HC Deb 14 July 1914 vol 64 cc1871-81

In this Act and in the schedule hereto annexed the following words and expressions shall have the meaning hereby assigned to them respectively unless there be something in the subject or context repugnant to such construction (that is to say):—

"The society" shall mean the Wesleyan and General Assurance Society as incorporated by this Act;

"The existing society" shall mean the Wesleyan and General Assurance Society as existing immediately prior to the passing of this Act;

"The directors" "the chairman" "the actuary" and "the general manager" shall mean respectively the directors the person for the time being presiding on the board of directors the actuary and the general manager or (in the absence of the general manager) his assistant or (in the event of more than one person holding the appointment of actuary or general manager) the actuaries or general managers or one of the actuaries or general managers of the society all for the time being;

"The laws of the society" shall mean the provisions of this Act;

"The rules" shall mean the rules of the society for the time being in force;

"Policy" shall mean the instrument evidencing the contract by the society for the payment of any money on the happening of any contingency or event whether dependent on or connected with life or not or for the payment of any annuity and the word "assurance" shall mean such contract;

"Member" or "member of the society" shall mean a person (whether a minor or of full age) who is either insured in the existing sickness department or is an original grantee from the society of a subsisting policy of insurance in the ordinary life assurance department of which he remains the beneficial owner whether such policy was granted before or after the passing of this Act and whether the same be incumbered or not or if the grantees of any such policy be more than one the grantee nominated for that purpose by notice in writing sent to the society by all such grantees or failing such nomination the grantee whose name appears first in the policy but shall not include any person insured in the existing industrial life assurance department or in any other new department hereafter established by the society;

"Lands" shall mean and include lands houses buildings tenements messuages and hereditaments of every description or tenure and wherever situated and every vested contingent reversionary or other estate right or interest therein or issuing thereout respectively;

"Existing" shall mean existing immediately before the passing of this Act;

"The Friendly Societies Acts" shall mean the following Acts, namely, 10 Geo. IV. c. 56, 4 and 5 Will. IV. c. 40, 3 and 4 Vic. c. 73, 9 and 10 Vic. c. 27, 13 and 14 Vic. c. 115, and 17 and 18 Vic. c. 56.


I beg to move to leave out the words, "the ordinary life assurance department" ["subsisting policy of insurance in the ordinary life assurance department"] and to insert instead thereof the words "either of the life assurance departments.

I feel bound to test the feeling of the House on this essential point of my own objection to the Bill, namely, that of membership of the society. But I can assure the House that I do not intend to repeat the arguments I advanced in the general statement that I have made on the Bill. I do not think there can be any doubt that a large proportion at least of the industrial policy holders have been induced to join the society in the belief that they were to be eligible as members of the society. I am aware that agents who have canvassed on behalf of the society have contemplated that those whom they induced to join were to be recognised as members and would be able to exercise the rights of membership. Having regard to the important fact that the industrial policy holders have built up by far the larger proportion of the funds, I submit that they have a right to a share in the administration of what, after all, is their own money. In the statement issued by the promoters in support of the Bill we find, in paragraph 11, the following:—

"Under these circumstances it would be wholly wrong and would inflict a grave injury upon the 72,725 ordinary policy holders, the existing members of the society, many of whom are insured in substantial sums, and who, by attending general meetings, and by appointing the directorate, are at the present time entitled to control the society's affairs, if the membership were enlarged as proposed by introducing the 1,400,000 holders of industrial policies."

