WORKMEN'S COMPENSATION (SUP- PLEMENTARY ALLOWANCES) (No. 2) BILL. (Hansard, 1 August 1940)

THE PARLIAMENTARY UNDER-SECRETARY OF STATE FOR INDIA AND BURMA (THE DUKE OF DEVON-SHIRE)
My Lords, I beg to move that this Bill be now read a second time. For some years past there has been wide-spread dissatisfaction with the law relating to workmen's compensation. The principal Act dealing with it dates back to 1925 and under that law the maximum payment in case of total incapacity, no matter what wages the man had been earning previous to incapacity, is 30s. a week. For some years past it has been strongly pressed that the position of workmen disabled by industrial accidents or industrial disease should be improved and numerous Bills have been introduced in the other House, none of which however have passed. Last December the then Government appointed a Royal Commission to undertake a comprehensive review of the position. This Commission, under the Chairmanship of Sir Hector Hetherington, has made considerable progress with its investigations, but war conditions have made it difficult for the Commission to carry on and it is impossible at present to forecast when the report will be available. In any case it would be difficult during war-time for the Government to initiate comprehensive legislation on this very difficult and involved subject.
Meanwhile the claim for increased benefits has continued to be urged and, after a debate which took place in the other House on January 30 this year, the Government undertook to enter into discussions with representatives of industry with a view to formulating temporary legislation to relieve the cases of hardship which existed. Certain conditions were then laid down. They were that the Bill should be of a simple character, that it should be capable of being brought into rapid operation in the existing circumstances of the war; that it should involve no vexatious inquiries into means, and that it should not impose upon industry a burden which industry could not bear. As a result of these discussions the 75 late Government introduced a Bill which provided for a scheme of family allowances, consisting of 5s. a week for a wife and 3s. for each child under fifteen years of age. The principle of family allowances is one which is quite new to workmen's compensation. Up to now compensation has been based, broadly speaking, on the wages which the workman concerned was earning and not upon his family needs. The Bill received a Second Reading in another place but did not meet with general acceptance. The Labour Party objected to a Bill which was limited to family allowances and did not give an all-round flat rate increase, which they felt was necessary.
The Government felt that it was un-desirable that there should be division of opinion and possibly acrimonious debate on the later stages of the Bill, and the new Government, which had by that time replaced the Government which introduced the Bill, decided to withdraw it and to suspend progress pending further discussions with the representatives of all concerned—that is to say, the employers, the employees, the Trades Union Congress and the representatives of insurance interests which are vitally concerned—with a view to arriving at an agreed solution. The present Bill is the result of those discussions and I am able to present it to your Lordships as an agreed measure. Its main difference from the Bill about which there was division of opinion is that it retains the children's allowances but the 5s. a week to be paid to a wife is replaced by an all-round flat 5s. for all disabled men. All parties have informed the Government that they are prepared to co-operate in making this measure work, but I should make it clear that it is a temporary measure only and that employers have made it plain to the Government that they do not accept the principle of family allowances in workmen's compensation. Their view is that if such allowances are introduced they should be a charge upon the State and not upon industry. The representatives of the Trades Union Congress have intimated that they are prepared to accept the proposals embodied in the Bill as a temporary measure to meet cases of hardship but that they hope that when the Royal Commission has reported a more comprehensive measure will be introduced.
76 The provisions in this Bill apply not only to accidents arising after it comes into operation but to all cases where the accident in respect of which compensation is payable occurred after January 1, 1924. The proposals will therefore throw an additional burden upon industrial employers for, as your Lordships will be aware, there is no State subvention towards the employer's liability for workmen's compensation nor do the employees themselves contribute. It is impossible to work out accurate figures of what the cost will be, but it is estimated that the increase in the total amount of compensation payable will be about 30 per cent, of what is paid now. The total amount paid now is about £9,000,000 a year, though that does not represent the whole cost of workmen's compensation to the industry. It is quite clear that this Bill will involve an increase in premium rates paid by those employers who insure, and I think I can be safe in saying the Bill will throw a burden upon industry in excess of £3,000,000 a year.
The Bill explains itself. Clause 1 provides for the increased rate of 5s, a week to which I have referred, and allowances for children. Clause 2 gives greater power to Registrars of County Courts to refuse to record agreements for lump sum payments in lieu of weekly compensation. At present Registrars have only power to refuse to record these agreements on the ground that the payment is insufficient. This provision will give them further grounds, and I think your Lordships will agree that they are equitable grounds, for refusing to record such agreements. Clauses 3 to 7 are purely machinery, and Clause 8 provides that the Bill comes into operation on August 19 next. The Bill does not pretend to be a comprehensive measure, but the necessity of improving the lot of people who are in receipt of workmen's compensation is urgent, and I hope that as a temporary measure pending the Report of the Royal Commission the Bill will commend itself to your Lordships. I beg to move.

