§ (1) The Treasury may out of the Consolidated Fund or the growing produce thereof advance on the security of the Unemployment Fund any sums required for the purpose of discharging the liabilities of that Fund under this Part of this Act: Provided that the total amount of advances outstanding at any time shall not exceed three million pounds or such larger sum as the Treasury may fix.
§ (2) If whilst any part of any such advance is outstanding it appears to the Treasury that the Unemployment Fund is insolvent, the Board of Trade shall, if the Treasury so direct, by order, make such temporary modifications in any of the rates of contribution, or the rates or periods of unemployment benefit, and during such period, as the Treasury may consider necessary to secure the solvency of the Unemployment Fund:
§ Provided that no order made under this Sub-section shall reduce the weekly rate of unemployment benefit below the sum of 5s., or shall increase the rates of contribution from employers or workmen by more than 1d. per workman per week, and no such order shall remain in force more than three months after all the advances and interest thereof have been repaid.
1821§ (3) The Treasury may for the purpose of providing for the issue of sums out of the Consolidated Fund under this Section, or for the repayment to that Fund of all or any part of the sums so issued, or for paying off any security issued under this section, so far as that payment s not otherwise provided for, borrow money by means of the issue of Exchequer Bonds or Treasury Bills, and all sums so borrowed shall be paid into the Exchequer.
§ (4) The principal of and interest on any Exchequer Bonds issued under this section shall be charged on and payable out of the Consolidated Fund of the United Kingdom or the growing produce thereof.
§ (5) Notwithstanding anything in any other Act, money in the hands of the National Debt Commissioners for the reduction of the National Debt shall not be applied to purchasing, reducing, or paying off any Exchequer Bonds or Treasury Bills issued under this Section.
§ Mr. BAIRDI beg to move in Sub-section (1) to leave out the word "three" ["three million"], and to insert instead thereof the word "two."
The idea of my hon. Friend (Mr. Peel), in putting down this Amendment, was to draw attention to the financial provisions of the Bill, and in particular to the very large sum which the Treasury would be entitled to advance. It amounts in effect to two and a-half times the contributions that are to be expected from the employers, and from the employed for practically one-half year. If you have, say, 2,000,000 people coming under this Act at, roughly, a pound a head, £3,000,000 is the contribution of the employers and the employed for one year and a-half. That is a very large sum for which to make the State liable. What precautions are to be taken for the repayment of this sum? What security is there to be, and what interest will be paid on that deposit? This is undertaking a very wide responsibility for the payment of State money, without providing any sufficient security. Before this sum could possibly be necessary, it would require a sort of industrial cataclysm. There would have to be many hundreds of thousands of men out of work before demands could be made on the Fund anything like so considerable as to equal £3,000,000. Then the responsibility with regard to the sums which may be drawn out by the older men—who will have paid the 500 weeks' contribution, and will then 1822 be entitled to withdraw out what they have put in, minus the amount they have drawn in benefits—will be also a further liability which, I suppose, will also be included in this £3,000,000. Altogether, I think that the object of my hon. Friend in putting down this Amendment was with the view of drawing from the right hon. Gentleman some statement with regard to those few points in connection with the finances of the measure, which seem to be somewhat loose and open to doubt in their present form.
§ Sir J. SIMONThe Committee, of course, see that in Part II. of the Bill the fund which you create will not accumulate capital reserves in the same way in which it must do under the Sickness and Invalid Scheme. So the point with which we have to start is that even though, as we have every reason to believe, our scheme is founded on a sound actuarial calculation, and even though, therefore, the fund may be quite easily able to pay its way for a series of years, there is always the possibility that you may have a sudden and perhaps somewhat prolonged depression, with the double consequence that the demands upon the fund will suddenly rise and the contributions and their proceeds will suddenly fall. Because, of course, the demands upon the Fund will become greater if more people are out of work, and the contributions to the fund will become less if the number of working engagements is smaller. The way in which the three millions has been arrived at as a wise figure—it is not in any sense a controversial matter. But we want to discuss it with some understanding of the broad point—is, putting roughly, but I hope substantially rightly, this: we have some experience of some twenty years of unemployment figures to regard, and during that period of time this proposition was broadly true. I am not attempting to speak with scientific exactness, but I believe that I am stating what is substantially right—the amount of unemployment in the worst times has been nearly twice the average amount of the twenty years.
§ Mr. BONAR LAWAt least that.
§ Sir J. SIMONI do not think at least. I think it approached it but did not exactly reach it. I am deliberately stating the thing in general language, not for the purpose of being vague, but to avoid the complications of a thing which is capable of great complications. Therefore, what 1823 we have to contemplate is to ensure that our fund is a fund well able to bear the strain upon it. It may be for a long series of years. It is quite a possibility which a prudent man may wish to provide for, that there may be some time a sudden demand upon it which will, for the time being, weaken it unless it is suddenly able to tide over an acute brief period of distress. It is not by any means a thing to be contemplated as likely to occur, with normal fluctuations of trade which will be sufficiently covered by this, but there might be abnormal fluctuations and serious and sudden depression. The fact that that happens, if it ever does happen, does not go to prove that the scheme is ill-founded or that the actuarial calculations are wrong. It is in the nature of the problem we have to deal with that that particular kind of event may happen, and of course, if it happens it will be the very poorest consolation to those who come suddenly on the Fund to be told that the Fund is all right and will recover itself, but that in the meantime they cannot have their 7s. a week. It is for that reason that we have to provide for the Treasury coming in in order to meet that exceptional claim if it arose. The hon. Gentleman who moved this Amendment, raised the question whether three million pounds is or is not too large a sum. We think not, because—again I am using round figures, but I am using them, having regard to a certain number of modifications which have taken place in the Bill—supposing you took the figures of income in a normal year at something like £2,800,000, and you set against it the expenditure in benefits of £2,500,000, leaving the balance for administration, obviously, if you get on towards doubling that expenditure, and at the same time receive some diminution of income—I will point out in a moment that I am exaggerating the actual facts—your fund might find itself in urgent need at that worst time of something over £2,000,000. For that reason the sum of £3,000,000 has occurred to those who have gone into the matter carefully, and to those actuaries who have been assisting us. It appears to be the proper sum. When one comes to go beyond £3,000,000, as the Clause proposes to do, we shall not be at all averse to the suggestion, but would rather welcome the suggestion, that words should be put in to show that the larger sum which the Treasury may fix is contemplated as 1824 only arising under entirely exceptional circumstances. It is difficult to define the circumstance; but by all means let us put that in. That being so, I ask the Committee to keep this sum of £3,000,000 as the sum that is mentioned in this Clause; and by that means it will be possible, as it appears to us, to provide for this sudden and exceptional claim upon the fund. I said I would point out in a moment that in making these calculations we have taken everything against us, and there is a modification in our favour to be remembered. There is the one in five rule, and there is the fifteen weeks' rule. Both these rules operate in our favour, to limit the extent to which the normal expenditure is increased. That always has to be borne in mind in making this readjustment, but even after you have borne that in mind it appears to those of us who have had to consider the question and to those very skilled gentlemen whose services have helped us so much that the sum named is the correct one, and I do hope, therefore, that the Committee will not cut it down.
