§ Mr. Silkin
I beg to move, in page 36, line 32, after "Kingdom," to insert:to which this Part of this Act applies.This Clause gives wide powers to representatives of the Board of Trade to enter premises and ask for the inspection of books and so on. The powers ought to be limited to those premises to which this Part of the Bill applies, and the representatives should not be allowed to enter premises to which it does not apply.
§ Mr. Lyttelton
The Board of Trade will require in certain cases to investigate the correctness of the statements of persons who claim exemption as being under the limit. The hon. Member's Amendment would not permit the Board of Trade to investigate whether a claim for exemption was justified. I can only say that in the administration of this particular Clause we shall ask for an investigation only when the circumstances appear reasonably to justify us. If the Amendment were accepted it would be impossible for us to investigate these border-line cases.
§ Amendment, by leave, withdrawn.
§ Amendment made: In page 36, line 37, after "may," insert "reasonably."—[Mr. Lyttelton.]
§ Clause, as amended, ordered to stand part of the Bill.
§ CLAUSE 47.—(Limitation of indemnity provided under private chattels scheme.)
I ought to explain to the Committee the procedure which is to be adopted with Amendments to this Clause. It is a little unusual but is, I believe, for the convenience of the Committee. The principle of compulsion should be decided first and subsequent Amendments to the Clause can be dis- 1299 cussed more conveniently when the question of compulsion is out of the way. It has therefore been decided to call the Amendment in the name of the hon. Member for Gillingham (Sir R. Gower) and other hon. Members.
Mr. Rostron Duckworth
I beg to move, in page 37, line 34, to leave out from the beginning, to the end of line 13, page 38, and to insert:
The Amendment, the phraseology of which is taken from the Clause relating to compulsory business insurance, makes insurance of personal chattels compulsory up to £1,500 or £2,000. There is a precedent for this kind of compulsory insurance. It is the farmer's insurance of stock and crops, under the business scheme. Any such scheme would probably meet with a vast volume of public approval. It would be equitable and fair, and, being compulsory, would lower the rate of interest. Fire-insurance valuations, where they exist, could be accepted, since they are accepted now in every ordinary scheme, and personal chattels not yet insured would be subject, as now, to the ordinary investigation precautions.
- (a) Subject to the provisions of this section where, after such date as may be prescribed any person resides in the United Kingdom then, if at any time, in respect of private chattels which are insurable in relation to him under the private chattels scheme, there is not in force a policy of insurance issued in accordance with that scheme in respect of his chattels for a sum not less than the value thereof for the time being, as hereafter prescribed, he shall be guilty of an offence under this section;
- (b) Any person guilty of an offence under this section shall be liable on summary convinction to a fine not exceeding one hundred pounds and to a further fine not exceeding fifty pounds for every day on which the contravention continues.
§ Mr. Woodburn
I support the Amendment, which agrees with a somewhat similar Amendment which I have upon the Paper. I suggested upon the Second Reading of the Bill that the Clause violated the whole purpose of the Bill, in covering insurance generally. The discussion which followed the Second Reading proved that it was an agreed Measure, and that there was agreement that this Part, as well as other Parts of the Bill, should be compulsory.
The Bill has two great advantages. The first is that it gives an assurance to people 1300 throughout the country, that at this time of calamity, if calamity should fall upon any person, he will not be asked to bear it alone, and that we are all to stand together. That is the essential principle behind the Bill. It has another great advantage from the national point of view, inasmuch as it definitely reduces purchasing power by transferring to the State money at present in the pocket of the private individual. It transfers that purchasing power to the Government, which will not require to expend that purchasing power until after the war. Therefore, as has been pointed out, it secures to some extent the aims of what became known as Mr. Keynes's plan.
The premium of 30s. means that insurers under this part of the scheme pay approximately four times the premium that has been fixed under the property part. That will be a deterrent. The high premium will make people hesitate about accepting insurance voluntarily. To a large extent, therefore, insurance will be confined to the bad lives, to people who do not feel safe and to people who are not safe. The argument used by the Chancellor and others in favour of the scheme took two forms: first, that it was not in the national interest to insure private individuals for private people's purposes, and, second, that it was not practicable. I wish to support this Amendment on three grounds. First, it is morally unjustifiable to leave the burden of war damage to be borne unfairly by those suffering calamity or those living in apprehension of such damage, while those who feel safe and who may he safe are exempted from any responsibilities under the Bill. In other words, those in the danger areas have not only to be unsafe and suffer danger, but they have also to pay for being unsafe, while the people who are fortunate enough to be in scattered areas are relieved not only of the first two difficulties of actual danger and potential danger, but also of the difficulty of contributing towards alleviating the general danger.
The argument advanced against this Amendment was that it was wrong for the State to be expected to undertake as a national duty the replacement of someone's investment in Chippendale furniture. That appeared to me to be a weak argument. I would like to look at it from the opposite point of view. Anyone who can afford such articles ought to pay a contri 1301 bution to the State, and this Bill fails from the national point of view by not calling upon such persons to pay a contribution. The Committee will want better reasons than they have so far been given before they will be convinced that this part of the scheme should be voluntary. By making this a voluntary scheme, the State would surrender a fair and justifiable levy on people who can afford to pay—those described by the Solicitor-General as having Chippendale furniture. One of the greatest advantages of a tax is that it is going to be paid willingly and will not be avoided, and in this case the Chancellor would have that advantage because it would be willingly paid. My next ground is that the scheme on a voluntary basis would be impracticable. That is the argument which was put against the compulsory scheme. I assert that this scheme would be impracticable on a voluntary basis. If we are to insure people's houses and property, in many cases people's houses will be replaced but not their furniture. If a person is not insured because of laziness or indifference or any other reason, we shall be faced with a large number of people thrown on the streets with no homes, and they will be provided with houses but with no furniture to put into the houses. The State will not find it practicable to refuse to relieve these people, and the position will be that the State will have to replace the furniture without having had a contribution from the people who receive it. As always happens, the burden will fall upon the willing horse.
