1. Ministry of Social Security: The administration of the Plan for Social Security as a whole, including social insurance, national assistance and, voluntary insurance, will be undertaken by a Ministry of Social Security under a Cabinet Minister. The Ministry will establish a network of regional and local Security Offices for the administration of cash benefits and assistance and for other work connected therewith. The Ministry of Social Security will not be responsible for medical treatment which will fall within the sphere of the Health Departments, but there will be a Joint Committee of the Ministry of Social Security and of all Departments concerned in Health and Welfare for promotion of measures designed to prevent disease and reduce the burden on the Social Insurance Fund. In the organisation of the Ministry two points will be regarded as of outstanding importance:–

(a)  Decentralisation and close contact with local agencies of all kinds in dealing with the varied needs of insured persons ;

(b)  Selection and training of staff with special regard to their functions in serving the public and in understanding the human problems with which they will be concerned.

  1. Employment Service:   The employment service of the Ministry of Labour and National Service will either be transferred to the Ministry of Social Security together with the administration of unemployment insurance, or, if retained as part of the functions of the Ministry of Labour and National Service, will be conducted at the local Security Offices.

387. War Pensions:   The relation of the proposed Ministry of Social Security to the Ministry of Pensions is a matter for further consideration. The Ministry of Pensions is essentially a Ministry of War Pensions concerned with providing compensation for disablement and death resulting from :

(a)  Service during the war with the Armed Forces and their auxiliary services.

(b)   War injury sustained by members of the Mercantile Marine, Fishing Fleets and Light Vessel Services.

(c)  War service injury suffered by members of Civil Defence Services.

(d)   War injuries sustained by the civil population.

The Ministry of Pensions dates from the war of 1914-18 and the proposals made at various tunes since that war either to merge the administration of war pensions with some other department or to add to the Ministry of Pensions functions exercised by other departments, such as the administration of old age pensions by the Customs and Excise Department, have had no result. Importance is rightly attached by those interested in the fair treatment of men and women who have given war service to ensuring just and sympathetic consideration of claims based on war disabilities. This object has appeared in the past likely to be served best by having a separate Ministry. On the other hand, the clients of a Ministry of Pensions in the future will all be clients or potential clients of the Ministry of Social Security. Merger of the two Ministries would have the advantage to the individual that, whatever his casualty, he would have to deal with one Ministry only for cash payments and it would facilitate adjustments between war pension payments, disability benefit, guardian benefit or retirement pension. It would avoid duplication of staff and would make easy adjustment of staff to the prospective gradual diminution of war pensions. Whether or not these possible advantages outweigh the reasons for maintaining a separate Ministry of War Pensions is a matter requiring full examination. A similar problem arises as to treatment. Assuming a comprehensive health and rehabilitation service organised by the health departments and the Ministry of Labour and National Service, this service should presumably be available to and used for sufferers from war disability in preference to the setting up or maintenance of separate provision for them.

  1. Register of Insured Persons:   Social insurance involves keeping a register of each insured person and contributions and benefits. The total work involved will be much  less than  at present  when  such records  are kept separately for unemployment insurance and for each of the Approved Societies in  respect  of health insurance,  in  addition  to  records  kept  for workmen’s compensation and pensions.    The question will arise whether this register should be kept centrally or should be decentralised into six or seven regional registers.    There are advantages and disadvantages in each course.

  2. Social Insurance Fund: All compulsory insurance contributions will be paid into a Social Insurance Fund and all the benefits and other insurance payments will be paid from that Fund.    Assistance will be paid from money provided by the Exchequer.  The Social Insurance Statutory Committee described in the next paragraph will report periodically on the financial con­dition of the Fund and will   have the duty and power of recommending changes of contribution and benefit with a view to adjusting the income of the Fund to its liabilities under the various accounts into which the Fund will be divided.

390.Social Insurance Statutory Committee :   A Statutory Committee will be established for Social Insurance, on the lines of the Unemployment Insurance Statutory Committee, with the following powers:

(a)  Making of periodical reports on the financial condition of the Social Insurance Fund and each of its accounts and recommendations for changes of contribution and benefit in accord with such reports;

(b)  Reporting on all Regulations and Orders before they are made, subject to power of the Minister to bring Regulations and Orders into force provisionally for not more than six months pending the consideration by the Committee;

(c) Reporting on any matter referred to them by the Minister;

(d) Reporting on the adequacy of the benefits for subsistence needs and recommending changes of benefit and contribution required to adjust benefit rates to changes in the value of money.

Note.–The first three of these powers, (a), (b), and (c), are the same as those of the Unemployment Insurance Statutory Committee; the last is additional.

  1. [Industrial Assurance Board]:   The work of voluntary insurance, in so far as it is transacted directly on behalf of the State, will be conducted by an Industrial Assurance Board with independent finance and statutory powers subject to the general responsibility of the Minister (see paras. 181-192 and Appendix D).

392.[Arrangements with Friendly Societies]: While financially independent Approved Societies as administrators of compulsory cash benefits for sickness will disappear, societies giving friendly benefits of a substantial amount will be able under arrangements with the Ministry of Social Security to act as agents for paying out together their voluntary benefits and the benefits of the compulsory scheme, thus retaining an integral part in the administration of disability benefits and the advantage to the individual of getting his total cash provision in the case of disability from a single source. These arrange­ments, as is explained in paras. 66-69, will apply both to Friendly Societies and to Trade Unions giving friendly benefits.    The making of such arrange­ments depends on the consent of the societies concerned.  The proposal to make them is bracketed, as desirable but not essential (see para. 72).    Existing arrangements with Trade Unions with regard to unemployment benefits will continue on the same lines.

