HC Deb 30 November 1933 vol 283 cc1073-186

Order for Second Reading read.

The MINISTER of LABOUR (Sir Henry Betterton)

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

3.48 p.m.

I regard this as one of the most comprehensive and constructive pieces of social legislation which have been introduced into this House for many generations. I am well aware that it may be criticised in detail. You cannot indeed have a Bill containing 60 Clauses and seven or eight Schedules without expecting criticism, but, taking it as a whole, I believe that in its main structure it represents the logical, the inevitable, and the obvious development of the policy which has been pursued by every party in this country during the last 30 years. It has long been recognised by all parties in the House, and by all sections of the House, that the Poor Law is not the appropriate medium of relief for able-bodied industrial workers who are unemployed through causes quite outside their own control, and who are anxious to work, as the overwhelming majority of them are.

The first statutory recognition of this fact, as I see the picture, was in 1911 when in the first Unemployment Insurance Bill the State became a contributor to a joint scheme of compulsory insurance. Under that scheme something like 2,500,000 persons were included, and I believe that the action which was taken in 1911, for which I think perhaps the right hon. Gentleman the Member for Epping (Mr. Churchill), the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George), and the present Lord Buxton were primarily responsible, has proved of incalculable value to this country. Let me remind the House that that policy was adopted in a time of what may be described as abounding prosperity, but in the days of adversity that followed who will be found to deny that its service has been infinite? There are those in other countries who for years have derided and mocked and scoffed. Now in their bewilderment and perplexity they are hastily improvising an imitation of our scheme.

Let me proceed to the next milestone. The War intervened. During the War unemployment was non-existent and among the many and terrible problems which we had to face then, unemployment was not one of them. The story of the short-lived boom after the War is familiar to everybody. In 1920, before the boom had exhausted itself, there was a great extension of the scope of the insurance scheme and under this revised and renewed system something like 11,000,000 persons were brought in. That scheme provided, quite properly, for a qualifying number of contributions before benefit could be obtained. But long before these new contributors had a chance of making their contributions we had entered into what has proved to be the greatest industrial depression in our history. The Government of the day were faced with an increase of unemployment which was unprecedented both in its suddenness and in its severity. They had nothing to guide them except the experience of former depressions which were far less serious. They had, it is true, the advice of economists, who were generally wrong then, and, as far as I can judge, are usually wrong now, but they had nothing else to help them.

No insurance system which could have been devised could have supported so intolerable a strain so soon after its inception. The Government of the day adopted a course which other successive Governments up to the present Government adopted, a course which has been much criticised and which violated every insurance principle. They instituted what was known as uncovenanted benefit. It was known as uncovenanted benefit because it had no covenant or contract to support it. What it meant was that a man got benefit in advance of his qualifying contributions. I am bound in candour to say that had I in 1920 been in a position of responsibility, and had it been my duty to advise the Government of the day as to what course they should take, believing that the depression was but temporary I should have probably taken exactly the same course as was taken by the Government then. But there is another reason. As things then stood the only alternative was the Poor Law, and I believe it would have been utterly repugnant to public sentiment that, in the circumstances I have described, those who had not qualified for benefit, including thousands of ex-service men, should have been thrown straight on to the Poor Law.

I do not propose to trace the details of subsequent developments. Extended benefit succeeded uncovenanted benefit and transitional benefit succeeded extended benefit. All these methods had the one feature in common that for many years we were paying as of right vast sums of money to those who had no insurance qualifications. The first recognition of the essential difference between payments made in accordance with the principles of insurance and payments made without regard to contributions was made in 1930 by the Labour Government, when they—quite rightly as I think—threw the whole cost of transitional benefit on the Exchequer and removed it as a charge to be borne by the Insurance Fund. They did it for two reasons. They did it, first, so far as I can judge, and I think this must be obvious, in an attempt to preserve the insurance principle; and, secondly, to arrest the growth of the debt which was rapidly approaching an amount equal to the whole annual income of the fund. With the subsequent increase of the debt there arose a situation, which, we were officially warned at the time, threatened the financial stability of the country. The amount of the debt of the fund increased between February, 1930, and September, 1931, by £65,000,000, while during the same period the Exchequer paid no less than £37,000,000 in respect of transitional benefit.

The position, therefore, that we found in September, 1931, when the National Government took charge, was a bankrupt fund loaded with a debt which at that time was more than double the annual income of the fund. We found also a system under which transitional benefit was paid regardless of their need to persons who had no claim to insurance benefit because they had not paid the qualifying contributions. Moreover, it was paid without a limit of time at fixed rates. Finally there was in existence a Poor Law system, based on. the Act of Elizabeth, which was the only resort for able-bodied unemployed persons whose ordinary occupations were uninsured, and it was the resort, too, of many young men and women who since leaving school had had no opportunity of getting into an insured industry. I need not refer in detail to the measures that were taken in 1931. I would, however, remind the House that as a temporary measure the administration of a test of need was placed in the hands of the local authorities. Since then we have had the advantage of a very careful review by the Royal Commission on Unemployment Insurance, and I should like to express what I have expressed before, my appreciation of the infinite trouble, care and time which every member of that commission devoted to the very difficult task they had in hand.

The Report of the Commission brought us face to face with what I may describe as a double problem. The first part of the problem is how to restore the credit and stability of the Insurance Fund. This is absolutely necessary if you are to retain the insurance principle. The second part of the problem is how to provide for those who have never had an insurance qualification, or, if they once had it, have lost it by the exhaustion of their rights to benefit. I approach these questions with confidence because I am convinced that a country which faced up to its difficulties and problems as we faced up to ours two years ago has a great industrial future. I face the problem, believe me, without any feeling of complacency, because I know quite well there must he many men now who have, perhaps, passed the meridian of life who will find it increasingly difficult to obtain work in the occupations in which they have spent their lives. I know, too, there must be, and there are, many of the younger men suffering prolonged periods of involuntary idleness who, however willing, may be physically unable to avail themselves of opportunities of employment when employment comes to them. For a third reason, I believe there is no greater tragedy than the spectacle of children who have neither employment nor occupation, and who are thus prejudiced from the very start in the battle of life. May I say also—and I do not think the House will misunderstand me—I have faced this problem with a very deep and real sense of personal responsibility, for this reason. We on this side of the House have an immense majority. Hon. Members on the other side are comparatively few. That, it seems to me, places an especial responsibility on anyone in my position who is proposing a Measure which will affect, for good or ill, millions of people in this country.

The complexity and the difficulty of devising an adequate system of unemployment relief are recognised by everybody. It is not the slightest use burking those difficulties. They have often been burked in the past, but I do claim that this Bill not only faces them but tackles them in a courageous and practical manner. The Bill is based on the fundamental principle to which I have already referred, that there should be, on the one hand, a contributory insurance scheme covering as much of the field as possible, and that outside insurance the State should assume a general responsibility for the relief of the able-bodied industrial unemployed. In the application of this principle it is the aim of the Bill that the insurance scheme should cover as many persons as possible, consistent, of course, with solvency, thus reducing to the lowest possible figure the number of those who have to prove need. The Bill, therefore, inevitably and naturally falls into two parts. The first is insurance, and the second assistance to those outside insurance. Each of these two parts—insurance and assistance—is based on certain broad principles Which, I hope, will be equally acceptable to the House. I do not propose, and I do not suppose the House would expect me, to deal in detail at this stage with a Measure of this complexity, but we shall have, and rightly, a prolonged discussion in Committee, and, so far as I am concerned, I shall welcome and consider any constructive proposals which will enable me to establish a permanent scheme on a sound basis.

Therefore, if I may be allowed to do so, I will deal rather with broad principles than with minute and intricate details. First of all, let me put to the House the three broad principles on which Part I—insurance—is based, and afterwards I will put to the House the three broad principles on which the assistance side is based. First of all, with regard to insurance. It is based on these three principles:

  1. 1. That the scheme should be financed by contributions from the workers, employers and the State:
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  3. 2. That benefit should be dependent upon contributions;
  4. 3. That the scheme should be maintained on a solvent and self-supporting basis.
The first principle is, as I have just mentioned, that the scheme should be financed by contributions from the workers, employers and the State. In coming to that conclusion, I have not overlooked the various alternatives which have been put forward by responsible people, but I am satisfied and in this matter I have the support of many independent observers—that the ordinary independent industrial worker would be tile first to protest against the abandonment of the contributory principle. What the great majority of workpeople want is a greater measure of economic security. It is the final justification of the insurances scheme against all its critics that in the difficult years since the War it has brought that security to millions of homes. Under an insurance scheme, an insured person has the knowledge that he is protected first of all against the ordinary risks of unemployment, and that, without regard at all to his own savings or his own resources, he has a right to a fixed payment for a substantial period. A scheme which can make this provision, in spite of all the trials and tribulations of the last 13 years, has surely something to commend it. It is very significant—and I confess that when I asked for and obtained these figures, they surprised me—that in a year like last year, a year of heavy unemployment, the records show that out of 5,000,000 insured workers who experience unemployment at one time or another in the course of a year, over 4,000,000 qualify for insurance benefit on losing their employment. A scheme which does so much, must obviously go a long way towards removing that anxiety which a wage-earner is bound to feel at the risk of losing his employment. In taking this view, that the insurance scheme should be continued, I am supported by the action of the last Government. In setting up the Royal Commission their terms of reference were: To inquire into the provisions and working of the Unemployment Insurance scheme and to make recommendations with regard to—
  1. 1. Its future scope, the provisions which it should contain and the means by which it may be made solvent and self-supporting;
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  3. 2. The arrangements which should be made outside the scheme for the unemployed who are capable and available for work."
That is all I will say at this moment on the principle of contributory insurance.

The second principle I laid down was that benefit should be dependent upon contributions. It is surely an essential feature of an insurance scheme at least to provide a minimum benefit in return for the payment of a qualifying number of contributions. The Bill makes no change at all in the provision whereby an insured person who has paid 30 contributions in the last two years is qualified for a minimum—I emphasise the word "minimum"—period of benefit of 26 weeks. What we propose to do is to extend that period of 26 weeks to the advantage of the good contributor. In September, 1931, when the National Government took office, the excess of expenditure over income on the ordinary insurance account was at the rate of £60,000,000 a year. I am happy to say that at the present time, following the improvement in recent months, and, I think I may fairly say, due to the measures which have been. taken by the National Government, the income would exceed expenditure by about £8,500,000 a year, on a live register of 2,500,000.

In regard to the live register of 2,500,000, I want to make it perfectly clear at the outset that I believe that our prospects now are brighter than they have been for many years past, and that we may face the future with greater confidence. At the same time, I remember the experience of other Ministers of Labour who have one after another based their estimates upon expectations which have not been realised. While, as I say, I believe that conditions will improve, no one can tell what the state of world trade may be in the future, and I do not think I should be carrying out my duty as custodian and trustee of this fund unless I took all possible precautions against contingencies which cannot be foreseen. In spite, therefore, of my belief that improvement will continue, I have based the finances upon this very large figure of 2,500,000. I may be criticised for excessive prudence, but I trust, at any rate, I shall escape the charge of approving doubtful finance. The rates of contributions and benefits, remain the same. After allowing for the cost of adminis- tration and the charge in respect of accumulated debt which is to be amortised, there is an estimated net balance of income over expenditure of about £8,500,000, on this live register of 2,500,000.

I have considered. as I was bound to do, most anxiously how in the best interests of all concerned this balance should be used, and my conclusion is that the right course is to reintroduce the principle of relating the period of benefit to contributions, and to extend the period for persons with the best industrial record beyond the present limit of 26 weeks. In extending the period of benefit, I have had in my mind the following considerations: A uniform limit of 26 weeks was necessary in the crisis of September, 1931. Now that we have achieved a position where the income exceeds expenditure, which is an abnormal experience to anyone concerned in unemployment insurance, it seems to me a sound principle that the worker with the better record should have an extended period of benefit. At present there is no discrimination at all between the man who has made many claims on the Fund and the man who is making his first claim to benefit after a prolonged period of continuous employment. We propose, therefore, to extend this minimum period of 26 weeks in the following way.

Looking over the past five years, we propose to give an advantage, up to a possible 26 weeks, to the man who has a good record. If a man during the previous five years has paid all the contributions that he could, which would be 260, and has drawn no benefit, he will be entitled to 26 weeks benefit in addition to the 26 weeks which he will get as a minimum. Where his record is not so good, that is where he has had some benefit and his contributions have not been the full number he might have paid, he will get something less, something between 52 and 26 weeks benefit, according to the state of his balance-sheet. It is estimated that of the persons who make claims to benefit in the course of a year—these are very startling figures—no fewer than 690,000 men and 100,000 women will, under this rule, qualify for some extension of the period of 26 weeks. If we consider the position at any point of time in the year, it is estimated that the average number of persons in receipt of insurance benefit on a particular day will be increased by about 167,000. That is, at any particular date there will be 167,000 more persons entitled to benefit and 167,000 fewer persons will be subjected to a needs test.

The third principle I stated just now was that the scheme should be maintained on a solvent and self-supporting basis. The Bill not only puts the insurance scheme on a sound financial basis for the immediate future but also establishes machinery to enable it, to be kept solvent in the future. The Royal Commission made a very striking observation on this question of the solvency of the Fund. They attributed the methods of financing the scheme which were adopted with disastrous results by successive Governments partly to the unjustified optimism with which the level of unemployment was regarded, and partly—and this is significant—to the fact that throughout the currency of the unemployment insurance scheme the only alternative form of assistance for able-bodied unemployed workers has been the Poor Law. Part II of the Bill will remove, I hope, any further justification for ignoring the principles of insurance on the latter ground. I am concerned for the moment to consider the Commission's criticism that successive Governments made changes in the scheme which were determined less by the careful balancing of anticipated claims and revenue than by a desire to find the politically easiest way of providing relief for the unemployed. I have quoted that from paragraph 202 of the Commission's Report. The remedy recommended by the Royal Commission for this undue optimism of politicians is that which we have adopted in the Bill. Under Clause 17 it is proposed to constitute an Unemployment Insurance Statutory Committee, whose duty it will be to report to the Government once a year, or more often if necessary, on the financial position of the Fund and to make recommendations. If this Measure passes there will no longer be any excuse for any one to be under any misconception as to the financial position of the Fund. But if the Bill stopped just there it would still be open, I suppose, to the Minister of Labour or the Government to say, "Oh, but the Statutory Committee has taken too pessimistic a view of the situation, or too optimistic a view." We have introduced such safeguards as are practicable to avoid that eventuality. The Minister will be required to place before both Houses of Parliament a draft Order making such amendments in the Acts as are duly recommended by the Committee, or, if the Committee's recommendations are not adopted, substituting such amendments as will have substantially the same effect on the finances of the Fund.

The main reason for making these alterations by Order and not by legislation is this. It may be necessary, on the one hand, to take steps to restore the solvency of the Fund at once, if any unforeseen contingency should arise. On the other hand, the machinery will enable us to give the benefit of an accruing surplus to the contributors without delay, should there be a surplus. N o change—and in this respect the privileges and position of the House of Commons are amply safeguarded—may be made by Order except by an Affirmative Resolution of each House, so that Parliament will have a full opportunity to consider the changes in the interests of the contributors to the fund and the beneficiaries will thus be fully protected.

The other duty of the Committee is that contained in Clause 20. The Committee are required as soon as possible to make such proposals as seem to them practicable for the insurance against unemployment of persons engaged in argiculture. The possibility of extending insurance to agriculture has been considered most carefully. I have gone into it myself with my advisers. The real obstacles to insuring agriculture are set out and dealt with in full in the report of the Royal Commission. They call attention, in particular, to the lack of information on the extent of unemployment in agriculture, to the differences between England and Scotland in the conditions of employment in agriculture—what is known as the six-monthly hiring principle is much more widely adopted in Scotland—and to the administrative difficulties, particularly in obtaining evidence of unemployment and ascertaining the true relationship of employers and workers living together on a farm. That last difficulty is a very real one. Germany found just that difficulty in defining the true relationship between employer and worker on a farm. Germany insured agricultural workers, but this year cut out agriculture from the insurance scheme. The Germans found that there was a regular system of transferring a son from one family to another. Two farmers exchanged their sons, one worked for the man who was not his father, and the other worked for somebody else other than his father. The reason for that action was that if the sons were working at home with their fathers they were not entitled to benefit, under the German law, hut when they were working for somebody else's father under a contract of service they were insured and entitled to benefit if unemployed. In all the circumstances the Germans came to the conclusion that agriculture was not a suitable industry for insurance, and I am told this this year they gave it up. It seems to me, therefore, that there is everything to be said for adopting the Royal Commission's recommendations that the Statutory Committee should explore the position in consultation with the two parties and make such proposals as may seem practicable for the insurance of agriculture in this country.

I confess that I am very glad to have this Statutory Committee for another reason. Where you have a vast scheme like this, with 12,000,000 insured persons, it is not right that we should imagine that it can be rigid and inflexible for all time. It will be of the greatest benefit to me personally, and, I am sure, to every successive Minister of Labour, to have a body such as this committee to which he can put problems to which he needs an answer and from which he can get the considered advice of experienced persons. The committee will advise the Minister, also, on draft Regulations.

The Committee will consist of five members. Its constitution is, of course, a matter of very great importance. The Bill provides that two of the members shall be appointed after consultation with representative organisations of employers and Workers. It is essential, of course, that the contributing parties should be consulted. There is one other proposal which I think has everything to commend it. I propose that one member shall Ire appointed after consultation with the Minister of Labour for Northern Ireland. My reason for that is that there is and always has been the closest relationship between the insurance scheme in Northern Ireland and the insurance scheme in this country, and if that relationship is to continue it is essential that the effect of any changes upon the Northern Ireland scheme should be taken into account by the Committee.

I am going to mention one further matter in connection with Part I of the Bill, that relating to the proposals with regard to juveniles. I regard the new provision for juveniles as of major importance. I believe myself that we simply cannot afford to go on as we are doing at present. There is now no provision at all for a child leaving an elementary school, who may pass straight into unemployment. Something must be done. What the Bill proposes is to bridge the gap between the school-leaving Age and the age of entry into insurance. The Unemployment Insurance Act of 1930 provided that the age of insurance should be lowered to the school-leaving age when the school-leaving age was raised to 15 years or higher. That provision has not, however, come into operation, and the position to-day is that a juvenile is not insured until he is 16 years of age, and consequently he cannot qualify for benefit until he is practically 16½, that is, until he has paid 30 contributions after having attained 16 years of age.

Unemployed juveniles between 16½ and 18 who are qualified for benefit may, at the present time, be required to 'attend an approved course of instruction where such a course is available. The House will observe how this works out. At present there is power to tell a child over 162 years of age who is receiving benefit that if he does not go to an instruction centre he will lose benefit—but there is no control whatever over the child between 14 and 16, or over juveniles between 16 and 13 years of age unless they happen to be drawing benefit when you can say to them that, unless they go to an instruction centre, the benefit will stop. A child is probably less in need of instruction at the centre if he has had some experience of employment. Nevertheless, alone of all the juvenile classes, he is the only one over whom you have any control. I think that I am justified in saying that that position is highly unsatisfactory.

I should remind and warn the House that this problem is likely to assume considerably larger proportions during the next few years, owing to the large increase in the birth rate shortly after the War. Of those who were born in 1919 and 1920, large numbers will shortly be leaving school. What the Bill proposes to do is this: the age of entry into insurance, as I have said, is lowered to the school-leaving age, and when the juvenile enters employment he will be required to pay a very low premium of 2d. a week against the risk of future unemployment. He will pay 2d., the employer will pay 2d. and the State will pay 2d. These contributions may be used to qualify for benefit at the age of 16 years, and not 16½, as is the case at present, so that he receives that advantage for a comparatively small sum. In addition, the contributions will have a value at the age of 19, when we come to consider what are his rights under the ratio rule, to which I have referred.

The Bill does not attempt to interfere in one way or the other with the question of raising the school-leaving age, if, on educational grounds, such a policy is adopted; nor will the Bill encourage parents to take their children away from school earlier than they otherwise would. Children who voluntarily continue their education beyond the school-leaving age will be credited with contributions, in accordance with a scale contained in the First Schedule of the Bill. In addition to that, there will be certain cash benefits. I am utterly opposed to anything which could be described as "doles for children." The Bill provides that where a child between 14 and 16 is unemployed, and is the child of an unemployed insured person, the parent may get a dependant's allowance. This is a continuance of the dependant's benefit for children which now stops at the age of 14. The Bill also provides a very considerable benefit in the form of increased instruction for children. It imposes a statutory obligation upon the local educational authorities to set up courses of instruction, where the need exists. Those centres will be administered, as now, by the authorities, in collaboration with the Ministry of Labour, and thus, I hope, will form a bridge between school and industry such as we have endeavoured to build in the past.

It follows, from what I have said, that the Bill imposes a statutory obligation upon all unemployed juveniles between the ages of 14 and 18 to attend courses of instruction, if such attendance can reasonably be required. These proposals have, I am glad to say, the approval of the representative educational authorities, and of the Board of Education. By placing this system of instruction on an enlarged and permanent basis, I hope that there will be attracted, to this specially difficult class of work, men and women who will help the educational authorities to carry out courses of instruction suitable for the needs of young people who are preparing for industry, and who are anxious to go into industry, but who are most apt to suffer from failure to secure employment.

One further point. The Bill makes provision enabling me to require employers to notify the discharge of juvenile labour. Unless we have that information, it is impossible for us to carry out the duties imposed upon us by the Bill. There are 138 instructional centres at the present time, and the average number of juveniles in attendance is about 14,000. Information as to the extent of unemployment among juveniles is incomplete, and it is not possible to say exactly how many new centres will be established, when the Bill becomes law. It is proposed to ask local education authorities to provide 25 per cent. of the cost of setting up and running the centres. Half of the remaining 75 per cent. will be provided by the Insurance Fund, and the other half by the State. I regard these provisions as a bold and constructive effort to protect young industrial workers against the dangerous consequences of unemployment, at an age when they are particularly susceptible to outside influences, and we hope to turn their enforced leisure into an experience from which they will gain mentally, physically, educationally, and industrially.

That is all that I propose to say with regard to Part I of the Bill. There are many provisions, as I said before, which we shall debate in Committee. I say, in regard to Part I, that it puts our unemployment insurance scheme upon a sound and permanent basis. This fabric has been built up by many hands. It has stood the stress and strain of adversity, and it has sheltered many a man and woman in time of difficulty. So far as I am concerned I want, not merely to maintain, but to strengthen, what I regard as a typically British system which, I am quite sure, is the envy and the admiration of the world.

