Seanad Éireann debate -
Thursday, 17 Jan 1957

Vol. 47 No. 2

Voluntary Health Insurance Bill, 1956—Committee Stage (Resumed).

SECTION 6.

Dr. Sheehy Skeffington

I move amendment No. 6:—

In sub-section (5), line 34, to add at the end of the sub-section ", provided that such expense allowances shall not exceed £50 per annum for any member."

This amendment is for the purpose of setting a limit to the amount of expenses for which the members of this new board shall be recouped. The limit that seemed reasonable to me was the sum of £50 per annum for any member. I do not think anybody can say that is too low a maximum. I would assume indeed that in a normal year it would be quite considerably in excess of what might be considered necessary. I do not know how many of these members will be coming to the committee from outside Dublin. I would be surprised if more than two out of the five were to come up from anywhere outside Dublin. It might well be that the whole five members would be from Dublin.

There will, of course, be other expenses besides travelling expenses, but I think it would be in the spirit of the Bill and in accordance with the spirit in which the Minister introduced the Bill—the spirit of economy, if you like, running it as cheaply as reasonably possible—to set a maximum limit upon the amount of expenses granted to each of the members. It must be borne in mind also that while expenses may be relatively high in the first few months—the number of meetings will be higher—as time goes on, the number of requisite meetings will be much smaller. Therefore, it seems to me reasonable to ask that these people, who will be remunerated, and also given an expense allowance, shall not be given an expense allowance in excess of £50 per member per annum.

Minister for Health (Mr. O'Higgins)

I want to be clear on the position. I take it we are now discussing sub-section (5) which provides that:—

"A member of the board shall be paid, out of funds at the disposal of the board, such remuneration and allowances for expenses as the Minister, after consultation with the Minister for Finance, determines."

The amendment by Senator Sheehy Skeffington provides that such expenses shall not exceed £50. That, I take it, is the position. The only matter in issue is as to whether it is desirable to impose a limit on the expenses which may be paid to members of the board. I would suggest to the Senator and to the House that the only way in which expenses should be paid is on the ordinary principle of whatever the expenses may be.

It seems absurd, in my opinion, to say that members of the board may get an allowance in respect of expenses and then go on to say "but that allowance shall not exceed a certain figure." If they are entitled to expenses, then they should get their expenses. If they are not to get expenses, let us say that quite clearly. If we provide them with their expenses, then they should get those expenses irrespective of amount. I have no idea what out-of-pocket expenses may be incurred. Members of this House may have experience in that respect in relation to other bodies. It will be appreciated that, from time to time, members of public boards are necessarily involved in out-of-pocket expenses of one kind or another. Whether the expenses might amount to £50 or whether the expenses might greatly exceed that figure, I would not know. Having agreed to provide the board with expenses, it would be unwise in my opinion to be niggardly about them. I think we should leave the matter open knowing that whatever payments are made will be carefully supervised and watched, as they will have to be in the interests of the scheme. I can assure the House there will be no unnecessary payments and any payments that are made will be strictly in accordance with the expenses actually involved.

Liam Ó Buachalla

I do not know how serious Senator Sheehy Skeffington is in regard to this amendment. It is very easy for people living here in Dublin to run away with the idea that coming to Dublin is a very easy matter and that expenses are of no account. A figure of £50 is suggested to cover expenses paid to the members of the board. I expect this board will be a board of serious men, faced with the task of building up an organisation, building it up in spite of great difficulty. These men may have to come together at least once a week and they may have to spend a few days in the week attending to the business of the board. A sum of £50 per annum to cover expenses would mean less than £1 per week. That would be an insult. If Senator Sheehy Skeffington had put in a figure of £250, or some sum like that, we might talk about this amendment but, as the amendment is before us now, it is hardly worthy of our consideration.

Mr. Hickey

I agree that the figure of £50 is too little. I do not anticipate that it will be necessary to call the board week after week. Assuming the board is called once a month, after some initial period of organisation, £5 would not be sufficient to meet train fare and subsistence or compensate for salary or wages lost through attendance at the board. While we agree that they should be paid travelling expenses and a fee to compensate for whatever they may lose by way of salary or income, we could not agree to confining the figure to £50.

Mr. Cox

I oppose the amendment. After all, the board which is being set up now is really a working board. It is quite impossible to know beforehand what expenses the members may incur. It is quite impossible to know what they will have to do. To say at this stage that their expenses should not exceed £50 seems to me quite indefensible.

Dr. Sheehy Skeffington

I can see that I shall not get any support for this amendment. Perhaps the failure to get support for the amendment arises from the fact that we have not got sufficient knowledge of just what this board will do. The Minister has been too reticent in that regard. He has not told us what kind of hours he expects the board to sit, how many meetings the board will hold and so forth. It has been suggested just now that they might have to meet once a week. I do not think that that is at all likely. Once the scheme is launched, I think it is quite possible they may not meet more than three or four times in the year.

I find there are two attitudes held by those in authority here towards the question of "expenses." An unemployed man is expected to maintain himself entirely on practically nothing; £1 per week is regarded as wonderful money for him and £2 per week is regarded as too much. When it comes to the ruling classes, however, people are horrified at the thought that their expenses will not be commensurate with their position.

Professor Hayes

Really this kind of thing is intolerable. Surely it is quite irrelevant for the Senator to make these gramophone speeches on an amendment dealing with an insurance board. That is what he is doing; he is playing a gramophone record. This is the wrong place in which to play it and the record is out of order as well.

Dr. Sheehy Skeffington

I am not quite sure whether that is a point of order.

Mr. Cogan

Or an outbreak of organised rudeness.

An Cathaoirleach

Senator Sheehy Skeffington on the amendment.

Dr. Sheehy Skeffington

I suggest that we have two attitudes of mind here in relation to expenses. When we are asked to increase allowances for pensioners, 9/8 per week is considered marvellous. We are told that that is all we can give, and not a penny more. When it comes to paying expenses to others, extra remuneration, we are told that these expenses might easily amount to £250 per year. Although it may be irritating to some members of the Seanad to point to the fact that we seem to have a double standard, it is I think nevertheless relevant to the point at issue here.

I do not think it unreasonable to ask that these members should meet anything in excess of the £50 suggested out of their own remuneration. We have not been told what their remuneration will be. That has not been even remotely indicated to us by either the Minister or anybody else. Nobody has indicated the order of magnitude of these men's remuneration. We do not know whether they may not get £1,000 per annum or £2,000 per annum. Let us not subscribe to the idea that every single bit of work here in Ireland must be paid for, cash on the nail, when it is done by paid experts. I personally believe there are numbers of people who are out of pocket where expenses of this kind are concerned, and I do not think it is unreasonable that the members of this board should be limited to £50 per annum in relation to work which may entail only three or four meetings in a year.

Dr. O'Connell

In my time I have been associated with a great many companies of one kind or another in which expenses were payable. I have never known of a case where an attempt was made to set a limit to the total of expenses. There were scales laid down, but there was no limit. Just consider for a moment what might happen if this amendment were carried. A member might attend fairly regularly and finally send in his claim for expenses and get in reply a letter from the secretary telling him he will get no expenses over and above the £50. That would create a ridiculous situation.

Professor Fearon

This board will have a double function. It will really be two boards. There may be a board to make this scheme and there may be another board to carry it out. These boards may be entirely different bodies. The board to make the scheme may consist of experts and it does not follow that the people who make the scheme would be the best people to carry it out.

For that reason I feel the Minister had better complete the financial arrangements at his own discretion. It has been said that medicine was the only profession in which the judge was also the hangman. The people who make this scheme will be the judges of the scheme and it is not inevitable that they will be the hangmen. The people who administer the scheme may be a completely different set-up altogether from the board that constructs the scheme; it may disappear after the scheme has been framed. I think it would be better if the Minister had his hands free to remunerate the people who make the scheme. What we ought to keep in mind is that there may easily be a quick change-over from the original construction body to the administrative body. It is a pity the Seanad will not have an opportunity of discussing the scheme as constructed. For those reasons I am afraid I cannot support the amendment.

An Cathaoirleach

Is the amendment being pressed?

Dr. Sheehy Skeffington

Yes.

Mr. Crowley

I am one of those who advocated that the board as envisaged in the Bill should be somewhat extended—at least a little more than is intended in the Bill in its present form. Side by side with that, I have already suggested that the expenses should be kept at a minimum. Yesterday we had the Minister's assurance that he was thinking along the lines of what may be described as a part-time board for the administration of the scheme—a board comprised of people who would not be expected to give their full time to the work and who would, I take it, likewise be remunerated on a purely nominal part-time basis.

If that is so it will be a satisfactory arrangement. However, I should like to add a further point. Despite anything I have said either in support of the arguments put forward by the Minister or in criticism of the Bill, I would not be prepared to stand here and advocate that the people who will be expected to do this duty on behalf of the State should do it at their own expense. Such a theory is entirely false, altogether wrong. What I am much more concerned with is that if we were to support that idea in any way we would not be doing this scheme a very great service.

I believe the expenses of the board members should be covered to a minimum. What is meant by expenses here is the type that have to be incurred by people who will do this job. I would be opposed to this amendment if for no other reason than for the limits it sets. The amendment seems to suggest that what Senator Sheehy Skeffington has in mind is the type of board comprised of people who would be selected from an area within a bus ride of where the office would be situated. I fear that such an arrangement would be very bad. I think the Minister should be free to appoint people not alone from Dublin but from as many parts of the country as possible. I am entirely in agreement with Senator Ó Buachalla when he says that a sum of £50 would be an insult to anybody who would be expected to come up here from the country to do this work.

Amendment declared lost.

Amendments Nos. 7 and 8 not moved.

Question proposed: "That Section 6 stand part of the Bill."

