CLAUSE 42.—(Insurance schemes.) (Hansard, 5 February 1941)

§ The Chairman
The hon. and gallant Member for St. Albans (Sir F. Fremantle) has two Amendments down to this Clause. I can give him the choice which he moves, but, of course, he cannot move them both.

§ Sir F. Fremantle
I beg to move, in page 31, line 45, after "business," to insert: which expression in this part of the Act shall include any trade, profession, employment or vocation. It is thought by the medical profession, for whom I speak, that it would be best to use the interpretation of the word "business" which is used in the Income Tax Act. In that sense, therefore, I have put down the expression: shall include any trade, profession, employment or vocation. It is possible that some other Amendment may be preferred, but I am chiefly concerned to include in "profession" medical men. I understand that it has been said in the Memorandum to this Bill that the word "business" does include the professions; but there is nothing in the Bill to say so, and the medical men do not like to trust simply to a statement of that sort. I have been in correspondence on the subject, and all that I have had has been an explanation saying that it is included. However, I think it ought to be definitely stated, and I hope, if my Amendment is not allowed, that the matter will he looked into.

§ The President of the Board of Trade (Mr. Lyttelton)
I am advised that the word "business" covers the professions, and that it would be dangerous from the legal point of view to insert here the words proposed. There is something to be said, I think, for making clear to the ordinary 1038 reader the extent to which the word "business" applies. I do not know whether that can be done, but I will look into it.

§ Sir F. Fremantle
With that undertaking, I beg to ask leave to withdraw the Amendment.

§ The Chairman
The hon. Member for Stone (Sir J. Lamb) has an Amendment on the Order Paper which, so far as I can see, has very little importance.

§ Sir J. Lamb
On a point of Order. Perhaps I may be allowed to explain. On the Second Reading I was informed that if the amount which was received as insurance was all absorbed by the first casualty, then it would be necessary for a person to insure for a second period. The Commission, I understand, has the right of fixing a lower rate for the second period; I want to know whether it would be for the remaining six months, because the first insurance covers two years.

§ The Chairman
I am inclined to think that the hon. Member is under a misunderstanding, as shown by his talking about "insurance."

§ Sir J. Lamb
I beg to move, in page 32, line 13, after "nature," to insert "or period."

The Parliamentary Secretary to the Board of Trade (Major Lloyd George)
I cannot quite see what this has to do with the period for which the policy is issued. It is intended to make the normal period of policies under the business scheme three months, and any increase in the value of plant, etc., during the period of the policy can be covered by a supplementary policy, so I think that the hon. Gentleman's object is covered by the Clause as it stands.

§ Mr. Silkin
I beg to move, in page 32, line 20, at the end, to insert: but not in any case to exceed five shillings per centum. There is no premium mentioned in the Bill at all, but in the Memorandum it is stated that the premium will be 30s. per cent. That is a prohibitive premium for business concerns, and certainly for household furniture. The business man will not be able to help himself. If this 1039 goes through, he will have to pay, but I wonder how many contributors the Board of Trade expect to get under the private scheme at a premium of £1 10s per cent. I suppose they will get those who have already been bombed, but I wonder how many more at that sort of premium, except the worst possible risks. I have no doubt that the premium of 30s. was fixed with that in mind, realising that only the worst risks would come in. I do not suppose for a moment that my Amendment will be accepted. No one would be more pleased than I to find that the right hon. Gentleman was prepared to bind himself to a maximum premium of 5s. per cent. The principle of voluntary insurance of private chattels forces a high premium upon those who are insured, but, whether the principle of compulsory insurance is accepted or not, everyone, including the right hon. Gentleman, will admit that he cannot possibly maintain a premium of 30s., and there will have to be a substantial reduction if you are going to meet the difficulties of the ordinary man and woman in vulnerable areas whose homes are liable to be destroyed, who are a little better off than those entitled to get compensation automatically but who cannot afford to pay a premium of this sort. I hope that my Amendment will have the effect of securing some statement from the right hon. Gentleman as to his intentions, not necessarily under a compulsory insurance scheme, because that is a matter which ought to be discussed in a fuller Committee on another day, but as to the amount of premium he proposes to charge. I hope that he will be able to tell us that it will not be 30s. per cent. whether the scheme is compulsory or voluntary.

The Deputy-Chairman
It is not proposed to call the similar Amendment lower down in the names of several hon. Members. It can be discussed at the same time as this Amendment.

