HC Deb 12 July 1922 vol 156 cc1249-71

Order for Second Reading road.

The MINISTER of LABOUR (Dr. Macnamara)

I beg to move, "That the Bill be now read a Second time."

This is a Bill to deal with the gaps in uncovenated benefit under the Unemployment Insurance Act of last April. We have thought it necessary to modify the terms of that Act because of the urgent representation of boards of guardians in the hardly-hit areas. Happily I can make the change, which I will presently describe, without asking for increased contributions from the three parties contributing to the insurance fund—namely, the employers, the people who are in work, and the State, and without increasing my borrowing powers. Of course, the House understands that I am here dealing with one side, and one side only, of our many-sided endeavour to find a remedy and a palliative for unemployment. I cannot here and now discuss the various schemes of relief works now being operated, such as the effect of the export credits scheme, or the operations of the trade facilities scheme, although each has played and is playing a valuable part in our provision against unemployment.

Lieut.-Commander KENWORTHY

Why cannot you deal with them?


Simply because I am dealing with the matters raised in this Bill. The grave industrial depression from which we have been suffering now for 22 months began to reveal itself in the autumn of 1920. In September, 1920, when the slump began to develop, there were about 300,000 persons registered as wholly unemployed in Great Britain. In the succeeding months those numbers went up by leaps and bounds, and by the end of June, 1921, the number registered as wholly unemployed reached over 2,000,000. In addition, there were over 750,000 workers registered as feeing on short time. During the autumn of 1921 there was some improvement, but last winter the figures went up again. At the beginning of this year there were over 1,800,000 persons registered as wholly unemployed and nearly 300,000 on short time. Since the beginning of this year there has been a steady but slow improvement week by week, and to-day there are just under 1,400,000 registered as wholly unemployed and just under 100,000 on short time.


Can the right hon Gentleman give us the percentages?


I have not prepared the percentages.


Do those figures include the miners?


Some miners, but not, I think, many on short time. For the purposes of the recent Insurance Act, the Act of last April, a forecast-had to be made of the course of unemployment for the period up to July, 1923, during which time the Act is to be in operation. The assumption made was that unemployment might fall to about 1,500,000 by the end of June this year, and remain on the average at about this figure for the succeeding 12 months, thus bringing us up to July, 1923. Things have so far turned out rather better than we have anticipated, and that is the first point I wish to make. The ordinary principle of insurance is to limit the payment of benefit to those qualified for it and who have made the requisite number of contributions. That principle remains the permanent basis of the insurance scheme. Owing, however, to the great amount of unemployment, and particularly to the fact that unemployment was already very bad when 8,000,000 of the 12,000,000 people who are now insured came into the Act for the first time in the autumn of 1920, I felt it to be necessary, from the very outset, to depart, in a very large number of cases, from that established principle of paying the requisite number of contributions in advance of benefit; and we have, in fact, paid what we may term uncovenanted or free benefit to persons who, although they have paid few or no contributions so far, can show that they are, in ordinary times, genuine wage-earners in one of the insured trades. These persons will remain insured, and, when trade takes a turn for the better, will resume employment and do their share towards paying for the benefit which they have drawn. In a word, I added to the permanent side of the Act an emergency side, and the emergency side has involved operations at least as great in volume as the permanent side. That is the second point that I want to make.

The more I think of it, the more I feel that the step I took when the slump came, of thus adding an emergency side and paying benefit in advance of contributions, the more I feel that I was right. It has enabled hundreds of thousands of persons to preserve their self-respect and avoid recourse to the Poor Law; and I am bound to say that the cheerfulness with which the heavy contributions rendered necessary to do all this have been paid by those lucky enough to be in work, is a fine example of the spirit of helpfulness one to another which characterises our people. When we reached April of this year, the provision made for uncovenanted benefit up to that point had in a great many cases been exhausted, and in all cases would be exhausted by this present July, because the provision made by the Act did not carry us any further than that. The continuance of grave unemployment made it inevitable that a further grant of uncovenanted benefit should be made, and provision was accordingly made, by the Act of April last, to cover the period from April, 1922, to July, 1923. At the same time we continued the dependants' grants in respect of wives and children, which had been provided as a temporary measure for six months in the previous November, to cover the winter and early spring, and which has been of a great advantage. We continued that Act from April last down to July, 1923.

The joint effect of these measures will place upon the Unemployment Fund, down to July, 1923, a liability for paying benefit in the period from April last to July, 1923, which it was estimated might reach a figure of £60,000,000, the State finding one-fourth; and it must never be forgotten, when the term "dole" is used in connection with this money, that three-fourths of this money comes from the employers and the employed persons themselves. That provision of £60,000,000 was made possible, first of all, by continuing the very high contributions which have been necessary in the past, and continuing them, not only for the Insurance Act, but for the Unemployed Workmen Dependants Act, which I carried forward. As I have said, these contributions are very high, particularly in the case of people who are working short time. They amount, in the case of a man, to l0d. a week from his employer and 9d. a week from the man; and, considering the amount that they have 10 pay for Health Insurance, and the contributions which many of them make voluntarily to trade and friendly societies, I am profoundly grateful for the generous way in which they have paid these high contributions and paid them without complaint.

