HC Deb 18 September 1931 vol 256 cc1167-250

Considered in Committee under Standing Order No. 71A.

[Sir DENNIS HERBERT in the Chair.]

Motion made, and Question proposed, That, for the purposes of any Act of the present Session to authorise the making of Orders in Council for the purpose of effecting economies in expenditure falling to be defrayed out of public moneys and improvements in the arrangements for meeting such expenditure, it is expedient to authorise the payment out of moneys provided by Parliament of such sums as may tie required by reason of any provision made by such Orders—

  1. (a) for altering the respective proportions in which expenditure in respect of any of the services specified in the said Act is to be defrayed out of any fund established by, the enactments relating to any of the said services and out of moneys provided by Parliament;
  2. (b) for increasing the contributions to be made to the unemployment fund or for securing that as from the date on which the Treasury cease to have power to make advances for the purpose of meeting deficiencies in that fund, any such deficiency shall be met out of such moneys as may be provided by Parliament for that purpose."—(King's Recommendation signified)—[Mr. Chamberlain.]

Lieut.-Commander KENWORTHY

On a point of Order. I would draw attention to the fact that there is no recognised representative of the Treasure present, neither the Chancellor of the Exchequer nor the Financial Secretary. It is very unusual in a case of this kind.


I do not think the hon. and gallant Member is entitled to require their presence.

Lieut.-Commander KENWORTHY

Would it be in Order to move "That the Chairman do report Progress," until we get a Treasury representative here? This is a question affecting the privilege of Parliament. This is a Committee of Ways and Means matter, and I most respectfully protest.


Obviously, I could not accept a Motion of that kind.

The MINISTER of HEALTH (Mr. Chamberlain)

I understand that it will be convenient to the Opposition if I begin by making a general statement upon the scope and, meaning of this Resolution. Afterwards either I or a representative of the Treasury, or some other Minister, will be able to answer any points raised in the Debate. At first sight the wording of this Resolution may seem a little obscure. It may not be apparent to hon. Members to which of the services mentioned in the Schedule to the Economy Bill this Resolution refers. I begin by stating that of the five services which are detailed in the. Schedule only two require a Financial Resolution, namely, National Health Insurance and Unemployment Insurance. They come within paragraphs (a) and (b). I would go even further than that, because it is not the whole field of National Health Insurance or the whole field of Unemployment Insurance that will be governed by the Resolution.

It is only certain specific provisions, among the various methods which the Government propose to adopt in connection with these two services, which are the subject of the Resolution, and I had better mention which are those specific provisions. Under National Health Insurance, it is the provision relating to the remuneration of doctors and chemists and that alone. Under Unemployment Insurance, as is perhaps more readily perceptible from the form of paragraph (b), it is first the proposed increase of contributions on the part of employers and employed and the State and, secondly, the substitution for borrowing by the Unemployment Insurance Fund, of a direct charge upon the Exchequer in the shape of a deficiency grant. The Resolution purports to authorise the payment out of moneys provided by Parliament of such sums as may be required by reason of any provision made by such Orders and there are two paragraphs. Paragraph (a) is as follows: for altering the respective proportions in which expenditure in respect of any of the services specified in the said Act is to be defrayed out of any fund established by the enactments relating to any of the said services and out of moneys provided by Parliament; Applying that to the question of National Health Insurance I would like to explain to the Committee what the proposals are in connection with doctors and chemists. The remuneration of these two classes of persons is part of the benefits under the Act and those benefits are paid for partly by contributions and partly by the Ex- chequer. The result is that the effect of the proposal to deduct a certain proportion of the remuneration of doctors and chemists and to return that deduction to the Exchequer is that you give back to the Exchequer something which the Exchequer had already paid out for another purpose. That is only an example of the extraordinary complication which is found throughout the National Health Insurance scheme with its numerous subsidiary funds and which is always a little difficult to follow if one has not a great familiarity with the provisions of the various Acts.

In the case of doctors and chemists it is proposed to reduce their remuneration by approximately one-ninth. I would like here to pay my tribute of admiration and gratitude to the doctors and the chemists for the spirit in which they have received this cut. There was no question on their part. They said at once that, treating this deduction not as a readjustment of their remuneration on its merits but simply as a call made upon them to contribute to the national need, on that basis they would readily pay their share. That was a very fine example and we are very grateful to them. The result of that action will be, as mentioned in the White Paper, that in a full year there will be forthcoming £850,000 by way of deduction from the doctors' remuneration, and £120,000 by way of deduction from the chemists' remuneration and those sums will be appropriations-in-aid of the Exchequer payments in the cost of administration. I do not know that I need say anything more about paragraph (a) except that it might, perhaps, be held to cover the possibility of a technical charge upon the Exchequer in respect of unemployment insurance as well, but I shall refer to that point in a few moments. I proceed in the meantime to paragraph (b) which is as follows: for increasing the contributions to be made to the unemployment fund or for securing that as from the date on which the Treasury cease to have power to make advances for the purpose of meeting deficiencies in that fund, any such deficiency shall be met out of such moneys as may be provided by Parliament for that purpose. Every one knows that with regard to the debt of the unemployment insurance scheme, the position has been going for some time from bad to worse. The debt in June, 1929, was a little under £37,000,000. The whole cost of transitional benefit, estimated under present conditions at something like £35,000,000 for this year, has been transferred direct to the Exchequer. In spite of that the debt at the present time is £100,730,000. The borrowing powers, as the Committee are aware, are for £115,000,000, but the proposal of the Government is that borrowing shall now cease entirely. After the various deductions which will follow upon the different proposals put forward, the deficiency which will still exist is estimated for next year to amount to £22,000,000 and that will fall directly upon the Exchequer in the form of a deficiency grant. On page 11 of the White Paper the finance of the Unemployment Insurance Fund for next year is set out in summary form. It is based upon an estimate of an average live register of 3,000,000. It shows that there is an increase in the contributions of employers and employed persons amounting to £10,000,000 and the increase in the Exchequer contribution, which will be raised from 7½d. per person to 10d., making it the even 10d. all round from each of the three partners, will cost the Treasury £5,000,000 next year and is expected to cost about £2,500,000 this year. There are the two items for which this Financial Resolution is required under Unemployment Insurance—the increase in the cost of contributions and the deficiency grant to replace borrowing.

Now I come back to the point about paragraph (a) in connection with the Unemployment Insurance Fund. It may be thought, and it may be said, that the result of one of the proposals of the Government, namely, the reduction from 52 weeks to 26 weeks will he to throw more persons into the class which has hitherto received transitional benefit. That would, in itself, impose an additional charge on the Exchequer. On the other hand, by so much as you increase the charge on the Exchequer in that respect, you diminish the charge upon the Exchequer in respect of the deficiency grant.

Therefore, the one is set off against the other, and in the end there is no new charge upon the Exchequer at all, but in case there might be a technical charge on the Exchequer in respect of the first of those considerations, it will be covered by paragraph (a) of the Resolution.


Do I understand the right hon. Gentleman to say that paragraph (a) only refers to the possibility of there being a charge owing to the transfer of the transitional fund? Does it not arise owing to the whole decision of the Government not to borrow on account on the Unemployment Fund?


No, not paragraph (a). Paragraph (b) deals with the decision of the Government to cease borrowing and to make a deficiency grant. Paragraph (a) is a question of altering the proportions in which expenditure is borne by a certain fund and the Exchequer respectively, and it is therefore only applicable to unemployment insurance in that technical sense which I have endeavoured to explain. I have now said everything that occurs to me to be necessary to say at this stage, and I think I may leave it there.


Before the right hon. Gentleman sits down, I want to ask if he will explain a minor point that has caused me some difficulty, and that is the scope of this Financial Resolution. With regard to the last paragraph on page 6 of the Memorandum, "Exchequer Grant to the National Health Insurance Central Fund," I should like to have that explained by the right hon. Gentleman. The transference of contributions from the pensions fund to the central fund would seem to involve a future charge on the Exchequer. If it is so, how can it be done without a Financial Resolution covering it?


It is true that the arrangement which transfers certain sums of money from the pensions account to the central fund of the National Health Insurance scheme will ultimately involve the Exchequer in a fresh charge, but that will not be under this Bill. I think I said on a previous occasion that under present arrangements the pensions account is balanced up to 1946. The effect of this transference of certain moneys from that fund to the central fund of the National Health Insurance scheme will be that it will only be balanced up to about 1943; that is to say, the balance will come to an end about three years earlier than it would otherwise have done. When that happens there will be some fresh charge on the Exchequer, which will take place three years earlier than it would have done. That will require a new Act of Parliament, and therefore is not covered by the present Resolution.


On a point of Order. I understand that this is the only Money Resolution that is going to be submitted to us in respect of this Bill, or so I gather from the announcement made earlier by the Patronage Secretary, and I understand that the Minister has argued that this Resolution applies only to the two Insurance Funds. I want to submit to you, Sir Dennis, that the Bill to which the Resolution refers also imposes a charge on the Exchequer in respect of education and that this has been most clearly foreshadowed in Circular 1413 from the Board of Education, which the local authorities have been led to understand is a sort of preliminary draft of the Order in Council which is to be imposed upon them. May I in that connection read to you two short paragraphs—


That is not a point which arises here. If, when we come to "any Act of the present Session" referred to in the Resolution, the hon. Member thinks there is anything in the Bill which goes beyond the scope of the Resolution, that will be the time for him to raise it. For the moment, we only have before us the Financial Resolution proposed by the Government.


Just to elucidate the point so that there may be no misunderstanding, may I take it that if I still hold the same view, then it will be competent to object to any other service that I think imposes a charge on the Exchequer being included in the Bill unless a Financial Resolution has been introduced in respect of it, and that you or your deputy will then give that contention consideration without being prejudiced by what has happened to-day?


That is not a point on which I need do more than remind the hon. Member that if he or any hon. Member desires to raise any question, that a Bill or part of a Bill before the House is not sufficiently authorised by such Financial Resolution as is requisite, he can do so when such Resolution arises.


Is there any provision in the Money Resolution to recompense public assistance committees for any work which they may be called upon to do to conduct inquiries through their servants and relieving officers?


It is not required.


This is the first occasion on which we have had brought before us directly the unemployment policy of this Government, and we on this side give it from the outset our uncompromising hostility. The right hon. Gentleman has explained to us the somewhat complicated details with regard to this scheme, and I do not know how far, Sir Dennis, you will permit this debate to go. Quite clearly, there are involved in the proposals which are included in this Resolution a great many points relating to the whole unemployment policy of the Government. The right hon. Gentleman himself has mentioned the proportionate contributions to be paid in future by the Exchequer as compared with the new contributions proposed to be paid by the employers and the employed, and he has also referred to the 26 weeks period which will be introduced under the policy of the Government.

I take it, therefore, that the question of those contributions and of the 26 weeks period may he discussed in this debate, as well as the purely financial question of the transference from borrowing to the Exchequer. If I am right in that, I have no doubt the Debate will cover a pretty wide field, but for two reasons I propose to confine what I have to say to a distinctly narrow compass. In the first place, I do not want to take up the time of the Committee, because I realise that many of my hon. Friends behind me wish to take part in this discussion, and possibly hon. Members on the Government side also, and, in the second place, I want to devote my special attention to what after all is the main object of this Financial Resolution, which is to transfer the cost of unemployment from the fund to the Exchequer.

Before I come to that, there is one point about which I should like further information. The right hon. Gentleman referred to the question of the 26 weeks. I should like an answer in the course of the debate as to when that period of 26 weeks starts. Does it start from now so that the charges will not become operative until six months from the present time, or is it already con- sidered as having been begun, so that they may become operative in certain cases without any further delay? The right hon. Gentleman explained that the Resolution covered one other matter besides unemployment, that it dealt with the proposed reduction to the doctors and chemists, because, as I understand the matter, the money so obtained by those reductions comes back into the Exchequer. With regard to that, I should like to say that if those gentlemen, the doctors and the chemists, have made this agreement with the Government, of course we offer no objection to that side of the proposal, and I think that we, like the right hon. Gentleman, should tender to those gentlemen our thanks for being willing to make those sacrifices. [AN HON. MEMBER: "Loud cheers!"] Sacrifices are very unpleasant, but if they are agreed to they are certainly acceptable.

Coming to the larger and much more important question of unemployment, we have this alteration that is proposed in the rates of contribution of the different parties to the unemployment insurance. The contribution which the State is making is being increased, according to the Government proposals, from 7½. to 10d. in the case of a man and from 6½d. to 9d. in the case of a woman. I want to point out to the Committee that the percentage increase which is falling upon the workpeople is the largest percentage. It is 43 per cent. in the case of the workers, and it is only 25 per cent. in the case of the employer, and only some 33 per cent. in the ease of the State. The effect is to reduce the purchasing power of the workers concerned, and to force them to an economy on that account.

Then there is the burden which is being put upon the employer by this alteration in the rate of contribution, and I should like to ask the spokesman of the Government who is going to reply whether the Government think that that will be of any benefit to employment? It seems to me that the addition of 2d. in the case of every man and woman whom a manufacturer employs, so far from increasing employment, will be to that extent detrimental to him in his competition with his rivals abroad. Therefore, this alteration, so far from assisting industry and employment, so far from assisting the international trade balance, is actually putting an additional obstacle in the way. As I understand it, the position of the Government in this matter is that this is being undertaken in the interests of economy and in the interests of compelling both the workers and others to spend less and, to that extent, in a very small degree, to import less from abroad. I was rather surprised, therefore, to read in the papers this morning the letter which has been sent by the Prime Minister. As a result, I am puzzled to know whether this campaign, of which these proposals are part, is or is not a campaign to reduce the spending of the country. In his letter the Prime Minister says: It is the imperative duty of private citizens and employers to maintain, as far as is possible, the ordinary employment which they give to labour. In fact, if they could expand this they would help the country greatly. I know that when taxation gets as high as it is now, it reduces consumption and limits personal expenditure. But I would appeal to everyone to do their utmost to make that reduction as small as possible. Wise and courageous expenditure, where incomes wil bear it, should be regarded by all of us as an obligation which we must not avoid. I have always thought that the policy advocated by the Government of cutting down expenditure was an improper and injurious one, but if they pursued it consistently and logically all through, it would at least be comprehensible. What is quite incomprehensible to me is that the Government, in order to relieve the particular crisis, should economise as a State, cut down people's wages, salaries and remuneration of all kinds, which must have the effect of inducing them to reduce their own expenditure, and, at the same time, invite private individuals to spend, if possible, even more than before. That seems to me to add to the muddled thinking, which is at the bottom of the whole of this policy, an incomprehensible illogicality.

That brings me to the other aspect of this Money Resolution. The proposal of the Government is to stop borrowing on behalf of the Unemployment Fund, and to throw the whole burden, on the current revenue of the State. I want to examine the reason for that. The professed reason for it is that a nation must pay its way, and the further alleged reason is that if we do not do that, we shall go the way of Germany and Austria in the early 'twenties when their currencies were being inflated out of all recognition. Let me examine that. It is quite true that in those 'twenties the German and Austrian Budgets were unbalanced, and that the mark and the krone were falling. At that time there was a definite and perfectly recognised inflation of the currency and credit of those countries, and it was in order definitely to stop that process that it was said, and said quite correctly, to them that they must balance their budgets and must not keep on borrowing.

I would ask hon. Members opposite whether there is any sign that the difficulties in this country to-day arise because we are inflating the currency. Is there any sign that credit is so easy and abundant that we must be careful lest from our expansive methods we are going to ruin in the way that they did in Central Europe? Is not the fact the exact reverse? I see, Sir Dennis, that you are about to rise. May I point out that this is the essential point of the Resolution. The object of the Resolution is to stop borrowing and to put these particular burdens on the Exchequer. My argument is directly concerned with that very point. It is concerned to show that that in itself is a mistaken policy, and that to pursue that policy may be to achieve the exact reverse of what our object is, which is to secure the stability of the monetary system of this country.


The hon. Member has somewhat altered the position by his explanation. I was watching him carefully, because I was afraid that he was going off into a general discussion of inflation or deflation, which would not be in order.


I had no intention of doing that. I am concerning myself specifically with this point, because it is the main point which, I think, the right hon. Gentleman will agree, is involved in this Resolution—that is to say, whether it is desirable and in the interests of the economy of this country at the present time that the whole of the burden of unemployment should be paid out of the current expenditure of the year. My argument has been directed to show that it is a false analogy which is leading us to think that we ought to do so.

The question which we have to put to ourselves is: Is this transference going to help our trade balance? I venture to suggest that it does not make the smallest difference to our trade balance. It puts upon the people of this country the necessity of providing the money to day out of revenue instead of providing it in the form of national borrowing. If it were true that there were a difficulty of finding money for the purposes of investment, there would be a great deal to be said for the policy that is now being adopted. That is not the case to-day. There are large balances lying idle, because there is no suitable investment for them to take up. Because of this, large amounts of money which have been lying idle for a long time past, have been transferred Abroad to the detriment of our trade balance and of the financial position of this country. This policy, so far from assisting the balance of international trade, is going to have exactly the opposite effect.

I have shown already that it will not benefit employment. On the contrary, my belief is that owing to the whole system of economy, as it is called, of which this is a particular item, owing to the additional cost which is being thrown on employers, owing to the reduction in purchasing power which is being imposed on the workers, unemployment will be very seriously increased. It is the opinion of a leading economist that between 300,000 and 400,000 men will be added to the unemployment list as the result of this policy. Whether that be so or not, I am not prepared to say, but it is perfectly clear that the net result of this policy must be to increase unemployment.

Possibly the argument will be put forward that, though this policy may in itself be bad, though it will not help us in our real difficulties and may therefore be contrary to the national interest, we may nevertheless be forced to adopt it for psychological reasons, and that we must take this action in order so to impress foreigners that they may be willing to lend us money which they would otherwise not do. If that. be the attitude, really we are getting to a pretty pass. It means that we must do something, which in itself is inherently mistaken, in order to please our foreign critics, that we must do something silly in order to satisfy them. Suppose they told us that we must return to a gold currency. Would a foolish proposal like that have to be adopted if it were made by foreign financiers? Again, supposing they were to tell this country that we must, in the interests of economy, give up cur colonial Empire. These things have only to be mentioned to show the absurdity of suggesting that we must carry out any policy, however foolish, to please those who are in a position to lend us money.

This Resolution is part of the general scheme for imposing unequal sacrifices upon different sections of the community. It will be of no avail in strengthening the trade balance of the country. It will increase unemployment. It will reduce the purchasing power of the people. It is, in fact, panic legislation brought in at a moment when, owing to the existence of a crisis, the Government do not appear capable of thinking intelligently. We on this side of the House will give it. our rigorous opposition.

