(c) crown copyright
Catalogue Reference:CAB/24/94
Image Reference:0001
3
This Document is the Property of '
His B r i t a n n i c Majesty^ Government,
IJ
J) \
fl.H.1-2.
N
^ g ^ L ^ ^ f i ^ a n d - u r f l by t h e M i n i s t e r of H e a l t h on t h e proposed
lnoree.se of c a s h b e n e f i t s
and c o n t r i b u t i o n s .
As a r e s u l t of t h e d e p r e c i a t i o n of money, t h e cash b e n e f i t s
under t h e N a t i o n a l H e a l t h I n s u r a n c e Acts which have n o t been
i n c r e a s e d s i n c e t h e o r i g i n a l Act came i n t o o p e r a t i o n i n 1912, a r e
now wholly i n a d e q u a t e .
If t h e s e b e n e f i t s were i n c r e a s e d i n
p r o p o r t i o n t o t h e r i s e i n t h e c o s t of l i v i n g and t h e average
i n c r e a s e , i n t h e wages of t h e i n s u r e d p o p u l a t i o n , t h e y would
r e q u i r e t o be d o u b l e d .
But i n view of t h e l i a b i l i t y which such
an i n c r e a s e would impose on t h e Exchequer and having r e g a r d a l s o
t o t h e unemployment i n s u r a n c e c o n t r i b u t i o n s which, as a r e s u l t
:
of t h e proposed e x t e n s i o n of unemployment i n s u r a n c e , w i l l be
posal, p a y a b l e i n r e s p e c t of some t e n m i l l i o n i n s u r e d p e r s o n s h i t h e r t o
i n s u r e d a g a i n s t s i c k n e s s o n l y , I propose t o i n c r e a s e
b e n e f i t f o r men and women by 5 / - ,
m a t e r n i t y b e n e f i t by l o / ^ . '
sickness
d i s a b l e m e n t b e n e f i t by 2/6
and
T h e s e . p r o p o s a l s would, I b e l i e v e , be
g e n e r a l l y accepted, by Approved S o c i e t i e s and t h e i n c r e a s e i n t h e
c o n t r i b u t i o n s of employers and workers-' which t h e y i n v o l v e would
n o t be l i k e l y . t o meet w i t h any s e r i o u s o p p o s i t i o n i n P a r l i a m e n t Sricj.
The need f o r amending l e g i s l a t i o n i s u r g e n t . , Approved
S o c i e t i e s which f o r months have been r e s t i v e have now become
clamorous.
T h e i r members demand t h a t t h e c a s h b e n e f i t s
b e a r a c l o s e r r e l a t i o n t o t h e c o s t of l i v i n g ,
and s t a f f s
and t h e i r
officials
a r e i n s i s t e n t l y demanding t h e l i v i n g wage which only
an increased, a d m i n i s t r a t i o n a l l o w a n c e w i l l p r o v i d e .
t h e i n t e r - r e l t i o n of o l d age p e n s i o n s , unemployment
-
shall
I n view of
insurance
and h e a l t h i n s u r a n c e , , , I have w i t h s t o o d t h i s p r e s s u r e as long as
p o s s i b l e i n s p i t e of most u r g e n t a p p e a l s from r e p r e s e n t a t i v e s
i n s u r e d p e r s o n s and t h e i r s o c i e t i e s .
For many weeks t h e
of
financial
/questions
q u e s t i o n s i n v o l v e d have been b e f o r e t h e T r e a s u r y ] and w h i l e ,
in
view of t h e c o m p l i c a t i o n s i n s e p a r a b l e from t h e c o n c u r r e n t demands,
on t h e one hand of Approved S o c i e t i e s and d o c t o r s , and on t h e
o t h e r hand of o t h e r s o c i a l s e r v i c e s , I have r e f r a i n e d
from
p r e s s i n g f o r an e a r l i e r pronouncement, t h e time h a s now a r r i v e d
when I am compelled t o ask t h e C a b i n e t t o s a n c t i o n t h e immediate
i n t r o d u c t i o n of a B i l l embodying t h e s e
proposals.
Even i f immediate l e g i s l a t i o n i s o b t a i n e d f o r t h e r e v i s i o n
of c a s h b e n e f i t s
and c o n t r i b u t i o n s , some t i m e must e l a p s e
t h e changes can t a k e e f f e c t .
before
The c o n t r i b u t i o n s cannot be
i n c r e a s e d -except from t h e b e g i n n i n g of a h a l f y e a r ( J a n u a r y o r
July).
