HC Deb 19 November 1928 vol 222 cc1413-36

Order for Third Reading read.

The PARLIAMENTARY SECRETARY to the MINISTRY of LABOUR (Mr. Betterton)

I beg to move, "That the Bill be now read the Third time."

It is a tribute to our Parliamentary procedure that we were able to discuss at considerable length many points in connection with a Bill which everybody agrees is necessary and with regard to the urgency of which there is no difference of opinion, and that under these circumstances there was no Division on the Second Reading, there was no Amendment moved in Committee and consequently there is no Report stage, and I have no reason to suppose that there will be any Division to-day. The object of the Bill is two-fold: in the first place, it is to increase, from £30,000,000 to £40,000,000, the borrowing powers in relation to the deficiency fund; and, in the second place, to secure, in certain circumstances, that after two years control shall be retained by Parliament over the financial position as it then is. As the necessity for the Bill is urgent, for the reasons which I explained last week, and as we had a full discussion on the various points then raised, when, I think, all the points that were asked were dealt with, both in the discussion on Second Reading and in the two discussions which we had on the Financial Resolution, which was in identical terms, I think, with the Bill itself, I do not think I need take up any further time of the House in moving the Third Reading.

Mr. T. SHAW

I regret that it is necessary to discuss the question again as to whether the Government. ought to he trusted, in the conditions which exist, with further borrowing power for £10,000,000, but it is due to call attention to the fact that we ought carefully to consider whether we ought to give the Government power to get a further £10,000,000 on the miscalculations that it made last year and whether this is the best way of dealing with national money. The Minister, in the last discussion, made a very peculiar statement. He said that I had accused him of making a miscalculation, that I had attributed a statement to him that by this time they would have reduced the amount of unemployment to 750,000 and almost wiped out the deficit, and that I had repeated the statement that afternoon, refused to be drawn by the Minister and allowed him to go on floundering in his speech, but I have since taken the precaution to read what I did say in the afternoon, and I cannot find any sentence of that kind or any sentence even vaguely approaching it. As to whether these miscalculations have been made, let me quote one or two statements that really were made. The basis on which the present Bill exists was a number of calculations that had been made, and on which this £10,000,000 will be spent if the House grants it. This is what the Minister for Labour said about: unemployment and its potentialities and probabilities: I only put it at 8 per cent., which trust may be a possibility within the comparatively near future. I think there ought to be quite a fair chance of a reduction much below that."—[OFFICIAL REPORT, 19th December, 1927; col. 135, Vol. 212.] At the time that this Bill was being discussed, the rate of unemployment was, roughly, 10 per cent., and, as the Minister said that he expected a reduction to 8 per cent., and even much below that, obviously, with over 1,000,000 unemployed, he estimated taking over 200,000 off the unemployed list. He went further than that; his miscalculations went to a degree which is absolutely inexcusable. The hon. Member for Aberdare (Mr. G. Hall) asked him if he, could give the number, as it might help him, and this is the reply: No; naturally I should he loth to prophesy as to what would happen a number of years hence. I said the other day that I was ready to make a bet—a thing about which it am generally pretty cautious—with an hon. Member on this side of the House, who was very apprehensive during the Debate on the Unemployment Insurance Bill. I said I was prepared to make him an alternative bet as to the figure going down to 4 per cent. at any rate, by 1932, or to 3 per cent. by 1933. I offered that the decision should be made either by the Minister of Labour at that date, or if he thought, that I was still likely to be there, by the Chairman of the Economic Society." —[OFFICIAL REPORT, 19th December. 1997: col. 135. Vol. 212.] Even if I had used the words attributed to me by the Minister, they would be ten times more than justified by the Minister's own words. Let us turn to the White Paper which was issued by the Minister. On page 4 it says: It is not proposed that the provisions of Clause 5 of the Unemployment Insurance Bill shall commence to operate until April, 1929. The percentage rate of unemployment on 25th April, 1927, was 9.3. It may be anticipated that during the year April, 1929, to April, 1930, the 'rate of unemployment will not exceed 8 per cent. At that moment the unemployment was, roughly, 10 per cent.; the round figures were 1,000,000, so that the Minister's prophecy means that he expected a diminution of 200,000. What is the use, therefore, of the Minister pretending to be indignant about prophecies having been made? I looked carefully at my speech last Thursday, and I found no sentence that bore any resemblance to the sentence which the Minister used.