I will now deal, as shortly as I can, consistent with the complication and the importance of my task, with Part II of the Bill, and I will attempt, as I did with regard to Part I, to explain the three principles which underlie it. Those three principles are: first, that assistance should be proportionate to need;secondly, that a worker who has been long unemployed may require assistance other than, and in addition to, cash payments, and, thirdly, that the State should accept general responsibility for all the industrial able-bodied unemployed outside insurance, within, of course, the limits of a practical definition. The proposals of the Bill flow naturally and inevitably from those three principles. I will deal with them in order.

The first principle was that assistance should be proportionate to need. Under an insurance scheme, a man is receiving something to which he has contributed. Within the limits of his insurance contract, he is entitled, with a minimum amount of inquiry, to a fixed rate of payment, regardless altogether of his resources. When we come to payments made out of ordinary taxation, whether local or national, then, obviously, the principle is entirely different. The question then is how to discharge the responsibility of the community towards the unemployed man, bearing in mind that any assistance is at the expense of his fellow-citizens and his fellow-workers. It is sometimes suggested that an unemployed man—and no doubt this is the suggestion of the official Opposition now—that an unemployed man should receive, out of the pockets of his fellow-citizens, a fixed payment as of right for the duration of the period of his unemployment, whether he needs it or not. That, I know, is now the policy of the official Opposition. Let me just warn the House, if I may, of the conditions which then follow. Any such system would involve the closest control by the State of the terms and conditions of industrial employment. If the State were to pay compensation for 'loss of employment, the State must, for its own protection, determine what kind of employment the worker should be willing to take and upon what terms. In its own interests, the State would have to impose strict discipline and control over the private actions of unemployed persons. I am satisfied that the workers themselves would never agree to the regimentation involved in such a policy. The most that the State can or should do, with money provided by taxation, is to make payments where they are needed: in other words, a test of need is essential.

The right hon. Gentleman the Member for Wakefield (Mr. Greenwood), who is to follow me, will say that I am proceeding upon a principle stated in a circular which he issued when he was Minister of Health. In fact, the Bill differs greatly to the advantage of the applicant, from the Poor Law, as I shall explain when we reach the particular Clause. In any case, what this House has to bear in mind is the principle, which some hon. Members will accept and others will not, that a man should. turn to his own family for help in need, before he calls upon the community. I suggest that the principle is a right one, and that the community is entitled to see whether his family can help him without hardship to themselves, and to expect them to do so. In short, I cannot attach any meaning to a test of need which is not related to the resources of the household of which the applicant is a member. I am now stating the principle, and when we come to the particular Clause I shall explain how we have modified that principle in its practical application.

One of the main features of the Bill which will commend itself to all parties, is that. the genuine workman who has lost his employment and is in need of assistance, may apply for and receive assistance without the traditional stigma of the Poor Law. I do not attempt to analyse the varying emotions which contribute to the repugnance with which the Poor Law is still regarded, but, if I might hazard a speculation, it lies to a large extent in this: An applicant detests having to apply for public relief at the cost of his fellow townsmen, and being forced to make a full disclosure of his intimate family circumstances and, perhaps, of his personal failings, to a body composed of his neighbours and, possibly, of his friends; and all the time he may have a vague apprehensive fear that he is speaking into a whispering gallery of gossip which in due. time may permeate the whole neighbourhood in which he lives. This Bill puts an end to that, and I believe that for this reason if for no other it will be welcomed, by very large numbers of people.

The second of the principles to which I have referred is that the worker who has been long unemployed may require assistance other than and in addition to cash payments. Relief of need arising from unemployment has more than one aspect. Monetary assistance may not be enough. Long-continued unemployment often creates more needs than can be relieved by mere cash relief. The relief of unemployment is not merely the relief of poverty. Most important is the maintenance of a man's employability, and the maintenance of his feeling that he is still within the industrial field. Therefore, we have to provide that there shall be an opportunity for men to keep fit for employment. In addition we must recognise, as people of experience in social administration have recognised, that restorative treatment is in some cases necessary. This aspect of the matter was dealt with by my predecessor, Miss Bond-field, who was so ably assisted by the hon. Member for Chester-le-Street (Mr. Lawson). In the report of the Ministry of Labour for 1930, this was said: In many instances a man's disinclination to make any effort on his own behalf shows the necessity for some course of instruction"; and in another passage: Difficulty was experienced during the early part of the year in getting unemployed men in the depressed areas to avail themselves of the facilities offered by transfer instructional centres. Their reluctance to volunteer for a course of instruction was often due to that deterioration of morale which it was one of the purposes of the scheme to remedy. My predecessor thereupon put into force the powers which she had under the Act.

The third principle is in regard to the question of the State's responsibility. I would remind the House that the Bill provides that the State should take general responsibility for all able-bodied industrial unemployed outside insurance, within, of course, the limits of a practical definition. This principle was recognised in a Resolution passed by this House on the 12th April, 1933, which declared: That this House resolves that responsibility for assistance to all able-bodied unemployed not over 65 years of age should be accepted by the Government, with such re- adjustment in financial relations between Exchequer and local authorities as is reasonable, having special regard to the necessities of distressed areas. It is quite clear that, before we take away from local authorities the duty of assessing need, I must be prepared to give the House reasons for doing so. Local authorities have had this duty for something like 300 years, and the essence of the Poor Law Act of Elizabeth was that each parish or district should be responsible for its own poor. But who would maintain, at this time of day, that this outlook and this local machinery are appropriate for the large-scale industrial unemployment of which we now have experience? Industry and employment do not follow the boundaries of local authorities. May I remind the House of the fact, which will be perfectly familiar to many Members of the Opposition, that a special feature of unemployment at the present time is that it is, I will not say principally, but largely to be found in certain localities and in certain industries. Certain industries are still suffering from wartime expansion in excess of normal peace time requirements. It must not be forgotten that, as a direct result of the War, there was an immense and artificial stimulus of production in certain industries, and a movement of population from one district to another to satisfy demands which were made upon us. Other industries, which before the War were largely dependent on their export trade, have suffered since the War a very large loss of their overseas markets. Speaking quite broadly, those industries which have suffered most are just those industries to which, if I may so put it, this war-time stimulus was most ruthlessly applied. If, therefore, unemployment is due to something which is quite without the control of the locality, if it is due to causes which are international or national, then there is every reason why its victims should be treated nationally.

What follows from that is surely this, that, if you are dealing with this problem nationally, you must, so far as is practicable, provide for the industrial unemployed under one system of unemployment relief. Let hon. Members consider what the position now is. Under the existing arrangements, one man is given cash assistance at the Employment Exchange, and has the protection of certain items of income which was afforded by the Determination of Needs Act. Another man has to apply for relief to the Poor Law authority, and is then relieved subject to Poor Law conditions. This differentiation is not based on relative personal merits or on the individual's prospects of employment, but is due solely to the fact that the one applicant has been in an insurable trade at some time and the other has not. Perhaps the most striking example of this anomaly is to be found in the case of the agricultural labourer. At the present moment, if an agricultural labourer finds himself in difficulty or distress, he has to go to the Poor Law. On the other hand, an unemployed mechanic living next door, in the same village, who has been in some insured trade, is treated differently. He goes to a different authority, merely because he has had a period of insurable employment. It seems to me that that differentiation is wholly indefensible, and one of the purposes of this Bill is to bring that differentiation to an end.

The service for dealing with the industrial problem of men requiring opportunities of regaining employment must be, as far as is practicable, a comprehensive national service, and, in my view, it must, by the nature of the case, be associated with the Ministry of Labour and the Employment Exchanges. Considerations of finance also demand that unemployment should be, in the main, the responsibility of the central Government. In most areas the local authorities are quite unable to meet the cost of relieving their own unemployment. Moreover, it must be remembered that the revenue of local authorities, in areas where there is heavy unemployment, is reduced, and that they have to meet special demands in respect of other social services due to the decline in industrial activity.

The position to-day, in respect of unemployment assistance as defined in the Bill, is that the State is paying £51,600,000 as transitional payments, while the local authorities are providing about £6,000,000. By far the larger part of the cost, therefore, is provided by the State, and surely it is right that the central government should take responsibility for the administration of the payments. The local authorities are at the present time administering transitional payments on behalf of the central government, but without any financial responsibility at all. There is a complete divorce between the responsibility of the central authority, which is providing the money, and that of the local authority which disburses it I would venture to lay down this rule as axiomatic, that, if the responsibility is to be a national obligation, the administration can no longer remain local but must be national also.

Since 1931, when this duty was first of all undertaken as a temporary expedient by the local authorities at the request of the Government, no feature of it, I suppose, has been criticised more often in this House than the great disparity in treatment as between one man and another where their circumstances were to all appearances exactly the same. I myself, in some cases, have found this lack of uniformity to be quite impossible to justify, but, on the other hand, I have been quite helpless to remedy it. Where a local authority pays its own money out of its own rates, and adopts a particular course or a particular scale, that is its affair; but it becomes wholly different when the local authority is spending State money and is acting merely as agent for the State. Then it seems to me that you must secure an assurance that such disparities are brought to an end. I do not mean that there should be a rigid, uniform system all over the country; but I do feel quite certain that it is indefensible that one authority should provide the money while another spends it.

These, then, are some of the justifications for transferring this service from local to central government. The final justification that I would offer for making this a national service is the necessity, to which I have already referred, of providing facilities for men who are suffering from prolonged unemployment to keep themselves fit to enter into employment again. The insurance scheme meets a man's needs during a period of temporary or seasonal suspension from work, but for the man who has been long unemployed something more is needed. My right hon. Friend the Minister of Health, and also his predecessor, who is to follow me in this Debate, have encouraged local authorities to give special attention to the need for restorative treatment, and, under their encouragement, some local authorities have provided schemes of training and occupation. It is, however, impossible to expect to achieve a co-ordinated or adequate service if it is left to 200 or 300 different local authorities. The local authorities are in this dilemma: if they have a large percentage of unemployment, they cannot afford to make adequate provision for their local unemployed, while in the more prosperous areas the authorities may find that the numbers of unemployed would not justify the provision of special training and occupational centres. Surely, what is needed is a national authority which can take a comprehensive view of the whole problem, with power to co-ordinate and extend existing facilities, not only for the transitional payments class but also for those industrial workers who are now left to the Poor Law. I say, therefore, it is in the interest of the local authorities themselves, it is in the interest of the applicant, and it is in the interest of the State that this service should be administered and controlled by a central authority.

If it he accepted that a central authority is the proper authority to deal with this matter, we then have to consider by what kind of machinery the central service is to be administered. There are three courses open. One would be to administer the scheme under the Ministry of Labour. Another suggestion is that you should hand over the whole question to an independent board entirely free from Parliamentary control. The third, which is the one adopted in the Bill, is to devise some way of keeping the Minister of Labour free from responsibility for individual decisions while maintaining the right of Parliament to approve the general policy to be followed and the general standards of assistance to be adopted. It may be said—I gather that this is the view of the right hon. Gentleman the Member for Darwen (Sir H. Samuel)—that administration should be by the Ministry of Labour, and he may think that is an obvious course to take. But to do so, if you examine it, would mean transferring the whole question of discretionary payments into national politics in a most acute form. The assessment of need is a discretionary service. If needs were assessed by officials of the Ministry of Labour, discretion would be exercised on behalf of the Minister. No Minister of Labour should or could be held responsible for the amount of the payment given in individual cases. It may be suggested that the decision should be given by a local committee. How can a local committee, which has no responsibility at all for raising the money, have responsibility for spending it? It would seem that rules would have to be laid down for the committees and the Minister would have to control them and, in the last resort, accept responsibility for their decisions. That, in my view, would be a perfectly intolerable situation.

The second suggestion has been made in the Press and elsewhere that we should set up a board independent of Parliament. In my view, that would be just as objectionable as the first, but for precisely the opposite reason. I do not think the House of Commons would or should be asked to accept a scheme under which it may be asked to pay out large sums of money to a board independent of everyone, without any control over its actions at all. I do not believe the House of Commons would do it, and I do not consider it should be asked to do it. Parliament must under our constitution share in the responsibility for a service of this kind. We have adopted the third course. The Minister of Labour will be responsible to Parliament for general policy and for obtaining the necessary money, but the application to individual cases of the policy approved by the Minister and by Parliament will be the business of an independent Board.

I ought to warn the House that one effect of the Bill will almost certainly, at first, be a substantial increase in the number of registered unemployed. I will be quite frank about it. I do not mean, of course, that the Bill will cause unemployment or that I anticipate that employment will not continue to improve. It must be realised, however, that many able-bodied persons who are not qualified for insurance benefit or transitional payments are reluctant to apply for outdoor relief although they may be in need. The new scheme will be free from the traditional stigma of the Poor Law, and it is probable that some appreciable numbers will apply for assistance and register for employment who do not now apply to the Poor Law. As the Royal Commission pointed out, if you improve social services, you must expect the im- provement to have an influence upon the number of applicants.

I will now say a word about the functions of the Board. There is to be created an Unemployment Assistance Board of not more than six members, appointed by the Crown and being a corporate body. The Board will administer assistance in accordance with the regulations submitted by them to me and requiring the affirmative approval of both Houses of Parliament. As Minister of Labour, and on behalf of the Government, I shall take responsibility for submitting regulations to Parliament and the general standard and policy of the Board will require to have the assent of Parliament. Determinations in accordance with the regulations will be given by officers of the Board after investigation of the circumstances of the applicants. Registration for employment and payment of assistance will normally take place at the Employment Exchanges of the Ministry of Labour. In certain circumstances an applicant may appeal to an appeal tribunal, whose chairman is appointed by the Minister with two other representatives, one appointed by the Board and one from a panel of work-people nominated by the Minister.

It is said: Are you not going to avail yourselves of the services of men and women who have devoted perhaps their lives to this work? I felt that that was a criticism which should be met and that we should do what we can to ensure that the services of those people are not lost. The Bill, therefore, provides that the Board will be assisted in their local administration by advisory committees which they may establish wherever they think fit. These committees will consist of persons having local knowledge and experience in this very difficult branch of local administration, and I feel certain that the Board will be quick to seize this opportunity of securing the services of such persons, many of whom have devoted years to the study of the problem in their local areas. I think this part of Clause 34 will turn out not the least useful part of the Bill.

May I say a word on another very important matter; that is, the question of scope. The scheme will cover all able-bodied workers between the ages of 16 and 66 whose normal occupation is insur- able employment under the Widows and Old Age Contributory Pensions Act. Someone may say, Why do you stop there? Why do you not include others? The answer is this: This is essentially a scheme dealing with industrial workers. There must be some frontier which can be seen and which is not susceptible of more than one administrative interpretation. The local authorities themselves were insistent on the need for a definition as objective as possible. The frontier by reference to the Contributory Pensions Act is the widest that I could find in any of the social laws which would give us a working definition. It will be seen that there is no qualifying contribution principle in this part of the Bill, and that provision is made for the inclusion within the scope of the scheme of those who through trade depression have been unable to follow insurable employment.

In the vast majority of cases, as the Bill shows, the intention is that cash assistance should be given together with opportunities of training for maintaining employability and improving chances of return to employment. But any one who has had experience of these matters knows that the scope is so wide that, of those who come under the Board, there will be a small number for whom the Board must have the necessary powers of discrimination. It is, to my mind, sheer hypocrisy to pretend that you can entirely ignore this problem. You must take these powers of protection against exploitation in the interest of the genuine worker. On the other hand, there is no need whatever to exaggerate the size of the problem or to make alarming statements about what the Board can or will do. The House should realise that, apart from the trade dispute disqualification which, no doubt, we shall consider in Committee, the conditions and disqualifications for the receipt of unemployment benefit do not apply to the receipt of assistance. This means, of course, that an applicant who leaves his employment voluntarily or refuses suitable employment will not be disqualified for a period as he is now disqualified for transitional payments. Instead of being left to the Poor Law, he will continue to be dealt with by the Board and the Board must have appropriate powers. There will be other cases where men refuse to avail -themselves of opportunities of employment. Again, it is obvious that with a scope so wide there may be a number of people whose personal character may be such that it would be quite inappropriate to give them a cash allowance in respect of all the needs of the members of their household. These are described in the Bill as cases of special difficulty. We have safeguarded the condition so far as we possibly can and we have given a right of appeal. I am perfectly well aware that this Clause is liable to distortion and to wilful misrepresentation. I am not suggesting for a moment that the right hon. Gentleman for Wakefield or the official Opposition will descend to these methods for the purpose of making some partisan attack on the scheme. Nothing would have been more easy than to leave these cases where they are now, namely, the Poor Law, and that course has something to recommend it. But what I had to consider was what, in the general interest of the unemployed, the scope of the scheme should be. There are two ways of dealing with this very limited class. One is to reject them from the scheme altogether leaving them to the Poor Law. The other is to keep them within the scheme but to take such powers as are necessary to discriminate between them and the vast majority of genuine applicants. I have throughout the Bill regarded the problem with which we have to deal, not as a Poor Law problem, but as an industrial problem. I want to bring as many as I can inside the scheme in order to do what we can at the Ministry of Labour to help them.

I want to say a few words upon the question of the assessment of need. In two important respects the provisions for the determination of need mark an advance on the existing position. The protection of certain forms of income conferred by the Determination of Need Act applies by Statute only to those in receipt of transitional payments; it is permissibly applied to those in receipt of public assistance. In this Bill protection is conferred upon all those under the Board; that is to say, that the discrimination between those who apply for transitional payments and those who apply for assistance is now taken away, arid all are dealt with alike under the Board.

The second change is this: I explained some time ago why I cannot conceive of any needs test except in relation to the resources of the household. If those words are taken literally, they mean that all the resources of all members of the household must be held to be available for the maintenance of the applicants. If that were to be the practice those members of the household who contribute to the household upkeep from their earnings might be tempted to leave work or to leave home. A man must feel that something of what he earns is in his own pocket. Many local authorities already recognise this principle in administering both public assistance and transitional payments, but the Bill gives it statutory recognition and requires the Board, in drawing up their regulations, to take into account not merely the needs of those who contribute the resources, but their personal requirements. This would allow, for example, some distinction between the reasonable requirements of a person who has to spend money in maintaining a certain appearance as, for example, a teacher, and other workers who have no such direct obligation.

I want to say a few words about training. As I have stated, for persons long unemployed, and particularly for younger men, monetary assistance is not enough. They need to have opportunities to keep themselves fit for employment, and thus maintain their self-respect. Therefore, the Bill authorises the Minister in Part I, and the Board in Part II, to provide courses of training for the purpose of giving men these opportunities. The practical possibilities of training ought not to be exaggerated. The, experience of the Ministry shows that training, to be valuable, should be for a definite period and on work which the men recognise has some good purpose. It is not easy to find unlimited opportunities of this kind which would not put out of work other men engaged for wages, and that is one reason why most of the training schemes have been confined to work on Forestry Commission land which has only a remote connection with the afforestation programme. Still, I hope for a very considerable development of this policy of training. If these centres are conducted in the future as they have been in the past, I have little doubt that unemployed men will want to take advantage of them. That has been our experience in the past We cannot ignore, however, the experience of the Labour Government in 1930, that "reluctance to volunteer to attend a course of instruction was often due to that deterioration of morale which it was one of the purposes of the scheme to remedy," and further "that a man's disinclination to make any effort on his own behalf showed the necessity for some course of instruction."

Therefore, the Bill in Part I continues the power which has been unchallenged since 1911, to require as one of the conditions of benefit that a recipient of benefit should attend a training course. That is a power which has been kept in reserve. That power was contained in the Act of 1911, and it was reenacted in 1920. Therefore, through six or seven Parliaments, with Governments of every complexion, that power has remained unchallenged and has been accepted by each one in turn. It was in fact used under my predecessor, Miss Bondfield, and a certain number of these people under the powers of the Act of 1920 went to a training centre as a condition of getting benefit. If that power remains as it is in the Act of 1920, it is inevitable that you should give some similar powers to the Board when they are dealing with assistance. Otherwise, you would have the ridiculous anomaly of powers being in existence to deal with those on benefit without any equivalent powers to deal with those on assistance. The Bill gives the Board power to grant an allowance for the maintenance of a man at a training centre, and payment of training allowance while he attends there. If the man does not go to the training centre, he does not pass out of the responsibility of the Board. The Board is free to make it clear that their offer of assistance is maintenance at a training centre.

I want to make it clear that there is nothing in the Bill 'at all which interferes with the voluntary schemes, of which there are so many in existence, for giving occupation to the unemployed. Those must exist side by side with the efforts of the Ministry of Labour and the Board. All that the Bill does in this respect is to enable the Minister to contribute towards the cost of voluntary efforts, a principle which will probably commend itself to the House.

I now wish to refer to a Clause to which I must attach a very great deal of importance. It is Clause 36 (b). This Clause provides that it is within the power of the Board to make arrangements with local authorities whereby applicants for assistance may, as part of a course of training, be employed for short periods, not exceeding three months, upon work for the authority at ordinary rates of wages customary in the district. The Board may contribute towards any additional expenditure incurred by the authority by reason of the fact that the work is being utilised us part of a training course. One of the difficulties of affording adequate instruction to men who have suffered from long periods of idleness is to accustom them to the commercial conditions of ordinary employment. This arrangement is intended as a transition from the conditions of a training centre to the conditions of ordinary commercial employment. I realise that many forms of work undertaken by local authorities are not suitable for training purposes, but there are some in which conditions can readily be adapted to include instruction.


Does that mean stamping the cards?


Perhaps the hon. Gentleman will raise that and any other points later on. To indicate what I have in mind, I should like to refer to the schemes of work which were approved by Miss Bondfield when men from Transfer Instructional Centres were employed in carrying out improvements at Whipsnade, and in preparing playing fields for the University of London. According to her report, which I have before me, these schemes were very successful in achieving the objects in view, namely, in the words of the report: "The transition to employment under ordinary conditions and to a status of dependence from the sheltered conditions of the training centres." I think it would be unwise to empower the Board to make arrangements with bodies other than local authorities, because, as the House will realise, you have to be very careful in this matter to see that you do not begin a general system of subsidising wages. We have endeavoured to avoid this by regarding, as a condition of training, that there shall be progress from the training centres for a limited time which will put a man in an infinitely better condition than if he merely went out of the training centre without work to do.

