§ "The regulations of the Insurance Commissioners under Sub-section (7) of Section 10 of the principal Act (as to the calculation of the average amount of arrears) may provide that the average shall be calculated periodically with reference to complete half-years of insurance corresponding with the periods for which contribution cards are issued and disregarding incomplete half-years, and may provide that the reduction, postponement, or suspension of benefits consequent upon the average arrears as ascertained for the period terminating with the end of any half-year shall not come into operation until the prescribed date in the half-year next ensuing, and, subject to the provisions of Sub-section (5) of the said Section, shall continue in force until the prescribed date in the next following half-year."
§ Clause brought up, and read the first time.
§ Mr. MASTERMAN
I beg to move, "That the Clause be read a second time."
It has been suggested that this Clause, not having been put down earlier on the Paper, is an infringement of the agreement to which we came. I would have put it 'down had I understood that exception was to be taken to it, and would have starred the Arrears Clause standing in the names of the hon. Members for Leicester and Pontefract, in which case this would have been moved as an Amendment. It turns on exactly the same subject, and I am quite sure, if I may say so, that it would have been accepted as an Amendment to the Clause which I should have starred. I say that the Clause is necessary if we are to get what every member of an approved society regards as absolutely essential for their administration—that they should have six-monthly cards, which I promised to endeavour to get from this Committee at the request of the hon. Gentleman opposite. If the hon. Member for Sevenoaks who leads the party opposite persists in his 3446 objection that this is a breach of faith, I have no alternative but to ask that the Question be withdrawn. But if that be done I think I may honestly say that there will be very great disappointment among members of approved societies in all parts of the country who have been looking forward to this very great lightening of efforts which would come from such a result.
§ Mr. FORSTER
The right hon. Gentleman has spoken of a "breach of faith" but I would not go so far as that. When was approached on the matter, it was felt under the circumstances to be rather outside the category of the Clauses which we agreed should be brought on to-day, but I do not want, the Clause to be postponed or dropped on that account. What I plead for is further time to understand the Clause. I personally received my Parliamentary Papers this morning at 10.45, and one of the first things I naturally did was to turn to the Order Paper to see what Clauses the right hon. Gentleman had adopted. I saw a very large number of Clauses which bear the right hon. Gentleman's name. For the first time I read this Clause, and it took me all the time until I had to leave to come down to the Committee to make out the precise meaning of the new Clause which we had reached. Indeed, the time was not sufficient. I have read the Clause, re-read it, and if it had been possible I would have read it backwards, in the vain effort to find out what it means, and really how it will affect an insured person. I cannot help thinking that some insured persons are going to be less well off in the matter of arrears under this Clause. I can quite understand those who are responsible for the administration of approved societies want it. They want simplification—a six-months' card. We do not object to a six-months' card; on the contrary, we have always expressed ourselves in favour of a six-months' card. What we do suggest to the right hon. Gentleman is that he should not have brought the Clause up at this moment, but have brought it up on Report when we should have had further opportunity for studying it. I see nothing to prevent this Clause from being moved on the Report in the interests of enlightened discussion, and I hope the right hon. Gentleman will take my advice.
§ Mr. G. LOCKER-LAMPSON
It is no use my attempting to explain this Clause until we know what is to be done.
I do not make any charge of breach of faith; although I consider that this Clause is outside the category of the Clauses the right hon. Gentleman said the Government were going to take to-day. But I have not the slightest desire on that ground that it should not be proceeded with. I am prepared to meet it on its merits if the right hon. Gentleman thinks that to bring this on Report is not a practical suggestion. I should prefer that the Government should issue a memorandum showing how it works. I know there are some cases in which the insured person is going to suffer severely owing to this proposed method of dealing with arrears, and I think the right hon. Gentleman will be wise to postpone it to the Report stage, meanwhile issuing a memorandum on the subject.
Why is it not possible to give approved societies the right to write up their card every six months, without bringing in the question of arrears in the Clause.
§ Mr. G. LOCKER-LAMPSON
During the past few weeks I have been pressed most urgently by various big friendly societies and orders to put something on the Paper to meet this difficulty. I am not responsible, I should like to say at once, for the drafting of this Clause. What happened was this was approached to see whether I could not put down a Clause on the Paper, and I personally asked the Government's draftsmen whether they would be kind enough to think out words to carry out the intention I had in view, which was the intention of the friendly societies, and they kindly supplied me with this drafted Clause which I have handed in. It is an extremely difficult Clause to understand, but I must honestly say that, as far as I can see, it does to a very large extent meet the wishes of the friendly societies. I have studied both Clauses very carefully. The hon. Member for Leicester went a great deal further than the Clause as proposed, because I think the Clause proposed by the hon. Member would have entailed an alteration of the Fifth Schedule; and I do not think, as far as I can see, that the Amendment which I have on the Paper would necessitate any alteration in the Schedule. The Clause I propose is much more a matter of machinery.