Lieut.-Colonel FREMANTLE

I should like to speak with reference to para (a), which deals with the National Insurance Fund, in order to emphasise the point which the Minister has made, but which has not been made before, with regard to the cuts in the salaries of panel doctors. I have taken pains to find out what is the actual feeling on the subject in the medical profession, especially in the British Medical Association, which corresponds to the great mass of the medical men who are concerned. In an answer given in the House the other day, it was shown that the number of panel doctors has risen to something over 15,000. That is a very material section of the profession, the whole body of which is practically represented by the British Medical Association. It is interesting to note the line which the panel practitioners took in this matter. They met my right hon. Friend the Minister early in the month to discuss the question. It was very frankly discussed between them. It was shown that the contract made by the doctors originally was a definite one, a binding one so far as anything can be binding, and in the ordinary course of events any alteration asked for by the State would he submitted to a court of arbitration. I understand that the representatives of the profession definitely took the line that on this occasion they were called upon to make a cut, a sacrifice on behalf of the country, quite apart from any question of arbitration on a revision of their terms of employment.


A cut of 15 per cent.?

Lieut.-Colonel FREMANTLE

No, but of 111 per cent. They took this position very clearly and definitely, and I wish it to be on record that in undertaking to accept without opposition the cut that is put upon them they definitely agree to make a contribution to the financial position in the present emergency without prejudice to the necessity of a revision of the rates of pay in the ordinary way and when the time comes. When that time comes there is no question that much will be said about the increased demands made on panel doctors for services for which a capitation scheme of 9s. was fixed some few years ago. That will have to be considered on its merits; but this cut does not affect the actual merits of the case, any more than the cut in the pay of teachers or civil servants affects the question of the cost of living figures and so forth.

The cut proposed in the case of doctors is equivalent to a little over 11 per cent. of their remuneration. But when the undertaking to accept that was made by the representatives of the insurance practitioners it was not realised that at the same time there would be an increase in income tax. [Laughter ] That statement is met by hon. Members opposite with ribald laughter, but I would point out that the teachers are constantly saying that because of the Income Tax they have to pay and the other burdens of the community which they have to share no cut ought to be demanded of them. I hope the House will agree with me that in these circumstances the example of the doctors is very useful. When they agreed to this re-arrangement they had no idea that they were also to be subjected to extra demands for Income Tax and Petrol Duty. I do not argue about the Income Tax at this point, but the petrol duty is a very serious one, bearing specifically on the medical profession, especially on rural practitioners. We all know that rural practitioners may be called upon at any time of the night or day to drive five or ten miles, and in some parts of the country it may even be 20 or 40 miles, in order to attend one case, and that they get nothing extra for it. It may be an acute case, and they may have to visit the patient every day for a fortnight. They get nothing extra for it, and have to bear the cost of the extra petrol duty. That makes the position of medical men much more serious than that of the teachers, who have no such calls upon them. The petrol tax hits them hardly at all.

12 n.

The fact is, therefore, that the medical men accepted this cut in their remuneration without realising that they were also going to be hit with an extra petrol tax. What has been the reaction? It has made no change to their attitude. They have recognised again that they must suffer with the rest of the community. Through their representatives in this House teachers have been trying to show how impossible it is for them to make both ends meet. I think we all feel that way, whatever our station in life, when we are called upon to economise. Our first reaction is to say that it is impossible to do so. Medical men, and especially panel practitioners, are living on a very narrow margin, and these extra burdens constitute a very serious difficulty and impediment to them in carrying out their professional work. We all know something of the ordinary private life of the medical man. The panel doctor lives on a very small margin, bringing up his boy in the hope, often, that he will succeed him in the profession, and giving that boy and the rest of the family the education that is necessary. The doctor's family do not lead an extravagant life, and their household expenses are cut fine, just as are the expenses of teachers and other members of the community, and, therefore, a sudden cut like this is a very serious one. It is very serious from the public point of view, because we all recognise that the ordinary doctor lives for his profession in a way that is hardly true of any other class. He has the responsibility of life and death upon him night and day. Doctors live so much with their profession that they have little time to think about the little amenities of life. In most cases their heart and soul are in their profession.

Therefore, this cut is a very serious one, and I feel we must all recognise that their example in accepting it has been one of very great value to the community. The example is all the more pertinent inasmuch as they feel that they would be just as much entitled to say with the teachers that this is a wicked or a scandalous cut; but they recognise the necessity of meeting the emergency. They live with emergencies. At any time a medical man may be called upon to deal with an emergency—an emergency of life or death. They recognise that an emergency is no time for saying "You ought to have done more and we ought to be called upon to do less." When the emergency arises, whatever steps are necessary to deal with it must be taken. Recognising that the nation is in an emergency, they accept the cut, and they accept it without prejudice, and I hope that will be a useful example for us and for the country generally.

There is this further thing to be said of the doctors, that their position is not on all fours with that of the teachers or other direct servants of the State, because panel practitioners are not whole time employees of the State. Every employer has a direct responsibility for the whole remuneration of his employér. In the case of panel practitioners the State merely asks them to come in and do the work. They have a right to refuse. If the medical profession, including panel practitioners, were to strike the nation would be absolutely on its knees. But the very nature of their work prevents medical men from doing so. They have come forward to make their contribution, which is a voluntary contribution from people who are not whole-time employés of the State, and from that point of view I think it is all the more useful as an illustration of public and national service. I have not the least doubt that the chemists take the same patriotic line, and it is an intelligent line. I hope the insurance service will not suffer by these proposals, and I am sure that the panel practitioners will not allow the service to suffer if they can possiby help it. I hope the same attitude will he adopted by the teachers and others in regard to whom similar proposals have been made.


I wish to oppose this Resolution. With regard to what has been said by the hon. and gallant Memfor St. Albans (Lieut.-Colonel Fremantle), I would like to say that I do not think that the panel doctors are any more willing to accept the proposals of the Government in respect of their salaries than any other section of the community. When a general election takes place, the doctors will be just as ready to maintain themselves in a position of privileged comfort and luxury as any other section of the community. I would like to see a ballot taken of the views of the medical men on this question, and I am quite certain that, such a ballot would show that they would be just as indignant in regard to the imposts which it is now proposed to place upon them as any other section of the community.

Lieut.-Colonel FREMANTLE

I will bet you five "bob" you are wrong.


I never made a bet in my life, but I am quite willing to accept that bet, although it will be simply taking the hon. Member's money because there will be no chance of him winning.

The DEPUTY-CHAIRMAN (Captain Bourne)

I think these private transactions had better he arranged outside.


I am dealing with the proposals of the Government with regard to unemployment. The former Financial Secretary to the Treasury told the Committee that prominent economists had said that there might be an increase of between 300,000 and 400,000 in the number of unemployed on account of these proposals. One of the things that have surprised me in connection with these proposals is that so little attention is being given to the fact that the Government are budgeting on a basis of a large increase in the number of unemployed. On this point the financial memorandum states, on page 11, that, On the basis of the continued payment of Benefit (including Transitional Benefit) at the rates and on the conditions at present in force, and with an average line register of 3,000,000. The live register to-day is 2,800,000, and therefore the Government are proceeding on the basis of an average live register of 3,000,000. The Government are therefore estimating that there will be an increase in the number of unemployed of about 750,000. The live register to-day is 2,800,000, but at the beginning of the present year it was nearer 2,000,000. Therefore, if you take the average for last year and this year it will work out at 2,250,000.


If the hon. Member will look at the White Paper, he will find that the average of 3,000,000 relates to the financial year 1932–33.


I am taking the year 1932–33. I am sorry if the right hon. Gentleman has not followed my argument. The figures I have given show that the average this year might be 2,250,000, although next year the Government are estimating to deal with an average of 3,000,000.


That is 750,000 more than the present figures.


It would be 2,250,000 on the average. The Government are estimating that the unemployment position in this country will become worse next year to the extent of 750,000, and I am glad that I have the assent of the Ministry of Health to that statement. I hope hon. Members will realise the importance of the admission which has just been made by the Minister of Health. 'Here we are in this plight, and the Government are contemplating that, in spite of all that they can do, the industrial position in this country will he worse next year to the extent of 750,000 more unemployed.


We have taken those figures from our predecessors. [Interruption.]


I have sat here day after day and listened to the recriminations between the two front benches, and I am not going to make any apology for the people who sit on the front Opposition Bench at the present time. I hope that I shall not be interrupted in my speech by Members of the two Front Benches. The Minister says that he has taken the figure of 3,000,000 from their predecessors, but I want both sides of the House to realize the importance of that admission. Here we find the Government taking office to deal with a crisis, and they adopt the figure of 3,000,000 increase in the unemployed next year without any examination, and when they take those figures into consideration they are so little impressed by them that there is nothing in their programme for the future which is going to do anything to relieve the country from an intolerable situation. How in the name of common sense are people outside this country, who are so concerned at the way in which things are developing in this country, going to have any assurance from the handling of the situation by the present Government, if they deal with 750,000 unemployed in this light and haphazard manner? It is our responsibility, as Members of the House of Commons, to insist that something shall be done to try to prevent this great increase in the number of people unemployed.

There are two proposals in connection with the handling of the unemployment insurance situation. There is the reduction of benefit to the people who are in receipt of benefit, and, along with that, there is the increased contribution that is being put upon the three contributors to the scheme—the State, the employers and the employed; and, in addition, there is the restriction of benefit to 26 weeks in the year. I would put this specific question to the Government. When this Order in Council is made with regard to this alteration in the provisions of the Unemployment Insurance Scheme, on what date will it begin to work?

There are people who, during their present benefit year, have obtained a certain number of weeks' benefit. Are those people going to be dealt with from the beginning of their benefit year? If that be the case, then there will be ever so many thousands of people who, whenever this Order in Council comes into operation, will be thrown in the transitional class right away. There might be a million of these people who are drawing unemployment benefit who will be thrown into the transitional class right away. If that happens, it will create an impossible situation for the local authorities, because, in every one of these cases, the local authority has to make inquiries into the means of the individual applicant, and upon the local authorities is going to be thrown the burden of dealing with a million cases in that way. What is to happen to the applicant while those inquiries are to be made? Will his benefit be continued during the period of investigation? I hope that the Minister of Labour will be able to give us some definite information on this matter. The public assistance committees, too, will not have the machinery for dealing with this tremendously increased volume of applicants, and, that being so, I hope that the Government are going to give much more serious attention to the difficulties in the way of carrying through their proposals administratively.

Again, I would ask the Committee to consider the effect upon the people who will be thrown into the transitional benefit class and will have the means test applied to them. In ever so many cases, where the father of a family—a man of, say, 55—has a period of unemployment which puts him into the transitional class, he may have three members of his family working. He and his wife at the present time are drawing 26s. a week. The three members of the family who are working may be earning about £3 a week, and the result will be that the father Will be refused unemployment benefit. That will produce, in thousands of working-class homes, intolerable conditions. It will mean that many younger members of the family will be faced with their whole income going into the home to keep the home going. They will be unable to make provision for the future for themselves. All along they have paid their proportion in respect of the maintenance of the home, but now this additional demand will be made upon them for 26s. a week, because those homes are not being carried on on a basis of so much saving by the father and the mother, but have been carried on on a very hare limit of subsistence, and each of those three members of the family will be called upon to provide about 9s. a week extra for the maintenance of the home. [Interruption.]

The hon. and gallant Member for Central Cardiff (Sir E. Bennett) interrupts me to say that my friends above the Gangway agreed with it. I do not care whether they agreed with it or not, but certainly, when I was in opposition in my own party to the administration of the late Government, I never got any assistance from the hon. and gallant Member for Central Cardiff in dealing with the representatives of the Government. [Interruption.] He interrupts me further to say that he never voted against the Government, and I say to him, more shame to him that he did not vote against the Government during that period. Again and again reference is made to what the Labour Government agreed to. That may be important or not with respect to a General Election when it takes place, but to-day we have to try to get down to the effect of these proposals. That is the important matter, and I am trying to put to the committee the very great difficulties that will arise in working out these proposals. As I have said, the Government are contemplating this tremendous increase of unemployment. Is not that increase of unemployment going to destroy confidence in the future of this country? There is no indication of steps that may be taken with any hope of success for dealing with that problem. I know that hon. Members opposite, in their minds, have their view of the remedy that is lying ahead of us after the General Election, if they are successful at the Election. I know that they have in their minds the idea that an alteration in the fiscal arrangements of this country would provide for all that. But evidently the representatives of the party opposite in the Government have no very great faith in that contingency, because they are going on with their whole scheme of financial re-adjustment on the basis that they will not be able to prevent this increase in the number of people unemployed. The second point that I sought to make is that intolerable hardship is going to be entailed on hundreds of thousands of unemployed people in this country, and there will be the greatest difficulties administratively in carrying through these proposals.

Further, I think that the Committee is entitled to get from the Minister of Labour some idea of what the means test is going to be. I know that at present the general indication is that it is to be left to the public assistance committees. If it is going to be left to the public assistance committees, does that mean that one public assistance committee may be working a comparatively generous means test and that in another part of the country the unem- ployed may be treated with ever so much greater rigour? Some representative of the Government said the necessary regulations may be made and they will be carried out by the public assistance committees. I should like to know what those regulations are going to be in connection with this means test. Will the House of Commons get an opportunity, before this Bill is put upon the Statute Book, of seeing those regulations and knowing exactly what is the treatment that is going to be meted out to the unemployed?

There is another point on which I should like to get some information as to the position of the unemployed with regard to their rights under the pensions scheme in the future. Here is the position. An applicant is transferred, when he has had his 26 weeks payments, to the public assistance committee, which applies the means test into his circumstances and decides that he is not eligible for benefit, and he is out of the Unemployment Insurance scheme. You may say he is not outside the National Health Insurance scheme, but it is only a question of time before he is outside that also. Hon. Members will remember how at the eleventh hour, before we separated for the Christmas Recess last year, all parties agreed to passing in one day the Prolongation of Insurance Act in order to protect the rights of the unemployed with regard to their claims under National Health Insurance and their pension rights and the rights of their widows in the case of decease. The proposals of the Government have definitely ruled out the continuation of the Prolongation of Insurance Act. Perhaps the Minister can tell me whether it is proposed, in making these Orders in Council, to insist on provisions being made by approved societies so that it shall be laid upon the pool of the approved societies to give the unemployed security, or are they going to be allowed simply to drift out of insurance and to lose all those rights, because of this prolonged period of unemployment, for which they have very little responsibility, their only responsibility being the small share that they have had in putting Governments upon that bench of one description or another.

I hope the Minister of Health and the Minister of Labour are going to see that it is not going to be allowed to happen that, in addition to the hard treatment that is being meted out with regard to reduced benefit and the means test, these poor unemployed people are not also going to be deprived of their rights with regard to future pensions. It would be intolerable. The new procedure is going to intensify the problem to an extraordinary extent, because it will mean so many more people being put outside Unemployment Insurance because of the application of the means test. I hope the Minister of Health will give us an assurance that he will look very carefully into the matter and take the necessary steps to prevent these people losing their pension rights. I am sure it will be little satisfaction to him, as the Minister who piloted the 1925 Pensions Act through the House of Commons, that so many people who are entitled to the benefits of that and the subsequent amending Act are going to be denied those rights because of the way in which the Unemployment Insurance scheme is to be altered by Orders in Council.

There is a third method of saving which is being adopted, and that is the operation of the Anomalies Act passed by the late Government. As one of those who opposed his own Government in the passing of that Act, I want to know if the Advisory Committee approved of the regulations that had been made by the Sinister with regard to the working of that Act. There was a great deal of discussion as to how much the saving would be. Originally the Royal Commission suggested savings of £5,500,000. I notice now that the Act is going to cost the unemployed £3,000,000, I wonder if the Minister will tell me if that was the estimate of his predecessor. [Interruption.] I am interested to know that it was the estimate of his predecessor, because we were told at the time that we should not get any estimate at all. It might be much or little. Evidently £3,000,000 of savings are contemplated in that respect.All these proposals mean a tremendous burden being put upon the unemployed. Let me take the figures in connection with the savings that are being made at the expense of the unemployed and their fellow workers. There are £3,000,000 through the operation of the Anomalies Act, £10,000,000 through the means test and £12,800,000 through the reduction of the rates of benefit. That is to say that altogether we are taking £25,800,000 from the unemployed. We are taking £5,000,000 in increased contributions from their fellow workers. There will also be the people whose incomes are taken into account in the application of the means test. They are going to have to pay more in contributions and, when the member of the household is applying for benefit, he is going to be told, "Because of what you are earning, this other person is not to get unemployment benefit." It is an additional charge that is being placed upon working class people in connection with this proposal of £5,000,000. Practically £31,000,000 is being taken from the workers of this country direct in connection with those unemployment insurance proposals. All this is being done without any mandate, without any appeal to the country and without the country having any opportunity of expressing itself.

It is all very well for the hon. Member who preceded me to come along and tell us about the patriotism of this country, the patriotism of the doctors and of other classes. That which was said to be dramatic and spectacular in connection with the Navy is taking place among all the workers of the country, they are under no delusion with regard to the meaning of the sacrifices which they are being called upon to make. It is all very well for the Prime Minister to come along and tell them that the pound would have only been worth 10s. if this had not happened, but the workers, the engineering workers for example, were in communication with their employers—


I think that the hon. Member is getting rather far away from the Resolution which is now before the Committee.


I do not want to go outside your Ruling at all. I am seeking to show that these burdens which are falling upon the working-classes through this reduction of unemployment insurance benefit are going to have their reflex in the general wage, standards of the country. I was anxious to quote from reports that were sent to us by the representatives of the engineering employers in which they show that they considered it absolutely necessary to have those reductions in unemployment benefit. I have also the document sent to us by the National Confederation of Employers' Associations. Practically everything in connection with those unemployment insurance proposals was outlined and demanded by the employers of this country. The proposals are going to have a tremendously depressing effect upon the general wage standards of this country. The National Confederation of Employers are quite frank. They say that you cannot bring down wages until you bring down unemployment benefit.


A general discussion upon wages and wage standards is not appropriate to this Resolution. The hon. Member should find some more suitable occasion.


