NATIONAL HEALTH INSURANCE.

HC Deb 25 March 1926 vol 193 cc1407-46

Mr. HARNEY

The party to which I belong have availed themselves of this opportunity to bring forward for discussion the question of National Health Insurance. It is fifteen years since that great Measure has become part of the law of the country. Its membership is over 15,000,000 and we have recently for the first time had an account of its doings during all that period. It is gratifying to those of us who are members of the Liberal party to know that after that prolonged investigation by high and impartial experts they have, without any qualification, commended the success of the Measure, approved of the hope with which it was started, amidst jeers and scorn, and vindicated the high confidence and the bold declarations and courage with which my right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George) introduced the Bill.

No more suitable time could be found for considering in a general way how that great experiment has worked. What are the four or five outstanding features? The first is, that before the scheme was introduced there existed in this country institutions which by voluntary action did a great deal of the work which the National Health Insurance Act took in hand. That work was done by friendly societies, by trade unions on their benefit side, by collecting societies and industrial insurance branches. It was made an essential principle on turning these sporadic, voluntary efforts into one national compulsory system, that there should be embedded in its framework the organisation and machinery of these societies. It was with difficulty that they were induced to lend their co-operation, because some of them had been very successful, while others had only just saved themselves from insolvency. The benefits that were given were in every case proportionate to the contributions that were received.

When it was put to these societies that they should join in this great national co-operate scheme, where there would be a flat rate of benefits, they naturally said, "If you are going to have a fiat rate it means that some of us who are prosperous may be deprived of the extra benefits we are in the habit of getting." Because of that, it was made a distinct and clear bargain that if these societies came in they would be shorn of none of the privileges of success which had been theirs heretofore. That was told them on platforms and in this House and it forms a part of the Statute itself. That is important for this reason, that whatever may be the views of the Government as to the further administration of this system, they have to hear in mind that they should regard as sacrosanct the accumulations of the more fortunate societies, because unless they do so they are depriving them of the privilege of utilising among their members the surplus which is due to their own successful management and their own wise selection. I am glad to say that the Royal Commission found itself justified in saying that so wise has been this feature of the. societies and so efficient and so honest have been their methods that, although in the large volume of their Report there are many suggestions made, there is no suggestion that this work should he taken away from these approved societies. Those members of the societies who have given their time and their energy and skill through out the country in the management of the societies must be very proud of that compliment which has been paid to them, and they ought to be very grateful to the party which gave them the opportunity of exhibiting what they could do.

There is another feature of this great Measure upon which I should like to make some comment. It is often spoken of as though this National Health Insurance system is a Government Department. It is nothing of the kind. Its structure and the principles upon which it rests make it an entire entity. The funds at its disposal are due to the contributions of its members. If it became insolvent, it would have to meet its difficulties by a levy upon its members. That is a very important thing to bear in mind when we consider all the adminuistration and the legislation to which it is subject. Once the logical position is recognised, and it must he recognised, that the National Insurance scheme differs in no legal respect from any other of the large insurance bodies in the country, there is no more justification legal, moral or otherwise for dealing with the accumulation of its funds than there would be for dealing with the funds on which bonuses are paid by private insurance companies, indeed less. If the necessities of the State would justify it in drawing upon the accumulations of private bodies, one would have thought that the very last upon which they would lay their hands would be a private body formed in order to look after the health of the very poorest of the poor.

Another feature of this great system is the contributions. In reality there are on y two contributors, the employers and the employed. The part which the State plays is often regarded as that of contributor, but it is not so. The State says, "You contribute. You create your fund, out of which the benefits pass, and we, since the community is interested in the health of its members, will to the extent of two-ninths foot the bill that you will have to pay away in benefits as and when you have to pay them."

The fraction fixed in 1911 was the basis upon which the whole structure of the finance of that Bill was built. Whatever else was varied the two-ninths was in tended to he constant. When my right hon. Friend was speaking the other night he made some remark of the same character, as true coming from his mouth as from mine, that the two-ninths was a fixed figure, intended to remain what ever else might change, and he used the expression about taking feathers from the pillow of the sick man, a metaphor which captivated the House then and the country since. In reply the Minister said that he wondered the right hon Gentleman dwelt so much upon the two-ninths, because at the time when he was Prime Minister the proportionate benefit in the case of women was only one-fourth and that was altered to two-ninths. The right hon. Gentleman said, "Apparently the pillow of the sick man is sacred, hot the pillow of the sick woman is not so." The right hon. Gentleman omitted to ay this: what was suggested from the Government side and what my right lion. Friend was dealing with was really taking away feathers from the pillow. But what it was said he had done when he was Prime Minister was not to take feathers from the pillow of either the man or the woman, but to put more feathers into the pillows of both, and at the same time as he was doing that he said: "Let us have uniformity, and, since we are making the pillow softer and bigger, let us see that the same number of feathers in each are plucked from the Government pigeon."

Mr. LLOYD GEORGE

The amount of the Government contribution would increase.

Mr. HARNEY

The Report has dealt with this, and I commend the passage to the right hon. Gentleman. If I remember rightly, last July, in a speech made by the right hon. Gentleman in reply to a suggestion coming from a member of his own party, the right hon. Member for Hill-head (Sir R. Horne), he was at pains to lay stress upon the inadvisability of making any change then, because a report was about to come out, to which it was hoped that proper and due respect would be paid. Here is a passage from the Report which is probably so familiar to the right hon. Gentleman that he will not listen to it: While we have every sympathy for such proposals, we feel that there may come a time, and, in fact, there has come a time, when the State may justifiably turn from searching its conscience to exploring its purse. We, therefore, make the definite recommendation that only such extensions or modifications as involve no expenditure other than what can be met with the pre sent financial resources, are practicable. We consider that the scheme should be self-supporting, subject to the payment by the Exchequer of its present proportionate share of the cost of benefit. Is that remark in the report the explanation for the change of attitude of the right hon. Gentleman between July and March; If so, what is his answer to his statement in July, "I will not fall in with the suggestion of the right hon. Gentleman now, because I am waiting for the report," and when the report comes out it says that if there is one thing you are not to touch it is the two-ninths. Yet that is the very first thing the Government do touch. At all events, the suggestion of the right hon. Member for Hillhead had this to recommend it. He said: "Reduce your contributions in order to relieve industry. Moreover, if contributors are going to get less, ask them to pay less." But the right hon. Gentleman says: "While we would not. reduce contributions in order to relieve industry, whilst we will net do the fair thing of asking those to pay less who were going to get less, we will reduce the contribution, not to relieve industry, but to save the face of the Chancellor of the Exchequer, and we will do it so that the poor contributor will be paying the same and receiving less." I would like to know upon what ground of logic or of morality the right hon. Gentleman can now say—having rejected with scorn the suggestion of the right hon. Member for Hillhead, when he said "Give less and ask less"—"We will reduce the income out of which benefits are paid, not in the interests of industry, but in. the interests of the Chancellor of the Exchequer."

That brings me to another feature and the last I will deal with—the nature of the benefits under this scheme. There were two classes of benefits. One was a mini mum benefit to be given to everyone, disablement, sickness and maternity. But that was not really the main benefit in the contemplation of the right hon. Gentleman. The central idea of the whole scheme was the grading up of the health of the community. Everyone was to have, in any event, certain essential curative benefits, but these were gradually to develop into preventive benefits. Such things as were within the financial scope of the weaker societies were made common ground, but the stronger societies were to have such higher benefits as their funds would permit. A section in the Act of Parliament says so, and a schedule is there actually setting out what those benefits were. The first class of benefits was assured. But the second class of benefits, what were they to come out of? What are the sources from which they come? They come primarily from surpluses, and, secondly, from extended benefits. How do you get your surpluses? As I have indicated, it is impossible to lay down a flat rate of contributions that will be sufficient for the average weak society, without of necessity running into the surpluses in the successful society. That was the first source of these additional benefits. What was the second? When you were starting this scheme, bringing everybody into line, of all ages, it was necessary to make some provision whereby those over 16 would stand on a like footing with those at 16, and you did it by a very ingenious and sound expedient. You said, "Let the Insurance Fund—not the Government—credit each one above the age of 16 with an amount that would represent what would be his insurable value had he been contributing since he was 16." Those were mere paper credits, but there had to be some method arranged for gradual redemption of them. What was that? You added15/9d,—that, I think, was the figure—to the contribution that otherwise would have been sufficient to give the benefits pro vided. You said," That is something which is to be placed into a sinking fund, and in the course of 20 years it wilt entirely wipe out these paper credits. At the end of that period there will be an overflow, and this will he available for further surplus benefits."

