§ (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 2912 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.
§ The CHAIRMANMr. Worthington-Evans.
§ Sir PHILIP MAGNUSBefore you call upon Mr. Worthington-Evans, might I be allowed to make a protest of which I hope the Government will take notice, namely, that there are two Grand Commitees meeting at 11.30 to-day, in which to a certain extent the same interests are affected?
§ The CHAIRMANI do not think we can go into that. The Committee decided yesterday to meet at 11.30 to-day, and that would have been the proper time to have put any points of that sort. It cannot affect our proceedings.
Mr. WORTHINGTON-EVANSI beg to move, in Sub-section (2), to leave out the words, "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 very such member) then." I have a series of Amendments which are very complicated as they stand on the Paper. I think it will be to the convenience of the Committee if I read the Clause as it would stand if the Amendments were accepted. The Amendments refer to Clause 2, Sub-section (2). If they were incorporated in the draft of the first few lines of the Sub-section it would then read as follows:—
For the purpose of recouping to the society the loss it will suffer under the foregoing provision, there shall be paid in each year to the Society, or in the case of a Society with branches, to the Society on behalf of the branches, as the case may be, out of the moneys retained by the Insurance Commissioners to dis- 2913 charge their liability in respect of reserve values the total amount so excused as aforesaid.The object of this Amendment is to prevent the funds of the approved societies from being depleted by reason of the provisions introduced into this amending Bill relating to arrears. This first Amendment and the Amendments in the Bill generally have my hearty support; but I am asking that the Government should provide that the employed contributor who is out of work, need not, in order to get out of arrears pay up the amounts of the contributions which are attributable to his employer. In doing that I want the Government to be careful that the approved societies do not make a loss owing to this provision. The cost of Clause (2) is paid for in three ways. First, out of the society's funds. I believe the 'Secretary to the Treasury denies this. He did in the House of Commons. I believe I can persuade him that I am right, and if I am right I hope he will accept the Amendment I am moving. The cost is payable first out of the different societies' funds. Secondly, it is paid for out of the Sinking Fund to the extent of £100,000 per year. Then, if those two funds are not sufficient to pay State funds come in, and it is estimaed that the largest amount the State is likely to be ailed upon to pay is £20,000 a year. There will be no question that the Sinking Fund or State funds do have to pay a portion of the cost of making this Amendment. Where dispute will arise, if it arises at all, is whether the societies' funds are to be called upon to pay any part of this expense. I have to try to prove this point to the Committee before I can ask them to accept this Amendment.The whole question of the arrears, and bow they are paid for, is exceedingly complicated. I shall have to ask Members of the Committee to follow rather carefully if I am to succeed in making my point good. Under the financial provisions of the Act, fifty-two weekly contributions are treated to be of the value of forty-eight, and there is the allowed arrear and a permissive arrear, averaging three weeks in every year, in respect of all contributors. That was arrived at by taking the average of unemployment all over the Kingdom, and making a slight addition to it, and all the actuarial calculations are based upon, not fifty-two weeks contribu- 2914 tions, but either forty-eight or forty-nine, at any rate, three weeks arrears are allowed. The provisions of the Act with regard to benefits are not quite in accordance with these provisions; that is to say that if a man has over an average of three weeks in arrears his benefit is reduced. The average estimate by the Actuaries was an average of all employed people, and if I may, I will try and give an example. Suppose there is a society of 1,000 members. Let us assume for the moment that 900 of those members are one week in arrear. Let us assume that the other hundred of those 1,000 members are so many weeks in arrear that the average of the hundred is three weeks. These societies gain at the present moment two weeks' contributions in respect of the 900 members who are only one week in arrear. As regards the hundred who are many weeks in arrears, in order to get the average of three weeks as regards those hundred, the societies do not lose, because the benefits are reduced for all periods that those members are in arrear in excess of three weeks. So that at the present time there is a considerable sum accruing to these societies on this three weeks' average period. The Government Bill proposes only to reimburse the societies such sum as they may lose by the provisions of this Clause 3 in excess of the total average of three weeks. Therefore in the case I am assuming of the 900 members one week in arrear, but for this provision, the societies would have two weeks contributions in respect of each of those 900 members as a margin over and above these sums that the Actuaries have found necessary originally to provide for benefits. This Bill takes away that margin to that extent, and makes the amendment which is in this Clause paid for partly out of the societies' funds. I do not know whether I have made that clear to the Committee. [HON. MEMBERS: "Hear, hear."] I hope the Financial Secretary will admit those margins are being absorbed by this Bill for the purpose of paying for the arrears. I know there is a contrary argument. I will put that to the Committee. The contrary argument is this: If you were to continue to charge men out of employment 7d. as a contribution in order to enable them to go back into full benefits, that 7d. would be a barrier and not many men would pay up the arrears in order to get full benefits; but if, as this Bill proposes, it were reduced to 4d. or 3d. or even lower, some people would come in and pay 2915 these various sums, and that, on the whole, it is likely that fourpences or threepences would balance what would have been received in respect of the arrears had the arrears remained on the 7d. basis. That is the argument, and that is, I believe, the only argument which in any way tends to disprove the statement I make that the societies' funds axe being drawn upon in this Clause to make good the Amendment which is being proposed. I do not believe anybody can say—certainly, I do not pretend to say—that the aggregate fourpences and threepences will not equal the sevenpence. I do not know. I do not believe anybody can say, certainly without a great deal of experience, whether at any time we will ever be able to say positively or relatively the affect of the amendment on the original provision. This is certain, that the Actuarial Advisory Committee state in the Blue Book recently issued by the Commissioners, p. 555:—
The Advisory Committee are firmly of opinion that the contributions as fixed by the Act contain no margin beyond what is required as Knell provision against increased rates of sickness and disablement.They are sure that there is no more money in the Act than is required for the benefits. I say that this Committee ought not to take away one of these sources of income of the approved societies even for the good of an Amendment such as this is, because if they do, they are running grave risks of putting a large number of Societies into insolvency. I hope very much that the Government will see their way to accept this Amendment. If the Government's contention is right, that the fourpences in future, being more numerous, will balance the sevenpences of the past, then they need have no hesitation at all in accepting this Amendment. In any event it must be a relatively small sum. But then the small sums in some societies may make all the difference, because we do not know what is the distribution of the members between the societies. We may have a society of one class, and that class much affected by unemployment, and in that society, at any rate, this Amendment that I am now proposing would be of extreme importance. Where you have a society with every class represented in it, and you have a real average of unemployment, it would not be, I agree, as important as I think it will be in some cases. But it is just in those cases of societies which have members who do suffer from unemployment, that it is very essential that we make 2916 no inroad on their funds. I hope, therefore, that the Government will be able to see their way to accept this Amendment.
