UNEMPLOYMENT INSURANCE BILL. (Hansard, 16 July 1940)

§ LORD TRYON

My Lords, this Unemployment Insurance Bill proposes to make certain changes in the law relating to unemployment insurance and unemployment assistance. The changes fall into two parts. In the first place it is proposed to make certain improvements in the rates of and rules governing unemployment benefit. In the second place it is proposed to bring within the scope of the unemployment insurance and unemployment assistance schemes a class of persons who have hitherto been outside them. The reasons for the changes are as follows. With regard to the improvement in benefits, the cost of living has gone up by 26 points, or about 17 per cent. since the beginning of the war. Now the rates of unemployment assistance have already been raised and, as to unemployment benefit, the rates for dependent children have also been increased since the war started. It is now proposed to raise the basic rates for adults and young persons. The Unemployment insurance Statutory Committee, in their last Report, referred to the possibility that a rise in the cost of living might make it desirable to amend the rates of benefit and contribution, but pointed out at the same time that this could not be done by them on the finance of the schemes but would require legislation. Hence this Bill. They had already recommended, some time ago, that the salary limit for non-manual workers should be raised.

The new class to be brought into the scope of unemployment benefit is the "black coated" (as he is called) worker with a remuneration of £250 up to £420 a year, which is above the limit in the present Acts. Many of these whose position has hitherto been regarded as secure are liable to suffer temporary unemployment from a variety of causes connected with the war. It is true that the scheme known as the Prevention and Relief of Distress Scheme, which was put 965 into operation at the outbreak of war, met their needs to some extent, but it is felt that they should be put on the same footing as others who have unemployment insurance, giving them definite benefit rights under a contributory scheme, as their first line of defence. In addition the possibility of post-war unemployment amongst this class is one which ought to be provided for.

So much for the reasons for the changes. The detailed changes which are proposed are as follows: In the first place it is suggested that the weekly rate of benefit under the general scheme should be raised by 3s. for men and women, that is to say, persons aged 21 and over, and 2s. for young men and young women aged 18 to 20. So the present men's rate of 17s. will become £1 and the present women's rate of 15s. will become 18s. Young men will get 16s. instead of 14s. as hitherto and young women 14s. instead of 12s. Similar increases in benefit are proposed for the agricultural scheme. There it is suggested that the rate for men should be raised by 3s. and that for women, young men and young women by 2s. This will give men 18s., women and young men 15s. and young women 12s., and a corollary to this latter change will be the raising of the maximum amount of weekly benefit which could be received. Ever since the inception of the agricultural scheme there has been a limit on the amount of benefit receivable in a week, having regard to the prevailing rates of agricultural wages; that limit was originally 30s. a week. With increases in agricultural wages and in benefit rates the limit has been raised successively to 33s. and 35s. It is now proposed that the limit should be 41s. Finally, so far as benefit is concerned, it is proposed to make a change which has long been sought by insured contributors and for which the special circumstances of to-day afford justification. Unemployment benefit is only payable in respect of continuous periods of unemployment, and at present no continuous period can be less than three days; benefit may be payable only if a man is unemployed at least three days out of any six consecutive days. The change which it is proposed to make is that benefit may be payable if a man is unemployed for at least two days out of any six consecutive clays.

966 The changes just referred to will, of course, involve additional expenditure out of the Unemployment Fund. To meet this it is proposed to raise the weekly rates of contribution under the general scheme by a penny, and under the agricultural scheme by a halfpenny, for men, women, young men and young women respectively in respect of each of the three contributing parties—namely, employer, worker, Exchequer. The remaining change proposed by the Bill is to bring into the unemployment insurance and unemployment assistance schemes the new class referred to. This is the class popularly known as the "black-coated" workers. It comprises non-manual workers whose rate of remuneration exceeds £250 a year and does not exceed £420 a year. "Black-coated" workers whose rate of remuneration does not exceed £250 a year are already within the scope of the scheme. Apart from the desirability of including this class on merit there is an incidental advantage. A number of workers will, as a result of war-time wage increases or of overtime, go over the limit; but for the present Bill these persons would in course of time lose all their rights under the unemployment insurance scheme for which they have been paying for years past. This would be a distinct hardship. The Bill obviates it. The accepted principle for dealing with unemployment is to make unemployment benefit the first line of defence and unemployment assistance the second line.

The Bill which has just been introduced provides that after the lapse of one year the new class who are brought into insurance by the Bill will be brought into the assistance scheme also. It is, of course, unnecessary that they should be brought in before that date as they must acquire a contribution qualification of thirty weeks' contributions before being entitled to benefit, and when they have a title to benefit it gives, under present emergency conditions, a maximum of 180 days so that, generally speaking, there is no need for recourse to the unemployment assistance scheme in the first twelve months. In exceptional cases the Prevention and Relief of Distress Scheme will meet all needs. The proposal is that these changes with regard to benefit rates and rules shall come into operation on August 1; the new contributions will be payable as from August 5; and the 967 new class will be brought in as from September 2. The chief features of this Bill are the increase of benefit, the increase of contributions, and the inclusion of a new and very deserving class in insurance. I move that this Bill be read a second time.