§ (1) As from the first day of July, nineteen hundred and thirty-four, Article two of the Unemployment Insurance (National Economy) (No. 1) Order, 1981, and the Second Schedule to that Order shall cease to have effect, and benefit shall be at the rates in force immediately before the coming into operation of that Order; and accordingly Sub-section (1) of Section four of the Unemployment Insurance Act, 1927, shall have effect as if the Schedule (Weekly rates of unemployment benefit) to this Act were substituted for the Second Schedule to the said Order, and Sub-section (2) of Section two of the Unemployment Insurance Act, 1930 (which relates to the increase in the weekly rate of benefit in respect of dependants), shall have effect as if for the words "eight shillings," wherever those words occur, there were substituted the words "nine shillings."
§ (2) This Section shall come into operation on the passing of this Act.—[Sir H. Betterton.]
§ Brought up, and read the First time.
§ 5.37 p.m.
§ Sir H. BETTERTON
I beg to move, "That the Clause be read a Second time."
The object of this Clause is to restore the 10 per cent. cut in the standard rates of insurance benefit. I well remember when I was appointed Minister of Labour in the first National Government that it fell to my lot, within a very few days, to propose these cuts in the rates of standard benefit, and I can say without hesitation that it was to me an extremely distasteful and unpleasant task, but in the circumstances of that time it was an absolutely essential one. The Committee will understand, therefore, that it is a source of some personal gratification to me that it now falls to me to be the medium of proposing the restoration of the cuts which then had to be made. In considering what justification I have for proposing the restoration of the cuts it is not only relevant, but at the same time absolutely essential, to compare the circumstances which prevailed when the cuts were made with those existing to-day, because unless one can show quite clearly, as I shall, that the circumstances 1434 are now so different that they justify us in proposing the restoration, obviously we should not be justified in doing it.
In September, 1931, there was no more urgent question than the finance of the Unemployment Insurance Fund. Over a period of years, up to that time, deficits in the fund had been made good by borrowing. The debt was rapidly increasing. In the financial year immediately preceding, the borrowing amounted to £36,500,000, and the debt was going up at the rate of rather more than £1,000,000 a week. Further, the figures of unemployment were rising then at an alarming rate. In 18 months they had risen by 1,200,000, and in September, 1931, the number of registered unemployed was more than 2,800,000, while the number of those in employment was estimated to be 9,196,000. But there was, as it seemed to me, an even more significant fact to be borne in mind. I well remember my predecessor in this office, in the month of June, 1931, I think, when putting before us certain possibilities and certain figures relating to the Insurance Fund, visualising the possibility that the figure of 2,800,000 would rise to 3,000,000 in the approaching winter. She put forward figures based on that hypothesis, which fortunately were not realised; but I think that is sufficient indication of the extreme gravity of the view which those who were in the best position to judge took of the prospects before us.
I have made it clear from time to time that the measures which were being taken were all necessary if our contributory system of unemployment insurance was not to be destroyed, and I have always been careful to distinguish between the changes that were necessary to preserve the financial stability of the contributory unemployment insurance scheme and those other economy measures which were found to be necessary in the wider and more general interests of the country. On referring to the Debates of September, 1931, I find that on 28th September I said:The fund will not carry benefits on the present scale without recourse to borrowing which it is absolutely imperative to stop—or without such an increase of contributions as would be quite unjustifiable in 1435 relation to the resources of those who have to pay those contributions while they are at work."—[OFFICIAL REPORT, 28th September, 1931; col. 104, Vol. 257.]No one regretted the course we had to take more than I did, but if those were the circumstances then we are now entitled to show what the circumstances are now which justify us in proposing this restoration. On 19th March, 1934, the number of registered unemployed was 2,201,000, a decrease of 600,000 as compared with September, 1931, and the number of persons in employment is estimated to be 10,058,000, an increase of 900,000. While in September, 1931, the expenditure exceeded income at the rate of £60,000,000 a year we now find that with an average live register of 2,300,000 the income would exceed the expenditure at the rate of £6,500,000 a year—with the changes made by the Unemployment Bill. Therefore, in my view, we are justified now in saying that the fund will carry benefits at the rates in operation before the cuts were made and without any danger to the financial stability of the fund. In case there should be any misapprehension, I should like to make it perfectly clear that nothing which we are proposing in this Clause will prejudice the Statutory Committee in dealing with the future position of the Unemployment Fund. As I have explained very fully more than once, it will be open to the Committee to recommend any alteration in any particular item and to recommend the adjustment of contributions if they think fit.
The hon. Member for Gorbals (Mr. Buchanan) is not in his place, and I am sorry that he is not, because on more than one occasion he has made a point with which I am now going to deal. Other hon. Members have also made it during the discussions on this Bill. They have said that the Statutory Committee may make a recommendation as to the restoration of the cuts, but on the other hand may not; that there is no guarantee that the cuts will be restored in the unemployment benefit; that the Chancellor of the Exchequer might find himself in a position to do something with regard to the other cuts, but the Committee might not recommend that that restoration be made in insurance benefits, and that, therefore, there is no guarantee. I think hon. Members will realise that it was impossible, at the time when those criticisms were 1436 made, for us to meet them, as the Chancellor of the Exchequer and myself would like to have done, without exposure of the forthcoming Budget Statement.
There is another point which I want to make, because I referred to it when I was proposing, in 1931, the imposition of these cuts. When the reductions in the rates of benefit were made I showed that if allowance was made for the fall in the cost of living between 1924 and September, 1931, the reduced rate of 15s. 3d. for a single man was almost exactly equivalent in purchasing power to the rate of 18s. for a single man, which was the weekly rate of benefit under the Act of the first Labour Government. In proposing that the rates of insurance benefit should be fully restored, the Government are returning to the rates of benefit passed by the Labour Government in their Act of 1930. I should like the House to realise that, after this Bill passes into law, an unemployed man who is drawing standard benefit will be in a far better position than he was in 1930. The cost-of-living index to-day is 39.0 per cent. over 1914; the cost-of-living index for the year ended March, 1930, was 63.5. If the proposed rates of benefit at the present cost of living are adjusted to represent their full value, allowing for the fall in the cost of living, hon. Members will find that 17s. per week to-day is worth more than 17s. per week in 1930 by no less than 3s. In other words, a man can buy as much for 17s. per week to-day as he could buy for 20s. in 1930.
