TRANSITIONAL PAYMENTS PROLONGATION (UNEMPLOYED PERSONS) BILL.

HC Deb 08 April 1932 vol 264 cc443-517

Order for Second Reading read.

The PARLIAMENTARY SECRETARY to the MINISTRY of LABOUR (Mr. R. S. Hudson)

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

This Bill, as the title states, is designed to extend for a period the legislation under which transitional payments may be made. The details of the Financial Resolution on which this Bill is based, and which it follows very closely, were gone into fully by my right hon. Friend the Minister of Labour on Tuesday, and I do not imagine that the House would wish me to traverse that ground at any length, but I think it may be convenient if I give the House the origin of the system of transitional payments, whose extension is being provided for today. This system, like some other details of our present unemployment insurance scheme, dates back to the report of the Blanesburgh Committee of 1925, although, of course, extended benefit was in existence before that date. The Committee took as the basis of their report the probability of a rate of unemployment of 6 per cent. over a cycle of years, and recommended that a man or woman should be allowed to draw standard benefit for so long as he or she could show 30 stamps in the last two years. They believed that with the rates of contribution and rates of benefit which they recommended the Insurance Fund would be self-supporting and would balance over a period of years, but they realised that there was a need for some provision for the change-over period from the old system to the new. Persons in receipt of standard benefit would have nothing to complain of, because the new terms were better than the old, but the Committee realised that there was a difficulty in regard to persons who were then drawing extended benefit. If the House will allow me, I will read a few lines of their recommendation. They said that although the law gave the persons receiving extended benefit no absolute right to such benefit: its receipt has hitherto been regarded as exhausting future contributions, although we doubt Whether the insured persons as a whole have ever had the distinction between the two kinds of benefit prominently in their minds. No doubt they think the contributions they have made ensure benefit during the whole of their unavoidable unemployment. We are disposed therefore to take a generous view of the matter. Accordingly, the Committee recommended that any person drawing extended benefit when the change-over took place should be allowed to continue to draw that benefit for the whole of the rest of his benefit year and for such period beyond it as the Minister might decide, and they recommended that substantially the same concession should be granted to anyone drawing extended benefit for the first time in the six months after the new system came into operation. They went on to say: We hope that the number of persons under the necessity of taking advantage of this concession will be few. If a period of good trade is at hand the number clearly will be negligible. It is only fair to add that the Committee thought, from the evidence they had before them, that the period during which this concession would be in operation would be a distinctly limited one, but the Committee, following in this the example of every past Government, of whatever political complexion, failed really to face up sufficiently to the hard facts of the situation. In any case their recommendations formed the basis of the Bill of 1927, but it was clear, when that Bill was under discussion, that the numbers would be at least 56,000. The Minister of the day promised, in reply to representations made in the House, that he would keep the matter under review, and if before the end of the first transitional period, in April, 1929, it appeared that the improvement in unemployment which the Committee had envisaged was not going to take place, he would pass the necessary legislation to deal with the matter. That course was adopted, and subsequent history has been one of steady growth in the numbers of persons in receipt of transitional benefit, and a series of Bills to extend the period, details of which were given by my right hon. Friend on Tuesday. This Bill is, we hope, the last of this series. It may perhaps be of interest to the House, as a matter of historical record, if I give particulars of the cost to the Exchequer of transitional benefit and payments since the scheme was started. In 1929–30, when the State bore only half the cost, the Exchequer had to find £3,985,000. In all subsequent years the whole cost has been borne by the Exchequer and the figures are: 1930–31 £20,316,000, 1931–32 £32,500,000 (estimated), and in 1932–33 £41,750,000 (estimated).

I gathered from the course of the Debate on the Committee stage of the Financial Resolution that hon. Members opposite were not going to shoulder the responsibility of opposing this Bill, but that, nevertheless, they thought that some alternative and better procedure might have been devised. In this, as in so many other matters, since they themselves have been faced with the responsibility of office, they are in no position to throw stones. What is the problem? The problem can be briefly stated as, "What are we to do with persons who fall outside the insurance scheme?" As long ago as 25th November, 1929, the then Minister of Labour, Miss Bondfield, stated that the Bill she was bringing in to prolong the transitional period for 12 months was necessary in order to give the Government the time to work out a plan for dealing with persons who had exhausted their rights to unemployment benefit. She said, in addition, that the Government had set up a Cabinet Committee which was already at work on the larger scheme. Eight months passed, and then we had the three-party committee of six Members of this House which devoted four months of its time to trying to find a solution, but before any conclusions were reached, or at any rate before any conclusions were published, the Government announced the appointment of a Royal Commission. This present Government did not appoint it; it was not even appointed at the request of the then Opposition, as I think some hon. Members implied on Tuesday; it was appointed by the Government of the day, and the conclusion that was drawn by the country and rightly drawn, I think, was that the reason for its appointment was the desire on the part of members of the Labour party to avoid having to deal with a very tricky and difficult problem.

In any case, during their two years of office the Labour party did not deal with the problem, and so they cannot throw stones, and it seems to me there is no justification for their coming along now and suggesting that a few weeks before the receipt of the report of that Commission, which will represent 18 months' hard work, we should produce and pass into law a scheme of our own for dealing with the problem. In the first place, there would not have been time to produce and to pass the complicated legislation necessary to replace the present temporary Measures; but I go further and say that if there had been time it would have been a waste of that time, having regard to the probability of an early report by the Commission. As far as the date, June, 1933, is concerned, it has not been adopted by us with any desire to prolong unnecessarily the transitional period, but has been selected merely because it is the date by which new legislation will, in any case, be necessary to deal with the whole problem, and I know that it is the view and the hope of my right hon. Friend, as it is of myself, that we shall get that legislation substantially before that date.

There is only one other point I wish to deal with, and that is the conditions under which transitional payments are received. The Order-in-Council applies to two sets of persons, namely, those who cannot satisfy the first statutory condition, and those who have drawn 26 weeks' benefit in their benefit year. The contention of the Labour party is that in any alternative scheme we produce we should not have the needs test. The contention of some hon. Members opposite is that, if the scheme is to be on a contributory basis, it should provide benefit for all genuinely unemployed persons, no matter how long they are unemployed, provided that they are genuinely so unemployed. I think the hon. Member for Gorbals (Mr. Buchanan) and his friends may be included in that group, and to their credit, be it said, they have never attempted to disguise their convictions on that point. On the other side, there are those who maintain that, once a man has exhausted his contractual rights, he should not be paid what is in effect relief out of the Exchequer unless he is actually in need of it. If you accept that principle, I think it is common ground that some inquiry into needs and means is essential for its administration. Opinions may legitimately differ as to the precise permanent machinery. No doubt in due course we shall receive the considered opinion of the Royal Commission on this point. I will not deal now with the particular machinery, because that is largely a matter of opinion, and I am more concerned with the principles. I think it was always understood that the Labour party, whatever their view is about the machinery, accepted the view that State funds ought not to be poured out to persons unless they are really in need of assistance. Indeed, I go further and say that we have always understood that some individual members of the Labour party tried to get their party to repudiate the means test in toto, but that their endeavours were not successful. It was therefore with feelings of astonishment that I heard the hon. Member for Chester-le-Street (Mr. Lawson) state on Tuesday that As far as we are concerned, we are for ending the means test, root and branch, without equivocation or qualification."[OFFICIAL REPORT, 5th April, 1932; col. 40, Vol. 264.] On this point, I should like to ask one or two questions. Are we to take it that that declaration is the considered policy of the Labour party? [HON MEMBERS: "Yes."] Are we to understand that that is their permanent policy, or are we to take it that it is a temporary policy adopted for immediate use? Otherwise we should very much like to know why they have chosen this particular moment for announcing this change. Are we to assume that the hon. Member for Chester-le-Street, or indeed the right hon. Gentleman the Member for Bow and Bromley (Mr. Lansbury) approves of paying 23s. 3d. a week to a married man aged 62 who is in possession of £630 in the Post Office Savings Bank and £163 in national savings certificates? Do they approve of paying 15s. 3d. a week to a married man whose wife owns a shop making a profit of £10 a week, or of 15s. 3d. to a single man owning £440 in War Loan, and living at home with a father earning £5 a week, and no others in family? Those are actual instances in London of payments that were being made before the new scheme was introduced.

Mr. LOGAN

How many?

Mr. HUDSON

If I am challenged, I can produce a very large number indeed throughout the country. Do hon. Members opposite suggest that no inquiry should be made in any case? I admit at once that in many cases, in fact in the majority of cases, the statements made by applicants can be accepted as accurate; but I do not think that even the members of the Labour party would deny that there is a minority, possibly a substantial minority, in which that is not so. In these circumstances, it is not fair to the honest man that the dishonest person should be placed in a position to get away with it through lack of inquiry. Indeed, I should have thought that the average working-man who hates malingering and deception would have been the first to welcome, or indeed to insist, on this principle. If, as the hon. Member for Chester-le-Street stated, the Labour party are in favour, not of amending the means test, not of altering or improving the machinery of administration, but of ending it, root and branch, without equivocation or qualification. the only conclusion the House and the country can draw is that they are in favour of a system under which anomalies such as I have just described are not only possible but inevitable. I would like to put this final consideration. If you are going to pay benefit at full rates for practically unlimited periods, without any inquiry as to whether these payments are needed or not, to unemployed persons who have exhausted their standard benefit, there is no possible justification for insisting on contributions from employed persons. If there is to be no distinction between standard benefit and transitional payments the whole basis of the contributory system is destroyed. In these circumstances, I ask the House to give a Second Reading to this Bill.

Mr. CHARLES BROWN

I do not think I need reply to the questionnaire which has been put to the Labour party by the Parliamentary Secretary to the Ministry of Labour. The observations I wish to make in regard to these proposals are of a rather different character. We are all agreed that the Bill has been introduced to deal with one aspect of unemployment insurance until June, 1933. I think we all agree that the Bill is necessary to continue what we on this side of the House regard as inadequate payments to a certain section of the unemployed, and for that reason we shall not divide against the Bill. I think, however, that we are entitled to protest. against the method which is now being put in operation in regard to the money asked for in this Measure. The other day the hon. Member for Stockton-on-Tees (Mr. Macmillan)—I am sorry that he is not in his place at the moment—tried to convince us that the continuance of these transitional payments is an acknowledgment by the State of the principle, which we on these benches have so long advocated, of work or maintenance; but by what stretch of imagination the hon. Member can regard as maintenance the transitional payments which are now being made, passes my comprehension. If maintenance merely means just keeping people alive in a state of semi-starvation, such as is involved by the transitional payments which are now being made, the hon. Member for Stockton-on-Tees may console himself with the fact that the State has acknowledged, as he tells us, the principle of work or maintenance; but the maintenance which is being given is very little consolation to large numbers of the unemployed.

The hon. Member tried to salve his conscience by contending that the meagre pittances now being made are as much as the State can afford, and that either they have to be as they are now or there would have been none at all. I suppose he had in mind a statement which we have often heard in connection with unemployment insurance, to the effect that the way in which the system was being worked was rapidly undermining the credit of the State. I often pause, when I hear that phrase used, and ask myself, what really is the credit of the State? I always feel that the real credit of the State is the physical energy, the industrial skill, and the intelligence of the working-class population of this country. The real credit of the State is the assumption on the part of those who talk about it that these people will go on working for an indefinite period in the future just as they have worked in the past, producing wealth in the same way in the days to come as they have done in the days that are gone. If that be so, surely those who are concerned about the credit of the State ought to take all possible steps to ensure the maintenance of the physical energy, the industrial skill, and the intelligence of the working-class population of this country, and so we feel that the sum asked for in this Bill is grossly inadequate to afford maintenance to the unemployed who are not entitled to statutory benefit. The Rules of the House preclude our moving to increase this sum.

11.30 a.m.

We are being asked, as I take it the Minister will agree, from replies that he has already given to questions put to him, to continue, until June, 1933, a system which is generally discredited—I am referring now to the means test. It is true that the money here asked for may keep many unemployed people alive till then, but only in a state of steadily deteriorating physique; and the worst aspect of the matter, so far as I have come in contact with it, is that you are subjecting them all the time to a mental torture which you have no right to inflict upon them. I have some experience in Poor Law work, and I agree that in every community, in every small town, or even village, there is a tiny percentage of the population who, through no fault of their own—for I do not wish to be understood as blaming them, because they are the product of the social conditions under which we live —there is a tiny percentage who probably, shall I say, have lost the work habit. I do not know whether it is a good one or not. I do not know that we ought not to cease talking about work as an end in itself; work is only something in which we have to engage in order to live. Too frequently here, I fear, we talk about work as an end in itself, and for millions of the common people of this country the search for a job has now become the occupation of the whole of their waking hours. What a striking commentary that is on the economic system under which we live. This tiny percentage of people ought not to be the subject of blame, but rather of pity, for having lost the work habit. Often that is due to physical defects. But the great mass of the unemployed do not belong to this category at all, even those who have been unemployed for very long periods. In the speech of the Minister of Labour the other day there were one or two very striking passages. For instance, he detailed, as the Parliamentary Secretary has done this morning, something of the history of transitional payments, and he then made this statement: I offer this as an example of the perfectly chaotic state in which the law relating to unemployment insurance now is."— [OFFICIAL REPORT, 5th April, 1932; col. 26, Vol. 264.] That sentence, to me, is a striking revelation of the inability of Governments to understand the real nature of the unemployment problem. The remarks that the Parliamentary Secretary has made about the Labour Government leave me cold; no gibe about the Labour Government will affect me at all. I remember that during the 1929 election very lavish promises were made about curing and conquering unemployment; but I myself, even during that election, did not tell the electors in my division anything about curing or conquering unemployment, and, consequently, I had nothing to apologise for in 1931.

It seems to me that statesmen are under some strange delusion that there is some mysterious factor in the existing economic system, which, when it comes into operation, will bring back prosperity and re-absorb the unemployed. The only justification that I can find for that delusion is that in the pre-War years there were, apparently, alternating periods of prosperity and depression; but the pre-War alternation of prosperity and adversity was, surely, the writing on the wall. Did it not reveal the fatal flaw in the economic system itself? Did it not point to what is now becoming more and more pronounced—the anarchic condition of production? Did it not point to the fact that every improvement in the technique of production was bound to displace more and more of the people who were pouring this huge volume of goods into the market, as it is called, without any calculation or consideration of what the market, that vast pool, might absorb? That was what was happening on the one side. On the other side were the millions of workers who were producing this vast volume of wealth, as they are to-day. The only way in which they can take goods out of that vast pool which is called the market is by the purchasing power they possess, and, as steps are taken to reduce that purchasing power, inevitably smaller quantities of those goods are taken out of that vast pool.