LORD STRABOLGI
My Lords, as the noble Duke has said, this is an agreed measure as it reaches your Lordships' House. I understand that there was one loose end left over the question of 77 partially-disabled men, which has been the subject of negotiation since the Bill passed through its last stage in another place, between honourable friends of mine representing the mining industry and my honourable friend Mr. Peake, the Under-Secretary for the Home Office. I understand that it is desirable that the matter should be a little further explained on the Committee stage, and that the Department will be prepared to authorise the noble Duke to make the necessary representations about it.

§ THE DUKE OF DEVONSHIRE
That is so.

§ LORD LUKE
My Lords, the object of this Bill is to provide a remedy for a hardship of long standing: the inadequacy of the allowances to injured workmen. It is a pity that it does not deal also with the hospital question, for this is of great importance not only to the injured workman but also to the finance of the workmen's compensation system as a whole. Here also there is a hardship of long standing, in that the hospitals which provide the treatment, at a cost estimated at £400,000 per annum, get little; or no payment for so doing. They do not wish to make direct claims on workmen who have suffered accidents and financial loss. In the old days the voluntary hospitals treated injured workmen without thought of payment, just like any other class of patients who could not afford to pay and for whom no third party had any direct financial responsibility. But with the introduction of workmen's compensation the position was altered; for this meant that the principle was recognised that industry had a financial responsibility for accidents and should bear at least part of the cost. The appointment of the Royal Commission was evidence that the time had come for a further extension, and an extension is actually made by the present Bill. And the greater the responsibility of industry for its accidents, the greater the benefit which it derives from the hospital treatment for the injured.
For nearly twenty years, in fact ever since the time of Lord Cave's Committee in 1921, it has been a recognised principle of voluntary hospital finance that, where there is any such direct financial responsibility for patients and any such direct 78 financial benefit from their treatment, the hospital should receive payment for the service which it renders. This principle has received statutory recognition in the payments made by health authorities for tuberculosis, maternity and various other classes of patient, and also in the clauses of the Road Traffic Acts which provide payment for the treatment of patients injured in motor accidents.
I understand that there are two reasons why it is suggested that this question cannot be dealt with by any Amendment to the present Bill. The first reason is that the scope of the Bill is limited to the increase of the direct benefit to injured workmen. The other reason is that all questions not dealt with in the Bill are under the consideration of the Royal Commission and must await the report of the Commission, to which the hospitals have already submitted their case in evidence given by the King Edward's Hospital Fund for London and the British Hospitals Association. But it will probably be a long time before the Commission presents its report. In the meantime the treatment of the injured workmen has still to be carried on at the expense of the voluntary funds, which are so urgently needed for the service of the ordinary patients, the sick poor. I trust, therefore, that even though the question does not come within the scope of the Bill, I may be allowed to express the hope that this claim of the hospitals for payment out of workmen's compensation funds will be generally felt to be justified, and that on some occasion in the not too distant future a method may be found by which this hardship also may be remedied.