CLAUSE 2.—(Exemptions.) (Hansard, 6 July 1911)

Mr. BALFOUR
I would like to ask the Chancellor of the Exchequer a general question on the possibility of exemption. I am very anxious to raise the point as to whether certain persons ought not to be exempt from paying if they live alone. For instance, certain people in the category of Scotch agricultural labourers and domestic servants?

§ The CHANCELLOR of the EXCHEQUER (Mr. Lloyd George)
The only question is whether they should be cut out altogether. I do not think that anybody suggests that either these farm servants or domestic servants should be cut out altogether from all benefits. All that can be raised later on. That does not arise here.

§ Mr. JAMES HOPE
I beg to move, in Sub-section (1) after the word "proves," 1362 to insert the words "either that he is a member of a specially exempted society or."
To carry out that Amendment it will be necessary to move lower down the words on top of page 50 of the Paper: A society shall be entitled to obtain special exemption for the purposes of this Section if it satisfies the chief registrar of friendly societies that it is able to secure to its members benefits not less on the whole than those provided in this Act, and any duly authenticated certificate of membership of such a society shall be deemed to be a certificate of exemption for the purposes of this Section. 5.0 P.M.
I move this primarily on behalf of the United Friendly Societies Council of Sheffield, although, of course, it will affect many others, and many others will share their views. This is a body representing the friendly society members of Sheffield in a number of different areas. The council for which I speak has unanimously asked me to move this Amendment on behalf of 42,000 members of the different friendly societies they represent. I will take the position of one or two of them. There is the Foresters in Sheffield, having 3,600 members and thirty-three courts. They are in a strong position financially, because their last valuation showed a position of 21s. 7d. in the £, a surplus well above the solvency limit. The benefits they give to their ordinary members are these—a contribution of 4¼d. per week for entrance at sixteen produces in benefit 10s. for the first twenty-six weeks, 7s. 6d. for the next twenty-six weeks, and after that 5s. as disablement permanent benefit. Besides that there is £10 funeral benefit. A contribution rather higher, of 5½d,, produces the same benefits, and in addition an old age pension for sick or well after sixty-five. I do not want to lay special stress on the contribution for reasons I shall presently give.
It will be seen that anyone entering one of these courts of the Foresters in the Sheffield district will get a considerably greater benefit in sick pay up to the date-when the disablement benefit sets in, and from that moment disablement benefit will be the same. It works out that at the date the sick pay benefit ceases and disablement benefit begins a member will get £22 15s. against the Government's £5 10s., a difference of £16 5s. The way in which it has been put to me by a member 1363 of the society is this: that it is better to have the very likely chance of getting the £16 5s. than on the off-chance of getting consumption. Again, as to funeral benefit. They say it is better to get the certainty of £10 if you are buried, than the off-chance of having six babies and two-thirds, which is what the sum represents in maternity benefit.
Next I will take the Druids. Every 6d. a week for members entering between the ages of sixteen and twenty-four will produce for the first ten weeks 12s., for the second ten weeks 8s., and for the third ten weeks 6s. That is £13 in all, or double the sick benefit under the Government scheme. A contribution of 7½d. produces in the same circumstances £19 10s., with 7s. 6d. disablement benefit to follow. There is a reduction, of course, from these figures where payment is made under the Workmen's Compensation Act in respect of sickness arising from accidents. As against that for total disablement there is a grant of no less than £100. The Fitz-William Society, a small society which has accumulated large reserves worth £60 to each member, gives 6s. a week at seventy. For a contribution of 1s. 6d. a month, of course it gives larger benefits than is possible under the Government scheme. Take the Northern Clerks. They have proved from documents they have sent round that their benefits are greater than could be got under the Government scheme. The right hon. Gentleman may say: "But what about the contributions; you have only taken into account members who have entered when they are young, while our scheme gives benefit to those who enter much later." In relation to all that I would say that the actual sum of the contribution does not matter to my argument. I might, of course, say that the greater part of the employers' contributions will, in fact, be borne by the workers. That is highly probable as regards 2d. out of 3d. But I do not take that into account. I say if the benefit is as good or greater that ought to be enough. I take it that what the Government aim at is to see that everybody is properly insured against the accidents of life. If certain members, for the sake of tradition, for the sake of the club or social life of their society, choose to pay a greater sum in contributions, provided that they will get their benefit—an equal or a greater benefit—on a sound basis, the matter of their contributions is entirely one for themselves.
1364 I will take the analogy of education. When the Government stepped in in 1870 to supplement voluntary agencies Members like the right hon. Gentleman said that the voluntary agencies could not supply a good education, and attacked those who differed with them on that matter, saying that we were advocating a system of cheap and bad education. Here have been voluntary agencies supplying the benefits of the insurance, and all I say is that if the benefits they have supplied are as good as those under the Government scheme, I submit that they ought to be let alone if the societies prefer to remain outside.
The right hon. Gentleman may say, "But what about the extra benefits under the scheme? Have you taken those into account?" These extra benefits are not as large as are generally supposed. Mr. Watson's report at the Manchester Unity Conference deals with this very point. He alluded to the opinion that the employers' 3d. and the Government's 2d. represent a joint subsidy of 5d. a week to the members of friendly societies which they can take out in increased benefits or reduction of contributions. This," he says, ''is quite erroneous. Some of the benefits and some of the incidental charges represent liabilities for which the friendly societies have no counterpart, and in respect of which they will not be relieved. For example, he estimates maternity benefit at id., sanatorium and incidentals at ½d., more expensive medical service at ½d., extra for management 1d., and capitalised future surplus at 1d., leaving l½d. for increase of benefits or reduction of contributions. Whatever the figure be, it depends on Clause 55. Those who have spoken to me on this matter in and about Sheffield distinctly say they would rather forego the extra benefits than submit to the terms of Clause 55. They have the greatest dread of that Clause. They have to perform under it a very difficult and complicated operation something like hara-kiri or self-vivisection. They have to cut all their assets to pieces under Clause 55. They fear it will lead to a forced realisation of much of their property, which will entail great loss, and that the short time given for the preparation of this great number of schemes will result in the scheme being badly drawn. Apparently they fear that the scheme will be irrevocable, and that once they have committed themselves to the provisions of this scheme, in which of course they are in the hands of the Insurance Commissioners, they will not be 1365 able to get out of it. Finally, they fear that the working of the Clause will prevent their accumulations in future. They fear also that under the powers given to the Commissioners in Clause V their independence will be in danger and that all their own old ways of working will be interfered with. They also say they will not get the safe handling of their money. They fear restrictions in regard to their powers of investment which they have prudently and profitably exercised. They fear that between the Commissioners on the one hand and the public health committees on the other, the vital life of the societies will be crushed out. I do not see why the right hon. Gentleman should not let them stand out. I think he will say they represent the best lives and that if he gives them up the actuarial basis of this scheme will be disturbed. I am not quite sure whether that position can be sustained. As I understand the matter apart from the deposit contributor, the right hon. Gentleman has based all his calculations on the actual friendly society experience. I presume that these societies do not represent on the whole lives substantially better from the actuarial point of view than those of the Manchester Unity or the existing friendly societies on which the right hon. Gentleman has based his calculations.
Admittedly under the scheme at present there is a great element of speculation. There is speculation as to the number of voluntary contributors and under Part II. of the Bill there is admittedly the greatest speculation. I submit that the basis could not be seriously or radically changed if he left out these societies who wish to go. Even if the basis had to be altered I suggest that it would be better that the matter should be adjourned than that grave risk of injury to the society which wished to go out should be brought about. I ask him whether he cannot—I do not say accept the Amendment right out—but consider whether it would not be possible to give a certain breathing time in which the societies can review their position and then at a future date announce to him whether they wish to come in or not. After all the risk is on the societies, not upon the right hon. Gentleman. If he is right in saying that the working would be substantially the same as before, and that the financial position of these societies is greatly improved, then they will lose. They are aware of this and are willing to take the risk. But if, on the contrary, they are right, surely they might have the 1366 benefit of taking their chance, which in many cases they are quite prepared to do. These societies, after all, represent, I suppose, what is the finest constructive effort in our social organism. They were started without any countenance from the authorities, without any help from the State, and in many cases against the views of what was authoritative in the life of the country at that time. They have built up a magnificent edifice of thrift, and many fear that by this scheme of the right hon. Gentleman that edifice will be endangered. After all the scheme of the right hon. Gentleman is a speculation—generous and sincere speculation, no doubt, but speculation none the less. The work that the societies are doing is a work of certain and proved good, and should not be injured for the sake of an off-chance of better things.