The Minister, in his speech on Tuesday, told us also that the Bill was simply a temporary, carrying over Measure pending legislation which in any case will become necessary next year, and the Parliamentary Secretary has tried to get away with the same sort of thing this morning. We should do nothing now, he says; let us wait for the report of the Royal Commission. I am not, disturbed by the fact that the Royal Commission was set up by the Labour Government. They would probably have made the same sort of excuses as the Parliamentary Secretary has made this morning, constituted as they were previous to the last General Election. A change, of course, has taken place now. The Lord President of the Council, in a speech in the country the other day, talked about the magic change which had come over the situation. He said that a few months ago capital was rapidly leaving the country. Now the process had been reversed and capital was flowing into the country, and apparently the only thing that was needed to bring about that transformation was that, instead of him sitting here facing the Prime Minister on that side, they should both sit on the same bench and, when they both occupied the same bench, a transformation came over the scene and, instead of capital leaving the country, capital flowed back into the country. The Parliamentary Secretary and the Minister hope before the Bill expires to introduce legislation based on the forthcoming report of the Royal Commission.

The MINISTER of LABOUR (Sir Henry Betterton)

I never gave any undertaking—I could not—that the forthcoming legislation will necessarily be based on the report of the Royal Commission. We shall do what every Government does. We shall consider the report of the Royal Commission, and, having considered it, we shall frame what we believe to be the best Measure.

Mr. BROWN

I accept the Minister's explanation. I had no intention whatever of misrepresenting him. All I was saying was that he hopes before this Bill expires to bring in legislation, shall I say more or less based on the report of the Royal Commission, which will build up for us what he hopes will be a system of unemployment insurance which is actuarially sound. I think that is the intention which the Minister, and I suppose the Government, have. Obviously, when he makes that statement, he is proceeding on the same false assumption as all his predecessors in regard to unemployment insurance. He might be able to do that inside a stable economic system, but I am certain that he will not be able, nor will any other person who attempts the task be able, to do it inside the unstable economic system in which we are living at the moment. In the tottering economic structure in which we live, not for long will any system of unemployment insurance on a contributory basis remain actuarially sound.

The Parliamentary Secretary has put questions about a contributory or noncontributory system. May I remind him that Lord Snowden, when unemployment insurance was first introduced, voted against the principle of contributory insurance? May I remind him that the right hon. Gentleman the Member for Epping (Mr. Churchill) has done the same thing, and there are, not only on these benches but elsewhere, opinions which seem to me to be based, upon the fact that, because a person has grasped something of the real significance of the economic system in which we live, he is not at all certain that you will ever be able to build up on a basis of contributions an unemployment insurance system which will remain for long actuarially sound. That will not be due to lack of skill on the part of your advisers. It will be due entirely to the unstable nature of the economic system in which we are living, now I believe passing through a process of rapid deterioration.

To turn to another aspect of the subject, many of those who are administering the means test, as we have come to call it, regard the entire system as something that ought to be swept out of the way at the earliest possible moment. The Parliamentary Secretary in a recent Debate on unemployment, when he an- nounced the policy of the Government in regard to work-finding schemes, criticised in turn arguments that had been used in support of the policy of finding work from public funds, and among the arguments that he summarised he mentioned improving the capital equipment of the country. I looked at his speech afterwards, and, after criticising that particular argument, he added some words to the effect that we had gone as far as we ought to do in that direction for the present. He pointed out that the capital equipment that had already been carried out was possibly far more than our needs for the immediate future. That was a rather pessimistic statement for him to make, because now we are told that we have turned in the right direction. The nation's face is towards the rising sun. An era of prosperity is not far away. If Members of the Government believe that, surely between now and the day when prosperity conies, a short interim as they imagine, they will treat the unemployed generously. You may not have to do it long. As you are so sure that the policy on which you have embarked is going to bring us prosperity, till that day comes treat them generously.

The other thing he said which astonished me in summarising those arguments was this. He said that it cost the State far more to find a, man work than it did to keep him unemployed. I think he said that to keep a man unemployed cast the State about £50 a year on the average, and to find him work would probably cost £500 or £600 a year. I thought that rather callous. His statistics may be correct, his economic argument may be sound from an orthodox point of view, but the statement from a human point of view surely ought never to have been made from that Box. He went on to talk about the capital resources of the country for ordinary industrial development, and he said it would be infinitely better if the capital resources flowed into ordinary channels, because they would thereby provide more employment than if they had been used in other ways, have wondered sometimes, especially in view of what I have seen in papers supporting the Government, and on placards, whether we ought to attach very much importance to that argument.

We are now told we are going to have quite a lot of foreign factories in the country. I suppose the Government are hoping that the sum involved in these transitional payments will decline because we are to have these foreign factories established. I do not know how it is that, as the outcome of the outburst of ultra-nationalism that we have seen lately, Members opposite 'should take such pride in the statement that foreign factories are to be built here. It is a matter of amazement to me. I think the Tory party ought now to have quite a different slogan from that which they had before. They ought to have as their slogan, "Let foreigners run British industry. There will be no unemployment." I am sure that along the lines suggested by hon. Members opposite there really is no way out for the masses of the unemployed, and I am certain in my own mind—I only hope I am wrong that the increasing numbers of those who fall out of statutory benefit will need these transitional payments. I am certain that many of them will have longer and longer periods of unemployment. When we observe the economic factors that are producing these results, we say on these benches that you have no right to treat the victims of this economic process as social outcasts. That is what is happening at the moment. I made some remarks the other day about what is being done by public assistance committees. I hold in my hand a document issued by the public assistance committee of Nottinghamshire under Unemployment Insurance transitional payments, and at the bottom of the page I find the following paragraph giving effect to the instructions of the committee. This is from the public assistance officer: I have instructed the relieving officers to insert in the form of income and outgoings completed by applicants the words particulars of other weekly expenses' in order to give applicants an opportunity of furnishing on such forms details of their normal weekly household expenses. I suggest that that is going too far. The forms ask for rent, insurance, income from pensions, and wages, and now we have proceeded to a stage where you ask for details of the normal weekly household expenditure. Do you want to check, in the weekly grocery bill, the two ounces of tobacco for the husband? [Interruption.] Oh, yes, details are asked for. [An HON. MEMBER: "Rail- way fares."] Do you want to check in the minutest detail the household expenditure of the working-man? I ask the Minister—and I do so with all sincerity because I am convinced that this is due to pressure being put upon public assistance committees by departments who are demanding that money shall be saved, and that it would not be done if pressure were not being put upon them—if he will not take steps to prevent the meticulous examination of the details of average household expenditure? Surely we are going too far. How long have hon. Members opposite prided themselves about the Englishman's home being his castle, that it is sacrosanct, and that no one must cross his threshold and examine into his personal affairs?

Not infrequently I have heard remarks, not always spoken very audibly, when speeches have been made similar to that which I am making. I recently heard an hon. Member on the back benches remark "sob stuff" when my right hon. Friend the Leader of the Opposition was speaking. I wonder if hon. Members who sometimes use those words when we are addressing the House understand the significance of the phrases which they are using. I know that they speak sarcastically of the point of view that I have tried to put. They speak very sarcastically of the point of view often put by my right hon. Friend. But is it not true—and I wish to ask the House with all earnestness—in spite of so many obvious social injustices and cruelties, that the one thing which has distinguished our civilisation from all the civilisatons of the past has been the growth and development of the humanitarianism of which we are justly proud. Is it not true that it is still the finest asset of our civilisation, and I ask the Minister if, in view of this fact, he will take steps to cancel the Order-in-Council of last autumn which instituted these iniquities being perpetrated upon large masses of the unemployed, and also withdraw the Bill and bring along in its place another Measure which will, between now and the return of those days of prosperity which every Member opposite is sure are coming, make adequate provision for the unemployed who have lost their statutory benefit.

Mr. O'CONNOR

I almost endorse the concluding phrases of the very eloquent speech of the hon. Member for Mansfield (Mr. C. Brown) and express the hope with him that we shall, at the earliest possible moment, have presented to Parliament a complete Bill for dealing with the whole of this subject. The only modicum of comfort many of us on this side of the House get from the Bill, the Second Reading of which we are discussing to-day, is the hope and belief fortified by the assurance of the Minister, that it will probably be the last Measure of its kind. I personally sincerely hope so. It is attempting to do something which is patently futile and which has broken down in practice. It is seeking to link together two features of our social order which cannot be linked—the insurance of people who enter into an insurance scheme, and the relief of people who have no connection with that scheme at all and are just as remote from the scheme, in fact, as if they had never been insured. Many of us on this side of the House hope that the Minister will do the very utmost he possibly can to expedite the day when that chaos of which he spoke on the last occasion will finally be resolved and removed. I confess that I am not quite as sanguine even after hearing the Minister the other day as I might otherwise have been, because my mind goes back over a long series of these Debates ever since 1927, when the transitional method was first introduced.

The whole system reminds me of nothing so much as the antics of the low comedian one used to see on the old music halls who created great delight by stooping to pick up his hat only to find that he kicked it in front of him, which usually ended in the audience rocking with delight. That is what Parliament is doing to-day in regard to these transitions. Year after year, six months after six months, they have been postponing the date when the watertight insurance scheme which has been forecast by generations of Ministries of Labour will come into operation and be self—supporting. We have, in the words of Neitsche, a transvaluation of values in regard to unemployment insurance. We have a system of permanent transitoriness or transitory permanence. The sooner we can get rid of every instance of the fiction which the Bill perpetuates when transitory beneficiaries can be paid through an insurance fund which ought to be self-supporting and get rid of that fictitious and ridiculous element of our unemployment insurance schemes the better. The Bill perpetuates in several respects all those elements of chaos and unfairness. By this Bill we are going to swell the existing loans of the Unemployment Insurance Fund.

Mr. HUDSON

No.

Mr. O'CONNOR

That is the meaning of the Bill as I understand it. Clause 2 of the Bill, unless I have misunderstood it, provides that any increase resulting from the operation of this Section in the sums payable into the Unemployment Fund under Article 8 of the said Order"— that is, the Order of last November— in respect of the cost of transitional payments and administrative expenses attributable to such payments shall be defrayed out of moneys provided by Parliament.

Sir H. BETTERTON

The explanation is that it is paid out of the Unemployment Insurance Fund and reimbursed by the State to the fund. It is really bookkeeping. It is not borrowing—we have stopped borrowing.

Mr. O'CONNOR

I am very much obliged to the Minister for making that point perfectly clear. Then that criticism does not apply, and we may congratulate ourselves that that artificial swelling of the fund which went on so continuously under the Labour Government is entirely at an end. [Interruption.] The hon. Member for Bridgeton (Mr. Maxton) has good cause to be satisfied with his success in this matter. We are used to receiving shocks from the Labour party, but now, both in the statement that was made the other day on behalf of the Labour party, and in the statement made by the hon. Member for Mansfield (Mr. C. Brown) this morning, it appears that the hon. Member for Bridgeton has been successful in imposing his views upon the Labour party, and I congratulate him upon his success. We were told the other day that it was the policy of the Labour party to abolish the means test, and now we have heard that it is the policy of the Labour party to substitute a non-contributory system. I think that if those two features come to be debated, the hon. Member for Bridgeton may feel very satisfied with the effect of his little organisation below the Gangway.

If I may proceed to deal with some of the continued and unsatisfactory features of the present method, one obvious fact stands out. As long as you continue to get this artificial linking of two groups of people who are not related at all, you cannot do justice to the standard beneficiaries. They are bound to be mulcted in excessive contributions. In other words, as long as we perpetuate the present system, the standard contributors, that is to say, people who are only casually unemployed, are contributing to what is nothing more or less than national relief, and they are contributing not directly, as they ought to do, through the national revenue, but specifically by an excessive contribution which they are making to the Unemployment Insurance Fund. Obviously, you cannot get any uniformity of administration as long as the present system of transitional benefit is maintained. The application of the means test must, as I said the other day, be as wide and variable as are the number and distribution of local authorities which have to administer it. Last, but not least, as long as the present system prevails, you cannot have any really effective control by the Ministry. I know that the Minister does all he can to achieve a certain amount of control and a certain amount of uniformity, but it is manifest that, except by the use of the most cumbrous and difficult machinery, he cannot have the control he ought to have over the local authorities in the administration of these very large sums of money.

12 noon.

I confess my disappointment that the postponement, with all its enormous disadvantages, of any reconstruction of insurance, so called, upon the lines many of us would like to see, involving, perhaps, graduated payments into insurance, certainly better benefits in the case of men who make only infrequent withdrawals from the Fund, possible even cash benefits, surrender values to augment health pensions later on—at the postponement of all that I do feel some regret, as it seems to be indicated that no radical overhaul is possible much before next year. I hope that when the Royal Commission has reported — obviously nothing much can be done until it has reported—the Minister will not feel that the Government are entitled to hold up consolidating legislation until the period next year when this Measure comes to expire, but that a general consolidating Act, covering the whole field of unemployment insurance, will be one of the very first Measures introduced by the Government during the Autumn Session.

From what I have said, my views as to what such a consolidating Measure ought to comprise will be obvious. It ought to include a watertight insurance scheme, which can be made a very attractive scheme to the regularly employed work-people of the country. It ought to be operated by a body which is free from party political pressure. The announcement which we heard from those benches the other day, and the belated conversion of the right hon. Gentleman the Leader of the Opposition to the principle of the abolition of the means test which will, no doubt, be followed by an equally belated conversion on the part of Mr. Greenwood in the course of the by-election now in progress—all these factors show that there is a party in the State which is not unprepared to adopt as its programme a policy which is nothing more or less than a policy of mass bribery.

Mr. LAWSON

You know something about that!

Mr. O'CONNOR

Yes, I have had ample opportunity of observing the policy of hon. Members opposite. For this reason, it is obvious that any permanent system should involve some detachment from a party political control. It should involve a separate scheme for national relief tin the interest of those whom we are discussing this morning, the transitional beneficiaries who, being outside insurance, should be dealt with by a different method altogether, whose cases should be reviewed in the most generous and sympathetic way, as, no doubt, they are by the public assistance committees in general, but subject to indications in the Act which sets them up as to the method by which the very difficult test of their means should be applied. I do not think that the House can contemplate the continuance for a day longer than is necessary of the kind of haphazard mixture of public assistance administration and national control which is going on at the present time. Parliament will have to define, within limits, the extent to which, for instance, ex-service men's pensions are taken into account, if at all, and the extent to which income arising from fixed assets and fixed savings is to be brought into account. But those are matters which, although one can contemplate their being considered in this haphazard and irregular way 'by public assistance committees all over the country at the present time, provided it is to continue only for a limited and definite period, one cannot contemplate that that irregular method of administration should be allowed to persist a day longer than is absolutely necessary.

Lastly, any consolidating Measure ought, obviously, to provide for some kind of regional administration by an official of the Government which shall ensure that the taxpayers' money is safeguarded and protected, and also that whatever body has the task of dealing with transitionals carries out its duties effectively and humanely, and also with due regard to the public purse. All this indicates that the Minister has a very difficult and momentous task to undertake, but he, at any rate can have this satisfaction, that if he does make a success of it, if he does carry through the consolidating and reorganising Measure which we all hope this Government will carry through, he will be re-establishing the insurance principle, he will be consolidating our social foundations, rescuing unemployment insurance from disgrace and discredit, and will be facing, probably, the largest domestic task which this country has got to face.

