Lords Sitting of 20 February 1923

Preamble
The House met at a quarter past four of the clock, The LORD CHANCELLOR on the Woolsack.

MESSAGE FROM THE KING.
His Majesty's Answer to the Address of Tuesday last reported by the Lord Chamberlain (E. Cromer) as follows—
"I have received with great, satisfaction the loyal and dutiful expression of your thanks for the Speech with which I have opened the present Session of Parliament."

PRIVATE BILLS.
THE CHAIRMAN OF COMMITTEES (THE EARL OF DONOUGHMORE): My Lords, I beg to make the Motion standing in my name. The object of it is to avoid what might be a slight technical irregularity.
Moved, That Standing Order No. 86A be dispensed with in respect of all Bills to be read a first time this day and to-morrow.—(The Earl of Donoughmore.)
On Question, Motion agreed to, and Ordered accordingly.

HOUSE OF LORDS OFFICES COMMITTEE.
THE CHAIRMAN OF COMMITTEES: My Lords, I beg to move that the Earl of Bradford be added to the Select Committee on the House of Lords Offices.
Moved accordingly, and, on Question, Motion agreed to.

INDUSTRIAL ASSURANCE BILL [H.L.]
Order of the Day for the Second Reading read.
THE LORD CHANCELLOR (VISCOUNT CAVE): My Lords, this is the first of the Bills mentioned in His Majesty's Speech to be brought forward for discussion in this Session of Parliament. I am glad that it should be a Bill which proposes to give protection to
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persons of small means who badly require protection; and also that it should be brought forward in your Lordships' House, where, I know, there are several members who have given special attention to this matter.
The Bill proposes to deal with industrial assurances. Those assurances, as your Lordships know, are effected partly by assurance companies and partly by collecting societies registered under the Friendly Societies Acts. The business of industrial assurance is defined in Clause 1 as "the business of effecting assurances upon human life premiums in respect of which are received by means of collectors," and it is confined to assurances for which the premiums are received at intervals of less than two mouths. These are quite small policies on the life of a man or his dependents for sums of from £2 to £10 or more, the premium being quite small, a penny or a few pence per week. That is the kind of policy with which this Bill deals. The amount of this business is astonishingly great. I will give an illustration. The total premiums received on 'this kind of policy in the year 1921 amounted to £37,000,000. In that year there were 7,000,000 new policies effected, and the total number of policies then outstanding was from 50,000,000 to 60,000,000. The business, although small in each particular, is yet very large in volume. The fact is that many working men effect more than one policy of this kind.
With so much business it is not unnatural that abuses should have crept in. When I sneak of them I hope your Lordships will understand that I am not referring to well-known and reputable offices, but to abuses which have crept in chiefly in connection with smaller and newer offices. The complaints became so numerous that in the year 1919 the Board of Trade appointed a very strong Committee to go into the matter, the Chairman of which was my noble and learned friend Lord Parmoor. They went into the question, took a great deal of evidence, and made what I believe to be a very valuable Report, recommending certain changes in the law. That Report was accepted in substance by the Government of the day, and a Bill was brought in by my noble friend Lord Onslow in 1921, not in the hope of passing it that year, but in order that it might be con-

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sidered and criticisms made upon it. That Bill was discussed, and deputations went to the Home Office, which had charge of the matter, from different persons interested. In consequence, certain changes have been made, and the Bill now takes the form which your Lordships have before you to-day. I think I may say that in substance it is an agreed Bill; a Bill which is not only recommended by the Government, but is accepted by those societies which are chiefly interested in the matter and whom we have, of course, consulted. I have every hope, therefore, that it will not meet with any obstructive criticism and that it will have a fair chance of becoming law.
I must tell your Lordships what are the main abuses, the main difficulties with which you are asked by this Bill to deal. In doing that I leave out of account certain smaller matters, and I may remind you that the Bill is not wholly an amending Bill, but it is also a consolidating Bill. The main abuses to which I should like to refer may be classed under four heads. The first is that there is a want of security to the policy holders for payment of the amount insured when the policy matures. An insurance company has to make a deposit of £20,000, which is some security to its policy holders. A collecting society—and much of the business is done by societies of this kind—makes no deposit at all, and a few people with no means whatever have the right to form a collecting society, to register and carry on the business and receive premiums. In such a case there is, in substance, no real security for payment of the amount of the policies when they mature. There is some control by the Registrar of Friendly Societies, but it is of a very limited character and he tells me—I can well understand it—that he is not able to prevent the registration of such societies or exercise control over such concerns.
The accounts of these bodies are kept on all kinds of systems; sometimes on no system at all. Indeed, we find in the accounts of some societies of this kind a very large item representing nothing but past expenditure, while the industrial assurance business is often mixed up with the accounts of some other business. It is plain that the receipts from this industrial assurance work sometimes go to subsidise business of quite another character. Valuations are made, but
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they are quite inadequate, and the position of the policy holder is in some cases —I still confine myself to some cases—very precarious. I can imagine nothing more lamentable than that a man of small means, having saved and put aside out of his small income premiums which he considers are sufficient to protect and assist his family in case of death, should find that the policy is not paid because of the insolvency of the office. Your Lordships can imagine the terrible results that follow from such a position.
The second abuse to which I would refer is in respect of the issue of these policies through the agents of the kind of society to which I have been referring. The statements in the proposal for a policy are very often filled in by the agent on behalf of the person effecting the insurance. Some of them turn out to be incorrect, possibly through the insured person having been misunderstood or through some carelessness in writing down what he has said. The result may be, and sometimes is, that the policy, having been issued upon a statement which was untrue, is repudiated by the society with which it is effected. In that way many policies are. I believe, forfeited, and it is very hard on the man who has trusted to the agent to make a true statement. There is another rather curious feature. While most of these societies employ their own agents to convass for them, sometimes a special effort is made and a person is employed who is called a special canvasser. He is not a servant of the company, but he is a gentleman with a very persuasive tongue who is employed for a limited time to go from house to house to get all the business he can. He does his best and disappears, and then it may be found that some mistake has been made, some statement which cannot be made good. The canvasser is to blame, not the company, and I believe a difficult position often arises through means of that kind. I do not think that system is a good one, nor that such a method of canvassing should be allowed to continue.
Then there is the difficulty of the lapse of these policies. It is rather astonishing to find how many policies are taken up and afterwards allowed to drop. I suppose the policy holder is over-persuaded in many cases, or is over-confident, and finds afterwards that he cannot keep up the policy. But whatever the reason may

