Lords Sitting of 10 May 1948

Preamble
The House met at four of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers.

CHAIRMAN OF COMMITTEES.
THE LORD PRIVY SEAL (VISCOUNT ADDISON): My Lords, I beg to move that the Earl Fortescue be appointed to take the Chair in the Committees of the Whole House this day, in the absence of the Chairman of Committees.
Moved, That the Earl Fortescue be appointed to take the Chair in the Committees of the Whole House this day, in the absence of the Chairman of Committees—(Viscount Addison.)
On Question, Motion agreed to.

SUPERANNUATION (MISCELLANEOUS PROVISIONS) BILL.
4.5 p.m.
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee.—(Lord Pakenham.)
On Question, Motion agreed to.
House in Committee accordingly.
[The EARL FORTESCUE in the Chair.]
Clause 1 agreed to.
Clause 2:
Pensions of persons transferring to different employment.
(2) The classes of employment referred to in subsection (1) of this section are the following, that is to say—

(a) employment as a civil servant; and

(b) employment as a member of the metropolitan police staff; and

(c) employment by virtue of which the person employed is or is deemed to be a contributory employee or local Act contributor within the meaning of the Local Government Superannuation Act, 1937, or the Local Government Superannuation (Scotland) Act, 1937; and

LORD PAKENHAM LORD PAKENHAM moved, in sub-section (2) (c), after "be" to insert:
"or, but for any rules made under this section, would be or be deemed to be."
The noble Lord said: This is primarily a qualifying Amendment. It might almost be called a drafting Amendment on a large scale. The purposes for which the powers in this clause are needed are to enable nurses entering the employment of local health authorities from district nursing associations when the Health Service comes into being, to remain on the federated superannuation scheme for nurses, if they wish, rather than to enter the statutory local government superannuation scheme; but of course, at the same time, to have the employer's contribution paid by the local authority or other employers under the new Health Services Act. A precisely similar arrangement is provided for in the regulations dealing with the hospital service. The clause as it stands at present, without the Amendment, can apply only to local authority employees who are contributory employees within the meaning of the Local Government Superannuation Act; it cannot apply to those nurses if they are never to come under that Act. The additional words provided for in the Amendment bring them in and, therefore, enable the purpose of the clause to be carried out. I beg to move.
Amendment moved—
Page 4, line 22, after (" be ") insert the said words.—(Lord Pakenham.)
LORD TWEEDSMUIR: The noble Lord's explanation has done something to pierce the gloom which surrounded the words of this clause, and the arguments he has advanced in regard to the Amendment appear to be eminently reasonable. I shall certainly make no demur, and we accept the Amendment.
On Question, Amendment agreed to.
Clause 2, as amended, agreed to.
Clause 3:
Former employees of Approved Societies, etc., becoming civil servants.
3.—(1) Rules to be made by the Minister of National Insurance with the consent of the Treasury may make provision with respect to the pensions payable to and in respect of persons who have been employed full time—

(a) by an Approved Society; or

(b) by some other body (including a body of which the Society is a branch or section) administering the affairs of an Approved Society; or

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(c) by a body administering a special scheme under Section seventy-three of the Unemployment Insurance Act, 1935,

and, whether before or after the passing of this Act but before such date as may be specified in the rules, become civil servants.
(3) Where the persons having pension rights under any pension scheme or interested in any pension fund include both such persons as are mentioned in subsection (1) of this section and other persons in respect of whom the following conditions are fulfilled, that is to say—

(a) that they have been employed full time by any such society or body as is mentioned in subsection (1) of this section; and

(b) that they have lost that employment; and

(c) that the loss of employment is directly attributable to the passing of the National Insurance Act, 1946, or the making of any regulations thereunder,