I would like to know whether this scheme is to depend upon a lot of canvassers going round to people in the towns and the country and asking them to insure. If not, I am satisfied that large numbers of people will never know what the scheme is about. This Bill has been going through the House of Commons for a long time, and I know a lot of people who have not the slightest idea what the Bill is about. I question very much whether, after the scheme is passed, they will be sure whether they can insure or not. But if it should be a question of canvassers travelling around the streets, to come back to the point made by the President of the Board of Trade, the cost of administration will be fantastic. I would respectfully suggest that if this scheme is to be on the same basis as some of the great industrial 1302 schemes, where 60 per cent. of the premiums were absorbed in management and other expenses, it will be a worse tragedy than having no scheme at all. I respectfully suggest that it should be put on a perfectly practical basis and made compulsory, so that everyone would know.
During the Second Reading, the House, generally, as I judged it, took an opposite line to the Government and were in favour of this scheme being made compulsory. But, of course, that brings us up against the Chippendale furniture problem, to take the Solicitor-General's example. Does it mean that we are going to insure a house with all kinds of ornamentations, all kinds of art collections, household museums and things of that nature? I think the Committee generally will say "No," and if it is to be a practicable scheme, it must therefore eliminate that problem and bring it down to some kind of reasonable assurance. At the present moment, is it justifiable and practicable to insure every household in such a way that, in the event of destruction, the householder will have the right and opportunity to have his home reconstructed? I respectfully suggest to the Committee that it is in the national interest to reconstruct the homes of this country, inside as well as outside.
The objection which has been made throughout the discussion of this Bill is that, although the Government realised that this should be made compulsory, they had themselves already thought out every scheme and had not found one which would work. They had therefore had to adopt the scheme contained in the Bill. The challenge has been made that if the Committee criticise what the Government propose, the only acceptable criticism will be one which produces a practicable alternative. I have therefore devoted a little time to trying to think out a practicable alternative, because I realise that it is easy to be destructive in criticism and difficult to produce a constructive alternative. To do this I asked myself how we were to fix the value of the chattels to be insured. I propose in that connection that we should take a principle that the Government have already agreed to. The rest of the Bill is to be based on the rateable value. That gives us a definite figure to start with, but is there a proportion between the rateable value and the essential furniture of 1303 house? I have taken several examples, and have worked out that if you insure for five times the rateable value, you get an approximation to what is the essential furniture for the type of house insured. If you take a house with a £40 rateable value and multiply that by five, you get essential furniture to the extent of £200. I suggest that if a person with a £40-a-year house had his house destroyed, it would at least give him a start with a new home if he had £200 of essential furniture supplied. I took another extreme case—an actual example—of a man with a house assessed at £300. I put it to him: Would five times that amount replace his home so far as essential furniture was concerned? He agreed that from his point of view that would be a very reasonable proposition, and that he would not expect to have replaced the £3,000 or £4,000 worth of furniture which happens to be in his particular home.
There we have a definite sum to which it can he attached. It entails no valuation other than the one already suggested, and gives a practicable basis for a compulsory scheme. The second part of that suggestion is also a principle to which the Government have given their agreement, because in the case of the non-contributory scheme, when people's houses are destroyed they agree only to replace essential furniture. I am quite sure that the people who are poor will accept that as an emergency regulation, and that so also will the people who come in the second part of the scheme. It would be fair to go on the valuation, and to work out a premium in that way. I am suggesting five times the valuation; but the Chancellor may prefer to fix it at four times, or whatever he thinks best. I am accepting the Chancellor's challenge, which he made on previous occasions; and I say, there is a scheme which he can criticise if he finds it unworkable, but I believe that it would work. I have endeavoured to solve the problem by putting forward this scheme, which I believe can be easily understood by everybody, and applied without any great difficulty. On the grounds of wisdom, of expediency, and that we ought all to stand together in this fight, I put my proposal before the Chancellor, in the hope that he will make the scheme compulsory.
§ Mr. Denman
It is with some regret that I find myself unable to support this Amendment, because, in principle, I was strongly in favour of this kind of thing a couple of years ago. But now it is at least two years too late. To set up a system of compulsory insurance of private chattels needs a peace-time atmosphere, with all the normal apparatus of insurance, which functions satisfactorily in peace-time. It would he a gross misuse of man-power and a waste of time and material to indulge in this vast scheme when we are perhaps within a few months of the crisis of our history. If the hon. Member had suggested that the Government, having rejected the principle of compulsory insurance two years ago, should have stuck to their guns and reiterated their decision to await the end of the war, and then to indemnify people for losses sustained, I should have had a great deal more sympathy with him. That would avoid all such problems as that of the valuation of goods, and we could get on with our job of waging the war. The whole idea of universal compulsory insurance is a peace-time idea, and not a war time idea.
There is a further objection in the rate of premium involved. The hon. Member suggested that the rate here proposed was four times that of the rate on property; but surely he is misinformed on that point. On Part 1 it was asserted, and never contradicted, that the amount of the levy was roughly 3 per cent. of the value of the property on which compensation might be paid. On top of that levy, there was to be a State subvention of an equal amount. That was equivalent to a premium of 6 per cent. If the premium of 6 per cent. for the risk period —which, of course, covers a longer period than the annual premium of 30s. per cent. for furniture covers—is reasonable for buildings of all kinds, surely no one will suggest that 30s. per cent. for the contents of domestic buildings is excessive. I have little doubt that, under this voluntary scheme, if the 6 per cent. is a truly reasonable figure, the 30s. per cent. will prove to be too little rather than too much. I hope that experience will show that 6 per cent. is too high, but the Government have more information on that point than any other person can possible possess. I suggest, therefore, that if we do not go back to the Government's 1305 previous scheme of indemnity at the end of the war, we must accept this principle of voluntary insurance which is proposed in the Bill.