The comparison of the real values of the rates of benefit for a married man is even stronger. Under the new rates of benefit, a man with a wife and two children will receive 30s. per week when this Bill becomes law. In real values that is worth 35s. 3d. by the standards of 1930. It is clear from this comparison that we are not only placing the unemployed insured man in the position he was in before the reduction of the benefit was made, but in a far better position, having regard to the real value of the benefit. I am certain that the Committee will join with me in expressing satisfaction that it is now possible to restore in full the rates of standard benefit, and to pay those rates out of the fund, the financial stability of which is, in my judgment, assured.
§ 5.51 p.m.
§ Mr. GREENWOOD
I fully appreciate and so do my hon. Friends how distasteful the right hon. Gentleman's task was in 1931. I do not quite share his view that that task was essential, but all of us give him credit for having had to pilot through the House a reduction of benefit that must have been very highly distasteful to him. I must say that, because it will perhaps be the last kind word which I shall say about him before I sit down.
I have not noticed any spirit of jubilation in the Committee this afternoon. I had thought that when the Committee stage of the Bill was resumed and these new Clauses were to be discussed, and when we were to have before the Committee for the first time a restoration of the cuts, that the benches would have been crowded by enthusiastic supporters of the Government wishing to pay tribute to the magnificent statesmanship of the right hon. Gentleman. I have not noticed any special enthusiasm either about the first of the new Clauses which we discussed or about the Clause which the right hon. Gentleman has now moved. In our opinion, this is a very tardy long-delayed act of justice to unemployed workers. Yes, a partial one, as my hon. Friends remind me. There never was any reason for delay in announcing this concession.
The right hon. Gentleman has given us an example this afternoon of the efficiency of his Department. He quoted figures which were used in the House by his predecessor, Miss Bondfield, as regards unemployment. The Government have known for the past 12 months the trend of the unemployment figures, and they knew roughly what the reduced scales of benefit would mean in expenditure. They knew what the increased scales of contribution, about which we have heard very little to-day, would mean. It was perfectly possible for the Government, because they had the knowledge at the time of the Second Beading of this Bill, to have included a Clause saying that they were going to restore the cuts. They did not choose to do that. They were waiting until the great mystery day, the great Budget day, when the Chancellor of the Exchequer descends here in a cloud of smoke and goes up in flame as the hero of his supporters. It was left to him, for no reason 1438 whatever, to announce the restoration of the cuts in unemployment insurance benefit.
Speaking for my hon. Friends, I am bound to say that none of us will vote against this Clause. [HON. MEMBERS: "Oh!"] At least, we are consistent. We opposed the imposition of the reductions in 1931, and we should be untrue to our faith if on this occasion we were not to support the Government. We regard this as a very tardy act on their part. They have known for a long time that they have been piling up a surplus in the fund. It is admitted that, with unemployment at its present level, there will be a surplus of £16,000,000 a year, or three times as much as the fund is going to help to provide every year as a prior charge. We have heard very little to-day about the £5,500,000 which has to be paid in two half-yearly instalments towards wiping off the debt, but we know that the Government must have known, at the time when they imposed the new rates of benefit and the new rates of contribution, that in a very short time the fund would have a surplus. Indeed, they boasted that that was their intention, and their one ambition and aim has been to make the fund at least self-supporting.
Now, as a result of the increased contribution—there is nothing in any new Clause to restore the old contributions—and a diminution of unemployment which is shared by the world and is not confined to this country, nor is it in any way due to the actions of this Government—[HON. MEMBERS: "Oh!"] I understood in 1931 that the situation was due to world causes, and it is sometimes suggested that prior to 1931 it was due to the Labour Government. I quite understand the attitude of hon. and right hon. Members opposite, but I understood that the "economic blizzard" was due to world causes. It has been recorded since 1931 that such improvement as there has been in trade is also due to world causes. Therefore, I can give the Government no credit for any reduction whatever. I can only charge them with acts of their own in regard to which there has been legislation, such as the reduction of benefit, the increase of contribution and the surplus on the fund which they have been nursing and which they meant to disclose at the appropriate time in order to fulfil election promises made in 1931.
1439 I said on the earlier Clause that the restoration of the cuts is not comparable with the reduction of the Income Tax; it is in no way comparable. Unemployed workers in 1931 had a far larger cut in their incomes than did the Income Tax payers, and all employed persons had to pay a larger contribution in order to help to keep the unemployed. There has been a considerable volume of opinion in the country which even reached the ears of the Chancellor of the Exchequer, that the Income Tax payer would have preferred a full restoration of all the rates which the unemployed enjoyed, and of the benefit which they had prior to 1931 before their incomes were reduced. It came to the ears of the Chancellor of the Exchequer, who took it upon himself to reprove the Archbishop of York for interfering in politics; but, from my knowledge of the two gentlemen, I would rather have the Archbishop's political judgment than the Chancellor's on a matter of this kind.
I come to the next point, and it is a purely political point. The right hon. Gentleman last week, when in his Budget statement he dealt with the restoration of cuts, was dealing with something which had nothing whatever to do with the Budget at all. Why was it done? It was done in order to gild the pill of the reduction of the Income Tax for the masses of the people. The two things were linked together. Income Tax is dealt with in the Budget; it is part of the normal income of the nation. As regards the Unemployment Fund, the right hon. Gentleman, during the discussion on the first Clause, tried to correct an hon. Friend of mine about his making a profit out of the Unemployment Fund. He got up, full of indignation, to explain that he was doing no such thing—that it was the Unemployment Fund, and he had nothing whatever to do with it. I must say that I think the Government would have treated this Committee and the country more honestly if they had restored the cuts, as they knew they could have done, when the Bill was introduced. I think that as a National Government—which never considers party political issues, so I understand—it would have been better for them to have been sufficiently honest to do that, and not to try to mix this question with a reduction of the Income Tax and a 1440 reduction of the horse-power tax on motor cars.
