(c) crown copyright
Catalogue Reference:CAB/129/5
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i
THIS DOCUMENT IS T H E PROPERTY OF HIS B R I T A N N I C MAJESTY'S GOVERNMENT
Printed
for the Cabinet.
December
1945.
Copy N o .
SECRET. C P .
(45)
315.
1st December,
1945.
CABINET.
REPORT
BY T H E SOCIAL SERVICES
NATIONAL INSURANCE
MEMORANDUM
COMMITTEE
SCHEME.
BY T H E L O R D P R I V Y
ON
THE
SEAL.
1. T h e G o v e r n m e n t a r e p l e d g e d i n T h e K i n g ' s S p e e c h to p a s s i n t h e c u r r e n t
Session a m e a s u r e e x t e n d i n g a n d i m p r o v i n g t h e e x i s t i n g s c h e m e of s o c i a l
i n s u r a n c e ; a n d , i n c o n n e c t i o n w i t h t h e M o t i o n p u t d o w n by G o v e r n m e n t s u p ­
p o r t e r s on t h e s u b j e c t of i n c r e a s e s i n the r a t e s of o l d a g e p e n s i o n s , a p r o m i s e
h a s been g i v e n t h a t i m p r o v e d r a t e s of p e n s i o n w i l l b e b r o u g h t i n t o effect b e f o r e
n e x t w i n t e r . I t i s c l e a r l y d e s i r a b l e t h a t t h e s e i m p r o v e d r a t e s s h o u l d be a u t h o r i s e d
by t h e m a i n N a t i o n a l I n s u r a n c e B i l l a n d n o t b y s e p a r a t e e m e r g e n c y l e g i s l a t i o n ;
a n d t h e N a t i o n a l I n s u r a n c e B i l l o u g h t , t h e r e f o r e , if p o s s i b l e , to be p u b l i s h e d
d u r i n g t h e C h r i s t m a s R e c e s s i n o r d e r to e n s u r e i t s p a s s a g e by t h e e a r l y s u m m e r .
To e n a b l e t h i s to b e d o n e d e c i s i o n s o n t h e m a i n p r i n c i p l e s to be e m b o d i e d i n tire
Bill a r e u r g e n t l y required.
2. T h e S o c i a l S e r v i c e s C o m m i t t e e h a v e c o n s i d e r e d p r o p o s a l s p u t f o r w a r d
by t h e M i n i s t e r of N a t i o n a l I n s u r a n c e , some of w h i c h involve c o n s i d e r a b l e
d e p a r t u r e s f r o m t h e C o a l i t i o n G o v e r n m e n t W h i t e P a p e r ( C m d . 6550), a n d t h e i r
r e c o m m e n d a t i o n s t o t h e C a b i n e t on these p r o p o s a l s a r e s e t o u t in t h e f o l l o w i n g
paragraphs.
3 . Basis of Rates of Benefit and Pension,—The
White Paper argued against
t h e a d o p t i o n of a s u b s i s t e n c e b a s i s for benefit r a t e s i n a u n i v e r s a l i n s u r a n c e
scheme. W e a g r e e t h a t i t w o u l d be i m p r a c t i c a b l e t o v a r y benefit r a t e s a c c o r d i n g
to t h e n e e d s of different i n d i v i d u a l s o r to c h a n g e t h e m a t s h o r t i n t e r v a l s a c c o r d i n g
to v a r i a t i o n s i n t h e g e n e r a l cost of l i v i n g . B u t i t is, i n o u r view, e s s e n t i a l : —
(i) t h a t t h e l e a d i n g r a t e s s h o u l d be fixed i n i t i a l l y a t figures w h i c h c a n be
j u s t i f i e d b r o a d l y i n r e l a t i o n to t h e p r e s e n t level of t h e c o s t of l i v i n g ;
and
(ii) t h a t d e f i n i t e a r r a n g e m e n t s s h o u l d be m a d e f o r a r e v i e w of t h e r a t e s
f r o m t h i s p o i n t of v i e w a t fixed i n t e r v a l s .
T o m e e t t h e first r e q u i r e m e n t w e r e c o m m e n d t h a t t h e r a t e s s h o u l d be c a l ­
e u l a t e d o n t h e b a s i s of a n a d d i t i o n of 31 p e r cent, t o t h e b a s i c s u b s i s t e n c e figures
g i v e n in t h e B e v e r i d g e R e p o r t , w h i c h w e r e n o t s e r i o u s l y c h a l l e n g e d i n a n y q u a r t e r
a t t h e t i m e of p u b l i c a t i o n . T h i s is i n l i n e w i t h t h e G o v e r n m e n t s d e c l a r e d resolve
t o hold t h e cost of l i v i n g a t a b o u t 31 p e r cent, over t h e S e p t e m b e r 1939 level.