I will not pursue that subject any further, but it must be obvious to Members of the Committee that, with all the talk about equality of sacrifice, there is nothing like equality of sacrifice, and that the unemployed, because of their defenceless position, are being called upon to suffer far greater hardships than any other class in the country. If those proposals were going to give us hope for the future, then it might have been possible for the unemployed to have agreed with the Prime Minister to tighten their belts. It might not mean very much to an individual. I could tighten my belt. It might be good for some of us. It might be good for the Prime Minister. I wondered how any person in receipt of a large income could talk in that way about the men who have made the sacrifices in the past. Many of the unemployed who are being called upon to make these sacrifices are unemployed to-day because of their loyalty to the working-class movement and to the Prime Minister, who now comes along as the head of this Government and asks these people, who have fought with him and have sacrificed for him, to make these further sacrifices.

If the sacrifices were going to give any real hope of meeting the situation, there might be a case for them, no Member in this Committee believes that the economy proposals and financial proposals in the Budget are really meeting the difficulty or coming face to face with it. I wondered, in connection with the whole of this crisis, how it was that those outside financial interests were so tremendously interested in the saving of £12,000,000 on the unemployed in this country. They ought to be interested in something altogether different; in our being able to meet our liabilities in connection with our transactions entered into with them. If we distribute benefit so that the unemployed get a certain measure of maintenance, it is something which is internal in our arrangements, but it has nothing to do with our general position. No one in this Committee believes, no one is so silly as to believe, that these proposals are really getting face to face with our problems.


But the Prime Minister. He is the exception.


My hon. Friend the Member for Gorbals (Mr. Buchanan) suggests that the Prime Minister is the only exception, and I am quite willing to allow for the exception. I hope that the Members of the Committee, in a wave of patriotic frenzy or hysteria, are not going to accept these cuts without going into the merits of the case and considering all the facts for themselves. We have a Government that came in to bridge a gap, but it is no good simply to accept what they are proposing to us without thorough examination. The Minister of Health has told us to-day that they are taking over so much from their predecessors without bothering to consider whether these cuts are justified or not. I hape that we are going to have a real examination of the position by each Member on both sides of the Committee. It is an intolerable disgrace to the House of Gun-lions that we should be asked to put these additional burdens upon the poorer classes of the community. Visualise what it means to these people who year after year during this period of depression have been bearing great hardship. These people have seen their households gradually going, they have seen goods gathered together in more fortunate years gradually going, and they have seen their homes getting reduced to most miserable conditions. Yet in this period we are asking these people to bear even much greater hardships. Do not let us do it. I hope that the Government will realise that there are other ways in which they can deal with this matter than by putting the burden upon the unemployed men and women of this country. It is little enough that these people are getting, and I hope that we shall not agree collectively to do in regard to them what we should reject individually. I hope that reconsideration will be given to the case of the unemployed and that, in view of the tremendous hardships they have passed through, and through which they are still passing, they will not be called upon to bear any further sacrifice.


I am an Independent Member and owe no loyalty to the Prime Minister or either of the Parties supporting him. I have taken my seat behind the Government, because I believe that we have to deal with the economic and a political situation as it now is and not as it might have been if wiser counsels had prevailed three months ago, or even three weeks ago. The Government's policy, even if a second rate policy in itself, may be better, when the public are in a state of panic and subject to hysteria, than the chaos which might result if the people were allowed to believe that there was no strong hand upon the helm. In that belief I supported the Second Reading of this Bill and I supported most of the Budget Resolutions which have been placed before us, but a time comes when a Member of Parliament has to ask himself or herself how far it is right to go on supporting in detail a Measure which she believes to be undesirable not only in itself but even in respect of the particular policy of which it forms a part.

I have listened very closely to the whole of the discussion on the Second Reading of the Bill and on the Budget Resolutions with growing uneasiness and doubt as to whether some of the proposals in the Bill are likely to further even the Government's own policy. I will confine myself to two points. I will deal first with the unemployment part of the proposals. I am not opposed to the whole of the unemployment proposals. The time has come when the Unemployment Insurance system must be put upon an insurance basis. There is a real need both for an increase in the contributions and a tightening up of the conditions of transitional benefit. In regard to the rates of unemployment pay so far as they affect juveniles, I think there is something to be said for the cut because the juvenile usually forms part of another household and has supplementary resources to fall back upon. There is a special danger in the case of juveniles in any policy which stands in the way of an incentive to do one's utmost to find work.

But when it comes to cutting down the rate of benefit to unemployed adult men and women, I come to a dead stop. The Opposition in that respect have, I admit, cut the ground from beneath their own feet. It is true, as the Prime Minister stated, even allowing for the unsatisfactoriness of the Ministry of Labour's index figure, that the cost of living has fallen 11½ points, and it is only proposed to cut the benefit by 10 per cent. We have to ask ourselves, what will be the broad general effect of this cut. I think it is a thoroughly bad form of economy in three respects. In the first place, let us look upon the matter as a good stock breeder, an intelligent farmer or an intelligent manufacturer looks upon it. Can it be good tactics to lower, even in a time of exceptional pressure, the standard of life of the unemployed workers to such an extent as will lower their vitality and stamina? No good stock breeder if lie had to cut down expenses would cut clown the fodder given to his stock to such an extent as to lower their vitality.

Very interesting figures were published not long ago in connection with a survey of the conditions of the whole of the working class people of Liverpool, under the auspices of the University of Liverpool. The survey includes some figures bearing upon the relations of unemployment pay and the minimum standard of physical human needs. The survey takes these needs as reckoned in the extremely conservative estimate usually adopted by all sociological investigators for the past 14 years, and originally worked out by Dr. A. L. Bowley and Mr. Seebohm Rowntree. Taking that excessively low calculation of the very smallest sum on which it is possible for a family to live and maintain itself in decent health, and on the unreal assumption that not one penny is spent on anything but sheer physical needs, we find that the rate of unemployment pay two years ago, when the late Government came into office, for a man and his wife and three children was 5s. 7d. below the minimum subsistence level. If the man had five dependent children the unemployment pay was 10s. 2d. below the minimum subsistence level. Even if you diminish these deficits by one and a half per cent., it leaves the family to live far below the poverty level.

When it is pointed out as I have frequently heard it pointed out that even in the depressed areas you find crowded cinemas, this merely shows that man cannot live by bread alone, and that people living in periods of great depression think it necessary to spend part of their means on other than physical needs. Therefore when we have to consider estimates of living needs, we have to allow for the fact that when people are driven to semi-starvation, they will spend part of their means on amenities and luxuries, and thus further deplete the amount available for necessaries. My first objection to the cut in unemployment pay is then that it does mean a great deal of deterioration in the physique of the people. We have to remember also that those reserves of savings, furniture and so on, and assistance from other members of the family, on which the unemployed have been depending during the last 10 years are gradually becoming exhausted, and they are being thrown more and more upon their own unsupplemented resources.

My second objection to the cut is that, inevitably, it increases the number of unemployed. If by cutting the benefit of ten unemployed people by 10 per cent. you throw one man out of work, because the consuming power of the public is diminished to that extent, you make the position worse. It is agreed that an increase in the number of the unemployed is bound to result from these proposals. I will not enlarge upon that, however, because it has been dealt with before. Thirdly, I think that the disaffection that will follow from this cut is likely to diminish to a very great extent any advantage that might conceivably arise from the tightening up of the conditions of benefit in other respects. If those who have done their best to find work and are genuinely unemployed find themselves driven far below the poverty level and reduced to greater stress to maintain their families, every kind of device for eluding regulations will be brought into play. No system works well when you have those subject to the system offering the most obstinate resistance to it, and making every effort to get round it. Anyone who has sat on the committees which have to decide the disputed claims for unemployment benefit knows how easy it is for the man or woman who is determined to evade the regulations to do so.

The other cut which seems to me to be particularly disastrous is the cut in teachers' salaries and on educational expenditure generally. That is a matter of special concern to a university representative. A great deal has been said on this subject already and I will therefore merely put this point that it is not only a question of the 15 per cent. cut, though that is completely out of proportion to the sacrifices imposed on almost every other class. It would be interesting to hear the Government's justification for subjecting a teacher, say of 22 years of age, who has passed the university course to a cut of 15 per cent. on his salary of £3 or £3 10s. a week when a policeman getting about the same amount as the university graduate is to have a cut of only 5s. a week.


I must point out to the hon. Lady that the cuts on the police and teachers do not arise on this Resolution.


I am anxious to keep within the Resolution but I notice that the hon. and gallant Member for St. Albans (Lieut.-Colonel Fremantle) devoted the whole of his speech to the cut on the doctors. Will you kindly explain why the hon. and gallant Member was permitted to discuss the cut on the doctors and why I am not allowed to add a few additional words, as one of my points, in connection with the cut on teachers' salaries?


If the hon. Member will read paragraph (a) of the Resolution she will see that it is: for altering the respective proportions in which expenditure in respect of any of the services specified in the said Act is to be defrayed out of any fund established by the enactments relating to any of the said services and out of moneys provided by Parliament"; The case of the doctors is dealt with under the National Health Insurance Fund, which is a fund established by Statute. In the case of the teachers, there is no fund established by Statute, and, therefore, whatever cuts may or may not be made in their salaries cannot arise on this Resolution.


May I point out that the hon. and gallant Member for St. Albans (Lieut.-Colonel Fremantle) contrasted very vividly the patriotism of the doctors who gave their consent before they knew what they were to be asked to consent to, and the teachers, who said that they would rather like to know all about it before they gave their consent. Surely a reply to that comparison, which was allowed by the Chairman, would be in order?


If the hon. Member confines her statement to the fact that the teachers were equally as patriotic as the doctors she would be in order, but she cannot go into the question of the cut on teachers' salaries, because it is not dealt with by the Resolution.



In that case I shall have to deal with that question on another occasion. As an independent Member, anxious in every respect to support this Government in restoring public confidence if there is any public confidence left, I nevertheless feel that it is impossible to go on supporting this Bill unless we are shown not only that the amount of economies effected is necessary in order to balance our Budget and restore financial credit, but also that this is the best way of doing it. I think you would rule me out of order if I attempted to enlarge upon any alternative proposals to those contained in the Economy Bill, but it is impossible for anyone who believes, as I do, that the crisis is real and urgent, that we have to balance our Budget, whether other countries do so or not, to conscientiously defend our refusal to support the whole of the proposals of this Bill unless we are allowed to indicate how we should propose otherwise to meet the situation. Without enlarging upon the subject at all, I will merely ask the representative of the Government to explain specifically why they have thought it better to cut the unemployment pay and the salaries of servants of the Crown rather than increase taxation on higher incomes—


I could not allow the Minister to answer the lion. Member's question on this occasion.


—or tax one of the most widely spread luxuries, and most prolific in its yield—the nation's sugar and sweets Bill.


I have listened with great interest to the speech of the hon. Member for the English Universities (Miss Rathbone), who is strongly opposed to the cut in unemployment benefit. Actions speak louder than words, and I am wondering in which Lobby we shall find the hon. Lady to-day. After her speech we are bound to find the hon. Lady in the Lobby against the Government, and I shall look for her there. Moreover, she may be voicing the opinion of a good many other hon. Members on that side of the Committee who are strongly opposed to the cut in unemployment benefit, and I am also wondering whether we shall find them in opposition to this national government on the matter of this cut in unemployment pay. The hon. Member is under the delusion, which is also a delusion of the Government and which accounts for their policy, that the Unemployment Insurance Fund should be put upon an insurance basis. In that matter the Government are making a mistake and the hon. Lady is wrong as well.

With our old-fashioned ideas of a fund we believe that income should be sufficient to meet expenditure, otherwise the fund cannot continue, but that standard cannot be Applied to the Unemployment Insurance Fund. It has got far beyond that stage. It cannot be treated as an ordinary fund; it must be treated on quite a different basis. That is one of the big mistakes which the Government are making. They believe that they can put this Fund on an insurance basis. I am strongly opposed to the whole of the proposals of the Government in this matter. There is no statesmanship in their proposals; in fact, there is no statesmanship in their Budget. It could have been produced by an office boy. Apparently the Government forgets the vast amount of poverty which already exists in many of the distressed areas. Those proposals will simply make that distress worse.

In June I put a question to the Secretary for Mines. I asked him how many collieries have been closed in the County of Durham during the last seven years. His answer was that from 1924 to the 1st of June 1931, 73 pits were closed in Durham, and that this year alone 19 collieries have been closed up to 1st June. In County Durham we have a huge mass of unemployment and it is getting worse and worse. Many pits are partially closed. For ten years unemployment has been getting worse and worse and worse. The poverty to-day is immensely worse than it was three years ago. When the Lord Mayor's Fund was started. Three years ago a certain distinguished personage went up to Durham to look into the poverty in the mining districts. In one mining district he said "Surely this is the bed-rock of poverty." We were in a better position three years ago than we are to-day. Yet with this dire poverty in our midst the Government. come along, and instead of doing anything to relieve the distress they make it worse. I wish that the Prime Minister were here. He is sticking to his seat in the County of Durham. I would like him to go up to the County of Durham and attempt to justify these cuts in unemployment benefit. The one thing he will not do is that.

I am opposed to all the proposals of the Government for dealing with this matter. I am opposed to the increased contribution. As has been said, we have a large amount of temporary employment in the North. We have collieries working three and four days a week. There are no fewer than 40,000 men in the County of Durham who are earning only 6s. 6½d per day. They are therefore earning less than 30s. a week, and from that there are already large deductions which they cannot escape. Then the Government say to these men, "We shall increase your contribution to the Unemployment Fund by 3d. a week." To Members of this House that may be a mere trifle, but to a man who is earning only 6s.6½d.a day for three or four days in a week it is real hardship. Instead of increasing the contribution of the workman by 3d. a week it would have been a far better policy to have increased the income limit of those who contribute to the Unemployment Insurance Fund. The present limit is £250 a year. By this means it would be possible to bring in a huge class of people who escape now and whose contributions would represent much more than the extra 3d. that it is proposed to take from the workman. I am also opposed to the decreased benefit. A man and his wife have been receiving 17s. and 9s. respectively a week. Often they have to pay excessive rents. The Government propose to decrease the benefit of the man and wife by 2s. 9d. a week.

The MINISTER of LABOUR (Sir Henry Betterton)

Do I understand the hon. Member's proposal to be that the limit of £250 a year should be raised?


Yes. The intention of the Government is to get more revenue for the Fund, and instead of getting it by increasing the contribution of the worker they should raise the £250 limit and bring in large sections of workers who do not contribute now. Lawyers have their union and could well afford to pay. It would not be a hardship to ask them to contribute to the Unemployment Insurance Fund. The same thing applies to medical men. If the Government raised the limit of £250 they would get far more revenue for the Fund than by increasing the contributions. The workman is to pay an extra 3d. and the employer an extra 2d. But all of that 5d. really comes from the workman.

To decrease the benefit payable to a man and his wife is a brutal action which could only be expected from one of the most reactionary Governments that could be imagined. Benefits should at least stay as they are. The May Committee took the case of a man and his wife and two children, and assessed their income at 30s. That is as low a sum as we ought to ask them to live upon, and at least it ought to stand. We believe that instead of decreasing the benefit, if it has to be altered, it ought to be increased. But we have always stood for the right to work. We believe that men are entitled to have work and that if they cannot get work they ought to be maintained. But in the North of England the men cannot get work; there is no hope of their getting it. We have some 60,000 fewer men employed in Durham to-day than in 1924. These men are unemployed, not because of their own fault, but because of the poverty of private enterprise, and as long as they cannot get work they are entitled to maintenance and it is the duty of the State to see that they are maintained. Therefore we oppose as strongly as possible any decrease in benefit.

I oppose most strongly the proposal for the reduction of the period to 26 weeks and for the removal of men after 26 weeks, to the public assistance committees in order that a needs test may be applied to them. There could not be a worse action on the part of any Government. A period of 26 weeks or six months—why, it is over, one might say, before one can turn round. A man will come on to the Fund and when six months has passed he will have to go to the public assistance committee. The Government. may say that men are only to go to the public assistance committees in order that the amount which they are to receive may be assessed and that they will draw their benefit from the Employment Exchange. That may be the object of the Government to-day, but the ultimate object of the Government is to force these men to the public assistance committees. The needs test will be applied and they may be paid to-day from the Employment Exchange, but to-morrow they will be denied benefit at the Employment Exchange and forced on to the Poor Law. The cost of all these thousands of men is going to fall eventually on the Poor Law.

The Minister of Labour was Parliamentary Secretary to the Ministry when the 1927 Act was passed and he knows that that Act was responsible for a great increase of expenditure on the Unemployment Insurance Fund. I ask him whether, instead of decreasing benefits, instead of turning +he transitional benefit man off the Fund to go on to the public assistance committee, it. would not have been wiser for the Government to have turned their attention to a decrease of expenditure on the machinery of the Fund. The machinery of the Fund costs £5,000,000 a year. That is a huge expenditure and cannot be justified, but while we are spending that amount on the machinery of the Fund, we are going to rob the unemployed man in order that that machinery may be maintained. The Minister ought to consider too whether the time has not come for stopping sideshows in connection with the Fund such as training and transference. He ought seriously to consider stripping the Fund of all expenditure except that which is given to the unemployed. The 1927 Act increased the cost of the courts of referees fourfold. I suggest that there will not be so many cases now going to the courts of referees, since many of these men will be going to the public assistance committees. Have the Government decided what they are going to do with the machinery of the courts of referees? Are they going to scrap it, or are they going to increase its cost? Personally, I think that in the present condition of things, when we are asking an unemployed man and his wife to submit to a reduction of 2s. 9d. a week, nobody can justify a continuance of the payment of 2½ guineas per day to the chairman of a court of referees.


Per sitting.


These chairmen of courts of referees being legal men are generally out of sympathy with the unemployed and anxious to find some point upon which they can disqualify the unemployed applicant. Before proceeding to reduce benefit, the Government ought to turn their attention to these chairmen. The same remark applies to the umpires' courts. The 1927 Act, for which the present Minister was partly responsible, increased the cost of the umpires' courts fourfold. We have umpires and deputy umpires, and God alone knows what they cost. Has the Minister made any calculations regarding these courts? There will not be so many cases going to the umpires' courts when the public assistance committees are to decide cases. What has the Minister decided to do in that connection? Is he going to decrease the expense of these courts or dispense with them altogether, which in my opinion would not be a bad thing? There are at least 100 officials connected with the Unemployment Insurance Fund who are drawing over £1,000 a year each. What is the Minister going to do with them? The Permanent Secretary costs £3,000 a year, and his deputy is drawing £2,200 a year. Before attempting to cut the benefit the Government ought to turn their attention to these officials. I hope that the Minister is going to tell us to-day by how much the Government propose to cut these officials, because these huge official salaries ought to be dealt with before there is any cut in benefit.