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be, the number of policies that lapse and are entirely forfeited is very great. It is estimated by the Committee to which I have referred that over 5,000,000 policies lapse and are forfeited every year. That means, of course, that in most cases the premiums paid on them are totally lost to the insurer, though that is not always the case, because some of the better offices allow a surrender value on a lapsed policy, sometimes as of right and sometimes as a matter of discretion. But while some offices do that, others do not, and some provision ought to be made to meet that case.
The fourth category in which I am classing the main abuses relates to transfers, and particularly to transfers of two kinds. First, there is the transfer of a policy on a person's life from one office to another. You will understand that this is often done without the policy holder really knowing or consenting to what is being done. Some capable agent of one company takes service in another, possibly a new society. He transfers not only his ability but his good will. He sometimes persuades insured persons to transfer their policies from one society to another; that is, he takes the policy away from the old office and gives it to the new one, and the insured person, not really understanding where he is, may have transferred his claim from a perfectly good and solvent society to another which may not be so solvent. That is a matter that ought to be watched and regulated. It also happens that an industrial assurance company or society sometimes transfers its whole undertaking and business to another, and with it, of course, its policy holders. The new society may not be as solvent as the old, but there is no check upon that, and the policy holders stand the risk of losing their policies.
These are some, I do not say all, of the points which we think ought to be dealt with at the earliest possible moment, and there are proposals in this Bill for dealing with them. In the first place, control is provided for under a series of clauses, beginning with Clause 2, which provides that the control of all industrial assurance companies and societies shall be in the hands of the Chief Registrar of Friendly Societies, who for this purpose is called the Industrial Assurance Commissioner. There is really no reason why those associations which are companies
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should come within the control of the Companies Act only while those which are collecting societies come under the Registrar. It is proposed to put them all under one officer. Under Clause 16, if the Commissioner has reason to believe that any offence against the Act is being committed, he is authorised to make an inspection of the books, and so on, to carry out an inquiry, and, if good cause is shown, to dissolve the society, or, in the case of a company, to petition for its winding up.
In Clause 7 we propose that a deposit of £20,000 should be made not only by the industrial assurance companies but also by the collecting societies, and in cases where a company carries on two businesses, one of general assurance and the other of industrial assurance, it must make a separate deposit for the industrial assurance branch. That provision alone should have the effect of weeding out some very undesirable concerns. In Clause 15 it is proposed that societies and companies shall submit their accounts to the Commissioner, and that if they are unsatisfactory he may reject them and require them to be set right. Under Clause 17 it is provided that valuations shall be certified by a public accountant, and be sent to the Commissioner, who, again, may object if it is insufficient. If there is a deficiency in assets compared with liabilities he may dissolve such a society, or, in the case of a company, petition for its winding up. I consider that this last provision, which enables him to put an end to an insolvent association receiving contributions from working men, is one of the most valuable in the Bill.
Dealing with my second head, relating to the issue of policies, it is proposed by Clause 19 that, when a proposal form is filled up by the agent of a society it shall not be capable of being disputed by the Society, with certain exceptions, one of which is actual fraud by the insured man and another a misstatement as to age. In that case the misstatement does not avoid a policy, but it may be corrected, and the policy holder is insured for the amount that is due having regard to his real age. Another exception is a misstatement as to health, which may avoid the policy until the expiration of two years. Then we propose to abolish the special canvasser altogether.

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By Clause 23 it is proposed that before a policy lapses notice must be sent to the assured person, and if a policy is allowed to drop then the assured person is to be entitled, according to the practice of the better offices, either to a free paid-up policy for an ascertained proportion of the value of the policy which has lapsed, or to a cash payment equivalent to that part of the surrender value. In no case will the lapse result in the complete forfeiture of the policy. That part of the Bill is, I think, also most beneficial, but in order to enable the companies to adjust their accounts the Bill provides that that clause shall not come into operation until the expiration of five years. I think that when it does operate it will not only give an effective remedy in the case of lapses which are generally the results of misfortune, but will also be a check upon the, reckless issue of policies. There are also provisions with regard to what are known as war bond policies and bond investment business.
Then, lastly, as to transfers of members from one society to another. We propose in Clause 25 that that kind of transfer shall not be made except with the written consent of the assured person, such consent to be given in writing on a form which is prescribed, and to be witnessed by a Justice of the Peace, whose duty it will be to explain to the person signing it the effect of the consent. Then, as regards transfers of whole undertakings, what is proposed in Clause 35 is that before such transfer is made the members shall be notified of what is proposed, with proper details, and the sanction of the Commissioner shall be obtained, thus preventing hole-and-corner amalgamations, or the transfer of a good concern to some new and less reliable society.
There is also this, which I hope may be of value. In Clause 31 of the Bill it is proposed that all disputes between members and societies of this kind may not only he settled by the County Court or the magistrates, but may be referred to the Commissioner, so that they can be decided by him quickly and without expense. That last part is confined to cases involving not more than £25, or a larger sum should both parties consent. I hope that that provision will enable disputes to be settled quickly and fairly by one who has very long experience in dealing with this kind of dispute.
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Those are the main proposals contained in the Bill, and I hope and believe that if they commend themselves to Parliament they will be found to provide an effective remedy for most of the evils of which complaint has been made. I feel sure that they will be readily accepted and that effect will be given to them by all societies of good repute and good standing, and that, if so accepted, they will make for the security of the policy holders. I have only one thing to add. I see by the Notice of Motion on the Paper that my noble friend Lord Sydenham thinks it desirable to refer this Bill to a Select Committee. I hope he will consider that proposal again before he makes it. These matters have been treated with the greatest care by the Committee over which the noble and learned Lord, Lord Parmoor, presided. They have been discussed over and over again since that Committee reported, and if the whole matter is sent again to a Select Committee the effect will be to put an end to, or to endanger, the general assent with which this Bill is now received; it may lead to delay and possibly to the total loss of the Bill.
Of course, the Government are most ready and willing to consider any Amendment which may be proposed, but subject to that observation I rather hope that this Bill will be treated as being, in substance, an agreed Bill. Although it may not give to my noble friend all that he desires, I am sure it will be a great step forward in the direction in which he, like all of us, desires to go—namely, that of giving a great measure of protection to a class by whom protection is very sorely needed. I beg to move.
Moved, That the Bill be now read 2a. —(The Lord Chancellor.)
LORD SYDENHAM: My Lords, the past history of this Bill is a little remarkable. There had been previous Inquiries which led to considerable disclosures, but not to any form of action, and then the Committee of my noble and learned friend Lord Parmoor reported on the whole question of Industrial Assurance, most fully and completely, in February, 1920. Some of the revelations in that Report, which I am afraid was not very largely read, were perfectly shock-

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ing, and the unanimous verdict of the Committee was that:—
"The need is urgent, and, in the view of the Committee, legislation should be undertaken without delay."
In July, 1020, I tried to draw attention to some of the more remarkable features in that Report, and I cited a number of individual cases of very great hardship to extremely poor people, who had lost the whole of their contributions in the form of premiums. I also tried to explain the system of war bonds policies, which had grown up and which appeared to me to be grossly improper, and of which the Government of that time did not seem to be aware, although it was in full operation.
Then I waited until March, 1921, when I begged the late Government to take action. The noble and learned Lord, Lord Shandon, spoke at great length on that occasion, and pressed very strongly for remedial measures on the lines of the Report of the Committee. At length a Bill materialised, and was read a first time in August, 1921. It was a very good Bill on the whole, but it needed a little strengthening in places. Lord Shandon praised it and said that in his opinion it carried out what he rightly called the moderate proposals of my noble and learned friend. Then this Bill was withdrawn, in order, it was said, that there should be full consultation with the companies and an agreed Bill arrived at.
A year and a half have elapsed since that time, and we now have this Bill. I have not yet had time to compare it fully with its predecessor and the Report of the noble and learned Lord and, moreover, I am afraid that it is a very difficult matter for a layman so ignorant of law as the late Lord Chancellor the other day accused me of being, to make the scientific comparison which is necessary in such a case. I will not repeat what I tried to say two and a half years ago, but I desire very briefly to draw your Lordships' attention to the extreme magnitude of the transactions which are covered by this Bill, and, consequently, the extraordinary importance of this Bill to a large number of our fellow countrymen. The existing policies in 1920, when Lord Parmoor's Committee reported, some of which were certainly illegal, amounted in all to £51,000,000. The classes to which this industrial assurance system applies were estimated by that Committee to number £35,000,000 people.
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In ten years in the case of a single company, the Refuge, 6,426,313 policies lapsed. That company proved a very poor refuge to the unfortunate people who put their money into it. The Committee stated, as I think the noble and learned Viscount has mentioned, that, in all, more than 5,000,000 policies lapse ordinarily in a single year.
These are enormous figures. It is very difficult for our minds to comprehend them. Of course, they do not mean clear gain to the companies, but they do mean dead loss to a very large number of poor people, and they must be stopped. On the other hand, these companies are very rich, and it was shown in the Report of Lord Parmoor that they derive large profits out of their industrial branches, which profits may be applied in order to enable them to give better terms to their other customers. In the year 1918 more than £25,000,000 was paid to these companies in premiums, and the income of the Prudential Company alone in 1920 considerably exceeded £28,000,000.
There is not the smallest doubt that the exploitation of poor people has been proceeding on a very large scale for a very long time. The policies, as I explained some time ago, are often such as would never be accepted by people with any knowledge of business. Only very ignorant persons could be persuaded to take out some policies that I have seen and examined. Of every shilling spent in premiums 6¾d. was said by Lord Par-moor's Committee to be returned as a benefit to the people. That is almost exactly the reverse of what happened under Mr. Lloyd George's famous insurance scheme. Under that scheme everybody was to get ninepence for four-pence; in this particular case what the poor people get is very nearly fourpence for ninepence. In fact, the Post Office Savings Bank offers a much better investment for people of that class, because, at all events, nothing that they put into it is ever lost. And in most cases—the cases of these lapses—it would be far better if those people had put their premiums into a stocking and kept them there. The industrial classes who insure themselves with these companies have no Press. Very few newspapers have taken up their cause, and the reasons are obvious. There is an old adage which requires little modification to make it suit modern requirements: "Sweet are the uses of

