HC Deb 02 July 1920 vol 131 cc908-13


(1) The funds required for providing unemployment benefit and for making any other payments which under this Act are to be made out of the unemployment fund established under this Act shall be derived partly from contributions by employed persons, partly from contributions by the employers of those persons, and partly from moneys provided by Parliament. (2) Subject to the provisions of this Act every employed person and every employer of any such person shall be liable to pay contributions at the rates specified in the Third Schedule to this Act. (3) A contribution shall be made in each year out of moneys provided by Parliament equal to one-third of the total contributions received from employers and employed persons during that year, and the sums to be contributed in any year shall be paid in such manner and at such times as the Treasury may determine. For the purpose of calculating the amount of the contribution under this Sub-section, so long as the Regulations under this Act provide for the payment of contributions by means of stamps, the sums received in any year on account of insurance stamps, after deducting the sums, if any, refunded on account of insurance stamps or on account of contributions paid in respect of a person believed to be but not being an employed person, shall be deemed to be contributions received from employers and employed persons in that year. (4) Except where Regulations under this Act otherwise prescribe, the employer shall in the first instance be liable to pay both the contribution payable by himself (in this Act referred to as "the employer's contribution") and also, on behalf of and to the exclusion of the employed person, the contribution payable by that person, and subject to any such Regulations shall be entitled to recover from the employed person, by deduction from his wages or otherwise, the amount of the contributions so paid by him on behalf of the employed person in accordance with the rules set out in the Fourth Schedule to this Act. (5) Contributions in respect of employed persons shall cease to be payable on their attaining the age of seventy. (6) Where it has been decided by the Minister in manner provided by this Act that contributions under this Act are not payable in respect of any person or any class of persons, and that decision is subsequently revised or reversed on appeal so as to make contributions payable in respect of that person or that class of persons, contributions shall be so payable only as from the date on which the decision was so revised or reversed. (7) The employer of a person who, though employed within the meaning of this Act, is not insured under this Act by reason that be has obtained and holds a certificate of exemption under this Act shall be liable to pay the like contributions as would have been payable by him as employer's contributions if that person had been a person liable to be insured under this Act, and Regulations made under this Act may provide that in the event of that person subsequently becoming so insured every two contributions paid in respect of him under this Sub-section shall be treated as if they had been one full contribution paid in respect, of him as an employed person under the other provisions of this Act.


I beg to move, in Subsection (1), to leave out the words "contributions by employed persons, partly from."

During the Committee stage this Amendment was down on the Paper, but owing to a misunderstanding as to the time of the meeting it was overlooked and that is my reason for bringing it forward now. My first reason is, that in a well-organised and well-ordered state there should be no necessity for a Bill of this character, because there should be no unemployed, and every man willing to con tribute to the wealth of the State either mentally or physically should have an opportunity of doing so. If our system denies a man that opportunity then he should not be penalised if he occasionally finds himself unemployed through no fault of his own. That is my first objection. The willing producer ought to be a help instead of a hindrance to the State; therefore I enter my protest against any Bill or Act of Parliament that penalises the man who is willing to work, and deprives him of the opportunity when he is willing to produce for the nation. My next objection is that where private enterprise fails to do this, then the State in its own interests should take the necessary steps to find that man work. While private enterprise does exist and while it fails to provide the man with work, then the industry should take upon itself the burden with the State of paying an unemployed benefit to the man out of employment through no fault of his own. My next point is that, for the first time in the history of industry, millions of men are brought into this scheme of unemployed benefit through their organised trade unions which never before, had attached to them a scheme for unemployment. Therefore the difficulty is in many cases, if I may put it figuratively, to acclimatise them perfectly to an Act of Parliament of this kind. The dockers industry in which I am interested contains men who are never permanently employed and yet under this Bill they will be compelled to pay a contribution and will receive no benefit from the payment of that contribution. I would respectfully submit to the hon. Member below the gangway (Mr. Locker-Lampson)that if he wants a remedy for that kind of thing, the only remedy is to bring the men under the Act.

The men in the particular industry to which I am referring number 500,000 and there are casual labourers in other trades. Under the provisions of this Bill they are to be permanently disqualified from receiving any benefit of any kind. I know consecutive periods are allowed, but they can never apply to the man who is idle on the first two days of the week but gets employment on the first or second half of the third day, which employment disqualifies them from receiving benefit. This goes on from week to week and month to month, and a man will never be qualified for benefits. That in itself necessitates some provision for men who are employed in industries like the one I have mentioned. There is another objection which I have to raise. The man in the organised trade union is to pay 100 per cent. addition to his contribution. Like everything else, the cost of working trade unions has gone up. Secondly, you are burdening that man with documents which he absolutely detests. He has to have, first, his trade union card, then his national health insurance card, and now you want to provide him with a separate document to carry about with him and to be separately stamped. In addition to that, he has his trade union contribution to pay, his insurance contribution, and every member of his family is insured, and now you are adding another amount to be deducted from his wages. It very nearly amounts to the last straw, and the result will be, if these things go on much longer, there will be a very vigorous opposition on behalf of labour. By placing these burdens on industry you are increasing, it may be said, the cost of production. That is always the case. If you take 3d., 4d. or 5d. from a man's wages every week in addition to what he is now paying, you are reducing the purchasing power of his wages, and if you go on piling up all these additional burdens, you will soon have the dockers and other workers going to their employment equipped with an attaché case in order to carry the documents they are expected to have upon them. Finally, you are producing a system which penalises a man who, through no fault of his own, is thrown out of employment.

