HC Deb 24 May 1922 vol 154 cc1354-75

Postponed Proceeding resumed on Amendment to Question, "That the Bill be now read a Second time."

Question again proposed. "That the word 'now' stand part of the Question."

11.0 P.M.


When the Debate was interrupted at a quarter-past eight. I was trying to get a little information in regard to what the burden on the Exchequer would he under this Bill. The trend of the Debate is rather in the direction of trying to show that the whole of this 6d. was coming out of the funds of the approved societies. So far as I understand the situation, the first plan brought forward by the Government was that the whole of the 2s. 6d. was to be paid by the contributors to the scheme. In that case the State was not going to pay the two-ninths, which is the usual proportion paid by the State in respect of contributions. The Government has now produced its second plan under which the half-crown is now to be paid by the approved societies, but the State is coming forward and is going to pay two-ninths of that amount. I want to ask what is the cost actually going to be to the State. The Ministry of Health have not asked for any sum of money towards this half-crown which is coming out of the funds of the approved societies, and under this Clause apparently there is a provision that the payment may be deferred to any date and the whole thing is going to be done by regulation in the Ministry of Health: There shall be credited to each society out of moneys provided by Parliament in such manner and at such times as may be pre6crihed by Regulations to be made by the right hon. Baronet himself. The sums are to be calculated in a certain manner, again by regulation. So far as I can see it is not going to be statutory at all. The whole of this money is going to be regulated by means of regulations of the Ministry of Health. According to the Bill, the Regulations are not to be laid on the Table of the House. There is no provision that the Regulations shall be so laid in order to give hon. Members an opportunity of reviewing them and amending them if necessary. We do not want to see Government Departments making legislation. This House and the other House are the places for making legislation. In every Act of Parliament passed during the last few years dealing with National Health Insurance and housing there has always been a Clause to the effect that Regulations under those Acts should be laid on the Table of the House, and I do not see why my right hon. Friend should bring in this Bill, which is the sequence of the other Acts in regard to National Insurance, and should leave out that most important Clause dealing with Regulations.

I should like information as to the cost. I do not know why it is to be postponed. So far as I can see, the approved societies may be out of their money for years to come. This is one of the Geddes recommendations which has not been carried out. The right hon. Gentleman has not carried out another recommendation, in regard to the Audit Department, the expense of which, rightly or wrongly, was to be paid by the approved societies and not by the State. As the right hon. Gentleman has not seen fit to effect these savings recommended by the Geddes Committee, it is all the more important that he should try to effect further economies in his Department. I cannot understand why there is no Clause in this Bill dealing with Service men. I mentioned it before and my right hon. Friend received it more or lees sympathetically, but nothing has been done. When a man joins the Army, the Navy, or the Air Force, he immediately goes out of unemployment insurance. There is no more clerical expense incurred in connection with the man until he is discharged from the service and goes back into unemployment insurance. Why cannot the same be done in regard to health insurance? It is ludicrous that sums of money should be spent in this way with respect to soldiers, sailors and airmen. It entails a great deal of clerical work and cross-accountancy between the Ministry of Health, the Army, the Navy, the Air Force and approved societies. The man gets no health insurance benefit while in the process; the only benefit is maternity benefit. Arrangements ought to be made so that on joining the Forces a man goes out of health insurance. By that means the right hon. Gentleman would get rid of a great deal of unnecessary clerical work and staff. When the men leave the Forces they could come into health insurance again, and certain credits could be put to their account.


I understand that since the introduction of this Dill an agreement has been come to with the friendly societies that the deficiency in the fund up to 1923 shall be made up, instead of by a further contribution from the members and employers, by a raid upon the unappropriated surplus fund accumulated by the various societies. I do not know whether it is a fact, but there is in the minds of members of rural societies a feeling that through better conditions of health and less sick- ness, or through some other cause, the funds accumulated by the rural societies are greater than the funds accumulated by societies made up chiefly from industrial members. I do not know whether that is so or not. I understand that from the actuarial point of view it is almost impossible to decide whether the sickness is greater in rural areas than in industrial centres. At any rate, there is a feeling in the rural population that if this unappropriated surplus fund is raided for the purpose of making up deficiencies, they will be unfairly treated. The only point I want to impress on the Minister of Health is this. We understand that this agreement has been come to in consultation with the Consultative Council. Both employers and workers in rural districts have the idea that they are not properly represented upon the Consultative Council. If this Bill becomes an Act of Parliament there will probably be a reconstitution of this Council. If that is the case I want to impress on the Minister of Health that he should take into consideration the suspicion that exists in the minds of rural workers and that in the appointment of members of the Consultative Council he should make certain that the rural societies should be amply represented.


