§ In the case of an insured person under the age of sixteen no part of the contributions payable by or in respect of him above the sum of four shillings and eight-pence (or in the case of a girl four shillings and sixpence a year) shall be credited to the society of which he is a member, or if he is a deposit contributor, carried to his credit in the Post Office fund, and in the latter case that sum alone shall be payable out of his account to the local health committee towards the expenses of the benefits to which he is entitled and the cost of the administration thereof.1580
§ Mr. FORSTER
I have one or two questons to ask the Chancellor of the Exchequer on the Motion to leave out this Clause. I am bound to say I think it will be a great improvement if the Clause is deleted, but the elimination of it has certain effects on the financial part of the scheme, and I should like the Chancellor of the Exchequer to tell us what they are going to be. When the Bill was introduced, the Chancellor of the Exchequer told us in the explanatory memorandum he circulated that boys and girls under the age of sixteen were only to be entitled to medical attendance and to sanatorium treatment, and that the balance of their contributions was going to swell the reserve fund created under Clause 40. That balance amounted to a very handsome sum. The Committee will remember they were to pay the full contribution of 4d. and their employers were to pay the full contribution of 3d. This handsome balance was to be accumulated in order to enable the whole scheme to be extended at an earlier date than would otherwise be possible. The actuaries estimated there would be something like 800,000 boys and girls brought into insurance.
If full contributions were paid in respect of those 800,000 individuals, they would amount to a sum approximately of £800,000 a year. Out of this sum you were to pay only medical and sanatorium benefit, and the rest was to go practically to providing a sinking fund for the liquidation of your initial debt of sixty odd millions. Probably you would be able to employ something like half a millian a year in the extinction of debt, and the Chancellor of the Exchequer counted upon this money in order to extinguish his debt in fifteen and a-half years. When you strike out Clause 38, you remove the limit which you have placed upon the benefits that can be given to persons under sixteen, and, unless you limit them somewhere else, you are going to give them practically full benefits. If you give them full benefits there will be no balance to carry towards the extinction of the debt. This means that you will add at least three, if not four, years to the period during which this debt is to be current. I want the Chancellor of the Exchequer to tell me to what extent this will prolong the period, and what other effects, if any, it will have upon the finance of the scheme.
§ Mr. LLOYD GEORGE
The analogy of the hon. Gentleman is not quite complete. When we had a Debate earlier in the course of the proceedings on the question of young persons under sixteen, there was a general feeling expressed that if they were retained at all there must be benefits on a reduced scale. The question the Government then submitted to the Committee was whether they should be retained at all or, if they were, whether the money should be allocated for the purpose of wiping out this deficiency in order to accelerate the date when they get additional benefits. We had no clear indication of opinion from the Committee, but as far as I have been able to gather from the opinion of individual Members and representations which have been made to the Government from outside, I think the general feeling is rather in favour of leaving them out altogether. In Germany I think the age is sixteen. Our present purpose is to leave them out altogether—not to bring them in at all, but to start at sixteen, as you do in Germany. In this country friendly societies do not take them into the adult branch before they are sixteen years of age. They are only introduced into juvenile branches.
There was an alternative which we considered, and I should rather like the Committee to think about it between this and the new Clauses, when it might be introduced. It was that you should treat them as a kind of juvenile branch and that, instead of charging them 4d. and the employer 3d., you should charge them 1½d. and the employer 1½d. and the State should contribute something in addition and that you should give them reduced benefits. These would be medical attendance, sanatorium, and I think 3s. a week in the event of their falling sick. These are the two proposals which you have to consider. For the present we are inclined to leave them out altogether and that would undoubtedly be the effect of omitting Clause 38. But if between this and the time when we arrive at the Clauses Members of the Committee have other views I should very much like to hear them and to know what the general feeling of the Committee is upon that subject. Most of the pressure which we have had, I am not sure whether from both sides of the House, but certainly from outside, has been in favour of leaving them out altogether, charging them nothing until they are sixteen years of age and starting them as members of these societies at sixteen. The hon. Gentleman is perfectly 1582 right in stating that this will have the effect of postponing the date of additional benefits, because a considerable sum of money which we had reckoned upon as being available for the winding up of this initial deficiency will then have disappeared out of the fund. As we had already promised benefits to these children under sixteen we are really no worse off now than we should have been if we had not given them benefits. The hon. Gentleman asks me by how many years or months, as the case may be, the period is prolonged. It is not a very serious matter. I was asked the other day whether it would be possible later on to have a sort of revised estimate up to date, showing the position of the deficiency fund after all these Amendments have been incorporated. I think it would be a mistake now to do it piecemeal. We are getting it prepared, but we have another fortnight before we will have to deal with the matter. There may be other Amendments which will affect the fund, and I think it will be advisable not to give a sort of estimate to-day. I think it would be very difficult to do that accurately.
§ Mr. FORSTER
May I ask the right hon. Gentleman if he can state to what extent it affects this Clause?
§ Mr. LLOYD GEORGE
It is very difficult to do it apart from the effect of other Amendments. There may be other Amendments which will affect the calculation. Standing absolutely alone, it would mean I think two years. That is my recollection, speaking purely from memory. I will give the actual figures later on. That is the position, and therefore we move the excision of the Clause, and if between now and the time we arrive at the new Clauses any Members of the Committee feel that it is better to bring in all these young persons and make them contribute a small sum of money, that a small sum of money should also be obtained from employers, and that we should give reduced benefits, they will be able to present their proposals later on. There are two alternatives which present themselves to the Government, and we have decided upon excision. We are open to conviction upon this as upon other matters.
I only rise to ask whether the right hon. Gentleman has considered what is going to be done in regard to those young people who are now members of friendly societies. 1583 The right hon. Gentleman knows that there are a large number of juvenile lodges, and that they have been used in the past as recruiting agencies for the friendly societies. They are contributing now. Are they to be allowed to contribute in future, and have the employers' contribution and a share of the State's contribution, or does the excision of this Clause mean that they are not in future to be allowed to be members of friendly societies at all? While the right hon. Gentleman is considering the point as to how length is postponement of redemption will extend and the question of the additional reserve, will he also consider how much the alteration made on the Women's Clause affects the reserve. Certainly that does affect the reserve. If the 1 5–9d. were reduced to 1½d. that would affect the redemption, but that, I understand, is abandoned. It would be interesting to the Committee if some estimate could be given of the effect of the alterations which were made on the Women's Clause.
§ Mr. LLOYD GEORGE
The hon. Gentleman is perfectly right in stating that the alterations on the Women's Clause would undoubtedly affect that question. The hon. Gentleman wants to know what the effect would be on friendly societies if young persons are left out altogether. Juvenile societies would not be affected at all, but there would be no employers' contribution or State contribution, because we are leaving these young people out of the scheme altogether. Therefore the juvenile societies would be purely voluntary associations as at the present moment.
§ Mr. HOHLER
May I ask the Chancellor of the Exchequer one question? I quite follow his alternative proposal. Assuming that young persons under sixteen are entirely excluded, would the employers also be excluded from making a contribution?
§ Question, "That the Clause stand part of the Bill," put, and negatived.