Dr. Sheehy Skeffington

I do not want to delay the House but I do want to say something on the section before we leave it, because I think it is an extremely important section. Although we have debated it at some length, I feel there are some points arising out of the information given to us by the Minister and the information refused to us by the Minister which, I think, should be made on the section before we agree to pass on to the rest of the Bill.

An Cathaoirleach

I hope the Senator will have something to say which has not been said before.

Dr. Sheehy Skeffington

I shall endeavour to make my point as briefly as possible. I may say I have felt increasingly disturbed by the failure of the Minister to take the House even moderately into his confidence in relation to the amount of remuneration which is to be paid under this section to the members of the board.

I find it hard to believe that he or his advisers have given no thought to this matter so far, or that they have no notion as to what sort of sum is being considered. Therefore, I take it that they do in fact know pretty well what amount is involved, but that they are reluctant to make it public as yet, and to tell the House. I do not think that is treating the House very fairly.

The Minister has told us that the members of the board will be experts. I feel sure they will be. I have stressed the point, though the Minister has not yet commented upon it, that the early months of the work will be considerably more onerous than subsequently. Even then, it is probable that the work to be done by the members of the board to be appointed under Section 6 will be based, in large measure, upon the similar experience of British associations and provident societies.

I think that is borne out by some of the figures given in the Advisory Body's report. I suggest that, in general, their work will have been made considerably easier by the pioneering work done by these associations across the water, and that, though we require experts, the amount of pioneering work to be done will not be extremely great. Before we depart from this section I think the Minister might be requested to note the fact that quite a considerable body of opinion in this House felt the voluntary principle, even partly modified, should be recognised.

I was a bit surprised to hear the Minister say yesterday, when some Senators including myself quoted other voluntary bodies as an example, that those were "elected bodies," as if there was some difference in kind, degree or quality between people working on a public body, having been elected by the people, and those appointed to a body by the Minister. I do not see that there is any difference in kind. I feel that people chosen by the ordinary electors to serve on such a body as a vocational education committee are in no way of a different kind from people appointed to such a body by the Minister. The fact that they are elected or appointed does not seem to alter their status at all. At column 1352, Volume 46 of the Official Report, the Minister is reported as having said:—

"The adoption of the example offered to us by Britain where State medicine is in operation would in my opinion be a poor tribute to our ability in this country to solve our health problems by means more in accordance with our national traditions."

That statement was made by the Minister during his introductory remarks on the Second Reading of the Bill, when he asked us to give him a chance to introduce a scheme which would be more in accordance with "our national traditions" than the British scheme, but I should like to remind him on one point at any rate that the British United Provident Association says in its prospectus:

"The association is non-profit making and exists solely to help the subscribers.... The Governors who administer the association receive no remuneration and serve entirely voluntarily in the interests of subscribers."

Some Senators have taken a lofty tone; the Minister has taken a slightly lofty tone, in relation to the British scheme—"We are not as other men. We in Ireland have nobler traditions," and so on. That is all very fine in theory, but, in practice, it means apparently that we are convinced that we cannot get Irishmen to work for nothing on such a board for the public good. Expenses for travel and so on are just as high in Britain as they are here. Yet, we cannot here find such men, because our traditions are different!

I should like to stress the point that, although we may say that we do not want to adopt exactly the British Welfare State scheme—personally I should like to see it adopted—let us not at any rate pretend that we are being in some way more spiritually-minded. I am convinced, of course, that in this country we are fundamentally and very sincerely a deeply materialistic nation. I think it comes out on this occasion, when we feel that we cannot get men to do the work unless we pay them fat salaries, and I deplore the spirit of the section for that reason.

Dr. ffrench O'Carroll

As we are discussing the question of remuneration of members of boards, I should not like the occasion to pass without taking the opportunity to say that, as far as I am concerned, I think it would be a great pity indeed if we were to adopt the attitude that State boards or State-sponsored boards should be run entirely on the cheap. That is a very, very bad principle and an extremely short-sighted one. I could quite understand somebody's anxiety lest members of State boards should be paid large amounts for attending a small number of meetings, or something of that kind, during the year, but I really do not think that anybody in this House believes for one moment that, of all the State-sponsored organisations in this country, the members are paid large sums for such membership.

The point that I really want to make is that a great deal of what we have achieved in this country has been brought about by the success of State-sponsored companies and I am very keen on this idea of a company which is State-sponsored but not State-controlled, certainly, less State-controlled than this particular company will be. We in this House must realise that for the success of any company, be it running voluntary health insurance, production of electricity, turf production, or whatever it may be, it is essential that that company should be in a position to seek out and to pay adequately the necessary administrative and technical staff. It would be a very, very bad thing indeed if, because of this attitude that we have here, all our State concerns were forced to employ architects, solicitors, chief executive officers and everyone else on a small salary basis rather than paying these people adequately because it would mean that some of the biggest organisations in the country would be forced to run the organisations with second-rate administrative, technical and professional officers. It would be very shortsighted on our part in regard to many of the best and most successful organisations in this country.

It applies to medicine also. I have cited the example that is very close to this one of the blood transfusion organisation, which is one of the most efficiently run medical units in the country, something which visiting medical men have paid tribute to again and again, which embodies this same principle of being State-sponsored without State control. All of us should realise that, if we are to make a success of these organisations, they must be in a position to seek by public advertisement first-class administrative, technical and professional officers and they should be put in a position to pay them decent salaries.

Mr. Hickey

I do not think the comparison is very reasonable.

Mr. Murphy

We spent a great deal of time yesterday evening discussing the question of whether or not members of boards should be remunerated and the House was fairly evenly divided on that question. Because of that fairly equal division, it is rather regrettable that Senator Sheehy Skeffington should raise the same question again this afternoon and use the expression "fat salaries". I was against the principle that the board should be paid remuneration but the House divided and the House came to a decision. I do not think and I am sure the majority of those who voted with me in the division do not think that, because they were defeated on that question, we will have a board that will be paid fat salaries. If that were the impression created generally amongst the public or amongst those who would be subscribers to this voluntary health scheme, it would be very regrettable.

The Minister has had it impressed upon him yesterday and to-day that many Senators feel that the board should not be over-remunerated and when he comes to fix their salary I think he will have regard to that viewpoint. We have discussed that matter. We have come to a decision. Having come to a decision, I do not imagine that it is implied that, because remuneration has been included in the Bill, ipso facto, the members of the board will be paid what Senator Sheehy Skeffington terms “fat salaries”.

Question put and agreed to.

Sections 7 and 8 agreed to.

SECTION 9.

Question proposed: "That Section 9 stand part of the Bill."

Mr. Murphy

I wish to oppose this section and I want again briefly to make the point I made on Second Reading. I pointed out then that here we were appointing a board to run a voluntary health scheme and I said that we would be looking for the best people possible to put on that board. It seems to me rather illogical that, at the start, we should debar certain people, whether or not they are fit, able and well qualified to act on this particular board. I think I made it plain that I did not regard myself personally as in any way interested or well qualified but, looking around the Seanad, I can find people who are expert in medicine, expert and well qualified to act on and to run boards like this, people with a knowledge of insurance, people who may or may not be good people to put on a board like this. I said that it was extraordinary that we should right away debar members of the Seanad and members of the Dáil from being members of this particular board.

I must confess that my argument is somewhat weakened by the decision of the Seanad yesterday to include remuneration. If this were a board that would not be remunerated, I should imagine that I might have more sympathy with the idea that Deputies or Senators should not be debarred right away but, in spite of the defeat of the amendment yesterday, it would be interesting to put this idea before the Seanad. I do not know what good grounds there are for putting this disqualification automatically in all this type of legislation and, as I said, it would be interesting if we had an exchange of viewpoints on the matter.

Professor O'Brien

This is a question which I raised on several previous occasions on other Bills in this House and I am only raising it to-day really in the spirit of the last sentences of what Senator Murphy said. I should rather like to hear the official justification for this attitude. It seems to me to be rather taken for granted nowadays. A great many questions seem to be begged and a great many principles seem to be accepted without very much examination. I can perfectly see, of course, on the face of it, that certain abuses could arise if members of the Oireachtas were appointed to public boards of this kind, especially if they were appointed by the Government and paid remuneration. At the same time I do suggest that the time has come when the whole principle of the function of members of the Oireachtas should be reviewed in the light of modern developments in Government action and in the widening field of administration.

We have had a number of examples in the last couple of months in the Seanad of what I would describe as hangovers from the old English constitutional principles and I think that this is one of them. I am not saying that it is bad on that account but the time has come to examine it in the light of modern Irish conditions. The origin of this debarring of members of Parliament from taking part in paid official work was the struggle between the British Crown and the British Parliament in the 18th century when the giving of positions by the Crown to members of Parliament was a form of patronage which really amounted to bribery. The British House of Commons quite rightly asserted the principle that members of Parliament should not hold offices of profit under the Crown or, if they did take them, that they should seek re-election from their constituents. One can perfectly see in the state of the British Parliament of the 18th century all the evils which this law was meant to cure and how necessary it was.

In Great Britain itself this principle has led to endless difficulties in modern times with the enormous growth of public administration and the proliferation of offices which are directly or indirectly in the patronage of the Government. A number of members of Parliament have found themselves unwittingly breaking the law, and I think I am correct in saying that after the last general election in Great Britain no less than three members of the House of Commons found they were breaking the law unwittingly and were subject to penalties of about £100 a day for sitting in the House of Commons simply because they held minor offices carrying very small salaries. These offices had been in the appointment of the Government and, therefore, these members had in some way transgressed the letter and possibly also the spirit of this 18th century principle.

The difficulties after the last election led to the re-examination of the whole question. A committee of the House of Commons reported; its report is being put into action and the whole law in respect of the holding of offices under the Crown by members of Parliament has been revised in the light of modern conditions. All I am asking on this amendment is that some thought should be given to the matter here. We have had two examples recently of clinging in Ireland to British constitutional principles which have not been departed from but very largely modified in the home of their origin.

