NATIONAL INSURANCE ACT (1911) AMENDMENT BILL.

HC Deb 15 July 1913 vol 55 cc1092-162

Order for Second Reading read.

Motion made, and Question proposed, "That the Bill be now read a Second Time."

Mr. H. W. FORSTER

I am rather surprised that no Member of the Front Bench opposite has arisen to explain in detail the provisions of the Bill which we are now asked to read a second time. It is quite true that the Chancellor of the Exchequer made a short preparatory speech in introducing the Bill, under the Ten-Minute Rule, a speech in which he summarised, though he did not explain, the provisions of the Bill. I am rather astonished that nobody on the Front Bench opposite has thought it worth while to get up and carry the matter a little further on the present occasion. I can only suppose that the Government realise the complete unanimity which exists throughout the country as to the necessity for making alterations in the present law, and that they feel assured that they have only to produce any Amending Bill to make certain of its receiving a Second Reading. There is no doubt about the completeness of the unanimity. The Government may search the country from one end to the other without being able to find a single individual who is satisfied with the present condition of affairs. [HON. MEMBERS: "Oh !"] I think it is not altogether without significance that we are asked to read this Amending Bill for a second time upon the-first anniversary of "Joy-day." [An HON. MEMBER: "And it is St. Swithin's Day."] I do not know whether festivities, bonfires, and silver cups are as much in evidence this year as they were last. It would be a strange development of our proceedings if the anniversary of Joy-day witnessed year after year—as well may be the case—Amending Bills brought in to make further rearrangements. I should have been very glad to hear from the Government some explanation, some reasons given for the particular amending proposals they have selected to deal with, and why it is they have selected these particular points only, while they undoubtedly have left untouched a great many of the larger questions which must have forced themselves upon their notice as well as they have upon the notice of a great many other people. The Chancellor of the Exchequer told us that the Bill was prepared after consultation with representatives of the friendly societies. That was a rather unfortunate phrase, which has given rise to a good deal of misunderstanding and dissatisfaction. It seems to me that the consultation consisted of an interview with a certain number of specially invited gentlemen, followed by an almost complete disregard of any of the proposals they suggested.

4.0 P.M.

I think the Government will be disappointed, to say the least of it, if they expect any widespread satisfaction with the sparse and meagre proposals which their Bill contains. Some no doubt are useful, some no doubt will remedy defects which only have recently been discovered by them, but which we pointed out two years ago. Such, for instance, is the hard case of the people over sixty-five years of age at the time the Act came into operation. I remember my right hon. Friend the Member for East Worcestershire, following the Chancellor of the Exchequer immediately on his introduction of the Bill, and calling attention to this peculiar hardship, and to the gap between the age of sixty-five and seventy. The Chancellor of the Exchequer then took exactly the contrary course to that which he is taking now. The right hon. Gentleman then said it was quite impossible that this could be remedied. To-day he says it can be done and must be done. I congratulate him on his conversion, even if it does come a little late in the day. There is the Clause dealing with the position of the casual labourer; his is a position of extraordinary hardship which cannot be justified under any compulsory scheme and which would never have found a place in any other. The casual labourer is in the position of a man called upon to pay the full contribution, sometimes unhappily even more than his own full contribution for a full week even although he is unable to secure more than a few hours' work. I remember when the Act was going through this House we made a strong effort to secure that the contribution the casual labourer should pay should bear some proportion to the amount of work he is able to secure. The Chancellor of the Exchequer would have nothing to do with us then, but I am very glad to think he has adopted in this measure the proposals we then made. Apparently the hon. Member for Pontefract denies that suggestion. I should like to know does he deny it?

Mr. BOOTH

I certainly deny that the present Bill is founded in any way upon suggestions made by the Opposition.

Mr. FORSTER

Perhaps the hon. Gentleman speaks with authority on that point, but he cannot deny that the Bill is founded upon our suggestions as long as it carries them out. Then there is the question of the payment of arrears, and I am very glad the Government has realised the anomaly of calling upon a man out of work to pay almost double the amount of contribution he has to pay when in employment, if he is to retain his benefits. I am very glad to notice that suggestions which we made, I think when the Bill was in Committee, in that direction have been adopted by the right hon. Gentleman, and I think the Bill is an improvement in that direction. I notice there are other proposals in the Bill, among them one of which is full of interest—that is the proposal by which people who are over fifty should obtain in future full benefit, instead of the reduced benefit they now receive in accordance with their age. I can only suppose this proposal is intended to bring the operations of the Bill into closer harmony with the rather picturesque description given of many of its provisions by the right hon. Gentleman before these provisions took final shape. Two years ago we were told it was quite impossible to give additional benefits to people of that age without doing almost irretrievable damage to the basis on which the Bill rested. We were also told it was doubly unfair to the younger members of the community that they should carry so large a portion of the burden of the older people. Now I observe that the Chancellor of the Exchequer has proceeded to do exactly the thing he stated he could not do two years ago. I do not know whether the friendly societies have urged this proposal upon him, but I dare say the right hon. Gentleman, who will follow, will be able to tell us whence the desire springs and how the Government justify it. I should like to know why it is that the Government have changed their mind so abruptly on this point.

There is one other Clause in the Bill to which I should like to refer and that is the proposal to confer for a further twelve months power upon the Insurance Commissioners to vary and alter the provisions of the Act. The House will remember that Section 78, I think, of the Act gives this power for the purpose of bringing the Act into operation. I thought the Act was in operation now. At any rate, the Commissioners, if I recollect aright, have got a further six months to the end of the present year to exercise this power, and I think the House ought to be very jealous of giving to any Government in an Act of Parliament powers to alter provisions and conditions that Parliament has enacted, and we shall want to know very clearly why it is necessary before that Clause of the present Bill is passed and also what steps the Commissioners propose to take. While the Bill contains useful provisions dealing with comparatively minor matters it touches only the fringe of the problem as a whole, and the questions which the Government have left untouched, affecting as they do the whole appointment of the insurance committees, seem to me infinitely more important than these minor matters with which they concern themselves.

I have been reading with intense interest the Report issued by the Commissioners as to the result of the first year's working of the Act and if I deal with only two remaining matters before I sit down it is because the Report of the Commission suggests to me matters of extraordinary gravity which I shall lay before the House. Therefore, I do not touch upon other questions, such as insured women, maternity benefits, questions relating to sickness, intermittent employment, and so forth. I want to deal with the larger point, and, if I can, very seriously to put it before the Government in the hope that they may be able to give us some explanation on the subject. First, I want to refer to some of the provisions for medical benefit. I am not going to argue this in any controversial spirit, but I do want to bring before the Government the reason for extending the scheme of medical benefit as it was intended to be extended in the Act as it originally stood. There is no doubt the Act originally contemplated a provision of medical attendance, broadly and generally speaking, upon the panel system; there is no doubt about it. The Chancellor of the Exchequer used to tell us periodically that the doctors were coming in to work the Act, and we all hoped and expected that it was so. The whole House expected the provision of medical benefit in the main would be carried out under the panel system. The Chancellor of the Exchequer, the House will remember, said we want something more. The House intended, the Chancellor of the Exchequer intended, that people not satisfied with panel doctors and doctors not satisfied with the panel system should each be able to obtain—the doctor employment among patients and the patients a doctor, without having recourse to contracting out. The Bill contained a provision of that kind. The Commissioners themselves before last year contemplated it should be done and they issued a pink ticket to people who wished to do so, not satisfied with the panel doctors, to make their own arrangements. It was only when the controversy with the medical profession reached an acute crisis that the Government placed upon the wording of the Act an interpretation which I believe to be entirely foreign to the meaning of the Act when it left the House of Commons. There is no doubt the Report of the Commission proves, and our own experience proves, that now you have got a panel system, broadly and generally speaking, working throughout the country. It may be working satisfactorily in some places, but why do you not go further and extend the provision of medical benefit in the direction we contemplated two years ago, that is to say, allowing people to make their own arrangements outside the panel system.

It is quite useless for the Government to say that there is not a strong desire on the part of many people to make their own arrangements. It is not a question of doctors trying to break down the Act or of some people in the State entering into an alliance with the doctors to break down the Act. There is a very strong and genuine desire on the part of many persons to go outside the panel system. Take the Scottish Clerks' Society. Their case is well known to the Government. I say, in my judgment, the Scottish Clerks' Society have a distinct grievance against the Chancellor of the Exchequer and the Government for the treatment they receive. Here you have a body of men who propose, and are willing, to put their hands in their pockets and pay increased contributions in order that they may be able to avoid going to panel doctors, and employing their own. When you find people willing to pay a voluntary levy of that kind to secure doctors of their own choice, why on earth cannot you let them do so. The Government, as I say, has placed a strict and narrow interpretation upon the wording of the Act, and it is in consequence of that strict interpretation that medical benefit has been so closely confined to contract practice as it is. I hope it is not even now too late to put the right interpretation upon the wording of the Act, and put into this Act a provision which will restore freedom to the committees, with the consent of the Commissioners, free from any kind of compulsion on the part of the Government to allow those people to make their own arrangements according to their own free choice. I referred a moment ago to the Report which has just been issued—that astonishing volume—which shows very clearly the gigantic task which the Commissioners have had to carry out. I think no one in the country will for a moment deny the extraordinary ability, the extraordinary courage, the extraordinary determination shown by the Commissioners to overcome every obstacle. No one can deny the courage and ability with which they have fulfilled their task. They have faced their difficulty by issuing memoranda and regulations, but I wish to dwell rather upon the hardships and shortcomings which are found in the Act by the general body of insured people. After reading the Report I am even more surprised at the scanty proposals of the Government's Amending Bill. The Report deals with the great value of the services rendered to the Commissioners by the voluntary organisations of great friendly societies, and they say what a splendid thing it is we had these great voluntary organisations to be able to take advantage of it for the purpose of bringing the compulsory scheme into operation. I should have thought the Government would have been prepared to carry their expression of gratitude further than a mere verbal expression of this kind. They might have made some provision at any rate for the heavy cost of administration which the present allowance is quite inadequate to meet They might have gone so far as to give to the approved societies that four shillings per member which they were led to expect for administration expenses, instead of the 3s. 5d. which they actually received. There are further passages in this Report which really fill me with alarm. We are told that a number of the societies are overspent. The passage to which I refer is as follows:— It has, however, been necessary in a number of eases to remind societies that the National Health Insurance Fund consists only of the aggregate credits of all societies, and that the amount which each may draw is limited to the sum standing to its credit. That sounds very much like a variation of a familiar theme, but it is something very much more serious in the case of approved societies. The consequences may be disastrous, not only to the societies themselves, but to their members, especially when we remember that the overdraft today is accompanied by an increase, and an unforeseen increase, in the liabilities which lie before the societies in the future. I do not think this question of the further unexpected liabilities is touched upon directly in the Commissioners' Report. This point struck me first when I came to the passage relating to the small number of Post Office contributors. I cannot help being rather amused at the phraseology of the passage which describes the fierce competition between, society and society to get new members under the Act. This is what the Report says:— The result of the endeavours of approved societies of very kind to secure for insured persons the full advantages of State insurance, is that leas than four in every hundred insured persons are deposit contributors. That is most satisfactory. We are all agreed upon that, and there is no division of opinion amongst us, but the position of the deposit contributor is deplorable. Let us examine what this means. Hon. Members will remember that when the Insurance Act was going through the House, we were all very much concerned with the deposit contributor part, and we all looked forward to a large number of deposit contributors who were expected to come into existence under the Act, being principally men of poor health and uninsurable propositions. On this point I could refer to speeches made by the Chancellor of the Exchequer. The hon. Member for Pontefract (Mr. Booth) may have foreseen the actual result of the operation of the Act, and he may have foreseen that the fierceness of competition between the societies would practically compel them to abandon their medical examination. That is what has happened in the great majority of cases, and the necessary consequence is that you have brought into membership of approved societies not the picked and selected lives only, but you have accepted members practically without any examination at all. I think that offers food for very grave reflection, because the whole financial foundation upon which the Insurance Act rests depends upon actuarial calculations derived from the experience of picked lives in nearly every case which had undergone stringent medical examination. Therefore, the figures upon which the calculations have been based are not appropriate to the number of lives which are insured at the present time.

We read a good deal about malingering and its effects in the country under the operation of this Act. We also read a great deal about excessive sickness claims, and something about them being due principally and primarily to malingering. I am forced to believe, after doing all I can to inform myself on this matter, that there is something more than malingering. Although no doubt malingering may play some part, I think the excessive sickness claims arise from the fact that you have admitted into the ranks of the societies a large number of weak lives and bad risks. We read of sickness claims increasing by ten, twenty, thirty, forty, fifty, and even up to seventy per cent. What is going to be the result of that? This is a point which strikes me as being most grave. I said a moment ago that the whole fabric of the present scheme of benefits rests upon actuarial calculations derived from the experience of picked lives under a voluntary system of insurance, where a considerable portion of the members took pride in never coming on to the funds of the society at all. An unexpected development such as that to which I have referred threatens to upset the calculations on which the present system is based, and, in fact, threatens the stability of the whole structure. I leave on one side the errors in estimating the amount which it would cost to the State. I merely mention that the original estimate of £4,000,000 has already increased to £7,000,000. You cannot leave out of account the enormously increased liabilities which have been thrown upon the societies owing to the causes to which I have referred. I may be told that these societies must take care of themselves, that you will have a valuation, and if it shows that the management is at fault, the societies will have to attend to that matter for themselves, and make good the insufficiency or else the members will have to take decreased benefits. It is not a question of the society, but a question of the members of the society. You do not compel any society to come into the Insurance scheme, but they have a dismal prospect if they do not do so, and you do compel the members to come into the scheme, and, therefore, it is the business of the Government and the House of Commons to see that everything possible shall and must be done to secure those people the full benefit of the contributions which you compel them to pay.

I shall be told by partisans opposite that I am taking a very gloomy view of the situation. They will, no doubt, tell me that if we will only wait two or three years for the valuation we shall find that all our gloomy forebodings will be dispelled. But we cannot afford to wait two or three years. This problem is pressing now, and if I am any judge in the matter, it will continue to press in the future with increasing severity. You cannot afford to wait two or three years, and if you do you will find the state of things so unsatisfactory that your scheme will bring ruin to the friendly societies themselves. I grant that none of us foresaw this result just as none of us could foresee that the prophecies about the released reserves were going to be unfulfilled. There is another passage in the Report which says, under the actuarial calculations of the scheme, it was anticipated that something like £22,000,000 of the societies' funds would be released from liability in consequence of the operation of this financial scheme. The actual experience is that the old friendly societies were so wedded to their own insurance that their members paid contributions under the compulsory scheme in addition, and not in substitution of their payments under this Act. That, again, is a most satisfactory thing from every point of view. I remember the Chancellor of the Exchequer coming down to this House when he introduced the National Insurance Bill, and he told us that one of the reasons which made its speedy introduction vital was that so many societies were threatened with insolvency, and that one of the things to restore solvency to them was the release of a large proportion of their funds. The working of the Act has not resulted as we all expected, and no one foresaw that so large a proportion of the members would take compulsory insurance in addition to their voluntary insurance. That is a problem which requires the most careful attention on the part of the Government. The Chancellor will say, "Yes, that is all very well, but why do you not attend to this matter?" The Chancellor of the Exchequer has been at the helm during the eighteen months the National Insurance Act has been in operation, and he must have had his attention drawn through the Commission to these problems upon which I have touched, and I wish he had dealt with some of them, at any rate. Frankly speaking, I am profoundly disappointed that the Government have shown no disposition to grapple firmly and at once with these larger difficulties, which they must face and which they cannot neglect for very much longer.

