HC Deb 14 April 1926 vol 194 cc209-47

Resolution reported, That, for the purposes of any Act of the present Session to make provision for reducing in respect of certain services the charges on public funds and for increasing, by means of the payment into the Exchequer of certain sums and otherwise, the funds available for meeting such charges, and to amend accordingly the Law relating to national health insurance and certain other matters and for purposes related or incidental thereto, it is expedient to amend Section fifty-nine of the National Health Insurance Act, 1924, by repealing the words other than additional benefits ' in paragraph (e) of Sub-section (1) thereof and to authorise the payment out of moneys provided by Parliament of such additional sums as may he required for the purpose of defraying the proper proportion of the costs of any additional benefits to which men of the Forces may under the said Act become entitled out of the Navy, Army, and Air Force Insurance Fund.

Resolution read a Second time.

Motion made, and Question proposed."That this House doth agree with the Committee in the said Resolution."

Mr. RAMSAY MacDONALD

May I, first of all, ask for your guidance. Mr. Speaker? The Resolution we are now to discuss was No. 1 on the Order Paper yesterday, and, after it, there was a second one, which was discussed in Committee of Ways and Means. The Chairman of Committees, very much, I think, for the convenience of the Committee, and, if I might say so, for his own convenience as well, decided that the two Resolutions should be debated together, the understanding being that after the Debate, ranging over both Resolutions, upon the first being put to the Committee there should be no separate debate on the second. As the two are rather difficult to keep separate, I think, in the Debate, and as it is very undesirable that in debating one, and straying on to the ground of the other, you should be continually compelled to call a Member to Order, may I suggest, and ask you to agree, if you will, to allow us, the same latitude under the same conditions as we were allowed yesterday, so that we can debate both Resolutions together, and then, when the time comes for a division, the other be put without further debate?

Sir JOHN SIMON

May I say, on behalf of myself and my hon. Friends, that I entirely agree with the Leader of the Opposition. As far as we are concerned, we think that course would be convenient.

Mr. SPEAKER

It seems to me a very reasonable request. The two Resolutions are so interlocked that it would be impossible to keep within the rules of Order between one and the other. Therefore, I accept the suggestion made by the Leader of the Opposition.

Mr. MacDONALD

I listened with very strange feelings to the Debate that took place yesterday. As I sat in my place here and heard the Secretary of State for War and two of his colleagues—because there was a self-denying ordinance, apparently, imposed upon their followers opposite—explaining their views, I really wondered if I were attending a meeting of the Soviets in Moscow. The arguments were exactly the same as one would expect to hear there when they are confiscating private property. The point of view was precisely the same. The State is in need, and the State in need dominates everything else. In fact, there was a most significant smack of that old Prussian Professor Trietsche in the arguments which the Minister of War produced, and the effect is going to be the same—confiscation of private property by a Government who have got a majority in the House of Commons behind them. As I watched, and the minutes ran into the hours, and the gloom on the faces of hon. Members opposite got deeper and deeper, I was not at all surprised. The fact of the matter is that this country is in a peculiar position at the present time. It has got a Jacobin, who happens to be Chancellor of the Exchequer, and as he wants to balance his Budget next year, he is adopting the principles of the policy of Lenin. He has persuaded the Minister of Health to take the position of Zinovieff and he is asking the Secretary of State for War, who is doing his very best—and yesterday, I am bound to say, he did it with some success—to fill the shoes of Mr. Trotsky. He and his supporters did their best. I compliment him on it. I listened, I think, to all the speeches he delivered yesterday, and he did his level best with the utmost limits of success to make the nationalisation of wealth fairly decent.

How did he try to do it? He said, first of all, they were dealing with the Navy, Army and Air Force Insurance Fund, which was different from the funds of approved societies. That is not true; that is not the case. The Navy, Army and Air Force Fund in its nature, in its features, in its origin, in its composition, in its structure, in its object is precisely the same as the ordinary approved society. There is no difference whatever. Originally, it was a tripartite fund. It was laid down quite specifically, when this fund was created, that it was to apply to the soldier and sailor—the airman was not in existence then—in exactly the same way that the approved society fund was to apply to the civilian. If there be any doubt about that, I think it can be removed by the statement made by the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) when Chancellor of the Exchequer. He said on the 7th November, 1911: This is the plan. The soldier and the sailor will pay 1½d., instead of 2d. The reason for that, however, is not that there is anything special, but there were certain benefits that were to be ensured if the 2d. were given as part of the soldier's and sailor's pay. There was no difference at all. It was that in the previous contract with the War Office and the Admiralty the soldier and the sailor enjoyed certain benefits for which the civilian had to ensure himself under the Bill as it stood— The soldier and the sailor will pay 1½d. instead of 2d. The Admiralty and the War Office, who are in the position of employers, will also pay 1½d. or its equivalent. I will come to that point later on. Then, of course, the State will pay two-ninths of the benefits exactly as they do in the ease of any other insured person."—[OFFICIAL REPORT, 7th November, 1911; cols. 1490–1, Vol. 30.] That is the creation of the contract. There you have the three parties. There was no mixing up of the double State payment. It is important that the House should remember that. There was no question of the soldier paying so much and the State paying so much. There was no question of the sailor or the soldier paying so much and the Admiralty or the War Office paying so much. No; the authors of the scheme drafted on to the soldier's and the sailor's case and their benefits precisely the same idea, and created precisely the same kind of fund as they were creating by the approved societies and the insured civilian, the soldier and sailor taking the position of the workman, the Admiralty and the War Office taking the position of the employer, and then those two, having paid their insured quota, the State, apart from the War Office and the Admiralty, as the third party in the contract, come in and pay to them its two-ninths. That is the position of the Fund. It is exactly in the same position as the ordinary civilian fund, and the Government cannot get out of it. It is perfectly true that in 1920 there was a certain change made in the way in which the payment was to be made, but that change was merely a change for convenience, and there was no change in the character of the Fund.

Let the House remember what has happened. The War Office and the Admiralty were readjusting the conditions of the men they employed, and in engaging them they said,"Instead of asking you to pay 1½d. as before we are going to improve your conditions to this extent amongst others."Other changes took place. They said to them."We are going to pay this 1½d. for you, and it is part and parcel of the inducement we give you to become a member of the Army or the Navy: but so far as the obligations are concerned the tripartite agreement remains precisely the same."It is precisely the same change which an employer would make who wished to contract with a building labourer who was working for another employer. He would say to him,"I will pay you exactly the same wages, but instead of deducting your health insurance from your wages I will provide the stamps myself. ' That is precisely the position of these men. Therefore, when the right hon. Gentleman tries first of all to justify his nationalisation of private property in the interests of the State, as he does in the two Resolutions now before the House, he does it by trying to give the House to understand that this is a special fund, whereas as a matter of fact it is precisely the same as the accumulations of the ordinary approved societies.

There is one other matter to which I should like to draw the attention of the House. It is perfectly clear that if the Chancellor of the Exchequer had not been afraid to do it he would have invaded the actual surpluses of the approved societies. Why is he invading this surplus? Why does he say to the Hearts of Oak Friendly Society or other societies,"This is the extent of my invasion and I am only going to stop paying according to my contract. If you have £1,000,000 or £2,000,000 in reserve I am not going to touch that actually, but my proposal is going to operate in the future, but I am now going to leave you exactly as you stand with regard to your pool."When the right hon. Gentleman is dealing with smaller societies, such as those connected with the soldiers and sailors and the members of the Air Force, he says,"I am not going to be content with that, but I am going to put my hand into your pool and take from it an accumulation of £1,100,000."

I have been trying to find out why that is being done. There is absolutely no ground whatever for it except the most miserable attempt to differentiate between this Fund and the funds of other approved societies, which cannot be substantiated by anyone. I ask hon. Members who are really interested in this subject to read the Debates in Volume XXX of the OFFICIAL REPORT for 1911, and they will find there exactly the same sort of societies with certain small modifications in detail which were necessary to make the scheme applicable to Army and Navy men; hut so far as the essential features are concerned, and so far as the idea of the tripartite partnership is concerned, the War Office was not to be the State and the Admiralty was not to be the State, but the War Office and the Admiralty were to be employers and the State came in above them as the third party to the contract. So far as the essential features are concerned, precisely the same conditions prevail, and so far as the application of any categories justify private property, those categories apply with precisely the same force and in the same way as they apply to the approved societies. I know the right hon. Gentleman has tried to prove otherwise, but he must fail in the opinion of anybody who has read the Debates to which I have referred because there hon. Members will find the exact organisations of this society. Why are the Government doing this? I find a very interesting observation recorded in the OFFICIAL REPORT in 1911 by a speaker who, I am sure, the House will not regard as a mean authority on insurance. I mean the present Secretary of State for War. He was putting in a plea that this Fund as originally devised should be devised with more generosity, and he said: Before I do that I want to remind the Committee that there are many thousands of men serving in the Army and the Navy who, as they are under discipline, cannot agitate for themselves, and have not been able to take part in the deputations to and interviews with the Chancellor of the Exchequer from time to time. The right hon. Gentleman has never given these men a chance of doing that. He has not yet even set up the Committee which he ought to have set up to consider this question.

The SECRETARY of STATE for WAR (Sir Laming Worthington-Evans)

The right hon. Gentleman was not present when I replied. I have already stated that the Committee was set up, and it is dealing with the question of benefits. The Committee has done everything for which it was set up.

