114

MAJORITY REPORT.

CHAPTER IX.

INEQUALITIES OF BENEFIT IN DIFFERENT

APPROVED SOCIETIES.

245. We now come to the main ground on which the Approved
Society system, as it now exists, has been attacked by many of
the witnesses who gave evidence on the subject, namely, the
serious inequalities of benefit to which the system gives rise.
It has already been explained that under the scheme laid down
in 1911, and continued to the present date, each Approved Society
1s a separate financial unit, controlling its own funds and standing
to gain or lose as the result of its own experience. Any surplus
found in the funds of a Society on valuation can be used solely
for the benefit of the members of that Society. Although the
Act provides for a flat rate of contribution from members of all
Societies, there has been a wide variation in the amounts of
the surpluses in different Societies on valuation. As a result of
the first valuation as at the end of 1918, some Societies were
still unable to give anything more than the normal statutory
benefits, while others had sufficiently large surpluses to enable
them to provide their members not only with substantial
increases of the normal cash benefits but also with valuable
additional benefits in the nature of treatment. The results of
the second valuation are not yet completely available, but it is
clear that the divergences will be even greater than on the
occasion of the first valuation ; for while it has already been found
that some Societies will still be unable to provide more than the
normal statutory benefits, in the more fortunate Societies the
surplus on the second valuation is being found to be about three
times as large as that which they enjoyed on the first. We are
not surprised that these great disparities should have occasioned
disappointment and dissatisfaction in certain quarters, and that
they should have provoked keen criticism of the present system.
246. It will be useful at this point to illustrate by actual
figures the range of divergence to which we refer. In Appendix A
of the Report of the Government Actuary on the First Valuation
(Cd. 1662) is given a complete statement of the surpluses
and deficiencies of all the Societies. But to measure the real
extent of the disparities we must find the results reduced in some
form to a rate per unit of membership. For this we may refer
to Table X of the same Report. We may also refer to a table
and diagrams which we asked Sir Walter Kinnear (Q. 813-8)
to prepare for our use. We should explain that a ‘‘ unit ’’ in
these diagrams is the equivalent of a combined addition of 1s.
to the weekly rate of sickness benefit, 6d. to that of disablement
benefit and 2s. to maternity benefit. It will be seen that the
range of units of disposable surplus is considerable, the highest