HL Deb 20 June 1939 vol 113 cc572-98

My Lords, I beg to move that this Order be approved.

Moved, That the Order, as reported from the Special Orders Committee yesterday, be approved.—(Lord Templemore.)

On Question, Motion agreed to.




5.22 p.m.


My Lords, in moving that the three Draft Orders that were reported from the Special Orders Committee yesterday be approved, it would be to the general convenience of your Lordships if I were to enlarge on the explanatory memorandum which accompanies each of these Draft Orders and to explain quite briefly the principal points of interest in order to show the House the intentions of His Majesty's Government in their consideration of the matter in question. The House will recall that on the Second Reading of the Military Training Bill, I reminded your Lordships that a number of Orders in Council would have to be made dealing with the very large variety of complicated matters that would materialise as the result of the passage into law of that Bill and of the Reserve and Auxiliary Forces Bill. If your Lordships would permit me, I shall deal with the last Draft Order on the Paper first—namely, the one dealing with the consequential insurance provisions.

This Draft Order is made under Sections 11 and 4 of the Military Training Act and the Reserve and Auxiliary Forces Act respectively. The first Article of the Order makes provision for the protection of industrial assurance policies, the premiums of which are payable by militiamen or by reservists or by their depen- dent wives and children. The second Article provides for ordinary assurance policies and friendly society assurances. These two classes of insurances differ in many important respects, and it is therefore necessary to deal with each of them quite separately. The premiums for the industrial assurances are, I understand, collected at short intervals and are generally relatively small amounts, and such policies are held almost entirely by poor people. My advisers have informed me that they believe there are in existence some eighty-five million industrial insurance policies in this country at the present time.

Your Lordships will observe that both Article 1 and Article 2 of this Draft Order protect persons from forfeiture of their policies during their period of service and for a certain time thereafter. Under both of these articles the period of relief consists of the actual period of service under either Act plus an equal additional period. Thus, if the period of service is six months the period of relief would be twelve months, and the period of grace another six months, making eighteen months in all. It will be further observed that the period of grace is an additional period after the period of relief which the insured person is given to pay up any arrears without interest which may have accrued during the period of relief. If any claim should arise before the period of grace, the claim will be paid in full less any premiums unpaid. There is an important limitation which your Lordships will observe—namely, that the benefits are not to apply in the case of policies the premiums on which exceed L25 during the year in question. We have purposely inserted this provision to rule out larger policies which may be taken out by the richer classes or by other people on their behalf.

I come now to Article 3 which contains the provisions for ascertaining the period of relief and the period of grace. By this article relief from forfeiture under the Order is restricted to policy-holders whose policies were effected before June 15 this year. In the case of policies effected on or after that date no relief is given unless a year has elapsed between the date when the policy was effected and the date when the policy-holder began his period of service. The period of relief on this class of policy is the actual period the man serves either as a militiaman or is called up as a reservist under the Reserve and Auxiliary Forces Act. Your Lordships will agree that it is right and proper that a restriction of this kind should be inserted for we can clearly envisage a situation arising in which a man called up for service might conceivably effect a number of insurance policies with no intention whatever of paying more than the first premium, and thus enjoying free cover on each insurance during the whole period of his service.


May I ask the noble Earl how he avoids the danger of fraud in that way? I do not understand how it is provided for.


I thought I had made it clear that relief from forfeiture under the Draft Order is restricted to policies which were in existence before June 15. After that date no relief is given unless a year has elapsed between the date when the policy was effected and the date when the policy-holder began his period of service. That appears to me to be quite clear, but I am perfectly prepared to admit that the provisions are somewhat complicated. I have endeavoured to explain to your Lordships the principal points, and perhaps I might deal with any others that arise in my reply, or my noble and learned friend on the Woolsack will deal with them in my place.

I turn from that Draft Order to the first Draft Order appearing on the Paper, which is made under Section 4 of the Reserve and Auxiliary Forces Act and gives protection to men called out, and to their dependents, in respect of their civil liabilities. Under this Order no step can be taken, except with the leave of the Court, to enforce during a man's period of service and for a similar time thereafter, (1) any judgment for the recovery or for the possession of any premises of which he was in occupation before his period of training began; (2) for the payment of any rent or mortgage; and (3) for the matters connected with hire-purchase. We make further provision for a case of hardship caused to some person who was unable to meet his obligations due to the calling up of some other man. The second part of the Order deals with civil remuneration and superannuation rights and your Lordships will observe that special protection is afforded to clerks of the peace and deputy clerks, coroners and justices' clerks who may be called out, and it provides that they shall receive their salary less the amount of their service pay. I am advised that the necessity for all these three cases being particularly mentioned is due to the Act of Parliament dealing with their appointments whereby the liability of obtaining deputies to act is placed upon the persons in question themselves.

Article 7 provides that while an employee of any local authority or any other body mentioned in the table which will be found at the top of page 16 is serving, he shall be deemed to be absent on leave. In this case the pay that he will receive is that less the difference between his service pay and allowances and his civil remuneration. Article 10 is designed to secure that any person called up will not lose or forgo his superannuation rights, but that he will be treated in exactly the same position as if in fact he had never been called out at all. Articles 11 and 12 safeguard teachers in this country and teachers in Scotland. Article 13 deals with police and firemen's superannuation and Article 14 with superannuation schemes of employers owning private undertakings. Article 20 deals with the billeting of Army Reservists and Territorials called up for service under the Act, and Article 21 permits the use of requisitions for the provision of vehicles and stores in consequence of the passing of the Act. Article 22 deals with billeting for members of the Air Force and Article 24 with the billeting of Naval Forces. Article 26 secures that those persons called out will continue to be insured during their period of service under the National Health Insurance Act, and Article 28 provides that any scholarship which has been won may be prolonged if the person who has won it is called out for service.

