NEW CLAUSE.—(Provisions in the event of postponement of coming into operation of Part I.)

HC Deb 23 April 1934 vol 288 cc1385-433

(1) If this Part of this Act is not in operation on the first day of July, nineteen hundred and thirty-four, the following provisions shall have effect—

1. (a) Sub-section (1) of Section one of the Unemployment Insurance (Expiring Enactments) Act, 1933, shall have effect as if for the reference therein to the thirtieth day of June, nineteen hundred and thirty-four, there were substituted a reference to the date on which this Part of this Act comes into operation; and
2. (b) Section eighteen of this Act shall come into operation on the said first day of July, and the repeal by this Act of so much of Section five of the Unemployment Insurance Act, 1921, as ceases to have effect by virtue of that Section and of paragraph (4) of Article eight of the Unemployment Insurance (National Economy) (No. 2) Order, 1931, shall have effect as from that date.

(2) This Section shall come into operation on the passing of this Act.—[Sir H. Betterton.]

Brought up, and read the First time.

The DEPUTY-CHAIRMAN

Sir Henry Betterton.

3.23 p.m.

Sir PERCY HARRIS

On a point of Order. May I ask if this proposed new Clause, which is a Government Clause, will take up time allocated under the Guillotine Resolution; or shall we be entitled to extra time in compensation for the fact that the Government are taking up the time of the Committee and thereby cutting out opportunities for private Members?

The DEPUTY-CHAIRMAN

I am afraid that this Clause, like all the new Clauses, must come within the time allotted by the time-table for the discussion of new Clauses.

Mr. BUCHANAN

Would it not be as well, Captain Bourne, if you could state to us what is in the mind of the Chair with regard to the calling of Amendments?

The DEPUTY-CHAIRMAN

I think that perhaps I had better not anticipate the new Clauses, about one or two of which I am in considerable doubt. I think I had better wait until we reach them, and see how the earlier discussion may affect them.

3.25 p.m.

The Minister of LABOUR (Sir Henry Betterton)

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

I think I shall be able to make clear in a very few sentences the purpose of this Clause, and the reason why it was necessary to put it down. The Clause is necessary in order to make certain what has been, of course, the intention of the Government all the time, namely, that transitional payments shall continue without interruption until the Bill becomes law and the board which is to be set up under Part II comes into operation. Otherwise there would be a hiatus, with consequences which I am sure none of us would wish to contemplate. Under the existing law, transitional payments to persons who have not the 30-stamp qualification, as well as a good many other provisions of the insurance scheme, come to an end on the 30th June this year. The Committee will remember that there is in the Bill a carrying-over Clause, namely, Clause 28; but that Clause, of course, does not come into operation until the provisions of the Bill itself come into operation, one month after the passing of the Act. When the Bill was originally drafted, I had contemplated that there would be ample time after it received the Royal Assent to allow for that period of one month, in which case Clause 28 would have come into effect; but now it seems likely—indeed, almost certain—that the Bill will not receive the Royal Assent one month before the 30th June, and, therefore, it is necessary to have this new Clause, which is a mere carrying-over Clause to secure that the transitional payments and the other provisions which normally will come to an end on the 30th June this year shall continue in operation until one month after the Bill becomes law.

3.28 p.m.

Mr. ARTHUR GREENWOOD

This is only one more of the numerous illustrations that we have had of the Government's uncertainty as to their intentions and as to the time when the Bill is to be on the Statute Book. The right hon. Gentleman has wasted some time, which under the Guillotine Resolution ought to have belonged to the House, through having changed his mind after the introduction of the Bill, and has now come to the conclusion that, although he contemplated that there would be ample time between the Bill receiving the Royal Assent and the beginning of July, that is unlikely to be the case. For that circumstance Members on this side of the Committee are not responsible; the responsibility lies with His Majesty's Government. I do not want to use too hard words, but this is another illustration of the very clumsy way in which the Bill has been handled. Under the Guillotine Resolution the time ought to have belonged to the House with the minimum of intervention through the Government changing their mind day by day, but we are now faced with having to spend time, on this last but three of the days allotted for the Committee stage, because it is found necessary to introduce a carrying-over Clause. I think the Committee, if it looks at this from a business point of view, must regard the necessity for the Clause as deplorable and must feel with me that it is very unfortunate that the right hon. Gentleman did not think a little more about the Bill before he introduced it.

