HC Deb 25 May 1911 vol 26 cc451-571

Order read for resuming adjourned Debate on Question [24th May], "That the Bill be now read a second time."

Question again proposed. Debate resumed.

The ATTORNEY-GENERAL (Sir Rufus Isaacs)

When the House adjourned yesterday evening I was just about to deal with the position of the approved societies at the end, say, of a year, when there has been, according to the audit, either a surplus or a deficit on the balance-sheet. I pointed out that the approved societies would have to deal with the contributions and benefits as provided under this scheme according to their valuation and their own rules, managed by themselves, subject in certain instances to the control of the Insurance officer. For example, I pointed out that there must necessarily be a Government audit and a Government valuation and proper books of accounts must be kept by the approved societies in connection with all amounts received under the State scheme. The objects of the framers of this Bill in leaving the matter to the society is that in their management of it they shall have every inducement to administer well, efficiently, and with due regard to economy, and that they shall more particularly keep a watchful eye upon the evil of malingering which all parties in the House are naturally fully alive to. Therefore, if on the year's audit it is found that there is a surplus due to the society, taking into account the contributions which will have been received on behalf of the society by its members, the benefits which have been paid out and also the interest which would have been credited on the reserve attributable to the particular society, that surplus may be applied under the Bill to additional benefits which are to be granted to the members of that society. Those benefits are circumscribed by one of the Schedules to the Bill. They are not in any way to be dealt with by the society as the society may desire, except as the society may select a particular additional benefit which they think should be given. I mean by that, it would not be open to the society to give a death benefit at the end of the year if it was found there was a surplus, nor would it be open to them to give a funeral benefit. What they can do is to take any one of the nine items which are referred to as additional benefits under the second part of the fourth Schedule of the Bill, and then it may frame a scheme, which would have to be submitted to the office, and then the society could distribute the surplus, which it has managed to collect by means of good administration, among the members of that particular society. But the effect of that will be that those who are managing the society, as well as the members of the society, have every interest in administering well, because to those members the society will give the additional benefits which may be payable out of the surplus attributable to that particular society. It might be, for example, that the society might choose to apply money available for its surplus in medical treatment and attendance to the members of the family of the particular member because under the Bill the medical benefit proper is applicable only to the member, but when you come to additional benefits not only may the member get the benefit of the medical treatment but also the member of his family may be included, provided there is a surplus, and there are a number of other benefits dealt with in that way. There might be an increase of sickness benefit or of disablement benefit or maternity benefit, and indeed also there might be an increase to the old age pension which is payable under the old Age Pensions Act. If the benefits there are sufficient to enable the society to do it, it might give either an increased pension or a pension payable at an earlier age than seventy, so that those who are managing on behalf of the society will always desire as far as they possibly can to get a surplus at the end of the year.


Will the hon. and learned Gentleman explain the provision as to applying the surplus upon one branch in making good a deficiency in another branch?


That, of course, is a point which arises only with regard to the associated societies, and there are provisions made with regard to them, so that you could not have in an associated society a surplus on one branch to devote to members of that particular branch without regard to the other branches of the society, and provision is made for that in the Bill. If there is a deficit, there again by this Bill the society has to make it good. Either it would have to make a levy upon its members in order to make up the amount or it would have to reduce the benefits, or possibly to postpone the benefits. So that again, if you have a society which is not keeping a watchful eye upon malingering, which has been too easy in the distribution of its benefits, which is not having proper regard to the rules which it has framed for the purpose of checking malingering, the effect would be that the members of the society would be called upon to make up the amount; and in that way the members of the society and those who are administering it have every inducement to prevent, so far as they can, a deficit arising at the end of the year. It might be that there was excessive sickness in the district, and that might affect a number of members of a particular approved society. That might be for a number of reasons. We may assume for a moment that there are insanitary conditions in a factory in which a number of the men who are members of the society are working. It would be unfair under these circumstances, if you got a protracted period of excessive sickness, that that deficit should fall upon the members of the society who are doing their best to administer properly, and in consequence of the excessive sickness have to distribute much more money in the shape of sickness benefits than would normally be expected among the members of the society; and in order to counteract that there is again provisions that an inquiry may be held, and if it is found, as a consequence, over a period of, say, three years, that there is an increase of 10 per cent. over the average rate of sickness, which is to be expected according to the actuarial table, and that is properly attributable to insanitary conditions in the factory, the effect of that, would be visited upon the person who is responsible, and not upon the society, who will have done their best under the circumstances to check the excessive payment of pensions.

4.0 P.M.

Again, it might not be due to the insanitary conditions of the factory, but to the particular locality. It might be that the housing conditions were insanitary. It might be that the local authority in the particular district has not carried out its duties. Again there is provision in the Bill under which the local health committee has power to demand an inquiry, and if, as a result of the inquiry, it is found that the local authority has not, carried out its statutory obligations in enforcing the various Acts of Parliament which give it power to remedy defects, such as insanitary conditions, the local authority will be called upon to contribute the cost of the excessive sickness which has been due to its fault in consequence of its slackness in the administration of the Acts and in the performance of the duties which are entrusted to the local authority. The excessive sickness would not be due to fault of the management of an approved society, and therefore there again the desire is to visit upon those really responsible, and as the result of a careful inquiry, the cost of the excessive sickness which might prevail in a locality. These are all exceptional circumstances which, it is hoped, will not often occur, but as they may occur provision is made for them. Otherwise approved societies might be placed in a position of responsibility for matters over which they could not have any proper control.


May I ask where the burden will ultimately lie? Supposing the fault is on the part of a rural authority, would it fall upon that authority or upon the county?


The burden would fall upon the local authority which is charged with the duty of carrying out a particular Act. You might have a special district in which the conditions were insanitary, and that would be due to the fault of the local authority which is entrusted with the administration of an Act of Parliament. It would be that authority that would be responsible. I proceed now to the last stage of the review which I have been making of this Bill. I wish to refer to the collecting machinery of the Bill. This is quite a simple matter, and I do not think it will involve much complication. No doubt the House would like to know how it is proposed to carry out the collection of the payments with cards. What would happen would be this. I have a card in my possession which is the German card. I only use it for the purpose of explaining the system. I do not say that our card would be like this, for there is a great deal of printed matter on this card which I think would not be necessary. Our card would be given to a man by the society he has selected. It would be taken to the employer, and the employer, at the end of the week, would have to stamp the workman's contribution, which the employer would be entitled to deduct from the workman's pay. In the normal case that would be 4d. from the workman, and the 3d. which is the employer's contribution would have to be stamped on the card by the employer, making 7d., which goes on to the card which is the property of the workman. The employer would not be entitled to make any remarks on the card or to make any mark upon it. This card would be handed back to the workman, and following out what usually happens, he would take it to his lodge, where it would have to be entered up, and in that way some provision would be made against the possible loss of the card. That is to say, it would be available for identifying the man, and the amount of money paid would appear from the stamps upon it. You would then have a record in the books of the society of the payments and the man would have his card. It would he open to him to take it to, and leave it in possession of, the employer if he chose to do so. If kept by the employer, it would be his duty to keep the card properly stamped from week to week; but the workman would always be entitled to get it back at any time he chose to ask for it. I have no doubt that in many cases it would be more convenient that the employer should keep the card and stamp it as required.


Are these to be specially designed stamps, so that they can be identified by the Post Office?


Yes; they would be adhesive stamps specially designed for the purpose. I presume that the card is a three months' card. That is to say, it has provision for stamping for three months. At the end of that time the workman, with his card stamped for thirteen weeks, would take it and hand it to his lodge, and get in return a new card. When that full card is handed in, the approved society would send what I may call an invoice or statement of the account to the insurance office, showing the full amount payable to the society in respect of those contributions. The cards would be sent to the office so that the office might see what the membership is of that society, and also that it might see that the cards are properly stamped, and that it might check them with the statements of the accounts. That contribution made by the workman and the employer would be credited to the society in the books of the insurance office. It might be that benefits had been distributed before the amount has actually been paid over. That is really the whole machinery with regard to the card. It is a very simple form.


The hon. and learned Gentleman has not told us what happens when a man is sick. Suppose a man falls sick and draws sick pay, who is responsible for making the proper entries, or what entries should he made on the card under these circumstances?


The entries would depend upon the name of the society and the conditions. The hon. Gentleman knows that members of societies subscribe to certain rules and conditions, and before a man can come upon a sick fund he has to send in his claim. When these conditions have been complied with the man would receive sick pay, and that would be entered up in the books of the society. There would also have to be an entry on the card. Of course, that would be done by the approved society. It would be necessary to have some record in order that you might see how many weeks payment had been made to the man, so that you might see when the first thirteen weeks expired and when the next thirteen weeks began; and also that you might see how many weeks' sickness payments had been paid to him. That is a mere question of machinery between the society and the member. In this way, by taking the card to the society, the member is always kept in close connection with the society, and one of the objects of the scheme is to promote mutual aid and good feeling and kindly and constant intercourse between the members of the society. That is one of the objects sought to be attained by the provisions in this Bill. That brings me to the end of what I desire to say to the House upon the machinery of the Bill.


Would the Attorney-General kindly tell us what would happen in the case of the cards of Post Office contributors?


That would depend upon the regulations made by the local health committee, who, it will be remembered, is charged with the administration of the Post Office part of the contributions. I do not want to take up the time of the House in explaining that. The House is fully aware that one of the duties of the local health committee is to make regulations which otherwise would be made by an approved society. The whole of this scheme as presented in this Bill is, in my judgment, the greatest effort ever made in constructive statesmanship to remedy the evils and alleviate the misery caused either by sickness orunemployment. I quite agree that the comment may be made that it is a bold scheme, but that is not necessarily contentious. A bold scheme may be a very good scheme, provided that it is not a rash scheme. It makes all the difference in the world how you draw your scheme. This is an attempt made, I am quite sure the House will recognise, in all honesty and in ail earnestness, to grapple in one measure with all the difficulties and complexities involved in a great problem. We are not in this matter entering upon unknown or unexplored territory. The House must remember that. We have a large accumulation of statistics and facts based upon the experience of Germany in regard to this form of insurance, and we have also the advantage of the data collected by the various societies in this country which have dealt so long and so well with sick benefits and invalidity benefits. All these data have helped either to form or it may be to correct the expectations which have been formed by those associated in the framing of this measure. All of it has been useful in bringing us to a conclusion as to what can be put in the Bill, what can be dealt with in this Bill, and what is the best means of dealing with the whole problem.

I am not suggesting for one moment that in every case the best expedient has been adopted. I am perfectly well aware—and all those who have to frame Bills know—that a number of alternatives suggest themselves when some matter of practical detail has to be considered. A number of alternatives have to he carefully weighed and opinions taken upon them before eventually a conclusion is formed as to which will be the best in the end. The House will also remember in considering the measure the amount of time already devoted to it by my right hon. Friend the Chancellor of the Exchequer, and that we are not in this matter dealing with a hastily constructed scheme. We are dealing with something which is the result of much labour and effort devoted to it—much more than the House will be able to fathom. It is the greatest tribute that can be paid to the constructive capacity of the German nation. The German nation has been the pioneer of compulsory insurance, and my right hon. Friend has studied all the details of the system, and has sought to adapt it to our conditions and requirements. I venture to suggest also that, with the advantage of the accumulated knowledge thus attained, he has been able to improve on the system in force in Germany, and this House has now the opportunity of placing the nation at the head of the world in social reform.

Hitherto Germany has held the lead in this matter. Now is the moment at which we can make a bold bid for the first place. It lies with this House to say whether or not we will succeed. In the midst of the gaieties and festivities of this memorable year this House can show that we have not forgotten the just claims of our great working population, that we can relieve some of the anxiety of the bread-winner, that we can help to brighten his home and lighten his task. And it can do something more important even than that. It can help to check, to arrest, and even to prevent disease, and among those who are least able to resist disease. Truly it may be said, and it has been said, that such a measure strikes the imagination of the world. And therein I believe lies its deep significance, because we who are primarily concerned with the interests of the workers of our own country must remember this, that it is not only to them, but to the workers of the world that the passing of this measure is of importance. I am quite certain that I am not exaggerating when I make that statement, for you have only to look at the Press of the world at the present moment to see that the eyes of the world are riveted upon this measure, and the progress it makes in this House; and its fortunes will be followed and are being followed front day to day in this House. Its acceptance by this House will be an example which other nations will, and I believe must, follow, and we who are Members of this House, forgetting for the time being the differences which so often divide us, and co-operating in this instance with one common purpose, will have the opportunity of moulding and fashioning this measure into the ultimate shape which it will take when it leaves this House, and when it ultimately becomes a statute of the realm. And I do believe with all my heart, and with the deepest conviction, that we shall look back upon this measure, if it passes into law, we who have taken part in it, we who have devoted thought to it, we who have given efforts to it, as we shall all have done in the Committee of this House, in attempting to make the best measure of it before it leaves us, we shall hereafter have pride and satisfaction in looking back upon our labour in having constructed one of the greatest monuments of social legislation which the world has ever seen.


I think that the House desires to thank the right hon. Gentleman the Attorney-General for the businesslike statement he has made to us of the provisions of this Bill. He has dealt with some criticisms which, in a friendly spirit, have been levelled against some of its provisions from this side of the House, and I regret he was not able, probably from lack of time, to deal with some which were made in the very able speech of the hon. Member for Salisbury (Mr. Godfrey Locker-Lampson) yesterday. Those criticisms were, in my view, very much to the point, and while the House on both sides has welcomed any indication from this side of a desire to co-operate, I hope the House, when criticisms are fairly and honestly made, will not think that there is any slackening in the desire to cooperate. The main principle of this Bill is compulsion, and the case for compulsion rests almost entirely upon figures. Under the voluntary system the friendly societies, with their own voluntary organisation, have already provided for sickness insurance for some six millions, and in the insured trades the trade unions have provided for insurance against unemployment of some 400,000. Those figures taken alone are fairly large figures, but the moment you apply the Estimates of the Chancellor of the Exchequer and the actuaries of the numbers of those who will be in the compulsory scheme, and see that in future 13,000,000 are to be insured for sickness compulsorily and some 2,400,000 are to be insured against unemployment, then the case for compulsory legisation, to my mind, is unanswerable.

I start, and I fancy a great many will start, with almost a fear of upsetting the voluntary organisations of this country which have done so much good, and naturally we start, therefore, with a desire to find some means of extending their work on a voluntary basis; but one is compelled, the more one studies the question, to come to the conclusion that if anything like these large numbers are to be brought within this scheme, there is no other way of bringing them in except by compulsion. But a compulsory scheme must therefore be judged, as it seems to me, by two facts. Does it carry out its provisions without hardship, and does it carry out those provisions effectively? By effectively I mean as regards unemployment. Does it carry out the insurance without creating by its very provisions more unemployment; and, as regards sickness I mean, when these extra numbers are brought into the net by compulsion, do the provisions of the scheme keep them there, or tend to drive them out or let them slip out? I pause for a few moments, if the House will allow me, to apply those two tests to the scheme of the Government, and in doing so to review certain provisions in the scheme with which I am not in agreement. I will deal very briefly with the first point, with regard to the question of actually causing unemployment. A large additional charge under this scheme is being put upon the employers. In the building trades, which do not suffer from foreign competition, no doubt the cost will be added to the price of the contract, and neither employer nor workman is likely to pay. In the big manufacturing businesses and the better organised businesses, I think it extremely probable that the same result will follow. But it will be different with the small businesses—and there are very many such small businesses, engineering businesses—which, as being also an insured trade, will have the double contribution to pay, that is for insurance against unemployment and also insurance against sickness. In the small engineering businesses, I feel confident that the charge that is put upon the employer will make a real difference to him.

I do not mean to say that it is necessarily going to shut up businesses, but there are times, especially in slack times, when the employer will put the question to himself, "Does it pay me better to close down, or can I struggle along until the next time of good work?" That is a risk. If it does in fact cause irregularity of employment, it will undo some of the good work which it is hoped will be done by this scheme, and the very method in which the Government is proposing that the contribution should be levied tends also to aggravate this difficulty. For the contributions bear no relation to the profits of the industry, but are maintained so long as the employer goes on employing; but the moment he closes down, even for a short time, then the contribution ceases, and the employer is no longer responsible for the extra liability. While putting that criticism before the House, I would suggest to the Government to con- sider whether there is not some method of so arranging the contribution that the employer should pay it—I do not want to let the employer who can pay it off his share—out of profits in some form or other. I will now deal for a moment with the second point. You are driving a large number of persons into a compulsory scheme. You are deliberately making your net wide enough to catch a very much larger number of persons than the voluntary societies do. That, indeed, is your justification. But will you keep them there, and is your scheme designed to keep them there when once you have got them into the scheme? It is, of course, extremely difficult to estimate how many will be forced out of the scheme by their inability to continue to pay contributions —I mean how many insured persons will fail to continue their contributions, and so will lose the benefit of the insurance, and any estimate is necessarily extremely speculative. It is a subject of great importance, and we ought, if we can, to make up our minds upon it, because to the extent that the scheme lets go those whom it originally brings in, to that extent does the scheme fail in. carrying out the object of compulsory insurance, and to the extent that you keep them there, and that you provide insurance for them, to that extent does your scheme succeed.

The actuaries' report gives us little or no guidance in the matter. They have taken no account of lapses due to emigration, or due to insured persons rising above the wage limit. Nor do they take into account, transfers from the friendly societies to the deposit contributors' class, and I do not propose either to take any of those into account. But the actuaries' estimate tells us that there will be 882,000 persons in the deposit contributors' class, 882,000 who are unable to gain admittance to any of the approved societies owing to their ill-health, and those 882,000 will fall into the deposit contributors' class. But there must be and will be many more who cannot continue to contribute to the approved societies, and who, because they are unable, will also fall into that class. It is extremely difficult to make an estimate, but we have some guidance. The Chancellor, in his speech on the First Reading, stated, and I believe accurately, that 5 per cent. about of those who are now members of the friendly societies fall out each year, owing to their inability to continue to pay the contribution. It is quite true that there are some provisions in the Bill, especially those referred to by the learned Attorney-General yesterday, which, it is suggested, prevent lapses for certain percentages of failures to pay contributions. Those provisions will to some extent prevent lapses in the future, but we have the fact that 5 per cent. of the members of the friendly societies, at the present moment, lapse each year, and into those friendly societies you are now driving some 7,500,000 of people who do not go in there as volunteers or because they can pay, or because they expect to be able to pay, but who go in because they are compelled to go in. Among that class it is safe to assume that the lapses will be greater than among those who go in as volunteers.

I am very anxious not to exaggerate the figure, but if you apply it all through to those who are expected to be members of the approved societies, you will find that the 882,000 of the actuaries' estimate will increase to 1,500,000 of persons as deposit contributors. That, so far as statistical information is concerned, is as far as we can safely go. But how many must depend almost entirely upon the attitude of the friendly societies themselves? They may, and some lodges undoubtedly will, resent a large number of extra men being driven into these societies. The new entrants may or may not have the old club feeling, the old feeling of fellowship, the old feeling of mutual help which is at the bottom of and is one of the best features of the friendly society movement. If a particular lodge chooses to say, "No; we prefer to keep amongst us only those who have joined us voluntarily, and we do not wish to enlarge our membership to any great extent," then a great many more than I have anticipated will have to seek refuge amongst the deposit contributors. It then becomes important, if we wish to test this scheme, to ascertain clearly what is the position of deposit contributors. I was in hope that the Attorney-General would have dealt with their case, or the Chancellor of the Exchequer, or President of the Board of Trade, but up to date nobody on that side of the House has had, shall I say, the pluck or the hardihood to attempt to support the provisions of this Bill with regard to deposit contributors. "Deposit Contributors" is a long name, and in all probability, I venture to prophesy, that they will be known as the D.-C's., or the "Down-casts," because they are literally those who are cast out from any and every form of insurance which is contemplated by this Bill.

Consider what their position is. First of all they are driven into the Post Office because they cannot get, into friendly societies, not because they are not men of good habits, not because they are disreputable members of society necessarily, but because they have perhaps suffered from some industrial disease or other illness which prevents their living to the average length of life, and they are unacceptable to the friendly societies. They come in as deposit contributors, and for fifty-two weeks they contribute without having one solitary (lay's provision for sickness if it falls upon them during that period. At the end of the fifty-two weeks what is their position? They, the employers, and the State, will have contributed 39s. to their credit, and there will be debited to them the cost of medical benefit, sanatoria benefit, and administrative expenses —a total of 14s., and there will be left to credit the sum of 25s, or two and a-half weeks' sick benefit, all that the deposit contributor can possibly obtain after having stood out for fifty-two weeks. I do not want in the least to mar the harmony of the proceedings by saying what I really think of the position of the "down-casts"; but what we have got to consider is are you justified in driving some million and a-half at least of people into this position? The Attorney-General shakes his head. I hope from the Treasury Bench we shall receive some answer. I have shown him how I have built up my figures of a million and a-half, and I believe that is absolutely the minimum limit of the numbers who will be in the scheme. I believe it is not too much to anticipate that at least double the number will be in the scheme, and I ask the House to consider whether they are justified in driving so large a number into the scheme of deposit contributors, and, when we have got them there, giving them the miserable benefit such as I have described.

Is that insurance at all? Are not some of these very people much better covered by their own private methods of insurance than by what, under this scheme, you are going to do? Let me give one example, that of a Liverpool firm, which is well known, and which has a dividing society in its works. There the average contribution is 2d. or 3d. a week, and the work-people are entitled to get half wages for twenty-six weeks in case of sickness, and afterwards quarter wages for so long as their sickness may continue. In addition they are entitled to some relatively small funeral benefits, and also medical attendance. All that costs the workpeople between 2d. and 3d. a week. As a matter of fact, the firm double the sickness benefit without charging additional premium at all. But for purposes of comparison one has got to consider what the people who will be driven into this scheme of deposit contributors are now getting by their own efforts, and at what cost they are getting it. I could give you a long list of dividing societies who already insure some million and a-half of people, and who are getting at an average net cost—after taking into account the distribution at the end of the year—of 2d. or 3d. a week, benefits four or five times as much as you are proposing to give to the deposit contributors. I again ask the House, are we entitled, under the name of compulsory insurance, to offer these people two and a-half weeks' sick benefit at 10s. a week at a cost to the entrant of 4d. a week, and make them exchange for it what they are now getting at a lower cost, and which is worth two or three times as much as the State is offering? I know that there is an objection to dividing societies. It is said that they are financially unsound; it is said they are only able to continue because the younger people pay for the older people in the scheme. But what is the Government doing? They bring this objection against dividing societies, and yet they are dealing in precisely the same way with the younger people under their scheme. The sum of £807,000 a year is to be taken from those who are compelled to insure, and who are under the age of sixteen years. That sum of £807,000 is being taken from those who are under sixteen years of age and put into the Insurance Fund for the purpose of equalising the benefit given to the older members.

The Attorney-General last night, in answer to a question put to him by the Member for East Worcestershire (Mr. Austen Chamberlain) said that the younger members of sixteen were getting full value for their money, and that those of forty-five and over were getting, it is true, a benefit, but not getting it at the expense of the younger members. I have refreshed my memory by reading the OFFICIAL REPORT, and the Attorney-General went on to say that they were getting something for their 7d. which was fully worth the 7d. But that is not the whole point. I venture to think that the right hon. Gentleman the Member for East Worcestershire took a perfectly good point, which was not answered by the Attorney-General. The actuaries' report brings out the cost of the insurance of those of sixteen or thereabouts, because for the next few years it differs very little indeed, and comes out at 6¼d. per week. But these young people are being charged 9d. I know that some say that it has to come out of other pockets than their own, but there is being paid in respect of each person of sixteen years of age a sum of 9d. to the Insurance Fund. If the Attorney-General says no, only 7d. is being paid, partly by themselves and partly by their employers, well, then, none of the State subsidy is going to the young, and it is going to the older members. The Attorney-General may have whichever half of the argument he likes, but he cannot have both. The Government are doing precisely what they object to in the dividing societies: they are making the deposit contributor scheme and their general scheme sound, because they are making the younger members, those under sixteen, pay £807,000 without getting benefit, and those over sixteen, and probably up to thirty, pay more than the market value of the benefits they are getting. Every argument that you can use against the dividing societies can in my view be used with equal force against the deposit contributor scheme. When you come to medical benefits, so far as regards the deposit contributors, the Government is avoiding all liability. In respect of that you are going to pay a sum, which you have not yet stated, as a per capita grant to the medical men—it may be 4s. or 5s., or it may be more—but whatever it is it is to be a fixed sum for each entrant into the scheme.

With regard to sick benefit of the deposit contributors, you take great care to limit it to two and a-half weeks for fifty-two weeks' contribution. With regard to medical benefit, you let it run on for the whole life of a member, but you have transferred the insurance amount to the doctors. They are to have the fixed rate, but you are to get a limited liability in respect to the medical benefit to deposit contributors, and you are transferring the unlimited risk, the only risk, to the medical men. I ask the House to very carefully consider, before they approve of a compulsory scheme which has in it those, to my mind, most serious defects — the method in which the deposit contributor is shut out of benefits, and is not given sick insurance at all, and the method in which the liability for medical benefit is transferred to the doctors. Of course, for the sake of uniformity it is very pleasant to be able to divide the whole of the community into two classes—the aristocrats, who go into approved societies, and the other, the "downcasts," who go into the Post Office Fund. The plan has the merit of being simple and drastic, no doubt, but in my view it has the great demerit of being harsh and unfair. If the House will consider for a moment the unemployed part of the insurance, let it again ask itself this question: Do the provisions of the scheme keep in insurance those who are brought, in the first instance, under the compulsory scheme? Let us find the answer to that question in dealing for a moment with the unemployment section. There you have got a qualifying period of six months. Now, it seems to me to be most unfair. You are compelling people to insure against unemployment, and to have contributions deducted from their wages for a period of six months before you give them any benefit. If, after five months, any one of these workmen was unfortunate and fell out of work he would get no, benefit whatever out of the insurance against unemployment. On the contrary, if he remained out of work long enough his five months' contributions would be forfeited, and would go to help the better employed man, and swell the Fund which is going to pay him.

