§ Order for Second Reading read.
§ The ATTORNEY-GENERAL
(Sir Thomas Inskip): I beg to move, "That the Bill be now read a Second time."
This small Measure is well suited to the calm and dispassionate atmosphere of the House on a Friday morning, and no doubt hon. Members will be in a state of sufficient mental activity at this early hour to enable them easily to grasp the simple proposals contained in it. As hon. Members know, an industrial assurance society or friendly society may not pay more than £15 on the death of a child of 10 years of age. There are smaller maxima for children of a lesser age. For many years, however, these societies have issued endowment policies in respect of children which provide for repayment of premiums on the death of the child. Hon. Members will easily realise that the repayment of those sums is not the mischief at which the provisions of the law to which I have just referred were aimed. Nobody would be likely to ensure a child's life upon the chance, merely, after a year, or five, or ten years, of getting back only the premiums which had been paid without interest. In the Committee on the Industrial Assurance Act, 1923, an Amendment was moved providing that the return of these premiums should not be taken into account in assessing the amount of the maximum which is the limit of permissible insurance payable upon the death of a child. In administration, the practice then was not to include those premiums in the calculation. It had been the practice of the official who was then called the Chief Registrar of Friendly Societies and of the Registrar-General not to include those premiums in that calculation, and the various societies who communicated with the officials from time to time were so informed. Accordingly, when that Amendment was moved in Committee, I declined, upon that information and being aware of the practice, to accept it as being one that was unnecessary for the purpose proposed. There was a substantial reason for not accepting the Amend- 732 ment in addition to the fact that it was unnecessary. The Bill in question dealt only with industrial assurance societies, and if the Amendment had been inserted there would have been a difference, at any rate in the letter of the legislation, between the position of friendly societies and industrial assurance societies, although there was not a pin of difference between the actual position of the two bodies in this respect.
A new position came into existence, however, when the Chief Registrar of Friendly Societies, who then became the Industrial Insurance Commissioner, thought it necessary, or at any rate desirable, to have judicial recognition of the practice which has so long been followed in not including these premiums. With that laudable object in view he directed a prosecution to be taken in a suitable case. It was heard at the Merthyr Police Court, and the magistrate decided that the practice was wrong, and that these returned premiums ought to be taken into account in calculating the maximum of £10. It was hoped the society concerned would take the matter to a higher court and would obtain a reversal of the decision of the magistrate, which would make plain that the existing practice, against which there was nothing to be said, was right. The society, however, thought it unwise, as perhaps many people will agree, to embark upon a vista of legislation, and the purpose of this Bill, therefore, is to restore the position to that which I stated it to be in 1923 and which every body believed to be the legal position, instead of leaving these societies with a number of policies issued under the impression that the law was what it is now said not to be, with the consequence that they are liable to penalties for having insured lives above the maximum which is legal.
§ The ATTORNEY-GENERAL
If the hon. and gallant Member will address these observations in an orderly way I 733 will try to obtain the information. I think it was the City of Glasgow Society, with which, I think, the hon. Member for Dundee has some connection. Clause 2 of the Bill is merely intended to restore the position with regard to policies of this kind to that which everybody believed it to be before the unfavourable decision in the Merthyr police court.
When the matter came to be looked into it was found, however, that there was one further point to be dealt with. Hon. Members are, of course, aware that industrial assurance societies and friendly societies may issue policies on the lives of certain relatives for funeral expenses. Some people may think that those policies are desirable and some undesirable, but, speaking for myself, and knowing what one knows as to the sentiments of the poor and the conditions under which many of them live, I think it is not remarkable, indeed it is to their credit, that they should desire to be provided with the cost of the funeral expenses of their near relatives.
At any rate, it has long been the practice that these policies should be issued, but, curiously enough, there is no power in the law to issue endowment policies upon the lives of these persons; with one exception, that there is a very curious provision in one of the Friendly Societies Acts which allows the issue of an endowment policy upon the life of a nominee of a member of the society, a nominee of any age. With that exception, there is no power to issue endowment policies on the lives of relatives. Hon. Members will understand that by endowment policy I mean a policy which provides for a sum payable at the end of a period or upon the attainment by the life in question of a particular age. The result is that, although such endowment policies have for many years been issued by industrial assurance societies, they are illegal. They are admirable policies. No such criticism as is directed to the policy ensuring the payment of a sum on the death of a child attaches to them in any way, but it appears that as the law stands, so we now find, these policies are illegal, though everybody has hitherto supposed them to be legal, and they certainly are not mischievous. The result would be that Section 5 of the Act of 1923 would apply, making the 734 issue of the policies a penal offence. The societies would be pursued and the holders would be entitled to certain rights which might have some effect on the stability of those societies, and would affect the policy holders who are interested in the profits of the various societies. It is desirable in this connection to restore the law and make it actually what everybody believed it to be, and the law upon which everybody has taken out these policies. Section 3 therefore of the Act of 1923, which allows a person to insure the life of a relative for funeral expenses, will be extended so as to apply to an endowment insurance upon the life in the same range of relationship.
