HC Deb 05 March 1923 vol 161 cc77-193

Order for Second Reading read.

The MINISTER of LABOUR (Sir Montague Barlow)

At the close of my speech I shall beg to move, "That the Bill be now read a Second time."

I cannot make the Clauses of the Bill intelligible without some reference, which shall be as brief as possible, to previous Insurance Acts. We all know the story of the old lady who said she did not hold with all the history taught nowadays. She believed in letting by-gones be bygones. In the complex system of our Unemployment Insurance, I am afraid it is impossible to let bygones be bygones. [HON. MEMBERS: "Why?" It would be very unfortunate for the applicants, because the rights and privileges of the past extends into the future. The House will remember that the Government of the day in 1920 initiated, by the Unemployment Insurance Act of 1920, the policy of Unemployment Insurance on its present extended scale. That Act was the main foundation on which the subsequent superstructure has been raised. In the early summer of 1920 it was obvious to those who were experienced in the meteorology of trade and industrial cyclones that, after the period of expansion of 1919–20, a period of marked contraction was inevitable. The then Government therefore made provision early in 1920 by framing and passing into law the Act of 1920, which came into operation on 8th November of that year. This Act initiated a broad-based scheme of unemployment insurance for 12,000,000 of workers, approximately all the industrial workers in the country, with the exception of agricultural labourers and domestic servants.

The Act of 1920 was founded in its essentials on the experience which the trade unions had acquired in providing similar benefits for their own members, together with such modifications as experience in the working of the previous limited Act of 1911 had shown to be desirable. The edifice of the unemployment insurance system was raised on this Act of 1920, and it has two main pillars. To change the metaphor, the benefits under the Acts flow in two main and parallel streams of covenanted and un-covenanted benefits. These two streams of benefit flow side by side across the and wastes of unemployment, and also, like two great rivers which ultimately unite, these two streams of benefit, covenanted and un-covenanted, have shown in their later progress a tendency to mingle their flow. Let me take first the covenanted benefit, with which the Act commenced. Broadly speaking, the basis of covenanted benefit was that benefit was to be payable only in respect of contributions already made by the applicants for benefits. There were also formal conditions to be satisfied, such as application in prescribed form, etc. But the vital condition was that until the applicant had paid 12 contributions he would not be entitled to claim benefit. That condition was coupled with the further limitation known as the one-in-six rule, namely, that a man could only claim one-week's benefit in respect of every six weeks of contribution with a maximum limit of 15 weeks' benefit in any one year.

I want to trace the inevitable steps by which un-covenanted benefit, that is, benefit paid ahead of contributions, has had, owing to the dire necessities of the situation, to be developed. It was realised as early as the summer of 1920, that some people might require assistance at the commencement before sufficient contributions could have accumulated to their credit. Section 44 of the Act consequently allowed, as a temporary measure for 12 months, the payment of eight weeks' benefit in favour of any contributor, even though he had only paid four weeks' contributions. This was the thin end of the wedge, but, very shortly, the wedge entered deeper. This temporary provision proved insufficient. The cloud of unemployment settled rapidly over the whole country. By the end of November, 1920, no fewer than half a million people were unemployed, and by the end of December of that year the number had increased to 700,000. As the main Act had only just come into operation its provisions could be of but little assistance to this large number of unemployed, as they had practically no contributions to their credit. Consequently, in December, 1920, a short Bill was introduced, the effect of which was to allow the payment of eight weeks' benefit under Section 44 without requiring even the four weeks' contribution, provided that the applicant could show insurable employment varying from four to 10 weeks since December, 1919. By December, 1920, owing to the paralysis of unemployment which had suddenly overtaken us, the stream of un-covenanted benefit was started in strong flood, alongside and in addition to normal or covenanted benefit.

4.0 P.M.

In March, 1921, a third Act was passed. The contribution was raised, and by a subsequent Act in July, 1921, it was raised again, so that by the effect of those two Acts the rate of contribution, for men, for instance, from employers and employed, which, under the 1920 Act, had been 8d., was raised to 1s. 3d. At the same time un-covenanted benefit might be paid up to 16 weeks, and subsequently up to 22 weeks. This great extension of the un-covenanted benefit was, of course, strictly limited. First of all, the 16 weeks, and, ultimately, the 22 weeks, were to be payable over a definite period of Lime, and here we first come across the phrase "special period." In other words, this benefit of 16 plus 6, or 22 weeks, was to be available for the first special period from March, 1921, to November, 1921. There was a further or second special period running on from the first week in November, 1921. Then the conditions of the Act of 1920 were somewhat strengthened. For instance, the well-known condition that the applicant was to be "capable of and available for work" but "unable to obtain suitable employment" was supplemented by the additional requirement that he must be "normally in insurable employment, genuinely seeking whole-time employment, but unable to obtain it." Further, he had to show that he had been employed in insurable employment in at least 20 weeks since a given date. I think it was December, 1919.

This provision carried us over the winter of 1921, but it had become evident —the right hon. Gentleman the Member for North-West Camberwell (Dr. Macnamara) will bear it in mind—in the spring of 1922 that it would be necessary to make further provision in view of the continued contraction in trade and the still large number of unemployed. Accordingly, a further Act was passed in April, 1922, providing for two further special periods, the third and fourth. The third was to run from 6th April to 1st November last year and the fourth from 2nd November, 1922, to 1st July, 1923. I propose to say practically nothing about the third special period, because that ran out last year, but I must say a good deal about the fourth special period, because not only are its provisions in operation at the moment, but it is proposed under the Bill very substantially to extend them. In the fourth special period under the Act of 1922, extensions were granted both of covenanted and un-covenanted benefit. I will take the un-covenanted benefit first of all. During the fourth special period un-covenanted benefit might he drawn for maximum of 22 weeks. Twelve of these might be irrespective of whether contributions had been paid or not. That was under Section 4. Any further un-covenanted benefit beyond the 12 weeks which might be given in periods of five and five, or 10 altogether, was to depend upon whether contributions had been previously paid.

So far I have been endeavouring to state as shortly as I can the history of un-covenanted benefit, but from 1920, and throughout the whole period, the parallel stream of covenanted benefit has also been flowing. Indeed, not only have the rights of insured contributors to receive covenanted benefit been maintained, but they have been very considerably strengthened. By the first Act of 1921 it was provided that the maximum number of weeks' benefit payable in one year should be increased from 15, at which it then stood, to 26 weeks as from July, 1922. Further, and here I come to the point at which, as I mentioned, the two streams of benefit tended somewhat to mingle, two very considerable concessions were made to insured contributors in the first Act of 1922. During the fourth special period, in which we are now, it was provided that any balance of contributions under the old Acts and all contributions paid since that date should, first of all, be revived in an applicant's favour, notwithstanding that he had already drawn benefit against them, and, secondly, that they should be doubled in value for the purpose of what I have described as the one-in-six rule. Supposing a man had paid 24 contributions during 1921, he would be entitled under the normal one-in-six rule to four weeks' benefit.

Members may ask what was the object of this revival and doubling. I will tell them. The object, generally, of paying increased benefit, whether covenanted or un-covenanted, was to make provision, as far as possible, for those, and only for those, genuinely engaged in industry. It is quite clear that one of the best tests, and certainly one of the most available tests as far as the Employment Exchanges are concerned, whether a man has been genuinely engaged in industry is whether he has been paying contributions as a genuinely employed person. The Government decided to rely on this test of payment of contributions, and in the case of a contributor who had paid 24 contributions and had already received four weeks' benefit the Act of 1922 provided that he might, during the fourth special period, not only again receive benefit in respect of them, but that his contributions should be revived, not on the basis of one-in-six, but on the basis of one-in-three. Therefore, in the case I have taken of a man who had paid 24 weeks, and had already received four weeks' benefit, he would during the fourth special period be entitled to eight further weeks' covenanted benefit. That would be in addition to any benefit up to 12 weeks that he could receive on the un-covenanted side. I must apologise if I have been forced to make a somewhat lengthy historical introduction, but I am afraid that without it it would be impossible to understand the provisions of the Bill.

The Bill itself falls into four or five main divisions. Clauses 1, 2 and 3 make financial provision, first of all, for the period from 19th April to 17th October— that is Clause 1—and secondly, for the following 12 months from October, 1923, to October, 1924. That is Clauses 2 and 3. As many hon. Members are aware, we have in the past been somewhat disposed not to look sufficiently ahead. I have therefore attempted in making provision, firstly, from now to October, and, secondly, from October next till October, 1924, to secure reasonable provision at any rate for the next 18 months and also, possibly, for the benefit years beyond that. We propose in Clause 4 that dependants' benefit, which otherwise would abruptly come to an end if by any possibility the loan were paid off and the deficiency period terminated during the next 18 months, shall not run any risk of being so summarily terminated. Many Members will be aware that there has been much discussion over what is known as the continuity rule. I propose to modify this so as to secure a greater degree of elasticity. I think this will be of real benefit to applicants. Fourthly, there has been for some time difficulty in the country as to the authorities responsible for finding employment for children between 14 and 18. An inquiry was held recently by Lord Chelmsford on behalf of the Government, and Clause 6 embodies or purports to embody the conclusions at which Lord Chelmsford arrived in his Report. Lastly, there are certain administrative provisions with which I do not think I need detain the House at this stage.

Taking the Clauses a little more at length, Clause 1 makes provision up to 17th October next and extends the fourth special period. That was why I had to describe that period at some little length. Many hon. Members are aware that a certain number of beneficiaries commenced to drop out of benefit on 24th January last. An additional number, not, I think, a large number compared with the whole, have been exhausting benefit each week since. I have had numerous questions addressed to me in the House on the subject. The reason for this exhaustion is that under Section 4 of the Act of 1922, as I have already indicated, 12 weeks' free or un-covenanted benefit were available, commencing from 2nd November, 1922, and those who had no other ground for claiming benefit would drop out at the end of 12 weeks, which first elapsed on 24th January last. This number who had received their maximum benefit of 12 weeks and had no further ground of claim has proved to be small. So far as we can ascertain, it was only slightly over 11,000.




On 24th January. It was only the very limited class of those who failed to show that they had done a week's work, and paid a week's contribution since they came into insurance, who would be so restricted. There are, I know, cases of works which have been closed for two years, and even longer. But I venture to suggest that it is not unsatisfactory that of the enormous number of insured persons now unemployed, roughly 1,340,000, only a little over 11,000 had exhausted benefit on 24th January, on this ground, namely, that since they came on the Fund they had done no work and had paid no contributions. This percentage, as the House will realise, is an exceedingly small one, under 1 per cent. of the whole. In other words, apart from 11,000 odd persons those who commenced to draw benefit on 2nd November and are now falling out of benefit each week have been able under the Acts to claim something more than the 12 weeks' minimum, because they have done some work and have paid some contribution. Taking the periods subsequent to 24th January, it is difficult to estimate the number of exhaustions each week. Down to the middle of February the number was just over 34,000. In any case, there is a limit of 22 weeks' maximum—that is under Section 4 of the Act of 1922—for the fourth special period in respect of both benefits, covenanted and un-covenanted, and the earliest date at which the 22 weeks' maximum can operate is the 4th April. By that time, so far as we can estimate—and we can only estimate— the maximum number of persons who will have gone off benefit will be at the outside 150,000. In my view the number will probably be appreciably less. I believe that I am correct in saying that on previous occasions much larger numbers than this have gone off benefit before any further extension was made. The proposals of Clause 1 of the Bill may be summarised as follows. First, the fourth special period is extended from the 1st July, the date at which it now terminates, until the 17th October next. That is in all— and I would draw attention to this— 50 weeks and not 52 weeks. Second, there is to be a maximum of 44 weeks' benefit available over the whole period.


What is the 50 weeks?


From the 2nd November last year until the 17th October this year. We propose a benefit year from mid-October to mid-October, but the special period last year began in November, and the result is that there is a shortage of two weeks on the full year. I draw attention to that, because 44 weeks' maximum would be available during the whole period and it is not 44 out of 52 weeks, but out of 50 weeks. Here again the 44 weeks may be made up in various proportions of covenanted and un-covenanted benefit or it may be even wholly un-covenanted.

Third, if and when an applicant has received 22 weeks' benefit in the fourth period from the 2nd November last there is to be a further grant of 22 weeks' additional un-covenanted benefit, but the additional 22 weeks will not commence until there has been an interposition of two weeks. [HON. MEMBERS: "Why?"] I am explaining the provisions now and, if hon. Members wish to criticise, either I or the Parliamentary Secretary will be happy, at the end of the discussion, to deal with any points that have been 'raised. In the case of purely covenanted benefit the limit is now to be extended from 18 weeks, in the case under Section 4 (5) of the Act of 1922 to 26 weeks during the extended fourth special period. It should also be noticed that the revival and doubling of contributions will continue during the special period down to 17th October next.

So much for the provisions until 17th October. Now for the subsequent period. Clauses 2 and 3 embody provision for the period from October, 1923, to 15th October, 1924, which is known as the first benefit year, and also for subsequent benefit years similarly constituted. I will explain why the period from October to October has been chosen. Up to the present our insurance year, that is, the year during which the cards run, has been from July to July, but experience has shown that it is convenient to have the 12 months during which benefit is payable computed separately from the 12 months during which contributions are received. Further, that the benefit 12 months should start two or three months later than the conclusion of the previous insurance year. There is the further point that admittedly the main burden of unemployment commences with the beginning of each winter. Therefore it is administratively desirable to make benefit begin approximately with the commencement of the winter season. As to the point which I have indicated now, that in any case it is desirable that the insurance year should terminate two or three months before the benefit year begins, the explanation is that, in case there are any outstanding difficulties or claims which require adjustment, the intervening period of two or three months enables that to be done without any disturbance of the currency of benefit.

The Bill provides that in the first benefit year there is to be a limit in the case of covenanted benefit of 26 weeks. Second, the Minister can allow at his discretion, and subject to the provisions of the earlier Acts, alongside but not in addition to the covenanted benefit, 26 weeks of un-covenanted benefit. This should be enough to carry us well over the winter of 1923–4. The House should notice that the provision of these 26 weeks of un-covenanted benefit is available in the following way; first 12 weeks, then 3 weeks off, and then the remaining 14. Now as to dependants, who are dealt with in Clause 4. The House will remember the provision for dependants' allowance, in respect of wife and children, was instituted first by the Unemployed Workers' Dependants (Temporary Provision) Act of 1921, which allowed 5s. in respect of a wife or invalid husband and 1s. in respect of each child, and special additional rates of contributions Were levied in order to permit of this very useful additional benefit. The provisions of the original Act were only for a period of six months, but it was further continued by the main Act of 1922 until the termination of the deficiency period, that is until the Treasury certifies that the loan has been paid off, and the Fund is solvent.

The consideration and determination of the general question of unemployment insurance may very likely necessitate further legislation later on when times become more normal, when special calculations as to insurance by industries are more ripe for consideration and solution. In the interval the existing Acts leave dependants' grants in an unsatisfactory and indefinite position, as they link them up with the deficiency period. Accordingly, we propose to continue the dependants' grants for the present, pending an ultimate reconsideration of the whole unemployment insurance programme. Now as to the continuity rule—


Is the right hon. Gentleman giving any explanation of Subsection (2) of Clause 4?


I do not propose to go into the financial proposal at the moment, unless the House specially desire it. The object of the Section is to make arrangements, so that if and when times become normal again, the contributions may be put on a reasonable basis. Scales are suggested in the Schedule as a maxima only. The Minister may fix rates of contribution on a lower scale.


Involving a variation?


The same principle as in the Act of 1920. That is rather less than the State contribution at the moment. I do not go into it now, because it deflects my general argument. What we are contemplating in Clause 4 is what may happen when times become more normal, or so normal that the dependants' period comes to an end. Necessarily, we want to contemplate what a reasonable scale of contributions would be, somewhat on the basis of the Act of 1920, and what a reasonable addition in respect of dependants' allowances would be. The scales are set out in the Schedule, and will be discussed in another place. There are two matters which demand some consideration as to the waiting period and the continuity rule. As to the waiting period, I believe that most systems of unemployment insurance accept the principle of a waiting period. That is to say, before an applicant can receive benefit, he must have a certain number of days' unemployment. The principle is sound and in accord with trade union practices. The period was fixed at six days. No applicant can receive benefit unless and until he has been unemployed for that period.

Here we come to the second matter which I mentioned just now, the continuity rule. For the purpose of defining the six days of waiting period it is not necessary that the six days should be absolutely consecutive. Under Section 7 of the Act of 1920 the six days' waiting period may be computed as follows: two days on and two days off, and two days on and two days off, and so on for a period of 12 working days. Then at the end of the 12 days the six days' waiting period would be completed. But the continuity rule goes a great deal further than being a mere means of adjusting the waiting period. In the original Insurance Acts of 1911 and 1920 this question came before the House. Representations were made in the case of industries where part or broken time was habitually worked, particularly I believe in the case of the cotton industry. Since the storm of unemployment has burst upon us during the last 2½ years we have become more familiar with the principle of part or broken time as a means of spreading employment. But this was only developing a practice which has been relied on in some of the highly organised industries for a great many years.

In view of this practice some provision had to be made in connection with the payment of benefit to meet the difficulty as to broken time. Prima facie benefit is only payable in respect of continuous unemployment. Clearly it is impossible to pay benefit for odd hours or every odd day of unemployment, but in order to meet this difficulty of broken time the continuity rule provides under Section 7 of the Act of 1920 that, in the cases there indicated, even though the time of employment is broken, such broken time may be treated as continuous employment. That is to say, two days on and two days off, and two days on and two days off would indicate four days of unemployment (assuming that the waiting period has been completed) for the purpose of benefit, there is further provision in favour of the applicant under this rule. This is what is technically known as the bridge, that is to say, a week of unemployment can, for the purposes of benefit, be linked up with a subsequent week of unemployment, though separated by two or three weeks of employment. Hon. Members may say, "But each week stands by itself." Of course, that is true. But the great advantage of the bridge is that the applicant has not to serve a second waiting period; the two weeks or periods of unemployment, when connected by the bridge, are treated as continuous without the break of a further waiting period.

Frequent representations have been made, both to the right hon. Member for Camberwell (Dr. Macnamara) when he was Minister of Labour, and to myself, that the continuity rule, as I have outlined it, pressed hardly on certain industries, both so far as the definition of the waiting period was concerned and also in respect of the payment of benefit. The case for the dockers in this regard has been put with special eloquence and persistence by the hon. Member for St. Helens (Mr. Sexton). I have had a Committee sitting for some time endeavouring to see whether we can modify still further the rule so as to meet this difficulty of broken time, especially in cases like that of the dockers, where broken time is probably inevitable. I am glad, therefore, to be able to announce that I propose, as indicated in Clause 5, to make a further modification which I believe will be of real assistance in the matter. I am rash enough even to hope that the hon. Member for St. Helens may not be entirely displeased with my new proposal. What that proposal amounts to is this: Any three days of unemployment within any period of six consecutive days, whether a calendar week or not, are to be treated as continuous unemployment far all the purposes of the continuity rule.


What will that cost?


I have not the Estimates with me. The cost will not be very considerable, I hope. Both for ascertainment of the waiting period and for the purpose of payment of benefit, that will be a modification of the continuity rule. Further, the principle of the bridge will be retained, extending over a period of three weeks, not of six.

I now come to Clause 6. As I mentioned just now, until recently there were considerable difficulties throughout the country with regard to the arrangements for the employment of young persons of from 14 to 18 years. There were two parallel systems working under two different Acts of Parliament, and, as was inevitable, there was a certain amount of friction. Provision might be made in a given locality, either under the Labour Exchanges Act of 1909 and through the local Employment Exchange employment committee, or by the education authority under the Choice of Employment Act, now embodied in the Education Act, 1921, Section 107. In the former case the Department responsible was the Ministry of Labour, and in the latter case the Board of Education. The difficulty did not exist in Whitehall; in fact an agreement had been come to between the two Departments as long ago as 1911. But in the provinces there was considerable friction, and, indeed, in one or two cases there were actually the two systems for dealing with the employment of young persons both in operation in the same area. This was clearly not a satisfactory state of affairs.

The two systems operating roughly were as follows: The provision for the employment of these young persons through the Employment Exchanges was in force in 167 areas, and in 139 areas the arrangements were made by the local education authority. Then the matter was further complicated by the passage of the Unemployment Insurance Act of 1920, which made the Ministry of Labour responsible in respect of the insurance of all young persons from 16 to 18 years of age. The late Cabinet appointed Lord Chelmsford to hold an inquiry into the subject. Shortly, his report indicated that it was desirable that the overlapping should terminate, and that local authorities should make a choice, which should bind them for a period of years, which of the two parallel systems they desired in their area. This arrangement carried with it a necessary corollary, which Lord Chelmsford accepted, namely, that in the area where the local education authority undertakes to be responsible for the employment work, it shall also be responsible for the insurance administration in respect of the young persons between the ages of 16 and 18. Clause 6 of the Bill makes provision accordingly, and may add that the Clause has been agreed by the two Departments concerned.

That concludes all the main clauses of the Bill. Clauses 7 to 10 contain two or three administrative Amendments which are of importance, but I think that at this stage I need not detain the House with them.

I have dealt with the principal clauses of the Bill, but I am sure the House will be interested to know what is the financial effect of the provisions which. I have outlined. As the Bill must pass before Easter, and as Parliamentary time is limited, I hope that we shall be able to carry the Financial Resolution this evening, otherwise the Committee Stage will be delayed and, within the limits of time available, that will be somewhat dangerous. The Financial Resolution was printed on the Order Paper two days ago, and there was circulated at the same time a Memorandum which I hope will make the matter clear. I will point out at once—I have been asked the question specifically outside the Chamber—that the Financial Resolution does not relate to the financial proposals in Clauses 1 and 2, but covers only the two points of dependants' benefit and what I might call, for short, the Chelmsford Report.

It is not necessary for me to repeat at length the figures which I have outlined in the Memorandum. It must be borne in mind that under the Act of 1922 borrowing powers have been authorised by this House up to £30,000,000. At the moment the loan has reached about £17,000,000. The figure of unemployment stands as 1,340,000 or thereabouts. The drop in the figure of unemployment, to which I referred in my speech of a fortnight ago as having been fairly continuous since 1st January of this year, has been maintained. The figure on 1st January was 1,485,000; it now stands at 1,340,000, representing a fall of 145,000 in seven weeks. The decline has been distributed fairly evenly over the whole period and averages over 20,000 a week, and I have reason to expect a further substantial drop this week. I may be told that since 24th January a large number of those who have gone off the register are to be accounted for by the fact that considerable numbers have fallen out of benefit. I have had careful inquiry made as to this, and I am satisfied that, while it may be true that a certain number who have gone off benefit have ceased to register, it is by no means universally the ease. I think we may take it that the total figure of the drop in unemployment since 1st January, namely, 145,000, is very nearly an accurate figure (within 10,000 or so) for the purpose of representing the steady growth of employment in the country. I hope the House will agree that that is not an unsatisfactory figure.


Can the right hon. Gentleman say whether his inquiry included any large town or city for the purposes of making his analysis?


The figures given are taken from all over the country. I can give the figures for which the hon. Member asks, if he should desire them. As to the future, it is not easy to estimate what the cost is to be, but in any case the House will remember that no money will be voted directly from the Exchequer for the purpose; it will be borrowed under the loan powers which I at present possess.


Do we not pay for that?


I am sorry that that suggestion has been made. I think that those who make such a suggestion are going the most direct way to secure the result which they profess not to want. I have assumed, for the purposes of calculation, an average figure of unemployment for the next 18 months of 1,250,000 I hope the House will agree that, if trade revival shows any prospect of liveliness at all, that estimate is on a conservative basis. I hope that the drop will be considerably more than that. But, assuming that that is the average, then the burden on the fund should rise to £22,500,000 it April, 1924, but should fall again to £20,700,000 in October of the same year. I have seen some criticism urged on the ground that the present Bill makes no effort to embody the provisions relating to two things—first of all, insurance by industries, and, secondly, the Report of Sir Alfred Watson's Departmental Committee, which has been sitting recently to consider the whole of the unemployment insurance scheme. I can deal with this criticism in a sentence. Both the policy of insurance by industry and the Watson Report clearly require further consideration. The latter has appeared only in the last three or four days, and with regard to the former, I have not yet received considered answers to my Memorandum issued in December last from such leading and important associations as the Employers' Confederation and the Trades Union Congress General Council. I shall press on with the consideration of further action with respect to both the above topics with all possible expedition.