T o m e e t t h e s e c o n d r e q u i r e m e n t t h e M i n i s t e r of N a t i o n a l I n s u r a n c e s h o u l d be
u n d e r a s t a t u t o r y d u t y t o r e v i e w a t five y e a r l y i n t e r v a l s t h e r a t e s of benefit,
p e n s i o n s a n d c o n t r i b u t i o n s by r e f e r e n c e to a l l t h e r e l e v a n t f a c t o r s , i n c l u d i n g
s u c h e x p e n d i t u r e a s a p p e a r s e s s e n t i a l for t h e p r e s e r v a t i o n of h e a l t h a n d w o r k i n g ­
c a p a c i t y , a n d to p r e s e n t h i s c o n c l u s i o n s a n d p r o p o s a l s to P a r l i a m e n t .
4. Rates
of Sickness
and Unemployment
Benefit:—On
the basis recom­
mencled in p a r a g r a p h 3, t h e r a t e s f o r a s i n g l e m a n a t w o r k a n d for a c o u p l e w o u l d
be 25s. a n d 42s. r e s p e c t i v e l y . B u t i n o r d e r t o l e a v e u n d i s t u r b e d t h e 16s. r a t e f o r
a n a d u l t d e p e n d a n t , w h i c h is a l r e a d y i n c l u d e d i n t h e N a t i o n a l I n s u r a n c e ( I n d u s ­
t r i a l I n j u r i e s ) B i l l , i t is p r o p o s e d t h a t t h e 42s. s h o u l d be d i v i d e d in t h e p r o p o r t i o n
of 26s. f o r t h e m a n a n d 16s. f o r h i s w i f e , a n d t h a t t h e r a t e for a s i n g l e p e r s o n
s h o u l d be 26s. T h e s e r a t e s c o m p a r e w i t h 40s. for a c o u p l e a n d 24s. for a s i n g l e
person i n t h e W h i t e P a p e r .
[ 3 0 9 8 1 ]
B
3 g
N o c h a n g e i s p r o p o s e d i n t h e W h i t e P a p e r p r o p o s a l s t h a t t h e r a t e s of
u n e m p l o y m e n t a n d s i c k n e s s benefit for a m a r r i e d w o m a n i n s u r e d i n h e r o w n
r i g h t s h o u l d be 20s. a n d 16s. r e s p e c t i v e l y a n d t h a t t h e s t a n d a r d r a t e s of b o t h
u n e m p l o y m e n t a n d s i c k n e s s benefit s h o u l d be r e d u c e d w h e r e i n t h e r e l e v a n t
c o n t r i b u t i o n y e a r t h e c l a i m a n t h a s g a p s i n h i s r e c o r d of c o n t r i b u t i o n s w h i c h a r e
n o t c o v e r e d by e x c u s a l s f o r p r o v e d u n e m p l o y m e n t o r s i c k n e s s .
,
5. -Duration
of Sickness
and Unemployment
Benefit-The
White Paper,
d e p a r t i n g from t h e Beveridge Report, proposed t h a t sickness a n d u n e m p l o y m e n t
benefit s h o u l d be l i m i t e d i n d u r a t i o n — t h r e e y e a r s for s i c k n e s s benefit, a f t e r w h i c h
t h e c l a i m a n t w a s t o be e n t i t l e d t o i n v a l i d i t y benefit, a n d t h i r t y w e e k s f o r
u n e m p l o y m e n t benefit ( e x c e p t for c l a i m a n t s w i t h e x c e p t i o n a l l y g o o d c o n t r i b u t i o n
r e c o r d s ) . T h e r e seems t o b e n o j u s t i f i c a t i o n f r o m t h e p o i n t of v i e w of h u m a n
n e e d s f o r a r e d u c t i o n i n t h e benefit for a sick p e r s o n a f t e r t h e l a p s e of a n y
p a r t i c u l a r p e r i o d of t i m e a n d t h e cost of r e m o v i n g t h e l i m i t a t i o n o n s i c k n e s s
benefit is r e l a t i v e l y s m a l l . W e h a v e , t h e r e f o r e , n o h e s i t a t i o n i n r e c o m m e n d i n g
t h a t t h e r e s h o u l d be n o p r o v i s i o n for i n v a l i d i t y benefit a n d n o l i m i t o n t h e
p a y m e n t of s i c k n e s s benefit, s u b j e c t a l w a y s t o t h e q u a l i f y i n g c o n d i t i o n of 156 p a i d
contributions.