It is obvious that if you reduce the stream that flows into the reservoir out of which these benefits come, whether they be minimum, additional or extended, you must hit these benefits in some way. You hit the extended benefits by lengthening the time within which the paper credits will be wiped off. In the year 1917, after this new scheme had been in operation for five or six years, it was found as was expected that some of the societies ran into surpluses and that others fell into deficits. There was a Departmental inqury. The result of that was not to bring about a recommendation that the contribution should be reduced, because of the surpluses, but that the contribution that went to benefits was too little instead of too much. The suggestion was then made, and afterwards carried out in the 1918 Act, that you should divert from the Sinking Fund, which it had been at first arranged was to be wiped out in about 20 years, a portion of its stream and form of the diverted portion two channels known as the contingency and central funds, so that those who were in deficiency would be got out of it by these means, and those in surplus would have further surpluses. I ought to read to the House one paragraph—

Mr. SPEAKER

I am not sure that I follow the hon. and learned Member. It appears to me that he is discussing in advance the Committee stage of the Economy Bill. I must remind him of two things. First of all, we must not anticipate what has been set down by the House for later consideration; and, secondly, the Consolidated Fund Bill is governed by the same rules as Committee of Supply. Only administrative matters can be discussed and not matters that require legislation.

Mr. LLOYD GEORGE

On the point of Order. The recommendations of the Royal Commission propose that there should be extended benefits, not by new legislation but under the Act of 1911. These can be granted under the existing law. It is perfectly true the Government propose to alter the law, but our suggestion is that the recommendations should be carried out as they are and that can be Gone without altering the law at all.

Mr. SPEAKER

Certainly in so far as that is the case, the hon. and learned Member is in order.

Notice taken that 40 Members were not present; House counted; and 40 Members being present—

The MINISTER of HEALTH (Mr. Neville Chamberlain)

On the point of Order. I do not know if I correctly heard the point which the right hon. Gentleman was putting, but I understand he was suggesting that the recommendations of the Royal Commission could be carried out without legislation. He is mistaken there.

Mr. LLOYD GEORGE

No, I am not.

Mr. CHAMBERLAIN

What the Royal Commission recommend is that certain additional cash benefits—benefits in the shape of cash payments to the dependants of insured persons—should be made statutory. That would require legislation.

Mr. LLOYD GEORGE

So far as it is necessary to introduce legislation, but undoubtedly under the Act of 1911 these payments to dependants form part of the additional benefits which can be carried out, as soon as there is a valuation, by order of the Commissioners and with the sanction of the Minister of Health.

Mr. CHAMBERLAIN

Even that is not quite correct.

Mr. RHYS DAVIES

Surely the right hon. Gentleman, if die reads these recommendations, will appreciate that a number of them can be dealt with by administrative action.

Mr. CHAMBERLAIN

Not this one.

Mr. DAVIES

Probably not this one, but there are some of these recommendations which would not require legislation.

Sir JOHN SIMON

May I respectfully submit that there is a Schedule to the Act of 1911 headed "Additional Benefits." They are 14 in number and include, for example, dental benefit. One of the recommendations of the Royal Com mission is that without any loss of time, available money should be devoted for that purpose. I respectfully submit that to ask the Government whether they pro pose by suitable administrative action to encourage and secure the carrying out of the recommendations of the Royal Commission, rather than allow funds to he diverted to other purposes is strictly within the four corners of order in this Debate.

The PARLIAMENTARY SECRETARY to the MINISTRY of HEALTH (Sir Kingsley Wood)

It is perfectly true that certain recommendations of this Com mission can be carried into effect without legislation, but the principal one which has been the subject of the hon. and learned Member's remarks this afternoon dealing with dependants, is obviously subject to legislation.

Mr. HARNEY

I only mentioned it.

Sir K. WOOD

If one examines the Schedule to which the right hon. and learned Gentleman the Member for Spen Valley (Sir J. Simon) has just referred, one will find, it is true these additional benefits in the terms set out in the Schedule, but the recommendations of the Royal Commission do not follow the terms set out in the Schedule. What they recommend is that payment by allowance should be made to women and children.

Mr. SPEAKER

Hon. Members know a great deal more than I do about the intricacies of these matters. I must request them to confine themselves to matters of administration and not to trench on matters of legislation.

Mr. HARNEY

As a matter of fact, the hon. Gentleman the Parliamentary Secretary was doing me the credit of anticipating that I would talk about dependants. The point I am on is this: I take it I am in order in discussing the general working of this Act since 1911, and with reference to that, I was about to point out that it is quite contrary to the principle on which this Act was framed that any portion of the moneys that run either into surpluses or into the sinking fund should be interfered with. I was not saying anything about legislative action; I was only describing the principle on which the Act rests, and I was about to point out that in 1918, after the Ryan Commission had sat and had come to the conclusion that so much money was passing into the sinking fund that it involved in deficiency the weaker societies while leaving surpluses to the stronger, they at once corrected that state of things by dividing the stream flowing into the sinking fund, one portion continuing to flow, as before, and the other going into the contingency fund and the central fund. These were two specialised funds, the function of which really was to adjust debits in the case of deficiencies, and to increase credits in the case of surpluses. That had the effect, naturally, of putting off the blessed day when the sinking fund would be worked out. What I read from this Report is, that, as a quid pro quo for what the Commission recommended and as an inducement to those who wished to adhere to the principle under lying the Act, namely, the sacredness of the original sources, the Commissioners made a proposal. What they said was: We are aware that objections may be entertained to this proposal "— that is the proposal to lessen the amount going into the sinking fund— On the ground that the present generation of insured persons have formed the expectation of an extension of benefit in 1932. But we consider this disadvantage is more than met by the following facts. (a) The scheme which we propose to recommend will leave unimpaired the rights of members of societies with a disposable surplus….(c) the scheme offers substantial prospect to many societies of the provision of increased additional benefits at a date considerably in advance of 1932. In other words, what they say is: We hold ourselves not to be justified in dealing in any way with the stream out of which these benefits are flowing, except to increase it. We certainly should not diminish it, but, though we are deferring the great day when you will fall in for your extended benefit, and we are giving you this in exchange, that such of you as are successful will have still larger surpluses. I say, therefore, that I hope the Government will not yield to the temptation, administratively or in any other way, of seeking to diminish the income out of which these benefits are now derived. It is bound to have three mischievous effects.

Sir K. WOOD

On a point of Order Is it in order to discuss the intentions of the Government in the Economy Bill, to seek to diminish certain surpluses?

Mr. SPEAKER

I have already ruled that we must not at this stage discuss the Economy Bill.

Mr. HARNEY

I will blot it from my mind; I will forget that I was in this House a few days ago, arid heard it explained. Let us say that it does not exist. Am I not justified in making this broad and general survey of the operations of this Act during the last 15 years, and of the views formed upon it by the Royal Commission? Am I not justified in expressing what the Royal Commission has expressed, the hope that the Government will give effect to the view that, whatever else may be done, there will be no cutting down of the present Government contribution? I do not know what they are going to do, but I express the hope that they will pay attention to these words.

Mr. SPEAKER

The hon. and learned Member suggests that the Economy Bill does not exist, but, looking at the Order Paper, I find it set down as the second Order for Monday next, and so, in the Parliamentary sense, it certainly does exist.

Mr. HARNEY

I have only this to say. In trying to press upon the Chancellor of the Exchequer and the Government the inadvisability of not paying the utmost attention to the Royal Commission's suggestions, I would point out that it would have a further bad effect, and I will read some words to show the bad effect which it would have. The words are: If you reduce the contribution you must add to the number of societies that will be deficient, and decrease the number of societies that have surpluses. It is certain that you are going to throw the whole scheme into discredit if you are going to put a large number of societies into deficiency."—[OFFICIAL, REPORT, 22nd July, 1925; col. 2369, Vol. 186.] I adopt those words, which were used as lately as July last by the right hon. Gentleman the Minister of Health in reply to the right hon. Gentleman the Member for Hillhead (Sir R. Borne). I feel as a member of the old guard of a once great party, which will grow again to the same dimensions, that we have something of which to be proud.

