CLAUSE 55.—(Provisions as to Application of Existing Funds of Friendly Societies.)

HC Deb 10 November 1911 vol 30 cc1963-2004

(1) Any registered friendly society or branch which provides benefits similar to those conferred by this Act shall submit to the Registrar of Friendly Societies a scheme for abolishing, reducing, or altering such benefits as respects members who become insured persons under this Part of this Act, and for the application of the funds accumulated in respect of such members for the purposes of such benefits in any one or more of the following ways:—

1. (a) in the payment of other benefits;
2. (b) in the reduction of the contributions of members in respect of benefits payable by the society independently of this Part of this Act;
3. (c) in the payment of contributions under this Part of this Act payable by its members;

and any such scheme when confirmed by the registrar shall have effect as if enacted in this Act.

(2) This Section shall come into operation on the passing of this Act.

Mr. JAMES HOPE

On a point of Order. I desire to draw your attention to the fact that an Amendment handed in in my name is not at the proper place on the Paper and is not in the form in which I handed it in. My Amendment was to come in after the word "society" on the first line of the Clause, and to read, "Any registered society which desires to become an approved society under this Part of this Act." I put in the word "thereof," because I thought it was necessary for drafting purposes. The Amendment comes in after the word "society," and not after the word "branch." I do not know how the mistake arose, but it is so.

The CHAIRMAN

I am sorry if any mistake has arisen in the printing of the Order Paper, but if the hon. Member has a legitimate Amendment he can move it if he will rise when he comes to the point.

Mr. WORTHINGTON-EVANS

May I submit that the Amendments to be proposed by the Chancellor of the Exchequer amount to a new Clause. The whole of the principle of the Clause is reversed, and I submit they should be taken as a new Clause.

The CHAIRMAN

I have looked at it from that point of view, and I have come to the conclusion that it does not come under the ruling I made yesterday on Clause 51.

The ATTORNEY-GENERAL (Sir Rufus Isaacs)

I beg to move, in Sub-section (1), to leave out the word "any" ["any registered friendly society"], and to insert instead thereof the word "every."

Mr. FORSTER

Perhaps the Attorney-General would tell us the effect of the Amendments, because, as my hon. Friend has pointed out, it almost amounts to a new Clause.

Mr. BOOTH

On a point of Order, I want to ask again whether we are to have another Second Reading on this Clause?

The CHAIRMAN

Certainly not on the leaving out of the word "any."

Mr. BOOTH

I understood the hon. Member for Sevenoaks, and I do not say it is unreasonable, to ask the Attorney-General to explain the whole Clause, so that it seems we are to have another Second Reading debate.

The CHAIRMAN

Of course, a good deal will arise on the Amendment to line 25, in Sub-section (1), to leave out from the word "person," to the end of the Subsection, but not on this word "any."

Mr. FORSTER

It seems to me that the substitution of the word "every" for "any" makes the whole thing compulsory. We want, if we can, to get a general grasp of the bearing of the proposed alterations. I think it would save the time of the Committee if we could have the explanation.

The CHAIRMAN

So far as the substitution of the word "every" for "any" raises the point it is in order.

Sir RUFUS ISAACS

I should like to understand what your ruling is. The request made to me by the hon. Member for Sevenoaks was that on this Amendment, which is the first of a series of Amendments, I should explain the effect of the Clause as it would be with the Amendments proposed by the Government. I should have thought that that would be the convenient course. It is difficult to deal with the one word without explaining all that happens afterwards. The substitution of the word "every" carries on the whole of the scheme of the Amendments. I should suggest, subject to your view and the view of the Committee, that it would be better that I should explain shortly what would be the effect of the Amendments on the first Amendment.

The CHAIRMAN

In so far as any subsequent Amendments are consequential on the substitution of the word "every" they may be referred to on the first Motion.

Sir RUFUS ISAACS

The first word which it is proposed to alter affects the scheme which is now proposed in the Government Amendments. The effect of the various Amendments proposed will be this, that a registered society which provides benefits of a kind conferred under this Bill would have to submit a scheme either for abolishing or for altering or reducing those benefits in so far as it would affect members who become insured persons. If they do not become insured persons they are not affected; but in so far as they become insured persons it is necessary that there should be a scheme submitted for the purpose of altering the benefits. Then under the Government Amendment which follows, once a scheme is submitted either for altering the benefits or for continuing or altering the contributions, if the scheme shows on an actuarial valuation that owing to this alteration there are existing funds set free and which it is not necessary to employ for the purpose of meeting existing liabilities of the society, those existing funds can be applied in three different ways. The first would be for providing other benefits for existing members of the society, whether they become insured members or not That would be material, because they have already contributed; they are already entitled to benefits; and if there is a sum set free, subject to the conditions I have explained, it may be applied in this particular way—that is, for the increase of benefits payable by the society apart altogether from the benefits payable under this Act. The second way would be in the reduction of the contributions payable by members, also in respect of benefits independent of this Act. We are dealing so far in both (a) and (b) with benefits or contributions which arise irrespective altogether of the present measure.

The third way in which the money might be applied is towards the payment of contributions by such persons who are already members under this part of the Act—that is, insured persons—if they elect to receive their benefit under the approved society of which they are already members. That is to say, suppose a man is a member of the Manchester Unity of Oddfellows, and he says that he will take the Manchester Unity of Oddfellows as his approved society for the purpose of receiving his benefit and his contributions towards the State scheme, he is already a member of the society, and his part of the existing funds may be set free for the purpose of reducing his contributions. Those are the three alternatives provided. The Amendment does not make any very great change. The principal change is one found necessary in consequence of the enormous difficulty of carrying out what at first was thought to be the more practicable and just method—that is to say, to apply to each person individually an increase of benefit or reduction of contribution, which is another form of benefit, the amount of money set free in any particular society to which that member belonged before the State scheme came into existence. That is no doubt an extraordinarily difficult thing to do. It would involve great expense and an enormous amount of actuarial calculation. Every member who is familiar with the working of the various societies will realise that if you had to make this calculation for each individual member it would throw upon the the societies a great burden of expense and labour which can be obviated by this simpler scheme, under which full benefit will be given to those who are already members of friendly societies. There may be a scheme for that purpose which would apply to all those members of the society who come within either (a), (b) or (c) of the alternatives given by the Government. Therefore the effect of the alteration is really to simplify the scheme and make it more workable without in any way impairing what we thought was the usefulness, convenience, and justice of the scheme proposed under Clause 55.

Mr. WORTHINGTON-EVANS

I do not rise to oppose the alteration at all, because, on the whole, I think it is a great deal better than the original Clause. The original Clause seemed quite impracticable, but I believe it will be quite possible to carry out the new proposal. Some points, however, are not clear. The first Amendment is to substitute "every" for "any." The Government will observe that that applies only to registered friendly societies in Clause 55; but under Clause 18 the societies that may become approved societies are not limited to registered friendly societies. They may be either registered or unregistered, or societies the rules of which have been approved by the Insurance Commissioners. Is it intended that the Clause shall apply only to registered friendly societies, or is it to include other societies, not registered, which qualify as approved societies?

Sir RUFUS ISAACS

Have they reserve funds?

Mr. WORTHINGTON-EVANS

I am not prepared to answer that. I do not know whether they have or not. It is possible that they may have reserve funds. If the answer is that the Clause covers all societies that have reserve funds, that deals with a question of fact which I cannot answer. It may or may not be that unregistered societies have reserve funds. At any rate, it ought to be made plain that the Clause should cover all societies with existing funds at least. Apparently no unregistered society is to submit a scheme at all. If it has a reserve fund it seems to me that it ought to be put under the same obligation to submit a scheme with regard to the existing fund as a registered society. Otherwise you are giving a preference to unregistered societies, and allowing them to do what they like with their existing funds, while you very properly compel every society which becomes an approved society to submit a scheme for approval. There is one way in which this Clause apparently goes further than is necessary. As drawn, the Clause will apply to every society, whether it becomes an approved society or not. Is it intended that societies which do not become approved societies, having nothing to do with the Act at all, should be obliged to submit a scheme? Perhaps the Attorney-General will explain how he thinks that this Clause will not interfere with societies which do not become approved societies. If the Attorney-General is going to reply that the scheme is only to be for continuing the policy of reducing or altering such benefits as respects members who become insured persons—if he is going to rely upon that—let me point out that some of their members may become insured persons—and will become so—not necessarily in the society to which they already belong but any society which may become an approved society, and which they join under the compulsion in the Bill. The point is that this does not only refer to insured persons belonging to a society in respect of which the scheme is launched. So long as a society has any members who become insured persons, though they become insured persons in another society, then this Clause will apply. That, it seems to me, requires consideration, and perhaps alteration. Those are points which perhaps are more points of drafting than of substance; on the other hand, they are points which require to be taken up if this Clause were not new.

As to the general scheme, I would like to point out that there is an enormous difference between Clause 55 as re-arranged and Clause 55 as originally proposed. Under the original proposal existing funds could only be applied for the benefit of existing members. As the Clause now stands apparently the fund can be applied both for those members who become insured persons, and will continue in the State section, and also for those who do not come into the State section at all. That may be the means of looking after the older men over sixty-five, who would otherwise have been seriously affected by the operation of this Act. I am glad to see that now the indication is given that at least the funds of the existing societies will be used for the purpose of strengthening and retaining the position of those older members who cannot come into the State scheme. And there also appears to be power, not only to launch and, as it were, guarantee existing benefits to the old members, but there appears to be power to increase the benefits of the old members. Is not that going rather far? It is obvious and right that this State subsidy—this realised reserve—should be applied to the existing benefits of the old members, but is it right to apply these funds to increase the benefits to which old members are entitled?

