the period in which he should have applied, excluded from benefit, while the State has up to six years to demand payment from any taxpayer who owes it money. This extraordinary distinction seem to underline one aspect of the present national discontent, which is the subordination of the individual to the State.