HC Deb 10 February 1933 vol 274 cc513-600

Order for Second Reading read.

11.6 a.m.


I beg to move, "That the Bill be now read a Second time."

The Bill is one to amend the law relating to workmen's compensation, and to ensure improved facilities, better protection, and increased benefits to the injured worker and his dependants. I have much pleasure in introducing the Bill, because it has the strongest of justifications. For many years the system of insurance against accidents and disease has become increasingly interwoven with the social structure of this country, and to-day forms a very important part of that social structure. A brief summary of the development of the compensation law in this country will show a tendency towards a complete system of insurance against all occupational accidents and disease. Until 1880 an injured workman was only able to claim damages against an employer for injuries received, and to justify his claim he had to prove negligence not only on the part of his employer, but on the part also of his employer's servants. The various defences available made it very difficult for a workman to proceed, and the glaring legal injustice which governed the relations of employers and employed in industrial accidents made it very clear that a change was necessary.

In 1880 the common law was supplemented by the Employers Liability Act, which gave an injured workman the right to claim damages in certain specific cases, but even then the employers' liability was only very slightly modified. After years of experience it became evident that the right of the injured workman was very limited and inadequate, and it was necessary to form a scheme under which an injured workman would be entitled to claim damages for accidents received in the course of his ordinary employment. In 1897 a new principle was introduced into the industrial law of this country. At common law and under the Employers Liability Act the compensation of the injured workman was based on the pecuniary loss or the loss of wages suffered, but the Compensation Act, 1927, produced a principle which gave to the workman the right to claim damages for loss of earning capacity. There was no need for him now to prove negligence on the part of the employer, or to argue for any of the specific causes contained in the Employers Liability Act. All that was necessary to prove now was that he had received personal injuries arising out of and in the course of his employment.

The scope of the 1897 Act was very limited. The benefits paid were meagre, and I believe it was the hope of the framers of the Act that all disputes arising would be settled by joint committees of employers and workmen, but this hope was not fulfilled, and the compensation law of this country became a very fruitful source of litigation. It became necessary to expand and extend the scope of the 1897 Act, and the 1906 Compensation Act was introduced, which extended its scope and also increased the benefits to the injured workman. That Measure was further extended by the 1923 Act, and this Bill is the next step in the logical sequence of development.

The Bill is of a comprehensive nature. The first six Clauses deal with the right to compensation. First, there is the liability of an employer with respect to any accident received by a worker. Liability exists whether such accident arises in the course of the workman's employment, whether it occurs while he is travelling to or from his place of work, whether he is waiting for means of transport directly or indirectly provided by his employer, and whether he is paying for travelling therein or not. His compensation is payable for all personal injuries arising in connection with the workman's employment. This wording is inserted as against the wording of the present law— "arising out of and in the course of employment"—which has been the cause of so much litigation. A workman under this Bill is defined as a person engaged either by a contract of service or apprenticeship … whether by way of manual labour, clerical work, or otherwise, and whether the contract is expressed or implied, is oral or in writing. Under the principal Act the term was applied to a workman whose remuneration was up to£250 a year, but this was extended in the 1923 Act to apply to a workman whose remuneration was up to £350 a year. This Bill provides that only those engaged other than by way of manual labour whose remuneration exceeds £500 a year are to be excepted from the provisions of the Act. There are other exemptions which are not changed so far as the 1906 Act is concerned. The dependants entitled to compensation will include such members of the family as were wholly or in part dependent on the workman at the time of his death. The term "member of a family" is very clearly defined in Clause 4 of the Bill. Therefore, the first six Clauses deal with the right to compensation, the liability of the employer, the definition of a workman, and the definition of a dependant or member of a family.

Clauses 7 to 13 deal with the amount of compensation. The Bill introduces a very radical and necessary change in the amount of compensation. Taking fatal cases, in addition to a maximum sum of £20 to meet funeral expenses, the Bill provides for all extra medical and nursing expenses to be paid. Frequently the serious nature of the accidents received by workmen calls for expert medical advice and treatment, and requires great care and nursing, but for certain reasons, family considerations, poverty conditions, these are unobtainable, and the result is that much greater suffering than necessary is caused, and even when these things are obtainable they mean great expense and great sacrifice, which in turn entail years of hardship in order to pay back the debt incurred. In order to avoid this greater suffering and the unnecessary debt to the family the Bill provides that all nursing and medical expenses that will facilitate the recovery of the workman are to be provided.

Then with respect to weekly payments, we all realise that money cannot compensate for the loss of a parent. Therefore the Bill attempts to minimise as much as possible the loss to the family income, and it proposes that a sum of 30s. a week shall be paid to a widow or invalid husband who was solely dependent on the workman at the time of his death. If there are any dependant children, then the additional sum of 10s. a week shall be paid. If the children are left orphans at the time of the workman's death the payment shall be 15s. a week, and provisions are made that a relative, or some other suitable person, can act as foster-mother in order to care for the home and the children. The foster-mother is to receive the same weekly payments as if she were the widow of the deceased workman.

There is another class that has not been provided for in previous Acts, and that is the invalid child. The Bill provides that the invalid child shall be paid compensation regardless of age as long as the court reasonably considers that the father would have cared for the child if he had been alive. This principle is largely recognised by the Ministry of Pensions, and what applies with respect to the Ministry of Pensions to the orphans of deceased soldiers ought equally to apply to the orphans of industrial soldiers. Then with regard to partial dependants, a sum reasonably proportional to the pecuniary loss shall be paid to the partial dependant. Provision is made that the amount of compensation paid per week shall not be more than the normal average earnings of the workman, but in the event of, an invalid husband or a widow having one or more children dependant provisions are made that the compensation shall never be less than £2 a week.

With regard to total incapacity, it is very difficult to understand why it has always been deemed necessary that the income of an injured workman should be less than the wages he receives when working. Indeed from the need point of view the income should at least be equal, or the compensation should be equal, to the wages earned, because injuries mean expense not only upon the injured workman himself but added expense on the income of the family—the call for special appliances, travelling for treatment, increased nourishment and bed clothes and domestic necessaries. It cannot be argued that there is danger of malingering, because we have sufficient experience in this country. Take clerical workers and others who are paid their full wages, plus their National Health Insurance benefits. There is no question of malingering in such instances. Insurance companies and employers are sufficiently safeguarded by the courts of referees, by medical boards, by assessors and by courts of law, to prevent the possibility of this danger, even if it does exist. Therefore in the absence of any logical or adequate reasons why the compensation should be less than the earnings of the workman, provisions are made in the Bill that the compensation shall be equal to the normal weekly earnings of the workman up to a maximum of £3 a week, and in order to meet the views of those who believe that such a course is rather extreme it is provided that in the event of 75 per cent. of the wages of the workman being more than £3, the compensation payable shall be 75 per cent.

Take partial incapacity. There is no justification why an injured workman should suffer any monetary loss whatever. Whatever amount the partially incapacitated workman is able to earn in any trade or business, the compensation to be paid shall be the difference between that particular wage and his pre-accident wage; and the compensation paid for total incapacity shall not be reduced even when the workman has partially recovered, unless there is suitable light work available. This removes a very grave scandal. Thousands of partially recovered workmen to-day are deprived of their right to compensation. They are sent before the medical referee. He certifies that they have a 30 per cent. disability. There is no light work available. They are unable to compete in the open market with able-bodied workmen, and large numbers of these people who ought to be paid compensation at the present time are either in receipt of unemployment benefit or public assistance. The Bill removes this grave injustice by placing upon the employer the responsibility of finding such light work as the injured workman may be certified for, and unless that light work is available full compensation is to be paid on the basis of total incapacity.

There is another feature of compensation which has not hitherto been recognised, and that is compensation for disfigurement. In my opinion this is a justifiable claim. Why should a young boy or young girl on the threshold of life, permanently maimed or disfigured, or why should any person who is permanently maimed or disfigured by the loss of an eye or a limb or the distortion of limbs and features, have to go through life and be paid only a few pounds of compensation? A large number of insur- ance companies and employers evade their obligations in this respect. Occasionally we find cases where the employers are prepared to pay pounds weekly in wages to a man for doing what a boy can do, in order to produce in court figures to prove the earnings of the workman.

After the War, in the fixing of pensions for soldiers, no questions were asked regarding the earnings of the soldiers. There the ratio of disability was fixed. This Clause means that the principle at present operated by the Ministry of Pensions with reference to maimed or disfigured soldiers is to apply equally to the industrial soldiers. With respect to the computation of earnings the Bill removes another grave injustice. Under the Bill the computation of the earnings of an injured workman is to be made on the full normal working week of the workman. The incidence of employment and stoppages for unemployment and sickness are not to be taken into consideration as under the present system, which operates very unfairly to the workman and materially reduces the amount of compensation payable. The computation, according to the Bill, shall be on the full normal working week of the workman. Those are the Clauses relating to the amount of compensation and in order to make it as easy and simple as possible for the workman to obtain his compensation it is provided that it shall be payable through the Post Office in the same way as Old Age Pensions are at present.

Part 2 of the Bill is a complete departure from present practice and introduces an entirely new principle into the compensation law of this country. I believe that the time has come when the State ought to take over every branch of insurance, but if were to discuss that wider aspect of the question I should probably be ruled out of order on this occasion and therefore I confine myself to the proposal in the Bill. That is that the State should take over one branch of insurance, namely, workmen's compensation insurance—take it out of the hands of insurance companies, and have it administered by a specially appointed board. It is proposed that the guiding principle should be the merits and justice of each case, without regard to any legal precedents. What is the present practice? Certain legal liabilities thrown upon employers in respect of compensation are taken over by insurance companies over a certain term for the payment of certain annual premiums. We all know that insurance companies are not in business for fun, or for the benefit of their health. They are not philanthropic institutions. They are not even the Society of Friends. The primary object of the insurance company is financial success and that success is measured by large dividends and swollen reserves. It is therefore clearly in their interest that the compensation paid should be as low as possible in proportion to the income received from premium.

The companies having taken over the liabilities of the employers, it is clearly to their interest to get out of their obligation as cheaply as possible. That may be good business, but I doubt the moral justification of making profits out of the sufferings of injured workers. We can see how far-reaching are the effects of this system when we realise the large number of accidents which take place annually. According to the Home Office returns for 1931 the number of fatal accidents that year was 2,315, and the number of non-fatal accidents was 396,571. For the 10 years ended in 1931 the number of fatal accidents was 26,456, and the number of non-fatal accidents 4,447,808. In the majority of these cases the insurance companies have a direct financial interest, and it is naturally to their interest to keep the amount of compensation as low as possible and to pay no compensation in as many cases as possible. The Home Office annual statistics dealing with compensation proceedings for the year 1931 demonstrate the truth of that statement. In the statement showing accidents and compensation proceedings for the 10 years ended 1931 the figure of proceedings is 59,783 and the number of appeals to the High Court is 797 or an average of proceedings of 5,918 per annum, and of appeals to the High Court of 80 per annum. For the year 1931 the figure of proceedings was 6,232 and the number of appeals to the High Court 83. The number of cases finally settled in Court out of the original claims was 2,644 representing 69.3 per cent.

These figures show that compensation is looked upon more in the light of a claim at law than an insurance against accidents, and that view is understandable while our present compensation law is a continuance from the common law right to claim damages for injury. I believe that the time has come, however, to take this whole question out of the litigious atmosphere which now surrounds it. The present method of administration, too, is very wasteful. The insurance company in addition to paying compensation has to provide for overhead charges, management costs, payment of commission, interest on capital and medical and legal expenses. The Home Office returns show how serious is this aspect of the question, but the position was far worse prior to 1924. Then, no limitation was placed upon the amount which the companies took out of the income from premiums on account of administrative charges and profits, and, for a period of eight years, for every £100 received in premiums only about £36 was paid in compensation, and the £36 included medical and legal expenses. The remaining £64 went in administrative charges, profits, and accumulation of reserves.

This injustice could no longer be tolerated and in 1932 a voluntary agreement was arrived at between certain insurance companies and the Home Office. The agreement limited the amount of administrative charges and profits in accordance with the amount actually paid in compensation, legal and medical expenses. But even now, from the statistics for 1931, we find that our of a sum of £5,304,411 received in premiums only £2,973,704, or 56.06 per cent., was expended in payment of compensation, and that sum included all legal and medical expenses. Of the balance, £1,747,928, or 32.95 per cent., was spent in commissions and expenses of management, in the ratio of 8.72 per cent. and 24.23 per cent. respectively, leaving £582,779, or 10.9 per cent. for profits. These figures do not include one item of profit interest and dividend on reserves. It will therefore be seen that the cost of the administration of workmen's insurance in 1931 was 43.94 per cent., not including legal and medical expenses. These must be enormous and would substantially reduce the amount of compensation which reached the pockets of the injured workers. In fact, the Lord Chancellor admitted that a large amount of the legal and medical expenses was unnecessary. On the 7th June, 1932, a deputation representing the Trades Union Congress met the Lord Chancellor and among other matters said: In the case of workmen's compensation, there is little ground for complaint as to delay in the county courts … but the cost of such a case on the workman's side would be anything from £35 to £80, which is surely out of proportion to the claim of an injured working man fighting to establish a maximum income under the Workmen's Compensation Acts of 30s. per week. That was the case put to the Lord Chancellor in June last by a deputation from the Trades Union Congress, and, in reply, the Lord Chancellor said: In the Lord Chancellor's opinion the expense caused by calling too many expert witnesses, medical experts, in workmen's compensation cases was indefensible, and their evidence was very conflicting. He appealed to the deputation to set their face against producing an unnecessary number of witnesses. He was in entire agreement with the memorandum of the Trades Union Congress. The Trade Union movement have to follow the pace set by the insurance companies, who endeavour to get the best legal and medical experts, and therefore those who are defending the workers have also to get the best legal and medical advice that is possible. The pace is set by the insurance companies; and these figures show that a great deal of unnecessary expenditure is involved in legal and medical evidence. But not only is the present method of administration wasteful; it is also dilatory and inefficient, from the point of view of the workers. There is no close connection between an injured workman entitled to compensation and insurance companies who have to pay compensation. The insurance company on being notified by an employer that an accident has taken place either sanction or withhold payment, and, if they withhold payment, it causes a great deal of unnecessary delay. The wages of an injured workman cease immediately he is involved in an accident and, therefore, one can realise the necessity for compensation being paid with as little delay is possible.

The Bill proposes that this branch of compensation shall be taken out of the hands of insurance companies and administered by a specially appointed board, which is called in the Bill the Workmen's Compensation Board. This is to consist of seven members appointed by the Secretary of State, one of whom, the chairman, shall be a member of the legal profession; two to be appointed from nominees of the Trades Union Congress, two from nominees of employers' organisations, and the remaining two to be appointed because of their special knowledge of medicine and finance respectively. The members of the board are to devote the whole of their time to the work, and their salaries are to be fixed by the Secretary of State. They will have equal powers with a judge of the High Court for compelling the attendance of witnesses, and demanding the production of whatever books, papers and document they may require in respect of their work. They will also have the power to appoint their officers and special advisers, and will have exclusive jurisdiction as regards anything arising under the Bill, including compensation claims, and no action can be taken in the courts for the recovery of compensation.

They will not be bound to follow strict legal precedents, but will decide on the merit and justice of the case. The Board will report every year to the Secretary of State its work, proceedings and transactions, and that report is to be laid before Parliament. It is no use setting up a board unless you provide funds and, therefore, the Bill proposes that an accident fund shall be established to bear the burden of Workmen's Compensation Insurance. It is to be established by a loan from the State and will afterwards be maintained by premiums paid by employers. The Treasury will advance any sums required for the purposes of meeting claims on the accident fund, and the sums advanced, together with interest thereon as fixed by the Treasury, will be charged on and payable out of the accident fund. The employers will have to furnish a statement with regard to the number of employés and the amount of wages paid in the preceding year and an estimate of the amount of wages to be expended in the current year. Penalties are imposed on employers who do not complete these returns. The board will have the power to test any of these returns and will be able to inspect the establishment of any employer who is liable to contribute to the fund, in order to ascertain whether all precautionary measures are taken for the safety of the workers and the prevention of accidents.

At present there is no close connection between compensation and prevention, and it pays employers to pay premiums rather than to instal more safety devices. The only national organisation for the promotion of safety is the Safety First Association, which is a voluntary effort. Only a comparatively small number of employers give support to it, and insurance companies hardly any at all. The Bill gives power to the board to assist and to co-operate with any organisation in every direction possible in order to prevent accidents, and to carry on research work in order to prevent the growth of and to stamp out industrial diseases. If a board of this kind were in existence co-operating with the Department of the Home Office which is doing such good work in this direction, as has been shown in the exhibition of the Home Office recently, it would be of immense value not only to employers, but to the workers. The employers will be assessed by a percentage of the pay rolls or a specific sum as may be decided by the board. Assessment by percentage of pay rolls is new in compensation in this country, but it is in existence in other countries, and I see no reason why it should be any more difficult than in Income Tax. In fact, it should be easier, because the employer will know perfectly well that there is a liability for an accident at any time in his industry, and a consequent claim on the fund by the workman which would disclose failure to make the return if such had been the case.

The industries are to be classified in accordance with their various risks. The machinery for settling claims under this Bill will be provided by dividing the country up into areas in accordance with the decision of the Secretary of State. A compensation officer and a local committee will be appointed for each area. The committee will consist of an equal number of representatives of employers and workmen, with a chairman who shall be a member of the legal profession and who shall devote the whole of his time to the work. Claims in the first instance will be determined by the compensation officer for the area in which the workman was injured, and he must give his de- cision in writing within 14 days of receiving the claim. In the event of the applicant being dissatisfied with the decision of the officer, he has a right of appeal to the local committee, which must give its decision in writing within seven days. There has, therefore, to be a decision either of the compensation officer or of the committee within a period of 21 days. If the claimant is dissatisfied with the decision of the area committee, he has the right of appeal to the Board for a court of appeal, which will consist of the chairman of the Board, one representative of the Trades Union Congress, and one representative of employers' organisations.

