HC Deb 07 February 1940 vol 357 cc344-63

9.16 p.m.

Mr. Rhys Davies

I beg to move, in page 1, line 15, to leave out from "assurance," to the end of line 16.

The object of this Amendment is to raise once again the question of the limit of £50 mentioned in Clause 1 of the Bill. When the Bill secured a Second Reading the Attorney-General sought to explain why the Government had inserted any sum at all in the Bill. If I were as learned and as clever as the Attorney-General, I should be inclined to be very critical of his statement. The more I read in the Official Report of the House of Commons of what he said, the more I am puzzled as to what he meant. I have turned up Section 24 of the Act of 1923 and having read that and the right hon. and learned Gentleman's speech, I cannot honestly say that he has to my mind made out his case in favour of this £50 limit.

I will give one example in support of my contention. This Bill is to afford protection from forfeiture to holders of industrial assurance policies up to £50. But there is nothing to prevent a policy-holder holding several policies, say, one for £20, another for £30, another for £40, and in the total he may have a policy value of£100 or £120. He will have the protection of this Measure, but if he holds only one policy valued for £55, then he will not get that protection. I do not want to criticise the right hon. and learned Gentleman, or to suggest that he is too closely in touch with the insurance companies. I would not dare to do that, but I am under the impression that the insurance companies have enormous influence with this Government and that before the Government move in a matter of this kind they consult the insurance companies. As 1 said on Second Reading, the Bill is a very necessary one, and it will undoubtedly safeguard policy-holders, but I am still of opinion that this £50 limit has been inserted on the instigation of the insurance companies without any reference to what the policy-holders would like to have done on their behalf. When there are conflicting interests such as insurance companies and financiers and shareholders involved in a matter of this kind, it is the duty of Parliament to safeguard the interests of the policy-holders who cannot be consulted.

I would ask the right hon. and learned Gentleman even at this stage whether it is not possible to eliminate this sum altogether. He knows how to do it. There are two or three more stages of the Bill where he can do it. There are about 80,000,000 policies. I do not know how many of them are under £50. Some 10,000,000 new policies are given out every year. I cannot tell how many of those are over £50. It seems to me rather amean thing to do, when you are trying to safeguard policy-holders, to say that no policy over £50 shall be safeguarded at all. On the Second Reading the right hon. and learned Gentleman came back all the time to this, that a policy over five years, and in some cases over three years duration, had a value that you could not forfeit at all, but I understand that some of those arrangements are quite voluntarily made by the insurance companies, and there is no compulsion on them to do some of the things the right hon. and learned Gentleman said they were doing. This is a very narrow but an important point, and I am still hoping that the right hon. and learned Gentleman will see his way clear to-night to give us an indication that he is willing, in spite of the advice he has received from the insurance companies, to wipe out altogether any sum whatever and let all the policies which come within the scope of the Bill be safeguarded from forfeiture under the conditions laid down, because, when we safeguard these policies, the insurance companies take care that they get all their money in the end. Even if the premiums are not paid, when they are calculated at the end of the period they are mulcted in 3 per cent. compound interest, and the policy-holder has to pay up. Even if we eliminate any sum from the Bill the companies are not going to lose financially.

9.23 p.m.

The Attorney-General (Sir Donald Somervell)

As the hon. Gentleman said, this is a narrow point. On the Second Reading I tried to explain, what was appropriate to that occasion, the general scope and idea of the Measure. It was that special protection against forfeiture should be given to what I may call the characteristic industrial policy, and undoubtedly the characteristic industrial policy is one for less than £50. I agree that you get the anomaly under the Bill as it stands that a particular person or family may have two, three, four, or even as many as six policies, which together add up to more than £50. There are anomalies whatever measure you adopt. The reason why the £50 limit was taken was, first of all, because it was felt that the small policy holder was entitled to special protection and, secondly, because the limit of £50 undoubtedly covers the vast majority of the characteristic industrial assurance policies. There are some industrial policies—not a great many—over £50 and, of course, a great many policies over £50, which are not industrial policies. The non-industrial class do not get statutory protection, but the companies have been called together and have agreed on a scheme which, I think, gives reasonably fair treatment to the ordinary life policy holder.

I think it would have been anomalous if, in the somewhat exceptional cases where you have a life policy over £50 which was within the Industrial Assur- ance Act, you gave that the special protection which it is thought proper to give to the smaller policy holder. It does not quite rest there, because if it is said, as it might be, that the industrial policy over £50 is very often taken out by someone on the average less well off than the person who takes up a £100, £200, £300, £400, or £500 life policy in an ordinary company, and therefore it might not be right to leave him completely unprotected, the answer to that is that Parliament in 1924 did give some statutory protection to all industrial policy holders in the matter of forfeiture and some other matters. We considered, as I explained on the Second Reading, the position of the industrial policy over £50 very carefully, and we felt that under the existing statutory law and under the practice of companies and collecting societies he would get fair treatment, and there were good grounds for not giving that somewhat exceptional kind of policy the special statutory treatment which we think appropriate to the smaller policies and the characteristic industrial policies. For these reasons I suggest that the Amendment should not be accepted.

