HC Deb 06 December 1927 vol 211 cc1207-28

The first two Amendments on the Paper—that in the name of the hon. Member for the Gorbals Division (Mr. Buchanan) and other hon. Members, in page 12, line 6, to leave out "6d." and to insert instead thereof "3d."; and that in the name of the hon. Member for North Battersea (Mr. Saklatvala), in page 12, line 6, to leave out "6d." and to insert instead thereof "1d."—should be discussed together, and the second one may be moved if hon. Members accept the principle.


I understand that your ruling, for the guidance of the Committee, is that we should speak on both Amendments and have a separate division on each.


I think the two Amendments are so interwoven that we cannot have a separate discussion on them, but, if desired, we can have a separate division.


I beg to move, in page 12, line 6, to leave out "6d." and to insert instead thereof "3d."

I do not expect that this Amendment will meet with much opposition from the Government Benches. I do not think that this is an Amendment on which there can be any real opposition. One of the main principles in this Bill—it has been the subject of discussion not once but many times since the Bill was introduced, both during Second Reading and in Committee—is that we are now creating a new class of persons between the ages of 18 and 21, and that these persons are to be in receipt of benefit differing entirely from the benefit they formerly received. I should like, briefly, to state, not because the Committee need it but in order to co-relate my own facts, that the benefits for young persons between the ages of 18 and 21 were 18s. in the case of men and 15s. in the case of women. The Government have now come along and have proposed sweeping reductions in benefit in respect of these persons, namely, from 18s. to 10s. and from 15s. to 8s. respectively. It is quite true that by amendment these have been modified, but they still remain substantially true. If the benefits are to be reduced by such sweeping reductions we are entitled to ask that the contributions should be reduced in proportion. I do not speak for my own party, nor have I consulted them, but I think I should be speaking for them if I said that if they had to choose between the contributions and the benefits remaining as they were and the proposed benefits and a reduced contribution, they would prefer the former. We would, of course, prefer a non-contributory scheme, or that contributions should generally be lower, but if we had to choose between two evils I should say, unhesitatingly, that the great majority of our party, if not all of them, would, sooner than face the evil of the low benefits now proposed in respect of this class of insured person, accept the lesser of the two evils, namely, the payment of the higher contribution.

We wish to say to the Minister in charge of this Bill that he ought to justify the position which he has taken up. How can he propose sweeping reductions of benefit in respect of insured persons between the ages of 18 and 21 and not, at the same time, equivalently reduce their contributions? Surely, if it be the case that he can justify the reduced amount of benefit he will only be doing common justice if he decides to reduce the contribution. Under the old Act the contributions paid by a person over 18 between 18 and 21 was in the case of a man 7d., and in the case of a woman 6d. Now the Minister says, "we are taking 7s. a week from you in benefit in the case of a woman, and 8s. in the case of a man." And yet they do not propose to reduce the amount of contribution by 1d. The percentage basis is totally unjustifiable. They are roughly speaking proposing to reduce the benefit by 45 per cent., but in the case of the contribution they only reduce it by less than 10 per cent. The Minister cannot justify that and we ask that the contribution ought to be reduced from 6d. to 3d. in regard to the persons concerned. That reduction of contribution would be more equivalent to the reduced benefits to be paid.

The Blanesburgh Committee's Report, whatever its faults or its value may be, cannot be quoted in this connection. I hope the Minister will justify his attitude on the two joints I have raised, namely, that if sweeping reductions of benefit are justified he ought to make a corresponding reduction in contributions. Another point emerges. Under the Bill as originally drafted there was one class of persons between the ages of 18 and 21, but he has now divided those persons into three classes with different grades of benefits but the same contribution. A person between the age of 18 and 19 will pay the same contributions but receive less benefit than a person between the ages 19 to 21. We desire that the ratio of contribution to benefit should approximate more nearly to the justice of the case and we hope the right hon. Gentleman will accept our Amendment in that spirit.


This Amendment is conceived on unsound insurance principles. The rate of contribution in the earlier periods of life are not intended to be exactly proportionate to the benefits likely to be drawn during those periods of life. Though it is true that the upper years do not have quite the same adverse effect upon employments as they do upon health, nevertheless it is true that there is a tendency for the older people to suffer more from unemployment than the younger people. Therefore, when the fund is running normally we should be building up some reserves out of the contributions of people when they are young which will help the same people when they become old. The fund is in debt and is not running in the normal way, as we hope it will do eventually, but the principle is sound that the contributions during the earlier period of life ought to be used to build up a reserve against the increased unemployment which people suffer during later years. There is no strict ratio between the contributions paid and the benefits received in particular years, but as the younger people do not earn as much as those older their contributions should be rather less. The broad principle remains, and it is sound, that the contributions paid in the earlier years should go to build up the reserve against unemployment in the later years, and the attempt of this Amendment to fix the rate of contribution in proportion to benefits on the lines suggested is unsound.


I was anticipating that the Minister would have risen to reply. Two points have been raised by the hon. Member for Reading (Mr. H. Williams). He suggests that it would not be within the scope of a proper scheme of insurance to reduce the contributions in these cases because of the youth of the insured person, and, secondly, that when the Fund was running normally there might be some justification for the revision. I would like to know whether there really has ever been, strictly speaking, an insurance scheme at all in the sense of insurance since 1920. On account of the bewildering methods of succeeding Governments we have got the business into its present terribly tangled condition. I would like to tell the Committee something of the progress made and the variations adopted from time to time in regard to contributions. I do not agree with the idea that because you are suggesting a lower scale of benefit you should suggest some correspondingly lower scale scale of contribution. The Fund and the scheme has got into its present position through the unbusinesslike methods of different Governments from 1920 onwards, with the exception of the short period of Government in 1924. I think I can justify that statement. The scheme was started in 1920 with a 4d. contribution from the worker, 4d. from the employer and one-fifth from the State. Benefits were then fixed for which no financial provision had been made. The State had only one-fifth obligation of the whole amount contributed. You had no sooner got into 1921 than you had to come to the House and ask for money. You had to do that, otherwise there would have been great difficulties in the land. [HON. MEMBERS: "The coal dispute!"] It had nothing to do with the coal dispute. It was at the end of 1920 that you passed your Act, and you passed it knowing that there was going to be an attack made on wages in 1921.