§ The CHANCELLOR of the EXCHEQUER (Mr. Lloyd George)
I really thought I understood this Amendment, but after the speech of the hon. Gentleman I am not very clear now what it means. As I read his proposal it is that members of friendly societies should be allowed to stand outside of the scheme altogether. If you allow individual Members to stand out what is the effect on the friendly society as a whole? I cannot imagine anything that would dislocate the machinery of a friendly society more than to allow 50 per cent. of its members to stand outside and the rest to remain inside, and one-half would get the benefit of the great balances accumulated by the society. The Oddfellows get under this Bill, it is calculated, about £3,500,000.

§ Mr. JAMES HOPE
It is not the action of the individual members: it depends on the society getting the special exemption from the registrar of friendly societies. It is quite true that I put my Amendment in this form merely for drafting reasons. I put it on the Paper yesterday in a different form. It had to come in here, and, therefore, I had to begin by exempting members. If the right hon. Gentleman will look at the Amendment he will see what the machinery of the society will be in practice.

§ Mr. LLOYD GEORGE
The Amendment was fairly intelligible until the hon. Member started to explain it. Now I understand that the proposal is that a friendly society should be allowed by the majority to claim exemption for their members. Let us see what that means. It means that 1367 6,000,000 of people could gain exemption to the extent of disqualifying their societies from receiving something like £10,000,000 from the State scheme. They say we do not want the 3d. from the employer, and we do not want the 2d. from the State. Let us assume for a moment that the friendly societies deliberately come to that conclusion. There is not a penny of this money that the State handles: it goes, every farthing of it, to the society itself.

§ Mr. JAMES HOPE
Credited, not necessarily handled.

§ Mr. LLOYD GEORGE
Handled, every penny of it, by the society, except with regard to investments. The money itself, the extra 5d., is entirely at the disposal of these friendly societies. The hon. Gentleman says there are societies who do not want the 5d. What does that mean? That means that the employer will see whether a man is a member of a friendly society or not. If the man is a member of a friendly society the employer does not pay his 3d., and he would give preference to one particular worker as against another. He might form a shop club, and it would be to the interest of every works to form a society and practically to bring pressure to bear upon every workman who joined it to get a resolution from those workmen that they did not want to come inside our scheme. That would save every employer 3d. in respect of every workman, who belonged to the particular club. I say it is an unfair inducement to an employer to raise a question of this kind. It is perfectly obvious that this is not in the interest of any society to reject this big boon; they would not do it unless there were pressure of that kind, and I do not think that any employer ought to have any great pecuniary inducement to exercise pressure of that kind. This is a national scheme of insurance. The hon. Gentleman said that the members of the societies to which he referred could be better provided for outside than inside. Why should they? I cannot imagine why they should be better provided for with 4d. than with 9d. If they could, I wonder why they do not do it now. The whole of the 9d. is there, and they can get their benefits out of this scheme; they can get them now. It is purely the calculation of our actuaries that this is the best that can be done and, if the societies could so arrange that they could make the 9d. go further, then they can do it.
1368 The number of members of friendly societies affected is about 250,000, and in the course of ten years the amount would run up to £2,250,000, and in twenty years to £5,000,000. Most of the people of this country belonging to the industrial classes are members of societies of this kind. The society sees that a man pays his subscription, and if he does not, they have to notify him. I wonder whether the hon. Member has considered that point. Take the Hearts of Oak; the collection of subscriptions is once in three months. Does the hon. Gentleman really imagine that if a man is in arrear a notice goes immediately from the Hearts of Oak. It is inconceivable. They allow their members a certain latitude now, and they would allow the same latitude again. A man might go for four or five months without any subscription being paid at all. He certainly might go three months without being discovered, and he might go four or five months without any notification being received. The Insurance Commissioners would have to find out the employer, and to give notice to the employer to deduct. That would take some time. Who is to make up all that deficiency in respect of 250,000 members each year. It is a thoroughly bad plan, it is an expensive plan, and it involves really keeping up an army of officials to see the thing is carried out. This is a perfectly simple plan which is proposed in the Bill, and why friendly societies should want to increase the burden of collection, when the collection is done for them, and when they themselves get the money, is a thing I am unable to understand. I do hope that the Committee will not agree to the present Amendment, because the proposal, in the first place, would be a direct pecuniary incentive to employers to form shop clubs merely in order to get rid of the extra 3d., and, in the second glace, it would inevitably break down in practice.