Yesterday we had an interesting debate on the Statute of Limitations in regard to State debts. It was urged by several members of the Seanad that the fact that the Revenue Commissioners should have unlimited time to revise assessments and collect debts was against the spirit of the times. That springs from the old legal maxim that "time does not run against the Crown" and that the Crown is not subject to the Statute of Limitations. However, in Great Britain where there is still a Crown and where this principle originated it has been very greatly modified in practice whereas we in this country in the Statute of Limitations, at least in its original form as presented to the Seanad, have preserved this principle which has been whittled away to nothing in Great Britain.

Another example is the right of the State to be completely arbitrary in dealing with its own servants. We come to that in the Civil Service Regulation Bill which was debated here at some length. I stated then, and I now repeat, that the royal prerogative seems to have extended itself in the Irish Republic while it has been very largely reduced in Great Britain itself. I am not suggesting for a moment that there may not be good reasons for this here and I can quite see what these reasons are, but I am asking that this whole principle should be revised.

It seems that the parliamentary draftsman in this country puts a disqualification into every possible Bill in respect of every new institution, every new board, every new committee being set up. It is part of a common form, which is like the old common pleading of the lawyers in the old days that they took it out of a book without considering whether it meant anything, that members of the Oireachtas are disqualified from serving on this board. That being so the matter is ripe for discussion and ripe for inquiry. I have raised it here in order to hear what the Minister for Health has to say about it in this context.

I really do think the time has come when this automatic exclusion of the members of the Oireachtas from taking their part in other departments of public life should be revised. After all, the fund of public ability in Ireland is not unlimited and it seems to be rather hard that the public should be deprived of the services of people in Parliament because they happen to be members of boards, or on boards because they happen to be members of Parliament. It is unfair to individuals and it is unfair to the country, and the onus lies on the people propounding this principle. Therefore I suggest the onus lies on the Minister moving a Bill of this kind to explain to the Seanad the necessity for this clause.

Dr. Sheehy Skeffington

I feel that this would have been a good amendment were this to have been a voluntary board, but now that we have decided that it is to be a paid body we must reluctantly accept the form of the Bill as it stands. I agree with Senator Professor O'Brien that that does in fact mean the exclusion of quite a bit of potential talent from membership of the board. That is a consequence and a necessary consequence of our decision to make this a paid board. The principle enshrined in the Bill as it is now is a sound one. When it comes to appointing people to serve in a paid capacity upon a Government-appointed board, members of Parliament should be excluded from participation. It is a pity that such talent should be lost, but it is inevitable in the circumstances in which we find ourselves, since this is to be a paid office and not voluntary work.

Mr. Kissane

Like the last speaker, I am opposed to this amendment. My attitude is, as it has been in the past, that members of the Dáil and Seanad have plenty of work to which to devote their talents, but there is something more than that in it. We must always take the public outside into consideration and no matter who the individual member or members of the Oireachtas may be, if they happen to be on one of these State-sponsored boards, especially a board the members of which would be in receipt of remuneration out of public funds, there will always be grounds for suspicion that that member may be in too much of an advantageous position vis-a-vis the general public. I do not suggest for a moment that anything like that would be the case, that any member of the Oireachtas would ever use his position on any of these boards for his own advantage.

There might be members of the public, however, who would be quick enough to come to that conclusion and we must, in these cases, not alone eliminate what may be a disadvantage but also what would be suspected to be a disadvantage on the part of the public outside. This is a thing which has been discussed on many occasions and it has been, as Senator O'Brien has said, the policy here for a number of years not to appoint members of the Oireachtas on any of these State-sponsored bodies. I think the Minister would be wise to uphold the status quo in that regard. That is my attitude to this amendment.

Mr. O'Higgins

The position with regard to the section as it stands is pretty well as some of the Senators have said. I can find no clear precedent one way or the other in relation to a matter of this kind. In relation to some boards, such as the E.S.B. or An Bord Fáilte, there is an express prohibition of the kind in the Bill. In relation to Bord na Móna and the Sea Fisheries Board, for example, there is no such prohibition and, therefore, from that point of view, I do not think it is strictly accurate to say that there has been a clear line of policy followed here through the years. The matter was raised and discussed in the Dáil in 1939, on the passing of the Bill establishing An Bord Fáilte, and the debate was very much along the lines that it has followed here. It is not easy to be convinced one way or the other. I feel, however, that in relation to a board of this kind—and probably this would have a general application to all State-sponsored bodies—it is desirable in the Oireachtas itself that only one member of the Oireachtas, and that is the responsible Minister, should be answerable to the Houses in relation to the matters arising from the administration of the affairs of any such board.

I do not think it is desirable that the Minister who has the statutory responsibility in that regard should be facing either Deputies or Senators who are actually members of the board for which he has responsibility. I think that would not be desirable from a parliamentary point of view. In addition, there may be the feeling that the Houses of the Oireachtas should not encourage members to be actively associated with State-sponsored boards. There may be some question with regard to the freedom of members of the Houses being interfered with in that respect.

There is, in addition, another aspect. I do not feel that, if a member of the Oireachtas were appointed to one of these boards, he would not discharge his duties in a highly exemplary manner but that would not prevent the suggestion being made by ill-conditioned people that the purpose of the board by reason of his membership was to operate a scheme and discharge its duties in the interests of sections of the people. That would militate against the success of the board in carrying out its duties and would not be desirable.

Having said that I would like to express my personal view that, whether this prohibition is expressly contained in the Bill or not, it certainly would not be my intention, under any circumstances, to appoint to the board a member of the Oireachtas. I think that were I to do so I would create considerable difficulties for myself and I might create difficulties for the board also. But since there does not appear to have been any clear line established through the years I would frankly welcome a decision by the House on this matter. I have stated my views but I am quite content to leave it to the decision of the House. If there are any other Senators who feel with Senator Murphy that this is an undesirable section in the Bill then I would like their views on it. A decision by the House might clear the air and establish once and for all a certain line of policy with regard to these matters. I would be content to abide by the decision of the House.

Mr. Cox

As the Minister has suggested that Senators should express their views on this, I should like very strongly to support the views which the Minister has put forward. It seems to me that if the system were to grow up that a member of the Oireachtas might be appointed to boards, possibly paid boards, or even boards receiving expenses up to £50 per annum, there might be a danger not merely of the cry of patronage, but the danger of actual patronage. I would recognise the policy that on such boards and bodies there should be no members of the Oireachtas and that they should be independent. I think there is very great force in what the Minister has said—that any Minister would be placed in an extremely difficult position if a board over which he had some kind of jurisdiction had on it a member of either House. I would think that we should not adopt the present amendment and that the principle should be recognised that members of the two Houses should not be members of such bodies.

Mr. Crowley

As the seconder of this amendment, I should like to say that I think I lent my support to it mainly because I was anxious to hear the official justification for the existence of this type of thing. Like Senator Murphy, I do not feel quite so happy about the amendment now in view of the decision taken yesterday in regard to remuneration. In the light of that decision I should like it to be clear that I would not desire to press the principle behind the amendment.

Mr. Murphy

I think I made it plain at the start that I did not feel very strongly about this. I was more interested in getting the all-round viewpoint. The Minister has certainly enlightened me by saying that, in fact, this is a provision which is not automatically written into legislation and that members of the Oireachtas are not debarred. He also said, of course, that, whether the provision was there or not, he would not, in fact, appoint a member of the Oireachtas to the board. I suppose he is quite right there.

Senator Kissane made the point that members of the Oireachtas, whether Deputies or Senators, will have enough to do looking after their duties as Deputies or Senators. Whether we agree with that viewpoint or not is beside the point. I recollect that many Deputies and Senators are directors of private companies and if they can find time to discharge their duties as directors of companies there should not really be any difficulty about discharging their duties as directors of what, in fact, is a semi-State company. I thank the Seanad for the exchange of views and, with the Chair's permission, I should like to withdraw my amendment.

Amendment, by leave, withdrawn.

Sections 9 to 12 inclusive agreed to.

SECTION 13.

Question proposed: "That Section 13 stand part of the Bill."

Dr. ffrench O'Carroll

With regard to sub-section (4) of Section 13, I notice that: "The officers of the board may, with the consent of the Minister, include a general manager whose appointment, terms of office and removal from office shall be subject to the approval of the Minister." Would the Minister not consider allowing the board to appoint their own general manager? Why does the Minister think it necessary to make the terms of office and the removal from office subject to his control? Would he not be prepared to give the board more freedom?

Professor Hayes

The Minister does not make the appointment.

Dr. ffrench O'Carroll

It is subject to the approval of the Minister.

Mr. O'Higgins

I think that is only reasonable. After all, there is public money involved and I would have a responsibility to be satisfied that the person appointed as general manager would be a person qualified and suitable for the post. I think it is not unreasonable that the duties and terms of his office and my consent to his appointment should be secured. The Senator will probably find similar provisions in most similar Bills establishing public boards.

Mr. Murphy

The section makes provision for the appointment of officers and servants of the board and I wonder if the Minister might not again consider the advisability of assisting this voluntary health scheme by staffing the board himself and providing that the staff should be got from the Department of Health and paid by the Department of Health. It seems to me that there would not be a great number of staff involved and that you could supply it from the Department of Health and provide the office accommodation as well. That would cut out the administrative costs of the scheme right away. In view of the fact that we have already decided to remunerate the board, perhaps this little assistance could be given to the people who join the insurance scheme.

Mr. O'Higgins

That would be an administrative matter.

Question put and agreed to.

SECTION 14.

Question proposed: "That Section 14 stand part of the Bill."