When he comes to the House and asks for money, the Minister should exercise a little humour and have a sense of perspective. If he considers himself as Minister of Labour to be infallible, he is the first Minister of Labour who has ever thought it. A little knowledge of what has gone on would prevent him adopting that attitude of infallibility. When he spoke to my hon. Friend the Member for West Nottingham (Mr. Hay-day) he used the words "He must," and "He would have to." Dictators are not the kind of persons needed in this House. The right hon. Gentleman is neither the Pope of Rome, nor a Mr. Mussolini, nor a Lenin, nor any other dictator who ever lived, and a little sense of humour and proportion would prevent him using language that ought not to be used in the House. We made the suggestion that the Minister should have approached the Chancellor to see if there were a better way of dealing with this question than this continual borrowing, which waterlogs the insurance scheme more and more. I must admit that I cannot see the present Minister of Labour doing that; I would as soon expect a school boy in his first day at school going for the headmaster in his den as see the Minister of Labour go to the Chancellor with a demand for money. So far has the Chancellor of the Exchequer succeeded in im- pressing the right hon. Gentleman, that he actually considers the Treasury to be rather generous than otherwise, for in discussing the rate of the Treasury contribution with regard to a certain category of cases, he said that the Treasury had been exceptionally generous, because it had paid a little more than it ought to have done strictly in proportion to other payments that were being made. At the same time, the Treasury are paying less than one-third of the cost of the scheme.

We suggest that the time is overdue when the Treasury should face the question of this debt and be more generous' in their contributions than they are now. It is wrong to let the scheme be saddled with this huge burden of debt which grows week by week even if it does not grow, it is a continual hindrance on an improvement in the unemployment scheme. I know that I am like a voice crying in the wilderness, but I suggest that it would be an economic thing for the country if this debt were wiped out and the unemployment insurance scheme were allowed to start with a clean slate. There is no question that every prognostication of a year ago has been falsified. No one knows what next year will bring, or what the financial responsibility of next year will be, and no Minister of Labour need fear to admit frankly that he has miscalculated. Every Minister of Labour has miscalculated, but he has faced it and said, "I have made a mistake," and has taken steps to prevent other people suffering through his mistake. According to these figures, 150,000 people will fall out of benefit before long through the Minister's miscalculation of a state of things which does not exist. The Minister has never told us what the result will be. The hon. Gentleman the Member for Leith (Mr. E. Brown) asked a specific question, which has been asked over and over again, as to what will be the effect of this Bill, and the financial effect of these people falling out of benefit, and how many would fall out of benefit.

4.0 p.m.

The Minister has never given us an answer, and I suggest to him that it is not in his own interest to have information extracted from him as if it were extracted with a corkscrew. He would save himself infinite trouble and infinite time if he would give information in a friendly way, instead of apparently giving it very grudgingly. For instance, he would have saved a considerable part of this speech to-day if he had been tempted to accept what was offered to him last time, a perfectly courteous exposition, and a perfectly courteous request for information, that was answered in a way I do not think was quite as courteous as the way in which he was approached. It would, of course, be foolish to attempt to vote against this credit. Voting against the credit would not help the unemployed. We may be dissatisfied with the methods of the Minister. We may feel that this is not the proper way of dealing with the problem, but to vote against it would simply throw the shortcomings of the Minister on the backs of the unemployed. Consequently, we shall not vote against it.

My final word is this. I hope that it may be possible some day for the Treasury to take a different view entirely of this matter, for the debt finally to be wiped out by a frank and open statement on the part of the Minister, so that the House may know exactly what the position is likely to be next spring. I believe that the House itself by a huge majority is in favour of doing a square thing by the unemployed, and not allowing genuinely unemployed men and women to fall out of benefit through no fault of their own.

Mr. BROAD

In speaking on this, the Third Reading of the Bill, which is to provide £10,000,000 by loan, I think even at this late hour the Minister ought to withdraw it, and bring in another Bill adequately to meet the situation, because there is no reasonable probability of this amount being adequate, if the persons concerned are to get the benefit to which they are entitled, and not to be excluded from their benefit by unfair means. It is on those lines that I wish to speak this afternoon. When the Minister, in his final reply on Thursday, was speaking on this matter, the mentioned some figures, showing that within two periods of three months 339,000 persons have been excluded from benefit, the greater majority on the ground that they were not genuinely seeking employment. On the face of it, those figures either condemn the mass of the working classes of this country as being a lazy lot of wastrels who wish to live on the dole rather than work for their living, or else they show that the pressure of the department is used, and this phrase is used, to degrade the men who are wronged by excluding them from benefit when they are genuinely seeking work. The Minister told us that they could go to the Court of Referees.

Mr. SPEAKER

A speech on those lines would be out of order on the Third Reading of this Bill.

Mr. BROAD

I wish to reply to and challenge that statement which was made. I was not able to do so on Thursday after the Minister had spoken on those lines. I drew attention to the fact that secret reports are sent in, and the Minister did not reply, but I have information here to the effect—

Mr. SPEAKER

The hon. Member must not make this an occasion for the continuation of the Second Reading Debate or for a Committee stage of the Bill. This discussion is confined solely to what is in the Bill.

Mr. BROAD

I must bow to your ruling, but I would like to ask the Minister, does he deny that secret reports besides the signed reports are sent in to the Referees?

Mr. SPEAKER

This is not the occasion upon which questions of that kind should be addressed to the Minister.