Let me deal with possible criticisms of these proposals. I suppose that I shall be faced again with two types of critics. I suppose there will be two lions in my path, each of which, if he could only give full rein to his natural instinct, would devour the other. The one type of critic says that I am doing too much, and the other says that I am not doing enough, or, to repeat the metaphor, one lion roars at the increase of the loan charge, and the other lashes his tail at the mention of the word "gap." Critics of this character are probably to be found not only on the Labour Benches but in many parts of the country. Recently I had the pleasure of making a tour of some of the industrial centres of this country, including Birmingham, Sheffield, and Glasgow, and I must honestly say I was impressed by the strength of the plea put forward not only by guardians and representatives of workers' associations, but also by leading employers and those responsible for local government. The plea was to the effect that every effort should be made to extend the provisions of the unemployment insurance scheme, particularly on the uncovenanted side, as generously as circumstances would permit. I will only mention, in this regard, two facts. First, the amount expended under the Unemployment Insurance Acts during the last 2½ years since the storm period commenced in November, 1920, has reached the colossal figure of £125,000,000. This vast expenditure has only been made possible on the one hand by the balance of £22,000,000 which was in the old fund, and, secondly, by borrowing up to £17,000,000. Bearing in mind the fact that the loan will be repaid when times become normal on a contributory basis and that the balance of £22,000,000 was also amassed by contribution, I think all three partners to this scheme may be proud of their respective shares of subscription, namely, the State, £33,000,000; the employers, 48,000,000; and the workers, £44,000,000.

As indicated in the White Paper, we shall be extending the liability for borrowing up to £22,000,000, or less if the figures drop, as I hope they will. That alone is no mean provision, and when that is coupled with the fact that out of a maximum of 50 weeks from 2nd November last to 17th October next, I have provided under this Bill a possible 44 weeks' benefit, I do not think anyone in his senses can suggest that the provision now being' made by the Insurance Fund to meet our grave industrial necessities is anything but a generous one. It is often urged upon me, especially by boards of guardians in England and by parish council's in Scotland, that the burden to be borne in this time of great industrial difficulty is largely, if not mainly, a natonal one. I submit that the generous provisions of this Bill give very material further assistance towards dealing with the terrible problem of unemployment on broad national lines, and to that extent will ease the heavy burden which is being carried by the localities. I hope the local authorities, such as guardians and others, will not take it amiss if I make an appeal to them in return. In many areas the supplementary scales of relief given by guardians, in addition to unemployment benefit, reach a figure which is equivalent to, or not much less than, the standard rate of wage of unskilled labour in the district. In my view, it is clearly unsatisfactory that the payment of public money by way of relief should be on too high a scale, and I appeal to the guardians for their co-operation in this respect.

Lastly, a few words to the critics who say I am doing too much. I would first point to the provisions of the Bill itself. While there is a generous grant of uncovenanted benefit in the Bill, of 22 additional weeks until mid-October next, and 26 weeks for the first benefit year from mid-October next to October of the following year; yet a definite effort is made in the Bill to limit the grant of uncovenanted benefit so far as it seems prudent to do so, with a view to restoring the fund to its original position of a genuine insurance fund on the basis of covenanted benefit as soon as that can properly be attempted. For instance, to mention only one or two small points, during the first benefit year, as I have already indicated, uncovenanted benefit will not be continuous. Furthermore, though past contribution is still to be used as a test of genuine industrialism, it is to be on the basis of one contribution in six and not, as at present, one in three: or putting it technically, there will be, after mid-October next, a revival of contribution but without doubling. It will not be one in three as at present but one in six—the old original rule. Furthermore, in subsequent benefit years we hope it will be possible to get on without the provision of uncovenanted benefit.

I do not wish to repeat the very remarkable evidence which I outlined to the House only a fortnight ago, based on the experience of social workers all over the country, showing that the payment of benefits under the Insurance Act has proved a great boon and that it is the effective bridge which is carrying us over our present distress. In this connection I quoted the report of Toynbee Hall; the last edition of the book on "Poverty," by Mr. Seebohm Rowntree, of York, and the address of Mr. Justice Greer, charging the grand jury at Liverpool, all substantially to the same effect. There is a recent and interesting volume called, "The Third Winter of Unemployment," with which the name of the hon. and gallant Member for Dover (Major Astor) is honourably connected and the evidence in which points generally in the same direction. In that volume reports from social workers and trained inquirers in nine industrial districts, such as Cardiff, Glasgow, Manchester, Woolwich, and so on, are summarised and analysed, and the reports, particularly that from Glasgow, frankly surprise me. I cannot go into details with regard to them here, but let me conclude with one sentence, and one sentence only, from that very interesting volume. These are words relating to the Insurance Act, and they are words which I heartily endorse and which I believe the country will heartily endorse: The effects of the Unemployment insurance scheme have been almost wholly good. With these words I conclude what I have to say in putting this Bill before the House, and I now beg to move that it be given a Second Reading.


The right hon. Gentleman has laboured, not without much success, to make plain to the House many matters which are very complicated and very obscure, because of the multiplicity of Acts and Amendments and Regulations relating to the general law of unemployment insurance. The right hon. Gentleman will not mistake me when I say that there are still some matters which are not as clear to us on this side of the House' as I hope they will be made hereafter. It may be that only during the Committee stage can we deal effectively with the many details of the Clauses of this belated Measure. I am not going into the historical review to which the right hon. Gentleman treated the House in the opening part of his speech. I suggest to him, however, that the edifice erected in 1920, to which he referred, was not intended as, and certainly has not turned out to be, anything like a means of affording a remedy for existing conditions of unemployment. At best it has been no more than a provision of passing relief for the continuous state of idleness from which large numbers of workers are suffering. By pressure of circumstances, by outside clamour, by deepening conditions of impoverishment and by appeals in this House, Governments have step by step been compelled to effect Amendments. Many of these have been belated concessions, and much human suffering would have been prevented if appeals made two or three years ago from this side of the House had been listened to favourably. Despite my right hon. Friend's usual optimism, I do not think he can find much consolation in the figures which he gave us as to there being, over a long period, only some 11,000 workers in continuous unemployment and suffering uninterrupted conditions of idleness. What we ought to take into account in relation to our experience of the past two years is the average duration of unemployment suffered by those who have been on the fund, not continuously, but nearly so. For certain it is that a very large proportion of the 1,300,000 still reported as being the total number unemployed must have been out of work for very long periods indeed.

5.0 P.M.

The right hon. Gentleman classified his critics in two groups—those who complained he was doing too much and those who censured him for doing too little. May I make our position plain on this side of the House? We say that the Government, including the Minister of Labour, are not doing enough in respect of finding work, which could be found with great advantage to the workers themselves and with equal advantage to the State, and that enough is not being done to give adequate relief to those who are compelled to be idle, largely because the Government has not organised work as it. should have done. We therefore regard this latest Bill as a mere melancholy and disappointing approach to a problem which, as yet, the Government is not touching. If we are asked if we are disposed to reject this Bill, the answer is, that we are not. A vote for this Bill may well be given, because the law is now so bad that if the Bill were not passed, the position of the unemployed would soon be even worse than it is. But the Bill is not a reform. It is not in any real, effective degree, an improvement of the law of insurance. It is at most, and at best, a continuing Bill, and just, by the way it effects a few slight modifications or instances of betterment in the case of individuals or of one or two groups of those who are now suffering. I am entitled, therefore, to contrast this Bill with the hopes constantly raised and the public professions used in the country by the representatives of the Government in relation to unemployment. Each one of these evasive proposals is certain to evoke the condemnation of those who were misled by the promises which spokesmen of the Government repeatedly made as to dealing with the problem of unemployment. One need go no further back than to the general terms of the Speech from the Throne with which our business in this Session was opened. In that Speech His Majesty is made to say: The serious state of unemployment among My people causes Me the deepest concern, and must continuously engage the attention of My Ministers… effect will be given to the special measures which have been initiated to afford relief to the situation." What special measures? In what way is full effect being given to any steps yet taken by the Government or contemplated by Ministers who are continuously engaged in giving their attention to this problem? Can my right hon. Friend hold out any prospect whatever of any legislation or any further administrative Ant which we may expect this year, during this Session of Parliament, which in the slightest degree will keep faith with the terms of the Speech from the Throne. I think I am entitled to ask what are the intentions behind all these vague sand general promises which raise the hopes of men and again break faith with them, as we have seen in the case of our experience of previous Sessions. Take, again, the case of the statement of the Prime Minister on the eve of the Election. These are the words of the present Prime Minister, spoken in Glasgow on 13th November last year: If this Government lasted its ordinary term, whether he was at the head of it or not, he sincerely hoped that it would he possible to make further progress in the direction of making unemployment insurance a part of the trade burden of industry. Did that speech merely mean that all that we were to get, at any rate this year, was such a, slender amendment of the Insurance Acts as this Bill now affords? I allege then that the Prime Minister raised these hopes before the Election, that in the Speech from the Throne those hopes were sustained, that we were told Ministers were continuously engaged upon this problem, and that effective measures would be taken, and I ask: Is any step to be taken during this year which will keep faith with these official and solemn assurances which have been so often repeated? And what, by the way, has happened to the work of the numerous Cabinet Committees which have been labouring upon this question? I asked that question at the beginning of the Session. I got no answer, and I repeat: What product, if any, has yet come from the work of the Cabinet Committees dealing with this problem of unemployment, and when are we to get reports, and in what form, of anything which these Cabinet Committees have yet done?

I need say very little indeed on this Bill itself. As I have already indicated, it is a Bill which must receive the closest consideration in detail when it reaches its Committee stage, but I think it is time we had some complete and consistent piece of understandable legislation on this problem of unemployment insurance, and that, if we could not travel into the wider area of any effort to solve the problem itself by finding work, we might well have given the larger part of the time of this Session to dealing more amply with the problem than the present Bill proposes. We have in this Bill references which will be more or less—perhaps rather less than more—understood as to special periods, gaps, deficiency periods, covenanted and uncovenanted and other forms of benefit, and in the numerous figures of speech in the remarks of my right hon. Friend we had references to bridges and to many other devices, all meant to piece together this patchwork of legislation so far provided as a solution of the unemployment problem. I turn now to one or two Clauses of the Bill for the purpose of asking a definite question or two. I do not think my right hon. Friend is a man likely to abuse power, even though a large measure of it may be placed at his disposal, but no Minister in these days is certain of being in office for long, and therefore I cannot trust to the vagueness of the future, not knowing who might succeed my right hon. Friend in the condition of removals, I suppose, which in due course, perhaps even before long, may have to take place within the Ministry.

I find, turning to Clause 3, that in the second part of Sub-section (2) of that Clause we have this statement: The Minister may from time to time, if he thinks fit, by Regulation direct that the benefit year shall begin or end on some date other than the date for which provision is made by this Sub-section, and so that any benefit year may be a greater or less period than twelve months, and for the purpose of meeting any change thereby effected in the benefit year, the Minister may with the consent of the Treasury make such corresponding variation as regards the number of weeks of benefit which may be received within any benefit year as appears to him to be proper. Certainly, reading the words and endeavouring to understand the language for what it is, it does appear to me to place enormous powers, not merely for varying, but for terminating the rights of individual workmen under whatever other provision of this Bill there may be. Is there then anything which the right hon. Gentleman cannot do, if the terms of that Clause are passed in their present form? The gap, as we know it, has to all of us been a cause of intense soreness and, I think, justifiable complaint. The Bill does not wholly remove the gap. It may narrow it, but it still leaves a necessitous workman, who may have been living, existing, upon the slender resources of his unemployment pay, faced with a period when he may get nothing at all, when, indeed, he cannot get anything at all. I do not know what quite is the motive of the gaps, and previously I have asked the question: Are these gaps meant as a sort of corrective, or as an instrument of pressure to be exerted upon those who are suspected of not doing their best to secure work? If so, I think that is a refinement of cruelty to which this House ought not any longer to listen, for we have been assured by Ministers of Labour that within their knowledge, in the main, the vast majority of the men affected by this problem of unemployment are men willing to work, seeking it eagerly, and trying to find it, day by day and hour by hour.


Hear, hear!


Hear, hear!


And I want to put it to my right hon. Friend that they ought not to be penalised, in any way driven into a corner with complete starvation, as must be the case if these gaps are to be maintained. My right hon. Friend has done something to make a little more clear to the public than previously has been the case the degree of State obligation in respect to this particular law, and perhaps my right hon. Friend the. Member for the City of London (Sir F. Banbury) will, after a short time, see how little indeed the State has expended in connection with this great burden. I observed his alertness when he feared for a moment that some part of this Bill might get through which actually would be a cost to the State. I shall, therefore, try to give him some little consolation.


My point was that the money which has been borrowed by the Fund has been borrowed from the State. My belief is—and I told the right hon. Gentleman the Minister of Labour so two years ago—that he will never get the money back, that the Fund will always be insolvent, and so far I have been right and the right hon. Gentleman has been wrong. My point is that it comes from the State, because the State has advanced it, and will never get it back.


I do not know what might be the view of my right hon. Friend as to the State's power or duty and capacity for exacting its rights from its citizens, but I think in this matter the State might be trusted to see that the terms of this Bill and of previous Acts are fully complied with whenever a period of trade prosperity returns, and if a Government requires any sort of incentive, any kind of pressure, to that end, I am certain that the right hon. Baronet, if he is in the House in those years, will see that that is provided. But what has to be clearly understood is that this money of which we are now speaking as State money, is really not a gift from the State at all, but is a transference of money from the State to the Unemployment Fund. I think the figure given by my right hon. Friend the Minister of Labour as to the total amount paid during all this long period of very serious trade depression really from the State purse was some £33,000,000. Is my right hon. Friend aware that the whole of that sum is only about one-fourth of the amount which every year the Government raises by the Beer Tax alone, and that that tax is paid in the main out of the pockets of the working classes? I am putting it to the House that by the Beer Tax alone four times as much is raised annually as the State has paid to the whole of the unemployed during this long period of sustained depression over a period of two years, and I think that that clearly shows that the State has fallen very short indeed of doing its duty in respect to any serious financial obligation.

I have seen, in a Memorandum issued by the Ministry of Labour, that eventually there is to be an enormous saving to the State, and, not merely for the benefit of those of us who are here, but for general enlightenment, I will ask the Minister for some more information on that point. I observe by the Press that some very misleading and evidently uninformed conclusions have been reached as to the meaning of this paragraph on page three of the Memorandum: If the reduced rates of contribution are at the maximum rates permitted in the First Schedule to the Bill, the State contribution will be about £6,000,000 annually as compared with the present amount of about £12,500,000 annually; while the combined contributions from employers and employed will be annually £24,000,000 instead of the present figure of about £35,000,000. What I am asking is, About when are the public to understand that they may expect that saving in the contribution 'of the State in relation to this law My right hon. Friend referred, towards the close of his speech, to the position of the education authorities in respect of a new phase of administration under the law of unemployment insurance. Such education authorities will have to assume duties in connection with the administration of the benefit claimed by any person under the age of 18, and, in the later part of the Clauses, there are provisions for returning to the education authorities certain moneys by way of covering the expenses which they will have to meet. What I want to ask is, whether we can be sure that a fair rate will be fixed, if authority is to be vested in the hands of the Minister of Labour, in consultation, of course, with the Treasury; and, secondly, that no rate will be fixed until the representatives of the education authorities have been consulted, and matters have been fully discussed between them. I put this question, because education authorities, I know, finding that their duties are to be increased, are naturally anxious to he fairly dealt with on the financial side of the new duties which they have to undertake.


I would like to say at once that the local education authorities will be consulted.


I take it, then, that the education authorities will have to bend to any decision of the Government, if actually the Bill becomes law in its present terms before the consultation takes place. There is one part of this Bill which does not attempt to treat fairly, and to duty to, the part-time workers. The special instance of the docker has, I know, been covered. The fact of the matter is that, under our present law, a worker on short-time can receive less wages by his service in short periods of work than can a man, who is wholly unemployed for a week or a fortnight, receive in the form of benefit. Clearly that is not right, and it would seem to encourage idleness, and to incline men to call themselves out of work altogether. I think in Committee that is a feature of the Bill into which my right hon. Friend should thoroughly go, so as to remove this condition of inequality as to the part-time worker and the man wholly unemployed.

Finally, may I say a closing word on this subject of the Money Resolution, for I gathered, from the statement of the Labour Minister, that it was hoped to take the Money Resolution to-night. Of course, this is not a subject on which we want to offer anything in the nature of obstruction. We do not want to delay the Measure at any stage, but we are very much concerned as to the freedom of Members when they reach the Committee stage. It is probable that this Bill will have to be dealt with for very many days in Committee. I recall a previous experience with a similar Bill when the position of the Minister was that his hands were so tied by decisions of the House that he could not make Amendments, he could not accept Amendments, and he could not concede points, which, evidently, he was disposed favourably to consider in the light of the discussions that were then taking place. I ask for some assurance that if this Money Resolution be passed, we shall not be told in the Committee stage that an Amendment of certain financial aspects of this Bill—for instance, the amount or the proportion of the State payment—cannot be varied, because a Money Resolution has been passed by the House of Commons binding the hands of the Committee not to make any alteration. This question of the Money Resolution is so important, raising, as I say, points, not only of our freedom, but of the freedom of the Minister when the Committee stage is reached, that on that subject I trust we shall have some assurance. I, therefore, leave the Bill by saying it is no remedy, but that, such as it is, we shall try to make it better, and in that, I trust, have the co-operation and support of Members on all sides of the House, who, like ourselves, made certain promises to the unemployed, who, at least, expressed whole-hearted sympathy with their miserable condition, and now is their opportunity for making good some of their statements at the General Election.


We are still struggling through the gloom of trade depression and unemployment, but the worst is behind us, and, undoubtedly, recovery will be painfully slow. Europe could not devote its man-power for four years and three months, and spend £50,000,000,000, upon the work of destruction without feeling the effects for a long time, and recovery is retarded by the fact that, even now, after this lapse of time, there are many, many millions of people not back again to normal output, and, therefore, not in the market with their demands, which our workpeople, to a large extent, met in the past.. Confronted with this situation, my right hon. Friend the Minister of Labour comes forward with a proposal for further extension of benefit under the Unemployment Insurance Act. He has no other alternative, that is quite clear, and, in the main, the proposal he makes, if I may say so with respect, is one which I should have been compelled to make if I still held my commission. The last provision we made enacted that from the 2nd November last, there should be 22 weeks' benefit, carrying us over to the end of June next. For those who have been compelled, and are now compelled, to draw that benefit without intermission, the 22 weeks will expire on the 4th April, and I always contemplated that, unless things recovered very much more rapidly than there appeared any likelihood of their doing, we should have had to come here, if we had been the Government, and ask for the sort of extension which my right hon. Friend is proposing now. He proposes to com mence a new period of benefit on the 19th April—[An HON. MEMBER: "To extend the old one!"]—or extend the old one. I am the last man to object to the use of that phrase. He proposes to extend the old benefit from the 19th April onwards, providing 22 weeks' uncovenanted benefit, that is to say, benefit paid in advance of contributions, and not after contributions, the emergency scheme for which I myself was responsible, for reasons which the present Minister of Labour has stated to the House to-day-22 weeks from the 19th April to the middle of October, or 26 weeks by the calendar.

That is not a bad provision, and I shall most certainly support it. I would remind the right hon. Member for Platting (Mr. Clynes) that when you are dealing with the unemployment insurance scheme, you are only dealing with one part of a many-sided endeavour which the State has made during the recent, and still continuing, trade depression to mitigate the problem of unemployment. £33,000,000 State contribution is by no means inclusive of the whole State contributions. The Insurance Act, I must insist, is really only one part of a many-sided endeavour. I can only incidentally refer to the matter now. Of course, the first duty, confronted as we are with this calamity, is to do all we can to revive and to develop trade, and the next duty, in pursuance of the work-finding policy, to assist the municipalities all we know to put in hand productive emergency relief works, and I do press upon my right hon. Friend the very grave necessity to pursue those several other endeavours with all activity and with every industry. Even when you have done everything you can in the way of finding work and stimulating trade by your several schemes, there will remain these large numbers of people, to whose help you must come by providing an extension of benefit under the Bill proposed to-day. I think it is a good provision, and I desire to say so. I was more glad than I can say to hear that the dependants' grant was going to be continued. I know my hon. Friends and right hon. Friends on my right have said some very bitter things about the 5s. a week additional to the unemployed man's benefit for his wife and the 1s. a week each for the little children. All I have to say is that, to my certain knowledge, that has proved very timely and very helpful in lots of little families suffering the hardships of the enforced unemployment of the breadwinner, and I am very glad it is being continued.

I have some anxiety about one point in this Bill. I desire to press it upon my right hon. Friend. The provision we made from November last was 22 weeks' benefit, the first 12 absolutely un-covenanted, without previous contributions at all, because the poor people concerned could not make them, as they could not get work. The second two fives imposed not very onerous stamp qualifications. I introduced on the emergency side the contribution qualification deliberately, because I wanted to get back, slowly, of course, but nevertheless permanently, to the old established form of insurance, under which benefit is paid in respect of contributions made, as soon as I could. Recovery has been so delayed that a considerable number of people, having drawn their 12 weeks since the 2nd November last, wholly un-covenanted benefit, found themselves unable to bring any qualifications forward in respect of the second two fives of the total 22. These people ran out of benefit entirely on the 24th January. It is a very hard case. My right hon. Friend considered that by the time we get to the 19th April there will be 150,000. I think that 100,000—the second figure he gave—will be probably nearer the mark. That is rather a serious figure. The 11,000, increasing week by week, have already been out of benefit six weeks up to now, and will be out 12 weeks by the 19th April. I wish my right hon. Friend would look at that, so as to try, if possible, to bring the date of the commencement of the new period of benefit, or the extension of the old, forward a little earlier, because by that time a good many will have been out of benefit for 12 weeks. By that time 100,000 will be out of benefit, many having been off for 11, 10, nine and so on number of weeks. I do press upon my right hon. Friend the suggestion that the way to meet these rather hard cases, this pressing and particular claim upon us, is to bring forward the date, if it is at all administratively possible, a little earlier than 19th April, the date of the commencement of the new period of benefit. I should like to have an answer in respect of that point. My right hon. Friend the Member for the City of London (Sir F. Banbury) will be glad to hear that the cost will not be excessive in dealing with the new charge. It will mean that we will borrow a little more rapidly than otherwise we should do. He will, in particular, be glad to hear that already after this long time we are not much past half the borrowing powers which the House of Commons gave me. I am quite sure the right hon. Baronet will take some comfort from that.


It may have been that the powers asked for were excessive!


If that be so, what, was the right hon Baronet about to allow the House of Commons to give borrowing powers which were excessive? He must have been singularly failing in his duty. However, I think he may take comfort—I am sure he does—from the fact that after this long time only £17,000,000 of the money, roughly, which is not much more than half of the total borrowing powers which I had to ask for so long ago, has been borrowed. I expect my right hon. Friend the Minister of Labour has spent sleepless nights of late—




—no one in his office can avoid that—considering the demand that for this benefit, week by week, the country should get something in return. It was mentioned once more by the right hon. Gentleman the Member for Platting (Mr. Clynes) when he said it was "work and not doles" that was wanted, as the phrase goes. That is the demand upon everybody's lips, and upon no lip is it more honestly uttered than upon the lips of the great bulk of the people now suffering from unemployment. Directly the slump began 2½ years ago the point was pressed upon me by those responsible for private industrial concerns. They came to me and said, "If you will only allow this 15s. a week benefit to go as a contribution to wages." [HON. MEMBERS: "Oh!"] I am telling my Labour friends what they came to me and said I have not commented upon it, though I will do so—if I get the opportunity! The employers said to me, "If you will only let this 15s. to go as a contribution to wages, then we can keep our concerns going; hard times are upon us, and we can keep going if you do so."