§ Sir ALFRED CRIPPS
I think the Chancellor of the Exchequer has not quite understood the purport of this Amendment submitted by my hon. Friend, who proposed it for cases where the benefits given by the society as it exists, and in the opinion of the Registrar of Friendly Societies, are greater than those that any member of that society would get under the conditions of the Bill. The answer which the Chancellor of the Exchequer gives is that he does not think any such case exists. I want to give him an illustration of the friendly society of which I 1369 have been a manager for more than thirty years, and it is just one of the illustrations where the present Bill in its present form would, in my opinion, inflict considerable hardship. A benefit society in an agricultural district has all the management expenses defrayed from outside, and the members insured get the entire benefit of their contributions. In the agricultural districts you have a very high level of health, therefore there are obtained results which are much better than you would get under a system of flat insurance. What I want to ask the Chancellor of the Exchequer is this: Take the case of an agricultural society where, under the present conditions far higher benefits or considerably higher benefits are given than can be got under the Bill of the Chancellor of the Exchequer.

§ Mr. LLOYD GEORGE
For 4d.?

§ Sir ALFRED CRIPPS
For 4d. As I said, the expenses of management are paid by outside contributors, which is constantly done in the case of agricultural societies. Consequently, the level of health in agricultural districts is very high, particularly as regards some of the societies. I may mention one which is among the earliest of these societies, where there has been great care that only members should be admitted who have what I may call a high level of expectation as regards either death or sickness. That may be a right principle, or it may not, but people who at present subscribe get the benefit of it. I do not think that anywhere in the Bill the position of the agricultural labourer is properly considered. I do not want to deal with the whole question now. What is the Chancellor of the Exchequer's answer to this? Take an agricultural society where, owing to the conditions of management and of health, the benefit is greater than will be conferred under the Bill. Why under those circumstances compel the members of that society, who would substantially pay the same in future as they had pai[...] the past by way of contribution, every individual paying 4d. either in one case or another, to accept less benefit? Several of these agricultural societies have been the real pioneers of the movement as regards these friendly societies.

§ Mr. LLOYD GEORGE
Does the hon. Gentleman suggest that these societies in future can do better for 4d. than for 9d.?

§ Sir A. CRIPPS
I will answer that. I do, and for this reason. We may assume 1370 that the proposal of the Bill is for flat insurance. That is to say, agricultural labourers and people who are working at unhealthy occupations in our large towns, will have to pay at the same rate for insurance. That is the principle of the Bill. Surely the Chancellor of the Exchequer can appreciate this, that if you bring the healthy agricultural district societies under the flat insurance principle it makes them pay, as it were, for the societies in the town districts, and it may well be that the ultimate results will not really favour what I call the agricultural society, as an actuarial matter.

§ Mr. LLOYD GEORGE
That is quite contrary to the usual practice. The hon. Gentleman is under the impression that we are going to pool the whole of these contributions and that the agricultural labourer will have to take his luck and his lot with the towns. On the contrary, in the case of those agricultural societies they will get the benefit of the extra 5d., and if they can produce the benefits mentioned by the Bill for 4d. then the whole of the 5d. will be available for additional benefits.

§ Sir A. CRIPPS
I hope the Chancellor of the Exchequer is right. I have not gone through the Bill in that sense, and it is rather a complicated Bill. If I may put my case, I am interested particularly in an agricultural society of which I have been manager for at any rate thirty years. At the present time that society has got a surplus of something like £20,000, and is in an extremely sound position. And as far as I can trace under the Bill it is only in this case that the Amendment would apply at all, and the conditions will be less favourable than they are now. The Chancellor of the Exchequer's answer is that that is impossible. If it is impossible I agree that the Amendment would not apply because it is only to apply when the conditions are more favourable. I accept what the Chancellor of the Exchequer has said, but as I had construed the Bill the conditions in the case I have given him might be less favourable than we would get out of the terms of the Bill. If the Chancellor says that whatever the nature of the society, whatever its prosperity, I mean the particular society under the Bill, it must ex necessitate be better off than now, of course that would be an answer in substance to the Amendment. If it is true universally I agree at once it makes the difficulty which I have suggested.

§ Mr. JAMES THOMAS
The mover of the Amendment has, I am sure, with all other Members received a request to move in this particular direction. Although I am a member of some of the orders petitioning in favour of this Amendment, I feel I could render no worse service to them than to support this particular Amendment. The illustration given by the mover of the Amendment was this. Here is a presumably rich society, and I am assuming now it meets all the other requirements, which can pay and is paying better benefits than it could get under the provisions of this Bill. That is not true for two reasons. Assume for a moment that this Amendment was carried, that would mean that the voluntary organisations which for years have made sacrifices and built up funds and made provisions for their members would not be able in the future to compete on equal terms for the reason that they would be dependent wholly on the contributions of their members, and they would have to compete against another class of society that was being subsidised by the employer and the State. I submit that that would be an injustice to the friendly societies. Take the very case raised as to the agricultural labourer. Let us assume that the contribution in that case is 4d. per week, or to put it in another way. I pay at present 7d. per week to a friendly society and for that 7d. per week I get 15s. per week sick pay, death benefit, and certain other benefits. On the face of it that is a higher benefit than I would get under this State scheme. If I vote for the Amendment I am voting to say that because I get higher benefits now I want to be exempted because of the provision that I have already made.
The particular object of the Amendment is to exempt those who have already made provision. But instead of doing that what happens? Because at the present moment I get 15s. per week sick pay on a contribution of 7d. per week there will be nothing to prevent my society meeting all the requirements of the State scheme, and by the additional 5d. which they will get from the State and the employer to give me even larger benefits than I get to-day. That is exactly the position that happens under the Bill. Let us assume on the other hand that this society and all other societies are to be exempted what would that mean? Although we have an open field now and can go to any man outside the friendly society and say, "here are certain benefits we are prepared to give 1372 you and we want you to join"—if this Amendment was carried we would not be able to go because those societies that were approved societies would be able to come along and say, "in addition to your contribution we get 5d. more for you." Therefore I do submit that it is not fair to raise by this particular Amendment the side issues that are raised by Clause 55. Let us remember also that under the present Clause as it stands friendly societies will compete on equal footing, while if this Amendment was carried I do submit that they will be in an unfair position.

