HC Deb 16 July 1925 vol 186 cc1682-93

Resolution reported,

"That, for the purpose of any Act of the present Session relating to insurance against unemployment, it is expedient to authorise the payment, out of moneys provided by Parliament— (1) as from and after the fifth day of April, nineteen hundred and twenty-six, of a contribution, towards unemployment benefit and any other payment to be made out of the unemployment fund, not exceeding the amount determined by the Treasury to be approximately equivalent to the sum which would be produced by weekly contributions paid in respect of the two periods mentioned in the following Table at the rates therein specified in relation to those periods, respectively: —


During the extended period (that is to say, the aggregate of the deficiency period and a further period thereafter ending on such date as the Minister of Labour may by order prescribe, not being a date later than the first day of the insurance year commencing next after the end of the deficiency period) or, if the extended period does not expire on or before the first day of January, nineteen hundred and twenty-eight, during the period ending on that date:—

Description of persons in respect of whom contribution is payable. Rate.
Insured poisons being men 8d.
Insured persons being women 6d.
Insured persons being boys 4⅝d.
Insured persons being girls 4⅜d.
Exempt persons being men 2½d.
Exempt persons being women 2¼d.
Exempt persons being boys l¼d.
Exempt persons being girls 1⅛d.

During such time as the extended period continues after the first day of January, nineteen hundred and twenty-eight: —

Insured persons being men 7d.
Insured persons being women 5½d.
Insured persons being boys 4⅛d.
Insured persons being girls 3⅞d.
Exempt persons being men 2d.
Exempt persons being women 1¾d.
Exempt persons being boys 1d.
Exempt persons being girls ⅞d.

(2) Of the increased contribution towards unemployment benefit and any other payment to be made out of the unemployment fund which will become payable if the Minister of Labour, with the concurrence of the Treasury at the end of the first quarter of the year nineteen hundred and twenty six, or at the end of any subsequent quarter of any year, declares that the average of the amounts of the advances made by the Treasury to the unemployment fund outstanding on the last day of each week in the quarter, together with the interest accrued up to the said last day in respect of advances exceeds the amount of the advances outstanding on the thirty-first day of December, nineteen hundred and twenty-five, together with interest accrued up to the said thirty-first day in respect of advances, and the rates of the contribution, payable out of moneys provided by Parliament, are consequently deemed to have been increased in respect of the quarter in the case of employed persons being men by one penny, and in any other case by one halfpenny."

Resolution read a Second time.

Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."


I should like the Minister of Labour to tell us the number of those who are on the Unemployed Register, and the number of those who, he contemplates, will be retained upon the register as a result of the passing of this Measure. I should also like him to give us an estimate of the number of people who he thinks will be put off the register and will not be in receipt of benefit as a result of the passing of the Measure. In this connection I would put a question in regard to the class of young people, or people who are in receipt of benefit and are at home and who are not to get benefit in future because of the family income. How will the Ministry find out what the family income is? Will the applicant for benefit have to fill up a form?


Those points do not arise on this Resolution. They arise properly on the Bill.


I am putting these questions to the Minister because the amount of these contributions will depend on the figures of the Resolution. The whole of this contributory scheme is interlocked.

Lieut.-Commander KENWORTHY

I protest against the taking of this very important Resolution after eleven o'clock at night. I know no reason why time should not have been found for it at a reasonable hour. In view of the Debate to-day, finance is a dominant aspect of policy, and it is necessary to watch the pounds very carefully in view of what the Government are to do in spending money on warships. I do not think that this business was announced at the end of Question Time last Thursday. All that I can recollect the Prime Minister saying was that this day would be a Supply day. I inquired through the usual channels, and was informed that no warning had been given. I respectfully suggest to the Government that this is hardly the way to get business through, especially towards the end of the Session. I throw that out as a hint. I also protest, mildly, against the absence of any representative of the Treasury. I do not expect the Chancellor of the Exchequer to be here, but I think the Financial Secretary ought to be present. Let me quote from the Resolution. Paragraph (2) states: Of the increased contribution towards unemployment benefit and any other payment to be made out of the unemployment fund which will become payable if the Minister of Labour, with the concurrence of the Treasury at the end of the first quarter of the year nineteen hundred and twenty-six, or at the end of any subsequent quarter of any year, declares that the average of the amounts of the advances made by the Treasury to the unemployment fund outstanding on the last day … . The Treasury is a very important factor in the finance of this scheme. Yet there is no representative of the Treasury present on the Treasury Bench. That is hardly treating the House with proper respect. In the absence of the Treasury, I will address myself to the Minister of Labour. In the table an extraordinary fraction of one penny is given for the rate of payment for insured persons, and a further table for the same insured persons also contains quite unworkable fractions. Might I ask how it is proposed to pay three-eighths of a penny? Are special stamps to be printed? How is this matter going to be dealt with? Is it to be done at the end of the quarter, or how are these fractions going to be reckoned up? If we are to introduce a new stampage the drapers will have a new scheme for selling things just under a shilling. I agree that it has occurred in other Bills, but I do not know how it has been got over, and I think we ought to have some explanation.