Mr. Cox

I am aware that similar sections as regards other bodies have sometimes caused doubts as to how far members of the board themselves can perform the function. I thought I should draw attention to the matter. It has always seemed to me that a similar section appears in several other Acts in regard to other boards. Possibly it is a rather doubtful kind of section because a board would naturally employ the people and presumably have to act through them. Sometimes Section 14, as it stands, may throw some doubts on the power of a person like the chairman of the board himself performing functions. I thought I ought to draw attention to the matter. As I said already, similar clauses exist in regard to several other boards. I think it is the kind of clause that can give rise to difficulties.

Mr. O'Higgins

I shall have the matter examined between now and Report Stage.

Question put and agreed to.

Section 15 agreed to.

SECTION 16.

Dr. Sheehy Skeffington

I move:—

In sub-section (1), line 33, after "rate of interest" to insert "(not exceeding ½ of 1 per cent.)".

The purpose of this amendment is to make the rate of interest chargeable on the sums of money lent to this new board a nominal rate of interest. I myself think it would be justifiable to charge no interest at all. Perhaps that is the intention of the Minister. I put the question to him on Second Stage, but I do not think he adverted to it. It may, however, be his intention to suggest the charging of no interest.

This refers to two sums of £25,000 each to be lent by the Exchequer to the new board in order to help it to get the scheme going. Then the new board will pay back these sums, over a period to be fixed by the Minister in consultation with the Minister for Finance, and at a rate of interest which he thinks fit. It is quite obvious that if the board is to be charged a higher rate of interest or indeed anything more than a nominal rate of interest this will place an even further charge on the scheme, which will be hard enough to run in any event.

We have been told that the administrative costs are going up, possibly, to as high as 30 per cent. We are having a paid board, and we hope to attract people at a premium which will get in 25,000 people or more, but if the premium is to be pushed up by one type of expense after another, including capital charges made by the Exchequer for interest on this sum lent, I feel that a bad principle is being applied. It has been the practice occasionally in the past—I am thinking notably of the E.S.B.—for the Government to charge a higher rate of interest for money lent to the E.S.B. than the E.S.B. would have to pay at that time if they had been free then, as they are now, to borrow money in the ordinary way. I should not like that sort of thing to happen here and I do not imagine that it is contemplated.

The purpose of the amendment is to ensure that the rate of interest, if any, shall not exceed ½ of 1 per cent. We are told that the Minister for Finance will be consulted and so on. Yet, despite what we were told yesterday about his uniform outlook—not merely he as a person but like all Ministers for Finance—I personally find that Ministers for Finance are a little bit unpredictable in their attitude. Sometimes they say the money simply is not there, but the next day £2,000,000 is found to be available. They will lend £50,000 to this board, but of course it must be paid back and perhaps at a high rate of interest. On the other hand, grants of £50,000 each will be given to industrialists and those are free grants, non-repayable and no rate of interest is charged. Therefore, I feel that the attitude of a Minister for Finance is quite unpredictable in this regard. I should like the Bill itself to ensure that the rate of interest to be charged will not be more than a nominal rate which should amply cover any expenses in which the Exchequer would be involved.

Mr. Murphy

I support very strongly Senator Sheehy Skeffington's viewpoint and his amendment on this matter. We are setting up a board and providing for remuneration. The State, having done that, will not give any further assistance, except the loan of money to launch the board and make provision to lend money to meet initial losses. We are safeguarding ourselves by saying that the money must be repaid at a rate of interest fixed by the Minister for Finance.

If it became necessary to lend money up to the maximum amount provided in this Bill, at 6 per cent., there would be an annual charge of about £3,000 on the board. That £3,000 would have to be met by those participating in the scheme. The Minister said yesterday it would be necessary to have at least 25,000 members. They will have to pay 2/6 per annum on that premium, to meet the interest payable to the State, the benevolent State which has launched the scheme and provided for the payment of the directors and which now wants to make a profit on the money to be loaned.

The very least we can expect from the Minister and the State is that, if it is necessary to lend money to start the scheme—that is accepted—and to lend money in the earlier years to meet initial losses, interest should not be charged. If there is any interest charged at all, it should be a nominal interest, as suggested by Senator Sheehy Skeffington, ½ of 1 per cent.

That is the very least we are entitled to expect as assistance in this case. The members will be part of the general body of taxpayers, they will provide for their own health insurance and they are also the same people who provide for the health schemes of those who are under the £600 income. They have to pay for that on their rates and taxes and in this instance I think it is right to ask that the interest, if charged at all, should be purely nominal.

Mr. Hickey

Could we hear the Minister?

Professor Stanford

Does this amendment not amount to this, that we will pay higher taxes in order to produce this scheme more cheaply? That is simply what it means and I would prefer not to pay higher taxes and have this scheme a little dearer. We should leave it to the Minister for Finance and the board to make the right arrangement which will be just to the taxpayers.

Mr. Hickey

I would like to hear the Minister.

Mr. O'Higgins

In relation to keeping the overheads and the expenses of the board as low as possible, I am in complete sympathy with Senator Sheehy Skeffington and any other Senator who feels in that way. I am not asking the Oireachtas to give me authority to set up a board in order to come along later with a hammer and destroy it. That would be quite an insane approach. I will be as much concerned as the Senator or anyone else, in relation to the rate of interest which may be charged on loans advanced to the board, to ensure that the board will not be impeded in its work by the interest payments it will have to make.

At the same time, I do not think it would be helpful if a prohibition were imposed there, providing a limit for the rate of interest, as other difficulties might be entailed if that were done. It is reasonable that it should be left to whoever the Minister for Health may be from time to time, because it will be his concern to ensure that rates of interest will be kept so low as to permit the board to operate successfully. If the rates of interest are so high as to prevent the board operating successfully, then not only will the scheme not succeed but the money advanced will not be repaid. That is a matter which might be considered by Senators.

Dr. ffrench O'Carroll

Does the Minister envisage that it will be possible to lend money to the board any cheaper than the Government obtains the money?

Mr. O'Higgins

No.

Dr. ffrench O'Carroll

That is the position.

Mr. Hickey

Will the money lent be money taken by taxation from the people?

Mr. O'Higgins

It is, but not definitely by taxation. The money will be provided by the Oireachtas.

Mr. Hickey

Through taxation?

Mr. O'Higgins

Not necessarily.

Mr. Hickey

May I try to remove Senator ffrench O'Carroll's fears? I heard some remarks while the Minister was speaking, to the effect that we could print the money and I know to whom they were directed. Senators may smile, but I do not believe in printing money in that way. We have to live on the production of the people, so I would like to disabuse the minds of those who think I would like to print money in such a way. However, the fact is that we are to get this money by taxation. Why then should we charge any more interest, in giving that money to a voluntary health board, except the mere administrative costs? I do not think any more should be charged, and I am saying so, rather than talking like Senator ffrench O'Carroll, who asks can we give it cheaper than we get it from the banks.

Mr. O'Higgins

The Senator will appreciate that the position is that the money which will be loaned to the board may be money which the State itself may have to borrow. If so, obviously the interest which would have to be charged to the board will have to be what the State itself has to pay. Otherwise, a loss would be incurred and would have to be met by somebody. Obviously, the cost of that borrowing should be borne by those whom it is intended to benefit, that is, those who would benefit from the insurance scheme.

If it were possible to provide money other than borrowed money, then it might be far easier to deal with this matter. I think it should be left as it is in the Bill, knowing that those considerations will be ever present to the Minister for Health in deciding the terms upon which the money should be loaned.

Mr. Hickey

I maintain that money got by taxation should not have an interest charged on it for this purpose.

Dr. Sheehy Skeffington

The Minister has told us that "obviously" if the State had to borrow money, the State would have to charge that same rate of interest to the board. That is not "obvious" to me at all. He also says it is "obvious" that the loss would have to be borne by "those benefiting from the scheme." I do not see that that is obvious at all. Without going into the whole question of subsidies, it is quite obvious that frequently people other than those who benefit, bear a loss—that a loss is spread over the whole community. The Minister has assured us—and I am quite certain he is sincere in that—that he wants the scheme to work, and he has asked us therefore to have faith in him that he will not charge too much and so on. But I feel that although there is, in a way, only a small sum involved, nevertheless, he is setting about it in a way that will stultify his own aim, because, in the first place, he is giving no subsidy to the scheme, which in my opinion is the only way in which it could possibly work, and in the second place, the total amount of money he is going to raise for the scheme to start it is £50,000. That is £50,000 for the entire scheme which is to have a minimum of 25,000 people benefiting.

He hopes there will be more than 25,000 people, and so for a health scheme to serve that number, and those others who would be in a position to use the scheme, he is proposing to put up a single sum of £50,000, but he will insist (a) that it all will be paid back, and (b) that the rate of interest to be charged on it will be the same rate as the Government would have to pay. Yet, if one industrialist decides to put up a new factory—just one, not 25,000—he will be given a present outright of £50,000——

An Cathaoirleach

It is not an issue in this section of the Bill. It has been referred to many times.

Dr. Sheehy Skeffington

I am just illustrating a point. The Minister is quite convinced that it is "obvious" that the people who are to benefit must pay back the money and incur a loss, and I am citing an example where apparently it is not obvious at all, because so far from paying interest on the money which will also have to be raised by the Government, the new industrialist will not have to pay the interest, or even pay the money back. Therefore, I feel it is not too much to ask the Minister to consider putting up this money as a free grant, but if he is not prepared to do that, I would ask him not to charge more than a nominal rate of interest.

Dr. O'Connell

I wonder why there should be all this anxiety about benefiting the people concerned in this measure. After all, they are people who are supposed to be able to pay for the benefits they are looking for and they are excluded from the State Health Scheme because they have the means to provide medical services for themselves, and this scheme which we are passing is to enable them to provide those things as economically as possible. That is the whole object of the scheme.

We do not always remember, I think, that the Government has no money except what is paid to it or given to it by the public through taxation, through customs or excise duty or whatever it may be——

Mr. Hickey

I think everybody is pretty well conscious of that.