In addition to continuing these high contributions, it was necessary, in order to finance the scheme up to July, 1923, to increase the borrowing powers which I already possessed, and the House, at my suggestion, increased them from £20,000,000 to £30,000,000 in the Act of last April. As a matter of fact, I have borrowed, up to now, £15,000,000. We found, with these provisions, that we could furnish 37 weeks' benefit from last April to July, 1923, and we thought it prudent to reserve 22 of those weeks for next winter and early spring, thus leaving 15 weeks in the period of 30 weeks between April and November, 1922. We thought it expedient to divide the 15 weeks up into three Parts of five weeks each, laying it down that, when the five weeks' uncovenanted benefit had been drawn, no further benefit should be payable until after an interval of five weeks. Therefore, from April to October, as the scheme of the Act of last April stands, uncovenanted benefit would have been paid in this way: five weeks' benefit, five weeks' gap, five weeks' benefit, five weeks gap, five weeks' benefit, five weeks' gap. That covers the 30 weeks of the calendar for that period.

As soon as the first gap of five weeks was entered upon, we received representations from Poor Law authorities that the effect of the gap was automatically to throw large numbers of persons, who hitherto had been upon the Unemployment Insurance Fund, upon the local rates. In a number of the areas from which representations were received by my right hon. Friend the Prime Minister, the local rates are already very high, and the authorities urged upon us, on that occasion and on others, that the system of gaps should be abolished. In view of these representations, the situa- tion has been most carefully examined. As a matter of fact, we are rather better off, as I have already indicated, as regards unemployment, than we had anticipated, and, therefore, better off as regards the financial position of this fund. Moreover, the stops which I have taken, and in which I have been very greatly helped by the local employment committees, to reserve benefit for those who are best entitled to it, and, in particular, to look closely at the claims of boys and girls and single young men and women, have materially eased the situation. That policy I shall continue, because I want this money, limited as it is, to be conserved for those who need it most—men and women with little children. We anticipated that we should have borrowed, up to this moment, 219,000,000, but, as a matter of fact, for the reasons which I have shortly given, we have borrowed, as I have just said, £15,000,000, and, consequently, it will be possible, in response to the appeal of the local authorities, to provide, between the 6th April last and the beginning of November, 1922, 22 weeks' benefit instead of 16, as set down in the Act of last April. For those who have been unemployed continuously since the 6th April, uncovenanted benefit has already been paid for the first five weeks, and they have already served, if I may use the term, the first five weeks' gap, and are now in receipt of their second five weeks' of benefit. That will come to an end tomorrow week, the 20th. Therefore, in meeting this demand, which is urgent, I hope I may ask for the co-operation of the House to secure the passage of the Bill with all expedition.

4.0 p.m.

I have only one or two other words to say. I think it is essential to maintain the principle of having some interval between the periods of benefit, but we have come to the conclusion that we can reduce the interval from five to one week, as the Prime Minister said, in reply to my right hon. Friend the Member for Platting (Mr. Clynes) on Monday. This will mean that as from the 20th July, for those who have then drawn 10 weeks' uncovenanted benefit since April and remained unemployed, the provision will be as follows: One week gap, five weeks' benefit; one week gap, five weeks' benefit; one week gap, two weeks' benefit. That will carry us down to the end of October. I would remind the House that the Act we passed last April already makes provision for payment of benefit from November, 1922, to July, 1923—

Lieut.-Commander KENWORTHY

With gaps.


During that period of 22 weeks—the provision I still have in hand, from November on—the benefit will be drawn, first of all, in 12 continuous weeks, if necessary, under the same conditions as it has been drawn since April under the Act of 1922, and two further periods of five weeks. But in connection with those five weeks I have laid it down that it is to be subject to the payment of some contribution, because I want to get back, I hope not unduly hastily, to the normal conditions under which people have to pay some contributions to benefit. Therefore I think that the provision already contemplated from November onwards may stand. The cost of this proposal to reduce the gaps from the 20th July to the end of October, or the 1st November, is estimated by the Government Actuary at £2,750,000. I have already mentioned that although a considerable part of the reduction in the anticipated expenditure is the result of the smaller number of pea-sons unemployed, savings have, been effected in the administration of the scheme in the direction particularly of not unreasonable restrictions, as I think, in regard to payment of benefit to boys and girls, and to single young men and women; and our efforts in that direction, that uncovenanted benefit should only go to proper cases, will continue. It is our manifest duty, as far as possible, to see that the money so sorely needed, and contributed by very heavy contributions of people at work, and particularly people on short time, is not improperly dissipated. I am not making any general charge, but I desire to say that it cannot be denied that there are some young people without responsibilities whose endeavours to find work of some sort or another—


I have not seen this Bill, but does it deal with all these things, with the administration of the Act?


