HL Deb 02 May 1934 vol 91 cc1009-17

Order of the Day for the Second Reading read.


My Lords, I beg to move the Second Reading of this Bill. As it is the first time that I have had the honour of addressing your Lordships, I hope you will forgive any shortcomings on my part. When I was asked by Mr. Godfrey Nicholson, the Member for Morpeth, to take charge of this Bill in this House, I told him, after examining the matter, that it seemed a very technical Bill in many respects, and that when I was in the House of Commons I sat for an industrial, and not for a mining constituency, but that I would undertake to do my best. Though this Bill in many of its clauses is replete with rather formidable legal phraseology, I hope your Lordships will agree that the general principle of the Bill is simple. The general principle is to ensure that workmen who are in receipt of compensation payments for accidents should not suffer losses through the bankruptcy or closing down of collieries. Very hard cases have occurred, and it seems deplorable that in such cases the victims should be left to depend for relief on the Poor Law. Mr. Godfrey Nicholson had very wide support for his Bill in another place. It was received with approval by all Parties and by spokesmen from all Parties. It was approved by the Home Office and by the Lord Chancellor's Office, and I think it was largely owing to Mr. Nicholson's own ability and perseverance, as well no doubt as to his good fortune in the ballot, that the Bill has reached your Lordships' House at this early stage. The fact that it had such widespread support makes me the more confident that your Lordships will give it very careful consideration.

It may be asked, why should this be done for coal mines and not for other industries? It is a reasonable question, and I think the answer is to be found in some statistics that were quoted in the other place both by the promoter of the Bill and by the representative of the Home Office. Thus it was pointed out that in the mining industry about seven times more accidents occur than in other industries, and statistics that have been officially collected show that the mining industry is in a much more precarious position in this respect that any other industry you can mention. These statistics I refer to deal with mines, shipping, factories, docks, quarries, constructional work, and railways, and all these together employ about 6,500,000 men. In the six industries other than mines the proportion which the number of compensation cases bears to the total number of men employed is 3.38 per cent. In the mining industries it is 21.2 per cent. As your Lordships will observe that is an increase of about seven times. Take again the total expenditure of these industries annually on compensation proportionate to the total number of men employed. In the six industries it is 9s. 10d.; in the mining industry it is 08s. 11d., which represents a startling difference. Some other figures given in the other place by the Under-Secretary for the Home Department are these. Out of about 960 colliery undertakings employing about 790,000 men there are 707 colliery undertakings employing about 589,000 men which are insured in this matter of compensation. That leaves 253 colliery undertakings employing 201,000 men which are not insured at all. Those at any rate were the figures last February.

The conclusions which I draw from these figures are these. The figures show, firstly, that the coal-mining industry involves far heavier risk than does any other industry; that seems indisputable. Secondly, that in no other industry are the workers liable to such grave and extensive loss. Thus, if a colliery goes bankrupt there is a permanent loss of compensation which is very hard indeed upon the workers. In the case of bankruptcy, there are often no realisable assets, and all that remains after a colliery has gone bankrupt is a valueless gap in the earth, unlike the case of factories, inasmuch as in the latter case there are probably buildings, plant, and possibly leases which may form assets. The possible argument that perhaps may be brought against what I am saying is that where a colliery is financially rickety this proposed compulsion to insure as provided in this Bill adds to the cost of carrying that colliery on. That may perhaps be true, but surely the answer is that such a business should not be run or undertaken if it is too shaky to he able to insure against compensation costs in the event of bankruptcy.

Many owners already do this insurance. The Bill does not impose upon owners of collieries any expense or hardship which the best of them are not willing to incur now, and I am informed that in fact about 75 per cent. of them do so, and they consider that they do so in the interests of their workmen. It is the natural provision against the exceptional risks in the mining industry. I should like to express my appreciation of the attitude of the Mining Association in this matter, because they candidly recognise that employers should be ready to make sure of a firm foundation for compensation liabilities exactly as they have to provide for paying wages to their men. That is a right attitude to take, and it is I think on the ground that they do take that attitude, that they are giving their hearty support to this Bill.

