HC Deb 05 August 1913 vol 56 cc1315-25

(1) Where an employed contributor who is a member of an approved society pays to the society such part of any arrears which have accrued due by or in respect of him during any period of unemployment as would have been payable otherwise than by the employer had he continued in employment, the part which would have been so payable by the employer shall be excused, and the amount of the member's arrears shall be reduced accordingly. For the purpose of calculating the parts which would have been payable by the employer and otherwise than by an employer had an employed contributor continued in employment, the rate of his remuneration shall be deemed to exceed two shillings and sixpence a working day, unless he proves to the satisfaction of the society that his normal rate of remuneration was two and sixpence a working day or less, in which case his rate of remuneration shall be deemed to be such normal rate.

(2) Where in any year a society, or in the case of a society with branches a branch of a society, proves to the satisfaction of the Insurance Commissioners that the total number of weekly contributions which accrued due as arrears during the preceding year in respect of all its members who were employed contributors exceeded the standard number (that is to say three weekly contributions for every such member) then, for the purpose of recouping to the society the loss it will suffer, there shall be paid to the society, or to the society on behalf of the branch, as the case may be, out of the sums retained by the Insurance Commissioners for discharging their liabilities in respect of reserve values, the prescribed amount for every week by which the standard was so exceeded, but not exceeding the total amount so excused as aforesaid:

Provided that if the aggregate amount so payable in any year exceeds one hundred thousand pounds the excess shall be paid out of moneys provided by Parliament.

(3) The Insurance Commissioners may make regulations for carrying this Section into effect.

Mr. BATHURST

I beg to move, in Sub-section (1), to leave out the word "normal" ["his normal rate of remuneration"], and to insert instead thereof the word "usual."

This is the Clause which provides that in the case of arrears of contributions henceforward an employed contributor, who is in arrears, shall only pay his own contribution and shall not pay his employer's contribution. Then arises the difficult question as to what is the employer's contribution, because in the case of persons receiving less than 2s. 6d. per working day the employer's contribution may not be 4d. but may be run up to 5d. or 6d. Then comes the question, How are you going to ascertain in every case what is the employer's contribution from which the employed contributor shall be exempted? Of course, there are a large number of persons who are in occasional agricultural employment, and that is the class to which I wish particularly to refer the House in discussing this matter. This Clause provides that, in any case the onus shall be upon this man—and I think it is a serious onus—to prove to the satisfaction of the society that his normal rate of remuneration was either 2s. 6d. or less per working day. I think it is very difficult for that man, whether in good or bad employment, to prove to the executive of his society what his normal rate of remuneration was. What was clearly intended here by the expression "normal" was his usual rate of remuneration. I object to the word "normal," because it suggests the rate of remuneration when in continuous good employment. That is what the word "normal" conveys to my mind, and that is exactly what we do not want this unfortunate man to have to prove, because occasional employment may bring down his wages from 3s. to is. 6d. per day, and he ought to get the full benefit of the lower wage, or, in other words, the full benefit of the higher contribution which his employer would have made, and which the man, now that he is in arrears, is to be excused from paying. The word "normal" does not convey what the Clause is intended to meet. It does not convey what rate of pay the man has received, taking his wages over an average of days. It suggests rather the rate of remuneration he would get if in continuous, and for him, good employment. I suggest that the word "normal" does not meet the case in this class of labour, and that the word "usual" would be more likely to be inter- preted in his favour, as it is clearly intended we should interpret it.

Mr. DENNISS

I beg to second the Amendment.

Mr. MASTERMAN

We had a long Debate on this matter in Committee. The word originally proposed by the hon. Member was "average" and we objected to that. I think he saw the force of the objection. We also object to the word "normal" on the same ground as the hon. Gentleman. I think "usual" is perfectly harmless, and we will accept the Amendment.

Amendment agreed to.

Further Amendments made: In Subsection (1), after the word "two" ["remuneration was two and sixpence a working day or less"], insert the word "shillings."—[Mr. Bathurst.]

Leave out the word "normal" ["deemed to be such normal rate"], and insert instead thereof the word "usual."—[Mr. Bathurst.]

Mr. WORTHINGTON-EVANS

I beg to move, in Sub-section (2), to leave out the words "the standard number (that is to say three," and to insert instead thereof the word "two."