Here you have, I submit, simply a regard for the interests of the smaller section, whom we are entitled to say are mainly well-to-do persons, as against the interests of the poor industrial policy holders. Certainly we on these Benches are bound to enter an emphatic protest against the provision in the Bill in this important regard, because we claim that a proportion of these members at least—I do not need to put it any higher than that for the purposes of the case I am trying to make—have been induced to take out policies on consideration that they became members of the society and were entitled to the rights of membership. Further, there is a large sum of money invested by them in the society at stake, and it is proposed in this Bill to vest in the ordinary policy holders and the directors the absolute disposal of that huge sum. We claim in the circumstances that the industrial policy holder has a right to expect from this House that some provision shall be made to safeguard his interests. We submit that such safeguard can only take the form of laying down in the Bill that they are entitled to be regarded as members, and should, therefore, become possessed of the privileges of membership. I therefore move my first Amendment, and I may point out that as it raises the general question which we have been discussing a number of the other Amendments on the Paper are consequential upon it. That being so, I may relieve the minds of some hon. Members by stating that having tested that question, I shall not move a number of the Amendments, although there are two further points to which I shall feel bound to direct the attention of the House.


I beg to second the Amendment.

Let me assure hon. Members that we have no desire at all to waste the time of the House. I am quite sure that every hon. Member does really desire to do the right thing in the case of a Bill of this kind. Even assuming that the rights that we now desire to see established did not exist in the case of the industrial policy holders in the past, we say that surely it is a right thing for this House, when it knows that out of every twenty policy holders in this society roughly speaking nineteen are industrial policy holders, and that the vast sums which they have contributed are to be left entirely unprotected so far as their voice and vote are concerned—we say that even if it were the case in the past that this right did not exist, it is surely right for the House now to put an end to such a flagrant example of inequality. We desire to give to both sections of policy holders, the ordinary and the industrial, a proper share in the management of the society. I will not say at this moment that man for man the industrial policy holder should have an equal right with the ordinary policy holder—that would be a matter for subsequent discussion—but my friends and I do believe that this Clause ought to recognise both sets of policy holders, and remove what every member of the House must admit to be a grave and serious inequality.

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


I should like to start by saying that I have no interest in this Company, but I think I do know something about insurance matters, and, therefore, I venture to make a few remarks. The suggestion has been made that these industrial policy holders are going to lose rights and to be excluded from membership. There is no foundation whatever for this. They have never had any rights or exercised any rights, rights. They have never attended an annual meeting. They have never claimed to attend an annual meeting. They have never claimed any rights whatever. Then what benefit is going to result from a policy holder being a member? What is he going to get? Not a single thing. It would not make one penny difference to him in any shape or form if it were true. These poor people are scattered all over the country. What does membership mean? Do they take part in the annual meetings? Can they attend annual meetings at Birmingham and elect directors? The thing is preposterous. The object is not to give any benefit to these policy holders, but to enable some other people to serve their own ends by getting on to the management of this Society. As a matter of fact, the policy is absolutely clear that they are not members. They are referred on the policy to rules which make it perfectly clear that they are not members and have no voice whatever in the management. They have never been regarded as members, and have never made any claim to be members until this Bill was introduced.


Why do they not call them members?


That does not alter the position, and I want any hon. Member to show what difference it would make to one of these policy holders if they were all members.


Why exclude them?


For this reason: The ordinary policy holders founded this organisation; it was not founded as an industrial society.


They built it up, though.


Oh, no. The ordinary members opened this branch and established these policies, and the point I want to make is that the funds of the ordinary policy holders are the funds that are responsible and would be drawn upon if there were any deficiency in the industrial branch. That is why you cannot bring these other members in to manage when they are not responsible. You are going to give them power to manage and deal with the funds of the other members who are the responsible members. It would introduce endless confusion in the management to add 1,500,000 other members. How in the world could it be done? And then it has been said that the bulk of the profits come from these members. That is not true. Seventy per cent. of the profits come from the ordinary branch. And what is one object of this Bill? It is to enable the directors, although it is not part of the conditions of the policy, to give a share of the profits to the industrial members. Another thing, hon. Members have spoken as if it were usual for policy holders in insurance companies to have a voice in the management. The wealthy policy holders in this country in the main have no voice whatever in the management of the offices in which they are insured.

