BANKING AND INSURANCE COMMITTEE. (Hansard, 14 July 1942)

§ Mr. Frankel (Mile End)
Some little while ago I asked a Question of the Chancellor of the Exchequer which read as follows: Whether, in the appointment of the Committee to examine the banking and insurance industry consideration was given to the desirability or otherwise of making the Committee independent of the interests concerned; why the Committee is substantially composed of persons representative of those interests; and whether he will now consider giving a better balance by adding representatives of those employed in the industry. The gravamen of the Chancellor's reply was that the Committee was expressly designed to conduct an independent investigation and not to be a body representative of the interests directly affected, whether employer or employee. He added: Those interests will, of course, be given ample opportunity to express their respective points of view to the Committee."—[OFFICIAL REPORT, 23rd June, 1942;col. 1816, Vol. 380.] I am sorry to have to repeat what I have had to mention on more than one occasion in this House, but a little later I addressed to the Chancellor a Question in which I asked: Why the Committee appointed to conduct an independent investigation into the banking and insurance industry and not representative of the interests directly affected includes amongst its ten members a director of the Equity and Law Life Assurance Society, a director of the Legal and General Assurance Society, a director of the Fine Art and General Assurance Company, and a former secretary of the Prudential Assurance Company; and whether, in view of this fact, he will reconsider his decision not to appoint a representative of those employed in the industry. It is interesting to notice the difference in the second reply which the Chancellor gave. He said: It was essential to find men of wide business experience and I see no reason to alter the composition of the Committee. None of those who have undertaken this urgent work 1191 can be justly described as representing the interests of the institution directly affected simply on the grounds that among their many preoccupations they happen to have the connections to which my hon. Friend refers."—[OFFICIAL REPORT, 7th July, 1942;col. 638, Vol. 381.] To-day the Chancellor is not here, apparently, to reply to me, although I gave him notice that I intended to raise the matter.

§ The Financial Secretary to the Treasury (Captain Crookshank)
I take his place.

§ Mr. Frankel
It is rather mysterious to me that business people, about whom the Chancellor knows so much more than I do, can apparently be directors of companies and not representative of them. I think that in old crime books directors were sometimes referred to as "guinea pigs." Does the Chancellor mean that these directors are guinea pigs and that is why they are on this Committee? In that case why should they represent this country on a Committee of such importance? I ask for a very simple thing. As those interests are represented, I ask that employees should also be represented. Not only are they not to be represented, but apparently they are not to be heard in evidence except by writing. There is an organisation called the National Federation of Insurance Workers, who are affiliated to the Trades Union Congress, and a body comprising the national organisations in the insurance industry called the Insurance Unions Joint Consultative Committee, and they meet under the auspices of the Trades Union Congress. The officials of this body were asked to meet the officials of the Board pf Trade and to discuss the question of the concentration of industry in an informal manner. They reported on the setting-up of a committee to investigate the question of the release of man-power in insurance offices and banks, indicating that any committee set up would be independent of the industry. The peculiar thing was that on the publication of the name of the members of the Committee, the person involved here wrote to the Board of Trade asking whether my organisation would be called to give evidence. He says: I am still trying to fathom whether the reply I received came from the office of the Industrial Insurance Commissioner, informing me that this committee did not propose to 1192 call individual organisations to give evidence, but were asking the National Federation of Insurance Workers to submit a memorandum. I submit seriously that in these days this question is even more important than it would have been in peace-time, as we are trying to get the confidence of employers and employees in this country. The latter seem to be more important in these days than the former.
I suggest to this House and to whoever is to reply to me that the matter cannot be left in this way. Within what power this House grants me or lets me have, I will press the matter even further. I expect to get an unsatisfactory reply, but I hope I am wrong in that expectation. We must give to employees, for the sake of the morale of industry, a greater opportunity of stating their points of view and of adding the weight of their undoubted knowledge of these matters than they have been given in this country up to now. It is to carry out that purpose that some of us have been elected to this House, and we are trying to pursue that purpose in some way. Through the right hon. and gallant Gentleman who is to reply to me, I ask the Chancellor of the Exchequer to note that we shall not rest until these matters are put right and until employees as well as employers are given some say in very important national affairs, affecting this country not only during the war but for many years afterwards. I hope that the reply I get will be an enthusiastic and encouraging one, although it might not agree to all that I said.