There is a very important proviso in Clause 1. We have no intention of allowing endowment policies to be used for a purpose which was not intended, and if the life dies before the period at which the sum is payable, the only amount that may be recovered is a reasonable amount for the funeral expenses of the life insured. That will prevent anybody thinking that there is a gold mine in policies of that kind. Clauses 1 and 2 of the Bill validate the holders of those policies, and ensure to them certain legal rights. In certain circumstances which I will not detail to the House, because that is quite unnecessary, the policy holders have certain rights in some cases to a surrender value and in other cases to a free paid-up policy. In some cases, they would be entitled to the return of the premiums. It is true that these rights are not very valuable to the persons concerned, but it is not thought proper to take away those rights without giving them something in return. They are in fact secured better rights by this Bill.
Clause 3 and the Schedule of the Bill provide free paid-up policies, or for the payment of surrender values. There is this further benefit provided. It is not all policies on the life of a child that are illegal. Hon. Members will recognise that it is only those policies which insure more than the maximum amount which are illegal. We give this new right of surrender value to all policies of this character, whether legal or illegal. We are improving very much the position of the policy holders and we are making this still greater im- 735 provement. Under the law as it stands the benefits are such as give a policy holder certain rights after the payment of three years premiums and in other cases after the payment of five years premiums. Under this Bill we give these benefits after the payment of one year's premiums. After the payment of one year's premiums these rights may be claimed by any policy holder provided that he makes the claim within one year of announcing his intention to stop the payment of any further premiums under his policy. Consequently we are making a considerable improvement in the case of those who hold these hitherto illegal policies. By statutory regulations we are bringing up these policies to the practice of the best societies who have always been in advance of the statutory requirements. We are now levelling up the statutory regulations to the best practice, and we are really making a great advance so far as concerns the payment of benefits which policy holders can secure in substitution for the policies with which this Bill deals.
I hope this Bill will be considered non-contentious, because it simply deals with the two main points with which I began my observations. Clause 3 as I have said provides for surrender values. There is one matter which I hope will not escape the attention of hon. Members. In Clause 3 we have set out what is contained in another Act of Parliament, and instead of legislating by reference, we have incorporated the whole of the provisions word for word so that anyone who runs may read. I hope some of our critics will note this incident in the drafting of the Bill. I must add that inasmuch as the Bill is intended to make the law what it has always been supposed to be since 1923, Clause 4 of the Bill makes it retrospective in its operation. When this Measure becomes an Act of Parliament I think it will be found that nobody is prejudiced, that the whole position has been regularised, and I hope the result will be that the policy holders will be better off than they would have been if we had not introduced this Bill.
§ Mr. A. V. ALEXANDER
This is a Bill which requires very clear thought and explanation, and I think the House will agree with me when I say that the Attorney-General has given us a clear 736 explanation of a somewhat difficult legal position. The assurance societies found themselves in this position on account of advice which they took with a bona fide desire to have their industrial insurance business placed upon a sound basis. In 1923 there was an Amendment which stood in my name on the Order Paper to which the Attorney-General has referred, and, as I happened to be out of the House when the Amendment was called, my hon. Friend the Member for Dundee (Mr. Johnston) moved it. I returned to the House during the discussion, and it was upon the assurance which the learned Attorney-General then gave that I withdrew the Amendment.
§ The ATTORNEY-GENERAL
The words I used on that occasion were:The Chief Registrar, who will in future be the Commissioner, has consistently held that sums repaid in respect of premiums do not come within the amounts which make up the limits that are possible under the Friendly Societies Act."—[OFFICIAL REPORT (Standing Committee A), 1st May, 1923; col. 512.]