There is another matter. One is in a difficulty to know what is to become of the debt on the Fund when the Government refuse any further borrowing powers. The Government propose to pay from the Treasury the necessary amount in order to keep the Fund going. What is the intention of the Government with regard to the present debt on the fund? Are we to understand that they propose to wipe off that debt completely and to start the fund on an altogether new basis? There has been charged against the debt on the Unemployment Insurance Fund 5 per cent., and in my opinion that was an excessive amount of interest to charge. People have money invested in the Post Office for which they are receiving 2½ per cent., and the Government have lent this money to the Unemployment Fund and charged 5 per cent. interest for it.


I am speaking from memory, but I do not think there has been a flat rate of 5 per cent. I think it depends on the Bank rates for the time being.


It may not be a flat rate of 5 per cent., but it runs round about that figure. In my opinion, if the Government are not going to abolish the debt, which I think they should do, after all the noise that has been made on the benches opposite about the Fund, and about the debt on it destroying the pound, they should tell us whether they are not going to take the course of decreasing the amount of interest charged on the debt. I apologise for having spoken for so long, but this topic lies very close to one's heart. I come from a county that is really a distressed mining area, and all my colleagues and myself are of the opinion that, no matter what happens, we must fight for the unemployed and oppose the proposals of the Government. I hope that before these cuts come into force the Government will be defeated, and that we shall have an opportunity of putting the matter before the electors.


In the Committee there is very strong disagreement and even stronger feeling about the proposals now before us, and about the policy which they are intended to carry out. May I say that we all respect the hon. Members opposite, with whom I have long been associated. [Interruption.] I do not include the hon. Member for Rotherhithe (Mr. Ben Smith), whom I have never found of any assistance in our discussions, and I would like him to withdraw to his usual place rather than to disturb me in my remarks. I am very anxious to be as short as possible, and however strongly we may disagree about matters, I hope that between both sides of the House there will be the recognition that we are moved in our several judgments by the best information that we have been able to obtain. We disagree about things, but we desire to do our best in the present emergency, an emergency which the Leader of the Opposition was one of the first to announce in this House. The country is entitled to be assured that the policy of the Opposition, as announced by its Leader, is not going to be denied and controverted by hon. Members in this House whom he is supposed to lead.

Having said that, I want, quite briefly—this is not the opportunity to say all that I would desire to say—to make some general observations on the position. First, as to the very interesting speech to which we have listened from the hon. Member for Spennymoor (Mr. Batey). The whole Committee knows the long service of the hon. Member to the great and distressed industry that he represents. I have never wavered in the view that there is no industrial interest in this country which has been more hardly treated than the miners, and while my hon. Friends and I may disagree about some recent actions of the Government, I want to assure the hon. Member for Spennymoor and his fellow representatives that my interest has not diminished in the slightest degree.

I am sorry to see that the Minister of Labour has left his place, though I quite understand why, but I want to emphasise a number of the considerations which were made by my hon. Friend the Member for Camlachie (Mr. Stephen). Whatever the causes of this position, whatever necessity can be alleged to support it, the results cannot be denied. As the hon.

Member said, and as anybody with practical familiarity with the hardships of the unemployed will agree, these cuts are going to impose terrible hardships. The consequences which he has set forth will undoubtedly follow, and I wanted to beg the Minister of Labour, in the administration of the changed circumstances, to pay the closest possible attention to the hardships which undoubtedly must come in the administration of the new scales.

I think the hon. Member for Spennymoor was perfectly justified in the observations which he made as to whether economies could not be found in other directions in the administration of the fund. I think he is a little hard, and in some cases unjust, on some of the chairmen of courts of referees. I know the objection he feels to lawyers, and I also know, from a long familiarity with the system, that there are chairmen of referees whose position astonishes me. The hon. Member on the Front Bench opposite will recollect communications that I have made to him as to the ill-choice, as I thought, of certain persons to carry out these duties. But it would be very unjust to attribute to this class of public servants deficiencies which can only be traced to particular members of the class, and I think the Committee ought to recognise that these chairmen of referees are doing very heavy, responsible, and burdensome work at a small remuneration. [HON. MEMBERS: "No!"] I say without hesitation that to ask a trained lawyer to sit for several hours, weighing, say, 30 cases—I am now quoting actual experiences which have been put to me by chairman of referees—for a remuneration of 2½ guineas a day is not excessive. If you take any other profession in which special training is required—


The average chairman of a court of referees does four sittings per week, for which he receives 2½ guineas per sitting, which is 10 guineas in all. He has no expenditure, no office—his 10 guineas is completely free to him—and in addition travelling allowances and subsistence payments. In an ordinary way it is 10 guineas clear, and I ask whether, in the medical profession or any other profession, there is anybody who will get 10 guineas for au average of 12 hours per week. I doubt it, and I think we should draw the line at that.


I know my hon. Friend has followed this question very closely, and so have I. I merely repeat—I am expressing my own view—that to ask trained lawyers to sit for several hours, investigating 30 cases—I am talking about the London area, where chairmen have reported these circumstances to me—and to pay them 2½ guineas for that, responsible work, is not excessive. [Interruption.] I am sorry that the right hon. Lady who was in charge of this Department is not here. We ought to have the advantage of her assistance. I think that there might be a review of the arrangements for carrying out unemployment insurance, to see whether economies cannot he effected, and especially there should be a review of the chairmen of referees, so that we may be satisfied that they do not go to their work with a bias which renders them unfit for their office.

I come back to my main point. Some of my hon. Friends opposite are not exactly fair in this discussion. [Interruption.] This Administration happens to be the Government of the country by the leave, as I venture to say, of the overwhelming masses of the people. Further, I am satisfied that it is the only available Administration for this emergency. I know that here I reach a matter about which there is strong disagreement.

Notice taken that 40 Members were not present; Committee counted, and, 40 Members being present


I am sorry to have troubled so many Members of the House at this hour when they are engaged elsewhere in this building, but I am astonished to find that hon. Members opposite, who profess to represent the working class, should immediately run away when these matters are under discussion. I was saying that the present Government were the only available Government in the emergency. This is the first opportunity I have had in this House to say that I should have supported any Government which came to the country's assistance at the time when this Government assumed office. I was satisfied that certain assurances had to be given with regard to the business of the country, and that the only Administration which could give those assurances was the Administration which we now have.


To whom did the Government of the day have to give the assurances?


The assurances had to he given to a personage who is not usually brought into discussion in this House.


I must ask the hon. and learned Member to keep to the Resolution.


With great respect, is this not quite relevent to the discussion? Is it not a fact that the hon. and learned Member is at the moment discussing unemployment benefit, and as this was one of the points on which this mysterious personage had to be given assurances, is it not perfectly in order to discuss it?


I was waiting for the hon. and learned Member to come to the point.


I should like your guidance, Captain Bourne. I understood that we were discussing a Money Resolution which was intended to enable a policy to be carried out. Am I not in order in making an observation on the Administration responsible for that policy?


I do not know whether the hon. and learned Member was here earlier in the sitting when I had to rule that certain Government Proposals did not rise under this Resolution, but the others did, and, although I have allowed the hon. and learned Member to make the general observation that he supports the Government, I must ask him to deal with what this Resolution does.


I appreciated, from your previous Ruling, that it would not be competent to discuss all the Government economies, but I did desire to make a general observation. If this is not, the right occasion, I content myself with leaving it as I stated it just now. I will turn to a final word on this question of unemployment insurance. I do not think anybody in this Committee will question my sincerity in these matters. I believe that this financial provision is necessary in the national situation. I have pointed out that its administration will involve very great hardship, and I venture to ask the responsible Minister to see that in that administration that hardship shall be curtailed as much as possible. Finally, I want to say that I have listened with great astonishment to the statement by hon. Members opposite to the effect that they are representing the great mass of unemployed workers. I beg leave to question that statement. I say that deliberately, because I have had the opportunity of meeting bodies of unemployed, and they look at the matter in this way. If the unemployed men and women at this moment believe that the country's necessities involve a cut in their allowances, in the main they are ready to support it.


What authority have you for that?


I say it from my own experience. I doubt very much whether hon. Members opposite when they make declarations to the contrary have any authority for them. That is a matter of opinion, however, which cannot be decided except hereafter. In my belief, every interest in the land which is effected by these proposals will cheerfully support them because of the national necessity, and among those interests the unemployed men and women are to be counted. The question is asked why this particular class has been pointed to. The circumstances must be fresh in the mind of every hon. Member. This Fund accumulated a debt of £100,000,000. I am sorry that the right hon. Lady who was in charge of this Fund in the last Government is not present, because I want to say that this deficit has accumulated as a result of her administration and the refusal of the last Government to listen to repeated warnings addressed to them, not only from the then Opposition benches, but from my hon. Friends who support the present Opposition. It was common knowledge that the Unemployment Fund could not remain in its present condition. No one suggests that the Fund can be put on an insurable basis. The whole matter is now to be reviewed, the financial arrangements are to be adjusted, and, as a consequence, the allowances to the unemployed have to be reduced. That is the simple fact of the matter. I appreciate the hardships that will be involved, and anything that can be done to mitigate the administration of the new system will receive the hearty support of all Members irrespective of party.


The hon. Member who has just spoken will forgive me if I do not follow him closely. In fact, I think that you, Captain Bourne, would forbid me doing so to a large extent. We have before us to-day one of the concrete parts of the Government's proposals for economy. The real purpose of these economy proposals can only be one thing, and that is to cut down the costs of production of the English economic system. That must be their whole purpose. There can be no other rational purpose at all. The two particular proposals which we are discussing now are of a very peculiar character when we have that general purpose in view. The first object is to put a tax of 2 ½d. on all employment. That is the effect of raising the contribution of the employers to the Employment Fund from 7 ½d. to 10d. The extra 3d. contribution from employed persons may also be regarded as a tax on employment. The first effect of these proposals must unquestionably be the opposite of the declared purpose of the general policy; they must result in an increase in costs in the general productive system. The second proposal of importance that we are discussing is that borrowing should cease for the Unemployment Fund, and that the deficiency which results from that cessation of borrowing should be made up by a deficiency grant from the Exchequer of £22,000,000 per annum. That deficiency grant involves a corresponding increase in taxation. If we hear anything from hon. Members opposite, it is that increases in taxation always involve an increase in costs. They are never tired of preaching that doctrine; so the cessation of borrowing must have the direct effect of increasing the costs of production immediately.

These two factors taken together will have as their first effect a perceptible increase in unemployment. So far I agree with the argument put forward to-day by the hon. Member for West Leicester (Mr. Pethick-Lawrence), the ex-Financial Secretary in the late Government, but I find a difficulty in supporting his remarks because he appears to me to have absolutely no alternative, or any genuine alternative to these proposals. He has told us that he is against this cessation in borrowing, that the scare of inflation is unreal, and that there are none of the usual signs of easy and excessive credit which are the well-known marks of inflation; therefore, that we are not inflating, and that there is no need to cease this borrowing. It is quite true that we are not inflating at the moment, but it is equally true that if the Government's proposals for economy or a tariff proposal or some other remedy were applied, we should soon find ourselves inflating. As a matter of fact we shall find ourselves inflating anyhow, whether these proposals are brought in or not. For the Front Opposition Bench to pretend that we can avoid these Government proposals and that they are unnecessary, and at the same time that inflation can also be avoided, is completely unreal. No more untenable position could be taken up. What is much more probable is that in this event, the exigencies of British capitalism will make the country suffer both these economy cuts and subsequently inflation, and probably tariffs on top of that. That is the real situation; but for the Front Opposition Bench to maintain the attitude that none of these things are necessary when, in fact, probably all three will eventuate, is even more unreal than the policy of the Government.

What is the rational basis of the economy proposals of the Government which seem, as the ex-Financial Secretary suggested, to be very irrational even from the point of view of trying to save British capitalism, because they do appear in the first instance to worsen the problem by increasing unemployment? Surely the real inwardness of these proposals is that they will increase unemployment, and that that in a sense is their object, because by increasing unemployment, and at the same time reducing Unemployment Benefit, puts just that pressure on the wage rates of the country which is the necessity of British capitalism if it is to bring its wage rates down. Therefore, a deliberate increase in unemployment is, as a matter of fact, part of the necessary policy of the Government.


I do not think that the hon. Member was in the Chamber when I ruled that on this Resolution we cannot go into the whole policy of the Government or its effect on wages.


I appreciate that point, and will try not to trespass beyond the bounds of Order. What I was attempting to discuss was the respective methods of continuing to borrow to pay unemployment benefit and the policy proposed in this Resolution of ceasing to borrow and making up the gap by grants. I submit that this particular item in the Government's general programme is part of their general attempt to reduce, not the expenditure of the Government, which is a comparatively small item, but the general expenditure throughout the British productive system, which is the real fact which matters and the only possible way in which that balance of trade of which they speak so much can be righted. The real point I wish to make is the complete unreality of the opposition to these proposals. A great many people are coming to the view that none of these proposals is in the least adequate to achieve its purpose and that British capital cannot save itself by this method or by any other.

I think that is becoming clearer every day, but the position of the Opposition Front Bench has been to-day, as in all these Debates, that British capital can save itself without even attempting these reductions, without inflation, without tariffs, without anything, that its position is so healthy that it really needs no efforts at all. They are far more royalist than the King! Apparently their faith and trust in British capitalism is far greater than that of the bankers, far greater than that of the present Cabinet, and they feel that only the continuance of themselves on the Treasury Bench was needed to restore it and to keep it in complete health. It is tragic that these proposals should have to be brought forward, with their crushing effect on the standard of life of the unemployed and with their undoubted effect in increasing unemployment. Let it be remembered that in increasing unemployment they will have their worst effect on the standard of life of the workers, because the volume of unemployment is quite as important an element in the standard of life of the unemployed as is the actual rates of benefit. If one member of a working class family is unemployed he receives assistance in every kind of way from the other members of the family, but if a second wage earning member of that family falls out of employment, and then a third, obviously, although the rate of unemployment benefit may remain the same, the hardship on the family will clearly be increased.

2.0 p.m.

Therefore, the proposal contained in this financial Resolution will, I believe, have a catastrophic effect on the standard of life of the workers of this country. It will penalise them, probably, more than any other of the proposals of the Government. It will penalise the people who are able to bear it least. But in spite of that we have no realistic opposition whatever from the Opposition Front Bench. We merely have this quite untenable view that these cuts are unnecessary. They are not unnecessary to capitalism. Capitalism has come to the point where it has to ask for this penalising of the workers—and there will be far more of it, too. This is only the very beginning. The only possible tenable ground would be for a challenge to the whole existence of British capitalism to come from the Opposition Front Bench, but we hear absolutely nothing of that, and that is why the opposition from the Opposition Front Bench is breaking down in the present session of Parliament.


I was surprised to hear the hon. Member telling us that we are on the brink of the existence of another party in this Parliament. I am disposed to think from certain of his remarks that his main point was that we should go on borrowing indefinitely. It is well to realise that the borrowing which has been going on for the last two years is one of the main causes of the position in which we find ourselves. After all, the State is very little different from an individual. The same principles that must guide an individual in this business must also guide the State. Failure to observe those principles leads to disaster in the one case as in the other. From the recriminations we have heard across the floor of the House during the last few days I feel that even had the late Government remained in office they would have found it necessary to deal with this aspect of the problem very much in the way the present Government have done, and to see that the expenditure on unemployment insurance was paid from current revenue and not by means of borrowing.

I have risen to deal mainly with one or two matters in the Resolution before the Committee. We must all deplore that it has been necessary to make cuts in connection with the administration of National Health Insurance. Medical men and pharmacists, by accepting the cuts which are proposed, have shown that they are prepared to undertake their share in bearing the burden which is falling upon all classes of the community. Ever since the inception of national insurance I have acted as chairman of my own county committee and when I am at home I am always in close contact with medical men and pharmacists, and I would point out that the cut in the fee to be paid to the medical men is a good deal more than 11 or 11½ per cent. It brings the capitation fee for each panel patient very nearly to the figure arrived at by agreement in January, 1913.

We must remember that medical men have to pay the whole of the expenses of conducting their practices, and I feel certain that, if hon. Members were to consult the returns which were placed before the Royal Commission on National Health Insurance, they would realise that at least 30 per cent. of the payments received by medical men represents the expenses of carrying on their practices. Therefore, the real cut is not 11½ per cent., but something in the neighbourhood of 18 or even 20 per cent. Although it has been found necessary to make this cut, I am satisfied that the bulk of the medical men of this country, and the pharmacists, will accept this reduction without any objection or complaint, and I trust it will not mean any detriment to the medical service of the country.

I notice in the White Paper which has been circulated that certain provisions are made with regard to the Exchequer grant to the National Health Insurance Central Fund. It is a matter of satisfaction to find that the Government are anxious not to do anything to weaken the provision which is made in connection with certain approved societies. We must realise that for some considerable time the approved societies have suffered a considerable reduction in their receipts owing to unemployment, and a very large number of their members are now out of insurance. It should also be borne in mind that, as a result of the trade depression, the incidence of disease among insured persons in certain areas is very much higher than it was before the depression. In the county of Glamorgan the incidence of disease has been so high that a very large number of approved societies in that county have found that their funds have been very severely tried. I hope every endeavour will be made, Whether this Government remains in office or not, to see that there is no curtailing of the national health funds of the country, because the maintenance of the health of the community is of prime importance to the future of this country.

I am certain that every Member of this House deplores as much as the Opposition the fact that the Government have found it necessary to make any reduction whatever in unemployment benefit, and I hope that, in the near future, it will be possible to avoid these reductions. I am disposed to think that a good deal more might have been done in regard to the removal of the abuses and anomalies associated with unemployment insurance. Every hon. Member knows that there are anomalies and abuses, and they are serious abuses. Only last week-end I had a lung discussion with a Member of the party opposite who was a candidate at the last General Election in an important industrial area, and we discussed case after case of abuses and anomalies which, if remedied, would affect a very large number of persons who ought not to remain any longer a charge on the Fund. I hope, if it is found necessary in the future to make any cuts in unemployment benefit, that those cuts will have some regard to other reductions, and that they will be of a temporary character. I hope that there will soon be some improvement in the industrial situation, that our national finances may improve, and that we shall be able to cease making these deductions as soon as possible.