When everything that can be said in support of this Bill has been said it is simply another example of the Government running away from a bargain. The Government have undertaken financial responsibility to the extent of £1,750,000 for the support of this fund for medical benefit, and having undertaken that financial obligation they, at the request of the Geddes Committee, propose to throw it on the approved societies. That is an accurate interpretation of the position. In addition to the £1,750,000 there is another item of £350,000 contributed by the Exchequer to the women's equalisation fund. This is going to be taken away on the ground that it is not now likely to be required. Is there anyone with knowledge of the administration of any approved society who can say that it is not likely to be required? The Geddes Committee say: It was found in practice that the sickness claims of women, especially married women, greatly exceeded the original actuarial estimate. It was on account of this fact that this £350,000 had to be provided. But later on the Geddes Committee say: In 1917 fears, which subsequent events have shown to be quite groundless, were entertained that the finances of many of the approved societies would be disastrously affected. Why were those fears removed during the period of the War? For the simple reason that most of the women of the country were recruited into the various spheres of employment. They worked at comparatively fair wages. They had not time to be sick. Everyone acquainted with the administration of approved societies knows that during the War the lowest rate of women's sickness benefit was touched; since the inception of the Health Insurance Act. That situation does not now prevail. The terrific strain imposed upon our women-folk by their labours during the War lowered their vitality considerably, and exactly the same position which prevailed in prewar days, from the point of view of the pressure of women's benefit on our approved societies, is likely to prevail in the days to come. Even now, there are direct evidences of the upward tendency of sickness benefits paid to women by the whole of the approved societies. The strain on approved societies' funds is much greater now than it was at the time of the Armistice and immediately after. There is every reason to believe that this strain upon the funds by the women, if this £350,000 be taken away, will cause a demand for sickness benefit above the normal. But, it is said, admitting that to be so, have not the approved societies fairly substantial surpluses to draw upon? Here, again, before anything drastic is done it is as well to know the conditions under which the surpluses have accrued. The Geddes Committee say: These surpluses are largely due to the War. We agree. Many of our men went overseas. They left their employment. The women-folks were roped into various occupations; employment was regular; contributions were at their maximum; there were no arrears; there were no blanks on the insurance cards. Contributions were at their maximum and the rate benefits was at the minimum. We could not help accumulating surpluses in those days. What is happening now? We hay a large number of men hack from the war. They are in a low condition of physical efficiency and are more liable to be thrown on the funds of their societies. There is much unemployment. Cards are being handed in with many blank spaces upon them. Benefit payments are increasing. The benefits paid in 1920 were considerably more than those paid in 1919. No doubt the Minister of Health will tell us that the benefits paid in 1921 were more than those paid in 1920. Benefits are going up and contributions are coming down. You have, therefore, quite a different set of circumstances from those which prevailed when the surpluses were created. If an opinion of mine does not carry sufficient weight I will quote a gentleman who is, I am told, the medical adviser to the Ministry, Sir Arthur Robinson. Speaking at an interview with the medical profession on 30th March, he said: I think, in fairness, it should be said, although the societies have, at the moment, large accrued surpluses, they are going through a difficult time, and they have extremely difficult times ahead of them. That supports, I think very effectively, the point which I have just presented. I will make the supporters of the Bill a present of the assumption that none of these considerations will arise. The surpluses are there intact, but again I suggest—assuming that to be the fact—there is no justification for making any attack upon those surpluses. What were the approved societies, and the country, led to believe was going to be clone with these funds? From every platform in the country at the inception of the National Health Insurance Scheme, people were told "Manage your societies well; look after efficient administration and when the first valuation comes round and you come out on the right side, the surplus funds will be utilised in extra benefits which the Act itself does not provide for, and those who administer the societies best will bring to themselves the greatest number of members and advantages will accrue all round." No one knows better than the Minister that the approved societies in the country to-day are making plans and in many instances carrying out schemes of additional benefit, based on the existence of these surpluses. I should have thought that the custodian of the health of the community, as personified in the Minister of Health, would desire to encourage this tendency on the part of these bodies, in the direction of improving the health of the, community by ameliorative or administrative measures. I imagine that should have the loyal and full-souled support of the right hon. Gentleman's department. Yet here we have the Minister and his department not only putting obstacles in the way, but actually assisting the Government of the day in appropriating these surplus funds for other purposes—purposes for which they were never intended. It is an astounding fact to find the Minister of Health on the side he is on in this matter.

It is urged that this call is going to be made on the surplus funds of the approved societies, but are we quite certain that every society has a surplus? We gathered from the speech of the right hon. Gentleman that no extra call would be made upon any one society or any number of approved society members. How are we going to get a proportion of this £1,750,000 from those societies which have a deficit upon their valuation? I am acquainted with a society which has a deficit upon its last valuation. I do not think it is the result of bad management, though I do not know. Anyone acquainted with insurance knows that the success of a scheme depends upon the spreading of the risks. Insure one particular section of the community and the risks become greater. I am referring to a particular industry which has its own approved society and this industry is susceptible 10 broken time for ill health and the like. Those who know the administrative work in connection with approved societies, in regard to insurance, would expect a deficit in that particular case. They have a deficit. What is going to he done? I take it that every member in that society will be called upon for half-a-crown. I invite the Minister of Health to suggest what is to be done.