. W e h a v e h a d m o r e difficulty over t h e q u e s t i o n w h e t h e r t h e r e s h o u l d be a n y
a u t o m a t i c l i m i t o n t h e p e r i o d of u n e m p l o y m e n t benefit. T h e cost of a b o l i s h i n g
a l t o g e t h e r t h e W h i t e P a p e r l i m i t s w o u l d b e s u b s t a n t i a l (viz., a n a d d i t i o n of a b o u t
7d. t o t h e w e e k l y r a t e of c o n t r i b u t i o n ) . W e feel t h a t i t is h a r d t o j u s t i f y a n y
a u t o m a t i c l i m i t a t i o n o n t h e p e r i o d of u n e m p l o y m e n t benefit, s i n c e i n m a n y , if n o t
m o s t , cases t h e p r o l o n g a t i o n of u n e m p l o y m e n t i s d u e t o n o f a u l t o n t h e p a r t of
t h e a p p l i c a n t . O n t h e o t h e r h a n d , t h e r e is c l e a r l y s o m e r i s k of a b u s e o n t h e p a r t
o f , a m i n o r i t y of u n s a t i s f a c t o r y p e r s o n s if n o l i m i t a t i o n is i m p o s e d , a n d w e h a v e ,
therefore, given m u c h s t u d y t o the question w h e t h e r it would be possible to devise
s u i t a b l e s a f e g u a r d s a g a i n s t s u c h a b u s e . I t i s a l r e a d y p r o v i d e d t h a t benefit m a y
be w i t h d r a w n f r o m a p e r s o n w h o r e f u s e s a n offer of s u i t a b l e e m p l o y m e n t o r
t r a i n i n g or w h o loses h i s e m p l o y m e n t t h r o u g h m i s c o n d u c t , a n d t h i s p r o v i s i o n
w o u l d be c o n t i n u e d u n d e r t h e n e w scheme. B u t it c a n n o t be c l a i m e d t h a t t h e s e
s a f e g u a r d s a r e by t h e m s e l v e s a d e q u a t e , s i n c e e v e n i n t i m e s of g o o d e m p l o y m e n t
i t m a y be v e r y difficult, h a v i n g r e g a r d t o t h e e s t a b l i s h e d p o l i c y of t h e M i n i s t e r
of L a b o u r in t h e offering of e m p l o y m e n t , t o offer a s u i t a b l e j o b t o t h e t y p e of
a p p l i c a n t at whom an automatic limit is aimed.
T h e offer of t r a i n i n g or
r e c o n d i t i o n i n g i n t h e sense i n w h i c h t h e p r o v i s i o n of t h e s e f a c i l i t i e s i s c o n t e m ­
p l a t e d by t h e M i n i s t r y of L a b o u r w o u l d be s u b j e c t t o t h e s a m e l i m i t a t i o n s .
On
the o t h e r hand, a l t e r n a t i v e s a f e g u a r d s w h i c h w e have considered would, in o u r
v i e w , be o p e n t o t h e s a m e c r i t i c i s m s a s w e r e levelled a g a i n s t t h e " n o t g e n u i n e l y
s e e k i n g w o r k ' ' c o n d i t i o n . W e h a v e , t h e r e f o r e , been d r i v e n t o t h e c o n c l u s i o n t h a t
!
r e l i a n c e m u s t be p l a c e d o n t h e a b i l i t y of t h e G o v e r n m e n t t o p r o v i d e , a s p a r t of
i t s f u l l e m p l o y m e n t p o l i c y , offers of w o r k or of s u i t a b l e t r a i n i n g t o a l l t h o s e
w h o b e c o m e u n e m p l o y e d , l o n g b e f o r e t h e y h a v e become v i r t u a l l y p e n s i o n e r s o n
i the unemployment fund.
6. Payment
for First or Only Child in the Case of Sickness,
Unemployment
or Widowhood.—The
Beveridge R e p o r t suggested t h a t t h e p a y m e n t for a child
s h o u l d be 8s. a f t e r m a k i n g some a l l o w a n c e f o r p a y m e n t s i n k i n d . T h e C o a l i t i o n
G o v e r n m e n t s u b s t i t u t e d a r a t e of 5 s . , j u s t i f i e d b y t h e p r o v i s i o n of m o r e g e n e r o u s
a l l o w a n c e s in k i n d , a n d t h i s h a s since b e e n a d o p t e d i n t h e F a m i l y A l l o w a n c e s
A c t . T h e r a t e f o r a first o r only c h i l d e m b o d i e d i n t h e I n d u s t r i a l I n j u r i e s B i l l
is 7 s . 6d., a n d i n a l l t h e c i r c u m s t a n c e s w e r e c o m m e n d a r a t e of 7 s . Qd. for t h e
first o r o n l y c h i l d .
7. Rates
of Retirement
Pension.—The
Beveridge Report recommended
t h a t t h e u l t i m a t e r a t e of r e t i r e m e n t p e n s i o n f o r a c o u p l e — n o t , h o w e v e r , t o b e
p a y a b l e u n t i l t w e n t y y e a r s a f t e r t h e i n c e p t i o n of t h e s c h e m e — s h o u l d be 40s.,
i.e., t h e s a m e a s t h e p r o p o s e d r a t e of sickness a n d u n e m p l o y m e n t benefit.
The
W h i t e P a p e r p r o p o s e d a r a t e of 35s. p a y a b l e f r o m t h e i n c e p t i o n of t h e s c h e m e .
