HL Deb 25 June 1925 vol 61 cc781-9

Read 2a, and committed: The Committee to be proposed by the Committee of Selection.

LORD MORRIS had given notice to move, That it be an instruction to the Committee on the Newport Corporation Bill to strike out of the Bill Clause 106. The noble Lord said: My Lords, in this Bill, as printed—and no doubt your Lordships have had an opportunity of going through it—there is only one clause, namely, Clause 106, to which there can be any possible objection. The Bill provides generally for increasing the powers of the Corporation in relation to dealing with lands in every proper way, and also in relation to constructing roads and bridges, to dealing with water from the municipal point of view and in regard to electricity, omnibuses and tramways, markets, streets and buildings, sanitary provisions, slaughter houses, police and traffic, finance and miscellaneous activities.

And then there is Clause 106, by which the Corporation propose that, if they think fit, they may establish a fund, to be called the insurance fund, with a view of providing funds for making good all losses, damages, cost and expenses to which the Corporation may be subjected in respect of the whole or any part of all or any of the following risks—that is to say, the risk of fire in respect of buildings, works, premises and the contents thereof and other property, whether belonging or on loan to or under the care, custody or control of the Corporation. Under that clause it is pro- posed that the Corporation shall be their own underwriters in relation to the whole of their property—that is assuming they take these powers—and in relation to all property that they may have under their control. It might be very valuable property in connection with exhibitions or other public affairs. Then they take powers to insure against the risk of accident and claims by third parties in respect of tramways, omnibuses, scavenging vehicles, motor cars and motor transport vehicles.

In addition to that, they take power to insure all risks under the Common Law, the Employers' Liability Act, the Workmen's Compensation Act or any Act or Acts for the time being amending or extending those Acts or otherwise in respect of accidents to the officers' servants or workmen of the Corporation or to third parties. It is also proposed to take powers to cover all risks of injuries to school children through accidents caused by the negligence of a teacher, attendant or other person, or defect in any school premises of, or leased to, the Corporation. It is proposed to insure against the risks of mechanical or electrical breakdown at or in connection with any of the electricity works of the Corporation. It is proposed to insure the risk of loss due to infidelity of officials of the Corporation and any other risks against which, in the absence of such an insurance fund, the Corporation would ordinarily insure. To cover these risks they propose the establishment of an insurance fund under this clause and that, of course, be a new charge on the ratepayers within the Corporation. Then the clause goes on to state how that fund will be raised and how it will be brought up to £150,000 to meet any claims that may be made against it.

To the whole of the Bill, as I have said, no exception can be taken except as to this one clause, and it is conceivable that, even if the fund proposed here of £150,000 had accumulated, one very extensive fire might, wipe out the entire fund. There is also the risk of accident to and claims by third parties in respect of tramways, omnibuses, etc. One serious accident through the overturning of an omnibus, if it could be traced to the negligence or culpability of any of the officers or servants of the Corporation, might result in very extensive claims. Then there is subsection (iv) dealing with the Employers' Liability Act and the Workmen's Compensation Act. Of course, any one who has followed that legislation during the last thirty or forty years will appreciate that to-day under these Acts it is almost impossible by any possible defence to get away from the successful establishment of these claims. The whole doctrine of contributory negligence and other defences, which were set up in the old days, has now practically been removed and it would be a very difficult thing for the Corporation or any similar body successfully to defeat such a claim. You have, too, the risk of injury to school children, caused through or by the negligence of the teacher, attendant or other person, or by a defect in any school premises. A defect in school premises might lead to an epidemic among the children and you might have hundreds of claims, involving hundreds of thousands of pounds, if that is not putting the position too high. All these claims, if successful, would, of course, have to be met by the ratepayers. Then there is the risk of mechanical or electrical breakdown in connection with electricity works for the Corporation. I know there is an opinion that it is possible for a Corporation or company to contract themselves out of responsibility and a liability in certain cases, but we know that the Law Reports are full of cases where they have failed in that respect.