§ Sir Stanley Reed (Aylesbury)
May I respectfully submit one or two general considerations arising out of this proposal? I read the hon. Gentleman's Question and, the answers to them very carefully, and I have listened very care-fully to the brief address which he has lust given. I would point out that there are other considerations of broad general policy than; those which he has put before us I do not know whether his remarks apply in any way to Lord Kennet, who may—I do not know—be connected with insurance or banking companies. I do not know Lord Kennet personally.

§ Mr. Frankel
May I put the hon. Gentleman right upon this point? Lord Kennet is a director of the Equity and Law Life Assurance Society.

§ Sir S. Reed
He may be that, or connected with a dozen banks. It does not affect my argument, and I do not know him personally. I had the good fortune to work under him on one of the most important questions of the day, that of Indian currency and finance, where he was Chairman of the last Commission which inquired into that matter. The amazing ability with which he extracted from every witness the maximum which that witness could give, and the way he summed up in a Report of admirable clarity the conclusions of that inquiry, give me such complete confidence in him that whether he is chairman of one insurance company or a dozen, or of one bank or a dozen, I say that I know no man in our public life more qualified to conduct an inquiry of this character with great ability, complete independence and absolute impartiality.

§ Mr. Frankel
I do not deny that.

§ Sir S. Reed
There is another aspect of the matter to which I did not refer. I think that my hon. Friend has rather misconceived the position of a company director. When the director has large interests outside, he does not necessarily become tied to the particular interests of that company, but he brings into the control of that company a wide general knowledge of finance, currency and so on which is of great value in the direction of the organisation. Further, because a man is a first-class man at drawing a policy or in running a current account at a bank, I cannot agree, whatever may be our respect for him in those capacities, that he is therefore necessarily qualified to express an opinion upon the higher organisation. In other directions, too, we are running off the road in thinking that because a man is a first-class mechanic or an admirable man at a capstan lathe, he is therefore qualified to direct a great arid complicated engineering enterprise. In this case, the qualifications of the chairman and others who are taking part in this inquiry are such as to earn them my complete confidence, and I think they are entitled to the confidence of the House.

§ Mr. Frankel
Would the hon. Gentleman say whether he agrees that the employees ought to be represented?

§ The Financial Secretary to the Treasury (Captain Crookshank)
I will be as brief 1194 as my two hon. Friends have been on this subject. The hon. Gentleman, who has raised this point twice in Questions, perhaps did not fully appreciate that this inquiry is directed merely to the question of ascertaining what steps, by some form of concentration or otherwise, can be taken to secure the greatest possible release of man-power. This is not a great, important Commission to go fundamentally into these topics.

§ Mr. Frankel
Is it not important?

§ Captain Crookshank
It is important from the point of view of man-power.

§ Mr. Frankel
That is of primary importance these days.

§ Captain Crookshank
Of course it is, but I wish the hon. Gentleman would let me finish my sentence. This is not one of those great important inquiries into the whole field of banking, insurance or industrial insurance, but it is an important Committee dealing with the practical steps which may be taken to get more men, if possible, out of these various institutions and organisations to help the war effort. Therefore, it is not quite in the same sphere as some of the committees and commissions whose work we discuss in this House. That was made clear in the first instance when my right hon. Friend gave an answer in May. He then pointed out that the Committee, which consisted of a chairman and nine members, would act in three panels, one dealing with banking and allied business, the second with ordinary insurance, and the third with industrial insurance. The next thing which happened was, as my hon. Friend points out, that he himself at the end of June asked a Question as to whether consideration had been given to making the Committee independent of the interests concerned. My right hon. Friend said that it was expressly designed to conduct an independent investigation. Then my hon. Friend made a little independent investigation on his own, apparently, because some fortnight later he put down another Question asserting—quite rightly—that of the 10 members three were directors of one or other of the insurance societies and one was a former secretary of the Prudential.
Therefore he tried, as he has tried to do in what he said to-day, to show that the Committee were therefore no longer independent. I think that there is a great 1195 weight to be attached to what the hon. Member for Aylesbury (Sir S. Reed) said, that one must not necessarily assume that because a certain person has some interest such as that of director in a company he is necessarily the representative of that company. But I would like to take the matter further, and to inform my hon. Friend about these particular panels, and perhaps he will then think that the situation is not quite so grey as he first thought.

