Lords Sitting of 11 December 1911

Preamble
The Earl of ONSLOW—Sat first in Parliament after the death of his father.
The Lord DELAMERE—Took the Oath.

SHOPS BILL
Brought from the Commons.

MAXWELL'S DIVORCE BILL. [H.L.]
PILKINGTON'S DIVORCE BILL. [H.L.]
Returned from the Commons, agreed to.

BURGH POLICE (SCOTLAND) AMENDMENT BILL.
Return showing the Amendments proposed to be made in Section 82 of the Burgh Police (Scotland) Act, 1903, by the Bill: Ordered to be laid before the House (The Lord Pentland).

NATIONAL INSURANCE BILL.
Petitions against; of the Council and Committee of the British Constitution Association, of No. 11, Tothill Street, London, S.W.; read, and ordered to lie on the Table.
Petitions for amendment of; of persons signing; read, and ordered to lie on the Table.

SHOPS BILL.
Read la; to be printed; and to be read 2a on Thursday next (The Lord Ashby St. Ledgers). (No. 240.)
BURGH POLICE (SCOTLAND) AMENDMENT BILL.
Return respecting: Laid before the House (pursuant to Order of this day), and to be printed. (No. 241.)

BUSINESS OF THE HOUSE.
THE LORD PRESIDENT OF THE COUNCIL (VISCOUNT MORLEY): My Lords, I beg to move the Motion standing in my name.
Moved, That Standing Order No. XXI be considered in order to its being suspended, and that for the remainder of the Session all Government Bills which are entered for consideration on the Minutes of the day shall have, precedence of other Bills and Notices.—(Viscount Morley.)
On Question, Motion agreed to, and ordered accordingly.

PIER AND HARBOUR PROVISIONAL ORDER (No. 4) BILL.
THE EARL OF GRANARD: My Lords, before asking your Lordships to suspend the Sessional Order as regards this Bill, it is only right that. I should state the reasons which make this Motion necessary. The negotiations with regard to the Bill have been very difficult. The local inquiry was held as far back as March. 23 last, but no Order could be made before June 29. The Bill was introduced in the House of Commons on July 21, and since then no time has been lost with regard to it. The Board of Trade are very anxious to complete the Order, winch has been an unusually difficult one but is now not opposed. I venture, therefore, to ask your Lordships to make an exception in this case and allow me to move the suspension of the Sessional Order so far as this Bill is concerned.
Moved, That the Order made cm the 29th day of March last. "That no Provisional Order Confirmation Bill brought from the House of Commons shall be read a second time after the 4th day of July next," be dispensed with, and that the Bill be now read 2a.—(The Earl of Granard.)
LORD BALFOUR OF BURLEIGH: My Lords, this is a very unusual request, even after the explanation of the noble Earl. It seems to me that a great deal of time has been lost. Apparently the Bill was not introduced into the other House until nearly three weeks after the time when it ought to have been read a second time in your Lordships' House, and it does not seem to me that in these circumstances we should suspend our Sessional Order at

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this late period of the session. The House resolved that no Provisional Order Confirmation Bill brought from the House of Commons should be read a second time after July 4. and yet on December 11 it is proposed to read this Bill a second time. If you are going to allow such a long interval to elapse, I do not see the use of retaining the Sessional Order.
THE CHAIRMAN OF COMMITTEES (THE EARL OF DONOUGHMORE): My Lords. I am glad the noble Earl in charge of the Bill and the noble Lord opposite have drawn attention to this matter, because it does at first sight look a little unusual that your Lordships should be asked to suspend the Sessional Order in the case of a Bill which was only introduced into the other House after the date at which, by our Sessional Order, it should have been read a second time here. But the ease is a little exceptional, and I think your Lordships would do well to suspend the Sessional Order in this case and allow the Bill to go forward in the ordinary course, and, if your Lordships pass it, receive the Royal Assent at the end of this session. The fact is that the Order was lodged at the end of January, as is usual. The local inquiry commenced at the end of March, which, as a matter of fact, was only a fortnight after the usual time, and I understand that it was owing largely to geographical difficulties that delays took place which resulted in the Order being introduced at so late a period in the other House. But what really has delayed this Order more than anything else is this. There were two Orders originally in this Confirmation Bill. The other Order was opposed, and the opposition to that Order, which has been dropped, resulted in this Order, which is unopposed, being delayed. If this Order had been in the Bill by itself the Bill would probably have reached your Lordships before we adjourned in August, when no question would have been raised as to the propriety of suspending the Sessional Order. These being the facts, I think your Lordships would do well to agree to this Motion now, having entered a caveat that it is not self-evident that a Sessional Order made in July should necessarily be suspended five months afterwards on a Bill which only reaches your Lordships in December.
On Question, Motion agreed to: Bill read 2a accordingly, and committed for To-morrow.

NATIONAL INSURANCE BILL.
[SECOND READING.]
Order of the Day for the Second Reading read.
THE SECRETARY OP STATE FOR WAR (VISCOUNT HALDANE): My Lords, I do not think that I should be either assisting your Lordships or consulting your convenience were I to begin with a disquisition on the value of national insurance. The subject has been before the mind of the country for many months past, and I think a considerable distinction is drawn between the general principle and the form in which it may be embodied. The great majority for this Bill on its Third Reading in the other House last week shows that, so far as the general principle is concerned—and I allude to no more than the general principle—the mind of the country is fairly well set upon it, and therefore I propose to go straight to what is the real question before the House to-day, and that is, whether my right hon. friend the Chancellor of the Exchequer has well and truly laid the foundation on which a system can be reared.
Before I go to the discharge of a duty which I hope to compress within a reasonable time, there is one thing I should like to say. I regret as much as any of your Lordships can the fact that this Bill comes up for consideration at so late a period of the session, for in this House there are many who, from their knowledge of local government and from other fields of experience, would have been well able to contribute to a minute scrutiny of the provisions of the Bill. But the measure comes before us at a period when that is not possible and the only alternatives are o to put it off for a prolonged period, or else to deal with it without the opportunity for that discussion which a subject so important merits. It might be well, it might be the ideal course, to postpone for a prolonged period—and it would need to be a prolonged period—the examination of this measure: but there is a well-known French proverb which says that the best is the enemy of the good, a proverb which I think applies here. Suppose we were to delay the passing into law of this Bill, what then? The position of the friendly societies in particular would be deplorable. The very fact that the public has given practical consideration to the new system, and that Parliament is a fair way on in

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passing it through, has led to a great transformation already in the situation of these societies. Their members are falling off in number because new entrants are not coming in. As always happens, people are waiting to see what fresh system is going to come into operation, and they are suspending their natural habit of joining these societies in large numbers. Therefore in the interest, not only of the friendly societies, but of all the great business bodies which have to deal with this matter, it would be truly an unfortunate result if the period of suspension were prolonged.
But there is another consideration which I own weighs with me very much. This Bill can only, to use an expression which I have already used, lay the foundation. The example of Germany is highly instructive on this point. The great system which came into existence more than a generation since, under the auspices of Prince Bismarck, had been considered with all the capacity of that highly scientific nation, never given to launching a scheme without having in the most careful fashion thought it out beforehand. And what has the experience of Germany shown? The great majority of the people of Germany thoroughly approve of the system, and say it has proved to be a great blessing; but the history of the question shows that almost from the first the experience of the new system disclosed the necessity for the transformation of the original ideas, with the result that in Germany, within the limits that were originally laid down, and as experience has progressed, modification after modification has been made in the system; and even to-day great modifications in the German system appear to be impending. Therefore I say of this Bill that it can be no more than the providing of the ground on which a system is to be reared, with regard to which it is necessary to proceed experimentally, and as to which it is impossible to say that any particular scheme is best without the guiding assistance of experience. All that can be done is to determine the limits within which you will proceed, to ascertain in as careful a manner as possible the various factors of financial safety, and, having done that, to proceed tentatively, with the certainty that in a few years as experience goes on you will have to remould your system in many points, and that it is only experience which can guide you to the final form which it must ultimately assume.
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The task of the Chancellor of the Exchequer has been a very difficult one. He had to deal with an entirely new conception as to which there was very little experience to guide him, and however much my right hon. friend may have excited criticism as to details, I think nobody can doubt that he has thrown into this matter an energy and devotion and a command of his material which are remarkable in the case even of a Minister introducing a very great reform. And what your Lordships, I take it, have as the real question before you to-day is not this and that detail, but whether the framework which he has fashioned, financial and administrative, as well as legislative, is a sound framework, and one within which and upon which you may build up the edifice which we are aspiring to construct. With these remarks I pass to what are the purposes and principles of the Bill. If I wanted to define its object in a sentence, I would say that that object was to introduce among the majority of the working classes the habits of providence which distinguish a large minority, but still a minority, at the present time. There will always be an aristocracy of labour who will be content with nothing short of things that go far beyond the benefits which even this Bill will confer. Those who know the working classes are aware of the extraordinary extent to which they effect insurances, not merely in friendly societies and trade unions, but with the great industrial companies and the insurance societies of the country. It is a system which I am glad to say is progressing with the progress of the working classes; but apart from those who make special provision there is a large number who insure something like the benefits of this Bill. At present about 6,000,000 of those who work with their hands provide against sickness. We hope by the machinery of this Bill to raise that number to something approaching 15,000,000—to cover practically the whole field of those who work with their hands.
The Bill deals with the two subjects of sickness and breakdown, and in a minor but still a very important degree with unemployment. I shall say more about sickness and breakdown to-day than about the other subject, because, following the course which was taken in the other House of Parliament, my noble friend Lord Beauchamp will take charge of the unemployment section of this Bill, and therefore it is only very generally that I shall deal with the provisions relating to unemployment. The system that the

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Bill proposes to introduce is, even as regards health, a limited one. We do not touch death for the good reason that the field of insurance against death is well covered. There is an extraordinary number of policies against death current among the working classes, quite enough to make it unnecessary and inexpedient to touch that side of the case, because I must remind your Lordships that the purpose of this Bill is not to supersede the friendly societies, not to do work which they are already doing, but greatly to expand their work and to introduce their operations into ground which they do not at present cover. Therefore we do not touch death. But there is another object which the Bill aims at effecting indirectly, and that is the object of preventing disease instead of merely providing for it. At the present time it is admitted that something like 30 per cent, of the pauperism in this country is due to sickness. Consumption alone effects tremendous ravages among our population. Some 300,000 people every year are always ill with consumption in these islands, and about 60,000 die from it every year, with an average previous life of not more than live years since the disease began to make itself manifest. Therefore we have there a tremendous problem in prevention, and I hope to show your Lordships that the Bill does a great deal, not merely to provide for sickness when sickness has once set in, but to prevent sickness arising at all. And the machinery we set up will introduce better inspection, greater care, and motives of prudence which do not at present exist, and if that were the only result which the Bill would effect it would be well justified.
I now come to the machinery of the Bill. The first question I have to answer is, What are the principles on which the machinery rests? The first principle is one which I need not discuss at length—it is the principle that to make a system of this kind effective it must be compulsory. All experience shows that, and this proposition has been so generally accepted after a great deal of discussion that I do not propose to trouble your Lordships by going into details on that point. The next principle is that the system should be contributory. That is a phase of this scheme to which, speaking for myself, I attach very great importance. I believe that every system of insurance, whether against old age, against sickness, or against death, is far better if placed, so far as you can place it, upon a
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contributory basis. I may be asked, Why, then, did you not put old-age pensions on a contributory basis? My answer to that is a very simple one. The class we were seeking to provide for under the old-age pension system was a class which in the main had had no opportunity of providing for itself, a class which was upon the very margin, a class of people who had spent their substance during their working lives on their families and dependants, and who came to old age without a chance of making any provision. But this Bill does introduce the contributory principle even as regards old-age pensions. When I come to explain the system of additional and extension benefits which the Bill contemplates, your Lordships will find that among those are an increase to the existing old-age pensions and an acceleration of them, both dependent upon a contributory basis; and I think it is all to the good that the contributory system should be so extended that it can touch even this class of benefits.
The third great principle of the Bill is to use not the machinery of the State, but that of the friendly societies. The friendly societies have this enormous advantage, that if you work through them you have a state of things in which every member is interested in getting the utmost for his money, in keeping down false cases, in excluding cases of malingering, in encouraging habits of carefulness and prudence such as obviate sickness, and it is the esprit de corps of the friendly societies and their watchfulness in this direction that is your greatest safeguard against malingering. We were led to that consideration by the experience of Germany. The splendid system of Germany has had the one defect that the tendency is for the rate of sickness, of apparent sickness I should say to rise, and for malingering to make itself manifest. That comes, we think, in a considerable degree from the fact that the responsibility for looking after these things is in Germany mainly centralised and with the State. In Germany there are local funds, but they are under close supervision and highly centralised State management. The result is that there is not the same direct motive as with the friendly societies to deal with cases of malingering, or to take those steps and give that counsel which tend to reduce the rate of sickness. In Germany, too, the system has got into the hands of the State in a complicated form that we do not desire to see here. For instance, disablement is