I want to say a few words about finance. This matter will be dealt with in full on the Financial Resolution, and beyond stating shortly, and, I hope, clearly, what the financial provisions are, I do not propose to deal with it further. The Bill establishes an Unemployment Assistance Fund which will be under the control and management of the Board. From the fund will be paid all the expenses of the Board, except the salaries of members of the Board, which will be on the Consolidated Fund, and the salaries of the staff of the Board, which will be on the Votes. The financial effect—I am sure the House will be interested to hear this—as between the Exchequer and the local authority is, that the Exchequer will be paying, as it is now, the whole cost of transitional payments, and, in addition, will be relieving local authorities of 40 per cent. of the cost of the services transferred to the Board which would have fallen upon the local authorities in the standard year 1932–33. With the effect of the block grant, which is being undisturbed until 1937, the Exchequer will on the average be giving a rate relief of 50 per cent. in respect of the local authorities' liabilities taken over by the Board. On such estimate as can be made, the result of the transaction will be that the local authorities will have some £2,600,000 available in relief of rate charges. In addition, the financial Clause ensures that the formula adopted in the Bill shall not reduce the value of the concessions by the Exchequer in the case of those areas which, under the special grant for necessitous areas, receive a payment this year in advance of the settlement in the Bill. There is a further Clause which safeguards the authorities against the possibility that Clauses 39 and 40 may operate to put a charge larger upon the local authorities than is anticipated. Finally, the whole financial settlement will fall due for review in 1937, when the block grant also comes to be adjusted. Having regard to the other burdens upon the Exchequer this settlement must be considered extremely fair.

Part III of the Bill deals with the transitory provisions—for the transition from the existing arrangements to the amended insurance scheme and the new assistance scheme. With regard to Part I, the insurance part, that will come into operation one month after the Bill is passed. The reason that I have expedited by every means in my power and put in this very short limit of a month is that I want as soon as possible those who will be entitled under it to get the benefit of the ratio rule and the increase of the minimum from 26 to 52 weeks. With regard to Part II, it will come into operation as soon as equitable arrangements can be made.

I have endeavoured in the limited time at my disposal to give a broad outline of a very complicated and complex Measure. I have endeavoured to explain to the House as clearly as I can the motives which have prompted us in the preparation of this important and far-reaching Bill. I think we may say that we have re-established the Unemployment Insurance Scheme on a solvent basis, and we have provided new machinery to ensure the solvency of the scheme and to safeguard the interests of the insured contributors. We have provided that the period of benefit shall be extended to give the fullest advantage to those with the best employment record. The Bill embodies bold and constructive proposals for mitigating the dangers of idleness in the case of boys and girls who have left school and have no employment. In addition to preserving the insurance scheme as the first line of defence against unemployment, the Bill represents the first attempt by any Government to deal comprehensively, outside the Poor Law, with the position of able-bodied unemployed workers not covered by insurance. The Bill takes employable industrial workers away from the Poor Law and greatly extends the whole conception of the obligations of the State towards them. In asking the House to give a Second Reading to the Bill I claim, and I think I can claim justly, that it is the greatest Measure of social progress which has been presented to this country by any Government for many generations. I believe that this is a great advance; I believe in the Bill and if I did not do so I should not be here to commend it.

5.32 p.m.


I beg to move, to leave out from the word "That," to the end of the Question, and to add instead thereof the words: this House declines to assent to the Second Reading of an Unemployment Bill which fails to recognise that all the victims of the unemployment which is inherent in the modern system of industrial capitalism are entitled to equal and honourable treatment and maintenance from national funds so as to preserve intact their value to and status in the community. The House will, I am sure, wish to congratulate the right hon. Gentleman on the way he has performed a very difficult and arduous duty in explaining a very large and comprehensive Measure. If we congratulate him on the manner of his presentation of the Bill I am bound to say that we cannot agree with much of its substance. I cannot for a moment agree with the most exaggerated advertisement of this Bill which fell from the lips of the right hon. Gentleman, as being one of the greatest Measures of social progress for many generations. We regard the Bill as very full of defects. In the first place, I should like to make a, formal complaint on behalf of many Members of this House regarding the manner in which the House has been treated. We have a reasonable right to complain that, within a fortnight of the Bill being originally introduced, we are suddenly, without notice, without any statement being made, presented with a new Bill, which is longer by several Clauses than the Bill which was given to us at the end of last Session. In the second place, I think it is not customary to introduce a Bill which deals with the results of negotiations with outside authorities, when those negotiations have not been completed. On this side—hon. Members on the other side will not subscribe to my form of words—we do not believe that the Government should be forgiven for this slipshod, unfinished method of bringing Bills into the House of Commons.

Our real objection to the Bill is that it bears little relation to the realities of the situation and to the outlook of to-day. What the Government have done, in face of 2,500,000 unemployed people and in face of the fact that in England and Wales alone there are 1,100,000 people on Poor Law relief, or 40 per cent. more than in 1931, is to attempt to render permanent the arrangements made in 1931, with relatively minor alterations. The right hon. Gentleman spoke of the importance of bringing as many people as possible into the insurance scheme. But this scheme leaves the scope of the Unemployment Insurance virtually what it was. It has brought in juveniles under the age of 16, largely due to the fact that this will provide another means of restoring the solvency of the fund. Juveniles between the ages of 14 and 16 are to have paid in respect of them 6d. a week for two years, for which they are themselves to receive no benefit. But if it be that their parents are out of work and they are themselves out of work, then the sixpences contributed by the State, the employer and the juvenile will provide 2s. a week dependence benefit to the young person between 14 and 16 years of age. I would remind the House that the British Medical Association reckons that a. youth between the age of 14 and 16 requires an expenditure on food alone of 5s. 11d, a week. This proposal is therefore not a serious extension of unemployment insurance.

What about agriculture? Agriculture has been talked about for years as a possible insured industry. I dare say the right hon. Gentleman knows that there are schemes—no doubt he has considered them—in his pigeon-holes, but the best that the Government can now do for the agricultural labourers is to put the responsiblity for them on to the new Statutory Committee, in the hope that they will produce a report which at some time or other may result in legislation. What about domestic servants? During recent years they have found it very difficult to maintain a foothold in their employment. They are left outside.

Viscountess ASTOR



If the Noble Lady will pursue her inquiries a little further she will find that what I am saying is true. There is an increasing demand for the insurance of domestic servants. I have had letters during the past fortnight from people engaged in domestic service, hoping that they were going to be brought within the scheme. Rightly or wrongly, they have expressed that. hope: but they are not to be brought in. The black-coated workers are not to be brought in. Professional people, blackcoated people, superior people, are now hanging their heads in shame in suburbia, rotting to pieces, with nothing but the Poor Law before them. But they are not to be brought in. The scheme remains what it has always been, a limited scheme. Had it been the bold and generous Measure which the right hon. Gentleman has tried to persuade the House it is, we should have expected that at least another 4,000,000 or 5,000,000 people would have been included within its provisions.

The right hon. Gentleman referred to the extension of the period of benefit. I gathered from what he said that something like 167,000 more people will, under the provision for the extension of benefit, be entitled to added weeks beyond the 26. He did not tell us that all these people would be entitled to an additional 26 weeks of benefit. What it means is that 167,000 people out of an enormous army of people will get something additional to the 26 weeks. The impression that has been created in certain newspapers that this is going to mean an enormous decrease in the number of people who will have to go to the Board for unemployment allowances, has I think been disposed of by the Minister himself. It may be true that he is bringing a small percentage of people into insurance for longer benefit than hitherto, but what else is he doing? He is restoring the old system under which the onus lay on the worker to prove that he has been unable to obtain employment. The first effect of that will be the refusal of benefit to large numbers of people, because they will be unable to give proof.

What follows is equally important. When the late Labour Government altered that regulation and shifted the onus of proof from the worker there was a great outcry about anomalies, and the Anomalies Act was passed to meet the clamour in the House of Commons. The Anomalies Act still remains, although the justification for it has gone. If we are to go back to the old system of placing the onus of proof on the workman, then the old anomalies cannot arise and the Anomalies Act ought to have been repealed in the Schedule of this Bill. The workers now are going to get the worst of both worlds, because we are going back in effect to the not-genuinely-seeking-work principle, and at the same time we have the imposition of regulations in regard to anomalies. In the aggregate there is not going to be a larger number of people benefiting under this Bill. It may be that the number benefiting will actually be decreased.

The right hon. Gentleman referred to the question of the debt on the Fund. The proposal is to put the responsibility for the debt on the contributors to the Fund. That has been described by the "Economist," not a representative of the red Press, as a piece of "Treasury pedantry." It says: The only criticism which can reasonably be brought against this financial scheme is the heaviness of the debt charge, equivalent to nearly 10 per cent. of the income from contributions. The charge is to be £5,500,000 for 40 years. The "Economist." goes on to say that: It is surely both unwise and unreasonable to charge upon the Fund the services of amortisation of the £115,000,000 debt incurred during a period when all pretence at actuarial solvency had been abandoned by successive Governments. If there is any debt or any expenditure which it is justifiable for us to regard as part of the National Debt this is the debt. It would be a more creditable addition to the National Debt than most of the sums of money of which the National Debt is composed. For 40 years, at the rate of £5,500,000 a year, the contributors to the fund are going to be worse off than they would have been if the State had done a clean decent job and made this definitely a national responsibility. Workers yet unborn are going to have to contribute to a debt which was incurred long ago.

The right hon. Gentleman did not refer to the fact that no alterations are being made in the scale of unemployment insurance benefit. Two years ago, under the stress of a national emergency, unemployment insurance benefit was reduced by 10 per cent. Undertaking after undertaking was given by Members of the Government that it was only for the period of the crisis and that as soon as it was over they could look forward to the benefits being put back to the old rate. I understand that the economic situation to-day is brighter than it has been for many years. The Secretary of State for the Dominions has informed us many times that trade is returning. We are told that improvement is taking place day by day, yet the Government have not the courage to back their own belief by showing in the Bill that they believe the time of stringency is over. It would not have been so bad if they had said that for a further short period of time they proposed to continue the present scales of benefit and would then consider the matter. This is an attempt to fasten permanently on the insurance system the rates of benefit imposed, unwillingly, on working people two years ago.

I cannot at this stage go into all our objections to Part I of the Bill, but we shall have much to say about it as the Debate proceeds. We have no confidence in the Government. After our experience of its administration of the Anomalies Act, which is being used as an instrument of oppression, we can have no confidence in the Government's method of administering Part I of the Bill even if its terms were as good as the Government think they are. But, as regards Part II, which deals with those who are ineligible for unemployment benefit—the able-bodied unemployed outside the scheme we are even more apprehensive The right hon. Gentleman has tried to draw a distinction between the new board and its machinery and the Poor Law system, and he went so far as to claim that this new method freed these people from the traditional stigma of the Poor Law. It does nothing of the kind. It centralises, bureaucratises and intensifies the Poor Law principle. It makes as permanent as it can the arrangements made in 1931. The only change is that instead of transitional payment and Poor Law assistance for the able-bodied being dealt with as it has been for the last two years, it will be carried on on almost identical terms but under another authority. This is the old Poor Law system; and it has not got the advantage behind it that it is to be administered by a representative body of people. This body is to consist of people appointed by the Crown and removed from the criticism of this House. When I said that it bureaucratised the system I meant it, and the composition of this body proves it.

I go further, and I say that this centralised system will tend to give you a hard uniformity irrespective of local considerations. It will be a difficult problem for the right hon. Gentleman to devise a system of administration national in character which is not going to be hide bound in operation and which, because of its uniformity, will not, inflict serious hardship on a large number of people. Although the new board is not bound to restrict its assistance according to means to the scale of unemployment insurance benefit, now that unemployment insurance benefit and the board are both under the right hon. Gentleman's hands the chances are that the maximum scale allowed, outside unemployment insurance, will be the unemployment insurance scale, irrespective of the requirements of the applicant.

Our chief objection to this part of the scheme lies in the treatment of local authorities. The right hon. Gentleman regards this part as a great achievement, because he is relieving local rates of 40 per cent. of the amount they have been spending on the administration of out-relief to the able-bodied and their dependants. The whole of our ease is that they ought never to have had to bear one penny of this expenditure, and it is not doing justice to them to-day to say that you are going to relieve them of 40 per cent. of the cost and then try and bribe the ratepayers by saying that there will be £2,600,000 available for relief of rate charges. What are the facts? I have a letter from my own constituency. The city council does not happen to consist of a majority of my supporters, but it takes a strong line on this question, as no doubt a large number of other authorities do, against the proposal. I understand that the County Councils Association, who are more amenable to Government influence than other kinds of local authorities, who are a little more disposed to Tory views than urban local authorities, but who are more remote except in about four counties from this problem of Poor Law relief than the urban areas, have been cajoled or persuaded into agreement by the Chancellor of the Exchequer. On the other hand I am told that the Association of Municipal Corporations, who are faced with the major part of this problem, are still at this hour united in their opposition to the Government's financial proposals under Part II. They may say thank you for a very little, but they still regard themselves as suffering from a real grievance in having to meet 60 per cent. of what they were paying before in the relief of able-bodied unemployed.

It is an entirely new principle in the history of government that local autho- rities should subsidise the State for a service and have no control whatever of the money expended. That principle cannot be supported by people who will think in terms of effective government. In a city like Sheffield, according to the latest returns, as they will be affected by the Bill they will still be left with an out-relief burden, primarily for the unemployed and their dependants, of a rate of 3s. 10d. in the £, and certainly over 3s. of that will be devoted to dealing with able-bodied unemployed who do not come under Part II.


Will the right hon. Gentleman give us his authority for that statement?


Our chief objection—


Will the right hon. Gentleman give us his authority for that statement?

Mr. DEPUTY-SPEAKER (Captain Bourne)

The right hon. Gentleman has not given way, and the hon. Member must not interrupt.


It is an official document emanating from the city treasurer's office. Our chief objection to the Bill does not lie in its individual Clauses, but in the mode of approach to the problem which faces the country to-day. Repeated attempts have been made by Government after Government to make Unemployment Insurance a satisfactory instrument. We started in 1911 with about 2,250,000 people. In 1920 we extended it to cover 11,000,000 people, and since then we have passed about 30 Acts of Parliament dealing with Unemployment Insurance until now it is a maze of difficulties to the layman and would require the perspicacity of the Prime Minister himself to understand. It is not that Governments have not tried to work it, they have, but it does not cover the field, and it never has been insurance. That is admitted by the right hon. Gentleman. I made the comment two or three weeks ago in this House that Health Insurance has been insurance, but Unemployment Insurance never has been insurance. There has been a varying debt on the fund, and it would have been quite possible at any time to have made it solvent by cutting down benefits, doubling contributions or alter- ing the State's contribution. But there never has been an insurance basis to the scheme, and there never can be during the years ahead.

Moreover, the rates of benefit, as everyone must know, have always been inadequate to meet the needs of the unemployed persons. When Unemployment Insurance was first introduced, when the rate of benefit was 7s. per week with no dependant's benefits, the theory was that those unemployed would be only out of work for a few weeks and that it was to tide them over that period of difficulty. We must have got out of that atmosphere of mind by now. It is undoubtedly true that the present scales of relief are not adequate to meet the needs of people who have been undergoing long periods of trade depression. This is borne out by the result of the inquiry by the British Medical Association, about which we shall no doubt hear a good deal during the course of this Debate. According to the British Medical Association, an independent body, a man, wife and three children, of specified ages, need to spend £1 2s. 6½d. per week on food alone. The maximum benefit under the present scale which a man, wife and three chilrren could receive would be £1 9s. 3d., leaving 6s. 8½d. for the week's rent, coal, lighting, clothes, and all the other necessary items of working-class expenditure. Even if every working-class housewife could measure out her food in calories and keep it down to £1 2s. 6½d. the balance left, in cases where people have been out of work for long periods at a time, is bound to mean a degradation of the home life and a degradation of the physique of the individual.

This period of economic depression has exhausted the fount of assistance that there used to be in the working-class movement. All subsidiary sources of income have gone. The trade unions are impoverished and practically none of them can pay unemployment benefit. Friendly societies are not nearly as well off as they were. People have drawn their money out of the co-operative societies in order to keep going. With all these extraneous and supplementary sources of income gone, we are left in the average family with this 6s. 81½d. In our view, the Bill obviously does not meet the situation. People who ought to be within the scheme are excluded; the benefits are too low for proper sustenance; and there is in the Bill provision for differential treatment which is unjust as between men who have suffered unemployment for different periods. The idea that because a man has been lucky for five years he should be better treated is one which calls for criticism.

On this side we believe, in the first place, that the labour power of the nation should be concentrated in the most effective period of life. Our alternative to this new insurance for those under 16 would be the raising of the school age and the permanent exclusion of young people from the industrial field. At the other end of the scale we wish to see aged workers out of it, so that you can concentrate your labour power in those years of vigour and maturity when labour is most effective. For those who are capable of work we reaffirm our principle of work or maintenance. Everyone believes in this principle in some degree. Even die-hard Tories could not be expected to-day to rise in this place or another place and say that people should be allowed to starve. Therefore, the principle of maintenance has been accepted by the community.

The question is as to the method by which and the scale on which maintenance should be provided. The Bill will continue to do it in the old way. There will be inadequate money payments, eked out by charity, by the assistance of step-aunts and step-uncles or anyone who can he brought within the realm of a household, by the Poor Law, by the actual breaking up of family life—scores of thousands of homes have been broken up by the means test—by undermining the health and physique of the people if the British Medical Association is right, and by creating that psychological reaction in the minds of the people which is perhaps one of the most dreadful things on the coalfields to-day, where there is very little hope for the future.

However difficult its attainment may be, we believe that provision should be made for the unemployed on a scale which, in the words of the British Medical Association, will enable "health and working capacity to be maintained"; and we would have it done in such a way as not to cast a slur on those who receive that help. We believe that that system of maintenance ought to be a national charge falling on the whole community, that it should not in any way burden the local rates, that the burden should not fall on a section of the community, because unemployment is a national and international problem. Our conviction is and always has been that unemployment is inherent in the present industrial system. I have not time to read the full quotation, but I would like to read part of a statement the authorship of which I shall disclose when I have finished: I repeat, unemployment crises are inherent in the industrial system of capitalism, and are a proof that capitalism as a system of production and distribution cannot run steadily and smoothly, and, therefore, cannot be accepted by society as a satisfactory method of supplying the needs of the people … The system of insurance is a half-way house. It divides the responsibility between three interests, the man's own, that of the capitalist employer, and the State's. Its working necessitates large reserves of inefficiently used capital, and its use must always be very limited both as regards the help given and the time for which it is given. We need a much simpler and more scientific system. Insurance is a make-shift to cover capitalist risks, by imposing burdens on wages which do not fall properly on wages at all. Those were the words of the present Prime Minister some 10 years ago. They express a very sound doctrine, and I am very glad to have had that admission from the right hon. Gentleman. Recent developments have confirmed us in our view that unemployment is not going to be eradicated as things are to-day. Slight fluctuations in trade figures ought not to blind people to the seriousness of the economic situation. I am glad that the Chancellor of the Exchequer is here, because when he came down to the House in March to try to explain away his statement in February about "unemployment for 10 years," he did it in a way which made things perfectly clear. I agree with what he said. These were his words: I did not mean to say that we could not expect good times for 10 years. I did not mean to say that there would be no reduction in unemployment for 10 years. What I did mean to say was that as prosperity came back again we should not be able to employ the same number of people in producing the same number of articles as we could have done, say, 10 years ago, or before the introduction of these new industrial or mechanical devices. This statement should be repeated. It is not everybody who agrees with it. There are some who say that an adjustment will take place so rapidly that it does not present any really serious problem. I cannot make up my mind to accept that view."—[OFFICIAL REPORT, 22nd March, 1933; col. 380, Vol. 276.] I think that that is a very sound reading of the economic situation as we have it to-day. Because of that, we regard the present unemployment insurance system as unsatisfactory and as inapplicable to the situation of to-day. Recognising the stern realities of the situation and the gloomy outlook for to-morrow, I would like to ask the Government and Government supporters two questions. First, do they believe that the major question is the provision of normal wage-earning employment for those who are without it now? Obviously I think the answer must be "Yes." I ask, secondly, do they believe that if any efforts that are made to restore people to normal employment are unsuccessful, the victims of circumstances which are outside their own control should receive the same treatment as they themselves would like to receive in similar conditions, after having performed their work to the community and being ready to do it again?

That is what we mean by "work or maintenance." It is a moral claim on the part of the citizen to a chance of support himself and his dependants, and, if that fails, to honourable and adequate maintenance to keep him within the status of citizenship. Unless the House answers both questions in the affirmative, hon. Members are going to condemn a very large number of people to physical and spiritual degradation, for Part IT of the Bill is still the Poor Law, applying Poor Law principles. The Government may balance the fund, they may restore it to permanent solvency, but they are going to do it, on the facts as they are to-day, by continuing the impoverishment of mind and body of the poor, by continuing the humiliation of large numbers of people, by branding large numbers with the iron of pauperism, whether through an unemployment assistance board or a board of guardians; and the final result will be injurious to our best national interests.

Let us admit, if you like, that the late Labour Government did not carry this policy into effect. I am prepared to admit that it did not do so for more reasons than one. Let us say, if you like, that we are open to criticism for riot having done it. Let us say that we failed. But the question still remains, is it right that we should tinker with the old insurance system, brought a little up to date, with more financial stringency, when all the experience of the years since the War proves that it is incapable of dealing with the situation? If we were wrong it is open to the Minister, who still believes in those principles that I have quoted, to adopt them now in place of this jig-saw puzzle of 63 Clauses. I have no hope that the House will support us in our Amendment, but at least I hope that before the Debate is ended the House will be aware of the real issue which confronts us, which is that the old scheme has broken down and that we ought to be bold enough and honest enough to stand for "work or maintenance for all."

6.14 p.m.


I do not think that anyone will be inclined to disagree with the Minister's opening sentence, that this Bill was a bold attempt to deal with a difficult situation. Nor do I think anyone would be guilty of exaggeration who went further and said, with regard to the first Clause of Part II, that it was, in regard to local government, a revolutionary proposal. Nevertheless, I recognise freely, as everybody must, that it is a courageous attempt to deal with the difficult situation which exists in this country to-day. I would like to add that I am sure no Minister has ever come to the House to perform the difficult task of introducing a great Measure who has given his subject more anxious consideration and brought to it more sympathetic intention than the right hon. Gentleman has done on this occasion. That makes it all the more regrettable that there should be in the Bill proposals which, after mature consideration, we find we must resist to the limit of our capacity.

It would have been more gratifying if one could have joined with the rest of the House to put such small stock of knowledge and experience as one might possess into the framing of a Measure, which would be more acceptable to those in need and which the nation could afford. Who would not wish to co-operate in such an effort? My own ambition, and I am sure that of other Members, would be satisfied if we were able to do something which would ameliorate the lot of those who are in the deplorable condi- tion of having nothing to do and of having nothing on which to do it, whose economic freedom is limited by the fact that their income is 15s. 3d. a week, and whose liberty of movement is restricted to the distance which they can travel on their own feet within the limited range of an Employment Exchange.