§ Viscount WOLMER
I rise to ask the Chancellor of the Exchequer is it not a fact that under this Bill an approved society would not be able to reject members merely for their age. Therefore, take the case of a small agricultural society where there is a high standard of health, and we can well conceive the case where the reserve of such a society is materially lowered by the society being forced to take into its midst comparatively elderly members whose life is not so good, and who thereby reduce the general amount of benefits that are at the disposal of the society. The second point is with regard to the half-surplus which is to be divided when the small friendly societies are affiliated. I cannot find in the Bill any provision as to the exact manner in which that affiliation is to be carried out. I should like to ask the Chancellor what security have we that agricultural societies will not be obliged to affiliate with urban societies. It seems to me that it will be very unfair to agricultural societies whose members earn a very low wage and can therefore ill afford the premiums that are demanded of them, and whose health is superior to the health of those who live in the towns, and who, therefore, can expect greater benefits. I think it would be very unfair for such a small agricultural society to be forced to affiliate with an urban society. We should be grateful if we could have some assurance on this point. I am sure many hon. Members feel that the agricultural part of the community is not being dealt with as fairly as perhaps it might be. We are, therefore, very jealous to see that their health is not sponged upon by their richer and less healthy brethren in the towns.

§ Mr. J. W. HILLS
I rise to ask a question as to procedure. Assume this Amendment is voted upon, and assume it is nega- 1373 tived, I take it that it is still open to us to raise the whole question of exemption of certain classes of friendly societies on the second part of the first Schedule. I may have to ask for the exemption of a large friendly society which is limited to certain classes of employés. I do not want to discuss the matter now, but I take it in the case of the special society I have in mind, the Midland Railway Friendly Society, that if I want to raise the question of exemption that it would come in under the Second part of the First Schedule, and that I shall not be precluded by the vote on this Amendment. I raise the point as a matter of precaution, as I want to keep the door open.

§ Mr. LLOYD GEORGE
I suggest that if the Amendment is negatived it will not be possible to go for Amendments under the Schedule for exemption of particular societies as otherwise Amendments might be moved for the thousands of societies in the country, and there would be no end to it. I submit that the whole question of the exemption of friendly societies is raised now and will have to be disposed of.

§ Mr. HILLS
May I say that this is an exceptional case. We do not ask for exemption of a certain society qua society, but only ask that that society should be exempted on the ground that it includes a certain class of employés. I do suggest for your consideration that the case I am on now is very similar to the case of municipal employés under paragraph (b) of Part II. of the Schedule, and it might be that a very few words of Amendment to that paragraph would bring in the employés of statutory companies. But I merely want to keep the door open to discuss this very important question. I am not prepared or authorised to decide the question now, but it certainly ought to be discussed at some time, and I hope a convenient time will be found to do so.

§ Mr. FALCONER
There is a large class of farm labourers who at the present moment as part of their wages are in the enjoyment of very large benefits, sickness benefit, and medical benefit. I feel that they will have an unanswerable case to be exempted from the provisions of the Bill. I have been assuming that when we come to the Schedule, unless special provision is made, it will be open to me to exempt them from the provisions of the Bill. I raise the point now in order that I shall 1374 not be precluded subsequently for not having raised it at the present time.

§ The DEPUTY - CHAIRMAN (Mr. Whitley)
That I understand is not the case of a society at all, but a question as to individuals and the terms of their employment. That does not arise on the Amendment we are now considering, which deals with specially exempted societies. But an Amendment has been handed in on that particular subject which I will deal with when this is disposed of.

Mr. WORTHINGTON-EVANS
On the original point of Order, I think the most important case of all is the form of exemption of a person who may be a member of a society or insured in a fund. Is it your ruling that such a person could not be exempted on the Schedule?

§ The DEPUTY-CHAIRMAN
That is dealing with the second question that was raised. I was dealing with the Amendment on the Paper. The point at issue is whether societies, such as railway benefit societies, are to be dealt with in the Schedule, or whether that point is raised by this Amendment? In my judgment, it is raised by this Amendment, and if this Amendment is negatived it could not be subsequently raised upon the Schedule. This Amendment, with the consequential one on the next page, provides that any special society giving benefits on the whole of not less than those provided by the Act shall be exempted from the section. That is the Amendment now before the Committee.

§ Mr. JOYNSON-HICKS
Also on the point of Order, I want to make it quite clear in regard not to a small society, but to cases which may be dealt with in Part II. of the First Schedule, which refers to a public authority or company where the terms of employment provide as good terms as those of this scheme, such, for instance, as in the case of the clerks, or where the terms of employment provide sufficient benefits. It is perfectly clear that that will not be covered by this Amendment.

§ The DEPUTY-CHAIRMAN
I think that is the same point which has just been raised and decided. I said an Amendment that had been handed in would raise this point, and when that comes on it can be disposed of. When these various points come on they can be disposed of. I prefer not to deal with these questions until they are actually raised.

§ Mr. PRINGLE
I wish to have your ruling on this point, as to whether the discussion of this Amendment will prevent the further discussion of an Amendment later on, dealing with the case of a society which does not become an approved society under the Act. There would be specified terms, and it may be that these terms will not allow it to become an approved society. Can an Amendment be moved afterwards exempting the members of societies which do not secure approval under this Bill?

§ The DEPUTY-CHAIRMAN
I do not think that point arises now. The present point is whether a society which presumably gives greater benefits than the Act provides should be entitled to exemption.

§ Sir F. BANBURY
I think the hon. Member opposite has rather misunderstood the Amendment of my hon. Friend. He has argued as if these provisions' related to societies, which were different from those to which the Chancellor of the Exchequer referred.

§ The DEPUTY-CHAIRMAN
That is a matter of argument, and we are still on a point of Order. I thought you were upon the point of Order.

§ Mr. PETO
On the point of Order. As I understand the case is not the case of a society in the ordinary sense, but it is one of employer's funds, and that is dealt with by a special Clause in this Bill. May I ask whether the ruling you have already given with regard to the Amendment applies to Clause 19, dealing with employer's fund, and the exemption of employers' funds?

§ The DEPUTY-CHAIRMAN
If the question of exemption is raised in the form of individuals receiving certain benefits, they will not be dealt with at this moment. They will come on later.

§ Mr. AUSTEN CHAMBERLAIN
I ask you, Sir, to look at Clause 19, which deals with special provisions for members of certain societies. I presume that no Amendment which is germane to that Clause would be excluded as the effect of the decision of the House upon the present Amendment.

§ The DEPUTY-CHAIRMAN
No, I think that is so.

§ Mr. NEILSON
As that Clause has reference to individuals and the Amendment refers to individuals, would it be possible to allow other individuals, who now have 1376 to conform to the provisions of the Act to be exempted, or would they have compulsorily to insure?

§ The DEPUTY-CHAIRMAN
That point also may arise later. We are now solely dealing with the question of societies which have greater benefits than are given under the Act, and whether they should be entitled to exemption as societies. The Member for Durham asked whether he could raise the case of a railway society. My answer was "Yes, you can go on."