A l t h o u g h on t h e s u b s i s t e n c e b a s i s i n d i c a t e d i n p a r a g r a p h 3 a b o v e a r a t e of 4 0 s .
w o u l d s t i l l be a d e q u a t e for a r e t i r e d couple, w e b e l i e v e t h a t t h e r i g h t c o u r s e
i s to m a k e t h e r a t e of r e t i r e m e n t p e n s i o n for a c o u p l e i d e n t i c a l w i t h t h a t of
s i c k n e s s a n d u n e m p l o y m e n t benefit for a c o u p l e (see p a r a g r a p h 4 a b o v e ) , a n d w e
a c c o r d i n g l y p r o p o s e t h a t t h e r a t e s h o u l d be 42s.
A difficult q u e s t i o n a r i s e s w i t h r e g a r d to t h e d i v i s i o n of t h e r a t e of 4 2 s .
b e t w e e n h u s b a n d a n d w i f e . I f t h e t o t a l s u m is d i v i d e d e q u a l l y , t h e w o r k of
b r i n g i n g t h e n e w r a t e s i n t o o p e r a t i o n i n t h e a u t u m n of 1946 w i l l b e m u c h e a s e d
a n d c e r t a i n difficulties i n a d j u s t i n g t h e scale of m e a n s for c a l c u l a t i o n of n q n ­
c o n t r i b u t o r y . o l d a g e p e n s i o n s w i l l be a v o i d e d . O n t h e o t h e r h a n d , t h e M i n i s t e r
of N a t i o n a l I n s u r a n c e f e e l s t h a t i t w o u l d be i m p o s s i b l e to d e f e n d a r a t e of 21s.
for a s i n g l e p e r s o n l i v i n g a l o n e o n a s u b s i s t e n c e b a s i s a n d , t h a t t h e G o v e r n m e n t
w o u l d be i n a m u c h s t r o n g e r p o s i t i o n to r e s i s t p r e s s u r e f r o m t h e Old A g e
P e n s i o n e r s ' A s s o c i a t i o n , w h o a r e a d v o c a t i n g a r a t e of 30s. a w e e k for a s i n g l e
p e r s o n a t a g e 6 0 , if t h e r a t e of r e t i r e m e n t p e n s i o n f o r a s i n g l e p e r s o n w e r e
l i n k e d w i t h t h e r a t e f o r s i c k n e s s or u n e m p l o y m e n t benefit.
On t h e whole,
t h e r e f o r e , w e r e c o m m e n d t h a t t h e j o i n t r a t e s h o u l d be d i v i d e d i n t h e p r o p o r t i o n
of 26s. t o 16s. a n d t h a t t h e s i n g l e p e n s i o n e r s h o u l d receive 26s. W e m u s t ,
h o w e v e r , p o i n t o u t t h a t t h e a d o p t i o n of t h i s r e c o m m e n d a t i o n w i l l involve a n
a d d i t i o n of 7d. t o t h e w e e k l y r a t e of c o n t r i b u t i o n a n d a s u b s t a n t i a l i n c r e a s e i n
t h e u l t i m a t e b u r d e n f a l l i n g o n t h e E x c h e q u e r , a s c o m p a r e d w i t h t h e 21s. b a s i s .
8. Payment
of Unconditional
Pensions
on the A ttainment
of
Pensionable
Age.—The
B e v e r i d g e R e p o r t p r o p o s e d t h a t n o pension should be payable u n t i l
r e t i r e m e n t , a n d t h a t t o i n d u c e p e r s o n s over p e n s i o n a b l e a g e t o r e m a i n a t w o r k
a n a d d i t i o n of I s . a w e e k (2s. f o r a c o u p l e ) s h o u l d b e g i v e n f o r e a c h y e a r b y
which retirement was postponed.
T h i s r e c o m m e n d a t i o n was endorsed by t h e
White Paper.
W e r e g a r d i t a s e s s e n t i a l , i n v i e w of t h e s h o r t a g e of m a n - p o w e r w i t h w h i c h
w e s h a l l be f a c e d f o r m a n y y e a r s , t h a t a l l p o s s i b l e i n c e n t i v e s s h o u l d be g i v e n t o
workers to postpone retirement.
T h e offer of a n a d d i t i o n a l I s . a w e e k (25. for
a c o u p l e ) for e a c h y e a r by w h i c h r e t i r e m e n t is p o s t p o n e d is, i n o u r v i e w , a
t o t a l l y i n a d e q u a t e i n d u c e m e n t ; a n d i t w o u l d p r o b a b l y be n e c e s s a r y to g i v e
s o m e t h i n g of t h e o r d e ^ of 5s. f o r e a c h y e a r of p o s t p o n e m e n t t o h a v e a n y
a p p r e c i a b l e effect.
