HC Deb 02 December 1927 vol 211 cc895-905

I beg to move, in page 6, line 2, after the word "the" to insert the word "fraudulent."

This Amendment is to be taken in conjunction with the Amendment standing next on the Paper, which proposes to leave out from the word "fact" in line 3 to the word "has" in line 4, and to insert instead thereof the words: and not by reason of the failure of the responsible authority for determining the claim to elicit all the material facts. The Amendment is one to which, I hope, the Minister will give his attention. I give the Committee one case which seems to put in a nutshell the injustice caused by the present state of affairs. The Miners' Federation run a weekly paper called "The Miner." For some weeks they ran a short story competition in order to encourage miners to write stories about their own lives and their conditions. One week the competition was won by an unemployed miner in South Wales, and the prize, which was one guinea, was sent to him. The fact that he had won the prize was published in the paper with his name and address. When he next went to the Employment Exchange he was accused of having received his unemployment pay for the previous week under false pretences, because he had, in fact, earned a guinea, and he was threatened with prosecution. It is easy to argue that he had actually earned a guinea in that week, but he is quite a youngster, and the idea of regarding his prize as "earnings" never occurred to him. It was to him a bolt from the blue, a perfectly gorgeous extra, and he was even more pleased at winning the competition than at getting the guinea. It never crossed his mind that he ought to have said that he had got this guinea. It was surely a little hard on a young man, who had been unemployed for weeks and who was receiving the miserable pittance of unemployment pay, that his prize should have been regarded as earnings; but that would not have been so bad had he not been threatened with prosecution and the disgrace of being accused of receiving money under false pretences. I think the prosecution was actually stopped by representations from influential persons, but the man had to pay back the money. I am not complaining about his having had to pay back the money, though I think it was very hard lines on him. What I feel is that in these cases we ought to consider whether a man is fraudulently refraining from disclosing certain important facts. If he is not acting fraudulently he ought not to be penalised.

I come to a second point, namely, that the worker ought not to be penalised by having to repay the money received, if the non-disclosure of relevant facts was due to the fault of the responsible authority in not taking the trouble to find out those facts. The workers do not know all the intricacies of the law. They do not know what has to be disclosed and what has not to be disclosed, and, quite naturally, they tend to assume that the thing which they have to disclose is the amount of any wages which they may have earned. The Exchange official ought to be the person to elicit the facts by asking the necessary questions. It seems extraordinarily unfair that, weeks after a case has been tried, when some other facts come to light, the man or woman concerned should be penalised not for their own fault at all but for the fault of the responsible authority. It is difficult for people who are on the verge of starvation, as these people are when trying to live on unemployment pay, to meet a demand for repayment of that kind. They have to spend, immediately, every farthing they receive on necessities, and it is a terrible thing to them if they are faced with a demand for the repayment of a lump sum weeks after they have received the money. I have a case in point where a girl had received six weeks payments. It was discovered that, on some technical point, she should not have received those payments and she was faced with the demand for the repayment of the whole amount.

The only thing a worker can do in such circumstances is to get into debt and I have had cases brought to my notice where workers have incurred debts at high rates of interest in order to meet demands of this kind. Where it is a question of fraud and of workers deliberately withholding relevant information, I am not defending them, though, Heaven knows, they have sufficient excuse. I am dealing with cases where there has been a real mistake, and, sometimes, not a mistake on the part of the unemployed person but on the part of the authority. As we have gone through this Bill, piling up Clause after Clause to make it more difficult for people to receive benefit, I have come to the conclusion that a museum of the next century ought to preserve somewhere a specimen of a worker who managed to achieve his benefit in the year 1928 and that specimen should be marked "Rare Exhibit". In connection with a Bill which is doing so much to make it difficult for people to get benefit, I would appeal to the Minister to consider an Amendment of this kind, and by accepting it, to make a generous gesture to people who are in such difficulties. The repayments to the Exchequer in the cases covered by the Amendment, if added up, are paltry in the extreme. A few pounds or perhaps a few hundred pounds would mean nothing to the Exchequer but to the individual homes faced with the payment of these amounts, and with the prospect of debt, for no fault of their own it means real calamity. The Minister will get his Bill. It is being steam-rollered through Parliament by his vast majority. Cannot he in this one case make a concession by accepting the Amendment which I have moved?