The FINANCIAL SECRETARY to the TREASURY (Mr. Masterman)

The hon. Gentleman began with a rather unexpected note of controversy, concerning which I certainly have no intention of following him. He stated that he was surprised that no man had got up from this bench to further explain the Insurance Act Amendment Bill. The Bill was introduced under the Ten-Minute Rule, and was unopposed; it has been widely circulated in the country; a memorandum is in the hands of every Member explaining its provisions, and a further actuarial memorandum is in the hands of every Member explaining its financial details, and from no Member of this House nor in any communication from outside have I heard any kind of objection to any one of its provisions. I have had a communication from the Secretary of the National Conference of Friendly Societies thanking us for certain things we are doing in the Bill, and have had other letters from representatives of approved societies and from individual members concerned with insurance matters also thanking us for certain things we are doing by this Bill. Really, the hon. Gentleman opposite himself never suggested that any Clauses in this Bill were such he would be inclined to oppose. All his criticisms were directed to very serious problems outside this Insurance Act Amendment Bill. Anyhow, any feeling I should have had to indulge in any controversy has been completely disarmed by the very generous tribute which he paid to the National Insurance Commissioners and their staff, for which I thank him. When I realise, as I have realised, for one and a half years, and, as I think, the House has realised since the Report has been published, the way these gentlemen have worked, and when I remember how they were attacked in the first six or eight months of their existence, I rejoice that the hon. Gentleman, speaking from the Front Opposition Bench, has given them a tribute, which I believe they deserve, for a national work.

Let me deal for a moment, if I may, with the criticisms which the hon. Gentleman made for what was not in the Bill. There were two important points. One was the question of medical benefit, and the other was the question of the approved societies, especially in connection with the problem of excessive sickness. First, as to the extension of medical benefit: I listened to him very carefully, but I could not understand what it was that he desired inserted in the Act, but, of course, any Amendment put down by him will have most serious consideration from us. He seemed, as far as I could understand, to be acting under a sense that the Insurance Commissioners were now preventing insurance committees from doing that which they have a right to do—that is, to arrange for medical benefit for all the insured persons for whom they are responsible under conditions they think satisfactory for all the insured persons. We have got the panel system established. It was passed by this House by an overwhelming majority, and the statutory duty of insurance committees is to ensure that medical attendance is given to all insured persons under the Act. There is only one reason, so far as I know, why exception has been taken to what the hon. Gentleman calls "contracting out." The insurance committee must ensure that all persons, and not simply some selected lives, are treated in the area over which they have control, and in every case where contracting has been demanded the doctors who wish to have patients contracted out have desired to choose selected lives and not to take the average of good, bad, and indifferent, whilst at the same time obtaining the same remuneration, per life, as the doctor who does not contract out. The hon. Gentleman is a perfectly fair-minded man, and he must realise the difficulty of an insurance committee in the matter. If the committee allows, say, five doctors among ten to choose all the good lives and leave the other five to have the indifferent and bad lives, and allows the money to be equally divided between the two, it is obviously and scandalously unfair on those who have to take all the bad lives. That is the sole reason, as far as I understand, why insurance committees are limiting the conditions of contracting out.

Mr. FORSTER

The right hon. Gentleman does not grasp my point at all. I am not looking at the thing from the doctor's point of view, but from the point of view of the insured person. If an insured person says, "I want that doctor over there," then I say the Act gives him the right to have that doctor, and you have no business to prevent him having him.

Mr. MASTERMAN

If insured person A by saying, "I want that doctor over there," prevents insured person B from getting any doctor—that is what it means—then he has no such right. That alone is the problem before the insurance committees. May I point out one other thing in connection with this matter. The British Medical Association have made a considerable agitation for the exercise of Section 15 (3)—that is what we call contracting out—but they are very doubtful now whether they would not get less rather than more advantage out of it. If contracting out is to be done, it cannot be limited to doctors who want to be on the panel. There are many systems, especially in South Wales and elsewhere, whereby the miners arrange for doctors who take the man, his wife and children for a certain fee, and there is a very great demand for an extension of that system It is thoroughly welcome to the miners, and to insured persons, but the free doctors who are anxious to promote contracting out where this system does not exist, are anxious to stop contracting out where it does exist. If the hon. Gentleman will examine the pages of the British Medical Journal for the last few weeks, he will see that they are in a hopeless dilemma as to what they want, whether contracting out or not. Surely, the sensible thing to do is this: Let every doctor come on to the panel, and let doctors come on to the panel, if they like, for limited attendance, say, to twenty persons, so long as they do not gather their cloaks around them and say, "we will have nothing to do with this thing," and so long as the doctors are not divided into two classes, panel and non-panel. I know that every insurance committee has been anxious to welcome doctors on to the panel even for a limited number of eases in order that the medical profession now so divided should be joined up again to work the Act.

I would strongly submit to hon. Gentlemen opposite that their attitude has a very considerable influence in connection with this particular point, and that they should endeavour with us to try and get the free choice of doctor, for which they voted, established as the universal system, with every doctor on the panel, and no doctors fighting the panel system in this country. Surely that, without any legislation at all, could be done if they would join their influence with ours in endeavouring to persuade the doctors. In any case, I know of no Amendment to the Act which would meet the point. More and more doctors are coming on to the panel, and I think that only a little effort is required to make for a lasting peace, but it ought to be an effort made by both sides. Let me come to a point which the hon. Gentleman said was of considerable interest and seriousness. It is not a point we could have met by legislation in this Bill. We have heard a good deal outside in recent newspaper correspondence of the point which the hon. Gentleman put with great force and gravity. It is the question whether excessive sickness claims are going to so develop as to break down the financial arrangements of the Act. It is grotesque to imagine that in six months working of an Act of this sort any reliable statistics can be obtained. The Act has brought in perhaps five million persons who were insured before, and perhaps seven million persons who had never really been insured at all. It has been working six months, and at the end of those six months we hear certain statements referring especially to certain districts and to certain approved societies that the sickness benefit of their own members—not the new members who have come in—has gone up in comparison with last year.

If the hon. Gentleman will look at the Report, he will find some rather remarkable figures in connection with this question. We asked for special figures on the first quarter from seven or eight societies as to their sickness experience, and we found that so far from their being any balance against the societies for excessive sickness, the sickness experience had not come up to the amount allowed for in the actuarial calculations. There were some of the largest societies. I do not want to mention their names, because I do not wish to seem to give a preference to some over others. They include societies of all types, trade unions, industrial societies, and large friendly societies. With no allowance for it being the worst three months in the year, from January to April, the actuarial allowance was £470,000, and, with allowance for the season, it was £567,000. That was the allowance in the actuarial calculations, and the actual money paid out was £400,000. That was not only very much less than, the allowance made for the season between January and April, but very much less than the allowance made for even a normal season. I think that fact ought to be before the House before they accuse us of being indifferent to rather vague statements of excessive sickness. On the other hand, as the hon. Gentleman rightly suggests, it would be very foolish on our part, and very much against our duty, if we did not consider very seriously whether, and in what degree if at all, excessive sickness did exist, and how far that was genuine sickness, and how far it might be due to what is ordinarily called malingering.

On that point, I have just three considerations to represent to the hon. Gentleman and to the House. I think that it has been established—I do not quite know the reason why it is so—that there has been an excessive sickness above the normal during the past few months, and especially in the second quarter. The result has been that in some cases the line of sickness, which generally rapidly drops from April until about October, has not boon dropping as was expected. Secondly, there is undoubtedly, as attested by evidence, a number of persons drawing sick pay who have no right under the Act to do so. Curiously enough that specially refers to Lancashire. A very large number of complaints have been received from societies with branches in Lancashire, and it must have some connection with the fact that Lancashire has never had experience of the contract system. Lancashire doctors have been working under a different system to that which obtains in the rest of the country. I can only hope, so far as the sickness excess depends on doctors carelessly giving certificates, or in some cases giving them deliberately because they are opposed to the Act, that the great influence of the medical profession, as a whole, will be exercised to prevent that kind of thing going on, for if there is one thing more than another which would bring the whole medical profession into disrepute it would be the find ing out by the leaders of friendly societies, in testing these certificates, that they were given unfairly.

Sir HENRY CRAIK

Have you any ground for saying that?

Mr. MASTERMAN

I do not speak without grounds.

Sir HENRY CRAIK

Bring them forward.

Mr. MASTERMAN

If the hon. Member will consult the leaders of some friendly societies with whom I have been in consultation, I think he will find he would have grounds for saying this and even more. If he will consult the committee the doctors, themselves have set up in Manchester, a committee of doctors and insured persons, equally represented, to prevent this sort of thing going on, I shall be very glad to hear what they say. I do not think they will challenge me across the floor of this; House.

Mr. RUPERT GWYNNE

Why does not the right hon. Gentleman provide for that in the Bill? Why not introduce some provision to put a stop to it?

Mr. MASTERMAN

Before I finish I may perhaps announce something which will have the effect of stopping it. But I would much rather see it stopped by general agreement among fair-minded men. The third point raised by the hon. Member opposite was with reference to Clause 72. In that Clause we gave what everyone in this House wanted us to give, a free choice to every member of a friendly society either to insure with the State, in addition to his friendly society, or to combine the State insurance and the friendly society insurance, paying less but receiving the combined benefits. If the friendly societies had accepted that second suggestion and had interwoven their system, then every statement which we made at the time the Bill was being passed would have been realised.

Mr. HUNT

Ninepence for 4d.

Mr. MASTERMAN

I think it is now about 11d. for 4d. The £13,000,000 of reserve would have been set free, additional benefits would have been given, and these enormous deficits which exist at the present time in the friendly societies might have been swept away altogether. We accepted the principle of self-government, but the result has been harmful in this direction from two points of view. It has been harmful because they have not cleared these deficits and because they are now in the position that a very large number of their members can get more when they are ill than when they are well. Whatever we may say about human nature, everyone knows that that means continual pressure on the sick fund. It also means that a large number of people in the present condition of good trade are paying more than they will be able to afford to pay, when bad trade comes along, in the way of combined contributions—the friendly society contribution and the State contribution. All I can say here is I do not think that any Clause in the Bill could meet this difficulty. But I do think, and I am trying to state it as publicly as possible, that the friendly societies themselves should take this matter into consideration. They ought to revise their schemes under Clause 73; they ought to be content with less contribution from their members, instead of a double benefit, and then they would not only be able to wipe out their deficit, but they ought to be in a position to provide additional benefits for their members.

As to the whole question, I agree with the hon. Gentleman opposite, it is worthy serious consideration. As he fairly says, these considerations have arisen in the operation of the Bill, and no man could have foreseen them. It is because such considerations must arise from time to time that Amending Bills must be introduced, even on the happy anniversary of the 15th July. I think we had better appoint a Committee to go into this subject—a Committee of representatives of approved societies, representatives of the doctors, and perhaps one or two other members. Let them fruitfully spend their time in the coming autumn and winter in examining exactly into these charges—charges of malingering, and charges against the doctors. It is very desirable, if they are without foundations, such charges should be got rid of. The Committee might also inquire relative to the case of the man who is only earning 15s. per week but is insured for 20s. a week, and gets that increase in sick pay. I think also the alleged increase of benefit in the case of women might be inquired into. If the Committee went into the whole subject, although I do not think it would be possible to embody much on the result of their inquiry in legislation, at any rate their Report would enable us to put right anything which may be wrong in these particular matters, and the remedy could be applied in a very short time. I am not sure whether the hon. Gentleman was disappointed, but he seemed to think it was a subject for criticism that so many bad lives had gone into the friendly societies, instead of being deposit contributors.

Mr. FORSTER

I merely stated the fact. From the point of view of the individual no doubt it was satisfactory, but it was of doubtful utility to the society.

Mr. MASTERMAN

I am not so sure about that. I know the hon. Gentleman below the Gangway (Mr. Worthington-Evans) propounded during the Debates on the Bill a very interesting scheme with a view of producing this very result—of trying to get an equal distribution of bad lives between the different friendly societies—an equal liability by friendly societies for bad lives.

Mr. WORTHINGTON-EVANS

I should not be in order in discussing that point in replying to the right hon. Gentleman, but it appears to me he has not the slightest recollection in the world of what the actual scheme was. It had nothing whatever to do with distributing deposit contributors over the friendly societies.

Mr. MASTERMAN

I know it was somewhat difficult to understand, but fundamentally it was that the liability for bad lives should be distributed among all the insurance societies, and that is exactly what has happened. I have had an analysis drawn out which it may be interesting to have published as a Parliamentary Paper. We have taken two sample districts of deposit contributors, and the results do not in the least degree resemble the prophesies so freely made from the other side during those Debates. It was suggested, I believe, that there would be 3,000,000 of these deposit contributors, and I wish to explain how different things are in the matter of this class from what they were expected to be. There were, we were told, 3,000,000 bad lives excluded from the ordinary advantages of insurance. These 3,000,000 persons had a very keen desire to be insured, and their position formed the subject of controversy on every insurance platform. That is a matter of fact. But I have analysed them in two characteristic towns, and I find the overwhelming majority of them are lives which in every respect are as good as the lives of the ordinary friendly societies' member, and that the last thing that makes a man become a deposit contributor is the fact that he is ill or is a bad life. Large numbers of them were ignorant of the Act altogether. Some have become deposit contributors for political reasons.

Mr. WORTHINGTON-EVANS

Were they followers of the right hon. Gentleman?

Mr. MASTERMAN

Many of them became deposit contributors because they thought their money was safer in the Post Office than in a friendly society. Some became deposit contributors because they did not want to have anything to do with friendly societies. The result of our inspectors going around among the deposit contributors has been that more than half of them have become members of approved societies, and were freely taken by those societies. Two of the largest insurance societies in the country—a friendly society and an industrial society—have expressed their desire to take the deposit contributors over en bloc and think they can make a profit out of them. What, then, becomes of the 3,000,000 living in degradation and despair, as they were pictured from time to time?

