SECOND READING. (Hansard, 8 July 1875)

§ EARL BEAUCHAMP,

in moving that the Bill be now read the second time, said, the task of anyone who attempted to deal with this question was simplified by the very exhaustive Report made last year by the Royal Commission appointed in 1870 to consider the whole question. The subject was one of very great importance, because, if the working classes could be induced to adopt provident habits, not only would individual happiness be promoted, but the public burdens would be diminished. The magnitude of the interests involved in Friendly Societies might be judged from the circumstance that there was a strong presumption that in England and Wales alone there were over 4,000,000 members of such Societies, independent of as many more, the wives and children of members, who were evidently affected by their failure or prosperity. So that there were upwards of 8,000,000 of persons interested in this question. Of these, he was informed, one-tenth were represented by the Manchester Union. There were, he might add, 32,000 of these Societies, registered and unregistered, having in hand funds amounting to over £11,000,000, and the Commissioners, in their Report, stated that no less than £2,000,000, were saved to the ratepayers owing to their existence. The Commissioners divided Friendly Societies into 17 classes, each differing from the rest in the details of organization. They were instituted for various objects which were set forth in their various reports—such as providing for the funeral expenses of the wives and children of members, and the maintenance of members in old age—for which some of these Societies deposited their rules, others had their tables certified by an actuary, far the largest portion, however, having their rules certified by a Registrar. [Having read at length passages from the Report of the Commissioners setting forth the various objects, rules, and constitution of the Societies, the noble Earl continued]—Seeing the position and privileges of those Societies, there was, he contended, no injustice on 1126 the part of the State in attempting to regulate the mode in which they should be conducted, especially when it was borne in mind that much of the control which was exercised over them by the Registrar was simply illusory. The object, then, of the present Bill was to increase that control, for, as matters stood, the deposit of the rules failed to secure the purpose for which it was designed, and in no case it appeared did the reality correspond with the intention. In 1870, a measure was introduced into the House of Commons by Mr. Lowe, who was then Chancellor of the Exchequer. That Bill proposed to deal with all Friendly Societies, including Trade Societies, and in that respect differed from the present measure, which dealt only with Friendly Societies properly so-called. Mr. Lowe's Bill proposed to withdraw the control of the State over Friendly Societies, which were substantially to be converted into companies. With that course he did not agree. There might at that time have been strong ground for such a proposal, but since then circumstances had changed, and it was clear that the best method of dealing with Friendly Societies was to render registration more efficient and to bring them more under control than at present. The existing system of registration was practically worthless, for a "certificate" denoted nothing but that the Society had been registered, and gave no guarantee as to its soundness. This Bill therefore proposed to abolish the "certificate," and all Societies which had duly complied with the requirement of this Act would receive a simple acknowledgment of registry, and their legal existence would be recognized. The result would be that all Societies registered would come under the Act, and be unable to alter their rules without the sanction of the Registrar. It was calculated that 23,000 Friendly Societies would be brought within the grasp of the Act; and Clause 14, which was the most important in the Bill, defined the duties and obligations of registered Societies. It provided that every registered Society should have a registered office; that trustees should be appointed; that there should be an annual audit, either by a public auditor, or by two or more auditors appointed by the Society; that there should be sent to the Registrar on the 1127 1st June every year an annual return of the receipts and expenditure, funds and effects of the Society; that there be made to the Registrar a quinquennial return of sickness and mortality during the preceding five years; and further that there should be every five years a valuation of the assets and liabilities of the Society, to be valued by a valuer appointed by the Society, and transmitted to the Registrar, who might cause the return to be valued and reported on by an actuary, and transmit the result of the investigation to the Society. The liberty granted to Societies to provide their own auditors was, perhaps, not perfectly satisfactory in itself; but all the leading Societies were making great efforts to put their affairs on a thoroughly sound footing, and they would no doubt largely avail themselves of the facilities which were offered for having the services of a public auditor. In this movement the Manchester Unity, which comprised over 400,000 members, administered large funds, and had a very effective organization, was taking the lead; and, indeed, if all Societies displayed the same amount of public spirit as that great body there would be no need for the Bill, and what the Bill sought to do was to give to every Society facilities for becoming equally good. It might be asked why, in dealing with the registered Societies, they did not deal more stringently with the unregistered Societies over which at present they had no control? But the Bill did deal very largely with that class of Societies. A limit was put upon the amount for which assurances on the lives of children could be effected in Burial Societies; and it was further provided that no payment should be made in respect to the death of a child without the signature or counter-signature of the Registrar of Deaths being attached to the medical man's certificate. Moreover, a check was also imposed on the multiplication of assurances of infant lives in different Societies, with a view to guard against existing evils. In the case of the" collecting Societies" likewise there were some stringent provisions to prevent abuses. In return for being subjected to those restrictions, Friendly Societies would obtain various advantages, among which were greater freedom of investment, open nominations, the power of authorizing officers to be sued instead of 1128 trustees, and an improvement of machinery generally. Though the Bill was founded on the Report of the Commissioners, it was right to say that their recommendations had in some respects been departed from; but those were matters more suited for discussion in Committee than on the second reading. There were reasons which made it especially desirable at the present time to legislate in reference to those Societies, which had now been known to the law for about a century. The wages, not of the skilled artizan or the miner only, had of late years greatly increased; but the earnings of the agricultural population, and, indeed, of the working classes generally throughout the country, had also been largely raised, and it was to be hoped that with the spread of education there would be an increased disposition on the part of the working classes to lay by a portion of their earnings. It was therefore all the more necessary to stimulate thrift, prudence, and above all a sense of independence among those classes, and also, as far as possible, to place their organizations for self-help on a proper and an enduring basis. He thought that if they succeeded in passing a measure which would give the working classes increased facilities for safe investment, diminish the public burdens, and stimulate industry and habits of economy, they would greatly increase the happiness of the subjects of the Queen.

