§ 5.4 p.m.
§ Sir Joseph Lamb (Stone)
I beg to move, in page 8, line 38, at the end, to insert:(iii) any mutual war risk insurance scheme for agriculture where such scheme is recognised by the Board of Trade.I apologise to the House for moving a manuscript Amendment, but the time has been short between the Committee and Report stages. I have not been able to get it on the Paper because only this morning I received an influential deputation asking that this matter should be cleared up. It is an important matter to agriculture, but, owing to the short reference made to it on the Committee stage by the Financial Secretary, there is uncertainty in the industry about the position. When the Government introduced their war risks insurance scheme, agriculture was included, but, owing to the high rates and the inability of the industry to pay them, it was at its own request excluded from the scheme. The industry then set up a war mutual insurance scheme which undertook this work at much lower rate. Had agriculturists remained in the Government scheme they would under the Bill have been allowed to deduct the premiums from their Income Tax returns, but as they had to be excluded and put into a special scheme, there is doubt whether they can deduct the premiums in respect of this scheme. I am not asking for this concession on behalf of the insurance companies; I am doing so on behalf of agriculture. We 1022 know that there is a great shortage of capital in the industry, and that farmers have to conserve all they can for food production. I have provided in the Amendment that the scheme must be approved by the Board of Trade. That will be a guarantee against bogus schemes being put up with an ulterior purpose, and will ensure that the scheme is one which is simply intended to take the place of the Government scheme which was not applicable to agriculture.
§ 5.8 p.m.
§ Mr. Price (Forest of Dean)
I beg to second the Amendment.
The reason why agriculture could not go into the original scheme was that the premiums were too high. The risks of war damage to agricultural property are not so serious as those to industrial property because it is in a different category. In the State insurance scheme the premiums were much too high for agriculture because the scheme was keyed up to meet the level of industrial risks. Agriculture had to be left out because it could not face the premiums. No provision has been made for that industry in any other scheme, and agriculturists have had to produce their own scheme. Naturally the Treasury will be concerned that no loophole is created through which there might be evasion of Income Tax, as there could be if the scheme were not controlled, but the Amendment provides that the scheme shall be approved by a Government Department. The matter is thus made watertight.
§ 5.10 p.m.
§ Mr. Graham White (Birkenhead, East)
I have no means of knowing what answer the Chancellor may give to this proposal. There is a considerable disadvantage in having a manuscript Amendment put before us, for it gives us little time to consider it. I speak with some knowledge of these matters, however, and it seems to me that the Amendment strikes at the foundation of the whole principle of insurance. My hon. Friend the Member for Stone (Sir J. Lamb) and my hon. Friend the Member for the Forest of Dean (Mr. Price) have adduced as a reason why the Amendment should be accepted that the scheme would be approved by the Board of Trade. That is wholly irrelevant to the issue involved. The issue is whether any collection of people engaged in a business or occupa- 1023 tion—I understand the Electricity Commission has something of the kind on foot—should be able to make a mutual arrangement—
§ Sir J. Lamb
I put the Board of Trade in the Amendment, but I am willing, if the Chancellor desires, to accept any other Government Department. I put it in for the purpose of showing that it must be a genuine insurance scheme.
§ Mr. White
The authority which has to approve the form of insurance is irrelevant to the issue. The whole point is whether persons can make mutual arrangements to give themselves some measure of insurance against war risk, and then be able to charge the premiums, which might be at any level, as an allowance for Income Tax purposes. I rise on the spur of the moment to point out the difficulties as I have some responsibility in connection with the Board of Trade Advisory Committee, and I hope that the Chancellor will give the proposal careful consideration before he accepts it.
§ 5.13 p.m.
§ Mr. Barnes (East Ham, South)
The principle involved in this Amendment was raised by me and some hon. Friends on Clause 12 during the Committee stage. I am not unsympathetic towards the problem which the hon. Member for Stone (Sir J. Lamb) is introducing, but it raises a difficulty similar to that which confronted us on the proposed new Clause dealing with voluntary hospitals. I trust that the Chancellor will be able to meet the problems which the Amendment raises, but I submit that it cannot be met by dealing with the difficulty of agricultural insurance alone. As I understand the position when we left it during the Committee stage, the Chancellor was not unsympathetic to the purpose which many organisations have in mind in endeavouring to tide their members over the grave difficulties and hardships that might arise from war damage. I understood that the Chancellor was prepared to look into the whole problem and see whether it could be carried a stage further by consultation and negotiation. If the matter is not finally settled and the Chancellor is prepared to meet organisations to discuss the difficulty, those interested in agriculture and others might have an opportunity of 1024 exploring the problem. There are certain precedents on a voluntary basis.