Dr. O'Connell

——and if the Government loses money, it is really we, the taxpayers, who lose it and who are at a loss. If the Government has to lend money free, and if a loss is incurred in doing that, then we are the losers. There is no analogy at all between this and the case made by Senator Dr. Sheehy Skeffington in regard to the loan to the industrialist——

Dr. Sheehy Skeffington

The free grant; it is not a loan.

Dr. O'Connell

Let it be a grant or a loan. I am assuming it is a grant. A loan free of interest is a free grant.

Dr. Sheehy Skeffington

No, the grant is non-repayable.

Dr. O'Connell

That grant to the industrialist is paid because it is productive and it will bring a benefit to all of us—it should not be made otherwise. It is intended to benefit the whole community and that is the ground on which it is made. There is no analogy between that and lending it to these people, and that is what is suggested—a loan to be made to these people who are assumed to be able to pay. If there is interest lost, not charged, or if it is a free grant or merely nominal interest, I say it is the woman buying the pound of sugar or tea who is really helping to pay for the benefit of those people who are supposed to be well able to pay for themselves.

Mr. Murphy

I think we should be as clear as we can be as to the people who are expected to be members of this voluntary health insurance scheme. They are largely white collar workers, the people whose income is in excess of £600 per annum, the civil servants, and those living out in the suburbs paying for houses, with maybe £610 per annum, and they are supposed to be well able to safeguard the health of themselves and their families. They are at the same time probably paying £40 per annum in rates on their houses and included in that £40 is probably £10 or £15 to provide for the health services of the people under £600 per annum. Is it too much to ask that there should be some little assistance to those individuals who are prepared to insure voluntarily to guard their own and their family's health and who feel an obligation to do so?

Surely it is not very much to ask that if it is necessary to lend money to that scheme which is to provide an insurance for them that that money should be lent at a nominal rate of interest? From my point of view, we would be fully entitled to provide assistance for this voluntary health scheme which is a very good thing. It is good in my opinion in that instead of extending the health scheme we should try to do something on an insurance basis. But here we are asking for some little assistance. Do not lend money to the scheme and then charge 6 per cent. or 7 per cent., or whatever will be decided at the time, and lay a burden on the people with over £600 per annum.

There may be people with salaries of £1,000, £1,200, £1,500 who may join the scheme also but let us look at the figures and the facts of the matter. The bulk of the members will be people with just over £600 per annum, white collar workers buying houses, rearing and educating families. These people really cannot afford an awful lot. It will be a sacrifice for them, for a start, to join an insurance scheme. Do not add to the sacrifice by asking to include in the premium a charge for the interest on money lent by the State.

Mr. Crowley

I feel that Senator Murphy has the mind of the House in regard to the people for whom we are trying to cater in this Bill. I do not want to repeat most of the things said already but I think it is necessary to re-emphasise that views have been expressed here and elsewhere to the Minister which I think had some basis both in reason and fact. It has been urged on the Minister that in point of fact this type of benefit he is trying to provide by this Bill could be provided for this class of people possibly by some other means than that which is in the Bill. I was one of those who urged very emphatically on the Minister that the board, the staff of the board and all those people that we are catering for under this Bill, ought to be prepared to do what is expected of them in the Bill on some basis other than that of remuneration.

What exactly are we passing at the moment? We have passed a number of sections already—(1) for the remuneration of the board; (2) for the appointment of the staff and (3) for the provision of pensions for the staff. Are we to take it at this stage that the sole purpose of this Voluntary Health Insurance Bill is to do all these things for the board, staff, and so on, and that, in the last analysis, we turn to the people whom we are supposed to be helping and say: "You will have to foot the bill and pay interest"? If that is a voluntary health insurance scheme, then, I submit, we ought to revise our ideas of what we really mean when we start talking about voluntary health insurance.

There is a strong case for something in the nature of a subsidy or subvention to help to make this scheme a success. There is absolutely no case whatever for suggesting in this particular section that the scheme should now be surcharged for interest at an unknown rate in advance and that we should be prepared to give our approval to that particular suggestion.

The members of this House will not be doing their duty to the people whom this Bill is supposed to benefit if they admit the suggestion that now, on top of all the other expense envisaged in this Bill—and, quite clearly, a very costly type of scheme is envisaged—we should impose a further charge for interest in respect of this loan which the Minister is contemplating, thus making that interest an additional charge against the success of the scheme itself.

Mr. O'Higgins

May I just put these few considerations before the House? It will be agreed by every Senator that if this board is to operate a scheme of health insurance it must, to start off with, have some fund available to it in its initial stages. The board itself will not earn its revenue until the scheme is in operation. Therefore, it cannot provide an initial fund from any other source except from borrowing. The only source from which the board can borrow is, through the Minister for Health, from the Government. If the legislation provided that no interest would be charged or that only a nominal rate of interest would be charged, it might happen that it would not be possible for the board to borrow any money.

Senators will recollect that there are two sums involved—£25,000 for the initial stage and another £25,000 in respect of losses which, in my opinion, it will never become necessary to call upon. Certainly, it is my hope that that is so. What is really involved is an initial sum of £25,000. If, in fact, the money is loaned to the board, and interest is charged at even 6 per cent., that means that each premium-payer will be asked to pay 1/3 per year interest. Considering this matter further, will the charge of an additional 1/3 on to a premium— whatever it might be: £9, £10 or £11— cause any person desiring to take health insurance to pause and think before he decides to go on with it? Is it seriously suggested that 1/3 per year is so serious a thing that it is likely to disrupt and destroy this whole idea?

I have no objection to discussing this matter at length but I always like to see some sense of reality in our discussions and I do not think there is any in this.

Mr. J.D. Sheridan

I rise to speak in support of Senator Sheehy Skeffington's amendment. He has put forward what seems to me a thoroughly logical case. Senator O'Connell has remarked that if a grant is made to an industrialist in this country that grant is made for the benefit of the whole community. That sounds quite logical, too, but I could quote Senator O'Connell a good few cases in this country where huge grants were made for industrial purposes that resulted in no benefit at all to the community. One often wonders where these huge grants disappeared to.

I understand that the purpose of this Bill is to provide a voluntary health insurance scheme. As I understand it, this Bill is for the benefit of the ordinary people of this country. Instead of being a grant, I agree that the money should be a loan. If the Government got back many of the extensive grants or loans that have already been given it would indeed be a very good thing. I believe that this is a loan which will be repaid. In other words, the Government is investing £50,000 for the good of the community. If an investment of that kind cannot be made without charging interest on it then I must say that things are not so good in the country and that I do not wonder in the least why a good many people here and there in the country are beginning to lose heart.

The Minister's attitude is that of a usurer who says: "We have got to pay for the money and, no matter what good the Bill may do, we have to charge interest for that money." I understand that the intention of the amendment is to infuse a spirit of consideration and charity for the purposes for which this £50,000 is being loaned. I do not see any reason why the Minister, before he comes here with this Bill, should not have made some arrangement with the Minister for Finance so that he could have let us know some further particulars as to the rate of interest which will be charged.

I rarely speak in this House and the reason why I speak now is because I whole-heartedly support the theory that if interest must be charged then it should be a very small and nominal rate of interest. Even if the Department or the Government lose anything on the transaction, I still feel that the money will have been well spent.

Professor Stanford

I want to repeat that we are choosing between the interests of the taxpayers and the interests of the people going into this insurance and that to talk of "charity", and so forth, is futile. We are trying to balance two things. It is clear that if the money is to be loaned at a rate of interest disadvantageous to the Government then the taxpayers will have to pay for it. We must keep that point quite clearly in our minds. Are we, in a sense, going to subsidise this scheme from taxes or are we going to let it stand on its own feet? I personally think they should be charged interest at an adequate rate so that there will be no further burden on the taxpayer. It has been argued that it is charity. There is no charity involved unless Senators are prepared to put their hands into their own pockets. We are simply taking money from the taxpayer to give to a group of taxpayers.

Dr. ffrench O'Carroll

It would undoubtedly be an excellent idea to give this voluntary health insurance board money at the rate of ½ or ¼ per cent. or whatever other fraction you may desire. I do not want to sound sarcastic when I say it is very easy to make a most convincing and noble speech on a subject like this. But the proposition simply is not practicable. I sympathise with the Minister for Health that he should be faced with this issue. It really has nothing to do with him at all.

The position in this country at the moment is—I am not saying it is wrong, but I hope it may be possible to change it some time—that any Government can lend money only at the same rates of interest and repayment as those at which they can obtain it from the banks. Those are the financial circumstances in which we find ourselves in this country at the moment. In dealing with legislation like this we simply have to accept that. In connection with a small Bill like this we cannot call the Minister for Health to order and ask him to change the situation.

Quite a small amount of money is involved here—two sums of £25,000. One is in connection with preliminary expenses. That would be £25,000 of a capital nature. It is likely in that case that the money would be borrowed and lent to the voluntary health insurance board on the terms and conditions on which it was borrowed. The second £25,000 is in connection with losses. It is possible in those circumstances that the money might be got from taxation, in which case the question of interest might not actually arise at all.

There is a section in this Bill which provides that if the board has to borrow money it will obtain money on the ordinary security on which any other company would obtain it. Apart from this £25,000 and the maximum of £50,000, if this board goes to look for money from its own bankers it will have to pay the same rate of interest as anyone else would pay to the bank. While the idea of lending the board money at a very low rate of interest is an excellent one, it is simply not possible in present circumstances. We should bear in mind that successive Governments, in seeking money for causes really more urgent and needy than this, have had to pay the full bank interest. The occupier of a small house in a corporation housing scheme finds his differential rent is influenced to some extent by the fact that, for instance, the Dublin Corporation has to pay the full bank terms for the money borrowed. While the idea is a good one, I do not think it is possible to carry it out in present circumstances.