Anyone who resides in a district where there is a large amount of unemployment must feel that there is an enormous amount of suffering, and that men who have obligations to meet with regard to rent and rates find that the amount which they receive is absolutely insufficient to maintain themselves and their families as they should be maintained. I trust that the time is not far distant when the present Government, or its successors, whoever they may be, will be able to deal with the problem of unemployment in a very different way. We all realise that we are passing through a very serious crisis, but I doubt whether the crisis through which we are passing is anything like as serious as the crisis in Germany. What is Germany doing at this very moment in regard to this problem? Already the German Government have decided to take 100,000 workless men and place them on the land, and find means of supporting them on small holdings with a view ultimately of relieving the Unemployment Fund of the charge which is now incurred by their maintenance. It may not be possible to-day for us to adopt that course, owing to the condition of the finances of the country, but I trust that, when the immediate crisis has been dealt with, the Government will be able to approach this question in a practical manner and deal with the situation. No one in this country desires to see a large number of unemployed men maintained out of work. Everyone would very much prefer that work should be found for those who are now out of work. I am certain that the resources of this country are not exhausted, and that means will be found in the direction I have indicated.


We have listened to a typically Liberal speech, in which, as usual, the Liberal proposed to give his sympathy to the workers and his support to the wreckers. The hon. Gentleman started by comparing the national finances to the finances of a and Own he proceeded to take his family feelings so far as to find much more sympathy for the doctors and pharmacists than for the unemployed. I hope that in his constituency in North Wales the people will begin to realise exactly what he means, and that, when an election takes place, despite the fact that the House has always appreciated the charm of the hon. Member, they will send here a representative of our own party in his stead.

My sympathies are with our Front Bench to-day. I find it rather difficult to ascertain exactly how they are going to oppose this Measure. I understand that we are now taking up the position that we oppose the cessation of borrowing, and that to attempt to make the unemployed a charge upon the annual revenue of the State is in present circumstances impracticable. That is a change of heart. The Chancellor of the Exchequer explained on one occasion that it was impossible, in the present state of the national finances and of industry, to increase taxation, because any increase in taxation would increase unemployment; and I regret to say that members of my own party at that moment subscribed to that point of view. [Interruption.] At least, if they did not subscribe by actually enthusiastically acclaiming it, they took no steps at all to oppose it; because it was perfectly clear, on the occasion of the last Budget, that we were leaving the Unemployment Insurance Fund outside the national revenue, and were making no provision for the balancing of the fund in the Budget itself. Indeed, the Chancellor of the Exchequer on this occasion is merely logically carrying out the policy that he has pursued for the last two years. We decided, therefore, that it was impracticable to increase taxation.

At the same time, the Minister of Labour stated in this House that in her judgment it was dishonest to borrow, so that we had closed two ways of finding money for the unemployed. On the one hand, we said we could not increase taxation, and, on the other hand, we said that it was impossible to go on borrowing, unless, of course, we intended to be dishonest—which we did not seem to find it very difficult to be, for we went on borrowing. In addition, we set our faces against an increase of contributions to the Fund, and said that it would he disastrous to increase contributions because of the effect upon industry. So we had closed up a third way of finding funds for unemployment insurance benefit. A fourth way, the way of reducing benefits, we of course, quite properly, refused to take; and so we found ourselves in a complete deadlock, from which we were not able to extricate ourselves unless we threw overboard one or other of these proposals. I say, therefore, that my sympathies are with the Front Opposition Bench in attempting to find some means of opposing the proposal of the Government to-day.

Despite that, it would be a mistake for Members on the other side of the House to regard the difficulties of our front bench as representative of the difficulties of the party as a whole. I am hoping that we shall simply say that the two years which have just gone were a fairly bad patch, and that, so far as we are concerned, we are not going to try to preserve a sort of continuity of policy at all, but are going to say, and I hope to implement it when opportunity offers, that, provided we cannot make any change in the social system, in no circumstances whatsoever, whether it involves borrowing or taxation, will we agree to make any reductions in the burden of maintaining the unemployed. Hon. Members opposite will, I am sure, understand that I am not going to base my opposition upon the policy that we have been pursuing for the last two years, because that would be quite impracticable. That, of course, is the purely Parliamentary position, and I am very glad to see that, outside, people take very little notice of the controversial difficulties into which we get in the House of Commons; and when the election takes place—[Interruption]. I am told by hon. Members that I have been asleep, but I think I have acquired more information in that condition than they have while they have been awake.

Although some of us on this side of the House must feel much happier that at last we have the opportunity of opposing policies in which we do not believe and to which for some time we have not subscribed, nevertheless, the proposal which is now before the House of Commons fills many of us with great apprehension. Some of us represent constituencies where unemployment has been acute for many years, and we know that the effect of these proposals will be to add substantially to the miseries, the suffering and the hopelessness of many of those districts. The point has been made in this House in the course of debate that this decrease in unemployment insurance benefit will simply be restoring the real value of that benefit to what it was when the Labour Government took office two years ago.

Quite apart from the fact, which has already been pointed out, that retail prices do not fall in anything like the same proportion as wholesale prices, there is this to be added, that you are now making a reduction in unemployment insurance benefit at the end, and not at the beginning, of a very long period of unemployment, and that the resources which our people possessed, both private and public, are now exhausted. There is a vast difference between the first six months of unemployment and the second, third, or fourth six months. During the first six months, the resources of the family have not become entirely exhausted, but later on everything in the family has to be renewed—clothing and the most expensive parts of the household equipment—and that has to be done out of depleted resources. In our district the reduction of unemployment insurance benefit means that we are reducing the revenue of the community at a time when the resources of the community are at their lowest ebb. So it is fantastically unreal to suggest that the reduction of the benefit figure puts the real income and the real position of the unemployed family where it was.

Some note must be taken of the effect of this reduction of benefit upon the resources of local authorities. The local authorities in most of these distressed districts have had their resources almost completely exhausted, and one of the first effects of this reduction must mean a general cut in the social services carried on by those local authorities, materially increasing the misery of those districts. I find it difficult to express myself in moderate language, because many of us for the last 10 years have had bitter personal experience of the effects of unemployment.

When I think of what these proposals would mean, reducing the standard benefit to 26 weeks, passing into the transitional benefit class all these men, applying a means test at a time when the greatest possible poverty exists putting these men into the hands of the public assistance committees, curtailing the revenues coming into the distressed areas to the lowest possible point—when I consider 3,000,000 people living in conditions like that in the coming winter, and hundreds of thousands of people living in those conditions in the mining districts, I want to try to convey to the Committee some apprehension of what that situation will be and to warn the Committee and the Ministry of Labour that, if the regulations he issues for the guidance of the public assistance committees are in any way harsh in their incidence, if he is going to apply in those regulations any Poor Law tests, if he is going to curtail the income coming into those districts substantially, in other words if he makes any serious attempt, at the expense of those areas, to save that £10,000,000, he had better look to it that there is a far better temper among the marines.

If this Committee imagines for a moment that we are going to confine ourselves to sterile Parliamentary opposition at a time when they are making use of the most ruthless class policy that this House has ever carried out, if they think that we are going to repeat the docility of 1921–1929, they really must think that all the guts have gone out of Englishmen. It is fantastic to suppose that people are going to continue in the manner suggested. What hope is there for them? What do these proposals do? They not only transfer men in much larger numbers from the standard benefit class to the transitional benefit class by reducing standard benefit to 26 weeks but at the same time, by refusing to finance any further work schemes, they make it impossible for the men to get the 30 stamps to qualify for standard benefit, and thus transfer into the transitional benefit class larger numbers of the unemployed. You are hitting these distressed districts in two ways, because they are not areas where there are alternative employments. There are no new industries opening up in Lancashire, Lanarkshire, Nottinghamshire and places like that. The new industries of England are opening up in the South and the South-east. There are none opening up in the older industrial districts, so that there are no local means afforded to the unemployed of asquiring the 30 stamps to continue to have the 26 weeks standard benefit. So that in those areas the policy of the Government is a double-barrelled one. It refuses to give any alternative employment and then punishes men for not being able to obtain it.

I should like to draw the attention of the Ministry to a small Budget point on that matter. The charge on the general fund is being increased because the Exchequer has now taken responsibility for the whole of the transitional benefit. Has any provision been made in the estimates of the Chancellor of the Exchequer for the additional transitional benefit which the Exchequer will now have to carry because it stops these works schemes? It is all very well to estimate that there will be a certain revenue saving in the Unemployment Insurance Fund from increased contributions, that standard benefit will be a certain burden and this transitional benefit will be a certain amount, but the policy of the Government will be to transfer them to the transitional benefit class, with a heavier charge on the Exchequer as such. So the right hon. Gentleman will immediately start to unbalance the Budget as soon as he starts to balance it. His own policy will accelerate the unbalancing, because all the time the transitional benefit charges will increase.

Attention has been directed to the fact that this proposal will add to the burden on industry, but there is a further point to be made. It will add to the burden of the most distressed industries in the country. It will add to the burden of the extracting industries, in which the largest man power is employed. The percentage of wages to the total capital expenditure in the extracting industries is always the highest and it is the extracting industries which are in the most distressed state. The slate quarries of North Wales, the coal mining industry and the iron ore industry are three which at the moment require the most assistance. Those are the industries whose burdens these proposals will increase, because to increase the contributions per man employed in industry when there are more men employed in proportion to the total capital expenditure than in other industries is to ask the most distressed industries to make the greatest contribution to the Fund, so that this proposal will have very burdensome results on the mining industry. This being a. Money Resolution, it is impossible to carry this argument in too detailed a manner into the administrative consequences of the proposal.

The Minister of Labour has a very objectionable task ahead of him. It is characteristic of the British ruling class that the suavest, the most urbane, the most personally acceptable Minister is always given the most unpleasant task. It is, I suppose, in the hope that the charm of his personality will relieve the shock of objections. If those people who now propose to go to the country to ask the country to respond in a patriotic manner to the appeal which is being made, accuse the party on this side of the House of class loyalties and of putting class before the country, all I can say is, could hypocrisy be carried further by a party who have no mandate at all from the country to take such a course? The last election was one of the most squandermania elections that has ever been fought in this country. The Liberal party offered lavish expenditure, the Conservative party defended lavish expenditure, and this party promised lavish expenditure, and, according to hon. Members opposite this party, have discharged their promise. This House of Commons, elected as it was on a mandate to extend the social services in every single direction—


The House always welcomes the payment of polished compliments to Ministers or other Members of the House, but the hon. Member must not make it an excuse for entering upon the general question of issues before the country at the last, or the next election.


I will try and keep within the limits of your Ruling, but, as I gather that the proposal before the Committee is a Money Resolution to restrict public expenditure, surely it is relevant to a proposal of that kind that I should point out that the House of Commons has no mandate for such a Resolution.


I think that the hon. Member quite understands what my Ruling means.


Thank you, Sir Dennis. It. is therefore proposed, almost immediately after the present policy has been forced through this House, that an appeal be made to the country on those lines to try and raise the country above class issues. We on this side of the House will accept that challenge. We will put it to the country that in the guise and cloak of patriotism they are making a war upon the poorest members of the community. We will put it to the country that at no time in the history of the British House of Commons have politics become so hypocritical. We will put it to the country that there is only one answer to the proposal now before the House and to the other proposals which the House will discuss next week. That answer is a class answer. It is not a patriotic answer at all. By undermining Parliamentary control in the way proposed you are preparing the way for that issue. As far as we are concerned, there is one thing about which we are pleased in the present crisis, and that is that the change over of this party from there to here has clearly exposed the class issue. We shall carry it through to a final conclusion, be the circumstances what they may.


I am sure that the remnants of the late Government who have had the pleasure of listening to the speech of the hon. Member for Ebbw Vale (Mr. A. Bevan) must have been very gratified at the very clear, fair, and reasonable description he gave of the impossibility of this opposition today. I hope that the hon. Member will forgive me if I do not follow him in that argument, because he so clearly demonstated to the Committee that the Front Opposition Bench had no justification whatever for opposing the Financial Resolution, that there is really nothing further to he said under that heading. There was, however, one other remark made by the hon. Member to which exception must be taken. If I may have his attention for a moment, I should like to ask him if he proposes to repeat that the policy of this Government is a most ruthless class policy. I hope that if that is the policy he desires to adopt, he will add that it is the policy of a Government at the head of which is the only Labour Prime Minister this country has ever known. That alone is sufficient comment upon the fairness of the hon. Member's remarks.


If hon. Members have not already discovered that fact, of course, we shall point it out.


I wish to refer to a subject which has been put forward by one or two hon. Members opposite. The hon. Member for Camlachie (Mr. Stephen) was the first to mention it to-day, and it has not, I think, been referred to from this side. It is the question of the needs test in the case of transitional benefit. It is time that there was a little plain speaking on that subject. Let me remind the Committee what exactly is proposed. If lion. Members will turn to Command Paper 3952, in page 10, they will find a very clear explanation of the proposal. I will read a few words which really give a summary of the proposals: Persons now drawing transitional benefits and those going on to transitional payments in future may continue to receive assistance in cash up to the same rates as under the insurance scheme if they show that they are in need of it. The unemployed workers of this country can be divided into three groups. First, there are those who are drawing benefit in respect of contributions which they themselves have made while at work assisted by contributions from the employers and the State. They are drawing benefit in respect of those contributions, part of which they have provided themselves.


All of it, not part of it.


The second class are those who belong to an insured trade who for a time have been drawing benefit in respect of contributions that they have paid but who have now drawn all the benefits that could be provided by those contributions. That is a class which comes under transitional benefit. There is a third class of which we hear very little from hon. Members, namely, the class of unemployed worker who does not belong to an insured trade and who therefore has never come into Class I and is not entitled to draw transitional benefit. So far as the first case is concerned there is no dispute. If a man contributes to an insurance scheme and it is a scheme to provide for some one who is out of work, clearly if he falls out of work and can show that he desires work, there is nothing more to be asked of him. Inquiry in regard to need does not arise. He claims not because he is in need but because of his contributions. The second class, who come under transitional benefit, are not in that position. They have had the benefit in respect of their contributions, and the fact that they now claim further benefit can only be based on one ground, that of need. In these circumstances, the Government. say that the public are entitled to be satisfied that that need in each case is real. I submit that that is a perfectly reasonable position to take up.

Let me make a comparison by way of illustration. In my Division I have unemployed workers who belong to insured trades, and unemployed workers who do not belong to insured trades. Therefore, my attention has been constantly directed to the question of the different treatment meted out to these different sets of men. Let me take the example of an agricultural labourer. Let us assume that his wages are 30s. a week. He falls out of employment, and he is not in an insured trade. If he wants relief he has to show the need for it. In the same district there are engineering works. I will take the case of a man who has been working there, in an insured trade, and who falls out of employment. First of all, that man can claim benefit. We are all agreed about that. If he cannot get employment, that benefit eventually becomes exhausted. I cannot see the justice of saying then, that that man should be put in a better position than the agricultural labourer. It is unfair, and I think that if the facts were brought sufficiently home to the great mass of the people they would agree that it is unfair.

Take the case of an insured man with a wife and three children. Let me assume that one of the children is a boy of 17, another a girl of 16 and the other a child under 16. Under the new benefit proposed by the Government, the benefit to which that man would be entitled in the first instance when he falls out of employment in an insured trade is 15s. 3d. for himself, 13s. 6d. for the wife, 2s. for the youngest child—[HON. MEMBERS: "8s. for the wife."]. I apologise to hon. Members. It is 8s. for the wife, 2s. for the youngest child, 8s. for the boy of 17 and 4s. 6d. for the girl of 16.




The boy of 17 cannot receive benefit unless he has been an insured contributor and has a certain number of stamps to his credit.


I am not counting his benefit but the benefit that the insured worker would receive on falling out of employment. [HON. MEMBERS: "Your figures are wrong.'] If I am wrong, perhaps hon. Members will correct me later. The fact remains that the amount that that insured worker receives when he falls out of employment in the first instance and draws benefit in respect of contributions is certainly a good deal more than the agricultural labourer receives while in work, yet it is proposed by those who object to the needs test for additional benefit that such a man should be entitled to continue to receive this amount, when the benefit to which he is entitled in respect of contributions has finished.


Our point is that your figures are all wrong.


The hon. Member can correct my figures later. My object is to show the contrast between these two classes, the one class that has never belonged to an insured trade and the other class that is, and has for the time been exhausting the benefit to which it is entitled. I would put two questions to hon. Members who differ from my view. First, if a man claims because he is in need, why is it unreasonable to ask him to prove that he is in need? My second question is this, why should the man whose occupation is not an insurable occupation for the purpose of unemployment benefit be put in a worse position than the man who follows an insurable employment and who has already had all the benefit to which the contribution he has paid entitle him?


Is it not the obvious thing to do to put the agricultural worker into unemployment insurance and give him the benefit, instead of reducing one class because the other class is not insured?


That may be so. There is a good deal to be said for the suggestion put forward by the hon. Member, but I would draw attention to the fact that we have had a Labour Government for two and a half years, and they have not done that. Therefore, it would appear that they do not think that that is the proper way to deal with the matter. The distinction between the man who is drawing benefit in respect of his contributions and the man who is drawing benefit in respect of his needs required to he made, and I am glad that it has been made. The Chancellor of the Exchequer told us on Tuesday that our Budgetary position is, in the main, due to the excessive cost of unemployment. Hon. Members opposite very frequently express, in varying degrees of eloquence, their sympathy with the unemployed. In doing that they are voicing the opinions of everyone not only in this House but in the country. Something more than sympathy is needed. Labour Members have sympathised with the unemployed for the last two and a half years, and their Government have expressed sympathy for the unemployed again and again, but the result of their policy has been to increase the number of the unemployed. What we want is not the amiable but ineffective sympathy of the late Government, hut a Government that will face, if need be, unpopularity, to get the country back into a position where the unemployed can have what they will value much more than an increase in unemployment benefit, and that is work.


The hon. Member was in error in quoting from the White Paper in regard to unemployment benefit, and I am sure that he will forgive me if I attempt to put his figures right. Take the case submitted by the hon. Member, that a man and a wife with a child of 17 years of age would receive more than an agricultural labourer. As a matter of fact, a man and wife with a child of 17 will receive 23s. 3d. per week under this scale. If the boy or girl of 17 years of age had been in work, and had a certain number of contributions to his or her credit, then the boy or girl would receive benefit under certain conditions.