4.0 P.M.

Mr. MacDONALD

I absolutely accept that statement. I heard the right hon. Gentleman speak once or twice but, apparently, I was out at that I time. I apologise. I believe others have something to say on that line, but, as far as I am concerned, there it ends. The comment that I was going to make will not be made. He goes on: Neither have they been able to appear in the Lobby of the House of Commons or to approach Members of Parliament, for they have no organisation. It is true that one of the friendly societies in which Service men are enrolled has written to the right hon. Gentleman, but the majority of the Service men have had no spokesman at all in connection with this Clause. Therefore, it is all the more necessary"— and this is the green part of that twig— for the Committee to be, not only strictly fair, but even a little generous; and, if there is any question of doubt, it should be given on the side of the soldier or sailor, and not of the Treasury."—[OFFICIAL REPORT, 7th November, 1911; col. 1994, Vol. 30.] There is his statement of 1911, and to-clay this is his generosity. In the first Resolution, he says:"We are going to extend the limit of benefits provided for in the existing law until they become the same benefits as civilians get under the ordinary approved society."That amounts to an average of £3,000 a year, and we may capitalise it at £60,000, or something like that. That is the feather which he puts in his cap, and I am quite willing to help him put it there. By the second Resolution, which you, Sir, will proceed to put as soon as we have divided on the first Resolution, he is taking £1,100,000, and he regards himself as being a generous man. Now we know what to expect from a Tory Government when it raids labour accumulations of property. If it leaves £60,000 in a fund while taking £1,100,000 away, then it is to be regarded as a generous Government so far as that fund is concerned. I am glad to say that I have different ideas of generosity from those which the right hon. Gentleman appears to possess. He tried to make another shift. He said:"I could have done this in another way. It was unnecessary for me to have raided the Fund. I could have left the money in the Fund and then I could have ceased to pay my contribution to it"—well, a rather dishonest expedient. Supposing he is right, what does it mean? It means that he is going to keep the soldier, and sailor and airman paying to the Fund while he himself does not pay to it at all. That is a very bright example of generosity on the part of the Government."I am in a position to throw off my responsibility. I believe that by the wording of a certain Section I can say that my responsibility begins and ends when the Fund is sound financially, and, as the Fund is sound financially, I can fulfil my 1911 contract by saying to the soldier and sailor and airman, ' You go on paying for your benefits, but, for myself, I shall pay nothing more until the £1,000,000 has been exhausted.'"That is a very nice Tory example of common Government honesty.

But he is not right. He is not contributing of his own free will. He is carrying out the statutory obligation. He has got a double obligation. He has got the obligation to pay his quota, and he has got the obligation to see that the Fund is solvent, and, when the Fund is solvent, he is not in a position to throw off the responsibility imposed upon him by Section 57. Section 57 is an obligation independently of the fact whether the Fund is solvent or insolvent. I am not sure whether the right hon. Gentleman himself did, but a good many Members in 1911 held the view that actuarily the Fund as it was then being created was unsound, because the Treasury at the time told us that they had no figures upon which they could calculate the risks of the Fund. The Fund was to be chargeable with what one may call without disrespect, the old crocks, the men whom no society with a free will to choose its members would accept, because the risks were so great that the insurance money did not really cover them, This Fund was going to be chargeable with the whole lot. All the rejects were to come on to it. I remember the Debates perfectly well, and it was pressed upon my right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George) who was then Chancellor of the Exchequer, again and again that a guarantee should be given to those men that the Fund would be a sound one. That was how this Section came to be put in at all. It was never put in to enable the Minister of War or the Chancellor of the Exchequer, when it was proved that the Fund was solvent, to say,"I have no obligation to you at all"

That was never the intention of the House of Commons, and nobody who was present during those Debates, as the right hon. Gentleman was, could for a moment get up in this year 1926 and say that it was. The intention was that it should be a supplementary obligation. If after the Secretary of State for War and the Admiralty had paid their contributions, after the contributions had been deducted from the men—1½d., as they then were—and after the State had given its two-ninths, the specially disabled men, the wasted physiques, found that they were drawing more from the Fund than was being poured into it, then, the Committee of 1911 said,"We want to be perfectly certain that justice is being done to those men, and we do not want the Government to be able to say, we have fulfilled our obligations when we have paid our quota '"The House of Commons, therefore, insisted on that further Section being put in, whereby, if the Fund was not solvent, the Government would then come in and make it solvent. These words are now being twisted by a Government in need to-day. When Moscow comes into the blood, it is a very poisonous virus, I can assure you. When the State becomes so full of cupidity that whenever there are a few pounds lying about it must grab them, well the arguments in favour of the grabbing and as justifying the grabbing become very extreme, very absurd, and very dishonest. An argument that is put up to-day, that in 1911 or in 1924 this House, or a Committee of this House, ever meant that the Government when it found the Fund solvent should cease its payment is not an honest argument. What is more, I do not think it possible, supposing that were the decision to deal with it in that way without legislation. The Government would be bound to come here for legislation enabling them to shirk their obligations; otherwise, they would be bound to continue their quota. They are not paying of their own free will, but they are carrying out their obligations.

What is the conclusion? The conclusion, first of all, is that the money is not their's. The £1,100,000 that it is proposed to take by the second Resolution is not their's, and those who are going to support them are doing precisely the same kind of act as if they were assisting them to pass legislation empowering Parliament to take the surpluses at the banks of every hon. Member here. I can see the tremendous support which hon. Members to-day are going to give to the most extreme Communists in this country. Let them make no doubt about it; they are the Communists' greatest supporters. The Government have started it, the Government are pressing it, and the Government are going to put on their Whips to compel the majority of hon. Members this afternoon to say:"We are going to confiscate; we are going to lay our hands upon £1,100,000 which does not belong to us"—which does not belong to the State, except in precisely the same significance as you can say that every halfpenny which I own and every halfpenny which any other hon. Member owns belongs to the State. If you use language in that loose kind of way, then you are perfectly right in voting for this Resolution. [An HON. MEMBER"Who owns it?"] It belongs to the society which was created under the Act. It belongs to the corporate society known, I think, as the Navy, Army and Air Force Institutes —[Interruption].

Sir L. WORTHINGTON-EVANS

It is a fund.

Mr. MacDONALD

That is very significant. We are informed that it is a fund.—

Mr. BLUNDELL

Would the right hon. Gentleman say to whom he says this money does belong?

Mr. MacDONALD

I say it belongs to a fund—

Mr. BLUNDELL

The right hon. Gentleman said it belonged to a society.

Mr. MacDONALD

Or a society; but I am not using the words in that loose sort of way at all. It belongs to the body that is insured by the fund, and that pays its contributions to the fund. That body is a tripartite body. It is the men, it is the Admiralty and the War Office, and it is the State; and no change can take place in the partition of the fund without the consent of the three bodies. If this House imagines it can do that without the consent of the three bodies, then the argument I have put forward is perfectly sound, that this House, by the decision of a majority of its Members, can forfeit property that belongs to other people, either individually or corporately, and appropriate it to its own use. That is what the Government are doing. There is no talk about a fund. Is there any difference, for the purpose of confiscation, between, say, the Hearts of Oak Society and the Scottish Widows' Fund? I would like to know.

Mr. BLUNDELL

Is the right hon. Gentleman addressing me?

Mr. MacDONALD

As a matter of fact, I am not addressing anybody.

Mr. BLUNDELL

I thought the right hon. Gentleman wanted an answer from me.

Sir L. WORTHINGTON-EVANS

The right hon. Gentleman should address the Chair.

Mr. MacDONALD

The technical knowledge of the right hon. Gentleman always stands him in good stead. Of course, Mr. Deputy-Speaker, I am addressing you. I am putting a question, which I hope hon. Members will answer, as to whether there is any distinction between"society"and"fund"? If the new Tory doctrine is that you can confiscate funds but that you cannot confiscate the property of societies, I should be very much delighted to hear it, I should be very amused to hear it, I should be very edified to hear it. I will make hon. Members a present of the difference between"society"and"fund,"so far as the category of claims and justifications for the whole of their private property is concerned. The point with which I was dealing is that this money is not the Government's; this money is not the State's; this money is the property of a body which, as I have said, is tripartite in its character, and it ought not to be distributed or redistributed without the consent of the three parties in the ownership. Otherwise, would hon. Members be good enough not to talk about their being in favour of private property and being opposed to confiscation? There is another thing. This is a breach of contract. I think my right hon. and learned Friend the Member for Spen Valley (Sir J. Simon) said that it was a breach of legal contract if, as I understood him—

Sir J. SIMON

I do not think so.

Mr. MacDONALD

I understood that my right hon. Friend said he was not sure that he would apply the term"contract."

Sir J. SIMON

Oh, no.

Mr. MacDONALD

In any event, the remark I was going to make was that, whether there be a legal contract or not, there is certainly a moral contract.

Sir J. SIMON

Parliament promised it.