May I call attention to another point? This is a Money Resolution, but there is not total sum mentioned. It is a bad habit that has grown up since the War to take these Resolutions after 11 o'clock, but this is the first time I hare seen a Financial Resolution with no total sum mentioned. The late Government were able to tell us what they thought the total figures of unemployment would be for the year. Can this Government say what they will be for the rest of the financial year up to 31st March next? I do not ask for them up to 1st January, 1928, although we are dealing with that here, otherwise we are simply voting money in the dark. We do not know what the liabilities will be at all. I would like to see a fixed sum. I would like to suggest a sum, but perhaps that might be out of order. I would limit it to £5,000,000, and then the House would have an opportunity of going into the question as to whether the money was being properly used. We have now no check at all. Unless the Treasury can be persuaded by the Minister of Labour the House has no check or say whatever.

The House hag no further check or further say in the matter. That is not right, and I think it is worthy of some explanation from the Government. I would not be in order in entering into the question of policy, but I want you to enter a protest against the monotony of this policy of the Government—of Government after Government. We have these Money Resolutions like this again and again. There is no light at all. I am making such protest as I can and I hope I shall have some support. It is only by this House protesting against this sort of thing—of coining to the rescue, that we will force the Government, whatever its complexion may be, to make some change. I utter the strongest protest of which I am capable against this—this lack of statesmanship.

The PARLIAMENTARY SECRETARY to the TREASURY (Commander Eyres Monsell)

We did not know through the usual channels that the hon. and gallant Gentleman was going to raise this question.

Lieut.-Commander KENWORTHY

I notified the fact that I proposed to raise it.


It will, perhaps, facilitate matters if I say that notice of this Resolution was given last Thursday in the usual manner, and secondly, that the Report stage of Money Resolutions are exempted business and never, for one moment, should be taken before Eleven o'clock.


I rise to support what has been said by the Parliamentary Secretary. So far as we on this side of the House are concerned, we had ample notice, and raised no objection to a matter of urgency being taken now. Whatever our views of the policy of the Government, the Money Resolution, or the Bill, we recognise that it is essential that some provision should be made by the House for financing the unemployment insurance scheme. From that point of view we adhere to the statement made by the right hon. Gentleman the Member for Preston (Mr. T. Shaw) when the Resolution was in Committee. We are still concerned with the general finance set out in the Resolution; but it would try the House to go again into the- matter now. But I want to draw attention to one fact, that is the areas where unemployment is most rife, the operation of the finance of this Resolution will have a most serious effect. I represent the City of Sheffield, which has more Conservative than Labour Members, but I think hon. Members on the other side will support me absolutely when I say that the proposals of the Government, in the case of Sheffield, will have a most serious effect upon the burden to be placed on the poor rate, and also upon industry.

We find on such an examination as we are able to make at present, that it is going to mean an increased charge on the poor rate of £600 to £800 a week, that is, a charge of £30,000 to £40,000 a year to be paid by the ordinary ratepayers and by the industries in a heavily-burdened area: and even if an industry is not working there will be no escape from it.

The Minister of Labour announced, wisely I think, that he proposed to set up a Committee to inquire into the whole financial position of the State's provision for unemployment. When the Parliamentary Secretary was speaking in the Debate, I think, on the Second Reading of the Unemployment Insurance Bill he said the Minister of Labour was setting up this Committee to inquire into three things—firstly, the basis of the unemployment insurance scheme; secondly, into the finance of it; and, thirdly, into the administration of it. I want to ask the Government, in view of the very serious concern with which the effect upon the necessitous areas is viewed by the local authorities, in those areas, whether they will be prepared to widen the scope of the inquiry, and to inquire very carefully what is going to be the actual effect upon the local administration of the boards of guardians in England and Wales and the parish councils in Scotland as the result of this Bill. Is the Minister prepared to take direct evidence from the people who are administering the Poor Law provisions on the parish councils in Scotland and on the boards of guardians in England and Wales, so that he may have a general view as to what the effect will be on the whole system of relief, whether that relief in respect of the unemployed be by insurance or by provision made from the Poor Law rates? This is a most serious question, and I want to know whether the Government will do that. Secondly, I want to know if the Government have under consideration, or will be prepared to consider, making any financial provision at all in the meantime until the result of that inquiry is known in those areas where the additional charge on the poor rate as the result of this Bill is going to be so heavy? We in Sheffield are in a very bad position. We have very large loans outstanding to the Ministry of Health, and they have met us up to a point by allowing the interest not to be collected for the time being; but the whole situation is so serious that I do ask the Government to give us a reply on this question.

