§ (1) Any society, that is to say, any body of persons, corporate or unincorporate (not being a branch of another such body), registered or established under any Act of 308 Parliament, which gives such security as is required to be given under this part of this Act, and otherwise complies with the requirements of this Act relating to approved societies, may be approved by the Insurance Commissioners, and if so approved shall be an approved society for the purposes of this part of this Act.
§ (2) No society shall receive the approval of the Insurance Commissioners unless it satisfies the following conditions:—
- (i) It must have at least ten thousand members, being insured persons;
- (ii) It must be precluded by its constitution from distributing any of its funds otherwise than by way of benefits (whether benefits under this Act or not) amongst its members;
- (iii) Its affairs must be subject to the absolute control of its members;
- (iv) Its constitution must provide for the election of all its committees, representatives, and officers by its members.
§ (3) A society may apply for approval at any time before or after the commencement of this Act, and a society with less than ten thousand members being insured persons which otherwise fulfils the requirements of this Section may be approved by the Insurance Commissioners conditionally upon its having the requisite number of such members within such time as the Insurance Commissioners may allow.
§ The CHANCELLOR of the EXCHEQUER (Mr. Lloyd George)I beg to move the omission of Paragraph (1), which deals with small societies. This is done with the view of making the way clear for a new Clause, which has already been put on the Paper, and which will deal with small societies. This would, I think, be an opportune moment for reviewing the whole position with regard to small societies and for a general discussion on the proposals of the Government affecting them. There are in this country 6,093 so registered societies with less than 1,000 members. It is a great mistake to assume that, under the proposals of this Bill, these societies will be extinguished. That is not the proposal at all. Our proposal simply involves forcing these societies, for the purposes of the finance of this Bill, to federate with similar societies, either in the same county or kindred societies elsewhere. It is very important that that should be clearly understood. It may be asked, why interfere with the small societies at all? Why not recognise 309 them and treat them as approved societies without compelling them to federate? I think the Committee is entitled to have he reasons of the Government for compelling something in the nature of pooling among these societies. The main reason is to be found in the insolvency of many of them, and I would remind the Committee of the fact that during the Old Age Pensions Debate the right hon. Gentleman the Member for the Stroud Division called attention to the fact that there were hundreds and thousands of men scattered all over the country who had once been members of little rural societies and who, having paid all their lives into those societies, now, at the end of their days, find themselves without any provision at all, because the societies have been wound up. Two-thirds of these societies are now insolvent, and it is a more or less acknowledged insolvency—an insolvency admitted on their own returns. There is no really efficient method of ascertaining if the valuations they send in are sound, and we have to accept their valuation of their own securities. I venture to state, without any fear of reasonable contradiction by anybody who knows anything about them, that there are a good many more of them insolvent, because they are returning their securities—especially their mortgages on property—at full value, whereas a good many of them will not realise anything like the amount of money advanced.
§ Viscount HELMSLEYHear, hear.
§ Mr. LLOYD GEORGEThat is rather a challenging cheer. I think I know what the Noble Lord has in his mind, but the fact remains that when you come to advance money in rural districts under the conditions in which small societies do so the amount of care is not exercised in the valuation that should be in these money matters. These societies, to the extent of two-thirds of their number, admit their insolvency, and I propose to quote a few figures so that hon. Members may realise what it means. Take the case of the Oddfellows: Their reserve funds—I am dealing with the adult, and not the juvenile membership—amounts to £16 6s. per member throughout the country. The Foresters' reserve amounts to £13, and that of the Hearts of Oak to about £12 per member. What about the small societies? In a very few counties they have a fairly high average. The highest is in Hertfordshire, where it is about £16; and in Essex it is £14 16s., and in Buckinghamshire £11 10s. 310 But when you come to Lancashire, where you have 1,031 small societies, the average reserve fund per member is £2 19s., in Yorkshire £5 3s., Cheshire £2 5s., Monmouth £2 5s., Northumberland £2 14s., Surrey £3, Cumberland and Middlesex £3 12s.
§ Mr. C. E. PRICEWhat about Scotland?
§ Mr. LLOYD GEORGEI will not deal with Scotland now, but this I can tell my hon. Friend, that the average in Scotland is just £1 per head better than the English average. That is rather what you would expect, but it is only £1.
§ Mr. LLOYD GEORGEThere they are bad. [An HON. MEMBER: "What about Wales?"] All I can say about Wales is that it is a little better than Ireland. England is £6, Scotland £7. Scotland comes higher, but let me point out that it is a considerably low average, and that the average of small societies is less than half the Oddfellows. Wales is £4, Ireland is £3.
§ Mr. FORSTERI suppose these are figures for the societies having a membership of less than 1,000?
§ Mr. LLOYD GEORGEYes, they are under the 1,000. As a matter of fact most of them are under the 1,000, but there may be a few over the 1,000, but not very much over. The real problem is the society of under 1,000. These are the very small societies. That is the position. Of course the average reserve per member is not conclusive, because you have to take into account how long the society has been in existence, what the contribution is, and matters of that kind, and I am only saying that there is a prima facie case for investigation. I am going to carry it further than that. If I could not do that it would not be conclusive. I do carry it further, but I do not put it that these figures are quite conclusive. During the last twenty or thirty years a considerable number of these societies have become bankrupt. The other day I had a diagram which I should have liked Members of the Committee to see. It was a very striking diagram, showing the reason why you can run these small societies for thirty or forty years without running up against bankruptcy. It is because, as a rule, men join these societies when they are young. It does not pay old men to join because the 311 premium is more or less double. When you start a society it is more or less young people who will join. For the first twenty or thirty years of a man's life after sixteen, the number of weeks of illness in the course of the year is very low. The real burden comes after a man has attained the age of fifty and goes on to sixty. Then there is a very rapid rise. Societies of that kind can go on for a very long time without any one of them becoming insolvent. The people who were young thirty or forty years before begin to be old people. Then the funds come down, the society cannot realise their investments, and bankruptcy follows. Some 2,532 of these societies have a valuation. This valuation is more or less their own valuation. On their own valuation how does the matter stand? Out of 2,532 societies only 845 are solvent, the number of their members being 543,687. The number with a deficiency is 1,687, the number of members being over a million. The aggregate deficiency is just under four millions. That is the position of the bulk of the small societies in Great Britain and Ireland at the present moment. What are the reasons for this? One reason is the reason I have indicated, that they never took into account when they first started that the real burden would come upon them thirty or forty years hence, and they simply used the experience of perhaps five or ten years as if that were really sufficient. Their benefits are quite out of proportion to what they can really afford to pay. They have started with a small premium at a time when there were no tables showing the average of sickness, when there was no information which would enable actuaries to calculate what premium would affect that benefit. They have gone on with a very low premium and with high benefits, and instead of getting an actuary to put their affairs right, they have gone on until their funds have become so low that they had nothing left to them except to join some affiliated order or winding up altogether and distributing what funds they had. Employing an actuary for the purpose would be a very expensive operation, and you cannot get a small society to pay a high fee to an actuary to calculate its risks and chances without it constituting a very considerable burden upon the fund. That is the reason why, amongst others, they have failed. There has also been inefficient management, misappropriation of funds, injudicious investment and inefficient valuation. All of these things 312 are more or less corrected under the Bill, so that from this point of view the position of the small societies will be considerably strengthened under the Bill. Most of the funds would be invested by the Government, so there would be no money lost for that reason.
§ Mr. JOYNSON-HICKSIn the Post Office?
§ 4.0 P.M.
§ Mr. LLOYD GEORGEAt any rate there will be no loss to the same extent. Of course, there will be fluctuations on the market, which you must always take into account. With regard to management there would be some sort of check, and with regard to valuation there would also be some sort of check. The greatest cause of weakness of any of these small societies is this, that they have had to rely on their own resources entirely in times of exceptional strain, and, of course, a time of exceptional strain comes upon every society in its turn. Take an epidemic. There is a run upon a society during the time of that illness, and many societies in this country have been crippled purely and simply because they have had an epidemic in the district which has produced a run upon the society and has exhausted its funds. Another cause is unemployment. If there is very considerable unemployment in a district, of course, under the present system, there would be lapses, and the men would go out and make no further payment afterwards, and therefore the society is left very largely with old people instead of fresh blood coming in. The same thing will apply even under the Bill. These two causes still remain under the Bill. The Bill cannot cure that. There will always be a strain which will come at exceptional times of sickness and bad trade, because the amount of arrears which would be excused under the Bill undoubtedly would be a great weakness to the finances of the society, and therefore the small society has not the same chance of weathering the trouble as it would if it were a branch of a larger society which spreads its membership over a wider area. It is a common remark of valuers of these small societies—anyone who has taken the trouble to read some of the valuations will find it for himself—that the membership is so small as to make it almost impossible to forecast with any certainty what the future liabilities in regard to sickness will be. What about the Bill? It is suggested that we are killing the small societies. Quite the reverse. The 313 Bill will revive and re-establish the small society. It will put it on a firmer basis, and many a small society which is insolvent at present will start next year on a basis of absolute solvency, granting benefits which, in some cases, are greater than they are giving at present.
What is it that it is proposed to do? It simply is proposed that these small societies should be grouped together for the purpose of administering this Bill. There are three methods of grouping. One is that they should form an affiliated society with branches, or join one of the affiliated orders. They can either join the affiliated orders or form an affiliated society themselves and make each of the little village societies a branch of that affiliation. The second method is that they should join kindred societies in other parts of the country. For instance, if they are trade societies—and I observe that trade unions have suggested this—they may be affiliated to other and kindred unions throughout the country and form a kind of federation of small unions. If that were done it would be a source of very great strength, financial and otherwise. It need not be confined to trade unions. There are the denominational societies, Church of England, Catholic, Wesleyan and others, of which there are a good many in the country. They are very good societies and very well managed, and they find themselves so small that they could not be recognised, standing alone and independently under the Bill. All they have to do is to affiliate with other societies of the same character, conducting the same kind of business under the same auspices. The third method of grouping suggested by the Government is the county group. There are two things with regard to the county group that I should like members to firmly establish in their minds. With regard to the first two methods of affiliation they are purely voluntary. They enter into their own arrangements with other societies of the same kind. They make their own bargains and make their own conditions and then the Government simply recognises the whole as an approved society under the Bill. With regard to the county group there are two or three things that the Committee will have to get firmly into its mind. There will be no interference with funds already accumulated by each of the societies. I find this apprehension in the minds of the prosperous small societies. They say, "Here we are, we have £15 per member set on one side." I 314 have only given averages. In Lancashire there are very strong societies and very weak societies. The strong societies say, "Here we have £20 per member. Are we to distribute our surplus, are we to put it into the common stock with a society which so mismanages that it has only 30s.?"
The first thing I want to get into the mind of the society is this. We do not touch a penny of their accumulated funds. There is no interference with any surplus except that which is accumulated under the Bill. The second thing is that there is no interference with their business except the business which they do under this Bill. If they like to give other benefits outside, if in addition to the 4d. charged under the Bill they like to charge another 3d. for other purposes, funeral benefits, for instance, or to increase the benefits they can give to their members, we have no concern with that. It is their business and we do not interfere with it. The third point is that we are only dealing with the surplus and the deficiency in respect of the 4d. charge and the 3d. and 2d. contributed towards it. What do we propose there? The first thing that I want to make clear is that the inducement which the society now has to manage well in order to increase its surplus will still continue. What the opponents of grouping are afraid of is that in future there will be no inducement for a society to manage well at all, because they will say "The surplus will all go into the county group. Our surplus will go and be wasted upon the society in the next village which is managed very badly compared with ours, and there is no inducement for us at all." I want to show quite clearly how it works, in order to get that notion out of their minds. What will happen will be this. Under the county grouping all those who have not joined under the first head of affiliation which I have mentioned will form a county group. Half of the surpluses of that county group at the end of the quinquennial valuation will be pooled—the surplus of the working contributions, and nothing else, not the surplus which they make on their ordinary business. If there is a deficiency you then make up that deficiency in respect of another society, unless it is due to mismanagement. That is very important. Supposing a society has a deficiency because of a heavy epidemic in the district, or because there is great unemployment, and members have been unable to pay more than about forty-eight weeks' contributions in the year, or even less, the 315 local health committee will act purely as a clearing house. It does not control and cannot manage, but simply distributes the amount which has been pooled. They make up that deficiency. If it is attributable to mismanagement the local health committee, which is perfectly impartial in the matter, will say, "This deficiency is due entirely to your own mismanagement and you will have to make it up in your own way, either by a levy or by reducing your benefits until the next quinquennial valuation comes round." If there is a surplus, and after that there will undoubtedly be, what happens? That surplus is distributed among the societies in the proportion of what they have paid. That is the inducement to the small societies. They would begin afresh until the next valuation. They begin square. The local health committee does not keep the money; it simply, at the end of the valuation, passes on what remains to the small society.
§ Sir RANDOLF BAKERNone of the surplus goes outside the county group?
§ Mr. LLOYD GEORGENo, not a penny will go outside the group; it will all be spent within the area. If the half of the surplus is not enough, there are only two ways of dealing with it—an increase of levy or an abatement of benefits.
§ Mr. LLOYD GEORGENo. If they like to make it up by an increased levy they can do it. That is the levy which we impose upon the society.
§ Mr. AUSTEN CHAMBERLAINOn the individual society?
§ Mr. LLOYD GEORGEYes, not on the group. It is that society which has failed through mismanagement.
§ Mr. TUDOR WALTERSIt would not apply in the case of an epidemic?
§ Mr. LLOYD GEORGENo. The whole object really of grouping is that you should be able to back up a society which has an unusual drain upon its funds because of epidemic or of unemployment. You spread the risks, and by that means average them.
Mr. WORTHINGTON-EVANSIs not the levy compulsory on the members, and will not their employers be notified of the extra amount which will be deducted from wages?
§ Mr. LLOYD GEORGENo, they can have reduced benefits if they like.
Mr. WORTHINGTON-EVANSIf a society determines to have a levy, is it not compulsory then upon its members, and are not its members obliged to have perhaps a larger sum deducted from their wages?
§ Mr. LLOYD GEORGENo.
§ Mr. AMERYClause 31 says that where the rules provide for a levy they must give "notice in the prescribed manner to the employer of such member requiring him to pay the amount of the levy, and upon such notice being given, such amount shall be payable as if it were part of the contribution to be made by the employer on behalf of the member."
Does not that clearly indicate that there is to be a levy?
§ Mr. LLOYD GEORGEI thought the point put to me was whether that is to be compulsorily imposed upon them, or whether it is to be voluntary. It is a purely voluntary levy they impose. The method of collection is another matter. What I wish to say is that the societies have got the option of either reducing benefit or of making a levy. Once a society decides to make a levy, it is compulsory in the sense—[An HON. MEMBER: "On all members?"] Certainly on all members as long as they remain members of the society. One member will not be able to say that he will pay 5d., and another that he will pay 4d.
An HON. MEMBERIn the case of small societies which are to be grouped together, what is the character of the central authority?
§ Mr. LLOYD GEORGEI thought I made that clear. It will be the local health committee, though I would point out there are two alternatives. You may take the local health committee, which might be expected to act impartially, or you could have a committee elected by the societies. We have adopted for the moment the method of making the local health committee the central authority for the reason that it will deal impartially and fairly with the society. Otherwise a society with a deficiency might be able to control the whole of the central committee. The local health committee being impartial would act fairly between the 317 various societies. [An HON. MEMBER: "How is the opinion of the friendly societies to be found out?"] The hon. Gentleman wants to know how you are to find out whether a society would prefer a levy or reduced benefits. That would be found out in the usual way. It would be done by the society itself. A society decides, it may be, to impose a levy of ½d., or it says, "No, we prefer reducing the benefit for a time." The society as a whole would decide in such a case according to its own rule with regard to decreasing benefit or imposing a levy. If the hon. Gentleman will look into this matter, he will find that constantly an increased levy is imposed upon members of societies in districts where there is a deficiency. It occurred the other day in a society of Oddfellows in a mining district. This is what happened. In a mining district there was a great deficiency, because they were paying twice over—because they were paying sick pay in compensation cases. The central council gave them the option of reducing the benefit or increasing the levy, and they said they would take half reduced benefits and half increased levy. [An HON. MEMBER: "What will happen if they do not adopt that course?"] If they do not choose to comply with the conditions of the Bill they cannot get the benefit. They can go on in their own way if they like; we do not wipe out the society. I think I have dealt with most of the points. May I just point out this? It is not merely here it has been discovered that to depend entirely on these independent small societies is a very great risk for those who join them unless they are able to spread the risks. They discovered the same thing in Germany, and this is the report of the German Government on small societies:—
Sickness societies of too small membership have not in general sufficient security, and the fact that certain branch societies have proved hitherto efficient is no argument to the contrary. When years of excessive sickness take place, when epidemics occur, or when experienced, discreet and capable officials retire, there is no guarantee that the condition of these societies will not undergo disastrous change. Such societies at the best may be said to live from hand-to-mouth.That is the experience of German sick insurance after twenty or thirty years' working They came to the conclusion that the societies must be compelled to group together for the purpose of the strong enabling the weak to tide over temporary difficulty. We invite suggestions and criticism in regard to our particular plan. I do hope that the House will, at any rate, accept the principle of grouping. It does not interfere in the 318 slightest degree with the power of individual self-government of any one of these small societies. The local health committee have no right to interfere with the management. When there is a deficiency, all they can do is to say, "This is due to your own mismanagement, and therefore you must make it up yourselves." The local health committee have only the power of compeling them to do what they do now, and the only difference will be that in future where the deficiency is due to the misfortune of a society, there will be a county fund they can draw upon to make up the deficiency. I think that is much fairer, and that is the only way to keep small societies from constant insolvency as the result of which hundreds of thousands of people are thrown on their own resources.
§ Mr. LLOYD GEORGEIt is made up by surpluses on the working of the societies. If there is a surplus after paying all the benefits under the Bill, the fund is made up out of that surplus to the extent of half of the surplus. I hope that is clear to the hon. Gentleman. I move this Amendment now with a view later on of moving other Amendments which appear on the Paper.
Sir GILBERT PARKERWill the local health committee be empowered under the Bill to make a regular inquiry? That is to say, will there be regulations under which they will act to enforce inquiry?
§ Mr. LLOYD GEORGEWell, they must have certain powers or it would be quite impossible to discover the position a society was in. Of course, there will be representations from other societies. They will object to their surpluses going to make up a deficiency if they know that it is due to the mismanagement of a society.
§ The CHAIRMANThis is an Amendment to leave out the first paragraph, and it does not strictly involve the whole consideration of the new Clause on the Paper. I do not propose to rule too strictly on that point; but I would ask the Committee not to go into matters of argument, but to devote themselves to explanations and suggestions, because really the main discussion ought to be taken on the new Clause when we reach it. That is the second of the new Clauses on the Notice Paper.
§ Mr. H. W. FORSTERI think the figures which the Chancellor of the Exchequer gave to the Committee as to the number of small societies prove very conclusively how inadequately this question is going to be discussed. I hope that the ruling of the Chair will not be unduly strict in the matter of our Debate, be cause I think it would be impossible to make suggestions without argument. I hope that the right hon. Gentleman will receive many suggestions, and that they will be such as to induce him to change the number which he has fixed in the new Clause, namely, 5,000. Personally, I hope we may be able to persuade him to reduce that figure very substantially. The Chancellor of the Exchequer told us that under his proposed Amendment there were three methods of grouping. He suggested, in the first place, that small societies might join affiliated orders; and, secondly, that they might join kindred societies. It is in connection with this method of grouping that I should like to ask a question. He said that denominational societies would be able to avail themselves of this method. He pointed out that Church of England societies, in Kent, Sussex, and other parts of the country, might affiliate for the purpose of forming groups. I do not know if I shall be in order in referring to this. I am not sure that the terms of the Amendment have that effect. I think the terms of the Amendment—
§ Mr. LLOYD GEORGEI think I said the other day that we would have to introduce words to make that quite clear.
§ Mr. FORSTERI hope the right hon. Gentleman will pardon me if I do not preserve a very accurate recollection of everything he has said. I am encouraged to press the merits of a certain class of society, which really I think stands in a category by itself, and to ask the Chancellor of the Exchequer whether he would not allow kindred types of society to amalgamate. I can give you an instance. The Holloway societies, I believe, are most reluctant to avail themselves of the opportunity of affiliating with other kindred type societies, although every facility is being given to them under the Bill. I do not know whether they would be willing to affiliate with one another, but if they are I would like to ask the Chancellor whether or not he could not give them the opportunity of forming a group of their own. I was glad to hear the Chancellor of the Exchequer insist on the fact that this process of affiliation will be purely voluntary. 320 There will be no actual compulsion, as I understand, put upon these small societies to join one another and form groups. Although there is no actual compulsion, they will be faced with the probability of extinction unless they fall into line.
The Chancellor of the Exchequer painted a very dismal picture, and I do not suppose that he over-coloured it in any way, of the state of solvency of the small societies at the present time. I am afraid what he told us is only too true. One of my hon. Friends, if I heard his interruption aright, said that the Chancellor offered a very small inducement to the small societies that are solvent to affiliate with those societies that are not. If my hon. Friend had reflected he would have seen that the present condition of solvency has nothing to do with the position under the Bill. All societies will be solvent from the first day they start work under the Bill. How long they will continue to be solvent is quite another question, but on the first day on which they start work under the Bill I suppose that actuarialy they will be sound, sound to this extent at any rate, that for six months, while they receive contributions, they will have incurred no liability, or rather they will have to meet no claim. Bearing on the question of solvency, the right hon. Gentleman referred to an interesting diagram which he had prepared but was not able to show us at the moment. I am sorry for that, as I would have liked to see it, but I think it was shown to his audience at the Tabernacle.
§ Mr. LLOYD GEORGEIt is a better one than that.
§ Mr. FORSTERIs it more accurate?
§ Mr. LLOYD GEORGENo.
§ Mr. FORSTERIt has the same degree of accuracy, only it is more interesting to look at?
§ Mr. LLOYD GEORGEYes.
§ Mr. FORSTERPerhaps the right hon. Gentleman could give us the facts without the assistance of a diagram which we cannot see. There is one question which I think is very well worth the attention of the Committee; that is who is to be the judge of inefficient management in the case of societies that are penalised on that account? The Chancellor of the Exchequer suggested the management of the group, so far as the group comes under central management at all, shall lie in the hands of the local health committee. I am 321 not at all sure that the local health committee is not better than a committee of its own members, but I would like to think over this more carefully before expressing any decided opinion upon it. I am sure that difficulties must arise and very grave dissatisfaction will be felt when one of these small societies is found to be inefficient and is refused relief on account of inefficient management unless it has ample opportunity of stating its case before the authority that disqualifies it. I am not sure what opportunity a small society will have of defending itself before it is practically condemned by the central authority. The Chancellor of the Exchequer suggested that there might be an appeal from, the local health committee or the central governing group to the Insurance Commissioners. I think it very desirable that there should be an appeal of some kind. I think the Insurance Commission would be the best body to whom an appeal could be made. I think the Committee will realise that every society which is accused and punished and fined for bad management will feel a great sense of grievance unless it has some opportunity of stating its case very fully before the authority itself.