I do not want to make any suggestions which will overload the scheme, or which will increase the cost, and so make it difficult to carry through, but the abandonment of this six months' qualifying period will not overload the scheme, and will not add to the cost in such a way that it will make it difficult to carry through. I do not say that on soy own authority, but on the authority of the Government actuary. In paragraph 21, page 8, Mr. Ackland has shown the basis upon which he has drawn his scheme. He has got a margin of 9½per cent. for contingencies, and there are four provisions in addition which he retains as extra margins. This six months' qualifying period is one of the four additional safeguards over and above the 9½ per cent. I therefore urge strongly on the Government that they should consider the desirability of giving up this one extra safety margin over and above that which the actuary has considered necessary for real safety. The case for compulsion will break down unless the scheme is so arranged that it does keep in to insurance all those, I will not say eyeryone, but all those that it is possible to keep after once having got them into the insurance scheme. Unless, therefore, you improve the deposit contributor's position and remove this qualifying period it seems to me you will not justify your claim for compulsion. There are one or two other matters to which I shall refer, but in common fairness I should say that while I have pointed out some things which I wish to see altered, there are many many things in the scheme which have my wholehearted support. The very ingenious table to which the Attorney-General directed our attention yesterday is the invention of some extraordinarily clever mind. I should like to meet him. The scheme is not complete, as the Bill is now before us. There are twenty-nine regulations and twenty-four prescriptions to be made before the Bill is complete. I do not mean doctors' prescriptions, but I mean things which have to be prescribed. Some are most important, and nearly all fundamentally important. Clause 57 is really a masterpiece. It is called "the power to remove difficulties." It ought to be called "the power to remove the Bill from House of Commons," because if any difficulty arises in bringing into operation this part of the Act, the Insurance Commissioners, of course with the consent of the Treasury, may do anything which "appears to them necessary or expedient for bringing this part of this Act into operation, and any such order may modify the provisions of this Act, so far as it may appear necessary or expedient for carrying the order through." I really wonder what is the good of the House of Commons; it would have so much more simple to have appointed the Insurance Commissioners first and given them and the Treasury a free hand to remove the difficulties of our consideration of the Bill. All the same, I will call attention to some of the points-upon which regulations may be made. The position of existing friendly societies, for example, is one of the things that may be approved. "May." There is nothing to show, except after the scheme is passed by the Registrar of Friendly Societies, upon what lines he is going or what principles are to guide him in giving his approval. Surely it is important that this House should lay down the principles and ought to say what class of friendly society and under what conditions the friendly societies should be approved. We ought also to have some say in settling this scheme. I do not mean the details, but the broad lines, and then delegate our powers as regards details to the proper officials. But there is no laying down of even main principles with regard to settling these schemes. They are very important, and from the friendly societies' point of view it seems to me that we ought not to let this Bill go from us until we have given some more protection than exists in the Bill at the present.

Let me put one case to the House. Let us take a lodge which has a surplus at the present moment, one lodge under an affiliated order, and let us say it has a surplus over and above liabilities. I know many such lodges, or at any rate some. I happen to be a member of one which has over twenty shillings in the pound. What is going to happen to the funds of that lodge. The Government are going to take away five-ninths of the liability for which those funds are reserved at present. Let us say the lodge holds £9,000, which is held in hand to meet liabilities which are outstanding in regard to insurance which they have granted to its members. The Government comes along and says, "We, the Government, will take over two-ninths of the responsibility to benefits (minimum benefits) and we will put on the employer three-ninths of those responsibilities and therefore the lodge is relieved of five-ninths of the future liability for minimum benefits under the Act." If in the lodge to which I referred the benefits were only the minimum benefits, and if there were no additional benefits, then five-ninths of that £9,000 would be released and would not need to be held in hand to keep the lodge solvent. It is not quite so, because in all lodges there are some additional benefits beyond the minimum benefits of this scheme. Let us assume that £3,000 is released and is no longer required to be held by that friendly society to meet the insurances outstanding. What is to happen to that £3,000. There is nothing in the Bill, there is no guidance from the Registrar of Friendly Societies as to what is to be done. Is it to belong to the existing members? Is that to be a Government gift to existing members. Would the Attorney-General say?


was understood to say the accumulated funds of the societies will be protected.


Perhaps I should not have asked the question, and the learned Attorney-General has not, possibly, followed my argument. That £3,000 in hand is a surplus in this sense: that a liability has been taken away from the society, which had reserved against that liability that £3,000 which is set free. What is to happen to the £3,000? Is it to be a present to existing members, or are all new entrants who are driven into the scheme by compulsion under this Bill also to share in the £3,000? We ought to be able to make up our minds about that. This is a thing which ought to be laid down in the Bill, and not left to regulations. There are many more ambiguities. For instance, what is to happen to existing members of friendly societies after this Act comes into force? For a period of six months they will not be qualified under the new Act. Are they to remain uninsured for that six months, or are they to be entitled to continue their insurance with h their society. There are still further ambiguities. Will the Government keep the future contributions which are to be paid by stamps for the first time. This afternoon we have had some light upon this subject from the Attorney-General, who told us that there are to be three-monthly cards. If I understood him correctly, when the Government had collected all the cards for the three months, at the end the credit would be given to the friendly society for those cards. What for? Are the whole of those contributions going to be paid over to the friendly society, or is it a subsidised benefit scheme? In most parts of the scheme you are saying that you are paying two-ninths from the Government. That is a subsidised benefit scheme; that is a contributory scheme, under which the Government contributes along with the workmen and the employer, and leaves the friendly society with the contributions to manage in such a way as it likes. This on the other hand is a subsidised benefit, but apparently there is to be some sort of cross between the one and the other, and at the end of the three months the stamp amounts are to be credited to the societies. This is a matter of real importance, because the local lodges of friendly societies have done immense good by the way in which they have utilised their funds. They have lent small sums of money on mortgage to their members, to enable them to buy their houses. They have been able to get very good rates of interest, and much better rates than the National Debt Commissioners will get if the funds are accumulated in a central office, and all the good that has been done from judicious local investment, and local help to members will be undone if in the future the friendly societies are not to be allowed to have their funds. I call the attention of the House to this because no friendly society can judge at the present moment what its fate is to be.

5.0 P.M.

Another point of real interest is as to the position of soldiers and sailors, and as usual they are coming off second best. In the Bill there is only one thing we know as to what is to happen to the soldiers and sailors, and that is that the Government is to deduct 2d. per week from their pay, that is all. With regard to the civilian, you know how much the employer is going to pay. With regard to the soldier or the sailor you do not know how much the Admiralty or the Army Council is to pay to the contribution of the sailor or the soldier. Nor do you know his pay later as that is to be made by regulations. The Army Council or the Admiralty may make regulations with regard to a scheme, or they may not. Personally, I have a great distrust of Army Regulations. They regulate amongst other things that service pay shall no longer be given to soldiers in the Army, and notwithstanding efforts on this side of the House we have never been able to get the War Office to see that that regulation is unfair. It all depends upon the regulations, and I say for myself, quite firmly, that I shall not be satisfied unless the sailors and soldiers are treated in as good a way as the best men in the approved societies. When they join the Service they have to be in good health. If, when they leave the Service their health is impaired, it is not their fault, and they ought not to be handicapped because of that want or loss of health, probably caused by the conditions of the Service, from getting equally good benefits with the best of the approved societies. If their health is not injured they will be able to go into the approved societies, but if they are injured the benefits this Bill provides for them is 5s. a week invalidity pay, and that is not equal benefits at all. With regard to the unemployed, the same want of completeness runs through the Bill. Here, again, you are thrown back upon the regulations. One would have thought that the first question to be asked could easily be answered. A man says to you, "Am I in the Bill or not?" That is a question that you cannot answer; it is absolutely impossible to answer it. Take the case of an engineer of a suction gas plant. If he is working in a motor factory will he be an assured person? Supposing he is not working in a power factory? The Bill does not point out what kind of factory is to be included as an engineering factory, and it is left to the regulations to say whether he is an insured person or not. How can this House, or the people of this country make up their minds whether this Bill is a Bill they can support or not until further information is given upon the subject? I have kept the House very much longer than I intended, but I felt it was my duty to point out what I thought were some of the great deficiencies in the Bill and to appeal to the Government to give us at least the main regulations, the main prescriptions, before this Bill goes into Committee for detailed consideration, otherwise it is a farce of the Government to ask all sides in this House to support them without giving us the material upon which the House can work, and although I think in some respects the scheme is crude and incomplete and falls short of an ideal scheme of State compulsion, I am certainly going to vote for the Second Reading in the hope and the belief that the Government will accept Amendments, and that when finally the Bill has passed into law the hopes and wishes of all of us, whose object is to bring within the benefits of insurance those who are at present excluded from the voluntary associations, will be in fact realised.


I think no one will approach the consideration of this Bill without being at once struck with the magnitude of the scheme and the far-reaching character of its provisions. To my mind it is the boldest attempt to deal with industrial problems which has ever been made, and I think it deserves the fullest and fairest consideration without prejudice by all the industrial classes. We, on these benches, are particularly interested in the solution of these problems, and if we offer criticisms and suggest Amendments to this Bill it must be definitely understood that we do so only with the idea of making it as good a Bill as it can possibly be made. The great friendly society and trade union movement, I think, deserves well of the country, because these societies have done a great deal to make any such a scheme as this possible. They have shown the way, they have provided benefits for the people in sickness and unemployment when no other institutions could have done so, arid so far as they are concerned they have been voluntary associations, but they have failed to reach the great mass of the population, and I think that is the only justification of this scheme being introduced at the present moment to this House. Everyone agrees that the object of the Bill is a good one, and I think the introduction of it and the character of some of the legislation that we have had previously shows that the nation is alive to its responsibilities and to the fact that it is time to realise it, and especially to realise it in the case of those whose position is not of the rosiest character.

There are points in this Bill which ought to be criticised, because I think they are deserving of criticism. There are some points which are certainly not as good as they might be. Take the sick benefit. The contributions of men are 4d. and 2d. for the employer, and the State supplies the remainder. For this the workman gets 10s. a week for the first thirteen weeks, and that is probably right in accordance with the actuaries' report. But what I want to call attention to is the fact that the women are not to be paid in the same proportion. The contributions of the men taken together with those of the employer and the State gives a total of 9d. per week. That of the Women. is a penny less, making a total of 8d. per week, but they are not getting under this scheme a proportionate benefit, when they are given 7s. 6d. per week. If it is worked out, the proportion between 8d. and 9d. comes nearly to 8s. 11d. per week, and I claim that they are fully entitled to the full proportion of their benefit, just the same as the men, and I think on that ground we will be compelled when the time comes to move some Amendments which will secure an addition of that sort. I fail to see why they should not have their proportionate benefit. I welcome the graduated system of contributions with regard to those persons who get low wages. I think it is a proper system to adopt, but we say it ought to go further. What does it do at the present time? It begins at 15s. a week, but there are many heads of families who do not earn more than £1 or 24s. per week. They are always on the poverty line, and it is a difficult problem for them to pay anything more, and I think that full consideration ought to be given to this part of the question to see if the graduation for lower wages should not be brought a little further in regard to those persons who earn from £l to 24s. per week. I imagine a case could be made out for exemption from payment altogether in a number of cases, but that is a matter for further consideration.

Then in regard to women who are married. Those who are employed in any occupation which comes under the Bill would have deductions made from their wages in accordance with the scheme, but everyone knows that young women are looking forward to something else, to forming a happy union with somebody else. The result is that when this takes place the contributions they have paid to the scheme will all lapse. The woman may have paid for five, six, or seven years, and the moment she gets married the contributions lapse, and she gets no benefit of any description. I should like to suggest to the Government that they might consider whether some scheme could not be arranged whereby, even when these women get married, they will still pay their 3d. a week and get the 2d. from the State the same as the man does, and get a proportionate benefit for the amount paid. Under these circumstances they would not have so much reason to complain, and I think there is a great deal of reason to complain in the arrangements as they stand at the present moment. With regard to maternity benefit, I think that is one of the best benefits in connection with the Bill, and it is quite a new feature to have such a sum of money given in these circumstances. But even here there is what I may term an inequality. A man who is insured gets 30s. in the case of his wife for the maternity benefit, although the woman is uninsured herself. The insured woman, under similar circumstances, has had to pay her contribution during the whole of the time, and she gets only the 30s. I think she ought to get the sick pay for which she has paid, and it ought to be paid to her in addition to the 30s. There is no equality of treatment in this, and it is one of the points on which we shall consider whether we shall move Amendments or not. I think we shall be compelled to do so.

An hon. Member yesterday spoke in respect of the medical profession, and urged that it was quite easy to allow persons who were sick to have the choice of their own doctors. They ought to have the chance of having their own doctor. Let the members of the Committee consider that position from their own point of view, and ask themselves the question whether they would like to have a doctor forced upon them whom they would not like. I think it is a good idea to have a list of doctors among whom they would have a choice, and that might be a solution of the difficulty. Everyone has a pre- ference for his own medical man, and that preference ought to be respected. There is a great outcry among the medical profession that they are not being fairly treated, that they are not going to have as much money as they think they ought to have, that their practice would be disturbed or lessened, and that their receipts for the work they would have to do would be less than they are at the present moment. If this scheme is to be a success it can only be a success with the co-operation of the medical profession, and I ask the Government not to have any stinginess in regard to this matter, and to see that we get the best medical man possible to attend to the sick who come under this scheme. With regard to the approved societies, we on these benches consider that the number fixed—10,000 members—for making a society an approved society is altogether too high, and ought to be reduced considerably; and I want to put in a plea for a large number of sick societies which exist in connection with the Sunday schools of this country. There is a very large number of them in Lancashire. I have been a member of one of them for forty years myself. They have not in each case a large number of members, perhaps a few hundreds. They are good societies; people enter into them in early life, when they are attending Sunday school, and they generally continue to be members as long as they live. They refuse to join other societies such as the Oddfellows, Foresters, and others on account of their having meetings in public-houses, and I think that in view of the fact that there is such a large number of societies of this description the figure for approved societies ought to be reduced, and I would suggest something like 2,000 in order that these small societies winch are well conducted, and have proved by experience that they are sound, should be able to join themselves in an association on the same terms as the others.

There is one matter the trade unions movement and trade unionists feel very much. The hon. Member for Blackfriars Division (Mr. Barnes) mentioned it last night. It is sub-section (2), Clause 18, of this Bill. A trade union must be precluded by its constitution from distributing any of its funds otherwise than by way of benefits (whether benefits under this Act or not) amongst its members. These words "whether benefits under this Act or not "are very wide. Although the Attorney-General may say that it is not intended in any way whatever to interfere with the management of trade unions, or to prevent them in using their benefits in the way they have done, such as by sending deputations to Ministers and to Trade Congresses, giving grants to other societies, and in other ways which have been quite legitimate, although, I say, the Attorney-General may say that, we must have it made definite and clear in the Bill so that the trade unions may be protected. I recollect when the Workmen's Compensation Bill was under consideration in Committee, that we had a question put to the then Law Officers of the Crown in regard to construction which was to be put upon certain Clauses. We were answered in certain ways. We have found since then that the judges have put an entirely different construction upon what we were told the words meant. Hence it is absolutely necessary if the trade unions movement is to support this Bill that this particular point should be made clear.

At the present time a very large number of Members of this House have had letters from insurance agents. The Post Bags have been pretty well filled with them. The insurance agents are a body of men who are earning their own living, and who are fairly entitled to consider that they ought to be protected. So far as I can see there is nothing in regard to death benefits in the Bill. The agents are afraid that by some means or other the provisions of the Bill will be extended so as to interfere with them. What I would like to ask in this matter is that the Chancellor of the Exchequer, or the Law Officers, shall make it clear and definite in the Bill that these men will not be affected. Let a Clause be inserted that death and endowment insurances should not he allowed to come within the provisions of this Act, and that if the agents commence sick societies themselves they shall have equal opportunity as everyone else under this Bill.

In regard to Part II of the Bill, unemployment insurance, is entirely a new departure, and one which ought to be welcomed. It provides for the employer as well as the State paying a portion of the contributions. There may be some difference of opinion as to whether this is a just thing or not. Personally I think it is correct, and a thing which ought to be supported. It applies only in the first instance to groups of trades—the building trades and the engineering trades. The same contributions are paid by the workmen in each of the groups, but I notice there is not uniformity of benefits. In the one case it is 7s. and in the other case it is 6s. I daresay we shall be told that this is in accordance with the actuarial calculations in regard to the amount of employment in each of the trades. It would be much better, and give much more satisfaction to the workmen in both sections if they could come under a uniform benefit, especially if it could be put at the higher amount. Another point I want to call attention to—one I am not quite clear upon—is as to whether a person should be absolutely without a situation in order to obtain unemployment benefit?

In depressions of trade such as we have had during the last two or three years—I refer especially to our own case, the cotton trade—we have had in some cases organised short time. That is not paid for under this Act. But there are cases where portions of the machinery have been stopped for as much as ten, eleven, or even thirteen or fourteen weeks at one time, and the workman has been unemployed the whole of the time, although he has had a situation. As soon as the machinery was started again he has been able to go back without any reengagement. This is what we term "temporary stoppage." I want to know whether a workman in these circumstances will be entitled to draw unemployed benefit provided he is otherwise within the scheme? There is another point I want to mention. Suppose a workman is drawing employment benefit, there is a provision in the Bill which says that if a situation is offered to him at the current rat e of wages he must take that situation. This is a very important, matter for trade unionists. Let me put a specific question to this effect: "Will a workman receiving unemployed benefit who is a trade unionist be required to go to employment with a firm that does not pay the trade union rate of wages, or even if the firm do pay the trade union or current rate of wages, do not comply with trade union conditions as existing in the district, will that workman be compelled to go, or lose his unemployed benefit?"

If a trade unionist is compelled to go to work under the circumstances I have put he will be acting entirely contrary to the rules of trade unions generally. The possibility is that he will lose his membership, and it may be that he will have been paying to his trade union for twenty or thirty years. This is a matter that wants careful looking into, and I ask the attention of the Government to it. I put a question the other day to the President of the Board of Trade with regard to the reduced contribution paid by the employer when paid a year in advance. I asked the President whether the employer would be compelled to pay for the whole of his workmen if he paid for a year, or whether he could pay for a portion at the advanced rate, and for the rest of his men at the weekly rate? I was told that he could pay for a proportion. I do not agree with this. What will happen? The object of allowing the employer to pay a reduced subscription in advance is for the purpose of inducing him to regularise employment, and keep his men employed. But what will happen in practice will be that the employer will probably take a portion of his men, insure them, and keep these men regularly employed, and the others will be kept at play. They will be out of work repeatedly. I submit it will only be fair if the employer is to be allowed an advantage of this description, that of paying in advance, that he ought to pay for the whole of his workmen, and so treat them all alike.

There is one other matter, in regard to unemployment benefit, and that is with regard to recognising trade unions who pay on their own account. There are many societies who have established schemes of this description who have unemployment benefit to the extent of 8s., 10s., 12s., and even more per week. In respect of these voluntary schemes, I understand that one-sixth of the amount is to be repaid to the society which is paying unemployment benefit. That is what is known, I understand, as the Ghent system. It is a good provision. It is one which will perhaps induce members to pay more regularly to trade unions, and will encourage trade unions to pay unemployed benefit. But there are unions, especially labourers' unions, whose members get small wages, who pay a small contribution, who cannot pay a large one, and consequently these unions do not provide unemployed benefit. I want to ask if something cannot be done to induce the members of these unions to pay a rather larger contribution for the purpose of receiving unemployed benefit? I ask, could not the State alter the proportion of one-sixth, and make it in these cases something like one-fourth or one-third? The benefit will not perhaps be a larger amount than the members would have if they belonged to skilled trades, because the amount of unemployed benefit which these unions of unskilled men could pay would be perhaps not more than half the amount of that paid by the unions of skilled members. But I offer that suggestion to the Government to consider, so that the societies who do not pay unemployed benefit may be induced to do so. Seeing these unskilled labourers with low wages have to pay their proportion of the taxes for the purpose of providing this unemployed benefit to the skilled unions, I think that in common fairness they ought to be entitled to share in the benefits. I trust that the suggestion that I have made will be considered. There is a good deal to be said for the Bill. We desire to see considerable amendment to it. It is necessary. Our attitude on the Third Reading will very largely depend on the question as to whether this Bill has been made a better Bill than it is at the present time. We offer this criticism in the best spirit, but in a candid spirit, with the idea, so far as we possibly can of seeing that the Bill is made as workable and as. satisfactory to the workers of this country as it is possible to make it.


I wish in the first place to protest against the issue of the actuarial data shortly before the Second Reading of the Bill was taken. As one who has endeavoured to examine thoroughly the proposals of the Bill, I have been placed in a position which has been very awkward and indeed very painful, and I must ask the House for a little indulgence with me if my brain is rather reeling in having attempted to do what I believe very few Members of this House have chosen to do. The importance of this subject cannot be overrated when we are dealing with, in my estimation, some fifteen or sixteen millions of people, who have not been accustomed to State compulsion hitherto; when we are dealing with grown-up people—in the main—we really ought to pause and lay ourselves out for the most careful and searching examination of such a Bill as this. I therefore protest against the intimation which appeared in the Metropolitan Liberal Press yesterday that in Committee of this Bill a short time was to be allotted under the compartment system for a few clauses, and they almost assume the time the House will rise after having passed this Bill in all its stages. I drew attention yesterday, and no answer has been given from the Front Bench, to the lesson conveyed in the fact that the German Parliament had been engaged for twelve months over a similar Bill, having had the advantage of State data which is not available for our Front Bench here.

I am making these remarks as a friend. I want to make that perfectly clear. If I were an enemy of this Bill my task would be very simple. I would absent myself from the House, and take a very easy time. But friends of the Bill must not do that, because if the Bill goes through in its present form there is no doubt it will be unworkable. It is all very well for the President of the Board of Trade to say that the employers have not communicated any objection to the scheme. They have not had time. Has any employers' federation endorsed this Bill? Can you conceive what the opinion would be of a meeting of the farmers, or even of the great cotton trade, or even the coal-masters? I am not going to stir up opposition to this Bill, but as a friend I warn my own leaders that they must not, because no opposition has been taken, presume an entire absence of it in the future. I have endeavoured so far as I could where I have met opposition to allay the fears of those concerned. I say that quite candidly as one who does not intend to take the employers' view in this matter. Further, I will make this challenge to the Government. They boasted—perhaps I should not say "boasted" — they "claimed" in the most eloquent and forceful speech made by the right hon. and learned Gentleman the Attorney-General yesterday to have had the experience and advice of some of the leading actuaries of the country. As a candid friend I say to them that if they will submit this scheme to a meeting of actuaries, I think they will find that it will be very severely criticised. I deny, speaking from my own personal knowledge, so far as I have gone, that the scheme of contributions and benefits, that the provisions of the Bill at the present moment, would meet with the assent of the actuaries of this great city. Many of them it is true have not had time to look through the reports, and so on, but the main criticism is that the actuaries employed have not had sufficient data to guide them in this most responsible work. That is the general view of Members of the House; it is claimed by the Government that no one in the House has contended against any of the vital principles of the Bill. That is not my experience in the Lobby, in the Smoke Room or in the corridors of this House. I have taken down questions put to me by hon. Members in connection with this Bill. The Government will say these are Committee points, but I warn them they will not settle this matter piecemeal in Committee, and if they do try to settle it in that way the whole fabric of their scheme will fall to pieces. The great problem we must set before our minds is to preserve all that is good in the scheme, and at the same time cope with its apparent objections. A considerable portion of the remarks which I intended to make I need not make now, because of the speech of the hon. Member for Gloucester.

I identify myself with most of the criticisms he offered, especially in reference to the friendly societies. I cannot conceive that a great State like Great Britain would attempt to establish colonies of workmen and workwomen in the form of these outcasts who are referred to as the Post Office depositor and leave them in that unhappy character. It may be that the object is to drive them somewhere else, but there is no attempt on the part of the State to open another door. The State compels these people to contribute; it is attempting to drive them into the friendly societies, but the State does not compel the friendly societies to open the door to receive them. We cannot as statesmen, or with any pretension to statesmanship, leave so large a portion of our fellow-countrymen and our fellow-countrywomen in the plight which this Bill leaves them, going to the Post Office to pay their contributions, but with so little chance of ever seeing their money again.

I wish to impress upon the House the fact that this scheme goes far beyond what has been hinted at by the speeches which have been made introducing and explaining the Bill. It seems to roe it alters the whole relationship between employer and employed and the relationship of both to the State. It involves the future of the voluntary agencies, the thrift societies, and insurance companies, and strikes at numerous societies and makes a perfect distinction between both sexes and stereotypes the basis for both in every walk of their active lives. It also decides the future of a great profession. It will have a potent influence upon the question of emigration; it decides to forcibly take and spend a portion of the worker's wages, although in many cases he could get better value if he spent the money himself. I think a Bill of that tremendous scope surely cannot be hurried through Committee. We must invoke the experience of the Local Government officials in the country, of the insurance officials in the country, of the friendly society officials in the country, of the workmen in the various federations and trade unions, and all other experience which we can command. I venture to say that not merely should the Government have all that assistance, but Members of this House should also have assistance given them by hearing the views freely expressed on behalf of these various bodies.