§ The FINANCIAL SECRETARY to the TREASURY (Mr. Masterman)The hon. Gentleman has explained his Amendment with his customary lucidity, but I think I can show to the Committee that this Amendment might lead on the one hand to an excessive demand on either the Sinking Fund or the Government, and that on the other hand the fear he expresses that the societies will be to any material extent called to pay, or rather damnified by the extra demand upon their funds, is an illusion, or at all events a mistaken argument. In order to do that, I must ask the Committee for a few moments to bear with me while I explain the exact meaning of the Clause as it stands. The whole actuarial calculation on which the Bill is based is the fundamental assumption that if forty-nine contributions per year on the average are paid to an approved society, that the approved society is actuarially sound, and any additional money which may be obtained through the payment up of arrears by men who are unfortunate enough to be unemployed is outside that calculation altogether, and is so much gain to the society at the expense of its unemployed members. I think hon. Gentlemen will not object to that description, and though I do not think it is an illegitimate gain, it is not a gain of which a society should be particularly proud when it is gained, as it is gained at present, by the payment of the employer's contribution under the Act. It is gained to the members at the expense of those who were unemployed and who have to pay up, not 4d. as we are proposing under this Bill, but 7d., that is the employer's contribution and their own. It is quite true that this new Grant is confined to societies—that is the Government Grant and the £100,000 from the Sinking Fund—to societies that have less than forty-nine contributions on the average paid. The hon. Member for Colchester (Mr. Worthington-Evans) argues that this means there must be some loss to approved societies which receive none of this new Grant where the. unemployment standard is low. He mentioned one possibility which is quite an incalculable possibility, but which certainly operated in the mind of our chief actuary, and also in the minds of the Actuarial Advisory Committee when they state on the whole they think there would 2917 be no loss to the approved societies at all under the new scheme. The possibility of men being able to pay fourpence when they cannot pay sevenpence will, no doubt, operate to a very large extent in two ways. First, the men outside resent, as everyone in this Committee knows, the demand to pay their employer's contribution as well as their own, and whereas they regard the demand to pay their own as more or less a just demand, they regard the other as unjust. Therefore it is quite likely for that reason they will say, "We will not pay the sevenpence," and also it is easier to pay, in the case of fourpence or a calculation of fourpences than in the case of sevenpence or a calculation of sevenpences. Therefore, as the hon. Gentleman quite fairly said in putting his argument, if more fourpences are paid up to compensate for the sevenpences that are paid up, or supposing that two fourpences are paid up instead of one sevenpence, there will be no loss to the approved societies.
The second point is of still greater importance. The approved societies at the present moment are allowed to excuse the threepence of the employer's contribution, and I believe that certainly some of the trade unions and some of the other great friendly societies are considering whether they will not as a general policy and as part of their method of getting new members, declare that they will excuse the employer's contribution in all cases. They are able to do so in those cases because the actuarial calculation on which the Bill is based did not include the payment up of those arrears. If that is done by any societies, all societies would have to do it in the competition, and in that case, this Bill comes to give help to societies to the extent of £100,000 per year, and the Government contingent guarantee that they would not have got if this Bill had not been passed. Therefore, so far from laying a fresh charge on the friendly societies, it gives them help in meeting a charge which probably I think they would all have to meet in the very near future. Our chief actuary in his actuarial report announces that he thinks under this system no extra charge will be laid on the friendly societies. The report of the Actuarial Advisory Committee is necessarily of a cautious character, but it is quite definite as far as it goes. As regards the probable 2918 annual cost of the proposed Amendment in the Bill it is impossible to make any exact estimate, but Mr. Watson's conclusion is that he thinks it will probably not exceed £120,000. It is only fair to add that that is calculated on normal conditions, and probably under conditions of bad trade, the guarantee would have to go up higher.