The effect of the Amendment, if carried, would be to relieve the funds of the approved society from an inroad which is about to be made upon them in respect of the remission of an insured person's arrears, and to place the liability which will arise upon the reserve value fund to a larger extent than is contemplated by the Bill.

Mr. MASTERMAN

The Amendment, as I understand it, would mean that an increased amount would be required. The hon. Gentleman proposes to meet it by saying that the amount of the increased liability shall be paid out of the sinking fund, but if you increase the liability you are also bound to increase the contingent liability. He must, therefore, inevitably lay the charge on that fund.

Mr. WORTHINGTON-EVANS

The right hon. Gentleman was right on the former occasion, but he is not right now. There are three funds which would go to pay the amount remitted to the insured person in respect of arrears of contributions. The first, is the society's own funds, the second, is the sum not exceeding £100,000 from the reserve value fund, and then, if there is anything left, the money is provided by Parliament. What I am proposing is that part of the liability should be shifted from the approved societies fund on to the reserve value fund, and not on to the moneys provided by Parliament at all, and in order to protect the moneys provided by Parliament my consequential Amendment is that the £100,000 shall be changed into £150,000, so that Parliament shall not be called on to pay any money until £150,000 has been paid out of the reserve value fund. The right hon. Gentleman cannot say that this Amendment, with its difference between two weeks and three weeks, is going to make £50,000 difference or anything like it.

Mr. MASTERMAN

The question is whether the responsibility of the charge should be laid on the subject, and in this case there is not the slightest doubt that the subject will have to bear the contingent liability.

Mr. WORTHINGTON-EVANS

I will meet the right hon. Gentleman's point when I come to my Amendment lower down. I will not put in any limit or will put in such a large limit as will satisfy him that no charge shall be put on moneys payable by Parliament, and that question will not arise until we come lower down. I, therefore, submit that my Amendment is in order, and that I should be allowed to move it. We had a discussion in Committee upstairs on this. I feel it is necessary to ask hon. Gentlemen to follow what is being done by this Amendment, and how the funds of the society are being benefited. Therefore, I must ask forbearance for a moment while I try to explain what is happening under the original Act and what is going to happen under this Bill. Under the original Act a man contributes so long as he is in employment. He may, therefore, contribute fifty-two contributions in the year, but those fifty-two contributions are valued for the purpose of paying the benefits as if they were forty-eight only and not fifty-two, and there is a margin of at least three weeks, that are referred to in this Amendment. That three weeks are preserved in hand as a margin for the societies that do not receive fifty-two contributions. If, on the average, they receive forty-nine contributions in the course of the year, the number of the contributions they receive and their liabilities for benefits balance, and they will be in a state of exact solvency. If, on the other hand, they receive more than forty-nine contribu- tions, it is something that gives an additional margin out of which they can pay additional benefits, if in the course of time it accumulates to such a sum as will enable them to so employ it. This Bill says that in future employed contributors, in order to avoid the penalty of arrears, need not pay the employer's share of the contribution so long as they are unemployed. That will cost the society something. The Government says in this Bill, "We will refund the societies anything that they may lose in excess of the three weeks' average per annum," That is to say, the three weeks additional contribution which that society would receive from all the members who were employed for fifty-two weeks of the year, the three weeks in addition to the forty-nine, the standard, would be taken away from them to pay arrears owing to individual members not having to pay up employers' contributions when they are unemployed. The effect of my Amendment is that there shall be refunded to the approved societies any loss in excess of two weeks, instead of three weeks.