No, Sir, I shall have to lay down Regulations in connection with it. I desire to say that there are some young people without responsi- bilities whose endeavours to find work of some sort or another apparently cannot be described as particularly energetic. My difficulty as regards the men is to put my hand upon the work. In this connection, I should like to take the opportunity to appeal to employers of labour to send us their vacancies, and then we can put the man wanting a job into touch with the job that wants a man. We have had very few vacancies during this long time of depression notified to us, except for women. They have been invaluable. In the last 18 months we have filled 284,000 vacancies for women, and of these, 190,000 have been for domestic service of one kind and another. Employers will be rendering a signal service to themselves and to the community, and will be helping the administration of the scheme, if they will only place their vacancies at our disposal. I am asking in this Bill that the 15 weeks' uncovenanted benefit from April to November may be 22 in order to avoid two more gaps of five weeks each. I do this because of the case made out by the Poor Law guardians in the areas heavily hit by the long period of depression through which we have been passing. I can do it without asking for a further grant from Parliament, and without increasing my borrowing powers, but, of course, I am to the extent of this additional seven weeks postponing the date at which my scheme would otherwise again become solvent. I beg respectfully to ask the House to do what it can to give this Bill a speedy passage.


The right hon. Gentleman has kept within the narrow limits of this small Bill, and it is not my purpose to attempt to travel far outside it. The Act which this Bill proposes to amend may fairly be described as an Act very frequently amended, partly for better and partly for worse. I think this is the sixth or seventh amending Bill dealing with this piece of national legislation, and I repeat the statement made on a former occasion, that this, the last for the moment, will not be the last, and that later on a Bill will be introduced again to amend a piece of legislation which to a large extent has become patchwork in detail. This Bill will add very little, if anything, to the needy recipients of unemployment benefit. It is not so much a Bill to give additional support to men in want as it is a Bill to relieve guardians driven to a state of desperation because of the gaps that were provided for, and are still provided for, in the existing law. Indeed, the right hon. Gentleman in his speech to-day has twice reminded us that this Bill is the result of the approaches of the guardians who recently sent a deputation to the Government to explain their condition of embarrassment, and indeed, in some cases, their conditions of utter despair. While I do not propose to enlarge upon the general theme, I would like to remind the House that, in some districts, the degree of unemployment is such that most of the able-bodied workers in the locality are unemployed and are living not so much on the support of those who are in work as on the money that for the time being the guardians are able to borrow, supplemented by what the Act provides. So this Bit. is a concession to the desperate state of those local authorities who can no longer stand the strain of trying to maintain this considerable proportion of unemployed which is thrown on their hands. This Bill is an admission, further, on the part of the Government of the need for making this unemployment question more a national and not a local consideration, and for the nation assuming such responsibility for dealing with this distress of unemployment as will reasonably protect these distressed industrial localities from misfortunes which have not to be borne by the more fortunate centres of population in other parts of the country.

The right hon. Gentleman has cited figures showing some improvement in the state of unemployment. I do not think these figures fully express the realities in many parts of industrial England, particularly in those centres where work consists largely of employment in mining, steel industries, ship construction and repair, and so on. These figures are again reduced, because such a large number of unemployed workers have completely lost heart and having exhausted their benefit are not included in the statistics which the right hon. Gentleman has given the House to-day. All the same, there is, no doubt, some very slight improvement, but it is an improvement so slight as to entitle us to call upon the Government to cease dealing with this question by mere measures of relief, and the mere process of continuing to give away something for nothing at all, and leaving this enormous volume, or surplus, and capacity for wealth-production entirely unused, and even very badly maintained. As yet, the right hon. Gentleman cannot look forward to any approximate date when there will be a substantial reduction in this volume of unemployment. Conditions have created in this country a class of permanent unemployment, or a class of workers who have come to regard the state as a permanent part of our social and industrial system. So much is this so that the unemployed have become an organised outside body, with committees, councils, and national executives, and some features of the unemployed problem in this country have been used only for the purpose of securing some greater maintenance from the State. It will be good for the State and good for the unemployed if we can cease to pay them something for nothing at all and to pay them something in return for some useful service to the State. I am not proposing to pursue the question, but I would like to remind the right hon. Gentleman that the Prime Minister last autumn made solemn pledges to the community in a statement in Inverness on his way from the North of Scotland. The right hon. Gentleman, referring to that speech, will find definite assurances that schemes were to be produced and formulated by the Cabinet, and, furthermore, that measures of relief would be perfected, and that, indeed, the principle of sharing the last crust that was in the national cupboard would be carried out in any policy propounded by the Government. I allege that in spite of those public pledges, which at that time gave relief and warded off a very menacing attitude then being assumed by the unemployed and for the moment placated the disturbed labour elements who went to interview the Prime Minister, they have not been kept either in respect to schemes or measures of relief. Indeed, the whole system of relief as it has been followed is wasteful. It cannot be called a policy, and the Government is still determined to pursue this plan of giving out some sort of assistance to buy off what are frequently dangerous tendencies on the part of this great number of men. They would be a better and a more useful body if some degree of service could be exacted from them by a moderate change of policy on the part of the Government in regard to unemployed benefit.