§ Mr. MASTERMANThe actuary continues:—
With regard to the effect of the proposed Amendment upon the finances of the Approved Societies it is possible that Societies in which the average of arrears falls below the three weeks per annum would, in some instances, be deprived of the small profit at present arising from payment in full of the employer's share in those cases in which arrears are paid up. Against that must be set the probability that under the arrangement now proposed there will be greater inducement to contributors to pay up arrears in those cases in which no such reduction of benefit is operative. On the whole we do not consider that the financial position of the Societies will to any material extent be affected by the proposed change.When we had to deal with those societies we should have to take money either from the Sinking Fund or from the Government Grant to the societies whose average rate is less than forty-nine. I will show how we are actually dealing with the money which is being given from the Sinking Fund of £100,000 a year. It is for those societies whose average rate of contribution is less than forty-nine, that is those who have abnormal unemployment and who are consequently deserving of special help to raise their average up to forty-nine. Then when their average is raised to forty-nine they come within the ordinary actuarial calculations on which the whole Bill is based. We are thus doing two things; we are laying £100,000 on the Sinking Fund which represents all the insured persons, and by so doing we are making an extension of the time of redemption of the Sinking Fund. We are doing it in order that all insured persons should give some kind of contribution towards the societies which have an abnormal lack of employment due to no fault of their own. We are averaging the unemployment disability to the extent of the £100,000 laid on the Sinking Fund of all societies, and I think everyone will agree that that is a fair thing to do. Some societies will have from the very nature of 2919 their occupation far more unemployment than others. Some societies will have practically no unemployment at all, but it is right that the societies which have an enormous amount of unemployment should receive, not from the approved societies, but from the Sinking Fund, some help. In thus averaging we are taking on a contingent liability for the State, and we estimate that immediately at £20,000 annually. But of course in times of bad trade that might rise to a considerable extent, and it is quite impossible to estimate the amount. Under those circumstances the State ought not to be asked to take on any further liability or the Sinking Fund asked because, even if in times of bad trade the liability laid on the State rose to £50,000 or £100,000, we should still have to deal with it as we are taking it on whatever it is under this Bill. I have to apologise for making what is longer than a usual Committee speech. I therefore submit that, fortified with the actuary's report and the report of the Actuarial Committee, and with the explanation I have given, the Committee can legitimately extend this very great boon to the friendly societies without being under any apprehension that any material cost will be laid on the approved societies whatever.
§ Mr. FORSTERI am sure the right hon. Gentleman need not apologise for the length of his observations. We are dealing with an extremely important point, and although nobody wants to occupy the time of the Committee unduly, yet it is only fair to the Committee itself that the arguments on both sides should be placed fully before the Committee. I confess that the speech which the right hon. Gentleman has just made does not convince me that his view of the matter is right as opposed to that which has been expressed by the hon. Member for Colchester (Mr. Worthington-Evans). One of the concluding observations of the right hon. Gentleman rather confirms me in my preference for the proposal which my hon. Friend has laid before the Committee. The Secretary to the Treasury said that in view of contingencies in the future, additional liability may be thrown on either the Sinking Fund or the State.
§ Mr. MASTERMANThat on the Sinking Fund is limited to £100,000, and the contingent liabilities are on the State only.
§ Mr. FORSTERThat there might conceivably be additional liability thrown upon the State which the right hon. Gentleman was unwilling that the State should undertake, and surely then—
§ Mr. MASTERMANI am sorry to interrupt, but my argument was just the opposite. I said it was because we were bound to take that contingent liability that we did not want to increase any further liability on the State by alteration of the Clause.
§ Mr. FORSTERI do not see how the proposal of my hon. Friend is going unduly to increase the liability thrown on the State unless the liability which may be thrown upon the margin of the friendly societies is going to be very much heavier than any of us have any reason to suspect.
§ Mr. FORSTERIf there is any possibility of a contingent increase of liability, it must fall either on the margin of the societies or the State. I entirely agree with my hon. Friend that we must do everything that we can to protect the funds of the friendly societies. We are, to a certain extent, I think, from first to last in this matter rather groping in the dark. We are arguing upon what may happen, and not upon facts. Really, it is a matter upon which each Member of the Committee must form his own opinion. The object which my hon. friend has had in bringing the matter before the Committee is a genuine desire to see that the funds of the societies shall be protected. It is admitted by the right hon. Gentleman that there is in the present arrangement of the Act a margin in favour of the societies. It is admitted in the Report of the Commission that every margin which is given to the societies now is needed for the provision of benefits. We do not want, and we ought not in any way to entrench upon any margin the societies may now possess, and it is because we feel that very strongly that we shall support the proposal of my hon. Friend.