§ Mr. BONAR LAWI do not think that what the hon. Gentleman has said quite meets our objections. The hon. Gentleman said that it would be a very hard case for the man who expected to get his 7s. not to get it. That is one hard case. Another hard case that might arise would be this: Suppose that in a distressful state of unemployment, the Fund were used up, £3,000,000 represents the total contribution of workmen and masters for about a year and a quarter; and if the whole of the Fund be drawn upon, those who join afterwards are in this position that we can see no way in which the loss would be made good, and they would have no benefit in the future. The whole point, therefore, is whether there is any real reason to suppose that the Fund would be elastic enough to recover if there happened to be this large draw upon it of £3,000,000. If the President of the Board of Trade can agree to this, we would not press it any further. The difficulty could be got over by an Act of Parliament. Obviously if there happened to be a period of great distress, and the President of the Board of Trade was in a position to show that this would remedy it, we would not have the smallest difficulty in getting an Act passed by any House of Commons.
§ Sir J. SIMONSuppose it were not sitting.
§ Mr. BONAR LAWYes, that is a difficulty; but if present conditions continue, I would like to know in what part of the year it would not be sitting.
§ Sir J. SIMONWhen we are unemployed.
§ Mr. BONAR LAWIt is no good putting £3,000,000 in, and then saying, "any larger sum you may fix." That seems to be absurd. Let us stick to the £3,000,000, and we will allow it to stand at that.
Mr. BUXTONI understand that the danger the right hon. Gentleman fears is that the Fund might be put in a bad year in this particular position that it would have to go to the Treasury for this amount of money; and he wants to know whether, taking it broadly over a series of years, it would ever recover the elasticity and financial stability that it had before. I certainly thought my learned Friend pointed out that that would be the position. We believe it would recover. From the experience we have had already, and from the report given to us by our very able actuary, we believe that the income and the benefits are so balanced that, taking a series of years, the Fund would recover itself. Let me give a concrete case based on past years, on which our belief has been rather founded. From 1891 to 1910 the average unemployment in these particular trades is represented by 8.6. During the two years 1908 and 1909 those percentages went up almost double. For that period there would unquestionably be a heavy drain on the Fund, but, taking the subsequent and former years into account, the Fund, on the average, would be solvent from beginning to end, and it really is only to meet a pure temporary emergency in regard to such a matter as that, and with no view of burdening the Fund with this large sum, and we believe that it would pay itself off in a number of years. I understand that the hon. Gentlemen are afraid of the words, and I am prepared to accept the words suggested, but I am bound to say, under certain circumstances, I think it may limit us, and even necessitate an application to Parliament at a moment when it would be inconvenient to the Fund But I am willing to meet hon. Gentlemen to that extent, because we never had in our minds that the amount would be more than £3,000,000.
§ Mr. HOAREDo I understand that the right hon. Gentleman is willing to 1826 accept the Amendment that these last words be omitted?
§ Amendment, by leave, withdrawn.
§ Question, "That the words, 'or such larger sum as the Treasury may fix,' stand part of the Clause," put, and negatived.
§ Mr. GOLDMANI beg to move, to leave out Sub-section (2).
My object in moving the deletion of this Sub-section is to obtain from the Government some explanatory statement of the proposed working of this Clause. In the first instance, I should like to ascertain from the President of the Board of Trade whether the Order that may be issued will give power to impose an increased contribution from all insured trades, or whether the Government desire to take power under this Clause to exact a contribution from any specific trade or branch of trade; whether they propose to take power, for instance, to increase the contributions from the employers, or any employer in a particular branch of trade, or, in the alternative, whether they propose to reduce the contributions from the insured trade as a whole, or whether only from one branch of a particular trade. I would like some explanation with regard to those points.
There is another important point raised in this consideration of the Clause, that is as to the solvency of the Fund. What is the ultimate point we are going to reach as far as the solvency of the Fund is concerned? The Clause seeks to provide facilities for the Treasury to advance certain sums of money. But in the case of an insolvency, what security are you giving to the contributor who comes in under this scheme—who, when the time arrives for him to expect to get benefit in respect of the contributions he has made—that those contributions shall come to him? Take the case of a man who, joining at the age of eighteen, has been going on for insurance for ten or fifteen years. The time arrives when he loses his employment, perhaps because of defective eyesight. Under the provisions we agreed to the day before yesterday, he is to have the right of refusing employment unless at the same rate of wages that he has been usually receiving. What security has the man joining to-day under this scheme that in ten or fifteen years, when he wants to get his insurance benefit, the Fund will be 1827 solvent? He may find the Fund insolvent, and be told by the Government, "This Fund being insolvent, we cannot give you your benefits." Therefore, on this point, it seems to me necessary to consider whether a period should not be limited to the Act as a whole, and whether the Government will consider a proposal that a revision of the Act shall take place, say, in five years' time.