The advantages of the Bill are manifold, and these advantages can be proved to exist in the countries that have adopted State insurance for compensation. There is, first, the question of prompt payments. In an article in the "Industrial Review" for April, 1929, by Mr. Russell Jones, solicitor for the Iron and the Steel Confederation, and who is no mean authority in compensation law, he quotes comparisons made by Mr. Hookstadt, an officer of the United States of America Labour Statistical Department: He finds in taking the average of all systems that the average time elapsing between the accident and the first payment is 40 days. At Ontario, where there is a State scheme, the average was only two days.


Is that average of 40 days for the whole of the world?


I am speaking of State schemes where they are in operation, and these figures apply to America.


Has the hon. Gentleman figures for this country?


No, there is no State scheme here. I am making comparisons where a State scheme exists. Mr. Jones also states: in America various States have different methods, and it is therefore possible to compare the varying systems of the differing methods. The following figures from the United States of America report are conclusive as to the advantages of a State scheme so far as administrative expenses are concerned. He then gives figures showing that the expenses of privately-owned companies in America average 38 per cent.; the mutual companies 20 per cent.; and the State funds 4 per cent. These figures show that for every £100 of premiums collected by the privately-owned companies, £38 goes in profit and expenses; in the mutual companies £20 goes in profits and expenses; while the State scheme takes £4 for expenses, and there are no profits. These figures are taken from a report of the United States Bureau of Labour statistics, and it concludes by saying: Had every compensation State possessed an inclusive State fund, and had all the employers carrying compensation insurance insured therein, it would have saved these employers in the year 1918 at least 30,000,000 dollars. The State of Ohio has a State scheme and California a privately-owned insurance. California, with 612,000 employés, costs the privately-owned companies for administration 2,088,000 dollars. In Ohio, with more than 1,000,000 employés, the cost of administration was 280,000 dollars. In Great Britain for 1931 the cost of administration was £2,330,707. The case of State insurance, therefore, is overwhelming; it will reduce the cost to employers, it will increase the amount available for benefit, and it will ensure prompt payments to the workmen. Part III of the Bill deals with alternative remedies, which do not differ very much from what is already in operation. Part IV deals with industrial diseases. The Bill provides that the workman can claim in respect of any industrial disease which is mentioned in the First Schedule, irrespective of the fact that the workman has left the industry in which he contracted the disease. He is not to be confined to the 12 months previous to the date of disablement, as he is in the present legislation. Provision is made whereby the workman suffering from an industrial disease can appeal from the certificate of the certifying surgeon or from the decision of the medical referee. The powers granted to the medical referee are too great; he is judge, court of appeal and House of Lords rolled into one; and numerous shocking injustices have been done as the result of the great power residing in the medical referee. I would like to quote an extract from a paper read by Mr. Alfred Riley, of the firm of Alfred Riley and Sons, solicitors, before the executive of the Painters Amalgamation.


Would the hon. Member give us the date when that paper was read?


It was in January, 1923. This is what he said: Decisions in the Court of Appeal in Anderton, Markham, Heywood and Company showed that two medical referees entirely differed. One said a workman had never suffered from an industrial disease. Another said he was in a fearful state through such industrial disease, and finally, on a point of law, the case was re-opened. One County Court Judge and medical referee has decided that the man had never suffered from an industrial disease. Another County Court Judge and medical referee held it was such a bad case of lead poisoning that the Judge refused to allow the workman to compromise his case. More important are the cases where medical referees have refused a certificate, and members have been deprived of compensation for a long period, and ultimately when a workman has died, after a post-mortem or probably a chemical analysis of the organs, it has been clearly and conclusively proved that the man has been suffering, and compensation has been recovered for the widow. She has received such compensation by a-figment of the law, which holds the widow is not bound by the certificate, although the member is. Such an injustice will be removed by this Bill, which will give: the workman the right to appeal against the decision of a. medical referee to a panel or to three medical referees appointed by the board from a panel of medical experts.

This is an outline of the new Bill, which I would commend to the House. It will he of immense service to employers in reducing costs, as proved by the experience of other countries; it will give fair play to workmen. It will protect a workman from legal hair splitting; it will ensure for him a prompt and generous settlement of his claim; it will provide for rehabilitation; it will ensure for him the square deal to which he is entitled, and will make the securing of compensation as simple and easy a: matter as obtaining National Health Insurance benefit. I trust hon. Members will support us in the Lobby in favour of the Bill.

11.59 a.m.


I beg to second the Motion.

The party to which I belong has been, very fortunate in the ballot on this occasion. Many a time the luck of the ballot gives a Member an opportunity to bring in a Bill, and he does so, but he is not always so closely in touch with the subject of his Measure as the hon. Member for Rhondda West (Mr. John) has shown himself to be. Hon. Members opposite may not agree with the Bill, but at least they will agree that the case for it has been very well put this morning. The Bill is in four parts; the second part deals with the main principles of workmen's compensation legislation as it now exists, and other parts provide for the improvements found necessary by experience. The first workmen's compensation Measure was passed in 1897, and changes have been made from time to time as a result of the experience gained in the working of this legislation. The year 1900 brought a change, and 1906 gave us another change. During the War period there were changes; 25 per cent. was first added, and in 1921 the addition was increased to 75 per cent. After that it was found that greater changes were desirable, and the House gave power to the Home Secretary to set up a commission— the Holman Gregory Commission—which made an exhaustive report on the subject, and the outcome of that was the Act of 1923. That did not embody the complete recommendations of the Holman Gregory Report, but some of the features taken from it.

From 1923 until now there has been no material change in the law, and we claim that the time has come when something more ought to be done for the workers. The first part of this Bill states that compensation shall be paid if the injury lasts longer than three days. Under the present law compensation for the first three days is not paid unless a man has "played" one month. I never could understand that principle, but there it is, and we maintain that it is very hard upon the workman. The latest figures from the Home Office Report show that those who "played" two weeks or less represent some 38 per cent., three weeks, 17 per cent., and less than four weeks 7 per cent. Altogether more than 64 per cent. of those injured do not get anything for the first three days. I do not think the House ever intended that a man who was genuinely injured and has proved his case should lose a half of one week. Then we pass on to incapacity cases. There the Bill is only extending the principle contained in the Act of 1923, which in some cases allowed 75 per cent. of the earnings. It is rather curious how the present legislation works out. It would be almost a puzzle for a mathematician. If a man earns on an average 50s. a week he gets half his weekly earnings, but if the average is below 50s. then a sum has to be done—he gets a proportion. There are variations until the wage falls to 25s. a week, in which case the man gets 75 per cent. of his normal weekly earnings. The principle is admitted in the case of the low-wage man, but not in the case of the higher-wage man. We say the principle ought to be extended to cover a wage of £3 a week.

Then, again, we bring in a great change in what are called "normal weekly earnings." Owing to the depression in industry at the present time the amount of compensation paid to a man is in many cases ridiculously low. We say that the average taken now is not a fair one, because a man who has been working on short time is really a victim of circumstances. He ought not to be treated in that way when the time comes for him to be paid compensation. Therefore, we say that the normal weekly earnings shall be those for the average week for the man in any particular trade. If it is five days a week, or six days a week, then the compensation must be on that basis. That is what we tried to get into the present Act of Parliament, following on the principle already agreed upon. Then there is the other point in regard to commutation. Under the present Act, only the employer can commute compensation, at any time after six months. If the workman says, "I want to commute my claim," he cannot do that without the consent of the judge of the county court. The right ought to be given to the workman, and therefore it is added on to the Bill.

Then we come to special medical treatment. The Board will be set up, and where it thinks that special medical treatment is necessary, will give it to the workman, not at the workman's expense as it is at present. At the present time he gets it through his clubs and special medical treatment does not come within compensation. It is due to a man, and that is where it ought to come from. It is the same with artificial limbs; compensation does not apply to those. A man who is injured in industry ought to be provided for in workmen's compensation law.

The next point is in regard to payment through the Post Office. Hon. Gentlemen opposite may think that this is a small point. Let me give them an instance of the actual working of the Compensation Act. When a miner is injured and has established his claim, he has to go to the colliery for his weekly compensation. It is not a pleasant job for the workman. He has to go to the colliery office and sometimes the pay clerk pays it to him, while at other times he has to go and see the manager. That is treating the workman almost as though he were begging something from the employer. I am speaking from experience and from what men have told me. I have had to go and see employers and say that that kind of thing would not be tolerated. If the workman has a right under the law to compensation, we think that the compensation ought to be paid through the Post Office just as the legalised pension is paid at the present time. Then a man will have none of the distasteful feeling that he is getting something to which he is not entitled.

Let me turn now to the second part of the Bill. I understand that there is to be some trouble on the ground that it is going to put a lot of people out of work. I thought for a little while, after this Bill appeared on the Order Paper, that there would be no opposition to it. I have been watching very closely the quarter from which the Opposition comes, and I find that it comes from the places from which I thought it would. First of all, there is the hon. and gallant Member for Chelmsford (Sir V. Henderson). I am not bringing him into this, because he was in the Home Office before, and it is almost part of his duty to put his name down to criticise this Bill. I turn to the other people who have their names down and I find that they are all lawyers. They see that there will be less work for lawyers.


Is it not a fact that so far from this Bill taking away from the employment of lawyers it is going to create a vast number of local committees in each one of which a lawyer must be the whole-time chairman drawing a whole-time salary?


I hope to get support from the legal side, if the Bill is going to find them more work. The next five names of those who are opposing the Bill are legal gentlemen. The hon. and learned Member for Moss Side (Sir G. Hurst) is ever ready on these matters. The hon. and learned Member for Norwood (Sir W. Greaves-Lord) I have never known to miss an opportunity such as this to give his help to the House of Commons, but that help does not favour our side. I cannot understand why the name of the hon. Member for Cambridge University (Sir J. Withers) is down. I cannot see that there is any industrial centre in Cambridge. I looked his record up in Dod, and I found that—among other things—he is a member of the legal profession and that gave the answer to my difficulty. Then there is the name of the hon. and gallant Member for Ux-bridge (Major Llewellin). I did not know that he came from the legal profession—


There are plenty of industrial organisations in Middlesex.


The hon. Member for Keighley (Captain Watt) is also a legal gentleman. There are six, with the hon. and gallant Member for Chelmsford, who are fighting this Bill against the wishes of this side of the House. I take it that the second part of the Bill is going to put them out of work. It is going to take many questions out of the law courts, because is lays down that compensation will not be subject to legal precedent as it has been in the past. It has been a fruitful source of financial gain to the legal profession up to the present time, and I can well understand that the lawyers, seeing signs of unemployment and knowing what is the position of the people who are at present unemployed because they cannot get work, are fighting for their existence just like other men. I hope and trust that they will see, above it all, that this Bill is for the good of the people as a whole and not for any particular section.

Then there is the accident fund. It is proposed to create in this Bill a fund that will prevent men being done out of their compensation, as has been the case in the past. This has been one of the gravest sources of trouble in the past. I was looking up the Home Office returns this week to see what has happened in these cases. Under the heading, "Loss of compensation in cases of insolvency in the coal-mining industry," I read that in 249 cases there has been temporary deprivation of compensation while waiting for the assets to be realised. There has been 20 cases in which there has been a permanent loss, and in eight cases there remains a possibility of such los. It is probable that 1,500 claims will be affected, and the loss to them is in the neighbourhood of £150,000. Under the present Act men whose cases are recognised as genuine cases and established in the law courts, find that the insolvency of their employers means that there is no money for them.

Speaking in a general way will not impress the House as much as illustrations. In Lancashire I know of two cases. The Worsley Mesnes Colliery closed down about 3½ years ago. There were some assets, but it went into brankruptcy, and up to the present time the case has not been settled. There are 31 men who are permanently disabled and their capitalised value, recognised in the Law Courts, is equal to about £7,000. So far as we can judge, when the case is settled, these men will not get more than one-third of their value, or 6s. 6d. in the £. They will lose two-thirds of what they are entitled to. Then there is the Ashton Green Colliery which closed down over 12 months ago. There were 150 cases there waiting for some payment. I do not think that they will get a penny when the matter is settled. I may be wrong in the calculation, but one must begin to recognise that this company some two years ago had a reserve balance of £80,000, and did not provide anything for the probability of this happening. It seems to me to be wrong entirely to allow that to continue, but there it is.

In this matter I may mention the Ashton Green case—two men totally blind, three men almost blind, one man with both legs amputated, three men with fractured spines, two men with one leg amputated, one man with one arm amputated, two with serious injuries to the head, back and legs, and one man with a fractured leg, now almost helpless owing to shock to nervous system. A week ago last Sunday I had a visit from a man who came to see me to ask what was being done in these matters. He had seen my name in the paper, questioning the representative of the Home Office as to what was being done. The poor man came to ask me what the House of Commons was doing in this matter. Anyone who had seen that man would recognise that something needed to be done. He is a councillor, which shows that he is a sensible man. He is totally blind through a blown-out shot, and lost part of his left ear and three fingers of his left hand. This man got £l 8s. 7d. compensation. The colliery closed down on 4th December, 1931, and he has not had any payment since 11th December, 1931.

That is the case of a man who is blind and helpless, with no one to whom to turn. Yet through the insolvency of the colliery company, this genuine case is not likely to get a penny. I ask the House, in all seriousness, did anyone ever think that such a case would arise under the Workmen's Compensation Act at the time it was carried. But there it is, and yet as long as things continue in the present form, we may expect this kind of case to arise. This man wanted to know whether, if the present Compensation Bill were passed, it would be made retrospective. I said, "No, I do not think it will be. The House of Commons very seldom makes anything retrospective, but your case might cause such a feeling among Members of the House of Commons that they might say that no further cases like yours should be allowed to occur." "Well," he said, "if it does that, at least I shall have done something, and it will be some solace to me." We are asking in this Bill that at least this matter should be put in a better position.

Let me turn to industrial diseases. It is time that we remedied one or two points in that respect. It is time to bring about a change where a man who has suffered from industrial disease is debarred from getting work in the mines. Under the present Act, when a man suffers from industrial disease and gets out of work, before he signs on at another colliery he is asked whether he has suffered from industrial disease. If he has, and he says he has not, there is no compensation for him if that disease comes again. If he says he has had it, he has no chance of getting any work. Scores of times we have met cases where a man is faced with the alternative of saying that he has or has not had a disease. We say to him, "Whatever you do, you must play the straight game and take the consequence." But the man wonders whether it is wiser, from his own point of view, to say he has not had a disease, and so get work and chance his ever getting compensation, or to say he has had it, and continue to be among the unemployed. That is another point which ought to be removed from the Statute, and every one should be given a fair chance. If a man is not allowed to get work, at least he should be entitled to compensation.

Those are points emphasised very forcibly in this Bill. I am more concerned about, and have tried all along to get, some definite understanding that in future men who are entitled to compensation should not be debarred because of employers going bankrupt. This is not a Bill brought in in a haphazard moment. It has been thought out by the trade union movement for a number of years, sent out to various branches, examined from every point of view, and therefore is the considered opinion of men and women who are engaged in industry. Whether it be carried or not, it lays down something definite for the future that must be accepted by some House of Commons. It may be said on the other side of the. House: "When in office, why did you not bring it in?" It was not my fault. Times without number I have brought forward the need of such legislation, but not being an important individual, matters went on, until we lost our place in the seats of the Government. We are, however, bringing it in now, and trusting that this National Government will view with grave concern the present position of these workmen.

12.23 p.m.


I beg to move, to leave out the word "now," and, at the end of the Question, to add the words "upon this day six months."

The hon. Member for Leigh (Mr. Tinker)—and I think all of us in this House always admire the honesty and straightforwardness of purpose with which he speaks—has referred to one aspect of workmen's compensation, namely, the hardship created by the insolvency of companies as to which, I think, we are all agreed that something should be done, if it can be done. I would like to make that statement first of all, because I do not want any hon. Members opposite to think that the opposition to this Bill comes in any way without regard to that particular point which the hon. Member has raised. We all know that it is a real hardship, and we all know that steps should be taken to try to get over it, but I do not agree that the only way to get over it is to introduce a Bill of this kind. There are other ways of doing it, as the hon. Member knows quite well. The hon. Member for West Rhondda (Mr. John), who moved the Second Reading of this Bill, in a very able speech, spent some time at the beginning of his speech in giving us a history of workmen's compensation— a most lucid history.

I think all of us are agreed that the present law on this subject is not necessarily the last word. We are all agreed that if times were good, if trade were good, there are various directions in which compensation could be increased and improved, and I, for my part, would like to see some of those improvements made. But the improvements and the increases in compensation suggested in the Bill are much greater than many employers in this country at the present time could probably bear. The hon. Member for West Rhondda did not make any reference to what these actual increases were. I would point out to the House, from some calculations that I have made, what these increases amount to. The hon. Member pointed out that the definition of employment had been enlarged, and, of course, it has. The new definition under the Bill applies to accidents occurring in connection with the man's employment, which is much wider than the old definition of "arising out of or in the course of." The hon. Member pointed out, also, that under the Bill the first three days are to be taken into consideration for compensation in all cases, but I do not think he pointed out that the income limit is raised from £350 under the present Act to £500 in the Bill. [Interruption.] I beg pardon; he did. In the case of a fatal accident, as the House knows, the present maximum for a widow is £300. Under the provisions of the Bill, if the expectation of life of the widow is put at 67, which I think is: a low average on the figures of the Registrar-General, the amount that the widow would receive would be £2,496, which, of course, is an enormous increase on the existing figure.