§ Mr. BOOTHI agree with almost every word that has fallen from the hon. Member for the Sevenoaks Division (Mr. Forster) except that it does not quite lead me to the conclusion to support this Amendment. At the same time I want to draw the attention of the Committee to the fact that this is one of the points that does not operate evenly 2921 on the various societies, and the speech of the Secretary to the Treasury refers more to some of the trade unions and some of the old friendly societies and some of the specialised approved societies. But those societies which have organized people who were not previously in the habit of providing for sickness stand to have a worse experience in this matter of unemployment. We are not at all convinced that there will not be some loss to approved societies owing to this present Bill. It is quite true that we gain with regard to the employers' contributions, because it must be obvious to all who have gone about the country that competition will force the various societies to forego the employers' contributions. Therefore, it is no good reckoning that that is anybody's loss. I advanced that view in public meetings nearly two years ago. I am perfectly certain that societies could not enforce it. There would be no heart in the job on the part of the officials, and competition would prevent it. But I want to make this appeal to the Government. Whilst we are prepared to take their scheme and try to make it work, if it is found that their calculations are seriously out, I think we have a right to approach them, say, next year. We have some misgiving that there will be a little more loss than the right hon. Gentleman has anticipated, but we do not think that that is sufficient to object to the Bill. We are still more uneasy about the Amendment of the hon. Member for Colchester. It does not put the matter right at all. Therefore, after sounding the warning note that we think there will be a little more loss than the right hon. Gentleman anticipates, we are prepared to give the proposal a trial, and to try to make it go. But if our anticipations are confirmed, we think we should have a right to approach the Government in regard to an amending Bill.
§ Mr. G. LOCKER-LAMPSONThe hon. Member for Colchester has proved, certainly to my mind, that a great deal of liability will fall upon the societies. There is one other item of loss to the approved societies which has not been mentioned. For the purpose of the weekly deduction of 1 5–9d. for the Sinking Fund, the reduced payments of 4d. a week to be made by insured persons, are to be treated as full payments. I do not think there is much doubt about that, because in the Actuary's Report, page 6, Section 16, it is stated that out of the full weekly contri- 2922 bution, the sum of 1 5–9d. in the case of men, and 1½d. in the case of women, applied towards the redemption of reserve value contributions, although the employer's portion has been excused, will presumably be deemed a full contribution for this purpose. I do not think there is the slightest doubt that that means a great deal of loss to approved societies, because not only are they going to receive reduced payments from their members, but they are going to have 1 5–9d. taken away, not from 7d. but from 4d. The affect of that will be that you will prolong the period of the Sinking Fund. You will prolong the period of the ultimate solvency of approved societies. If you do that, it means the extension of the period before the additional benefits will be paid. I think that point has been overlooked by the Government.
§ Mr. RUPERT GWYNNEI do not think the right hon. Gentleman in his reply dealt with the main point made by my hon. Friend. My hon. Friend told us very clearly and fairly that he did not think that in many circumstances there would be a heavy loss to certain societies, but that in cases of abnormal unemployment the loss might be serious and heavy. It is to protect societies against this that he has brought forward his Amendment. The right hon. Gentleman adduced three arguments against accepting the Amendment. The first was that if we accepted the Amendment, it might lead to excessive demands on the Sinking Fund or the Government. Those were the right hon. Gentleman's words. He went on to say that the Actuary's report stated that it was not likely that the funds of the approved societies under the Clause proposed by the Government, would, to any material extent, be affected. I would ask which of the two he means. He cannot have the argument both ways. It cannot be both cheap and dear at the same time. It cannot be going to cost both a lot and a little. His remaining argument was that he understood—he admitted that was very much in the air—that certain trade unions and societies might take it into their heads to excuse the employer's contribution, and in that event the funds of the societies would not suffer. But have we a right to reject an Amendment of this sort if admittedly there might be a grievance in certain cases to certain societies, merely because the right hon. Gentleman thinks or has heard a rumour that certain societies may do something in 2923 the future? Unless we have some further and better argument than has yet been put forward, I hope my hon. Friend will press his Amendment to a Division.
§ Mr. G. H. ROBERTSI am not quite clear as to whether the Amendment submitted by the hon. Member for Colchester quite meets the case, as I understand it, although I am free to confess that, so far as the argument has advanced, I am convinced there is something in the case which he has submitted. If I am able to construe aright the Amendments on the Paper, I think those standing in the name of the hon. Member for Salisbury (Mr. Godfrey Locker-Lampson) would better meet the case in the particular that I want to advance. I have had statistics taken out in respect of one of the large trade unions in the country.
§ Mr. ROBERTSYes. They have very carefully calculated the possibilities of this Bill, and they estimate that it will cast an increased liability upon them. At the same time, the fact that men will be induced to pay the 4d. who previously were unable to pay the 7d., or, as the right hon. Gentleman may have put it, unwilling to do so because of the sense of the injustice of being called upon to pay the employer's portion of the contribution, may, in the ultimate, actually balance or even increase their income; but because of the fact that the average of the whole membership payment may work out, on the forty-nine weeks per year basis of the actuarial calculation, very slightly under, that society, although their liabilities are increased far in excess of the estimated possible increase of income, will get no relief whatever under this amending Bill. Everybody has been concerned as to how far it would be possible and politic to relieve unfortunate members of approved societies of that portion of the contribution termed the employer's part. I have always felt that either by the method of a charge upon the Sinking Fund, or preferably by a direct State Grant, an allowance ought to be made to each approved society in respect of those numbers of weeks affecting their members who have been unemployed over a given period. If I understand aright the Amendments of the hon. Member for Salisbury, that is the purpose he has in view.
§ Mr. G. LOCKER-LAMPSONThat is so.
§ Mr. ROBERTSThey are the Amendments that I would prefer. I hope the right hon. Gentleman in charge of the Bill will not tell us that he has said his last word, because I am convinced that he will find amongst the trade unions and friendly societies a great apprehension that, although in the ultimate they may secure an apparent increase of income, nevertheless the liability is so large that it must involve a demand upon the ordinary funds of the society, and they fear that ultimately the triennial valuation may also compel them to impose a levy upon their members. Therefore, I beg the right hon. Gentleman to give some further consideration to the point, and see if it is not possible to meet us on the lines of the propositions of the hon. Member for Salisbury, which, if they are moved, I shall feel compelled to support.