the rules to be made under this section may apply in relation to pensions payable to and in respect of those other persons as if they were persons such as are mentioned in the said subsection (1), and may provide for payments out of moneys provided by Parliament in respect of the pension rights of those other persons, so, however, that nothing in this subsection shall be construed as requiring identical provision to be made in relation to persons who fall, and persons who do not fall, within the said subsection (1).
LORD TWEEDSMUIR LORD TWEEDSMUIR moved, in subsection (1) (b), to omit "or" and insert:
"not being persons who were so employed wholly or mainly on business other than health insurance business; or."
The noble Lord said: This is a very straightforward Amendment. The general purpose of Clause 3 of this Bill is to safeguard the various pension rights of persons who are engaged in approved society work and who take up work with the Ministry of National Insurance. Wide powers are given to the Minister to enable him to make rules in respect not only of persons employed by approved societies, but also others who are employed full-time by bodies administering the affairs of an approved society; whether such persons are employed full-time, part-time, or not at all on approved society work. Certain of the staff of industrial insurance societies have been engaged for part of their time on work in connection with contribution cards and benefit payments of certain approved societies. The proportion of their time spent on this work has been slight. Their
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remuneration is excluded from the definition of "pensionable remuneration" for the purposes of staff pension schemes. It is, therefore, appropriate that any employee in industrial societies' offices engaged partly or not at all in approved society work, and who voluntarily transfers his service to the Ministry of National Insurance, should be excluded from the scope of this clause. This Amendment is drawn in exactly the same terms as the wording of the National Insurance Act, 1946, Section 67, subsection (1) (a), and those concerned would like an assurance that there is no intention to make any rule requiring the transfer to the Ministry of pension fund monies in respect of employees who are not wholly or mainly engaged on Health Insurance business. It is that simple assurance for which we are asking to-day and, as a substantial number of people are concerned, I hope the Amendment will be accepted. I beg to move.
Amendment moved—
Page 6, line 46, leave out ("or") and insert the said new words.—(Lord Tweedsmuir.)
LORD PAKENHAM: I have a great deal of sympathy with what the noble Lord has just said, and I can give him an assurance that it is in fact the Government's intention generally to limit the application of the clause to employees of approved societies and similar bodies who are wholly or mainly engaged on National Health Insurance work. He may ask: "Why then cannot it be placed in the Bill?" The reason is that the Approved Society Staffing Advisory Committee, which comprises an equal number of approved society and trade union representatives, recommended to the Minister of National Insurance that, although they agree with the general point that has just been made by the noble Lord, there would be certain hard marginal cases, indistinguishable from the bulk though not, perhaps, conforming exactly to a strict interpretation of the term "wholly or mainly," which ought to be included. I can, I repeat, give the noble Lord an assurance that the general intention is to be as he wishes, but it might be hard on certain marginal people if we attempted to put it in legal form in the Bill.
LORD TWEEDSMUIR: I am grateful to the noble Lord for his reply. It is sometimes said that hard cases make bad.

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law, but I understand that the potential number of hard cases is substantial. In view of the assurance he has given, I am prepared to withdraw my Amendment.
Amendment, by leave, withdrawn.
LORD TWEEDSMUIR LORD TWEEDSMUIR moved, in subsection (3), immediately before the words "and may provide" to insert:
"and such rules may include provisions if such persons enter other pensionable employment for the payment if they so desire of their transfer value to their new employer or otherwise as the Minister may in their interest think proper."
The noble Lord said: There is no clause in this Bill similar to Section 54, subsection 2, of the Electricity Act, which provides that employees shall not be placed in any worse position by means of any amendment, repeal or revocation of existing pension rights. This matter was earnestly argued in another place. It was brought up on Second Reading and the noble Lord, Lord Pakenham, then thought he could see his way to give me a modified assurance. If it is the intention—and it is hard to see that it will not be the result—of the present wording of the Bill to freeze employees' existing rights and pay a deferred pension at the superannuation age, fixed by the approved societies superannuation fund rules, I suggest it is an injustice to such an employee, in addition to losing his pension in the approved society and all chance of future increases in earnings, to have his pension frozen at his existing salary at July 3 of this year. I hope the noble Lord will see his way to meet me at least part of the way.
Amendment moved—
Page 7, line 39, at end insert the said words.—(Lord Tweedsmuir.)
LORD PAKENHAM: Before replying to the noble Lord I would like to say that he was so generously swift in withdrawing the last Amendment that I did not rise fast enough to inform him that in fact there will be very few of the deserving cases that we were then discussing. I mention that only because, although I do not think it was any part of his argument, I thought he was under the misapprehension that there would be a great number of cases. Perhaps he will agree that the argument we pursued just now is not affected by what I am saying.
Coming now to this Amendment, I am advised that there is already power in the
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clause as now drawn for rules to be made containing the provisions outlined in the noble Lord's Amendment. I will go part of the way (and I hope he will feel it is sufficiently far) by giving him the assurance that the Minister will refer this master to the Approved Societies. Advisory Committee, which was set up, as your Lordships know, to advise him on superannuation and other matters relative to the displacement of approved society staffs. Further, I can promise that the Minister will give careful consideration to the matter before making rules under his clause. This will not be going all the way, but I hope the noble Lord will feel that it is far enough to enable him to withdraw his Amendment.
LORD TWEEDSMUIR: The noble Lord has not been very accommodating, if I may say so. The assurance which I wished to receive, notwithstanding the tact that there is nothing in the Bill covering it, is that this point regarding transfers will be covered in the rules. The noble Lord has given me some ray of comfort by saying that these decisions will be referred to that Committee which is, I know, a very representative body containing, I believe, fourteen members representing the approved societies and fourteen representing the trade unions. In view of the moderate assurance which the noble Lord has given, I suppose that we must be content merely to take what we are given. Accordingly, I am prepared to withdraw this Amendment.
Amendment, by leave, withdrawn.
Clause 3 agreed to.
Clauses. 4 and 5 agreed to.
Clause 6 [Special provisions as to local government superannuation schemes during periods of emergency]:
LORD PAKENHAM: This Amendment is again what I would call a large-scale drafting Amendment. It repairs an obvious omission in subsection (5) of this clause. The clause safeguards the superannuation rights of local authority employees who are dismissed because of cuts in expenditure at the present time, and subsection (5) enables such a person to count his period out of local government service in the reckoning of the qualifying period for eligibility for benefits when he returns to local government service. The whole clause is, however, drawn up in relation to the specific period of absence