Mr. MacDONALD

Parliament promised it; there is certainly a moral contract. Let us remember that when the Fund was set up, when those men were compelled to come in, there was no question of"The State is making it convenient for you at the moment, and, when we find what is going to happen, the State will then withdraw its support and take the Fund."Not at all. It was a business proposition. It was advanced as a business proposition, with actuarial reports and with a levy which was supposed to cover risks. The curious thing is—and this is rather an important point—that the hon. Baronet who now sits for East Cardiff (Sir C. Kinloch-Cooke) had a glimmering of something of this, but his suspicion of a Government never went beyond this, that he thought that, if there was to be a surplus in this Fund which would not be required to meet insurance liabilities, a Government might come along and say that those balances ought to be put in to make good the deficits of other insurance societies. The hon. Baronet put a question—it was rather a long question, but this is the essential point of it—asking whether balances which a man had not used would be absorbed by the State for the general purposes of the national scheme; and Mr. McKinnon Wood, who was then Secretary to the Treasury, replied: In no case could the value of his contributions be absorbed in the manner suggested in the question, as the special fund will he earmarked to soldiers and sailors."—[OFFICIAL REPORT, 2nd November, 1911; col. 1134, Vol. 30.] Of course, it may be said that this is not going to relieve the national scheme. No, but is the position of the Government this, that when that answer was given the Government were quite convinced that no surplus from this special fund should go to the national scheme, hut that they did hold it in their minds that, if the Chancellor of the Exchequer were in need, the surplus would go to relieve Super-tax payers? Is that the reply they are going to make? This House really ought to face its moral obligations, and I hope that, in matters like this, the House is going to observe the principle of continuity. The House in 1911 entered into a moral obligation to these men. We knew that the rates that were being paid, the rates that were being levied, were vague, but it was an agreement, and, if it has turned out that the surplus is too great, that the surplus is uneconomical, neither the soldiers, sailors and airmen, nor the War Office and the Admiralty, nor the State, as represented by the Government, have any business alone to settle how that money is going to be spent. This House to-day is going to be asked to say that it is not the business of the men, but that the Admiralty, the War Office and the Air Ministry merging themselves in the State—although they were specifically and quite properly separated from the general State in the Bill of 1911—merging themselves in the State for the purpose of getting this swag, claim the right to say that, according to their wish and in accordance with their convenience, this balance is going to be appropriated, or, as I should say, misappropriated.

The third point is that it is a complete breach of a pledge given by the Government at the time, as is indicated by Mr. McKinnon Wood's answer which I have just quoted. That is our case against this proposal. As I have said, we have at last a Soviet Government sitting in front of us. I have had many a hearty laugh at. Tory Members, and especially Tory Ministers, perambulating the country, talking about how sacred they hold private property, and telling all the poor, dear, deluded citizens what an. awful lot of people we are—my amusement, however, at attacks upon ourselves has not come from that—what terrible people we are, how we have no notion of what a contract is, how we have no idea, of moral obligations, because we belong to the Labour party, because we call ourselves Socialists. Now, unless a miracle is going to happen, a majority of Tory Members, elected because they succeeded in rousing fears about our public probity, are going to march into the Lobby, are going to walk into the Lobby, are going to be shepherded into the Lobby, are going to flow into the Lobby—any word that hon. Members like, provided it puts them in the Lobby—and they are going to declare by their votes that, if the State requires private property, it is going to confiscate it, especially if it be the property of working men. They are going to declare that, if the State finds contracts inconvenient, it is going to break them without consulting even the people with whom it made those contracts. They are going to declare that if the State wishes, if a Parliament wishes, it can tear to pieces and regard as a mere scrap of paper a pledge which was more than an ordinary pledge, but was a solemn and official obligation, entered into by the representatives of the Government, and. therefore, of this House, at that Box, that the balances of this money were to be used in the interests of those who were insured under the Fund that was being created. That is a nice state of things to come to. I hope my hon. Friends who are rather inclined to Moscow will take a warning—[AN HON. MEMBER:"Not a bit of it !"] I am very glad my hon. Friend took the opening I gave him—a warning—

Mr. DEPUTY-SPEAKER (Mr. James Hope)

I may remark that, if this discussion goes on, it will give the hon. Member on the back bench a right of reply.

Mr. MacDONALD

I beg pardon, Mr. Deputy-Speaker. You are quite right. This, to me at any rate, is going to establish a precedent, especially the second Resolution which you are going to put later on. To me it establishes a precedent which, quite honestly, I regard as an exceedingly serious precedent, and, therefore, I have addressed myself to the House as I have done. To me the Government are committing the very blackest of political and constitutional sins in doing what I have described this afternoon. I shall now leave it to the Tory party to decide within the next few hours whether it is in favour of the principles it professes in this country, or whether it is supporting the principles professed and practised at Moscow.

Sir L. WORTHINGTON-EVANS

The right hon. Gentleman says this is a Measure to confiscate private property, and in order to emphasise his argument he suggests that hon. Members on this side remind him of the Soviet. He has even gone so far as to compare individual Members with individual friends of his who are real members of that Government. He knows those gentlemen. I have not the same honour, and cannot really test whether the comparisons he makes are just, but I can say this, that there is nothing in this Measure which is in any sense at all a confiscation of property belonging to any individual whatever. In order to make his case of confiscation, the right hon. Gentleman had to endeavour to show that this £1,100,000 belonged to someone or another. He was asked whether is belonged to the serving men. He did not answer that, but he went through an elaborate argument to prove that the Navy, Army and Air Force Fund was exactly the same thing as an approved society. He said it did not differ in the least from an approved society. Ho argued from that that this was the money of an approved society, and that if the £1,100,000 were transferred to the Exchequer, it would be confiscating a fund belonging to an approved society. It was the exact equivalent of that. That, as I understood it, was his argument. What is the Fund? It is not an approved society. It is not in the least like an approved society. An approved society is a corporation that is managed by its members. This Fund is not managed by the members, and no member has any right of membership at all.

Mr. N. MACLEAN

Therefore you can rob it.

Sir L. WORTHINGTON-EVANS

Hon. Members do not prove their case by constantly repeating words like"robbery"and"confiscation."If they really want to understand either the Government position or the case, they ought at least to listen while the case made by the right lion. Gentleman opposite is being examined. His case was that this was exactly like an approved society and that to take this £100,000 was to rob or confiscate money belonging to an approved society. I point out that the first difference is that it is not a society and is not like the approved societies, which are managed by their members. It is a Fund created by the Government under an Act of Parliament for the purpose of dealing with and finding benefits for those serving men who were unable to join approved societies. There are 23,000 entitled to benefit under this Fund. There are, as a matter of fact, at this moment about 160,000 serving men who are paying contributions, but only on an average 400 out of those who leaves the Service per annum join this Fund because of their impaired health. The rest of them, being in good health, go off to the friendly societies, and if the improvements that form part of the Government plan to-day are carried out they will go into those societies fully paid up without having to wait before they are entitled to benefit. This is not a society nor anything like a society. It is managed, as the right hon. Gentleman knows, by an official committee, not of members, and not appointed by members, but nominees of the various Government Departments. It is quite unlike an approved society. It is a Government guarantee of benefit. That is quite different. Then again the members themselves are entitled to limited benefits. They are not entitled, as members of approved societies are, to normal benefits and additional benefits. They are specifically prevented by the Act of Parliament from having additional benefits at all. When we come to inquire whose property it is that the right hon. Gentleman charges us with confiscating, what is the answer? Whose is it? Can he say whose property it is that we are confiscating? He has no right to charge us with confiscation unless he can tell us whose property it is that we are alleged to be confiscating.

Mr. MacDONALD

The three sections of the contributors.

Sir L. WORTHINGTON-EVANS

Let us examine who they are. One section of the contributors is the War Office, or the Admiralty, or the Air Department. That is the Government. [HON. MEMBERS:"No !"] I cannot draw any distinction. It is the Government. It is votes voted by the House of Commons and expended by the Admiralty, the War Office and the Air Ministry in contributions towards the insurance of these men over whom these Government Departments are responsible. Surely that is Government money—taxpayers' money.

HON. MEMBERS

No !

Mr. MacDONALD

Is there any difference between that and the stamps that we have to buy as employers, say, for our Office of Works people?

Sir L. WORTHINGTON-EVANS

The difference is that in one case it is the Government and in the other they are private individuals. I am asking the right hon. Gentleman whose property it is that he says we are confiscating. His answer is the three parties to the insurance. I am going to examine who those three are. One is the Government Departments employing the men. The second is the Insurance Votes which pay the two-ninths or the one-seventh. That is the Government again. The third party is the soldiers, sailors or airmen who contribute. Are we confiscating anything that they have any right to at all? [HON. MEMBERS:"Yes !"] Under the Act the rights of the serving soldiers, sailors and airmen are limited. All they are entitled to is ordinary benefits and not additional benefits. The Actuary has certified that not merely the £1,100,000 which is being transferred, but the whole £1,500,000 is surplus to the requirements of the Fund for the benefits to which the third party is entitled. It is a complete surplus over and above everything to which they are entitled. The surplus arose from the excessive contributions paid in by the Government in either one or other of its capacities. When the right hon. Gentleman is pressed he says it belongs to these three parties. When we examine it we. find that two of the three parties are the Government and the third is only entitled under the Act to limited benefit, and the Actuary has already certified that there is £1,500,000 surplus over and above every benefit to which the Army-and Navy are entitled.

