(NO. 43.) SECOND READING. (Hansard, 5 May 1868)

§ THE EARL OF LICHFIELD
, in moving that the Bill be now read the second time, said, that great misunderstanding appeared to have prevailed respecting the 3rd clause of the Bill, petitions having been presented against it from many societies, one of them having 500,000 or 600,000 members, and another upwards of 100,000 members. It appeared to him from a careful perusal of these petitions that the object of the clause had been purposely misrepresented. The 1776 evils arising from the admission of children under a certain age into these societies had been brought prominently before the public by proceedings in the police courts, from which it appeared that, in some cases, persons insured the lives of the children of their fellow-lodgers in order to obtain the burial money in the event of the death of those insured. The 3rd clause did not in any way interfere with the provisions of the 9th clause of the present Friendly Societies Act—the 18 & 19 Vict. c. 63—by which it was expressly provided that members of Friendly Societies should have the power of insuring the lives of their children for the purpose of securing a sum sufficient to defray the expense of the funeral in the event of their death; and the 15th clause empowered minors to become members. He was not prepared to say that he sought for any interference with this system, if parties chose to carry on that description of business; but, at the same time, he could not refrain from saying that such operations were not contemplated at the time of the passing of the Friendly Societies Act. One of his objects was to carry out what he believed was the true sense of the 18 & 19 Vict., which was merely to recognize the power of members to insure their children's lives in the society to which they themselves belonged. The 5th clause of the Bill was intended to prevent the transfer of members from one society to another without their express consent. It often happened that members were transferred from one society to another without being aware that such transfer had been made; and as the collector did not call for subscriptions due to the society to which the member transferred was in the habit of contributing, he found himself "out of benefit" in it, while his claim on the new society was often found invalid in consequence of his not having been properly admitted. The next point to which his Bill referred was the forfeiture of benefits—a thing which frequently occurred in consequence of the failure of the collector to call for the subscriptions of members. It appeared only fair that a member should not forfeit his claims on his society without distinct notice that forfeiture would take place if arrears were not paid by a certain time. The Bill next provided the means of a more certain and speedy redress in cases of dispute between the members of these societies. The difficulty of obtaining redress in ordinary Friendly Societies was 1777 very great; but it was vastly increased in the case of burial societies. The members were often scattered over the whole country, and the redress provided by the rules was arbitration in the place where the society's business was carried on; and where a society had branches in almost every town it was often necessary to go to headquarters in order to obtain redress. The Bill proposed that redress should be had by members proceeding against the collector or agent in the place where the members lived. There was a clause which prevented a society enrolled or registered under the Friendly Societies Acts from being incorporated under the Companies Act, 1862. At present members frequently found that, without their consent, the Friendly Society to which they belonged had become a company, and they thereby lost all the privileges to which they would be entitled under the Friendly Society, he would now call their Lordships' attention to the petitions which had been presented against the Bill. Their Lordships were aware that there were in this country numerous Friendly Societies, admirably conducted, and doing most useful work among the labouring classes. The Odd Fellows and the Foresters numbered respectively 400,000 and 200,000 members, he desired to call their attention to the manner in which the petitions which had been presented against the Bill had been got up. A circular had been issued by the President of the Liver Society, which described the Bill as an attempt to curtail, crush, and destroy Friendly Societies and working men's clubs, and to place them entirely under the control of a paternal Government. Another circular had been sent out by the secretary of a different society, urging its collectors and agents to get up petitions signed by all persons above fourteen years of age, on the allegation that the Government were attempting to set up a system of assurance themselves, and to rob the poor by taking from them the management of their own affairs. In this case the petitions came from societies in which it could not be said that the members had any voice in the management; they were managed by committees composed only of collectors and agents in the different places where the members resided. Three societies which had presented a large number of petitions against the Bill were the Royal Liver, the Victoria Legal, and the United Legal. It appealed from official Returns printed 1778 for the House that, in a considerable number of cases, the expenditure of Friendly Societies amounted to considerably more than the income; but in that list the Liver Society and the Victoria Legal did not appear. However, from inquiries which he made, he found that the income of the Liver was £140,000 a year, the management expenses £53,000, and the funds in hand £117,000. That Society, which was established in 1850, had more than 600,000 members. He would call their Lordships' attention to the fact that the funds in hand were considerably less than one year's income; and all actuaries concurred in stating that any society which had been in existence only half the time of the Society he had just named, and had not a reserved fund of more than one year's income, must inevitably be insolvent. With regard to the Victoria Legal Society, he found that many returns called for with respect to that Society had not been filled up; but, according to the last annual report of the Society, it appeared that the last year's income was £28,431. The expenses and sums paid for burials were placed in one lump sum at £24,140. Thinking that there was something extraordinary in the manner in which the accounts were made out, he referred them to two persons of great experience, who confirmed his conviction that the accounts were clearly inaccurate; and an actuary of great experience had since stated, as the result of his experience, that there was an inaccurate statement in respect to no less a sum than £1,400. The funds in hand belonging to that Society amounted at the present moment to exactly; half a year's income. That Society was established in 1843. The other Society petitioning against the Bill had among its honorary representatives a Member of their Lordships' House, who concurred with him in thinking that the expenditure of the Society was extravagant. These three Societies not only petitioned against the Bill, but prayed to be heard against it—a proceeding which simply meant that statements might be made by the various collectors employed by the Societies as to what they considered the importance of the business carried on by the Societies. One of the clauses of the Bill, bearing on all societies alike, was to the effect that in all cases where a person was admitted a member a policy should be given to him, and also a copy of the rules. He found that this clause also had been petitioned against; but he had mentioned the matter to a depu- 1779 tation which he had received from the Odd Fellows' Society, and he found that there could be no practical difficulty in giving such policies. He thought that their Lordships would see that it was the right of members of these societies to have something to show what their claim really was upon the society. He knew that it frequently happened that persons who had interested themselves for complaining members found that these persons had nothing to prove what their claim upon the society was, or to show what proceedings should be taken. The next point provided for by the Bill was that the Annual Report, or General Statement of the Funds and Effects required to be made to the Registrar under the Friendly Societies Act of 1855, should be made before March, instead of before June, in order that more time might be allowed for taking proceedings, in the event of any proceedings appearing necessary in consequence of irregularities in the accounts. The Bill also required a detailed statement of accounts to be made, specifying the sources from which the income was derived. The Bill also provided for an audit of accounts. He was perfectly well aware that great difficulty attached to any action taken with the object of providing for the auditing of the accounts of those societies; and he did not for a moment mean to contend that the Government should take upon itself so great a responsibility as the duty of seeing that their rules were sufficient, and ascertaining from time to time that they were solvent would involve. He was, however, of opinion that the mere publicity which would be given to the state of their affairs by means of the audit provided for by the clause, under the authority of a County Court Judge, would have the best possible effect in the way of warning persons not to going a society which was shown to be in an unsatisfactory position. He came in the next place to two clauses, the 9th and 10th, which related to affiliated societies, such as the Odd Fellows and the Foresters. The 9th clause had been framed expressly for the purpose of facilitating the operations of those societies, by saving them the trouble and inconvenience which were the consequence of their being obliged to have the rules of their different branches and lodges throughout the country separately certified; but, as he understood there was some objection to the chaise on the part of these affiliated societies, he should offer no opposition to its being withdrawn. The 10th clause, be 1780 might add, was meant to give a greater amount of control to the societies to which he had referred over the small branches and lodges which formed a portion of the great whole. It appeared that when the lodges connected with any of those large affiliated societies refused to comply with the rules of the central body, although that body might declare those lodges to be no longer connected with it, the responsibility still rested with it of providing a certain amount of support for some of their members under the operation of the general rules. He would therefore provide that in the event of a lodge being separated from the main society, under the circumstances which he had described, a County Court Judge might make an order that the interest of a member in that lodge should be handed over to the central society, the society taking upon itself the responsibilty of that member's support. He thought that all the provisions of the Bill were well considered with reference to the great object of promoting those habits of frugality among the working class the expediency of which was universally recognized. He now asked their Lordships to read that Bill the second time, he having already assented to an appeal that had been made to him to allow it to be referred to a Select Committee. At the same time he must repeat what he had said the other day, that he attached the greatest possible importance to the Select Committee, if it were appointed, confining itself strictly to the clauses of the Bill, and not going into the general question of Friendly Societies in all its bearings. A subject of such magnitude, and so vitally affecting the interests of the working classes of this country, ought to be fully and searchingly investigated; and it would be worse than useless for their Lordships to attempt to do that in a Select Committee. That very wide question could be properly inquired into only through a Royal Commission, having power to scud sub-commissioners into all the large towns of the country, in order to obtain on the spot evidence and information for which they must look in vain in a Select Committee.