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from the service—the period mentioned is five years, or longer if the Minister of Health agrees in a particular case. This Amendment seeks simply to incorporate in the clause a reference to that period. I hope that the Committee will see fit to agree to it.
Amendment moved—
Page 12, line 30, after (" has ") insert (" before the expiration of the relevant period under subsection (3) of this Section.")—(Lord Pakenham.)
LORD TWEEDSMUIR: We have no objection to this Amendment which the noble Lord has explained with such clarity. I think it tidies up something that ought to be tidied up.
On Question, Amendment agreed to.
Clause 6, as amended, agreed to.
Clauses 7 to 9 agreed to.
Clause 10 [Amendment of Teachers (Superannuation) Act, 1945, s. 3]:
LORD PAKENHAM: This is a drafting Amendment. I beg to move.
Amendment moved—
Page 17, line 7, leave out (" of Education.")—(Lord Pakenham.)
On Question, Amendment agreed to.
LORD PAKENHAM: This, too, is a drafting Amendment. I beg to move.
Amendment moved—
Page 17, line 10, leave out (" of Education.")—(Lord Pakenham.)
On Question, Amendment agreed to.
Clause 10, as amended, agreed to.
Remaining clauses agreed to.
Schedule [Part III—Amendments of the Education (Scotland) (War Service Superannuation) Act, 1939]:
LORD PAKENHAM LORD PAKENHAM moved to add to Part III:
"3. Where a person who is in war service immediately before the end of the period of the present emergency continues in the same service after the end thereof in pursuance of a legal obligation so to do arising by reason of his voluntary continuance of his service without the consent of the education authority, governing body or other body of managers by whom he was employed immediately before undertaking war service, nothing in the definition of ' period of war service ' in Section seven of the Act shall be construed as enabling so much of the said service continued as aforesaid as falls after
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the end of the period of the present emergency to be treated as part of his period of war service."
The noble Lord said: In the absence of the noble Lord, Lord Morrison, I beg to move this Amendment which stands in his name. It simply applies to Scotland the same plan as the Bill elsewhere provides for England.
The position of teachers who remain in the Forces after the end of the emergency is not fully covered by the Education (Scotland) (War Service Superannuation) Act, 1939. Some of the teachers who remain in the Forces will be there with the consent of their former employers, or because of a legal obligation into which they were compelled to enter. Paragraph 2 of Part III of the Schedule provides that the whole of their service in the Forces under such conditions is to continue to be treated as war service, even after the end of the emergency. Others will be there because of a legal obligation into which they entered voluntarily, and without the consent of their former employers. It would be possible for them to take advantage of a provision in the Act which enables two extra years to be reckoned as war service in order to cover periods during which they were prevented or hindered, as a result of war service, from obtaining employment as teachers. This concession, of course, was intended to cover periods of injury, illness or unemployment, and not periods of voluntary service in the Forces. The new paragraph 3 proposed in the Amendment will stop up this loophole by applying the same rule to Scotland as it is proposed to apply to England. I beg to move.
Amendment moved—
Page 25, line 41, at end, insert the said new paragraph.—(Lord Pakenham.)
LORD TWEEDSMUIR: I did not much care for the noble Lord's choice of words when he said this provision "simply applies to Scotland." However, this Bill is mainly designed for the removal of anomalies, and I think this is one more anomaly which is rightly to be removed.
On Question, Amendment agreed to.
Schedule, as amended, agreed to.
House resumed.
Then, Standing Order No. XXXIX having been suspended (pursuant to

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Resolution of May 6), Amendments reported: Bill read 3ª, with the Amendments, and passed, and returned to the Commons.

COTTON SPINNING (RE-EQUIPMENT SUBSIDY) BILL.
House in Committee (according to Order): Bill reported without amendment.
Then, Standing Order No. XXXIX having been suspended (pursuant to Resolution of May 6), Bill read 3ª, and passed.