On those committees it is worth while to remember there will be representatives of the other classes of societies that are doing similar work. I am not sure that it will form a good or a fair tribunal for the judgment of this exceedingly difficult question as to whether a deficiency is due to bad management or bad luck. That is a matter which the Committee will have to consider very carefully before it comes to a definite decision upon it. There is one further question I should like to ask the right hon. Gentleman that is connected with what he told us is the real reason underlying the proposal which he now makes. Societies may be made insolvent by sheer bad luck through no fault of their own. Suppose that an epidemic is so widespread as to affect the surplus of the group as a whole. Suppose that as a result of the epidemic the group as a whole is inefficient will the right hon. Gentleman tell us what is to happen in that case, and whether the group as a whole is to consider the question of reduction of benefit, or is to go in for a levy? The contingency, I hope, will never arise, but it is one which we have to consider. Who is to decide which course they will pursue is a question which we are bound to ask, and which I think the Chancellor of the Exchequer is bound to take into considera- 322 tion. I notice a paragraph in the Amendments that the Insurance Commissioners may exempt from this section any society consisting of persons entitled to rights of superannuation or other fund established for the benefit of persons employed by one or more employers. This section shall not apply to any society to which such an exemption has been granted. I want the Chancellor of the Exchequer to tell me what is going to happen to that body of persons? If they are over 5,000 in number they become an approved society if they wish to become one, but if they are under 5,000 in number I cannot see what is going to happen there. Everybody has got to come into the Insurance scheme somehow or other. If they do not come in as an approved society I suppose the only way they can come in is under the provisions of this Clause. If they are exempted they do not come in. I want the Chancellor of the Exchequer to tell me what will happen.
§ Mr. LLOYD GEORGETo what society?
§ Mr. FORSTERI am not thinking of any particular society. I only want to know what is the meaning of these words.
§ Mr. LLOYD GEORGEThat must be Clause 19.
§ Mr. FORSTERI think it is put in to meet the case of Clause 19.
§ Mr. LLOYD GEORGEIt is under Clause 19.
§ Mr. FORSTERThen we shall have an opportunity of discussing it more fully under Clause 19. What I want to find out is what is the real effect of these words; what will happen to these people if they were exempted under this and were still under 5,000? The whole question is not free from difficulty. It is only another instance of the difficulty which I think is inseparable from calling to the aid of a compulsory scheme societies which are founded upon a purely voluntary basis. I think the difficulty is great. It has got to be faced, and there is not the least doubt that great hardships will arise in certain particular cases from the scheme as a whole. It must be our business to minimise the hardships as much as we can. I think we are bound to do all that is possible without sacrificing the solvency or the cogency of the scheme as a whole to preserve those small societies to which their members are so deeply and properly attached.
§ Mr. BECKI only want to ask my right hon. Friend one question. Personally I am quite confident as to the answer, but I should like to make it quite plain. As regards these small societies which shall be affiliated all through, do I understand my right hon. Friend to say that half the surplus will be left to them in any case and only the other half will go to the central fund?
§ Mr. LLOYD GEORGEYes.
Mr. WORTHINGTON-EVANSI did not think we were going to discuss the question of small societies to-day, but following the request of the right hon. Gentleman, I propose to ask him a few questions on the subject of what he said about the Bill and about small societies. He said that it had been stated that the Bill would kill small societies, and, again, on the other hand, that the Bill would improve the financial standing of small societies and give them new life, and enable them to go forward again. I think that he ought to distinguish between the Bill and the Amendments, because the Bill, as it stood, would undoubtedly, in my opinion, have killed the small societies in this way, that many could not come under the Bill because they would be unable to make up the number required by the Clause; and if they could not become approved societies, then their members would join other approved societies, and would not be able to continue in the small societies owing to the inability to pay a double set of contributions. Therefore the Bill itself, as it stood without the Amendments, would have had the effect of killing the small societies. The Chancellor of the Exchequer said "that only the State section of the small societies would have to be approved by affiliation under one of the methods that have been described." That is quite true. When the history of the small societies is considered, it really did mean the absorption of the great bulk of members of small societies into other approved societies, because there will be very few members of the small societies who will not be compulsorily insured persons. Practically only the old men would be left in the voluntary section; for young men, at all events, will be compelled to come in as compulsory insured persons, and they will be in the State section.
The Chancellor of the Exchequer, as a reason for stating that he understood the bulk of the small societies were insolvent, quoted, by way of comparison, a large 324 number of figures, which I submit are quite irrelevant. He gave the average cash value of the funds of the affiliated orders without regard to their liabilities. It is just as relevant to say that a man has got £100, but to forget to state that he owes £120, or that he only owes £20. In the one case he would be abundantly solvent, and in the other case he would be demonstrably insolvent. The method of the Chancellor of the Exchequer to demonstrate the solvency of the small societies seems to me to be beside the point. I do not mean to suggest that two-thirds of the small societies are in fact solvent. I have no means of judging those figures. But that argument must not be applied only to small societies. I take the county of Carmarthen, for which I have the figures. There are fifteen solvent branches of the Oddfellows in that county out of twenty-seven branches in the division. Take Gloucestershire, where there are seventeen branches that are solvent, and twenty-nine insolvent. I do not say that the Chancellor of the Exchequer wishes to depreciate the work done by small societies, but if you do use the figures in that way, it does lead members to think that they are in a specially bad way. You can quote figures just as good or just as bad of the affiliated orders. My real point is to get from the Chancellor of the Exchequer some statement as to whether the number of 5,000 could be altered in regard to small societies by an amendment of the Clause, because a number of small societies, I think 6,095, have 1,000 members or less. I remember an answer to a question which the right hon. Gentleman gave last July, I think it was, namely, that there were some 6,300 small societies under 10,000; so that really, apparently between 1,000 and 10,000, there are only 200 or 250 registered societies. I happen to know two of those. One is the Dunmow, and the other the Tendring Hundred Friendly Societies, both having over 1,000 members. They are abundantly solvent, and have been in existence for over seventy or eighty years. It is not a German experience of twenty years which the Chancellor of the Exchequer quoted: it is an English experience of seventy or eighty years. These two societies are extremely well managed. I believe there are a good many others in other parts of the country just as well managed and having above 1,000 members. It may be possible to say that a society which has only three or four 325 hundred members could not come under the Bill, but if you get a thousand members, I think that even the actuaries would agree that with a strong history such as those societies possess they ought to be left alone. If you wish to have a general rule, then I should suggest that where a society can prove that it is solvent and has carried on business for some time, it should be given some form of special exemption so that you do not group that society, with the large number of 1,000 members, simply because it does not come up to a larger figure.
§ Mr. LLOYD GEORGEHow many do you suggest?
Mr. WORTHINGTON-EVANSMy suggestion is that the number could be reduced to 500. I know that is getting near the arguable line, but a thousand at any rate is a good round figure, and I believe is a useful number. There is the Saffron-Walden Society, a constituency represented by the hon. Member opposite (Mr. Beck), and that society has been longer there than has the hon. Member. It has been in existence for sixty or seventy years; it numbers something like 400 members, and its degree of solvency is 30s. in the £. They could really be safely left above the line and to carry on their business in future as successfully as in former years. I suggest that there might be some elasticity which would allow a society like that, with even less than a thousand members, to stand by itself. I suggest that a society might apply to the Commissioners and might show that it was solvent and that it had carried on business well and properly, and then be allowed to stand by itself. If necessary, its position might be looked at again in three or five years, and there might even be the condition that in five years, if its number was not made up to a thousand, then the Commissioners would have the right to say that it ought to be grouped. At any rate, it ought to be given a reasonably long time to preserve its existence.
There is one other point, which the Chancellor of the Exchequer mentioned, in regard to the safety of the funds, seeing that the great bulk of them would be invested by the Government. Some of the small societies invest in loans on the local rates, and I do not think, though I am not sure, that loans on rates are trustee investments. As the Bill stands, the funds of the societies have 326 to be invested in trustee investments. But it seems to me that advances on the rates is a handy form, and an economical form of investment of the surplus funds of the societies. It is good for localities to get the small sum of money cheaply and is good for the societies. Then reference was made to the question of mortgages. I know they are now unpopular, but with due and proper protection and proper safeguards, I suggest that some latitude ought to be given them in investments on mortgages, because this is what is going to happen: There are a large number of societies who would have some difficulties about their existing funds; they are not directly affected by this Bill, but are affected in a way I think I can show you.
They advance small sums very often to members, or at any rate to small people in the localities, whether they are members or not—small mortgages of £200, £100, and £150. For various reasons mortgages are now less popular, and they are not at all easy to obtain. These mortgages will have to be repaid to the societies, because the societies will have to be paying benefits out of their existing funds to their own members, and to the members who remain in the voluntary and do not go into the State section. I claim consideration for the small societies investing on mortgages, and I suggest that the practice may be continued with additional safeguards. The Chancellor of the Exchequer asked the Committee to make suggestions, and I have on the Paper an Amendment which I put down some three or four months ago with a view to enabling small societies to take part of the risk proportionate to the contribution paid by the insured person for himself, the State reinsuring the balance with the employers contribution and the State's two-ninths, which the Chancellor of the Exchequer calls 2d. The State's two-ninths and the employer's 3d. will go into the central fund, and out of that central fund the member would be paid the proportionate amount of benefits, so that the small society would be running the risk, roughly, of four-ninths of the benefits proportionate to the members own contribution of 4d., while the State or central fund would run the whole risk of five-ninths, representing the employer's 3d. and the State's two-ninths. The object is to get an automatic reinsurance of the risk of the small societies, which seems to me to secure a better spreading of the risk than by grouping county societies.
§ 5.0 P.M.
§ Mr. C. E. PRICEI have an Amendment on the Paper, the object of which is to draw a distinction in regard to the Bill between England, Wales, Scotland, and Ireland. While you may have in England a grouping of societies, say to the extent of 5,000 people possibly getting ten or fifteen or twenty small societies, to obtain the number of 5,000 in Scotland would require a grouping of a far greater number of societies, owing to the population being relatively small compared to that of England. If the Amendment is carried, I shall be precluded from effecting such a distinction between the different countries. Therefore, I should like some assurance from the Chancellor of the Exchequer that there will be some distinction drawn, because unless that distinction is drawn we shall suffer from the difficulty to which the Chancellor of the Exchequer has referred—namely, of getting so many societies to amalgamate. The right hon. Gentleman said that there were frequently jealousies between small societies which stood in the way of grouping. Accordingly I should like to have some assurance before this Amendment is carried that there will be a distinction drawn between not only Scotland and England, but in the case of Wales and Ireland also, and that we shall have for those countries relatively smaller figures in the grouping than is the case in England.
§ Mr. LANE-FOXI desire to ask a question, namely, whether under the present system of grouping something cannot be done in cases in which the lives are so comparatively good that the rate of contribution is unduly high, such as in the case of the agricultural societies, to allow them to lower their contributions in the same proportion while giving the same benefits, if the members desire? Under the system of grouping, I suppose kindred societies will be grouped together. It is a great hardship on the great bulk of our agricultural labourers, who are the worst paid class, and who are still made to pay the same contribution as the other classes. It is obvious that under this arrangement societies in the way of having the better lives will probably be grouped together, and I hope the Chancellor of the Exchequer will try and allow them, with the consent of the members, to lower the rate of contribution. Undoubtedly some groups will be under more favourable conditions than others, and the conditions will be unfair 328 as between certain groups. At the same time I am very glad of these proposals, as under them there is a better chance for small societies than there was before. I hope anything which can be done, even now, to make their position better, and to retain, as far as we can, that individual work, which has been so large a feature of the existing small society in the past, shall not be dispensed with. You cannot afford to do away with the men who gave voluntary work so successfully, and I trust that the Chancellor will do all he can to prevent any rigid system of cast-iron regulation by which the individual character of each individual society would be done away with. I am very glad that these Amendments have been suggested, and I certainly think, as regards the small societies, that it will be easier for them to accept the Bill.
§ Mr. RAFFANI rise mainly for the purpose of making an appeal to the Chancellor of the Exchequer to reconsider very seriously the number which has been fixed as the membership for these societies. So far as I have been able to ascertain the number of 5,000 is a purely arbitrary number. The Chancellor submitted a very interesting series of figures, which showed, I think conclusively, that very small societies under 1,000 could not safely be allowed to form approved societies under the Act without danger to themselves. His returns referred to societies of a membership of 200 or 300, but between the number of 1,000 and 5,000 we have had no figures submitted to us for the purpose of showing whether they are solvent or insolvent. So far as the House is in possession of information, it may be that societies of 2,000 or 3,000 or 4,000 are in an equally good position financially as societies with a membership of 10,000 and upwards. I have in my own Constituency a very useful society which has at the present moment a membership of something like 7,000, but that society would probably not be able to qualify as an approved society under the Act because the members of that particular organisation are also members of trade unions and organisations of that kind, and I think a great many of them would prefer not to disassociate themselves from their trade union and other organisations. Therefore it would probably be very difficult for the society to which I refer to obtain 5,000 approved members, and so form a society under the Act. The members of that society do feel that it would be a real 329 hardship that they should be grouped with a thousand other societies in Lancashire, and which societies, according to the Chancellor, show an average surplus of £2 19s. per member. As a matter of fact, the society of which I am speaking has a much larger surplus than the surplus of which the Chancellor spoke with such admiration, and is in a very much better position.
While it is perfectly true that under this system of grouping it will not be able to retain half its surplus, it is not quite correct to say that it does not suffer in any way, because it will require to enter into competition with other societies and other organisations endeavouring to secure members. The one great attraction to those who are becoming members will be the question of what additional benefits the society will offer, and if half the surplus goes to this group of 1,071 societies in Lancashire, then the society in which I am interested will be very severely handicapped in the matter of being able to give additional benefits. I quite agree that you must have some definite figure, but the figure of 5,000 does appear to be purely arbitrary. I think, in addition to the information which the Chancellor of the Exchequer has already given us, that it would be extremely useful if he would work out what is the average surplus of societies with a membership of between 1,000 and 2,000, and between 2,000 and 3,000, and between 3,000 and 4,000, and between 4,000 and 5,000. If we had that information, I think we would be very much better able to come to a conclusion. The only argument, if it be an argument, which I have heard advanced in favour of fixing a membership of 5,000 is the fact that when the question was submitted to the friendly societies that, by an enormous majority, they preferred that figure. When you consider the composition of that body, it was very natural that they should arrive at such a division. The small societies were practically unrepresented when that decision was arrived at.
§ Mr. RAFFANI think if my hon. Friend chooses to make an interruption he might make a somewhat relevant interruption. I am perfectly aware that they can group. If he has done me the honour of listening he will know that my whole argument is that it is unfair to compel a society, which would probably be able to bring three or four thousand persons into its member- 330 ship, and which, by its past management, is able to show that it will always have a surplus, to group with over a thousand other societies in the same county who have shown, by their circumstances and by their management, that they are almost certain to create a deficit. It is not a relevant answer to say that the societies can group. I suggest that so far as information has been submitted to the House it has not been shown that the fixing of the figure of 5,000 was done after reasoned argument, or because it was shown that societies with a membership of between 2,000 and 5,000 were largely in an insolvent condition, or where societies that might create deficits it was done merely because those who were there represented societies with a membership of 5,000 or over, and they naturally desired to confine this to their own membership. If there was any other reason or argument I would be glad if the hon. Member for Pontefract (Mr. Booth) would give it to the House. So far it has not been submitted to the Committee or the public, and from the figures submitted there is no reason why the figure of 2,000 should not be taken just as well as that of 5,000, and with equal safety, and with no danger to those who are members of the societies. The figures submitted, I agree, show that you cannot possibly allow societies of a few hundred members to have the responsibility of insuring persons, and then be unable to meet the benefit when the need arises, but we should also have figures showing what is the position of societies from one to five thousand.
§ Mr. RAFFANThe society is not giving sick benefit at present, but again, and with great respect, though it may be my density, I fail to see the relevance of that interruption or that question. The society is a society which desires to become an approved society under the Act. Many of the societies at the moment are not sick benefit societies, though they desire to become approved societies, and therefore I do not know that that in any way interferes with my argument. As to the question of grouping, if we are met with regard to the numbers, then I think the grievance would disappear, but if the number of 5,000 be adhered to, we are interested in the question. With regard to that matter I do suggest that there should be greater elasticity of grouping than is provided for 331 under the present proposals of the Chancellor of the Exchequer. So far as they go they are no doubt admirable. So far as members engaged in particular trades or particular industries are to be allowed to group themselves, that, I think, will meet the case of a very large number of societies indeed. When we are told that societies having common objects—that is to say, denominational societies—may also federate nationally, that also will meet the case of a large number of societies. But it appears to me that the Chancellor of the Exchequer might go a great deal further in the matter of elasticity. He might fairly allow any group of societies to be formed, subject to the approval of the Insurance Commissioners. I think that that would remove very largely any sense of grievance that might otherwise be created; but if the only choice for a society which does not cater for a particular trade or denomination is to become a member of a county group, whether it desires to do so or not, a very real sense of hardship and grievance will be created. On the surface at any rate I cannot see any reasonable objection to my suggestion.
§ Mr. CHARLES BATHURSTI cannot possibly object to the proposal to group these small societies in county areas, because it seems to me that, in putting the suggestion forward, the Chancellor of the Exchequer has practically adopted an Amendment standing on the Paper in the names of myself and the hon. Member for Worcester. But I would support the suggestion that when we come to consider the new Clause an Amendment should be accepted with the object of reducing the limit of 5,000 to something more like 1,000, if not 500. In the South and West of England there are a large number of excellent friendly societies, which pass the quinquennial valuation without any serious criticism on the part of the registrar—societies which number from 1,000 to 2,000 members, are admirably managed, have been in existence for a large number of years—there are three in my own Constituency which have been in existence for over 100 years—are perfectly solvent, are doing an enormous amount of good, and with which it would be a great pity to interfere in any way. It seems to me that if these societies can satisfy the Insurance Commissioners that they are solvent and well managed, and in other respects comply with the provisions of the Bill, it ought to be possible to permit them to carry on their good work, although their numbers 332 do not amount to 5,000. I might instance societies which are county societies, and yet do not fulfil the requirements of the new Clause. There is a Wiltshire friendly society and a Dorset friendly society, both founded on Holloway principles, one of which numbers approximately 4,000 members, and the other rather less than 3,000. No question has ever been raised as to their solvency or excellent management, and it would be a very great hardship to a large number of men at present well insured if those societies ceased to exist. I am bound to accept the principle of grouping these small societies, but if they are to be grouped in a large area, or even, in the case of trade societies, in a trade of some magnitude, I am afraid there will be some reluctance on the part of the small society, particularly the village society, to become a very small unit in a very large group. I hope the Chancellor of the Exchequer and his advisers will do all in their power to encourage the small societies to join groups, rather than allow them to be extinguished, because I fear that if it is left to their own initiative the latter will probably be their fate.
With regard to the important question of the allocation of the surpluses of financially sound societies to meet the deficiencies of societies not so well placed, what exactly is the meaning that the Chancellor of the Exchequer puts upon the term "mismanagement"? He tells us that, in the case of mismanagement, societies suffering from a deficiency will not benefit from the surplus derived from other societies in the group. If that is intended to include excessive sickness arising from bad housing, or insanitary conditions in any particular district, a most unfair burden will be placed upon other districts in a county where the housing is good and the sanitary conditions are beyond criticism. I hope the term "mismanagement" will be so interpreted that a mismanaged parish or district will not benefit at the expense of a parish or district that is better managed. I notice in the new Clause that these groups are to be either county groups or trade groups. Am I to understand that all the agriculturists in a county will or will not be in a position to form a group of their own, and so get the full benefit, or to a very large extent the full benefit, of their better standard of health, bearing in mind that their contribution will be the same as that of persons who do not enjoy the same standard of health? Are you going to insist on having either a county group or a 333 trade group, or may you have an industrial or trade group within a county group? If you cannot, serious injustice may be done to the agricultural communities in various counties where agriculture is not by any means the only industry. In Gloucestershire there is a very large mining population. It is mainly an agricultural county, but about one-third of the county consists of a mining population. According to the tables of the Manchester Unity of Oddfellows, the rate of sickness to be expected among an agricultural population is exactly half the rate to be expected in the case of a mining population.
§ Mr. CHARLES BATHURSTI have taken it from the tables as they stand. For my purpose I do not care whether it is sickness arising from accident or otherwise. I understand the tables to mean accidents excluded. In any case, the sickness to be found in a mining district is double the amount in a purely agricultural district. That being so, will not a serious injustice be done to the agricultural branches of a county group if it is impossible for them to form a separate group of their own? I shall be glad to have an answer on that point, because it is a question which very materially affects the class I mainly represent in this House.
We are told that there is to be another county group within the terms of the Clause, namely, a denominational group. Personally, although I am always strongly averse to denominational distinctions, if there is a large body of persons throughout the country who desire to see these distinctions made, I have no objection. But when once you start elaborating this group system, where are you going to stop? For instance, if it is fair to have denominational groups, why should you not have groups containing societies restricted to persons who advocate the excellent principles of temperance? There is a very large society at present, which fortunately for itself exceeds the 5,000 limit. I refer to the Rechabites. The Rechabites are teetotallers; all credit to them. The very fact that they are teetotallers necessarily involves that they enjoy a better standard of health. I challenge criticism on that point. I am not necessarily suggesting it is in the interests of every hon. Gentleman present that he should become a total abstainer; I simply state what I believe is an incontrovertible fact, that the health standard of a body of men who 334 are abstainers is necessarily better than the health standard of a body of non-abstainers. That being so, if you are going to elaborate this system at all, you ought to extend it to groups of societies of that description. At any rate, you cannot very well stop at denominations. I understand that the local health committees are to have the control of the affairs of these various groups. Is that altogether fair to the small societies? The local health committees will be dominated very largely by the representatives of the large affiliated orders. It is no good pretending that the interests of the large affiliated orders are absolutely identical with those of the smaller societies. If the large affiliated orders had their own way they would like to absorb the smaller societies. It is only human nature. That being so, it is only fair to the small societies that they should have some definite, adequate representation on the local health committees, if those committees are to be the controlling authorities. Personally, I should infinitely prefer that within the boundaries of a county there should be a central county authority to look after the interests of the county group. I believe that it would receive to a much greater extent the confidence of the members of the smaller societies, and that greater justice would be done if such an authority were constituted.
§ Mr. GEORGE THORNEWith regard to the question of grouping, there are two main principles which I think are generally accepted. The Chancellor of the Exchequer requires that every approved society shall be a stable society, thoroughly reliable, and one whose members may be sure that they will receive what they have provided for. There is also the principle generally accepted that we shall hurt as little as possible any single society, even if it is a small one, provided it is well managed and entirely solvent. I would venture to join in the suggestion which has been made. The Chancellor of the Exchequer's suggestion referred more especially to societies which are insolvent, and under the number of 1,000. What I venture to suggest is that in societies between the 1,000 and 5,000 the Commissioners should have a reasonable discretion to come to a decision in regard to the facts submitted to them. If they discover that such societies have been long in existence, are well established, well managed, and solvent societies, all the 335 requisite conditions of an approved society will be present, and it seems to me only reasonable that the Commissioners should have the discretion to approve. I therefore very respectfully suggest that the Commissioners should have discretion to decide entirely on the merits of the case in relation to societies with a membership of between 1,000 and 5,000.