I must ask to have this Clause, but I do not think there is really much involved in it. There are two kinds of over-payment at the present moment. The first is payment through a clerk's error, that is a payment in excess of an authorisation, when a clerk pays over the wrong money. As it has been and as it is at the present moment the person who receives money under those conditions is liable to repayment. There is another kind of over-payment, and that is what is called payment under an incorrect authorisation, where, for example, in ignorance of material facts, benefit is paid which is not really deserved or merited. It was thought that the recipient was liable to repay a sum of that kind just as much as a sum received through the error of the clerk, and it is only because doubt has been cast on whether that was the case that we want to bring the actual law for certainty into conformity with practice. What we are proposing to do in this Clause follows the law with regard to health contributions. We are only making quite certain that what has been considered to be the law shall be the law. In that case, it is only in conformity with the law with regard to health insurance. It is nothing more than that, and it does not affect the question of prosecutions. If a person received money in good faith, it could not be a question of prosecution. [An HON. MEMBER: "It is!"] No, there could never be any prosecution.


Do I understand, therefore, that in those cases where they have terrorised people into paying money back they have had no legal right to do so, and it is only this Clause that gives that legal right?


No, but I should say distinctly that if a person has received money in perfectly good faith and is then asked to pay it back and refuses to do so, then, of course, once the fact is known that he or she is not entitled to it, but yet refuses to pay it back, that is a different state of affairs. But if the receiving of it and the keeping of it are in good faith, so long as they are in good faith, that could not be a subject for prosecution. Our practice has been that, while we thought this was actually the law—and this Clause is only intended to remove a doubt—if money has to be repaid it is never asked for in a lump sum in any case where there is any hardship, but is spread over a length of time till the repayment is made.

I would say one thing more with regard to the point put by the hon. Member who moved the Amendment, and who said that the insurance officer ought to know. The facts of the case are that questions are put by the proper person, that is, by the insurance officer or at the present time by the rota committee sometimes, to try to elicit all the material facts, but those facts differ in each case, and while as a rule the questions that are put by people accustomed to put them do elicit the material facts, it may quite well be that in the infinite variations of individual cases a material fact may not be elicited. It may be no fault of the questioner, but in the great majority of cases the applicant really knows whether the fact is material or not. That is the actual state of the case at the present time, and for the most part there is a readiness to repay any sum which is received in error. If this is not the law, I, as the Minister of Labour, have no right to receive such a sum from a person who is anxious to repay it, and it should go into the Treasury, but not to the Unemployment Insurance Fund. Neither the right hon. Member for Preston (Mr. T. Shaw) nor I would, I am sure, want the Treasury to benefit at the expense of the Unemployment Insurance Fund. I hope, with this explanation, the objections to this Clause may have been removed.


I have experienced the usual disappointment at the reply of the Minister. We were only asking for a little human touch in this matter, and it is obvious that we are going to be refused even that much. The Minister rightly said that this Clause does not deal with prosecutions, but I submit that if a man has been drawing benefit for several weeks in the belief that he was entitled to it, when he is down and out, and then he is called upon by the Ministry to repay what he has already received, if that is not a prosecution, I would like to know what is. An hon. Friend suggests that it would be persecution under these circumstances, and I quite agree. I submit that we are not seeking in any way to relieve anyone who has been making a fraudulent claim, nor are we seeking to withhold material facts from being submitted. We still believe that all material facts ought to be submitted, but I am sure that the Minister's experience will be that there will have been hundreds of cases where, through not submitting some little information which has afterwards been seized upon by the officials, men have been called upon to repay sums of money when they are not in a position to repay them and when they had received them genuinely believing they were entitled to them. I trust that, despite the difficulty with which people who have to get unemployment benefit are faced and despite what the Minister has already said, he will reconsider this matter and accept the Amendment, not to weaken the administration nor to make more easy the claims which have to be made, but at least to satisfy those who have made honest claims and submitted material facts, but who may not have said something which afterwards may be construed as justifying the repayment of the sum. I trust the Minister will accept the Amendment, which safeguards the Fund, but at the same time seeks to do justice by any unfortunate individual who may have made his appeal in good faith.