When the hon. Member has finisher. I will answer.


I invite the right hon. Gentleman to tell us what will happen to this society which had a deficit at the last valuation, and how they are going to meet their contribution towards this £1,750,000. It is said also that the proposal in this Bill has the sanction and approval of the approved societies. The approved societies do not accept this consultative council as speaking in their name, and by no stretch of imagination can a Director or Chairman of a big financial or insurance corporation, because it happens to have interested its-self in National Health Insurance, be said to be speaking in any connection whatever for the members of the approved societies that he knows nothing about. We do not accept any expression from this particular body as being the voice of the approved societies. Further, even if that is so, I do not think it is a fair proposition to make when it is suggested that the approved societies of the country have agreed to their funds being raided for this money. They had a very uncomfortable alternative presented to them, and that was that they had either to agree to this money being lifted from their surplus funds, or they had to agree to an extra weekly contribution, and they took the line of least resistance. The members of the approved societies would have well understood that frontal attack, and it is very likely it would not have succeeded, but when the Minister makes a raid on their accumulated funds he comes round the corner and does not make a frontal attack, and the members do not see him coming, and they do not see him walk away with the swag, and consequently there is not that opposition from the approved societies that there would be if he made a direct demand for this contribution.

Before we touch the funds of the approved societies in this way, there are two matters in connection with the administration of this Act which require immediate attention. I have said in this House before, and I repeat it, that the connection of the large collecting societies with the national health insurance scheme has not been good for its administration.

These great collecting societies do not work this scheme because they love it, or because they want to make the best of it; they work it as a side-line to help their own business, and while that condition of things prevails in this country we shall never get the best out of the national health insurance scheme, and the sooner we can remove its administration right away from these great capitalistic, monopolistic collecting societies, the bettor it will be, not only for the Ministry of Health but for the approved societies. There is another matter that requires attention, which has been referred to twice during this discussion, in a political sense from tans side, and from another point of view by the hon. Member for North Leeds (Dr. Farquharson), and that is the operation of the medical benefit through the medium of the panel system. There is not an approved society in this country to-day that will give its blessing to this principle of panel patients, and it is carried out in a way that was never intended at the inception of this Act. Was it ever intended at the inception of the National Health Insurance Act that a doctor should have two kinds of patients—panel patients and ordinary patients? Was it seriously intended that we should walk into the surgery of a medical man and see a notice in cardboard nailed upon the wall, "Panel patients from 9 to 10," or "Panel patients Wednesdays and Fridays only"? It is an intolerable condition of affairs, and it ought not to he tolerated, but I am afraid it is rather too general in its operation. Before we can get the best out of this Act, we shall have to tackle these huge monopolistic collecting societies, and deal effectively with the question of panel patients.

It is said that this call is being made on the approved societies fund in the interests of economy. As a matter of fact, there is not any economy. We are not saving anything. We are simply taking the money from one person instead of someone else. The money is being expended just the same. True economy in these clays is not always in the actual saving of a sum of money. When you get into public health administration, if my opinion be worth anything at all, the truest economy is to be found in judicious expenditure, and where could more true economy be found than the approved societies of this country? What better avenues of economy could be secured than in spending surplus money in approved channels of administrative ameliorative work, whether in more sanatorium benefit, increased maternity benefit, dental treatment, provision of spectacles and the like, to make up for the shortcomings of the Minister of Health and his Department, and to make up for the shortcomings and the economics that are being effected on the school medical side? This is another of the lop-sided views of economy. It is not going to be an economy. The Government have no right to touch the surplus fund of the approved societies. It is not safe to do so, having regard to the prevailing conditions. We can tell the Government where economy can be effected, but it is not in the quarter where the Government are prepared to act. Their economy never moves in the direction of the pounds of the wealthy, but always in the direction of the pence of the common people.


In the earlier stages of this Debate there was considerable conflict between the Minister in charge of the Bill and my hon. and gallant Friend who moved the rejection as to what the consultative council had really decided. Be that as it may, the hon. Gentleman who has just spoken has shown clearly that the consultative council did not speak for the whole of the approved societies. It is not of the greatest importance what the consultative council did or did not decide, but it is for this House to settle whether the proposals the Minister is now making are fair and sound proposals, and based on sound finance. These arrangements are made outside this House, hut that does not relieve this House of the responsibility of deciding as to the wisdom and justice of a course recommended by any Minister. The House no doubt will recollect that only a year or two ago that the reserves of another insurance fund were raided for quite a useful purpose under the Unemployment Insurance Act. We remember well how the balance that had been accumulated were dealt with, and what disastrous results followed in the bankruptcy of that fund. The House should consider carefully whether it is not folly in the same course here; that by this raiding of sinking funds and reserves it is not rather keeping towards bankruptcy, and entirely destroying the sound financial basis of these insurance schemes. A more honest policy I submit would be for the Minister and the Department to have faced the responsibilities that they have incurred, and to have found the money for the bargains which they have made.

