NATIONAL INSURANCE (FRIENDLY SOCIETIES) (Hansard, 17 December 1945)

§ Major Boyd-Carpenter (Kingston-upon-Thames)
I desire to invite the attention of the House to the subject of friendly societies, with particular reference to the work which they have done and are doing in respect of national insurance. It is not my intention, if only for the very good reason that I understand that I should not be permitted to do so were it my intention, in any way to comment upon forthcoming legislation. It would seem that this is a convenient moment for the House to discuss this matter. Perhaps I might be permitted to say that its relevance and urgency have not been diminished in any way by the answer given on 22nd November by the Minister of National Insurance to a Question put to him by the hon. Member for Norman-ton (Mr. T. Smith). The House will recollect that, in reply to the hon. Member's Question, the Minister gave a perfectly clear statement that it was his intention to exclude the friendly societies from any participation in the future scheme of national insurance.
I approach this subject with the more confidence from the knowledge that the valuable work done by the friendly societies has been drawn to the attention of hon. Members opposite from a source far more authoritative than can be found on this side of the House. I will refresh their memory with certain words which will be familiar to some of them: The Labour Party is of the view that, in our future social insurance scheme, the system of approved societies shall be abolished, with the exception of bona fide friendly societies and trade unions, who have a long and honourable record of work in both public and voluntary health insurance, and should be free to come in if they wish. Those words, which will no doubt bring a reminiscent echo into the minds of hon. Members opposite, arc part of the instructions issued to all Labour candidates at the last Election. I call them in aid, without any intention of transgressing any Rule of Order, but of giving an exposition, far more lucid and convincing than any I could give, of the very valuable work which is done by those societies. I am sure that that admirable exposition commands the loyalty of hon. Members opposite, just as no doubt, its exposition by hon. Members commanded a certain 1041 loyalty among some sections of their constituents.

§ Major Boyd-Carpenter
It may be of assistance to the House in considering this matter in all its aspects to bear in mind the facts with regard to these societies at the present moment. I am assured that the present membership of the societies is in the neighbourhood of 8,500,000—a very significant and important section of the population. In the latest year for which figures were available, they distributed in benefits something in excess of £13 million, and their total accumulated funds exceeded £146 million. That solid stake in our national affairs has been, as the House is well aware, the product of solid growth, and the figures, when contrasted with those for 1910, show that growth to have been steady and continuous. The amount of benefits paid in the last year for which figures were available is precisely double that of 1910; the membership has increased by 1,700,000, and the assets have increased by the appreciable amount of £96,000,000.
The societies—and I would emphasise this point—axe democratically-managed and operated societies, of a very wide variety, democratically controlled, which have been administering health insurance benefits for a very considerable number of years. At this particular moment it may not be wholly irrelevant to invite the attention of the House to the fact that, when the late Mr. Lloyd George was introducing his National Health Insurance Act, it was his original intention to exclude the friendly societies from participation in the scheme, but that, for reasons which it will perhaps be unnecessary to enter into, Mr. Lloyd George, when the Act came before the House, took another view and decided to include them. There is sometimes a value in historical precedent.
It may assist the House in appreciating the very wide variety of these societies if I give one or two names, selected at random, of the societies whose fate may, it is possible, be decided in the near future. There is, for example—I quote from their annual Conference—the Hearts 1042 of Oak Benefit Society, of the Committee of which, I notice, the hon. Member for Southampton is a member; there is the Sheffield Equalised Independent Druids, the National Equalised Druids Friendly Society, the United Order of the Total Abstainent Sons of the Phoenix, there is —and this will perhaps appeal quite solidly to hon. Members opposite—the Northumberland and Durham Miners' Approved Society; the Sincere Second Burial Collecting Society, the Sincere and Humane Perseverance Approved Society and, which will no doubt appeal to certain other hon. Members, the Grand Independent Order of Loyal Caledonian Corks.
These few extracts show the width, and variety of these societies, and how widely they are spread over the community. At this particular moment the vital question in connection with all of them which it is appropriate should be in the minds of hon. Members of this House, whatever pledges they may or may not have given, is the part which the societies have played in the administration of National Health Insurance. The fact that 45 percent. of the insured population have elected to have their benefits so administered is perhaps not without significance, and for this reason, that the agents of these societies, who, on the whole, go into the homes of the people and discuss these matters in a friendly and kindly manner, have had their work appreciated by the people with whom they deal, and many such people would be horrified at the idea of having to go and discuss intimate matters affecting their bodies and their health in some Government office before some Government official.

§ Mr. Callaghan (Cardiff, South)
On a point of Order, Mr. Deputy-Speaker. Is it in Order on the grounds of anticipation, for the hon. and gallant Member to bring up a matter which, as he says, may conceivably prejudice the futuree organisation of friendly societies?

