The Cabinet Secretaries' Notebooks (CAB 195/8)

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Public Expenditure

Public Expenditure

H.G. 

Vote on Account, despite all pruning, shows a rise. Mainly due to defence etc. But £135 increase on Social Services. Will be pressure on o.a.p.'s & I have worked out scheme with M/N.I.
Basic for over 70 – fr. 26/- to 30/- for men: & 42/- to 50/- for both. Also increased increment for staying on after 65 – 1/6 vice 1/- p. 6 months. Giving £3.15.0 p. wk. for married couple, man havg. worked until 70. Part of policy to get people to work to later age. Permitted earnings limit shd. equally go up to £2 p. wk.  Child allowce to 7/6 – for widowed mother: not yet agreed. This wd. all cost £40 m. in full year (20 in 1st).  Makes rise in S.S. expre next year to £50/60 m.
N.H.S. Last year £393 m. This year: estimate was £423. I asked Dpts. to get below 393.  Came to concln this was unattainable….. After deadlock, E.B. suggd ceiling on N.H.S. as for food subsidies – at £400 m.  I'm ready to accept that, if a final ceiling.
Health Ministers wd. then make charge for teeth & specs. but not for prescriptions.

H.M. 

P.M. advises Cabinet to accept this position.

E.B. 

Believe this will command genl. public support.

H.M. 

General power to charge wd. be wise.

J.G. 

I wdn't make charges variable by Regns.

H.M. 

Promised to save £10 m. on hospitals this year. Can't do it next year.
If ceiling is to be m'tained, I shd. rely on charges to provide addl money needed for hospitals.
Principle: people shd. pay when well. Charges ought not therefore to fall on cases where people are ill i.e. g.p. or hospitals. Glad therefore tht. prescriptn charge has bn. dropped. Specs. & teeth are in the main needed by people in health. Charge for dentures wd. shift emphasis to conservation work. That wd. be a good thing.  Specs:  no positive argumt. in favour of charge but children will be exempt, and free provn in hospitals will continue.
O.A.P. Hope existg. supplemn will be m'tained over & above new rates.
Final decn re charges needed to-day if charges to be introduced after Budget. 12/4 = date for introdn of Bill: & charges come into force from then.

A.B. 

Prof. advice has bn. v. N.H.S. throughout. Ignore such advice (e.g. fr. dentists).
Early diffies of estimatg. All resolved by 1950/51: when exp're came w'in estimates – despite the decision not to apply charge for p'scriptn & despite increased wages due to Whitley awards. 
When I left M/H. there was surplus in hand. V. remarkable accomplishment.
In period of rising costs, ceiling will be a drag.
It's re-armament, not o.a.p. scheme, which makes this cut necessary.
Must we do this thing for £23 m. – in a Budget of £3.000 m. or so.
Better far to cut Defence Estimate: for the money won't be spent because shortage of raw materials. You will end with a surplus, & sacrificed N.H.S. m'while.
Politically v. unwise. I'm not satisfied tht. reasons behind this attack on N.H.S. is financial.  3rd attack on it. I can't support Budget on this basis. Nor the Bill – wh. wd. have to be carried by Tory votes. Violation of every pledge to Party: re-armament was to mean foregoing new advantages, not giving up existg. ones.

H.M. 

P.M. supports H.G. and E.B. on this.
We must recognise H.G.'s diffies. We all want o.a.p. improvements.
I don't accept view tht. charge for some facilities is breach of Socialist principle.
Ministers concern concur. I think we shd. back H.G.

J.G. 

This will be a set-back. Will have pol. repercussions. Another principle will be breached – uniform rate of benefits, i.e. no increase in o.a.p. w'out increases in other benefits. This means o.a.p. can in future act as pressure group.
 i)   For this year £400 m. ceiling wd. be accepted by me. But don't want Govt. to be committed to such a ceiling for years ahead because rising costs.
 ii)  Legn on charges will be awkward. And we don't want to do it by way of Regn making power. What use wd. a future govt. make of such a power?

E.S. 

I was against prescriptn charge. A.B. adopted it.
N.H.S. is best propaganda for Labour. Mustn't spoil it. But people will not be upset by charges for teeth & specs. I don't support A.B. on this.
O.a.p.  4¼ m. qualified. Only 900.000 supplemented. Increases will apply to 3¼ m. Widowed mother allowce to go to 40/- (one child) and 2/6 for each further child.

C.E. 

My views are those of J.G.

H.W. 

Diff. to accept view tht. N.H.S. cut is necessary to secure o.a.p. concessn.
It is really due to re-armament. We accepted £4.7 defence p'mme w'out much financial thght. Doubt wtr. we shall spend the money effectively. The £4.7 was not related to need or to what we cd. afford.
This is an issue of principle. I agree with A.B.  U.S. headlines will be: "Britain throws over Welfare State". And will play into Tory hands.

E.Sh. 

"Light-heartedly accepted re-armament" (H.W.)  V. serious statement.
Can't say afterwards tht. Cab. didn't take considered decision.
A.B.'s attitude  i) assumes ceiling can never be imposed on N.H.S.
Suppose defence still at £780 m., shd. we never have queried N.H.S. expenditure.  We were doing so.
A.B.'s warnings of pol. reactions are overdone. Wolf, wolf.
H.G. has to find money in v. diff. circs.  Are we to say to him: not  a penny off the N.H.S.

T.W. 

Accept H.G.'s plan: so long as it's presented in such a way as not to breach our principles.

H.D. 

I support H.G.'s plan. O.a.p. advantage will outweigh disadvantage of these 2 charges – in public opinion.

A. 

Agree with H.D. Must be a limit for time being – not necessarily for ever.

G.A.I. 

Believe there is a case for increased w. pensions. But I agree not to press that, in view of natl need & circs.  Some small concessns made.

J. 

Agree with H.D.

G.T. 

I have had to add 1d to school meals – to avoid cutting into education standards, by modifying stat. duties of l.a.'s.
Accept need to find the money. These 2 charges cd. be defended.

A.V.A. 

Support H.G.

H.M. 

Genl. view of Cabinet: in favour of H.G.

Taken from C.M. 22(51) - Meeting held on 22 March 1951.