This scheme differs from any State social scheme ever introduced in any other country. It supplements highly organised and all-powerful State officials with voluntary workers to accord favours and decide the fate of the scheme. Friendly societies and insurance companies with their dependents and servants and their well-conceived machinery will have the effect of making many people a little more wide-awake than in regard to numerous matters that will have to be determined in the future Act, or by regulation. Supplementing the bureaucratic army of officials, you have on the other hand voluntary agencies, irresponsible people who have it in their power to make or mar your scheme by being lavish or niggardly. I maintain in no other country is there a parallel to that position. I want the House to see that this far-reaching experiment should be hedged round with all the safeguards possible. The second total difference between this scheme and that of any other country is that it covers ground already covered by private enterprise, and it interferes with the efforts of the working men who have already made ample provision from every point of view. In the great scheme of Germany, Bismarck had a clear field. Where is the parallel in this country? There were no great friendly societies, no great industrial insurance societies, and no great trade unions in Germany at the time he commenced, and if there had been he would have waived them aside as negligible quantities. He was not a Parliamentary statesman in the sense of our leaders. He had a free hand; he had only to please the Emperor and he had the forces of the State at his back. I venture to say that the experiment he made was a very different one from the one we are making in this country. Here the ground has been already covered and to a very large extent by voluntary agencies.

As an old Radical, and as a sincere admirer of Cobden and Bright, I naturally shrink a little from the word "compulsion." It is distasteful to me, and I believe I shall have millions of sympathisers in the country. The House has evidently decided in all quarters to adopt this idea of compulsion, and in these circumstances I do not propose to argue the question. I am not to be taken as against it. I only say I am not convinced. I would rather there had been a scheme on a contributory basis 'where the State could come in and give some inducement by an addition to the contribution now made, but if the House is determined to introduce the spirit of compulsion, and if that be thought to be necessary, I do not intend to offer any opposition; I hope the experiment will succeed, and I say frankly I shall try to make it succeed; but it is not a suggestion which comes from me. The people engaged in voluntary effort at the present moment number about six millions. The object of this Bill, upon the compulsory side, is to try to bring in the careless, the feeble, the negligible and the thriftless. The Government say they cannot get at these people without compulsion; I think you could get at a great many of them by offering an inducement. I think it is clear there would be a very large addition to these voluntary societies if they got a contribution from the State in addition to their own amount. Assuming that you did that, you would increase the number from about 6,000,000 to 8,000,000 or 9,000,000. I ask this question of the friends of this Bill: How many do they think they will get in by compulsion? I think the assistance from the State to the voluntary scheme would bring in about 3,000,000 more.

How many will the Government get in by State compulsion? I doubt that they will get more than 10,000,000; they may possibly not get more than 9,000,000, and, of course, it all depends upon the amount of inducement in a voluntary scheme, because you must bear in mind that the very worst cases will not come even in under this Bill, because they cannot. The very poor and wretched and the very unfortunate people cannot come in under this Bill: it does not meet their case. There will be—I do not like to call it a residuum— but, at any rate, a very large fraction left out—and, therefore, we have to consider in applying this principle of compulsion the difference between it and an inducement to come in on a voluntary basis, and the numbers that will be whipped in by the State under compulsion. If we are able to get people in under this scheme, let us see how it will affect their lives. I will run rapidly through some questions put to me by hon. Gentlemen. With regard to questions put to me about the friendly societies, I will say this, in my judgment, as an old friendly society man, and one in high office at the present time, the friendly societies, as we have known them in the past, will pass away; the inducement to become members will be no longer the same. The example of the thrifty workman who makes careful provision for himself and his family, will cease to appeal as a lesson or an incentive to thrift in others, and will cease to have the same force in the future.

No active workers in these friendly societies will be able to claim the right of promotion to a district lodge or a grand lodge, because of the number of his fellow-countrymen he has induced to join the society, and thus one of the most delightful forms of activity in the friendly societies will be known no more. Secondly, members of friendly societies up to now like to stick to their own particular society through life, but under this Bill a man may go from one to another. He may become what is known in America as a "joiner," and the comradeship which has existed so long in these societies may cease to obtain. I claim on this ground, as well as on the ground that these societies cannot control the funds, and that they will constantly be receiving directions from headquarters, how the machinery of the State portion of the business should work, and the consequence of this will be that the friendly societies as we knew them will become a thing of the past. I am not here to say they will not he as good institutions; they may become better than now or they may become less efficient, I cannot tell. But what I am sure about is that they will not be anything like the institutions we now know. The collecting institutions have been referred to in this House. I will deal with that later, because I have an especial responsibility to the societies, "collecting industrials," as they are called. There are three kinds. I have not been able to gather from the answer to my question upon this subject that those in charge of the Bill realise that there are three distinct kinds, and three distinct interests in connection with these societies. It is a great mistake for the Leaders on the Front Benches on both sides to think that when they have dealt with the Head Office, that the whole problem is solved. I do not care to waste my breath in pleading for the rich man or the board of directors. This House has never failed in its duty towards vested interests. There is no need for my voice to be raised, but there are others, there are the large army of workmen and servants for whom I would plead. I mentioned just now that there are three kinds of industrial societies, such as the Prudential, the industrial mutuals, and the collective friendly society. There are three distinct groups with three distinct groups of ideas who consider that their interests are interfered with. This Bill touches the employer, not merely upon his contribution, for in addition to his contribution the employer is put to further expense, for he must keep insurance clerks. No hint has been given to us here how any employer will work this scheme. It is easy to say stamps must be put upon cards, and that no expense is involved, but the employer must employ State Insurance Clerks who study this Bill to insure the workmen.

The right hon. Gentleman need not think that that is an invention of mine. It is a common thing to see in the German newspapers large employers issuing advertisements for insurance clerks whose duty is to look after the employer's liability under the German Insurance Law. There is no doubt we shall have the same thing here. Will the employers like that? I hope they will, and I hope the scheme will be a good one. We shall know in due course, and the House will patiently wait for the ipse dixit of the leaders of industry. This question vitally affects the workman, and not merely those in unions, but more particularly the unattached workmen. It deals with societies and unions which may sue to obtain accident benefits. This point has been entirely overlooked—I do not say purposely —in the discussion. A trade union as an approved society may demand from a man's employer that he shall adopt the workmen's compensation benefit to which they think the workman is entitled. That is an important innovation in the ordinary working of an industrial concern, and it would lead to immense litigation. I think we are entitled to some explanation as to what the Clause means, and how far the Insurance Commissioners will encourage trade unions and friendly societies to bring actions against employers, not for benefits under the scheme, but to make them pay workmen's compensation benefits in order that they shall not come upon the sick funds of the society or the union.

We have introduced a flat rate of contribution. There are to be scarcely any differences, at any rate in the sickness part, with regard to the receipts. I only mention these things to show their importance, and I am not saying that they are wrong. As a new Member, I have tried to bring into prominent notice the vital parts of this scheme for the consideration of older Members. This Bill brings in the principle that youth must support age, that the healthy man must support the sick, that the temperate man must support the intemperate, and that those who lead chaste lives shall suffer for the benefit of those who are not very careful with regard to their own personal conduct. These are all important things. They are all of far-reaching social importance, and go to the root of family life and religious life. Then there is the question of sex. Women are only to be visited by members of their own sex. There is no provision that men are to be visited only by members of their sex. This Bill has been drafted by a clever and distinguished lawyer, the Attorney-General.




At any rate, the learned Attorney-General has assisted in the drafting of the Bill. [An Hon. MEMBER: "He denies the soft impeachment."] I will not refer to Hansard, and I will give the Attorney-General a large measure of credit. The question of sex could have been settled by saying any sick person must be visited by a person of the same sex; but it does not say that, and it seems to contemplate women visitors—I am afraid because they will be cheaper. I have no doubt my trade union friends will be very keen upon this point in Committee. This provision does a vital injustice to women. Until my hon. Friend the Member for Bolton (Mr. Gill) spoke I scarcely realised that women would come in millions under the operation of this Bill. This measure does not suit the case of women. It is unjust to them—makes them pay too much and gives them too little. That glorious maternity benefit, to which no educated man can possibly object, is not given out of any deference to the glory of womanhood. I maintain that if the maternity benefit of 30s. is given to a woman, it should be given for one reason and one only, namely, that she is about to become a mother. I say, that if any other basis is taken for the maternity benefit, you are on the wrong lines and you will not get the support of the country.

The maternity benefit is given to the man because he is an insured person, and 30s. is to be found for the woman in this position—not an unfortunate, but a glorious position, if we want healthy men to carry the British flag. The 30s. is given as a credit to the man in kind, and the poor woman is not to be allowed to choose her own midwife or her own doctor. The idea that she should be visited in such solemn hours as that by persons to whom she may take a personal objection chosen by a local committee outside is revolting. With regard to the medical profession, as hon. Members know, they are up in arms about this Bill. I have not stirred them, nor shall I attempt to allay their fears. What is the great reason for the position taken up by the doctors? It is because there are four hostile fights going on. Endeavours have been made on four important questions to effect a settlement, but they cannot be reconciled; you ate attempting to reconcile State selection with private choice; you are attempting to reconcile the payment on health with a remuneration of those on the sick list; you are attempting to reconcile an idea which the medical profession have got of the variety of occupation and prizes for the successful with the dead level this Bill prescribes; you are also attempting to reconcile the doctors' wish for ample reward for long study and self-denial on the part of his parents with the niggardliness of "four bob" a year.


The Chancellor of the Exchequer when he introduced the Bill made it clear that four shillings was inadequate, that it was quite apart from drugs, and that something extra would be given for drugs.


I am not prepared to take anything except what is in the Bill. I mention the amount of 4s. purposely in order to draw something definite. This is one of the points which will be left to be administered afterwards, and my own estimate of what friendly societies will try to impose if the power is left with them is 4s. per head. Either the Government must say that they will throw over the friendly societies and assert their own idea of what the medical man shall receive or they must accept the custom of the friendly societies. They must do one or the other. I shall only be too delighted if my references to this subject will draw something from the Government upon this point. I wish to ask the Government frankly whether they intend to leave the doctors in the hands of the friendly societies or whether they intend them to be remunerated upon another scale altogether. That problem is possibly not very easy of solution. There is another point which touches administration, and that is in connection with the local health committees. I do not say they are bad, but I am rather afraid they will not work. I am interested to know what the views of our large county councils will be on this proposal. Can the Government assure us that the London County Council and other large councils will approve of the setting up of these local health committees. I have conversed with both Moderate and Progressive county councillors, and they tell me that they do not think we shall get a quarter of the members required for these committees. Take, for example, the great county councils and municipalities in the North. I have tried to find out their views, and I have not found anyone who welcomes the formation of these local health committees, and they seem to regard this proposal more as an interference with their ordinary duties. If you bring new people on the spot with new machinery you must be prepared for those who are now doing the work in regard to public health and better sanitation declining to be meddled with. The men who have spent £20, £30, or £50 at an election by ballot, and who have gone through a contested election—like those at Spring Gardens who have party whips and attempt to imitate all the glories of this House in their contests —will not go to some voluntary local committee of eighteen persons, six being drawn from the friendly societies of London and six from the unhappy Post Office contributors if they can be got to meet. If the great London County Council are half as vigorous in asserting their rights as they are in this House, they will never knuckle under to a little authority of that kind.

6.0 P.M.

Now I come to the question of the permanent officials. How many are there to be? Where will they be drawn from? What will their salaries be? All that has to be done when this House has said goodbye to this measure. Then I come to the Treasury. We all know what the Treasury is. It is not accustomed to deal with flesh and blood the hard rules and regulations. I am a great admirer of the Treasury, but I am not prepared to put the suffering poor of this country and the workmen on low wages, as well as the women on low wages, into the hands of the Treasury. We have no evidence of that kindness of heart and that sympathetic treatment at the Treasury which is necessary to make this reform succeed. With regard to the Members of this House, I want to ask, quite frankly, will there be one of these Insurance Commissioners with a seat in this House? We have the Ecclesiastical Commissioners and the Charity Commissioners represented here. We also have the Chairman of the Kitchen Committee in this House, and if an hon. Member gets one stick of asparagus short or gets a rather tough kidney, he can put questions about it in this House to the noble Chairman of the Kitchen Committee, and he is able to get an answer. When it to the welfare of 15,000,000 people, and all the cares and troubles incident to this scheme, what will happen? The letters we are now receiving will be quite a minor matter. We shall all become insurance experts. We shall be always communicated with by every applicant for benefit who does not receive it; and they will make these demands from us as paid servants. They will say, "What are you getting £400 a year for if you cannot interpret a Bill that you pass?" Our duties in the future will be very onerous. I hope we shall not shirk them, and I therefore beg every Member of this House to attend the Debates in Committee so as to be prepared for the grave questions which will come afterwards. Sometimes constituencies choose Members of Parliament for one thing, and sometimes for another; but I believe in an increasing degree they will choose them because of their expertness in insurance. I remember a candidate being selected in Salford, and his various qualifications were considered. One man, who hailed, I think, either from Nottingham or Hull, wanted to know "what all the talk was about?" Why did they talk about his religion, about the different kinds of politics in which he was interested, and about his occupation. "Brush it all on one side," he said, "and come to the point. I want a man with the qualities of a milch-cow and of a rhinoceros." They will know in East Glamor-ganshire what a rhinoceros means, and in Nottingham they will be able to explain what a milch-cow is. In future we must have the third qualification, to which I have referred for the perfect candidate. The Bill deals with the question of temperance. Are these drugs and medicines that are to be given free at the expense of the State to contain a large percentage of alcohol? Is vivisection to be paid for? Is the homestead law to be maintained that a man must not pay his rent while he is sick? I quite agree with that, but it is not the poor property-owner who should suffer.


The law says the bailiffs shall not be put in while a man is sick.


Yes, I am dealing with that. The Act provides that he shall not pay any rent during sickness.


Oh, no.


At any rate, you cannot enforce the rent during sickness. I am obliged to the hon. Member. They cannot distrain upon him for rent during sickness. It is therefore very doubtful whether the property-owner ever recovers. I do not think you ought to encourage property-owners to sue a man who has been ill for six months immediately he is getting a little wages and his children are getting little extras. That is a horrible idea to contemplate, and we must not encourage it. If you go into a scheme like this, I say boldly, do it thoroughly and well; do not do it niggardhly. If you are determined that during periods of sickness there shall be no distraint for rent on the unhappy man who cannot earn his wages, let the State pay. I would like to claim the attention of the Labour Members for one moment. There is a provision for an international system of exchange of workers. I warn them, unless they are on their guard—of course, they will know that, although I am a Liberal, they may always rely on my support in matters affecting the rights of trade unions; I came in on that direct assurance to my constituents—and unless they insist that there shall be proper safeguards this international system of exchange of workers will lead to grievous evils when another party is in power. If you exchange men and names and sums of money between one country and another to correspond with the workmen who have paid for benefits, you are opening the door to a very dangerous position. It can easily be magnified and taken advantage of in a way which I am sure trade unions will not contemplate with any ease.

I want to point out the vast difference between the English and the German schemes. We have a flat rate, and the Germans have a graduated rate. Our benefits are uncertain, whereas theirs are fixed. I know the promoters and exponents of this Bill treat these benefits as if they were certainties. They are nothing of the kind. The Chancellor of the Exchequer, in answer to a question put by me, refused to introduce a modification into this Bill to provide that the benefits shall be guaranteed. There is no certainty what the workmen will get. I wish there were. How can hon. Members justify compelling a man to pay into a scheme when it is quite uncertain what his benefit will be? I cannot reconcile those two ideas at all. I only put it as one of my gravest difficulties, and I shall be only too happy if my leaders can solve my difficulties on this point, and I can wholeheartedly support their scheme. How can they defend a proposition to compel an employer to put by 3d. a week for his workmen to enter a scheme controlled by friendly societies and in which he is denied any voice in the administration without any certainty that in the years to come when his workman gets old and demands benefit the funds will be there to meet it. It is all very well to suggest, as a very clever Attorney-General would suggest, that there are provisions. Of course, there are clauses and there are sections and there are ideas, but they will not meet the case. It is all very well to say you will call upon that lodge to increase its levies. All the members will immediately resign. They will go helter-skelter somewhere else. How is that particular lodge to recover its position? If they cannot escape anywhere else, they will escape to the Post Office. I am speaking as one who has had some experience of the difficulties of these lodges. I am continually asked in my district to come in and give a little help to a man who has gone into a lodge where there are no new men and where an old man cannot get the benefits. We have to put our hands into our pockets. It is no use saying you will make an additional levy upon these old men. It is simply impossible.

In conclusion, I would like to draw attention to a point which, I think, is vital. The German scheme to which I have referred is founded upon compulsion, it is founded upon conscription, it is founded upon protection of industry, and it is founded upon close police supervision. A Memorandum has been put into our hands purporting to give the views of German employers, but it is not worth the paper upon which it is printed. We are not given their names, and we scarcely know with what industries they are connected. The views of the German workmen for which I asked and which I was promised have not been supplied. The only views of German workmen I have been able to find are contained in a book published by the hon. Member for West Ham (Mr. William Thorne), who reports that the workmen dislike the scheme intensely.


I beg your pardon. That is not in my pamphlet. Every leader of a trade union we met welcomes the scheme.


I was not referring to the trade unions, but to the working of the sick benefit scheme. I quoted from the hon. Member's pamphlet on the First Reading, and he has not denied the words since. I read his exact words, that the workmen there were complaining of the expense of the scheme, and said they could work it cheaper on a voluntary basis. That is in the hon. Member's book, and he must take the responsibility for it. The police in Germany have a record of every man, woman, and child. They pay visits even in regard to domestic servants, one of the most difficult parts of our Bill. It is quite easy there. The police go and ask "Is there a cook so-and-so or a housemaid so-and-so here? They were in such a year. You are paying such and such wages. Let me look at their insurance cards." Will the women in flats in Chelsea and Kensington open their doors to these men and give them the information. Supposing they close the door and refuse, where is the machinery to enforce the scheme? I have failed to find it. An employer in Germany dare not engage a now man until he has seen his insurance card. The first duty of an employer there is to direct an applicant for a situation to the insurance clerk's office. He has to go and satisfy the insurance clerks he is perfectly square with regard to his stamps and his card, and until then he is never considered with regard to an engagement. The officials regularly go round to see all books. Is that contemplated here?

The great trouble in industrial societies is the question of arrears. What is the machinery for avoiding this all-important question of arrears? I venture to say the problems which have been put forward by Sir Edward Brabrook in the March number of the "Economic Journal" have not been solved by this Bill. I am in the position of a man who wants the Bill to work. I cannot see that it will do so at present, but I hope we shall be able to make this Bill into a scheme that will work. We shall all have to try our very best, and we cannot do it if we inflict an injustice on any group. The group for which I especially desire to plead is a group of men who have made it plain to me there is a special responsibility in regard to them. The industrial insurance societies have been sneered at. Years ago the great Mr. Gladstone denounced the Prudential Insurance Company. Those times have passed away. These companies are now a necessary and an integral part of our national life and thrift, and it is these societies who have been the pioneers of the present scheme. They have not gone with the whip of the State, but they have gone from door to door persuading working men and women to spare a few coppers and join in an insurance scheme. The right hon. Gentlemen who proposed this Bill take credit to themselves that it does not touch them. I am here to say that in the opinion of the experts of the companies, in the opinion of the agents and collectors themselves, and in my own opinion this Bill is a great menace and peril. That collecting card which was produced for the inspection of the House by the Attorney-General is the funeral or memorial card of the collecting agents of this country.

It is no use mincing matters. Let us look at the reality. The collecting agent has gone from door to door and has been the only man to call at every house with the wholesome message of thrift and provision for the future. Is he to be sneered at in this House? He has paid money for the right to collect in some cases, and in other cases he has spent a lifetime in the hope of recognition and promotion, and he has a vested interest. These men at present are not enjoying themselves in the festivities of the Coronation; they are quaking with fear for their own bread and cheese and their own livelihood. If the collecting system proposed by this Bill is brought in and these men are left out, their time is short and the interest for which they are paid and work will be gone. I appeal to the House, not to give them money or any special rights, but to Say the door shall be open to them to give their services under this Act. I am not prepared to take eloquence and intention. I know the intentions are good and that the speeches are able, but the provision is not in the Bill. I deny that the right hon. Gentleman can point out to me a clause in this Bill where these great industrial insurance companies can come in. I say you want these men. They are trained men. They have never fought against the army of progress. The trade unionists have not had the opposition of these men. They have never stood against any measure for the amelioration of the people in any way whatsoever.

There is no body of men, and least of all those on behalf of whom I am speaking, on whom such injustice ought to be inflicted, and I ask the House, with all the sincerity I can command, even should it disregard my friendly suggestions—and I hope they will be taken as friendly—with regard to the rest of the Bill to unite with me in saying that these men who have gone into the cottages with a small amount of money to provide for the burial and for the funeral clothing of the widow and little children, when the State offered them the pauper's purse and a few shillings for a death certificate shall not be made to suffer under this scheme. These men invented a scheme which has produced a spectacle not to be found in any other country in the world, and I say that they must not be left outside the Bill. We want their experience, we want their help, and I appeal to the Government to make use of it.

The SECRETARY of STATE for the HOME DEPARTMENT (Mr. Churchill)

The hon. Member who last spoke made a very valuable and interesting contribution to the Debate, but when he speaks as a sincere friend and supporter of the Bill I think we are entitled to observe that the kind of long, loving, lingering hug with which lie embraces it would not be likely to leave any great amount of vitality in the measure in this Session or at any future period. The hon. Gentleman has covered a very great number of varied and important points, some affecting general principles, but the great majority properly arising in their regular place in the course of our Committee discussions. My right hon. Friend the First Lord of the Admiralty is going to deal particularly with invalidity insurance to-night, and the Chancellor of the Exchequer will speak on the subject on Monday. In the time I shall trespass on the attention of the House I desire to devote myself almost exclusively to the other important branch of the subject. I intend to deal with unemployment insurance.

I should like to point out, before I leave the subject of invalidity, to which the hon. Gentleman has devoted so much careful and searching attention, that some of his criticisms appear on the very face of them to be inconsistent with each other. For instance, the hon. Gentleman commenced by deploring the hard fate of the Post Office contributor, and he expressed surprise that in any country it should be possible to set up, to use his own words, "such a colony as that." The Post Office contributor will get under this Bill all that he himself contributes and all that the State and the employer contributes, together with the actuarial possibilities of his own group. But while he will not get the superior actuarial possibilities of the other group, it is a necessary thing that there should be in the beginning of a scheme, and, of course, the Post Office contributor is only a feature of the initial year's undertaking—a power of choosing on the part of the friendly societies. It is their power of choosing which necessarily involves having some not willing to choose or to be chosen, and we look to that in order to preserve that incentive to competition among the various friendly societies themselves which he hon. Gentleman has eulogised so highly. We wish, under this Bill, to produce a strong means of effective competition between the different approved societies which will make it necessary for them and their members to exert all their influence in the direction of wise and thrifty administration, and will at the same time lend a real meaning to those rituals and ceremonies with which they have hitherto conducted their most valuable work.


Does the right hon. Gentleman say that the Post Office part will be temporary.


The right hon. Gentleman will see that we are beginning to insure all persons in youth, and most of them will naturally in due course remove into the approved societies, and so this initial difficulty of the Post Office contributor will be a constantly diminishing difficulty, if the general purposes of the scheme are successfully achieved. In order to preserve this vital competition in the management and control of the great approved friendly societies it is necessary there should be forfeits as well as advantages, and that, in the circumstances, there should be a power of increasing the levies and reducing the benefits. That is an answer to the objection of my hon. Friend, who complained that while the contribu- tion was compulsory the benefits were not in all respects absolutely certain. I have only ventured to touch upon these two or three points because I think they go to show that the hon. Gentleman, in giving his friendly support to the Bill, although he added very much to the knowledge of the House of Commons, and greatly entertained and interested it, has undoubtedly reached out a strong arm in the direction of assembling every conceivable objection which his knowledge and dialectical skill enabled him to assemble and concentrated them, whether they fitted in or not, with his criticisms on the proposals of the Government.

I desire this evening to address myself to the unemployment branch of our proposals, and the observations which I shall make upon that branch will deal with one or two general points. I should like the House to consider the true position and functions of the State subsidy. Voluntary schemes of unemployed insurance, schemes to which the individual may resort or not as lie chooses, have always failed because those men likely to be unemployed resorted to them, and, consequently, there was a preponderance of bad risks against the office which must be fatal to the success of the scheme. There is much more to be said for the subsidising by the State of voluntary associations which pay unemployed benefits, if they are organised on a trade basis. We are adopting those general provisions which every voluntary insurance scheme has in association with the compulsory provision. I should like to say in regard to that that any such extension of the Ghent scheme will not produce any really substantial result in increasing the number of insured persons. The new persons who become insured will have so greatly increased the subsidy of the State that, considering that a large portion of your subsidy goes to persons who have already been able to make provision, you get a very small return from the new insured persons on the money invested. As a supplement to a compulsory scheme, as a precursor to an extension of a compulsory scheme voluntary insurance, provisions are defensible, and even desirable, But to put them forward as a means of dealing with the evil of unemployment by insurance at the present time would not be grappling with any real needs or handling the subject with a serious or earnest mind. So much for voluntary schemes the result of which in regard to unemployment insurance must be insignificant.

On the other hand, compulsory schemes are exposed to this danger, that they inflict injustice on the superior workman by forcing him to bear the extra risks of the inferior workman, and it is for that reason that we come to the State subsidy. Herein lies the true function of the State subsidy. The Leader of the Opposition will appreciate the comparison I am making when I say its object is to bridge the gap between the two classes of workmen in the same way as we bridged the gap between Irish landowners and tenants under the Irish Land Purchase scheme. It is intended by State payment to make it just worth while for the superior workman to pool his luck with his comrades. It is not a payment to bribe or induce the workman to join the insurance society as it would be under a voluntary scheme. It is intended to do justice between man and man in a class of persons already compelled to insure. The State subsidy is actually fixed at a point where it makes the system good for all. I do not say it will be equally good for all, but possibly it will be good for everyone who is comprised within it. In other words, the State subsidy, in the region of unemployment insurance, enables the insured persons to share the advantages and not to share the risks, to divide the benefits but not to divide the risks. That is the function of a State subsidy, and that is why it is vital to any scheme of compulsory unemployment insurance.

