§ Every workman who, having been employed in a trade mentioned in the Sixth Schedule to this Act (in this Act referred to as "an insured trade"), is unemployed, and in whose case the conditions laid down by this part of this Act (in this Act referred to as "statutory conditions") are fulfilled, shall be entitled, subject to the provisions of this Part of this Act, to receive payments (in this Act referred to as "unemployment benefit") at weekly or other prescribed intervals at such rates and for such periods as are authorised by or under the Seventh Schedule to this Act, so long as those conditions continue to be fulfilled, and so long as he is not disqualified under this Act for the receipt of unemployment benefit.
§ Mr. JOYNSON-HICKSI beg to move after the word "trade" ["employed in a trade"], to insert the words, "desires to become insured under the provisions of this Act." With regard to the observations with which the President of the Board of Trade prefaced these proceedings, I must say I do not think that the principle of compulsion has been altogether accepted by the House.
§ Mr. JOYNSON-HICKSThe Bill as it stands is clearly a Bill for absolutely compulsory insurance for all men in particular trades, whether they like it or not. It is quite true that on the Second Reading of the Bill it might be imagined that we had assented to the compulsory system of Unemployed Insurance set out in the Bill; but I would remind the Committee that during the Second Reading Debates the greater part 1641 of the attention of the House was directed to the sickness portion of the Bill, and it was quite impossible for any hon. Members who objected to the compulsory part of the insurance, to vote against the Second Reading of the Bill, because, by so doing, they might be voting against the invalidity portion, with which they might have been very strongly in sympathy. I do not think we heard, either during the First or Second Reading Debates, any argument from the Government in favour of the principle of compulsion, and before we proceed to the details of this Bill we ought, in my opinion, to ask the Government to tell us upon what they are founding this scheme. It is an absolutely new scheme so far as Great Britain is concerned. Nothing of the kind has ever before taken place in this country, and we should like to know from the Government whether they are proposing this scheme in consequence of the great success which similar schemes have met with in other countries. Can the right hon. Gentleman tell us that Unemployment Insurance of this kind has been adopted with success in any other country; if he could that would be a great argument in favour of adopting it in this country. I know that Germany, Switzerland, and other countries have tried to tackle this question, and if the right hon. Gentleman can only show to us that they have tackled it successfully, then I should be only too pleased to support the application of the compulsory principle to this Bill. I think we ought to realise that we are putting on the working men, whether they like it or not, an additional burden; firstly, under the first part of the Bill, of 4d. per week. Some fourteen million people are being compelled by Part I. of the Bill to contribute 4d. per week, and under Part II., which we are discussing here, another 1½ million or two million men will be compulsorily bound to pay another 2½d. per week. Whether they be good, bad or indifferent workmen, and whether they are likely to be unemployed or not, this contribution will be compulsorily upon them. I cannot help thinking that a system of compulsorily insurance will hit the good workman and ease the position of the bad workman.
My experience of commerce is that a good workman is nearly always employed; he is kept, on even in slack times. We know that this Bill does not touch the question of strikes or lock-outs, which, of course, equally affect the good and the bad workmen. I submit to the Committee 1642 that in times of bad trade the employer nearly always keeps on the good workman; he always manages to find something for him to do; it is the bad and indifferent workman, it is the loafer, who is the first person to be thrown out of employment in bad times; and I think you will find that while the good workman will get no real benefit under the provisions for this scheme of compulsory insurance, he will be compelled to pay for the relief of the bad and indifferent workman, who is the first person to be thrown out of employment in slack times. I believe there never has been a single instance, either on the Continent or in America, where the compulsory system of insurance has been successful. It was tried once in Switzerland, and it proved a complete failure. In other parts of the Continent there is a municipal system of voluntary insurance against unemployment. At Berne, Ghent, Strasburg, and in Norway and Denmark there are flourishing systems of insurance against unemployment, but they are all on a voluntary and not a compulsory basis. Of course, it is open to anyone to say that what other countries cannot do Great Britain can do, but I do think that the Government, before we pass to the details of this scheme, ought at least to give us some idea that they have considered the mode in which this will work in the light of past experience. I think I am correct, also, in saying that both the Majority and Minority Reports of the Poor Law Commission do not recommend a compulsory system of insurance. These Reports are of great importance, and are entitled to grave consideration on our part. Up to the present we have had no statement and no evidence from the Government of the way in which the compulsory proposals can be applied with success, and it is in order to enable the Government to make some such statement—bearing in mind, too, that I am open to conviction by argument—that I move this Amendment, raising the question of a compulsory as against a voluntary scheme.