They say that an ounce of practice is worth a ton of theory, and I would like to submit to the Minister in support of the Amendment an experience that happened in my borough to prove that the application of these details is serious. As a friendly act to ex-service men in that town, it was arranged between the officials of the Stratford Employment Exchange and the British Legion that a dozen ex-service men who were recipients of unemployment pay should be given jobs as polling clerks at the municipal election. That is to say, it was officially arranged, and it must not be thought that it was something which the officials did not know. The men were regular recipients of unemployment pay and had been for some time, but they got 30s. each for the day's work at the municipal election. They drew their unemployment pay for that particular week in the ordinary course, and though they were committing a technical error, they thought we had done them a good turn as ex-service men. Six weeks later they received summonses to appear at the local police-court for taking unemployment pay under false pretences. I know that this is so, because I intervened and went to the legal department of the Ministry of Labour in Whitehall, and, but for the friendly assistance of outsiders with some influence, those men would have been subjected to fines imposed upon them in the local court. As a matter of fact, they were compelled to attend at the Stratford Police Court, and they expressed their regret, which I believe they honestly felt, but the point is that those men honestly did what they did under the impression that that day's pay was not necessarily wages, coming, as it did, just once in a year. But they were subjected to treatment which, obviously, was persecution, and would have been prosecution.

Therefore, although I aim not approving what they did, and am only saying that what they did was under the best of intentions, I am sure the Clause as it is is harsh in its incidence, and the Amendment we are submitting will be beneficial and helpful. We do not want help for people who are deliberately endeavouring to be fraudulent in their intentions, but, in the circumstances indicated, which are actual facts, the incidence of this Clause will inflict hardship upon many people, and, in the light of the actual experience I have put to him, I do hope the Minister will reconsider the position.


It must be plain, I think, that one has to lay down the rule that only persons who are properly qualified shall receive benefit, and it follows that if anybody who is not properly qualified receives it, he must, as a rule, be liable to repay. I am bound to say I do not think that the insertion of the word "fraudulent" is a good Amendment. It is quite true that hard cases arise, and it has been said, I think with some wisdom, that hard cases make bad law, and if you are going to put in the word "fraudulent," it will be necessary in all cases to prove fraudulent intention. I am afraid that would be, in many cases, a practical impossibility, and it would almost cut away the foundation of what must be a rule, that people have prima facie liability to repay what they have drawn in error. But I just throw forward the respectful suggestion to the Minister that it might be possible—I do not know whether it is—for turn to give consideration to some of those cases of which we have heard, by putting in some proviso to the effect that the committee shall have a discretion in certain circumstances to disregard the liability, and deal with the case upon its merits. I do not know whether such a proviso is a possibility, but I respectfully suggest it for the Minister's consideration.


Providing it is not understood as any undertaking on my part, before the Report stage I will see if what has been suggested can be done. I do not want hon. Members to think afterwards that I have not carried out an undertaking if I do not think it possible. The problem in my mind is this. This is really a matter of administrative machinery as apart from principle that I must really get careful advice upon it. I would like if I could to meet the admitted cases of hardship, because I realise that it is hard upon a person who, six or seven weeks afterwards, is asked to repay, even although by instalments. That is what I feel. As hon. Members know, I go under the Gallery very often to make quite sure that what I say is correct. On this difficult matter I would like to be quite sure. One has to consider how far it can really be done and what the effect would really be.

