HC Deb 04 May 1911 vol 25 cc609-77
The CHANCELLOR of the EXCHEQUER (Mr. Lloyd George)

I ask leave to introduce a Bill "To provide for insurance against loss of health, and for the prevention and cure of sickness, and for insurance against unemployment, and for purposes incidental thereto."

In moving for leave to bring in the Bill of which I have given notice, I must thank the House for the great indulgence it has extended to me during the past two or three months. I am afraid I must plead for a little further indulgence during the time I am endeavouring to explain the provisions of this Bill. I shall do my best to make myself heard in all parts of the House, but I am sure I shall not appeal in vain to the kindness of my friends. I think it must be a relief to the Members of the House of Commons to turn from controversial questions for a moment to a question which, at any rate, has never been the subject of controversy between the parties in the State. I believe there is a general agreement as to the evil which has to be remedied. There is a general agreement as to its urgency, and I think I can go beyond that and say there is a general agreement as to the main proposals upon which the remedy ought to be based. In this country, as my right hon. Friend the President of the Local Government Board (Mr. Burns) said in his speech last week, 30 per cent. of the pauperism is attributable to sickness. A considerable percentage would probably have to be added to that for unemployment. The administration of the Old Age Pensions Act has revealed the fact there is a mass of poverty and destitution in this country which is too proud to wear the badge of pauperism, and which declines to pin that badge to its children. They would rather suffer from deprivation than do so. I am perfectly certain if this is the fact with regard to persons of seventy years of age, there must be a multitude of people of that kind before they reach that age.

The efforts made by the working classes to insure against the troubles of life indicate they are fully alive to the need of some provision being made. There are three contingencies against which they insure—death, sickness, and unemployment. Taking them in the order of urgency which the working classes attach to them, death would come first. There are 42,000,000 industrial policies of insurance against death issued in this country of small amounts where the payments are either weekly, monthly, or occasionally quarterly. The friendly societies, without exception, have funeral benefits, and that accounts for about 6,000,000. The collecting societies are about 7,000,000, and those are also death benefits. Then the great industrial insurance companies have something like 30,000,000 policies. There is hardly a household in this country where there is not a policy of insurance against death. I will not stop to account for it. After all, the oldest friendly societies in the world are burial societies. All that I would say here is we do not propose to deal with insurance against death. It is no part of our scheme at all, partly because the ground has been very thoroughly covered, although not very satisfactorily covered, and also because this, at any rate, is the easiest part of the problem and is a part of the problem which is not beset with the difficulties of vested interests. Fortunately, all the vested interests which deal with sickness and unemployment are of a thoroughly unselfish and beneficent character, and we shall be able, I think, to assist them, not merely without interfering with their rights and privileges, but by encouraging them to do the excellent work they have commenced and which they are doing so well.

Sickness comes in the next order of urgency in the working-class mind. -There are over 6,000,000 policies—that is hardly the word, perhaps, for friendly societies—but there is provision made by 6,000,000 people against sickness. Most of it includes a provision for medical aid. There are, I think, about 300,000 or 400,000 members who have insured for medical aid alone, but I think, almost without except ion, the friendly societies include medical relief in the provision which they make. That is not, I think, the case with the trade unions. There are 700,000 members in the trade unions insured for sick benefits, but I do not think that includes medical relief. In addition to those, there are a good many unregistered assurances at works, where a man leaves a shilling a month at the office for the purpose of paying the works' doctor. I should say, therefore, that between 6,000,000 and 7,000,000 people in this country have made some provision against sickness, not all of it adequate, and a good deal of it defective. Then comes the third class, the insurance against unemployment. Here not a tenth of the working classes have made any provision at all. You have only got 1,400,000 workmen who have insured against unemployment. It is true that perhaps about half of the employment of this country is not affected by the fluctuations of trade. I do not think agricultural laoburers or railway servants are affected quite to the same extent. Then there is provision for short time in some of the trades. Taking the precarious trades affected by unemployment, I do not believe more than one-third or one-quarter of the people engaged in them are insured against unemployment. That is the provision which is made at the present moment by the working-classes: 42,000,000 policies against death, about 6,100,000 who have made some kind of provision against sickness, and 1,400,000 who have made some provision against unemployment.

4.0 P.M.

Now comes the question, which leads up to the decision of the Government to take action. What is the explanation that only a portion of the working-classes have made provision against sickness and against unemployment? Is it they consider it not, necessary? Quite the reverse, as I shall prove by figures. In fact, those who stand most in need of it make up the bulk of the uninsured. Why? Because very few can afford to pay the premiums, and pay them continuously, which enable a man to provide against those three contingencies. As a matter of fact, you could not provide against all those three contingencies anything which would be worth a workman's while, without paying at any rate 1s. 6d. or 2s. per week at the very lowest. There are a multitude of the working classes who cannot spare that, and ought not to he asked to spare it, because it involves the deprivation of children of the necessaries of life. Therefore they are compelled to elect, and the vast majority Choose to insure against death alone. Those who can afford to take up two policies insure against death and sickness, and those who can afford to take up all three insure against death, sickness and unemployment, but only in that order. What are the explanations why they do not insure against all three? The first is that their wages are too low. I am talking now about the uninsured portion. Their wages are too low to enable them to insure against all three without some assistance: The second difficulty, and it is the greatest of all, is that during a period of sickness or unemployment, when they are `earning nothing, they cannot keep up the premiums. They may be able to do it for a fortnight or three weeks, but when times of very bad trade come, when a man is out of work for weeks and weeks at a time, arrears run up with the friendly societies, and when the man gets work, it may be at the end of two or three months, those are not the first arrears which have to be met. There are arrears of rent, arrears of the grocery bill, and arrears for the necessaries of life. At any rate he cannot consider his friendly society only. The result is that a very considerable number of workmen find themselves quite unable to keep up the premiums when they have a family to look after.

Undoubtedly there is another reason. It is no use shirking the fact that a proportion of workmen with good wages spend them in other ways, and therefore have nothing to spare with which to pay premiums to friendly societies. It has come to my notice, in many of these cases, that the women of the family make most heroic efforts to keep up the premiums to the friendly societies, and the officers of friendly societies, whom I have seen, have amazed me by telling the proportion of premiums of this kind paid by women out of the very wretched allowance given them to keep the household together. I think it is well we should look all the facts in the face before we come to consider the remedy. What does it mean in the way of lapses? I have inquired of friendly Societies, and, as near as I can get at it, there are 250,000 lapses in a year. That is a very considerable proportion of the 6,000,000 policies. The expectation of life at twenty is, I think, a little over forty years, and it means that in twenty years' time there are 5,000,000 lapses: that is, people who supported and joined friendly societies, and who have gone on paying the premiums for weeks, months, and even years, struggling along, at last, when a very bad time of unemployment comes, drop out and the premium lapses. It runs to millions in the course of a generation. What does that mean? It means that the vast majority of the working men of this country at one time or other have been members of friendly societies, have felt the need for provision of this kind, and it is only because they have been driven, sometimes by their own habits, but in the majority of cases by circumstances over which they have no control—to abandon their policies. That is the reason why, at the present moment, not one half of the workmen of this country have made any provision for sickness, and not one-tenth for unemployment. I think it necessary to state these facts in order to show that there is a real need for some system which would aid the workmen over these difficulties. I do not think there is any better method, or one more practicable at the present moment, than a system of national insurance which would invoke the aid of the State and the aid of the employer to enable the workman to get, over all these difficulties and make provision for himself for sickness, and, as far as the most precarious trades are concerned, against unemployment.

I come at once to the plan of the Government. The measure of the Government will be divided into two parts. The first will deal with sickness, and the second with unemployment. The sickness branch of the Bill will also be in two sections; one will be compulsory and the other voluntary. The compulsory part of the Bill involves a compulsory deduction from the wages of all the employed classes who earn weekly wages, or whose earnings are under the Income Tax limit. There will be a contribution from the employer and a further contribution from the State. There are exceptions from the compulsory clause. The first will he in the Army and Navy. We are making special provision for soldiers and sailors. It, is a crying scandal, I think, that at the present moment there are so many soldiers and sailors who have placed their lives at the disposal of the country, and are quite ready to sacrifice them, as we know from past experience, not merely that they should he liable to but, that as a matter of fact, hundreds and thousands do actually leave the Army and the Navy broken through ill-health. I am talking now of ill-health not due to misconduct. These men leave the Army without any provision from either public or private charity, and they are broken men for the rest of their lives. I think it is a crying scandal that that should occur in a country like this, and I hope that this scheme will put an end to it. There will be special provision made for that. But these men will not be regarded as in the employed class for the purposes I am about to explain. The same thing applies to the teachers, and I hope to be able, with the assistance of my right hon. Friend the President of the Board of Education, to largely strengthen their present position. I think their provision is very inadequate, and, compared with the provision made in other countries, I think a very paltry allowance is made for their superannuation.


Does that apply to Ireland?


Certainly, I think the Irish case is a very bad case. I have had a number of Irish teachers before me, and some of them told me that they were getting about £1 a week. There are about 300 of them in the workhouses. They are doing their work for the Empire under very trying conditions, and I shall certainly consider it the duty of the Government, in any scheme of superannuation, to include the Irish teachers as well.




I hope it will be possible this year. We propose excepting all people employed under the Crown or under municipalities where, at the present moment, there is no deduction from their wages when they are ill, and where there is some superannuation allowance. There is no need to make provision for them because provision is already made. The same thing will apply to commission agents employed by more than one person. There is also an exception in the case of casual labour employed otherwise than for the purpose of the employer's trade or business. We think it is vital that casual labour should be included. Otherwise the same thing may happen here as I am told happens in Germany, where the exclusion of casual labour is rather encouraging its growth. That is a very bad thing in itself, and there is really no class which it is more important to include than casual labour.


Does that include casual labour in. dockyards?


Casual labour at docks and in warehouses will be included. I think, too, that casual labour such as that of golf caddies should be brought in. I am making special provision for labour of that kind. Hotel waiters will be another difficulty. They are not paid salaries. I am told they very often pay for the privilege of waiting, and we have to make special provision for them. Cab drivers are another class we propose to include. All casual labour of this kind will be included, as well as casual labour of the kind referred to by the hon. Member opposite. The man who offers to carry your bag for sixpence you can never draw in, but it is our intention to attract all casual labour possible within the ambit of our Bill.


Are we to understand that all the classes which the right hon. Gentleman has enumerated are exceptions to the compulsory provisions which he is about to describe?


Certainly, they can come in the voluntary part if they like, so long as they answer to the definition which I have given. I think that is rather anticipating, but the right hon. Gentleman will later on find what class of persons will come in. I come to the amount of contribution. The workman now pays to his friendly society 6d. or 1s. The usual contribution to a friendly society is something between 6d. and 9d., as far as I have been able to discover, and anything under that produces benefits which are benefits I do not think it would be worth our while to include in an Act of Parliament. The House will be interested to know what German workmen have to pay, because that was the first great scientific experiment in insurance on a national scale. It has been enormously successful. That is the testimony borne by all classes of Germans. I have taken some trouble to inquire, and the German Government have been exceedingly kind and helpful in placing information at our disposal. They have shown every disposition to be helpful throughout, and their testimony is that all classes of the community are very much benefited by it. In Germany the payment is in proportion to wages, but the benefits are also in proportion to wages, so that the higher class of workman, who pays a very high contribution, gets a very substantial benefit. There are in Germany, I think, five classes of invalidity contributors, and for sickness every man pays according to his income. They divide their insurance into two separate branches of sickness and invalidity. There are two separate branches, but we propose to include them in one branch. In Germany a man who earns 30s. pays 10¾d. weekly for sickness and invalidity. There are not many of those. The man who is paid 24s. a week, which I think is about the average wage in this country, if you were to strike an average, which it is a difficult thing to do—the man who is paid 24s. a week pays 9d. a week. For that 9d. the benefits he gets will not be equal to the benefits we shall be able to give under our Bill twenty years hence. The 20s. a week man pays 7½d., the 18s. man6¾d., the 15s. man 5¾ the 12s. man 4¾d., and the 9s. man 3¾d.

That is what the workman pays in Germany, and when you come down to these lower classes the benefits are so small that the workmen in Germany say they prefer to resort to parish relief as the benefits are much too inadequate. For that reason we have decided in favour of one class, because if you have a scale which is proportionate it would be very difficult to give benefits to the lower class except by making special conditions which it would not be worth our while to make. It would certainly not give them a minimum allowance to keep their families from want. So we have decided to have one scale for all classes, with a provision for the lowest wages. Therefore, we have decided to propose a deduction, of 4d. for men and 3d. for women. That is about a halfpenny a day and a penny on Saturday, or, as somebody told me, about the price of two pints of the cheapest beer per week, or the price of an ounce of tobacco. Now comes the difficulty of the man who is earning 15s. a week and under, and who finds it rather difficult to pay 4d. a week. We meet that case by saying that a man or woman who earns 2s. 6d. a day or less shall pay 3d., 2s. a day or less 2d., and is. 6d. a day or less ld. a week. Let me make a very important exception. That would not include the cases where there is board and lodging in addition to the wage. These cases are excluded altogether. This is purely the case where the wage represents the whole payment. Who will pay the difference? If you make the State pay the difference, then it means that the employers who pay high wages to their workmen will be taxed for the purpose of making up the diminished charge for workmen of other employers who are paying less, and I do not think that would be fair. We have come to the conclusion that the difference ought to be made up by the employer who profits by cheap labour, and therefore in the lowest case (in the case of 15s. a week and downwards) the employer will pay more. I hope I have made it clear that our scale of deduction for the workmen is a uniform one, with the exception of that descending scale when you come to the very lowest wages and where you really cannot expect a man to pay 4d. a week. There is another difficulty. Are we going to include in the benefits of the scheme men of all ages at the present moment? If we are, on what scale? Are we going to charge the man of fifty more than the man of twenty-five? That is a question which, of course, presents itself the moment you begin to consider the actuarial position, because, after all, sickness doubles, trebles, and quadruples as you get along in life until when you get between sixty-five and seventy the average sickness in five years is fifty-two weeks. It begins with three or four days, then on to a week, then to a fortnight, and a man as he gets on in life becomes a heavier charge upon his friendly society and no society can possibly take a man at fifty or forty-five on the same terms as if he were only sixteen or twenty unless they make special provision.