I come now to the last of the Draft Order made under Section 11 of the Military Training Act, and your Lordships will observe that protection is afforded to militiamen in a similar fashion as under the previous Draft Order which I have just explained, with one exception, that any payment due under an obligation entered into will only operate if that obligation has been entered into before the 15th of June last. The House will observe that we have protected the rights of militiamen under the National Health Insurance Act and under the Unemployment Insurance Acts, and, further, under the Contributory Pensions Act. All these rights are safeguarded by Articles 9, 10, and 11. Article 12 makes it clear that, as no reductions are to be made from the pay of persons to whom the Military Training Act applies, no contribution under the three Acts which I have mentioned is recoverable from the militiaman. The remaining articles of this Draft Order are practically similar in every detail to those which I have endeavoured to explain to your Lordships. I beg to move that the special Orders, as reported from the Special Orders Committee yesterday, be now approved.

Moved, That the Orders, as reported from the Special Orders Committee yesterday, be approved—(The Earl of Munster.)

5.35 p.m.


My Lords, so clearly has the noble Earl explained these very complex measures that I hope His Majesty's Government will, as soon as possible, send him round the country to the different depots and camps, and wherever these young lads are being trained in the Territorial camps, to explain them there. The noble Earl, the First Lord of the Admiralty, has been a soldier and he has read these Orders. I wonder how many of his troopers would have understood them. They are most complex; in fact, I would like the Government to send the noble and learned Lord Chancellor himself to explain them to the officers so that they in their turn could explain to their men the real meaning of the Orders. They are full of ambiguities, and I shall venture to draw your Lordships' attention to one or two of them in a moment.

First of all I must apologise for having interrupted the noble Earl, though I notice the interruption did not in any way disturb the sequence of his explanations. The point I wanted to elucidate is this. This is retrospective legislation; it must be. There is no complaint about that. You seek to protect the militiaman who is called up unexpectedly under this emergency legislation, or the Territorial soldier called up for his period of service, on account of certain obligations in respect of insurance, hire-purchase and matters of that kind, but only for transactions entered into up to June 15. Now the Bill with which we are dealing, and to which these Orders are consequential, is, I understand, to last for three years, but, if circumstances demand it, it will, of course, be extended. I ventured to suggest to your Lordships in the debate on the Bill itself that this legislation would now become permanent. The emergency may continue if His Majesty's present advisers remain in office. The longer they remain in office the worse things seem to become, and I can see no possibility of this emergency legislation ceasing, so long as this Government is in office. Therefore you will have a series of classes of young men called up. Now surely it is public policy to encourage thrift, and insurance is a form of thrift. Are you to say to all young men liable in future to serve under the Conscription Bill: "You must not enter into any insurance policies—it does not matter if you want to be married or whether you have aged parents dependent upon you, you must not enter into insurance policies after June 15, 1939." Is that the intention of the Government? If the men do enter into insurance policies, or insure themselves, it means that out of their scanty soldiers' pay they have somehow or other to struggle to keep up the payments. I suggest that the Government ought to look into this matter still further.

That brings me to my next point. These Orders—I suppose it is unavoidable—are being rushed through Parliament. I know the last thing the Leader of the House would wish to do would be to hustle your Lordships in any way, but we sat as a Public Bill Committee most unexpectedly yesterday afternoon to go through these Special Orders so that they might be taken to-day on the floor of the House. They are being taken in another place to-morrow. This is, I suppose, our only opportunity of discussing them. I suggest to your Lordships that it is really asking a great deal of us to deal with these highly complicated matters this afternoon. I will go so far as to say this—and here I am not expressing my own opinion only, but the opinion of my friends who have closely examined these Orders—that the Government are bound to amend them later on. We consider them unworkable, at least in parts, and indeed we are not sure that they are altogether legal. I say that with full respect to the noble Earl the Chairman of Committees and the very distinguished body of Peers who examined the Draft Orders yesterday.

Dealing with the Draft Orders as they appear on the Paper, and not in the order in which they were taken by the noble Earl who spoke for the War Office, I will take first the Draft Order made under Section 4 of the Reserve and Auxiliary Forces Act, 1939. I wish to draw your Lordships' attention to something which I think is a curious anomaly. I refer particularly to Articles 4 to 8 which deal, broadly speaking, with public servants. Employees of local authorities and certain other officers who are called out as Territorials or reservists to do their turn of duty are picked out as a special class of citizens to receive special treatment. They are to have their pay made up, because they are, I suppose, employees of local authorities. I am not sure, but I understand that ordinary civil servants will not have that privilege. I would like to have that point made clear if the noble Earl will be good enough to enlighten me. I understand that employees of local authorities are to have their pay made up, but that Government civil servants are not. That seems to me extraordinary.