Mr. PARKINSON

One is pleased to learn that the hon. and learned Member for Nottingham Central (Mr. O'Connor) has doubts as to whether mass bribery is a necessary corollary of Parliamentary life. He has a perfect right to have these doubts because his party have made long and extensive experiments in that direction. One is also pleased to know that he has some doubts as to the administration of transitional payment. He has mentioned the question of pensions and other things. When we find some light percolating into a mind as brilliant as that of the hon. and learned Member it should become the object of the party to which he belongs to give fair consideration to the important questions which arise in connection with the means test. The Minister of Labour in his speech dealt with one or two important questions. He asked: what are we to do with those persons falling outside the scheme? There is only one thing to do, and that is to see that they do not suffer physically owing to the lack of the essentials of life. The hon. Member for Mansfield (Mr. C. Brown) said that where work could not be found maintenance should be given. That is a policy accepted by this House, and by the country generally. It is not the fault of the unemployed that they cannot get work. At least 99 per cent. of the people who are unemployed to-day would be delighted to have an opportunity of work in order to support themselves. Owing to present conditions it is impossible for them to get work, and we say that it is the duty of the State to see that they have the necessaries of life. They ought not to be regarded as social outcasts. The Minister of Labour has said: I offer this as an example of the perfectly chaotic state in which the law relating to unemployment insurance now is."— [OFFICIAL REPORT, 5th April, 1932; col. 26, Vol. 264.] That is a confession as to the condition of things at the moment. They cannot remain as they are, and the point is, are we going to continue them until the time suggested in this Bill? However chaotic the conditions may be, however bad they may be, the position can become much worse during the next 15 months. I do not propose to deal with the present condition of the law but to ask the Minister of Labour to introduce more humane conditions into the administration of the means test, and not to carry on for the next 15 months under the present conditions. Fseling throughout the country is very strong on this point, and no doubt hon. Members of every party in the House are being constantly troubled with complaints from their constituents. There is not a constituency in the country which is not faced with an unemployment problem, and the House will have to consider whether we are going to try and improve these conditions during the next 15 months or carry on in the same way as at present, irrespective of the sufferings of the people or the demoralising effect it has upon them.

Upon what basis are these payments to be made I Are we going to allow people to be examined in the most minutest detail as to their incomes? Are we going to allow the inquisition which has been taking place during the last six months to continue, or are we going to introduce a more humane policy which will give the unemployed the feeling that they are being dealt with in a manner compatible with the' standing of the British nation? Are we going to base these payments continuously on the poverty line? We must consider that point. If we are not going to base them on the poverty line, then they must be put upon a higher standard or these people will have to come down to a condition of life which is intolerable, and which will not afford them a reasonable existence. I suggest that the Minister would be wise to undertake a review not only of the methods of administration but also take into consideration the kind of examination to which these people are now subjected. There are many cases in which the Minister I am sure will agree the law has not been properly applied. The right hon. Gentleman is a humane man, one who would rather give something than inflict hardship upon any individual, and if he knew how these conditions were applied in some parts of the country I am sure he would do all he could to improve the position.

At the present moment the transitional payment is nothing more than forcing these people on to the Poor Law. Surely we have got beyond the stage when people who are really conscientious, honest and hard-working must be compelled to resort to the Poor Law in order to obtain the necessities of life. It is not only bad from the point of view of their physical and mental fitness, but it is breaking up family life. The Minister must have had cases brought to his notice where young men are leaving their homes simply because these payments are being taken from their parents, forcing them to live upon the income of their children. This point has been raised in the House on many occasions. We have many cases in industrial centres of young people who are leaving their homes rather than remain at home at the expense of the transitional payments of the father. That is something which cannot be contemplated by any Englishman. People who are in work at the moment do not receive wages sufficient to enable them to meet all the family requirements. If people are genuinely unemployed, if they are genuine workpeople, it is really unfair to force them to the poverty line and then call upon their own children to support them. It is really unfair that elderly people should have their payments stopped or cut in order to compel the younger people to keep them.

There are many cases in which one young man only in the home is at work. There are father, mother and sister, but on account of the money he is receiving as wages the transitional payments of the rest of the family are cut and he is compelled to turn over every penny he earns to the family; and then the family cannot live in anything like decent conditions. Many of these young people have ideals in life. I know cases of young people who are looking forward to getting married, but they have no opportunity of making preparations for that great event. The present policy is spreading poverty not only amongst the unemployed but amongst those people who are in work.

There is another point I should like to mention in connection with the younger section of the workless community, and that is the demoralising effect which this policy is having upon the young of our nation from 16 to 20 years of age. They are driven about the country; they are workless; they are miserable; they do not know what to do to spend their time in 'anything like a beneficial manner. They are driven to demoralisation. I have here two statements which have been made this week by men of very high standing, and I do not think anyone would criticise what they say. They are both from the Liverpool area. One is from Mr. Hemmerde, the Recorder of Liverpool, 'and the other from Canon Raven, of Liverpool Cathedral. They deplore the demoralisation of our young people. Mr. Hemmerde referred to cases of dishonesty among young people between 16 and 21 at the Liverpool Quarter Sessions. He said: It is a disquieting feature that most of the offences are committed by juvenile adults previously unknown to the police. It is important that the public should realise what is one of the worst features of society today—the fact that. I am afraid, largely owing to the difficulty of obtaining regular employment, young men are getting out of hand, and there is a large increase in juvenile crime. Canon Raven, Chancellor of Liverpool Cathedral, said this week: If you send a boy or girl away from school, carefully trained, prepared with ideals of service, as our schools are certainly doing, and then let them discover that, year after year, they are not wanted at all in the world, and that those capacities are rusted and ruined, they will inevitably turn, first to sulky revolt, and then, I am afraid, to those evils which Satan still finds for idle hands to do. I know myself well enough to be quite sure that if I had been in the position, when I left college, in which multitudes of our youngsters find themselves, I should have been either an expert in crime or else in Communism. Those are statements made by two very responsible people who know about what they are speaking. They are people who are entitled to express their opinions, and such opinions ought to be taken into consideration by the Government, and particularly by the Minister of Labour. The younger people between 16 and 21 have very little on which to live. They drift from bad to worse, and eventually we find them, as has been stated in these quotations. I want at this point to ask a question. Are we as a nation, or are the Government as a National Government, treating these unemployed people fairly? I do not think they are being fairly treated at all. There are many ways in which their burdens could be lessened and their lives made brighter. Under present conditions they are being handed over body and soul to the Poor Law of this country, to the committee before which they have to appear, and they have no opportunity whatever of being represented by anyone. Anyone who knows much about the unemployed of this country, and the working classes in particular, knows that they shirk examinations of this kind. They have never been accustomed to anything like it, and when they have to appear before the assistance committee they are very shy and nervous. In the case of the court of referees, they are allowed to take with them a friend or a member of their organisation, or someone who will be able to state their case, but in the case of the public assistance committees they are not allowed to take anyone with them to help them. As a result many of their statements are misconstrued and the decisions given are probably misapplied.

The next point we have to consider is, can the Government produce something better than the present system? I think they can. From statements made in this House the Government believe that we have already turned the dark corner of the financial position. If that is so, surely this is the class of individual who ought to be relieved first. The Government ought to help those who are really down and out, the submerged. These people have no opportunity of getting employment and no opportunity of providing all that is required by their children. I do not believe that the sum of money asked for in this Bill will be sufficient to meet the requirements of the unemployed. It will certainly not be sufficient to meet the needs. But whether the Minister is prepared to go any further I do not know.

In districts like my own people are being thrown on the Poor Law, and there are many districts like it, districts which are becoming derelict. In Wigan we have coal mining, engineering works and cotton mills. There are mills in Wigan which have not turned a wheel for seven or eight years. We have only one colliery working at the moment and practically no engineering work at all. It has been a depressed area for a long time. Yet we find that a large number of our people are being handed over to the Poor Law authorities for transitional payment. I am not saying that we are very much worse off than other places. Probably we are better off than some. But at the same time very much could be done to alleviate the condition under which so many of our people are living. Taking the country as a whole, hundreds of thousands of genuinely unemployed men and women have been handed over to the Poor Law and compelled to apply for Poor Law relief. That is not the right thing to do. It may have been a matter of expediency, the easiest way out of the difficulty. But at least the work of relief should have been carried on in connection with the unemployment insurance offices, instead of the claims being referred to the Poor Law authorities. The amount of benefit granted is entirely decided by the Poor Law authority and not by the Employment Exchange or the court of referees.

That is one of the things to which we strongly object. We want to relieve the hardships of these people. I am sure it is possible for a nation like ours to rise to a higher standard of treatment than this. With the amount of relief granted it is impossible for the unemployed to keep themselves physically fit or to do what they ought to do for their children. A large number of workers in the heavy industries would not be able to follow regular employment to-day, if it were offered to them, because of their poor physical condition, because of the drain on their strength in the last few years. I wish to do away first of all with the very tight inquisition which is applied to these people when they seek transitional payment. Secondly, I want to bring to the notice of the Minister that something more should be done with regard to the pensions of ex-service men and blind persons and the compensation payments of people who have been injured in the mines or the workshops, and that there should be a modification of the way in which savings are taken into account.

Much has been said about the ex-service man's pension. I would like to put in a plea for the people who are receiving compensation on account of injuries received in their employment. They are certainly war pensioners from the industrial point of view. A large number of them will never again get employment. There are the partially disabled men, some without an arm, some without a leg, some with internal injuries, some with injuries that are visible and ethers with injuries that are invisible. The compensation payments received for these injuries ought not to be taken into calculation at all, because they are simply payments for reduced capacity caused by actions over which they have had no control. Those are things which should be taken into consideration. These people might be treated more on the lines of National Health Insurance, in which case I understand at least the first 7s. 6d. is overlooked altogether.

If the National Government think that they are going to build up a reputation in this manner which will bring them a continuance of the support they received in. October last, I am sure they are mistaken. Certainly they cannot do so and meet the needs of the country. If they are trying to save £10,000,000 a year out of the lives of the poorest of the people and, at the same time, trying to build up such reputation as I have suggested, they will not succeed in both efforts. To save money at the expense of people who at the present time have scarcely any of the comforts of ordinary existence, is the wrong way to proceed. Reference has been made to the manner in which the money is going to be applied, should the Government have a balance in the next Budget. I appeal to the House in such circumstances not to consider relieving people who can manage very well as they are, but to give some relief to people who cannot possibly carry on under existing conditions.

I believe that something like 300,000 people have been refused benefit under the means test and that is the kind of thing which is creating trouble in many parts of the country. Some committees refused to apply the means test but the Ministry by some means have persuaded them to carry on this work. We contend that in pauperising the unemployed the Government are throwing on to the local ratepayers a burden which ought to be a national responsibility, and, at. the same time, they are throwing on to poor people a burden which those poor people cannot bear. What must be the thoughts of a parent who sees his children underfed, being compelled to go to the schools in a mental and physical condition which is far from conducive to getting the best out of education? These children are being deprived of the elements upon which are built up physical and mental powers. It is no use appealing to the Minister to withdraw the Bill, but I ask him to widen the interpretation of the duty of the public assistance committees in this matter, and also to widen the scope of the Bill as regards the amount of money for which he is asking, in order that these people may be treated in a rather better manner. As the Bill stands, it is, in effect, a refusal of the chance to build up in the child life of our nation that strength of character which is so necessary.

Now that the financial position of the country is improving, I appeal to the Government to do something to relieve the conditions which I have tried to indicate among these poor people. Had it been a case of war these people would have been maintained in fitness and kept on the best of everything. But this is an economic war. We know that everybody is suffering more or less, but the poorest of the poor are suffering more heavily than anyone else. We appeal to the Government to lift the whole business out of the slough of the Poor Law. The very words "Poor Law" have a detrimental effect upon our people which makes them shirk doing what they would otherwise do, and had this matter remained within the terms of unemployment insurance, we would not have had those difficulties which have been experienced and we would be on the road to giving some small feeling of happiness and security to a large number of people who to-day seem to have no hope at all.

12.30 p.m.

Captain FRASER

I venture to think that there is an extreme confusion of thought in the minds of some of the speakers on the Opposition side. The hon. Member for Wigan (Mr. Parkinson) has made an eloquent plea for those who cannot adequately sustain themselves and their children and no one can fail to sympathise with him in his desire to help such people. But the very fact that he cites those classes of persons as being the poorest of the poor suggests that there must be some way of defining them. How are you to know whether a person is one of the poorest of the poor or not unless you look into his means? How are you to know whether or not he has the amount necessary to maintain his children properly and send them to school in a healthy condition unless you look into his means? It seems to me that the very plea which is being made that a particular section who are in need shall be relieved of their need, necessarily argues that you must inquire into that need. Then we are told by other speakers that, possibly, the whole system of contributions should be abandoned. But if contributions were abandoned, the only shred of entitlement to payment without inquiry would be gone. Therefore it seems to me that there is a confusion of thought of this matter which requires to be resolved, and one can only hope that the essays to which we have listened to-day, and which I have no doubt will soon be repeated in election addresses elsewhere, do not represent the permanent considered policy of the Labour party.

The hon. Member for Wigan made the point that these inquiries were foreign to the nature of our working men and women; that they were not accustomed to such inquiries, and, he suggested, that in themselves the inquiries inflicted great hardship because working men and women had difficulty in answering before these committees. That is not so. Long before the State had anything to do with providing for the unemployed the very trade unions which were set up by the friends of hon. and right hon. Gentlemen opposite had means tests and inquiries and took pains to see that the right man got the money. The more pains you take to see that the right man gets the money, the more money you can give to the right man. It is contended that a humanitarian outlook and a proper attitude towards the economical administration are incompatible. I do not think they are. I think it is only by economical administration that you can be sure that the right people get the maximum of what you can afford.

In regard to the narrow limits of the Bill I certainly hope that the Government will not have to disappoint us and come back again for another Bill like this. The Parliamentary Secretary expressed the hope, as so many hon. Gentlemen at that Box have expressed a similar hope before, that this would be the last time a temporary patchwork Measure dealing with this subject would be brought to the House. Certainly, we have reason to believe that this Government is in a stronger position than the last Government to carry out a great reform. Certainly, the electors gave them a mandate to take the long view, and, if need be, to impose temporary hardships and economies in their endeavour to give the country and industry a chance of bringing back employment to our people. But I think when we are asked to give a Second Reading to this patchwork Measure, which merely seeks to continue the present transitional payments for a year or so, we ought to have very definite assurances that some of the matters which we would like to have seen incorporated in such a Bill are under consideration and will be given thought by the Government. Reference has been made to the disabled soldier and his special position. The method by which his case is dealt with under the transitional payments system will be, or may be, continued for a year under the Bill. We want a positive assurance that that and other matters will be dealt with without undue delay.

It grieves many of us to think that the pensions which these men receive in respect of their own peculiar disabilities, pensions which are something relating to themselves alone, may be held by public assistance committees to be available for the maintenance of the members of their families. We are, I think, entitled to ask for an assurance on that matter, upon which the Minister of Labour has already done a good deal and in relation to which he has already told the House that at the earliest opportunity he will seek to incorporate some relief for these men in legislation, that this temporary period will be used to give consideration to it. I recall that when the 1927 Act was in Committee of this House I moved an Amendment, which was accepted by the then Minister of Labour, which led to the disabled soldier being allowed to qualify for standard benefit if he only had 10 payments to his credit instead of 30. That had the effect of keeping him outside this Bill. I hope that that point will be considered and that that favourable position which he was then granted will be retained for him.