I hope that the Secretary to the Treasury will accept this Amendment. He did refuse in Committee an Amendment, which I think was moved by my hon. Friend the Member for Salisbury (Mr. G. Locker-Lampson), asking that the societies should be refunded any loss whatever that they suffered. The present Amendment is a more modest one, asking that they shall be refunded all loss which they suffer over two weeks. This will make a considerable difference to the societies. It may make a difference of £30,000 or £40,000 a year to the societies in the aggregate. But it is not only for the societies in the aggregate; it is for the particular societies that I am more concerned, because on some societies the effect of unemployment will be very much worse than on others. In some specialised societies—for example, the British Steel Smokers, or the Iron Tinplate Workers' approved societies, or such trade societies as I have in my mind—unemployment might very easily affect them to a much larger extent than it would affect a general society with members of all employments, where the risk of unemployment at any time would be spread over a large area, and not concentrated on a special trade. The British Steel Smokers have made a very elaborate calculation of the effect upon them of the Amending Act, and, as I understand the calculations, they con- sider that an extra liability is thrown upon their funds of £9,000, being about 22s. per member, and as against that there is an expectation for a slight increase of annual contributions of £312. The additional annual contribution is nothing like enough to pay the additional liability which is thrown upon them under this Bill. I hope the House will understand that I am in favour of the remission of the employed contributor's contribution while he is out of employment, but I want that loss made up to the society out of the reserve value fund, and not out of the margin which they will require for the purpose of sickness and invalidity claims. I say that they have no margin to spare, and if this Amendment is made it ought not to be made at the cost of the funds. It ought to be made at the cost of the reserve value funds. I am not asking that more money should be paid out of moneys provided by Parliament, but I am asking that the reserve value fund should be raided to the extent of £150,000 a year, if necessary, instead of to the limit of £100,000, which the right hon. Gentleman takes at the present moment.

Mr. DENNISS

I beg to second the Amendment.

Mr. MASTERMAN

We had a very long discussion in the Committee on the whole of this question, and there may have been something—there was something—said as to whether greater obligations should not be undertaken by the State in connection with this matter if the State had funds for the purpose, but I must confess that there is no kind of argument at all, if I may say so with respect, for the particular proposition of the hon. Gentleman. What does it mean? The reserve funds are contributed by all societies, bad as well as good—I mean bad in unemployment as well as good in unemployment—and the more you take from the reserve fund and the greater charge you lay on it in favour of societies which have a small amount of unemployment, the more you definitely take away from the societies which have a large amount of unemployment. To him who hath you give, and from him who hath not, you take away even that which he seemeth to have. That is the worst possible way of dealing with this subject. The whole idea underlying the paying of arrears of contributions in part out of this reserve fund was that there should be a kind of capitalisation of risk of unemployment. Consequently, the main benefit goes to these societies which have a large amount of unemployment. The hon. Gentleman by this proposition would make the benefit go to those societies who are so lucky as to have a small amount of unemployment. We must first see how this Clause works, as there are so many factors of which we must have experience. For instance, no one knows how many societies will pay the employer's contribution which they are authorised to do. No one knows how much the fact that a man has now to pay up only fourpence to get rid of arrears instead of sevenpence will increase the number of fourpences paid up, or how many more fourpences will be paid up than there would have been sevenpences, and how those fourpences will bring up the particular profits of those societies. That profit is not at all allowed for in the actuarial calculations, and any money so paid is a pure gain to the society. I confess that I cannot accept figures such as those which the hon. Gentleman advances because they leave out all these calculations, which at present I agree is inevitable, and he says that they only gain £312. We cannot tell how much arrears will be paid off nor how many more people will be willing to pay arrears now that the sevenpence is taken away from it. All these are facts which must be taken into consideration, and I submit that it is better to let the Clause work as it stands. It is a very great boon. Two sources, the State and the sinking fund, certainly contribute. Possibly the society contributes also, though to a limited extent, though I must confess that all my advisers, my actuaries, including one of the most brilliant

actuaries in England, Mr. Watson, and the very skilled actuarial Committee to which this question was referred at my request, both of them say, that taking the subject as a whole, and speaking generally, there should be no loss to the societies through the operation of this Clause.

Mr. CASSEL

A most remarkable change has come over the attitude of the Government on this question on Report as compared with their attitude in Committee. In the Committee stage, when it was possible to move an Amendment which would have thrown this on the National fund, the right hon. Gentleman adopted that Clause of the Bill which takes £100,000 away from the reserve value. To-day, when it is impossible to move that any part of it should fall upon the State, the right hon. Gentleman says, "how wicked it would be to take from the reserve valuation. It is taking from him who hath not, and giving to him who hath." If that be a sound argument at all, why should he have done so under the Bill to the extent of £100,000 a year?