Why do not the Government try to induce all employers of men called up for these short periods of service as Reservists or Territorials to make up their pay? I dare say it would perhaps create great hardship in certain cases, but you could have a fund to compensate the small man—"the little maister," as they call him in the Midlands—who would be required to make up the full pay of the few men he employs who might be called up. You can have a pool and draw on that. At present it is proposed to pay some men, such as justices' clerks or coroners, while others serving side by side with them will just get their ordinary Territorial soldier's pay. I suggest that that will create a certain amount of ill-feeling amongst men serving in the same units. It would have been far better if the Government had grasped the nettle and had said that no man called up for the defence of the country for a short period should suffer in his pocket, whether he be a clerk to the justices, or a coroner's clerk, or in ordinary employment. That is the main criticism I have to make on this first Draft Order.

It is explained that you must pay their remuneration to the clerks of the peace, to coroners and to justices' clerks because they, poor fellows, have to pay deputies to do their work. But then you go on to say—I am not attempting to deal with the Draft Order, I am only trying to understand the Explanatory Memorandum, and even with the noble Earl's explanation that is rather a hard task— In each of these cases also the officer is required to appoint and pay out of his own pocket for the services of a deputy so far as may be necessary but the authority concerned is empowered to recoup him for the amounts paid to his deputy. In that case, why not pay the deputy right away? Why go through this complicated business in order to pay a clerk of the peace in order that he can pay a deputy, and then reimburse him for the amount paid to his deputy—less, of course, his Army pay. Unless I am mistaken in my reading of the Draft Order, these people are to be put in a privileged position. There may be good reasons for that and I am very glad they will not suffer. I am sure they are worthy citizens; but it is not right that these legal gentry or semi-legal gentry should receive preferential treatment over other persons called up as Reservists or Territorials. So much for the first Draft Order on the Paper.

Now, if I may, I will draw attention to the second Draft Order which deals with the case of the young militiaman unexpectedly called up as a conscript. It seeks to preserve him from hardship in respect of perfectly proper commitments he has entered into, such as rent, the hire-purchase of furniture, insurance premiums and so on. My Party—for whom I am speaking—take very great exception to the meagreness of the protection provided. The only protection really that you give to the young militiaman is the mercy of the Court. I think I am right in saying that. He has to prove hardship and then the Court, if satisfied, has to show clemency. I am told that the numbers affected are astonishing. There are young men who in perfectly good faith have entered into all sorts of commitments—sometimes in conjunction with their widowed mothers or their parents—for the hire-purchase of furniture, for rent and one thing and another, who are going to be very hard hit. I am told there will be about 100,000 families affected. It is an enormous subject that we are discussing.

What my Party say should have been done was to have created a pool of compensation from which, where hardship was proved, you could provide the necessary means to meet these obligations. Then you would not have robbed—I use the word not in its literal sense—you would not have caused hardship in turn to the small landlord or to the person engaged in a little business as creditor of hire-purchase schemes and others who are bound to suffer under the present Draft Order. You could have compensated them directly and have relieved the militiaman at the same time. Now in any case you are only postponing the burden of debt. The young militiaman comes out of the Army, gets a year and a half grace added to his six months' training, and then he has to pay large sums. When he is struggling to replace himself in civil life he has this great debt over him. It would have been far better to have relieved him of all such obligations.


He is not struggling to get himself back into civil life. That is specially protected under the Military Training Act. He will go back to the position he occupied in industry before being called up.


He has got to get back into civil life and resettle himself. As I read it, he has to pay arrears. Is not that the case?


Only the arrears when called up.


We understood that these arrears could mount. They are completely suspended in the case of insurance, but what about rent and hire-purchase payments and so on? What happens then? If I am being over-tender for the young conscript I am very glad. Perhaps he is better off than one thought, but that is our reading of the Draft Order—that he will come out of the Army with a burden of debt. If he does not, all the better; but in any case somebody is going to suffer and accordingly we hear a great deal of complaint from insurance companies and I do not blame them. We shall hear about that presently from the noble Viscount on the Liberal Benches. As I understand the position, insurance companies, both industrial and ordinary, are going to be very hard hit and they are asking for special treatment. But what about all the other people—landlords who have to do without their rent, and the people who have supplied goods on hire-purchase? Obviously the anomalies created are numerous, and the losses created will be numerous as well. With regard to the third Draft Order, which deals with insurances more particularly and the period of grace and the arrears of premiums, I am only asked to say on behalf of my friends and my Party that, while we do not want to see any injustice to the insurance companies, we cannot see any reason why they should be specially singled out for relief. I am sure that is not the intention of the noble Viscount. There are other businesses which are affected as well, and what might be held to apply to insurance companies we suggest should also apply to others who may be consequential sufferers as a result of this Act.

We are dealing here with emergency regulations; that we understand. We always thought that the Government had a Military Service Bill ready in the pigeon-holes in case war came. Well, they have had to bring in a modified one for the state of twilight war or twilight peace in which we live; and this is the result. They had to deal with an entirely novel situation; we appreciate that, and we do not want to complain too much about it. But we consider that these Draft Orders are only provisional, and the opinion of certain of my friends, who have gone very closely into the matter, is that the Orders will have to be amended in the very near future. Now they cannot be amended in either House of Parliament; they can only be discussed and either accepted or rejected. We do not intend to oppose them; we have no intention of doing so either in the other House or in your Lordships' House. Nevertheless, though they give substantial reliefs, the reliefs are not sufficient, and they create with the reliefs a good many hardships.

5.52 p.m.