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under a separate authority from sickness, and old-ape pensions are mixed up with disablement and sickness. In Germany there are thirty-one pension offices and ten-trades institutions, and there are varying rates of contributions and varying rates of benefit.
The result of the consideration of this most valuable German experience—and I think the world owes a great deal to Germany for the lesson it has taught in being the first to fashion out a system of national insurance—is that we do well, if we can, to give the people themselves a direct motive to look after each other and to guard against imposition, and on the other hand, to get the most for their money. What I have stated to your Lordships is a root principle of the Bill. Our intention is that the Insurance Commissioners should not look upon themselves as there in any way to supersede the friendly societies, but rather 1o encourage them in every way to develop their own business. We wish the friendly societies not only to take on the vastly increased business which we are asking them to assume, but also to conduct their own business with extra benefits outside what this Bill contemplates in their own fashion. The last thing we desire is any way to say, as some have said, that the day of the friendly societies is over. On the contrary, I hope that friendly societies are opening a new and still more important chapter of their history—a chapter in which their functions will be greater and more important than has been the case hitherto. Everybody who has had to do with these societies knows the spirit of mutual watchfulness which the members exercise over each other. If a man has a tendency to drink, which affects the increase of his sickness allowance, he is at once called to book, and I am told that the friendly societies exercise great pressure in the interests of temperance. Then take the case of a servant who is suffering from anæmia, a disease which is said to result from a too confined indoor life. The friendly societies watch over those cases, suggest a change of situation, and do an amount of detail work of that kind which is of vital importance if you are to keep down the rate of sickness. Those are the three great principles of the Bill. Now I come to the machinery by which they are to be made effective.
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At the root of this Bill and at the root of every scheme of this kind lies finance. Unless the financial system on which the Bill is based is sound the scheme must fail, and really if I were to select what seems to me to be the most vital point in this Bill I should say it is the financial system which it embodies. That financial system is one which has received the closest attention for a good while past from the best experts whom the Chancellor of the Exchequer could collect. Not only have some of the most distinguished actuaries in this country, actuaries specially connected with the work of friendly societies, been engaged upon it, but the experts at the Treasury have been giving prolonged attention to the subject, with the result that a scheme has emerged which I hope when your Lordships hear what it is—and you know a good deal of it already—you will think represents at all events the most prudent course that could have been adopted, and one which lays down limits beyond which the financial results of the scheme cannot stray. If the financial system is sound, we have got our factor of financial safety. We have got limits outside which the scheme cannot naturally expand. I will ask your Lord ships' indulgence while I say a few words about this root consideration.
Three courses were open to the Government in face of the difficulty which confronted them. They wanted to bring everybody compulsorily into insurance, but then some of these people were old and some were young. If you brought them all in compulsorily, you would have had to bring them all in at the same rate of contribution, or you would have had to find money in the shape of doles to equalise the contributions. To something like that we have ultimately come, but in a very different form. That would have been a most clumsy and complicated alternative. The only other alternative to the one which was ultimately adopted was this, to equalise the position of old and young members under the, insurance system by making a large grant in respect of each person. As a matter of fact, the sum would have been £63,000,000 sterling to put every life on the same footing. That did not seem a justifiable way of going to work. The third course is the one we have adopted, arid it is this. Every person who comes into compulsory insurance and is over the minimum age will have what is called a reserve credited

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to him. Take the position of a man of 40. Sickness begins to become more frequent as you get on in life. Therefore to insure against it you have to pay more if you start your insurance at that time. But if you have been in insurance from the age of 16, the minimum age, then your contributions have rolled up over a period in which there is less sickness, and they provide you with a reserve which enables you to say at 40, "I have contributed all these years since the age of 16, therefore my contributions are adequate to enable me to reap the fruits of the ordinary benefits, notwithstanding that with me sickness is likely to be more than in my earlier days." What we had to do was to put the man of 40 in as good a position as the man at 16. The man of 16 is making a fixed contribution, the man of 40 is making exactly the same contribution, but we had to provide the man of 40 with the same reserve as he would have had to his credit if he had been in insurance since the age of 16. The way in which that is done is that the State gives, through the Insurance Commissioners, to each man insured a credit appropriate to his age. In the case of the man of 40 it is larger than in the case of the man at 30, and so on. The man of 16, of course, requires no credit because he has come in at the initial age.
Now, how is the money for that to be provided. It is a credit in each case from the State on which the friendly society can draw. It can treat the man as having at his credit the amount of that reserve and draw for his benefits. It is done in this way. We have divided the benefits into three classes. The first class are what are called the minimum benefits. If your Lordships look at Clause 8 of the Bill you will find the three classes of benefits mentioned. The first is the minimum benefits, such as 10 s. a week during sickness, 5s. during disablement, medical benefits, and so on. Those are the minimum benefits which everybody, with one exception, is to have. The second class of benefits referred to in Clause 8 and also referred to in the Schedule which deals with benefits is what are called the additional benefits. These are benefits which may assume various forms—additional to old-age pension, anticipation to old-age pension, dental treatment (a most important matter with the working classes), increased sickness allowance, and various things which belong to a higher category of benefits. Then there is the third class
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of benefits which are called extension benefits. They are foreshadowed and referred to in Clause 8, but Parliament has hereafter to determine the form which these are to assume.
The minimum benefits come into operation at once. Every one is entitled in principle to his benefits from the date at which he comes into insurance, so long as these are minimum benefits and he pays the standard contribution to get them. But the contribution which the insured person pays is loaded with a margin of about 6 per cent., and that 6 per cent, will make the friendly societies who manage their business prudently carry on their business at a profit, and that profit will go to provide the second class of benefits—the additional benefits. After three years the insurance society is to have its assets valued. If there turns out to be an increase in those assets, the profit on the carrying on of its State Insurance business—and this fund is carefully segregated—is to go for the purpose of adding additional benefits to the minimum benefits. That may happen as early as three years after the passing of the Bill and possibly in some cases even a little earlier, and it is a process which will go on. In the case of well-managed societies these additional benefits will be there, and in the case of societies that are not well managed their members will be annoyed because they will find that their society has not been conducting its affairs in such a fashion as to secure for them the additional benefits.
Then there are the extension benefits which are left to be defined by Parliament hereafter. The reason for that is that we want more experience to show what is the best form which these benefits should assume when they come into operation, and they cannot come into operation, for a reason which is fundamental, before a little over eighteen years from the inception of the system. I explained that the reserves credited to the older insurers have to be wiped out, and they are wiped out in this way. The sevenpence which is the amount of contribution that an employed man and his employer pay is sufficient, not only to secure the minimum benefits, but also to provide a margin for the additional benefits which is rolled up by the friendly society. The State comes in at this stage. Under Clause 3 of the Bill the provision of the cost of benefits is to be made, two-ninths by the State, and

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seven-ninths by the employer and employed. Taking a benefit which is contributed to by the employer and the employed to the extent one of threepence and the other of fourpence—that is to say, sevenpence in all—the State will contribute two-ninths of the cost of the benefit which that premium purchases. Now how does that work out? The benefit is calculated as worth sevenpence. The employer and employed provide that sevenpence; but then two-ninths of the cost of the benefit is taken off by the intervention of the State, which is bound under the Bill to pay two-ninths of the cost of the benefit. Now the benefit is worth sevenpence, and if your Lordships will do a little sum you will find that two-ninths of sevenpence represents a penny and five-ninths. That penny and five-ninths is not wanted for the purchase of the benefit. The contribution of the employer and employed goes entirely in this purchase of the sevenpenny benefit and additional benefits, but the one penny and five-ninths which is released from their contribution by the contribution of the State goes through the hands of the Insurance Commissioners to extinguish these credits. It rolls up to a large sum every year, and the actuarial calculation shows that, at the end of a little over eighteen years, the whole of the credits which are given for the older lives will be wiped out by the operation of that penny and five-ninths. It is a fair enough transaction, because the man gets sevenpence worth of benefits for sevenpence. What he does not get is the equivalent of the State contribution. The equivalent of the State contribution to the extent of a penny and five-ninths goes to extinguish these credits, so that the result will be that after eighteen years there will be a large increase in the amount of money set free. The whole of the State contribution will be coming in to provide these extension benefits under Clause 3 in the shape in which Parliament shall by that time decide to fashion them. There may be a considerable addition to old-age pensions, there may be old-age pensions at 65, there may be increased sick allowance, there may be very much extended medical treatment, and there are a vast variety of ways in which these things may be dealt with. It is for Parliament to say. But the point is this, that from to-day the money is rolled up which will eighteen years after this provide those extension benefits of which I have spoken.
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I do not feel any confidence that I have succeeded in making myself clear on this question of finance. It is very complicated. I think I understand it myself, and I trust that your Lordships will have understood something of it from what I have said. There has been a huge controversy as to whether the State was contributing twopence or whether it was not. Some said it was not, and that it was all a fraud; others said it was, and that it was a great boon. The truth is that what the State is paying is what will work out on the average, over a tract of years, to at least a contribution of twopence. The State pays two-ninths, and as the benefits increase the State has to pay more and more, so that when we get to the extension benefits period the State will be paying more than twopence, but in the earlier stages it will not pay so much. Taking the average, the equivalent of twopence is being rolled up for the benefit of all the insurers. The younger insurer when he reaches the age of 34—I think I have added 18 to 16 correctly—will get these much larger benefits which have been provided by the effect of this process of wiping out. He will get the full benefit of the State contribution. That is the financial scheme of the Bill. It has been worked out by the actuaries with the utmost caution, and I think myself, as far as I can judge, that they have been very conservative in their margins. There are some parts of the Bill where really the actuarial data are very scanty and about which you cannot be sure. For instance, take the case of a married woman. The periods of sickness with a married woman are so uncertain that there is nothing very reliable that can be gone on. We at first thought it would be wiser to keep married women out of the Bill altogether, but that could not be done and accordingly we have taken them in on as conservative a margin as possible. But for the rest we have had valuable data to go upon. There is the experience of the friendly societies, and the actuaries have loaded the premiums with a considerable margin to cover contingencies, and I am informed by those most competent to judge that, on the general part of the scheme, the calculations of the actuaries are not only apparently very reliable, but are based on a very conservative footing. And in addition to that, in every case a margin has been added to cover unforeseen contingencies. Therefore I venture to

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hope that experience will show that the basis upon which these calculations have been made is sound. Again I say that beyond ascertaining certain general facts, such as I have referred to, it is impossible to have any certainty in a matter of this sort. We are making a great new departure, justified by what I believe will be the incalculable benefits which the introduction of these habits of insurance and prudence, and the consequent prevention of disease, will bring to the great mass of our population. To do this you must risk something. All that we can do in a matter so novel, and in which experience affords so little guide, is to use the best material we can and come to the most careful conclusions that are possible.
So much for finance. Now I come to the way in which this is worked out. First, I will take the machinery of the Bill with respect to sickness and breakdown, and I will go at once to the question of the persons who come under the obligation to insure against these evils. To begin with, all persons employed under a contract of service must be insured compulsorily. There are exceptions to that, such as where the work is not manual and the remuneration exceeds £160 a year. The clerk, for instance, who gets over £160 is under no obligation to insure. Then there is a second class which will contribute a considerable number of people to the benefits of this scheme and which will be equally assisted by the State, and that is the class of voluntary insurers, the class of persons who are not employed within the definition I have given and whose incomes are less than £160. Another class is those who have been employed contributors for five years. They are then entitled to go into the class of voluntary insurers and escape further compulsion if they please. These are the two classes—the compulsory insurers and the voluntary insurers. As to age limits, nobody comes under the obligation at a lower age than 16 or after 65.
Now I pass to the benefits. I have already told your Lordships of the three classes of benefits, the third of which is left for future definition. But the benefits generally your Lordships will find described in Clauses 8 to 13 of the Bill. The benefits so far as they are minimum or ordinary benefits consist of items such as the following—sickness, in the case of a man 10 s., and
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in the case of a woman 7s.6d. a week, for 26 weeks. A point has arisen here as to which there has been a good deal of controversy. If you allow' people to get sickness allowance for the first three days, experience has shown that that is a potent cause of malingering, and in those cases generally they are able to look after themselves for so long, or they are looked after. We have thought it best to bring them into the, insurance benefit on the fourth day. Exception has been taken to that by some of the friendly societies on this ground, that their own practice has been to bring their members into insurance earlier. One quite respects and appreciates the desire to maintain a tradition, but we have been unable to satisfy ourselves that it is a good tradition. Remember you are using State funds here, and malingering becomes a thing you have to guard against more closely than under the restricted voluntary system of friendly societies. Therefore we do not think we should be justified in recommending that the first three clays of sickness should be brought in, and in that we are following certain precedents in the Workmen's Compensation Act. We thought it right to compensate, and we have more than compensated, for the exclusion of these three days, by extending the sickness benefit for 26 weeks instead of 13 weeks, with a diminished benefit towards the end. Therefore although we know we have not quite satisfied all the friendly societies on this point, we think we have come to the right decision, more particularly as it is absolutely vital in a matter of this kind, where State resources are engaged, to ascertain clearly the limits of your liability and take care that the taxpayers' money is not wasted.
Then there is disablement or breakdown benefit of 5s. a week. If a person is permanently incapacitated or temporarily incapacitated after a period of illness as a result of some specific disease, then he gets disablement allowance. Then there are medical treatment and medicines, with the proper appliances; sanatoria benefits for cases of tuberculosis; and maternity benefit of 30 s. for the wife of an insured person. Of course, if a married woman insures, as she can do, she does not get two maternity benefits, but she gets the same thing, because she gets the 30s., her husband's benefit if she is the wife of an insured person, and also 7s. 6d. a

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week for four weeks' sickness allowance, which amounts to the same thing. Then I come to the additional benefits, which may begin to come into operation very quickly. First, there is medical treatment for the children and dependents of the insured person. That I think is very valuable. Then there is dental treatment, and those of your Lordships who have, had experience of the suffering of servants from the want of dentistry will appreciate what a valuable right this may become. Then there are increased sickness and disablement benefits, an increase of maternity benefit, extra allowance during convalescence, earlier and larger old-age pensions, and other, benefits to which I need not refer. Those are the additional benefits, and the extensions in Clause 8 are left to be defined by Parliament when the question becomes practical in the light of the experience then gained. An additional benefit, as I have explained, comes from the margin of 6 per cent, with which the insurance premiums are loaded, and although the employed and the employer between them contribute seven-pence and sevenpence worth is given, still the benefits do not cost quite seven-pence. The State contribution not only lowers them, but there is yet another margin included and that rolls up to provide the additional benefits. The result is that in well-managed societies there may be a surplus after the first valuation which will provide the first instalment of the addition to the benefits.
The principle of the Bill is what in insurance slang is called a "flat rate." In Germany the people contribute different sums in proportion to their wages. A man with large wages contributes more in the way of premium and gets larger benefit, and a person with small wages contributes little and gets very little benefit; but there is under our system the same contribution and the same benefit for everybody, and the result of this system ought to be, if these calculations work out, that at the end of eighteen years nearly £7,000,000 will be available for the provision of the extension benefits of which I have spoken. Of course it is said, and with great truth, that this system imposes an additional burden upon employers of threepence a week in respect of each person insured. That is quite true, and one is always loth to add anything to the burden on industry. But the experience of Germany is very
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instructive on this point. The testimony of the employers of labour in Germany is almost unanimous that the system has been of benefit even to themselves. In the first place, it has brought about a better distribution of charity, and they do not have to provide sick allowances and benefits individually. In the second place, it has tended to greater efficiency on the part of the workmen; and, in the third place, it has been worked into the cost of production. Our employers have a rather lighter burden to bear than the German employer with whose products they compete, and my hope is that this burden, which after all is small in proportion to the enormous results it brings about, will prove to have relieved the best class of employers of a good deal of the responsibility for charity that comes upon them at the present time, and to have produced assistance from which not only the employers but the State will have got good value for their expenditure, if only in the direction of relief from anxiety and burden by having a contented and pro-vided-for population who have not constantly to make applications for assistance.
Now I pass to the contributions. These your Lordships will find in Clauses 4 to 9 of the Bill, and in the Second Schedule. The contributions consist of a total made up in this way—two-ninths are borne by the State in the case of men, and one-fourth by the State in the case of women, and seven-ninths in the case of men and three-fourths in the case of women by the employers and employed. Then in the Schedule it is laid down what the contributions are to be. The employer pays threepence; the employed, if he is a man, pays fourpence, and if a woman threepence. Where the remuneration is under a certain rate, where cheap labour is employed and board and lodging is not given, the employer's contribution is larger and the proportion paid by the employed goes down. Where under 9s. a week is paid the employed pays nothing; but in these cases, and up to 12 s. a week of wages, the State contributes one penny. That is quite a different grant from those to which I have referred. The contributions are what I have stated, and, as I said, taking the average for the period of years the State contribution will be twopence—at one period it is rather less and at another period it is rather more, but it averages a payment of twopence.