§ Mr. Frankel
I think it is black.

§ Captain Crookshank
The Chairman is Lord Kennet, and he is a director of the Equity and Law Life Assurance Society, but I am quite certain that no one who knows Lord Kennet or the great work he does during the war to help the Government, and indeed of the great position he holds in the country, having occupied important offices of State, including that of Cabinet Minister, and now being a distinguished member of the other House, if someone suddenly mentioned to such a person or even to my hon. Friend without notice or his expecting to be asked, the question who or what Lord Kennet is, his reaction would not be that he is a director of the Equity and Law Life Assurance Society. That is just one item in Lord Kennet's make-up, if I may use the phrase, and he is not and cannot be described, I think, as being in any sense of the word as a representative of the insurance world. [Interruption.] If my hon. Friend wishes to interrupt, I will make way for him, but running comment is very difficult. That is the Chairman of the Committee. There are three panels. There is a banking panel consisting of Mr. E. H. Lever, Sir Robert Witt and Sir William Wood. This was, in passing, one of the objects of the Ministers concerned in setting up this Committee, because it has not been set up only by my right hon. Friend. The Minister of Labour and the President of the Board of Trade and my right hon. Friend have set up this Committee. After very long consultations and very careful discussions as to who should be put on, part of the plan was to have these three panels and that on each panel there should be a well-known and capable solicitor.
Having said that as a preliminary observation, I pass to the banking panel, consisting of the three gentlemen I have 1196 named. Two of the gentlemen about whom my hon. Friend asked questions are among these three, because Mr. Lever was at one time General Secretary of the Prudential, but there again he has passed from that sphere to the extent that he is chairman of Richard Thomas's now, and a director of a number of collieries, steel and tin-plate companies, and again could hardly be called a representative of the insurance world. Sir Robert Witt is a director of the Fine Art and General Insurance. He is the senior partner in a very important firm of solicitors with wide interests. Sir William Wood is President of the London Midland and Scottish Railway. There is the panel. I admit that two members of it are directors of insurance companies, but its function is primarily to investigate the banking side of the question—the man-power and woman-power in the banks and the allied industries, if that is the right phrase. They will be joining in as a whole Committee at some stage no doubt to draw up a report, but so far as these two directors are concerned they are looking at the banking side of the problem.
Then we come to the ordinary insurance panel. There we have Mr. F. H. E. Branson, Mr. J. C. Burleigh and Mr. G. Cunliffe. Again there is a solicitor in Mr. Branson, who is a director of the Legal and General Insurance Company and is a director of certain trust and property companies. Mr. Burleigh is a chartered accountant, and Mr. Cunliffe is a director of British Aluminium and various other companies, and a member of the industrial and Export Council of the Board of Trade. These three gentleman are going to look at ordinary insurance. I will concede the point that Mr. Branson is a director of the Legal and General Insurance Company, but he is also one of the best-known solicitors in London, and it is for that reason, and not because he is incidentally an insurance director, that he was invited to serve. The third panel is the industrial insurance panel. There again, we have a solicitor, senior partner in a very important firm, Mr. Garrett; Sir Felix Pole, of Associated Electrical Industries, and Mr. Davies, formerly manager of the Cooperative Wholesale Society Bank. They are looking at industrial insurance. There is no director of an insurance company on that panel; but, of course, Mr. Davies was formerly a director of the C.W.S. 1197 Bank. But he was not included in the indictment of my hon. Friend, although I suppose, on my hon. Friend's argument, he ought not to be a member of the Committee either——

§ Mr. Frankel
I never used the word "indictment."