While not going into the general question, I would like to say that we who are more or less personally associated with the administration of this law are thoroughly dissatisfied with it in detail. It bristles with anomalies. It is a law of which experience justifies a demand for a complete review and overhauling, especially upon the administrative side, and, although this is not the place or the moment for going into that question. I would like the right hon. Gentleman to realise that we are very much concerned about the administration of it, and that in our judgment it requires a good deal of overhauling. I have not in mind at all that feature of administration which has dealt firmly with some few who may reasonably be termed shirkers, and who have not accepted or sought opportunities for employment. There are some few undoubtedly, but it does appear from me from reports that come to hand that the existence of these few has been used to exclude from benefit a considerable number of deserving unemployed who have not been justly or reasonably treated in respect to their claims.

This Bill proposes to reduce what is termed the gap from five weeks to one The right hon. Gentleman did not adduce to the House any argument to justify a gap of any kind. If the impoverished condition of the guardians has induced the Government to recognise the unwisdom of a gap of five weeks, what wisdom can there be in maintaining a gap of one week? The little that the unemployed receive is given on the principle of affording such monetary relief to a distressed person as will keep that person from a state of starvation, and it is impossible for these unemployed people out of what they receive in the four weeks to save any sum on which they can live in the fifth week. What are they to do during that fifth week? It is known I am sure to every member of the House that so far as the unemployed had any reserves at all they have been exhausted. The pawnshops are full, and I hear that some pawnbrokers have had to go out of business for the reason that their places are choked with goods, and that articles are not being taken out. Indeed, the homes of many of these poor people have been denuded of furniture and small household goods which are necessary, and the pawnshops are choked with these things. They cannot within four weeks save anything at all. The sum they receive in these five weeks is too small for their immediate need, and it is a mockery to these poor people to say that in the fifth week they must do without this benefit and must do the best that they can. I ask the right hon. Gentleman, either now or on the Committee stage, to give some justification for the principle of this gap. Is there any curative quality in it, or is there any moral value in it? I think, as he has been able to do without borrowing and without demanding an increased contribution, to draw even more upon those future resources which are really at the bottom of this Bill and abolish completely a gap which cannot be fairly defended either for one week or for five.

We accept this Bill as an instalment of some further support, but we do not in the slightest degree abate our protest against the policy of the Government or depart from our view as to the real remedy for dealing with this serious domestic, economic problem. We join with the right hon. Gentleman in expressing a hope that the House will give facilities for the speedy passage of this Measure, but we think that in Committee his mind should be kept open in order that we may further debate the policy of any gap at all, whether for five weeks or for one.


I am sure that the whole House will agree with the closing remarks of the right hon. Member for Platting (Mr. Clynes) in welcoming this Bill as an instalment, so far as it goes, and wish it a speedy passage. The right hon. Gentleman, in introducing the Bill, referred to a deputation which waited upon the Prime Minister and himself a few weeks ago representing the necessitous areas who are heavily overburdened by the abnormal amount of unemployment. I understand from his remarks that this is the answer of the Government to that deputation. I am afraid from a reply which I got from the Colonial Secretary yesterday that this is all that they are going to do. I asked the right hon. Gentleman— Are we to understand that the concession announced by I he Prime Minister is the limit to which the Government is prepared to go to meet the deputation that waited on them some weeks ago from necessitous areas? The reply unfortunately was as follows: Yes. A Bill will be introduced, and opportunities for raising these points will then occur."—[OFFICIAL. REPORT, 11th July. 1922: col. 1046, Vol. 156.] If that be the final answer of the Government, I am sure that it will be received by the representatives of the necessitous areas and the necessitous areas themselves with great disappointment and dismay. May I remind the right hon. Gentleman and the House of the representative character of that deputation It was introduced by my hon. Friend the Member for West Ham. Its chief spokesman was the hon. Gentleman the Member for the Ecclesall Division of Sheffield (Sir S. Roberts). and its second spokesman was the right hon. Gentleman the Member for Ladywood (Mr. N. Chamberlain), two of the most stalwart supporters of the Government, indicating that this deputation was representative of all sections of the House and of all the areas which are so heavily hit at the present time. I am sure that all of them will receive with alarm the fact that this is all that the Government are proposing to do to meet the terrible plight of those areas which are so heavily hit by the present unemployment. The Minister referred with some satisfaction to the fact that there was a general decrease in the amount of unemployment, taking the average of the whole country. I asked him if he could give us the figures, but unfortunately he was unable to give us the percentage figures of unemployment. It seems to me that the fact the average is declining is an added argument in favour of more assistance being given to those particular districts where the amount of unemployment is increasing. The Parliamentary Secretary to the Ministry of Labour told me yesterday that the amount of unemployment in the iron and steel trades is 34.1 per cent.—a most appalling state of unemployment. There have been published to-day Lioyd's shipping returns, and they show that for the last quarter the tonnage laid down in the shipyards of this country was the lowest known for the last 30 years. They further show that the amount of tonnage under construction last quarter was the lowest ever known in the history of this country. In fact, the tonnage turned out was even less than that turned out by Germany. The engineers report that 29 per cent. of their men are unemployed at the present time. With appalling figures like those and with no prospect of any considerable improvement in the heavy iron and steel trades of this country it is really most alarming that all the Government can do is to reduce the waiting period from five weeks to one.