Before t h a t h a l f - y e a r b e g i n s m i l l i o n s of
contribution
c a r d s have t o be p r i n t e d , d i s t r i b u t e d t o Approved S o c i e t i e s
t h r o u g h o u t t h e c o u n t r y and d i s t r i b u t e d by them t o t h e i r members:
d i e s f o r new stamps have t o be c u t and m i l l i o n s of stamps have
t o be p r i n t e d and d i s t r i b u t e d t o l o o a l p o s t o f f i c e s f o r s a l e
the p u b l i c .
T,;is i s a work of m o n t h s .
to
At t h e b e s t t h e scheme
c a n n o t be b r o u g h t i n t o o p e r a t i o n b e f o r e 1 s t J u l y , 1 9 2 0 , w h i l e
/
delay lii passing the B i l l w i l l delay i t f u r t h e r t i l l January 1921,
If t h e s e u r g e n t l y needed amendments a r e d e l a y e d u n t i l J a n u a r y , 1 9 2 1 .
t h e growing u n r e s t among i n s u r e d p e r s o n s and t h e s t a f f s
of
Approved S o c i e t i e s w i l l be g r a v e l y p r e j u d i c i a l t o t h e working of,
N a t i o n a l H e a l t h I n s u r a n c e : and u n l e s s a B i l l oan be p a s s e d b e f o r e
t h e end of F e b r u a r y a t t h e l a t e s t , a c r i t i c a l s i t u a t i o n w i l l be
created.
D o t a i l s of P r o p o s a l s ,
i
The d e t a i l s of my p r o p o s a l s a r c a s
Sickness Benefit
"
"
(Men)
(Women)
follows
t o be i n c r e a s e d from 1 0 / - t o 1 5 / - a week,
"
"
"
7/6
t o 12/6 "
"
D i s a b l e m e n t " (Men & Women)"'
. ".
"
5/-
t o 7/6
"
Maternity Benefit.
"
"
As t o t h i s t h e r e a r e a l t e r n a t i v e schemes..
Under one p l a n i t i s p r o p o s e d , i n view of t h e new h e a l t h
/services
s e r v i c e s c o n t e m p l a t e d by t h e M i n i s t r y , t o r e t a i n t h e c a s h
J
benefit at 30/-.
Another p r o p o s a l i s t o r a i s e t h e
cash
benefit to 40/-,
I n a memorandum ( C P . 2 1 1 ) p r e p a r e d by t h e
C h a n c e l l o r of t h e Exchequer a m a t e r n i t y b e n e f i t of 5 0 / - ,
however,
contemplated..
d i c a l Benefit
benefit
is,
(including drugs)
The c o n t r i b u t i o n t o
this
out of I n s u r a n c e funds i s a t . p r e s e n t 6'/6d. p e r i n s u r e d
p e r s o n per y e a r .
I t i s proposed t o i n c r e a s e t h i s t o 9 / 6 . , t h e
maximum amount a v a i l a b l e i f
the weekly c o n t r i b u t i o n i s n o t t o
be i n c r e a s e d by more t h a n 3 d .
I am a d v i s e d t h a t i t would not
be p r a c t i c a b l e t o i n c r e a s e t h e weekly c o n t r i b u t i o n s by more t h a n
t h i s amount s i m u l t a n e o u s l y with t h e e x t e n s i o n of unemployment
I n s u r a n c e t o some t e n m i l l i o n p e r s o n s h i t h e r t o I n s u r e d a g a i n s t
s i c k n e s s only..,
The t o t a l c o s t of m e d i c a l b e n e f i t
d r u g s ) a t ' p r e s e n t i s l o / 9 d . , and t h e e x t r a Exchequer
towards meeting t h i s is. 4 / 3 d .
The e x t r a Exchequer
(including
contribution
contribution
was o r i g i n a l l y l i m i t e d t o t h e 2 / 6 d . conceded by the Government
I n . 1 9 1 2 , but i t h a s s i n c e been i n c r e a s e d by m i l e a g e g r a n t s and
war bonus,;, t h e whole c o s t of which h a s f a l l e n upon p u b l i c
funds.
The d o c t o r s are novv a s k i n g f o r 13/6d e x c l u s i v e of m i l e a g e ;
the
l a t t e r w i l l c o s t a p p r o x i m a t e l y £350,000 f o r Great B r i t a i n ,
which
i s ilie e q u i v a l e n t of an a d d i t i o n of 6d.. t o whatever i s f i x e d as
t h e f l a t . r a t e c a p i t a t i o n payment..
2/6d. per insured person..
c o s t of m e d i c a l b e n e f i t ,
16/6d.
