HC Deb 17 February 1938 vol 331 cc2191-8

Order for Second Reading read.

9.12 p.m.

Sir K. Wood

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

The House will observe that the objects of this Bill are generally set forth in the explanatory memorandum. The necessity for it arises from a recent judgment of the High Court as to the effect of Section 2 (2) of the National Health Insurance Act, 1936. That Subsection, as hon. Members familiar with National Health Insurance will remember, was formerly Section 10 of the Act of 1935. Before the passing of the Act of 1935, it was possible for a person to become an employed contributor and qualify for an old age pension on a short period of insurance if having been the owner of a business, and therefore uninsured, he transferred the business to a relative on approaching pensionable age and becoming employed in the business. The Section was designed to exclude this, and to prevent what is known in insurance circles as "family employment" insurance on the strength of such employment, but this Section did not say that family employment was not to be employment within the meaning of the Act.

The result, as now declared by the High Court judgment, is that certain rights normally following the cessation of employment within the meaning of the Act are denied to persons in such "family employment" on 2nd August, 1935. They are also denied to persons who at that date, while so employed, ceased to be engaged in some other concurrent employment in respect of which they had been insured. Under the scheme of Health Insurance and Pensions, a person who ceases to be liable to compulsory insurance does not pass out of insurance immediately. He is given a "free" insurance period of 18 to 24 months, and, more important still, he has the right, if he has paid insurance contributions for two years, to continue to be insured as a voluntary contributor. There rights are given when as the Act puts it a person ceases to be employed within the meaning of the Act. The Section to which I have referred said that the persons who are engaged in one of these family employments shall not be insured, but it does not say that the employment itself is not employment within the meaning of the Act. As an unfortunate result persons who were engaged in family employment on 2nd August, 1935, when the 1935 Act was passed, were abruptly taken out of insurance without being given the usual light to a free insurance period, and they also lost their option of becoming voluntary contributors. Thus they lost not only their Health Insurance benefits but also their rights to widows' and old age pensions, although they were all compulsorily insurable under the law as it stood before the Act of 1935 came into operation.

If the law remains unamended persons engaged in this kind of family employment in future may also lose their rights in certain circumstances. I will give an example. A man may be in concurrent employment in respect of which he is properly insured. If the employment should cease, he would naturally expect to be able to continue his contributions voluntarily, but he would be unable to do so unless we passed this Bill, because his "family employment" leaves him still employed within the meaning of the Act. No discretion has been given to the Minister of Health. He has found himself powerless in this matter. Therefore the Bill proposes that this kind of employment shall be added to the list of employments which are excepted from compulsory insurance. It also, at the same time, enables the Minister to reconsider claims for pensions which have failed on a true construction of the present provision regarding these family employments, and to award a pension with retrospective effect when the claim would have succeeded on the basis of the new wording of the Section.

Mr. Logan

Does that mean that any such person would be able to make application as a voluntary contributor and be reinstated?

Sir K. Wood

It means that I shall be able to consider this claim, and if we pass this Bill, as I hope we shall, that person's rights will be given back.

Mr. Logan

Can the right hon. Gentleman say whether, owing to the new Bill, they will become State contributors or will the approved society have the power to accept them? Will they remain as voluntary contributors under the Act, in the society, or will they come under the new scheme?

Sir K. Wood

I will ascertain that information during the course of the proceedings. It is rather a technical point. Liability is placed upon the Exchequer to a very small degree. The Act of 1935 had no intention of removing liability. The amount is inconsiderable and, therefore, I do not think that there need be anxiety from the point of view of the Exchequer. I believe that anyone who has had experience, as has the hon. Gentleman opposite, of the working of insurance societies and of the particular cases which have arisen—not many—will feel that, in all the circumstances, this legislation was necessary to do justice to people affected in this way, when there was no such intention by Parliament, and in view of the interpretation of the law which was, no doubt, quite properly given at the time. For all these reasons I hope that the Bill will commend itself to the House. I am informed that the answer to the hon. Gentleman the Member for the Scotland Division of Liverpool (Mr. Logan) is in the affirmative.

9.20 p.m.

Mr. Rhys Davies

I rise to say a few words in support of this Measure, although there is nothing more painful for me than to be called upon to say a single word in favour of this Government at any time. The Bill now before the House as the right hon. Gentleman has said is a very necessary Measure. I want, however, to disabuse the minds of hon. Members. The right hon. Gentleman by reading from his brief made the whole position as clear as mud. I am sure that every Member of the House, even the right hon. and learned Gentleman the Attorney-General knows every angle of this Bill after the eloquent speech of the Minister of Health. In order to approach this Bill in the right spirit, I would like the House to listen to the closing words of the official Memorandum of explanation: It is anticipated that the number of such persons will not exceed a few hundreds and the cost will be small. That is the financial content of the Bill, and I want to say only one thing in support of the Measure. It is right that the decision of the High Court referred to should be reversed by this Measure. There are not many cases of the kind covered by the Bill, and perhaps the right hon. Gentleman and his deputy will know full well that when persons in family employment apply for membership the approved society is always in a difficulty on this particular issue. This Bill will not do very much to clarify that peculiar problem, but at any rate it will restore to several persons the rights which were intended for them under the Act of 1935.