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I have spoken throughout as though the friendly societies were the only machinery for the Bill. That unfortunately cannot be the case. We leave the friendly societies at present perfectly free to choose their lives; we do not interfere with them; we invite them to choose their lives because we wish to keep up their esprit de corps and that watchfulness which has been the policy of the friendly societies up to now. But there are the cases that the friendly societies will not take into insurance. For example, there is the case of the man of fifty years of age who wishes to come into insurance. The friendly societies will not take him because, even with his reserve, it is a life likely to have an undue proportion of sickness. Consequently we have had to make provision for these lives who cannot get insurance from voluntary agencies. We have to give this man an option, and the option we give him is the deposit insurance system through the medium of the Post Office. Those who come in there receive State contributions to their benefits in the same way as the others, and are dealt with under the same contributions and obligations, but there is this difference—they receive only what they have paid in and the State contribution in addition; they do not receive benefits at the expense of the other members. Each deposit insurer is treated on his own account, and, unlike the case of the friendly societies, he cannot call in his neighbours to contribute if the burden on his premium becomes heavier than in the ordinary circumstances would be the case.
Deposit insurance is obviously not so good as the insurance through the friendly societies. We know that, and, what is more, we do not contemplate that it should continue in its present form. It was necessary to provide for deposit insurance at the outset because of the older lives, but as people come in at the age of sixteen they will be much more freely taken by the friendly societies than when they come in at forty. A friendly society does not concern itself so much, in the case of anybody coming in at the age of sixteen years, as to whether it is a life that is likely to be sound or not. In the ease of insurance against death you take great account of the character of the life. Anybody with a tendency to heart disease, for instance, is rejected; but in the case of a friendly society insuring against sickness as distinguished from death, the person with heart disease is a
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gold mine; he is very valuable, because if his life is short you have had his premiums. He is presumably a normal life as regards sickness in the meantime, and you get his premiums and do not have the burden of his old age coming upon you. Therefore we know from experience that those coming in at the age of sixteen are likely to be in the freest way taken by the friendly societies, and when everybody has come in at the age of sixteen there will be comparatively few coming in at the age of forty or fifty. So we have provided in the Bill that this deposit insurance system through the Post Office is to continue in its present form only until 1915. By that time we shall be in a position to remould this part of the scheme. Experience will have taught us what number of lives we are likely to have to deal with, and we may be able to deal with them in a somewhat different fashion, with more paternal care exercised, or we may continue the system with some modifications. At any rate, of this we are certain, that deposit insurance contributors will become year by year a diminishing class, and before long this class will become so restricted that we shall have to deal with them in some other way. A deposit insurer has this advantage, that if he dies with money to his credit, he can leave four-sevenths of it behind—money representing, roughly, his own contributions as distinguished from those of his employer and the State.
I pass from the consideration of deposit insurance to the next piece of machinery as to which I wish to say something—the friendly societies themselves; with regard to whom I have already stated to your Lordships that it is our desire to effect an improvement in their condition. To begin with, they will be enormously strengthened financially by the addition of these contributions. The State contribution in itself will be of great value to them, and they will be the main instrument and in the course of time practically the exclusive instrument in working out the policy of this scheme. That means there will be an amount of pressure against malingering, an amount of mutual observance among the members with a view to economy which we could not possibly have got under any system which did not rest upon decentralisation, but upon direct supervision by officials. The object is to eliminate officials as far as we can, and to rely on the co-operation of the members themselves.

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A contributory system with societies like this is a valuable thing if it works out as a successful institution. I believe it will be found far better and far more acceptable than a non-contributory system based on Socialistic principles, of which one hears a good deal of talk just now, but which I believe we shall find much less talked about when there is a compulsory system at work in conjunction with the friendly societies developed and strengthened in a fashion we do not appreciate at this time. Friendly societies will administer sickness, disablement, and maternity benefits. Certain benefits will be left to the local health committees, which I will deal with in a few moments, and in particular the medical and sanatoria benefits will be administered through the local health committees for reasons connected with the medical profession and other reasons on which I will touch later. But the main instrument will be the friendly societies.
I have used the words "friendly societies." I want now to make a correction of that. Friendly societies will mean in the future the friendly societies of to-day and also something else. "Approved societies" is the right term, and it is the term used in the Bill. The approved societies will be societies of the type of the friendly society, but they may include sections of societies or corporations which exist for quite different purposes than those of a friendly society. The approved societies will not only include workmen's provident associations organised by employers, they will not only include trades unions, but they will also include sections founded for the purpose by great insurance companies, such as the Prudential, which will be able to start branches for the working of this huge system. One condition which we impose in the case of all, friendly or private society, or whatever it may be, is that they observe certain conditions. The first is that in the working of the section which handles the Government business they make no profit; the second is that the affairs of the section or the society, as the case may be, are to be under the control of their members. Those are the two great conditions, and any society which conforms to those conditions may be approved either as a whole or in the form of a separate section conforming to the conditions. We have made provisions which enable existing insurance societies and societies of other kinds to take up powers in their charter or memorandum of
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association. When a society has been approved it will come into the line of conduct which the Bill prescribes. It will be inspected and investigated with a view to discover, among other things, whether it has a deficit or a surplus. If it has a deficit it can be made good out of surplus in the hands of the central body of the society or by way of compulsory levies, as is done under the Friendly Societies Acts at the present time. It will receive a certain amount of money to handle. Under the general scheme of the Bill the money is collected by the Post Office in the form of stamps; the Post Office pays over to the Insurance Commissioners the contributions, and the Insurance Commissioners invest them and hold them and liquidate the credits which the individual members hold. They will hold a certain amount of funds for the members of the societies—that is to say, at the credit of the societies themselves. Consequently it will be open to the Insurance Commissioners to hand over to the societies that part of the fund for investment, and we have provided that if the societies desire it they have the option of either leaving the investments as to a certain proportion—the proportion which comes from members' contributions—in the hands of the Insurance Commissioners to remain invested by them, or to take them over and invest them to that limited extent, repaying the contributions of their own members themselves. But if they do that they must invest in trustee securities. The accounts of the societies I need not say must be kept in a separate form as regards this class of business, and the societies must give security and conform to the conditions. Small societies may federate, a provision which we think will enable a large number of small societies under 10,000 members to come into the working of the scheme.
Now, my Lords, I come to the public authorities which are to superintend the administration of the measure. As I said, the policy is to interfere as little as possible and only so far as is necessary to guarantee security. To begin with, there are the Insurance Commissioners. As the Bill first stood, there was only one body of Insurance Commissioners—that for the United Kingdom; but discussion showed that the fact that there were in Ireland, for example, different rates of wages and different prices would necessitate an adjustment in the contribution. If your Lordships look at

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the Schedule you will find that the contributions and benefits in the case of Ireland are different from the contributions and benefits in the rest of the United Kingdom. Moreover, in Ireland there is established under Irish local government a local dispensary system under which medical benefits are already provided for. Ireland wanted a new scheme, and the work of the Commissioners would have involved a great deal of inspection and study on the spot. It was therefore thought better to set up separate bodies of Commissioners, because what was true in the case of Ireland was true also, although in a rather less degree of Scotland, where the conditions are different from those in England. The customs in regard to agricultural labourers, for example, and other features of national life are not the same. The result is that there are now four sets of Commissioners, one for England, one for Scotland, one for Ireland, and one for Wales. Provision is made for these Commissioners to meet and manage their affairs to a certain extent in common. Under Clause 83 of the Bill—an important clause which ought not to be overlooked in the study of this subject—there is a joint committee of the four bodies of Insurance Commissioners, and that joint committee, under a President, will discuss and ascertain matters of policy which are fundamental and common to the whole system. The Insurance Commissioners can only, of course, exercise a general control and look after finance. When you come to local questions, such as the conditions of health in a particular district, you want a less centralised system, and that we have provided in the local health committees.
I should explain that if the Bill is read a second time in your Lordships' House to-day I shall move that it be committed pro forma in order to be reprinted with the term "insurance committee" substituted for "health committee." as some of the local authorities are taking exception to the term local health committee as likely to lead to confusion, it being at present in existence. As there are on this point some 90 verbal Amendments it will be necessary for your Lordships to have the Bill reprinted with this correction. Each of these committees will consist of from 40 to 80 members, appointed under regulations made by the Insurance Commissioners in such a way as to secure the representation of insured persons to the extent of three-fifths of the
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members of the local committee; there will be one-fifth by the county council or the county borough council, two members appointed by the medical practitioners in the county, and so on. In that way we hope to get a committee that will settle the multitude of questions which will arise and which will vary from locality to locality, questions with which the Insurance Commissioners could not themselves adequately deal. The functions of the local insurance committees will be to report on health. That is the great thing. They will furnish statistics not only about abnormal but about normal conditions, such as we do not possess at the present time, and this ought to be of great value in combating disease. They will conduct special inquiries. If the rate of sickness turns out to be abnormally high they will set on foot an inquiry which will usually be under the auspices of the Local Government Board, and they may bring either local authorities or private persons to account for insanitary conditions, polluted water supplies, and so forth, which have led to excessive sickness and so thrown an excessive charge on the insurance fund. Such are the main functions of the authorities which will administer this Bill. These local committees will also manage the admission to the sanatoria which are to be erected in the main under the auspices of the Local Government Board. The Government propose to start these sanatoria by contributing £1,500,000 for their erection, and there will be an expenditure of about £1,000,000 in addition on their upkeep every year. Then they must make the medical arrangements for the deposit insurers with whom the societies do not deal, provide instruction as to the preservation of health, and undertake the delicate and difficult business of negotiating with the doctors. I shall come to the doctors in a minute or two. Such are the functions of the authorities which will administer this Bill.
Now, my Lords, a few words about one or two of the classes which come in. Married women are a great difficulty. We have had to deal with them on a special footing, because you cannot let married women in like ordinary persons. Their ailments are such as to be beyond the knowledge, much less the control, of the ordinary or of any other friendly society. Consequently we have made special provision for them. Clause 43 deals with married women, and provides in substance

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this. If a woman who has been insured before marriage marries she gets ordinarily no benefit while her husband lives if she is unemployed, but one third of her transfer value—that is, the value at which she stands in her society—with the reserve credited to her will be carried to a special account, and two-thirds of it will be earmarked for her. The object of ear-marking one-third of that is that if her husband dies and she becomes a widow she may get back into insurance as if she had never been out of it, and although she may, perhaps, be an oldish woman by that time she will not have to pay increased premiums. If she becomes employed after her husband's death no arrears will be counted during the marriage, and the transfer of this account will give her her proper reserve value, and she will go on as if she had never been out of insurance. The married woman, if employed during marriage, can go on being insured with the old benefits; we have taken that risk. If she is not employed, she may become a voluntary contributor at special rates and on special terms, and if she does not wish to contribute as a voluntary contributor we have allowed her reserve value to take effect on a basis which takes special cognisance of those illnesses which affect married women. Her remaining two-thirds will be applied so as to give her 5s. a week during confinement—an extra payment—and special payments during sickness and distress. So your Lordships will see that married women come off pretty well. If a woman marries and ceases to work and goes out of insurance and then takes up employment again as a widow, all arrears are blotted out and she comes in as if she had never passed out of insurance. If she continues to go on she can go as an employed contributor; she can go on as a voluntary contributor, with benefits at a moderate rate; or she can say, "No, I have two-thirds remaining, and those two-thirds I will take in the form of special benefit—payment during confinement, and payment during a period of distress or sickness." So much for married women.
I come now to a very thorny point, the point about domestic servants. I think there has been a great deal of misapprehension with regard to this point, and I must say from what I have seen, looking at the case of domestic servants as a whole, that I can conceive no class more likely to benefit by this Bill. My right hon. friend the Chancellor of the Exchequer, in a letter
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which he wrote the other day to some ladies who had doubts on this subject and asked him for information, said this—
"Let me remind you briefly how the proposal affects them. It means that the State undertakes a liability of some £800,000 a year in respect of benefits to domestic servants, and that the employers of servants contribute some £1,200,000 a year for the same purpose. From the money thus made available, together with the servants' own contributions, every servant will be entitled to free medical attendance, to the payment of 7s. 6d. a week during sickness for six months, and 5s. thereafter if permanently incapacitated, and free treatment in a sanatorium if she contracts tuberculosis. These are the minimum benefits under the Bill, but if, as has been said, domestic servants do not require the full sickness benefit, the money thus saved can be used with any other savings to give some other benefit, as, for instance, a superannuation fund which would provide pensions at an earlier age than seventy. I may add that servants who marry are given the value of two-: thirds of their insurance in any one of several; ways, the remaining one-third being used to give them the right to immediate benefit should they become widows, so that if they are excluded altogether they will be unable to profit by the specially favourable terms given in the Bill to women who were insured persons before marriage. This would be a great deprivation to them."
The Chancellor of the Exchequer refers to alternative benefits which servants may have. That is provided for by Clause 13 of the Bill. That clause enables special schemes to be made, with the approval of the Insurance Commissioners, for special classes, including domestic servants. That is the only case in which the minimum benefit is allowed to have substituted for it certain other benefits, among them being an increased old-age pension, various provisions for sickness and old age, assistance of dependents, and other things which ought to be very valuable in the case of servants.
The insurance societies and friendly societies will doubtless make many of these alternative schemes and compete for the insurance of domestic servants. When you consider the great benefit in money which domestic servants get in this fashion, surely this is a scheme which really adds very much to their savings and puts them in a position in which they will be very much better off than they are at the present time. We all know that a large class of employers treat their servants with the utmost kindness, and take care of them during sickness. But we also know this curious fact, that when a servant leaves there is a kind of code of honour among them never to ask their employer for assistance after they have left him for a certain time, although they will do so a