Although there are points in this Measure to which we take exception, we do not consider that that fact absolves us from making, at the right time and place, such contributions by way of amendment and constructive criticism as may be within our power. I need not say that we are in favour of every measure and step which can be taken to ensure that there shall be no relapse of the insurance scheme proper into the thoroughly unsatisfactory position in which it was in 1931. As for the new statutory commission which it is proposed to set up, I confess I am puzzled to see the complete necessity for it although I would not quarrel with it. But it seems that all the information which the board will get will have to come from the Minister or with his authority, and it is difficult to see why machinery could not have been evolved within the range of the Ministry, to make those reports and to deal with the situation as circumstances arose from time to time. There would be much more to be said for the board than can be said at the moment if it had power to make recommendations with regard to the scheme as a. whole and not only to those matters which originate from financial causes. I am not quite sure whether or not it is the intention that the board should make recommendations with regard to anomalies which may arise or difficulties which may develop out of the scheme itself apart from financial difficulties.

The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain)

Is not the hon. Gentleman confusing the board with the Statutory Committee?


I am referring to the Statutory Committee under Part I.


The hon. Member said "Board".


I am very sorry. It is the Statutory Committee of which I am speaking. Those who have seen unemployment insurance Measures go through this House and pass into the field of administration know that they have often been interpreted in administration very differently from what Parliament originally contended. There is no means of getting such matters rectified except by waiting for a Parliamentary opportunity, which may not be readily available, to introduce a new Bill and have it passed into law. There would be more to be said for the Statutory Committee or commission if it had those extra powers which possibly it may be the Minister's intention that it should have. The right hon. Gentleman when speaking of the proposals for dealing with juveniles between the ages of 14 years and 18 years said that the situation in this respect was highly unsatisfactory. He is guilty of no exaggeration in using those words. The situation is more than unsatisfactory; it is positively alarming. Each year that passes, for the next three or four years, will, owing to the bulge in the post-War birth-rate, see large numbers crowding into industry and if that movement is to be without any control the situation is very difficult to contemplate with equanimity. In the years from now up to 1938, if steps have riot been taken to deal with the position, the numbers of juveniles out of work may easily exceed 500,000 and may possibly reach 600,000.

By our neglect of this matter, we are undermining the future of our country. The future man-power of the country is being allowed to decay both in the towns and rural districts, and the effects in the rural areas are no less disastrous than in the towns. It will be in the country districts where there are thin and scattered populations that the right hon. Gentleman will find the greatest difficulty in bringing his projects and schemes to fruitful results. This country, in the last century anyhow, enjoyed a commercial supremacy which was due mainly to the fact that we had a long start, in the race of industrial development, and, in the second place, to the fact that we had more readily available supplies of raw material than any other country. Those advantages have now passed away from us. They were not, I agree, the only advantages which we enjoyed but they were at all events very prominent. We can only hope to maintain a satisfactory standard of life in this island if our population is to be as highly educated, as physically fit, as ready to adopt experiments, as alert in mind and body, as the population of any other country in the world.

It is that state of things which we have hitherto neglected. We have left these matters in a chaotic condition. We have allowed children to crowd into the labour market and compete with their parents. In a certain district in Lancashire in the Autumn of last year no less than 25 per cent. of the boys and 31 per cent. of the girls who left school crowded into the cotton industry, in an area where already 22 per cent. of the boys and 15 per cent. of the girls were unemployed. Could anything be worse than that? This Measure gives for the first time, some opportunity of control in regard to this vital aspect of our domestice affairs. One asks therefore whether the proposals in the Bill are those best calculated to achieve the end which in my judgment is essential. The Lord President of the Council on Monday evening, referring to this Bill, expressed the hope that it was going to usher in an era of more humane treatment of the unemployed. If humanity is to be the slogan and the practice in the administration of the new Measure, it will be a relief to many people who are anxious at present and will give satisfaction to all.

The right hon. Gentleman on the same occasion referred to the "core of unemployment" which had baffled and defeated successive Governments since the end of the War. I regret that the Government in handling this matter have taken just the line which they have taken in the Bill. Any proposals are better than none, but there are proposals and there is a procedure which would be better than those presented to us this afternoon. Living under the conditions that we find to-day, living in a machine age, it must be clear to us that there is going to be, under any conditions which are now foreseeable, a great amount of enforced leisure for the people of the world. We see the reactions of it in America in the Industrial Code, and in Italy in the five-day week. My right hon. Friend opposite and the International Labour Office are no doubt keeping in touch with these developments. But the logical way of dealing with this terrible problem of enforced leisure is to direct its incidence—and this is within human capacity—upon those who are of an age to benefit from it, that is to say, the elderly who are entitled to freedom from their activities and those up to 18 years of age.

I hope that this Measure will not deter the Government from going on with the proposal to raise the school-leaving age. I know that on two occasions previously, I have ventured to mention certain figures to the House in this connection. I mention them again to-day, on the principle adopted by a certain well-known character in fiction who believed that what he said three times was true. If the the school-leaving age were raised to 15 for a start, if part-time education and training were provided up to 18, if children under the age of 18 were made subject to the Board of Education rather than to the Ministry of Labour, then the 2,000,000 children—and if the figure is not of that order now it will shortly be of that order—who would be withdrawn from labour would make an appreciable effect upon that hard core of unemployment which the Lord President of the Council lamented. It has been estimated that if we organised matters on that basis, places would be found for 600,000 men in the prime of life and the saving to the Unemployment Fund would be of the order of £28,000,000. That would be a great saving of public money and would pay for the education and welfare of the juveniles. While regretting that the Government proposals have not taken that form, I still express the hope that the school-leaving age may yet be raised. It is only by doing so that you will help to relieve the general volume of unemployment among juveniles and I hope the Government will not lose sight of that aspect of the question.

I do not wish to touch in great detail upon the various aspects of Part I of the Bill, but I am puzzled to know why an alteration in the third statutory condition has been suggested. I cannot think that it is the intention of the Minister to reintroduce the "not genuinely seeking work" condition or anything like it. He has said in this House, if my memory serves me right, that he does not wish to see that condition replaced on the Statute Book, but I have little doubt of what will be the effect of this alteration when it is put into practice administratively, whatever the intention may be, and we shall certainly ask the House to consider an alternative to that proposal.

I welcome the proposal for relating insurance benefit more closely to contributions. I think that is a step in the right direction though I wish it had been a rather longer step, and that it had been proposed to relate benefits to contributions over the whole of a man's insurable life.

I was surprised that the right hon. Gentleman made no reference to the financial aspect of the scheme so far as it related to the proposals for the amortisation—if that is the right word—of the old debt of the fund. We on this bench can see no reason. either in justice or even in common sense, why this should be charged upon the insurance scheme. We think the scheme should have a clear start. The debt in its origin had nothing whatever to do with insurance principles. It arose from uncovenanted benefit and the unfortunate habit of previous and successive Governments of over-estimating the volume of employment which would be available. This money is to be found by two annual contributions over the next 40 years. It is true that workers who are not yet born will be paying a higher contribution and the factories which are not yet started will be penalised in this way and we hold that if there are surpluses in the fund, they should be devoted either to the reduction of the contributions or to the restoration of the cuts. I hope that this is one of the matters in which the last word has not been said by the Government and that it is one of those cases where the Prime Minister might press us to ask him to do the big and generous thing. It is at all events a matter to which we attach very great importance. I should like also to be assured that there is ho implication in this arrangement with regard to the debt that there cannot be a restoration of a level of benefit until it has been paid off, but that does not seem to be quite clear. There, I think, I may leave Part I of the Bill.

I now come to the proposal to establish a new Unemployment Assistance Board, which is a departure, we think, of the most unfortunate kind. We are not opposed in any way to the administration of help for the able-bodied unemployed by a central, national service, and we have no wish to see the administration left in the hands of the public assistance committees. Neither, on the other hand, are we here in favour of the sort of hybrid arrangement which was proposed by the Royal Commission. The proposal which they made we think would have been indistinguishable in its effects from the existing public assistance committees, either in personnel or, we believe, in practice. But here we have a proposal which is indeed revolutionary, a proposal to set up what is in effect an entirely new Poor Law superimposed upon all the existing social services of the country. It will duplicate all the machinery of investigation and of appeal, and it will probably in its results be indistinguishable from the existing arrangements.

A body of this kind, taking over important duties from Parliament, is a development which is very suitable in certain fields of operation. It works very well in, 'and is necessary for, such tasks -as the distribution of electricity, it works very satisfactorily with regard to the administration of the British Broadcasting Corporation, but when it conies to handing over hundreds of thousands of our fellow-citizens to a body of this kind, which will have the most intimate control of their domestic lives in all their aspects, we think it is going a little bit too far. We do not think a scheme of that kind will work in practice in a democratic State. We may remind ourselves, though I do not wish to push the parallel too far, that we have already had some experience of this kit d in this country. Those who are familiar with the history of the Poor Law Commission of 1834 will be familiar with the three kings of Somerset House. in the minds of those who know that experience and who 'are in touch with events in the country today, there will be considerable apprehension lest the three kings of Somerset House may, 100 years later, find a counterpart in the six kings of Montagu House. That is a very genuine apprehension.


The three kings of Somerset House were subject to no Parliamentary control at all, and these will be.


That is the basis of our criticism of the right hon. Gentleman's proposals, that this particular body is free from any local control, but that the local authorities are to be asked to contribute to its maintenance, and, furthermore, that there is not, in our contention, any adequate Parliamentary control over the situation. We would infinitely prefer, and we see no reason to the contrary, that the Minister should take the simple responsibility for these matters himself. What is going to happen under this arrangement, if one is asked by one of the unemployed in one's constituency, what the situation is in his particular case? One must reply, "It will be by regulations which are to be made." if one is asked, "What will the scales be?" one must reply, "I can give no information on that point. They will have to be made by the board." "Will you be able to alter them when they come into Parliament?" "No," and so on. These considerations should be in the Bill, or some general indications of the way in which they are to be dealt with should be given to the House before the House agrees to the Second Reading of this Bill.

The administrative difficulties which may lie before this new instrument of Government are very great, and if it comes into operation, one hopes that they will be overcome. It must form new contacts with local authorities, with all the local services, such as health and so forth, which exist, and in view of the sort of oscillation of patients between the Poor Law and this body which may be involved, one can only hope that there will be no friction between the local authorities and the central board. These are all points to which we attach such importance that we cannot support these proposals, but will resist them as far as we are able.

I pass to one final aspect of the matter upon which I wish to say a few words. I think there is everything to be said for the proposals with regard to training and industrial convalescence, or whatever the appropriate word may be. On the subject of compulsion, I think far too much has been made of that particular aspect of the affair. It is quite obvious that compulsory attendance makes the whole thing meaningless, and if there is to be compulsion of any kind, the whole scheme will be defeated. On the whole, I think the proposals are reasonable and sound.

I now come to some consideration of Clause 44, which deals with the adjustment of the burden of the finance of the new Board. This is hardly a party question. In the early part of this year Members of all parties who were very much concerned with this matter had many meetings, especially those who were interested in the distressed areas and wished to get some relief from the inequitable burden falling on the rates; and the upshot of those meetings and of the negotiations which took place was that we had a Debate, and a Resolution was passed in this House, on the 12th April last. On that occasion it was announced that there would be a grant of the order of half a million of money to the distressed areas. That was not accepted by the distressed areas as an adequate remedy for the particular difficulties from which they were suffering—far from it—but at all events it gave satisfaction for the time being, because the right hon. Gentleman the Minister of Health said, in the course of his speech, that this was only an immediate and partial step, that the Government had a long-range programme in view which, when it was introduced, would put the whole matter right and would be a satisfactory solution from the point of view of everyone. In his concluding sentences, he said that in 10 years' time, when this great task had been finished and we looked back upon it, we should see that the National Government had dealt with the matter in a national way, with the good will and to the satisfaction of the whole community.

So pleased was I, who had been taking part in the work of the Distressed Areas Committee, that I immediately rose, following the Minister, and expressed my satisfaction at his announcement. Had we known what the great scheme with regard to the rate burden was to be, we should not have expressed satisfaction on that occasion. It seems to me an entirely new departure in the government of this country that die local authorities should be called upon to pay a substantial sum from the rates for a service over which they have no control, and not only so, but in regard to which they have little or no voice whatsoever. It is true that the Resolution which was passed was to the effect that the arrangement would be satisfactorily settled subject to adjustments between the local authorities and the State, but what was in the mind of every hon. Member who heard the right hon. Gentleman's speech was that there should be that adjustment with regard to the block grant. That was the important part with which we were so satisfied. We believed without any question the assurance that was given to us on that occasion, that the State was prepared to take over the whole financial responsibility for the able-bodied unemployed out of insurance, and it is in that regard that we are so disappointed to-day.

We still advocate that that should be done. It will be remembered that that does not place any additional charge upon the public of this country. There is at the present time, and after this arrangement will have come into force there will remain, a disparity between the poor rates which are levied in different towns up and down the country for which there is no justification 'whatsoever, and we have asked that the burden should not lie upon the rates but should be shared by the whole community. I hope that nobody will misunderstand me when I say that we are not arguing for any additional public expenditure, for any additional charge upon the taxpayer, but merely for an equitable readjustment to be shared fairly and squarely throughout the length and breadth of the land. The right hon. Gentleman who spoke just now from the Front Opposition Bench referred to the fact that the Municipal Authorities Association are entirely dissatisfied with this arrangement. That is the case, and here again I hope the last word has not been said. It is not true to say even now that the local authorities will not have to look after many of the able-bodied unemployed. They will have to take charge of and care for all those unfortunate individuals of the non-manual working class who are over the age of 250—I mean whose incomes are over £250. Some of the most unfortunate and needy cases come within that class. We talk about the Poor Law stigma. Bearing in mind people of that order, such as taxi-drivers and small shopkeepers, while certain sections of the community are being removed from the area of the stigma, let us not forget that these people are by an implication being either led into it or being thrown into it.

Let me express again the dissatisfaction that was felt, and which will be voiced from these and other benches, in regard to the financial arrangements. I have no doubt that hon. Members from many parts of the country will ventilate this matter very fully. It is not necessary therefore for me to deal with it in detail. I would like to point out, by way of illustration, that the town of Liverpool, which had a total cost of out-relief of £924,000 last year, will have to contribute £491,000 to the Exchequer under this arrangement. While their gain will be £196,000, they will still have to find £294,000 in the year for the purposes of out-relief in respect of able-bodied unemployed. They will still have a burden of out-relief represented by a rate of 2s. 6½d. in the £. That is a state of things which we had not been led to expect. A pledge was given which has not been carried out, and it is for this reason, and for others which I have stated, that we are obliged to oppose this Measure and to resist, within the limit of our capacity, the particular proposals which I have specified.

6.48 p.m.


I am rather pleased that the hon. Member for East Birkenhead (Mr. White) made the slip that he did with regard to the £250, because it created a cheerful atmosphere in the Debate which it has so far lacked. I rise, first, to support the Bill and to congratulate the Minister on his very comprehensive and excellent statement. He should feel satisfied, because there sems to he no violent or adequate opposition to it. [HON. MEMBERS: "Oh !"] I think that that is true. Let me bring the House to realise the issue. The right hon. Member for Wakefield (Mr. Greenwood) asked us to face the real issue, and said there had never been an insurance scheme and there never would be. I am sure that if the House were to adopt the Amendment of the Opposition there never would be a real insurance scheme. May I ask the House to contemplate what the Amendment means. In the language of one of the organs of the Labour party, we are led to believe that if the Amendment is adopted it pledges the Labour party to abandon altogether the principle of insurance—and without a test. It will mean a universal dole; anybody and everybody can say, "I have been out of work for a few days or for a longer period." [HON. MEMBERS "No !"] But the meaning of the Amendment is that all victims of unemployment are entitled to maintenance without test. Anybody can come and say, "I am one of those medium kind of people who are too heavy for light work and too light for heavy work, and I cannot find work; keep me going." It is a case of eat, drink and be merry, and be sustained by the State.

We are asked to support an Amendment which means maintenance without test, and I cannot understand hon. Members who sit opposite, because it is totally inconsistent with their beliefs and practice in both their trade unions and their personal lives. If they do not believe in a test, why do they enforce demarcation in work? Why should there not be a flat rate of wages, and why should there be skilled and unskilled? No hon. Members opposite in their personal lives would employ a joiner for a plumber's job. They have a test in every branch of industry and it is because we believe that a test is vitally necessary for insurance that we believe in the policy of this Bill. We are considering one of the greatest Bills, in my opinion, that has ever been presented to this House or to any other legislature in the world. I have been in the House 11 or 12 years and have been through every Unemployment Insurance Bill save one, and I have taken a definite interest in them. I am speaking not only on behalf of myself, but as the representative of the northern group of Members who support the Government and this Bill.

I do not propose to traverse the main features of the Bill, because they have been placed before the House in such an' estimable manner by the Minister. We agree with its main features. We agree with the principle of a clear demarcation between those who are in insurance and those who are out; we believe fully in the extension to and the inclusion of young people under 16; we believe in the removal of the determination of need by the public assistance committees. I have always been against that and I am in full accord with what has been done in that direction. Further, we agree with the setting up of an Unemployment Statutory Committee. I remember in the late Socialist Government when the then Lord Privy Seal spoke in the House about the debt on the Fund being £100,000,000, he said: "What is £100,000,000? Why should we not make it £200,000,000?


Hear, hear!


The hon. Member said the same thing at that time I remember, but we want to prevent anything like that happening again. Under this Bill nothing like it will be possible with the Statutory Committee, even under a Socialist Government. We also believe in the Assistance Board. I wonder if the House will permit me to depart a little from the procedure of the Debate to refer to some special features in the Bill. Let me first express my entire satisfaction at the basis on which the Bill is founded. Some criticism may arise owing to the fact that the financial obligations are based on an unemployment figure of 2,500,000. I must congratulate the Minister on basing his plan on that figure. For years—ever since 1920 certainly—we have been pursuing a tragic development. We have never been in the legislation for unemployment insurance in front of the development of unemployment itself. I well remember that when the 1927 Act was before the House the present Parliamentary Secretary and I were the two recalcitrant Members in the Conservative party, and I believe that the Minister himself, who was then in office, rather resented our opposition.

Our exception to the 1927 Act was due to the fact that the Financial Resolution was based on the assumption that in a cycle of years unemployment would be reduced to 6 per cent. We of the industrial centres took grave exception to that, and said that that percentage could never exist within a cycle of 10 or 15 years. That has proved to be true; we were then on a basis of 9.5 per cent. For the first time in the history of unemployment insurance the Ministry have quite rightly adopted the peak figure of unemployment. I believe that thereby they will be able to place this fund on a very round and satisfactory basis. My second point is that I favour the change in the third statutory condition. The hon. Member for Birkenhead questioned the reason for the change in the present third statutory condition to the condition presented in Clause 6 of the Bill. My opinion is that it will be an advantage to an insured person, because it is taking from the insurance officer the discretionary power of disqualification and rather placing it upon the insured person himself. I believe that it would be entirely to the benefit of the insured person if the third statutory condition in Sub-section (1) of the 1930 Act were repealed. After careful consideration, I think that the Minister can be congratulated upon that improvement in the Bill. Hon. Members opposite will agree with me that we do not want to come to anything like the "genuinely seeking work" Clause. It has been difficult throughout the legislation on this great question to find an ample statutory condition such as applies here. I well remember the Debates in 1924, and when the Labour party themselves instituted the "genuinely seeking work" Clause. I want to remind them again that they were responsible for it.


And for taking it out.


Under very strong pressure.


I hope there will be no return to it. I think that the Clause will find general acceptance and agreement among all parties in the House—and with the Trade Union Congress as well, I am reminded. On the other hand—I wish to speak to the ear of the Minister himself, if he will give me a moment—I am not quite so satisfied with the definition of the benefit year in Clause 4. Why perpetuate the 10 contributions for participation in the benefit for the second benefit year? Why not say: "If a member qualifies under the first statutory condition he may at the end of a benefit year automatically enter into standard benefit"? We all know that under the Orders in Council those extra 10 contributions were first instituted. Personally, I regret that they are being continued in this form, particularly because under the Financial Conditions of the present Bill it should be possible for an insured person, if he fulfils the first statutory condition at the end of a benefit year, to continue in benefit. It may be capable of some further explanation. I wish, however, to draw the Minister's attention to that condition, which I think will create hardship.

On the other hand I should like to say to the Minister, in the third place, that I agree with Clause 12 as to the means of determination of claims. Again, I wish to say to the House that I never agreed with the extended reference to the courts of referees under Section 8 (3) of the Act of 1930. Besides being a great expense, I believe that it has not been to the advantage of the insured person. I have a case to-day before the Minister in which it is clear to me that if, under the Act of 1930, it had not been referred to the court of referees but had been decided by the insurance officer, a better decision would have been reached. Clause 12 will remove irritation and we shall get quicker and better decisions and, on the whole, save considerable expense.

I believe that the first part of the Bill now pays some little attention to Clause 35. Something was said by the hon. Member who last spoke regarding the inclusion of the able-bodied unemployed. I agree entirely with the Minister that Clause 35 has the widest form and the widest scope. On the whole, everyone who can be termed able-bodied unemployed will come within the compass of this Bill. But I am concerned to some extent—and I want to speak again to the ear of the Minister—with Clause 37, which I consider to be most important. I believe that if a satisfactory arrangement can he made under this Clause, it will remove nearly all the heart-burnings and hardships that have existed during the past two months in the administration by the public assistance committees. I believe that this is the point on which the Opposition have scored at the recent municipal elections, and are even scoring in the country. It is their main feature, and they have used it to the full extent. I want to improve that condition, and I say to the Minister—I was glad he touched upon this question in his opening speech—that it is very necessary that we should have a real definition of what constitutes a household. I will just give. one case out of many which I have before me to-day. A man's determination was settled upon this: he himself is now out of work with two at home, but in that house there is a son, a widower, who has had to come hack and reside with his parents, and in the same house—those who understand the housing condi- tions in an industrial centre like my own will appreciate the position—there is a son-in-law with his wife, but in the determination of the claim for benefit under the public assistance committee the whole of the income of that family was taken into consideration. I say that that is ridiculous and unfair.


That is the means test.


No, it is not the means test. What we want to do is to get a fair statement of what constitutes a family; whether it is father, mother, son, daughter, how far it goes and whether it extends to the fifty-second cousin. Such a case is grossly unfair.

Then I will read the second paragraph. We want to have clearly defined what is meant by personal allowance. The party opposite have scored not so much upon the bulk of the people having the means test—because it is true that in my own constituency 74 per cent. of applicants have the full determination, so that they will not have any grievance. The grievance of those who have one is due to the fact that the means test includes the total family income. What we want to do is to he fair in our determination as to what constitutes a, reasonable allowance. A young fellow is earning 49s. a week; does the whole of that constitute the family income? I personally say "No." Real regard should be had to the position of that young fellow: whether he is saving up to get married, which is an excellent thing to do; Whether he has certain other claims upon him. Under the Bill the Regulations are going to he decided by the Board. I think if we can come to a reasonable arrangement on these two points, a satisfactory solution will have been reached.