§ Mr. DUKEI am glad to have the opportunity of concurring in the suggestion which has fallen from the hon. Member who has just sat down. The interest that I feel in this Clause of the Bill arises originally from the circumstance of a society in my own Constituency. This has been an excellent society for a great many years, has undoubtedly done much public good, is undoubtedly solvent, has never been anything but solvent, and would be put out of existence by the Bill as it stands, and probably by the Bill as amended. That is not an isolated case I know, but when the Committee considers the arbitrary—I do not say the vexatiously arbitrary—but the necessarily arbitrary character of the regulations which are proposed to be provided as conditions of affiliation, it will be seen that immediately you set about defining regulations of that kind you begin to exclude existing societies. There are societies which cannot find an appropriate mate in their county, which are not trade societies, which are not denominational societies, yet are perfectly sound, solvent institutions at the present time, and have been for a great many years. What is to become of them under the present system?
Without becoming approved societies it is obvious they cannot continue except for the purpose of being wound up. They must distribute their assets among their existing members; probably they cannot be re-formed in face of the competition there will be when the affiliated orders, the great orders, and the insurance companies which will now come in, are constant competitors in this business. The hon. Gentleman who preceded me suggested that discretion should be given to the Insurance Commissioners. A very large discretion will be imposed on them in many respects, and in many respects in which their action is not likely to have the same beneficent results perhaps as it would have in the maintenance of the existence of societies which have been doing good work. What reason is there in point of principle why the Insurance 336 Commissioners should not say, below the specified number in which there is a prima facie right to be adopted as an approved society, that upon proof of solvency, stability, and continuance over a long period of public usefulness, an existing society, whether it is capable of being amalgamated or not with another, shall be permitted to carry on its work? If it has been doing useful work, why should this House by an arbitrary Act put it out of existence? It must necessarily cause great vexation to those who have been members of such a society; to the men who administer societies of that kind. I do hope that some milder principle of easier operation than that contained in the Chancellor's proposed Amendment will be adopted. When the Bill stood in its original form I ventured to put down a proposed new section which would have given the Commissioners discretion in this matter, subject to proof of the existence of a society for twenty-five years; proof that the society was being carried on for the purposes of and for the benefit of the public. I cannot help thinking that some mild regulation of that kind could be introduced in place of the definite and excluding regulations which are proposed; it would save a great deal of vexation when this Act comes into operation.
§ Viscount HELMSLEYFrom an agricultural point of view this proposal of the Chancellor of the Exchequer is no doubt an improvement upon what was formerly contained in the Bill. But there is just one point in connection with it I should like to ask for information upon from the hon. Gentleman in charge of the Bill: that is the question in the new Clause of grouped societies. So far as I read the proposal there are associated societies, on the one hand, and other societies which are not associated but grouped, on the other hand. It is quite clear that the associated societies must, in the group, number 5,000 members, but I am not so clear, from reading the proposal, whether that also applies to those societies which are not associated but are grouped in any area. I should like to have it made clear as this discussion proceeds whether or not the number of 5,000 applies to the grouped societies, because I think that the hon. Gentleman and the Committee will recognise that this number is not the same in the two cases. For instance, it is not one proposition as to whether the proposed society shall necessarily contain 5,000 members, or whether the number of 5,000 is an appro- 337 priate number of members for the aggregated group or associated societies, and I do not see that there is any real reason why there should be the same number in the two cases. It may be necessary to say, for instance, that in the case of a society which was to be improved "on its own," as it were, that it might be necessary to have a larger number of members than would be necessary in the case of grouped societies, where the aggregate must be a certain number.
In the case of these groups in the counties, I am not sure that the number, 5,000, if it does apply, is not too large. I take it that we want to include every small village club that we possibly can in this proposal. You may easily have this situation arising, that a considerable number of these clubs would be excluded, so far as joining some association which they do not care for, for, except grouped together, they would not make up a total of 5,000. I shall be glad when the hon. Gentleman replies if he will just give me some information on that point. Would he also consider the question as to whether the number can be diminished for the associated societies which are to be associated in any particular denomination or in any particular trade? I do not know that as it is this proposal entirely meets the agricultural need. Of course, it is true that by this proposal the societies may group and the evils of a flat rate will be largely diminished. But at the same time—I think it will come up for discussion on Clause 55—it will be a matter for this House to determine as to whether or not the contribution cannot be lowered for the agricultural community. But that will arise later. I do not want to discuss it now. But I simply want to press upon the Government the admission of as many as possible of these small clubs; that they may not be excluded by the fact that in any particular area the total number is not able to reach the required number of 5,000.
§ Mr. ELLIS DAVIESRepresenting as I do a county in which there are a large number of these small societies, I would like to mention that it is quite possible that many societies which have existed for a large number of years and have been insolvent, have made themselves solvent again, either by reducing their benefits or by making occasional levies. The proposal of the Chancellor of the Exchequer will remove the very well-founded apprehension which undoubtedly has existed amongst the members of the 338 small societies as to the effect of the Bill. The Chancellor of the Exchequer started his speech to-day by saying that the Bill would not unduly affect the small societies. I quite agree that in its new form it will not do so, and for that very reason I welcome the proposals he has made. I understand that certain powers by the Clause are to be vested in the local health committee. If I may say so, I rather think the suggestion thrown out by the hon. Member for one of the Divisions of Wiltshire will really give us a better solution, and that is that there should be formed something in the nature of a county society.
In Clause 59 of the Bill such a provision already exists with regard to Ireland. In Ireland I observe the county councils may form a county association which will be an approved society. I would press upon the consideration of the Chancellor of the Exchequer whether some similar arrangement should not be arrived at in respect to England and Wales, for as regards the grouping of any number of societies it is essential that we should have some official who will take the necessary steps to bring about the amalgamation. It seems to me that the proper officials for that kind of work are already in existence, and are officials of the county council. [An HON. MEMBER: "NO, no."] My hon. Friend objects for fear perhaps that the county association as an approved society would compete with the larger friendly societies in which he is interested. I should also like to have some further information from the Chancellor of the Exchequer as to what is to be the position of the man who is a member of a society taken into the group. Has he to pay anything above his ordinary subscription? Are we to understand that the 4d. subscribed by the member of a present society will in future be received by the authority, whichever it may be, which controls the county groups?
§ The UNDER-SECRETARY for the HOME DEPARTMENT (Mr. Masterman)The proposal of the Government is that the authority shall control half the surplus.
§ Mr. ELLIS DAVIESThen it seems to me very desirable that some further powers should be vested in the local health committee. I do not think it is sufficient to say that the society which has lent money improvidently or otherwise 339 been loose in its management shall be penalised as regards surpluses. There is no doubt, as the Chancellor of the Exchequer has suggested, that there has been a good deal of mismanagement, and it is quite possible that in the smaller societies there may be more malingering than even in the larger societies, but I think the proposal put forward should be seriously considered by the Government as to whether they cannot apply to England and Wales the principle that is applicable to Ireland. As a matter of fact the proposal to form county societies has received the support, with the exception of one Member, of all the Members of Parliament for Wales. If not out of order, I would like to point out that once you form a county society, as in the Irish case, you can also deal with the person who must now be treated as a Post Office contributor. I think there is a real reason why the Government, who are pressing this scheme upon the House, should seriously consider whether they should not, as in the case of Ireland, encourage in England and Wales the formation of county societies, and give to them powers of the health committee, at the same time enabling them, if they should so wish, to deal with the Post Office contributor, either by giving him reduced benefits or accepting a smaller subscription, or by any other method that they think best.
§ Mr. HILLSI rise to ask a question of the Government. If the numbers, 10,000, had stood in the Sub-section I intended to move an Amendment to reduce it to 1,000 in the case of women's societies. I want to know will the Government consider the case of women's societies specially? I think they will find that the limit of 5,000 as fixed by the new Clause is much too high for women's societies. It certainly would be hard for them to comply with that condition. Five thousand is a reasonable number, or may be a reasonable number for men, but it is far too large a number for women. The question chiefly affects women's trade unions, and I am told they are mostly of much smaller numbers, very few of them having a limit of 5,000. I assume the matter cannot be discussed now, and I merely wish to mention it so as to direct the attention of the Government to it. When the new Clause comes up I shall move an Amendment to reduce the number in the case of women's societies to 1,000.
§ Mr. JAMES HOPEI do not think that the statement of the Chancellor of the Exchequer has entirely removed the anxiety felt by certain societies as to the disposal of their surplus. It is quite true the Chancellor said it would not be half the existing surplus, nor half the surplus that will arise in the future through the special activity of that society not covered by the Bill. As a matter of fact, the surpluses which have been created in many cases hitherto have arisen largely perhaps from conditions covered by the Bill. Will it be possible for that amount of good management to be put into operation in the future when these societies are brought under the operations of the Bill as grouped societies? I have one society in my mind which has had an extraordinary degree of solvency, amounting to 24s. 7d. in the £. This has arisen partly by judicious investment and partly by careful selection of representatives. This society will necessarily have to fall, in this particular instance, into the county borough group which will be created in this particular case. It will find itself grouped with a number of other societies which have nothing like its solvency and nothing like its tradition or careful selection and good investments which have made it such a success, yet it will have to pay out an amount of no less than half its surplus of 4s. 7d. to be pooled and distributed along with other societies. Can it be expected that that society will throw into its management under this Bill all the good work and all the great energy which it exercised before? They know that others will reap where they have sown, and I am not certain that the result will not be to make them throw all their energies into the department of their work not covered by the Bill, and that they will perform their duties under the Bill in a more or less perfunctory manner In societies like this there should be some provision for allowing it to preserve its good work and its traditions, which otherwise will be modified seriously. I wish to back up the suggestion of my hon. Friend the Member for Exeter that there should be absolute discretion to the Commissioners for enabling the solvency and good work of such societies to be continued.
§ Mr. ROWNTREEI think the suggestion of the Chancellor of the Exchequer meets in the main the objections which have been made to this Clause. I have a good deal of sympathy with the suggestions made by an hon. Member opposite. 341 I think that under this system of grouping small societies would have some reason to complain if the half of their surplus was administered by the health committee, and I would suggest to the Chancellor whether, in such cases, he could not adopt the same principle that he has adopted with regard to societies, say, of a religious denomination, where he has appointed a central committee to consist, I suppose, of the representatives of the society. I suggest that the difficulty which has been mentioned could be got over by adopting the same system, and having practically what would amount to a committee appointed by representatives of the grouped society.
§ Mr. WATSON RUTHERFORDI desire to give a concrete instance of a society which undoubtedly would not be helped, but would rather be wiped out of existence, both by the Clause as it stands and also by the Amendment involved in the new Clause of the Chancellor of the Exchequer. A concrete instance will probably bring the matter home to the attention of the House far better than general argument. The society I have in my mind is the Liverpool Clerks' Association. It has been formed for fifty years, it has 2,000 or 3,000 members, it has invested funds amounting to £90,000 odd, and there is no other society in the country of a similar nature. It is doing magnificent work among the clerks of Liverpool. Some of the best people in Liverpool are associated with it as trustees or vice-presidents—perhaps I may mention I have myself occupied the position of vice-president for some years. The bulk of the members of this society are junior clerks whose income is just under £160 per year. They cannot contribute to any other society or to the Post Office and at the same time maintain their contributions to the Liverpool Clerks' Association. They would be compulsorily insured in some other society that was approved, or else they would be Post Office contributors, and they would be obliged to resign their membership of the Liverpool Clerks' Association, which for a smaller contribution gives greater benefits than anything mentioned in this Act. Is it right to bring forward a great system of National Insurance which would have the effect of wiping a great society like that out of existence? What is worse still is this, the society is gradually built up by new members consisting of young men, clerks, and of course they have not got £160 a year to start with Where, then, are 342 the new members to come from? They will be obliged to be compulsorily insured under the Bill with some other society. Of course the Bill as it stands absolutely cuts that society clean out, and I do not see anything in the suggested new arrangement of the Chancellor of the Exchequer to preserve the great benefits of that society to the clerks of Liverpool.
Take the case of another society, that is the Foremen's Society. This society consists of foremen of works all over the country. They are a special body in constant employment with good wages. Why should that society be wiped out of existence because it cannot comply with these conditions? There is no other society with which it could reasonably be grouped. I think before this very important subject as to precisely what society is eligible to be approved is finally disposed of, cases such as I have mentioned, and of which I have given concrete instances, and there are many such cases all over the country of similar societies conferring great boons upon the people, should be considered, and I respectfully avail myself of this opportunity of appealing to the Chancellor of the Exchequer to take care that whilst he is doing good work he should not at the same time commit great injustice. There are a very large number of very deserving societies that, at all events, ought to be helped and kept up instead of having a deadly blow struck at their very existence.
§ Mr. HAMERSLEYI heard the explanation of the Chancellor of the Exchequer this afternoon and the speeches which have been made since, and I think there has been a misapprehension of what the Chancellor said. Several hon. Members, from what I heard, seemed to be under the impression that if this new Clause is carried, a society must have 5,000 members before it can become one of the societies to be grouped. [An HON. MEMBER: "No, no."] The Chancellor of the Exchequer, I know, never said so. I understood from him it does not matter what number there may be in any society to be grouped so long as it complies with the regulations laid down in the Bill, but if a society has more than 5,000 members it is outside and cannot come within the county group. That is the meaning of the new Clause, that subject to the provisions of the section all approved societies with less than 5,000 insured persons as members, shall, for the purposes of valuation, be associated with other societies. That excludes from the county groups any society 343 with over 5,000 insured members, and that, I understand, is the intention of the Chancellor of the Exchequer. As far as I understand now, it does not matter haw many members there are in these societies as long as they are solvent and carry out their management under the regulations laid down by the Insurance Commissioners, they can be formed into county groups. If that is the case, and the Chancellor assents to my interpretation I will not move the Amendment standing in my name to that effect, but it is important that that should be absolutely clear, because if I am not right I should feel compelled to move my Amendment.
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There is another point to which I would like to direct the Chancellor's attention. We never yet in these discussions had any definition of what is solvency. We often hear from the Chancellor that numbers of these societies are not solvent. No doubt he is correct, but from inquiries that I have made I think he has rather overrated solvency than otherwise; for instance, in my own county in Oxfordshire, he said there were only seven societies with a surplus, and thirty-eight with a deficit. Now, I find from the last report made there were seventy-three societies in Oxfordshire, not thirty-eight. I do not know where the Chancellor of the Exchequer got his information, but there are a number of societies not registered.
§ Mr. LLOYD GEORGEI only gave the first four years.
§ Mr. HAMERSLEYThat accounts for the probable discrepancy. I have made inquiries and I find that in the unregistered societies there are a number that are solvent. I would like to suggest that the health committees should be the organising body for these new groups. At the present time there is no machinery in the Bill provided for this purpose. The difficulty is that many of these societies are quite isolated, and it is impossible to amalgamate them unless some organising body takes the matter in hand. I ask the Chancellor of the Exchequer to agree to provide the necessary machinery for this purpose, and I suggest the health committee as the body to organise the amalgamation or the grouping of these small societies. I welcome very much the suggestion and the explanation made to-day by the right hon. Gentleman, and I welcome what he has done. I think it will relieve an enormous amount of anxiety which I know exists all 344 over the country as to the fate of these small societies which have done such valuable work for many years past. I am sure that when the announcement made by the right hon. gentleman becomes known it will give relief to a large number of men who have devoted a large amount of energy and time to a most laudable cause.
§ Mr. MASTERMANI think it will be for the convenience of hon. Members if some of the numerous questions which have been asked are answered by a representative of the Government. I do not think the Government has any reason to complain of the reception of this scheme. I think some of the criticisms which have been made are due to a misunderstanding of the scheme as designed by the Chancellor of the Exchequer. An attempt is to be made to save the small societies, and more especially those in the country districts by gathering up all those who do not see their way, or have no inclination to avail themselves of other means of preserving their membership under the new scheme. The new Clause suggested by the Chancellor of the Exchequer is intended to give the widest possible latitude for the amalgamation or association of various types of societies. The hon. Member for Wiltshire asked if agricultural societies could form associations with agricultural societies, and some other hon. Members spoke as if the only permission granted under the Clause designed by the Chancellor of the Exchequer applied to denominational societies. That is not the scheme, and that is not the new Clause as it now stands. The Clause has been slightly altered since its appearance, and it stands now as a scheme by which any societies following any particular trade or industry or any body of persons of any particular class. This would include teetotal societies amalgamated with teetotal societies.
§ Mr. STUART WORTLEYWill it include clerks?
§ Mr. CASSELI understand that is left to the discretion of the Insurance Commissioners. Can you describe teetotallers as a class of persons?
§ Mr. MASTERMANThere may be some difficulty of drafting, but I am authorised to say that it is the intention of the Clause to give the widest possible provision to allow these various societies to be linked up. I am glad to hear from the hon. Member for Barkston Ash (Mr. Lane-Fox) that 345 that relieves his fear as to the special agricultural societies which have a lower rate of sickness than the other societies in his district. Some hon. Members have denied that statement. I am not sure whether the statement does not still hold good both in connection with the clerks and agricultural workers that increased longevity does not mean as great a rate for sickness as in earlier years. That question was fully discussed last July. Having given full powers to these societies who wish to link themselves up together, the question remaining is whether the various smaller societies which would otherwise be wiped out if not linked up will be saved by the Clause suggested by the Chancellor of the Exchequer. I think the new Clause has been approved of by the Committee as a whole.
§ Mr. MASTERMANIt is fully outlined in the Clause on the Paper.
§ Mr. MORTONWhere can you get the Paper referred to containing the Clause?
§ Mr. MASTERMANIt is on the Blue Paper.
§ Mr. MORTONIt is not on my Amendment Paper.
§ Mr. MASTERMANIt is on my Paper.
§ Mr. MORTONI hold in my hand a Paper of all the Amendments. I went to the Vote Office to try and get a copy of this proposed new Clause, and I was told they had not got it.
§ Mr. LLOYD GEORGEIt was circulated with the Votes.
§ Mr. MASTERMANThe hon. Member opposite asked whether the county pool has to have 5,000 members. I may say that in the proposal of the Government there is no suggestion that it is necessary to have 5,000. All the smaller societies will be gathered together unless they chose to stand out, and they will form this county pool. Another hon. Member asked if a society with over 5,000 members might come into this county pool. I think the hon. Member for Woodstock (Mr. Hamersley) stated that if this could not be done he would have to move his Amendment.
§ Mr. HAMERSLEYI have an Amendment down on the Paper which I shall not 346 move if my interpretation of the new Clause is correct.
§ Mr. MASTERMANThe present proposal is that the society with 5,000 members should not be part of the group, but if there is any difficulty the Government are open to consider the matter. The hon. Member for York (Mr. Rowntree) suggested that the administrative control of these societies was going to be placed in the hands of the local health committees. May I point out that they will have nothing to do with those societies except that after three years' valuation half the surplus will be under the control of the local health committee. Under these circumstances, the sole function of the local health committee will be to meet the authorised deficiences and refuse to meet deficiencies due to mismanagement, and then distribute the remaining surplus in proportion to the amounts paid into the pool. The Chancellor of the Exchequer asked for an expression of opinion as to whether the local health committee is the best body to deal with such functions, and diverse expressions of opinion have been given to the Committee. That will be a matter for a further consideration by the Government. It has been said, on the one hand, that the interests of the affiliated orders would be better represented on the local health committees than with the small societies, as there might be an endeavour to squeeze those societies out of existence. On the other hand, there is some difficulty in giving this power to a body representing these societies alone, because as they form a majority of that body, there might be a considerable impulse and an inclination to declare mismanagement in the majority of them.
§ Viscount HELMSLEYWhy, in the case of associated societies, is there a separate finance committee, and, in the case of a county group, there must be a resort to the local health committee?
§ Mr. MASTERMANOne case is built on the system of affiliated orders, and the other is built on the system of independent societies. The Government has a perfectly open mind on that point. A suggestion was made earlier in the Debate that there might be an appeal against any decision in regard to mismanagement. That will be a difficult business, but machinery will have to be provided for investigation in cases of mismanagement. I think I have met the case raised by the hon. Member for Edinburgh (Mr. C. E. 347 Price) by saying that the number of each county group will not be required to be 5,000. I think the hon. Member said if this Amendment were carried he could not raise the separate question of Scotland. I may point out that that question can be raked upon the new Clauses. Until the new Clause there will be no limit put in at all. There is no figure mentioned in the Bill, but it will come in the new Clause on the Paper. If the societies do not come in under the first or second part they must come in under the third part or not become approved Societies, unless there is some other suggestion the Government and the Committee are willing to adopt.
§ Mr. DUKEIs the hon. Member able to tell the Committee whether the Government see any objection to the affiliation of societies irrespective of county if their objects are kindred objects? The Clause as it stands does not provide for that case. There are kindred societies outside the county which would be excluded at the present time, and one of them is the case I mentioned to the hon. Member.
§ Mr. MASTERMANIf I understand the question aright, that is exactly what is provided for and what was very fully explained by the Chancellor of the Exchequer. It is that kindred societies should be allowed to link up together and so form approved associations with over 5,000.
§ Mr. DUKEI want to understand whether the limitation of locality in respect of county, or of industry, or of class in the other Sub-section will govern the affiliation of societies, or whether they can be affiliated irrespective of industry, of class, or of numbers if the objects are kindred objects?
§ Mr. MASTERMANThe county limitation has nothing whatever to do with it. These societies are permitted to link up quite apart from any question of county if they have kindred objects.
§ Mr. MASTERMANThat is a matter of criticism of the drafting of it, but I have the fullest authority from first-hand source to say that is the object of the Government.
§ Mr. DUKEIf the Clause as drafted does not secure that object, will the Government accept an Amendment that will secure it?
§ Mr. LLOYD GEORGEYes.
§ Mr. MASTERMANI hope my right hon. Friend has answered that question to the satisfaction of the hon. and learned Member.
§ Mr. MORTONMay I ask whether, on the consideration of the new Clause, the Government is willing to reduce the number of 5,000 so far as Scotland is concerned?
§ The CHAIRMANThat is a matter for the Chair when the time arrives.
§ Mr. MASTERMANMy hon. Friend the Member for Leigh (Mr. Raffan) asked if figures could be got out of the average surpluses of societies which have members between one and five thousand. I do not see how the figures of the surpluses could be got out when he declares they are not sick benefit societies, but I will certainly see if there are any other figures which are available. Then my hon. Friend asked for greater elasticity. I hope my reply and the reply of the Chancellor of the Exchequer may be satisfactory. There will be the widest elasticity of grouping under the first part of this Clause, and the formation of the county pool will only apply to those societies who do not want to group or cannot group.
§ Mr. RAFFANSupposing societies in my town and an adjoining town, each with a membership of about 3,000, were ordinary sick societies and they could, by combination, make a joint society of 6,000, could they group together? Their objects are only kindred in the sense that they are sick societies.
§ Mr. MASTERMANCertainly, and form an approved society without any difficulty at all. I think the same applies to the question raised by the hon. Member for Wiltshire (Mr. Charles Bathurst) as to societies, one in Wiltshire and another in Dorset. The Committee will realise we have also made provision in the new Clause for dealing in the county pool with societies some of whose members reside over the boundary and some within the boundary of a county. The hon. Member for Wiltshire raised the question as to what was meant by mismanagement. I doubt whether either the Chancellor of the Exchequer or myself could give a definition of mismanagement at this moment, but, at any rate, it does not apply specially to the proposals in connection with this Clause. It would apply to many other Clauses in the Bill, and would probably be 349 better raised on those other Clauses. The hon. Member for Carnarvon (Mr. Ellis Davies) asked if something like a central body could be formed to generally look after these societies. He did not quite suggest whether he meant a body elected by the representatives of the society or from outside. The hon. Member for Durham (Mr. Hills) raised a very important point—we had seen it already—as to the possibility of reducing the number in connection with women's societies, and especially in connection with women's trade union societies. The Chancellor of the Exchequer authorises me to say that will certainly meet with sympathetic consideration. Then, as to the point raised by the hon. Member for Liverpool (Mr. Watson Rutherford), perhaps I may be permitted to emphasise the fact that the limitation of numbers is not the limitation of their number now, but of the number when the society applies to be an approved society. He instanced the Liverpool railway clerks, with some 3,000 members.