Mr. CHAMBERLAIN

Is the hon. and learned Gentleman quoting from me?

5.0 P.M.

Mr. HARVEY

Not now. The last thing I would expect would be that the right hon. Gentleman would have so expressed himself, however much he might have felt those sentiments. It is a great satisfaction to know that the scheme which was so bravely and boldly and with so much originality started by my right hon. Friend the Member for Carnarvon Boroughs, and which met with scoffs, jeers and ridicule from the party opposite, has now, after 15 years, been acknowledged by all to be the foundation of the social services of this country, and that the very parts of it which were most condemned and which were most insisted upon by my right hon. Friend, namely, the utilisation of the approved societies and increased benefits from surpluses, have been the parts that a body of experts which sat for eight or nine months has now said are the most fundamentally sound of the whole scheme. In a Report of 200 pages, in which they have many recommendations and alterations to suggest, they all say, minority and majority, that this part of the scheme is impregnable and should stand.

Mr. ERNEST EVANS

To those who remember or have been told of the Debates which took place in this House and outside at the time when the National Health Insurance Bill was first introduced and discussed, to-day's Debate must be full of information, interest and significance. In those days my right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George) was told that he would never be able to fulfil his promises, and they were described by the opponents of the Bill as being far too rash, The benefits, he was told, would never emerge from the Welsh mists from which they were supposed to come. We have now had 15 years' experience of the working of the Act, and we find that those prophecies have been proved, like so many prophecies, to be without foundation. Not only was my right hon. Friend not discouraged by those prophecies, hut. he and his colleagues had the prudence, in the face of that criticism, to insert in the National Health Insurance Act of 1911, not only certain immediate payments, but to include in that Act a section which said that after a, lapse of a certain time and the happening of certain things, there should be extended benefits, and these benefits were set out in a part of one of the schedules.

We have had 15 years' experience of the working of the Act. The operation of the Act has been examined by an impartial Commission consisting of experienced people. They have shown that not only were those gloomy prophecies not fulfilled, but they added that the hopes held out by the Act in 1911 had been achieved and that more was capable of achievement, provided only that the Government was prepared to carry out the provisions of that Act alone, without any amending legislation—and with amending legislation even more could be done. The Report of the Royal Commission is a long document, and I am not going into it with any detail, but there arc two or three things which the Report makes perfectly clear. There is one thing it makes clear beyond any doubt at all, and that is that the Act has been a complete success. It. did not need a Royal Commission to say that, because there are millions of people all over the country who know from practical experience that it has been a success. I think I am right in saying that all social workers and people concerned for the health of the community, so far from wishing to see any impediment placed in the operation of the Act, are only too anxious to see it developed in other directions which will act greatly to the benefit of the community as a whole.

The Report of the Royal Commission makes it clear that, with certain modifications, even now a margin can be made available which would provide a sum of about 7s. a year in the case of men, and 3s. 9d. in the case of women, and they propose certain ways of utilising the surpluses which are available. For example, they propose that provision should be made out of these surpluses for the continuation of the existing medical benefits after the year 1926. Even after allowing for that they say there will be a sum of about £2,250,000 available for extended benefits out of the National Health Insurance Fund, which in 1911 we were told would be bankrupt in the course of a few years. These surpluses are avail able now in 1926, although the Fund has had to bear exceptional burdens, involved by the War. There is to be a sum of £2,250,000. I agree, of course, that there were certain provisions made to meet the special difficulties which arose, but notwithstanding that, the fact remains that despite 15 years working, the Fund stands to-day in a position in which, as the Royal Commission says, it will have a large surplus at its disposal.

The Royal Commission recommends that this surplus shall be used for extended benefits. At the moment I am not concerned with the particular benefits which the Commission suggests. But there are provisions in the Act of 1911 for extended benefit—purposes for which some of this money could be utilised. There are in the Fourth Schedule of the Act 14 extended benefits. If the Government are not prepared to include in their legislative programme some amendment of the Act. let them use some of these surpluses for the purpose of providing some of these extended benefits which are provided for in the Act of 1911. The last speaker referred to dental treatment, which is one of the 14 benefits. There is no one, I imagine, who would say that dental treatment is not a matter which is of the most vital importance to the country. As medical science develops, one thing which is emphasised more and more is the urgency of paying greater attention to the teeth of the people of our country. There is a matter on which the Government could well utilise part of the surplus; it is within the four corners of the scheme of the 1911 Act, and would do a very great deal in the way of improving the health of the community as a whole.

The Royal Commission proposes also that there should be an addition to the sickness benefit of 2s. in respect of each dependant. The first additional benefit in the Schedule of the Act is medical treatment and attendance for any person dependent upon the insured person, and the third is increased sickness benefit or disablement benefit in the case of members of the Society or if such members have any children wholly or partly dependent on them, so that the Government cannot run away from the possibility of using these surpluses for the benefit of insured persons by saying that these things do not come within the operation of the 1911 Act.

The fact of the matter is that they are not going to use the surpluses for this object for another reason. Having surpluses is such an extraordinary thing for this Government, that they think when ever there are surpluses the only thing they can do is to get hold of them as soon as they can. For that reason, insured persons are going to be deprived of surpluses built up by their contributions and the efficient management of the societies responsible for putting the scheme into operation. I join with the hon. Member for South Shields (Mr. Harney) in pressing on the Government that they should do what the Act of 1911 was intended to do, that is, increasingly as the money becomes available, to pro vide the benefits for which the insured persons contribute, and which are sorely needed in the interests of the health of the community

Sir K. WOOD

I confess I feel some little difficulty this afternoon in making the few observations that I am going to make upon the two speeches to which we have just listened. I rather took it that the Debate this afternoon was going to be a great attack on the Government as a sort of preliminary to the Committee stage of the Economy Bill. In view of the ruling of Mr. Speaker, I think it will be somewhat more difficult for me to controvert at any considerable length certain of the rather many misstatements which have been made, but I should like to make some general observations upon some of the points which have been raised.

In the first place, I join with the hon. Gentleman who has just spoken in recording my own satisfaction at the consider able success of the National Insurance Scheme, and I congratulate the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) in that connection. I do not suppose he remembers it, but I remember very well—I was one of the first 20 members to be invited by him to join the Health Insurance Advisory Committee, many years ago. As far as my attitude to this Measure is concerned, there was never any question about it, for I always believed in it. Having said that, I think it is only fair to say that I suppose no Act of Parliament has been amended so often in so short a time as this National Insurance Act, 1911, has been. It has, of necessity, been amended nine times. I am afraid it is rather an unfair criticism of the right hon. Gentleman, who said once he believed it was amended nine times in order to put right all the concessions that had been made in Committee when the Measure vas being put forward.

I am also glad to confirm the statement made by the hon. and learned Gentleman who first spoke, that the approved societies of the country have fully justified themselves in connection with the administration of this Measure. I do so all the more because, while we ale considering this. Report this afternoon, we might pay same passing attention to the Labour Minority Report. I do not know whether members of the Committee have read it. There was a Minority Report signed in connection with this inquiry by the four Labour members of the Commission, and they took a. very different view—and no doubt when the hon. Member for Westhoughton (Mr. Rhys Davies) speaks he will say whether he agrees with it or not—of the work of the approved societies. They said that the approved societies ought to cease altogether—not only the trade unionist approved societies, but all the societies. They said their work should cease and the whole of this scheme was to be smashed, and, at any rate, as far an this part of it is concerned, the duties the approved societies should be handed over to the local authorities of the country. I should he glad to know whether that is the official policy of the Labour party in this connection, because while approved societies are naturally anxious about their funds at the present time, I should think they are equally anxious about their existence.. I suppose if the Labour party had their way we should finish with the approved societies altogether. At any rate, that is the very strong recommendation of the Minority Report, consisting of Labour representatives. They want the municipalisation of insurance and they want the societies to finish and their duties to be handed over to the local authorities.

