§ THE CHANCELLOR OF THE EXCHEQUER
, in moving for leave to bring in a Bill to consolidate and amend the Law relating to Friendly and other Societies, said, it would be in the recollection of the House that the subject was mentioned in the Speech from the Throne, and he might say that at the time Her Majesty was advised to make that reference in her Speech, the Government were in hopes that the Report of the Royal Commission, which had been sitting on the subject for some time, would have been presented in sufficient time to have enabled a Bill to be prepared and brought in before Whitsuntide, so that they might have had the advantage of getting the opinions of the great friendly societies and of the public generally in the course of the Recess, and thus have been able to proceed with greater advantage afterwards. But circumstances had delayed the presentation of the Report, and so rendered it impossible to prepare the Bill within the time originally intended. He hoped, however, there was still time to make progress with it, and he would therefore state the course which he thought now it would be the most convenient to pursue in order that they might deal satisfactorily with the subject; and in doing so, he would urge the House to afford every possible facility for dealing with a matter of such great importance as the one under notice. The question was one which affected a very large body of the working classes and the lower middle classes of this country. From the Report that had been presented, it would be seen that there were somewhere, probably, about 4,000,000 of persons who were actually members of different friendly societies besides an equal number who might be said to be collaterally connected with them; and the sum of money involved was not less than probably, £11,000,000 or £12,000,000. The matter was one which affected and had a close connection with the general welfare of the working classes of the country, and very closely bore upon the habits of providence, and the excellent habits connected with those of providence, which they desired above all others to cultivate amongst the people. It was, therefore, 1207 a matter which had for a long time been one of interest to the Parliament of this country. For the greater part of the last century it had been the habit of Parliament to legislate with a view to encourage societies of the class, and the effect of the legislation which had taken place, and of the attention brought to the subject, had been to develop this great system. Restriction after restriction had been removed, and facilities after facilities had been granted, and there was no doubt that an enormous advance had taken place in what might be called the science of providence amongst the people. But at the same time that the system had been developing itself, certain inconveniences connected with it had also been developing themselves. In the first place, it had to be observed that the general law had been very materially altered since the time when special legislation was necessary for friendly societies—without which they could not have been formed and carried on their business on the footing on which it would now be possible for societies to carry it on if they chose to form themselves into joint-stock companies and carry on business on the footing of companies. Moreover, many restrictions that were placed upon them through the jealousy of Parliament—restrictions placed, for instance, upon societies which might be supposed to have political or mischievous objects in view—had been taken off and a much greater freedom and latitude allowed. On the other hand, there were a large number of other kinds of societies besides those properly called friendly societies, which had come into existence; such, for instance, as the industrial provident societies, loan societies, trade societies, and others which had had different Acts passed more or less bringing them into connection with the system. That system, which had been in force of late years, had been to a certain extent, one of Government patronage—that was to say, there had been a registration office, at which the promoters of those societies had been called upon to register them, and in that way obtain a certificate from the Registrar which gave them the advantages of the law. The result of that system had been that an impression had been created—an erroneous impression, but one by no means unnatural—that societies so endorsed by the certificate of 1208 the Government Registrar were in some manner approved by the Registrar himself, and that had led many to believe that, though the Government had not guaranteed them, they might at all events be regarded as resting on a sound and good basis. In point of fact, however, the Registrar had no power of satisfying himself that the societies coming to him for registration were sound or good, and even when he had reason to think their rules, as presented to him, were satisfactory, he could not compel the societies afterwards to observe them. Indeed, it often happened that societies had fallen away from those rules, and that after having obtained the certificate of the Registrar, they had gone into bad ways, and great disappointment had been the consequence. They could easily understand that just in proportion as the encouragement of providence was good, and as the well managed societies were a great engine of good by encouraging providence, so disappointment, and the failure of societies in which people had put their trust, must necessarily act badly, because they rather discouraged people from contracting provident