Mr. MacCALLUM SCOTTI should like the right hon. Gentleman to give us a little further information with regard to the words "which accrued due as arrears during the preceding year." Does that mean that the quarter has been allowed to elapse without stamps being placed on the card, and that therefore that period counts as arrears? At present, if a man is unemployed, and places a 7d. stamp upon his card, I understand that that is not counted as arrears. Supposing he places a 4d. stamp on his card: would that week be included as arrears, when the card was handed in? It has not been in arrear; it has been paid at the time. What I am anxious to ascertain is the method by which it is proposed to pay the arrears. Can they be paid week by week, by placing a stamp on the card, or must they, under the new system, be left over until the end of the quarter, and then be paid by some arrangement?
§ The CHAIRMANI think the hon. Member had better raise this point on the question "That the Clause stand part of the Bill." It does not arise on the Amendment.
Mr. MacCALLUM SCOTTIt affects the calculation as to the amount of arrears, as to whether a person has been in arrears for the standard period during the quarter. I think it directly arises on the Amendment.
Mr. WORTHINGTON-EVANSThe hon. Member for Pontefract (Mr. Booth), clearly admits that at any rate he fears there will be a draft upon the funds of the societies if this Amendment is not ac- 2925 cepted. I hear an hon. Member say he does not admit it. I think the hon. Member for Pontefract will say now, as he said before, that it is not clear that loss will not fall upon the funds of the approved societies. Indeed, he said that so much did he fear that, that he reserved his liberty to approach the Treasury or the Insurance Commissioners next year—not this year, not now, but next year—to make good the loss which will then have occurred.
§ Mr. BOOTHNo, not that we would approach them next year to make good the loss which might have occurred. We are quite willing to accept this and work it until the time comes; but if we find that it involves loss, it should not be permanent for the future, but that an amending Bill should be considered.
Mr. WORTHINGTON-EVANSI should like to know for whom the hon. Member for Pontefract speaks in these circumstances, because those who have considered the real effect see that there will be a loss. We know what coming back next year means. Next year never comes. We have to try now to protect the funds of the societies and in my view we would be foolish and not only foolish but criminal not to protect these funds now. With regard to what the hon. Member (Mr. George Roberts) said as to the terms of the Amendment I have no pride of parentage. I do not mind which of the Amendments are accepted if the Government will accept either one or the other. If the right hon. Gentleman the Secretary to the Treasury will accept the Amendment of my hon. Friend the Member for Salisbury I will withdraw mine. As a matter of fact, I believe, both Amendments carry out exactly the same thing, and, they are merely alternative words. It does not matter to me which Amendment is accepted so long as the matter is now dealt with. I ask the Secretary to the Treasury will he accept the Amendment of my hon. Friend and if he does I will withdraw mine, otherwise I must ask the Committee to divide.
| Division No. 2.] | AYES. | |
| Addison, Dr. | Dawes, Mr. | Macnamara, Dr. |
| Ainsworth, Mr. | Devlin, Mr. | Masterman, Mr. |
| Alden, Mr. | Falconer, Mr. | Money, Mr. Chiozza |
| Beck, Mr. | Harcourt, Mr. Robert | Pearce, Mr. William |
| Booth, Mr. | Harvey, Mr. Edmund | Roberts, Mr. Charles |
| Boyle, Mr. Daniel | Jones, Mr. Haydn | Samuel, Mr. Jonathan |
| Byles, Sir William | Lardner, Mr. | Scott, Mr. MacCallum |
| Carr-Gomm, Mr. | Lynch, Mr. | Wing, Mr. |
| Davies, Mr. Ellis |
§ Mr. MASTERMANI would like to give way if I could but I am afraid it is impossible in the circumstances. I agree with the hon. Member for Pontefract that if it was proved any loss fell upon the societies it would be necessary to take immediate steps to see that they should suffer no loss. He also made the very pregnant statement which I think the Committee ought to keep in mind, and that was from his experience the societies will be forced to excuse the employer's contribution. And if that is so every farthing given under this Bill is a pure gain to the approved societies, and the distribution of the money is such that those societies with the greater amount of unemployment get more than those with less, and that is a fair distribution of the money at our disposal either from the Sinking Fund or from the State Grant. Every society will be helped out of this money that has less than forty-nine contributions. The socities which have more than forty-nine contributions, if they were to lose anything by this—and it is purely a factor that must be worked out in practice, would not lose under the actuarial calculation.
§ Mr. MASTERMANIt was not in the actuarial calculation at all.
§ Mr. MASTERMANThey do not get money at all at present because we have not put into operation the Arrears Clauses. In these circumstances, I must only ask the members of the Committee to support the Government and reject the Amendment.
§ Question put, "That the words proposed to be left out stand part of the Clause."