Take the question of the Post Office contributor under this Act. He contributes a certain sum of money, and knows that, as long as the fund is available, he can draw upon it. But the moment that fund is exhausted he knows he can expect no benefit from it. Here you are accepting a man, and giving him no security that when he is unemployed he will get his insurance benefit. Let me point out to the Committee—and this is after all a very important point—that you want to make this Bill as popular as you can. The Chancellor of the Exchequer, when he introduced the Bill, stated that the difficulty arises with the class of man who is habitually in good employment coming into this scheme in order to help those who would be likely to be unemployed. What encouragement are you offering to those persons under the Bill? They are not able to analyse the scheme, as we have been able to analyse it in Committee, and they will be likely to look at it from this point of view. Under sickness insurance, for 9s. they are going to receive for a year £19 of benefit. That is to say twenty weeks of sickness insurance at 10s. a week; a further twenty-six weeks sickness insurance of 5s. a week, and the disability of 5s. I am speaking from the workman's point of view, and I ask who is going to judge the one thing as against the other. "Under this Act" he will say, "the Treasury reserves to itself the right of imposing further contributions." A contribution under this Act may amount to 1s. 1½d. per week from the empolyer, from the State, and from the insured person, giving only ten weeks of benefit, which are limited to one branch of trade, at 6s. a week, or 60s. It may also mean that the State, the employer, and the employer, from the State, and from a year to this fund and receive in return 60s. If the men begin to look into that calculation, and see what they are likely to receive under it, I say you are only increasing the difficulties in connection with the Bill as a whole; and in any case it occurs to me that at this 1828 stage an opportunity arises on this Clause for the Government to give some indication as to the question of the solvency of this Fund. Let me make the point clear. If the Fund is regarded by the Treasury as solvent under the Act, you may increase the rate of contribution by 1½d. from the State, 1½d, from the employer, and 1½d. from the workman. That increases the contribution from 5½d. to 7½d.
§ Sir J. SIMONWhere do you get the 1½d. from?
§ Mr. GOLDMANThere is 2½d. from the employer, 2½d. from the workman, and 2½d. from the State; that is 7½d.
§ Sir J. SIMONOne penny and two-thirds, to be accurate.
§ Mr. GOLDMANYes, that is right. Under this Act, you can impose a further 1d. from the workman and a further 1d. from the employer, which is another 2d. After five years, if there is still a deficiency, you can impose a further 1d. upon the employer and a further 1d. upon the workman. That brings it up to over 1s., in order to give him 6s. a week in certain conditions—in other words, 60s. Every page of the Bill is stamped with uncertainty; the whole scheme is experimental, and, that being the case, I think it is necessary to give some safeguard to a man coming into the scheme that he is going to get the benefit when it falls due. In view of the question of insolvency arising, and exhaustion of the funds, I suggest there should be a revision of the Bill after the period of years, and I ask the Government to consider that under this Clause.
§ The CHAIRMANDoes the hon. Gentleman wish to move the next Amendment standing in his name, or does he consider it governed by the present discussion?
§ Mr. GOLDMANI wish to save my Amendment.
Mr. BUXTONThe hon. Gentleman has raised two points. I would point out to him that the omission of this Sub-section would really not carry out the object he has in view with regard to the solvency of the fund. This is only a method of dealing with it if the fund be insolvent, but, I take it, the hon. Gentleman is really raising it for the purpose of obtaining information. The first point he wanted to know was, assuming that the fund became temporarily insolvent—this is not a matter of permanent insolvency—whether the alteration in the rates of contribution and 1829 unemployment benefit would be applied to the whole trades, or to certain specified trades. Certainly we have in view at present, as a general proposition at all events, that it would apply to all the trades equally during these quinquennial periods. I do not entirely put out of question, supposing it was shown that one particular trade or part of a trade was particularly affected in this matter, that it might be dealt with separately; but our general attitude would be that during these quinquennial periods the whole of the trades, both as regards contributions and as regards benefits, should be treated alike.
His second point was: what was the security to the workman for contributing to the fund, and how far can we guarantee its solvency? We can only show, as we have done already to the House, both in the form of the Bill and in the Reports which we have circulated—the basis on which we have founded the finance of the Bill, taking the contributions on the one hand and the benefits proposed on the other; and our actuary has certified, with the information before him, that, taking an average of years, the fund will not only be solvent, but will have a material balance which, of course, will go towards its solvency. One of the reasons why the Government have been very anxious that this part of the Bill, as well as the other part, should become at an early period an Act of Parliament, is that, fortunately, trade just now is in a satisfactory state. The amount of unemployment is low, and, therefore, we hope we might have, at all events, a few years in which to accumulate an extra balance. But, quite apart from any question of a balance, we believe, from the information that we have had, that, taking an average of years, the fund will be sufficiently solvent to be able to pay the benefits proposed for the contributions given.
But against that, of course, we have to provide two things. This is, as the hon. Member said, an experiment, and being an experiment, I cannot, nor can anyone, give an absolute guarantee as to what may be the result of it for the next twenty years. We think we have provided satisfactorily for it, but we have to provide for two things. We have to provide, as this Clause does, for the sudden emergency which has been already discussed, in which the fund, in perhaps two years, has a special call upon it. We have to meet that by this Treasury advance. It is quite clear that the Treasury advance must be paid off in some 1830 way—by reducing the benefits, or raising the contributions, or both together, as I think the hon. Member himself proposes in another Amendment. It may be found in five years that the estimates of the financial position of the fund have been too sanguine, or, in another event, not sanguine enough, and that, within limits, it may be possible to increase or to reduce the benefits or contributions. It is obvious that such elasticity must be in the fund, and that year after year, as it ceases to be an experiment, as it is extended to other trades, it will become on a more solid basis than it necessarily could have been on at the beginning. But I cannot be held to guarantee any question of the increase or reduction of benefits or contributions. On the best advice we can obtain—and the matter has been gone into as carefully as possible—we are fully satisfied that, taking an average of years, the fund will be solvent.
§ Mr. HOLTThis Clause seems to me to give a very wide margin indeed to the Government. The margin on the contribution is one of 40 per cent. The Government take power under this Clause to increase the contribution by 40 per cent., and to reduce the benefits by, in some cases, as much as 30 per cent.
§ Mr. BONAR LAWMay I interrupt to make a suggestion to the hon. Member which I think will help us to get on. Would it not be better to take the point he raises by moving an Amendment to remove the power to increase the contribution to the fund?