There is no other alternative, but there is one extremely important point which has not been mentioned—that these policies are fixed loss policies. If they had been policies with an average clause, I would have been strongly opposed to them, because with an average clause you would require a general scheme of valuation, that is to say, valuation by all those who wish to insure their chattels. That would be turning us from a nation of warriors into a nation of furniture-valuers, which is not what we want. If you have your first loss policies, people take out exactly as much indemnity as they require, to the maximum. That will mean that a great many people in the safer areas, where the premium of 30s. on total value is certainly excessive, will take up a small amount of insurance which will give them a specific amount of indemnity in the case of any damage from bombs. I believe that this scheme, little as I like it, is the most practicable to meet the case before us, and I hope that the Government will strongly resist the Amendment.
§ Sir W. Smithers
I disagree respectfully with the greater part of the speech of the hon. Member for Central Leeds (Mr. Denman). It has been said that this is really a peace-time, and not a war-time Measure. But surely it is because there is a war, and because we are being bombed, that we want everybody, compulsorily, to insure their chattels. The hon. Member talked about the premiums being excessive, but if insurance were made compulsory and universal it could be greatly reduced. In fact, I have been told by experts that if there were a universal premium, it might easily be brought down to 10s. per cent. I had an Amendment on the Paper which was, rightly. not called, but which was in effect practically the same as the Amendment now being considered, and the hon. Member for Clackmannan and Eastern (Mr. Woodburn) really made my speech for me. I support all that he has said. I would add, however, that the Prime Minister when he foreshadowed this Bill in a general speech used words to the effect that we were all in this war and that we all stood together, and I think it is unfair that 1306 a family living on the moors in Yorkshire or on Exmoor, or in Somerset, or in one of the safer areas should not be compelled to insure while those who live in the heavily bombed areas are compelled to insure. The official answer will probably be that compulsory insurance under the chattel scheme is not workable. [An HON. MEMBER: "Hear, hear!"] There is only one "Hear, hear!" If the Treasury and the Board of Trade between them cannot devise some scheme to make this workable compulsorily, then words fail me.
§ Mr. Denman
Has my hon. Friend calculated the number of man-hours that will be occupied in producing policies if his precious universal scheme is accepted?
§ Sir W. Smithers
The hon. Gentleman has had his say and perhaps he will allow me to have mine. When you have millions of people insured under various schemes like the National Health, and unemployment schemes and so forth, and insured with trade unions, for small amounts, it does seem to me that it should not he beyond the wit of man to devise some plan whereby people would be compelled to put a stamp on a card once a month or once a quarter and thus contribute compulsorily to an insurance scheme which would cover their chattels. To give a broad outline of what I mean, the people of the country might be divided, roughly, into three or four groups. People receiving old age pensions, for instance, should get their insurance policy for nothing, and people coming within the National Health Insurance class should pay, say, 4s. or 5s. I am not in a position to say what the premium ought to be exactly; that could be worked out by the Treasury experts who have the details and figures before them. Then there is the class of people who pay Income Tax. They should be asked to pay, say, 7s. 6d.or 10s. I believe that a scheme could be worked out on these lines, through the Post Office, by means of stamped cards in the same way that other insurance schemes are now working, and I hope the Committee will not be afraid to press the Government, to the limit, to make this chattel scheme compulsory.
§ Sir Frank Sanderson (Ealing)
I support this Amendment. I have an Amendment on the Paper which incorporates the proposal now before the Committee. On the Second Reading of the Bill I made reference to this particular Clause and what I said then comprises all the points I desire to make. If I may, I would like to read one paragraph from the speech which I made then. The Attorney-General made some remarks on the difficulty of valuing Chippendale chairs and other valuable articles; I stated then that I did not think that had any bearing whatever on the Clause in question and the paragraph I would quote is this:I find it difficult to advance any argument why the insurance of industrial moveable property is to be made compulsory, while insurance of personal chattels is to be voluntary. The latter should also be compulsory. Otherwise, people living in remote places remain outside the scheme, whereas the whole people of the country should equally contribute to a national effort. It also means that prudent householders in vulnerable areas who feel obliged to cover themselves will have to pay a larger premium than would be the case if the risk were spread over the whole country The premiums on household effects will be a very heavy burden to many people of moderate means and this will be increasingly so unless the risk is spread throughout the country thus reducing the amount of the premium."—[OFFICIAL REPORT, 17th December, 1940; col. 1105, Vol. 367.]That is the case I made in the Second Reading Debate. I think this is a proposal which commends itself to the great majority of hon. Members, and I am convinced that it has the support of the country as a whole. The Bill is presumed to treat all the people of the country on an equitable basis, but surely, there can be no reasonable argument why the insurance of buildings should be regarded as a national risk and the insurance of goods and chattels be regarded as something which does not affect the country as a whole. If the insurance of goods and chattels were made compulsory, it would very considerably reduce the premium. One of my hon. Friends said that in that case the premium would be probably only 10s. per cent.; I am advised that, if the scheme were made compulsory, the premium would be less than 10s. per cent. I think the Government might inform us what they understand the premium would be if the scheme were made compulsory.
On grounds of equality for all classes in the country, the benefit of full com- 1308 pensation ought to be granted to all alike. If the premium were regarded as too heavy a charge for some individuals, the usual industrial insurance practice of "Conditions of Average" could be applied. As far as I can see, there would be no difficulty in doing this. The householder determines for what amount he desires to insure his goods; he has to prove the values for which he has insured his goods, and if he is able to do that, he receives full compensation. The onus of proving value of goods insured, rests upon the insurer, and a full and specific schedule has to be given. This schedule of the Bill as it now stands only provides for the small man, and I maintain the selection of risk is against the interests of the Government. Whether a man has a property worth £5,000 or £10,000, he ought to be able to insure those goods and chattels in just the same way as a man who has goods worth £500 or £1,000. The selection of risk is against the interests of the Government—an error of under writing to be avoided—and does not give equal protection to all or the option of such protection. I hope the Government will give this matter serious consideration. If they are not able to meet us to-day, I hope that between now and the Report stage they will take good counsel; I hope they will take counsel with the insurance companies who, I am sure, would be able to give them sound advice, particularly on the point I have made, namely, the low premiums for which it would be possible to insure goods and chattels if the scheme were compulsory and not voluntary.