Mr. H. WILLIAMS rose

4.0 p.m.


I would rather the hon. Member did not intervene now. The Guillotine, which has been a most unfair method, has stifled discussion, and I am desirous of making my point. In 1921 you raised the contribution. In November, 1920, the amount of contribution was 4d. In April, 1921, it was increased to 5d. You put one penny on the man's contribution and 2d. on the employer. You put the employer's payment up to 6d. as against 5d. for the man; but the State still said: "We will stick to our one-fifth proportion of the whole." You had not got through 1921 before you came again to the House with the No. 2 Bill, and you said to the workmen: "At the end of 1920 we asked for 4d. from you. We are going to raise your contribution to 7d." From April, 1921, until towards the autumn of 1921 you put another 2d. on the men and made their contribution 7d. and the contribution of the employer 8d., but the State contribution remained at one-fifth proportion of the whole. During the discussion of the Act of 1921 the Government speaker said that they expected the deficiency period to be wiped out by the end of July, 1923—about as hopeful a proposition as that made by our present Minister, that he hoped to get down to 6 per cent. of unemployment by the early part of 1930.

The MINISTER of LABOUR (Sir Arthur Steel-Maitland)

I never stated that.


I am sorry if I misquoted the right hon. Gentleman. I have no desire to do so, but I understood him to say that on the figures he had got out as to the 30 contributions and so on, he would expect by April, 1930, that the proportion would then be about 6 per cent.


Eight per cent.


I stand corrected. It is about as hopeful; I remember the Minister saying that any figure would answer the purpose in order to arrive at your average.


The hon. Member must not willingly misrepresent me, and I hope he does not.


I have no desire to do so.


What I did say was something like the last sentence the hon. Member has used, although it is difficult to recognise it. In my statement with regard to the 6 per cent. figure, taken by the actuary, as the basis of his scheme, I was talking as between 5 per cent., 6 per cent. or 7 per cent., and I said that it seemed to me that 6 per cent. was at least as reasonable, or the most reasonable figure to take.


I stand corrected by the Minister, but I still believe that he said one figure was as good as another.




Then the right hon. Gentleman expected the deficiency period to end by July, 1923, by making a heavy contribution, but by the 1922 Act the contribution was again raised. The figure was 4d. at the end of 1920, but in 1922 they introduced a Bill to increase contributions up to 9d. for men and 10d. for employers, and the State then said, "We can no longer go on, and we will now undertake to pay one-fourth of the contributions of man and employer combined." Still the deficiency was not likely to be cleared off, and in the 1923 Act they arranged for a continuance of those rates, namely 9d. for men and 10d. for employers, and the State's one-fourth until the deficiency period was cleared off, and afterwards to go to one-fifth. That was the definite pledge embodied in an Act. The contributions of the insured person and the employer had to remain the same, because of the deficiency then showing. But the Labour Government in 1924 said, "We can no longer go on with this one-fifth or one-fourth. We must now be a one-third partner in every sense of the word," and in order to help the fund the general taxpayer had to pay his share, one-third of the total.


In 1922.


If the hon. Gentleman will hunt up the Acts, he will find that it is not so. In Section 5 of the Act of 1924 it will be seen that, for the first time, the State raised its contribution to one-third. The 1925 Act made a variation. Twopence was taken off the worker and the employer, and merged into the 4½d. chargeable under the Widows, Orphans and Old Age Contributory Pensions Act, and then again they went back to the one-fourth. That was followed by the Economy Act. I want to show that the state of the Fund—I suppose it is the only argument for reducing the benefit of these young persons—has been deliberately brought about by the attitude of the Governments since 1920, with the exception of the Government of 1924, for in April, 1926, when the Economy Bill was introduced, we all remember very well that the Chancellor of the Exchequer issued a White Paper, in which he said: The Exchequer contributions in 1925–26 at the 6¾d. rate is estimated to amount to £13,550,000. Under the Act of 1925, it would during 1926–27 have been £15,900,000, taking the 8d. rate, or, if the 9d. rate had been payable throughout the year, £17,750,000. Under the proposals in the Economy Bill the Exchequer contribution to the Unemployment Fund in 1926–27 is estimated at £12,160,000, a saving as compared with the provisions of the Act of 1925 of £3,740,000 per annum at the minimum or £5,590,000 per annum at the "maximum. That is the present state of affairs as far as the Government are concerned. In 1920, they said 4d. would meet the responsibilities and obligations. They used up £22,000,000 from the previous Unemployment Fund accumulated since 1911. They had continually to raise the contributions until they reached the sum of 9d. for men and 10d. for employers, right away through, with the one exception that they only paid from the Exchequer one-fifth of the contribution. They got into a much greater hole until they eventually raised it to one-fourth. In 1924, it was raised to one-third, and then, under the Economy Act, because they had impressed the desire for economy on the Fund with sufficient emphasis, they took another £5,500,000 a year from it, and then, when they are confronted with the results of their inquiry, they say, "Here is the deficiency which we thought would end in July, 1923. We charged a high contribution in the hope that it would be cleared off. We are now at the end of 1927, during which year the deficiency has gone up almost to its limit, £22,000,000 now and £23,500,000 in June of the present year." They are gradually wiping it off, but in order to wipe it off, and cover up the sins of their omission to pay their fair quota to the Fund, the Government search round and create a new class, and on that new class must fall the full force of meeting, or hoping to meet, the deficiency on the Fund.

They are reducing the benefit because they think it is too much money for a man between 18 and 21 to live upon, and they are reducing the amount to a woman between 18 and 21 because they feel that she has too much money, or too much inducement to refrain from genuinely seeking work. They have reduced their benefit and retained the greater part of their contribution. They have reduced the benefit to the class between 16 and 18 without at all reducing the contribution, so that the full force of the Government's Economy Act of last year, withholding £5,500,000 from the Fund, must fall upon this unfortunate class of unemployed persons, and, to my mind, it is not playing fair with the people of the country. Opportunity will be afforded at a later stage for remarks to be made of a more general and, I hope, of a more sweeping character than in this restricted area of discussion under the Amendment, but I do feel that this is a case where the Minister might not have turned the blind eye to the Blanesburgh Committee quite so much, because the evidence which the industrialists submitted—my hon. Friend the Member for Nelson and Colne (Mr. A. Greenwood) and myself—was that they should cut, practically, the insured person's contribution by one-half and the employer's by one-half, and whatever balance was necessary should be made up by general taxation, to which employers and workmen, like everyone else, had to pay their proportion.