5.0 P.M

The hon. Gentleman opposite challenged us with not sanctioning an increase of 7d. per member for administration expenses under the Act. Surely, even if that expense had to be sanctioned, it is far too early in the history of the Bill for us to declare that the money is necessary ! The work of organisation, the vast work of administration of one of the most amazing constructions the world has ever seen has been thrown on the friendly societies from the beginning, and the idea that these administrative expenses will continue, and that we shall therefore have to grant £480,000 annually from the National Exchequer does not hold good, because, I think the vast bulk of the difficulty has been overcome. Therefore this House should look seriously at any such proposal before it agrees to it. The very purpose of this Act has been to make administration easy. Some Clauses are only justified in order that the administration may be easy, and they were proposed by the friendly societies themselves. If hon. Gentlemen opposite can make any suggestion which would render the administration easier and consequently cheaper, I can assure them we shall be only too glad to accept them so far as we possibly can. But for us to go out of our way and vote a sum approaching half a million a year permanently towards administration, either out of the Insurance Fund or out of State funds, after an experience of only six months working of the Act, is surely a suggestion no Government can entertain. I would like to say one word as to the actual Amendment that has been made. The hon. Members opposite may say, if they please, that we have accepted their formulae. Now I do not care who gets the credit of any Amendment, so long as the Act benefits. The hon. Gentleman knows, as well as we do, that whilst the Act was under review, every conceivable extension was being thrust upon us from the other side without any regard to money at all, and if my right hon. Friend resisted these continual attempts, which would have resulted in bringing down the benefits further and further, surely he should now receive some credit, if after looking at the administration of the Act for six months he can see his way to giving certain persons some extra benefits, which he could not undertake to give at that time. The hon. Gentleman has quite rightly brought up the point which was put forward by the right hon. Gentleman the Member for East Worcestershire (Mr. Austen Chamberlain). He was almost the only hon. Gentleman opposite who, when the Act was being passed, did anything to restrain the continual demand for millions and millions to be added to the national insurance expenses, therefore it is with all the greater delight that we realise we are able in this matter to fulfil his desire, opposing as he did most of those tremendous demands, to make the lot of the old people under this Act more comfortable than it was before. Take one of the most important questions in this Bill, the giving to uninsured friendly society members who are over sixty-five years of age or disabled—there are, I think, some 220,000 of them—2s. 6d. a year towards medical benefit. It will enable them to get medical benefit under Section 15, Sub-section (1) (e) of the original Act. That arises out of something that happened subsequently to the passing of the Act, and it arises logically from the giving of the extra 2s. 6d. to the insured. I could never see, and I told the House so again and again in answer to questions, why the fact that the doctors received very much more for their insured patients, should make them drop their uninsured patients. I saw no logical meaning in it. After trying for many months to induce them to accept that point of view we have been unable to do so. We have taken the power of collective bargaining away from the friendly societies, so that they cannot introduce it. Surely the whole House must agree in regard to these stragglers in the battle between the two conflicting forces, that the Government of the country cannot hold them in that position, but must ensure for them also the medical benefit for which they have subscribed ten, twenty, or forty years. For that, I am glad to say, we have received the thanks of the friendly societies. Take another point, the question of casual labour. It is not correct for the hon. Gentleman to say that the casual labour Clause, as we bring it up, was in any way proposed by hon. Gentlemen opposite.

Mr. HUNT

May I point out to the right hon. Gentleman that I have moved an Amendment myself for the very purpose aimed at by Clause 7.

Mr. MASTERMAN

With all respect to the hon. Member, he does not quite understand what is in the Clause. Clause 7 is not only required to allow people to pay by the day instead of by the week, as the hon. Gentleman thinks. That is what was discussed. Clause 7 allows that under certain conditions, as, for instance, in the ease of an ordinary gardener working for different people on six days of the week, with probably a daily card stamped for each of the people for whom he is regularly working. But Clause 7 goes far beyond that; it tries to introduce into districts which have hitherto refused to introduce them some of the schemes for dealing with casual labour which were outlined in Part I. of the Report—schemes which will ensure that the casual labourer shall not pay more than his own share, and shall never be under the temptation to pay his employer's share; schemes which ensure that by arrangements with good employers the full fruits of insurance shall be paid. These schemes will be submitted by way of Special Order. They may be challenged, and, if challenged, will be submitted to some impartial person, and, if he approves of it, it will come into law. It is to provide such schemes as that for the London Docks that Clause 7 is introduced as a result of the experience of schemes which have already been adopted at Cardiff, Liverpool, Manchester, and other places by voluntary effort between employers and employed. I can only express again my hope that hon. Gentlemen opposite will do their best to help us to improve this Bill. Again and again in my position, especially in connection with administration, I have appealed to them to help us in the work of administration, just as my right hon. Friend appealed to them before in regard to the work of legislation. This great, gigantic scheme of social amelioration ought to be above party politics. Our sole desire for two years has been to keep it above party. [HON. MEMBERS: "Oh, oh !" and "What about by-elections?"] I do not want to say anything about by-elections now, but to appeal to Members of this House, who will be in Committee on the Bill next week. I say that we will do our best to meet any proposals they may make to improve the Bill, apart from party. I want them to help us by making proposals to improve it. If that is done, I believe we may pass a Bill which will not only give great relief and satisfaction to millions of insured persons at present, but also a Bill which will be found better than the particular items which the Commissioners and the Government were able to introduce. I am certain if the hon. Gentleman will only maintain the very friendly spirit of the criticisms he made in the latter part of his speech, this House may be well satisfied with an Amending Insurance Bill this Session.

Mr. WORTHINGTON-EVANS

Surely this is a most extraordinary Second Reading Debate upon an Amending Bill ! The right hon. Gentleman, in the last ten minutes of his speech, said he would say one or two words about the contents of the Amending Bill. He complained of my hon. Friend the Member for Sevenoaks (Mr. Forster) when he pointed out that no one from the Government Bench had considered it worth while to get up to move the Second Reading of the Bill. He pointed out that there had been an actuary's report, and that there had been a memorandum issued in regard to the Bill. Official documents are issued very often, but I have never heard that on the Second Reading of a Bill they rendered unnecessary an explanation of what the Bill really was. I propose, in the first instance, to confine my attention to the Amendments proposed in the Bill, and then, incidentally, to refer to some of the remarks the right hon. Gentleman has made in the course of his somewhat discursive speech. With regard to the Amending Bill itself, I would ask the House to pay special attention to Clause 1, which is a really extraordinary Clause. It alters the whole financial basis of the National Insurance Act, and, in effect, repeals Section 3 of the Act, which is the basis of the contributory scheme. It throws away all the safeguards upon which the Chancellor of the Exchequer prided himself, namely, that the State only contributed two-ninths of the benefits, while the insured persons and their employers contributed seven-ninths. This Clause provides that by an Estimate followed by the Appropriation Bill this House may, at any future time, without any further dealing with the Insurance Act itself, vote any sums of money it chooses towards national insurance, and that then and thereafter the seven-ninths and the two-ninths shall only apply to the balance. It would be possible for the Government, in making a final bid for lost popularity, to make this scheme entirely non-contributory without ever coming to the House again, simply by means of a Supplementary Estimate and an Appropriation Bill. In considering this Amending Bill we ought to bear in mind what the cost of the various Amendments will be, and then consider whether that money can be used in any better manner, in any of the directions suggested by my hon. Friend or by accepting some of the Amendments which are proposed by the representatives of the approved societies.

Besides the £1,850,000 that is already the subject of the Supplementary Estimate which is legalised by this Bill, the gross cost of the Amendments in this Bill is £1,010,000, from which must be deducted savings which are due to some benefits under this Bill being substituted for benefits which were given under the original Act. Those savings amount to £185,000 a year, which leaves a net cost of £825,000 a year. Of that sum £227,000 is provided by the taxpayers, £100,000 is taken from the Sinking Fund, and £498,000 is derived from an increase in the reserve values and the consequent postponement of their redemption. Some sums at present unknown—the Secretary to the Treasury has not told the House to-day, and he refused to tell me in answer to questions the other day, what they were— are coming out of the approved societies themselves.

Mr. MASTERMAN

No

Mr. WORTHINGTON-EVANS

The right hon. Gentleman says "No." At least he is consistent in his denial, but I still venture to assert that some sums do come out of the funds of the approved societies, for instance, the margin which they at present enjoy in connection with the three weeks' average contributions, and also the fifty contributions which are taken away by Clause 6. The Amendments in this Bill are going to cost £825,000, found in one way or another, besides what may come from the approved societies. What the House has to consider is shortly this: That we have £825,000 to deal with, and are the Government dealing with that money in the best way in the interests of national insurance? For that purpose I propose to consider very briefly what the Amendments are. I must say that upon some of them I congratulate the Government. I am glad to be able to congratulate the Government on anything they do, more especially in connection with national insurance.

The Secretary to the Treasury is not quite fair to my hon. Friend the Member for Ludlow (Mr. Hunt), because undoubtedly he is the author, whatever the Government may think, of the casual labour Amendment. [An HON. MEMBER: "No."] If any hon. Member wishes to look the matter up he will find that on the 10th July, 1911, the germ of this proposal was contained in an Amendment moved by the hon. Member for Ludlow. The Government then refused it as imposible. We can also claim, equally truly, that the provisions with regard to exempted persons were suggested from this side of the House. Indeed, the Chancellor of the Exchequer gave me a definite undertaking across the floor of the House just two years ago that he would carry to the credit of the exempted persons the employers' contributions and see that they got a direct benefit out of those contributions. He did not carry out his undertaking, for the right hon. Gentleman in April of this year, was obliged to inform me that although there were over 100,000 of these exempted persons nothing had been done and no scheme had been prepared to bring to their credit the benefit of the contributions made by the employers. Now this Bill proposes to do it. It is better late than never and I am glad that it is now proposed, although I observe that the Bill only proposes to give to these exempted persons benefits which will cost 5s. 9d. a year, whereas the Blue Book issued by the Insurance Commissioners shows the average contribution made by exempted persons is 11s. 4d. a year.

Mr. BOOTH

Not made by, but paid on their behalf.

Mr. WORTHINGTON-EVANS

I am obliged to the hon. Member. I should like to know what is proposed to be done with the 5s. 7d. balance?

Mr. MASTERMAN

Where does the hon. Gentleman get the figure of 5s. 7d.?

Mr. WORTHINGTON-EVANS

The right hon. Gentleman has not forgotten the Act, I am sure. Five-and-ninepence is the cost of medical benefit and sanatorium benefit apportionable to the insured person—seven-ninths of the benefit. The half-crown is an additional half-crown which the insured person never pays—which has never been deducted from his contribution. It always was an additional half-crown. I quite understand he is going to get the Government half-crown. It is not going to be deducted from the money placed to his credit by the employer. It is coming out of the State fund. The balance of five-and-sevenpence is the net balance of the employer's money, and he is entitled to some benefit for that five-and-seven-pence. I should like the right hon. Gentleman to bear that in mind. Then, with regard to medical benefit for aged and infirm persons, I am delighted that at last justice is to be done to the old members of friendly societies, who are now going to have their medical benefit restored to them. With regard to the Amendment in connection with arrears, there is really a very curious history attached to it, and, as the right hon. Gentleman is not willing to allow that any of these Amendments came from this side of the House, it might be worth while the House considering what its history is. It was put down by a large number of Members, and it was actually moved by one of the hon. Members for Northampton. The Chancellor of the Exchequer said:— It is a proposal which is utterly impracticable unless you are going to give this money to men whether they deserve it or not. As I have said several times it is very important that the Bill should not be an encouragement to thriftlessness. I wonder what the reason is of the change. If that objection was valid then, the same objection applies now.

But the chief Amendment which is proposed by this Bill is the Amendment to give full benefit to all those who enter insurance for the first time over fifty. That Amendment in itself is going to cost £658,000 a year, and while no one is going to object to the older men in insurance having greater benefit if there is money to spare, I think the House ought to be very careful before it is generous at other people's expense. There is no question that the greater part of this benefit is to be paid for out of the funds which have been specially allocated to the younger members of societies. The State pays out of this £658,000, £160,000 a year, which is a gradually diminishing sum, and from the Sinking Fund or by the creation of additional reserve values, nearly £500,000 is paid out of money which was specially intended for extra benefits to the younger men in the scheme. We ought to have had some considerable justification from the Government when they introduced this proposal, and far from saying a single word in its support, the Financial Secretary has taken great care to leave this Amendment entirely out of touch in the few remarks he made on the actual provisions of the Bill. It is a departure from all friendly society methods. Of course the whole Bill is, to some extent; but never in the past has a friendly society given benefits of the same amount to men of all ages for the same contribution. They have always varied the contribution in respect of those who join much later in life or varied the benefits which might be given for that contribution. But an enormous bonus is being given by this provision, largely at the expense of the other members of friendly societies. I do not know where the Government got this suggestion for an Amendment from. I am quite sure none of the approved societies asked for it; none of the organisations of the approved societies asked for it, and so far as I know, none of the organisations representing insured persons asked for it.

Mr. CHIOZZA MONEY

Do you oppose it?

Mr. WORTHINGTON-EVANS

I have not said I oppose it. I have not the slightest desire to stand in any old man's way. You ought to consider, if you have the money to spare, whether you are using it in the best way, and certainly you ought not to rob the younger men who have already contributed so much to those who are older in the scheme. There has been no organised demand, certainly by any of the insured people for this particular benefit. Of course, I can conceive that the Government have found this insurance scheme not so popular as they imagined it was going to be, and they have looked round to see who are in charge of the lodges and courts throughout the country, and they have found that, generally speaking, men rather more than fifty years of age were in positions of trust and influence in these lodges and courts, and they have deliberately made a bid for popularity by giving them an additiontl benefit at the expense of the younger people in the scheme. What we have to consider is whether this money is being used in the best way. My hon. Friend (Mr. H. W. Forster) suggested that the Government should take into account one Amendment which is pressed upon them by all the members of the approved societies and all the organisations of the approved societies, namely, that the extra fourpence should be allowed for administration. I was very surprised to hear the right hon. Gentleman say that was going to cost something like £500,000 a year.

Mr. MASTERMAN

The hon. Gentleman opposite said 3s. 5d. to 4s.—that is £700,000 a year.

Mr. FORSTER

What I said with regard to the allowance for administration was that they were led to expect they would receive 4s., but they actually received only 3s. 5d.

Mr. WORTHINGTON-EVANS

My hon. Friend is, I think, perfectly right. The original idea was that there was to be an administration allowance of 4s. a year per person. That was reduced to 3s. 8d. per year per person, and from that 3s. 8d. threepence has been taken away for the purpose of the expenses of the insurance committees, and that has now become a net 3s 5d. The desire is that the original 3s. 8d. should be turned back again into 4s.—that is, that fourpence should be added to the administration expenses, and that is estimated to cost about £175,000 a year. I give the figure of £175,000 a year on the authority of the actuary who has been advising the Friendly Societies Council or one of the bodies representing the approved societies. That is an Amendment which, I believe, is going to be essential whether you do it now or whether you wait until you are further driven to it; but you cannot expect the administration of this Act to be well carried on unless you can have well-paid local secretaries to devote, if not their whole time, the great bulk of their time to the work of the lodges and the courts. Already the work thrown upon them is double or treble what it was in the past, and unless you can make it worth their while devoting themselves to the work, you will find that the expense in sickness alone will much exceed the fourpences which they would otherwise be expending on the improved administration. There are other Amendments which have been urged upon the Government, and which are competitors in this large sum of £800,000 which it is now proposed to spend. There is the payment of the first three days of sickness; there is the Amendment to give to the young men under twenty-one, who have no dependants, full benefits on the ground that they are paying already a contribution which is in excess of the actual benefits which they now get. But if the Government had wished to remove some of the hardships of the compulsory scheme, if they had wished to make good the promise which they have made of minimum benefits, they would have used the fund to strengthen the weak cases.