Mr. BOOTH

What would you do with that surplus then?

Mr. WORTHINGTON-EVANS

There are many things that can be done with a surplus. The application of this surplus—as it is called—realised reserve, in fact—for the purpose of the old members is justifiable on quite a separate ground: on the ground that the State coming in and taking over the societies leaves the old members in a class by themselves—a class that cannot get the proper benefits which they looked forward to and which they were entitled to when they entered into insurance. There are perfectly good grounds for using these reserve funds, if they do not belong to the old members, for the purpose of helping the old members, because the State comes in and interferes with the continuity of their contracts. That is a very good reason for looking after them and guaranteeing them their existing benefits. But to guarantee, or even to allow, the application of the funds, not to carrying out existing contracts, not for existing benefits, but to give something in addition, seems to me another matter, and requires very careful consideration. After all, the funds are not unlimited. When you give to one you are reducing the funds available for something else.

Mr. BOOTH

We are following the hon. Gentleman with interest, but would be be good enough to explain a little further?

Mr. WORTHINGTON-EVANS

I will try to make my meaning clear. As I understand this Clause, we know that there will be large reserves variably estimated in the amount realised. These reserves can be applied in preserving the existing rights of the old members of the societies who are perhaps either too sick or too old to come at all into the State scheme. Now for that proposal there is the element of justice. For the State has come in and has interrupted the contracts of the older men, not only in taking away the younger members of the societies and putting them into the State section; it has left the residue, which by itself cannot support itself, and cannot continue to give to each other even the same benefits as they would have given, and received, if the society as a whole had gone on as before the State came in at all. Is that clear?

Mr. BOOTH

Yes.

Mr. WORTHINGTON - EVANS

Very well; I am glad that the reserves that are realised by the societies coming in, and the taking over of part of their liability should be used for the purpose of continuing the existing benefits to these old and sick members. I am entirely in accord with the scheme. But if I understand it rightly, the scheme goes further, for the rest of that surplus, or some part of the rest, can be used for the purpose of still further increasing those old members' benefits over and above their contract rights. There we come into a different category altogether. We are going away from the category of strict justice, if I may call it so, and getting into the position of using funds which do not necessarily belong to these old men at all, but to the other members of the society. We are diverting the fund from those who are entitled to it and putting it into another class altogether. The one operation is strict justice: the other is a form of charity which requires a different set of considerations. I am not going to oppose it at all. I am really asking for information. Is that the intention of the Clause?

The CHANCELLOR of the EXCHEQUER (Mr. Lloyd George)

Hear, hear.

Mr. WORTHINGTON-EVANS

The Chancellor of the Exchequer says, "Hear, hear." I do not know whether he agrees with my interpretation of what the amended Clause means?

Mr LLOYD GEORGE

nodded affirmatively.

Mr. WORTHINGTON-EVANS

Then I want to know who is to be the authority? Who is the person that will say how much of that fund is to be taken from the one set of beneficiaries, and given to the other class who neither by contract nor by right are entitled to it? Do the society itself? If so I have nothing more to say.

Sir RUFUS ISAACS

They will submit a scheme.

Mr. WORTHINGTON-EVANS

Are the schemes to be stereotyped? Is there to be one sort of scheme for all the societies? Are all the members of the societies to have every opportunity of voting upon it? If the members of the societies are to have these schemes explained to them in plain and simple terms, and without actuarial or too many actuarial formalities, and if then they vote upon them I have nothing more to say. But I do not see in this Clause, as drawn, that there is a necessity for these schemes being submitted at all to the members of these societies. All this Clause provides is that a scheme shall be prepared. We know very well that individual members of the societies cannot prepare schemes. The management no doubt will prepare the scheme. Then, I think, it will be submitted to the Registrar of Friendly Societies, and if he gives his sanction to it then it becomes part of the rules of the society. In fact you are altering the rules of the society, and before you alter them you ought to give the members of the society the opportunity to vote upon them. I am glad this alteration has been made, but I feel it my duty to point out a few ways in which it seems to me still lacking.

Mr. RAMSAY MACDONALD

As I read this Clause it does not apply to trade unions. I should like a definite reply as to whether it does or does not from the learned Attorney-General, for if the Clause does apply to trade unions it is open to most grave objection. If it does not I have nothing else to say.

Sir RUFUS ISAACS

It does not; it is so framed that it should not.

Mr. J. WARD

That matter, I think, requires some further attention. The point put by the hon. Member for Leicester was exactly the interrogatory I wished to put. The mere statement of the Attorney-General that this does not apply to trade unions would not carry us very far unless it was contained in the Clause. On Clause 18 I think we have included an enormous number of societies. I draw the attention of the Attorney-General to one case I know. The Bristol and West of England Society, which carries on its business practically as a trade union, is registered under the Friendly Societies Acts. Portion of its rules are under the friendly societies. I well remember when I made an application some years ago on behalf of my trade union to register a distinct voluntary portion of our union for sick benefit the Registrar-General suggested that having made a separate section in our society for the payment of sick and funeral benefits we ought to register that part of our society under the Friendly Societies Act, and it was only after very serious discussion and controversy that we succeeded at last in getting the Registrar-General to agree on the condition that we made rules continuous without any reference to this sick section. He then agreed. I am in a sort of quagmire. I know in the case of the Bristol and West of England Trade Society they were bound to register for benefit under the Friendly Societies Act.

Sir RUFUS ISAACS

A section—

Mr. J. WARD

Yes, a section, that is rather a peculiar position, and I think it should be distinctly understood in the Clause that we are not to compel trade unions to register under the Friendly Societies Acts. I can quite imagine plenty of societies that do not pay benefits at the present time that will pay benefits and apply to become members of friendly societies, and I want to be sure we are not leaving a loophole to the Insurance Commissioners to come down on trade unions.

Mr. LLOYD GEORGE

With regard to the point raised by the hon. Member for Leicester (Mr. Ramsay Macdonald), I naturally take my view from my right hon. Friend the Attorney-General that trade unions are not affected. The answer of the Attorney-General, confirmed by further inquiry which I have made, is that they are not included. My hon. Friend says there are a good many societies not registered, and he wants to ensure they are not included. Unless they are registered they cannot come in, and trade unions do not come in at all.

Mr. POINTER

Are not some trade unions registered? I thought there were some and that the iron founders was one.

Mr. LLOYD GEORGE

Trade unions cannot be registered as friendly societies. There is a society in Bristol which has registered a section as a friendly society, trade unions in the ordinary sense of the term must keep their funds separate. A trade union may set up a friendly society section and register under the Friendly Societies Acts. If there is a society of that sort it will undoubtedly come in, or rather that section will come in, not the trade union section. I come now to the point raised by the hon. Member for Colchester. As far as I can see he was rather anxious to know the state of the non-registered societies. They have no reserve funds. They divide their funds at the end of the year and have no reserves in the ordinary sense of the term and we do not interfere with them; they do not accumulate reserves to make provision for payment later on in life. As regards the hon. Member's second point my right hon. Friend will look into the matter, it is a drafting point, but it may be safer to introduce words such as he indicated. The hon. Member in his next point rather criticised the proposal that the reserves should be used for the purpose of giving benefits to existing members. At any rate that is the intention.

Mr. WORTHINGTON-EVANS

I have not the slightest objection for the reserve being used for the purpose of increasing benefits to those people entitled to the reserve. What I was pointing out was that the Clause apparently permitted the reserve belonging to one class being used for the purpose of increasing the benefit to another class.

Mr. LLOYD GEORGE

The hon. Gentleman means the old people. There is rather special reason why these old people should have that extension made to them provided their societies agree. Old people over sixty-five are not brought into the scheme and I think it is quite conceivable a society may say, "We will make up for that. The State cannot take you on because of the enormous cost, but because you have been in your society all your life helping to make up the reserve we will give you special benefits." That seems to me the sort of thing that I should look forward to if I were a member of a friendly society, and that is the reason we give the power to friendly societies, and I think the friendly societies will use that power in order to give special benefits to the old people. The hon. Member asks me how this scheme can be carried out. The schemes must emanate from friendly societies themselves, and must be sent to the Registrar of Friendly Societies. They have to carry the schemes in the usual way, by a majority of the members. The schemes will be submitted to the Registrar of Friendly Societies, and if he approves, under the plan which we now propose, they will come into operation.

Mr. WORTHINGTON - EVANS

Is there anything in the Section which requires the scheme to be submitted to the members?

Mr. FORSTER

That is the point I wanted to put. I think most of us realise that this Clause is the outcome of prolonged interviews with those who represent friendly societies. We all understand that it is largely in consequence of the views pressed upon the Government by those who are responsible for the management of friendly societies that this change has been made. I think we have to remember that the funds of the friendly societies, belonging as they do to the societies, is a matter for their own settlement. The broad issue I want to raise is that while existing members shall have the right to do what they please with the money that belongs to them, they ought to have an opportunity of clearly understanding what the scheme is. Having had the opportunity of making themselves familiar with what the scheme really means, they should have an opportunity of deciding whether they wish to have it or not. That is really as far as the Committee can safely go. The money belongs to the existing members of friendly societies, and it is theirs to do what they like with. All that we have a right to do is to see that they have an opportunity of clearly understanding what is proposed.