That struck me as a very tempting proposition. No one, however, who has carefully read the agricultural history of this country round about the time of the Napoleonic Wars but will remember what resulted from wages being subsidised, nor will he take such a proposition as that very lightly. Therefore, from the very first, though I heard it almost daily, I set it aside. You could not take this benefit however much you would wish for service in return, even for the sake of the men themselves. There is no demoralisation like being out of work. The acceptance of the dole is not demoralising. It is the being out of work. You could not take the benefit and use it in subsidising wages.

Later—and I am glad to see the Postmaster-General present—the matter was put in a narrower form. It was pressed upon me by a number of municipalities, and particularly by the municipality of Birmingham, and my right hon. Friend is now Postmaster-General. They said: "Why not take this 15s. per week benefit, and let it go towards the wage of the men not in industry generally"—not at all. The much narrower lines on which the municipalities put forward the suggestion was where they were taking up and putting into hand for the relief of unemployment emergency relief work, which they would not have considered it expedient to do if there had been no emergency. That was the proposition urged upon me. It was a proposition which certainly did not involve all the dangers of the wider proposition, which had definitely turned down. I am sure my right hon. Friend will carefully consider the matter. [AN HON. MEMBER: "What about the right hon. Gentleman the Member for West Swansea? "] The right hon. Gentleman the Member for West Swansea (Sir A. Mond) is quite able to speak for himself. But I always kept a more or less open mind upon this narrower proposition, which was: You take the 15s. and you say to the municipalities in respect to emergency relief work: "Why should you not put in hand work, and, in the case of the emergency work imposing a heavy burden upon the municipality, we will invite the men to let the 15s. go as part of their wage." That proposition, I say, I kept a more or less open mind upon, although I saw it had difficulties. Inasmuch, however, as my right hon. Friend is likely to have it pressed upon him from influential quarters, I should like to have a word or two on the question, because the difficulties are not inconsiderable.

The matter has been examined officially —once at my instance—by a Cabinet Unemployment (Inter-Departmental) Committee, and twice turned down, and it has often been before the Cabinet Unemployment Committee. It would have this great advantage, that it would give men now simply drawing unemployment benefit, and who have been unemployed for a long long time, through no fault of their own, the chance to begin to shake themselves down to regular day-to-day employment, and that would be a very real advantage; for, as I say, it is not demoralising to accept what is contumeliously called the dole—that is not the demoralisation. This lies in getting out of the habit of regular occupation. We must not forget, however, that the benefit of the Insurance Act is frankly for the unemployed man. I call the attention of my right hon. Friend the Member for Platting to this—that not for the first time—though he did not use the term to-day—he has called the unemployment benefit waste, It is a benefit which is frankly provided by a contributory system for the man who is out of work. It is just like the trade union out-of-work pay. In neither case is there service rendered in return, but there is not a Member on these Benches who can say it is waste. [An HON. MEMBER: "The men pay for it!"] Certainly they do, and let me remind hon. Members above the Gangway that the men pay for this, too. Therefore, do as we would wish by a system which will help the man to get into regular employment, we cannot take this—it would be rather unwise on the whole to take this—and use it as a subsidy for wages even on the narrower basis. For those who get the benefit on the un-covenanted side have already paid their quota, and those who have not will pay their quota when they get into work. Let me remind the right hon. Gentleman the Member for the City that the contributions are being kept up and will be on the very high level of 9d. a week for men and 10d. for the employer, and will he so continued until the debt has been liquidated. I am quite sure he will take further comfort in that fact. But I do seriously suggest that if you begin to pull this about, you will probably stand the risk of smashing it up altogether. Some people would not mind that. There are some who openly do not want a contributory scheme. Some of them are on my right above the Gangway. They frankly tell us so. [HON, MEMBERS: "Hear, hear!"] They frankly say so, and always have done. They want a noncontributory scheme, the "maintenance" which my right hon. Friend the Member for Platting talks about, and that is State maintenance. Those who do not want that had much better let this State contributory scheme alone. For that and other reasons I would ask those who want this, particularly the Postmaster-General, who urges it upon me with so much eloquence on the narrower basis, to look very carefully at the matter before we go in for it.

There are a couple of other things that might very well happen. So far from increasing the number of men at work—which we are all after, certainly—we should simply be paying for the wages of those who would be at work in any case by drawing upon the insurance funds. That is not satisfactory. There is a much more serious difficulty than that. How do we know that preference will not always be given to the man who can come forward with the lbs. contribution to his wage, so that the man "down and out" altogether, who has exhausted his right, is left worse off than ever! There are historical precedents for viewing the matter from this aspect, for that is exactly what happened to the agricultural labourers drawing Poor Law relief 100 years ago. I think on the whole, though there is much to be said for it, and we shall doubtless hear a good deal about it, we will do well to leave it alone. The way to deal with this problem is this: to increase the amount of State assistance that is given to the municipalities for putting relief work in hand, for they have done admirably, and the more they do the heavier the burden upon the rates. The right way to tackle this and to increase the opportunities for the amount of work, is to say to the municipality: "The more you do the more difficulty you find in the new schemes, but if you will put forward new schemes we will treat you rather more generously." I think it is far better to do that than follow many suggestions that do not seem helpful.

I was rather surprised that my right hon. Friend the Minister did not deal with what is known as the trade dispute disqualification. From the very first discussions when unemployment insurance was Part II of the National Insurance Scheme of 1911, this matter has been continuously before us. The Clause as it left discussion in 1911 is the form in which it now stands in the Act of 1920. Clause 8 (1) of the Act of 1920 says: An insured contributor who has lost employment by reason of a stoppage of work which was due to a trade dispute at the factory, workshop, or other premises at which he was employed, shall be disqualified for receiving unemployment benefit so long as the stoppage of work continues, except in a case where he has during the stoppage of work become bonâ fide employed elsewhere in the occupation which he usually follows or has become regularly engaged in some other occupation. Where separate branches of work which are commonly carried on as separate businesses in separate premises are in any case carried on in separate departments on the same premises, each of those departments shall, for the purpose of this provision, be deemed to he a separate factory or workship or separate premises as the case may be. I do not deny—I never have denied—that cases of hardship may arise under that provision, and particularly with regard to the labourers who are thrown out of employment in the case of a dispute between, say, a craft union and an employer to which they are not directly parties, but from the effects of which they suffer so far as the trade dispute disqualification is concerned. I have never denied the difficulty of finding an equitable solution. The difficulty is formidable. I have said so many times in this House and in Committee upstairs. I have also said that if, say, the right hon. Gentleman the Member for Platting and the hon. Gentleman the Member for South Croydon (Sir Allan Smith) were to get together, the latter representing the employers and the former representing the workmen, and agree upon a solution, if it was at all administratively possible, we would give it every consideration. But I never had any plan submitted to me. In June of last year I appointed a strong Committee of which the Chairman was Sir Thomas Munro, with three Members of this House amongst the membership to look at this trade disqualification Clause which stands still as it did then, "and to consider whether any, and, if so, what, modification should be made there in." I want my right hon. Friend to tell us about that. I am surprised he did not mention it. It is rather an acute thing. I imagine we are up against a very tough proposition. I do not for a moment suppose they have yet reported. I feel a certain sense of responsibility in the matter. Therefore I shall be glad if my right hon. Friend will tell me how the thing is going on.

Finally, if I may urge it, let me say that this Bill makes provision for the continuation of unemployment benefit beyond October, 1923, and for the year following. I should like to look at that question for a moment. It is a good thing to make assurance doubly sure. When I was in office I was always haunted by anxiety that my provision might peter out at a time when the House of Commons was not sitting. I make no objection to this scheme providing for a continuance of this sort of provision up to October, 1923, and onwards to 1924 in the first case as a standby, but much more than that will have to be done in the meantime, for that is not enough. I do commend this to the Government with all the earnestness I can command and with every emphasis because you cannot leave the matter there. After all, this is largely an emergency provision. The right hon. Gentleman the Member for Platting (Mr. Clynes) is quite right in the contention which he put forward that this is not the last word in provision for unemployment. The provision which this Bill makes is not enough and the Government will have to look at that provision again.

Although I agree that this is the best thing to do, it is by no means enough. I think the Cabinet Unemployment Committee should be charged at once to review the experiences of the last two-and-a-half years. They are very valuable in regard to mitigation, palliation and remedies for unemployment, but they should prepare permanent plans for the future. I shall be asked, "Why did you not do it?" I admit that is an obvious comment, but all I have to say is, we did it to a very large extent, and, after all the problem on my hands was pretty overwhelming because of the numbers, and there was little opportunity of planning for the permanent future, but as the situation eases, opportunity to do so opens out. I take my right hon. Friend at his word regarding the necessity of looking ahead. He took some sort of credit for making provision beyond October, 1923, and he said that he was not one who would go from hand to mouth in this matter. I do not call it looking ahead when it is merely proposed to continue an emergency provision, and much more will have to be done. The permanent post-War unemployment problem is going to be larger and different in character from the unemployment problem before the War. You are now going to have in addition hundreds of thousands of hardy and vigorous young men among the unemployed as a result of the turmoil of the War.

The Committee which I have in mind should press for all it is worth on their behalf the Empire Settlement Act while yet there is time. In the next place, efforts ought to be made to provide continuity of employment, and that should be our first and main object. The second problem would be the finding of the necessary financial assistance and Parliamentary powers ought to be obtained, if necessary. The provision of money, vital as it is, must more and more be viewed as a less satisfactory second best. Many great public utility schemes are merely in the air. We did a great deal in that direction, but much more is possible in consultation with the municipalities. They have to look ahead, not only in regard to getting public utility schemes ready for when a cycle of depression comes again, but they ought to he now considering the time and method of placing Government and municipal contracts.

Mr. DEPUTY-SPEAKER (Mr. James Hope)

The right hon. Gentleman is getting wide of the Debate, and his remarks must be relevant to insurance.


I apologise, Mr. Deputy-Speaker, and I will come back to the Insurance Act. There ought to be an examination of this problem with a view of substituting something more permanent. The whole question of insurance by industries ought to be thoroughly examined much more closely. It is a very attractive proposition because, if an industry is responsible for its unemployment, manifestly it will use every power that is humanly possible to prevent unemployment. If you set up a Committee under some local administration, then it will be done by voluntary agencies, and it will be much cheaper than if it is being done by official agencies. I admit it is an attractive proposition, but it is not easy to carry out, and certainly the last word has not been said upon it yet.

There is another alternative provision in the Act which is worth considering. It is an alternative under which joint industrial councils or associations consisting of workmen and employers in any industry may submit a scheme to supplementing the minimum provision of the State Insurance Act. I am not sure that that is not a better scheme, and if it were made compulsory on groups of industries it might be better than the other form. Those are things which might be looked at by the Committee which I have suggested. When the Act of 1920 came into operation we ran into very heavy weather, and for this reason these schemes were held up. They should be examined afresh. Such a Committee as I contemplate ought to consider whether in the smaller industrial areas at any rate it would not be possible to administer unemployment insurance by voluntary agencies rather than by official establishments. If you had a local committee of employers and employed, I am pretty sure in the smaller areas they could keep as good a check on the administration of unemployment insurance as is now done by the most admirable, loyal and faithful servants of the Ministry of Labour, and in that way you could save a good deal of money which is now being spent on the official side.

In October, 1923, things may not be sufficiently recovered to enable you to put all these things in operation. It may be that when you come to the beginning of Session 1924 things may have got so near normal that a permanent and not emergency scheme would be far more desirable and preferable to put down in place of this temporary provision. I wish to press upon the Minister of Labour that he cannot get off by merely writing in a Bill, "We are going on until 1924." You want to have something ready and, if we reach the normal state in 1924, it would be better to have a scheme ready instead of waiting until that time and then appointing a Committee. After all this is largely an emergency scheme, and no one would claim more for it. We have had two and a half years' experience of these questions.

The right hon. Gentleman the Member for Platting is quite right when he says we ought to look more closely into this matter. I ask the Minister not to leave the matter with a mere provision for continuing up to October, 1923.

As regards the immediate future and its needs, broadly, my right hon. Friend in this Bill has done precisely what anybody else would have been compelled to do, confronted with the situation now before him. I have suggested one or two points for his consideration. I particularly press the point that, while it is quite right to make provision from October, 1923, onwards, along the line of the present scheme, that is not enough. We have to take time by the forelock and be ready with permanent plans. We not only desire to mitigate the present hardships of unemployment, as this Bill does, but we want to have ready plans for development on a much larger scale, schemes of work which will reduce the proportion of those people who, in a cycle of depression, are forced to spend their days in idleness through no fault of their own, and such protracted idleness is demoralising.


The right hon. Gentleman who just sat down said that, owing to the state of Europe, this unfortunate unemployment will continue for some length of time. That is not the point of view which the right hon. Gentleman (Dr. Macnamara) has taken in the discussions I have had with him for some time. He always looked upon this as an emergency question, which would soon right itself. I have had considerable experience of insurance schemes, and everybody is always most hopeful about them, but they are generally wrong. The bottom generally falls out of such schemes and they become insolvent. The State has advanced £18,500,000 under these Acts and probably within three or four years it will advance £20,000,000. We are told that we are going to get it back again, but we cannot get it back unless unemployment stops and then we can only get it back by the contributions of those who are employed. We all hope that unemployment will stop and that everybody will be employed, although I confess that I do not see much hope of it at the present time But presuming for a moment that I am wrong and that everybody will be employed, they will begin to say, "It is likely that we shall not be unemployed again, and I do not want to pay contributions every year."

6.0 P.M.

There are a large number of working men who do not pay contributions under the last Act. The railwaymen practically refused to pay the contribution, though unemployment was going on at the time. Human nature being what it is, is it not pretty certain that when everybody is in employment they will not want to make a fairly large contribution out of their wages? Therefore I think I was justified in asking the Ministry of Labour what the new contribution from the State would be, and whether it would be in the form of a loan or a larger contribution. The Minister told me that he did not know, and that he had not got the figures, and I think that is a rather bad admission to make. Surely in a ease of this sort we ought to know the amount of money which we are going to commit ourselves to and what liability we are incurring. The right hon. Gentleman said that, after all, the receiving of the benefit was not altogether the worst part of this scheme, but that a number of people were getting accustomed to being out of work. If I may say so, I quite agree with the right hon. Gentleman. It is a very dangerous thing. I cannot help thinking, human nature being what it is, that while the vast majority of people out of work a short time ago were anxious to get work, now a certain number, a small minority I hope, have become so accustomed to doing nothing, and to receive payment for doing nothing, that they will find it very difficult to take to work again. That is one of the great difficulties we are suffering from at the present moment. I hope my hon. Friend who is representing the Minister of Labour will be able to get information with regard to the bridging scheme. The Bill is very unintelligible. I cannot make head or tail of it. What I want to know is, what is going to happen under this bridging scheme? Do I understand rightly that what it means is this: Supposing an employer has in his factory 100 men. Suppose they are working half-time, would it be possible for 50 men to work three days a week and then receive unemployment benefit for three days, while the other 50 men go on in the factory? Is that what is contemplated? If so, it amounts to subsidising wages, a practice which was found to be very fatal after the Napoleonic War at the beginning of the last century.

The fact is we have got to be a little hard-hearted at the present moment. Unless we are, we shall find ourselves in the same position as when the new Poor Law was brought into operation. You cannot get over human nature. All classes do exactly the same. Nothing could be more fatal than to have a small income sufficient to enable one to live without working. If a man is compelled to get a job he will probably be a much better citizen. We have to make people understand that they are compelled to work, and that if they do not work they will have a very bad time. There are a great number of people who are living, according to their lights, in a quite comfortable way, and who would prefer to continue living like that sooner than go to work. I hope the points I have raised will be submitted to the Minister in charge of the Bill. I repeat I do not pretend to understand the Bill. It is very complicated, but I trust the Government will not in any way encourage the subsidisation of wages, or encourage men to go to work for two or three days and then get the unemployment benefit for another two or three days. There are a certain number of people who can get work but do not choose to take it. There are any number of women who could go into domestic service and will not do it. We really must be careful in drafting Bills of this nature to see that advantage cannot be taken of the methods which to-day are necessary for ensuring some alleviation of the present unemployment.


We shall agree that the Bill, so far as it goes, is useful. Our complaint on this side is that it does not go far enough. I was disappointed with the speech of the Minister, not so much with what he said, but by reason of what he omitted to say with regard to the larger provisions which must necessarily follow this Bill at a later date. This is a purely emergency Measure. I believe it is the seventh or eighth Unemployment Insurance Bill which has been brought before this House in the last four years. We realise how, right through the chapter, we have dealt with this problem in a piecemeal manner, dealing with each emergency as it arose without any really sound plan to cope with it as an international or a national problem. With regard to the first part of the Bill, which is merely of a temporary nature, I want to ask about this question of the gap. We have a large number of people falling out of work owing to a special period coming to an end. The right hon. Gentleman says you must have a gap. It seems to me that the gap is rather an obsession of the Minister of Labour. I asked him, "What is the virtue of the gap?" and he seemed to indicate that he would answer that at some other time. I presume the gap was put in the original Insurance Bill as a corrective, or as a matter of discipline, or, possibly, on the grounds of finance. But surely, when people have been out of work for 12 or 18 months, they do not want more discipline. It is not much comfort to tell them that after a few weeks they will get their unemployment benefit again.

If it is a question of finance, I submit, with all respect, that this whole question of insurance requires to be dealt with on a sound financial footing. The right hon. Gentleman has told us that £18,000,000 have been lent in aid and that £22,000,000 have been obtained by raiding the funds contributed under the old Acts by 4,000,000 of insured people and distributing them among the 12,000,000 insured under the present Act. If we want to put insurance on a sound basis, we must deal with this £18,000,000 loan and 22,000,000 raided from the old fund as a national contribution towards a national emergency. If you are going to keep it as a millstone around the neck of the insurance scheme, you will never get any reserve fund at all in order to deal with the matter on broad lines, because as soon as the deficiency has been wiped out you will get another spell of unemployment, and you will never be on a sound basis. You will never be able to deal with the question on really satisfactory lines. If a gap is necessary in some districts, it is uncalled for in others. You have a small reduction in the amount of unemployment. On the average for the whole country it is from 12 to 13 per cent., but according to the "Labour Gazette" of February, the amount of unemployment in January was 42 per cent. in the shipbuilding industry on the north-east coast and 23 per cent. in the engineering industry. Therefore, you have unemploy meat so excessive that it is quite impossible for the local authorities to supplement this gap. That is what, it means; the men cannot starve. You are throwing these people on to the local rates.

The right hon. Gentleman suggested that he had dealt with this question in a generous way. It seemed to me that the arguments he used devoured themselves. He said in reply to one set of critics who told him that he was not dealing with the matter generously enough. "Look at what the nation has done. It has treated this as a national problem, and has contributed £33,000,000; and then he turned round to the right hon. Gentleman the Member for the City of London (Sir F. Banbury) and said, "This is only a loan; it is coming out of the Insurance Fund, and it will be paid back by the contributions of employers and employed." Instead of treating this great question out of national resources the right hon. Gentleman is mortgaging the future of the Insurance Fund, and the State is doing in fact very little to solve the problem. The right hon. Gentleman referred to an interesting Report dealing with unemployment by a committee of business men and economists who had investigated the question. I should like to direct his attention to some of the findings of that Report. The committee said the State had treated very hardly certain localities and industries in this matter. They referred to the fact that unemployment is largely outside the control of industry, and that during the War the heavy iron and steel industries had to increase their plant, and that labour was brought from various districts into the industrial towns to engage in these particular industries at the invitation of the Government. Then the slump came, and what happened? Owing to the shortage of houses due to the dropping of building at the Government command during the War the labour which had been drafted into the towns—into the iron and steel industries—was unable to get back to the districts from which it came, and was left on the hands of the locality to which it did not belong and which had really no responsibility for it. These localities were saddled with maintaining that labour—


I have great sympathy with the arguments of the hon. Gentleman, but I think he should necessarily connect them with insurance.


I was trying to show the reason why we should not have this gap was because labour, for the reasons I was indicating, had gone into certain industrial areas, and that when it was thrown out of benefit by the gap period labour would have to look to the local guardians and the charge would fall on the rates of these industrial areas during that period. However, I will not pursue that matter further, except to say that the burden on these necessitous areas is getting to breaking point. As the right hon. Gentleman knows, a deputation was to wait on him this week to seek assistance in this distress and emergency, and they will be grievously disappointed that, instead of receiving any relief or hope or encouragement, they are to receive an added charge upon their rates in order to relieve the right hon. Gentleman and his fund of expenses which properly should be his. I appeal to the right hon. Gentleman to reconsider this matter. What purpose is there in the gap? In the case, say, of a shipyard worker who has been out of work through no fault of his own for 12 or 18 months, you tell him that, for the sake of discipline, or finance, or for some other reason, he is to have two weeks of no benefit, two weeks when he must go to the guardians or starve, because his trade union funds and his private resources are exhausted. It is unfair to the locality and unfair to the industry to impose such a burden, which is, indeed, a national burden, and should be met on national lines.

I hope that in Committee the Minister may be willing to meet the demand of these necessitous areas, whose rates are mounting up from 20s. to 30s. in the £. I had an interview only on Saturday with the chairman of the board of guardians in my district. He said that things are getting beyond breaking point, that they had loans amounting to £280,000 and were seeking more loans, that their rates were over 20s. in the £, and that there would be an added burden if this gap period were insisted upon, so that those who, through no fault of their own, were out of work were compelled to go to the guardians. Moreover, once a man, who has kept up his independence hitherto, gets into the habit of going to the guardians, there is not the same hesitation next time. We want to make it easy for a. man to keep away from applying for Poor Law relief. They do not want to do it, but by this gap period you are compelling them, and in the end it will be an extra charge on the public purse. Whether it comes from the National Exchequer or from the local rates, it is still a burden on the public purse, and it is not sound economy to seek to save expense to the one by making a bigger charge on the other. I should like also to ask whether it will not be possible in Committee to remove some of the restrictions which in the past have made it difficult to get benefit as quickly as possible. I am aware that Clause 5, which deals with the continuous period, is a great advantage and is some concession, and I know that the officials of the Ministry of Labour are most anxious and willing to give assistance to those who come to them. The experience in my own town is general that the officials do all in their power in every case. They are, however, held up sometimes by red tape, by restrictions, by delay at headquarters. I hope it may be possible to sweep away some of these difficulties which hinder the prompt payment of benefit, which add, to the evil of unemployment, the distress caused by deferred payment, again sending those to the guardians who really ought to be kept on the Insurance Fund.

With regard to the future, I hope that, as the right hon. Gentleman the Member for North-West Camberwell (Dr. Macnamara) has suggested, the Government may realise that it is time a broad view was taken of the matter, and that something of a permanent nature was done. We are all agreed that the old laissez faire? policy must go. You cannot leave things as they are. Not only do we not want to go back to the pre-War standard, but we want something better. We want to realise the collective responsibility of the community jointly with industry for those who fall by the way. It used to be said overseas on active service that it was the first sign of demoralisation in an army when it ceased to care for its casualties; and in the industrial world it is a sign of demoralisation if the community and the industries are unable to carry their casualties on the strength, and unable to provide for them when, through no fault of their own, they fall victims. No one suggests to-day that it is a question of Tired Tims or Weary Willies. That is a cry of the past. We realise that these men are out of work through no fault of their own, and I submit that we must realise our full responsibility, and not merely provide for the 26 weeks. I am sorry to see that in the more permanent part of this Bill the Government are cutting down the period of benefit. Surely, if a man is out of work through no fault of his own, he should receive benefit for the whole period and on an adequate scale. Instead of that, the Government are suggesting cutting down the period and cutting down the State contribution. I hope that both will be resisted to the full. We want a. higher conception of the responsibility of the community to those who suffer through no fault of their own.