§ Mr. Deputy-Speaker (Major Milner)
The hon. and gallant Member is in Order so far.

§ Mr. Callaghan
Further to the point of Order, may I submit to you, Sir, that the whole reason for having this discussion is that the future of the friendly societies is shortly to be discussed? Therefore I respectfully suggest that it is anticipation of legislation under Standing Order No. 9.

§ Mr. Deputy-Speaker
Perhaps the hon. Member will tell me what there is on the Order Paper which the hon. and gallant Member's speech might anticipate? I know of nothing.

§ Mr. Callaghan
I seek your guidance, Mr. Deputy-Speaker. Is it in Order for a matter to be discussed now which is clearly leading up to later legislation?

§ Mr. Deputy-Speaker
Perhaps the hon. Member will be good enough to leave the conduct of the Debate in my hands.

§ Major Boyd-Carpenter:
I regret if the possible relevance of my historical reminiscences should cause the hon. Member any inconvenience, and I do not propose to speculate about the causes of any undue sensitivity he may feel on the matter. Before the hon. Member's helpful intervention, the point I was attempting to make was that the administration of the national health benefit as it is and has been carried out in the homes of the people, is warmly appreciated by many millions of our fellow countrymen who dislike intensely the idea of any change in that state of affairs, and that, I submit, is a matter upon which public opinion is already abundantly clear.
One of the most valuable parts of the administration of national health benefit by the societies has been the link which that system provides between national insurance and voluntary insurance. It has been the case, and so far as it is possible to anticipate, it will always be the case, that a section of the higher paid and more prudent of our population will desire to augment by voluntary insurance any amount of benefit obtainable from national sources, and it has proved of manifest convenience in the working of such a system that both the voluntary and the State insurance should be administered through the same organisation. It is evident that a saving in expense and in trouble follows from one medical certificate serving to clarify and decide the payment of benefit from both sources, and were it at any time to be intended to change that system, it would surely strike a blow against the provision by individuals of voluntary insurance against sickness.
I do not believe that any responsible person who is concerned with the welfare of our people would wish to do anything in any way to diminish the working of a 1044 system of voluntary insurance in addition to State insurance. In support of that, I would call in aid an authority whose opinion, not very long ago, it was almost an impertinence to question—Sir William Beveridge. Sir William Beveridge, at that time the Member for Berwick-upon-Tweed, but no longer the Member, on 3rd November, 1944, in column 1130 of the Official Report, said as follows: I do not believe we can have industrial life offices in the administration of social insurance, and I do not see any reason for doing so in their present form, but we can and should keep the friendly societies as responsible agents. If voluntary insurance is to continue as well as compulsory insurance we must make it easy for people to insure, we must avoid that duplication and overlapping which otherwise would take place in the home of every person who joins friendly societies."—[Official Report, 3rd November, 1944; Vol. 404, c. 1130.] I call in aid the speeches made by hon. Members opposite denouncing any person who was so rash as to question the dicta of Sir William Beveridge, and I ask those hon. Members to recollect the observations which some of them, without any doubt, made upon that subject. I now call Sir William Beveridge in aid in support of the matters I have been attempting to lay before the House. There is only one other matter I would say. The question of the position of these societies is one of urgency and of relevancy, and I appeal to hon. Members opposite to search their consciences on the subject.

§ Mr. Paget (Northampton)
I wish to ask the Minister most earnestly to reconsider this matter. I know that the Circular is subject to different interpretations. I do not say that what it actually said mattered so much as its timing. When that Circular came out, whatever else it may have been understood to mean, I do not think it was understood by the friendly societies to mean that the Government were proposing to adopt the 1944 plan in toto, on the ground that there was not time to devise anything else. I personally feel that my honour with regard to the friendly societies is somewhat involved in this matter, and that may apply to some other hon. Members, and I ask the Minister to reconsider the matter.