One other thing which I wish to bring to the ear of the Minister and to the attention of the House is that I believe firmly in insurance—in disagreement with the party opposite, who do not believe in insurance at all. I believe it would be a calamity if the structure of the great National Health Insurance were to fall or crumble. Under the Prolongation Act, 1928, I agree, representations were made by the approved societies that it should be altered, but I am wondering what we are going to do from now onwards until 1935 towards making legiti- mate provision for the men who are falling not only out of cash benefit but out of medical benefit as well. I am wondering if in any Clause of this Bill there could not be inserted some provision whereby an insured person could be maintained in health insurance, if not in cash benefit at least in medical benefit, and be assured for pension benefits also. I cannot go into the whole vast system of Health Insurance; it is well known that during the very periods when men need it most—50 and upwards—their pension is being menaced to a considerable extent. I was wondering whether under the determination and definition of the needs of the family some provision could be made for this class. I am very grateful for this opportunity of speaking on a matter that has absorbed my attention for many years. I want to end as I began, with the hope that the Minister, while accepting fair criticism, will welcome Amendments also. We support the Bill with the one purpose of trying to make it a real, workable, beneficent Measure.

7.13 p.m.


There are evidently many views with regard to this Bill. My own view is that the Bill contains many good points and some bad ones. It has good points from the point of view of the training of young people and in allowing them to obtain unemployment insurance at an earlier age; in giving the benefit to children of unemployed persons up to 16; in extending the period of standard benefit in many cases; by bringing a larger number of people under the ambit of the scheme who are at present on the Poor Law, and by giving a certain relief to the local authorities. For all those matters we are grateful. Nevertheless, it is only right that one should criticise the Bill on any points which appear to need special consideration, particularly from the local point of view. One's opinions with regard to this Bill must depend upon the angle from which one views it: from the angle of the local authority, or of the unemployed, or of the general public who have to pay rates and taxes.

The point of view which I want to take is not that of the local authority, but that of the unemployed. I want to direct my criticism more particularly from the point of view of distressed areas, and particu- larly of shipyard areas, because it is only in areas like those that one can really see the merits or demerits of a Bill of this kind. In the fortunate areas, where unemployment is not particularly heavy, and the number of men on transitional payment is few, one does not realise the seriousness and immensity of the problem. I approach it from the point of view of an area in which there are 11,000 unemployed, and 80 per cent. of those are on transitional payments. That means that the bulk of the people in the area are unemployed, and that the bulk of them have been out of work for so long that they have fallen out of standard benefit.

Looking at the Bill from that point of view, one is impressed by the fact that a new statutory condition for obtaining standard benefit is imposed. An unemployed man, in order to obtain standard benefit, must prove that he is unable to obtain suitable work. I regard that new condition as a most vital part of the Bill. We have had great experience of a similar Clause which contains the words "genuinely seeking work and unable to obtain suitable work." Under that Clause, in order to obtain the requisite evidence to qualify for benefit, men had to spend long hours every day tramping the soles off their boots in seeking for work in order to satisfy the tribunal before which they came that they had been, in fact, unable to obtain suitable work. Then, when they appeared before the tribunal, they were met time after time with the question: "Have you been to this place, or to that?" Even when they had a long list, as many of them had, of places which they had visited, with the dates of the visits, they were often asked: "How do we know that you have, in fact, visited these places?" In the result, scores of thousands of men have been deprived of benefit, for the simple reason that they were unable to satisfy the tribunal—the onus of proof resting on the man—that they had been unable to obtain suitable employment.

In the practical operation of that Clause, it was possible for the determining authority to deprive any man of benefit. All that had to be done was to indicate a place here or a place there which the man had not visited and say, "You have not satisfied us that you are unable to obtain suitable employment." That Clause unquestionably operated most harshly and unjustly, and I do not think anything tended more to sap the morale and to put the iron into the souls of those unfortunate men than the manner in which that Clause was operated, and I say frankly that I could never conscientiously be a party to imposing upon unemployed men the bitter experiences which they had to go through in those days. It may be said, and, indeed, will be said, that the Clause in this Bill is not the same, that the old Clause contained the words, genuinely seeking work and unable to obtain suitable employment," and that this Clause says only "unable to obtain suitable employment." I have reviewed a great number of the cases with which I had to deal under the former Clause, and I cannot, find one in which the man could not be just as easily disqualified under this new Clause. If a man has to prove that he cannot find something, it is obvious that he must first prove that he has genuinely sought for it.

If there is any distinction between the old Clause and the new, it must be clear that, in practice, it is a distinction without a difference. Under the Act of 1930 a new Clause was substituted, a very carefully drafted and well-thought-out Clause, which specifically defined the obligation of the applicant as to proof. That Clause has now been in operation for three years, and I suggest that it has not worked unfairly and has not been abused. Therefore, I see no ground whatever for the substitution of these new words for a Clause which has operated well. As the practice of firms engaging men through the Employment Exhanges is growing more and more, that Clause will work still better in the future.

The next point with which I wish to deal concerns the training centres which, it is proposed, shall be greatly extended. I wish to ask whether it is the intention that married men should go through these training courses? It has not been the practice up to the present in the area with which I am familiar. They were sent a few years ago, but the practice was dropped, and they are not being sent now. If they are to be sent, what will be the conditions under which they go? Are they to receive full unemployment benefit in respect of themselves and their dependants, or is there to be a substantial deduction from that benefit for the maintenance of the men while in training? In the latter case, an inadequate amount will be left for the home, and there will be either non-payment of rent or else the wives and children will have to go short. This may seem a small point in a Bill, but it is a very big point to married men who may be affected, and I hope the Minister will be able to satisfy our minds upon it. Further, if these training centres are to be greatly developed and extended, ought there not to be some kind of independent inspection of them? Men who have been sent to training centres have very often made complaints, some of them, certainly, unjustifiably, but as these local advisory committees are being appointed, I would ask the Minister whether powers should not be given to the committees to visit the centres in order to satisfy themselves that they are being conducted properly in the interests both of the public and of the men.

Turning to Part II of the Bill, one of the most important matters raised concerns the people who will be within its ambit. The definition of those who are included speaks of men whose "normal occupation" is employment of certain kinds. We have had experience of that word "normal" in existing legislation, particularly in cases where a man had to prove that he was normally employed in insurable employment. Under existing legislation, large numbers of men have been disqualified, on the ground that they were not normally engaged in insurable work, on the bare fact that they had not been employed for a certain period of years. In areas where there is great depression and where thousands of men are out of work, and with no chance of getting work, they are disqualified under the construction given to that Clause. Another section who have been disqualified are men who were never out of work in their lives until the present depression came. After a spell of unemployment, they tried to strike out on some new line of their own. They may have taken a little shop, or have tried hawking, or something of that kind. They did not want to remain idle, but were anxious to earn a living. They tried these other methods for a year or 18 months, until the venture failed. Then, when they returned to the Employment Exchanges and applied for benefit or transitional payments, they were informed that they were no longer engaged in insurable employment; although until the depression they had never done any other work during their lives, and only tried some other occupation because they could not get their usual work. That provision has affected many scores of thousands of men, and I ask the Minister whether it is not correct that none of these men will come under Part II of the Bill and that they will still have to remain dependent on the Poor Law.

It only remains for me to deal with the case of those who form the majority of the unemployed in some of our northeastern areas, that is, men who have fallen out of benefit. They are dealt with under Clause 37 of the new Bill. The great fault, or a great fault, of the existing system is that the public assistance scale is applied to them. The consequence is that we find different rates being paid to unemployed men in different districts all over the country. The amounts which are being paid in various areas are grossly inadequate, while in others they are far greater. I doubt whether the majority of hon. Members know what kind of payments are being made to great numbers of the unemployed. Let me illustrate what they are, by the rates paid in the city with which I am particularly associated. A single man living with his parents gets 6s. per week. A single woman living with parents gets 4s. per week. The amount paid to an unemployed man in respect of his dependent children, not up to the age of 14, but up to the age of 18, is 2s. per week.

Reference was made by the right hon. Gentleman who spoke for the Opposition as to what was requisite barely to maintain a child up to the age of 16. Those conditions are intensified when one has to apply them up to the age of 18. Hon. Members may imagine what kind of food and clothing could be provided for a growing lad, between the ages of 16 and 18 years of age, for 2s. per week. Somebody has to suffer, and anybody who knows Tyneside mothers knows that it is not the children who chiefly suffer. If a son or a daughter is working, the greater part of their wages is deducted from what the parents would receive. Because a daughter, earning 30s. per week, is living at home with her parents, 18s. 6d. is de. ducted from the amount which the un- employed father would have got. If a son earning 45s. is living at home, not a penny is paid to his unemployed father or in respect of his mother and five, six or seven of their children.

Those are conditions which, when one appreciates them, impose an enormous responsibility in regard to the line of approach to this Bill. I could quote an instance where two children of a soldier, who was killed in the War, were awarded pensions of 13s. per week. The mother re-married, and the stepfather was unemployed. Because of those pensions, 9s. was deducted from what would have been the transitional payment made to the stepfather. In other words, the greater part of a pension given for the benefit of the children of a soldier, who gave his life for his country, is taken away from the stepfather's assistance. In this matter I am giving only my own personal criticism; I am not representing the views of my hon. Friends who are around me. It is with those considerations in mind that I approach Clause 37.

I look to see whether the public assistance scales can continue to be applied; I see nothing whatever in the Clause to prevent the Board from making regulations for the continued application of public assistance scales. I turn to see whether there is anything in Clause 37 which would prevent the Board from making regulations giving different rates in different parts of the country; I find no words which would prevent them from doing that. At great meetings of hon. Members, representing distressed areas and irrespective of party, a resolution was passed, some months ago, adopting two principles which were, first, that public assistance scales ought not to be applied with regard to this matter, and. secondly, that the rates throughout the whole of the country ought to be the same, subject only to the difference in rents and any difference in the cost of living in various areas. We understood that the Ministers accepted those principles, but the principles are certainly not embodied in the Bill, and there is no obligation on the part of the Board to act upon them.

I have to consider, further, whether, in this Bill, there is any security that people, living under the conditions which I have indicated to the House, are to have any better conditions in the future, and whether there is anything to prevent, those conditions from being perpetuated in the new regulations. I find nothing whatever. There is nothing to indicate what the new scales are to be. There is no maximum and no minimum, and there are no conditions. No instructions are given to the Board, except that they have to take into account the resources of all members of the household of which the applicant is a member. I do not know what definition will be given to the word "household," but I take it that it means persons occupying a common table. Consequently, the resources of relatives by marriage, living in the house, will have to be brought into account. I assume that a lodger living in the house, and eating at the same table, is also a member of the same household, and that his resources will be taken into account. Secondly, due regard has to be had to the personal requirements of those members whose resources are taken into account. Every public assistance authority at the present time acts upon those two principles, and all the scales of public assistance in existence throughout the country, as well as the scale to which I am alluding in particular, are based upon those principles. Therefore, the adoption of those principles will give no remedy or relief to anybody who may be affected.

Who are to make the regulations? Are they to be persons thoroughly acquainted with the conditions under which our poor people live? I see no requirement of any qualifications for the Board, except that they are not to be Members of Parliament, and that they are to be deemed worthy of the receipt of a substantial salary. It is said that the regulations will not be binding until the House of Commons has approved them: but the House cannot amend them. The House will have to vote "Yes" or "No" upon them. However many injustices are found in them, it will have no power to rectify one of them. No doubt we shall be told, when the regulations are brought up to the House, that the House has either to accept them as they stand, or all the people who are affected by them will be thrown upon public assistance, which will indeed be the case.

What protection is given with regard to administration The assessments have to he made by an officer of the Board. At the present time, with regard to standard benefit, there is always an appeal to the courts of referees, and, where assessment is made by a public assistance officer, the applicant can always come before the public assistance committee. Under the new proposals, there is no right of appeal, except on the one point of eligibility, which is referred to earlier. 'With regard to the actual assessment, there is no right of appeal in any case. There is only a right of appeal if the chairman thinks fit, and he only has the right to allow appeal in certain nebulous oases. I very much question whether a great number of cases will now admit of appeal. The protection which is afforded to all who may come within these provisions appears to me to be inadequate.

One has to approach these proposals, therefore, with a sense of responsibility, because they concern the biggest thing in the lives of most of the unemployed people who are receiving transitional payments. A shilling a week to those people is of far more importance than ls. in the £ off the Income Tax is to a great many others. A few pence make all the difference in the world in the homes of many of those who are just living on the border-line. Because of that sense of responsibility, I feel that the regulations should be in the Bill, so that the House of Commons can pass an opinion on them in all their details, and can accept responsibility for them. Hon. Members, with all the experience which they have had in their areas, are eminently qualified to deal with a matter of this sort. I do not question for a moment the great sympathy of the Minister of Labour and the Parliamentary Secretary, in regard to the unemployed, because I know from my personal experience that they have every sympathy, but I do not think that the Government ought to shelve the responsibility on to some ad hoc committee about which we know nothing, and when about the bases upon which they will act we are uninformed.

I submit that the principles upon which the Board have to act ought to be inserted in the Bill, and that there ought to be opportunities for the House of Commons to discuss in detail the regulations and to propose any amendments in them which, in the opinion of the House, ought to be made. It may be said that the Bill may make better the conditions which I have described in my area. I hope it will. It must, if there is any sense of justice at all; but it may not. It is a gamble, and I ask myself, what right have I to gamble with the lives of those people? In these circumstances, I find myself unable to agree that the provisions of the Bill are at all adequate to meet the situation.

7.45 p.m.


It can at least be said for this Bill that it concerns, possibly, more people than any other Measure which this Government, or, indeed, any other Government, could introduce at any time. Every line of the Bill has a human interest. Every word, indeed almost every comma of the Bill represents, to me at least, the deepest human interest. I must confess to feeling often a little impatient during the Debates in this House. I listened to a. speaker the other day who said that he came into the House and heard wrangles on unemployment insurance, and he asked, "What are these compared with the great questions of peace and war?" It may be that I view things differently. It may be that I mix with different people, that my standing is different, and that the sources from which I obtain my views are different; but the folk whom I mix with ask, what do peace and war mean to them? The great mass of the men and women that r meet are often totally indifferent as to peace and war. Indeed, I often meet young men who—and I think it is a terrible tragedy—would almost welcome war. War means, to them at least, two things which are now denied them. It means that during war food and clothing are secure, and that there is change, there is variation. To these men peace means starvation and death.

I listened to a housing Debate the other day. Far be it from me to say that housing does not matter, for I represent what is commonly called the slum area of Scotland. But when I address my constituents they ask—and I share their view—what does a new house mean to them? A new house only means that, unless you give them an added income, their poverty is more transparent than it was before. Consequently, housing, peace, even education—all of these things, great as they are, and I believe in 'them all, leave me cold in comparison with the problem with which this House is now confronted. I confess I see in this Bill elements which, to my mind, ought to be fought by a House of Commons of decency and repute. I wish to make some general criticism of the Bill, and, if I do not follow the last speaker in his criticism, it is not because I do not agree with all his points. I feel, however, that in this Second Reading Debate the Bill ought to be fought as much as we can on general principles first of all. Consequently, I propose to examine the Bill from the point of view of what I think are the general principles which underlie it.

Before I do that, however, I would like to say a word or two to those who speak for the Labour party. I hope that what I say will not be treated jocularly, but I want it to be clearly understood in the House that I do not speak here as a disgruntled member of the Labour party of former days. I speak for a group whose views are entirely different—a different party, a party which is different in many ways, and cannot in any way be associated with them. But I would like to address to them this question, because, not only to-day, but on other days, something will be said about the position. What were the Labour party's views? They stood for raising the school-leaving age and for added pensions, and between those ages what was to happen? I am aware what was then the view of the Labour party, but I do not understand it to be their view now.

I read the other day a pamphlet entitled "Socialism and the Condition of the People," which was issued just before the last conference at Hastings. When I picked it up and saw that heading I expected that it would contain two things—first, a rough description of the conditions of the people, and, secondly, an immediate solution for those conditions. I found that one half of the pamphlet dealt with banking and finance; another small portion of it dealt with the raising of the school-leaving age; but the conditions of the people, which are the thing that matters now—the unemployed—were summed up in five lines, to the effect that the unemployed, their insurance and their conditions had been remitted to a joint committee of the Parliamentary Labour party, the Labour party Executive, and the British Trades Union Congress General Council, and they would report in due course. That was the pro- gramme of the Labour party at the Brighton Conference, not the programme laid down here.

I am by nature much more moderate than the Labour people. I have never stood as an extremist; I have been moderate in my addresses—more moderate than they. I say this to them, and I say it frankly: "You have plans for banking, but no plans for the unemployed. Why?" The only answer that I can see is that banking is 10 years ahead, but that plans to deal with the unemployed would mean that they would be committed to them now, and, therefore, they are not committed to anything at all. [Laughter.] It is not a laughing matter to me; it is a terrible, grievous matter. I am a moderate person. I would sooner promise a shilling that I intended to give than two that I did not. I say that it is a tragedy. I would welcome it if I could do so, but I cannot reconcile honesty with these views. I will come back to that matter later, because it has other aspects.

Let me now examine Part I of the Bill. I agree with the right hon. Gentleman the Member for Wakefield (Mr. Greenwood) that the Minister's speech was a capable speech from the point of view of introduction. It sketched the rough history of this matter. I am not going over that history, but will start from 1920. In 1920, as the right hon. Gentleman reminded the House, the Government in its wisdom increased the number of insured people from 4,500,000 to almost 12,000,000. But I would ask the House to note this fact, which he has never stated, but which has now been rendered more important than ever. When those 4,500,000 were insured, there was a surplus of £24,000,000 belonging to the 4,500,000. The Government of that day added 7,000,000 people, or rather, close on 8,000,000. Within three months of their being added, the great bulk of those 8,000,000 became a charge on the fund, to which they had never contributed a penny, and the surplus of £24,000,000 was confiscated by the Government.

This has never been an insurance scheme. If any insurance company were taking in new members, they would have insisted on a capital payment equivalent to the capital sum which was standing there to the credit of the fund. The scheme was not then on an insurance basis at all, and since then it has drifted on. In the first Clause of the Bill, dealing with juveniles, the insurance principle is evaded. A person there starts paying contributions, but he is not entitled to receive benefit until he reaches the age of 16, although he may have paid sufficient to give him the statutory qualification. I go further, and say that you cannot deal with unemployment to-day on an insurance basis.

I noticed in the speech of the Minister a slight incidental sneer, if I may say so, at the economists. He said that they were generally wrong. That is true; but who are his advisers here? There are two sets, the one the Commission and the other his officials. Who are on the Commission Economists. Who are his advisers? The same economists who have advised him on every Act in the past, and who have been wrong. The Blanesburgh Commission was appointed with a great flourish of trumpets when the right hon. Gentleman was Parliamentary Secretary. It was to examine unemployment insurance and put it on a permanent basis. It heard evidence. The Government Actuary reported on the basis of 800,000 unemployed. He reported, on a definite actuarial basis, that that would run. But in 12 months the scheme was proved to be actuarially unsound. To-day, the Minister comes forward with a scheme based on an estimate of 2,500,000. I noticed, however, that, learning from past Ministers, he was very cautious. He said, "I do not know the figure for certain; I am hopeful that it may be less, but it may be more." If the figure does get more, what is the position? If unemployment goes up, the fund can reduce even statutory benefits. If the unemployed reach 3,000,000, the fund must do one of three things, increase contributions, decrease benefits or make the conditions more stringent. If -the unemployed go up, as I see it, the conditions under Part I must be made worse. My friends and I definitely take the view that we are not in a cycle of trade that is bad. We think trade is booming at the moment. We think it is possibly reaching almost its peak and that we are flourishing because of two things, the boom in housing and the boom in the production of semi-war or war material. When that boom passes, back comes a greater flood of unemployment than you had before. Under Part I the Board must keep the fund financially sound and they must recommend that the unemployed be more strictly dealt with than ever they were before.

There is another aspect that I should like to draw attention to and that is the repayment of the debt. We used to hear that the Tory party had a certain standard of what they called Oxford, Cambridge, Eton, or Harrow honour—the honour of being sportsmen. I often wonder if that is true. I listened to the Prime Minister the other day saying that the salary cuts of teachers, doctors and civil servants would be reconsidered when the Budget statement was made in April or May. You are not going to do that with the unemployed. Their cuts are fixed permanently. The first thing that ought to be done before the teachers, before the doctors, before Members of Parliament, before anyone, is to restore the cuts of the unemployed. This Act is only to start operating in the spring. The Board cannot recommend an increase in unemployed benefits till 12 months later at the very earliest. I do not blame the teachers, or even Members of Parliament, for agitating for their salaries, but in the meantime they will be very active. The unemployed are cast aside. The debt proposal seems the most unsportsmanlike conduct of all. Under Part I we are repaying debt, principal and interest, at the rate of £5,500,000 per annum—two payments of £2,750,000 each year. That is the first charge on the fund. That is made statutory. If there is no money, the board can recommend a decrease of benefits, but it cannot recommend a decrease of the amount of interest and principal. They can put the poor up to pawn, but they cannot touch the financial bloodsuckers of Britain. They are immune. In my view that £5,000,000 ought to be used to bring back the benefits to what they were before, but the charge for interest and for debt must be sacred. What matter the unemployed, or 15s. or 2s. a week, to those who control the finance of the country?

There is another aspect of this. There is the revision of "not genuinely seeking work" in its modified form. "Not genuinely seeking work" has been working now for years—" not normally in insurable employment" and "genuinely seeking work." There is a fact which the House of Commons has never noticed before and which is only coming to light now. When the last Act was passed, we thought that anyone who had satisfied the first statutory condition of 30 stamps in two years was normally in insurable employment, but that is not the case. The moment a person draws his 26 weeks benefit he may have his 30 stamps in two years, but he is subsequently to be dealt with as not being normally in insurable employment and he has to satisfy "not genuinely seeking work." "Not normally," when it was first introduced, was meant to apply to two classes—to a man who started business on his own account or to a person going abroad. Consequently, when it was introduced, comparatively few were disallowed. The moment we abolished "not genuinely seeking work" even under the Labour Government the "not normal" figures went up six or seven times what they were before, because the Regulations had been taking an entirely different turn from what was meant when the Act was first introduced.