It has been said that if you do this you will ruin industry, but that cry has been raised whenever any improvement has been put forward in the industrial world. If you go back to the first introduction of the Factory Laws, you will remember how the Lancashire cotton industry was up in arms when it was suggested that they should not be allowed to take little children from their beds and employ them in their mills; and what did the great prophet of those days, Thomas Carlyle, say? He said: "Better perish the industry than carry on taking the Devil into partnership." I am certain that many of us to-day would say that those industries which cannot carry the burden of their own unemployment had better perish than carry on at the expense of the tragedy and suffering we have known in recent years. This proposition is not an impossible one. Statistics show that during the last 20 years or so, in those industries in which unemployment is most fluctuating, there has not been an average of more than 10 per cent. unemployed, and, excluding the War years—which involve an entirely abnormal problem—and taking ordinary industry, the average will be a little more than 6 per cent. out of employment. If we only paid them half wages—and that is more than is paid' at present—for the whole time they are unemployed, it would only mean an extra 3 per cent. on the wages bill, and if that were divided between the State, the employers and the employed, the burden would be very little more than at the present time; but you would have a comprehensive scheme which would enable those who through no fault of their own were thrown out of work to have adequate maintenance.

We have to strive for a higher standard and a higher ideal. In ordinary industries and business to-day, the commercial man provides a reserve fund in good years in order that the various interests concerned in his business shall be protected in lean years. Rent is guaranteed to the landlord, mortgage interest is guaranteed to the capitalist, machinery and plant are kept in as fit condition when trade is slack as when trade is good; even the pit ponies are tended, watered and fed whether the mine is working or not. Surely, what it is sound to do in business for the other factors of production is equally sound for the human factor. We cannot go back; we must have higher ideals. Now is the time for the Government to draw up a large scheme which would help to remove those evils of industry which have been so rampant in the past—evils which are doing more to undermine the stability of the country than anything else. Many of us believe that they are not the necessary accompaniments of private enterprise. Private enterprise can remove these excrescences, and if private enterprise is to exist and carry on it is necessary that that should be done. I suggest that the Government might see whether these various insurance schemes, which have grown up in a haphazard way, cannot all be combined in, as it were, an "all-in policy "covering old age pensions, unemployment insurance, health insurance, and workmen's compensation. All these have grown up in a haphazard way, and if they could be combined and united in one joint scheme economy could be effected on machinery. I do not believe in the cry that the State is necessarily more expensive than the private individual in doing these things. In fact, a Return which was presented only the other day by the Home Office, showing the costs to the employers of workmen's compensation, showed that of every £100 paid by the employer only £35 goes to the workmen in compensation, £65 going in profits and expenses to the company, whereas, under the insurance scheme the costs are only about 12½ per cent. I appeal to the Government to deal with this question on comprehensive lines, so that Parliament, which in the past has secured for us political and religious liberties, may now secure for us that economic liberty which will enable us to remove the dread effect of unemployment in our industries.

Lieut.-Colonel SPENDER CLAY

The Minister of Labour, in the concluding portion of his speech, referred to a publication which has also been mentioned by speakers on the other side of the House, "The Third Winter of Unemployment." He mentioned it as if it were proof 'a favour of the Measure which is now before the House, but evidently he had not read the whole of it, because that publication lays the greatest stress on the danger of mixing up insurance with relief. I rather agree with some previous speakers who have said that this is practically only a patchwork Measure, and that there is no finality about it. I agree with the hon. Gentleman who has just sat down, that it would be better if we could consolidate all the Measures dealing with public assistance, and arrive at some degree of finality. I think that the present Bill is a mistake as regards the manner in which questions of relief and insurance are mixed up in its drafting. We all realise that under present conditions it is almost impossible to create an insurance scheme that is perfectly sound actuarially, but I think it is unfortunate that the needs of the moment have been mixed up with the word "insurance," because insurance can only moan a contributory scheme which truly apportions the benefit to the contributions which have been paid. Any departure from that is fraught with danger and mischievous, because it leads the public to believe that the substitution of insurance by relief will be the normal procedure in the future.

Under the present system, and under the system which will be continued by this Measure, the insurance money and the relief will be inextricably mixed up. There will be overlapping, and that means that the moneys provided by Parliament and by the ratepayers will not be efficiently and properly used. The Bill commences by prolonging what is called the un-covenanted period, and the un-covenanted period is purely a euphemism for relief and nothing else. The Bill then proceeds to say, with pious hope, that by the middle of October, 1924, the scheme will be financially and actuarially sound. I should have thought that a Financial Resolution would have been necessary before the Second Reading of this Bill, as the Bill is so mixed up with finance, but I understand that that was not the case. I agree with my right hon. Friend the Member for the City of London (Sir F. Banbury) and also with another hon. Member who spoke from the other side of the House, that this large sum of money which has been borrowed is not likely to be paid back, and that it will remain a charge against the taxpayer of the country. We have to look facts in the face, and while the Bill is supposed to be actuarially sound, you will undoubtedly be overloading the unfortunate contributor after 24th October with a debt, causing him to pay contributions in order to give benefits to people who have been unemployed all along. That seems to me to be difficult to justify, and I am not at all sure that it will not in the end be necessary for us to cut our loss and start a scheme actuarially sound when it is possible to do so. Of course, even in a normal period you can never hope to do away with unemployment entirely. You will never do away with it under Socialism or any other system under which the people may live. There will always be a certain number of unemployed, and it is for that very reason that you want an efficient insurance scheme against unemployment on a basis which is actuarially sound and which is not mixed up in any way with relief. We are entitled to know what the cost of the scheme will be to the State as well as what will be be added to the insurance fund. It is very awkward to fix a date like 17th or 24th October as the commencement of the financial year. It would have been far better that the year should commence either at the beginning of the financial year, as we understand it, or else on let January, as it is more generally understood by the people of the country.

It is on the question of the gap where you have overlapping with the guardians. I cannot help thinking there should be a general register of all those who are receiving relief, whether it is in un-covenanted benefit or from the guardians or from any other source, in order to give some general idea as to the maximum and minimum amount which should be paid. I may be accused of suggesting too great centralisation and giving too great power to the Ministry, but some authorities may give too little and some may give too much, and I cannot help thinking that there should be a register available to the public and to the Ministry, giving all those in receipt either of un-covenanted benefit or of relief. I should like to make a protest against the manner in which the financial memoranda are issued. What is the good of giving financial memoranda five minutes before we come into the House. With a document like this, which gives a considerable amount of detail, which cannot be digested during Question Time, it should not be beyond the means of the Ministry of Labour to allow us to have a proper opporunity of reading the financial provisions instead of having to get it from the Vote Office when we come down.

I should like to say a word about the hope of a permanent scheme for dealing with this question. I hope the hon. Member opposite, who dealt with this matter to some extent in a critical but certainly not in a constructive way, will use what influence he has—I am sure it is very great—with the Trade Union Congress to issue their report on insurance by industry. My own opinion is, that the question ought to be thoroughly probed to the bottom. It seems to me that by this means you will obtain greater economy, efficiency and co-operation between employers and employed, because it is to their interest to keep unemployment down as far as possible. I hope the report from the employers and from the employés side may be available in the very near future. I am not certain, in my own mind, whether Clause 10 permits contracting out of the scheme or not. My impression is, that in the Bill of 1920 provision was made for contracting out in the case of schemes which provided similar or better benefits, but, subsequently, owing to the insolvency of the Act, the power to contract out was taken away, with the exception, I believe, of the railways, who contracted themselves out because they had no alternative scheme at all, and simply resisted payment because they arc unlikely to be in need of unemployed benefit. It seems to me to be of doubtful wisdom for the Government to allow even a powerful body of men like the railwaymen to remain out of insurance and, at the same time, to insist on people who are not so strongly organised remaining in.

It seems to me that sooner or later you will have to bring the whole of industry into insurance. It has gradually been increased. It began with small beginnings and was applied to certain trades. Gradually the numbers have increased until they are now, I think, over 12,000,000. I cannot help thinking that sooner or later you will have to bring in all those engaged in manual or clerical labour up to the figure of £300 or £400 a year, and that is why I want to see a comprehensive scheme. There are several schemes which ought to be examined. There are proposals, for instance, that there should be what amounts to a tax on wages in order to supplement the fixed amount paid by the State and by employers. Whether that is practicable or not I do not know. The right hon. Gentleman the Member for Camberwell (Dr. Macnamara) said it was very difficult to find a water-tight scheme which would be free from criticism. We can only do our best in endeavouring to find a scheme which will be of the greatest benefit to those who are unemployed. There should be first of all a clear-cut division between insurance and relief, there should be a general register for all who are in receipt of relief of any kind, and I hope that insurance by industry will be found possible and that contracting out may again be permitted. I am sure we all recognise, irrespective of party, the great difficulty with which the Minister is faced at present. I cannot help thinking that the scheme we are now considering can only be regarded as a temporary makeshift.


Before getting to the main points on which I am in entire disagreement with the Bill, I should like to make one or two observations upon the points put forward by the hon. and gallant Gentleman who has just sat down, All through this Debate there has run the theme, "You must see that you are actuarially sound and separate relief from unemployment benefit, and you must have organisation by industry." Those two points at once clash. You cannot have both those points and at the same time have an actuarially sound Unemployment Act. I am opposed to the theory of insurance by industry for the simple reason that you would take the best industries with the lowest percentage of unemployment and contract them out of the scheme and leave the residue of casually and seasonally employed and the general mass of labourers in the various industries, and to make such a scheme as would provide adequate benefit for that residue you would have to take 25 per cent. of their wages, while taking out of the scheme those who would only be called upon to pay about 25 per cent. of the present rate of contribution. One must fully realise what is meant by a scheme of national unemployment insurance, and the hon. and gallant Gentleman ought to keep in his mind the fact that the Government of the day in 1920, in order to get out of its own direct responsibilities in the winter of that year, with a large number of unemployed, extended the old Act to embrace eight millions who had never had an opportunity of contributing anything at all to the Fund, and the Government took the £22,000,000 of reserve which the 4,000,000 previously insured workpeople had accumulated to meet the obligations which they were immediately confronted with of making provision for the other 8,000,000 embraced in the 1920 Act. So that the Government of the day itself was responsible for introducing the scheme—call it relief or unemployment benefit—what you will—in order to get themselves out of a tight corner, and they are being more closely squeezed in the corner. They are entrapping themselves more every Session until we have the spectacle of the present Minister of Labour and the late Minister, one trying to justify his continuance of the policy of his late chief, and his late chief taking credit for any extension of his early schemes. It is simply one long chain of temporary Measures from this stage to that stage, and then, lo and behold, they have reached a point where the ex-Minister says, "You must stop this piecemeal business; we must have something more permanent," and yet he himself instituted and is responsible for more Unemployment Acts than any other Minister in the Chamber.

The right hon. Member for North-West Camberwell (Dr. Macnamara) asks, "What about the Trade Disputes Committee?" I am a member of that Committee; we meet again to-morrow. Some of us are not responsible for the delay. It is difficult to get agreement with the employers, who promised months ago to submit a memorandum in reply to the memorandum that the workers suggested for discussion. The right hon. Gentleman goes further. He says that he listened with a great degree of favour to the suggestion that, instead of unemployment benefit being paid to the unemployed person, it may well go as a subsidy towards wages. A suggestion like that, coming from an ex-Cabinet Minister, leaves us no longer in wonderment as to his failure to deal with the problem of unemployment. To suggest to the man in employment: "You must pay 9d. per week contribution to provide benefit if you are unemployed, and whilst you are in employment your 9d.—and you will have no say in the matter—will go to another employer in another industry to subsidise wages." Have not the working classes of this country already made a very great contribution towards subsidising industry Are they not £700,000,000 a year worse off by reason of reduced wages? Are we to tax their contributions for unemployment benefit, and say that it shall go to industry to subsidise wages? There would be such strong opposition, justifiable opposition, to such a proposal, that I hope the Minister of Labour will never for one moment entertain such a step.

We find the Minister of Labour using some nice phrases to fit the situation. He said that there were two lovely streams, running parallel through a vast waste, and that they begin to converge and get into one channel and that now that they have got into one channel, un-covenanted benefit has almost ceased to exist. He is quite right, and that is the great failure of his Bill. This Bill, on the face of it, would lead those who have no stamp credit to their account to believe that they are going to have a period of free benefit for 44 weeks out of an extended period of 50 weeks. That is not the case. As a matter of fact, instead of this Bill being a message of hope, it is going to be, in practice, a further measure of deep despair to those who have no stamps to their credit, and have not been able to make that provision. The Minister has power under this Bill to make such Regulations as would nullify the Bill when it becomes an Act. He has issued from time to time Regulations under the principal Act, and the subsequent Acts, and those Regulations have been the means of turning away from benefit hundreds of thousands of applicants who are not able to say that they have stamp credits to their account.

At the present time 1,340,000 people have signed the live register, and I suggest that not 1,000,000 of that number are receiving unemployment benefit. I suggest, further, that there is a long way short of £1,000,000 a week being paid in unemployment benefit, even counting the dependants' allowances. That is in respect of the live register. Those who-have already ceased signing, because they could have no further benefit, are in this position, that they can never qualify during this extended period of 50 weeks, when once they have come off. Those who were on for the first 12 weeks of the fourth special period and were cut out of benefit on the 24th January, and who were not successful in getting a further extension, cannot qualify for any of the extension under this Bill, although the Bill would lead them to believe that they would come on for 44 weeks out of the 50. No such thing. One of the previous Regulations said: "In order to try to wipe out the question of un-covenanted benefit, notwithstanding the deficits standing against your previous stamp record, we will re-establish your credit. When you have had your 12 weeks of uncovenanted benefit you must prove that you have standing to your credit some stamp credit. If you cannot do that, you have no need to apply."

Will the Minister of Labour say what has become of the single persons who were cut out? They represent between 130,000 and 140,000, and they have been denied any right to benefit. We shall be told that where it can be proved that there is an adequate income going into the home this kind of assistance is rendered unnecessary. I know of a case of a single woman living with her blind sister, who has an invalid husband The blind sister is getting 10s. under the Blind Persons Act, and the invalid husband is getting a little relief from the guardians. The single woman, having exhausted her right established by stamps, had to appeal for a free period of benefit. Upon inquiries, she was told that some of the blind person's pension ought to go to wards her maintenance, and that was used as the reason for cutting her away from benefits.


Surely the local employment committee would be to blame in that case?


No. The local employment committee always act upon the Regulations sent out by the Minister of Labour, who has the power to make any number of Regulations of whatsoever nature he cares. Those Regulations are never on the Table of the House, or in the Votes Office, and they are never recorded on the pink papers which are required if we are to keep in touch with the Regulations.

To-day, there are almost 500,000 persons unemployed in the United Kingdom not receiving unemployment benefit, and who cannot receive unemployment benefit under this Bill when its conditions are carried out by the Minister of Labour. It is quite plain, therefore, that the only people who will benefit by the Bill are those who can establish a stamp right under the scheme. Even though this Bill takes a special extended period of 15 months, the last period of that 15 months only provides 26 weeks of benefit out of the 52. That 26 weeks of benefit is uncovenanted as well as covenanted benefit. All persons with sufficient stamps to their credit may draw up to 26 weeks' benefit. There are persons who have a stamp credit to their account, perhaps stamps enough to take them to 40 weeks. I should like to know why, if they have those stamps to their credit, they are chopped off at 26 weeks, and not allowed to exercise their rights so long as they have stamps standing to their credit. Why are they to be limited to time, when they have a credit carrying them over a fuller period? Why should they at the end of 26 weeks be denied the right of benefit for a longer period? Under no circumstances, stamps or no stamps, any number of stamps or few stamps, they cannot if unemployed for 52 weeks have more than 26 weeks' benefit at 15s. per week.

I seriously suggest that this Bill, while, on the face of it, appearing to promise much, is a will of the wisp, a misnomer. When the fourth special period was instituted, it was estimated that it would cost £140,000,000 to run it from November, 1920, to the 1st July, 1923. That estimate will not be reached. It will not be necessary to absorb the £30,000,000 which this House gave the Minister power to borrow from the Treasury. That saving has been effected by cutting away the responsibilities that this House undertook on behalf of those who had not been able to make their provision for covenanted benefit. Early in 1922 the proportion of uncovenanted benefit to credit benefit worked out at 66 per cent. That is, 66 per cent. of the total outgoings in unemployment pay went for uncovenanted benefit, benefit for which the applicants had had no opportunity of making provision through their stamps. In January of this year Regulations were so tightened, and so many have been excluded from benefit, that of the total paid during one week in January only 16 per cent. was uncovenanted, Therefore, from early in 1922, 66 per cent. of the total expenditure was free benefit. On 23rd January last, by Regulations and exclusions, that percentage had worked down to 16 per cent. That justifies me in saying that under the process of tightening your Regulations in order to save the revenue available for the Fund you have wiped out from benefit no less than 500,000 persons whom the country believes to be entitled to draw benefit during this period of stress.

I want to know from the Minister of Labour how it comes about that the description of the principal Act is not good enough for entitlement to benefit. That description is that the person is capable of and available for work but unable to obtain suitable employment. 7.0 P.M.

What are the conditions the person must fulfil now before he can have free benefit? There is nothing set out in this Bill or in any Regulation. The Regulations vary week by week. I saw one this morning, which was only sent out last week, which alters the terms of entitlement to benefit from the Unemployment Fund. What is to be the standard? Can we not ask that the Minister of Labour, when the Bill is promoted, should say, "What I propose to do is to set out the terms, which will be well understood by applicants, and to which they must conform before any entitlement to covenanted or uncovenanted benefit can be accepted." Why not do that? Instead of that, applicants go and appeal to the local employment committee. The committee hears their case, and refuses it. The applicants appeal against the local employment committee, and then the referee 'refuses their appeal. All the time, running through that, is a circular to the Labour Exchange men; a circular to the independent chairman of the employment committee, who is usually a lawyer, and another type of circular to those representing the workpeople and the employers on the employment committee. There is a different circular to guide the referee or umpire when these things come up before him. There you have got these poor individuals, without an income, not having been able to provide an establishment claim by right of stamp, being barracked about like that, week in week out, and eventually giving it up, not understanding what it is that is expected of them 'before they can get the money. Yet the Government come here, and say that these are generous proposals. They age backed up by the ex-Minister of Labour. "This is the continuance of my policy," he says:


Hear, hear.


"The one that I initiated. It is a continuance of the right policy." The right hon. Gentleman talked like this. "Oh, yes, the storm is breaking; we are leaving it behind. We are sailing a charted course. There are calmer waters ahead. There is a little lamp behind the great clouds that will light us on our way all right." Is that the right kind of description to give? Is that of any value as a solace to make up for the empty cupboard? Is that of any value to starving men and. women? The Government, by their Regulations, as soon as they get a man out of his free benefit, get his wife and kiddies out also. Not only do they rob a man of his 15s., but they take away the 5s. which was allowed his wife and the 1s. allowed for each one of the children.

The Government are not broad, they are not generous in this matter. It is insulting to say you can, have it, while at the same time you have the knowledge that not more than two-thirds of your unemployed citizens can establish a right of entitlement under your Regulations. The right hon. Member for the City of London (Sir F. Banbury) need not be afraid that this money will not be paid back. You are borrowing from the Treasury something to help the man who is successful in establishing his claim. You must remember, however, in regard to those whose claims you wipe out, that the account is going to be against the man, the woman, or the young person to whom you refuse benefit. In effect, you say: "Whilst we are borrowing this money, none of which we can afford to let you have now, it stands on your debit side. You can work two hours. During the first two hours you work, the first charge on your income must be the payment towards wiping out this deficiency." If a man gets 9d. an hour or 1s. 6d. an hour, half of the first hour he works has to go to meet part of the obligation that is totted up against him, while, at the same time, you have refused him any benefit at all, or his wife.

Therefore the right hon. Member for the City of London need not be afraid It is like the case of a man, down and out, who is lent 6d. by his fellow-man, and is told, "I know you are hungry, old chap, but I want this 6d. back the first hour you work." The average man would not do that. He would say, "No, old chap, I cannot afford to give it to you, but pay me back when you have recovered your strength and after you have been able to make some provision; it will not be the first charge." Here, however, the State comes along, and says, "This will be the first charge." What is the proportion paid by the State? It is entirely misleading. The second paragraph of the Memorandum says: The State contribution after the end of the deficiency period is to he the same as in the Unemployment Insurance Act, 1920; namely one-fourth of the joint contributions of employers and employed, instead of the present proportion of approximately one-third. Just see what that is. The State is the third of the three partners to this trans action. There is the workman and the employer. The latter, in fixing the wages, takes into account the fact that he has to pay 10d. a week for his man, and he will adjust his wages in accordance with his responsibility. The man pays his 9d. a week. The third partner, the State, has all the management, makes all the rules, and either gives or refuses benefit. No trade union would dare to act like that. You talk of the tyranny of trade unions, but you say, "No, it is my right; I am an autocrat; I am the Labour Minister, and I sit here and make my regulations. I can make the regulations and wipe you out of benefit, although you pay." Having all the machinery under its control, and being the third partner, the State pays as follows: The employer pays 10d., the workman 9d., and the State 6¾d. Is 6¾d. a third of the total contributions? It is not. It is more like one-fourth of the total contributions at the moment. Yet the State is the third partner. It does not call the workmen in to elect a committee to confer with it as to what are the most humane regulations in accordance with the inflow of contributions and the Government's borrowing powers. The Government consults no one except the House of Commons. The right hon Gentleman the Member for the City of London admitted that he did not konw anything at all about the Act. I will be generous, and say he admitted that he did not know much about it.


What I said was, I did not know very- much about this Bill, not the Act. This is not an Act.


The right hon. Gentleman will know less about the Bill in its operation when it becomes an Act. This is the skeleton, which will be clothed by the Minister of Labour. The right hon. Gentleman can dress it and' redress it, just as he likes, to suit his passing fancy. He can make fashion plates of it, of differing types, just as he desires. When the State gets back, after clearing the deficiency period, it will not pay one-fourth, only one-fifth. I think—this is where I find fault with the Financial Resolution—the State ought to pay one-third of the total. If it is 9d. apiece, let it be 9d. all the way round. Then the fund will be fairly safe. Hon. Members should not go away with the idea that this Bill—as appears on the face of it and from the well-chosen language of the Minister of Labour—is going to provide 44 weeks out of 50. There will be 500,000 people who will never get past their first 12 weeks.

I do not know whether the Minister of Labour is going to reply, but there are some figures which ought to be known. I refer to the weekly outgoings in unemployment benefit; to the number of insured persons—not their dependants— and to the number of applicants. I have said the total was less than 1,000,000, yet the Government speaks of 1,340,000 persons signing. The difference between the two figures means that 340,000 of those signing are not getting any covenanted or uncovenanted benefit. Of the single people, the Government has wiped out not less than 130,000 or 140,000. They have ceased to sign. Counting those people, you are well on the way to 500,000 people who will not benefit by this Bill, when it becomes an Act, unless you can be more generous in your interpretation of the qualifications of entitlement. If you do that, and if what is expected of a person be made plain and understandable, I should say it would be a good thing to carry on for 44 weeks out of 50 whilst you are preparing for the more permanent Measure to take its place. Even following on the second period of 12 months, with the three months' extension up to July, you are only allowing 26 weeks. Why should not a man or woman with sufficient statutory credit to carry them on for 40 weeks not have the 40 weeks until they exhaust their right, instead of being limited to 26 weeks while the other is carried over until some other period? While we shall reserve to ourselves the right in Committee to obtain an improvement in some of the Clauses, which are bound to mislead those who are looking with greater hope to this Measure, at the moment we shall let it go to the Second Reading in order that we may see to what extent it can be remedied in Committee.


I wish to make one or two observations on this very important question, and to ask for the indulgence of the House in so doing. I hope that indulgence may be more readily afforded in that my remarks will be very brief and, I hope, to the point. I should like to associate myself, in a great measure, with the remarks of the hon. Member who has just resumed his seat, when he dealt with the subject of insurance by industry, not only for the financial reasons which he mentioned, but also for other practical reasons, such as the great difficulty of defining an industry. This difficulty is very great when you come to consider the very large number of craftsmen who are associated with different industries, such as fitters who may be associated with the textile industry, or bricklayers and others who may be engaged in industries other than their own. These difficulties arise particularly when you come to consider facts like this, that the manufacture of cotton when carried on in Bradford is generally known as wool manufacture.