I propose to deal with three weak places, and incidentally with some of the criticisms which the right hon. Gentleman favoured me with. Let me take as an example of one of the weak places the position of the outworkers. Married women were first in the Bill, then they were out of the Bill owing to the Somerset by-election, and then they came back again into the Bill by order of the Commission. There were two Committees appointed by the Commissioners to report on the position of the outworkers and then there have been three different methods applied in collecting their contributions. The first method was the ordinary weekly system whereby the outworker, if she was a woman, had to-pay, and have paid for her, sixpence a week even if she was earning only two shillings or three shillings, and then there was the second system which was called the unit and half-unit system with a time limit, which was some modification and improvement of the original method. Now there is the present method, which is undoubtedly a better method, and which provides that in each of the trades where-outworkers are employed, a unit of wage shall be fixed, and that that wage, whenever earned, shall count as if it carried' one week's contribution, and the time limit is removed. The Blue Book refers at considerable length to the outworker's position, and it says that the new system is almost universally welcomed and it is; working satisfactorily. It seems to suggest that all difficulties have been got over in connection with the outworkers. I wonder to whom it is satisfactory, and how the Government can possibly justify, in view of some facts which I propose to give, keeping these people in compulsory insurance. I have had got out for me the actual results of the contribution of outworkers during the first thirty-nine weeks the Act has been in operation, and translating these contributions into the existing unit system, this will be the result. This is a factory which has 345 female outworkers, of whom 186, or roughly three-fifths of the whole, have completed nineteen units and are twenty units in arrear, "which means that although they have had nineteen times sixpence taken from their wages—partly paid in wages by employers and partly by themselves— they are twenty units in arrear, and they never can, under the Bill, get any benefit whatever from the contribution which has been forced from them. This year the position is closed, owing to the Clause which provides that arrears shall not count during the first year, but when this is in full operation, and if this position is repeated, three-fifths of these people will be fined every week, and can never get any benefit whatever from their contributions. As regards another fifth, they have made thirty complete units, and are nine units in arrear, and if that same progression is carried out the whole year, they will be over twelve weeks in arrear at the end of the year, and they will be suspended from benefit, though they may have had some chance of medical benefit. There are one-fifth of the women employed in that factory who would be in full benefit. I ask the Government to consider what right they have got to make people in that position go on contributing to insurance. What right have they got to spend £600,000 on other benefits, if they have that money available, until they make good the position of some of the poorest and weakest of those in the insurance? It is all very well to give an age increase to men over fifty—men with votes and influence—but ought they not to consider the women who are without votes and influence, and without money, from whom they are taking contributions, knowing well that they have nothing whatever to hope for in return?

The right hon. Gentleman has told us that there has been an analysis showing who the deposit contributors are. He seemed to forget the Chancellor of the Exchequer's description when the Bill was passing through this House. Can he remember his chief calling them "houses on fire," and an "uninsurable proposition?" These were the expressions which the Chancellor of the Exchequer used when trying to excuse himself from giving the deposit contributors proper insurance. He said, "How can you insure a house on fire?" The Chancellor of the Exchequer charges us with being wrong in regard to the deposit contributors, but it was himself who described these people as "uninsurable," and now they turn out not to be uninsurable. How can the Financial Secretary expect us, after having that description from the Chancellor of the Exchequer, to think that the approved societies would take in those "uninsured houses on fire"? I myself very much doubt whether they have been wise in doing that. I believe a good deal of the excess of sickness is due to the inclusion in their midst of a large number of people who were not really insurable, and who ought to have been segregated. The right hon. Gentleman made an absolute travesty of an Amendment which I proposed during the time the Bill was in Committee, but I will not deal with that now. There is not more time available than is required to deal with the Amending Bill actually before the House, and I will not be tempted to stray off into that matter. The Irish Report gives us a great deal of frank statement in regard to the deposit contributors in that country. One-third of the cards cannot be identified, and, if they have stamps on them, you are making that possible. When they come to the central office, they cannot be identified, and consequently no benefit can be given. Even in the second quarter, after having had a quarter's experience of the Insurance Act, about one-third cannot be traced, because they have no addresses and no insurance books in connection with them.

In England already some 10 per cent, of the deposit contributors, failing to have 7s. to their credit at the beginning of the year, have been suspended from benefit. One of the latest presents from the Insurance Commissioners is a little leaflet distributed among insurance committees telling them what is to happen to deposit contributors out of benefit for a whole year, although contributions are to be exacted from them. Having dealt with two of the weak spots, there is still a weaker spot in this Act, namely, the excess of sickness claims. The right hon. Gentleman, in his speech, told us that he had some information which seemed to show that there had been no excess of sickness in the first quarter, and that the actual claims did not amount to as many as had been expected. I do not find that in the Blue Book. I think the right hon. Gentleman said it was contained in the Blue Book. There are no figures, so far as I know, to justify the statement.

Mr. MASTERMAN

I said the figures had been compared with the actuarial estimate.

Mr. WORTHINGTON-EVANS

The only figure I can find is £400,000 paid out in benefit. There is no actuarial estimate, and no information to show the country whether sickness claims were in excess of or lower than the number expected. That is a notable omission. This Blue Book was to tell us how the administration had been going on up to date. All over the country there are rumours, and in every newspaper there are statements, that there have been extra claims made on the friendly societies, and although this Blue Book was only published a week or two ago, there is not a word of information to enable the public to judge whether the claims are excessive or not. The right hon. Gentleman said that the first quarter did not show the proportion of claims expected. Has he found out how many of these people in the first quarter were or were not qualified for benefit? If they have paid twenty-six weeks' contributions right through the first two quarters, they would have been qualified for benefit during the whole of the third quarter. Has he tested that in any way? If not, the statement he has made is absolutely valueless as evidence of the actual claims with expectation. The expectation is on the basis of the number of people referred to being entitled to benefit during the whole quarter. Unless he has found out whether they are entitled to benefit by making the first twenty-six weeks' contributions, he cannot make any useful comparison at all, and I should very much doubt the value of his statement. In the second quarter, where the claims ought to be lower, he himself admits that they were higher than the expectation. Is that not rather because the full number of people were qualified for claims and were coming upon the fund? I quite agree that a period of six months is too short to lay down for any actuarial calculations, but it is a period which you can compare with a similar period in the year before. Although it is short, it is the only period we have which enables us to make any comparison. I dare say hon. Members saw the very interesting reports in the "Times" of 12th and 14th July. I am not going to read them, but practically they are from all parts of the country, and especially the Midlands and the North. These reports have been got from officials of various approved societies, and I think that without exception the officials report that the claims have been hugely in excess of expectation from the actuarial point of view.

Mr. BOOTH

Does the hon. Gentleman suggest that they were selected by the newspapers or the societies?

Mr. WORTHINGTON-EVANS

I do not make any suggestion whatever, except that the reports are apparently genuine. That they are genuine I feel satisfied. If the hon. Gentleman has read them, he will see that they are genuine, and if he has not read them, I would advise him to do so.

Mr. BOOTH

I have read them.

Mr. WORTHINGTON-EVANS

These newspaper reports are, of course, general reports, and I have endeavoured to get something more than general reports. It is not very easy for private Members to get definite information, but I think I have got from some secretaries of lodges figures which do give an actual comparison of what has happened during the first six months. I will give one instance. In a lodge in Essex, taking State and voluntary benefits together, the number of days sickness has increased from 6.4 in 1911, and 6.8 in 1912, to 11.5 in 1913. There has been a 40 per cent, increase in the number of days sickness per member insured.

Dr. ADDISON

What is the name of the society?

Mr. WORTHINGTON-EVANS

The hon. Member will see that it would be quite wrong to give names of individual societies. If they were good societies, or if they had good experience, you would be advertising some particular societies if you gave the names. On the other hand, by giving the name of a society, you might be doing harm. The Financial Secretary to the Treasury himself refused to do it I will give the hon. Member the names privately if he wishes. In another South country lodge I find there has been the same experience, though not quite so bad. It shows a 25 per cent, increase in sick benefit. I have three or four more here in North Wales. I thought the Chancellor of the Exchequer, if present, might have liked to hear what was happening there. These are on the voluntary side only, and they are not State benefit. The figures show the effect of the Act on the voluntary side. In 1912 the average was 3.5 and in 1913 it was 4.8, showing an increase of 27 per cent. Another society in Carnarvon shows an increase of 33 per cent., and still another an increase of 40 per cent. In Anglesey one has an increase of 33 per cent, and another of 50 per cent. In Merioneth shire, I have got one with a 12 per cent, increase. In view of these figures, I venture to think that no one who really wished to use whatever money was available in the best way for national insurance would do otherwise than use it for the purpose of strengthening the position of the societies. I do not think there can be any doubt, in view even of these short comparisons, that the financial position does require strengthening, for the consequences, if a large number of lodges and approved societies failed, are too horrible to contemplate. They have been the means of thrift in the past—practically the only means of thrift known. The Chancellor of the Exchequer has come along and said, "The State is going to help you and give you 9d. for 4d. This is not a gamble. It is an investment. You pay your 4d. and you get your 9d." It is largely because of this that the whole spirit of the movement has changed. Having paid their 4d. insured persons want to get their 9d., and they take the earliest possible opportunity of getting it. A large amount of the feeling is difficult to explain, except on that footing. A large number of people felt pride formerly in keeping off the lodge funds, but that feeling now seems to be disappearing under the influence of the Chancellor of the Exchequer. The right hon. Gentleman has made an appeal to this side to help him to get rid of party politics. Whenever he is in a difficulty he does that. At other times he does not spare his political opponents, whether on the platform or in this House, nor does the Chancellor of the Exchequer. He is constantly making platform appeals. May I remind the House of one. Only a year ago, just about the "Joy-day," he was then saying that it was the Tories who were spreading lies about the Act, and there was nothing the matter with it, and it was all coming through. In view of the sickness experience will hon. Gentlemen opposite say there is nothing the matter with it. [HON. MEMBERS: "Yes."] Just a few. The hon. Member for Hoxton (Dr. Addison) cheered just now when I mentioned the Chancellor's statement that it was the Tories who were telling lies about the Act. May I remind him of the actual quotation. Speaking on the 25th May, 1912, the Chancellor said:— On the Stock Exchange there were people who were called bears, whose function was to run down a security and circulate falsehoods about it, and then try to break it on the market. Their only chance of making money was to sell out before they were found out. He would tell them what the political bears, the Tory bears, had been doing with the Insurance Act. They had circulated falsehoods, and for the moment they had created a panic in the market; but the security was a good one and the public were beginning to find out that there was a value in it. The price was going up, and the Tories, unless he was mistaken, would have to pay a ruinous contango on the transaction. The Chancellor was wrong then, and he is wrong now. Three days before he made that speech he had made an investment, and he lost money by it, and another loss besides. He is just as wrong now, and unless he will deal with this situation at once there will also be a loss, a loss not only of money, but a loss of the nation's credit.

Mr. HODGE

The hon. Gentleman who has just sat down is always interesting on the question of national insurance. With regard to this Amending Bill we desired that it should have gone much further, but we realise that at this time of the year time will not permit the carrying out of all the things which we would like to see done With reference to the experience of the hon. Member for Colchester as to sickness, as the secretary of an approved society having 20,000 members who are connected with the steel and tin-plate and iron trades, trades which are supposed to have more than the average of sickness, our experience under the Act has been that the sickness is less than the actuarial expectations. Another fact: averages are fallacious unless you have got the average age of the members. In the society with which I am connected we have been careful to have the ages of the members taken for each quarter, and the average of sickness which we had under the Act not only for the first, but for the second quarter, proved to be considerably less than the actuarial calculations. The only thing that I regret to say is that so far as excess is concerned, it is in the payment of maternity benefit. [HON. MEMBERS: "Why regret?"] You will have to ask somebody else. I cannot give any reasons for it. Probably if the inquiry which has been promised by the right hon. Gentleman, the Financial Secretary, were extended in its scope, it might supply the answer which hon. Gentlemen opposite are evidently so anxious to have. When the National Insurance Bill first came before the House the Chancellor of the Exchequer invited all sections of the House to meet him and discuss its various provisions and suggest Amendments. We on these beaches accepted the invitation, and while we were successful in getting him to accept some of the proposals which we put before him, there were many which he refused to accept. The bulk of these are now contained in this measure. Our hope was that the present Bill would have been more extensive in its character, but the speech which we have heard from the Front Bench gives me hope that when the Bill goes upstairs some of our proposals for an extension of the Act and removing some of the anomalies will be accepted.

I would like to accept what one might describe as the challenge of the Financial Secretary with respect to reducing the cost of administration. I do not find anything in the Bill in reference to the excessive cost that is imposed upon the various approved societies as a result of the four separate Commissions. If something was done to simplify matters a great deal of work and money would be saved the various approved societies. If we take as an example the issue of money by the Commissioners for the payment of benefits to approved societies, the English Commissioners have one method the Scottish Commissioners have another, and the Welsh Commissioners yet another. I hope that the right hon. Gentleman realises what it is for the secretaries and other officials of approved societies to have to read so many sets of regulations, when one regulation would be sufficient for such a simple purpose as that. My hope is that the right hon. Gentleman upstairs may do something by way of Amendment to get over a difficulty of this kind, or, if he has the power and influence with the Commissioners, that he may get them to set up in their arrangements some sort of clearing house, where the methods of the three Commissions would be of the same character, so that we should only be compelled to read one circular and file one, instead of having to read and file four. Then, if you take Scotland as another example, one would have thought that their methods in particular would have been up to date—at any rate, if one was to believe everything that Scottish Members say, one would be inclined to take that view. In connection with medical benefit, for instance, there is a waste of money in the method of making application. If you have got 5,000 members, you have got to make 5,000 applications, instead of making your application as a whole. I think that in that direction a great deal of money is wasted. I will also suggest to the Financial Secretary that something might be done by way of giving the approved societies the benefit of Section 33 of the Friendly Societies Act. That would mean in stamps alone a very great saving in administration expenses of approved societies.

It seems to me to be an unsound proposition that any Government Department should be making money out of other Departments. When the Chancellor of the Exchequer comes to speak, I hope that he will be able to give us some assurance on that particular point. A great deal was made by the hon. Member for Colchester of the sickness in certain societies which were nameless. But while he was speaking it appeared to me that those societies seemed to be confined entirely to agricultural areas, and it was probably a question more of wages than of sick benefit. In some cases the chances are that they were getting more money or as much money while they were off sick as if they were working, and one wants to know the whole of the circumstances before one can place its real value upon a statement of that character. It is an easy matter to criticise; it is much more difficult to construct; and as secretary of an approved society I have some appreciation of the difficulties of administration. We may be in numbers, which are some 20,000, smaller than many societies, but the initial difficulties of getting into working order wore very great, and I do not think that hon. Members in their criticisms have taken into account the difficulties of launching upon the country what the Financial Secretary has described as a gigantic scheme. If they had had any practical experience in the formation of even the smallest of the approved societies, they would have a better conception of the difficulties and the magnitude of the task. In reference to the question of casual labourers, we on these benches have heard with some satisfaction of the provision which has been made in the Bill. I do not think that anyone can have more than we have an appreciation of the difficulties of that task, and if only something can be done on the lines of what is done at Liverpool and Hull in the treatment of the casual labourers of the other ports of the country and casual labourers generally, it would be to the national advantage as well as to the individual benefit of these particular men.