I should like to point out to the Committee, if I may, what of course they know 3448 quite well, that this is a question which will not arise until after July 14th next, because the question of arrears does not arise until the first year after the passing of the Act and its coming into operation. I think I am right in that.
§ Mr. G. LOCKER-LAMPSON
The question of arrears so far as the calculation which has to be made by secretaries is concerned does not arise until a year after the passing of the Act. Is not that so?
§ Mr. G. LOCKER-LAMPSON
The difficulty is just beginning, and I believe it will become absolutely intolerable to the various officials of the friendly societies unless we can pass some such Amendment as this into law. I have here many documents and quotations. I have one from the "National Insurance Gazette" which tells us very tersely, but in much plainer words than I can, what the secretaries have to do under the existing system of calculating arrears. It says—Anyone with practical knowledge must know that the calculation of arrears under the principal Act is certain to be difficult and extremely likely to produce chaos. We have an official document before us which shows that to arrive at the average arrears as under the principal Act the following procedure should be gone through: first, the number of days a person has been in insurance must he totted up; second, the sum must be divided by seven to find the number of weeks; third, the number of weeks' arrears as shown by the book, and the current card must he divided by the quotient as just ascertained; and, fourth, the result must be multiplied by fifty-two and one-fifth.I have also a quotation from a statement by the Grand Master of the Manchester Unity. He says:—Every friendly society official is convinced that the present system of calculating arrears is terribly complicated and likely to cause difficulty to local secretaries.If any hon. Member on the Committee wishes to see it, I have here a sheet which I received from the Grand Master of the Manchester Unity showing the exact figures. They are most complicated, bat they have to be gone through under the present system. I should like to point out to the Committee that in Clause 10 of the principal Act, Sub-section (7), it is stated that "the average amount of arrears for the purposes of this Section shall be calcu- 3449 lated in such manner as the insurance Commissioners may prescribe."
I am told that the legal advisers of the Insurance Commissioners have informed them that, under the Act, they are legally bound to collect arrears in this very complicated fashion. They cannot help themselves, and, unless some alteration is made, this very complicated calculation will have to be gone on with. One of the reasons why I think it is most advisable to make an alteration is that if you have these enormous complications of calculation it is quite possible the secretaries and officials of friendly societies will make mistakes, and in a great many cases it is possible also that insured persons will not get the benefits to which they are properly entitled. Unless we do something to diminish this great complexity of calculation some of these insured persons may possibly, get reduced benefits. That is one of the reasons why I am strongly in favour of this alteration. I do not know whether the Committee would like me to go into the very complicated provisions of this Clause, but in a very few words I can tell hon. Members what it proposes to do. It proposes that completed half-years should be taken into account in calculating the average arrears. The societies will thus calculate the arrears twice a year instead of four times annually, as they do at the present moment, and the advantage of this is that it will lead to the adoption of six-monthly contribution cards and that, I believe, all friendly society officials very much want indeed. If you have a six-monthly contribution card, instead of a quarterly contribution period as at the present moment, it will result in a reduction of administration expenses, because it will lead to a reduction of distribution and collection.
§ Mr. G. LOCKER-LAMPSON
It will lead to a diminution of both trouble and expense. I have also been looking into the question whether this will really affect the benefits which insured persons are going to get. I do not believe that it will, I do not think it will in the least affect the benefits which are received by persons under the present system. The only difference it may possibly make is this, that in the period of six months during which the benefits are to be reduced on the basis of arrears during the previous six months it is possible that the man very much in arrear may get rather more and that the person not so much 3450 in arrear will get a very little less. As far as I can see under this proposal the only possible effect it can have on the benefits of insured persons is that the person who is most in want of benefit will get perhaps a little more at a particular period while the person who is not so much in need of it may possibly get very little less. I believe that practically, if you take the scheme throughout, it will make no difference whatsoever on the whole in the benefits received. I therefore very much hope that the Committee will accept this new Clause. It may be necessary, on Report, to make certain little alterations, but, as the whole of the friendly society world, I believe, desires this change, I hope hon. Members will see their way to accept it.