Another serious difficulty in bringing about insurance on the basis of industries is that it would immobilise labour as between different industries and prevent free movement. At the same time I should regret if it were not possible to do something in the direction of insuring by industries, because it would place upon both parties in industry a great measure of responsibility in conducting their own affairs, and also because I believe that industrial insurance could be conducted by both sides of industry, including the trade unions, more efficiently and more cheaply than it is at the present time. The right hon. Gentleman, in moving the Second Reading, said he would like to regard many of the intricate measures which have led up to this Bill as past history for the purpose of this discussion. There is one provision which I am sure all concerned will be very glad to regard as past history. That is Section 7 of the Act of 1920, which the Government propose to modify by Clause 5 of the present Bill. This modification will be welcomed very heartily by all who, like myself, come from seaport towns where there is a large amount of casual labour. It affects, not only casual labour, but it affects also crafts such as shipwrights, whose times of employment are modified and controlled in many cases by the operation of the tides, which do not necessarily conform to the rulings of the Ministry of Labour.

The question of unemployment insurance involves two separate issues. One is security of remuneration and the other is security of employment. This Bill does something, though not a great deal, in reference to the first point, but it does nothing with regard to the second. For that reason, although I support the hope expressed by the other hon. Members that the Bill may pass a Second Reading without a Division, it cannot be regarded as a satisfactory Measure or even as one that is intended in any way as a permanent remedy for unemployment. I would like to emphasise strongly the argument of the hon. Member for Middles brough (Mr. T. Thomson) that the cost of a really adequate system of insurance would be far less than generally anticipated.

Neither this Bill nor any one of the Bills which have preceded it touches unemployment from what is a very important side, that is from the psychological side. It is not realised sufficiently that unemployment is not only a question for those who are out of work but that it is also a psychological question which affects men who to-day are employed, who never have been unemployed, who may never be unemployed, but who, nevertheless, have got in the back of their minds the fear that they may be unemployed at some time. We all know the kind of case. A man is engaged on a job of which he can see the end, and he does not see the next job following. He thinks of his wife and family and makes that job last, and I for one cannot blame him. It is impossible to estimate the cumulative effect of the holding up of effort due to this psychological factor, but this much may be said, that it is a very important factor in raising prices and decreasing output, and is consequently a very important contributory factor in maintaining that system of under-consumption in which so many of our people live, and which is, in itself, a definite cause of unemployment. Therefore I press the view very strongly that if this subject is tackled on broad, comprehensive lines the cost would be far less than is generally anticipated.

There is one suggestion which I have not heard mentioned in this House, and I think that I have either heard or read all the speeches on the subject of unemployment in this Parliament. It is that we should have an inquiry into the relation of credit facilities to unemployment. I have heard it suggested—I do not know who would be the actual body for carrying it out—that there should be a co-ordination and a consideration of the management and control of public works, in order that they might be distributed in such a way as to provide employment at times when the amount of unemployment was greatest. But I would like to suggest that it is more important to investigate—I know that it is a highly intricate and technical subject —the relations of credit supply and price fluctuation than it is even to carry out the very admirable suggestion with regard to the distribution of our public works. I think that if a committee of bankers and economists, and whatever experts may be necessary to deal with the matter, were to consider that question, they would see that there might be a. possibility of stopping these movements and trade booms which always give trouble before they reach their apex. In conclusion, I express the hope that this Bill may obtain a Second Reading without a Division, in order that some of the points which have been raised may be discussed at a later stage.


I wish to congratulate the hon. Member for East Birkenhead (Mr. Graham White) upon the delivery of his maiden speech. I have never listened to a speech more admirably delivered, with the facts marshalled more closely, and showing fuller knowledge of the constituency and the wants of the constituents which the hon. Member represents. I have sonic industrial responsibility in the same constituency because the river only divides us. It is difficult to approach this Bill without running the risk of repetition. This is the sixth or seventh Unemployment Insurance Bill presented to this House. The importance of unemployment insurance has been debated repeatedly it has almost become threadbare. This Bill, however, is an exception. I have never disguised my position. The right hon. Gentleman's predecessor (Dr. Macnamara) knows my hostility to any contributory Bill whatever. At the inception of the principle of unemployment insurance I took up the position that there should be a noncontributory Act, and that the State should take responsibility or that there should be a national tax upon industry to put the burden of unemployment on all the industries. I have had to accept what we could get, but, like Oliver Twist, I was always asking for more. Therefore I would like the right hon. Gentleman to understand that while accepting the good parts of this Bill, on principle I come to bury Caesar, not to praise him. Of course that is no personal reflection on the right hon. Gentleman. My main protest against unemployment insurance of this character is that all these Unemployment Insurance Acts, Factories Acts, Compensation Acts, Employers' Liability Acts are framed and discussed and passed in this House on the basis of affecting men who are probably employed all the year round. I know that the right hon. Gentleman will smile when I introduce King Charles' head again, but I am unrepentant, and again I am going to call attention to the position of the casually employed man. He seems to have been fated to be the Lazarus of legislatures, not content but compelled to wait for the crumbs that drop from the legislative table. He was excluded from the Factories Act. It never operated with respect to the casually employed man at the dock until 1904. He was excluded practically from the Workmen's Compensation Act. The docks, but not the ship, were included in the Factories Act, and when the Workmen's Compensation Act was introduced it was discovered that the port side of the ship, which was tied to the quay, was a factory, and the starboard side was not a factory. Let me give an instance. The man driving the winch on the deck for those working over the side of the ship and on the quay is, as to his left band, in a factory, and as to his right hand he is outside a factory. Under the then law such men had no protection, because the law provided compensation only for men who were employed on a permanent basis.

My one objection to this Bill is to be found in Clause 5. May I congratulate the Minister of Labour upon having at last recognised the necessity for relieving the iniquitous inequality of the old Act, as affecting the casual man who has no permanent employer, but has many employers during the week? Without undue egotism, may I claim to have succeeded in influencing the right hon. Gentleman's mind in that direction? As I have pointed out many times to this House, men may work one day in the week and be idle the remaining five days, and under the existing Act they are disqualified from receiving any benefit at all They may work only a few hours, or they may work on the Saturday afternoon at the end of the six days. This Bill to some extent modifies the iniquity. Nevertheless, there are still some flies in the ointment. Clause 5 says: Any three days of unemployment within a period of six consecutive days shall he treated as a continuous period of unemployment, and any two such continuous periods separated by a period of less than three weeks shall be treated as one continuous period of unemployment, and the expression continuously unemployed ' shall be construed accordingly. May I again submit that the casually employed man at the dock has only a 5½ days week? At dinner time on the Saturday, the week, so far as day work is concerned, is ended, and a man commences overtime. Unless the right hon. Gentleman interprets Sub-section (2) of the same Clause as meeting that difficulty, the three days period will not benefit the casually employed man. We want carefully to consider that point. There is another point arising out of the Clause. There are such things as holidays—Good Friday, Christmas Day, and so forth, declared national holidays. There is no break in time and tide. The seven days of the week are working days, so far as the shipping industry is concerned. When the holidays come, when Easter-time comes, because of the little extra pay time and a half for tank Holiday, and double time for Good Friday and Christmas Day—men may be willing to work. But the employer decides to shut down, and the interpretation has been that these days do not count in the qualifying period. Let me pay this tribute to the right hon. Gentleman and his colleagues. Notwithstanding the most complicated nature of the last Act, in every case that I presented to him all possible effort has been made to meet the situation. But the existing law would not allow of this being done. Good Friday and Christmas Day are being interpreted as not idle days because they happen to be holidays. There is no holiday at the dock.

Take the case of Sunday. The right hon. Gentleman very faintly suggests in Sub-section (2) that such a period may be inclusive or exclusive of Sundays. I hope that it will be inclusive. The reason is, perhaps, against myself and against individuals of my own organisation. Under the existing law a man may be idle for the whole six days of the week and qualify. He can go to work on Saturday midnight and continue till Sunday midnight, and for that time he can earn a full week's pay. He can then be idle the following week and qualify for unemployment benefit for two weeks. That is an absurdity which is quite Gilbertian. The present Act was never intended to apply to the casual labourer. The right hon. Gentleman pointed out that the provision was lifted bodily from the National Health Insurance Act, which was meant to apply only to those who were employed permanently. Without warning it was suddenly dumped on this House by his predecessor as applying to everyone. From practical experience I gave a warning at the time. I was told that no legislation could legislate for sections, but must legislate for the whole. I am glad to see that that opinion prevails no longer, for in this Bill we have the introduction of a very generous modification —the principle is at least admitted that the iniquity now existing can be met in some way.

My next point is a somewhat difficult one for the right hon. Gentleman to take into consideration. This Bill does not meet the case of what I call the bottom dog. Half days are not included. There are men who never get more than a couple of half-days of work a week. Under normal conditions there are men who, perhaps owing to their physique, are so situated. The casual dock labourer bears the whole brunt of bad times in other trades. The docks are the dumping ground of the unemployed of every other trade. No questions are asked. A boss looks at a man and thinks that he is physically strong enough to do the donkey work required of him. He does not ask for any character. These labourers are the flotsam and jetsam of industry. They get a half-day's work to-day, an odd half-day to-morrow, and perhaps another the day after. But if they get only one half-day in the week they will be disqualified for the rest of the week and will have to pay their full contribution to the State. Even out of 5s. 6d. earned in the week their card is stamped.

Another point that the Bill does not, deal with is this. A most iniquitous and dishonest system is growing up. An employer wants some work done. A man is picked to go to a job. The foreman is instructed to examine the man's card, to see whether he has been employed by anyone else during the week and has his card stamped. If the card is not stamped the foreman will not employ him. The idea, of course, is that if the card is stamped the employer saves the amount of a contribution for that week That is not the worst of it. There are, in dock phraseology, men known as hobblers knocking about. They purchase stamps from the post office, and they stand by, knowing probably that a man seeking work has not been employed for the first or the second day of the week. They sell him a 9d. stamp for 1s. in order that the man can put it on his card and get the chance of employment. There is no protection against such practices. I suppose the Minister of Labour could not afford protection, because he had no knowledge of the procedure. I give him the information now. In Committee my colleagues and I will endeavour to frame some kind of Amendment which will deal with highway robbery of that kind.

I am sorry that the right hon. Baronet the Member for the City of London (Sir F. Banbury) is not here. I had intended, in his presence, if possible, to deal with his interjections. The one thing exercising his financial mind to-day was "What is it going to cost?" I have sat in this House for some years watching the right hon. Baronet supporting or opposing the expenditure of money. I never heard him object to the payment of £60,000,000 to the railway companies. Not a word of protest came from the right hon. Baronet in regard to that money, yet it will never be paid back. It has gone irrevocably. If the right hon. Baronet were here I should also remind him that I never heard his voice raised in protest, either in the House or out of it, against the reduction of wages and the cost it involved to the general worker in this country. So far from his voice being raised in protest against the reduction, I think the contrary was the case, yet it meant to the general workers of this country £6,000,000 a week, or £310,000,000 a year, with the economic position just as bad, or nearly as bad, as it was during the War. The right hon. Baronet and those who share his views have no conception of what this means, because they have never had experience of the conditions of the men whose cause we on this side are advocating to-day. We know and we speak from experience of this modern Autolycus, this picker-up of unconsidered trifles, the flotsam and jetsam of the commercial tide. Ebb or flow, it does not matter to him. He is tossed about between the two. A day's work or half a day's work is all he seeks, and the only alternative for him is to become a chronic tramp and the end—what? A pauper's grave. The only noise he makes in the world is when, in the words of the poem, they Rattle his bones over the stones, He's only a pauper whom nobody owns. Certainly the right hon. Gentleman the Minister, in this Bill, does not own him, but in spite of the difficulties and the obstacles which have been suggested, if. I am fortunate enough to get on the Committee, I shall during the Committee stage bombard the right hon. Gentleman with instances of the injustice of his case.


I should like to join with my hon. Friend who has just sat down in expressing our congratulations to the hon. Member for Birkenhead (Mr. Graham White) upon his contribution for the first time to our Debates. The hon. Member for St. Helens (Mr. Sexton) has spoken, as he always speaks in this House, in sincere and picturesque phrases on behalf of the casual labourer, and many of us are glad that he concluded by saying that during the Committee stage he would make it his business to suggest such improvements as occurred to him, in order that that very hard case might be better dealt. with The first observation I should like to make is that there appears to be general agreement that this Bill should be given a Second Reading and, indeed, I think some such provision as it contains was in the circumstances inevitable. In spite of that, however, it is well that we should realise that this is mere hand-to-mouth legislation and does not really solve the problem. It is carrying on, for a short additional period, provisions which themselves were quite temporary and which became necessary, as we must all admit, because of want of foresight and failure to provide against the difficulties which now confront us, earlier than we did. The Minister gave a little history of unemployment legislation, and I do not touch on that except to make one single point. The original legislation of 1911 was unemployment insurance in the true and proper sense of the term. It was a Measure based on a very careful estimate and calculation of the elements which must go to make up any sound insurance scheme. These are three in number. First, the premium to be paid second, the risk to be covered; and third, the benefit to be conferred. So successful was that calculation—which the House will note was made, not in a time of bad trade, but was made as such legislation ought to be made, in advance, as a provision against bad trade which might hereafter come—that if I followed the figures right, those who were compulsorily insured under the Act of 1911, numbering between 2,250,000 and 2,500,000 insured persons, have built up a fund which actually—


There is also the Act of 1916.


I am speaking of the original Act and, of course, there was the extension in 1916. I am referring to legislation before the Act of 1920. These insured persons have, as I say, built up a fund which actually has an estimated surplus of something like £22,000,000. That is carrying out the true principle of insurance. It is the essence of insurance as everybody who has considered the real nature of benefit schemes will admit, that you should gather in your contributions and form your fund in sufficient time to be able to pay your way. If I may be allowed to indulge in a personal recollection, I remember very well that when I was a Minister partly responsible far the Bill of 1911, a change had to be made in the Bill just before it was presented to the House in order to secure this very object. The original Act of 1911 allowed payment of benefits to begin on 15th January, six months after contributions began. If I recollect aright, the original intention was to begin the payment of benefits on the 1st January. Then it was observed, and it was just as well it was observed, that in Scotland 1st January is a convivial holiday. Were we to have announced to the inhabitants of the northern part of this island, six months in advance, that assuming they found themselves overtaken by sickness on the 1st January or unable to resume their employment, they would at once be in a position to draw benefits to which they had been contributing for the previous six months, it was thought the resumption of work in Scotland was likely to be extremely slow as soon as Hogmanay arrived. For that reason the date was altered to the 15th of January by which time the Scotsmen had gone back to work. I only give that illustration because it shows that if you are going to work an unemployment insurance scheme properly, it is of the very essence of such a scheme, that it should be set on foot in sufficient time. In a Debate on this subject at the end of last year, I pointed out that it was very unfortunate that extensions of unemployment insurance beyond the Acts of 1911 and 1916 did not take place rather sooner than they did. It was in 1918, while employment was still very good, that a most authoritative Committee recommended to the then Government: The necessary steps to this end should clearly be taken with the least possible delay. At this stage it is impossible to foresee how soon the problems of demobilisation may become concrete and urgent realities. Unless a scheme of general insurance is devised and launched at the earliest possible date, it may be impossible to avoid the disastrous chaos of unorganised and improvised methods of relieving distress. Everybody can see now that it is a great misfortune that those recommendations were not rapidly put into operation. By extending unemployment insurance in 1918 it might have been possible to get in such contributions from employers, workmen and the State, that when the storm burst in the summer or autumn of 1920, a large fund would have already accumulated. It is all the more satisfactory to know that as regards those who were originally covered by unemployment insurance, a fund of £22,000,000 had been accumulated before the storm burst. As I followed the speech of the right hon. Gentleman, what has happened since to the finance of the scheme appears roughly to be this. First, the £22,000,000, which was the result of contributions from employers, workpeople and the State under the earlier and more limited Acts, has been appropriated and applied to assisting a much wider range of unemployed than those who contributed towards accumulating the £22,000,000. We must remember, as to three-quarters of that sum, it was not State money at all, but the money of the people who had made contributions. Then there has been an exercise of the powers of borrowing which the Act of 1922 created to the extent of £17,000,000.


The Act of 1922 did not create but extended those powers.

8.0 P.M.


I do not know whether others will agree with me or not, but it seems to me that we are to be congratulated and the Minister is to be congratulated upon the fact that it has not become necessary to exercise borrowing powers beyond that figure. The right hon. Baronet the Member for the City of London (Sir F. Banbury) and others speak as though the situation at this moment exhibited a condition of extreme insolvency. I should like the House to consider whether or not that is a proper use of language. This is the true position: The whole system of State provision against unemployment, by way of insurance, has now reached such dimensions that there is a contribution coming in week by week to the fund of something not far short of £1,000,000 a week. At any rate, it is something like £40,000,000 a year. What has happened is, that an enterprise, which has an assured income not far short of £1,000,000 a, week, has been compelled to borrow £17,000,000. Looking at it as a matter of business, I cannot believe it is dealing fairly with the question to speak as though an enterprise with that enormous revenue were really in an insolvent and almost bankrupt condition because it had borrowed £17,000,000 out of maximum borrowing powers of £30,000,000. The Minister gave us some very interesting figures as to what the fund has been called upon to do since the storm burst in August, 1920. The right hon. Gentleman, if I followed his figures rightly, said that in the last two and a half years there had actually been paid out from the Fund under the head of unemployment benefit, in round figures, £125,000,000, and he told us that that sum might be broken up in this way, that £33,000,000 of it might be regarded as State contributions, £48,000,000 as employers' contributions, and £44,000,000 as workers' contributions. If I understand my right hon. Friend rightly, he does not mean—and he is very careful in his language; I do not think he said—that at this moment the £125,000,000 that have been distributed are, in fact, produced to the extent of £44,000,000 by the workmen and £48,000,000 by the employers. I understand the Minister to say that that is the way in which this £125,000,000 would be distributed, assuming that the £17,000,000 which have been borrowed from the Treasury had been paid back; in other words, the £17,000,000—this is the total extent to which the Fund may be regarded as having temporarily fallen short—which the Treasury have advanced is, so to say, spread rateably over the three parties, the State, the employers, and the work-people, and that, subject to that £17,000,000 being thus spread over, and composing a portion of the £125,000,000, everything else has, in fact, been produced by employers' contributions, by workmen's contributions, and by State contributions, as the case may be. If I have stated that correctly, I think it goes to show that it is possible to be too gloomy about this subject, and I do not think it is to the advantage of the State that we should deal with the whole tremendous subject of unemployment insurance as though it had utterly broken down. It has had to exercise a power to borrow to the extent of £17,000,000, which, considering the enormous figures we are dealing with, is nothing very, very alarming, and I understand the right hon. Gentleman to say that as soon as that £17,000,000 is paid off he has got provisions in the Bill which he hopes will put things upon their proper footing and basis.


Hear, hear.


I am very glad to find that the right hon. Gentleman agrees. While that is so, there is, I think, this criticism to be made, and this is the only point of criticism, if I may say so, in which I want to indulge. The hon. Member for St. Helen's stated, in his picturesque way, that he had not come to praise Cæsar, but to bury him. I am not quite sure who Cæsar was, but I hope I shall not be going outside the rules of order when I say that, at any rate, the "sexton" tolled the bell! The real criticism of this legislation, which I should like to urge upon my right hon. Friend is this. I do not myself complain that it is merely a temporary extension, because I do not think this could have been avoided, considering where we are now, but it does seem to me very unfortunate that we are having legislation passed again and again—I think there was some in March, 1921, some in July, 1921, some in November, 1921, always pushing three or four months forward—and we are more and more getting into the condition that we have not really got a sound actuarial scheme of unemployment insurance, on the one hand, which stands upon its own feet and pays for itself according to calculations made in advance, and, on the other hand, such supplementary assistance as, in a time of extremely grave depression, undoubtedly it is the duty of the State to provide. I think we ought, as soon as ever we can, to get these two things so far separated that we may be able to see what the State can do, and ought to do, under the head of unemployment insurance, and it seems to me that my hon. Friend the Member for Birkenhead was quite right when he said that, sooner or later, there would have to be some inquiry on two or three very big fundamental questions. The particular one he mentioned was the relations between credit facilities and unemployment. Another one, which, I am sure, the Minister will agree, it is really very important tot to be dropped, is this question of insurance by industry. Let the House observe how that stands at the moment. There was a Section in the Act of 1920—Section 18 or Section 20—which provided for schemes being brought forward for contracting out of the State's unemployment insurance scheme. It is, obviously, desirable that, having passed that provision, the provision should not be a dead letter. Now it is a dead letter up to the present.


There are only one, or at most two, contracting-out schemes.


I think it is, as a matter of fact, the people employed in insurance business, hut, apart from that one, substantially contracting out, bringing forward schemes by which a particular branch of industry would make its own arrangements, is for the time being held up, and it is held up by special emergency legislation, because—one can see the reason—of course, in times like these probably the Government did not feel that it was possible to allow a trade which might be able to make better terms for itself than the State is able to offer to get itself out of the general scheme and throw the burden on to other people. I can see the reason for that, but it is surely most undesirable that, by a series of temporary Acts which keep pushing the thing a few months forward, we should not be in a better way to reach some deliberate conclusions, based on sound principles, and therefore I hope very much that the time will not be much advanced before the Minister gets the replies, which I think he asked for at the end of last year, both from the National Joint Council of Trade Unions and the National Federation of Employers' Associations. He sent them an examination paper, which contained three questions, or three suggestions, and it is most important that we should have the views of those who know best as to whether this method of carrying out unemployment insurance is or is not a sound method. My hon. Friend just now pointed out some of the possible difficulties in the way. On the other hand, I think that, other things being equal, it is much to be desired that we should thoroughly explore, and if possible apply, this method of making industry really responsible for those who, as my hon. Friend the Member for West Middlesbrough (Mr. T. Thomson) just now said, are the casualties of that branch of industry.

We cannot do that as long as we go on carrying Acts of Parliament which simply push the matter forward for a few months, and I conclude by saying that I hope very much that the Minister may be right in his estimate that things are going to improve, because this method of temporary legislation again and again repeated—I will not call it stop-gap legislation, because the right hon. Gentleman refuses to stop the gap—tends greatly to confuse the public mind. If I may speak for myself, I think it makes it extremely difficult for a Member of the House of Commons to follow the details of the Bill, and the time is rapidly approaching when we really ought to have the whole subject surveyed, for the purpose of laying down on much wider lines and much more scientific lines the way in which the community is going to bear a burden which it is the duty of the community to bear, namely, the burden of the man who, through no fault of his own, anxious to find work, is for the time being out of a job.


I hope I may be allowed to associate myself with the tribute paid by the hon. Member for St. Helens (Mr. Sexton) and by the right hon. Member for the Spen Valley (Sir J. Simon) to the admirable speech which we heard from the hon. Member for Birkenhead (Mr. Graham White). May I also offer my congratulations to the Minister of Labour for the concise and clear way in which he presented this Bill to the House this afternoon. Whatever may be the opinions in any part of the House on the merits of the Measure itself, I am quite certain that everybody will admit that my right hon. Friend left nothing to be desired in his exposition of the Bill. Now I think my right hon. Friend will be very grateful for the speech of the right hon. Member for the Spen Valley. It was kindly, as was characteristic of the right hon. Gentleman; it was conciliatory, and I am not sure it did not give my right hon. Friend a very helpful lift over a very difficult situation, and if only in this House, on economic questions of this character, there were a little more of that spirit of co-operation between the Front Benches, we might do a great deal more in tiding over many of the difficult problems which face us in this House in the economic life of this country. There have been some very eloquent and very forceful denunciations of this Bill from the other side of the House, but in looking back upon the operation of the Act of 1920 and subsequent Acts, I think every hon. Member of this House will agree that no other community, following upon the War, has introduced similar legislation, and that no other community has so successfully tided over these grinding difficulties which have had to be faced after the War. We have passed in this country, since the Unemployment Insurance Act of 1920 was put upon the Statute Book, through a time unparalleled in our economic history. In spite of all the difficulties which have had to be faced—this stress of unemployment, this stringency in families, all the pictures that have been painted, in his picturesque and delightful way, by the hon. Member for St. Helens—in spite of all that, because we have had operative this system of unemployment insurance, to which the employers, the workpeople, and the State were contributory, we are to-day, from the point of view of our relationship between capital and labour, in the first place in the whole world.