Speaking on behalf of the Government, we are very anxious indeed to see the approved societies continuing their work, and I fully agree with the view of the hon. Gentleman who has just spoken so far as that matter is concerned. He raised a more controversial matter when he recalled the beginning of the scheme and the pledge which was given to approved societies in connection with their surpluses. I think I was present at almost every important interview that took place in connection with the negotiations between the approved societies and the Government of that day, and the only pledge, as I understand it, that was ever given—and I invite anyone to try to find a different one—was that the approved societies should fully reap the advantage of any surpluses which came about as the result of good management and efficiency. But that is a. very different matter from the state of affairs that we find to-day, because if the House will look for a moment at the Report of the Com mission, they will see that both the Majority Report and the Minority Report reveal very different reasons for the undoubtedly handsome surpluses which now exist. If the House will look at page 88, paragraph 190, of the Report, they will see this: This margin is due to extraneous causes, among the most important of which is the general increase in the rate of interest on post-War investments, to which we have referred above. No Income Tax is payable on the interest earnings of approved societies, and the members of those societies accordingly secure the full benefit of this increase and are able to claim additional State grant in respect of a rate which itself reflects the weight of a national burden from which they are free. Having regard to the fact that the additional resources made available to the insured in this way and in the appreciation of investments which has already been realised will go almost in their entirety to supplement the benefits originally provided by Parliament, it is clear that the relations between the general body of insured persons and the Exchequer are more favourable to the former than has been generally supposed hitherto.

Mr. HARNEY

Read on

Sir K. WOOD

It continues: While we have felt bound here to ex plain the situation in which this result arises, we do not desire what we have said to be regarded as qualifying the recommendations which we make in later chapters of our Report in regard to the application of any margin in the existing scheme.

Sir J. SIMON

Will the hon. Gentleman say what those recommendations in sub stance are?

Sir K. WOOD

They are as to the disposal of the surpluses referred to.

Mr. HARNEY

Is it not recommended that the Government's contribution should remain unaltered?

Sir K. WOOD

My point was the pledge which was referred to by the hon. Gentle man, who put it very broadly indeed and practically stated that there was a pledge given to the approved societies that any surplus that might be found should for ever remain with them, and that that should never be altered. My point was that the only pledge given—and it was the pledge read by the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) in his speech the other day—was the pledge in relation to efficiency and good management, and that is the pledge that was constantly given during the discussion of the 1911 Act. I may say that that is the view equally taken by the Minority Report of the Royal Commission. They say, on page 307, paragraph 42, under the heading "The Incentive to Good Management ": We agree with our colleagues that the effect of this incentive upon the valuation results is grossly exaggerated, and that other factors, occupational and otherwise, are the predominating causes of the great disparities in the surpluses declared. Anybody, I venture to say, who studies the position of National Health Insurance to-day, apart altogether from any controversy which may be immediately impending, will agree that when this scheme was originally formed, obviously certain of the actuarial calculations must have been of a very tentative character. The actuary, Sir Alfred Watson, I remember very well, in those days had very little on which to base his estimate except certain tables of the Manchester Unity. No one had wide experience of a scheme of this character, and he framed a scheme as best he could upon the data that were available. The pledge that was given to the approved societies was a pledge in connection with good management and efficiency, but the right hon. Member for Carnarvon Boroughs, who, I am sure, has the welfare of the approved societies at heart as much as anybody in this House, knows that nobody supposed that in those days, when that basis was formed, the result of the second valuation would be a surplus of some £65,000,000, and that it should he available to the approved societies of the country.

I will tell the House why I venture to say that that is so, because if he thought anything like that sum would be avail able, instead of including the ordinary benefits of the scheme, as he did, in making a statutory contract with the assured, he certainly would not, nor would any prudent statesman charged with the conduct of the Measure, have allowed a large surplus of that kind to be at the disposal of a very large number of societies, who might use their surplus, some in one way and others in another way. Obviously, if any such result had been anticipated, a very different Measure would have been produced to the House. I venture to say that the Com mission are perfectly right in stating, as they did in their Report, which was quoted by my right hon. Friend the Minister of Health the other day, that obviously, when you come to look at a scheme of this kind, at this stage, after it has run for some 15 years, and you see on the one hand a large number of societies successfully administering the scheme, a number of them, it is true, bordering on deficiency, and others with a very considerable surplus, you could not fairly say you were doing any harm or injustice to any insured person by saying, in the first place: "We now invite you to review this Measure, and to see whether the contributions by the employer, the employed, or the State itself should be reviewed." Obviously, the results of this scheme could never have been anticipated, and to say—

Mr. HARNEY

Has the hon. Gentleman read that they point out that the surpluses are largely accidental, due to the War, and that their continuance cannot be reckoned on?

Sir K. WOOD

That may very well be so. It is a very extraordinary thing that, notwithstanding the dreadful disasters that were brought to so many people and institutions by the War, speaking broadly, the approved societies gained by the War, and it is true, as the hon. Gentleman said just now, that a very large portion of these surpluses is undoubtedly due to War conditions, but there is nothing either in the actuary's Report or in the Report of the Royal Commission itself which would appear to apprehend that in the future there would be any substantial lessening of the ordinary surpluses which would accrue under this scheme. A very large number of persons at the end of the first valuation thought it was a wonderful result, which could never he exceeded, yet when the second valuation came along, it was very far exceeded indeed. Therefore, the only point I am putting to the House now—because I do not want to go into the merits of the Government's Economy Bill—is that no one can get up and say fairly to their fellow countrymen to-day that we are breaking any pledge or contract by saying that the time has come for a review of the financial conditions of the scheme.

If there was one pledge more than another which the right hon. Gentleman opposite gave in connection with this scheme—and I remember it very well—it was a pledge to the approved societies of the country that they should be able to operate the scheme and to manage it. He knows as well as I do that in the initial stage of his scheme, in order to gel the co-operation of the friendly societies, the industrial societies, and the trade unions, he said: "Yes, you will all be able to work this scheme in separate societies, and if you work it well and efficiently, you shall have the advantages of your efficient management." That is true, and that was a pledge if you like, and yet I notice that, at any rate, the Labour Minority Report does not regard that as a matter which cannot be altered and that if you abolish the approved societies from this scheme you would be breaking any pledge or contract. I venture to say to the right hon. Gentleman that I do not know where we, in this House, should end, if we were not able to subject to review Acts of Parliament from time to time, when the necessities either of the State or of the societies themselves, warranted it. I am hoping, at some stage of the Economy Bill, to show the House that if ever there has been a scheme which has been constantly adjusted in relation to its financial basis it has been the National Insurance Scheme, and so far from it being the ease that the House is pledged to the exact financial basis upon which the right hon. Gentleman originally formed it, and that it must always remain so, the history of the Measure proves exactly the contrary. If hon. Members look at the question of the alteration in connection with reserve values and the periods which have been altered in that connection from time to time, very vitally affecting the finances of the scheme, they will see that it has been one constant series of alterations.

It was said by the hon. Gentleman in the course of his speech this afternoon that if the societies found themselves in a deficiency, or if the framers of the scheme demanded further money, there was a Section of the Act by which they were to levy on their members or to decrease the benefits. That is perfectly true, but it was never done, and the right hon. Gentleman knows this, that when further demands were made by the medical men of the country in respect of their remuneration, it was the State that had to come to the assistance of the scheme, and on numerous occasions it has had to come to the assistance of the scheme by putting its hand into its pocket and providing much larger sums of money, to the. tune, I think, of some £24,000,000. How, then, can you say, when one party to the scheme has already put his hand into his pocket to the extent of very many millions, that you are not dealing fairly with the situation, when you say, "The time has arrived, having regard to the great prosperity of the scheme, to the difficulties in which the State finds itself at the present time, and to the fact that you are far better off than it was contemplated you would be, to make a revision, not a revision in any way affecting the statutory benefits, not a revision in any way affecting the results of the first valuation, not a revision in any way affecting the surplus of£65,000,000 under the second valuation, but something that is coming into operation in 1931?" I venture to say there never was a more slender case, or more unreasonable case put before the House of Commons, on the ground of breach of pledge or breach of contract.