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short time after leaving. They do not like to come back after a time, and many of them do not go back into the same class and are very ill provided for. The figures which we have obtained show that in the Poor-law infirmaries a very large proportion of the sick are domestic servants, girls who have dropped out of employment and who have no one to look after them. Servants are very apt to be careless about their savings, and if the brother or brother-in-law goes into business he thinks it quite legitimate to go to the girl and ask her to lend him her savings for the purpose of his business, and very often the money is lost. The excuse given for borrowing from her is that she has no one depending on her, or that she will marry and it will be all right; but that does not always happen, and there are many cases where a systematic provision such as this Bill makes with all sorts of alternative forms of benefit, every one of them on the soundest financial basis and State aided, would be of the greatest value to servants. No doubt there has been a great deal of trouble about this clause, but I think as it stands it is in as elastic a fashion as could well be desired. If the employer chooses to make the arrangement, he or she can undertake to give the servant six weeks' maintenance during sickness, and then the employer's contribution is somewhat diminished. There are various ways in which the servant can be helped. She can go into hospital with 7s. 6d. a week to assist her while there, or she can draw her 7s. 6d. a week while sick in her mistress's home and pay the doctor on her own account. I will say no more about the provisions as to servants.
I should like to say a word or two about soldiers and sailors. I will take the case of the soldier, because I know more about him. With the Colours he does not need much insurance; he is looked after in the hospitals of his camp. When he leaves the Colours and goes into the Reserve and enters civil employment he is, perhaps, over 30, and he comes in at a disadvantage as an old life. Therefore we have to bring him into insurance as at 16 in the ordinary way; but there is no necessity for us to charge him as much as we charge the ordinary civilian at 16, because the Army takes care of the soldier during his service. The same mutatis mutandis is true of the Navy. Therefore there is a reduced contribution. The soldier will pay only 1½d. a week during his service, and out of
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Army funds another 1½d. a week will be paid as the employer's contribution, and the State will pay 1d. The fund thus created will be enough to provide a proper reserve value if, on leaving the Service, he is transferred to a friendly society. If for some reason he cannot get into an insurance society, there is a new insurance fund set up and his contributions will be carried to that.
Consumption is, unfortunately, very common among both soldiers and sailors, and there is a new Army and Navy Insurance Fund set up by the Bill which makes the same provision for soldiers and sailors as an approved society would have done. Clause 45 deals with that, and creates a great reform both for the Army and the Navy. The effect of it is that consumptive soldiers and sailors will be looked after in the future, will get sanatorium treatment, and will get a breakdown allowance for the rest of their lives. The noble Earl opposite (Lord Selborne) knows that under decks and in the engine rooms there is a great deal of phthisis in the Navy, and by a provision which certainly is not ungenerous these men get that treatment in addition to their sickness pension if they have a sickness pension for sickness contracted during service. As to agricultural labourers, special provision is made for them because of the custom which prevails in many districts with regard to sickness benefit; they can join societies, in which case they and their employers will each put down one penny. In the case of seamen in foreign-going ships, because the Merchant Shipping Acts already impose a heavy liability on them we have provided especially for them here by clauses which I am glad to say represent the work largely of the ship-owners. The Government owes a great deal to Sir Norman Hill, who negotiated these matters and enabled them to produce a system which will not only be good for the shipowners, but which will, I think, materially improve the condition of oceangoing civilian seamen.
One word about the doctors. They will be dealt with by the local insurance committees. The doctors will not be worse off than those who are now associated with friendly societies. On an average they will probably be 2s. per head better off than they are now. It is extraordinary how little they get from the friendly society. I had a case the other day where

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I had an opportunity of ascertaining what the local doctor got from the friendly society. He received about 3s. a head, and his ordinary fee for attending a working-class patient was not more than 1s. 6d. That is outside the friendly society system, and of his fees he recovered only 14 s. in the £1. That shows how difficult is the position very often of the country doctor. Now he will get his money for certain under this system, and he will be better off to the extent probably of, on an average, 2s. a head. But that is not all. Under a provision in the Bill the local health committee, after inquiry, can determine what is the rate of wages in a district above which people ought to employ their own doctors at their own charges and make their own arrangements with them. If they think that a man with 30 s. a week, having regard to the average income of the industrial classes in the locality, may be properly left to deal with his own doctor, they will fix that rate for that locality, and pay him the ordinary doctor's fee under the scale and leave him with the aid of that fee to supplement it from his own resources and make his own arrangements with the doctor. There is great elasticity left to the insurance committee in dealing with the doctor, and I trust that a little experience will prove that there is no cause for friction.
Now just a word or two about the other part of the Bill as to unemployed insurance, which, as I have said, my noble friend behind me (Lord Beauchamp) will deal with more fully later on. At the present time there is only a comparatively small proportion of the industrial population insured against unemployment, and in certain trades—shipbuilding and engineering, and the group of trades under those heads—there is a great deal of unemployment because the employment is seasonal in character. At one period of the year there is plenty of employment, and at another period very little. The system of insurance against unemployment extends only to those trades, but there is power, after inquiry, to extend it to other trades. The scheme is a weekly allowance paid through the Labour Exchanges and the existing trade unions. The effect of the scheme will be to substitute for about 350,000 people, now insured against unemployment voluntarily in their societies in these scheduled trades, about 2,500,000 in all, which is an enormous increase in
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the number of people thus secured. The workmen will pay about £1,000,000, the employers about £900,000, and the State about £750,000. These sums will be raised by contributions of 2½d. by the workmen, 2½d. by the employer, and the rest from the State. Then there are provisions in the Bill to encourage employers to keep on their men, even though they may have to diminish the amount of employment they give them. So long as they give them continuous employment and do not discharge them merely because things are slacker than at other times, they get a diminution in their contributions which is worth considering. The unemployment benefit is 7s. a week given for not more than fifteen weeks. Moreover, there is no payment for the first week. That is in order to shut out the man who figures as unemployed because he is not keen to work. Again there are provisions for the person who is really hard-working and keen. For instance, if a workman has paid for 500 weeks and reaches the age of 60, either he or his representatives may get the balance of the payments standing to his credit over the cost of benefits which he has actually received. Then, again, there are cases in which the workman fails because of his incapacity and want of skill. In such cases there is power on the part of the insurance officers to send him to a technical school and pay for his instruction so as to fit him for employment. Generally speaking, a man cannot go out of employment and say, "I am unemployed"; he has to take the employment offered him by the State, and if he does not take it and there is no reasonable excuse for his not doing so he does not get on the to unemployed fund. It is only the man who is unemployed through no fault of his own and who cannot get employment who gets the benefit of the system. There is also a clause providing for payments out of the moneys provided by Parliament to voluntary societies making payments to workmen, whether they are in an insured trade or not, whilst unemployed.
To sum up the alterations which have been made in this Bill since it was introduced in the House of Commons in May, they are broadly these. Separate Insurance Commissioners; extension of consumption treatment beyond the sanatorium to the women and children of the family as well as to the man himself; sick pay for

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twenty-six weeks instead of thirteen; wage earners of less than 9s. a week free from the obligation to contribute; soldiers and sailors, and mercantile civilian seamen brought in under the special enactment to which I have referred; the changes in the case of married women which I have described; special clauses dealing with agricultural labourers, and a variety of other benefits. Clerks also get the benefit of these arrangements which can be made under the special scheme; the margin of contribution under the Bill as originally proposed has been somewhat reduced, but it is still a good 6 per cent., which is ample, to cover even what might be called depredations, and it is a margin which has been well justified by the actuaries. This is a Bill which must to a certain extent be speculative. I am aware that in all cases our data are not data which can be said to be reliable, but in the main, and taken in bulk, the data which we have are, we think, sufficient to ensure that the scheme will work out as has been calculated, provided the limits of the framework are observed. As we know, there must take place modifications in the direction of the readjustment of the system and of the benefits within those limits, and I cannot but say for myself that it seems to me the sooner this Bill comes into operation the better. The sooner it comes, the sooner shall we get the experience which is requisite. No amount of discussion, even if it went on for years, could make us more certain, or make us certain at all, about many of the points that arise, but that is no reason for not introducing the system. Germany went into national insurance upon the basis of working experimentally and gradually adapting itself to the system.
This Bill has been before Parliament since the 4th of May last It has been discussed in the other House during the summer, during the autumn, and during the winter Even during the recess my right hon. friend was active everywhere, and many other people were engaged in discussing the Bill and its provisions; it has been criticised by the friendly societies, by the actuaries of the insurance companies, and by every kind of expert. Modifications have been introduced in it, and I do not wonder that many Amendments were sure to result from a process of criticism of that kind. We may not have yet got to the end of possible modifi-
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cation, but I do think we have got to a point at which actual experience would be more valuable than anything else; and it is because I believe that we have got a framework and a financial foundation which is secure and upon which we can build, that it seems to me that actual experience is now justifiable as our next resort.
The Bill must have other important effects which it is desirable to call into existence at once. There is for example, the prevention of disease. Take the case of children alone. At present, as your Lordships know, under an Act which became law recently—the Notification of Births Act—children have a better chance of life and health than they had before. That Act merely says that the birth is to be notified to the medical officer of health as well as under the old system to the registrar of births. The medical officer of health pays a visit to the child, and then the voluntary health society—these societies are springing up everywhere—comes into operation, and in many cases visits the child and watches over it from infancy until it reaches the school age. I know, from my own experience of the work of societies to which I subscribe, that that work is being done now, and it is a work which would be immensely stimulated by this Bill. Then from five years of age to fourteen there are now medical inspection and treatment in the schools, and the Chancellor of the Exchequer has promised a further grant next year in aid of those local bodies which have to provide for medical inspection in the schools. I am sorry to say there is still a gap between the age of 14 and 16, and I wish that gap could be filled up by the establishment of the continuation school system which is actually in force in Scotland at the present time, and which was promised for England by a Bill which unfortunately was dropped this session. After the age of 16 the friendly societies begin to look after the life of the young man or woman. It seems to me that we have here a system which ought to do much in the way of preventing disease and towards enabling us to obtain that necessary scientific and statistical knowledge. Take, for instance, phthisis. It surely will be possible to stamp that disease out when you have every case tracked down and watched as you will have under the Bill.

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My Lords, these things open up a vista ahead, and they may not all be realised. Anticipations are often disappointed, and one's most sanguine ideas, based even on the greatest care and study, too often fail; but this Bill does give some of us hope, and such are the aspirations of those who have framed it. It is a step forward towards the realisation of an ideal of a yet greater and more general character. I can conceive no ambition more noble than the ambition of making the race better physically and morally. I know of no care of the soul which does not involve the care of the body as its indispensable concomitant. I know of no system by which the condition of the race can be raised which does not turn on supervision and precaution and upon the elimination of the causes of evil, such as can only be compassed by a great national scheme. Whatever be the result of this measure, whether it realises its expectations or whether it does not, the spirit in which my right hon. friend has entered into his task is a noble one, and I claim for him the admiration of those who, whether they agree with the results or not, believe in the work of a man who puts his wholes heart and soul into the task he has undertaken.
It may be, my Lords, as I have said, that these things will not turn out to the utmost of our expectations, but, on the other hand, for the reasons I have endeavoured to state, I believe that a foundation has been laid from which we may hope for much. We who sit here and those who sit in the other House are the trustees of a great opportunity, and what we have to consider is whether on the balance of our doubts, on the balance of advantages and disadvantages, the time has not come when we ought to take advantage of it. There may be, I believe there will be, hereafter a time when men will look back to the work of those who were legislators in this generation, who sat in these Houses in this year, and who passed this Bill, and will say that they launched a new influence, an influence for good, an influence for the fashioning of character, an influence that has opened a new power both for our generation and for the generations that are to come after us.
Moved, That the Bill be now read 2a.—(Viscount Haldane.)
THE MAKQUESS OF LANSDOWNE: My Lords, we are all, I am sure, ready to admit the moderation of tone and the mastery of the subject which characterised the speech to which we have just listened. It has, I have no doubt, added much to the knowledge which the House possesses of this intricate and complex subject, and for that contribution to its literature we shall all be grateful. I observe that a few days ago the noble Earl who sits beside the noble Viscount told his hearers on a public occasion that he doubted whether there were more than a dozen people who understood the Bill now before us, and with becoming modesty he hesitated to include himself in that Dumber. The speech of the noble Viscount may possibly have added two or three recruits to that intelligent, but exiguous, band, but I am afraid that he has left a good many of us not quite satisfied and not quite so convinced as he is that this Bill is in all respects a perfect measure. We are, however, grateful to the noble Viscount for his statement, and let me add that we are grateful to His Majesty's Government for having supplied us with the printed Memoranda that lie on the Table—documents which must have cost the compilers a great deal of trouble to prepare, but which summarise the contents of this Bill in a very convenient shape.
My Lords, I have risen in my place because it seems to me that it would be more convenient at this early stage that the House should be made aware of the manner in which we on this Bench regard the situation that confronts us. It is a remarkable situation, whether we consider the measure that we are now invited to discuss or the particular moment in our Constitutional history at which that measure comes before us. Let me say in the first place—and here I take up what I might almost call the challenge which fell from the noble Viscount—that we on this side of the House desire to disclaim altogether anything like hostility to the principle of this Bill. I am sure we have listened with satisfaction to the tribute which the noble Viscount paid to the increase of thrift among the working classes of this country, and I am sure that there is no member of this House who would not with his whole mind support any well-considered proposal by which that admirable tendency might be stimulated and encouraged. Many of us are publicly

