HC Deb 15 November 1939 vol 353 cc773-9

5.59 p.m.

Sir H. Williams

I beg to move, in page 2, line 19, to leave out"in addition to imposing, "and to insert" impose."

This Amendment, and succeeding Amendments on the Paper in the names of my hon. Friends and myself, all cover the same point, but that point, I think, is adequately met by another Amendment which stands in the name of the President of the Board of Trade to line 25, in which is set forth in detail the requirements which people have to fulfil or which may have to be imposed. My object is to avoid having the Board of Trade in the position that they might prescribe different requirements for different people. Now that the right hon. Gentleman proposes to define them in clear words and everybody will know where they are, I think any grievance which may have existed will have been removed if that Amendment is carried, and, therefore, I do not propose to persist in these Amendments of mine. Having regard to the fact that it will save a little time, after the explanation given with regard to the Amendment incorporated in Clause I, I do not think there is now any need to move the Amendment which stands in my name to Clause 6, in page 4, line 39, at the end, to insert: Provided always that no newspaper, journal, magazine, or other periodical publication which has been published and circulated for the past three years to members only of an existing organisation shall not be deemed to be circulars, journals, magazines, or publications within the meaning of this Act. I,therefore, ask leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

6.3 p.m.

Mr. Stanley

I beg to move, in page 2,line 22, after "which," to insert: if the persons to whom the permission is granted avail themselves thereof. This and the next Amendment on the Paper cover two separate points, but it might be convenient to deal with them both together. The first is one which, I admit, had not occurred to me when the Bill was originally drafted. It became apparent, on looking into it again, that we had not retained any sanction in order to ensure that, when the Committee of the Board of Trade had passed a prospectus or an advertisement on the ground of certain representations made and assurances given by a company, those assurances contained in the prospectus were carried out, and we should have to wait, therefore, until some further application for leave to advertise was made. That, clearly, was an unsatisfactory state of affairs, and hon. Members will see that we now make this a condition of the permission.

The second point was that during the Debate on the Second Reading it was pointed out in several quarters that the power to attach conditions was indeterminate and might be held to be too wide. I therefore thought it advisable to set out in detail the sort of matters particularly with which these conditions would deal. Hon. Members will see the four separate requirements set out in the second Amendment. There is only one additional point that I would mention, and that is that, of course, no way in which we restrict the power to impose conditions can in any way restrict the power of the Committee to advise or of the Board of Trade to decide to refuse publication altogether. It may be that where we are not satisfied that these conditions, and these conditions alone, would make a scheme watertight, we should have no other alternative but to refuse the advertisement of the scheme altogether. On the whole, I came to the conclusion that, even though in certain cases it might work more hardly against the applicant for permission to circularise, yet there was something in the criticism that we have taken here very wide and undefined powers, and it was, therefore, better, at the risk of one or two applications which might otherwise have received a conditional permission now having to be met only with a refusal, more to particularise our powers in the Bill.

6.7 p.m.

Mr. Alexander

The decision to put in the Bill certain specifications as to what the Board may prescribe is, I think, all to the good, but, of course, there are the words "including, if the Board of Trade think fit." That is just as wide really as ever, and while it is good to know that these are four points which the Board may think fit to include, it does not really carry us very much further in the actual specification. No one can object to the substance of either of these particular requirements—they are all reasonable—but there are one or two things that one might like further defined. In these mutual associations I think it is a very important thing, if possible, to require a public audit, that is to say, an audit to be prescribed by the Board of Trade, say, on the lines on which they prescribe an audit under the Industrial and Provident Societies Act, with an auditor, recognised by the Treasury. I think an assurance on that point would be helpful.

Then there is another point. The right hon. Gentleman, I am sure, has had from his advisers notes of the various types of display advertisements as to the safety that a particular concern carries in respect of war risks. I can think of promoters of a good scheme who would desire to fall in with this, that there should be required by the Board of Trade an actual prominence of the fact that a particular scheme could not produce a fund which covered actuarially every risk to be expected and that it was, in fact, only a partial indemnity. It may be said, of course, for the sake of debate, "Oh, you may get a scheme in which you do cover the actuarial risk." I do not think that is possible, and if it were so produced, you would not make the requirement, but in regard to the type of advertisement which has been produced up till now, I am anxious that you should produce on the other side a displayed statement as to what are the limits to which the indemnity is provided under the fund. You make it clear in respect of Government insurance schemes, and I think it ought to be equally clear in respect of a scheme which has in fact to get the permission of the Board of Trade to be circularised.

Sir J. Lamb

I should like to support the Amendment, because it removes to a very large extent some of the fears which I had when I put down the Amendment to the previous Clause, which I did not move. I am glad that my right hon. Friend has gone so far in trying to allay the legitimate fears which some of us had.

6.10 p.m.

