NATIONAL HEALTH INSURANCE BILL.

THURSDAY, 30th JUNE, 1921.

615

The Committee consisted of the following Members:

Sir William Pearce (Chairman)

Adamson, Mr. (Fife, Western)

*Allen, Lieut. - Colonel Sir William (Armagh, North)

Ashley, Lieut. - Colonel (Lancaster, Fylde)

Barker, Major (York, W. R., Sowerby)

Barton, Sir William (Oldham)

Beckett, Mr. (York, N. R., Scarborough and Whitby)

Bell, Lieut.-Colonel (Wilts, Devizes)

Benn, Captain Wedgwood (Leith)

Bird, Sir William (West Sussex, Chichester)

Blades, Captain Sir Rowland (Surrey, Epsom)

Blane, Mr. (Leicester, South)

Bowerman, Mr. (Deptford)

Brittain, Sir Harry (Middlesex, Acton)

Britton, Mr. (Bristol, East)

Broad, Mr. (Derby, Clay Cross)

Bromfield, Mr. (Stafford, Leek)

Buchanan, Lieut. - Colonel (Lanark, Coatbridge)

Cairns, Mr. (Morpeth)

Churchman, Sir A. (East Suffolk, Woodbridge)

Cobb, Sir Cyril (Fulham, West)

Cockerill, Brigadier - General (Surrey, Reigate)

Cowan, Mr. (Scottish Universities)

Davies, Mr. Evan (Monmouth, Ebbw Vale)

*Davies, Mr. Thomas (Gloucester, Cirencester and Tewkesbury)

*Finney, Mr. (Stoke-on-Trent, Burslem)

*Greig, Colonel Sir James (Renfrew, Western)

Guest, Major Oscar (Leicester, Loughborough)

Hayday, Mr. (Nottingham, West)

Hilder, Lieut.-Colonel (Essex, South-Eastern)

Hotchkin, Captain (Parts of Lindsey, Horncastle)

Howard, Major (West Suffolk, Sudbury)

*Jones, Sir Edgar (Merthyr Tydvil, Merthyr)

Jones, Mr. John (West Ham, Silvertown)

Kennedy, Mr. (Kirkcaldy District Burghs)

Lawson, Mr. (Durham, Chester-le-Street)

Lister, Sir Ashton (Gloucester, Stroud)

Loseby, Captain (Bradford, East)

Lowther, Major Christopher (Cumberland, Northern)

Mills, Mr. (Kent, Dartford)

*Mond, Sir Alfred (Swansea, West)

Newman, Sir Robert (Exeter)

Perkins, Mr. (Hants, New Forest and Christchurch)

Pickering, Lieut.-Colonel (Dewsbury)

Ramsden, Mr. (York, W. R., Elland)

Rankin, Captain (Liverpool, East Toxteth)

Rees, Captain Tudor (Devon, Barnstaple)

*Richardson, Mr. Robert (Durham, Houghton-le-Spring)

Robertson, Mr. John (Lanark, Bothwell)

Simm, Mr. (Wallsend)

Stanton, Mr. (Merthyr Tydvil, Aberdare)

Steel, Major (Kent, Ashford)

Stephenson, Lieut.-Colonel (Sheffield, Park)

*Warren, Sir Alfred (Edmonton)

Weston, Colonel (Westmorland)

Wheler, Major (Kent, Faversham)

White, Mr. Charles (Derby, Western)

Wills, Lieut.-Colonel Sir Gilbert (Somerset, Weston-super-Mare)

*Williams, Colonel Penry (Middlesbrough, East)

*Wood, Sir Kingsley (Woolwich, West)

Worsfold, Dr. (Surrey, Mitcham)

* Added in respect of the National Health Insurance Bill.

Committee Clerks.MR. WILLIAMS.

Committee Clerks.MR. DENT.

616
617 STANDING COMMITTEE C Thursday, 30th June, 1921.

[Sir WILLIAM PEARCE in the Chair.]

NATIONAL HEALTH INSURANCE BILL.
[OFFICIAL REPORT.] CLAUSE 1.
—(Amendment of financial provisions.)

(1) The sum to be retained by the Minister of Health under subsection (3) of section fifty-five of the National Insurance Act, 1911, out of each weekly contribution shall, in the case of an insured person being a man, be twopence and two-ninths of a penny instead of twopence and one-third of a penny, and, in the case of an insured person being a woman, be one penny and four-fifths of a penny instead of one penny and eleven-twelfths of a penny.