My right hon. Friend, in moving the Second Reading of the Bill, pointed to the contributions which had been made respectively by the three parties to the unemployment problem to-day, and he quite rightly paid a tribute to the magnificent spirit shown by the whole of the wage-earning classes of this country in paying their proportion of the vast sum which has been expended during these past three or four years in carrying the country through these grave economic difficulties, but I would like to enter a word here for the employers of this country. The employers have, I think, been equally generous, have made equal sacrifices, notwithstanding the difficulties under which industry has had to be carried on, and have contributed their share to the success of this scheme, and I join with the right hon. Member for the Spen Valley in inviting my right hon. Friend to consider the possibility of coordinating all this scattered legislation in some way, so that there shall be, for the advantage both of employers and employed in this country, a. workable scheme, more or less continuous in character, which will not necessitate repeated and scattered legislation from quarter to quarter or from half-year to half-year in this House. I hope that my right hon. Friend will accept the suggestion in that direction made by the right hon. Member for Spen Valley. I would like to call my right hon. Friend's attention to the Memorandum to the Bill, curiously constructed from the point of style, and, I think, defective in relation to the Bill. I ask him to look at paragraph 2 of the Momorandum— The Bill proposes to make permanent the additional benefits payable in respect of a wife (or invalid husband) and dependent children, which under existing legislation (Unemployment Insurance Act, 1922) are to continue only until the end of the deficiency period ' of the Unemployment Fund. I hope my hon. and gallant Friend the Parliamentary Secretary, when he comes to reply at the close of this Debate, will make it perfectly clear what is connoted precisely by the use of the word "permanent" in that connection. I will turn for a moment to the very interesting and very moderate speech delivered by the right hon. Member for Platting (Mr. Clynes). All his speeches in this House are full of thought. They are always conceived in the spirit of helping legislative purposes, but I was disappointed this afternoon to find that, with all his criticism of this Bill, he had not put forward one single constructive suggestion of an alternative kind. The right hon. Member for Platting said that the legislation introduced in the first instance in the Bill of 1920 was only palliative, and was no real substantial solution of the problem of unemployment. I am exceedingly sorry the right hon. Gentleman is not in his place, but. I will put this to his colleagues on the Front Bench. What has the Labour party done during that period to present any constructive proposal to help get the country more effectively out of its difficulties since the Act of 1920?


Our Unemployment Bill of last May.


Your Unemployment Bill of last May! My hon. and gallant Friend the Member for Tonbridge (Lieut.-Colonel Spender Clay) said he was waiting with great anxiety for the presentation of a report which was being prepared, apparently by the Labour party, and he hoped from that to find some illuminating suggestion in the direction of developing insurance by industry. I say with very great respect that if the forthcoming report is as full of suggestions of a practical and workable kind as the reports that have been issued in the past, my hon. and gallant Friend will be grievously disappointed when he comes to study it. I do not mean in the slightest degree to be offensive to my hon. Friends opposite, but I submit I am entitled to call attention to the barren quality of the statesmanship exhibited in these documents in the past. The right hon. Member for Platting spoke very strongly on the fact that we had still this great number of 1,340,000 people out of employment. One can only ask him to reflect an what would be the condition of this country if these measures had not been introduced and continued in this House since 1920. I think if he went into the industrial districts to-day and asked those competent to express an opinion on the value of this legislation, he would find that the great mass of the workers are entirely in agreement as to what has been done through the introduction of these measures.

A good deal of play was made by the right hon. Member for Platting with the speech of the Prime Minister in Glasgow. Of course it is exceedingly easy, after a General Election, to make free play with statements of the kind, but what sort of speeches did many of my hon. Friends and right hon. Friends opposite make during the Election? What have they since done in this House and outside to give effect to any of those generous promises which they made to their constituents at the General Election? It would be much more useful if, instead of criticising speeches made at the Election, they showed in what way they were using their constructive capacity to achieve the ends which they hoped to realise by their policy, instead of criticising ours. I disagree entirely with my right hon. Friend the Member for the City of London. [An HON. MEMBER: "He is not in his place!"] I am exceedingly sorry he is not in his place, and I hope he will forgive me for making this observation in his absence. I say that the £22,000,000 which is said to have been raided from funds under former Acts, and the £17,000,000 which the right hon. Gentleman has borrowed under his borrowing powers, even if lost to this country, would have been a sound investment in carrying us through the period of industrial peace which we have had. It is worth paying a great deal to have secured, in the difficult times of the last few years, the industrial peace we have enjoyed. There has been an appeal made this afternoon for co-operation between employers and employed in giving full effect to this Measure. Speaking in some small way on behalf of the employers, we accept this Bill. We are prepared to do our best to make this Bill a workable Measure in the interests of the great mass of the wage-earning classes of this country. We see, of course, some points upon which a little more thought must be expended when the Bill goes to Committee, but, subject to that limitation, we are prepared to accept the Bill, and to do our best to make it a really helpful Measure to the people of the country as soon as it becomes an Act.

I cannot pass from this point without paying some tribute to the admirable work done during many years by my right hon. Friend the Member for North West Camberwell (Dr. Macnamara). I am sure my right hon. Friend the Minister of Labour would feel that this Debate was not complete if some acknowledgment were not made of the really valuable work he has done, and the splendid practical sympathy he has always shown in the interests of those who have to work with their hands in this country. I am sorry the Minister has not made any allusion to certain proposals that were made to him from the greatest city in this country, namely, Birmingham, on the subject of a possible combination be tween the benefit payments out of uncovenanted funds., and the payments made in the interim period by local boards of guardians. My right hon. Friend is entirely familiar with the substance of the proposal. He has had the opportunity of discussing it with Birmingham intellect, which, of course, is the highest quality of intellect in this country. I hope the right hon. Gentleman will allow the Parliamentary Secretary to say a word on that when he is replying to the Debate this evening. My right hon. Friend the Member for the City of London is certain that the finance of this Bill will not work. The fact that the working people of this country have subscribed £44,000,000 to these funds since the inception of this scheme proves, I think, that the Measure will ultimately impose no obligation on the taxpayers of this country, and the fact that the employers have provided £48,000,000 is further evidence in support of my contention that the Bill will effect no loss upon the taxpayer. I sincerely hope the House will give this Measure a Second Reading and that it will be discussed in Committee in a way that will really lay the foundation of a better understanding between employers and employed, which, Heaven knows, speaking from the employers' side, we most desire at this moment of our difficult and troublesome economic existence.

I feel very strongly on the question of insurance by industry to which reference has been made by the hon. Member for Birkenhead. It is one which will receive careful thought from the Ministers, but we all know that the question is bristling with difficulties. I think it has been suggested that the Employers' Federation and the Trade Union Congress General Council had been slow in giving their replies to the catalogue of questions submitted to them by the Minister. Believe me, however, in both cases these bodies have had very great difficulty, though they may have exhausted by examination their sources of information, in giving anything like helpful replies to the questionnaire submitted by the Ministry. This Measure is part of a great process in helping along the country in this most difficult time in our economic history. I trust the Measure will be passed into law quickly, and with such modifications as would improve it both from the point of view of hon. Members opposite, and from the point of view of those of us who on this side of the House represent the employers. I am quite confident that the Minister has as large a measure of sympathy with the workers as any Minister of the Crown in our past history, and that he will do his best in administering this Measure in the future to bring into closer relationship the employers and the workers, and to give the latter help and encouragement in returning to their self-respect as men who do not want to receive what are commonly called doles, but who desire work in which they receive remuneration. I trust this scheme will be part of that process of bringing us back to happier and better times.


An insurance system of the kind about which we have been talking was meant, as I understood it, more for short periods of unemployment and between times of the flow of work than for the present abnormal time. No person when the Act was first adopted thought that the time would come when we would be compelled to face a long period of unemployment such as that which is now upon us. The consequence is that these Measures are now operating in a way it was never intended they should operate. I want, in the first place, to criticise the contributions to be made payable by the workmen under the proposed Bill. I think, in view of the small wages now being paid to men engaged in industry, that these contributions are excessive, and I want, secondly, to suggest that the whole idea of asking workmen to pay by this method is bad.

After all, unemployment is not a problem of the shipyard worker, or the miner alone. It is as much a problem of the schoolmaster, or the Member of Parliament, or the landlord. Landlords draw rents from land, and they in turn pay no contribution for anything that arises from unemployment; yet the problem is as much theirs as it is that of any other worker. I, for my part, think that unemployment ought not to become a charge merely on those engaged in a particular industry; unemployment ought to be a State charge and ought to be noncontributory. Furthermore, might I say the Act is bad in itself? The Act, in dealing with covenanted benefit, has a totally different set of Regulations to when it is dealing with uncovenanted benefit. Why, if this money is a loan, as it is supposed to be, do not the same Regulations operate in the matter of uncovenanted benefit as operate in the case of covenanted benefit? A man who has stamps to his credit is affected in one way, a man claiming covenanted benefit has his case safeguarded in this Act, but a man who is not receiving covenanted, but claiming uncovenanted, benefit is governed by a totally different set of Regulations.

I have in my hand one of the latest Memoranda issued by the Ministry of Labour. You find there that the man who is claiming uncovenanted benefit is subject to a scrutiny that the man who is is claiming uncovenanted benefit, is subjected to. You find, for instance, in this Memorandum that a man can lose his benefit although he may refuse a. job at less than trade union rates of pay. If he claims covenanted, benefit, he is 'allowed to refuse a job of that nature, and yet retain his benefit. But under uncovenanted benefit he is not 'allowed that course. In this Memorandum issued by the Minister of Labour that power is taken away, and it is left to the Committee to judge entirely that point of view, apart altogether from trade union conditions. Then, again, there is a, Clause dealing with the three days' period, that three days in any three weeks, and so on, when the man is not entitled to any benefit at all. I want to suggest to the Minister that he will allow each day to stand by itself.

You have the precedent in the National Health Insurance Act, which allows each day to stand by itself within 12 months I suggest, in view of the inequalities that exist, and that a man may be idle six days in three weeks, and not be entitled to any benefit at all, that you should admit each day within a certain period standing by itself. Again I suggest, according to this Memorandum, that the Minister of Labour has too great a power. He has power, according to this Memorandum, to alter, or readjust, or remodel the whole business. There is one part of the Act in itself which deals with a greater or a less period. Under that part of the Act the Minister even extends the gap period to more than the period already, in vogue at present. He has the power there to make it a greater or less period, whichever he desires. There is another criticism I want to level at the. Measure, namely, that dealing with the period when times become normal again. This Bill is meant, if I mistake not, primarily for the period that we are in at this moment. Why, then, burden the Bill with something that appertains to a normal period?

If you are going to deal with the normal period you should redraft a, new Bill leaving out that part dealing with Part II. I suggest that that period ought not to have come under this Bill at all. These proposals deal only with 26 weeks' benefit. If a normal period comes round again a. man will only receive 26 wekes' benefit in a given year. That ought not to be included in a Bill primarily to deal with a period of undue distress. I have listened to the speech of the Minister of Labour, the right bon. Gentleman the Member for Spen Valley (Sir J. Simon), and tile right hon. Gentleman the Member for North-West Camberwell (Dr. Macnamara), and when I heard the ex-Minister of Labour reproving the Minister of Labour he reminded me of Satan reproving sin.

I would remind hon. Members that this is a problem which has not arisen since the War. Those who were in power in 1918 ought to have dealt with this problem in a much more constructive fashion, and they must share a good deal of the blame for the present condition of affairs. The hon. Member for Croydon (Sir Allan Smith) holds a most important position on the employers' side. I met him only a week ago last Friday, and he told me that unemployment was becoming worse and was likely to become even worse within the next few months, and worse than any period during the last past twelve months. My own union, which deals with a skilled trade, finds that trade is becoming steadily worse, and but for the fact that a large number of our young men are emigrating the state of unemployment would be even worse than it is now. The future holds out no hope, and this Bill cannot deal with the problem.

My outlook in this country is that you will never have anything less than 500,000 unemployed, and this Bill cannot deal with a problem of that character. Under the present Act a married couple are allowed £1 a week and. a single man 15s. How is the problem of the single man going to be solved, because 15s. will not keep him in anything like decency, and, will not keep him in a fit state to return to his work. For these reasons I feel tempted to go into the Lobby against this Bill. It is a miserable Measure which treats my class in a callous and brutal fashion, and treats life as being of no value. We remember your famous recruiting posters, and one feels annoyed now at the way our people are being treated. Men have been refused benefit under the most paltry and miserable excuses. Employment, Exchange managers have been insisting that the men shall bring notes from their foremen in order to show that they were really looking for work. If a man is not willing to proceed 20 miles from Glasgow to look for work he is not supposed to be anxious to find it.

This week I received a letter from a constituent of mine who had his benefits stopped because it is alleged that he committed a fraud. For eight weeks that man has received no benefit. No charge has been laid against him, and nothing is said against his character, and yet the manager refuses him benefit because of an alleged fraud for which nobody prosecutes. What you are doing under this Bill with your gap period is simply throwing the obligation on your local authority. It means that in Glasgow the poor have to foot the bill of the poor. Why should you treat the man who claims covenanted benefit in the same way as one claiming uncovenanted benefit? Why should you have a gap if the man is going to pay the money back again. I suggest that this Bill is bankrupt of statesmanship. To the last hon. Member who spoke, I would say that if the Labour party had been in power as long as hon. Members opposite, and this is all we could produce at the end of that time, then the Labour party would deserve the scorn that the people who have produced this Bill deserve at the present time.

Captain. MOREING

I was very hopeful when I heard that a new Unemployment Insurance Bill was going to be introduced that some really serious effort would be made to deal with the problem created by the gap period yin necessitous areas. I happen to represent a district in which unemployment is probably more severely felt than in any other part of the kingdom. I am referring to the tin-mining industry, which has suffered a period of unexampled depression during the last two years. During that period of two years these men have had no work at all, and they have been thrown on the resources of the world. It is really impossible for the Poor Law authorities in my district to meet their obligations, and I sincerely hope that the Minister of Labour in Committee will take some steps to deal with the problem created in areas such as those of which I am speaking. We have been told that this is a temporary Bill to deal with a temporary situation, but it purports to be a permanent Measure to deal with the unemployment situation.

Whatever we may think on the problem of unemployment insurance, whatever may be our own particular ideas on the question, we are bound to recognise at the present time that we have to deal with au exceptional question, and with a period of exceptional and unparalleled difficulties in the manufacturing and trading world. I would say to my hon. Friend who has just resumed his seat, that I think he was taking an unduly gloomy view of the situation, when he ventured to suggest that in future in this country we shall always have at least half a million unemployed. We listened with the greatest interest to what be had to say. We felt he was speaking on a problem which he knew intimately, and was making a most eloquent appeal to this House couched in great sincerity of language. But I venture to suggest that the problem is not so disastrous as he imagined. There is no doubt that, when framing the Act of 1920, the Government of the day attempted to deal with it as a permanent solution of the difficulty; but unfortunately, the unparalleled trade depression which followed knocked the bottom out of their calculations, and we shall probably be faced with two or three little Bills of this character unless the problem is attacked in a broader way or unless trade rapidly and materially improves. I should like to warn the right hon. Gentleman against going in for a scheme of insurance by industry. I have had experience of various schemes of that sort in various parts of the world. However seductive may be the voice of the charmer, however specious on the surface the proposal may be, it is by no means so easy to carry through insurance of this kind as some hon. Members suggest. Perhaps I went a little too far when I suggested that the right hon. Gentleman was considering such a scheme. I hope he will not listen too readily to the various enthusiastic Members who have schemes of that sort in their pockets or up their sleeves.


I have listened with very great attention to most of the speeches on the Second Reading of this Bill to-day. I agree with what has been said regarding the very large number of Bills that have been passed through this House. As a matter of fact, I think the total will work out at about one Insurance Bill for each six months in the last few years. Obviously it is desirable to deal with the business on really sensible lines. My experience has always been that if a trade union is constantly altering its rules, the members never know where they are. Here we are dealing with millions of people not on any voluntary principle. These people are not paying their contributions under the unemployment scheme because they like it. I venture to say that if a scheme were put before the country on voluntary lines, whatever may be the amount now paid per week, it would very soon drop to zero. I want the Minister to realise that in legislation of this kind, he is exercising a power unequalled in the history of past legislation. He has become in a sense a great dictator and a great autocrat. I shall never rest satisfied while legislation of this kind remains on the Statute Book of this country, so long as those who contribute these enormous sums of money have no say of any kind in their administration. The workpeople of the country contribute £44,000,000 annually. The employers contribute £48,000,000, and yet they have no more to do with the actual administration of these vast sums of money than the man in the moon. That is wrong. It is a sound logical suggestion that the people who pay the piper should call the tune. However, in this kind of legislation, the people who pay the piper have nothing whatever to do with the tune; all they have to do is to keep on paying. Therefore, I say the Act is wrong as it stands now, and I am inclined to think we shall never get on right lines as long as we continue on our present lines.

During the War many hon. Members of this House had experience of the methods devised to help the country out of its difficulties. There were many Committees then in existence—Advisory Committees. I suggest, with all sincerity, to the Minister in charge of this Bill that those Committees did help many Ministers over many serious difficulties. We are dealing with experimental legislation, and know it is impossible to foresee how far it is going to develop. I believe it will develop to such an extent that it will cover practically all the workers, and, whether they like it or not, the time is not very far distant when they will be gently invited to contract inside this Act of Parliament. It seems to me that these burdens which we are shouldering at the present moment are of such an enormous size that all those who labour should do their share towards meeting the difficulty. It is very pleasant, of course, for some industries where unemployment may be very rare not to take their share of the burden, but I disagree with that entirely. I think we are all entitled to pay our share. I will go a little further. There are large numbers of people in this country who, even in a time like this, when you have 1,300,000 or 1,400,000 workers unemployed, are practically contributing nothing whatever to the solution of this problem. Some of them, even, may be Cabinet Ministers. They make no contribution under the Act; there is no special tax upon them. It is true they may give a little voluntarily, but there is no charge upon them, and I should like to see them paying their share in the same way as anyone else.

There is another point of view I would like to put to the House. The contribution of the State in the present dimensions of unemployment seems to me to be very meagre. All said and done, that contribution amounts to £33,500,000. But what about the other people who contributed £22,000,000 which was saved during the period of good trade from the contributions of about 4,000,000 people. It seems to me that the State's contribution, instead of being reduced, as it is going to be, from one-third to one-fourth, borders almost upon meanness, and at a moment like this, when we are facing a degree of unemployment that is unexampled, it is surprising that the State should be casting about to get its contribution reduced. Some of the dodges that are resorted to in this kind of legislation seem to me to be mean in the extreme. With regard, first, to the contribution of the State, I say that that is mean in the extreme for meeting such an enormous problem as we are now facing. Another illustration is the introduction of the gap system. That seems to me to be one of the greatest frauds that could ever be perpetrated within the four corners of a Bill. People to-day in industry are making provision for unemployment benefit, not for relief from the boards of guardians.

The gaps introduced in this legislation compel a man, if he is to exist at all—and he cannot live on air; even a Cabinet Minister cannot do that, or a workman either—when you have these gaps of a couple of weeks, you have to visualise the situation of the man when his benefit terminates. He may have been out of employment for six, twelve or eighteen months; what is his position when the gap comes? It is the most difficult thing in the world to eke out an existence when he is receiving his benefit, but when his benefit is completely suspended, for however short a. period, his only alternative is to go to the board of guardians and ask for relief. That would he very repugnant indeed to me, and must be so to hundreds of thousands of men who, by this set of circumstances, are compelled to go and ask for relief. It is very bad legislation indeed, compelling really industrious, earnest, honest working people to go to the boards of guardians and ask for relief, and familiarising them with a thing that should be the last object in the mind of any statesman in this country. Do all you can to keep your honest, earnest, hard-working man away from the board of guardians. Surely that is pre-eminently the object of unemployment insurance. If that is not the object, it has no object at all. This Bill should be so drafted as not to force people either to go to the guardians and ask for relief or to go and seek employment at rates of wages that would be a scandal to anyone calling themselves decent-minded. It can only have one or other of these two effects, and you cannot dodge it. I think we ought to have some statement from the Minister en this point. The Labour party in this House is a serious factor, and we have a right to this kind of information. We ought to know exactly where lie is driving.

9.0 P.M.

With regard to the Fund, I know it is over-spent, but there could be nothing more futile than for the right hon. Baronet the Member for the City of London to suggest that the Fund is bankrupt. I should say that it is in a much more healthy condition than many large industrial establishments in this country. It is over-spent to the extent of some £.17,000,000, but that is not six months' contributions, and as trade revives larger and larger numbers of men will be paying in. On the present contributions it is obvious, to anyone who has paid any attention to the finance of the matter, that it will not. be very long before the whole position is turned completely round, and the Fund, instead of being overdrawn, will be paying in to its credit at the bank. Does not that indicate that the men who to-day are receiving uncovenanted benefit are in a sense only borrowing this money, and that they will have to pay it hack? They cannot escape that. It is not like being in a trade union, when you can drop out after drawing all your benefits and join when the funds are up again. You have these people fast there is no escape. That. is where the autocrat comes in. He does not permit them to escape. That line of reasoning should be considered a little more fully than it has been and, instead of imposing hardships upon these people, we should realise that, whatever they draw in existing circumstances, they will, whether they like it or not, whether they agree with it or not, willy-nilly, have to pay it all back and a good deal more besides. If there is any argument against the gap that is the argument.

I sometimes thought, in listening to the speeches that have been made, that the gaps were invented in order that bridges might be invented to get over them. It is a kind of thing that has been brought into existence without clearly understanding that the men who receive this money are only in a sense receiving it as a loan, and that every farthing they receive will have to be repaid. I welcome some of the improvements which the Bill contains, and I do not think anything is gained by using hard words to the Minister who is responsible for legislation of this kind. He has a good deal of pressure to meet from one side or the other in these questions, and it is only reasonable and right that he should give heed to those representations, and endeavour so far as he can in legislation to meet them. At the same time, I do agree with the suggestions that have been made that all this legislation should be brought together. Under legislation of this kind, no one can ever know where they are. The very speech of the Minister himself was frightfully involved, and I venture to say that there were very few people in the House who could really follow its intricacies. We are getting into very fine, theoretical points in discussing a small Bill such as this. I hope that, before we get much further, some Bill will be brought in which will bring all this legislation together, and will give us a scheme that will stand fire—legislation that will carry us through, not six months or 12 months, but a few years, so that the whole scheme can be put upon a really solid, effective, business-like foundation, which will redound to the credit of any Government that brings it in and will be a big measure of satisfaction to the millions of people who are forced to continue to contribute.


I only rise to put one or two short points to the Minister. I quite realise that this is the permanent manner of dealing with the standing problem of unemployment in normal times. Great relief works may be needed to deal with the economic depression due to the breakdown and paralysis of Europe, but, when that has passed by, we shall need in the future this system of unemployment insurance, because, so long as British trade depends on overseas markets, we are at the mercy of failure of crops in tropical countries, of political revolutions, of all the infinite number of causes which may bring about ups and downs of trade Against that normal unemployment and against those normal depressions, against the cyclical rise and fall of trade, I feel sure that the method of insurance is the right one., and that method, begun in a defective way by Liberal statesman before the War and perfected by the general co-operation of this House, will hold the field, and it is very important for us to get it on to right lines. I am not, therefore, going to deal with the details of the Bill except on one point.