§ Mr. ALEXANDER
I am obliged to the Attorney-General for giving me the quotation. It was upon that specific assurance, from the Solicitor General of that day, that these policies would be quite legal, that I withdrew the Amendment from discussion in the Standing Committee in 1923. That has been responsible for the very serious position in which the friendly societies and industrial assurance companies have found themselves in subsequent years. I want to thank the Attorney-General for having been perfectly frank in his statement this morning. He points out that the Chief Registrar had been accustomed to deal with points of this kind as matters of administrative practice, and that in that administrative practice he had regarded these policies as certainly not being of an illegal character; but in his new capacity as Industrial Assurance Commissioner, he felt that it was necessary to have judicial authority for what he had regarded as the administrative practice previously. That decision of the Industrial Assurance Commissioner was no doubt lawful from some points of view, although in our judgment it dealt with the matter in a roundabout way. I am not complaining, but I think that, from the point of view of the anxiety of people having to handle these important 737 matters, it would have been desirable to have moved to make the law clear rather than raise the question by a prosecution with a view to getting a test case. Still, that is a question of procedure. Sometimes it is felt necessary to move by amendment of the law, and sometimes the other practice is adopted of moving by way of a test case; but the precipitation of the matter by a test case placed the great working-class insurance societies, as well as the industrial assurance companies, in a very difficult position indeed.
The essential fact is that it is necessary, not only from the point of view of the financial standing of the working-class societies, but in order to maintain confidence in the general principle of insurance, that the position as outlined in the Standing Committee in 1923 as being the law-should now be made in fact the law. That is all that the main part of this Bill really does. There is the other point to which the Attorney-General has drawn attention, namely, that while the law is being put back into its proper position, the Government are taking the opportunity of securing to the persons concerned that, in the case of these policies, whether they have been regarded as illegal or not, they shall have all the benefits in regard to paid-up policies or surrender values to which they would be entitled. The Bill now provides, not only for the granting of free paid-up policies, but also, in the case of those endowments which are specially covered by the Bill, for a surrender value of an amount fixed by the Bill becoming payable after only 12 months, although under the Act of 1923 the period was five years. It will be seen that the provisions of the Bill are very much more to the advantage of those who took out these policies than was previously the case. We have considered this matter on this side of the House, and, so far as the official Opposition are concerned, while they regret the circumstances which led up to the position that we have been discussing this morning, they regard the passing of this Bill as essential, and propose to treat it as non-contentious.
§ Sir BASIL PETO
I should like to ask whether I am right in inferring, from the very clear statement of the Attorney-General, 738 that there is absolutely no substance in an allegation which has been made in one section of the Press. I refer to a paper called "John Bull," which circularised Members by a communication received this morning saying that this Bill is a secret conspiracy to defraud millions of small investors who have taken out these policies on their children's lives, and who are to be defrauded of the premiums they have paid when they are no longer able to keep them up. I understand from the Attorney-General's statement that exactly the opposite is the fact, and that the Bill gives them further rights; and it is in order to give publicity to that statement, and to ask the Attorney-General if I rightly interpret the Bill, that I have risen.
§ Mr. KELLY
This Bill has been spoken of as a non-conteutious Bill, but I am much concerned about many of these people who have been paying for a considerable period, as the Attorney-General I think, stated, on what were illegal policies, or illegal acts of the insurance companies. Many of those people have endeavoured to recover those premiums from the insurance companies, and probably they are among those to whom the Attorney-General referred as the best insurance companies. I am not asking him to name the best, for fear that he should name some to which we should have to take very strong exception, but I know from experience during recent months that when people have discovered, after paying for a number of years, that the amounts taken from them were for policies that were illegal, these insurance companies will not return the money that these people have paid under the impression that they were doing what was legal, cither in regard to payment or in regard to the expectation of certain benefits. I do not mind naming the companies. I refer to the Pearl Assurance Company and to the Liverpool Victoria Society, from whom I have endeavoured to obtain for these poor people the moneys they have paid.
I cannot find that there is in this Bill the real remedy for that injustice to people who have paid all this time under the impression that they were doing what an Act of Parliament permitted them to do, and that they would be able to receive the benefits. I hope the Attorney- 739 General will satisfy us that such people will be entitled under this Measure to receive back the premiums which ought never to have been taken from them. There seems to have been a great desire on the part of the Government suddenly to regularise the position of these very wealthy insurance companies. We know the power that they have at this time, and we know that they can speak with a voice that even the Government have to be very careful of refusing to listen to; and it appears that these particular insurance corporations, big and powerful and wealthy as they are, have been able at any rate to wring something out of the Government that other people could not get.