Since this Measure was originally introduced, I note that exception has been taken in regard to the provisions under the Widows and Orphans Act. I cannot imagine a more grotesque statement than that which has been made. If you look at the actuarial Report on which the Com mission founded their recommendation, one of the main things pointed out to the Royal Commission was that the very fact that persons between the ages of 65 and 70 had dropped out of the scheme relieved the societies. That is a point the right hon. Gentleman will appreciate. We relieve the societies to the extent that we have, and when proposals are made—I venture to say, very moderate proposals, Which might have been made much more extensive—all sorts of phrases are used that people are endeavouring to defraud the societies. There never was such a case based on such a slender foundation.

Sir J. SIMON

Was it, then, a mistake of the Government that the change was not made in the Widows' and Orphans' Act?

Mr. DEPUTY - SPEAKER (Captain FitzRoy)

I do not know whether the right hon. Gentleman is discussing the merits of the Act. It would be quite out of order.

Sir K. WOOD

I am relieved to have your ruling. As I stated at the beginning, I was in some difficulty, because of the demand made by the two hon. Gentlemen who preceded me. May I, in conclusion, say this? Reference has been made to the discussion which took place in this House on the 22nd July, 1925, when the right hon. Gentleman the Member for Hillhead (Sir R. Horne) made certain proposals in relation to the finance of the national scheme. No such proposals were made by him as have been intimated in connection with the Government proposals. My right hon. Friend, when he replied to the right hon. Gentle man, said: I am very glad to hear my right hon. Friend disclaim any idea of raiding the surpluses. That, in my view, would certainly be interpreted, and, I think, with some justification, as a breach of pledges which have been given to approved societies. It has been expected that the reward of efficiency of administration on their part would be the power to use these surpluses in order to give additional benefits to their members, and to say to those who have exercised efficiency in their administration in the hope of obtaining these additional benefits, I We are going to take away that which you have by your thrift and your care accumulated,' would, it seems to me, be an unjustifiable procedure."—[OFFICIAL REPORT, 22nd July, 1925; col. 2367, Vol. 186.] If I may say so, a very careful statement, as one would expect from my right hon. Friend. He emphasised what was constantly emphasised by the right hon. Member for Carnarvon Boroughs, when he gave his pledges to the approved societies in connection with this scheme, that it was their care and efficiency in administration which had earned their surpluses, and not the matters referred to in the Royal Commission's Report, which were altogether in a different category. I think this afternoon we could have received the Report of the Royal Com mission as a very valuable Report indeed. We are very grateful to the Chairman and members of the Commission for the very careful way they have examined this scheme, and we can look forward to the future administration of this Measure, because many valuable suggestions have been made which will greatly increase the efficiency of the National Health Insurance scheme. Lastly, we can certainly assure the people of this country that neither through the recommendations of this Report nor of the Government is there any likelihood of the health of the nation being impaired. As far as health progress is concerned, we certainly have a very excellent encouragement, and we look forward with confidence to the future, and say that there is no ground for apprehension from any quarter of the House that injustice is to be done either to the proposals of the Royal Commission or to those of the Government.

Mr. RHYS DAVIES

The hon. Member who has just sat down devoted practically the whole of his speech to a justification of the Government in raiding the surpluses of approved societies. That is the effect of his speech, and I regret it very much, especially in view of his persistence in calling to order those who touched on the question earlier in the Debate. He is too old a Parliamentarian to expect me to pursue that subject further. This is a very important report; and if it had been issued when no great crisis was facing the nation, it would have received considerably more attention than it does. I regard it as a very informative document, and one which, I think, will be helpful to an understanding of this great scheme of National Health Insurance. Naturally, the most important part of any report of this kind is that dealing with the recommendations of the majority, or the minority, or the compromising elements Or the Commission. But before I proceed to deal with the Report, I desire to make one observation on the statement made by the hon. Gentleman. He criticised the minority of the Commission, whom he called "the four members of the Labour party." I am glad he knows they are members of the Labour party. They may be, but I am not certain about all of them. I will read extracts from the official evidence of the Trade Union Approved Societies Association, who are, after all, the most competent people to speak on behalf of the approved societies connected with trade unions. This is what they say: The principle of administering a national public service through private organisations by the Act of 1911 was a new feature in British legislation, and was adopted in part, perhaps, because of political influence, and in part, probably, in order that the experience of many engaged in similar work might he utilised. This is what they say on the particular point the hon. Gentleman raises: The association is of opinion that it we-old not be practicable to substitute a new system for that of the approved society system at this time. It does, however, submit that a much closer approximation to the intentions of Parliament in respect of the, constitution of societies is practicable. I doubt whether the promoter of National Health Insurance, the right bon. Member for Carnarvon Boroughs (Mr. Lloyd George), ever anticipated that millions of people would be included in the scheme to be dealt with by societies without any control whatsoever over the management and administration of their affairs. The only two types who have any real control over the management of their societies, are the trade unions and friendly societies. The hon. Gentleman opposite shakes his head.

Sir K. WOOD

The Minority Report expressly said neither of these had any effect.

Mr. DAVIES

The trade union approved societies are controlled by the members; and the hon. Gentleman knows full well that in the rules issued by his Department in respect of what are called societies run by the large insurance companies, there is no chance whatsoever of any influence being brought to bear by the members upon the administration or the management of the societies.

Sir K. WOOD

I venture to quote from this paragraph of the Report of the Royal Commission, page 306: The constitution and government of the friendly societies and trade unions, and of certain of the smaller centralised or localised societies provide the opportunity for members to exercise their will; but the volume of evidence shows that insured persons as such have not exercised, and are not exercising, any real control. In those societies where the development of the fraternal spirit was expected "— I expect that must be an allusion to trade union societies.

Mr. DAVIES

And friendly societies.

Sir K. WOOD

In those societies where the development of the 'fraternal spirit' was expected, it is admitted that the insured members take no real interest in the work.'

Mr. DAVIES

I wish the hon. Gentle man would read on, because this is what follows: In the case of the large industrial companies it is not pretended that membership control is possible…it is simply that the machinery is not there. But the democratic machinery of friendly and trade union approved societies is there.

Sir K. WOOD

But not used.

HON. MEMBERS

And used!

Mr. DAVIES

As it happens, I ought to know more about that subject than the hon. Gentleman.

Sir K. WOOD

I am going by what the Labour Report says.

Mr. DAVIES

As I said, this is a very important document, and I trust the House will allow me to say one word further on the point raised by the hon. Gentleman. He declared that the Minority of the Commission wanted to smash this scheme. Nothing of the kind. If I understand the Minority Report rightly, it is this. They would transfer all the engagements of approved societies, nationalise all the assets and liabilities and hand them to a. national organisation with local autonomy of some kind, to manage and administer. There is indeed a very strong point in favour of that idea, and it is this. There is no doubt whatsoever in my mind that the separate approved society system is very much more costly than the system they are proposing. For illustration, there is a society of about 35,000 members with its headquarters in Manchester, with about 670 branches all over England, Scotland and Wales. You can imagine that in the case of a society established with its headquarters in Manchester, covering the whole of the insured population of Manchester only, the cost for postage and printing, for instance, would be very much less than in the case of a society with its head quarters in that city and a small member ship covering the whole of Great Britain. It is quite a feasible proposition; and I feel convinced that the Minority Report in that connection will be discussed in the House of Commons in due course as of practical application. But not by this Government. They would plunder the funds of the approved societies by sheer robbery—because that is what their economy proposals mean—and I am glad the hon. Gentleman has to-day been more candid than the Minister of Health was last week. If there is anything at all we want from them in connection with this Report and in connection with what the Government intend to do, it is frankness above all. For example, the right hon. Gentleman stated the other day that his proposal does not touch any of the normal statutory benefits which are given to insured persons. He was referring to the Bill, to which I will not refer. He went on to say: It does not reduce the value of the benefits received by insured persons."—[OFFICIAL REPORT, 17th March, 1925; col. 511. Vol. 193.] Those two statements are quite accurate, but they are only half the truth.