This matter had nothing whatever to do with the Budget; it has no relation to the Budget. The fund is a fund which is contributed to by the Treasury on principles decided by legislation, but the amount that is paid in does not depend on the right hon. Gentleman when the legislation is passed; it depends on the number of insured workers. The fund is contributed to by three parties, and it is due to the surplus which those three parties have created under the provisions of legislation that there is now a balance of £16,000,000 in the fund, which is enabling the Government to restore the rates of benefit—rates which, in the judgment of most of us, ought never to have been reduced. I hope that supporters of the Government, in all fairness, whatever they may think about the Budget, will not put this to the credit of the right hon. Gentleman's Budget, but will regard this act of restitution on the part of the Government as due to the reasons to which it really is due—first, an increase of contributions in 1931; secondly, a reduction of benefits in 1931; and, thirdly, a reduction of unemployment due to nothing that this Government has done specially to bring it about on the scale on which it has come about. The Government, with all these facts in their minds from the beginning, have delayed a long overdue return to the old standard rates of benefit, and, while I do not wish to accuse them unduly, they have done it for political reasons. We of course accept, in these qualified terms, the restoration of the cuts. We doubt the Government's motives; we think they have been very late in doing it; and we are bound to say that the people who have made it possible have not been the Government, but very largely the unemployed who have been suffering during the last 2½ years, and those who are at work and on whom increased contributions have been imposed.
§ 6.5 p.m.
§ Mr. GRAHAM WHITE
I think that no one who was in the House of Commons in the autumn of 1931, when it fell to the lot of my right hon. Friend to propose these cuts which he has now had the satisfaction of cancelling, would doubt the extreme distastefulness to him of his task at that time. I am sure that everyone in the House will be glad that he has had the satisfaction, at perhaps 1441 an earlier period than at that time seemed likely, of coming down to the House and proposing that the cuts should be cancelled. The way in which the country accepted and continued to endure the cuts which were then imposed was one of the most remarkable things in the national life of this country in recent years. Prior to the Election, there were people who thought that the possibility of governing this country by accepted methods was coming rather near to an end. That turned out not to be the case. Another very remarkable thing has been the development of public opinion with regard to the restoration of these cuts. There has been something bordering upon complete unanimity in this country that they should be restored at the very earliest possible moment.
I do not wish on this occasion, which is, after all, a remarkable and satisfactory one, to engage in the somewhat ungrateful and ungracious task of looking a gift horse in the mouth, but I cannot refrain from pointing out that an impression is gaining ground that the Chancellor of the Exchequer is having, if I may use a colloquialism, rather too easy a getaway with the restoration of the cuts. The Minister of Labour was able to give the Committee a very welcome catalogue of facts indicating the satisfactory condition in which the fund now is and the satisfatory reduction in unemployment which has taken place over the last 12 months; but in the course of that recital he did not mention that, from the financial point of view at all events, it is an argument to which I do not think there is any answer that the restoration of the cuts has been possible owing to the fact that the emergency levy which was made upon the contributors to the fund in 1931, namely, the raising of the 7d. and 8d. contributions to 10d., is still in force.
I sincerely hope that the Chancellor of the Exchequer will not prove obdurate with regard to the debt upon the fund, which I hope we may have an opportunity of discussing on some other occasion, and that the emergency levy, too, will not be regarded as being outside the scope of the things which it is an obligation of the country to restore. I hope that it will not be left entirely to the Statutory Committee, without guidance 1442 and indication as to the national purpose in this matter. It is indeed important from the point of view of industry—which, at this stage of the national recovery, needs rather urgently some fresh impetus—that an encouragement of that kind should be given to industry by a reduction of the contributions which have to be paid. I am very glad indeed that it is now possible to cancel out the cuts, not merely from the human aspect of the problem—although I think that that is perhaps the most important aspect of all—but also for the technical reason that it brings the Bill somewhat nearer to the sphere in which it may become a practical and workable scheme. As the Bill was introduced, with the two competing authorities of Part I and Part II, it was utterly impossible that the Unemployment Insurance scheme should have survived. Whether it can survive now or not I do not know, but, at all events, the financial readjustment which will follow from the passage of the Clause we are now discussing will make it more possible for the contributory scheme to survive. Whether it will or not can only be tried out by actual experience, for it remains to be seen whether the disadvantages, if there are any disadvantages, of the allowances under Part II will be so great as to make it worth the while of men to pay contributions of 10d. a week in order to secure benefit under the contributory scheme. There must be a check somewhere in Part II if that inducement is to be worth more than 10d. a week. But we shall have to await the development of administrative methods before we realise how it will work out. For these and other reasons I am sure the whole Committee will welcome the Clause, and will be glad that the right hon. Gentleman himself has had the opportunity of cancelling out the work which he began in 1931.
§ 6.12 p.m.
§ Mr. A. BEVAN
I rise to continue a point which I endeavoured to make when we were discussing the last Clause, but on which at the time neither the Minister of Labour nor the Chancellor of the Exchequer could have replied without being out of order. Before, however, I come to that point I would like to say also that the pleasure of no Member of this Committee is exceeded by my own at the restoration of this 10 per cent. 1443 I represent in the House a constituency in which over 55 per cent. of the adult population are unemployed, and are, as far as I can see, likely to be unemployed for some time; and the restoration of even this small amount must make a considerable difference in the circumstances of those people. It is because of my pleasure at the restoration of the cut in that way that I am anxious that the restoration should be consolidated, and that there should be nothing at all in the Clause or in the Bill which might take away from my people what it is suggested they are now to receive.