§ Lieut.-Commander KENWORTHY
Before this Bill is given a Second Reading, I think some further explanation is required. As my hon. Friend the Member for Hillsborough (Mr. A. V. Alexander) said, in a speech which I found far more helpful than that from the Government Front Bench, the Opposition are not at the present stage opposing this Bill, but we want to know a little about it, because this is a matter that affects a very great number of poor people. I have heard extraordinary figures about the number of persons who are affected. The Attorney-General rather seemed to think this was a matter that must be got through very quickly and that he had not time to go into details. I really put it to him that it was owing to his mistake and misguidance of the House, if I understood the two Front Bench speeches aright, that all this trouble has been caused, and it is really treating the House of Commons without sufficient respect to say that it is very early in the morning, and we have clearer heads, we can see this thing much better than we did in Committee. The right hon. Gentleman, in other words, wrongly advised the Committee on the state of the law, and the Bill is really to indemnify him and the Government for that mistake. These airy pleasantries about the early hour, and no need of much more explanation, and no need for delay, really will not do.
I have nothing to complain of in the speech of the hon. Member for Hills-borough. I congratulate him on making 740 several points a good deal clearer. There are very serious complaints on the part of the holders of these policies dealt with under the Bill who are insured with some of the industrial insurance societies. As regards the great friendly societies and the Co-operative Insurance Society, I have heard no specific complaints, but, with regard to the private insurance companies who engage in the business of industrial insurance for profit, there are very serious complaints indeed. I should like to put this specific question to the Government, if the Attorney-General will give me his attention.
§ Lieut.-Commander KENWORTHY
Perhaps the hon. and learned Gentleman will also interrupt me in an orderly manner if I do not make myself clear. Will any insured person, as the result of the Bill, be made worse off, and if so to what extent. Secondly, with regard to Clause 3, it says:Where under any policy to which this section applies not less than one year's premiums have been paid, the owner of the policy shall be entitled at any time within one year from the date on which the last premium was paid or, if no premium has been paid since the date of the commencement of this Act, within one year from that date, to surrender the policy and to claim either a free paid-up policy in conformity with the rules contained in the Schedule to this Act; or payment of a surrender value equal to ninety per cent. of the value of the sum or sums payable under such a free paid-up policy as aforesaid, calculated in accordance with the last four rules contained in the Fourth Schedule to the Industrial Assurance Act, 1923.I have read the Schedule and am familiar with the Act. May I ask exactly how much this free paid-up policy in percentages will be worth. Supposing a person has paid £50, or any convenient sum, in premiums, how much will this free paid-up policy be worth, and how much of this is surrender value? It is worthy of notice that the surrender value is 90 per cent., not of the sums payable under the original policy, but of the sums payable under a free paid-up policy. I think I have read the Act correctly, though it is not too clear.
The next question I should like to ask is how are the rights and benefits under the Bill for insured persons who are 741 affected by it to be made known to those insured persons. This is very important indeed. I have not read the article in "John Bull," and I have not had the circular that the hon. Member for Barnstaple (Sir B. Peto) referred to. [Interruption.] I can tell the hon. Member, who I hope will not get excited at this early hour of the morning, that there is a Mr. Mashford who lives in my constituency. The hon. and gallant Gentleman on the Front Bench is good enough to be amused at the mention of Mr. Mashford's name. I know something of his activities. He has fought a very long battle on behalf of insured persons. The hon. Member for South-West Hull (Mr. Grotrian) also knows his activities. He will not be amused at the mention of his name. He will treat him with the respect with which everyone treats him when it is remembered that he has had a long life of contest on behalf of very poor people indeed. My only complaint against him is that he thinks the only evil in the world is the profiteering of industrial assurance companies, while I look at other evils as well. I will send the Lord of the Treasury a list of some of the sums that have been recovered on behalf of these poor people in the Courts at great trouble and inconvenience, and even risk, to himself. He has been imprisoned and persecuted for a very long series of years.
I do not know if the hon. and gallant Gentleman who was so amused has read the evidence given before the Parmoor Committee. They went very thoroughly into the whole question of industrial assurance companies and paid a tribute to the excellence and value of the evidence that had been given by Mr. Mashford—that was before the hon. and gallant Gentleman's entry into political life—and the Committee thanked him for his services. [Interruption.] I am making no strictures on the Committee. I am calling them to my aid and saying that this gentleman, whatever his antecedents and his past history, gave valuable evidence before the Committee, and it has been of great value in recovering large sums of money for a great number of very poor people. He came to see me yesterday. He admits that he does not want to pass any judgment on the Bill. He has given me nothing in writing about it, but there are certain matters which will need clearing up.
742 I should like to know what means will be taken to let the insured persons know their rights under the Bill. Will there be notices in the post offices or advertisements in the Press? Here you have a very large number of poor, hardworking and, in many cases, ignorant and illiterate people, and they simply do not understand very often what they are signing when canvassers get them to insure young children and that sort of thing, and, unless the Government take some means of letting them know, they will not know the benefits to which they are entitled. The fact that we have in Hull a gentleman like Mr. Mashford, who is very vigorous in the matter, does not mean that in other cities there are other people who are able to advise on the subject.