Mr. VIANT

We are asked by this Bill to give a further grant of £10,000,000. That is evidence in itself that the provision already made by the House is not sufficient to meet the requirements that were anticipated by the Minister himself, and before the House gives its assent to this further grant, we are entitled to ask the Minister a few questions. They have a, very important bearing upon the estimates which the House has passed. If we were an ordinary employing concern add the Minister himself was the manager of a department, and he had come before us and asked for this further grant of money, there is not a shadow of doubt that he would have some very pointed questions put to him. In the first instance, he would undoubtedly anticipate having to give some reason for his having underestimated the position that has arisen. This Horse is entitled to have a reason froth him as to why the estimates given to this House when the last Bill was passed have not been fulfilled. The second question I am entitled to ask is this. In view of the fact that the strictest economy has been the order of the day as far as the administration is concerned, is this House to expect that greater stringency is to be exercised in the administration of this fund in the near future.

This House ought to be in the position this afternoon, if greater stringency is going to be exercised by the Minister, to refuse this vote, because we cannot review what has taken place in the administration of this fund in the past without feeling that the administration is far too stringent, and that the Minister has endeavoured to avoid a great deal of the errors in his calculations by enforcing more stringent regulations than the situation as far as the unemployed are concerned would warrant. I feel, furthermore, that, we are entitled to have a statement from the Minister this afternoon informing this House as to what his attitude is likely to be in respect to the Measure which comes into operation next year. His calculations, which have compelled him to have this extra grant, are completely wrong, and I hope, at least, he is not going to endeavour again still further to tighten up the administration, and so make the conditions of the unemployed more irksome than they are, in order to endeavour to bring the number of unemployed on the register down to meet his calculations. That would be far too inhuman. Reasons were given during the course of the Second Reading Debate as to why he was compelled to ask for this extra grant. He endeavoured to throw responsibility upon the shoulders of various persons. I think we are entitled to ask that the Minister should have a consultation with some of his colleagues in the Cabinet, and see if the administration of other departments is not at the present moment intensifying the unemployment problem. I will refer for a moment to the large number of building operatives unemployed at the present time.

Mr. SPEAKER

That would not be appropriate on the. Third Reading of this Bill.

Mr. VIANT

I was only saying this by way of illustration in pointing out that in the circumstances obtaining to-day we are rather entitled to fear that the numbers of unemployed even in connection with the building industry are likely to increase, and, if this sum of money is to be added to, it is essential that something should be done by the Minister of Health to see that more building trade operatives are not thrown out of employment. I hope, therefore, that the Minister will have that consultation, and while not being desirous of departing in any way from the order of the Debate, I do think that it is a very important point, and has some bearing on the grant which the House is asked to make this afternoon. Recent administration of the Ministry of Health has increased the number of unemployed who will be dependent in a very large degree upon this grant. Their numbers have been increased to a large extent by the administration of the Minister of Health. Therefore, I hope that the Minister of Labour will have a consultation with his colleague, and see if something can be done in the very near future to avert a further increase in the number of unemployed as far as the building industry is concerned. I hope that the Minister will be prepared to give some consideration to the points I have raised.

Mr. SHORT

Although we have had a full day's Debate on this very intricate and important Measure, there are many on this side of the House who still feel that the Minister has not satisfied the case that has been put from time to time. Two points arise in my mind. The first is, that I should expect the Minister to justify the claim for extending his borrowing powers because of circumstances that exist; and, secondly, that his borrowing powers, if granted, should be adequate to meet the situation which will accrue at some later date, possibly 12 months hence. As regards the first consideration, I am perfectly satisfied that the Minister is justified in coming to the House seeking these extended powers. Whether it is the right and proper way to deal with the situation is another matter, but, at any rate, all the circumstances and conditions of our unemployed problem and its possible increase in volume and extent, warrants, I think, the introduction and submission of this Bill. But when we consider the other aspect of the matter we are entitled to ask him to submit further evidence and figures to justify his faith that this sum of £10,000,000 will be sufficient to meet what may arise some months ahead.

In the Gracious Speech from the Throne it was suggested that the reason for this Bill lay in the displacement of miners from our coalfields. I think that is true, and so far as I am aware, the right hon. Gentleman's Department has not stopped the rot in the mining industry. Pits are still being closed and miners thrown out of work, and in consequence we must look to a large increase in what is now spoken of as surplus mining labour, which in numbers is estimated to be between 200,000 and 250,000. If that be the case, it must give cause for reflection. At the same time the report of the Industrial Transference Board not merely calls attention to the considerable volume of unemployed labour in other heavy industries, but also to the inevitable increase in the surplus of labour there. They make special reference to shipbuilding, iron and steel, and heavy engineering, and foreshadow a possible surplus in the textile trades. In page 16 of their report they indulge in a very doleful criticism of the effect of labour-saving machinery upon labour. They give examples of it, and call attention to the fact that even those industries which are prosperous are not successful in employing labour, but that their prosperity is being reflected in a decrease of labour. If those conclusions be sound, and I think they must be, having regard to the source from which they come, and if they are considered in conjunction with all the other facts in our industrial and economic life, we cannot look forward to a diminution in the numbers of our unemployed. The numbers will rise and fall, and many expect to fall between now and Christmas, but I think that, generally speaking, we must look forward to the existing volume of unemployment being almost permanent, and possibly there may actually be an increase.