habits. It became a serious question, therefore, how far they should go in a direction which might probably encourage false expectations without being able to see that those expectations were fulfilled. He thought it was in the year 1870, that the late Mr. Tidd Pratt, who had been the first Registrar of Friendly Societies, died, and at the time of his death the attention of the Government was called to the fact that a very large proportion of the societies which had been duly certified were believed by Mr. Tidd Pratt himself to be in a very unsatisfactory condition. The then Chancellor of the Exchequer (Mr. Lowe) considered the Government was doing what was really a mischievous thing in sanctioning a system of registration which was illusive and likely to cause false ideas amongst the people; and the remedy he proposed was to introduce a Bill, the object of which was to abolish the office of Registrar and provide for something in the nature of open registration—that was, to allow all societies to register, provided they fulfilled the conditions which would entitle them to obtain a certificate. When that Bill was proposed, many friends of friendly societies were alarmed, and 1209 thought that the passing of such a measure would be prejudicial to the societies; and they consequently applied to the Government to issue a Royal Commission upon the subject. That Royal Commission was appointed; it had sat for somewhat more than three years, and had recently presented a Report which contained a large mass of information and evidence upon the subject, in fact, almost all the materials required for forming a judgment upon it. In consequence of those inquiries, it was desirable that they should now terminate the state of abeyance in which the whole system, had been kept for some time. Besides, it was all the more necessary to do so as soon as possible, for it could not have escaped the attention of hon. Gentlemen that throughout the country there was great and increasing anxiety manifested to try and improve these societies. In the first place, these societies were doing a great deal to improve themselves, and he thought that anyone acquainted with the facts, in common with himself, must express his admiration of the spirit in which some of the great bodies, and especially the Manchester Unity of Oddfellows, were endeavouring to improve the system of which they were leading examples. That great society had a sort of Parliamentary constitution of its own; the members met in their separate lodges, and in their Annual Moveable Committee discussed most freely the laws which bound the union and affected the different lodges. They faced, too, with great courage—which did them the utmost credit—every question that bore on their position and prospects. A more striking instance of that could not be given than the manner in which the Unity had recently undertaken an actuarial inquiry into the solvency of their different lodges, and boldly and honestly brought out to the world the rather disagreeable fact that the lodges, taken altogether, showed a large deficiency of assets as compared with their liabilities—a deficiency of upwards of a million of money. Well, when they saw a body of men coming forward and disclosing disagreeable incidents of that character, and that with a view of putting themselves on a footing of soundness, they could not help feeling that there was a spirit abroad which deserved to be encouraged, and which augured well for 1210 the cause of progress. He did not hesitate to say that if there were no other societies than the Manchester Unity, the Foresters, and some others of a similar character, including some of the large country societies, they might be safely left to work out their own salvation. But there were other societies of a different character, which appeared to require a different treatment. The greatest interest was now felt in different parts of the country in the establishment and improvement of friendly societies, and it seemed only right that information and suggestions should be supplied for the guidance of those who wished to aid in forming sound and useful societies for their own district, the time being well adapted for dealing with the question. In order to show that the present law and system were not satisfactory, he would refer to a short passage in the Report of the Commissioners. It was there stated that the system of central registration had so failed of its object that less than one-half of the existing societies were registered, and less than one-third afforded the most elementary information—namely, that which referred to the number of members. He would now proceed to speak of the principles on which he thought they ought to proceed in legislating on the subject, and the first question was, what could they do in that way? It was obvious they must abandon the old system of a central authority, for what could one man do for the guidance of some 22,000 societies, scattered all over the country in remote districts, towns, and villages. That system had failed. The first principle which he would lay down was that they ought to interfere as little as possible with the voluntary action of those who were managing these societies. The truth was that friendly societies were excellent in themselves, but were doubly and trebly excellent in that they were the result of the voluntary action of those who belonged to them; and even although there might be in many cases a better system of management than that which was adopted; although some of the proceedings might be foolish or inexpedient; still it was better