§ Mr. WATSON RUTHERFORDIt was not the Liverpool railway clerks. I referred to the Liverpool Clerks' Society.
§ Mr. MASTERMANUnder this Bill those with under £160 a year will be insured, and surely the Liverpool Clerks' Association will have no difficulty in doubling its members and getting over 5,000 so as to become an approved society.
§ Mr. WATSON RUTHERFORDThe hon. Member does not see that the society would be wiped out of existence to start with.
§ Mr. MASTERMANI really cannot follow that argument. When a society asks to be approved it presents 5,000, and a society which now has only 500 members may bag 5,000 and obtain approval. If that is not made clear it ought to be made clear.
§ Mr. WATSON RUTHERFORDSupposing they cannot get 5,000?
§ Mr. MASTERMANThen they will come under one of these Clauses, and they can link up with a clerks' association in another town. I do not know whether Manchester and Liverpool would come together, but, if not, the society can come in the county borough of Liverpool.
§ Mr. WATSON RUTHERFORDDoes the hon. Member suggest the Liverpool Clerks' Association should be linked up with some agricultural society?
§ Mr. MASTERMANIn any sense, if they linked up with an agricultural society they would form part of the county pool of the county borough of Liverpool. They could also link up with any other clerks or trade society in Birkenhead, and so obtain any special advantage the hon. Member may think a clerks' society obtains under this scheme. There would not be any difficulty in obtaining 5,000 members. I think I have answered specifically the questions put to the Government.
§ Mr. G. THORNEThe hon. Member has not answered the question I ventured to submit to him with regard to societies numbering between 1,000 and 5,000. The Commissioners might have a reasonable discretion to take any one of them as an approved society if by reason of the length of time they have been established their management and their stability qualify them in the Commissioners' opinion or discretion to be accepted. It is only a matter of discretion.
§ Mr. MASTERMANThat is a suggestion made by several Members in the course of the Debate, and the Chancellor of the Exchequer authorises me to say the Government will certainly give it their serious consideration.
§ Mr. WATSON RUTHERFORDThat is what I want.
§ Sir RYLAND ADKINSIn the case of densely populated counties, like Lancashire or the West Riding of Yorkshire, supposing you have in county boroughs near together or in urban districts of considerable population a number of small societies which would not naturally group themselves under a particular class of society, but which could easily be grouped so as to form a total of more than 5,000, are they to be in the county pool for so large an area as Lancashire or the West Riding of Yorkshire, or may they form a local pool of two or three boroughs put together?
§ Mr. MASTERMANCertainly. All those who want to live together can live together. These particular Clauses are to save those little societies which otherwise might be entirely left out in the cold. The object of the Clause is to do that. The Committee are not committing themselves by voting out this 10,000 limit to any specific limit. That will come on afterwards. I think we may congratulate ourselves, that so far as the main desire to save these small societies is concerned, the Committee is approving of the action of the Government.
§ Mr. SANDERSONI was delighted to hear the closing words of the Under-Secretary with regard to the promise that the Chancellor of the Exchequer is going to give consideration to the suggestion made by the hon. Member opposite. May I just give the Chancellor of the Exchequer a concrete instance, because I think it is more useful than speaking in general terms. All parts of the House feel the keenest interest in these small societies. There are many in my constituency in a state similar to that society already mentioned. I will just take, for instance, the United Horticultural Benefit Provident Society. It is a society which will comply with every single requirement in this section except the number limit. It has been in existence for forty years, it is absolutely solvent, and it has been thoroughly well managed. If I understand the Clause which the Chancellor of the Exchequer engages to substitute for this Clause, it might, if it could find societies with kindred objects, join in an association. I should think a society of this kind would find it very difficulty to find sufficient societies with kindred objects to enable an association to be formed, because to form an association under this Clause there would have to be 5,000 members. What is the other alternative? If it cannot find a sufficient number of societies with kindred objects, which will allow it to join by bringing up the members to 5,000, then it has to come into the group compulsorily to become an approved society, and it is subjected at once to the most objectionable provision. Although it is a perfectly solvent society, and has been solvent for the last forty or fifty years, it has got to divide its surplus with other societies who have a deficit.
§ Mr. LLOYD GEORGENot its present surplus.
§ Mr. SANDERSONWhy should that be? I would submit with the greatest respect to the Chancellor of the Exchequer that is a most objectionable provision.
§ Mr. LLOYD GEORGEI do not think the hon. Member realises there is no need to divide its present surplus funds. It is not called upon to do so. It is simply the surplus that arises under the Act.
§ Mr. SANDERSONI quite agree. I appreciate that. I was only talking about the surplus that is going to arise in future from the subscriptions of this society, but 352 that does not seem to me any answer to my point. You have a society that has been well managed in the past, and consequently has got a considerable number of members and is in a position to have surpluses in the future. It has got to divide any future surplus with other societies that cannot produce a surplus. It seems to me this is a very good instance in support of the appeal which was made to the Chancellor of the Exchequer with such force by the hon. Member who spoke just now, asking him to consider, with regard to existing societies, why there should not be an inquiry made by the Commissioners. I suppose there will be no difficulty about the machinery, as regards any existing society, for an inquiry into its state, the length of time it has been in existence, and the amount of good it is doing; and if the inquiry results satisfactorily why should not that society be allowed to continue to exist in the future? I see no reason why it should not. I appeal most earnestly not only on behalf of the society I have named, but on behalf of other small societies whose interests, I think, are not sufficiently safeguarded by the provisions which are now proposed to be substituted for this part of the Bill.
§ Mr. AUSTEN CHAMBERLAINI do not want to travel over ground covered by other speakers, but I would remark that the Debate has shown a very considerable amount of agreement. Shortly, the views of the Committee are that we should admit societies of as small numbers as are consistent with safety, but that you must not make your numbers so small as to leave your risks distributed over too narrow an area, so that local and accidental circumstances may upset the financial soundness of the society. That is a general statement on which I think the whole Committee is agreed. The difficulty is in carrying it into effect. I only want to call attention to a couple of matters which arise out of what has already been said. The Chancellor of the Exchequer has admitted that he will have to alter the form of words in his proposed Clause in order to carry out his own intentions, and to admit denominational or other societies which have no local or trade character to the benefits he intends them to enjoy. I regret that there should be denominational societies, but I quite understand that where men are joined together by religious agreement and by a desire to improve the moral and social condition of the people, 353 as well as to propagate their particular religious views, it is natural that to do so they should make use of every means at their disposal, and the formation of societies of this kind has been one of the means of keeping their members together, of rendering them independent, and of in every way forwarding their moral and social advantage. I do not wish to be taken as criticising or as speaking in an unfriendly way of these societies, but I do not think we ought to make an exception in their case, because there are other societies with generally similar characteristics spread all over the country, and the new form of words, in my opinion, ought to be sufficient to include them. As was suggested by the hon. Member for Colchester it ought to be possible for Holloway societies to combine together if they desire so to do. I want the Chancellor of the Exchequer to consider what is to be the position of societies with no local limitation if one is charged with mismanagement. Hitherto the assumption has been that the question of mismanagement is to be judged privately by the local health committee. But I do not think the local health committee can decide a question which is not a local question. I hope I have said enough to show to the right hon. Gentleman that the alteration of his Clause and the Amendment he will have to introduce in order to properly work his new proposals must be a little wider than has been disclosed in the course of this Debate.
As regards numbers, I feel there is great force in the suggestion of hon. Members that you may fix a number for the future and yet may make some exception for existing solvent societies. It may be desirable to fix a limit for the future that will exclude some of the existing societies, but it does not follow that it is desirable to destroy those societies, or even to force them to give up their separate existence. I am very anxious that that suggestion should, as has been promised by the Government, receive very careful and favourable consideration. But let me remark, in passing, that this question of numbers gains additional importance because of one feature of the Bill which has not been mentioned up to the present time. There are a great number of people especially active in the management of friendly societies whose public life is a friendly society life, and who look on it as the duty they can discharge to the community in which they live, and who give a great amount of unpaid, or at any rate, entirely inadequately 354 remunerated service to those societies. Among these men you will find there are a great number of double and even treble insurers. They are interested in several societies, and I am not at all certain, when this Bill comes into operation, that these people may not be forced to consider whether they shall continue their present practice, because of the proviso in Clause 27, which prevents a man getting the full benefit of his premiums in the manner prescribed by the Bill if that would bring his sick pay above his ordinary wage. I quite understand the reason for putting in a provision of that kind. But the men of whom I am speaking are not men who shirk, or malinger, or do anything of that kind. They are men who believe in a high standard of comfort, and who try to provide that sickness shall make no difference in their homes. These men will feel it a great hardship if they are compelled to accept something less than they have been accustomed to. They have made great sacrifices in order that, if sick, there shall be no stint of food in their homes or in regard to the education of their children. They are in fact among the most thrifty of men. I think that the number of members of societies may, in consequence of this, be reduced under the Bill, and I hope that point will be borne in mind when we come hereafter to decide what the exact limitation of numbers is to be.
The other consideration to be borne in mind is this. There is no doubt great force in what Government speakers have said as to the enormous accession of insurance which the Bill will bring about, and as to the rush to join friendly societies in good repute. Of course, men who are forced for the first time to insure will give their preference to a particular society over the Post Office contributor scheme, and that no doubt will bring a great accession of new members to many existing societies. But that can never occur again. You are now making it impossible for new societies to start. The hon. Member for Durham City has spoken of the case of women's trade unions which at present are in their infancy. Every woman that works will have to insure. If she is already a member of a womans' trade union, which is admitted as an approved society, she will very likely choose to make her insurance under this Bill through that society. But there are many women's trades which are not organised at all, although everybody interested in women's work looks forward to their being organised in the future. All these 355 people will have to be included when the time comes. They will be included in different friendly societies, but it will be very difficult to get together the numbers that are required, or to get them to transfer themselves. I think this difficulty may apply not merely to trade unions, whether men's or women's, but to societies and friendly societies of a class which is very much stereotyped by the Bill as contemplated at present. The Bill rather stereotypes the existing number of societies in the sense at any rate that you make it very improbable, after it comes into force, that new societies will be created. You will not have the same freedom as before. Once this Bill is in force you will practically be confined to the societies which this Bill has admitted or will readily admit. I want the Government, in dealing with questions which are raised indirectly by the omission of this Sub-section which we are now discussing, to deal with them more directly by the Clause which the Chancellor of the Exchequer proposes to substitute for it.
§ Mr. LLOYD GEORGEI have very little to add to what my hon. Friend the Under-Secretary for the Home Department has said, but I should like to answer two or three of the points made by my right hon. Friend opposite. The right hon. Gentleman stated very clearly the principle which underlies this proposal for grouping the small societies, and I accept his statement, not merely as expressing the views of the Committee, as indicated by this Debate, but as embodying the view of the Government. We certainly accept it as the principle upon which we are to proceed. The right hon. Gentleman has pressed two points on the Government. The first is as to the desirability of recognising old-established societies without any regard to numbers.
§ Mr. AUSTEN CHAMBERLAINNot without any regard, but of giving elasticity to old societies—to old and sound societies, which will not be needed in the case of new societies.
§ Mr. LLOYD GEORGEI have been very favourably impressed with that suggestion, which has been mentioned in several quarters of the Committee to-day. The only caution I administer is this, that you must take care in carrying out this principle to avoid the danger of grouping together weak societies. That is a real danger. If you pick out the eyes, the 356 best societies, you will leave nothing but a group of societies all more or less working inefficiently. There is nothing to be gained by that. I thought that the whole principle of friendly societies was that the strong should help the weak. That is the object of this grouping. You should be able to average the risks. If you say we will pick out one society at Dunmow because it is strong. Saffron Walden comes along and says, "We should like to be put in the same position." If that were done every strong society would have an independent existence. That is not desirable. The longer lived and more experienced these societies are, the better they are managed, and the more desirable it is that they should be brought to assist the county group and assist the smaller societies to pay their way. I hope the Committee will bear that in mind before it decides upon eliminating all these societies. The right hon. Gentleman (Mr. Austen Chamberlain) raised a point as to women's trade unions. He is afraid that when a women's trade union is formed in future it may be excluded from the benefits of the Bill, or that the women will be compelled to join other societies instead of having their own union recognised. I should have thought it was far more desirable that in these circumstances the women's trade unions should associate with kindred associations throughout the country. I think that is the view taken by the trade unions themselves, and they are in favour of it deleting this provision because they are in favour of gathering together all the smaller trade unions into some powerful organisation.
§ Mr. LLOYD GEORGEThat is what I want to know. I cannot see why it is not.
§ Mr. HILLSI do not think it is possible always. I am speaking of the small, newly-formed unions. They are very small and scattered, and they are not strong enough yet to affiliate, and yet I think they ought to have a chance of standing upon their own feet.
§ Mr. LLOYD GEORGEThe smaller they are, the weaker they are, and the more desirable it is that they should associate with the older unions that have greater experience and some sort of financial backing. Supposing you form a perfectly new trade union of women workers, that will be a very weak one at first, but if you had an affiliation already in existence of women's trade unions the 357 first thing would be to apply to that union in order to enter it. Is that not a much better thing? They would have the assistance of that union in conducting their own union, and it would be a great advantage in every respect. If you want to make these unions strong, the one way is to make them federate together. If you have small unions, with a small number of members, without any experience or finance behind them, it is infinitely better that they should apply to enter a strong association of this kind. That is the view the trade unions have taken, and I think wisely taken, in regard to this Clause. The right hon. Gentleman referred to double insurance. I have to make an announcement with regard to that. A good deal of pressure has been brought to bear ever since the Bill was introduced in regard to this matter. I have been very reluctant to give way in regard to it, because the statistics given to-day by my right hon. Friend the Member for Spen Valley (Sir T. Whittaker) show that the higher the insurance the longer the sickness. But the pressure has been very great in this respect, and what we have decided to do is to leave it to the society itself to make its own arrangements. If a society wishes to protect itself against double and treble insurance which would give a man more money when sick than when sound, then that society should do it. Let each society make its own rule in that respect, rather than we should make it a statutory provision. We shall probably to-night put an Amendment on the Paper which will leave it to the societies themselves to decide.
§ Mr. DUKEWill that safeguard existing rights? I suppose that every hon. Member has a great deal of correspondence from men who are members of two or three societies and who have a great deal of apprehension as to the extinction of one or two small societies or their being cut out from the operation of the Bill. Is there to be any safeguards for existing rights?
§ Mr. LLOYD GEORGEThe Bill leaves them existing as they are at the present moment. By leaving out these words we become neutral in the matter.
§ Mr. LLOYD GEORGEWe become neutral, and leave it entirely to the societies, and the man must be bound by the rules 358 of the society he joins. Each society must decide for itself. Another point was raised by the right hon. Gentleman (Mr. Austen Chamberlain) as to the grouping of societies. I agree with him that you have the Holloway societies that are scattered all over the country. Sometimes you have a very powerful group of Holloway societies in a single county—in Wiltshire and Gloucestershire, for instance. Where you have societies scattered you must leave it to each of the federations to exercise the powers now given to the local health committee. I am indebted to the hon. Member for South Wilts (Mr. Charles Bathurst) for this proposal. He was the first to suggest this county grouping. I think it is the best way out of the difficulty, and I do not think it would be fair if I did not acknowledge to the hon. Member that he has made a most valuable suggestion, which will undoubtedly improve the Bill and will get the small societies out of the difficulties which have arisen.
§ The CHAIRMANI think, as I said at the outset, I have allowed the Debate to go beyond the strict limits of order, because I thought it would have a good result in the interests of business. I hope the Committee will be ready shortly to dispose of this matter.
§ Mr. AMERYI wish to mention a point which arises from the Chancellor of the Exchequer's first speech. In dealing with the deficiencies of small societies when due to mismanagement, he contradicted my suggestion, that they would be entitled to require the employers to pay that amount and then levy from the workmen in the usual way. I submit, looking at Clause 31, that I was right on that matter. I do not wish to argue the general question of that Clause, because it would not be in order, or of the inconvenience it might cause to the employers. I would remind the Chancellor of the Exchequer that when on Clause 4 my hon. Friend the Member for Colchester (Mr. Worthington-Evans) moved an Amendment which would have been of great benefit to friendly societies and would have enabled them to get their contributions direct, he rejected it solely on the ground of the inconvenience caused to employers. With regard to the small societies, might I suggest to the Chancellor of the Exchequer that in their case at least, Clause 31 should not apply, and that they should not be entitled where a deficiency arises from mismanagement to cause employers inconvenience by making a distinction in the amounts drawn from 359 their workmen? The Chancellor of the Exchequer said that it is a purely voluntary matter whether the societies should increase the levy or reduce the benefits, and it was just as likely to be done one way as the other. Did the Chancellor of the Exchequer really mean that? Surely he knows that in the one case, by reducing the benefit, they would reduce the advantage of the State's two-ninths, and that by increasing the levy they would get the full advantage of the State's two-ninths? May I present the Chancellor of the Exchequer with that valuable example of the difference which was pointed out by the hon. Member for Colchester between the two-ninths and 2d.? Last night I did make certain charges against the Chancellor of the Exchequer while unfortunately he was not in his place. I do think here, again, we have an instance where, I think deliberately—I can hardly conceive in ignorance—the Chancellor of the Exchequer does conceal material facts from this Committee. It is a very important matter. I was charged with ignorance, and he said I raised an entirely immaterial point, because it was a purely voluntary matter. It is not a voluntary matter. In practice, in the case of a deficiency, the society is compelled to increase the levy unless it wishes to forego the full State contribution. I think that is a material point for discussion.
§ 7.0 P.M.
§ Sir RANDOLF BAKERThere is a question with regard to the new small societies which I wish to raise. Is there anything in this Clause which prevents new societies being formed for the purpose of coming in and being affiliated with the county groups? It appears to be a very dangerous thing if we should permit any small body of men in a town hall or tabernacle joining together to form a society and taking weak lives and then coming into the county pool, knowing that they could not lose under it if there is a deficiency, because it would come out of the large societies and not out of their own pockets. Has the Chancellor of the Exchequer considered the question of new small societies coming into county pools in this way? One point made by the Chancellor of the Exchequer is scarcely justified. He suggested that the position of small societies is always weak unless they are backed up by the big societies. It is a mistake to say that because some societies are small they are not sound financially. There is the case of the Apple-360 borough United Provident Society, which has about 100 members and a reserve of about £4,000, or £40 per head, whereas in the case of the Oddfellows it is only £16 per head. The position of a small society is often better than that of a strong society. I hope there will be no chance of new small societies being formed to come into the county pool, and then if they have a deficit, owing to bad management or to bad lives, being allowed to get hold of the funds of the stronger society. I hope the Chancellor of the Exchequer will consider this point as to whether it can be provided against in this new Clause.
§ Sir J. SPEARI cannot refrain, on behalf of several small friendly societies in my Constituency, from thanking the Chancellor of the Exchequer for the provision which he has made to meet the particular conditions of those societies. I have seen the work they have carried on for many years and it would be a calamity if, in establishing a national scheme of insurance, it was made impossible for societies such as have been put forward this afternoon to exist. I know, and agree, that some of the village clubs in years gone by have failed at a critical time, and the effect that has befallen the old people thereby has been disastrous, but I would point out in defence of those societies that that has arisen from the introduction of better systems, such as the Oddfellows and philanthropic societies. The young men joined them, and the old clubs died out. I do not think it was from any extravagance or from any mismanagement. I strongly approve of the Chancellor's proposal to utilise half the surplus from the national funds to aid the smaller societies which have experienced deficiencies through no mismanagement. The hon. Member (Mr. Sanderson) differed from that part of the Chancellor's scheme. I think he is wrong in taking up that position, because we know that epidemics fall on a district and inflict great liabilities on clubs, and, therefore, the pooling of one-half of the surplus arising from the national funds, to be utilised to meet the abnormal conditions of any given branch, is in my opinion a very sound policy. I am glad to know that there is no proposition to confiscate the accumulated funds of these societies. They have been accumulated by much self-denial and much frugality, and it would have been unfair and unjust if these accumulations had been confiscated. Instead of that we see plainly that they are being 361 used for extra benefits for the members of the club. I could not refrain from giving expression to my appreciation of the action of the Chancellor in doing away with the great evil which would have resulted from the Bill as first introduced, namely, the destruction of these valuable small societies throughout the country, which have been rendering great service to humanity and to the people affected. I will appeal, if I may, to the Chancellor to still further reduce the numbers of the larger societies. If he could see his way clear to accept a society with 1,000 members, I believe he would add greatly to the popularity of the measure and so to its utility.
§ Amendment agreed to.
§ Mr. MASTERMANI beg to move to leave out the words "be precluded by its constituting from distributing any of its funds otherwise than by way of benefits (whether benefits under this Act or not) amongst its members," and to insert instead thereof the words, "not being a society carried on for profit."
This Amendment, with the Amendment later down on the Paper, was fully explained to the Committee on Tuesday night. It is to insure that both the societies which were included originally under Sub-section (1), and the societies which were brought in by the Amendment carried on Tuesday night, shall have, as one of the conditions for recognition, that they shall not be societies carried on for profit.
§ Question, "That the words proposed to be left out stand part of the Clause," put, and negatived.
§ Question proposed, That the words, "be precluded by its constitution from distributing any of its funds otherwise than by way of benefits (whether benefits under this Act or not) amongst its members," be there inserted.
§ Mr. AUSTEN CHAMBERLAINAre not these words wider than is intended? The Chancellor of the Exchequer has always said, and as I understood with the general acceptance of the Committee, that no society was to make a profit out of this part of its business. That is an unexceptionable statement. Clearly no society can be allowed to make a profit out of these compulsory levies, or out of the State contribution, but is a society to be prevented from making a profit at all under any circumstances or from any 362 sources? I do not think that was the intention of the Chancellor of the Exchequer. I am not quite clear whether it is not the effect of the Amendment.
§ Mr. MASTERMANIf the right hon. Gentleman looks at the Amendment which has been carried to the first Sub-section of Clause 18 he will see that the society which must not be a society carried on for profit is the particular branch which is the approved section of the general society.
§ Question put, and agreed to.
§ Mr. MASTERMANI beg to move, to leave out—
(iii) Its affairs must be subject to the absolute control of its members;(iv) Its constitution must provide for the election of all its committees, representatives, and officers by its members,and to insert instead thereof—(iii) Its constitution must provide to the satisfaction of the Insurance Commissioners for its affairs being subject to the absolute control of its members being insured persons, or, if the rules of the society so provide, of its members whether insured persons or not, including provision for the election and removal of the committee of management or other governing body of the society, in the case of a society whose affairs are managed by delegates elected by members by such delegates, and in other cases in such manner as will secure absolute control by its members.
§ 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. BARNESI beg to move, in the proposed Amendment, to leave out the words "or, if the rules of the society so provide, of its members whether insured persons or not."
