MINISTRY OF LAROUR. (Hansard, 7 November 1921)

§ Mr. HAYWARD
When discussion of this Vote was interrupted on Thursday night last, I was asking the Minister for Labour if he would be good enough to give us some further explanation. I notice that the Estimate is dated 19th October, which probably accounts for the fact of my not being able to make it agree with the report of the Actuary. Since that date there have been various concessions which will undoubtedly increase the final charge upon the Treasury, and it would be an advantage if the right hon. Gentleman would put it on record what the final estimate of this charge is likely to be.

§ The MINISTER of LABOUR (Dr. Macnamara)
The Vote before us is for £2,192,000, and that will carry us to the end of the financial year. There is, as will be seen from the footnote, a further sum of £670,000, which is for the next financial year. The two together, as my hon. Friend pointed out last Thursday, 88 amount to £2,862,000, against £2,538,000 in the Actuary's report. The hon. Member asks me for an explanation of the difference. There are several reasons. In the first place, the Actuary's estimate was based on a calculation of 1,750,000 persons unemployed, whereas the estimate is based on a calculation of 1,600,000 persons. Secondly, since the estimate was framed there have been certain concessions which will cost more money. There has been the invalid husband, to use the phraseology of the Debate, and there has been the housekeeper to look after the children. Together they make up, roughly, for the difference.

§ Mr. MYERS
I notice that part of this Estimate is to be set aside for the training of women, but there are no details set out. There is in existence a Central Committee for the training of women, and excellent work has been done in the London area and at Sheffield, Cardiff, Birmingham, Barrow and elsewhere. The first 13 weeks of that training scheme have terminated, and it would be desirable if we could be informed what is going to be done in the future and to what extent these funds are to be drawn upon for the purpose. The Central Committee takes juveniles from 14 to 16 years of age and trains them in housecraft and the like.

The DEPUTY-CHAIRMAN
I understand that the matter which the hon. Member is now discussing does not come in this Vote at all, and we can only discuss matters for which money is provided by this Vote.

§ Mr. MYERS
Do I understand that we are discussing the Estimate of the Minister of Labour in which the training of women is specified?

The DEPUTY-CHAIRMAN
I understand that it does not come in this Vote. This money provides the Government's contribution to the Unemployed Workers' Dependants Fund.

§ Mr. MYERS
Is it not a fact that, if there be any balance after those items have been met, it will go for the purpose of training women?

§ Dr. MACNAMARA
No. We are here finding money for the Unemployed Workers' Dependants (Temporary Provision) Bill, and if at the end of our transactions we have any money in hand, it 89 will go to the insurance fund, and not for the training of women or men.

Sir J. D. REES
Mr. Deputy-Speaker, you have put the question, as I understand it, of this supplementary sum of 22,192,000 for the Ministry of Labour. I have been lying in wait with reference to paragraph 4 of the Memorandum which relates to the Trade Facilities Bill. Am I or am I not in order in making some remarks upon the provisions of the Trade Facilities Bill, and, if not, where should they come in?

The DEPUTY-CHAIRMAN
They do not come in now.

§ Colonel WEDGWOOD
We are providing £22,192,000 for Unemployed Workers' Dependants. Is that an estimate of what the Government will actually pay out or of what must be allotted to this year, taking into account the fact that subsequent years may be better, and that the Government may recoup part of their expenses at this time of specially bad trade? I want to know whether the total additional expenditure in this financial year is £2,192,000 or whether the Government are estimating for a further expenditure which will be repaid in future years as the fund goes on?

§ Dr. MACNAMARA
This Estimate is for £2,192,000, which is the contribution of the State in this financial year to the Unemployed Workers' Dependants Fund. The £670,000 in the Estimate is for next year. This Bill lasts for six months and runs to 7th May, and the £670,000 is the charge in the next-financial year. The £115,000 referred to at the bottom of the page is not in that amount at all. This money will be distributed amongst the Votes of the various Departments responsible for the surplus.

§ Sir D. MACLEAN
What is the position of the reserve fund? Will any surplus that may occur fall into it? Happily, some time ago there were substantial reserves, and can the right hon. Gentleman tell us what is the position now?