A distinguished manufacturer who occupies a high position in the social and political life of Wednesbury, which is in my constituency, recently drew attention to the effect of machinery upon employment, pointing out that with the advance of science still larger numbers of people would be thrown out of work. Here I would remark that we are not protesting against the extended borrowing powers which are being sought by the Minister. We admit that something must be done, and, though we may quarrel with the methods, we are not opposing these borrowing powers; but I hope the right hon. Gentleman will not dismiss this question with a reference to the events of 1926. We never know when the right hon. Gentleman's Government may precipitate another dispute which will create still greater stagnation in our industrial affairs.

There is another aspect of this matter which, I have observed, affects my constituency. A few weeks ago the Clerk to 'be West Bromwich Board of Guardians, which deals with the poor of Wednesbury, made a statement to his Board calling attention to the unemployment in Wednesbury, and he had some critical things to say regarding the administration of the employment exchanges. He contended that a large number of the unemployed who are receiving relief from his Board ought to be receiving benefit from the employment exchanges. He said a large number of Wednesbury workers had had their benefit disallowed because it was stated they were not genuinely seeking work, but ho stated that he had ample evidence that these men were genuinely seeking work, and he objected to the financial responsibility of assisting these people being placed upon his Board. If this state of affairs continues, it may well be that local authorities, through their inability to cope with the problem of poverty, will compel the Minister of Labour to loosen his administration and to withdraw some of the restrictions which now exist, with the consequence that a large number of the unemployed now obtaining relief from the poor law will come back to the employment exchanges for benefit, and this will increase the calls upon the Fund, in addition to whatever extra burden may fall upon it as a, result of the introduction of laboursaving machinery.

I do not think I can be accused of making any extravagant statement, and, if what I have said is likely to prove true, does the right hon. Gentleman think that this sum of £10,000,000 will be suffi- cient? I do not think the Parliamentary Secretary to the Ministry really had much faith in it. I doubt whether I can at the moment put my finger on his actual words, but I think he estimated that this sum would last for a period of weeks —a short period—and then become exhausted.

Mr. BETTERTON

The hon. Member must not misunderstand what I said. I said that I was not to be taken as making any such prophecy at all. Other words must not be put into my mouth.

Mr. SHORT

I did not want to misrepresent the hon. Member.

Mr. BETTERTON

I am sure you did not.

Mr. SHORT

But although I cannot put my finger on the actual words, I know that the hon. Member did make a calculation that this sum would be exhausted within a period of so many weeks.

Mr. BETTERTON

Yes.

Mr. SHORT

And I think he said, if I recollect aright, that the period would extend somewhere up to May of next year. I wish to know what is to happen when this extension of borrowing powers is exhausted. The right hon. Gentleman the Minister may not be here, he may be appearing before the country, because the General Election may be upon us in the last few weeks of May, and if the fund be then exhausted what will happen to the unemployed? These are considerations which do not concern us only as legislators. Though we are not the victims of unemployment, though we are not suffering, I know that the hearts of Members on all sides of the House throb in sympathy with the great army of the unemployed and those who may yet join it. In these circumstances and in all seriousness I ask the right hon. Gentleman to give us further information showing upon what he has based his Bill and the grounds on which he feels justified in asking for this sum of £10,000,000—not, as I have said, that we object to granting £10,000,000 but we do wish to feel satisfied that the calculations he has made justify the request, and, further, that the sum will be sufficient to meet the exigencies of the unemployed 12 months hence.

Mr. ERNEST BROWN

Hon. Members will find only two considerations to temper their dissatisfaction at having to pass this Bill. The first is the fact that the problem of unemployment, which has worried Members representing those cities where the live register of the unemployed is a very heavy one, is at last in the forefront of the Government's mind. It is obvious that the Minister could not come to the House for power to borrow another £10,000,000 without having first gained the ear of his colleagues in the Cabinet; and therefore we have this advantage, that there will he no likelihood of the Government under-estimating the tragedy which is represented by the figures of the men on the live register. I only wish that hon. Members representing the constituencies which record low figures of unemployment, or no figures at all, could realise how intense is this problem in the black areas, and I wish the Treasury had a representative on the Government benches at the moment, because then we might have some hope that the Treasury would revise its view about the merits of borrowing.