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advertisement." The Labour Party has never championed the cause of their comrades, or pointed out the hardships to which they have been subjected; and there are reasons also to account for that rather curious phenomenon.
I warmly congratulate the Government on having brought this very important matter to a head so shortly after taking office. I have humbly suggested that this Bill might be referred to a Select Committee for this reason. These very powerful, rich companies have been able to negotiate for a year and a half while this Bill was being framed. Their side of the case is perfectly well known, and has, no doubt, been most ably stated. That is quite right. But the Policy Holders' Association has never been heard at all, and unless it is heard I do not think we are quite in a position to understand their feelings and to grasp the full effect of the operation of this Bill when it comes into force.
The war bond proceedings, of which Lord Parmoor's Committee said that a controlling authority must have power to revise them, have never been looked into at all. I think it would be necessary to call two or three witnesses only on both sides to enable a Select Committee to form a strong and reasoned opinion upon this Bill. It is so complicated that I am doubtful whether most of the members of this House could judge it without some guidance of that kind; and I should be only too thankful to get a little evidence on certain points upon which I am in doubt. Of course, as the noble and learned Viscount on the Woolsack said, it would be, possible for us to introduce Amendments if we thought necessary, but it might. be very difficult for us to understand exactly what the effect of those Amendments would be upon the very large class of people who would be affected by them.
I believe that all the great companies are quite reasonable, and willing to make such changes as can be shown to be necessary. Some of them have already, I believe, made, of their own accord, changes of a most salutary character, and it may well be that, as the noble and learned Viscount rather hinted, they slipped quite naturally into methods which led to abuses—methods which they would not now defend—as the system grew to the huge dimensions which we now see. A Select Committee would at least
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give an opportunity to the policy holders to explain the special form of their grievances, and it would give the companies the power of objecting and protesting against any restrictions which they might think to be unnecessary. But the effect would be, I venture to think, that your Lordships' House would give another proof of the very deep interest it takes in the welfare of our working classes, and of its determination that everything possible should be done for their protection.
LORD PARMOOR: My Lords, I hope with the noble and learned Viscount on the Woolsack that it will not be thought necessary to refer this matter to a Select Committee. All the points to which the noble Lord, Lord Sydenham, has referred were gone into at great length before the Committee of which I had the honour to be Chairman, where the interests of the policy holders and of all other persons concerned, as well as of the large companies, were represented, and it was after a full hearing of all the evidence that could possibly be adduced on both sides—I think we took a whole autumn over the business—that we came to the conclusions which are to be found in our Report.
I have examined very carefully the terms of the Bill and compared them with the proposed reforms which we advocated in our Report, and I have not been able to find a single instance in which a reform which we suggested has not found its place in the present Bill. Of course, the Bill is a complicated one; it must be complicated in a matter of detail of this kind. But I can assure your Lordships, after a very careful comparison of the Report and this Bill, that every matter which we thought ought. to be altered in favour of the poor policy holder is included in this measure. I do not think that my noble friend Lord Sydenham would have any difficulty in formulating Amendments, if he so desired, to make any of those clauses stronger or more effective.
I should like to say one or two words, in addition, upon some matters which were so lucidly touched upon in the speech of the Lord Chancellor. It certainly was a revelation to me when I was Chairman of this Committee to find to what an enormous extent the principle of industrial assurance had been carried out among very poor pepole. The noble Viscount, as I understood him, said that at

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the time of the last report the amount collected in premiums was not less than £37,000,000.
THE LORD CHANCELLOR: That was in 1921.
LORD PARMOOR: In 1918, the last year for which the Committee had the figures before them, the amount collected was£25,000,000. That is a very large figure indeed; but the figure given by the noble and learned Viscount shows how this business has increased even since that date. It must be remembered that these huge sums are collected in amounts of one penny or twopence each from small householders and other people who effect insurances of this kind. At the time of our Inquiry the average payment perpolicy was only 2½d.Your Lordships will see what an enormous business it must be when premiums amounting to £37,000,000 are collected in sums averaging something like 2½d. per head.
As the noble and learned Viscount has pointed out, and as it appears from the definition—which is the definition the Committee suggested—this business depends on the collection of these small premiums from house to house, with the result, as we found, that an army of agents, numbering something like 70,000, was employed. The Committee desired, if possible, to introduce some better method of remuneration for these agents whether employed by the collecting societies or by the insurance companies; but we found that a new system was being introduced which we hoped might be effective. We thought that if we called attention to the abuses connected with collection we need not make further recommendations. No further recommendations are included in the Bill as it stands; but I desire to say most strongly that, in my opinion and, I think, in the opinion of the Committee, one of the reasons which led to the evils which have grown up in regard to industrial assurance and have caused the undue expenses incurred by collecting societies and insurance companies is the employment of too many of these agents, who can hardly find a livelihood owing to their competition one with another, and are apt to push very far indeed the inducements they hold out to those to whom industrial assurance appeals.
Not only are there these 70,000 collectors in the ordinary sense but the collectors
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themselves have been in the habit of employing special touts, if I may use the expression, in order that further policies may be taken out by those who have had what I may call very indefinite promises held out to them, but held out in an attractive manner. The result, I think, was not quite, though very nearly, what Lord Sydenham stated. Out of the £25,000,000 collected in small sums from people of the labouring class in 1918 in payment of insurance premiums,£11,000,000 went in expenses. In other words, 5¼d. out of every shilling and only 6¾d. enured to the benefit of the poor people taking out the policies. We had as members of out Committee two gentlemen of great experience: Mr. Robertson, who is the Chief Registrar of Friendly Societies, and Sir Alfred Watson, the Government Actuary, who has great experience in these matters. Both from the evidence we had before us and from the experience they could bring to bear, we were satisfied that there was a grossly extravagant expenditure in this industrial assurance business, and that there ought to be some far better guarantee, if possible, that the people who subscribed these small sums as premiums should have something like an adequate return if the policies fell due in their favour. This expenditure of £11,000,000 was altogether beyond what a business of this really justified.
There is one point to which I think the noble and learned Viscount did not call attention and to which I attach the greatest importance in connection with this Bill. At the present time collecting societies, who do a portion of the business, are under the jurisdiction of the Registrar of Friendly Societies, while the insurance societies are, as regards this business, under the Board of Trade. The result is that there is not only great overlapping but there is no official of high standing who really has this business with which we are dealing under his control and supervision. One of the most important provisions of the Bill is to bring all this industrial assurance business under one head—namely, the Industrial Assurance Commissioner who is, at the present time, the Chief Registrar of Friendly Societies. Not only is that a very great reform in a business of this kind, in which these small policy holders