I associate myself with the points made by my hon. and learned Friend the Member for Central Nottingham (Mr. O'Connor), who pleaded that there should be a greater degree of uniformity in administration throughout the country. I do not like to contemplate that anything like the lack of uniformity in administration could possibly continue until June, 1933, that is proposed in this Bill, and while I am sure that we can rely upon Ministers doing their best to expedite consideration of their scheme of reform, it must not be forgotten that that scheme will be extraordinarily widespread and that consideration will have to be given in it not merely to standard benefit and transitional payment, but also to the very Poor Law itself. There is so much to be got through that I hope the Minister will assure us that already the necessary inquiries within his office are being made and machinery set up to deal with the matter. I am sure that this House would be very impatient if anything in the nature of temporary legislation was brought to it in June of next year. I ask the Minister if he will give an assurance that some of these matters—and I refer particularly to the case of disabled ex- service men, about whom the British Legion have made representations to him and whose case has been put before the Royal Commission—will be given special consideration during the ensuing months, so that statutory recognition may be given to the fact, as I see it, that their pension, or at any rate some part of it, is intended for their personal use and comfort and not for their maintenance.

Mr. LECKIE

I would like to congratulate the Parliamentary Secretary on the very able way in which he proposed the Second Reading of the Bill. He showed conclusively that there was really no alternative to the introduction of this Bill, and he showed quite clearly that the National Government are in no way responsible for the delay in dealing with this matter in a comprehensive manner, and that any responsibility for that delay lies with the previous Labour Government, who, instead of dealing with the matter comprehensively when they had the opportunity, appointed a Royal Commission to inquire into the whole question, feeling pretty confident that when the Commission were able to report they themselves would not be on the Front Bench. The hon. Member for Mansfield (Mr. C. Brown) referred to the credit of the State and wanted a definition of that term. There are some things that are rather difficult to define in simple language, but I think everyone recognises that at the end of August last the credit of the State had been reduced to a minus point; and the Lord President of the Council was, I think, amply justified the other day in claiming that that was the situation when the National Government took office, but that the situation had been completely changed and the credit of the State fully restored.

I feel sympathy with a great deal that has been said this morning with regard to this Measure. I represent a constituency where there is, and has been, unfortunately, a terrible amount of unemployment, which is quite undeserved, over a long period, and I would like to pay tribute to the unemployed for the brave and stoical way in which they are bearing their burden, in my district especially. I cannot close my eyes to the dissatisfaction which exists in connection with the application and administration of the means test. I agree with a great deal that the hon. Member for Wigan (Mr. Parkinson) said about it, but I find that it is not the means test which is objected to by working people, because in my experience—and I am in very close touch with them—they realise that a means test was absolutely necessary. They felt that it was very unfair that people had been drawing unemployment pay where there was a great deal of money going into the home and where the people were really not requiring it. Therefore, they were quite satisfied, as they showed by their votes, with the decision to put up a means test, but they do complain about the too rigid application of that means test.

In so far as I can see, in South Staffordshire there seems to be very little dissatisfaction with the local administration of these matters. The public assistance committees, to my own knowledge, are administering the provisions as fairly as they possibly can, and I know that they are most sympathetic and deal with the genuinely unemployed in a very considerate way, but I think the weakness in the case is the indefiniteness of the regulations, which undoubtedly renders discrepancies and anomalies inevitable. These anomalies were referred to in a resolution which was passed by the Walsall Public Assistance Committee recently, and which was forwarded to the Minister. In the reply which he gave me just before the Easter Recess, he told me that he had no power to issue instructions to authorities as suggested in that resolution. That may be so, but I cannot but think that the Minister could give more useful advice and guidance than he has done up to the present; and I would like to join in the appeal made from the Front Opposition Bench for further consideration of the regulations and circulars which have been sent out. Surely the Minister could draw up model scales or methods of assessing the means test and thus assist the smooth running of the provision. Surely that is not beyond the possibilities of the case, and it would be a great help indeed if it were done.

I have been specially approached by some of my constituents to bring influence to bear on the Minister to amend the Act. That, of course, does not seem practicable at the moment, but if the Minister would deal with these matters on the lines that I have suggested, many of the difficulties and a great deal of the dissatisfaction which have undoubtedly arisen would be removed. As I said, the unemployed are splendid, and they will bear much, provided they understand that their sacrifices are equitable as between man and man, but there are cases which arouse a great deal of dissatisfaction, and it is that which is causing the ill-feeling.

An hon. Member opposite referred to one of the points that I was going to bring forward with regard to a parent. There are sons in work who are leaving home in order to enable their mother or father to get transitional payments. That is a very undesirable thing. I know in my own constituency that it is being done again and again. I know that in some cases when a man is living in a house which is owned by himself, the value of the house is not taken into account, yet in the case of a man's savings the interest he gets is taken into account. There is a very strong feeling that it is unfair to take a disablement pension into full account in settling a man's relief. Another complaint is that after 26 weeks unemployment a worker is put on transitional payment, although he has been insured right from the very beginning and has never drawn any benefit. That certainly is very hard lines and some efforts ought to be made to meet it. I have been specially asked by the public assistance committee of Walsall to bring before the House the hardships of certain army reservists in connection with the means test. It is well known that their pay comes in quarterly, yet the weekly amount is taken into account and deductions are made accordingly, although the man does not receive his money until the end of the quarter. That trouble could be met by the reservist pay being given weekly instead of quarterly, but that is a matter for the War Office. It is certainly a great hardship that such a deduction should be made always in advance of the actual payment.

I listened with great interest to the speech of the hon. and learned Member for Central Nottingham (Mr. O'Connor), but I did not follow his arguments completely. I agree that it is very desirable that there should be a thoroughly water-tight insurance scheme and I hope that it will be evolved when the matter is considered in connec- tion with the comprehensive question. The hon. and learned Member seemed to visualise a position where, after a watertight insurance scheme has been set up, if there was any poverty arising from prolonged unemployment the people would have to go to the Poor Law.

Mr. O'CONNOR

I did not intend to suggest that. What I suggested was that there should be a system of national relief, separate and independent of the Poor Law, centrally administered all over the country.

Mr. LECKIE

I apologise to the hon. and learned Member. That was the point that I was going to make. It is very unfair that the permanent unemployment caused by the depression of industry should be placed upon the local rates, and I hope that any Measure to be introduced will provide for a national treatment of the question. I hope that the Royal Commission report will not be so long delayed as some Members of the Opposition seem to imagine and that when it does come to light all sections of the House, irrespective of party, will co-operate in order to make the Bill a full and permanent settlement of the greatest problem we have to face in this country.

Mr. MAXTON

I do not want to delay the House in a discussion of this Measure, which I described on Thursday as one of secondary importance. It is a very secondary and very trivial Measure, but we on the Opposition side realise that it has to be passed, miserable as it is. Therefore, our task is to aid the Government in getting it passed as quickly as possible. The hon. Member for Walsall (Mr. Leckie), at the beginning of his speech, made the case for the mean treatment of the unemployed in the last six months on the ground that last August this country was in serious financial peril, and he congratulated the Lord President of the Council on being able to declare that we are now in better circumstances. I would like to deal with that point. The reason for establishing the means test and imposing the cuts on unemployment benefit was not as the hon. Member for St. Pancras, North (Captain Fraser) suggested, that we might get the right man in order to give him more money. The reason why the means test and the cuts in unemployment pay were adopted was because the nation got into a state of hysteria about its financial condition. The Government of the day had been made to believe that the whole thing was going to crash. [Interruption.] My hon. Friend the Member for East Ham, North (Lieut.-Colonel Mayhew), says that I am pretty near it. My views are not those of the rest of the House. A mistake was made by the late Labour Government at that period. If it was going to crash, they ought to have said, as Socialists, "Well, this is the day we have been waiting for for about 20 years." But when they were advised of the coming crash of the capitalist system, they said: "We dare not let it go. We must cling to it for all we are worth." Our Socialist system is for happier men than we are, and our Socialist State is to be created for men—[Interruption.] No. I was not going to say that. It is going to be created by men, men who mean business, and men who are not playing with their political faith, but who regard it as a real and definite thing. They accepted the view that the system was nearly crashing, as I believe it will crash within measurable time, because I do not think that anything that we are doing now will do more than postpone the inevitable act.

The hon. Member for Mansfield (Mr. C. Brown) suggested that the new slogan of the National Government should be: "Let the foreigners run British industry." Certainly, the Conservatives deserved that gibe, because they are wailing in the most pitiable way for capitalists of all nations to come into this country to run industries of one kind or another for the benefit of the nation. That they applaud. If so, that is all to the good. I am a good internationalist, too, but I do not go round on to platforms and say, "We are the boys of the bulldog breed. We are better than anyone else in the world. We can run our own industries and do not need any help from the foreigners." Let hon. Members make up their minds what they are going to be, whether they are going to be narrow jingoes or internationalists. They have great faith in the capacity of the foreigners to do these things. If I could see any foreign nation that was making a bigger success of its own industry than we do, I might say that this great last hope of Conservatism that foreigners would revive British industry would have some foundation, but when we find the foreigners on their own pitch one does not see them doing it any better than, Britain has been doing it, up to now [An HON. MEMBER: "What about the Soviet?"] That is a fortunate interruption, because while the Soviet are financially solvent, while they are without unemployment, while they have their men and women actively engaged in the industrial life of the nation, and while they believe in the future of the country as nobody here does, I do not stand here and say that they are achieving that success because they are Russians and foreigners; I am quite satisfied that Britons can do it., and will do it, when they are prepared to adopt the same system as the Russian nation. It is not the failure or the success of nationalities, but the failure or success of a system for which we have endeavoured to stand in this House. That is what hon. Members above the Gangway formerly stood for, and, although the hon. Member for Central Nottingham (Mr. O'Connor) congratulated me this morning on having brought them round to my point of view, they have come back to their own. If this nation was on the point of collapse last August, does the hon. Member for Walsall, or anybody else, seriously suggest that it was what the unemployed were getting that brought the nation to that position? That was the whole campaign that came from those benches.

1.0 p.m.

The hon. Member for Central Nottingham suggested that to go to the electors and say that you propose to do so and so for the unemployed is mass bribery. The unemployed have been used in this House as a device by political parties in turn either to raise the forces of their own party or to discredit the position of the other party. During those months when the Labour Government were in office the campaign went on steadily from those benches and in the Press in order to make out that the financial difficulties of this nation were wholly and solely due to the fact that the unemployed were being fed. A debt of £100,000,000 had been built up over a period of something like 12 years on the Unemployment Insurance Fund, and the story was that if this debt got any bigger, or if it was not speedily diminished, the whole national fabric would collapse. No busi- ness man believes that this nation was in its financial difficulties because the unemployed were owing £100,000,000 to the Insurance Fund. If we can carry an £8,000,000,000 War Debt, we can carry a debt of £100,000,000 for the unemployed. The reason for the campaign was merely to discredit the Government that was in power at that time, and to discredit them at the very point on which their power had been built up, namely, their promise to the poor to fight for the poor. The campaign was mean in spirit and indecent, and the surrender of the Labour Government to that campaign was cowardly and treacherous. They decided to set up an inter-party committee to discuss this matter. The proceedings of that committee are wrapped in mystery. The six hon. Members of the Rouse on the committee thought it consistent with their public duty to keep all the rest of us whom they were representing in complete ignorance of what took place.

The PARLIAMENTARY SECRETARY to the MINISTRY of HEALTH (Mr. Ernest Brown)

That is not so. I was a member of the committee, and I challenged the late leader of the Labour party, Mr. Henderson, to allow the minutes to be published. There was no objection on our part. It was he who objected to the minutes being published, not us. I did that in September last.

Mr. MAXTON

While the Labour Government were in?

Mr. BROWN

No, as soon as they went across. We were willing for the minutes to be published; we had no objection whatever.

Mr. MAXTON

I should think it would have been very easy to get the present Prime Minister—

Mr. BROWN

The hon. Member knows that the Prime Minister is not able to (10 it without the consent of Mr. Henderson or the other Labour party leaders.

Mr. LAWSON

All the parties.

Mr. BROWN

The only people who objected were the Labour party.

Mr. LANSBURY

That will not wash.

Mr. MAXTON

I forget who was the lady who threw the apple of discord, but I do not wish to cause any trouble between the two Front Benches. I have no doubt that privately, through the usual channels, it can be arranged. The House should be informed precisely what took place inside that inter-party committee in reference to this unemployment question, because all that we know is that this great invention for settling the problem once and for all was scrapped and a Royal Commission took its place. We still await the Report of that Commission. The enthusiasm of the Minister of Labour for the Commission and its prospective Report—a commission set up by the Labour Government and its terms of reference, as he has emphasised, laid down by them—leads me to think that the Report will be a pretty sticky one so far as the unemployed are concerned. I have a shrewd suspicion that the legislation that is contemplated on the basis of that Report will be worse than the Report itself.

It is my business to use what power I have, either here or as an agitator in the country, to get the people of this country to resist any further inroads on the standards of life of the poorest of the poor. The thing that has stuck in my mind very forcibly is the desire that has been expressed that the unemployed should not be driven dawn to Poor Law tests and should not be treated as if they were paupers. That means to say that the paupers must be treated in a pretty rotten way just now. Paupers, as we call them, are just as much the victims of the social system as the unemployed. If the treatment is too bad for the transitional unemployed, then it is too bad for the ordinary poor, and I want the Government and the Leader of the House to say that something more fundamental should be undertaken than mere adjustments in unemployment insurance.

The hon. Member for Mansfield suggested the abolition of the contributory basis, and I think that is sound. That was the point of view of the Labour party in the past. The insurance idea as a means of covering a risk of this sort has always seemed to be out of place, but because the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) heard in 1906 or 1907 that they were doing something on those lines in Germany he decided that we must import the system. It was adopted here in 1910 or 1911 and we have had it ever since. But that is really not the way to deal with the problem. Quite obviously the responsibility for unemployment in this country does not rest either with the captains of industry or the workers. Surely it is obvious to all of us by now that the people responsible for unemployment in this land are those of us who are sitting here. To be quite frank about it, unemployment is the responsibility of the politicians, and why the captains of industry or the workers should be taxed every week in respect of a happening for which we are responsible is something which we cannot understand.

In urging the Minister to hasten along with his permanent solutions which are to take the place of this temporary Measure, I trust that he will not be content to rely solely on the report of a Commission appointed under duress, in a period of funk on the part of the late Labour Government, with terms of reference which are too narrow to enable one to tackle the problem of unemployment in a statesmanlike way. I give to him the advice I gave previously to the Prime Minister, who persistently neglected it, as he has constantly neglected all the good advice which I have given him—with results that are obvious now to the whole nation. I say tackle the whole problem. Start examining the problem not with the idea of how this nation is going to find work, but start with the idea of what is an intelligent living income for all the citizens of this nation. Then, having made up your mind as to what is a reasonable income for people at this period in the world's history, with powers of production such as we possess, then start to organise the national productive life so that everybody gets that income. That takes the problem on to an entirely different level from that suggested by the hon. and gallant Member for North St. Pancras. He wants us to peer into a person's means with the idea of giving that person as much money as possible. That is a new conception of social service. I would like to peer into a person's means in order to give him as much as possible, but hitherto the idea has always been to peer into them with the idea of giving him as little as possible.