There will be many evils in the business of industrial assurance as long as it is run entirely for private gain and profit. It was to meet some of these admitted evils that the Act of 1923 was passed and the Commissioner who looks after the rights of insured persons was appointed as Industrial Assurance Commissioner. I would like to ask the hon. and learned Gentleman whether the Industrial Assurance Commissioner—of course, he is affected by this Bill—has given any figures of the numbers of persons affected under it and the sums involved. I quite understand that owing to the original mistake very heavy liabilities might have been innocently and properly entered into by large friendly and co-operative societies, and unless the law is altered they may be penalised quite improperly. At the same time, the great industrial assurance societies are well able to afford to pay for any mistakes which they have made, and, if there is anything to choose between their rights and the rights of the insured persons, steps must be taken to uphold the whole of the rights of the insured persons.
The Industrial Assurance Commissioner is supposed to, and does, I am quite sure, defend the rights of the public who are insured with the industrial assurance companies, and I would like to know whether he can suggest any machinery that can be set up to advise people who are in doubt about this Bill and about their rights, and how the machinery of the Bill is supposed to be worked. There is need of someone to defend, advise, and instruct the mass of the policy holders in 743 this class of business. They, as I say, have the scale weighted against them by the immense wealth and power of the industrial assurance companies, and, whenever I find a very wealthy and powerful corporation coming to this House in order to have legislation passed that will admittedly help it, I do not propose for one moment to allow my rights as a private Member of Parliament to be swept aside by any talk of urgency or of the early hours of the morning or by any other specious argument the learned Attorney-General may choose to use.
There is one other matter, about which I would like to ask. It has reference to Clause 4. This seems to be an amusing business which is not to be taken seriously by any occupants of the Government Front Bench. We on these benches treat matters of this kind very seriously indeed. I have been 10 years in the House of Commons, and I have seen something of the past political history of this industrial insurance. With regard to Clause 4, which is to make certain endowment policies retrospective, what will now be the limit of the amount—reference to this may be included somewhere else in the Bill, but I have not been able to find it—which can be paid on death? I understand the position with regard to funeral expenses and so on. I understand that the present amount of £15 for funeral expenses is adhered to, but what will be the new amount to be legally paid on death to the relative, or nominee in the case of friendly societies? This is rather important, as the matter is being made retrospective. I am sorry if I have taken a little time to explain a rather complicated matter. I confess that to me the Bill contains many ambiguities still, but I hope that before it finally leaves this House these matters will not only be made plain to hon. Members, but in some way, as I have suggested, to the many hundreds and thousands of poor people who are insured.
§ Miss WILKINSON
I should like to ask the learned Attorney-General whether he will make some explanation with regard to the proviso in Clause 1 read in connection with Clause 4. The proviso makes provision for the payment of reasonable funeral expenses 744 upon the death of a person instead of the full endowment policy. In Clause 4, the position is made retrospective. I can understand that, as things are at present, when a person takes out an assurance policy on the lines suggested in Clause 1, it will presumably be explained to that person that in the case of death the full amount of the endowment policy will not be paid but only reasonable funeral expenses. I think it is extremely vague to have the phrase "reasonable amount for funeral expenses." Who is going to decide what are reasonable expenses? Is the matter going to be decided by the assurance company who can get the highest paid and most efficient legal aid in this country in their dispute in connection with some unfortunate person who has been insured for a few pounds. That is the first point.
The second point is that any person who has taken out an endowment policy has done so under the assumption that if the person who is insured dies before the endowment policy matures the full amount of the policy will be paid; but under Clause 4, if it is made retrospective, the full amount will not be paid, but only what is defined "reasonable amount for funeral expenses." If that be so, it means that a person who is paying now under the assumption that the full amount will be paid if the insured person unfortunately dies will in that case be cheated out of his or her rights. The learned Attorney-General said rather contemptuously that persons must not regard this as a sort of gold mine. [Interruption.] The Attorney-General, speaking with regard to the question of reasonable funeral expenses in respect of persons specified in Clause 3, said that, instead of having the full endowment policy, they were to have this lesser sum in order—I think I quote his words correctly—"that no person should regard this as a little gold mine." May I suggest that a large number of people take out endowment policies, not hoping for the death of the person concerned, or even with any desire to murder him, as the Attorney-General seemed to imagine, but for very different and very praiseworthy reasons. They are paying now under the law as it stands on the assumption that they will get the full benefit of the endowment policy in case of the 745 death of the person insured; but under Clause 4, by making the matter retrospective, they will only get a reasonable amount for funeral expenses, the reasonable amount being decided presumably by the assurance company concerned.