T o follow t h e W h i t e P a p e r i n m a k i n g t h e w h o l e p e n s i o n
a t t h e r a t e s n o w p r o p o s e d c o n d i t i o n a l o n r e t i r e m e n t w o u l d b e likely, i n o u r
v i e w , t o p r e c i p i t a t e i m m e d i a t e r e t i r e m e n t i n a l a r g e n u m b e r of cases o n r e a c h i n g
pensionable a g e , n o t w i t h s t a n d i n g such i n d u c e m e n t s for postponement as i t
m i g h t be p r a c t i c a b l e t o offer.
M o r e o v e r , p r e s e n t i n s u r e d p e r s o n s h a v e been
p a y i n g c o n t r i b u t i o n s i n t h e e x p e c t a t i o n of u n c o n d i t i o n a l p e n s i o n s a t 65
(60 w o m e n ) a n d t h e r e i s n o d o u b t t h a t , p a r t i c u l a r l y a m o n g v o l u n t a r y c o n t r i b u ­
tors, t h e r e w o u l d be a s t r o n g s e n s e of g r i e v a n c e if t h i s r i g h t w e r e n o w
withdrawn.
W e , t h e r e f o r e , r e c o m m e n d , a s t h e b e s t s o l u t i o n , t h e p a y m e n t of a n
u n c o n d i t i o n a l p e n s i o n of 10s. a w e e k o n t h e a t t a i n m e n t of p e n s i o n a b l e a g e ,
w i t h a d d i t i o n s o n r e t i r e m e n t t o m a k e u p t h e t o t a l r a t e t o 26s. s i n g l e or 42s. f o r
a couple.
T h i s w o u l d h a v e t h e a d d e d a d v a n t a g e of a v o i d i n g a n a n o m a l y ,
which would o t h e r w i s e arise, between persons r e a c h i n g pensionable age before
t h e s c h e m e c a m e i n t o o p e r a t i o n , w h o w o u l d r e c e i v e a p e n s i o n of 10s.
unconditionally, a n d those w h o a t t a i n e d pensionable age after the b e g i n n i n g
of t h e s c h e m e , w h o w o u l d g e t n o t h i n g u n t i l t h e y r e t i r e d . O n t h e q u e s t i o n of
e a r n i n g s by a p e n s i o n e r a f t e r r e t i r e m e n t (e.g., b y c a s u a l w o r k i n h i s old t r a d e ) ,
w e feel t h a t a m a n e a r n i n g 2 0 s . a w e e k c a n n o t be s a i d to h a v e r e t i r e d f r o m
a c t i v e w o r k a n d a c c o r d i n g l y w e r e c o m m e n d t h a t e a r n i n g s i n excess of 20s. a
week s h o u l d b e t a k e n i n t o a c c o u n t t o r e d u c e t h e i n c r e a s e i n p e n s i o n over 10s.
a week a w a r d e d on retirement.
9.
Widows'
Pensions.—In
accordance w i t h the proposals m a d e in p a r a ­
g r a p h s 4 a n d 6 above, a w i d o w w i t h a c h i l d w i l l r e c e i v e g u a r d i a n ' s benefit a t t h e
r a t e of 33s. Qd. (i.e., 26s. i n h e r o w n r i g h t and. 7s. Qd. f o r h e r c h i l d ) i n s t e a d of
29s., a s p r o p o s e d i n t h e W h i t e P a p e r , F u r t h e r , if 26s. i s a c c e p t e d a s t h e r a t e of
r e t i r e m e n t p e n s i o n for a single person, a w o m a n w i t h o u t children w h o becomes a
w i d o w a t t h e a g e of 5 0 or o v e r w i l l r e c e i v e a p e n s i o n a t t h e r a t e of 2 6 s . a w e e k .
T h e W h i t e P a p e r p r o p o s e d t h a t a c h i l d l e s s w i d o w w h o lost h e r h u s b a n d
before r e a c h i n g t h e a g e of 50 s h o u l d n o t be e n t i t l e d to w i d o w ' s p e n s i o n , s u b j e c t to
the t r a n s i t i o n a l provision t h a t a l l women m a r r i e d to insured men a t t h e commence­
m e n t of t h e n e w s c h e m e s h o u l d be e l i g i b l e f o r a w i d o w ' s p e n s i o n of 10s. a week.
W e h a v e c o n s i d e r e d w h e t h e r a n y c o n c e s s i o n s h o u l d be m a d e h e r e , b u t h a v e come
to t h e c o n c l u s i o n t h a t n o c h a n g e w o u l d b e j u s t i f i e d .
W e feel, h o w e v e r , t h a t a
s p e c i a l c o n c e s s i o n is n e c e s s a r y i n t h e case of a w i d o w w h o h a s been i n r e c e i p t of
g u a r d i a n ' s benefit a n d w h o , u n d e r t h e W h i t e P a p e r p r o p o s a l s , w o u l d lose h e r
benefit if s h e ceased t o h a v e i n h e r c a r e a c h i l d of school a g e w h i l e herself s t i l l
u n d e r t h e a g e of 50 a n d w o u l d n o t q u a l i f y f o r a p e n s i o n u n t i l t h e a g e of 60.