§ THE EARL OF HARROWBY
said, he had been entrusted, for presentation to their Lordships, with a number of petitions emanating from the class of societies on which the noble Earl had commented, but 1781 which he was prevented by the forms of the House from presenting at that stage. It was not for him, without an investigation, to contradict the noble Earl's statements in regard to those societies. No doubt the charges for agency and management of Friendly Societies were often heavy; but, on the other hand, it was stated by the parties, that, when they came to carry on transactions of a very minute character, receiving pence from poisons who were scattered over a wide area, a very considerable percentage must be expended on collection. But the point to which he wished chiefly to call the noble Earl's attention was this—the noble Earl told them that the whole question of Friendly Societies required a fuller investigation than it could have before a Select Committee of that House, and that he hoped a Royal Commission, for which he intended to move next year, would be appointed to inquire into the whole subject. There were, he understood, ten Acts of Parliament already in existence on that subject; and he should therefore like to know on what ground the noble Earl now proposed to add an eleventh Act to them before the investigation which he desired had taken place into the whole question.

§ THE EARL OF MALMESBURY
said, he thought that very great credit was due to the noble Earl (the Earl of Lichfield) for the interest and trouble he had taken on a subject of vital consequence, he might almost say, to millions of persons in this country. No one was more anxious than he (the Earl of Malmesbury) was to see so important a question placed on a footing satisfactory to the Legislature and the classes who generally constituted the societies. Yet he could not help being struck, like his noble Friend who had last spoken, by an apparent contradiction in the statement of the Mover, who had said that a vast amount of information was still required on that subject, and that that information could be obtained only by means of a Royal Commission. Now, that seemed to be a good reason for postponing, until after a Royal Commission had reported, legislation on a subject, relating to which, as he was informed, there were not ten or eleven, but twenty-four Acts on the Statute Book. He would, therefore, suggest that the noble Earl, for the very reason he himself had given, that having made a very able and ample statement to the House, and thereby brought the subject before the public, he should wail till another year, 1782 hoping that a Commission might be appointed to investigate the whole question; after which he might proceed if he thought fit—and nobody would be more able to do so — to bring the matter to a satisfactory issue.