§ The Committee divided: Ayes, 25; Noes, 22.
| NOES. | ||
| Baker, Sir Randolf | Lawson, Mr. Harry | Ormsby-Gore, Mr. |
| Boyle, Mr. William | Locker-Lampson, Mr. Godfrey | Parkes, Mr. |
| Clay, Captain | Macdonald, Mr. Ramsay | Roberts, Mr. George |
| Craik, Sir Henry | M'Neill, Mr. Ronald | Sandys, Mr. |
| Forster, Mr. | Magnus, Sir Philip | Thomas, Mr. |
| Goulding, Mr. | Newman, Mr. | Tryon, Captain |
| Gwynne, Mr. Rupert | O'Grady, Mr. | Worthington-Evans, Mr. |
| Hamilton, Mr. |
§ Mr. G. LOCKER-LAMPSON had given notice of the following Amendment. After Sub-section (2) to insert the following Sub-section: "(3) In the case of a deposit contributor there shall be credited to his account at the end of each quarter on the surrendering of his current insurance card such a sum as will increase the balance to his credit by the amount representing the total suns that would have been paid by an employer had the contributor remained continuously in employment. All such sums credited as above shall be paid out of moneys provided by Parliament, provided that, in the event of the death of a deposit contributor or where a deposit contributor proves to the satisfaction of the Insurance Commissioners that he has permanently ceased to reside in the United Kingdom, the sum payable under paragraphs (f) and (g) of Section 42 of the principal Act shall be based upon the amount to the deposit contributors credit less any sums credited to his account out of moneys provided by Parliament under this section, and such amount so credited shall accordingly be repaid to Parliament."
§ The CHAIRMANThe Amendment standing in the name of the hon. Member is, in my opinion, out of Order.
§ Mr. G. LOCKER-LAMPSONI might explain that these arrears, of course, will not affect a deposit contributor, and that is why I put in a special Clause saying that as arrears will not affect a deposit contributor, therefore, the employer's contribution should be paid to the deposit account. I do not intend the arrears Clause here to affect the deposit contributor at all. The object of this Amendment is to put the deposit contributor on the same sort of basis that they would be supposing they were insured persons, members of approved societies, and in order to do that I am trying to allow for the payment of the employer's contribution into the deposit account, and therefore I submit it will be in order to discuss it here.
§ Mr. MASTERMANOn a point of Order. I do not want to stop any discussion at all, but I think this would be quite proper as a new Clause. It deals not with arrears but with deposit contributors, which is a totally different part of the Act, therefore, I submit it would be quite proper as a new Clause but not as art Amendment at this stage.
§ The CHAIRMANSo far as my judgment goes, there are no arrears such as we are considering for deposit contributors; the hon. Member himself admits that, and therefore the Amendment is outside the scope of this part of the Bill. He can bring it up in the form of a new Clause.
§ Mr. GOULDINGhad given notice on the following Amendment, after Sub-section (2) to insert the words, "Where it is necessary for an approved society to be recouped in respect of the arrears of a woman re-entering insurance upon the death of her husband, being at that time aged fifty years or over, there shall be transferred from the sums retained by the Insurance Commissioners for discharging their liabilities in respect of reserve values the proper reserve value calculated according to tables to be prepared by the Insurance Commissioners, and Section forty-four, Sub-section (1), of the principal Act shall be read accordingly.
§ The CHAIRMANI think that the Amendment of the hon. Member for Worcester is in the same category as the one with which we have just dealt. It should form a new clause dealing with married women's re-entry. It is not dealing with arrears in the sense that we are now dealing with them.
§ Mr. GOULDINGThese women to whose grievance I direct attention in this Sub-section are dealt with when they would be in arrear and therefore the question of arrears undoubtedly arises. If the women's position is dealt with at all they would come in under the Clause on being in arrears, and therefore entry would only be possible if their position was dealt with here.
§ The CHAIRMANThis seems to me to raise the question of re-entry. At any rate the hon. Member by raising the question here has protected himself in bringing it up as a new Clause. I think it is practically a new subject outside this particular Clause.
§ Mr. GOULDINGSupposing it came up as a new Clause that was favourably received by the Committee, would that enable these women to come in and obtain the advantage under this arrears Section?
§ Mr. MASTERMANThe hon. Gentleman desires to modify Clause 44 of the principal Act?
§ Mr. GOULDINGThat is it.
§ Mr. MASTERMANThat has nothing to do with arrears at all. The arrears Clause is a totally different Clause. Any modification of Clause 44, I submit, such as the hon. Gentleman suggests, would be in order.
§ Mr. GOULDINGIf the transfer value was dealt with as suggested, then these women would come into the category of being in arrears, because they are only kept in a state of not being in arrears by the holding up of this third value. Once the third value was dealt with they would come into that category.
§ Mr. MASTERMANI want to preserve the hon. Gentleman's Amendment. Clause 44 (1) deals with married women being suspended, and the conditions of re-entry, and really the appropriate time to deal with any question of arrears is on that re-entry. It is a special provision dealing with married women, and has nothing to do with the general arrears Clause.
§ The CHAIRMANAfter what the right hon. Gentleman has said there will be no difficulty in bringing it in afterwards.
§ Mr. G. LOCKER-LAMPSONI beg to propose in Sub-section 3, after the word "may," to insert the words, "after consultation with the Advisory Committee."