9.28 p.m.

Major Milner

I do not think the Committee ought to accept the right hon. and learned Gentleman's argument. He has offered no justification whatever for the figure of £50. For the Attorney-General to say that because the law applies to the great majority of industrial policies, as it may well do, it is adequate and sufficient is really a travesty of our so-called justice. What satisfaction is it to the 20 per cent. or 25 per cent. who have industrial policies over £50, if they are not protected in this way, that the 75 per cent. may be protected under the Bill? That is a very feeble argument. I have not heard the right hon. and learned Gentleman offer a single justifiable reason for limiting the Bill to £50. Surely one would have thought that a person who is thrifty and is perhaps willing to deny himself more in order to take out a policy for £75 or £100 instead of £50 is the man or woman who, if there is any choice, ought to be favoured by the law in these special circumstances. The right hon. and learned Gentleman did not deal with the proposition put up by my hon. Friend. What is the answer to the proposition that it is possible for me to take out four policies of £20 each and on each one I shall have the benefit of this Act, and yet any of my hon. Friends who take one out for £60 or £55 will not have the protection of the Act? What possible justification or rhyme or reason can there be in that proposition?

The right hon. and learned Gentleman desires to be fair and to do the right thing in all these matters, but I am afraid he has come under the evil influence on this occasion of the industrial insurance companies and collecting societies. But what does it matter to them whether the figure is £50, £100, or no figure at all, so long as it is an industrial policy? Surely it would be an advantage to have uniformity and, instead of having one rule for a policy of £50 or less and another for a policy over £50 and another rule for policies which are not industrial policies, have some arrangement whereby all these policies would be on a uniform and satisfactory basis. Everyone will then know the law, and there will be no difficulty for the ordinary man or woman in the street. I see no justification for limiting the policy in this Bill to the sum of £50, and I hope that my hon. Friends will take the matter to a Division if the Government cannot agree to consider the question.

9.31 p.m.

Mr. Watkins

I join with my hon. and gallant Friend in hoping that the mind of the Government is not closed against this Amendment. It seems to me perfectly reasonable. I submit to the Attorney-General that the Government have brought this Measure forward in order to prevent hardship falling upon policy holders because of their inability to pay their instalments through causes arising out of the war. That is an entirely laudable object, but the Government, having done that, have then come forward and said that only those can apply who have experienced hardship if their policy is £50, and not those whose policy is £55. In other words, the Government say that because a man has entered insurance two years before the outbreak of war, it can apply to him, but because another man has entered 23 months before the war, it cannot apply to him.

The Chairman

I think that is a question which arises on the next Amendment.

Mr. Watkins

I thought that we were seeking to remove the lines in which both these provisions are made.

The Chairman

The question of the two years or the one year is a different question from that which we are discussing now.

Mr. Watkins

Very well, I will conclude by saying that if the Government want to have the maximum amount of advantage for the community out of this Measure, they must remove this limitation and let anyone, as far as is reasonable, who is likely to experience hardship benefit under this Measure. I hope the Government, either now or at a later stage, will bear this in mind and include as many people as possible in the terms of the Measure.

9.34 p.m.

Mr. Lipson

I assume that there must be some reason why this figure of £50 has been put into the Bill, otherwise the Government would not have put it there. I must confess after listening to the Attorney-General, that I am still in the dark as to what the Government's reasons are. The Attorney-General told us that there were good grounds for putting in this limitation of £50, but I have to confess again that he has not told us what those good grounds are. If he wishes me to vote that the £50 should remain, he will have to give me his reasons. In fact, I think the Committee is entitled to know these reasons. He said the £50 limit covers the vast majority of cases, but what is sauce for the goose is also sauce for the gander. Can he give us any good reason why this Bill is desirable up to the £50 limit and why it becomes a bad Bill if the limit is removed altogether? We ought to be given some reason, if there are any reasons. Otherwise, I shall vote for the removal of the limit.

9.35 p.m.

Sir R. Acland

On the Second Reading the Attorney-General assured me that no one is financially interested in the funds of insurance companies except the policy holders. That suits me very well, because when we come to take over these big companies, there will be nobody who will have any claim for any kind of compensation except, of course, the collecting agents whose standards of living we shall improve. Nobody is interested in this matter except the policy holders inter se, and our duty is to protect the interests of the different kinds of policy holders. The Mover of the Amendment said that the insurance companies cannot lose anything if this Amendment is passed, but is there not a certain sense in which insurance, companies, either regarded as units or as collections of policy holders, will gain something if the Amendment is not passed? They will gain it at the expense of a certain class of policy holder, because when a policy which has been paid for up-to-date is forfeited, there can be no doubt that the insurance company or the policy holders who remain gain financially.

