Orders of the Day — Superannuation Schemes (War Service) Bill.
Mr Ralph Assheton (Rushcliffe)
I beg to move, "That the Bill be now read a Second time."
As the House is aware, one of the principal aims of the Ministry of Labour at the present time is to secure the best use of skilled labour. To get this it is obviously necessary for skilled workers to leave the employment in which they find themselves in order to go into factories engaged in the production of war munitions. It has been found that in certain cases the fact that a man is covered by a superannuation scheme in his present job is an obstacle to his leaving it and going where he is most wanted, as it means a loss to him of certain benefits upon which he had been very properly counting. The purpose of this Bill is twofold. It is designed, in the first place, to enable trustees and others concerned with administering superannuation schemes to prevent loss of rights under a scheme which might otherwise result from employés going into the Armed Forces or into civil employment for war purposes. Secondly, it is to enable the payment of contributions to be continued on behalf of persons after they have left the employment to which the schemes relate.
I would remind the House that the rights of persons affected by the Military Training Act, 1939, and the Reserve and Auxiliary Forces Act, 1939, were protected by provisions of this nature made by Orders-in-Council under those two Acts. There was power also under the Armed Forces Act, 1939, to protect men called up for service by similar Orders-in-Council, but this power did not extend to men who volunteered for service nor to men transferring to war employment. It is necessary, therefore, to ask the House to pass this Bill in order to cover such cases. I do not think I need stress the desirability of a Measure to maintain the rights of men serving in the Forces, and I need hardly add that many concerns have been most anxious to do this for their employés, but in some cases have not legally been in a position to do so.
As far as civil employment goes, unless power is given to trustees and others concerned, any men or women covered by a superannuation scheme who transfer to war employment would suffer loss which it would be hard for them to bear. We have already made provision in the Local Government (War Service) Superannuation Act, 1939, and in other Acts, to protect the rights of local government staffs, teachers, constables, firemen and civil servants, and the Ministry of Health is co-operating with the Ministry of Labour in taking the most active steps it can to encourage members of local government staffs who can be released for war work. In view of the urgent need for every skilled man and woman to find his or her way into vital war industries, it is clear that no measure should be neglected which will help to achieve this object. There are many private firms as well as a number of public and semi-public bodies whose staffs are covered by superannuation schemes and who should be encouraged, when they can be spared, to transfer to war work. Such schemes are of very diverse kinds, and about 1,500,000 employés are covered by them. Some are operated by individual employers or groups of employers through insurance companies. A few workers are covered by independent group schemes, but the vast majority are covered by schemes operated by individual employers themselves.
The House will observe that this is an enabling Bill. It enables trustees, employers or insurance companies to take advantage of its provisions. It has been discussed by the National Joint Advisory Council, which represents the organisation of employers and the trade unions. As the employers' organisations have welcomed the Bill, and in view of their attitude and of certain undertakings given on behalf of life insurance companies, for which I should like to express my appreciation, the Government are asking the House to pass the Bill in the confident expectation that full use will be made of it and that employers who can spare workpeople covered by their superannuation schemes for work of a more urgent national importance, will do so to the greatest extent possible and will put no obstacle in the way of such transfers. It is in this confidence that the Bill is made permissive instead of imposing obligations which would not be easy to define owing to the very wide variation in the nature and terms of superannuation schemes. If, however, the Bill does not achieve the object desired, I want to make it clear that the Government will not hesitate to come to the House for further legislation in this matter.
Hon. Members will notice that the Bill covers all service in the Armed Forces whether or not a man has entered the Armed Forces as a volunteer or has been compulsorily called up. It will be for the Minister of Labour and National Service to determine what employment should be recognised as employment for war purposes, but I think I should tell the House that it is the intention of the Minister to recognise employment in all industries essential to the war effort, including such occupations as agriculture and coal mining, as well as those industries directly connected with the production of arms. It will also be possible for the Minister to give the necessary certificate in the case of men who undertake training to fit them for the war employment they propose to take up.
The proposals contained in the Bill have been discussed with representatives of the life insurance companies which are concerned in this matter. As the House is aware, many private firms make provision for superannuation by taking out group policies on the lives of their employés and in order that the rights under such schemes may be preserved, it was necessary to obtain an undertaking from the insurance companies as to the way in which they will deal with policies affecting any employés in respect of whom arrangements are made under the provisions of this Bill. The policies taken out with the companies often provide not only pension benefits but also life assurance benefits. With regard to pension benefits, the companies have given the Government to understand that they will continue to accept payment of contributions in respect of men serving in the Armed Forces or transferred to war employment. Where payment of contributions is continued the insurance companies will allow the employé concerned to continue in any scheme without loss of pension rights. If pension contributions are not continued after the date of the transfer to the Armed Forces or to employment for war purposes, the benefits secured by the contributions to the date of cessation of payment will be protected and contributions may be resumed at the end of the war upon the return of the employé and his re-entry into the scheme.
With regard to the second class of benefits, life insurance benefits, and, in certain cases, total disablement benefits, the group premiums cover only the risks allowed for in the original employment and make no allowance for increased hazards such as military or certain other war-time services. Therefore, the insurance companies have intimated that they cannot continue to pay life assurance benefits under the group policies in respect of employés transferred from their original employment in cases where the employé is transferred to service in the Armed Forces or to war employment where there is a material increase in the hazard. In most cases, however, under the existing schemes an employé,on the termination of assurance under the scheme, is entitled, when he is under 60 years of age, to effect an individual policy for the amount for which he has hitherto been covered in the group scheme at the rate for his attained age, and this he can do without any evidence of health. If in a group assurance, as was the case in many policies taken out before 1937, there was no restriction as to war risks, the individual policy would be issued free from war restrictions or the imposition of any special war extra premium. The insurance offices have, however, agreed that where employés are transferred to war employment where there is no material increase in hazard they will continue to hold the employé covered both for life assurance as well as for pension if both contributions are maintained, provided that there is no selective discrimination by the employer in the choice of the men for whom he will continue to contribute. In the case of men serving with the Armed Forces, provision has already been made by the Government for death and disability, and as a general rule, of course, this provision is much in excess of the cover usually provided under group life assurance. In view of the urgent need of the transfer of workers to the production of armaments, I ask the House to give this Bill a Second Reading this afternoon, and I hope very much that it will be possible for it to be passed into law with all convenient speed.