§ Captain Crookshank
—because of his banking connection. But I am very glad that he is on it. That is the composition of the Committee, and those are the three panels. Although my hon. Friend was no doubt justified in bringing the question before the House——

§ Mr. Frankel
Why are there no employees on the Committee?

§ Captain Crookshank
I hope that he does not think there is anything dreadful about the composition of this committee. It was set up to be, not directly representative of the interests of either employers or employees. I hoped—although it was a very vague hope in the case of my hon. Friend—that I might have satisfied my hon. Friend, because although these three gentlemen were, among other things—certainly not as to one of their greatest interests in life—directors of insurance companies, that did not affect the question. Put it the other way round. If the insurance world had been asked to nominate three representatives of their interests, which is what my hon. Friend alleges——

§ Mr. Frankel
I am not alleging anything.

§ Captain Crookshank
What he suspects, then. My hon. Friend must be a lawyer, because he does not say anything about himself at all. If we had asked the insurance world to nominate three representatives, I should have been extremely surprised if they had selected these three gentlemen. It would have been far more likley that they would have recommended the nomination of one of the chairmen, one of the managing directors, or one of their officials. But, in point of fact, they were not asked. These gentlemen were selected by my right hon. Friend because of the qualifications they had, and the fact that they were directors of insurance companies was not a matter of paramount importance in the choice. I know that my hon. Friend will not be satisfied, but I hope that he will acquit us of any in- 1198 tention of "packing" this committee. I am certain that if we had wanted to put on direct representatives of these industries, these three gentlmen would not have been nominated. But they are three gentlemen in whose judgment we have every confidence.
May I just say this in conclusion? Let us put the best construction we can on these matters, and not the worst. Let us assume that very busy men, having a great many other things to do in war-time, having accepted the Government's invitation to do this work, will do it in the best interests of all concerned, that they will sift the evidence given before them and present a report which will enable us to get a few men and women out of these industries for the war effort. There is just one other point about the evidence. Of course, they will take evidence from both employees and employers—there is very little question about that—but, in fact, I understand that one of the big unions, representing one or other of these interests—I do not know which, as, of course, I am not a member of the Committee—has already given evidence.

§ Mr. Frankel
Written or verbal?

§ Captain Crookshank
I cannot say. It is a matter entirely within the discretion of the Committee as to how it calls for evidence, and no Committee has ever been set up by the Government with directions as to how it is to conduct its affairs or call evidence. The fact remains that they will call evidence from both sides of these various industries, and, in fact, one of the larger unions has already done it. While I am sure my hon. Friend is not satisfied, I hope he will be content to let the matter rest to see what sort of report is produced, and when the report is produced I am sure that he will be one of the first to congratulate the members on what they have done and to thank them for their work.

§ Mr. Rhys Davies (Westhoughton)
The right hon. and gallant Gentleman has missed the whole point of my hon. Friend's argument. These committees are to deal with man-power, and not man-power among directors of banks and insurance companies, but among the employees of the companies. He really cannot get away with the argument that he has put forward just now. If these bank clerks and insurance workers were 1199 as strongly organised as the miners, the textile workers, the engineers and the railwaymen, the Treasury would not dare to treat them as they have treated these people in the banking and insurance industry.

§ Captain Crookshank
The hon. Member overlooks the various panels which have been set up by the Board of Trade. I repeat that the President of the Board of Trade is one of the three Ministers concerned with the appointment of the Committee. Every panel set up by the President of the Board of Trade was really a one-man panel with an adviser of the Civil Service, and there was no question of any representative of the employees at all, in spite of the strong trade unions referred to, such as the cotton operatives and so on.

§ Mr. Davies
The right hon. and gallant Gentleman is mistaken. That is the case when you deal with the concentration of industry, but when you deal with man-power, he is wrong. The trade union in the distributive trades have a say as to the man-power to be secured from that industry. I have only one word to say to him on that score. The people employed in banking and insurance have not been recognised by the banks and insurance companies at all, as have the workers in other industries. The whole trouble arises from that fact. These directors will not work with the organised employees, and I regret that the Treasury have seen fit to agree in principle to the employers' attitude towards organised labour in the banking and insurance industries.