§ Dr. MACNAMARA
The money is collected under the National Insurance Act, and these people will get the supplementary aid. The point arises now whether the State or the Unemployed Fund should receive any surplus from the Dependants Fund. That is a proper 90 question to answer now. There was the £22,000,000 in that fund, and it was exhausted about the end of June. Under the Act of the 1st July we had to deal with the exceptional position by reducing benefit and increasing contributions. We propose to keep the benefit at the reduced level and keep the contributions at the higher level until the fund is solvent again, which, on the basis of 1,250,000 unemployed in the year ending June, 1922, and 500,000 in the year ending June, 1923, would make the fund solvent again by June, 1923, by which time we can then review the whole situation. I have got borrowing powers up to £20,000,000 to carry on the fund. So far I have drawn upon the fund to the extent of between £5,000,000 and £6,000,000, but if my calculations are correct this fund will be restored to solvency by June, 1923.

§ Mr. CLYNES
I wish to put a question on, a point of administration. The grants to be made from this fund are grants to wives and to dependent children. I conclude that the Department has taken some step to inform the employment exchanges and the local committees of the provisions of this new Act, and I would like to ask whether the right hon. Gentleman can tell us in what terms they have been so informed, and in what way the officers are required to give effect to the provisions of the Act? For instance, will the husband have to certify that his wife is his wife? Will documents proving the claim have to be produced, and if so, in the event of a certificate of birth in the case of a child having to be produced to secure 1s. per week, will it mean that the applicant will have to pay the cost of that certificate?

§ Dr. MACNAMARA
No.

§ Mr. CLYNES
These are matters of importance. I am sure my right hon. Friend wishes to administer this Act with a minimum of domestic inconvenience in the case of any working-class members, and I would like some assurance in order that the husbands and the wives will he reassured, and not feel that they are being put to any undue trouble in the individual applications they will have to make for grants under this fund.

§ Sir GODFREY COLLINS
The present position of the National Employment Insurance Fund raises a matter of some consequence. If I understood the 91 Minister of Labour correctly, I think he said there was no balance in hand at the end of June last and that there is a deficit to-day of about £6,000,000. In other words, he is drawing on his borrowing powers to the extent of £1,500,000 every month, and that is based on the assumption of an unemployment figure of 1,500,000, and if the present situation continues, and that is evidently in the mind of the Government, because in the Estimate we are considering they allow for 1,600,000 unemployed—

§ Dr. MACNAMARA
During the next six months.

§ Sir G. COLLINS
Yes, that is the period to which I am drawing attention. I wish to know what will be the position at the end of the present financial year of this unemployed fund. Is this large sum to come out of the pockets of the taxpayers this year? I understand that the right hon. Gentleman is borrowing the money through the Treasury.

§ Dr. MACNAMARA
Under the Act.

§ Sir G. COLLINS
Yes, under the Act. Is this deficit to fall on the national revenue this year, or is he going to side-track, so to speak, that deficit and place it on future years? This is a subject which has only arisen during the short Debate this afternoon, and the deficit is mounting up month by month. If that continues I want to know if the Minister of Labour will be required to come to the House of Commons before the present financial year is over and ask for increased borrowing powers. In the Bill which is being referred to the Minister of Labour has, I believe, borrowing powers up to £10,000,000.

§ Dr. MACNAMARA
£20,000,000.

§ Sir G. COLLINS
I am glad that the right hon. Gentleman has large borrowing powers which will carry him over the present financial year. I wish to point out, however, that we are living on borrowed money. We are pledging the future, and the present position, bad as it is, is steadily getting worse owing to the policy of the Government.

§ Mr. W. THORNE
Assuming that the £1,000,000 to meet the requirements of the dependants and the wives and 92 children is insufficient to meet national obligations between now and the end of the financial year, what will be the position of the wives and children?

Sir J. D. REES
I know, Mr. Deputy-Chairman, that you will not allow any discussion upon anything that does not immediately arise out of this Vote. I wish to know what a young and inexperienced Member has to do when he finds an explanatory memorandum explaining the very Votes before the Committee, and when he proposes to deal briefly with one of those explanatory notes he is restrained under the rules of the House? The hon. Member for Spen Valley (Mr. Myers) was in the same difficulty. I think that either a discussion on these points should be allowed or the Departments should be restrained from making references in explanatory notes to which hon. Members are not allowed to refer in debate.