§ Mr. RAMSAY MACDONALD
I also hope that the Committee will put this Clause into the Bill, so that at any rate we may have time to consider it between now and Report. I did not know that the Clause was to appear on the Paper this morning, and, consequently, I have not been able to consider how far it actually differs from the Clause which I myself have drafted. My Clause is based upon a twelve months' average, while the hon. Gentleman's is based on a six months' average, and that is not a very substantial difference, unless it involves something much more, and, at the moment, so far as I can see, the whole of the Clause which we are now considering does not obviate the point, which is a very bad point, that when a person gets into arrears for a considerable period in one year he drags on and on and on, out of the maximum benefit for an undesirably long time. That has been the point which has been met, and which I hope will have been dealt with by this Clause as it has been worded, though I am not quite sure that I am right as to that.
§ Mr. RAMSAY MACDONALD
I think my Clause is better from that point of view than the hon. Member's. I should like to say with reference to the "National Insurance Gazette," that it goes on to make certain comments and certain suggestions which are rather on the lines of the Clause I have drafted than of the Clause of the hon. Member opposite, because it says:—How on earth the average local representative is to do this calculating we do not know, He simply cannot do it. What is needed is something simple and lair to take the place of the confusion arising out of the principal Act.3451 I think that is very definite. It means that something must be done, and it must he done now. I have great sympathy with the suggestion that something simple and fair is needed to take the place of the confusion arising out of the principal Act. The paper goes on to say—It can be found easily enough. If on July 14th in any year a man is in arrear five weeks on the average (namely one week over the four weeks allowed free) let the sick pay to which he is entitled in the next year be reduced by sixpence (to 9s. 6d.) and so on sixpence for every additional week in arrear. (It would not be sixpence in every case; it would depend on his age of course.) That is the essence of simplicity. Anyone can do the necessary reckoning. Indeed the rate of sick pay due can he inserted in the books at the beginning of the year and at once read off when a claim arises.It is because that leading article in the "National Insurance Gazette" runs so closely upon the lines of my own Amendment, at the moment, I am inclined to prefer my wording to that of the hon. Member. But I am not going to oppose the insertion of the hon. Member's Amendment, because it will give us time to consider the matter before the Report stage in the middle of next week, and we may by then agree upon some form of words which will meet a difficulty, the existence of which all admit.
§ Mr. GLYN-JONES
I am not against this Clause, but I think it is necessary to offer a warning which is this, that this relieving of the difficulties of the approved societies which we are bound to secure by means of having six-monthly cards, is going to increase the difficulty of keeping in touch with insured persons throughout the country. By having three-monthly cards you ensure communication every three months. But the Insurance Committees at this stage are working very largely on a register, the addresses upon which are about nine months' old, and if you have six-monthly cards it means that the insured person may not come into touch with the society more than twice a year. Seeing that one-third of the population moves every year, this step we are now taking means that the Government must find some way by which the insured persons may be kept in touch with the Insurance Committees or with the approved societies very much oftener than is now the case.
Personally, I think this Clause is just about as bad as it possibly can be. If we are going to alter the words at all, we ought to alter them boldly on the lines of the Amendment of the hon. Member for Leicester. It is no use tinkering at it. This has one 3452 effect only. It enables a half-yearly card to be brought in, but it creates a very considerable risk of injustice to insured people as it stands at the present moment. As I understand this Clause, the first half-year's card—the broken period of the first year—is not to count, nor is the current broken period to count for the purpose of arrears. If hon. Members will follow this for a moment, I shall show them how it would work out in the case of a man who had been very nearly eighteen months in insurance. As it stands, this niggling, half-way house Amendment has this effect—if a man has 25 weeks in insurance in the preliminary broken quarter, has paid up entirely in full, and has no arrears at all, in the second six months has bad luck and is in arrear, say, 8 or 10 weeks, in the third half-year again is fully employed and never misses a day, then for the fourth period of six months he is reduced in benefit, probably out of insurance altogether, though on the three cards he would be entitled to benefit, only slightly reduced. It seems to me that this is only to save trouble to the administrators of the various approved societies. That, to my mind, ought never to be allowed by this Committee. I am aware that the present system of calculation of arrears is going to lead to endless trouble on the part of the management of approved societies.