I do not want to subject this matter to too microscopical an examination, which might be considered ungrateful, but nevertheless I am compelled, in the interests of my constituents, to put one or two questions, but I should first like to point out that the Minister of Labour, in moving the Second Reading of the Clause, did not put before the Committee all the relevant facts. He emphasised, of course, as he was entitled to do—though I must say that some people in my constituency seem to hold a different view—that the cost of living has fallen substantially. That raises not only the existing value of unemployment insurance benefit, but also the value of the amount which is being restored. At the same time, however, the right hon. Gentleman should remember that the value of the increased contributions has also gone up. If there was a 40 per cent. increase in the workmen's contributions in 1931—as there was—and if we accept the right hon. Gentleman's figure for the increase in the value of money in the meantime, the increase in the contributions may now be valued at 55 per cent., so that the workman who is contributing to the solvency of the fund is contributing 55 per cent. more in value than he did in 1931. So that we have to set that off on the debit side. I should like to put this question to the Chancellor of the Exchequer. Will the public assistance authorities be entitled on 1st July to increase the maxima of those on transitional payments to the new maxima? I tried to get a reply earlier, and I understood the Chancellor to shake his head and intimate that they will not be entitled to do so.
The hon. Member, surely, cannot be under any misunderstanding. Transitional payments are limited by Statute to the amount of the unemployment insurance benefit and, if the benefit is put up the maximum transitional payment that can be paid at the expense of the Exchequer is put up at the same time.
§ Mr. BEVAN
That is quite clear to me. I was under no misapprehnsion about it at all. I understand that, if the maxima are increased, transitional payments will, in very many instances, also be increased and the burden on the Exchequer increases. That is clear to me. What is not clear is the amount by which it can be increased and, indeed, if I am in some doubt about the matter, it is because the Chancellor of the Exchequer shares my doubt. In making his calculation, he was unable to tell by what amount the demand upon the Budget would be added to by the alteration of the maximum. He made the calculation that it might be somewhere in the region of £3,600,000 in the current year. If hon. Members are correct in the assumption that, where men are now receiving the maximum transitional payment, they will be entitled to receive the new maximum on 1st July, the Chancellor of the Exchequer should be able to tell us now what it will cost.
§ Mr. MABANE
Surely the Chancellor will not know how the needs of a family have altered. One member of a family may get employment.
§ Mr. BEVAN
The assumption upon which I am going is one which was shared generally by supporters of the Government, and which they derived from the Chancellor's speech, that the raising of the level of insurance benefit would carry with it the raising of the standard of transitional payment where those people were on the maximum. I suppose that in many parts of the country over the week-end supporters of the Government have been trying to make the most of the point. Before the matter leaves the Committee, I should 1445 like to get some clarity upon it, because the public assistance committees are watching the position very carefully. They want to know where they are. If I am correct in assuming that the maximum transitional payment will be increased to the new maximum, I cannot understand the Chancellor's difficulty in giving us the figure of cost. The hon. Member opposite did not assist him at all. It may be that in the meantime the figures will change, but so will the figures of unemployment generally. Surely, the figure of unemployment on 1st July is roughly calculable.
§ Mr. MABANE
The hon. Member himself has just made it plain why the Chancellor cannot estimate exactly.
§ Mr. BEVAN
As a matter of fact, the Chancellor has not estimated at all. He said that probably a Supplementary Estimate will be necessary. The position of the Chancellor is that at the moment the figure is unknown, and it is unknown because it is not intended that those in receipt of transitional payment at the maximum should be raised to the new maximum automatically on 1st July. We desire to bring that out, because it reveals to the full the utter hypocrisy of the Chancellor's claim that they are restoring the cuts to the unemployed. No such thing is being done. The value to the Chancellor of the Exchequer of the reduction in transitional payment is infinitely greater than the reduction in unemployment insurance benefit, and to that extent he is still keeping back money which properly belongs; to the unemployed.
I should like to make the position even clearer than that. If a man is receiving 15s. 3d. a week at the moment, and 15s. 3d. is the assessment of his need by the public assistance authority, and if the public assistance authority would have assessed his need at 17s: a week if the maximum did not stand in the way, he would automatically get his 17s, a week. If, on the other hand, a man is receiving 15s. 3d. a week and they would have assessed his need at 16s. a week, he will get the ninepence. He will not get 17s. In other words, there is no automatic raising of the man at 15s. 3d. to the new level of 17s.
§ The CHAIRMAN (Sir Dennis Herbert)
I think the hon. Member will 1446 see here that he is getting out of order. On this Clause he is coming to a discussion of the whole machinery of Part II of the Bill. I have been following very carefully, and I thought I foresaw what was coming. Up to the present I did not think I need say anything, but his last sentence gives me the idea that he is now going to discuss Part II of the Bill.
§ Mr. BEVAN
It was not my intention to do that. I wanted to confine myself strictly to the financial consequences of the proposal now before the Committee. I am extremely anxious to find out what the value of this concession is, because the public assistance committees all over the country are watching this Debate. Am I correct in assuming that there will be no automatic increase? If there is to be no automatic increase, of course the Chancellor cannot tell us what new assessment the public assistance committees will make. They may make it 15s., 16s. or 16s. 9d. They do not know, and these men will be subject to a deprivation to which they were not subject in 1931.
§ The CHAIRMAN
The hon. Member has raised it now for nearly a quarter of an hour, and I made no complaint until the last minute or two of what he has done, but he is now getting beyond what is in order.
§ Mr. BEVAN
May I ask the Chancellor whether the amount of transitional payment that is at present being paid can be automatically increased on 1st July by 10 per cent. or will the public assistance committees find themselves faced with a hostile Minister of Labour, a hostile Chancellor of the Exchequer, and a hostile Minister of Health if they say, "Obviously the Chancellor of the Exchequer has decided that a man cannot be expected to live on 15s. 3d. a week; the standard of unemployment insurance benefit is to be raised, and consequently our estimate of a man's need should be adjusted to the new standard, and the amount should be raised."? If that is 1447 not the case, the gap between the man on transitional benefit and the man on unemployment insurance benefit widens and, as the gap widens, the injustice to the worst hit people of the country increases. As the gap between transitional payment and unemployment insurance increases, you not only perpetuate the 1931 cut but you perpetuate it at a greater value. I, therefore, ask hon. Members to defend that proposition.