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committed to the principle of the Bill. Several of those who habitually act with us have co-operated, I venture to think usefully, with His Majesty's Government in its discussion, and I will go further and say that in my belief if the fortunes of political war were to bring about a change in the position of the two Parties we ourselves should probably be found ready to deal with this great question. But, my Lords, I venture to add that these feelings on our part must not be regarded as in any sense debarring us from the right to criticise freely either the contents of the Bill or still more the precipitation with which it has been brought before us on this occasion. The noble Viscount will, I am sure, be the last to contend that such criticism as the measure has encountered has been futile or superfluous or other than helpful.
Is it, then, the case that there is no more to be said? Is the noble Viscount prepared to tell the House that his Bill is beyond the reach of further criticism? Can he even claim with confidence, and he did put forward the claim, that the foundations of the Bill are well and truly laid? No one would, I think, have judged from the speech of the noble Viscount as we listened to his easy periods that there was throughout the country such an amount of uneasiness and misgiving with regard to the effect of the measure as I believe to exist at this moment throughout the United Kingdom. My Lords, this measure is a stupendous measure. It leaves a considerable part of the field of insurance untouched, but it, nevertheless, affects the whole fabric of society in this country. People are, I think, too fond of discussing this Bill as if it was one which merely concerned the comparatively limited interests of certain classes of the community. It affects the whole community. It is not merely a question of placating the friendly societies, or throwing a sop to the doctors, or to any other aggrieved class. There is a great deal more in it than that.
I call it a stupendous measure because, in the first place, it is a stupendous measure of taxation. The noble Viscount admitted, I think rightly, that the question of finance formed one of the most important aspects of the Bill. His Majesty's Government plead guilty, I understand, to a cost to the country which will, by the year 1932–3,
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have risen to something like £26,000,000. That sum capitalised would represent about £1,000,000,000. But some of us have not forgotten the extraordinary miscalculations which took place in regard to old-age pensions. We remember how the estimate of the cost of that measure rose from, £6,000,000 to £13,000,000, and eventually to something like £20,000,000 sterling. There are many who are deeply convinced that in this case also there has been a great underestimate of the ultimate cost. I have seen an estimate, apparently proceeding from high authority, which places the total ultimate cost at no less than £40,000,000 sterling; a sum which capitalised would represent an addition of no less than £1,600,000,000 to the liabilities of the nation. My Lords, that is an enormous liability.
VISCOUNT HALDANE: The noble Marquess appreciates that that is not out of taxes. That is the total cost to employers and employed. The State liability is much less.
THE MARQUESS OF LANSDOWNE: Whether the noble Viscount has regard to the part of the sum raised by taxation or to the cost met from other sources, it is, I maintain, a vast addition to the financial burden which this country will have to bear, and it comes at a moment when the country is already reeling beneath the financial burdens accumulated on its shoulders and when the credit of the country has reached a lower point than has been known within our time. The noble Viscount may say "If you want to have national insurance you must pay for it." That is a perfectly just observation, but I venture to dwell on the great cost of the measure, because it docs seem to me that in such circumstances the country is entitled to ask for precise information as to the amount of liability in which it is going to be engaged It has a right to be satisfied that the finance of this measure is watertight. It has a right to ask whether all this money goes to the right people and whether any classes which ought to be provided for are left out in the cold; and whether any of the money is wasted. So far as I have been able to study the subject it seems to me to be extremely difficult to answer all these questions in a satisfactory manner.

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If the Bill is so satisfactory to all concerned why is it that every day brings us some fresh protest or remonstrance from some part of the country? I do not like to weary your Lordships with an account of the representations I myself have received with regard to this Bill. I have received them from great chambers of commerce, those of Glasgow, Newcastle, and Exeter among them; from merchants and traders in Edinburgh. Glasgow, Aberdeen, Wigan, and London; from great agricultural organisations; from some of the most important friendly societies, including the Hearts of Oak Benefit Society, the Manchester Unity Friendly Society, the United Friendly Societies Assurance Company, and the National Union of Holloway Societies with a membership of 100,000. There have been public meetings all over the country. There was a meeting the other evening in the City of Manchester at which 900 firms were represented concerned in 200 different trades, and at which over 16,000 signatures were collected. I have had remonstrances from the General Federation of Trade Unions, and it is rather remarkable to find trade unions coming to your Lordships' House to protect them against the rash legislation of His Majesty's Government. Then there are the doctors, the shipbuilders, the clerks, and even agricultural labourers have sent me remonstrances. Surely there is not likely to be all this smoke unless there is a certain amount of fire behind it.
May I say half a dozen words with regard to some of the interests most affected by the Bill. In the first place, let me take the friendly societies. I was very glad to hear the noble Viscount recognise the importance of the place that the friendly societies occupy in our social system. We have, it seems to me, every reason to be grateful to them for the part they have hitherto played, and I am glad to find that in this Bill His Majesty's Government desire, so far as possible, to lean upon them and to respect their wishes. I noted that the noble Viscount urged particularly that what he called the esprit de corps of the friendly societies should so far as possible be respected, but I cannot help thinking that on that point he has not given entire satisfaction. It is quite true that the larger societies find themselves in a very strong position under the Bill. Their liabilities are assumed to some extent, and
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their reserves are liberated. They are, as the noble Viscount truly said, able to select their own lives, and the result of this Bill will probably be to make their position ever stronger than it is now.
But then what about the smaller societies? The noble Viscount will remember that when this Bill first saw the light only societies numbering more than 10,000 members were to have been allowed to retain their present position of independence. That limit, I am glad to say, has been reduced to 5,000; but my Lords, below the 5.000 limit there are a number of solvent and respectable societies, who greatly resent the idea of being grouped with other societies. They greatly resent the idea of, their being made to bear the deficits or to share the surpluses of the societies with which they are grouped, and they resent the effects of this Bill because it seems to them, and I think seems to them naturally, to diminish their independence and to deprive them of that individuality to winch they attach the greatest importance. It is typical of the manner in which this Bill was put through the other House of Parliament that an Amendment, which seems a not unreasonable Amendment, for reducing the limit of membership to 1,000 did not even receive any discussion at all.
The friendly societies, as the noble Viscount is probably well aware, are greatly exercised in their minds in regard to one particular point—I mean the proposal that sick pay, instead of running as now, under the old régime, from the first day, should run from the fourth day only of the insurer's sickness. That has occasioned them profound dissatisfaction, and I understand that they are also by no means satisfied with the proposal of the Chancellor of the Exchequer for dealing with the sum of something over half a million, which is liberated by that arrangement.
May I say one word with regard to the case of the hospitals?. This Bill has greatly disturbed and alarmed those who are interested in the voluntary hospitals of this country. I am bound to say it seems probable that things will go hard with them under the Bill. They have hitherto received very generous support, and particularly from the working classes them-

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selves. There are many of them who depend largely upon the small weekly subscriptions of the working men, supplemented, no doubt, by a regular subsidy from the firms by whom they are employed. What the managers of those hospitals feel is that, when the men are obliged to provide 4d. for sickness insurance and 2½d. for unemployment insurance, they will hesitate to continue that regular subscription which they have been in the habit of paying to the hospital fund, and the same thing, no doubt, will be the case with regard to the subscriptions of the employers. I noticed the other day a statement by Sir Henry Burdett, who has a right to be heard on the subject of voluntary hospitals, that this Bill meant "the death of voluntary hospitals": that it would have the effect of diminishing their income by one-half, and oblige them to close half the beds which they are at present able to maintain. That is a matter which certainly, to my mind, deserves the consideration of his Majesty's Government.
Then there is the case of the doctors. I know that His Majesty's Government have made almost superhuman efforts to propitiate the doctors, and they are quite right. But have they succeeded? I never open my newspaper without seeing a fresh protest from the doctors, and I think we must all feel great sympathy with them. Doctors with a working-class practice are probably amongst the most hard-worked and worst remunerated of our professional men. Some of the points which they have urged have, no doubt, been met, but some are still unsatisfied. The position in which doctors will find themselves under the Bill is not a very enviable one. They will be at the mercy, on the one hand, of the health committees, on which the representatives of the friendly societies are in a majority, and they are also, as I under- stand the Bill, entirely at the mercy of the Insurance Commissioners, who at any moment can strike a medical man off the panel, and thereby ruin his professional prospects. I cannot help thinking that His Majesty's Government, if they desire the Bill to work smoothly and successfully, should be at pains to satisfy the doctors on the points which they have raised. I wonder whether the noble Viscount has noted a movement which appears to be on foot for the establishment of a National Medical Union, the object of which is, I understand, to resist the effects of the Bill. A movement
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of that kind is not a negligible one, and I cannot help thinking that at this point, also, His Majesty's Government might do more than they have done to meet the representations which have been made to them.
With regard to the employers, the noble Viscount must be aware that amongst that class, also, the greatest uneasiness prevails. They ask themselves where these millions which the noble Viscount tells us they will have to contribute are to come from. Are they to come out of the wage fund? At this moment the general complaint amongst the working classes is that the cost of living is increasing and that wages are not increasing to a corresponding extent. Are they to employ fewer men? One of the objects of this Bill is to meet the evil of unemployment. Is the money to come out of the profits of trade? That is rather a serious look-out if that is the source from which the money is to be found. Does not that imply a new burden upon the commerce of the country, a new burden which it is not by any means prepared to bear? I met a gentleman not many hours ago connected with the engineering business. He told me that he believed that this Bill would put £30 on to the price of every locomotive built in this country for export. The noble Viscount reassured us by citing the example of Germany. He told us that in Germany employers are quite content to accept these responsibilities, but the noble Viscount forgot the little difference between the case of our manufacturers and the manufacturers of Germany. The manufacturers of Germany are not, as our manufacturers are, entirely at the mercy of unrestricted free imports.
A word as to the working classes. The working classes notoriously desire a National Insurance Bill, and one would have thought that they would be scrambling over one another to obtain this Bill, with all the attractions of that 9d. for 4d. which is held out as a bait. As far as I am able to ascertain the facts of the case, the working people regard the Bill with the utmost suspicion. They are asking themselves a number of questions. They find out that the 9d. provides them only with part of the benefits which they at present receive under the best friendly societies. They have discovered that the Government 2d. is not really 2d. at all, but a fraction which

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may vary and which does not by any means necessarily amount to 2d. They find that there is nothing for the man who is incapacitated and incapable of earning what is called a living wage. Then there is, I believe, among the working classes a widespread apprehension of the inquisition into their private affairs which is likely to take place under the Bill. They know they will be liable to a kind of supervision which will differ very largely from the kind of supervision to which they have been used under the friendly societies. There are other points which they regard with a certain amount of misgiving. For example, the taxation of young lives to meet the deficit on older lives, the equal contribution demanded from all trades, whether healthy or unhealthy, the equal contribution from all incomes, whether larger or rather smaller; and last, but not least, the needless in- elusion in the Bill of certain classes who are perfectly well able to take care of themselves. These are all points on which the working classes are, I believe, anxious and disturbed in their minds.
But there is one class of those who are affected by this Bill whose case seems to me hardest of all. I refer to the deposit contributors. I do not believe there is any point of the Bill at which its inequitable operation stands out more clearly. These are the poorest and the worst organised class in the whole community. They stand most of all in need of assistance, and under this Bill they get less assistance than any other class. In the first place, it must be remembered that the right which the friendly societies possess of selecting their own lives—necessarily the best lives—must have the effect of driving a great number of people into the class of deposit contributors. I understand that at this moment there are something like 800,000 who will come under the class of deposit contributors, and it is anticipated that that class will be very largely increased.
VISCOUNT HALDANE: Diminished. They must be very largely diminished as the friendly societies continue to take the young lives in at 16. The large number of deposit contributors arises from the fact of the lives being old. Many of the friendly societies will not take old lives but they do not discriminate between lives at 16 to any extent.
THE MARQUESS OF LANSDOWNE: Is the noble Viscount advised that 800,000 is probably the maximum of the deposit contributors?
VISCOUNT HALDANE: Yes, as soon as all the deposit contributors who are to come in come in under the compulsory clause the numbers should go down each year.
THE MARQUESS OF LANSDOWNE: I will take that from the noble Viscount, although my information leads me to a different anticipation. He is more familiar with the subject than I am. My point is this, that this class of deposit contributors really get nothing that can be called insurance in the proper sense of the word. All that the deposit contributor gets is a right limited by the amount of his own contribution. Let me take the case of a man whose contributions, including his own and the employer's and the contribution of the State, amount altogether to 8⅓. a week. At the end of a year, supposing the man has been employed 50 weeks, and that is a generous assumption, he finds himself with 35 s. to his credit. From that 35 s. would have to be deducted the charges for the medical benefit, for administration, and for sanatoria, totalling to 13 s. 9d. That leaves the deposit contributor with a balance to his credit of only 21 s. 3d. Supposing that the case of the maternity benefit arises, the man's account will be bankrupt. That seems to me to be a weak point in the Bill and one deserving of attention.
There is another matter which I must say fills me with considerable apprehension, and that is the administrative; difficulties which will arise when this Bill comes into operation. I understand, according to the reports of the actuaries, that it is anticipated that we shall have eventually to deal with a total a little below 18,000,000 of contributors. What an appalling figure that is. That means 18,000,000 separate accounts; it means a vast amount of correspondence, a vast amount of inspection, and a vast amount of collecting in small sums. Just consider for a moment the immense army of officials that will be necessary in order to superintend the working of this machinery. I have before now ventured to express my concern at the manner in which we are adding to the official army of this country. If the noble Viscount could keep his Territorial battalions up to strength in the same manner