§ Mr. HILLS
Your decision, Sir, places me in a rather difficult position. I do not know yet the wishes in a complete form of the Midland Railway Friendly Society, but I should like to tell the Committee certain facts which show the size of the question involved, and I wish also to ask the Chancellor of the Exchequer to keep the door open for such a discussion. I quite agree we cannot discuss fully now the question of these societies. This particular society has a life of twenty years behind it. It has 34,000 members, and it has funds invested amounting to nearly £1,000,000. It rests very largely on the principle of the Chancellor of the Exchequer's Bill. The railway company contribute a sum of 12s. 6d. per year for each man, and each member pays on a varying rate, according to age of entry, and it averages about 7¾d. per week. Supposing the society comes in under Clause 19 as an approved society, all it will get will be the extra 2d. per week. We do not get the whole of the 3d. per week which the Chancellor of the Exchequer has just made so much play with. In the case of other societies, supposing they come in as approved societies, the full 5d. per week will be paid to them, but in the case of the Midland Railway Friendly Society the employer's 3d. is already paid within a few shillings. It is a difference between 12s. 6d. and 13s.; so that it is practically the same, and therefore all the gain to the society would be the 2d. per week. I do not want to argue the question now, but it is quite arguable, if they only receive that 2d. a week, and they have to invest their funds at a lower rate of interest and submit to more expensive management, whether they could afford to give on the 2d. per week the extra benefits which the scheme would impose upon them. The present benefits are extremely generous. In all cases they are more than those of the Government scheme, and they include a death benefit of £12 on the death of a member and £5 on the death of his wife.
1377 They also include a pension of 8s. per week, beginning at the age of sixty-five. Now the men have a scheme of this size which gives them very substantial benefits, as well as a larger sick pay than the Government scheme does, and for a longer period than the Government scheme does. The sick pay is 12s. a week, against 10s. per week on the Government scheme, and it is for twenty-six weeks against thirteen weeks. Therefore, in all these respects, the benefits are more generous than those of the Government, and if we assume that we have to invest our money at 3 per cent. instead of 4 per cent., and that the management is more expensive, it would be easy to argue that it would be wise not to attempt this on the extra 2d. per week. I do not want to argue the question now, but I do not want it shut down altogether. I do appeal to the Chancellor of the Exchequer, in view of the way in which it has been sprung upon us and also in view of the very great importance of the question, whether he should not give us a chance of fully discussing it. I have no doubt the Midland Railway Friendly Society does not stand alone, and that there are other societies in the same position; and I am sure the Chancellor of the Exchequer would not want to preclude discussion of so important a question.

§ Mr. LLOYD GEORGE
It is no fault of mine that the question has been raised at this stage. I think it is a great mistake to raise it on this point. It can be raised at a later stage. I certainly do not want to keep the matter in the background at all.

§ Mr. AUSTEN CHAMBERLAIN
I can quite understand that the right hon. Gentleman does not want the House to be precluded from discussing this question at a later stage of the Bill.

§ Mr. LLOYD GEORGE
I say it is not my fault if it has to be discussed now.

§ Mr. AUSTEN CHAMBERLAIN
Like any Minister who has charge of a Bill, the right hon. Gentleman does not want to have an exhaustive discussion now and to repeat the same discussion at a later stage, but I gather that he is of the same opinion as my hon. Friend the Member for Durham (Mr. Hills) that it would be unfortunate in the interests of the Bill if at this stage a final and definite decision was taken upon this important subject, which would preclude discussion later on. I understand that a later opportunity may come on the Schedule.

§ Mr. LLOYD GEORGE
Yes.

§ Mr. AUSTEN CHAMBERLAIN
It is a rather difficult thing to decide owing to the draughtsmanship of the Bill. There are partly exemptions here and partly in the Schedule, and when one wishes to raise a further exemption it is difficult to know where to put it down, but I agree with my hon. Friend the Member for Durham and the Chancellor of the Exchequer that it would be unfortunate to come to a decision now and preclude the raising of this question at a later stage. I was going to suggest now some understanding on which we might have a discussion at a later stage, and my hon. Friend should not press his Amendment now.

§ Mr. LLOYD GEORGE
I think it would be far better we should discuss this question after we know what shape the benefits will take in this scheme. I assume the Bill as it stands is not in the final shape in which it will emerge. It is quite possible that some societies which are now accepted may be rejected and some the other way. I think the same observation applies to a similar question which was raised by the Leader of the Opposition. If it is raised now and disposed of we will then be done with it. But I think it would be far better when the scheme is settled that he should move the exemption of that class altogether, if he then thinks that the benefits which are suggested will not quite suit the conditions which he has in his mind. It would be much better to move the exemption of the class when we come to the Schedule. If he raises it now I think I am entitled to submit to the Chair that he cannot have the same question debated twice over.

Mr. BALFOUR
I do not want to suggest that we should do anything inconvenient to the general course of the discussion. On that possibly the best judge is the Minister in charge of the Bill. I do not propose to go into the merits of the Amendment to which the Chancellor of the Exchequer has referred. It would be most improper to do so. But I propose, as an Amendment, to insert after the word "proves" these words, "either that he obtains in terms of his employment advantages which in the opinion of the Registrar of Friendly Societies are, on the whole, equal to, or greater than, those secured under this Act." The Committee will see that there is a different point here—closely analogous to, but quite different 1379 from, that raised by the friendly societies. The leading case, no doubt, is that of the agricultural labourers in Scotland. I am not at all sure that that is the only case. I do not think, therefore, that the object which I understand the Chancellor of the Exchequer has would necessarily be fully accomplished by the exclusion legislatively of any particular class by name.
A more general description seems more logical, and it carries the reason with it. I think it is quite possible that my words may not be very well suited for their object. The hon. Member, who privately I have had a little conversation with on the other side of the House, is not quite satisfied that my words meet the case. It will be a pity if we had a premature discussion, and the Committee came to a premature decision, and that we should find after that we were precluded from reopening the matter. All I desire is to know exactly what the Chancellor means by the phrase he used just now: "Try to weave into the fabric of the Bill"? Is it to be something which meets this case, and then, if we fail, is there to be moved specific exceptions in the Schedule? If the right hon. Gentleman sees his way—

§ Mr. LLOYD GEORGE
Yes.

Mr. BALFOUR
Then perhaps I may put myself and my case in charge of the Chancellor of the Exchequer. If he will make himself responsible that we should have either our general view satisfied, or if he cannot satisfy it at all events give us a fair opportunity of adequately arguing and discussing it, then I should not be disposed to find fault.