The Clause deals with the time when a certain part of the Act will begin to operate. It is suggested now that it should come into operation on 1st July. I cannot quite dissociate this Clause from the next. It is unfortunate, notwithstanding certain technical difficulties which I know exist, that the date when the Act comes into operation, with the provisions as to the restoration of the scales of benefit, should not be approximately the same as that upon which the Income Tax payer begins to enjoy the advantages of the reduction of the Income Tax. While the Income Tax payer begins to enjoy his remission of 6d. from the beginning of the financial year, the unemployed workers will have to wait until 1st July. We cannot move an Amendment to make 1st April the date of coming into operation of the Act instead of 1st July. That is a matter that lies entirely in the hands of the Government. But it seems to us that it was necessary to raise this point and that, as an act of simple justice, if Income Tax payers are to enjoy relief as from practically the beginning of April, steps ought to have been taken to see that those who are to get the restoration of their cuts enjoy it from the same date.

We are not opposing the Clause, but we feel bound to point out that there is an element of injustice in allowing the Income Tax payer his relief three months earlier than it is going to be allowed to the unemployed. I am satisfied that hon. Members who may not agree with us in our general attitude on the Bill will agree that, as a matter of common justice, it would have been fairer to the unemployed, who do not and in the circumstances cannot pay Income Tax, that the restoration of the cut should date from approximately the time when the Income Tax payer gets back his beloved 6d.

3.36 p.m.

Mr. JAMES REID

There is one definite point on which I should like to ask for some explanation. It relates to the coming into operation of Clause 18, which deals with the debt. Under the Clause there is provision for the payment of annual instalments amounting to £5,500,000. Assuming that that is the figure that will remain in the Bill when it gets on the Statute Book, that would become the rate of repayment of the debt as from 1st July. But at present the fund is piling up a surplus, we are told, at the rate of £16,000,000 a year over and above the present provision for interest on the debt. What is to become of that £16,000,000 per annum between 1st July, when the Clause comes into operation, and the earliest date on which the Committee will have to apply their minds to its disposal? The general provisions of the Act will not come into operation as soon as 1st July. After they have come into operation the Committee must be set up, and then it must consider what it is going to do. It must, under Clause 17, give notice of its intention to report, and the Minister has two months to consider the report before it can receive effect through a Resolution of the House.

Therefore, it is extremely unlikely that we shall be in a position, at any rate before Christmas, possibly not before next February, to decide what is to be done with the surplus that is gradually piling up. It will not continue to pile up at the rate of £16,000,000 after the Bill becomes operative, because there will be the sums which have to be paid for extending benefit from 156 days to the whole year in certain cases, but it may very well be that £6,000,000 or £8,000,000 will be piled up between 1st July and the date at which any recommendation of the Committee can become effective. I should much welcome an assurance from the Chancellor of the Exchequer that repayment to the Exchequer will not take place at any greater rate than the instalments in the Bill after 1st July. That would seem to be in accord with the intention of the new Clause.

I raised the point in Committee on Clause 17. It was just before the Guillotine fell and there was a certain amount of interruption and the Chancellor was unable to make as full a statement as he obviously intended to make, but he said that some alteration would have to be made in the provisions of the Bill with regard to paying over to the Exchequer at a greater rate than £5,500,000 a year. If such an alteration is to be made on Report, as far as I can see this surplus piling up has no destination provided for it in the Bill, and it seems to me that the right course would be that it should continue to pile up and be available for the disposal of the Committee when the Committee comes into full working order and is able to apply its mind to that question. When there is £5,000,000 or £6,000,000 to deal with, the Committee would welcome an assurance on the lines I have suggested.

