§ Considered in Committee.
§ [Sir DONALD MACLEAN in the Chair.]
§ Adjourned Debate resumed on Question proposed [26th November], "That it is expedient to authorise the payment out of moneys to be provided by Parliament of such additional sums as may be required for the purposes of any Act of the present Session to amend the Acts relating to National Health Insurance."—[Sir Edwin Cornwall.]
§ Question again proposed.
§ Mr. SHERWELLOn the Money Resolution of this Bill, which received its Second Reading last Friday, there is one point which I would like to bring to the attention of the Committee. The first commitment to this expenditure was made without any consultation with the House or without any intimation of policy to the House The first information that Members had of this proposed expenditure was contained in a declaration made by the Prime 2265 Minister on the 11th of October to a private deputation of representatives of approved societies, and I take this opportunity of calling attention to a practice, which has become very common on the part of Ministers of the Crown in recent months, and which really does involve a very serious departure from the traditions and practice of Governments and of this House. This House ought not to be committed or pledged in advance by any Minister of the Crown, however eminent, for certain expenditure for certain purposes, until the House itself has been consulted as to the propriety of those proposals. I cannot help thinking that these instances, of which there have been so many recently, where Ministers by declarations to private deputations commit this House to expenditure, practically mean that when legislative proposals are placed before the House the hands of Members are tied in advance. I sincerely hope that we may not have a recurrence of these quite recent practices, and that Ministers will not commit Parliament and the country to sweeping forms of expenditure until Parliament has been consulted.
§ 4.0 P.M.
§ Colonel GODFREY COLLINSI want to ask the hon. Baronet (Sir E. Cornwall) one or two questions connected with this Financial Resolution. We appreciate the information which he has placed before the House, not only before the introduction of this Bill, but in his speech last Friday, and we recognise that his attitude in these two matters is in striking contract to the attitude of many other Ministers during the last twelve months, who, in coming forward to ask for public money, have given the House little or no information. As I understand it, the object of the Government in this Resolution is to readjust the financial machinery of the original Act, so as to maintain the solvency of certain societies. They do that by two methods. The repayment period, which was from 1913 to 1932, is to be postponed until 1947. By a simple book-keeping entry, therefore, they disbursed as income money which in the ordinary way would have been placed on one side to wipe out this balance. It is always easy by a simple piece of book-keeping to treat as income money which has been set aside for capital purposes. I regret that the Government have taken this simple method to get over an awkward position. One would have thought, in view of the daily increase of our National Debt, that they would have 2266 endeavoured to safeguard the interests of the insured person by not postponing the redemption period for another fifteen years. The redemption period to-day is more distant than it was under the original Act. The hon. Baronet told us on Friday that the various amounts of benefit which were disbursed amount to £12,750,000 a year. The administration expenses amount to £22,250,000; in other words, for every 20s. which is paid out the cost of paying it is 3s. 4d. I think that that far exceeds the original estimate. Whether that be so or not, it should not cost the insured person, or in other words the State, 3s. 4d. to have £1 disbursed. Included in the £12,750,000 benefits is a sum of £4,750,000 for medical benefits. Medical benefit is not nearly so expensive to administer as the other benefits under the Act, and if we take as the general average for administering medical benefit half of that which is paid for administering other benefits, the result is that for every 20s. paid out for benefits, excluding medical benefit, the cost of administration is 4s. 6d. I do not wish to trouble the House with the figures, which I can give if challenged to justify what I have said.
§ The DEPUTY-CHAIRMAN (Sir D. Maclean)The hon. and gallant Member seems now to be going into matters which were really covered by the Second Reading of the Bill.
§ Colonel COLLINSMy point at the end will be that instead of the Government coming to this House to ask for more public money, they should have taken steps to simplify the administration of the Act and so safeguard public money by their action. That is the only object that I have in rising this afternoon. The House has been asked to vote a considerable sum of money for national insurance. My argument is to show that instead of the hon. Baronet coming to this House and asking for public money during this period of the War, when employment is more plentiful than at any other period in our history, he should readjust the administrative expenses of the original Act so as to safeguard the interests of the insured person and also the interests of the public purse. Undoubtedly during the next few years we are going to be asked to pass several measures dealing with State control This at any rate is a sample of State 2267 management and State administration over a period of years, and undoubtedly the expenses under the Act take from the insured person money which otherwise would be spent for his benefit. The hon. Baronet said on Friday that this Bill would simplify the working of the Act. He did not say what saving he expected to effect. I hope that he will give us some assurance that the administrative expense of 3s. 4d. for every 20s. disbursed will be reduced, and that the benefits under the Act will go for the benefit of the insured person.