Mr. BUXTONI have no complaint, to make of the hon. Member for raising this point; as a matter of fact, however, he is mistaken in thinking that this question of the compulsory principle was not discussed on the Second Reading of this Bill. Heaven forbid that I should ask him, or any other hon. Member to listen to any speeches that I may make in the House, but if he will refer to the OFFICIAL REPORT, 1643 he will see that, as responsible for Part II., I did go into some detail into the question as to why we favoured a compulsory, as against a voluntary, system; and I may say also that my right hon. Friend, the Home Secretary, as he then was (Mr. Churchill), who is likewise interested in Part II. of the Bill, gave additional arguments showing the advantage of a compulsory over a voluntary system. As far as I know it was the general feeling of the House that any scheme which is to be made effective must be upon a compulsory basis. The right hon. Gentleman the Member for East Worcestershire (Mr. Austen Chamberlain), speaking after the Chancellor of the Exchequer, said he quite agreed that the scheme, if it was to be successful, must be made compulsory. The hon. Gentleman asked if we are founding our proposals on experiment elsewhere; we are not doing that, but we are founding our scheme on experience elsewhere which has been unsuccessful, and therefore we are trying to avoid the mistakes which they illustrate. Most of the voluntary systems, I think, practically all of them, except the Ghent system, have been unsuccessful. I quite agree with the hon. Member that compulsory proposals also have been tried without success, but I think I may add, with regard to the one which operated with most success, that that was unsuccessful because practically it selected bad lives, and, in the second place, there was no means of collecting the contributions. The workman paid in or not, as he chose. The employer was not brought in, and, consequently, the municipality made a deficit at the end of the year. It is obvious that on such a basis as that the scheme was bound to fail.
But take the voluntary schemes. Take the Ghent system. The basis of that is a Government grant solely given to recognised associations, and, consequently, only applied to members of trade unions. There is a great deal to be said for that, and we have incorporated in Part II. some of the provisions of the Ghent system. In a later Clause in the Bill, the hon. Member will find we are providing for voluntary insurance as well as compulsory insurance. The result of the Ghent system is this: that while undoubtedly it is an advantage to encourage unemployment benefit being given by recognised associations—by trades unions and others—it really covers a very limited sphere. It covers the 1644 sphere of action of those who have already, by their own efforts, provided more or less for an unemployed benefit. We want, by this Bill, not only to assist them in that good object and in that good work which they have done in the past, but we want to extend the advantages of insurance to those who have not, so far, been able to provide such a benefit. Take, roughly, the figure of 2,400,000 adults who will be brought in under this scheme. Something like 400,000 of them already are provided with an unemployed benefit, but the remaining 2,000,000 have provided for no such benefit. Under the Ghent system the 400,000 would have an additional benefit, but the 2,000,000 would be left out in the cold. They can only be brought in by a comprehensive scheme, including all the various trades and grades, and it would be utterly impossible to do it otherwise. That really is our answer to the hon. Member. We desire to bring in new classes under a new system, and we feel that it must be compulsory, otherwise they cannot possibly benefit under this Act. We believe, also, that from the point of view of economy, the system, as proposed, is one that will be workable. Any other system—voluntary system—necessarily picks out the bad lives. These are likely to be unemployed, and obviously such a scheme as that would be financially unsound. Our actuary went into the matter very carefully, and came to the conclusion that a compulsory basis of membership was an essential condition. I hope the hon. Gentleman will be satisfied that we have given the matter careful consideration. We are clearly of opinion that unless we have a general compulsory system, the advantages of the Bill will not be available for that particular class to whom we are most desirous that its special benefits should be applied.
