HC Deb 20 September 1939 vol 351 cc940-1
38. Mr. A. Reed

asked the President of the Board of Trade on what calculations the premiums for compulsory insurance of stocks have been based; what percentage of the premiums is expected to be taken up by administrative and brokerage expenses; and what it is pro posed to do with the surplus profit on the premiums?

The President of the Board of Trade (Mr. Oliver Stanley)

As was stated in an announcement in the Press on 16th September, the rate of premium had to be fixed, in the absence of any actuarial data, on the basis of certain assumptions. It is yet too early to say whether these assumptions may require modification. As regards the second part of the question, I am glad of this opportunity of stating that the fire insurance companies and Lloyd's have undertaken to work the commodity insurance scheme as agents of the Government without profit to themselves. While it is impossible at this date to give any figure, I anticipate that the expenses of administration will constitute only a small fraction of the premium receipts. As regards the last part of the question, it is the intention of the Government so to adjust the rate of premium from time to time in the light of developments as to provide a fund which will not be more than sufficient to meet claims and expenses, and due account would be taken of any existing surplus in the making of such adjustments.

Mr. Dingle Foot

Does the right hon. Gentleman realise that in many cases far more than 6 per cent. is being passed on, particularly by wholesalers, who charge 1¼ per cent., or some such figure, on these prices, and who turn over their stocks many times a year; is this not far more than 6 per cent. and is the right hon. Gentleman watching that aspect of the matter?

Mr. Stanley

I am glad that the hon. Gentleman has called attention to this point. It has been assumed that in all cases this charge represents 6 per cent. on the stock. That, of course, is a complete fallacy, because it depends upon the number of times that the stock is turned over in the course of a year. I am investigating a case where that charge is being made to see whether, in fact, it represents the real turnover of the stock.

Mr. Macquisten

It means 6 per cent. per annum, not 6 per cent. on sales.

Mr. Stanley

It is 6 per cent. on the stock. If the stock is turned over four times in the year it represents 1½ per cent., and not 6 per cent., per annum.

39. Mr. Higgs

asked the President of the Board of Trade whether he is aware that the compulsory commodity insurance scheme is pressing hardly upon the jewellery industry and that many firms are finding it difficult to raise the money for the premium demanded; and, as most of the goods are comparatively indestructible, can he sec his way clear to reduce the premium on gold and silver wares?

Mr. Stanley

I have received representations from the jewellery industry as to the effect of the war risks commodity insurance scheme on that industry, and I am giving the matter urgent consideration.