I am very glad the right hon. Gentleman read an extract from the Debates in 1911. I was very desirous of seeing that the serving soldiers, sailors and airmen got everything they were entitled to, largely because they are under discipline and largely because they cannot make their voices heard and agitate for benefit. The right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) met me in 1911, and these Clauses were put into the Act. I hoped to get hospital stoppages abolished at the same time. He would not do that for me, but he did a good many other things, and we got the contribution reduced and the benefits increased. What I said then governs me now. I want to see that the serving men are more fairly treated if any alteration is going to be made. It. was because of that that the memorandum to which the right hon. Gentleman the Member for Spen Valley (Sir J. Simon) referred yesterday was prepared by me and sent to the Royal Commission on National Insurance. May I remind the House of the immensely strong body of experts who wore on that Royal Commission. They considered that memorandum, and if they had not thought it was a fair and proper provision for the serving soldiers, airmen and seamen, do you think they would have recommended it? Do you think they would have been a party to confiscation? Why should they be likely to support any scheme that was confiscatory? If they thought more benefits ought to have been given than those proposed in that memorandum, do you not think they would have suggested it? It was open to them to suggest that the two improvements I proposed in that memorandum should have been accepted. It was open to them to say,"We will give them something more."Instead of doing that, they approved of the proposals put before them, and they recommended that legislative action should he taken, and that is now being taken.

Mr. RHYS DAVIES

Can the right hon. Gentleman show me in this Report any suggestion by the Royal Commission that £1,100,000 is to be taken out of the fund?

Sir L. WORTHINGTON-EVANS

I hope the hon. Member does not think I said that. [HON. MEMBERS:"You did !"] I took the very greatest care not to say anything of the sort. I do not want to father on to the Royal Commission something they did not recommend. The proposal of transferring £1,100,000 was never before the Royal Commission. I never said it was. What I said—if the hon. Member will listen he will understand—was that there was before the Royal Commission a Memorandum drawn up by me proposing two additional benefits. Those two additional benefits were approved by the Royal Commission. If they thought that it was not enough, if they thought that extra benefits beyond those two ought to have been given, it was open to them to recommend it. They did not do anything of the sort, so I can fairly say that in recommending, as they did, that legislative sanction should be given to those benefits they have approved the proposal made by me in the Memorandum. The right hon. Gentleman says that these two benefits are miserable benefits worth, at the most., £60,000. He is quite wrong. £400,000 is being set aside for the purpose of a reserve against the liabilities for the additional benefits which the sailors, soldiers and airmen are getting under these proposals—not the limited benefits to which they have been entitled in the past, but they are to get those benefits plus an additional benefit equal to the average benefits given by the approved societies. We are restoring to them, notwithstanding their impaired health, a position equal to the average of the 'approved societies, and in order to give them that we have set aside £400,000, not £60,000, and the State is assuming a liability to pay one-seventh of those benefits. It is not fair, therefore—it would he absurd—therefore, to talk about confiscation, and to taunt hon. Members on this side of the House with talk about robbery of the soldiers. It is utterly unfair and it is ridiculous, and such misrepresentation should not be allowed to go unchallenged. It is done, and obviously done, if not by the right hon. Gentleman himself, then by his supporters for party political purposes. [Interruption.] It is done to mislead.

Mr. N. MACLEAN

What about the Zinovieff letter?

Sir L. WORTHINGTON-EVANS

It is done with the obvious intention of creating dissatisfaction in the Forces of the Crown. [HON. MEMBERS:"No, no!"and Interruption]. It is done in order to suggest that they are being unfairly treated. [HON. MEMBERS:"So they are!"] The truth is that, far from being unfairly treated, they are getting greater benefits given to them under this Bill than ever the right hon. Gentleman the Member for Carnarvon Boroughs was able to give under the original Act.

Sir J. SIMON

I very much regret the peroration of the Secretary of State for War. If I may be excused for saying so, really when one considers who are the people who some of us think have the best claim to the benefits from this Fund, it is a pitiable thing, I think it is a shocking thing, that the Debate should be represented as though it were merely a party wrangle. I think the Secretary of State for War will do me the justice to say that the arguments which I tried to put before him yesterday, and which he did not answer, were certainly not inspired by any party purposes. I would far sooner that hon. and gallant Gentlemen opposite, many of whom served as officers during the War, would even now persuade the Government to do with some portion of this money what seems to me to be the right thing to do with it, than that any party capital should he made out, of it by anybody. I will ask the indulgence of my fellow Members on the Committee, in order to put before them, as clearly as I can, without, I hope, being in any way rhetorical or abusive, how this matter really strikes me. I do not regard it in the least as a party matter. I know perfectly well that there are hon. Members sitting opposite who want to do what is right and fair about this Fund just as much as I do. I am myself perfectly convinced that the House of Commons is being invited to do something that is mean and shabby, and I must be excused if I put that point of view firmly and clearly.

We may, I think, be allowed to begin at the beginning. The thing is one of those big human things which has got to be considered as a matter of substance and which at the same time has got to be considered accurately. Here is this fund; how did it originate I Did it originate in a way which makes it right and proper for the State to lay hands upon it for general State purposes, or is it a fund which originated in some special way so that, at any rate, it appears to have as its natural beneficiaries some persons who can be described as being among our population? It originated because, long before the Great War, when National Health? Insurance was first established, it was necessary to bring the serving soldier and the serving sailor into the scheme. But you had to bring them into the scheme with very substantial modifications. It was no good, for example, providing for the serving soldier medical benefit if, as a matter of fact, be was going to get as part of the terms of his service the attention of a skilled Army doctor when he was ill. It was no good providing for the serving soldier sickness benefit, because his pay did not stop because for the moment he was unable to do his full day's work. Therefore, it was essential to the scheme, if you were going to bring the serving soldier and sailor within National Insurance, that you should make a suitable modification in their case. The modification was that instead of 4d. the serving soldier should pay 1½d. I would ask hon. Members opposite, especially the Noble Lady the Member for the Sutton Division (Viscountess Astor) who always takes such a keen interest in these things, to note particularly that this 1½d. was stopped out of the sailor's own pay. While he was given, according to the recruiting advertisements, so much a day, it was, in fact, stopped out of his pay, this 1½d. week by week, and that is the origin of this fund. At the same time, his employer, the War Office or the Admiralty, was bound by Statute to pay in another 1½d.

The Secretary of State for War was so misinformed on this subject when he spoke yesterday, that he thought that the amount which the War Office or the Admiralty put into this fund was a matter within their own discretion. It, is nothing of the kind. It is just as much a statutory contribution as the statutory contribution of the head of a household who pays so much week by week respect of the insurance of his servant. That is the origin of this fund. It seems to me that if hon. Members knew—I do not care where they sit, because we all want to do what is fair and right about this—if could make that fact really known to all those who are going hereafter to be shepherded into a different. Lobby to carry this proposal, I cannot believe that they would accept this ridiculous contention that a fund which was thus originated was free for the State to take and use for general purposes, without regard to the soldiers and sailors.

The next step was this. After this had gone on far years, I think in 1920, there was a modification made, It made no difference to the substance of the thing in the least.; the, people who pretend that it did are merely seeking for a technical excuse. The substance of it was that there was a revision of pay made, and it was found mote convenient that both the workmen's and the employers' contributions should be embodied in a single vote, one of the Army or Navy Votes of this House, just in the same way as many people who employ domestic servants engage them on the terms that they will give them such and such a wage and that they will pay the stamps on their insurance form, both the employer's and the employé"s. But that does not mean that the soldier or the sailor was no longer contributing. It is a ridiculous piece of chicanery for anybody to suggest it and the last person who ought to make such a suggestion is the right hon. Gentleman the Secretary of State for War, who knows perfectly well that every soldier who has fought through the War, every serving soldier, sailor or airman, has been, week by week, building up this Fund that we are talking about to-day. Is there any hon. and gallant Gentleman opposite who will tell me that this Fund is none the less available to go into the general financial statement for the purpose of avoiding an increase in Income Tax? I do not care anything about the technicalities of the matter, but the plain truth is that this Fund is a Fund that was earmarked for the purpose of providing benefits for the class of person who has contributed to it. Nobody who understands this subject can dispute that for one moment.

What is the next point? It is perfectly true that the actual people who are principally being affected by this arc some 20,000 or 30,000 miserable men who are so much the, wrecks of war that they will not be accepted by any insurance society in the, Kingdom. Those are the people who have the principal interest in this Fund. Let hon. and gallant Gentlemen Opposite think of it. It is not the men who came through the War safely and are now fit members of society and able to join this or that approved society—the Hearts of Oak, or whatever it may be—but there are 30,000 unhappy men—and they are being added to at the rate of something like 400 a year—who, try as they may, after having served through the War, are so shattered with shell shock, are so diseased with fever, have suffered so much from standing in cold water in the trenches, that no friendly society will take them in. Those are the People who have got some interest in this money. I ask my fellow Members of the House of Commons, while considering whether they really are going to sit over there as so many dumb Members, not understanding what it is they are being asked to do, can they reconcile this Proposal with their conscience? Can they say,"Oh, this surplus, formed in this way by the contributions of the soldiers and sailors, is available to the Chancellor of the Exchequer to balance his Budget."