My Lords, the few observations I am obliged to make are only directed to the third of these three Orders. I do not know whether it is quite convenient to take them all three en bloc, but we are in the hands of the noble Earl and we must adapt ourselves to what he has done. These Orders came before the Special Orders Committee yesterday afternoon. As the noble Lord on the Opposition Bench said, we had very short notice of them and Monday is a very unusual day for a meeting. A number of noble Lords who happen to be connected with insurance companies and whom I have seen this afternoon had never heard of the Orders until to-day, and the Orders were flung at the head of the House at what seems to some of us unreasonably short notice. I know that the Orders have been lying on the Table for about six days, but they were not six working days. However, I will not pursue that point.

The Special Orders Committee had these Orders before them. The Government were represented by learned counsel and by a host of officials from the Departments concerned. The duty of the Special Orders Committee, as your Lordships know, is to determine three points: Do the Orders raise questions of policy and principle? Are they founded on precedent? Is any special inquiry necessary? Having heard what your Lordships have heard, and perhaps having looked at the Orders, I think your Lordships will be somewhat astonished to hear that learned counsel submitted first of all that the Orders did not raise any special question of policy; secondly, that they were founded on precedent—and I need hardly tell your Lordships that the Special Orders Committee unanimously found against the Government on that point. On the third point, whether a special inquiry was necessary—which means, as your Lordships know, a Select Committee—those of us who were interested from the insurance side did not ask for it, because we realised that these consequential Orders are founded on really important Acts, that they, or something of the same nature, are really necessary, and that the Government alone can judge, from the timetable on which they have to go, how quickly the Orders have to be got through.

I should like to submit that it is not necessary to pass these Special Orders to-day. It would be very undesirable to reject them, but it is quite open to the Government to bring up other amended Orders in a short time. I am able to say on behalf of the Association of Life Insurance Companies that they would be ready and anxious to co-operate as quickly as possible with the representatives of the Government in agreeing upon an amended Order this week. We have been told again and again, and I believe we shall be told again this afternoon, that the Government recognise that these Orders, and many other Orders which are consequential on the two Acts, are merely provisional and will probably have to be amended very shortly, because the Acts themselves and the Orders following upon them have been brought forward in a great hurry. We recognise that, and we think, therefore, that it might be better to do this now rather than to wait for some indeterminate time. I am quite sure that the Government will not wish to antagonise at this early stage the large interests which are concerned with insurance—and when I say "large interests" I do not mean finance, I mean the whole body of the people who are insured.

The only thing that gives me a little hope is that I notice that the original—if I may say so without any aspersion—light batteries of the Government have been supplemented by some heavy artillery this afternoon. I understand that the noble and learned Lord on the Woolsack is going to reply, which does not make it, of course, any easier for those who criticise the Orders. What the insurance companies feel is that this is a wrong principle altogether. You are throwing the whole onus of the risk upon the insurance companies when it is really a matter, they contend, which should be thrown upon the general taxpayer. You are not following the precedent of the Great War, when the Government took the risk; you are asking the insurance companies to do that. You are not giving them any time limit: in fact they do not know how long this is going to go on. It is supposed to be going on only, as we are at present situated, for a certain time, but there is no reason to believe that it will not be extended. What you are really asking the insurance companies to do is to lend money without security. You are making no differentiation between the people who are able to pay their premiums and the people who are not. Some method of inquiry as to this would surely be a good thing.

Various minor points arise. For instance, the noble Earl talks about the £25 limit. Does that mean one policy, or half a dozen policies taken out by one individual? As I read the very complicated Order—because it is complicated—that is not clear. What one is afraid of is that the policy which has hitherto been followed by the insurance companies of making every possible concession to the Fighting Services and giving the most generous terms they can will be modified. Only quite recently they gave an additional facility—reduced premiums, in effect—to aviators. You will cause the insurance companies to reconsider the whole of the question of insuring soldiers, sailors and aviators—and that, I am sure, would be a very undesirable thing.

I am not attempting to go into the detail of the Orders, but I would suggest one of two alternatives. If this debate were adjourned to-day, it would give the Government time to see if they could not put forward an amending Order, or it would make the insurance companies a little more content—there is no doubt that they have had very hard treatment—if the Government could tell us definitely when they would be prepared to bring up an amending Order. Once these Orders have been passed the Government will have a great many other things to do and that is why we have not pressed very much harder for a Select Committee, which I am sure the noble Earl will admit is the normal way of dealing with these matters. We do not want to embarrass the Government, or to give the impression that the insurance companies are not as ready as any other interests to help in these matters, and I would ask the noble and learned Lord, who I understand is going to reply, not to leave the insurance companies suffering from what they consider to be a real grievance.

6.2 p.m.


My Lords, I do not propose to detain you for very long, because I have not had time to consider these various Orders and from the very brief study which I have made, to be candid, I very much doubt whether I should understand them even if I had been able to give them longer consideration. I must, however, echo the complaint of Lord Strabolgi about the very short time that we have had these Draft Orders before us, because they are extremely complicated. They deal with a very large number of activities—not only insurance but other activities—and none of the people whom they concern have had an opportunity of considering what effect the Orders may have upon their business. The noble Viscount, Lord Mersey, has dealt very fully with the question of life insurance, but I understand that these Orders deal with mortgages, rents, hire-purchase payments, superannuation fund payments and the like. Those are all matters which concern a very large number of people, and it is difficult to understand what will be the situation of persons who depend for their living upon the rents of a few houses, if the rents of one or two of those houses are going to be suspended during the time when the occupants are serving a military term, or are called up to the Reserve and Auxiliary Forces.