You are now trying to take away the trouble at the price of a greater injustice to the insured people, and I do not think you have any right to do that. My hon. Friend the Member for Salisbury, with whom I seldom disagree, said that under this scheme what will happen will be that those who ought to do so would get more, and those who ought to be penalised would get less. He thought that was some recommendation for the scheme, but to my mind it is the reverse. We are not dealing with a charity scheme. If a man has paid he ought to get the benefits, and we have no right to be generous at his expense. But the Amendment of the hon. Member for Leicester is a full Amendment dealing with the root of the whole matter. That I regard as preferable. I do not think, however, that we have enough information before us to say whether it ought to be accepted or not, and I deprecate dealing with it at the present moment. The Government ought to work out what will happen in typical cases before they ask the Committee to accept it. That, as you know, is no new problem. 3453 The Government have had a year since the passing of the original Act. They have had one year knowing that during July this Arrears Clause would come into operation, and all through that year they might have prepared a scheme for dealing with this, and have put these Clauses down. But just see what they have done. First, they prepare a Clause, and they ask the hon. Member for Leicester to put it down; then they put, in another Clause, and asked the hon. Member for Salisbury to move it.
Let us see how far they are true. Does the Financial Secretary say that this Clause put down in the name of the hon. Member for Leicester emanated from the brain of the hon. Member for Leicester?
§ Mr. MASTERMAN
The hon. Member is always accusing me of this, and I think everyone except himself knows what happens. Hon. Gentlemen come to me and say, "I want to put this down," and I place at the command of those Gentlemen the services of the Government draftsman. That is what I did in this instance.
I do not think there is any real difference. The Government has had a year in which to deal with this, and they have no right to come down at the last moment—almost the last few days—and put down Clauses of their own in the name of hon. Members of the Committee to deal with this point. I, for one, do not propose to vote at all on this Amendment. I am not going to take the responsibility of supporting this Clause, though I very much want the six-months' card, because I think that will facilitate the work of the approved societies. But I am quite sure that the Clause of the hon. Member for Salisbury is a bad one. It does not deal at all with the real problem. I much prefer that put, down by the hon. Member for Leicester. I would far rather see that supported and put into the Bill.
§ Mr. THOMAS
I hope the hon. Member will move the Clause as an Amendment. It is understood that the Clause in the name of my hon. Friend meets the situation boldly and better than the present Clause, and seeing that there is a disposition in that direction, if my hon. Friend 3454 will not move it, I will move the Clause standing in the name of the hon. Member for Leicester.
§ Question, "That the Clause be read a second time," put, and agreed to.
§ Mr. RAMSAY MACDONALD
If it is thought that my Amendment would give a better basis I would move it, but I do not want to prolong the discussion. I am quite willing, if the feeling is that in some respects my Amendment would be preferable, to deal with it accordingly.
§ Mr. G. LOCKER-LAMPSON
I have not the slightest wish to move my Clause if the Committee think that the Clause of the hon. Member for Leicester is a better one. I should have thought that it would have been a better plan that we should, incorporate this Clause now, and between now and the Report it may be that the hon. Member may be able to further improve his Clause. I should then support him in moving an Amendment to my own. Clause.
§ Mr. BOOTH
I should be very glad if there could be any agreement on this matter. I do not see anything at all conflicting between the two Amendments before the Committee, and, so far, I think it would be advisable to take them together; but the reason why the Financial Secretary to the Treasury could not see his way to support a Clause which I and my Friends have put pressure upon him to pass for a very long time was that it would be too controversial. I am very pleased to find that that is not so. Unless the Financial Secretary himself asks us, not to press the Clause in our names, I would like to go on with it.
§ Mr. MASTERMAN
May I say what is the position? In every way the Clause of the hon. Member for Leicester is preferable to that of the hon. Member for Salisbury, and I understand that the hon. Member for Salisbury tried to save something in connection with the friendly societies. Gathering that the hon. Member for Leicester's Clause would not be starred, I put down this Clause. I do not know whether the hon. Member's Clause could be substituted for the Clause of the hon. Member for Salisbury on Report, because it gives a further mitigation to the persons who, are in arrear. In that condition it is preferable in the interest of the insured persons. If the Committee will be willing without prejudice to take my hon. Friend's 3455 Clause as an Amendment to the Clause of the hon. Member for Salisbury, I think that would be a change which would be beneficial.
§ Mr. G. LOCKER-LAMPSON
I do not mind. The chief thing is that it should be a benefit to the approved societies, and if there is any risk that we should not be able to approve this Clause on Report, on account of its entailing a charge, I am perfectly prepared to accept the suggestion. I suppose the hon. Member for Leicester is quite certain that his Amendment provides for the six-monthly card?