§ Mr. Garro Jones (Aberdeen, North)
I propose to make only a few general observations. First, I hope the Government will not entirely close their minds to the views which have been expressed, particularly by my hon. Friend. We ought to keep in our minds constantly the fact that this has never been claimed to be more than an improvised Measure, and that we cannot expect perfection in the Bill at this stage. On the other hand, we do not expect the Government to reject suggestions made for its improvement. We all know that this Bill is to run for only a short period, and that the Government are already engaged in preparing a supplementary Measure. This Bill comes to an end in August next, and, although the premiums will continue to be collected, the 1309 damage incurred after that date, as I understand it, is not covered; therefore the Government must be preparing some new proposal. Nobody can support this Amendment on the principle that we are to stand together. That would be a fallacy, because if we are all to stand together and repair all damage done, there would be no need for an insurance scheme at all—it would merely be a case of the Government recompensing all parties for whatever damage they suffered, on proof of that damage. This scheme does, however, require some further consideration. I ask the Chancellor of the Exchequer to read what is stated in the Explanatory Memorandum. It states:—As insurance under this scheme is voluntary, it is impossible to estimate what premiums will be received or what payments are likely to be made in respect of claims, or what administrative expenses will be incurred.What sort of insurance scheme is that? There is no provision made for the Government to replenish the fund. It may be that, when people have paid their premiums, they will not receive compensation for the damage done. I hope the Chancellor will explain to what extent compensation will be paid. I admit there is a certain limit, but a man will not receive compensation to the full amount and he will not know what proportion will be compensated for the premium he has paid. We are pretty sure about one thing, and that is that we shall get all the bad risks under this scheme. Not only shall we have the bad risks, but all the risks which have already passed from the stage of risk to a stage of actual damage, because all damage which has already been suffered can be retrospectively insured under these proposals.
How are we to deal with this complicated situation? Far be it from me to put forward a comprehensive scheme. I have endeavoured all along to impress on the Government in my few remarks on the Second Reading and on Amendments in Committee that the first thing to do is to provide for the rehabilitation of reasonable necessities. The main argument used against this Amendment has been that if it were made compulsory the cost of administration would be too high. To avoid that, why not take some half-way house between the payment of £10, £20, or £30, all ready-made to replenish furniture on the one side and the insurance 1310 scheme in respect of the £1,000 to £1,500 on the other. Is it impossible to say, for example, that without any insurance at all, upon proof of damage done, damage up to £100 or £200 will be covered by the Government? I appeal to the Chancellor to do something to ensure that people who lose furniture and goods up to that amount will be covered without any insurance premium at all. I consider that one of the most powerful arguments that has been put forward and I hope it will be taken into consideration by the Government.
§ Sir H. Williams
I hope the Government will not oppose the Amendment in terms which mean that they do not intend, ultimately, to incorporate a compulsory scheme in the Bill. I know they will say that it is administratively difficult, but that is not an argument. If I were advised by officials that something was difficult and that I ought not to do it, my inclination would be to say, "If you cannot find a solution, I will get new advisers." I am certain that a compulsory scheme can be administered. They say it is difficult to enforce. The British are a law-abiding people. If you pass a law saying, "You have to do so and so," 95 per cent. of the people will do it without any enforcement at all. Why, because it is difficult with the other 5 per cent., should you abandon something that is good?
The premium of 30s. is oppressive and unnecessary. I have a document here, which I will hand over to the President of the Board of Trade, given me by the managing director of a company which has about £2,500,000 worth of furniture out on hire-purchase. In six months, I think, probably—being an optimist—the worst six months that we are likely to have, the claims reported to them came to £17,000. If you assume that you are going to cover all your damage under one year's premiums, 30s. is justified. This is probably as good an illustration as you can get anywhere of damage to private furniture. No one who thinks he is reasonably safe would pay a shilling on those terms. It is an oppressive premium. But if this is to be insurance on the assumption that you continue the premiums until the liabilities have been discharged, they will go on the five-year basis.
1311 It is a most ungenerous scheme because the Chancellor and his advisers will not face the issue. Why not say to the nation, "You are going to have a system of insurance; everyone will be compensated generously and premiums will continue until the obligation has been discharged"? This is a half-baked, rotten kind of Bill. [Interruption.] Everybody I know wants to be compensated. You cannot compensate them unless you have the money. You cannot get the money unless you carry on the premiums for a sufficiently long period. I suppose that my constituents have suffered nearly as much harm as anybody else. I will not put it higher because other people think that they are at the top of the League table in that respect. But it is pretty bad and Croydon was the first place to be badly damaged. People want adequate compensation. They cannot get it unless there are sufficient funds, and you will not get sufficient funds in a voluntary scheme with the premium so high. No one who thinks his risks are moderate will join the scheme.
The Government say that they cannot make it compulsory and that the insurance companies are so busy. Start off, if you like, with the fire policies and take them as the basis, so that everybody who has a fire policy has to be compulsorily insured. There is no administrative difficulty about that. Unless the Chancellor and the President of the Board of Trade face this issue they will have trouble over the further proceedings on the Bill. I say that deliberately. I am voicing the opinion of many thousands of people when I say that the Bill is unsatisfactory in this respect. We have done all we can to help the Chancellor and the President, but we will not help them further unless they are prepared to meet us in regard to something which we look upon as essential.
§ Mr. Lyttelton
An hon. Member, in criticising the Government for their arguments about the limit of £1,000, said that I dealt with the question in a cavalier way. Taking that into account, I propose to deal with this question in a very pedestrian way and I hope that I shall not incur criticism by going fully into the matter. The compulsory insurance of chattels is not a very difficult one to concede in principle. It is obvious that it is 1312 repugnant to the ideas of insurance that the insurer should have to underwrite only the worst of the risks which are available. Again, it is wrong that the people in the remote districts should escape without paying premiums while those in the more dangerous districts should have to pay presumably higher premiums. These principles are not difficult to concede. It is when we come to apply them that the difficulties begin. I desire to review the various suggestions which appeared to my right hon. Friend and myself to be plausible for a compulsory insurance system. I think there are five main alternatives. You can insure upon an ordinary insurance scheme, or upon one based on Schedule A.