I will confess to a heresy. In spite of what the Minister of Labour has said I remain unconvinced on one point. I think the local authorities might be able to use the unemployment benefit under the most limited schemes. I quite agree with all that the hon. Gentleman says about the danger of subsidising wages, and I am not ignorant of the evils of the old Poor Law. I very well remember an economist who, having made a study of that, printed his conclusion in capital letters. He said his study and his experience had led him to the belief that legislators had no need to under-rate their power for evil. He said there was no generation of men which Tory squires or well-intentioned reformers could not in the course of one generation convert into beasts. Therefore I am quite aware of that evil and of those dangers, but if the local authorities are confining themselves strictly to works put in hand expressly for relief, and are using on those works men directly employed by them, and are using this kind of employment as a means of testing the genuineness of applicants for relief, I do not really see the danger of combining this unemployment benefit with the payment of wages. The Minister of Labour said, "If you ventured on that dangerous course you might bring about a break-down of the contributory system." If this House has embarked upon the whole experiment of uncovenanted benefit, that is a far greater danger to the contributory system, and even if you are going to recover by subsequent contribution what has come through that system it seems to me that that is a far greater danger, and if you can swallow that camel I do not think it is really worth while straining over the very small gnat of this scheme. Therefore I hope the Minister of Labour will not be too pedantically precise, as I think, in rejecting these schemes which are brought forward by some municipal authorities.

The main point I wish to put to the Minister is to reinforce this plea for a general inquiry into the future of the Act. It is much more than a mere question of putting together all these various Acts. It is true that the Statute Book often reminds me of the floor of the House of Commons. It is about as much littered with Acts of Parliament as the floor of the House of Commons is always littered with stray Parliamentary Papers; but it is a comparatively easy matter to consolidate and put these Acts right. I agree that we ought to have had a number of Inter-Departmental Committees, but I think you want a much broader inquiry than that, carried out by men who are engaged in industry and represent different interests and so on—workers, employers and economists—on very broad and general lines. There are a number of points on which I suppose we have all got preliminary, rather than cursory, opinions, and I imagine we should all like to have them explored. I, certainly, should like to have them further investigated. There is at present, I believe, an Inter-Departmental Committee which is considering the question of combining the whole machinery of insurance against sickness and insurance against unemployment. I do not think that sounds a very hopeful method of procedure. I doubt if you could possibly administer unemployment benefit by means of approved societies. Approved societies are exceedingly valuable for their own purposes, but they are not industrial bodies, and though I understand the attraction of getting one book and one stamp and one card, and all the rest of it, in which all the contributions could be shown, yet I think you may spoil the system of the approved societies by trying to make that combination. Still, I should wish to see that explored.

I am not very much attracted now by the idea of insurance by industries. I agree that at the first glance it would seem desirable to get a system under which each industry bears its own insurance and contributes in proportion to the amount of employment in the trade, each industry thereby being encouraged to limit its own insurance, to regularise employment in it and to steady it by every possible means, but I think, if you look into it more closely, one sees the very great difficulties. It is true during the War the cotton trade bore the burden of its own insurance very successfully, but that was a very special case and it required, I imagine, the kind of action which is only possible during war time. There are very serious difficulties in demarcating industries. There would be great difficulty, I think, in providing for the necessary mobility of labour from one demarcated industry to another and you would have great complications, I imagine, through a man going from one industry, with one set of rates of contribution and benefit, to another and then coming back again. No doubt all the labour which is transitory, passing from one to the other, would get itself involved into inextricable entanglement of which I do not see the way out. If you had a system of insurance for industries special employment agencies, I presume, would be necessary for each particular industry and you would have a great deal of overlapping and a somewhat extensive and elaborate system. However, the matter has not been sufficiently explored and I hope a large Committee of this kind would do something.

I am rather more attracted by another scheme which has been put forward, though, again, I think this has not been sufficiently considered, but which has the great authority of Sir William Beveridge behind it. It proposes the revolutionary plan of abolishing stamps, books and the whole apparatus of the contributory scheme. It would throw the burden of unemployment insurance, like accident insurance, upon the whole industry, and it would be possible under a scheme of that kind, I believe, to get the advantages of insurance by industry, namely, to apportion the charge in each industry to the unemployment existing in that industry and to encourage employers in any particular trade to combine with the workmen to limit and diminish unemployment. That means the abolition at the contributory system, on which I cannot help thinking that there is considerable confusion in our minds. The contributory system is said not to depend upon a tax. Compulsory contribution for all the purposes of government is a tax, but a compulsory contribution for one particular purpose of government is not a tax. Both of them seem to me to have very much the same characteristics, and if you have your funds raised by a just and equitable system of taxation, I do not believe that the effect upon wages would be very different in the one case or in the other. I think we might have a scheme in which the individual workman would not contribute, and if he fell out of employment the cast of his unemployment benefit could be recovered through the Employment Exchanges from the employers and from the State contribution, without the whole of this complicated machinery of stamps, letters, and the keeping of accounts practically for each insured person throughout the country.

I should like to see what seems to me the most attractive form, a minimum noncontributory scheme, with a minimum benefit, and we might supplement that minimum benefit by schemes under Section 20 of the Act of 1920. I should like to see, not contracting out of that scheme, but a system of contracting further in. I do not want a special scheme under Section 18 of the Act of 1920, but I think we might have schemes under Section 20 in which employers and their employés might combine in joint industrial councils to work out a scheme for additional benefits beyond the minimum prescribed by the Statute. In addition, they might cooperate in devising an arrangement in each trade upon a voluntary basis for the diminution of unemployment and the steadying and regularising of trade. All this requires a very great deal more investigation and exploration, but I think it. is interesting, and it is the kind of subject which I should like this big Committee to explore. In dealing with an enormous scheme of this kind, it is extraordinarily difficult for anyone to think out all the reactions and all the implications, and after further consideration one might easily change one's mind. It is for that reason that I should like to see the whole matter further explored. The subject is of such vital importance, the sums are so huge, the influence on the lives of the workers of this country and on the home trade and commerce of this country is so great, that I do not think we could do better, while this Act is in force, than to have a thorough exploration by that responsible and authoritative Committee which I have suggested.


I have followed the remarks of the hon. Member for Derby (Mr. C. Roberts) with great interest, but I do not propose to deal with any points that he raised. I express great sympathy with the Minister of Labour. He seems to me in connection with this legislation to be in an unfortunate position, because of his association with a former member of the Liberal party, and also because of the fact that he has not given sufficient consideration to the foresight of the Liberal Government in 1911. It is very unfortunate for him that whenever he proceeds to deal with this matter of unemployment, the right hon. Member for North-West Camberwell (Dr. Mac namara) comes along and says that all the good things in it are due to the training he received when he was assisting in the kitchen while the right hon. Member for North-West Camberwell was in control. It is also a difficult situation for him that he has not yet exercised the great amount of foresight that was exercised by the Liberal Government in 1911. The right hon. Gentleman the Member for Spen Valley (Sir J. Simon) expressed the matter very clearly when he said that his Government was so much wiser than the present Government, or, at least, those in that Government who were responsible for insurance legislation were so much wiser, because in introducing their legislation at the last moment, they found out when Hogmanay took place in Scotland, and altered their Measure accordingly.

Although I sympathise with the Minister of Labour, that does not incline me to the view that this is a good Bill. It may be good from one point of view so far as he is concerned, and that is, that he proposes to take to himself very large powers in dealing with the people who are unfortunate enough as to be depending upon uncovenanted benefit. I do not like Subsection (3) of Clause 2, and the powers that the Minister is taking to himself. I represent a constituency in which, while there is a large area containing many comfortable people, there is a larger area in which the great mass of the people are suffering the most extraordinary miseries and hardships. I found on coming into this House that one of the first things that I had to deal with was the position of many people in that constituency with regard to uncovenanted benefit. I found that there were some 3,423 people who had applied for uncovenanted benefit. Of that number, 970 were rejected by the Bridgeton Local Employment Committee, mainly on the ground that they were not genuinely seeking employment. I want the House to realise what those figures mean. In a city like Glasgow, with nearly 90,000 people unemployed, with work quite an impossibility for all those people, one person in four was considered by that Exchange as not genuinely seeking employment. I can only put such a decision down to the fact that circulars must have been issued by the Minister of Labour for the guidance of the committee or the manager of the Exchange in dealing with these matters, warning those individuals that the uncovenanted benefit must be put at as small a. figure as possible.

If the Minister of Labour is to have wide powers, I want them defined in such a way that the poor people, in districts such as that which I represent, will obtain justice in this time of great hardship for them. The legislation in connection with unemployment is very complicated. While the Minister of Labour was giving us his historical reference, I heard an hon. Member on this side of the House say that it was very fortunate that none of his papers blew away. The hon. Member, I think, would like to have had the Minister of Labour sitting for an examination on the Acts he has to administer. Most of us in the House would feel somewhat shaky if, before being allowed to deal with this matter at all, we had to undergo an examination on those Acts. Yet these people whom we represent, who are unemployed and in this state of distress, are supposed to know so much of what is contained in this complicated serious of Acts. Accordingly. I do not like this Bill, because it adds to the confusion, and does not make it plain enough, to those of our constituents who are in the unfortunate position of being unemployed, how they will he able to obtain the benefits to which they are legally entitled.

There is another Clause of the Bill to which I would like to draw attention. Clause 9 allows the Ministry of Labour to deal with the case of an individual who has received more benefit than he ought to have obtained. I do not like Clause 9 at all, because of the way in which it allows the Ministry of Labour to take from the individual who has received too much, even although he got it in good faith. The Ministry is going to deduct it from future payments due to him.


It is only when it is in bad faith.


The Ministry, finally, is going to be judge of whether it was in good or bad faith. If there is a defect in the administration, the onus should be on the Minister and on his Department to prove that the individual received the money in bad faith. As the Bill stands, the individual has to show that he acted in good faith when he received the benefit. If the Department cannot con- duct its business properly, it is rather hard on unemployed workmen that they should be put into this position. We have to remember that this legislation is so complicated; it is a patchwork. It reminds me very much of an Old Testament character, whose name was Joseph, and whom we remember as the lad who had the coat of many colours. The legislation is complicated, yet the individual who is in receipt of benefit is to be put into the position, if he has received a few shillings extra, of showing to the Ministry that he did not really know he had received too much under all these series of complicated Statutes. We have patchwork legislation for dealing with unemployment, and, in so far as it has ministered to the needs of these people who are unemployed, it has only sufficed to keep them in life. It has also given to so many of them a. patchwork appearance.

Many people—I think the Minister of Labour himself and many other hon. Members—were inclined to think that there was something very generous about the provision made for the unemployed in our country. It has been said that in no other country is there legislation to compare with it. I do not know if any other country has had so much unemployment, after such small wages, as we have had in this country. I know on a previous occasion it was said that in America there had been a greater amount of unemployment, but in America, the workers had obtained so much higher wages than they get in this country that, when the unemployment time came, they were more ready to meet it than are our people. I want the House to look at this problem of unemployment from the point of view of the man who has been out of work for a long time. The tendency with regard to the individual who has been out of work for a long time is to examine very closely into his activities during his idle days—how many gates did he approach in his search for employment, and what documentary evidence can he produce to show that he has been hunting round looking for a job? You do not give an unemployed man so very much. After many months of unemployment, and the receipt of the miserable allowance under these Acts, an unemployed man and his wife and children are in a most wretched condition. An individual in such a condition is not one into whose circumstances you should examine so closely.

A decent provision for unemployment would give a larger grant, according to the longer time a man is out of work. An individual who has been out of work for a month is in a far better position to deal with the circumstances of his household than a man who has been out of work for a year. That ought to be taken into account in dealing with this problem. I want the House to look at the business from the point of view of the man who has been out of work for quite a long time, and who finds himself being cut off and receiving no uncovenanted benefit because it is said that he is not genuinely seeking employment. Such people in the main are not educated people. They are not people who are able to state a very good case for themselves They go before a committee, and they are confused and turned down as not genuinely seeking employment. I want greater generosity from the House in dealing with those people. There has been much congratulation to-day on the fact that this fund is almost solvent.

The right hon. Member for the City of London suggested that it never would be solvent, and right through there has been the assurance given to him that it is going to be all right, that there is going to be no doubt about the solvency of the unemployment fund, and I agree with those who say that. So much of the money is money which the working-class people have got to pay that for that reason the Government will see to it that this fund will be kept in a solvent condition by the workers being compelled to pay. I would have liked to say to the right hon. Member for the City, who, I regret, is not in his place at present, that I would have far greater doubt about the solvency of the guarantees given under the Trade Facilities Act. They are given to people who are not unemployed; they are given to the business people, to the capitalist section of the community, and I think that that section will require a great deal of watching with regard to those guarantees.

The Minister of Labour suggested that the storm was about to pass, that the sun was going to shine again, that everything was going to be nice and bright for everybody, and he pointed to the figures in connection with unemployment, and showed how they were coming down. I would ask the Minister of Labour if he took account, in assuming that there is a decrease in the number of unemployed, of the number for whom employment has been provided under the Trade Facilities Act, and of the increased employment in the mining area at present, and the employment under the various schemes set on foot by the Government? If the numbers who have obtained employment, which is not the outcome of the natural working of the industrial machine, but something produced owing to those extraneous Measures, were added to the numbers on the live register, is there really any decrease to suggest to us that we are going to get back to a better state of things? He referred to an investigation by certain gentlemen with whom. was the hon. Member for Dover, and he spoke of their conclusions. If I remember aright, one of the conclusions to which they came was that the number of unemployed to-day is going to be the normal number of unemployed in this country in days to come. We have got to recognise that unemployment insurance, while it deals with the provision of palliatives for this dreadful state of affairs, in connection with so many hundreds of thousands of our fellow-citizens, does not provide the remedy of altering things so that we should not have any unemployment problem. To my mind it is far more important to get down to that than to consolidate all the Acts in connection with unemployment on the Statute Book.

I would ask the Minister of Labour to look into those facts in connection with men being turned down as not genuinely seeking employment, and if he does not consider that 28 per cent. shows there is something radically wrong in the administration in this connection, and will he see to it that those who have been so badly treated in the fourth period should have an opportunity for their cases to be reheard, so as to be able to take advantage of the extended period? I want to see a great amount of sympathy in connection with these Acts which will express itself in practice. I know that some hon. Members are rather sick of sentimental feelings and sick of the gush about sympathy and so on. Very often, when I think of what that sympathy leads to in practice, and how little it means for the class I represent, I am reminded of the amount of sorrow that a wife had for her husband who was dying. The poor man was just gasping, but he managed to signal to his wife to come to him. He whispered to her to get him something, and he said, "I am afraid, Jean, I'll be awa before you come back." She looked at him and said. "Don't say that, John, don't say that." "Ah, Jean," he said, "I'm afraid I'll be awa before you come back." "Weel, John," she said, "if you feel you're so far gone, blaw oot the candle not to waste the licht."

When I hear expressions of sympathy from the other side, for the needs of the working-class people and of the unemployed, and of the men who gave their services on the battlefields for their country; I am inclined to think so often that the Government may say to them, "If you are going to drop out, blow out the candle." I make a closing appeal in connection with the unemployed because of the fact that I get hundreds of letters about ex-service men who are unemployed. It is a most distressing thing that men who have given their service in the War should not be able to get benefit, and that they should be regarded as wastrels, not genuinely seeking employment. I want a. larger amount of sympathy in the administration of the Act, and I want a guarantee that we are going to get reconsideration of those cases that have been turned down in the past so that we may feel that under this new legislation our people are going to get a larger measure of justice than they have ever obtained in the past.


The House will realise that the feeling expressed by the hon. Member who has just spoken, and the statistics which he gave, require serious consideration by the Ministry, because the feeling expressed is widespread throughout the country. Up and down the country, in every corner of it, there is indignation at the failure of the Ministry of Labour, at the failure of this unemployment scheme. We have been told of the very large amount spent in benefits under this scheme. Those amounts do not seem to me to be very large in comparison with the magnitude of the evil. What we have not been told is that more than one-third of the unemployed, according to the official statistics, are outside the benefit for one reason or another. The Minister of Labour told me, in answer to a question, that the estimated number of unemployed wage-earners at a recent date was 1,670,000. At that time the number on his registers was 1,300,000, and the number of people to whom he was giving benefit was less than 1,000,000. Consequently, for one reason or another, not always the fault of the Ministry, more than one-third of the people who are unemployed are actually not in receipt of benefit under an Unemployment Insurance Act which purports to cover nearly the whole of the wage-earning class. If this goes on very much longer—there is reason to believe that the gap has been increasing —it will not be an Unemployment Insurance Act but an unemployment disinsurance scheme. It is that to which the Ministry of Labour is steering.

I do not want for the moment to deal with the general principle of this Bill, because it is only a. continuing Bill, but I must point out that it continues some very bad features which have led to this disqualification of more than 33 per cent. of the unemployed people. For instance, there is the three weeks' gap. I fail to understand why that gap was invented. There must have been some reason in it. Much as I have known about the Treasury in the past, I do not think that it could have been nothing but a Treasury provision to save money for those weeks. There must have been some policy in it, but for the life of me I cannot understand what the policy is. There is no saving to the country or to the community. These men, hundreds of thousands of people, who suffer by the gap, have to be maintained, and they are maintained. Any economist would say that there is no saving at all. There is no moral good which I can see in cutting off the subsistence of these men for that time, after you have admitted that they are qualified in every way. In fact, there is a terrible moral harm, because: you drive them to the Poor Law. If there is anything I thought we had learned from experience, it is that you had to preserve the abhorrence and shrinking of the British workman from the Poor Law. It is like the shrinking of the young man from the prison. Once he has gone to prison he finds it is not such a bad place after all, and you have lost your weapon. Once a man goes to the Poor Law and gets relief you have lost the protection that lies in the shrinking and abhorrence.

Here is a Government of the twentieth century deliberately arranging to send several hundred thousand men to the Poor Law and telling them to ask for relief, in a Measure the purport of which is to save people from having to go to the Poor Law at all. What is the sense of it? Many years ago the answer to those who asked for relief was. "No outdoor relief; come into the workhouse, wife and children and all." That is not done now. As a matter of fact, there is not a board of guardians in the Kingdom which, if it knew that a man was to come into an income in three weeks' time, would tell him to break up his home and come into the workhouse with his wife and children for three weeks. Unfortunately we have not the Minister of Health here. He does not tell the board of guardians to do that, but recommends them to give outdoor relief. What is the consequence of this three weeks' gap? We have processions up and down the country of unemployed workmen who have been driven to the relieving officer to get outdoor relief for three weeks. What is the good of it? It is no use whatever. Economically it is not merely useless to shift the burden from national to local funds; it is much more than that. On national funds it is more or less equalised all over the Kingdom. But this burden of unemployment is heaped up in a small part of the Kingdom, so that under 40 unions out of 640 are bearing twice their share of the burden, and 600 are bearing much less than their share of the burden. It is upon those unions, which already bear far too large a share of the unemployment, that you are deliberately imposing this new charge by the gap. It cannot be justified on any grounds whatever.

It is a disgraceful provision, and I hope that the Minister of Labour will allow it to be rejected in Committee. I defy the right hon. Gentleman to give me any reasonable argument in favour of the gap. In this House he would find the great concensus of opinion in favour of the removal of the gap. The hon. Member who spoke last said that 25 per cent. of the people who claimed benefit in his constituency were rejected. I do not think he quite understood why that was. I have been seeking to discover the reason. I think that. I know. It, probably falls under the head of another attack on the Minister of Labour as an autocrat, a sort of Soviet dictator who makes rules for the unemployed. It is those rules which are at fault, especially that rule excluding the single man from uncovenanted benefit. We say the single man for short, and, as far as I can understand, the Minister of Labour does so. But the rule is much longer than that. It is the single man living with his relatives, who are assumed to be in a position to support him without hardship, or something to that effect. That is the rule which I constantly find given to me. I have had it from the Prime Minister and from the Minister of Labour. But that is not the rule after all. The rule, as he made it under the Act, was that these were to be single men who even when in employment, had not supported themselves and had been partially dependent on their relatives. Now when unemployed they go for benefit, and the Ministry rules them out.

Unfortunately, owing to this habit of using the phrase briefly, up and down the Kingdom the unemployment committees and superintendents of Employment Exchanges are ruling out single men living with their relatives, who are assumed to be able to support them, contrary to the rule that the Minister himself made, and contrary to what he said was the purpose of the rule. He confines the exclusion to those single men who, even when in employment, had not maintained themselves fully, but had been partially supported by their relatives and are now living with their relatives; but the rule has been extended so as to exclude all single men living with their relatives. They are now being excluded by thousands and that accounts for the large proportion of 600,000 unemployed men and women who are not getting the benefit under this unemployment "disinsurance" scheme. There is another cause of exclusion, and I will not say that it is the fault of the right hon. Gentleman himself. It is a Section of an Act of Parliament and therefore we must all take the blame Originally under this scheme it was left to the superintendent of the employment exchange to test the bonâ fides of an applicant by offering him employment and if hon. Members look back to the original Act they will find nothing more than that—it was for the Department to test the bonâ fides of the seeker for work by offering him employment. Unfortun ately in the Act of 1921 a provision was introduced with regard only to the uncovenanted benefit, that the applicants must be genuinely seeking whole-time employment. I should like to construe that provision word by word, but there is not time. They must be ""genuinely" seeking employment. Everybody should be genuine about everything. As to "seeking employment," I have heard of a case in which the superintendent of an exchange refused uncovenanted benefit to a woman because he said she was lame and could not go about seeking employment. Consequently she was not to have the benefit. She was well and therefore could not get the sickness benefit. She was a young woman and therefore the Poor Law would not give her any outdoor relief. I have heard of even worse cases than that. I have heard of a case in which the superintendant of an exchange told an applicant that unless that applicant went personally to every firm in the industry from one end of the city to another—and it is a large city—he would not believe that applicant was genuinely seeking employment.

Of course, there is no use in proceeding on particular instances, but you have the fact that 600,000 people are off the roll; that 600,000 unemployed are not getting the benefit. From my investigations, as far as they have gone, it would seem that is very largely because of the increasing stringency of the administration of this uncovenanted benefit, which has been deliberately brought about in order to restrict the amount of the benefit. It seems to me that the Minister of Labour, if he were the Minister for Labour and not the Minister for the Treasury, would ask himself about those 600,000 people and would take the blame to himself, or, at any rate, would feel uneasy as to what was happening to them. We are certainly entitled to ask about these 600,000 men and women who are not on his register and who are not getting benefit. The purpose of the unemployment insurance scheme was to provide benefit for these people, and its purpose is defeated if they do not get it. Of course, it may be necessary that some should be refused, but when we find more than one-third of the entire number of unemployed not in receipt of benefit it is time to ask, how is the administration going on? In what way does it manage to defeat the intentions of Parliament and of the scheme, to defeat, I suppose, the intention of the Cabinet which is responsible for this scheme, and certainly to defeat what should be part of the purposes of the scheme, namely, that the people should be satisfied. There is growing up a great bitterness of indignation against any Government which happens to be administering because of the failure of that scheme.

10.0 P.M.

Uncovenanted benefit is frequently talked about as though it were a free gift from the State, and it is suggested that we cannot look a gift horse in the mouth and that it is not unreasonable that the Minister should be given autocratic powers to withhold it whenever he thinks fit. But this is not a free gift. I remember the case of a man who went on to a building job. He had been unemployed and had got nothing to eat, and after he had been working for a morning he went to the foreman and asked for something which I believe is called a "sub"—an advance. He did not consider that he was receiving a free gift. What he received was going to be set against what would become due to him at the end of the day or the end of the week. As a matter of fact the Minister of Labour himself refers to it as "benefit ahead of contribution." It is not a gift. Every penny of it will be paid back by these people. What is more, the people to whom the Minister is refusing uncovenanted benefit will contribute towards the repayment. No distinction is made in the contributions exacted from the single man as compared with those of the married man. Single men and their employers have paid in the past the same contributions as those paid in respect of married men. The contribution has been tremendously raised, deliberately, in order to replace this loan in the Treasury, and some few of these 600,000 people are passing into employment every week and are beginning to pay back what they have never received. The rest of them, if they get into employment, will also have to pay back. It will be deducted from them. I think we may reassure the right hon. Baronet the Member for the City of London (Sir F. Banbury) that. the Treasury will get the money back quite safely. But in their hour of need it has been withheld from these people in the application of an arbitrary rule made by the Minister under the powers given by an Act of Parliament and that has been done deliberately in order to limit the number of people to whom uncovenanted benefit would be paid. That surely is a dis-insurance scheme instead of an unemployment insurance scheme.