Mr. C. BATHURST

I regret that it has been decided to retain the word "registered." The Chancellor of the Exchequer is not quite accurate in saying that the omission of that word would mean the inclusion of little more than slate clubs. There are over 100 slate clubs and a number of small friendly societies in my Constituency not registered. Many of them have reserves to their credit and they will not care to go to the trouble of making a quinquennial return. There are a considerable number of societies which for the purpose of this scheme would satisfy the Government actuaries as regards their solvency. If that is so it is only fair that they should have an opportunity of submitting a scheme. After all, the Clause itself, as amended by the Chancellor of the Exchequer, provides for the rejection of a scheme if it is not actuarialy sound. No harm would be done by omitting the word "registered." I want to ask whether the Chancellor of the Exchequer has taken into account the grouping system which he has incorporated in the Bill? I am inclined to think that many of the smaller societies in the country villages will not themselves propound a scheme, but if a group be enabled by this Clause to propound a scheme I am inclined to think that a good many would take advantage of it and then they would derive the additional benefits which it is sought by this Clause to confer upon them. I am very glad to see that in the amended Clause paragraphs (a) and (b) will meet the case of the Holloway societies to a certain extent, but I am not quite sure that it will meet their case altogether. Paragraph (a) provides for the allocation of these funds towards the cost of the provision of the additional or the increase of benefits. Is it necessary to retain the words "the additional" or "increase of"?

Mr. LLOYD GEORGE

Which paragraph is that?

Mr. C. BATHURST

It is paragraph (a) of the amended form of Clause 55. The Holloway societies are asking if they set up a non-State section they should be allowed to allocate their existing reserves towards the provision of existing benefits. They do not ask to be allowed to provide additional benefits or an increase of benefits, but they ask to be allowed to provide through their non-State section existing benefits for their members. They desire to provide an annuity at the age of sixty-five, and it is very undesirable that the Clause should be so framed as to oust them.

Mr. LLOYD GEORGE

I do not think paragraph (a) does that.

Mr. C. BATHURST

Does the right hon. gentleman mean to retain the words "the additional" or "the increase of." I do not think the Holloway societies will be able to show additional or increased benefits, but they would like through their non-State section to retain some of the existing benefits for their members. I do not think this Clause will meet their case, and, if not, I ask the Chancellor of the Exchequer to consider the point.

The CHAIRMAN

I think the discussion is now going on to the details of the Chancellor of the Exchequer's Amendment, which will be moved later. I think Members would accomplish their purpose more easily if they moved Amendments to the Amendment, and then the various points would be dealt with without interference with the others.

Mr. JAMES HOPE

This is an Amendment to substitute "every" for "any." I have an Amendment on the Paper to limit or qualify the effect of this Section. If you pass a word like "every" you cannot allow it to be limited. I only want to know whether the adoption of the word "every" would prevent me moving my Amendment.

The CHAIRMAN

No, it does not rule out the hon. Member's Amendment.

Amendment agreed to.

Mr. W. THORNE

On a point of Order. I would like to ask the Chancellor of the Exchequer a question.

The CHAIRMAN

The hon. Member can only ask me a question on a point of Order.

Mr. W. THORNE

On a point of Order. I wish to ask you, Mr. Chairman, whether you will be kind enough to ask the Chancellor of the Exchequer—

The CHAIRMAN

The hon. Member will have an opportunity of putting his question himself.

Mr. LLOYD GEORGE

I beg to move, in Sub-section (1), to leave out the words "or branch."

Sir G. TOULMIN

This Amendment is a very essential one. The Clause, as amended, is a very great improvement on the scheme of the original Clause of the Bill, and generally the Amendments which the Chancellor of the Exchequer is about to move dispose of a great many of the imputations made against him that he desired to manipulate the reserves of the societies to cover the weak points of his own scheme. As a matter of fact, it places at the disposal of the societies and branches many millions and will have the effect of putting them in a solvent position. The question involved in the elimination of the words "or branches" is whether a scheme shall be submitted by the whole society or by each individual branch. In my opinion, the Clause as it was drawn up might have inflicted very great hardship and produced very great inequality, not to mention the mere item of expense. I am informed that the drawing up of schemes for each individual branch might have cost the Manchester Unity something like £10,000. The chief objection to schemes being drawn up for each branch is that branches are too small to secure a reliable average, particularly for the members who are left in. The remarks made by the learned Attorney-General with regard to the scheme of the Clause as it stands in the Bill only deepens one's objection to that scheme, because he said the idea was to apply this division of reserves to each person. That would not only be unworkable, but essentially unfair.

Mr. LLOYD GEORGE

We are not doing it.

Sir G. TOULMIN

No, you are not doing it, and I am supporting the change. I should like to illustrate that point by one or two examples. Take one branch which had 148 members. Of those, fourteen will not join the scheme; their average age is seventy. The hon. Member for Colchester (Mr. Worthington-Evans) seems rather to object to these old members coming in and joining in the benefits which are to be at the disposal of the societies by the liberation of the reserves.

Mr. WORTHINGTON-EVANS

I do not wish to interrupt the hon. Member, but that is not at all what I said nor is it the gist of my remarks.

1.0 P.M.

Sir G. TOULMIN

I certainly gathered the hon. Member did not think the reserves which were liberated on behalf of a certain number of members should be applied to another class for whom they had not been directly accummulated. I think it may be taken for granted that the branch as a rule will not have sufficient members to secure a reliable number to deal with the reserve funds under this Clause, and to get an average risk it is necessary the schemes should be made by the whole society. Permanent invalids, irrespective of age, who are left with the society, and the aged, have the right to the security which they now have of the whole of the reserve in which they are interested. This I take it to be the result of the Amendment moved by the Chancellor of the Exchequer. I consider the State is absolutely justified, not merely in securing solvency to these branches, but also in securing that the increased benefits should go to existing members, whether they are insured persons or not. It would be rather a barren privilege to many branches if the schemes had to be drawn up for the branches only, and not for the joint society. I entirely support the Amendment which the Chancellor of the Exchequer has brought forward, and which enables this comprehensive scheme to be brought in. It will secure the solvency of each branch, and also where there is any surplus the division of that surplus among the whole of the existing members.

Question, "That the words proposed to be left out stand part of the Clause," put, and negatived.

Mr. C. BATHURST

I beg to move, in Sub-section (1), after the word "society" ["Every registered friendly society"], to insert the words, "or group of friendly societies."

I move this Amendment in order to make it possible for a group to submit a scheme on behalf of the small village societies that belong to it. I am quite certain in most of the small country districts it would be very difficult for them to take the initiative in submitting a scheme. They are not the sort of men with sufficient knowledge to draft a scheme, and I am quite sure they would not have the energy and enterprise to submit one. On the other hand, the group, which is to be the source of strength to the village societies, could submit a scheme on their behalf.

Mr. LLOYD GEORGE

The hon. Member's suggestions have been so helpful in the past that I hesitate to oppose this particular proposal, but I am afraid each little society would be very suspicious. At least, I have found them so. They say, "We do not want the county group to grab our surplus," and I have had to assure them the Bill would not touch the surplus which they had already accumulated. If you substituted the group as the body which was to submit the scheme, it would be a scheme for dealing with the surpluses already accumulated, and I think that would create a very suspicious frame of mind. If they wish to call the group to their assistance for that purpose, they can do so, but I think it would be a very dangerous thing to allow the group to manipulate surpluses with which they have had nothing to do.

Mr. HARRY LAWSON

Would it not be possible for the group to draw up a scheme and for the societies to submit it?

Mr. LLOYD GEORGE

There is nothing in my Amendment as drawn up that would prevent that. If you put the group in as the authoritative body to prepare the scheme, then I think the societies would be very suspicious.

Mr. TYSON WILSON

I hope the hon. Member will not press this Amendment, because all the societies I represent are very much against it. They want to manage their own supluses.

Mr. C. BATHURST

I do not want to press my Amendment. I quite see the difficulties and prejudices that exist among the small societies, but I think the adoption of my proposal would have been to their advantage.

Amendment, by leave, withdrawn.

Mr. JAMES HOPE

I beg to move, in Sub-section (1), after the word "society" ["registered friendly society"], to insert the words "which desires to become an approved society under this Part of this Act,"

Mr. LLOYD GEORGE

I am prepared to accept the Amendment in this form—"which becomes an approved society under this Part of this Act." Unless it is an approved society it has nothing to do with it. The mere desire will not do. It must be an approved society.

Mr. JAMES HOPE

I am not sure that that will open up the discussion I want to raise. I really want to deal with those societies which wish to stand out altogether, and this Amendment by itself would not secure that. There would have to be a further Amendment with regard to the status of these members and that would arise on the Schedule. I am afraid we shall never reach the particular point at which that can be raised. Still if the right hon. Gentleman can give me a guarantee that that point will be reached I will defer my remarks till then.

Mr. LLOYD GEORGE

The guarantee must be a joint guarantee, and if the hon. Members for Sevenoaks and Colchester will join me in it I am quite willing to give my name. Can the hon. Member himself give any guarantee?