I suggest that the assurance companies stand to make a very good thing out of this. I have not read the circular to which the hon. Gentleman the Member for Barnstaple (Sir B. Peto) referred, but it seems to me, on reading the Bill, that it is purely a matter of common sense. If we allow these two things to go through, it will mean that the already very wealthy assurance companies, who have persuaded people to take up those endowment policies under the definite agreement that if the person insured dies before the endowment policy matures the full amount will be paid, will now come along and say: "We are very sorry, but the law will not allow us to pay you the full amount. It will only allow us to pay a reasonable amount for funeral expenses." The assurance companies are going to make a very handsome profit out of this. They are already making handsome profits out of the stories that are told to persons. The hon and learned Gentleman should not make the proviso retrospective. When persons have paid for a full endowment policy they should get that for which they have paid. Clause 1 should only come into operation for new policies. This is the only way to safeguard these very poor people who insure under a pledge that they will get certain amounts. I do not think that it is fair that an assurance company should be allowed to put the difference into their own profits with the approval of this House.
§ Mr. MacLAREN
This is a matter of great public importance. These enormous sums are collected by the societies because of the duress and poverty of the people whom the collectors visit. Under these circumstances, any golden tale will be easily unfolded at the doorstep, with the result that many of these people become payers to these societies. We have heard much, this morning, about Mr. Mashford, who has been very active in connection with "John Bull". There seems to be a smirk go round the House when the name of "John Bull" is mentioned. I remember that during the War the name of "John Bull" was revered 746 in this House, and the editor was regarded as a great hero. The Noble Lord the hon. Member for Weston-super-Mare (Lord Erskine) smiles. Perhaps he was not here in those days.
§ Mr. MacLAREN
During the War, I used to remind my friends that the War had produced throe great persons, and one of those three was the editor of "John Bull." Justice has dealt with him. I wonder whether the present editor is to be placed under any restriction of the State in the same way as the gentleman to whom I have referred. Mr. Mashford has written many articles, and has written to Members of this House. I remember one article which appeared in "John Bull" under the name of the right hon. Member for Colne Valley (Mr. Snowden). I never read such an article in my life, and I thought: "If that article goes unchallenged, there must be something in it." Therefore, I made it my business to call at the headquarters of the Prudential Society, and there I met Sir Joseph Burn, a director of the Company, who was rather inclined to set aside anything that came from this particular journal as sensational and not worthy of much notice. I reminded him that the author of the article was a gentleman who held a very responsible position in the State, and who would not take upon himself the responsibility of saying something that he could not support. Thereupon, this very important official of the Prudential Society was good enough to say to me—I thought it was a startling statement to make—that "he was not there to apologise for the misdemeanours of the past."
Whatever may be in this Bill, good or bad, it is the duty of this House to know exactly where we are going if the Bill becomes law. It is common talk in and around the insurance offices that this Bill would be rushed through the House. I have heard a rumour—I do not know whether it is true—that if the Bill was stiffly opposed, it would be withdrawn. I have rather kept in check much that I would have liked to say. In my own division, like many other divisions in this country, if one goes on to the public platform and says: "What about 747 policies?" one is inundated with letters, and innumerable people come for a personal interview. There is not a street in any poor area in this country where you cannot find dozens of victims of the harshness of these insurance societies in the past. If this Bill is going to make amends and give compensation to these people, I shall be glad, and I hope it will, but I am afraid that something much more drastic than this Bill is necessary.
The Attorney-General will find he has a very difficult task. Here is a well-rooted and well-buttressed vested interest, with enormous financial ramifications, which even influence Government circles. Past Government officials are now directors of this company. It has its fangs in every political division in the country. Indeed, covert threats have been made that those who attempt seriously to criticise this Bill will find it to their own detriment when the election comes, because the collecting agents can do this, that and the other. It is our business to do our duty to the people, irrespective of threats of any kind. I hope that the House will do its duty and that public attention will be attracted to this matter, and that this Bill will not go out as a Bill giving expression to the will and desires of this House until it has been thoroughly scrutinised and subjected to full criticism. I know the position of the Attorney-General. We have discussed this matter before. He has not an easy task. I am not here to criticise him or to say harsh words about him, but to wish him well in the job he has in hand. Those who are critical of the operations of the Bill will watch with interest what evolves.