The MINISTER of LABOUR (Sir Arthur Steel-Maitland)

Perhaps I may answer quite briefly one or two questions that have been put. The whole of this scheme, as I think the hon. Member for Camlachie (Mr. Stephen) knows, is based, so far as finance is concerned, on the figure of 1,300,000. At the present moment the numbers on the unemployed registers are a little under that figure, but not a great deal. The number of people who may be affected it is impossible to state with any accuracy, but about 40,000 were previously affected, and probably the. same result would occur now. The calculation made by the hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy) was concerned with the fractions of one-eighth of a penny paid by the Government. Evidently he is not aware that under the finance of the insurance scheme the Treasury contribution is not paid every week but is calculated and paid in a lump sum later on. Consequently, only a multiplication sum is necessary and the corresponding figure is credited to the Fund. As regards paying a lump sum and no more, that would be contrary to the contributory nature of the scheme, whereby a proportionate sum is paid by both the State and by masters and men. If the hon. Member for Hillsborough (Mr. A. V. Alexander) will bring before me any points he would like placed within the scope of the inquiry. I shall be ready to go into them.


The hon. and gallant Member for Central Hull (Lieut. -Commander Kenworthy) raised the question of this Financial Resolution being taken to-night, and said he did not know that it was going to be taken to-night.

Lieut.-Commander KENWORTHY

The hon. and gallant. Member for Montrose (Sir R. Hutchison) says he was not informed that this Money Resolution was going to be taken to-night, and he did not know that any other business except the Estimates was going to be put down.


I see that the Minister of Labour has drawn up a table with respect to insured persons, including men, women, boys and girls, and I notice that, after the expiration of a certain date in 1926, their contributions are to be altered. When those alterations were made every man was entitled to receive benefit at any age. A man over 70, provided that he was genuinely seeking work and was fulfilling all the conditions under the Act, was entitled to receive the benefits and therefore his contribution and the Government's contribution were fixed. Since then another Bill has been brought before the House, which alters that fundamental principle which was that every person under the Act could draw his benefits at any time provided that he was an insured person. Now we are passing a table for the insured person and the old conditions under which these payments were fixed and Tinder which insured persons made their contributions is now being radically altered and changed. The contributions were fixed on the direct understanding that a person could draw his benefits at any age provided that he carried out the regulations. By this table all this is entirely altered. The Exchequer contributions which are fixed in relation to what a man contributes ought to be recast and remodelled seeing that you are now depriving a man of benefits under the new Widows and Orphans Bill and depriving him of what he has insured for and for what he has made his proper contributions.

It seems to mo a point of material importance that the contributions and the Exchequer grant are fixed always in relation to the benefits that will be payable, and now, those benefits having been curtailed, it seems to me that this table, and the table relating to the workmen's contributions, ought to be remodelled. I do not like to upset arrangements that have been come to between Whips, because we all stand to benefit to a certain extent by them, and it would be bad for all parties if arrangements were upset by individuals, but I am strongly tempted to divide against this Resolution, because it is not now the same Resolution that we first agreed to, having been altered inasmuch as the unemployed person over 65 is not going to get the benefit for his own or for the State contribution that he would have got before we agreed to this Resolution in Committee. There is a second point. I know it is difficult to divide against a Money Resolution, because if it were defeated the effect might be that the unemployed would get nothing at all, and that is the last thing any hon. Member wants. Last year, however, when the late Minister of Labour was introducing this Resolution, he was almost roasted alive with questions about what was going to be the total liability of the State, how much he thought they would have to contribute at a certain date and so on, and I am going to ask the Minister of Labour the same questions. I hope he will give us a full estimate of what the cost to the State will be under this scheme, and, seeing that the benefits have been radically altered, is he going now to reduce the premiums and contributions that are asked from the workpeople under this Bill?


This is a matter that affects a very large number of people. The Minister has for some time justified in this House, and also in reply to correspondence from Members of the House, the non-payment of benefit to large numbers of people who in our opinion are legitimately entitled to receive benefit, and one of the arguments he and those behind him have put forward is that the Fund cannot afford to pay unemployment benefit to the large number of unemployed who are on the books, and the regulations have, therefore, to be applied move rigorously now than in the past. I should like to know, and I am certain a large number of people who are unemployed would like, to know, why it is that in this Money Resolution the Minister is taking the opposite point of view, and has evidently arrived at the conclusion that it is possible to reduce the contributions, and that not so much money is required now as in the past, although he has been maintaining all along that the Fund was not sufficiently strong to enable sufficient money to be accumulated to pay benefits to those who are justly entitled to them.