§ Mr. Lyttelton
I said, "based on Schedule A." Or it could be based on the rateable value, which I understand is a suggestion of one hon. Member. It could be based on fire insurance, or based on a poll premium; under the poll arrangement every single individual would have to insure for a notional capital sum. All these proposals have been seriously examined by my right hon. Friend and myself. First, as regards an ordinary insurance policy scheme. There are in the United Kingdom 13,000,000 houses and about 20,000,000 householders, as far as we can judge, the difference between the 13,000,000 and the 20,000,000 representing those who live in flats and tenement buildings or who are tenants or sub-tenants in ~hose buildings.
§ Sir H. Williams
Surely the statistics about there being 20,000,000 householders are pure unadulterated nonsense. We have the information of the register of electors, and there are nothing like 20.000,000—not more than about 14,000,000.
§ Mr. Lyttelton
I cannot accept my hon. Friend's figures. I am advised that the figure lies between 13,000,000 and 20,000,000 and is very much nearer the top limit than he thinks.
§ Sir H. Williams rose—1313
§ Mr. Lyttelton
I am referring to those who have chattels. There are 13,000,000 houses and 20,000,000 people who might be described as having chattels which might fall within the scheme. Nobody suggests that it would be necessary for the Government to write 20,000,000 policies, or even 13,000,000 policies, because there is one thing on which not enough emphasis has been laid, and that is the compensation which the Government are providing for people with dependants with n income under £400 and single persons whose income is under £250. My Department computes that the number of policies which would have to be written under an ordinary compulsory insurance scheme would be from 2,000,000 to 3,000,000. I think it is really a practical impossibility to put upon the already strained staffs the job of writing 2,000,000 to 3,000,000 policies. It is physically impossible. It is on that ground that an ordinary insurance system seems to us to be ruled out. When we are dealing with chattels the question of valuation is extremely difficult. One brick is very much like another brick, but one sofa is not very much like another. Therefore, we rejected that suggestion chiefly on the ground of its being impracticable.
We next examined whether the compulsory scheme could be applied, as was suggested during the Second Reading Debate, on the basis of the Schedule A valuation, that is to say, by fixing a premium which represented some percentage of the Schedule A value. Now Schedule A is in itself only a rough computation of the value of a house. It comprises a certain proportion representing site value. If to that already rough index we were to add another arbitrary index which said that the value of the chattels in a house bore some relation to the Schedule A value of the house itself, we should be piling one rough index on another, and glaring injustices would occur. An hon. Member said we ought all to be equal in these matters. Let us see how this system would work. Take two men with fixed incomes of £2,000 a year. One of them is a married man with a large number of children, and, as I have some reason to know, such a man has to live in a fairly large house, and out of his income has only a certain sum to spend on chattels and personal effects. The other man, with the same income, is, let us say, 1314 a single man, who lives in a flat or small house and has a correspondingly larger sum to spend on personal effects and chattels. Do you think it is carrying out the principle which we wish to carry out, to penalise the man with a large family and small personal effects for the advantage of a single man whose effects are of much greater value?
§ Mr. Lyttelton
The next case which I want to examine is that of two brothers whose chattels are of equal value. They have inherited their furniture from their father and have split it between them. One goes to live in the country and the other lives in London. The one in the country insures his chattels for £10 a year, while his brother, who has chattels of equal value, finds it necessary to pay £70 a year to insure them. Apart from starting fratricidal strife between the two brothers, we undermine the principle, which is apparently so dear to everybody here, namely, that those in safer areas should contribute equally with those in danger areas.
§ Mr. Woodburn
Will there be no anomalies in the right hon. Gentleman's own Bill? It is easy to pick out anomalies.
§ Mr. Lyttelton
There will certainly be. There are always anomalies. We cannot avoid that, as we are not omnipotent. After that, let us examine the system suggested by the hon. Member himself, based on the rateable value. That system has all the disadvantages of the Schedule A valuation, plus some of its own, because the rateable value as such is affected by the variations in the rate imposed by some thousands of rating authorities.
§ Mr. Woodburn
I am sorry to interrupt the right hon. Gentleman again, but does he not agree that the rateable value is the one fixed thing which the Government have taken as the basis for the whole of the rest of the Bill? If it is wrong in this case, surely it must be wrong in the remainder of the Bill.
§ Mr. Lyttelton
That is to say that, because one thing is right, if you multiply it by five, the result is also right. I mean that if you start with a rough and ready basis and then make a rough and ready calculation—that is, basing the 1315 valuation of the chattels on the value of the house—the result is chaos. The rateable value is, of all the alternatives, the least practicable. Let us next look at compulsory insurance based on fire insurance. First of all, fire insurance contains many of the anomalies which I have mentioned about Schedule A. The extent to which a house is insured under the fire-insurance policy is varied, high or low—not so much as under Schedule A—by the condition in which the house is found. There are obvious reasons why that is so. To some extent, fire insurance is based upon a replacement value. Of course, the buildings and so on have a fixed estimate. The first objection is that a fire-insurance valuation contains already some of the anomalies of Schedule A, and the next objection is that the fire insurance premium—
§ Mr. Lyttelton
We are discussing a system of compulsory insurance with an arbitrary rate of premium based on fire insurance values. [HON. MEMBERS: "Chattels."] I did not think that anyone would seriously suggest that the Government would accept a compulsory scheme based on owners' valuation of their chattels. The idea surely is that the premium would be levied in an arbitrary way on the value of the building as determined by fire insurance. The Government could not dig into every comprehensive insurance policy and say, "We do not think that this is Chippendale; this is a fake." The only way in which you could administer such a scheme is to have an arbitrary rate of premium.