that the societies should not be governed as well as they might be than that Parliament should do anything in the way of governing them beyond what was 1211 absolutely necessary. Therefore, he would say, let them, in legislating for these societies, endeavour to give them fair play, and let them leave them to manage as far as possible for themselves. But in order that they might have fair play, there were two things which they wanted—they wanted proper facilities for action, and they wanted, above all proper information. They should, therefore, he thought, legislate with a view of supplying the members of the different societies, and those who took an interest in those societies, with such information as would enable them to form an accurate judgment both as to what was being done and as to what ought to be done. For instance, take the cardinal question of the tables on which alone these societies might safely be be founded. It was quite evident that it was mathematically demonstrable that, if a society was founded on a system of tables which was inaccurate, and promised benefits from a rate of premiums which was insufficient to produce those benefits, there must, to a certain extent, be failure. On the other hand, it was almost impossible for the general run even of educated persons, and quite impossible for the mass of those who belonged to those societies, to judge, on the face of the papers which were laid before them, whether this or that society was sound or not. There could be no doubt that a very large number of societies were formed on very inadequate data, and if hon. Gentlemen would look at the chapter of the Report which related to the subject of premiums, they would see demonstrated by a distinguished actuary, who was a member of the Commission, how societies were constantly misled by adopting tables which might be correct under some circumstances, but were not correct under others. For example, if a society comprised amongst its members a large number of those who pursued dangerous trades, and who were taken without medical examination, although they might have adopted tables prepared under high authority, yet those tables would lead to ultimate insolvency; whereas, if adopted in the case of agricultural labourers, the society might be very successful. Notwithstanding that difficulty and danger, however, the amount of information now collected with regard to sickness and death was 1212 such that, with a very moderate degree of attention, it would be quite possible to prepare tables which would be very useful to different classes of societies, and he thought the Government would not be in any way overstepping its proper functions if they were to prepare and publish tables containing such information, not, of course, compelling societies to adopt them. That was one of the objects contemplated by the present Bill. Another thing of importance was, that there should be some organized system for the valuation of assets and liabilities. Societies might adopt what appeared a priori the most promising tables in the world, but the only way of ascertaining whether they were sound was by a valuation; and there must be a periodical valuation in order to ascertain whether or not the tables which were used were satisfactory. That was a principle which was acknowledged and laid down by most distinguished actuaries who had taken an interest in that matter, and one which had been prominently put forward and recommended with the utmost authority by the Manchester Unity and other great societies. He thought, before quitting that question, he ought to say a word on the subject of insolvency in order that the meaning of the phrase should be clearly understood, and to prevent that uneasiness which might be created by the supposition that such great bodies as the Manchester Unity might be regarded as insolvent. If a society having 1,000 members, for example, adopted certain tables, invited certain payments, and promised certain benefits, it was clear that if the payments were insufficient, and if no new members came in, it would ultimately fail to fulfil its engagements. If, however, any considerable number of young members were brought in, the fact might be for a time concealed, because the money of the young men would go to pay the allowances to the older men, who were coming on the society's funds. If therefore the society went on increasing its numbers, it might postpone or suspend its insolvency for an indefinite time. Such a society was not, however, in a healthy condition, and when the time came that young men refused to join it, the older members would be deprived of the benefits that had been promised them. But if such a society dis- 1213 covered by a periodical valuation that some change was necessary, it might by reducing its benefits and increasing its payments to a small amount, or by making a levy upon its members, redress and retrieve its position. And the sooner a society found out its mistake and had the courage to apply the remedy, the sooner that society would be placed upon a sound footing. A proposal had been made that the Government should take some of the work of the friendly societies upon itself, and the idea had found favour with some that the Government should undertake the conduct of the sick business. He believed, however, that half the benefit of these societies would be lost if the administration were taken out of their hands. The Government, moreover, would be open to so much fraud and imposition that it would be dangerous, if not impossible, for them to undertake such a duty. But with regard to another