I oppose the Resolution. I represent a constituency which has been intimately associated with the present Minister of Health. In 1922 the right hon. Gentleman and I, with members of all parties, were associated in a national committee which called itself the Parliamentary Committee for the Necessitous Areas, and our job was to point out that there were certain industrial areas, of which Dartford was one and Birmingham another, where unemployment was of such a character that in any one of these county areas there were more unemployed than in the whole of France. It is within the memory of hon. Members that Sir James Lewis, Clerk to the Birmingham Board of Guardians and Mr. Craighill, Clerk to the Gatesheacl Board of Guardians, pointed out that there were men who had been soldiers during the war, citizens before the war and after the war, who were suffering through no fault of their own and that heavy rates were being borne by employers and shopkeepers in these areas through no local fault.

3.0 p.m.

What humanity is there, what logic is there, how can anyone defend the proposal or justify it, that if a man has been out of work for 26 weeks there is any need at the end of that time for an examination to determine his needs? No one who has had any experience of a period of unemployment and the meagre rates of unemployment benefit would make such a contention. Yesterday's papers gave the information that over 600 men waited for hours for one job at 43s. per week, and any Employment Exchange manager will tell you that if there are unemployed men in Dartford or Bexley Heath, it is no use sending skilled mechanics to Willesden, where there are already thousands of engineers out of a job. If a man gets a job in another area it is a reflection on the efficiency of the Exchange manager in that area. Why penalise these men further? There are tens of thousands of men in search of 10 jobs, and it is because of that that we ask the Committee to take into serious consideration the appeal made only yesterday in the House of Lords by a former Conservative Member of this House. He said: If the only point between the Opposition and the Government is the £12,500,000 which we are going to take from the people on the 'dole,' is it worth while dividing the nation and running the risk of an Election? For my part, I would gladly see that £12,500,000 given up. £12,500,000 out of £170,000,000 is not so vital to the nation, and I only grieve very much that it ever came to be brought forward. I think it is a great mistake to rouse partisan feeling to such an extent upon a question which cannot be considered vital from a financial point of view for one moment, though on which there may be a great deal to be said from the point of view of justice. Other things have come down, and it may be said that this should come down too. All I can say is that a great deal of the feeling against the unemployed in this country is entirely unjustified. The unemployed are a very fine body of men; they are citizens who fought in the War and who, after a short time, have been without employment since. It is not a question of dealing with a few hundred thousand men who cannot and will not work. There are 3,000,000 of our people who are in this condition, and sympathy, not opprobrium, is their due. If this is all that stands between us and national unity, whatever the justice of the case may be I think it is a great mistake and a great lack of statesmanship to allow this £12,500,000 to stand between us and a united policy, which alone can save the country from disaster. That is a quotation from a former Member of this House who inherited a great tradition of international industrialism and who is well aware in his own industrial operations that on the East coast whole villages have been swept out of employment and placed on the employment exchanges for no other reason except the logical development of capitalism, which inevitably creates a position in which large numbers of wage earners are refused the opportunity of a job. Take the cement combine in the Dartford Division, one-sixth of the men employed 15 years ago are now producing 15 times as much. And that is an illustration which can be applied to almost every trade and industry. It may be true that Britain years ago was the workshop of the world, but the demand for productivity has brought about such an overwhelming advance in productivity that we have now reached a stage in which even the industrial magnates are getting alarmed at the prospects.

I know something about unemployment insurance because I am a member of a trade which first came under it. I was one of the first members of the Juvenile Advisory Committee in Hackney, long before the War, and as an engineer I was in one of the few trades selected before the War as an experiment to see whether the thing was actuarially sound and whether it should be extended to other trades. Everybody knows that the War busted the thing up completely. I could quote from the records of this House how the right, hon. Member for Epping (Mr. Churchill) defended 29s. per week benefit to boys of 18 returning from the War. They had been taught to value human life cheaply and were coming back in their hundreds and thousands with arms in their hands and bullets in their pockets, and that 29s. per week was an insurance against revolution.

I do not want to go on with that, but I speak with a certainty and a knowledge of the class to which I belong. Any man who has gone through unem- ployment, who has awakened in the morning with the knowledge that there is no job for him, who has gone through week after week of hopeless search for work, will understand that it is no exaggeration to say that many times in my own experience I would rather have been in the warmth Of a factory than "mouching about" waiting for the answer of the foreman at the gate. I re-echo the sentiments of Lord Melchett, and ask the Government to make sure that we get some kind of national unity by withdrawing the most helpless section of our population from the ambit of this scheme for "equality of sacrifice."


The right hon. Gentleman who introduced this Resolution said that there were five services concerned.


Only two.


But the right hon. Gentleman, I believe, said there were five indirectly concerned. For all practical purposes the chief service connected with it is Unemployment Insurance. It can hardly -be an unexpected thing that practically the whole of the day has been occupied with discussion of this subject. The Committee have realised that the Resolution concerns the most pitiable section of our population. I sometimes think that unemployment can scarcely he understood by those who have not been, or are not unemployed. Unemployment varies in its incidence upon the community in different parts of the country. I come from an area which is more hardly hit than most other areas. It is a fact that the great bulk of the unemployed are connected with three or four industries. I have lived in the midst of unemployment. I shall be in the centre of it at midnight to-night. Yet I sometimes wonder whether I myself understand what unemployment means to these people. I am brought up with a jerk very often when I speak to these people as to the effect of unemployment upon them personally.

Let me say a few words here about the unemployed as a whole. There is no doubt whatever that certain kinds of propaganda are doing infinite harm to the people of this country in the minds of people abroad. During the past two years I have represented the Government on several occasions at great inter-national conferences, and I have been positively shocked when I have realised how this propaganda has affected the minds of people from other countries. These people were just as surprised when I was in a position to disillusion them as to the realities of the situation. No one here dare make against the unemployed the charges that are sometimes made in the press. I sometimes wonder what fate has led me to stand here instead of being one of the unemployed myself. Yet if I may say so in this House I liked my work as a miner, although I did not like the amount of money which I was paid for it. But men like myself, in my own area, men to whom it is a positive pain to be unemployed, men of experience and of the finest character have been out of work, not only for months but for years, and one of the most lamentable things I have known in all my lifetime has been the obvious deterioration in clothing and appearance of many men whose pride has always been decency of appearance—who felt in fact that their reputation and character were involved in decency of appearance. These are the kind of people who are affected. What this Financial Resolution says, in effect, is that there is to he no more borrowing.


There never was any.


Let there be no mistake about the fact that this proposal means that the Fund has to pay its way.


It always has done so.


That is what we are coming to and that is the Conservative policy. The right hon. Gentleman the Minister of Health has made it clear on various occasions that if his party were returned to office one of the first things they would do would be to deal at once and drastically with unemployment insurance. More than that the employers of the country have not concealed the fact that they wish to deal with it from another point of view, because they have found that they cannot work their will upon wages as they would like to do. I have here a document issued in February of this year by the National Federation of Employers' Organisations, on the industrial situation, in which they state: Having regard to the high rates of benefit and the laxity of the qualifying pro- visions, it is only natural that trade unions, anxious to maintain their wage levels and knowing that their unemployed members can count on unemployment benefit more or less permanently at these high rates, are disinclined in wages negotiations to take the same account of the necessity of adjusting wages to levels at which industries can absorb their unemployed, as they had to do when there was no general State benefit and when such limited benefit as was provided for their members had to be provided by the trade unions themselves out of their own funds. The post-war disregard of unemployment in wages negotiations is the principal and direct explanation of the loss of elasticity in wage rates, and in interfering with the harsh but effective corrective of wage demands which restricted unemployment, this country must expect unemployment on a large scale from that cause alone. Under cover of a crisis something permanent is being achieved. Under cover of a crisis there is now a deliberate attempt to do certain things which those concerned have for years desired to do. In that respect the present Government are not only meeting the crisis but carrying out effectively the will of the Conservative party and its advisors in this country. We are told that this is done in the name of equality of sacrifice. I ask the Committee to mark what, this Financial Resolution does in effect. For the first time it makes the worker pay as much as the employer and the State. The worker has always paid less. It was recognised at the very inception of this fund that the worker was not in a financial position to pay the same amount as the other two parties, and so, when we are told that the employer's contribution will be increased by 2d., the State's by 2½d., and the worker's by 3d., which is 1d. more than the employer's, that is not only equality of sacrifice, but equality of sacrifice and a half.

For the first time, I say, this new principle has come into operation, and we are told that this saves £10,000,000. I have made a rough guess, and I would say that it is a fair estimate that of that amount, the worker is paying £6,000,000, but the right hon. Gentleman opposite may be able to give us some figures. That is £6,000,000 from the purchasing power of the worker. I wonder if the Committee has contemplated how much unemployment that will cause. It is £6,000,000, not from luxuries, but from necessities, £6,000,000 in boots, in clothes, in food, because, in effect, that is what we are doing if we pass this Resolution. But this is not all that the worker sacrifices in respect of this matter.

In addition to this £6,000,000, there is to be a reduction in the period of benefit; that is, he has to get 26 weeks instead of the normal standard of 30 stamps in the year, and after 26 weeks he goes on to the pauper list. I know it is called the public assistance committee, but really that is what it is. To all intents and purposes, when a man finishes his 26 weeks, he is simply going to be placed upon the pauper basis, although I know that the administration machinery of the Unemployment Insurance Fund will be used for him. It may be said that the State is accepting that, but the fact remains that he is on a pauper basis. I am not concerned with all the arguments as to what was agreed to or what was not. I have a good deal of gratitude for those who cut the painter and refused to sacrifice the unemployed and for giving us on this side an opportunity of saying what is in our hearts concerning this question, instead of being silent and consenting parties to it, but will this do what it sets out to achieve; will it help the position of industry and employment? I say that there is a good parallel to prove that it will do nothing of the kind, that in fact it will undo the very thing that it is professing to do, and that it will intensify the evil.

It is well known that in America there is no unemployment insurance or health insurance, and that there are no old age or widows' pensions. There is not even a Poor Law. It is the ideal state of a great industrial country, and yet, I think, it is a moderate estimate to say that there are 10,000,000 unemployed. There is definite proof, therefore, that this reduction in benefits will not achieve the purpose that it is said it will achieve. Will it, in the long run, do what it is professed to do in the financial sense? When this borrowing was first begun we had a balance of some £22,000,000. I think within 12 months the Government of the day had to come to the House and ask for £10,000,000 increase, and within the same year it had to come for another £10,000,000.

The hon. Member for Colchester (Mr. O. Lewis) seemed to imply, as various speakers on the other side did, that if it had not been for the Labour Government, we would not have been in the position we are in now. That show a complete ignorance of the history of the insurance problem. I am glad that we did not hesitate to come to the aid of the unemployed. I am not ashamed of that for a moment. The hon. Member opposite and some others on that side have shown a remarkable ignorance of the history of the problem. The only time that this Fund was anything near solvency was in 1924 when the Labour Government were in office When they left there was less than £5,000,000 of debt upon the Fund, but when the Labour Government came back there was a debt of £40,000,000 upon the Fund.

We know that in 1927 the Government took steps to get rid of the borrowing but they did not dare to carry out the implications of that Act. Now they are using the present situation to take something like £6,000,000 a year off the benefits, to reduce the period of benefit, and, after 26 weeks, to place people upon a direct and distinct pauper basis. We are proud of the fact that we represent the workers. [Interruption.] I, at any rate, represent a majority of the electorate in Chester-le-Street, and my hon. Friends behind me represent directly great masses of workers. I say that, let the election come soon or late, when this matter is put to the workers of the country, knowing how insecure in it they themselves are, and that they themselves may be to-morrow in the category of unemployed, there is no doubt of the answer that will be given. Whatever the situation, I say that with the evidences of wealth there are in this country, it is a shameful thing that men and women who are placed in the lamentable position that great portions of our community are in should be treated in this way. We shall have an opportunity later of dealing with this matter in more detail. The unemployed can legitimately say, in spite of the impost in the form of taxation, that when it comes to the real truth of the matter, they are making infinitely greater sacrifices than the taxpayer who has to meet new burdens dreams of. The cuts are being taken from men and women who cannot afford to spare a single penny. If the House of Commons passes resolutions of this description, they do a shameful thing and those who do it will have to answer for it in the country.


My right hon. Friend who moved this Resolution pointed out its limited scope and said that, so far as Unemployment Insurance is concerned, it is confined to two points only—first, the question of increasing contributions; and second, the question of meeting deficiencies in the Fund. It was perhaps inevitable, and I certainly do not complain about it, that much of the Debate and much of the speech of the hon. Gentleman who preceded me has had nothing to do with the Resolution itself. The question of the needs test and the administration of that test, questions as to the propriety and the justification or non-justification for cutting benefits were discussed, but these questions, and indeed much else, are irrelevant to the one thing we have to consider in this Resolution, namely, the justification for raising the contributions and for stopping borrowing. Do not let it be thought for a moment that we are not prepared to meet every criticism on these points. The charge has been made, and we are here to answer it, but the time for that will be when the definite Amendments which are already on the Paper are under discussion. Then we shall meet all the criticisms that have been made to-day on these particular points.

The hon. Gentleman who has just sat down finished by saying that he thought that the proposed increases of contributions were unjustifiable, and that the sooner the opinion of the country on that point was taken, the better. The first thing that I have to point out with regard to these increased contributions is that, whatever may be obscure with regard to what the last Government agreed to, this much is quite certain, that they did agree that in the circumstances increased contributions were inevitable. Before I go into that, I want to remind the Committee of the financial position of the Fund and what it would he if nothing were done at all. Then the Committee and the country can decide how serious the position is. The debt, as my right hon. Friend has pointed out, on the Fund as on the 18th September, is £100,730,000. The Committee will remember that just before we separated, further borrowing powers were given to the extent of £25,000,000, That was only on the 8th July. It will be seen from that how quickly this additional sum is already beginning to run out. If we were to go on with the present rates of benefit and with the present contributions it is estimated that on 1st March, 1932, the deficiency would be £130,000,000, and if we were to go on for another year, by March, 1933, the deficiency would be £190,000,000.

The hon. Member seemed to complain because we have decided that borrowing shall be stopped. Does he think that borrowing should be permitted to continue? I have reminded him that his own chief said only a few months ago that borrowing was dishonest. Does he or does he not agree that borrowing must stop? The hon. Gentleman who was Financial Secretary to the Treasury in the late Government seemed to make the same complaint. He appears to think that borrowing is justifiable. Is it necessary to remind him of the document produced by his own Department when he was Financial Secretary pointing out what the inevitable effects of borrowing would be? They said that it would call in question the stability of the British financial system and that to go on borrowing in order to relieve current State obligations at the expense of the future was the ordinary and well recognised sign of an unbalanced Budget. We already have an unbalanced Budget; the very situation which was foretold by the hon. Gentleman's own Department is upon us; and is he now complaining because we are endeavouring to correct that very evil?

The right hon. Lady who was my predecessor at the Ministry of Labour, and therefore represented the Government on this aspect of affairs, not only said that a continuation of borrowing was dishonest, she and the Government realised that borrowing must stop and that the position of the Fund and of the whole system was indefensible. The Government set up a Royal Commission with terms of reference of which I will venture to remind the Committee. They were: To inquire with regard to the unemployment insurance system, its future scope, the provisions that it should contain and the means by which it could be made solvent and self-supporting. That was the first of the terms of reference; secondly, they were to inquire into— the arrangements which should be made outside the scheme for the unemployed who are capable of and are available for work. Really, these admirable protestations of financial probity about stopping borrowing and the like are of very little use if those who make them, the moment they are brought face to face with the inevitable consequences, fail to face up to them. That is exactly what the late Government did, and it is exactly what hon. Members on the benches opposite are doing to-day. The hon. Member for Ebbw Vale (Mr. Bevan), in a speech of engaging candour, said that his own Front Bench were entitled to sympathy. Of course they are, because the very things which they told him were about to happen have come to pass, and now the contributors to the insurance fund have, unfortunately, to face the necessity of paying the price for the mess which hon. Gentlemen opposite got them into.

The Financial Secretary to the Treasury in the late Government said these further contributions from employers and employed would be a burden on industry. Of course they are, and nobody regrets them more than we do, but in the position in which things are there is no other way out. The hon. Gentleman says that he disapproves of the increased contributions because of the burden upon industry. No doubt that is one of the things which his own colleagues in the late Government took into consideration before they agreed that these further contributions should be called for. I do not dispute that these additional burdens on the Unemployment Insurance Fund are a most lamentable and unfortunate necessity, but the difficulty has arisen because hon. Members opposite did not take the advice of their own Department, and refused to face the situation when it was much less serious than it is now.

It has been stated now, for the first time, that the principle of an equal contribution has had to be recognised, but that is not so. The principle which was established by the Act of 1920, upon which our insurance legislation is based, provided for equal contributions of employers and employed. The right hon. Lady who was Minister of Labour in the last Government was a member of the Blanes-burgh Committee, and one of their recommendations was that the contributions should be equal. I think that meets the point upon which we have been criticised, that we are not putting into effect the recommendation with regard to equal contributions. I do not want to go into other questions which have been raised, because they would be irrelevant—I refer to such questions as the needs test, and the lowering of the benefit—but next week, or whenever the occasion arises, the Government will be ready to deal with those points. The hon. Member for Spennymoor (Mr. Batey) stated that these additional burdens would be unnecessary if we could cut down expenditure upon the administration of the Fund, which he pointed out involved a charge of £5,000,000 for administrative purposes.


I said for machinery.


The greater part of that sum is spent upon keeping up and running the Employment Exchanges. I remember when I was at the Ministry of Labour a point which was constantly raised was that there were not enough Exchanges and that we ought to have more, and it was said that those Exchanges were not adapted to the purposes for which they were required.


The administrative machinery for unemployment costs £5,000,000, whereas the administration of the Poor Law costs only £2,000,000.


That would seem to answer the charge very often made against us, that larger number of persons are dealt with under Unemployment Insurance than under the Poor Law. It is, however, irrelevant to my point. What I am saying is, that it has often been charged against us that we are not doing enough in regard to the Employment Exchanges and that the Exchanges ought to be put in places where they do not exist. The hon. Member also asked me a point in regard to the Court of Referees and of the fees that are paid. He asked me whether we have that point under consideration. It is not only under consideration but I hope that in a short time I shall be able to make an announcement on that question.


Are you considering the reduction on the fee of 2½ guineas to the chairman?


Yes, we are considering that. The hon. Member for Camlachie (Mr. Stephen) asked me what was the position under the Anomalies Act, which was opposed so stoutly last Session. The position is this, that under that Act a committee was to be set up. That committee has been set up and it held its first meeting on Wednesday. It will meet again, I understand, early next week. The hon. Member also asked me in regard to the regulations which that committee will make. That committee will not make regulations, but the Minister of Labour will make regulations after consultation with the committee, and those regulations will be laid on the Table of the House.