I see from the White Paper that the reason given for this extra charge is the arrangements that have been made with the doctors. These arrangements may have been, probably were, not excellent, but they were not made by the approved societies, but the Minister, and the Minister having made them should keep his bargain. At the same time this should not relieve him of the responsibility of keeping his bargain with the approved societies, and maintaining the basis on which these schemes were originally arranged. Reference has been made by previous Members as to the possibility of further calls upon the funds of the societies. One to ill health following on the War. There are further drains there likely in the coming year. We have been passing through a time during the year, and now too, of a period of heavy unemployment. That means that the people as a whole are not getting that nourishment and support that they require, and that we are laying up for ourselves a period when the ill health of the nation will be infinitely greater than it has been in sapped physical reserves due to bad nutrition. This depletion of reserves is against the original bargain, and we have no right to rob the funds and take money which will be required in order to maintain these services on a sound basis as an insurance scheme. I hope the Minister will reconsider this matter. In reply to the hon. Member for Spen Valley (Mr. Myers) the right hon. Gentleman said that was not going to mulct the approved societies that had no surplus. He may not take it from any particular approved society. He has told us that he is taking it from reserves that have been accumulated by the societies. It is immaterial whether the Minister robs one particular approved society or another, if he is taking it out of reserves he is taking it out of the money of the approved societies and putting on them a burden which it was never intended they should bear. Real and true finance will be to continue on the lines that it has been continued on, and not to follow blindly the advice of the Geddes Committee. Why is it that the right hon. Gentleman comes forward at this particular juncture? Why is it that when the payments to the doctors have been less? I think that this is unsound finance and I ask the House, at this time, to prevent this robbery of reserves that were intended for another purpose.


The debate has continued some considerable time, and as I have been asked a number of questions I think it is right that I should reply to some of the important points raised. We have to make economies so as to reduce the burden of taxation. I am aware that when a Minister commences to economise that he is always told that there is one subject on which he must not economise and that is the one Members are interested in, and that there are plenty of other ways in which he can economise. It has been said that I was tender for the pockets of the rich and the opposite in relation to the poorer classes—


Nobody said that!


Yes, the hon. Member for Spen Valley (Mr. Myers). Unfortunately for the hon. Gentleman's doctrines, there are too few rich men in this country to effect large results by his suggestion.


There are more now than in 1914.


There are fewer.


What about the banks?


I do not think we should benefit the approved societies if we made a raid on the banks. What really is the question with which I have been faced? I frankly admit, of course, that it would be very much more pleasant not to be faced with these troublesome and difficult problems. It would be infinitely more pleasant to me, as Minister of Health, to be working out the schemes for additional benefits of all kinds which we have at the back of our minds, and which we should all very much desire to see carried out. Unfortunately, at the moment I am not in a position to do that. We are in a condition of financial stringency, and we have to endeavour to achieve economies and reductions in taxation.

The question arises, how can these economies be carried out? There are only three methods of doing this. The first is by reducing benefits; the second is by increasing the contributions, and the third is by using some of the very large surplus funds which, fortunately, the societies have been able to accumulate (during good years, for a temporary period—and I emphasise the word "temporary"—in order to meet the difficulty. Nobody has advocated a reduction of benefits or a reduction, even, of the additional benefits that have been lately granted. I frankly admit that a proposal to increase contributions would meet with opposition, and naturally so.

The proposal to adopt the method contained in this Bill, despite all that has been said in this debate, came almost unexpectedly to me on the initiative of the Consultative Council itself. I have heard a great deal about the Consultative Council to-night which has very much surprised me. I cannot understand hon. Members who have a knowledge of the approved societies, and of their own societies, being entirely unaware either who is representing their societies on the Consultative Council or what nominees they have offered to the Ministry of Health as their representatives. All the appointments of members of the Consultative Council are the result of nominations of groups, not of the big monopolistic bodies, but of all the different classes of the Approved Societies. Their names are well known to anyone who has anything to do with the Friendly Societies or the trade unions of this country. The right hon. Member for Derby (Mr. J. H. Thomas) is himself a member of the Consultative Council. He was not present at the meeting which approved this scheme. I think it is a little hard when a member of my own Council, who is also a leader of the Labour party, comes here and opposes the scheme of a body of which he is a member. It really makes our work a little difficult. I do not claim that the Council represents every approved society, but that it represents the vast body of the great Friendly Societies and of the trade unions. After all, I am a member of no less than three Friendly Societies myself, and I have been so for many years, so I know something about Friendly Societies. If a man is a member of the Manchester Unity it is absurd to suggest that he is antagonistic to the approved societies of this country. I would ask hon. Members to go back and consult the approved societies up and down the country, and to tell me what they think. I felt, as I said in my opening remarks, that I could not possibly reduce the benefits unless the suggestion to do so came, not under pressure, but as what I might call a free and willing gift and offering. After going up and down the country they found that this scheme was accepted, and that fact remains. Really I have had no representations from those who represent the approved societies against this scheme and I cannot understand that hon. Members who have spoken against it to-day represent any recognised group of societies.