Mr. JAMES HOPE

I do not think the right hon. Gentleman can complain of me so far as this Bill is concerned.

The CHAIRMAN

Really we must have some Motion before the Committee.

Mr. JAMES HOPE

Then I will move in Sub-section (1), after the word "society," to insert the words "which becomes an approved society under this Part of this Act."

If the right hon. Gentleman will recall to his mind the second day's proceedings he will remember that I then withdrew a similar Amendment, as it was pointed out that the Schedule was the proper place on which to raise the point.

Mr. FORSTER

I want to join in the appeal of my hon. Friend to the Chancellor of the Exchequer. The right hon. Gentleman says if my hon. Friend the Member for Colchester and I will join with him in giving a guarantee that we shall reach the end of the First Schedule in the time allotted, he may find an opportunity for the hon. Member for Sheffield to move his Amendment. But I cannot give any guarantee involving unlimited liability. I do not know whether or not the subjects for discussion are really going to be limited to what at present stands on the Notice Paper. The right hon. Gentleman himself has facilities for putting further notices down.

The CHAIRMAN

I do not think these mutual guarantees arise on the question before the Committee.

Question, "That those words be there inserted," put, and agreed to.

Further Amendments made: In Subsection (1), after the word "this" ["conferred by this"], insert the words "part of this."

After the word "for" ["a scheme for"] insert the word "continuing."

Mr. W. THORNE

I beg to move, in Sub-section (1), after the word "scheme" ["a scheme for"], to insert the words "in accordance with the rules of the society."

I do not find a single word in any of the Amendments brought forward which lays it down that any alteration about to be made for increasing or reducing the benefits must be in accordance with the rules of the society. It seems to me that some provision should be made for that, otherwise alterations may be made without the sanction of the members. But I shall be quite content not to press my Amendment here if the right hon. Gentleman will undertake to put such words in at another point.

Mr. LLOYD GEORGE

I do not think the object of the hon. Member, with which I sympathise, would be secured by this Amendment, because to say that the scheme shall be in accordance with the rules of the society means there will be no scheme at all. There is no power in the rules to make these schemes, but we are giving it by this Bill. I will consider the hon. Member's point, which I gather is that he wants to give power to these societies to submit a scheme which they have not now. I think there is something in that, and I will consider if any form of words can be introduced to meet it. I suppose that what he really wants is that the scheme before it is adopted by the society should be adopted in accordance with the rules of the society.

Mr. W. THORNE

The point I want to settle is that when the scheme is adopted and before it is ratified it must be in accordance with the rules of the society.

Mr. LLOYD GEORGE

I see the point. That is an Amendment which should come on my Amendment. I will see that words shall be introduced to set that right.

Mr. WORTHINGTON-EVANS

What is required is that before a scheme is submitted for confirmation to the Registrar, or before he gives his approval he should be satisfied that the members of the society have been able to vote on it.

Mr. HARRY LAWSON

May I ask whether the Amendment will involve a revision of the rules of the society upon this point? I think it will.

Mr. LLOYD GEORGE

No.

Mr. HARRY LAWSON

May I add that in any case I hope that to meet these points there will be a revision of the rules of a society, because in interpretations before arbitration courts and in other ways it has been found that many of the rules are liable to misconstruction owing to faulty and ambiguous wording. I hope, therefore, that there will be a revision on principles clearly laid down.

Mr. LLOYD GEORGE

I will consider that point when we come to it. I quite see that an Amendment will be necessary to protect members of a society against the irregular adoption of a scheme without fair consultation of the members. I will consider that point.

Amendment, by leave, withdrawn.

Amendment proposed: In Sub-section (1), to leave out the words from the word "persons" ["members who become insured persons"] to the end of the Subsection, and to insert instead thereof, "and for continuing, abolishing, or reducing the contributions of such members, so, however, that the combined effect of the alteration of the benefits and contributions shall not prejudicially affect the solvency of the society, and, if the scheme shows on an actuarial valuation that, owing to the alterations in the benefits and contributions effected by the scheme, any part of the existing funds of the society is set free as not being required to meet the liabilities of the society, the scheme shall provide for the application of the part of the funds so set free in any one or more of the following ways:—

1. (a) towards the cost of the provision of the additional or the increase of benefits payable by the society independently of this Part of this Act to existing members whether insured persons or not;
2. (b) in reduction of the contributions payable by such members in respect of the benefits payable by the society independently of this Part of this Act;
3. (c) towards the payment of contributions payable by such of its members under this Part of this Act as are entitled and elect to receive benefits under this Part of this Act through the society.

(2) This Section shall apply to branches of registered societies in like manner as to societies: Provided that a society with branches may, if it so desires, submit a scheme applicable to all its branches, and it shall be competent for the society to provide by its scheme for the application of the whole or any part of any sums so set free towards the discharge of any deficiencies in the other branches which may be found to exist on such actuarial valuation as aforesaid.

(3) Any scheme when confirmed by the registrar shall be deemed to be incorporated in the registered rules of the society or branch and may be altered accordingly, so, however, that no alteration shall be inconsistent with the provisions of this Section.

(4) This Section shall apply to seamen, marines, and soldiers, from whose pay deductions are made under this Part of this Act as if they were insured persons."—[Mr. Lloyd George.]

Mr. C. BATHURST

Unless I get some assurance from the Chancellor of the Exchequer I could not support this Amendment. Speaking for the Holloway societies, as the Bill stands at present un-amended, it does enable them to apply the funds that will now stand to the credit of their ordinary non-State section to the provision of such benefits as they have provided in a special manner in days gone by. They will come under paragraph (a) in the original Bill, but if the only substitute for that is to be paragraph (a) in the Chancellor of the Exchequer's Amendment, the Holloway societies will certainly be opposed to that Amendment as it stands, unless the words "additional or the increase of" are omitted. As that paragraph is drafted now, the members of Holloway societies would not be able to obtain the benefits they expected, after the Chancellor of the Exchequer's assurance, to be able to obtain from the operation of the weekly payment which does not represent the State contributions. Assuming for an instant that 7d. is being paid to-day by a member of a Holloway society, 4d. of that in future will have to go into the State section, and 3d. only will be available to provide the special benefits which the Holloway societies supply to their members, including the provision of the savings bank fund for the purpose of providing an annuity at sixty-five. As the Amendment reads now, that 3d. which they would be able, under paragraph (b), to pay to their non-State section, it will not be possible for them to apply towards benefits other than what the State scheme provides them with. The scheme the Chancellor of the Exchequer now proposes will not meet with the approval of the Holloway societies unless he is prepared to omit these words. What benefit does the right hon. Gentleman derive from the inclusion of these words. I cannot see any particular merit in them. If these registered societies have funds to their credit, which are entirely their own property, surely they should be, in justice, allowed to apply those funds in their own way, so long as it is not contrary to the principles of friendly society custom and practice. Assuming that the registrar, who will have to give his opinion on such a matter, is prepared to approve such a scheme, if the words—

Mr. LLOYD GEORGE

I think the hon. Member is labouring under a misapprehension as to the effect of these words. The purpose he has in mind is carried out by these words. As a matter of fact they were inserted for the specific purpose of covering these cases. He thinks the money must be applied to something in addition to what they are getting at the present moment. He wants to allow them to use the money for the purpose of continuing, if necessary, those benefits they now give. I have looked at the words carefully with my colleagues, and they take my view strongly. The words are "towards the cost of the provision of the additional" benefits.

The CHAIRMAN

I would point out that those words are not yet before the Committee. We have not yet struck out the words in the Bill.

Mr. C. BATHURST

On a point of Order. It is very difficult for a person in my position, representing the Holloway societies, to decide whether or not the original words shall be struck out of the Bill unless I know what is going to be introduced as a substitute.

Mr. LLOYD GEORGE

I assure the hon. Member that the words of the Amendment do cover the case. If he can prove to me, when we come to them, that they do not, I shall certainly accept any Amendment making it clear that the Holloway societies have the same rights under the new provision as under the Bill, and that they can do exactly as they like with their own funds, subject to what the society decides and the Registrar.

Mr. WORTHINGTON-EVANS

Cannot words be left out from the words "other benefits"? Are we to consider the words "other benefits" as equivalent to the words "additional benefits"? Is "additional" intended to mean benefits other than those under this part of the Act? If that is the case we can easily come to an understanding.

Mr. LLOYD GEORGE

That is so.

Sir J. BARRAN

Like the hon. Member opposite (Mr. C. Bathurst), I am also interested in the Holloway societies. The conclusion I have come to is that which has just been expressed, that these societies will be protected, for "additional" means additional to the State benefits and not additional to the benefits these societies pay at present. I hope the hon. Member will withdraw his opposition.

Mr. C. BATHURST

I cannot possibly, as a conveyancer, accept that interpretation of these words. I do accept the assurance of the Chancellor of the Exchequer, and I do not propose to object to the ruling out of the words in the Bill, if he will undertake upon his Amendment to put in any words which may be found necessary.

Mr. LLOYD GEORGE

Yes, I will put in any words.

Question, "That the words proposed to be left out stand part of the Clause," put, and negatived.

Question proposed, "That those words be there inserted."