§ Mr. Woodburn
I would like to support the remarks of my hon. Friend. The Amendment is not put down in any expectation that 5s. will be a practical proposition. It is put down to challenge the proposition of 30s. per cent. In the case of small houses many people would be surprised to know that their furniture had mounted in value to £100. Even in 1040 the poorest houses it could not be replaced for much less, yet the owner in such a case will be called upon to pay 30s. if he wishes to insure under this scheme. If the value of the furniture is £200, which is not extravagant, it means £3, and that is a big contribution to ask from a person in a poor position. Going up the scale, it becomes a burden, which I am sure is not the intention of the Government.
The practical point is that if it is decided that the scheme shall be compulsory, the premium of 30s will not be necessary, for a larger number of contributions will be brought in and there will be no justification for having it on the higher basis than the other part of the scheme. There is no reason why property should get insurance for 2s. and a high premium is charged for the chattels. The amount of the premium will probably be a guess, but there is no reason why the guess should be in favour of the property owners as against the people who have furniture to insure. If the Bill remains as it is and it is not to be compulsory, the difficulty will be to make the premium such as to induce the smaller contributors to come in. If the amount is made prohibitive, the bad lives will insure themselves, and many of the good lives, such as people in the country areas who do not expect to be bombed and people in residential parts of the country which are supposed to be safety areas, will take the chance and stay out of insurance. From the point of view of inducing the maximum number of people to come in, the contribution will have to be reduced, and I hope the Government will reduce the 30s. to an amount more appropriate to the circumstances.

§ Mr. Butcher (Holland-with-Boston)
I hope the Government will seriously consider whether a lower figure than 30s. is not possible, because as the hon. Member for East Stirling (Mr. Woodburn) has said, it will place a heavy burden on a householder in respect of furniture, and also place a heavy burden on businesses in respect of their plant and machinery. I have had representations made to me by the industry with which I am connected that it lays a heavy burden upon them and they have asked me to ventilate the point here. Nobody denies that the premiums must be adequate to cover the 1041 risk, but we should be grateful if the Government would indicate to us in what way their estimate of the risk has been arrived at. If it was a very clever guess we think that perhaps they have taken too severe a picture of the future. I hope there may be some elucidation of that point.

§ Mr. Lyttelton
The question of the 30s. premium for chattels raises the whole question whether the scheme is to be compulsory or not, and I should not like to go too deeply into that aspect of the matter, because if it is a voluntary scheme, most of the objections which the hon. Member for East Stirling (Mr. Woodburn) put forward will not then arise; and incidentally I should point out that the poorer householders will come under the free compensation scheme. To attempt to answer that particular point about chattels would raise the whole question of whether the scheme is to be compulsory, and I can only turn my attention to the 30s. premium as it applies to businesses. That figure is based upon the very serious nature of the risk, and is not a guess, but is based upon experiences in the last three months as projected into the future. On that experience we think it may lead to a very heavy burden on the Exchequer. I do not think it would be possible to consider any lower premium. Though it may be regarded as a burden on businesses, I think it is one which will have to be borne

§ Mr. Benson
The President of the Board of Trade has entirely failed to answer the very valid point raised by my hon. Friend the Member for East Stirling (Mr. Woodburn) that for a voluntary scheme 30s. is an unsound figure. A lower premium would be a better proposition financially from the Government point of view. When it was suggested that a compulsory scheme would bring in more chattels, the President of the Board of Trade shook his head. Does he really think that with the present premium he will obtain wide insurance in comparatively safe areas? People in London, Birmingham and Coventry will insure, but people in Scotland, in the Lake District and elsewhere will not insure. I am not at all certain that 5s. per cent. would not be a sounder proposition than 30s. If we retain the 30s., the Government will make a heavy loss. They might make a heavy loss if it were reduced to 5s., but by reducing the figure they would bring in good risks, 1042 whereas the 30s. premium secures only the worst risks, and that point the President of the Board of Trade entirely failed to deal with.

§ Mr. Silkin
I beg to move, in page 32, line 45, at the end, to add: (7) The exercise and performance of the powers and duties of a local authority shall, for the purposes of this Part of this Act, be treated as the business of that authority. The purpose of the Amendment is to secure that local authorities come within the terms of the Measure. They are anxious that they shall be regarded as businesses so as to come within the scheme of compulsory insurance. For the purpose of their undertakings and the performance of their duties many of them will be insurable under Part I of the Bill. Many of their powers are in the nature of business undertakings. I hope that in so far as they are not already covered in Part I of the Bill, the activities of local authorities can be covered by this Part.