I will tell the hon. and gallant Member how this means test worked out in a particular case, which I hope will appeal to him. There is a fine old gentleman in my Division who has a pension of something like 4s. 6d. a week—not a disablement pension, but a pension for service in the Army. He is just a good type of British soldier, such as comes out of the Army after serving his full term of service. We all know that after a man has served his country as a soldier he cannot get a really good job. He has no special skill, and employers regard him as fit only for unskilled jobs, such as those of a caretaker or watchman. He has a pension of 4s. 6½d. or something like that—it is not more than 5s. He used to get 15s. 3d. a week unemployment insurance benefit. He had no savings. The means test came along, imposed by the hon. and gallant Member for North St. Pancras, and resisted inadequately by me, and an examination was made into the resources of this old gentleman. It was decided that his 15s. 3d. from unemployment insurance with 4s. 6½d. as a service pension was too much. They did not take all his pension away, but he is now drawing 15s. 5½d. a week—he gets 2½d. more to remind him of the years he served in the Army for King and country!

Captain FRASER

I am sure the hon. Member does not wish to do me an injustice, but I doubt whether there is any justification in anything I said for him to charge me with neglect of the case of such a person. My general case was that it would be better for the unemployed if we managed affairs wisely. I would like to co-operate with the hon. Gentleman in managing the affairs of this country, because he is a realist, and he and I are agreed that the hon. Members above the Gangway managed so badly that not merely would his friend, this old gentleman of his, have had nothing, but the great majority of working-class people would have had nothing. It is to save them from that that we want wise administration, and I put it that wise administration involves some kind of means test.

Mr. MAXTON

My hon. and gallant Friend must have missed my point. I did not attempt to place responsibility on the Gentlemen above the Gangway in the late Labour Government for the financial collapse of this country, and nobody who was honest would attempt to do so. The position was that our system had got to the stage where it would not work, and the trivial part the late Labour Government played had absolutely nothing to do with that. Everyone knows that the late Labour Government failed in their duty to the working class, but they were not responsible for the inextricable difficulties into which the capitalist system has got. My hon. Friend need not worry to blame them for the state in which our steamship lines have got, for the fact that half the mines of the country are derelict, for the condition of the cotton trade of Lancashire, the wool industry of Yorkshire, or the Clyde shipbuilding industry. He knows that it is cheapjack stuff to say that the crisis of 1931 was one of the responsibilities of the late Labour Government. They never did anything wrong from the capitalist point of view. [Interruption.] As a Socialist, and as a spokesman of the working-class, I can bring bitter criticism against them for their neglect to help the poor people, but the capitalists of this country have no "grouse," not the faintest. The capitalists got from them many gifts and much assistance which they would not have got even from a Conservative Government.

Even with the help of the State the capitalist system got into inextricable difficulties, and now the hon. and gallant Member for St. Pancras says it is to be saved by looking into the means of the friend whom I mentioned. I will give his name and address, in case people imagine he is one of those fictitious persons whose cases are sometimes put forward by politicians. He is Robert Best, ex-soldier, 25, Pentland Place, Bridgeton, Glasgow. He gets 15s. 5½d. a week by the decision of the Conservative party of Great Britain, who always say that a grateful country should never forget its heroes. He gets 2½d. a week in recognition of his 20 years' service in His Majesty's Forces, defending his country against all foreign enemies. That brings the system down to a concrete case, and I do not believe that is the worst one.

I ask the right hon. Gentleman, in framing his legislation, to try to take a bigger view of his responsibility than any of his predecessors have done. I ask the Leader of the House to remember that, during the periods of years we have been working on this subject, we have followed all sorts of will-o'-the-wisps hoping that if the subject was left alone it would come out all right. I was shocked the other day at the Secretary of State for the Colonies refusing to take the responsibility in regard to those British people who are stranded in Australia. Originally, it was the Government's policy to send out our surplus population to Australia under an agreement made between the Government and the Dominions. Now the whole thing has collapsed. Those men and women are starving and yet the Government deny responsibility. At that time experts said that unemployment was confined to the North and the Midlands, that things were all right in the South, and that all that was required was to bring up miners from South Wales, and turn them into inferior butlers in London. It was said that all that was needed was a few transfers of the men from one district to another. I remember the right hon. Gentleman the Member for Tamworth (Sir A. Steel-Maitland) beaming over when he discovered this transfer business, and it took the wind out of the Opposition when they found that the solution spoken of consisted of giving jobs to a few men in London.

The policy adopted in the past to deal with the unemployed has been based mainly on the development of road schemes, and that was the line taken by the right hon. Member for Carnarvon Boroughs. That was the policy put forward to solve the unemployment problem. We have been 12 years on the job and we are still floundering in the mire. At the present day there are 6,000,000 people living from hand to mouth, and many of them are starving. It is an extraordinary thing that the hon. Member for Wigan (Mr. Parkinson) should talk about deterioration of the working classes. The extraordinary thing is that deterioration has not taken place, and the moral of the working classes has been maintained. The fact that they have done so well and survived so wonderfully is all the more reason why we should now take our responsibilities more seriously than we have done in the past.

Brigadier-General SPEARS

I should like to draw the attention of the House to just a couple of points. One is the case of a man willing to accept a day's work. In my constituency there may be individuals prepared to give an unemployed man a day's work and the man might be only too glad to accept it. The better the man the more anxious is he to avail himself of offers of employment. There is a distinct advantage to the public in men working even for a single day. The Unemployment Fund is benefited and it is also an advantage to the unemployed man who gets an additional stamp on his book. But there are some points which are very often overlooked; for instance, there is the question of the conditions under which a man takes on a day's work. When a man has been unemployed for a long time very often his hands become soft and it is no use putting that man on heavy work because his hands are not suitable for that job. So much so is this the case that one of the most difficult jobs of the nursing association of Carlisle is reconditioning the hands of men which have been torn to bits by a hard day's work which they were no longer used to. From that and other points of view, as for instance that of moral, it seems of immense importance that these men should have a chance of doing a day's work whenever it offers, but this is made very difficult by the regulations which are laid down with regard to doing a day's work.

The regulations provide that if a man does a day's work one-sixth of the determination of his family must be deducted. Suppose that man got 6s. for a day's work, if the determination of that family is 18s., 3s. is deducted. So he has done a day's work for 3s. If the family determination was higher still a man might not only do a day's work for nothing, but he might actually be penalised by a financial loss. I ask the Parliamentary Secretary to take that point into consideration. My suggestion is that one-sixth of the determination should be deducted only from that part of the allowance which is properly that of the man himself and not from the total family determination.

My second point, which has already been raised by other Members, concerns disability pensions. I have read carefully what my hon. Friend said on this subject the other day, but I cannot see any justification for the apprehension which he seems to have that the man himself would suffer if a fixed deduction were made in the ease of a disability pension. Supposing that it were statutory to deduct 7s. 6d. in respect of the disability pension, surely that would not in the least debar the public assistance committee from showing an intelligent understanding of the man's case when they were assessing the remainder of this sum. Many of us feel that the disability pension is not entirely a maintenance allowance. It is true that a man who, say, has lost an arm gets a disability pension for the purpose of enabling him to live, but that man is handicapped almost every hour of the day by the loss of his arm, and he suffers a good deal of pain. Surely that ought to be taken into consideration. Again, take the case of a man drawing a disability pension of £1 a week for the loss of a leg. Suppose that he has two sons, and that they are on transitional benefit. It surely is not just that the public should expect those two sons of his to live on the proceeds of their father's leg.

I believe I am right in saying that my hon. Friend wishes to keep the administration of the Act as much as possible in the hands of the public assistance committees—to keep it in local hands rather than making it more subject to legislation than he can help; and with that point of view I have every sympathy. I hope that, just because there are some bad public assistance committees, the good ones will not have to suffer. In my own constituency we have a public assistance committee and officials who deal with the cases of ex-service men with the greatest possible sympathy. From that point of view we are very fortunate indeed, for our public assistance committee not only administers the law with justice, but shows itself to be extremely fair and sympathetic to the unemployed.

1.30 p.m.

Mr. DINGLE FOOT

The Government will have realised, from the course of this Debate and of the Debate last Tuesday, that the acute alarm which is felt at the present position of unemployment is not confined to the Opposition benches, either below or above the Gangway. I do not think it is possible for anyone at the present time to represent an industrial constituency which is at the same time a necessitous area without realising the intense urgency of this question of dealing with the means test, and without being well aware that to a large number of his constituents this question seems to be of greater importance than all the other questions put together which are discussed in this House. This morning the Parliamentary Secretary said, quite rightly, that the Government could not introduce complicated legislation a few weeks before the Royal Commission's Report. I should like, however, to hear some explanation of the phrase "a few weeks," because on Tuesday the Minister promised us that the Government would legislate as soon as it could after it had received the report. I do not know whether it is possible for the Parliamentary Secretary to give me an answer to this question, but I should like to ask him whether there is really any chance of this legislation being introduced in the coming autumn when the House reassembles after the Recess? It is of the greatest importance to industrial districts to know whether the unemployed are likely to have to face another winter under the present conditions of unemployment relief. I should like to support the appeal made on Tuesday by the hon. Member for Stockton-on-Tees (Mr. Macmillan), and his plea for some form of interim legislation dealing with the means test before the final policy is decided upon after the Commission have delivered their report. The hon. Member dealt with four points, which must have been present to the mind of everyone who has thought about this question at all, but I should like to concentrate upon one of them, and that is the question of capital savings. I feel that the continuance of the means test as it is administered under the present regulations must have a disastrous effect on the attitude of the wage-earners of this country towards thrift and saving generally.

The principle that thrift should be encouraged, even among the poorest of the poor, was recognised by this House over a century ago. In the year 1817, this House considered the first Savings Bank Bill, and it inserted in that Bill a Clause providing that savings up to £30, if invested in a savings bank, should not be taken into account in the case of an application for Poor Law relief. Unfortunately, the Clause was struck out in another place, but that does not alter the fact that the House of Commons clearly recognised the principle as long ago as 1817. Would it not be possible to have something on those lines in dealing with the means test at the present time? I think it will be generally agreed that there is no respect in which there is so much difference between one area and another, and between one public assistance committee and another, as there is in regard to this question of dealing with capital savings. An example was given to me the other day in Lancashire, where a man had £80 saved up, and was told by his public assistance committee to go away and spend the whole of it before he could receive any transitional payment from them. Very strong representations were made to the committee in that case, and they were induced to revise their decision. But, while that was possible in one area, there are a great many areas in which it would never have been possible.

The effect of making a man spend, not a large amount, but in some cases quite a small amount of savings, must be obvious to every Member of the House. People who have had to spend their small savings must be saying to themselves, "What mugs we were to put by any money at all; we should have been just as well off if we had never saved a penny," and making up their minds never again to save money whatever their circumstances may be in the future. This view is supported by a certain amount of information which I have been able to obtain regarding the effect on savings banks in this country of the working of the means test. It has been the common experience in practically every district throughout England Scotland and Wales that a very large proportion of the small savings accounts of from £10 to £50 have been closed and the money has been taken out; anti I believe that, wherever the manager of the bank has made inquiries as to the reasons for these sudden and numerous withdrawals, they have been found to be due to fear of the means test. I have been told of one savings bank which had about 7,000 small depositors where, shortly after the test was instituted, in November, the manager received between 200 and 300 applications from persons who wanted to know whether the bank was going to give information to the public assistance committee. I heard of two cases of savings banks in Scotland which since November last, as compared with the corresponding period last year, suffered losses of £4,000 and £7,500 respectively, and in each case that difference is attributed almost entirely to the operation of the means test.

What is happening to the money? In same cases, of course, it is being spent. It is very natural that people should feel that they might as well spend it now so that they could afterwards say truthfully that they have no resources, and get the full rate of transitional payment. In other cases it is being hoarded in order that the owners shall not have to disclose it to the public assistance committee. In that case it is doing no good to anyone and, even though it may not be dissipated, you are discouraging the habit of banking and investment among the wage earners. After all, at this time, when heavy taxation and Death Duties are making so large an inroad on big fortunes, it is more than ever important that we should encourage the accumulations of small investors and working-class investors. At present it seems to me, whatever the principle of the means test—and I am not contesting the principle—its working is having precisely the opposite effect from that which we should desire. Would it not be possible to follow the example of the House of Commons of 1817 and to fix a certain point below which savings should not be taken into account at all by any public assistance committee? There is a large number of public assistance committees already which refuse to take savings into account up to £100. Would it not be possible to bring the less generous committees up to that standard, or even to go a little further, to £150 or £2,200? It would mean not only that you would have uniformity —and that is something which some of us regard as of very great importance—but that all those small deposits, which it has been the policy of every Government to encourage, would be placed out of danger from the working of the means test.

The hon. Member for Bridgeton (Mr. Maxton) referred to the last election. I am sorry he shares the passion of the rest of the Socialist party for postmortems on previous elections. I was one of those who at the last election had the very unpleasant task of going to a big industrial area where there were very large numbers out of work and advocating not only a cut in the rate of benefit, at any rate for the time being, but also the imposition of a means test. I said, like most other candidates supporting the National Government, that, although I believed it was necessary at the time to make some cut in that direction, as well as in other directions, it was not possible merely to place all the burden elsewhere and to make no economy in that direction at all. Nevertheless, I believed it should only be a temporary cut that was made and that, when the financial circumstances of the State improved, the first claim should be that of the unemployed. I think that is the line that was commonly taken in industrial areas by candidates supporting the National Government, and it was the view expressed during the election even by those who now sit on the Front Bench.

No private Member knows whether it will be possible in the coming Budget for the Chancellor of the Exchequer to do anything for the unemployed. If not, if it were possible to make some interim regulations with regard to the means test before the Government brings in its final legislation in order to ease it up in certain respects in regard to savings and disability pensions, or in some way like that, although it might not be very much more money in the pockets of the unemployed, at any rate, it would be an earnest of the Government's good faith and it would show that they are ready to do for the unemployed whatever our straitened circumstances may permit.

After all, you cannot deal with the problem of unemployment relief apart from the other questions of the day, and the unemployed are not only going to be affected by this Bill and the Bills we pass dealing with unemployment relief. They are also going to be affected by other legislation, and particularly, I am afraid, by recent legislation for which the Government, or a part of the Government, have been responsible. We have the wheat quota Bill and the tariff Bill, both admittedly designed to raise prices. After all, that is going to affect the unemployed as much as measures which we take directly dealing with unemployment relief. I hope I am pessimistic with regard to the results of those Measures, but it seems to me that, if you leave the means test without any alteration for some months to come, and if you have another winter with the present standard rate of benefit unaltered, and on top of that you have a rise in the cost, of the loaf and of other necessities, you are going to create in the industrial districts a very serious situation indeed, perhaps more serious than anything we have known in the last 10 years. You may reach the point when in an appreciable part of your industrial population you will find that they are a long way in arrears with their rent and are unable to buy sufficient fuel and clothing, and that they will be in a permanent state of malnutrition and under-nourishment. That seems to me to be the prospect that we may have to face during the coming winter, so I ask the Minister whether it is not possible, at least with regard to the means test, to have some interim regulations. We know how quickly the Parliamentary machine can be made to work when it is considered necessary, and I want to suggest to the Minister that this is a matter of very urgent necessity.