§ Mr. LLOYD GEORGE
Again by leave of the House, and subject to the ruling of the Chair, I should like to say a word or two, not in order to lead Debate, but rather by way of answer to the right hon. Gentleman. I think there is a case to be met, as suggested by the Amendment of the right hon. Gentleman. It is not merely the agricultural labourer, but in regard to the domestic servants, and the nurses in the hospitals, that there is a case to be met. [An HON. MEMBER: "And the seaman."] That is another case. The difficulty is this—and that is why I oppose discussing these exemptions at all. I think the right hon. Gentleman will see that in none of these cases is there provision for permanent disability. That is the difficulty. It is true that the domestic servant gets not merely her board and lodging, 1380 but a doctor as long as she serves the particular employer with whom she is, but that particular employer does not enter into a contract to provide against the time when she is broken down and aged, or, at all events, middle-aged.
Therefore if you cut them out altogether you cut them out of provision for permanent disability. That would be a great misfortune. Therefore I think it is possible to weave into the Bill—I hope the right hon. Gentleman will not take it that I am suggesting anything final—I am merely considering the best way of doing the thing—I am considering the question as to whether it is possible to deduct out of the charge an actuarial equivalent—which means present sickness—and simply charge what is enough to provide for permanent disability. That, of course, will reduce the charge in these cases, but that is not an exemption. I think that can be woven into the permanent fabric of the Bill later. That is why I seriously deprecate raising these questions of exemptions at the present stage, because it does preclude the Government from meeting a real grievance in these cases. I am in process of consulting the actuaries with a view of meeting the case raised by the right hon. Gentleman, the point of which I frankly admit, and which is not met in the Bill at present.

Mr. BALFOUR
I am entirely convinced by what my right hon. Friend says.

§ Mr. JAMES HOPE
I gather from what the Chancellor of the Exchequer says that he will have no objection to having my Amendment withdrawn without any further discussion. If that be so, I shall be extremely glad to meet my right hon. Friend, and I ask leave to withdraw. But I would just say that I put down this Amendment for the exemption of certain societies on the very day of the Second Reading. No representation was made to me by anybody that discussion would be inconvenient now.

§ The CHAIRMAN
Of course that also applies to the suggested Amendment of the right hon. Gentleman the Leader of the Opposition.

§ Mr. PETO
I beg to move, in Sub-section (1), to leave out the words "he is not, as a rule, employed for more than thirty-nine weeks in a year, and."
It is true that when I put down this particular Amendment I had in mind certain 1381 exemptions which, if these words were in the Bill, it would be quite impossible to move at this time. I think the words that I propose to omit in Clause 2 are really, if I may venture to say so, so far as I can understand them, wholly unnecessary and rather confusing. Presently I hope the Chancellor of the Exchequer will explain why they are necessary to the Bill. The, first exemption in the Clause is the case of a person who has an income or pension of the annual value of £26 a year. I take it that that is in the opinion of those responsible for the Bill sufficient to prove that that person does not need to come in under this Bill. He has outside sources and provision that makes him independent. Then we have got a proviso in the words I propose to omit. Even if the person has £26 a year, or an annuity, quite independent, or he is, as in the case of (b), "ordinarily dependent upon some other person," and therefore need not come under this scheme at all, he must be able to show that he is not as a rule employed for more than thirty-nine weeks a year. I suggest to the Chancellor of the Exchequer that it will be a very difficult thing to show whether persons are as a rule employed thirty-nine weeks in the year or not. It is quite possible that a person in possession of an annuity of 10s. a week or £26 a year may have been in the habit for some years of not working for more than thirty-nine weeks in the year. He might when the Bill comes into force be a person who, as a rule, has not worked for more than thirty-nine weeks, and he may wish to do so, and therefore he does not want to come in under the Bill. Something might happen in his life. Apart from the annuity he might be exceedingly unwilling to continue to work for only thirty-nine weeks in the year. He might have the grave misfortune of sickness in his family. He might even become the father of several more children. Things of this sort might happen and he might desire to work as hard as he could for fifty-two weeks in the year; he might say that he wants to come in under the scheme.
In that case how are you going to recover all those back years' contribution, and to place him in the position he would have been in if he had been in not so favourable a position financially? It seems to me that it is very difficult. Also you will have to see that the average of thirty-nine weeks continues in the future. I would suggest to the Chancellor of the Exchequer another reason why these words should be omitted. There 1382 is no question that under a great deal of recent legislation—I do not want to say anything hard—it has become necessary to make inquisition into the private affairs of all sorts of people—of people of very little means and of people of very great means. No one is exempt from this sort of policy of prying into his own individual affairs. I do think that you have got two definite cases here. Either a person must show that he has got £26 a year, an annuity, or a pension, or something from independent sources, or that he is dependent upon somebody else, and therefore need not be dependent upon the National Insurance scheme. It is quite sufficient that he shall be able to prove one of these cases. It is hardly necessary. It is going out of your way—and encouraging inquisition—there is no object served by asking a man to prove that he has not as a rule worked more than thirty-nine weeks a year. I shall listen with great interest to what the Chancellor of the Exchequer will, I hope, tell us, as to why it is absolutely necessary that a person who has worked forty-eight weeks in the year should be a contributor, and that a person who has only worked thirty-eight on an average should not contribute to it? Until I get that explanation I shall consider that the Bill will be a better Bill, and the operation of it better, if these words are withdrawn.

§ Mr. LLOYD GEORGE
Frankly I have no special objection to this Amendment, but I should like to hear the view of the House upon it. I will just, however, put to the Committee the difficulty in my mind in accepting it. I agree there is not a case for making provision at the expense of the State for a man who has private means which come to £26 a year. For this, after all, is a very considerable income in the class for which we are providing. I do not think we should miss that point, and that the Committee should fully realise it before they come to a decision. But there are quite an appreciable number of people, old pensioners and others, who are receiving over 10s. a week—persons in the Navy, perhaps in the Army. In this case there would be no compulsory contribution either from the employer or the people employed, and to that extent it would be undoubtedly an inducement for the employer to give preference to pensioners rather than to persons who had not got an income of that amount. I think it is a serious thing to exempt pensioners 1383 because of that inducement to give preference to them.