6.0 P.M

I have not had the time or opportunity to study the Report which has been issued, but I have no doubt that it will repay anyone who can take the trouble to go properly through it. The hon. Gentleman the Member for Sevenoaks (Mr. Forster) suggested that no person could be found who was satisfied with the Act. I do not know that anyone could be found who is satisfied with any particular Act that is passed. Certainly those who have to do with the administration of the Act are not satisfied. As one who has been connected with trade unionism and friendly societies for over thirty years, I find that even with respect to our rules we are never satisfied. Year by year we are always finding the necessity of some change for the purpose of improving those rules. It would be, I think, a miracle to find that everybody was satisfied with the National Insurance Act as it is. A great deal has been made of the so-called injustices from which certain people suffer under the Act. I think it would be miraculous, where you have 11,000,000 of insured persons, not to find cases of hardship or injustice. What we want, in those cases which come before us, is to try to make provision so that similar occurrences may not take place in the future. Another point to which I wish to call attention is that to which reference was made by the hon. Member for Colchester (Mr. Worthington-Evans), with whom I agree, in saying that the 3s. 5d. does not really give very great scope for efficient administration. My experience is that it is just a shade too little. If you want to prevent what is commonly called malingering, then you should have efficient visitation of the people who are receiving sick benefit; and, so far as the allowance at present given is concerned, it does not afford a very great margin for the payment of local secretaries, the payment of the expenses of the central department, or for the efficient supervision of those who are receiving benefits.

May I say in this connection that those of us who have to do with the administra- tion of the Act have not received very much support from the medical faculty. Medical men, within recent times at any rate, have talked a great deal about the honour of the profession, but from my knowledge and experience of the administration of the Act, I should like to see it in practice instead of in speech. If only the doctors would rise to the standard that they would have us believe they have set for themselves, it would do very much to prevent what one might describe as malingering. Criticism has also been offered as to the friendly societies giving those who are compulsorily insured the opportunity of also being voluntary contributors. May I say that when the worker is sick is the time that he requires most money and not less, and where a man is only getting a paltry 10s. a week sick benefit he goes to work before he is in a condition to do so, whereas, if he was getting a shilling or two shillings more in sick benefit it would afford him an opportunity of becoming thoroughly well before he resumed his employment, and there would be less danger of his breaking down. I do not think that the right hon. Gentleman the Financial Secretary to the Treasury should pay very much attention to criticisms of that character; at any rate, it has been my experience that the worker, as a rule, after an illness goes to work too soon, and there is a breakdown.

I can only say that in my experience the man who is receiving as much sick benefit as he would get in wages is a man who does not break down; he gives himself full opportunity of recovering from the illness that he suffers from. The women are making great complaint with respect to the maternity benefit. A great many of them, notwithstanding that the four-pences are deducted from their husbands' wages, hold that the women should be the legal receivers of the maternity benefit. That is a doctrine I agree with, and I hope that when the Bill goes upstairs that particular proposal will be looked upon with a favourable eye by the Minister responsible for the Bill. There is a good number of other proposals that I do not think it is necessary to put before those responsible for the Bill at the present moment; they are more points for Committee upstairs than for the House. I may say that so far as we on these benches are concerned we have never been carping critics of the Bill. Our desire is to make it more workable than it is, and any suggestions or proposals that we put forward will be for that purpose, and I consequently hope that when we do put them forward the right hon. Gentleman will give us credit for seeking to improve the Bill, and neither to hamper nor harass him in his efforts to make the present Act a more workable scheme.

Mr. WILLIAM O'BRIEN

In intervening in this Debate, there is one thing at all events in connection with this Bill that I can commend, although it is something not contained in the Bill, and I hope I am right in taking it for granted that the Chancellor of the Exchequer has made up his mind to refuse to give legal effect to a proposal for bolstering up this Act in Ireland by further subsidies to a secret society, in whose interests the Act has been forced upon Ireland, and by which it is practically administered and controlled. It will not be necessary for me on this occasion to go into the scandalous attempt being made to force medical benefit upon the people of Ireland and capture money which belongs to Ireland, and which is wanted for very much better purposes. The point to which I wish to direct my remarks is this: What is to become of Ireland's equivalents for the additional subsidies for medical relief which have been granted and are to be granted to Great Britain, and which are not found necessary in Ireland, because the ratepayers of Ireland are already paying for medical relief under a system of their own. In addition to the £1,800,000 Grant-in-Aid made to Great Britain already, I take it that this present Bill will involve something like £500,000 or £600,000 more to Great Britain, and obviously it would be intolerable to ask Ireland to pay her Imperial proportion of these enormous subsidies to Great Britain while she is to get nothing herself. If Ireland has not asked for an additional contribution for medical benefits it is simply because she does not get it, it is simply because the Irish ratepayers are already paying £100,000 a year under a medical relief system of their own, and they cannot afford to pay for it twice over.

The rough and ready system of equivalent Grants between the two countries, which has been carried on now for a period of at least twenty-five years, since the arrangement about the whisky money, is undoubtedly an exceedingly clumsy and unfair one to Ireland, but at all events it generally works out at about one-ninth or one-tenth of their subsidies, and consequently in this present instance it ought to yield to Ireland a sum of somewhere between £200,000 and £250,000 a year. Of that sum £50,000 has been already, I regret to say, appropriated, again at the instance and in the interests of the Board of Erin, in payment of doctors' certificates, without even satisfying the doctors. At any rate, a sum of at least £150,000 a year ought to be made due to Ireland, and what we want to know is whether that sum, which will not now be required for medical benefits in Ireland, will not be made available for a State subsidy to encourage the housing of the poorest of the labouring classes in the cities and towns of Ireland. That is of all other purposes by far the most urgent for which this money is now required. No doubt when earlier in the Session we urged the claims of the city and town labourers we were assailed with the usual abuse from the party behind me under the patronage of the Member for the Scotland Division of Liverpool (Mr. T. P. O'Connor). They even went the length of denying Ireland's right to any equivalent at all for all those enormous subsidies to Great Britain, but they have since, I understand, dropped that contention like a hot potato, at all events since we brought this subject under the notice of the House earlier in the Session. I think it may be said that now there is practical agreement in all sections of opinion in Ireland that this use of the money would be the greatest possible national blessing, and would in addition be the very best form of health insurance that could be devised, because the slums of Irish cities and towns are really the source of disease in Ireland.

You have ready to hand what has been done for the agricultural labourers in Ireland, and which is now universally held to be the most humane and most successful experiment in local legislation that has ever been tried. The system is, roughly, that the labourer pays one-third the cost, or 1s. a week from his pocket. The local ratepayers pay another third and the remaining third is supplied by State subsidy. If even £150,000 per year, though I think Ireland's share ought to be £200,000 at least, but even if £150,000 as Ireland's equivalent under the Insurance Act were to be applied to this purpose, it would mean the provision, when capitalised, of at least 100,000 cottages, which could be let at one shilling per week in the towns and cities of Ireland. That would be one of the most glorious reforms that ever was accomplished. It would, practically speaking, complete the last link in the social regeneration of the working classes in Ireland. If you give any guarantee of any sort that the money will be applied to that purpose, we shall gladly support this Bill so far as it may command the support of the working classes. Unless we get some promise in that direction, and especially so long as there is any danger of this money being in any way filched from the labourers in the cities and towns in Ireland, who have the first mortgage on it and incomparably the most urgent claim on it, we shall, to the best of our small ability, certainly resist and defeat this Act in this House or out of it, and we will do our best to defeat anybody and everybody who may be a party to defrauding the Irish labourers in the cities and towns of this money, which is their only hope of obtaining any substantial fruit from the legislation of the last quarter of a century to which they have been so unselfish and so patriotic parties.

Mr. CHARLES BATHURST

I welcome the provisions of this Bill so far as they go, but they do not go very far, and I, for one, am going to express my deep disappointment, in view of the very strong feeling throughout the whole of the rural districts, that no attempt whatever has been made by this Bill to meet the more serious of the grievances which are felt in those areas. In the first place, the flat rate of weekly contributions remains untouched by the Bill, and I wish to tell the right hon. Gentleman and this House that as long as the flat rate of premium payment remains, not only will the agricultural labourers and their employers have a well-founded grievance but no other form of Amendment of the National Insurance Act will tend to remove that grievance. In this connection I may remind the Chancellor of the Exchequer that I laid before the House, in conjunction with some of my colleagues, certain Mancheater Unity tables during the discussion of the National Insurance Bill, covering a period of over twenty years. They demonstrated to my mind, and to the mind of my colleagues, and I venture to think to the majority of the House, that agricultural labourers and rural workers generally were entitled to some differential treatment as compared with those who are engaged in less healthy and more hazardous occupations. We cited in support of our claim the precedent afforded by the national health insurance system in Germany, and in certain other countries. Certain arguments were laid before the House from the Front Bench to the effect that those tables were not altogether convincing, and that, in fact, the agricultural labourer towards the latter part of his life suffered from such a proportionately greater amount of illness that matters equalised themselves between him and his urban mate. There never was any proper basis for that statement made from the Front Government Bench, and the Actuaries' Report which was issued shortly afterwards, showed that although there might have been more serious illness in more advanced life, that the more serious illness did not begin until the age of seventy, at which time the provisions of the National Insurance Act came to an end.

But I am able to-day to strengthen my case in the interests of the agricultural community generally by the actually realised experience, since the Act came into force. I may remind the House that, in fact, we have not had as much experience as we should have liked to acknowledge, because so many of the small friendly societies who were carrying on, and I may venture to say, not only carrying on splendid work in our rural districts, but who formed in the old days the very basis of voluntary health insurance, so many of those societies have ceased to exist as the direct result of the Act, and also as the result, direct and indirect, of the policy of the Commissioners towards those societies. I am not going to enter into this question of the attitude of the Commissioners except so far as to say this, that they read into the Act, or, rather, they altered the Act or modified it by departmental regulations so as to restrict the effect of those Sections of the Act which would have enabled a large number of small societies to group themselves together into larger associations, and, to some extent, to obtain for their members the benefit for the higher standard of health which they enjoy. I have, at any rate, figures in respect of what is, I believe, the largest rural workers' friendly society in the Kingdom. I am not permitted, for reasons put forward by the hon. Member for Colchester (Mr. Worthington-Evans), to give the name of this society, but if the right hon. Gentleman asks me to give it to him privately, of course, I have no objection whatever. During the first quarter in which the Act was in operation, the amount of sickness benefit paid during that quarter, ending the 13th of April this year, was, in the case of this large rural workers' society, £3,564 6s., and the amount of maternity benefit paid during the same quarter amounted to £1,305, making together an aggregate sum of £4,869 6s. On the other side I am entitled to point out what the Insurance Commissioners estimated as the average cost of sickness and maternity benefit per head of the whole population, agricultural and rural, taken together for the year. For that period they estimated that it would be at the rate of 3d. per week for the men, and 2d. per week for the women. Those figures taken on the basis of the membership of this society represented £662 per week, or in respect of the quarter, a sum of £8,206; that, is to say, the amount estimated by the Commissioners would, if their facts and figures and estimates were correct, upon sickness and maternity benefit, have amounted to over £8,000, whereas in fact the amount actually paid out amounted to no more than £4,800.

It may be said that the first quarter may for certain reasons be somewhat misleading and form no guide to future quarters. I have also the figures for the present quarter, or rather for the last, quarter, so far as figures are available, that is to say, for the nine weeks ending the 14th of June. There again, the aggregate figures for sickness and maternity benefit amounted, in fact, to £4,038 10s. as compared with an amount which, on the basis of the Commissioners' calculation, should have been £6,228. It is perfectly evident from those figures that as the result of realised experience, agricultural workers do not make anything like so large a claim upon the sick fund of their societies as workers in other Industries. I frankly ask the House and the Chancellor of the Exchequer in justice to the agricultural community, which he realises as well as I do, is not by any means the best paid section of the working classes, and, as he realises as well as I do, their employers are not by any means those who are making the largest profits out of the business in which they are engaged, I ask in the interest both of the employers and workers in rural districts, that some effort should be made to meet this well-founded grievance, which can only be met as I suggest, by altering the flat rate of premium paid. It may be said, "Well, if we, attempted to do this, we cannot do it by an Amendment of the existing Act, and we should have to tear up the Act." My answer to that is this: there is an old maxim in law which says, "Ubi jus ibi remedium." Where there is a right or where a wrong is offered, there is, under English law, a remedy. If it is the fact that there is, and I suggest that there is, and the figures prove it, a real injustice experienced to-day under this National Insurance Act in the country districts, surely that is a strong enough argument, if you cannot amend the Act, to start another scheme more equitable in its operation and incidence upon by no means the least important part of the body politic.

I believe an hon. Friend of mine opposite is going to draw attention to another rural grievance, and I will not do any more than just indicate what it is. It is the case of those agricultural labourers who are living in, as is very often the case in the northern counties of England, and in some of the counties in the right hon. Gentleman's own country. They receive what may appear to be a small wage of perhaps about ten shillings per week, the rest of their remuneration being represented by board and lodging, which is given them free. In many of those cases, and in almost all those cases in the North of England, the employers have been in the habit, and are still paying to those men full wages in the event of their illness. The Chancellor of the Exchequer repeated more than once, I think, in this House that in such a case it shall not be obligatory upon the employer and his labourer to pay a premium for the sake of obtaining sickness benefit, and at the same time demand from the State for the labourer ten shillings sick pay. In fact, many cases have been brought before the magistrates, and, I believe, some before the judges of the High Court, and the Act is being interpreted to involve a larger aggregate payment during the time that the labourer is ill than he receives in money and kind during the time he is at work. In other words, it is putting a premium upon malingering without any advantage being derived by the master or the State. I will not refer further to the subject, as it is to be raised on the other side of the House.

I want to deal with one or two other matters not dealt with by this Bill. The first is what I believe to be the most serious drawback to the health insurance system to-day—the continuance of four bodies of Insurance Commissioners. I have never been able to understand, unless it is owing to the prejudice on the other side in favour of Home Rule, the object of having four bodies of Commissioners. It has enormously increased the aggregate work that has to be done by the Commissioners; it must have enormously increased the expense for which the public is largely responsible; and it has operated as a serious grievance amongst all the best regulated societies in the country. I refer, by way of illustration, to one which is probably as good an example of the injustice arising from having four Commissions as you will find in the country. At Swindon there is a large and very well-conducted society in connection with the Great Western Railway—the Great Western Railway Locomotive Running Department Staff Approved Society. That society has at the present time something less than 5,000 members in England, and something less than 5,000 members in Wales, the Great Western Railway running through both England and Wales. They are being told that they will not be allowed to stand on their own as a separate approved society, although their health standard is surprisingly high, and they are exceptionally well managed and have been as a voluntary society for many years past. They are told that they will have to associate next year for the purposes of valuation with members of other societies, which are not so well managed, and have not so high a health standard. The sole reason is that there are two different Commissions, one for England and one for Wales. That is a very good illustration of the injustice caused to a well-managed society which has members in more than one of the countries making up the United Kingdom.

Another case which must be well known to the right hon. Gentleman is that of the teachers. It is common knowledge that there are a large number of teachers, especially secondary school teachers, distributed all over the United Kingdom, many of them passing from one part to another. They have their own combined society, but they cannot in any one of the three smaller countries, and I believe not even in England, make up a sufficiently large number of members—5,000—in order to form a separate approved society, and so receive separate recognition for the purposes of valuation. That is another case—only one of many—where you have a class of persons engaged in a particular profession or occupation distributed all over the United Kingdom desiring to have a separate society confined to that section of the community. I hope that the right hon. Gentleman, if he is not going to accept an Amendment to combine these four bodies of Commissioners into one Commission, will give some reason for the continuance of what seems to be a most anomalous and unreasonable system. I should like to support very warmly the suggestion made on the Labour Benches that the maternity benefit should, by an Amendment of this Bill, be paid to the woman herself. I do not want to give illustrations, although I have here a large number of cases where the maternity benefit has never actually reached the unfortunate woman herself. It may be owing to a love of drink, or to other moral defects or extravagance, that, although this money is really provided for the woman at the time of her greatest need, it does not actually reach her hands. The women's societies feel very strongly on this point, and an Amendment will be put down from several quarters in Committee with a view to remedying this apparent injustice. Another matter upon which the agricultural workers feel very strongly, and I suppose it is not limited to agricultural workers, is that it is still necessary to pay premiums both under the Workmen's Compensation Act and also under the National Insurance Act, while value is only to be obtained under one Act or the other, but not under both. That system has never been justified in this House. We propose to put down an Amendment to meet that injustice.