ANIMALS BILL.
4.20 p.m.
Order of the Day for the Second Reading read.
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE AND FISHERIES (THE EARL OF HUNTINGDON): My Lords, this is a short Bill which should serve an extremely useful purpose. The first Part of the Bill (Clause 1) allows my right honourable friend, the Minister of Agriculture, to extend the period during which he may make payments to farmers for the purpose of getting rid of bovine tuberculosis from their herds. The authority to make these payments would expire at the end of September next. The Bill extends this authority for ten years and also provides for still further extension for three successive periods of five years each, should that be necessary, by order of the Minister made with the consent of the Treasury and confirmed by affirmative Resolutions in both Houses of Parliament.
Payments in the form of a bonus on milk from attested herds were first authorised by the Milk Act, 1934, for a period of four years. Section 20 of the Agriculture Act, 1937, extended the period during which payments might be made and also empowered the Minister to
"pay to the owner of any herd of cattle in Great Britain such sums as the Minister thinks fit to expend for the purposes of securing as far as practicable that the herd shall be free from tuberculosis."
This allowed payments to be made "on a head of cattle basis" to owners of beef herds and other herds from which little or no milk is sold. The object was to get rid of tuberculosis, one of the worst forms of wastage in agriculture, to increase the
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productivity of cattle, and to ensure a supply of pure milk. The purpose of these payments is different from that of the quality milk premiums originally payable under the Milk Marketing Scheme and now continued by the Minister of Food.
The period for making payments under Section 20 of the Act of 1937 was further extended until September 30, 1948, by the Agriculture (Miscellaneous War Provisions) (No. 2) Act, 1940. Unfortunately, war activities intervened. The attested herds scheme, which was rapidly expanding before the war, had to be closed to new entrants, except to those holding licences to produce T.T. milk and wishing to proceed to the attestation stage. Practically no farther progress was made until the middle of 1944, when again new entrants were accepted. This time no payments were offered. The reason was that, owing to the shortage of veterinary surgeons, it was thought in-wise to encourage too many people to come into the scheme all at once. However, in 1943 the quality premium for attested milk was increased from 2½d. to 4d. a gallon, and this has acted as an indirect incentive. In fact, there has been a steady and continuous flow of new entrants into the scheme. Since the middle of 1944, the number of attested herds in Great Britain has risen from 16,400 to 32,300, and attested herds row contain nearly 1,300,000 cattle, or more than one-seventh of the total cattle population of the country. Both Scotland and Wales are particularly to be congratulated on the progress they have made.
But that is not nearly enough. So far the object has been to get disease-free herds. Now we are thinking of disease-free areas. We have been in consultation with the National Farmers' Unions, with the breed societies and with the Milk Marketing Boards, and have been working out plans for both North and South of the Border. The advantage of freeing whole areas from bovine tuberculosis would be enormous. There would be a great saving in labour, materials and time. Attested herds, instead of having to be quarantined, could be allowed freedom of movement, and veterinary surgeons would be freed to work in other areas, which in turn would be brought into the general scheme. I might add that under the Agriculture Act of 1937

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any scheme, including the rate and duration of payments, will have to be laid before Parliament and will be subject to annulment by either House. Your Lordships will, therefore, have full opportunity for studying in detail any scheme which we propose. I feel sure that in this House it is unnecessary for me to argue the case for tuberculin-free milk. It is necessary not only to free the human population from the danger of one of the worst and most fatal of diseases, but also to improve and increase the amount of milk available for use. If we are to succeed in our great expansion programme it is essential that we should have the payments for this scheme, and power to enlarge the scheme when necessary.
Part II of the Bill, consisting of Clauses 2 to 14, extends the provisions of the Horse Breeding Act, 1918. Under that Act all stallions which are travelled or exhibited for service are required to be licensed. This Bill adds stallions which are kept at home and which may be used either for the service of the stallion owner's mares or of visiting mares. This measure was considered by the Ministry's Livestock Improvement Committee, a non-statutory advisory body, which includes genetical scientists and practical breeders. The horses sub-committee of this Committee went into this question very thoroughly and it was on their recommendations that this Part of the Bill was drafted. The object is to stop a wide gap in earlier legislation and to improve further the breeding of horses in this country. We should like to get rid of the scrub stallion, as we have got rid of the scrub bull and the scrub boar. We have certainly had great success in getting rid of inferior bulls and we hope that these plans will likewise raise the standard of horses. There are certain exceptions to the general purposes of this Bill. Thoroughbred stallions, prescribed breeds of ponies in certain districts, and stallions which will be four years or over before this Part of the Bill comes into operation, will be exempted.
As regards the thoroughbred horse, we found that the stringent conditions which are applied before a stallion can be entered in the General Stud Book should alone be ample to make a licence unnecessary. Apart from this, however, the progeny is constantly tested on the racecourse. We decided, therefore, that it
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would be unnecessary to license thoroughbred stallions, and we have excluded them from the Bill. Hill, forest, or moorland ponies are in the second category. Obviously their breeding cannot be controlled while they are in their natural state, and we have omitted them as a matter of course from the provisions of this Bill. Exemption of the third category, that is, stallions over four years of age when the Act comes into operation, is intended to avoid hardship to the owners of such stallions. This category will, of course, eventually disappear, and the problem will solve itself. There was a certain amount of debate in another place on this matter. Originally two years was proposed as the limit, but an Amendment was moved and accepted as a compromise between those who wished to see quick results under this Bill and those who were reluctant to penalise owners of stallions who had had them for a period of at least four years.
There are various other provisions about inspections, penalties, revocation of licences and other matters, but they are not points of substance which I need go into in detail. However, there is one other point which I should like to mention. It is that should a licence for a stallion be refused by the Minister the owner must get his stallion either slaughtered or castrated. If, however, there are exceptional circumstances (for instance, the stallion might be of a particular exotic breed; or it may be a stallion which for sentimental reasons the owner is anxious to keep) then the owner can apply to the Minister for a special permit. If granted, that permit will allow the owner to keep the stallion, but subject to certain conditions. The conditions might be, for instance, that the stallion shall not be allowed to breed at all, or it might not be allowed to breed except with a certain mare. It might be desired to perpetuate a particular breed, although the stallion was not really up to the normal standard which would be passed.
Any dispute as to the issue of a licence can, if necessary, be decided by a referee. The permit, however, is a completely different thing, and there would normally be no reason for an appeal on any particular matter. That would really be a matter of law—whether the owner had or had not complied with the conditions originally laid down by the Minister—which would have to be decided by the