§ Sir F. BANBURYThe form in which this Motion is drafted is the ordinary form in which all these Motions have been drafted from time immemorial, that is to say, it is in a form which gives to the Government unlimited power to raise any sums of money for the particular purpose mentioned in the Motion. I have always objected to that, because I have always held that it is not wise, even at this period of the Bill, to give unlimited powers to any Government. I am not alluding to the particular Government; I am alluding to Governments as a whole. On many occasions I have proposed limiting Amendments which sometimes have been carried and sometimes have been defeated. I was not present on Friday, and if I ask the hon. Gentleman a question which he has already answered I apologise for doing so, and hope he will tell me that the qustion has been answered already. We are now in a very exceptional position with regard to finance. We have to find enormous sums of money to enable us to continue the War, and we have, in addition, very much to my regret, large sums being spent by the Government upon matters which, in my opinion, are not connected with the War. Now we have this Resolution, which proposes to spend an unknown sum upon national health insurance. It would be out of order to go into the question of the rights or wrongs of the National Insurance Act, but it is open to me to say that we have found in the past that all the statements of the Government as to the financial results of that Act have been falsified. I do not for a moment say that the Government deliberately or intentionally deceived the House, but they did make certain statements as to the financial results of this Act which statements have 2268 not been realised. I do not blame the Government for that, because my experience, which is considerable, of insurance schemes is that invariably the statements of the people who initiate the schemes as to their financial results turn out to be wrong. The actuaries have always made certain statements which have never been realised at the time. In view of the necessity of providing large sums of money for carrying on the War, ought not we to know what the Government think they are going to spend if we give them this Resolution? As far as I know, no detailed statement was given of that sum.
§ Sir E. CORNWALL(Comptroller of the Household) indicated dissent.
§ Sir F. BANBURYThen I have nothing more to say on that. Perhaps, when the hon. Member speaks, he might repeat the statement for the benefit of those who were not here on Friday.
§ Mr. WATTI desire to say one or two words of criticism of the excessive expenditure in managing this Department. As my hon. Friend has told us, the benefits that have been distributed have amounted to the large sum of £12,750,000, while the cost of distributing them has been £2,250,000, and the hon. Member for Greenock has also pointed out that the cost of administering these benefits is 3s. 4d. in the £.
§ Mr. WATTI understand that these are the figures for 1916. They are per annum. There is part of these benefits, namely, the payment to the doctors, which would be administered at a cheaper figure. One could hardly imagine the expense incurred by the Department in making these simple payments. An expert friend of mine has indicated that £400,000 is the amount of expense incurred by the Departments in paying the money direct to the doctor. If that were deducted from the administration expenses, and if you deduct the £4,750,000 which the doctors got, we see this sad fact, that for the administration of £8,000,000 of benefit the expenses of the Department would be £1,850,000—that is, 4s. 6d. in the £. That is entirely money which is utilised for the payment of clerks, office expenses, and so on, in the payment of 20s. of benefit. 2269 This Bill, I understand, is based upon what is known as the Ryan Report, and .yet the—
§ The DEPUTY-CHAIRMANMay I remind the hon. Member that the Second Reading has been carried?
§ Mr. WATTThe point is this: My hon. Friend, who is in charge of this Resolution, has the most expensive Department in the State, and in that Department the cost of administering £1 comes to 4s. 6d. I hope that he will give to the Committee some indication how this has come about, and that it is his intention to administer it in a cheaper fashion in the ensuing year.
§ Mr. RENDALLI wish to add one or two remarks to those which have already been made by hon. Members. It seems to me that we find ourselves in a somewhat difficult position in dealing with the finance of measures, because the Minister comes down with a Bill which is already an agreed Bill, all its financial provisions having been agreed for all sorts of different purposes. Members of this House have the right to know for what the sum asked for is required, and I think the Minister might have taken the House of Commons into his confidence a little bit earlier and that he might have found some opportunity under the Rules of Procedure in this House of informing us about these various proposals that are being considered and what is likely to be the liability, seeing that a large amount is to be thrown upon taxation. I trust that the hon. Baronet will be able to afford some explanation—though it cannot be satisfactory, yet may be partially satisfactory—as to what he honestly, no doubt, considers to be very good purposes that ought to be achieved. Why could he not have done that more openly, and why has he not taken Members into his confidence earlier before committing and tying the House? I think the hon. Baronet ought to give some explanation. As regards the point raised by my hon. Friends as to the administration of expenses, I think they do not make allowance for the extraordinary difficulties which this national insurance scheme, at the outset, had to face. After all, we were starting a brand-new insurance scheme, which had to be worked in association with friendly societies and their branches all over the country, managed by different persons, and many of them managed badly, with the result that there was an 2270 extraordinarily difficult task to be discharged in trying to work with these innumerable bodies.