The DEPUTY-CHAIRMAN
The matter is very clear. Under the Unemployed Workers' Dependants (Temporary Provision) Bill the Government contribution amounts to £2,192,000, and that is the sum we are discussing on this Vote. Beyond that the discussion is out of order.

Major BARNES
Some obscurity still remains on one of the points which has been raised. We have an Estimate which I understand sets forth the total liability assumed by the State in respect of the Unemployed Workers' Dependants Fund. That shows a total liability of £2,862,000, of which £2,192,000 falls this year and £670,000 next year. During the passage of the Bill through the House a number of concessions were made, although not to the extent which some of us would have liked, but which the Chancellor of the Exchequer thought were very substantial, and they were estimated to cost about £500,000 or £600,000. All those concessions were made subsequent to the 19th October. This Estimate is dated the 19th October of this year, and that is prior to these concessions being made. What puzzles us is that this amount should include the concessions that were to be made. It also includes the concessions relating to Ireland. The Bill as introduced on the 19th did not include Ireland. This Estimate, which is dated the 19th of October, does include Ireland. It is difficult to understand how an Estimate produced before the concessions were made can make provision for them?

§ Dr. MACNAMARA
With regard to the point raised by the hon. Member for East Nottingham (Sir J. D. Rees). His reference is to the Estimate before us, and I may say that the explanatory page was issued before the Trade Facilities Bill was complete. The hon. Baronet's proper course was to have made his comment during the proceedings at some stage of the Bill. As regards the hon. Member for West Ham (Mr. W. Thorne), he asks what will happen when this six months' Fund is exhausted. I take power in the Bill to continue after the period for which the grant is made the contribution for such weeks as are necessary. I am much obliged to my hon. Friend who put the question as to the Unemployment Insurance Fund. I spoke offhand when I stated that we had already drawn on this Fund £5,000,000 or £6,000,000. The amount should have been £4,250,000, and I am very glad of this opportunity of making the correction. What I mean is that we have run into debt so far, in respect of the £20,000,000 I am entitled to borrow under the Act, to the extent of £4,250,000. I have no doubt I shall be able to get through to the end of the financial year with the powers I have. I shall keep the benefit down from 15s. to 12s., and shall keep the contributions going until the Fund is solvent, and until I have repaid to the Treasury such sums as I have borrowed from it. I hope the Fund will be solvent by June, 1923.
My right hon. Friend the Member for Platting (Mr. Clynes) has asked what steps we shall take to administer this new fund as expeditiously and as smoothly as possible. I am greatly indebted to the local employment committees and to the officers of the Employment Exchanges for their assistance in this matter. The first payments, for a half-week, were made on Saturday last, and my reports, from all parts of the country, show that those payments were made without any hitch, thanks to the untiring efforts and the pains taken by the local employment committees to examine into the eligibility of claimants. We were able, in fact, to make payments last Saturday to the extent of 90 per cent. of the claims that had been put in, and I repeat I am greatly indebted to the local employment committees and the Employment Exchange officers for the untiring work which made this possible. I watched the working at 94 one particular Exchange, and was very delighted with the smooth and expeditious way in which things went as a result of the trouble which had been taken beforehand. As to the arrangements for paying claims for dependants, and especially for children, the local employment committees and the Exchange officials have already had full and complete information in anticipation of the passing of the Act, and have had sent to them forms which the applicants will be required to fill up. These forms are as simple as possible, and, generally speaking, we shall accept the statement of the applicant, provided it is signed by a Justice of the Peace, a trade union official, a minister of religion, or some other reputable person. Of course, if a claim is disputed or in doubt, birth certificate will be required, for which we shall charge 6d., but I imagine that in the great bulk of cases the forms having been filled up and countersigned in the way I have suggested, that will be sufficient. I know that this Fund will cast a very heavy burden, in the matter of examination and investigation on local committees and Exchange officers, but they have done their work so admirably in the past that I am sure my right hon. Friend may rest quite satisfied that they will carry them out again as loyally and as patiently as they did the work under the Unemployment Insurance Act.