Not content with examining these four points, perhaps with some of the enthusiasm of inexperience I approached my right hon. Friend and asked whether we could examine a system of poll insurance by which everyone in the country would be obliged to take out an insurance policy for a certain fixed sum. Indeed, I think that suggestion was made to-day. However, it is open to very grave objections. If the minimum sum is to be very small, say, £50, then those who do not wish to insure are able to escape with a nominal contri- 1316 bution to the general pool. If the sum is put higher, say, £200, there is quite a large class of people who would complain that they had not got chattels worth £200 and would object very strongly to paying a contribution to insure chattels which in fact they did not own. In any event, a limit of £200 would bear very hardly on the poorer classes. It is for these reasons that we objected to the idea of poll insurance.
These reasons are in themselves sufficient to kill the idea of compulsory insurance, but they are not by any means all. The Board of Trade computed that between 2,000,000 and 3,000,000 policies would be involved if we followed the ordinary insurance system, and that means that we would be dealing with only 15 per cent. of the total number of owners of chattels in the country. This is where all the arguments of the hon. Member for South Croydon (Sir H. Williams) are knocked completely sideways. Out of the 15 per cent. you have to take those who live in areas which are considered to be dangerous and who will come in, and that very large class of ordinary provident people who do not regard the moors of Yorkshire as necessarily entirely safe, and who will come in and take out a policy against a contingency which they may regard as remote.
From the total of 15 per cent. which we are dealing with we have to deduct those who anticipate losses and those who are merely provident. That reduces the 15 per cent. to a proportion which I cannot attempt to estimate, but which, in my own mind, I think would be about 5 per cent. of the total number of people owning chattels. The cost of investigating the values for which they desire to be insured would make their premiums a negligible contribution to the whole. On all those grounds, therefore—first of all, the various difficulties of administration and, secondly, the extraordinarily small class of people we are really dealing with—we do not see how we can adopt the suggestions made. I do not conceive it to be part of the Government's policy to try to impose sanctions on properties. What they wish to do is to try and get in as many contributions as they can in order to lighten the burden of those to whom the insurance is a necessity. That, I think, is a perfectly sound prin- 1317 ciple to follow. We are dealing with only 5 per cent. of the total people owing chattels, and their contribution will be negligible. On these grounds, therefore, we do not think that compulsory insurance, as such, is either fair or workable.
But there are other alternatives which may go some way to meet the objections which have been raised to the voluntary principle. My right hon. Friend and myself are examining a system of graduated premiums which will have the effect of bringing in more of those who wish to insure for a smaller sum by allowing them to pay a lower premium, and of raising the limit of £1,500, though I must say probably not to an amount as high as figures suggested in the Amendments submitted by hon. Members. I hope that, in our giving that pledge, hon. Members will feel that we have gone as far as we can. There are very difficult administrative problems in the way of meeting their views further than this.
§ Sir H. Williams
I beg to move, "That the Chairman do report Progress, and ask leave to sit again."
I do this in order that His Majesty's Government may have an opportunity to reconsider this matter. We have just had a speech from the President of the Board of Trade—
§ The Chairman
I must ask the hon. Member to explain, as shortly and concisely as he can, why he wishes to make this Motion.
§ Sir H. Williams
Yes, Sir Dennis. We are at a very difficult stage in this Bill. To many people the chattels scheme is one of the most vital importance. Many of us hold very strong views on this matter, the significance of which is apparently not yet fully appreciated by His Majesty's Government. We have endeavoured in the course of our speeches to indicate why we attach great importance to this. We have had from the President of the Board of Trade a speech which I regard as a non-possumus speech.
§ The Chairman
I think the hon. Member perhaps did not quite understand the meaning of my interruption. He will no doubt remember that it rests with the Chair to decide whether or not to accept a Motion to report Progress. I regret to say that I do not see at the moment any 1318 reason to accept it, and I do not want the hon. Member to make a speech on the merits of the Bill, or the particular Clause under discussion, but to tell me briefly for what reason he thinks that the Committee should report Progress.
§ Sir H. Williams
I have not frequently spoken from this Box, but it has been my observation that when someone spoke from the Front Opposition Bench at the end of a Minister's speech and a situation developed which indicated a problem of some difficulty, it was considered an appropriate method of enabling His Majesty's Government to reconsider their view, that a Motion to report Progress, moved from this bench, should be accepted.
§ The Chairman
It has been frequently stated that in this House every Member has equal rights. In considering this question, I am not making any distinction according to whether the Motion comes from that bench or any other bench.
§ Sir H. Williams
I appreciate that. I have always, when sitting in other parts of the House, emphasised the importance of equality for all Members. But an Amendment has been moved which the Government, obviously, are imposing absolutely. Many of us are anxious to facilitate the progress of this Bill. No Bill of such magnitude has ever been so much helped by those who are somewhat critical of it, as has this Bill. In those circumstances, when we reach a critical stage on the Bill and there is violent difference of opinion—I have not the slightest hesitation in saying that—when we are within half-an-hour of the end of the Sitting, and the statement of His Majesty's Government is unsatisfactory to many of us, irrespective of the quarter of the House in which we sit, it seems appropriate to take a step which will enable His Majesty's Government to reconsider the Clause before we part with it in Committee. It is because we have reached a stage which may be critical, and because it may be helpful to have Some reconsideration on the part of the Government, that at this moment I wish to move this Motion.
§ The Chairman
I see no reason whatever, in anything that the hon. Member has said, for accepting that Motion, and I must decline to accept it.
§ Mr. Silkin
We have listened carefully to the right hon. Gentleman; and may I say, without offence, that, at any rate, this afternoon he has given reasons for rejecting an Amendment, which he did not do this morning. At the beginning, I rather gathered that he accepted the principle of compulsory insurance, and thought it perfectly reasonable, but that he was compelled eventually to reject it on the grounds of expediency and practicability. He finished up by saying that he saw no reasons for imposing sanctions on the improvident—in other words, he saw no reasons for imposing a voluntary scheme. But sanctions are being imposed on the improvident in the first Part of the Bill, because there is a compulsory scheme for the insurance of property and of business effects. In many parts of the country it may be that owners of hereditaments or of business premises would not have wished to insure.