That would have eased industry; it would have taken the load off it, instead of which they still press the burden on industry, and carry it on to the unfortunate who are unemployed, and perhaps, because of this top weight, throw this taxation on the industry itself. I think it is about time for the Government to look at these things in a bigger way, and not take up the attitude of "How much can we ask for? How little can we give?" It is not to the credit of legislators such as Britain can produce in certain emergencies when money can be found to destroy. This is a case where money ought to be found to ease the burden upon the individual contributor and upon industry in general, and there should be no making use of a deficiency in the fund in order to bring down the standard of existence by reducing the benefit payable to unemployed persons.


In so far as the argument of the hon. Member was directed to showing that contributions had tended to increase since this scheme was initiated, I think it only right to remind the Committee, if, indeed, they need reminding, that during the period from 1911 to the present time there has been already a very considerable increase in the benefits that the scheme has provided. In other words, at the various stages when the contributions have been increased, there has been a very considerable increase of benefit. In 1921, we had for the first time the acceptance of the principle of dependants' benefits. It is true the contributions up to 1920 were only 6¾d. altogether, from the employer, the employés and the State. The employer paid 2½d., the employé 2½d. and the State 1¾d. At that time the benefit was only 7s. for adults, and 3s. 6d. for those between 17 and 18. Therefore, when the hon. Gentleman points, as he is entitled to point, to the tendency of contributions to increase, it is only fair, in order to have a true picture of the history of this scheme from its inception to point out that benefits have also increased, and that other classes have been added to the scheme, such as adult dependants, and dependant children, which, of course, have increased the claims and charges upon it.

Also, there is this further point. The Act of 1923 dealt with the special periods and gaps, with which in those days we were so familiar. The gap has been altogether abolished and we have put an end to the system of successive special periods, which were subsequently merged in the whole system of extended benefits. It is also right to point out, in regard to the Act of 1924, to which the hon. Member referred as accepting the principle of equal contributions, that in Section 5 it makes it clear that these contributions only come into effect when the deficiency period has come to an end. It was only upon those terms that the principle of equal payments was adopted. I only intervene at this moment in order that the Committee may have something like a fair picture of the whole scheme in relation to contributions and benefits, and in order to show that while contributions have varied benefits have varied too.


Unlike the hon. Member for Reading (Mr. H. Williams), I am not a representative of the industries of this country, but I am actively engaged in industry and possibly I might be permitted to intervene in this Debate in order to set at rest the mind of the hon. Member for West Nottingham (Mr. Hayday) as regards the burdens which are imposed on industry by these contributions. So far as I am concerned, and I think most industrialists will agree with me, it makes absolutely no difference to industry what we call contributions. They all come ultimately out of the productive industries of the country. It does not affect us in the least whether you call it the employers' contribution, the men's contribution or the State's contribution, and that renders a discussion such as this really quite useless, so far as industry is concerned. The hon. Member for West Nottingham also brought forward another remarkable fallacy—namely, that it is possible for a Government to be generous or mean. His peroration mainly consisted of implying great moral fault on the part of the Government for not being generous in disposing of what he terms State money.

If there is one thing more certain than another it is that it is utterly impossible to be mean or generous in relation to other people's possessions, and I think we ought to disabuse our minds at the start of a discussion like this of the extraordinary fallacy that the State is an individual who has money which he contributes, either liberally or meanly, towards the relief of the destitute. Reverting now to the really important point, the scale on which the contributions are divided between the employers, the men and the State, I would urge on the Committee that, so far as industry is concerned—I mean the real industries of the country—it does not make any difference whatsoever whether you call them by one name or another. Indeed, if you were to consult the employers of labour in this country you would find that they would be perfectly willing to raise the wages of their men by the amount of the employers' contribution, on condition that the men paid the whole lot. Furthermore, I myself, and certainly very many other employers of labour, would be perfectly willing to apply the same principle to what is called the State contribution and to raise the men's wages per week by the amount of what is now the employers' contribution and the State's contribution, on condition that the men paid the whole lot. That would prevent the men thinking they were getting something at somebody's else's expense.


I do not want to intervene for more than a moment or two in the discussion between the hon. Member for Beading (Mr. H. Williams) and the hon. Member for West Nottingham (Mr. Hayday). The hon. Member for Mossley (Mr. A. Hopkinson) has just spoken as an industrialist, and I should like to read a few words from a letter I have received from the managing director of a very large industrial firm. This firm complain very bitterly about the Schedule and take the view of the hon. Member for West Nottingham rather than that of the hon. Member for Mossley. They complain bitterly that the whole Bill was based on the Report of the Blanesburgh Committee, which unanimously recommended that it should be a contribution of one penny a week for a period to wipe off existing debts; and they go on to analyse the whole of the contributions, including the one now under discussion. They object to them according to this letter on this ground that they do not carry out the principle of equal contributions. While adopting in full the principle of reducing benefits for employés between 18 and 21, the Bill, they say, only partially carries out the recommendation to reduce contributions; and ignores the general recommended reductions in contributions. These general reductions, they say, would mean a relief of £6,000,000 a year to industry; £4,000,000 to employers, and £2,000,000 to employés. With no desire to be disrespectful to the hon. Member for Mossley, who appears to think he is the only industrialist in the House, I prefer to base my opinion on the premises in this letter from the head of a large engineering firm having branches in Manchester, Leith, Edinburgh, Glasgow, and other places. I disagree with the Schedule.

Let me point out what has been happening. It is proposed in the Blanesburgh Report that for a young man or woman between the ages of 18 and 21 that 4d. should be the normal contribution, and Id. for the deficiency period. At present they pay 7d. The proposal in the Bill is that they should pay 6d. I take the view that benefits ought not to be cut down unless the contributions are cut down. The figures in the Schedule are wrong. It would have been much better, in my judgment, for the State to have squared up to the idea in the proposed Measure for 1928, that the man shall pay 7d., the employer 8d., and the Exchequer—and this is a point which has not yet been made—8d. It would be much better, because there can be no doubt that certain industries in certain areas are feeling the weight of this lopsided scheme. This view of a great industrial firm may tend to correct the one-sided speech of the hon. Member for Mossley.