Mr. CASSEL

I do not in the least desire to oppose this Amendment, but I want to understand it. It seems to me, if I read it rightly, that there are certain defects in it as at present drafted. As I understand the position, it is this. The result of crediting reserve values to these societies is that some reserve values previously accumulated in respect of the older members of the society will be set free, and this Clause proposes to deal with the surplus which arises in one of three ways. The first of them is to provide, secure or increase benefits outside the benefits provided by this Act, the second is to reduce the subscription for benefits which are outside the Act, and the third is to reduce the subscriptions payable by existing members who go on with the same society. These reserves have really been accumulated by the old men, who have been twenty, thirty, or forty years in the society, and under this you are going to put them on precisely the same footing as a man who has just joined or who has joined only a year or two before the Act comes into force. Indeed, the expression "existing members" is so vague that it is not clear whether it applies to persons who are members at the time when the Act was passed or when it comes into force. For instance, whether persons who join between the time of the passing of the Act and the commencing of the Act shall be existing members or not is not clear. It appears from this that it would be con-petent for a society to deprive entirely persons who remain outside the Act of any benefit of that surplus, although the benefit may have been entirely accumulated in respect of those persons. They are absolutely free under this to apply the whole of the surplus in any of those three ways. But whichever of these three alternatives they adopt they must deal equally with all existing members. As I understood the Chancellor of the Exchequer, he thought the friendly societies had the option under this to give special benefits to the old people. If that is the intention, as it reads at present it is at least doubtful whether they would have that option. It is also open to the societies under this to apply the whole of it under paragraph (c). Then I do not understand what will be the position of the societies which have not got a surplus. Take the case of a society which has got 70, 80, or 100 or 200 members who are not qualified to come in under the Act, who either have an income over £160 or are over sixty-five years of age. When they are segregated they would be an uninsurable risk. They will be a small number, but what is to happen to them?

Mr. G. THORNE

I take it that the object of the hon. Member is to make sure that this scheme shall be fair to all sections and interests concerned. This scheme will be submitted to the Registrar of Friendly Societies. What power will he have in revising the scheme? If the Registrar has such powers as to enable him to watch all the interests affected, minorities as well as majorities, and to see that all sections are properly guarded, all the difficulties which have been raised, and which I entertain myself, will be removed. I want to make sure that some persons outside the society itself, in the interest of the minorities, not to unduly affect the right of the friendly societies, which I desire to maintain, but in the interest of those who will not become insured persons under the Act, shall see that they are fairly treated. If the registrar will have reasonable powers and rights to make sure that the scheme shall be fair to all sections, it seems to me that will obviate all the difficulties.

Mr. LLOYD GEORGE

The best way I can answer the questions of the hon. Gentleman is by giving generally what I think will happen after the Bill has passed. Every friendly society which is solvent must have accumulated funds. The hon. and learned Member (Mr. Cassel) asks, "what about the society which has no surplus? There are societies which are so absolutely insolvent that they have not sixpence in the bank. Of course, they will have nothing to distribute." I do not know any society which is so badly off as all that.

Mr. CASSEL

I was dealing with the case of societies which have got, say, 100 members who cannot come in under the Act at all because they are over sixty-five, or because they have more than £160 a year, and which, though they might be solvent so far as their members are concerned, would cease to be solvent so far as these particular members are concerned if they were put into a separate class by themselves. You will have to segregate from the other members those who cannot come in under the State scheme.

Mr. LLOYD GEORGE

I do not even now quite understand the point. Does the lion, and learned Gentleman contemplate a society in which every member is over sixty-five years of age? If not, there could not be a society which has not got a surplus. If it has any money at all there is a surplus under the Act, because under this Act the new scheme of insurance undertakes liability in respect of age. Every society is supposed to have set aside, to have banked as it were, a certain sum of money to provide for the increasing liability which age brings. If you provide sufficient money it is solvent, but if you provide only 18s. in the £1 it is not solvent. What happens under this Bill? The whole of that liability is taken over by the State up to sixty-five years of age. That means that the reserve funds of the societies are released to that extent. What is to be done with the released funds? I know that there has been an idea entertained in some quarters that these funds which have been accumulated in the past will be devoted to those who come into the scheme under this Act. It cannot be too strongly stated that there is nothing in the Bill which will enable us to do that. The only thing Clause 55 does is this. It says, "Here you have great liberated funds, which you do not draw upon in future in respect of your liabilities." What is to be done with these funds? We say you must use them for the benefit of your existing members. How is that to be done? It is to be done by the scheme which each society frames for itself. How is it to do it? It is to do it in accordance with its rules and by eliciting the opinion of the members. I agree with the hon. Member for West Ham (Mr. W. Thorne) that there ought to be some security that the opinion of the members is really elicited, and that the scheme does represent the whole body of the members. The scheme is framed by the members, and they are to decide how this sum which is liberated is to be distributed among them. The only thing we provide is that the money is not to be distributed in cash. If there is £10,000,000 or £12,000,000, which has been accumulated by the members of these societies in the past, we say that, "You cannot divide that in cash." They can prepare their scheme, and then submit it to the registrar. My hon. Friend asked what outside authority is there to see that the funds are not unfairly distributed among the various classes? If hon. Members will look at the end of the Clause they will find that it provides:—

"Any scheme when confirmed by the registrar shall be deemed to be incorporated in the registered rules of the society or branch and may be altered accordingly, so, however, that no alteration shall be inconsistent with the pro visions of this Section."

He is the judicial authority to sit in judgment on the scheme and see that there is no unfairness, and that it is not being inequitably distributed. The hon. Member says that there is provision that it is to foe distributed among existing members, and he wishes to know whether that means equally distributed.

Mr. CASSEL

They all must get something.

Mr. LLOYD GEORGE

That is not incompatible with giving special terms to old people. You can grade your benefits. You can give to members who have been twenty or thirty years in societies higher benefits. Those who have only been in for six months should get less. It is perfectly fair that people who have all through life been members of societies and have built up the funds should get an extra 4d. The hon. Member asked: "What about those who join now and will be members when the Act comes into operation? They will be members, but they will have no reserve. What reserve can a member create in the course of a few months? You may say that they will swamp the other members of the society and get extra benefits. I think that is inconceivable from what I know of friendly societies, and the Registrar would see to that being prevented. Under the scheme submitted to him he would see that those who joined at the last moment did not get benefits resulting from the funds accumulated by those who for years had been in the society. The eleventh-hour men are not to get benefits at the expense of those who have borne the burden and heat of the day.

Mr. BAIRD

I would like to thank the Chancellor of the Exchequer for the statement he has made in regard to this Clause. It is extremely important. There is no doubt that among a great many people in the county who have not been able to follow all the details of the discussion there is anxiety lest this scheme really means that those who are not now insured will get benefits from funds accumulated by those who have been in friendly societies. There are a great number of small friendly societies. I have an example of one with fifty members which has accumulated £500. That society has been going on for about sixty or seventy years. Members representing it came to me and said, "We are going to lose our fund under this Bill, and we had much better divide it up." I have criticised this Bill with regard to various points, but I desire to maintain friendly societies. From the case which was put to me it did seem quite unjustifiable that a society should be broken up, and that its funds should be distributed in a way which was never intended among the few existing members unless there was any danger of the calamity occurring which they foresaw, namely, the people who had accumulated that fund giving benefits to others. I think the explanation of the Chancellor of the Exchequer is satisfactory, coupled with the assurance that the desire of the hon. Member for West Ham will be given effect to, and that there will be no doubt that the scheme will have the approval of the members of the society, and that the funds will not be distributed in the form of money to which people who had made sacrifices had been contributing from year to year. However much there may be that is bad in the Bill, there is a great deal that is good, and I wish to thank the Chancellor of the Exchequer for the assurance he has given that, at any rate, the fears entertained by some in regard to this particular Clause are not well founded. There is great anxiety among certain of the older members of friendly societies lest the people who are to be forced to become members of the scheme will derive benefit from the accumulations that have been, brought about by the contributions of existing members. I take it from the Chancellor of the Exchequer that they will not benefit from these accumulated funds.

Mr. BOOTH

I cannot understand how the impression can have arisen in the country that the new members who are to be brought in will benefit from the funds built up by members who are now in friendly societies. I rejoice at the newborn zeal which is being shown by hon. Members opposite for the protection of the rights of minorities. The last time I made an appeal in favour of minorities in insurance societies the whole of the Conservative party resisted me. I rejoice that I have converted them, and that they recognise that, however well managed a society may be, it is necessary that there should be an impartial authority to revise schemes and see that injustice shall not be done to the minority.

Mr. CASSEL

I rise merely to deal with what is a drafting point. As the Clause stands, I conceive it may have an effect different from what is intended. As the Clause stands, it seems that it will not be competent to the Registrar of Friendly Societies or to the society itself so to frame a scheme as not to treat all existing members on the same footing. Look-at the words of the Sub-section (a) I think it is made perfectly clear that one of the ways in which you can apply this surplus is towards the cost of provision of additional benefits to existing members. Anyone reading that would interpret it as referring to all existing members, whether they had only just joined the society after the Act came into operation, and quite irrespective of what their reserve might be. The Chancellor of the Exchequer pointed out that a member like that would not have any reserve. This Clause does not make it depend in the least on whether they have a reserve or not, but provides, if I construe it correctly, that every man must, if it is applied in that way, be treated as equal. It is perfectly easy to put in words to make it clear that that is not the intention, and now would be the time to do it.