Of course, we are now starting a new scheme, and the Government have decided to do this: to charge. a perfectly uniform rate throughout, calculating the loss on older lives—because there will be a heavy initial loss as the result of that operation—calculating that loss, anticipating it, and making provision to wipe it out in so many years. We have made provision to wipe the whole of that loss out, charging a perfectly uniform rate in fifteen-and-a half years. At the end of that time, of course, there will be a considerable sum that will have been realised for the purpose of increasing the benefits, and those who will come in early will then get the benefit of their thrift by having a considerable sum of money added to the sum which is available for increasing the benefits. The only difference we make is with regard to men over fifty. We then propose to pay them reduced benefits. Men who are over sixty-five at the present moment we do not propose should join the scheme at all, because that is an impossible undertaking; the burden would be much too heavy, and, after all, we must be fair to the man who comes in young with his money. He must be encouraged, he must get his reward for it, and if we take over too heavy a burden in the way of those who are at present very old, the young people will suffer. I am told that is the criticism in Germany that the young people do not get full value for their own money and the money of their employers. We propose to admit everyone up to sixty-five to insurance so long as it is done within twelve months after the passing of the Act. We are going to give twelve months' grace. If they come in after twelve months they will come in on the terms either of paying a rate appropriate to their age or of taking reduced benefits, which comes to practically the same thing.


Would not they come in at sixteen?


A man may only start work at twenty-five, and if he comes in after the first twelve months he has to pay a rate appropriate to his age or to take reduced benefits for his life. There will not be very many such cases. The right hon. Gentleman is perfectly right the rule would be that everybody would come in at sixteen, but there may be people who come in after sixteen. In that case they will pay according to age or take reduced benefits. We make a certain exception about sixteen, because if a man has been training at a technical college, for instance, or in some other way, he is usefully employed in training himself for life, then we do not insist upon sixteen as a rigid limit. So much for the contribution by the employé. Now we come to the contribution of the employer. What interest has the employer in the matter? His interest is the efficiency of his workmen, and there is no doubt at all that a great insurance scheme of this kind removes a great strain of pressing burden and anxiety from the shoulders of the working classes, and increases the efficiency of the workmen enormously. The working men whom I met during the trades-union movement told me that many a time they used to go on working at their business because they dared not give it up, as they could not afford to, and it would have been better for them to have been in the doctor's hands. This procedure generally brings about a very bad breakdown, and not only that, when a man is below par neither the quantity nor the quality of his work is very good. I have taken the trouble to make some inquiry from the German employers as to their experience of insurance from this point of view, and I have got a number of answers which, perhaps, later on the House would be interested in having circulated. Here is one instance I had out of many. It is the opinion of an employer engaged in the steel industry. He said:— There can be no doubt that the Insurance Laws, together with the increase of wages, have exercised an enormously beneficial influence upon the health, standard of living, and the efficiency of workers. Another great employer of labour says:— That from the employers' standpoint these laws pay, since the efficiency of the workman is increased. And now there is this very curious position in Germany that the employers, and the largest employers, are voluntarily offering to increase their contributions to national insurance for increased benefits. That is the view taken by the employer in Germany. What does he pay for sickness and invalidity insurance? He pays for a 30s. a week man 7¼d. For a 24s. a week man the employer would pay 5¾d. and for an 18s. a week man he pays 4¼d., then when it goes down below that the contribution is very much lower, and the benefits are very poor. We propose that the employer should pay 3d. a week, the workman will pay 4d., or 3d. for a woman, and the employer will pay 3d. for man and woman alike. That is our proposal.

I come to the contribution of the State. The advantage of the scheme to the State is, of course, in a happy, contented, and prosperous people. The German contribution is not a very large one. I believe it is about £2,500,000 and that includes Old Age Pensions. We have already got a burden of £13,000,000 a year for Old Ago Pensions. But let me point this out to the House, that payment is equivalent to something like 5d. a week for employer and labourer under this scheme, and it makes matters very much easier. We certainly could not have offered the benefits which we are offering in this measure, 4d. for a workman and 3d. for an employer, had it, not been that the whole burden of pensions over seventy years of age had been taken over by the State. That is the first actuarial fact which was borne in upon me the moment I came in contact with the actualities, what an enormous difference that made in the scheme, and how it eased matters. Had it not been for that I should have proposed very much dearer and sterner terms both for the employer and the employed. We do not propose that the State contribution should end with that £13,000,000. We propose that the State contribution shall be the equivalent—I will explain what I mean when I come to the finance of the scheme— of 2d. a member—4d. from a workman, 3d. from an employer, and 2d. from the State. I should like to point out to the House here how we are meeting the three difficulties experienced by contributaries in making provision for sickness. The first difficulty is the lowness of the wages. We are meeting that by a State contribution and a contribution from the employer which enables us to depress all round the amount of contribution demanded from the workman. More than that we have a special scale for those whose wages are lower. That is how we meet the case of low wages. I want to point out how we meet the case of the man who is unable to pay because of sickness and of unemployment, because really this is the most serious difficulty that the workman has to encounter, so therefore we propose special provisions for him. In the friendly societies, as everyone knows who is acquainted with their working, during sickness, whether you are sick or whether you are unemployed, you have to go on paying steadily. It is true that, not being societies working for profit, and being really quite worthy of their name of friendly societies, with a great sense of brotherhood, they make special efforts to spare their men the last dire necessity of expulsion, but still they have to get their money, and what they do is this. When a man is sick he may get a nominal allowance of 10s. a week, but his 6d. or his 9d. will be deducted from it, so that where he is nominally getting 10s. he is really getting 9s. 6d. That is the time when 6d. is worth more than 2s. 6d. when a man is in full wage. We propose to make no deduction at all from benefits, but where a man is receiving sick pay we do not propose that that should be counted against him at all. With regard to unemployment, there will be no deduction, and the mere fact that he has failed to pay from that time will not be reckoned against him when we come afterwards to compute the number of payments he has made.


It will count exactly as if he had paid.


That is a better way to put it. Now I come to unemployment. What is the workman to do when he is out of work? How is he to pay his contributions? We propose allowing a 6 per cent. margin for unemployment; that means three weeks a year. As long as a man is employed you deduct 4d., but we allow a margin of three weeks a year for unemployment. That means in a cycle, say of four years—bad times may come once every four years let us say—a margin of twelve weeks of unemployment. We propose to do more than that. After he has exhausted his twelve weeks, if he is still unemployed, then up to 25 per cent., that means thirteen weeks a year, we still allow him, but at reduced benefits. Up to three weeks there is no reduction in his benefit at all. He is allowed that free margin for unemployment. Beyond that, up to thirteen weeks a year, he is allowed, without expulsion or without his policy lapsing rather, to go on; but then there is a corresponding reduction in the benefits.


The right hon. Gentleman has suddenly moved from sickness to unemployment.


No, no.


I beg pardon. I understood it. I am trying very hard to understand the right hon. Gentleman's statement. I thought he was now talking of unemployment.


I am sorry if I have not made my point clear. I am still dealing with the difficulty of a man paying his contribution during sickness and unemployment, and I am just showing how the Government make special provision for the payment of contributions in these periods. I hope that is clear to the House. Later on I will point out that it is also proposed that what is called a Distress Fund in friendly societies should be set up which will help the workman to pay arrears of contribution for unemployment or for some other reason. That is the compulsory Clause as far as contributions are concerned. I now come to the voluntary contributors. There are two classes of voluntary contributors. There are persons who, whilst not working for an employer, are engaged in some regular occupation and are mainly dependent on their earnings for their livelihood. Take the village blacksmith who is not working for any employer, but is depending on his earnings for his livelihood. The same thing will apply to the small tradesman. I find looking through the lists of the friendly societies, in some of them there is a very high percentage of men who do not belong to the employed class in the ordinary sense of the term. For instance, in rural districts, you will find that all the publicans, all the tradesmen, the schoolmaster, the village blacksmith, and the man who is joinering on his own, who is not anybody's man, are members of friendly societies. We propose that they should be allowed to be members of this insurance scheme. They are really a great source of strength to the friendly societies. They help them in the management, and their business knowledge is of infinite value. It would be a great accession of strength to any scheme of this kind that we should still retain in it men of that type. Then there is the other class of men, those who have been employed working for others and have ceased to do so, and are working on their own account. So long as they have been contributors for five years we allow them still to join. With regard to this class, there is a difficulty in allowing them to come in at any age and at all ages. With an employed class, you have always the test of employment for wages, but with this class, if a man is a trader, or is working on his own account, doing as little or as much as he likes, there is no test of that kind, and unless there is some sort of check you might have a rush of people who are fairly old coming in at the last moment to get benefits which are quite out of proportion to the contribution which they pay. Therefore, as far as the voluntary class is concerned, we are bound to put a limit to the age at which they can be allowed to join at the uniform rate. Therefore, we propose that all those of that class who wish to join within six months, and who are forty-five years of age and under, can join at a rate which covers the 4d. or 3d. as the case may be, whether they are men or women, they themselves paying the employers' contribution. That would mean that they would pay 7d. for men and 6d. for women, and they, of course, get the benefit of the State contribution. Those over forty-five join at rates appropriate to their ages, but they also get the benefit of the State contribution for what it is' worth to them, and, of course, it is worth a good deal.

Another exception we are bound to make to this class of voluntary contributors. I do not think it would be advisable to allow married women who are not workers to join. It would be very difficult to check malingering—almost impossible, I am told by those who are working friendly societies and insurance work. There is no real test except the medical certificate, and that is not always conclusive. It is very difficult, doctors tell me, in these cases, and it would be very dangerous to allow them to come in unless you have something like the test of work. You have, I think, about 700,000 married women who are workers and come into the compulsory scheme as workers, but I do not think we can possibly agree to married women unless they are workers. I will give the numbers which, of course, must be approximate numbers, for we have not the latest Census returns, and there fore we have only to guess at what these figures should be. The estimate of population has been falsified in the case of Scotland, and we cannot tell at present how the estimates will be falsified both in England and Ireland. I have, therefore, to state the figures which have been arrived at by the actuaries, who have given a great deal of thought to the subject. We have had very able actuaries at our command, but the figures must, of course, be estimated according to the details which they have had at their disposal, and if it is found subsequently that the figures are wrong because the Census returns do not substantiate them, it will not be their fault. First of all, as to employed contributors, we anticipate that 9,200,000 men will be in the compulsory class, and there will be 3,900,000 women, making a total of 13,100,000 in that class. Then the voluntary contributors will number 600,000 men, and 200,000 women, making a total of 800,000. Of course, here again I have to say that we can only guess at the number of people likely to come in.


Are young persons included?


Certainly; everybody who is employed in this country on wages of whatever age will come in. There will be a deduction in the case of young persons. I will state later on how we are going to deal with the deduction, but they will all come in. Otherwise there would be a premium on boy labour to that extent. If an employer got off without paying in respect of a boy of fifteen it would be an advantage to have boy labour, and therefore we propose that everybody should come in. With the 800,000 voluntary contributors, the total will be 9,800,000 men, 4,100,000 women, making 13,900,000 altogether. But to that has got to be added 800,000 persons under sixteen years of age, consisting of 500,000 boys and 300,000 girls. That makes a grand total of 14,700,000 persons who shall, we hope, enjoy the Insurance scheme.

Now I come to benefits. These will be distributed under three or four different heads. There will be medical relief. There will be the curing side of the benefit, and there will also be allowance for the maintenance of a man and his family during the time of his sickness. I will deal first of all with the medical side of relief. There is no doubt that there is great reluctance on the part of workmen to resort to the Poor Law medical officer. That is admitted on all hands. It was stated both in the Majority and the Minority Reports of the Commission. He has to prove destitution, and although there is a liberal interpretation placed on that by boards of guardians, still it is a humiliation which a man does not care to bear among his neighbours. What generally happens is this. When a workman falls ill, if he has no provision made for him, he hangs on as long as he can and until he gets very much worse. Then he goes to another doctor and runs up a bill, and when he gets well he does his very best to pay that and the other bills. He very often fails to do so. I have met many doctors who have told me that they have hundreds of pounds of bad debts of this kind which they could not think of pressing for payment of, and what really is done now is that hundreds of thousands—I am not sure that I am not right in saying that millions—of men, women, and children get the services of such doctors. The heads of families get those services at the expense of the food of their children, or at the expense of good-natured doctors. Doctors are very great sufferers indeed. One of them said to me: "A man fell ill and wanted my attendance. Well, I asked myself, What am I to do in this case? Here is this poor fellow, who owes me already £9 or £10,. which he can never pay, but how can I refuse to go?" He could not refuse, and he went. I do not think it right that we should do our charity at the expense of the medical profession. What we propose to-do is this. If one of the 14,700,000 persons, who practically include all the industrial population of this country, falls ill, he can command the service of a competent doctor, and command it with the knowledge that he can pay. But not only that, the doctor whose service he commands will know also that he will be paid. That is going to make a very great difference in the doctoring of these people.

I come now to a rather delicate task, because the doctors and the friendly societies are at variance on the subject. The doctors say that they are underpaid. Well, we all say we are underpaid. On the other hand, the friendly societies say, "No, it is just your greed." That is really the quarrel that is going on at the present time, and it has become very acute. In some districts—they are rural districts—the doctor is paid half a crown per head per annum for members of friendly societies. In other districts the amount runs up to 6s. per head per annum, but on the average the doctoring for members of friendly societies is done at 4s. per head per annum. The doctors say, "We cannot do it," and I am inclined to agree with them. This is not the opinion of the friendly societies that I am putting before the House. I have information from independent inquiries I have made of men who have really no interest in the matter—men who have passed through the stage of doing friendly societies' work, and who are very good judges. They say that no doctor can possibly afford to give expensive drugs, and some of these are essential to the cure of certain diseases. These drugs cannot be purchased at the price paid to the doctor if he is to get pnything for his professional services. I am on the whole inclined to agree that the doctors have got a case for increased payment, not as much as they ask, something far short of that, but at the same time something very substantial, and the first thing which I think should be done is to separate the, drugs from the doctors, because a patient, so long as he gets something discoloured and really nasty, is perfectly convinced that it must be a very good medicine. Therefore there ought to be no inducement for underpaid doctors to take it out in drug s. I am not sure but that the Majority Report of the Commission recommended that change.

I suggest that there should be a separation of drugs from the doctor whose business should be confined to prescribing. It should be for the chemist to dispense. At any rate, there should be a compulsory separation of the two. I believe in Scotland that is the practice at the present moment. There are only a few exceptions on the West coast where there are no chemists available, and where the doctor has to do the whole thing. There may he cases of that kind now, for you cannot expect a man to start a chemist's shop in a Highland glen. There the doctor would have to do both the doctoring and the supplying of the drugs he prescribes. Therefore we propose to make provision that, if there is no chemist available, the doctor should be allowed to go on as at the present moment, but wherever there is a chemist available there should be separation. In addition to that, I think there ought to be provision for an improvement in the standard of payment to the doctors. Sometimes, no doubt, they are quite adequately paid, but sometimes they certainly are not, and I think financial provision ought to be made in the scheme for raising the level to 4s. I have done so, and I hope that will meet the views of the House. So much for doctoring. There will be free doctoring for everybody who is a contributor to the scheme.