The great insurance offices of this country—the names of the Alliance, the Commercial Union, the North British and Mercantile, the Royal and other great insurance offices are household words—are companies, and those who take life policies in those companies have no voice whatever in the management of the companies. They do not want it, because it is no use to them, and the suggestion that, because they take policies in the concern, therefore they should have a voice in the management is a great misconception. In the great bulk of the insurance companies they have not got it, and why here? I remember that the hon. Member for one of the Divisions of Sheffield, when he spoke on this matter, excused these people for not having exercised rights on the ground of their ignorance and inexperience in business matters. Surely that also cuts another way. It is not desirable that a great concern should be put in the hands of people of great ignorance and inexperience in business matters. They would have to manage other people's money, and it would be a great injustice to the present policy holders, and to the policy holders in the ordinary section, if the management were taken out of the hands of those who are now financially responsible, and put in the hands of those not financially responsible. Therefore, I hope the House on sound commercial lines and ordinary justice will reject this Amendment.


After the speech of the right hon. Gentleman one would think that these societies must be extremely badly managed if none of the privileges, or at least the privileges we suggest members have already, have never existed. One wonders what a good deal of the literature of this society can mean. They issued quite recently an "A B C of Life Insurance," and they say:— The Wesleyan and General Assurance Society has no capital. It holds funds not exceeding £1,659.000. These funds are held in trust entirely for the benefit of policy holders. The Society has no shareholders. All profits are divided among policy holders. This favourable point enables the directors to treat their members very handsomely when they are unable to continue their membership. Thus, when an industrial policy has been in force for five years, a free paid-out policy will be granted on application being made while the insurance is in force. And on they go, and they finish up with this statement:— It is worthy of note that the amount paid back as surrender value during the last thirty years to members who were unable to keep up their payments exceeds £289,000. All that I can say is that this literature is a complete answer to the statement of the right hon. Gentleman. Either this literature is a fraud or the right hon. Gentleman's statement is not quite accurate. I leave it between him and the society to say which is right and which is wrong, but it is clear that the two things do not coincide with one another.


Will the hon. Member tell me what statement of mine is not correct?


Well, the general statement of the right hon. Gentleman that these members had never got any right—that they had no rights at all.


They have now every right that they had before. It does not deprive them of a single right.

1.0 A.M.


Right hon. Gentlemen and hon. Gentlemen who are supporting this Bill so vigorously are trying to prove too much. If there is nothing in this membership, why is the society so anxious that for the future these policy holders should not be known as members? It seems to me that the society itself placed a certain value on the title of "members" and "membership" which it is proposed now to destroy. It is rather a remarkable combination we have here to-night. I am pleased the Government did not put their Whips on for the last Division, but I notice the Opposition Whips were telling in favour of this Bill. [HON. MEMBERS: "No."] All I know is I saw a Whip of the party opposite directing Members where to go. Therefore one might assume it is almost a party matter. At any rate I do not wish to argue the matter further. I prefer to vote on it. The only thing I say about it is that if the society is so anxious to destroy the title "member" and "membership" it seems remarkable that there should be no rights attached to membership. There is another matter we shall discuss presently, where they are making inroads on the general law that applies to these institutions, but capitalist combinations do not go out of their way to abolish the title of member unless there is some advantage to themselves from doing so. If it is an advantage to the society it is a moral certainly that it is equally a disadvantage to the member to be deprived of his membership. For that reason I shall support my hon. Friend in the Lobby.


The right hon. Gentleman, the Member for Spen Valley, said nobody would lose any rights under the provisions of this Bill. Well, this much is certain, that when this Bill becomes law none of these people who at present claim to have rights as members on the ground that they are holders of industrial policies will be able to make that claim. The Bill, if it becomes law, will for ever wipe out any claim they may have to be members or to be considered members of the society.


Will the hon. Member allow me. That is not correct. The Bill reserves every existing right.