Mr. JAMES HOPE

With regard to the statement of the Chancellor of the Exchequer, I had considerable doubts as to the wording of this Amendment and whether it could be carried out. Points of this character came up in the Debate of the 17th July. They were raised by my hon. Friend the Member for West Derby (Mr. Watson Rutherford) and others. The first point taken was that of existing members who did not become insured persons, as to whether the liabilities due to them should be respected. The second point was with regard to those who did become insured persons, whether they would be subject to the disqualification for the waiting periods. The Chancellor promised to consider these points, especially with regard to the waiting periods. He said it would be a prior lien on the existing assets of the society that an amount should be released which would secure the payment of the benefits during the periods which would otherwise be waiting periods under the Act. I submit that these words are rather vague as to whether that intention is carried out. I see the words "shall not prejudicially affect the solvency of the society" and the others about meeting the liabilities of the society, but it does not seem to me clear that existing members will have a prior right as regards those two points. The first point is whether those who do not become insured persons can be quite easy in their minds that existing benefits will be secure to them, and the second is as to the waiting period, as to which the Chancellor of the Exchequer said there would be a prior lien. It seems to me that under these words it is possible for a scheme to be put through which would not guarantee those points. All the liabilities of the society might be met, and in regard to future liabilities the scheme might be perfectly in order, and it might pass the Registrar of Friendly Societies and yet not carry out the intention expressed in the speech of the Chancellor of the Exchequer, or carry out the assurance which he gave on 17th July.

Sir RUFUS ISAACS

I desire to say one word in answer to the questions raised by the last two speakers. Undoubtedly the objections, as stated by the Chancellor of the Exchequer, are covered by the wording, because the power of the Registrar is the power of confirmation or rejection, and if he does not confirm the scheme is invalid and has no effect. But I think there is some point of doubt suggested, or at least I desire to remove any possibility of doubt. I rather think myself there would be no question about it, but still we are not enamoured of any particular words. We are all anxious to use words which will make clear what the intention of the Committee is, and I can see that words might be introduced which will make it a little clearer than the existing words do that it is not intended that members who join at the last moment shall be entitled to a share in the accumulated funds set free, but that what is intended is that the funds when set free shall inure for the benefit of past members who built up the reserve, the persons who in equity are entitled, and I will use words which will meet that point.

Mr. BARNES

I was about to make some observations on the point put forward by the hon. Gentleman opposite, but I will not go into it now, but I am rather afraid of the operation of this proposal for this reason. I fear intense competition of societies one against the other for new members, and that they will be profuse in their promises of additional benefits and reduction of contributions. That may be incidental to the Bill, but I would like to limit it as far as possible. It is laid down that the scheme shall not prejudically affect the solvency of the society. I should like to know does that mean the society in the limited sense of the society under this Bill or a society for purposes outside the Bill, because if it means only to secure the solvency of the society as an approved society under this Bill there is no guarantee here that these societies competing one against the other for new members shall not evolve some scheme which will affect the solvency of the society as a whole, and if that is not provided against I would like it provided against before we pass this Clause.

Sir RUFUS ISAACS

What is intended here is that having regard to the fact that we are proposing to distribute some of the hitherto existing reserves, the society shall not be injured by it. You are going to distribute assets as against liabilities from which you free them. What is intended is that if you are to be free from those liabilities, before you can distribute the assets it must be seen, at any rate, that what you are going to do is not to prejudice the society.

Mr. BARNES

That is the society as a whole?

Sir RUFUS ISAACS

Yes, the existing society, that what you are going to do will not injure its position and make it less able to meet its liabilities than it was before. The whole operation of the scheme is that as you are going to free the society from liabilities which have hitherto existed, and therefore set free assets which have accumulated for the purpose of meeting those liabilities, you have got to take care when you do that that you are not going in any way prejudicially to affect the society itself.

Mr. FORSTER

As I understand the matter, the use of the word "solvency" in this connection really only relates to the liabilities to existing members of the society when the society becomes approved. On the first day it becomes approved it starts solvent, because no liability has been incurred as regards the members, therefore the word "solvency" only refers to existing members, and it will protect the older members of the society.

Mr. JAMES HOPE

I trust the words which the Attorney-General may suggest will be such as to make it clear that the registrar must reject a scheme if it does not protect the existing members.

Mr. C. BATHURST

I beg to move, in paragraph (a) of the proposed Amendment, to leave out the words "the additional or the increase of," and to insert instead thereof the word "other."

It would then read, "towards the cost of the provision of other benefits payable by the society independently of this part of this Act to existing members, whether insured persons or not." My object is simply to make those words mean what the Chancellor of the Exchequer has already assured the hon. Member for Colchester that they do mean; that is to say, when they insure in such a society as the Holloway society, the obligation towards existing benefits of any fund which may stand to their credit at the time they form the State section as apart from an ordinary section, shall come under the National Insurance scheme. I think my Amendment is quite sufficient to effect that purpose. If it is not, the learned Attorney-General may possibly desire to insert the words "or supplemental"; but in any case, I think the word "other" will entirely meet the object I have in view, because it includes all the benefits which the society may give to its members, independently of this Part of the Act. Surely you do not want to fetter in any way the discretion of the society in dealing with its funds which belong absolutely to its members, as long as it deals with them in accordance with the Friendly Societies Act, and in no way contrary to the requirements of the Registrar of Friendly Societies.

2.0 P.M.

Sir J. BARRAN

May I point out that there might be circumstances in which the society would be in a position to increase the benefits as a result of the passing of this Act. If the hon. Member would go so far as to alter his Amendment by adding to it the words "or increase" I think that possibly they would do no harm, and would meet the cases that might arise.

Sir RUFUS ISAACS

I think it would be better to have some such words as "or increase," and if the hon. Member opposite would move them they would not in the slightest degree affect the point he has in view, because he has the word "other," which I should accept. The only thing is that you must have, in addition to that word "other," the words "or increase," because there might not be other benefits in the strict sense of the term. They might be the same benefits, though increased benefits. Therefore it would appear to be necessary that we should have the words "or increase."

Mr. C. BATHURST

As regards the learned Attorney-General's criticism, I quite admit that there can be no objection to adding to the word "other" words which indicate that there may be additional moneys available for benefits similar to those provided under the Bill. But with all due deference to the Attorney-General, I am not quite sure that the words "or supplemental" would not be more accurate than "or increase." Strictly speaking, you are not increasing the benefits, but supplementing them from a similar source. However, if the Attorney-General says that the words "or increase" are more suitable I am prepared to move them.

The DEPUTY-CHAIRMAN (Mr. Maclean)

It would be more convenient if the hon. Member withdraws the Amendment which he has moved, and submits another Amendment in the form suggested.

Mr. C. BATHURST

I will adopt that course, Sir, and ask leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

Mr. C. BATHURST

I beg to move, in paragraph (a), to leave out the words "the additional or the increase" and to insert instead thereof the words "other or increase."

Mr. BOOTH

I think we are entitled to look at the Amendment closely and to consider it, for I believe it will have an effect that the hon. Member does not contemplate. The words have been sprung upon me at the moment, and I cannot take the responsibility of accepting them. What I am clear about is that the Amendment has nothing to do with Holloway societies.

Mr. C. BATHURST

The hon. Member does not understand them.

Mr. BOOTH

The hon. Member opposite, while I and others on this side were engaged on a part of this Bill, complained that we did not give him help, and now I may reply to him that I am not getting help from him. He will permit me to say that I do know something about Holloway societies. I have had interviews with the leading officials of those societies, I have spoken at a dozen Holloway society meetings, and I know the mind of the chief Holloway society in the country. I know that they will take advantage of the approved society section, and that they will avoid all these dangers by becoming an approved society. So far as I know that is the intention of the leaders and rank and file of the Holloway societies.

Mr. CASSEL

The word "additional" seems to me to be open to some objection, when you look at "additional benefit" as specifically defined in the second part of Schedule 4.

Mr. G. THORNE

In regard to the suggested Amendment I would like to learn from the Attorney-General what the effect of it would be. Do I understand that the effect of the Amendment now proposed would be that the friendly society might suggest any kind of benefits without any limitation whatever? I assumed that as it was originally moved by the Government there was a certain limitation.

Mr. FORSTER

I take it for granted that the other benefits of the friendly society would be strictly governed by their existing rules.

Sir RUFUS ISAACS

was understood to assent.

Mr. POINTER

I do not quite understand what is the response of the Attorney-General to the question.

Sir RUFUS ISAACS

I assented to what was said by the hon. Member.

Mr. POINTER

Will it be possible for any society to use the funds so released for death benefits? I did not think that that was contemplated.

Sir RUFUS ISAACS

There are Amendments which raise this question subsequently.

Mr. BOOTH

Those are Amendments to the existing Clause which has been cut out, and I presume these would be ruled out of order.

Sir RUFUS ISAACS

I will deal with the question now. Assuming that a society can now deal with death benefits, there is no reason why it should not do so in the same way under its own rules and its own scheme, provided it in no way impinges on the Government scheme. What we make clear is that no part of the Government money can be used for death benefits, but it was never intended to include, and nobody suggested that we should include, in the Bill any restriction on a society which has accumulated funds for funeral benefits or death benefits to pay increased benefit by way of addition to the funeral benefit. You may in accordance with the rules of the society, if they include funeral benefits, increase the funeral benefits if you have funds available for that purpose.