Mr. Stanley

In reply to the right hon. Member for Hillsborough (Mr. Alexander), I fully appreciate his point about an audit as being one of the most important provisions, and, of course, I will see that the requirement about auditing and publishing accounts is one of the matters on which provision shall be made. With regard to the second point, there again I am in full agreement with the right hon. Gentleman. I think probably it is more a matter of the general lay-out of the advertisement than of any particular phrase which ought to be inserted in it. What causes the wrong impression is the optimistic and glowing slogan in one place and the small cautionary wording in another. The right hon. Gentleman will realise that our permission is a permission to distribute a circular, and that if we are not satisfied with the layout and the general impression that a circular gives, we can refuse that permission. This power to impose conditions does not detract at all from that power that we have to refuse a particular circular.

Amendment agreed to.

Further Amendment made: In page 2, line 25, leave out from "appear," to the end of the Sub-section, and insert: being requirements designed to secure that any representations made in the circulars or advertisements are complied with, including, if the Board of Trade think fit,—

  1. (a) requirements as to the total or partial separation of the funds respectively available for the payment of claims and the payment of expenses;
  2. (b) requirements as to the proportion of the premiums or other similar payments which is to be allocated to the payment of claims;
  3. (c)requirements as to the manner in which any fund available for the payment of claims is to be maintained and dealt with;
  4. (d) requirements as to the keeping, draw-ing-up, auditing and publication of accounts."—[Mr. Stanley.]

Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."

6.12 p.m.

Mr. Alexander

I am bound to say that while the President of the Board of Trade is doing his best to make the wording of the Bill meet the specific objects which he has in mind, I am very concerned as to the general effect of the operation of this Clause and of the next Clause of the Bill. I am concerned lest the result will be that in respect of this very difficult task of dealing with war risks insurance, you will get a number of schemes, most of them working for the obtaining of business in more or less limited areas, which, nevertheless, will have approval from a Government Department to circularise and advertise, and on the advice of an Advisory Committee set up under Statute, in such circumstances, in my view, as will give to a large section of the public, especially that section of the public which does not read as carefully as it ought to read the kind of prospectuses in connection with these schemes, the impression that they ate getting a really effective insurance scheme. I am very, very doubtful about the policy. I am most anxious that the right hon. Gentleman should stop an abuse, and, therefore, within the limited objects of the Bill, he and I are in agreement, but I am concerned about the effects upon the public mind of Government approval given to the actual circularisation of prospectuses.

If you take the kind of way in which it will operate, as the hon. Member for Colchester (Mr. Lewis) said on the Second Reading, there are actually geographical and territorial areas where a specific object is desired to be obtained. If I may quote an instance that the hon. Member for South Croydon (Sir H. Williams) mentioned, also on the Second Reading, he had in mind, in one of his remarks, very large and important businesses, but while the businesses that he mentioned were strong and powerful enough to devise a scheme, there are, of course, other classes of industries and properties which would not be as powerful and as strong, but which would almost certainly be directed into their particular trade and limited channels. In that respect I am driven back the whole time to the feeling that we are really playing with the matter and leaving this large and important risk to be faced in limited areas by really ineffective methods. It is impossible to move to this Clause an Amendment which is effective, and that is why I have not done so, but I really cannot let the Clause go on to the Statute Book without warning the Committee and the public as to the dangers which I see inherent in it becoming part of the law of the land.

6.16 p.m.

Mr. Lewis

I sympathise with what the right hon. Gentleman said as to it being a pity that we have not before us some comprehensive scheme for dealing with this risk as a whole. As we have not got such a scheme, and as we are told that it cannot be prepared, we should be careful not to make it more difficult than it is already for such people as may be inclined to help themselves to get together to help themselves by means of mutual schemes. I hope the President of the Board of Trade will confine his operations under the Bill to such matters as those which were referred to in the Amendment which he moved, that is to say, to seeing that a proposal is fairly and honestly described in the advertisements, that the funds are properly treated, that proper accounts are kept, that provision is made for audit, and so on. I hope that he will not hamper such efforts as are made within the provisions of the Bill.

6.17 p.m.

Mr. Stanley

The right hon. Gentleman will not expect me on a not particularly relevant Clause and on a not particularly relevant Bill to go into the question whether a Government war risk insurance scheme is possible. The Government have come to the conclusion that the Government scheme for compensation is the only practical scheme there is. We have to consider, therefore, what we can do within this limited Bill. The hon. Member for Colchester (Mr. Lewis) used a phrase with an unfortunate double meaning. He said he hoped I would not operate this Bill to try and restrict the activities of those gentlemen whose only desire was to help themselves. Had he used the words "mutual assistance" what he said would perhaps be less liable to misunderstanding. It is just those gentlemen whose only desire is to help themselves whom I want to stop. I agree with the right hon. Gentleman and the hon. Gentleman that the thing we really want to do is to see that the limits of these schemes are fairly set out to the people who are asked to subscribe to them. If they really know the limits and live under no false idea of the kind of protection they are getting, it is for them and them alone to decide whether it is worth while paying the money for which they are asked, for the benefit which they may get. Apart from the question of honest and proper management of the fund, and so on, the most important part of the Board of Trade's work will be to see that the various circulars and advertisements set out the schemes in a fair light which will give to the prospective applicant a proper chance of judging whether it is in his own personal interest to join the scheme or not. I assure the right hon. Gentleman that I have that very much in mind.

Question, "That the Clause, as amended, stand part of the Bill, "put, and agreed to.