I hope that this Amendment will be accepted by the Government. I feel more or less justified in my hope because I see that various hon. Members are supporting me in this Amendment. I do not want to say anything about the Commissioners as a body, but I do feel that under the present system the Commissioners have got an enormous amount of power. Everybody agrees that the existing body of Insurance Commissioners are doing their 2930 duties most ably, and I think that everybody would agree that the existing body of Commissioners can be thoroughly trusted, but we do not in the least know who the Commissioners are going to be in future, and I think it is most inadvisable to increase the powers of the Commissioners in the amending Act. Everybody knows that under the original Act the Commissioners can practically legislate on National Insurance, and without Parliament saying that they want the Act amended they can in Buckingham Gate practically bring Amendments within the scope of the National Insurance Act without Parliament really knowing anything about it. For that reason I do feel that we ought to put a certain amount of check upon these Insurance Commissioners in making regulations under this section. I also think that it is most advisable, as the Advisory Committee has been appointed a Committee composed of a great many expert persons who know more about the subject of Insurance than I suppose any other people in the country, that that Committee should be consulted in making regulations under this section. I cannot see why the Government would not accept this Amendment, and I hope very much that they will. I hope that hon. Members who are supporting me in this Amendment swill make their observations in due course, and I hope that it will not be necessary to prolong debate upon it, because I think that it is a very sensible and very sound Amendment.
§ Mr. MASTERMANI am thoroughly in agreement with the hon. Member's contention. The Advisory Committee was set up to be consulted under Statute by Clause 58 and it has been consulted, and we are very grateful for the advice which has been given. In no case have any substantial regulations been made under the Bill without consultation with the whole of the Advisory Committee, or with part of it which is specially affected, that is the part that represents the insured persons. I have some objection to putting in the words "after consultation with the Advisory Committee" in this special point with regard to this special class of regulation, because if you put it into the special regulations it implies that there is no need to consult the Advisory Committee in other cases under the Bill. I object also to the obligation to consult the Advisory. Committee as a whole when there may be only a necessity really to summon the representatives of approved societies. 2931 Every meeting of the Advisory Committee costs between £150 and £200, and it is absurd, for instance, to summon all the doctors to come up on the Advisory Committee when dealing with something that does not in the least concern medical attendance. I will give an undertaking that the Advisory Committee shall be consulted, or the part of it affected, in regard to all these regulations so far as it is practicable. I do not think anyone has any real grievance as to the past, because we have called in whenever possible the Advisory Committee, and I should like to say in public how much we appreciate the advice which has been given by the Advisory Committee. Under these circumstances I hope the hon. Member will see his way to withdraw his Amendment.
§ Mr. GWYNNEI would like to ask what right the hon. Gentleman has to give a guarantee as to what the Commissioners will do in the future. He has told me several times in the House of Commons that they are an independent body of men, and under these circumstances, what is the worth of his undertaking that the Insurance Commissioners will do this or that in the future. I wish to ask the right hon. Gentleman has he or has he not control of the Insurance Commissioners?
§ Mr. MASTERMANI am not going to discuss constitutional points at this time. The hon. Gentleman knows that the minutes are laid on the table of the House and explanations have been given as to what extent the Insurance Commissioners are responsible.
§ Mr. GWYNNEI have always failed to elicit what is the position of this mysterious body, and I should like some demonstration as to how they carry on their work. I should like to see a meeting of the Insurance Commissioners and hear them discuss matters, because I think this is a matter of the utmost importance. We are at the present time handing over to a body of men rights which we possess in regard to matters which we ought to deal with in the House of Commons, and, when we are asked to delegate those rights we ought to know to what extent they will be used. The right hon. Gentleman says he will give us a guarantee that the Commissioners will not do this or that, but I say he is not in a position to do that sort of "Dr. Jekyll and Mr. Hyde" business. We are told this and that, but we never get to know who is playing the part of 2932 "Bunty" at Buckingham Gate. I want to know when they discuss a matter do they put it to a vote, or are they such an amiable body of men—
§ The CHAIRMANI do not think that question arises.
§ Mr. GWYNNEI look upon this as a most important thing, because I think that to hand over powers to a body of men who are not responsible to Parliament is a very serious thing. [HON. MEMBERS: "They are responsible."] The whole way through this Bill we have been handing over increased powers to the Commissioners. The main point is that we are responsible to our Constituencies for certain things, and if we delegate these powers we have no right to know what they are doing or what conditions they are making, and therefore we are placing ourselves in a very invidious position. The right hon. Gentleman says that he is not in a position to definitely undertake to say that they shall be consulted, because it costs £200 to call them together.
§ Mr. MASTERMANThe whole of the Committee.
§ Mr. GWYNNEThen why did he set up such an unwieldly body. We are asking him to consult the Advisory Committee which is supposed to represent the various interests concerned. We have had it pressed upon us time after time that the Advisory Committee will not do a thing against the interests of insured persons or the friendly societies. If that is so why not let them be consulted. If the right hon. Gentleman is afraid that the insertion of this Amendment will be taken to mean that in other cases they should not be consulted, by all means let us insert the same Amendment in cases where we are handing over fresh powers to the Commissioners.