§ The Minister of National Insurance (Mr. James Griffiths)
This is a very important matter and one which, obviously, cannot 1045 be fully or adequately discussed in the time available on the Adjournment. I will do my best in the time that is available to give the House the considerations which led me and the Government to the decision that we made. Perhaps I may be allowed to say a personal word? This is not the first time upon which I have spoken upon this matter in this House. I took part in the Beveridge Debate more than two years ago and in the Debate on the White Paper a year ago, and I gave, with my colleagues, most earnest consideration to this matter then. The view which I and the Government form now is also the view which I formed 12 months ago and two years ago, from which I have not departed. The hon. and gallant Member for Kingston-on-Thames (Major Boyd-Carpenter) called in aid 1911 and the late Earl Lloyd-George, and it is perfectly true that Mr. Lloyd George as he was in 1911, called in the services of the friendly societies, and, later on, as the result of Questions in this House, was obliged to call in the services of the insurance companies too, and the approved society system was set up.
When it was set up in 1911, the approved society system served the Government more than one purpose. For example, what had to be administered then was the new National Health Insurance Act, which provided for sickness and disablement benefits at certain rates, and also provided maternity benefits, and, by creating the system of approved societies and, making it possible for friendly societies and for the industrial life offices to become approved societies for the administration of the new benefits provided under the new Act, the Government of the day were enabled to avoid creating a machine of their own. In other words, and this is very important, the Government in 1911 were able to hand over the administration of health insurance completely to other bodies. Those are the circumstances in which the approved societies were created. They were made into independent financial units, and, as a result of that over 30 years, the approved society system has grown up and that system has had great advantages for the insured contributors, for the country and for the Government, and no word that I want to say detracts for one moment from the high appreciation which I and everybody has for the 1046 work of the friendly and approved societies.
But the approved societies have one defect, which, I think, makes their retention as approved societies impossible in the type of scheme I have devised for the Government. They fail to provide equal benefits for equal contribution. These contributions are imposed by this House, and, when we impose equal contributions on men and women in this country, we have an obligation to see that the equal contribution which we compel them to pay provide equal benefits for all. The approved societies fail to do that. The approved societies provide minimum benefits for some sections of the population and additional benefits for others, and, by and large, they provide additional benefits for those among whom the incidence of sickness is least.

§ Mr. Goodrich (Hackney, North)
On a point of Order. May I ask if the Minister is talking of friendly societies as distinct from approved societies?

§ Mr. Griffiths
I have to deal with both, and I say that, if the friendly societies have to go,' the approved societies must go. I have provided for that, and I think it is agreed on all sides of the House that such a system must go.—[Hon. Members: "No."]— I must ask what the hon. and gallant Member is pleading for—that the friendly societies or the others shall come in as approved societies in the existing system or not?

§ Major Boyd-Carpenter
If the right hon. Gentleman challenges me, I can give him the answer in one sentence. My plea was for the inclusion of friendly societies to help to administer the scheme.

§ Mr. Speaker
I must say that that is out of Order, because it involves legislation.

§ Mr. Griffiths
I wanted to get clear what was the proposal of the hon. and gallant Member regarding whether they should help us, and under what terms and conditions, in approved societies or in any other way. I can explain the position best by referring to 1911. The new scheme which I shall bring forward, in the form to which the Government is committed—

§ Commander Agnew (Camborne)
That requires legislation.

§ Mr. Griffiths
I do not think it is possible for me to explain why we made this decision unless I refer to the legislation.

§ Mr. Callaghan
There was no point about the speech.

§ Mr. Griffiths
Let me set out briefly what are the essential differences in structure between the new scheme and the existing scheme. The first is this: the new scheme will cover virtually the whole of the population—the whole of the population will be an insured population. Secondly, it will be a unified scheme— one contribution, one stamp, one fund. It will provide benefits—

§ Mr. Osbert Peake (Leeds, North)
On a point of Order, Mr. Speaker. As I understood your Ruling just now, when my hon. and gallant Friend the Member for Kingston-upon-Thames (Major Boyd-Carpenter) intervened, you ruled that we could not discuss the inclusion of friendly societies in the scheme. It now appears that the Minister is giving us a description of the new scheme, and I respectfully ask whether it is in Order.

§ Mr. Speaker
The hon. Gentleman should not have put down a matter of this sort for discussion on the Adjournment. I was not here. I agree that the Minister is in a state of great difficulty.

§ Mr. Griffiths
I take your Ruling upon it, Mr. Speaker. I am indeed in very great difficulty. What I have decided, and what I announced to the House the other day, was that, when the new scheme came forward before this House, it would come upon the basis that all approved societies, including friendly societies, would be excluded. I have to explain why I and the Government have arrived at that decision. I cannot explain that decision unless I am allowed to relate it to the new scheme from which they are excluded. I ask your Ruling upon it, Sir.

§ Mr. Speaker
I am not quite sure, but I rather feel myself that the matter having been raised like this, the right hon. Gentleman ought to say that the whole thing is out of Order and that he cannot reply, unless he feels strongly that some reply should be given.

§ Mr. Tom Smith (Normanton)
Further to that point of Order. As the decision was announced in answer to a Question a few weeks ago, would it be in Order 1048 for the Minister to justify why he gave that answer?

§ Mr. Speaker
Not without breaking the Rules of Order.