There is one more point I should like to make. When the Bill comes into operation, the maximum rate of benefit will be abolished. An hon. Member opposite has made the point on several occasions that one of the merits of the Bill is that it enables the new board to pay more than the maximum rates, and, consequently, that we were not entitled to argue that a man would receive less under the board than he is getting at present; indeed he might receive more. I cannot quite understand where hon. Members now are. Here we are raising the amount of insurance benefit because, presumably, a man who is receiving benefit in respect of his contributions is a worthier person than one who has exhaused his benefit. That is what you are saying if you keep transitional payment where it is, and raise unemployment benefit. If, under the Bill, you contemplate raising a man higher in Unemployment Insurance benefit, why does not the Committee now demand that the transitional payment rates of this man shall be automatically increased to the new level now set up? Obviously it is intended that there should be a wide margin between the two.
§ The CHAIRMAN
The hon. Member now is definitely out of order. If he proposed an Amendment to that effect, it would be ruled out of order. It is entirely outside the scope of this Clause, and is already covered by the provisions which the Committee have passed in Part II of the Bill.
§ Mr. BEVAN
I was concluding on that argument, because I was extremely anxious to find out the actual proposals of the Chancellor of the Exchequer. I suggest to hon. Members that, if they are anxious concerning the unemployed people in the distressed districts of 1448 Great Britain, they should force the Chancellor of the Exchequer to give a reply to the two questions which I have put. The questions—and I will repeat them for the benefit of the Committee—are (a), whether on 1st July men who are on the maximum rates of transitional payment will automatically be raised to the new maxima now set; and (b), whether those who are now receiving transitional payment will be entitled automatically to receive, or the local authorities be entitled to give, the 10 per cent. increase in the transitional payment of those then in receipt of payments in accordance with the new standards which the Government consider desirable? If the answer to the two questions is "No," then I would say to the Chancellor of the Exchequer that he is not restoring the cuts, but is still hitting harder those who are already hardest hit.
§ The CHAIRMAN
Any argument based on the result of such an answer is again out of order. I did not rule, and do not propose to rule, the hon. Member out of order, because he has requested information which he wants in considering these things, but it is a request the answer to which does not pertain to this Clause at all, but to something already passed by the Committee.
§ The CHAIRMAN
I have already said that I had allowed the hon. Member to ask the question, but I am objecting to him going on with his argument. I shall allow the Chancellor of the Exchequer to answer the question, again up to a certain point, but if he refers to certain matters which are out of order I shall have to stop him.
§ 6.35 p.m.
§ Mr. MABANE
The hon. Member for Ebbw Vale (Mr. A. Bevan) was endeavouring to discover some nefarious purpose on the part of the Chancellor of the Exchequer because he had said that he could not make an exact estimate of what the hon. Member thought ought to 1449 be made. Suppose Part I of the Act came into force before Part II, and suppose that during that year a number of people who were on transitional payment came on to the additional 26 weeks, that would vary the estimate. I will give him another reason. The needs of a family are varied by the number of people in the family who are in receipt of wages. Suppose at the time the hon. Gentleman wants the estimate to be made the number of people in employment has continued to increase at the rate at which the right hon. Gentleman the Minister of Labour has indicated it has increased recently, that would be another reason why it would be impossible for the Chancellor of the Exchequer to make an exact estimate of the kind which the hon. Member for Ebbw Vale indicated. Therefore, I think that his point that he can find some nefarious purpose on the part of the Chancellor of the Exchequer merely because he said that, quite truly and obviously, he cannot so inform him, is not a good one.
§ 6.37 p.m.
§ Mr. BUCHANAN
The Clause which we are discussing definitely fixes the allowances in the case of the dependants. When we have passed the Clause, we shall have practically said in effect that there can be no alteration in the amount for the dependents fixed by the Government. The Committee are now engaged in fixing the scales of benefit for those on standard benefit. Practically no Amendment to alter dependants' benefits will be allowed once we have disposed of the Clause. We are fixing the scales of benefit not for the claimant but for the dependants. It would be appropriate at this stage if something could be said in connection with what has already taken place on the restoration of the cuts. It is true that the Government have restored cuts to the extent of 10 per cent., but they have not entirely restored the cuts to the unemployed. The unemployed suffered other cuts. They had their standard benefit cut down, roughly speaking, from 70 weeks to 26 weeks, and they had to face the operation of a means test. Consequently the Government 1450 are only restoring in effect one of the three cuts which have been made. To-day they are fixing the amount to be payable in standard benefits to a wife and child of an unemployed man. It would be entirely wrong to allow the opportunity to pass without making a protest.
I am sorry that, for technical reasons, an Amendment increasing the amount in respect of children to 6s. and also increasing the amount allowed in respect of a wife will not be called. I have observed, both on this side of the Committee and on that, a clamant desire to see the contributions reduced. I am not an opponent of reducing contributions, but I am not clamouring for it to be done. I am in touch with the ordinary working people as much as anyone in this Committee, and I have found no desire on their part to have the contributions lowered. Before I would be a party to reducing the amounts paid by the working people, I want to see a greater amount of unemployment benefit given to the children, and also to the wife of the claimant. The first thing to do is to see that the amounts given for the maintenance of human beings are raised to a decent and humanitarian level.
I want to refer to a matter which was raised by the hon. Member for Ebbw Vale (Mr. A. Bevan) in regard to the form of determination. I know that in essence the answer may be that public assistance committees determine the amount payable to an unemployed man. A man now receives 15s. 3d. Is it to be taken that that 15s. 3d. is automatically raised to 17s.? A man who has a family working has 8s. on a determination claim. Is he to receive a 10 per cent. increase on the 8s.? In other words, is the 10 per cent. to apply to every award which has been made? On the present fixed basis of the working of the public assistance committees will everybody, whether receiving 15s. 3d., or a larger or a smaller sum, have the amount increased by the 10 per cent. allowed by the Chancellor of the Exchequer? That is the point which should be answered. It is not sufficient for the Chancellor of the Exchequer or the Minister to say that it is for the local public assistance committees to determine. In that case you would not be restoring it, but leaving it to a subsidiary body to say whether the increase should take place or not. 1451 Parliament has, in fact, said that it shall be restored, and no subsidiary body should be allowed to deviate from what Parliament has decided. We want to know definitely whether everybody who receives a transitional payment is to have the benefit of the 10 per cent.? I think that the public assistance committees will not possibly continue to operate long after 1st July, and that possibly to that extent there may be a new board, but whether it be a new board or public assistance committee we should know the intention.