§ Mr. PETOI want to say a word or two in support of this Amendment partly because I have got an Amendment later on in the Bill which is designed to lessen what I think is a great hardship underlying the whole of this principle. I notice the right hon. Gentleman said that the result of experience abroad was that they had come to the conclusion that for any scheme of insurance against unemployment to be effective it must be compulsory. I entirely agreed with the hon. Member for Brentford, when he said that he was perfectly in accord with the idea of compulsory provision against sickness, and yet was entirely out of sympathy with the principle of compulsory contributions 1645 against unemployment. No matter how skilful a workman may be, no matter how attentive he may be to his business in the early part of his training, all are liable to sickness, and therefore, he has a very definite risk which it is to his interest to ensure against; but I maintain that in the question of unemployment there are countless thousands of men in this country who, when they arrive at the age of twenty or twenty-one, become thoroughly good workmen, and their skill and industry is such that they are practically free from any risk whatever of unemployment until they arrive at a very considerable age, and begin to drop out of employment owing to old age, which is entirely another matter. Therefore it really amounts to this, we must have a compulsory levy upon all workmen—good, bad, or indifferent—in order to make this scheme effective. You are introducing the principle of insisting that the most skilled workman in the country shall pay a levy every week to ensure against a risk which is not a risk so far as he is concerned, but which is run by those who are not so fortunate in being as skilful as himself. I do not consider that that is a just principle. We have already in this country practically adopted the principle of a level rate of wage—a standard rate of wage in different trades. I am now speaking from my own experience in the building trade, and I should like to point out how it really works out in that trade.
Take the case of a joiner's shop. It is the only example I propose to offer. The men there may all be paid an even rate of 10d. per hour, but it is well known to masters and foremen that there are many men in every joiner's shop in London worth more than the standard rate of wages, and that in busy times there are also a good many men who are worth very much less than that standard rate. There are men who can be put on any class of work, and they are never flung out of employment when once an employer is fortunate enough to get them into his shop. Therefore, I say, is it not reasonable to look into the real operation of things over which any legislation may have control. It may be said that it may be perfectly right from the trade unionist's point of view that there should be a standard minimum rate of wage for everybody, whether good, bad or indifferent. But how it really works out is this: A skilful workman, who is certainly worth over 10d. an hour, is kept on from year to year until he arrives at the age of fifty-five or sixty, but the unskillful 1646 workman has no certainty of employment. He is only employed periodically and spasmodically when there is a rush of work, and therefore, although he is paid at the same hourly rate of wages as the skilful workman, in a number of years his average pay is really very much less. That is where unemployment insurance comes in. Personally I do not consider it is fair that it should be so. It is not fair that the most skilful man in every trade who has no fear of unemployment whateyer should be compelled to contribute every week so as to keep those who are less skilful than himself during their periods of unemployment. Therefore, I think if the experience on which the Government are going, as the right hon. Gentleman has said, is that to make this scheme successful it must be compulsory, we must admit at the very start that it means making the most skilful men in a trade pay a weekly contribution out of their wages to those who are less skilful. That is a system of levelling down instead of levelling up, with which personally I am not at all in agreement.