Mr. MASTERMAN

On that point the whole question is this: The hon. Gentleman proposes to add extra money to the reserve value for the purpose of directly giving money to the societies which have very little unemployment. That is a perfectly new proposition. We say that the money should be given to the societies which have a very large percentage of unemployment.

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

The House divided: Ayes, 259; Noes, 81.

Division No. 257.] AYES. [5.29 p.m.
Abraham, William (Dublin, Harbour) Boyle, Daniel (Mayo, North) Crumley, Patrick
Acland, Francis Brace, William Cullinan, John
Addison, Dr. Christopher Brady, Patrick Joseph Davies, David (Montgomery Co.)
Adkins, Sir W. Ryland D. Brocklehurst, W. B. Davies, Ellis William (Eifion)
Alden, Percy Brunner, John F. L. Dawes, J. A.
Allen, Arthur A. (Dumbartonshire) Bryce, J. Annan De Forest, Baron
Allen, Rt. Hon. Charles P. (Stroud) Burke, E. Haviland- Delany, William
Arnold Sydney Burt, Rt. Hon. Thomas Denman, Hon, R. D.
Atherley-Jones, Llewellyn A. Buxton, Noel (Norfolk, North) Devlin, Joseph
Baker, H. T. (Accrington) Buxton, Rt. Hon. Sydney C. (Poplar) Dickinson, W. H.
Baker, Joseph Allen (Finsbury, E.) Byles, Sir William Pollard Dillon, John
Balfour, Sir Robert (Lanark) Carr-Gomm, H. W. Donelan, Captain A.
Banbury, Sir Frederick George Cawley, Sir Frederick (Prestwich) Doris, William
Barlow, Sir John Emmott (Somerset) Cawley, Harold T. (Lancs., Heywood) Duffy, William J.
Barnes, G. N. Chancellor, Henry George Duncan, C. (Barrow-in-Furness)
Beale, Sir William Phipson Chapple, Dr. William Allen Edwards, Clement (Glamorgan, E.)
Beck, Arthur Cecil Clancy, John Joseph Edwards, John Hugh (Glamorgan, Mid)
Benn, W. W. (T. Hamlets, St. George) Clough, William Elverston, Sir Harold
Bentham, G. J. Collins, G. P. (Greenock) Esmonde, Dr. John (Tipperary, N.)
Bethell, Sir J. H. Condon, Thomas Joseph Esmonde, Sir Thomas (Wexford, N.)
Birrell, Rt. Hon. Augustine Cornwall, Sir Edwin A. Essex, Sir Richard Walter
Boland, John Pius Cotton, William Francis Falconer, James
Booth, Frederick Handel Cowan, W. H. Fenwick, Rt Hon. Charles
Bowerman, C. W. Craig, Herbert J. (Tynemouth) Ferens, Rt. Hon. Thomas Robinson
Ffrench, Peter Macdonald, J. Ramsay (Leicester) Rea, Rt. Hon. Russell (South Shields)
Field, William Macdonald, J. M. (Falkirk Burghs) Rea, Walter Russell (Scarborough)
Fitzgibbon, John McGhee, Richard Reddy, Michael
Flavin, Michael Joseph Maclean, Donald Redmond, John E. (Waterford)
France, Gerald Ashburner Macnamara, Rt. Hon. Dr. T. J. Redmond, William (Clare, E.)
George, Rt. Hon. D. Lloyd MacNeill, J. G. Swift (Donegal, South) Redmond, William Archer (Tyrone, E.)
Gill, A. H. Macpherson, James Ian Richardson, Thomas (Whitehaven)
Ginnell, Laurence MacVeagh, Jeremiah Roberts, Charles H. (Lincoln)
Gladstone, W. G. C. M'Callum, Sir John M. Roberts, G. H. (Norwich)
Glanville, H. J. M'Laren, Hon. H. D. (Leics.) Roberts, Sir J. H. (Denbighs)