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courts and not by an ordinary referee. The breed societies of England, Scotland and Wales, and the National Farmers' Unions, have been consulted and approve of this Part of the Bill.
One other point that has been raised is why we have brought these two subjects into a single Bill. I must admit that they are two completely different things. However, it was thought better to bring before your Lordships this short Bill dealing with these two different problems. As there has been general agreement on all sides as to the purpose of this measure, I hope your Lordships will give it a speedy Second Reading. I beg to move.
Moved, That the Bill be now read 2ª.—(The Earl of Huntingdon.)
4.38 p.m.
EARL DE LA WARR: My Lords, this is quite a small Bill, but I think your Lordships will agree that it is a useful one. We are grateful to the noble Earl for the way in which he has put it before us. I am sure we all welcome the fact that assistance to the owners of infected herds will be extended, for a minimum of ten years and, possibly, up to twenty-five years. I suppose one must take it that, in the view of the Minister, twenty-five years is approximately the period necessary for the establishment of complete freedom in this country. My only slight disappointment is that we have not by now had a full statement from the Government on their whole policy in regard to cleaning up the herds, and cleaning up the milk supply of this country. Your Lordships will remember that some time ago (I think it must be twelve or eighteen months) a Motion was put down, I think by the noble Lord, Lord Rothschild, on which we had a very important and interesting debate. At that time it was suggested that we should soon be hearing from the Government as to their comprehensive policy. I am sure I am speaking for all members of the House in asking the noble Earl whether, in his reply, he can tell us something as to when we shall hear more on that subject.
The only other point I would make—especially as progress has not be quite so rapid in cleaning up the herds as some of us would like—is that it would be useful if Parliament could have an annual
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progress report. Perhaps the noble Earl can give us some assurance on that point; otherwise it may be useful if we put down an Amendment for Committee stage. There is nothing to say with regard to Part II of the Bill. The noble Earl is quite right in saying that all the horse societies have been consulted, and I think everybody concerned is quite happy. As he has said, we have our scrub bull and scrub boar legislation, and the time is certainly ripe when we should deal with the scrub stallion. With those few words I venture to commend this small Bill to your Lordships.
4.40 p.m.
LORD HUTCHISON OF MONTROSE: My Lords, there is only one question I should like to ask the noble Earl in regard to this Bill. In Clause 13 (3) the expression "thoroughbred" is used. It is said:
" … 'thoroughbred' means a horse entered or eligible for entry in the General Stud Book."
Do I understand that you are going to adopt what the Jockey Club now lay down as the definition of a thoroughbred? Does that mean that "My Babu," who won The Two Thousand Guineas the other day, is not a thoroughbred? To say that a horse is not a thoroughbred merely because it is not down for entry in the Stud Book seems to me wrong. Perhaps the reconsideration of that might be desirable, with a view to carrying on the finest blood in the thoroughbred world, which we possess.
4.41 p.m.
THE EARL OF HUNTINGDON: My Lords, I am very glad that this small but important Bill has received such a friendly welcome. On Part I of the Bill the noble Earl, Lord De La Wan, suggested that perhaps twenty-five years was the period envisaged by the Minister. We hope that it will be very much sooner than that, but it was felt safer to have a longer period so that we should be amply covered if for some reason the scheme did not go forward so quickly as we hoped, Another question was about the areas, and whether we could say more about them. I am afraid that I cannot satisfy the noble Earl upon that point, We are in consultation with the interested parties and we are working out plans, but there are a good many problems to be solved. As soon as we have something definite the matter will