Drugs a r e e s t i m a t e d t o c o s t
On t h e b a s i s of t h i s demand, t h e
total
i n c l u d i n g m i l e a g e and d r u g s , would bo
I do n o t t h i n k , however, t h a t t h e r e i s any need t o
concede t h e d o c t o r s
1
demands i n . f u l l .
A c a p i t a t i o n r a t e of
1 0 / - ( e x c l u d i n g m i l e a g e ) would, i n my o p i n i o n , s e c u r e t h e
/
c o n t i n u a n c e of t h e p a n e l s y s t e m ; and I am bound t o admit t h a t
i n many o a s e s t h i s would r e p r e s e n t t h e v a l u e of t h e s e r v i c e s as
a c t u a l l y r e n d e r e d now.
But w h i l e t h e n e g o t i a t i o n s have made ­
i t c l e a r t h a t a c a p i t a t i o n r a t e of 1 0 / - might be a c c e p t e d ,
g r u d g i n g l y by t h e m a j o r i t y of i n s u r a n c e p r a c t i t i o n e r s , we s h o u l d ,
I b e l i e v e , l o s e many good men, and I t h i n k i t would ho unwise t o
concede t h e b a r e minimum r e q u i r e d t o p r e v e n t a s t r i k e .
I have
t o remember a l s o thafe p r a c t i c e c o s t s have g r e a t l y i n c r e a s e d ,
*.
:
/demands
the
demands of many d e m o b i l i s e d and d i s c h a r g e d men f o r m e d i c a l
w
1
a t t e n d a n c e r e p r e s e n t a m a t e r i a l a del i t Ion to t h e m e d i c a l man s
1
a v e r a g e work, and I i n t e n d under t h e c o n d i t i o n s of t h e now
R e g u l a t i o n s t o e x a c t a much b e t t e r s t a n d a r d of s e r v i c e from
the Insurance p r a c t i t i o n e r s o
all
The s u c c e s s of t h e M i n i s t r y of
H e a l t h depends above a l l upon t h e w i l l i n g c o - o p e r a t i o n of t h e
m e d i c a l p r o f e s s i o n , and I am s a t i s f i e d t h a t t h e i r g o o d w i l l , which
I s so e s s e n t i a l , cannot be s e c u r e d e x c e p t by c o n c e d i n g a f i g u r e which
t h e moderate men w i l l r e g a r d as f a i r .
a u t h o r i t y of t h e C a b i n e t t o o f f e r
I t h e r e f o r e ask, f o r
the
a r a t e - o f . i l / 6 d . , which w i t h
m i l e a g e i s e q u i v a l e n t t o 1 2 / - . , or l / 6 d , more t h a n t h e b a r e
minimum f o r which I b e l i e v e t h e c o n t i n u a oo of t h e s e r v i c e can
be s e c u r e d .
On t h i s b a s i s t h e t o t a l c o s t of m e d i c a l b e n e f i t
as
from J a n u a r y w i l l be 14/6 d., i n s t e a d of 1 0 / 9 d . a t p r e s e n t ,
which t h e I n s u r a n c e funds w i l l c o n t r i b u t e 9 / 6 d .
towards
The e x t r a
Exchequer c o n t r i b u t i o n w i l l t h e n be 5 / - i n s t e a d of 4 / 3 d . as at
present.
T h is means t h a t of t h e t o t a l i n c r e a s e of 3 / 9 d . ,
funds w i l l c o n t r i b u t e 3 / - and t h e Exchequer o n l y 9 d .
t o add t h a t i t
insurance
I ought
i s an e s s e n t i a l p a r t of t h e b a r g a i n t h a t t h e new
r a t e should t a k e e f f e c t
[Sanatorium B e n e f i t ,
from t h e b e g i n n i n g of 1 9 2 0 .
I t i s proposed t o a b o l i s h t h i s b e n e f i t
and
I
t o throw upon l o c a l a u t h o r i t i e s and t h e Exchequer t h e same
responsibilities
i n r e s p e c t of t h e i n s u r e d as a r c u n d e r t a k e n
a t p r e s e n t i n r e s p e c t of t h e u n i n s u r e d .
The e s t i m a t e s
c o s t h c r e u n d e r g i v e n assume an e q u a l d i s t r i b u t i o n of t h e
f e r r e d c h a r g e between l o c a l and c e n t r a l
of.
transr
funds.
jjJBgnsejs of A d m i n i s t r a t i o n of Approved S o c i e t i e s .
I t i s proposed
t o i n c r e a s e t h e a l l o w a n c e ' u n d e r t h i s head from 3/5d t o 4 / 6 per
annum i n r e s p e c t of each i n s u r e d p e r s o n .
iSStributions.