§ 12 n.
§ Sir HENRY CAUTLEY
There are only a few words which I desire to say on this matter. In the first place, I should like to ask the House whether it is right or fitting that the hon. Member for Burslem (Mr. MacLaren) should speak in the terms that he did of a very well-known man, Sir Joseph Burn. I consider that he was unfair in what he said with regard to a mere occasional conversation. We have only heard the hon. Member's side of it. It is an extremely improper thing to do.
§ Mr. MacLAREN
I am sure that I said nothing derogatory of the gentleman in question. I thought it was a very important statement for a man in his responsible position to have made. I have said nothing about him personally. I know nothing about the gentleman. I can vouch for the statement and I gave it to the House because it should know his attitude of mind.
§ Sir H. CAUTLEY
I was a member and took a rather prominent part in the proceedings of the Committee which was appointed by the House in 1923 thoroughly to investigate the relations that existed between the large collecting societies, the smaller collecting societies and the people who insured with them. We sat for many days. We investigated the charges of harshness and oppression that were made against the collecting societies. With respect to Mr. Mashford, I can only say that although he thoroughly believed in all the cases that he brought forward, one or two of which turned out to be genuine, he was rather led away by his enthusiasm for the cases that he had taken up, and one might almost say that he had a bee in his bonnet. Every case that was brought before the Committee was thoroughly investigated. In one or two instances, or comparatively very few instances, out of eases which were made running into thousands—I forget the number—agents, for the sake of getting extra commission, had gone beyond their duty and made possibly false statements, and so vitiated the policies. There were very few cases but could have been put right in the courts of law, and were put right when taken up. The difficulty was that some of the poor people had not the means with which to seek their remedy.
§ Lieut.-Commander KENWORTHY
May I ask the hon. and learned Member a question on the report which he signed. That report, after thanking Mr. Mashford for his valuable assistance, goes on to say:While the Committee were not equally impressed by all the cases brought forward, they are satisfied that ii Hull is a typical urban centre in regard to industrial insurance, the volume of well-founded grievances under which the assured are labouring throughout the country must be serious.What does the hon. and learned Member say of that?
§ Sir H. CAUTLEY
In so far as there were any grievances they concerned lapsed policies, and we put provisions in the subsequent Act for altering the conditions of the law in this respect. This Bill rather extends that principle in the case of young children. Mr. Mashford did not particularly raise this point. It was one of the questions into which we were appointed to inquire; and we did investigate it. A question of great public interest was the amount of the costs of these small insurances as compared with the larger insurances. Industrial assurance carried on by the collection of sums of 1d., 2d. and 3d. per week by the agent calling at the house, is more expensive. It was described to us as being like selling biscuits in penny packets; the rate is much higher than if bought by the pound. The results of that inquiry and the Act which was passed have been two-fold. In the larger insurance companies the percentage of cost to contributions has been reduced from something like 40 per cent. to 15 per cent. Only a short time ago the Post Office renounced its life insurance business. I think it should have been encouraged, but the public were not attracted. I believe that industrial assurance is an absolute necessity. That in the view I formed. It confers immense benefits on the people insured, and if the insurance companies could only get down the costs in proportion to the contributions, they would be doing a great service indeed.
One other great improvement took place. We strengthened the powers of the Registrar. We gave him full power to investigate all complaints. This had an effect not particularly in the existing large companies, where there are practically no hardships except in a few cases, but more particularly in those cases where a few men formed a society, collected premiums, and then disappeared before the day of payment came. All the money went in expenses. The powers given under the Act are such that that class of business has stopped altogether. I think this Measure is a slight improvement on the existing law. It is all in the right direction. To do anything to damage the benefits conferred by industrial assurance would be a calamity to the working people.
§ The ATTORNEY-GENERAL
I can only speak again by leave of the House. Nobody can complain, and I certainly do not, that hon. Members take an interest in this Bill. I want them to look at it. The hon. Member for Burslem (Mr. MacLaren) said that nobody was going to prevent him doing his duty. We do not need that assurance from the hon. Member, and the more he looks into the Bill the more he will find, I think, that it makes a distinct improvement in the position of policy holders whose interests he desires to protect. The hon. Member for Barnstaple (Sir B. Peto) says it has been suggested that I have been engaged in a sort of secret conspiracy; I do not know whether the House thinks that I fill the role of a secret conspirator. But I have been in conference with persons who are naturally interested in the Bill, the demand for which has come from hon. Members opposite, not from hon. Members on the Government side of the House. Parliamentary questions have been put in which I have been besought for the last year to introduce a Bill of this kind, and in all cases they have emanated from hon. Members opposite. Hon. Members on this side of the House have certainly shown less interest in the Bill than Members of the Opposition.