The Bill defines members of the society at considerable length, and it defines them very carefully so as to exclude holders of industrial policies. It is said the industrial policy holder has been excluded before. That is the whole question. I should have thought myself there could not have been the slightest doubt that up to the present time the holder of an industrial policy was a member of the society. It must be remembered that this society has not been an ordinary insurance society issuing policies in the way the right hon. Gentleman has just described. It has been a friendly society formed under the Friendly Societies Acts and deriving its power from the Friendly Societies Acts of 1829 and onwards. Under these Acts of Parliament the members of the society are the people who have subscribed for insurance within the society, and the management of the society is given to them. And when, in 1873 or whenever it was, this industrial branch was first formed the members who came into insurance then became members of the society and became entitled to a voice in its management. They did not lose that right because other managers of the society passed a rule first of all in 1883 excluding them from attending general meetings, and then in 1904 saying they were no longer members of the society. Nobody had any right to pass these rules, and these policy holders remained members of the society where the Act of Parliament had put them.

If you pass this Definition Clause without the Amendment suggested by the hon. Member you will deprive them for ever of the right which they might up to now have enforced, I think—and which they certainly can have tested in a court of law—in participating in the benefits which belong to members of the society. When the House comes to make up its mind as to whether these people are to be included, I ask hon. Members to consider three things; first of all the great number of industrial policy holders there are—by far the greatest number of the people in the society, and entitled to careful consideration by this House. Secondly I ask the House to consider the material it has for forming the opinion that these people were induced to come into the society on the understanding that they would be members and would have the rights of members. In the third place I ask the House to remember that there is, up to the present moment, at any rate, a doubt as to their legal position, and I ask the House not to interfere with the legal position so

as to deprive them of any rights they possess, but to leave it to the courts to decide whether they have rights as members or not. For these considerations I do hope the House will accept the Amendment, which will leave these people in the position they were in before, and which will not have the effect, which the Clause without the Amendment would undoubtedly have, of depriving them of any rights they possess.


The hon. and learned Gentleman, I am sorry to say, has not displayed in this matter his usual accuracy. One of his earlier statements, for instance, was that this was a friendly society. That is not correct. I hold in my hand a signed statement by the Chief Registrar of Friendly Societies, who says: As I have reported above, Section 1 of the Act of 1854 provides they are no longer a friendly society.


What is the date of that?


If the Chief Registrar of Friendly Societies says they are no longer a friendly society—


Give us the date.


If the Chief Registrar says they are no longer a friendly society I want the House to see how confused they are in following this legal argument. All this was gone into before the Committee. Counsel who, with all respect to the hon. and learned Gentleman (Mr. Rigby Swift), were quite able to deal with the matter, threshed this point out almost to the utter weariness of the Committee. I took the trouble to sit behind counsel and listen to what was being said, and I submit it is not fair to the House at this time to involve in these legal arguments. Whatever may be said, Clause 10 keeps the rights affected as they have been in the past. The Committee heard the case of the policy holders and therefore why try it again. I have no interest in this Company, but I am a director in a company in competition with it, and if I were to take a purely selfish point of view I would ask either the House to reject this Bill or accept the Amendment.

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

The House divided: Ayes, 96; Noes, 36.