§ Mr. Lyttelton
I am advised that, from the legal point of view, the Amendment is unnecessary, and that the point of the Amendment is covered by the Clause as drafted, but the question whether it would be advisable to insert a declaratory Clause to make the position clear is being considered.

§ Mr. Silkin
I understand that the Attorney-General is to look into the matter and will consider whether the words I propose are necessary. That being so I beg to ask leave to withdraw the Amendment.

§ Mr. Mathers (Linlithgow)
I think this is the proper time for me to raise a matter on behalf of those who lost their property and personal belongings upon their evacuation from the Channel Islands, when those Islands were abandoned. I am a member of the Railway Clerks' Association, and I have information that about 50 of the members of that organisation who were evacuated from the Channel Islands are seriously concerned about the absence of any provision for registering claims for compensation in respect of the properties and possessions which they were forced to leave behind. I wish to 1043 know whether the schemes we are considering will allow of provision being made for the losses that they have encountered?
The position in which they were put should excite the sympathy of this Committee. The Channel Islands were abandoned because of the exigencies of war, and the loss which the inhabitants have suffered is as definitely loss by enemy action as is any loss that can come by bombing or in other ways. I hope that the passage of the Bill will provide an opportunity for doing even-handed justive to people who have been so badly affected. I ask the President of the Board of Trade whether he can give us now, or at a later stage, some indication of the position that they occupy in respect of compensation.

§ Sir A. Maitland
I understood the Minister to answer the hon. Member for Peckham (Mr. Silkin) by suggesting that local authorities would be understood to come within the provisions of this Clause, and I would like to mention one aspect of that matter. If they are to be regarded as a business community, is it to be for all purposes of their undertakings? For example, they have their tramways, art galleries and town halls. I would be obliged if the right hon. Gentleman would assure us that he will consider whether it is not reasonable that the local authorities should have some discretion in the matter, in view of the special responsibilities of the local authorities. I think they should have a right of discretion as to what part of their undertakings will be a contributor to this scheme.

§ Earl Winterton
I would like to say a word in support of my hon. Friend. I do not know whether this part of the Bill is applicable to the Channel Islands, but I am informed by my hon. Friend behind me who has legal knowledge that the Channel Islands have their own Legislature. I hope that the President will consider the point put by my hon. Friend. I have had brought to me cases of the most poignant anxiety concerning the loss of the whole of the goods of these people. If my right hon. Friend is not able to deal with that point now, perhaps he will be able to give it favourable consideration between now and the Report stage, because an important question of principle is involved.

§ Mr. Silkin
May I put forward a case in connection with local authorities? I do not know whether the right hon. Gentleman's reply applies only to businesses run by local authorities. I want to put this particular position to him. Let us take a large authority like the London County Council. They have large stores of goods of all sorts in their various hospitals, institutions, schools and so on. In the case of the London County Council, the total value of their stock at any one moment might be as large as £15,000,000. Strictly speaking, in respect of many of their services it is doubtful whether they are carrying on a business. They are not carrying on a business in connection with their public assistance institutions or hospitals. Therefore it may well be that on a strict reading of this Clause they would be excluded, although my right hon. Friend has assured me on my Amendment that they are covered. I want it to be abundantly clear that they are covered somewhere, somehow, in respect of these enormous stocks which they are compelled to carry for the purpose of their undertaking. They are not in a position to insure in respect of furniture, because although they have a good deal of furniture there is at present a maximum of £1,500. But apart altogether from that, a vast proportion of their stocks are not in the form of furniture at all and could not be covered anyway under the private chattels scheme. I should accordingly he glad if it could be made clear that a local authority such as the London County Council in possession of stocks of furniture of all sorts for the purposes of its undertakings will come within this part of the Bill.