(2) The amount to be carried to the Contingencies Fund and the Central Fund under subsection (2) of section one of the National Health Insurance Act, 1918, shall be calculated as if in the First Schedule to that Act the words "in the case of a man five-ninths of a penny and in the case of a woman two-fifths of a penny" were substituted for the words "in the case of a man two-thirds of a penny and in the case of a woman one half penny."

(3) If provision is made by regulations under the proviso to subsection (2) of section one of the National Health Insurance Act, 1918, for decreasing the amounts to be carried to the Central Fund in such manner that those amounts will be less than one-eighth of the aggregate amounts to be carried to the Contingencies Fund and the Central Fund, the sum which under subsection (1) of section four of the said Act is to be carried to the Central Fund out of moneys provided by Parliament shall be reduced to an amount which bears the same proportion to one hundred and fifty thousand pounds as the said decreased amounts bear to one-eighth of the said aggregate amounts.

Lieut.-Colonel Sir ALFRED WARREN: I beg to move, in Sub-section (2), to leave out the words "two-thirds," and to insert instead thereof the words "three-fourths." I move this Amendment for the purpose of raising a question in respect of the administration allowance. The Committee 618 will observe that in the Memorandum of the Bill its objects are set out, and the first is that under Sub-sections (1) and (2) of Clause 1 the administration allowance for approved societies shall be increased from 4s. 5d. to 4s. 10d. per member per annum. I am taking this action in the interests of the approved societies. The Minister must have been inundated with statements as to the perilous position of many of the approved societies, owing to the inadequacy of the administration allowance. It will be within the recollection of many that in the early days of National Health Insurance it was assumed that 4s. per person per annum would be a proper allowance for administration. As a matter of fact, that 4s. never materialised, and 3s. 5d. was the sum actually paid to approved societies in this respect. Then came the calamitous War, during the period of which, in relation to millions of members of approved societies, the allowance was cut down to one-half, namely, 1s. 8½d. Then came economic conditions which no one could control, not even the approved societies themselves and the allowance was made up to 4s. 5d. Since then there were further representations made to the Ministry; numberless deputations were received, and in the final resort the Minister appointed a Departmental Committee to consider the administration allowance. On 9th May they reported their findings to Parliament. They recommended that the sum should be 4s. 10d. The Minister will agree with me that all along the contention has been that the amount should be 5s. at the very minimum. The Committee, however, gave it as their opinion that the amount of 4s. 5d. should only be increased by 5d. Since the report of that Committee was presented the Postmaster-General has recommended a material increase in the postage rates throughout the country. This will have a very serious effect upon approved societies, and although the proposal in the Bill is that the amount shall be 4s. 10d. at the very utmost, the societies can only actually receive 4s. 8d., because, cutting it as finely as possible, the increased postal rates to approved societies will represent, at the very least, an additional 2d. per insured person per annum. I wish the Committee to understand that in all these circumstances, the approved societies are in very great difficulties. I do not think it has been quite creditable to us as a Parliament that, in 619 regard to the approved societies administering National Health Insurance, there has been such inadequacy of payment as to cause very deep feeling and almost revolt. The approved societies have never been in the same position as the medical practitioners of the country. The latter have gone from time to time to the Ministry, made their demands, and enforced those demands, even to the extent of saying that if they saw fit to do so, they would withhold their services. Their demands have been more or less acceded to, but in the case of approved societies, for all these years that the National Health Insurance Act has been in operation, they have been struggling with great difficulties. There are members of this Committee who have some practical knowledge of the approved societies and their difficulties and of the parsimonious, cheeseparing way in which hundreds of men who have made National Health Insurance their whole-time occupation have been paid. I am raising the question before this Committee in the hope that the Minister will make some favourable declaration, having regard to the fact that since the recommendation of the Committee at least 2d. of the proposed increase of 5d. has gone owing to the proposals of the Postmaster-General. I do not know that I can hope for any great success, but I make this appeal on behalf of the approved societies.