Let me put this question to any hon. and gallant Member opposite or to anybody who served in the War, who was a regimental officer, or who sat at an officers' mess in France. There are many who were trusted by their men with some responsibility for looking after some fund or other. Supposing any hon. and gallant Gentleman who was an officer and who was entrusted with the administering of such a fund which was built up by the pennies and halfpennies of his men was to be told:"Well, the fact. is that this fund has provided a larger surplus than was calculated, therefore, it is quite right to use it to pay for the expenses of the officers' mess." Anybody would think that was shameful, and yet I put it most seriously to the House to consider that, because really it is very much what we are doing now. The officers did not have to contribute to National Health Insurance; they were Income Tax payers as a whole, but no officer who remembers what, he did in those days would ever think of being a silent supporter of a system which takes the men's fund in order to avoid the risk of an increase in the Income Tax.

5.0 P.M.

But the Secretary of State for War goes further—and this is the only point which he has got. He says: "Yes, but, look you, the Act did not provide that out of this Fund the soldier or sailor or airman should get both the minimum benefit and the additional benefit. It only provided that he should get the minimum benefit." That is true and that is a real point. That is one of the reasons why I am so anxious that the House of Commons should really consider what is fair and right about this case. If once hon. Members appreciate what they are being asked to do I am perfectly willing to take the Vote of this or any other House of Commons. But what is the explanation? The explanation has been provided by the Secretary of State for War himself. I called attention in the Committee yesterday to the fact that it was he who had given to the recent Royal Commission on Health Insurance a memorandum from the War Office explaining how that came about. I will read the passage again in which he points out that it was a curious fact that whereas in all other parts of National Health Insurance the contributions were contributions which guaranteed to the beneficiary not only a minimum benefit, but the possibility of additional benefit, but in the case of the soldier or sailor, the only thing guaranteed was minimum benefit. He said the reason was "that some doubt appears to have been felt in 1911 as to the ability of the Fund to meet these liabilities." It is very difficult without experience, to calculate how big a fund you need for the sake of men who years hence come out of the Army in such a, state that no friendly society will accept them: An obligation to maintain its solvency was accordingly placed on the Departments. Presumably in view of this condition it was decided that members of the Fund should not be entitled to additional benefits. It is quite right that we should remember that, as the law stands at this moment, this Fund, which is built up by the soldiers, sailors and airmen—[An HON. MEMBER: "Alone?"] No, no more alone than any other such fund, but in exactly the same way. I have not the slightest desire to exaggerate. Granted that, as the law stands at the moment, that Fund has turned out to be more than sufficient for minimum benefits, I would ask the House of Commons what is the fair thing to do when you have 30,000 men who are the outlaws and exiles of friendly societies and living miserable lives? There is not one of us who does not feel compassion for them, but what is the good of talking about sympathy if, when you find the Fund to which they have contributed is available for additional benefits, you devote it is a sort of average additional benefit, and devote the rest to general S[...] purposes?

I am so convinced that this argument is such a strong one that if I can get it to the minds of hon. Members opposite I do not believe they would ever justify to themselves what is involved. Do not imagine for a moment that this is an electoral point. There are only 30,000 of these people and they are spread all over the country. This is not a raid on the approved societies who, after all, are great bodies with accumulated funds. These men cannot show fight; they have done that before. This is not a raid on education which, after all, could be met by rates. These men have no rates to fall hack on except the poor rate. This Fund ought to be devoted to making a special effort to relieve these unhappy wretches. But, instead of that, it is to be swept away and put at the service of a Chancellor of the Exchequer who is never here. The idea the Minister has that this wretched technical point gives him and his Government some justification for taking the Fund is one of the most deplorable statements I have ever heard in the House of Commons. There used to be a saying that in Transpontine drama the law of the stage was that in the absence of a will the property always went to the nearest villain. Whatever else happens in the absence of the exact purpose which a fund of this sort is designed to serve, it can never be right that the trustee of the fund can take it. The State is the trustee of this Fund. The Minister said this is not like an approved society or a friendly society; the men have no vote. That is one reason why he should be more careful. They are dependent on him and on us. I do not say this with the least desire to make a party point, but I am convinced that people who remember what was really meant by service in the War would not consent to what is being done and would not allow this Fund, built up in this way, to be diverted at the extremity of the Chancellor of the Exchequer merely for the general purposes of the State. I feel strongly about this, and if the Chancellor of the Exchequer would like a motto I will give him one. It is in the lines of a well-known poet, Clough, who wrote a new edition of the Decalogue: Thou shalt not steal; an empty feat, When it's so lucrative to cheat.

Mr. SEXTON

The villain of the piece is not here. He has succeeded, however, in getting substitutes to carry on the work in his absence. What I am concerned about is that this Fund is a heritage left by the men who lay buried in Flanders and beneath the waters of the North Sea and elsewhere to their living comrades. Their memory has been outraged by the very gentlemen who, when they pass the Cenotaph, take off their hats. It is a piece of hypocrisy. These men built up the Fund to help those who live to-day. They were sent out to defend the honour of this country. Then it was a scrap of paper, but to-day you are not concerned in tearing up a scrap of paper, but in tearing up a whole book. The Secretary of State for War dealt with the question of the approved societies. Does not the same principle apply as to approved societies? Were they not told, when the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) created this Act, that they were to be brought in side by side with the very men now in the approved societies? What is the difference between an employer in industry and an employer in the Government? The employer in industry contributes so much and the worker so much. If the principle applies there, why does it not apply in this case? Every time I see one of these gentlemen lifting his hat at the Cenotaph it occurs to me that it is a piece of hollow mockery for them to honour the memory of men whose memory they are abusing by the action they are carrying out here to-day. I believe that this is done, and has been done all this Session, to cover up the tracks of a political buccaneer who is trying to cover up his sins by taking other people's property.

Mr. STEPHEN

Before we go to a Division, I would like to gut a question to the representative of the Government, The Secretary of State for War has felt somewhat sore with regard to the accusation of confiscation and robbery. Would it not be possible for the representative of the Government to give the House a detailed statement of the amount contributed by the members of the Services, the men in the Army, the Navy and the Air Force, and the amount contributed by the State—a definite statement with regard to this Fund from the beginning in each case. It is true that ultimately the State became the contributor instead of the men, but I think also that the representative of the Government would agree that that was simply part of the soldier's, or sailor's or the airmen's pay, as was pointed out by the right hon. Member for Spen Valley (Sir J. Simon). If the House could get those definite figures, showing the proportions contributed in each case, I believe the proposal of the Government would be defeated, or that they would at least have to withdraw those proposals. If we could get a simple statement showing the amount contributed by soldiers, sailors and airmen in the aggregate, and the amount contributed by the Government at the rate of 1½d. per week for each member of the Services during the time that the State has been a contributor on behalf of these members of the Services, I believe this proposal of the Government would fall to the ground and would be shown to be utterly defenceless.

Major Sir BERTRAM FALLE

We have had some very moving speeches, especially one from the right hon. and learned Member for Spen Valley (Sir J. Simon). The suggestion made by the hon. Member for Camlachie (Mr. Stephen) as to the amount contributed by the different parties does not affect me in the slightest. What does weigh with me is that the Government are going to give additional benefits. That weighs with me very much. In considering the question of the Treasury taking the £1,100,000, I put to myself this point: Supposing the scheme had failed and that instead of being able to give the men the benefits proposed under the 1½d. scheme, there had been a deficit of £1,100,000. Who would have had to make up that money? It seems to me to be quite clear that the State would have had to find the money. It strikes me somewhat in the same way as when children make up a little scheme with their fathers. If anything goes wrong father pays, in addition to paying his money week by week. If the State has to pay the money in the event of a failure, it seems to me that, providing the benefits are guaranteed, the State has a right to take the surplus which may have accumulated.

Mr. HARRIS

I beg to move, "That the Debate be now adjourned."

I am glad that at last we have one hon. Member on the Government side whose conscience has been aroused, and who is trying to salve it by some slight argument to justify the action proposed to be taken by the Government. The justification put forward by the hon. Member for North Portsmouth (Sir B. Falle) is that the men are to have additional benefits. It is not fair to describe them as additional benefits. They are the average benefits paid by the societies as a whole. The soldiers who have this very large surplus standing to their credit are entitled not to the average benefits of the good and the weak societies combined, but to the very best benefits paid by the very best societies.

Sir B. FALLE

Benefits that are not promised.

Mr. HARRIS

The only justification for this Bill being pushed through without any concessions is that it is mixed up with the Budget. The Budget has been delayed; it is overdue. It ought to have been discussed this week but owing to the fact that it is contingent on the passing of this Bill, it has been delayed. We are discussing this Bill in the absence of the Chancellor of the Exchequer, and even the Financial Secretary to the Treasury does not deign to grace the House with his presence, and we have to be satisfied at the moment with the presence of the Parliamentary Secretary to the Ministry of Health. It is on those grounds that I move that the Debate be adjourned, in order that we may have an opportunity of a financial statement from a Minister responsible for finance.