We have reached, it seems to me, the second step the Chancellor of the Exchequer seems to be committed to in the way of a transformation of this Bill on the question of approved societies, and we think it is a transformation which is altogether contrary to the speech of the right hon. Gentleman in introducing the Bill, and contrary to what most of us have been in the belief up to the last week or two 363 was to be the character of the Bill, and, so far as I am concerned, at all events, my attitude will be altered towards the Bill if these Amendments are carried. I think it is quite unnecessary to remind the House that when this Bill was introduced it was said that, so far as the approved societies were concerned, they were to be what might be called the democratic organisation of the country known as trade unions and friendly societies. Many of us were induced to vote for the Bill, although it was a contributory Bill, because we thought it carried with it democratic control on the part of the friendly societies and the trade unions, and we accepted contributions and democratic control rather than a non-contributory scheme and bureaucratic control. Now we find we have got neither. We submit to the House that if these Amendments are carried they entirely alter the Bill. There is no more democratic control now if these Amendments are carried, and, as a matter of fact, we believe the control will be largely turned over to other than democratic organisations—to organisations carried on for quite different purposes from those contained in the four corners of this Bill.
That, I say again, is contrary to the professions of the Chancellor in introducing the Bill, and quite contrary to the objects of the Bill as set out by the hon. Member (Mr. Chiozza Money) in a pamphlet published a few weeks ago which had a foreword in it from the Chancellor of the Exchequer. I should have thought that the Chancellor's foreword would more or less have committed him to what was contained in the pamphlet. The author of the pamphlet makes a statement that the trade unions and the friendly societies were to be benefited by this measure. That is quite true as the Bill was introduced. The Sub-sections to Clause 18 laid down certain conditions which, on the whole, could be complied with by the trade unions and friendly societies, but which could not be complied with by any stretch of the imagination by the collecting societies or the industrial companies which are now going to figure in it. In fact, I think the Chancellor, in his speech in introducing the Bill, specifically excluded these companies, which were dealing with death benefits, and I think quite rightly, because, after all, the Bill does not deal with death benefits. There was a great deal of controversy last year, I remember, when the Bill was under dis- 364 cussion, or when it was stated that it would include death benefits as to the vested interests of those carrying on that particular line of business, including the collectors. But the Bill does not touch the death benefits, and we were all led to believe that those people whose field that had been up to now and who were still going to keep that particular field would be kept out of this Bill altogether. That was the impression conveyed by the Chancellor's speech, put, I believe, in so many words, and that was the impression given by the pamphlet that I have just referred to, and it was the impression that nine men out of ten in this House had up to a few weeks ago.
What has happened? I do not know the influences which have been brought to bear on the Chancellor of the Exchequer. I have my own ideas, but whatever these influences may have been, they have been of such a character as to induce him to entirely alter this Bill. We are going to have the industrial insurance companies coming in, and not only so, but we are going to have them coming in on far more favourable conditions than the trade unions or the friendly societies. [An HON. MEMBER: "No."] That is my opinion, and I will state my reasons for coming to that conclusion. In the first place, let me say that you have already, by an Amendment adopted on Sub-section (1) of Clause 18, admitted honorary members. This particular Amendment of the Chancellor of the Exchequer proposes to give the honorary member—that is a person not insured—an equal right with the person who is insured in the control of a society. It is not difficult to see what will happen. I have seen it stated somewhere within the last few days that honorary members may equal or exceed the number of insured persons in a society. There is nothing in the Amendment to prevent it. But we need not go so far as that. The non-insured may not be more than 10 per cent. or 1 per cent. of the members, but they are to have a voice in the control of a society with the insured members. Therefore the honorary members may control those sections that are to be set up, and that, I say, would be getting away from the spirit of the original Bill, as we have been led to understand it, and it would be altogether unfair. I submit that these industrial insurance companies will now enter, and indeed they have already entered, the field against trade unions and friendly societies. They will have an immense advantage over trade unions and 365 friendly societies. They have 100,000 men perambulating about the country every day, calling at each house once a week or once a fortnight, as the case may be, according to the period for the payment of the premium. The trade unions and friendly societies seldom see their members. As a matter of fact forms have already been prepared by these insurance companies which they are now submitting. They ask that, in the event of the Bill becoming law, their members should become members of the industrial insurance companies, and therefore the trade union and friendly societies would be deprived of them. I say that is unfair. I have seen a copy of the form to which I refer in a newspaper which is largely run in the interest of industrial insurance. I submit that will entirely alter the character of this Bill.
§ The CHAIRMANMay I point out to the hon. Member that an Amendment has already been adopted dealing with the question of industrial insurance companies. The point that arises here is whether or not honorary members should have votes or control in the management. The Committee have already decided that industrial companies may form sections for the purposes of this Act. The matter now open is whether other than insured persons should have votes or control in the management. Will the hon. Member confine himself to that point?
§ Mr. BARNESI will endeavour to confine myself to that point We already have honorary members in. Some friendly societies and trade unions already include honorary members, but, so far as I know, they come in merely as an indication that they sympathise with the friendly societies or the trade unions. I myself am an honorary member of one or two friendly societies, in addition to being a full member of a friendly society and a trade union. The honorary members in those cases to which I have referred do not seek to have any control in the society. They come in to show their goodwill, and to give their advice if it is sought. [An HON. MEMBEE: "They take office."] No, they do not take office. I do not know a single case of that. The hon. Member may know of some, and if he does perhaps he will let us have the names. So far as I have any experience or knowledge, honorary members of trade unions and friendly societies come to show their goodwill and to give their advice, if necessary, but to take no benefit from the society, and to have no voice or control in 366 the management of the society. The proposal now before us is quite different. The proposal in the Amendment moved by the Under Home Secretary is that these honorary members can come in and have a voice in the control of the sections in exactly the same way as the insured persons in those sections.
Under that provision what will happen will be this. An honorary member will be a director of an industrial insurance company, and he will see that his name is put forward as one of the committee of management of the section. It has been said that a trade union official would be barred but for this Amendment. I do not know whether he would or not. I am not so far satisfied he would, although I have heard a great deal said from the Front Bench. But if he would be excluded but for this Amendment, why not make prevision for him in a more simple way than this? The object of setting up sections is to respond to influences brought to bear on the Chancellor of the Exchequer by those interested in industrial insurance companies. I say the effect will be to give the honorary member equal power with an insured person, and to get away from that democratic control on the part of the rank and file which, we understood, was the object of setting up these sections. There has been a good deal said about the interest of collectors in this matter. I daresay that every hon. Member has been subjected to a great deal of pressure from the collectors, who have said that they are going to make money by being included in the four corners of this Bill. They may think that they will make a little money. I have seen it stated that in the event of a collector getting 200 new members he will get £10. If he gets £10 in that way, and ultimately £20 or £30, I believe that will be deducted from his wages by the directors of the insurance company. It is for these reasons that I move the deletion of the words stated in my Amendment. Honorary members are in now, and we cannot get away from that, but we can prevent them from taking office and having an equal voice with the men who form the rank and file, and who control the societies or the sections set up. The proposal of the Chancellor of the Exchequer is full of danger, and I hope the Committee will discuss the matter and thoroughly understand its bearings. I feel sure that if the Committee understand the position, the Amendment will be further amended.
§ Mr. LLOYD GEORGEI also hope that the Members of the Committee will thoroughly understand and appreciate the full effect of this Amendment It really is an attempt to go back on the decision which the Committee arrived at on Tuesday, and which enables those societies to come in. Without those words which the hon. Member proposes to omit the whole effect of that decision would be neutralised. We think that those societies should come in, and that experienced men, whether trade union officials or men who are engaged in industrial insurance, should be able to give the benefit of their business experience, but they will not be allowed to have a voice in the control of the societies. I cannot conceive anything more disastrous than a rule of that kind which the hon. Member desires. Take the friendly societies. Under this Amendment the men who really run those friendly societies will not have any voice in this branch of the society's business. They will have to confine themselves exclusively to the part which is outside the administration of the Act. They could not be on the committee of management, and they could not be permitted to express their views. The vote is a small matter. There would only be a few hundreds out of several millions. What does happen? They will be able to sit on the committees of management to give the benefit of their experience. The hon. Member's Amendment means that no man getting over £160 a year would be able to have a seat at all on the committee of management. Take the Manchester Unity. Supposing they wanted Mr. Watson on the committee. He could not sit at all if this Amendment were accepted. In the case of the Foresters, Mr. Lister Stead, one of the ablest men in the friendly society world, could not sit on the committee. The same thing would apply to trade unions.
§ Mr. LLOYD GEORGEPerhaps the hon. Member will explain.
§ Mr. HODGEThe trade union secretary sits on the management committee to advise, but he has no vote.
§ Mr. LLOYD GEORGEI am fortified in my view by the Attorney-General. My hon. and learned Friend tells me that if this Amendment is carried, trade union secretaries will have no right to take part in the proceedings at all, or to sit on the committee of management. What is the 368 good of my hon. Friend's contention, when the legal interpretation which we get is that they cannot sit there at all. The vote is of very little consequence in a matter of the kind. What really matters is that they should take an effective part in the management. I hope that my hon. Friend, now that he understands what the Amendment means, is going to support me. It means this: that a trade union official if he is in the habit of sitting upon the distribution of benefits, cannot do so any longer. He will be ruled out. The moment the question of the benefits under the Bill arises the chairman will say, "Please leave the room." Surely that cannot be the contention of my hon. Friend. In his proposal he is inflicting a deadly blow at the friendly societies' work. It is of primary importance that all these men who are better paid than £160 a year should be there to assist in this business. I am not going to press upon the House, but I think I should state the fact that as regards the industrial insurance companies, the collecting societies, the dividing societies, and the trade unions, this is the agreed compromise between them. They all agreed about it. The friendly societies are just as keen about it as the collecting societies, and, unless something of this sort were provided, none of them would take part in the management. Surely that is not the contention of my hon. Friend.
§ Mr. AUSTEN CHAMBERLAINI do not wish to add anything to what the Chancellor has said, save that I desire to make my own position clear. We have decided, rightly or wrongly, that all these industrial, collecting, and dividing societies should, on fair terms and proper conditions, have the opportunity of being admitted to a share in the working of the Bill. For my part, I think that was a right thing. Whether it was right or wrong, I am quite clear that we ought not to revoke it in an underhand way. I urged that it should be done on the Second Reading. I thought it was only fair that in the general framework of the Bill these societies should have as much opportunity for doing this work as other people, and I am not willing now, under cover of an Amendment to an Amendment, to destroy the value of the opportunity which we deliberately gave at an earlier stage.
§ Mr. J. H. THOMASI think that the legal argument which the Chancellor has introduced is no argument against the 369 Amendment of my hon. Friend, but rather clearly proves what influence the insurance companies have exercised in dealing with this matter.
§ Mr. LLOYD GEORGENo.
§ Mr. J. H. THOMASWell we will see. I think I can speak with much more experience than the Chancellor with regard to the part that either an official or an honorary member exercises in the management of an organisation. There are 2,000 honorary members of my own society. Incidentally the majority of the Members of this House are honorary Members. It may be because of their interest in the organisation or it may be in order to establish a connection in the constituencies, but in any case they are honorary members. But there is no honorary member who either attends a branch meeting or takes part in the branch business or exercises any control whatever in the conduct of the organisations. They have no vote and no control, and they are going to have it under this particular provision. With regard to trades union officials and the officials of the friendly societies who, the Chancellor said, would be ruled out beforehand from taking any part in the management of the organisation, the simple answer is that there is no trade union official to-day but is a member of the organisation, not an honorary member, but an ordinary member. The officials of the trades unions do not manage, and there is no officer of a friendly society or a trade union who has a vote on the executive committee. They simply deal with a governing body, the executive committee.
So far as the insurance agents are concerned, I have every sympathy for them. It would have been a real hardship if anything in this Bill had ruled them out, because it is their living, but I am not prepared to do anything that would make the insurance agents simply tools of the insurance companies. That is the real difference in the position. Unfortunately pressure has been brought by them to bear on the members, and it has been brought to bear very largely through their own governors. It has not been so much by the free will of the agents as by the influence that has been exercised over them by their employers. The operation of this particular Amendment in my humble judgment will simply mean this, that it will enable any and every organisation, whether they are now in operation or 370 whether they are organisations to come in as a result of the Bill, to be democratically managed and controlled by the real paying members of the society, and will prevent undue influence being brought to bear by societies coming in not for the purpose of this Bill, but in order to subsidise and help another branch of their particular work. It is because I believe it would have that effect that I support the Amendment before the House in order to put every organisation upon an equal footing.
Mr. WORTHINGTON-EVANSI am going to oppose this Amendment and support the Clause as proposed by the Chancellor of the Exchequer, because I consider it will have a somewhat different effect from that indicated by the last speaker. At the present moment some of the best men connected with the management of friendly societies are small tradesmen, schoolmasters, and others who cannot become insured persons under this Bill. An enormous responsibility is going to be put upon the friendly societies of managing benefits for a much larger number of members. The moment you put this large additional work upon them, if you deprive them of the management, you are going to do real harm to insurance generally.
§ Mr. SHERWELLIf I may say so with all respect, I do not think that either the Chancellor of the Exchequer or the right hon. Gentleman the Member for East Worcestershire quite appreciates the point of the Amendment that has been proposed by the hon. Member for the Blackfriars Division. It is not a question in our minds of the propriety of imputing that friendly societies or we ourselves have any wish to go back on the decision of the Committee at all, even if it were possible; but what we wish to safeguard is that democratic principle of government and control upon which the Bill is professedly and, in respect of its other portions, really founded. As the Amendment of the Chancellor of the Exchequer stands, the determination of absolute control is left entirely to the satisfaction of the Insurance Commissioners. So far we have no sort of indication or general declaration as to what sort of recommendation or general idea of absolute control will be in the minds of the Insurance Commissioners when they decide as to this or that approved society, and it does seem to me that if the very important principle of full democratic control is to be safeguarded it can be done quite 371 easily. I admit I am very much surprised at the ruling which, I understand, the Chairman has given earlier, but if that be the strict interpretation of the terms of the Amendment as they stand, I think that the case could be met fully by giving honorary members a power of advice and assistance in guiding the affairs of the society, but rigidly excluding them from the power of voting. I very sincerely hope that the Chancellor of the Exchequer will see his way to safeguard that great democratic principle by seeing to it that the honorary members have no power of voting in connection with the affairs of the society.
§ Mr. SNOWDENI am sure that the House of Commons never heard a more extraordinary speech than that in which the Chancellor of the Exchequer opposed this Amendment. It only shows to what straits a clever man is reduced in striving to support a very bad case. He based his support of the Clause as it stands on the legal opinion of the Attorney-General. I have the highest regard for the legal knowledge of the Attorney-General, but I venture to say that it would not be too difficult to get the opinion of twenty eminent lawyers diametrically opposed to the opinion of the Attorney-General on that point. If the construction of the Clause is what the Attorney-General says it is, then it only shows what a bad Clause it is and how much it stands in need of amendment. The Chancellor of the Exchequer made the extraordinary statement that if the honorary members are not admitted to share in the management of the society, then the insured persons will not be able to command the services of outside expert knowledge. Surely that is ridiculous. The Chancellor of the Exchequer asked whether we desired to exclude the societies from getting the services of such an eminent actuary as, say, Mr. Watson. Does the Chancellor of the Exchequer mean to say that if the society, if it be composed of insured persons, is in a difficulty and wants actuarial assistance, it cannot call in the services of Mr. Watson? Of course it can. Suppose the society is in want of legal advice, the statement of the Chancellor of the Exchequer amounts to this, that it would be precluded from seeking legal advice to get out of the difficulty in which it may find itself. It is perfectly obvious what is the object of this. The object of these words which we are seeking to excise is really in order that 372 these approved societies may be placed under the control of the insurance companies through their agents. Every one who has a knowledge of the working of democratic organisations knows full well that the management of these societies is in the hands of a small number of men, and if you have an approved society composed of say 4,000 or 5,000 members in any particular district, the certainty is that not more than 200 or 300 persons at the outside will take an interest in the working of that society. What is going to happen in large town? Take a town like my own, Blackburn. There is one insurance company there which has something like 300 agents. It is going to be an approved society under this Bill because, as my hon. Friend the Member for Black-friars pointed out, the agents have already canvassed the members, and got their signatures, pledging the persons insured to making the society an approved society. All the agents of that company will become honorary members, and, therefore, the control of the society will fall entirely to these men. That most certainly will happen, and it is the purpose of this Amendment. If the Chancellor of the Exchequer wishes to avoid a certainty like that, he could easily do it by inserting other words, if ours are not acceptable, into the Amendment, providing that the society shall have the assistance of expert persons, but that those expert persons shall not have votes in the management of the society. Unless the Chancellor of the Exchequer is prepared to accept that suggestion, then there is no democratic control of those societies and he will have failed to stand by his pledge that there shall be democratic control.
§ Viscount WOLMERIf the Amendment to the Amendment be carried, the effect of it will be to break the existing organisation of friendly societies, and throw it on the scrap heap. I think the object of the House and of the advocates of the Bill is to preserve the existing organisation of friendly societies as much as possible. We cannot avoid making some distinction, but we do not wish to destroy—as hon. Members opposite seem to think we do if we admit honorary members—the independent character of friendly societies. The hon. Member for Huddersfield (Mr. Sherwell) has given us to understand that friendly societies at the present moment are not managed democratically, but if honorary members were to be excluded from the management of the societies what 373 would be their position? The hon. Member for the Blackfriars Division (Mr. Barnes) said that if the honorary members came in they would capture the organisation of the society and gerrymander it to their own liking. I admit that secretaries who have taken an active part in the work of a trade union and are authorities on this subject, but I do not think that those who have carried the whole working of friendly societies on their shoulders, in the villages and towns, ought to be excluded from those societies. You cannot split up societies into those who are working it, and those who are honorary members. They must be put on the same level. If this House desires to split every lodge into two, then I am sure it would be destroying the chief instrument by which this Bill could be efficiently carried into effect.
§ Mr. JOHN WARDIt seems to me that the Amendment to the Amendment may be as dangerous to officials of trade unions as the Amendment itself proposed by the Chancellor of the Exchequer. As I understand, if these words are struck out by the Amendment to the Amendment, then societies will only be capable of being managed by those who are insured persons. If that be the meaning of the proposal—but there appears to be some doubt about it, though evidently it is the opinion which has been given to the Chancellor of the Exchequer by the Law Officer of the Crown, that such would be the result of the Amendment to the Amendment—then I would submit that it certainly cannot be intended, because if these sections are to be controlled or managed only by insured persons and no one else, then it is a moral certainty that I myself should not have the slightest voice in the management of the section of my union, because I should not be an insured person. I daresay that would be the position of almost every trade union secretary in the country. The income limit of trade union officials would practically preclude them from becoming insured persons, and if nobody but insured persons are to have any voice whatever, then it is a moral certainty that we should be cutting off our nose to spite our face. I suggest that the proper way to deal with the matter, as was pointed out by the hon. Member (Mr. Barnes), is that honorary members might be allowed to work in such a way that the whole management would not fall into their hands. This subject was under dis- 374 cussion the other day, and the hon. Member for Blackfriars drew attention to the fact that we were really considering the power of the honorary member to interfere and manipulate, as it were, the scheme of this Insurance Bill in certain circumstances. I put it point blank to the Chancellor of the Exchequer that an honorary member might be appointed to give advice at meetings, or anything of that sort, but that we thought it advisable that he should be at least excluded from giving a vote at a meeting or a vote at a ballot. If you look at the Official Report you will see that the Chancellor of the Exchequer promised that such an Amendment should be made so that the honarary member might at least be precluded from taking part by voting at meetings, or of voting by ballot. If the right hon. Gentleman's attention is called to that part of the discussion a few days ago, he will see that he is not quite performing the promise he gave on that occasion. I can quite see the danger of the Amendment to the Amendment, which would exclude trade union officials, even if appointed, from any control in the business of those societies; but I can also see the danger that the admission of honorary members may be manipulated in such a way as to transfer the whole power and control from the regularly insured person to the honorary members, or to outside influence. For that reason, while I do not agree with the proposition of the hon. Member for Blackfriars, at the same time I can see a great possible danger that ought to be dealt with before we finally adopt the Amendment of the Chancellor of the Exchequer.
§ Mr. G. LOCKER-LAMPSONBy Clause 43 of the Bill, paragraph 3, approved societies are going to have the power of electing anybody they like to sit on the local health committee. Those bodies are going to have very wide powers indeed, and it is quite clear that the person appointed need not be an insured person at all. If you are going to give approved societies such very large powers, it does seem inconsistent not to allow them to appoint their own managers.
§ Mr. BOOTHI would like to clear up a misapprehension among some of my hon. Friends below the Gangway, because I am afraid there is some sort of prejudice as to certain societies which are considered capitalistic organisations. Hon. Members apparently think that in some way there is a preferential position for 375 those companies, though they cannot produce a single proof or any authority in support of that view. I think I am entitled to claim some knowledge of this subject, and I know that those who are most insistent upon this particular Amendment are the Holloway, the collecting and the dividing societies. Hon. Members are well aware of those institutions and their various forms of thrift. Dividing societies are being gradually diverted from the public-houses to the patronage of religious bodies, and I submit a clergyman, or a Nonconformist minister, or a temperance worker, or a man of some social position, who takes an interest in these dividing societies, marshalling the people together, trying to induce them to put a little into the Savings Bank and not spending it all at Christmas—men whose object is to lift up the dividing societies movement to a higher levels—ought not to be shut out from association with those organisations. Take the great national deposit institutions. Are you prepared to shut out the men who have the confidence of the members, men who have marshalled their funds, and who have induced hundreds and hundreds of workmen to make use of the means of thrift put in their way? Are you going to shut these men out from all action in connection with these societies? The Blackburn society has a membership of over 23,000. It is democratically controlled, more democratically than any other society in the country. Are the men who preside at the meetings, who go about advocating the society at their own expense, who persuade workmen to become members and adopt this form of thrift, are they to be shut out in the way now proposed? The hon. Member referred to capitalistic institutions. One of the finest organised societies in the whole world, and of which I am sure the hon. Member (Mr. Snowden) is quite proud, is the Blackburn Philanthropic Society, which has its quarters in his constituency.
§ Mr. SNOWDENThey are all Tories.
§ Mr. BOOTHI should have thought the hon. Member for Blackburn was much too wide in his sympathies, much too cosmopolitan and international in his attitude, not to have extended even to Tories a little comfort and encouragement in their endeavours to provide against a rainy day for their wives and families. I am no particular admirer of the Tories of Blackburn, and though certainly the majority of the 376 Blackburn Philanthropic Society are Conservative, that is surely no reason why their efforts should not be properly and justly appreciated.
§ Mr. SNOWDENI was not talking about them.
§ 8.0 P.M.
§ Mr. BOOTHThe hon. Member below the Gangway wants to divert attention to some mysterious capitalistic institution. I do not object to that at all, but the hon. Member must surely bear in mind that he is aiming a deadly blow at these democratic institutions much more than the insurance companies. I think the members of the Committee are well aware that as a rule capitalists and men of that position can get good advice and look after themselves, but I venture to submit that this Resolution is indispensable for the friendly organisations, the dividing societies, the deposit societies, and for all the voluntary societies, and, above all, for the trade unions.