The Chancellor of the Exchequer made a speech on borrowing, and I will quote what he said from a report in the "Daily News" and "Westminster Gazette" of last March. The article was headed Borrowing by the State must he firmly resisted. In reply to a deputation from the Federation of British Industries, the Chancellor of the Exchequer said: But as they bad urged a policy of borrowing, he felt bound to point out to them that this was not the time to weaken or dissipate the national credit strained as it had been by the events of the last. 10 or 12 years, and by the melancholy episodes which occurred last year. Every form of borrowing impaired the national credit. There were demands for all kinds of developments—the Post Office extension, for electricity, for London bridges, for roads, for Imperial development, for guarantees under the Trade Facilities Act. But it must be remembered that everything taken in credit, just like everything taken in cash, was taken out of the common store. The deputation had referred to the need for telephone development. But even in a remunerative service, he said, it did not follow that uncontrolled expansion would be attended by profitable results. In present circumstances their policy must be, not the dissipation of their national credit for schemes of expansion and State-impelled expenditure, but the careful husbanding and frugal employment of that credit. There had been a deficit last year, and there would, of course, be a deficit this year. Projects for fresh borrowing must be firmly resisted, and an earnest effort continually made to pay off the obligations of the State. This new demand for borrowing shows how narrow and partial has been the Treasury view from the beginning of the tenure of office of the Chancellor of the Exchequer. Instead of sending the Minister of Labour down to the House asking for powers to borrow an additional £10,000,000, surely it would have been far better to put men to work on remunerative capital development than to keep them standing idle in the market place saying "No man will hire us" and drawing a bare existence in the shape of unemployment pay. This Bill ought to awaken the national mind. When we find this great army of 1,250,000 of our fellow countrymen are wanting work, surely that is a time for a sustained effort, not to borrow money to the extent of £40,000,000 in order to keep men idle, but to use the powers of the State to carry out a policy of national development.

I wish to thank the Minister of Labour for sending me the memorandum showing some of the difficulties of making an adequate examination of the effect of the 30 contributions rule up to next April. If the right hon. Gentleman before next April is in a position to make a simple investigation in relation to representative exchanges to see what the possibilities will be when the new rule comes into operation, I hope he will not overlook the Employment Exchange at Leith. I say that not because it is my own constituency but because Leith has been singularly unfortunate. Not long ago it was made part of the City of Edinburgh. If Leith had remained on its own, it would have remained a necessitous area, but as it is now a part of the whole city, it does not come within the average figure which is reckoned as a necessitous area. While thanking the right hon. Gentleman for sending me a memorandum, I hope when he makes his promised examination of this question—it has a bearing on this Fund, because as the men go off and on the Fund there will be a deficit or a surplus—he will take Leith Employment Exchange into consideration. Of course, I shall vote for this sum of money, but I should vote for it with a lighter heart if it were going to be spent upon productive work instead of upon unemployment benefit.

Lieut.-Commander KENWORTHY

I wish to add only a very few sentences to what has been said in this Debate. I will not follow the example of the right hon. Gentleman the Member for Preston (Mr. T. Shaw) who surprised me by his references to wagers made across the floor of the House. I do not like to hear these references to Ministers laying odds, and I expected my right hon. Friend to condemn such things in this House. What stands out in this Bill is that the Government expect a continuance of an abnormal state of unemployment, and they seem to be in a fatalistic mood. On the Second Reading of the Bill the Minister of Labour took up that standpoint, and the Government are meeting that attitude by borrowing more money. They tell us that they hope that, by more careful administration, the deficit will be gradually reduced.

I make this suggestion to the Minister of Labour. I do not think that his staff, is adequate in the provinces for the administration of the Fund. The staff is inadequate because the men have to be dealt with in great numbers. Sometimes they are dealt with rather harshly, and there is a tendency on the part of the principal officers to say. "We will wipe these people off the register," or else there is lax administration, and in that case the people get relief who are perhaps not entitled to it. in consequence of the staff being inadequate to deal with such large numbers there is often great hardship inflicted on the men themselves who are only too anxious to take a job at once, but if they are kept waiting for long periods before they can be dealt with by an inadequate staff of officials, they get hungry, cold, tired, and miserable, and very often they suffer from exposure to the weather through inadequate accommodation. I know the Minister of Labour has promised to devote his attention to the administrative problem. My view is that it would be economical in the end to have adequate unemployment exchange staffs.

Mr. SPEAKER

That is a matter of administration which we cannot discuss on the Third Reading.

Lieut.-Commander KENWORTHY

I only desire to make that suggestion to the right hon. Gentleman. We have heard a good deal in this Debate about unemployment and the relief of it by the St. Davids' Committee. I wonder if the Minister of Labour has seen the latest pronouncement by Lord St. Davids' which appeared in the "Daily Express" on Saturday. If he has not I would recommend him to read the remarks of a man who, after all, has done a great deal to help to relieve the problem of unemployment, within the limits set him by the Treasury. I think Lord St. Davids' indictment of the Treasury is the most damning that we have had.