The deputation from these necessitous areas intended that there should be relief not only for the future but for the present. I wonder ill the Minister really realises and appreciates the condition, almost bordering on bankruptcy, of these industrial areas where the heavy iron and steel industry and certain other industries are concerned. Does he realise that the rates are from 20s. to 30s. in the £ and that, in addition, the guardians have had to borrow hundreds of thousands of money amounting to over £6,000,000 in 52 areas? With these appalling debts and rates of from 20s. to 30s. in the £, they really have a right to ask the Government to do something more than they propose. The deputation to which the right hon. Gentleman has referred asked that the measure of relief which was given last year to the London areas by means of the Measure for the equalisation of the poor rates should be applied to the provinces. Figures can be produced showing that the variations in the provinces as between one district and another are infinitely greater than the variations which prompted the Measure of last year to equalise the poor rates in the London areas. Statements were submitted showing that in some industrial areas unemployment relief was received by five people per thousand, whereas in other districts the number was from 120 to 130. These areas are heavily hit in having to support people who, owing to war conditions, left their own districts to go into these iron and steel districts and are now compelled to remain there because they cannot go back to their own districts on account of the shortage of houses.

These districts, owing to this large amount of unemployment, for which they are in no way responsible, have a right to ask the Government to do something to save them from bankruptcy. I put it to the right hon. Gentleman, in the interests of that recovery of trade which we all recognise as the prime factor for which we should all work, that he should not seek to pile up the rates in these districts. It was pointed out by one firm on that deputation that whereas the burden of the local rates in 1914 was equivalent to 8d. per ton of their output of steel, to-day the local rates amounted to 5s. 4d. per ton. This is piling up a burden which is going to cripple industry and destroy any possibility of the revival of trade. I do urge that something more is wanted than this Measure, welcome as it is. I hope that the reply given by the Colonial Secretary yesterday is not the final word of the Government on this question. If it be, then we shall have to have deputations from the Mayors of Sheffield, Birmingham, and Middlesbrough to see whether they cannot influence the Prime Minister in the same way that the Mayors of the London boroughs were able by direct action to get that which they could not get by reasonable argument. I hope that it will not come to that, but that the Government will realise the seriousness of the question, and that it is unfair that one district should suffer more severely than another. It is indeed a national question and demands national assistance. I hope the Government will do more than this paltry though welcome Measure to help these necessitous areas which are on the point of bankruptcy.


The Minister of Labour is far too old a hand to be disappointed at the somewhat grudging spirit in which his Measure has been received. The attitude of the Labour party, as expressed by the right hon. Gentleman the Member for Platting (Mr. Clynes), seems to be this: "We will take anything we can get from you, but we will give you no thanks. We will reserve to ourselves the right to point out how much more we should have done had we been in power." At some time or other, they may be put to the test. My right hon. Friend has remarked—and I agree with him—upon the futility of continuing to pay something for nothing. He has suggested, not for the first time, how much better it would be if we could get some work in return for this. I agree with him. I have advocated the same thing before, but I think it would be a mistake if the House were to run away with the idea that a scheme of that kind is capable of anything like universal application. I think it could only be applied to cases where work was being found by public authorities, and, even so, it does not in any way solve the difficulty of finding suitable work for the man whose trade is not that of a navvy or an agricultural labourer, but who is accustomed to work with his fingers at fine work, such as jewellery or any other craft, and who cannot be found work suitable for him, unless it be work of his own trade. I am not at all sure that my right hon. Friend is not prepared to go so far as to say that the Government should find him work in his own trade. I think I have seen some proposals of that kind in a Labour programme, but what on earth would be done with all the brooches, bracelets and rings that would be made in a Government factory, in order to give work for the unemployed, for which we 6hould be unable to find purchasers, I have never heard explained.