Mr. CHAMBERLAIN

I stated the truth in two halves. I began by saying what we do not propose to do, and after wards went on to say what we do propose to do.

Mr. DAVIES

And what the Government are going to do is to take away prospective benefits from insured persons. As regards the question of breach of faith in this connection I look at it in this way. Supposing the two right hon. Gentlemen on the Front bench opposite went to an insurance company and said, "We want to insure our lives,"—I do not know whether it would he wise for them just now to insure their political lives—but supposing they say: "We want to insure our lives in the ordinary way." They would be asked to enter into a contract with the insurance company upon the basis of certain financial undertakings relating to their age, health, and so forth. If that insurance company later on said to them: "We are sorry, but we are not going to pay you the money originally determined upon; we are going to make a reduction in your benefit." I am quite sure the right hon. Gentlemen would at once take the insurance company into a court of law, and claim that there had been a breach of faith. We on this side of the House want to make it clear that the Government, in taking away a proportion of the State grant in this connection, 'lave violated promises made when the scheme was put into operation in 1912.

There are in this Report three sets of recommendations. There is the Majority Report, the Minority Report, and the Compromise Report between the two. I want to ask the right hon. Gentleman the Minister of Health if he will give an answer to this question: En the King's Speech, produced when this Session of Parliament was opened, there was a definite promise made that a Bill on National Health Insurance would be submitted to Parliament. It was always anticipated that when the Royal Commission reported—and the matter had been discussed—the Government in power would adopt its recommendations and bring in a Bill to enact those proposals. That, I understand, is the usual practice. But this Government has taken note of two points only in these recommendations—out of the Majority Report. They have violated one; they have accepted the other. They are taking two points out of the Report which fit in with Tory financial policy. I would ask the Government: Is it intended to bring in a wider Measure later, and at what date, to deal with the other recommendations of the Royal Commission?

Sir K, WOOD

We cannot tell.

Mr. DAVIES

The hon. Gentleman says he cannot tell. We shall probably get to know later. I want to join with hon. Members in all quarters of the House in paying a tribute to the scheme itself and to the successful manner in which it has been operated. As I said a few moments ago there are three types of societies concerned in its administration. I think it can be said without any fear of contradiction that, so far as benefit payments go and the keeping of accounts by approved societies, the absence of any suggestion of mal administration show that these societies curing the 24 years' existence of the s theme have done their work remarkably well. I think, too, that the Department of the Ministry of Health which is charged with this scheme has also done its work quite well.

There are, however, one or two criticisms I desire to make. I was surprised that the Commission did not report in favour of bringing into the State Health Insurance scheme all young persons as they enter industry. It has puzzled me many times as to why that has not been determined upon long ago. As soon as a young person enters remunerative employment, he should at the same time enter State Health Insurance. I am very anxious indeed to see the case of young persons covered by medical attention from school right through industry to the end of their days. In school hours they are attended by medical officers; but when they leave school all that happens until they reach 16, is that they are looked at in a haphazard manner by the certifying surgeon if they desire to enter into industrial employment in a factory. There is therefore a serious gap between 14 and 16 years of age. I should have thought that, at any rate, the Commission would have reported unanimously in favour of all to whom I have referred entering the State insurance scheme at the same time as they begin to work. The Minority Report suggests that. I trust that when the Government comes to decide that issue right hon. Gentlemen will bear in mind that it is very important indeed that these young persons should be included for health insurance purposes as soon as they leave school.

I would once again refer, if I might, to the criticism made by the hon. Gentle- man on the Minority Report which declares that the State insurance scheme is not a national scheme at all. It cannot be so long as it is administered through several hundreds of approved societies. They point out, for instance, that you may have, say, a family of five, and in that family of five four are insured persons. Those four are insured, it may be, in four different societies. If they fall ill they find that their sickness, additional and other benefits vary considerably. That state of affairs cannot be satisfactory. The Minority Report, therefore, in my opinion, quite rightly condemns that system. So long as the approved society system continues, however, that condition will be aggravated and as each valuation period expires it will become more aggravated still, to the extent that you will have greater differences between these payments among members of the same family as the years go by. That is exactly what is likely to happen. In some cases the sickness benefit may be £1 per week and in others the approved society can pay only the statutory 15s. The Report in proposing to make alterations by establishing a centralised fund to prevent that kind of thing in future is in the right direction.

We ought not, I think, to pass away from this Report without mentioning the point referred to by the Parliamentary Secretary in justification of the action of the Government in connection with the new proposals. I want to point out the deadly differences between the Commission's Report and what the Government propose to do. This is what they say: No change should he made with regard to the insurance of men serving in the Forces of the Crown. This is what the Government declare: There shall be transferred to the Exchequer from the Navy, Army and Air Forces Insurance Funds the sum of £1,100,000. I dare venture to suggest that the men who are serving in His Majesty's forces will not thank the Government for what they are about to do in this connection. I am given to understand that men serving with the forces of the Crown, are being discharged suffering from consumption, and that the Government Department concerned declares that the disease from which they are suffering is not attri- butable to their service with the forces. They therefore come on to the funds of approved societies, and all they are entitled to is the maximum sickness benefit of £1 per week for six months, and at the most 10s. a week, so long as they are ill, by way of disablement benefit. I should have imagined that the Govern ment, fortified by their huge majority, which talks so much about Empire, and so forth, and about the glory of the men serving the Crown—that they, above all, would have found the means whereby to utilise that £1,100,000 in extending the benefits of these men who are suffering in the way I have described. There is the other point. This is what the Majority Report declares: We consider also that the scheme should be self-supporting, subject to the payment by the Exchequer of its present proportionate share of the post of the benefits and administration. That is a very definite proposal to the Government. This, however, is what the Government say: As from 1st January, 1926, the Treasury contribution towards benefits and administration shall be reduced from seven-ninths to six-sevenths in the case of men, and four-fifths in the case of women. Consider what has been said in this House with regard to the proposals of the Government in taking away this money? I am not given to using hard language. My nature, I think, is such that I cannot be vindictive, but I would say this, that the approved societies, at any rate, have given an indication by protest and other wise that they regard the proposals of the Government in this connection as barefaced robbery—

Mr. DEPUTY-SPEAKER

This is not a question of the Economy Bill.

Mr. DAVIES

I am sorry. I agree it is not the Economy Bill. I just want to add this: The Parliamentary Secretary referred, among other things, to medical benefit. The hon. Gentleman made the astonishing statement that the Government had some time ago had to dip into its pockets to find a huge sum of money to meet demands for medical benefits. I always understood that at the end of 1923 when the Government was in difficulty with the panel doctors, they did not dip their hands into the Treasury at all. They went to a central fund, created out of the unclaimed stamp account and other moneys in hand, which really belonged to the approved societies, but kept by the Treasury. It is not fair, it is not correct, for the hon. Gentleman to say that when the difficulties in 1924 and 1925 arose the Government itself shared part of the liability. There is one further point I want to make in this connection, and it is this: The approved societies are not entirely satisfied with the methods employed by the Ministry in dealing with the panel doctors. They think, and in my view, think rightly, that if they are going to be called upon to pay for the whole of the medical attention, they should have a say in all future negotiations between the Ministry and the doctors.

The insured population of this country will not be satisfied unless all the money that has hitherto been contributed, and all the money promised under the Act of 1911, is devoted to meeting claims for every one of the additional benefits included in the Schedule. After all, what is there wrong in a workman, when he is sick, desiring to be properly nursed, the payment for which being from money contributed by him self? What is there wrong in the ordinary workman requiring proper convalescent treatment? He does no: often get either now. What is there wrong in the average workman, when he falls sick, requiring more than £1 per week sickness benefit? I should like hon. and right hon. Gentle men opposite to say how they would like to live on £1 a week total income when they are sick! I venture to suggest that the Members of the Front Bench opposite discover that their household expenses actually increase because of sickness and the cost of medical attention. It is strange that a workman, when he falls sick, finds it presumed that he can live on a less income than he can when he is well. A strange doctrine that. That is the doctrine of the Tory party. That is the doctrine of the present Government. That is the doctrine of the Tory party to-day! I think the Liberal party are not quite so mean on this point. They have gained wisdom since 1911. I trust that, when the Government come to consider this report they will include in any proposals they may have to bring before Parliament such pro vision that all these moneys to which I have referred shall be handed to the approved societies, to whom they rightly belong.