§ Mr. Pickthorn
I should like to refer to what was said by my hon. Friend the Member for Faversham (Sir A. Maitland) when he spoke about the distinction between the stocks held by a local authority for use in connection with those of its functions which form a kind of business and what it holds for its other functions, such as art galleries and so on. Possibly this is the appropriate moment—and I apologise if it is not—for me to inquire about the insurance of chattels belonging to charities under Clause 29, because presumably what are regarded as charities under one Part of the Bill may be regarded as businesses under another Part. It is quite clear that if they are 1045 not able to be assured in some way of some sort of reimbursement, they will run the risk of being put entirely out of business. It is equally clear, if they must contemplate paying the full premium on everything they have, that that also will put them out of business. I should like to ask whether, as in the not incomparable case of municipalities, it will not be possible to give us this right, so that we may insure those of our goods which are replaceable and without which our functions could not be recommenced, and not have to pay premiums on those parts of our chattels which in any case are not replaceable and which we should not for a moment think ought to be replaced?

§ Sir J. Lamb
I would like to point out that the authority for which I am acting, the County Councils' Association, claim that they shall be full beneficiaries and will take full responsibility. I entirely agree with the argument put forward by my hon. Friend opposite.

§ Mr. Lyttelton
As I have said, I am advised that it is unnecessary to include any words to this effect, though it is being considered whether that should be done on the Report stage. There are really two points. In the ordinary sense of the word, local authorities carrying on business would be regarded as business concerns. It is a very different question in regard to their picture galleries, and what would apply to them in this case should apply to universities as well. Although they might be regarded as carrying on business, it might be intolerable if they had to pay a premium of the full amount on a valuable collection of pictures. Under Clause 45 the Board has power to exempt from compulsory insurance, and it is that Clause which we propose to invoke when deciding to what extent these particular things fall under the scheme. I can promise that in regard to works of art we shall deal with them in consultation with the local authorities, universities and so on which are concerned.
With regard to the Channel Islands, the Bill does not apply, and I think that hon. Members will agree that, as in this Bill payment of a premium is involved, the whole matter of compensation—which, I am sure, will have everybody's sympathy—should really come under an entirely different Measure. I can see great difficulties in attempting to impose the pay- 1046 ment of a premium on people who have carried on business in the Channel Islands. I do not think their case really falls within the framework of this Bill.

§ Mr. Douglas (Battersea, North)
The answer given by the President of the Board of Trade on the position of local authorities is highly unsatisfactory. The Amendment which my hon. Friend moved just now was in order to make it clear that all the activities of a local authority would, for the whole of this Bill, be treated as a business. It was understood when my hon. Friend withdrew his Amendment that that was the interpretation placed upon the Measure, and that, therefore, his Amendment was unnecessary. Now, the President of the Board of Trade has drawn a distinction between different activities of a local authority. I understand that he suggests that such things as the supply of electricity are businesses; but about that we have never had any real doubt, because they are assessed as businesses, and everybody regards them as such. But there are a hundred other things which local authorities do which are not regarded as businesses. Does the President consider, for instance, that the relief of the poor is covered by the provision in this Bill in respect of businesses? Are an art gallery, a museum, a library, or a cemetery businesses? I beg the President of the Board of Trade to take this matter seriously. It affects hundreds of local authorities, and involves chattels running into millions of pounds in value, all of which are at stake. The local authorities are not being treated fairly.

§ Sir Herbert Williams (Croydon, South)
I am rather glad that the Amendment to which the hon. Gentleman has referred was not carried. Under Clause 29, public utilities, broadly speaking, are left out of this Bill. They are to have their own Bill introduced later, as they have no Schedule A valuation. They are assessed for Income Tax and rates on the basis of their profits. If we were to bring under this Bill the powers and duties of local authorities—

§ Mr. Douglas
We are dealing with hereditaments, not chattels.

§ Sir H. Williams
I agree; but you must be careful what you mean by chattels. The London County Council, broadly speaking, is not a public utility, except 1047 that it owns a lot of sewers, which are maintained by means of rates, and are not hired out. Local authorities which are public utilities are in a different position. Any local authority which runs an electricity undertaking owns a great deal of plant. Do you want to bring such authorities under these schemes? Is it desirable that they should be? They are to be dealt with in a separate Bill. Are you going to split up the Fulham Borough electricity undertaking; and put some of it, possibly, under Part I of this Bill, some more of it under Part II of this Bill, and the rest of it under the new Bill which is to be brought in? You will, in that way, have confusion worse confounded. My own view is that public utility undertakings ought to be outside this Bill, except to a limited extent, pending the new Measure. There is power under Clause 30 to make certain grants on account. Otherwise, we shall get into a most difficult situation. The public utility under the local authority may be charged a small amount under Schedule A, and a lot more, because it is rated, not on an annual valuation based on the occupation of property, but on a valuation based upon its profits. Finally, you are going to have the showroom and contents under a separate scheme. I ask hon. Gentlemen who sit on the London County Council, which, comparatively speaking, runs no public utilities, where they would get if they pursued their point sufficiently far. The art galleries have their importance, but in relation to the great issue, they are small. Municipalities in this country probably own £1,000,000,000 worth of utilities, and the art galleries, and the rest are very small in regard to the major issues, and therefore I hope that my hon. Friends will be careful.