§ Mr. Griffiths
If I may deal with that point, Sir, I made the statement the other day—I made it clearly—announcing the decision of the Government without prejudicing the rights of Parliament when we come to discuss the matter, but I said it was essential that I should make an announcement then because it was desirable that certain negotiations should begin at once. Obviously, they could not begin before the announcement had been made in the House, but I made it perfectly clear that that announcement was made without prejudice to future discussion in the House. But I must say this if I may: this is an important matter and what I want to say about it involves references to legislation that is contemplated. I do not think I could do justice to the Government's case, certainly not to the friendly societies, unless I was free to discuss our decision and to relate it to the context of the new scheme which we are putting forward.

§ Mr. Speaker
Yes, I think the right hon. Gentleman might do that, although we are breaking the Rule for the time being. The matter is one which should not have been brought up on the Adjournment.

§ Mr. Griffiths:
Thank you very much, Mr. Speaker. In the five minutes that remain to me I will do my best to make the case briefly and shortly. Here is the position. The new scheme will bring in virtually everybody in the population. It will be a unified scheme with one contribution, one stamp, one fund. It will cover the whole of a wide series of benefits. It is, therefore, a comprehensive scheme and a unified scheme.
Let me come to what is the ground upon which we stand in this matter. The Government have to provide comprehensive machinery for the administration of this new scheme. They cannot possibly delegate this work to any other agency, for no other agency covers the whole of the insured population, and no other agency provides this wide variety of benefits. We shall have to create our own machinery, covering the whole of this country, by which and through which we shall administer the benefits 1049 provided under this new scheme to all those who will be compelled to contribute. We cannot, therefore, do what the Government did in 1911; we cannot delegate this work to some other body. Since we have to administer it ourselves, what we have to consider is this: is it desirable that we should, in addition to providing our own machinery for the administration of this scheme, have dual administration? That is clearly what it means. We must have our network of offices throughout the length and breadth of this country; that will be essential in order to administer these benefits for all the people covered by it—employed people, self-employed people, and everyone else. It is clear that we must do that. I therefore have to look at it from that standpoint—not whether I should find another agency that would be able to do this job for us, for no agency can. I have to realise that we shall have to provide our own comprehensive machinery and that if any other agency were brought in it would mean dual administration which would not be justified except on the soundest grounds.
There are other reasons too. The suggestion has been made that the administration of some of these benefits should be delegated to the friendly societies as agents. This is a co-ordinated scheme providing benefits of various kinds, some of which are co-ordinated together. The hon. Member opposite has sat with me in Standing Committee A discussing the Industrial Injuries Bill, and in the consideration of that Bill I have indicated that at certain stages and in certain circumstances those who are entitled to industrial injuries' benefits will also be entitled to sickness benefits under the new proposals. It is a part of this scheme.

§ Lieut.-Colonel Martin Lindsay (Solihull)
Surely all those facts were known to the right hon. Gentleman and his party before the General Election.

§ Mr. Griffiths
Yes, that is true, and reference has been made to a circular issued by the Labour Party, but more than one circular was issued, and I would ask hon. Members who are interested to read both together. I am in difficulties, speaking with only a minute or two left, but my point is that it is essential that these benefits shall be co-ordinated and they cannot be co-ordinated if their administration is separate, and clearly any 1050 proposal for bringing in an agent involves the separation of the administration of benefits, for example, sickness benefits and industrial injury benefits. Surely it is not proposed by the hon. Member that the friendly societies or approved societies or anybody else shall be brought in to administer the Industrial Injuries Bill and yet it is clear that its administration must be co-ordinated.

§ Mr. Goodrich
Will the right hon. Gentleman tell the House at what point the friendly societies have ever asked to administer the Industrial Injuries Bill?

§ Mr. Griffiths
I did not say they had. That was not my point. My point was that I had to administer both and coordinate both, my point was that both are in certain circumstances payable to the same recipient, and therefore it is essential that their administration should be in the same hands.

§ Major Boyd-Carpenter
If the object of the right hon. Gentleman is to secure that there is no duplication, how can—

§ Dr. Morgan (Rochdale)
On a point of Order. Seeing that the whole of this discussion is grossly irregular, you, Mr. Speaker, having given permission to the Minister to make his statement as a special concession, should he not be allowed to make it without interruption?

§ Mr. Speaker
As the Minister did not give way, the hon. and gallant Member cannot intervene.

§ Major Boyd-Carpenter
The right hon. Gentleman gave way to me.

§ Mr. Speaker
When the Minister is speaking the hon. and gallant Member cannot rise to his feet unless the Minister gives way.

§ Mr. Griffiths:
Let me in the minute that is left to me say this. What I have to consider is not the interest of any section of this nation but the interest of the whole nation and the interest of the scheme. I am satisfied, and I have been all along, that a single comprehensive scheme needs a single comprehensive system of administration.