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require protection, but it has enabled the powers of the Commissioner to be very largely enhanced.
Your Lordships will find throughout the provisions of this Bill that on very many points power is given to the Commissioner to see that the abuses of which our Report complains are not perpetuated. The noble Viscount on the Woolsack referred to one of them. In a huge business of this nature there are constant disputes, and the poor policy holder is hardly in a position to commence litigation of the ordinary kind against a rich company. The Bill provides that in small matters not exceeding £25 he can ask the Commissioner to settle a dispute. Not only in industrial insurance but in many other directions the position of a poor man against a rich company is often a very difficult one in matters of litigation, and I thoroughly approve of the proposal in this Bill under which such disputes can be and, I hope, in a large number of cases will be decided not through the expensive procedure of the Courts, but in a friendly way by the Commissioner himself.
With regard to the security of the policy holders, that is a matter on which the Committee laid great weight, and, as the noble Viscount has pointed out, that matter is left in the Bill in the way in which the Committee suggested it should be done. At the present time any seven persons, without any security and in many cases without any character, can constitute themselves a collecting society. Being a collecting society, they can start industrial insurance. Under the collection system they can persuade people to insure with them, and those who insure with them have no security whatever for payment in respect of their policies if any payments fall due, because those seven people are a shifting body, constantly transferring their powers to new bodies, and the policy holders have no security that they will ever be paid. The proposal in the Bill is a very simple one. An industrial insurance society at the present time cannot begin business without depositing a security of £20,000. That is a substantial security; and the proposal which the Committee made has been adopted, that a collecting society shall not be able to begin business of this kind without a similar deposit of £20,000 —a security which ought to have been provided long ago. That is just one of
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those matters which we pointed out ought to be set right without delay. I give every credit to the Government for introducing a proposal of that kind.
There is only one other point about which I should like to say a word or two, and that is the question of lapses. Nothing, I think, struck the Committee more than the extraordinary number of lapses which took place in this industrial insurance. We took the case of one company—the Refuge Company. That is not an exceptional company but one which, might be taken as a test of the whole. It was found that in the ten years from 1909 to 1918, out of somewhat over 9,000,000 policies over 6,000,000 had lapsed. "Lapsed" means that the policy holders—those who had taken out the policies and made payments—lost all possibility of getting any benefit from their assurance. The number of lapses in each year was, in the aggregate, enormous. As Lord Sydenham pointed out, there were 5,000,000 policies lapsing in a particular year.
What is the remedy which this Bill proposes? All the members of the Committee thought that this question was one of extreme importance. First of all, you cannot have a lapse at all without a proper notice is sent to the person insured. In the old days a person who had insured perhaps for a considerable number of years suddenly found his entire benefit taken away from him because, under some default of which he was not cognisant, the policy had lapsed. The first provision made here is that notice must be given to him before his policy lapses in order that he may have the chance to make the necessary payments to put his policy in order. I need not go into detail. The provision is that the person who has subscribed to a policy is entitled either to what is called a surrender value—that is a sum of money ascertained on a statutory basis contained in the Bill itself—which gives him something like 75 per cent. of the premium that he has paid, or to what they call a free paid-up policy—that is a new or substituted policy, giving him 75 per cent. of the advantages which the old policy had given him. Surely that is a most important reform. No one will recognise more than my noble friend Lord Sydenham that of all the complaints made before us the complaint which was

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most dwelt upon was that these small policy holders, by the process of lapse, which is very often not their own fault at all, lost the entire benefit of their policy, although they had paid premiums for a number of years. This Bill guarantees against that. First of all, it gives them notice before the lapse can take place; and, secondly, it gives them either a surrender value or a free paid-up policy in the place of the lapsed policy.
I think that in every respect this Bill should be supported. We do not make any allegations in our Report against particular companies. The Prudential Company was very much mentioned. The business of the Prudential Company appeared to be carried on in a proper manner. We had officials giving evidence about the Prudential Company on more than one occasion, and it appeared that it was a very profitable business. Their capital was £1,000,000. They were paying dividends of £600,000 a year, and after the war period they were paying what is practically the same. Therefore I do not think it is the least likely that any provisions for the protection of the poor policy holders are likely substantially to affect a business of that kind. But whether that is so or not, no one could have been more impressed than the Committee were with the abuses of the present system, and with the desirability of introducing the very reforms that are contained in this Bill. I hope, therefore, that the Bill will go forward and become an Act at the earliest possible moment, and that your Lordships will not. think it necessary to refer it to a Select Committee.
LORD ASRWITH: My Lords, the speech of the noble and learned Lord is a very strong argument why the suggestion to refer the Bill to a Select Committee should not be adopted. I trust that it may not be referred to a Select Committee. This Bill is a great improvement on the Bill which was introduced by my noble friend Lord Onslow in August, 1921. The arbitrary standard of limitation of expenses is got rid of, and the placing of the industrial insurance business under a Government Department, or under bureaucratic control, is also got rid of. The noble Lord who asked for a Select Committee rather suggested that he had had no time for any scientific examination of the Bill.
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Although the Bill contains 45 clauses, those who have followed the question of insurance must be familiar with those matters that now appear in this Bill. They are questions that have been debated for years. They were examined before the Committee over which the noble and learned Lord presided. They have been examined by experts and by officials and directors of the insurance companies for months. Last autumn these bodies met together and Came to a unanimous report advocating principles which are all contained in this Bill.
The noble Lord said the policy holders were not considered sufficiently, but in the suggestions of the assurance companies I find it stated that "the pernicious practice of transfer of individual policies from one society to another involving the holders of such policies in many cases, in considerable financial loss shall be prevented, by strengthening the law and by imposing obligations on the person or institution who seeks to obtain a transfer of such a policy." That is provided for in this Bill. Again, the companies agree that "equitable provision should be made to meet the case and protect the legitimate interests of those policy holders who have paid premiums for a considerable number of years, and who are unable to continue their payments." That also is provided for in the Bill. Those are the provisions which specially protect the policy holders.
We have also to consider those many persons who are employed by the insurance companies, and also the business of the insurance companies themselves. It is a mistake to suppose that the lapsing of any of these policies is really an advantage to these insurance companies. It is much more expensive to them to have to spend boot leather and trouble in trying to collect under these policies than it would be if the money were willingly and duly paid. The companies want the money and not to have to spend money in collecting it. The Bill is supported by those who are in the business. They are anxious that the business should be allowed to go on without this hanging over them for years and years, and that the abuses which have been brought forward should be corrected. I have the strongest assurance front the representatives of seventeen different classes of

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assurance companies who employ officials that the officials are entirely agreed with the management that the assurance business should be allowed to be carried on without the restrictions or further delay which sending this Bill to a Select Committee would mean.
LORD SYDENHAM: My Lords, I am most anxious that there should be no unnecessary delay in the passing of this Bill. The noble and learned Lord, who understands the whole question so well, as Chairman of the Committee has assured the House that every provision he wished to make has been carried out in the Bill, and I therefore do not propose to move that the Bill should be sent to a Select Committee.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

HOP INDUSTRY.
LORD HARRIS LORD HARRIS rose to call attention to the state of the hop industry, and to ask His Majesty's Government what assistance they propose to render it. The noble Lord said: My Lords, this subject has already received some publicity in the shape of two articles in The Times and correspondence, but I think it is of sufficient importance also to have publicity in Parliament, and that is why I have taken the liberty of calling attention to it. During the war hop growers were ordered to cut down their acreage by 50 per cent. This they did: I think their acreage was reduced from something over 30,000 acres to about 15,000 acres, and the, loss in some cases was extremely heavy. It was not merely a matter of giving up cultivation which had absorbed a large amount of manure and of established vegetable plant, but it also meant the scrapping of plant in the shape of poles and wires on which the hops grow. In some cases the poles and wires were allowed to stand, but the cultivation was given up and a kind of catch crop was grown in between the rows. No compensation was given for that which was a distinct loss to the hop-growing community, but it was suggested that when the war was over the growers might expect some sympathy, some material sympathy, in the arrangements that would be made for the re-establishment of the industry.
Hop control was instituted in 1917. In 1919 the brewers petitioned the Government for control for a further five years, and the growers agreed to do their best to reinstate their acreage to the pre-war total—namely, about 36,000 acres. They have replanted already up to about 26,000 acres, and there is no doubt that there would have been a further increase had it not been for the check imposed on the industry this year. What has happened? There have been very large importations of foreign hops. At the same time the consumption of beer has been largely reduced owing to the high price of beer consequent on the Duty, and at the present moment the Controller, who is governed by an Act of Parliament, has suddenly intimated to the growers that he is unable to take over more than two-thirds of the crop they have grown. At the present moment he has only taken over one-third of the crop: he holds out some hope that he may be able to take another third, possibly in May, but that is doubtful, and I understand that he holds out no hope so far as the last third is concerned.
I am not exaggerating when I say that some of the growers are unable to pay their wages bill. They are really destitute through no fault of their own. After having been encouraged by the Government to increase their cultivation, encouraged, in fact, by the words of the Act of Parliament, they are now penalised, again under the Act, if they attempt to sell the balance of their crop to any one but the Controller, who has told them that for the present he cannot take more than one-third of the crop, he may be able to take over two-thirds, but that he is not hopeful of being able to take over the whole of the crop.
I have referred to the large importation of foreign hops. In two years, in 1920–1921 I believe, the Controller allowed to be imported 679,000 cwts. of foreign hops, which is 100,000 cwts. more than the two largest importations of any two years since 1875. In 1922, or rather from the previous autumn up to last autumn, the hop growers spent from £100 to £150 per acre in obtaining the crop. They have only received one-third of it, and now nearly six months after they are actually short of their liquid farming capital. They cannot meet their bills, they cannot pay their wages, and no remedy is suggested. The Controller cannot offer any