Mr. Woods

I should like to compliment the Minister on introducing this Bill. As a member of a public body, I feel the Bill comes in response to a demand from the people down the country.

An Cathaoirleach

The Senator may not discuss the Bill. He must confine himself to this question of the rate of interest.

Mr. Woods

The Bill comes in response to a demand from the people who, as Senator Murphy said, were just missed. They are the people with incomes over £600. The Bill is an effort to meet those people. When the Government are putting up this £50,000, in two lots of £25,000 each, I think it is reasonable that normal interest should be charged. The Minister rightly pointed out that it would cost the subscriber only 1/3. I do not wish to say any more on this matter.

Mr. Hickey

We have spent nearly an hour and a half debating this important matter of lending £25,000 towards the voluntary health insurance board. Senator ffrench O'Carroll made a comment in reference to making a noble speech. His speech did not appear very noble to me when he said we have to pay interest on £25,000 loaned to start a voluntary health insurance scheme. I do not agree with the Minister's remarks that those speaking as I am speaking now are not facing reality. He tells us it will mean only 1/3 a year for the individual. If we have to lend £50,000 at a rate of 5 per cent. interest it means £2,500.

I think we are simply wasting time debating whether or not we should charge interest on a loan of £25,000 or £50,000. Some of that money may be taken from the people through taxation. Surely we will not set bankers exploiting groups of our people who are trying to be independent of State subsidy? The Minister should agree to the amendment.

Dr. Sheehy Skeffington

I feel inclined to press this amendment and have a vote taken on it, if the Seanad is willing, because I have not been convinced by the Minister's pleading. I was saddened, I may say, by hearing Senator Dr. ffrench O'Carroll, for whom I have great respect and admiration, saying that we had to be "realistic" and, because we have always charged a rate of interest for money, we have got to go on doing it in present circumstances! I do not share his view that, because a thing has always been done, we must always continue to do it. I believe that this is one of the features of "the present circumstances" which is bad.

Furthermore, I disagree—although the way in which he stated it was factual—with the conclusion of Senator Stanford. He rightly said that, if we did not charge the full rate of interest here, it would be a question of all the taxpayers giving a certain sum to help a group of taxpayers. This is a perfectly legitimate thing to do. It is done every day of the week throughout the country. I did not hear Senator Stanford voicing any opposition when we voted £2,000,000 as free grants to new industrialists.

Mr. Hickey

And not to be paid back.

Dr. Sheehy Skeffington

And no interest. Nobody said in that case: "We must be realistic. If you do not ask for the money back and do not charge interest, you will be forcing the taxpayer to pay for the benefit of a few."

Mr. Hickey

Although they will pay it back ultimately.

Dr. Sheehy Skeffington

These voluntary health insurance subscribers will have to pay back the full sum. Each of the new industrialists will get £50,000. The entire health scheme is getting only £50,000. We voted, not £50,000 but £2,000,000, with no interest or no request even for repayment, to new industrialists. If we want to be "realistic", they are just as much a small group as the people concerned in this health scheme.

Senator Dr. ffrench O'Carroll said it is unrealistic to ask the Minister to change the Bill now, but the Bill as it stands allows the Minister to charge no interest at all. The Bill simply allows him to charge whatever rate of interest he likes upon such terms and conditions as the time and manner require, and so on. Under this Bill the Minister can charge no interest at all if he likes. Therefore we are not unrealistically asking him to change the Bill. We are simply expressing, or attempting to express, the opinion of the Seanad that, if he charges interest, and we should prefer him not to charge interest, it should be a nominal interest and should not exceed one-half of 1 per cent. For these reasons, I shall press this amendment.

Dr. ffrench O'Carroll

On a point of explanation, may I say that in my remarks I did not wish to give the impression that I agree with the financial system and maintain that we should stick to it just because it is the system we have? What I am suggesting is that it is not practicable to try to change the whole financial structure and fiscal practice of successive Governments in a small Bill of this nature.

Mr. Hickey

The Senator will not disturb the financial system by what we are doing with this £50,000.

Amendment put.

The Committee divided: Tá, 10; Níl, 20.

Tá

• Bohan, Séumas G.
• Crowley, Patrick
• Davidson, Mary F.
• Hickey, James.
• McCrea, James J.
• Murphy, Dominick F.
• Sheehy Skeffington, Owen L.
• Sheridan, John D.
• Tierney, Patrick.
• Tunney, James.

Níl

• Barniville, Henry L.
• Butler, John.
• Carton, Victor.
• Cogan, Patrick.
• Cox, Arthur.
• ffrench O'Carroll, Michael.
• O'Callaghan, William.
• O'Connell, Thomas J.
• O'Keeffe, James J.
• O'Sullivan, John L.
• Guinness, Henry E.
• Hayes, Michael.
• Kissane, Éamon.
• L'Estrange, Gerald
• Mannion, John.
• Meighan, John J.
• Ruane, Seán T,
• Stanford, William B.
• Walsh, Louis.
• Woods, William.

Tellers:—Tá: Senators Sheridan and Crowley; Níl: Senators L'Estrange and S. T. Ruane.

Amendment declared lost.

Sections 16 to 22, inclusive, agreed to.

SECTION 23.

Question proposed: "That Section 23 stand part of the Bill".

Professor Stanford

On Section 23, I should like to draw the Minister's attention to what seem to me to be certain cases of hardship, I would even go so far as to say injury and injustice, which may be caused by this section. I think there is a very genuine grievance here and I am sure the Minister will give it his sympathetic, if not affirmatory, consideration. The House will realise that the 1936 Insurance Act prohibited a citizen of this country from effecting a contract of assurance with an association or any other person "which or who is not the holder of an insurance licence entitling such company or person to effect contracts of insurance." Persons were liable to a fine of up to £50 if they offended against this section.

That was a perfectly reasonable regulation if there had been any statutory licensed insurance companies at that time. It is reasonable enough to say "you must insure with licensed companies" provided the Government ensures that there will be some such licensed associations. The plain fact is this: for the 20 years between 1936 and 1956 there was only one such association for two years, unless I have been misinformed. If I am wrong, let the Minister interrupt me and correct me. I think it is true to say that in those 20 years there was only for two years a legitimate insurance company with which any citizen of this State could insure himself and his family against sickness and accident.

In other words, that clause of the 1936 Act virtually debarred every citizen of this country from insuring legitimately with an insurance company against sickness or accident for 18 years. I hope the Minister will correct me but I believe this is the fact. He nods his head; he assents to it. Was not that a very curious situation? For 18 years it was impossible, apparently, to effect a legal insurance policy to protect oneself, one's life, one's family and one's wife from sickness or accident owing to a defect in the 1936 Act or, if you like, owing to the lack of enterprise of the Irish insurance companies. In other words, if people took the law as strictly as was possible, no person, for 18 years, could insure in that way.

There was an alternative. The alternative depended on a legal construction of the 1936 clause. Various respectable lawyers held that the 1936 Act did not prohibit entering into an agreement with a provident association even though that association was not licensed by the Minister. That is an arguable interpretation of the Act. I have been told that the Government has been instructed by high legal opinion that it is an invalid interpretation of the Act. But no case has been taken and it is true to say that some respectable legal opinion holds that citizens were entitled under the 1936 Act to enter into a provident association, and in such a provident association to provide against the risk of sickness or accident for themselves and their families. And, in fact, some respectable citizens took advantage of that interpretation.

I should like the House to bear very clearly in mind that they were only doing their moral duty as enjoined upon them by their spiritual leaders and any moralists that they might consult. It was their duty to provide against sickness and accident for themselves and their families. The only way in which they could do it, even in a quasi-legal sense, was to enter into an agreement with one of these provident associations. In fact, as I say, in the 20 years between 1936 and 1956 there were only two years in which it was legal and possible to enter into an insurance contract insuring against sickness and accident.

In that 20 years some citizens did make an agreement with provident associations, believing that they could do so under the law. They received very good benefits. I shall quote one case because I want to try to make the point. I know the hour is late but I do think there is something worth considering here.

I shall make the point that these people will be deprived of very great benefits because of the effects of this section. For a 13 guineas subscription a citizen of this State received the costs of an operation for his daughter, 15 guineas; the cost of three operations for himself, 184 guineas; and will receive 120 guineas for sickness charges in respect of his wife. These are very remarkable benefits for a 13 guineas subscription. I do not use the word "premium" because that would have been illegal.

What will happen to that person and to others like him under Section 23 of this Bill? We can see that the first sub-section closes the loophole which allowed people to enter into an agreement with provident associations. You will notice that the sub-section does not simply say: "By means of insurance", but adds "or otherwise". It does not simply prohibit a premium but a subscription also. In the final clause, sub-section (3), clause (b) paragraph (iv), lines 29 and 30 of page 7, the exemption given is this: "The prohibition effected by sub-section (1) shall not apply to a contract of insurance which was made before the passing of the Act". But for 18 years before this Bill was introduced it was practically impossible to have a contract of insurance. I want the House to realise that, because I will not have its support unless it does realise it. Owing to the fact that there was no legally licensed insurance company giving these benefits in this country during the 18 years between 1936 and 1956, it was impossible for any citizen in those 18 years to enter into a legal contract of insurance to safeguard himself and his family against sickness and accident. Surely we all regret that; surely the Minister regrets it.

I believe we must face the consequences of all that now. The consequences are that a number of people entered into agreements with these provident associations and since then have been drawing considerable benefits. What will happen to those people under this section of the Bill? They will have to drop all those privileges and, worse still—and this was the reason I asked a question yesterday— we know those people will now have to undergo some kind of medical test or examination. In the particular case I had in mind the man and his family were perfectly healthy when they entered into the agreement in 1951. Unluckily, his family and himself fell into very grave sickness and they are not first class lives any more. If they go into this new voluntary scheme they will be told: "You are very sick people or you have been very sick people; you are bad lives; we cannot let you in or give you good terms; we are very sorry"; whereas if left alone this provident association would continue to carry the risk of further illness for the subscription of 13 guineas.