The second branch of medical attention will be in cases of maternity. There are only one or two friendly societies at the present moment which allow any maternity benefit, but they are all alive to the necessity for it, and they are gradually going on to establish branches for maternity benefit. Undoubtedly there is no more urgent need. Women of the working classes in critical cases are neglected sadly, sometimes through carelessness, but oftener through poverty, and that is an injury not only to the woman herself, but to the children who are born. A good deal of infant mortality and a good deal of anæmic and rickety disease among the poorer class of children is very often due to the neglect in motherhood. We propose to take the maternity benefit of the Hearts of Oak Society which, I think, has established a most successful benefit scheme in this respect. We propose that there should be a 30s. benefit in those cases which would cover the doctoring and the nursing, but only conditional upon those who are women workers not returning to work for four weeks, for I am told that in the mills you have very often cases where the women work up to the last moment and the maternity is over in a comparatively few days. I believe we ought to make some provision in the interests of humanity to prevent that from taking place.

5.0 P.M.

I have now to refer to another branch of medical benefit. We propose to do something to deal with the terrible scourge of consumption. There are, I believe, in this country about four or five hundred thousand persons who are suffering from tubercular disease. From the friendly societies point of view that is a very serious item, because of the dragging length of the illness. The average illness of patients of the Foresters, I think, was fifty-eight weeks. They received fifty-eight weeks' allowance on an average. Out of the total sick pay of the Foresters about 25 per cent. was due to tuberculosis. There are 75,000 deaths every year in Great Britain and Ireland from tuberculosis and, a much more serious matter, if you take the ages between fourteen and fifty-five among males, one out of three dies of tuberculosis between those ages in what should be the very period of greatest strength and vigour and service. It is a very sinister fact that at the very period which is responsible for the continued life of the race one out of three between those ages is stricken down by tuberculosis. It kills as many in this kingdom in a single year as all the zymotic diseases put together, and a very terrible fact in connection with it is that the moment a man is attacked and compromised he becomes a recruit in the destructive army, and proceeds to injure mortally even those to whom he is most attached and to scatter infection and death in his own household.

There are forty-three counties and towns in Great Britain, with a population of 75,000, and there are 75,000 deaths each year from this disease. If a single one of those counties or towns were devasted by plague so that everybody, man, woman and child, were destroyed there and the place were left desolate, and the same thing happened a second year, I do not think we would wait a single Session to take action. All the resources of this country would be placed at the disposal of science to crush out this disease. I do not say that they can cure it, but doctors think they can cure it. They are confident they can. Men who have devoted a great deal of attention to the subject, and are the most confident of all those who have engaged in experiments, are full of bright hopes that they can stamp it out. But they can only do it if they have the means, and I propose to ask the House to give them. In Germany they have done great things in this respect. They have established a chain of sanatoria all over the country, and the results are amazing. The number of cures that are effected is very large. In this country there are practically only 2,000 beds in sanatoria for tubercular patients. There are only 4,000 beds in sanatoria altogether and half of those are occupied by other patients, so that there are only 2,000 beds when there are four or five hundred thousand people suffering from the disease. I really think it is about time that the nation as a whole, that the State, should take the matter in hand, because the State has suffered. The proposal of the Government is that we should first of all assist local charities and local authorities to build sanatoria throughout the country. We propose to set aside £1,500,000 of a capital sum for the purpose of aiding local people in building sanatoria throughout the country.

We have already, through the munificence and zeal of my hon. Friend the Member for Montgomery (Mr. David Davies), raised a very considerable sum of money, which enabled us to build a succession of them right across Wales. If the same thing were done throughout England and Wales, Scotland and Ireland, I believe we would soon stamp out the most heartrending and painful disease that ever afflicted the human race. We have got to provide maintenance for that. This is our proposal: that we should take a contribution of 1s. per member per annum for the whole of those who are insured compulsorily and voluntarily, and that in addition to that the State should find fourpence, so that there would be 1s. 4d. per member for the purpose of raising a fund for the maintenance of these institutions. This is not an additional contribution. I am done with contributions. There are no more contributions—not for management or anything. This is purely a benefit. What we propose is that out of that fund a shilling should he taken for each member, and that the State should add fourpence. That will mean a fund of a million a year for the purpose of maintaining these institutions, and I am assured by those who have taken the matter carefully into consideration, including the President of the Local Government Board and his very able staff, that that sum will enable us at any rate to do something for the purpose of stamping out this terrible scourge.

I come next to the sick allowance for the purpose of maintaining the families of the sick persons who are insured. In the friendly societies I think the allowance is six months, then it is dropped again to half. In some societies it is still further dropped, generally at twelve months. I propose that the first stage should be a three months' grant, because the real reason why six months' allowance is given is because of tubercular patients. They are the people who take over three months on the fund. Outside of them a man is generally either cured or off the fund before that period. I propose that in the first three months there should be an allowance of 10s. per week. Power will be given to the society to extend that to twenty-six weeks if they think it necessary. I point out later on that there are funds for that purpose, but, perhaps, at any rate, a start should be made with three months at 10s. Afterwards the allowance will be reduced to 5s. for another three months. After that, at the end of the six months, if a man is broken down altogether, there is a permanent disablement allowance of 5s. as long as he is unable to earn his living in any way. That is for men. For women the contribution is lower, and as we are keeping the accounts separate the actuaries say we would not be justified in giving more than 7s. 6d. per week for the first three months, and then 5s. We do not propose to make the allowance less in that case.

There will be a waiting period of six months in the case of sickness. No man will be allowed to get his sickness allowance within six months after he has joined the society. No man is entitled to claim for a disablement allowance unless he has paid for two years. In Germany that has been extended to five years. The allowance is conditional in every case on the patient obeying the doctor's orders—a very difficult thing to do. But at any rate you cannot allow a man artificially to perpetuate his sickness at the expense of the community by defying every rule that is laid down for his cure by the professional gentleman who is in charge of him. In Germany they have this power. They give instructions as to what a man is to do, and if he does not obey them his allowance is docked and I think it is a very salutary rule. I have no doubt it will be very liberally interpreted, but still it is a very necessary rule. There is another rule. The friendly societies do not admit sick allowance to any man whose illness is due to his own misconduct. What we have done in that case is this. If a man's illness is due to his own misconduct we do not allow him sick pay, but he is entitled to a doctor, not merely for his own sake, but for the sake of the community, and because eventually he will come back again, and he will fall on the sick fund and the burden will be much heavier. Now I come to the exceptions. In the case of persons over fifty years of age at the date of insurance the men will only be entitled to 7s. a week and the women to 6s. a week, unless they have paid 500 contributions. Men and women over sixty years of age will only be entitled to 5s. Persons under twenty-one years of age, if unmarried, males will be entitled to 5s., and, if females, to 4s.

There is another very important exception from the point of view of checking malingering. When you come to the lower rate of wages you must not give a sick allowance which would make it more profitable for a man to be sick than to be working. Therefore, we propose that thirds of the wages the amount shall be reduced. But seeing that with the low wages, the insured person is either, through himself or through the employer, paying exactly the same contribution, we propose that in that case there should be an alternative scheme of benefit which would be the exact equivalent in actuarial value. For instance, you might give a pension at sixty-five or sixty-six, as the case may be, but they must submit our scheme, which will be the actuarial equivalent of the amount by which their benefits are reduced. Now I come to the person under sixteen, and with regard to him we propose that he should get no sick pay allowances, but that he should get medical attendance and the benefit of the sanatorium, and that the rest of the money should be invested, in order to accelerate the period of his getting increased benefits. That is to pay off the loss which is due to your taking on men of older ages, and the money will be applied for the purpose of wiping off that loss. The sooner you do that the sooner will the young person come to increased benefit, so that you are really investing it for his own future advantatge.


Is that for girls also?


Oh, yes. After paying for the doctor, after paying for the sanatorium, after paying maternity benefit, after paying 10s. a week and 5s. sick allowance, and 7s. 6d. for women, there will be left a balance of £1,750,000 in the hands of those who administer the funds. That is the actuarial calculation. We do not propose now to distribute those benefits, because we want to give an interest to those who are administering the funds, to administer them economically, and to declare alternative benefits, if they save the amounts which we anticipate they can save. We propose, therefore, to have a list of alternative benefits, optional benefits, and additional benefits. The first benefits, as I have indicated, will be the compulsory minimum benefits. They will be in every scheme. I now come to the additional benefits from which the society may choose, with this surplus at their disposal. This surplus will be £1,750,000 immediately the scheme begins to work, but at the end of fifteen years and a-half, when the loss on the older persons has been wiped out, you will then have an. addition of something like £5,500,000 to the fund, and, of course, that will involve a further contribution from the State of £1,500,000 per annum. That means £7,000,000, which will be added to the income of the scheme after this initial deficit has been wiped out—a surplus now of nearly £2,000,000 for additional benefits; a further surplus of £7,000,000 after declaring those benefits which I have mentioned, and which will be available for the declaration of additional benefits. What is the kind of additional benefit we have in mind'? The first is medical treatment, not merely for the working man himself, but for his family. If the societies who administer the funds like to pay for that they have the money at their disposal. An increase of the sickness and disablement benefit and convalescent homes are other additional benefits. I have a long list of additional benefits of that kind from which they can choose, but I think the most interesting of all would be that, when the fifteen years and a-half have elapsed, when the loss has been paid off, and when you have released a fund of £7,000,000 between the State and the contributors, we shall then be within sight of declaring either a pension at sixty-five, or, what I think would be better still—and I propose this as an alternative—if a man does not choose to take his pension at sixty-five, but prefers to go on working, he shall increase his pension at a later stage in proportion to each additional year he goes on working. So much for the benefits.

I now come to the machinery of the Bill we have got to work. Collection is the first thing. We shall collect our funds by means of stamps. That is purely the German system. A card is given to a workman; he takes it to his employer at the end of the week, the employer puts on the workman's 4d. stamp and his own 3d. stamp; he deducts the 4d. out of the wages of the man, and he pays the 3d. himself; the card is in the possession of the man, who takes it to the post office, whence it is transmitted to the central office. The employer does not necessarily know—there is nothing on the face of the card to say—what society the man belongs to. It is entirely a matter for himself. The card is sent along to the central office, and the whole of the money is paid to the central office. Then comes the question, who is to dispense the benefits. In this country we have fortunately a number of very well-organised, well-managed, well-conducted benefit societies who have a great tradition behind them, and an accumulation of experience which is very valuable when you come to deal with questions like malingering.

We propose, as far as we possibly can, to work through those societies. We propose that all the benefits shall be dispensed through what the Bill would call "approved societies." What are the conditions attaching to an approved society? It must be a society with at least 10,000 members; otherwise, it becomes a matter of very great complication which is much more difficult to manage from the actuarial and financial point of view. It must be precluded by its constitution from distributing any of its funds otherwise than by way of benefits, whether benefits under this Act or not, amongst its members. It must not be a dividing society; it must be a benefit society which provides for sickness and for old age. Therefore it cannot be a society that divides its profits at the end of each year. It cannot be a society that allows anybody to make a profit out of this branch of its business, and it must be mutual so far as this branch of its business is concerned. Its affairs must be subject to the absolute control of its own members; it must be self-governing, and its constitution must provide for the election of its committees and representatives and officers. There are other conditions. It must provide a reasonable security that the funds will be dispensed in the way the Act provides. It must have local committees. There are several societies, as hon. Members know very well, which have branches. There are other societies which are purely central. Both are very excellent societies in their way. The Hearts of Oak, I believe, is a centralised society. The Foresters, I believe, is a society with branches, and the Odd-fellows the same. But the societies which have central control and no branches must have some sort of local committees and management; otherwise it will be quite impossible to distribute the benefits, and it will be very difficult to arrange about doctoring and other matters.

There are other things about keeping books and so forth, and there must be a valuation. We do not propose to interfere in the slightest degree with the funds of these friendly societies, funds which they have voluntarily collected, except to this extent: The moment you have a scheme which brings in 3d. from an employer and 3d. from the State for purposes which are identical with the purposes for which these other funds have been accumulated, you release enormous funds for other purposes. You cannot allow those sums to be distributed in cash amongst the members; they must be used for kindred purposes; and we propose that the friendly societies should submit schemes for the purpose, with additional benefits, but of a kindred character. That is the only interference we propose with the present funds of the friendly societies. We propose to allow them to have the most absolute right to admit members or to refuse them. It is a matter I considered for a very long time, whether you should compel them to take members, and I came to the conclusion that it is far better to leave it to ordinary free competition amongst them.

A good many more societies, I have no doubt, will spring up the moment we have a scheme of this character, and it is far better to leave it to competition amongst them. They pride themselves a good deal upon the right to choose their own associates, as most people do, and there are some people they would not care to have forced upon those societies, and I think they have a right to say, "We do not want them." Not only that, some of these societies have purposes which are sectarian, or let us say religious, and some of them are political. Gloucestershire, I find, is split up into Conservative friendly societies and Liberal friendly societies, both of them more or less actuarially sound. I need hardly say that if there are any sectarian or political societies anywhere you cannot exclude them from Ireland. I think there are one or two there which have purposes which are not either actuarial or altogether financial, but which I think are partly, perhaps, political. Then, of course, there are the trades unions. Their purpose is not altogether that of friendly societies. We propose—I will say later on how there shall be no abuse of the power—to give them absolute freedom. It would be quite impossible for the State to administer some of their rules. Take the Hearts of Oak. The Hearts of Oak take power to exclude men of a quarrelsome disposition. I have been watching events in Parlialiament from the solitude of Kent for some time, and I have wondered how many of my comrades and colleagues would survive the Hearts of Oak test if it were rigidly imposed on them. Then there are rules with regard to exclusion on grounds of conduct, and they interpret rules of that kind, I think, very largely according to the regularity with which a man pays his subscriptions. After all, they are clubs, and they want to have the right to prevent a man who is objectionable to them entering their club. I do not propose to interfere with that at all. I will come later on to deal with persons who are not fortunate enough to get admission to any of those clubs. They have got to be dealt with by themselves. We propose that the societies should administer and manage their business in this respect exactly as they are doing at the present moment.

You come, then, to the question of age, and that is a difficult question. You are now allowing men to enter those societies who are giving benefits at all ages, and you must not give any sort of inducement to any society to depress its age limits. Otherwise you might have, say, the Hearts of Oak with an average age of forty years, and you might have the Foresters with an average of thirty, and unless you make special provision to equalise that matter by a system of credits, you will find that those societies whose ages are very young will gain an enormous advantage over those whose members are of all ages. We have got an adjustment, which is rather a complicated one. I think, for t he moment, I had better let it wait until the Bill comes on. We propose to equalise the ages by a system of credits, so that there shall be no inducements for any society to exclude any man, nominally on the ground of a quarrelsome disposition, but really because he is sixty years of age. We come now to valuation. How do we propose that they shall administer the fund, and what is our check? We propose a valuation for so many years of their funds. Then we have credit for their account in the centre of all money paid in by their members, and paid in by the employers in respect of their members, and, of course, they will have the credit of the 2d. contributed by the State. I propose that there should be a valuation of their assets upon this basis. If there is a surplus then they will have power to declare additional benefits, and so that surplus will be an inducement to them to manage economically and carefully, because a society that manages carefully and economically can declare larger benefits for its Members, and therefore will attract larger custom, and will have a larger number of Members than a society that manages its affairs badly and uneconomically.