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remedy. He says he is overloaded with hops and cannot pay the growers for what they have grown. He has intimated—indeed, the Government I think have intimated directly to the growers—that they had better scrap 25 per cent. of their present growth because next: year the Controller will not be able to take over the estimated crop of next year.
Let me read you a description of the powers of the Controller. He is governed by an Act of Parliament. I have not the Act itself here, but I have the Bill which was introduced in 1920 and became an Act that year. These are the words in the Bill:
"The Food Controller shall during the continuance of his office continue to have and exercise any powers in relation to hops which, at the time of -the passing of this Act, were exercisable by him, and may by order prohibit or regulate the importation of foreign hops in such manner as may appear to him necessary with a view to assisting the industry of hop growing in the United Kingdom."
The governing words are "with a view to assisting the industry of hop growing in the United Kingdom." He may import subject to the importation being with a view to assisting the industry. Those words were slightly altered in the Act, which, I think, lasted until September, 1922, when it was renewed under the Expiring Laws Continuance Act. Those are the words, and they come at the commencement of the clause, so that they govern the whole clause.
THE MARQUESS OF SALISBURY: There is no difference in the sense.
LORD HARRIS: No. The words are—
"With a view to assisting the industry of hop growing … he may regulate the importation of foreign hops."
Who is going to contend for a moment that the importation of these masses of foreign hops is of assistance to hop growers in England? Nobody can possibly contend that. I want to ask my noble friend below me whether this importation has been legal. I very much doubt if it has. And if that importation has been illegal, what right has the Controller to calculate on this very large pared of foreign hops as hanging over the market? They ought not to be in the country at all, and if they ought not to be in the country, then they can be washed out. In two years a surplusage
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of hops has been burnt, I assume by order of the Controller. Why not let this surplusage of foreign hops be burnt?
THE EARL OF SELBORNE: There wars a great fire in the Borough—that was the reason.
Loan HARRIS: So they were burnt by accident. But why not let them be burnt on purpose? If they have entered the country illegally, let them be destroyed. When my noble friend who represents the Ministry of Agriculture replies, I want him to tell me the legal position with regard to these foreign hops. I do not see how he can possibly argue that they have been brought in for the assistance of the industry, for it is unquestionable that the Controller now says that he cannot take over the balance of the English crop because, amongst other crops hanging over the market, there is a very large parcel, over 100,000 cwts., I think, of foreign hops.
That is the position, and I submit very respectfully to your Lordships that it is a very unfair position, having regard to the encouragement given to the growers to increase their acreage, and having regard to the very important fact, that these unfortunate growers are actually out of their liquid farming capital, so that they cannot farm. In view of those two important points, I submit that a present remedy is necessary, is permissible, and, in view of the gracious Speech from the Throne, is, I think, what is contemplated. Of course the growers who have suffered so much are looking for help, as do so many suffering industries, from an Import Duty. Supposing that were introduced, it is not going to help them in the present year. The injury to the industry has been done. It actually exists, and a remedy is necessary now if any good is to be done as regards last year's crop. I would welcome anything that would protect the hop industry. My withers are absolutely unwrung on that point. I do not follow the ignis fatuus, as I think it, of Mr. Chamberlain's Fair Trade proposals, but I always make an exception as regards hop-growing.
My argument is that we can grow in England every hop that is wanted by the trade. There is no necessity to go out of the country for them. I know the brewers say that they have always had a certain

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quantity of foreign hops and that they want foreign hops. Your Lordships ought to take that with a little qualification. There are certain brewers who have quite considerable interests in hop gardens in foreign countries. Naturally they are interested in the importation of foreign hops. Therefore, you have to qualify any such claim as to the necessity for the importation of foreign hops. We can grow every hop that is wanted. I do not grow an acre of hops, and on my small estate there are only two growers of hops. I am hardly interested at all, and have no personal interest whatever. It is a fact, however, that if we were allowed to increase our cultivation to its possible limits we could easily grow all the hops wanted in the country, and very good hops too.
That is a remedy for the future if the Government can see its way to act. But I submit that a present remedy is absolutely essential, and I hope that my noble friend will feel himself justified in bringing this matter before the Minister of Agriculture, and, if possible, in pressing it upon the Cabinet. My suggestion is that the Government should advance sufficient money to the Controller to take over the balance of the crop. I dare say the whole sum might be a matter of £2,000,000, but the Controller already holds out hopes that he will be able to take over a second third of the crop, which would mean about £1,000,000. If he is able to do that, there would remain only about £1,000,000 to advance to him to enable him to take over all the crop. It would not necessarily be money out of pocket. By degrees the Controller would be able to get rid of the balance of the crop, and the taxpayers need not be heavy losers from the action of the Government.
I am not throwing any blame upon anybody. A blunder has been committed, no doubt by inadvertence, and I suggest to the Government that, having held out hopes that they will do something for agriculture, especially in the direction of assistance by advances to farmers, here is their chance. Here is a chance of making an advance to farmers, and of proving by their action the reality of the sympathy they have expressed and the methods by which they hope to evince that sympathy, as revealed in the gracious Speech. Here is a chance to show that they mean what
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they said in that Speech. In addition, therefore, to calling the attention of Parliament to this very grave grievance, I conclude by asking what His Majesty's Government will do by way of remedy.
THE PARLIAMENTARY SECRETARY OF THE MINISTRY OF AGRICULTURE AND FISHERIES (THE EARL OF ANCASTER): My Lords, before I deal with the actual question that the noble Lord put at the end of his speech, I think I should first of all briefly refer to one or two remarks he made, and also give roughly an outline of what has occurred in regard to hop control, indicating, so far as I can, the sequence of events leading up to what is unfortunately a very grave position for hop growers, a position to which, I can assure your Lordships, the Ministry of Agriculture are fully alive. At the same time I must make it clear that this Government, which came into office only a very short time ago, cannot be. responsible for the position in which hop growers find themselves. Further I than that, I think very small blame can be laid to the account of any Government at all for the present position of the hop industry.
The first point to which I ought to refer is that, in the year 1917, the Government of the day restricted the output of beer to a certain number of barrels. As a consequence of that action, it was, of course, apparent that not nearly so many hops would be required; hop growers were naturally afraid that the brewers would not require hops, while at the same time, as your Lordships were aware, there u as a large demand for increased food production in the country. The natural result was that large numbers of hop gardens disappeared. The first action which the Government took in the matter was a request—not an order—from the Food Production Department, or the Ministry of Agriculture, that the growers should review the position, and that they should grub a certain number of hop gardens. When this was put to them, the hop growers, quite naturally, I think, came together and said: "This will act very unfairly. It is rather hard that A should act in a patriotic manner and grub the whole of his hop gardens, and that B, his next-door neighbour, should grub none." In those circumstances they said—it came to this—"Please turn your request into an order, and let us have it down in

