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separate Administration Account. Any deficiency in this account, if not otherwise made good, has to be met by a special levy. This provision is to ensure that the Benefit Fund shall only be required to provide a given sum in respect of the costs of administration.

It may be thought that amounts such as the balance of the Contingencies Fund or of the Administration Account should be treated in the valuation as assets of the Benefit Fund. be in order. It is true that the Contingencies Fund balance is transferable This course, however, would not to the Benefit Fund immediately after the valuation date but, if the valuation shows a surplus, such balance cannot on that occasion be treated as additional surplus available for distribution. As regards the balance of the Administration Account, special steps have to be taken if it is desired to transfer back to the Benefit Fund any sums appropriated for purposes of administration. Such a transfer is at the option of the society and the balance does not become part of the Benefit Fund until the society makes a decision to that effect.

It follows that the contribution to be valued is that part thereof which falls to be credited to the Benefit Fund, i.e., the full contribution, less the amounts appropriated respectively to the Contingencies Fund, the Central Fund and the Sinking Fund for the redemption of reserve values.

Although the balance of the Contingencies Fund cannot be treated as an asset in the valuation it is nevertheless true that it forms an additional source of strength to a society and, as such, is a factor of importance in estimating its financial position. In order, therefore, to bring the full resources of each society under notice, the Valuation Balance Sheets include the total funds as assets, such part thereof as is represented by the Contingencies Fund and administration balances being shown on the other side as liabilities. It should be added that on both sides of the Valuation Balance Sheet there frequently appear small adjusting items consisting of "late credits and debits," i.e., sums which had not been brought to account at the date when the books of the societies were made up but which affect the funds as existing on the valuation date and the inclusion of which is necessary, therefore, to a correct statement of the position.

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It will be seen that the process of valuation relates to the future and not to the past. This is a general truth, whatever the type of insurance organisation whose contracts relevant only in that it provides an index to what the future may be are being valued. Past experience is expected to produce; records of such experience indeed supply the basis for the tables of mortality, sickness, &c., used in actuarial valuations.

Printed under the authority of HIS MAJESTY'S STATIONERY OFFIOR
By Eyre and Spottiswoode, Ltd., East Harding Street, E.C. 4,
Printers to the King's most Excellent Majesty.

MINISTRY OF LABOUR.

INTERDEPARTMENTAL COMMITTEE ON HEALTH AND UNEMPLOYMENT INSURANCE.

FIRST AND SECOND INTERIM REPORTS.

FIRST INTERIM REPORT.

Grant towards Administrative Expenses of Associations having Arrangements under Section 17 of the Unemployment Insurance Act, 1920.

SECOND INTERIM REPORT.

Possibility of introducing Combined Card for Health and Unemployment Insurance Contributions in July, 1922.

Presented to Parliament by Command of His Majesty.

LONDON:

PRINTED AND PUBLISHED BY

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28, ABINGDON STREET, LONDON, S.W.1;

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MINISTRY OF LABOUR.

INTERDEPARTMENTAL COMMITTEE ON HEALTH AND UNEMPLOYMENT INSURANCE.

Members of the Committee:

Sir ALFRED W. WATSON, K.C.B., Chairman.

Sir WALTER S. KINNEAR, K.B.E.

E. J. STROHMENGER, Esq., C.B.

S. P. VIVIAN, Esq.

Ministry of Health.

Sir JAMES LEISHMAN, Scottish Board of Health.

Sir DAVID SHACKLETON, K.C.B.

T. W. PHILLIPS, Esq., C.B., C.B.E. Ministry of Labour.

F. G. BOWERS, Esq., O.B.E.

J. F. G. PRICE, Esq.

F. PHILLIPS, Esq., Treasury.

A. HENRY, Esq., Government Actuary's Department.

J. M. GLEN, Ministry of Labour

A. W. NEVILLE, Ministry of Health

}

Joint Secretaries.