I did not quite appreciate the significance of the remarks with which the hon. Member for Mossley (Mr. Hopkinson) commenced his speech. I represent my constituency; apparently he represents his own firm. I do not think it is quite right for one hon. Member to assume unparalleled virtues for himself and impute motives to others. The one point I wish to deal with is this, that the rate of contributions settled by the Unemployed Workers Dependants Act, 1921, remained unaltered until 1925. To that extent the account which the hon. Member for West Nottingham (Mr. Hayday) gave of the history of these contributions was inaccurate, and if the hon. Member cares to study the document I have in my hand at the moment he can find out the accuracy of the statement I have made. The other point to which I wish to refer is that the coal dispute of 1921 completely wrecked the Unemployment Insurance Fund, and that the new contributions came into operation actually on the 3rd July, 1921. When I put that point, the hon. Member suggested that I was inaccurate, but if he will study the facts he will find that it was the coal dispute of 1921 which wrecked the finances of the Fund.


I cannot really understand the hon. Member for Reading (Mr. H. Williams). I have here the Unemployment Insurance Act, 1923, and in regard to rates of benefit and contributions, Section 4, Sub-section (2), says: Notwithstanding any enactment to the contrary, the rates of contribution in force at the commencement of this Act shall remain in force after the end of the deficiency period until such date as the Minister may by order prescribe, but not being a date later than the first day of the insurance year commencing next after the end of the deficiency period, and after the date so prescribed the contributions payable by employed persons and their employers shall be at such reduced rates to be prescribed by Regulations made by the Minister with the consent of the Treasury, but not in any case exceeding the rates set out in the First Schedule to this Act, as appear to him from time to time to be necessary for the purpose of providing for the payment of benefit at the rates in force at the date aforesaid. I must leave the point with the House. The hon. Member says that the Act is

wrong, that he has further statistics which I might care to look at. I prefer to look at the Act, and I say that the 1923 Act carried over the same contributions and the same benefits as were provided in the Act of 1922. There is no getting away from that. There is the Section of the Act; I have read it. A similar statement was made during the Debate on the Economy (Miscellaneous Provisions) Act last year. It was never questioned. One can never do better than quote the exact words of the Act.

Question put, "That '6d.' stand part, of the Schedule."

The Committee divided: Ayes, 196; Noes, 127.