§ Mr. MARRIOTT
I want to raise two points. The first is with regard to the Loan Fund. I understood my right hon. Friend to say that he had drawn on that fund to the extent of £4,250,000 at present, and I think he also gave an estimate that the monthly drawing on it is £1,500,000.

§ Dr. MACNAMARA
That depends on the number of persons unemployed.

§ Mr. MARRIOTT
May I ask the right hon. Gentleman if he can give us any estimate of the drawings on the fund for the months which are immediately ahead of us? I think he told us he fully expected that the £20,000,000 would carry him through the present financial year. If that is his expectation it means that at the present time he is drawing on the fund to the extent of £3,000,000 per month. It is a simple matter of figures, £4,250,000 have already been expended out of the Loan Fund of £20,000,000. There are five months between now and 95 the close of the financial year. My right hon. Friend anticipates that the £20,000,000 will see us through that time, but is he not understating his expectation? Will it not carry us a good deal beyond that?

§ Dr. MACNAMARA
Certainly.

§ Mr. MARRIOTT
Can the right hon. Gentleman give us any estimate of what, roughly speaking, he is taking from the fund at the present time per month? If he can it may reassure the minds of many of us. My other point is this. In the first part of his Memorandum my right hon. Friend states that the sum which is to be immediately provided by the State for unemployment is less than £12,000,000. Should not the word be "ultimately" instead of "immediately"? I understand that the £12,000,000 will not be immediately provided, but some of it will be provided in the financial year 1922–23. What is immediately provided is a sum on the one hand of £2,192,000, on the other hand of 2330,000, and, under a third head, of Unemployment Relief of £5,500,000, or a total immediately provided of £8,022,000. The rest of the items which appear in the Memorandum are items which will not come into payment until after the close of the financial year, and, therefore, do not come within the provision immediately to be made. I have been a little mystified by the use of this word "immediately."

§ Sir G. COLLINS
We now learn that the deficit at the present time is not £6,000,000, but £4,250,000, and we are paying out of the fund about £1,000,000 per month. I understand the deficit came into being towards the end of June. Since then about four months have elapsed, and it is mounting up at the rate of £1,000,000 per month. At the end of the financial year, if the present rate of unemployment is maintained, the deficit on the Natonal Insurance Unemployment Fund will be very considerable, as I have already pointed out. I am anxious to support the point raised by the hon. Member for East Newcastle (Major Barnes) in connection with the total sum which the Committee is asked to vote this afternoon. My hon. Friend very rightly pointed out that this Estimate was printed on the 19th of October. Let me remind the right hon. Gentleman of the concessions which he made during the 96 passage of the Bill subsequently to that date. He extended the Bill to Ireland at a cost of £70,000. He deleted the restrictions as to the 1s. per week up to four children, and that concession cost £200,000. Here are two specific concessions which the Minister granted during the passing of the Bill, and which this Estimate makes no provision for. I think the Estimate, on closer examination, may show what has really happened. Are not the Government, having printed the Estimate, and then decided to ask for further sums of money, being driven to place the burden on future years? I shall be glad to have some information from the Minister on that point. It is estimated that the Exchequer contribution to be found next year will amount to £670,000. What is the position this afternoon? The Minister of Labour, during the course of the present financial year, is being forced to borrow £7,000,000 in order to pay benefits under the Unemployment Insurance Act, and in addition the Committee is being asked to vote certain sums of money this afternoon involving further liabilities on the Exchequer next year.

§ Dr. MACNAMARA
This Estimate has nothing to do with the Unemployment Insurance Act, except that the people who pay are under the Insurance Act and are entitled to benefits. This, however, is supplementary to the benefits of the Insurance Act. I am not now dealing with the Unemployed Workers' Dependants Fund, but with the Unemployment Insurance Fund. I am estimating that, during the year ending with June, 1922, there will be 1,250,000 persons unemployed, and thereafter 500,000 persons for the year June, 1922—June, 1923. By that time, on that basis—that is to say, by keeping contributions at their present level and benefits at the reduced level—the fund will be solvent. I have so far borrowed £4,250,000. I have no doubt that we shall be able to carry on, and that if I have to borrow £20,000,000, I shall be able to repay the money by reason of the condition of the fund which will result by keeping up the contribution and keeping the benefit down by June, 1923. That is the position of that fund. This is a totally different thing. This is an ad hoc fund collected from the workpeople, the employers and the State who are concerned under the Insurance Act, and it is to be paid in 97 grants for the purpose of supplementary assistance to persons who are out of employment. My hon. and gallant Friend the Member for East Newcastle (Major Barnes) has great difficulty in understanding precisely what is the difference between the Estimate, which is £2,192,000 for this financial year and £670,000 for the next financial year, and the Actuary's report, which is something like £324,000 less.