§ Mr. HOLTI do not desire to make the point the hon. Gentleman opposite thinks that I wanted to make, if he will allow me to say so. It is quite clear, if it became necessary to exercise both these powers, that we should have to admit there had been a very serious miscalculation with regard to the provisions of the Bill. In these circumstances, in whatever form the Sub-Section is passed, I suggest it ought, in such an event, to be compulsory upon the Government to come to Parliament. If the miscalculation was as great as it would have to be—
Mr. BUXTONClause 69 deals with the question of emergency, and not miscalculation. We are not going to say in, say twenty years, this Clause will not come 1831 into effect, perhaps once or twice. It is a question of averaging, and not of miscalculation, and the point dealt with in this Clause is, taking the average, that there may be a year or two in which the finance of the fund will require an advance from the Treasury. As regards Clause 76, it is a different matter. That does deal with the amount, and the rates and contributions can be altered; but it is purely a matter of emergency, and an emergency which is from time to time almost bound to arise.
§ Mr. HOLTSurely my right hon. Friend is wrong on that point, because if his calculation be right, as regards the average, then there is no emergency.
§ Mr. HOLTCertainly not. There is no emergency whatever. You have only to take an advance from the Treasury, and repay by degrees. There is no emergency if your calculation on the subject of average be right. The only emergency there can be is if your calculation is wrong on the subject of average, and not only if the fund is insolvent, but is going to remain insolvent. I do not want to waste the time of the Committee on this point, but if the Clause is to be put into operation, I suggest that we should have an assurance from the Government that there shall be a power of appeal to Parliament to discuss the whole financial Clause of this Act, if it be found that, even on emergency, they cannot trust to the doctrine of averages, and are compelled to ask for an increase of 40 per cent. in the contributions and a decrease of 30 per cent. in the benefits.
§ Mr. HARRY LAWSONI am aware it is a most unpopular thing in this Committee to mention the employer as being subject to any great burden under this Bill; but perhaps it may have escaped the notice of the President of the Board of Trade that under this particular Sub-Section the employer's contribution can be raised, and such a provision is not found in any other part of this measure. The right hon. Gentleman says that it is only to provide for a temporary emergency; but that does not alter it. We know that under certain circumstances the employer's rate at present may amount to an Income-tax of 1s. 6d. in the £. The President of the Board of Trade seems to think it right in a special emergency that the employer's contribution should be 1832 raised by 40 per cent. I quite agree with the hon. Gentleman who has just sat down that if an emergency of this sort arises Parliament must further review the financial arrangements of this Bill, otherwise you will be imposing on particular trades a burden that I honestly believe they cannot bear. This is an experimental measure, and we think with certainty that you are putting an enormous tax on the special trades which are included. Although it is said it will be altered hereafter, there are reasons why that may not be done. I protest against this new tax being put upon the employer to meet this emergency.
§ Mr. HOAREMy hon. Friend the Member for Dudley has several Amendments down which will deal directly with this point of the increase of the employers' contribution, and I rise to ask—Should we be in order in discussing that now?
§ The CHAIRMANIf it is the wish of the Committee to take the general discussion on these initial words, it is not for the Chair to interpose, but perhaps it would be better, first of all, to pass these words, and then raise the topic which the Committee is now discussing upon the Amendment of the hon. Member for Penryn.
Mr. BUXTONI beg to move "That the Committee do sit after four o'clock to-day."
What I would suggest is that we finish Clause 69, and drop Clause 70—that has to be brought up as a new Clause—and get on to Clause 71. I understand it would not be convenient for various Members of the Committee to sit on Monday. In that case, I am afraid we shall have to sit four days next week in order to finish the Committee stage, but perhaps hon. Members would finish up to Clause 70 to-day.
§ Question, "That this Committee do sit after four o'clock to-day," put, and agreed to.
§ Mr. GOLDMANI desire to move in Sub-section (2) after the word "by" ["Treasury so direct, by order"] to insert the word "special." If an order has to be given to impose either a higher contribution or reduced benefits, I think that is not an authority that should be imposed on the Treasury. I suggest when it comes to the case of imposing either higher contributions or reducing benefits, it should come under the Clause of "Special Order," and my Amendment seeks to include any 1833 regulations with regard to reduced benefits and increased contributions under the class of "Special Order."
Mr. HAMILTON BENNI wish to support this Amendment; but it seems to me this is particularly a case in which Parliament ought to have an opportunity of expressing its views. It may be that a Special Order is not the most convenient procedure, and the arrangement we arrived at this morning with reference to another Clause—to lie on the Table for forty days—might also here be the more convenient method.
What we consider should be done is that it should be laid on the Table before we meet, or that some other opportunity should be given of discussing the question in all its bearings, and raise any objection that is necessary. This is really a very serious part of the Bill, because it raises the contribution both of workmen and employers, and also reduces the benefits which workmen can obtain. It has been pointed out that this is only a temporary affair, but surely it is not the intention of the Government to raise the contribution temporarily and then drop it again. If there is any shortage on the Fund at any particular time, and it looks as if the Fund is running dry, and that there should be an increase in contributions or a reduction in the benefits, surely an average must be given a fair number of years to make this right. In that case the matter will be before the Government, and there will be plenty of time. It cannot be said that Procedure, by Special Order, would unduly delay the operation. The Government would have plenty of time to consider the matter. They would know well in advance whether the Fund would become insolvent or not, and there would be plenty or time to consider it.
Mr. BUXTONThis is a question of emergency, and temporary emergency. It does not seem to me, in those circumstances that the Special Order procedure is really applicable to such a case. The emergency might arise quite suddenly, and it would not be possible for the Treasury to take action in sufficient time. It must, in a matter of this sort, be left to the Treasury to act at the earliest possible moment. I speak from experience as representing, in the first place, the Post Office, and, in the second place, the Board of Trade. I am sure my right hon. Friend opposite, who has been in office, and individual Members of the Committee, 1834 know that the Treasury never gives away any money if it is possible to help it. I do not think in this case the Treasury dogs will need any further muzzling. I really think the public interest is absolutely protected by this proposal, because the Treasury will never give this advance unless the matter is urgent, and unless it is only going to be a temporary advance. The Special Order process would very seriously hamper the opportunity of carrying on the fund under insolvent conditions.