When I saw the Amendment of the hon. Member to the Amendment of the Chancellor I immediately took the best advice I could get, and with general assent, solicitors, barristers, actuaries, Parliamentary draughtsmen said that the principal people who would suffer if that Amendment were carried were the trade unions, and particularly the Labour Members of Parliament. I ask the Committee to pause before they decide that those worthy Members of the House, who often contribute to our Debates and who are entitled to a prominent position even in a middle-class House, shall be kept out of those societies. When they have sufficient ability and sufficient knowledge to take a leading part in the proceedings of this House surely we must allow them to go into those approved societies of employed contributors, and also wield that mighty influence for good which is so potent in this Chamber. I would appeal to all the members of this Committee who want this Bill to succeed if those approved sections are to be formed that those of us who are making this law which will rule fifteen or sixteen millions of industrial toilers ought not to abdicate our own responsibilities. I appeal to hon. Member's to shoulder their own responsibilities and not contract themselves out of the service. I am pleading for a right-to-work clause for every Member of Parliament. I consider it is the bounden duty of each Member when this Bill comes to be administered in the country to give advice and assistance wherever it is wanted. So 377 as to approved sections connected with trade unions I appeal to hon. Members not to introduce a disqualification but rather to glory in the opportunity that when their labours in this House cease there is still another field to labour in, that there are still other societies as well as the House of Commons in which they may lake a leading part to the great service of the State, and to the great success of this measure.
§ Viscount HELMSLEYThere is one point to which I wish to call attention, and it does seem to me to be one of some importance. Some of the speeches in this discussion, more especially that of the hon. Member for Derby, rather cause alarm by suggesting that unless this Amendment were carried all the members who were honorary members of such societies, and one was mentioned with a total of 2,000, would usurp the control. As I read the Amendment of the Chancellor of the Exchequer, and I shall be corrected if I am wrong, the Amendment is purely an enabling Amendment. If the hon. Member would turn to the words "if the rules of the society so provide" he would see that it rests with the society whether honorary members should be admitted. Therefore if their Amendment was carried it would only prevent those societies like collecting societies who did wish to have their honorary members in control and management, and would not really make any difference to the friendly societies who have got that now. Therefore I do not see how any question of democratic management can possibly arise in this, because it rests purely with the society whether their rules provide that non-insured persons should partake in any control.
§ Mr. RAMSAY MACDONALDI should like to try and remind the Committee what the Amendment is that is before us. We have been told by the Chancellor of the Exchequer, on the advice and consent of the Attorney-General, that if our Amendment is carried to this Amendment that then it would be impossible for the ordinary members of the society to appoint their own manager. Surely that is altogether a misinterpretation of what is in the Amendment moved by the Chancellor. What is it we are proposing to do if our Amendment were carried? The Amendment, as moved, would then read something as follows:—
Its constitution must provide to the satisfaction of the Insurance Commissioners for its affairs being 378 subject to the absolute control of its members being insured persons, including provision for the election and removal of the committee of management or other governing body of the society.The committee of management or other governing body is not defined. When our Amendment has been carried, as I hope it will be, the effect of it will be this, that the absolute, the final, the sovereign governing body of the society will be the ordinary member, the insured member. Then the insured member can elect the trade union officials; the insured member can elect the general managing committee of the friendly society to be the managing committee of the friendly society as an approved society. That is as plain as a pikestaff. All the talk about leaving my hon. Friend the Member for Stoke (Mr. John Ward) out has nothing in it. If our Amendment was carried my hon. Friend would have as much authority in his trade union approved society as he as present in his trade union. There is no limitation placed here at all upon who are to be elected as the governing body. As a matter of fact, it is specifically laid down in the second line that the absolute control regarding election of this committee shall be in the hands—of whom? It is that "whom" about which the quarrel is. I do beg of Members on all sides of the House not to be misled by speeches like that of my hon. Friend (Mr. Booth), who evidently does not quite understand the Amendments, or he would not have made the speech he has just delivered. I am sure he has no interest in trying to keep words in which would be exceedingly dangerous from our point of view, but exceedingly beneficial from the point of view of shareholders of collecting societies. I am sure it must be a misunderstanding on his part in suggesting that it is absolutely necessary that those words, which are so beneficial from that point of view, should remain in, especially when the speech he made missed the whole point of our Amendments, and which, were it not by mistake he has made it, would altogether mislead the Committee.The question is, who is this "whom"? The Noble Lord (Viscount Helmsley) says that there is no occasion for alarm, that this is only an enabling Amendment, and that the actual operation is going to be determined by the rules of the society. Yes, but then the rules of the society are going to be drafted and approved by this "whom." That is the whole point. Your honorary member is going to elect himself as a voting member if this Amendment 379 goes through as it is on the Paper, and he is the very man against whom we desire to be protected as a voting sovereign authority which should come from the members themselves. So I am afraid the Noble Lord's suggestion docs not help us out of our difficulty. Our position is a perfectly simple one. We want the ordinary insured member to be the sovereign authority in his society. We want to give him authority to enable him to elect whom he likes to be a member of his management committee, be he the hon. Member for Pontefract or anywhere else. If our Amendment is carried that authority will be in the hands of the insured member, and I am perfectly certain that the Attorney-General never gave advice to the contrary. I am sure he did not, I know he did not.
The only point is, is your honorary member, who is not an insured person under this Bill, and who has not got the responsibilities of an insured person under this Bill, and who has not got the interests of an insured person under this Bill, and who, as a matter of fact, may be an honorary member representing interests totally opposed to the interests of the insured persons under the Bill, is he, and this is the point my hon. Friend made, and I am trying to emphasise, ought that man, ought that honorary member to have precisely the same governing authority that the insured person has? I say no. I am sure this House must know that I am in agreement with the Members who say that the management must be, and that the persons who determine and are going to control are the persons who are insured under this Bill and have got all the responsibilities. We desire the sovereign authority to be in the hands of the insured member, and if the Committee desires that that should be so it must vote for our Amendment. We desire that the insured person shall be able to appoint anybody he likes as his manager. If our Amendment is carried then this Amendment of the Chancellor, as so amended, gives him that power, and that is the situation we want to establish.
§ Mr. CECIL HARMSWORTHI sympathise with the views expressed from below the Gangway, because I think there is a very serious danger if this Amendment of the Chancellor is carried exactly as it is of persons obtaining control of the approved sections. It is a fundamental principle of this Bill that the major part 380 of the control should be in democratic hands. I entirely agree with my hon. Friend the Member for Leicester (Mr. Ramsay Macdonald) that there is very serious danger under the Amendment as it stands of that control falling into hands where we do not wish to put it. But I think the Amendment moved from below the Gangway goes too far, because I understand it would also preclude from control of the society members of trade unions, and here I speak with diffidence, and the most experienced men that they have at the present time. I have myself during the last few weeks been in close touch with some of the heads of the friendly societies, and they have all, without exception, expressed their fear lest under this Bill they should for the future not be allowed to take part in the management of the friendly societies. I hope myself that the Government will accept an Amendment to safeguard the interests of the heads of friendly societies who have so long done valuable work in that connection, and at the same time prevent any abuse in the control of the industrial section by persons financially interested and not mainly interested in the objects of this Bill, of the collecting industrial societies falling into the hands of people whom the committee does not wish to have control over them. I would impress on the Attorney-General the desirability of framing words with that object.
§ Mr. CAVEI am not in the least concerned with the honorary members of friendly societies. They have no vote at the present time, and they will not have any effective vote even if this Amendment is defeated. The point in which I am interested is the position of members of friendly societies who are not insured persons. If this Amendment is carried they will have no vote in the election of the committee of management. We were told by the Chancellor of the Exchequer that he had been advised by the Attorney-General that if this Amendment were carried persons in that position could not be elected on the committee of management. I should like to know whether the Attorney-General confirms that opinion.
§ The ATTORNEY-GENERAL (Sir Rufus Isaacs)I certainly agree. That is the view which I expressed to the Chancellor of the Exchequer and the view which, I am told, he expressed to the House. I think it follows from the words in the section, "subject to the absolute control of its members being insured persons."
§ Mr. CAVEThat view was challenged in a somewhat truculent manner by the hon. Member for Leicester (Mr. Ramsay Macdonald), and I was a little struck by the fact that no answer was given. The Attorney-General has made a very important answer, and it is quite clear now. The effect of the Amendment will be to exclude, not only from voting in the election of the committee, but from the possibility of serving on the committee all members of friendly societies who are not insured persons.
§ Mr. RAMSAY MACDONALDDo you agree?
§ Mr. CAVEWe were told by the Chancellor of the Exchequer that the friendly societies themselves have accepted the Amendment of the Government. Are we clearly to understand that they accept and approve this Amendment?
§ Mr. MASTERMANThe statement has already been made by the Chancellor of the Exchequer. I was at the conference at which, after prolonged negotiation, as a compromise between various societies this Amendment was accepted.
§ Mr. SNOWDENI wish to ask the Attorney-General two simple questions. As the Bill will stand with the Amendments, but without the further Amendment, will an approved society be able to pay for outside advice, say from an actuary? Secondly, will they be able to appoint as an official—say, as secretary—a person who is not an insured person or an honorary member?
§ Mr. PRICEI think it is scarcely fair that when a speech of the kind just delivered by the hon. Member for Leicester has been made no reply should be given to it, because it puts some of us in a very awkward position. We are bound to attach value to what the hon. Member for Leicester has said. We should draw a clear distinction in the case of men who are members of a trade society, who joined in early youth, who now perhaps are in a very good position, but still retain their membership. Everybody will agree that these men should remain on the management. But to bring in honorary members, mere outsiders, to take charge, is simply nonsense.
§ Sir RUFUS ISAACSI thought I expressed my opinion in the plainest language I could command in answer to the hon. Member for Kingston (Mr. Cave). 382 In reply to the questions put by the hon. Member for Blackburn (Mr. Snowden), there would be no difficulty in consulting an actuary or a medical man. The governing body, the committee of management, is quite entitled to take advice from anybody it chooses. But the question we are dealing with here is a different matter, namely, whether a person who is not an insured member of a society can be a member of the governing body. If the Amendment is carried, the effect, as I read it, will be that only insured persons can be members of the governing body. There is nothing in the whole of the Bill, so far as I can ascertain, which enables other persons to be on the committee of management or the governing body. The view I take is that the governing words are: "subject to the absolute control of its members being insured persons." In my view, there is nothing which enables you to elect a non-insured person on the committee of management, but I cannot conceive that the Chancellor of the Exchequer has said anything which would indicate that, although a person was not insured, he could not be consulted or give advice in the ordinary way. As to whether a person who is not an insured person could be appointed as an official, unless you have the Clause carried as we have it here, there would be a difficulty. If he was an uninsured person, and you appointed him, you would be perfectly entitled to say that that was not "subject to the absolute control of its members being insured persons." The whole point of introducing these words is really to give effect to the general desire that you should have a democratic management of these societies. There is no reason, so far as I can see, why you should shut out persons who are members of a society, but who do not happen, for one reason or another, to be insured persons, from having a voice in the absolute control of that society. This, I agree, includes also persons who are members of a society, not honorary members, but uninsured persons, and allows them to have a voice—as I conceive they are entitled to have—in the management of the affairs of the society. One last point: all this is subject to this proviso: "If the rules of the society so provide." If the friendly society objects to persons who are not insured persons all they have got to do is to deal with them according to the powers which they have. What by this Amendment we are doing is this: if a society chooses to say that the affairs shall not be subjected to 383 the absolute control save only of insured persons, and if a society by its members says that it shall be subjected also to the absolute control of insured and uninsured members, that then we give effect to what are the wishes of the society expressed, of course, in the ordinary way according to their rules.
§ Mr. RAMSAY MACDONALDI hesitate to trouble the Committee again, but I am sure the Committee will see that this is rather an important point. The point I should like to put to the Attorney-General is this: He states that unless the words which we desire to move out remain in, insured persons cannot appoint honorary members of the society—I want to narrow the point down—insured persons cannot appoint honorary members of the society to the committee of management. The situation is this, is it not? We have already on Tuesday night passed that a society may consist of insured members and honorary members. We are now asked to say, according to our Amendment, that insured persons shall appoint the committee of management. The wording of the Amendment is "subject to the absolute control of its members," those who are insured persons; no limitation put upon them. They are given absolute control to appoint their committee of management or governing body. Where in any Clause in the Bill is there any limitation placed upon that absolute control, and as to how it is to be exercised?
§ Sir RUFUS ISAACSUnless you have some other words it must be managed in the ordinary way by the Members, in
§ order to bring it under absolute control by them.
§ Mr. RAMSAY MACDONALDI am afraid I do not understand my hon. and learned Friend. So far as this is concerned, if our Amendment is carried the insured person has absolute control over the appointment of the governing body of his society. I assume that he will be enabled to elect persons who are uninsured persons but sufficiently interested in these societies to associate themselves with them. You have got obviously in your Bill that societies shall consist of insured persons and honorary members. Surely the whole assumption of the Attorney-General—I am not a lawyer, and I speak with the greatest respect for my hon. and learned Friend—surely the ordinary meaning is that insured persons can appoint a committee of management from at any rate the members of the society who may be either insured persons or non-insured persons or honorary members. If the words are left in it will enable societies to have their committee of management consisting of only honorary members, or that the members of a society may decide that the committee of management shall be appointed only from honorary members, whether they are insured persons or not. The chief point I really want to make is my first point, and I am not at all satisfied, I am sorry to say, with the answer of the Attorney-General.
§ Question put, "That the words proposed to be left out stand part of the proposed Amendment."
§ The Committee divided: Ayes, 235; Noes, 31.
385| Division No. 348.] | AYES. | [8.31 p.m. |
| Abraham, William (Dublin Harbour) | Bull, Sir William James | Davies, Timothy (Lincs., Louth) |
| Adkins, Sir W. Ryland D. | Burke, E. Haviland- | Davies, M. Vaughan. (Cardigan) |
| Agg-Gardner, James Tynte | Burns, Rt. Hon. John | Denman, Hon. R. D. |
| Allen, A. A. (Dumbartonshire) | Burt, Rt. Hon. Thomas | Devlin, Joseph |
| Allen, Charles Peter (Stroud) | Byles, Sir William Pollard | Dillon, John |
| Anderson, Andrew Macbeth | Carlile, Sir Edward Hildred | Donelan, Captain A. |
| Archer-Shee, Major Martin | Carr-Gomm, H. W. | Doris, William |
| Arkwright, John Stanhope | Cave, George | Duncan, J. Hastings (York, Otley) |
| Asquith, Rt. Han. Herbert Henry | Chamberlain, Rt. Hon. J. A. (Worc'r) | Elibank, Rt. Hon. Master of |
| Astor, Waldorf | Clancy, John Joseph | Esmonde, Dr. John (Tipperary, N.) |
| Balcarres, Lord | Clive, Captain Percy Archer | Eyres-Monsell, Bolton M. |
| Barnston, H. | Clough, William | Farrell, James Patrick |
| Bathurst, Charles (Wilts, Wilton) | Collins, Stephen (Lambeth) | Fell, Arthur |
| Beach, Hon. Michael Hugh Hicks | Compton-Rickett, Rt. Hon. Sir J. | Fenwick, Rt. Hon. Charles |
| Beck, Arthur | Condon, Thomas Joseph | Ffrench, Peter |
| Benn, Arthur Shirley (Plymouth) | Cornwall, Sir Edwin A. | Field, William |
| Benn, Ion Hamilton (Greenwich) | Cory, Sir Clifford John | Flannery, Sir J. Fortescue |
| Benn, W. (Tower Hamlets, St. Geo.) | Cowan, W. H. | Flavin, Michael Joseph |
| Bentham, G. J. | Crawshay-Williams, Eliot | Fleming, Valentine |
| Bethell, Sir John Henry | Croft, Henry Page | Fletcher, John Samuel (Hampstead) |
| Booth, Frederick Handel | Crumley, Patrick | France, Gerald Ashburner |
| Brady, Patrick Joseph | Cullinan, J. | Gardner, Ernest |
| Bridgeman, W. Clive | Dalziel, Sir James H. (Kirkcaldy) | Gelder, Sir W. A. |
| Bryce, J. Annan | Davies, Ellis William (Eifion) | George, Rt. Hon. D. Lloyd |
| Gilmour, Captain John | Lowe, Sir F. W. (Birm., Edgbaston) | Raffan, Peter Wilson |
| Gladstone, W. G. C. | Lundon, Thomas | Rawlinson, John Frederick Peel |
| Goddard, Sir Daniel Ford | Lyttelton, Rt. Hon. A. (S. Geo. Han. S.) | Rawson, Col. Richard H. |
| Goldman, C. S. | MacCaw, William J. MacGeagh | Reddy, Michael |
| Goldsmith, Frank | McGhee, Richard | Redmond, John E. (Waterford) |
| Greenwood, Glanville G. (Peterborough) | MacVeagh, Jeremiah | Rendall, Athelstan |
| Greenwood, Hamar (Sunderland) | M'Laren, F. W. S. (Lincs., Spalding) | Roberts, Charles H. (Lincoln) |
| Gretton, John | M'Micking, Major Gilbert | Robertson, Sir G. Scott (Bradford) |
| Guest, Major Hon. C. H. C. (Pembroke) | Magnus, Sir Philip | Robertson, John M. (Tyneslde) |
| Guest, Hon. Frederick E. (Dorset, E.) | Marshall, Arthur Harold | Roche, John (Galway, E.) |
| Hackett, John | Masterman, C. F. G. | Roe, Sir Thomas |
| Haddock, George Bahr | Meagher, Michael | Rowlands, James |
| Hall, Fred (Dulwich) | Meehan, Francis E. (Leitrim, N.) | Russell, Rt. Hon. Thomas W. |
| Hall, Marshall (E. Toxteth) | Meehan, Patrick A. (Queen's Co.) | Rutherford, Watson (L'pool, W. Derby) |
| Harmsworth, Cecil (Luton, Beds.) | Menzies, Sir Walter | Samuel, Rt. Hon. H. L. (Cleveland) |
| Harmsworth, R. L. (Caithness-Shire) | Middlemore, John Throgmorton | Samuel, J. (Stockton-on-Tees) |
| Harvey, T. E. (Leeds, W.) | Millar, James Duncan | Samuel, S. M. (Whitechapel) |
| Harvey, W. E. (Derbyshire, N. E.) | Molloy, Michael | Sanderson, Lancelot |
| Haslam, Lewis (Monmouth) | Money, L. G. Chiozza | Scanlan, Thomas |
| Havelock-Allan, Sir Henry | Montagu, Hon. E. S. | Schwann, Rt. Hon. Sir Charles E. |
| Haworth, Sir Arthur A. | Mooney, John J. | Sheehy, David |
| Hayden, John Patrick | Morgan, George Hay | Simon, Sir John Allsebrook |
| Helmsley, Viscount | Morrison-Bell, Capt. E. F. (Ashburton) | Smith, Harold (Warrington) |
| Henderson, J. M. (Aberdeen, W.) | Morton, Alpheus Cleophas | Spear, Sir John Ward |
| Henry, Sir Charles S. | Munro, Robert | Spicer, Sir Albert |
| Higham, John Sharp | Murray, Captain Hon. Arthur C. | Strauss, Edward A. (Southwark, West) |
| Hills, John Waller. | Newdegate, F. A. | Summers, James Woolley |
| Hinds, John | Nicholson, William G. (Petersfield) | Swift, Rigby |
| Hohler, Gerald Fitzroy | Nolan, Joseph | Tennant, Harold John |
| Horner, Andrew Long | Nugent, Sir Walter Richard | Thomas, Abel (Carmarthen, E.) |
| Houston, Robert Paterson | Nuttall, Harry | Toulmin, Sir George |
| Howard, Hon. Geoffrey | O'Brien, Patrick (Kilkenny) | Tryon, Capt. George Clement |
| Ingleby, Holcombe | O'Connor, John (Kildare, N.) | Wadsworth, John |
| Isaacs, Rt. Hon. Sir Rufus | O'Connor, T. P. (Liverpool) | Ward, Arnold (Herts, Watford) |
| Jardine, Sir John (Roxburghshire) | O'Doherty, Philip | Ward, John (Stoke-upon-Trent) |
| John, Edward Thomas | O'Dowd, John | Ward, W. Dudley (Southampton) |
| Johnson, W. | O'Kelly, Edward P. (Wicklow, W.) | Warde, Col. C. E. (Kent, Mid) |
| Jones, Edgar R. (Merthyr Tydvil) | O'Kelly, James (Roscommon, N.) | Waring, Walter |
| Jones, H. Hadyn (Merioneth) | O'Neill, Dr. Charles (Armagh, S.) | Warner, Sir Thomas Courtenay |
| Jones, Leif Stratten (Notts, Rushcliffe) | Orde-Powlett, Hon. William | Webb, H. |
| Jones, William (Carnarvonshire) | Ormsby-Gore, Hon. William | White, J. Dundas (Glasgow, Tradeston) |
| Jones, W. S. Glyn. (T. H'mts, Stepney) | O'Shaughnessy, P. J. | White, Patrick (Meath, North) |
| Joyce, Michael | O'Sullivan, Timothy | Whyte, A. F. |
| Keating, Matthew | Pearce, Robert (Staffs, Leek) | Williams, Penry (Middlesbrough) |
| Kelly, Edward | Pearce, William (Limehouse) | Williams, Col. R. (Dorset, W.) |
| Kennedy, Vincent Paul | Pease, Rt. Hon. Joseph A. (Rotherham) | Willoughby, Major Hon. Claude |
| Kimber, Sir Henry | Peel, Hon. W. R. W. (Taunton) | Wilson, John (Durham, Mid) |
| King, Joseph (Somerset, North) | Perkins, Walter Frank | Wood, Rt. Hon. T. McKinnon (Glas.) |
| Lambert, Richard (Wilts, Cricklade) | Phillips, John (Longford, S.) | Worthington-Evans, L. |
| Lane-Fox, G. R. | Power, Patrick Joseph | Wortley, Rt. Hon. C. B. Stuart- |
| Lardner, James Carrige Rushe | Price, C. E. (Edinburgh, Central) | Yate, Colonel C. E. |
| Lawson, Sir W. (Cumb'rld., Cockerm'th) | Price, Sir Robert J. (Norfolk, E.) | Yoxall, Sir James Henry |
| Leach, Charles | Pringle, William M. R. | |
| Levy, Sir Maurice | Pryce-Jones, Col. E. | TELLERS FOR THE AYES.— |
| Lloyd, George Ambrose | Radford, George Heynes | Mr. Illingworth and Mr. Gulland. |
| Locker-Lampson, G. (Salisbury) | ||
| NOES. | ||
| Adamson, William | Jowett, Frederick William | Taylor, John W. (Durham) |
| Barnes, George N. | Macdonald, J. R. (Leicester) | Thomas, J. H. (Derby) |
| Bowerman, C. W. | Martin, Joseph | Wardle, George J. |
| Brace, William | O'Brien, William (Cork) | Watt, Henry A. |
| Crean, Eugene | Pointer, Joseph | Wedgwood, Josiah C. |
| Edwards, Enoch (Hanley) | Roch, Walter F. (Pembroke) | Williams, John (Glamorgan) |
| Gill, A. H. | Rowntree, Arnold | Wilson, W. T. (Westhoughton) |
| Glanville, H. J. | Scott, A. MacCallum (Glas., Bridgeton) | |
| Guiney, Patrick | Sherwell, Arthur James | |
| Hall, Frederick (Normanton) | Smith, Albert (Lancs., Ciltheroe) | TELLERS FOR THE NOES.— |
| Hancock, John G. | Smith, H. B. Lees (Northampton) | Mr. Parker and Mr. Goldstone. |
| Hudson, Walter | Snowden, Philip |
Question put, and agreed to.