Mr. C. BATHURST

After the criticism I think it is only fair to emphasise what the Attorney-General has said that this particular Clause does not deal with any part of the new national fund, but relates to moneys over which they have entire control to-day. It is one of the conditions of the membership of these societies that those benefits shall be provided, and you are practically tearing up an existing contract if you say it is impossible in the future to apply the existing funds in the manner in which they have been applied in the past.

Mr. POINTER

It did appear to me that there was something in the argument that the surplus could be used outside the original intention of the Act.

Sir RUFUS ISAACS

I quite appreciate what is in my hon. Friend's mind, but what we say in regard to it is that no part of the Government money shall be used for the purpose. We have always said that a society shall be able to use the money set free for the purpose of giving additional benefits.

Mr. POINTER

They were strictly defined, and there was no mention of death benefits.

Sir RUFUS ISAACS

No, I think the hon. Member for once is mistaken. The additional benefits referred to before are not the benefits under this Clause; they are the benefits which are to be given if you have a surplus after valuation. Of that we certainly say you cannot distribute it in death benefits, because that money arises from the State scheme and cannot be applied in any other scheme. That is a different matter.

Amendment agreed to.

Mr. TYSON WILSON

I beg to move, in paragraph (iii.) of the proposed Amendment, after the word "scheme" ["any scheme when"], to insert the words "adopted by a society or branch of a society by a vote of the members taken in accordance with its rules and."

This Amendment will make it clear that any scheme adopted must be adopted in accordance with the rules of the society voted on by the members. A number of members of the friendly societies are under the impression that their rules are going to be altered without the members being consulted at all. We ought, I think, make it quite clear that before any scheme is adopted a vote must be taken.

Sir RUFUS ISAACS

I do not pledge myself to take this exact form of words hereafter, but I will accept them provisionally. I have not had time to look at them. I know what the intention of the hon. Member is in moving them, and it accords entirely with the view that has been expressed by the Government. I accept the words, reserving to myself the right to put them in slightly different language on Report stage.

Amendment to the proposed Amendment agreed to.

Mr. HOHLER

I beg to move, at the end of Sub-section (4) of the proposed Amendment, to insert the words "and the contributions paid by them under Clause 36 shall be applied in satisfaction or in part satisfaction of the sums otherwise payable by them to their friendly society."

I gather that it is the cleat intention of the Chancellor of the Exchequer by this Section of his Amendment to give the benefit to soldiers, sailors, and marines in regard to the funds they contribute under Clause 36. This Amendment appears to be necessary, otherwise I can- not see that soldiers, marines, and sailors will get any benefit at all from the proposal. Under Clause 36 they can, in fact, receive no benefit except maternity benefit. Therefore, there is 1½d. with which we wish to deal. As far as I can see, the only way in which that money can be applied to their benefit is to enable the friendly societies of which these men happen to be members to apply the 1½d. in reduction of the contribution which they would otherwise pay. As the Clause stands, the men to whom I refer cannot benefit under any scheme for increasing or altering benefits or for continuing, abolishing, or reducing contributions. The only way in which their money can be applied for their benefit is that suggested in my Amendment.

Sir RUFUS ISAACS

I do not see how this Amendment can be accepted, although I agree with a good deal of what, has fallen from the hon. Member. The object of the insertion of this paragraph is to protect the seamen, marines, and soldiers who are already and have been members of approved societies. We do that quite plainly by the words used. The argument of the hon. Member proceeds on the basis that it is impossible for a seaman or marine or soldier under any circumstances to receive any benefit other than the benefits provided under Clause 36.

Mr. HOHLER

Maternity benefit is the only one.

Sir RUFUS ISAACS

That leaves out of account that any one of these persons may cease to be in the Service, and would then be entitled to benefits according to the grade in which he found himself under the scheme provided by the registered society. If we were to do what the hon. Member suggests we should shut out such a man entirely. Assume that a man is a soldier and subsequently leaves the Service; he would in the ordinary course come on the approved society in respect of sickness or disablement benefit. The scheme of the society may provide for increased benefits of that kind. I cannot understand why you should shut out such a man from getting the benefits of those increases. It is to his interest that you should not do it. We want to safeguard the rights of these men, and I suggest that we have done it adequately, bearing in mind, as we must, that the scheme is subject to the approval of the Registrar, whose duty it would be to see that these persons are fairly dealt with.

Mr. HOHLER

I do not follow the argument of the Attorney-General at all. The schemes referred to under this Clause deal simply with the existing funds of friendly societies. If when the Bill passes the soldier has any right in regard to those funds that right will be reserved by this Clause. That is all that this Clause does. Independently of this Clause you have made the soldier an employed person. Under Clause 36 the contribution of the Crown is 1½d., and the man's contribution is 1$d., but the man can receive no benefit whatsoever, whilst he is in the Service, except maternity benefit. What happens to his 1½d.? Nobody can suggest that it is the properly apportioned sum for maternity benefit in regard to a young fellow who in all probability will be between the ages of sixteen and thirty.

What will happen to his 1½d. I want provision made that this 1½d. shall be applied for his benefit, and the only way I that I can see that it can be applied for his benefit is in the reduction of the contributions he has to pay to his friendly society. Otherwise you are getting his 1$d., and nothing is done for it. This 1½d. should be paid over to the friendly societies or credited to them. They will never be credited with it in regard to his position under the Bill, and as a member insured under the Bill. He, therefore, can receive no benefits except maternity benefit. The moment he

ceases to be in the Service you have his reserve fund, and he continues under the Bill to pay his 4d. towards the total of 9d. What will be his position in respect to this 1½d.? The Crown cannot propose-to get it to be paid over to the friendly society on his behalf. They cannot apply for it for his friendly society, qua friendly society. It cannot be applied for his benefit qua a person insured under the Bill. I, therefore, say that the only way it can be applied is in reduction of his contribution to his friendly society, so as to secure to him from his friendly society the benefits which this Bill denies him. What I suggest would be distinctly to his benefit and would interfere with no right that he has got when he ceases to be a member of His Majesty's forces. I cannot follow the arguments of the Attorney-General, and I shall press this Amendment.

Colonel YATE

I do not think that there would be 4 or 5 per cent. who will get the maternity benefit. The soldier serves, say his seven years, from eighteen to twenty-five, and not many get married. Therefore, if something is not done for these men as suggested, they will get no possible benefit for their 1½d.

Question put, "That those words be there inserted in the proposed Amendment, as amended."

The Committee divided: Ayes, 47; Noes, 143.