From what age?


About 35. I have taken that figure as a fair average. In the case of a widow with children— say with five children aged 15, 13, 11, 9, and 7—taking the same figures for the widow's age and expectation of life, while the maximum under the present Act is £600, under the terms of the Bill the amount would be £3,926, In the case of total incapacity there is, again, a very considerable increase in the amounts. Taking the case of 10 men whose wages, we will say for the sake of argument, range from 60s. down to 15s. dropping 5s. in each case, under the present Act, for one week's incapacity—of which, of course, the first three days do not count —the amount involved would be £5 7s. 8d., while under the Bill the amount involved would be £18 15s. Taking those same 10 workmen, with the same wages, over a period of five weeks' incapacity, under the present Act the amount involved would be £53 14s., while under the Bill it would be £93 15s. The increase, therefore, in the figures for compensation under this Bill is very large, and, of course, the burden of the charge is not confined to the particular increases which I have mentioned. There are various other minor increases, to which other Members of the House who support the Amendment for the rejection of the Bill may like to refer, such as the certifying surgeon's fee, the making of future payments at post offices, the funeral expenses, and the free medical attention. I am not, of course, arguing whether these things should or should not be provided; I am merely pointing out that they are additional burdens under the Bill.

My main ground for disliking the Bill, however, is not so much the increased charges as the machinery which is provided for paying compensation. The House has heard from the Mover of the Bill that there is to be set up an ad hoc independent board, that that board is to be assisted by medical officers, staff, and factory experts, and, in the various districts, by local committees, who also will have their offices. They are to have the power to assess employers according to the nature of their business, and thereby to create, not only a fund from which the compensation will be paid, but also reserve funds, and they are to have the power to raise supplementary assessments of various kinds. In Clauses 53, 54 and 55, various provisions are made for supplementary and additional assessments to be levied on employers, and it will also be observed that the employer is nowhere given any right of appeal of any kind against any assessment which may be made. Moreover, no provision is made anywhere even for the Secretary of State to reduce the assessments if they should prove to be excessive or to have been levied in error.

I gather from Clause 64 that the assessments are to include sufficient to cover the payment of the board, the staff of medical officers, and other people under the board, the chairmen of the local committees, and their servants also. The only actual reference in the Bill to payments of that kind is a reference to the payment of the local committees, but I assume, as the Financial Clause of the Bill makes no reference to payment out of moneys provided by Parliament, that this board and their servants are to be paid by the employers as part of their assessment. That means that this ad hoc board, who will be above Parliament and independent of Parliament, are to be allowed a practically free hand as to the number of servants they employ, and as to what assessment they like to make on employers for the payment of those servants, at salaries which, I gather, will be fixed by the Secretary of State.

The House will observe that this large staff of servants who are to be employed by this State board are to have power, under Clause 47, to inspect factories, and that under Clause 36 they are to have power to undertake research—both medical research and scientific research; so that we are now to see, in these days when industry is suffering great difficulties in carrying on, and the State is doing its best to try to balance its Budget, the creation of a new State body more or less independent of Parliament, who will have a large staff carrying out work which will to a large extent be entirely redundant to the work already done by the Factories Department of the Home Office, the Department of Scientific and Industrial Research, and the Medical Research Council.

I was struck by the fact that this Bill is the descendant of an original draft Bill which was circulated as a pamphlet by the Trades Union Congress in 1928. That pamphlet contains a most interesting foreword, from which I would cull this delightful sentence: Where a liability created by Parliament makes it imperative for the outstanding majority of employers to cover their risk by insurance, we consider that it is the duty of the State to ensure that the business shall be conducted on a reasonable and economical basis. I hope the House will observe the "economical basis" on which this business is to be conducted. It may be true that under the existing system there is a burden of legal costs and of the costs of insurance, but that burden does not fall on the workman, as so many people try to make out; it falls on the employer in the premium which he has to pay. I am perfectly certain that if any employer in this country were asked to choose between continuing to pay the existing premiums which he has to pay and being assessed by this marvellous new independent board under the methods provided in the Bill, he would have no hesitation in desiring to continue the existing system.

There are many other points of criticism which can be levelled against the Bill, and I have no doubt that they will be so levelled by my other hon., and some of them learned, Friends who speak in the course of the Debate. But I have said sufficient to make it clear that the Bill does not deserve a Second Reading at the hands of this House, and I therefore move the Amendment which stands in my name.


; I beg to second the Amendment.

I wish, first of all, to address myself for one or two moments to a rather amusing remark by the hon. Member for Leigh (Mr. Tinker). I do not quite know what his estimation of the legal profession is.


Not very high!


Understanding and the determination to understand are necessary factors in real criticism, and, as I have found from time to time an extraordinary disposition on the part of the hon. Member not to try to under- stand certain things, I do not much wonder at an ejaculation that came from him a moment ago. But I do wonder at this. He has only to look at the report which has been issued as a White Paper quite recently, and he will find that the cases litigated under the Workmen's Compensation Act only amount to 1⅔ per cent. of the cases dealt with. He will also find that out of the 6,000 cases which are litigated, out of some 460,000 in all, only 83 in Great Britain find their way into the Court of Appeal, and only some seven into the House of Lords. He should also bear in mind that quite a considerable amount of the work done by the legal profession in connection with those cases is done under the Poor Persons' Rules without payment and without reward. Therefore, when he delivers his next gibe at the legal profession, he should try to recognise the facts of the situation.

As far as I am personally concerned, I care not about criticism of that kind. Ever since I have been in this House I have laboured to the utmost of my ability to improve the actual working of the Workmen's Compensation Acts. I may say, incidentally, that if the then acting Leader of the Labour party had supported me in 1923 when I went into the Division Lobby—or rather, when I moved an Amendment against the then Conservative Government concerning medical referees, there would not have been any reason to complain of excessive powers on the part of medical referees. I moved an Amendment in this House to prevent the decision of any medical referee in a workmen's compensation case being final unless both parties consented to the reference to the medical referee under an agreement that that decision should be final. It was, in fact, owing to my efforts in connection with the Bill, supported by the hon. Member who was then the Member for Broxtowe—Mr. George Spencer— that we were able to get a modification to this extent: that there should not be a compulsory reference to a medical referee unless both sides had first of all a chance of arguing out before the county court judge whether there should be that compulsory reference or not. I still think that the Act of Parliament is weak in that respect, and that far too much power was given to medical referees, but I do not think that this method of dealing with it is one that will ever create confidence, either in the administration of the Act or in the medical profession.

There is one other matter which I want to clear up. The hon. Member for Leigh has said something about two cases which I personally regard as extremely bad cases; cases where men, owing to the fact that the companies by whom they were employed went into liquidation, have been kept awaiting compensation for a very long time indeed, have had to have recourse to the Poor Law, and may possibly, owing to the expenses of the litigation, be deprived of a very large part of their compensation. I know that at the present moment very definite steps are being taken to prevent any such recurrence of such a position, and I know that those steps are being taken determinedly. I also know, and say it quite definitely in this House, that there is a certain amount of obstruction in a very limited area and among a very limited number of persons to the steps that are being taken. I have said that in this House, and I repeat it. Those who are dealing with this matter know my position and my own views in regard to it. I repeat that if that type of thing were to continue, compulsory insurance would be inevitable, and I myself, although I dislike it intensely, would feel that there was nothing left but to support a measure of compulsory insurance.


Would my hon. and learned Friend make himself more explicit in regard to the steps which are being taken?


Do they apply to coal mines only?


This difficulty has, as far as I know, only arisen acutely in the coal trade. Secondly, the steps being taken are these. Negotiations are going on in the area affected among the colliery proprietors to bring in a scheme which will prevent there ever being any gap, and which will also effectually prevent there being any deficiency. In other words, it will provide all those things which are provided in other industries by sound and well-administered insurance. Beyond that, I think that it would be absolutely indis- creet to say anything, and that it would betray confidences which I have no right to betray. But the fact remains that, if this matter is not dealt with, I am certain that the Government would be bound to come to this House and to ask for compulsory powers; and I think that they would receive those compulsory powers from this House. I do not propose to spend any great time over the changes which are to be found in the first part of the Bill, except to say that one must realise that the words which have now received a broad and fairly understandable interpretation: Arising out of and in the course of the employment are apparently to be replaced by very much wider words, simply: An accident occurring in connection with the employment. As far as I can see, those words would include the following case. Suppose that a man chose to take the tools which are his own property from his place of work: suppose that in his own home, without any possibility of supervision, he took upon himself to try to sharpen those tools by some hopelessly improper method and in doing so injured himself. That would be an accident in connection with his employer's business, and the employer would be made liable for compensation although he had no possible chance of supervision over what the man was doing. That certainly is a very tall order. I can understand people who take a very extreme view saying that that should be the case. For the employer to be held to be the insurer of his workmen wherever that workman may be, so long as, in some way or other, it can be said that he is doing something in connection with his employment, is something which goes far beyond all practical suggestions, and, in my opinion, would be bound to put a very unfair and undue burden upon those who are employers in this country. So much for that portion of the Bill, because I do not propose to deal with that matter any further. I do think that in the very admirable speech with which he introduced the Bill the hon. Member for West Rhondda (Mr. John) left out of account certain very important considerations.

This country has not yet accepted the principle that the employer must be the complete insurer of his workpeople, but the effect of the Bill, if passed, would be that he would be in the position of indemnifying his workpeople for any accident which happened in connection with the employment. You may say that that is a right proposition, if you like, but it is certainly contrary to the ordinary principles of this country, and it is one which ought to be taken into account when one considers what it really means. We provide in this country by common law, and by the Employers Liability Act, a fairly complete scheme by which the employer is bound practically to indemnify wherever a man is injured by the negligence of his employer. I am not shutting my eyes to the fact that there are difficulties about that scheme, one being the doctrine of common employment which excuses the employer where the ngligence is that of a fellow servant or of the man himself. But the fact remains that where an employer is made liable at common law, the damages are practically indemnity damages, and, in my opinion, if you were to get rid of the doctrine of common employment and put the employer at common law in the same relation to other servants as he is to the outside public you would go a long way to remove any grievance, but you would put, unfortunately, a very heavy burden on the employer for negligence which, in my opinion, he ought to bear to its fullest extent.

The Workmen's Compensation Acts have introduced a totally new principle. The principle is accepted by this country, but not on the basis of indemnity. Clearly, when you are covering men against all accidents, however those accidents may be caused, you cannot put upon one party to the contract the burden of complete indemnity and free the other party to the contract of all responsibility. As far as negligence is concerned, a man gets compensation no matter how negligent he may have been. In those circumstances, although the employer has provided every means of safety and is doing all he can to supervise the work so that there may be, as far as is humanly possible, complete safety in the works, he is liable to compensate the workman out of the Workmen's Compensation Acts, although he himself may be blameless and the accident solely caused by the man's disregard of the provisions which have been made for his own safety. To call upon one party to the contract in those circumstances to indemnify completely the other person who has brought about his injuries by his own act is a proposition which, I think, is certainly not in the interests of the men themselves. We have gone rather further than that, because at the very start we say a man may be guilty of serious and wilful misconduct, which is something much higher than negligence, and in those circumstances should not get compensation. But if that serious and wilful misconduct results in permanent incapacity or death, then, notwithstanding the fact that it has been brought about by serious and wilful misconduct, the employer is bound to indemnify.

If I may give one simple illustration of it—everybody knows quite well that the area at the bottom of a pit shaft is an area into which it is wholly hopelessly unsafe to go when the cages are moving up and down. Everybody knows that perfectly well, and everybody knows also that, not only is it prohibited by statute for a man to go into that space, but there are heavy penalties, both upon the men and upon the employer, if he does so. Yet under the Workmen's Compensation Acts, it has been held that where a man, only for a reason that can be got by inference, because there was no positive evidence as to what he intended to do, chose to leap across the space beneath the cage—which was descending the whole shaft in 40 seconds—when the cage went up, and came back again as it was coming down and was killed, the employer was bound to indemnify although he had no conceivable chance of preventing the man doing an act, which, in ordinary common sense parlance, was equivalent to suicide. Those are cases in which, according to the Bill, the employer is expected to indemnify.


Has it not to be proved that it was in the interests of the employer as well before the man can recover compensation?


It is drawn in the particular circumstances from the fact that the county court judge says, "Having regard to this man's record, I cannot conceive that he would go across unless he had some object." That is the whole of the evidence. Hon. Members opposite talk about difficulties of proof, but if you can prove that a man is doing something for the purpose of the employer on proof as slight as that, then there is not very much difficulty to prove under the present Workmen's Compensation Acts.


Has it not been dealt with and decided during the last two months in the House of Lords —the case of Thomas v. Ocean Steam Coal Company, Limited—that a person crossing the shaft bottom, if he is doing it in the interests of his employers, should be indemnified?


I have not only referred to the case, but I have referred fairly to the evidence in it. I am not dealing with an imaginative case but an actual case, and I say how very extraordinarily easy of proof those matters are and what a terrible burden it is. Let me go further. Suppose a man, for purposes best known to himself, goes into some particular part of the mine and takes it into his head to remove a particular piece of rock without having authority to do so, and being prohibited by Statute from doing so—if he chooses to do things contrary to orders which may bring about an explosion probably killing 100 men or more, 'then according to the last decision, if it can be said in any way that the removal of that rock at some time or other had something to do with the employer's business, he shall be deemed under the Statute to have acted in a manner which caused the accident to arise out of the course of his employment. Under this Bill the employer has not only to indemnify with regard to 100 men who may lose their lives but also indemnify the relatives of the man who has brought that terrible disaster upon the collieries. When one is dealing with the question of indemnity one has the right to see what it is we are asking the employer to indemnify. I do not say for one moment that these are cases that are happening every day. They are not, any more than the case to which the hon. Member for Leigh (Mr. Tinker) referred in regard to a colliery that is in liquidation, is an everyday case. These are not everyday cases but they are cases which show how extreme and how far this Bill goes in the direction of making the employer the indemnifier of his workpeople against the most fatuous and most foolish actions that they may take. I cannot help thinking that, when you realise the extent of the liability of the employer, it is going quite far enough to say that the workman should have some responsibility and should bear some part of the burden for the accidents which occur and for which the employer is liable in these circumstances. This Bill completely reverses the whole position. For the first time—I know it is recognised in another way and in other circumstances—we should have on the Statute Book the provision that where the man's wife is alive she may be ignored but a woman who is not his wife but who may be living with him may be the recipient of compensation from the employer. I will, however, pass by that.

Let me come to the general provisions. I have pointed out that so far as litigation is concerned the cases litigated are one and two-thirds per cent. There may be sometimes difficulties of machinery but in the other cases, in the main, what happens is this, notice of the accident is given and a claim for compensation is made. Within a very few days notice is given that the compensation can be obtained at the office of the employer and it is so obtained and goes on without difficulty, unless some dispute or other arises as to whether or not the man has recovered. That is what happens in the main. There may be odd cases of delay but they are part of the machinery which can be dealt with, and certainly they could be dealt with without such a revolutionary procedure as is enclosed in this Bill. Take the position in regard to arbitration. Why is it that you have not had arbitration committees at work? With organised labour as it is to-day there would have been no difficulty in any one of the industries to which these Workmen's Compensation Acts apply in setting up a joint committee.

Why is it that those committees have not been set up? They have not been set up because industry as a whole, and the workpeople represented by the large trade unions no less than anyone else, have come to the conclusion that the administration by the county court judges of this country is an administration far sounder and far more certain than the administration of any committee of arbitrators that might be set up. I doubt very much whether in any part of this country there is on the part of trade unions any doubt or any lack of confi- dence in regard to the general administration of these Acts by the county court judges and ultimately by the Court of Appeal and the House of Lords. Certainly so far as the House of Lords are concerned they have a very definite reputation which may be said to be almost overwhelmingly in favour of the workmen. Be that as it may, there can be no doubt that the trade unions as a whole in regard to the administration of these Acts would much prefer the tested and sound administration of the county court judges.

Let us see what is proposed to be set up under the Bill in their place. It is proposed to set up a Compensation Board. I do not care what language you use, there are difficulties in its interpretation. One thing is important and that is that decisions should be published and that you should get an atmosphere of certainty in regard to interpretation. Under this Bill it is proposed to set up this Workmen's Compensation Board. I say nothing about the expenditure of these various boards except this, that there have been very few Bills that have provided so many jobs or created so many officials as this Bill would do if it ever became law. You would have compensation committees, compensation officers, local area committees and the Board, and all would have to be paid out of the accident fund. Let us see who are to be the members of the Board. There is to be a member of the legal profession in the chair, but in the main the Board will be composed of men who are not trained to interpret regulations. Clause 30 provides that: The Board shall have exclusive jurisdiction to examine into, hear and determine all matters and questions arising under this Act and as to any matter or thing in respect to which any power, authority or discretion is conferred upon the Board. It is also provided that the action or decision of the board thereon shall be final and conclusive. How is the board to act? Is it to act according to law? Is it to keep a record of its decisions so that you may know in some way or in some measure how it is likely to decide a case? No. It is provided that: The decisions of the Board shall be upon the real merits and justice of the case, and it shall not be bound to follow strict legal precedent. That may sound and it does sound a very wonderful principle, and it is a very fine principle if you have the smallest idea what each board or each committee from time to time is going to consider as to what are real merits and what is justice. It is difficult enough even when you have trained men sworn to do even-handed justice to get absolute certainty in the interpretation of difficult problems, but if you have a board which is free from all control and free from all precedent, the last thing in the world you can ever get will be certainty in administration.