For valuation it is very simple to take the Hearts of Oak, as you there simply reckon up the whole of the value of their assets—but take a society with branches, the branches you value separately which is more or less what is done now. If there is a surplus you cannot allow that branch to take the whole of the surplus, otherwise you would find a very healthy neighbourhood in one district declaring enormous benefits; while other neighbourhoods not so healthy would be very badly off indeed, and people would not bear each others burdens, as I think they ought to do in a system of this kind. At the same time there must be an inducement for the branch to be administered economically, and I propose they should get half of their surplus and pay the other half to the centre, because, on the other hand, when there is a deficiency, as I shall point out later, the centre must come to their rescue. Suppose there is a deficiency, what happens If the insurance office finds there is a deficiency, and that they are not in an actuarial position to pay even minimum benefits, then the central insurance office will have power to do one of two things, either to compel them to reduce their benefits or to increase their levy, to make a special levy. That is the real check on malingering. You cannot check malingering by doctors' certificates. There is no doctor but will tell you that there are certain diseases in which it is quite impossible to say whether a man is shamming or not. Therefore you must depend really upon each member being almost a detective to spy on his associates. That is really the only way to do it. If a society has such a number of malingerers that it becomes insolvent or bankrupt, what happens is that there is an additional levy, or the benefits are depressed. Then the members would say: "Why is this? It is because 'So-and-so' is always sick. He is no more sick than I am." There is no more effective method for suppressing vice than to make it unpopular amongst the man's associates, and the same thing applies to malingering. In a very short time you would soon get a real stop put to the malingerer, because the workmen themselves would not stand it, and would begin to report on those they considered malingerers.

Now comes the question, what are we to do with the residue? You will get men who have been either rejected by the societies or who have left their societies through their carelessness. You may find men who say, "we will not join any society." You cannot compel a man to join a society. If he chooses to remain outside he can do so, but he does it at his own cost. Every inducement is offered to a man in this scheme to join a society, and I will show how that works. We propose that all the men in a county who have not joined a society should be collected together in a body called Post Office Contributors. You will form a fund of those people. Most of the people who remain outside will be uninsurable lives, men who would be rejected by all sorts of societies, because really they are ill at the time, or display symptoms of illness, and they are therefore quite uninsurable, or they may be drunkards. Those are the sort of reasons for which a society now excludes them. That must necessarily make it impossible for us to pay the same benefits to the Post Office Contributors as would be paid to men who are in the friendly societies, because they contain pretty well all the bad lives. It will be largely a temporary t difficulty and a dwindling one, for the simple reason that in future men will be "taken on at the age of sixteen, and at that age the vast majority of people have not developed any kind of fatal disease. Therefore it will dwindle almost to nothing t in the future, and this difficulty is purely temporary. It will be a body of people who are not a very good insurable proposition.

What shall we do with them? We shall distribute the funds first of all in medical needs. They have paid their own contribution, and there is the contribution from the State, and the contribution of the employer. You will make a deduction for medical relief, and for sanitoria, and you will distribute the balance on purely deposit principles. There are societies in this country which do this thing now, and which is really a kind of banking transaction. You pay an amount in and you draw to the extent you paid in. With this condition in these cases you will get a number of lives that will drop, and still a balance who will not withdraw the whole of their deposits. I propose that that should go to swell the fund. Therefore those who are inside the Post Office Society will be able to draw to that extent upon the fund, and will get that additional advantage. It is quite clear there is no inducement to join the Post Office contribution, and we do not want that there should be. We want to give all inducements we can to the societies to govern themselves and take responsibility, and as they have taken the whole of the responsibility the government must be left in the hands of the societies. If you put on a State representative, or if you put on an employers' representative, you are dividing responsibility, and they will always come back to you and say the employer or the State ought to pay an extra penny as the whole responsibility is cast on them.

The only other thing I will say about the Post Office contributors is this. We propose that they should have to wait for fifty-two weeks after paying contributions before they get any relief at all. That is by way of having some kind of test, at any rate, when they enter into the Post Office Society that they are fit for labour. How are you to administer this fund. The Post Office cannot administer it because they certainly cannot go on appointing doctors, and checking malingering, and managing the funds generally. We propose therefore to set up Committees that we will call county health committees. There will be a membership between nine and eighteen, chosen in three batches, a third by the county councils, a third by the approved societies in the districts and failing agreement amongst them by the Insurance office, and a third by the Post Office insurers. We propose that the State should also have a fourth of the whole body to represent its interests in the county health committee. This county health committee we propose shall administer the whole of the sanatorium fund. We do not propose that the sanatorium funds should be left to the societies, because, after all, that has got to be done in the districts where there are no societies. We propose that the whole of the shilling, or, rather, 1s. 4d. per member, which goes to create the fund to establish sanatoria shall be entirely in the hands of the county health committee. Instead of a sanatorium for each county we propose that there should be grouping for the purpose of sanatoria. We propose that the whole of the funds of the Post Office insurers, including medical relief, shall also be administered by the county committee. We are also putting forward another proposition. If any approved society chooses to come to terms with the county health committee to do its medical work for it we propose that they shall have the power to do so, and to make arrangements for that purpose. But if they agree the county health committees can take over the medical part of the work of approved societies if they choose to do so. It is purely a matter of arrangement on both sides. There will he a further power. If a county health committee are anxious to spend more money than they have funds at their disposal upon either the medical side or the sanatoria side, the county councils have power to agree to sanction further expenditure, provided the Treasury also agree. One-half the additional expenditure will come out of the rates, and the other half out of the Treasury. I want to make it quite clear that the county health committees have no right to incur expenditure and then pass it on to the ratepayer. They must submit the expenditure before it is incurred both to the Treasury and to the county council. If both those bodies approve the expenditure, then the county health committees may, if they choose, incur that extra expenditure.

There are one or two other functions, to which I attach great importance, which the county health committees will have to discharge. They will have to consider generally the needs of the county and borough with regard to all questions of public health, and to make such reports and recommendations in regard thereto as they may deem fit. I shall point out later on that they have power beyond that of merely making reports and recommendations; otherwise those reports and recommendations would be thrown into the wastepaper basket. There is already a plethora of reports and recommendations, and there must be some power of that kind. They will have power also to make provision for the giving of lectures and the publication of information on questions relating to health. This has been a very important power in Germany, because there is appalling ignorance of the most elementary conditions of health—diet, air, and fresh air especially, light, and the danger of the excessive use of alcohol and narcotics. All those questions affect the health of the community. It has been of enormous advantage in Germany to have lectures of this kind and other means of disseminating information upon these points. We also hope that the doctors will assist by imposing conditions which will improve the health of the community.

What are the further powers of the county health committees? The societies, as I have pointed out, are responsible for their own sickness. It is not fair to make them responsible for the cost of sickness that is due to somebody else's fault. Sometimes there is excessive sickness in a district, due to bad sanitation, to bad housing conditions, and generally to the neglect on the part of the local authorities to enforce such powers as they have got, either through ignorance, through incapacity, or very often through a combination of interests. What we propose is that the county health committee shall have power to go to the Local Government Board whenever there is excessive sickness coming on the funds of the society, and apply for an inquiry into the cause of that sickness. Wherever the Commissioners of the Local Government Board find that it is due to neglect by the authority to discharge functions imposed by an Act of Parliament for the housing of the people, or for improved sanitation, they shall have the power of imposing that excess, not on the societies who are not at fault, but upon the local authorities who are at fault. That will be a much more effective check than the old obsolete form of mandamus.

I come now to the finance of the scheme. In the first year the sums paid by all classes of contributors will amount to nearly £20,000,000, of which employers will contribute nearly £9,000,000, and the employés £11,000,000. The expenditure on benefits and administration will, in consequence of the waiting periods, be only £7,000,000 in 1912–13, but will have risen to £20,000,000 in 1915–16, when the additional benefits begin to be granted. By 1922–3 the State contribution will also have risen. In the first year there will be no charge, because the Act does not come into operation until 1st May next year. There must be time to make arrangements. There will be only a charge for the necessary expenses of making preparation. But in 1912–13 the charge on the State will be £1,742,000; in 1913–14, £3,359,000; and in 1915–16—a full year—£4,563,000. That is the expense as far as the State and the contributors are concerned of that part of the scheme.

I will now briefly outline the unemployment insurance. My explanation will be considerably curtailed, owing to the fact that the Home Secretary very fully explained to the House the year before last the principles upon which the Government intended to proceed. The scheme only applies to one-sixth of the industrial population. We propose to apply it only to the precarious trades, which are liable to very considerable fluctuations. The benefit will be of a very simple character; it is purely a weekly allowance. The machinery is already set up, therefore it will not be necessary to explain that. The machinery will be the Labour Exchanges and the existing unions which deal with unemployment. I will not say anything about the suffering caused by unemployment. All I will say is that, whoever is to blame for these great fluctuations in trade, the workman is the least to blame. He does not guide or gear the machine of commerce and industry; the direction and speed is left almost entirely to others. Therefore he is not responsible, although he bears almost all the real privation. I think it is about time we did something in this matter, because it is not something which has happened once or twice, but something that comes regularly every so many years. We know it, will come, and we know that distress will come with it; therefore we ought to take some means to alleviate the misery caused by phenomena which we can reckon on almost with certainty to within a year or two of its advent.

No real effort has been made except by the trades unions. That, of course, is a purely voluntary matter, and the burden is a very heavy one. It only applies, in their case, to very few trades, and I think to only about 1,400,000 workmen altogether. The others cannot afford it. Other trades have attempted it, but have laid it down because they could not afford the expense. On the Continent many efforts have been made, mostly failures, because they were all on the voluntary principle. In Cologne there was a great effort. It ended in about 1,800 people being insured out of a population of 200,000 or 300,000. There it meant people who knew they would be out of work, and who insured against almost certain unemployment in the winter. That is very little good. I came back, after examining some of these schemes, with the conviction that you must have, at any rate, three or four conditions. You must have a trade basis, to begin with. A municipal basis will not do; it must be a trade basis, because the fluctuations are according to trades. You must start with the more precarious trades. The scheme must be compulsory. I also came to the conclusion that the workmen's unsupported efforts are quite useless. These are the principles that we have incorporated in our Bill. We have started, first of all, by taking two groups of trades, and we propose to organise them individually—the engineering group and the building group. They include building, construction of works, shipbuilding, mechanical engineering and the construction of vehicles. These are the trades in which you have the most serious fluctuations—I think for a very good reason. The depression seems to fall more heavily on these trades; it seems to concentrate upon them, because they produce the permanent instruments of industry. We propose that in these trades a fund shall be raised for the purpose of paying an unemployment distress allowance. I ought to say here that you have not the same basis for actuarial calculation that you have in reference to sickness. It is very necessary to warn, not merely the House, but rather more especially the workmen upon this point. You cannot say with the almost certainty that you can in sickness that a certain fund will produce such and such benefits. In the case of sickness you have nearly 100 years' experience behind you, and you have the facts with regard to sickness and death. You have not got the facts with regard to unemployment, and the question is very difficult. All we know is that in certain branches of trade unemployment is prevalent and appalling. Some trades meet it by short time, but in other trades you cannot do that. As a matter of fact, in the building trade you may get men working overtime in one place at the very time when 20 per cent. of the workmen are out of work in another.

6.0 P.M.

We propose that the workman should pay 2½d. per week and the employer 2½., and that the State should take upon itself one-fourth of the total income. We propose that there should be an abatement to those employers who choose to pay for their workman by the year. I will show the extent of that abatement; it is very considerable. If you take the two contributions of employers and workmen at 2½d., they come to 21s. 8d. per annum; we propose that the employer who will undertake to insure a workman for the whole of a year can do so for 35s. He will get the whole benefit of the reduction. It is proposed that the workman shall pay the full 2½d. but that the employer should get the whole benefit of the abatement. It seems a very serious abatement. It is practically telling him that he can take one-half if he undertakes to insure the workman for a year at a time. It is an inducement to him to give regular employment; it is a discouragement of casual labour; it is a reward to the employer who keeps his workmen for a whole year. It is a very heavy one, but I think it worth while. That is the only exception made by the employer. We propose, by way of benefits, to give, in the engineering trade, 7s. per week unemployed pay, and in the building trade 6s. for a maximum of fifteen weeks. The number of weeks is limited to fifteen, because, I again say here, there is no basis of actuarial calculation, and you will have to watch the thing. Now, you will have a huge distress fund, to which the employers will contribute very nearly £1,000,000 and the State £700,000 or £800,000 for the purpose of relieving the distress, and to enable the workmen to insure where otherwise they could not do it. But you cannot guarantee that it will work out at these figures. All we can say, having consulted the very best actuaries at our disposal, is that we are firmly convinced that the fund will work out in this way. What will happen? The workman who is out of work will go to the Labour Exchange. We want someone there to check him, so that you will not have a man who is not genuinely unemployed getting unemployed pay. Therefore you have to do this through the Labour Exchanges. The man will take his card and they will offer him a job. If he refuses a job, then comes the question who will decide whether he is unemployed or not? We have appointed an impartial court of referees to decide this; we cannot leave it to the Labour Exchanges entirely, or to the workmen, to decide whether the man is to take a job or the 7s. unemployed benefit. There will be no payment for a workman dismissed through his own misconduct. There will be no payment under-this scheme where there is unemployment by reason of strikes or lock-outs, because this scheme has absolutely nothing to do with them. It is purely a relief scheme for unemployment which is due to fluctuations of trade.

I now take the trade unions which insure-themselves against unemployment. We propose that in that case that they should reap the benefit, but we cannot possibly hand over State funds—certainly not employers' funds—to an organisation, the object of which, in the main, is to fight out questions of wages and conditions of labour with the employers. What we propose is this that the trade union shall pay its unemployed -benefit to the men and claim from the fund repayment in respect of the amount which the men would have been entitled to draw had they gone direct to the Labour Exchanges. The State in effect allows trade unions to spend this money, and at the same time it protects against the unfairness of subsidising what after all is a war-chest—as the trade unions admit. There is no payment for the first. week of unemployment. In addition to that no man can draw more than one week's employ for five weeks of contribution, so that the real loafer soon drops out. The meshes of the Labour Exchange net might not catch him at first, but eventually and automatically he will work himself out, owing to the fact that he is not a regular contributor, and therefore he will come to an end of his right to obtain benefits. We also propose that where there is a society established on the Ghent model for the purpose of providing unemployed pay generally for the people, say, in the neighbourhood, to give a contribution of one-sixth to that fund for the purpose of enabling them to dispense unemployed pay. If any other trade wishes to come in they are to have, what I think they call in the Court of Chancery, "liberty to apply." If they make out their case and are prepared to make their contribution it will be possible to include them in our scheme. But for the moment we propose to begin to work the experiment with these trades, which are the very worst trades from the point of view of unemployment. This scheme will apply to over 2,400,000 workmen. The contributions of the workmen will be £1,100,000. The contributions of the employers will be £900,000. The cost to the State—


But you said the contribution from the workmen and the employers are to be the same.