class of business—the insurance on death—that was a matter with which the Government might fairly deal. At present the Government did grant insurance for sums payable on death, but the amounts did not go low enough, and it was very much to be desired that the system of Government life insurance should be brought more within the reach of the working classes. He spoke just now of one of the particulars in which the Government might give assistance—that was, by correct tables and by the putting out forms of valuation, which might enable persons to understand them. Now, that was an important point, because at present the societies were almost all in the habit of publishing accounts of some sort; but they published them in various forms, so that it was difficult to make out whether they were in a solvent state or not. He thought, therefore, the Government might fairly require the use of prescribed forms of valuation—forms of account which the officers of the societies would fill up for themselves, and which forms should be of such a nature that anybody who had a moderate acquaintance with the subject should be able to form an accurate judgment of the condition of the society. Well, then, if they gave the societies power to establish themselves on a sound basis; if they gave them forms of account to show whether they were solvent, and were carrying on 1214 their concerns satisfactorily; and if, at the same time, they made proper provisions for separating the different funds, so that the funds—say of the life insurance department—should not be devoted to the sickness department, or to management, or some other purpose, which was rather a common practice; all they had to do was to take care that these facts were brought fairly before the members of the societies, and of the public, who had been watching the proceedings of the society. Well, they held it impossible to do that in a satisfactory manner under a system of purely central registration, and the Commissioners recommended that in addition to a central registration office there should be a system of district registration. The great object was to provide that the societies which were carrying on their business in different parts of the country should register themselves, and should register certain particulars of all their proceedings; as to their numbers, as to their funds, as to the tables they adopted, and also as to the valuation of their assets and liabilities—that all these particulars should be given in the registry in the locality. It would be necessary to absorb the separate central offices of Scotland and Ireland, and to have one central office for the whole of the Kingdom. At present a society might be registered in England, and might carry on business in Ireland without being registered there. In such cases a member seeking redress had to come to England. The Bill proposed to divide the whole Kingdom into districts, each of which would have a deputy Registrar. They did not propose in the Bill to set out the whole system in detail; but they proposed to leave it to a Department of the Government—probably the Treasury—to parcel the country out into districts. They proposed that there should be something like 40 or 50 districts, connected perhaps with the County Courts, and that there should be paid officers appointed, whose remuneration would not, however, be very high, and whose duty it would be to receive the registrations in the different districts in which they were placed, and to furnish Returns to the central office in London, and that there should be a list placed in some convenient spot in these districts where it would be accessible to anyone who desired to inspect it. They 1215 also gave power to the central Registrar to make certain regulations which should be laid before Parliament. They proposed to meet some of the difficulties which had been suggested by the members of friendly societies themselves; but into that part of the Bill he would not go into any great detail at that hour. They proposed to give an appeal when registration was refused, to grant certain advantages in the way of holding land, and to grant incorporation in certain cases where it might be desired. But, the main principles of the Bill were to strengthen and improve the machinery of registration; to publish correct tables for the use of those societies; and to encourage and, as far as possible, to enforce a system of periodical valuation. He was afraid hon. Members, when they came to look at the Bill, might think it rather a long one; but if they referred to it, they would find that it in reality greatly abbreviated the law, for its provisions related to all societies whose objects were of a friendly character, such as industrial and provident societies, charitable societies, scientific and literary societies, trades' unions, and loan societies. The Acts of Parliament relating to these and kindred societies comprised no less than 180 clauses, and the Government now proposed to consolidate these statutes into the 80 clauses in the Bill. Of course, it would be possible for the House to legislate upon the whole question, or to omit from the Bill those portions which referred to any particular class of societies. With regard to burial societies, it might be as well that he should say a word or two. A great deal of public attention had been drawn to the large burial societies. These societies had, indeed, constituted one of the chief difficulties in the scheme, because it was in connection with them that the greatest amount of fraud and cruelty had been found to exist. He did not mean to