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as His Majesty's Government keep their official army up to strength, there would be nothing to complain of. Let it be remembered that under this new dispensation the agents would have to supervise all these accounts and those who contributed to them, and to exercise a supervision infinitely more strict than anything to which the people have hitherto been used. Under the new system you will have people brought in under the friendly societies whom the Chancellor of the Exchequer described as new and undisciplined members and who will want a great deal of looking after. Do not let us forget that if the supervision is not strict, is not somewhat inquisitorial, the so-called minimum benefit may find itself considerably reduced. I understand that the expenses of management of the industrial insurance companies of which the Board of Trade takes cognisance amount to something like 17 per cent., and we shall be indeed fortunate if the amount of supervision expenses in this case does not exceed that percentage. Take it at 25 per cent. and you will have £5,000,000 that will not go to the necessitous people we desire to help, but which will be poured away in salaries and expenses of management.
And whilst this new official army will be enormously costly and vastly numerous, it will also be immensely powerful. Take the Insurance Commissioners; their powers are enormous, there is scarcely anything they cannot do under the Bill and under the regulations. I do not know that there need be any limit at all to their powers. With them rests the control of the relations between the approved societies and the insured persons. They can withdraw approval from any society. They control the local health committees. They can include some persons and exclude others. They have the power of penalising individuals without appeal, a not unusual feature in the Liberal legislation of the present day. Unless I am misinformed, the clause constituting this new department was passed in another place under the guillotine without discussion. On all these points that I have touched upon it seems to me that there are doubts to be removed, misgivings to be allayed, and inequalities which require to be redressed.
Can we be surprised that this should be so when we consider the history of this
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measure. It was introduced without any previous investigation, so far as I am aware, by the Government. I do not believe there is any precedent for any measure of social legislation of this magnitude ever having been attempted without some previous inquiry. I have no doubt there were some communications with the friendly societies, but there was nothing like a full and proper inquiry into the whole subject in all its branches. The noble Viscount referred to the precedent of Germany which he said, was instructive. I am told that in Germany there were inquiries which lasted three or four years before any legislation was attempted in regard to national insurance. Even then, as we are aware, that legislation turned out unsatisfactory at a good many points and had to be the subject of legislative amendment. Yet we know as a fact that the Chancellor of the Exchequer expected to get his Bill through Parliament in the month of August this year. Now it comes to this House swollen with innumerable Amendments and scarcely recognisable by those who studied the original Bill. At every stage of its progress it has been tinkered and transformed, and now in, I might almost say, the last hours of the session we are asked to address ourselves seriously to the task of revising this Bill. The original Bill contained 87 clauses and covered 78 pages. The Bill now on the Table contains 115 clauses and covers 140 pages. There is hardly a paragraph of the Bill that has not been rewritten and transformed. In the Committee stage of the House of Commons on Part I of the Bill no fewer than 32 clauses were put through without detailed discussion; 18 new Government clauses were put through in a single night under the guillotine. On the Report stage 77 clauses were not discussed at all, and 70 were altered by the Government without discussion. No fewer than 470 Government Amendments were put through on the Report stage. As to Part II, which was sent to a Committee upstairs, 16 out of 25 clauses were not discussed at all on the Report stage. It is quite true that a great many of these alterations were made in order to meet criticism, but will it be contended that because that is so the right of free discussion which has hitherto been extended to us on every great Bill should not be allowed on this? My Lords, I venture to think that we Unionists were not unreasonable when we asked that the

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House of Commons should not part with this Bill until it had been further considered. And I cannot but think that the Government were not reasonable when they met that demand by the charge that we desired to wreck and obstruct the Bill.
I come to the vital question which we have to ask ourselves this evening—What ought this House to do with the Bill on the Table? Perhaps we ought first to ask what can we do. We naturally turn to that fragment of a written Constitution with which His Majesty's Government presented the country in the month of August. Under the Parliament Act this House has a right in ordinary cases to claim three rejections preceded by a period of two years for the examination of a doubtful measure, but in this case I am not sure that the conditions laid down by the Parliament Act have been complied with. Under that Act this House is entitled to a full period of one month before it disposes of a measure. We are to be put off with a few days only, and I therefore take it that, if we were to reject this Bill, that rejection could not be counted as one of the three rejections to which we are entitled. That seems at any rate arguable. If I am right, we are in this position: that we could, if we stood upon our privileges, claim four rejections altogether and a period of two years, dating not from the Second Reading this last spring, but from the Second Reading of the measure next year whenever it might be reintroduced into the House of Commons. That would extend our period of delay to a date somewhere in the year 1914.
But we are bound to ask ourselves what we should gain, what the country would gain, were we to insist upon our full rights. I venture to suggest that we ought to think twice before we embark upon a conflict which would inevitably be long and bitter, and would probably be also infructuous. Our attitude, as I conceive, is anything but one of uncompromising hostility to this Bill. We wish it to be dealt with; we do not desire that there should be any needless delay. I agree with the noble Viscount when he told us that in his view a long postponement of legislation upon this subject would be for many reasons most unfortunate. But even if we were to claim the full period to which we are entitled, could we have
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any security that the Bill would in the meantime be materially improved? Now noble Lords opposite would not be able to alter and improve the Bill because they would have to return it to us under the Parliament Act in the identical shape in which they presented it at first. We, on the contrary, on our side would probably stand a very poor chance of obtaining in such circumstances a calm and dispassionate consideration for the Amendments we might desire to suggest.
But quite apart from the attitude which the Government might be expected to adopt in reference to changes proposed by your Lordships, we have this most important point to consider. This Bill is not a Money Bill, but it is a Bill which spells money at every clause, and I regard it as absolutely certain that if your Lordships were to set to work to alter and amend it, you would be met at every turn by the claim of House of Commons privilege. We have had in this house painful experience of the manner in which that claim has been insisted upon by the other House of Parliament. I am sure many of your Lordships remember a leading case that occurred when we were dealing with the Old Age Pensions Bill, when an Amendment which everybody knew was an improvement was contemptuously sent back by the House of Commons, and when the Prime Minister observed that the moment was not one for relaxing the privilege of the House of Commons. And yet we all know the Amendment was afterwards embodied in a Bill which was passed with everybody's consent. Therefore I should not look forward with any hopeful anticipation to a struggle with the other House of Parliament over the amendment of the Bill on the Table. I am afraid that if we were to hold up this Bill for amendment, we should find ourselves embarked in a long and bitter controversy in which the hands of this House would virtually be tied. There would be regrettable delay, our action would be misrepresented, and in the end we should be able to achieve very little.
We have no wish either to wreck or to defer the operation of the Bill for two or three years. What we hoped for was that there would be breathing space given in the other House of Parliament, breathing space for the classes affected, breathing space for His Majesty's Government to take

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stock and to amend their Bill, breathing space above all for the House of Commons, which is not hampered by privilege, to deal with the measure in whatever way might seem to it necessary. That interval might have been turned to good account. There might have been an inquiry—a Royal Commission or Joint Committee, I do not care which—to examine the possibility of correcting some of the blots in the Bill which might then have come up to your Lordships' House, not as the hurried outcome of a confused controversy, but as representing the deliberate and matured judgment of the other House of Parliament. But that breathing space, as we all know, was refused peremptorily, and we know very well why. We know that the Government have other liabilities to meet next Session of Parliament and we know that the inclusion of this Bill between the interstices of Home Rule, Household Suffrage, and Welsh Disestablishment, would not have been exactly convenient to His Majesty's Ministers. From the moment that reasonable request was refused in the House of Commons it does not seem to me to matter greatly whether this House takes a few days more or less for the examination of this Bill.
May I say one word as to an alternative proposal, which has received a good deal of influential support? It has been suggested that your Lordships might pass this Bill tacking on to it a clause under which it would be necessary that the measure should be referred to a poll of the people. That is, I admit, a plausible and attractive suggestion, but I should be slow to recommend it to your Lordships. I think there are obvious reasons against it. In the first place, there is at this moment on the Statute-book no machinery for the Referendum. If we were to endeavour to legislate for that purpose we should find ourselves involved in a controversy, not on the merits of the Bill, but on the merits of the Referendum as a piece of Constitutional machinery. What seems to me more serious still is that if this procedure were to be adopted the electors would be placed in the position of having to choose between the Government Bill and no Bill at all. That is not a dilemma we should like to face. We desire the Bill to pass, but we desire it to be reconsidered in very important particulars. I am afraid that resort to the Referendum in these circumstances would
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only result in a misleading, and, therefore, mischievous verdict. Our choice, then, I conceive, is between the alternatives indicated by the noble Viscount in his speech. We have to choose between this Bill, with all its defects, with all the friction and the litigation to which we believe it will lead, with all its mistakes, some of them, I am afraid, irreparable—we have to choose between this Bill and two or three years of acute and distracting controversy between the two Houses, controversy, which, as I pointed out just now, would probably in the end be absolutely fruitless.
My Lords, we have come to the conclusion that the acceptance of the Bill is the wiser course for this House to take. There is only one thing which we will not advise your Lordships to do, and to which I certainly decline to be a party—I mean a sham attempt to revise this Bill in the few days that remain to us—an attempt that would be handicapped, on the one hand, by the limited time at our disposal, and, on the other, by the knowledge that the greater part of the Bill is of a nature which we are unable to touch or to amend. Such an attempt would be made with a certainty that we could not insist upon most of our Amendments, and, worse than that, that we should be saddled with a share of responsibility for the injustice and extravagance which are written large upon many of the provisions of the Bill.
LORD SANDHURST: My Lords, I agree with what has just been said by the noble Marquess. I personally would most willingly have welcomed more time for the consideration of this Bill, because it not only affects every household, but has to do with the present and perhaps the future interests of one of our most learned professions, and as it at present stands it may have an everlasting effect upon the fortunes of some of our charitable institutions. I should not have ventured to intrude myself upon your Lordships' notice had it not been for the fact that for the last thirty years I have been concerned in the work and management of some of the large London hospitals which are supported by voluntary contributions, and also that when I had the honour of being Governor of Bombay I had under me, I should think, a greater number of medical officers at one time than ever fell to the lot of an administrator, because those were the days of the beginning of the plague.

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It is impossible for me to follow my noble friend through every sentence of his speech. I propose to deal only with that portion of the Bill which has reference to the doctors and how they may be affected, and also as to the effects of the Bill on our charitable institutions and hospitals. Before I come to that, I am anxious to ask my noble friend's attention to one or two matters in connection with this Bill which he did not touch upon. One is the question in regard to midwives. Under the Mid wives Act, midwives are now bound under penalty to send for a doctor in cases of necessity, and the local supervising authority at present can pay for this out of the county funds. I should like to know at a future stage whether some arrangement could not be made so that the society might make arrangements for the reimbursement of the fees which will have to be paid to a medical man whom the midwife, as I have said, is under a penalty obliged to call in.
With regard to the deposit contributor, I should very much like to see some plan devised and put in the Bill by which the insurance could be paid in a lump sum. By such means the deposit contributor could assume the position of a person insured by a society, or, again, a child could be insured for life or any shorter period by the payment of a lump sum. It is easy to imagine cases arising in which such procedure would be advantageous and advisable, cases, for instance, where people wished to provide for the children of faithful servants, where an employer wished to provide for the children of his employés, and for those whom the societies would not take. I believe this is well known as a principle which is taken advantage of by insurance societies; and further than that, I think there would be little trouble in proving the tiling to be financially sound.
Then I do not think it is mentioned in the Bill whether the guardians can take maternity relief into consideration as regards applicants for indoor relief. That is to say, would an unmarried woman who is insured be liable to be refused admission to a Poor-law infirmary for confinement on the ground that she was not destitute? At present if she is destitute she can claim to be admitted to those admirable State hospitals. This is a matter of very great importance, because if she is not admitted this unfortunate girl is worse off than she was before. Then it seems necessary, I
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think, to secure that the maternity benefit paid to the husband shall in reality be applied for the benefit of the wife. I do not think that the question is quite clear as it stands. We all know that it sometimes occurs that women are not tended with all the care necessary, and a bad character might very easily spend the money in drink or on anything else. I should very much like to see that put beyond doubt. It is possible, in fact very probable, that my reading of the clause has not been correct, but my noble friend will, perhaps, be able to inform me of that at a later stage.
I listened with very great interest to what my noble friend said in regard to the medical men. We all know that they put forward in the first instance six points through the British Medical Association. Four of those points, I think I am correct in saying, are already embodied in the Bill, and the others can be met under the machinery provided in the Bill, so far as is consistent with the public and professional interests, provided that the financial requirements are satisfactorily adjusted. No doubt there may be difficulties about the arrangements with the doctors. It may not be easy to get the medical profession promptly into administrative line, but we may feel confident, I am sure, that while these arrangements are in the course of making or proceeding to perfection the poor people will not suffer from want of medical attendance. I think that the "flat fee," as it is called, in the case which the noble Viscount mentioned was 3s. As the House knows, the estimate for the "flat fee" was made on the analogy of what is known as "club practice." At present the medical man dealing with the members of a club treats them at a flat fee of, say, 4s. per annum, but I fear that under the working of this Bill it will be found that the conditions and results to the medical man will differ very much from the present club practice. In some respects that is no doubt to be desired, but when the medical man has had his flat fee of 4s., he has had into the bargain, in addition to the members of the club, his practice extended to a number of patients who pay fees per visit rather higher than the noble Viscount stated. In the cases I am alluding to they pay as much as 2s. 6d. or 3s. 6d., and those private patients as a rule form the bulk of his income and practically enable him to take the number of poorer patients at the flat fee. But I think it is reasonable to