Division No. 439.] AYES. [4.28 p.m.
Acland-Troyte, Lieut.-Colonel Erskine, Lord (Somerset, weston-s.-M.) Lister, Cunliffe-, Rt. Hon. Sir Philip
Agg-Gardner, Rt. Hon. Sir James T. Everard, W. Lindsay Locker-Lampson, G. (Wood Green)
Ainsworth, Major Charles Falle, Sir Bertram G. Luce, Major-Gen. Sir Richard Harman
Applin, Colonel R. V. K. Fanshawe, Captain G. D. Lumley, L. R.
Apsley, Lord Fermoy, Lord MacAndrew, Major Charles Glen
Ashley, Lt.-Col. Rt. Hon. Wilfrid W. Forestier-Walker, Sir L. McLean, Major A.
Atholl, Duchess of Foxcroft, Captain C T. Macnaghten, Hon. Sir Malcolm
Barclay-Harvey, C. M. Frece, Sir Waiter de MacRobert, Alexander M.
Barnston, Major Sir Harry Fremantle, Lieut.-Colonel Francis E. Maitland, Sir Arthur D. Steel-
Beamish, Rear-Admiral T. P. H. Ganzoni, Sir John Makins, Brigadier-General E.
Benn, Sir A. S. (Plymouth, Drake) Gates, Percy Malone, Major P. B.
Bethel. A. Gibbs, Col. Rt. Hon. George Abraham Manningham-Buller, Sir Mervyn
Betterton, Henry B. Gilmour, Lt.-Col. Rt. Hon. Sir John Margesson, Captain D.
Boothby, R. J. G. Goff, Sir Park Meller, R. J.
Bourne, Captain Robert Croft Grace, John Meyer, Sir Frank
Braithwaite, Major A. N. Grant, Sir J. A. Mitchell, S. (Lanark, Lanark)
Bridgeman, Rt. Hon. William Cllve Grattan-Doyle. Sir N. Mitchell, W. Foot (Saffron Walden)
Briggs. J. Harold Greene, W. p. Crawford Mitchell, Sir W. Lane (Streatham)
Brittain, Sir Harry Gretton, Colonel Rt. Hon. John Monsell, Eyres, Com. Rt. Hon. B. M.
Brooke, Brigadier-General C. R. I. Grotrian, H. Brent Moore, Lieut.-Colonel T. C. R. (Ayr)
Broun-Lindsay, Major H. Gunston, Captain D. W. Moore, Sir Newton J.
Brown, Col. D. C. (N'th'I'd., Hexham) Hacking, Douglas H. Morrison, H. (Wilts, Salisbury)
Brown, Brig.-Gen. H.C.(Berks, Newb'y) Hall, Lieut.-Col. Sir F. (Dulwich) Murchison, Sir Kenneth
Buchan, John Hall, Capt. W. D'A. (Brecon & Rad.) Nelson, Sir Frank
Burman, J. B. Hammersley, S. S. Nicholson, Col. Rt. Hn. W. G.(Ptrsf'ld.
Cadogan, Major Hon. Edward Hanbury, C. Nield, Rt. Hon. Sir Herbert
Campbell, E. T. Hannon, Patrick Joseph Henry Nuttall, Ellis
Cassels, J. D. Harmsworth, Hon. E. C. (Kent) Oakley, T.
Cautley, Sir Henry S. Harvey, G. (Lambeth, Kennington) Ormsby-Gore, Rt. Hon. William
Cecil, Rt. Hon. Sir Evelyn (Aston) Harvey, Majors. E. (Devon, Totnes) Pennefather, Sir John
Chadwick, Sir Robert Burton Haslam, Henry C. Penny, Frederick George
Chamberlain, Rt. Hon. N. (Ladywood) Henderson, Capt. R.R. (Oxf'd, Henley) Peto, Sir Basil E. (Devon, Barnstaple)
Chapman, Sir S. Heneage, Lieut.-Colonel Arthur P. Peto, G. (Somerset, Frome)
Charteris, Brigadier-General J. Henri, Sir Sydney H. Pownall, Sir Assheton
Chilcott, Sir Warden Hennessy, Major Sir G. R. J. Preston, William
Christie, J. A. Hills, Major John Waller Price, Major C. W. M.
Churchman, Sir Arthur C. Hoare, Lt.-Col. Rt. Hon. Sir S. J. G. Radford, E. A.
Clayton, G. C. Hogg, Rt. Hon. Sir D.(St. Marylebone) Raine, Sir Walter
Cochrane, Commander Hon. A. D. Holbrook, Sir Arthur Richard Ramsden, E.
Cooper, A. Duff Holt, Capt. H. P. Rawson, Sir Cooper
Craig, Sir Ernest (Chester, Crewe) Hopkins, J. W. W. Remnant, Sir James
Crookshank, Col. C. de W. (Berwick) Hopkinson, Sir A. (Eng. Universities) Rhys, Hon. C. A. U.
Crookshank, Cpt. H.(Lindsey, Gainsbro) Hopkinson, A. (Lancaster, Mossley) Richardson, Sir p. W. (Sur'y, Ch'ts'y)
Cunliffe, Sir Herbert Howard-Bury, Colonel C. K. Robinson, Sir T. (Lane, Stretford)
Curzon, Captain Viscount Hudson, Capt. A, U. M. (Hackney, N.) Ruggles-Brise, Lieut.-Colonel E. A.
Davies, Sir Thomas (Cirencester) Huntingfield, Lord Russell, Alexander West (Tynemouth)
Davies, Dr. Vernon Hurd, Percy A. Salmon, Major I.
Davison, Sir W. H. (Kensington, S.) Hurst, Gerald B. Samuel. A. M. (Surrey, Farnham)
Dean, Arthur Wellesley Iveagh, Countess of Sandeman, N. Stewart
Drewe, C. Jephcott, A. R. Sandon, Lord
Edmondson, Major A. J. King, Commodore Henry Douglas Savery, S. S.
Elliot, Major Walter E. Knox, Sir Alfred Shaw, Lt.-Col. A. D. Mcl. (Renfrew, W)
Ellis, R. G. Lamb, J. Q. Shepperson, E. W.
England, Colonel A. Lane Fox, Col. Rt. Hon. George R. Simms, Dr. John M. (Co. Down)
Skelton, A. N. Thompson, Luke (Sunderland) Watson, Rt. Hon. W. (Carlisle)
Smith, R. W.(Aberd'n & Kinc'dine, C.) Thomson, F. C. (Aberdeen, South) Watts, Dr. T.
Spender-Clay, Colonel H. Thomson, Rt. Hon. Sir W. Mitchell- Williams, Com. C. (Devon, Torquay)
Stanley, Lieut.-Colonel Rt. Hon. G. F. Tinne, J. A. Williams, Herbert G. (Reading)
Storry-Deans, R. Titchfield, Major the Marquess of Wilson, R. R. (Stafford, Lichfield)
Stott, Lieut.-Colonel W. H. Tryon, Rt. Hon. George Clement Windsor-Clive, Lieut.-Colonel George.
Streatfeild, Captain S. R. Turton, Sir Edmund Russborough Womersley, W. J.
Stuart, Crichton-, Lord C. Vaughan-Morgan, Col. K. P. Wood, B. C. (Somerset, Bridgwater)
Stuart, Hon. J. (Moray and Nairn) Wallace, Captain D. E. Wood, Sir Kingsley (Woolwich, W.)
Sueter, Rear-Admiral Murray Fraser Ward, Lt.-Col. A.L.(Kingston-on-Hull) Woodcock, Colonel H. C.
Templeton, W. P. Warrender, Sir Victor
Thorn, Lt.-Col. J. G. (Dumbarton) Watson, Sir F. (Pudsey and Otley) TELLERS FOR THE AYES.—
Major Cope and Captain Bowyer.
Adamson, Rt. Hon. W. (Fife, West) Groves. T. Robinson, W. C. (Yorks, W. R., Elland)
Adamson, W. M. (Staff., Cannock) Hall, F. (York., W.R., Normanton) Rose, Frank H.
Alexander, A. V. (Sheffield, Hillsbro') Hall, G. H. (Merthyr Tydvil) Sexton. James
Attlee, Clement Richard Hamilton, Sir R. (Orkney & Shetland) Shaw, Rt. Hon. Thomas (Preston)
Baker, J. (Wolverhampton, Bliston) Hardie, George D. Short, Alfred (Wednesbury)
Baker, Walter Hayday, Arthur Sinclair, Major Sir A. (Caithness)
Barker, G. (Monmouth, Abertillery) Henderson, Rt. Hon. A. (Burnley) Sitch, Charles H.
Barr, J. Henderson, T. (Glasgow) Smith, Rennie (Penlstone)
Batey, Joseph Hirst, G. H. Snell, Harry
Beckett, John (Gateshead) Hirst, W. (Bradford, South) Snowden, Rt. Hon. Philip
Bondfield, Margaret Hore-Bellsha, Leslie Stamford, T. W.
Broad, F. A. Hudson, J. H. (Huddersfield) Stephen, Campbell
Bromfield, William Hutchison, Sir Robert (Montrose) Stewart, J. (St. Rollox)
Brown, Ernest (Leith) John, William (Rhondda, West) Sullivan, J.
Brown, James (Ayr and Bute) Johnston, Thomas (Dundee) Sutton, J. E.
Buchanan, G. Jones, Henry Haydn (Merloneth) Thomas, Rt. Hon. James H. (Derby)
Cape, Thomas Kennedy, T. Thomson, Trevelyan (Middlesbro. W.)
Charleton, H. C. Kirkwood, D. Thorne, W. (West Ham, Plaistow)
Clowes. S. Lansbury, George Thurtle, Ernest
Cluse, W. S. Lawrence, Susan Tinker, John Joseph
Clynes, Rt. Hon. John R. Lawson, John James Trevelyan, Rt. Hon. C. P.
Compton, Joseph Lindley, F. W. Varley, Frank B.
Connolly, M. Lowth, T. Viant, S. P.
Cove, W. G. Lunn, William Wallhead, Richard C.
Cowan, D. M. (Scottish Universities) MacDonald, Rt. Hon. J.R.(Aberavon) Walsh, Rt. Hon. Stephen
Dalton, Hugh Mackinder, W. Watson, W. M. (Dunfermline)
Davies, Ellis (Denbigh, Denbigh) MacLaren, Andrew Watts-Morgan, Lt.-Col. D. (Rhondda)
Day, Colonel Harry Macpherson, Rt. Hon. James I. Webb, Rt. Hon. Sidney
Dennison, R March, S. Welsh, J. C.
Dunnico, H. Montague, Frederick Westwood, J.
Edge, Sir William Morrison, R. C. (Tottenham, N.) Whiteley, W.
Edwards, J. Hugh (Accrington) Murnin, H. Wiggins, William Martin
Fenby, T. D. Naylor, T. E. Wilkinson, Ellen C.
Garro-Jones, Captain G. M. Oliver, George Harold Williams, C. P. (Denbigh, Wrexham)
Gibbins, Joseph Palin, John Henry Williams, David (Swansea, East)
Gillett, George M. Paling, W. Williams, Dr. J. H. (Llanelly)
Gosling, Harry Parkinson, John Allen (Wigan) Williams, T. (York, Don Valley)
Graham, D. M. (Lanark, Hamilton) Pethick-Lawrence, F. W. Wilson, C. H. (Sheffield, Attercliffe)
Graham, Rt. Hon. Wm. (Edin., Cent.) Ponsonby, Arthur' Wilson, R. J. (Jarrow)
Greenall, T. Potts, John S. Windsor, Walter
Greenwood, A. (Nelson and Colne) Riley, Ben Wright, W.
Grenfell, D. R. (Glamorgan) Ritson, J.
Griffiths, T. (Monmouth, Pontypool) Roberts, Rt. Hon. F.O.(W. Bromwich) TELLERS FOR THE NOES.—
Mr. Charles Edwards and Mr. Hayes