It is only in the direction of compulsory unemployment insurance that any real advance is practicable. We have been told that our scheme is incomplete. We have been asked why our compulsory system, if it is good, is to be only partial in its application. We are asked why certain trades are to be picked out. The House will realise the answer that readily occurs to a Minister. "You must begin somewhere." The oldest habit in the world for resisting change is to complain that unless the remedy to the disease can be universally applied it should not be applied at all. But you must begin somewhere. You must begin on a definite basis. The materials for the actuarial calculation on the subject of unemployment insurance are admittedly incomplete. We are prepared because of the conservative estimates we have formed to be responsible with regard to unemployment insurance upon this basis. We are not prepared to be responsible for a universal scheme of compulsory insurance, nor could the actuaries aid us in this matter. They have declined to do so. We shall never be prepared to deal with a universal scheme—the actuaries will never be able to assist us in this respect—unless we begin with a limited scheme. The data for further progress will be obtained only when we make the first march. It is no use waiting doing nothing; it is no use hoping that the materials will accumulate, that theoretical inquiry will result in further knowledge, or that a Royal Commission or other methods of investigation will produce the facts that are now lacking. The facts will never come to hand in that way. But when the first stage of the journey has been completed the course of the second stage will become visible. It is the first stage that will give access to the second. It would be foolhardy to launch out now with a universal scheme of compulsory insurance, but it is sensible and prudent to make a well-considered experiment with a definite group of trades which will admit of steady and practical observation. Those therefore who demand in the country or in the newspapers or in this House an immediate universal system of compulsory unemployment insurance are in fact as much the enemies of compulsory insurance as those who are opposed to it in toto. To be in favour of compulsory insurance of unemployment at the present time is to be in favour of partial unemployment insurance, because no other scheme than one of partial insurance could be advaanced with any hope of success.

I come to the next question that has been greatly discussed, and that is why are these trades in the schedule selected? The reasons for that have already been indicated to the House, and I only propose to summarise them in their collective form. My right hon. Friend the Chancellor of the Exchequer has pointed out that these are in the main the trades concerned with producing the instruments of production, and of course the House will see that the trades concerned in producing the great instruments of production are subject to an almost total cessation of orders in a period of depression, and they cannot go on if they are short of orders. When these trades are confronted with a sudden stoppage of orders there is a sharp and sudden arrest, of course, of their industry. But whatever may be the explanation those trades are subject to special phenomena and characteristics, and they are the trades in which unemployment is very severe, and in which the fluctuations are most violent. They are the trades in which you can discern with unvarying regularity, or rather with an unvarying regular irregularity, seasonal or cyclical depressions. They are the trades which manifest themselves not in a short time or in other shifts of that sort, but in the total discharge of a certain number of workmen. Those are the trades whose unemployment when it occurs is exactly that kind of unemployment which can and should be remedied by a system of insurance. I mean they are not decaying trades, they are not overstocked trades, they are not congested with a surplus or an insufficient supply of labour, but they are trades whose unemployment is due not to a permanent contraction but to a temporary oscillation in their range of business, and that is the class of business in which unemployment insurance is marked out as the scientific remedy for unemployment.

It is not true, moreover, to say that these are well-paid trades. My right hon. Friend the President of the Board of Trade has shown that half of the men in these trades earn less than 25s. a week and half less than 30s. a week, so that they cannot be said to be exceptionally well-paid trades. They are, moreover, the trades about which we have good figures. We have in some of them trade unemployment statistics going back for a period of over fifty years, and we have them in regard to over 300,000 persons. We have statistics which go back for twenty years with reference to unemployed insurance at work in these trades. Here, if anywhere, is the foundation upon which you may start and begin to build. But it is said, why should you go to the aid of those who have already insured themselves? Why not begin with those who have been up to the present unable to effect that provision for insurance against unemployment? In reply to that question I will ask the House to consider this: Why is it that those trades in which unemployment is manifested in the way that I have described have exhibited the peculiar phenomenon of provision for unemployment insurance already? They are not the best organised trades in the country. On the contrary, the proportion of trade unionists in them is only one in five, whereas throughout the country it is one in four. They are therefore not the best organised trades. The textile and the coalminers are much better organised. And yet these much less organised trades protect themselves on lines of which a permanent feature is unemployment insurance. Why is that? It is not because they need it less, it is not because they feel the pinch less acutely, though it does not come upon them in the same form when depression strikes these trades. It is because the fluctuations are greater than can be met by wage-spreading devices such as short time, which modify the effect of trade deprivation upon the individual worker in other trades, but when the pinch comes in the insured trades it is so sharp that it means that thirty or even forty men are turned off, and no employer can keep any but a nucleus of his hands in a period of almost total inactivity.

The provision which has been made in these trades I will not say is measured by their needs, but is due largely to their sense of the evil under which they suffer, just as we see in the natural world creatures in different stages of development putting forth defences against the particular dangers to which they are subjected. We have here in the insured trades in the unemployment provision an indication that it is in that direction that the need of the measure is most felt. When we talk of the scope of the compulsory scheme—I am only dealing with the compulsory part of it for the moment—being limited, let us do justice to it. Even if it be limited it nevertheless covers a very large area, and covers no less than 2,500,000 those engaged in adult labour, and in that figure there are no less than 2,000,000 who are not insured and who are outside all provision. Of that 2,000,000 again there is 1,000,000 who receive less than 30s. a week; 2,500,000 adult men is one-third of the total number of adult males engaged in distinctively industrial operations, excluding professional and commercial workers, domestic service, agriculture, fishing, Government officials, and others of that character. Of the remaining two-thirds, nearly one-half are employed on the railway or in the mercantile marine or in textile, mining, or other employments, which are able to meet a period of unemployment by wage-spreading devices. It is, therefore, true to say, broadly speaking, that the compulsory provisions of this Bill are large and substantial, covering very nearly half of the whole field of unemployment; certainly more than half the field of what seems to be properly called insurable unemployment. I think these are very important facts, and I should like to point out to the House that we are not only under these sections of the Bill, dealing with the evil of unemployment in this great body of workers in our midst, but we are giving them aid which is not merely important aid, but adequate aid, in the great majority of cases.

Already the benefits cover the greater part of the periods of unemployment which we expect to be incurred by the individual in these trades, and it covers the whole of the period with a great majority of the persons who become unemployed in those trades in a bad year. Not more than 5 to 10 per cent. of the persons in those trades are out of work for more than three weeks, and consequently not one-third of the number would run through their benefits, and the rest would be covered by the benefits provided by the scheme. Possibly, I say, we are not only affording protection to this great body of persons in regard to unemployment, but we are providing in the great majority of cases an adequate amount of protection. There are one or two points which were raised by the hon. Member for Liverpool which are points of detail, but which I should like to deal with. The hon. Member commented upon the different rates of benefit which we paid to certain trades, and he thought the benefits were illusory. Of course, if your money is small you cannot expect on any actuarial bases to receive the same benefits for your contribution, but we thought it better to start with the building trade on a little lower scale of benefit because the wages are less than in other trades. But there is power in the Bill to raise the benefits, and if there is money in the Fund the benefits will certainly be raised. The hon. Member asked me what would happen to a trade unionist if he refused to take a job below the trade union rate. We propose not to deprive any man of his unemployed benefit for refusing to take a job which is below his own customary rate in his own district. That is the position which, after a very great deal of thought, we take up, and we are satisfied that that will be a good solution of what is undoubtedly a very difficult point. Then the hon. Member raised the point in regard to the employer, and the encouragement given him to give long term engagements. As the House knows, the contribution of an employer in respect of a particular workman for a year can be franked at a lower rate by annual stamp than by a succession of short-time stamps.


Would the workman have the same opportunity of compounding as the employer?


I would like to come to the case of the superior workman in its proper place, but I will deal with the point. The question has arisen whether the effect of the employer paying for some of his workmen a composition, and paying what others do weekly on a composition yearly basis would not be to erect a division between the different classes of workmen and put pressure unfairly upon the less prosperous class of them. It may be possible to meet that in another way.


Must the composition be in respect of a named workman—of a particular man—or may it be a composition for a number?


The composition must be in regard to a particular workman. There is no point in the other case. Everybody keeps a sufficient number of workmen, but what we want to do is to encourage long-term engagements, and not to encourage casual employment. But there is this danger, and my right hon. Friend tells me he has carefully considered if we cannot get our point in another way. It may be possible to calculate at the end of the year individual workmen whom the employer has employed for the whole year, and then give a rebate backwards. Those are the special points of detail raised by the hon. Member. I should like to say this about criticisms which are generally addressed to the principle of unemployment insurance. They have been like the criticisms which my hon. Friend addressed to the larger subject of invalidity, they are in a very large degree mutually destructive criticisms. For instance, we are told there are no complete statistics, and then we are told we have dealt only or mainly with the organised trades. Only organised trades have statistics, and we only get statistics on this subject in so far as we are dealing with trades which are organised and so far as those trades are organised. Then we are told that the risk is indefinite, and in the same breath we are told the scheme is partial. It is the partiality and limited character of the scheme which is the certain restriction of our risks. Then we are told that only those who are able to make provision are helped, and in the same breath we are told this will impose a burden on the best workers. Then it is said only certain trades are to be favoured, and in the same breath that only those certain trades are to be burdened by the restrictions which we impose. We are told that the system of unemployed insurance will injure trade unions. We have also been told it will arm their fighting funds. All these criticisms have a tendency to answer one another. But there is one criticism which to some extent was referred to in the very able and careful speech of the hon. Member (Mr. Worthington-Evans) which requires reference. He suggested, speaking not only of this, but also of invalidity, that the system of insurance might possibly cause more unemployment. It has been suggested to us when we have been preparing our unemployment insurance scheme that when an employer knows a man is insured he will not trouble to keep him in his works during his period of difficulty, but he will let him go into unemployment and draw his benefit. The answer to that is that our statistics are based on trade union workers who are insured against unemployment and in the insured trades they already receive a higher benefit than that which we are providing, and, therefore, every motive which has been operative on the employer to discharge men who are insured, because after all they are provided for, has already been operative in regard to the trade' union insured with results which have been ascertained, and our figures are based on those ascertained results.

Then there was a danger that workmen would prefer to be idle and draw unemployed benefit, we are told, instead of remaining at work, but no workman in his senses would ever exchange the regular reward of wage payment for what are, after all, the very narrowly cut grants which alone will be payable under this scheme. I should like to say that there can really be no danger of malingering in the field of unemployment insurance, because a workman who will malinger in unemployment insurance—a workman who will not work when he has the chance and prefers to draw these very exiguous benefits—is only drawing his benefit out at a period when he does not want it instead of keeping it for a period when he will be really unemployed. If he malingers he malingers against himself. I hope I have convinced the House that the danger is not a very serious one.

Let me now look at it from the point of view of the employer. The responsibility of the employer is undoubted, and his cooperation in any attempt to deal with unemployment is indispensable. There is already a great recognition by employers in this country of their duties towards their workmen, and legislation is not required to inculcate a new doctrine, but only to give scientific expression to a powerful impulse of just and humane endeavour. A system of compulsory unemployment insurance associates directly for the first time the interest of the employer and of the unemployed workmen. Both contribute to a common fund, and both are concerned in its maintenance and in its thrifty administration. I cannot but feel that the inauguration of this system must promote the gradual adoption of those methods of the collective regulation of labour hours and labour activity which give full and corn-forting security to the lives of the collier and the cotton operative, and that they will promote short time arrangements and wage-spreading arrangements wherever they are possible. I think the admission of apprentices and the engagement of new workmen will tend to be scanned and scrutinised with some greater regard to the permanent average needs of the industry, and we trust that in the arrangement of business contracts more attention will be paid in the future to the possibility of sudden ups and downs involving sudden wholesale discharges of workmen from the fact that such sharp changes will have the effect of draining the fund and possibly increasing the levy.

I admit that the scale on which these tendencies will be operative will not be a very great one, but so far as the common interest of the employer and the employed are associated in these funds to which they both are liable to contribute the tendency undoubtedly will be to lead to a more statesmanlike view of business undertakings and a less purely commercial view than hitherto has prevailed. We therefore say to the employer in advocacy of the system: "You hold the keys of enterprise, and you are responsible for its wise direction; your own humanity has already prompted you to make such provision—such provision has been made by the employers in many parts of the country—in regard to the prevention of distress through unemployment. We shall complete your provision and organise it effectively." We say, thirdly: "If your business is subjected to special regulations it will also receive substantial and special benefit," and, lastly, we say to the employer: "Nothing is more important to you than discipline and efficient workmen and the organisation of insurance will un questionably enable you to command superior efficiency from the insured workmen."

In regard to the less capable workmen, as there is a more or less in this—I am speaking of good normal workmen, and not mere inefficients, men of declining years, and so on—the benefits of the scheme are so obvious that I shall not enlarge upon them. It is clear they get greatly improved prospects from the association with their stronger comrades. Let us consider the case of the superior workman. What can we say to him to reconcile him to the discipline and machinery of this scheme? First, we say, no man can be certain that he may not lose his class. He may be a good workman to-day, but in a few years illness, accident, the bankruptcy of an employer, the invention of a new machine may cause a man to fall from his class to a lower class. Consequently we say to him: "You have an interest in the fortunes of your comrades," and the better the workmen in this country the more they have responded to the idea of the solidarity of labour interests, not only within the trade, but in all the broad areas of trade, and not only in this country, but this conception of solidarity has stretched out far over the surface of the civilised world. We say, in the third place: "Whatever sentiments you may hold upon that subject, at least you can keep the inferior workman from undercutting your standard rate of wages," and, as a matter of fact, trade union unemployed benefit has been largely dictated by a desire to prevent rates being pulled down by large numbers of men being thrown on the market in hard times.

We say, fourthly, to him: "Your risks are limited to sharing your comrades' burdens. You are not called upon to take mere inefficients on your back. They soon drop out of the scheme under the conditions, and you have only to share your risks with your normal comrades." We say to him, in the fifth place: "The State subsidy makes it worth your while to pool your luck within these limits, and. in fact, we say, sixthly: "We give you at least 150 per cent. increased value in addition to any that you can obtain anywhere else from your own investment." Lastly, we say to him: "If you need them you can draw the benefits of the scheme as you require them, but if you do not need them, or if you do need them all, then at sixty, if you survive, having all these years been safeguarded within the benefits of the scheme, having all these years helped to safeguard others within the benefits of the scheme, you can have every penny that you have contributed back at compound interest, and take it away with you so that if it is not drawn out in unemployment insurance it may repose as if in a bank, at compound interest at 2½per cent."

I can quite see the House feels that that must be very difficult to manage, because, when one looks at it for the first time, one cannot see how it can possibly square with the solvency of the Fund. But the explanation is so simple that I am afraid the House will think it almost a conjuring trick. Let me explain the reason, and it will be seen that there is not so much in it as there seems. Every workman who subscribes to our Insurance Fund brings not only his own contribution but the contribution of the employer and the contribution of the State, so that he is only putting a little more than a third in, compared with the other two-thirds which go to enrich the Fund. It will be possible for every workman in the Fund to draw out every year benefits to the extent of his own contribution, plus the employer, plus the State, without destroying the solvency of the Fund. Therefore in the case of a workman who has subscribed all these years and reaches sixty without having even drawn out his own contribution, it is possible for us, especially as every one does not live to sixty, to give him back all his own contributions—not the State's or t he employer's—without throwing any burden upon the Fund in spite of the compound interest. That is our apology and our reward to the best class of man who goes through this business to the end, and yet appears at the time to derive no benefit from it.

I think the Board of Trade comes before the House with good credentials in regard to unemployment insurance. This is the counterpart and the complement of that system of Labour Exchanges which was set up two years ago. Of course you could not bring such great institutions into operation without treading on a lot of people's toes. I have no doubt they have trodden on a lot of toes, and all honour to the trade unions for the support which they have given to the system of Labour Exchanges in spite of the perplexities and some of the embarrassments in which the system has involved them, but the success of the system is indisputable. Five thousand to six thousand persons a day are being registered in these exchanges. We are filling more than 2,000 vacancies a day, and 500 casual jobs in addition. Last week was a record week. Seventeen thousand employers offered situations to the Labour Exchanges, and 12,800 persons were actually placed in them, exclusive of casual and shorter jobs. The 100 exchanges which have been opened actually for a year show an increase of 50 per cent. on the business transacted. Five thousand employers in the country have posted up outside their works the Board of Trade notice, "All applicants for employment to go to the nearest Labour Exchange."

7.0 P.M.

Every week 1,500 to 2,000 persons are found work out of their own districts—that is to say, work which they would not otherwise have found without long and weary searching. Since the beginning of the scheme we have under the powers which the House of Commons gave to the Board of Trade advanced fares, amounting to £2,400, to 9,000 persons, and these were persons at the very last gasp in the matter of employment, to reach their destinations. Of that sum, £2,200 has already been repaid. Of course, the Labour Exchanges are still in their infancy, and in a few years, when we get greater results, we shall look back to these small beginnings in connection with what is certainly a great piece of social mechanism. In this current year I do not think it is excessive to say that we shall find employment for 80,500 persons. In Germany, after twenty years, the Labour Exchanges are scarcely finding more situations than we are doing in the present year. These results may be put forward as credentials in regard to the other half of the policy which it was my duty to announce to the House two years ago.

I must speak a word with regard to the actuarial basis of the insurance scheme. For three years this matter has been investigated. It is more than three years since the first memorandum was written at the Board of Trade on the scheme. Since the question was first taken up by the Chancellor of the Exchequer and myself, my right hon. Friend the President of the Board of Trade has come in, and he has gone over the whole field, making alterations and improvements where he found it necessary to do so. 'We have been three times on the threshold of introducing the scheme, and we have now got to the point where it is possible to propose it. In the meantime the facts and figures have been subjected to all the tests which industry and available information can supply. Of course, we admit that statistics are not exhaustive, but wherever anything in connection with the question of statistics has involved doubt we have given our decision against the Insurance Fund in every case. Let me give an instance or two. There must be one waiting week for every man who becomes unemployed before any benefit can be given. People will become unemployed several times in. the course of a year. But we only count one waiting week in the year, because there will be one waiting week in regard to each period of unemployment. That is one point which we do not count in the calculation. There will be payment by employers who engage people less than a week, and perhaps several times in respect of the same man, unless they use the exchanges. We deal with that only on the basis of full weeks. We have another gain there. There is an arrangement which will give a reserve fund in the fact that everybody must pay the first twenty-six contributions before they can draw benefits. That is going to give us £1,250,000 if we begin in a good year. It is going to give us a reserve fund of that amount to face the chances of future years. That sum will yield £30,000 or £40,000 a year in interest. We shall in future years get in the contributions for the twenty-six weeks which come from new persons joining the scheme, so that the interest might easily amount to £60,000 or £70,000 a year if we begin now. We have made no calculation for that in our proposals. It is possible that the new Census may reveal figures in regard to some of the insured classes which will show that they are not quite so numerous as those on which we are acting. There again we shall get another windfall—another easement.

We have allowed nothing for the improvements in organisation and industry and the removing of the balance of fluctuation which may follow from this development. In spite of all this we have an ample margin. We have a proved margin of £200,000 a year for the solvency of the scheme. If we begin in good years there is no reasonable doubt that the fund will be solvent and equal to the emergency, but in any case if these calculations should be exceeded by the hard turn of events you can limit your risks. You can reduce the number of weeks for which benefit is payable, and in that way you can contract your obligations and secure the solvency of the fund. To reduce the unemployed benefit is different from reducing the sick benefit. In regard to unemployment the insurance benefits are paid pro tantoin so far as they are payable. They do good, and they cover a considerable part. Therefore you can reduce them without destroying the effect of the benefits.

There is no proposal in the field of politics that I care more about than this great insurance scheme, and what I should like to say is that there must be no delay in carrying the unemployment insurance any more than in carrying the invalidity insurance. Strong as are the arguments for bringing forward invalidity insurance, they are no less strong—in fact, they are even stronger—for unemployment insurance. A few years ago everybody was deeply impressed with the unsatisfactory condition of affairs which left our civilisation open to challenge in this respect, namely, that a man who was willing to work and who asked that his needs might be met, could not find the means either of getting work or being provided for. That could not but make thinking men uncomfortable and anxious. Providence has ordained that human beings should have short memories, and pain and anxiety are soon forgotten. But are we always to oscillate between panic and torpor?

People talk of the improvidence of the working man. No doubt he has to bear his responsibility, but how can you expect a working man who has few pleasures and small resources, and with the constant strain that is put upon him, to scan trade cycles and to discern with the accuracy of Board of Trade officials the indications and fluctuations of world-wide markets. His failure to do so is excusable. But what can be said of the House of Commons? We have the knowledge and the experience, and it is out duty to think of the future. It is our duty to prepare and to make provision for those for whom we are responsible. What could be said for us, and what could excuse our own improvidence if the next depression found us all unprepared? There is something to be said for the working man who does not provide against unemployment. It may not fall upon him. The great majority of working men will not become unemployed in the insured trades. A working man may escape, but the State will not escape, and the House of Commons will not escape. The problem will come back to the House of Commons as sure as death and quite as cruel, and then it will be too late. It is no use attempting to insure against unemployment when it is upon you and holds you in its grip. There is no use going round then to unemployed working men and asking them to insure against unemployment. It is only in those good years that we can make provision to secure the strength of the fund which will enable us to face the lean years. All our calculations are based upon taking good years with the bad. We must begin now while unemployment is not a feature of our political life and discussion. We must begin now if the fund is to begin strong. We owe a great deal to the Chancellor of the Exchequer in connection with this great scheme. He has devised it and made it possible in the public life of this country. He has afforded us something which does give common ground for all our best efforts, and I think it will be found one of the strongest forces for the country to unite upon. There is exhilaration in the study of insurance questions because there is a sense of elaborating new and increased powers which have been devoted to the service of mankind. It is not only a question of order in the face of confusion. It is not only a question of collective strength of the nation to render effective the thrift and the exertions of the individual, but we bring in the magic of averages to the aid of the million. In the field of invalidity there is all this and more. In the field of invalidity we have not only the magic of averages, but, as we were reminded yesterday in the speech of the hon. Member for Plymouth (Mr. Astor)—a speech which excited the admiration and gratitude of all who sit on this side of the House, and the approval of every one wherever he sits—we have the genius of health. There is a third great force besides that of averages and health which is now running to waste, and which invalidity insurance brings to the surface. I mean the actuarial effects of old age pensions on those who do not get them and perhaps will never possess them. Nearly £13,000,000 a year is devoted to old age pensions to persons over seventy years of age. All others are getting no direct benefit from them, and this enormous flow of State effort is provided for every one over seventy years of age to the extent of 5s. a week. Everyone knows that he has a prospect of getting 5s. a week when he reaches that age. It is not much, unless you have not got it. Until and unless invalidity insurance is added to old age pensions the whole of the advantage of that great improvement is running to waste. But if the invalidity is added, the old age pension will not only be enjoyed by those who now possess it, but it will cast its light backwards over all those who are approaching a pensionable age. Therefore I say we are bringing these great new forces, as valuable as if they were discoveries of new territories or of new scientific processes, to aid in overcoming the evils which we see in our social system.

The penalties for misfortune and failure are terrible to-day; they are wholly disproportionate, even when they are brought on by a man's own fault, either through the culpability of the individual or neglect of what is necessary to make him try or to make him take care. A man may have neglected to make provision for unemployment; he may have neglected to make provision for sickness; he may be below the average standard as a workman; he may have contracted illness through his own folly or his own misconduct. No doubt he is a less good citizen for that reason than others who have taken more thought and trouble. But what relation is there between these weaknesses and failings and the appalling catastrophes which occasionally follow in the wake of these failures; so narrow is the margin upon which even the industrious respectable working class family rely that when sickness or unemployment come knocking at the door the whole economy and even the status of the family are imperilled. The sickness may not be severe; the unemployment may not, be prolonged. The good offices of friends and neighbours may carry the family through the crisis; but they come out with an accumulated weight of debt, and with furniture and clothing scattered at ruinous rates. Privation has weakened the efficiency of the bread-winner, and poverty has set its stamp upon his appearance. If sickness and unemployment return and knock again a second time it is all over. The home is broken up; the family is scattered on the high roads, in the casual wards, in the public houses and the prisons of the country. No one can measure the suffering to individuals which this process causes. No one can measure the futile unnecessary loss which the State incurs. We do not pretend that our Bill is going to prevent these evils. Unemployment and sickness will return to the cottage of the working man, but they will not return alone. We are going to send him by this Bill other visitors to his home, visitors who will guard his fortunes and strengthen the force of his right arm against every foe.