There is nothing inconsistent with the framework of the Bill in piling up a surplus of £5,000,000 or £6,000,000 for the disposal of the Committee. I ventured to ask the Chancellor of the Exchequer during the proceedings on Clause 17 whether it would be competent for the Committee to carry over from one year to another, say, £5,000,000 or £6,000,000, and the answer which he gave, as reported in column 1,654 of the OFFICIAL REPORT of 12th February, was that that would be a matter for the Committee to consider. Therefore, there is nothing inconsistent with the principle of this Bill in a sum of £5,000,000 or £6,000,000 being piled up as a sort of reserve fund. It is true that a reserve fund under that name is not provided for in the Bill, but, on the other hand, the explanation which the Chancellor of the Exchequer gave on that occasion makes it plain that something of the nature of a carry over reserve fund is provided for, or at least is competent within the framework of the Bill.

It seems to me that the sum of £5,000,000 or £6,000,000, or however many million pounds it may be, which piles up as a surplus over and above the instalment between the 1st July and the date on which the Committee can first deal with the matter in a practical way, might very well follow the lines which I have suggested and remain there for the Committee to dispose of when they first come to a full detailed consideration of their future procedure under the Bill. If the Chancellor of the Exchequer can assure us that that sum of money will be there for the Committee to deal with and will not simply fade away into the hands of the Treasury without anybody being able to question whether that is the correct destination for it or not, some of the doubts in the minds of hon. Members may be removed.

3.43 p.m.

Mr. LAWSON

I think that the Debate, short as it has been, will have shown to the Committee already the difficult position in which we are going to be placed in discussing these two Clauses separately. The Minister has introduced this Clause very shortly as though it were a matter dealing with the subject under Clause 28 of the Bill. It is clear, as my right hon. Friend the Member for Wakefield (Mr. Greenwood) pointed out, that what is really involved in this Clause is the reference to 1st July. We have an Amendment down later on to make, as my right hon. Friend also pointed out, the date 1st April instead of 1st July. I do not know whether I am right or not, but I rather gather that it is not going to be possible to discuss that date, and I should like to know. It is rather important that we should have a Ruling upon the matter.

The DEPUTY-CHAIRMAN

The position with regard to the hon. Member's Amendment to the next Clause is as follows. If this Clause is agreed to by the Committee and is added to the Bill, we are bound by it. Under paragraph (b) the date on which a charge can be laid on the Treasury under the Financial Resolution as part of paragraph A, lines 6, 7, 8 and 9 of the Financial Resolution, will then be the 1st July. The hon. Member will appreciate that as long as Part III of the Bill is in operation any increase in the way of unemployment benefit will entail a corresponding increase of transitional payment which is a direct charge on the Exchequer. Paragraph A of the Financial Resolution provides for that charge until such period as Part II of the Bill comes into operation, and that charge is only operative as from the moment that Section 5 of the Unemployment Act, 1921, ceases to have effect. If this Clause is carried that date will be 1st July this year. I hope that I have made the position clear.

Mr. LAWSON

Therefore, it will not be possible to move the Amendment?

The DEPUTY-CHAIRMAN

Not if this Clause before the Committee is added to the Bill.

Mr. LAWSON

That is a rather complicated explanation. In the nature of things, it is fortunate for me that I bad an opportunity of getting some understanding of it at any rate earlier on. Let the Committee note where this leads us. If the Clause which was so innocently moved by the Minister of Labour makes the date of this part of the Act come into operation on the 1st July, I should say that it is necessary for the Chancellor of the Exchequer to give an explanation of the finance in respect of which the date is based. It is very necessary because an hon. Gentleman has already raised the question as to whether it is based upon the assumption that payments in reference to interest do not mean something more than that. I have been wondering, as there is a balance of £16,000,000 in the fund on the present figures, whether the Chancellor of the Exchequer is assuming that the unemployment figures are to remain at the present total and whether the finance is based upon that state of affairs. Is he assuming that the fall in the figures which occurred last month, and which, fortunately, has been consistent for some months, is to be maintained? Is the Chancellor of the Exchequer assuming that the figures are to remain at the present point, or that there is going to be a fall? The Committee must understand that a fall of 100,000 or a rise of 100,000 means a difference of £4,000,000 a year as far as the fund is concerned. [An HON. MEMBER: "£3,000,000!"] Including transitional payments. I had an answer to the effect that £2,800,000 was for benefit alone. That was the figure I received from the Minister of Labour. I do not know whether the Chancellor of the Exchequer questions those figures, because I have them here in the answer which the Minister gave.

