§ As from the commencement of this Act the weekly contributions enacted in the First Schedule to the Unemployment Insur- 1097 as payable by any employer in respect of any person employed by that employer and insured under the said Act shall be reduced in manner following, in order that the weekly contribution of the employer and the employed person shall be of like amount, namely, in respect of ordinary rates enacted in the said Schedule, the weekly contribution payable by the employer of an employed and insured person being a man shall be reduced from eight pence to seven pence, and the weekly contribution payable by the employer of an employed and insured person being a woman shall be reduced from seven pence to sixpence, and in respect of the rates of contribution enacted in the said Schedule in the case of persons under eighteen, the weekly contribution payable by the employer of an employed and insured person being a boy shall be reduced from four pence to three pence halfpenny, and the weekly contribution payable by the employer of an employed and insured person being a girl shall be reduced from three pence halfpenny to three pence.—[Mr. Harmsworth.]
§ Brought up, and read the First time.
§ 9.0 p.m.
§ Mr. HARMSWORTHI beg to move, "" That the Clause be read a Second time."
The Blanesburgh Report, on this question of the employers' contribution, states:
No suggestion has been received from or on behalf, of employers that they should be relieved of a share of the contribution.My object in moving this Clause is not that the contribution of the employer should be necessarily reduced, but in order to equalise the employers' contribution with that of the employed. I had hoped to be able to move an Amendment equalising the contributions all round, but that, unfortunately, is out of order, as is also another Amendment to a like effect which was put down by my hon. and gallant Friend the Member for Dover (Major Astor). This is the nearest proposal that it is possible now to put forward for the equalisation of contributions. In the Economy (Miscellaneous Frovisions) Act it is laid down that the State shall only pay three-sevenths of the total contributions, and we cannot, therefore, move any Amendment to equalise all the contributions, because that would require an extra amount from the Treasury; but this proposed new Clause would equalise two of the contributions.9.0 p.m.
I do not know, Captain FitzBoy, how far you will allow me to talk on the equalisation of contributions, but I desire that this proposed new Clause should be 1098 looked at from that point of view. I think it is an essential proposal of the Blanesburgh Report that the contributions of the employer, the employed, and the State should be made equal. One of the hardest and worst burdens upon the industries in the depressed areas, apart from rates, is that of the direct contributions which they have to pay towards these services. They have to pay those contributions whether they make a profit or not, and I feel certain that hon. Members in every quarter of the Committee will agree that, in the case of these depressed areas, the two burdens which we all want to relieve as far as possible are the rates and the direct contributions towards these services. This reduction of Id. in the employer's contribution would not, of course, make a great difference in relieving industry, but it would be a first step, and I hope the Minister, when he replies, will give some indication as to whether, when the Fund is solvent, or at any rate nearer solvency than it is at the present moment, we may hope that, firstly, the employer's contribution may be reduced, and that, secondly, we may look for a fulfilment of the Blanesburgh Report and an equalisation of the contributions. The shifting of the burden from the Exchequer on to the employer is no real economy. The money has to be collected, and, if it is collected from, the employer, it is an even more direct burden than it can be upon the State. I should be called to order if I entered too fully into that matter, and I do not want to go back over the arguments that have ranged from one subject to the other in this House. I want merely to ask the Minister, when he replies, to tell me whether, when the Fund approaches nearer to solvency, when its indebtedness is reduced by, say, £5,000,000 or £6,000,000, and he sees in the next year, or in the next three years, a prospect of its becoming solvent— [Interruption]. I admit that no prophecy can be made in that direction. If things go badly, this matter will not enter into the problem at all, but, if they go well, will the Minister reduce the contributions to equal amounts? They were equal in the original Unemployment Insurance Bill, and they would never have been altered had it not been that the state of affairs was abnormal. It may be still abnormal, but I suggest to the Minister that, when it nears normality again, 1099 the contributions should once more be made equal. I move this Clause, not in the hope that the Minister will accept it, because I have no doubt that the state of the Fund will not allow of its acceptance, but in order that we may have an answer from him as to his future course of policy.