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be laid before Parliament, giving your Lordships an opportunity to debate it. Another point raised by the noble Earl concerned a report on general animal diseases. This report—which, unfortunately, was delayed during the war—is now in hand, and we hope to have it ready in a few weeks.
EARL DE LA WARR: That will be an annual report?
THE EARL OF HUNTINGDON: Yes. The last question was raised by the noble Lord, Lord Hutchison, with regard to thoroughbreds. This is an extremely interesting point. It has been accepted under the Bill as far as this: that a thoroughbred would be entered in the General Stud Book. There is, however, a lot in what the noble Lord says, and I shall be happy to consider the matter, between now and the next stage of the Bill, to see if there is anything we can do about it. One has, however, to draw a line somewhere, and up to date we have accepted the General Stud Book as being the best criterion. But I will consider the matter and bring it to the attention of my right honourable friend. I do not want to keep the House any longer. I hope that this highly commendable measure will be given a speedy passage by your Lordships' House.
On Question, Bill read 2ª, and committed to a Committee of the Whole House.

INDUSTRIAL ASSURANCE AND FRIENDLY SOCIETIES BILL.
4.44 p.m.
Order of the Day for the Second Reading read.
THE MINISTER OF CIVIL AVIATION (LORD NATHAN): My Lords, I beg to move that this Bill be now read a second time. It is in its nature a tidying up Bill: to tidy up the position resulting from the National Insurance scheme, to tidy up the Bill by making clear certain obscurities in law and practice, and tidying up so as to bring into being a number of desirable, if unspectacular, reforms in the way of administration. Before explaining what the Bill does, I propose to say a word or two about the proposal in the Beveridge Report that the business of industrial assurance should be converted
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into a public service under an Industrial Assurance Board.
This proposal, your Lordships will recall, was put in brackets in the Report as not being essential to the whole of the rest of the plan for social security. It was intentionally omitted from the various White Papers indicating the line which the then Government proposed to take on the Report, largely because it was felt that the work involved in bringing the plan for social security on to the Statute Book and into operation was of such formidable dimensions that it was undesirable to encumber it with anything not essential to the main scheme.
That is the view of the Government today. The question whether the whole of this business of industrial assurance should or should not be nationalised remains a question for consideration, and the Government are looking into it. For the time being, the Departments concerned will have enough on their hands, and we think the wiser course is to restrict the present Bill to those reforms of industrial assurance which are necessary to the proper working of the death grant in the National Assurance Act. The present Bill in no way prejudices the decision which the Government may in due course take on the bracketed proposal in the Beveridge Report.
Having said that, let me proceed to tell your Lordships the two main reasons why the introduction of a State death grant makes legislation necessary. The first reason relates to policies on the life of another. As is generally known, in ordinary life insurance a person is not normally regarded as having an insurable interest in the life of anyone but himself and his spouse. But in industrial assurance, which means life insurance on which premiums are payable at intervals of less than two months (in practice, generally weekly) and are received by collectors, it is lawful to insure money to be paid for the funeral expenses of a parent, child, grandparent, grandchild, brother or sister. The industrial assurance offices have construed this power as enabling them to insure the lives mentioned for an amount that would be reasonable for funeral expenses, and to pay that amount to the policy owner on proof of the death of the person assured, without inquiring whether the policy owner has met or will have to meet the funeral expenses. There are weighty grounds for