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anticipate, if my noble friend's Bill is going to be a success, that the greater number of these private patients will merge themselves into insurance paying people, and the consequence is that the private patients will disappear and also the margin which enables the medical man to take the poorer patients at a lower fee. I am afraid it will be found that his remuneration will be insufficient.
But, again, this ordinary domiciliary attendance at 6s. per annum is really only half the story, because what about the journeys, special cases, minor operations, adenoids, anæsthetics, and so on? All these special services will be in addition to the ordinary work, which of itself can hardly be properly remunerated at the 6s. per annum. It will follow, therefore, that these special services cannot be properly performed or performed at all, and recourse must be had to the hospitals now supported by voluntary contributions. And to show what this means as regards the work of the general medical hospitals at present, I can tell you from my own experience that at one of the largest London hospitals in the summer time it was about two and a-half months before a child could get operated on for adenoids. Then it must be remembered that the insurers will be paying insurance money for this relief, and they will naturally expect it to be administered to them with as little delay as possible; but in addition to these small operations there are countless other medical and surgical cases by which an individual is incapacitated from going to work, and is the society to go on paying while the patient is waiting for a bed as well as during the time that the operation or the treatment is effecting its cure? If so, this will happen, that while you have the great anxiety of the patient to obtain the bed in the hospital you will also have your societies backing him up by urgently appealing for additional hospital accommodation.
My Lords, this leads me to the call on the hospitals and their work in connection with this Bill. I give my noble friend this admission, that it is possible—indeed, I think it is more than likely—that under the Bill the work of an out-patients' department may diminish, that the hundreds of thousands of out-patients will most perceptibly decline. But, on the other hand, there is in connection with the out-patients' department of a large hospital a variety of what are known as special departments
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where maladies or diseases in connection with the eyes, the ears, the throat, the nose, and a host of other things, are dealt with; special departments efficiently provided with the most expensive and up-to-date apparatus, as well as presided over by the best brains that can be found among very distinguished medical men, I expect the result will be that the pressure upon these departments, instead of diminishing, will be considerably increased in regard to their work. But, after all, it is not the outpatients who are the most costly. The in-patients are the more expensive, and, as I have already shown, the pressure of the numbers of would-be patients, supplemented by the pressure of the societies for beds will, to my mind, cause the necessity of increasing the existing hospital accommodation, and hospital accommodation will be still more necessary than ever.
It is possible, of course, that much may in future be done by dispensaries for the treatment of trivial cases. It may be necessary for them to act as clearing houses for different diseases. I cannot help thinking that something of the kind will have to be set up in regard to the sanatorium treatment. But except by taking money from sanatorium benefit for diseases other than tuberculosis I do not see where any funds are to come from to deal with this matter; so we have it again that until some such clearing house system is set up, all the minor cases as well as the more important cases will, as now, be thrown indiscriminately on the general hospitals. Therefore in spite of the desire expressed by the Chancellor of the Exchequer, the tone of which I quite appreciate, not to bring in the hospital question. I cannot help thinking that it will open itself with surprising and increasing insistence after this Act has been in operation for some little time. But while there is no money available that I can see for setting up dispensaries, or for giving money to hospitals, there is machinery to a certain extent. I observe that under Clause 20, and I think also under Clause 63, a health committee or a society is empowered to subscribe to hospitals, but no society has funds at its disposal, so far as I can see, outside those allotted to sanatorium and medical benefit, all of which would be required for these particular purposes; and it can hardly be doubted that no society will subscribe to other institutions until at least their first triennial valuation shows a surplus.

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The liability for the treatment of the sick under the Bill seems to me to be tremendous. Under Clause 8 (b) we find this benefit conferred—
"Treatment in sanatoria or other institutions or otherwise when suffering from tuberculosis, or such other diseases as the Local Government Board, with the approval of the Treasury, may appoint."
This may embrace the whole of the Pharmacopœia, the whole gamut of disease and medicine and surgery, and your only hope and refuge, except for these medical officers who I venture to think are hardly sufficiently remunerated, will be the general hospitals which are supported now by voluntary contributions; and what makes me anxious about it is this—I think this was referred to by the noble Marquess opposite—that all the time this work is increasing, and I have not the least doubt it will increase, the difficulty of getting hold of funds is increasing also day by day. I may mention that all these hospitals are attended and served almost entirely by medical men without any pecuniary reward whatever. I am not speaking of the three hospitals known as the "endowed hospitals." Your Lordships know only too well, by the innumerable circulars and appeals you receive daily, the straits to which hospitals are reduced. I have myself sent out thousands upon thousands of appeals. I do not see how their situation is likely to improve; I think it is likely to get worse. As was pointed out by the noble Marquess, employers now contribute very generously to these institutions; in some cases workers, as in the North of England, contribute in various centres, and their subscriptions, made by weekly donations, amount to many thousands of pounds in the year—I believe in one place to as much as £17,000. But under this Bill it will be enacted that for medical relief both the working man and his employer shall pay their contributions by another system, and, though I do not adopt the figure which I have seen set out, it has been said that employers will pay seven or eight millions. But one can see very easily that it will cost a great deal of money.
I have no doubt that certain employers, rich men and others, will continue to support these charities, but still you cannot expect them when the outgoing is so great—is necessarily so great—under
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the Bill to subscribe in the large way they have done before. There are three avenues in this Bill by which assistance might be obtained. I have already referred to the medical sanatorium benefit. I have referred also to the friendly societies and their subscriptions, and also I have remarked, I think, that no well-managed society would give a subscription unless its position in regard to surplus was proved by a proper valuation. But there is a third way, by way of contribution from the rates—half from the rates, and half from the Treasury. We who have had to do with these authorities know very well that unavoidable and necessary delays must occur, and in the meantime the position of hospitals gets more serious. It seems to me really necessary that we should have in this Bill, or else in an amending Bill at no very distant date before it is too late, some provision for enacting an institutional benefit to be administered by the committees on the same lines as sanatoria.
There is one more point in connection with these hospitals which I think should not be lost sight of, especially in view of what appears in the Memorandum and in view of what was said by my noble friend about the prevention of disease. In connection with these general hospitals, or a great many of these general hospitals, in London and the country are medical schools where lecture rooms, and libraries, and all the paraphernalia of medical education are to be found, as well as the material in the wards and in the out-patients' department for observation and study by the students. But my fear is this, that if these great charities have to any considerable degree in the course of time to shut down in London and the country, medical education will suffer. My noble friend has mentioned it, and I venture to think that this is a matter of very real importance, because the progress of science is bound up with the arrangements which must be made in the Government Bill. We must remember that the success and solvency of the measure depend upon the prevention of disease, and only by an advance in science and the promotion of better methods for preventing disease will the drain on sick funds be diminished, and only as they diminish, I think, will you manage to make your scheme a success.
A very important thing is medical ability, and this in its turn depends on

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the service under the Bill being such as to attract good men. If the Bill merely extends the undesirable condition of the club or contract practice, I think it will mean that in a future generation recruits for the medical profession may not come up to the high standard of to-day, and the development of preventive medicine depends on enthusiastic labour and co-operation of the best intelligencies. I feel very strongly that the medical charities may suffer, and I am also anxious about the condition of the doctors. It has been mentioned that there may be very great difficulties of administration. I was twenty years ago chairman of an inquiry into metropolitan medical relief by a Committee of this House, and in our Report is found this statement—
"It was suggested that it might be advisable to map out London into districts, so that a person leaving one district, and, therefore, his medical association, would easily attach himself to the medical provident association of another district; but the Committee, while agreeing that such an arrangement would be highly desirable if practicable, doubt whether in London, with its heterogeneous and migratory population, such an organisation would be possible."
If that was true then—and I think it was—it is still more true now, because of the increase of population and the greater facilities for moving that population about. I cannot help fearing that the charities will suffer. It is so very easy to interfere with an old system, and possibly to put something up in its place which, however good on paper, you cannot by any means be sure will act efficiently. The older system of charitable relief and the hospitals themselves got on extremely well with the Poor-law authorities and kindred institutions of that description, and I should very greatly regret if their usefulness and efficiency is in any way curtailed by this Bill. No doubt the imperfections of the Bill will be remedied in the course of time as new generations grow up that have become accustomed to the intrusion and inquiry which will be necessitated, and then it will be found to be a vast and widespread benefit. We have been told several times that it has taken about twenty-five years in Berlin to get the thing near perfection. That is an inspiring and cheerful outlook. And if that is so I think we might very easily, if there had been more time, have gone into and revised this Bill, especially as I sincerely hope that the Bill will turn out to be a success and benefit to a great
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many people. I conclude by expressing my regret once more that we have not had time to remedy some of the imperfections that admittedly exist in the Bill.
THE EARL OF DUNMORE: My Lords, if it were not for the exigencies under which this House is called upon to consider this Bill, which is one of the longest and most complicated Bills ever put before your Lordships' House, I should have hesitated to intervene in the debate. But as a member of the London County Council I have been asked to draw attention to those features in the Bill in which they and many other local authorities throughout the country are concerned. This Bill sets up a local health committee in every county and in every county borough, the committee to consist of not less than forty members. It is very important to note how the membership of these committees is made up. Only one-fifth of the total membership is to represent local authorities, and three-fifths to represent the persons insured under the Bill. A protest was handed to me just now in regard to these local committees addressed to a member of this House from the Shipbuilding Employers' Federation, representing about seven millions of money. They protest not only against the injustice of the incidence of the Bill, with regard to which I shall have a word to say later, but also against the exclusion of employers from the local health committees. Now if you turn to the composition of these local health committees you will find that local authorities are most inadequately represented. They are only represented by one-fifth of the total membership. These local health committees are to administer medical and sanatoria benefits, and if the funds provided under the Bill are insufficient to meet their estimated expenditure they can apply to the Treasury and to the county councils to sanction the difference between their income and their estimated expenditure.
Now, my Lords, what would be the position of the local authority? The Treasury, with the mass of the taxpayers of the United Kingdom at their back, may be willing to sanction this excess of expenditure, but what may be a very slight affair to them may be a very heavy burden to a district, and the local authority for very good reasons may be unwilling

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to acquiesce in the proposed arrangement under which the extra burden would be thrown upon the rates. Your Lordships must remember that there is no incentive to economy on the part of the local health committees. They are not responsible to the ratepayers. They are a standing body, and any scheme they want to bring forward, although it may be excellent in itself, may represent a burden which the ability of the district would be totally inadequate to bear. The local authority will be in a very difficult position; they will be placed in the position of having to refuse to give assistance towards objects desirable in themselves and towards which the Treasury have intimated their willing ness to subscribe. The health committee under such circumstances will be in a position to place great pressure on the local authority. They will be able practically to force expenditure on that body to which they will not be disposed. In fact, we shall have an unelected body interfering with and practically controlling an elected body. I understand that it is the intention of the Government by their insurance scheme so to reduce the poor-rate as to compensate the local authority for any extra burden which may be put upon them. But, my Lords, how can this be, the case when the Government's subventions in aid of the rates are already totally inadequate, and have been admitted to be totally inadequate? I would further point out that as the medical benefits affect some 15,000,000 people, a very small proportion of whom are on the poor-rate, any reduction in the poor-rate would be in no way commensurate with the new liabilities which will come on the local authority by these deficiencies in local health committee funds. Your Lord-ships must remember that the medical benefits are going to affect people whose incomes go up to £160 a year, and it is ridiculous to talk of such people being in any way connected with the poor-rate. The local authority, in fact, under the provisions of this Bill will be undertaking a new financial responsibility in respect of vast numbers of people who are in no way connected with the poor-rate.
If the Government's contention were correct, if the effect of this Bill were to reduce the poor-rate, and if the Government's subventions were sufficient for local expenditure, which is certainly not the case, even then I should feel compelled to
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protest against the introduction of an unnecessary complication into the already complicated relations between Imperial and local finance. Those complications, I think, are admitted on both sides of this House. In fact, your Lordships were led to believe that His Majesty's Government were going to deal with the whole of this question of Imperial and local expenditure within the course of this year. Up to now I regret to say that His Majesty's Ministers have so far not seen their way to redeem their pledge. I protest, as I have protested on a former occasion in this House, against the readiness with which Parliament imposes new obligations and new burdens on the ratepayers without the ratepayers consent. I hold that money raised by rates ought to be expended by those bodies who are directly connected with the ratepayers. That principle does not obtain in this Bill. When this Bill was first introduced we were led to believe that the benefits of the Bill would be met by the arrangements for contributions from the employer, the employé, and the State, which would go to make up the total. But now what is the ease? The employer will pay his fourpence as an employer, but he will also pay an increased amount as a ratepayer. The employé will pay his subscription, and the State will pay, as the noble Marquess pointed out, something less than a penny of the money, I think it is, and the balance of the burden by this Bill will be divided between Imperial taxation and the rates. Half of it will fall on the rates. I said just now that the Government would give less than a penny, because, in spite of what the noble Viscount said, the two-ninths which the Government pay of benefits when they mature is a very different thing from paying twopence into a fund where it would be allowed to accumulate and earn interest in so far as it was not drawn upon.
Now it is true that the State is only deferring the evil day. In effect, what they are doing is pledging future Governments to meet vast and practically unknown liabilities. I think the noble Marquess the Leader of the Opposition said it would represent something like £1,600,000,000 of capital. Well, quite apart from that, there may be unknown expense and unknown expenditure going to be put on the rates under the clause with which I have just dealt. In any case the financial liabilities with which future Governments will be