I want to reinforce the plea that is being made in respect of the benefit to dependants. I know it has been argued by the Minister of Labour that the cost of living has fallen, and the same argument was put forward by his predecessor. We may change Governments, but coalition in this respect seems to continue. The Lady who occupied the position of Minister of Labour in the Labour Government, when we advocated the payment of 5s. to dependants, quoted figures to show that in 1930 the cost of living had fallen so much as compared with the cost of living in 1924. In 1924, when the Labour party were in office, a Liberal Member moved that the allowance should be 3s., and we were told that the cost of living had fallen. The cogent point is not whether the cost of living has gone down or not, but whether 2s. is sufficient to maintain a child. I will concede all the figures and facts concerning the cost of living being down. I will admit that the cost of living to-day is a little lower than in 1929. I admit that hon. Members on this side voted for 2s. then. That was acknowledged by one hon. Member who said that the Liberals made him do it. [Laughter.] It is not a laughing matter; it is serious. What an admission, that anybody could make one vote for 2s. in such circumstances. Whether it was their Government or their party that made them vote for 2s., that is no excuse. Nothing should have made hon. Members do it. Humanity comes before party. It is a most degrading excuse. Hon. Members did it as individuals. There is no excuse. Rather than have been a party to such a proposal, either in 1924 or 1930, that a child should live on 2s., I would gladly have gone out of public life. These defences leave me cold.
1452 The claim that I make is that to-day, even with the restoration of the cuts, the child life of this country cannot be maintained on such a figure. I read a very moving passage in the speech made by the hon. Member for Caerphilly (Mr. M. Jones) last week. He asked why this House of Commons and this Government would persist in ill-treating the young. He said that it was the young who suffered, the young who were kept back. When I read that passage it moved me very much, but these things can be charged against all of them. There is still an opportunity for decent men and decent women, who have some independence, to insist that this provision is uncharitable, inhuman and wrong. I hope that the Committee will see that some restoration is made, so that a child is given sufficient to enable it to be maintained under humane conditions.
§ 6.48 p.m.
§ Sir P. HARRIS
I have been silent while the Minister of Labour has been cross-examined on the intentions of the Government. I thought the intentions of the Government were quite clear, and that there was to be, automatically, a 10 per cent. increase in the allowances for transitional benefit, in the same way as for standard benefit; that is, if the conditions remain the same, if the number of children and dependants remain unaltered. The intention of the Government, I take it, is that the various public assistance committees on 1st July should automatically increase the allowances by 10 per cent., and that the cuts should be restored on that day. We are entitled to an answer, yes or no, on that point. The Government, of course, are entitled to make the qualification, "providing that the conditions remain the same." We are entitled to have the air cleared not only in the interests of the people concerned, but in the interests of the people who have the difficult and responsible task of administration to carry out.
§ 6.50 p.m.
§ Mr. EDWARD WILLIAMS
I am surprised at the silence of the Government supporters. I well remember last week when the Chancellor of the Exchequer made his statement that the unemployed were to have their cuts restored, and I should have thought that hon. Members supporting the Government would have assisted the Opposition in bringing up 1453 this point and seeing that it was cleared up. Am I to conclude that their silence is an indication that they believe that the Chancellor of the Exchequer last week decided that the whole of the unemployed were to have their 10 per cent. cut restored? If their silence implies that, I shall welcome the reply of the Chancellor of the Exchequer. From the interventions we have had from supporters of the Government that cannot be so, because they infer that the means test is to continue to be applied.
§ The CHAIRMAN
We certainly cannot discuss on this proposed new Clause the question whether or not the means test is to continue.
§ The CHAIRMAN
I have said that, having allowed a question to be asked, I should certainly allow the Chancellor of the Exchequer to answer, but I guarded myself by saying that I could not allow discussion upon this point, and if the Chancellor of the Exchequer appeared to be discussing it I should have to correct him. I will do my best to make the matter clear. There are certain provisions of Part II which have been decided upon and which this Clause does not purport to alter in any way. If that is the case, any attempt to discuss those provisions of Part II which have already been passed and are not dealt with in the proposed new Clause, cannot be made on the new Clause.
§ Mr. WILLIAMS
There seems to be no doubt that the rates of payment that will be made under Part II are determined by Part I, and by this Clause. I think that is the substance of the Debate. If the 10 per cent. is to be restored in accordance with the new Clause from 15s. 3d. to 17s., and in the case of a wife from 8s. to 9s., it would seem that under Part II that is the maximum that is to be paid.
§ The CHAIRMAN
That is outside this Clause. Whether or not the hon. Member correctly interprets the provisions of the Clause, I cannot say, but the provision for the relief that may be granted under Part II does not arise here. It seems to me that we are drifting into a discussion of the general provisions of 1454 Part II, and that is definitely out of order.
§ Mr. WILLIAMS
There is no provision for the restoration of the 10 per cent. to an enormous number of unemployed who come under transitional benefit. There are no means whereby 1,000,000 persons can receive the 10 per cent. restoration. They are definitely excluded by this Clause.
§ Mr. LAWSON
Will the Chancellor of the Exchequer be able to answer the question put by the hon. Member for Ebbw Vale (Mr. A. Bevan)?
§ The CHAIRMAN
It is for the Chancellor of the Exchequer to say, and not for me. He can give any answer he chooses, as long as I do not stop him for being out of order.
§ Sir LUKE THOMPSON
Are we not discussing the rates of standard benefit under this Clause? Is it not permissible for the Chancellor of the Exchequer to reply if he cares to do so? The question of transitional payment does not arise.
§ Mr. LAWSON
Following upon the point of Order, would it be proper to say that if the Chancellor of the Exchequer cannot answer the question about transitional payment, and we cannot discuss it on this Clause, then there is no opportunity of discussing it?
§ 6.55 p.m.