Mr. TINKER

This Debate has had many interesting points, and the last speaker has opened out probably a new vista altogether. I listened very carefully to him and tried to determine whether he was in favour of the means test or not. I think he is, but I should imagine, if the Minister told him to lay down a standard for the means test, he would not be able to do it. He spoke of penalising thrift and said the man who had invested money in a savings bank or the Post Office or in War Loan should have some recognition of his thrift. At what point? It would be difficult. The hon. Member would have to draw a line. It would be extremely difficult to do so from his argument this morning. I advise him to consider whether he cannot see his way not to act in the way the Liberal party seem to act every time but to determine one way or another.

Mr. DINGLE FOOT

I tried to point out that the local public assistance committees draw their own lines, and all I ask is that the State should fix a common line for all public assistance committees.

Mr. TINKER

That is the difficulty. If the hon. Member had to fix a line lie would find himself in a greater difficulty than ever. I had brought before me the case of a man who had £21 in the Cooperative Savings Bank. He was refused transitional payment. I wrote to the Minister of Labour and he informed me that he had considered the matter and could not interfere with the administration of the public assistance committee. Thus in that case the line was drawn at £21. After the man had been "knocked off" for a month, the authorities reconsidered the matter and the man again received payment. But he had lost a month. The Parliamentary Secretary who outlined the Bill made great play with the attitude of the Labour party. We are a party, and from time to time we have to consider our position. Everyone remembers the trouble which happened last August and the many conflicting statements as to what had happened in the Cabinet. Some Members who did not go over to the National Government had suggested that there should be some kind of means test. Probably in the difficulty which confronted them they might have said, "Well, to save the nation there must be a means test." The matter has been considered by the party from every angle. Some members advocated a means test. The same question was put to them as that which I have put to my hon. Friend, namely, Where would you draw the line? In strict logic a means test may be a good thing, but from the point of view of common sense and application it cannot be effective, and we of the Labour party say that we are not in favour of any means test at all and that it ought not to apply to the genuinely unemployed man or woman. If they come under the contributory unemployment insurance scheme—and the State by paying one-third of the contributions recognises the wisdom of giving something—we cannot debar them from benefit as long as they come within the category of genuinely unemployed. That is the decision of the Labour party at a full representative gathering, and let no more be said about something which happened in the past. I hope that hon. Members will recognise where the party stands from the point of view of the means test.

Mr. HUDSON

Does that mean that the party is in favour of no inquiry at all being made?

Mr. TINKER

Definitely, yes; that is what it means. I am entirely favourable to that and have been all the time. No one can object to the bringing in of the Bill. It is absolutely necessary because during the so-called transitional period something has to be done. The Bill is a little complicated, but the marginal note explains what is behind it when it says: Extension of period in respect of which transitional payments may be made in certain cases. In speaking about the examination of means and the payment of people who have means, hon. Members will find, if they go through the various stages when the Budget is put before us, that annuities are being given to certain persons who have never done anything for the State. They receive those annuities because they are the descendants of certain eminent men or women. If money can be given to those persons, there should not be an inquiry into the means of the genuinely unemployed man or woman. I advise hon. Members who wish to examine thrift and savings to press for the cutting off of some of those annuities.

An HON. MEMBER

Why did not your Government do it?

Mr. BATEY

Why have not your party done it?

Mr. TINKER

I agree that there were many things which we failed to do in the last Parliament, and I accept my share of the blame through having followed men who have now left us and gone over to the other side. That was why we did not adopt things which we ought to have adopted. As explained by the Minister, transitional payments were given from April, 1929, to April, 1930, from April, 1930, to April, 1931, and also again to November, but there was no question of any means test at that time. As was explained by the hon. Member this morning, applicants for unemployment benefit understood that it followed on continuously. That was the idea which we had too, and it is only since November, 1931, that we have had to contend with the question of the means test. It is the point at which the whole thing has gone wrong. We believe that the means test ought never to have been applied, and if the Bill is to renew the means test we hold a strong point of difference upon the matter. If economy means anything at all, it ought not to apply in the way it being applied in this connection. I will quote from the speech made by the Prime Minister on 19th March upon the question of the wise spending of money. I wish I could impress upon everybody that economy does not merely mean cutting expenditure. It means cutting down useless expenditure; expenditure that you cannot afford; expenditure when your income has been reduced. Those of us who can still spend ought to spend; spend wisely but spend courageously, unless, by pursuing a policy of irrational economy, me may, while believing we are doing our duty, be doing the whole community snore evil by adopting the stocking method of protecting capital rather than the business-like method of putting it freely at the disposal of labour so that it may fructify. If that means anything at all, the Prime Minister ought to be here this afternoon to listen to many of the remarks which have been made from all sides of the House concerning the way in which the means test is being applied. There are the cases mentioned by the hon. Member for Bridgeton (Mr. Maxton), and the hon. Member for Carlisle (Brigadier-General Spears), and by other Members on the opposite side, where public assistance committees are cutting down a large number of cases in a way that cannot by any means be called economy in the rightful sense. The Prime Minister ought to have been here to-day to impress upon the House that he does not agree with what has happened.

Mr. BATEY

He is never here.

Mr. TINKER

The right hon. Gentleman the Member for Tamworth (Sir A. Steel-Maitland) not long ago advocated the spending of money on the lines suggested by the Prime Minister, and I was amazed to hear him say that one of his proposals would be to carry on municipal dinners. That reminds me that at some time or other I have been invited to dinners, but when I receive an invitation to a public dinner I never attend because—

Mr. DEPUTY-SPEAKER (Captain Bourne)

The discussion has been very wide, but the hon. Member is now getting a very long way from the subject.

Mr. TINKER

It is rather unfortunate that there should have been a change in the occupant of the Chair. Mr. Speaker allowed us a fairly wide latitude on this point, and, after I have sat here all the morning, Mr. Deputy-Speaker tries to keep us within the limits of the Bill. I do not say that he is not right in doing so, though I have not the opportunity of dealing with this point. However, Sir, you are in charge of the House, and I am going to bow to your Ruling. I will at some other time get this off my chest.

Leaving the economy measures for the moment, I will deal with the question of the application of the means test. There is a point which has already been mentioned, and which I want the Minister to deal with. When a man goes before the court of referees he is allowed a representative, what is called his "friend," to state his case. When he went before the public assistance committee, up to recently that privilege or right was granted to him, but I am told that it is to be discontinued. I have had a letter sent to me from my constituency urging this point. It would appear that at Atherton, when a case comes before the public assistance committee, they have been told, by orders from Preston, the county area, that the public are not admitted, which means the exclusion of the friend to state the case. The Atherton Trades and Labour Council have lodged a protest which they have sent to me and to the authorities at Preston. I have tried to ascertain whether the Minister of Health is responsible, but am told that it passes to the Minister of Labour. I would, therefore, ask him this afternoon to give us a ruling on the point, because I claim that this is public money, and though this rule may apply, to what is called Poor Law relief, this is in a different category. The whole of this is public money paid to the Unemployment Fund and granted by the Exchequer, and if the right to be represented by a friend applies to the court of referees, it ought to apply to the public assistance committee.

This may be a slight grievance, but it is certainly very much felt by our people, because when they have had a friend with them they have been able, in many cases, to get better conditions, or, at least, they think they have. Every- one knows that when these men go before public bodies they seem to be tongue-tied, and many times confusion is taken to be a sign of guilt. I say that when these people appear before a court of referees or public assistance committee their confusion is not a sign of guilt, but is due to their feeling the case keenly and really not knowing what to say. I ask the representative of the Ministry of Labour to find out whether this point cannot be cleared up, and if the public assistance committees are really snaking use of a Poor Law rule, I hope that the Ministry of Labour will do all that they can to get this removed.

2.0 p.m.

I will conclude by expressing the hope that if the Budget is able to disclose any surplus, although we are passing the Bill to carry us on until June, 1933, it will not be outside the power of Parliament to say that better conditions shall be given to the unemployed. We are going to agree to the Bill to-day because there is no other way. It is essential and necessary, but I do not want the Government to think that, because we are agreeing to the Bill, we are acquiescing in this state of things continuing until June, 1933, because we are not, and we trust that any surplus at all will be used to benefit these poor people.

Mr. DENVILLE

I do not propose to go into all the details of the means test, but I would like to say something on behalf of the disabled soldier, sailor, and those women who served during the Great War. When I first came within the shadow of Big Ben as the representative of Newcastle-upon-Tyne I was taught my first lesson. On entering the corridor where hats and coats were hanging, I discovered on every hook a large piece of red tape. The moment I saw that, I said to myself: Abandon hope all ye who enter here. I realised that I was up against one of the curses of the House of Commons, but I do say that there are times when this red tape should be put on one side and common justice have a chance. The disabled soldier, who is receiving only disability pension, is a case in which common or ordinary justice should be given a chance, and red tape for the time should certainly be put on one side. Some time ago we were asked to make equal sacrifice. What is meant by equal sacrifice? During the War the greater sacrifice was made by those who went across to France and other countries, manned our vessels, kept our flag flying, and the roofs above our heads. Why should those men who did so much for us then be placed on the same level as those who stayed at home, who certainly did their bit to keep the flag flying, but made nothing like the sacrifice which was made by those men who went away.

Taking into consideration the sacrifices which those men then made, they should not be asked to make a sacrifice a second time. This nation, in its gratitude for the good work they did overseas, gave them what is commonly called blood money in the form of so much a week for a lost limb or for blindness, to enable them to meet life on equal terms with those who had stayed at home and retained their eyesight and limbs. This also applies to the case of those mentioned by my hon. Friend the Member for Chester-le-Street (Mr. Lawson). He referred to the compensation cases of men who lost limbs while working in ammunition works during the War. I say that to take these disability pensions into consideration is an insult to the Service, to the flag, to the nation, and to every Member of this House. I ask the Government to consider whether this is not a case in which to do a great right we might do a little wrong. Let us for a moment forget that there is such a thing as red tape and do something for these men and women in return for what they did for the nation. Great Britain is honoured and respected throughout the world not only because of its past history and great traditions but because in the British Empire justice, honour and humanity can always be found.

Mr. LAWSON

The Parliamentary Secretary who opened this Debate put a series of questions, as is his habit, in a somewhat Socratic manner. I propose to reply to some of them. When I made the declaration he quoted I was speaking with the full authority of the Labour party, and with the full authority of the masses behind that party throughout the country. And by this time, as a result of this test, I have no doubt that I was speaking with the full approval of a great mass of the citizens of the country outside the Labour party. We have heard references to mass bribery. I do not know whether any hon. Members of the Labour party are under any delusion as to the declaration I made, but I said before the election and I say now that the unemployment problem is bound up with so many interests that a declaration of the kind I made is not a vote-catching declaration at all. The last election showed clearly that a declaration of that kind does not catch votes, although it may appear on the surface to have that result. The Minister of Labour took area after area and showed that actually the Labour party had only a small proportion of the unemployed. Anyone who considers for a moment the problem of unemployment and the great interests involved will come to the conclusion that anyone who makes a declaration on the problem for the purpose of catching votes is very foolish.

I made the declaration on behalf of the Labour party on the ground of right, irrespective of its results. I have told hon. Members of my own party and hon. Members opposite that anyone who played down to the unemployed, in the sense of mere politics and policy, was very foolish; but from the point of view of right and justice the unemployed have a claim to better consideration than they are getting at the present moment. The strange thing is that if the Minister of Labour were to accept the pooled ideas of hon. Members who supported the Government there would be no means test at all. What is the position? Only this morning the Government have been asked to exclude from calculation the pensions of disabled soldiers and sailors, and the Reservists' pensions. They have also been asked to exclude old age pensions and compensation. One hon. Member who supports the Government has pointed out that thrift is being penalised. An appeal has been made by hon. Members behind the Government that income from a little money in the savings bank, or small houses, should be excluded from the calculation. If you take all these items together and total them up, items which hon. Members supporting the Government want excluded from the calculation, there is really nothing left to investigate. The fact is that if the Government accepted the proposals of their own supporters they might just as well do away with the means test altogether.

The case of a man with £600 invested has been mentioned. How many are there? There may be one case in a thousand. And you pauperise the great mass of the people in order to investigate one case. That is the real position. Quite frankly I approach this matter from quite a different angle from that of many hon. Members. I was interrupted when I said that the culture, learning and ease of the most comfortable classes in this country was largely drawn from the work of the humble toiler, and I was asked: what about the energies and abilities of the people who had made money? I replied then, as I reply now, that people in that position take a great deal more credit to themselves than they are entitled to claim. I am a miner by profession. I worked for 20 years in the pit. I could say that it has been my fortune by energy and by denying myself in certain ways to be in the House to-day, but I make no claim of that kind. I have worked beside men in the pit who were quite as intelligent as I am, equally good citizens and just as energetic, but they have been not quite so fortunate. Human values are all upside down. The great mass of unemployed are people of a high order of intelligence, and they are unemployed through no fault of their own, because of circumstances over which they have had no control whatever. They are placed in a position that no one regrets more than themselves. We have no right to play Bumble with men of that description, merely because it is said that one in a thousand has a certain amount of money at his disposal.

I make no apology for repeating the statement that if the appeals of supporters of the Government were pooled and carried to a logical conclusion they would tear to shreds any possible case for the means test. As was emphasised by my hon. Friend the Member for Bridgeton (Mr. Maxton), whatever chance the means test had of being operated and accepted in this country—if it ever had a chance—was torn to shreds once for all by the very conditions under which the principle itself was initiated. As I have said on previous occasions the test was not conceived in equity at all. The Parliamentary Secretary has said: "Why should we not investigate? Why should a man object to having his means investigated? It is a proper principle. Otherwise someone might take advantage of the system." But that is not the con- dition under which the test was initiated. The test was initiated in order to get £10,000,000 out of the poorer section of the community. There was never any other reason given for it at the time. Actual experience has shown how calamitous the test has been both to the people who have to submit to it, and to those who wish well to the local government machinery of this country. I asked the Minister recently to give me a list of the areas that had numbers of transitional cases. Here I would endorse the protest made by the hon. Member for Central Newcastle (Mr. Denville) regarding the failure of many Members to attend this Debate. There were only 16 Members in the House when the hon. Member was speaking.

Major the Marquess of TITCHFIELD

How many Labour Members were present?

Mr. LAWSON

More than half of them were Labour Members.

Marquess of TITCHFIELD

How many are present now?