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black and white, who is to grub his hops and the acreage which is to be grubbed, FO that the loss will fall equally upon all producers."
That was what led to these hops being grubbed by order, and I am mentioning the fact as the matter does not stand on the same footing as orders by the Food Production Department ordering people to plough up grass land. As I have said, in the first instance, the request for an order came from the growers themselves, so that as far as possible all growers should be placed upon an equal footing. As soon as these orders were issued, or very soon after, the Hop Control was set up and a Hop Controller was appointed. The Hop Control was, and is, a Committee which consists of producers of hops, brewers, and, I believe, of merchants and factors. Over this Committee the Hop Controller presides. The Hop Controller, when he takes action, consults his Committee, looks into the circumstances of the brewing trade, and, of course, examines the interests of the hop growers as well. For some years the Hop Control worked excessively well: I believe it worked to the great satisfaction of the hop growers and of the brewers. There were no complaints, and what I wish your Lordships to understand is that, although during the war a great many industries and manufactures were controlled by the Government and had Government officials telling the manufacturers what they were to do and how they should work, as far as the Hop Control was concerned Government influence was absolutely outside it altogether. The hop industry was controlled and managed by the growers of hops and the brewers. That Committee consisted of people who, with no dictation from the Government, wore put there to try to adjust the interests of the growers and users of hops.
That was the position, I think, until 1919, when it was suggested that the Hop Control should be renewed, and it was renewed in 1920 for another five years. That control was renewed at the express desire of both growers and brewers. Everybody, I imagine, who was responsible for the working of this Hop Control Committee believed that the consumption of beer would enormously increase, and that, hop growing would become a remunerative business, because the brewers would want more hops. Naturally, so
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long as they could get a good price, those who grew hops were anxious to plant their gardens again and increase their crops.
That was the universal idea among brewers and growers, and therefore it was not the Government but the Control Committee and the Hop Controller who were encouraging the further cultivation of hops, and also, at the same time, admitting a, large quantity of foreign hops into this country under licence. Unfortunately, the forecast of the Hop Controller and his Committee has been absolutely falsified. Instead of the consumption of beer steadily increasing it has steadily fallen off, and at the present moment, I believe, only about 18,000,000 standard barrels of beer are consumed against. 36,000,000 barrels before the war; that is to say, the forecast, of the Hop Controller and his Committee has proved to be absolutely wrong, and the consumption of beer in this country has fallen by one half.
People who look at this matter from an outside point of view must see that prima facie it is a, question between the growers and the brewers themselves. They have worked together without control the whole of this time. The brewers at one time were afraid that they were not going to get enough hops, and were all for encouraging the growing of hops and for having more foreign hops brought into the country. Again, there was an understanding that brewers should be allowed to continue their pre-war practice and not alter their style of brewing, but that in order to suit, as they said, the taste of the British public, they should be allowed to put one-third of foreign hops with two-thirds of English-produced hops. I am not an expert in brewing, and I cannot tell you whether that is a sound contention, but I believe it was the basis on which the Hop Control Committee decided and acted, and on which the Hop Controller has acted. That is to say, as far as possible, he used to try to arrange matters so that the brewers should be enabled to use two-thirds of English hops with one-third of foreign hops. I understand that it was upon this ground that the importation of foreign hops was allowed.
As have said, the whole position has arisen owing to what some people may think is an unfortunate decrease in the

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consumption of beer. The noble Lord has asked me whether the Government would be prepared practically to give an advance straight away to the hop growers for the hops which they have been unable to sell and which the Hop Controller has been unable to take over, owing to the decrease in the demand for hops. I may say at once that it was a distinct understanding, and a Treasury condition, when the Hop Control was renewed by Parliament in 1920—
LORD HARRIS: Under a previous Government.
THE EARL OF ANCASTER: Yes, but it was a distinct understanding that there should be no Treasury responsibility, and that it was a matter entirely for the brewers and growers themselves. That is the Act under which they are working at the present moment, and it must be perfectly apparent, therefore, to the noble Lord, that if a sum of money is to be advanced straight away to these growers for the hops which the Controller has been unable to dispose of it would mean Parliamentary sanction and fresh legislation. The noble Lord dissents. Well, it would certainly require Parliamentary sanction. Your Lordships are aware that in His Majesty's gracious Speech reference was made to the granting of credit facilities to farmers, and I hope that the noble Lord will be satisfied if I say that I think the proper time to raise this question of facilities for these men to get loans for their unsold hops would be in connection with that Bill.
There have, of course, been other proposals, which, I can assure the House, are receiving the careful attention of the Ministry. If anything is to be done to relieve the situation, apparently the wisest course would be to lengthen the period of control, which would give longer time in order to get rid of these surplus hops, both home and foreign, which are in the hands of the Controller at present. As regards that, I can only say that some of those whom we have consulted do not think that there is any immediate hurry for such action, because, after all, the Hop Control does not come to an end until August 20, 1925; and until we know what the provisions of the Budget will he, and whether there is going to be an improvement in trade and other circumstances, it, is very difficult to
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tell whether there is likely to be a large increase in the consumption of beer. By the action of Parliament when the Budget is under consideration and the question of the Beer Duty comes up, a large decrease in the consumption of beer might be brought about. On the other hand, if there is a great improvement in trade and the country were more prosperous, the probability is that more beer would be drunk. Then the demand for hops would go up. To a large extent that would alleviate the present difficult situation, and enable the Hop Controller to get rid of some of the hops which are on his hands. Therefore, there are good reasons against making any immediate declaration as to whether the Hop Control should be continued.
On the other hand, I can quite understand that the growers would like to know as soon as possible, so that they may make their plans for the future. Unfortunately, the Hop Controller is at present out of the country, but I consulted the Minister on this subject, and I can assure the noble Lord that as soon as the Hop Controller returns he will confer with him about this matter and come to a decision as to whether there shall be an extension of the period of control.
There is one important matter to which I should like to refer. It has, I think, been slightly misrepresented in some of the articles that have appeared in the papers and in some of the references to it. I refer to the opinion that this is entirely a Government responsibility. I cannot take that view. The whole of this thing from beginning to end has been largely, if not entirely, a matter of agreement between the brewers and the growers of hops, and it seems to me that any future arrangement that may be come to ought to be on the same basis. I do not believe that it is in the interests of the brewers themselves to stop the cultivation of hops in this country. Indeed, it is in their interest to encourage the growth of a large quantity of hops in this country, and it seems desirable that in the future, as in the past, the brewers and the growers should come together. After all, they are working together; their interests in some respects are dissimilar, but in other respects they are similar. It appears to me that the question of Government assistance on a large scale for the hop industry can hardly be

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considered on a different footing and apart from all those grave questions which concern many other branches of agriculture, which, I am sorry to say, are in nearly as depressed, if not quite as depressed, a state as the hop industry.
LORD HARMS: My noble friend has not dealt with the legal position of hops in the country.
THE EARL OF ANCASTER: I am not a lawyer, but, as I read that clause of the Act, the Hop Controller was perfectly within his legal rights in admitting these foreign hops.
LORD HARRIS: For the assistance of hop growers?
THE EARL OF ANCASTER: Well, that is my opinion.
THE EARL OF SELBORNE: My Lords, I think the main line of defence offered by my noble friend on behalf of the Ministry of Agriculture is most extraordinary. He tells us that the Ministry is not responsible, and therefore no Government has really any responsibility in this matter. I take up that challenge directly, and I think I can show that my noble friend has been completely misinformed. Do you suppose that this control—a most elaborate machine, which has worked this grievous damage to the hop growers of England—evolved itself out of chaos without the interference of a Government Department?
Why, what is the story? I am very sorry that my noble friend Lord Ernle is not here. When he came to the Ministry of Agriculture, it was part of the policy of the then Prime Minister, Mr. Lloyd George, to do all he could to increase the production of food in this country, because the submarine menace was becoming serious. Among the very first articles that Lord Ernie tackled in the matter of food production were hops. The Government said quite deliberately: "Bread is more important than beer. We will limit the number of barrels of beer to be brewed, and the acreage so released from hops shall be used to groan food for the people." Up to that time there had been no orders for cultivation, no direct interference with the farmers; it was the first case.
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Lord Ernie went to the hop growers and said: "I want half your acreage to grow corn or potatoes." The hop farmers, being very patriotic people, said: "Certainly; but it is not enough to ask us. Nine-tenths of us are willing to conform to your request voluntarily, but it would be very unfair if one-tenth of us were able to make great profits at the expense of the rest. We would prefer you to make a compulsory order." Lord Ernie agreed. There was a complete accord between the Ministry and the farmers as to the best thing to be done. The example was set, and when it came to dealing with the ploughing up of grass land, it was the experience over hops cultivation that made it unnecessary to go through the process of requesting voluntary action. It was this precedent that set the whole policy of orders for cultivation. The whole thing was Government action, Government policy, with a view of keeping this country in food during the war.
And then the machinery. The farmers said: "We have done this; we have scrapped plant of a value of £200 an acre. It will cost us an immonse sum of money to reinstate this after the war. What compensation are you going to give us?" Lord Ernie said, in effect "You require compensation. You are making this great sacrifice for national reasons, and you deserve compensation; and the compensation shall be given you by way of control. I, on behalf of the Government, will set up a control that, in its' working, will give you compensation." And the Controller was appointed. He, was selected to control the hop industry and the brewing at the same time, and an Act of Parliament was passed subsequently—because it was done in the first instance under D.O.R.A.—laying it down quite deliberately that the control existed in order to protect the cultivation of hops in England. The whole thing is Government policy from beginning to end.
Then the Hop Controller said: "I am not an expert. You have selected me to do this work; I know nothing about it myself, and I want advice." and an Advisory Committee was appointed, very properly consisting of hop growers, hop users, and other people connected with the trade. Rut the whole responsibility was that of the Controller appointed by the Minister of Agriculture under the

