§ 11.5 p.m.
I beg to move, in page 1, line 9, to leave out from the beginning, to "any," and to insert:whereby he undertakes the liability of reinsuring.I suggest that it would be for the convenience of the House if we discussed this and the remaining two Amendments together. This Clause relates to the reinsurance of ships, aircraft and cargoes, and this group, of Amendments arise from a review of the Clause, which was promised in Committee, in response to the Amendment there proposed by the hon. Gentleman the Member for St. Pancras, North (Mr. K. Robinson). The Amendments are designed to make it clear, which was what the hon. Member sought in Committee, that under the powers conferred on him by Clause 1 the Minister can only enter into agreements whereby he—the Minister—undertakes 1429 the liability of re-insuring ships, aircraft, and cargoes. They will not enable him to off-load his liability on to other persons.
The first two Amendments relate to the paragraphs dealing with, first, ships and aircraft, and, secondly, with cargoes. The third Amendment is a consequential Amendment of the proviso about foreign ships and aircraft. I should like to take this opportunity of thanking the hon. Member for St. Pancras, North for drawing our attention to this point. I hope he will agree that any possible ambiguity will be removed by these Amendments.
§ Mr. Kenneth Robinson (St. Pancras, North)
I am grateful to the Parliamentary Secretary for conceding this small but not unimportant point, which I made in Committee. We had a slight difference of opinion there, when the Parliamentary Secretary thought that I did not understand the intention of the Clause and I thought that he did not understand the purpose of my Amendment. He has now found words which are at least as good as those I sought to move in Committee, and I think we are both agreed now that the intention of the Clause is crystal clear.
§ Amendment agreed to.
Further Amendments made: In page 1, line 12, leave out from beginning, to "any," and insert
whereby he undertakes the liability of reinsuring.
In line 16, leave out from beginning, to "any," and insert
whereby he undertakes the liability of reinsuring.
§ 11.9 p.m.
I beg to move, "That the Bill be now read the Third time."
The purpose of the Bill has already been made clear in the preceding stages, but the House may wish me to review it very briefly. It is, in the main, a reenactment of those provisions of the War Risks Insurance Act, 1939, which deal with the insurance of ships and cargoes, particularly against war risks. Its main object is to secure that insurance facilities shall be available in war-time so that, on threat of or during war or hostilities, ships and commerce will not be interrupted by lack of such facilities.
1430 The Bill deals with emergency circumstances and, as I said during the Second Reading debate, there is no intention of interfering in any way with the legitimate interests and activities of the insurance market in peacetime. Certain additional powers have been added in the Bill. The first is the power to cover aircraft and their cargoes in the same way as ships and their cargoes and is, I hope, self explanatory at this stage.
The other is the power to insure goods in transit between ship and warehouse, or vice versa, at an overseas port as well as at a United Kingdom port, as provided in the 1939 Act. I do not think I need enlarge on these additions which I hope are acceptable to the House. The Bill also includes power to re-insure foreign ships and aircraft as well as to insure them. Foreign ships were covered during the last war through the medium of Defence Regulations, and it is now desired to incorporate these powers in permanent legislation. In this Bill my right hon. Friend seeks power to enter into arrangements with foreign countries in peace-time for re-insuring their ships in the event of war. These necessary arrangements can thus be made well in advance of any hostilities.
Another power given by Defence Regulation, which again it is desired to incorporate in permanent legislation, relates to the issue of certificates instead of formal insurance policies. This is dealt with in Clause 7. The hon. and learned Member for Kettering (Mr. Mitchison) expressed himself a little unhappy about this in Standing Committee, but it is surely highly desirable to facilitate Government insurance in war-time, and I repeat what I said on the Second Reading, that it does not result in any loss of revenue from stamp duties.
Lastly, I think that I should refer to a further change which would result from the development of conditions under which hostilities now take place. General power is being taken to cover all kinds of war risks within the limits of Clause 10, and to select from them those which the Government must take to supplement the marine risk policy. The former differentiation which existed between Queen's Enemy risks and other war risks is no longer maintained. This change is made because we may in future become involved in hostilities, such as those 1431 in which we are now engaged in Korea, which might not technically be held to be a state of war at all.
May I say that we are most grateful to hon. Members on both sides of the House for the speedy passage of this Bill through Standing Committee, and for the constructive criticism and suggestions for improvements which were made there? We did not feel able to accept all the Amendments suggested, but they led us to review the Bill so as to ensure that it may achieve the limited purposes assigned to it, and we have been prompted by those suggestions to put down further Amendments which have been considered at the Report stage, to which I shall refer briefly.
I should first mention, however, the Amendment of the proviso in subsection (4) of Clause 5, which is designed to give the House that constitutional protection which is most desirable. I refer to the provision that where the Treasury certifies that it is inexpedient to lay the insurance accounts before Parliament the certificate shall be laid instead.
The Committee also agreed Government Amendments to Clause 2, having the effect that the Minister's powers to insure ships, aircraft, cargoes and goods in transit in war-time against risks other than war risks would be exercised only when this was necessary or expedient in the interests of the defence of the realm or the efficient prosecution of the war.
The Amendments which we have considered on Report, dealing with the reinsurance powers of the Minister and the definition of war risks will, I am sure, further improve the Bill. We are grateful to hon. Members opposite for drawing attention to the Clauses concerned.