Mr. WORTHINGTON - EVANS
I think if the right hon. Gentleman will turn to Sub-section 5, Clause 4, he will see he is wrong. It is not giving any preference to the employer, because whether the man is insured or not the employer has to make the contribution. The point the Chancellor of the Exchequer wishes the Committee not to make a difference in favour of this class of people, and giving them a better chance of getting employment than others. That argument seems to me to go by the board, because, as the employer is bound to pay, whether the employed persons get the insurance or not, if he is one of those "exempts." That is provided under Clause 4, and a little later on it is provided that the money which the employer contributes is to be carried to such account and dealt with in such a way as the Chancellor may hereinafterwards determine, or as may be prescribed. There is another point. If men come out of friendly societies it affects the remaining members, and it is a matter for consideration as to which advantage is the greater, keeping men in the friendly societies or allowing them to come out.

§ Mr. PETO
My Amendment is not to leave out "these exempts" at all. It is merely to leave it perfectly open.

Mr. WORTHINGTON-EVANS
I did not understand the hon. Member's Amendment was in that form, and, if so, I have personally no objection.

§ Mr. CASSEL
I hope these words will not be omitted, but that instead the word "and" will be converted into "or."

§ The CHAIRMAN
That is a separate Amendment and I have saved it.

§ Mr. CASSEL
If I understand that Amendment is saved and these words are not at once to go out—

§ The CHAIRMAN
That is not in order now.

§ Mr. CASSEL
Then my observations will come in later.

§ Mr. J. SAMUEL
I should like to ask a question arising out of Sub-section (1) and (a). Is it optional on the part of the insured person himself to prove whether he claims exemption or not, or would it be possible for the employer to prove that the 1384 man is in receipt of an income of £26 a year. We have a very large number of thrifty workmen who are owners of one, two or three cottages and who are employed—

§ The CHAIRMAN
I do not see that that arises. This Amendment is to leave out from "he" to "is."

§ Mr. J. SAMUEL
I thought it came in in connection with this Clause. What I want to know is this: Whether it is optional on the part of the insured person or whether the employer himself is to prove that the man is in receipt of £26?

§ The CHAIRMAN
I do not see that that arises now.

Mr. PEEL
I call the attention of the Committee to the form of the words as. they stand now and I submit that they are rather vague. The Clause says, "who is. not, as a rule, employed more than thirty-nine weeks in the year." As a definition that is exceedingly vague.

§ Mr. HOHLER
I appreciate the very great importance of the reference the Chancellor made with regard to soldiers and sailors and I ask him to consider how exactly it would operate. I do not quite follow why the thirty-nine weeks was put in at all. Under Clause 36 of the Bill, if I rightly understand, men in receipt of pensions are exempt from contribution at all. Would the Chancellor of the Exchequer give me some information how this will operate in regard to soldiers and sailors who have been discharged on pensions. Such a man may have been in the position of one who is not a member of an approved society and if he was compelled to contribute he might be merely a Post Office contributor. I ask the right hon. Gentleman to consider whether in the interests of men of this class who are-employed in His Majesty's dockyards and who are employed as commissionaires and in other capacities it would be not better to exempt them entirely from the thirty-nine weeks. I suggest that it would be better to accept the Amendment wholly omitting the thirty-nine weeks, having regard to the position in which soldiers and sailors who have pensions are pledged.

§ Sir ARTHUR GRIFFITH-BOSCAWEN
I hope the Chancellor will accept this Amendment. If a man is otherwise well-to-do, what does it matter if he is employed thirty-nine weeks or a whole year. The whole point is whether it is necessary 1385 to compel such a man to come into the scheme. If a man enjoys £26 a year there is no necessity to bring him in, and it is quite unnecessary to make an exemption if he is only employed for a certain number of weeks. The Chancellor of the Exchequer pointed out if exemption is given under these terms employers will engage pensioners so as to escape payment. But my hon. Friend showed that is not so, and it is perfectly clear from Sub-section (5) of Clause 4 that the employer would gain nothing by doing that. Under these circumstances I hope that the Chancellor will accept the Amendment of my hon. Friend.

§ Mr. LLOYD GEORGE
If it is perfectly and clearly understood that the contribution will be paid by the employer, I think there is a good deal to be said for the Amendment.

§ Mr. O'SHEE
I know the case of Ireland comes up under Clause 29, but how will this affect the migratory labourer. He comes to England and Scotland to work for a considerable portion of the year.

§ Mr. LLOYD GEORGE
This Amendment does not raise that case at all.

§ Mr. O'SHEE
Of course, I know that upon Clause 29 the special circumstances with regard to Irish labourers and employment can be dealt with. But if this Clause is not amended as well as Clause 29 it will affect the position of the Irish migratory labourer, and he would have to pay the contribution both as employer and employed for the months of the year that he resides in Ireland in order that he might get any benefit from the payment he has made when employed in England.

Mr. PEEL
If these words are left out, will not out workers who only work seven or eight months of the year be forced to come in under the scheme? I am not now thinking so much of the employer, but I want to know what will be the position of those people and how are they to pay during the whole year. They will be in a perpetual position of arrears.

§ Mr. LLOYD GEORGE
All these things will have to be considered very carefully, but they cannot properly be raised here. They will arise later on when we come to deal with the casual labourer. I agree we should accept the Amendment and consider these questions later on.

§ Mr. FORSTER
The right hon. Gentleman promised to accept the Amendment 1386 upon conditions. I do not want to have any misunderstanding. He says he can only accept it on the understanding that we do not attempt to interfere with Subsection 5 of Clause 4. Of course, I do not suppose that we are not to preserve our freedom of discussion. What that Clause lays down is that the employer's contribution should be carried to the general fund even though the particular workman does not get any benefit That is a question that will have to be discussed fully.

§ Mr. CASSEL
If these words are left out, how will it be possible to raise a discussion on the next Amendment on the Paper, which proposes to substitute "or" for "and"?

§ The CHAIRMAN
If the words are left out they are left out, and the point cannot be raised.

§ Mr. CASSEL
That is the point to which I wish to call attention, and I ask the Chancellor not to accept the Amendment simply for this reason, that it cuts out a later Amendment which proposes to substitute "or" for "and." If the Chancellor would be good enough to consider the effect of that Amendment it would be this, that instead of these requests for exemption having to be put in there would be an alternative. You leave out and exempt two or three classes—first persons whose trade is seasonal, that is to say those who upon the average are only employed for thirty-nine weeks in the year. Several cases of seasonal trades have been mentioned where people are employed for less than thirty-nine weeks. The result of that is that they will be always in arrear to such an extent that their benefits will always be suspended whilst they will be forced compulsorily to pay though they never got any benefit. Assuming I can prove to the Chancellor of the Exchequer that there is a class of persons who habitually are only employed thirty-nine weeks in the year, in that case they will always be thirteen weeks in arrear, and that is the class who ought to be exempted on that ground alone. If you leave out the word "and" in order to insert the word "or" you come to another class which ought also to be exempted. As both are exempted, I submit that the proper way of dealing with them would be by such an Amendment as I have suggested.