I speak with some experience when I say that the most vital thing in the administration of law is—while it is true that such administration must have and must keep a reputation for even-handed and impartial justice—that there should be, above everything else, certainty of administration, so that people know where they are and how the law will be interpreted. If you have a board which is to deal with matters in the way proposed by the Bill and without any control, certainty is the last thing you can ever expect or get from them. This board is not even to be bound by evidence. According to Clause 32: The board may act upon the report of any of its officers and any inquiry which it shall be deemed necessary to make may be made by one of the members of the board or by an officer of the board or some other person appointed by the board to make the inquiry and the board may act upon his report as to the result of the inquiry. In other words, those who have invested their wealth, the wealth of the country, in large industries or small industries, and who are by that industry developing the country, are to be singled out as people against whom decisions may be given without any regard to the laws of evidence, or even the possibility of their questioning the reports upon which the decisions are given. A more monstrous travesty of justice it is impossible to conceive. The hon. Member was very eloquent about the rights of workmen. No doubt a workman is entitled to even-handed justice in the courts of this country. But there is no even-handed justice in this Bill. The hon. Member entirely omitted to mention one of the parties in this matter—the employer. The Bill provides that the workman who is refused compensation or aggrieved by the award of a compensation officer shall have the right of appeal to the local compensation committee, or to the board, but the employer under this Bill has no right even to be heard. The only function he has to perform is to act as a sort of conduit pipe to forward the notice of the accident and the claim made upon him to the workmen's compensation board. Thereafter he has no voice of any sort or kind in the question as to whether the man shall get compensation, whether he is still entitled to compensation or whether he is malingering.

I am not making a general charge. Everybody knows that the number of faked claims are few and far between, but they exist. Everyone who has had anything to do with the administration of workmen's compensation knows that claims are made time and time again by men who never have had an accident. [HON. MEMBERS: "No!"] Oh yes, there are, although compared with the 460,000 claims they are an almost infinitesimal number. But because they are small in number surely the hon. Member does not suggest that there should be no means of examining claims to see whether they are genuine or not, or that the employer should have no right whatever to object. The meanest criminal in this country has a right to be heard but under this Bill the employer has no such right. There are provisions in this Measure for the assessment of the employer on a percentage of his pay roll, but he is to have no voice in saying what the percentage shall be. The board is to do all that. If he makes the smallest error in his return he may be subjected to penalties, he may be made to pay twice over the amount by which, owing to his faulty return, his total assessment is deficient. Surely that should give him the corresponding right to see that his assessment is not excessive. The hon. Member has a remarkable view of justice. If the employer does wrong he shall be punished; but if the board do wrong the employer shall suffer.


The employer is represented on the board.


As an employer on the board his voice is only one in a very large number, and in any case these are matters of calculation and assessment about which opinions vary. Why is the voice of the individual employer who is being assessed to be the one voice that is completely silenced? It does not matter how excessive the computation may be—it can be put right if it happens to be too small as there are all sorts of powers for increasing the assessment—there is not one single chance of the individual employer's voice being heard on the matter. That is a. very important thing. It is no good saying that the employer is represented on the board, that is no good. The board has to adjudicate.


The employer may give evidence.


Yes, but there is no obligation on the board to call him.




Oh, no. The actions of the board cannot be called in question. They can call him if they please, and that involves the idea that they can leave him out if they so please. [Interruption.] I am not going to debate this matter by way of interruptions. You set up a tribunal and you may have on that tribunal a representative of the employers, but he is there to adjudicate, not to advocate; and in order to adjudicate he must have evidence before him. He is just as liable to error, although he is an employers' representative, as anybody else. There is no guarantee that the board will come to a right and just conclusion, but if they do happen to make an assessment which is excessive the employer whose case has been adjudicated has no right of appeal or to question it. He has not the elementary right to be heard. That is not a mere revolutionary proposal, it 'is something which is so opposed to the whole tradition and system of administration in this country that I do not think this House will countenance it for a moment. There are a thousand objections to this Bill. It is a Measure which in no circumstances should pass this House unless the House wants to make itself a laughing stock.

1.14 p.m.


We have listened to a most excellent speech from a lawyer, putting a lawyer's point of view on this matter and raising objections which may sound very well indeed in the law courts but which have very little relation to the fundamental principles of the Bill. As one who has dealt with thousands and thousands of compensation cases, who has an everyday experience of them, I say that the last thing we on these benches desire is not to give the employer a fair and square deal. We have always been anxious to do that. We have complaints that on many occasions when the employer himself has been prepared to give a square deal to his workmen, the insurance companies and the lawyers between them have endeavoured so to manoeuvre the Acts of Parliament that the man has been unable to obtain justice. We have heard a great deal from the hon. and learned Member for Norwood (Sir W. Greaves-Lord) about justice, about everyone having a fair hearing and representation. Let me say to him and to the House from my own experience that hundreds and thousands of injured workmen are unable to get fair compensation simply and solely because of their poverty. There are hundreds and thousands of them standing outside the ranks of trade union organisations who are the victims year in and year out of members of the class to which the hon. and learned Member belongs.


My hon. Friend says that there are thousands outside the ranks of trade unions who cannot get justice. In almost every part of this country there are committees of the Law Society which deal with cases of that kind, and there is no reason at all why, on the ground of poverty, any man should be denied justice, because there are members of both branches of the profession who give their services freely in those cases where it is certified that there is a prima facie case.


I would respectfully point out to the hon. and learned Member that a little practical experience is worth a tremendous amount of theory in these cases. Out of my own practical experience over a long period of years I say without hesitation that hundreds and thousands of poor persons are manoeuvred out of their just rights, are got hold of by rather unscrupulous members of the legal profession, are induced to sign settlement papers of which they know very little indeed, and that that kind of case happens in every part of the country week by week and month by month. Let me give a sample of the kind of case I have in mind. In my constitu- ency within the last six weeks a man met with an accident in the course of his employment. The insurance company agreed that the man's disability was £l 3s. 8d. per week. The man was illiterate; he was unable to read or write. He was induced by some method to sign a paper which stated that on the payment of £30 all further liability should cease. The local registrar allowed that settlement to go through. When the man came to me it was too late. There is a definite case which could be repeated over and over again. Under the present system such cases must occur, but under Part II of this Bill they would be made impossible.


The hon. Member has chosen to give a case. If there was the slightest ground for suspicion of any undue influence or fraud or trickery about that settlement the hon. Member has been very unwise in telling the man that he was too late, because it is not too late now, and if the hon. Member takes the case before a learned county court judge he will find out it is not too late.


I would again point out that it is quite easy to bandy words implying fraud, but it is extremely difficult in these cases to lay one's hands precisely on the point at which one is in a position to make allegations of that kind. However that may be, the fact remains that these things do happen. A fundamental point in this Bill is not that it increases benefit, not that it does certain other things, but that it does set up this particular board to deal with compensation cases. I was very interested to hear the hon. and learned Member talk about the comparatively few cases which were taken into the courts. If it happens that a man meets with an accident and he is a member of a trade union, the insurance company is not very much inclined to fight, except, it may be, on some fundamental point. But to show the hon. and learned Member how difficult it is for the poor man to get justice I would give this example, again out of my own experience. A member of my organisation met with an accident. A number of years went by and then the result of the accident began to appear. But before my organisation could take that case into court with any possibility of getting a verdict for the man it was necessary to spend £130 in medical and expert advice and evidence. The point is that if that man had not been a member of my organisation he would never have received a single copper of the compensation to which the learned county court judge said he was entitled. Further, as the hon. and learned Member is a member of the legal profession, I would ask him has he never heard of the touting that goes on when accident cases are taken to hospital—touting by members of his profession?


Not in my own branch of it.


Apparently it would appear that in the hon. and learned Gentleman's mind the argument against this Bill is that it presses so hardly on the employer. I want to show how it presses hardly on the workman, and that the workman has a case which calls for some remedy.


What I said might be taken as an unfair reflection. It is not. First of all it is not done in my branch of the profession because we have not the opportunity and therefore not the temptations. There are certain things which happen in the other branch, but if any case of touting is brought before the responsible members of the solicitors' profession in England, it is dealt with at once and extremely severely, and properly so.


All I can say is that I am speaking from practical knowledge. I was a member of a board of guardians for a considerable number of years. It was brought to our notice that touting took place even in the wards of our hospitals. We were compelled to take drastic action in order to stop what we considered to be a scandal. It is to the knowledge of many hon. Members that poor persons have been entangled by solicitors of a certain class and that there are cases in which, in the final settlement, the solicitor has received more compensation than the man who met with the accident. These are matters of knowledge not only to those on this side of the House but to many other hon. Members irrespective of party. The provisions of this Bill would in my opinion give justice not only to the workman but to the employer. I should be surprised if as a result of the working of the proposed board, the assessments on the employers were not found to be considerably lower than the premiums which they now have to pay. It is common knowledge that insurance companies have waxed rich out of the profits made on compensation premiums. If those profits were saved, justice could be done to every man and woman who met with an accident whether the injured party was poor or not and whether the injured party belonged to a trade union or not. It would be given to them as a matter of right and justice and we should have a better system.

In this Bill provision is made for research into industrial diseases. I can assure the hon. and learned Member for Norwood (Sir W. Greaves-Lord) that on this side we are more keen about preventing industrial disease than about getting compensation for it. I belong to a trade whose members suffer very much from a certain industrial disease. It is true that the men receive compensation if they contract this disease but there is this point to be considered. It is essential not only in the interests of the men engaged in that trade, but in the interests of the public who consume the commodity which those men produce, that everything possible should be done to prevent that disease which at present is liable to break out among bakers from time to time. In this Bill definite provision is made for the expenditure of money on research into these diseases. As I have said, in my opinion the assessments which would fall on the employers under these provisions would be lower than the present premiums and there would be money to spare for research of the kind I have indicated.

Reference has already been made to the question of employers becoming bankrupt. Tremendous injustice is done all over the country because small employers refuse to insure their workpeople at all. There is no compulsion upon them in that respect. I know of a case in the city of Lincoln in which some eight months ago a man was killed as the result of an accident at his employment. It was found that the employer was not insured. We had to take the ease into court and we got an award for the widow and children of the man. The employer went bankrupt and the widow and children now have to suffer as a consequence of that employer being allowed to choose whether he should insure or not. I put it to the House that, whatever differences of opinion there may be about the details of this Bill, we ought to give it a Second Reading. I am sure I speak for all on this side when I say that we have no wish to do employers any injustice in connection with this Bill. If it is a matter of phraseology, if it is a matter of altering the wording of certain of these Clauses, in order to ensure the objects which the hon. and learned Gentleman opposite has in view, he knows that such matters can be dealt with in the Committee stage of the Bill. But I appeal to the House to give the Bill a Second Reading believing it to be in the interests of both employers and workmen and of the nation as a whole.

1.32 p.m.


I feel, after some of the remarks which we have heard to-day, that I ought to apologise for being a member of the legal profession. I am sure that hon. Gentlemen on the Opposition Benches will see that the criticisms which have been made in that respect are rather shortsighted because members of the legal profession have gained experience of the working of the Workmen's Compensation Acts from both points of view. I myself have been interested in these cases both for employers and for trade unions and a member of the legal profession gets a wider view of these questions than an employer who may only be able to speak as to how a particular provision of the Workmen's Compensation Acts affects a particular industry. It is easy for any hon. Gentleman to put a finger on this or that weak spot in the existing scheme. No one will deny that there are anomalies and difficulties in the Workmen's Compensation Acts as they exist. That point is not at issue to-day. The point at issue to-day is whether this Bill is or is not the best way of getting over those difficulties. We say that it is not.

When the Act of 1906, the first big extension of workmen's compensation, came into operation, jurisdiction was given to the county courts because they were regarded as the courts of the poor man. If one looks at the Debates in this House on that Measure one finds that it was thought then that workmen would be able to conduct their own cases and dispense in many instances with legal assistance. That assumption has been falsified by experience and a very unfortunate thing has happened in connection with these Acts. Everyone will agree that the law on workmen's compensation ought to be expressed by this House in the simplest possible form so that a workman should be able to go to the Statute Book and find out his position in regard to compensation. But, unfortunately, largely for historical reasons, the workmen's compensation system has become very complicated. There is a vast number of cases dealing with it and the whole thing is in a state of considerable confusion. Any of my hon. and learned Friends will agree that it is possible that the time has come for consolidating and clarifying the Statutes on that point, but we say that this Bill is not the sort of Measure which we ought to have.

I am not going into the Clauses of the Bill in detail. Anybody who took the time and trouble could find plenty to criticise in the Bill but there are some things in it which are so bad that we must devote some attention to them. The flaws in the Bill begin in the first Clause with the introduction of the words "in connection with his employment" replacing the old definition of "arising out of and in the course of his employment." Cases have been decided which would give that phrase so wide a meaning as to make it completely useless. I am not going further into the extraordinarily able examples given by my hon. and learned Friend the Member for Norwood (Sir W. Greaves-Lord). This Bill alters the whole policy of this country in regard to compensation. The policy is to give the workman compensation based not upon his ordinary week's wage, but upon the best week's work he may ever have had There is a Clause which says that the normal weekly earnings shall be taken as being those of a week in which he worked the full number of days normally worked in his particular employment, although during the whole course of his industrial career he may never himself have worked that normal time.


He is a normal man.


Yes, but he may never have had a normal week's work. The whole principle of insuring against the loss suffered by a workman as between workman and employer is taken away by this Bill. There may be a good case for making some form of State contribution, but there can be no case at all, and none has been made out, for taking this burden and spreading it over the whole of industry, as is done in this Bill. The hon. Member for West Rhondda (Mr. John), in his very clear and able speech, talked a great deal about a State system. This is not a State system, but a most extraordinary hybrid that he is trying to introduce. All that you would do by this Bill would be to penalise the good employer, with a low accident rate, for the benefit of the bad employer, with a large number of accidents. You would remove from the workman the whole danger of any pecuniary loss as a result of an accident. I do not say that any man will willingly run his head into danger, but surely everyone will agree that when the danger of pecuniary loss is taken away, there is naturally a greater tendency towards carelessness on the part of the workman—a sub-conscious tendency—when he knows that, whatever accident may happen to him, he himself will suffer no pecuniary loss, and indeed in certain circumstances he and his dependants may be put in a better position under the financial provisions of this Bill.

The worst part of the Bill is to be found, not in the first part of it, but in the second part—the establishment of this comic opera compensation board, with a host, an army, of subsidiary officers, a central board in London with premises and officers, local committees in all big centres of employment, with hosts of local officers, assessors, medical officers, compensation officers, clerks, and so on, all drawing salaries, all of them occupying offices, which have to be paid for out of the accident fund, all of them feeding on the back of productive industry, like a tick on the back of an elephant. If you must have extra taxation of industry, do it by all means, but at any rate be honest about it, and, if you are going to levy these extra millions, see that they go into the right pockets. Nobody will complain if you give an injured workman a higher benefit, but we do complain when you are taking away millions from industry and the general taxation of the country and putting it into the pockets of a lot of entirely unnecessary officials.

Something has been said about the legal profession, but this Bill might almost be called the Impecunious Lawyers Endowment Bill, because by it you will set up a number of local committees. There is no indication as to how many, but the country is to be divided into areas, and each area is to have a local committee, consisting partly of employers' representatives and partly of trade union representatives, and each local committee is to have a chairman appointed by the Secretary of State. He is to be a lawyer, and he is to hold his office as a whole-time appointment and to be paid a whole-time salary, out of the accident fund—in other words, out of the pockets of industry. I maintain that if this Bill were to pass this House in anything remotely resembling its present form, it would paralyse the recuperative power of British industry.


Will the hon. Member remember the contrast between this board and what the insurance companies have to pay their directors and their enormous staffs?


One point that was overlooked by the hon. Member for West Rhondda is that if you will turn to page 4 of the Home Office statistics, you will see that the insurance companies, which have been so attacked to-day, are only responsible for 22.1 per cent. of the total payment of compensation. They by no means cover the whole field, but less than a quarter. The mutual indemnity associations and the uninsured employers pay the rest. Less than a quarter of the total money is paid by the insurance companies, and those companies are not wholly concerned with the administration of workmen's compensation. They have their workmen's compensation departments, but they form a comparatively small proportion of the total sum concerned. Here you propose to set up a complex machine, with its tentacles spreading all over the country, and with its nerve-centre here in London, concerned solely and exclusively with the administration of workmen's compensation; and it is bound to be a whole-time job.

What is the compensation officer to do 1 He is to give his decisions in 14 days. In any populous area, such as a colliery area, the number of claims will be considerable, and if he is to give his decision within 14 days, he will have to have a very large clerical staff. There can be no doubt, though no statistics have been worked out on either side, I suppose, that what is proposed to be set up by this Bill would be far more expensive than anything which now exists. Quite apart from the ordinary administration of workmen's compensation, you have a sort of roving commission to go round and inspect factories and premises, to usurp the functions of the factory inspectors, and to undertake scientific research, upon all of which it may spend money, and when the time comes make its own assessment to recover it.