I beg to move, in page 12, line 7, to leave out "5d.," and to insert instead thereof "1½d."

I move this Amendment formally.

Question put, "That '5d.' stand part of the Schedule."

The Committee divided: Ayes, 200; Noes, 126.

Division No. 440.] AYES. [4.37 p.m.
Acland-Troyte, Lieut.-Colonel Boothby. R. J. G. Cadogan, Major Hon. Edward
Agg-Gardner, Rt. Hon. Sir James T. Bourne, Captain Robert Croft Campbell, E. T.
Ainsworth, Major Charles Bowyer, Capt. G. E. W. Cassels, J. D.
Applin, Colonel R. V. K. Braithwaite, Major A. N. Cautley, Sir Henry S.
Apsley, Lord Bridgeman, Rt. Hon. William Clive Cecil, Rt. Hon. Sir Evelyn (Aston)
Barclay-Harvey, C. M. Briggs, J. Harold Cecil, Rt. Hon. Lord H. (Ox. Univ.)
Barnston, Major Sir Harry Brittain, Sir Harry Chadwick, Sir Robert Burton
Beamish, Rear-Admiral T. P. H. Brooke, Brigadier-General C. R. I. Chamberlain, Rt. Hon. N. (Ladywood)
Benn, Sir A. S. (Plymouth, Drake) Broun-Lindsay, Major H. Chapman, Sir S.
Berry, Sir George Brown, Col. D. C. (N'th'l'd., Hexham) Charteris, Brigadier-General J.
Bethel, A. Brown, Brig.-Gen. H. C.(Berks, Newb'y) Chilcott, Sir Warden
Betterton, Henry B. Buchan, John Christie, J. A.
Bird, E. R. (Yorks, W. R., Skipton) Burman, J. B. Churchman, Sir Arthur C.
Clayton, G. C. Hoare, Lt.-Col. Rt. Hon. Sir S. J. G. Rawson, Sir Cooper
Cochrane, Commander Hon. A. D. Hogg, Rt. Hon. Sir D. (St. Marylebone) Remnant, Sir James
Cooper, A. Duff Holbrook, Sir Arthur Richard Rhys, Hon. C. A. U.
Craig, Sir Ernest (Chester, Crewe) Holt, Capt. H. P. Rice, Sir Frederick
Crookshank, Col. C. de W. (Berwick) Hopkins, J. W. W. Richardson, Sir P. W. (Sur'y, Ch'ts'y)
Crookshank, Cpt. H.(Lindsey, Gainsbro) Hopkinson, Sir A. (Eng. Universities) Roberts, E. H. G. (Flint)
Cunliffe, Sir Herbert Hopkinson, A. (Lancaster, Mossley) Ruggles-Brise, Lieut.-Colonel E. A.
Curzon, Captain Viscount Howard-Bury, Colonel C. K. Russell, Alexander West (Tynemouth)
Davies, Sir Thomas (Cirencester) Hudson, Capt. A. U.M.(Hackney, N.) Salmon, Major I.
Davies, Dr. Vernon Huntingfield, Lord Samuel, A. M. (Surrey, Farnham)
Davison, Sir W. H. (Kensington, S.) Hurd, Percy A. Sandeman, N. Stewart
Dean, Arthur Wellesley Hurst, Gerald B. Sandon, Lord
Drewe, C. Iveagh, Countess of Savery, S. S.
Edmondson, Major A. J. Jackson, Sir H. (Wandsworth, Can'l) Scott, Rt. Hon. Sir Leslie
Elliot, Major Walter E. King, Commodore Henry Douglas Shaw, Lt.-Col. A. D.Mcl.(Renfrew,W.)
Ellis, R. G. Knox, Sir Alfred Shepperson, E. W.
England, Colonel A. Lamb, J. Q. Simms, Dr. John M. (Co. Down)
Erskine, Lord (Somerset, Weston-s.-M.) Lane Fox, Col. Rt. Hon. George R. Skelton, A. N.
Everard, W. Lindsay Lister, Cunliffe-, Rt. Hon. Sir Philip Smith, R. W. (Aberd'n & Kinc'dine. C.)
Falle, Sir Bertram G. Locker-Lampson, G. (Wood Green) Spender-Clay, Colonel H.
Fanshawe, Captain G. D. Luce, Major-Gen. Sir Richard Harman Stanley, Lieut.-Colonel Rt. Hon. G. F.
Fermoy, Lord Lumley. L. R. Storry-Deans, R.
Fielden, E. B. MacAndrew, Major Charles Glen Stott, Lieut.-Colonel W. H.
Forestier-Walker, Sir L. McLean, Major A. Streatfeild, Captain S. R.
Foxcroft, Captain C. T. Macnaghten, Hon. Sir Malcolm Stuart, Crichton-, Lord C.
Frece, Sir Walter de MacRobert, Alexander M. Stuart, Hon. J. (Moray and Nairn)
Fremantle, Lt.-Col. Francis E. Maitland, Sir Arthur D. steel Sueter, Rear-Admiral Murray Fraser
Ganzoni, Sir John Makins, Brigadier-General E. Templeton, W. P.
Gates, Percy Manningham-Buller, Sir Mervyn Thom, Lt.-Col. J. G. (Dumbarton)
Gibbs, Col. Rt. Hon. George Abraham Meller, R. J. Thompson, Luke (Sunderland)
Gilmour, Lt.-Col. Rt. Hon. Sir John Meyer, Sir Frank Thomson, F. C. (Aberdeen, S.)
Goff, Sir Park Mitchell, S. (Lanark, Lanark) Thomson, Rt. Hon. Sir W. Mitchell-
Grace, John Mitchell, W. Foot (Saffron Walden) Tinne, J. A.
Grant, Sir J. A. Mitchell, Sir W. Lane (Streatham) Titchfield, Major the Marquess of
Grattan-Doyle, Sir N. Monsell, Eyres, Com. Rt. Hon. B. M. Tryon, Rt. Hon. George Clement
Greene, W. P. Crawford Moore, Lieut.-Colonel T. C. R. (Ayr) Turton, Sir Edmund Russborough
Gretton, Colonel Rt. Hon. John Moore, Sir Newton J. Vaughan-Morgan, Col. K. P.
Grotrian. H. Brent Morrison, H. (Wilts, Salisbury) Wallace, Captain D. E.