As one of those who took part in the deputation to the Prime Minister, I wish to welcome this instalment for the relief of the areas which have been so heavily hit by unemployment. I would like to show the House what this has meant to the guardians by quoting some of the figures of relief in my own district. Before the gap came into operation, the guardians in the area of the Birmingham Union were steadily dealing with from 18,000 to 19,000 cases per week, on which they were spending about £15,000 weekly. The moment the gap came into operation, the number of cases at once rose to 25,000 and £25,000 a week was spent upon them. That brings two consequences in its train. First of all it means, of course, an enormous addition to the overdraft of the guardians. In Birmingham, the guardians have an overdraft of something like half a million, which has been incurred simply through this unemployment. There are other towns which are in even a more parlous condition as regards the overdraft. Then, if a board of guardians, which has got its machinery arranged for a certain average number of cases per week, has suddenly dumped upon it an increase of 50 per cent. in the number of cases which they have got to look after, it dislocates their whole machinery. As a matter of fact, while it was found possible, so long as the work was steady, to investigate each case once every fortnight, the moment this gap came into operation, so that the number of cases was greatly increased, that investigation had to be completely given up. That is not a good thing for the guardians, and it is not a good thing for the people themselves. Therefore, the Measure which the right hon. Gentleman has introduced to-day, and which I congratulate him upon being able to offer to us without having at the same time to ask for more money, will be a very welcome change to the board of guardians.

On the question of the one-week gap, which he has still left in operation, I certainly expected he would have enlarged a little upon the necessity for that one week because I think it is quite clear that what will happen will be that, as soon as the one week comes, those who have been in receipt of unemployment benefit, will go straight away to the guardians, and you will have this precise phenomenon reproduced, of which I have given figures to the House to show the operation. I can only imagine that the object of my right Friend is, so to speak, to pull the men up at certain intervals, to make them realise that they cannot go on for ever receiving benefits, and must look round to see if they cannot get work. I imagine that is the object of the week, but I confess I am very sceptical. I am afraid they have already got into the habit—I do not know what else they could do—of going from one body to the other, and when not enjoying unemployment relief, to get what is necessary to sustain their lives, and those of their families, from the guardians. The idea that, they will run round for a week looking diligently for a job, which they know in their hearts they are not likely to obtain—I very much doubt whether that will be sufficient inducement to them, and I fear very much that the result of this gap will be, that after every period of five weeks, we shall have the same tremendous rush to the guardians, the same dislocation of their machinery, and, to some extent, although to a very much diminished extent, a further piling up of the liabilities of the guardians. I hope my right hon. Friend will give further consideration to that point in Committee.

With regard to the general question, of which my hon. Friend the Member for West Middlesbrough (Mr. T. Thomson) spoke, I agree that, at any rate, unemployment, as we know it to-day, is not due to local causes. It is due to national causes. That is admitted, and it is not fair that local ratepayers, by the accident of the conditions in their neighbourhood, should be treated so differently as they are under our present rating system. Whether the equalisation, or the greater equalisation, of the burden should be necessarily carried out by putting the burden on the taxpayer, is another matter. I am not sure that the resources of civilisation are exhausted, and that there are not other ways of meeting this inequality, but I feel certain that it is so great and unfair, that something will have to be done sooner or later to put it right, and, like my hon. Friend, I reserve full power to come again to the Government to make further representation to them upon that subject.


I want to obtain an assurance from the Minister of Labour on one particular point before we pass this Bill. First of all, I want to make one or two observations concerning the actual Bill before us. It seems to me that this Bill is a very good example of the hand-to-mouth method in which this Government has dealt with the whole unemployment question. This Bill only deals with the third period of unemployment,. When we come to the unemployment of the fourth period—the period of 35 weeks—I cannot see how the Minister of Labour can avoid having to come to the House some time in the Autumn Session, and asking us to pass another Bill on similar lines to deal with the gap which undoubtedly occurred in the first part of this year. This Bill is the result of representations made, in March of this year, by the Guardians of West Ham to Members of Parliament whose constituencies are situated in that area. Those representations were made a long time before the effect of the gap was upon them. It had nothing to do with the gap whatsoever. As a result of the representations, a conference was called in this House of Members concerned, which led up to the meeting and the deputation to the Prime Minister on the 20th June. This question is really a question between the Government and the ratepayers. It does not really affect the question of the unemployed. I shall certainly support this Bill, because beggars cannot be choosers at the hands of a Government of this sort, which has particular concern in supporting the interests of the rich, and not protecting the poor.