I submit that exactly the same principle applies to the case of the private individual. The people who may not desire to insure because of their geographical position or for other reasons should be compelled to insure in exactly the same way as owners of hereditaments and of business premises. It would not have been necessary for the right hon. Gentleman, in his concluding remarks, to say that he saw no reason why he should impose sanctions on the improvident. Therefore, the Committee will wish to know why there should be a different principle set up in the case of household effects, which, after all, affects a far greater percentage of the population and practically every household, whereas the insurance of hereditaments and business effects apply to relatively few. The Committee will want to know why a different principle should be required in the case of the vast majority of the population as compared with the relatively few owners of hereditaments or of business premises. If the principle is conceded that it is desirable to introduce a compulsory insurance of household effects but that it is not practicable, then the Committee will direct itself to the case made by the right hon. Gentleman.
The Committee was not impressed with the difficulties raised by the right hon. Gentleman. What he really said as regards several of the proposals was that they would bring about inequality and 1320 anomalies. Everyone who has studied this Measure will agree that it is full of anomalies. We cannot help ourselves; we must make the best job we can. It is true that Schedule A as a basis of contribution could be demonstrated to be anomalous in many respects and in many cases, but we accept it as a rough and ready method of assessing the proper amount of contribution. I submit, therefore, that it is equally right to accept another rough and ready method of valuing the amount of furniture on premises. My hon. Friend has put forward a proposal, which, I think, is a rough and ready method of valuating the amount of furniture in a household. Broadly speaking the value of the furniture in a house depends upon the rent and generally upon the number of rooms. As a rough and ready basis—not as a scientific basis admittedly—it is at least as good a test as Schedule A is the test of the value of premises or hereditaments. Alternatively, Schedule A itself could be accepted as a rough and ready method of evaluating the value of the furniture on the premises. Supposing this method is full of anomalies it may well be, as between the two brothers referred to by the right hon. Gentleman, that injustice will be done. Let us admit that. I submit to the Committee that even greater injustice is being done to a far larger number of people by making this insurance voluntary. As between the two kinds of injustice, the injustice of making that section of the population pay which is in the vulnerable areas and the injustice of perhaps making "A" pay more relatively than "B" on the merits, greater injustice is being done by the Bill as it stands than by any other method proposed by hon. Members in this Committee during the discussion.
I hope the right hon. Gentleman will give this matter further consideration. We do not mind anomalies—one more anomaly will not matter—and we will accept such injustices as may exist in assessing the value of furniture. We quite recognise the force of what has been said, namely, that there would be an immense amount of work in order to create a meticulously accurate and fair measure of insurance. Nobody wants to do that at the present time, but I submit that there would be no great amount of work involved in a compulsory scheme which did not have for its highest form of justice and equity such as we would accept in normal 1321 times, but is one which is designed to give insurance at a reasonable rate to those who need it in vulnerable areas and brings in everybody who is the owner of furniture, whether he is in a vulnerable area or not.
In conclusion, may I make this point? I believe that even at the rate of 30s. per cent. which is proposed there would, on the estimate of the number of persons who would come into this scheme, have to be a contribution by the Exchequer, and I maintain that it would ease matters very much from the Exchequer's point of view if, in addition to the premiums of people who would normally come in, there were contributions from people who would normally be outside the scheme. It would case the financial problem, even though they would, at the same time, be able to reduce the contribution from the contributor. As the Bill stands, it may well be that you would not get more than 1,000,000 or so coming into the scheme, whereas the other way there would be 13, 15 or 20 times that number under a compulsory scheme.
§ Mr. Lyttelton
The point I was making was that 85 per cent. of those who own chattels are already covered by the compensation scheme against the worst changes and chances of life.
§ Mr. Silkin
That has the effect of simplifying the administrative problem. You would not deal with this at all. Of the 15 per cent. who are left, I believe that a very small number indeed would come into a voluntary scheme. Under a compulsory scheme you would, of course, get the benefit of their contributions. It would have the dual effect of making the scheme more satisfactory financially and more equitable, and I hope the Government have not said the last word on this matter. The proposal put forward, although we have not had the details of it, does not appear at first sight to be particularly attractive.
§ Sir I. Albery
When I listened to the President of the Board of Trade, I could not help feeling that lie was approaching this problem from an entirely wrong angle. This is not an insurance Bill; it is a War Damage Bill, and its object right through is to levy a certain amount of money from the community and then give compensation to those persons who have been damaged by the war. That is not insurance, and it is no good mixing up 1322 insurance and saying that you cannot carry out a compensation scheme because it does not fit into an insurance policy. Obviously, there would have to be some kind of rough and ready justice. It would not be possible to be very exact. One would not be able to say accurately how much money was to be paid in premiums and how much compensation received in return. I thought that at least two or three of the proposals which my right hon. Friend the President of the Board of Trade turned down as yardsticks could have been made to work with a little adjustment. What it is desirable to aim at is some rough and ready scheme which will protect the poorest people, who are already to some extent protected under the present proposals, and which will give a measure that has some relation to the value of the property insured in the higher scheme, without going very high—in other words, a general compensation scheme. This might involve certain difficulties, but I cannot see that it would involve writing 13,000,000 insurance policies, or anything of that kind.
In all these cases, when you are considering difficulties, there is only one thing that really matters, and that is the importance of doing what you want to do. If it is sufficiently important, you will find a way of doing it. Before concluding my remarks, I want to consider how important it is. In my opinion, it is vitally important. It is not merely a question of whether this particular part of the War Damage Bill shall be compulsory or not. It raises the whole question of principle. As has been said over an over again in the House, in this war we must all make, not an equal sacrifice, but a sacrifice in proportion to our ability. It has been said over and over again that those who suffer from the war are to have their burdens shared with the rest. I am certain that is the desire of the whole community. In this war we do not want some people to become richer than they were before and others to be broken and bankrupt. That principle ought to apply in the present case. I am not definitely in favour of any particular Amendment, I am not tied to any particular yardstick, or even to the Amendments on the Paper in my name, as to what the amount shall be, but I want to see a real scheme of compensation to which everybody has to subscribe, not as 1323 an insurance—because this is not really an insurance scheme—but as a levy. I want that levy to be equally distributed.