Goldstone, Frank M'Laren, Hon. F.W.S. (Lincs.,Spalding) Robertson, J. M. (Tyneside)
Greig, Colonel J. W. Manfield, Harry Roche, Augustine (Louth)
Griffith, Ellis J. Marks, Sir George Croydon Roe, Sir Thomas
Guest, Major Hon. C. H. C. (Pembroke) Marshall, Arthur Harold Rowlands, James
Guest, Hon. Frederick E. (Dorset, E.) Masterman, Rt. Hon. C. F. G. Rowntree, Arnold
Gwynn, Stephen Lucius (Galway) Meagher, Michael Runciman, Rt. Hon. Walter
Hackett, John Meehan, Francis E. (Leitrim, N.) Samuel, Rt. Hon. H. L. (Cleveland)
Hall, Frederick (Yorks, Normanton) Meehan, Patrick J. (Queen's Co., Leix) Samuel, J. (Stockton-on-Tees)
Harcourt, Rt. Hon. Lewis (Rossendale) Middlebrook, William Scanlan, Thomas
Harcourt, Robert V. (Montrose) Millar, James Duncan Scott, A. MacCallum (Glas., Bridgeton)
Harmsworth, Cecil (Luton, Beds.) Molloy, Michael Seely, Rt. Hon. Colonel J. E. B.
Harmsworth, R. L. (Caithness-shire) Molteno, Percy Alport Sheehy, David
Harvey, A. G. C. (Rochdale) Money. L. G. Chiozza Shortt, Edward
Harvey, T. E. (Leeds, West) Morgan, George Hay Simon, Rt. Hon. Sir John Allsebrook
Hayden, John Patrick Morrell, Philip Smith, Albert (Lancs., Clitheroe)
Hayward, Evan Morison, Hector Smyth, Thomas F. (Leitrim, S.)
Hazleton, Richard Morton, Alpheus Cleophas Snowden, Philip
Hemmerde, Edward George Muldoon, John Stanley, Albert (Staffs, N.W.)
Henderson, J. M. (Aberdeen, W.) Munro, R. Strauss, Edward A. (Southwark, West)
Henry, Sir Charles Munro-Ferguson, Rt. Hon. R. C. Sutton, John E.
Hewart, Gordon Murray, Captain Hon. Arthur C. Taylor, John W. (Durham)
Higham, John Sharp Neilson, Francis Taylor, Theodore C. (Radcliffe)
Hinds, John Nolan, Joseph Taylor, Thomas (Bolton)
Hobhouse, Rt. Hon. Charles E. H. Norton, Captain Cecil W. Tennant, Harold John
Hodge, John Nugent, Sir Walter Richard Thomas, J. H.
Hogge, James Myles Nuttall, Harry Thorne, G. R. (Wolverhampton)
Holmes, Daniel Turner O'Brien, Patrick (Kilkenny) Thorne, William (West Ham)
Holt, Richard Durning O'Connor, John (Kildare, N.) Toulmin, Sir George
Howard, Hon. Geoffrey O'Connor, T. P. (Liverpool) Trevelyan, Charles Philips
Hughes, S. L. O'Doherty, Philip Ure, Rt. Hon. Alexander
Isaacs, Rt. Hon. Sir Rufus O'Donnell, Thomas Wadsworth, John
John, Edward Thomas O'Dowd, John Walsh, Stephen (Lancs., Ince)
Jones, Rt.Hon.Sir D.Brynmor (Sw'nsea) O'Grady, James Ward, John (Stoke-upon-Trent)
Jones, Henry Haydn (Merioneth) O'Kelly, Edward P. (Wicklow, W.) Wardle, George J.
Jones, J. Towyn (Carmarthen, East) O'Malley, William Waring, Walter
Jones, William (Carnarvonshire) O'Neill, Dr. Charles (Armagh, S.) Webb, H.
Jones, W. S. Glyn- (Stepney) O'Shaughnessy, P, J. White, J. Dundas (Glasgow, Tradeston)
Jowett, F. W. O'Shee, James John White, Patrick (Meath, North)
Joyce, Michael O'Sullivan, Timothy Whittaker, Rt. Hon. Sir Thomas P.
Keating, Matthew Outhwaite, R. L. Whyte, A. F. (Perth)
Kellaway, Frederick George Palmer, Godfrey Mark Williams, J. (Glamorgan)