Mr. HAMILTON BENNThis is not a case of the Treasury giving up anything, but that there should be contributions given by somebody else, and the argument used by the President of the Board of Trade would be just the reason why the Treasury should make the order.
§ Mr. BONAR LAWI entirely agree with this Amendment, and would be quite glad if my honourable Friend pressed it to a division if there were enough people present to make it worth while, but there are so few here, that I do not think it would be worth while going through the time necessary to take a division. I do not think the arguments used justify giving these extraordinary powers to any Government department. The right hon. Gentleman says it must come as a sudden emergency. Obviously that cannot happen. If this Fund is to extend over a period of years, it goes on an average. You have the means before the three million pounds is exhausted of seeing what is coming, and there would be ample time to make other arrangements. In reference to what has been said about the Treasury, I might point out they have no inducement here to be economical, but even if they had, conditions have changed. The Chancellor of the Exchequer used to be the man who looked to all the other departments to prevent the expenditure of money, but instead of being the watch dog, he has become one of the burglars and he is himself the man who is spending money. Therefore, we have not any of the check which we used to have in the old days.
§ Mr. HARRY LAWSONI do not think that the President of the Board of Trade in the least appreciates the objection which I feel, and that is that the employer is going to be put under the Treasury harrow, without any say whatever, and to be mulcted in another contribution. I think this is a most monstrous proposal, and, personally, I shall vote for my hon. Friend.
§ Sir E. CORNWALLI have put an Amendment down on the Paper in the direction of the hon. Members, but I thought after the discussion to-day that the special order under Schedule 9 was not altogether the way to deal with this. I do not think that the provisions under Schedule 9 would have been the best plan. At the same time there is a point, and the hon. Member for Mile End (Mr. Lawson) has made it, as to giving these very wide powers under an ordinary order to the Treasury and the Board of Trade to impose on employers and working people a charge which, perhaps, they would like to be heard about, and on which they might have something to say. I think the President of the Board of Trade might meet it somehow. I do not think that the word special is the best word bringing in Schedule 9, but I do think that something should be done, and perhaps the Government would find some way of doing it.
§ Sir J. SIMONI quite appreciate the spirit in which my hon. Friend makes the suggestion. While anxious to consider carefully every suggestion, there are two points which seem to me to be not altogether remembered in the course of this Debate. The first is, what is the action which it is thought as a matter of practical administration might be taken under this Clause? Some of the language that has been used would suggest that the Treasury was some autocratic monster, whose misconduct is not immediately visited with tremendous penalties upon the heads of those who are responsible for its administration in Parliament. Just conceive what would happen to a Chancellor of the Exchequer who allowed the Treasury to increase the contribution of an employer and increase at the same time the contributions of the working man, because the two things go together, without abundant and overwhelming cause.
§ Mr. HARRY LAWSONNothing would happen to Mr. Lloyd George.
§ Sir J. SIMONI am glad to think that, in the opinion of the hon. Member, the popularity of the present Chancellor of the Exchequer is so great that even though without cause he exacted a contribution from every workman and employer in the land, they would still make certain that his party would remain in office. That would appear to me to be an extraordinary view. I should have thought it obvious that anything more unlikely than that the Treasury would put into operation this Clause except in cases of extreme urgency 1836 [...]ould not be conceived, for the simple reason, that if it was done, the consequences upon the Government which allowed such a thing to happen would be instant and desolating. My hon. Friend, the Member for Hexham, made a point of great ingenuity. He said you do not require to bring into operation this Sub-clause in order to make good the temporary difficulty which is being met by the Treasury advance if your calculations are sound. I think my hon. Friend is right in a sense, but he does not distinguish between two things. If your calculations are right as a matter of average, and if the fluctuations we are going to experience are fluctuations which rise and fall with fair regularity, then what he says is perfectly true. But a case which may arise and which may not in the least destroy the accuracy of our average, is the case where unfortunately there would be some exceptional disaster. You might have a sudden chasm quite out of the ordinary curve of trade, which is not promptly corrected by subsequent good times. It is not an improbable thing. If you have a correct average, and there is a prolonged lean period, it does not prove that your average has been calculated inaccurately, and you must prepare to meet such a period; and the fact that this Clause is devised to meet that does not militate against the fact that a scheme may be sound financially and our average just and right, but that at the same time it is necessary to have this Sub-clause. What we are really doing is we are proposing to give powers to take action which may be necessary in the public interest and the interest of the Fund. If we adopt the course suggested it would mean that first of all, notices are advertised, objections are sent in, the Board of Trade considers those objections and issues a new draft order, and there is to be a public inquiry with everybody giving evidence, and the thing going on as long as anyone wishes to keep it up. That is not the way in which to deal with an emergency which, of course, ought not to arise, if fluctuations of trade are kept within reasonable limits, but which might conceivably arise, and which if it arose would have to be dealt with. It by no means follows that because Sub-clause 1 of 69 operates, Sub-clause 2 operates. Sub-clause 2 is an exceptional provision. It is not in the least correlative to Sub-clause 1. What we are dealing with here is the case that may arise which in its nature would be a very sudden case, and where there is a serious and unexpected chasm in the line of trade which is not in course of being corrected 1837 by that resiliancy which we have had in the past usually the good fortune to experience.
§ Mr. BAIRDThe whole question seems to me to be this: Are you going to put in the Section a power enabling the Treasury, without any possibility of check from the representatives in Parliament, to increase these contributions. I cannot agree with the Solicitor-General in what he said about the Chancellor of the Exchequer. Many of us think that he has only to come down to the House and explain that it is 9d. or 4d., or whatever it may be that is required, and the thing is done, and there is no more trouble about it. I do not think there is any safeguard in the direction that the Solicitor-General seems to contemplate. There is no provision for preventing the Treasury coming like a thief in the night. What we are bound to do is to make sure that it does not come in that manner, but that people shall have some means of checking the imposition which the Treasury seeks power to put upon them. They are able to look ahead if they are willing to do so. The contingency referred to is not a matter which will arise. The country is not going suddenly to be overwhelmed by a cataclysm which cannot be foreseen. Before such a thing occurs there must have been a period of bad trade when the funds would be depleted, and surely it is the business of the Treasury to look ahead and see what it is they will require. We are omnipotent at present about finance. Let us exercise our omnipotence now in the interests of the people who have to contribute. I think there is much force in the Solicitor-General's contention that the particular method proposed is somewhat cumbersome, but that does not mean that it is not possible to devise another method by which the same point can be safeguarded, namely, that the House of Commons should control the Treasury, and not the Treasury the House of Commons. I hope the Government may approach this question in a friendly spirit, realising that, like other questions, it is not a party question, but is raised with a desire to make the Bill more fair and equitable.