Mr. BATEY

The Parliamentary Secretary told us that it was to the credit of the House that there had been no divisions on the Bill and no Amendments. I should like the hon. Gentleman to remember that we are not satisfied with this Bill. No man who takes an interest in this Fund and a keen interest in employment can be happy with the thoughts given rise to by this Bill. The fact that we have this Bill before the House is in my opinion due to what I believe to be a wrong policy adopted by the Government towards this Fund. The Government have pursued three policies which have been wrong. The first wrong policy they adopted was not carrying out their legislative proposals of 1925. The second was not making the machinery of the Bill sufficiently expansive from 1927 upwards. The third is in using the Fund belonging to the Unemployment Fund for other purposes than that of relieving unemployed men. This House spent a lot of time discussing the question of unemployment when the Bill of 1925 was under discussion. In that Measure the House gave power to the Minister of Labour to increase the State contribution, which at that time was 6¾d. per person employed per week. At that time the House gave power to increase the amount by 1d. per week. There was then only a little over £4,000,000 debt on the Fund, and although the debt was so low the Minister of Labour got power to increase the State contributions by 1d. per week.

Last Wednesday I asked the Minister if he could give the House an estimate of the amount of money yielded by that extra 1d. per week. I know that there was not much time for the Minister to give me the information on Wednesday night and I am not complaining, but I should like the Minister to-night to tell us if the Government had carried out their original proposals what would have been the state of the Fund to-day as compared with the position in which we now find ourselves. Instead of increasing the State contribution as was proposed in 1925, we find nine months afterwards the Chancellor of the Exchequer acting like Dick Turpin, and instead of increasing the State contribution to the Unemployment Fund, he reduced the State contribution under the Economy Bill from 6¾d. per person to 1d. per person. I believe that the course taken by the Chancellor of the Exchequer in that respect is responsible for a great deal of the trouble in which we find ourselves to-day. I have been looking up the speech made by the Chancellor of the Exchequer when he moved the Second Reading of the Economy Bill, and when he was asking for power to reduce the State contribution from 6¾d. to 6d. he said: He prophesied that the solvency of the Fund would be in no way affected. This Bill is the answer to the prophecy made by the Chancellor of the Exchequer in 1926, and we find to-day that the solvency of the Fund has been affected by the action of the Chancellor of the Exchequer. In order to justify his raiding of the Fund in 1926 the Chancellor of the Exchequer said: There would be a stricter supervision over the Fund. If there has been a stricter supervision it does not show itself in the state of the Fund to-day. The Chancellor of the Exchequer also said: Whilst there had been a stricter supervision of the Fund the better position of the Fund was mainly through the improvement in trade. As a matter of fact, there was no improvement in trade. The Chancellor of the Exchequer in 1926 used three arguments to justify his raiding of the Fund, which since then have been falsified. I not only want to complain that the Government have not carried out their legislative proposals of 1925, but also that last year, when they passed their Unemployment Insurance Bill, they made the machinery so expensive as compared with what it was before. Under that Measure, the cost of administration between 1927 and 1928 was increased by no less than £228,068. That was an enormous increase, which, with the Fund in the condition in which it is, cannot be justified. Had that amount been used for paying benefit instead of in cost of administration, it would have provided 3,655 unemployed men and their wives with 24s. a week for a full year, and the money would have been better spent in that way. Not only was the total cost for administration increased, but last year the Minister also increased the cost of the courts of referees. In 1927 these only cost £26,000 and that was increased by the Bill of last year to £200,000. That increase in the cost of the courts of referees cannot be justified either. The amount again would have provided over 3,000 married men and their wives with unemployment benefit at the rate of 24s. a week for a full year, and again the money would have been far better spent in that way than in increasing the cost of the courts of referees. Personally, I think it was most unwise, in the Bill of last year, to increase the cost of the courts of referees, because we find that the money-, instead of being given to unemployed men, is being given to solicitors, who have been put in the chair—

Mr. SPEAKER

These remarks would be more suitable for a Debate on the Estimates.

Mr. BATEY

I am discussing, the Fund and the state of the Fund, and the reason why it is in the position in which it is: and I am submitting that it would not have been in this position had it not been for the increase in expenditure for which the Government obtained powers last year. If you are going to rule that, in following that line, I am out of order, I had better sit down altogether.

The MINISTER of LABOUR (Sir Arthur Steel-Maitland)

As no other Member of the House appears to wish for more information, perhaps I might be allowed to reply quite briefly to some of the points that have been made, and I hope I shall not be trespassing too far beyond the rules of Order if I answer the statement of the last speaker by saying that the difference in cost between the system of courts of referees which existed before and the more extended system of the present day was estimated at about £200,000. That estimate was given, of course, as we quite frankly admit, without our being able to make sure what the expenditure would be under a new system. It is never possible to calculate the expense of a quite new system with the same accuracy with which one can forecast the next year's expenses of a system already existing. As an, outside figure, £200,000 was taken. I am informed that the excess over the previous system that is actually likely to be reached is about £100,000. That is the price which has to be paid for doing away with the Ministerial discretion. Nearly all hon. Members opposite wished to have the system abolished under which Ministerial discretion could he exercised. It was done away with under the Bill, hut, in place of that, another system had to he set up. The only other system that could be set up is one by which you could get a legal trial of the case without any discretion entering into it. That was the origin of the present system of courts of referees, and additional expense was quite unavoidable. As I have said, the amount of it is likely to be considerably less than the estimated outside figure.