There is admittedly hardship in some cases. When there is a mistake of this kind, we have to ascertain the circumstances, and, humanly speaking, we do not quite know what has happened for two or three weeks. Of course, if it were made a rule that we should let people off, hon. Members opposite will realise that the temptation would be very great indeed not to disclose the facts. The hon. Member for East Middlesbrough

Division No. 427.] AYES. [1.34 p.m.
Adamson, Rt. Hon. W. (Fife, West) Gosling, Harry March, S.
Adamson, W. M. (Staff., Cannock) Greenwood, A. (Nelson and Coine) Montague, Frederick
Ammon, Charles George Grenfell, D. R. (Glamorgan) Morris, R. H.
Attlee, Clement Richard Griffiths, T. (Monmouth, Pontypool) Morrison, R. C. (Tottenham, N.)
Baker, J. (Wolverhampton, Bilston) Groves, T. Naylor, T. E.
Barker, G. (Monmouth, Abertillery) Grundy, T. W. Palin, John Henry
Barnes, A. Hall, G. H. (Merthyr Tydvil) Paling, W.
Batey, Joseph Hamilton, Sir R. (Orkney & Shetland) Pethick-Lawrence, F. W.
Bondfield, Margaret Hardie, George D. Ponsonby, Arthur
Bowerman, Rt. Hon. Charles W. Hayday, Arthur Potts, John S.
Broad, F. A. Hayes, John Henry Ritson, J.
Buchanan, G. Henderson, Rt. Hon. A. (Burnley) Robinson, W. C. (Yorks, W. R., Elland)
Cape, Thomas Henderson, T. (Glasgow) Rose, Frank H.
Charleton, H. C. Hirst, G. H. Saklatvala, Shapurji
Clowes, S. Hirst, W. (Bradford, South) Scurr, John
Compton, Joseph Hutchison, Sir Robert (Montrose) Sexton, James
Connolly, M. Kennedy, T. Shaw, Rt. Hon. Thomas (Preston)
Cove, W. G. Kenworthy, Lt.-Com. Hon. Joseph M. Shepherd, Arthur Lewis
Dalton, Hugh Kirkwood, D. Short, Alfred (Wednesbury)
Davies, Evan (Ebbw Vale) Lansbury, George Sitch, Charles H.
Day, Colonel Harry Lawrence, Susan Smith, Ben (Bermondsey, Rotherhithe
Dennison, R. Lawson, John James Snell, Harry
Dunnico, H. Livingstone, A. M. Snowden, Rt. Hon. Philip
Edge, Sir William Lowth, T. Stamford, T. W.
Edwards, J. Hugh (Accrington) Lunn, William Stephen, Campbell
Garro-Jones, Captain G. M. Mackinder, W. Sutton, J. E.
Gibbins, Joseph Maclean, Nell (Glasgow, Govan) Thurtle, Ernest

(Miss Wilkinson) will agree with me that, of course, one does not want to give inducement to people not to disclose the facts. The pressure upon people is great, and it is quite natural—I am not putting it too high—that they might not search their memories so successfully as they otherwise would if they thought they might get away with it. I have that real difficulty, and, if I may be quite candid, I think it would be hard to devise any method of meeting a certain number of hard cases which exist without opening the door too much to people who might otherwise, as I say, lose control over their memory under pressure of circumstances. I do not want to hold out too much expectation, but, if I can, I shall be only too glad to meet the suggestion, though I am not sure that it will be possible.


I think we shall have to go into the Lobby to record our opinion as to the word "fraudulent," but, in view of what the right hon. Gentleman has said, I would ask my hon. Friends to drop discussion on this Amendment, and satisfy themselves by taking a vote. If I may, I would quote against him the words of Danton which the right hon. Gentleman used against me the other day:

De l'audace, encore de l'audace, toujours de l'audace.

Question put, "That the word 'fraudulent' be there inserted."

The Committee divided: Ayes, 96: Noes, 192.