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powers of D.O.R.A., continued subsequently by Act of Parliament. But the sole responsibility was his and the Committee was merely advisory. Then my noble friend comes down to the House and says: "No Government had any thing to do with it at all." The whole situation has been created by an act of State to preserve the country in time of war, to enable the country to grow food, and it is a little too late in the day to come and tell this House and the hop growers throughout the country that, although the Government are very sorry for them, the Government have really no responsibility in the matter. I am very much surprised that the Minister of Agriculture should set up such a defence at such a time.
Let me say a word about the working of the control. The Controller, so advised, was a most honourable and efficient person. He meant to act perfectly fairly between the conflicting interests of the brewers and the growers; but he failed in his anticipation as to what would be required. His anticipations, formed, no doubt, after consulting his Committee, were erroneous; they were not what Mr. Winston Churchill would call intelligent anticipations. A great blunder was committed which, I think, ought not to have been committed. I do not think there was at that time any such hurry for coining to a decision. Why do I say that? Because when war broke out the brewers already had in stock a very large quantity of hops, though how much I do not know. As the war went on they used up those hops and replaced them by other hops. Therefore, at the fatal moment when the Controller, acting under the advice of his Advisory Committee, let in or gave permission for the introduction of a great quantity of American hops, there were already in the country great stores of hops in the brewers' warehouses.
That question of pre-war hops must not be left out of sight, because it really bears on the present situation. If the brewers had been accustomed to carry such large stocks of hops, why should they not continue to carry them, and allow the English growers of the last season to sell all the hops they could produce under the advice and impulse of the Ministry of Agriculture? I say, directly under the advice and impulse
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of the Ministry of Agriculture, because all the time the Controller has been in contact with the Minister of Agriculture. I am not prepared to believe that the encouragement that was offered to the hop farmers to replant their acreage, to which publicity was given through the length and breadth of the land, was disapproved of by the Ministry of Agriculture. If the Ministry of Agriculture had disapproved of it, they could have said so at once and have stopped it. But it was said by every voice that was raised to the farmer: "Now that the war is over, replant your grubbed-up acreage." An honourable engagement was entered into between the brewer and the farmer. It was not a one-sided engagement, as one controversialist on the brewers' side has maintained, that the hop farmer alone should replant, his acreage. The brewer undertook to take all the hops that the farmer grew, and the farmer has only stopped replanting his acreage because the brewer has said: "I cannot take any more of your hops." That is the position.
I want to ask this question. If the brewers could carry such a large quantity of hops, why should they not continue to carry them and allow the hops grown in the last season to be consumed? My noble friend has pointed out that the unfortunate farmers who have grown these hops by request are now absolutely short of capital with which to carry on their farms. That will bring me presently to something more important than the difficulty of the farmer. But my noble friend below me said that the Hop Controller acted on the theory that English brewers always required one-third of foreign hops to two-thirds of English hops. I do not believe that they require any such thing, and I have never seen any such statement by the Controller. I have read, I think, everything that he has said on the subject. He is an excellent and skilled controversialist, who defends his action with great sincerity and intelligence, and I have never seen any such statement made by him. He has said that he only allowed the importation of these foreign hops because he thought that there would be a shortage not of foreign hops but of hops in the United Kingdom.
I want to ask a question other than the one I have just asked, which was as to why the brewers should not continue

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to carry their American hops and allow their English hops to be consumed. If the Minister of Agriculture and my noble friend who so ably assists him will look at the South Eastern Gazette of January 30 they will see a very important statement by Mr. A. G. Luck, which entirely challenges the Hop Controller's calculations. He does not accuse the Hop Controller of any intentional inaccuracy or allege anything against his bona fides; but he absolutely challenges the basis of his calculations and, I think, proves his point. I very much commend that letter and article to the Minister of Agriculture because, if Mr. Luck's statements are correct, the whole of the English crop is now required.
I said just now that the position of the farmers was not the most important thing. The most important thing is the position of the labourers. Is it conceivable that at this moment, when the country is full of unemployment, the Government are going to be allowed to turn off the land into unemployment many of those who are the cream of our agricultural labourers because of a blunder made by a machine set up by a previous Government? I say deliberately that any Government—this Government or the last Government—has a responsibility for the working of a machine set up by Government and endorsed by Parliament for the control of an industry. Are they going to allow the working of that machine to turn away from the land at this moment a very large number of those who are the cream of our agricultural labourers? There is no form of agricultural industry which gives so much employment per acre to the labourer and the labouring population as hop cultivation does.
How can the Government expect the farming community to believe their promises to help agriculture when every case that comes up is turned down? The Government are, pledged to help agriculture in its present agony. They are also pledged not to introduce Protection by anything in the nature of a subsidy. If every case that arises is turned down in the way in which my noble friend has turned this case down, how can the agricultural community believe in the good intentions of the Government? The proposal made by my noble friend is, I think, a perfectly feasible one—that
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the farmers should have the advantage to enable them to tide over this difficulty. There is another expedient, and that is the continuation of the control. There is a third expedient, and that is a Duty on foreign hops; but I am not going to discuss that now, because the control would have the same effect. It would not give the farmers the cash they require at the present moment, but it would prevent, I believe, what I care for much more, and that is the turning off of the labourer.
If the farmers knew that their difficulties were only temporary, that these hop gardens would be of value to them for some years to come, they would not scrap this important plant. It really is an incredible thing that the same set of men should be asked within six months to scrap half their plant—very expensive and valuable plant—asked to replace it, and then asked or advised again to scrap 25 per cent. of it. What industry can exist under such treatment? And beyond the injustice to the farmer is what I call the tragedy to the agricultural labourer. Therefore I very sincerely hope that what my noble friend has suggested is not the last word of the Government on this subject. I hope that the Government will look at the question with more sympathy and with less desire to discard the responsibility which, I maintain, must be borne.
EARL BEAUCHAMP: My Lords, the noble Lord who introduced this subject to-night and myself would have a good many points of difference upon it. For instance, we should probably differ as to the relative merits of hops grown in Worcestershire and hops grown in Kent. But at any rate we should agree heartily in the words of condemnation he has used with regard to the result of control upon the industry. I find myself in complete agreement with all that he has said on that point.
I was glad to hear those words of sympathy which he addressed to the hop growers of this country, amongst whom I venture to count myself, for the treatment which they have received, but when His Majesty's Government state to your Lordship's House their fin a] decision upon this question, I hope that they will not think it necessary to treat hops on a different footing from that on which they