I suggest that in Committee we shall have to ask the right hon. Gentleman to consider an Amendment which will secure to these single persons what his own rule gave them. His own rule has been departed from; it is not carried out by the Ministry itself; it is not carried out by the local committees, and it is not carried out by the superintendents of the Employment Exchanges. But the rule still stands, and single men are being deprived of their uncovenanted benefit contrary to the rule of the Minister himself, and contrary, as it seems to me, to all equity in the matter. Yet he is going week by week to levy these men for contributions at the increased rate in order to repay the loan required for the purpose of uncovenanted benefit. He will make them repay what he has refused to give them in their hour of need. That is a matter about which we have a right to ask, and it is a matter with which we shall have to deal. The right hon. Gentleman mentioned the interim report of the Committee recommending the abolition of the refund. When I examined the Bill, I found that provision was not in it, and I am very glad the Government or the right hon. Gentleman took the right view at the last moment and left that out. I should like to explain to the House with regard to the refund. Under the unemployment insurance scheme, any man on arriving at the age of 60, or on retiring after the age of 60, has a right to receive from the fund the whole balance between the contributions which he has paid in and the benefits which he has received plus 2¾ per cent. interest. Consequently, there will from now onwards be a stream of people entitled to these small sums, and they will not be quite small in some cases, because even now 85 per cent. of the people are in employment.

The Committee, headed by Sir Alfred Watson, proposes, on purely actuarial grounds, to abolish that refund and to deprive all those millions of people of their vested right to these funds. Really, this Government does seem a strange Gov ernment. I do the right hon. Gentleman the justice to admit that the Clause is not now in the Bill, but he mentioned it in his speech, and if I might warn him I would say, Drop it. If there is a proposal—I want to speak very seriously about this—brought forward to confiscate by Act of Parliament the vested right to these refunds owned by millions of people up and down the country, poor people who will not know anything about what they are entitled to, who cannot possibly make up the sum, who can be cheated with impunity, if the House will stand it, if that Clause is brought forward I venture to say that this House of Commons will not pass it, and I do not believe any other House of Commons will. But If there were any House of Commons which would deprive those millions of people of these small sums, then I suggest that we should have such a crusade from the country that the Ministry would be obliged to refund them.

I feel that the Government is plunging deeper and deeper into a financial abyss of these weekly doles, which, including the poor rate, amount to something like £100,000,000 a year. Just imagine that this economical Government, which is straining every effort to cut down expenditure, which is ruining our educational system. [Laughter.] Hon. Members laugh, but I do not think they realise that education is one of those pieces of machinery in which you cannot catch up lost time. No one can give the child back the years stolen from him. If you are supplying inferior teachers, if you are refusing to build schools, no one can give back to those children the year of which they have been deprived. I say this Government, which is doing that in a frantic attempt to take some more off the Income Tax, is actually continuing to spend £100,000,000 a year in doles in one way or another. [An HON. MEMBER: "No!"] I will only say, in answer to that, that it is either spent out of the Unemployment Fund, or out of the poor rates, and the State is one, the public money is one, whether it comes from the rates or the taxes. I cannot help regretting that the Government will not consider, apparently will not even read, the contrary proposals which are made on the subject of unemployment by the Labour party I want to make it clear that we on this side heartily dislike this policy of relief by doles, and we accept no responsibility for it. We say, if you can do nothing else, at any rate make the payments to all the people who are unemployed, and at a rate sufficient to prevent deterioration of any of them. But we think that your present system combines all forms of extravagance. You let widespread unemployment grow, for want of preventing it.

Lieut.-Colonel Sir F. HALL

How can we prevent it?


I do not believe hon. Members even take the trouble to read our proposals. You let widespread unemployment grow for want of preventing it, you let it continue deliberately, because you will not take any steps to stop it. You will not even read how you could stop it and prevent it, and then you set to work merely to relieve the distress by making allowances on the level of semi-starvation. We on this side think that such a policy is intolerably wasteful of the nation's resources, but, what is far more important, it is inevitably detrimental to the health and the strength and the character of a large proportion of the wage-earners. [An HON. MEMBER: "What is your policy?"] We on this side of the House say there ought to be provided work and employment, and not doles. We believe in a policy of preventing unemployment.




I have already protested several times that hon. Members will not even take the trouble to learn or to read. I cannot explain it all in a moment. Hon. Members must realise, if they will not take the trouble to read, that you cannot explain a complicated question like this in a moment. Hon. Members had the opportunity of reading it for years before them. The Government have not even taken the trouble to have the matter investigated. They have not even, so far as I have learned, ever considered how it is possible. We believe it is possible to prevent the occurrence of unemployment by so distributing the public orders for works and services among the years of the trade cycle that the aggregate volume of work to be done shall be every year approximately stable. I would ask the Minister of Labour whether he has ever taken the trouble to have that scheme investigated. Of course, he has not, and, as a matter of fact—and here I am making a serious proposal to him—just before the Great War the Board of Trade did appoint a Committee to inquire how far the policy of allocating the public works and orders of the Central Departments could be carried out and how far it would operate to prevent unemployment. That Committee was interrupted by the Great War, and apparently this Government have never taken the trouble even to reappoint that Committee or to make any other inquiry on the subject. Consequently, their followers naturally have never heard of it.

I want, in conclusion, to point out two or three things of a different nature. First of all, there is no danger of the insolvency of the Unemployment Fund. Hon. Members may be quite happy about that. The debt is comparatively trivial, the Fund is bringing in £50,000,000 per year now, it would bring in about £60,000,000 in times of decent trade. I suppose, the debt is only about £20,000,000, and at the present time it is actually paying its way, I suppose. Probably the issues are only about as large as the receipts. We are not paying off the debt, but we have only to have a slight spurt of good trade for three months, and we shall pay it off. On the other hand, it is true that you cannot look forward to the numbers of the unemployed falling away to, as one hon. Member said, 500,000 or something like that. Until you take steps to prevent unemployment, you cannot look to see your unemployment sinking below—


How is it to be prevented?


Five or six times I have told the hon. Member.


No, not once.


Unfortunately, there are some things which are beyond the capacity of any hon. Member who does not take the trouble to read our proposals. The size of the present unemployment is said to he esnecially due to the Great War, Nothing of the kind. Probably the worst unemployment this country has ever had, though we do not have exact statistics, was in 1841, which, I suppose, was the year this building was finished after burning down. That was, after a quarter of a. century of complete peace, and after nine years of the Whig Government in the Reformed Parliament, you had the worst unemployment this country has ever known. Lest it might seem that it was the fault of the Whigs, or that the Whigs were worse than the Tories, I think we should remember that the greatest period of unemployment since we have had statistics was in 1879, when we had had five years of Conservative government, which was marked not only by peace, but, the House may remember, was marked with "Peace with Honour." In that year there were more than 1,000,000 unemployed. The figure of unemployment, then, has always been accepted as 11 per cent., and it is only 12 per cent. now I mention those two dates, 1841 and 1879, to remind this House that this unemployment is not much worse, or in any special sense bad, compared with the normal. Unless you take either the steps I have suggested, or some better steps, to prevent unemployment, you will have the same sort of thing again. The right hon. Gentleman who spoke for the Liberals said that the permanent method of dealing with unemployment in normal times is this method of insurance. I have heard hon. Members on the benches opposite say the same thing. It seems to me that to deal with unemployment by the method of insurance is not to deal with it at all. To let the disease grow, and then deal with it, is not the way we got rid of cholera, plague, or enteric. You have got to take steps to prevent the disease. That is the only way to deal with it.

I want to say very seriously that, in my opinion, there are two big dangers which are threatening Western civilisation to-day. One danger we all have in our mind is the danger of another war. The other danger, apparently, is not recognised by hon. Members opposite, and, seemingly, is not recognised by hon. Members on my left, but I think it is not less serious. It is the psychological reaction among the people against what, I venture to think, is the dark shadow of profit-making capitalism, which is not so much the danger of low wages or even long hours, but is the haunting sense of insecurity, the perpetual fear of unemployment, and the consequent risk of ruin to home and family that dogs the life of the wage-earner to-day. I venture to say it is that, and not the proletarian Sunday school which is the seed bed of what hon. Members opposite call sedition, but which I might call divine discontent. We on these benches accept this Unemployment Bill, with all its faults, as the inexpensive minimum to meet an industrial situation which seems to us of appalling gravity. Of course, the Bill does not pretend to touch the problem of unemployment. What the wage-earner demands is that involuntary unemployment should not be relieved after it has occurred, but should he prevented from occurring. Hon. Members on the other side may laugh at that; may, if they like, admit that they do not know how to deal with it. We believe that unemployment can he prevented. [HON. MEMBERS: "How?"] Widespread and long-continued unemployment can be prevented. [HON. MEMBERS: "How?" and "Open up the land!"] The people of the country believe that unemployment can be prevented. They ask that it shall be prevented. [Interruption.] Hon. Members opposite will not listen to our proposals. [HON. MEMBERS: "What are they?"] At any rate, we shall go on proclaiming them up and down the country. We shall go on making the people believe that unemployment can be prevented, until we can see, in due time, a reflection of that in the majority of this House, and then—


I think we shall all agree that we have had an extraordinary speech from the hon. Member for the Seaham Division (Mr. Webb), but I I think perhaps hon. Members will equally agree with me that it had very little relation to the proposals of my right hon. Friend the Minister of Labour. In fact we can quite equally agree with the hon. Member for Seaham on one point, that we, probably, on this side of the House are suffering from an entire incapacity to understand what he was talking about. The Bill before the House is a modest—[HON. MEMBERS: "Oh!"]—a modest and honest attempt to deal with an immediate problem. It has been referred to by the hon. Member for Camlachie (Mr. Stephen) as a Bill reminding him of Joseph's coat of many colours. If my Biblical knowledge carries me properly in this matter I think Joseph was subsequently a per son of some importance in Egyptian history, so that the coat of many colours was not without value in that community. Perhaps, therefore, this modest and honest little contribution, even as a temporary Measure, may have some use even if compared to Joseph's coat of many colours.


But it will not be remembered so long in history.


I am not a prophet, and, therefore, I will not deal with that point, but it is evidently, on the one hand, thought by some that my right hon. Friend and the Government thought they were producing a mountain and only produced a mouse. On the other hand, the right hon. Baronet the Member for the City of London (Sir F. Banbury) told us on this Bench that we were creating a Frankenstein. Perhaps, therefore, taking a moderate view of the two positions, my right hon. Friend may be congratulated on, and gratified with the thought that the moderate man will read between the lines and accept, perhaps as a temporary solution of an immensely difficult problem, something which is deliberately intended to tide over a difficulty of immense proportions. My right hon. Friend will perhaps be pleased to have no opposition, and, even, if not the cordial consent, at any rate, some measure of support for this Measure that attempts to deal with this problem for the time being.

It was said—and quite rightly—by the right hon. and learned Gentleman the Member for Spen Valley (Sir J. Simon) that whatever was proposed in this Bill does not go to the root of the matter. Of course, it cannot. Everybody knows perfectly well to-day that the Minister of Labour and the Government have been anxious for months, as they will probably be in the future, not only to try and co ordinate various Measures but to devise schemes to prevent, and not palliate, obvious difficulties. There is not the slightest reason why there should be all this criticism of this particular Bill. After all is said and done, right hon. Gentlemen opposite seem to forget that the Minister of Labour and the present Government have not been in office so long, and still there has been a measure of criticism directed against recent legislation which hon. Gentlemen opposite will remember, and it is to the effect that so much hasty legislation in the past has led to an immense increase of difficulties, and the time has arrived when perhaps more moderate and more considered ideas should prevail in regard to our legislation. With great respect, that, roughly, is what I would say as regards the criticism of the right hon. Gentleman the Member for Spen Valley.

Of course it is essential that this problem should be considered as a whole, and not simply in relation to the particular Measure we have introduced, but with a view to the larger and broader aspects of the future. If that be so, and the whole of the House I am sure will be in cordial agreement on that point, it is equally true to say that as regards this small, honest, and modest Measure there are various improvements and advantages. A reference has been made by the hon. Member for Seaham to the question of the gap, and I quite agree with him that it is not a desirable thing that any man in this country should find himself confronted with a gap as regards the receipt of benefit, but he must remember that in this Bill which my right hon. Friend has introduced, as regards the extension of the fourth period comprising 50 weeks, covenanted and uncovenanted benefit is accorded for 44 weeks, which is not an ungenerous provision. If we cannot meet the hon. Member's point in regard to the other two weeks I am sure he would be the last person to refuse to admit that we have gone a very long way in order to meet the distress and the demand of those who would otherwise be out of benefit altogether but for the provisions of this Bill.

Another point to which reference has been made is what has been called the continuity rule. There again the Minister of Labour has endeavoured to remove a grievance. Why was this alteration in the Bill devised? It was deliberately devised to prevent the friction that had arisen in regard to Clauses in previous Bills. There was what was called the "O—X—O" rule of one day in and one day out. There were the two days in and the two days out. It really does not matter whether the Clauses included in a previous Bill were designed to prevent expenditure or whether they were not. They were certainly a cause of friction and of hardship. In this Bill there has been a very real attempt to obviate that friction and get rid of that hardship, and the result will be that after a period of three weeks, if you like to take it so, you will be able to have absolute continuity and a right to the establishment of your claim which you would never have got under any previous Bill, and you will practically obviate in a very large number of cases, especially of casual workers, not only to a large extent the waiting period before they come into benefit, but you will actually allow them to draw benefit during a period over which under previous circumstances they were never capable of doing The cost is really immaterial compared with the removal of restrictions. It is quite small. I believe it represents a fraction of a penny, and yet it will remove all friction. Surely you have gone one step further to do something to really secure that which the House desires to achieve—to remove hardship, to alleviate pain, and to destroy friction between classes in this country. If you can do that you will have done something which in essence is good.

I have noticed with great regret that over this Bill there is a suggestion that Members sitting on this side of the House are far more desirous of doing something to save their own skins rather than to promote the welfare of those whom the Bill is supposed to affect. [HON. MEMBERS: "Hear, hear"] I am sorry to hear those cheers. I am bound to say, if hon. Members will allow rue to say so, that if they cheer like that I must remind them of a quotation from Milton's "Paradise Lost": Belial in much uneven scale, Thou weighest all others by thyself. This Bill is deliberately framed to assist men in a moment of intense difficulty to tide over their troubles, to give a little help to those whose outlook is rather hard and black to-day. Take what happens under this Bill. There are 44 weeks of covenanted and uncovenanted benefits out of 50 weeks assured until the 15th 'October this year. [An Hon. MEMBER: "Why the gap?"] I have dealt with that. Then there follow 26 weeks' covenanted and uncovenanted benefit after October next, and in October, 1924, we come down to the covenanted benefit idea pure and simple. There are some hon. Friends on this side of the House who suggest that there is no idea under this Bill of returning to what they call ordinary economic circumstances venture to think you can read within the lines of this Bill that while you are dealing with the immediate problem of urgent necessity, there is still under it also a very real appreciation of the fact that when normal conditions are resumed the economic conditions that have hitherto prevailed may also have an opportunity of re-establishment.

There is equally within this Bill the continuation of the dependants' benefit. I noticed, and, indeed, I heard with some surprise, some remarks from hon. Members opposite in regard to that. Surely it must be recognised that the benefit given to a wife or a child, which operates identically with the benefit that is given to a man who is insured, does of itself do some good, and, if that is continued under this Bill, we are continuing and not reducing the benefit. It does another thing. Just in so far as that is done, it relieves in some degree the guardians in the various areas of this country. Therefore, it is a double benefit, and it is a right principle. What my right hon. Friend is doing in this modest way, this modest contribution towards—not solution of—a great problem, is something that may be accepted as an instalment, perhaps, of something that may come hereafter, but, at any rate, as an indication of the acceptance of the vital fact that a real necessity is with us to-day. My right hon. Friend has rightly said that by April there may be 150,000 men not drawing benefit. It is an urgent matter, therefore, that their position should be considered, and it is really not the time, whatever the future may hold for us, to debate the economic problems that interest us so deeply, when we are face to face with the position that, in the abnormal circumstances of unemployment in this country, even though there are signs of reviving trade, we have to deal with the necessities of these people at the present moment. It is an urgent necessity that something should be done.

I do not know that I can add much to what I have been allowed to say. I should only like to say this as regards details. The hon. Member for Seaham (Mr. Webb) made several remarks, and I do not know where he got some of his facts from Perhaps he will allow me to quote to him a remark of Sheridan— perhaps he relies upon his memory for his jests and on his imagination for his facts. He does seem to have relied on his imagination for his facts, for he stated that there were 1,670,000 people out of employment, and that only 900,000 of them were drawing benefit. The figures are not correct. There are 1,130,000 drawing benefit—


I said I thought 1,000,000 were drawing benefit.


I am afraid I wrote it down 900,000. The hon. Member said there were 1,670,000—


Quote that bit from Milton again.


The figures are incorrect. The hon. Member also said—


Maybe you will find it in Robbie Burns.


The figures I quoted have just been confirmed by the hon. and gallant Gentleman. I said there were 1,670,000 people unemployed, and I think I said that 1,000,000—[HON MEMBERS: "No, no!"] The hon. and gallant Gentleman's figures confirm what I said, namely, that one-third of the persons unemployed are not drawing benefit.


A large number of those are not under the Act at all.


That is what I am saying.


The point is, anyhow, that the hon. Member for Sea-ham was incorrect in' his figures. [Interruption.] He is including in his figures agricultural labourers, who are not insurable persons, domestic servants, who are not insurable persons, and juveniles.


I am much obliged to the hon. and gallant Gentleman. Those are exactly the figures I was giving.


The hon. Member was using the expression "unemployed" in view of the potential receipt of benefit.


My point was that this is an unemployment insurance scheme, and I said that, of those 1,600,000 people, one-third of the total number of normal wage-earners who were unemployed were outside benefit.


The hon. Member must see that there was no point in using that figure of unemployed unless he meant the House to infer that the balance of those who were not in receipt of benefit were eligible for it. Then the hon. Member for West Nottingham (Mr. Hayday) referred in rather a moving speech to one or two incidents. He referred to some woman who had been employed who was living with an invalid husband and a blind sister.


To get it quite correct, I said a single woman was refused benefit on the ground that she was living with a sister who was getting 10s. a week and the sister had a husband who was an invalid.


Thank you very much for correcting me. I am not making fun of this. It is a sad story, and I wish the hon. Member would let my right hon. Friend and myself know. I cannot conceive, if the circumstances are as he says, that there is not some mistake.


These mistakes are happening all over the country.


If you are dealing with 12,000,000 insured it is not unreasonable to imagine that there will be some mistakes.


They are always on your side.


The hon. Member for Camlachie (Mr. S, Stephen) spoke of Clause 9. Under Clause 9 there is a right of appeal to the referees and to the umpire, and therefore, if hon. Members opposite wish to assist the working of these various Acts of Parliament and this new Bill when it becomes law, we should welcome their action in everything they can do to see where there are gaps or faults of administration, to see that the Regulations which arc laid down are observed and that anyone who feels himself aggrieved shall go to the proper authority for his case to be considered.


In the case of uncovenanted benefit, have you not set down in the memorandum that uncovenanted benefit has no right of appeal?


I was referring to covenanted benefit. I think the hon. Member will understand why that is so. A great claim was made by the hon. Member for Seaham for uncovenanted benefit. I said, and say again, you can hardly expect a man who draws uncovenanted benefit to be in exactly the same position as a man who draws covenanted benefit. [HON. MEMBERS: "Why not?"] Because a man who draws covenanted benefit has a contractual engagement with the State. [An HON. MEMBER: "And the other would have it if he had the opportunity."] The hon. Member can speak when I have sat down. With the man who is getting uncovenanted benefit, the State has only a potential alliance and agreement. Therefore, from the ordinary point of view of the man or the woman who has fulfilled his or her contract, the State has to recognise that contract as he or she does, and it is perfectly unreasonable to suggest that a potential payment, which may be made in years to come, and which the recipient of uncovenanted benefit may be called upon to pay, and which he may wish probably to ultimately pay, puts such person in the same position as the man or woman who has contractual relations with the State.

There were several other suggestions and criticisms. The right hon. Member for North-West Camberwell (Dr. Macnamara) raised a question as to the Trades Disputes Disqualification Clause. I can only say that the Committee under Sir Thomas Munro is sitting, and they are having a further sitting to-morrow, and it would be unjust to them, as it would be undesirable in itself, to say anything further as regards that Committee. I do not think the House would wish it, and certainly the House will appreciate the difficulty in saying anything as regards any decision at which the Committee may arrive. It is well recognised that this Bill can be called a continuing Bill. It is a continuing Bill because it will continue, while it will add to the benefits that are to be given to the insured and the uninsured, uncovenanted people of this country. It is but a small attempt to deal with a great problem but it is an attempt to tide over an emergency period, and will be welcomed as such by the majority of the House. My right hon. Friend the Minister of Labour was glad to hear from the right hon. Member for Platting (Mr. Clynes) that he did not intend to oppose the Second Reading, because even in the limited scope of this Bill there is something appealing that is a real advancement, and when you have something that appeals, with a real advancement attached to it, then, in time to come, with hours at our disposal and months for our use, something else may be hammered out of a more permanent character, and with a more conclusive result. If that can be done then, by our action in passing the Second Reading of this Bill, the Whole House who feel, in spite of the criticisms that have been devoted to the Bill, that they have contributed something to alleviate an immediate danger and an urgent need, and that they will net have prohibited and not have put anything in the way of the further development of a more permanent scheme for the alleviation of unemployment in this country.


I should like to ask a question to clear up a point With regard to Clause 6, it seems to me—I may he wrong —that there is an Amendment of the Education Act of 1921 relating to England and Wales. It deals with the powers of the local education authorities to give assistance and provide information for juveniles in choosing employment. This Committee would be deprived of their powers unless they were prepared to administer unemployment benefit under the juvenile scheme. My question is whether this Bill is not an Amendment of the 1921 Education Act, and an interference with its powers? If so, how does it affect Scotland? Does it affect a Scottish Education Committee in the same way in regard to the juvenile scheme?


I can only speak again by leave of the House, as an appeal has been made to me. The hon. Gentleman is quite right in the view he takes. As I mentioned in my speech, a question of friction arose. There has been considerable friction in the country for a good many years past, because of the two parallel systems. In order to deal with that difficulty, the late Government asked Lord Chelmsford to sit as a sort of arbitrator between the two systems. He issued a report, with certain recommendations, and the Clause in this Bill is intended to carry out the recommendations of that report. We hope that by that means the difficulties will be obviated. The Bill only covers the English Committees and not the Scottish.


Following on that, is it in Order to amend another Act by this Bill, which deals with unemployment insurance? Is it in Order to amend an Education Act without dealing with that Act specifically?


Why not?


I think that is a point that will have to be raised in Committee on the Bill. At present I can see nothing in that point to prevent the Bill being read a Second time.


May I draw the attention of the right hon. Gentleman to Clause 6 (2, a). Does not the provision there made throw the burden of looking after the needs of these children between the ages of 16 and 18 on the Insurance Fund rather than on the education committee?


We really are getting on to a discussion which is more appropriate for the Committee than the Second Reading. I shall be very glad to deal with these points as they arise when we are in Committee, but it is hardly the proper time for them now.


May I ask a question, in order that we may have guidance in Committee? As a former member of the Glasgow Education Authority, we hired a large building from the Admiralty to deal with adolescents, as far as training was concerned. While in Committee, can we bring up questions of dealing with adolescents in towns like Glasgow, apart, altogether from the payment of insurance?


I think the hon. Member had better look at the title of the Bill, in order to see if he can frame an Amendment to the Title. There is a distinct reference to the education authority in the Title.

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

Bill read a Second time, and committed to a Standing Committee.

The remaining Orders were read, and postponed.