T h e r e is m u c h t o be s a i d f o r e n a b l i n g s u c h a w i d o w t o m a i n t a i n a home for h e r
[30981]
B 2
adolescent children w i t h o u t being obliged herself to enter the labour m a r k e t ;
a n d w e a c c o r d i n g l y r e c o m m e n d t h a t a w i d o w of 4 0 o r over s h o u l d become e l i g i b l e
f o r w i d o w ' s p e n s i o n a t t h e r a t e of 26s. o n c e a s i n g t o be e l i g i b l e f o r g u a r d i a n ' s
benefit b e c a u s e h e r y o u n g e s t o r only c h i l d h a s a t t a i n e d t h e a g e of 16 o r h a s d i e d ,
p r o v i d e d a l w a y s t h a t h e r m a r r i a g e t o o k p l a c e t e n y e a r s or m o r e b e f o r e t h e
application for pension.
10. Non-Contributory
Pensions.—The
W h i t e P a p e r p r o p o s e d Jthat t h e n o n ­
c o n t r i b u t o r y p e n s i o n s c h e m e f o r p e r s o n s a g e d 7 0 or o v e r s h o u l d be r e s t r i c t e d t o
p e r s o n s w h o w e r e a g e d 70 a n d over on t h e a p p o i n t e d d a y — s u b j e c t t o a n a d j u s t ­
m e n t of t h e p r e s e n t m e a n s s c a l e — p e r s o n s b e c o m i n g 70 a f t e r t h e a p p o i n t e d d a y
b e i n g g i v e n r e c o u r s e t o t h e A s s i s t a n c e B o a r d . W e feel t h a t t h i s p r o p o s a l i s o p e n
t o c r i t i c i s m a n d t h a t t h e r i g h t s o l u t i o n is t o g i v e a r i g h t t o a n o n - c o n t r i b u t o r y
p e n s i o n a t a g e 7 0 t o a l l p e r s o n s of 55 o r over a t t h e d a t e w h e n t h e s c h e m e
comes i n t o o p e r a t i o n . T h o s e w h o a r e u n d e r 5 5 a t t h a t d a t e w i l l h a v e t i m e t o
q u a l i f y f o r a c o n t r i b u t o r y p e n s i o n u n d e r t h e n e w scheme.
T h e a d m i n i s t r a t i o n of t h e n o n - c o n t r i b u t o r y p e n s i o n s s c h e m e a n d i n v e s t i g a ­
t i o n of i n d i v i d u a l a p p l i c a t i o n s is- a t p r e s e n t c a r r i e d o u t b y t h e B o a r d of C u s t o m s
a n d Excise, b u t pensions a r e formally a w a r d e d by local pension committees
n o m i n a t e d by local a u t h o r i t i e s . W e h a v e c o n s i d e r e d w h e t h e r a f t e r t h e a p p o i n t e d
d a y t h e a d m i n i s t r a t i o n s h o u l d be t r a n s f e r r e d f r o m t h e B o a r d of C u s t o m s a n d
Excise to the Assistance Board, b u t have reached the conclusion t h a t i t would be
b e t t e r to p o s t p o n e a n y t r a n s f e r u n t i l t h e t i m e comes t o t r a n s f e r t h e p u b l i c a s s i s t ­
a n c e f u n c t i o n s of local a u t h o r i t i e s g e n e r a l l y to t h e A s s i s t a n c e B o a r d .
11. Blind Pensioners.-Tlh.e
W h i t e P a p e r p r o p o s e d t h a t t h e s y s t e m of p a y ­
i n g n o n - c o n t r i b u t o r y p e n s i o n s t o t h e b l i n d a t t h e a g e of 4 0 s h o u l d be d i s c o n t i n u e d
s u b j e c t to t h e e x c e p t i o n t h a t p e n s i o n s a t t h e i n c r e a s e d r a t e s h o u l d be p a y a b l e t o
p e r s o n s a l r e a d y i n r e c e i p t of b l i n d p e n s i o n s on t h e a p p o i n t e d d a y . W e feel t h a t
t h e r e w o u l d b e g r e a t difficulty i n b r i n g i n g t o a n e n d i n t h e f o r t h c o m i n g i n s u r a n c e
measure the long-standing arrangement under which blind persons a r e entitled
t o p e n s i o n s a t t h e a g e of 40, b u t w e r e c o m m e n d t h a t t h e p o s i t i o n of t h e b l i n d
s h o u l d be c o n s i d e r e d a s a w h o l e w h e n t h e f u r t h e r l e g i s l a t i o n to d e a l w ith t h e
p r o p o s e d e x t e n s i o n of n a t i o n a l a s s i s t a n c e i s b e i n g f r a m e d .