Whatever objection you may have to the details of the existing law, I have not heard anybody here, even to-day, make any serious complaint of the administration of the county courts. I have had some little experience of the county courts, and I have found, as I think most people have, that the county court judges administer the Workmen's Compensation Acts, as my hon. and learned Friend opposite has said, with even-handed justice, and that the administration of the county courts is beyond criticism. I will not go into the question of the justice or equity of the proposed tribunal. It has at any rate the advantage of having a lawyer at its head, but there is no guarantee of continuity. The membership of the board is seven, with a quorum of three, and the board is not bound even by its own decisions, so that you may get three members of the board, sitting on Monday, deciding one way, and another three, sitting on Tuesday, deciding exactly the opposite way. There is no sort of guarantee to the workman or to anyone else that the board will decide upon any kind of fixed principle. This ad hoc body, partly composed of employers and partly of trade union officials, is to have not only a completely free hand from outside interference, from the control of the ordinary courts of the country, but it is not even to be guided by its own first thoughts. It may contradict itself as many times as it likes.

This Bill is not designed to meet even the objections which hon. Members opposite have put up to the present system. It makes no real progress even in the direction in which they want to go. I oppose the Bill because I do not think that it gives us anything better than we have at present. There are other things that we might do. There is the Continental system of the fixed-scale-payment, which has worked very well in certain countries. It is very much recommended by members of the medical profession in this country, who say that by giving a man a fixed lump-sum payment you remove a lot of anxiety from him, and that one of the factors which prolong the effects of an accident is the subconscious knowledge that as long as those effects continue there will be some compensation. If, therefore, you give a man a lump-sum payment, you take away a lot of anxiety and hasten the prospects of his recovery. The second possibility is that we might establish a particular local court to deal with workmen's compensation if we are not satisfied with the present system. But if local courts are established, let them be proper courts conducted on proper principles. We might consider the possibility of establishing a local judge in these particular areas with a single and final appeal. There is something to be said for diminishing the multiplicity of appeals and in workmen's compensation cases a single appeal would probably be enough. I know one county court judge in a railway centre who habitually sits with an official of one of the railway unions as his assessor to advise him about questions of wages and industrial conditions. That system works very well and it might be extended, but there is nothing of that sort in this Bill.

Much the best proposal, and one about which I thought we should have heard a little to-day, is the establishment of one complete scheme of insurance covered by a single payment for all the accidents of industrial life—unemployment, sickness, old age and workmen's compensation. I think such a scheme must be contributory for many reasons. It is an ideal sort of scheme, and I am surprised at Members opposite putting this Bill forward because it is a hybrid scheme which is neither contributory nor solely a State scheme, and, if it were adopted, it would postpone indefinitely the time when this House introduced, as it must introduce sooner or later, a big comprehensive scheme which would work into a complete whole our existing piebald system of national health, unemployment, workmen's compensation, and old age insurance.

1.50 p.m.


In supporting the Bill, I want to try and reply to some of the criticisms which have been offered as reasons why it should not be given a Second Reading. The two principal points of criticism have been the additional burden which it is said will be thrown on the employers, and the question of the administration of the scheme. The hon. and learned Member for Norwood (Sir W. Greaves-Lord) speaks every time a compensation Bill comes up, and he always takes the position against an improvement in the law of compensation. To-day he made a worse case than I have ever heard him make. He seemed to let his imagination run away with his reason and never appeared to realise what the Bill really meant. His point was that it would create an injustice to employers. Under this Bill, however, a committee will be set up on which will be two representatives nominated by employers' organisations, two by the Trades Union Congress, a man with financial knowledge, a medical expert, and a lawyer who will be the chairman. That is the only part of the committee with which I have any fault to find, for my experience is that lawyers make the worst possible chairmen. It is clear, therefore, that the employers' interests are safeguarded by their representation on the committee. When appeals are heard by the committee from the decision of the compensation officer, it is only common sense that the employer will be asked to give evidence.

The hon. and learned Member for Norwood also criticised the principle that cases should be decided purely on their merits. I support this Bill because I have been taking an active part in compensation cases ever since the Act of 1897. Immediately that Act was passed a conference of coal miners and owners took advantage of a Section in it to set up a committee. I can speak with experience when I say that on that committee we do not always stick to the law, but determine many cases purely on their merits, justice and common sense. Today, however, we are getting into diffi- culties which are not of our own seeking. They are caused by decisions that are given from time to time in the Law Courts, which have made the position so complicated that we do not know where we are. If you could take the whole of the compensation actions out of the region of the law and put them into the hands of committees as laid down in this Bill, we should not only get justice for the workmen, but justice for the employer and everybody concerned. It cannot be said that we have attempted in the Bill to set up a biased tribunal, because everyone of those interested in compensation are represented.

Another criticism is that this scheme will create an additional burden on the employer. Compensation to-day is a burden on employers—if it can be called a burden—but an accident is also a burden on the man who suffers and his family, and he is therefore entitled to some consideration equally with the man who employs him. Every industry takes into consideration what it is paying per annum as insurance for the workpeople employed in it, and that is included in what are called "costs of production other than wages." Therefore, if there were any injustice, the employer would not suffer the consequences, though I cannot see where there can be injustice.

The hon. Member for South Bristol (Mr. Lindsay) said that not a great deal of this compensation work was dealt with through insurance companies. I say "Thank God for that." Such of it as they do handle is dealt with badly enough, and I would suggest that we ought to cut them out altogether, and compel every employer to insure with the national fund proposed in this Bill. The coalowners in my county have their own compensation fund and their own compensation officer. When claims come in from the several collieries the officer goes through them, and those to which he raises no objection are settled within three weeks. If there is a case in which an objection is put forward then the workman's representative is notified of this objection, and the claim proceeds to the committee to which I have referred. If the committee decide that a medical question is involved, then, on a joint reference, it is submitted to medical opinion. The only way in which the law comes in is that we have some arrangement with the County Court Judge under which, if there is a difference on points of law, and we can agree on the facts, he will give us a decision on the points of law. However, it is very seldom that we have to appeal to the County Court Judge. Sometimes, when there has been a doubt, the matter has been dealt with from the point of view of common sense and the merits and justice of the case, and the man has been given some form of compensation. I suggest that, from the point of view of the employer, that is cheaper and better than being bothered and harassed by an insurance company on one side, and the workman's representatives on the other. Between 1920 and 1931 our small society —I. am sorry we have not got quite 5,000 members—settled 4,614 disputed cases, not one of which has ever had to go to the County Court, and there has been no protest. It may be too much to say that everybody has been thoroughly and completely satisfied, but generally speaking everybody has accepted the decisions as being fairly reasonable within the confines of the law as it is at present.


I have three complaints in my office now.


Where from?


From that district.


If the hon. Gentleman had allowed me to go on I was about to say that whatever complaints there may be are due to the complication of the present law. At present there are points before the Appeal Courts. I am sure that if the law were administered by committees such as the one existing in the coal trade which I have described, it would be cheaper and more to the advantage of the employers. To my mind the whole point is that since 1897 it has been admitted in law that a man who is injured has a right to compensation. The principle has been admitted, but the difficulty has always been to give effect to that principle to the benefit of the workman, because on the other side the insurance companies and others have always put up a fight to prevent the man getting what we call his full redress under the law. We claim that in this Bill his difficulties will be to a large extent removed.

We feel that the six competent men I have referred to will be more likely to come to decisions on the merits and justice of the case and will deal with it in a more reasonable way than happens in the Law Courts. In the courts the case is argued by eloquent advocates like the hon. and learned Member for Norwood (Sir W. Greaves-Lord), who is a great exponent of compensation law. Then there is the hon. Member on my left, the hon. Member for South Bristol. I have heard him only once, but I feel that if I had to deal with a case I would engage him as counsel. Ho made the admission that sometimes he had represented the workmen and sometimes the employers, and of course that is what happens in his occupation, and the hon. and learned Member for Norwood is in the same position. The learned counsel for the plaintiff in a case will be anxious to influence the judge by stressing everything in favour of the man; and perhaps the next time he appears before the judge he will be representing the other side, and will then be impressing upon the judge how everybody else is wrong and only his own case is the true one. We want to get away from such contentions. We want our men to get the compensation to which they are justly entitled by reason of the injury they have suffered while at work.

I would point out that most of the points raised this afternoon have not been substantial objections to the principle of the Bill. They have been points to be dealt with in Committee. This Bill, like every other Bill presented to the House is not, I admit, exactly perfect. There are some things in it which I would like to see improved. But the fact that the Bill has encountered criticism is no reason why it should be rejected. Every Bill is criticised, but such criticisms can be dealt with, in Committee if only we are agreed on the general principles of it. Details can be gone into in Committee, and at the conclusion of the Committee stage we shall probably have threshed out all the intricate points which hon. Members are now putting forward, and have come to an agreement about the Bill. Therefore, I ask the House to give the measure a Second Reading and let it go to Committee, where all these points of criticism can be dealt with, equitably.

2.5 p.m.


I am afraid that I cannot join the hon. Member for Workington (Mr. Cape) in his support of this Bill because I think that at the present time it would be putting an enormous burden upon industry and because, as has been pointed out by my hon. and learned Friend the Member for Norwood (Sir W. Greaves-Lord), the Bill is drafted in an extraordinarily one-sided and biased way, which is a very serious defect in it. At the same time, I do not wish the Government to think for a moment that all of us upon this side are satisfied with the present position of workmen's compensation legislation. I should like to see it codified, because it is very difficult for one to find one's way about it and to find out what is the justice of a case. I should also like to see it amended in certain particulars.

With regard to codification, I had a very difficult case of workmen's compensation the other day, and I had to get legal advice. The Home Office were very helpful to me about it and to the constituent on whose behalf I was acting. I do not see how that constituent could possibly have got the information if he had not gone to a Member of Parliament for it or had not spent considerable money. The constituent did not belong to a powerful trade union in this case. I do not feel that there is sufficient opportunity for the ordinary citizen to find out how compensation law stands, and especially is this true in the case of the wife of the citizen who may himself be in hospital and who wants to find out what the law is and what the remedy may be.

In the Holman Gregory Report that point was dealt with, and the Committee recommended that the registrars of county courts should be authorised to advise applicants and explain the law to anybody who came round to ask about it. Cheap or free legal opinion is not supposed to be of an enormous value, but in this case it would give the unfortunate person some idea of what he could expect to get or whether it would be worth while going to law at all. At the present time he has to take what is offered to him. A recommendation to this effect is given on pages 53–9 of the Holman Gregory Report. One reason why I should have liked to support the Bill is that it makes provisions for the training and rehabilitation of the victim of an accident. At the present time, nothing is done with that object. I have raised this question in the House before, and I hope that I shall continue to raise it until it is dealt with. There again the Holman Gregory Report makes a recommendation. On page 51 it says: The matter is clearly one"— that is, the training and rehabilitation of the victims of an accident— deserving further investigation, and we recommend that the proposed commissioner should inquire into the question with the Ministry of Labour and any other authorities concerned, and with the employers' association and trade unions, in order to ascertain whether any practicable and economic scheme can be worked out. I did not know when I last spoke in the House on this subject that that recommendation had been made. I recommended such an enquiry myself, with, in addition, the insurance companies, and I hope that the Government will take some such action. The present position is ridiculous. We spend over £5,000,000 upon compensation for accidents, and we do nothing to enable the victims to earn their livelihood again. We give them the money, and we make no effort to find out whether it has been spent to the best advantage of the victim or of the State. The money is handed over, and it can be spent in any sort of way that they like and there may be nothing whatever to show for it. Nothing is done to restore earning power to the victim of an accident, and he becomes a drag on the State for the rest of his life. It is uneconomic, and it is unfair to the man. Another feature of the present situation is the high ratio of expenses of the insurance companies. That needs fresh investigation and a further agreement. I do not think that we ought to be satisfied that the ratio is 62½ per cent., especially as I see in the Report which is issued for 1931 that it was only 48 per cent.; in other words, only £48 was paid in compensation out of every £100 premium.


It will be made up.


Exactly, but it will only be made up the following year, in a rebate to the man who goes on insuring. His insurance policy has to be continued. I do not think that is right in that case. They have overcharged that man, and he ought to be paid back during the year in question, and he should not have to reinsure the following year. I do not think that 62½ per cent. is sufficient. The Holman Gregory Report says that it ought to be 70 to 72½ per cent. I hope that the Home Office will pursue that point further with the insurance com- panies, All hon. Members have in mind the unfortunate cases where compensation cannot be paid owing to the bankruptcy of the employer. The hon. and learned Member for Norwood tells us about an arrangement by which a mutual guarantee is to be given by colliery companies. That may cover the collieries, but there are cases outside them. I had a case in my constituency which was not a coal mining case at all. I suggest to the Government that we cannot have compulsory insurance unless we have some scheme of State insurance. We cannot compel people to insure and pay premiums to the existing insurance companies.


What about motor cars?


Well, I do not much like that. It is not, however, as serious a question as this is for employers. If we are to have compulsion I should be very much opposed to State insurance, because it would mean another mass of officials and another heavy burden upon industry. Incapacity to pay owing to bankruptcy is only a matter of a few thousand pounds; somebody said £7,000 in regard to the Lancashire colliery companies. A very few thousand pounds would cover it, and if we are not going to burden the State with compulsion and State insurance, surely we might have some State fund of, say, £20,000 or £30,000 which ought to cover the whole of these bankrupt claims. If the State takes over the liability, the State should also take the employés position in having the first claim on the assets of the firm. We must see that where a man is awarded compensation after an accident he gets the compensation. It is only an infinitesimal amount to the State and it is really a disgrace that circumstances should continue in which a man who is entitled by law to compensation from a firm which goes bankrupt should be no longer able to draw that compensation but should have to go on to the Poor Law.

2.12 p.m.


I rise to support the Bill. We have had a number of suggestions from different angles, and I am very pleased that hon. Members on the other side of the House are giving concrete reasons why a change in the law is necessary. One or two of the objections which have been made to this Measure are, I think, fictitious. The Amendment to the Bill which has been moved by the hon. and learned Member for Norwood (Sir W. Greaves-Lord) is largely based on misguided judgment as to the general body of workmen in the country. The ridiculous way in which he spoke about the miners proves conclusively to every hon. Member with any mining knowledge that he has not the slightest conception as to what the mining industry means to the man who is employed in it; otherwise, he would never had made the statements that he did. He suggested that there is in this Bill no protection to the employers, and he went on to relate that the miner may move a piece of rock or interfere with something else with which he has no right to interfere. I want to assure the House and particularly the hon. and learned Member that miners are generally too busily-occupied in doing things they must do to find time to play about in that way. The hon. and learned Member also suggested that this would put a big liability on employers. Now is that true? Let us examine who makes the contribution that is paid by employers, in the large industries in particular, to the insurance societies with whom they are insured. Take the coalmining industry. Our wages agreements are based on this charge being eliminated before wages are agreed upon and before the profits of owners are agreed upon. It is the general cost taken out of the industry towards which we have to pay the largest proportion of the insurance. Moreover, we ascertained before the Royal Commission in 1925 that the cost of that administration in the mining industry was colossal, that insurance companies and technical advisers, legal and law court costs were taking up more than 50 per cent. of the contributions we were paying into the fund for compensation to our men.

Perhaps we feel more keenly on this question because we represent an industry where the percentage of accidents is exceedingly high and the occupation is exceedingly dangerous. The position to-day in Britain as a whole in regard to compensation claims and administration is a scandal, and it is time that something was done. Take the question of what is called partial compensation. The court of referees and doctors decide the degree of accident to a miner and he is given partial compensation in varying amounts—10s. or 5s. a week, or anything in accordance with the medical decision. Such a man has no claim on his employer. He may have lost a finger, a hand or even a leg, and he is on partial compensation. He is expected to get work, but his old employer is under no obligation to find him work. The result is that the man cannot compete in the ordinary labour market. We feel that if any workman unfortunately meets with an accident, for which has is partially compensated, that colliery should find him employment. At the moment we have thousands of men in the mining industry thrown on the scrap-heap. They have been paid low amounts of partial compensation, and have to turn, for the largest part of their income, to the public assistance committees. While we do not wish to deny that the English judge endeavours to give a verdict in accordance with the medical evidence tendered, we do suggest that even when medical evidence has been tendered, and the degree of disability has been agreed, the amounts payable to-day are a scandal in comparison with the verdicts given both in the courts and before medical referees.

This Bill gives employers the same opportunity of defence as it gives the workmen. It sets up a special board on which the employers will be fully represented. They can call any evidence they desire, either medical or technical as it applies to any particular industry, both on the central board and on the local committee. What more do the employers want? They have the same number of representatives as the workmen, and, on the question of compensation payment, the workman pays the same amount as the employer. Therefore, I suggest that this Bill does make a real attempt not, as has been suggested, to set up a musical comedy, but to remove the question from comic opera, and take it into an atmosphere of practical, experienced men on both sides for decision. Therefore, we feel that this Bill ought to be given a Second Beading. If there is any legal phraseology that needs improving, that can be dealt with in Committee. No Member who has spoken to-day has suggested that the present legislation is satisfactory, and the records of men who have been injured in industry in this country, who, with their families, are dependent on public assistance, constitute a scandal to the country and this House.

While I am delighted to hear a number of Members say that the time has arrived for an amending Compensation Bill, we should like to see them acting consistently and supporting the Second Reading of this Bill. Let us thrash out the details, either technical or legal, that may need improving, but, having admitted, as every speaker has to-day, that the time has arrived for an amending Compensation Bill, I hope that the House will give this Measure a Second Reading. We feel keenly, because we know that in every mining district in the country the warriors of our industry are in many instances suffering, and are dependent on public assistance, when they ought to be getting their legitimate right of a reasonable income to sustain them during incapacity, and an assurance that their employers should be under some obligation to find them suitable employment when they are in a position to take that employment. For these reasons, I hope that the House will give a Second Reading to this Bill, and let us endeavour to thrash out the details in Committee and build up the Bill so as to make it probably better than it is.