Kelly, Edward Parker, James (Halifax) Williams, Llewelyn (Carmarthen)
Kennedy, Vincent Paul Pearce, Robert (Staffs, Leek) Wilson, Hon. G. G. (Hull, W.)
King, J. Pease, Rt. Hon. Joseph A. (Rotherham) Wilson, John (Durham, Mid)
Lambert, Richard (Wilts, Cricklade) Phillips, John (Longford, South) Wilson, Rt. Hon. J. W. (Worcs., N.)
Lardner, James C. R. Pointer, Joseph Wilson, W. T. (Westhoughton)
Law, Hugh A. (Donegal, W.) Ponsonby, Arthur A. W. H. Wing, Thomas Edward
Lawson, Sir W. (Cumb'rld, Cockerm'th) Price, C. E. (Edinburgh, Central) Wood, Rt. Hon. T. McKinnon (Glasgow)
Leach, Charles Priestley, Sir W. E. B. (Bradford, E.) Young, William (Perthshire, E.)
Levy, Sir Maurice Primrose, Hon. Neil James Yoxall, Sir James Henry
Lewis, Rt. Hon. John Herbert Pringle, William M. R.
Lundon, Thomas Radford, G. H. TELLERS FOR THE AYES.—Mr. Illingworth and Mr. Gulland.
Lyell, Charles Henry Raphael, Sir Herbert H.
Lynch, A. A.
NOES.
Agg-Gardner, James Tynte Craig, Ernest (Cheshire, Crewe) Gretton, John
Baird, John Lawrence Craik, Sir Henry Hamilton, C. G. C. (Ches., Altrincham)
Baldwin, Stanley Dalrymple, Viscount Harris, Henry Percy
Baring, Maj. Hon. Guy V. (Winchester) Dalziel, Davison (Brixton) Henderson, Major H. (Berkshire)
Barnston, Harry Denniss, E. R. B. Henderson, Sir A. (St. Geo., Han. Sq.)
Bathurst, Charles (Wilts, Wilton) Duncannon, Viscount Hoare, S. J. G.
Bentinck, Lord Henry Cavendish- Eyres-Mansell, Bolton M. Hope, James Fitzalan (Sheffield)
Bird, Alfred Fell, Arthur Hope, Major J. A. (Midlothian)
Blair, Reginald Finlay, Rt. Hon. Sir Robert Horner, Andrew Long
Boyle, William (Norfolk, Mid) Fisher, Rt. Hon. W. Hayes Hunt, Rowland
Bridgeman, W. Clive Fitzroy, Hon. Edward A. Ingleby, Holcombe
Burn, Colonel C. R. Forster, Henry William Kinloch-Cooke, Sir Clement
Cassel, Felix Glazebrook, Captain Philip K. Lawson, Hon. H. (T. H'mts., Mile End)
Cator, John Goldsmith, Frank Lloyd, George Butler (Shrewsbury)
Cecil, Evelyn (Aston Manor) Gordon, Hon. John Edward (Brighton) Locker-Lampson, G. (Salisbury)
Cecil, Lord R. (Herts, Hitchin) Goulding. Edward Alfred Lowe, Sir F. W. (Birm., Edgbaston)
Clay, Captain H. H. Spender Grant, J. A. MacCaw, William J. McGeagh
Clive, Captain Percy Archer Greene, Walter Raymond Magnus, Sir Philip
Mount, William Arthur Sanders, Robert Arthur Tullibardine, Marquess of
Newdegate, F. A. Spear, Sir John Ward White, Major G. D. (Lancs., Southport)
Newman, John R. P. Stanley, Hon. G. F. (Preston) Wills, Sir Gilbert
Orde-Powlett, Hon. W, G. A. Steel-Maitland, A. D. Wolmer, Viscount
Pease, Herbert Pike (Darlington) Stewart, Gershom Wood, John (Stalybridge)
Pollock, Ernest Murray Swift, Rigby Yate, Colonel C. E.
Pryce-Jones, Col. E. (M'tgomy B'ghs) Talbot, Lord E. Younger, Sir George
Handles, Sir John S. Thompson, Robert (Belfast, North)
Roberts, S. (Sheffield, Ecclesall) Thomson, W. Mitchell- (Down, N.) TELLERS FOR THE NOES.—Mr. Worthington-Evans and Mr. F. Hall
Salter, Arthur Clavell Tryon, Captain George Clement