Would the House and the Minister not agree that it will be hard on those people? That particular person will suffer very gravely. Other people like him will suffer very gravely. Considering all that, considering that there was a defect in the law since 1948 or else a defect in the enterprise of insurance companies of this republic, will the Minister meet the situation? I think there is a simple way to meet it. I would be very glad if he would consider it between this and Report Stage. By a slight alteration these cases of hardship to which I have referred could be met very simply. I refer to page 7, lines 29 and 30 of the Bill. The fourth paragraph reads:—

"A contract of insurance which was made before the passing of this Act."

If the Minister would agree to amend the wording of that to read: "A contract of insurance or agreement with a provident association which was made before the passing of this Act," he would obviate cases not merely of hardship but of injury and injustice which would be caused if this section is allowed to pass unaltered.

Mr. Cox

There are a couple of points I want to raise on this section. I want to know if it has been contemplated that the body now being set up could, under any circumstances, reinsure. It would seem to me that quite possibly if such a body as this were being set up as a commercial undertaking its directors might think it wise to reinsure against the possibility of an epidemic or something of that nature. I think a normal insurance company would do that and I think that before this Bill is passed, possibly before the Report Stage, the Minister should consider that possibility. It might perhaps involve an alteration in the powers of the body concerned and an alteration in this section. I know this is a thing that has arisen in certain funds set up by certain companies in which, particularly at the beginning, there was a particularly bad run. It might be very wise and provident to reinsure or to sub-underwrite. I feel quite sure that any normal insurance company would do so.

There is another point which arises from what Senator Stanford has said. I think this section involves ordinary provident and medical provision funds that have been set up by a great many companies. One could think of a very large number of companies the members of which subscribe to such funds. Is that knocked out by this section? Some of these bodies have built up funds out of the subscriptions of workers and so on and it seems rather uncertain where they stand now. As regards another point made by Senator Stanford regarding the Insurance Act of 1936, I should like to say I do not think that a policy entered into with an unlicensed company was necessarily void. A person committed an offence by doing so but he could be prosecuted only by the Minister for Industry and Commerce. I take it that in certain cases it was considered the wisest thing not to enforce it. There was no provision under which a prosecution could be taken except with the approval of the Minister. Generally speaking, I think Section 23 may possibly require reconsideration.

Dr. Sheehy Skeffington

I should like to support what both the previous speakers have said in relation to this section. I take it that the main purpose of the section is to give the Minister power to create a monopoly situation for the new voluntary health insurance scheme here. I think his fear expressed in the Dáil was that if he allowed the British provident associations to compete, the terms upon which they would compete would be such as to take the cream of the market, as it were, and prevent his own scheme from working. That seems a legitimate point of view. Nevertheless in being asked to pass this section we ought to examine the advisability of setting up such a monopoly situation.

Senator Professor Stanford has quoted cases of individual hardship throughout the country which would be caused if such people were not allowed to continue with the provident associations across the water which have treated them so justly and so generously over those years. We ought not to be churlish in this matter, but recognise that during the period referred to by Senator Stanford our own private enterprise insurance companies fell down on the job. I am not suggesting it was through inefficiency but the circumstances were such that they just could not continue. Consequently a major share of this type of insurance was carried on by British companies and in particular by provident associations, to which our gratitude is due.

On the Second Stage I quoted, for similar premium rates, the benefits that would accrue (a) under the proposed Irish scheme as set out tentatively in the Advisory Body's report and (b) as granted by one of the British associations, the British United Provident Association. I showed that, benefit for benefit, for similar premiums under the British company, the benefits would be twice or, in some cases, nearly three times what it was hoped could be offered by the Irish scheme. I should like now to quote some figures from a similar company, the British Western Provident Association, with its headquarters in Bristol. I do not want to go into a lot of figures but just to quote the significant and main ones, quoting similar rates of benefit this time, and going on them to see what kind of premium is required.

Under the Irish scheme a married man with a wife and three children would get something like £7 a week hospital benefit for a maximum of ten weeks. Under the Western Provident scheme he would get a rather similar figure, £7 17s. 6d., also for ten weeks, with the difference that in the Irish scheme he would get less for a child. He would get £5 10s. a week, whereas the full rate would be paid for each child by the British company. The rates for surgical operations are the same for the Irish scheme and the Western Provident. For major operations the maximum rate is £25 in each case; intermediate operations, £13 in each case; minor operations, £7 in each case. That odd similarity leads me, indeed, to think that when our scheme is worked out, perhaps a good deal of the spade-work will be found to have been already done by the British companies. In relation to medical fees a maximum of £25 is set out under the Irish scheme, and a maximum of £26 under the Western Provident scheme.

There are hosts of other figures, but those are the significant ones. The final figure I want to quote is the suggested related premium. Under the Irish scheme to obtain such benefits, the premium for a married man with a wife and three children is £15 a year. Under the British Western Provident Association scheme, for a married man with a wife and any number of children—the entire family, it does not matter how many children—the premium is not £15 but £3.18 a year. Whichever way you look at it, it is that kind of startling difference, not just a difference of a few pounds, which emerges. If you look at it from the point of view of a similar premium there is the startling difference in benefit, or if you look at it, as I have just been doing, from the point of view of the similarity of benefit, you get a startling difference in premium.

Whichever way you look at it, I suggest that the total elimination by Section 23 of these British provident associations from the field, will impose a very grave hardship upon large numbers of the people for whom the Irish scheme is supposed to be operating. I am thinking of the people with little more than the minimum £600 a year. It is quite obvious that a married man with a large family earning £600 or £700 a year will find it very difficult to pay the sort of premium which will be asked for under the Irish scheme and, in my contention, will not join the scheme. Therefore I am afraid that, owing to this fact, such people will not merely be precluded from joining a British scheme but will not be able to join the Irish scheme, and consequently will fail altogether to have health insurance cover. For that reason, I would support what Senator Stanford has said. I am sorry he did not put an amendment down, but I think from what he said that he intends to consider doing so for the Report Stage in the light of what the Minister has to say.

Mr. O'Higgins

The position in regard to this matter is very much as Senator Stanford has told the Seanad. Since the Insurance Act of 1936, whatever doubts may exist one way or the other, the position has been accepted by the Minister for Industry and Commerce, who is the responsible Minister, and by interested associations, insurance bodies, that no form of health insurance—I am speaking only of health insurance—could be provided here except by those entitled to do so under the Insurance Act of 1936, and that meant licensed companies in accordance with the provisions of that Act.

It is also true that for the last 20 years, with one exception for a short period, none of those entitled to offer health insurance were interested in so doing. The position, therefore, has been over the last 20 years that our people here have not had available to them this form of insurance and it is precisely for that reason that this Bill is brought before the Oireachtas to meet that need and to provide this form of insurance for the people.

I am aware that different individuals have from time to time taken out forms of insurance which it was not legal or lawful for them to do. I cannot be asked to regard those people as being deserving of any privilege or special treatment. The plain fact has been that these British associations, which have been referred to here, under our existing law are not entitled to operate in this country and that goes for all. If some of our citizens have effected insurance with these people they did so knowing they were effecting insurance with an association, however well intentioned it may be, which in fact was not entitled to carry on insurance in this country.

It is suggested now that under this Bill these people who operated despite the provisions of the law should now be given a free pardon, if you like, and authority to continue with the insurance they have effected. That does not appeal to me. I do not think it is right. I do not think we should be asked to do so. As a result of the lack of initiative, if you like, by those entitled to do this for the last 20 years the State is now stepping in and setting up the appropriate machinery and endeavouring to provide, as economically as possible, a form of insurance to meet this need. In doing so I feel it is only right and proper that the board which will be charged with this duty should not be open to competition from outside because it would be very easy, as can well be imagined, for some outside association to make the work of the board completely impossible by offering for a period health insurance policies which would be uneconomic on Irish experience but which would be sufficient to make the work of this board a failure.

I said before, and I want my point of view to be understood, in relation to policies of health insurance at present on offer in England and which might, if the law were otherwise, be on offer here, that I do not believe that anyone can afford to disregard entirely the very carefully prepared report of the Advisory Body on health insurance. They have considered the facts and circumstances of this country and they have come to the conclusion that a scheme, roughly along the lines that they have set out here in the report, is the only scheme which will pay its way. That would entail that for the type of cover mentioned by Senator Sheehy Skeffington a premium, in the case of the individual, of £15 would represent the necessary premium, not for making a profit but to enable the scheme to pay its way. That is the view of the Advisory Body who have gone carefully into this matter and who have shown in the report the investigations they made and the very careful costings which they carried out and all the material which they collected. That is their view and I accept that view.

I think the report is an excellent one, excellently documented and represents a very careful appreciation of the situation. Accepting that view means this—that if the association that Senator Sheehy Skeffington mentioned, or any other outside association, offered a form of health insurance here, at the premiums which they offer in England, that association would go bankrupt very quickly. It could not carry on and it would be impossible for it to provide health insurance in this country at the premiums that they can offer in England, because our circumstances are quite different. The size of our families here is twice that in England.

In addition, in England there is a full national health scheme and people who effect health insurance only use it for particular purposes. They are content to avail of the State health scheme for a variety of calls which here, under our scheme, would become the subject of insurance expenditure. It is not possible to regard a premium based on English circumstances as being the premium which it would be necessary to charge here. I do not think it would be desirable, in any event, that any of the British insurance companies should, in effect, offer a form of health insurance here under which those paying the premium in England were, in effect, subsidising the market here in this country. That would not be desirable on any grounds and accordingly the prohibition contained in the section is one designed against the outside companies and associations from operating, or offering, health insurance here.