§ Mr. MASTERMAN
The six-monthly card is merely a matter of regulation. We can give that card by regulation.
§ Mr. CHIOZZA MONEY
May I ask whether the valuable provisions of Section 10 of the principal Act are going to be continued if we pass this Clause? It seems to me that if we pass such a Clause, we are going to cancel at a stroke some of the most valuable provisions of the principal Act. What guarantee have we that, when we have passed this Clause, we shall obtain for the insured persons the equivalent of the provisions that now exist? I appeal to the Financial Secretary, reluctant as I am to extend this discussion, to give us his opinion on that point.
I said that I preferred the Amendment of the hon. Member for Leicester to the other one. But I must say that the Amendment of the hon. Member for Leicester gives the Commissioners power to do as they like with the Clauses in the original Act which are now found to be hampering the work of friendly societies. We ought to know what is going to be done, and, therefore, I ask that the whole matter be postponed.
§ Mr. CHIOZZA MONEY
I do not think that what the hon. Member said is quite just. Section 10 of the original Act may be clumsy in working, but the justice of it is something we ought to think of, and I appeal to all parties in this Committee to seriously consider what they are doing before they cancel it.
§ Mr. BOOTH
I agree with my right hon. Friend that there is no Clause which we could pass in this Bill which would be so beneficial to insured persons. There are huge difficulties in making these calculations, and some help ought to be given, and we should face that. I am sure that the insured persons will benefit if some better scheme can be provided to save calculations, to save reduction of benefits, and to regularise and make better the whole of these provisions. I hope, therefore, the Clause will be passed.
§ The CHAIRMAN
There is no Amendment before the Committee at present. I have a series of Amendments which will complete the Amendment of the Member for Salisbury (Mr. G. Locker-Lampson) and incorporate with it the Amendment of the Member for Leicester (Mr. Ramsay Macdonald), but nobody has moved it.
§ Question proposed, "That the words, 'The regulations of the Insurance Commissioners under Sub-section (7),' be left out of the proposed Amendment in order to insert instead thereof the words, 'Subject to the provisions of Sub-section (4).'"
§ Question, "That the words proposed to be left out stand part of the proposed Amendment," put, and negatived.
§ Question, "That those words be there inserted," put, and agreed to.
§ Question proposed, "That the following words be left out of the proposed Amendment: '(c) as to the calculation of the average amount of arrears, may provide that the average shall be calculated periodically with reference to complete half-years of insurance corresponding with the periods for which contribution cards are issued and disregarding incomplete half-years and may provide that the reduction postponement, or suspension of benefits consequent upon the average 3457 arrears as ascertained for the period terminating with the end of any half-year shall not come into operation until the prescribed date in the half-year next ensuing, and, subject to the provisions of Sub-section (5) of the said Section, shall continue in force until the prescribed date in the next following half-year,' in order to insert instead the words, '(c) insured persons who are in arrear shall be liable to such suspension or reduction of benefits as may be prescribed so, however, that any such reduction or suspensions of benefit shall be approximately equivalent to the value of the loss occasioned by the failure to pay the contributions in arrear, and the provisions of the principal Act regulating the suspension and reduction of benefits on account of arrears shall cease to have effect, and the regulations
|Division No. 17.]||AYES.|
|Money, Mr. Chiozza|
|Ainsworth, Mr.||Dawes, Mr.||MacVeagh, Mr.|
|Bathurst, Mr. Charles||Esmonde, Dr.||Masterman, Mr.|
|Beck, Mr.||Gwynn, Mr. Stephen||O'Grady, Mr.|
|Bentinck, Lord Henry Cavendish-||Harvey, Mr. Edmund||Rendall, Mr.|
|Booth, Mr.||Jones, Mr. Haydn||Roberts, Mr. Charles|
|Boyle, Mr. Daniel||Lawson, Mr. H.||Roberts, Mr. George|
|Bowerman, Mr.||Locker-Lampson, Mr. Godfrey||Thomas, Mr.|
|Buxton, Mr. Noel||Lynch, Mr.||Wing, Mr.|
|Carr-Gomm, Mr.||Macdonald, Mr. Ramsay|
|Craik, Sir Henry||Macnamara, Dr.|
§ Question put, "That those words be there inserted," put, and agreed to.
§ Clause, as amended, added to the Bill.