Gunston, Captain D. W. Murchison, Sir Kenneth Ward. Lt.-Col. A. L. (Kingston-on-Hull)
Hacking, Douglas H. Nelson, Sir Frank Warrender, Sir Victor
Hall, Lieut.-Col. Sir F. (Dulwich) Nicholson, Col. Rt. Hn W.G.(Ptrsf'ld.) Watson, Sir F. (Pudsey and Otley)
Hall, Capt. W. D'A. (Brecon & Rad.) Nield, Rt. Hon. Sir Herbert Watson, Rt. Hon. W. (Carlisle)
Hammersley, S. S. Nuttall, Ellis Watts, Dr. T.
Hanbury, C. Oakley, T. Wells, S. R.
Hannon, Patrick Joseph Henry Ormsby-Gore, Rt. Hon. William Williams, Com. C. (Devon, Torquay)
Harland, A. Pennefather, Sir John Williams, Herbert G. (Reading)
Harmsworth, Hon. E. C. (Kent) Penny, Frederick George Wilson, R. R. (Stafford, Lichfield)
Harvey, G. (Lambeth, Kennington) Peto, Sir Basil E. (Devon, Barnstaple) Windsor-Clive, Lieut.-Colonel George
Harvey, Major S. E. (Devon, Totnes) Peto, G. (Somerset, Frome) Womersley, W. J.
Haslam, Henry C. Pownall, Sir Assheton Wood, B. C. (Somerset, Bridgwater)
Henderson, Capt. R. R. (Oxl'd, Henley) Preston, William Wood, Sir Kingsley (Woolwich, W.).
Heneage, Lieut.-Col. Arthur P. Price, Major C. W. M. Woodcock, Colonel H. C.
Henn Sir Sydney H. Radford, E. A.
Hennessy, Major Sir G. R. J. Raine, Sir Walter TELLERS FOR THE AYES.—
Hills, Major John Waller Ramsden, E. Major Cope and Captain Margesson.
Adamson, Rt. Hon. W. (Fife, West) Davies, Ellis (Denbigh, Denbigh) Hirst, W. (Bradford, South)
Adamson, W. M. (Staff., Cannock) Day, Colonel Harry Hore-Bellsha, Leslie
Alexander, A. V. (Sheffield, Hillsbro') Dennison, R. Hudson, J. H. (Huddersfield)
Attlee, Clement Richard Dunnico, H. Hutchison, Sir Robert (Montrose)
Baker, J. (Wolverhamton, Bilston) Edge, Sir William John, William (Rhondda, West)
Baker, Walter Edwards, J. Hugh (Accrington) Johnston, Thomas (Dundee)
Barker, G. (Monmouth, Abertillery) Fenby, T. D. Jones, Henry Haydn (Merioneth)
Barr, J. Gardner, J. P. Kennedy, T.
Batey, Joseph Garro-Jones, Captain G. M. Kenworthy, Lt.-Com. Hon. Joseph M.
Beckett, John (Gateshead) Gibbins, Joseph Kirkwood, D.
Bondfield, Margaret Gillett, George M. Lansbury, George
Broad, F. A. Gosling, Harry Lawrence, Susan
Bromfield, William Graham, D. M. (Lanark, Hamilton) Lawson, John James
8rown, Ernest (Leith) Graham, Rt. Hon. Wm. (Edin., Cent.) Lindlay, F. W.
Brown, James (Ayr and Bute) Greenall, T. Lowth, T.
Buchanan, G. Greenwood, A. (Nelson and Colne) Lunn, William
Cape, Thomas Grenfell, D. R. (Glamorgan) MacDonald, Rt. Hon. J. R.(Aberavon)
Charleton, H. C. Groves, T Mackinder, W.
Clowes. S. Hall, F. (York, W. R., Normanton) MacLaren, Andrew
Cluse, W. S. Hall, G. H. (Merthyr Tydvil) March, S.
Clynes, Rt. Hon. John R. Hamilton, Sir R. (Orkney & Shetland) Montague, Frederick
Compton, Joseph Hardie, George D. Morrison, R. C. (Tottenham, N.)
Connolly, M. Hayday, Arthur Murnin, H.
Cove, W. G. Henderson, Rt. Hon. A. (Burnfey) Naylor, T. E.
Cowan, D. M. (Scottish Universities) Henderson, T. (Glasgow) Oliver, George Harold
Dalton, Hugh Hirst, G. H. Palin, John Henry
Paling, W. Snell, Harry Watts-Morgan, Lt.-Col. D. (Rhondda)
Parkinson, John Allen (Wigan) Snowden, Rt. Hon. Philip Webb, Rt. Hon. Sidney
Pethick-Lawrence, F. W. Stamford, T. W. Welsh, J. C.
Ponsonby, Arthur Stephen, Campbell Westwood, J.
Potts, John S. Stewart, J. (St. Rollox) Whiteley, W.
Riley, Ben Sullivan, Joseph Wiggins, William Martin
Ritson, J. Sutton, J. E. Williams, C. P. (Denbigh, Wrexham)
Roberts, Rt. Hon. F.O.(W. Bromwich) Thomas, Rt. Hon. James H. (Derby) Williams, David (Swansea, E.)
Robinson, W. C. (Yorks, W.R., Elland) Thomson, Trevelyan (Middlesbro, W.) Williams, Dr. J. H. (Llanelly)
Rose, Frank H. Thorne, W. (West Ham, Plaistow) Williams, T. (York, Don Valley)
Sexton, James Tinker, John Joseph Wilson, C. H. (Sheffield, Attercliffe)
Shaw, Rt. Hon. Thomas (Preston) Trevelyan, Rt. Hon. C. p. Wilson, R. J. (Jarrow)
Short, Alfred (Wednesbury) Varley, Frank B. Windsor, Walter
Sinclair, Major Sir A. (Caithness) Viant, S P. Wright, W.
Sitch, Charles H. Wallhead, Richard C.
Smith, Ben (Bermondsey, Rotherhithe) Walsh, Rt. Hon. Stephen TELLERS FOR THE NOES.—
Smith, Rennie (Penistone) Watson, W. M. (Dunfermline) Mr. Charles Edwards and Mr.