Mr. Pethick-Lawrenee (Edinburgh, East)
I listened with great attention to the speech of the President of the Board of Trade. Of course, the right hon. Gentleman can make a very good case to show that whatever proposals are put forward to change the Bill will cause anomalies. I am sure the right hon. Gentleman will appreciate that nobody denies that; but equally, there is no doubt, as was said by my hon. Friend the Member for Peckham (Mr. Silkin), with great force, that the Bill is full of anomalies. We recognise that there can be no scheme, and that there is no scheme in the Government's proposals, that is not full of anomalies.
I was particularly interested in the numerical point made by the President of the Board of Trade, and which he explained in an interruption of my hon. Friend's speech. I thought that in that interruption he made his case rather worse, because, first, I do not think his statement was really in accordance with the facts, and secondly, in so far as it was in accordance with the facts, it minimised his reasons for not changing the Bill. His statement was that of the 13,000,000 to 20,000,000 householders, 85 per cent. are covered by the compensation gratis scheme. That is quite incorrect. They are not covered. All the cover which they receive is under what is described as "essential furniture," and I am advised by people up and down the country that that term is being extremely narrowly construed.
I have been very anxious, quite apart from the question of whether the scheme should be voluntary or compulsory, in the case of people whose chattels may be worth, as they reckon, £100 or £150, that they should have some means whereby the whole of their chattels will be covered. They are not covered under the compensation scheme and there is no pretence that they are. They can obtain perhaps £10, £20 or £30 or £40 at the most, but if they are bombed their £150 worth of chattels will be absolutely gone. Even if the scheme, as it is now, is to survive, and there is to be no compulsion, we have to be told precisely how this new scheme dovetails into existing compensation so 1324 that men with chattels worth £100 can be assured that the whole are covered partly by the compensation scheme and partly by some small premiums they have to pay.
It must be clear to the Government that there is a strong feeling in the Committee against them in this matter. I do not believe that there is much point in voting down the Government on a Bill of this kind. What we want to do is to convince them of the need for some change in the Bill. I suggest that after the Debate they might perhaps think again about the whole matter and think on some new lines. My hon. Friend the Member for North Aberdeen (Mr. Garro Jones) made certain suggestions. I do not think they went far enough, but possibly there may be some way out of the impasse along those lines. It will be very unfair for people living in particularly dangerous areas having to pay these large premiums, and people living in less dangerous areas being able to get away without insuring at all. I think the whole Committee concurs in that, but will the Government accede to us? Cannot they first of all think out a real scheme which covers the whole of the chattels of people who come within the lower income limits, such as the kind of scheme which the President of the Board of Trade alleged to exist, but which I venture to say does not exist? Perhaps there could be some scheme of full compensation or compensation up to a point after a small premium has been paid—I only throw it out as a possibility.
If we can get the whole of that class of people out of this chattels proposal we should reduce the numbers left to a much smaller proportion. We should then he dealing with the comparatively well-to-do people, and we could see what could be done in their case. You might say that people with a certain range of income should pay according to some principle which was not absolutely right, but it might be near enough for practical purposes. We should then be left with a still smaller number. If the Government would say that they would look at a proposal of that kind, and think again, in view of the Debate, then, possibly, those in favour of this compulsory scheme might be willing—I am not saying that they would—to withdraw the scheme, and something could be brought in on the Report stage.
§ The Chancellor of the Exchequer (Sir Kingsley Wood)
I am naturally anxious to meet the Committee, but we must have the Clause to-day. I will, of course, examine any proposal made by the right hon. Gentleman. We might be able to improve the present position as far as concerns the sections that he has indicated. That would get rid of a great deal of the difficulty. I will see whether it is possible to dovetail that with some of the other proposals in the Bill.
I should also like to tell the Committee what has been in my own mind—apart from that section of the community to which the right hon. Gentleman refers—in order to reduce our problem, and make the scheme more attractive from the point of view of the premium. I recognise that the premium proposed may deter a number from taking advantage of the scheme. [An HON. MEMBER: "It is impossible."] What my mind was turning to was whether we could make that side of the scheme more attractive still, and I had in mind three stages by which the premium should be so much up to a certain amount, another premium up to a second amount, and another up to a third amount, so that by these means we should be able to make reasonable arrangements for those who could not afford to pay under the scheme as it stands at present. I also had in mind increasing the amount that could be insured under the scheme. I hope the Committee will accept my assurance that I will examine the proposals that have been made and will endeavour to carry out the indications that I have given, which, I think, would make the scheme considerably more attractive to the great body of the people of the country.
§ Mr. J. J. Davidson (Glasgow, Maryhill)
Does the right hon. Gentleman realise that, if he does make the scheme more atractive and brings in more people, the difficulty outlined by the President of the Board of Trade of dealing with a new scheme will arise?
§ Sir H. Williams
We are all rejoiced at what the Chancellor has said, hut we ought to think it over between now and to-morrow. I do not see any reason why we should conclude the Debate on the Amendment at this moment, and I am satisfied that we ought not to give him the Clause. The speech of the President 1326 of the Board of Trade was most extraordinary. He was making the plea that no one should insure because of the trouble of writing out a policy. That is undiluted nonsense. We cannot have it compulsory, because there would be 3,000,000 policies to be written out. The House of Commons must not be treated to that kind of argument. He said, "If you make it voluntary, it will bring the 3,000,000 down to 1,000,000." He can find enough clerks to write 1,000,000 policies, but not 3,000,000. That will not do. He says you cannot get valuations. We have to pay premiums on our valuations. There is 30s. worth of argument why I should not value my stuff too high. The other day I decided, having regard to changes in values, that my policies were a little too low, and I wrote to my insurance company. They did not argue with me. They are respectable, and so am I. They respected my valuation.
§ It being the hour appointed for the interruption of Business, the CHAIRMAN left the Chair to make his report to the House.
§ Committee report Progress; to sit again upon the next Sitting Day.