I thought I had made it quite clear that there is a very considerable abatement to the employer. It is equivalent to £200,000 on the whole scheme—to the employers if they undertake the responsibility of insuring the whole of their workmen by the year. The cost to the State will be approximately £750,000 a year. The expenditure will undoubtedly fluctuate with the state of trade, and a fund will therefore have to be created for the purpose of dealing with times of very great distress. That is the position as far as both of these branches are concerned. The total sum to be raised in the first year is 224,500,000, of which the State will contribute £2,500,000. By the fourth year the State's contribution will have risen to nearly £5,500,000. That is the finance of the scheme.

I have explained to the House as best I could this great matter, and I thank Members for the courtesy with which they have listened to me. I have explained as best I could the details of our scheme—the system of contributions and of benefits and the machinery whereby something like 15,000,000 of people will be insured, at any rate against the acute distress which now darkens the homes of the workmen wherever there is sickness and unemployment. I do not pretend that this is a complete remedy. Before you get a complete remedy for these social evils you will have to cut in deeper. But I think it is partly a remedy. I think it does more. It lays bare a good many of those social evils, and forces the State, as a State, to pay attention to them. It does more than that. Meantime, till the advent of a complete remedy, this scheme does alleviate an immense mass of human suffering, and I am going to appeal, not merely to those who support the Government in this House, but to the House as a whole, to the men of all parties, to assist us. I can honestly say that I have endeavoured to eliminate from the scheme any matter which would cause legitimate offence to the reasonable susceptibilities of any party in the House. I feel that otherwise I would have no right to appeal, not only for support, but for co-operation. I appeal to the House of Commons to help the Government not merely to carry this Bill through but to fashion it; to strengthen it where it is weak, to improve it where it is faulty. I am sure if this is done we shall have achieved something which will be worthy of our labours. Here we are in the year of the crowning of the King. We have got men from all parts of this great Empire coming not merely to celebrate the present splendour of the Empire, but also to take counsel together as to the best means of promoting its future welfare. I think that now would be a very opportune moment for us in the Homeland to carry through a measure that will relieve untold misery in myriads of homes—misery that is undeserved; that will help to prevent a good deal of wretchedness, and which will arm the nation to fight until it conquers "the pestilence that walketh in darkness, and the destruction that wasteth at noonday."


The right hon. Gentleman is quite assured of a cordial welcome back to-day. We have missed him from our Debates, and we have sympathised with him in the cause that has kept him absent. We are glad to see him here to-day, and are glad that he has been equal to so sustained an effort as that which he has just made. On these purely personal grounds the right hon. Gentleman would have been quite certain of a warm and cordial welcome from all quarters of the House. But he is doubly assured of it on this occasion, because he came to set the foundation-stone of a work which every party desires to see carried to a successful conclusion. This is one of the occasions when for all too brief a moment the housebreakers among his colleagues are silent, and the right hon. Gentleman is allowed to turn to constructive work, and to invite the House to return to constructive work instead. I venture to say that he will not appeal in vain to any section of the House, or to any Member of the House, to give him such help as they can afford, in not merely further consideration, but in the ultimate fashioning of this measure. So it may be a credit not to one side or the other—we are never very anxious to work for each other's credit—but to the credit of the House as a whole, and for the real benefit of the country. I think the best way I can show my respect for the right hon. Gentleman's statement to-day is—although it may seem paradoxical—by not attempting to follow him. I think anybody who has tried, as I have done, as we have all been doing, to follow the statement of the right hon. Gentleman, would feel it was quite impossible for him, for any man, to express, without having known beforehand what the Chancellor was going to say, an opinion of real value upon this scheme as a whole, if he had to rise, as I do the moment the Chancellor sat down. Accordingly, beyond assuring him of the cordial welcome which we give to this, and of our desire to be allowed to co-operate with him, I do not propose to do much more on the present occasion than to ask for a little further explanation on the points which, either because the Chancellor of the Exchequer had not the time to deal with, or because I failed exactly to follow what he said, are not clear. Let me say in the first place that I regret that the Government has introduced these measures in one Bill. I quite understand that if the measures were to be received in any controversial spirit, the Government would desire the excuse to save every Parliamentary stage they possibly could, but the Government really had not that to fear in regard to either of these measures, and I think the Chancellor of the Exchequer himself feels that it is too much to expect from any Minister that he should deal fully with what is in fact two Bills within the compass of a single scheme. And here let me remark, that what he was able to tell us about his unemployment scheme was very small, and the details were very meagre. I think there ought to have been two Bills dealing with these two different schemes. They have to be administered by entirely different bodies, and they are admitted to be dealing with entirely different problems. There is, in reality, no connection between the two, and while a good many efforts have been made to deal with insurance against invalidity and sickness, as the right hon. Gentleman has said, we have nothing to guide us when we come to deal with insurance against unemployment, and not only are bases of acturial calculations wanted, but such experiments as have been made have been made upon so small a scale that you can draw little or no inference from them. I think that is most serious, and I hope the right hon. Gentleman will not think when I say that that I begin with a criticism which is at all unfriendly. This is all the more important because nobody supposes you can finish this question with this Bill, or leave the experiment where it is placed by this Bill.

The right hon. Gentleman is anxious to explain to the House that when he chose certain trades he chose them because they were the most subject to fluctuations of employment. I am not at all certain that they are. I think they exclude a great number of individuals that suffer most. They are trades which are highly organised, and whatever be the suffering in them, the suffering in trades which are largely dependent upon casual employment is infinitely greater, and I think the difficulties of dealing with them are very much greater. The right hon. Gentleman observed that whereas in the case of sickness and invalidity insurance everybody within limits receives benefit for the contribution he makes in the case of unemployment benefit, every taxpayer will have to contribute his quota to a limited and select body of taxpayers who alone will benefit, and amongst those who pay but do not get the benefit would be a great many with at least as much right to be included. I am not, at all events, certain if the right hon. Gentleman considered the necessity of trying to carry the experiment still further that he would not have varied a little the principles upon which he is proceeding. I think it is possible to apply a flat rate benefit as well as contribution to the particular trades chosen, but if he tries when the time comes to extend his experiments to other trades I doubt very much whether the same flat rate can be maintained and the same contribution, and if it cannot be maintained for contribution it obviously cannot be maintained for the benefit.

In regard to the question of unemployment, I quite agree with the right hon. Gentleman that whatever the rate may be, if the scheme is to be successful, it must be compulsory as far as it extends, and I think it is right it should be on a trade basis, and I think a fair case is made out for contribution alike from the employers, workmen and the State. I do not wish at all to commit myself to the exact proportions which the right hon. Gentleman has chosen. That is a matter for further consideration, but I do think that so long as our trade conditions practically require a certain amount of unemployment in connection with the organisation of industry you cannot treat people so unemployed as not having some claim upon the industry, and expect individuals to bear the whole burden, which is not theirs alone, but merely trade interests, from which the employer and other workmen alike draw benefit. I think it is very often the case, and perhaps it is a matter which the right hon. Gentleman will have to consider with regard to the benefits he is giving, that in no trade whatever is the average of unemployment among the workmen of that trade, the proportion which affects any individual workman, the average of unemployment in the trade, and I think he will find in a great many cases the tendency is for unemployment always to fall upon the same rate. Take a trade in which the average of unemployment is serious. A great many of the workmen will work the whole year through without any unemployment at all. Others will work, but will be out three weeks or six or nine through unemployment. I am not sure how this position will be affected or how the average will be arrived at in such cases as that. I understood him to say that the unemployment benefit was to be at the rate of 7s. a week.


Seven shillings in the engineering trade.


I did not hear him say for how many weeks.


For fifteen weeks.


After the fifteen weeks without abatement it will stop altogether. I understood the right hon. Gentleman to say that this benefit would be paid largely through the trade society to their own members, so that their members would not be required to go to the Labour Exchanges. A man who is a member of a trade society would get his benefit from a trade society, and the trade society would recover from the State what was the proper proportion of contribution by the State for those men out of work. I presume precaution will be taken to see that the amount is given to the man who is entitled to it in addition to anything he insured for in his society, and that the society would not be allowed to divert the State contribution for any other purpose other than that for which it was intended. I understand that whatever sum becomes due in any given year the State is to pay one-fourth of it.


For unemployment.


The State contribution, therefore, is a very problematic one. I want to ask the right hon. Gentleman one or two questions about sickness and invalidity insurance which is the most extensive part of the scheme and the more complete part, and the part which the House and country are Lest equipped to deal with. Let me say that nothing gave me more pleasure than the right hon. Gentleman's claim that the relief given in cases of invalidity and sickness should be as far as possible curative and permanent in its results. I think that is of the very greatest importance, and I think the right hon. Gentleman may be driven to go even further than he has gone hitherto in the way of providing sanatoria not for consumption only, but for other cases, in order that by spending a little money immediately you may keep a man away until he is really strong, and in order that you may make a man really strong and healthy for the future instead of building him up merely for the moment. I think we are limited to a certain amount of money, but do not let us grudge the proportion which goes for curative measures and in really preventative measures for the future. May I ask the right hon. Gentleman about insurances in case of maternity? How is that to be expended? I agree again that this is a most important matter, and I doubt whether we could possibly spend money in securing greater good.


Maternity insurance is to be paid to the wives of all insured persons and to the women workers who insure themselves.


That is an answer I hoped to get. I did not understand the right hon. Gentleman as insisting that it was for women workers only in certain conditions, and that the wives of the insured and the mothers who are not workers were going to be excluded. Let me say I assume that the advantage will also apply to workers in factories. I was extremely glad to hear from the right hon. Gentleman that he proposes to make special provision for soldiers and sailors. I was surprised to hear him speak of so many sailors being in distressful circumstances. But whether they be many or few, soldiers and sailors are most deserving people, and I hope the right hon. Gentleman or one of his colleagues will tell us if soldiers and sailors who are excluded from the compulsory provision are to be excluded altogether.


What the Government propose doing in that case is this: A soldier or a sailor may be a member of a Friendly Society before he joins the Army or Navy. He can continue. We deduct 2d. in this case instead of 4d., and the State will pay whatever is necessary in order to make it worth while for the friendly society to keep him when he leaves the Army or the Navy. We propose to pay what is absolutely necessary to induce them to take a soldier or a sailor on the same terms when he leaves the Army or the Navy as if he were a civilian paying his 4d. right throughout. Consequently he gets exactly the same benefit as a civilian. If he leaves the Army or the Navy a broken man he would get his 10s. a week sickness and his 5s. invalidity pay. He will get every benefit which the civilian gets if he leaves the Army a broken man and unable to pay anything. In those circumstances we treat him as if he were an ordinary civilian member of one of those insurance societies.


Would that be addition to any military or naval pension allowance?


Some of those will be excluded.


I think the solution is primâ facie satisfactory, and will put the soldier and the sailor in a position of independence in these matters. I heartily congratulate the right hon. Gentleman upon taking steps in this direction. I think for these purposes you may fairly ask for a contribution from the employer as well as from the employed and the State. I am not certain that in all cases the Government are quite right in the amount of contribution which they take, and I would like time to turn the question over in my mind. The point which puzzles me is the case of the employer employing people at small wages. Where the wages are 15s. per week or under the contribution of the workman is to be lowered, and by the amount which it is lowered the contribution of the employer will be raised. The right hon. Gentleman says this proposal will have the effect of causing those who get the benefit of low wages to pay that which the workman is unable to pay on account of those low wages. That presupposes that low wages are a benefit to employers. But are they? There may be particular cases where wages are improperly low, where somebody may make extravagant profits by sweating working men and working women; but if you take tradesmen generally who pay low wages they are not people who are making very large profits. Take the case of agricultural labourers. Are the employers of agricultural labourers getting an undue advantage as compared with the rest of the community by the payment of low wages? I do not think they are, and I do not think that proposition is generally true.

It often happens that a particular trade cannot afford to pay high wages. It does not follow that where you find wages are low that the profits of the employers are high in proportion. The right hon. Gentleman appears to have gone on the assumption that where a man pays low wages he derives a greater profit for himself, something more than the average, and therefore he can afford to pay more than the average contribution. I think the contrary is the case, and I believe it will be found that the basis of the calculations made by the right hon. Gentleman is not sound. The Chancellor of the Exchequer spoke of people who would derive benefits immediately. I understand that the Government have made arrangements under rather an elaborate scheme, which we shall see in the Bill, for admitting people at all ages. In the first instance, hereafter the temporary provisions will in the main lapse, and persons will be admitted at all ages up to 65. What will happen to people that are between sixty-five and seventy. You start your old age pensions at seventy without any contribution, but you leave a gap for the people between sixty-five and seventy. A very large proportion of these people would necessarily be entitled to an invalidity pension. I quite conceive that financially this is a very serious matter for the Chancellor of the Exchequer but I venture to say to him without knowing the figures or having any actuarial advice to guide me that he ought not at this stage to close his mind on this matter. After all, if he has calculated for an immediate surplus to wipe off all the extra debt incurred by taking on people above the normal age within the fifteen years, he has got something he can play with there without increasing the expenditure he has put forward. He might give part of his surplus to this particular subject. He might consider whether instead of making the period fifteen years in which to clear off the obligations incurred by the old people, he cannot extend the period to twenty years.


We could not do it. Nothing like it.


Perhaps the right hon. Gentleman will tell us more about it. I think these people will feel even a greater sense of hardship, and will feel it is very hard that nothing can be done to bridge them over the intervening five years. I think that is about all I wish to say upon this occasion. Speaking for my hon. Friends as well as for myself, we shall respond to the appeal made by the Chancellor of the Exchequer in the spirit in which it was made. We are delighted to see the attention of Parliament turned to this matter, and we feel that a subject so vast, so difficult, and touching such complicated matters requires the goodwill and assistance of all sections without regard to party, and this ought not to be made the subject of party strife.