Major M. WOOD

They have not had time to consider the scheme.


They have had a good many weeks to do it.

Major WOOD

Before the societies can express an opinion on the scheme they must have a general meeting to consider it and there has been no time for that.


Is the right hon. Gentleman quite sure that the Consultative Council has made inquiries among the approved societies and got their opinion? As secretary of an approved society—and there are several more sitting on these benches—I definitely make this statement that no approach has been made to the approved societies on this matter.


Of course there are a good many approved societies—


There are hundreds.


I am a member of the Manchester Unity. Many of the societies are represented on the Consultative Council, and as far as I can ascertain all possible steps are taken to secure their opinion on the scheme. I rather resent the idea that I am putting forward views opposed to those of the Consultative Council, or that I am putting forward a policy which Members seem to think is financially unsound. I will simply say this. There has been a good deal of divergence of opinion as to the Government action, and attention has been called to differences between the report he made to the Geddes Committee and the letter written to me by Sir A. Watson. If hon. Gentlemen will read the papers carefully they will see that that divergence of opinion exists much more in imagination than in fact. Sir Alfred Watson points out to the Geddes Committee that there is not sufficient money in the surplus to meet these charges if they are to be put on to the approved societies permanently, and that if they are to be permanent there will have to be an increase of contributions. He has not diverged from that view in the letter he has written to me. I think I am bound to urge that the opinion of Sir Alfred is entitled to consideration. If hon. Members will look at the letter of Sir Alfred they will sec it is clearly stated that he would only allow the present Bill to operate till the end of 1923, and that he says that if he does not limit the amount to be taken from the surplus existing to-day by that time limit it will impair the financial stability of the existing system. I think hon. Members will readily understand why I take this view. It is of the greatest importance to millions of people who are contributing in order to receive benefits from our insurance system that they should not have any doubts as to the undoubtedly strong financial position the societies are in. I am not saying that merely for the purpose of securing a debating point in this House. I say that unless this can be done without affecting the security of the insurance scheme I would not be standing at this Table to advocate it. I hope the financial stability of the scheme will not be questioned or impaired.

The result can be seen from the figures relating to the surplus. I am fully familiar with the tendency to increased expenditure in approved societies owing to the large number of claims now made, but in spite of that I can say their position will be in no way impaired by this scheme. Hon. Members have pointed out that the surplus belongs to individual societies. That is the ease. There can be no question of pooling. It has been pointed out that a certain number of societies have no surplus and may have a deficiency, and I was asked how are you going to prevent either reducing their benefits or imposing an additional levy on the members. The answer is that we have what is known as a Central Fund which now stands at £2,000,000. This Central Fund has been accumulated in past years for the purpose of assisting societies which show a deficiency, not due to mal-administration, and it is out of this Fund that we propose to provide for those societies which on the last valuation—and they are few in number—showed a deficiency or have not a sufficient surplus for the purposes of this scheme. No member need fear that he will be called upon to pay a penny piece more if this Bill passes into law. A number of questions have been put as to where the money is to come from. My right hon. Friend the Member for Derby (Mr. Thomas) pressed this strongly and elicited from me answers which fear he did not think satisfactory. The money comes out of the Reserve Funds of the societies. The societies have Contingencies Funds to which was recently transferred £7,000,000. Then there is the non-disposable surplus from the last valuation. When it is called non-disposable it means that it was not allowed to be distributed as additional benefits. The surplus for the last valuation was very large and, of this, about £9,000,000 was allowed to be distributed in additional benefit, but nearly 18,000,000 was retained as a reserve. That and the £7,000,000 transferred from the Contingencies Funds makes the total of £15,000,000, and it is out of this that the money is to come for this Bill.

The hon. Member for the Spen Valley has commented on the £350,000 advanced to the Women's Equalisation Fund. Apparently he thinks that when women have no work to do they come down and claim sick benefit, and if one can only employ them sufficiently in factories they are never ill. We have spent money generously in getting women out of the factories into the health section. I am afraid I cannot agree with the criticisms of the hon. Member. If he will look at Sir Alfred Watson's letter he will see we are providing a million pounds of reserves value which we think will be ample to deal with this problem if it arises, in order that no further claim shall be made on the approved society. There need be no anxiety about that.