I am sure that the Bill has been improved during its passage through the House, and that we shall now be able to place on the Statute Book suitable provisions so as to ensure that the machinery of war risk insurance could be brought into operation without delay should that unfortunate necessity ever arise. The principles of the Bill were agreed at an unopposed Second Reading. We have had a successful passage in Committee in which I gladly recognise the assistance of hon. Members on both sides of the House, and I now commend the Bill to the favourable consideration 1432 of the House in the fervent hope, which I am confident will be shared in all quarters, that it will never be necessary for Her Majesty's Government to provide these facilities.
§ 11.15 p.m.
§ Mr. Ernest Davies (Enfield, East)
The Parliamentary Secretary said that the purpose of the Bill had been made clear during its passage through the House, which is true, but what has not been made clear is why it is being introduced at this time. I and some of my hon. Friends said on Second Reading that we could not understand why priority was being given to the Bill, which facilitates re-insurance war risks.
It seemed to us that the Government were losing their sense of proportion and had a mistaken idea of priorities. They are inconsistent in rushing through a Bill to permit this type of re-insurance in case of war, indicating that they fear that there is a danger of war in the not-distant future, when, at the same time, they are cutting our defence expenditure, as was made clear in today's debate.
I agree that the Government have reason to congratulate themselves on getting the Bill with such comparative speed. It was introduced on 17th June and by today, 29th July, it will have gone through all its stages. The Government did not have to impose a Guillotine on this occasion.
It is regrettable that the scope of the Bill was narrowed by the Government in Committee. The Bill was on the stocks when the last Government left office, and, as a result, hon. Members opposite were a little suspicious of it, and their suspicions were, unfortunately, confirmed when one of my hon. Friends suggested that it was a Socialist Measure. Apparently the Minister and the Parliamentary Secretary then examined it with the greatest care and decided that they must clip its wings to prevent it from having any taint of Socialism. It was therefore narrowed in Committee and strictly confined to its original purpose of the insurance and re-insurance of British ships against war risks, both in peace and war, making provision also for foreign ships in war-time and for other matters.
In Committee, entry into marine insurance was limited to cases in which it was 1433 necessary in the defence of the realm or for the successful prosecution of a war. This is typical of the Government's approach to Measures. They have adopted the attitude that Government action should be taken only when normal facilities are not available. The Bill leaves the situation rather vague and, in my view, in the hands of the insurance market. In effect it means that the insurance market will decide when they are unwilling to carry the risks and, because of the difficulties which will then arise, the Government will have to enter the market. It will be difficult for them not to do so if the market indicate that facilities are not available or that they are unwilling to cover the risks.
This is typical of the outlook of the Government. They consider that it is right to leave private enterprise to take the profits when profits exist, and that the Government should relieve private enterprise of the obligations when they are unwilling to accept the risks. We had some discussion about this in Committee, when some of my hon. Friends and I pointed out that in our view the Government were in danger of being left with the poor risks while private enterprise would continue to carry the good risks. In other words, the Government would have the poor risks thrust upon them and would be in an unfavourable position by comparison with private enterprise.
As the Parliamentary Secretary said, we did not divide against the Bill on Second Reading, and we propose to give it an unopposed passage tonight. We appreciate the very flattering remarks which the Parliamentary Secretary made about Members of the Committee and the proposals which they made, and we are also grateful that he gave careful consideration to suggestions and has seen fit to incorporate some of them in the Bill.
The Bill, consequently, is a better Measure than when it left after Second Reading, but in our view it is still too limited and we cannot understand why it should be rushed through at this time. We say that because it seems that the prospect of any war in the future is such that it is very difficult to believe that normal insurance business could possibly be carried on. If, unfortunately, war should come, surely the situation will be that it will be essential for the 1434 Government to requisition all shipping and to operate it themselves, and that the insurance and reinsurance market, as we understand it, would not be in normal operation.
Therefore we think, as I said on Second Reading, that instead of rushing the Bill through the House at this stage, when there seems to be no real essential reason why it should have been introduced—particularly when the Government, apparently, have a great deal of other business which they wish to get through the House—they should have paused awhile and reviewed the whole possibilities of insurance against war risks and damage from enemy action in the event of a further war and seen whether some slightly different approach was not necessary.
However, the Government have decided otherwise, and all we can do in giving the Bill its Third Reading is to hope that our prophecies as to a future war will not be fulfilled and that the Bill will not have to be put into operation, and that it will be found quite unnecessary to have put it on the Statute Book.
§ 11.22 p.m.
§ Mr. Mitchison
I do not want to keep the House for more than a minute or two, but there are two things I should like to say. The first is that I welcome the thin end of the wedge. I should be out of order on Third Reading if I suggested how much thicker it could usefully be. It is really only a legislative recognition of the fact that ordinary insurance facilities are quite insufficient, not merely in time of war but in the extensions of the time of war—the approaches to, and the finish of, the time of war—to which we have just been referring. I feel certain that as time goes on the business of marine insurance will be taken over more and more by the public—the Government of the day—as a matter both of convenience and of necessity.
The second point is a quite short one. The Parliamentary Secretary will excuse me, after the very courteous interchanges we have been having, if I suggest that he is quite wrong in what he said about one Clause in the Bill and about what he supposed to be my own comments on it. I refer to Clause 7, which does not merely refer to certi- 1435 ficates but also refers to re-insurance treaties.
I have no objection whatever to the Clause so far as the Minister is concerned, but I have the strongest objection to the fact that it does not extend to other insurance. The scandal is that re-insurance treaties at present are illegal, and it requires this Clause to make them legal in this particular case. Instead, the matter ought to have been considered as regards the insurance market generally, and not merely for this very narrow purpose. It might be found that considerable benefit would accrue to the Revenue by stamping instruments which cannot at present be legally stamped.
§ Question put, and agreed to.
§ Bill accordingly read the Third time, and passed.