deny that some of those societies might be well managed; but the evidence adduced before the Commission showed that they, in too many instances, inflicted great injustice and cruelty upon the more helpless classes of the poor. Indeed, it had been stated with authority, that not one in eight of those who subscribed to them derived any advantage from their subscriptions. The collector of the society received his payment in proportion to the number of 1216 persons he brought into the society, and the consequence was that the collector called for some time, and then neglected to call again, and the person insured thus lost all benefit in the society. Restrictions had been introduced into the Bill which they hoped would put a stop to some of the evils of this system of collection. Another point of great importance and delicacy in connection with these burial societies was the question of insurance of infant life. They had reason to believe that the insurance of infants led directly to great carelessness about infant life, to say the least of it, and there were districts mentioned in the Report of the Commissioners, which would show that where these burial societies were in most extensive operation, there infant life was lamentably shorter than in other places. They therefore proposed to prohibit the insurance of any infant below three years, and also to impose some restrictions on the insurance of children above that age. Without going further into the details of the Bill, he would just indicate the mode in which it would be best to legislate upon the subject. He was quite aware that this was a subject upon which they were anxious to legislate quickly; but it was of still more importance that they should legislate carefully, and that they should carry the feeling of the country with them. Nothing, in his opinion, would be more unfortunate than to pass a crude and hastily prepared measure on a subject of great interest without sufficient consideration. There was a large amount of work before them. The Bill contained 80 clauses, and though a good deal of it was not new, and might be accepted without much discussion, still if they got into Committee, and many Amendments were proposed, it would be difficult to carry it through this Session. On the other hand, to refer it to a Select Committee would scarcely be satisfactory, and what he proposed to do, therefore, was this. He hoped that the Bill would be in the hands of hon. Members in the course of two or three days. He proposed, if there was no general objection, to take the second reading on Monday the 22nd, and he would propose to go into Committee at some short distance of time from that. He should ask hon. Gentlemen, who took an interest in the subject, to communicate with him as to 1217 any alterations or suggestions that they might have to make upon the Bill. That was the course pursued by Mr. Sotheron Estcourt, when he brought in and passed successfully the last Bill on Friendly Societies. Mr. Estcourt was in the habit of seeing at his house gentlemen who took an interest in the subject, and there the matter was discussed, and Amendments put into the Bill, which made it easier to go through Committee. If, however, there were questions on which they could not agree, and upon which much discussion would come, it would be necessary for the Bill to stand over for another year. He was sanguine that hon. Members of the House would give him every assistance, and he would again say that if gentlemen would communicate with the promoters of the Bill, privately, out of the House, a great deal of time would be saved, and aid given to the passing of the measure. He could not help saying that he attached enormous importance to dealing with these and similar questions. It was impossible not to feel, when they were brought to inquire into subjects of this kind, in a melancholy degree how much good power was running to waste in this country. There was a system which if only a little amended, would enable the masses of the people to support themselves. Large sums of money were subscribed which, if administered on a sounder basis, would be sufficient to raise the masses of the people out of the sink of the Poor Law. There were large employers who were desirous for their own sakes, and out of benevolent motives, to assist workmen out of an unfortunate pit-fall, which they were unable to do under the present law. His own conviction was that if they could establish a sound and trustworthy system of registration of these societies, and if they could accompany it with a stricter administration of the Poor Law, and a fairer adjustment of wages, it would be for the benefit of the employer, would effect a saving of the poor rate, and enable the employer to assist his workpeople to provide for themselves; and in this way it would be of the greatest advantage to the whole country; and he felt that the first steps were those which they were now asking the House to take; for if they had a good system of provident societies, the rest might follow, and they would have a very great improvement 1218 in the condition of the people. He trusted that the House would accept the Bill in the spirit in which it was offered; and although it was one which undoubtedly might involve somewhat complicated machinery, and certainly would involve machinery which would be somewhat costly to Government, still it would be for objects well worthy any small expense that they might incur, and one which would be of the very greatest advantage to the country. The right hon. Baronet concluded by moving for leave to bring in the Bill.