6.0 P.M.

I would ask hon. Gentlemen opposite not to talk so glibly about millions! As I said the other night, we are told that the surpluses of the approved societies amount now to £65,000,000, but it is known that the 'Actuary has declared the it only about half that sum is avail able for distribution amongst the insured population. Supposing the sum were £30,000,000. What are £30,000,000 among 15,000,000 people? It will not provide them with 7s, 6d., or thereabouts, per head per annum for the valuation period. Consequently, I say that, whereas we are very satisfied with the information contained in this report, we are not entirely in accord with all the recommendations. We shall always stand in favour of all the contributions paid by the State, by the employers and by the insured people coming back to the pockets of those people in respect of whom such contributions have been paid.

Mr. LLOYD GEORGE

We are circum scribed in our discussion this afternoon, of course, by the Rule, which is known to everyone who has been in this House for any time, that on the Consolidated Fund Bill, or in Committee of Supply, it is not possible to discuss any thing involving legislation. I have always regretted that Rule. I think there are many circumstances in which it is almost impossible—I am not now referring to great controversial issues which divide parties, but to practical questions about which there is no real controversy—to discuss a subject in Committee of Supply with out, to a certain extent, traversing that Rule. Usually, the Chairman of Committee permits a, discussion if there be general consent among Members, but he is always at the mercy of anyone who rises to a point of Order. I can well understand an objection being raised this afternoon to any discussion which would anticipate the very controversial discussion which will take place on the Economy Bill. It would undoubtedly be unfair to force a discussion on that subject under the disguise of an administrative discussion; but, apart from that are scores of questions arising out of the National Health Insurance Act on which we might have a most useful discussion. I would ask the Government to consider the point that we have never had a re view in this House—at least, I do not recall one—of the working of that Act. The Act has been in operation since 1911. I agree that it has called for amendment, and I have no doubt, and I hope, there will be many more amendments. It was a great experiment. It dealt with the lives and habits of 15,000,000 people, and there have been changing conditions. When the Act was passed, it was quite a new idea in this country for the State to come in in this way. That was the era in which old age pensions began; and then we came to this insurance scheme. Before that the national revenues had never been hypothecated for social ser vices of this kind.

Since those days there has been a great change of opinion. National insurance has ceased to be a controversial subject. Last year a very large extension of the system was carried by the present Government, and they may make many more extensions if the revenues of the country will afford them. But now that we have had an investigation by an impartial Com mission into the working of the Act, I should think it would be very desirable, if it were possible, for the Government to give even an afternoon only for the discussion of practical issues. Controversial issues can he dealt with on Tues day and Wednesday next. Many matters wore referred to by my hon. Friend the Member for Westhoughton (Mr. Rhys Davies). There are many subjects of that kind on which it would be very desirable for the House of Commons to have a full discussion. He suggested incidentally that the Liberal party is the only party that learned wisdom. I am glad he is beginning to recognise it.

I cannot refer, controversially at any rate, to the Economy Bill, but I may be allowed to allude to the fact that it is on the Order Paper, and what I would like to ask would be this: Assuming that that were an Act of Parliament, what additional benefits suggested by the Act of 1911 will be possible if the £2,225,000 be taken away? I should rather like to know that, and I have no doubt the Department is in a position to tell us. I should also like, if it were possible, to discuss, on the assumption that that sum had already been taken out, the character of the other medical benefits—dental benefits, maternity benefits—[HON. MEMBERS: "And specialists!"] Yes, and specialists—the question of whether a man should be taken to a specialist or the specialist should be brought to him. There are many questions of that kind on which I should like to have a discussion in this House under conditions in which we would be rather contributing ideas to see whether we could not amend, strengthen and improve the Act. I know that the right hon. Gentleman the Minister of Health is not in a position to answer my question—naturally the Prime Minister alone is in that position—but I hope the right hon. Gentleman will convey the suggestion to the Prime Minister and see whether it is not possible to follow it out—to see whether, if only a Supply Day could be found for the purpose, it would not be possible by general consent to permit something beyond an ordinary discussion on administration.

Questions about insurance are not altogether administrative questions. Everybody agrees that on the whole, and within the powers which it has got at the present time, the Ministry of Health has administered the Act very efficiently, and that everybody is doing his best; but, apart from controversial matters, there is a real need for changes. If the Prime Minister could not sec his way to give an afternoon for the discussion, I think it would be desirable to consider whether it would not be possible to allow us, by the common consent of all parties, to have a discussion which would travel a little beyond the strict Rule. That has been done; I have seen it done many times when all parties were agreeable.

I believe an undertaking has been given that at 6.15 we should proceed to another subject, and I shall certainly do nothing to interfere with that understanding, and therefore I shall keep clear of controversial topics, especially as I have an opportunity to refer to them on Tuesday next; but I give fair warning to the right. hon. Gentleman the Minister of Health that I will come back again to his feathers and his pillows. I shall want to know why he made that false statement in the House, and why he misled the House of Commons, and I shall say then that he got his cheers under false pretences, which is a very wrong thing to do. As far as invective is concerned, my hon. Friend the Member for Westhoughton and I belong to a race which never indulges in invective under any circumstances; but, on the whole, he did not do badly, until he was called to order.

I should only like to say, in conclusion, that the authors of the Insurance Act have every right to be gratified with this Report. Among other things to which it calls attention, is the fact that, in spite of all the criticisms that were directed against it, no evidence was brought before the Commission to justify any of them. On the contrary, all the criticisms have been abandoned from every point of view. That is very satisfactory. The other statement they made is that the Act has been fully justified by the advantages in health and social security derived from it. Generally, they come to the conclusion that it has had a very good effect upon the health of the working population of this country. I hope that will encourage the Minister of Health in the good work, and that between now and Tuesday next he may change his mind with regard to certain nefarious projects which he entertains against this fund. I would like to say one word in reply to what fell from the Parliamentary Secretary to the Ministry of Health when he referred to pledges. He said the pledges which I gave at that time were pledges which had reference only to good management.

Sir K. WOOD

And efficiency.

Mr. LLOYD GEORGE

Good management and efficiency. But, surely, when you profit in any concern you take into account the luck which comes your way. If the rate of interest has increased, if there are certain circumstances which have spared the Fund, why should not the Fund have the advantages arising from them, just as they would have the benefit of advantages arising from good management and efficiency? It is all very well to say that the position ha-s not arisen because of good management and efficiency. To say that is, I think, taking an unfair advantage. The real complaint is that now, when there is a valuation which enables you to confer the additional benefits which were contemplated under the Act, you a-re taking them away—just at the very moment when they are practicable,

Sir K. WOOD

indicated dissent.

Mr. LLOYD GEORGE

Well, I fully realise that I cannot pursue that point. I was only saying that one word in reply to what fell from the Parliamentary Secretary, which I could not allow to pass without challenge. I cannot dwell upon it, because I respect the ruling of the Chair, but I think the Minister of Health might, somehow or other, secure the opportunity for us to review the whole question of National Insurance, seeing that it affects 15,000,000 people in this country and that the conditions are Very trying to them and their dependants.

Mc. MELLER

I am afraid, from observations which have been made already, that I shall be very much circumscribed in dealing with this question this afternoon, and I have also received an intimation that even if I were not so circumscribed, I should be limited by the time at my disposal. I do not propose to roam into matters which are to be discussed on some future occasion, but will confine myself to some of the points which emerge from the Report of the Royal Commission on National Insurance. I want to call attention to one or two remarks regarding the allegation fiat proposals may be put forward which will tend to rob insured persons of certain rights which they might naturally look forward to in consequence of the obligations entered into by past Governments in regard to the insurance scheme. I do not suggest that there is a breach of faith, and I am not going to say that you are robbing the funds.