Tinker, John Joseph Webb, Rt. Hon. Sidney Wilson, R. J. (Jarrow)
Townend, A. E. Wellock, Wilfred Wright, W.
Trevelyan, Rt. Hon. C. P. Westwood, J. Young, Robert (Lancaster, Newton)
Varley, Frank B. Wilkinson, Ellen C.
Viant, S. P. Williams, David (Swansea. East) TELLERS FOR THE AYES.—
Wallhead, Richard C. Williams, Dr. J. H. (Llanelly) Mr. Allen Parkinson and Mr. Charles Edwards.
Acland-Troyte, Lieut.-Colonel Fairfax, Captain J. G. Morden, Colonel Walter Grant
Agg-Gardner, Rt. Hon. Sir James T. Falle, Sir Bertram G. Moreing, Captain A. H.
Albery, Irving James Ford, Sir P. J. Morrison, H. (Wilts, Salisbury)
Appiln, Colonel R. V. K. Forestier-Walker, Sir L. Nelson, Sir Frank
Atkinson, C. Foster, Sir Harry S. Newton, Sir D. G. C. (Cambridge)
Baldwin, Rt. Hon. Stanley Foxcroft, Captain C. T. Nield, Rt. Hon. Sir Herbert
Balniel, Lord Fraser, Captain Ian Ormsby-Gore, Rt. Hon. William
Banks, Reginald Mitchell Fremantle, Lt.-Col. Francis E. Percy, Lord Eustace (Hastings)
Barclay-Harvey, C. M. Ganzoni, Sir John Perkins, Colonel E. K.
Barnston, Major Sir Harry Gibbs, Col. Rt. Hon. George Abraham Perring, Sir William George
Beamish, Rear-Admiral T. P. H. Grace, John Peto, Sir Basil E. (Devon, Barnstaple)
Beilairs, Commander Carlyon W. Graham, Fergus (Cumberland, N.) Pilditch, Sir Philip
Benn, Sir A. S. (Plymouth, Drake) Grant, Sir J. A. Power, Sir John Cecil
Betterton, Henry B. Greenwood, Rt. Hn. Sir H. (W'th's'w, E) Pownall, Sir Assheton
Blades, Sir George Rowland Grotrian, H. Brent. Remnant, Sir James
Bourne, Captain Robert Croft Gunston, Captain D. W. Rhys, Hon. C. A. U.
Bowyer, Capt. G. E. W. Hall, Lieut.-Col. Sir F. (Dulwich) Richardson, Sir P. W. (Sur'y, Ch'ts'y)
Brassey, Sir Leonard Hall, Capt. W. D'A. (Brecon & Rad.) Russell, Alexander West (Tynemouth)
Bridgeman, Rt. Hon. William Clive Harvey, G. (Lambeth, Kennington) Salmon, Major I.
Brittain, Sir Harry Harvey, Major S. E. (Devon, Totnes) Samuel, A. M. (Surrey, Farnham)
Brocklebank, C. E. R. Haslam, Henry C. Sandeman, N. Stewart
Brooke, Brigadier-General C. R. I. Henderson, Capt. R. R.(Oxf'd, Henley) Sandon, Lord
Broun-Lindsay, Major H. Henderson, Lt.-Col. Sir V. L. (Bootle) Savery, S. S.
Brown, Brig.-Gen. H. C.(Berks, Newb'y) Hennessy, Major Sir G. R. J. Shaw, R. G. (Yorks, W.R., Sowerby)
Burman, J. B. Hilton, Cecil Shepperson, E. W.
Burton, Colonel H. W. Hoare, Lt.-Col. Rt. Hon. Sir S. J. G. Simms, Dr. John M. (Co. Down)
Cadogan, Major Hon. Edward Hohler, Sir Gerald Fitzroy Slaney, Major P. Kenyon
Campbell, E. T. Holt, Capt. H. P. Smith, R. W.(Aberd'n & Kinc'dine, C.)
Carver, Major W. H. Hopkins, J. W. W. Smith-Carington, Neville W.
Cautley, Sir Henry S. Hopkinson, Sir A. (Eng. Universities) Smithers, Waldron
Cayzer, Sir C. (Chester, City) Howard-Bury, Colonel C. K. Somerville, A. A. (Windsor)