Have any regulations been made by the Ministry?


No. The hon. Member was in some confusion of thought when he said that we were not thinking clearly on this question of Unemployment Insurance, 'and he rather left, us under the impression that he had considered the matter with complete clarity. What has been the cause of much of the difficulty that we are in to-day? It has been that confusion of thought which has been so obvious in the actions of the Government during the last two years. They have, on the one hand, said that their policy was a tripartite system of contributory insurance. That statement was made by the Minister of Labour, speaking for the late Government. We understood that that was their policy. You cannot administer a system of tripartite compulsory insurance while at the same time you are paying out immense sums under the name of insurance which is, in fact, not insurance at all.

We should like to know—of course, I do not ask for the information to be given now, but we should be glad to know—whether it is the policy of the Opposition to maintain a system of contributory insurance. Many hon. Members like the hon. Member for Camlachie and the Trades Union Congress have been perfectly frank about it. They have said that they do not `believe in in- surance. While we disagree with that point of view, we can understand it and respect it for its frankness. Hon. Members who now lead the Opposition pretend that they are maintaining, or that they are prepared to support, a system of insurance when, in fact, their every act makes the continuation of that system impossible. In the situation in which we find ourselves, being committed, like our predecessors, to the stopping of borrowing, being committed, like our predecessors, to the maintenance of a contributory tripartite insurance system, and believing in both these things, this course that we are taking, with great reluctance, in asking for an increase of contribution is absolutely inevitable. If there is no increase of contributions, and if you still attempt to maintain the insurance system, of which we are proud, the only possible alternative is the most drastic reduction of benefit, because the Fund without increased contributions will not pay anything like the benefits that we desire.

Lieut.-Commander KENWORTHY

Is it now the argument that these alterations are going to balance the Fund? If not, surely you will have to borrow again.


The White Paper makes it clear that, in spite of the fact that we are making this large increase of contributions and that the benefit will be reduced, the estimated deficiency for the financial year 1932–3 is £22,200,000, so that even so it will not balance, but we hope that, when times are better, it will. In the meantime, it is the State and the Exchequer which have to make up the deficiency. The fact that there is a deficiency contemplated next year does not in the least affect the argument I am making that it is our policy, as it was the policy of the last Government, to maintain a compulsory tripartite contributory system. If, on the other hand, hon. Members opposite adopt the plan that is urged upon them by the Trades Union Congress and many of their friends, we have only to look at the evidence given by the hon. Member for West Nottingham (Mr. Hayday) before the Royal Commission to realise exactly what that would mean to the Exchequer and before anyone commits himself to the destruction of this contributory system which we have at present, let him clearly realise what the alternative is and what the result would be upon the Exchequer, and the charges that would be made upon it.

I do not propose to deal further with the points that have been raised except with the 26 weeks' limitation of benefit. That, again, as we have been told, was one of the limitations agreed to by the last Government before they went out of office, but it is something more than that. The 26 weeks' limitation was recommended not only by the May Report, but by the Royal Commission, and up to comparatively a few years ago, I think up to 1927, it was part of our insurance system. We had that 26 weeks' rule from the beginning of insurance up to 1927. That, again, is absolutely essential if you are to retain this system of contributory compulsory insurance. I have no hesitation at all in justifying that as a fair and proper limitation of the amount of benefit that can be drawn in any one year. I do not propose to say any more on the other points that have been raised, because as I have said they were really irrelevant to the Resolution which we are discussing to-day and will, no doubt, be raised on future occasion.


Cannot the hon. Gentleman say something with regard to the prolongation of the Insurance Act?


I can certainly say something. It is really a Ministry of Health concern, but I am told that nothing that is done in these new proposals now before the House will affect the prolongation of the Insurance Act one way or another. The question of prolongation is now under consideration, and no announcement has yet been made. It will not be affected in any way whatever by the proposals before the House.


Will the hon. Member answer the question which was put by my hon. Friend, and which is in the minds of many hon. Members. When does the 26 weeks begin to operate? Is it immediately after the passing of the Order in Council, or 26 weeks from that date?


The 26 weeks begin at the beginning of the current benefit year. The hon. Gentleman knows as well as anybody that the current benefit year begins in each ease according to the time the particular application for benefit is made. The current benefit year is the period from which the 26 weeks will begin to run.


Does not that mean in some cases a year, or nearly a year?


It might depend entirely upon how much benefit a man has had.


If the benefit has just begun?


If the benefit were begun to-day, or to-morrow, or this day week, the 26 weeks would begin to run from that time if on the other hand the benefit year began, as some hon. Members suggested, three months ago, that benefit year is the current benefit year and began at the date at which benefit commenced.

Lieut-Commander KENWORTHY

I protest against the last remarks of the hon. Gentleman. This is something entirely new. It seems to be entirely apart from what we were told. It is an extraordinary state of affairs. In fact, I am going to ask the House not to pass this Resolution because obviously we ought to have another chance of discussing it. I do not know whether the hon. Gentleman has been hustled into saying something which is not accurate, but we ought to have a statement as soon as possible. I must make this comment on his speech apart from the final stages referred to. He has passed strictures upon the late Government's handling of the Unemployment Insurance question. Those strictures should be addressed to the Prime Minister, to his own Chancellor of the Exchequer, his own Dominions Secretary, his own Lord Chancellor, his own Air Minister and his own Attorney-General. [Interruption.] But even so, that does not excuse him now from what, I suggest, is a deliberate breach of contract. We have had a great many breaches of contract already. There has been very serious unrest in the bulwark of the Empire as a result of one breach of contract. But, at any rate, we were told that the Unemployment Insurance Scheme was going on for the ordinary man entitled to transitional benefit, and who, perhaps, as is admitted by the Minister of Health, is going to be thrown out of employment by the Measures of which we are now asked to approve.

Both the Minister of Health and the Home Secretary have admitted with their customary candour that these Measures would throw additional men out of work, and that we know to be a fact, but it is necessary to satisfy foreign financiers, and these things have to be done, and then it is said that it is all the fault of the present Prime Minister. It is admitted that the effect of these various cuts, and of the extra, burdens on industry and extra hindrances to our export trade, will be, in the next few days or the next few weeks, to throw men on to the Unemployment Fund, some of whom may not have been out of work for many years, and who have paid in very large sums of money; and these men are not going to get their ordinary rights. They are not the men who, according to hon. Gentlemen opposite, have been battening on the Fund; they are not men who have been unemployed for some years; they are not those who have been supposed not to be willing to work, although, according to official information, the percentage of such men is very small. They are ordinary decent men who have paid contributions amounting to scores of thousands of pounds into the Fund, and they are not going to have their ordinary transitional benefit. Although I expected some pretty curious proceedings from this Government when I saw its composition, I did not expect the incompetence and lack of policy that it has shown, and, above all, I did not expect this from the Minister of Labour, whom, however much we differ from him in politics, we have generally respected in this House. When he was Parliamentary Secretary in the last Conservative Government, we thought he was a gentleman who felt his position accutely, and, personally, I thought. he was one of the few bright spots in this Government.


We are discussing the Resolution, not the Government.

Lieut.-Commander KENWORTHY

When this Resolution was brought before the House, we had no idea of this further breach of faith with men who have never been criticised by any hon. or right hon. Gentlemen opposite. The man who has paid his contributions into the Fund and has not exceeded his transitional benefit has certain actuarial, moral and legal rights, and those rights are being torn up by this makeshift Government which has no mandate from the country.


I understood the Minister to say that the Committee which is considering anomalies under the recent Act will meet for the first time next week. I should like to ask the Minister if he is giving full weight to the very wide dissatisfaction throughout all classes in the country at these anomalies, and the close relationship between their existence and the acceptance by all classes of the hardships which are being imposed upon them; and whether he will see, in view of the fact that these reductions are to come into operation almost immediately, the work of the Committee which is considering the question of these unreasonable claims shall he equally prompt?


Yes, Sir, I certainly shall. I would point out that when I came into office the Committee had not been set up, and the first thing that I did was to set up that Committee.


The Minister of Labour has given us a number of figures which he said were not dealt with in the discussion. He pointed out that the Fund—


rose in his place and claimed to move, "That the Question be now put."

Question put, "That the Question be now put."

The Committee divided: Ayes, 220; Noes, 157.

Division No. 479.] AYES. [4.0 p.m.
Altchison, Rt. Hon. Cralgie M. Astor, Maj. Hn. John J. (Kent, Dover) Balniel, Lord
Albery, Irving James Atholl, Duchess of Beaumont, M. W.
Alexander, Sir Wm. (Glasgow, Cent'l) Atkinson, C. Bellairs, Commander Carlyon
Allen, Sir J. Sandeman (Liverp'l., W.) Baldwin, Rt. Hon. Stanley (Bewdley) Bennett, Sir E. N. (Cardiff, Central)
Amery, Rt. Hon. Leopold C. M. S. Ballour, George (Hampstead) Berry. Sir George
Ashley, Lt.-Col. Rt. Hon. Wilfrid W. Balfour, Captain H. H. (I. of Thanet) Betterton, Sir Henry B.
Birchall, Major Sir John Dearman Graham, Fergus (Cumberland, N) Oliver, P. M. (Man., Blackley)
Boothby, R. J. G. Granville, E. Oman, Sir Charles William C.
Bowater, Col. Sir T. Vansittart Grattan-Doyle, Sir N. Ormsby-Gore, Rt. Hon. William
Bowyer, Captain Sir George E. W. Gray, Milner Owen, Major G. (Carnarvon)
Boyce, Leslie Greaves-Lord, Sir Walter Penny, Sir George
Bracken, B. Gretton, Coionel Rt. Hon. John Percy, Lord Eustace (Hastings)
Briscoe, Richard George Griffith, F. Kingsley (Middlesbro' W.) Perkins, W. R. D.
Broadbent, Coionel J. Gritten, W. G. Howard Peters, Dr. Sidney John
Brown, Ernest (Leith) Gunston, Captain D. W. Peto, Sir Basil E. (Devon, Barnstaple)
Brown, Brig.-Gen. H.C.(Berks, Newb'y) Hacking, Rt. Hon. Douglas H. Power, Sir John Cecil
Bullock, Captain Malcolm Hall, Lieut.-Col. Sir F. (Dulwich) Pownall, Sir Assheton
Butler, R. A. Hamilton, Sir George (llford) Purbrick, R.
Butt, Sir Alfred Hamilton, Sir R. (Orkney & Zetland) Pybus, Percy John
Cadogan, Major Hon. Edward Hanbury, C. Ramsay, T. B. Wilson
Campbell, E. T. Hannon, Patrick Joseph Henry Ramsbotham, H.
Carver, Major w. H. Hartington, Marquess of Reid, David D. (County Down)
Castle Stewart, Earl of Henderson, Capt. R, R.(Oxf'd, Henley) Rentoul, Sir Gervais S.
Cayzer, Maj. Sir Herbt. R. (Prtsmth,S.) Heneage, Lieut.-Colonel Arthur P. Reynolds, Col. Sir James
Cazalet, Captain Victor A. Hills, Major Rt. Hon. John Waller Richardson, Sir P. W. (Sur'y, Ch'ts'y)
Cecil, Rt. Hon. Lord H. (Ox. Univ.) Hore-Belisha, Leslie. Roberts, Sir Samuel (Ecclesall)
Chamberlain, Rt. Hon. N. (Edgbaston) Horne, Rt. Hon. Sir Robert S. Rodd, Rt. Hon. Sir James Rennell
Chrietie, J. A. Howard-Bury, Colonel C. K. Rosbotham, D. S. T.
Church, Major A. G. Hudson, Capt. A. U. M.(Hackney, N.) Ross, Ronald D.
Churchill, Rt. Hon. Winston Spencer Hurd, Percy A. Russell, Alexander West (Tynemouth)
Clydesdale, Marquess of Hutchison, Maj.-Gen. Sir R. Rhys, Hon. C. A. U.
Cobb, Sir Cyril Inskip, Sir Thomas Salmon, Major I.
Cockerill, Brig.-General Sir George Iveagh, Countess of Samuel, A. M. (Surrey, Farnham)
Colman, N. C. D Jones, Llewellyn-, F. Samuel, Rt. Hon. Sir H. (Darwen)
Colville, Major D. J. Jones, Sir G. W. H. (Stoke New'gton) Sandeman, Sir N. Stewart
Cooper, A. Duff Kedward, R. M. (Kent, Ashford) Sassoon, Rt. Hon. Sir Philip A. G. D.
Courthope, Colonel Sir G. L. Kindersley, Major G. M. Savery, S. S.
Cowan, D. M. Knight, Holford Shakespeare, Geoffrey H.
Cranborne, Viscount Lamb, Sir J. Q. Simon, Rt. Hon. Sir John
Crichton-Stuart, Lord C. Lambert, Rt. Hon. George (S. Molton) Sinclair, Rt. Hon. Sir A. (Caithness)
Croft, Brigadier-General Sir H. Lane Fox, Col. Rt. Hon. George R. Sinclair, Col. T. (Queen's C., Belfst)
Crookshank, Cpt.H.(Lindsey, Gainsbro) Latham, H. P. (Scarboro' & Whitby) Smith-Carington, Neville W.
Cunliffe-Lister, Rt. Hon. Sir Philip Law, Sir Alfred (Derby, High Peak) Smithers, Waldron
Dairymple-White, Lt.-Col. Sir Godfrey Leighton, Major B. E. P. Snowden, Rt. Hon. Philip
Davidson, Rt. Hon. J. (Hertford) Lewis, Oswald (Colchester) Somerville, A. A. (Windsor)
Davies, Dr. Vernon Llewellin, Major J. J. Southby, Commander A. R. J.
Davies, E. C. (Montgomery) Locker-Lampson, Rt. Hon. Godfrey Stanley, Lord (Fylde)
Davison, Sir W. H. (Kensington, S.) Locker-Lampson, Com. O. (Handsw'th) Stanley, Hon. O. (Westmorland)
Dawson, Sir Philip Long, Major Hon. Eric Stuart, Hon. J. (Moray and Nairn)
Denman, Hon. R. D. Lovat-Fraser, J. A. Taylor, Vice-Admiral E. A.
Despencer-Robertson, Major J. A. F. Lymington, Viscount Thomas, Rt. Hon. J. H. (Derby)
Dixey, A. C MacDonald, Rt. Hon. J. R. (Seaham) Thomson, Mitchell-, Rt. Hon. Sir W.
Dixon, Captain Rt. Hon. Herbert MacDonald, Malcolm (Bassetlaw) Titchfield, Major the Marquess of
Duckworth, G. A. V. Macdonald, Sir M. (Inverness) Todd, Capt. A. J.
Dudgeon, Major C. R. Maclean, Sir Donald (Cornwall, N.) Tryon, Rt. Hon. George Clement
Dugdale, Capt. T. L. Macpherson, Rt. Hon. James I. Vaughan-Morgan, Sir Kenyon
Eden, Captain Anthony Macquisten, F. A. Wallace, Capt. D. E. (Hornsey)
Edmondson, Major A. J. Makins, Brigadier-General E. Walters, Rt. Hon. Sir J. Tudor
Elliot, Major Walter E. Margesson, Captain H. D. Warrender, Sir Victor
Elmley, Viscount Marjoribanks, Edward Waterhouse, Captain Charles
Erskine, Lord (Somerset, Weston-s.M.) Markham, S. F. Wayland, Sir William A.
Everard, W. Lindsay Merriman, Sir F. Boyd Wells, Sydney R.
Falle, Sir Bertram G. Milne, Wardlaw-, J. S. Williams, Charles (Devon, Torquay)
Ferguson, Sir John Mitchell, Sir W. Lane (Streatham) Wilson, G. H. A. (Cambridge U.)
Foot, Isaac Monsell, Eyres, Com. Rt. Hon. Sir B. Windsor-Clive, Lieut.-Colonel George
Ford, Sir P. J. Moore, Lieut.-Colonel T. C. R. (Avr) Winterton, Rt. Hon. Earl
Fremantle, Lieut.-Colonel Francis E. Morrison, W. S. (Glos., Cirencester) Wolmer, Rt. Hon. Viscount
Galbraith, J. F. W. Muirhead, A. J. Wood, Rt. Hon. Sir Kingsley
Ganzoni, Sir John Nail-Cain, A. R. N. Wood, Major McKenzie (Banff)
George, Megan Lioyd (Anglesea) Nathan, Major H. L. Young, Rt. Hon. Sir Hilton
Gillett, George M. Newton, Sir D. G C. (Cambridge)
Gilmour, Lt.-Col. Rt. Hon. Sir John Nicholson, O. (Westminster) TELLERS FOR THE AYES.—
Glyn, Major R. G. C. Nicholson, Col. Rt. Hn. W. G. (Ptrsf'ld) Major Sir George Hennessy and Mr.Glassey.
Gower, Sir Robert O'Connor, T. J.
Adamson, W. M. (Staff., Cannock) Bowerman, Rt. Hon. Charles W. Day, Harry
Addison, Rt. Hon. Dr. Christopher Broad, Francis Alfred Duncan, Charles
Alexander, Rt. Hon. A. V. (Hillsbro') Brown, C. W. E. (Notts., Mansfield) Dunnico, H.
Alpass, J. H. Brown, W. J. (Wolverhampton, West) Ede, James Chuter
Ammon, Charles George Buchanan, G. Edmunds, J. E.
Attlee, Clement Richard Burgess, F. G. Edwards, C. (Monmouth, Bedwellty)
Ayles, Walter Buxton, C. R. (Yorks, W. R. Elland) Edwards, E. (Morpeth)
Barnes, Alfred John Carter, W. (St. Pancras, S.W.) Evans, Major Herbert (Gateshead)
Batey, Joseph Clynes, Rt. Hon. John R. Gardner, B. W. (West Ham, Upton)
Beckett, John (Camberwell, Peckham) Cocks, Frederick Seymour Gardner, J. P. (Hammersmith, N.)
Bennett, William (Battersea, South) Daggar, George Gibson, H. M. (Lanes, Mossley)
Bevan, Aneurin (Ebbw Vale) Dalton, Hugh Gossling, A. G.
Bowen, J. W. Davies, D. L. (Pontypridd) Gould, F.
Greenwood, Rt. Hon. A. (Colne) McShane, John James Sherwood, G. H.
Grenfell, D. R. (Glamorgan) Manning, E. L. Shield, George William
Groves, Thomas E. Mansfield, W. Shillaker, J. F.
Hall, G. H. (Merthyr Tydvil) March, S. Shinwell, E.
Hall, J. H. (Whitechapel) Marley, J. Short, Alfred (Wednesbury)
Hall, Capt. W. G. (Portsmouth, C.) Maxton, James Simmons, C. J.
Hamilton, Mary Agnes (Blackburn) Messer, Fred Sitch, Charles H.
Hardie, G. D. (Springburn) Middleton, G. Smith, Ben (Bermondsey, Rotherhithe)
Haycock, A. W. Mills, J. E. Smith, Frank (Nuneaton)
Hayday, Arthur Montague, Frederick Smith, Lees-, Rt. Hon. H.B.(Keighley)
Henderson, Rt. Hon. A. (Burnley) Morgan, Dr. H. B. Smith, Tom (Pontetract)
Henderson, Joseph (Ardwick) Morley, Ralph Smith, W. R. (Norwich)
Henderson, Thomas (Glasgow) Morrison, Rt. Hon. H. (Hackney, S.) Sorensen, R.
Henderson, W. W. (Middx., Enfield) Morrison, Robert C. (Tottenham, N) Stephen, Campbell
Herriotts, J. Mort, D. L. Strachey, E. J. St. Loe
Hirst, G. H. (York W.R. Wentworth) Muggeridge. H. T. Strauss, G. R.
Hodman, P. C. Naylor, T. E. Taylor, R. A. (Lincoln)
Isaacs, George Noel Baker, P. J. Thurtle, Ernest
Jenkins, Sir William Noel-Buxton, Baroness (Norfolk, N.) Viant, S. P.
John, William (Rhondda, West) Oldfield, J. R. Walkden, A. G.
Jones, Morgan (Caerphilly) Oliver, George Harold (Ilkeston) Walker, J.
Kelly, W. T. Paling, Wilfrid Wallace, H. W.
Kennedy, Rt. Hon. Thomas Palmer, E. T. Watkins, F. C.
Kenworthy, Lt.-Com. Hon. Joseph M. Parkinson, John Allen (Wigan) Watts-Morgan, Lt.-Col. D. (Rhondda)
Kinley, J. Perry, S. F. Wellock, Wilfred
Lansbury, Rt. Hon. George Pethick-Lawrence, F. W. West, F. R.
Lathan, G. (Sheffield, Park) Phillips, Dr. Marlon Whiteley, Wilfrid (Birm., Ladywood)
Law, A. (Rossendale) Potts, John S. Whiteley, William (Blaydon)
Lawrence, Susan Richardson, R. (Houghton-le-Spring) Wilkinson, Ellen C.
Lawson, John James Ritson, J. Williams, David (Swansea, East)
Lawther, W. (Barnard Castle) Romeril, H. G. Williams, E. J. (Ogmore)
Leach, W. Rowson, Guy Williams, Dr. J. H. (Llanelly)
Lee, Frank (Derby, N.E.) Salter, Dr. Alfred Williams, T. (York, Don Valley)
Lee, Jennie (Lanark, Northern) Sanders, W. S. Wilson, C. H. (Sheffield, Attercliffe)
Lindley, Fred W. Sandham, E. Winterton, G. E. (Leicester, Loughb'gh
Logan, David Gilbert Sawyer, G. F. Wise, E. F.
Macdonald, Gordon (Ince) Scrymgeour, E. Young, R. S. (Islington, North)
McElwee, A, Scurr, John Young, Sir R. (Lancaster, Newton)
McEntee, V. L. Sexton, Sir James
MacNeill-Weir, L. Shepherd, Arthur Lewis TELLERS FOR THE NOES.—
Mr. Hayes and Mr. Charleton.