I know the Minister will say it is not intended to use it as such, but there are two simple answer to that. The hon. Member for Sunderland (Mr. Thompson) was not quite accurate. It was not the Labour party that first introduced "not genuinely seeking work." It was applied in the first place to what was called uncovenanted benefit by the Tory Government. What the Labour party did for the first time was to apply "not genuinely seeking work" to standard benefit. Tom Shaw and the late Dr. Macnamara both let it go through. They said they would give their word of honour that, when the Clause passed, only genuine cases would get benefit, and, if they did not let it go through, they would open the floodgates for undesirables to get benefit. That was in my early days and, not knowing things, I let it go, Mr. Campbell Stephen and I withdrew our Amendment, and hundreds of thousands of men and women were disqualified in the most brutal fashion. It is not, therefore, what the Parliamentary Secretary says, it is how the Act will be carried out by those who administer it from day to day.

The claim is made in the most astounding way that this is an insurance scheme. It has never attempted indeed to be an insurance scheme. I went before the Commission. I must compliment the Labour party. If they had searched Britain, they could not have found four harder-faced men. I do not know whether they sent Snowden out specially to look for them. They were equal to the Chancellor and the last Minister of Labour in the Labour Government. Where is the insurance principle here? The railwaymen are out. They are good lives. They are just as much an industry as are the pattern makers. Could one imagine a sillier thing in insurance than say, a pattern maker being inside the insurance scheme and then being outside if he became an engine driver. Where is the principle of insurance? Corporation servants can contract out. They are among the best lives. If they have a superannuation scheme they can, and do contract out. The best lives are out; only the bad lives are in. Members of Parliament are out, and this is where I come in. Maybe we shall be in; some of us at least ought to be in. A doctor should be in. Why should one person be out and another in? I have a brother at home who has been promoted to be manager in a place at £5 ls. a week. He goes out. His ability and capacity to pay have increased, and yet, because the community have given him a better job with more ability to pay, he is not asked to pay at all.

Really, what insurance principle is in it at all? You have taken certain fragments in industry and put them in. You have never even run the insurance scheme upon an insurance basis of any kind. I do not Name the Minister for railwaymen and others being out of the scheme, because every Government is faced with unions and employers of one sort or another who come along and say that they do not want the scheme. There is no reason why they should do that. No insurance company could run a business by having its insured lives confined to those likely to be subject to the conditions for which they are mainly insured.

It is useless to talk about the sanctity of the insurance principle. I saw in the papers a short time ago a report concerning a certain man who received a long term of imprisonment for "doing" insurance companies. Suppose that man and his syndicate had been a little more successful and burnt out more places, is there an insurance company which could have faced what are called the accidental risks arising therefrom? They could not have done so. The risk would have been too great and too exceptional. The risk would have ceased to be accidental. Unemployment has ceased to be accidental in the same way in these days of rationalisation. As the hon. Member for Newcastle East (Sir R. Aske) knows, shipyards are being deliberately shut, and rationalisation is being carried on as a planned aspect of capitalism, and men have ceased to be accidentally unemployed. Therefore, this ceases to be an insurable business, and for those reasons Part I does not appeal to us in any of its aspects at all.

I confess that I view Part II of the Bill with even greater misgivings. I listened to what the Minister said about the unpopularity of the means test. He said that the reason was that people had to declare their income to public assistance people whom they knew well, and therefore they might rebel. I think the Minister must be a bit simple. The real reason against the means test is that it robs the people of that to which they think they are entitled. What is the alternative? You have still to tell somebody. You have, for instance, to tell Tom Johnston or George Buchanan, who are employed by the Glasgow Public Assistance, your means, but in future, instead of telling George Buchanan you will tell James Maxton, who is employed by the Ministry of Labour. What is the difference? There is really no difference at all. If a man wants to talk about these things, whether he is employed by the Ministry of Labour or by local people, it will not keep him from talking about them. The local people are as capable of keeping things secret as are the employés of the Government. But what is the Minister doing now? He is substituting national Poor Law for local Poor Law. I submit that the change only means a transfer from one place to another. In other words, a man is to have the hall mark of a national taint rather than a local one.

An hon. Member spoke about two children who bad a pension because their father was killed in the War, and stated that the money was taken into account as means. That is the means test, You cannot get away from it. Someone else spoke about the family and said that you should have a definition of a family. You cannot define "family" under the means test. A means test relates to money which is coming in. The consequence is that every member of the Conservative party and everyone who defends it or tries to modify it only brings into greater relief the impossibility of the situation. I see in Part II of the Bill the return of the national soup kitchen. I also see—and this is the first time a Government has ever attempted to do this—an interference with the morals of men. Whether a man had a wife, or two or three wives, or illegitimate children, no one interfered, but now for the first time the Government are to interfere with the morals of men. People are to be liable to be adjudged to be of bad moral conduct and standards. I sometimes marvel at the impudence of men who look at moral standards. The Prime Minister on moral standards makes me angry. The man who took halfpennies from the poor; the man who during the War stood up in 1917 urging men to defy the law, comes here and talks about moral standards.

Somebody may have an illegitimate child, some man may be living with a woman with whom he ought not to live. If the truth be told, I have never attacked any Member of this House in his private character. My own character is not without blemish, and I have never felt that I was good enough to say hard things about the private characters of my colleagues. Do not let us start to harry the poor about their private characters, by inquisitions of all sorts. The Poor Law has done it, but this is the first time it has been done in an Act of Parliament. Under the Poor Law they did it with an inefficient service, but for the first time in the history of Britain the Government are setting up a definite, organised force, with an organised Government behind it, with the power of the State, to inquire into the private, minute lives of the common people of this country. What is Glasgow, what is any other place compared with the organised power of the Government under this scheme I It gives them power not merely to say whether money shall be given but whether assistance shall be given in kind. The Government are starting this inquisition with the so-called bad people. It will be easy later on to apply it to the good people. Once you have accepted a standard such as this, it is only a matter of time before it is applied to almost everybody.

There is another aspect of the matter which calls for attention. Why should a man be in Part II? I waited to hear the Minister explain that point and I should be indebted to anyone who would answer that simple question. It is a question that I wished to put to the Labour Government about the Anomalies Act. The reason why a man is put into Part II is that he has not 30 stamps. In other words, he is transferred from his fellows because the State cannot get him 30 weeks work in two years, because the nation will not organise its powers sufficiently to give him 30 weeks work in two years. The first group means the Fund. The Fund is the holy of holies. It has to pay a debt to the bond holders. The Fund must be kept solvent. What is going to happen in the Exchanges? The men who are in the Fund will be given the jobs when they come out of work. Those in Part I will get the jobs because the Fund must be solvent.

You are going to set up among the working-classes a division which I sometimes see slightly in my own union. In that union we have large numbers who are out of work and others who are in work, and when one sometimes goes to those who have been in employment a long time one almost feels that they are a nation apart from those who have been a long time out of employment. Therefore those who are in Part I will get any of the jobs that are going, they will be starred, while the others will drift down until they become absolutely hopeless, and the nation will try to keep them as cheaply as it possibly can. Far from seeing progress, in Part II I see reaction. If I must have a means test, give me the local authorities' means test. Under this Bill the conditions will be worse for the great mass of people. I should have thought that the Government would have restored the cuts of the unemployed people and made up the allowance to 17s. I heard a very eloquent speech the other day from the hon. Member for Aberavon (Mr. Cove). He spoke of the malnutrition that was setting in because of the under-feeding of the children. That was prevalent also during the time of the Labour Government. Even their scales could not keep under feeding from the people. The difference now is that the malnutrition is developing with greater speed than before.

I make an earnest appeal to the House. We are asked to take a step in this Bill which we ought not to take. The Government have great and unlimited power and they ought to consider very seriously what is going to be done. I think the evidence given on behalf of the Trades Union Congress before the Blanesburgh Commission was unanswerable, namely, that every man and woman in Britain engaged in earning an income of any kind should be brought within the scope of national insurance. Everybody should make a contribution according to their capacity to pay. In that respect the Trades Union Congress were sound. To-day people are engaged almost in a conspiracy to defraud great masses of the people. A promiment Liberal speaker the other day said that so long as a nation had unemployment that nation was at war; so long as it had unemployment it could not have peace. That statement was true. But would a nation carrying on war deal with its victims in this way? Not for a moment would a nation tolerate it. In this Bill the nation is dealing with its victims in the harshest possible way.

I want to say a word about the Commission itself. The Labour party have a terrible responsibility for appointing the Commission. This Bill, in my view, would not have been possible but for the propaganda which went on before the Commission. Worst of all they manned the Commission with people who were shocking from a Labour point of view, and gave them their terms of reference. It was to make the position of the unemployed worse, and these officials went and based their investigation on an unemployment level of 3,000,000. The Labour party have that responsibility—I do not envy them—and cannot escape it. They passed also the Anomalies Act, and to-day this new national hoard, outside the control of Parliament, is only the Anomalies Act in a greater degree.

The Bill should be rejected on three main grounds. First, that the amounts are insufficient to support men and women who are out of work. Secondly, it institutes, for the first time in the history of this country, a national Poor Law system which will demoralise the great mass of the people. In the third place, it creates in this country two classes of working people. Those who come under Part II will be regarded even amongst their own workpeople as outside the working class population. A Government which does this deserves the severest condemnation. The Bill will be fought by us at every stage, but I suppose it will go through practically un-that may happen either of which will be amended. Outside there are two things bad for the Government. It may be that the Bill will be wrecked by the unemployed in despair who will see that nothing can be done for them, no hope for them, or, it may be that the unemployed will offer greater resistance to it than has been offered to any other measure. When the means test was introduced the nation rocked with indignation on the part of the masses of people, but I venture to say that when this Bill is passed, the rocking which took place when the means test was introduced will be nothing to the determination of the great mass of the people to see that nothing is left undone until the Bill is rejected and those responsible for it are hounded from public life.

8.40 p.m.


I should not like to interfere between the hon. Member for Gorbals (Mr. Buchanan) and Members of the Labour party, and I do not think that the House would appreciate it if I delayed at this late hour to restate the arguments, so often stated in the past, in favour of the means test. Therefore, perhaps the hon. Member will pardon me if I do not deal in detail with his speech because as far as I can see these two topics ran through the whole of it. He seems to be pursuing his role as a prophet of gloom, there is not a glimmer of hope, and it is a little difficult to see how in these circumstances, when the country, as he imagines, is going downhill, he is going to get the money to pay for all these things. I could understand, if he believed we were on the eve of a boom loosening the purse strings and paying out money and trusting to the future, but he says that he cannot believe that any improvement has happened, indeed that it should not happen if his theories are right; in that case how is he going to raise by any process sufficient money to increase benefits indefinitely? I will leave that topic there and come to one or two other points in the Bill.

It is plain that what is wanted in a Bill of this sort is constructive criticism. We do not get very much from the official Opposition and, therefore, I think it is the role of supporters of the National Government to offer criticisms where they see the need for them. At the same time I should not like it to be thought that if I devote almost all my time to offering a few criticisms it in any way indicates that I am hostile to the Bill. Indeed, it is impossible for a Government to introduce a Bill of 60 Clauses without practically every hon. Member having something upon which he does not see eye to eye with the provisions of the Bill in matters of detail. There are, however, three big points in the Bill which, I think, supporters of the Government are unanimous in supporting. The first is that the financial stability of the fund will now be finally assured. I do not think there is anyone who really desires this fund to be subject to the dangers and disasters which have overtaken it in the course of the last 10 years. Secondly, I welcome, unlike the hon. Member for Gorbals, the transfer of the services under Part II to a national board; and for this reason, speaking as a Scotsman. Prior to 1921 there was no charge at all under the law of Scotland on local authorities for the able-bodied poor, no able-bodied man was entitled, until the emergency legislation of recent years, to get any relief from the Poor Law, and, accordingly, I welcome the fact that the Bill relieves local authorities in Scotland of a burden which they never ought to carry. On this point, therefore, from a Scottish aspect, the Bill should be welcomed.

In the third place, I like the provisions for juveniles. I say frankly that for a long time I have had the greatest doubt as to whether it was a good thing to bring juveniles within the scope of the Bill, but the more I have considered the matter the more I, in my humble way, have come to the conclusion that the Government are right. But I would ask the Minister to explain a little more in detail what the proposals for the instruction of juveniles include. I do not understand whether it is intended that a juvenile who is required to attend a course is required to attend compulsorily at set times, or whether he can leave any morning he likes on condition that he has found a job of work. I can see argu- ments both ways, but I think there must be provision that a juvenile who gets an opening—it may lead to a very important position ultimately—ought to be entitled to take that position as soon as it offers.


Let him out to play.


I think he ought to be entitled to leave to take any offer of work that comes along. Some of the other proposals for training and instruction are undoubtedly compulsory, but I am not quite sure whether it is possible to require a man to continue attendance after he gets work. I imagine not. But if it is possible for a juvenile or adult to leave this course of instruction any day that he may get work, of course that means that it will be extremely difficult to conduct any such course of instruction, and what will happen in effect will be that these courses of instruction, extremely valuable as they are, will really amount to giving occupation to someone who would otherwise be idle on the street, and that they will not really amount to instruction at all, because you cannot instruct people unless you have them for a certain time and put them through a certain course.

Therefore, I hope that there will not be expensive proposals for the development of premises and schools and courses, and the engagement of teachers and all the rest of it, involved in this scheme. 1 ask the Minister to indicate what will be the burden put upon education authorities in England and Scotland as a result of these proposals. I understand from the financial memorandum that the burden on the Exchequer and the fund is in each case under £500,000 per annum, but I have not seen any sign of what the burden on education authorities is to be. I hope there is to be no substantial addition to the £1,000,000 earmarked for this purpose already. A few words about adult education or instruction. I see the force of the argument that it is necessary to have compulsory powers in the Bill, but I ask the Government to be extremely chary of using them. One knows quite well that if you get a lot of people volunteering to take a course, the atmosphere of that course is utterly different from what it is if you have a proportion of people who are there unwillingly and go only because they are compelled. I suggest that in the interests of. those who desire to be. helped it is of the utmost importance that so far as possible these courses should be kept for volunteers.

I pass to a matter in connection with Part II, namely, the functions of the new Board. I entirely agree with the Government that it would never do to put this Board beyond the criticism of Parliament. I also agree, perhaps not quite so enthusiastically but still I certainly do agree, that the details of individual cases should not be subject to argument on the Floor of the House. The life of any Member of the Government who might have to do with this matter would be a burden, and this sort of thing would clog up the channels so much that the really necessary work of the Department could not go on, if every individual was able to get his case brought up here. Therefore, it seems to me that the Government have taken the right course in saying that, so far as regulations, scales and conditions are concerned, they shall be subject to this House, but that so far as the administration of these regulations and scales is concerned, that is a matter with which this House is not to concern itself.

But there is one matter with regard to the drawing of the line between the two aspects, in which I think the Bill might be improved. As the Bill stands this House has to give a general rejection or approval of any regulations that come up. I see no reason for that at all. It is not as though the Minister could not touch it; it is not as though the decisions of the Board were sacrosanct. The Minister can amend as much as he likes, and can cut here and carve there. He tells the House why he has done it, but the House has not to touch the Minister's handling. With all due deference to the Minister I can see no reason why his handling should not be touched. If the Board is not final the only other final authority must be this House, not merely on general questions but on details. This question cannot be taken out of politics. There is no use trying to do it. Every one of us knows that when we go back to our constituencies we must answer for every detail of the regulations that are passed, whether we voted upon those details or not. That is in the nature of things.

This is not a question like the Import Duties Advisory Committee. In cases of that sort—I speak for myself—Members of this House are not experts in the matters with which the Advisory Committee deals. Those matters are much more matters of international imports and commerce than of politics. But I claim that any six Members of this House, selected at random, are just as capable of drawing up these regulations, if they take the time, as anyone appointed from outside this House. We in this House know the circumstances of the need test in a way in which we do not know the circumstances of matters that come up before the Import Duties Advisory Committee. I submit that we ought in the last resort to be entitled not merely to confirm these things in bulk, but, if desired, to suggest and pass Amendments. I see the difficulty. I would not dream of insisting were this concerning the rules and the solvency of the fund. If you have a fund and you are going to make changes, if you add something here you must take away something there in order to achieve a balance. In that case there is an argument against this House touching details. There is no question of the solvency of any fund involved in Part II. Under Part II the need in every particular set of circumstances is to be decided, and I should regret to think that the regulations about, let us say, the amount of family income to be taken into account were passing out of the hands of the House. That seems a major question of principle, and this House would be neglecting its duty if it did not deal with such a question.

There is one other matter which I mention by way of a slight criticism. It is with regard to the debt. Every speaker whom I have heard so far in the Debate has assumed that either the debt is to be wiped out altogether, or else the whole of the debt is to be imposed on the fund. There does not seem to be any necessity to adopt either alternative. The Royal Commission has not recommended either. I do not blame the Minister for not telling us why he has departed from the Royal Commission's recommendations. One cannot expect that every point in a Bill of over 60 Clauses can be dealt with in the opening speech, but I ask that in the course of the Debate we should have a clear explanation of why the Royal Commission's recommendations have not been followed in this respect. It may be that their recommendations missed out something; it may be that the £1,500,000 which they suggest ought to be £3,000,000. That is a matter for calculation and estimation. But surely a part at least of this sum never ought to have been a debt on the fund at all. It was because of the mismanagement of the fund, largely by hon. Members opposite. The country, having put hon. and right hon. Gentlemen opposite into tie saddle, ought to pay for their mistakes and not the fund.

To put a burden of this sort upon industry instead of on the country generally, because that is what it comes to. is a proposal that ought to be reconsidered. I would not ask, as some hon. Members have done, that the whole debt should be wiped out. It is plain that part of the debt is, properly speaking, a debt on the fund, but is equally plain that another part of it is not. Therefore, I ask the Government to reconsider this matter; to explain the circumstances in a little more detail, and to modify the proposal about the £5,500,000 in the light of the considerations stated so fully by the Royal Commission. Further, the result of the extension from 26 weeks to a maximum, in certain cases, of 52 weeks is practically a saving to the Treasury because this 167,000 people of whom we have heard to-day are taken off the Exchanges and put on the fund. Therefore, the Treasury is saving very year a matter of nearly £8,000,000 at the expense of the fund. In these circumstances the Treasury might surely be a little more generous when it comes to the £5,500,000 interest and sinking fund on the debt. I venture with some hope to ask the Government to reconsider that matter also.

I am afraid that most of my remarks have been slightly critical but this is the, most important Measure that has come before the House since the beginning of this Parliament and may well be the most important that we shall see in this Parliament and it calls for careful consideration. The Government have done a big thing in setting about the task of consolidating and improving this forest of legislation. True we have not got the consolidation yet and this Bill itself is almost unintelligible unless one spends an hour or so in working out the various references. But we have promise that once this Bill has been passed, the law will be consolidated and brought into a condition in which the ordinary man may hope to understand it. I suggest that that good work might be carried further, and that those in the office of the Ministry should endeavour also to bring about some measure of consolidation of the multitude of decisions which at present are to be found in various places. I know I am suggesting a big work but it would be worth while to try to do it and, if that were done, the Government would have produced a scheme which not only does fairness in general as between the taxpayer and the unemployed but one which will run smoothly in its future administration and will be regarded, as time goes on, as a great improvement on the somewhat patchwork system which had grown up in connection with this question.

9 p.m.


I do not propose to follow the hon. Member who has just spoken into the various questions of detail with which he has dealt. He will understand that we are opposed to the main principles of the Bill but I agree with him that, once the Bill has received a Second Reading, many of the points which he has indicated will be worth our attention. He referred to the question of consolidation. I wish it had been possible in this Bill for the Minister to have indicated in some way the various points in other Measures to which we are referred. Unless one has copies of the other Acts referred to the Bill is difficult to follow. I went to the Vote Office to get the other Acts so as to be able to place them all together but I was told that they were to be had only in the Library. I suggest to the Minister the desirability of having a few copies of these other Acts in the Vote Office, for purposes of comparison and reference by hon. Members who are anxious to understand this Bill.


As soon as the Bill gets a Second Reading my right hon. Friend proposes to issue a White Paper explaining in simple language the effect of each Clause in the hope that it will be of some assistance to hon. Members during the further discussions on the Bill.


I appreciate that offer. I understand now that it could not have been done prior to the Second. Reading. A paper such as the hon. Gentleman suggests will be helpful at a later stage. The Minister, in opening the discussion, dealt with the Bill fairly well. One gives the right hon. Gentleman credit for sincerity. I always feel that he is trying to do his best, and I am sure that whatever good there is in this Bill is largely due to his advocacy. But with all his feeling for the unemployed I do not want him to think that we on this side can accept the Bill. I wish to draw attention to one or two points in his speech which call for explanation. He said that the responsibility for this Bill, which is undoubtedly a big thing, was all the greater on hon. Members opposite because of their huge majority in this House. I agree that they have full responsibility because the Opposition is not sufficiently strong in numbers to be effective is making alterations in the Bill. He also said that he would not deal with the details of the Bill but with the main principles, and in doing so he made great use of the fact that certain people would get extra benefit under these provisions. He said they would not be limited to 26 weeks benefit in the insurance year, but that in certain cases people would get a greater number of weeks benefit.

It is assumed under the Bill that because a man has not been unfortunate enough to be unemployed for any length of time, he is to have certain benefits over and above his more unfortunate brethren. Anybody who has been out of employment for a long time is unable to have an increased number or weeks benefit. The Minister argued that unemployment knew no boundaries, meaning that a man who was out of work bad no control over his destiny. If that be so—and it is admitted on all hands—that supports our argument that because of that fact no man ought to be treated differently from any other. Therefore, when the Minister put the point forward about a man having extra weeks pay as compared with another man who may have been unfortunate enough not to get any work in the years before, we cannot by any means agree with his point of view. Last night the House dealt with the question of Japanese competition, and the Members from Lancashire urged the plight of that county and made mention of the number of people there who have been thrown out of work. That again is an argument for equal treatment all round. So to-night we come forward with our Amendment, which reads as follows: That this House declines to assent to the Second Reading of an Unemployment Bill which fails to recognise that all the victims of the unemployment which is inherent in the modern system of industrial capitalism are entitled to equal and honourable treatment and maintenance from national funds so as to preserve intact their value to and status in the community. We oppose the Bill because it does not attempt in any way to meet those points. In the first place, it does not attempt to put the unemployed man on a footing sufficient to enable him to meet the requirements of the ordinary decencies of life, and our first objection to the Bill is that it makes no attempt to restore the cuts that were made in 1931, in spite of all the arguments that have been advanced about the way in which the unemployed have to live at the present time. That being so, we on this side can give no consent to the Bill so long as those conditions remain. In any Bill dealing with this subject that comes before this House the first thing dealt with should be the raising of unemployment benefit to the position it occupied in 1931, before the National Government came into being. Secondly, I would ask that, in view of the recommendations of various bodies, an increase in the children's allowance ought to he one of the prime objects of the Bill. At least a 50 per cent. increase in the children's allowance ought. to be provided. I therefore strongly urge on hon. Members that they should pay regard to what they are doing and not allow the Bill to pass in its present form, or if it does, I can see no hope of the restoration of the cuts.