§ Mr. GOLDMANI will not press my Amendment if I get from the President some assurance that if the words proposed are not suitable he will find some other words to meet our difficulty. The Solicitor-General argued, with a great deal of force, as to the financial expediency of this proposal. We are looking at the matter from 1838 a totally different point of view. As the hon. Member for Mile End pointed out, you have to consider the question of the employer. As an illustration I may mention a case of a friend of mine who employs 1,000 men. He is just able to carry on his works under the narrowest possible margin. Under the whole Bill he will have to pay an additional £1,250 a year, and it is a very hard case that he should be called on by the Treasury suddenly to contribute another 1d. per week, which would add another £200 a year. I trust that the President will give some assurance that will safeguard the interests of these people.
Mr. BUXTONI quite appreciate the way in which this matter has been presented. I quite understand that there may be a certain amount of alarm on the part of some employers and possibly some working men that these contributions may be unduly enlarged without any opportunity of consideration on their part. I am afraid that I cannot go further than this, but I hope it will satisfy hon. Members that the matter will be considered carefully between now and the Report stage to see if there can be any words which will give the final protection which is desired. But it must be clearly understood that there must be something under which we can act promptly, rapidly when circumstances necessitate, and if it is not by Special Order it must be something perhaps like the authority given in the Bill in regard to those Sub-sections in 69. It must be something on which we can act promptly, but I think whether we may be able to give the security which the hon. Member desires, at any rate, he must not press me to say more than that at present. I will undertake to look into it and we will do our best.
§ Mr. BONAR LAWCan I persuade the right hon. Gentleman to go a little further? He is a little wrong in the calculations he has made. The contributions are limited by one in five. The fund can be exhausted and become insolvent in two or three years at the worst. Is it suggested that, while this misfortune is going on for two or three years, the Government will not notice it, and will not take the necessary steps to put it right. I would urge upon the right hon. Gentleman that, if he will undertake to bring in something to meet us on Report, we will not press the matter further.
Mr. BUXTONWe will do our best, but I would point out that the increased 1839 contribution is not an emergency matter, and cannot immediately produce a large amount of money necessary to save an insolvent fund.
§ Sir ALFRED MONDI understand this can only come into force when the Fund is insolvent. I cannot believe that any Government would ever allow this fund to get into that position, and stand up in the House of Commons to declare that their great Unemployment Insurance Fund was bankrupt.
§ The CHAIRMANThe hon. Member probably will not press the Amendment.
§ Mr. GOLDMANI beg leave to withdraw.
§ Amendment, by leave, withdrawn.
§ Mr. HOAREOn behalf of my hon. Friend (Mr. Joynson-Hicks), I beg to move the next Amendment, and I think it will be seen that the two following Amendments are consequential. I beg to move in Sub-section (2), to leave out the words "any of the rates of" ["temporary modification in any of the rates of".]
It seemed to me, as I listened to what the President of the Board of Trade said, that possibly this and consequential Amendments might tend in the direction of a solution of this difficulty. If he will look at them, he will see that the Subsection will then read, "if whilst any part of any such advance is outstanding, it appears to the Treasury that the Unemployment Fund is insolvent, the Board of Trade shall, if the Treasury so direct, by Order, make such temporary modifications in the rates or periods of unemployment benefit, and during such period as the Treasury may consider necessary, to secure the solvency of the Unemployment Fund."
I would ask the Solicitor-General, in view of what he has just said in regard to the justification of emergency, whether, from the statistics that are available of unemployment during the last twenty or thirty years, he can point to a single case in which there has been such a depression as that to which he has been alluding.
§ Sir J. SIMONNo.
§ Mr. HOAREIf any such case does arise, it seems to me that our case is all the stronger, and that Parliament should have an opportunity of deciding where and when the contributions shall be raised. I beg to move the Amendment.
Mr. BUXTONAs I understand the Amendment, the hon. Member proposes to cut out any part of the varying contribution of the workman and the employer, so that the whole deficiency would practically come upon the benefits. The Bill is founded on the basis of equal sacrifices as regards the contribution of employer and workman, and I do not think it will be satisfactory or just that if the rates are to be altered, the whole loss should fall on the benefit. It may happen, in fact, it would happen, that the time of depression would be just the time when it would be a hardship placed on those who produce the benefits. That is the time when the regular man in employment who has contributed regularly to the Fund is more likely to come upon the Fund than any other, and I think it would be hard at such a time when the regular man came upon the Fund, that he should find the benefits would be reduced. Under the Amendment, the whole of the reduction would come upon the benefits, and none upon the contribution. I hope, after the discussion we have had and the undertaking which I have given, the hon. Member will not press his Amendment.
§ Mr. HOAREIn view of what the President of the Board of Trade has said, I will withdraw the Amendment, on the understanding that he will try to meet my point.
§ Amendment, by leave, withdrawn.
§ Mr. J. WARDI beg to move to leave out the words "or the rates or periods of unemployment benefit."
I think the President of the Board of Trade has pointed out how unfair it would be to impose a reduction of benefit upon the worker who has contributed regularly to this Fund. I can quite imagine that if a particular depression of trade occur he is the kind of man who will in that extreme emergency come upon the Fund, probably, for the first time, and he will be the man who may have been paying continuously for eight, nine, or ten years to the Fund without having received any benefit at all. Just at that particular period, he would suddenly find the benefit fund reduced by nearly one-half. I think that a most unfortunate position of affairs. I believe, myself, that if the subject were submitted, as has been suggested in the previous Amendments, to a thorough investigation by the Government, both employers and employed would be prepared to find the money rather than a reduction 1841 of benefits should take place at that critical period. One can quite understand the suggestion made that this is only for use in emergency. What is an emergency? A special occasion that might not occur until after, say, ten or eleven years' cycle of trade, and then the man who has been in regular employment during the whole period finds that there is a serious depression. Although he has been contributing his 2½d. during the whole time, when he gets to this worst period, wants the aid towards which he has contributed—and to which if there is any morality in the scheme he is entitled—he discovers that the Board of Trade by some means or other has the power of reducing the benefits. I think that is the most unfortunate part of this scheme, and I can quite imagine the disastrous effect it would have among the work people of this country, if, at a critical time of depression, a reduction of benefits took place. I repeat, that I can quite imagine both sides would, after full investigation, much prefer to increase the contributions as a means of getting over the difficulty, than that, at this critical period, the benefits should be reduced.