A substantial number of policies over £50 will be forfeited, and a great many people who have been able to make this provision for themselves in past years will find themselves in a position in which they cannot do it any more. That is partly due to our system of compensation, in which, if some small shopkeeper whose business is not so much required in a war emergency has to close down, he just loses his money and nobody compensates him, but if the London Transport Board had to reduce their services, we should goon paying money to them. There will be a great many people who will not keep up their policies and whose claims will, therefore, drop into the pool. I want to ask the Attorney-General whether, in working out the financial details of this scheme, allowance was made for the financial effect of these policies over £50 which are now going to be forfeited and on which, 12 months ago, the insurance companies were expecting to pay at some future time? If allowance was not made for that fact, there is a reserve of money going into the insurance companies which can be used for some purpose. If, on the other hand, allowance was made for it, what a monstrous situation arises. The Government say that they deliberately rigged their Bill so that the rather better-off man shall have his policy and all the money he has paid be dropped into the pool for the benefit of the insurance companies or for the other policy holders. I think that is unjust, and I support the Amendment.

9.40 p.m.

Mr. Jagger

I wish to disavow any suspicion that the Attorney-General has been in any way under the influence of the insurance companies. Had he been he would have known more about this business than he does. He tells us there would be an anomaly between the man who had an ordinary business policy for £50 and the man who had an industrial policy for £50 if the £50 policy were not excluded. Apparently he has not the faintest idea that the man who takes out an ordinary business policy pays his premium yearly, half-yearly, or quarterly and gets a higher insurance value for a smaller premium than does the man with the industrial policy. Apparently he has not the remotest idea that under this wording we may be, in some cases, barring out people who are insured for £26, £27, or £28, because an enormous number of industrial policies are on joint lives. A man and his wife may be insured for £40 each and get the protection of this Bill, but a man and his wife jointly insured for £60 would be debarred—just the kind of couple who are in a little business which brings in so low a weekly income that they have to pay their premiums weekly, and who, because they are both concerned in the business, have taken out a joint policy. There are many more of these joint policies which go over £50 than there are single policies which go over £50. I would call the Attorney-General's attention to the puerility of his argument, which in the main is that there are so very few of these policies over £50 that really they do not matter. If they do not matter, then it does not matter about striking out the £50 limitation by accepting our Amendment.

9.43 p.m.

Mr. W. H. Green

I feel that no excuse is needed for the time which has been taken in discussing this Clause and the Amendment. When the Bill was announced it struck a chord of hope in the minds of many of our serving men, who felt that the obligations they had undertaken would not be wasted; but when they begin to find out the truth, which is that the Bill is hedged about with pettifogging restrictions, there will be grave feelings of discontent and disappointment. On innumerable occasions in our constituencies we shall be asked to explain to the serving man why policies over £50 are not protected. This Bill will discriminate between brother and brother, and I ask anyone who has listened to the Debate so far, and to the Attorney-General's speech, to say what answer could be given to any critic who asked why the £50 limit had been placed in the Bill. This Measure has the characteristics of many Bills which have been introduced since this war started. Their object is good, but their limitations are such that the appeal which they might make to the community is entirely destroyed.

It has been suggested that the Attorney-General has not come under the influence of the insurance companies and, of course, we must all accept that, but seeing that he has been in touch with insurance companies, cannot he take us into his confidence and tell us what objections they have to the limit being £50? That would be information which would be exceedingly valuable to us. If the Attorney-General could see his way to remove this limitation, it would have the unbounded approval of Members on every side of the Committee. We want to deal decently with these serving men, and to go half-way and stop there does not seem to be statesmanship, nor is it necessary in the circumstances of the case.

The learned Attorney-General opened his speech by saying that this was really a narrow point. I suggest that it is far from being a narrow point. There are thousands of serving men who will find, when they read the record of this discussion, that their policies, because they are over £50 in value, are not covered by the Bill. If it is a fact—I am not sufficiently versed in insurance matters to know—the insurance companies will lose nothing by extending this limit, I hope that the Attorney-General will make some attempt to convince the companies that there is an absence of reasonableness in the limitation.

9.46 p.m.

Sir Joseph Nall

I do not understand why the arbitrary figure of £50 is adopted. [Interruption.] I gather that in so far as any explanation has been given, some hon. Members who heard it did not understand it. If there is a good reason for it, I should like to ask why a man with a £60 or £100 policy should lose the whole of it, while a man with a £50 policy is assured of it. The man with a higher policy ought to be assured of at least £50. A provision of that kind might have been put in the Bill, if the Government could not go the whole way by removing the limit. I rose in the hope that the Government would tell us a little more about why there is this limit at all. If there is a good reason for the limit, perhaps we may be told why a policy exceeding £50 has not been assured for as much as £50.

9.47 p.m.