12 M.

One or two rather important questions of principle have been raised. The Government have been accused—an accusation to which we get somewhat hardened, because it is one of the easist to make—that we have once more broken pledges, which were not given, and that we are for ever tied to any scheme which is once introduced under entirely different circumstances. An hon. Member made a very rhetorical speech, reminding me of the land of his origin in which he condemned me, I believe, to be the Minister of Death. He said the original Act had been departed from. Of course he is quite wrong there. He spoke about the 9d. for 4d. That is not touched at all. What we are dealing with is some- thing a great deal more than that, and that is the increase made, not in the original Act, but in 1918. It was no part of the original Act or original bargain, if bargain you can call it. There are three parties—the State, the employer and the employed contributor. Hon. Members opposite have assumed all through the Debate that the surplus funds are the result of the contributions merely of the employed contributors. They give no credit whatsoever to the fact that the employers and the State have contributed to the surplus. They merely denounce us for taking away money which we, ourselves had paid into the fund. It is very fine from the platform point of view, but it will not do in a serious financial argument. This is a joint fund. We are not altering the philosophical principle, if there ever was any philosophy in the. Bill. [Interruption.] There has been a great deal of very valuable fruit from the Bill. What we are altering is the rates of contribution by the various parties. We are removing extra grants which we gave in a moment of affluence and which we can no longer afford. Hon. Members opposite will say, "If you had only let us get the doctors we would have got them a lot cheaper," and nastier, perhaps, "and then you would not have to find any money." I am not going back on that controversy now. There are plenty of hon. Members who know how nearly the whole scheme broke down. In spite of the denunciation of the Panel system I have yet to learn from any source any better scheme which is to be devised. I do not think it is seriously contended by any who knew anything about the old club practice in the old days that the medical service maintained in those days was really equal or superior to the practice which is being carried on to-day. I do not think that can really be seriously contended and I do not think the people who benefit from the medical service to-day would adopt the somewhat harsh attitude that some hon. Members have adopted towards the medical profession to-day. I have given that undertaking to those who represent the approved societies that when the time comes for endeavouring to arrange new terms with the medical profession I will consult them. I will attach full weight to all the views they express with their long experience. The power of deciding the terms is left with the Ministry and me, and that is a power which I cannot surrender, and if it was surrendered the Insurance Act as we know it would fall to the ground. As long as the Act which this House has passed remains in existence the responsible Minister cannot leave in other hands the settlement of the very important question of not merely the terms but the willing service and the readiness of the great medical profession. That is a full and frank explanation of the position.


Will the right hon. Baronet kindly explain why a differential rate has been made in Scotland and Wales as against England?


It is merely that in Scotland and Wales the populations are more scattered and the roads and distances are rather longer and the mileage rates work out at a higher rate than in England. It is a question very largely of the miles a doctor has to travel.

Major M. WOOD

Why should not London contribute to that as well as, say, Edinburgh?


Because Scotland has a separate fund.


Is it possible for the House to be supplied with the method of arriving at these expenses? For instance, Cardiff, where the Health Administration is the worst in Wales, is a very large city, and surely the expense there cannot be more than, say, at Liverpool.


I should be able to deal with that point a little more fully in Committee than at this late hour of the night, but it has all been worked out. It is just a mathematical calculation, and there is nothing more in the point. Another hon. Member made some very useful suggestions. His point about Army men is being considered at present, and I hope it will lead to a fruitful result. He asked what amount of money the Treasury would have to find. I think it is clear that the societies will get a two-ninths' grant. It is only a question of a postponed date. The societies are to be credited year by year for five years from 1925 onwards. I think it is £180,000 a year. When the next valuation comes they will be credited in the usual way, as they are now, with the two-ninths' grant. That will mean, with interest, that the societies will receive £800,000 or £900,000 as a grant which will be taken into account as an asset at the next valuation. We do not propose to deprive the approved societies of the Treasury grant for the reason that they have come to our assistance. Instead of keeping the money in their funds, they are paying it out in this work, and that is one of the chief reasons why the idea that we should take money from the reserve fund would have left the societies £900,000 worse off than they are under this scheme. When an important deputation came to see me with the proposal that instead of taking the money for surplus benefit we should take it out of the Reserve, I pointed out the loss the societies would incur, and they agreed with me to withdraw their proposal, which has already been considered by the Consultative Council and rejected on that very ground.


Will it be the Reserve Fund or the Reserve Balance.


