HC Deb 03 November 1909 vol 12 cc1947-50

Order for Second Reading read.

Motion made, and Question proposed, "That the Bill be now read a second time."

Mr. KEIR HARDIE moved to leave out from the word "That" to the end of the Question, and to add the words "this House declines to proceed with the Second Reading of this Bill until a Royal or other Commission has inquired into and reported upon the whole of the facts relating to the working of industrial assurance companies and societies."

I do not take this action in a spirit of hostility to most of the provisions contained in this Bill. There are certain points of the Bill which we may reasonably anticipate will be amended. I refer particularly to those Sections of Clause 37 which refer to the transfer of an assurance society into an insurance company without the necessity of the members being consulted. But the main point of my opposition to the Bill at this stage is that before proceeding to legislation of this kind there ought to be a thoroughgoing and impartial investigation into the facts of the case relating to industrial assurance companies and societies. Those of us who are familiar with working class life, and with the methods of assurance that there obtains, know that in connection with these societies the most gross abuses have grown up. It is a fact which is not open to dispute that the premiums paid in small weekly sums by the working people who insure their own lives or those of their dependents at least are, and in some cases are more than, security to pay any working expenses. Those best able to speak with authority say that in addition to this abuses have crept into the system of collecting those premiums, the net result of which is that it pays certain societies to encourage lapses for membership. I do not say of my own knowledge that such is the case, but the opinion that it is so is so generally held and so universally believed that, if only for the purpose of disproving it, some impartial investigation is absolutely indispensable. But there is the further question: How far industrial insurance should be left to private companies; whether the time has not come when the State should do more in this respect that it has done in the past to provide cheap and efficient means whereby industrious persons can insure their lives and those of their dependents? I repeat, I am in no way hostile to the leading provisions contained in this Bill. I recognise fully that one of the leading objects of the Bill, that of legalising certain doubtful transactions which have grown up in connection with these societies in the matter of issuing policies the legality of which is very doubtful, is desirable, and would be useful, and would allay a good deal of apprehension that exists in the minds of a large number of policy-holders. But that state of things has gone on now for very many years, and might well be allowed to stand over until the whole question of industrial insurance had been inquired into by some impartial Commission. The subject is a very large one, and has a very important bearing upon the thrift of the working classes, and if the House is called upon to legislate upon the subject it should do so with full knowledge. That has not been obtained, and can only be obtained by some such inquiry as I am suggesting. For these reasons I beg to move the Amendment standing in my name.

Mr. STEPHEN WALSH seconded the Motion. My reasons for doing so largely coincides with the reasons advanced by the hon. Member for Merthyr Tydvil. There is one Sub-section which seems especially dangerous, under which societies that have at present very large powers of democratic management seem to be on the slippery slope of conversion into assurance companies with very highly paid boards of directors, and then their democratic management will become a thing of the past. That is the special reason why I second the Motion of the hon. Member. Many of these friendly collecting societies have very difficult conditions as compared with those who are working for the large assurance companies. They themselves have very large powers in creating their own conditions, and by the power of delegation they can take a very great part indeed in the framing of the conditions under which they work. That has the effect not only of giving the agent better conditions of labour, but of inspiring greater confidence in the Members themselves. I have seen so much within the last few years of the very easy way in which these societies have been converted into assurance companies. The democratic management has slipped away alto- gether, and the funds contributed by the Members have become largely the property of ornamental boards of directors who in the past in many cases have voted themselves very handsome salaries. I am extremely desirous that this state of things shall not be perpetuated. I desire, if conversion does take place, that it shall take place under conditions which carry with them the consent of a decent majority of the Members. If the right hon. Gentleman can give us some assurance to that effect I have not the slightest doubt it will facilitate the passage of this Bill. I know that a great many insurance companies in this kingdom are anxious that the democratic management which they now possess shall not slip away from them, and that the funds built up by their efforts shall not become the property of boards of directors and limited companies over which they have no control.

The PRESIDENT of the BOARD of TRADE (Mr. Churchill)

I desire to explain to the House that this measure does four main things. First of all it deals with life assurance and consolidates and improves the law of life assurance. It applies to life assurance companies the recommendations of the House of Lords Committee which sat a few years ago, and by so doing it affords the greatest security to British policy-holders in foreign countries. That is the first aspect of the Bill. In the second place the Bill deals with fire and accident assurance companies, and it applies to them those safeguards which have been found extremely effective in dealing with life assurance companies. We provide for a deposit of £20,000 and the publication of accounts in statutory form. Those are two great safeguards which have raised life assurance business to its present high level, and we think the time has come when they should be applied to fire and accident insurance as well. I should just like, if I might, to read to the House some of the cases which have justified this Section of the Bill. Around the fringe of the general body of fire and accident assurance business, which is of a very high standard in this country, there is a class of business of an injurious, deceptive, and disreputable character; and it is in the interest of the general assurance business in this country, and not less of policy-holders, and in the interest of British assurance generally and its reputation abroad, that some greater regulation is necessary. Let me read to the House this:—