§ Mr. Mathers
I would like to say to the President of the Board of Trade how greatly disappointed I was with the reply in connection with the point that I put as to Channel Island evacuees. He has said that their position does not come within the four corners of the Bill. One wonders why people in that position have not the opportunity to come in, and why some measure of justice is not done to them. The action that was taken very suddenly was on the initiative of this country, and by the Government of which the right hon. Gentleman is a Member, 1048 and these people, because of that action, are left without any redress at all. That action took away from them the opportunity that they might have had if they had followed the example of this House through their own Legislature to make such provision. They are left high and dry in a very serious position indeed. They are British subjects who have been abandoned, one might almost say, by the British Government. That is a serious statement to make, and it calls for action to be taken on their behalf. I would have liked the right hon. Gentleman to have shown sufficient sympathy with their plight and to have been able to say that he and his Government will take into consideration the position in which these people find themselves, with the idea of finding some means of meeting their plight in the way we are endeavouring to meet it for the citizens of the United Kingdom.

§ Earl Winterton
While I do not go perhaps quite as far in suggesting that the President of the Board of Trade might be definite about this Clause, I think that there is a moral debt placed upon the Committee. I think we would have liked to see something done for these unfortunate people, who are worse off than any other subjects of the Crown within the United Kingdom. As it is technically in order to raise the matter on this Clause, I would make the strongest possible appeal to my right hon. Friend to use all the influence he possesses with his colleagues in the Government to see whether, at an early date, some announcement cannot be made as to how these people are to be dealt with. If not, we shall have to press the matter very strongly at Question Time.

§ Sir P. Hannon
I would like to support my Noble Friend. The position of these Channel Islanders is deplorable. While the President of the Board of Trade cannot go into the position of the Channel Islanders at the moment, I would support the suggestion made by my hon. Friends opposite that some statement should be made by His Majesty's Government in the very near future as to the policy they will adopt in relation to these people, and what can be done to relieve them in the situation in which they find themselves. They are our subjects and have been in an outpost of the Empire for years, and it is a sad reflection that during the whole 1049 of this time since they were seized by the enemy, no real effort should have been made by His Majesty's Government to help them.

§ Earl Winterton
They are all on the rates.

§ Sir P. Hannon
I have lived in the Isle of Sark, which is one of the most delightful of places for a temporary abode, and it is sad to think that these people, whose loyalty and devotion are so strong and everlasting, should now be left to their fate. I quite understand that the Financial Secretary cannot bring them within the scope of this Bill, but surely the Government ought to make some statement to the country about these people, who are in the grip of the most detested enemy ever known to mankind.

§ Mr. Lyttelton
I would not like anything that I have said to be construed as meaning that I lack sympathy for the Channel Islanders. But the point is that we are dealing with an insurance Bill, and it seems inappropriate to bring the Channel Islands within the framework of this Measure. Indeed, they cannot be brought in, but I will make known to my colleagues the views which have been expressed.
As regards the point raised about picture galleries, I think the hon. Gentleman opposite did me an injustice when he said that I was not perfectly clear in my mind in saying that the Clause as now drafted brings all activities of local 1050 authorities in as businesses. Under Clause 45 the Board of Trade have the right to examine, in consultation with these local authorities, any part of their activities in regard to which there are objections to compulsion, and if the burden of compulsory insurance of works of art is too great, machinery exists by which that particular class of activity can be excluded from the operation of the Bill.

§ Mr. Douglas
I am very much obliged for the statement made by the Minister. With all respect the position is clearer now than it was when he made his previous statement.

§ Mr. Silkin
I beg to move, "That the Chairman do report Progress, and ask leave to sit again."
We have made remarkable progress to-day and have now reached a very important Clause which we cannot possibly hope to finish in the few minutes left at our disposal. I think, therefore, that it would be far better to leave it until the next Sitting Day.