Further, what will be the actuarial situation of superannuation funds if there is a suspension of payment for a period of six months, while people are still going to derive the benefits? It must upset the position of such funds, and I feel that those things want a more careful consideration by all the people concerned. Similarly with hire-purchase payments. It is true, of course, that the man who sells on hire-purchase has his security, which is still unpaid for, but it must affect his position.


He is not going to be able to get his security back under this Order.


Still it is presumably there, although he may find himself in difficulties. I am not going into details, became of course one cannot amend Draft Orders such as these, but I would like to put before the noble Earl in charge of the Orders this consideration: It is quite true that we all want to make it as easy as possible for those called up under the Military Training Act, or who have to do an extended period of training in the Reserve or Auxiliary Forces, but it seems to me that sentiment may be inclined to go a bit too far, and that these people who will be so called up may even be better off, as a result of these Draft Orders, than they would be if they had not either served under the Military Training Act or been called up to the Auxiliary Forces. That in itself would not be a desirable object nor, I am sure, one which the Government wish to further. We do not want them to be worse off, but it seems to me that it is undesirable to put a premium upon their serving. I do not know that that will in actual fact be the result of these Draft Orders. I think that the reverse may likely be the case. Those who are concerned, so to speak, on the other side, that is to say, the insurance companies, those who hope to receive rent, the mortgagees, and so on, will be disposed as a result of these Draft Orders so to alter the conditions that they impose in the future, that those called up under the Military Training Act, or those who have to serve in the Reserve or Auxiliary Services, may find themselves in a worse position than they would be in if they had not been so called up, because of the tightening up of conditions.

Finally, there is this point. I think, as was pointed out by Lord Mersey, there is no precedent for anything of this nature; but if these Draft Orders come into force they become presumably a precedent for future action. I would ask the noble and learned Lord to state specifically whether or not they will be a precedent for similar action in the event of war. Is the person who is a receiver of rent, in the event of war to receive no rent so long as the war lasts? Are no further mortgagors to be paid, or hire-purchase payments made? What is to be the effect if that is so? It would be, of course, a very useful precedent, and a precedent likely to be used in the event of war. It will be very helpful if a definite pronouncement can be made on the subject. May I add that, while I cannot oppose the Draft Orders at this stage, I do hope that the Government will be able to say, quite definitely, that they will further consider these Orders, with a view to amendment, and that they will state as definitely as possible when they will be able to put forward some such amended Orders?

6.9 p.m.


My Lords, there is just one other point to which I would like to draw the noble Earl's attention, and it is a difficulty that will arise under these Orders. I asked a particular industry how many men would be affected, and they told me 180. I asked what their position was going to be. I was told that they would get about 30s. a week, and I think food, in the Militia during their six months training. With regard to the men in the Territorials I do not think there will be very much difficulty, but in regard to the men, called up for six months training, who are in this industry receiving from 60s. to 65s. a week, they have already committed themselves to money payments to carry on, and many people are dependent upon them. It seems to me quite impossible for an industry which has to find other individuals to replace these people, to make good the difference between what I call the 30s. received from the Government and the 65s. which they have been receiving from the industry. This matter is, of course, engaging the attention of a great number of employers as to what is the position of their men during the period of training. When they come out of training it is quite simple for them to carry on, but they will very likely be in great debt, and they may fail to meet many of their obligations of a financial character incurred during the period of their training, and we all want men, in joining up, to feel that they are not going to be in a much worse position. On these grounds I hope the Government will see if they cannot, at any rate for a few days, postpone the carrying out of these Orders, so that the matter may be gone into with the insurance companies especially who are interested in this matter.

6.12 p.m.


My Lords, I want to support the plea that has been put forward from all quarters of the House that this matter should not be proceeded with without just a little bit of delay. In the case of every one of us, in a matter that is going either to facilitate the arrangements about the Militia or to remove the fears of people who are called up for service, our first instinct must be, of course, to support it and do all we can to assist. But in the exuberance of our patriotism we must be a little careful not to inflict very severe injustice. I suppose it will be admitted that these Orders do open the way to the possibility of very considerable loss for the insurance companies. Insurance companies are either insurance companies under the Companies Acts, in which case they have shareholders, many of whom may be poor people, or they are mutual insurance companies, in which case the loss is going to fall on the policy holders. I am not going to endeavour to describe the anomalies and difficulties which arise out of these Orders, but I can assure your Lordships that they are very great.

One matter which I think is of great importance does emerge, and that is the complete lack of realisation, or apparent lack of realisation, that it causes an insurance company to afford cover, even if the assured person does not die in the period of cover. As far as I can see, from a fairly cursory perusal of these Orders (because I have not had time to do anything else) it will be quite possible for a person to secure cover by paying one premium, and remain covered for two or three years without having any further payments to make to the life assurance company.


I definitely said that it would not be possible.


The noble Earl may have said it would not be possible. The Government's advisers may be right, but it is also possible that they are wrong, and if a little further time can be given to satisfy us that they are right, I think we should all be more comfortable. The offer has been made by the noble Viscount opposite, speaking for the life assurance companies, that they will do everything to expedite this matter, and a matter of days was mentioned. I cannot believe, in view of the great anxiety that has been expressed, that it is really impossible to postpone the passage of these Orders for the two or three days, or a week, that have been asked for from all quarters of the House.

6.15 p.m.