§ Mr. J. JONESI feel that the hon. Member for the Isle of Thanet (Mr. Harmsworth) has put down this Clause in order that he may be able to say his piece. He tells us that he does not really mean it, but is only asking whether, within three years from now, there may be some hope that he will get a satisfactory answer to his question. Some of us on these benches do not believe in the Unemployment Insurance Bill at all; we have always stood for the principle of the State recognising its responsibilities to its citizens. The unemployed workman is unemployed almost entirely through circumstances over which he has no control. The principle of unemployment insurance was established as a compromise between the contending ideas on the subject. It was accepted in a good spirit and feeling at a time when circumstances were more favourable than they are to-day, and the principle was laid down of equal contributions all round. I hold peculiar views, different, perhaps, from those of some of my friends. I hold that, whoever pays, the worker pays the lot. The parson prays for all; the soldier fights for all; the lawyer pleads for all; but the worker pays for all.
In this particular case it is only a shifting of the burden—a little bit of sugar for the bird. Supposing that the employer pays more, however much more he pays goes on to the cost of the goods he has to sell. So far as the State is concerned, who finds the money for the State? The people who produce the wealth of the State. Therefore, in the final analysis, the men who produce the wealth of the country have to foot the bill, however much you may jiggery-pokery about with the game, however much the Chancellor of the Exchequer may bring up his figures to prove that everything in the garden is lovely, or unlovely. The hon. Member who has moved this Clause is asking for a promise for the future. He lives on futurity. He 1100 does not want this Clause to be pressed if he can get a satisfactory answer to his question: is it to be next year, some day, ever? He asks, "Can I get an assurance from the Minister that, when he has money enough to spare, he will give me some of it, because I am speaking for the employers? That is really what he says he is doing. There cannot be any equality between the employer and the workman. In the great majority of cases the workman is certain to be out of work at some period of his working life. The employer is not sure to be out of work. He may be out of work, but he will never be out of benefit. There is no waiting time for him except when he sends his notice in to his bankers or his brokers to deliver the goods.
To talk about equality between the workman and the employer is to talk nonsense. There is no such equality and there cannot be under existing circum stances. There is no equality of bargaining power between them. If there were an Insurance Bill here for the purpose of finding dividends for employers, the benches opposite would be unanimous in giving them all the advantages that could be given to see that their dividends were guaranteed all the year round every year from 1st January to 31st December. It is only when the workmen's interests are being considered that we have these nice questions of relations in the matter of the Insurance Fund. We pay insurance to protect the State against the possibility of invasion. No one objects to paying a share of that, if we do not pay our share we are supposed to be un patriotic, enemies of our country, friends of every country but our own. Poverty is a bigger enemy than Germany ever was. What are we going to do to keep this fund solvent? It does not matter how insolvent you make the victims of it. The fund itself must be kept right, and in order to keep it right we must cut off here and cut off there. There was a very sinister argument advanced by the Minister in response to another Amendment. He talked about the agricultural workers having some relationship to the Bill. As a matter of fact he knows it is not the agricultural workers because they do not come under the Insurance Act at all. What he really means is that at harvest time when there are not sufficient ordinary agricultural workers—
§ Mr. JONESI quite appreciate your ruling, Sir, but I was only pointing out as an illustration that when we ask for an extension of the Clauses of the Bill to protect the ordinary working man we cannot have it. It is turned down. But when it comes to suit some sectional interest which has nothing to do with the Bill we are asked to extend it to enable it to carry on. The agricultural industry does not come under the Bill, but when it is busy the town worker can be drafted in to supply the surplus labour that may be necessary for the time being. They are going to be protected, but the ordinary workman gets no protection whatever. The previous rules that entitled him to benefit are going to be cut down, and instead of getting the benefit he ought to get out of the Bill they are being gradually pilfered from him. On those grounds we object to this sort of equality. The only men who are going to be punished by the proposition of the Government are not the employers but the workmen, who in the main will have to foot the Bill and carry all the consequences of unemployment to themselves and their family.