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doubt whether the offices, in so proceeding, are not exceeding their powers.
The matter has never been tested in the courts, and I certainly would not suggest that it would be profitable to-day to go into the legal arguments on which this doubt is based, or into the reasons for which successive Industrial Assurance Commissioners have refrained from putting the matter to the test of prosecution. Suffice it to say that the doubt exists, and has never been resolved. What is important to-day is that, if the legality of the practice of the offices is already open to doubt, it will become still more so when a death grant has been provided as one of the benefits of the National Insurance scheme. It is not satisfactory that a large volume of business should be conducted on an uncertain legal foundation, and the Government have decided that the time has come when the position must be cleared up.
The second reason for legislation is to maintain the limits on the sums payable on the deaths of children under the age of ten. For reasons that will be obvious, the law limits the sum that may be insured to be paid on the death of a child under the age of ten, whether the insurance is taken out in the child's name or in that of the parent. The limits are £6 for a child dying under the age of three, £10 for a child dying under the age of six, and £15 for a child dying under the age of ten. From July 5, 1949, death grant up to these amounts will be payable under the National Insurance Act, subject to contribution conditions, on the deaths of children born on or after July 5, 1948. Consequently there will no longer be room for voluntary insurance in these cases. That is the main purpose of the Bill—to deal with the matters to which I have just referred.
Let me draw your Lordships' attention to some of the operative clauses of the Bill. To begin with, Clause 1 of the Bill terminates all the existing powers of industrial assurance offices and friendly societies to insure money for funeral expenses. Clause 1 having wiped the slate clean, we now consider what powers, if any, ought to be given to insure the life of another; what relatives should be insurable and for how much. The Government think that as only one death grant will be payable on any death, and as more than one person may have to incur
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expenses in connection with a death (not only mourning clothes, now rather going out of fashion, but also travelling expenses, and loss of remunerative time) it is reasonable that limited voluntary insurance should continue to be permissible. It would be logical to restrict these insurances to the contingency of the policy owner surviving the life assured.
When a policy survives its owner, premiums on the policy may continue to be paid by someone who is not entitled to the benefits assured. When that happens, and it is found, on the policy maturing, that the person entitled to the benefit is not the person who has been paying the premiums, a troublesome dispute may arise. It is not practicable to avoid this trouble by a legal requirement as to the terms of policies, but we propose to get rid of most of it by restricting life-of-another insurances (apart of course from those on husband or wife) to relationships in which the life assured belongs to an older generation than the proposer of the assurance—that is, to parents, stepparents and grandparents. This would mean cutting out assurances in life-of-another form on the lives of children, and those on brother or sister. We think we can do this because we have, in any case, to stop assurances on children under which payments are due on death under age ten. Other assurances on children can be taken out in own-life form—that is, in the name of the child itself—and We do not think that any serious inconvenience need result from stopping assurances on children's lives in life-of-another form.
Accordingly, we propose that insurance on the life of another should be confined (again apart, of course, from husband and wife) to insurances on the lives of parents, step-parents or grandparents. We propose to limit the amount of such insurance to a modest sum. The amount originally proposed was £15, but this was raised to £20 during the Committee stage in another place. This amount is to be exclusive of bonuses other than guaranteed bonuses. We also propose that, as the purpose of allowing these policies is to enable the policy owner to meet his personal expenses in connection with the death or funeral of the life assured, rights under these policies shall not be assignable. There is to be one exception to this. A policy owner who is in financial difficulty may get someone else

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to pay his premiums for him; if so, he can assign the policy to the extent of the premiums so paid. That will be the limit of assignability. One of the powers to be terminated by Clause 1 is the power of a registered friendly society to insure a member's husband or wife for funeral expenses. Clause 3 substitutes for this a power to insure the husband or wife of a member without limit other than that applying generally to insurances by friendly societies. The reason for treating this form of insurance thus is that in ordinary life insurance husbands and wives are regarded as having an unlimited insurable interest in each other's lives.
With Clause 5 we come to the first of the changes not connected with the introduction of death grants under the National Insurance scheme. The Government have been asked to raise the limits on the amounts for which friendly societies may insure. Those limits are now £300 on the gross sum and £52 on the annuity. They date from 1908, and it seemed to the Government that there was a good case for increasing them, so Clause 5 raises them to £500 and £104 respectively. A friendly society which is debarred, either by Statute or its own rules, from insurances of more than £300 is exempt from income tax. Clause 5 does not increase the limit of tax exemption, because that limit can be increased only by a Finance Bill. The Finance Bill includes provision to raise the exemption to £500 and the operation of Clause 5 is to be delayed until the increased exemption limit comes into operation. Clause 6 deals with insurances on children's lives. Under Clause 1 it will cease to be lawful to insure one's child's life in life-of-another form, but it remains to deal with insurances taken out in own-life form. Clause 6 provides that nothing except a return of premiums can lawfully be paid on the death before age ten on or after July 5, 1949, of a child born on or after July 5, 1948. These dates are so arranged that the new provisions will dovetail in with those of the death grant.
I have drawn your Lordships' attention to the more important provisions of this Bill. The rest of the measure is concerned with administrative and consequential matters. Naturally I am at your Lordships' disposal to go right
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through the clauses if you so desire. I hope, however, that I have said sufficient to indicate the main purposes of the Bill, and it only remains for me to commend the Bill for a Second Reading in your Lordships' House. I beg to move.
Moved, that the Bill be now read 2ª.—(Lord Nathan.)
4.57 p.m.
LORD LLEWELLIN: My Lords, as the noble Lord has told us, this is in the nature of a tidying-up Bill. At the time of the passing of the National Insurance Act everybody must have contemplated that some measure of this kind dealing with death grants would certainly be necessary. The noble Lord has told us that the Bill in no way prejudges any decision at which the Government may have arrived in regard to making this form of insurance, which is still allowed, a business to be taken on by the State. I hope that at any rate these additional death grants, and other things of the sort, will be left to other bodies, because a State scheme, such as the one we have hitherto known, always seems to me to apply matters universally. Speaking solely for myself, I may say that I am content not to pay more than the 6s. 2d. which I am told that as a self-employed person I shall have to pay after July 5; and I certainly do not want to have to insure other people in addition for any grants supplementary to the £20 funeral expenses. A funeral may well cost more than £20, for all I know, but, for my own part, I should be quite content with a funeral costing only £20! One of the unnecessary things on which money is often spent in this country is a too-expensive funeral.
I do not think the Bill will meet with any opposition in this House. It modernises the position of the friendly societies, and, at the same time, I am glad to say, maintains it. Many attacks have been made upon some of the bodies who effect this kind of insurance, largely as a result of a number of lapsed premiums and matters of that kind, for which I do not think the societies themselves have been responsible. However, we must realise that the whole of this system, which has been one of mutual assistance to people of small means since it was started in this country, has been of great advantage to a large section of the community. It has been followed with