As regards one or two of the other points, I am glad to deal with them. The first is the point raised by the right hon. Gentleman the Member for Preston (Mr. T. Shaw), my predecessor. I do not want to enter again into violent controversy with him, but, when he accuses me, in his somewhat full-blooded way, of not being ready to admit that I could possibly he wrong, he seems to have selected certain passages of my speech, and omitted others. I would ask him to read through the statements I made somewhat more in detail. He will there find that I said that our belief, and it is still my own belief, was that the figure might quite well fall during the year beginning in April, 1929, and that a further reduction was possible afterwards; but I went on, as I pointed out the other day, to say that: If … our expectations are not realised, it will be perfectly possible to deal with the situation before that time arrives in 1929. Then I added that I quite purposely and deliberately asked for the interval before the beginning of the 30 contributions test, in order that, if there should be any upset in our expectations, there should be time to reconsider and modify our proposals."—[OFFICIAL REPORT, 28th November, 1927; Col. 177, Vol. 211.] In the second place, the right hon. Gentleman will I think admit that I never made any of those pretensions to infallibility which he attributed to me. I would make one additional remark with regard to his request as to giving information. I have been ready to give information fully and freely when it has been asked for, but, of course, if I am asked to give information about a point on which I realise that at the moment no reliable information is forthcoming, then the right hon. Gentleman is asking me to commit a sin for which he himself would like to haul me over the coals afterwards. I would not like to bring before the House a figure which I knew, and might point out at the time, could not be the subject of any correct estimate. Then, later, just because it was put forward officially, hon. Members, opposite, or on this side, or outside the House, might base their expectations upon it and come to me and say, "Why did you put forward a figure which is not only falsified by events, but which at the time you knew would be so falsified?" That is the reason why, as the hon. Member for Leith (Mr. E. Brown) knows quite well, I said to him that at this moment I could not give any estimate that was worth calling an estimate as to what would be the effect of the operation of the 30 contributions rule, but that I hoped that, before the arrival of the time when it would be put into effect, I should be able to lay before the House information which would enable them to form an opinion on the subject.

So much for that point, but I would ask the right hon. Gentleman to remember what happened in the Second Reading Debate. To-day he has gone off into quotations from the rest of my speech, but he has not either substantiated or withdrawn the quotation which he did make about me, and which I denied. I have not the report at hand at the moment, but the right hon. Gentle- man knows quite well the point to which I refer, when he charged me with having made a direct statement that I believed that at this moment the unemployment figures would stand at 750,000. I never did, and the right hon. Gentleman could never find any statement of mine which really authorised such a charge on his part. I hope that in these circumstances he will withdraw; I think he should do so unless he can find such a statement. I say quite frankly that I have always been prepared to admit, and the quotations which I have given show that I am prepared to admit, that no forecasts with regard to unemployment are infallible. Therefore, when the right hon. Gentleman puts into my mouth a perfectly definite forecast of this kind which I never made, I hope that he will either withdraw it or give me some reason in substantiation of what he says.

Mr. T. SHAW

The right hon. Gentleman made this statement. Speaking of me, he said: The right hon. Gentleman has attributed to me the statement that by this time we should have reduced the figure of unemployment to 750,000 and almost wiped out the deficit, and he has repeated that statement this afternoon."—[OFFICIAL REPORT, 15th November, 1928; Cols. 1238–39, Vol. 222.] I have looked through my speech, and I cannot find the statement.

Sir A. STEEL-MAITLAND

If the right hon. Gentleman did not repeat it that afternoon, I apologise for having charged him with repetition, but the original statement is there in which he said: He wants credit to the extent of £10,000,000 entrusted to his Department, on, I suppose, as solid a basis as he had last year for the Bill which he introduced founded on calculations that by this time we should have 750,000 unemployed and have almost wiped out the deficit." —[OFFICIAL REPORT, 13th November, 1928; Cols. 839–840, Vol. 222.] I have never introduced any Bill whatsoever based on that calculation, nor have I made it myself. I ought, perhaps, to stand in a white sheet for having suggested a bet or wager in this House with regard to unemployment. I can only make this confession to the House. I have never concluded any of these wagers with regard to unemployment save one. I concluded one with the right hon. Gentleman himself, for the sum of half-a-crown. I keep the coin representing that, which he duly paid over, as a cherished possession, which I hope will not be taken from me.

Lieut. - Commander KENWORTHY

Did you pay Betting Duty on it?

Sir A. STEEL-MAITLAND

With regard to the questions which were put to me by the hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy), they are, as I think he himself realises, not quite in point on the Third Reading of this Bill, but perhaps he will communicate with me about any inconveniences that are suffered at Hull. We are anxious to do our best to see that everyone who is unemployed should be given all reasonable facilities.