It is a very sinister thing that this particular proposal is being guided through the House by the Secretary of State for War. He has been sent here in order to try to justify the proposal. I remember very clearly the Debates on the original National Health Insurance Bill, when it was being guided through the House by the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George). The present Secretary of State for War was very loud then in denouncing the proposals because of the unfair treatment of the soldier and sailor. His conscience was a little stirred this afternoon. I think he began to remember some of his past speeches, in which pointed out that the soldier and sailor had equal claims with civilians for the benefits under the insurance scheme; that they, too, suffered sickness and that they, too, were penalised if they fell ill. He pointed out that when a soldier goes to hospital, not only has he the discomfort of sickness, but he suffers a deduction from his pay for the time he is sick, in order to prevent malingering. In his speech on that occasion the present Secretary of State for War pointed out that the soldier was in a very different position from the ordinary civilian sick man, because he had to put up with the military doctor, and could not select his own medical officer as could the civilian who belonged to an approved society; that while he was lying in hospital he had a deduction from his pay, which was not made up under the insurance scheme; that he had no means of bringing his case before any committee; and that he had to suffer silently because he was a disciplined Service man. Therefore, said the right hon. Gentleman, he had a special claim for seine additional benefit. That benefit was not provided under the original Act of 1911, because the actuaries in those days did not think the funds were available for the purpose. Now the funds are available, and I think it is a very sinister thing that the Secretary of State for War, who, when he was in Opposition, said all the things which I have just mentioned, should be here today defending a proposal to divert the available funds to another purpose. He stated that— In the Army 7d. per day is deducted from pay when the man is in hospital, end he also loses corps pay and messing allowance. The actual amount of deductions for hospital stoppage alone in 1910–11 was £60,000."— [OFFICIAL REPORT, 7th November, 1911; col. 1498, Vol. 30.] He took £60,000 as the amount of deductions for hospital stoppage, but it is considerably more to-day, because the costs are considerably higher. There are many ways in which this Fund could be made useful for the discharged soldier. There is nothing more tragic at the present time than the large numbers of unemployed men who belonged to the ranks of the Army and the Navy. The hon. Member for Bow and Bromley (Mr. Lansbury) has attempted to get the number of ex-service men who are now receiving Poor Law relief. In the East End of London a large percentage of the young men out of work are ex-soldiers and ex-sailors, who lost the best part of their lives in service when they might have been learning a trade. Many of them are suffering physically from disabilities, which make it difficult for them to find employment. If the Government are at a loss to know what to do with this surplus, there are many channels to which it could be diverted. It might be used in training the men and helping them over their difficulties. The men cannot express themselves; they are silent members of society. They are denied the right of organisation. They cannot hold meetings.

Sir B. FALLE

These men are out the Service.

Mr. HARRIS

The members of the Army and Navy are paying in order to receive benefits, and have been paying since 1911. Let me quote what the present Secretary of State for War said in 1911: I want to remind the Committee that there are many thousands of men serving in the Army and Navy who, as they are under discipline, cannot agitate for themselves, and have not been able to take part in the deputations to and interviews with the Chancellor of the Exchequer from time to time. Neither have they been able to appear in the Lobby of the House of Commons or to approach Members of Parliament, for they have no organisation. It is true that one of the friendly societies in which Service men are enrolled has written to the right hon. Gentleman, but the majority of the Service men have had no spokesman at all in connection with this Clause. Therefore, it is all the more necessary for the Committee to he not only strictly fair hut even a little generous; and if there is any question of doubt, it should be given on the side of the soldier or sailor and not on the side"— I hope the right hon. Gentleman will mark these words— of the Treasury."—[OFFICIAL REPORT, 7th November, 1911; col. 1494, Vol. 30.] Now, the right hon. Gentleman is in the pocket of the Treasury. He has forgotten his words. He has forgotten his agitation for the soldier and sailor. Now he is in office he gives them little thought. He is the mere creature of the Chancellor of the Exchequer, who does not even deign to be present. Now the right hon. Gentleman is betraying the men whom he professed to protect. He is betraying the cause of which he once professed to be the champion. One begins to doubt his sincerity. It was mere talk. It was a mere attempt to climb into office, and now he is in office he forgets his past oratory and the men whom he sought to protect. The money is there, and he is going to hand it over to the Chancellor of the Exchequer to enable him to balance his Budget. The Chancellor of the Exchequer would not trouble to be present in order to see the betrayal by the Secretary of State for War of the men who are in his particular charge. For these reasons, and because this is an Economy Bill which particularly demands the presence of the Chancellor of the Exchequer and representatives of the Treasury, I beg to move "That the Debate be now adjourned."

Mr. SPEAKER

I cannot accept that Motion.

Mr. RHYS DAVIES

The Secretary of State for War has been brought to the Treasury Bench to support this infamous proposal and he has endeavoured to do it, if I read his mind correctly, literally ashamed of the task he is trying to perform. The Chancellor of the Exchequer ought to be here too to undertake this task, because he is the person responsible for all the trouble with which we are now confronted. The position is this: the Chancellor of the Exchequer ends in the Army and Navy Insurance Fund a surplus of £1,500,000. He knows that it actually belongs to the men serving in or discharged from His-Majesty's Forces. Therefore, he tells them on the one hand that he will give them a sop. He says, "You shall have £400,000 set aside in order to provide you with additional benefits on the lines of the benefits given to members of approved societies." On the other hand he takes away from them the remaining sum of £1,100,000. That is the point on which the House is asked to decide to-day. Were it not for the keen desire of the Chancellor of the Exchequer and the Government to balance their Budget, I feel sure that they would be really ashamed of these proposals. I should like to have the attention of the right hon. Gentleman the Secretary of State for War while I deal with a point which he raised with the right hon. Member for Aberavon (Mr. R. MacDonald). My right hon. Friend claimed that this Fund was equivalent to an approved society, and the right hon. Gentleman, the Secretary of State, turned on him, in fact pounced on him as a Secretary of State for War should, I suppose, and said that it was nothing of the kind. Let us see therefore what it really is. There is an actuary's report on the subject, and the Actuary is a very capable gentleman who knows more about this Fund than either of the Gentlemen on the Front Bench. I readily confess that he knows much more about it than I do. This is what the Actuary says about this Fund: It is proposed to transfer £1,100,000 from the Navy, Army and Air Force insurance Fund to the Exchequer, and to amend the provisions of Section 59 of the National Insurance Act, 1924, in order that additional benefits may be granted as though the Fund were an approved society to discharged men who receive their benefits from the Fund. As a matter of fact this Fund has always fallen into the category of an approved society. Then the right hon. Gentleman says, "Oh, but the huge surplus of this Fund has been brought about because the Government has paid much more than it ought to have paid in respect of men serving in the Forces."

Sir L. WORTHINGTON-EVANS

Hear, hear !

Mr. DAVIES

The right hon. Gentleman says"Hear, hear."The Actuary knows more on that point, too, than he does about the subject, and this is what the Actuary says as to the reasons for the surplus. It is directly in contradic- tion to what the right hon. Gentleman has said—and here may I say that the right hon. Gentleman would have the Committee to believe, if he could, by implication that the Royal Commission in fact had agreed to all these proposals. When I interjected he had to admit that the Royal Commission did nothing of the kind. But this is what the Actuary says with regard to the reasons for the surplus: The surplus arises from a variety of causes, of which the following are the more important: (1) The rate of interest earned by the Fund has been substantially in excess of that assumed—namely, 3 per cent., in the basis of the contributions and reserve values. Further, the surplus during its growth has earned a large amount of interest.'' That is a very vital reason, perhaps the most, important, reason of all. The Actuary, of course, gives other reasons. This is the second reason: (2). The cost of administration, in the case of serving men, has been much below the sum provided in the contributions. Nothing about the Government contributions there. Then he gives a third reason—namely: (3) The contributions contain a margin which in the case of approved societies is carried to their contingencies fund, but which in the present ease has accrued directly to the principal fund. In the first three of these series of reasons for the surplus as given by the Actuary there is not a single word said about the Government's contribution being excessive. if the right hon. Gentleman wants all the reasons, I will give them. The fourth reason is this: (4) The reserves released in respect of men who were killed during the War or who died as the result of wounds or disease, due to the War. Some Members of the House think it unfair on our part to mention the fact that a part of the great surplus of this Fund is caused by the fact that men died during the War, who, if they had lived, world have been entitled to draw benefit from the Fund. But the Actuary supports that point of view, and gives it as one of the main reasons for the surplus. In fact, throughout the whole of the six reasons given by the Actuary for the surplus of this Fund there is not one reference to the suggestion that the Government has been too generous in its contributions. The Secretary of State for War was some- what flippant on another point. He said that an approved society is a corporation managed by its members, but this is a fund covering certainly a number of men, and is not an approved society. I ask him whether he really believes that all the approved societies of this country are controlled by their members. He knows that there are some large approved societies run by capitalist insurance companies where the members have nothing whatever to do with administration. They have no power and no say in the management. That is in the hands of a body of men who are not themselves insured at all. Practically the only approved societies that are administered by the members themselves are the friendly and the trade union approved societies.