I want to refer to one matter mentioned in the Bill. In future, by Clause 5, no voluntary contributor is to be entitled to medical benefit. Surely that is a breach of contract. If an insurance company some two years after effecting a life insurance were to say that the policy, although the premium continued to be paid, should be torn up, the person aggrieved would very properly say, "You have no right to do anything of the sort; you are committing a breach of contract." I suggest to the Government that they will commit a breach of contract if they tear up the provision of the National Insurance Act which provides for the insurance of certain voluntary contributors. But if they intend to do it, let it be done fairly and equitably. This Clause provides that where a voluntary contributor ceases to be entitled to medical benefit, the weekly contribution shall be reduced by 1d. only Where is the basis of the 1d.? The Government's own actuaries have shown that the medical benefit is worth 1.51d., or more than 1½d. That being so, if this contract is to be annulled, let it be annulled on an equitable basis—on the basis of an abatement of 1½d. and not of 1d. Another Clause to which I wish to refer is that which provides that no employer shall make a deduction from his employés' wages in respect of the employer's own contribution. I am very glad that that provision has been put into the Bill. I am only too conscious of the fact that many people who ought to know better have committed a dishonest breach of the National Insurance Act in deducting from their workmen's wages a larger sum—in some cases a very much larger sum—than they are entitled to do. I am not quite sure that I understand how the penalties are to be enforced as a result of the inclusion of that Clause. All I hope is that there will be penalties, and that they will be sufficient to deter anyone from indulging in this dishonest practice. I propose to put down an Amendment to that Clause, because, to my mind, as it is worded at present it will not meet all the cases that will arise under Schedule II. of the Principal Act. Subject only to that, I warmly welcome the provision. In conclusion, I should like to ask the Government whether they have any reason now, in view of the statements and figures which I have brought before the House and which others have mentioned in the country, for not doing something to alter the flat rate premium payment as it applies to agricultural labourers and their masters.

Sir LUKE WHITE

The hon. Member opposite (Mr. C. Bathurst) has spoken with regard to the agricultural community. I also should like to say a few words on that subject. When the Insurance Act was passing through Parliament I took exception to the flat rate principles being applied throughout the country, because I thought then, and I think still, that it would inflict great injustice upon the agricultural community. Not only has it inflicted injustice upon the farmers, but it has to my mind inflicted grievous injustice upon the agricultural labourers. It has been said over and over again that if agricultural labourers would combine in their own districts they could become approved societies, and would then be able in a few years' time if they accumulated considerable sums of money to obtain greater benefits than the Act provides. I say, however, that at the present time, taking into consideration the position of the agricultural labourer, 4d. a week makes a great difference in the household budget as far as his wife and children are concerned. One penny or 2d. a week at the present time is a great tax on the household of an agricultural labourer. I will not go further into that matter except to say, that if an alteration of the flat rate cannot be made in connection with this Amending Bill, I hope the Chancellor of the Exchequer will have some inquiry made as to how that flat rate applies to agricultural districts, and, if possible, find some remedy. I am quite certain that a remedy ought to be found, and that the flat rate principle ought not to apply to agricultural districts as it does to industrial communities.

My main reason for rising is to refer to a matter which I had thought would have been brought within the purview of this Amending Bill. I refer to cases which have occurred where agricultural labourers, having been laid aside by illness, have not only received full wages but have been held by the Law Courts to be entitled to the 10s. per week in addition. That is a peculiar condition of affairs. The Chancellor of the Exchequer will remember that two years ago a deputation waited upon him from the National Farmers' Union. That is a very strong organisation, consisting of not less than 20,000 farmers. They laid before the Chancellor of the Exchequer the fact that in many counties, especially in Lincolnshire, there prevailed a custom whereby the farmer paid full wages to the agricultural labourer during illness, and they wanted to know what effect the Insurance Act would have upon that custom. The Chancellor of the Exchequer informed the deputation that the 10s. per week would be paid to the farmer if he paid to the agricultural labourer his wages in full. I want to ask the Chancellor of the Exchequer now in this Amending Bill to carry out the pledge that he gave. A few weeks ago at Stamford County Court a man sued a farmer for £3. He had been away from his work for six weeks, and when the farmer paid him at the end of his contract the wages due to him he deducted £3, being at the rate of 10s. per week. The farmer told the labourer that he had got £3 under the Insurance Act, and that therefore he would only give him £1, so as to make up his full wages. The agricultural labourer made out that he ought to have his wages in full and have the insurance money as well, and he put the farmer into the County Court. The judge of the County Court gave judgment in favour of the agricultural labourer. He said that notwithstanding the conditions of the Insurance Act in regard to sickness, its main principles was to provide for the labourer or for the workman something on which he could subsist whilst away from work and during illness, and when he received no wages. And he said there was nothing in the Insurance Act which would entitle the farmer to reduce the wages to the extent of what the man got under the Insurance Act. Hence he gave judgment for the full amount.

In that particular case the agricultural labourer who was receiving a wage equivalent to £1 a week received also for the time of illness 10s. a week under the Insurance Act; with this conclusion: that when he was in health and strength and able to work he received £1 per week, and during his period of sickness the judge held he was entitled to 30s. per week. I do not think that even the Chancellor of the Exchequer will agree that that ought to be continued. I do hope he will make some provision in this Amending Bill so as to cure that particular defect. It may be said that that is an isolated case, and that the County Court judge may be wrong. The National Farmers' Union have taken up these cases. There were two cases tried before the County Court judge at Lincoln about four weeks ago. The Country Court judge stated that it was a very important case, and that he would take time to consider his decision. In that Lincoln case the same state of things to which I have referred obtained—the man was entitled to £1 a week when he was working and if he was away through illness, or was laid up in the farmer's house, he was entitled by custom to £1 per week while he was ill. In that case also the farmer deducted from the wages the amount which the man had received under the Insurance Act. To-day the judge has given his decision in the case, and I have received a telegram from the secretary of the National Farmers' Union to the following effect:— Judge Baker found for plaintiff for full amount wages claimed, but at same time ventures to express the hope that this serious blot may be deleted by Parliament in the Amending Bill now under consideration. I am certain that in these cases the House of Commons will see to it that justice is done. I am certain, also, that the Chancellor of the Exchequer, having these facts placed before him, will, at any rate, see to it that in this Amending Bill some Clause is inserted which will do away with this injustice on the agricultural community.

Viscount WOLMER

I am very glad that the Government have brought in a Bill to amend the Insurance Act. My only complaint against it is that it does not go far enough. The point I want to make tonight is that the Government made a very great mistake in not including Part II. of the National Insurance Act in this Amending Bill. The Insurance Act was presented to the country as a complete whole. I have got quotations from the Chancellor of the Exchequer, which I can read if necessary, showing that when he introduced it and passed it he regarded it as one complete plan The Unemployment and the Health parts were really interdependent. I venture to submit that it is a very great pity that now there is an opportunity of passing Parts I. and II. of the Act under review that the Government have omitted to deal with the Unemployment part as well. If the Government think that there is complete satisfaction in regard to Part II. of the Act I can assure them that they are making a very great mistake indeed. It is not quite so unpopular as Part I., but that is simply because it does not extend to so many many persons. The working that there has been of Part II. has shown that in that part of the Act there are certain very grave defects which press exceedingly hardly on individuals who have been brought within its scope. I cannot conceive why the Government have not included Part II. in this Act. I should be very much obliged to the right hon. Gentleman if he will explain why the Government have taken the course they have. It cannot be that they are short of time, because this Bill is going upstairs, and therefore it would not interfere with the rest of the business of the House.

I want to put a particular case which has been brought to my notice. In a large asylum in my own Constituency there are a certain number of bricklayers, carpenters, and other persons employed by the asylum authorities who come under the scope of Part II. of the Act. These men, to all intents and purposes, have got perfectly regular employment. They are never discharged unless they commit some offence. The amount of their work does not fluctuate. The number of patients in the asylum continues to be about the same, and for all practical purposes once a man is employed at the asylum and gives satisfaction, he knows that he can go on as a servant of the asylum committee for the rest of his life. But these men who are employed in Winwick Asylum, Lancashire, applied to the Board of Trade for an Exemption Order under Part II. of the Act, Clause 107, and it was refused. To my mind the excuse given is a purely technical one. It was that the medical superintendent had technically the power of dismissing these men without referring the matter to the committee, and that also the men were liable to be dismissed for reasons other than some grave fault. This is not what occurs in practice. In practice these men are assured of perfectly regular employment, and they feel this grievance very much indeed. They feel they have to pay 2½d. a week towards benefits which they are never going to enjoy. They feel it to be an intolerable hardship that they should be compelled to pay to something which is of no earthly use to them.

There is another case, the case of the ordinary employé of the country gentleman, or some man who does not run his business for profit, but keeps his employés engaged. Of course, he has the right to dismiss them at any moment, but we know that in hundreds and hundreds of cases these men never are dismissed. First father and then son continue to live on the estate, and there is no risk whatever of the men employed falling out of employment. I cannot conceive why the Government have shut out the opportunity of Amendment from their Amending Bill when you have got cases of that sort where the workmen are themselves satisfied, where their conditions of employment are secure, and where the employment part of the Act is really of no use to them ! Why in these cases should we not have some alteration of the Act which would enable them to contract out of it? I put down an Instruction to that effect, and I asked the Prime Minister if he would give facilities for its discussion. The right hon. Gentleman refused. As the Government know perfectly well, an Instruction cannot be discussed unless time can be found for it, as the Bill is going upstairs. I should like to take this opportunity of making an appeal to the Government that they should give time to pass that Instruction to the Committee who are going to consider this Bill, so that they should have the opportunity of passing Part II. under revision as well as the other parts. I do not believe that the Instruction would be opposed in any quarter of the House; it would, I believe, be passed by universal consent. It would not really give very much more work to the Committee upstairs to do. There are several defects in the Unemployment Section of the Act which requires amendment, though I admit they are not nearly as many as the points that have arisen in regard to Part I. Therefore I feel the Government, in making that concession, would be vastly improving the value of this Bill, and at the same time they would not be imposing an undue strain upon the labours of the House. I would like to make that appeal to the right hon. Gentleman, and I hope the Government will give it their consideration, because, although this is a small matter, it is a matter of vital importance to the men concerned, who cannot afford this reduction in their wages, which they regard as a gross injustice, and from which they see no prospect of ever deriving any benefit.

7.0 P.M

The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Mr. J. M. Robertson)

When Part II. of the Act was under discussion in Committee upstairs the cases of workmen employed on estates where the security of employment is high, raised by the Noble Lord who has just spoken, were fully discussed. But the Noble Lord does not perhaps realise that a certain number of estates are managed by contractors. If we exempted the workmen who are employed directly by the owners of estates we should at once be putting a certain disability upon contractors who employ their men under conditions which the Noble Lord will allow are less favourable in regard to continuity of employment. This had to be taken into consideration, and it was on those grounds that it was decided that no difference could be made, and that we-could not exempt the employés on private estates without also exempting the others who are employed by contractors. In regard to the other case it is one of a considerable number which have arisen under the Statute, and of which the main effect was foreseen. In an obviously incomplete system of unemployment insurance there must be difficulties about where the line is to be drawn. None of the cases which the Noble Lord quotes were unforeseen. Even if it was decided in such cases as the men employed in the asylum that they ought to be included, there is no occasion for doing that by a legislative amending Act. The Board of Trade has power both to exclude workers brought in and to include others not brought in. It is a matter of administration.

Viscount WOLMER

In the case which I cited the Board of Trade quoted the Act and said the Act did not give them authority to more than examine into the case.

Mr. ROBERTSON

It would be a matter in that case of very strict definition. I have not the whole of the details of the case cited by the Noble Lord before me, but if it was as he says the Board did not see any reason for an Amendment of the Act on behalf of a few employés. The exercise of legislative power and enactment is not desirable in every particular case. We cannot take into account as requiring legislation every possible case that arises.

Viscount WOLMER

Why not?

Mr. ROBERTSON

Because the cases brought before us can be dealt with by administrative Order. I cannot express an opinion offhand without knowing the full details of the case mentioned by the Noble Lord. I can only say if that is the only case that he can suggest it hardly calls for an amending Act. With regard to the more extensive demand for improvement in administration, that can be done if necessary.

Viscount WOLMER

Does the hon. Gentleman approve of discussing it when this Bill goes upstairs?

Mr. ROBERTSON

That is not a matter for me to say.

Mr. R. A. COOPER

I am personally as dissatisfied with this Amending Bill as I was with the original Act, and the attitude of the Government is well illustrated by the point my Noble Friend has raised, because when the original Act of 1911 was before the House as a Bill, in spite of the pressure we tried to bring to bear on the Government to try to get them to separate the Act into two parts, we were assured it was impossible or a most undesirable thing to do. This afternoon, when my Noble Friend put a question to the Prime Minister on this subject the right hon. Gentleman's reply was to the effect that if he wished to deal with Part II. a separate Bill from this Amending Bill would be necessary for that purpose. I was an opponent of the original Act and I voted against it, and I cannot say that I look with much more favour to-day upon the working of that Act than I did at the time I gave that vote. But to-night in this Debate we are necessarily confined to considering not the fundamental basis of the original Act, but rather an Amendment by which that particular Act can be made just and more advantageous and beneficial to the people of this country. There is one illustration I should like to give in support of my view not yet touched upon in this Debate and it is with regard to the contributions which are required from various sections of the wage earners in this country. I believe in the principle of contribution for all those working people who are able to earn a living, but we know perfectly well we have a large number, I believe about 4,000,000, of working people, including women as well as men, who are not able to fairly earn their own living, and if the State desires, in the interests of national health and the whole community, to carry out a certain scheme and compel everyone to come in, I think it is the duty of the State at least to consider the position of those people who cannot be said to be properly earning their living when they impose a tax upon their wages. I hope I may be in order when the time comes in trying to get an Amendment into this Bill with a view to raising the minimum exemption of 1s. 6d. in the Schedule to 2s. 6d. and the other figures up to 3s. 6d. in proportion. Such a proposal as that would increase in no way the financial obligations of the State under the amending Act, because I think probably the employer would have to bear the extra burden, and I maintain that if employers want to enjoy (he advantage, or the necessity, as it may be, of low wages, then I think such a small burden as that extra penny or twopence or threepence may well be charged upon the employer.