I beg to move, in page 12, line 9, to leave out "7d." and to insert instead thereof "6d."

Until called I thought that this Amendment was out of order. I imagined that when a new Clause which I moved yesterday was negatived, that decision would negative also this Amendment to the Schedule. The object of the Amendment is to reduce by a penny the contribution in the case of young men, and, in conjunction with the new Clause that I moved yesterday, to equalise the contributions as between employer and employé. My right hon. Friend the Minister of Labour said yesterday that the Fund was not in a position to take the Amendment, but he did not give sufficient direction to the Committee, I think, as to whether at some future time he would be able to equalise the contributions. I ask the Minister to tell the Committee when he thinks the first opportunity will arise of equalising these contributions. It seems to me that, in equity, the contributions by the employé and the employer should be of equal amount.

I pointed out yesterday that in the original Bill they were equal and there is no reason why they should not be equalised at the first available moment. The Minister in his reply might state definitely that when the Fund is in a position to justify reduced contributions, the first reduction will he in the direction of equalisation. If he gave some such indication to the Committee of his future policy it would be satisfactory. Many hon. Members are not very pleased that the full recommendations of the Blanesburgh Report were not put into effect in the Bill, including the recommendation for equalisation of contributions. We have been informed that it was not possible owing to the state of the Fund, but I hope the Minister can definitely set at rest any fears which may exist in the Committee that he has not this matter in mind as something which ought to be done at the first opportunity.


I can give my hon. Friend in a very few words the answer for which he has asked. I also thought that the present Amendment was out of order, but I am glad to have the opportunity of giving the hon. Member some of the information for which he asks. These rates for young people of 18 to 21 are temporary rates, corresponding more or less to the temporary adult rates, and their reduction would follow on the reduction of the adult contributions. So far as the adult contributions are concerned, the extra penny now paid as part of the employer's contribution—that is to say the penny by which, at present the employer's contribution is in excess of the contribution by the employé—can be taken off, under the existing law, when the debt is reduced to about £7,500,000, but the revenue of the Fund at that date would also have to be sufficient, when the penny has been taken off, to continue repaying debt. I hope that position will soon be reached, but to look beyond that period to the time when both the contributions can be reduced is to look further ahead than I am prepared to do at this moment.


The hon. Member for Thanet (Mr. Harmsworth) asked a very precise question which interests Members on this side. Is it the intention of the Government, at any time, to make the contribution of the State at least one-third of the Fund or at least one-half of the joint fund provided by employers and employed? That is a plain question which the Minister might answer.


I said in the Second Reading Debate, and I say it again, that until we see what the financial situation will be in the future, we postpone a decision on that point.

Amendment negatived.

Motion made, and Question proposed, "That this be the First Schedule to the Bill."


It is necessary to explain that our views on this Schedule are precisely the opposite to those which have been put forward from the other side. When we hear the alarming theory advanced that it does not matter which pocket the payments come out of, we are inclined to say that our view is that it matters very much. We take the view that in so far as unemployment insurance contributions are a cost upon industry, they are bad for industry. We also take the view, which is supported by the Colwyn Committee, that taxation taken out of profits already made is not a drag upon industry in the same way as charges upon industry forming part of the costs of production. The purpose of our Amendments to the Schedule was to reduce the charges falling upon industry, whether upon employers or employed, and those Amendments were moved with the full knowledge that the balance would have to be made up from the resources of the State. That, in our view, would have been possible and would have relieved industry of a part of the burden which is now dragging it down. Just as the burden of rates is an undoubted drag upon industrial restoration, so the drag of the unemployment insurance scheme is an impediment in the way of trade revival. We hope for a substantial reduction in the contributions from the industrial contributors and the assumption of larger responsibilities by the State, but as this Schedule does reduce the contributions of certain people, obviously, we cannot vote against it. Therefore, we have no intention of

dividing the Committee on this Schedule, but as this is probably the last opportunity I shall have of doing so, I wish to emphasise the view that these contributions are a definite charge on industry and should, in the interests of trade revival, be reduced.


I regret very much that the Government have not taken the alternative which they might have taken, by making the contributions lower as regards employer and employed and making the contributions of the State higher. It is too late now to urge that alternative, but it is not too late to make it clear to the Committee that numbers of people who look upon this question quite apart from party politics are gravely concerned about the continued lop-sidedness of the insurance scheme in the last seven years. The condition in which we are at the moment was not foreseen in 1911 or in 1920 or in 1922–24. I trust that the earliest opportunity will be taken of redressing the balance in favour of the employer and employed so that the State may share up to its proper proportion of the burden. That will be better for industry.