2.24 p.m.


Perhaps before I deal actually with the Bill, I may be allowed to refer in two short sentences to the remarks of the hon. Member for Leigh (Mr. Tinker) concerning those of us who happen to be connected with the legal profession and are opposed to this Bill. I know the hon. Member well enough to believe that he would not suggest that we were opposing it from any personal motives, but perhaps he thought that generally the profession might be done out of some of its present work. As a matter of fact, looking at this Measure, I should be inclined to think it would give a very large number of jobs to those who belong to the legal profession, and, indeed, a great deal more work than at the present moment. There may have been another reason at the back of the hon. Member's mind when he referred to the fact that a number of those who are members of the legal profession are opposed to this Bill. It may well be that we oppose it because those of us who have to spend a part of our lives in. the courts really believe that the process of the courts is the best for getting at the truth of any particular matter; and it is partly because it would alter the whole basis on which these workmen's compensation claims are dealt with that I am absolutely opposed to the Bill.

It is not that it tries to make here and there an alteration in the rates of compensation, or in the way in which the compensation may be payable under the present law. It would alter completely, first, the basis on which employers provide against their liabilities, and, secondly, the basis on which those liabilities are assessed and compensation is paid. It would remove from the courts of the land all workmen's compensation cases—from the courts where there is, first, a hearing in open court; secondly, where all parties interested in the claim have a right to be heard; and, thirdly, where there is a body of precedent, which has gradually grown up, showing both those who have to pay compensation and those who are entitled to receive it their rights and liabilities in that regard; moreover, from those courts there is a right of appeal. As regards this board which is to be set up, we find, in the first place, that there is to be a hearing behind closed doors, a hearing where no employer has any right of audience at all.

It was suggested by the hon. Member who spoke last that the fact of having an employer as one of the members, either of the local committee or of the board hearing a case on appeal, would give the employers' side proper representation. I do not know whether the hon. and learned Member for East Bristol (Sir S. Cripps) will agree with me in this or not, but in the ordinary arbitration, where an arbitrator is appointed by each side and those two agree upon an umpire, the position of the two arbitrators is, in the view of a great number of us, entirely unsatisfactory. They are sitting supposedly as part of a judicial tribunal, but whenever an occasion arises they are trying to voice the side for which they are appointed. I do not know whether the hon. and learned Member will agree with me or not, but, personally, I think it is a bad precedent that a person who is part of a judicial tribunal should be there to take one side or the other; he ought to be there entirely in a judicial capacity. Even if it be suggested that on these local committees or on the board the employers should take one side and the Trades Union Congress another, one notices that there is no method whatever in the proceedings of the board or of the committees for allowing any member of the tribunal to call evidence before the tribunal; the whole of the evidence before these tribunals would be the evidence of one side, that of the claimant. The claimant would put forward his case, and there would be no reason for the particular employer to fight the case. He would be assessed for the accident fund, whether he fought the case or not; it would be no loss to him; and there would be in all cases what I and others who may agree with me think is wrong, namely, evidence adduced on one side of the case only, the side of the claimant.

Another reason why I object to this tribunal is that in some cases the claimant himself or herself has no right of audience. Clause 32 (1) provides that the board may act upon the report of any of its officers; that is to say, the local officer inquiring into the case may go and make up his mind, and, if the local committee and the board like, they can act upon his report; and in that case the claimant, according to the Bill, will never be heard. I do not say that in a great number of cases the board would act on those lines, but they would be given by this House power to act on those lines if the Bill were carried through in its present form. The board also is to be bound by no precedent; that is to say, one local committee sitting in one place may act on a completely different kind of line from another local committee sitting in another part of the country, and there is no reason whatever why the board should alter the decision of one of them, because it is to be bound by no precedent. Again, there is no appeal from the board itself, even if the board is acting completely outside its jurisdiction. If hon. Members will look at Clause 30, they will find that there can be no proceedings in any court of law to restrain this board from doing anything it likes, by prohibition or certiorari, even if it is acting completely outside the provisions of the Bill. There is no restraint upon the board by any of the recognised courts of this country, such as there is upon tribunals normally set up by this House.


What about the Tariff Commission?


Of course there is the Tariff Commission. What about it? I understood that the hon. and learned Member took exception to the Tariff Commission on that very ground.


No. I never took any exception to it on the ground that it could not be restrained by an injunction. My objection was it was not under the control of Parliament. That is quite a different thing.


What is the executive action?


They hear evidence and they consult for the purpose of their reports. They are the sole people who can make inquiries and hear evidence, and, if they do it irregularly or improperly, there is no conceivable means by which they can be called to account.


What is the executive action?


That is not the point.


It seems to me to be very much the point. When once this Tariff Board has made up its mind and presented a report to this House, no action can be taken on that report until the House has endorsed it.


Surely the hon. and gallant Member is wrong. It does not report to the House; it reports to the Treasury.


I beg pardon; I was wrong; it was a technical slip. It reports to the Treasury, but no action can be taken by the Treasury on its report until at any rate it has received the confirmation of this House.


No; again the hon. and gallant Member is wrong. An Order can be made, and, after being made, it has to be laid on the Table of the House.


We are getting rather deeply into this matter, but the hon. and learned Member is right. It can be acted upon by the Treasury for a certain number of days before it is confirmed by this House. But, after all, the Chancellor of the Exchequer is responsible to this House. This board which the present Bill proposes to set up is to be in no way answerable to the House. No question could be asked in the House on behalf of any claimant who had been aggrieved by the proceedings of the board, or by any employer who thought he had been over-assessed by the board. There would be no one in this House who would have to come down and answer for the proceedings of the board; and what, indeed, the Socialist party is attempting to do in this Bill is to set up a new Star Chamber in this country. It is a foretaste and forewarning of what that party would do if it had complete power. It would be just as autocratic as were the Stuart kings. When I say that this is going to be a sort of Star Chamber, what are its powers going to be I It is to have the same power as the High Court for compelling anybody to come before it or to bring any document before it, without any publicity, without any right of appeal. By Clause 32 (2) of this Bill, moreover, anyone appointed by the board is going to have that power; any—if I may say so without disrespect —twopenny-halfpenny official of the board in this country will have that same power which, at the present moment, is only allowed to a judge of the High Court.

The second thing to which I would draw attention is that the board is to have the power to authorise anyone to carry out an inquisition, not only into any factory, workshop or office, but into any dwelling-house in this country where one or more servants are employed, even for a period of only one hour in a week. Its agent may carry out a complete inquisition and walk into that house at any time; he may walk into that office, factory or workshop at any time, and nobody can call him to order for that in any court in this country. Personally, I am not prepared to give a board of that sort this power. It has the power, also, of dictating to the courts of the land. It can under Clause 6 (4) of the Bill say what amount a principal can set off in a case of indemnity, and the court which is inquiring into the case before it has to accept whatever the board's finding is on what the amount of that indemnity should be in a completely different case, and cannot inquire into the amount at all, for it will automatically become the set off. Again, by Clause 59, if the secretary of this board certifies that there is an amount of an assessment still to be paid by an employer, he has merely to certify under his hand and that certificate becomes an order of the county court. That is to say, this gentleman, who is answerable to nobody except the board—and the board is not answerable to this House or to any responsible Minister—can make these orders, and they become definitely orders of a court of the land.

By Section 18 (3) we see that this board has power to give orders to the Postmaster-General. It can say how the payment of this compensation is to be made through the Post Office— in accordance with regulations to be made by this board. A Minister who is responsible to this House is thus to be made subservient to a board responsible to nobody at all. The board has unlimited powers to appoint what officers it sees fit at the expense of industry. Let us remember that this Bill is not at the expense of employers as employers; it is not a tax, like the Income Tax, upon profits; it is a tax upon industry before any profits are made at all. During the last year, the figure for the amounts of workmen's compensation added 2.3d. to the price of every ton of coal raised in this country—




I am very much obliged. When we find that the amount came to 22s. 10d. a year for every person employed in the shipbuilding industry, we realise that this is a direct tax, not on employers, but on the industries themselves. There is to be no control whatever by this House to prevent this board taxing industry in this way. We are setting up in this board a new taxing authority, not responsible to this House of Commons, to tax industry in the number of officials that it appoints and pays, and to levy taxes upon industry by making any assessments that it likes. It can not only make an assessment on a whole class, but it can also pick out a particular undertaking and say: "We will assess you at a great deal more than your neighbours in this particular business." It can do it by a supplementary assessment, even after the first assessment has been issued upon that particular undertaking. Under Clause 52 (1) the board may, indeed, say that the amount of that assessment shall be paid within such time as the board thinks fit. In the making of this assessment, has the employer a right of audience at all? He has none. He has no right to come before the board and say what he thinks he ought to pay. He has no right of appeal against the decision of this board. It is not like a question of Income Tax, where you are assessed and have a right to appeal to the Commissioners and eventually to the courts of this country. The undertaking has no right of appeal at all, even if a very much larger extra assessment is put on it than on its neighbours with whom it is competing in the same business.

Indeed, this board may, without any let or hindrance, when an employer is late with the payment of his assessment or his return giving notice of an accident, immediately make that employer fully liable not only for his contributions to the accidents fund, but also for the full compensation of the person who happened to have been injured in that particular accident. What will that mean? It will mean that the employer has to return that notice of accident within three days. The workman has not to give in his claim for six months, or, in ease of death, for 12 months. The employer, within those three days, may never have even known that an accident has happened in his works or in his house at all, and may not, indeed, within that period know what the accident amounts to. Hon. Members opposite know quite well that many cases of workmen's compensation start from a cut in the finger or some such trivial injury, from a completely minor accident arising, probably, in the course of the employment, and eventually develop into some sort of poisoning which constitutes a real injury. If the employer does not notify that slight accident to this board within three days, he may be liable for the whole compensation as well as for paying his proper contribution to the accident fund.

We are really, therefore, setting up this new kind of tribunal, with these tremendous powers, in this country. For my part I prefer—and I am not ashamed or afraid to say it—the ordinary processes of the courts of law. When it comes to lawyers being criticised for criticising the Bill, we may just as well notice that the trade unions have looked after themselves in a way as well, because where there is an appeal to the board from a local committee the claimant himself only has a right of audience by leave of the board, whereas the trade union has an unlimited and unfettered right of appearing before the board in that appeal. For those reasons, I oppose the Bill and the whole of the new basis which it tries to set up in this country. I oppose the setting up of this new taxing authority upon industry without any control by this House and without any kind of right of audience or appeal by the employers themselves. Indeed, this is not the time to set up again in this country the kind of tribunal which, after all, took the only revolution we have had in this country to destroy it when it was set up by a Stuart king. There are so many points of likeness between that old Star Chamber and this board which it is sought to be set up, that I oppose root and branch a Bill which will seek again to impose upon this country such a tribunal.

2.47 p.m.


I have listened to all the speeches in this Debate with perhaps one or two exceptions, and with some astonishment to the speech of the hon. and gallant Member for Ux-bridge (Major Llewellin), because as far as I am able to gather from his remarks the main burden of his complaint against the Bill is that it will set up what he calls a new taxing authority in this country. That comes with an ill grace from a member of a party who supported the Import Duties Bill in its passage through this House. Complaints of that kind might very well come from this side of the House with regard to setting up a new taxing authority. Incidentally, I am reminded that the new taxing authority to which I referred as being set up by the Import Duties Bill was mainly to benefit the employers.


May I ask the hon. Member to what taxing authority he refers?


I am speaking now of the Tariff Advisory Committee which to all intents and purposes is a new taxing authority, and hon. Members opposite, with all the enthusiasm of which they were capable, supported the setting up of that particular body. We never went so-far as to call the Tariff Advisory Committee a sort of Star Chamber in the 20th Century. That is only an exaggeration used by the hon. and gallant Member in connection with this Bill. But, apart from his criticism, I have been astonished at the speeches of all those who are opposed to the Bill to-day, because of their entire failure to address themselves to the central argument in the speech of my hon. Friend the Member for West Rhondda (Mr. John). They have left his central argument entirely alone, and probably they have been well advised, because I do not think that they have an answer to it. They have confined themselves, more or less, to details of the Bill which could be examined exhaustively in Committee, and have left entirely alone the central argument brought forward by my hon. Friend who introduced the Measure.

I consider that the Bill has been brought before the House at a very opportune time, because we all know from personal experience of many of the grievances associated with workmen's compensation, and not only that but we are also aware of the fact that we are living in a time of rapidly deteriorating economic conditions. Perhaps all hon. Members opposite will not approve of my putting it in that way, but all the evidence we can collect and see about us points to very rapidly deteriorating economic conditions, speaking in a general sense. It seems to me that in this country the State only steps in to do certain things, which it feels it is absolutely necessary to do in certain circumstances, when it is forced to do it by the rapidly deteriorating conditions. I will put the question in this way. Why should not we do in regard to insurance against accidents what we have done in regard to health and unemployment? Why should not we employ exactly the same principle as the State has had to employ in those two connections in reference to the question of insurance against accidents? Really, the central argument of the speech of my hon. Friend the Member for West Rhondda showed most convincingly, by all the examples which are available, that this form of insurance carried out on a State basis would be less costly and more beneficial to those for whom it is devised than carried on by what is usually called private enterprise or by our present method.

The point I want to stress is, that anybody who has put up opposition to this Bill has avoided the central argument advanced by my hon. Friend the Member for West Rhondda. We have often had it said by some hon. Members opposite that in certain circumstances they would argue in favour of a State scheme for accident insurance. It seems to me that they will come along with the argument for a State scheme in favour of accident insurance when the other scheme has entirely broken down, but that is not the right time to tackle a matter of this description. Now is the time to do it. We have at our disposal facts and figures which clearly demonstrate that it is possible to this more economically with greater benefit to those it is designed to assist than you can by the methods at present in vogue. I do not want to go into the question of what the insurance companies take out of it. That has been referred to over and over again. We know that it is very largely a lucrative business for them, and because it is a lucrative business I suppose they will do everything they possibly can, politically and otherwise, to place obstacles in the way of setting up a State system in this connection. Those of us who sit on these benches frankly feel that the Bill which has been introduced to-day and is now submitted for its Second Reading would do very much to remove some of the grave abuses, scandals and injustices which exist under the present compensation law. It is on those general grounds that we shall go into the Lobby in support of the Measure. It may be that in regard to details criticism can be brought against it, but those are things with which we can deal adequately in Committee, and, as far as its general principles are concerned, we shall have no hesitation in giving it our whole-hearted support today.

2.54 p.m.


I hope not to detain the House long on a day which, after all, is devoted to the interests of private Members, but I do not think that it will be right that the House should come to a decision upon such an important, and, in some ways, such a novel Measure as this without a spokesman of the Government intervening for a short period to point out some of the difficulties which have to be faced. I hope that the hon. Member for West Rhondda (Mr. John) will not think it impertinent of me if I take this opportunity of congratulating him upon the thorough and admirable way in which he performed his very difficult task. It is a highly intricate and completely novel scheme—a long Bill— and it required, not only considerable knowledge of existing practice, but great capacity to present it to the House in' such an easily intelligible way. Although I warn hon. Members that I am going to criticise the Bill to the utmost of my ability, I hope that they will not think that I do it in any kind of superior way. I recognise the Measure as an honest endeavour to try and meet a very difficult situation, and credit is due to people who, even if they are wrong, try their utmost to correct existing difficulties. There is only one little suggestion that I would make and that is that it is a pity that such an honest endeavour should not have been more expeditious, and that there should have been such a pause in the endeavour between 1929 and 1931. When the original proposals for this Bill were published in 1928 and were in the hands of the electors in time for the election in May, 1929, it was stated that: The present Tory Government would not be likely to pass the Bill, having regard to the powerful vested interests which must be disturbed in the process, and it is intended to present the Bill to Parliament at the earliest favourable opportunity. It is a great pity that for two and a half years they were unable to find an opportunity of that kind. I am not saying that entirely for the purpose of making a mere debating score off hon. Members opposite, but it does raise suspicion, whether ill or well founded, in the minds of people that a scheme of this kind, which is attractive to many people, may well have been found by responsible leaders, when responsibility became theirs, to be unworkable in practice, and it may be for that reason that the silence for 2½ years occurred.

I only want to deal this afternoon with the main novel principles in the Bill. There are a considerable number of changes proposed which might just as well be proposed as an extension or amendment of the existing system, questions of detail and of great importance, such as the increases in the rates of compensation and matters of that kind, but not affecting the radical change which the Bill as a whole would do. I want to confine myself to the proposals and the necessity for the wholly new system which it is endeavoured to substitute for the existing one. If in doing so I refer to one or two details, I want hon. Members opposite to understand that it is because I consider that these things, details as they may appear, cannot be altered except by altering the whole character and destroying in fact the whole object of the proposals which hon. Members opposite have in view. I take it that the principle motive which actuated them in bringing forward and supporting this Bill are two-fold. First, they complain of the great expense of the present system, expense which is of no benefit either to the employer or to the employed, expense which it is to the common advantage of both should be avoided. Secondly, they complain of the legal technicalities which, though they admit they are sincere and proper interpretations of the law, have the effect in individual cases of bringing about results which Parliament, when they passed the various Acts under which these claims are brought, never really intended, and which cause hardships in individual cases which Parliament would have wished to avoid.