§ Mr. SHERWELLI beg to move an Amendment to the Chancellor of the Exchequer's proposed Amendment to leave out the words "or" ["being insured persons or"].
The course of this discussion has shown a desire to exclude members not insured persons from the power of voting, and, 386 therefore, I propose this Amendment, which I think will meet the Attorney-General's legal difficulty; and I shall move as a consequential Amendment to add at the end words to this effect, "Provided that whilst any member not being an insured person shall be entitled to take part in such management, he shall not be entitled to vote."
§ The DEPUTY-CHAIRMAN (Mr. Donald Maclean)After the decision of the Committee this word "or" is passed, and we cannot go back upon it.
Question proposed, to leave out paragraphs (iii.) and (iv.), and to insert instead thereof, (iii.) Its constitution must provide to the satisfaction of the Insurance Commissioners for its affairs being subject to the absolute control of its members being insured persons or, if the rules of the society so provide, of its members whether insured persons or not, including provision for the election and removal of the committee of management or other governing body of the society, in the case of a society whose affairs are managed by delegates elected by members by such delegates, and in other cases in such manner as will secure absolute control by its members.
§ Mr. GILLmoved, in Sub-section (2), after paragraph (iv.) to add the following paragraph:
(v.) Its rules must not provide for medical tests as a condition of membership in respect of benefits under this Act.This point raises a very great principle as to whether friendly societies should have the right to select lives. This was all right so long as the societies were voluntary institutions, when the members could please themselves whether they joined or not. Then a society had a right to say what sort of lives they would have. It is different now, because everybody is compelled to subscribe to a friendly society, and it appears to me that the same argument will apply to average lives as has been applied to average societies. It has been said that on account of a number of societies being in a poor condition it would be better to group them, and then the strong would assist the weak. If friendly societies are allowed to select their lives they will select the best, and the weaker will have to go into the Post Office as deposit contributors. There is a good deal of sickness due to the employment of persons in different trades. For instance, you find amongst chemical workers a considerable amount of sickness which you cannot avoid, and which is due to their occupation. Now, these people are compelled to pay the same rate of contribution as those who may work in more healthy industries. There are other classes, and I might particularise many other trades. There are those working in the 388 trades where lead is used who may be subject to lead poisoning, and who consequently would be liable to be rejected, not on account of any fault of their own, but on account of being engaged in an industry which is bound to be carried on in order to keep the business of the country going. These people are engaged in an industry likely to affect them detrimentally.This House in the past has made regulations for the purpose of granting special terms to persons who contract these industrial diseases in dangerous trades, and now it seems to me that they are taking to some extent what they have given by saying that those persons shall be liable to go into the Post Office societies, where they will not be insured. No one can say they are insured in the deposit department of the Post Office, because they simply get back what they pay and nothing more. Those people are liable to suffer from sickness, in fact they are more liable than those employed in other trades. By accepting my proposal everybody will then have a fair chance, and nobody would be penalised under the circumstances I have mentioned. This measure will affect other people besides those in the dangerous trades. It will affect those in the lowly paid trades who are stricken with poverty and who cannot afford to live as well as some artisans, and consequently they are much more liable to sickness. I do not think anybody ought to be penalised because they are poor. I do not believe this House will agree to a principle of that description, and although it may not be the intention to do anything of the kind, it cannot be denied that if they are poor they are more liable to sickness. Then there are some families who may not live in these poverty-stricken districts or work in dangerous occupations—I refer to families subject to consumption and other diseases. It is to be said these people must pay the full rate of contributions and be penalised because they are in that condition. The whole number ought to be taken on the average, and then everything will average itself out. It seems to me that this is a case of "unto him that hath shall be given." The best lives will get into the friendly societies and the others will have to depend upon the Post Office, and I think that is a wrong principle. As everybody has to pay alike the risk should be taken by all the societies, and taken on an average basis. [An HON. MEMBER: "Including trade unions?"] Yes, I include trade 389 unions, and I do not make any distinction, for I think they should be on the same lines as other societies, and all these risks should be taken on the average. There is no competition, and everybody will be on the same lines and will get the same benefits. In this way I think the scheme would become much more popular.
§ Mr. MASTERMANI think my hon. Friend will recognise that this is not so much an alternative Amendment as an alternative Bill. If it were carried the whole system on which friendly societies work would be thrown to the ground and the assumptions upon which they have welcomed this Bill would be entirely destroyed. I do not know whether or not the hon. Member for Bolton (Mr. Gill) is speaking for trade unions, but I am sure he is not speaking for any one of the responsible friendly societies of this country in regard to this proposal. I should deprecate at this stage any discussion opening up the question of the position of the deposit contributors. The time devoted to this Bill has been arranged to give a full opportunity for the discussion of this question, and whether the position of those contributors is satisfactory or not is a matter quite apart from the question whether friendly societies are not to be allowed to make any medical tests in order to exclude unsatisfactory lives. My hon. Friend said the Bill penalises people because they are poor. I do not think that state of things would be altered by this Amendment. So far from that being the case the effect of this Bill is that it gives more to those who are poor at every stage than to those who are well off. All my hon. Friend is trying now to remove is the medical test. There might still be the property test. He raised the question of consumption. Consumptive lives will be very adequately provided for in the Bill, and the friendly societies will not be put to any very great expenditure in that respect. They will be very largely helped by the very generous provisions made in the Bill. The Government had only two alternatives before them, and, of course, the first question discussed when the Bill was being framed was whether you would compel the friendly societies to take anyone who applied, or whether you would work partly through approved societies and partly through making provisions for those who are outside the approved societies. We discovered it was both impracticable in application and also distasteful to the friendly societies to com- 390 pel them to take people without a medical test. We have tried to make provision for those excluded by the medical test, and we are prepared to listen to any criticism. For those reasons it is impossible for the Government to accept the Amendment.
§ Mr. BARNESI cannot help thinking the hon. Member has misinterpreted the whole of the terms of my hon. Friend's Amendment. He started out by saying this was an interference with the ordinary provisions of friendly societies and trade unions.
§ Mr. MASTERMANNot trade unions.
§ Mr. BARNESThen of friendly societies. So far as I understand it it is nothing of the sort. It simply seeks to say there shall be no medical test imposed as a condition of the benefits under this Act. It leaves the friendly societies still open if they like to impose their medical tests in regard to full membership of those societies. All it interferes with is the right to impose a medical test as a condition of getting the benefits of this Act. Let me point out what happens now and what is likely to happen more in the future. The friendly societies at present impose a medical test, and, having regard to the fact that they pay sickness benefit, I suppose they are quite justified in imposing it. The trade unions having industrial matters in their minds in regard to the recruiting of members, attach only secondary importance to the question of physical sickness. Therefore, as a rule, they impose no medical test, although some of them pay sick benefits. What is going to happen under the Bill if that continues? It is quite obvious that what are known as bad lives, comparatively bad lives, will go to the trade unions, and that good lives will gravitate to the friendly societies. The hon. Member shakes his head, but that is what is happening now. A man who goes to a friendly society for sick benefits is a better life than the man who goes into a trade union now. He is a better life medically than the average member of the trade unions. Unless the Amendment is carried it will still happen under this Bill, and therefore you will segregate the good lives under the friendly society agencies and the comparatively bad lives under the trade union agencies, and the trade unions will have a larger burden to carry than the friendly societies, and have a less chance of getting those surpluses which have been 391 so much talked about and which are intended to supply additional benefits. That is perfectly obvious, and we want to prevent that, as well as to prevent the sick man from being obliged to carry the whole burden of his sickness. We want to add to the spirit of the statement so often made about pooling the burden, and it is because we think this Amendment is an amplification of that good principle we put it forward and commend it to the House.
§ 9.0 P.M.
§ Mr. BOOTHI think most of the great friendly orders will refuse to work the Bill if this Amendment is passed. That, I think, is beyond all doubt. Therefore, even if they are unreasonable, we must pause before we introduce an Amendment of this kind, which will be taken as an open declaration of war by the great friendly societies. I listened with great attention to the speech of the hon. Member for Bolton (Mr. Gill), and he rather carried my sympathy with him. There is a point which, I think, should be met, but surely this Amendment would not meet it. If the friendly societies did not want a man because he was a bad life, they would, if there was no medical test, refuse him by alleging some other ground, which would not be a genuine excuse. I do not think you can ever force the Manchester Unity of Oddfellows or the Foresters to have a man they do not want. If you exclude the medical test they will find some other excuse. They will find a fault with the street in which he lives or the colour of his eyes. I am not a lawyer accustomed to drive a coach through Acts of Parliament, but I do not think the great friendly societies would accept that. The trade unions will occasionally, I do not say very often, have to take a bad life perhaps because the friendly societies refuse it. I do not myself see a way out, but I am certain this would mean the Bill would break down, and I think we must face that fact. It is perhaps an open secret that I was present at the Treasury when all the great friendly orders and all the societies and institutions of every kind were convened by the Chancellor of the Exchequer to see if they could agree on a scheme to work this Bill, and nothing rejoiced me more than to leave that meeting feeling these great bodies, who are more or less in rivalry, had all agreed to co-operate in making this Bill a success. I am perfectly confident the whole fruit of that conference would be lost if this Amendment were carried.
§ Mr. J. H. THOMASI do not think any Member in the House will accuse those supporting this Amendment of being unfriendly to the friendly societies. The fact that every Member on these benches is already, and has been for years, an active member and even an officer of the friendly societies in addition to the trade unions, proves at least we know something of these organisations. We have to consider, however, the primary object of this Bill, which is to help those who unfortunately cannot help themselves. The Chancellor of the Exchequer has repeatedly stated he wanted to drive people into the friendly societies. The friendly societies have been repeatedly told that when this Bill becomes law they will have an opportunity as they have never had before of increasing their members. Prior to this Bill a friendly society was perfectly justified in saying that so far as we are concerned we are going to spend our own money in our own way, and we will allow no one to interfere with our own management, and in so far as they were doing that this House, and no other body, had a right to interfere with their management or say what their rules should be. The position is entirely reversed when this Bill becomes law. The friendly societies and the trade unions will not be spending their own money exclusively. They will be spending the State money, and, that being so, we are justified in asking them to bear an equal share of the burden the State is imposing. What is the position? The majority of the Members of this House would say that no man who to-day is outside a friendly society but who can afford to belong to such a society and is medically fit should be encouraged in this way. The majority would say, "You ought to be compelled to make some provision for sickness." But when you find a man that no friendly society will take in because they are forced to recognise that he is more subject to illness than any other ordinary individual, then I say, if this Bill sets out to help those in that position, we ought at least to make the best possible provision for that kind of life, and we can only make that provision by enabling those men to have the full benefits of the friendly societies in this direction. What is their position? They become deposit contributors, and we are all well aware that, as deposit contributors, they are in a far worse position than an ordinary member of a friendly society. As far as the trade union is concerned, it is the man who is bound to be 393 hit; it is an unfair imposition on the part of the trade union. The unions are, of course, more concerned in the industrial side of this question. They take the risk and they take the burden, and surely we are justified, as a party to the administration of this particular Act, in saying that they shall be in no worse position in this respect than anybody else. I do not think there is any particular hardship on the part of any friendly society. Each society will stand in the same position, in spite of the suggestion that one hundred and one ways will be found for excusing them. I do not think that in practice this would actually happen. There is certainly no friendly society or trade union that goes out of its way to manufacture excuses to get rid of a man. If he is undesirable, they do not hesitate to tell him so. We give them simply the power that they now enjoy, together with the benefit of the State fund, and, in view of that, they should be in a position at least to bear an equal and fair share of this burden. Unless the Amendment is carried they will not do so.
§ Mr. DUKEThe Amendment seems to me, as suggested by the Under-Secretary for the Home Department, to apply the touchstone to this Bill. It is a Bill for providing every kind of medical and social benefit to the least capable members of the community. If they are sick they are to be allowed to call in a doctor and someone else is to pay him. That is the principle which was laid down on a recent occasion, very explicitly, but, apparently, from what has been said by an hon. Member opposite, that benevolent principle is to apply particularly to those people who do not want it. If you are not in need of medical assistance you are very welcome to it. And as to the suggestion that one hundred and one ways will be found for dealing with undesirable people, I agree with the Under-Secretary. He is perhaps right when he says that the introduction of this Amendment would wreck the Bill. I think it very probably would do so. Unfortunately the Bill has proceeded on the wrong principle of providing large benefits for people who are able to provide for themselves, and it takes very little account of people who are not able to make such provision. These are the very class of men who call forth the sympathy of the community—a class as to whom Members on this side of the House have been held up to public odium by a Member of the Government because of their supposed lack of 394 sympathy with them. But what is the practical expression of sympathy that comes from the Treasury Bench, for this class of people, who are the very class whose necessities call for most compassion? There is no provision for them among the regular provisions of this Bill.
§ Mr. MASTERMANThere are special provisions for them in this Bill, but it is of no use forcing them upon them.
§ Mr. DUKEThey come in under the Post Office scheme, which is a sort of dividing club for people who have no money. I understood that this was an Insurance Bill, but if it is once realised by the poor people of this country that the millions which are, according to the Chancellor of the Exchequer, their inheritance, are not really the inheritance of necessitous people, but are the inheritance of people capable of taking care of themselves, then the result on the welcome which this Bill will get—the reception of the Christmas Box when it comes—will be very different from what is anticipated. I have not any very great hopes that the Amendment of the hon. Member can be reconciled with the scheme of this Bill. It is probably irreconcilable, and I am somewhat perplexed as to whether, when the Third Reading of the Bill is reached, I shall be able to vote for it under the circumstances. As the matter stands, the Government have made it perfectly clear to the classes of the community whose necessities naturally attract the attention of hon. Members sitting below the Gangway, because they come into contact more frequently with that class, that they are not provided for in this Bill. I can only regret that the Bill has the limited scope which the Under-Secretary has declared that it possesses.
§ Sir RUFUS ISAACSI have no hesitation in saying that the speech just delivered is a complete travesty of what my hon. Friend said when he was opposing this Amendment on behalf of the Government. He said not one word which justified the suggestion that this Bill was being worked, not to help the necessitous, but those who were better off. What is the point we are discussing? One would have thought that we were discussing the case of sick persons, differentiating between the means of one person and another. The point, however, is one which it is quite natural should be raised by my hon. Friends who represents trade unions and whose views we quite appreciate. 395 But the point that they are raising is not the one suggested by the speech of the hon. and learned Gentleman opposite. The question which is raised is really quite a different one. It is whether or not under this Bill we are to make the friendly societies adopt the same practice as is followed by the trade unions with regard to medical tests. I do not think anybody would have gathered that that was the point from the speech of the hon. and learned Member (Mr. Duke). What my hon. Friend the Under-Secretary for the Home Department said was that if you altered the Bill by accepting this Amendment the difficulty would be that you would make the Bill unworkable. I quite agree with what he said. Surely the hon. and learned Member did not understand from anything that fell from him that he was saying that we were not anxious to help the necessitous. The point of my hon. Friend's observation was this, and I thought he made it perfectly clear, that when drafting the Bill and considering the plan on which it should be drafted the question we had to consider was, are we to force friendly societies to take men whether they desire it or not? We could not do it, of course, because no Amendment could be introduced and no Bill which could be passed by this House would have the effect of forcing friendly societies to accept members they did not want. They are entitled to govern themselves and they would say, quite rightly, "Whatever you may pass we shall do exactly as we have a right to do among our own members." What is asked in this Amendment is that they should not ask for medical tests as a condition of membership. We know that they do provide for it and the whole trend of the Amendment is to get rid of it. Trade unions generally do not apply a medical test, although my impression is that I have seen some rules of trade unions which impose medical tests. This is a matter we must leave to the societies, and we cannot force it upon them. The real question we have to face, and which no amount of rhetoric will enable us to depart from, is that if we accept this Amendment the fact is that the friendly societies will say to us, "you told us we would be allowed to govern ourselves and that you never intended to interfere with our management, but what you are doing by this is interfering most drastically with the conditions under which we admit members, and if you do that you are not only breaking your word to us, but you are 396 rendering the administration of the scheme under this Bill impossible for friendly societies."
§ Mr. DUKEWill the right hon. Gentleman tell the Committee under what Clause of this Bill will this class of people obtain the benefits which members of approved societies will obtain under the Bill?
§ Sir RUFUS ISAACSI should not have thought it was necessary for me to tell Members or the Committee that. Nobody can have any doubt that if anyone cannot get admitted to an approved society he comes in through the Post Office. Is that anything new? Am I revealing anything for the first time? I quite appreciate and sympathise with the view of the hon. and learned Member. He would like to do something more for the Post Office contributors. So would a great many of the Committee. We have to consider what can be done when we come to Clauses 32 and 33, when that question will come up for discussion. All I am endeavouring to do is to make a protest to the hon. and learned Member that he was introducing into this discussion something which is not germane to it, but probably comes in when we get to the Post Office contributors in Clauses 32 and 33. It seems to me that the hon. and learned Member has introduced into a very businesslike and quiet discussion some passages he had stored up for use on another occasion and in another place. I am sorry on behalf of the Government that we cannot accept the Amendment, although we quite appreciate the objects of its Movers. They are seeking to make friendly societies do what some trade unions do. The whole point is that if we accepted this we should really destroy the scheme of the Bill, which is that we should leave the matter to the friendly societies. It was recognised from the first that we intended to consult the views of the friendly societies and allow them to govern themselves without the least interference.
§ Mr. CHIOZZA MONEYI should like to address myself to a point raised by the hon. Member for Exeter (Mr. Duke), which has often been raised before in Committee. He stated that this Bill was a Bill to help those who did not so much need help and to drive out those who did need help.
§ Mr. DUKEI did not say anything of the kind. I did not say that I believed the Bill was intended to help those who did not 397 want it. What I did say was that the Bill does not help the man who most needs help.
§ Mr. CHIOZZA MONEYI will take the hon. and learned Member's own statement. The man who most needs help is the mournful effect of society, which has neglected in the past to take measures for the general health of the community. A great mass of the people who will be insured under this Bill and who will be medically examined and who are actuarily provided for under it have provided gradually in the processes of society the Post Office contributor, and we shall stop the supply of Post Office contributors by attending to the great masses of the community. In other words, this Bill is not merely an Insurance Bill, but a Bill to prevent destitution and the manufacture of Post Office contributors.
§ Mr. BONAR LAWThe contribution which has just been made by the hon. Member is interesting, but it is not very germane to the Bill which we are discussing. It is very interesting specially for this reason, that so far as he understands it, he recognises the truth of every word which was said by the hon. and learned Gentleman (Mr. Duke) so far as the present generation is concerned, and it was only with the present generation that my hon. Friend dealt. My object in rising was to deal with the somewhat heated remarks of the Attorney-General. He naturally, as Minister in charge, would like to see the discussion as tranquil and peaceful as possible, but I do not think that on this occasion he poured oil on the troubled waters, and I think also that he entirely misrepresented, unintentionally of course, the view which was expressed by my hon. Friend. What he accused him of doing, was saying that the Under-Secretary had no interest in these poorer classes which had excited the interest of my hon. Friend. He said nothing of the kind. What he said was that the Bill did not deal fairly with these poorest and most needy classes in the community. I am certainly going to say nothing new so far as I am concerned, in regard to the position of the Bill as it is affected by this Amendment. I said on the Second Reading that, much as I desired to see a Bill of this kind introduced, and greatly as I thought it was needed, I was strongly of the impression that this House ought not to allow the Bill to go through unless it gave assistance in a more generous form to the very class of men who most need 398 that assistance. That was my view from the first.
The Attorney-General tells us it is absurd of us to raise that point on this Amendment. I will give a good reason why, in my opinion, it is not absurd. He says it can be discussed later on, and that the matter will be dealt with then, but we ought to know how it is going to be dealt with now and then we shall be able to judge whether or not some Amendment of this kind is necessary at this stage. If the hon. and learned Gentleman or the Chancellor of the Exchequer had told us in one of those numerous speeches outside that he intended to improve the condition of this class and in what way he intended to improve it, he would have been perfectly justified in saying it is not right to raise the question now, but he has not told us, and I say without the smallest hesitation that the Government have no right whatever to meet Amendments of this kind by telling us, not that there is not something in them, but that they wreck the whole scheme of the Bill. If that is true, if Amendments which are necessary to make it a proper measure are to be rejected on that ground, it proves simply that the scheme of the Bill is wrong, and ought to be altered. The Under-Secretary says we did not vote against the Second Reading. By the Second Reading we committed ourselves to the principle of a contributory scheme and nothing more. So far as I am concerned, and I speak only for myself, I do not recognise that plea as an excuse for not accepting Amendments which in themselves seem just. I quite admit that this is a serious Amendment from the point of view of the Government. I quite admit that the Chancellor of the Exchequer, after denouncing friendly societies as vested interests, does go and square the friendly societies, but we have nothing to do with that. We have the right to say that in a compulsory scheme of national insurance no society of any kind has a right to receive advantages at the expense of other sections of the community, and least of all at the expense of sections which need it most. I do not say that this Amendment is one which at this stage the House ought to accept, but the Government ought to tell us now, at the earliest possible moment, exactly what they mean to do with the deposit contributors, and I for one say that unless they deal with them very differently from the way in which they are dealt with in the Bill now, I shall certainly vote against it when the Third Reading comes.
§ Mr. RAMSAY MACDONALDI was hoping that the right hon. Gentleman would finish up by saying he was prepared to impose upon friendly societies the duty of taking in members without a medical test, because if he is not prepared to do that, what is the purpose of all that speech of his? Is he as bad as the Under-Secretary of State for the Home Department, who has been described in such lurid language and with so much imagination by the hon. and learned Gentleman (Mr. Duke), because if, standing at the Bar of this House, there had been one of those future Post Office contributors listening to the speeches from both sides, if his heart had been turned cold by what my hon. Friend said, I am perfectly certain neither the speech of the hon. and learned Gentleman (Mr. Duke), nor that of the right hon. Gentleman, would have warmed that cold blood. It is all very well to speak for ten minutes in enthusiastic criticism of the shortcomings of the Bill from the point of view of these poor men and then do nothing for them. If there is heartlessness in the speeches we have heard it comes from that side, which offers sympathy and so little practical support. However, that was not the purpose of the Amendment. The purpose of the Amendment was to raise a very important point, and to raise it in a calm and cold-blooded way. The point, as it seems to me, is this. I look at it from the point of view of the triennial valuations. You have an approved society that imposes a very strict medical test. It gets the 4d. and the State subsidy. At the end of every three years its assets are valued. It then declares a certain surplus valuation, and that surplus is, in accordance with the Schedule at the end of the Bill, redistributed in the form of additional benefits given to individual members. I assume that the society takes good care that only the very best lives become its members. That society is not doing its duty under this Bill. There is no doubt about that. If you have a society that is doing its duty under this Bill, and which imposes a medical test which is much looser than that of the first society, when the second society's assets are valued at the end of three years the individual members of the society have a less amount to their credit from which they are to receive additional benefits than the members of the first society.