I would like to commence my remarks by offering on behalf of my colleagues congratulations to the Chancellor of the Exchequer upon his return to this House. I can assure the right hon. Gentleman that there is no quarter of the House where his return— evidently restored to vigour and strength—is more welcome than on these benches. I would like to say a word upon the courage and enthusiasm with which he is pursuing this work of social reform of which it might be said the old age pensions scheme was the opening chapter. I would like to say that there are no men in this House who for the last thirty years have more consistently supported every effort which has been made by any party in this House to redress the balance which for so long has been against the poor in our modern civilisation. No hon. Members have more consistently supported all measures of that kind than the Irish Members. I entirely agree with the opening words of the right hon. Gentleman the Member for East Worcestershire. I think it would be impossible, and, indeed, it would be a bad compliment to the Chancellor of the Exchequer for anyone to attempt to deliver anything like a considered opinion with reference to this measure at the present moment. All one can do is to take a view of the general aspect of it. It is, on the face of it, a great and comprehensive measure, and it must be judged very largely after an examination of its details. With the objects the right hon. Gentleman has in view every portion of the House must sympathise. So far as we in Ireland are concerned, we have special reason to sympathise with objects of this kind. Ireland is a poor country. In Ireland there are more of the poor and of the very poor than in any other portion of the United Kingdom. Therefore Ireland stands in a special degree to benefit by measures of this kind if only they are so constructed and adapted as to suit the peculiar circumstances and conditions of Ireland.

I have risen merely for the purpose of entering a caveat. We in Ireland are in this position. It does not necessarily always follow that a great measure of social reform demanded by public opinion in England and suited to the needs of England is also suitable for the peculiar conditions and circumstances of Ireland. Our needs very often are different; our social circumstances very often are different, and our national resources, unfortunately, are very different from those of this country. Indeed, one of the grievances from which Ireland has suffered as a penalty for being tied up in one Government and as one financial unit with a great and prosperous country like this is that measures which have been called for in England and needed in England and suit- able for England have been very often imposed, or bestowed, if you like, upon Ireland without any adequate consideration whether the circumstances demanded precisely the same measures which were imposed. That might be said with some truth even of your most beneficent old age pension scheme. It certainly is true of every Budget proposed in this country in my belief for the last fifty years, every Budget from whichever side of the House it has come. The Chancellor of the Exchequer has always framed his Budget, naturally, from the consideration of the rich country, the country from which he was going to get most money. Constantly Budgets have been passed which, while admirable from the point of view of British interests, have not been suitable to the peculiar needs of Ireland. This, as I have said, is a great and comprehensive and complicated measure, and I would not dream—it would be presumptuous on my part—to discuss its details until I thoroughly understand them. While saying the Chancellor's speech was undoubtedly a most magnificent effort—as great an effort as I ever heard to explain a complicated measure—yet at the same time he will not misunderstand me when I say, even after listening to his most lucid explanation, I do not think any man ought rashly to criticise the terms of this Bill. I do not think one ought to criticise it, not only until he has seen, but until he has carefully studied every one of its details. Beyond, therefore, entering the caveat I have entered on behalf of Ireland, I will say little more than this: whether this Bill is suitable to Ireland will largely depend upon the details and machinery, and I for my part hope, when the Bill is printed, it will he taken into consideration and carefully studied by every public body in Ireland. We, for our part, would like fully and completely to consult public opinion in Ireland with reference to all its detail, and I hope, therefore, immediate steps will be taken by the public bodies in Ireland to consider its provisions.

I will only say this in conclusion. Speaking of it generally, it seems to me a noble and magnificent effort of the right hon. Gentleman to deal with the very worst of our social grievances. If there were nothing in this Bill at all except the medical provisions, except the health provisions, I would say the right hon. Gentleman, if he carries it will deserve the eternal gratitude of the poor people of this country. The provision for maternity is one of the most magnificent and merciful provisions ever proposed in any scheme in any country. The provision with reference to the terrible scourge of consumption, the provision of £1,500,000 capital to build sanatoria and the provision of £1,000,000 a year for the maintenance of these sanatoria are magnificent provisions, and, if they stood alone in the Bill, they would compel any man to say it was a great and noble measure. All I desired in rising at all was to enter my caveat as to the details relating to Ireland, and to say we cannot at this stage, and until we have carefully considered them, say whether these details, suitable though they may be to you, are suitable in every case to the different needs in Ireland. I was delighted to hear the reception given to the Bill by the late Chancellor of the Exchequer (Mr. Austen Chamberlain). I was delighted to hear from him the assurance that all parties in this House would co-operate in endeavouring to make this Bill a really successful measure and to place it on the Statute Book. In that spirit we will address ourselves to the consideration of this measure, and we will co-operate with the right hon. Gentleman, as I am sure he would co-operate with us in endeavouring to make it as suitable to the needs of Ireland as it is noble in its conception.


I desire first of all to join with the right hon. Gentleman who spoke from the Front Bench opposite (Mr. Austen Chamberlain) and with my hon. and learned Friend the Leader of the Irish party (Mr. John Redmond) in congratulating the Chancellor of the Exchequer upon his return to this House. Our congratulations are all the more hearty because, from the point of view of its length and of its vigour, his speech, to which we listened with so much delight, and which opened out so much hope, shows the Chancellor has not only returned, but has returned in a most excellent state of health. So far as the statement itself is concerned, I shall also follow their very good example. However one may have studied these subjects before, the presentation the Chancellor of the Exchequer has made of them is to a very large extent novel. We have had no inkling of his intentions and desires and proposals, and in one or two respects he has approached the problem from a new point of view, and down new avenues, and I think those who know the complexity of the problem best would be those who would be the very last to criticise the details of his speech. I therefore only desire to rise and say, that so far as the Labour party is concerned, we shall certainly co-operate with the Chancellor of the Exchequer in every way we can to make his scheme effective, and to make it productive of the good results which he himself desires. It is a very big thing, a very big thing indeed, not only big from the point of view of finance, but big from the point of view of consequences. It is only when one sits down and considers the enormous readjustment of our social relationships involved in the proposals to which we have listened, that one can visualise how big the whole thing is. It is very gratifying indeed to find the Chancellor of the Exchequer so bold and so hopeful and so energetic as to tackle this question, not in a small and niggling way, but in a large way. We may have to disagree with some of his details—we probably shall—but nevertheless we shall not disagree with him on this point. He has viewed the problem largely and as a whole, and has produced a scheme which touches it very generally all along its lines.

I would like to say the whole question of contributions ought to be very carefully considered, as I am sure it will be, when we see the scheme and have studied it, and when we shall have an opportunity of taking part in the Second Reading Debate. My impression I am bound to say—it is only an impression, and I certainly would not commit myself to it—is that the premiums are rather high, and that in particular the distribution between the workman, the employer, and the State should be a little more fairly adjusted. I may change my opinion when I see the scheme, but that is my impression, and I hope my right hon. Friend will very seriously consider whether the proposal he made to-day is the final proposal he is prepared to make when the Bill comes to Committee. Just let us take one point. I do not know whether my right hon. Friend had it in his mind, and, as his sickness and invalidity insurance comes into full operation, the burdens that are now imposed upon employers in respect of workmen's compensation would be very much diminished. The insurance premiums which they now have to pay in respect to employers' liability on the one hand and to workmen's compensation on the other will, if I am not mistaken, be very much diminished.




Because accidents are sickness. I quite admit what I have said with reference to employers' liability—


Accidents certainly will not be treated as sickness. Accidents are specially excluded. If I were to mention all the details of the Bill I should detain the House for hours. That is one of the details.


The fault I have made only shows how very futile it is for us to go into details to-day. I think no indication was given by my right hon. Friend in his speech that accidents were to be treated separately. I assumed the German experience was going to apply in this country. I am glad to hear it is not. That is the sort of general impression I have got at the present moment. I should like also to say this in respect to the trade unions. The trade unions want no privileges and no benefits under this scheme. I know perfectly well they have discussed it and have expressed opinions on the subject. They would be delighted to co-operate, but their character and nature as voluntary organisations, non-party organisations, as organisations that are defined by the Act of 1886, must not be modified and must not be changed by anything that is done by any relation between them and the State under this scheme. I feel certain my right hon. Friend has no intention of changing that relationship, but I think we had better understand it right away. The trade unions would be prepared to put at the disposal of the State all their experience and all their machinery. Those who have studied the German system know perfectly well one of the best securities, from the financial point of view, for good administration and from the point of view of getting exactly the kind of men you want to benefit is the machinery of the trade union movement. The German experiments have proved that over and over again, and, so far as the trade unions can help the Chancellor of the Exchequer in this country, I am sure they will be very delighted to do it, but the condition must be that in no respect is what is known as the voluntary and non-party character going to be influenced or changed by any proposals made. So far as the friendly societies are concerned, I think the statement is a perfect statement, but I just wanted to make it quite clear regarding the trade unions.

7.0 P.M.

Just one final word of a general character with reference to unemployment. The proposal that we once made about maintenance in connection with the Right to Work Bill can undoubtedly be met to a large extent by insurance, and so far we accept it, but I hope the Chancellor of the Exchequer will impose certain conditions upon these unemployment benefits. He has, I think, gone on the right lines, if I might say so respectfully, in differentiating trade from trade, or group of trades from group of trades. Within a trade the incidence of unemployment is heavier on certain tails of the working-class army than on the others, and if that particular part of the working-class forces which is more subject to unemployment than the other part is going to be insured at the same rate—and I think it ought to be—as the other portion, then I think the State is entitled to lay down certain conditions under which the unemployment benefits are going to be paid. I do not see why a condition of training, why some educational condition should not be imposed as a condition of receiving this benefit. It is a very interesting subject which might be worked out in very considerable details, and we may have something to say about it later on when we have seen the scheme. If the Chancellor of the Exchequer has not thought about it—he seems to have thought about so much in connection with this scheme that I hardly venture to suggest he has not thought about it—I think it would be worth his while to keep an open mind. After all, it would be an enormous gain to the State, and to these people themselves, if the period of unemployment, particularly if it is going to be a substantial and appreciable period, can be utilised, and, not merely that they should be paid a certain sum of money, but that they should report themselves twice a day to the Labour Exchanges or the trade unions. If the Chancellor of the Exchequer will turn his attention to that problem I think he will find it well worth notice. Taking the intention of the scheme and the ideas in the mind of the Chancellor of the Exchequer, so far as my colleagues are concerned we are very grateful indeed for its production, and we will do everything we can to make it efficient and complete.


Being the first to rise from below the Gangway, may I, on behalf of those who habitually sit here, add my welcome to the Chan- cellor of the Exchequer, and congratulate him on the vigour and strength which he has been enabled to expend this afternoon in describing his very interesting scheme. Each hon. Member who has followed that speech must feel, as I do, oppressed by the mass of detail in the scheme and by the immense and far-reaching effects of the scheme itself. There is a natural tendency, therefore, to keep off any criticism of detail. It is not my intention in the least to criticise the details, or even to raise any point which is a detailed point. I wish to consider whether the scheme of insurance is good or bad. I am going to ask the House to bear with me for a few moments while I try and get further information from the Chancellor of the Exchequer on matters which may be matters of detail, but which are, to my mind, absolutely important matters, and form the very backbone of the scheme.

I think I may express general welcome to a State-aided form of insurance, always provided, of course, that there is I no interference with the beneficent work done by the friendly societies. The hon. Member for Leicester (Mr. Ramsay Macdonald) has expressed himself satisfied with the manner in which trades unions are being treated, but with regard to friendly societies I am not so sure that that approval is so readily forthcoming. There are so many complicated provisions that, until one sees the Bill, it would be rash to say if the Chancellor of the Exchequer has managed to bring all these into line. The scheme is a compulsory scheme, and I am going to discuss it from that standpoint. I am not going to argue whether a compulsory or voluntary scheme would be better. I realise you cannot form an insurance fund which rests on the contribution of employers and workmen without such a scheme being compulsory. If you are going to have a general contributory scheme it is necessary it should be compulsory. The only compulsory scheme of which we have any experience is that tried at St. Gall, in Switzerland. It failed for two main reasons, first, because equal premiums were charged for unequal risks, and, second, because of the difficulty in collecting premiums from workmen who thought the scheme unjust and who would not pay willingly. An attempt was also made to introduce a compulsory scheme at Zurich, but the people threw it out on a referendum I do not suggest that the failure of the St. Gall scheme foredooms the Chancellor's scheme; the circum- stances are quite different, but we can nevertheless learn lessons from the St. Gall scheme. We have got over the difficulty of payments by the provision for deduction. I presume that applies to unemployment as well as to sickness.

There was one other difficulty, and that was the charging of equal premiums to all classes for unequal risks. If I understand the Chancellor of the Exchequer correctly I do not think he has entirely met that difficulty unless there is something which still remains to be unfolded and of which we have not at present heard a word. The scheme is rightly based on trade groups. It is the only way in which you can approximate risks. The whole scheme will comprise 2,500,000 men who are to be included in one fund. I am not sure if I understand that. What I am going to ask the Chancellor of the Exchequer to do is to consider whether he cannot give a greater approximation to fairness as between risk and risk by providing it out of more than one fund. We have some statistics not applicable, perhaps, to unskilled trades, but which will go to prove this point. In the engineering and shipbuilding and metal industries the average rate of unemployment in 1897 and 1906 was, say, 5 per cent. The Amalgamated Society of Engineers had an unemployment average of 3.70, the Ironfounders 6.54, and the Iromnoulders in the same group had during the same period an unemployed rate of 10.85 per cent. In other words, their rate of unemployment was two and a-half times as great as that of the Amalgamated Society of Engineers, and it seems to me it ought to be possible, instead of having one big fund for dealing with all these cases, to have several smaller funds approximating to the actual risks, and that would avoid the difficulty. That is one of the lessons we learn from the St. Gall compulsory scheme, which broke down because the people would not go on paying equal premiums for unequal risks. If you test this question in another way you will find a very considerable divergence in the risks. There was a report made by the Board of Trade embodied in a report of the Poor Law Commission which shows the different rates of unemployment at different ages in the Amalgamated Societies of Carpenters and Engineers. I dare say the Chancellor of the Exchequer has altered the benefit that is paid to those in the building trade and those in the engineering trade to meet to some extent the difference in the risk absolutely appertaining to those two callings. He may think the mere differentiation of benefit by ls. per week is sufficient to harmonise the difference between the actual risks. I do not agree.

I would like to turn to the contribution especially in regard to the unemployed part of the scheme. I know that in the present position of municipal and Imperial undertakings it is impossible to put any further burden on the municipalities. I hope that this will not be lost sight of. There are many good reasons why the municipalities should be brought into the unemployed scheme. There are reasons both financial and administrative. On the financial side we have this. That if a fund is established there will be a great saving to the poor rate and also a great saving to the municipality in the form of relief works. As the Labour Exchanges will be called upon to administer the Unemployed Fund there ought to be local committees, and if the municipality is directly interested in the management of the fund the municipality should be represented upon that local committee. The municipality can help the fund in many ways, for instance, by the co-operation of its educational authority, in a method which the President of the Board of Trade has set out in a circular recently issued. The education authority can help to give that secondary education, which must be a most useful adjunct in obtaining employment. There is a very excellent precedent for this in Norway. Two-thirds of the State-aid is refunded to the State authority by the municipality. I quite admit it is impossible in the present state of the apportionment of our municipal and Imperial burdens to ask the municipality to contribute, but it would be of much assistance in the administration of the scheme if the municipality did co-operate in the manner which has been suggested. Turning again to what, I am afraid, may be another detail I want to ask the Chancellor of the Exchequer whether he has considered carefully the question of a qualifying period and whether such a period is in the scheme-In regard to sickness I understand there is a qualifying period—that is to say, a member has to pay for a considerable period before he is entitled to draw benefit. The Chancellor, in dealing with the unemployment scheme, did not say whether a period of payment had to elapse before benefit was obtained. I do not know whether the President of the Board of Trade can say now whether there is to be a period during which a member must pay contribution to the unemployed fund before he can draw unemployed benefits. If so, perhaps the right hon. Gentleman would tell me whether there is such a provision in the scheme.