My Lords, I have some difficulty in answering the various points raised, for the very simple reason that, in attempting to pick up the threads of the debate, I have no table on which to put my papers, and I should like to have them spread out. If, therefore, I omit anything, I hope your Lordships will not think that it is from any desire not to deal with the points that have been raised. The noble Lord, Lord Strabolgi, who dealt first with this Motion, stated that the Orders are doubtless full of ambiguity, and I agree that they are not devoid of ambiguity here and there; and I think many of your Lordships have stated (and again, I am afraid, with truth) that the Orders are very difficult to understand. I should like to say with reference to those criticisms, that I have to admit that it would have been much better if the Orders could have been considered in much greater detail, and if they had been the subject of a great deal more criticism than they have received before they emerged in the form in which they now are. But your Lordships will remember, I am quite sure, that not only the Ministers, but the draftsmen and the staff, have been engaged, in the last month or more, in work so great and so continuous that it really is not an exaggeration to say that some of those gentlemen have not had enough time to sleep. The amount of work of a kind analogous to the work embodied in these Orders has been without parallel during at any rate the last hundred years. I think, therefore, that before you condemn the form of the Orders, which you are perfectly entitled to do if you are condemning them, so to speak, in vacuo, you must remember that the persons who are responsible for the Orders as they now stand have got an excuse which no critic can fairly afford to disregard.

And this much is true, as several of your Lordships have already pointed out: these Orders will require to be amended by later Orders, and before very long. I am not in a position to give your Lordships a pledge on such a matter. There will be an ample opportunity in another place to ask what the Government can promise on that point. But obviously I cannot make any promise. To-morrow I think the matter will be in another place, and will be considered with great care, and criticisms will no doubt be made on the form of the several Orders. But I am perfectly sure there must be amending Orders at some not very distant date, and when these Orders are put forward all these criticisms which your Lordships have made will be most carefully borne in mind, and no doubt many of them will be met. One other thing I think I should say by way of preliminary, and that is that your Lordships have said, and said truly, that the Acts under which these Orders are made are for three years, and it is said the Acts may well be extended. But long before the expiration of the three years any defects which may be proved by experience to exist in these Draft Orders will be dealt with by the two Houses. Accordingly that fact ought not to affect the view your Lordships should take at present.

More than one of your Lordships has said that it is possible these Orders will apply in war. It has already been published on behalf of the Government, in the Command Paper dealing with the provision of monetary assistance to persons liable to training, that this is not so. In that document it is stated with regard to these Acts: The proposals are applicable to peace-time conditions and are not to be taken to apply in the event of war. As all your Lordships are aware, immediately war broke out there would have to be legislation of the most elaborate character brought into force. We should live once more under the influence of D.O.R.A. A great many Orders in Council would be made under D.O.R.A., and all these things, or nearly all of them, would have to be replaced by Orders of a very serious and drastic character such as those which noble Lords who are no longer young will remember quite well were made from 1914 right up to the end of the War.

The noble Lord, Lord Balfour, suggested that there were a number of things which might be done under these provisions, and the hope was expressed by him that the provisions would not be made to apply in the event of war. Provision would be necessary. An endeavour would be made to do justice as between all these people who were going to be affected by war—landlord and tenant, mortgagor and mortgagee, the hirer of hire-purchase goods and so on, and, of course, as between debtor and creditor. On occasions like that, as your Lordships are well aware, you cannot do more than achieve approximation to justice. Both parties have suffered, and the only thing the Government can do by Act or Order in Council is, as far as possible, to do substantial justice between two people, both of whom are overwhelmed by an unexpected and unavoidable calamity.

So far as these measures are concerned, which are intended, as I said, to apply to times of peace, the object of the Government has been to do that—to provide as far as possible justice between persons, both of whom are affected and both of whom may suffer considerable hardship as the result of a necessary measure. Obviously, dealing as the Government are here doing with times of peace, there is not the faintest idea in the mind of any member of the Government to discourage thrift. That was a point made by the noble Lord, Lord Strabolgi. Thrift will not be discouraged in any way. I for my part am of the opinion that there is nothing in these measures which would prevent a man from entering into a policy of insurance. On the contrary, some noble Lords think he may enter into such a policy in the belief that he is doing better than he would be able to do if he were not called up. When I come to deal with that point, as I shall do before long, I hope to persuade your Lordships that the Government once more have discovered in this matter a via media which is not unfair to the person called up under these Acts or to the insurance companies.

The first question that arises is with regard to Articles 4 and 8 in the Draft Order with reference to the Reserve and Auxiliary Forces Act. The suggestion of the noble Lord, Lord Strabolgi, was—and I can quite understand his making it—that something more might be done for the people who are called up under that Act. He is not content with the provisions which are contained in Articles 4 and 8. He also asked who the people were who were to be subject to these Articles. Let me answer the last question first. If the noble Lord will kindly turn to page 16 of the Draft Order he will see a list of all the persons to whom Article 7 is intended to apply. It is a long list, and I will not take up your Lordships' time in reading it, but it covers a large number of persons. The noble Lord wanted in particular to know why a much wider measure of protection could not be given to the persons who are liable to be called up. His complaint was that the protection is meagre as regards the militiamen, at any rate, and that it is to be sought only with the assistance of the Courts. The answer to that is that there is an infinite variety of cases to which the articles in question are intended to apply. There is the case of rent, there is the case of sums due, mortgage interest, sums payable under hire-purchase contracts and there are the liabilities which the man may have be- come subject to in respect of what are described as other obligations. It is impossible to provide that there shall be a general pool collected in some way and that the men who suffer a disadvantage in one or other of these directions by reason of being called up shall be indemnified out of the pool. There is, I venture to think, no way in which the latter can be dealt with—I am not dealing with details for a moment—except that which is adopted in the various Orders in Council.

