§ 2 and 3. Mr. Higgs
asked the President of the Board of Trade (1) why he considers the collection of a further premium 414 necessary for war risks insurance before there have been considerable claims on the fund;
(2) whether he is aware that when war risks insurance premiums were first instituted they caused a large increase in prices; and as the collection of further premiums will tend to maintain that increase, will he reconsider the question?
§ The President of the Board of Trade (Mr. Oliver Stanley)
Before deciding to fix a premium, but at a much reduced rate, for the new insurance period beginning 3rd December, I gave full consideration to the alternative course of granting a further period of cover without premium. That course was rejected in view of the uncertainty in regard to the obligations of traders and the inequalities which it would have created, and the volume of work which its application would have involved for the Board's agents who are operating the scheme. The increase of price which can be justified for any commodity by reference to the cost of insurance depends on the frequency of turnover of stocks and the varying cost of insurance as determined from time to time. The new rate of premium covers the period up to 2nd March, 1940, and will enable traders more precisely to determine their obligations in this matter. The reduction should accordingly be reflected in a corresponding modification of the prices of the various commodities. I would add that the Prices of Goods Act will provide a safeguard against any abuse in respect of goods to which the Act is applied.
§ Colonel Wedgwood
Can the right hon. Gentleman say whether this is a tax or whether it is insurance?
§ Mr. A. Reed
Can my right hon. Friend say the amount already received in premiums, or whether there has been any increase?
§ 8. Mr. J. P. Morris
asked the President of the Board of Trade whether he will reconsider his decision to exclude nonferrous metals from the compulsory insurance scheme?
§ Mr. Stanley
No, Sir. The commodities in question were excluded from insurance under Part II of the War Risks Insurance Act, 1939, after consultation with the trade associations affected and after full consideration of all the circumstances.
§ Mr. Morris
Is my right hon. Friend aware that many of the largest holders of non-ferrous metals are anxious to insure their goods under the Government scheme and cannot understand why they are excluded when holders of similar commodities are included?
§ Mr. Stanley
All I know is that associations representing these people not only asked for what was actually done for them, but they wanted us to go considerably further.