The PRESIDENT of the BOARD of TRADE (Mr. Buxton)

There is a period of six months.


I notice that in addition to that qualifying period there is another provision which operates in rather an extraordinary way. I understand that nobody is entitled to unemployed pay exceeding one-fifth of the contributions that he has made. That is to say, he can only have one week's unemployment pay for every five weeks which he has paid.


Every five contributions he has paid.


If we are to have a compulsory scheme and the Government have drawn up a scheme upon the lines that there is a necessity for compulsion, then I ask the right hon. Gentleman to consider carefully whether he is not stultifying his whole work by insisting upon this qualifying period. A qualifying period of this sort is in actual conflict with the principle of compulsion. Let me prove that. You are compelling a main to come and pay contributions to your fund. If he falls out of employment within the first few months—five or six months—you give him nothing. On the other hand, if he remains out, I presume his contributions are to be forfeited, and he is to have nothing. He is not protected, and after a time he has no further rights upon the fund. But your whole scheme is intended to compel that man to come in, and what you are in effect doing is to compel him to subscribe under compulsion to the benefits which will be received by others. If I understand rightly, a man has to contribute for seventy-five weeks before he can go on at any rate for his full fifteen weeks of benefit. In other words, he has to contribute for a year and a half before he will get his fifteen weeks' benefit. What happens? Supposing a man pays into your fund for some months and falls out of employment, he cannot come to you for unemployed benefit. You do not seem to make any provision for it, and he goes away, and you retain his contributions, and with these contributions you pay the man who is more fortunate and who survives the qualifying period but subsequently falls upon bad times and unemployment. I ask the right hon. Gentleman to consider that most carefully. I am a real friend of this scheme, and I am sure that a provision of that sort will cause much discontent and such a feeling of injustice that there will be unnecessary opposition to it on the part of those who may not be as friendly towards it as I am. I would therefore ask him to consider whether that qualifying period is not in actual conflict with the whole principle of compulsion.

These points which appear to be points, of detail are, in fact, the whole essence of the scheme. I observe that the right hon. Gentleman has also fixed a waiting period of seven days, that is to say, a workman has to be out of employment for seven days, even if qualified, before he is entitled to obtain any benefit out of the fund. In making a scheme of this sort I would suggest to the right hon. Gentleman that he should take into account the usual practice of trade unions, who are going apparently to pay the benefits in the particular trades affected. In only two of the trade unions, so far as I know, dealing with the workmen in the selected trades, is there a period so long as six days. In most of them the waiting period is for three days, or there is none at all. I can quite understand that it would add considerably to the expense of the scheme if there was no waiting period at all, but, at the same time, the right hon. Gentleman might consider what additional cost would be caused by reducing that waiting period to three days. It would certainly go a long way towards attaining the objects that he has in view of providing an effective insurance against damage done by loss of wages if he would do so. Again, with regard to the benefit, dealing only with the unemployed scheme, the scheme provides for a 7s. benefit, for fifteen weeks in the engineering trade and a 6s. benefit for a similar period in the building trade. Both as to the amount and as to the length of benefit you are falling a very long way below trades union practice. Let me call the right hon. Gentleman's attention to the ironfounders, which is one of those trade unions which has a very large rate of unemployed. The ironfounders pay 10s. a week as against the Government's 7s. for the first thirteen weeks as against fifteen weeks. For the second thirteen weeks 8s., for the third 6s., and for the fourth thirteen weeks 5s. Of course, I quite agree that it would be quite impossible for the Government to emulate the very best benefits given by any trade unions.


Will the hon. Gentleman tell us what the premium is in that same trade?


I do not know.


May I say that in that society they have been paying 2s. 6d. a week, and they have been for two years.


I do not suggest for a moment that the Government scheme could imitate the best benefits of the trade unions. I realise that as well as the hon. Member does; but what I want to do is to explain the benefits which the people in the trade unions have. You have to get them to come in and to induce them to accept the Government aid which is going to be given, and I am quite aware that the bigger the benefit the more they have to pay. But what we have to consider is whether we can give a sufficiency, because it is no good having an insurance scheme at all unless you enable a man to tide over. It is no good giving him such a small sum that he is unable to go on until he gets into work. Such a scheme as that is a sham, and it is unnecessary to go to all the trouble and expense of setting it up. It is therefore necessary that the benefit should be of such a size that it should have some sort of relation to the average benefit given by well-conducted trade unions whose rates are not too high. I am sure the hon. Gentleman will be content with that limitation. The right hon. Gentleman was very candid in saying that the financial cost of this operation could not, in fact, be estimated, and unless he has later information than that which has been published one realises that it must be extremely difficult even to make a guess at the cost.

The Poor Law Commission referred the question to three actuaries, upon a different basis it is true, but upon a basis which did require precisely the same class of information as is required now in order to get any reliable estimate of the cost of the present scheme. Two of those actuaries, Mr. Acland and Mr. Neilson, reported frankly that there were no data, or no sufficient data, to enable them to make an estimate. Mr. King, another of the actuaries, was more enterprising, but he found that the data were very scanty, and that he could not make a real valuation of the risks, but he did give some indication upon various assumptions of fact which he, of course, very properly pointed out were not in fact proved. If the right hon. Gentleman's estimate of the cost is based upon that data, he did not overstate it when he said that it was impossible to make any reliable estimate, but he did seem to suggest that he had saved himself in that by saying that there will be provision made for reduction of benefit or an increase of the levy in the event of the scheme not proving itself financially possible. I want to ask him how it is possible for a Government which has taken money from various workmen upon a statement that they will get such and such benefits for such and such periods at a later date to go to those workmen and say, "We cannot give you those benefits; either your contributions have to be increased or the benefits have got to be reduced." It is impossible to do that, and I think when we are entering on this scheme it is better to look the matter frankly in the face, and admit that once you have started it you cannot reduce the benefit or increase the premiums.

You could not reduce the benefit any more than any Government could suggest the reduction of any benefit which they had conferred, such as old age pensions. There is one other point I would like to deal with, and that arises out of something the hon. Member for Leicester said. He appeared to think that the employer was going to be relieved of some portion of the expense of accident insurance, and the Chancellor of the Exchequer said that accident insurance was not touched at all. I want to know whether any provisions have been made, or whether he proposes any provisions for the case of the workman who has suffered an accident and who has obtained compensation under the Workmen's Compensation Act. Is any provision going to be made for him so that the fund which is handed over at that time is used providently and so as to prevent it being spent improvidently and badly, thus causing that workman to make an invalidity claim upon the Government. There are similarly great possibilities of overlapping between cases of sickness and unemployment. If you have a limited period of benefit there is a great tempta- tion to claim from the Sickness and Unemployment Fund for a certain period within the period of benefit. With regard to premiums, I understand that the subscription to the sick fund is to be suspended for three weeks if the workman is out of employment.

I understood the Chancellor of the Exchequer to say that during the time a workman insured in the fund was sick his premium was to be suspended, and he was not to pay, but during the time he was out of employment he was only to have it suspended for three weeks. It seems to me that that is quite an inadequate period, because it may easily happen that he would lose the whole of the contributions that he had paid to the Sick Fund by reason of his being out of employment for a very little over three or four weeks. We are about to take a really great step forward in social reform, a step which all of us want to see taken; but whether we succeed in extending the benefits which are now given by the voluntary institutions to a larger class or whether we stifle, or at least weaken, their efforts depends in my view, not upon our willingness, but upon the actual details of the scheme which is ultimately adopted. In my view, no care, no trouble, no time is too great to give to seeing that those details are carefully and thoughtfully regulated. We shall get, of course, other opportunities, and there are many points of this scheme which cannot be considered except with regard to the actual details of the Bill, and I feel sure the Chancellor can rely upon all help from those of us who have been endeavouring to study this matter.


I rejoice to hear the hon. Member as the spokesman for the Conservative Socialists of the House express unqualified approval of the Bill. But, as one might have expected, he suggested that the benefits should be extended, and that some of the safeguards should be withdrawn. It is one of the spectacles with which we are becoming more and more familiar in this House that the Socialists among the party opposite come forward and invariably wish to pose as the friends of the recipients of public benefit. I regret that some of the leaders of the different groups who have spoken seem to think that no one is able to discuss the question on this day. I entirely demur to that suggestion. I do not know for what the Chancellor of the Exchequer introduced it today unless we were to discuss it freely. I say with regret, as one of the deepest admirers of the Chancellor of the Exchequer in the House, that in some particulars he was wrong in his facts, and in some others the outline he gave of the machinery was entirely unsuitable to the object he has in view. I do not know that I should be playing the part of a friend to the scheme, or a friend of the Government, if I did not at once utter a note or two of warning. It is all very well for hon. Members to think we are a happy family party, and that from all parts they are going to support this scheme. Hon. Members in a few weeks will see the bands begin to play. There will be great consternation in the country, and it is a quite erroneous view to think that for very long hon. Members opposite will allow this to be treated as a non-party question. I only hope they will, and that they will preserve the attitude they have shown to-day, but I have very little faith in it. This Bill ought to have a considerable amount of careful thought and scrutiny. That cannot be given if it is hurried. To my mind it consists of two Bills, and I think the Chancellor of the Exchequer would have been better advised if he had divided it, or would consent at a later stage to divide it, into two parts. For the life of me I cannot see the necessary connection between the part dealing with unemployment, and that dealing with sickness and invalidity. One is universal and the other is partial. One has to be administered in one way, and the other in an entirely different way, and I fail to see how Members of this House can do justice to this subject unless for our own convenience there is a division of that kind made. I will in due course put my view in the form of a notice upon the Paper. When I take that action, and make this criticism, I do not make it in a hostile spirit, or as one who has any desire to see the scheme fall through. I want to make it strong where it is weak, and I want some corrections to he made where necessary.

To begin with, I do not think it distinguishes sufficiently between town and country. The amount of 5s. a week in rural districts, where things are very cheap, is one matter, but it is a totally different thing in the city of London. There are some aspects of this Bill where' that will have to be taken into account. Money has not all the same relative value. In fact, the whole position is so complex, and has so many sides, that I sincerely hope no one in his wildest dreams will ever propose that a Bill of this kind should be submitted in a Referendum to the country. I cannot conceive a greater condemnation of that idea than that hon. Members opposite should dare to suggest that a measure of this kind should be settled by a public vote. This is the most important measure that probably any one of us will see introduced into the House. Hon. Members all agree with that, but they repudiate the idea that this most important Bill, all the effects of which will penetrate into every house and almost into every room, should be subject to the new fangled idea of the Refendum. The unemployment portion was dealt with rather briefly by the Chancellor of the Exchequer, but there was one pitfall against which I must warn him. He stated that this Bill would not apply in the case of strikes and lockouts. But I want to ask whether those workmen who indirectly suffer through a strike or a lockout are to come under the provisions of the Bill?

You very often find that when there is a strike or a lockout in one trade, that throws a number of innocent workmen out of employment. I should like to know whether the Bill is to apply to them. It seems to me that a very great injustice will be done unless it does, and therefore in looking at the scope and the expense of the Bill it will be a false view to take that it was not influenced at all by strikes and lockouts. One of the main factors which would influence expenditure under this provision would be the indirect or innocent sufferers from a particular strike or lockout. Nowadays men hesitate to go out on strike because others in a different trade entirely would lose their occupation if they did. Again and again we see unions who believe they have a perfectly right cause restraining their men from a strike or urging them to go to work on terms which they think scarcely suitable, because it will throw large numbers of men out of employment through no fault of their own who have not taken part in the dispute. But in future, if these men who are hit and are perfectly innocent are to be kept by the State under the Unemployment Insurance Scheme the unions will be a little more vigorous in their strikes or the masters will be a little less scrupulous when they lock out the men. I put these considerations before those in charge of the Bill.

I further foresee, unless an Amendment is made in some of these provisions, great conflicts between trade unions and the Government. The suggestion is that the trade unions should pay to their own members an amount when they are unemployed and afterwards they are to look to the Government to reimburse it. That is the scheme as put before us to-day. But it may easily be that the trade unions will have a little difficulty in recovering the payment from the Exchequer, and if the Chancellor criticises the payment I see there is a prospect of endless conflict. I submit that, the machinery there will want very careful adjustment, otherwise we shall have industrial struggles and strikes of a character that we have not had up to the present time. I am sure the last thing one would wish to be the outcome of the Bill is an increase in troubles of that kind. The Chancellor of the Exchequer, in his speech, went over a certain amount of round that I feel it my duty to cover.

We must recognise the vast difference between our position and that of Germany. In Germany everyone looks to the State for relief. The people are taught to look to the Central Office for guidance. They worship the bureaucratic system in a way that we do not and in many ways an attempt to engraft upon the English people who are full of individuality and who have a great deal of character and personal oddity, if you like, will not succeed. We in this country like to break rules and to go our own way, and I am not at all sure that under the scheme of this Bill the Government will find that sort of universal acceptance of the rules and the conditions, or that obedience to all the orders which come down from Whitehall into the country places. In Germany the position was clear. You had a very iron-handed Bismarck, a man of blood and iron. He cared nothing for the people's liberty, nor for any philosophy or theory of any kind. In fact, when he was establishing this scheme he invoked the great name of Christianity and pretended that that was his initial motive. Anything more hypocritical there could not possibly be. What was there Christian about the character or the career of Bismarck? While he was mouthing phrases of that kind and putting them in the shape of a message from the Emperor to the German Parliament he was conducting his manœuvres with the reptile Press, as he called it. He introduced the German scheme in order that he might put practical Christianity through the German nation as a protection against the Socialists. That was his clear and avowed object.