The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain)

When I was speaking on the subject some time ago I said that on a drop of 100,000 there would be an additional sum of a little more than £3,000,000 in the Unemployment Insurance Fund. Of course, I was not dealing then at all with anything outside.

Mr. LAWSON

If we take the sum of £3,000,000, it is bound to have some effect upon the fund. Is the Chancellor of the Exchequer basing the position upon the present figures becoming static or upon the possibility of a reduction in unemployment? There is a further calculation; out of the £16,000,000 there has been assumed a figure of something like £8,350,000 as the cost of the extra 26 weeks under one of the Sections of the Act, and the calculation is that some of the people who are upon transitional payments will come in. The Committee would like to know how we shall be affected. Are we to launch into a discussion of the finance of this matter on this Clause or on the Clause which follows, regarding the provision of the rates of benefit? I would much rather that the discussion took place on the other Clause. If we pass the present Clause as it is, with the July date, we shall be hindered from discussing later the possibility of making April the date, according to our Amendment. That is one of the difficulties we have been in on this Bill, mainly due to the fact that the Financial Resolution was drawn so tightly that we were precluded from discussing the debt, and now we are in the difficulty of talking either upon this Clause or upon the other Clause. I think there is a case for the Chancellor of the Exchequer making an early statement, so that the Committee will know where it stands.

Mr. HOLDSWORTH

The point is, when can we discuss whether April should be substituted for July? There would be a general desire to discuss that question, and we all wish to keep within the bounds of order. Can the Deputy-Chairman tell us whether we can discuss that question on the next Clause if we pass the present Clause?

3.52 p.m.

The DEPUTY-CHAIRMAN

The position as I see it is this—if this Clause is agreed to by the Committee it will be impossible to discuss the question, or rather to move on the next Clause an Amendment, that April should be substituted for July. It would not necessarily be out of order to raise the point that April would be a better date, on the Question, "That the Clause be read a Second time," as a reason for objecting to the Clause, but it would not be in order to move a specific Amendment to the Clause in order to alter the date to earlier than the 1st July. I hope that is clear.

3.53 p.m.

Mr. BATEY

We complain that the restoration of the cuts has been put off until the 1st July, and we want to move an earlier date. It seems to us rather strange that this Clause should be moved. If says: If this Part of this Act is not in operation on the first day of July, nineteen hundred and thirty-four, the following provisions shall have effect. The Chancellor of the Exchequer told us, during his Budget speech, that the restoration of the cuts would not take place unless the Act was in operation on 1st July. Everybody anticipates that the Unemployment Act will be in operation on the 1st July. Therefore, it appears to me to be totally unnecessary to pass this Clause. In order that we may have a discussion on the question that the restoration of the cuts should take place earlier than the 4th July, would it be in order if I moved to delete paragraph (b) from the Clause? That paragraph says: Section eighteen of this Act shall come into operation on the said first day of July, and the repeal by this Act of so much of section five of the Unemployment Insurance Act, 1921, as ceases to have effect by virtue of that section and of paragraph (4) of article eight of the Unemployment Insurance (National Economy) (No. 2) Order, 1931, shall have effect as from that date.

3.55 p.m.

Mr. CHAMBERLAIN

I should like to correct one statement made by the hon. Member for Spennymoor (Mr. Batey), as to what I said in my Budget Speech. I Said nothing about the date on which this part of the Act would come into operation. What I said was that the cuts could not be restored by the 1st July unless the Bill had been passed and had come into law. A Bill may have been passed but not have come into operation.