Mr. Woodburn

What will happen to the money of the lapsed policies over £50? Will it go to assist the war, or the poverty-stricken insurance companies? It seems that the money will lapse into the coffers of the insurance companies, and, if so, that is a very wrong proceeding. A great deal has been said about the small shopkeeper and the person who lives by saving and scraping for the rainy day; that person will suffer very severely during the present war. A large number of commercial travellers have been thrown on the streets without a possibility of work until industry comes round again, and that sort of person has not taken out a policy for less than £50 but for more, in this war, that type of person has suffered more than in any previous war in our history. The Government will be doing very wrong if they commit an injury to that section of our population. I should be glad to know what happens to the money of the lapsed policies over £50. There is no justification for its going into the coffers of the insurance company.

Sir Nairne Stewart Sandeman

Have these policies any surrender value?

9.49 p.m.

The Attorney-General

When this problem came up in the last war, the only protection which was afforded or suggested—it was suggested by the party to which the hon. Baronet presumably would have belonged if he had been in Parliament at that time—was in respect of policies up to £25 in value. The reason why Parliament imposed a limit during the last war, and why a limit is proposed in the Bill, is that it was felt, as we feel now, that the holder of a small policy is entitled to special protection from this House against the forfeiture of his rights. This Bill is designed to give special statutory protection over and above that which is already given by the practice and custom both of industrial companies—that is, ordinary branch policies—and of collecting societies. There is already considerable statutory protection, and although by the custom of industrial companies and collecting societies consideration is given against forfeiture, it was felt that in the case of the small policy holder it was right that we should go beyond existing statutory protection, existing custom, and beyond any voluntary insurance where he would be treated as favourably as the financial position permitted, and give him the special protection of a statute.

That is the principle of the Bill, and I suggest to the Committee that that is a good principle. If that is a good principle, there must be a limit in the Bill, because that principle should give special statutory protection to small policy holders. The limit of £50 can be doubled if you wish. It must be remembered that any protection which was given in the last war was, of course, an arbitrary figure. You may say that a man of £49 receives protection and that a man of £51 does not; you may say that a man with one policy is protected and a man with another is not, but once the principle which I have explained is accepted, there must, of course, be a limit. We fixed the limit at what we felt to be a reasonably high level to cover—I cannot give percentages—the vast majority of ordinary industrial policies. One hon. Member asked what reason the insurance companies gave. We approached them, and they said they thought our suggestion was reasonable and that there should be extra statutory rights to protect the small policy holder. The man who takes out an ordinary branch policy—and I am not quite so ignorant of the differences as the hon. Gentleman suggested—will not receive statutory protection. Therefore, we think it reasonable, in making concessions of the kind given in the Bill to the small policy holder, that in the case of the large policy holder—say, over £50—he should be left like the ordinary branch policy holder to the statutory protection, to the custom which, as every hon. Gentleman and right hon. Gentleman opposite knows, both by the collecting society and the company is in fact more generous from the point of view of their statutory obligations, and it really would be contrary to the principle of the Bill to make it apply to large industrial policies or policies irrespective of amount when the whole purpose is to give statutory protection to the small policy holder.

Mr. W. H. Green

Will the right hon. and learned Gentleman say what statutory protection the policy of £60 has which the policy holder for £50 has not?

The Attorney-General

The policy holder for £60 is protected after five years if he is not able to continue his premiums.

Mr. Jagger

That is a long while.

The Attorney-General

The hon. Gentleman is not doing himself justice. It does not matter how long the war has been going on; it depends how long the man has been paying his premiums. The practice of the companies and collecting societies is to give a free paid-up policy on that basis in, I think, every case after three years, and in the case of many societies after two years.

Mr. Jagger

Even if it is less than £50?

The Attorney-General

Oh, yes. What I am saying is that the policy for £60 is treated, by custom of the societies, in this way. If the small policy holder had been content with that, there would have been no need for the Bill. It was because we felt it necessary to go beyond that, and give statutory protection, that we have brought in the Bill. That is the principle of the Bill—that there should be special