In this country the ground is covered. There are industrial insurance companies which retail insurance throughout the country, delivering it from door to door. There are also friendly societies who have a great variety of posts for their men to fill. There was nothing in the opening statement to-day that convinced the House that in every way, wherever the Bill proposes to go, it is the right province of the State. I have no doubt the Noble Lord (Lord Hugh Cecil) will enlighten the House upon this particlar point. If any one knows exactly where the State ought to stop it is the Noble Lord: I am a little afraid that in one or two aspects of this Bill the State is going a little needlessly into the domain of private enterprise. Our ground is covered by these agencies, am not convinced that the provisions in the Bill will deal with the question of malingering. I put my finger upon this because it is the greatest problem of the whole situation. The idea was thrown out that if the limit was made two-thirds of the wages there was a security against malingering. I am not able to believe that. My knowledge and experience of the dangers and difficulties of this question tell me that that is not a sufficient safeguard. It is all very well to say that under a system of rewards and bonuses, a half of a certain surplus being given to a local branch and half to a head office, these men will be induced to administer rightly. I am not convinced of that. These men come up for election and are voted upon. The scheme insists that they shall be committee men of all those lodges and elected popularly. You may be perfectly sure that when a certain amount is coming from the State and a certain amount from the employers, they will be sure to select those men to administer the fund who are most liberal in their promises. I am not at all clear that the men appointed to administer the fund will seek the reward of the bonus. When a man has to balance in his mind whether it will pay him to go to work or to stay at home, we reach the danger point. I am afraid some of these proposals reach that danger point. I submit that we ought not to put any working man in the position of pondering whether it will pay him to go to work, or pretend to be ill or unemployed. I do not at all see the safeguards which I wish to see in the Bill. It may be that during the discussion in the House some Member will be able to suggest safeguards and get them inserted.

The next point is that these men are to judge upon the valuations so that a certain amount of the funds of the friendly societies will be set free. The existing friendly societies have certain definite objects. Under this Bill it is proposed to meet a great deal of the claim now made upon them and therefore their funds will be to that extent free. The Chancellor of the Exchequer saw that danger and he says they will not be allowed to divide the money or apportion it to any scheme except this. That means an element of State intervention in friendly societies, and I utter a warning note to those connected with friendly societies that if they once submit to State interference and guidance in the way proposed, it is only a question of time when their business will be taken over entirely by the State, and they will cease to be voluntary institutions. It only needs two steps to carry that out. It may be wise to do that. That is not the question I am discussing now. I am pointing out the danger, and those who are interested in friendly societies should examine the proposals very carefully from that point of view. We must be on our guard. It may be that State help will be attractive to their head offices and to their chief men, but if that State help should afterwards be made the stepping-stone to State direction and control, it seems to me that the fabric will fall to the ground.

I am not at all sure that the method for the distribution of benefits under the scheme is the right one. This is a scheme of State socialism. There is no doubt about that. The State is to look after these people as well as it possibly can. I am not saying that the State should not concern itself about the health and the welfare of the poor. I am glad it does. At the same time I want to warn the House that those friendly societies—that fabric which was built up in this country and in no other—are a great heritage, and must not be lightly disturbed. It may be that in State insurance some other way will be found, but I should have thought that this piecemeal method of distributing the funds is not the best. I know the difficulty. The Chancellor of the Exchequer knows it too. If the scheme were hostile to the friendly societies the Government would be doomed. Hon. Members are only too anxious to get the voting power at election times that happens to be in these friendly societies. None of us can afford to do any injury to them, and I hope none of us wish to do any injury to them. At the same time I would ask whether the way proposed is the best way of distributing the fund? The Chancellor of the Exchequer made a mistake in assuming that if a man is not in a friendly society it is because he is a non-insurable life. There are men with what we might call in this House cross-bench minds—men who do not like any friendly society, and who object to be a member of any society. They are outside of these societies. They may be called strange beings, but they exist in. large numbers. Many have to make the choice whether they will go into large societies like the Prudential or into insurance companies, and I say that a large number of those men whom the Chancellor of the Exchequer has described as uninsurable lives, because they are not in friendly societies are men whose lives have all been "passed" for membership of concerns where the examination is stricter. These outsiders are to be dealt with in certain ways. Their contributions are to be collected in one way, and the benefits are to be distributed in some other way.

The men who have to go to the Post Office are in rather an invidious position except in one matter where they have the advantage. They are to be nondescripts. They are men who the friendly societies think quarrelsome. Of course, in an insurance company you never ask whether a man is quarrelsome or not; you ask what kind of life he is. The man who is rather an outsider or a free lance appeals to me, and I do not hesitate to say that the man who does not enter any order or any industrial insurance company at all, but prefers to go his own way is entitled to full consideration. If a man falls out of benefit he gets extra benefit. It is a sort of tontine system, and, so far from being deterred from going into the Post Office system, I think many men will be attracted to it, because occasionally they will get their benefits increased by other men falling out. I am afraid it would be so in this case. That seems to me to be a weakness in the scheme.

Mention was also made of the unregistered societies. Some of these men are excommunicated from societies, and they are in small sick societies or dividing societies which hold their meetings at works or in public houses. They are sometimes called slate clubs, and they exist in great abundance. Many of the men who are not in regular friendly societies choose these other forms to invest their money. There have been all kinds of friendly societies from time immemorial of one kind or another. The Chancellor of the Exchequer thought they commenced with the Roman slaves. They did nothing of the kind. The earliest secret and benefit societies in the world undoubtedly were in China. The Chinese, thousands of years before we called ourselves civilised, were ahead of us in these particulars. I remember a Chinaman explaining to me that they had kinds of insurance when we were entertaining the Druids or going about as naked savages in this country. The Chinaman thought that was why some people in this country thought that under Tariff Reform the foreigner would pay the taxes. There was no other explanation occurred to his mind. Therefore I must remind hon. Members that this question has existed more or less from time immemorial. Why? Because human nature is varied, because it is different in every house, street, and clime. I am afraid that there is not sufficient variety and latitude in the scheme as put before us to-day.

As to the county health committees, the right hon. Gentleman seems there to be setting up a new authority in Local Government. I am not at all sure that it will be welcome, and I feel perfectly certain that it will not work. Do those Members of this House who have had experience in local administration welcome the suggestion of county health committees? What are they to do? Is the county health committee of London to attempt to dictate to the county council? I can imagine the consternation at Spring Gardens if that course is taken. Take Lancashire or the West Riding of Yorkshire. Is dictation to the county council to be possible there on the part of the county health committee, constituted of one-third from the contributors, one-third from the friendly societies, and one-third from the Post Office contingent, to whom a further number are to be added as nominees of the State? I feel certain it will not work at all. It does not seem to me to be an integral part of the scheme. I do not see the necessity for getting into comflict with the men who administer public affairs in the different localities of the country. The Bill does enough in these matters. It deals with matters which have nothing to do with insurance. Insurance is a topic which men of the most distinguished ability in this House can hardly speak upon when they rise to address us. Insurance does not include the provision of sanatoria and the treatment of diseases.

8.0 P.M. There is no reason in the world why the Government should wish to fight disease and death in the way proposed under this scheme. What connection these proposals have with the subject of insurance I fail to see. It may be that the right hon. Gentleman prefers to draw money for these beneficent purposes from these funds, but why? Whether the money is drawn from these funds or the regular Budget does not seem to matter. If he draws these funds from the Budget, I presume the House will vote the money. If he draws the money from these funds, he will have to replace it by a State contribution. It does not seem to me that there is any need for taking such a course. I will wait for the Second Reading of the Bill for more information, but at present I am not convinced that it was necessary to introduce these things into this scheme. It is a mistake to model this upon Germanideas. I do not understand in the least why we should be everlastingly going to Germany. What can Germany teach us? I do not know. It seems to teach hon. Members opposite Tariff Reform. But it cannot teach us anything of insurance. It may teach us what to avoid. The Chancellor of the Exchequer, in framing his industrial insurance scheme, has evidently gone to Germany, not so much for example as for the knowledge of what to avoid. The Labour party sent one of its most distinguished Members to examine the State National Insurance scheme. I do not know whether they sent him to criticise it or expected him to come back like one of the spies of old with a favourable report, but the hon. Member came back and made some very pointed remarks, and I understand he is hot prepared to retreat from them now.

I feel it necessary to put before the House the hon. Member's decision upon this point, because it is rather interesting coming from such a source. I believe that the hon. Member for West Ham (Mr. W. Thorne) is an avowed Socialist, and he puts down these very remarkable words: "During my visit to Germany I found the workpeople made general complaints about the administration of the old age and invalidity scheme. It is urged that it lacked uniformity"—though uniformity is what the party of the hon. Member is always asking for—"and that the schemes were too costly, and it was claimed that the schemes carried on by workpeople among themselves can be taken as a model as far as administration was concerned, and were far less costly when in opera- tion." There is an examination by a shrewd Socialist, who goes there and says that if this were done on a voluntary basis it would be done much more cheaply. That is a very remarkable dictum. He also said that there was great dissatisfaction throughout the country at the cost. On that point I will not wait for several weeks until leading articles have appeared in the Press and told exactly what people's views should be. I trust hon. Members as well as myself can form their own judgment, without waiting for the Press to appear to-morrow, or without waiting for the leading articles, and I say with all humility, but with a certain amount of confidence, because of my experience, that the amount set aside in this Bill is not anything like sufficient. As for talking about surpluses being divided in the future I am perfectly certain that we will be face to face with a serious deficit. It is all very well for the Chancellor of the Exchequer to say that he has been guided by expert actuaries. I know he has. I know who the gentlemen are, and there are other actuaries in this country, and they will set to work on this Bill soon after it is printed. But neither the actuaries who have assisted the Chancellor of the Exchequer nor the actuaries who will advise the interests concerned can go upon anything except data. It all depends on what are the particulars with which you supply them.

With regard to unemployment you could have no particulars. You can only make a guess. There are no particulars which would justify him in bringing any figures forward in a Bill like this except as a mere guess, and I say with confidence that neither the Board of Trade nor anyone else has published any figures which are at all a guide. It was found that the figures put forward when the Workmen's Compensation Act was passed were entirely illusory, and there was not a company but lost money, as statistics of this kind alter every year. If you begin to give large benefits do you not think that the percentage of unemployment will go up? Do you think that the very fragmentary figures with which the experts have solaced themselves in these calculations will be reliable in the future? I say quite confidently they will not; and time will prove who is right. The statistics upon these questions vary from year to year, and I submit particularly as to unemployment there are not the data to go upon. It is said some figures have been got by these actuaries from certain orders and friendly societies and trade unions who give unemployed benefits, but in every one of these cases there is a selection. You get model people or ideal people into these various organisations, as compared with many of those who stay out. The people who stay out are the erratic individuals who work when they want and play when they want, and who will do so under this Bill; and this has not been provided for. Whether you examine the invalidity and sickness statistics or unemployment statistics I say without any hesitation whatever there are not sufficient data for the figures that have been read out to-day.

Who is there that has had experience It is all very well to talk about statistics being put before actuaries. Where have they been obtained from. I submit that they are not anywhere in the world. Much less are they in the possession of the Gentlemen who sit upon the Front Bench; and I am prepared to make this challenge if they have figures which they say guide and justify them in accepting the estimates on which this Bill is based, then those figures ought to be at the service of the hon. Members of this House. Ever since the House met I have been trying to extract a little information about this scheme. I have been referred from the Treasury to the Board of Trade, and from the Board of Trade to the Treasury, and I raised the matter even on adjournment, but I could not make any progress. Hon. Members of all parties in the House have come to me and sympathised with me in my futile search for information. But when right hon. Gentlemen on the Front Bench indicate that they have got these magical statistics in their possession, then I call for them to be produced. Even the system of very small contributions opened up under this Bill to all trades and all classes of people will produce a state of things which no one can foresee. But what is perfectly certain is that it will cost a great deal of money. There is no use blinking the fact. It may be worth it. The Chancellor of the Exchequer made a noble speech, and if we respond to his appeal we must be prepared to pay.

I am not one of those who will vote for a scheme because I think it is beneficent, and at the same time try to deceive the public and the ratepayers generally into thinking that it will be a very cheap scheme when the scheme will not be cheap. The millions that will be wanted I am afraid are considerably beyond the ideas of those who have framed this measure. I therefore felt it my duty, not as an opponent of this measure or of this Government—I think hon. Members opposite will give me the credit of being able to stand by my party—but in the spirit of the progress and success of this measure when it comes to operate in the country, to make these observations. It will cost a great deal of money. The scheme will need great rearrangement in all its mechanical parts. I say frankly it will not work as it has been put before the House to-day. It could not be expected of the scheme which has been put before the House. The money is not sufficient; the machinery is not clear enough; there is overlapping, and I am afraid it will need very exhaustive examination. That leads me to my concluding appeal, that this Bill ought not to be hurried forward. We ought to be able to consult our constituents about it; the traders of the country, and the workmen of the country ought to meet, and the finest financial and surest experts in the world must have ample time to deal with this. I am anxious to support this measure, but I venture to say that if any attempt is made to rush it, forward without consideration, and not allow a very considerable amount of time for it to be discussed, very reluctantly indeed, and with very great pain and regret, I shall be forced into a position of semi-hostility.


I may begin the few remarks which I have to make by offering my cordial and unqualified support to the general principle of the Bill. I agree with the hon. Member for Leicester (Mr. Ramsay Macdonald) that it is impossible at the present stage to attempt a detailed criticism of the Bill; but so far as the object which the Bill has in view and the general principles on which it is based are concerned I am sure that, with a few isolated exceptions, the Chancellor of the Exchequer may rely on practical unanimity of support from all quarters of this House. In the first place I would join in the appeal which is made by my right hon. Friend the Member for East Worcestershire (Mr. Austen Chamberlain) that this Bill should be divided into two parts, because, after all it does not require a very deep knowledge of these two great problems to realise that they are absolutely distinct in character and in no sense interdependent. There was a time when economists used to discuss the effect of sickness upon unemployment and the effect of unemployment upon sickness. It was a subject of considerable argument, discussion, and thesis. But recent investigation at the time of the Poor Law Commission revealed the fact from an examination of the registers of friendly societies and distress committees in this country that sickness was, comparatively speaking, not an operative cause of unemployment, and if my memory serves me properly they discovered that of the applicants who came upon the registers of the various distress committees something under 3 per cent., about 2.6 per cent., ascribed their state of unemployment to considerations of sickness and of health. Take the converse proposition—how far unemployment is a cause of sickness in this country.

I think we cannot do better than turn to certain figures which were recently published with regard to the three great friendly societies of this country—the Manchester Unity, the Foresters, and the Hearts of Oak—which show that those three societies paid out more in sick benefit during years of trade prosperity than they did during two years of trade depression. In 1893, which was a year of depression, those three societies paid out a sum of 17s. 0½d. per head in sick benefit. In a year of trade prosperity, 1900, they paid a sum of 18s. 6¾d., and in the year 1903, which was also a year of trade depression, they paid the sum of 18s. 1d. I think that those two sets of figures go to show that there is no practical connection between sickness and unemployment, that they are two distinct matters and that for the convenience of this House they would be better dealt with in two separate Bills.

And, it being a quarter past Eight of the clock, and there being Private Business set down by direction of the Chairman of Ways and Means, under Standing Order No. 8, further Proceeding was postponed without Question put.