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faced is bad enough, but I see no reason why in the meantime an unknown and unlimited burden should be placed on the ratepayers. In all previous experimental legislation—and surely we are justified in saying that this scheme is experimental—a limitation has been put on the amount of the rate which could be imposed If you take the Feeding of School Children Act you will find that a ½d. rate was imposed by Parliament; but in this case, if you examine the provision dealing with the relation between local health committees and local authorities, you will see there is no limitation on the burden which can be placed on the rates.
As regards the Government's contention as to the effect of insurance on Poor-law expenditure, I think that must be intended to apply to those more fortunate individuals who are able to become members of approved societies. Whatever may be the case in regard to members of approved societies, I have little confidence that those coming under what is known as deposit insurance will in any large numbers be removed from the poor-rate. The noble Marquess dealt just now with the hard case of the deposit and Post Office contributor, and I noticed that the noble Viscount in introducing this Bill said there were 800,000 deposit contributors, and that in future as these young persons could come into the scheme, that probably would diminish. With all respect, I venture to challenge that statement. I have here the actuarial report on this Bill, and I notice this statement—
"As regards the increase in the future of these compulsory contributors who fail to join approved societies and become deposit contributors, it is in the nature of the case almost impossible to make an estimate which will be of any value."
Then the actuaries go on to say—
"On the other hand, their numbers will be recruited not only by those persons entering the scheme in future at the age of sixteen who may fail to join societies, but also by the transfer of a certain number of persons from the ranks of the societies owing to prolonged unemployment."
The scheme for these persons who are rejected by approved societies is not an insurance scheme, as the noble Marquess remarked this evening. The existence of the Post Office contributor entirely vitiates the claim of this Bill to be called a National Insurance Bill. So far as sickness and disablement benefits are concerned they cease as soon as the amount of the Post
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Office deposit is exhausted. That man will then have nothing between him and the poor-rate. The freedom of choice as to accepting members which is left to these approved societies, and I think necessarily left to them, will greatly strengthen these societies. They will get all the best lives. The weaker and smaller societies will get the inferior lives; and the worst lives, those who are most in need of insurance, will drift into the Post Office deposit scheme. I think it is an unfortunate feature of this Bill that its whole tendency in working is to separate the strong from the weak, and give most to the strong and least to the weak. It divides up the people of this country into good lives, middling lives, and bad lives, and it is the last who will reap the least benefit from the Bill, although relatively in proportion to their means they pay the most.
In a great national scheme in which the principle of compulsion is applied to all, surely there ought to be some attempt at equality of treatment? The Post Office contributor is not the only case of inequality of treatment. It will be seen that at the commencement the scheme applies one flat rate for both young and old. I listened with great interest to the noble Viscount's speech in which as far as I could make out—the noble Viscount will correct me if I am wrong—he said that in order to get the older people into the scheme the great expense would really devolve on the State. I think that is the noble Viscount's contention—that the State would be practically paying one penny and five-ninths to enable the older people to come into the scheme on the same flat rate as the younger people. Now, what I make out so far is this. In order to allow the older people to come into the scheme at the same rates a vast sinking fund, amounting to, I think the noble Viscount said, £63,000,000—I have made it out to be £66,000,000—is to be provided. I make out that that is built up by taking out of the contributions of every member of an approved society a sum amounting to a penny and five-ninths in the case of a man, and 1½d. in the case of a woman. After all, the State—the Government, that is—pay nothing into this common fund except a liability. They only pay two-ninths of these benefits when they mature, and therefore I cannot understand the noble Viscount's contention that it is the State which is building up this sinking

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fund which is going to pay off the deficit caused by these older people coming into the scheme.
VISCOUNT HALDANE: May I just explain? It is quite true that one penny and five-ninths comes out of what the employer and employed pay, but that is made up by the State paying two-ninths of the benefit. The one balances the other. If you take the age of 16 you will find the two contributions are exactly balanced, and the one cancels the other.
THE EARL OF DUNMORE: If I understand the noble Viscount's contention, it is quite true that one cancels the other at some future date. But it does not cancel it to-day. The young people who enter the scheme to-day are going to pay, and are to be compelled to pay, in order to enable the older people to come into this scheme.
VISCOUNT HALDANE: They exactly cancel at the age of 16.
THE EARL OF DUNMORE: In 16 years.
VISCOUNT HALDANE: No, at 16—at the initial age.
THE EARL OF DUNMORE: I am afraid I cannot yet see the noble Viscount's contention. If the State paid 2d. into the fund at the present moment, and that fund bore interest, and if they paid in their contribution at once, I could see it; but as they only pay the liability and are only responsible for two-ninths of the benefits when they are approved, I cannot see by any reasoning that you can say the young are not really paying towards the fund more than they need in order that the older people may enter into the scheme. I must apologise to the noble Viscount if he is right, but I really cannot see the noble Viscount's contention.
Then to turn to another point in respect of young persons, to a matter in which the London County Council and many other local authorities have taken a deep interest. Under Part I of the Bill, when you come to consider this scheme you will find that, contrary to the whole trend of modern social legislation, this Bill offers direct incentives to the employment of juvenile labour. If you turn to the part of the Bill which deals with health insurance, your Lordships will see that the employer has to make a weekly contribution in
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respect of each person employed. Certain of the employed are exempted from insurance. A person of 70, or a person having a pension or other property amounting to 10 s. a week is exempted from contributions under the Bill—he has to make no contribution; but for obvious reasons the employer has to make the same contribution as he makes in respect of other people. There is another class, young persons under the age of 16, who are also exempted from this Bill, and in this case, for some unknown reason, the employer is also exempted from making his payment. When you turn to the part dealing with unemployment insurance the same thing obtains there. Young people up to the age of 16 are exempted from insurance, and again you will find the employer is exempted from making his payment. I can only say the reason is quite extraordinary. One of the greatest evils which we are contending with to-day is the unhappy facility with which young persons get into blind alley occupations, and yet here in a great social reform scheme you find provisions which offer direct incentives to employers to employ juvenile labour. Indeed, there are inducements to enable employers to get rid of these young persons when they reach the age of 16—that is, at the insurable age—and replace them by other and younger employés.
My Lords, I am not going to detain you at this hour by going further into a Bill which we have really had no time to consider, a Bill which covers 140 pages of print. There are many of your Lordships in this House who are well acquainted with, and who have worked a good deal at, social work, and who, I know, would have been quite willing to give your services towards making this Bill what it ought to be—a beneficial measure to the country. I regret that a vast social reform scheme closely affecting the interests of millions of our people should be forced through the House of Commons under the guillotine and those other instruments whereby free discussion is not satisfied, and that it should be sent to your Lordships' House under circumstances which preclude you from giving it even that attention which would be given to a Bill promoted by a private company in their own interests. It is not thus, my Lords, that the country can look forward to well considered schemes of social reform being placed upon the Statute Book.
LORD CLIFFORD OF CHUDLEIGH: My Lords, the circumstances in which this Bill comes to your Lordships' House under the very limited powers which are left to us to improve its defects caused by those gaps in the discussion in the other House allow me only briefly to point particularly to Clause 62, upon which I intend to put down one Amendment, because it is to a certain extent outside the actual provisions or the actual purpose of the Bill. The Bill is an Insurance Bill, but Clause 62 adds to it certain penal provisions which have nothing to do really with the question of insurance. To that extent Clause 62, the clause upon excessive sickness, might be said to be beyond the original purview of the Bill. The point to which I wish to call the attention of the House is one of those which was entirely undebated in the House of Commons, and is one of vital importance on general grounds. For any injury or any injustice that may be done to the individual insurer the Bill provides ample legal remedy, and an appeal; but while the penal provisions in Clause 62 may affect individual holders of property to the extent of thousands of pounds, while they may penalise an employer of labour in consequence of the conditions and nature of the employment, which may be in itself one that involves danger and one for which the Legislature has already imposed certain provisions and restrictions which are intended to minimise the danger of that employment, this penalty is imposed by a person who is sent down to inquire, without any of those safeguards which hedge the Judicature and other public bodies, and without any limit as to the amount of penalty he might impose. I do not think that there is any instance of such powers being given to an individual who has no legal position and not even a legal appointment.
In a letter which some of your Lordships may have seen in the papers addressed by the Chancellor of the Exchequer to Sir Ryland Adkins, the Chancellor says that he would sooner withdraw the clause than have the appeal which we propose—that is, an appeal from any order made by a person holding an inquiry under this section to two or more of His Majesty's Judges sitting together, on a point of law, or on the merits in respect of the determination or rejection of any evidence, such appeal to be made by any
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person, company, or authority which feels aggrieved by the decision of the person holding such inquiry, and the decision of such Court of Appeal as then constituted to be final on all issues. Now I intend to put down this Amendment in the Committee stage of the Bill, and my reason for particularly mentioning it in this case is that I have a hope—a very faint hope—that, even if this Amendment cannot be conceded, at least something may be done to give the person who is making this inquiry some independent position, and to insure that this appointment shall have the sanction of some high judicial authority who will see that his qualifications, his impartiality, and his independence may be equal to the enormous powers which are likely to be put into his hands. The Chancellor of the Exchequer's fear is that if an appeal of this kind is given it may frustrate the objects of the clause. On the other hand, we feel that it may be very likely that the absence of an appeal may act in exactly the same way, because a public health committee might be unwilling to institute such an inquiry when they have over their heads the feeling that, great and difficult as may be the points for discussion, it is an inquiry from the issue of which there is no possible stepping back; and I hope that either some limitation of the amount which may be entrusted to this officer may be made, or else that some greater safeguard than exists at present may be made for the appointment of one who is competent to the task.
Then there is one other point I should like to mention in the hope that the noble Viscount will introduce in his reply something upon it. That is the point which was alluded to by Lord Sandhurst with regard to the position of the hospitals. As I take it, under the Bill the position is this, that the subscriptions and the revenues of the hospitals will undoubtedly fall off. The hospitals will be left with empty beds which their funds will not allow them to support, and it is the duty of the health committee and of the friendly society to discover some means by which such cases as require hospital treatment may be met and provided for. The societies will have the power of making terms with the hospitals, and they will presumably have considerable funds with which possibly they may be able to make favourable terms to open those empty

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beds of the hospitals. But the health committee, I take it, will only be for the purpose of making arrangements with the hospital as to the medical benefits at their disposal. Therefore the result will be that the hospital beds, so far as they exist, will be filled by members of the various societies and not by those who are Post Office depositors and who come under the local health committees. I think this would be very much to be regretted, because it will be the poorer members and the older people who are not in the societies who will probably require the use of the hospitals most and they will be those against whom the hospitals will have to close their doors.
THE LORD BISHOP OF BANGOR: My Lords, the noble Marquess opposite has enumerated a number of points in this Bill in regard to which great anxiety is felt as to the injury that it may probably, or very likely, cause, and I have to ask myself whether, if he thinks that the Bill here and there on all these points will do great harm, we are in this House acting a patriotic part if we follow the noble Marquess in carrying out what I understood the noble Marquess's view to be-—that is, not even in the limited time at our disposal to make some attempt to amend the Bill. I suppose this House has a very large number of experts, men whose authority in finance and philanthropy and in various other ways is second to none, and I ask myself again, Is all that wealth of experience; and knowledge not to be put at the service of the country at a time when a Bill so largely affecting the fortunes of all classes is about to be passed?
What is this House for but to try as best it can to revise and make good in such ways as it may the measures that are brought before the country? It is said that we should possibly throw ourselves into collision with the other House. Well, should we? I understood the noble Viscount to deprecate our employing much time in making any Amendments to this Bill. But still are we to understand that, however good an Amendment may be, however well calculated it may be to obviate some of those points on which the Bill is likely to do mischief, the Government will advise the House of Commons to reject thRt Amendment and say that if we insist upon
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it they will not go on with the Bill? I cannot believe that. The noble Viscount said the foundation was well and truly laid. Surely our plain duty is, if we think there is any inequality in the foundation or anything that will cause the superstructure to fall down, at this hour to make it more effective. I suppose all of us who sit on this Bench were glad to hear that a Bill of this kind was going to be produced. All our lives we have amongst such people been inculcating thrift, and we were all glad that a measure of national insurance should come, and we welcomed it, and every one of us would be sorry if the Bill were lost. It occurs to us all that there are a great many points in which it might be amended. I do not mean points of finance, with which, perhaps, this House ought not to meddle, but other points. As I read this Bill on Saturday and tried to understand it, it was, I am afraid, rather like an old lady making out a cross-country journey in Bradshaw; and it occurred to me that a woman living with a man not married was put in a better position than a woman living with a man in lawful wedlock. No doubt I was absolutely wrong and under a misunderstanding, but still, supposing it occurred that there was any foundation for that, why should we not try to amend it?
Then, again, are we not to make any suggestion whatever to the Government by which the powers given under the Bill, if there is a possibility of their being tyrannically used, should be lessened? If any other point has been given to us as a suggestion with regard to the hospitals and societies, are we not to press that as an Amendment on the Government? I cannot think so. Then there is a question about these local health committees. I understand that the noble Viscount is going to change their names. If we think that those committees could be better constituted—and I myself think there is no reason why the employer should not be represented on them—may not we make these suggestions to the Government and have a certain time given us in which to make them? I am not pressing anything that would cause real trouble to the Government, but, after all, when people look at the House of Lords they will say, and I think it will not redound to the credit of this House, Because they could not do all they could to make this a good Bill, they did not do the little in their power in the time at their disposal with helpful

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suggestions so that this Bill should press less heavily upon the various members of the community.
VISCOUNT HALDANE: My Lords, my noble friend who sits by me (Earl Beau champ) had intended to reply upon the Bill and deal with the unemployment part rather more fully than I did, but the course which the debate has taken renders it hardly necessary at this hour, and I only rise to say a very few words. The course which the noble Marquess opposite has taken, I cannot doubt, is a wise one. Certainly he tried most judicially the propositions which were brought before him, and the sentence which he pronounced on the Referendum was very just and conclusive against the possibility of doing anything with that. Then, as the noble Marquess pointed out, for the rest you have to choose between, not a series of intermediate courses, but between two very widely different things. The speech of the right rev. Prelate has opened up great possibilities. The Government is not desirous of placing any obstacle in the way of the course he suggests. We are quite ready to listen to anything of the kind; but I did not gather from him that he confined himself to any one point in the Bill. It seemed to me there was a vast vista of amendment towards which he looked, and which would take up a very long time. As regards what was said by Lord Clifford of Chudleigh about hospitals, it will be found that there are pretty wide powers as regards hospitals in the Bill.
LORD CLIFFORD OF CHUDLEIGH: But I did not see where the money was to come from.
VISCOUNT HALDANE: There are certain funds at the disposal of local health committees in the matter, and also powers on the part of the societies subscribing. That is a part of the case which I think
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experience will work out. I agree with my noble friend that the hospitals play a most important part in this scheme, and in Germany things have so worked out that the insurance system is the life and soul of the scheme. Almost everybody coming for treatment goes to the hospitals. That may not turn out to be so here, but at least it is a thing to remember when predicting what will happen here. Then as regards the whole matter I will now ask your Lordships to give the Bill a Second Reading, and I will put down the Committee pro forma for to-morrow merely for getting the Bill reprinted with the Amendments substituting insurance committees for health committees.
On Question, Bill read 2a, and committed to a Committee of the Whole House To-morrow.
House adjourned during pleasure; and resumed by the Lord Granard (E. Granard).

MERCHANT SHIPPING BILL.
Read 3a (according to order), and passed.
PUBLIC ROADS (IRELAND) BILL.
Read 3a (according to order), with the Amendments, and passed, and returned to the Commons.

SALES FOR AGRICULTURAL PURPOSES BILL. [H.L.]
House in Committee (according to order): Amendments proposed by the Select Committee made: The Report of Amendments to be received to-morrow.
House adjourned at half-past Eight o'clock, till To-morrow, half-past Ten o'clock.