Division No. 380.]	AYES.	[2.27 p.m.
Anstruther-Gray, Major William	Fell, Arthur	Mason, James F. (Windsor)
Ashley, Wilfrid W.	Fetherstonhaugh, Godfrey	Newman, John R. P.
Baird, J. L.	Fletcher, John Samuel (Hampstead)	Orde-Powlett, Hon. W. G. A.
Banbury, Sir Frederick George	Gastrell, Major W. Houghton	Paget, Almeric Hugh
Barrie, H. T. (Londonderry, N.)	Goldman, Charles Sydney	Pease, Herbert Pike (Darlington)
Bathurst, Charles (Wilts, Wilton)	Goldsmith, Frank	Peel, Hon. W. R. W. (Taunton)
Beckett, Hon. Gervase	Goulding, Edward Alfred	Perkins, Walter Frank
Benn, Ion Hamilton (Greenwich)	Gretton, John	Sanders, Robert Arthur
Beresford, Lord Charles	Henderson, Major H. (Berkshire)	Stanley, Major Hon. G. F. (Preston)
Bigland, Alfred	Hoare, Samuel John Gurney	Talbot, Lord Edmund
Boyton, James	Hope, James Fitzalan (Sheffield)	Thynne, Lord Alexander
Bridgeman, W. Clive	Houston, Robert Paterson	Valentia, Viscount
Carlile, Sir Edward Hildred	Hunt, Rowland	Ward, A. S. (Herts, Watford)
Cassel, Felix	Ingleby, Holcombe
Cautley, Henry Strother	Kimber, Sir Henry	TELLERS FOR THE AYES.—
Craig, Norman (Kent, Thanet)	Lawson, Hon. H. (T. H'mts., Mile End)	Mr. Hohler and Colonel Yate.
Croft, Henry Page	M'Mordie, Robert
NOES.
Abraham, William (Dublin Harbour)	Bowerman, C. W.	Cotton, William Francis
Acland, Francis Dyke	Brady, Patrick Joseph	Crooks, William
Adamson, William	Brunner, John F. L.	Crumley, Patrick
Ainsworth, John Stirling	Bryce, J. Annan	Davies, Timothy (Lincs., Louth)
Allen, Charles Peter (Stroud)	Byles, Sir William Pollard	Dawes, James Arthur
Anderson, Andrew Macbeth	Cameron, Robert	Donelan, Anthony Charles
Baker, H. T. (Accrington)	Carr-Gomm, H. W.	Doris, William
Barnes, G. N.	Chancellor, Henry George	Duffy, William
Barran, Sir J. N. (Hawick)	Clough, William	Edwards, Sir Francis (Radnor)
Beck, Arthur Cecil	Clynes, John R.	Edwards, John Hugh (Glamorgan, Mid)
Benn, W. W. (T. Hmts., St. George)	Compton-Rickett, Rt. Hon. Sir J.	Elibank, Rt. Hon. Master of
Boland, John Plus	Condon, Thomas Joseph	Farrell, James Patrick
Ferens, Thomas Robinson	Lambert, Richard (Wilts, Cricklade)	Pointer, Joseph
Ffrench, Peter	Lardner, James Carrige Rushe	Ponsonby, Arthur A. W. H.
Fiennes, Hon Eustace Edward	Lawson, Sir W. (Cumb'rid, Cockerm'th)	Price, C. E. (Edinburgh, Central)
France, G. A.	Leach, Charles	Pringle, William M. R.
George, Rt. Hon. D. Lloyd	Lundon, Thomas	Radford, George Heynes
Glanville, Harold James	Macdonald, J. R. (Leicester)	Reddy, Michael
Goddard, Sir Daniel Ford	Macdonald, J. M. (Falkirk Burghs)	Richardson, Albion (Peckham)
Goldstone, Frank	McGhee, Richard	Richardson, Thomas (Whitehaven)
Greenwood, Hamar (Sunderland)	Macnamara, Rt. Hon. Dr. T. J.	Robertson, Sir G. Scott (Bradford)
Greig, Colonel James William	Macpherson, James Ian	Roche, John (Galway, E.)
Guest, Hon. Frederick E. (Dorset, E.)	MacVeagh, Jeremiah	Rose, Sir Charles Day
Gwynn, Stephen Lucius (Galway)	M'Callum, John M.	Scanlan, Thomas
Hackett, John	McKenna, Rt. Hon. Reginald	Seely, Col. Rt. Hon. J. E. B.
Hancock, J. G.	M'Laren, F. W. S. (Lincs., Spalding)	Shortt, Edward
Harmsworth, Cecil (Luton, Beds.)	Masterman, C. F. G.	Simon, Sir John Allsebrook
Harvey, T. E. (Leeds, W.)	Meagher, Michael	Smith, H. B. Lees (Northampton)
Haslam, Lewis (Monmouth)	Meehan, Francis E. (Leitrim, N.)	Strauss, Edward A. (Southwark, W.)
Havelock-Allan, Sir Henry	Molteno, Percy Alport	Tennant, Harold John
Hayden, John Patrick	Mond, Sir Alfred	Thorne, G. R. (Wolverhampton)
Henderson, J. M. (Aberdeen, W.)	Mooney, John J.	Thorne, William (West Ham)
Herbert, Col. Sir Ivor	Morrell, Philip	Toulmin, Sir George
Higham, John Sharp	Morton, Alpheus Cleophas	Trevelyan, Charles Philips
Hinds, John	Munro, Robert	Ure, Rt. Hon. Alexander
Holt, Richard Durning	Murray, Captain Hon. Arthur C.	Walters, John Tudor
Hughes, Spencer Leigh	Nannetti, Joseph P.	Warner, Sir Thomas Courtenay
Isaacs, Rt. Hon. Sir Rufus	Nolan, Joseph	Wason, John Cathcart (Orkney)
Jardine, Sir John (Roxburghshire)	Norton, Captain Cecil W.	White, J. Dundas (Glas., Tradeston)
John, Edward Thomas	Nuttall, Harry	White, Sir Luke (Yorks, E. R.)
Jones, Sir D. Brynmor (Swansea)	O'Brien, Patrick (Kilkenny)	Whitehouse, John Howard
Jones, Leif Stratten (Notts, Rushcliffe)	O'Connor, John (Kildare, N.)	Wilson, Rt. Hon. J. W. (Worcs., N.)
Jones, William (Carnarvonshire)	O'Dowd, John	Wilson, W. T. (Westhoughton)
Jowett, Frederick William	O'Malley, William	Wood, Rt. Hon. T. McKinnon (Glasgow)
Joyce, Michael	O'Shaughnessy, P. J.	Yoxall, Sir James Henry
Kelly, Edward	Palmer, Godfrey Mark
Kennedy, Vincent Paul	Parker, James (Hallfax)	TELLERS FOR THE NOES.—
Kilbride, Denis	Pearce, William (Limehouse)	Mr. Gulland and Mr. Dudley Ward.
King, Joseph (Somerset, North)	Pease, Rt. Hon. Joseph A. (Rotherham)

Question, "That the Clause, as amended, stand part of the Bill," put, and agreed to.

Mr. CASSEL

I beg to move, at end of Sub-section (4), of the Chancellor of the Exchequer's proposed Amendment, to insert (5) the expression "existing members" in this Section shall mean persons who are members at the passing of this Act.

The expression "existing members" is vague and indefinite, and it might mean persons who were members at the passing of the Act, or persons who were members at the commencement of the Act, or who had joined on the date of the scheme. A very large number of people probably will join between the date of the passing of the Act and the commencement of the Act, and again between the commencement of the Act and the date of the scheme. I understand the Attorney-General is willing to consider the whole question before Report stage, and if he will give me an undertaking that if he finds it necessary to introduce words dealing with this point I shall be prepared to withdraw this Amendment.

Sir RUFUS ISAACS

As I said in the earlier part of the Debate I quite agree it is desirable to introduce words that will remove all possibility of doubt. I have already stated I will consider the best form of words in order to carry out the obvious intention of the Committee. The only difficulty I have in accepting the words proposed now is that I am not quite sure they do not go a little too far, but I will consider the whole matter and see that the whole object of the Committee is carried out, which is to protect members who are at present members and paying their money, and to prevent them losing by others coming in at the last moment and getting the same benefits as the existing members.

Mr. CASSEL

In view of the statement of the right hon. and learned Gentleman I ask leave to withdraw my Amendment.

Amendment to proposed Amendment, by leave, withdrawn.

Mr. C. BATHURST

Before we leave this Amendment of the Chancellor of the Exchequer I should like to ask the learned Attorney-General what exactly is the meaning of Sub-section (2). It is couched in most puzzling language, and reads, This Section shall apply to branches of registered societies in like manner as to societies: Provided that a society with branches may, if it so desires, submit a scheme applicable to all its branches, and it shall be competent for the society to provide by its scheme for the application of the whole or any part of any sums so set free towards the discharge of any deficiencies in the other branches which may be found to exist on such actuarial valuation as aforesaid. The proviso starts by referring to a scheme applicable to all the branches, and it goes on to indicate that there may be other branches. It is perfectly clear that as a matter of drafting it is somewhat unsatisfactory. I have been trying to get at the meaning of it this half-hour, and I take it that it means a society may probably overlook the existence of some of its own branches. That is the only intelligible interpretation, and if so the word "alleged" or "supposed" would have to be introduced after the words "all its" and before the word "branches." It is not good English, and it is extremely bad drafting. I hope the Attorney-General will give some explanation, because the Sub-section in its present form conveys no intelligible meaning.

Sir RUFUS ISAACS

I am a little surprised that the hon. Gentleman had to devote so much time to try and understand this paragraph. I am quite sure he read this Amendment long before the last half-hour, and it must have conveyed something to him or else his acute mind would have sought to have it rectified earlier. In the last half-hour he has been addressing himself to what, according to him, is a very difficult puzzle. I suggest it is no conundrum, and that it is quite easy of explanation. It means the society has branches, and if it likes it may submit a scheme to apply to all branches of the society, and under that scheme it may, if it likes, and if the society so wishes, use the money it sets free to make up the deficiency of some branches although all the branches are not in difficulty. I am not concerned so much with the drafting as I am with making the meaning clear.

Mr. C. BATHURST

If that is so, it is perfectly clear the words "the other" should be "some." The antithesis of "other" is "some," and "some" is clearly the word that ought to be substituted for "other." As it is too late now to move an Amendment, may I ask that the word "some" be introduced on Report.

The CHAIRMAN

That disposes of the Amendments that were in order on Clause 55, and the Question now is, "That the Clause, as amended, stand part of the Bill."

Mr. JAMES HOPE

On a point of Order. Is my Amendment about the date of its operation out of order?

The CHAIRMAN

Yes, because it has no effective meaning.

Mr. JAMES HOPE

I was at the moment going to you, Mr. Whitley, with an addition that would have made it effective.

The CHAIRMAN

The hon. Member was a little too late, as I had already put the Question.

Mr. JAMES HOPE

Under this proposal the societies will be put into the difficult position of having to prepare their schemes immediately. I think it should be made clear that some breathing space ought to be allowed to them to prepare their schemes, and there should not be this frightful rush with no latitude left to them to turn round.

Sir RUFUS ISAACS

I agree that there must be some latitude and some elasticity. May I point out that the rules have to be submitted to the society and to the Registrar. The Registrar might refuse the scheme, and then there would have to be another scheme prepared. My hon. Friend says he wants an extended time. I do not want to limit the time allowed in the Clause. I agree it must be a reasonable time having regard to all the circumstances, but there is nothing in this Clause which would militate in the slightest degree against that. I think it-would be inadvisable to insert other words when we cannot foresee how long the society will require.

Mr. JAMES HOPE

Will the Insurance Commissioners issue instructions or is it left to their discretion to name a time?

Sir RUFUS ISAACS

It is left to the Registrar of Friendly Societies.