§ Sir ALFRED MONDThe hon. Member who last spoke appears to be entirely out of sympathy with insurance of this kind, but I should like to point out to him that the classes in this country which make a point of insuring themselves against unemployment are the most skilled classes. A very large portion of the membership of our trades unions consists of men who, as the hon. Member says, do not run any risk of unemployment. With regard to the Amendment itself, I venture to suggest that if it is carried we had much better abandon this Bill altogether. The universal experience of those who have studied the many attempts that have been made on the Continent to deal with this problem is that the voluntary system is a failure, and one of the chief German authorities on this question—a high German official—who was one of the principal delegates of the German Government to the International Congress, has pointed out in articles in which he has analysed the various schemes, that if we do not have a compulsory system it must fail for one of two reasons. One reason is obvious—that under the voluntary system you get in all the people without employment, the irregularly employed and the worst class of workmen. That was the failing of the experiment tried at Cologne. On the other hand, the Ghent scheme only helped the very class of people who were prepared to help themselves. On certain occasions we 1647 have been criticised for helping too much those who are prepared to help themselves, and for not doing enough for those who will not or do not help themselves. A suggestion has been made that the Government should introduce a scheme making it compulsory for men to pay into a trade union before becoming entitled to this benefit, but I think it would be impossible for any Government to introduce such a scheme. It would, too, be an inequitable proposal, and it is very curious that such a proposal should emanate from the Conservative party. If you do not make this thing compulsory, you will not reach the very people you want to reach. Anyone who has studied the statistics must know that trades are subjected to cycles of depression during which a very large number of the unskilled labour class are thrown out of employment. If all these people were in a financial position to join a trades union, some provision would be made for them, but they are not able to do so, and therefore this scheme has been devised for the purpose of assisting this class of people. If you make it a voluntary scheme, you will find that it does not deal with the problem at all, and you will also find that a very small number will join trade unions and thereby voluntarily ensure themselves. You will, too, by the compulsory scheme have, when a period of trade depression comes along, made provision for those who otherwise would have to depend upon charity, either from the State or from the rates in their own locality. There is another reason why the scheme should be universal. Unemployment is a national and not merely a local question, and, therefore, in the locality where there is the greatest distress you have the greatest burden upon the locality. One reason why we welcome this scheme is that it will pool the whole unemployment question throughout the country. I sincerely hope that this Amendment will not be pressed, and that the Bill will be proceeded with in the shape in which it is being presented by the Government.
§ Mr. BONAR LAWIt is perfectly true, under the conditions as they are, if you adopt the Ghent system, it will be the trade unionists who will benefit. The hon. Member who last spoke seems to assume that we on the Conservative side are hostile to trade unions. I am going to be perfectly frank. From the time the trade unions became captured by a 1648 particular political party, and became a political organisation, I was opposed to them; but from the point of view of the purposes for which trade unions were created—the purpose of using combinations of the men to obtain better terms for themselves, and a larger share of the profits of the business in which they work—from that point of view I am entirely in favour of trade unionism. I am not at all sure if the Ghent system were adopted we might not eventually see the last atom of socialism disappearing from this movement. We as a Party have no reason to do anything but wish the trade unions success in their efforts to obtain a larger share of the profits of their industry.
I confess I have some hesitation in taking sides on this question. I do not think the right hon. Gentleman, the President of the Board of Trade, did full justice to the argument in favour of making the Bill compulsory. At all events, he used one argument which did not impress me. He said we had used the experience of foreign countries to avoid what is bad. That is a very good principle in itself. What has been done in this case of unemployment insurance? Such insurance has not been very successful anywhere, and admittedly the place where it has been the most complete failure has been that where it was made compulsory. I hope, under the circumstances, however, my hon. Friend will not press this Amendment, and I will say why in two sentences. One is that obviously it would be an end of the Bill. The whole Bill is based on compulsory insurance, and certainly, at this stage, we do not wish to produce that effect. If, as I believe, there is a great deal of force in what has been said both by the President of the Board of Trade and by the hon. Gentleman who last spoke, and if this insurance is to become general, it would hardly do so if it is left to the voluntary decision of each individual worker. In that case I do not see how it could work at all. I could labour this point at much greater length, but I hope that my hon. Friend after the interesting discussion we have had, will agree that it would be better not to press the amendment.
§ Mr. JOYNSON-HICKSAfter the appeal addressed to me by my right hon. Friend, I certainly will withdraw the Amendment, not because I am personally convinced that compulsion is better than a voluntary system, but because I think that the opinion of the Committee 1649 generally is in favour of trying some compulsory system. In reply to the hon. Member for Swansea, I cannot for one moment admit that the voluntary system on the Continent has always been a failure. In many parts—in Germany, Holland, Belgium, Italy, France, Norway, and Denmark—good work has been done by it against the hardship of unemployment. But I will not go into that now. I will simply ask leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ Mr. GOLDMANI beg to move to leave out the word "prescribed" ["other prescribed intervals"].