It is stated definitely in the Bill that it is a Bill to get the fund solvent, and it lays it down that there can be no question of any increase in benefit until all the debt has been cleared off. I may be wrong in that, but it appears to me that the whole intention behind the Bill is to keep the fund solvent under present circumstances, and that it may even go so far as to reduce benefits. I have always understood that the pledge of the National Government was that one of the conditions that would apply would be the restoration of the cuts to the un- employed men and women, and even in the replies from the Chancellor of the Exchequer and the Prime Minister there was some hope that that would be one of the first things to be done, whenever the circumstances permitted. Under this Bill I can see no hope of that at all, because under the Bill the fund is to carry the present debt. In our view, the first thing should have been to clear away all that debt. It can never be repaid, and it certainly ought not to be a burden on the unemployed.

The hon. Member who spoke last said that it was the fault of the Labour Government that the debt went up so high. That is one of the things that I never regret, because the money that we paid out went to deserving people who, we thought, were in need. I can never get it into my mind that what is called the Unemployment Insurance Fund is really an insurance fund or that, as unemployment increased, you could ever keep an insurance fund of this kind solvent. I have always argued that no fund that gets a contribution from the State could claim to be an insurance fund dependent on its own working. At present we get a one-third contribution from the State, which is a recognition by the State that something must be given to keep the fund in a position to pay a certain amount of benefit, and what the Labour Government did during their term of office was only an extension of that principle. When unemployment increased, as it was bound to do under the present system, all that we did was to bring in a number of people who had been struck off by the Tory Government. We took large numbers of them off the Poor Law and brought them on to the fund, to give them some benefit, and when we are charged with making the fund insolvent, it does not upset me a hit, because I have always in my mind the thought that it was an attempt to do something for poor people who were deserving and in need.

The second part of the Bill perpetuates what is called the means test. I know that the Liberal party in their Amend-merit criticise the Bill and some portion of the means test, but that is all. They ask the Government to examine some of the glaring anomalies in it, and to put them right; and every speaker to-night, whether on the Liberal benches, or on these benches, or on the benches opposite, has criticised the form of the means test. I want to ask any hon. Member opposite whether he agrees with all of what is termed the means test. The hon. Member for Sunderland (Mr. Thompson) and the hon. Member for East Newcastle (Sir R. Aske) criticised the means test business very severely, and even the hon. Member for Sunderland, who backed the Bill for all it was worth, told the Government that some remedy would have to be found in that respect. But Part II of the Bill carries on the means test, and not only so, but it takes away what we term local control and hands it over to another body of men, entirely separated from local conditions. Once it gets there it will mean for all time the imposition of the means test, and we on these benches cannot by any means consent to that.

I want to draw attention to the method of paying for the means test. We are told that 60 per cent. of the cost must come from local authorities. I ask Members of the National party whether they think that that method is fair. A period of two years past will be taken, and where poor localities have had to find a big amount of money because of a large volume of unemployment they will have to pay 60 per cent. That means that places like St. Helens, Leigh and Liverpool, which have been harder hit than most places, will have to bear the burden put upon them by this Bill. I claim that it ought to be a national charge altogether. If the House of Commons in its wisdom determines on a means test, let the cost come out of the National Exchequer, and not from the different localities. I have here a resolution from my own constituency urging me to do what I can to prevent it. It says: That this Council notes with regret that the charge for unemployment under the Unemployment Insurance Bill now before Parliament is intended to add to the burdens of the ratepayers, and urges His Majesty's Government to undertake the relief of the unemployment from the national funds as in the case of the de-rated industries under the 1929 Local Government Act. Copies of the resolution have been sent to the Prime Minister and the Minister of Labour, and I dare say that hundreds of other municipal authorities will be sending the same demand to the Government. Representations have been made from all sides of the House about the grave condition of the country, Last night we had under discussion the question of foreign Powers being in a position to assail these shores. We had a crowded House to listen to the Lord President of the Council. Everybody felt the seriousness of the position and of the question of what ought to be done to protect these shores. I know that the desire of hon. Members opposite is that whatever happens we should be protected from invasion. If they had their way we should spend large sums of money to meet what is termed possible danger from outside. May I appeal to the House of Commons to-night to deal with this matter, which appears to me to be of even graver importance than any question of foreign affairs? We are dealing under this Bill with 3,000,000 or 4,000,000 people—genuine, honest workmen—who through no fault of their own cannot get employment. We are going to put 1,500,000 men permanently under the means test. Whatever name you may give to it, it is the stigma of the Poor Law for these people.

I would advise hon. Members opposite not to look to the possible danger from outside this country, but to recognise that they are creating one inside the country. I can visualise a time when the men who are being treated in this way would have risen up and demanded from the House of Commons a recognition of the justice of their claim. I am a loyal supporter of this country's welfare, and I do not think there is a possibility of that happening, but I do say that if I were one of the unemployed who had to suffer under this indignity, there is, as I feel at the moment, nothing that I should not attempt to bring about the recognition of my rights. These people have been waiting for a considerable time knowing that we should have under survey a New Unemployment Bill. They have believed for a long time now that the cut was only temporary and that the means test was not going to be lasting. If I read this Bill aright, it will carry on both those things. I warn the House to recognise the rights of every citizen, to treat them decently, and, if they are out of work through no fault of their own, to see that they have the advantage of a decent livelihood during that period.

9.21 p.m.


Most of the speeches to-day have been delivered by hon. Members who represent constituencies in the North of England and in what may be termed the depressed industrial areas. I want to have the opportunity of saying a few words from the point of view of the South of England, where we also have an unemployment problem, which is, of course, not nearly so intense as that in the North or in Wales. Before I deal with that point, may I refer to one or two remarks of the hon. Member for Leigh (Mr. Tinker)? We all sympathise with the plight of those who are out of work through no fault of their own, but I believe that some of the difficulties that will arise in the future will arise from the frame of mind that does not mind what the financial position is of any fund that is appropriated for the unemployed. If the National Exchequer were bottomless, there would be a great deal to be said for that point of view. But when two years of Socialist Administration saw the debt on the fund running into many millions of pounds, then indeed the unemployed themselves were getting alarmed as to the future of the benefits that they were receiving. The hon. Member must also bear in mind the point of view of the employed workman who pays a very high contribution from his wages towards the maintenance of the Unemployment Insurance Fund. While we all desire to see the unemployed receiving the highest possible scale of benefit, we must realise that there is something to be said for the workman who is in work and who is endeavouring to maintain a wife and family.

I want to differentiate between the conditions that obtain in the north and those that obtain in the south. While force of circumstances may have compelled the Government to take over the administration of those who are out of insurable employment because local administration has broken down, it Neill involve the loss of a great deal of the touch that comes of local knowledge. We watch the working of what is known as rationalisation of industry. We may find that it is very necessary under modern conditions, but the saddest feature of it and of the great amalgamation of work and mines is the sense that the individual workman is merely becoming a cog in a great machine. I can recall individual pits owned by an individual company, where the managing director sat in his office at the pit head; and when labour disputes took place the workmen at least felt that they had direct access to him. With the great amalgamations that take place to-day, the board of directors sit in London, 100 or 200 miles away from the scene of operations. We feel and we find that a man loses to a large extent the sense of his individual personality, and that his individual rights are not so much a matter of concern as they use to be. That modern tendency is a matter of very great regret indeed. That is why I want to urge the retention, wherever possible, of personal local knowledge in the administration of this fund in the future.

I particularly want to draw attention to Clause 36, where provision is made for the training and instruction of men under certain conditions. I should like, as a matter of principle, to ask my hon. Friend below me when he replies this evening—or when he does reply, if not this evening—to give the House some indication of the elasticity of the term "training and instruction." The Clause makes some attempt to meet the principle, which I do wish to enunciate. I hope that the Government will give this Clause as wide an interpretation as possible, so as to secure the co-operation of local authorities in putting various schemes in hand. The right hon. Gentleman in introducing the Bill, said that there was nothing in it to interfere with voluntary schemes at present in operation—I took clown his words as well as I possibly could. My point is that, although there may be nothing to interfere with voluntary schemes, there is nothing very much to encourage them in the future.

Last winter, in the district which I have the honour to represent, a scheme was put in hand to enable the unemployed to get a certain number of weeks' work throughout the winter. Anybody who had been in that neighbourhood would have been astounded at the response of the unemployed themselves, at their feeling that they were not forgotten by their neighbourhood, that their welfare was a matter of concern; they jumped at the chance of doing a day's or a week's work, keeping themselves fit and drawing money for services rendered to the community. I use this as a principle and as an illustration. We feel that we were able to save the Fund £5,000 in benefit by means of voluntary subscriptions and a contribution by the borough council involving no increase in the rates whatever. Obviously the voluntary subscribers paid twice over: by their national taxation and by their local taxation. I do not think that they would object to that in the future if they could get back some of the money that the State has been saved in benefit. I particularly emphasise the words "some money." I know that one of the objectibns will be that the State as a whole contributes to the Unemployment Insurance Fund and therefore one locality is not entitled to receive anything back, as it would be unfair to those districts which had no such scheme in operation. But in districts where there is a relatively low percentage of unemployment, I am informed that if they could get back 25 per cent. of the savings that had accrued to the State, the remainder could be used for the benefit of the distressed areas, and a great deal of voluntary work will go on in the future if some steps of that kind can possibly be taken.

I want to emphasise that these suggestions are on a very broad principle, the details of which must obviously be reserved for the Committee stage, and that this scheme is in no way an ordinary subsidy on wages—not at all. But it has proved so successful, and the House should realise that whereas it has been calculated that for the Government to put relief works in hand costs about £500 per man per annum, those responsible for this scheme were able to do it at the rate of £150 per man per annum, including the cost of materials at the relatively high rate of 50 per cent. of the total cost. That is a detail, and an eloquent detail, of how much can be done by voluntary co-operation with the Government.

My object in addressing the House this evening is to beg the Government not to stifle by red tape the genuine desire of localities to help themselves. That there is this genuine desire is shown by the fact that no less than 4,000 copies of this scheme for assisting the unemployed throughout the winter in neighbourhoods where the problem is of manageable proportions have been distributed by request up and down the country. The winter is upon us. There is a mass of good will waiting. Our sole desire is to assist those who are out of work this winter to obtain work in order to maintain their morale and their physical fitness. We are still in an emergency state; we are still likely to be faced for some time to come with a very large number of unemployed, but in the South of England there is, I venture to say, a more guilty feeling than in the North, where the neighbourhoods have perhaps become accustomed to it. There is a genuine desire to assist, but always the question comes back: have the Government helped you in any way? The only help we want is no new burden on the State at all, but an encouragement and a slight contribution or return on what we have saved the Unemployment Insurance Fund. If some indication can be given by His Majesty's Government that Clause 36 will be very liberally interpreted indeed, I am confident that thousands of unemployed men throughout the South of England will obtain many weeks' work during the winter through the desire of the neighbourhoods to help themselves with the help of the Government.

9.33 p.m.


I am sure the hon. Member who has just spoken will forgive me if I point out two things to him in the few minutes at my disposal. I am sure that he will agree that good will will not solve this problem. We all know that there are very many charitably-disposed people about who would do what they could to help, but it is a problem far beyond the reach of good will, however adequately expressed.


Mine is not a permanent scheme.


The Second matter is that he is under a complete misapprehension, if he will forgive me for saying so, if he suggests—as I have heard other hon. Members suggest, at any rate by implication—that the Labour Government were responsible for the whole sum of £115,000,000 which has now been put on the Unemployment Fund. I do not recollect the precise figures, but no doubt there are those in the House who do. My recollection is that it was a very considerable sum indeed but if I may hazard a guess, I should say that something like half the sum at present being placed on the fund was put there through the instrumentability of the Conservative Government between 1925 and 1929. I hope that we shall not hear any more of the suggestion that that was wholly the responsibility of the Labour Government.

At this late hour I will confine myself very shortly to two or three matters. The hon. Member has reminded me of this burden which is being placed upon the Unemployment Fund, and I would like to ask a question of the right hon. Gentleman who is to reply. As I understand it, Part I of the Bill proposes to make a sum of £5,000,000 available each year for the purpose of repaying the £115,000,000 deficit. I wish to know whether it is not true that a very large proportion of that £115,000,000 is accumulated interest, what that proportion is, whether the Treasury are charging up interest at rates varying from 4 to 6 per cent. and whether that amount has never been funded and is being met by short-term advances. If that be so I could not do better than quote a criticism which I came across in a new paper, of independent views, "New Britain," the other day, where this comment was made, referring to this matter of £115,000,000: The Unemployment Bill is a barefaced attempt at extortion by the Treasury. The pound of flesh exacted by Shylock is being paid by the sufferings of millions. That is a very serious charge, if it be true, and I would like to hear the right hon. Gentleman on the matter, because it would appear that the fund is not being allowed to take advantage of the prevailing cheap money rates. The Bank Rate is something like 2 per cent., and Treasury borrowings have been at as low a rate as 5s. per cent., and yet, if my information is correct, this fund has been accumulated and is now being charged up, in effect, to the unemployed, at rates of from 4 to 6 per cent.

Next I wish to make a few comments on the absurdities which, in my view, will arise under the practical administration of Part II. I am sure that hon. Gentlemen opposite will appreciate the fact that there is going to be practically a doubling, or a double shift, of officials working for the Unemployment Assistance Board and for the local authorities. That will involve very considerable additional expense indeed, wholly brought about by the Bill. Then there is the further absurdity, if I understand the Bill aright, that we are going to have the relieving officer, as a representative of the local authority, going to a house one week and a representative of the Unemployment Assistance Board going to the house the next week; or, it may be, one going to one house on one day, as representing the Public Assistance Committee and another, representing the Unemployment Assistance Board, going to the next-door neighbour's house on the same day. Not only will that mean greatly added expenditure, but, in my submission, it will lead to great difficulty, and, possibly, a good deal of jealousy on the part of neighbours, and will create gross dissatisfaction throughout the country. To have two different bodies of men making the same inquiries seems to me an absurdity. Then, under the Bill, it seems to me that we shall find two men attending at an Employment Exchange counter on the same day, standing next to each other and drawing different rates of benefit. One man, with a wife and one child, will, being an insured person, be drawing 25s. a week from the Employment Exchange, and the other man, also with a wife and one child, may be drawing another sum altogether from the Unemployment Assistance Board both at the same counter. I suggest that that is not a satisfactory method of administration.

A very important question, which I am afraid I shall not have time to deal with at any length, is the relationship between the central authority and local authorities. I had hoped this Bill would have taken a much more comprehensive form, would have brought about some uniformity and have done away with a great number of anomalies and injustices which exist at present, but, unfortunately, we are disappointed. I had also hoped that advantage would have been taken of the opportunity to bring about some co-operation and some really satisfactory arrangement between the national authority and the local authority, but that is not the case. If I understand the position aright, certainly the municipal authorities—the county boroughs and the boroughs—are very strongly opposed to the financial provisions and some other provisions of the Bill. I am sorry the hon. Member for Sunderland (Mr. L. Thompson) is' not here, because I gather that he was professing to speak on behalf of Northern Members in this House. I am one of those Northern Members, but I am not aware that any meeting has been held, or that he has any authority to speak on their behalf.


I think the hon. Member said "North eastern."


I am equally in that area. What we do know, as the right hon. Member for Wakefield (Mr. Greenwood) has told the House, is that the Association of Municipal Corporations take a very strong view indeed as to the financial injustices which those corporations will suffer if this Bill becomes law in its present form. I am glad the Minister of Labour has returned to the House, because I aim not sure that he gave the House quite—I will not say the right view; but I feel that he did not appreciate the position as I know it to be. understood him to say there would be a saving of something like £2,600,000 to local authorities. It may be that. he included Scotland in those figures, but according to the information furnished by the Association of Municipal Corporations, which, I understand, is more or less agree with the Government, the apparent relief to local authorities under the financial provisions will be £2,000,000 a year, being 40 per cent. of the total expenditure incurred by local authorities in the year ended 31st March, 1933.

The right hon. Gentleman omitted to tell the House of the deductions from that gross sum. In the first place, the sum of £250,000 is a liability which the local authorities have to meet in respect of juvenile instruction centres under the Bill. Then the grant of £450,000 made this year to distressed areas has to be deducted from the gross sum of £2,000,000. Furthermore, under the arrangement made with the Chancellor of the Exchequer, local authorities will have the expense of relieving persons who have become "discards," as they have been termed, persons who become chargeable to the local authority. That sum will amount to £150,000. The result is that, while there is a part relief to local authorities, not of £2,600,000 in England and Wales, but of £2,000,000, there has to be deducted from that sum £850,000, showing a net gain, at the most, of £1,150,000. The Association of Municipal Corporations take the view that that is not sufficient, and they decline to agree to make the contribution of 60 per cent., which is insisted upon by the Government.

There was something which the local authorities understood to be in the nature of a pledge, given on behalf of the Government by the Minister of Health, on 12th April last. May I just read the relevant portion of his speech? He was referring to the present Unemployment Bill, which he hoped would be introduced later in the Session and he said that the Bill would establish a greater measure of national supervision and control. … In particular, it will redistribute and define the functions of local authorities and the central government in relation to assistance from public funds, whether the funds of local authorities or the funds of the Exchequer. One of the bases of this redistribution of responsibility between local authorities and the central government will be that the central government shall accept responsibility, both administrative and financial, for assisting all the able-bodied unemployed who need assistance. The acceptance of this responsibility by the central government will necessitate a readjustment of the present block grant paid to the local authorities by the State, since they will be relieved of a liability to which they have hitherto been subject."—[OFFICIAL. REPORT, 12th April, 1933; col. 2609, Vol. 276.] That is what the local authorities understood, rightly or wrongly, to be a pledge on the part of the Government that they would accept responsibility both administrative and financial for asisting all the able-bodied unemployed who need assistance. I am not suggesting, but there has been a suggestion of a breach of that pledge, and I would like the Government, through their spokesman, to give an explanation why they have departed from the very plain words of the right hon. Gentleman on that occasion. Something more ought to be said, on behalf of the local authorities, with regard to the contribution which they are asked to make. As the House knows, that contribution is 60 per cent. of the expenditure on able-bodied relief in the financial year 1932–33. I do not think that I can do better than quote from a letter which appeared in the "Times" the other day, written by the editor of the "Local Government Chronicle" on this matter: The demand that the ratepayers shall pay three-fifths of the cost of relieving the able-bodied in 1932–33 is grossly unjust. That cost was enormously swollen by (a) the abnormal unemployment, and (b) the legislation of 1931, which transferred a very con- siderable number from the Unemployment Fund to poor relief. Between March, 1930, and. March, 1933, the numbers receiving out-relief, for reasons other than unemployment, increased by only 73,000; those receiving relief on account of unemployment increased by 285,000. No figures of cost are available, but assuming that each person relieved costs the same, the three-fifths now demanded is roughly equal to the whole cost in 1929–1930. And since the increase is greater in the depressed areas than elsewhere this means that those areas will pay to the Government much more than their whole cost of relieving the able-bodied in 1929–30. If that is so, it is a very serious matter for all of us who represent industrial areas, and particularly, of course, the distressed areas. The Government are asking 60 per cent. of the expenditure in the financial year 1932–33. The local authorities would have neither part nor lot in administering that sum, which is entirely at the disposal of the national authorities, and the county boroughs and boroughs are unanimously in opposition to these proposals of the Government.

I understand that an arrangement has been made and, I do not want to interpose for too long a time. I can only say that I hope that hon. Members representing industrial constituencies will consider very seriously the financial problem, because there will still be a large poor-rate in their areas. I understand that Merthyr Tydfil's will still be 8s. in the £, and that at Sheffield it will remain at something between 3s. and 4s. in the £. That will be very serious indeed. The Bill does not carry out the promise of national responsibility for this national problem of unemployment, and, as far as my hon. Friends and myself are concerned, we, on those grounds, support the Amendment.

9.52 p.m.


The House this afternoon rightly gave the Minister of Labour a sympathetic hearing, as it does to Ministers who are placed as lie is at the present time. This is his first Bill. Looking up the matter, I find that, since the War, Ministers of Labour have averaged at least one Bill during their term of office. The Bill of the right hon. Gentleman is almost equal to all the rest of the Bills put together, in the length of time which it will take to be dealt with, and in the complexity and the number of subjects with which it deals. I cannot agree with the right hon. Gentleman that he is dealing with this matter in a bold manner. He has a big Bill, and, if he wished to place the insurance fund upon a sound basis, I think that he has evaded the issue which he wanted to face by refusing to include large numbers of people who ought to be inside the insurance scheme, if it is to be sound insurance.

The outstanding thing about this Bill is that the man, and even the boy, who receives the lowest wages, must contribute towards the unemployment insurance scheme, while the man who is well-placed evades and escapes that responsibility. Because of that, I think it is very unlikely that the scheme will be made sound within the next few years. I know that we shall have actuarial estimates of what will happen. The House of Commons should give a medal to the Actuary of the Ministry of Labour very soon. Within the experience of the older Members, actuaries have, time and time again, given us a sort of estimate which has never come off. I understand that the British Constitution is something which is not written, but which works. The financial provisions which the Government Actuary has set forth for the Ministry of Labour are significant for the fact that they are usually written, but they never work.

I do not agree, and I do not think the right hon. Gentleman believes at the bottom of his heart, that he can run an insurance scheme which is actuarially sound and at the same time face the real problems of the unemployed in this country. It is very easy and quite understandable for the average Member in this House to run away with the idea that you can have a sound unemployment insurance scheme. Take an area like Hertfordshire, which has 6.9 per cent. of unemployed—less than 7 per cent. That is nothing; it is not the average of the old days. Bedfordshire has 5.1, Berks 6.6, Cambridgeshire 6.3. You could go down the local index of unemployment and find figures like that, as the right hon. Gentleman knows, scattered all over the South of England. But, on the other hand, we have Cumberland with. 32.6, Durham with 37.2, Jarrow with 70.9, Glamorgan with 37.8, Monmouth with 42.7. Those who live in the rural areas—agricultural areas—which I have mentioned, believe, I dare say, that you can have, and ought to have, an insurance scheme which is actuarially sound; but those who live in the areas which I have last mentioned—in Wales, on the North-East Coast or in Scotland—not only do not believe that it is possible, because they know something of other facts connected with unemployment, but they do not think it ought to be possible if the unemployed are to be divided into two sections.