By this clause it is proposed to empower this Corporation to set up an insurance fund to cover all risks against which they would ordinarily insure with insurance companies or underwriters. Parliament is asked to give to this municipality such wide powers as are suggested, and that would create a precedent with which insurance companies, as well as the ratepayers, could have no sympathy. It would be against the interest of all connected with insurance companies, and against the interest of the ratepayers that they should be exposed to the risk of serious claims such as these. It will be noted that the Corporation are not claiming the right to do insurance outside their own immediate property and their own servants, but municipal insurance in this country means a very great deal, and it is conceivable that if the concession asked for here be granted, that might widen and broaden out in the very near future, and they would do all the insurance, not only for their own property and people but for the whole municipality. In that way they would severely come into competition with a very large class of people who are now doing really good work, not only for the people in this country who are insured, but, indirectly, for the whole nation, because it is well known that the major part of the insurance by the great insurance companies in this country is done abroad and the profits come into this country. It has always been recognised that that is one of our principal assets from the public standpoint—the revenue derived from insurance companies abroad. But if this work is taken from them and if corporations begin to be competitors and do this work outside their own servants, then there will be no point in these insurance companies continuing to do business at all.

Further, no matter how well a corporation may be run and regulated, in view of the severe competition which takes place to-day in this country between insurance companies, it is almost impossible to conceive that they could do this business more cheaply and better. Is there any person who would like to be his own underwriter instead of an insurance company as regards his house or his life insurance? And there are branches of insurance in this country, particularly marine insurance, that are not paying their way. I have no doubt that owners of ships and people who deal with marine insurance, if asked, would tell you that marine insurance has not paid for years. The public and the shipping trade get the benefit of that. For these reasons I beg to move the Motion which stands on the Paper in my name.

Moved, That it be an Instruction to the Committee on the Newport Corporation Bill, to strike out of the Bill Clause 106.—(Lord Morris.)


My Lords, before the Chairman of Committees replies, may I say one or two words about this proposed instruction? I am not proposing to support it. I have interests as a director of an insurance company, and I confess that all my interests would be in favour of the instruction, but, on general broad principles, unless the case is very strong, I do not like these instructions to Private Bill Committees of this House, which ordinarily discharge their duties with great ability and to the general satisfaction. But I do want to ask the noble Earl, the Lord Chairman, whether he can assure us that the finance of this question will be carefully looked into. I do not know on what financial basis the fund of £150,000 contemplated is made up. I do not know what proportion of the risk which the Corporation proposes to undertake that sum would really cover. I should, therefore, be glad of information on that point. Also I understand that this clause is a precedent. No clause exactly similar to it has been passed in a Private Bill before. On the other hand, clauses which contain some of the powers which are suggested in this clause have been passed in other Private Bills. I should like to know whether the Ministry of Health has presented a Report on this Bill, and whether the noble Earl can tell us anything about the tenour of that Report.


My Lords, I rise to take part, in this debate with some difficulty, for a rather peculiar reason. As your Lordships are aware, the Chairman of Committees moves all stages of these Private Bills pro forma. He is riot personally responsible for the provisions of every Bill he submits to your Lordships at every stage, and it is usual, whenever any opposition is raised to a Bill, for parties interested, whether for the Bill or against it, to get some Peer to state their case from their particular point, of view. I have just heard that the Newport Corporation have, unfortunately, not been successful in securing a member of your Lordships' House to take their part this afternoon. Therefore, it will, of course, be my duty to state this case as briefly as I can, but to state it from both points of view in order to leave the decision in your Lordships' hands. In the end, having the same right as all your Lordships have, I shall not hesitate to state what view I hold on the particular point in question.

I think I ought, first of all, to inform your Lordships of the Parliamentary position. If this Bill goes to a Committee three Petitions have been deposited against it. Two of those Petitions do not raise this clause. The third Petition—a Petition from the National Union of Teachers and the Newport District Teachers' Association—does call attention to this clause, but only on a small point. They do not raise the whole question of policy. Of course, as your Lordships are aware, all clauses are in the hands of every Committee to which they are referred, but in the normal course the attention of the Committee which went into this Bill would not, except of their own motion, be drawn to this clause in detail, unless they chose to look into it with the Report of the Ministry of Health before them. My noble friend has referred to that and I will come back to it in a moment. But it is fair to tell your Lordships that there is a body called the Insurance Parliamentary Association, and I am informed that this body was some time ago in communication with the promoters, who informed them that if they deposited a Petition they would not object to that, as perhaps they might have objected to it, on the ground of locus. With that knowledge in their minds the Insurance Parliamentary Association have not deposited a Petition and therefore, for the moment with that amount of information before me, I cannot regard them as very dissatisfied with this clause.