Division No. 12.] AYES. [9.58 p.m.
Acland-Troyte, Lt.-Col. G. J. Goldie, N. B. Petherick, M.
Adams, S. V. T. (Leeds, W.) Gower, Sir R. V. Pickthorn, K. W. M.
Allen, Lt.-Col. Sir W. J. (Armagh) Gridley, Sir A. B. Ponsonby, Col. C. E.
Baldwin-Webb, Col. J. Hannah, I. C. Power, Sir J. C.
Beamish, Rear-Admiral T. P. H. Harbord, Sir A. Procter, Major H. A.
Blair, Sir R. Haslam, Henry (Horncastle) Pym, L. R.
Boles, Lt.-Col. D. C. Hely-Hutchinson, M. R. Radford, E. A.
Boulton, W. W. Heneage, Lieut.-Colonel A. P. Ramsbotham, Rt. Hon. H.
Briscoe, Capt. R. G. Hepburn, P. G. T. Buchan- Reed, A. C. (Exeter)
Brocklebank, Sir Edmund Horsbrugh, Florence Reed, Sir H. S. (Aylesbury)
Brooke, H. (Lewisham, W.) Hume, Sir G. H. Reid, W. Allan (Derby)
Brown, Brig.-Gen. H. C. (Newbury) Hunter, T. Robertson, D.
Browne, A. C. (Belfast, W.) Hutchinson, G. C. Rowlands, G.
Butcher, H. W. Kerr, Colonel C. I. (Montrose) Ruggles-Brise, Colonel Sir E. A.
Carver, Major W. H. Kerr, Sir John Graham (Sco'sh Univs.) Salt, E. W.
Channon, H. King-Hall, Commander W. S. R. Samuel, M. R. A.
Colville, Rt. Hon. John Lamb, Sir J. Q. Sandeman, Sir N. S.
Conant, Captain R. J. E. Levy, T. Sanderson, Sir F. B.
Cook, Sir T. R. A. M. (Norfolk, N.) Llewellin, Colonel J. J. Schuster, Sir G. E.
Courthope, Col. Rt. Hon. Sir G. L. Lucas, Major Sir J. M. Selley, H. R.
Crooke, Sir J. Smedley Mabane, W. (Huddersfield) Shaw, Major P. S. (Wavertree)
Crookshank, Capt. Rt. Hon. H. F. C. MacAndrew, Colonel Sir C. G. Shepperson, Sir E. W.
Cruddas, Col. B. MacDonald, Rt. Hon. M. (Ross) Smiles, Lieut.-Colonel Sir W. D.
Culverwell, C. T. Magnay, T. Somervell, Rt. Hon. Sir Donald
Duncan, J. A. L. Manningham-Buller, Sir M. Spens, W. P.
Elliston, Capt. G. S. Margesson, Capt. Rt. Hon. H. D. R. Storey, S.
Emery, J. F. Markham, S. F. Strauss, H. G. (Norwich)
Entwistle, Sir C. F. Mayhew, Lt.-Col. J. Strickland, Captain W. F.
Erskine-Hill, A. G. Mitcheson, Sir G. G. Stuart, Rt. Hon. J. (Moray and Nairn)
Etherton, Ralph Morgan, R. H. (Worcester, Stourbridge) Sutcliffe, H.
Everard, Sir William Lindsay Morris, J. P. (Salford, N.) Titchfield, Marquess of
Fildes, Sir H. Munro, P. Touche, G. C.
Fox, Sir G. W. G. Neven-Spence, Major B. H. H. Tufnell, Lieut.-Commander R. L.
Fremantle, Sir F. E. Palmer, G. E. H. Walker-Smith, Sir J.
George, Major G. Lloyd (Pembroke) Peake, O. Ward, Lieut.-Col. Sir A. L. (Hull)

protection for small policy holders. If hon. Members think that that is bad, they will vote for the Amendment. We, looking at it from the point of view of policy holders as a whole, think it a good principle. That is why we propose a limit—a high limit—which will cover the vast majority of cases.

Sir J. Nall

If, as my right hon. and learned Friend says, the man with £49 is ruled out and the man with £51 is ruled in, why cannot the man with £50 be covered?

The Attorney-General

This sets up an elaborate procedure for dealing with that. Where a line is drawn, everyone who is on the wrong side has a sense of hardship. If it is right to draw a line, we think that the line should be drawn here.

Mr. Woodburn

May I ask, first, who gets the money from the lapsed policies, and, secondly, is the Attorney-General prepared to add the words "per person" after "fifty pounds," in order to avoid the anomaly I have mentioned?

Question put, "That the words proposed to be left out stand part of the Clause."

The Committee divided: Ayes, 113; Noes, 80.