There is another point to which I direct attention to illustrate my dissatisfaction with this Amending Bill. There is no reference in this Bill to one of the greatest cases of hardship which I consider ought to be dealt with, and that is the effect of this Bill upon charitable institutions. By way of illustration let me mention the Church Army, and I believe the same is true also of the Salvation Army and other bodies whose one purpose is to lift the people out of the mire. In the case of the Church Army, I am told they are spending £4,000 out of their income in order to pay the taxes under the Insurance Act. My hon. Friend the Member for South Wiltshire spoke of the great disadvantage to the whole of the United Kingdom of having four separate Commissions. I think I am right in saying that in one of the Government Reports it is stated that these four Commissions cost the country £1,000,000 more than one general Commission would cost. Therefore, under this system, whatever may be said in favour of it, the fact remains that the existence of these four Commissions entails an expenditure of somewhere near £1,000,000, which I think hon. Members opposite will agree with me we could spend to very great advantage in other directions under this Act. One other interesting point arises in connection with these four Commissions. Some hon. Member made reference to the method by which payment for maternity benefit is made. In Scotland and Ireland, under the regulations of their separate Commissions, these payments may not be made on any licensed premises. I believe very strong representations have been made to the Government from time to time with regard to England and Wales that, at any rate in the case of approved societies including in their membership women and young persons, the Commissioners should preclude payment being made upon licensed premises, and, for some extraordinary reason which I cannot understand, their respective Commissioners have refused to give England and Wales what I regard as the advantage which is given in the case of Scotland and Ireland.

Mr. HODGE

It is not the case that societies pay on licensed premises in England.

Mr. COOPER

A great many, I am afraid, do. The hon. Member, perhaps, does not know.

Mr. HODGE

As secretary of an approved society of 20,000 members I do know.

Mr. COOPER

I never alleged that every society did it. I merely alleged that there are a great many, and what is worse there are some approved societies in England and Wales which admit women and young people to membership, and maternity benefit at any rate is paid over on licensed premises. The hon. Member has more to do with the working of this Act than I have, and if he tells me I am entirely wrong I will be very glad to withdraw.

Mr. HODGE

It is not the fault of the approved society.

Mr. COOPER

Very likely. But if we are to direct our view to the faults of individuals in societies, and not to the societies themselves who are to be responsible for making the alterations, we should never have need of insurance societies at all. The last point I wish to raise is with regard to medical benefit. The Preamble of the original Act lays down in explicit words that the purpose of the Act is the prevention and cure of sickness, and this purpose is to be hastened by national health insurance. I am not going to lay too much stress upon this particular point, but I want to keep it before the House. It is, I admit, rather early to begin to talk about extending the Act to the other fourteen millions of workers in this country who at the present time do not come under it. But I would point out that however great the progress of the Act may be in this country in educating and preventing the people against ill-health, unless we do at some early date consider means by which the principle we have now adopted for the workers can be extended to dependants just as is recognised to be necessary in the case of tuberculosis; if we are really to see at the end of five or six or seven years some material results for the money we are spending we will have to aim at including the dependants of the workers. On this question of medical benefit there is one matter that has arisen in which I hold the Insurance Commissioners to be greatly at fault. The Act has laid down in express words for adequate medical benefits under the Act, and in the Regulation made in the First Schedule, Part I., No. 386, we find it is laid down that—

where the condition of the patient is such as to require the services beyond the competence of the ordinary medical practitioner, the practitioner shall advise the patient as to the steps to be taken in order to obtain such treatment as his condition may require. The point I would make upon this matter, and one which I think ought to be made in this House is, that we should let the country clearly understand whether the adequate medical treatment promised right and left when the Act was introduced, and which promise is to be found in the actual wording of the Act, is carried out by the Commissioners, or whether the Commissioners by regulation are not whittling down the extent of the medical benefit promised, and are not leaving them to bear the extra burden of cost for such treatment out of their own earnings or obtain them through charitable institutions. To my mind, that is one of the things which the Commissioners; in the interests of this Act, ought to put first and foremost before the country and to see that it is adequately secured. I would like to point out the curious position in which the insured people to-day are, under the Act as it stands, when they pay their 3d. or 4d., as compared with the paupers in this country. The paupers of this country have an admirable system of infirmaries, where they can get admirable medical treatment, and if it is right for the State to provide adequate medical treatment for paupers, without any contribution or tax on wages, surely, when we come to an Insurance Act dealing with the whole of the workers of this country, it becomes, at least, as necessary that we should provide them with an equally adequate medical treatment. It is obvious to those who are working in other directions on public bodies, notably county councils or local councils, that we are getting practically a quadruple system dealing with health in this country. Hon. Gentlemen opposite often state that even a dual system such as we have to-day for education is more or less wasteful, but when we come to have a quadruple system under which we are working as regards public health, I think it is most disastrous, and the sooner the Government can see their way to deal drastically with the public health question the greater the progress we shall make, particularly in dealing with such questions as tuberculosis and the general health of the people of this country. Now we have got this Insurance Act—I may say that I voted against it, and should vote against it with pleasure to-morrow—we have got to make the best of it, and the one fundamental fault, to my mind, to-day, in the carrying out of this Act, is that the Government are too much inclined to be content with tinkering with the subject. I think they ought to concentrate their minds more and more on the prevention of disease, instead of being satisfied with curing it.

Dr. ADDISON

The hon. Member who has just spoken says he looked forward to the time when some reform of our public health system would be undertaken. Although I agree with him, I do not think that is particular material to the subject under discussion to-day. The hon. Mem- ber told us that he voted gladly against the Insurance Act, and would do so with pleasure to-morrow, and yet a great deal of his speech argued in the direction that we should bring women and children within the scope of the Insurance Act. In view of what the hon. Member said, I think that seems to be somewhat illogical. I should like to confine myself to two or three questions raised by the hon. Member for Colchester (Mr. Worthington-Evans), and the hon. Member for Sevenoaks (Mr. Forster). The former, in the beginning of his speech, said that the first Clause of this Bill really altered the general conception of the National Insurance Act. In some respects that is true, because the money voted here is in addition to the two ninths contributed under the National Insurance Act. What I was not clear about was whether he objects to this money being voted. Does he object to the House of Commons in this matter voting additional money for this or kindred purposes, because, if he does object, it means that if these purposes are to be carried out the burden must be shifted on to the approved societies? His main contention was that we ought to relieve approved societies of these burdens. Unless he is willing that the House of Commons or the Legislature shall make additional Grants, then he must, place extra burdens on the approved societies.

As a matter of fact, the hon. Member did not object because he cannot object. He knows perfectly well that if the Government have to provide these extra benefits for people over fifty, for old persons, in respect of medical benefit they must do so by additional State assistance, and we cannot expect that the financial provision made in the principal Act would meet this, and we cannot place these burdens on the societies. The hon. Member for Colchester said we ought to be very careful about being generous at other people's cost, and he referred with some complaint to the provision of full sickness benefit given to persons over the age of fifty. I think that is one of the best provisions in the whole Bill. If a man has arrived at the age of fifty, he certainly has arrived at a time when he needs all the sickness benefit he can possibly get. The hon. Member told us that in thus giving full benefits to insured persons we were departing from the general practice of friendly societies. That is quite true, but I do not quite gather whether the hon. Member objects or approves of such provision. He criticised the granting of this money and suggested that we might perhaps use the money in a better way. What better way does he suggest? That, after all, is a business proposal which I think we are entitled to look for from any critic. The only proposal the hon. Member did make was that he suggested we should give additional money towards the administrative expenses of approved societies. I think the approved societies may possibly have a substantial claim in this direction, but perhaps the hon. Member will inform us as to whether he is in favour of reducing this benefit which it is proposed to give to insured persons over the age of fifty in order to provide more administrative expenses for approved societies.

Mr. WORTHINGTON-EVANS

I said I had no objection to increased benefits, but they should not be paid for out of the funds belonging to the younger members.

Dr. ADDISON

What it now amounts to is that the hon. Member is in favour of giving less than the full sick benefit to persons over the age of fifty in order that an equivalent amount may be given towards the administrative expenses of approved societies.

Mr. WORTHINGTON-EVANS

That is not what I said.

Dr. ADDISON

The hon. Member referred to a speech of the Chancellor of the Exchequer in which he urged that this should be treated as a non-party measure. I do not know that anyone has any particular ground of complaint for his reference to the Chancellor of the Exchequer's speech, because he gave a very admirable description of what he was dealing with. I wish to quote to the House a leaflet which was issued during the by-election at Leicester, in which we were told— that £89,000 of the servants' money is given every year to new officials appointed by the Radical Government to collect the servants' insurance tax.

Mr. COOPER

Is that quotation from a Labour or a Unionist leaflet?

Dr. ADDISON

It is from a Unionist leaflet, and I have a large stock of others here. Whilst I fully sympathise with the hon. Member's suggestion that the societies may find that they want more money for administrative expenses, it is too early at this stage to know what their general average of expenditure is likely to be. Their expenses, I know, have been heavy in consequence of the initiation of this insurance scheme, but the very last part of this scheme which I should take money from would be the extra sickness benefit for old insured persons.

Mr. WORTHINGTON-EVANS

I did not suggest that.

Dr. ADDISON

I understood the hon. Member to say that he would be willing to reduce the amount to be voted for the extra sickness benefit in order to provide more money for administrative expenses of friendly societies.

Mr. WORTHINGTON-EVANS

I am not responsible for the hon. Member's understanding, and if he reads the OFFICIAL REPORT he will see that that is not what I said.

Dr. ADDISON

I think we all recognise the gravity of the statement which has been made that excessive sickness claims are being made by approved societies, and that it is likely to lead to the bankruptcy of some of them. The hon. Member for Colchester quoted some country societies, and he said that, according to the statement of accounts of some of those societies, they appeared to be greatly embarrassed by these claims. The hon. Member for the Wilton Division (Mr. Charles Bathurst)—whose interesting speech the Government must give the fairest consideration to, for everybody recognises the fair and generous criticisms he always makes—a few minutes afterwards made exactly the opposite complaint. He brought a case before the House where a rural society had only had claims upon them amounting to a little more than half of what they anticipated, and the hon. Member made a point in favour of the separation of rural societies in consequence of that. It is perfectly evident that if the society to which the hon. Member for Colchester was referring was a rural society, it was certainly in a different part of the country to the society referred to by the hon. Member for Wilton, although I should have expected that generally rural societies would be much more likely to have the experience represented by the hon. Member for Wilton than the experience stated to the House by the hon. Member for Colchester.

It is very unlikely that rural societies will present very heavy claims for sickness benefits upon their funds, and I think that a good deal of these statements are founded on newspaper reports, which are often of a very one-sided character. We have had in the course of a campaign with which we are all perfectly familiar various newspaper reports generally prejudicial to the efficient and smooth working of the Act. Those cases which are favourable to the general scheme of the Act, such as have been brought out by the hon. Member for the Wilton Division, do not receive the same amount of publicity as those which are unfavourable. As a matter of fact, as the right hon. Gentleman himself stated, the claims which have been made on these societies, so far as the first quarter is concerned, are really rather less than was anticipated. There has been a considerable amount of sickness during the past quarter, rather more than the average, and we also have to recognise that many people are being brought into the societies who are really relatively poor lives. The hon. Member for Colchester appeared to complain at the smallness of the number of deposit contributors. He seemed to complain that the approved societies have swept into their net these 2,600,000 whom he expected would be deposit contributors. I think that all who are interested in national insurance will heartily rejoice that these people have been swept into the net of the approved societies.

Mr. WORTHINGTON-EVANS

Hear, hear.

Dr. ADDISON

The hon. Member now says "Hear, hear." All I can say is that his position appears to me to be seriously illogical. He wants to be on both sides of the fence at the same time. We have had complaints that the Act does not do enough, and directly we get outside we are told that the Act is making societies bankrupt. We have Amendments moved here by the score, which would certainly make the Act bankrupt if they were adopted. On the other hand, we are told outside the number of things which the Act does not do, and which it really ought to do. I have here, for example, a record of a number of things which the Act does not do. This was published in support of the candidature of the hon. Member for East Cambridgeshire. We were told by the Unionist party that the Act has led to unemployment; that it gives no death benefit or funeral allowance; and that it gives no medical benefit to the wives and children of insured persons. Are these complaints against the Insurance Act?

Mr. COOPER

Yes.

Dr. ADDISON

I admit that the hon. Member for Walsall did vote against the Bill, and I cannot include him in this general indictment, but are these really complaints against the National Insurance Act? It certainly would be bankrupt if any one of these things were placed in it. This is nothing like the whole of the category. The next thing is that it robs the workman of his rights under the Workman's Compensation Act. Then it gives nothing to a man in a regular job, and it gives no benefit in the case of unemployment when it is caused by a strike or a lock-out or a trade dispute. When the Bill was before the House, hon. Gentlemen opposite would have been the last to suggest that National Insurance Funds should be used to aid a strike or a lock-out. It is a very remarkable procedure to issue statements of this kind, which are complaints against the Act, as to what it does not do when any one of these things put into it would necessarily make it bankrupt. Hon. Members come here to-day and say that, we are not doing enough in the Bill which we are bringing forward, whereas, if we did more, we should certainly bankrupt the whole scheme. Hon. Gentlemen opposite either object to the whole thing altogether, which one could thoroughly understand, or they do not, and neither the speech of the hon. Member for Colchester nor the leaflets to which I have referred in any way make that position clear. If the hon. Member for Colchester and his Friends would like to reduce the additional sickness benefit for people over fifty, then I sincerely hope that they will move Amendments to that effect.

These excessive claims are due to two causes. They are due in the first place to the novelty of the Act. A large number of persons for the first time in their lives have found themselves able to have medical attendance and sickness benefit. We have had a good deal said about medical men not doing their duty properly by the Act. I dare say that there may be cases to be found of medical men who are not doing their duty by the Act, though I do not know of any myself. It is quite conceivable there may be some, and, if there are, and such cases can be established, I sincerely hope that they will be dealt with with the utmost severity. The General Medical Council issued a general instruction on this question, and I hope that the Commissioners, if they can estab- lish a case, will press it through to its proper conclusion; but I think myself that there are very few of these cases. I have consulted a large number of medical men and they all say the same thing. They go round among their patients and they say that these people are not, as a matter of fact, malingering; they are really ill. Take, for instance, the case of married women. It is exactly what one with a real experience of the problem would expect to find. Large numbers of these married women, who are insured persons, are home workers, and they have never been able to have proper treatment in the whole of their lives. They have done the household work and have had to earn the family living, and they have been underfed and underpaid for years. For the first time these women when they are ill are able to receive medical attendance and sick pay and to lie in bed for a week.

One medical man told me he had made it his business to go round the whole of his female patients to ascertain whether or not there had been malingering, and he said: "I could not honestly say that any of these women, if they had been your relatives or mine, would not have been sent for six weeks' holiday." That is exactly what has happened. It is not a case of malingering with these married women. I dare say there are some cases of malingering, but, in the main, it is due to the fact that a large mass of sickness has been revealed for the first time. It is mainly due to the fact that these people have never had a chance of having sick pay before. They have gone on with their work when they ought to be resting. I have no doubt that as this fact becomes revealed it may make increased demands upon the State, but I do not think that the State could contribute to a worthier object. I am quite convinced that, whatever may be said in general, the additional sickness which has been revealed is genuine sickness in the main. It is not malingering, except in a small degree, and it is not negligence on the part of the doctors except in a very trivial degree; it is real sickness with which the Act is dealing effectively for the first time. There is one other point with which I will deal, and that is the request of the hon. Member for the Sevenoaks Division (Mr. Forster) that the Government will generally allow what is called "contracting out." I sincerely hope that the Chancellor of the Exchequer will do nothing of the kind. There is no reason at all why self-respect- ing medical men should not join the panels, and any medical man who is on the panel can give his patients a freer choice than in any other district. As a matter of fact, with the exception of London and Edinburgh, practically all the medical men are on the panel, and this question raised by the hon. Member really does not apply. It applies mainly in London and in Edinburgh, and perhaps to some small extent in one or two other places, but, as some of us warned the medical profession earlier on, contracting out is a thing which can be used in two ways. They have found that out in South Wales during the last three months, and I am quite certain that whatever scattered people may say the official organisation of the medical profession will not put forward contracting out in the future as they have done in the past.