Major BARNES
That was not my point. My point was as to how an Estimate of £2,192,000, made before the Bill was introduced and before any concessions were made, still remains at £2,192,000 after the concessions have been made.

§ Dr. MACNAMARA
I have tried to explain on the face of the Estimate. At the bottom of page 5 there is a reference to the case of Ireland—

Major BARNES
That is for next year.

§ Dr. MACNAMARA
The difference between the Actuary's report and the Estimate is accounted for in the following way. The Actuary estimates that there will be 1,750,000 persons unemployed, while this Estimate is for 1,600,000 persons, including Ireland. Inasmuch as 1,600,000 are allowed for, more will be paid in contributions than if the Estimate were for 1,750,000, and, therefore, the State contribution has to be more. That is one of the reasons for the difference of £324,000 between the Estimate and the Actuary's report. The difference is also accounted for partly by the provision which, as shown on the Estimate, we have made for Ireland, and for the two other concessions in respect of the invalid husband and the house-keeper. My hon. and gallant Friend made a complaint that we are casting some sort of obligation on the future with regard to the sum of £670,000. But what are we to do? Here is a Bill that is going to run from the 7th November to the 7th May. Unhappily, the calendar provides that the 31st March comes in between, and the £2,192,000 is for the period 7th November—31st March, and the £670,000 is for the period 31st March—7th May. Is there anything wrong in carrying over to the next financial year the period between 31st March and 7th May in a Bill which I have told the House all the time is going 98 to be for six months? I am bound to say with great respect that that is a sort of criticism which I do not think is very helpful.

§ Major HAYWARD
There is one point of principle and of policy which has arisen out of this discussion, and which, although small, is important. We are told that, if there is any surplus in the fund at the end of the period, it is to be paid over to the Unemployment Insurance Fund, as provided in the Bill. I think I am entitled to discuss that as a matter of policy, because this is a new service. The right hon. Gentleman himself has told us that this has nothing to do with the Unemployment Insurance. Fund, but is an ad hoc fund. I would ask, in that case, why any surplus should be paid over to that fund? This fund is contributed to by three parties—the State, the employer, and the employé; and if there is a balance, then certainly, so far as the employers and employés are concerned, it ought to be paid back to them. It is utterly unfair, unwarranted, and unjustifiable that these contributions should have to be made by employers and employés at all, because this is called an insurance scheme. Although the Bill provides that any surplus shall be paid over to the Unemployment Insurance Fund, the Bill is not yet an Act, and therefore, I take it, that this being a new service, I am entitled to discuss the question of policy underlying the grant. I only want, to deal with one point, and that very shortly. It is entirely unfair and unjust that the employers and the employés should be asked to contribute to this under the name of an insurance scheme, because it is not an insurance scheme. It abrogates every principle of any insurance scheme that anybody, certainly in this Committee, has ever heard of, and for two reasons. First of all, you are bringing into a new insurance scheme an existing liability for payments in respect of 1,750,000 unemployed persons who are already unemployed. That is an immediate charge, according to the actuary's report, of £240,000 per week. You cannot bring these existing casualties into a new insurance scheme and call it insurance. You did not do that when you started the Unemployment Insurance Act. What you did then was to exact contributions from persons already employed, and nobody could get the benefit until they had been employed 99 for 12 weeks, or, at any rate, until they had paid 12 contributions. The right hon. Gentleman justifies it by saying that as a matter of fact these people have their risk covered for the succeeding six months. That is true in part, but if you want to act fairly by them you should get your actuary to tell you what it is going to cost to insure those persons for the six months, and charge them accordingly. You ought not to bring in all the existing casualties. Then, again, those people, after the six months are past, will have to contribute when they will not be covered at all, so you are simply exacting premiums or contributions from them while they are not covered. But that is not all.