Lieut.-Commander KENWORTHY

I beg to second the Amendment. I would like to say that the whole scheme of unemployment insurance in this country is wrong, and cannot last very much longer. Many hon. Members believe with myself that we shall never get over the unemployment problem until each industry is made responsible for its own unemployed, and each casual industry is decasualised. Until that is done, you will never have industrial peace. This Amendment is a step in that direction and therefore I support it. I wish it had also been possible to leave out the words "provided by Parliament." I had thought of moving an Amendment to that effect, but, having come to the conclusion that there was little chance of getting it carried, I decided not to waste time upon it and to confine my remarks to this particular Amendment. I am particularly speaking now of cases where, in certain industries, output is deliberately stopped or decreased, and men are thrown out of work for market reasons, in order to create an artificial scarcity. That is done much more frequently, perhaps, than hon. Members opposite will admit. It is done in other countries besides our own. It is done, for example, in the United States, and undoubtedly we in our industrial organisation and methods, are following in the footsteps of the United States, which are more highly developed as a capitalist State than we are. We, however, are catching them up, and not slowly. There are many cases already, and there will be more, in which it pays to close factories in order to create an artificial scarcity, to prevent the market being glutted and prices being brought down. A relevant case, which was admitted by the Government, was mentioned yesterday with regard to wool. Wool was deliberately held up from the market. The stoppage of manufacture is the same process. Why, in that case, should the men employed in the industry suffer? The idea that I am trying to explain is that each industry shall be a self-contained whole, in which the unemployed and the sick shall be a first charge on the profits of the industry. I admit that at present their maintenance is partially a charge on the employers. It is also partially a charge on the workmen and on the State. The whole people, however, have to pay the employers' contribution in the shape of increased charges. Why not throw the whole of the unemployment benefit on to the industry, and make it payable, not by the separate units in the industry, but by the industry as a whole? In an industry which is closely organised, as all industries ought to be, the unemployed should be in the nature of an overhead charge.


I gather that my hon. and gallant Friend thinks that the whole thing is quite wrong. I am afraid I cannot take that view up at the moment, but must confine myself to what was said by the hon. Member for St. Helens (Mr. Sexton), who raised a simple and clear issue. His Amendment, together with the Amendments consequential upon it, would have the effect, as he put it quite frankly, of making Sub-section (1) of Clause 5 read that the funds are to be derived partly from contributions by the employers, and partly from contributions by the State; that is to say, that the employed person is not to pay any contribution to the scheme. That is the issue, and it is a perfectly clear one. The scheme is to be a non-contributory scheme so far as the insured persons are concerned. That would be a departure, as my hon. Friend, of course, knows, from the principle of the Health Insurance scheme, and of Part II. of the Insurance Act of 1911, which principle we have ventured to adopt in this Bill. In both those cases it was held that there should be three contributions, from the employer, the employed person, and the State, respectively. The only illustration which my hon. Friend might have quoted, but did not, where the insured person does not make a contribution, is the case of the Workmen's Compensation Act. He might have quoted that with some effect. In that case, however, the whole charge is placed on the employer, as my hon. Friend knows. The benefit conferred upon the insured person in this Bill, as amended in Committee by my hon. Friend, is a weekly benefit of 20s. a week, instead of 15s., and the wiping out of any waiting period. That means a cost of ls. 4d. a week under the Bill as it will stand as thus amended.' It would be out of Order to propose that the State contribution should be increased, and I am afraid I cannot give any undertaking to that effect. If, therefore, my hon. Friend's policy were adopted, the employer would pay 1s. 2d. a week. The State contribution is 2d., and that 2d. must stand, not only because of the rules of this House, but because of the fact that I cannot undertake to find any more money, for reasons which I shall presently show.

Is it reasonable that the employer should pay 1s. 2d. a week? Would not there be a good many people who would say, to use my hon. Friend's phrase, that that is piling up the agony? It may be asked why the State contribution should not be increased. Let us look at the Act of 1911. The State contribution under that Act is about £250,000 a year. Under this present Bill, the State contribution to be provided will amount to about £3,750,000, that is to say, about £2,500,000 a year more than the old contribution. I am bound to say, considering the terrific strain which the War has put upon our national finances, that that is a not unhandsome contribution. We cannot increase it. Take the Bill as we propose it, with a contribution of 15s. a week and a waiting period of three days—

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