When the deputation came before the Prime Minister, he showed quite clearly that it was a question of a tug-of-war between the ratepayers and the taxpayers. What does this competition between ratepayers and taxpayers mean in areas such as that which I have the honour to represent, where there are not rich people residing? The competition between the ratepayers and the taxpayers is a competition between the rich and the poor. [HON. MEMBERS: "No."] It is certainly so in areas such as mine, composed almost entirely of industrial workers and low-paid clerical workers employed in the City of London. In these areas, where unemployment is greatest, the greatest charge on the rates occurs, and the few workers who are in employment have to bear the burden of those who are unemployed. It is very frequently stated in this House that we cannot afford to be more generous to the unemployed, but, as I have often pointed out, we are not really as badly off in this country as people make out. From figures published last week I find that £448,774,277 was subscribed to new capital issues in the first six months of this year, which shows, at least, that some people have a little money with which to play about. We who represent these poor areas have a right to point out that this Bill does not really help us very far. I do not know whether the Minister of Labour has worked out how much this Bill is going to cost, but in areas such as West Ham Union, which has spent over a million in unemployment in the last 12 months, this Bill is not going to run very far into five figures. It will probably mean something like £50,000 in the ease of relief in the next six months, which is an almost insignificant proportion of the total amount that has got to be spent on unemployment.

The question of the gap is not really the issue. The issue is really the whole question of affording relief to industrial areas where the rates are high, and they cannot afford to bear the burden of unemployment. It seems to me intolerable that, in an East-end area of London, where the rates are something like 27s. 6d. in the £, we should have to provide the dole for people whose work is in the City of London, where the rates are a third of those in the area in which the unemployed worker lives. The City of London, which is responsible for employing these people, is paying only 10s. or 12s. in the £ in rates, whereas these people who are unemployed, and their colleagues, have to find 27s., and, in some cases,:53s. 6d. in the £ in rates every year. Something ought to be done to equalise all the rates. This Bill really shows the failure of the Government to provide national remedies for unemployment. If the Government had adopted the suggestion which was put forward by some hon. Members when the Unemployment Act came before this House in the early part of this year, they would not be faced with the necessity of having to come forward with a stop-gap Measure of this sort now, and probably with another Bill on exactly similar lines in November next.

I now come to the point on which I want a particular assurance from the. Government. When the deputation went to the Prime Minister in June, the Prime Minister, in his concluding remarks, said: If anyone could supply him with the definition of necessitous areas which everyone would stand by, he would promise, at any rate, to consider that, hut he was sorry that he could not give any further promise to the deputation. It is on the question of what is a necessitous area that I want an assurance before the Bill is passed. Have we any likelihood of the Government agreeing to consider these difficulties, because this Bill does not go very far? Suggestions have been put forward as to the definition of necessitous areas. I have here a suggested definition, which I believe has been agreed to by a large number of Poor Law authorities. Probably the Minister of Labour has seen it: If in any Poor Law union expenditure on unemployment relief, exclusive of relief occasioned by strike, lock-out, or trade dispute shall exceed in any half-year the produce of a rate of one shilling in the pound, to be calculated in the manner prescribed by the Minister of Health, a grant equal to the prescribed proportion of the amount of such excess shall be paid to the guardians of the poor of any such union, subject to the approval of the Minister of Health. That definition has been worked out on a sliding scale according to rateable value, so as to bring the varying rateable values into account. The Minister of Labour says that he has saved a great deal of money over the sum allocated for unemployment this year. This scheme, which I understand the Poor Law authorities have put forward, is not calculated to cost more than £1,000,000. Cannot the right hon. Gentleman, therefore, see his way to grant this £1,000.000 to the Poor Law authorities which come under this definition, or can ho before we pass this Bill on its Second Reading give some assurance that this matter is being earnestly considered by the Cabinet, and that we shall get a decision in a very short time?


This Bill is the crumb of comfort which was brought away by the deputation which waited upon the Prime Minister. Those who were present at that 'deputation remember the very earnest confabulation that took place, and they will be grateful to the Minister of Labour for the part he must have played in getting us this concession. I do not propose to minimise it, but all that has been said as to the inadequacy of the Bill to deal with the matter remains, and if this were all that we had to look forward to we might be very disconsolate. Two days ago, however, I put a question to the Prime Minister, and he told us that a Cabinet Committee was sitting to consider the prospects of unemployment during the coming winter. I take it that that shows that the Cabinet recognise that this is a serious matter. The general opinion of everybody engaged in conducting great industrial concerns is that we are-in for a very hard winter. In his reply will the right hon. Gentleman give us any idea of the scope of the inquiry which the Cabinet Committee is making, whether they are getting any evidence on the question of necessitous areas, and whether they will be prepared to receive any evidence upon that question? The Minister of Labour must be very much impressed, not only with what has been said this afternoon on that question but also with the growing volume of opinion that the burden of unemployment is at present too heavy upon particular parts of the country. It would give a great deal of encouragement and hope to those persons who are having to face these very serious difficulties which arise at a time of unemployment if they could be told that the Cabinet Committee is really turning its eyes in that direction, and that we shall not be told when we learn the result of its efforts that this was an area of the field that they had not surveyed.