Waterhouse, Captain C. Windsor-Clive, Lieut.-Colonel G.
Wayland, Sir W. A. Winterton, Rt. Hon. Earl TELLERS FOR THE AYES.—
White, Sir R. D. (Fareham) Womersley, Sir W. J. Mr. Grimston and Major Sir James Edmonson.
Williams, Sir H. G. (Croydon, S.) Young, A. S. L. (Partick)
Acland, Sir R. T. D. Hall, J. H. (Whitechapel) Nathan, Colonel H. L.
Adams, D. (Consett) Hall, W. G. (Colne Valley) Naylor, T. E.
Adams, D. M. (Poplar, S.) Harris, Sir P. A. Oliver, G. H.
Adamson, Jennie L. (Dartford) Harvey, T. E. (Eng. Univ's.) Owen, Major G.
Alexander, Rt. Hon. A. V. (H'lsbr.) Hills, A. (Pontefract) Pearson, A.
Ammon, C. G. Holdsworth, H. Price, M. P.
Aske, Sir R. W. Isaacs, G. A. Pritt, D. N.
Attlee, Rt. Hon. C. R. Jackson, W. F. Quibell, D. J. K.
Banfield, J. W. Jagger, J. Riley, B.
Barnes, A. J. Jenkins, Sir W. (Neath) Ritson, J.
Beaumont, H. (Batley) Jones, Sir H. Haydn (Merioneth) Robinson, W. A. (St. Helens)
Buchanan, G. Kirkwood, D, Smith, E. (Stoke)
Burke, W. A. Lathan, G. Stewart, W. J. (H'ght'n-le-Sp'ng)
Cluse, W. S. Lawson, J. J. Thurtle, E.
Daggar, G. Leach, W. Tinker, J. J.
Dalton, H. Leslie, J. R. Tomlinson, G.
Davies, R. J. (Westhoughton) Lipson, D. L. Watkins, F. C.
Dobbie, W. Lunn, W. Welsh, J. C.
Dunn, E. (Rother Valley) McEntee, V. La T. Westwood, J.
Ede, J. C. MacMillan, M. (Western Isles) Whiteley, W. (Blaydon)
Edwards, N. (Caerphilly) Mander, G. le M. Wilkinson, Ellen
Fletcher, Lt.-Comdr. R. T. H. Marshall, F. Windsor, W. (Hull, C.)
Graham, D. M. (Hamilton) Milner, Major J. Woodburn, A.
Green, W. H. (Deptford) Montague, F. Woods, G. S. (Finsbury)
Greenwood, Rt. Hon. A. Morrison, G. A. (Scottish Univ's.)
Griffiths. G. A. (Hemsworth) Morrison, R. C. (Tottenham, N.) TELLERS FOR THE NOES.—
Guest, Dr. L. H. (Islington, N.) Mort, D. L. Mr. Charleton and Mr. Adamson.
Hall, G. H. (Aberdare) Nall, Sir J.

10.7 p.m.

Mr. Rhys Davies

I beg to move, in page 1, line 17, to leave out "two years," and to insert "one year."

In moving this Amendment, I want the right hon. and learned Gentleman to tell me whether he has already seen the writing on the wall. If he does not give in on this Amendment, I am not so sure that his Government may not fall tonight, and the sooner it falls the better. I can see the Financial Secretary to the Treasury already looking very glum. Having said so much, I will be very brief in moving this Amendment. The point of it, as hon. Members are aware, is that no policy in this Bill will be protected unless it has been in being for two years. We are proposing that the period shall be one year, and I shall give the reasons why. There are 10,000,000 new policies issued in this country every year and of these about 4,500,000 lapse during the first 12 months. The Attorney-General was asked what became of the lapsed policies. That is where directors and shareholders get their profits. Of course, companies benefit by lapsings; indeed, it is well known that the finances of insurance companies would collapse if this were not so. It is common sense that more people allow their policies to lapse during the first year, than the second, third, fourth or fifth year, because the longer the person pays his premiums on the policy, the more he clings to it. Take the case of a man in an ordinary occupation before the war. He pays 6d. per week for about nine months and is then called up, with the result that his financial arrangements and family affairs are turned upside down. I think the claim on his behalf is even stronger than it is on behalf of a person who has paid on a policy for two years. Those are the arguments for the Amendment. I say once again to the Attorney-General that he had better beware; he is leading his party tonight, and if he does not accept this Amendment, I am afraid he will be leading the Tory party to sheer destruction.

10.11 p.m.

Sir Frank Sanderson

I oppose the Amendment. I think it is generally known that, in respect of insurance policies of any type, the first year's premiums are absorbed in costs of administration, and, therefore, it is essential that a policy should have at least two years' premiums paid on it before there is any credit from which to pay the insurer. It is also generally known that it is a common practice for a person to take out a policy for one year and to pay the premiums, knowing full well that he will lose everything, but that during the year he will have the cover for which the policy was taken out. Therefore, I feel that I must vote against the Amendment. I assure hon. Members that it would not be in their interests to attempt to press the Amendment, which cannot be seriously defended.

10.12 p.m.

The Attorney-General

Whether, in deciding how to vote on this Amendment, hon. Members ought to have regard to any writing on the wall which the hon. Member for Westhoughton (Mr. Rhys Davies) has seen, or whether they ought to have regard to the actuarial position of other policy-holders, is a matter for each hon. Member to decide for himself. Of course, the reason for having the period of two years is that given by my hon. Friend the Member for Ealing (Sir F. Sanderson), namely, that for the first year the premiums, although the policy provides cover, really go in initial costs and administrative expenditure, and the policy has no surrender value. Therefore, if the provision covered policies in cases where the premiums for two years had not been paid, it would really amount to providing cover at the expense of the other policy-holders. Once the two years' premiums have been paid, the policy begins to have a surrender value. The period of two years was accepted by Parliament during the last war, we believe it to be fair to the other policy-holders, and therefore, in spite of the hon. Member's suggestion that I am leading my party and presumably myself into disas-