How is it that hon. Members propose to meet these two admitted difficulties of the existing system? Let me refer briefly to the structure of the new scheme and then ask hon. Members opposite: whether they really believe that a structure so composed and working in the way proposed is really going to lead either to administration at less cost, or to administration of greater uniformity, or to lesser anomalies and injustices. The central pivot of the whole of the new system proposed is a board, a board consisting of seven members, all paid, the chairman of which is to be a member of the legal profession. I agree with some hon. Members who have spoken in their criticism on this point. Why the hon. Member who seconded the Motion should have started out with a ferocious attack on lawyers, on the ground that they were going to object to the Bill in their professional interests, I cannot understand. When I first read the Bill I thought that it was part of a new campaign of the Labour party to extend the basis of their appeal and in the event of its passing into law I anticipated not weeping or gnashing of teeth in Temple Gardens, but the singing of "The Red Flag."

As to economy, one finds in Clause 28 that the board will have placed upon it the duty of appointing, at suitable salaries, a secretary, a chief medical officer, auditors, actuaries, accountants, inspectors, medical examiners and other officers, clerks and servants. It is important to note when we come to discuss the functions of the board, that once this board has been appointed by the Home Secretary, except for the fact that a report is to be laid annually and that, therefore, an opportunity will be given to the House for discussion, there is no responsibility on the part of the board to any Minister. There is no power given under the Bill to remove a member of the board even in case of gross misconduct. Once the chairman of that board, a board carefully devised so as to balance and give the chairman a casting vote on any really controversial subject, has been appointed, he is the sole arbiter of the destinies of the 16,000,000 people who will be brought under the Bill, and neither a Minister, nor Parliament, nor any of the courts of the land would have any means whatsoever of checking his actions. It is a touching confession of the faith of hon. Members opposite in the probity and humanity of the legal profession that they claim that it is giving a square deal to the workman to make a legal gentleman the sole arbiter of their destinies.


What about the Umpire?


The Tariff Board.


The umpire has to interpret the law as it stands according to legal precedent and, therefore, according to what the House of Commons knows is going to be understood by the words which it passes into law, but this particular umpire is not allowed to observe legal precedent and can put upon the instructions which Parliament gives any in- terpretation which he thinks fit. The analogy of the hon. and learned Gentleman opposite as to the Tariff Board is a false one. The Tariff Board itself by its own action does not affect the future or the pocket of one single citizen of this country.




I was thinking of the question of procedure.


The hon. and learned Member did not make it clear. At any rate, the Tariff Board has no power to order anyone to appear before it. People can apply.


I am sure the hon. Member is wrong.


Well, I will accept the hon. and learned Member's version of it, because it is immaterial. I am not complaining about procedure but that the decision is not subject to any review by anybody. When hon. Members opposite choose to consider the variety of functions which will have to be performed by this board have they realised that they will have to decide such questions as to whether on the death of the breadwinner the family should be carried on by means of a fostermother or whether in the case of a fatal accident the compensation due and the benefit to be paid should be paid to the woman with whom the man may have been living, or to his wife. The chairman of this board will at least earn his salary.

That is the composition of the board, and its function is to receive all the money which is payable in respect of compensation and to pay out all the moneys which are received. Let me now deal with the way in which its income is to be obtained. Every employer in the country is under an obligation to send to the board a list of the people he employs and a statement of the wages that are given. Hon. Members opposite, of course, have been talking about large industries, like coal mining, giving the impression of large-scale operations, but they must realise that the Bill, in fact, will apply to every single person in the country who employs anyone. The person who employs a jobbing gardener on two days in the week, the man and wife who keep one maid servant, are under the obligation to forward to the central body a return of those they employ and the wages they pay. They are to be under the statutory obligation of keeping an accurate account, which is to be open to inspection at any time by an inspector of the board. The communications from all these hundreds of thousands of people, the great majority of whom are not employers in the sense contemplated by the Bill at all, which are classes of employment not productive of any serious number of claims, will have to be replied to by the servants of the board. They will then have to be assessed in classes, varying according to the different degrees of liability. It may be said that domestic service is a class of employment in which the claims for compensation will be very few and that therefore the assessment will be low, but the board will have to be in communication with every one of these small employers. They will receive a return from them, serve notice of assessment, fix the assessment in classes and fix the rate of assessment. It may be necessary to fix a supplementary assessment; and it will be necessary to send them receipts for the money received. Do hon. Members opposite really imagine that to bring into this scheme thousands of people and create a huge clerical organisation, probably covering as big a range as the Income Tax, to deal with them is going to help the economical administration of compensation and reduce the present expenditure?

How is the money to be paid out? First of all, it is done by means of area claims to area compensation officers. We are not told how big an area is to be and, therefore, we do not know how many officers will be needed; but hon. Members will realise the position when they know that in seven industries which make a return 325,000 claims have been granted; and that takes no account of the number rejected. Every person who makes a claim will have to go to the officer in that area, and the officer must return his answer within a fortnight. It will be seen that the areas will have to be very small and that the officers will have to be very many. From the compensation officer they pass to the local committee. As far as I can see they are the only people mentioned in the Bill who do not get paid. Their chairman gets paid and they get fees and expenses for the meetings that they attend, but they are the only people in the Bill who do not get full-time salaries. From the local committee they pass to the appeal tribunal of the board.

I ask hon. Members to consider the immense number of people who will be brought under the Bill, who really are not the sort of people about whom hon. Members are thinking at all, but who will have to be administered as part of the Act and who will add to the administration expenses. Do hon. Members really think that there is going to be the vast saving which they claim? Let us consider the comparisons hon. Members have made. The hon. Member for West Rhondda, when talking about the expenses of administration of the present system talked entirely about insurance, as if the whole of the claims which are dealt with under these Acts are dealt with by insurance companies. Of course he knows that in fact they are not so dealt with, that in certain areas, in seven industries which make returns only 22 per cent. are dealt with by insurance companies, that a large percentage are dealt with by mutual indemnity insurance companies, which are far cheaper, and that the whole great block of railwaymen, over 400,000, are dealt with by internal insurance in the companies, which is cheaper still. Therefore to take the cost of administration through the insurance company as the test of the general cost of the administration of the whole field is not really fair.

I must confess that my view is that, even from the point of greater economy in working, the elaborate structure which is proposed by the Bill would not work. It is all very well to quote examples elsewhere, but we must be quite certain, before we attach much importance to them, that they are fair examples. Take the case of Ontario, on which this scheme is largely based. The Ontario scheme covers something like 450,000 workmen. This scheme will cover 16,000,000. The Ontario scheme gives power which is not given in this Bill, by regulation to exclude altogether from the operation of the scheme certain classes of workmen— a power which has been very largely used by them to exclude all small industries employing a few people, or industries in which accidents infrequently occur, and it leaves them therefore with the mass of people employed in the large-scale industries, which it is obviously far cheaper to administer than would be a scheme taking in 16,000,000 people, many of whom would be single domestic servants in small houses.

I want to pass to the other and perhaps even more important part of the Bill. The other object which hon. Members have in view in bringing the Bill forward is to get rid of legal technicalities, to get rid of cases where we can all see that the real intention of Parliament has been defeated by some perfectly correct judicial interpretation of the law. They propose to do that by abolishing altogether courts of law, as far as the administration of these Acts is concerned, in laying down for the guidance of the central board that the decisions of the Board are to be on the real merits and justice of a case and shall not be bound to follow strict legal precedent. I can understand the irritation which all of us sometimes feel when we come up against some legal precedent which seems to bind us down to a course of action which we feel to be not the fair and meritorious one. But I would remind hon. Members that legal precedents have their uses as well as their disadvantages. It is only by legal precedents, by the interpretation which has been built up through a long history of court decisions, that the House of Commons when passing a Bill through its various stages can tell what meaning is going to be attached to the words which it uses. [Laughter.] The hon. and learned Member for East Bristol (Sir S. Cripps) must not despise his own legal knowledge because many a time I have heard him assisting the House by explaining what the precedents were and how certain things were likely to be interpreted.


But you did not take any notice of me.


That was not because I mistrusted the hon. and learned Gentleman's knowledge of the law, but because I mistrusted his intentions. I think that it is clear that if we want this board to be tied down to the instructions given to them by Parliament in the Act which constitutes them, they must be bound by the interpretations which have been put on the words we use by courts of law. If they are not to be so bound, if we do not know and have no means of telling what interpretation they are going to put on these words, then, for all practical purposes we might as well say to them, "Get on with the job just as you like." I know that hon. Members want to simplify the law in this respect but if simplicity is the only consideration why have we 77 Clauses in this Bill? Surely the simplest thing would be to say that any worker who gets a medical certificate to the effect that he has been injured can go to the Post Office and draw so much money. If you wanted to make it simpler still you could leave out the medical certificate.

The fact is, of course, that simplicity is not the only consideration. You have to try to get some balance between the greatest possible amount of simplicity and the greatest possible safeguarding of the fund from which this compensation is to be drawn. It is all very well for hon. Members to talk as if this fund, the source from which the compensation is drawn, had no interest at all for the workers and as if the workers were interested only in how it was paid out. The hon. Member for Hems-worth (Mr. Price) was quite frank. I do not say that he gave away his case but it was obviously his genuine belief that the compensation levy on employers is to a large extent paid by the workers in the trades concerned—paid for in the way of lower wages or of less opportunities for employment. Therefore, it is in the interests of the workers as a whole that the fund should be adequately protected and it is not in the interests of the workers that the balance should be cast, as it is under these proposals, wholly in favour of the claimants and against the fund. You must preserve some check unless you are to allow the safeguarding of the fund to go entirely by the board.

I want to point out one or two anomalies which might easily arise from the way in which these appeals are allowed. The first thing which I think hon. Members have to realise is the extraordinary concentration that is called for in regard to the appeals. As far as I can see, one man is called upon to hear personally the appeal of every one of 16,000,000 people who make a claim and who are not then satisfied. Anyone who pleases can go to the area officer, and if his claim is rejected, he can go as of right to the local committee. If it is still rejected, he can go to the appeal board. It is true, as the hon. Member says, that the local trade union has got to say that the man may go, but does he really think the trade union will say to the man, "We are not even going to give you permission to appeal to the appeal tribunal"?


Unfortunately, that is the point. They do it in many cases. I was going to criticise this provision. I think the case against it is much stiffer than the hon. Gentleman has said, because our experience of the referees employed at the exchanges is not good at all, unless the man has some form of union behind him.


I would point out this difference, that we are no longer dealing with cases where legal precedents count, and where a trade union may well say, "We will not allow you to go on with your appeal, because that point has already been settled, and you are bound by it." Here nobody is bound by anything; and, therefore, it is inevitable that every man will go higher, step by step, until either his claim is allowed or he reaches finally the appeal tribunal, the board, on which the chairman of the board has always to sit. If the chairman is ill, the board cannot meet, because the chairman, has always to be a member of it. That one man, besides administering the whole of this vast thing, will be called upon to make a mass of judicial decisions which no man can possibly do.

There is one other point. There is nothing, I believe, more irritating for the worker in a thing like this than lack of uniformity, for a man in one area to find that in his case he has been refused compensation, while not far away a man who, as far as he can see, has an exactly similar case has got compensation. Take a case under this Bill, of two contiguous areas, "A" and "B," and in each of them there is a man injured in exactly the same circumstances. In case "A" he goes to the officer, who admits his claim. That is finished, and there is nothing more to be said about it. There is no appeal by anybody; the fund cannot defend itself; the thing is settled, and compensation paid. In the next area the officer refuses the claim. The man goes up from him to the local committee, which also refuses the claim. He goes from there to the central board, which still refuses the claim. Now you have these two people, injured in similar circumstances, one of whom receives compensation and the other does not. But even more extraordinary is the fact that none of the lower people, the local committees or officers, are in any way bound by the decision of the board that in such a case compensation ought not to have been paid, and the officer in case "A" who has granted compensation in these circumstances, despite the board's decision in the other case, can go on for ever granting compensation in such cases.

The whole basis of it is grossly biased against the fund, and the workers are just as much interested in the fund as are the employers. There is no appeal on behalf of the fund, and the board's own decisions are not binding on anyone. As far as I can see, no representation is allowed on behalf of the employer personally or as an advocate on behalf of the fund. Consequently, a system which may, and I believe does work smoothly in a place like Ontario with 400,000 people, will be top-heavy and unable to be worked when 16,000,000 people, have to be taken into account. Although I believe the House will be wise in opposing this Bill, I do not think that there is any reason for complacency about the existing situation. I have not been very long in my present office, but, when not distracted by the barking of dogs, the crying of children, and the talking of cinemas, I have seen enough to realise that there are grave complaints about the existing system, and I would not go so far as to say that, if we were starting to-day with a clean sheet, we should start by setting up exactly the system which is in force to-day. During the Debate and in the Bill itself, a great many points have been raised which can be dealt with, if it is proper and wise to do it, without a radical alteration of the whole system, but by adjustments and modifications; and I can promise hon. Members that I will very carefully consider all the points that have been raised.

The hon. Member for South Bristol (Mr. Lindsay), whose speech I regret I did not hear, but which I am told was an admirable speech, called particular attention to difficulties which are caused by drafting in the various Acts and by the lack of consolidation, which might well be considered. The most important particular point which has been raised is that in regard to the mining industry. The hon. Member for Leigh (Mr. Tinker), who seconded the Second Reading, is very interested in this question, and ever since he raised it first in the House, the Home Office has been in close touch with the Mining Association with a view to remedying a situation which we all agree is deplorable, and was certainly never in contemplation by the House when this legislation was passed. There are two ways of doing away with the disadvantages which exist. Either the people can do it themselves, or the House will have to do it for them. I believe that it can be perfectly well, properly and securely done by the people, and that there is a genuine and successful effort to do it.

I am informed that great progress has been made in the last few months, that mutual indemnity companies are established now on new lines in nearly every area in the country where these difficulties have arisen and that their memorandum is so drafted as to cover the cases which were excluded under the old system. I am told that arrangements are being made that where individual collieries prefer to do their own insurance, it shall be done under a model which will prevent the sum set aside for purposes of the insurance being swallowed up eventually in the ordinary working losses of a failing company. I must admit that there is one area in which up to now we have not met with the progress we hoped and expected. That is the very area in which the hon. Member is interested, namely, Lancashire. I understand that negotiations are still going on. I know that the Mining Assocaition is doing everything it can to induce this area to come into line with what I believe is public opinion everywhere. I only hope that these efforts will be successful because, if they fail, other people will have to try other ways.

I apologise for having occupied so much time—I am afraid I have left the hon. and learned Member for East Bristol (Sir S. Cripps) rather a short time in which to reply—and I would like to end, as I began, by asking hon. Members to believe that I have not attacked this Bill with a desire only to pull to pieces some- thing which somebody else has created. I believe it to be a genuine effort, but I do not believe it is the right way. I think the manifold anomalies and difficulties of the present Act can be got rid of under the æegis of the present system, and that the more we devote our attention to a practical consideration of the actual difficulties which arise under the existing system, and the less we occupy ourselves with the erection of an admirable but, to my mind, costly and ineffective system, the more we shall progress towards securing what we all want, which is to see that the casualties of industry receive their compensation just as the casualties of the Army receive theirs. I think this has been a very valuable discussion, and even if I ask the House to reject this Bill I can promise hon. Members that I shall not forget in connection with the present system many of the suggestions and criticisms advanced in the Debate.

3.31 p.m.


We are grateful to the hon. Gentleman for the last words of his speech, and we quite appreciate that his criticism was intended to be constructive and not purely destructive. Of course, every scheme is open to criticism, and this one, like all others, has its imperfections, but I submit that they are imperfections which a Committee of this House might well tackle, and that no fundamental argument has been put forward against the principles which underlie the Bill. The hon. Gentleman went over the constitution of the board, noticed the large number of appointments it could make, mentioned the enormous number of 16,000,000 persons to be insured who would have to communicate through their employers with the board, and in that way attempted to build up a picture of some vast structure which would be hopelessly expensive to run. At the present moment, however, all those persons have to be insured. Practically every domestic servant in the country has to be insured. Communications have to be sent to the insurance companies; records of wages, if the case is not covered by an all-in policy, have to be sent to the insurance company.

All that is being done at the moment, but instead of being done, as in the case of unemployment insurance and national health insurance, through one centralised and centrally-controlled body, it is done through a vast number of independent bodies, overlapping, who are spending very large sums in collecting premiums. The returns of the hon. Gentlemen's own Department disclose that in 1931 the amounts paid in commission represented 8.72 per cent. and the profits 11 per cent.; so that nearly 20 per cent. of the money collected by the insurance companies, amounting to over £1,000,000, is being spent on items which clearly would not be required if there were a centralised board. It is not only a question of the substitution of a non-commercial board for commercial institutions, but it means centralisation and the knocking-out of competitive expenditure. Anybody who is familiar with the financial or other papers knows the great amount that is spent in advertisements by insurance companies, and the vast sum that is spent on agents by insurance companies all over the country. All those expenses have to be borne by the people who pay the premiums. We agree that to a large extent, if not entirely, they are borne by the wage-earners in the various industries. Probably every hon. Member will agree that those expenses should never be incurred by an insurance or a compensation fund of this kind. It is not right. Whether people are Socialists or not, they will agree that out of money which industry has put aside to compensate its injured soldiers, nobody should draw a profit if that can be avoided. That we have this vast competitive system, spending hundreds of thousands of pounds a year in competition to get that insurance business, and also drawing large profits—10 per cent.—out of that very business, is something which everybody must desire to see eliminated. I have not heard one suggestion in any speech from the other side as to any way to eliminate that, other than the way proposed in this Bill.

I am not saying that the constitution of the board is the best form of constitution, or that the dependence of the board upon the Home Office or upon Parliament is right. That is a matter for discussion. After the discussions upon the London Passenger Transport Bill, I should rather have thought that there would be a bowl of acclamation from hon. Members on the other side that we had dissociated this board from Parliament.