I, for one, am not against reducing the contribution. As a matter of fact, Dr. Macnamara, when Minister of Labour, always taunted me in reply to anything I said by telling me I had all along been in favour of a non-contributory scheme. I plead guilty to it, and I stand here advocating the same thing with just as little shame as I have ever had in advocating a non-contributory scheme of unemployment insurance. If the contributions that are being levied upon the worker and the employer could be wiped out I would welcome any Money Resolution brought in to carry that into effect. But the point that weighs strongly with me is the different attitude that is being taken up now by the Ministry of Labour from that which has been taken up in the past. I suggest to the Minister that when he goes into the question a little more closely, when he considers the large number of people who are being refused benefit, when he considers the very large numbers of men who are approaching the age of 65— and the hon. Member for Gorbals (Mr. Buchanan) has pointed out the change that is taking place by the bringing into the pension scheme of the men who are 65 and over and who therefore will be outside receiving any benefit from the scheme of unemployment, but what about the man who is just over 60? What about the individual who to-day, being over that age, is being told by the Minister of Labour's officials in London and other parts of the country that even at the age of 60 he is not likely to be again employed in an insurable occupation, and consequently he is not entitled to receive unemployment benefit? If these men by some chance—and many of them have obtained employment after having been told by the committees and exchange officials that they were not likely to be again employed in insurable occupations. They have given the lie to that decision by getting employment, not only in insurable occupation but in the very occupation they have worked in all their working days. In the event of these people finding employment at an insurable occupation after they have been unemployed and been refused benefit, what attitude is the Minister going to take up then? Is he going to tell them that the verdict given previously in their cases were wrong and that they are therefore entitled to receive back money because they are entitled to it owing to the contributions they have paid?


I am afraid that is not permissible on this Resolution. We are dealing only with Exchequer contributions. Those matters may be raised on the Minister's salary, but not on this Resolution, which docs not deal with it at all.


I was leading up to the same point. Perhaps I was stressing too much the refusal to grant benefit to those people who are now being turned down. Supposing one of these men gets employment again in this insurable occupation and pays the contributions that are to be part of that sum that is to go to build up the fund that the present Money Resolution is to assist in building up. Suppose an individual gets employment and continues to pay contributions until he reaches the age of 65, when he comes into his old age pension under the Contributory Pensions Bill, for which he has paid. What is going to happen to the money he has paid out in the interval in the light of the fact that he has previously been disallowed benefit on a wrong decision? The Minister ought to point out very clearly what is to be done, especially when he is asking the Exchequer to find money to assist in the payment of unemployment benefit to the people who are unemployed. This problem will mean the end or the breaking up of any Government until a proper solution can be found. We have these Unemployment Bills every year, we have amending Bills, and Money Resolutions, and on every occasion the Minister of Labour, whichever Government is in Office, has to confess the failure of the Government to solve this problem, and go to the country to get more money with which to pay the poor victims of industry. I want to know, the country wants to know, and the insured contributors ought to know, because it is possible they may become unemployed very soon if the unemployment figures continue to increase, and the Minister ought to state that when this Money Resolution has been passed, and the Unemployment Insurance Bill now before Standing Committee comes back to this House—if it ever does come back; there is very little likelihood of it coming back before August—and is passed by this House, he will take up a more humane attitude, and the Government will show more sympathetic consideration to the cases that come before the Minister for decision by him.


I will endeavour to answer the questions put to me; first by the hon. Member for Gorbals (Mr. Buchanan). The total State commitments are, with regard to men, an increase of l¼d., women three-farthings, and young persons three-farthings. The total will amount to £2,200,000. In addition to that there will be a further 1d. given by the State in respect of men, and one-halfpenny in other cases, at the end of each quarter, when during the quarter the amount of deficiency on the Unemployment Fund is not less than it is at the end of 1925.

The hon. Member for Gorbals and the hon. Member for Govan (Mr. Maclean) also asked me what would happen when the old age pension scheme of the Widows' Orphans' and Old Age Pension Bill comes into operation. First, as regards the contributions, I trust that if the Fund then permits, the contributions will be reduced to the contributors to the scheme. It has always been contemplated by previous Ministers of Labour and previous Governments that that would be so as soon as the pressure on the Fund, due to unemployment and other causes, is reduced. As regards the older men, when the Widows' and Orphans' and Old Age Pensions Bill comes into operation in January, 1928, if a man of 65 gets work under those conditions, he will not be then required to pay any contributions. The hon. Member for Govan has referred to what he doubtless quite sincerely thinks were statements of mine as to the cutting off from benefit of many who were entitled on the score of lack of means. To the best of my knowledge I never made any statement to the effect that I had done so, and I never have done so.


I did not make that statement. I did not say that you were rutting them off because of lack of means, but that you were making out that the deficiency of the Fund was so great that you must economise. It was not lack of means on the part of the individual but on the part of the Government.

Question, "That this House doth agree, with the Committee in the said Resolution," put, and agreed to.

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