Division No. 171.] AYES. [1.12 a.m.
Agg-Gardner, James Tynte Baldwin, Stanley Bathurst, Hon. A. B. (Glouc, E.)
Armitage, Robert Banbury, Sir Frederick George Beach, Hon. Michael Hugh Hicks
Baker, Sir Randolf L. (Dorset, N.) Barnston, Harry Bennett-Goldney, Francis
Black, Arthur W. Gretton, John O'Neill, Dr. Charles (Armagh, S.)
Boland, John Pius Guinness, Hon. Rupert (Essex, S.E.) Peel, Lieut.-Colonel R. F.
Boyle, Daniel (Mayo, North) Gulland, John William Pryce-Jones, Colonel E.
Boyton, James Hackett, John Rawlinson, John Frederick Peel
Bridgeman, William Clive Hamilton, C. G. C. (Ches., Altrincham) Reddy, Michael
Brocklehurst, W. B. Hayden, John Patrick Redmond, John E. (Waterford)
Bryce, J. Annan Helme, Sir Norval Watson Robertson, John M. (Tyneside)
Cecil, Evelyn (Aston Manor) Hope, Major J. A. (Midlothian) Roch, Walter F. (Pembroke)
Chaloner, Colonel R. G. W. Hughes, Spencer Leigh Ronaldshay, Earl of
Clough, William Hunt, Rowland Sanders, Robert Arthur
Cornwall, Sir Edwin A. Jardine, Sir J. (Roxburghshire) Smyth, Thomas F. (Leitrim, S.)
Craig, Ernest (Cheshire, Crewe) Jones, Henry Haydn (Merioneth) Stanier, Beville
Cullinan, John Jones, William (Carnarvonshire) Stanley, Hon. G. F. (Preston)
Dalrymple, Viscount Kelly, Edward Starkey, John Ralph
Davies, David (Montgomery Co.) Kilbride, Denis Talbot, Lord Edmund
Davies, Timothy (Lincs., Louth) Lane-Fox, G. R. Taylor, Theodore C. (Radcliffe)
Davies, Sir W. Howell (Bristol, S.) Lowe, Sir F. W. (Birm., Edgbaston) Thorne, G. R. (Wolverhampton)
Dawes, J. A. Lundon, Thomas Thynne, Lord Alexander
Du Pre, W. Baring Lyttelton, Hon. J. C. Webb, Henry
Elverston, Sir Harold Maclean, Donald White, J. Dundas (Glasgow, Tradeston)
Esmonde, Dr. John (Tipperary, N.) Markham, Sir Arthur Basil White, Sir Luke (Yorks, E.R.)
Eyres-Monsell, Bolton M. Marks, Sir George Croydon Whittaker, Rt. Hon. Sir Thomas P.
Falconer, James Meehan, Patrick J. (Queen's Co., Leix) Williams, Aneurin (Durham, N.W.)
Ffrench, Peter Molloy, Michael Williams, Penry (Middlesbrough)
Fiennes, Hon. Eustace Edward Munro, Rt. Hon. Robert Williams, Colonel R. (Dorset, W.)
Fisher, Rt. Hon. W. Hayes Newdegate, F. A. Worthington Evans, L.
France, Gerald Ashburner Newton, Harry Kottingham Yoxall, Sir James Henry
Ganzoni, Francis John C. Nolan, Joseph TELLERS FOR THE AYES.—Mr.
Gladstone, W. G. C. O'Brien, Patrick (Kilkenny) Booth and Mr. Amery
Goldsmith, Frank O'Kelly, Edward P. (Wicklow, W.)
Bowerman, Charles W. Jones, J. Towyn (Carmarthen, East) Raffan, Peter Wilson
Brace, William Joyce, Michael Redmond, William Archer (Tyrone, E.)
Chapple, Dr. William Allen Low, Sir F. (Norwich) Rowlands, James
Doris, William MacVeagh, Jeremiah Smith, Albert (Lancs., Clitheroe)
Duffy, William J. McGhee, Richard Sutton, John E.
Field, William Marshall, Arthur Harold Swift, Rigby
Flavin, Michael Joseph Meehan, Francis E. (Leitrim, N.) Walsh, Stephen (Lancs., Ince)
Glanville, H. J. Millar, James Duncan Whyte, A. F. (Perth)
Glazebrook, Captain Philip K. Neville, Reginald J. N. Wilkie, Alexander
Goldstone, Frank O'Sullivan, Timothy Wilson, W. T. (Westhoughton)
Hancock, J. G. Parry, Thomas H. TELLERS FOR THE NOES.—Mr.
Harvey, T. E. (Leeds, West) Pollard, Sir George H. G Roberts and Mr. John Ward.
Higham, John Sharp Pratt, J. W.

Question, "That those words be there inserted," put, and agreed to.