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treat other agricultural produce. After all, there are other forms of agricultural produce even more important to this country than hops, and I venture to hope that His Majesty's Government will not put hop growers in a specially favoured position any more than they should treat hops on a different footing from that of any other kind of agricultural produce.
Your Lordships will realise that the question of the Duty, hinted at both by the noble Earl who has just sat down and by the noble Lord—though they said very little about it in the House this afternoon—is very much in the minds of a great many of the hop growers of this country. I think the wiser of them realise the difficulties which His Majesty's Government would encounter were they to try to do anything of the kind. Obviously, a Duty upon hops would ultimately react upon the price of beer, and the price of beer is probably already too high.
THE EARL OF SELBORNE: That is not so.
EARL BEAUCHAMP: The noble Earl will have an opportunity of arguing that point if he wishes, but at the present time the price of beer is already sufficiently high, and I do not think the Chancellor of the Exchequer, for that reason, is at all likely to consider a Duty on hops as a possible line of policy.
The noble Earl who has just sat down spoke of his great sympathy for the agricultural labourer, and of the effect upon him of depression in the hop industry. All of us, I think, realise that the agricultural labourer to-day is probably the person who is suffering more than any other class connected with the land, but I hope His Majesty's Government will consider the agricultural labourer, whether he is engaged in hop growing or in other agricultural work. No more than want hops to be treated differently do I want a difference made between agricultural labourers who are engaged in growing hops and those who are engaged in other kinds of agricultural work. I do not wish any preferential treatment for one kind of labourer as against another.
After the sympathetic references which were made in His Majesty's gracious Speech from the Throne to the position of agriculture, I trust that His Majesty's
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Government may be able to do something for the agricultural labourer. We realise the extent to which labour is involved in the growing of hops, but I venture to think that during the next year or two, whatever may be the position of the hop industry, it is very unlikely that we shall find any such large displacement of labour as that which the noble Earl seemed to indicate. After all, the hop growers will be obliged to turn their attention to the production of other crops, and in the raising of other crops they may be able to give an equal amount, or nearly an equal amount, of work to the labourer.
The whole position of hops, I think, is affected by a circumstance which has not been referred to in the course of the discussion this afternoon. I remember that 25 or 30 years ago the really important question each year was whether it was a good year for hops, or whether it was not. If it was a bad year for hops prices soared up, and the brewers were obliged to pay whatever price they could persuade the farmers to sell at. Then cold storage was introduced, and from that moment the position of the hop industry has been quite a different one, because in years when there is a large production of hops it is possible to put the surplus into cold storage, and in scarce years the hops which are in cold storage take the place of those which have not been grown. The result has been that you do not now get those almost fancy prices for hops which used to obtain occasionally 25 or 30 years ago.
I am glad to think that the noble Earl seems to give assent to the view that this circumstance has brought about a vital difference in the hop industry. It is, I am sure, a thing which has stabilised the position of hops. There is not the same variation between the price of hops in a bad year and the price of hops in a good year as there used to be. I remember that at the time when cold storage first came in the more advanced and progressive farmers thought it might be a good thing, as tending to stabilise the price of hops. Unfortunately, it has gone a great deal further than that. It has gone far to depress the price of hops, whether in good years or bad years.
I hope His Majesty's Government may see their way to help the hop farmer at the same time as they help other farmers throughout the country, by enabling him

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to sell at a world-price the product of his farm produced at a cheaper cost. That, I think, is what is in the minds of His Majesty's Government if we may judge from the passages in the gracious Speech to which I have already referred, and from what has been said by the Government's representative. It is quite obvious that if His Majesty's Government are able to carry out any of the proposals which have been made by such bodies as the National Farmers' Union—if they are able to cheapen railway transport for agricultural produce, and to relieve the land of some of the burdens which rest upon it to-day—they will greatly assist the industry. A suggestion has been made by one of those bodies that they should relieve farmers of the cost of the main roads, and should assist them with regard to education. I am sure that it is in directions of that kind that the hop farmer should look for relief in the future. If His Majesty's Government are able to consider and take action with regard to local rating, I have very little doubt that the old energy and the old skill of the hop farmers will enable them to meet even this crisis with success.
THE LORD PRESIDENT OF THE COUNCIL (THE MARQUESS OF SALISBURY): My Lords, I desire to add but one or two words, following the speech of the noble Earl who has just sat down. The burden of the noble Earl's argument, is that no discrimination should be accorded to the hop farmer or to the hop industry apart from the agricultural industry generally. I do not think I am quite prepared to follow him in that respect. It would be out of place for me to go into the question of the general agricultural policy of His Majesty's Government. That will be announced in due time to your Lordships, but I think the debate this evening has established the fact, and it is no use trying to hide it, that the hop industry is in an especially depressed condition due to the special circumstances which surround it. After all, the whole of the artificial character of the legislation under which we were obliged to suffer during the war has passed away in respect of most things, but it has not passed away in respect of hops, and that differentiates that portion of the agricultural industry from the remainder.
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I rose for one purpose; and that is to try to remove from the minds of my two noble friends the idea that we approach this subject without sympathy for the hop industry. That is not so; and if they draw that inference from the speech of my noble friend the Parliamentary Secretary, they have, I think, misunderstood him. I listened carefully to his speech—I thought it an extremely good one—and if my noble friends will look at it in print to-morrow they will see that in many passages he expressed sympathy for the hop industry and indicated that the Government had arrived at no final opinion as to how it ought to be treated. He indicated that various directions in which remedies might be found had been proposed and were under consideration, but that pending that consideration it was impossible for the Government to make a final declaration. I hope those passages will be taken to heart.
Of course, we take an interest in the hop industry, and most of all in the fact that if anything serious happens there would be a great displacement. of agricultural labour which would have an unfortunate effect. I do not think the noble Earl who has just spoken would wish us to ignore that possibility. He is a very strong Free Trader, but, it is impossible to apply the rigid doctrine of laissez faire to the liquidation of the circumstances of the war. If, in the course of his work, the Hop Controller has made a great miscalculation, which is the well-supported allegation of my two noble friends, that is a primâ facie reason for very careful consideration. I hope my noble friend Lord Selborne will be assured that what has been said is not the last word of the Government on this subject. I t is an assurance that we appreciate the difficulty in which the hop industry is placed and also the difficulty in which the Government is placed. If we can find some way of mitigating the mischief which will ensue if all they apprehend takes place no one will be more glad than His Majesty's Government.

PARLIAMENTARY ELECTIONS (ALTER- NATIVE VOTE) BILL [H.L.]
EARL BEAUCHAMP: My Lords, I beg leave to introduce a Bill entitled the

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Parliamentary Elections (Alternative Vote) Bill, and to ask your Lordships to read it a first time.
Moved, That the Bill be now read 1a.—(Earl Beauchamp.)
On Question, Bill read 1a; and to be printed.

FELIXSTOWE DOCK AND RAILWAY BILL. [H.L.]
GENERAL REVERSIONARY AND INVESTMENT COMPANY BILL. [H.L.]
GREAT WESTERN RAILWAY (ADDITIONAL POWERS) BILL. [H.L.]
GREAT WESTERN RAILWAY (SWANSEAHARBOUR VESTING) BILL. [H.L.]
LONDON AND SOUTH WESTERN RAILWAY BILL. [H.L.]
LONDON ELECTRICITY SUPPLY BILL. [H.L.]
MID KENT WATER BILL. [H.L.]
MIDLAND RAILWAY BILL. [H.L.]
NORTH EASTERN RAILWAY BILL. [H.L.]
OAKHAM GAS AND ELECTRICITY BILL. [H.L.]
SHROPSHIRE WORCESTERSHIRE AND STAFFORDSHIRE ELECTRIC POWER BILL. [H.L.]
SOUTHEND WATER BILL. [H.L.]
SOUTH OXFORDSHIRE WATER AND GAS BILL. [H.L.]
SOUTH STAFFORDSHIRE MOND GAS BILL. [H.L.]
SWANAGE GAS AND ELECTRICITY BILL. [H.L.]
THOMAS CHESHIRE AND COMPANY (DELIVERY WARRANTS) BILL. [H.L.]
WEST GLOUCESTER WATER BILL. [H.L.]
Presented, read 1a; and referred to the Examiners.
House adjourned at twenty-five minutes past six o'clock.