Division No. 13.] AYES. [10.16 p.m.
Acland, Sir R. T. D. Erskine-Hill, A. G. Lucas, Major Sir J. M.
Acland-Troyte, Lt.-Col. G. J. Etherton, Ralph Mabane, W. (Huddersfield)
Adams, S. V. T. (Leeds, W.) Everard, Sir William Lindsay MacAndrew, Colonel Sir C. G.
Allen, Lt.-Col. Sir W. J. (Armagh) Fildes, Sir H. MacDonald, Rt. Hon. M. (Ross)
Aske, Sir R. W. Fox, Sir G. W. G. Magnay, T.
Baldwin-Webb, Col. J. Fremantle, Sir F. E. Manningham-Buller, Sir M.
Beamish, Rear-Admiral T. P. H. George, Major G. Lloyd (Pembroke) Margesson, Capt. Rt. Hon. H. D. R.
Blair, Sir R. Goldie, N. B. Markham, S. F.
Boles, Lt.-Col. D. C. Gower, Sir R. V. Mayhew, Lt.-Col. J.
Boulton, W. W. Gridley, Sir A. B. Mitcheson, Sir G. G.
Briscoe, Capt. R. G. Grimston, R. V. Morgan, R. H. (Worcester, Stourbridge)
Brooklebank, Sir Edmund Hannah, I. C. Morris, J. P. (Salford, N.)
Brooke, H. (Lewisham, W.) Harbord, Sir A. Morrison, G. A. (Scottish Univ's.)
Brown, Brig.-Gen. H. C. (Newbury) Harris, Sir P. A. Nall, Sir J.
Browne, A. C. (Belfast, W.) Haslam, Henry (Horncastle) Nevan-Spence, Major B. H. H.
Butcher, H. W. Hely-Hutchinson, M. R. Owen, Major G.
Carver, Major W. H. Heneage, Lieut.-Colonel A. P. Palmer, G. E. H.
Channon, H. Hepburn, P. G. T. Buchan- Peake, O.
Colville, Rt. Hon. John Holdsworth, H. Petherick, M.
Conant, Captain R. J. E. Horsbrugh, Florence Ponsonby, Col. C. E.
Cook, Sir T. R. A. M. (Norfolk, N.) Hume, Sir G. H. Procter, Major H. A.
Courthope, Col. Rt. Hon. Sir G. L. Hunter, T. Pym, L. R.
Crooke, Sir J. Smedley Hutchison, G. C. Radford, E. A.
Crookshank, Capt. Rt. Hon. H. F. C. Jones, Sir H. Haydn (Merioneth) Ramsbotham, Rt. Hon. H.
Cruddas, Col. B. Kerr, Sir John Graham (Sco'sh Univs.) Read, A. C. (Exeter)
Culverwell, C. T. King-Hall, Commander W. S. R. Read, Sir H. S. (Aylesbury)
Duncan, J. A. L. Lamb, Sir J. Q. Reid, W. Allan (Derby)
Edmondson, Major Sir J. Levy, T. Robertson, D.
Elliston, Capt. G. S. Lipson, D. L. Rowlands, G.
Entwistle, Sir C. F. Llewellin, Colonel J. J. Ruggles-Brice. Colonel Sir E. A.

ter, I must ask the Committee to reject the Amendment.

10.14 p.m.

Mr. Jagger

I see no invisible writing on any imaginary wall; nor do I see any more reason, after hearing the Attorney-General's speech, why this Amendment should be opposed than I did in the case of the last Amendment after he had made three interventions. I understand, as the hon. Member for Ealing (Sir F. Sanderson) said, that insurance companies and their staffs swallow the first year's premiums in one way and another. I submit that the insured person and the insurance company enter into an insurance agreement, normally with the intention that it shall be carried out. Our Amendment seeks to make it easier for a policy to be kept in being until it gets, not a surrender value, but the final payment for which the insurance has been made. If the first year's premium has been paid and if the policy-holder is in difficult circumstances as a result of the war, I can see no reason why he should not have the relief which will enable him to maintain his policy in being and why that policy should not be protected just as surely as the policies now provided for in the Bill.

Question put, "That the words proposed to be left out stand part of the Clause."

The Committee divided: Ayes, 116; Noes, 63.