9.22 p.m.

Mr. Logan

I am pleased at the introduction of the Bill now before the House because it provides an opportunity for the class against which an injustice was committed to come back into insurance. I am even more pleased with regard to the reply which I received to my question, that a reversion can take place. It would not be just if the reversion could not come to the approved society also. While the State Scheme brings in that particular class of contributor, if on 2nd August, 1935 a person was justly entitled, provided the 104 contributions had been paid, to become a voluntary contributor, such a person would have had the right then to make application to become a voluntary contributor in whatever approved society with which he had been associated. I understand from what the right hon. Gentleman has stated, although the new Act will come into operation, that it will be optional for a member who is qualified by reason of the 104 contributions either to determine to go into the Government scheme or have the right of applying as a contributor under the voluntary scheme to the approved society. My idea in putting this point of view is that there is a great deal at stake. It may be that such men or women may have been in an approved society. They may have contributed to the funds of a society able to give additional benefits to the voluntary contributor such as he would not otherwise be able to get.

In the circular issued with regard to the Regulations it is stated that a person can contract out or remain in the approved society, and I am anxious to know whether, in this respect, a reversion is to take place as a matter of equity. In justice to these people they ought to have the right to join the approved society if they so wish, because the additional benefits which may accrue to the funds of the society will be at their disposal. On the other hand, they will not be able to have those benefits. Can I have the assurance that you are going to give the rates which were permissible then and not the rates under the new Act? If that adjustment could be made, the regulation proposal form can be signed, as we have to do with all C contributors to-day. If they sign it they automatically become members of the approved society; otherwise they have the right to apply under the State scheme.

Sir K. Wood

I should like to have an opportunity of studying that carefully. I was able to give an affirmative answer to the hon. Member's first question, but this, obviously, needs very careful consideration. I will consider it and communicate with the hon. Member.

9.27 p.m.

Mr. Buchanan

I rise to ask a question. A certain number of people have been refused. I am afraid there may have been one or two who did not persist in applying because they knew that at that time they were outside the law. What steps is the right hon. Gentleman taking to assist those people without their having to make fresh claims? Also, will any steps be taken by the Department to see that any person who has not so made a claim is informed as to his position? As far as I can gather, certain people were passed out of insurance. Under this Bill they are in the main to get their rights back. They have not only passed automatically out of health insurance, but out of their approved societies. Will steps be taken to see that the approved society will take them back again? It has the right of refusal. It would be only just and equitable, seeing that they were passed out by this legal decision, that all other matters should be put right.

Mr. Tomlinson

As one who has had some experience in administering National Health Insurance, I should like to offer a word of thanks for this restitution. I should like to ask whether it will require a decision of the High Court at all times to remove anomalies under the Act. There are many classes of people who have suffered under National Health Insurance and have not received their rights back, because no action has been taken in the High Court.

9.35 p.m.

Mr. Ellis Smith

We should have been lacking in our duty if we had not raised the point that has just been put. It would appear that it is necessary to get a High Court judgment in order that questions of this kind can be dealt with. We were hoping, and we are entitled to expect, that a much more comprehensive Measure would have been introduced to deal with anomalies which have arisen in the administration of the present Act. Seeing that the Government have seen fit to introduce a special Bill to deal with a High Court judgment, we are entitled to expect that in the near future a much more comprehensive Measure will be introduced to deal with anomalies arising out of our experience of the present Act to deal with the low economic position of old age and widow pensioners.

Sir K. Wood

The Department have, I understand, noted practically all the cases that have arisen in this connection where a claim has been put forward and refused. I will undertake a complete revision of all these cases and, if there are any which have not been noted, I will endeavour to carry out the intentions of Parliament.

Mr. Westwood

Will there be co-operation between the Ministry of Health and the Scottish Department, so that whatever action is taken in England will be followed up by similar action in Scotland?

Sir K. Wood

There is always close co-operation between the two Departments, and my right hon. Friend and I will see that it is closer still if possible. As far as membership of approved societies is concerned, I am informed that they have in the great majority of cases kept these members still in association with their society. Where they have not gone back I will use my endeavours to see that they retain their association with their old societies.

9.33 p.m.

Mr. Batey

The Bill will affect very few people at a very small cost. There are many anomalies in connection with National Health Insurance. Why does not the right hon. Gentleman deal with the question on a larger scale? We have been urging him for a long time to bring in a Bill amending the 1935 Act to deal with the large mass of anomalies under which people are suffering, but he does nothing. Is he going to continue this course of coming to Parliament with these small matters and leaving alone big questions which affect so many people? Again and again we have urged him to deal with wives who cannot claim their pensions when the husband reaches 65 and they have to live as best they can on 10s. That is a matter to which he ought to have given his attention long ago. If we pass this small Bill unanimously, when are we to expect him to deal with these other important questions?

Bill committed to a Committee of the Whole House, for Monday next.—[Mr. Furness.]