§ The DEPUTY-CHAIRMANThe hon. Member is now going into a Second Reading discussion.
§ Mr. RENDALLYou allowed, Sir, the point about 4s. 6d. to be discussed, and I was desirous of showing the reason why that amount was necessary, and I would point out that the expenditure was never under control of the Insurance Commissioners, or of the hon. Baronet at all, and it is not quite fair to deal with a point in regard to expenses over which the hon. Baronet had no power at all.
§ Sir E. CORNWALLAs to the point raised by my hon. Friend the Member for Huddersfield, I think the fact that the Second Reading of the Bill was passed without a Division is some answer to the observations which he made. With regard to the remarks of the hon. Member for Grenock (Colonel Godfrey Collins), he went into questions which I think were mainly Second Reading points and which can be considered in Committee, but not on the Financial Resolution, which after all is a formal stage in our proceedings and not a stage for general discussion. The hon. and gallant Gentleman laid special stress on the cost of administration, as also did other hon. Members. Perhaps it was a mistake on my part to give the figures as to administration expenses on Friday without giving some further explanation. I admit that on merely glancing at the figures they look large, but closer examination shows that the expense of administering national health insurance is not excessive. I shall be very glad to deal with the matter in Committee, when there will be some opportunity of looking into the question of administration expenses; but the House must remember that we are dealing with matters affecting 15,000,000 insured persons, that we are dealing with weekly contributions and weekly payments of sickness benefit together with all the other complications which come in, and, in dealing with such a huge mass of insured persons, it will be seen that you cannot do that in the same way as you would administer insurance funds, carrying perhaps large premiums and large insurances. I am informed that the cost of administration expenses is 13.7 per cent., or 2s. 8d. in the £1 on the contribution income. This is not the time to go into a full argument 2271 on this point, but I only mention it because it is a fair subject to be opened up by the House for further examination. The cost of administration expenses is not at all excessive, and may be regarded as a very reasonable percentage. With regard to the other point raised, namely, the question of simplification, that is a part of the Bill, many Clauses of which deal with it, so that it should, to a considerable extent, help us to minimise expenses. My right hon. Friend the Member for the City of London asked me whether I would give some explanation as to the amount which is involved. I did give an explanation on Friday, but no one knows better than does the right hon. Baronet that the Financial Resolution is generally wider than the Bill itself; it is a Resolution covering such sums as may be required. On Friday I gave a full explanation of this financial proposal, but I think perhaps it may be in order if I give some further response to my right hon. Friend the Member for the City to what I think is the fair question he puts to me—first, for what purpose the money is required, and secondly, to what extent that money is required. Those, I understand, are the two precise points with which he wishes me to deal.
§ The DEPUTY-CHAIRMANIf I allowed the hon. Member to go into those points, it would clearly open up a full Debate on the whole Bill. The right hon. Baronet the Member for the City of London asked for a general idea of the amount.
§ Sir F. BANBURYOn the point of Order. Is it in order to ask how much money is going to be spent under the Financial Resolution before the Committee decides whether or not to vote the money? That is all I ask, and also the purposes for which that money is going to be spent.
§ Sir E. CORNWALLI quite agree that I must reply in a sentence or so. If hon. Members will look at the Bill, they will see that the two funds for which money is required are the women's equalisation fund and the special risks fund. As to the women's equalisation fund, I explained it on Friday. It is to meet the abnormal claims falling upon approved societies in respect of employed married women's sickness and pregnancy sickness. Clause 4, Sub-section (1), deals with the special risks fund, the purpose of which may be 2272 briefly stated as meeting abnormal expenditure arising from an undue proportion of members in particular societies living in unhealthy surroundings and engaged in hazardous and unhealthy occupations. Then there is the question of the amount of money required. The Bill provides for a Grant not exceeding 8s. per member per annum for each married woman member. The present estimated number of married women is 630,000, and that represents about £250,000 per annum. For the special risks fund the Bill provides for a Grant of £150,000 per annum to be distributed to approved societies needing assistance by reason of their membership being of the character I have mentioned—that is, being in unhealthy occupations. No one realises more than I do the enormous strain on the country's resources due to the War, and I think the need in this instance is emphasised by the War, and that the Bill may be looked upon as a war measure. Our duty at a time like this is to deal with excessive sickness—
§ The DEPUTY-CHAIRMANThe hon. Gentleman is now entering upon a Second. Reading discussion.
§ Sir E. CORNWALLI will not say more, save to ask the House to pass this Financial Resolution, and thus enable the Committee upstairs to proceed with the measure. Without this Resolution the Committee cannot enter upon its labours.
Question put, and agreed to; Resolution to be reported upon Monday next.