§ Miss RATHBONE
I do not want to be out of order. I want to ask a question relating to the rates of standard benefit and transitional payment. The Minister of Labour will remember that he gave us repeated assurances during the discussion of the earlier parts of the Bill on two things: (1) that the scale of assistance adopted by the Unemployment Assistance Board would not be limited by the scale of unemployment benefit, and (2) that a person in receipt of ordinary benefit would be able to receive supplementary benefit subject to the means test in future from the Unemployment 1455 Assistance Board instead of the Poor Law authorities. Is that so?
§ 6.56 p.m.
One must be careful in addressing the Committee on this point not to transgress the Rules of Order, which bind us rather narrowly on this matter. I do not want to fall into the difficulty experienced by the hon. Member for Ebbw Vale (Mr. A. Bevan) of seeing how far I could go in being out of order. I should like to say in respect to the point on which the hon. Member for Gorbals (Mr. Buchanan) laid so much emphasis, namely, that we are here finally laying down the rates of benefit for dependants, that while that is true, when the Bill comes into operation the Statutory Committee will begin to function. Assuming, as we may fairly do, that the Statutory Committee foresee a surplus in the fund which can be used to improve the conditions, it will be for them to say how in their opinion that surplus should be used in the best interests of the unemployed themselves. If they think that an increase in the benefit for dependants is the right way to dispose of the surplus, or part of it, then they will make a recommendation to that effect. In the same way, they might recommend that there should be a decrease in the contributions payable by employers and employed, which would carry with it a reduction in the contribution payable by the Exchequer. Therefore, the position is not a final one. It is final in the sense that this House then has finished with its power of altering benefits until it receives a recommendation from the Statutory Committee, but after that it is a matter which will revert to it again.
With regard to some questions that have been asked by the hon. Member, it is not true that the operations of the board are governed by the alterations in the general rate of benefit. Of course, when Part II comes into operation, then the Unemployment Assistance Board is set up, and the board is not limited, in the amount which it may grant in a particular case as is the case with transitional payments by any alterations in the amount of the standard benefit. 1456 Therefore, when the Unemployment Assistance Board comes into operation, there is no question of it being in any way bound or limited—or, indeed, affected—by any alteration that we make in the rates of standard benefit.
No; the hon. Member is quite mistaken about that. The provisions of this Bill confirm my view. The Unemployment Assistance Board will proceed on different principles altogether. Now, transitional payments are limited by Statute to the amount of the standard benefit. If the needs of a man are not met by the amount which it is permissible to pay, then he has to go to the public assistance committee to supplement what is given him as transitional payment, to the extent of his need. He will not have to go to the public assistance committee any more when the board is in operation, because it is part of the functions of the board to meet the whole need of anybody, instead of the need being met, as is now done, partly by one agency and partly by another.
In reply to the particular points of the question put by the hon. Member: in the first place, he complained that I had stated that I could not possibly foretell the amount of the Supplementary Estimate which would be necessary to carry out the increases which would be given to those who are entitled to transitional payments. The hon. Member threw doubt upon the value of the benefit which these people are to receive. The hon. Member for Huddersfield (Mr. Mabane) has already pointed out some clear and unescapable reasons why it is not possible for me to estimate accurately the amount which is to fall upon the Exchequer when the circumstances are changed. When, however, the question is put, "Is this automatially an increase which applies to every award which has been made?" clearly, I think, the answer is "No." It must be: it cannot be otherwise. I stated in my Budget speech if the payment is on a needs basis there cannot be an automatic increase. It is a very substantial increase, and the fact that there is a very large amount of money to be distributed over these people testifies to the fact. I have 1457 stated that in nine months of the financial year I estimate that a sum of £3,600,000 may be needed for this purpose.
§ 7.4 p.m.
§ Mr. BUCHANAN
Could I take this point, which has not been clearly brought out? The right hon. Member has said that the cuts are to be restored. Taken that they are to be restored, is the man on transitional payment equal to the man on standard benefit? He is now receiving a determination, or a payment, from the Exchange; that is based on his present needs. Has the present need to be increased by the amount of the 10 per cent. granted to the people on standard benefit? That is the point. Or, has the public assistance committee the right to say that, although Parliament is granting this restoration of cut, they are not going to enforce the restoration? That is the point. Is the public assistance committee likely to set aside the restoration of the cut which the right hon. Gentleman has granted?
§ 7.5 p.m.
§ Mr. LAWSON
The Committee must be obliged to the right hon. Gentleman for giving a very clear answer to the question that has been put concerning the automatic increase of the standard benefit applied to people who are on transitional payment, and the answer has been No. Those of us who are familiar with the working of the matter, and the Chancellor and the Minister who has been chiefly responsible, certainly knew that. I do not intend to pursue the matter, except to say that this answer is no only giving a very different interpretation to what was conveyed to the House last Tuesday, but has also had a very different effect upon hon. Members in discussing the Clause that has been moved. I was pleased when I saw it, and no hon. Members of any party are more grateful and delighted than we are, that this restoration is to apply on 1st July. I must say, however, that when I saw this Amendment put down to the Clause, I thought that the unemployed were to get these cuts restored twice over: they got one last week through the Chancellor of the Exchequer and were to get another now from the Minister of Labour. In fact, however, they are only getting it once, and according to the right hon. Gentleman's answer they are 1458 actually paying it back themselves. In that case some of the leader-writers of the semi-official Government papers will have to re-write their articles. We did not demur at all. We are delighted that the state of trade has improved. The Government can take all the credit they like; we do not care who takes the credit. We understood that the cuts were going to be restored from July. We now understand, however, that the unemployed are restoring their own cuts through their contributions to the fund. It is very well worth while to have had these questions made clear in the minds of hon. Members. The changed tone of the House to-day, as compared with its tone last week on this matter, is very significant. The only explanation I can give is that, instead of merely being satisfied with hearing the Chancellor and reading leading articles on this matter, by men who are practically Government officials, in certain newspapers, many hon. Members have been to their constituencies and now know—and if they do not know, at any rate their constituents know—what the Chancellor of the Exchequer did last week.
§ 7.8 p.m.