In the first place there are judgments or orders which existed at the date when a man was called up, and they may be judgments or orders for recovery of possession of premises, or for the payment of rent or mortgage interest, or payments due under other obligations. Well, in respect of those things the leave of the Court has to be obtained before anything can be done. Then there is protection for the case where a man is called up who is residing with a person wholly or partly dependent on him in a dwelling-house, or part of a dwelling-house. The Court has power to give relief in those matters, and the Court, under paragraph (4) of Article 1 of the Order in Council, is given a wide discretion to refuse leave or to grant leave, either conditionally or subject to such conditions as the Court thinks just. The order which the Court would make would differ in almost every case in accordance with the nature of the circumstances and the sort of relief that had been applied for. There are cases where very little relief ought to be given. There may be, for instance, a person seeking relief who is perfectly able to comply with the obligations. Why should the Court interfere in such a case? If, however, a man cannot comply with his obligations, then the Court will have to give relief, and a wide discretion is given. I would remind your Lordships that under the Hire-Purchase Act, which became law not long ago, there may be cases in which hardships would occur. We know that very often cases of hardship do arise under hire-purchase agreements. A man may lose his job, for example, and therefore cannot pay his instalments. In this case, the Legislature thought fit to leave to the Courts discretion as to the order that ought to be made. I must confess that for myself I see no other method of dealing with matters of that sort except in that way.

A question was asked as to whether the justices' clerks are treated, as the noble Lord suggested, in a way much more favourable to them than the other employees of local authorities. I doubt very much whether that is the case. If you are dealing with the clerk of the peace of a borough you must remember that he may be paid by fees or by salary, and, in practice, he has to appoint a fit person to act as deputy for him in case of his illness or incapacity or absence from any cause. There is no statutory provision in regard to the remuneration of a deputy so appointed. Such a clerk of the peace is treated in a different way to the local government servant because there the provision says that the proper authority may make up his service pay to the level of his civil remuneration, and there is no question of his having to appoint a deputy to act on his behalf. He is simply treated as if he had leave of absence, and the authority can make up his service pay to the level of his civil remuneration so that he gets exactly the same as before.


Will the noble and learned Lord forgive me if I ask him this question? The same argument was used yesterday by the Crown counsel, but I did not see that it made sense then. How can you say that a man has to have his pay made up because he has to pay a deputy when it is laid down here that the local authority is empowered to recoup to him the amount that he pays to such deputy?


I hope I was not guilty of an inaccuracy. I was stating what the position was with regard to the servant of the local authority. In his case, the proper authority may make up the servant's pay to the level of his civil remuneration. That is not the case, I agree, with regard to the clerk of the peace. Now the effect of the provision with regard to him is that where the clerk's service pay is less than the amount he pays the deputy (which may or may not be the case), the clerk may have the difference made up to him by the local authority. He will also continue to receive his emoluments as clerk. Where the clerk's service pay exceeds the amount he pays to the deputy, he is going to receive his service pay less what he pays the deputy. He will also continue to receive his emoluments as clerk. But the real distinction between the two cases is this: that the clerk of the peace has in the normal case got a deputy who has to be appointed to do the job and that has to be brought into account for the purposes of the provision for preventing the clerk of the peace suffering any grievous hardship on his being called up. I may add to that, that in all counties except the County of London the office of clerk of the peace is held by the clerk of the county council. He is not going to be called up, and, therefore, in his case there is no need for any provision at all. I hope that, to some extent at any rate, I have removed the doubts of the noble Lord.

Now may I pass to what was said by my noble friend Lord Mersey? The first thing that he referred to was a matter of importance and I have to deal with it. He urges that the insurance companies have got some points that they wish to urge and he asks that the Motion should be adjourned till next Thursday. You must remember that we are not alone in considering this matter. In another place the same matter is being considered and if we were to adjourn this until next Thursday it would mean that in the other place this matter could not be dealt with till after the adjournment, if there is to be any amendment here on Thursday next. The whole object of the adjournment, as I understand it, is to enable some amendment to be made here. That holds up the whole thing. I earnestly press on your Lordships that, although these measures are not—and no measure is ever likely to be—perfect, and although there are amendments that may be made as a result of subsequent Orders in Council, it is of vital importance that these Orders in Council should become part of the law of the land without the very smallest delay.

I think the noble Lord, Lord Strabolgi, frankly and candidly admitted that there are a great many things in these Orders in Council that are very much for the benefit of the men who are called up, whether as militiamen or whether as reservists or whether under any other right to call upon them for service. It is in order that that may be done immediately that I am earnestly pressing your Lordships to deal with the matter forthwith. If there were amendments they would have to be considered, and I doubt very much if it would be possible to consider them on Thursday next. In the other place there is so great a claim on Government time that I am perfectly sure there would be very great difficulties in getting these measures reconsidered, if there were amendments, in any short period of time. I do not know how long; that is a thing that I cannot tell your Lordships; but there is a grave risk that if we were to put off these matters the delay might be very serious and might do incalculable harm. Therefore, on behalf of His Majesty's Government, I am quite unable to accept that solution, although, as I have already said, I think it is quite possible that further Orders will be put before your Lordships' House before very long and then the noble Viscount's observations will be considered.