I t I s proposed t o i n c r e a s e t h e r a t e s by 3 d . a week
f o r b o t h men and women. 2d e x t r a b e i n g p a i d by t h e employer
and i d by t h e w o r k e r .
The r a t e s w i l l t h e n be a s f o l l o w s : ­
Employer
5d i n s t e a d of 3d
Worker
5d
11
ft
'i
Employer
5d
Worker
4d
4d
"7T"
ii
it
3d
ti
i?
3d
I
it
6d
9d
Tho scheme assumes t h a t c o r r e s p o n d i n g unemployment
benefits
-(15/- f o r men and 12/6d f o r women) w i l l be p r o v i d e d by t h e
scheme which t h e M i n i s t r y of Labour i s p r e p a r i n g .
A memorandum
h a s a l r e a d y b e e n s u b m i t t e d showing t h e d i f f i c u l t i e s
which w i l l
a r i s e i f t h e unemployment b e n e f i t be f i x e d a t more t h a n 1 8 / * a
week (men) or 12/6 (women).
The a d d i t i o n a l c o s t t o t h e E x c h e q u e r .
The c o s t of t h e changes /must be c o n s i d e r e d i n c o n n e c t i o n w i t h
t h e n e g o t i a t i o n s now i n p r o g r e s s w i t h t h e d o c t o r s ,
I f t h e new
r a t e i s l i m i t e d t o 1 0 / - * , t h o b a r e minimum which w i l l s e c u r e t h e
c o n t i n u a n c e of t h e p r e s e n t
benefit
s e r v i c e , t h o t o t a l c o s t of m e d i c a l
i n c l u d i n g m i l e a g e and drugs w i l l bo 1 3 / - , and t h o
a d d i t i o n a l c o s t t o t h e Exchequer of t h e complete scheme w i l l bo
(i)
(ii)
(lii)
If m a t e r n i t y b e n e f i t be r e t a i n e d a t 3 0 / "
"
Under ( i i )
£1,550,000,
"
"
" increased to £2,
£1,725,000
"
"
"
£2,400,000
and ( i i i )
"
" £2.10s.
t h e r e d e m p t i o n of t h e r e s e r v e v a l u e s
will
a l s o be p r o l o n g e d by f i v e y e a r s , i . e . t o 30-35 y e a r s i n s t e a d of
t h e p r e s e n t e s t i m a t e d p e r i o d of 25 - 3 0 y e a r s ; were i t n o t f o r
this,
t h e a d d i t i o n a l : c o s t t o t h e Exchequer u n d e r e i t h e r of t h o s e schemes
would be i n c r e a s e d by a f u r t h e r
If,
£500,000.
however, as I p r o p o s e , t h e new c a p i t a t i o n r a t e i s 1 2 / * ,
i n c l u d i n g m i l e a g e , t h e l o w e s t f i g u r e which w i l l secure t h e g o o d w i l l
of t h e m e d i c a l p r o f e s s i o n , t h e Exchequer l i a b i l i t y w i l l bo
i n c r e a s e d by £ 1 , 0 5 0 , 0 0 0 .
Assuming t h a t m a t e r n i t y b e n e f i t
is
i n c r e a s e d as I propose t o £2 and n o t t o 5 0 / - , t h e a d d i t i o n a l
cost
t o t h e e x c h e q u e r of t h e c o m p l e t e scheme w i l l t h u s bo £ 2 , 7 7 5 , 0 0 0 .
Maternity
Benefit.
'
­ .:V- '
-''
:
-
The view of my a d v i s e r s i s t h a t i f t h i s b e n e f i t must be
...
­
i n c r e a s e d i t need n o t be brought up t o more t h a n 4 0 / - .
There
i s no pronounced demand for m a t e r i a l i n c r e a s e of t h £ s cash
benefit;
t h e p u b l i c e x p e c t a t i o n seems r a t h e r f o r
improved
h e a l t h s e r v i c e s i n . r e s p o t of pregnancy and c h i l d - b i r t h .
The
a d d i t i o n a l c o s t of £700,000 t o p u b l i c funds i n v o l v e d by an
i n c r e a s e of t h e b e n e f i t - t o 5 0 ' / - ( £ 1 , 2 0 0 , 0 0 0 i f t h e
redemption
p e r i o d f o r r e s e r v e v a l u e s be n o t e x t e n d e d ) i s t h e r e f o r e
r e g a r d e d as
not
essential.
M i n i s t r y of H e a l t h .
C.ADDIS0N.
5,12.19.