Now I think I ought to inform your Lordships of what has been the recent practice of Parliament in this matter. I have before me a list, of clauses that have been granted since 1921 authorising municipalities to do their own insurance particular departments. I think I ought to go through them and mention them by name. Section 197 of the Batley Act of 1921 gave that Corporation authority to carry on their own insurance in accident and employers' liability matters, and Section 207 in infectious diseases cases. The same year Grimsby received those powers in fire, accident and employers' liability cases; in Liverpool, the same three departments; in Middlesex, in fire only; in Wigan, in fire, accident and employers' liability cases. In 1922 Ramsgate was given that power in infectious diseases cases, and in 1923 Morley was given it in infectious diseases cases. On the other hand, there is the Torquay case in which, in 1923, powers were refused, and there is one other case where powers were refused. But what Lord Emmott said is, of course, quite true, that this is the first case where a corporation has come to Parliament asking to have a general insurance fund covering all its insurance risks, not confining its powers to particular departments, as has hitherto been done.

The noble Lord, Lord Morris, first of all criticised this clause as dangerous for the ratepayer. I can only remind your Lordships that this Bill is promoted by the Newport Corporation, who are responsible to their ratepayers, and that it has been through the usual procedure of approval under the Borough Funds Act and, of course, approval by the Corporation themselves. The noble Lord suggested also that it is dangerous for the insurance companies because we might have corporations breaking out and doing all the insurance within their boroughs, whatever it was. I can only say that the clause does not say that and obviously nothing of the kind could be done without the approval of Parliament. When that very much larger question was raised, if it ever was raised, Parliament, no doubt, would have a great deal to say—


I did not say that it was in the clause. I said that ultimately it might broaden out into that.


We are none of us wise enough prophets to know what Parliament may be asked to do during forthcoming centuries, but we may safely leave that, I think, to the Parliament of the day. Before I pass from that, I may recall that the noble Lord, Lord Emmott, asked whether the Ministry of Health had had anything to say on this point, and I think it will probably be convenient, as it is not very long, if I read an extract from the Report of the Ministry of Health on this clause, in order that your Lordships should know what is before Parliament in this matter. This is what the Ministry of Health say:— By this clause it is proposed to empower the Corporation to set up an insurance fund to cover all risks against which they would ordinarily insure in insurance offices. The Ministry are not aware of any local Act precedent for a clause of so comprehensive a scope"— I agree— although powers have been given in certain cases enabling local authorities them selves to undertake the insurance against some of the risks specified in sub-clause (1) of this clause. Attention should perhaps be drawn to the proceedings before the Committee on Part XV of the Torquay Corporation Bill, 1923, where the clauses empowering that Corporation to establish workmen's compensation, fidelity, guarantee, education, accident, and fire insurance funds were struck out. That is a matter to which I have already called the attention of your Lordships. The Ministry go on to quote the rest of the decision which was against the Torquay claim in that case. The Report then continues:— Clauses empowering the Corporation to create accident and fire insurance funds were withdrawn from the Oxford Corporation Bill of this Session. An accident fund clause was passed in the Barrow-in-Furness Bill. That, I think, is the end of the extract from the Report as I have it now before me, but in one sentence I can sum up, from the evidence given by the witness for this clause before the House of Commons Committee, what the Corporation are asking your Lordships to do, and I think I can sum it up in a very simple form.

For the last fifteen years the Newport Corporation have kept a very careful record of their experience in the matter of insurance. Speaking in round figures, they have paid during these fifteen years £27,000 in premiums and claims have had to be satisfied to the extent of £10,000. The Corporation have made this quite clear. It would not be fair to say that there has been a profit of £17,000 to the insurance companies. There have been obvious expenses of management, and so on, which should be accounted for in that fund. But the Corporation say now that they believe that if, in the interest of their ratepayers, they are allowed, by savings on their premiums, slowly to build up this sum of £150,000 they are not going, the minute they get this clause, to stop insuring anything through the insurance companies, but they hope, in, roughly, ten years, to be able slowly to build up this sum of £150,000 and to save their ratepayers a considerable amount in premiums to the advantage of those ratepayers. On the case as submitted to me, I do not think it is an unwise proceeding on the part of the Newport Corporation, and I hope on this explanation that the noble Lord will not press his objection. Personally, I should be sorry if this instruction was adopted by your Lordships in this particular case.

Motion, by leave, withdrawn.