It is a curious thing that we should be accused of not associating the board with Parliament and not putting it under the direct control of the Minister. The hon. and gallant Member for Uxbridge (Major Llewellin) says, "You cannot even ask a question in the House of Commons." That is the very argument that is always put forward from the other side. Hon. Members say, "You must dissociate it from the control of Parliament, otherwise questions could be asked in the House." That would obviously be wrong, be most embarrassing for the Minister, be a waste of the time of Parliament, and be the wrong system, they say. When we offer something with which we do not altogether agree, but which we put forward in the hope that hon. Members on the other side will accept, a dissociation from Parliament, hon. Members say, "There is no control by Parliament." We are perfectly willing to insert in this Bill a complete control by the Home Office over the matter if they wish it, so that the Home Secretary can be questioned on every action of the board. It would not alter the principle, which is that of taking the matter out of competition between insurance companies, and out of the area of private profit.

There is another matter connected with this point. In the returns by the hon. Gentleman's Department for 1931, the liabilities which were not covered by insurance, in the seven chief industries for which particulars were included, were 33.2 per cent. of the total. That is, 33.2 per cent. were uncovered by any form of insurance. We believe that to be wholly wrong. It may be that the number of cases which suffered as a result of that is not very great, but if it is right, as the country has said that it is, that people who drive motor cars must be insured because of third parties that they might run into, surely it is essential that the employer who is going to make profit by employing workers should be insured to secure compensation to those workers. That is a very important aspect of the case. It does not only arise out of the bankruptcies of the coal companies; that is a particularly tragic feature of the situation. I am sure that the House will appreciate that there are cases up and down the country constantly occurring where small employers cannot pay the money for compensation. I have known cases where serious accidents have happened to workmen employed by small jerry-builders who are totally unable to pay, and are not covered by insurance at all. That that should be allowed to persist, quite apart from the question of bankruptcy of coal companies, and that we should continue to allow one-third of the total liabilities in these industries to be uncovered by insurance of any kind, is, in our opinion, a grave scandal at the present time. It is something which cannot be met by the argument, "Oh, your board is a clumsy proposal. It is going to cost money, and it is too elaborate." It can only be met by an argument which shows an alternative and better method of doing it.

Many hon. Members have said that, once you admit the principle of compulsory insurance, it is almost inevitable in a case of this sort that you must also accept the principle of insurance under some form of public board; that is to say, you cannot drive people into the hands of the insurance companies in a matter of this sort willy-nilly. If you are going to say, "You must insure," you must give them the means to insure; at least, you must give them the option of the public board, and whether you give them only the option of the public board, that is, of course, the way we believe it must be done.

The hon. Member raised the question of uniformity. He said that nothing was more desirable in insurance of this sort than some uniformity. We agree, but which is the more likely to give uniformity—a whole host of separate controls, mutual indemnity companies, insurance companies, private owners without any insurance, or one board? It is not uniformity of principle so much as uniformity of practice. One man may lose a leg in a factory and the employer will say: "I will meet you and pay you a round sum of £250." Next door, the insurance company may fight the case, and there may be an award of £600. Any sort of circumstance may intervene. There is a great lack of uniformity at present, and I am sure that the hon. Member will appreciate that, out of these 400,000 cases which arise every year the vast number of them are settled. The incident of the law which is so oppressive is that the insurance company or the rich employer always has the whip hand, because they can always afford the law in the last resort, and an analysis of the results of the cases shows strongly that that is so. Out of the 2,400 cases that were decided by the county courts in 1931, over 1,800 were decided in favour of the applicant, that is, nearly 70 per cent., which' is the clearest possible demonstration that the applicant had been driven to the courts by the more powerful body. That is the incident to which we so strongly object.

It is not that we suggest that the county court judges are not in many cases admirable judges for these cases, but it is the enormous expense entailed, an expense, as some hon. Members have stated, of from £35 to £80 for hearing a county court case. That expense makes it impossible for an ordinary individual, even if backed up by a trade union against an insurance company, as it puts all the weight on the side of the insurance company in the scale. Here we have attempted to devise some system by which that power of one side to force the issue into the law shall be taken away. It is not that we want in any way to weight the balance on the other side, but we want to set up as far as we can some impartial body. I do not think anyone can suggest that the committees or the board here will be biased bodies. Of the seven persons, only two will be workers' representatives. The financial representative is not very likely in many cases to be a worker; the medical representative is not very likely in many cases to be a worker; and the chairman, clearly, will not be what is ordinarily known as a worker. The hon. Gentleman knows quite as much about the law as I do. All that I am suggesting is that nobody can say that this has been devised to weight the balance one way or the other. The exact composition of the board is, naturally, a matter for Committee, and I am not discussing it. My suggestion to the House is that this provides a means by which the power to force people into litigation which they cannot afford is taken away from the big financial corporations which at the present time are running the majority of this compensation business.


Not the majority; only 22 per cent.


No; the great mutual indemnity societies are just as powerful financial corporations. They have their reserve funds; they have their large certain income coming in every year from the premiums paid; and it really does not make any great difference. The only benefit from them is that they have cut out a great deal of unnecessary expense. The mutuality has knocked out the 10 per cent. profit, and they have also been able to get off Income Tax, which helps them considerably. It is in order to avoid the, as we think, unfair power in the hands of the insurance companies and of the employers—though in most cases the employer is not really interested in these matters after a certain stage—that we have suggested setting up this board as a tribunal.

There has been no practical suggestion of any sort or kind from the other side of any alternative. If hon. and learned Members opposite had been able to say, "Here is a much better method by which you can do it," we should certainly have paid attention to them, but although there is, if I may say so with respect, an obvious uneasiness in the whole House as regards the present administration, as regards points here and points there which obviously need altering, there does not seem to be any idea as to how to approach these problems from a really fundamental point of view. Nevertheless, the problems, although they may appear to be small on the surface, really have their roots in the fundamental question as to whether workmen's compensation is to be a matter of profit to private individuals, or whether the whole scheme should be organised and run for the benefit both of the employer and of the worker. Nobody suggests at the present moment that that is being done satisfactorily. Everybody agrees that these large profits that are made out of it, so far as 22 per cent. is concerned if you like, are wrong, and that the existence of a liability of 33 per cent. uncovered by insurance is wrong. How are these evils to be cured? I suggest that the criticisms which have been made in regard to the board are to a large extent criticisms of detail which could be made in Committee, and which do not go to the basis of the matter at all.

Let me add a few words on one or two other matters. The hon. and gallant Gentleman said that there were two complaints which he thought we had against the existing system, the great expense and the legal technicalities. But there are three other very important matters, all of which are dealt with in this Bill, which he did not deal with in his speech. First, there is the point I have already dealt with of the power in the hands of the insurance companies and the mutual indemnity companies. That is an important matter, and is one of the reasons for the setting up of an impartial board in order that that power cannot be exercised.

Secondly, there is at present no linking up of preventive work with insurance for Compensation. No doubt hon. Members are aware of the very interesting paper read by Mr. Fox, managing director of the Stanton Iron Works, at the beginning of this year at the Home Office Industrial Museum, in which he gave the figures for his firm for the last ten years and showed the enormous reduction in compensationable cases that bad been brought about by the installation of an adequate ambulance service and adequate safety-first devices. That aspect of compensation, which is at present making a great drain on industrial resources, is not being tackled at the present time. There is no body really interested in tackling it from that point of view. The hon. and gallant Gentleman's department is doing splendid work as regards safety from the point of view of factory inspection and safety. But from the point of view of the immediate and quick dealing with injuries, which may very often mean that a man is saved a great deal of suffering and the compensation fund is saved a great deal of expense, there is no body that is interested to work on that. The insurance companies do not do it, and the mutual indemnity companies do not do it to any great extent. The private employer has neither the information nor the knowledge at his disposal to do it. It means supplying a knowledge of medicine and safety-first to managers and foremen—


We are able to supply that.


I quite appreciate it, and I am not In the least criticising the Department. But there is no coordination between that and compensa- tion. There is no drive by any body to decrease compensation by the use of these services. If you had such, a body, let me assume under the control of the hon. and gallant Gentleman's department, there would be a tremendous inducement to reduce the amount of compensation payable, not by trying to give the workmen as little as possible but by trying to prevent the incidence of those diseases and injuries which lead to compensation. It is from that angle we are so anxious that compensation should be attacked. By all means economise what you spend in compensation, but do not do it by trying to give people as little as possible but by trying to secure as few expenses and as few compensation cases as possible. That is the true economy of compensation. One of the most important aspects of this Bill is that for the first time it links up compensation with safety-first and protection. It is that linking in which, in my submission, lies the greatest hope for reducing the charge on industry of compensation. You cannot reduce the charge for compensation by cutting down what the worker gets.

I do not think anybody in this House would suggest that the worker gets too much from compensation at present. I think everybody would agree that he gets too little. It may be said that industry cannot afford more. I know the argument. If you agree that he gets too little, surely it should be the duty of the House to devise some means by which this fund—which is at present about £11,000,000 or so a year as the premiums for compensation—is made to go further. The only way that that can be done is by so organising the preventive side as to allow the same fund to give a smaller number of people a better amount of compensation. I beg that the House will bear that aspect in mind, and I do, indeed, beg the House to give the Bill a Second Reading, even if it were only for that point alone. This board—put what control over it you like, it does not matter— will be a great co-ordinating body in which 'all the efforts of industry, of the Government Departments, of medicine and surgery, can be concentrated for the purpose of trying to economise in the only true way you can economise as regards compensation.

There is one other, perhaps, general point with which I may deal. It was put forward by the hon. and learned Member for Norwood, who said that up to the present date we had not adopted the idea that compensation should be upon an indemnity basis. I think that it was the hon. Member for South Bristol (Mr. Lindsay) who said that the incentive to care given to the workmen by the knowledge that he would lose something if he were injured was a most valuable thing. For the ordinary person it is a sufficient incentive to care not to be maimed and have to suffer for years to come. I think that I can put that argument aside as being one which is unworthy of answering. I will for a moment deal with the indemnity basis. In my submission to the House, if it is admitted that workers cannot be men of perfection, like everybody else, and that they are liable to do careless things, like everybody else, but yet are essential in industry—no industry can be run without them—then the person who makes the profit out of the industry must take the risk of what the worker does. In fact, the only true and proper

basis of compensation is indemnity, until you get to the stage, possibly, when you can say that the industry is not run for profit but for the mutual benefit of the workers in the undertaking.

We are dealing at the present moment with a state of capitalist industry where industries are run for profit and workers are used in order to produce that profit. In a case like that indemnity is the true and proper basis. Until you eliminate the incidence of profit, you must give security that every employer will be able to pay the compensation which you can only get through compulsory insurance, and, above all, you must try and economise in the true way by the development of preventive means. For these reasons, I ask the House to support the Second Reading of the Bill.

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

The House divided: Ayes, 40; Noes, 133.

Division No. 38.] AYES [4.0 p.m.
Adams, D. M. (Poplar, South) Greenwood, Rt. Hon. Arthur Maxton, James
Banfield, John William Grenfell, David Rees (Glamorgan) Milner, Major James
Batey, Joseph Grundy, Thomas W. Parkinson, John Alten
Brown, C. W. E. (Notts., Mansfield) Hall, F. (York, W.R., Normanton) Price, Gabriel
Buchanan, George Hall, George H. (Merthyr Tydvil) Salter, Dr. Alfred
Cape, Thomas Hicks, Ernest George Thorne, William James
Cove, William G. Hirst, George Henry Tinker, John Joseph
Cripps, Sir Stafford Jenkins, Sir William Watts-Morgan, Lieut. Col. David
Daggar, George John, William Wedgwood, Rt. Hon. Josiah
Davies, David L. (Pontypridd) Jones, J. J. (West Ham, Silvertown) Williams, Edward John (Ogmore)
Davies, Rhys John (Westhoughton) Jones, Morgan (Caerphilly) Williams, Dr. John H. (Llanelly)
Edwards, Charles Lawson, John James Williams, Thomas (York, Don Valley)
George, Major G. Lloyd (Pembroke) Lunn, William
George, Megan A. Lloyd (Anglesea) McEntee, Valentine L. TELLERS FOR THE AYES.—
Mr. G. Macdonald and Mr. Groves.
Allen, William (Stoke-on-Trent) Cooke, Douglas Hornby, Frank
Applin, Lieut.-Col. Reginald V. K. Court hope, Colonel Sir George L. Horsbrugh, Florence
Atholl, Duchess of Craddock, Sir Reginald Henry Howitt, Dr. Alfred B.
Baillie, Sir Adrian W. M. Croft, Brigadier-General Sir H. Hudson, Capt. A. U. M. (Hackney, N.)
Balfour, George (Hampstead) Crookshank, Capt. H. C. (Gainsb'ro) Jackson, Sir Henry (Wandsworth, C.)
Balfour, Capt. Harold (I. of Thanet) Crossley, A. C. Jamieson, Douglas
Beauchamp, Sir Brograve Campbell Davison, Sir William Henry Kerr, Hamilton W.
Beaumont, M. W. (Bucks., Aylesbury) Denman, Hon. R. D. Kirkpatrick, William M.
Beaumont, Hon. R.E.B. (Portsm'th.C.) Dickie, John P. Lambert, Rt. Hon. George
Boulton, W. W. Doran, Edward Levy, Thomas
Bower, Lieut.-Com. Robert Tatton Duggan, Hubert John Lindsay, Noel Ker
Bowyer, Capt. Sir George E. W. Duncan, James A. L. (Kensington, N.) Lockwood, John C. (Hackney, C.)
Broadbent, Colonel John Emmott, Charles E. G. C. Loder, Captain J. de Vers
Brocklebank, C. E. R. Erskine, Lord (Weston-super-Mare) Mabane, William
Brown, Ernest (Leith) Essenhigh, Reginald Clare Mac Andrew, Lieut.-Col. C. G. (Partick)
Brown, Brig.-Gen. H. C. (Berks., Newb'y) Fermoy, Lord McEwen, Captain J. H. F.
Cadogan, Hon. Edward Fox, Sir Gifford McKie, John Hamilton
Campbell, Edward Taswell (Bromley) Goff. Sir Park McLean, Major Sir Alan
Campbell, Vice-Admiral G. (Burnley) Goodman, Colonel Albert W. McLean, Dr. W. H. (Tradeston)
Caporn, Arthur Cecil Grattan-Doyle, Sir Nicholas Maitland, Adam
Carver, Major William H. Grimston, R. V. Makins, Brigadier-General Ernest
Castlereagh, Viscount Hacking, Rt. Hon. Douglas H, Margesson, Capt. Rt. Hon. H. D. R.
Cazalet, Capt. V. A. (Chippenham) Hales, Harold K. Martin, Thomas B.
Chorlton, Alan Ernest Leofric Hannon, Patrick Joseph Henry Mayhew, Lieut.-Colonel John
Clayton, Dr. George C. Hartland, George A. Mitchell. Harold P. (Br'tf'd & Chisw'k)
Colville, Lieut.-Colonel J. Harvey, Major S. E. (Devon, Totnes) Moore, Lt.-Col. Thomas C. R. (Ayr)
Moreing, Adrian C. Ramsbotham, Herwald Stourton, Hon. John J.
Morris, Owen Temple (Cardiff, E.) Reed, Arthur C. (Exeter) Stuart, Hon. J. (Moray and Nairn)
Munro, Patrick Reid, James S. C. (Stirling) Sugden, Sir Wilfrid Hart
Nail-Cain, Hon. Ronald Reid, William Allan (Derby) Sutcliffe, Harold
Nation, Brigadier-General J. J. H. Ropner, Colonel L. Thomson, Sir Frederick Charles
Nicholson, Godfrey (Morpeth) Ross, Ronald D. Todd, Capt. A. J. K. (B'wick-on-T.)
Normand, Wilfrid Guild Runge, Norah Cecil Touche, Gordon Cosmo
Nunn, William Russell, Alexander West (Tynemouth) Turton, Robert Hugh
O'Donovan, Dr. William James Salmon, Sir Isidore Vaughan-Morgan, Sir Kenyon
Ormsby-Gore, Rt. Hon. William G.A. Samuel, Sir Arthur Michael (F'nham) Ward, Lt.-Col. Sir A. L. (Hull)
Peake, Captain Osbert Sandeman, Sir A. N. Stewart Warrender, Sir Victor A. G.
Percy, Lord Eustace Sanderson, Sir Frank Barnard Williams, Herbert G. (Croydon, S.)
Petherick, M. Savery, Samuel Servington Wills, Wilfrid D.
Peto, Geoffrey K. (W'verh'pt'n, Bilst'n) Shaw, Helen B. (Lanark, Bothwell) Womersley, Walter James
Pickford, Hon. Mary Ada Smith, Bracewell (Dulwich) Worthington, Dr. John V.
Potter, John Somervell, Donald Bradley
Pownall, Sir Assheton Somerville, Annesley A (Windsor) TELLERS FOR THE NOES.—
Procter, Major Henry Adam Sotheron-Estcourt, Captain T. E. Major Llewellin and Sir Vivian Henderson.
Raikes, Henry V. A. M. Southby, Commander Archibald R. J.
Ramsay, T. B. W. (Western Isles) Stanley Hon. O. F. G. (Westmorland)

Main Question, as amended, put, and agreed to.

Words added.

Second Reading put off for six months.

The remaining Orders were read, and, postponed.

Whereupon Mr. SPEAKER adjourned the. House without Question put, pursuant to Standing Order No. 3.

Adjourned at Eight Minutes after Four o'Clock until Monday next, 13th February.