Mr. BUXTONI have promised to the hon. Gentleman who moved the last Amendment that if the emergency arose, and if it was thought right that the burden should not fall, both on the shoulders of employers and workmen, that we would do our best to see how far it would be possible to do something in the form of a check on an absolute authority, and I thought the Committee, as a whole, were practically agreed with the view that I took. I would appeal to my hon. Friend not to press the Amendment. I, myself, rather indicated the difficulty I felt there would be in reducing the benefits at that particular time, especially in the case of the man who had perhaps not drawn any unemployed benefit, or anything coming on the Fund. I do not think it would be fair to cut out the whole question of the possibility of some reduction of benefit for any amount or weeks, if, at the same time, the power to alter the contribution is left. I hope, under these circumstances my hon. Friend will not press the Amendment, because this is a question which I hope will not often occur, and full consideration will be given to the arguments he has advanced.
§ Mr. HOLTI feel great sympathy for the hon. Member for Stoke, and inclined to support him as an employer, because the men how would be affected would be the best and the steadiest men in the place; and I 1842 believe that almost every respectable employer in the country would rather pay an extra penny himself than see these men done out of their benefit at a crisis like this. I am not altogether an advocate of the workman in every case, but I really do think in a matter like this, the men who have paid for their benefit, whatever else happens, ought to get it, and have every penny that is hold out to them. If we cannot be sure of giving them that, let us hold out a promise which we are certain we can fulfil; but when dealing with a class of people who are not well off, and not rich people, we ought to be scrupulous in seeing that they get the fullest benefits they are entitled to under the Act of Parliament.
Mr. TYSON WILSONI do not think there will be any necessity for a reduction in benefit or an increase of contributions. I agree with the hon. Member for Stoke, that if the emergency did arise, the working man would prefer to pay an increased contribution rather than have a reduction of benefit. At the same time, I would point out to the hon. Member for Hexham, that the man he refers to, that is the steady workman would be working and receiving full wages while the unemployed man would have to be satisfied with 7s. a week, I hope the hon. Member for Stoke will not now press his Amendment.
§ Mr. J. WARDOn the understanding that there is going to be an inquiry held, where both sides will be able to state their case, and that both employers and workmen will prefer to increase their contributions rather than have a reduction of benefit, I beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ Sir E. CORNWALLI desire to move an Amendment arising out of the discussion we have had, namely, after the word "the," ["the Treasury,"] to insert the words, "Board of Trade and," so that it would read "The Board of Trade and the Treasury."
The hon. Member for Stoke withdrew his Amendment, as he said, on the understanding that an inquiry would be held, and that both sides would be heard. There is no prospect of that, because, as we have it in the Bill, it is quite the contrary. It is simply at the Order of the Treasury. The Treasury can intervene, and compel the Board of Trade, because if you come to this Clause, you will see the Board of Trade, whenever the Treasury say that these things are to be done, are 1843 compelled under this Section to do it. The Board of Trade will administer this Act when it passes into law. They will have first-hand knowledge, and will have their own ideas as to whether the scheme would be a success or not; but the Treasury may get alarmed about something. Some Treasury official may say: "This fund is going all wrong," and he may step in, and merely, as a Treasury official, compel the Board of Trade, and the whole of the people in the scheme, to alter and modify the arrangement. I think that is entirely wrong. I do not say that the words I have proposed are the proper drafting words that you can put in a Bill; but I think the President of the Board of Trade will see that this is a very important point.
If we let the Clause go through exactly as it is, we are handing the whole of this scheme over to the mercy of the Treasury, who have no practical knowledge, no experience of administering the Act, and no knowledge of how it is working. Merely because they are alarmed the whole thing has to be altered at their request. I think that is highly dangerous. I can quite understand the difficulty the President of the Board of Trade may be in—that he must act as a loyal colleague towards the other Departments, and he may say, "We cannot do this because it might offend the Treasury." Never mind about the Treasury, let us stick up for the Board of Trade; let us put so much backbone into the President this afternoon that he can go to the Treasury and say he, as President, did not agree to this. It would not be fair that he, as head of one Department, should agree to take away powers from another Department. So let it go forth that we as the Committee, took this matter entirely into our own hands, and insisted that in the administration of this Act the Board of Trade were to have a strong hand, and not to be left at the mercy of the Treasury. I expect the President of the Board of Trade to get up and try and throw my arguments over; but we must be in a position to look after ourselves in this matter, and I hope the Committee will stand by the Amendment for what it is worth.
Mr. BUXTONI do not think my hon. Friend can expect me to accept this Amendment. Here is a matter which is specifically one for the Treasury, and one with regard to which I have already undertaken to consider how far a check can be put on the absolute discretion of the Treasury, and my hon. Friend proposes to 1844 put in the Board of Trade and the Treasury in reference to this matter. Let me put him this question: Supposing the Board of Trade and the Treasury disagree, who is to settle the difference?
§ Sir E. CORNWALLThe Cabinet, of course.
Mr. BUXTONThat is not a matter you can bring before the Cabinet, and as a matter of practical working it really is unworkable. I hope, therefore, after the promise I have given to look into the whole question, and see how far I can meet the views of the Committee, my hon. Friend will not press the Amendment.
§ Sir E. CORNWALLI will withdraw it.
§ Amendment, by leave, withdrawn.
Mr. TYSON WILSONI beg to move the Amendment that is in my name in rather different words from those on the Paper. What I propose to move is that after the word "week" ["per workman per week"] to insert the words "or increase those rates equally as between employers and workmen."