§ Mr. LLOYD GEORGE
I see the difficulty of the hon. and learned Gentleman, and I think it is fair that that point should 1387 be considered. Let me point out, however, that it would mean cutting out casual labour. I think this is the class of all others we ought to make some provision for. It is not correct to say that he would get no benefit because he had always been in arrear. There are two alternative benefits. For instance, if he finds work for thirty-five weeks in the year, so long as he can save up just enough to make up the difference between thirty-five and thirty-nine weeks he can come into benefit in his own society. He will get the employer's contribution for the thirty-five weeks he is working, and the State contribution for the whole time. All he need do in order to get benefits from his own society would be to pay enough to come within the thirty-nine weeks.
There is a second thing he could do. Supposing he were not able to pay the contributions of his own society, he would at the very worst derive the advantage of the 4d. for the thirty-five weeks, 3d. contributed by the employer, 2d. contributed by the State, and the tontine arrangement of deposit. He derives the whole benefit of that arrangement, and he practically insures himself for medical benefits, sanatorium benefits, and a balance to provide for sick pay. The vast majority of these cases are not bad lives, but labourers who cannot find work all the year round, and this provision provides sick pay for twelve or thirteen weeks in a given year. It would be a great hardship to deprive them of such benefits as the Bill confers, and I trust that whatever else the Committee may do we shall not introduce the word "or" because that would have the effect of cutting out the casual labourer. If there is any desire to do something more for him it cannot be done if this word is taken out.

§ Mr. BOOTH
The Chancellor of the Exchequer has replied to the various sections of the Committee on this point. Speaking for myself and those for whom I am authorised to speak, I wish to say that we prefer the Amendment. Where a man who is in receipt of a private income wishes to go out of the scope of the Bill, if you make him stop in he will probably only become a malingerer.

§ Mr. HICKS BEACH
I do not think the Chancellor of the Exchequer is quite correct in saying that the effect of this Amendment would be to exempt casual labourers altogether.

§ Mr. LANSBURY
If the words are passed as printed at the bottom of page 2, shall we be able to alter the constitution, of health committees?

§ Mr. LLOYD GEORGE
I take it we are not now deciding upon the composition of the local health committees or their relations with county councils.

§ The CHAIRMAN
This Clause does not affect the constitution of health committees in any shape or form.

§ Mr. LANSBURY
It is the title I am anxious about, and I want to make sure that it can be altered.

§ Mr. AUSTEN CHAMBERLAIN
Has. the Chancellor of the Exchequer any information to give to the Committee as to what he intends to include under Sub-section, (b). This applies to people who are "ordinarily dependent upon some other person." It seems to me that these words are very wide, and I am not quite certain what the right hon. Gentleman intends to cover by them. The previous Sub-section is intended to exclude from the Bill, or give to them the option of being excluded, people who have a secure provision made for them. I suppose that Sub-section also means that the persons referred to have a secured maintenance guaranteed by the persons on whom they are dependent. I only wish to call attention to the fact that these words are very wide, and that you might have a person compulsorily insured under them because he is entirely dependent upon his daily earnings while another person who is employed might be exempted from insurance on the ground that his maintenance is guaranteed by the insured person. I think it is a little complicated. There is no real guarantee in Sub-section (b) that a person ordinarily dependent upon another shall if need arise have any provision on which he can call because the person on whom he is dependent may be a person whose only means are derived from his daily occupation and ho himself might be on sick pay or disabled at the time. I should like to hear what the Chancellor of the Exchequer has got to say upon this point.

§ Mr. LLOYD GEORGE
I agree that the words are wide, and I think they require a little more definition. The right hon. Gentleman is perfectly right. The last 1389 class he mentioned is not to be excluded. I think it would be better for us to reconsider these words, and I promise to bring up words on the Report stage to make it clearer.

§ Mr. GEORGE THORNE
I desire to be quite clear as to the meaning of this Clause. It is intended purely in the interest of the insured persons, but if you take the proviso at the bottom of the page it says "provided that the regulations of the Insurance Commissioners may provide for claims under this Section being made." My only desire is to make sure that this provision is in the interest of the insured person.

§ Mr. RAMSAY MACDONALD
I wish to draw attention to the point which has been raised by the right hon. Gentleman the Member for East Worcestershire with reference to Sub-section (b). I raise the point now because I hope the Chancellor of the Exchequer will consider the same point in reference to other Clauses. Subsection (b) provides that if anyone asks to be exempt, he or she shall be exempt, if "ordinarily dependent upon some other person." The case I have in mind is the young woman working for what is known as pin-money. She may claim exemption and get it. Under Sub-section (5) of Clause 4 an employer will have to pay for her. We all know that one of the saddest experiences in life is the case of a family that has been broken up and the young persons of which are supposed to be independent. They have not been working for wages; they have only been working for part wages. Then a certain catastrophe takes place, and the economic position of the family is shattered. I am quite agreeable to this Clause, but I think we ought to keep in mind the fact that some provision ought to be made for those who are exempt from Sub-section (b), so that there may be something for them to fall back upon in the shape of insurance should it be necessary in consequence of certain economic accidents. The matter will be raised later on, but I hope the Chancellor of the Exchequer will keep this case in mind, because it is a very important case and one which is all too common.

§ Mr. J. SAMUEL
May I ask the right hon. Gentleman whether the employer under this Clause could not insist upon exemption?

§ Mr. LLOYD GEORGE
With regard to the two points raised by my hon. Friend 1390 the Member for Wolverhampton (Mr. George Thorne) and the hon. Member for Stockton (Mr. J. Samuel), my interpretation of the Clause is that the application for exemption must come from the insured person himself. The point raised by my hon. Friend the Member for Leicester (Mr. Ramsay Macdonald) is a very important one, but it will come on later, I think under Clause 5, and it cannot be discussed here. I think the hon. Member was wise, however, in uttering a word of caution.

§ Mr. J. SAMUEL
I am afraid a very large number of employers will insist upon these exemptions if they find men are in receipt of an income of £26 a year, apart from their earnings. I want to protect these men so that they will not be called upon to be exempt. Personally, I cannot understand why a workman with £26 a year should ask for exemption under this Clause, but I am quite certain a very large number of employers will insist upon these exemptions, and I want to protect the workman against such exemptions.