§ Sir A. STEEL-MAITLANDI am not quite certain from what the last Member who addressed the Committee said⁁
§ Sir A. STEEL-MAITLANDThe last hon. Member who addressed the Committee, whether he supports the Amendment or not. It is true, as the Mover anticipated, that it is not possible for me to accept it at present. It is true that under the old original scheme of the Insurance Act the employer and the workman paid equal contributions. That was the fundamental idea, and variations only occurred to save fractional contributions. If it were possible to reduce the employers' contribution by a penny, as was contemplated, I should be very glad, but at present it is not possible to do it. I think the Mover of the New Clause realised that that would be my attitude, and indeed no other attitude could conceivably be maintained by anyone who is responsible. Hon. Members may perhaps be interested to know how the finance of the Fund would 1102 run. On an unemployment figure of about 1,100,000 it would mean that at present we should be making a deficit on the scheme of about £3,250,000 a year. If, however, the proposal of the hon. Gentleman were carried into effect, that deficit would be increased to about £5,250,000 a year. In other words, far from paying off debt, the debt would be increased to the extent of that figure. As unemployment decreased the conditions would become more favourable. With an average unemployment figure of 1,000,000, that is to say, about 9 per cent. of unemployment, under the scheme of the Bill income and expenditure will balance, but under the hon. Member's proposal there would still be a deficit of £2,000,000 a year, and that without taking into account the payment of interest on the existing debt. If unemployment, judged by the live register, decreases to about 900,000— that is pretty nearly equivalent to 8 per cent. of unemployment— under the scheme of the Bill there will be a surplus of about £3,000,000 a year, and on the hon. Member's proposal there would be an apparent surplus of £1,000,000, but if one takes into account interest on the debt, it would then only just be paying its way.
Those are the broad features of the financial situation at present. They are bound to vary according to different conditions of unemployment, that is to say, if there is a greater number on short time and a lesser number who are fully unemployed, the conditions are rather more favourable because not so much benefit is paid. Similarly, variations occur according to the differing proportion between men and women, but the broad figures are those I have taken. Under the scheme of the Bill there is a deficit of about £3,000,000 with a live register of 1,100,000, a balance with a live register of 1,000,000, and a surplus of about £3,000,000 with a live register of 900,000. That being so, it clearly would not be prudent of me to accept a reduction of what has sometimes been known as the employers' penny to bring the employer's and the workman's contribution to parity. If and when it is practicable I should be very glad indeed to do so. I do not share the views of the hon. Member who has just spoken in thinking a burden of this kind means nothing to industry. I think it means a great deal. The extra burden cannot be put on the 1103 price, and I realise that quite well. If and when the improvement continues, as I hope it will and as personally I expect it will, unless anything unforeseen occurs, when the debt is reduced to about £7,500,000 that penny will be taken oft. Until then, I cannot hold out any hope of so doing. What would be needed in order to take it off with the debt still at the higher figure would be to make sure that after the income had been reduced by the amount of that penny, we should still be able to go on paying oft debt at a sufficiently rapid rate. For that reason, I cannot hold out any particular date as one on which this first penny should be taken off. There is power to do so when the debt is reduced to £7,500,000, but at any stage before that, as I have said, the surplus under any scheme would have to be sufficient to make me feel that I could continue to reduce the debt after relinquishing the income represented by that penny. That is the state of the finances of the scheme at the present moment, and it is for that reason that I cannot offer to meet any party in the reduction of any contributions now. I only hope that the situation may improve so rapidly that I may be able to do it before a long interval has passed.