§ Mr. J. H. THOMASI wish to dissociate myself from the view which the hon. Member has put forward in supporting this Amendment. If what he has put forward is the object he has in view, then I say that that is not our object in putting this Amendment on the Paper. I want to point out to the Committee that at the present moment the hon. Member is supporting this Amendment because he says he is responsible to his constituents. If this Amendment were carried for that object it would give the hon. Member, or rather the Treasury, an additional argument against responsibility, because he must see that if the object is to consult 2933 the Advisory Committee before anything is done, it will only remain for the Government to say that it was not the Commissioners but the Advisory Committee who were responsible, and that would shelve the whole responsibility and Parliament would have no check at all. Obviously, the Commissioners would be able to say it was the Advisory Committee and not them who were responsible. The object we have in view in supporting this Amendment is, first of all, because the Advisory Committee is in direct contact with the approved societies. They know many of the details and local circumstances which the Insurance Commissioners cannot possibly know, and we are not called upon to give a certificate for good conduct to the Commissioners at all. I think that consideration can le left out entirely, whether we are considering the present or the past. We all know they have done their work well under extremely difficult circumstances. Perhaps the right hon. Gentleman would meet us in this way. We do not want the whole body consulted, because there are questions that are peculiarly applicable to certain Members of the Committee, and no one suggests that the whole Committee should be called together to consider such questions. If the undertaking given by the right hon. Gentleman means that on a particular matter peculiar and important to a section of the Advisory Committee that section will be consulted, I think that is all we can expect, and that will remove our objections.
§ Mr. HARRY LAWSONThere is so large a measure of agreement with the Committee as to the policy and principle of this Amendment that we ought very quickly to arrive at a decision. It seems to me that the argument used by the Financial Secretary from the point of view of good administration is to a large extent unanswerable. At the same time that does not satisfy the reasonable point made by my hon. Friend the Member for Salisbury. His guarantee is a personal guarantee which the next occupant of his office could put on one side. Parliament is not in the least protected. The right of criticism and of control is not reserved. It is merely a personal matter. My hon. Friend wants something more than that, and I think Parliament is entitled to have something more. What I suggest is that the various arrangements for consultation of the Advisory Committee should be made by way of rule, and 2934 laid on the table of the House so that the House could preserve its power in the matter; it should not be reduced merely to a question of personal good faith, of which there may be no doubt but which in the long run is really not satisfactory either to the Treasury or to the House of Commons. I suggest that all these matters should be drawn up in the form of rules, and laid on the table of the House. I suppose, by way of address or in some other way, objection could be taken to them, if objection were necessary, and at the same time the ordinary necessities of administration, which I quite agree are against the Amendment as it stands, could be maintained and continued.
§ The CHAIRMANWider regulations of the Advisory Committee, hardly come under this Clause.
§ Mr. HARRY LAWSONOn the point of Order. Where do we stand? I ask whether the Financial Secretary would not be perfectly at liberty to give an assurance of that kind?
§ The CHAIRMANI wish to avoid discussion on the general powers and proceedings of the Advisory Committee under this Amendment.
§ Mr. G. LOCKER-LAMPSONI think the right hon. Gentleman did make one valid objection to my suggestion, and that was that it would be very difficult to call the whole of the Advisory Committee together to deal perhaps with a minor point. I do not know if he would be willing to accept the following alternative suggestion:—"The Insurance Commissioners may, after consultation with such Members of the Advisory Committee who may be selected by that Committee for the purpose, make regulations for carrying this Section into effect." The Advisory Committee can very easily appoint subcommittees to deal with the various parts of the Bill—actuarial, certain aspects of sickness benefits or administration—and whenever a point arises the Insurance Commissioners could quite easily send for one or two people to advise them on a particular point. I do not think I can accept the right hon. Gentleman's mere promise, because, after all, he is not always, every minute of the day, in touch with the administration. I do not know whether this alternative would meet with his approval.
§ Mr. MASTERMANI do not think I could take any definite legislative proposal at the moment, but, if the hon. Gentleman will allow me, I will, without making any definite promise, consider the suggestion made by the Member for Stepney whether it would be possible to lay down definite rules as to what class of Members of the Advisory Committee should be consulted and under what conditions. Perhaps the hon. Gentleman will accept that promise and withdraw his Amendment.
§ Amendment, by leave, withdrawn.
§ Question proposed, "That the Clause stand part of the Bill."
Mr. McCALLUM-SCOTTI want to mention a point which I raised earlier as to the meaning of the words "accrued due." This concession (the payment of the employers' contribution by the State out of the Reserve Fund) is made only in respect of arrears which have "accrued due." I would like my right hon. Friend to explain exactly how much is covered by the words "accrued due." and how it is proposed that these arrears should be paid by the insured person. What does "accrued due" mean at the present time? If a man has been out of work and himself places upon his card a 7d. stamp, being his own and his employers' contributions then that is not "accrued due." There are no arrears accrued due unless the man hands in his card without the stamps, and then he can pay them up by means of a special arrears card. After this Bill has been passed, I presume that the position will be much the same. Is it proposed that each card should be handed in to the society with all these weeks blank and that then the society shall count how much the arrears are? I suggest that perhaps that might lead to a great deal more work, and that it would be very much better if the member were allowed to place a stamp on his card for the whole of his own contribution, whether 4d. or 3d., that then the society should calculate how much there is still due for the employers' contribution, and that that should be presented to the Insurance Commissioners. I think that there is a little point there which requires some clearing up.
§ Mr. MASTERMANThe point will be given consideration. I am told that there would be great difficulty in dealing with the 4d. being placed on the ordinary card, 2936 but the subject will certainly be considered.
§ Question, "That the Clause stand part of the Bill," put, and agreed to.