Your Lordships will see that in the Bill there are three methods of insurance referred to. There is, first, the mutual indemnity association, which is a very common form, I believe, in the coal-mining districts. This method of insurance has been adopted by 364 collieries employing 511,600 men. The attempt is made in Clause 4 of the Bill to prevent the formation of unsound mutual indemnity associations by compelling all mutual indemnity associations to deposit £20,000 with the Accountant-General of the Supreme Court. The second method of insurance referred to is by the ordinary means of an insurance company or an underwriter. That method will be familiar to your Lordships. The third method proposed is by means of compensation trust deed. Under this method, I believe, the coalowner will have to pay annually the capital sum estimated by a qualified actuary to cover those accidents which are likely to occur during the coming year. Trusts of this kind have so far been adopted by sixteen undertakings employing 48,000 men.

I think what I have said fairly sketches out the general principle and outlines of this Bill, and it only remains for me therefore to mention the specific clauses and very briefly to summarise what they propose. Clause 1 does not need much explanation. The proviso to subsection (1) refers to the fact that in making mutual indemnity arrangements the owner carries the first twenty-six weeks compensation himself. The object of that is that the coalowner shall have some inducement to get the workmen back to work. The proviso lays it down that no condition in a contract of that sort shall invalidate the contract, but apart from that it is provided that in the event of liquidation the insurer shall assume liability even for the first twenty-six weeks. The rest of the clause lays down the penalties. Clause 2 enables workmen to know that their employer is insured or has otherwise covered his liability.

Clause 3 is complicated. The gist of it is that bankruptcy or failure to pay premiums to mutual indemnity associations or insurance companies shall not affect the liability of the insurer for claims which originally arose while the coalowner was insured. Contracting out is forbidden. That means collusion between owner and insurer to the detriment of the worker. Clause 4, which I have already mentioned, deals with the deposit of the £20,000 to be made by a new mutual indemnity association. Clauses 5 and 6 are formal, consisting of definitions and the title. A rather formidable Schedule outlines the necessary requirements with which compensation trusts must comply. In commending this Bill to your Lordships I should like to acknowledge the sympathetic assistance which has been given to it by the Mining Association, by the Labour representatives in another place, and by His Majesty's Government through the Department of the Home Office and the Lord Chancellor's Department. I have every confidence in moving here, therefore, the Second Reading of this Bill.

Moved, That the Bill be now read 2a.—(Lord Rockley.)


My Lords, I rise only to congratulate the noble Lord on his maiden speech, and to thank him that he has chosen that occasion for introducing so useful a measure as the one he has put before the House, the need of which he has explained very clearly to your Lordships. I feel confident that it will receive the support of this House. I am sure we all hope that the noble Lord will on future occasions intervene in our debates and bring forward more measures of this description, which are so useful to the community. He may be certain in this House that when he has the approval of the Opposition he is on the right lines.


My Lords, it is true the Mining Association take no exception to this Bill, but there are a great number of colliery owners who have expressed the view to me that the Bill is not really necessary because, by the end of this year, all the arrangements which are going to be enacted in this Bill will have been effected voluntarily, and as satisfactorily as even the terms of the Bill provide for, in the interest of the miners. The position really is this. In 1925 the collieries of this country had had a pretty good time and there was no prospect, when that Bill was before Parliament, that any liquidation of firms was likely to take place. But in the period which has elapsed since 1925 there have been a large number of collieries, as the House is aware, which have lost money and in some cases they have gone into liquidation. When a colliery concern goes into liquidation, after Government taxes are paid out of any assets, the compensation money and the wages of the men come next, before even the interest of the debenture holders. Nevertheless there have been cases where men who have been entitled under the Act of 1925 to permanent compensation have not been able to secure it owing to the fact that concerns have gone into liquidation and have not had enough assets to enable the compensation to be paid.

That has caused a real grievance to a limited number of men who have thereby been placed in a very unfair position, because they have not been able to obtain the compensation which was intended to be given to them under the Statute of 1925. This Bill, at any rate, will make certain that after the end of this year every man, whether a firm goes into liquidation or not, will secure the full compensation which is due to him. Therefore it is with pleasure that I support this Bill. It is only carrying out what really all coalowners have felt should be carried out, and I think would have been carried out successfully, voluntarily, by the end of this year if this Bill were not passed into law. The Bill, however, does cover the ground, and will ensure that every workman will get his compensation in future no matter whether the firm he has worked for goes into liquidation or not.