§ Mr. HAYDAYI have listened to the most extraordinary speech of the right hon. Gentleman, and I think Members of the Committee must have been somewhat astonished at the new attitude he now takes up. The attitude that we have been taking up all along is that the direct charge on industry was harsh, and that the State should take over part of that burden. The right hon. Gentleman now says, "I agree. The charge on industry is great," and yet he is defending his Government in paying less than their one-third share. The fact that the State pays less than a one-third share makes it necessary that the employer should pay more—or the amount that they are paying now. If the State paid an equal share, the employer's payment might be taken off, and so could part of the workman's contribution. I do not think We should take it as coming wholly from the heart when the Minister says "I would like to do it; I know that this direct charge presses on industry," and at the same time justifies his own Government paying less than one-third of the contribu- 1104 tion. But is it correct to state that the principle of equal contributions from employer and insured person was honoured originally? We now quote the Act of 1920 as being the principal Act. The Act of 1920 does not provide equal contributions from the insured person generally and the employer. In the case of men, yes, 4d.—4d. In the case of women—3½d. in respect of the insured person, and 3|d. in respect of the employer. In the case of young persons — girls l½d., and 2d. the employers, and youths 2d.—2d.
§ Sir A. STEEL-MAITLANDI hoped I had made it quite clear—perhaps I did not— that it was equality, except in those cases where fractions of a penny were concerned.
§ Mr. HAYDAYI cannot see a fraction of a penny, except that you call the fraction of a penny an equal half.
§ Sir A. STEEL-MAITLANDYes.
§ Mr. HAYDAYBut that does not easily come in. It does not come in as an indivisible fraction.
§ Sir A. STEEL-MAITLANDI only wish to make it clear; I do not want to be misunderstood. When it came to the case of women it was 3d. and 3½d. If it were equal, it would have been 3½d. each.
§ Mr. HAYDAYThe right hon. Gentleman moist not try to hit me in that way, because if it were equal it would have been 3½d. each. If the insured person was paying equally with the employer, it would have been 3½d. in this case.
§ Sir A. STEEL-MAITLANDMay I correct the hon. Member? To produce a total contribution from employer and employé of 6½d., if it was to be shared equally, they would equally pay 3½d.
§ Mr. HAYDAYStill, it was never worked out at that. It was done in order to show that the employer had a greater responsibility, because at that stage the State only paid 2d. in the case of men. It did not mind going into some of these little intricacies, because the payment of the State came to about one-fifth of the total and because the State only paid one-fifth it called for an extra contribution from the employers. My only point is, that it is not true to say that the principle until recently has been one of equal contribution from employers and insured persons. It is not true, in 1105 a general sense, because from 1920 there has been a difference, and that difference will remain until such time as the State recognises its full share of responsibility, and undertakes one-third of the contribution, which is the only justifiable attitude as long as you have a three-party system in an insurance system. The State creates the cost, the States makes the Regulations, the State lays down all the circumstances and controls the whole of the funds, and, surely, it is not asking too much that if the State wants to equalise the burden and reduce the employers' contribution, with which proposal I agree, it must make up the difference. It must not take it from the employer and reserve its present position that if it took it from the employer it would mean a diminution of benefits to the insured person.
I do not suppose that the hon. Member for the Isle of Thanet (Mr. Harmsworth) would wish that at all in his Clause. I agree, that as long as you have payments at all, and we cannot get a non-contributory scheme, and we have a scheme in which the employers, workmen, and the general taxpayers have to contribute, we must have a uniform contribution. If there are three parties let each pay a one-third share. I only rise to call attention to the fact that the employers have always, since 1920, paid more than the insured person. This is not a new incidence which has been introduced as the Measure has developed. The principle may have been enlarged, but it has only been enlarged in so far as the State has contracted or restricted its own obligations. It must not be thought that the insured person is not paying sufficient if the employer is paying too much, but that the State is calling upon the employer to pay a share that ought to come out of general taxation rather than out of direct taxation upon industry.
§ Question, "That the Clause be read a Second time," put, and negatived.