Salt, E. W. Storey, S. Waterhouse, Captain C.
Samuel, M. R. A. Strauss, H. G. (Norwich) Wayland, Sir W. A.
Sandeman, Sir N. S. Strickland, Captain W. F. White, Sir R. D. (Fareham)
Sanderson, Sir F. B. Stuart, Rt. Hon. J. (Moray and Nairn) William, Sir H. G. (Croydon, S.)
Sehuster, Sir G. E. Sutcliffe, H. Winterton, Rt. Hon. Earl
Selley, H. R. Titchfield, Marquess of Womersley, Sir W. J.
Shaw, Major P. S. (Wavertree) Touche, G. C. Young, A. S. L. (Partick)
Shepperson, Sir E. W. Tufnell, Lieut.-Commander R. L.
Somervell, Rt. Hon. Sir Donald Walker-Smith, Sir J. TELLERS FOR THE AYES.—
Spens, W. P. Ward, Lieut.-Col. Sir A. L. (Hull) Lieut.-Colonel Kerr and Mr. Munro.
Adams, D. (Consett) Hall, W. G. (Colne Valley) Price, M. P.
Adams, D. M. (Poplar, S.) Harvey, T. E. (Eng. Univ's.) Pritt, D. N.
Adamson, Jennie L. (Dartford) Hills, A. (Pontefract) Quibell, D. J. K.
Ammon, C. G. Isaacs, G. A. Riley, B.
Attlee, Rt. Hon. C. R. Jackson, W. F. Ritson, J.
Banfield, J. W. Jagger, J. Robinson, W. A. (St. Helens)
Beaumont, H. (Batley) Jenkins, Sir W. (Neath) Smith, E. (Stoke)
Buchanan, G. Kirkwood, D. Stewart, W. J. (H'ght'n-le-Sp'ng)
Burks, W. A. Lathan, G. Thurtle, E.
Cluse, W. S. Lawson, J. J. Tinker, J. J.
Daggar, G. Leach, W. Tomlinson, G.
Dalton, H. Leslie, J. R. Watkins, F. C.
Davies, R. J. (Westhoughton) Lunn, W. Welsh, J. C.
Dobbie, W. McEntee, V. La T. Westwood, J.
Dunn, E. (Rother Valley) MacMillan, M. (Western Isles) Whiteley, W. (Blaydon)
Ede, J. C. Marshall, F. Wilkinson, Ellen
Edwards, N. (Caerphilly) Milner, Major J. Windsor, W. (Hull, C.)
Graham, D. M. (Hamilton) Mort, D. L. Woodburn, A.
Green, W. H. (Deptford) Nathan, Colonel H. L. Woods, G. S. (Finsbury)
Greenwood, Rt. Hon. A. Naylor, T. E.
Hall, G. H. (Aberdare) Oliver, G. H. TELLERS FOR THE NOES.—
Hall, J. H. (Whitechapel) Pearson, A. Mr. Charleton and Mr. Adamson.

10.25 p.m.

Sir R. Acland

I beg to move, in page 1, line 17, to leave out from "before," to the end of the Clause, and to add: the date on which a notice under Section twenty-three of the Industrial Assurance Act, 1923, is served on the policy holder. This Amendment is so reasonable that I am sure that something will actually be done about it, although not quite in the form in which I have drafted it. It means therefore that I can deal with the matter very briefly. Under the Bill as it now stands a man who takes out a policy in August, 1937, and pays two years and then war comes and puts him in a position where he cannot pay in 1939, is protected, but if a man takes out a policy in August, 1938, and then pays for two years and war starts but does not put him into a position in which he cannot pay until 1940, then he is unprotected. That seems to be a rather anomalous situation. Unless one was going to argue that in August, 1937, the skies were still blue and he might take out an insurance policy legitimately, hoping to live to a ripe old age; whereas in August, 1938, it might be argued that it was obvious and everyone except the readers of the "Times" and other wishful thinkers expected that war might start, and anyone taking out a policy then must be doing it with his eyes wide open—unless this argument was going to be used, I can see no reason for resisting my Amendment.

Since putting down this Amendment, I notice that it would have an incidental consequence if this war were to be prolonged beyond two years. As the war goes on and as the date on which notice is served gets gradually later, so the starting line, so to speak, which commences on September, 1937, will gradually rise and will eventually reach September, 1939. The Attorney-General has indicated to me that he can see a way of redrafting the Amendment so as to avoid the difficulty. If that is so, I shall be happy to withdraw the Amendment.

10.28 p.m.

The Attorney-General

It seems to me, and I hope that it will seem to the Committee also, that there is a good point in this Amendment. In the case of a man who took out a policy six months, a year, or 18 months ago and keeps it up for two years, and then, owing to war circumstances, is unable to continue, it seems, in my view, that he should be entitled to the protection of the Bill. I do not think it would be right, and I think that the hon. Baronet the Member for Barnstaple (Sir R. Acland) agrees, and I hope the Committee also will agree, that that protection should be given after the war started to protect people who have pledged themselves to a contract and then the unforeseen circumstances of war descend, upon them. I do not think that this form would be right or that its place in the Bill is right. I think Clause 2 would be more correct. If the hon. Baronet will be satisfied with my assurances and will withdraw the Amendment, I will look at the question and see whether provision on these lines can be made in another place.

Amendment, by leave, withdrawn.

Clause ordered to stand part of the Bill.