The object of this Amendment is to remove any possible doubt as to the time at which the payment of the unemployment benefit shall be made to the workman. It is suggested in the Clause that it should be at "weekly or other prescribed intervals." I think it is an essential point of this Bill that its administration should be uniform and simple. The word "prescribed" of course includes a shorter period as well as a longer period. Many workmen may be so circumstanced that even a week may be too long a period for which to wait for the benefit. I believe in some trade unions the unemployment benefit is paid out daily, and no doubt some would prefer to receive it daily rather than weekly. Under these circumstances I think it would be better if the word "prescribed" were struck out, and if the sentence read "at weekly or other shorter periods." That, I suggest, is a reasonable proposal, and I hope it will be accepted.
§ Mr. JOHN WARDI hope the right hon. Gentleman will not in any circumstances accept an Amendment for a shorter period. If you take any of the trades of the country you will find that such an Amendment will create a want of discipline. In fact, very often it tends to rob the family of what is really intended for it. [An HON. MEMBER: "Why?"] If a man can get, in our trade for instance, a sub of 1s. a day, or something like that, it does not go to his family at all, but is spent in the public-house before he gets home at night. That is one of the worst features of the proposal. You can have weekly payments if you like, and longer payments if there are circumstances in which weekly payments cannot be made, but under no circumstances should you make the payment less than a weekly payment.
§ The SOLICITOR-GENERAL (Sir J. Simon)May I suggest by way of explanation to the hon. Member who has made this proposal, this further point. Supposing that the workman falls out of work in the middle of the week, on a Tuesday and supposing we keep the provisions of the Bill as they are, there is no payment for the first week. He will agree that it is desirable to have the possibility of coming to the man's assistance without necessarily waiting until a week has elapsed. The reason for putting in the word "prescribed" is that regulations can be made to have that result. Supposing that the general date of payment is a Saturday, he does not get anything for the first week. If he falls out on a Saturday all he has to do is to wait seven days before he gets something, but if he falls out on a Tuesday the first Saturday comes before the seven days, and the next Saturday will be more than seven days, and very nearly a fortnight. I do not think anybody would desire that we should put in our Bill that there should be no power to adjust our Bill to the payment that is to be made. It is for that reason that we want power to prescribe the adjustment of the payment.
§ Amendment negatived.
Mr. BUXTONI beg to move at the end of Clause 60 to insert the words, "Provided that unemployment benefit shall not be paid in respect of any period of unemployment during the six months following the commencement of this Act."
This Amendment must be taken in conjunction with Amendments to Clause 62. Under that Clause it is necessary for the Act to have been in operation six months before the benefit accrues. It is quite clear to all Members of the Committee that the Fund must have some finance behind it before it comes into operation. I believe in nearly all the trade unions it is twelve months before benefits begin to accrue after contributions begin. You must have some margin before they accrue. The second part of it requires a qualifying minimum of contributions from the workman before he can acquire benefit. Under Clause 62 he has to prove that he has been employed in an insured trade during each of not less than twenty-six separate calendar weeks, during which of course he will have paid his contribution. It was represented to us by the building trade, and the engineering trade in particular, that supposing the Act came into force on 1651 the 1st of May that during the next six months ending the 1st November—a time specially in the building trade where there are considerable fluctuations—that a man may be, through no fault of his own, out of employment during a portion of that period and not able to pay his twenty-six contributions, and therefore he would be disqualified from benefits until some later period, although he was in an insured trade. That seemed to us to be a hardship which should be met, and we meet it in this way by not necessarily requiring that these twenty-six weeks of the qualifying period should be subsequently to the passing of the Act, but that he can qualify for this benefit at the end of six months by twenty-six weeks' payments during which he had work after the Act came into force.
§ Question, "That those words be there inserted," put, and agreed to.