I am, however, going to say that, as I understand the Insurance Act, there was an intention on the part of the Government when the scheme was first introduced that the societies should be solvent and that the contribution should never fall below the amount which was necessary to keep them solvent. The actuaries carefully estimated what was necessary and fixed the Government's proportion, at two-ninths although subsequently it was altered. I am not suggesting that the finances of the scheme cannot be altered by subsequent legislation because Parliament is entitled to make such alterations as it thinks are necessary. What I do say is that there is a moral obligation on the part of the Government when such an undertaking entered into to see that it is carried out and that the insured people who look forward to the maintenance of the benefit shall not be deprived of any portion of the benefits which they were led to expect as a result of economical administration by their society. And I think the good luck which has been referred by the right hon. Gentleman opposite ought to fall to their advantage.

The financial basis of the Act has been very carefully examined by the Royal Commission, and they asked for a Committee of actuaries to inquire into the finances of the Scheme and see what margin there was to be found. That Committee consisted of very eminent actuaries, and they made their report. In that report they had to bear in mind certain suggestions made by the Royal Commission, and one of them was in regard to the obligation undertaken by the Government with reference to the excess expenditure upon medical benefit. Having ascertained what margin there was and what interest could be allowed, and having suggested that the interest on the fund could be increased from 3 per cent. to 4 per cent., the actuaries make this report which is well worth the attention of the House, and I feel sure that the Minister of Health will take it into consideration when he brings forward his proposals to put into operation the recommendations of the Royal Commission. They say: We are, however, constrained to point out that the imposition of the new burden would result in increased deficiencies where deficiencies now exist, or in the creation of deficiency in certain cases where, on the present basis, surplus would have appeared. They further say: This is a grave prospect, and although the machinery of the Central Fund is sufficient, we believe, to meet the situation, we do not think we are going beyond our duty in inviting the Royal Commission to consider the effect upon the credit of the whole system of the adoption of changes such as might produce deficiency to the extent here indicated on the valuations of the societies, even though the means of subsequent adjustment existed and were ample for the purpose. That is a grave statement made by the actuaries. They have considered every part of the financial basis of the scheme, and the proposals likely to be made by the Royal Commission, and they are hound to say, after having done this, that the Government must be very careful in placing further burdens upon any particular scheme. What is the real proposal of the Royal Commission? The most important part of their Report is that which deals with the extension of benefit. Their first recommendation, which is given a position of priority, is that when funds are available to meet the costs they should be applied in the following order, and the first is the extension of suitable medical benefit. I suggest that that is a recommendation which ought to receive the earnest consideration of this House, and every means should be found to extend that benefit.

Why do I make that suggestion? I do so because the extension of medical benefit will, I believe, improve the health of the people, and naturally assist very considerably the funds of the society, and the benefits which are paid. These funds are supplemented by an arrangement under which a payment is made by the State in respect of benefits and cost of administration, and therefore if you get a relief in respect of sickness the Government will get a relief to the extent of the amount they have to pay. On another occasion I may make a suggestion to show how that economy may be pursued in respect to making provision for medical treatment. I would like to know what arrangement the Minister of Health is going to make to carry that recommendation into effect. There is a very significant Clause contained in this Report which I would beg the Minister to bear in mind. On page 83, paragraph 177 of the Majority Report, dealing with the question of surpluses in the future, the Commissioners say: But it is evident that if the upward tendency in certain of the claims for money benefit cannot be brought under control, there is little prospect of more money being released for new purposes at a later date. Consequently the putting into operation of these recommendations was somewhat pushed into the background. What is the result of the proposals put forward by the Royal Commission and the position which has been found by the actuaries. If hon. Members read the recommendations which are put forward with regard to the shouldering by the societies of the increased cost of medical benefit, and other provisions with regard to the reduction of reserved value, they will find that the Commissioners come to the conclusion that there will be a possible surplus of some £2,000,000 per annum in the next quinquennial period, and instead of £30,000,000 there will only be a sum of £10,000,000 available, to which may be added a carry forward of £15,000,000. I understand it is contemplated to throw a further burden upon the Fund to the extent of some £15,000,000, so that you will only have a surplus under the best conditions of £10,000,000.

The recommendations of the Report are very serious and they show clearly that you cannot tamper with the financial basis of the scheme. You cannot reduce the contributions of the insured person or the State without placing the whole scheme in jeopardy, and I hope the Minister will consider very carefully, apart from the financial stringency in which the country finds itself to-day, that it would be a grave scandal if this great national scheme upon which 15,000,000 persons are dependent should be brought to a state bordering on insolvency, be cause we have not observed the recommendations made by the Royal Commission which was specially set up to examine this and other questions. There will be an opportunity later on of going into the question which I should have preferred to develop now, but I desire to keep in order. I believe the party to which I belong always does keep in order, and as I am anxious to follow the great traditions of my party I will conclude my remarks.

Mr. CHAMBERLAIN

I think all those who have been present during the whole of this Debate will agree that it has been of an extraordinary character. The Economy Bill has stood like a pot of honey in the midst of the discussions, and speaker after speaker has only been pre vented from plunging headfirst into the honey by the ruling which has been given. I can assure the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) that I shall be ready to take up the pillow fight again on Tuesday next, and I may inform him that I still have some pillows in reserve which I have not yet used. The right hon. Gentleman has made an appeal to me to try and provide, after consultation with the Leader of the House, some further opportunity of discussing in a more or less non- controversial fashion the various aspects of the whole scheme of National Health Insurance. Of course, I cannot commit myself without having had an opportunity of consulting my right hon. Friend, but I cannot help thinking that he will be ready to agree with me that a discussion sue h as that would be interesting and valuable, and therefore I shall certainly ash him to give favourable consideration to the suggestion which has been put forward by the right hon. Gentleman opposite.

The Report which has been made by the Royal Commission, I think, reflects very great credit, not only upon their industry—it is a report which has evidently taken much time and trouble to prepare—but also upon their ability, because they have stated their case very clearly and given reasons for their recommendations. I think their report will lot m a fitting subject for such a discussion as the right hon. Gentleman opposite has suggested, and undoubtedly much talk and debate may be usefully given to considering in what way the present scheme is deficient and in what way it can be improved. The hon. Member for Mitcham (Mr. Meller) has picked out a paragraph in the Report, part of which he read, in which the upward tendency of certain claims for money benefit was drawn attention to. I would to call the attention of the House to a passage near the end of the same paragraph in the Report which says: But we realise that such an improvement may not be fully secured without a general and definite endeavour to keep the claims within their proper limits, regard being had, of course, to the just and equitable treatment of the insured persons. It is obvious that what the Commission had in mind was that further and more careful attention should be paid by these societies to such claims, and to make certain that, whilst all equitable demands were met, the position was not to be injured by carelessness or insufficient attention. The right hon. Gentleman opposite alluded to extended medical benefit. One of the principal defects of the scheme, and one recognised at the very beginning, was that the medical benefit provided was not sufficient. Of course, however, very wisely and properly, it was not thought advisable to try to do everything at once. It was an experiment of a very novel, bold and far-reaching character, and it was thought advisable to see how it would work before any final scheme was constructed. I think we can say now that the medical benefit provided is not sufficient, and there is no change in regard to benefit that would be more warmly welcomed by the societies generally than one which would extend the scope of the present medical benefit, and give insured persons the advantages of expert and specialised advice and treatment. I have explained elsewhere my own view that the benefits to be derived from an extended, hall marked medical service will not be con fined to the actual advice and treatment given to insured persons. I believe that general practitioners themselves, through being brought constantly into touch with these men who have made a. special study of particular diseases or particular forms of weakness, will find that their interest is aroused and stimulated, and their know ledge widened and extended, and that, therefore, even the services that we have now will be improved and strengthened by additions of that kind. Those hon. Members who have read the Report will be aware that this extended service, at any rate, is not affected by any proposals which up to the present have been made in other connections. The financial recommendations of the Commission can be effected by means of a partial pooling of services. That is not altogether a popular proposal among the societies, but, after all,—

Mr. WARNE

It depends on whether they have a surplus.

Mr. CHAMBERLAIN

No doubt the fact of their having a surplus or not does tend to throw light upon their criticism, but that is an aspect of the matter which might, perhaps, form the subject of discussion in this House. At any rate, I only wish to say that, personally, I should be very glad to confer on a proposal of that kind, and I think the House would find a great many interesting points on which light could be thrown by discussion among us at some future and more convenient time.