I generally enjoy the pleasure of speaking after the right hon. Gentleman, but I cannot feel that I enjoy it to-night. The reason is that as regards the last part of his speech I can assure the House that I have no intention of imitating him. But I should like to say about his eloquence that, as in the case of the five shillings, no one knows the value of it unless he has not got it, and certainly I am not going to try to rival him. To come back, however, to solid ground, I do think that it is a distinct mistake that the two proposals are included in the one measure. Of course, we know that the President of the Board of Trade (Mr. Buxton) said yesterday that they were interdependent, and the right hon. Gentleman has said the same. But I do not think that is the case. They really have no connection, no necessary connection. They have been prepared by different Departments, and they are defended and explained by different Ministers, and I am sure it would be greatly to the convenience of the House if they had been put before us as separate Bills. No better proof of that could be given than the speech to which we have just listened. We were engaged in a discussion which had gone on all the afternoon on one subject, on one Bill. The right hon. Gentleman comes in and throws us off the track, and our minds are landed on an entirely different subject. There is another difficulty about this. If one is to be reasonable in the amount of time which one occupies one must speak on one subject or the other. I intended to speak on the invalidity side, and with the permission of the House I shall do so; but, after the speech to which we have listened with so much interest, I would like also to make one or two comments on the subject on which the right hon. Gentleman spoke. There have been suggestions that the unemployment part of the scheme should be postponed. In spite of what the right hon. Gentleman has said I do not say I would like to see it postponed, but I am bound to say that I think its postponement inevitable, and I will tell the House why. It is not, as was suggested yesterday by the hon. and learned Gentleman the Attorney-General, that we think that this proposal has not been properly thought out by the Board of Trade. I know on the contrary that it has been thought out. The speech of the right hon. Gentleman, and the enthusiasm which he has shown on the subject, which he must have got when he was at the Board of Trade a year or two ago prove that. So also does a most in- teresting and if I may say so a most able address to the British Association which was given last year by the head of the Board of Trade, and which explained the Bill precisely as we have it to-day. That shows that the Bill has been carefully thought out. But that is not the difficulty.

The difficulty is the House of Commons, and I say without any hesitation in my judgment it is absolutely impossible for us adequately to deal with two great problems like these at the same time, and we must drop one or other of them. In making that remark I would like the House to understand that I am certainly not hostile to an attempt being made to deal with unemployment. The principle on which it is based is a principle and which must appeal to every Member of this House, as I understand it is this. In our social conditions a supply of labour is required in good times which is not needed in bad times, and when the bad times come some men must either lose employment or get less employment, and nothing could be fairer if it could be brought about than that the whole burden should not fall upon the individual who is unable to guard against it, but that it should be a burden on the industry itself. With that we are all agreed. But I must say I was not quite convinced by the argument which the right hon. Gentleman used as to the precise form which this Bill has put before us. He told us, and the President of the Board of Trade said the same yesterday, that you must deal with a branch of the subject before you can deal with it as a whole. That is perfectly true. But in dealing with a social reform you must deal with those who need it most. Nothing which was said by the right hon. Gentleman convinced me that these trades which do come under the scope are the trades which need it most. Then there is another thing which I say not by way of criticism, but rather by way of caution. The right hon. Gentleman says that you must begin somewhere, and that the data required for these other trades will be found by the experience of these which are now to be taken up. If that is so I have nothing more to say on that point, but I do not think that is true. I do not see in what way the information which you will get from engineering and other trades which are mentioned will in the least assist you in dealing with unemployment in the trades in which assistance is needed the most—such, for instance, as casual labour. But I say this really without much dog- matism. I hope to see the attempt made, and I hope it will be made before long, though, speaking as a prophet, I hardly think it can be made simultaneously with the invalidity part of the scheme.

There are one or two observations of the right hon. Gentleman on which I wish to make some remarks. He spoke about the Labour Exchanges, and it must have been a gratification to every Member of this House to have-found the useful purposes which these Labour Exchanges have served. But incidentally he mentioned as a proof of the success of the Labour Exchanges, that in spite of the much larger population in Germany, after twenty years' working the Exchanges found employment for scarcely more than the exchanges in. this country were finding in the present year. He could not have given a better commentary on the state of employment in Germany. The only other point in the right hon. Gentleman's speech on which. I wish to remark is this. He dwelt at some length and eloquently on the need of business men acting as statesmen and organising their employment and arranging their business in such a way as to spread it over good and bad times, so as to give as much work to their employés at one time as another. I do not think that the right hon. Gentleman would have laid much stress on that if he had been engaged in business. As a matter of fact, business men have to take orders when they can get them. That is the trouble. And they would be only too ready to have their works going regularly, if it was possible for them to arrange it. But there is one way in which that object can be largely assisted, and in which it is assisted in Germany. I remember reading in Burke the saying that he had met many statesmen with the minds of pedlars, and many business men with the minds of statesmen. I would recommend the right hon. Gentleman to apply his principles of statesmanship to the cases over which the Government have control. It is a fact that in Germany to-day the Government does try to give its orders in bad times, so as to spread them over bad times. I do not think that has ever been done in this country, and I say that it is one of the first things which the Government ought to do at the present time.

Now I shall come to the other subject— that of invalidity. And I am bound to say that I do not think I have ever spoken in this House of Commons with a greater feeling of deficiency than I do on this subject. I have been interested in it for a great many years, as we all have been, and I have studied as carefully as time permitted the perfect avalanche of literature which has fallen upon us in connection with this Bill. It is quite possible that some criticisms which I shall make would not have been made if I had properly apprehended the scope of the measure; but if so I hope that hon. Gentlemen who must have experienced the same difficulty which I have experienced will give me their indulgence. But perhaps to talk of criticism is going over the score. At least it is not going to be hostile. The Chancellor of the Exchequer must have been extremely gratified by the way in which his scheme was received. But he is an old Parliamentary hand, and I am afraid he must have had a suspicion of the danger which waits upon anyone when all men speak well of him. In my experience of the House of Commons, I have never known a proposal which was received on its introduction with a universal chorus of approval which either did not come to grief or have a very stormy passage. And I am rather inclined to think that the right hon. Gentleman is not going to escape. If I may say so without being personal, the right hon. Gentleman has more of a dual personality than anyone else engaged in politics in this country. When he is engaged in electioneering he is, to my mind, Mr. Hyde. Working in his own department, he becomes Dr. Jekyll. I am glad to say that in this Rill there is no Mr. Hyde. It is all Dr. Jekyll. There is no attempt whatever to make electioneering capital out of this matter or out of what has been said about the efforts which the Chancellor of the Exchequer has devoted to this Bill. I do not speak with knowledge. I am just judging by what. I have heard, but there seems in this Bill more of his personality than is usual in a Government measure. I gather that, though perhaps I may be wrong, not only from the explanatory memorandum, but even from the phraseology of the Bill. I think there is more of the personal element than is usual in this Bill. Up to this stage the right hon. Gentleman has, so far as we can see, not dealt altogether unsuccessfully with the tremendously difficult problems which confront. him. We fully realise the force of the criticism which was given in the most able speech of my hon. Friend the Member for Colchester, and I am sorry the Chancellor of the Exchequer did not hear him. There was some very caustic criticism by the hon. Member for Pontefract also, the only difference being that there was a little more tenderness in that of the hon. Member for Colchester. Perhaps I should not Dave made that observation if the hon. Gentleman opposite had not made the extraordinary remark in which he suggested the possibility that when the party on this side came into power some terrible use would be made of this Bill, and it seemed to me that he had had in his mind Chinese labour or something of that sort. If the hon. Gentleman has any notion that that is our feeling, it seems to me to take away a good deal from the value of his criticisms.


I had not the slightest wish to refer to the occupants of the Front Bench opposite. I was rather referring to the dim and distant future.


We admit that the Chancellor of the Exchequer is making an effort to deal with the subject, in which I am sure the House of Commons will do its best to assist him. It is an attempt which justifies him and justifies the House of Commons, to use the noble words of Prince Bismarck in the Reichstag when he dealt with this subject, we have to render to the needy the assistance to which they are entitled. That is the object of this Bill, and I am sure it is the object of every Member of the House. It is impossible for me or anyone to make a coherent speech on the Second Reading of a Bill of this kind. We can only take subject by subject and deal with them as we go along. I shall try not to refer, at all events at any length, to the subjects which have been largely dealt with by other speakers. The first of these subjects has reference to the medical profession. The whole of that profession is roused in regard to this Bill, and it is really not necessary now to say much about that part of the subject. I have received an enormous number of letters with regard to it and one of them seems to me very much to the point. I should like to put it to the Chancellor of the Exchequer. The writer says that he has recently bought a practice for which he paid £1,000, which is worth to him £800 a year, but that not one of his patients had £160 a year. He goes on to say that if the Bill as it stands is passed it means not only the ruin of his livelihood, but the joss of his capital as well. Under such circumstances no wonder doctors are in an absolute panic. But it is not merely a question of the doctors, although I am quite sure that both the House of Commons and the Chancellor of the Exchequer would desire to treat them with the utmost care. The whole success of the prevention of disease depends on the doctors who deal with it, and they cannot deal with it unless you employ them in the best way. In my belief the present club system has not been good. Anyone who has read a report of the Poor Law Commission must come to that conclusion. It is brought out strongly by the Commissioners, who stated:— After careful consideration of the working and result of medical insurance in all its various phases, our conclusion is that we shall hesitate before recommending any extension of it even in its best possible form. It is practically that form which has now become universal. If I had any suggestion to make I should make it, but I am sorry to say I have no suggestion, and the difficulty seems prodigious; but I am convinced that it is one that cannot be solved on the lines of the Bill, and there must be some radical change. The next point has reference to underpaid labour, and to the employer being called upon in consequence to pay extra. Where labour is underpaid you exact from the employer so much per week extra. I think that is entirely wrong. The Chancellor of the Exchequer bases it on the theory that the employer gets the benefit of this underpaid labour. If that were true he would be perfectly right. It is not true: the very reverse is true in my opinion. There are two ways in which, so far as I understand it, this underpaid labour arises. It arises, for instance, in practice where you find employés working at softie kind of machine, one getting wages of less than 15s. a week, and another getting double the amount. That, however, depends, to a large extent, on the efficiency, ambition, and diligence of the people employed. If workers get less than a certain amount the employer does not gain; on the contrary, he loses heavily, because his plant is going on all the same, and obviously it is to his interest that the best results shall be got out of it. So far as underpaid labour is concerned, the employer, instead of gaining from it, loses. Yet you are going to put upon him a penalty. There is another view of under-paid labour. It applies to particular industries. Here, again, it does not mean in the least, it means the opposite, that the employer gets the benefit of low prices. The experience of everyone bears out that it is where labour is worst paid that the profits are smallest, and therefore are less able to bear additional burdens.

It stands to reason and common sense that if a trade or industry were profitable it would be growing, and there would be more competition for labour, and therefore the employers could not continue to pay low wages. From any point you like to look at it it is not true that the employer gets the benefit of low-paid labour, and therefore it is not just to him to make him pay extra because he has to employ this low-paid labour. That is one of the parts of the Bill which I believe will have to be altered. Another point which was referred to by the hon. Member for Pontefract is as to the employment of women. I do not think this Bill treats women fairly; I am convinced of that. Let me show exactly what I mean. As I understand the Bill, if women marry after ten or fifteen years they drop out of the scheme; they practically get no benefit. I have in mind a firm engaged in the textile industry, which is extremely in point to illustrate the way in which women are employed. A member of that firm states that of the women employed by it in the textile trade, 50 per cent. are under twenty-one years of age, and 90 per cent. of the total employed are women. The great bulk of these women after working for ten or fifteen years get married, and these women would drop out of the scheme, and their whole contributions would practically disappear. Though it is quite true, as the right hon. Gentleman will tell us, that they can come into employment, but that is no more of a benefit than is now given to men. The result, therefore, is that these women practically lose the whole benefit.

If you insure against a calamity which does not come off, then you lose your fees. But that is not the point, because by the Bill you compel people to insure in a particular way. But in these trades people choose to insure on a scale which represents the risk; they get enormously greater benefits. I am convinced that this part of the scheme must be altered also. It happens that I am not a very enthusiastic supporter of my right hon. Friend the Leader of the Opposition as to Woman Suffrage, but I would be a much more enthusiastic supporter if I believed that women by getting votes could greatly improve their social conditions, and I would do all I could for them. I do say that if the Bill passes in its present form there will be some ground for saying that if women had votes a provision of this kind would not be introduced. The right hon. Gentleman the Chancellor of the Exchequer said that this provision applies also to men. So it does, but in a very limited number of cases, while it applies to the great majority of women who are engaged in these trades. Therefore, I say that it is undoubtedly an injustice which ought to be removed. The next point, which was also referred to by the Member for Pontefract, is as to the friendly societies part of the scheme. The Government should guarantee the minimum benefits which are promised under the Bill. Look what the position is. A society may be mismanaged, and when the time comes that a Member wants his benefit he finds he cannot get it because the society is not in a position to pay it. Surely that is not right. If you tell the man he must insure you ought to make sure that he gets the value that he insures for.

It may be said, of course, that the worker has the option of insuring in different societies, and that he need not have gone to that particular one. But in many cases that is not true, because there is only one society in a district. In any case, these are all marked "approved societies" by the Government, and how can you x-pect a workman to examine into and ascertain the character of their investments, or judge of their financial position before he joins one of them? You obviously cannot. Therefore I think that the very fact that you compel him to insure, and point out the societies in which he may insure, involves the obligation to guarantee to him the minimum benefits. I do not think there would be much risk for the scheme as a whole, because the friendly societies have not the investment of the funds which are under the control of the central office. They can only bring the society into insolvency by malingering or exceptional diseases in particular trades. If it is malingering it ought to be prevented. On the other hand, if it is due to exceptional diseases, then that is obviously the thing against which the insured ought to be covered. I am perfectly certain that if the question were put to the actuaries the right hon. Gentleman would find that very little would be added to the cost of the scheme by giving a guarantee in these cases of the minimum benefits.

I come to a really most important matter, and what I think is a vital criticism of the Bill, and I would like that the right hon. Gentleman would kindly consider what I have got to say on it. I refer to the way in which the deposit class is treated. I really do not think that this part of the Bill can possibly continue. It seems to me contrary not only to elementary justice, and I hope I am not speaking in too aggressive a way, but contrary to the whole scheme as it is explained and defended by the Government themselves. What is the position of the depositor under the Bill? As I understand it, he is only entitled to get the amount of benefit which is due to him from his own contribution, the contribution of the employer, and the contribution of the State. That is not insurance at all, it is simply thrift, with something added by the State and by the employer. The idea of insurance is to be able to guard against, a particular calamity, and unless you do that, you cannot say that the man is insured. That is one point of view, but there is a very much more important point of view. What is the basis on which the whole scheme of the Government is formed? It is what the right hon. Gentleman the Home Secretary so eloquently talked of as the solidarity of labour; that is to say you make a flat rate, you put everybody in the same boat, you do not allow a man in a particular trade, or at a particular age to go and insure for smaller amounts to get perhaps some greater benefits. You say that the whole lot are to go into one pool and the result is that everybody is to get a benefit. It is true that we have this to a large extent in the friendly societies. But what about the wretched residium that are put in a group entirely by themselves. They do not get the benefit of the average.

The whole of this scheme as far as I understand it is based on actuarial calculation in regard to the average of all people employed. But what do you do? You take the worst lives, put them in a group by themselves, and say, "You are not to have the benefit of the whole country, but you are to have a pool consisting of the worst lives. "See how it works out. Those men pay the same amount to get benefits as the other classes. I noticed that the other day in answer to a question the right hon. Gentleman the Chancellor of the Exchequer implied that their position might be improved, if under this part of the scheme they got a surplus, but how in the world can they get a surplus when the whole actuarial calculation is based on an average? You take the worst people, put them in a class by themselves, and obviously an actuarial calculation which would give a surplus to the whole would not give a surplus to the group which is the worst class taken out and put by themselves. I am sure that that cannot continue. It is not fair and it is not just. The whole basis of the scheme is that they are going to treat all working men on the same lines and that they are to pay the same rate. The least, therefore, they can do is to see that the men will get the same benefit. I quite understand the object of the right hon. Gentleman, he wishes to encourage the membership of friendly societies; but he must do it with some element of justice.

If this lowest class, the residuum, or as they were called by the hon. Member for Colchester, the "downcasts," consisted of men who were in that position on account of bad moral character, then I would not have the same sympathy with them, but it is not on that account that they are so placed, but because they are men of bad health and the very class more in need of assistance than any other. I think it is utterly impossible that you can continue that part, of your scheme which suggests that those people who need it most are not going to get the benefit, while at the same time the principle on which your Bill is founded, is that all classes are to be treated alike and get equal benefits. In this connection I would like to refer to a remark made by the Home Secretary. He said that this is only a passing phase, and that this downcast portion will disappear. I do not think that that will happen; I hope it will diminish; but suppose the Home Secretary is right, and suppose it is a temporary thing, then obviously the duty of the Government is to treat them as they treat now the men of greater age, by putting them in the same grade with younger people, and let them get rid of this class, and justly, by treating all the same.

The CHANCELLOR of the EXCHEQUER (Mr. Lloyd George)

This is rather an important, point. May I just ask the hon. Gentleman what his suggestion is? Is his suggestion that the friendly societies should not be allowed to exclude anybody on the ground of health, or how does lie propose to deal with the matter if they should not be admitted to the friendly societies? Does he propose that the State should make up the deficiency or the employer, or does he say that there should be, perhaps, an additional levy on the individual?


I think that is putting me a rather big conundrum. I think it is hardly reasonable to expect me to give a solution. I admit it is very difficult and that it, will mean some remodelling of the Bill. I would make one suggestion since the right hon. Gentleman has requested me. The State will be asked in many directions to make contributions. I do not want to be the first to begin. There will be many demands on the right hon. Gentleman to get more out of the State. I do make this suggestion: I am inclined to think or hope that as this Bill goes through Committee, and hard cases like this are pressed on the right hon. Gentleman, and when he says, "I would like to do it, but I have not got the money," then I hope this will appeal to the conscience of hon. Members that if we cannot get money to do things of this kind, it is hardly the right time to take a quarter of a million to pay salaries to Members.


made an observation which was inaudible.


It would not do this, but it would do something. There is no doubt whatever that this is going to be a very heavy burden, and heavier, I am afraid, than the right hon. Gentleman realises. The President of the Board of Trade was very pleased yesterday that employers had not been making an outcry against the Bill. I hope, I really hope, that he is not a little premature. I hope it is not because they do not quite understand its effects. Let me give the right hon. Gentleman my own accidental experience. Since the Bill came out I have met three employers of labour who are friends of mine, and each one of them said to me, "Do the people realise what this Bill means? Do you know it means so much per year more to me?" Two of them were Scotch and the third and the worst was English. When they said, "It means so much per year to me," I said at once, "What were your profits for the last four or five years," so that I could judge of their ability to meet it. In the case of the first two it meant the equivalent of an additional Income Tax of between 2s. and 3s. in the £ on each of those employers. Let me take the English case. He said to me that it meant £700 per year to him. I asked what his profits were, and in this case it meant the equivalent of between 4s. and 5s. in the £ additional Income Tax. This gentleman is a friend of mine. He is a very humane man, he would be the last to make an outcry if he could help it. He said: "What are we to do in a case like this? I was going to make an addition (and this is an actual fact) to my works, but I will not do it now, until I see what the effect of the Bill is." I said to him what I am sure the right hon. Gentleman would say to me now, namely, that we heard all that about the Workmen's Compensation Act, but that it had not turned out so badly. His reply to that was, "It is quite true, but there is a limit, and the Workmen's Compensation Act in my case can be insured against for £50 per year, while this will cost me £700 a year and cannot be insured against."

I do not think that, the first two cases went beyond the average. It does undoubtedly mean very heavy additional burdens on industry. How is that to be borne? I am only putting this to show that we are not entering on a very light scheme, or on anything which we should rush. I will not say rush, but I do say that not only ample time should be given for the discussion of it in this House, but ample time ought to be given for all the interests affected in the country, to understand precisely what the effect of it is. I do not wish to delay the Bill, but nothing would be more improper in my opinion than that a scheme so far reaching as this, should go through without those affected exactly realising what it means in their particular case. This is going to be a big burden on industry, and how is it to be met? The right hon. Gentleman gave two statements as to the way in which it could be met. One was that it would be met by the increased efficiency of the workers, and he gave us letters from German employers, the value of which an hon. Member opposite has characterised more strongly than I should do, showing the value of the scheme. Unlike what the hon. Member says, I think everybody in Germany, as far as my experience goes, is pleased with the compulsory insurance, and I think that both employer and workman like it. That is my opinion, but if we turn even to the right hon. Gentleman's own letters, they do not bear out that as a matter of business that they do get back in pounds, shillings, and pence what their scheme costs. One of those letters says that many causes, the chief of which is the rise in wages, have improved the efficiency of the worker; another says, "I am not prepared to say whether or not it has increased the efficiency of these particular men," and a third says, "It has not in my opinion increased the efficiency at all."

8.0 P.M.

When a man knows his income is going to be diminished by the equivalent of a 5s. income tax he wants something more than a phrase about the increased efficiency of the workman. I do not say there is not something in it. I think there is a great deal in it. I think it was in one of Mill's books I read where he pointed out the effect of the old agricultural system in Ireland, the hopeless system in which men were placed, which destroyed their character and took away from them all motives for thrift. We know that the Land Acts have entirely changed that, and that they have a motive for thrift, and that they are becoming a very different class of people. I think that would always be true to some extent, but do not let us exaggerate. As regards Germany, remember that the position was not the same. We have now a great many of those voluntary agencies, and the men have a stimulus in them that did not exist in Germany. What is more, the German scheme includes accidents, and before that it would appear that the masters had to pay for them on their own account. It is obvious that the effect on efficiency in this country cannot hope to be even as great as in Germany. I do not think there is much gratification there for the man who has got to pay out the money immediately. The right hon. Gentleman made another suggestion. I am only speaking from memory, but I am sure he will correct me if I am wrong. He stated in an interview, I think, this—an interview with one of the papers, and I may observe that nothing could be more valuable than to have all the interviews possible as a means of understanding the Bill and improving it—that it was only right that the consumer should bear part of the burden of improving the condition of the producers and workers. With that sentiment I entirely agree, but how in the world are you going to bring it about if the level of prices in this country is largely regulated, as I maintain it is, by the competition of foreign manufacturers, who are not subject to the new burden which you are placing upon the home producer. I see an hon. Member opposite pointing to something, which is perhaps in his mind, that the Germans have also agitated for a heavier tariff. What has that got to do with it? We are subjected now to this competition. We will differ perhaps about the results, but we need not differ about the facts.

Let me point out that something like 10 per cent. of the manufactured goods which are consumed in this country come from abroad, something close upon 10 per cent. Any one engaged in business knows that that percentage has an enormous effect in breaking home prices, much more than the proportion would seem to indicate. In these circumstances it is certainly true, and again I think we will agree about the facts, that the home prices are to a large extent determined by the severity of foreign competition. If that is true, obviously you cannot get an additional burden transferred to the consumer unless in some way you free the producer from a form of competition which is not subjected to the same amount of burden which you impose upon him. Hon. Gentlemen opposite see, of course, that I am trenching upon the fiscal fallacies which appeal, as the Prime Minister has said, to men like myself who unfortunately have "uninstructed minds." But it was hardly to be avoided, and I think it is very relevant. A great deal has been said about the German scheme and about Prince Bismarck. Bismarck had also an "uninstructed mind," and he also had this advantage that he used to boast about it. He was responsible for two things, the alteration in the tariff and the insurance scheme. Which of these went first? The Home Secretary spoke to us about three or four new forces very eloquently. One was the law of averages; another was the motive power of acturial calculation. I would like to mention another. I would like as a preliminary to dealing with unemployment that we should try to get more employment in our own country, and when I say this I ask how did Prince Bismarck deal with the matter? More than this, you have it admitted by all German writers, or at any rate all that I have read who have dealt with this subject, that it was because of the security of the home market that Prince Bismarck succeeded in getting the German employers to agree to the part of their charge of the industrial scheme. We are giving our employers practically nothing.

I only mention this because I do think it is relevant. I do not wish to press it in the least, and I can assure the House that I do not wish to delay the passage of this great scheme until you get the other reform. Far from that; on the contrary, I am convinced that the very fact that you are putting this additional burden on our home manufacturers is one of the strongest weapons for bringing about the other reform which I advocate. All I would say, in conclusion, is to repeat what I said at the beginning, that whilst I see tremendous difficulties in this scheme, and would not like to be a Member of the Government responsible for trying to get it through, although I would be proud of doing it if I succeeded, the difficulties are so great that I do not envy them. In spite of that, I wish them every success, and I hope we may in the House of Commons, amongst us, succeed in getting a measure which will really merit the praise which has been given to it.


I do not wish to detain the House at, this stage, and I am sure after the cordial unanimity of the approbation which has greeted the First and Second Reading of the Bill I need make no apology for offering one or two criticisms upon minor points connected with it. I have been very much struck by the manner in which criticism has grown as the Bill has become better known in the country. If the right hon. Gentleman who is in charge of the Bill could see his way at this stage to allay some of that criticism I am sure he would facilitate the Bill in its subsequent stages. The criticism has emanated from two quarters. In the first place there has been a certain amount of criticism on the part of the medical profession, which is very closely affected by some of the provisions of the Bill, and hi the second place criticism has emanated also from some of the great municipalities of the country. It is especially in regard to the latter class of criticism, which has not yet occupied the attention of any of those who have addressed the House hitherto, that I wish to say a few words.

The Bill sets up in every county in England a new public health authority. These local health committees are constituted on a non-representative basis, and charged with functions which are already to a very great extent being performed by the existing municipal bodies, and I need hardly remind the House that almost in every county, in every borough, and in every town, and in almost every urban district council a public health committee has been set up to administer the Acts relating to the public health, and that under the provisions of the Housing and Town Planning Act of 1909 county councils are obliged to set up public health committees, and now this Bill proposes to set up a local health committee in each county. The mere coincidence of names will in itself create a certain amount of confusion, yet if it was merely a question of name the matter might be easily met and remedied. But the functions which the right hon. Gentleman proposes to entrust to those local health committees trench upon the functions of the existing municipalities. These local health committees are charged generally with supervising powers over matters affecting the public health; they are entitled and empowered to call in the advice of the medical officer of health, who is the servant of another body, and under the 43rd Section of the Bill they are empowered to make use of the office of the local authority. These are points which will undoubtedly create friction between the local health committees and the existing municipalities of this country, which are affected by this Bill in three material respects. In the first place as employers of labour, in the second place as the public health authorities of the country, and in the third place in their financial aspects.