The Secretary of State for War contends that the Government are entitled to raid this Fund. The Chancellor of the Exchequer not many weeks ago decided to raid the Road Fund, and hon. Members opposite who are silent about the proposed raid immediately said, and rightly, that the taxation in respect of the Road Fund was made to cover a very definite liability and that the Chancellor of the Exchequer ought not to raid that Fund because he should not use any money for purposes other than that for which it was intended. If I understand correctly, the Chancellor of the Exchequer has had to climb down in his proposal to raid the Road Fund. But he is raiding this Fund, and he knows that the usual forces against him cannot be rallied. These men are under discipline and they cannot protest in the least against what he proposes to do. I have said that the Secretary of State for War would have the Committee believe if he could, but he failed, that the Royal Commission actually endorsed the proposals the Government are now placing before the Committee. Let me read what the Royal Commission said, and I should like hon. Members to follow me because it is very important in view of what the right hon. Gentleman declared a few moments ago. I want to disabuse the minds of hon. Members that the Royal Commission are backing up the Government, in the least in this matter. They are not. This is what they say: We have received a statement from the Secretary of State for War on behalf of the Three Service Departments, submitting two suggestions for improving the position of men discharged from the Forces as regards title to additional benefit. These suggestions were (1) that the benefits payable out of the Navy, Army and Air Force Fund to discharged men who are established as permanent members of the Fund should not in future be confined to the normal benefits of the Act, but should include also additional benefits equivalent to the average of those provided by approved societies in general. The Government propose to do this, and I agree. The second suggestion is (2) that men who join approved societies on their discharge from the Forces should not be subject to the ordinary waiting period before becoming entitled to additional benefits. We shall require some explanation later on if the Government accepts that proposal. But I pass on to what is vital in the recommendations: We are informed that the financial position of the Navy, Army and Air Force Insurance Fund (the solvency of which is guaranteed by the Service Departments) is so satisfactory that it can well afford the cost which would be involved in giving effect to the first of these two suggestions, and that there is a sufficient margin in the contribution payable during service to provide reasonably for the second. With regard to the £1,100,000, this is what the Commission say: We are also satisfied that there is ample justification for the proposition that the insurance rights of men who have served with the Forces f the Crown should be improved in the manner suggested, and we, therefore recommend that statutory provision should be made accordingly. There is not one word in that recommendation about taking the £1,100,000 from the Fund.

Sir L. WORTHINGTON-EVANS

I did not say there was.

Mr. DAVIES

No, but you implied it. The implication was definitely that these proposals were being backed up by the Royal Commission; but after his explanation I think we are satisfied that the right hon. Gentleman did not mean that inference in the words he used. I raised a point last night with regard to the Advisory Committee, and I understand the right hon. Gentleman gave a reply. It was to this effect, that the Committee was actually set up, but that it has nothing to do with it, meaning that the Advisory Committee set up under Regulation 20 has nothing to do with these proposals. I am not a lawyer, and I do not understand the law; but in reading that Regulation I should have thought for decency's sake that any Government, of whatever political colour it may be, would have asked the Advisory Committee its opinion as to the disposal of this Fund. Surely if an Advisory Committee is set up to deal with problems connected with this Fund it should be asked its opinion, especially when a sum of £1,100,000 is about to be taken away from it. I should like to ask the right hon. Gentleman whether any actuarial calculation has been made as to whether the £400,000 left in the Fund is sufficient to meet these additional benefits; and whether the additional benefits which are now proposed will be extended if and when the extended schemes of approved societies are adopted.

I have little more to say on this subject, except to declare my emphatic protest against what the Government is doing. They are treating these men who were bruised and maimed in the War unkindly and unjustly, and if the Government had any sense of honour at all, they would withdraw these Resolutions even now. I know that argument has no effect on them, but I thought we might by this time have shamed them into withdrawing the Resolutions. They will, I think, he ashamed of them later on, although we have been told that we must not use these points for political purposes. The Government itself will find, when they go to the country on the next occasion, that they will suffer heavily because of their attitude on this question. One of the most powerful exponents of the Government policy issued a pamphlet recently,

and I will conclude by quoting what it said, as it is most appropriate in this connection. It is a pamphlet issued by the Conservative party. It is very interesting, and makes delightful reading when you have nothing else to do. This is what the pamphlet says: Parliament has regarded Labour as a sort of wild animal of uncertain temper, but of formidable power, which is to be cajoled into accepting as little as possible of its demands, but, whenever it shows its teeth, is to be placated by precipitate concession. We on this side of the House desire once again to register our protest against the action of the Government. The right hon. Gentleman would have us believe that if this fund was an approved society the Government would not raid it at all. That was the implication of his remarks. But he is condemned out of his own mouth by what has been done with Clause 1 of the Economy Bill. The Government are raiding the funds of approved societies under that Clause. We are fighting this Bill Clause by Clause and we shall continue to do so, because we feel sure that we represent, in this connection, not only the thousands of soldiers covered by this fund, but in our point of view we represent also the 15,000,000 people who are members of the great approved societies.

Sir L. WORTHINGTON-EVANSrose in his place, and claimed to move,"That the Question be now put."

Question put, "That the Question be now put."

The House divided: Ayes, 240; Noes, 144.