The CHAIRMAN: I do not think the Amendment of the hon. and gallant Gentleman is in order. The discussion, I think, had better be raised on the question "That the Clause stand part of the Bill." The hon. and gallant Gentleman is really moving to alter words which exist in the Statute.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

The MINISTER of HEALTH (Sir A. Mond): We quite appreciate the difficulties, and also the very excellent work that the approved societies have done in the administration of the Act, but I must point out, as I did in the House, that this figure of 4s. 10d. has been arrived at as the result of many months of careful research and investigation by the Departmental Committee on which all the various interests were represented. The hon. Gentleman spoke about the increase 620 in postal charges, but he will be aware that that was fully considered by the Committee when the 4s. 10d. was fixed, as I explained in the House on a previous occasion. As early as 19th April, 1920, the Lord Privy Seal, in his Budget speech, pointed out that the charges for postcards, printed papers, etc., would be raised, and he proposed to take power to increase charges proportionately. It is quite true the increased charges were not put into operation till later in the year, but the Committee had before them the knowledge that these charges were going to be made, and they took it into consideration when the 4s. 10d. was arrived at. The cost of postages, etc., for 7,000,000 persons in 1920 was 1¼d. The hon. and gallant Gentleman says the increase will add 2d., but that is obviously based on some error of calculation. It cannot amount to more than the fraction of a penny, and we really cannot alter this figure of 4s. 10d. In 1919 for the cost of administration there was only an allowance of 3s. 5d. In 1914 the actual expenditure was 3s. 1d. We have now raised it to the considerable figure of 4s. 10d., carefully arrived at after review.

Colonel P. WILLIAMS: We ought to have some explanation or statistics from the Minister as to the total cost of the administration of this Act. I was looking into the matter the other day, and I think there must be something wrong with the figures; they showed that a very large proportion of the contributions to the National Health Insurance scheme went in expenses. That is to say, of the total contribution a very small proportion of the money paid in was paid out in benefits to the insured persons. The Committee ought to know where the remainder of that money has gone. What proportion of the total amount subscribed has during recent years been paid out in benefits to the insured person? I have tried to take out the figures myself. I have the Civil Service Estimates here, and I am bound to admit that I cannot make very much of them. Doubtless these figures are easily understandable by the Department, but they are put forward in such a form as to make them difficult of comprehension to the ordinary Member. In these days, as I said during the passage of the Bill, we ought to be very careful that we do not allow administrative expenses to increase unduly. I know insurance committees have been hard pressed, 621 but is not that because too much was expected of them, and more than was absolutely necessary? The Minister of Health tied them up by regulations. Could not this be simplified and the expenses of administration reduced? I am told—with what truth I do not know—that if this National Health Insurance was run by one of the large industrial societies it could be done at a very considerably reduced cost, and that the insured people could draw a very great deal larger proportion of their contributions in benefit than they do to-day.

Sir KINGSLEY WOOD: My hon. and gallant Friend has raised a very important subject, and one rather more appropriate to a discussion on the working of the Act than the matter before us to-day. It can be said, generally speaking, that the working of the National Insurance Act has been most successful. The result of the valuations of the societies throughout the Kingdom are now to hand, and in almost every case surpluses, some of them of a very large amount, have been revealed in the working of the Act. That has been due to a variety of causes. One must not exaggerate their significance having regard to the experience of the war and its effect upon National Insurance. So far as the expenses of management of the approved societies are concerned, I think it is estimated that only some 12 per cent. of the contributions go in that direction. If hon. Members realise that figure, it cannot support any charge that there has been any wilful extravagance or mal-administration of the Act. The cash benefits alone paid to the insured persons of this country during the operations of the Act have reached now a sum of almost £72,000,000. When we realise the undoubted good and benefit that that has been to so many millions of people, I do not think there will be many people to-day who would desire to question or suggest that there should be much radical alteration in the administration of the Act. My hon. and gallant Friend suggested that if one of the industrial companies undertook the administration of this Act the expenses of management might be cheapened. It is not for me to criticise the administration of the industrial companies, but one cannot hide from one's mind the knowledge that the expense, at any rate, of certain of these industrial companies very much exceeds 12 per cent. of the contributions.

622

Colonel WILLIAMS: You have to remember the dividend paid to the shareholders, which is profit made on the transaction. What proportion, I would ask my hon. Friend, does the £72,000,000 distributed to insured persons bear to the total amount of contributions paid?