At this very early stage it is impossible for any of the great municipalities to forecast what the financial effect of this Bill is going to be in their regard. But there are two of the principal Clauses to which I wish to call attention. Under Clause 14 the local authority is apparently expected to insure the solvency of the local health committee. I need not now go into these provisions with regard to the making up of any deficiency in the medical benefit. It throws the joint responsibility for that upon the Treasury and the local authority. I hope that in some of the later stages we shall hear something of the course that will be adopted if they, the Treasury and the local authority, refuse to meet the deficit or to sanction the expenditure. It is contended in the Memorandum issued by the Chancellor of the Exchequer that the local authorities can well afford to meet this charge, that they are making savings in regard to medical charges which are met by the local rates at the present tune, and that, therefore, they are in a good position to meet the additional burden. It is a highly problematic question how far it would be possible for the local authorities to save in the cost of administering existing institutions, or to, save in the cost of existing organisations, and whether such saving will bear any proportion at all to the extra charge which they will be called upon to meet under this Act. I would also remind the House that the Bill includes an enabling Clause, enabling the local authority to finance or to provide funds for the local health committee. The local authorities of this country have had a somewhat bitter experience of these permissive and enabling clauses, and they have gradually come to learn that when a permissive and enabling power is given to them it very soon develops, and is regarded by those who elect the local authorities, not as a permissive and enabling power, but as a compulsory obligation.

Another point which closely affects the local authorities is the provision in regard to excessive sickness, and I think that the Chancellor of the Exchequer himself will acknowledge that the provisions in this Section are drastic and somewhat novel in character. These great municipalities are at the present moment responsible for sanitation, for housing, and for the general conditions within their areas. In this Bill it is possible to order an inquiry by a Government official from the Home Office. It is possible, therefore, a power is placed in the hands of a permanent official practically to fine the great municipalities of the country. It is a poor consolation to those municipalities to know that that power to fine which is now vested by this Bill in a permanent official at Whitehall is subject to confirmation either by the President of the Local Government Board or the Home Secretary. I hope that at a later stage some provision will be inserted in this Bill for an appeal against such orders. I am quite willing to admit that the machinery which exists at the present moment for the administration of public health is in many districts by no means an ideal machinery. I believe it could be improved. But surely it is overloading a Bill which has for its primary object insurance against sickness to insert in that Bill provisions for the reform of the machinery of the administration of the Public Health Acts, reforms which could more properly emanate from the Local Government Board, which, after all, has expert knowledge on this question and can thus deal with it.

We object, in the second place, to the fact that in regard to the contributions that we may have to make in respect of excessive sickness, power is given to the Treasury to take these contributions from our local taxation accounts. Our only consolation is that under this head the Chancellor of the Exchequer has at, last acknowledged that the services which are to be performed under this Act are to a very great extent national in character. We have in this Act an acknowledgment that in respect to the provision for sickness the charge should be a national, and not a local charge. We regard this as a very valuable admission indeed, and one which we hope will be acted upon, developed, and elaborated in other directions. The third respect in which local authorities are affected by this Act is in their capacity as employers of labour. That in some of our greater towns is a very important consideration. I need only call attention to the figures in regard to the county of London, where we shall have something like 17,000 employés of various sorts employed under the Education Committee, and. on our great tramway system. These will involve a charge under this Act of £11,000 a year. There are two questions that I hope the Chancellor of the Exchequer will answer when he replies. The first question is in regard to the provident funds of some of the great municipalities of this country, which do insure their employés against accidents and disablement, but which do not, for actuarial reasons, pay any pension if the individual is permanently disabled within ten years.

Other questions which arise under this head is the position of the teachers in our non-provided schools who are not included in the Elementary School Teachers Act, 1898. The question will arise, and it will be a question, unless the right hon. Gentleman can give us some guidance, which may be somewhat difficult of solution. But it is one of very great importance to the municipal bodies, as to who is the employer for the purposes of this Act of these teachers. Are these teachers in the employ of the council, or are they in the employ of the school managers? Local authorities will receive a certain relief under this Bill, in so far as it will relieve them of the obligation of extending their provident or superannuation funds to cover classes which are at present not included. There is a class which will to a certain extent not benefit under this Act. In the county of London we are now in the habit of paying as sick pay half the wages of those who fall sick, except in the case of an accident during employment, when we pay full wages.

What happens under this Act? All those employés will come under the operation of this Act. Therefore we have two alternatives before us. We can either continue both to pay the benefits which we at pre- sent pay, and for which there is no legal obligation upon us, and at the same time pay the contribution of the employer—which, as I have already explained, is a matter of some £11,000—continue to pay both these charges, or else we turn round to our employés and say, as doubtless a good many employers will do, that the passing of this Act and the payment of the employers' contribution under the Act relieves them of all obligation in regard to these extra and additional benefits which they have granted in the past. I only mention this instance because it is one which is not peculiar, either to London or the municipalities, but which applies to many large employers as well. We have in London, in regard to this Act, an additional question, arid that is whether or not it will be possible for us with this large staff of 17,000 employés coming under this Act to form our own "approved society." The advantage to the members in doing so is of course obvious, but there are certain difficulties in the way of the municipality adopting a course of this character. In the first place, such society must be under the absolute control of the members, and the kind of control to be exercised by the county council over such a society would be comparatively small and insignificant. In the second place, those who leave the employment of the council would have to continue as members of such a society.

Therefore, supposing such a society was subsidised on provident lines by the county council, we might eventually find ourselves subsidising members of a society who were no longer in our employ. These are one or two principal points, points possibly of friction between the municipalities and the right hon. Gentleman, but the principal point is the overlapping of the functions of the local health committee and the existing council as the public health authority under Statute. It is to that point, and that, point principally, that I would invite the right hon. Gentleman's attention. If I may turn now to the source of much opposition to this Bill, which seems to be growing both in volume and intensity, I should like to say one or two words in regard to the medical profession. I have been in constant communication with individual doctors since this Bill was first published, and I find practical unanimity on the part both of the general practitioners and also consultants and those not directly affected, but who have an interest in their profession on several points. In the first place there must be free choice of doctors from a panel which shall include all those who wish to serve upon that panel in any given district, and who were not disqualified either through inefficiency or misconduct. The advantage of free choice of doctors I need not emphasise both to the patients and the profession, and I am not sure the free choice of doctors 'by the patients should not also carry with it free choice of patients on the part of the doctors. We have got to remember that under the present system the doctors will be paid by a system of capitation. There are a class of patients, epileptics and alcoholists, who are manifestly not suitable subjects for treatment under such a system of payment, and I hope as we advance in this Debate the right hon. Gentleman in charge of the Bill will foreshadow some other method dealing with them.

I come now to the question of remuneration. Of course the system of capitation is not popular, and never will be a popular thing in any profession. The system of capitation originated partly from philanthropic motives in the old friendly societies and it applied particularly to selected lives. So long as it was applied to the old friendly societies there was less objection to it, but now that the system of capitation is to be extended so as to include non-selected lives the objection on the part of the medical profession must undoubtedly grow. I notice that the medical profession as a whole have not been very ready to accept the somewhat optimistic calculations put forward by the right hon. Gentleman. If we compare the gross amounts derived from existing club practice with the aggregate amount they would derive under this Bill, I doubt if the comparison is highly favourable to the Bill. But I would remind the House that at the present moment the backbone of the doctors' practice is not the club practice but the artisan practice—the practice among men of from 35s to 40s. a week, who at the present moment are not included in club practice, but who under the right hon. Gentleman's scheme will be brought under the capitation. Therefore under this Bill you are depriving the doctors of what has hitherto been regarded as the backbone of their practice. I might quote an instance from the Borough of Fulham, which has a population of 160,000 people. Ninety-five per cent. of these people are below the Income Tax level—that is to say, 9.3 per cent. of these 165,000 people who live in Fulham will come in under the operation of this Bill. I need not elaborate the point. I ask the House to consider what the position of the doctors in Fulham will be, taking that one instance out of many, supposing the Bill is passed in its present form l I do not for one moment advocate a wage limit to meet this difficulty. We know in Germany there is a wage of 6s. 8d., above which the people cannot insure under this system of capitation for medical benefit. I suggest to the Chancellor of the Exchequer that if he wishes to gain the co-operation of the medical profession the first thing he must do is to deal adequately —I do not ask for generosity for the medical profession—but to deal fairly and adequately with them, in the scale fixed for the capitation grant. There is one point which rather puzzled me when considering this Bill. We all read the announcement that the doctors will receive 6s. per head, taking the good risks with the bad.




I understood it was 6s. per head for all members of approved societies. Let us take what the Government themselves hitherto considered to be fair for selected lives. If you take positions where men are chosen for their character and health—the particular qualification for entry into the Post Office—these specially selected lives are less liable to sickness than any lives in this country, and there the doctor receives a capitation grant of 8s. 6d. I ask on what principle of logic or common sense it is proposed to pay a lower rate to the less good risks included in approved societies?

The next point in regard to the medical profession is the question of control. I do sympathise with the medical profession in their request that their control over their operations should not be exercised by the insurers only. We have in various districts an elaborate machinery in the British Medical Association, of ethical conditions which I need not describe in detail which could, I think, be elaborated to meet the requirements of this Act. But in any case I feel that it is a striking omission that no provision is made for the representation of the medical profession upon the local health committees. Then I suggest that the contracts under which the doctors serve under this Act should be made, not by the insured, not by the society, but by some independent body, and I have two reasons for advancing this suggestion. In the first place, the more the approved societies under this Act can reduce their expenditure, the greater will be their profits and the greater, therefore, the extra benefits they will be able to confer.

We all know there is no easier or more facile means for a great friendly society to increase its profits than by reducing the remuneration of the doctors who serve them, although in the larger friendly societies in this country I do not think the doctors will ever complain that they have not been most friendly treated. In this connection I should like to call attention to another very striking omission on the part of the Bill—namely, that no attempt has yet been made under the Bill to deal with surgical benefit. I shall watch with interest what system the right hon. Gentleman proposes to deal with those cases which require surgical treatment. I shall also be interested to see how he deals with the question of appliances as distinct from drugs. Then there is the question of tire great institutions and hospitals, more especially in London. It does not seem to me the right hon. Gentleman has seriously considered the effect of this scheme on some of those great institutions which are at the present moment supported by voluntary contributions. Those contributions are of two sorts. In the first place they come from the charitable public. Those contributions may or may not continue under this Bill. In the second place they are supported to a very large extent by contributions from great employers of labour, who make handsome donations to some of our great hospitals in return for the treatment given to their employés. It is obvious that this particular class of voluntary contributions will undoubtedly cease under the operation or this Act. To that extent our great hospitals will lose a portion of their present income, and yet the Government apparently expect that those institutions, although they will be deprived of a large part of their income, will be able to continue conferring their great benefits upon the public without being able to replace that income from another source. I hope provision will be put into this Bill to enable the local health committees and the friendly societies to make a substantial contribution to those great institutions in respect of those patients who are sent to them for treatment.

I also wish to call attention to the fact that at the present time there is practically no provision for institutional treatment, except in cases of consumption. We all know how important it is, especially in some of the district s in London, that sick people should be, removed from insanitary homes, either to the great hospitals or to some other institution for medical treatment. In all parts of London there are cases which could never be satisfactorily treated if left in their own homes, often in a single room, amid insanitary surroundings. In all classes there are peculiar types of cases which can only be treated in great institutions, and yet no provision is made in this Bill for any form of institutional treatment whatever. I do not wish to touch on any of the other points connected with this measure. I need hardly assure the right hon. Gentleman that the criticisms I have advanced this evening have been prompted by a desire to facilitate the passage of this Bill. I have called attention to certain points of friction between the medical authorities and the great local authorities of this country. It is because I wish to see that friction removed at this stage of the proceedings before we go into Committee, and before the feeling against this Bill has had time to grow in volume, that I have ventured to address the House at all this evening.


It is obviously impossible for anyone to attempt to cover the whole ground or even to speak on any considerable portion of this immense measure. I trust that the suggestions that have been made from all quarters of the House will receive due weight, even though they must be somewhat incoherently stated. The Chancellor of the Exchequer has a great opportunity before him. There is not the slightest doubt, after the discussions which have taken place, that there are many hon. Members in this House who are fully conversant with certain branches of this great question. Some hon. Members are experts on the unemployed question, and many of the Labour Members have given almost a lifetime to the study of labour problems. Other hon. Members have shown a very intimate knowledge of the whole problem of insurance against sickness, and I am quite sure, if the Chancellor of the Exchequer is prepared to accept some of the suggestions that have been made, he will very sensibly facilitate the passage of this Bill. I think the hon. Member for Bootle (Mr. Bonar Law), who made such a very brilliant speech in the early part of our proceedings, was just a little unjust in his criticism of the unemployed Section of this Bill. I have attempted to give very close consideration to that Section of the Bill, and I am bound to say, in trying to find weak spots, I have almost entirely failed.

I have given a very considerable amount of study to this question not only during the last few weeks, but in previous years. It seems to me that the President of the Board of Trade has had the great advantage of presenting a case which has been carefully and closely studied for some three years past. The right hon. Gentleman has had the help and advice of the experts at the Board of Trade and all the assistance which investigators on the Continent have been able to render him. One of the views expressed by the hon. Member for Bootle I take exception to. He said that, after all these scheduled trades did not suffer specially from unemployment. The Home Secretary pointed out and it is well-known that these trades were selected because they suffered from very serious fluctuations in employment. The hon. Member went on to say that had it been the case of the casual labourer who was getting help and assistance, there would have been more value in this measure. It is quite clear that casual labourers belong to all trades, and all that can be done at present by this measure is to help those trades of which we have had long experience which suffer from the serious fluctuations, and in regard to which there can be no possible doubt as to the success of this experiment That is all I want to say about that portion of the Bill except once wore to give it almost unqualified praise. I am absolutely certain that the trade unions are fully safeguarded, and I have not a shadow of a doubt on that score. The hon. Member for Blackfriars did raise a question as to whether trade unions might suffer under one section of this Bill. After careful inquiry I am quite convinced that the trade unions are fully safeguarded, and I believe that in a very short space of time we shall get an expression of opinion from trade unions quite unanimous on this subject, and I most heartily wish success to that portion of the Bill.

May I say a word or two about the health insurance side. I am bound to say that in a very large measure I agree with the hon. Member who has just spoken, especially with regard to the question of the local health committees. I am very anxious there should be conveyed to the Chancellor of the Exchequer some reasons, for perhaps modifying the Bill as it stands. These local health committees are almost sure to be a cause of friction in many districts and in many localities where they will be set up. We run a very serious risk to-day of creating too many authorities. The present public health authorities are dealing for a very wide area with the question of the public health, and, on the whole, they are dealing with it in a very satisfactory fashion. They are beginning to aim at the causes of disease as well as the effects of disease, and we have set before them a very high standard, and we are constantly setting before them a still higher standard of what they should do in their endeavours to prevent disease. We are introducing an entirely new authority, and I am quite convinced we shall run some risk of lessening the value of the work that is already done by the public health authorities. If we are to stamp out disease—let us take, for example, the case of the great scourge of consumption—it is obvious we must do two things. We must give power to the local health authority, whatever that authority may be, to survey the whole field and to deal in a comprehensive fashion not only with the effects, but also with the causes of disease; and, secondly, that authority must either be the sole authority or it must be in close touch with the co-related authorities, so close, in fact, as to be almost overlapping. Frankly, I believe that is almost impossible. Apart altogether from the very great and serious administrative difficulties which will be confronted by these new authorities, I am sure there is likely to be friction between the public health authorities and these new bodies.

If we are to endeavour to stamp out disease we must use the existing public health authorities. These new authorities cannot cut at the roots of disease. We must trust our medical officers of health, and we must do more than put one or two doctors upon this new authority. I honestly believe the Chancellor of the Exchequer would be well advised to drop this idea of a new local health authority, and to strengthen the existing public health authority, say, by the addition of certain experts, doctors, and so on, and to put power into their hands so that they may cover the whole field instead of dealing with it piecemeal, as it will be dealt with if a new authority is set up. Larger powers, it seems to me, should be entrusted to the public health authorities to deal with sickness and with disease in all its forms. That leads me to the ques- tion of the sanatoria. I do most sincerely hope—this is not by way of criticism; it is more by way of question than anything else—that we are not going to establish sanatoria throughout the length and breadth of England, utterly regardless of the people who have to be sent there and utterly regardless also as to the best way and means of stamping out consumption. Let us take a dozen people who are suffering from consumption. A certain percentage of them will be in the incipient stage and another percentage of them will be in the final stage when it is impossible to cure them. You obviously do not want the same sanatorium for those two different stages of consumption. You must clearly have two absolutely different institutions. You cannot send a man who is in the incipient stage to an institution which is occupied by people in the final stage, and if you have sanatoria for those in the final stages, they must clearly be homes in which people are able to die in peace under the most favourable circumstances.

Surely the object of the Chancellor of the Exchequer is not to set up sanatoria in which men can die, even under favourable circumstances. I do not say that is unnecessary or that it should not be done, but his object is to stamp out consumption, and to get at the root of disease. If that is so, he must have graded sanatoria, and he must do more than that, he must set aside some of this money which is being used for sanatoria for preventing consumption. Cannot he so modify his Bill as to give to the authority, whatever authority he gives the power, sufficient elasticity of power to enable it to use the money in other directions if necessary. Under the Bill their powers will not, as far as I can see at present, be sufficiently elastic, and I want to see these powers so broadened and made so elastic that they will be able to use the money that is apportioned for this purpose for the purpose of stamping out consumption in various directions by prevention. I am quite sure that would be the most profitable way of spending the money. At the same time sanatoria are necessary, and the whole question is whether you will build huge institutions which are to cost an enormous sum of money, or whether you will build institutions as cheaply as possible in the most healthy situations and look forward to the time when they will not be needed, and when possibly they will have to be burnt down. I feel myself that with the great fluctuations in medical opinion on this great question it would not be wise to spend a vast sum of money in building sanatoria unless at the same time you take the advice of all the experts on the subject and do everything to safeguard yourself against making a very big mistake.

May I say just one word about the doctor. My wife happens to be a doctor, and she feels very strongly upon this subject, although at the same time she has never had anything to do with friendly society work, and has given the greater part of her life almost freely and gratuitously to the service of the people in East London. She feels, a great number of doctors feel, and, in fact, we may say the vast majority of men who have practices among the poor feel, that doctors are likely to be so unfairly treated that they will lose all interest in their work. I venture to say, and I do not think anybody will contradict me, that unless you get the doctors on your side this portion of the Bill will be an absolute failure. It must be. How can it possibly succeed? You are engaged in warfare against disease. The only people in Great Britain who are competent to advise you in your attack on disease are the doctors. They may be right or they may be wrong in their demands. But you will have to get them on your side or else you must drop this portion of the Bill. How are you to get them on your side? My answer is: You can do so by making a careful examination of the facts of the case. The Chancellor of the Exchequer has received deputations. He has been good enough to receive a deputation of friendly society doctors. But I doubt if even now he knows the burden that rests upon the average doctor in a comparatively poor district. I do not think he knows the burden that rests upon the doctor who really tries to do his duty—who cares about his patients. We want the doctors to put their whole hearts into this Bill, and to set up a very high standard for themselves. We want them to do their best to crush out disease and to cure sickness the moment it comes on man or woman. We must have their goodwill.

9.0 P.M.

I think it was the hon. Member for Bath and another hon. Member from Ireland who pleaded that the Post Office standard should be set up. I do not think that that is at all a bad standard. Personally I believe it will satisfy the doctors. I do not say that the 8s. 6d. should absolutely include everything. There are some special cases, and some exceptions, which will have to be met. I am quite sure that if the doctor is to pay for his own drugs and dressings out of the 8s. 6d. you will not be over-paying him. Take the case of Germany. Even in that country, where—everybody knows the fees are much lower—for the professional man gets nothing, like the income that is attainable here—the professors in the universities, for instance, get only about half the salary received by the professors in an English university—in Germany, where the fees are so much lower, the sum allowed for medical attendance is 5s. 8½d., without drugs and dressings or any of the extras which are provided for. The Chancellor of the Exchequer suggests 6s., not to include drugs. But he has to take into account the higher standard that prevails in England. I am perfectly certain that Ss. 6d. is not too much, and if it cannot be done for that, if the proposal is not actuarially sound at 8s. 6d., then it seems to me that the right hon. Gentleman must make some extra provision. You must not ask the whole profession to do charitable work. You must not compel them in a sense to do it. You may let them do it on their own account, as they very frequently do, but you must not compel them. You must give them a chance of making a decent livelihood. You must command at this moment their good will. I would suggest that the Chancellor of the Exchequer could not do better than to get together a small body of doctors who are experts on this subject. I do not mean the men at the top of the profession who do not know the conditions that the friendly society doctor has to contend with. I mean the men who are in the thick of it, who, from day to day have to deal with from thirty to seventy patients. If he could get these men together to talk the whole matter over, I believe it might be possible to arrive at a decision which would satisfy them and set them to work upon this great task of coin-batting disease with good heart and good will. I wish to say a word with regard to the collecting society, and I should like to put a question to the Chancellor of the Exchequer. You have got various grades of collecting societies—some of them mutual, friendly, and co-operative in character, and some purely industrial concerns. I am not asking the Chancellor of the Exchequer to take in all these collecting societies. But obviously there are two logical courses open. One is to nationalise the whole business from top to bottom, and to take over all the industrial and collecting societies who do business in insurance from the very beginning to the very end. The other course, and I imagine the only one really open to us, is to make it as easy as possible for these collecting societies to come in.

What do I mean by that? The objection to the average collecting society is obviously on the score of expense. A very large sum of money is spent in paying the collectors. But it is not wholly wasted. The average collector deals with a class of persons who is not got hold of by the ordinary friendly society. He goes from house to house, and, even if it costs a good deal of money to get in their contributions, thrift is in this way encouraged among these people. I feel with many Members of this House that there must be a vast amount of money wasted. But still, that is no reason why the Chancellor of the Exchequer should not use them on the sickness side, if they are willing to come in on modified terms. If a collecting society can show, for example, that it can do the work of collecting for the sick benefit more cheaply than a friendly society, and if they offer to do it, will the Chancellor of the Exchequer allow them to come in?

That is a question which ought to be answered fairly soon, because, as everybody knows, we have all been flooded with letters, some very unwise, very unreasonable and illogical, some even unfair and unjust, but some, on the other hand, extremely fair and extremely just, written by men who see their whole livelihood at stake. When we are dealing with the unemployed question we must admit that there are tens of thousands of men employed in this industry, and we do not want to see their livelihood sacrificed. If the Chancellor of the Exchequer can meet them in some way I personally shall be most grateful. My predilections are all in favour of nationalisation and of taking over the whole of them. But, as that is impossible, let us do the very best thing we can for the societies that are mutual and friendly in character, that are not on a profit basis, and that are willing to come in with, perhaps, some modification of the Chancellor of the Exchequer's rules and regulations. Finally, I may give my unqualified praise to those who are responsible for framing this great measure. With all its defects, and it undoubtedly has defects, and with all the difficulties which have faced those who have framed it, I am certain that success awaits it if only we are patient and give due attention to the claims of those who are likely to be injured or affected by it. There is hardly a man in this House who has not some large portion of his constituency made up of the working class. Nearly every Member of this House comes into contact With the working class either directly or indirectly. Some of us have had a very close and intimate acquaintance with the working class all our lives, and we can picture in imagination this vast army of diseased people—this pale battalion of broken folks—shuffling with leaden feet across the bridge of sighs into the unknown, and if this Bill does anything to mitigate their sufferings, their misery, and the hardships which they endure from day to day and year to year then God speed it.


When the Chancellor of Exchequer introduced this Bill he invited all the Members of the House to help him to fashion it and to form it, and I am bound to say, though probably nobody dislikes more than I do what the Chancellor of the Exchequer really does and says, I am perfectly ready to do what in me lies to meet his views in this respect. But I think that that entails an equal obligation on the part of the Chancellor, and if he desires us to help him I do honestly think the House is entitled to much more help than it has received from the Chancellor. This measure which we are invited to consider is one which affects the large majority of workers in every constituency, of every Member of this House, not excluding by any means the University constituencies, and not only has it been hardly possible for Members of this House to master the details of the Bill, and the memoranda which had been rained upon them, but it is impossible for our constituents to even master its meaning. It may be said that that may not matter in regard to the Second Reading, but I respectfully dissent, from the idea that a Second Reading should be a formal matter. If so let us do something else, do not let us waste the time of the House over a matter which is formal, listening, it I may say so, respectfully to eloquence in regard to what everybody feels and which nobody feels the necessity of saying. If we are to discuss the Bill on business lines surely the sooner we get to business the better, and I think I may be allowed to criticise quite frankly the Bill, hoping that it will be understood that those criticisms come from a man who sincerely desires to help the measure, and are not uttered in any captious spirit.

In regard to the various memoranda which I have received, like many other Members, having to serve on a Grand Committee and to attend to the ordinary business of a Member, it has been impossible to give to these memoranda the attention which they deserve. But there is one which I have read because it happens to be the shortest of them, and I think by far the worst. That is the memoranda which purports to give an account of the insurance system in Germany. This memorandum consists of ten pages, and a half of it is taken up with a panegyric on the Chancellor's measure, so that that does not represent any adequate instruction in regard to the German scheme. I have here one large volume out of three which represent what Germany considers necessary with regard to their measure of insurance, and that one volume is part of a special report made by a special committee to the Reichstag which is considering and amending the measure, which has been in existence for a quarter of a cent my. I think that really we are entitled if we are to approach this measure having at our disposal the experience of other countries, as a means of avoiding the errors of other countries—we are entitled to something better than a bit of paper like this dealing with the German system. This is not the end of it. What would you think of someone who endeavoured to give an account to the German Parliament of the Workmen's Compensation Act if he omitted the Act originally passed, and merely gave the Act in its present form, or described the constitution of this country and left out the Parliament Bill. That would be an analogous case. Really I trust the right hon. Gentleman will forgive me, but I do feel very strongly upon this question, having spent my holiday at Easter in going across to Germany and having collected a vast amount of documents, of which the one I have just referred to is among the smallest bearing upon this question. To be put off with a Paper like this commented upon by an eloquent speech from the Attorney-General is not a fair manner in which to present to the House the results of the system in Germany.