W e think, however,
t h a t t h e o p p o r t u n i t y s h o u l d be t a k e n on t h e i n t r o d u c t i o n of t h e n e w i n s u r a n c e
scheme t o r e m o v e t h e p r e s e n t a n o m a l y w h i c h r e s u l t s i n i n s u r e d b l i n d p e n s i o n e r s
b e i n g e n t i t l e d to b o t h b l i n d a n d old a g e p e n s i o n s b e t w e e n t h e a g e s of 6 5 a n d 70.
7
12. Rates of Contribution
and of Income and Expenditure.-AppeTided
to
this m e m o r a n d u m are tables p r e p a r e d by the Government A c t u a r y w h i c h illus­
t r a t e t h e effect of o u r p r o p o s a l s a n d of t h e r e d u c t i o n of r a t e s of i n t e r e s t f r o m
3 p e r cent, t o 2f- p e r cent, o n t h e w e e k l y r a t e s of c o n t r i b u t i o n by w o r k e r s a n d
e m p l o y e r s a n d on t h e i n c o m e a n d e x p e n d i t u r e of t h e s c h e m e .
T a b l e I s h o w s t h e r a t e s w h i c h , i t is p r o v i s i o n a l l y e s t i m a t e d , w o u l d be p a y a b l e
w h e n t h e full scheme h a d come i n t o o p e r a t i o n , i n c l u d i n g t h e c o n t r i b u t i o n p a y a b l e
u n d e r the I n d u s t r i a l I n j u r i e s Scheme.
T a b l e I I show-s f o r C l a s s I h o w e a c h of t h e p r o p o s e d d e p a r t u r e s f r o m t h e
W h i t e P a p e r affects t h e r a t e of c o n t r i b u t i o n s .
T a b l e I I I s h o w s f o r 1 9 4 8 , 1958 a n d 1968 t h e levels of i n c o m e a n d e x p e n d i t u r e .
13. I t w i l l be seen t h a t , if a l l o w a n c e is m a d e f o r t h e effect of a r e d u c t i o n i n
t h e r a t e of i n t e r e s t f r o m 3 p e r c e n t , to 2 f p e r cent, t h e effect of a d o p t i n g all o u r
p r o p o s a l s is t o r e q u i r e t o t a l w e e k l y c o n t r i b u t i o n s p r o v i s i o n a l l y e s i m a t e d a t t h e
f o l l o w i n g r a t e s :—
;
Class I
Class I I
Class I V
Insured M a n
5 5 . 2d.
5s. %d.
4s. 8d.
Employer
4s. 5d.
Insured Woman
4s.
4s. M.
3s. 8d.
Employer
3s. 5d.
W e t h i n k t h a t t h e s e c o n t r i b u t i o n s a r e t o o h i g h . O n t h e o t h e r h a n d , w e believe
t h a t t h e i n s u r e d m a n in C l a s s I could r e a s o n a b l y be e x p e c t e d to p a y a s m u c h as
4s Qd., h a v i n g r e g a r d t o t h e economies i n o t h e r d i r e c t i o n s w h i c h t h e n e w s c h e m e
will enable h i m to make, a n d t h a t insured women in Class I a n d persons in other
classes c o u l d p a y c o r r e s p o n d i n g l y r e d u c e d c o n t r i b u t i o n s . A c c o r d i n g l y , o n t h e
a s s u m p t i o n t h a t the C a b i n e t accept our recommendations for t h e p a y m e n t ot
u n e m p l o y m e n t benefit w i t h o u t l i m i t a t i o n a n d of r e t i r e m e n t p e n s i o n s to s i n g l e
persons a t t h e r a t e of 26.s., w e t h i n k t h a t t h e p o s s i b i l i t y s h o u l d be e x a m i n e d of
securing the necessary reductions b y —
(i) e x e m p t i n g t h e i n s u r e d p e r s o n f r o m a n y c o n t r i b u t i o n t o w a r d s t h e h e a l t h
s e r v i c e s c h e m e b e y o n d t h e \\d. a w e e k w h i c h p e r s o n s i n s u r e d u n d e r
e x i s t i n g schemes already p a y ; and
(ii) m a k i n g u p t h e b a l a n c e of t h e r e d u c t i o n s b y a n i n c r e a s e d E x c h e q u e r
p a y m e n t t o t h e f u n d t o c o m p e n s a t e for t h e i n c r e a s e i n c o n t r i b u t i o n s
r e s u l t i n g f r o m t h e l o w e r i n g of i n t e r e s t r a t e s .
A . G.
Gtvydyr
House, S.W. 1.
30th November,
1945.
APPENDIX.
TABLE
I.
Women.
Men.
Class I .
Class I.
Class
Clas s I I . Class
Clas s IV
IV..
Clas s I V .
Clas
Classs I I . Class
Insured
Person.
Insured
Employer.
Person.
and
d over
over—
—
Ages
Age s 1 8 an
F o r I n s u r a n c e benefit
benefitss
....