The Reserve Redemption Fund. There are many points which will have to be considered carefully in Committee, and I am willing to consider any improvement that can be made. There may he a little anxiety lest this may he the beginning of incursions on funds which have been carefully hoarded by the societies, partly as a result of the meritorious work they have done. I can assure hon. Members that that is not in our minds. We want to bridge over a difficult period. I admit that this cannot be a permanent solution. The choice was between a temporary solution, and waiting to see how things would turn out in 1923, or immediately trying a solution for which the time was not really ripe, because it would have brought into a good deal of discredit, and would have damaged the approved societies and put another burden upon people who find it difficult to struggle on. Hon Members must see when the time comes that those who represent these interests are in a reasonable spirit. Some hon. Members may feel bound to go into the Lobby against the Second Reading of the Bill, and after they have demonstrated their feeling in that way I hope they will assist me in passing what will be a useful Act of Parliament.


I disclaim any responsibility for the House discussing this matter at 10 minutes past 12.0. The Labour party is accustomed to this kind of treatment. If there is any attack to be made on the working classes it is made in the early hours of the morning. When the Government wanted to decontrol the mines they kept the, miners' members here all night. When they were dealing with the wages of the agricultural labourers they did the same kind of thing. There is no other section of the House which is treated so badly as the Labour party in these matters. The right hon. Gentleman laid stress upon the fact that he had the approved societies behind him. I was very much surprised to hear that statement, and I did not credit it. I made inquiries, and found that one of the hon. Members behind me had a, communication from the Hearts of Oak Society asking Members to oppose this Bill. I do not believe that the right hon. Gentleman has the approved societies behind him. As a justification for introducing this Bill he referred to the White Paper but did not read this paragraph: Having regard to the fact that the acute and prolonged unemployment from which the industrial community is now suffering has imposed a heavy loss of contributions upon the societies, and may indirectly bring about other serious losses, it is evident that the greatest care must be exercised in the imposition of new burdens upon the societies.

In face of that warning the right hon. Gentleman brings in this Bill. He will go down to posterity as one of the greatest raiders that ever sat on the ministerial bench. He has raided the funds of Local Authorities until they are bankrupt. I make no apology for opposing this Bill at this ho6ur of the morning. If I were younger, he would not get his Bill for a very long time. In the year 1914, £11,000 was all the money paid by the Government towards maternity and child welfare schemes, and in that year the death-rate of children per thousand was 104. Through the benefits derived by the women and children from this fund, the death-rate of Children was reduced to 79 per 1,000 in 1920, and to 83 per 1,000 in 1921. By this Bill the right hon. Gentleman is sacrificing the women and children of the country on the altar of a sham economy. He has stated that the approved societies are behind the Bill. I challenge the right hon. Gentleman to name the approved societies that are in favour of the Bill.


Not Hearts of Oak!


There is no benefit in the, Bill for any of the approved societies, and they would be very simple if they were in favour of it. I hope the House will reject this Bill. It will do no credit to the Government if passed, and it will do a very serious injury to the women and the newborn children of this generation.

Question put, "That the word 'now' stand part of the Question."

The House divided Ayes, 113; Noes, 52.