If there is any form of health insurance of a legal kind already entered into by any individual, that is not prohibited. That is the purpose of the saving clause to which Senator Stanford has referred. In sub-section (3) (b) (iv), any lawful contract of insurance entered into before this Act is not in any way interfered with or prohibited, but those who entered into contracts of insurance which they knew, and which the insurance company knew, were not in accordance with the law of this country, can expect no special treatment and they will be excluded. Up to this the Minister for Industry and Commerce, who probably was aware that these policies were on offer here turned the "Nelson eye" because, in fact, there was no alternative form of insurance. That alternative form of insurance will now be available, I hope, in the near future and I have no doubt that the Minister will see that the law in that regard is enforced.

Senator Stanford mentioned—and I must say he put it very well—the case of a person who in fact is accepted by one of these potential associations outside the country and who, no matter what the provisions of the law may be, has been covered and who found that in ill-health he and his family were safeguarded. Such a person was fortunate in having had that form of cover during his own illness and that of his family, but I am sure the Senator will find on inquiry that, if that individual is suffering from a particular malady or condition, the association concerned will continue the insurance but will exclude that particular condition. It may be that a person in good health takes out a form of health insurance and may develop a condition of coronary thrombosis. Such a potential association would continue the insurance, but it would exclude that particular illness and the effects arising from that particular condition. Such an individual, when our health insurance is on offer, will get precisely the same kind of cover that he would now get from the British associations or companies in relation to his condition. In other words, if he had a condition of coronary thrombosis, he would be insured in relation to anything else, but that particular condition would be excluded so that, in fact, precisely the same kind of cover will be offered here as would be available to a person who has been insuring for a number of years, however unlawfully, with British associations.

I should like to impress upon the Seanad that in excluding these British companies I am not, in fact, depriving our people here of any benefit. The premiums mentioned—and you can get a whole variety—are in no way realistic. Having regard to the circumstances of this country, there is no form of British health insurance scheme that could operate in this country except along the lines of the Advisory Body's report. The premiums suggested are based on individual premiums. In fact, the premiums in this report might be considerably different when groups of insurers are taken into account but, in so far as the individual is concerned, these premiums represent the premiums that would have to be charged by any insurance company here putting on offer health insurance for the people. If the aim is to meet costs from the premiums income, then the premiums will have to be along the lines suggested in this report.

Professor Stanford

It seems clear that the Minister is taking a firm line on this. I regret it a little. I do not think it has been absolutely established that this action of our citizens to enter into an agreement with a provident association between 1936 and 1956 is illegal. There is no test case. It is strongly held in some circles that it was legal to do so. The Minister said that the Minister for Industry and Commerce turned the "Nelson eye" to this in the past. He did not say that the Minister condoned it but the distinction is a fine one. I do not really see why the "Nelson eye" could not continue to operate under this Bill.

Why should it not? There are only a few cases. The Minister's practical objection, apart from the legal one— we all stand for law in this House I hope—is that the new scheme will be impoverished. It will lose money. That, I suggest, would be trifling, first, because this simply applies to cases up to 1956 and, secondly, because I think that a great many of the beneficiaries under these provident associations are not reinsuring under the new scheme. I do not think they will.

To meet the Minister's other point, he suggested the case I mentioned will get precisely the same cover under our scheme. The person concerned in this case is quite sure he will not. He is a lawyer and he knows his onions, so to speak, and he is quite sure that our onions will be inferior in this case to the British ones. I think it will be a little hard on him. There will not be many cases of the kind and the scheme will lose very little if the Minister accepts my suggestion. It will help to fight a real injustice, the injustice that for 18 years it was impossible, legally, to insure for this kind of risk in this country. I think it is something like retrospective legislation with its bad name. It is really dating the time when the axe fell, not in 1956 but in 1936. The sections of this Bill virtually fell in 1936. I do not think it is right to keep this clause and I wish I could persuade the Minister.

Mr. Guinness

I wonder would the Minister refer to the point raised by Senator Cox in regard to industrial problems?

Mr. O'Higgins

I am sorry I overlooked that. Frankly, the question of reinsurance was not a matter I had considered but I think that there may be a facet to be considered in relation to what Senator Cox said and I will have it considered between this and Report Stage.

Mr. Guinness

Would the Minister express some view in regard to the provident schemes run by certain industries?

Mr. O'Higgins

I think they are safeguarded already. The different sub-sections in the section are designed to exclude such forms of insurance operated by friendly societies and trade unions and so on which we know of. If there are other forms of insurance run, perhaps, by the smaller companies that we do not know of they will get licences. It is not intended that insurances of that kind should be affected.

Mr. Murphy

Even where they may be run by groups of employees themselves? In some cases they are run by employees and in others by the employees in conjunction with the employers.

Mr. O'Higgins

It is not intended that they should be interfered with because they would not, in fact, constitute a threat to this form of general scheme.

Dr. Sheehy Skeffington

Arising out of the Minister's reply to the main point—and he put forward the same points of view on the Second Stage— that the British companies if they were to operate here would have to have far dearer premiums and so on—I would deny that that was the case— at present these British companies are prepared to operate here. I understand that even some years ago——

Mr. O'Higgins

They are not normal.

Dr. Sheehy Skeffington

Yes, they are perfectly normal. The Minister, I think, does not see the situation as it really is, because they would not be operating exclusively here. They would operate here as an addition to the British market. All their overheads and so on are already pretty well paid for. We should be an additional small market if you like. It is rather like the kind of thing that happens in the industrial field. They would not be operating simply here, but they would be placing the benefits of a large market at the disposal of the Irish consumer, and we should benefit. In other words, the British market enables them to reduce such things as expenses-ratio and so on. We are not injuring any Irish company, because an Irish company was free to operate in the same way and voluntarily went out of business in that field. In suggesting that we should allow British Provident Associations to operate here, I do not think we would injure any interest at all, but if the Minister is right, if he says that it would be crazy of them not to have premiums similar to the kind of ones quoted by the Advisory Body, then why not let them? What is the Minister afraid of? Why does he look upon this as a "threat" if, in fact, the British company will charge the same premium? Might it not be a good way to stimulate competition among private enterprise, which I understand the present Government favours, particularly the Party to which the Minister belongs? Why do we want to insist upon a monopoly in this kind of business?

Mr. O'Higgins

Shall we say that in this regard I am a Socialist?

Professor Hayes

State Socialism.

Dr. Sheehy Skeffington

I wonder if the Minister is entitled so to describe himself. He told us on the Second Stage that it would be simple to introduce a completely socialistic scheme for the whole country, four-fifths of which is already covered, but he said he objected to doing so. I am afraid the Minister is at war within himself in this regard. He thinks of himself as being a Socialist and rejects Socialism, but he applauds that ideal-ised image that he has of himself. I hope he will come a little nearer to it in future.

Question put and agreed to.

SECTION 24.

Question proposed: "That Section 24 stand part of the Bill".

Professor Stanford

May I ask a question, for clarification, in relation to the sub-section which says "It shall not be lawful" and so on? Does the exception granted in sub-section (3) of the previous section—Section 23 —operate against the first sub-section of Section 24? This is important from my point of view and I would be grateful for the Minister's decision. I shall ask it again. Will it be lawful for someone who comes in under lines 29 and 30 to pay this? Suppose he has a contract of insurance which is made before the passing of this Act, is he out of Section 24?

Mr. O'Higgins

He is.

Professor Stanford

In other words, it will be lawful for him to continue to pay that. Therefore, if one amends lines 29 and 30, in the previous section, the amendment of Section 24 would be unnecessary? Is it made clear?

Mr. Cox

It might be well to amend the sub-section to say "save as provided by this Act" or something of that kind. It is terribly comprehensive as it stands.

Mr. O'Higgins

I shall have it considered, to make it clear.

Question put and agreed to.

SECTION 25.

Question proposed: "That Section 25 stand part of the Bill".

Mr. Cox

Is it not a bit skimpy to say here: "The Insurance Acts shall not apply"? That means there is to be no body of law behind insurances under this Act? This is removing the entire corpus of the existing insurance law in relation to policies effected under this Act.

Mr. O'Higgins

The Senator will appreciate that what will be there is all the provisions of the insurance law, which is the law of contract, such as it exists—the ordinary common law with regard to contract, except the statutory additions to the law of contract which are contained in what we call the insurance code. These have regard to various provisions concerning deposits, share capital and matters of that kind. I think those are the particular provisions which will not apply. The general body of law which will apply to contracts under this Bill is the ordinary law of contract as it is known and as it will operate.

Mr. Cox

We are back, then, to the common law?

Mr. O'Higgins

Yes.

Dr. ffrench O'Carroll

I always thought that the law of contract fell rather heavily on the side of the insurance companies as far as premiums were concerned. I think the position in law is that the obligation is entirely on the person who proposes to take out the policy, to make any disclosures which would be relevant to the contract between the premium holder and the company. I do not think the public realise, when they are about to take out an insurance policy, that they are not only obliged to disclose whatever they may know about their health which may affect the premium, but that anything which is not disclosed by a person because he has no knowledge of it and which is subsequently discovered by the company, puts the company in the position by law that they can revoke the contract and confiscate the premiums. I have always felt that the law was very much in favour of the company and that the public were not sufficiently aware of it. Quite naturally, the insurance agent whose object it was to sell a policy did not make that clear to the prospective proposer.

Mr. O'Higgins

A contract of insurance is a contract uberrima fides and it is obligatory to make the disclosures.

Dr. ffrench O'Carroll

Even if he does not know. The contract can be broken subsequently because of disclosures of things which he did not know of, but which may be relevant.

Mr. O'Higgins

I would not be able to follow that. That may be so.

Question put and agreed to.

Sections 26 and 27 and the Title agreed to.

Bill reported without amendment.

Report Stage ordered for Wednesday, 30th January, 1957.

Business suspended at 6 p.m. and resumed at 7 p.m.