  1. Statutory Associations in Scheduled Industries:   In each of the industries scheduled as having materially more than the average industrial risk of accident or disease and in any other industries in which this appears desirable Statutory Associations of employers and employees will be estab­lished for the purposes set out in paras. 91-92.

394.  Appeal on Benefits : All decisions by, or on behalf of, the Ministry of Social Security on claims for benefit, in respect alike of amount and of conditions or period, will be subject to appeal to independent local tribunals analogous to the existing Courts of Referees with further appeal to an Umpire appointed by the Crown, whose decision will be final.   The machinery will be local and informal and will be uniform for all claims, except possibly those for industrial pension and industrial grant (see para. 336 (c)).

  1. Appeals on Contributions:   Determination by or on behalf of the Minister as to liability to contribution, including the class in which contribution shall be made, will similarly be subject to appeals to local tribunals consisting of Chairmen of the Courts of Referees with further appeal to the Umpire. The problem of the relation between decisions of the Umpire and the ordinary Courts of Law is a matter for further examination.

  2. Children’s Allowances:   Some organisation will be needed for ad­ministering the proposed children’s allowances, that is to say,   both for authorising the payments and for making them.   For the reasons given in para. 424, the most appropriate department for this purpose appears to be the Ministry of Social Security, but the Ministry should act in close co­operation with the authorities concerned for the welfare and the education of children.

  3. Advice to Citizens:  One of the serious disadvantages of the present division of security functions between so many different agencies is the difficulty experienced by insured persons in understanding their rights and duties and in finding their way through the system to the proper authority to deal with their case. This, apart from the direct loss and delay to insured persons, leads some­ times to unjustified resentment and sometimes to lack of interest.   The social security system even when unified and simplified in the way proposed here must still be a machine with many parts and complications to deal with all the complexities of need and variety of persons.   Citizens cannot be left to find out all about it by reading official pamphlets, however clearly they may be written.   There should be in every local Security Office an Advice Bureau to which every person in doubt or difficulty can be referred and which will be able to tell him, not only about the official provision for social security, but about all the other organs–official, semi-official and voluntary, central or local–which may be able to help him in his difficulty.

  4. Statistics and Intelligence:  The Ministry of Social Security should have a Division of Statistics and Intelligence, under first-rate leadership and with adequate resources’ to make use not only of its own material but of the experiences of other countries in the same field.   The Ministry should be able to make grants for the carrying out of research in all matters where further knowledge might reduce the burdens on the Fund.

  5. Loss of Office: Provisions will be required to prevent hardship in the case of persons employed in the administration of the present insurance schemes or the allied services who are displaced as a result of the changes made and for whom suitable alternative employment is not available.

Note.–On balance, there is not likely to be any large immediate change in the total numbers of persons required to administer the unified Plan for Social Security as compared with the numbers now employed in social insurance and allied services by the National Government, by Local Authorities or by other agencies, including Approved Societies, insurance companies and indemnity associations. On the one hand, extension of the scope of social security, through bringing in new classes into insurance and new benefits, will increase the total amount of work to be done. On the other hand, unification of administration and substitution of insurance for assistance will reduce the staff required for the same amount of security. Ultimately the total numbers of staff needed will tend to fall rather than rise, but at first these two influences seem likely to offset one another. Social security under the new system, while it certainly involves no great increase in the number of officials, if any increase at all, is unlikely to involve making any large numbers of those now employed redundant at any early date. But some changes and transfers are inevitable and it is essential that in making these changes for the common good the community should do justice to those whose livelihoods are affected by them.

  1. Loss of Business: Another problem is presented by the possible effects upon established businesses of certain of the proposals in the Report, in particular those relating to workmen’s compensation and to funeral grant. Supersession of the present scheme of workmen’s compensation, whether by the proposals of the Report (Change 4 in paras. 77-105) or by any other form of converting into a social service, will make superfluous part of the business of those insurance companies which have undertaken employers’ liability. Acceptance of the proposal for a funeral grant (Change 18 in paras. 157-160) may affect the business of industrial assurance very considerably, whether the existing provisions of the Industrial Assurance Act of 1923 are left or are changed. Most of the offices undertaking industrial assurance will also be affected by the proposal to supersede the approved society system in its present form (Change 3 in paras. 48-76). This does not raise a case for compensation for loss of business, since the Approved Societies are independent bodies which cannot make a profit, but that, in practice, the change may affect the business of industrial assurance is clear. If the recommendation for conversion of industrial assurance into a public service (Change 23 in paras. 181-192) is adopted, all compensation questions affecting the Industrial Life Offices will be merged in the general problem of the terms on which they shall be replaced by an Industrial Assurance Board. In that case no important problems of com­pensation for loss of business will arise, except in regard to the proprietary companies now undertaking employers’ liability insurance. This problem is limited in scale, since it affects only about 15 per cent, of the total paid as workmen’s compensation; the rest is paid through mutual associations whose supersession may raise questions of compensating for loss of office, but will not raise questions of compensating for loss of business. It would be inappro­priate in this Report to make definite proposals as to the treatment of this problem, since it must be considered in relation to the general issue of com­pensation where action by the State affects private interests. The State cannot undertake to compensate individuals in every case for damage which they may suffer as a result of developments of State policy. To do so would involve compensating all those who were damaged by, say, a change of policy in regard to tariffs or in regard to the use of land for different types of building. All that can be done here is to indicate that there is a problem which will call for consideration, in conjunction with other possible developments of State action, and that in relation to the proposals of this Report this problem can be a comparatively small one.

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