Certainly there has been a change in a small way, and I am very pleased; I wish it were larger. But the small increase in prosperity that has come in certain parts of the country, and the insistence upon it by the Minister, quite rightly, and by the Press, hides a very grim set of facts in this country, in common with other countries in Europe. The Parliamentary Secretary to the Ministry of Labour gave a figure to-day. He was asked how many people there were at the present time who had been unemployed for over 12 months, and he told the House that there were 465,000 people who had been unemployed for over 12 months. Two years ago that figure was 100,000. The hon. Gentleman must not shake his head negatively to that, because I am stating the figure that was given to me when I was in his position in the Ministry of Labour. We see, therefore, that the number of people who have been unemployed for 12 months and more has risen by nearly five times in two years, in spite of the fact that unemployment seems to be decreasing. Take the mining situation as indicative only of one of the large basic industries of this country. Other Members who are concerned with basic industries can look at the figures for themselves—


I do not want to interrupt the lion. Gentleman, but I am sure he would not wish to become involved in any misstatement, or lead the House into thinking that things are worse than they are. I gave a figure in answer to a question this afternoon. I was merely asked for the figure at a certain date, but that figure is a falling figure. The figure was larger a short time ago, and it is steadily falling, showing that the number of people to-day who have been out of work for more than 12 months is steadily decreasing.


I am very pleased that the hon. Gentleman can give us some assurance on that matter, but I fail to grasp what the assurance is. I stated correctly, I think, the figure that he gave to-day except that he says that he gave it for the most recent date possible, and that it is not quite up to date.


It is up to date, but it is not the highest figure that there has been. The figures were higher some time ago, and are now steadily decreasing, showing that there is not merely an improvement in the number temporarily stopped, but an actual improvement in the number of people who have been out of work for long periods.


I am very pleased to hear that, but it does not make any difference to the fact that it is nearly five times what it was two years ago. I say that that is a very grim and menacing fact, which, however the figures may improve for a time, seems to imply that we are going to have on our hands an ever-growing number of people who are not likely to re-enter industry because they have been unemployed for some years. Take the mining industry. The mining industry in 1931 had an average of people employed—not unemployed—numbering 845,453. In 1932, the number was 802,703, and for the 10 months of 1933 it is 772,000, showing a reduction, as compared with 1931, of 76,225. That shows the reduction that has taken place in two years in the number of people employed in the industry, and that is the state of industry generally as far as basic industries are concerned. We who happen to be familiar with industries of this kind, and happen to live in those areas, see that, while intermittent work is not quite so common as it was a few months ago, there are no pits opening and there is no increase in the number of people actually employed. Those who live in areas like that cannot be expected to agree to a scheme in which the unemployed are divided into two sections, the people in one of which are supposed to be getting just what they paid in, while in the other they are supposed to be of some sort of semi-criminal type, merely because they have had the ill fortune to be out of work.

The right hon. Gentleman used the illustration of a man who had been working for five years and who deserved his 26 weeks extra benefit, because he had put the money in, and therefore was entitled to get out what he put in and something extra because of his good conduct. I suggest that by implication the right hon. Gentleman lays a slur upon the men who have been for a long period unemployed. It is no use trying in this House to get away from the fact that in recent months there has been a tendency to lay a slur upon the man who has been unemployed for several years, and I hope that, in the fight that is going to take place in the next month or two, or the next week or two, this party, and all Members of the House, are going to face up to that fact, and, instead of sneering at the man who has been for a long time unemployed, to give him that sympathy and consideration to which he is entitled in the unfortunate circumstances in which he is placed. The right hon. Gentleman knows, and the House knows, that 1 do not as a rule make charges of this kind. But I have known the assumption in the minds of hon. Members, which it seemed to me was unconsciously in the right hon. Gentleman's mind to-day, that there is some defect in a man who has been unemployed for a long time, and I think that finds expression in his Bill.

I want to draw attention to this fact, which I think is very important. The right hon. Gentleman is going to set up a board. He says it will he subject to regulations made by him. I think it has to make a report to the House annually and a whole lot of things of that description, but that means nothing as far as the House is concerned. Once the board is set up, it is out of the influence of the House of Commons altogether. Some younger Lord Hewart could well write a book, not about the multitude of regulations and all the rest of it that illustrate legislation by reference but upon this Bill as an illustration of legislation by reference. It is drafts and regulations from one end of the Bill to the other. The right hon. Gentleman has been very careful to see that the members of this board are to come on the Consolidated Fund instead of being subject to this House in a more direct way. That means that they are in the same position as judges and are not subject to criticism. It means that there will be no real opportunity of dealing with a situation of this kind. These gentlemen are to have almost legislative powers. It is true that the right hon. Gentleman has to bring it to the House to see whether we agree with it or not, but he will do it after eleven o'clock when everyone is tired. There are in the second Schedule almost two pages of Sections which are the very hearts of certain Acts of Parliament which these gentlemen can alter without the House having any opportunity of dealing with them. 1 hope hon. Members behind the Government who have some regard for Parliamentary control will see that the right hon. Gentleman is not going to get away with a Schedule of this kind practically setting gentlemen up as a Parliament.


The hon. Gentleman is under a misapprehension. The Schedule to which he refers does not describe the functions and duties of the board at all. It refers to the Advisory Committee, a very different body, who are not paid out of the Consolidated Fund.


I am very much obliged for the correction, but the same thing takes place. They have to work through the board and through the Minister and through Regulations and drafts, so the position is going to be exactly the same. The right hon. Gentleman will have an opportunity of putting me right on that later on, but I am sure the position is that these gentlemen who are to run unemployment insurance, as far as the insurance side is concerned, are going to be on the Consolidated Fund, and, therefore, beyond the purview and influence of Parliament.


If the hon. Member looks at paragraph 7 of the Schedule, he will see that they are to be paid by the Minister.


We shall be very pleased when we see the Money Resolution on that particular point. Then the right hon. Gentleman is taking power—it is true it does not mention to re-establish "not genuinely seeking work," but it re-establishes the fact that the man has to prove it instead of the Minister himself. I do not know whether the right hon. Gentleman objects to this statement or not. I am dealing with this because 1 understand there has been some refusal to accept the interpretation that proof of seeking work is now to be laid upon the man. The old Clause definitely laid that proof on the insurance officer. If, on a claim for benefit, it was proved by an officer of the Minister of Labour that the claimant had been offered a situation in any employment suited to his case and had not taken it, the man was indictable. Now the right hon. Gentleman has laid upon the man himself the burden of proof. One of the things that surprised me in the Minister's speech was that he did not draw attention to the fact that this change had been made. It is no good trying to get away from it by saying it does not re-establish "not genuinely seeking work," because definitely the proof is transferred from the Minister's representative to the man. When the matter was discussed in 1930, there was not a single person in the House who had a good word to say for the old notgenuinely-seeking-work provision and for the proof being laid upon the man. It was hooted out of the House by all parties. Although "not genuinely seeking work" is not there in words, experience is that it will work out so.


indicated dissent.


It is no use the hon. Member shaking his head. The man had to prove that he had been seeking work. The mere words "genuinely seeking work," did not matter at all; he had to prove that he had been seeking work. It was a case of "Where were you yesterday?" "Where were you the day before" and, "Where were you last week?" He was put into the dock and there was an attempt to trap him. What is the good of putting such men as are in some of our coalfields, in Wales, in the North, in Scotland, and in some of the shipyard areas into the dock and asking them where they had been? It is simply stupid. These men go round and round just like an animal trying to find a way out. This is simply repeating what took place before. It is encouraging, and almost driving men to lying, so that the man who is the most adept at telling lies comes out the most successful, and the honest man suffers.

I agree with the hon. Member for Gorbals (Mr. Buchanan) that to some extent the question of not genuinely seeking work was transferred to the man subject to the fourth condition of not normally insurable. There is no argument whatever about that, but the fact still remains that the change-over and the abolition of those words, and the onus of proof remaining on the insurance officer has so changed the position that the great mass of the people have been free from the persecution and interrogation which used to go on previous to the change-over. I want to know why the right hon. Gentleman is changing that wording. Why has he altered the whole intention and purpose of the Section of the 1930 Act? There has not been any complaint. I have never heard anybody complain. I have not heard any complaints in this House or from members of the staffs at the Ministry and the Employment Exchanges. My experience shows that there has not been a single word of complaint about the working of the Section in the 1930 Act which laid upon the insurance officer the proof that work was available for a man. The right hon. Gentleman really had better get a fresh look at this matter, because it is going to prove very hard. In actual operation it affects great masses of men.

I come to Part II of the Bill. The right hon. Gentleman stated that at first a man must be maintained by his family if they have sufficient income, but the House has to remember that the words "means test" are a misnomer altogether with respect to such a man. This is really a destitution test. We had the hon. Member for Sunderland (Mr. Thompson) complaining about certain families being affected by the operation of this test, and he did not think that it ought to operate. He must accept the logic of his own principle. If he believes in the means test, he must have a destitution test because that is what the old law is in effect. The right hon. Gentleman would be right, I dare say, in saying that a man should rely upon his own family and that his family should look after him. If they were in big business and were paid by cheque instead of having to allot a little at the week-end between the grocer and the butcher, and other people, it would be a different case altogether. Let me take the case of the area from which I come and in which the Prime Minister represents one of the constituencies. I find that 60 out of every 100 men, shifters, have 6s. 6d. a day.


Is the hon. Member speaking of miners?


I was speaking of the labourers.


I took it that the hon. Member was speaking of the average wages of the miners.


No. What I said was that 60 per cent. of the miners in Durham are shifters, labourers, and that their wages are 6s. 6d. per day. They are paid by the day and not by the piece. Their average earnings, taking the best periods of last year and this year, have been less than 30s. a week, four and a-half days a week. You may have a man with a wife and several children, and it is suggested that in these circumstances he should keep his son if he is unemployed. No one can justify that. When the right hon. Gentleman says that an unemployed man ought to rely upon his family first, is that the kind of thing he is going to justify? Is he going to justify a state of things which practically drives young men away from home?


My constituency is adjacent to that of the hon. Member. I have a great deal of sympathy with what he has said, but he is not stating the case fairly when he takes a selected portion of the daily average earnings of mine workers in order to buttress a case which is otherwise untenable.


I thought I was stating the facts. If the hon. Member lived in the centre of the district as I do, if he had spent practically his life with the men who are subjected to these means tests, men with whom one went to school, he would not be quite so sure about the justice of the means test as he seems to he, in view of his statement. Not only are the families to which I have alluded very often receiving low wages, but in many cases they have been unemployed for months and sometimes for a year. Even when they have been in employment it has been intermittent. Anyone who knows anything about the conditions in the mining areas of Wales, Durham and Scotland and in the great shipyard areas knows that the resources of the families have gone down step by step until it is almost impossible for them to look after anybody else; indeed, they can scarcely look after themselves decently. Not only is that the case but the resources of the community have been undermined.

Now, the Government which was going to take charge of the unemployed come forward with this Bill. We remember the great statement that was made by the Minister of Health some time ago. The general idea in the House at that time was that the Government were going to take financial responsibility for the unemployed as well as the responsibility of administration, but it comes to this, that there is an apportionment under which the local authorities have to bear their share of the financial responsibility without having any control whatever over the situation and over the money that is spent. This is not a bold scheme to face unemployment. It is just what we might expect from this Government, a piece of smug Tory charity, applied to people who deserve better of this country.

10.25 p.m.

The SECRETARY of STATE for SCOTLAND (Sir Godfrey Collins)

The hon. Member for Chester-le-Street (Mr. Lawson) in his opening remarks thought fit in his judgment to sneer at the Minister of Health and tried to convey to the House that my right hon. Friend and those who support the Government do not sympathise as deeply and as sincerely as hon. Members opposite with those who are unfortunately unemployed. We resent these comparisons. I submit that human sympathy is as deep and as wide and as well informed in all parties as it is in those who surround the hon. Member, and I hope that on due reflection it will not be his considered judgment on his fellow Members whom he has met in this House for so many years. He saw fit also to challenge the Government as to the words contained in Clause 6, and suggested that the Government were going back to the genuinely seeking work Clause. I fear that his memory must be very short. Let me remind him that the words in Clause 6 were supported by a committee of the Trades Union Congress in 1929, and they are also the words chosen and formally submitted by Labour Members of the Royal Commission. In addition, they have stood the test of time from 1911 to 1924. If the Government in any one Clause had not only experience to guide them but also the benefit of the assistance of hon. Members opposite as to the exact words, it is in Clause 6. Before the Bill was introduced there was an atmosphere of alarm raised throughout the country as to its contents, but after the Debate to-day the country I am sure will be as pleased as His Majesty's Government, for it has clearly demonstrated that there is little or no life in the attack against the Measure, and I am confident that as the days go by and the country and the House of Commons consider minutely the manifold Clauses in the Bill, they will agree with the Government that the scheme submitted by the Minister of Labour is not only sound but has been thought out in all its various Clauses.


Nothing of the kind.


We shall be able to debate it in due course. As I listened to the Debate my mind went back to 1911 when the first Unemployment Insurance Bill was introduced in this House. It has been said correctly that it only covered 2,250,000 workers and provided a benefit of 78. a week. How striking an advance on the 1911 Act is the present Measure, which covers about 17,000,000 persons of whom 12,500,000 are insured workers?


Yes, in 22 years.


The hon. Member for Bridgeton (Mr. Maxton) may not be completely satisfied, but I think I can prove no country in the world has ever submitted such a wide and comprehensive measure of legislation as that which has been introduced to the House this evening. I know it is the custom in some quarters to belittle the provision which Great Britain makes for those who, through misfortune, are unable to find work. Although the provision may not be all that we would desire, yet I make bold to say that at no time in any country in the history of the world has there been introduced such a far-reaching and sympathetic Measure as this Bill. Every Member of the House of Commons, elected on a wide and democratic franchise, must be conscious at times of the overwhelming pressure upon all parties which may tempt us, when confronted by the electorate, to avoid facing unpleasant financial realities. A real danger to which democracy is always exposed is the very human dislike to look unpleasant realities squarely in the face, but Great Britain, labouring under the heaviest taxation in the world, has shouldered her present burdens with fortitude, and alone amongst the nations of the world is able to introduce a comprehensive scheme and to provide for its solvency in future.

The scope of Part II of the Bill is as wide as was found to be practicable. The scheme is designed on broad and sympathetic lines for assisting and promoting the well-being—we put that in the forefront of our list—of unemployed persons who have exhausted their insurance rights owing to industrial depression and no fault of their own, or have never had an opportunity of qualifying for unemployment benefit. This is exemplified by the description in Clause 34 of the functions of the Unemployment Assistance Board, which are to assist such persons and to promote their welfare. I think the House will rejoice that in particular the Board are to make provision for improving and re-establishing their well-being with a view to their being fit for entry or re-entry into regular employment. In other words, the main function of the Board will be not only to grant allowances according to their needs, but to promote the welfare of the unemployed by improving and re-establishing their condition.

It may be asked, why is it necessary to take this work away from the local authorities and to place it in the hands of a central board? Could not the local authorities with their local knowledge and sympathy be trusted to do the work better than the board? Let me answer, so far as Scotland is concerned, that the Scottish local authorities have definitely asked to be relieved of the duty of having to administer relief to the able-bodied unemployed.


On this basis.


We shall face that question when it arises. In passing let me quote the words of a representative of one of the large cities in Scotland. He said to me recently: I should like you to know that we welcome the taking over of administrative responsibility by the central authority and we congratulate the Government on this great step forward which they are taking. The object of the Bill can be better secured by entrusting the work to a body operating over the whole country than by authorities operating within much more circumscribed areas. Problems affecting industry and unemployment are not confined within local government boundaries. Training and instruction of the unemployed can be more satisfactorily arranged and organised by a single body than by many separate local autho- rities throughout the country. A single body can also secure uniformity in the standards of treatment throughout the country. For assistance and advice and the human touch which is so necessary in carrying out its functions, the board will have behind it the local advisory committees which are to consist of persons having local knowledge and experience.

It is also desirable to dissociate the administration of assistance under the Bill from the administration of poor relief. No person drawing benefits under this Bill is in any way whatever associated with the Poor Law. Much has been said to the effect that this is a new Poor Law Bill. I think that point was touched upon by the hon. Member for Gorbals (Mr. Buchanan). Surely he would agree with me that if the State itself takes over this duty and these functions it is an admission by the State that it is an industrial problem and not a Poor Law problem.


The State according to this Bill is now taking over the functions of the Poor Law. The State never previously took over the function of inquiring into a man's private morals and his private life. To-day the State for the first time takes over the functions of the Poor Law in assessing the amount of benefit, by inquiry into the whole ramifications of a man's private life. There is no difference whatever between that and the Poor Law proposals


That is not a point for a Second Reading Debate so much as a point for Committee. Let me compare the present position of unemployed persons with what it will be under the scheme contemplated by the Bill. At present an unemployed person receives weekly a sum of money for his maintenance, either by way of transitional payment or by way of unconditional poor relief from the local authority. Having drawn his money he is free to spend both it and his time as he pleases. No public authority takes any further interest in him. Such a method of assistance must be dispiriting to the decent working man anxious for employment who constitutes the vast majority of the unemployed. When it is continued week after week over a long period, he loses heart, develops inertia and gradually deteriorates mentally and physically. What will be his position under the Bill? Not only will he be maintained but he will also be provided with training and instruction.


It is the same in the workhouses now.


No, there is a fundamental difference. He will be made to feel that an interest is being taken in his welfare and that an endeavour is being made to promote and increase his fitness to re-enter employment whenever it is offered to him. A workman in those circumstances should be much happier than one who sits at home or wanders aimlessly about the streets brooding over his misfortunes. The Bill itself encourages an individual to take an interest in himself, and is thus a distinct landmark in social progress. As I listened to the Debate this afternoon, my mind went back to statements made and books written by leading members of the party opposite. They have joined issue with the Government on the fundamental principle of this Bill. Let me recall to their memory certain things written by those who are called to-day "the Webbs," and I would refer especially to what they wrote in their recent book entitled "English Local Government." I read in that book that they argued for the full and complete assumption by the National Government itself of the responsibility for dealing with unemployment and the unemployed. That is the very essence of this Bill, and that was written by Sidney and Beatrice Webb, who have spent their lives studying this problem, elucidating it, and giving to the public of Great Britain the knowledge which they have gained. In this book they went on to say: Experience points to coupling the provision of maintenance for those among the unemployed for whom neither work nor insurance is available, not with artificially, stimulated employment but in order, primarily, to save them from idleness, deliberately with general training … with the object mainly of their individual improvement. Such a course of training … should certainly be imposed on all the younger unemployed, from the very day they are released prom school, merely as a condition of receiving insurance benefit. They went further, and I am quoting from a very recent publication. They continued: After successive offers of various kinds of training and other opportunities, a man found habitually work-shy may have to be offered, merely as a condition of maintenance, a lasting engagement in severe manual toil, or in routine work of any kind suited to his physical capacity. If he throws that up or refuses to work, he will have to be finally discharged. And if he is thenceforth found committing any offence against the criminal law or the Vagrancy Acts (including that of allowing his wife and dependants to become chargeable to public funds) he may have to be prosecuted, and on conviction committed to a detention colony.


Have they not got flogging for him too?


What is the right hon. Gentleman quoting from?


I am quoting from "English Local Government," written by Sidney and Beatrice Webb, in the 1929 edition, page about 1010. Later I find that they stated: We are not ourselves sanguine enough to believe that any Cabinet in the next few years is likely to adopt, in its entirety, and by one Act of Parliament, any logical and comprehensive scheme of dealing with unemployment and the unemployed. I have ventured to show that in its fundamental aspects this Bill conforms very closely to the formula and the policy enunciated by these great students of social reform, for every Member of the House knows the great agitation led by them before the war for reform of the Poor Law, and I rejoice that this Government—


I challenge the right hon. Gentleman to show anywhere in that book that Sidney and Beatrice Webb ever advocated starvation for the working class.


I challenge the hon. Gentleman to show in any sense of the word that this Government has starved anybody. It is a gross mis-statement. The sufferings of the unemployed are in-deed tragic, but all parties to-day respond to the call of humanity, and I believe that we are all determined to do our best for those who fall by the way. I wish that in this large and comprehensive Measure the Opposition had chosen in their wisdom, as the Opposition did with regard to the Bill in 1911 to cover unemployment insurance and health insurance, to pool their knowledge and their wisdom so that there could go out to our poor people the best, that the present House of Commons can do.

I have been asked one or two questions respecting Scotland. We have received many deputations on the financial burden. I do not propose this evening to do more than touch on that subject, for the Chancellor of the Exchequer will explain the financial provisions of the Bill fully on Monday. I might be permitted to state, however, that under the flat rate contributions of 60 per cent., it is thought in some quarters that Scotland would have to pay an unduly high figure. At present in Scotland, including transitional payments and block grant, the Exchequer is paying 88½ per cent., and the local ratepayer 11½ per cent. of the total cost of relieving the able-bodied unemployed. Under the Bill, according to the best information that I have been able to get from my advisers, the correspond-in percentages will be 93.4 from the Exchequer and 6.6 from the rates. In other words, the additional relief to the ratepayer in Scotland amounts to about £450,000. That is a very substantial sum of which the ratepayers in Scotland will be relieved when this Bill comes into force. As the Minister of Labour indicated this afternoon, the Financial Provisions of the Bill will be reviewed two and a-half years after the Bill becomes law.

There are some other points which hon. Members have brought before me this afternoon, and I will deal very shortly with one or two of those raised by the hon. Member for East Birkenhead (Mr. White). He took exception to the deficit on the Insurance Fund. A scheme such as Part I of the Bill is either an insurance scheme or it is not. If it is an insurance scheme, deficits must be met by those who contribute to the scheme. It is very valuable that the Government have definitely determined that the deficit which exists to-day shall be wiped out gradually by a process spread over many years. I suggest that that is an old Liberal doctrine, that if you borrow money it must be repaid.


With interest.


One or two hon. Members opposite also asked me questions on that point.


Is it not the idea that somebody else is going to pay the deficit, and is not that the complaint against it?


I suggest that this Bill is a wide and comprehensive one, and I submit that it is an attempt to deal with a national problem in a national manner.

7.53 p.m.

Captain FRASER

I beg the indulgence of the House to ask my right hon. Friend a question which will take but one minute. I am anxious that the smaller war pensions shall be excluded from consideration when the ex-service man goes before the official for the consideration of his means. I want to ask the right hon. Gentleman whether he can assure me that the Financial Resolution will be so drawn as to make it possible, in the Committee stage, for those of us who feel strongly about the matter to move an Amendment which will add slightly to the cost to the Exchequer. I want, secondly, to ask him if, when the time comes in Committee, he will give sympathetic consideration to that point.


The Financial Resolution is so drawn that the point can be raised in Committee.

Motion made, and Question, "That the Debate be now adjourned," put, and agreed to.—[Mr. C. Edwards.]

Debate to be resumed upon Monday next.

The remaining Orders were read, and postponed.

  1. ADJOURNMENT. 16 words
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