§ LORD ABERDARE

said, he thought the noble Lord, without wasting time in going through the provisions of the Bill, had compressed a great deal of very valuable information in a very small compass. He desired to offer a few observations on the measure now before their Lordships, which he regarded as possessing some disadvantages as well as advantages. It might be difficult to answer the arguments of those who thought that the State ought not to meddle with those institutions, except that there existed a strong desire on the part of the Societies themselves that the Government should interfere to a great extent. On the other hand, there were those who were in favour of a much larger measure of interference than that now proposed. His notion 1129 was that it would be well that a separation should be made between Societies which were established for the benefit of its members on a large scale and Burial Societies, which allowed the insurance of small sums for the purpose of meeting an occasional expense. Again, of the larger Friendly Societies there were two classes—one local, and the other carrying on business by means of collectors in counties distant from the central office. These latter societies comprised 500,000 members, and very naturally, considering their enormous extent, many evils had sprung up in connection with them. The evils were not confined to faulty management; in the minds of the Commissioners there had been a distinct conviction that the operations of the Burial Societies had a tendency to increase infant mortality. An evidence of the strength of this conviction was their recommendation that there should be no insurance of children who were under three years of age. "With respect to the question of infant life, he confessed it was surrounded with great difficulty. In the large towns where these Societies existed there was a large amount of infant mortality which could not be explained on ordinary grounds. On the other hand, much of it seemed to be preventible. He did not impute to the working classes in general an indifference to the health of their children, but there could be no doubt that in some circumstances which were not of infrequent occurrence, the fact of the lives of the children being insured had a tendency to bring about that indifference. There was evidence that the Act of 1858, which limited the amount for which those lives might be insured, had had a beneficial result in this respect. Any Bill which was now passed ought to have for one object a still further diminution of the evil. Not wishing to go the length of the recommendation of the Commissioners, Government at first proposed to limit the amount of insurance in such cases to 30s. or 40s.; but, yielding to representations, they fixed it in the present Bill, as originally submitted, at £3. While the measure was under discussion in the other House, they consented to raise it to a still higher figure. They had therefore been driven by the action of the Societies from position to position, and it was for their Lordships to con- 1130 sider whether it would not be wise in this matter to adopt some middle course. In his opinion, the sum ought to be one which would cover the legitimate expenses of the funeral and leave no margin. It was admittedly desirable to prevent multiplied insurance, but it seemed to him there was nothing in the Bill which would keep persons from going to distant Societies and insuring the lives of their children as often as they pleased. In reference to the subject of registration, he regretted that one of the recommendations of the Commissioners had not been acted on—namely, that the Registrars should be prepared not only to perform the executive duties of their office, but to offer advice in certain cases. He thought, however, while the Registrar should be prepared to give advice to those having the management of these Societies, yet that he should not go too far and interfere too largely with the self-government of these institutions. Thus, for instance, where the rules of a Society were beyond all question bad, and certain to bring the association to an untimely end, the Registrar should call the attention of the managers to the fact; but he should not be called upon to frame fresh rules for their guidance. The proposal that the central office should publish tables for the use of these Societies entirely met with his approval, because he had no doubt that such tables would be prepared by those who had a thorough knowledge of the circumstances of the men who joined these associations. But while it was important that correct tables should be framed, it was impossible that the Government should insist on their adoption. He believed that it would be possible, without giving alarm to the Societies in reference to undue interference, to strengthen provisions for a better audit and valuation. He thought that the Registrar should have power to refuse to act upon an audit that he knew to be unsatisfactory. No doubt, some of the great Societies, like the Manchester Unity, the Foresters, and others, had greatly improved their position without the assistance of the Government; but still Societies, like individuals, were apt to shirk the duty of looking into their affairs. He regretted that the Bill did not attempt to carry out the recommendation of the Commissioners by extending the system of the 1131 Post Office Deferred Annuities, the advantages of which Mr. Scudamore had endeavoured to make known to the working classes. He considered the Bill a substantial improvement upon the existing state of things, and only regretted that in some directions it did not go further.