Question put accordingly, That, for the purposes of any Act of the present Session to authorise the making of Orders in Council for the purpose of effecting economies in expenditure falling to be defrayed out of public moneys and improvements in the arrangements for meeting such expenditure, it is expedient to authorise the payment out of moneys provided by Parliament of such sums as may be required by reason of any provision made by such Orders— (a) for altering the respective proportions in which expenditure in respect of any of the services specified in the said

Act is to he defrayed out of any fund established by the enactments relating to any of the said services and out of moneys provided by Parliament; (b) for increasing the contributions to be made to the unemployment fund or for securing that as from the date on which the Treasury cease to have power to make advances foe' the purpose of meeting deficiencies in that fund, any such deficiency shall be met out of such moneys as may be provided by Parliament for that purpose.

The Committee divided: Ayes, 219; Noes, 155.

Division No. 480.] AYES. [4.11 p.m.
Altchison, Rt. Hon. Craigle M. Bowater, Col. Sir T. Vansittart Churchill, Rt. Hon. Winston Spencer
Albery, Irving James Bowyer, Captain Sir George E. W. Clydesdale, Marquess of
Alexander, Sir Wm. (Glasgow, Cent'l) Boyce, Leslie Cobb, Sir Cyril
Allen, Sir J. Sandeman (Liverp'l.,W.) Bracken, B. Cockerill, Brig.-General Sir George
Amery, Rt. Hon. Leopold C. M. S. Briscoe, Richard George Colman, N. C. D.
Ashley, Lt.-Col. Rt. Hon. Wilfrid W. Broadbent, Colonel J. Colville, Major D. J.
Astor, Maj. Hon John J.(Kent,Dover) Brown, Ernest (Leith) Cooper, A. Duff
Atholl, Duchess of Brown, Brig.-Gen.H.C.(Berks,Newb'y) Courthope, Colonel Sir G. L.
Atkinson, C. Bullock, Captain Malcolm Cowan, D. M.
Baldwin, Rt. Hon. Stanley (Bewdley) Butler, R. A. Cranborne, Viscount
Balfour, George (Hampstead) Butt, Sir Alfred Crichton-Stuart, Lord C.
Balfour, Captain H. H. (I. of Thanet) Cadogan, Major Hon. Edward Croft. Brigadier-General Sir H.
Balniel, Lord Campbell, E. T. Crookshank, Capt. H. C.
Beaumont, M. W. Carver, Major W. H. Cunliffe-Lister, Rt. Hon. Sir Philip
Bellairs, Commander Carlyon Castle Stewart, Earl of Dairymple-Whlie, Lt.-Col. Sir Godfrey
Bennett, Sir E. N. (Cardiff, Central) Cayzer, Maj.Sir Herbt. R. (Prtsmth S.) Davidson, Rt. Hon. J. (Hertford)
Berry, Sir George Cecil, Rt. Hon. Lord H. (Ox. Univ.) Davies, Dr. Vernon
Betterton, Sir Henry B. Chamberlain, Rt. Hon. N. (Edgbaston) Davies, E. C. (Montgomery)
Birchall, Major Sir John Dearman Christie, J. A. Davison, Sir W. H. (Kensington, S.)
Boothby, R. J. G. Church, Major A. G. Dawson, Sir Philip
Denman, Hon. R. D. Kedward, R. M. (Kent, Ashford) Reid, David D. (County Down)
Despencer-Robertson, Major J. A. F. Kindersley, Major G. M. Rentoul, Sir Gervais S.
Dixey, A. C. Knight, Holford Reynolds, Col. Sir James
Dixon, Captain Rt. Hon. Herbert Lamb, Sir J. Q. Rhys, Hon. C. A. U.
Duckworth, G. A. V. Lambert, Rt. Hon. George (U. Molton) Richardson, Sir P. W. (Sur'y, Ch't'sy)
Dudgeon, Major C. R. Lane Fox, Col. Rt. Hon. George R. Roberts, Sir Samuel (Ecclesall)
Dugdale, Capt. T. L. Latham, H. P. (Scarboro' & Whitby) Rodd, Rt. Hon. Sir James Rennell
Eden, Captain Anthony Law, Sir Alfred (Derby, High Peak) Rosbotham, D. S. T.
Edmondson, Major A J. Leighton, Major B. E. P. Ross, Ronald D.
Elliot, Major Walter E. Lewisx, Oswald (Colchester) Russell, Alexander West (Tynemouth)
Elmley, Viscount Liewellin, Major J. J. Salmon, Major I.
Erskine, Lord (Somerset, Weston-s-M.) Locker-Lampson, Rt. Hon. Godfrey Samuel, A. M. (Surrey, Farnham)
Everard, W. Lindsay Locker-Lampson, Com. O.(Handsw'th) Samuel, Rt. Hon. Sir H. (Darwen)
Falle, Sir Bertram G. Long, Major Hon. Eric Sandeman, Sir N. Stewart
Ferguson, Sir John Lovat-Fraser, J. A. Sassoon, Rt. Hon. Sir Philip A. G. D.
Foot, Isaac Lymington, Viscount Savery, S. S.
Ford, Sir P. J. MacDonald, Rt. Hon. J. R. (Seaham) Shakespeare, Geoffrey H.
Fremantle, Lieut.-Colonel Francis E. MacDonald, Malcolm (Bassetlaw) Simon, Rt. Hon. Sir John
Galbraith, J. F. W. Macdonald, Sir M. (Inverness) Sinclair, Rt. Hon. Sir A. (Caithness)
Ganzoni, Sir John Maclean, Sir Donald (Cornwall, N.) Sinclair, Col. T. (Queen's U., Belfast)
George, Megan Lloyd (Anglesea) Macpherson, Rt. Hon. James I. Smith-Carington, Neville W.
Gillett, George M. Macquisten, F. A. Smithers, Waldron
Gilmour, Lt.-Col. Rt. Hon. Sir John Makins, Brigadier-General E. Snowden, Rt. Hon. Philip
Glyn, Major R. G. C. Margesson, Captain H. D. Somerville, A. A. (Windsor)
Gower, Sir Robert Marjoribanks, Edward Southby, Commander A. R. J.
Graham, Fergus (Cumberland, N.) Markham, S. F. Stanley, Lord (Fylde)
Granville. E. Merriman, Sir F. Boyd Stanley, Hon. O. (Westmorland)
Grattan-Doyle, Sir N. Milne, Wardlaw-, J. S. Stuart, Hon. J. (Moray and Nairn)
Gray, Milner Mitchell, Sir W. Lane (Streatham) Taylor, Vice-Admiral E. A.
Greaves-Lord, Sir Walter Monsell, Eyres, Com. Rt. Hon. Sir B Thomas, Rt. Hon. J. H. (Derby)
Gretton, Colonel Rt. Hon. John Moore, Lieut.-Colonel T. C. R. (Ayr) Thomson, Sir F.
Griffith, F. Kingsley (Middlesbro' W.) Morrison, W. S. (Glos., Cirencester) Thomson, Mitchell-, Rt. Hon. Sir W.
Gritten, W. G. Howard Muirhead, A. J. Titchfield, Major the Marquess of
Gunston, Captain D. W. Nail-Cain, A. R. N. Todd, Capt. A. J.
Hacking, Rt. Hon. Douglas H. Nathan, Major H. L. Tryon, Rt. Hon. George Clement
Hall, Lieut.-Col. Sir F. (Dulwich) Newton, Sir D. G. C. (Cambridge) Vaughan-Morgan, Sir Kenyon
Hamilton, Sir George (llford) Nicholson, O. (Westminster) Wallace, Capt. D. E. (Hornsey)
Hamilton, Sir R. (Orkney & Zetland) Nicholson, Col. Rt.Hn.W.G.(Ptrsf'ld) Walters, Rt. Hon. Sir J. Tudor
Hanbury, C. O'Connor, T. J. Warrender, Sir Victor
Hannon, Patrick Joseph Henry Oliver, P. M. (Man., Blackley) Waterhouse, Captain Charles
Hartington, Marquess of Oman, Sir Charles William C. Waylard, Sir William A.
Henderson, Capt. R.R.(Oxf'd, Henley) Ormsby-Gore, Rt. Hon. William Wells, Sydney R.
Heneage, Lieut.-Colonel Arthur P. Owen, Major G. (Carnarvon) Williams, Charles (Devon, Torquay)
Hills, Major Rt. Hon. John Waller Penny, Sir George Wilson, G. H. A. (Cambridge U.)
Hore-Belisha, Leslie Percy, Lord Eustace (Hastings) Windsor-Clive, Lieut.-Colonel George
Horne, Rt. Hon. Sir Robert S. Perkins, W. R. D. Winterton, Rt. Hon. Earl
Howard-Bury, Colonel C. K. Peters, Dr. Sidney John Wolmer, Rt. Hon. Viscount
Hudson, Capt. A. U. M. (Hackney, N.) Peto, Sir Basil E. (Devon, Barnstaple) Wood, Rt. Hon. Sir Kingsley
Hurd, Percy A. Power, Sir John Cecil Wood, Major McKenzie (Banff)
Hutchison, Maj.-Gen. Sir R. Pownall, Sir Assheton Young, Rt. Hon. Sir Hilton
Inskip, Sir Thomas Purbrick, R.
Iveagh, Countess of Pybus, Percy John TELLERS FOR THE AYES.—
Jones, Liewellyn-, F. Ramsay, T. B. Wilson Major Sir George Hennessy and Mr. Glassey.
Jones, Sir G. W. H. (Stoke New'gton) Ramsbotham, H.
Adamson, W. M. (Staff., Cannock) Duncan, Charles Hirst, G. H.(York W. R. Wentworth)
Addison, Rt. Hon. Dr. Christopher Dunnico, H. Hoffman, P. C.
Alexander, Rt. Hon. A. V. (Hillsbro') Ede, James Chuter Isaacs, George
Ammon, Charles George Edmunds, J. E. Jenkins, Sir William
Attlee, Clement Richard Edwards, C. (Monmouth, Bedwellty) John, William (Rhondda, West)
Ayles, Walter Edwards, E. (Morpeth) Jones, Morgan (Caerphilly)
Barnes, Alfred John Evans, Major Herbert (Gateshead) Kelly, W. T.
Batey, Joseph Gardner, B. W. (West Ham. Upton) Kennedy, Rt. Hon. Thomas
Beckett, John (Camberwell, Peckham) Gardner, J. P. (Hammersmith, N.) Kenworthy, Lt.-Com. Hon. Joseph M.
Bennett, William (Battersea, South) Gibson, H. M. (Lanes, Mossley) Kinley, J.
Bevan, Aneurin (Ebbw Vale) Gossling, A. G. Lansbury, Rt. Hon. George
Bowen, J. W. Greenwood, Rt. Hon. A. (Coine) Lathan, G. (Sheffield, Park)
Bowerman, Rt. Hon. Charles W. Grenfell, D. R. (Glamorgan) Law, A. (Rossendale)
Broad, Francis Alfred Groves, Thomas E. Lawrence, Susan
Brown, C. W. E. (Notts, Mansfield) Hall, G. H. (Merthyr Tydvil) Lawson, John James
Brown, W. J. (Wolverhampton, West) Hall, J. H. (Whitechapel) Lawther, W. (Barnard Castle)
Buchanan, G. Hall, Capt. W. G. (Portsmouth, C.) Leach, W.
Burgess, F. G. Hamilton, Mary Agnes (Blackburn) Lee, Frank (Derby, N.E.)
Buxton, C. R. (Yorks, W. R. Elland) Hardle, G. D. (Springburn) Lee, Jennie (Lanark, Northern)
Carter, W. (St. Pancras, S.W.) Haycock, A. W. Lindley, Fred W.
Clynes, Rt. Hon. John R. Hayday, Arthur Logan, David Gilbert
Cocks, Frederick Seymour. Henderson, Right Hon. A. (Burnley) Macdonald, Gordon (Ince)
Daggar, George Henderson, Joseph (Ardwick) McElwee, A.
Dalton, Hugh Henderson, Thomas (Glasgow) McEntee, V. L.
Davies, D. L. (Pontypridd) Henderson, W. W. (Middx., Enfield) MacNeill-Weir, L.
Day, Harry Herriotts, J. McShane, John James
Manning, E. L. Richardson, R. (Houghton-le-Spring) Strauss, G. R.
Mansfield, W. Ritson, J. Taylor, R. A. (Lincoln)
March, S. Romeril, H. G. Thurtle, Ernest
Marley, J. Rowson, Guy Vaughan, David
Maxton, James Salter, Dr. Alfred Viant, s. P.
Messer, Fred Sanders, W. S. Walker, J.
Middleton, G. Sandham, E. Wallace, H. W.
Mills, J. E. Sawyer, G. F. Watkins, F. C.
Montague, Frederick Scrymgeour, E. Watts-Morgan, Lt.-Col. D. (Rhondda)
Morgan, Or. H. B. Scurr, John Wellock, Wilfred
Morley, Raiph Sexton, Sir James West. F. R.
Morrison, Rt. Hon. H. (Hackney, S.) Shepherd, Arthur Lewis Whiteley, Wilfrid (Birm., Ladywood)
Morrison, Robert C. (Tottenham, N.) Sherwood, G. H. Whiteley, William (Blaydon)
Mort, D. L, Shield, George William Wilkinson, Ellen C.
Muggerloge. H. T. Shillaker, J. F. Williams, David (Swansea, East)
Naylor, T. E. Shinwell, E. Williams, E. J. (Ogmore)
Noel Baker, p. J. Short, Alfred (Wednesbury) Williams, Dr. J. H. (Lianelly)
Noel-Buxton, Baroness (Norfoik, N.I Simmons, C. J. Williams, T. (York, Don Valley)
Oldfield, J. R. Sitch, Charles H Wilson C. H. (Sheffield, Attsreilffe)
Oliver, George Harold (Ilkeston) Smith, Ben (Bermondsey, Rotherhithc) Winterton, G. E.(Leicester, Loughb'gh)
Paling, Wilfrid Smith, Frank (Nuneaton) Wise, E. F.
Palmer, E. T. Smith, Lees-, Rt. Hon. H.B.(Keighley) Young, R. S. (Islington, North)
Parkinson, John Allen (Wigan) Smith, Tom (Pontefract) Young, Sir R. (Lancaster, Newton)
Perry, S. F, Smith, W. R. (Norwich)
Pethick-Lawrence. F. W. Sorensen, R. TELLERS FOR THE NOES.—
Phillips, Dr. Marlon Stephen, Campbell M Hayes and Mr. Charleton.
Potts, John S. Strachey, E. J. St. Lot

Resolution to be reported upon Monday next.

Major Sir GEORGE HENNESSY (Treasurer of the Household)

Through an error on my part, I announced the wrong figures for the last Division. The figures for the "Ayes" should have been 220, instead of 230.


I agree with the statement made by the hon. and gallant Baronet.


The Tellers being agreed, I shall give instructions for the correction to be made.

The Orders of the Day were read, and postponed.

Whereupon Mr. SPEAKER adjourned the House, without Question put, pursuant to Standing Order No. 3.

Adjourned at Twenty Minutes after Four o'Clock until Monday, 21st September.