§ MR. GOLDNEY
said, he rose with some reluctance, because he felt that it was inexpedient that any long discussion should be held upon the proposals of the Bill, until hon. Members had had an opportunity of seeing the measure in print. He entirely agreed with the Chancellor of the Exchequer that it was very desirable that these societies should be left to themselves as much as possible; but, at the same time, he thought that some assistance beyond that indicated by the right hon. Gentleman should be afforded them on the part of the Government. The right hon. Gentleman had gone into some little amount of detail respecting the existing state of those societies, and it appeared from his statement that some 4,000,000 inhabitants of the United Kingdom were members of friendly societies, while their aggregate property amounted to about £12,000,000, giving an average of about £3 for each member. He regretted that he could not find in the speech of the right hon. Gentleman that he held out any hope of affording means of raising the position of the members, so that on their being overtaken by sickness they should not fall back from the state of independence they had been striving for. All the assistance that the Chancellor of the Exchequer appeared inclined to lend them was to relieve them from the expense of registration; and he did not find in the statement of the right hon. Gentleman any encouragement or advantage corresponding to that which the Government gave in abating from a person's income tax a sum equal to one-sixth of the premium on his life insurance. Under the present system the subscribers to these societies were sometimes left in doubt whether their efforts at providence were likely to benefit most themselves, or 1219 merely reduce the poor-rates by affording them a small amount of relief in sickness and misfortune. He wished that the Government should take charge of the funds of these societies and return them a rather larger interest for their money. The Government would certainly confer a benefit on such societies by supplying tables prepared by skilled actuaries, and based upon well-ascertained statistics, which would show members of those societies at a glance what they should pay and what they ought to receive in return for their subscriptions, a proceeding of which he approved; but he thought some means might have been provided for encouraging the association with such societies of local gentlemen of position who would take an interest in their affairs, and help in their discussion and administration. In his own county, that had been done by Mr. Sotheron Estcourt, a gentleman who had established a large society in which the smaller ones had become absorbed, and there had been no instance of failure or complaint. He thought the right hon. Gentleman would only clog his Bill by proposing to incorporate with a measure relating to friendly societies so many and such various other subjects as he had mentioned, and by such means render it incapable of being worked.
§ MR. MACDONALD
said, he was exceedingly glad to learn that the Government was going to deal with the question of burial societies. In his experience, there was no system that had caused so much annoyance and hardship—and, in many circumstances, so much wrong—as the present system of these burial societies. He hoped the Chancellor of the Exchequer would show that he was determined to deal with them in a vigorous manner, and that the House of Commons would support him with a strong hand, so as to put an end to the fraud which was practised on the poorer classes. He congratulated the right hon. Gentleman on this part of his Bill, and he hoped he would be successful in carrying it.
§ MR. WHEELHOUSE
thought, as regarded affiliated benefit societies, it was necessary a totally different arrangement should be made as applying to them. They ought to be kept totally separate and distinct from burial and insurance societies, and indeed ought, if possible, to be dealt with by separate legislation. It was, above all things, most 1220 desirable they should have the management of their own affairs, and that no unnecessary interference whatever should be permitted. He suggested the necessity of having a head office in London to manage all these societies, presided over by an able and experienced person appointed by the Government, and while his whole time should be devoted to the duty, he should be solely responsible to them for the manner in which he discharged the duties of his position. As to the auditing of their accounts, he believed the societies themselves could do that work better than any actuary sent for the purpose. He hoped there would be no interference with the arrangement which allowed children to become members of these benefit associations, seeing that he was fully convinced that the admission of the "child element" did much to teach and increase thrift among the young, and to insure frugality among the parents.
§ Motion agreed, to.
§ Bill to consolidate and amend the Law relating to Friendly and other Societies, ordered to be brought in by Mr. CHANCELLOR of the EXCHEQUER, Mr. Secretary CROSS, and Mr. WILLIAM HENRY SMITH.
§ Bill presented, and read the first time. [Bill 140.]