There is no real reason for contracting out except in special cases, such as were frankly contemplated when the Amendment was introduced. Any self-respecting medical man can put his name on the list, and there are some of the very best men in the medical profession whose names are on the list. If it were not for the fact that a certain number of medical men have contracted an unholy alliance with a party in the State, we should have at least one thousand more medical men on the panel in London to-day. We had a body frankly set up to break down the medical machinery of the Act in league with the Moderate party at the recent London County Council election. It is no good hon. Members dissenting; it is an actual fact. This organisation, which was called "The London Medical Committee," gave official support to the Moderate county council candidates. We had the same organisation in the "Times" newspaper the other day setting up a Non-Panel Medical Practitioners' Association. The men who are organising this kind of opposition would not, as a matter of fact, be reconciled by anything which the Chancellor of the Exchequer could do, and, in my opinion, it is just as well to recognise it. I believe and sincerely hope the Government and the Commissioners will do everything they can to meet every reasonable and fair objection, but you cannot satisfy the people who are carrying on this agitation, and I certainly hope they will make no attempt to do so. You will not satisfy them by giving contracting out. There is only one thing which would satisfy them, and that is for the medical machinery of the Act to break down. I am perfectly certain that the hon. Member for Sevenoaks has been seriously misled in pressing this general demand—I take it he is pressing it generally—for allowing contracting out.

Mr. FORSTER

If the hon. Member thinks I have been misled, let him clearly understand what it was I said. I did not put it forward from the doctor's point of view. I am taking the patient's point of view, and the patient's point of view only, and I know there is a very real demand on the part of the patient.

Dr. ADDISON

That is the very point I was coming to. It is not in the patient's interest, and that is the very reason why the Commissioners could not approve of it on any large scale. What does it mean? The man who contracts out renders himself to some extent liable to pay for his own medical attendance, or, rather, for medical attendance which he could get free under the general scheme of the Act. If the man fairly understood the two sides of the question, there would not be so much objection to his doing it, but we find, as a matter of fact, that those who, at the instigation of the doctors, or some other persons, apply to make their own arrangements, have not, except in very few cases, the faintest conception what it means. It is not in the general interest of the mass of insured persons that they should make themselves liable to obligations in respect of medical treatment which they can obtain free by insurance under the Act. It would also take away from the Commission appointed by the Government that degree of control which they should have if there is ultimately to be co-ordinated a proper, uniform, rational, medical service.

Sir HENRY CRAIK

The last point mentioned by the speaker who has just resumed his seat, I will deal with later on. But I should like to refer to some others of the various topics raised in that very discursive speech. The hon. Gentleman seems to think he has answered all the objections that can be made to the Bill by simply saying that if we introduce these changes the Bill will break down. That is a very singular argument. He does not attempt to prove that the various points brought forward in successive speeches by the hon. Members for Wilton, Colchester, and other places, are not serious blots in the Bill, but he says that if you attempt to put right these questions in the Bill then you will break it down. Could there be a more severe condemnation of the Bill than that? I come to the speech delivered by the hon. Member for the Gorton Division (Mr. Hodge). He made some rather grave and offensive charges against the medical profession, and he followed exactly the same line of inconsistency that one observed in the speech of the right hon. Gentleman the Secretary to the Treasury. He dealt with the question of malingering. He said in one sentence that malingering was the outcome of certain conduct on the part of members of the medical profession who had forgotten their honour, their principles, and their conscientious convictions, and that had given rise to these suspicions But in the very next sentence he declared that malingering did not exist in reality at all, and that it was a great deal better a sick man should seek early medical aid and give himself a rest as soon as possible. Therefore, he said, the charge of malingering was a false calumny. But you cannot have it both ways. If you bring an accusation against the doctors, and say that they encourage malingering, and if you follow that up by saying that malingering does not exist at all, it would seem that the accusation is brought without thinking where the material for it is to be found.

The hon. Member, however, seemed to find ground for very serious criticism of the Bill. I remember the circumstances under which one point to which he objected was discussed — the question of the division of administration. The right hon. Gentleman the Chancellor of the Exchequer knew very well at that time that this division of administration would not be so very advantageous as it seemed, but under the pressure of sentiment for Home Rule this matter was pressed forward. I myself and several other hon. Members on this side resisted the division of administration as calculated to greatly increase the expenditure, and now we find the hon Member for Gorton and his colleagues, who opposed us on that occasion, have come to the conclusion, after the test of working—for the proof of the pudding is in the eating—that it has been a vast mistake, that it has given rise to great confusion, that it has cost a great deal of trouble and money to friendly societies, and that it has enormously increased the extravagantly administrative waste which has been characteristic of the working of this Act. That in itself shows that the hon. Member is ready to criticise the Bill on a good many points.

I wish rather to deal with the accusation—because it was nothing but a very grave accusation accompanied by no proof —which was brought by the Secretary to the Treasury, not only against the medical profession as a whole, but against a particular section of it in a particular county. He told us that if he could only bring forward the evidence he had in his possession, he would show that medical men in the county of Lancashire were guilty of a grave dereliction of duty and were encouraging malingering. Is that the sort of accusation that should be brought by a Minister of the Grown in his place in Parliament without producing ample proof of every word used? Many of these doctors in Lancashire are my own constituents, and I know how eager they are for their work. To bring an accusation of this sort based upon so little evidence is wrong, and I should term it an indecency on the part of a Minister of the Crown. In the very next sentence, however, the right hon. Gentleman contradicted himself. First, he said the Lancashire doctors were betraying their confidences and lowering their professional reputations by putting themselves in league with those who attempted malingering. He gave no proof that this charge of malingering has any foundation at all, but he went on to say that there was abundant evidence to prove that there was a great increase of illness during certain months to which the suggestion of malingering applied. He indicated in fact that the charge against the doctors was baseless, and that malingering did not even exist to any great extent, because there had been an epidemic of illness, which, in the right hon. Gentleman's opinion, accounted for the increased sickness, and the consequent demands upon the friendly societies.

It is perfectly plain, and I am sure the Chancellor of the Exchequer will admit it, that the working of medical relief under this Act has not been entirely satisfactory. The hon. Member for Hoxton (Dr. Addison) admitted that, and every speaker one after another has agreed that a change must be made, and that if you wish for an improvement you must ask the help, counsel, and co-operation of the medical profession. And they axe ready to give it. The right hon. Gentleman himself told me last year after some of the conferences, that we had to the best of our ability helped him to try and bring about a compromise on various points. You must have the doctor's help. But how can you expect it if you bring against the medical profession and against a particular section of that profession, charges such as the Secretary to the Treasury has brought? We know what has been the course of our experience in the carrying out of this Act. We know how we were told not only by the medical profession, but by right hon. Members opposite in August of that particular year, that we had helped and aided and been reasonable. I remember perfectly well listening to the complimentary phrases used by the right hon. Gentleman on that occasion Yet when we came back in October, we found there was to be a drastic Closure, an avoidance of discussion on all controversial points, and the hurrying through of the Bill, in order that the decks might be cleared for the Home Rule programme of the Government. That was not the way to carry out a piece of legislation like this which, above all others, required care, consideration, and the due weighing of the pros and cons of each particular detail. The right hon. Gentleman cannot think that after such treatment, after them rounding upon us, after telling us we were obstructing, after first declaring that the medical profession were reasonable in their demands, and then asserting what has been repeated by the hon. Member for Hoxton, that they would never be satisfied unless they destroyed the medical provisions of the Bill—

8.0 P.M.

Dr. ADDISON

I alluded to the particular section which was running the organisation called the London Medical Committee; I was not speaking of the medical profession generally, but of that small militant section which is decreasing every day.

Sir H. CRAIK

The militant section comprised a very large proportion of the members of the medical profession, and I do not think it is fair to those who thus expressed their views, or that it is a likely way of conciliating one's opponents to suggest that they will never be satisfied except with the complete destruction of the medical provisions of the Act. Speaking for the medical profession, some five thousand of whom I have the honour to represent—a not inconsiderable proportion of the whole medical profession in the country—speaking for them, I am perfectly certain that they are ready to listen to any reasonable attempt at compromise. They dislike the contracting system. In Lancashire they have objected to it, and one curious point about the speech of the Secretary to the Treasury was that he said that one reason for the existence of malingering in Lancashire was that they never had liked the contract system in that county and had always resisted it. But now it has been introduced, and even if they were prepared to go against their consciences, their duty, and the honour of their profession, the whole motive for doing so is gone. They are no longer seeking for private practice amongst the people who are free to choose what doctors they like. They have gone on the panel, and the implied accusation of the right hon. Gentleman that they have encouraged malingering because they hated the contract system disappears, when contract practice has actually been brought in and the free choice of doctors done away with. I am quite convinced, however, that the doctors would help in any reasonable plan. They are not impracticable or impossible people. I know from personal knowledge that they are anxious, above all things, to help their suffering fellow creatures, and I reiterate my own opinion that greater elasticity with regard to choice of doctors and in regard to the medical fee is an absolute necessity. Sooner or later the better class of working man will himself take that view, even if he has to forego the pittance you give him for medical relief. He has it embedded in his habits and in his affection for those around him that he shall have the doctor of his own choice. It is not enough to say to him, "You must take one of the doctors on the panel." No Amendment of this Act will be satisfactory until you give greater freedom of choice of medical attendants, which never had a more eloquent and fervid supporter than the Chancellor of the Exchequer when he pointed it out as one of the advantages of the Bill, but which, like many of the refreshing fruits, has vanished in the working of this Act. I am not speaking for anyone else, and I have no right to speak for the party, but I must say plainly that I am in favour of greater elasticity in regard to the whole principle of this Bill. I am an entire supporter of the proposal that you should make this a voluntary instead of a compulsory scheme. If you took a poll or a Referendum of the whole of the inhabitants of the country at this moment, you would get a vast majority in favour of the voluntary as against the compulsory principle. I have no hesitation in saying that you would have brought about the greatest benefits under this Act by the voluntary principle. I should not have hesitated to provide financial temptation that would have brought everyone within the range of the Act. You would have got in a more easy, manageable and workmanlike way all the essential benefits of this Act if you had introduced into your medical relief greater elasticity and freedom, and if you had made the principle of the Bill voluntary instead of compulsory.

Mr. ROWNTREE

I am not competent to follow the hon. Gentleman who has just spoken into all that he has said with regard to the medical profession. I only remark that it must be a matter of satisfaction to all of us that so many members of that profession have altered their views in regard to this Act, and have found in practice that many of the fears they previously expressed were unfounded, and are seeing not only that their own profession is not ruined, but that the cause of public health is being largely advanced. Those of us in this House who wish well to this Act desire that no word may be spoken here that will do anything to prevent the process of healing that is going on in the country. Neither will I follow the hon. Gentleman in regard to his wish that this should be a voluntary measure. All I will say is that those who have had any experience of matters of this kind in industrial concerns will be able to point out to the hon. Member that under a measure like this you are practically bound to have compulsion if you are going to get into the benefits of the Act many of those who need it most. I want to refer for a moment to some remarks made by hon. Gentlemen opposite with regard to the excessive sickness which the figures in many quarters with regard to the working of this Act have shown. I agree with my hon. Friend the Member for Hoxton (Dr. Addison) that while there is no doubt a certain amount of malingering going on, what accounts for this excessive sickness more than the malingering is the fact that large numbers of men and women, for the first time in their lives, are finding that they have a chance of easing off from their daily work and really trying to get well. I watched for some time the working of an experiment in a large industrial factory, where the heads of that factory came to the conclusion that when a man or woman was sick he or she should get as much money as when they were in work. In the first few months of the working of that scheme the rate of sickness went up extraordinarily, and it looked as if the sick society might become bankrupt but as the months went on the normal rate of sickness was resumed, and those who went most carefully into the facts came to the conclusion that the contention of my hon. Friend was perfectly correct, and that for the first time large numbers of men and women took the necessary time off in order to get into a robust state of health. I believe that what happened in that isolated instance which I happened to watch has been happening throughout the country. Therefore, I agree that the Government would have been unwise to have made, on six months' figures, any proposal in this Amending Bill to deal with that, question.

The Government, in the suggestion that they have made to-night of appointing a Committee in the autumn to look carefully into this question of malingering and other questions connected therewith, have taken the wise and the right course, and the result of that Committee's inquiries will be most fruitful to this House in future years. I am one of those who believe that in the natural order of events this Government or any other Government is bound, year by year, or at different periods, to bring in Amending Bills in connection with an Act like this. Experience forces it upon you. The facts you elicit, if you are going to attend to them, mean that you have to deal with them in Amending Bills. It might be a very happy thing for this country if on every 15th July an Amending Bill were introduced. Holding that view, I understand the remarks some hon. Gentlemen opposite have made as to other suggestions they would like to see incorporated in this Bill. I have great sympathy indeed with what has been said by more than one hon. Member on the opposite side when they expressed the hope that some Amendment will be made with regard to the compulsory contributions from those who are not earning a living wage. I expressed my view upon this subject when the Principal Act was before the House. I had then and I have now grave doubts as to how far this House is right in compelling by law those who are not earning a living wage to insure in this way. I should have been glad if there had been some Clause dealing with that, but I recognise, and the House must recognise, that you cannot do everything at once. The question of the right treatment of the deposit contributor will come before the House next year, and, when it does, I hope that the kindred question of those who are not receiving a living wage and yet are forced to contribute will be considered very carefully at the same time. Just because we are finding there are fewer deposit contributors than we expected it is all the more important that the question should be carefully discussed by this House.

I desire to refer to what the hon. Member for Sevenoaks (Mr. Forster) said with regard to casual labour, and the proposal with regard to it in this Bill. Personally, I believe the Government have taken the right step in giving these larger powers to the Insurance Commissioners to carry through different schemes. What is wanted in connection with casual labour is a series of experiments. It would not be possible for this House, even if it debated this question for a month, to put into an Act suggestions that would cover all cases of casual labour. I specially want to refer to one point, upon which I hope we may see an Amendment in this Bill. As it does not mean the expenditure of any more money, I hope the Chancellor of the Exchequer will give it careful consideration. I do not think we are quite fair to the wishes of the women in this measure, and just because of recent events it is all the more important that this House should consider with very great care propositions put to us by any large body of organised women in this country. I therefore hope the Government will be willing to accept one or two Amendments which the women of this country very much desire. I agree with the hon. Member for the Gorton Division (Mr. Hodge) that it would be a wise thing if the maternity benefit were considered as a benefit for the wife, and if in some way the money could be paid direct to her. I have a list of a large number of hard cases that have happened through the benefit being paid to the man and through the man using it for drink or other purposes. I know the suggestion I make will not get over every difficulty, but I believe it will do something to meet the views of the women of this country, and will safeguard the expenditure of the money on the object-for which the Act was passed.

It being a Quarter-past Eight of the clock, and there being Private Business set down by direction of the Chairman of Ways and Means, under the Standing Order No. 8, further Proceeding was postponed without Question put.