There are three or four small Amendments to which I would like to draw the noble Lord's attention so that he may consider them before the Committee stage. Of course I will place them on the Table of the House. I might mention them now, however, so that they can receive consideration. In Clause 1 there are the words: "workmen for the purposes of that mine." The words "for the purposes of that mine" are very loose phraseology. It is only intended that the workmen employed in or about the mine should be included for the purposes of compensation, and to leave in the words "for the purposes of that mine" might involve the shipping stage and bring in even men on board a line of ships belonging to a colliery company and extraneous men apart from the miners working in or about the mine. Therefore I will suggest that the words "in or about" that mine should be inserted instead of the words "for the purposes of" that mine.

The next Amendment I would suggest for the consideration of the noble Lord and his friends is that the paragraph at the bottom of page 2 to the end of section (b) at the top of page 3 should be omitted, and a clause inserted which I shall place upon the Paper to come in after the first paragraph of Clause 1 on page 1. The object of that Amendment is that if a compensation trust is going to secure the proper carrying out of proposals similar to those of an insurance scheme, the two should be put in an analogous position and be included in that part of Clause 1. Otherwise it would mean that those in a compensation trust, when all the provisions of the Bill have been complied with, might be put in a very awkward position, and might have to defend themselves in the Courts of Law in order to prove the existence of their compensation trust scheme. As the Bill stands at present they are put in rather an invidious position. So long as they comply with the necessary covering of the insurance of the men, it would be better, I suggest, that they should be put in the place I have indicated.

Another Amendment I propose to move is to Clause 1 on page 3, subsection (4), line 27. I propose to leave out the word "three" and insert "four." This Bill does not come into operation till January. 1, 1933, and it seems to us that it ought not to be retrospective, but should come into force practically in 1934 and not in 1935 as suggested. The other point is only a small one. It occurs in the Schedule on page 12. In line 45 I want to insert after "deaths," "in excess." As the Bill stands at present the insurance company will have to charge an absolutely prohibitive premium in the event of all accidents being included, but if my words are inserted the insurance schemes themselves would cover the first five accidents, and after that premiums would be secured at a lower rate which would enable all to be covered in the event of a very substantial accident occurring. Where there are accidents only involving five deaths ordinary schemes will suffice, but it is necessary to meet the horrible danger of a large explosion which may mean a great number of deaths. The rates which would be asked for by the insurance companies for all accidents are very much greater than the rates which would be required for deaths in excess of five. These are four little technical points which really do not interfere at all with the principle of the Bill and I hope that they may find general acceptance on the Committee stage.


My Lords, there are reasons why I should very briefly address your Lordships' House. The first is that I should like to add my congratulations to the noble Lord who introduced this Bill. Those congratulations relate not only to the principle underlying the Bill, which has received full support from all sides in another place and will I feel confident receive the support of your Lordships' House, but apply also to the very concise and clear way in which the noble Lord explained intricate clauses in a rather complicated Bill. When this Bill was debated in another place the principle, as we have already heard, received strong support from all Parties and, my right honourable friend the Home Secretary expressed the support of His Majesty's Government. I think it would he improper if the Government representative in your Lordships' House did not give it the same measure of support.

The noble Lord, Lord Rockley, has clearly stated that the plan of the Bill is to make compulsory the adoption of one of three arrangements which the Mining Association has been urging coal owners to adopt — either insurance through an employers' mutual indemnity association, or insurance with an ordinary company, or the setting aside of reserves in the hands of trustees to meet liabilities. The question has been asked on what ground should a compulsory measure of this kind be applied to the mining industry and to the mining industry alone. The Government agree with the promoters of the Bill that it can be justified by two reasons. In the first place, coal mining gives rise to the heaviest risk of all industries, and, secondly, in no industry have the workers been exposed to such wholesale losses as in the mining industry. For those two reasons, and also for the reason which the noble Lord mentioned, that compensation paid in the mining industry is far larger than in any other—I believe it amounts to something in the region of £3,000,000 on the average per annum—I think it is right to make an exception, and that it would not be right to contemplate increasing the scope of the Bill at the present time. I assure the noble Lord who introduced the Bill, and your Lordships, that it will have the full support of the Government.


My Lords, I am much obliged for the kind remarks which have been made with regard to the Bill and the presentation of it. There is really nothing more for me to say at the moment except that I am sure that all those concerned will readily give careful consideration to any Amendments moved in Committee.

On Question, Bill read 2a, and committed to a Committee of the Whole House.