The reason for this Amendment is that, in our opinion, the wording of the Clause is rather indefinite, and we want to make it quite clear that if there be any increased contribution at all, the increase shall be divided equally between the employer and the employed. I understand that the President of the Board of Trade is quite willing to accept the wording as suggested in the Amendment. It is simply to make the Clause clear, and does not alter the meaning in any shape or form.
§ Question, "That those words be there inserted," put, and agreed to.
§ The CHAIRMANThe hon. Member for Rugby (Mr. Baird) has handed me an Amendment which is out of order, as it comes in after the word "week." He must devise a form of Amendment, so as to bring it in in the proper place. May I suggest from the Chair to the hon. Member that he should, perhaps, put his Amendment at the end of the Sub-section in this form, to insert the words "or increase the rates specified in the eighth Schedule."
§ Mr. BAIRDI should be much obliged if I may be allowed to do that, and I beg to move to insert, after the words last inserted, the words "or increase the rates above the rates specified in the eighth Schedule to this Act."
1845 It is a similar Amendment to an Amendment in the name of the President of the Board of Trade to Clause 76, with regard to the five-yearly revision, that any increase take place, as the Bill stands, it shall not exceed one penny per workman per week. The right hon. Gentleman has an Amendment down to secure that that increase shall not be more than one penny above the 2½d. included in the eighth Schedule, and the Amendment I move is to produce the same result here—that the increase shall not be more than 1d. per week, and that the basis on which the 1d. is reckoned shall be equally laid down, namely, not more than 1d. above the rates laid down in the eighth Schedule.
Mr. BUXTONWhat I understand the hon. Member to say is, that under this Clause the contribution shall not be increased by more than 1d. above that specified in the eighth Schedule. Perhaps the hon. Member will remember that, under the quinquennial valuation of Clause 76, if the Board of Trade find, after inquiry, that the rates of contribution should be varied up or down, they have power to vary them accordingly. Suppose we had a rise in these contributions of a 1d., because the solvency of the Fund required it, and after that the emergency arose, the Amendment would prevent any part of the Clause coming in, because there had already been a rise of a 1d., under Clause 76, above the 2½d. Therefore, that would prevent any further increase. Similarly, if it had been reduced, it would not be possible to be raised to the effective point. We must have the power of having, if necessary, 1d. to whatever may be the revised rates at the end of the five years. Under the Amendment of the hon. Member, suppose the rates had been increased above the 1d. they could not be increased any further; and if they had been reduced, as much as 2d. might be put on at the moment. This would make the Clause quite ineffective.
§ Mr. BAIRDI think that the right hon. Gentleman has answered my point, but there is this situation to be considered. If you add 1d. it would bring the contributions up to 3½d. for both employers and workmen, which means 7d. in addition to what they have got to pay under the health insurance. That is putting a very heavy burden upon both employers and workmen. My intention was to limit it to 3½d. As the Clause now stands, there is no reason why the contribution should not go up to 6d. or 1s. I do not think that that is desirable. If the words I put in do not meet 1846 the case, I am quite ready to accept other words which will do; but there should be some limit to the amount of contribution which either employer or employed may have to pay.
§ Mr. BAIRDAs the Clause stands, there is no reason why they should not put it by pennies every time up to 1s.
Mr. BUXTONIf the hon. Member will read the Clause, he will see that the penny can only be imposed during the period of the Order. It certainly was not intended to have successive pence put on top of one another.
Mr. BUXTONCertainly, that was my intention. The contribution of 1d. will only last during the period of the Order, and if it is for three months they cannot then add another penny.
§ Mr. BAIRDPerhaps the right hon. Gentleman would look into the matter, so as to make it quite certain that this is expressed, and I will willingly withdraw my Amendment.
Mr. BUXTONOur attention was drawn to this particular point, probably by the Association to which the hon. Gentleman has referred, and we pointed out that it could not happen under this proposal and we understood that they were satisfied. We have looked into the words and there is no difference of opinion between us, but we will make our minds perfectly clear that these words do carry out the intention and if they do not we will add some; but we have no doubt about it.
§ Mr. GOLDMANI also desire to know whether there is any possibility of overlapping with this Clause and Clause 76 where another 1d. may be raised, or is it possible to raise 1d. under this Clause and another under Clause 76.
§ Amendment, by leave, withdrawn.
1847§ Mr. GOLDMANI beg to propose, after the word "shall" ["and no such Order shall"] to insert the words "simultaneously reduce the rate of unemployment benefit and increase of contributions from employers or workmen or shall."
The object of this Amendment is to provide that there shall be no increase of contributions and reduction of benefits simultaneously. Under the wording of the Clause it seems to me that this might be done, and I would like to have some assurance from the President of the Board of Trade that it is not contemplated. I do think that it is capable of a different interpretation, and I think it might be made clear if this Amendment were accepted.
§ Mr. DENMANI think the Committee on a previous Amendment under this Clause felt rather strongly that there should be no resort to that method of reducing the unemployed benefit except in the very rarest and most unusual circumstances. I think that the hon. Member who moved this Amendment would perhaps agree with that point of view. Does it not, therefore, follow that if you are only going to use this method very rarely it might be an additional justification for using it if simultaneously you reduce the contributions? I think the use of the weapon of reducing benefits, apart from the reduction of contributions, would be a very severe method of restoring the solvency of the Fund, and if used at all I think it should certainly be used in conjunction with the method of increasing the contributions. In any case, I think the matter is one which should be left to the authority, that is the Treasury, that will have to decide this matter when it arises.
§ Mr. GOLDMANI would like to hear the views of the President of the Board of Trade
Mr. BUXTONI think that my hon. Friend (Mr. Denman) has explained very clearly what I feel. We want to retain the fullest elasticity. The hon. Member's Amendment would very much curtail the liberty of the Treasury in this matter in this matter in deciding what would be the best method of putting the Fund again in a solvent condition. In those circumstances I cannot agree with him.
§ Mr. GOLDMANWhat is suggested in this Amendment is that yon shall not simultaneously say to the working man "you shall pay 1d. more, and instead of receiving 6s. benefit you will receive 5s. benefit."
§ The CHAIRMANI must point out to the hon. Member that he must not repeat his arguments.
§ Amendment, by leave, withdrawn.
§ Question, "That the Clause, as amended stand part of the Bill," put and agreed to.