F o r H e a l t h Servic
Servicee ..
F o r I n d u s t r i a l I n j u r i eess
..
....
Schemee
Schem
Tota
Totall contributio
contributionn
s.
4
0
d.
14
84
8.
0
4
0
4
5
2
4
5
g. d.
3 10
0 10
s. d.
4 11
0 10
d.
3 114
14
o
5
4
9
8
Tota
Totall c o n t r i b u t i oonn
7
4*
2
5
0
14
0
24
o
3
2
2
0
3
0
14
3
4
0
3
5
3
0
24
9
3
2
0
0
6
4
6
o1 114
44
2 10
6
0
2
2
6
o
s. d.
4 1
0 8
s.
3
0
d.
0
8
4
3
8
9
i
i
j
o1 104
14
2
0
6
6
2
3
0
0
1 1 10
6
10
2
4s. 8d.
5s. l i d .
TABLE
Rates
d.
04
d.
24
64
7s. 5d.
2
0
Adult
s.
3
s.
3
0
9s . id.
Age
Agess 1 6 an
and
d 17
17—
—
F o r I n s u r a n c e benefit
benefitss
....
F o r H e a l t h Servic
Servicee ..
F o r I n d u s t r i a l Injurie
Injuriess
Scheme
Employer.
II.
of Contribution
for
(including Industrial Injuries
Class
I.
Insurance).
Men.
s.
(A) W h i t e P a p e r c o n t r i b u t i o n r a t e s
...
6 11
(B) A d d i t i o n s f o r c h a n g e s i n benefits—
H i g h e r retirement pension rates*
...
...
E x t e n s i o n of benefits t o w i d o w s . . ,
...
...
I n c r e a s e i n r a t e s of benefit for u n e m p l o y m e n t
a n d sickness
...
...
...
...
...
U n l i m i t e d d u r a t i o n of s i c k n e s s benefit a t f u l l
rate
...
...
...
...
...
...
U n l i m i t e d d u r a t i o n of u n e m p l o y m e n t benefit . . .
E n l a r g e m e n t of benefits u n d e r t h e I n d u s t r i a l
Injuries Insurance Schemet
...
...
...
...
d.
d.
lOf
f
8
3
2
^
s.
d.
5
5
s.
1
d.
5
s.
7
d.
7
5
*2
4^
7
2
-
(C) O t h e r a d d i t i o n s , f o r r e v i s i o n of a c t u a r i a l
Women.
d.
2
s.
2
d.
0 -
basis—
A l t e r a t i o n i n r a t e of i n t e r e s t f r o m 3 p e r
to 2 f p e r cent.
L o w e r m o r t a l i t y , h e a v i e r s i c k n e s s , &c. . . .
cent.
...
4
4
3
4
s.
^
9
d.
8
-
7
* Of t h e s e s u m s 6%d. ( m e n ) and 24d. (women) are d u e to t h e s u b s t i t u t i o n of 26*. and 16s. for
21s. a n d 21s. T h e balance is d u e t o t h e increase in t h e W h i t e P a p e r benefit r a t e s from 20s. (15s.)
to 21s. (21s.)
f Cn t h e basis of I n d u s t r i a l Injuries contributions of 8d. ( m e n ) a n d 6d. (women).
4
TABLE
National
Insurance
and
Assistance:
III.
Estimated
1 9 5 8 and
Estimated
National
Income
and
Expenditure,
1948
1968.
Expenditure-—
Insurance:
1948.
Retirement pensions and widows' and widowed
m o t h e r s ' benefits
......
...
O t h e r i n s u r a n c e benefits a n d cost of a d m i n i s t r a t i o n
Total insurance expenditure
National A ssistance :
Assistance
pensions
pensions)
Other assistance
(including
on
national
...
...
insurance
...
millions.)
352
449
235
242
492
587
691
30
9
34
9
32
9
39
43
41
531
630
732
331
21
331
21
331
21
179
278
380
531
630
732
and
Estimated
Income :
R e c e i p t s f r o m c o n t r i b u t i o n s of i n s u r e d p e r s o n s a n d
employers*
I n t e r e s t on e x i s t i n g f u n d s f
...
...
...
...
Exchequer charge for n a t i o n a l insurance a n d assist­
ance
Total Income
1968.
non-contributory
...
Total assistance expenditure
Total expenditure
assistance
...
(
273
219
1958.
£
* E x c l u d i n g c o n t r i b u t i o n s t o w a r d s t h e c o s t of t h e N a t i o n a l H e a l t h S e r v i c e ,
f I t i s p o s s i b l e t h a t , a s t h e r e s u l t of f u t u r e c h a n g e s i n t h e l e v e l of i n t e r e s t r a t e s ,
a s s u m e d u n i f o r m i n c o m e of £ 2 1 m i l l i o n s m a y n o t b e r e a l i s e d t h r o u g h o u t t h e p e r i o d .
the