Cayzer, Maj. Sir Herbt. R. (Prtsmth. S.) Hudson, Capt. A. U. M.(Hackney, N.) Sprot, Sir Alexander
Cecil, Rt. Hon Sir Evelyn (Aston) Hume, Sir G. H. Stanley, Lieut.-Colonel Rt. Hon. G. F.
Chadwick, Sir Robert Burton Huntingfield, Lord Steel, Major Samuel Strang
Chamberlain, Rt. Hn. Sir J.A.(Birm., W.) Inskip, Sir Thomas Walker H. Storry-Deans, R.
Chilcott, sir Warden Iveagh, Countess of Stott, Lieut.-Colonel W. H.
Christie, J. A. James, Lieut.-Colonel Hon. Cuthbert Streatfeild, Captain S. R.
Churchman, Sir Arthur C. Jones, G. W. H. (Stoke Newington) Stuart, Hon. J. (Moray and Nairn)
Clayton, G. C. Kennedy, A. R. (Preston) Sueter, Rear-Admiral Murray Fraser
Cobb, Sir Cyril King, Commodore Henry Douglas Sugden, Sir Wilfrid
Cockerill, Brig.-General Sir George Kinloch-Cooke, Sir -Clement Sykes, Major-Gen. sir Frederick H.
Colman, N. C. D. Lamb, J. Q. Tasker, R. Inigo.
Cooper, A. Duff Lane Fox, Col. Rt. Hon. George R. Templeton, W. P.
Cope, Major William Lister, Cunliffe-, Rt. Hon. Sir Philip Thomson, Rt. Hon. Sir W. Mitchell-
Couper, J. B. Loder, J. de V. Titchfield, Major the Marquess of
Craig, Capt. Rt. Hon. C. C. (Antrim) Long, Major Eric Tryon, Rt. Hon. George Clement
Craig, Sir Ernest (Chester, Crewe) Looker, Herbert William Vaughan-Morgan, Col. K. P.
Crookshank, Col. C. de W. (Berwick) Lucas-Tooth, Sir Hugh Vere Wallace, Captain D. E.
Crookshank, Cpt. H.(Lindsey, Gainsbro) Lumley, L. R. Warner, Brigadier-General W. W.
Cunliffe, Sir Herbert Lynn, Sir R. J. Watson Rt. Hon. W. (Carlisle)
Curzon, Captain Viscount McDonnell, Colonel Hon. Angus Wells, S. R.
Davidson, Major-General Sir John H Maclntyre, Ian White, Lieut.-Col. Sir G. Dalrymple
Davies, Maj. Geo. F.(Somerset, Yeovil) McLean, Major A. Williams, A. M. (Cornwall, Northern)
Davies, Sir Thomas (Cirencester) Macnaghten, Hon. Sir Malcolm Williams, Com C. (Devon, Torquay)
Davies, Dr. Vernon Macquisten, F. A. Williams, Herbert G. (Reading)
Dawson, Sir Philip MacRobert, Alexander M. Windsor-Clive, Lieut.-Colonel George
Dean, Arthur Wellesley Makins, Brigadier-General E. Winterton, Rt. Hon. Earl
Drewe, C Maitland sir Arthur D. Steel- Withers, John James
Edmondson, Major A. J. Malone, Major P. B. Wolmer, Viscount
Elliot, Major Walter E. Margesson, Captain D. Wood, E (Chest'r, Stalyb'dge & Hyde)
Ellis, R. G. Marriott, Sir J. A. R. Wood, Sir Kingsley (Woolwich W.)
Erskine, Lord (Somerset, Weston-s-M.) Meller, R. J. Woodcock, Colonel H. C.
Erskine, James Malcolm Monteith Meyer, Sir Frank
Evans, Captain A. (Cardiff, South) Monsell, Eyres, Com. Rt. Hon. B. M. TELLERS FOR THE NOES.—
Everard, W. Lindsay Moore, Sir Newton J. Mr. F. C. Thomson and Mr. Penny.

Question, "That the Clause stand part of the Bill," put, and agreed to.