I welcome the introduction of this Bill, and also the information which the right hon. Gentleman gave that the number of people out of work to-day has decreased. If I followed him correctly, the number out of work to-day is 1,400,000. Are those all in receipt of unemploment benefit?


Not all.


There may be a large number of others in the country out of work, in addition to the 1,400,000.


I said there were 1,400,000 on the register. I am asked whether they arc all receiving unemployment benefit, and I reply, not all of them. Over and above these people there is no doubt a margin of other unemployed people, but how big that margin is I cannot say.


There are 1,400,000 on the register. Whether that takes into consideration those who are not entitled to draw unemployment benefit is a matter for consideration. When we consider to-day the situation in Europe, we ask the Government to consider the situation there, and to realise that until they can secure that the Continental nations are safe from bankruptcy the figures which the right hon. Gentleman mentioned may be much increased during the coming months. The figures which he quoted to-day are for the summer months, and it is correct to state that unemployment generally is heavier in the winter than in the summer months. Therefore, the finance of this Bill is based upon the hopeful sentiment and outlook of the Minister of Labour. I hope that those views may mature, but, whether that be so or not, the powers that are given to him under the Insurance Act will expire at an earlier date than he anticipates. I understand that in November unemployment will be paid for 12 continuous weeks. I cannot follow exactly what will happen to those who are unemployed at that time, and whether they will have to wait a further period after the 12 weeks have expired.

I support the appeal that we should reduce the waiting period. In conjunction with many hon. Members, I have been interviewed by parish councils and local authorities, and these authorities put the matter to me in this way. They say that men draw unemployment benefit from the Unemployment Exchange, and at the end of the period they come under the jurisdiction of the parish councils in Scotland. Inquiries have to be made by the officials of the parish council. Much expenditure is being incurred by every parish council in Scotland in investigating these cases, and they say to me with great force, "Why maintain these two services? Why not. abolish the waiting period?" If the Minister of Labour would keep an open mind on that subject during the progress of the Bill through Committee he may find its passage into law will be easier. In his opening statement the right hon. Gentleman referred to the credit schemes of the Government, and said that they had played a valuable part in coping with the problem of unemployment. I was hopeful that he would have given the House some figures to show that, because on the last occasion he gave the House certain figures which showed that only about 5 per cent. of the unemployed people in this country had found employment through these schemes. Whether that 5 per cent. is a valuable part of the scheme for coping with the problem of unemployment I leave it to the right hon. Gentleman to decide.


I cannot allow this Bill to have its Second Reading without saying a word in regard to it. Never in all my experience have I heard a Bill damned with so much faint praise as this Bill. We were told by the right hon. Member for Platting (Mr. Clynes) that this was the sixth or seventh Bill that has been introduced dealing with unemployment. It will not be long before there is a strong demand made for another Bill. We shall never arrive at any continuity in regard to our policy if we proceed in this way. I doubt if it is wise to relieve the boards of guardians of their responsibility at the present time. The boards of guardians are watchdogs, helping to tone up the Employment Exchanges by saying who are wasters, who are the men who do not want employment, and who are the men who deserve employment, and if we relieve the guardians of that responsibility, they will no longer act in that capacity, and there will be more claims than ever before the Unemployment Committee. Very large numbers of workmen in my constituency are utterly opposed to this unemployment benefit. They recognise that it leads large numbers of men to shirk work instead of looking for work. [HON. MEMBERS: "Where is the work?"]


The shirkers are at the other end of the lobby.


I can point out where there may be some work. I now make this statement, and let hon. Members opposite deny it if they can, that the rules of the trade union are very largely responsible—

Mr. DEPUTY-SPEAKER (Mr. James Hope)

The hon. Member is not in order. The question is whether the period should be five weeks or one week.


Hon. Members opposite have ranged over a rather wide field. Last week 60 men received £4 4s. 4d. each for 27 hours' work, 16 hours normal and seven hours' overtime.


These questions must be raised on the Vote for the Ministry of Labour.


I bow to your ruling, and I will reserve my remarks. I know that what I have to say will be unpalatable to hon. Members opposite. On some other occasion I shall be able to give the figures.


I have been asked questions with respect to what we propose doing for the winter. The Cabinet Committee is sitting on this subject, and I cannot say anything further at the present time. I am much obliged to the House for its desire to get this Bill on to the Statute Book as soon as possible.

Question, "That the Bill be now read a Second time," put, and agreed to.

Bill read a Second time, and committed to a Committee of the Whole House for To-morrow.—[Dr. Macnamara.]

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