The DEPUTY-CHAIRMAN
It is perfectly true that the Bill has not actually passed both Houses of Parliament, but the principle of the Bill has passed this House, and I could not allow a general discussion on the Bill, or we should be discussing it all over again.

§ Sir D. MACLEAN
On that point of Order. While I am not in favour of obviously unnecessary repetition of arguments which have been previously used, I would put it to you, Sir Edwin, for the purpose of safeguarding the rights of Members in Committee, that, where a new service is proposed, as is now the case, so far as I am able to understand, Members are open to raise the whole question in Committee even though it may have been debated in other stages. I admit that the whole question of the principle of differentiating between what is insurance and what is not would be outside the scope of the discussion, but I submit that matters which are raised in connection with such a grant of money as this are open to discussion by the Committee, even though the arguments have been used on other stages of the Bill, to which, of course, this is closely related.

The DEPUTY-CHAIRMAN
That is quite true when the sum of money is for a new service, but this, I think, does not quite come within that category. It is for the purpose of providing the State's contribution to a fund which is already established. We cannot discuss here whether it was right to establish that fund, or the merits of that fund. All that we can discuss is how it is proposed 100 to deal with this sum of £2,192,000. We cannot discuss the merits of the original Unemployment Insurance Act or of the present temporary Measure, but it would be in order to discuss the Minister's administration procedure in dealing with this sum of £2,192,000.

§ Major HAYWARD
I do not propose, and was not proposing, to enter into a general discussion such as took place on the Second Reading and during the Committee stage of the Bill. I was directing my observations to one point of a purely financial character, and it was only from that point of view that I was considering the Bill. My point was that it was not fair to the contributors who are to pay this money that, if there is any balance over and above their contributions, it should be paid into another fund altogether. The only other matter that I desire to point out is that in the case of boys, girls, unmarried men, unmarried women, married men without dependants, and married women without dependants, you are exacting a contribution for which they derive no benefit whatever. They are covered from no risk and insured in no sense whatever, and that, I say, is a most unjust procedure.

§ Mr. W. THORNE
I understand that we are entitled to discuss what the Minister is going to do with the balance in the event of there being a balance. The hon. Member for Seaham (Mr. Hayward) suggested that, if there is a balance, that balance should be returned to the contributors—that is to say, the workmen, the employers and the State. I recognise that it would be easy to hand back part of the balance to the employers and part to the State, but, in the name of common sense, how are you going to find all the workmen who have been contributing? In consequence of the casual nature of their employment, in many cases, it would be impossible for anyone to find out where they might be at the time when the balance was in existence, and, therefore, from that point of view, I recognise that it would be impracticable to divide the surplus again between the three contributing bodies, and I think that all of my colleagues on this side of the Committee have come to the conclusion that the best way to deal with the surplus, if there be any, would be to hand it over to the original Unemploy- 101 ment Insurance Fund. In consequence, however, of the one or two small concessions which the Minister has made, I understand it is anticipated that there will be a deficit, so that I do not think we need worry our heads at all about a balance, because probably there will not be any.

§ Dr. MACNAMARA
The principle which was settled by the Second Reading of the Bill is not before the Committee. What the hon. Member objects to is paying back the balance to the three parties to the Insurance Fund. Clause 2, Sub-section (7) says: Any balance remaining in the Unemployed Workers' Dependants Fund, after discharging its liabilities under this Act, shall be apportioned equitably, in accordance with directions to be given by the Minister of Labour, between the Unemployment Fund and the several funds out of which benefits under any special schemes are payable. I talk to the people who are under the Insurance Act—the workpeople, the employers, and the State. I say, "I will give you this ad hoc fund. The men and women who are receiving benefit shall as the result of this fund get this little supplementary allowance in respect of their wives and children." If there is a balance what more equitable thing than to return it to those who built the fund up? There must be a balance, though it can only be a very narrow one. You cannot wind this thing up precisely. I shall have to take a week's contribution to wind it up, and there may be some margin left over. In that case I shall propose to distribute it equitably amongst the three parties contributory to the Unemployment Insurance Fund.