Division No. 123.] AYES. [12.15 a.m.
Amery, Leopold C. M. S. Cope, Major William Greig, Colonel Sir James William
Armstrong, Henry Bruce Courthope, Lieut.-Col. George L. Grenfell, Edward Charles
Baird, Sir John Lawrence Davidson, J. C. C. (Hemel Hempstead) Guest, Capt. Rt. Hon. Frederick E.
Baldwin, Rt. Hon. Stanley Davidson, Major-General Sir J. H. Hacking, Captain Douglas H.
Balfour, George (Hampstead) Davies, Sir David Sanders (Denbigh) Hallwood, Augustine
Barlow, Sir Montague Davies, Thomas (Cirencester) Hannon, Patrick Joseph Henry
Barnston, Major Harry Doyle, N. Grattan Harmsworth, C. B. (Bedlord, Luton)
Bell, Lieut.-Col. W. C. H. (Devizes) Elliot, Capt. Walter E. (Lanark) Henderson, Lt.-Col. v. L. (Tradeston)
Betterton, Henry B. Elveden, Viscount Herbert, Dennis (Hertford, Watford)
Bird, Sir R. B. (Wolverhampton, W.) Evans, Ernest Hohler, Gerald Fitzroy
Bird, Sir William B. HI. (Chichester) Eyres-Monsell, Com. Bolton M. Hope, Sir H. (Stirling & Cl'ckm'nn, W.)
Bowyer, Captain G. W. E. Falle, Major Sir Bertram Godfray Hope, Lt.-Col. Sir 1. A. (Midlothian)
Boyd-Carpenter, Major A. Farquharson, Major A. C. Hopkinson, A. (Lancaster, Mossley)
Breese, Major Charles E. FitzRoy, Captain Hon. Edward A. Hotchkin, Captain Stafford Vere
Bridgeman, Rt. Hon. William Clive Forrest, Walter Hudson, R. M.
Brittain, Sir Harry Fremantle, Lieut.-Colonel Francis E. Inskip, Thomas Walker H.
Bruton, Sir James Ganzonl, Sir John Jones, J. T. (Carmarthen, Llanelly)
Buckley, Lieut.-Colonel A. Gee, Captain Robert Kellaway, Rt. Hon. Fredk. George
Campion, Lieut.-Colonel W. R. Gibbs, Colonel George Abraham King, Captain Henry Douglas
Carew, Charles Robert S. Gilmour, Lieut.-Colonel Sir John Lloyd-Greame, Sir p.
Casey, T. W. Green, Joseph F. (Leicester, W.) Locker-Lampson, Com. O. (H'tingd'n)
Chamberlain, Rt. Hn. J. A. (Birm., W.) Greenwood, Rt. Hon. Sir Hamar Lort-Williams, J.
Chamberlain, N. (Birm., Ladywood) Greenwood, William (Stockport) Loyd, Arthur Thomas (Abingdon)
Cotfox, Major Wm. Phillips Gregory, Holman McCurdy, Rt. Hon. Charles A.
Mackinder, Sir H. J. (Camlachie) Remer, J. R. Thorpe, Captain John Henry
Macpherson, Rt. Hon. James I. Richardson, Lt.-Col. Sir P. (Chertsey) Tryon, Major George Clement
Molson, Major John Elsdale Roberts, Rt. Hon. G. H. (Norwich) Walters, Rt. Hon. Sir John Tudor
Mond, Rt. Hon. Sir Alfred Moritz Robinson, S. (Brecon and Radnor) Wheler, Col. Granville C. H.
Moreing, Captain Algernon H. Royds, Lieut.-Colonel Edmund Williams, C. (Tavistock)
Murray, C. D. (Edinburgh) Sanders, Colonel Sir Robert Arthur Windsor, Viscount
Nail, Major Joseph Sassoon, Sir Philip Albert Gustavo D Winterton, Earl
Neal, Arthur Scott, A. M. (Glasgow, Bridgeton) Wise, Frederick
Newman, Sir B. H. S. D. L. (Exeter) Shortt, Rt, Hon. E. (N'castle-on-T.) Wood, Sir H. K. (Woolwich, West)
Parker, James Stanley, Major Hon. G. (Preston) Young, E. H. (Norwich)
Pease, Rt. Hon. Herbert Pike Steel, Major S. Strang Young, Sir Frederick W. (Swindon)
Percy, Lord Eustace (Hastings) Sturrock, J. Leng
Perkins, Walter Frank Sugden, W. H. TELLERS FOR THE AYES.—
Pickering, Colonel Emil W. Sutherland, Sir William Colonel Leslie Wilson and Mr.
Pollock, Rt. Hon. Sir Ernest Murray Thomson, Sir W. Mitchell-(Maryhill) Dudley Ward.
Adamson, Rt. Hon. William Hartshorn, Vernon Richardson, R. (Houghton-le-Spring)
Amnion, Charles George Hayday, Arthur Roberts, Frederick O. (W. Bromwich)
Banton, George Henderson, Rt. Hon. A. (Widnes) Sexton, James
Barker, G. (Monmouth, Abertillery) Hirst, G. H. Sitch, Charles H.
Barnes, Major H. (Newcastle, E.) Hogge, James Myles Smith, W. R. (Wellingborough)
Benn, Captain Wedgwood (Lelth) Holmes, J. Stanley Sutton, John Edward
Bowerman, Rt. Hon. Charles W. John, William (Rhondda, West) Swan, J. E.
Bromfield, William Jones, Morgan (Caerphilly) Thomas, Sir Robert J. (Wrexham)
Cape, Thomas Kennedy, Thomas Thomson, T. (Middlesborough, West)
Davison, J. E. (Smethwick) Kiley, James Daniel Thome, G. R. (Wolverhampton, E.)
Edwards, C (Monmouth, Bedwellty) Lawson, John James Walsh, Stephen (Lancaster, Ince)
Edwards, G. (Norfolk, South) Lunn, William Watts-Morgan, Lieut.-Col. D.
Foot, Isaac Lyle-Samuel, Alexander Wilson, James (Dudley)
Gillis, William Maclean, Neil (Glasgow, Govan) Wintringham, Margaret
Griffiths, T. (Monmouth, Pontypool) Mills, John Edmund
Grundy, T. W. Murray, Hon. A. C. (Aberdeen) TELLERS FOR THE NOES.—
Guest, J. (York, W.R., Hemsworth) Myers, Thomas Major Mackenzie Wood and Mr.
Hall, F, (York, W.R., Normanton) Naylor, Thomas Ellis Rhys Davies.
Halls, Walter Parkinson, John Allen (Wigan)

Question, "That the Bill be now read the Third time," put, and agreed to.