The hon. Member for Middlesbrough, Bast (Miss Wilkinson) has asked one or two questions. I was going to suggest that if she cared to consider an Amendment making the proviso to Subsection (1) of Clause 1 applicable only to policies issued after the commencement of this Bill I think there would be good reason for it. I notice the hon. Member is not at present in her place, but no doubt this intimation will be conveyed to her. The hon. and gallant Member for Central Hull (Lieut.-Commander Ken-worthy) has been most anxious to explain that the whole trouble is due to my incompetence. I make no claim to the omniscience of the hon. and gallant Member, and I have not the slightest objection to being put in my place, even as much more distinguished people have been, by the hon. and gallant Member. All I can say is that I do not think I have made a mistake. I stated the practice, and I gave good reasons for not accepting the Amendment. The police 751 magistrate disagreed with the view which everybody else had taken; that is how the position stands.
§ The ATTORNEY-GENERAL
The Court of Appeal never dealt with the question. The only judicial person who has dealt with it is the police magistrate. Three or four categorical questions have been addressed to me and I will attempt to answer them. The first question asked was whether anybody is worse off under this Bill. Nobody is worse off under this Bill. Indeed, I am right in saying that the persons concerned are better off, subject to the criticism made by the hon. Member for East Middlesbrough to whom I have suggested a possible Amendment which would remove even that prejudice. The next question was: What are the surrender values that the policy holders will obtain? Anybods who is acquainted with insurance will understand that you want a great deal more than the amounts paid in premiums in considering surrender values. You must know the life of the assured, and the period for which the policy is taken. Therefore, the only answer I can give is that the surrender value must necessarily depend on the number of premiums paid, the amount of the policy, the age of the life assured, and the remaining duration of the policy. If the hon. and gallant Member will put down a question—I suggest that it should be an unstarred question—the information can be given. The hon. and gallant Member also inquired whether the benefits which this Bill confers will be advertised. I shall be glad indeed if anyone, including the hon. and gallant Member with his well-known powers in that direction, will advertise the benefits which this Bill confers upon policy holders. We have not proposed to set up any new department for the purpose of doing that, but no doubt the Debate in this House will make the benefits known to the persons concerned.
§ Lieut.-Commander KENWORTHY
Do I understand that the Debates in this House will be the only means of informing these people, hundreds of thousands of them, as to the position of the law?
§ Sir B. PETO
Will my hon. and learned Friend give serious consideration to the question of advertising in all the Post Offices what are the rights of the people?
§ The ATTORNEY-GENERAL
I am sure that any suggestion for making the benefits conferred by this Bill widely known will be heartily welcomed and taken into consideration. I should have thought that a Debate in this House was a very valuable way of bringing the facts to the attention of those concerned. Hon. Members have perhaps overlooked that Clause 3 provides that all policies shall set out the provisions of the Section and shall be printed in distinctive type.
§ Lieut.-Commander KENWORTHY
This is an important matter. Is Clause 3 (3) retrospective, or can it be made retrospective? Will the companies be required to inform the policy holders?
§ The ATTORNEY-GENERAL
How can it be made retrospective when it contains a provision that the policy issued shall contain a statement of the benefits mentioned in the Section? If the policy has been issued you can hardly have a retrospective Section altering the policy. The new policies will contain in distinctive form on their backs a statement of the benefits to which the holders are entitled. So far as they are retrospective we shall do all we can to bring to the attention of the policy holders the increased benefits which they secure under the Bill. The hon. Member for Rochdale (Mr. Kelly) said that he was anxious about the position. I invite him also to study the Bill and to compare the benefits in the Schedule with the benefits which persons at present obtain under policies which may lapse, and he will find that the benefits are much greater and much more easily obtained.
There is this further improvement, that it is an offence on the part of these societies not to pay the benefits which are now secured by the Bill. I believe that to be a distinct step in advance. So far as the industrial insurance societies are concerned, it is no part of my business to defend them. It was my duty in 1923 to conduct a Bill, the existing Act, through the House. It immensely improved the position of the policy holders. In connection with that Bill I had the assistance of many hon. Members opposite in making provision for persons who 753 at that time were left without protection. I believe that the present Bill is a still further step in the right direction, and I ask the House to accept it.
§ Question put, and agreed to.
§ Bill read a second time.
§ Bill committed to a Committee of the Whole House for Monday next.—[The Attorney-General.]