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equal success in a number of the Dominions. We should all feel happy that this country was the founder of those schemes of mutual assistance and that they have been developed well elsewhere. The great point about this Bill, if I may say so, is that it is entirely a non-Party measure. Its provisions, which I have followed during their progress through another place, have been worked on by all Parties together, and it is one of those Bills which I think we may say (as much more frequently we can say about Bills after they leave this House) have been much improved during their passage through another place. Looking at it from another point of view, I know that a large number of the provisions of the Bill have been mutually agreed between the societies concerned and those working in the appropriate Ministry. Therefore, there is little to be said about this measure.
However, I notice that there is one point that was left open in the discussions in another place. The difficulty lay in finding words to meet a situation of this sort, to take an example. Two brothers, A and B, take out one of these insurances on the life of their father and then one of these brothers, say A, predeceases the father. The question then is whether the other brother B—and everybody is agreed that it is right that this should be allowed—can take on the policy entered into by brother A, who has died. An undertaking was given by the Government—and everybody was agreed that that would be a proper thing to do—that words should be found to meet that kind of situation. In the course of discussion on another stage of this Bill, I hope that we may hear that those words have been agreed upon and are to be put before your Lordships for insertion into the Bill.
There is only one other point on which I would like to say a few words. By the terms of this Bill, in order to be in line with their cheap money policy, the Treasury are insisting that the friendly societies and other insurance bodies concerned in this particular matter shall no longer be able to borrow at 2¾ per cent. on call, which was their old right.
LORD NATHAN: They will not be able to lend.
LORD LLEWELLIN: … to borrow from the Treasury, as I understand it—from the Debt Commissioners, if that is
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the right phrase. Under one of the later clauses of this Bill, which the noble Lord referred to as "machinery," they an no longer able to do that. All I would point out is that this provision is rather more than machinery, because it means: hat they lend to the Government and get 2¾ per cent. for the lending. The noble Lord is quite right. It means that they will obtain a less interest. Let us realise what may be the effect of this upon a large number of people who will want to lake out this sort of insurance. In view of the large sums involved in insurance—although they are very small sums, compared with the size of the National Debt—and in consequence of this provision, the insurance bodies will probably have to charge larger premiums for the insurance that they give. So long as we all realise that the Government are bringing about that situation by their insistence on this scheme, well and good; but that may well be the result. All I am commenting upon and passing on to the noble Lord is that it seems to me to be rather euphemistic to describe this matter as merely a machinery clause.
However, we give a general welcome to this measure. So far as your Lord-ships are concerned I am sure that the Bill will meet with no opposition in its passage through this House. I look forward to seeing whether the noble Lord will be able at a later stage to put before your Lordships' House the words watch were promised in another place.
LORD MARLEY: My Lords, I should like to ask my noble friend one question. I understood that there was some question of annuities. I wondered whether these annuities are in line with the annuities issued by the Post Office under the Post Office Savings Scheme. I understand that there is a maximum of these annuities and that they are fixed on the average price of Consols. I am not, of course, expecting an answer to my question now; I need hardly say that. However, in the further course of the Bill, it would be interesting to know whether these annuities have been brought into line in any way and whether in the future, instead of there being a competitive basis, there will be a similar basis for subscription and for a maximum.
On Question, Bill read 2ª and committed to a Committee of the Whole House.

ASCOT RACE COURSE BILL.
LONDON COUNTY COUNCIL (GENERAL POWERS) BILL.
Brought from the Commons; read 1ª; and referred to the Examiners.

MERTHYR TYDFIL CORPORATION BILL.
ROCHDALE CORPORATION BILL.
Committed: the Committees to be proposed by the Committee of Selection.

SUNDAY ENTERTAINMENTS ACT 1932.
Order made by the Secretary of State for the Home Department extending Section 1 of the Act to the
Rural District of Ely:
Land before the House (pursuant to Act) for affirmative Resolution, and ordered to lie on the Table.
House adjourned at eight minutes past five o'clock.