Of course it is perfectly true, as the Attorney-General said, that where you have a trade union insuring for sickness 400 in addition to other things, the members of their sick insurance are subject to a medical test. They have two classes of members. In some instances they impose a medical test for their members who are going to insure against sickness, but when this becomes law that will be a cumbrous process which I do not think trade unions can possibly afford to pursue. A trade union cannot go to one member and say, "Please declare me to be an approved society," and to the member working alongside of him, "For goodness sake, do not declare me as an approved society." That would be a totally impracticable way of working trade unions. So that when this Bill becomes law approved societies that are trade unions will, if I may say so, be far more honest than the societies which are going to impose a medical test—honest in this sense that they will take an average life. They will throw their net very widely. Their character will be far more social than would be the case if they imposed a strict medical test. That was the point that we wanted to raise. I do not want to mix that up with Post Office contributors. There is not the least doubt that it impinges upon that problem. It is part of the problem. But surely in a Bill like this, unless we are prepared to make some practical suggestion and put down on the Paper some practical Amendment, what is the use of delivering magnificent speeches of sentimental slush? We have made our contribution. Our suggestion is that every approved society should be compelled to take an average life—that the average life of the approved society shall be the average life of society as a whole. I see very great difficulties in the way. We wanted to raise the point, but if we are not to be met upon it, I do not see much use in forcing the Amendment to a Division. I do think, when the triennial valuation is taken into account, something should be done to meet us. Whether it should be done now or when the case of the Post Office contributors is considered, I do not know. It is not exactly for me to say. But having raised the point and put it before the Committee, as far as I am concerned I should propose to leave it there. There will be great difficulty in administering the Amendment. The idea is one which I invite the Committee to consider more seriously than they have yet done. If by withdrawing the Amendment now we could raise the point later on, I think the advantage would be on the side of withdrawing it. I would strongly 401 advise my hon. Friend to withdraw the Amendment now, in order that the point may be considered at a later stage, because we would not be able to raise it again if we divided at the present moment.
Colonel WILLIAMSIt seems to me that there is underlying this Amendment a great fallacy. It is a fallacy to assume that friendly societies and trade unions are on the same basis. Friendly societies have one purpose, and they take men into their membership for friendly society purposes, while trade unions are anxious to attract men for the purposes of trade association, and add to their work the business of friendly societies. A trade union desires to get in the members of a particular trade whether the lives are good or bad. Out of that has grown the system of trade union insurance for sickness, and I quite understand that for the present members of trade unions it is a little awkward to ask them for a medical test to determine whether they are to continue to receive medical benefit. It seems to me, however, that in dealing under this measure with societies for the purpose of insurance we ought to treat them all on the same basis. A trade union should keep its insurance fund entirely distinct from the fund for trade union purposes. If a man desires to join the insurance scheme and says, "I want to make you my insurance society," then I think he ought to undergo a medical test, and the trade union ought not to allow a man to come into the insurance fund without a medical test. The hon. Member for Leicester (Mr. Ramsay Macdonald) talked of an insurance company taking the average life. If you are going to make insurance compulsory on everybody, then, perhaps you would be able to admit people without a medical test, but this Bill does not make it compulsory. It is one of the faults of the Bill that it does not go far enough. Until you make the Bill compulsory you cannot prevent those who undertake insurance business from having a test.
§ Mr. BAIRDWhat was the burden of the suggestion of the hon. Member for Leicester? He said that you have no right to attack this measure unless you have some concrete proposal to make in order to meet the point of difficulty. How much further has the hon. Gentleman carried the Committee? What concrete proposal has he made? He suggested that the purpose of the Bill was to provide insurance for the average life. [An HON. 402 MEMBER: "No."] These are the words of the Amendment:—"Its rules must not provide for medical tests as a condition of membership in respect to benefits under this Act." Does it provide that the average life should be taken? It seems to meet the case so badly that the suggestion the hon. Member made was that the Mover should withdraw it in order to bring the question up later on. But there is going to be no later on. It is now or never, and to suggest that we shall have an opportunity of bringing up a concrete proposal—except from the benches opposite or the Irish Benches—is a pure fallacy deluding to the constituencies. Does anybody contend that the effect of the Amendment is that the average life should be accepted? It provides that everybody should be accepted. There is no question of the average life. It may be a downright bad life.
§ Mr. RAMSAY MACDONALDThe hon. Member has somewhat misquoted. I did not say that the average life would have to be taken. I said that the average life of the society might be the same as the average life outside.
§ Mr. BAIRDThe hon. Member wishes to confine it more closely and particularly to societies. I take it that the Bill is for the nation as a whole, and not for particular societies. I understand the hon. Member to say that this is to apply to the average life of societies. What we have got to consider is the lives of the nation, of the "people" to whom the hon. Member is so fond of referring. Now the hon. Member switches off from the people and turns on to the societies. He is not justified in attacking those of us who are in favour of a system of insurance but are not prepared to accept as an inspired measure this Bill of the Chancellor of the Exchequer, in spite of his three years' study, his 2,500 letters and his hundred deputations, and we are not going to accept blindly everything that the hon. Member suggests. I retain my opinion, an opinion which has been expressed by the hon. Member (Colonel Williams) who has just spoken, that a measure of insurance is desirable, but that this measure is not a good one, and if we have not time to remedy its defects, and he is voting against the Third Reading I will do the same thing.
§ Mr. AUSTEN CHAMBERLAINI had no intention of saying a word in this Debate until the hon. Member for Leicester 403 interjected an interruption in my hon. Friend's speech. The hon. Member for Leicester had no scheme, but considered the words of the Amendment put down were unsuitable, and did not know what was to take their place. He did not know what he desired. His interruption of my hon. Friend carries him much further than he appears to be aware of at the present time. He says the claim of himself and his Friends is that the average of life in a society should be the average of risk in the nation, or that the average of risk in a society should be the average of risk in the nation. This Bill from beginning to end is the negative of that principle. I quite understand that that principle has great attractions for the hon. Member and for many of us, that when you form a compulsory scheme of national insurance it will be a fair thing to pool the risks of the country and make the risks of any society that is permitted to work the scheme equal to the average risks of the country as a whole. That is not what the Chancellor of the Exchequer has done, and he cannot do it under this Bill now, least of all in the time allotted. The Chancellor of the Exchequer earlier in the afternoon, in dealing with small societies, said it would never do to allow the best societies to group themselves together and then leave the bad societies on one side. What is the principle of the Bill—I will not say principle, but what are the crucial outstanding features of the Bill? That the Chancellor of the Exchequer, though strongly resisting the proposal to allow all the good little societies to be grouped together, and to leave the bad societies aside, allows all the good lives to be grouped together, and all the bad lives to be put into a separate pool. As long as you retain Post Office contributors for bad risks outside the general scheme of insurance you cannot realise the object put before you by the hon. Member for Leicester—namely, that the average of any society should be the average of the country at large. The hon. Member for Leicester in one sentence has declared himself an enemy of an essential feature of this Bill. Whether he would like to vote for it is his affair and not mine, but it is quite idle for him to say that he desires to secure the result which he laid down, and at the same time to support a measure which renders that impossible.
§ Mr. LLOYD GEORGEI cannot allow the remarks of the right hon. Gentleman 404 to pass without making one or two observations upon them, I am not sure that the right hon. Gentleman committed himself to anything except criticism.
§ Mr. AUSTEN CHAMBERLAINOn this occasion not.
§ Mr. LLOYD GEORGEI thought not. It is all very well to criticise, but you must endeavour to see how, consistently with working the societies, you can attain the purpose which you have laid down in the proposition about averaging the risks. There are two ways of working an insurance. One is the German scheme of passing over all existing societies and just insuring the nation. You might say you recognise no society, you keep them all out, and if they want to do any business they must do it over and above this. The other way is the way we have adopted. We have said, "You have got societies in this country with five or six million members. It is not desirable to keep them up. You should work through them." Even if you wanted to keep them out it could not be done. The moment you do that you must give those societies the right to choose their own members. Are you, for instance, if a friendly society says "We won't take such and such a life," to say to them, "You must take it"? Suppose there is no medical test, the reason they reject that life may be a medical one all the same. They may say, "He has done something, or, by looking at him, we see that he is a bad life but we won't elect him a member." Are you to say, "You must take him, whether you like it or not?" Unless you do that there is no use in talking about averaging.
§ Mr. AUSTEN CHAMBERLAINThat is what I pointed out.
§ Mr. LLOYD GEORGEIf that is the object of the right hon. Gentleman, I am getting up not to answer him, but to say how much I agree with him. Each system, of course, has its advantages and its disadvantages, and what you have got to do is to choose between them. One thing I am quite certain of is that you could not pass over the existing societies. Another thing I am equally confident of is that it is not desirable; for by working through the societies, in addition to the health advantages, you are having a training in self-government and many other advantages that you have got through these existing societies. Once you have admitted these societies it is impossible to deny them the 405 right of choice and to say, "You must take everyone." You could not say to a trade union, "You must take such and such a man," when they say, "No, we do not want him," and if you cannot force him on a trade union, why should you force him on a friendly society? Suppose a man wanted for his own purposes, it may be for a hostile purpose, to join, the society must have the right of rejection. What would happen if there were no medical test would be this: the men who had insidious diseases which could only be detected by the doctor would pass the tests. The men who were obviously bad lives would be put out, and you would be in a worse plight than ever, for you would crowd all the obviously bad lives into one group. If the right hon. Gentleman could give me any sort of suggestion I should not only accept it, but I should accept gratefully from him anything which would enable me to do something more for these Post Office contributors.
§ Mr. BONAR LAWThat is your business.
§ Mr. LLOYD GEORGEI think, if I may say so, that is a very poor standard of duty for any Member of this House, and I am very glad to say that the right hon. Gentleman stands alone in that view of it.
§ Mr. BONAR LAWAll I meant to say was that it was absurd to suggest that any Member of the Opposition should take the responsibility of framing a whole Bill.
§ Mr. LLOYD GEORGEThere is only one thing to say about that—the right hon. Gentleman, therefore, condemns the method of working through friendly societies. The right hon. Gentleman admits that the moment you choose a method of working through the societies there is no alternative, and that if you condemn a part you must condemn the whole. I cannot deal with the Post Office contributors now, but so far as medical tests are concerned I think I shall be able to prove that so far as those rejected for medical reasons are concerned, a vast amount of the work is done at the expense of the general fund. My hon. Friend has made a suggestion, and as far as I can see it is the only one, a perfectly straight-forward one, but one denounced by every friendly society in the country—a levy upon the surpluses, but consistent with our plan, especially of working through societies, I think I have gone as far as I possibly can under the 406 present conditions. What will happen? No one believes for a moment that this is a final solution of the problem of the Post Office contributors. It is not the final solution. A man who is rejected for medical reasons will have to be dealt with in some way when we get all the facts, but he is dealt with for tuberculosis. If a Post Office contributor is rejected for medical reasons, and he is suffering from tuberculosis he gets the benefit. When a friendly society rejects a man for bad health it generally means that he is suffering from an illness which is likely to be a prolonged one, and that again generally means tuberculosis. In so far as the medical test is concerned, I think the Committee will find that the Government have really met the case of the Post Office contributor who is rejected for medical reasons.
10.0 P.M.
In Germany, although the insurance is a national one, they have got very long waiting periods—I forget what the exact period is with regard to invalidity, but I think it is five years. It is better that the medical tests should be applied by the friendly societies. The medical test made by a friendly society is not such a searching one as is made when a person applies for a position in the Civil Service, for example. It is not very searching, and the five years' test in Germany is much severer. I think it would be a mistake if we dealt with the question now, because we are bound to discuss it later on, when we come to the Post Office contributors. I should be delighted to have any suggestion, consistent with the framework of the Bill, which any one is prepared to make, but in the meantime we should not be asked to divide on a question which is to be discussed later.
§ Mr. ALBERT SMITHI wish to ask the right hon. Gentleman a question. The trade unions generally do not impose medical tests on members. Will their case be considered with that of the Post Office contributors on Clause 32.
§ Mr. LLOYD GEORGEIf the member of a trade union suffers in the same way as a Post Office contributor, of course he will receive the same treatment.
§ Mr. A. SMITHI have been an advocate of trade unions as far as possible becoming approved societies, but we do not make a medical test, and if they are willing to run the risk and do the best they can for these people, as against those societies 407 who impose a medical test, I would point out that those trades unions would have to do the work of a friendly society at a great disadvantage, and it would not be fair. We have, on the one hand, wealthy friendly societies, and on the other big insurance companies, with all the machinery they have at their hand to get the best lives into their approved societies, while the trade unions, which I want to encourage to keep the people away from the Post Office and to put them into a society where they can have help from the members with whom they are in close contact, will have all those forces against it, and be bound financially to suffer while others will be getting increased benefits out of the surplus they will receive, while the trade union society will have to scramble along as best it can.
I have been hoping that the Chancellor of the Exchequer or the Attorney-General would give us some ray of hope that something would be done under those circumstances. I appeal to the Committee for its support, as the position is a very serious one. I am one of those, and there are hundreds besides me, who will do everything to encourage trade unions to make this Bill as successful as possible, and to work it as economically as possible. I am also one of those who wants to get every insured person a member of a society apart from the Post Office, under the circumstances we have in this Bill. In Lancashire, for example, there are perhaps 230,000 cotton operatives, and I do not think there is a single society in the whole of Lancashire which imposes a medical test. Are those societies to run the whole risk without medical tests, and without those advantages of extra benefits from the surpluses which they could create if they had medical tests? I do not think that a position of that kind is a fair one, and I think the least the Chancellor of the Exchequer can do is to give us some consideration on that point. If not, then we start discouraged. We know what is going to happen, and we have to make the best of it. We cannot give our members the same benefits that other people can give. You will thus have a system whereby one section of the people, banded together for the purpose of sickness and invalidity, will have the hope of increased benefits, while on the other hand you will have the good, bad, and indifferent people who will stand to suffer. An hon. Member opposite put the case pretty fairly on that point when he said that those who are going to work 408 the hardest for those who wanted most under this Bill are those who are going to get least out of it. I hope the Chancellor of the Exchequer will give us all the help he possibly can.
§ Mr. GLYN-JONESI cannot but think that those who are asking us to accept this Amendment cannot fully appreciate the results of our accepting it. We are asked really to do away with a medical test, which means that the whole of the actuarial basis upon which the contributions have been fixed is to be done away with. The Bill as it at present stands does differentiate between the average life and the class we have referred to as deserted, abandoned, and permanently invalided. That is the fact, but I now hear the Labour Members asking that the burden of providing for those who are below the average should be cast upon the insured worker. What is going to be the result? Supposing friendly societies and trade unions admit to their membership apart from any medical tests it means that either the contributions have got to be increased or the benefits decreased. No one is more desirous than I am of seeing that the people who are being put into the class of Post Office contributors because of their invalidity should receive greater benefits, but I cannot understand any suggestion which means that they are going to get those benefits at the expense of the worker of average life. When we come to deal with the people who are excluded from the friendly societies because of the poorness of their lives, it is then I think we ought to be prepared to deal with them. Let those hon. Gentlemen on the opposite side of the House who are shedding tears about this class be prepared to offer some suggestion whereby that burden can be met by the State and not by the rest of the industrial workers of the country.
§ Mr. J. WARDA great deal is being said with reference to the Post Office contributors, and there are promises made that the provisions that affect him in the scheme shall be considered at the earliest opportunity. I venture to say that the case that is put forward for special treatment on the part of trade unions to-night is by far the most important and the most pertinent part of this controversy and discussion, because, after all, whatever we may say to the contrary, the Post Office contributor's wrongs will be a gradually vanishing quantity. Anyone can see that when all the young fellows are 409 obliged to become members of approved societies, or given the chance of becoming members of approved societies, that gradually the source from which the Post Office contributor is at present, or at least in the initial stages, recruited will be entirely sapped. Therefore the difficulties of the Post Office contributor will disappear in the course of, at the outside, ten or fifteen years. But in the case of trade unions, it is a permanent disability. The very fact that trade unions operate for the purpose of graduating wages and conditions of work, and that those are their primary objects, means naturally that they cannot distinguish between one workman and another, and they cannot possibly apply a medical test to those who are to become members of the trade union. That is an unfortunate situation, and therefore when the Chancellor is delivering speeches and other Members of the Government claiming equality for all, the only way by which that equality can be secured is by the Amendment that is being proposed here from the Labour Benches. Here are a number of societies which, by the very nature of their organisation, by the primary fact of their existence, cannot distinguish between one man and another so long as he is working at his trade. Even though he shows all the symptoms of some disease, he must be included as a member for trade and other purposes entirely outside this Bill. It is impossible to say that a man shall be a member of one part of a society, and absolutely exclude him by a medical test from being a member of another part. Hence it seems to me that unless this Amendment is considered as a part of the proposed scheme, it will be impossible for the trade unions and friendly societies to start on anything like an equality. With regard to surpluses, it was suggested that probably the trade unions would not be in favour of a national equalisation. I feel sure that all the trade unions of the country would be in favour of such a proposal, for the simple reason that if they are obliged to admit all, bad lives as well as good, they will never have any surplus at all. The matter may not seem important to men who are not closely connected with the trade union movement, but it can easily be seen that the trade unions will have to face difficulties which will not apply to any other form of approved society. For that reason, I think the matter ought to be thoroughly considered. The idea that this Amendment, if carried, would upset 410 the actuarial basis of the whole concern is founded on the supposition that that basis has been considered on the assumption that only good lives were to be dealt with, and that the bad lives would all be pushed into the category of Post Office contributors. If that is so, those who made the calculation did not understand the subject with which they were dealing, because, as far as we are concerned, good and bad lives do not count. Other societies can reject any life about which they have the least doubt on health grounds; therefore, we clearly cannot start on the same basis. Hence this is a most important Amendment, and I hope that as many Members as possible will support it.
§ Mr. RUPERT GWYNNEThe hon. Member who has just sat down, confined his remarks principally to the suggestion that this matter should be thoroughly discussed and considered. May I say that it is unfortunate that he did not foresee that yesterday and vote against the Closure instead of voting for it.
Mr. TYSON WILSONI am not quite in agreement with my hon. Friend who has just sat down, for while there are trade unions where the members do not undergo a medical test, there are other unions which have a section into which members desiring to enter do undergo a medical test. As I understand the matter—perhaps the Home Secretary will correct me if I am wrong—the Government are in favour of this Amendment. Well, if they are not, they do not recognise the interests of the working classes of the country. I took it for granted when the Bill was introduced, and ever since, that the Government wished the present friendly societies and trade unions to administer the Act. That is to say that there should be as many people as possible receive the benefits provided by the Bill through these societies. If the Government are against this Amendment, then they are in favour of a restricted application of the Bill to trade unions and friendly societies. I believe that in the interests of the Bill itself, as well as of the people insured, that the medical test ought to be abolished. I will tell the House why.
If the medical test is abolished, then the friendly societies will make a provision in their rules for the admission of people who at present cannot comply with the rules of the societies. Therefore, we should have a greater number of people who would be catered for by the friendly societies than 411 will be catered for if this Amendment is rejected. That being so, I am extremely surprised that the Government should object to this Amendment. As a matter of fact, there is not the least doubt whatever in the minds of people who are directly affected by the Bill but that the Government have been "got at." We cannot get away from that fact. If the Government wish the Bill to be a success, if they wish it to be administered properly and as it ought to be, they will accept this Amendment. It seems to me they want to force people who at the present time are not accepted by friendly societies into some other society. I would like to ask the Members of the Government who at the present time are in charge of the Bill if that is so or not? Do they wish to force people who cannot pass a medical test into the societies that may be formed after the passing of this Act? If they are not in favour of doing that, then they must be in favour of our Amendment.
Speaking as a member of a friendly society and of a trade union, I am going to support the Amendment by my vote. I believe it is in the best interests not only of insured persons, but of the Bill itself, that the Bill should be administered, as far as possible, by the friendly societies and trade unions at present in existence. If the Government wish to give preferential treatment to the new societies that may be created under the Bill, then they will instruct their followers to go into the Lobby against this Amendment. I use the word "instruct" in its best possible sense. I want to see Members of this House voting in accordance with the dictates of their conscience, and in accordance with their own judgment. If Members are going to accept this Amendment of the Chancellor of the Exchequer, as explained by the Attorney-General and the Home Secretary they are going to damn the Bill from the commencement. So far as I am concerned I do not care a brass farthing what their opinion is. I know a great deal more about the management of trade unions and friendly societies than the right hon. Gentleman does. That being so, if he has advised the Government not to accept this Amendment I do not give much for his judgment in matters affecting the welfare of the working classes generally. I sincerely trust that the Opposition and the Irish party will support the Labour party in this Amendment moved in their name.
§ Mr. LANSBURYI regret very much that there is not more time to discuss this matter. I am one of those who foresaw the difficulties we should be in in discussing this Bill, and I not only spoke but voted against the Closure which is going to drop very soon, and it is pretty extras ordinary that it should drop on one of its enthusiastic supporters in this fashion. Those who really mean business about this Bill and want to help the poor and the suffering, to lift up the destitute and the downtrodden, have now a fine opportunity of showing where they are. I appeal to Liberal Members who have stumped the country talking about 9d. for 4d., who have been denouncing myself and others as wreckers of a measure which is going to bring healing to the sick and the suffering in the slums, to show where they are to-night on this Amendment. If you pass a test for these people you are going to rule out the sick and the suffering and to tumble them all down into the pool, to segregate them all in one mass together in the Post Office contributors. Where is all the sympathy for the Post Office depositors now, and all the talk about wanting to help the people who could not get into the friendly societies? What an idea to talk about this as a national insurance Bill which is going to insure the nation! What business have you going about tailing in that manner, or what right have you to tell the people in the slums you are going to give them 9d. for 4d. when you put up this test against people who need the help most? You are putting up this test against those afflicted with incipient phthisis. You are going to let the society rule out those people in the early stages of it, and you are going to consider them, who are but a few, with the loafers and the ne'er-do-wells. If right hon. Gentlemen on the Front Bench study this question at all and really mean a tithe of what they told the electors they are bound in honour to vote for this Amendment and to remove every restriction. You cannot make a national scheme unless you take everyone in. I challenge the hon. Member for Pontefract (Mr. Booth), great expert as he is, to prove this is a national scheme if those people are ruled out.
§ Mr. LANSBURYWell, if he does I will challenge a vote. I have got convictions on this matter, but I would not for the 413 world accuse the hon. Member of having any. But in this matter, if you are to set up a national scheme at all, and if the Government mean a national scheme for the sick and suffering people, they are bound to vote for this Amendment. You cannot get out of it, and you cannot go to the people and say this is a national scheme while you rule out all these suffering people.
And it being Half-past Ten of the clock, the Chairman, pursuant to the Order of the House of the 25th October, proceeded to put forthwith the Question on the Motion already proposed from the Chair.
§ Question, "That those words be there inserted," put, and negatived.
§ The CHAIRMANthen proceeded successively to put forthwith the Question on any Amendments moved by the Government of which notice had been given, and the Question necessary to dispose of the business to be concluded at this day's sitting.
§ Amendment made: In Sub-section (3) leave out the words,
§ "A society may apply for approval," and insert instead thereof the words, "Applications for approval under this section may be made and approval granted."—[Mr. Lloyd George.]
§ Further Amendment made: In Subsection (3) leave out the words,
§ "a society with less than ten thousand members being insured persons which otherwise fulfils the requirements of this section may be approved by the Insurance Commissioners conditionally upon its having the requisite number of such members within such time as the Insurance Commissioners may allow," and to insert instead thereof the words,
§ "the Insurance Commissioners may grant approval either unconditionally or subject to the condition of the society taking within such time as the Commissioners may allow such steps as may be necessary to make the society comply with the requirements of this Act relating to approved societies."—[Mr. Lloyd George.]
§ Committee report Progress; Committee to sit again to-morrow (Friday).
414§ Whereupon Mr. Speaker, pursuant to the Order of the House of 24th October, proposed the Question, "That this House do now adjourn."