The Committee was appointed on the 23rd day of January, 1922, with the following terms of reference :

To consider the relations of Health Insurance and Unemployment Insurance and to investigate the possibility of reducing the total cost of administration by modifying the Unemployment Insurance Scheme and by amalgamating Unemployment and Health Insurance cards, records, and, as far as possible, administration.

The cost of printing and publishing this Report is £6.

INTERDEPARTMENTAL COMMITTEE ON HEALTH AND UNEMPLOYMENT INSURANCE.

FIRST INTERIM REPORT.

To the Rt. Hon. Sir ALFRED MOND, Bart., M.P.,
Minister of Health,

and

The Rt. Hon. T. J. MACNAMARA, LL.D., M.P.,
Minister of Labour.

GENTLEMEN,

1. On the 23rd January, 1922, you appointed us as a Committee to consider the relations of Health Insurance and Unemployment Insurance and to investigate the possibility of reducing the total cost of administration by modifying the Unemployment Insurance scheme and by amalgamating Unemployment and Health Insurance cards, records, and, as far as possible, administration.

2. In the First Interim Report of the Committee on National Expenditure the following paragraphs occur (page 147):

"Insurance benefits from the Fund are now paid in certain cases through the medium of Associations, such as Trade Unions. These payments are made under Section 17 of the Act of 1920, and the Unions receive one shilling for administration expenses for every week's benefit they pay out. Unfortunately, from a variety of causes, this pro. cedure, instead of reducing the cost to the Taxpayer as originally anticipated, actually increases it, and the payments to the Unions for these services amounted to £500,000 in 1921-22.

"Unless a more complete scheme whereby each industry would look after its own unemployed can be introduced in the near future, the present arrangement should be reviewed."

and we understand that a Committee of the Cabinet which considered this Report recommended that the matter be referred to us.

In view of the heavy cost to the Exchequer entailed by the payment to Associations under Section 17 of the Unemployment Insurance Act, we have felt it necessary to take this question into early consideration, particularly in view of the fact that a decision upon it need not depend upon any other action that may be taken as the result of our survey of the subject remitted to us. We, therefore, present this Interim Report dealing solely with Section 17 of the Unemployment Insurance Act, 1920.

3. The Section provides facilities whereby the unemployment benefit of insured persons who are members of Associations may, under certain conditions, be paid to them by the Associations instead of by the Employment Exchanges. The Associations paying the benefit are, in fact, those Trade Unions and other societies which provide unemployment benefit out of their own funds. It is a condition of the Section that the benefits so paid out of voluntary funds shall be at least 5s. a week in the case of men and 4s. a week in the case of women, with proportionate amounts in the case of boys and girls. The other important conditions required by the Section are (i) that the Association must have a satisfactory system of ascertaining the wages and conditions prevailing in every employment within the meaning of the Act in which its members are engaged; and (ii) that the Association must have a satisfactory system of obtaining from employers notifications of vacancies and of giving notice thereof to its unemployed members.

4. In theory the payments made by the Associations to their members are not payments of unemployment benefit under the Acts, but are payments in lieu of such benefit, and are made under the rules of the Association and not under the rules of the Unemployment Fund. These latter rules only enter into the question of determining what repayment is due to the Association.

In actual practice, however, Associations pay their private benefits under their own rules and State benefit only as authorised by the Department.

5. The number of Associations at present working under the Section is 174, including a membership of approximately 2,237,000. The largest membership included since the operation of the 1920 Act was on 14th February, 1921, when arrangements existed with 183 Associations, including 4,108,000 persons, and arrangements with a number of other Associations were on the point of completion. The reduction of numbers and the failure to complete arrangements have mainly arisen from the difficulties. with which Trade Unions have met in the continuance of their unemployment allowances under the present abnormal condi

tions.

6. The latest figures, relating to 31st January, 1922, show that in the week ending on that date the number of current claims for benefit through Associations was 241,233 Under the Section

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