Will the hon. Gentleman allow me to ask him how the Government could have given to the House details of the measure which is now under the consideration of the German Parliament and which is being altered from day to day?


The hon. Member is perfectly entitled to ask that question; but what is the use of giving us this paper which purports to be the existing system of German insurance when that system is being modified and amended, and when what we want is the latest information. What we want is what Germany is doing to-day; not what Germany is now engaged upon altering. Let us have the most recent experience, and do not let us have what the Germans are now going to modify. I do not, however, want to labour this point, because we are not here to discuss the German scheme. We are here to discuss our scheme, and if we are to do that properly we have to consider the position of Members of this House. What can we know about it? What do we know about it? except in regard to the experience of foreign countries. And if the Government mislead us as to that, as they are misleading us in regard to this document, I do think that there is ground for complaint on the part of sincere opponents of the Government like myself, who are prepared to do their best for them on the present occasion. I will only quote two instances of very important errors in this document. In the first place how is the table given? It is given as representing a contribution towards the invalidity part. That is altogether misleading, because invalidity insurance in Germany includes old age insurance, and not only that, sickness insurance and military insurance, including death benefits, and under the new law pensions to widows and orphans, so that the whole scheme of the law is misrepresented by the Paper we have received from the Government. There is this further question alluded to in the speech of the Home Secretary of linking up invalidity and old age. The thing is more or less as broad as it is long. According to the scheme of the Government, we consider the invalidity a continuation of the sickness, whereas the Germans consider invalidity as premature old age. However, the result of that German scheme is to make it far more far-reaching, and if it had been possible to link this measure definitely on to the present old age pension scheme, which was a point foreshadowed by the Home Secretary, it will in the long run be a far more workmanlike measure, and that is presumably what the Government aim at doing. Meanwhile it is quite sufficient to deal with the Bill as it stands. On page 9 of this Paper about the German insurance scheme there is a great misrepresentation with regard to the maternity benefit. The maternity benefit is one of the best parts not only of our scheme, but of the German scheme, but in the German scheme it lasts for eight weeks and not six, as it is here stated, and six of those weeks are after the child has been born. There are other details of a very important nature in connection with this benefit which Members ought to have a chance of studying. Then there is, rather curiously, on page 4 of this document a sentence which is put in italics:— The compulsory provisions do not include agricultural labourers, domestic servants, and home workers. That is not true, according to the new Bill —I am dealing with the new Bill—and there is no object whatever in giving us what the old Bill contains. We want the newest information we can get, and the new Bill includes agricultural labourers, domestic servants, and so forth, with a few very stringent exceptions, and we ought to be informed to that effect. There is another point with regard to this German scheme which might also have been alluded to. I only mention it because I gather, not only from that document, but from the speech of the Attorney-General last night, that he is convinced not only that our scheme is the best the world has ever seen, but that it is immeasurably better than the German scheme. I am by no means prepared, on the information before us, to share that opinion, and the first thing which will occur to anyone is that the German scheme has been tried, and has succeeded, and whatever we may say about our scheme, it is still in the air, so that I think it will be wise not to count our chickens before they are hatched in considering this measure. Again, this document omits to mention that invalidity and old age insurance is arranged on an actuarial basis which has resulted in a reserve fund of £74,000,000 being accumulated, and that money is used for the purpose of undertaking preventive work which is likely to lessen the contributions which will be required from the invalidity fund. That is a very valuable and important point in this scheme. I myself have seen in Germany excellent workmen's dwellings and garden cities which have been financed at very low rates of interest from the funds of the invalidity money. Further, the in- validity insurance fund possess no fewer than seventy-one hospitals, thirty-seven of which are consumptive hospitals, and they do not confine their attention merely to consumption. They extend their activity over a very much wider sphere. There is further, not in the scheme itself but in the report of the scheme, a most valuable discussion of the question of the relation between sick clubs and the medical profession, and in view of the fact that in Germany there has been very great difficulty in that connection of the same kind which threatened us here, it would be a great advantage if we could be put in possession of that discussion which has taken place in the committee in Germany with regard to that important question. After all it seems fair to compare our position as a House with the position of members of the Reichstag in approaching this question. Every member of that assembly has had twenty or twenty-five years' experience of that measure. It is part of the universal life of the country. He is able, to approach it from the point of view of personal experience, which none of us have been able to do, and consequently we ought to be supplied more liberally than we have been with information of German experience of this measure, and it would be well if the Chancellor would withdraw this ridiculous document and supplement it by one which is really up to date. I do not pretend that we should be without information as to the German scheme, but such information as we have ought to be up to date, and far more complete and extensive than is contained in this Paper.

There is another question which is of importance. The German scheme does not, of course, include any compulsory insurance against unemployment. It ought to be borne in mind that, in calculating the relative merits of the German scheme when compared with the cost of that scheme to employers and employed, unemployment insurance does not enter into the calculation at all. As regards the scheme itself, I honestly think all one can do at the present stage, while welcoming the principle of the measure, is to endeavour to allay fears which have been aroused among a considerable number of one's constituents with regard to certain of its provisions. Whether those fears are well based or not is a matter which hon. Gentlemen on the Treasury Bench alone can solve. After all, the Bill itself is nothing but the sketch of a measure, and we are asked to fill it in. It is a very exceptional course for a Government to take. It is not the usual duty of the Opposition, I take it, to form the measures of the Government. Our alternative is this. Either we have to help the Government to the best of our ability in filling in at lightning speed this measure which has been presented in a very sketchy form or else to oppose it. There is no room for doubt as to what line anyone will adopt when he finds himself confronted with that choice. Obviously, when a measure is designed to effect far-reaching reforms of a most beneficial character, every right-thinking man must do his level best to assist it. But the Bill as presented at present is calculated to arouse very great anxiety in the minds of people who have not voted themselves £400 a year and who after all are the people whom we ought to think about a great deal more than the Four Hundred Pounders.

I come to one point in particular. I have in my division, as everyone has, a large number of small village clubs which meet the requirements of certain poorer sections of the community, who have either been unable or unwilling to join the great friendly societies. Those clubs must either amalgamate and form one great society or else they must disappear. If they amalgamate, well and good. If they have to disappear, what is to be the position of the people who look to those clubs to provide what may not be considered a sound provision against sickness, but what, after all, they consider adequate and what hitherto they have been satisfied with? The point we ought to guard against is that, in doing good, as undoubtedly this Bill is intended to do, we ought not to do harm to those who are most susceptible of harm and who consequently ought to be more protected than any other section of the community, and it is precisely these humble members of small village clubs whose interests will be affected by the Bill as it stands at present. Their interests ought not to be forgotten. I have taken the case of a member of a village club who is below the age of sixty-five. He may still, if the worst comes to the worst, enter the Post Office contributors' scheme. That scheme will have to be altered. However inadequate the provision made in Germany may be considered in some respects, there is nothing half so bad or so unsatisfactory as this provision for the Post Office contributor. I do think it is absolutely necessary that we should remodel that part of the Bill in such a manner as to alter the status altogether of these who will have risks possibly least susceptible of insurance, and who consequently will be most in need of assistance. There will be a certain number of those people in the small vilages who will be entitled to come in with the great societies. Others will be able to amalgamate, and others will come in as Post Office contributors, but there is another class of man of sixty-five years of age whose club would be shut up, and who could look forward to nothing except an old age pension at seventy. That man has made provision to the best of his ability for the period between sixty-five and seventy. If I understand the Bill aright, that man will find no means of providing for sickness or invalidity between sixty-five and seventy. I think the provisions in regard to invalidity in the case of Post Office contributors are illusive. They are only to get what they pay in, what the Government pay in, and what the employers pay in, together with what may result from the contributions made by people who die. I think the chances of there being any considerable sum from which to pay invalidity benefit in addition to sickness benefit are very problematical. As far as invalidity is concerned, these old people between sixty-five and seventy have a very poor look out.

I venture to make two suggestions for the consideration of the right hon. Gentleman. He could either defer for a certain period the breaking up of those societies which are incapable of qualifying, or else he could adopt the German system of lowering the number of members entitled to become an approved society. I do not know what specific value 10,000 members have, but in Germany a club can be formed with a membership of 250. That is a question which deserves far more detailed attention than can be given to it before the Second Reading of the Bill. We must be supplied with much more detailed information if we are to approach properly armed the Committee stage of the Bill. I throw out these suggestions as to the difficulty in respect of old people in villages who form the members of small clubs which cannot be approved or amalgamated. There is another point which has been alluded to to some extent, namely, the position of women. There is no doubt that the position of women under this Bill is very unsatisfactory. As a confirmed opponent of Woman Suffrage, I wish to improve the position of women. I do not wish to provide them with a lever which could be used against me by enabling them to say that I gave very little attention to their desires in a matter of this importance. In the Bill women are not fairly treated. The first thing I would ask is why women are not to receive the same benefits if they pay the same contribution. After all, both men and women require the same amount of assistance if they are ill. If that is so, why not give them the same amount of benefit? Supposing a man falls ill, he gets benefit to the extent of 10s. or 5s., but that is not sufficient to keep the family, and the woman goes out to earn something. But she has to work six months before she can draw any benefit. I think that would entail a hardship. You have to contemplate the case of the woman who has to go out and earn something to supplement the 5s. or 10s. the man will get from the Fund.

Another point which demands attention is the question of the hospitals in country places. The Noble Lord the Member for Bath (Lord A. Thynne) alluded to the position of the London hospitals. I have in my mind the case of a hospital in a large town, where there are committees of working people who contribute a penny a week. In return for that they can go to the hospital and get medical treatment as outdoor patients, and they can also get medicines. I take it that there would be an overlapping of that work if there was the universal treatment and the supply of medicine contemplated by this Bill. If the penny a week is stopped the funds of the hospital will suffer. There are cases in the country districts of people who contribute to the hospitals and who employ one or two servants. They will have to pay 28s. a year for two servants under this scheme. The chances are that they would drop their subscriptions of a guinea or half a guinea a year to the hospitals. These sums would mount up, and the hospitals would suffer. These are a few of the points which ought to be considered. I do not know whether the right hon. Gentleman is paying attention to them. I assure the House that I come to the help of the Government very much against the grain. I have come to give my mite, and I do hope that this discussion will not be treated as an opportunity for rhetorical display, but that we shall look upon it as an occasion for endeavouring to effect a far-reaching social reform.

In regard to the question of unemployment, I hope I shall not be misrepresented if I give a frank expression of my opinion of the proposals in this measure. There is no question that by this effort to provide against unemployment you are putting a further burden on British industry. You cannot get out of that, if you look at the document relating to Germany which has been submitted by the Chancellor of the Exchequer. I think it would have been far more interesting if the Chancellor of the Exchequer had published the letter in which he invited information from Germany. Why should we not know what he asked the people of Germany to tell him? It would have been frank on his part to do so, and would have inspired confidence. On page 5 of the document there is this significant sentence:— There can be no doubt that the insurance laws, together with the increase of wages, have exercised au enormously beneficent influence on the health.… and so on. Employers may not like the contribution, but workmen will like it still less if it is to come out of their wages. The deduction from wages in Germany as applying to invalidity insurance and old age pensions has been counterbalanced by a rise in wages. You are asking the working men of this country to submit to a deduction for sickness and invalidity and for unemployment—that is to say, they have to bear it compulsorily.

In that connection the speech of the hon. Member for Blackburn, delivered at Cambridge last Friday, only repeated what many others have said, that wages in this country are fallen. His words are "Wages are down, and are going down." When we say that it is not believed. When the hon. Member opposite says it, it is believed. If you are going to add this further burden to industry, you are subsidising still further those who compete with us in our markets. There is no use in blinking that fact. Other countries which have this large scheme of insurance against these various ills which we are now endeavouring to provide against, provide to the greatest possible extent against employment by securing that they shall have other employment that is going. Insurance against unemployment is good. But it only touches the fringe of the subject unless you approach this question as a whole, and apply to it, as the Germans do, the three methods of dealing with unemployment. The first is to secure that all the employment possible shall be given, and that none of it shall be given to those living outside the country so long as them are people idle in the country who are capable of undertaking it. The second is that there shall be relief works on an expensive and probably not very economic scale dealing with unemployment, and the third is some form of insurance. Unless you have those three it is unsound, and only dealing with one small part of the trouble. I should not be frank and honest if I did not allude to that portion of the subject.

I quite admit that insurance against unemployment is a good thing, but you must still fail to meet the case if you do not adopt other measures which we on this side of the House hold to be desirable. With regard to this matter as a whole I may say, in conclusion, that I had the honour to serve as a very humble individual on the staff of a man who will go down to history as one of the most successful social reformers of the present generation. That is Lord Cromer. If you measure the value of social reform by the benefits achieved and the degree in which you improve the condition of the people of the country who are depending on you, no man, judged by those standards, will have a finer record when his record comes to be written. In approaching a question of social reform, he invariably asked himself two questions—what it would cost, and where was the money to come from? We are not in a position, and I do not think the Chancellor is in a position, to answer the first question. We do not know what it is going to cost. There is no doubt, I think, in spite of the very careful actuarial calculations on which the scheme is based, that it would cost much more than is contemplated at the present time. As to where the money is to come from, it will come from everybody, but money will be found. My only reason for raising the point is it is very easy to suggest alterations and modifications in this scheme, but they will all cost money, and I approach the question from this point of view, that we are contemplating spending seventeen and a-half millions at least of public money for insurance against in-validity and sickness and old age. The Germans spend only two and a-half millions of public money for the same purposes.

I am not quite clear that, according to the scheme presented by the Government, taken in conjunction with the old age pensions, we are going to achieve any effect for the people of this country comparable to the increased cost thrown upon the tax payer, and I do think that the manner in which we can legitimately approach the scheme is this: We can say "we are pre- pared to spend this money. We think it right that it should be spent, but let us consider the whole question of insurance at one time. Let us see whether we cannot, as the Germans have done, consolidate the whole scheme in such a manner as to remove a great many of the anomalies which exist in the present old age pension scheme, which was alluded to in eloquent terms by the hon. Member for Blackfriars the other day, and use, to better advantage as a whole, the contributions which the taxpayers as a body will be asked to add to those of the persons who are more directly engaged in industry for the purpose of insuring against sickness and invalidity and old age." It is unfortunate that unemployment has been added to this Bill. It has got nothing whatever to do with that part of the Bill, and it is a pity that it should be rushed at the same time. If the Government desires to maintain the harmony which is obviously desirable, if this question is to be discussed in the manner in which it should be discussed, it would be much better not to inquire into the reasons why the measure is presented in this form. We are all agreed that both parts of the scheme aim at achieving what is desirable. Having got that measure of agreement all we can do, as humble Back Bench Members in this part of the House, is to do our level best to eliminate those parts of the proposal of the Government which seem to inflict injustice, assist in setting right those parts of the scheme which are unworkable and impracticable, and I think thereby we shall be fulfilling to the best of our ability the invitation offered to us by the Chancellor of the Exchequer to help forward this scheme.


I do not think that what the hon. Member who has just spoken has said as to the inchoate condition of the Bill is an argument against it. We had on a recent occasion the argument used against a certain Bill giving the franchise to women that it would not admit of certain amendments. I am sure we must thank the Government for the opportunity of proposing any reasonable kind of amendment to this Bill. It is one of its merits, and not one of its demerits, that its terms are elastic. It has sometimes been said about the position of the employer, and it was said yesterday that employers have not yet raised their voices against the large expenses that will in some cases be caused by this Bill. I am rather a large employer myself, and putting myself in the position of other employers I can only say that if good value is given to the workpeople for the money employers as a class will hail this measure as a benefit to them as well as to the workpeople, as a benefit to them if it is a benefit to the workpeople. One of the most painful things that an employer has to deal with is the question what to do, for instance, with men who are getting old. One does not like to discharge a good old servant. This scheme provides by-and-by for a man at the age of sixty-five—I do not say at present—getting the first preliminaries of an old age pension. Then there is the question of people who are feeble and beyond their work. Nobody wants to discharge an employé who may be a half invalid, but no one likes paying something for nothing, not even employers, but if this benefit is afforded to the community I am sure that employers as a class will not grudge their share of this money.

Anyone who brings forward an argument with a view to picking a hole in the Bill here or there, to show that' some malingerer may under this Bill get money that he otherwise ought not to have, after all does not condemn the substance of the measure. We cannot do a great deal of good without doing a little harm. The object upon which we are all intent is to find as much good with as little evil as we can. The greatest evil is malingering, the receipt of money by unworthy people that they ought not to have. I believe that one of the very greatest merits of this Bill is that it takes the most efficient means against malingering that is possible, namely, the utilising of the great friendly societies, those voluntary agencies which have worked so economically and so effectively in the main—I am not speaking of the exceptions—in putting down malingering. The Government's adoption of existing machinery, I am sure, in every quarter of the House, will be looked upon as the great merit of the scheme, because it does not create entirely new machinery or opportunities for patronage, which I, for one, whichever party is in power, think is undesirable. I know it is a great nuisance to Members of Parliament to have letters from their friends beseeching them to find posts for them, and those are the kind of letters with which I deal in a very general way. But this Bill has reduced to a minimum the number of new posts to be created, and so far it is a good Bill. I would like to say one word about the smaller societies. Size is not a proof of efficiency. Of course, there must be a certain number of members to obtain the principle of insurance, which is based on average.

There must be a large number of members to average the risk; but from the point of view of efficiency in putting down malingering, the smaller the society the better, because the more nearly each individual member of the society is interested in keeping unworthy applicants from getting the money of the society unfairly—on the principle of the agricultural banks that have been so efficient in foreign countries, and I understand that have been very helpful in Ireland, where a man goes bail as it were for his neighbour. The smaller collecting societies have been, I believe, unduly alarmed. There is much apprehension about this Bill. I take it that it will not, under any circumstances, include death, so that it will not in that way strike at the small collecting societies, whose main business is to find death payments. On one point I wish very heartily to congratulate the Government, and that is the inclusion of consumption in the Bill. It is one of the most valuable features of the measure, for it is a recognition by the State, for the first time, of the absolute necessity that the State itself should deal with this fearful scourge. In my own business, that of woollen manufacture, we employ half men and half women, and we have a scheme under which such shares of our profits as are not allotted to individuals are devoted to a fund for the benefit of our workers. Out of this fund we extend the benefits provided by the mutual sick clubs of our workpeople. In addition, we have also paid for several consumptive patients to go to a sanatorium for treatment and several have been restored to health and strength. But our experience of these consumptive patients has deeply impressed me with two facts.

First, the great expense of curing a consumptive patient as compared with almost any other form of disease; and, in the second place, the great liability of the patient to relapse after returning to his or her town home. These consumptive cases have made enormous inroads upon our funds, so great is the expense of the average patient. The ancillary cause of the disease is poor conditions and surroundings. So great is the cost of treatment in these sanatoria that in many instances sufferers have not the means to procure treatment in them. I firmly believe that more than any other disease consumption, on account of its long continuance and the great expense attending its treatment, is a proper disease for the intervention of the State. Undoubtedly consumption is a disease which is largely caused by poor surroundings and conditions. It is the disease of poverty. Once you get these health committees to work establishing sanatoria and managing them all over the country, then you will fix public attention upon the great cost of treating this disease of consumption, and inquiry will be directed to the causes of the disease, which is due mainly to bad housing, bad food, ignorance, and low remuneration. One word about the position of women. As I understand the Bill, the uninsured wives of insured employés will not be eligible for sanatorium treatment. Of course, I take it that the payments to be made do not allow for that. I desire to impress very strongly upon the Government that if a man suffering from consumption is to be taken away from his home to be cured, the woman also, if she suffers from that disease, should have the benefit of sanatorium treatment.

I respectfully urge this in the interests of the general community, for consumption is a disease essentially concerning the whole community, and owing to its now being well recognised as an infectious disease I think it ought to be treated at the public expense, if necessary. On the maternity point, surely the 30s. should be payable to the woman herself. Supposing her husband is a drunken or worthless man, he might get hold of the money, and I suggest that he ought not to be able to do so. I think a little amendment to the Bill should be made to enable the woman herself to receive the money, or at least she should have the opportunity, as was suggested by an hon. Member opposite, of choosing the persons to whom it should be paid for attending upon her. I do not see why maternity benefit, like sanatorium benefit, should not also be put under the health committee, and I think it should be provided by statute that the health committee should be obliged to have a certain number of women upon it. If I understand the Bill aright, in the case of all women the contribution of employer and employed is the same—6d. a week from the two. I understand that the factory worker's sick pay goes to the worker, but in the case of domestic servants who remain in the house the sick pay does not go to the worker. The charge on the domestic servant is either too high or the charge on the factory worker is too low, and I do not think that the domestic servant, who is not so well paid, ought to have to pay to make up for the factory worker. The Bill makes it the interest, not only of the localities, but of the employers, to see to the health conditions and the housing of the workpeople.

Another point which is complained of in the Bill, which I think is a good point, but which some hon. Members think is bad, is that the employers who pay low wages should have to pay part of their workers' share of the insurance premiums. I think that that instead of being worse than Germany is better. In Germany, according to the Table on Page 5, the cost to the employers of the payments for invalidity and sickness insurance increase with the wages. In our ease, a man who gets 30s. per week is paid 3d. for by the employer. The person who gets 9s. or 6s. per week is paid twice as much for by the employer, whereas in Germany the more an employer pays his workmen the more he has to pay for insurance. With a wage of 30s. the employer there pays 6½d., and if he pays a person so little as six shillings per week he only pays 1½d. I think that is a very great matter, because in the first place it recognises that the very poor need at least as much benefit as those who are better off. The German scheme requires the employer to pay most for those who receive most already. The British scheme provides twopence from the Government to all alike, and it therefore requires that the benefit should be all alike, and that the employer should make up what the worker cannot afford. Although I am prepared to agree with the hon. Member for Seven-oaks (Mr. H. W. Forster), who made that very charming speech yesterday, that it does not follow because wages are low that therefore the employer is well off, yet I would ask consideration to this point: Who is to pay the difference? We all agree that the worker with low wages needs as much help in times of sickness as workers with high wages. Who, then, is to pay? Must the Government pay, since the worker cannot pay? If the Government pay that will be like the old Poor Law, the subsidising by the Government of low wages and the encouraging of the payment of them. I do not think that that is a sound principle. I know that it will not be agreeable to those people to have to pay any more. I am sorry they should have to do it, but I cannot see any quarter from which it is likely to come except the employer.

10.0 P.M.

There is then the position of the medical men. The medical men, in Lancashire, at all events, are thoroughly roused. I got a letter from the secretary of a branch of the British Medical Association, whose district includes part of my Constituency. He tells me that at a very enthusiastic meeting they passed two resolutions. In the first place they stated that they opposed the provisions of the Bill putting them under the friendly societies; and in the second place that they have unanimously resolved and pledged themselves, and this includes all medical men in the district, to resign any friendly society appointments they have for medical attendance, and to decline to take any more. In other words, that is a kind of menace. I took the liberty to write a letter in reply, stating that I felt sure that the Government and the House of Commons would not do injustice to them on any ground whatever, and that they need not be afraid, and I counselled them to try reason rather than menace. We have the fact that the vast majority of medical men take this view, which was confirmed by the meeting held in the Free Trade Hall, Manchester, last night. The Memorial Hall building was too small to hold the medical men who had been summoned on short notice to a meeting on this question, and the Free Trade Hall had to be taken. They are thoroughly roused. And why? For two reasons, I believe. They object to be put under the friendly societies. They may be right or they may be wrong, but I do not think I am exaggerating or understating when I say that the medical profession as a whole are not enamoured of the clubs. They want to be paid, as in the case of private practice, by the work they do. That is the most just way. They do not want a flat rate, though I cannot see any other principle possible in a public meaure; but if a flat rate is to be paid I do not see why it should be left uncontrolled to the approved societies. Might not the health committee have some say in the matter, or might not Parliament itself pass a certain minimum and give a latitude to the Health Committees?

If the doctors ask that they shall be allowed to attend their own patients, and if the patients ask that they should be attended by their own doctors, how can we refuse that? I do not think it is expedient on any ground to separate the members of a family. If the father is transferred by this Bill to a particular doctor and if another doctor continues attending the rest of the family that will be a disadvantage all round and it will be unfortunate to the doctor of the family. It cannot possibly work well. I take it we shall have to have a flat rate fixed. I regret that that is so, just as some hon. Members have regretted the introduction of the element of compulsion. It would be utterly impossible for justice to be done and for the money which is raised under this Bill to be properly expended and with the proper check if the doctors were to be allowed to send in their bill to the friendly society or the health committee without any other check but themselves and the patients. We must have an all-round rate. I would have a man upon joining a friendly society required to elect from any of the local doctors willing to take the club flat rate and thus for him to be allowed to nominate his own doctor. As the Bill stands now I do really consider that the doctors have a great grievance. Some of the very best of their present patients will have to leave them, and probably will take with them their families.