Sir K. WOOD: I am afraid I cannot carry all these figures in mind, but I will certainly find out and let my hon. and gallant Friend know. Pursuing the argument he put forward, without any criticism of the industrial companies, and having regard to the services which they do to the community, and the fact that their agents have to collect contributions weekly—which undoubtedly makes a very heavy charge, apart from the question of dividend—I am sorry to say—they realise the fact themselves—that their management expenses approximate to 40 per cent. I, therefore, hope my hon. and gallant Friend, after this explanation, will permit this particular Clause to be passed. It is very earnestly desired by the approved societies themselves. The figure is arrived at as a result of an important Departmental Committee, and has generally commended itself to the approved societies throughout the country. Naturally approved societies desire to have more money. No one is satisfied nowadays. It is a dissatisfied age. Apart from that, I think we might have the Clause.

Question, "That the Clause stand part of the Bill," put and agreed to.

Clause 2 (Contribution by societies towards administration expenses of insurance committees) ordered to stand part of the Bill.

CLAUSE 3.
—(Amendment as to constitution of Insurance Committees in England and Wales.)

(1) Section fifty-nine of the National Insurance Act, 1911 (which provides for the appointment of insurance committees), shall, as from the first day of November, nineteen hundred and twenty-one, have effect in its application to insurance committees in England and Wales as if the words "in no case less than twenty or more than forty" were substituted for the words "in no case less than forty or more than eighty."

(2) The power of the Minister of Health to make regulations under subsection (4) of the said section fifty-nine shall include a power to make regulations for modifying the provisions of subsection (2) of the said section in their application to an insurance 623 committee consisting of less than forty members, but in making any such regulations the Minister shall have regard to the desirability of maintaining as far as practicable the proportion between the several classes of persons to be appointed as members of insurance committees as prescribed by the said subsection (2).

Lieut.-Colonel Sir W. ALLEN: I beg to move, at the end of Sub-section (1), to add the words "and as though for paragraph (c) of subsection (2) there was substituted the following: 'Two members shall be appointed by the committee recognised as the local medical committee for the county or county borough under section sixty-two of the National Insurance Act, 1911, or section thirty-two of the National Insurance Act, 1913.'" I understand that the Minister in charge of the Bill is prepared to accept this slight Amendment of this Sub-section, and I do not therefore think it is necessary to weary the Committee with any explanation.

Sir A. MOND: I am quite prepared to accept the Amendment. I understand it will be an improvement in the machinery of the Act so far as the medical committees are concerned.

Amendment agreed to.

Clause, as amended, ordered to stand part of the Bill.

Clause 4 (Commencement and short title) ordered to stand part of the Bill.

NEW CLAUSE.
—(Application to Ireland, 10 & 11 Geo. V., c. 67.)

"For the purposes of Section 6 of the Government of Ireland Act, 1920, this Act 624 shall be deemed to be an Act passed before the appointed day."—[Sir A. Mond.]

Brought up, and read the First time.

Sir A. MOND: I beg to move "That the Clause be read a Second time." This Clause is now inserted in all Bills which deal with subjects upon which the Irish Parliaments have power to legislate: without this Clause the Irish Parliaments will have no power to amend the Act in its application to Ireland if they think fit to do so.

Sir W. ALLEN: It is rather a pity we have not had some idea of this Clause before. We have not had much time to consider it.

Sir A. MOND: This is a purely formal Clause, that now goes into all Bills dealing with these subjects with which the Irish Parliaments are allowed to deal under the Government of Ireland Act, 1920. It is automatic, and I do not see that there is any need to discuss its particular application at all.

Sir W. ALLEN: If there is anything wrong, we shall have an opportunity to deal with it on the Report stage.

Question put, and agreed to.

Clause read a Second time, and added to the Bill.

Bill, with Amendments, ordered to be reported to the House.

The Committee rose at Twenty-nine minutes before Twelve o'clock.

THE FOLLOWING MEMBERS ATTENDED THE COMMITTEE:

Pearce, Sir William (Chairman)

Allen, Lieut.-Colonel Sir William

Barton, Sir William

Beckett, Mr.

Bowerman, Mr.

Broad, Mr.

Buchanan, Lieut.-Colonel

Cairns, Mr.

Cobb, Sir Cyril

Cockerill, Brigadier-General

Cowan, Mr.

Davies, Mr. Thomas

Greig, Sir James

Hilder, Lieut.-Colonel

Lowther, Major Christopher

Mond, Sir Alfred

Newman, Sir Robert

Rankin, Captain

Richardson, Mr. Robert

Simm, Mr.

Stephenson, Lieut.-Colonel

Warren, Lieut.-Colonel Sir Alfred

Wheler, Major

Wills, Lieut.-Colonel Sir Gilbert

Williams, Colonel Penry

Wood, Sir Kingsley.