Mr. LAWSON

In the list that the Minister gave me it was made clear that there were areas that hardly knew what unemployment was. I do not wonder that some of their representatives are never here during these Debates. There are numbers of areas that have no transitional people at all. The hon. Members for Wigan (Mr. Parkinson) and Leigh (Mr. Tinker) and myself, and others, have whole masses of people who for long periods have had no employment. I invite hon. Members to get the Ministry of Labour Gazette and to look up the Poor Law relief figures month after month and see how they have leaped up. Here are the figures of poor relief in December last. In West Ham it increased by 17 per 10,000 of population compared with the month before; at Gateshead it went up by 11 per 10,000; in Newcastle-on-Tyne by 25 per 10,000; in Sunderland by 23 per 10,000. Of the 47 areas 39 show an increase in the number relieved in. December as compared with November, and only seven show a decrease. I give these towns only as an instance. Hon. Members can take any month they like since the means test was applied, and it will show that the figures are increasing. The test has had the effect of pushing 150,000 people back upon the Poor Law. On behalf of the Labour party I repeat my previous statement regarding the means test. I would add that unless there is a big change in the methods of administration, by the time the Minister deals in a, Bill with the consolidation and overhauling of the insurance system, the great bulk of the local authorities of this country will agree with the declaration that I made in our last Debate.

Sir H. BETTERTON

This Debate has been four hours in progress and has extended over a very wide area. I do not propose to follow some of the speakers in covering the very wide range which they have covered because, as the Parliamentary Secretary has pointed out, this Bill has a very limited object. Its object is merely to provide that there shall be an extension for about 13 or 14 months of the period during which transitional payments may be made after April of this year. If there was not any bill a considerable number of those who are now receiving transitional payment would be cut off in the course of the next year. An hon. Member asked me to withdraw this Bill and introduce another, but clearly that would be impossible, because, unless we get the Bill by 15th April, then, from that date onwards, certain of those now in receipt of transitional payment would cease to get it. There is no question, therefore, as to the necessity for the Bill. That is common ground, and hon. Members opposite have indicated that they do not intend to divide against it.

Certain questions have been raised in the course of this Debate, however, about which I ought to say something. I have been asked, both in this discussion and in the previous discussion, whether the present position is going to be stabilised with regard to the cuts which were made last September, until June, 1933. One thing above all others which is quite clear is that you cannot deal with this question of cuts in isolation from the rest of the problem. In producing what, we hope, will ultimately be a permanent and comprehensive scheme, we must consider not merely the rights of the unemployed and the question of justice to the unemployed; we have also to consider the rights of those who are employed and the question of justice to those who are employed. We have to consider also the rights of the taxpayers and the ratepayers. Therefore, we cannot isolate this one question and deal with it separately.

I believe that we should be doing a grave injustice to the nation as a whole and to the unemployed themselves if we gave any countenance to the belief that there is any less reason now for rigid economy than there was last September. It is true that we have balanced the Budget and that the situation is incomparably better now than it was six months ago, and, in spite of what has been said by the hon. member for Chester-le-Street (Mr. Lawson) about the figures of those in employment which have increased, and the numbers of the unemployed which have been diminishing, I am afraid that he must resolutely and courageously face the fact that there has been an immense improvement in both those directions since we came into office. None the less, it would be wrong and misleading to contend that the need for rigid economy no longer exists. To the question of whether this position will necessarily be maintained as it is until June, 1933, I repeat the answer which I gave the other night to the hon. Member for Bridgeton (Mr. Maxton). We cannot and shall not attempt to deal by legislation with these matters until we have the Report of the Commission and when we get the Report we shall waste no time in dealing with the questions covered by that Report, and the sooner we can deal with them the better I shall be pleased.

Mr. MAXTON

Do I understand the right hon. Gentleman to say that legislation on this matter will be limited to the scope of the terms of reference of the Royal Commission and that there is no possibility of dealing with the whole matter in a bigger way?

2.30 p.m.

Sir H. BETTERTON

No, Sir, our object is to put this scheme on as lasting and a permanent basis as possible. We hope to get guidance and we know that we shall get guidance from the Report of the Royal Commission, but I cannot and do not pledge myself in advance to accept all the recommendations of a Report which has not been made and which I have not yet seen. None the less, as I say, I hope for and expect very valuable guidance from that Report when it does appear. What I have said, therefore, applies to the suggestions which were made in speeches like that of the hon. and gallant Member for North St. Pancras (Captain Fraser) and the hon. and learned Member for Central Nottingham (Mr. O'Connor).

The hon. and gallant Member for North St. Pancras dealt more particularly with bile question of disability pensions and that subject has also been mentioned by other hon. Gentlemen on both sides. I would again remind the House of the course which I myself took with regard to this question—a question, I know, of great interest to the House. A deputation from the British Legion came to me and at my suggestion they put their point of view in evidence before the Royal Commission and therefore that is one of the points which the Royal Commission is now considering, and which, of course, I shall consider when we get the report with their recommendations upon it. The question of savings is also being considered by the Royal Commission. Thrift is an admirable virtue; there is, indeed, no virtue more admirable and anything I can do to encourage thrift I will certainly do, but I would point out that thrift becomes of less value, that there is less quality in thrift, if the savings of those who have saved are maintained at a cost to the rest of the community. You cannot say that by taking into consideration in this connection certain kinds of savings you are necessarily impeaching the principle of thrift

This Debate I am bound to say has been conducted with less desire in any part of the House to make party capital than any Debate of the kind that I have ever heard. There have been speeches which I arm certain were inspired by a real desire to make some constructive contribution towards the object which we all have in view, and nothing that I am about to say will, I hope, destroy the tone of the Debate or introduce anything in the nature of partisan spirit. But in the course of this discussion and the discussion of two days ago two things have become perfectly clear. They are both points of deep significance. The first is that the official Labour party have now made it clear, beyond all question of doubt and in language which cannot be misunderstood, that they are, as the hon. Member for Chester-le-Street said, opposed to the means test in any shape or form. That statement has been accepted and adopted by the official Leader of the Opposition.

At this point I cannot refrain from joining in the chorus of congratulations to the hon. Member for Gorbals (Mr. Buchanan) and the hon. Gentlemen who sit beside him, because this will be regarded, and rightly regarded, as a great triumph for the hon. Gentlemen below the Gangway. They have, after all, merely obtained the reward which generally comes to those, both in this House and out of it, who know their own opinion, who stick to it, and who advocate courageously, a particular course of action even at a time when it may seem unpopular. Therefore, they are entitled to their reward, and I offer them my warm congratulations on having brought the official Labour Opposition to heel. The Debate has therefore made this point clear, that the official Labour Opposition are against the means test. I do not in the least complain that they have altered their opinion. They have just as much right to do that as anybody else.

Mr. LAWSON

There was not any alteration about it.

Sir H. BETTERTON

I do not, I say, complain that they have altered their opinion, but what is important is that we now know what their opinion is, and, knowing what their opinion is, we can deal with it. The second point which this Debate has made clear is that the official Labour Opposition are definitely against a contributory system. That is most important, because the Minister of Labour in the late Labour Government, speaking at this Box on behalf of the Labour Government, said: "We stand for and support a tripartite contributory system." That was also opposed by the hon. Member for Gorbals, who quite openly and frankly stated that he hated a contributory system and believed in something entirely different, but we now know clearly that the Labour party are, first of all, in favour of no test of any sort or kind, and, secondly, in favour of a non-contributory system.

Let me examine exactly what this means. The vital question which at once arises, when you decide that you are not in favour of a contributory system, is what a contributory system means. We are and always have been in favour of a system of contributory unemployment insurance, and, if that is so, it is better at once to realise the importance of the question of what the Insurance Fund can afford to pay; and the whole question of contributory insurance is at once prejudiced if the outgoings of the fund are in excess of its incomings. I would remind the House that, although we have stopped borrowing, as I explained to my hon. and learned Friend the Member for Central Nottingham, the outgoings from the fund are even now something between £200,000 and £250,000 a week more than the incomings. The first part of the terms of reference to the Royal Commission was a reference asking them to make suggestions and recommendations how the fund could be put on a self-supporting basis. That was a term of reference to which the hon. Member for Gorbals objected, but it was supported and indeed, I suppose, drafted by the Minister of Labour in the late Labour Government. Clearly we cannot make any alteration or any suggestion with regard to diminishing contributions or increasing benefits until we know exactly what the position is with regard to the self-supporting basis of the fund itself.

When we come to the other statement which has been made within the last few days, that the Labour party object to a means test of any sort or kind, I do not think the point could be put better than it was put by my hon. and gallant Friend the Member for North St. Pancras, who said that, so soon as the contributions test has gone, a test of means becomes absolutely essential. The reason for that is that you cannot, if you have a contributory system and if that be your policy, allow people to contribute towards benefits which they themselves get as a result of their contributions, and at the same time allow others, who have no insurance qualifications at all, to get the same benefits without any test at all as to whether they need them or not. That seems to me to put the matter quite simply and in a way which can be clearly understood.

It has been made clear by this discussion that the official Labour party stand beyond any doubt for what is in effect an indiscriminate dole. We, on the other hand, stand for a system of insurance. That is the issue before us, and we cannot, in our view, pay to people, without inquiring whether they need it or not, money which comes from the Exchequer with any more justification than we could pay money which comes from the rates to those who did not need it and get it from the public assistance authorities. This was exactly the issue which was before the electors only six months ago, and it is because the electors thought that it was unjust and unfair, not least to the contributors themselves, and to the great mass of the working-class population, that they decided by an overwhelming majority that they did not stand for indiscriminate relief. I have no doubt at all that that is one of the main reasons why, as the hon. Member for Chester-le-Street pointed out the other day, we stand in a relation of no fewer than 11 to one in numbers to the hon. Members opposite.

I am not going to quote the examples quoted by my hon. Friend the Parliamentary Secretary, although we have a great many of them, but we have examples of actual cases where people have been applying for and getting benefit who in fact are liable for Income Tax; and how can you ask small Income Taxpayers to pay a tax on their little incomes, a tax which may only be a few pounds a year, but which is a very serious thing for them, if at the same time they see people who are either substantially as well off as themselves, or perhaps in some cases better off than themselves, applying for and getting what is public relief, without inquiry as to their means? Really the whole thing is absolutely indefensible.

Mr. MAXTON

Is there any estimate of the numbers of persons who, having private incomes or being above the Income Tax level, proceed to the Employment Exchange every morning, sign the book, and go through all the inconveniences to which they are subjected, for the sake of drawing 15s. 3d.?

Sir H. BETTERTON

I am sorry that I cannot oblige the hon. Gentleman with the information that he wants, but I can assure him that there are such cases, and that there are a great many cases of those whose income is not substantially lower than that of others who are liable to Income Tax. The great advantage of these two Debates—I am certainly not complaining about them—is that we now know exactly where we stand in relation to the Opposition and their attitude towards the means test and the distribution of benefit. So far as we are concerned we shall do our utmost to see that the position is made clear in the country. I can assure hon. Members opposite that we shall not hesitate to point out in the country on every possible occasion that they stand for indiscriminate, unlimited and perpetual doles, and I have no doubt that when that fact becomes known, and we shall see that it does become known, there will be every chance that the verdict which the country gave, mainly upon this issue, last September, will be repeated.

Mr. BATEY

We have listened with interest to the speech of the Minister of Labour, and we have listened with very strong disapproval. He seems to have made the position worse than he made it last Tuesday. Last Tuesday he seemed to leave us completely in a fog regarding two or three important questions, and to-day he seems to have made matters worse, rather than clearing the fog away. Take the question of transitional payments. The impression that he gave us on Tuesday was that transitional payment will continue until June, 1933, and will then cease. He said that this Bill would be the last of its kind dealing with the question of transitional payments. Therefore, we are justified in assuming that in June, 1933, transitional payments will cease. That is not only an important statement for the Minister of Labour to have made but a very grave statement, because transitional payments are made to more than one-half of the unemployed.

The unemployed to-day number 2,500,000, and one-half of that number are in receipt of transitional payment. We are told that yin June, 1933, that huge army of unemployed will be faced with a complete stoppage of their transitional payment. What is the Minister going to do with that army of men when their transitional payments have ceased? It is not only a serious matter for these unemployed men but it is extremely serious and very grave for the local authorities in the distressed areas. Outdoor relief is increasing. The Minister boasted that the number of unemployed has decreased and that more people are starting work, but week by week in the distressed areas the local authorities are faced with increased payments in respect of the unemployed. Let me give a few facts for the administrative county of Durham, not including the boroughs, for the week ending the 5th March, 1932. In that period for ordinary cases of able-bodied relief there was paid £15,345 12s., an increase of £1,333 9s. 9d. over the same period of last year. The public assistance committee there report that outdoor relief, owing to the discontinuance of unemployment benefit, has reached the figure of £1,710 7s. 9d.

That is bad enough, but if we have to face in June, 1933, the complete cessation of unemployment benefit to the transitional payment cases, then the Government will have to do something to deal with the situation. They cannot stop transitional payments in 1933 and allow a big army of unemployed men simply to go upon the local authorities. There are only three ways in which they can deal with that big army of unemployed men, when they have stopped transitional payment. One is that they can shoot them, and then there would be an end of them. There would, however, be the wives and children left, and I scarcely think that the Minister of Labour would like to take that course.

Sir WILFRID SUGDEN

We are in England, not in Russia.

Mr. BATEY

The strange thing is that it is your party that is driving us to Russian methods. Has the Minister of Labour any hope of being able to find work for the 1,500,000 unemployed whose benefit he proposes to stop in June, 1933? On Tuesday he seemed to be chuckling when he said that there are 166,000 more people in employment this year than at this time last year; but it is not merely a question of 166,000 more being employed that we have to consider. We have to face the problem of dealing with 1,500,000 unemployed in June, 1933. Is there any hope of the Government being able to find work for them, or are the Government doing anything in order to find work for them? There is this to be said on behalf of the Labour Government, that they attempted to do what this Government are not trying to do. They did make some efforts to provide work for the unemployed. [Laughter.] Hon. Members may laugh, but may I quote a few facts.

Several of the Departments were lined up to deal with this question of finding work. The Overseas Trade Department, for instance, appointed trade missions which were sent to foreign countries and the Dominions to study the best means of extending the export of British goods. Was not that something? It may not have been something. I am not going to deal with the results. I am dealing with the desire and the action of the Labour Government. The desire to do what they possibly could for British export trade, was there. There was another thing that the Labour Government tried to do in order to find work. No sooner was the Labour Government appointed than the Lord Privy Seal said that he had approached the banks, and the central banks were prepared to come to the help of the Government.

Mr. SPEAKER

I do not think that this has very much to do with the Bill.

Mr. BATEY

It is because we are told that this is the last Bill to deal with transitional payments that I am trying to ask the Government to do something and to show that the Labour Government tried to find work.

Mr. SPEAKER

No doubt a very laudable object, but it has very little to do with this Bill.

3.0 p.m.