It has been said over and over again that even after this Bill becomes law there are all the rest who are not members of friendly societies and that there are the families left. I think it was the Attorney-General who gave the illustration yesterday that when you go into a shop and when you are pretty well treated in one thing you will naturally get other things at the same shop. That is the actual reason in many cases why the doctors have taken a low rate for club members, because they hoped, and they succeeded, in getting the families along with the members of the clubs. I am sure that the Government does not want to do them any wrong, nor do we. It would be, in my humble judgment, with all respect to the Government and those who prepared the Bill, and as I think so splendidly, it would be a very great shame if, by law, we were practically to deprive, as we should be doing in many cases of their practices wholesale, men who have built up working-class practices. Several doctors in my own neighbourhood—in industrial districts like Lancashire and Yorkshire—have built up by hard work and real merit working-class practices, and it would be a great shame to take those from them by law, however great good we might mean to do. There is a remedy for this, and it is that the existing club members should go on with the existing doctors as they are now, and that the new members who join these friendly societies in consequence of this new legislation should be allowed to choose any properly qualified local practitioner, and the whole of the properly qualified local gentlemen should constitute a panel for the purpose of adjusting difficulties in their particular neighbourhood. Take this case in point —the case of a young man whom I know who has been building up a practice for three or four years; he is doing well now but he has had to work hard for several years. This gentleman said to me, "I live in a certain district. People who are in clubs come to me because I am near to them, but under the new law they will go to the club doctor, who would serve them on the flat rate, but if they cannot get the club doctor, if there is a case of sudden emergency, they will still come to me, because I happen to be near them. What am I to do? If I refuse people will cry shame.' If I go am I to be paid, and who will pay me? Will the club doctor pay me?" If you consider cases of this kind you will see that there will have to be some local authority, some medical authority, to adjust differences of this kind.

Having made these few criticisms, may I express the delight which I feel in having been a Member of this House on that memorable occasion when a scheme of this magnitude and of such far-reaching beneficent effect was introduced into a House so ready to receive it and so sympathetic towards the general object of the Bill, when it was received by the bitterest opponents politically of the Chancellor of the Exchequer as if he had been one of their own number. I will do all I can to keep this question free from party spirit, and I hope my own Friends will resist the temptation to claim the entire credit for this measure when it is passed, as I believe it will be, in spite of all the difficulties. I thank the Government for having introduced it, and I also thank the Opposition who have spoken in such honest, kindly, and impartial terms of this Bill so far. I hope we may keep that spirit up to the end and that we all may be able to claim a share in the credit which will ultimately attach to those who are in Parliament when the Bill is passed.


The right hon. the Attorney-General said in this House that this was one of the greatest Bills that had ever been produced in this. House. I sympathise with that expression of the right hon. Gentleman. I think it is one of the greatest Bills we have over seen because it is what I may describe as a human Bill. I know there are great difficulties to be faced in getting it through the House, and these have been already sufficiently described in the speeches we have heard. It is a Bill not only to relieve the poor, but to relieve the sick poor, and the case of the sick poor, in my opinion, has been a shameful case in this country for a great many years. The principle of the Bill has been approved by all shades of opinion of this House and that principle is sound. There are several points I should like to call attention to. I quite agree with the opinion of many of the Members who have spoken, particularly the Member for Plymouth (Mr. Astor), who made such a good speech yesterday on the question of grappling with consumption.

Consumption ought to be treated in this country the same as smallpox. Directly a man gets consumption in its early stages he ought to be put into a sanatorium. A sanatorium is not so useful for curing individuals, though it will delay the action of consumption and many will be cured, but the real benefit is by getting a man who has caught consumption in its early stages free from others and from giving infection. The Chancellor of the Exchequer the other day said there were 75,000 people in this country dying yearly of consumption. That is a shocking state of affairs, and it ought to be met as soon as possible. But the fact is that, when a poor man gets consumption he is the bread-winner, and he has to go on working to keep his family, and he is living, maybe, in a room costing 4s. a week, where there may be five or six children, with his wife and a lodger, and lie gives infection to those children and to all those about him. Personally I can vouch for the infection being caused in that way from experience on board a man-of-war. I have often written to the Admiralty on the point that we ought to have a sanatorium for the men in the Fleet who get consumption. The man with consumption sleeps in a hammock very often next to another man, and a man who is in the early stages of consumption always expectorates. That is where the infection occurs, and many a healthy man to my certain knowledge has got consumption from his messmates or ship- mates by living and sleeping so close to them and having it thus imparted to him in the ship.

Another point which has been mentioned several times in this Debate is that the whole success of this Bill will depend upon the view that medical authorities in the country take of it and the action taken with regard to these medical authorities to make it possible for them to make this Bill a success. In my humble opinion no class in the community have acted more loyally or more sympathetically or in a more kindly, chivalrous spirit to the poorer classes than the doctors who work among them. At present they get 4s. a year from the friendly societies, but they make a great deal of their income and living on account of the sympathetic action which they take towards the men they are paid to administer to, and consequently they get a large practice among these men's friends and other people in the locality. I do hope that the Chancellor of the Exchequer will see that the doctors will be well looked after, and that they will have a living wage with regard to the effect of this Bill. I am sorry the Chancellor of the Exchequer is not here, because I wanted to put some important questions to him. Perhaps some of his colleagues will note them for him. I wanted to tell him first of all, however, that soldiers and sailors alike appreciate most thoroughly the words in his speech where he said it was a crying scandal to this country that men who were prepared to give their lives at any moment during peace or war in the service of the State when they suffered injury to limb or to health were cast ashore or out of barracks to go among their fellows and to linger and die.

We very much appreciate the words of the Chancellor of the Exchequer on the Services. There are hundreds and thousands of men in the Service who when they leave have been broken down in health, and that is entirely attributable to what occurred during their period of duty in times of service. A full list of the invalidity which takes place in the service would be perfectly appalling to anyone who knew the great numbers of men who suffered in the service of the State, and who could get no recompense whatever except a small gratuity or some little payment when cast ashore or out of barracks. What they suffer from chiefly in the Navy are sunstroke, dysentery, and fever, and they also are continually injured and disabled during the ordinary drills in times of peace. In the Army they have to work in very bad climates and consumption is often engendered by sentry-go in very cold weather. A man who may be healthy gets a bad cold and another cold upon that, and it develops into consumption.

What I wanted to ask the Chancellor of the Exchequer was in regard to the men in the two Services. The Chancellor in his speech said that there were to be exceptions to the principle of compulsion. He said that the Army and Navy were to be exceptions, and that he was making special provision for soldiers and sailors. But Clause 36, Subsection (1) of the Bill very plainly dictates compulsion. It says:— There shall be deducted from the pay of every seaman and marine within the Naval and Marine Pay and Pensions Act, 1865, and of every soldier of the Regular Forces…the sum of 2d. a week.… While in his speech the Chancellor of the Exchequer said that there shall be no compulsion, in the Bill he says distinctly there shall be compulsion. I would like to have that cleared up. To avoid mistakes I should like to see put in the Bill—and this the First Lord of the Admiralty opposite will appreciate—an alteration in this respect. The Bill says "seamen and marines." In the old days there was nothing but seamen and marines. Since then we have got a number of other ratings, and these ought to be put in the Bill in order to make it quite clear. There is the marine branch, the engine-room branch, the artisan branch, and the miscellaneous branch. They ought to be put in under the word "seamen," because in the old days "seamen" included everything. In these days "seamen" does not include everything. The marines come under one head as the soldiers come under one head.

I should also like to ask the Chancellor of the Exchequer why half of Clause 36, Sub-section (1) is put in italics? Another point: the men are to have 2d. a week deducted from their pay, but the Sub-section says:— Provided that this provision shall not apply to a seaman, marine, or soldier who has re-engaged for pension, unless he so elects. As we would read that in the Services it would mean a man who pays 2d. a week so long as he is not eligible for pension, Which is twelve years. After that what position will the man be in? Will that man have paid 2d. a week for no result up to the time he receives his pension, and will he when ho goes ashore have to pay his 4d. a week like the rest of the working classes? As it stands now it looks as if the man would have no result at all for his 2d., even if he is ill, because the men of the Army and Navy are allowed when ill to go to hospital. In the Navy—it is one of the evils that I hope to see removed—when a man is ill he gets hospital stoppage. When he has been in hospital thirty days 10d. is deducted, and after ninety days in hospital he gets no pay. It ought to be made clear as to whether a man has to pay this 2d. in addition to the money he has to pay in hospital stoppages—a custom that, I believe, also obtains in the Army. I may misread the Bill, but I cannot see why a large number of men in the Army and Navy who pay towards friendly societies should not have that 2d., or the money they pay towards friendly societies, go towards any benefit they get. There ought to be some system by which men in. the Army and Navy should be able to present a card to the paymaster of the ship or regiment, and so save the deduction of his 2d. In other words, the 2d. ought to come out of the funds he pays already to the friendly society and not be an additional tax.

I am rather afraid this Bill so far as the Services are concerned may be detrimental to thrift, that is to say, I am afraid if this compulsory contribution of 2d. is placed upon the men it may prevent them voluntarily joining the friendly societies. As the First Lord of the Admiralty knows, the seaman of the present day is a very different man from the seaman when I joined. Then lie was a rollicking, careless, devil-may-care sort of fellow; the last idea in his head was thrift. Now the seamen are a very thrifty, well-behaved, sober, steady body of men with very few exceptions; and that applies both to the Army and Navy. I hope nothing will occur under this Bill that will stop the progress of this thrifty spirit among the men, but rather that it will be encouraged in every possible way. They are now subscribing in great numbers towards friendly societies, and nothing should be done to reduce their efforts in that direction. I have ascertained the opinion of the lower deck, and I know that is the opinion of thousands of young men who join the friendly societies, that this Bill may in some way hamper them with regard to their finances, that, they will not get any benefit for their 2d., and that will reduce their subscription to the friendly societies. That is the idea of the lower deck and also of the barrack, and I should like to have the matter cleared up. There is a Lodge of Oddfellows at Portsmouth to which I belong and they paid nearly £50,000 on death and in benefits, and it is a very good example of what is going on both in the Army and the Navy. I hope, therefore, the Chancellor of the Exchequer when he comes to reply will deal with this question of stoppages; the men regard it as a grievance. I hope it will be made quite clear the men will not have to pay this 2d. as well as 10d. after thirty days for hospital stoppages, if they get ill.

There is another point which the Chancellor will appreciate. You must never, with men under discipline, give them any order that there is doubt about, because it engenders distrust. I notice in the Bill while the men have to pay 2d. the Admiralty and the Army Council have only to pay so much as may be prescribed. I think the men should be told how much that is. They are under discipline and they cannot come forward to represent their views, and to create distrust is fatal to men under discipline. It is perfectly possible that some of these men may think that their 2d. is going towards paying Members of Parliament the proposed £400 a year. They must be told how much the Government are to pay to the Fund to which they are being called upon to contribute. I am sure the right hon. Gentleman will see the force of that argument. Will the First Lord of the Admiralty tell mo how that 2d. is going to be deducted? The men in barracks and harbour ships are paid weekly, but the men at sea are paid monthly, although the ledger is made up quarterly. Is this 2d. going to be paid weekly, monthly, or quarterly. I think that should be put into the Bill so that the men will know exactly how they stand. The Chancellor of the Exchequer in his speech said:— All that I would say here is that we do not propose to deal with insurance against death. That is no part of our scheme at all. As far as my Constituency goes, the insurance agents are very doubtful on this point, and the point should be cleared up. A clear statement on this point in the Bill, that it does not insure against death, would give great satisfaction to an enormous number of people who get their living as insurance agents. I understand that there are 42,000,000 insurances against death in the country, nearly all amongst the working classes. I am sorry that the right hon. Gentleman has not given us more time to discuss the Second Reading of this Bill. This measure contains eighty-seven clauses, and enough correspondence upon it has come in during the last few days to fill a circulating library. If it took the Chancellor of the Exchequer three or four years to think out this Bill, how does he expect an ordinary individual like myself to master it in a few hours? I hope we shall have several more days to consider this measure. My heart and soul is in this Bill, because I believe it is a real effort to put this sore right among the working classes, which ought to have been made long ago. What is proposed must benefit these people who have suffered for so many years, because the State has not looked after them. The right hon. Gentleman said that the great social problem they had to deal with was connected with small wages. There are an enormous number of people in this country who do not get a living wage, and who receive 4s., 6s., and 8s. per week. I think the President of the Board of Trade said that practically there were 4,380,000 people who did not get 30s. a week. I think the principle of this Bill is absolutely sound, but we ought to ask are we quite sure that we are going the right way to work. This Bill will not raise wages, and that is the real point. It will lower wages. It will not alleviate what I conceive to be the cause of the great sore in this country. Comparisons have been drawn between friendly societies and the Government Bill, but there can be no fair comparison between the two.

Suppose the First Lord of the Admiralty and I joined a friendly society. We should join at level rates, and we must both be sound before we can join. You are going to put into this Bill, and it is quite right, an enormous number of people who are unsound. It is the weakly lot we are going to benefit, and the result is the strong and healthy men are going to pay for the men who are not strong and healthy. The working classes of this country are a generous lot of men, and what the right hon. Gentleman calls the solidarity of labour does exist. There are no people who are more generous to each other than the working classes of this country, and I perfectly believe the strong and healthy will cheerfully pay for the weakly, but it is totally different in the friendly societies, where all join as strong men and no weaklings allowed. Then, again, this is a Bill under compulsion, and the friendly societies are entirely voluntary. I think one of the defects of this Bill will be with regard to compulsion. It may or may not be so, but one thing is certain. The English-speaking people all over the world hate and loathe compulsion in any form whatever. I believe we may trust to the generosity of the working classes not to fight this compulsion heavily with the idea of keeping up what I may call that good comradeship which exists between them, the thrift they have got into their minds, and that helping each other which we have seen exemplified so often among the working classes and certainly among soldiers and sailors in regiments and ships. This point, however, should be remembered, and I think the arguments the right hon. Gentleman the Home Secretary (Mr. Churchill) brought forward with regard to that were very sensible.

There is another weak point in the Bill, and that is the question about the women. I do not believe the women can pay 3d. per week. The pennies are everything to the women. I remember telling the right hon. Gentleman the Member for Birmingham (Mr. Joseph Chamberlain) years ago, when he first produced his Tariff Reform proposal, with which I am in sympathy, that lie had forgotten a constituency. I said, "You have forgotten the working men's wives, and it is those twopences and threepenees which they will have to pay extra for their food that will crucify your proposal in the first place." [Laughter.] It is no laughing matter. You take threepence from a poor woman who has got a sick baby, and it may make just the difference of a little more milk to save the child. Yon may take the two-pence or threepence a poor woman pays to go by 'bus to get to her work. This is most important to the women. It does not matter so much to the men, they can give up something. If you put that extra charge on the women, I do not think they will be able to pay it without making just that difference between comfort and happiness and want and misery in the home. I hope the right hon. Gentleman will be very careful on this question of the women. The maternity money ought not to go to the men. The 30s. ought to go to the women and to nobody else. I hope in the debates on this Bill we shall look after the women, because it is the poor women more than the men who suffer. A great many of them have kept the home going with their own exertions, their loyalty, and their splendid pluck, and anything which we might do to hurt the women will be fatal to the success of the Bill. There was a good deal said about comparisons in wages between us and Germany. The difference is that Germany is under military discipline. Wages in Germany may be lower than ours, but they are certain. They go on all the time. Our wages are occasionally higher, but they are uncertain, and the question of employment in this country is another matter to be looked into. I think this Bill will do a great deal to stop unemployment. I am sorry that the two Bills are put into one. They are distinctly different, in my opinion, and the action taken in regard to them is also distinctly different. Still, I hope that this Bill will open the way to get rid of the real sore—besides consumption and poverty. The real sore is casual labour. It is boys who go from 5s., 6s., or 8s. per week on to the streets untrained, and who flood the casual labour market; they constitute the real difficulty. I want to see more technical schools where these boys can be taught a trade. Let us have Emigration Offices and Labour Exchanges in the great Dominions all over the world, so that these boys, having learned some trade, can be sent out with a small sum of money, say £5, in their pockets, able to make their own way. That will relieve the real sore.

The wages question is at the bottom of the whole thing. The wages are too low for a very large class of our people, and the only relief so far discovered among all the civilised nations of the world for the poverty that exist s and for increasing the wage is to restrict foreign competition. Hon. Members may laugh at that. Let me ask them to do this. We have received their Bill with all honesty, believing them to be perfectly sincere in their opinion that they are going to remedy this great evil. Will they not believe that our remedy is just as sincere and just as honest? Let the dead past bury its dead. Let us join together on behalf of the poor of this country and try and put them in the position they should be in. Give us credit for sincerity and honesty in our efforts on behalf of fiscal reform. Drop all these remarks about sloppiness—they are not con- ducive to good feeling. It may be fiscal reform will put up prices, but if our working classes get better wages and constant employment they will be able to pay. Let us do the best we can for the poor of the country. We may criticise your Bill: you will, I am sure, have to make amendments in it, but at any rate let us have a conciliatory and a generous tone; the human tone which the Chancellor of the Exchequer used when he brought in this Bill. Let us do something for the poor who have so long and so unfairly suffered in this country.

The FIRST LORD of the ADMIRALTY (Mr. McKenna)

I am sure the whole House will sympathise with the spirit in which the Noble Lord who has just spoken has approached this Bill. He has given us the benefit of his special knowledge of a particular Clause which relates to the Service. At the same time, without going in. detail into the rest of the measure, he has expressed sentiments in approval of the principle of the Bill with which, I am thankful to say, the whole House is in hearty accord. Before touching upon any other point I should like to reply to the substantial question which the Noble Lord raised on the subject of Clause 36. His main point was, what will happen to the man who after paying during the first term of service 2d. a week, re-engages for a second period and would become entitled to a pension? What, the Noble Lord asks, becomes of the 2d. a week which he has paid? It must be observed that under this Clause that man when in the Service got all the benefits of the Bill on payment of 2d. instead of on a payment of 4d. if he suffered from sickness. After men in that position leave the service they can go into another society, and they will enter as insured persons under the Bill, although they have only been paying 2d. instead of 4d.


After they heave the Service would they then have to pay 4d.?


Yes; after they leave the Service and become civilians they will pay 4d., and they will be in the position of persons who have entered the scheme from the beginning and will be entitled to all the benefits, although they have only paid 2d. against 4d. Against that some of them—only some of them—will suffer a slight disability. Those who reengage and do not choose to go on with the scheme, as they are not bound to go on, will get nothing further from it, except such benefits as they have received during the first term of their engagement.


In regard to those who did not serve the second, but served only the first period, the right hon. Gentleman says they pay their 2d., and then they enter when they leave the service the societies as if they had been insured the whole time, but what do they pay the 2d. for? Is it not part of the contract with the State that they should give them now all that they would get under this Bill because the State pays them very small wages. I do not quite see how the scheme works.


The State does not undertake to give them a disability allowance, to last for ever if there is no allowance. One hon. Member has made a complaint, and a proper complaint, that there is no such provision now for the soldier or the sailor who breaks down, who is not disabled by wounds or killed in action. In those cases there is a pension for the widow or a disabling allowance for the man, but when he is disabled by sickness he gets nothing. In such cases the man consequently does get substantial benefits under this scheme, and he gets them at half price. When he leaves the Service he is able to go on as if he had joined at the time that the scheme first commenced. The next point the Noble Lord raised was that he would like to see it in the Bill that all the ratings, and not merely what we know as the technical seaman rating, should be included. The Noble Lord would agree that in the construction of an Act the rules of construction have got to be followed. "Seamen" includes all other ratings in the construction of the Act of Parliament, and the Noble Lord will require the Act of Parliament to be ship-shape. With regard to the complaint that there is no statement in the Bill that death is not included, the Bill prescribes what benefits the money may be spent upon. It does not mention death, consequently money may not be spent upon the death benefit. If you were to say it might be spent on a, b, c, d, and e, but not on f, you leave it open that it might be spent on other things not named, such as f, g, h, j, and k. It is a mere matter of draughtsmanship. It would not make the exclusion of death more specific to bring it in, but would only have the effect of possibly not excluding other things which ought also to be excluded. The Noble Lord asked why part of the Clause is in italics. Under a well-known rule, all financial parts of a Bill have special attention called to them by being printed in italics.


Do the wives of seamen and soldiers while in the Service get the maternity benefit?


Yes, the men being insured while in the service their uninsured wives will get the benefit. I should like to look into the point as to hospital stoppages. It does not arise specifically upon the Bill, but it is very important, and I shall have to bring it to the attention of my right hon. Friend with special reference to the observations of the Noble Lord.


There is another very important point. Will the right hon. Gentleman put in the Bill what the Government are going to pay in order to remove any doubt?


The Noble Lord will observe in Clause 36 it is stated that a prescribed amount will be contributed by the Government. The Government in this case represents both the employer in the ordinary instance and the State, so that the Government has to make the contributions in two capacities. It has also to make a third contribution representing the actuarial difference between the 2d. which the soldier or sailor pays and the amount which he ought to pay to correspond with the workman's 4d. To enter into the actuarial calculations to the Bill would be a very difficult matter. All I can say is that the prescribed amount that the Government will contribute is exactly that amount which will be necessary in order to give the soldier and sailor all the prescribed benefit under the Bill.


Why not put it in?


There will be so many different amounts in respect of the different categories of men, that it will take several Clauses to insert the particular items in respect of each class of men in the Bill. It is not a simple flat rate, as in the case of a workman.


Could the right hon. Gentleman put into the Bill an instance? Take a chief petty officer or a sergeant of marines, as an instance. That will quite satisfy the men. They do not know what it is, and doubt will be raised, which the Chancellor of the Exchequer would not wish at all, particularly as they are men under discipline.


I will ask my right hon. Friend if he could furnish me with a series of instances, not for the purpose of inclusion in the Bill, because it would not be quite germane, but to be published as an explanatory statement on the Bill. It will work out in very varying amounts according to the ages of the men, each of whose cases has to be considered separately, and the total amount paid by the Government will obviously approximately be the same amount as the joint contribution of the State and the employer in all other cases. There are two other categories of persons affected by the Bill whom the Noble Lord touched upon in common with almost every hon. Gentleman who has spoken.

Let me say at once, before I reply to the criticism that has been made, that it mist be a cause of the most complete satisfaction to my right hon. Friend to observe the unanimity of feeling which has been expressed on the principle of the Bill. He has, I am sure, the good feeling of every Member of this House behind him in carrying the principle of the Bill into effect. I am not claiming anything for the Government—I am only repeating what has been said by many Members of the House before —when I say that this is the most important measure of social reform which this Parliament has yet had to undertake. I think, in justice to those who have undertaken measures of social reform before this, we ought not to forget that the work of my right hon. Friend has been very greatly facilitated by the Workmen's Compensation for Accidents Act, which was introduced and carried through by the right hon. Gentleman the Member for West Birmingham and the late Lord Ridley, and, secondly, the Old Age Pensions Act. These two measures, by dealing first with accidents and second with indigent old age, have made this scheme of insurance against sickness, disability, and unemployment a financial and actuarial possibility. I have said that the principle is simple, but the details are very complex. The hon. Gentleman opposite in his interesting and sympathetic speech made a very true observation. He said it was very difficult to make an unfavourable speech upon this measure. On the principle we are all agreed, and on the details there must be every variety of criticism.

I propose to deal with two of the criticisms. There has been criticism raised on the part of the doctors, and there has been criticism raised under the belief that women under the Bill are not fairly treated. First of all with regard to the doctors, I would be behind nobody in admiration of the work which the medical community have done for the poorer classes of the nation, but I cannot help thinking that a great deal of the alarm which has been excited in the minds of doctors is due to a complete misapprehension of the actual provisions of the Bill. All that we have in the Bill as it now stands dealing with doctors will be found in Clause 8 and Clause 14. Clause 8 provides that the benefits conferred by this part of the Act are to include medical treatment and attendance, and Clause 14 provides that every approved society and local health committee shall for the purpose of administering the medical benefit make arrangements with duly qualified medical practitioners. The hon. Member for Pontefract (Mr. Booth) stated that this Bill proposes to pay doctors at the rate of 4s. per annum for every person they treat. There is no such provision in the Bill. There is nothing more than I have stated. Medical benefit is to be one of the benefits, and the local health committees and approved societies are to make arrangements with properly qualified medical practitioners.

How has the charge of 4s. per annum arisen? My right hon. Friend has stated on the Paper which he has circulated with the Bill that the average payment made by friendly societies at the present time is 4s. per head per annum. That 4s. includes, I am informed, 1s. 6d. for drugs, so that the actual net amount which the medical man now receives through the club or friendly society upon the average is 2s. 6d. per head per annum for his whole services in respect to the assured person. In the Bill there is nothing as to the amount to be paid to the medical man, but there has been published by my right hon. Friend the report of the actuaries, and in that report (paragraph 70) there is published the following statement:—

It will be convenient here to set out a statement of the "minimum benefits" provided by the Bill in the case of members of approved societies. These are as follows:—

(a) Medical Benefit—takes an equivalent to 6s. per head per annum throughout life. There the only statement we have is that among the minimum benefits provision is to be made for 6s. per head for medical relief in all its aspects. Assuming that 1s. 6d. out of the 6s. goes for drugs and appliances, it would leave 4s. 6d. per head to be paid in respect of insured persons who will receive the minimum benefit under the Bill. That 4s. 6d. you have got to compare with the 2s. 6d. which is now the average payment made through friendly societies. I am not dealing now with the system of the supply of drugs, nor am I dealing with the system of medical treatment which has been given by friendly societies or approved clubs. I am only dealing with the financial provisions in relation to doctors. The doctors hitherto have found the drugs, and assuming that the statement is correct that the drugs cost 1s. 6d. per head, and that the same amount of drugs are found—under certain conditions I think they will be cheaper under the new system—but assuming that to be true, the actuarial calculations of minimum benefits would give a total amount of 4s. 6d. for payment of medical treatment instead of 2s. 6d., the average amount paid at the present time through friendly societies. But that is not all. Through the sanatorium clauses, as I will call them, certain classes of sickness are taken out of the ordinary benefits, and those are the particular kinds of sickness which require most medical treatment and which last longest.

And, it being Eleven o'clock, the Debate stood adjourned; to be resumed upon Monday next, 29th May.

Adjourned at Three minutes after Eleven o'clock.