Lieut. - Commander KENWORTHY

Perhaps the right hon. Gentleman will call for the file of my correspondence with him or the Parliamentary Secretary, where he will find the whole subject dealt with. Some improvement has taken place, but there is still room for improvement.

5.0 p.m.

Sir A. STEEL-MAITLAND

It is perfectly impossible, of course, to get perfection in this world, but we try to approach it by degrees, that may he slower or quicker according as opportunity makes it possible for us. The hon. Member for Spennymoor (Mr. Batey) and another speaker on the same side referred to the stringency of the conditions, and my hon. Friend and myself have been blamed for making conditions that were too stringent in regard to the number which I said in my speech had been lately disqualified. If the hon. Member who made that complaint will refer to the conditions of the past he will find that that number of disqualifications, broadly speaking, has taken place under different Administrations at all times. It is no proof of any callousness. It is no proof of any wish of the present Administration to grind down the faces of the unemployed. In 1924, the disqualifications amounted to between 500,000 and 600,000. The disqualifications of the latest quarter to which I alluded were just under 130,000, and he will see, therefore, that on the whole there is comparatively little difference in the amount of disqualification for benefit which has taken place between one year and another. The object, in his opinion of the supposed stringency, was to make the money last further, and therefore to make a limitation of the extended borrowing powers to £10,000,000 adequate. The answer is this. There is no intention of any kind to make the conditions stringent in order to eke out the money further. The reason we ask for £10,000,000 is so simple that unless hon. Members opposite were convinced that the Parliamentary Secretary and I were both ingenuous people they would hardly credit it. It is this. We believe that £10,000,000 ought to be enough to last us through the greater part of next year. We have no particular date in front of us as to the time when it will come to an end. The right hon. Gentleman appeared to think it would come to an end about May.

Mr. SHAW

At the present rate, which is perfectly true.

Sir A. STEEL-MAITLAND

At the present rate, calculated arithmetically, and he said he expected the rate would be faster rather than slower. We expect it to last longer than that without putting any particular date to it. That no mortal could do. We put a limit to the £10,000,000, and we inserted the latter part of the Clause simply in order to enable this House, whichever party is in power, to keep control and to keep a review over the whole question of unemployment, so that if an extension of the loan, or any other means of meeting the deficit, was necessary, the House could rest assured that it would have the power to review the situation again. That is the one true and absolute reason why we were content with the figure of £10,000,000, and why we were anxious to have the Bill couched in its present form. I have answered these points briefly but I trust it will be enough to show hon. Members that I am willing to give the information that is required, and to enable them to give the Bill its Third Reading.

Mr. BROAD

Before the right hon. Gentleman sits down, will he deny that secret reports are made, to the detriment of the men?

Mr. DEPUTY-SPEAKER (Mr. James Hope)

The right hon. Gentleman has sat down.

Miss WILKINSON

Will any part of this £10,000,000 be used for the opening of sub-exchanges where the men have a tong way to walk? In some cases employment conditions improve in a certain area, and a sub-exchange is closed. Unemployment gets up again and then the men have a long way to walk. I have had considerable correspondence with the Department about the case of a man in my constituency who had to walk between one and two miles. They cannot afford to pay a 2d. omnibus fare. There is also the case of the men who have to sign every day, and it is a great handicap in regard to their getting work. The case is much worse in the neighbouring constituency of Cleveland, where some men have to go five miles before they can sign on.

Mr. DEPUTY-SPEAKER

Subject to what the Minister may say, I should have thought this was a matter for the Ministry of Labour Estimates and not for this Bill. Unless this is relevant to the Bill I cannot allow the hon. Lady to go on.

Miss WILKINSON

On a mint of Order. I do not want to embarrass the Minister. I only want to ask whether part of this sum could be used for the improvement of facilities.

Sir A. STEEL-MAITLAND

These points are connected with the Third Reading of the Bill by a thread of greater or less slimness as the case may be. But I am always glad to give such information as I can. The opening of sub-exchanges is a matter that comes under the general administration of the fund. The whole general administration costs, as well as benefits, are paid out of the fund as a whole, and therefore it can be said that enabling the fund to meet the calls upon it enables it to meet that call should it be justified as well as others. As regards the other point, reports are furnished to officials of the Court of Referees, but I am not sure that they justify the phrase "secret reports," which is a sort of innuendo, as if something was done behind someone else's back. This is a rather technical point which has nothing very immediately to do with the Third Beading of the Bill. Therefore if the hon. Member wishes to put me a question in detail. I will answer it, but speaking on the spur of the moment, subject to correction, my belief is that where any official of the Exchange has interviewed an applicant, they let the applicant know what is in any statement they make.

Mr. DEPUTY-SPEAKER

The right hon. Gentleman has made it quite clear that this is a question of administration only, and, if this matter is to be pressed, it will have to be on another occasion.

Question put, and agreed to.

Bill read the Third time, and passed.