On Clause 12 we had the difficulty on the Committee stage that the Treasury could not consider any scheme that would permit an evasion of Income Tax. It is not the purpose of a good many people to-day to avoid their legitimate tax liabilities. There is a desire on the part of those who have a mutual interest in particular trades and businesses to prevent them being ruined as a result of war damage, and I suggest that we ought to foster that spirit. The State has definitely refused to accept liability to make good such damage, and ought to look with sympathy on the efforts of those who are prepared to deal with the situation by voluntary means. Those for whom I speak would be prepared, if any steps were taken to meet these difficulties, to agree that any surplus funds after meeting claims for compensation should find their way into an investment with the State for the time being, thus helping to meet the cost of the war, and would be prepared to agree to regulations which would enable the Treasury to safeguard any distribution of that surplus afterwards so as to ensure that it did not provide a means of evading taxation. I sincerely trust that the Chancellor of the Exchequer, having reflected upon what was said in the Debate during the Committee stage, will be able to indicate that he is prepared to consider schemes or to consult with those who are interested in such proposals.
§ 5.17 p.m.
§ The Financial Secretary to the Treasury (Captain Crookshank)
The hon. Member for East Ham, South (Mr. Barnes) has rather extended the scope of this discussion. This is a small Amendment dealing with a particular agricultural scheme, and I could not go further on the general issue than what was said by my right hon. Friend on the Committee stage. What was said by him and by me on that occasion is on record for all who want to read it. My right hon. Friend is always very approachable, and anyone who wants to consult him on the subject will be at liberty to do so, but he made it clear then, and wants it to be made clear now, that he would not be prepared to consider any proposal which would run contrary to the purpose of this Clause. It is a Clause which 1025 deals with the disallowance of certain payments in the matter of assessment for Income Tax and, as a consequence, E.P.T. as well. I am not now going into the whole question, but will try to deal briefly with the case presented by my hon. Friend the Member for Stone (Sir J. Lamb). He asked that there should be special exemption for payments to any mutual war risk insurance scheme in agriculture provided it was a scheme approved by the Board of Trade. The Board of Trade is not at present charged with the function of approving any of these schemes. He says that he does not mind whether the scheme is approved by the Board of Trade or anybody else, so long as it is approved.
§ Captain Crookshank
He suggests that some Government Department should "vet" the scheme and say that it is all right. My reply to that is that the scheme is either an insurance scheme or it is not. Insurance schemes have for a long time past received certain consideration. This is a mutual war risk insurance scheme. It is not an insurance scheme because ex hypothesi it is a mutual war risks scheme, and being, to use his own words, a war risk scheme, it is something which purports to be an insurance against a risk which is admitted on all sides to be uninsurable. That is the answer—that it is not an insurance scheme. I think he implied that this particular scheme had been authorised in some way by the Board of Trade, but I hope that impression will not go out, because all that the Board of Trade have ever had to do with this matter has been to restrict the advertisements. An Act was passed for the restriction of advertisements of war risk insurance schemes at the end of last year, and all that the Board of Trade has to do is to decide whether the advertisements which are sent out are in the proper form, but that does not imply any responsibility for the soundness or otherwise of a scheme.
§ Sir J. Lamb
Surely the Board of Trade do rather more than that. There must be some reason why they permit publication of some advertisements and not of others. The scheme must be approved.
§ Captain Crookshank
All they have to do is to see that it is a genuine scheme and not a fraud. That is about as far as it goes. They have nothing to do with whether it is good in the insurance sense or bad in the insurance sense, but that is the sort of approval which would be necessary, presumably, if we were to import into the Clause such a concession as the hon. Member asked. Already there are provisos (i) and (ii) in Subsection 3 (b), and the hon. Member wants to add a third to them. While we all have sympathy with agriculture, for times are very difficult for the farmers, we cannot agree that a scheme, just because it is concerned with agriculture, which does not fall within the limits which we have set, should on that account have preferential treatment. The matter was discussed on a larger scale in connection with co-operative undertakings during the Committee stage. I am afraid that my right hon. Friend is not able to accept this Amendment.
§ Sir J. Lamb
I am sorry that the right hon. and gallant Gentleman is not able to accept my Amendment, but he did not answer my point about the injustice of allowing this concession in the case of a Government scheme and not allowing it because those concerned here, for reasons outside their control, could not put up a Government scheme.
§ Amendment negatived.