§ Mr. HOLDSWORTH
I should like to ask the Chancellor of the Exchequer one question, if he would be good enough to answer it. How did he arrive at the sum of £3,600,000 as the extra cost in the transitional payments, and how did he arrive at the number of persons who he has calculated will receive the extra benefit from the alteration? This is a very important matter for the Committee, Unquestionably, the House thought last week that everybody was to receive a restoration of 10 per cent., and it would be interesting to know how many persons get that amount of benefit, and how the Chancellor arrives at that particular sum.
§ 7.9 p.m.
§ Mr. BATEY
The Chancellor should reply to that question, for it is one which many other hon. Members would like to hear answered. The Chancellor's speech fixed £3,600,000 as the additional expenditure to those who are on transitional benefit. The question is, how did he arrive at that figure? It means that approximately only 500,000 recipients of transitional benefit will receive the restoration of the cut. If the 1459 Chancellor meant the House and the country to believe that the unemployed were to have the restoration of the cuts, surely the impression he made was that all the unemployed were to have the cuts restored. Altogether there are over 1,000,000 recipients receiving transitional payments, and the Chancellor has provided for only 500,000. He ought to have told the House that last week instead of leaving us to find it out for ourselves.
§ 7.11 p.m.
§ Mr. KENNETH LINDSAY
I rise merely because the hon. Member for Ebbw Vale (Mr. A. Bevan) has dragged my name into the Debate. Every point I made has been answered by the right hon. Gentleman. We now know—and I hope that it has been made quite clear—that there is no connection whatever between the board under Part I and the arrangements made under this Part. Unfortunately, I cannot go back and discuss what was said earlier in the Debate, but with regard to the last point—although it is not for me to answer for the right hon. Gentleman—most hon. Members on this side of the Committee were perfectly aware that, in so far as it was an estimable figure, the cuts were to be restored as far as the Government could control them. They could control the restoration of the cuts, but not up to the last point, the final figure. [An HON. MEMBER: "Why not"?] Obviously, for many reasons which my right hon. Friend has given here, and for many more which hon. Members and I know perfectly well, it is impossible to give an accurate figure. It is somewhat unfair to drag in this analogy between the board in Part I and the present arrangement, and it has led to a misunderstanding, which the right hon. Gentleman has cleared up. The cuts, we on this side of the Committee understand, are being restored. We are challenged by hon. Members opposite because we are not jubilant. Why should we be, when the matter was settled last week? We do not want to go on being jubilant.
One final point is that the hon. Member for Gorbals (Mr. Buchanan) is entitled to talk about 3s. Hon. Members opposite are not so entitled to talk. Some hon. Members on these benches talked earlier about 3s. Unfortunately, the right hon. Gentleman the Minister of 1460 Labour could not tell the whole truth at the time. Let us, however, be fair about this business all round. The general feeling on this side, as I understand it, is that the cuts are being restored in full, and if the hon. Member could point to specific cases—
§ Mr. A. BEVAN
Did the hon. Member hear the Chancellor of the Exchequer when he stated that transitional payments now being paid would not automatically carry with them a 10 per cent. restoration? Is not that ample evidence that they are not being restored in full?
§ Sir L. THOMPSON
The amount of transitional payment represents £41,000,000 per annum. Now we are making provision for about £3,750,000 for nine months. Without accurate computation, which I do not suppose the Chancellor of the Exchequer would make, that is approximately 10 per cent.
§ Mr. LINDSAY
I do not want to dispute the matter with the hon. Member, but only to repudiate the suggestion that this is coming out of the fund, and that the Government are making no contribution at all.
§ Clause added to the Bill.
§ 7.16 p.m.
§ The CHAIRMAN
The new Clause, in the name of the hon. Member for Woolwich (Mr. G. Hicks)—(Bates of Unemployment Benefit)—is out of order.
§ The CHAIRMAN
I paused and looked at the hon. Member before I put the Question "That the Clause be added to the Bill," but he did not rise. I may tell him now, however, that I have come to the conclusion that his Amendment is out of order.
§ The CHAIRMAN
I can tell the hon. Member that was because after very careful consideration I have come to the conclusion that his Amendment is out of order.
§ Mr. G. HICKS
I was under the impression, Mr. Chairman, that you were going to take a manuscript Amendment which has been handed in, and that the new Clause in my name would automatically follow.
§ Mr. KIRKWOOD
Before you leave this point, am I to understand that the Amendment in my name to increase the children's allowance from 2s. to 6s. is out of order?
§ Mr. KIRKWOOD
With all due respect, I should like to know on what grounds you have come to that decision?
§ The CHAIRMAN
On several grounds, one being that it has already been decided, in fact, twice decided, first, in the Committee stage when it was decided after a debate on Part I, and, secondly, when it was decided after a debate on Part II.
§ Mr. KIRKWOOD
Does that mean that the Amendment was out of order before it was put down on the Paper? I want to know whether those responsible for putting it down were at fault and whether it was out of order before it was even put down?
§ The CHAIRMAN
I am afraid that I do not understand the hon. Member. I cannot deal with an Amendment until it is on the Order Paper.
§ Mr. KIRKWOOD
Was it a known fact at the time when it was put down that there was no need to put it down as it would not be called?
§ The CHAIRMAN
The Amendment is on the Order Paper. I am really sorry, 1462 but I do not quite follow the hon. Member. The Amendment is on the Order Paper, it was not called, and I have stated the reason; because it is out of order.
§ Mr. KIRKWOOD
My point is this: When was an Amendment of this descriptain in order? When it was being discussed by us at our party meeting, or when it was put down on the Order Paper? When, at any time in the process of the Bill, was an Amendment of this description in Order?
§ The CHAIRMAN
The particular Amendment now is out of order, because an Amendment to a similar effect has already been discussed and dealt with by the Committee.
§ Mr. LAWSON
I do not quite understand why a discussion on rates of benefit is out of order. We have not discussed that matter on the Clause or on an Amendment. May I ask you upon what grounds an Amendment dealing with an increase of the rates of benefit is out of order?
§ The CHAIRMAN
I thought that I had made the matter perfectly clear. The allowance to children has already been decided at an earlier stage by the Committee.