Division No. 133.] AYES. [5.47 p.m.
Acland-Troyte, Lieut.-Colonel Brooke, Brigadier-General C. R, I. Churchill, Rt. Hon. Winston Spencer
Allen, J. Sandeman (L'pool, W. Derby) Broun-Lindsay, Major H. Churchman, Sir Arthur C.
Amery, Rt. Hon. Leopold C. M, S. Brown, Col. D. C. (N'th'l'd., Hexham) Clarry, Reginald George
Applin, Colonel R. V. K. Brown, Brig.-Gen. H.C.(Berks, Newb'y) Clayton. G. C.
Ashley, Lt.-Col. Rt. Hon. Wilfrid W. Buckingham, Sir H. Cobb, Sir Cyril
Astor, Viscountess Bull, Rt. Hon. Sir William James Colfox, Major Win. Phillips
Baldwin, Rt. Hon. Stanley Bullock, Captain M. Cope, Major William
Balfour, George (Hampstead) Burman, J. B. Couper, J. B.
Barclay-Harvey, C. M. Butler, Sir Geoffrey Courthope, Lieut.-Col. Sir George L.
Barnett, Major Sir Richard Cadogan, Major Hon. Edward Craik, Rt. Hon. Sir Henry
Benn, Sir A. S. (Plymouth, Drake) Campbell, E. T. Croft, Brigadier General Sir H.
Bennett, A. J. Cayzer, Sir C. (Chester, City) Crookshank, Col. C. de W. (Berwick)
Bethel, A Cayzer, Maj. Sir Herbt. R. (Prtsmth. S) Crookshank, Cpt. H. (Lindsey, Gainsbro)
Blades, Sir George Rowland Cecil, Rt. Hon. Sir Evelyn (Aston) Curzon, Captain Viscount
Blundell, F. N. Cecil, Rt. Hon. Lord H. (Ox. Univ.) Davidson, J.(Hertf'd, Hemel Hempst'd)
Bourne, Captain Robert Croft Chadwick, Sir Robert Burton Davidson, Major-General Sir John H.
Brass, Captain W. Chamberlain, Rt. Hn. Sir. J.A. (Birm., W.) Davies, Dr, Vernon
Briscoe, Richard George Chamberlain, Rt. Hon. N. (Ladywood) Davies, Maj. Geo. F. (Somerset, Yeovil)
Brittain, Sir Harry Chapman, Sir S. Davies, Sir Thomas (Cirencester)
Brocklebank, C. E. R. Charteris, Brigadier-General J. Dawson, Sir Philip
Dixey, A. C. Iliffe, Sir Edward M. Sandeman, A. Stewart
Drewe, C. Inskip, Sir Thomas Walker H. Sanders, Sir Robert A.
Eden, Captain Anthony Jackson, Lieut.-Colonel Rt. Hon. F. S. Sanderson, Sir Frank
Edmondson, Major A. J. Jackson, Sir H. (Wandsworth, Cen'l) Sandon, Lord
Edwards, John H. (Accrington) Jacob, A. E. Sassoon, Sir Philip Albert Gustave D.
Elliot, Captain Walter E. James, Lieut.-Colonel Hon. Cuthbert Savery, S. S.
Ellis, R. G. Kidd, J. (Linlithgow) Scott, Sir Leslie (Liverp'l, Exchange)
Elveden, Viscount Kindersley, Major G. M. Shaw, R. G. (Yorks, W. R., Sowerby)
Erskine, Lord (Somerset, Weston-s.-M.) King, Captain Henry Douglas Shaw, Capt. W. W. (Wilts, Westb'y)
Erskine, James Malcolm Monteith Kinloch-Cooke, Sir Clement Shepperson, E. W.
Everard, W. Lindsay Lane Fox, Col. Rt. Hon. George R. Simms, Dr. John M. (Co. Down)
Fairfax, Captain J. G. Lister, Cunliffe-, Rt. Hon. Sir Philip Skelton, A. N.
Faile, Sir Bertram G. Locker-Lampson, G. (Wood Green) Slaney, Major P. Kenyon
Fanshawe, Commander G. D. Loder, J. de V. Smith-Carington, Neville W.
Fermoy, Lord Lougher, L. Smithers, Waldron
Fielden, E. B. Lowe, Sir Francis William Somerville, A. A. (Windsor)
Foster, Sir Harry S. Lucas-Tooth, Sir Hugh Vere Spender-Clay, Colonel H.
Foxcroft, Captain C. T. Lumley, L. R. Sprot, Sir Alexander
Fraser, Captain Ian MacAndrew, Major Charles Glen Stanley, Col. Hon. G. F. (Will'sden, E.)
Fremantle, Lieut.-Colonel Francis E. Macdonald, R. (Glasgow, Cathcart) Stanley, Lord (Fylde)
Gadie, Lieut.-Col. Anthony McLean, Major A. Stanley, Hon. O. F. G. (Westm'eland)
Galbraith, J. F. W. Macnaghten, Hon. Sir Malcolm Steel, Major Samuel Strang
Ganzoni, Sir John McNeill, Rt. Hon. Ronald John Stott, Lieut.-Colonel W. H.
Gee, Captain R. Macquisten, F. A. Streatfeild, Captain S. R.
Gilmour Lt.-Col. Rt. Hon. Sir John Makins, Brigadier-General E. Strickland, Sir Gerald
Glyn, Major R. G. C. Malone, Major P. B. Sugden, Sir Wilfrid
Goff, Sir Park Manningham-Buller, Sir Mervyn Sykes, Major-Gen. Sir Frederick H.
Gower, Sir Robert Margesson, Captain D, Templeton, W. P.
Grace, John Marriott, Sir J. A. R. Thorn, Lt.-Col. J. G. (Dumbarton)
Greene, W. P. Crawford Mason, Lieut.-Col. Glyn K. Thompson, Luke (Sunderland)
Greenwood, Rt. Hn. Sir H. (W'th's'w,E) Meller, R. J. Thomson, F. C. (Aberdeen, South)
Grotrian, H. Brent Meyer, Sir Frank Thomson, Rt. Hon. Sir W. Mitchell
Guinness, Rt. Hon. Walter E. Mitchell, W. Foot (Saffron Walden) Tinne, J. A.
Gunston, Captain D. W. Mitchell, Sir W. Lane (Streatham) Titchfield, Major the Marquess of
Hacking, Captain Douglas H. Monsell, Eyres, Com. Rt. Hon. B. M. Tryon, Rt. Hon. George Clement
Hail, Capt. W. D'A. (Brecon & Rad.) Moore-Brabazon, Lieut.-Col. J. T. C. Vaughan-Morgan, Col. K. P.
Hannon, Patrick Joseph Henry Morrison, H. (Wilts, Salisbury) Waddington, R.
Harrison, G. J. C. Morrison-Bell, Sir Arthur Clive Wallace, Captain D. E.
Hartington, Marquess of Murchison, C. K. Ward, Lt.-Col. A.L.(Kingston-on-Hull)
Harvey, Major S. E. (Devon, Totnes) Nail, Lieut.-Colonel Sir Joseph Waterhouse, Captain Charles
Haslam, Henry C. Nelson, Sir Frank Wells, S. R.
Hawke, John Anthony Neville, R. J. Wheler, Major Sir Granville C. H.
Headlam, Lieut.-Colonel C. M. Newman. Sir R. H. S. D. L. (Exeter) White, Lieut.-Colonel G. Dairymple
Henderson, Capt. R. R.(Oxf'd, Henley) Newton, Sir D. G. C. (Cambridge) Williams, A. M. (Cornwall, Northern)
Henderson, Lieut.-Col. V. L. (Bootie) Nuttall, Ellis Williams, Com. C. (Devon, Torquay)
Henn, Sir Sydney H. Percy, Lord Eustace (Hastings) Williams, Herbert G. (Reading)
Hennessy, Major J. R. G. Pownall, Lieut.-Colonel Assheton Wilson, Sir C. H. (Leeds, Central)
Herbert, Dennis (Hertford, Watford) Preston, William Windsor-Clive, Lieut.-Colonel George
Hogg, Rt. Hon. Sir D.(St. Marylebone) Raine, W. Winterton, Rt. Hon. Earl
Hohler, Sir Gerald Fitzroy Ramsden, E. Wise, Sir Fredric
Holbrook, Sir Arthur Richard Rawson, Sir Alfred Cooper Withers, John James
Holt, Captain H. P. Reid, Capt. A. S. C. (Warrington) Womersley, W. J.
Homan, C. W. J. Rentoul, G. S. Wood, B. C. (Somerset, Bridgwater)
Hopkins, J. W. W. Rice, Sir Frederick Wood, E.(Chest'r. Stalyb'dge & Hyds)
Howard, Captain Hon. Donald Richardson, Sir P. W. (Sur'y, Ch'ts"y) Wood, Sir Kingsley (Woolwich, W.)
Hudson, Capt. A. U. M.(Hackney, N.) Ropner, Major L. Wood, Sir S. Hill- (High Peak)
Hudson, R. S. (Cumberl'nd, Whiteh'n) Ruggles-Brise, Major E. A. Worthington-Evans, Rt. Hon. Sir L.
Hume, Sir G. H. Russell, Alexander West (Tynemouth) Yerburgh, Major Robert D. T.
Huntingfield, Lord Rye, F. G.
Hurts, Percy A. Salmon, Major I. TELLERS FOR THE AYES.—
Hurst, Gerald B. Samuel, A. M. (Surrey, Farnham) Major Sir Harry Barnston and Captain Bowyer.
NOES.
Adamson, Rt. Hon. W. (Fife, West) Clynes, Rt. Hon. John R. Gillett, George M.
Alexander, A. V. (Sheffield, Hillsbro') Collins, Sir Godfrey (Greenock) Gosling, Harry
Ammon, Charles George Compton, Joseph Graham, D. M. (Lanark, Hamilton)
Attlee, Clement Richard Cove, W. G. Greenall, T.
Barker, G. (Monmouth, Abertillery) Cowan, D. M. (Scottish Universities) Greenwood, A. (Nelson and Colne)
Barr, J. Crawfurd, H. E. Grenfell, D. R. (Glamorgan)
Batey, Joseph Dalton, Hugh Griffiths, T. (Monmouth, Pontypool)
Beckett, John (Gateshead) Davies, Evan (Ebbw Vale) Groves, T.
Bowerman, Rt. Hon. Charles W. Davies, Rhys John (Westhoughton) Grundy, T. W.
Broad, F. A. Davison, J. E. (Smethwick) Guest, J. (York, Hemsworth)
Bromfield, William Day, Colonel Harry Guest, Dr. L. Haden (Southwark, N.)
Bromley, J. Dennison, R. Hall, F. (York, W. R, Normanton)
Brown, James (Ayr and Bute) Duckworth, John Hall, G. H. (Merthyr Tydvil)
Buchanan, G. Duncan, C. Hamilton, Sir R. (Orkney & Shetland)
Buxton, Rt. Hon. Noel Dunnico, H. Hardie, George D.
Cape, Thomas Evans, Capt. Ernest (Welsh Univer.) Harris, Percy A.
Charleton, H. C. Fenby, T. D. Hartshorn, Rt. Hon. Vernon
Clowes, S. Forrest, W. Hayday, Arthur
Cluse, W. S. Gibbins, Joseph Henderson, Rt. Hon. A. (Burnley)
Henderson, T. (Glasgow) Naylor, T. E. Sutton, J. E.
Hirst, G. H. Oliver, George Harold Taylor, R. A.
Hirst, W. (Bradford, South) Palin, John Henry Thomas, Rt. Hon. James H. (Derby)
Hore-Belisha, Leslie Paling, W. Thomson, Trevelyan (Middlesbro, W.)
Hudson, J. H. (Huddersfield) Parkinson, John Allen (Wigan) Thome, W. (West Ham, Plaistow)
Hutchison, Sir Robert (Montrose) Pethick-Lawrence, F. W. Thurtle, E.
John, William (Rhondda, West) Ponsonby, Arthur Tinker, John Joseph
Johnston, Thomas (Dundee) Potts, John S. Townend, A. E.
Jones, Henry Haydn (Merioneth) Purcell, A. A. Trevelyan, Rt. Hon. C. P.
Jones, Morgan (Caerphilly) Richardson, R. (Houghton-le-Spring) Varley, Frank B.
Kelly, W. T. Ritson, J. Viant, S. P.
Kennedy, T. Salter, Dr. Alfred Walsh, Rt. Hon. Stephen
Kenworthy, Lt.-Com. Hon. Joseph M. Scurr, John Warne G. H.
Kenyon, Barnet Sexton, James Watts Morgan, Lt. Col. D. (Rhondda)
Kirkwood, D. Shiels, Dr. Drummond Webb, Rt. Hon. Sidney
Lawson, John James Short, Alfred (Wednesbury) Wheatley, Rt. Hon. J.
Lee, F. Simon, Rt. Hon. Sir John Whiteley, W.
Lowth, T. Sinclair, Major Sir A. (Caithness) Wiggins, William Martin
Lunn, William Sitch, Charles H. Williams, David (Swansea, East)
MacDonald, Rt. Hon. J. R. (Aberavon) Smillie, Robert Williams, Dr. J. H. (Llanelly)
Mackinder, W. Smith, Ben (Bermondsey, Rotherhithe) Williams, T. (York, Don Valley)
MacLaren, Andrew Smith, Rennie (Penistone) Wilson, C. H. (Sheffield, Attercliffe)
Maclean, Nell (Glasgow, Govan) Snell, Harry Wilson, R. J. (Jarrow)
MacNeill-Weir, L. Snowden, Rt. Hon. Philip Windsor, Walter
March, S. Spencer, G. A. (Braxtowe) Wright, W.
Maxton, James Spoor, Rt. Hon. Benjamin Charles Young, Robert (Lancaster, Newton)
Montague, Frederick Stamford, T, W.
Morris, R. H. Stephen, Campbell TELLERS FOR THE NOES.—
Morrison, R. C. (Tottenham, N.) Stewart J. (St. Rollox) Mr. Charles Edwards and Mr. A. Barnes.
Murnin, H. Sullivan, Joseph

Question, "That this House doth agree with the Committee in the said Resolution." put accordingly, and agreed to.