Mr. BATEY

There will be an opportunity to deal with the question of providing work later. I want to come to the question of the means test, because we understand from the Minister that it is to continue. As a matter of fact, he justified it. I am glad that the Labour party have made it perfectly clear, in spite of all that has been said about it, that they are opposed to the means test. I have been opposed to it from the first, and I am more than ever opposed to it now that I have seen it in working. When we were debating this question just before the Recess, I drew the attention of the House to a statement made by the Prime Minister. I repeat it to-day, because the Minister of Labour wants the House to believe that the National Government are in favour of the means test. I want to know where the Prime Minister stands on this question. He sits for a seat in the county of Durham, and he delivered a speech there on 30th January. [An HON. MEMBER: "What is the unemployment in that area?"] Ask the Prime Minister. There are collieries in that area that have not worked for years. When we are discussing a question like this the Prime Minister should be here. He never attends the Debates, and has not attended one for half-an-hour since the National Government came into existence. The Prime Minister made a definite promise on 30th January, when speaking at a little village called Thornby in his constituency, that steps would be taken to reconsider the means test. When I drew attention to that just before the Recess, the Parliamentary Secretary to the Ministry of Labour said: I have not had time to investigate that matter fully, but I understand that there was no actual promise made, and that the headlines in the paper to which the lion. Member was no doubt referring, and in other papers were apparently statements taken from their context. I am informed that the statement in the headlines is not to he found in the actual verbatim report." —[OFFICIAL REPORT, 23rd March, 1932; cols. 1133–4, Vol. 263.] I looked at the papers to see whether the Parliamentary Secretary was correct. I found in one of the daily papers a report with the heading in big black type, "Premier promises to revise means test."

The report stated: Mr. Ramsay MacDonald yesterday visited his constituency of Seaham for the first time since the General Election. In a reference to the means test he said that every honest and decent workman knew that the whole question had got to be reconsidered. If a better means could be found the Government was not opposed to doing it. There is the definite statement made by the Prime Minister that the means test would be reconsidered. We have had a statement to-day from the Minister of Labour that there is no hope of reconsidering it, and that the National Government were in favour of the means test continuing until June, 1933. The Minister says that he is just waiting for the report of the Royal Commission and that the Government will base their action upon it. Everybody knows that the Government cannot take action, even if the Commission reported to-morrow, until after the Autumn Recess.

Mr. BUCHANAN

They will be lucky if they do it.

Mr. BATEY

I have had too long an experience of Governments to know they can do it. When we come back after the Autumn Recess, we shall be faced with the decisions of the Imperial Conference at Ottawa. It is evident that the Government are passing this Bill to-day so that they will not have to deal with the question again until June, 1933. As sure as we are here to-day, no action will be taken until the expiry of this Bill in June, 1933, no matter when the Royal Commission reports. The Prime Minister's promise ought to have some weight with the Minister of Labour and the Lord President of the Council. So far there has been no reconsideration of the means test, and I want the Minister of Labour to ask the Prime Minister either to apologise for the statement he made to his constituency or to take steps to carry it into effect.

We have heard a good deal about military pensions being taken into consideration by public assistance committees in assessing the amount of transitional benefit to be paid. Last Saturday I met a man in my division who told me his wife got a needs pension for the loss of her son during the War, and that needs pension had been taken into consideration by the public assistance committee, who had awarded him ever so much less than the 15s. 3d. benefit. When the House was dealing with widows' pensions and old age pensions at 65 it was most definite in the view that needs pensions should not be taken into account, now the Government are going behind that view of the House and allowing needs pensions to be taken into account in the case of the unemployed. The Prime Minister made a statement regarding military pensions during the General Election. His attention was drawn to the action of certain public assistance committees and to a statement that military pensions would be taken into consideration, and these were the words he used in the very village which I mentioned a moment ago: There was a statement in a newspaper to-day to the effect that an unemployed man drawing a war pension for wounds or disablement will have his unemployment pay cut by the amount of his pension. I have taken the trouble to telephone this afternoon to the Ministry of Labour and they tell me that that is not correct. In spite of that statement these military pensions are taken into consideration. One of the most reactionary of the London evening papers was commenting on Wednesday upon the speech of the Minister of Labour in the House on Tuesday, and headed their leading article, in big black type, "How to end mass bribery." They said: Labour out of power hopes to get back by abolishing the means test. It is a bribe, and it illustrates very forcibly the evil influence in our public life of political control by unemployed people. When did it become an evil in our public life? Unemployed people are not the first to draw State benefit. We have been busy this week putting £6,000,000 into the pockets of the farmers and the landlords, and that has been done because they are the supporters of the Conservative party. The Government know that the only way of getting contributions for their political fund is by bribery. We have put an end to the sale of honours, but a party still has to get party funds, and it now obtains them by voting public money to its friends, as has been done this week. If it is bribery, if it is wrong, for the unemployed to have State money, there are a lot of other people who are in the same boat. The people who are receiving transitional payment are persons who have paid into the Unemployment Fund, and they must at once have standard benefit. It is not their fault that they have not been able to get more. It is the duty of the Government to deal with these matters.

Mr. BUCHANAN

I will not detain the House very long on this question, because my hon. Friend the Member for Bridgeton (Mr. Maxton) has expressed the views of the party with which I am associated. When the Minister of Labour speaks in this House he usually appears to be a very serious person, but I congratulate him to-day upon having added a certain amount of humour which formerly was lacking in his speeches. I do not know whether that was intentional or not, but in any case a portion of the right hon. Gentleman's speech was very humorous. As far as the right hon. Gentleman's criticisms of the Labour party are concerned, I am not going to enter into that, only to say that, in fairness to them and their movement, the Trades Union Congress General Council, which is an im- portant body in that movement, gave evidence before the Blanesburgh Committee advocating the abolition of the present system and the establishment of a non-contributory system.

Sir H. BETTERTON

The hon. Member is perfectly right. The Trades Union Congress—I think it was before the Royal Commission was appointed—did not stand for the contributory principle. What I was referring to was the definite statement of policy given by my predecessor.

Mr. BUCHANAN

What I wish to say is that the Labour movement, when I was actively associated with it, always stood for a non-contributory system, and they have never attempted to conceal that fact or to deny it. In fact, on almost every public occasion they have confirmed it. As far as I know, the Trades Union Congress have never receded from that position. I should like to correct the hon. Member for Spennymoor (Mr. Batey) on one point with regard to the means test. The hon. Member's attitude in regard to that test has never been in any doubt, but I think he is wrong on one point. The hon. Member for Spennymoor said when we were passing the Old Age Pensions Bill that needs pensions were not to be taken into account, but there, I think, he is wrong. I have a great deal to do with those pensions. When the hon. Member's late colleague who was the Member for West Bromwich held the office of Minister of Pensions we made an effort, to get this point altered. It was the custom when an old age pension was granted for some officer to come along and cut down the pension by the amount of the needs pension. That is beyond the shadow of a doubt.

I want to make a plea to the Minister in regard to the statement he made, that he cannot do anything until he receives the Report of the Royal Commission. Evidently that is a Cabinet decision, but I put it to him that he ought to carry out some reforms in the meantime. Reference has been made to the Prime Minister's statement about the administration of the means test. It may have been that the headlines gave an extra turn to what he said, but the important thing in connection with the speeches of Members of the Government—and the higher their position the greater is its importance—is not exactly what they say, but what they convey to the great mass, particularly, of poor people. What was the message that they conveyed then? I think it is agreed that the Prime Minister did not convey that he wanted to abolish the means test, and the hon. Member for Spennymoor has not claimed that he did. What he conveyed was that, if there were undue hardships or irksome things, the Minister, without waiting for the Commission, would apply himself to these things at once. I think that that is not an unfair interpretation of what he said. The Minister has made a definite and firm statement, and it is no use my hammering at him to withdraw it, but I would ask him to regard himself as bound in honour by the statements of the Prime Minister and of other Members of the Government, particularly the Home Secretary.

The Home Secretary, in addressing his constituents, said much the same as the Prime Minister, namely, that, if it were found that the means test were irksome, or involved anomalies which could not be defended, he would see that the Government, without waiting for the Commission, applied themselves to wiping out the maladministration or misinterpretations or wrong ways of doing it. That did not mean abolition, but that the Government would apply themselves to see that, where manifest injustice was being done it should be remedied. It is because I want the Minister to apply himself to this aspect of the matter that I have risen to make this speech. I had hoped that he would have accepted the view of my hon. Friend the Member for Bridgeton, and, if he had done so I should not have spoken. Like the hon. Member for Spennymoor, we want, if we cannot get all that we ask for, at least to get some little thing done for our people.

I want to point out one manifest injustice which occurs under the Act as it now stands, and which might be remedied. A man—and when, for the sake of brevity, I speak of a man, I include, of course, a woman—is entitled to 26 weeks' benefit in a given year. He draws his 26 weeks' benefit in that given year. Before he can come on to standard benefit again, he must get 10 subsequent stamps, and then, at the beginning of his new financial year, he goes on to standard benefit again, provided that he has had 30 stamps in two years. Take the case of a man who draws his 26 weeks' benefit, then gets 10 stamps, and at the beginning of his new year comes on to full benefit; and take the case of another man in the same year, who may work in that year 14 weeks, or even 24 weeks. He will then have 14 more stamps than the other man, but, because his 24 weeks' work dovetails into his 26 weeks of benefit and does not follow on afterwards, that man, although he has 14 more stamps than the other man, cannot get standard benefit at all until he has got 10 more stamps subsequently.

A case of this kind has recently come before me in my own district. A man whose benefit year ended a fortnight ago had drawn 26 weeks' benefit in that year, and had worked 24 weeks in that year. It happens that his firm is now shut down. He cannot get on to standard benefit until he gets 10 more stamps, while his neighbour gets on to standard benefit next week although he has 14 fewer stamps. There is manifest injustice. No one can defend it. Why cannot the right hon. Gentleman make it ten stamps in the year? That is to say, that a man who gets 10 stamps subsequently shall not be placed in a superior position to the man who gets 10 stamps during his 26 weeks. I am advising any number to do this. A man finishes drawing his 26 weeks four weeks before his benefit year is up. If he is wise, he does not draw 26 weeks. He stops at 25 weeks and five days, and then he does not sign at the Exchange for four weeks. Then he goes on at the beginning of the new year and draws 26 weeks. He does it legally. These men are entitled to use the law when it is on their side. Why should men have to do these things? They do them because the Act penalises them. In many cases the more work and the more stamps a man gets in a given year, the less benefit he draws in future.

It is obvious from the speech of the Minister of Labour, not to-day but the last time he spoke, that the Commission's report will be a very bad one. One can fairly intelligently anticipate the trend of thought from the questions that are put, and the line that the chairman takes will be the line that the Commission will take. One can see the drift by the form that the cross-examination takes. The Commission is going to be a bad Com- mission, and I have no doubt that already the Government are clearing the way to plant the responsibility on the Labour Government for the appointment of the Commission, its personnel, and its terms of reference. The Ministry will get their way with the overwhelming number of Members behind them, and terrible suffering will be inflicted upon the people. I do not ask the Minister to reverse his policy. But he should not shelter behind the Commission for at least minor purposes. Surely he can stop maladjustments now. Has he not some power to do so? I hope that it will not be this time next year before he does anything. I have applied myself to the major maladjustment, but there are other maladjustments, and if he cannot give us anything decent in other directions, I ask him at least to see that the balance is held fairly as between one unemployed man and another. I ask that the man who secures benefit shall continue still to secure it, and that his unfortunate brother should also be treated in an equitable fashion. I trust that the right hon. Gentleman will apply himself to those maladjustments.

The MINISTER of HEALTH (Sir Hilton Young)

I only intervene for a moment in order to make an immediate response to the appeal which has been made by the hon. Member for Gorbals (Mr. Buchanan). With regard to the words contained in the speech of the Prime Minister to his constituents at Seaham—although I have not the words before me at the moment—I think that the interpretation put upon them by the hon. Member for Gorbals was an accurate one. The Prime Minister, if I remember rightly, said—and it is the interpretation also of the hon. Member—that if in the course of administration any notorious hardships were discovered it must be the immediate business of the Administration to consider possible alternative methods by which they could be removed, and, adopting the words to which the hon. Member has just alluded, if maladjustments arose, that those maladjustments should also be removed. I assure the hon. Member that the undertaking then given, that it is the immediate business of the Administration to consider such matters as those with a view to finding an immediate remedy, has been fulfilled from day to day, and neither my right hon. Friend the Minister of Labour, nor myself, acting as it were as agent in this matter and responsible for the public assistance organisation of the country, look upon ourselves as in any way relieved from this duty by way of a postponement of the date of the report of the Royal Commission. On the contrary, that process is a continuous one from day to day.

3.30 p.m.

It is inevitable in the course of so widespread and so important an administration as that, and one with so many novelties in its character, and in the hands of so many different local authorities, that there should he at first maladjustments of the sort to which the bon. Member has referred. It is regarded by us as our task immediately to remove those maladjustments. An account has been given to the House of the practical method to be pursued in their removal. There was difficulty at first; o wing to the inevitable lack of knowledge in one district of what might be done in other districts, and the remedy is the spread of knowledge between the districts. That can be obtained in two practical ways. The first is by consultation in conference between the authorities, and the second is by the advice and information which can be supplied to the authorities of each area by those who have the best knowledge of what is going on in all areas, namely, the inspectors of the Ministry of Health. Therefore, in cases, where it is found necessary to deal with such maladjustment s as those referred to, a conference will be called of all the parties concerned in local government in the district. In that way the responsible authorities will be able to put their heads together, and, as a result of consultation, remove the maladjustments. I believe that we can have a complete confidence in the success of this method in getting rid of the anomalies and maladjustments which it is desirable should be removed.

Mr. BUCHANAN

The point I raised was in connection with standard benefits.

Sir H. YOUNG

That is hardly a question for discussion on this Bill. But, on the merits, there would be a true cause of complaint if an unnecessary hardship should be left unremedied pending the report of the Royal Commission. There could be no excuse for delay of that sort, and, as such cases appear, they will be dealt with, and I have made arrangements for the most effective way of dealing with them and removing them. From the first conference, involving the important North-Eastern area, I believe we shall obtain most valuable results. I trust that the House will see that the undertaking given by the Prime Minister is being literally fulfilled. I hope that the House will agree that the discussion to-day has been a very full one, and will now give a Second Reading to the Bill.

Mr. MAXTON

The right hon. Gentleman tells us about what is being done administratively to ease cases of hardship, and we accept that, but there are things being done legally under the existing legislation which create obvious hardships. This is the point which my hon. Friend and I want to get at: Are the Government quite decided that where an adjustment requires only some minor bit of legislation, it will be impossible to consider it, even though unopposed, in advance of the report of the Royal Commission? The case put by my hon. Friend is a case in point, where a thing is being done quite legally but obviously quite unjustly. A very small Measure would meet it. Is such a Measure possible?

Sir H. YOUNG

I am afraid that the only reply which I can possibly give to the hon. Member is that, however much substance there may be in the point raised by him, it would not do to proceed by legislation piecemeal on this great subject, and as the matter is to be dealt with in a general Measure, any legislative action must be taken when the opportunity occurs on the report of the Royal Commission. But I wish it to be clearly understood that no administrative hardship or administrative anomaly which can be removed under the existing law will be left unremedied.

Question put, and agreed to.

Bill read a Second time.

Bill committed to a Committee of the Whole House for Monday next.—[Captain A. Hudson.]