But I do not want to shirk the point as regards the period of relief, which now exceeds twelve months. It is fifteen months in regard to the ordinary policies of life insurance, with which my noble friend is concerned. The importance of that is that a militiaman who has done his six months training which entitles him to twelve months relief ought not to be deprived of further relief in respect of subsequent service in the Reserve. It is necessary in the view of the Government that he should have that further relief, and I doubt very much whether in another place it would be possible to persuade the Government to agree to a limitation of that kind which the insurance companies are desirous of having. There is a limit, as your Lordships have been told, in these Orders of £25 as being the kind of policy to which the Orders apply. That is to say they do not apply to a case where the premium is over £25 per annum. The noble Viscount asked me whether that meant one policy. It does, and it does for this reason, that it would be extremely difficult to make the limit apply to a case where a man had a large number of different policies of different kinds and different sums. It would be almost impracticable to alter the limit in that respect. Therefore the Government have adopted the principle of one policy one maximum relief. I agree that the limit selected is arbitrary, but that cannot be avoided in these circumstances.


May I interrupt the noble Lord? Does that mean that if a man has ten policies for which the premium is £25 each he would not benefit, that he would have to pay the premiums?


That is not my view of the clause in the Draft Order as it stands. In respect of each policy there is one maximum relief.


He would benefit in each case.


He would benefit in each case. I agree, if I may say so, that the noble Viscount is right in saying that the case he mentioned is one which would result in injustice and great and unintended benefit to a person who had a number of policies of that sort in one society, but the possibility is so remote that I think it really may be disregarded. A man wealthy enough to take out a number of policies of that kind would in all probability not require to take them out in different forms in a series of different policies. After all, he would save himself a lot of trouble in having a single policy with a single society. However, that is the clause as it stands. It may be that in an amending Order in Council something may be done to meet the noble Viscount's objection.

Those I think are the main points raised by the noble Viscount, but I intended to say one thing in reference to the provision that no protection is afforded to policies which have not been in force for at least a year in reference to post-Order policies—policies, that is to say, taken out after June 15, 1939. I think that the noble Lord, Lord Strabolgi, did not quite get the explanation he wanted on that point. The reason that that makes a difference is this. Apart from that clause a man after that date—to-morrow, for instance—might take out a policy, pay a single premium and then get cover for the next three years. Of course that would be grossly unjust and in the nature of a fraud. It is for that reason that the provision which I have referred to is in the Order, because it does not seem to us likely that anybody will not only pay the first premium on the policies so taken out but also the premiums for the whole of the first year after taking out the policy in order to get the advantage in question. The noble Lord will appreciate that at the end of the first year if he is a militiaman he will have served his period and will not be able to get any grossly unfair alvantage by having taken out such a policy. Of course it will be remembered that the advantages he gets quite apart from that, it being a post-June 15 policy, are by no means those which apply to a person who has taken out policies before June 15, 1939.

I am afraid I am wearying your Lordships, but I have nearly finished what I have to say. I appreciate, I think, the point raised by my noble friend Lord Gainford and I appreciate the fact that there may be special hardships in certain cases. The Government are at the present time unable to provide for any special hardships other than those to which I have just referred—existing orders and judgments, mortgagee and mortgagor, rent, hire-purchase payments and other obligations; and there may be some others which have not been included. All I can say is that it is impossible to provide for everything, but if it is found that there are certain things which can be defined and put in an Order in Council, then I am perfectly convinced that His Majesty's Government will be very glad to do so on the introduction of an amending Order. But how it can be done I do not know, and I am not able to give any pledge on behalf of the Government, because I feel that there is the greatest difficulty in dealing with the case which the noble Lord is considering. One must hope with regard to cases of that kind that people who are in the position of creditors will act with reasonable fairness and justice to the men who have served their country and been called up under these Acts.

I think that is all I need deal with, except some remarks of my noble friend the Earl of Radnor. He said, and I frankly admit it, that the time has been very short for the purposes of considering these provisions. That was inevitable in the circumstances of the case, but if he is willing to spend the next day or two in reading the provisions of these various Orders, I think he will find that the cases of superannuation, hire-purchase and landlord and tenant are reasonably well and properly treated in these Orders. Though I agree with him that there are cases in which men may be better off as a result of being called up, and also in which men may be worse off, I do not think that that is avoidable in the circumstances with which we are confronted here. In dealing with the enormously complex problems that have arisen in connection with these Acts and with the millions of people who will ultimately be affected under them, the difficulties are such that it is quite impossible to hope for more than fair and reasonable justice. You cannot do more. You will not be able to settle every problem with complete equity. You are dealing with a great number of different people in different circumstances and related by different obligations. All you can do is to do your best as between persons roughly in the position of creditors and persons roughly in the position of debtors.

In conclusion, I would say for myself that I believe that these measures are really, considered in the light of practical working, not ungenerous to the men who are being called up under these Acts, and that on the whole they will give substantial justice. Because I believe that that is true, although I frankly admit that amendments may be necessary in the future, I ask your Lordships to vote in favour of this Motion.

On Question, Motion agreed to.

THE LORD CHANCELLOR acquainted the House, That the Clerk of the Parliaments had laid upon the Table the Certificate from the Examiners that the further Standing Orders applicable to the following Bill have been complied with:—

London Passenger Transport Board.

The same was ordered to lie on the Table.