The DEPUTY-CHAIRMAN

In regard to the point made by the hon. Member for Spennymoor, he will appreciate that we must read the Clause a Second time before any Amendment can be moved. I should like to consider the point that he has raised, and I will do so after the Clause has been read the Second time, and before it is added to the Bill.

3.56 p.m.

Sir H. BETTERTON

I think the Committee would desire some explanation, and it is very simple, why the 1st July was inserted in the Bill and not the 1st April as the date for the restoration of the cuts. The date is not based upon finance but upon the time when the Bill comes into law. The hon. Member asks that the restoration of the cuts should be dealt with retrospectively to the 1st April when the Bill comes into operation on the 1st July. The hon. Member knows as well as I do that it would involve inextricable confusion if we were to try, after the Bill comes into operation, say, on the 1st July, to deal retrospectively with the restoration of the cuts which, ex hypothesi, have accrued since the 1st April. The confusion that would result would make that course impossible. There is another reason, of a different character, and it answers the right hon. Gentleman the Member for Wakefield (Mr. Greenwood). He will remember that when these cuts were imposed in October, 1931, they were not imposed until after the passing of the Economy Act in 1931, but the increase in the Income Tax rate was applied for the year commencing April, 1931, or six months before the cuts operated. We did not hear at that time any protest on the part of the right hon. Gentleman that the increased Income Tax should not come into operation until the Economy Act was in operation. Therefore, from the point of view of whether it is a practical proposition to carry out the suggestion of hon. Members opposite, I say that it is not, because the confusion would be quite hopeless and, secondly, on its merits there is every reason for the course which we propose.

3.58 p.m.

Sir P. HARRIS

The right hon. Gentleman is unconvincing. We have such a belief in his sincerity and his obvious desire to take the Committee into his confidence that it does come to us as a surprise to find him giving such reasons for not doing what I believe the House wants and the country desires. Where there is a will there is a way, and if the right hon. Gentleman and the Government really desire that immediately after Parliament has decided to restore the cuts the people concerned should get the advantage of it, the Government, with all their skill and with all the legal advice at their disposal, could provide a way of achieving that purpose. Let me remind the right hon. Gentleman that if the Government desire to put into operation the restoration of the cuts when the time is ripe for them, all they have to do is repeal the Economy Act. I remember how very quickly that Act went through, and I can assure the right hon. Gentleman—I have no right to speak for my hon. Friends above the Gangway, but I am going to do so—that if the Government would bring forward a one Clause Bill for that purpose it would receive no opposition in any quarter of the House. We would let him have facilities. We would suspend the 11 o'clock Rule and everything else to let the Bill go through.

Let me remind the right hon. Gentleman why we attach so much importance to this matter. The great army of people directly concerned in these cuts have shown exemplary patience. They have been led to understand that they have had to suffer this loss in their income because of the national emergency. In many countries there would have been riots, protest meetings, bitterness and bad blood, but one of the most noticeable things here during the last three years has been the patience with which, on the whole, the inconvenience and hardship of these reduced benefits have been borne. Now that the Chancellor announces, with all the publicity of the Budget, that the financial position of the country is so improved that it is possible to restore these cuts, the postponement for three months is going to cause a great deal of feeling of hardship and discontent. It seems to me that the wise, the right and proper course is to let these people have the advantage with as little delay as possible. For the Minister to suggest that he is prevented from doing the right thing because of the wording of a Clause in the Unemployment Bill is really begging the question. I am perfectly satisfied that we could help him. At any rate, if 1st April is not possible, because to date back is perhaps always a difficulty, he could select an earlier date than 1st July—it might be 1st May. There is no difficulty about the wording of Acts of Parliament if the Government have the intention to do a particular thing. I, therefore, suggest to the Minister that he has to put up a better case than he has been able to do for resisting what is, I believe, the general desire of the whole House of Commons to restore to this large army of people, without further delay, the original rate, which was only reduced because of the national emergency.

4.3 p.m.

Mr. HOLDSWORTH

I want to make an appeal to the Minister to give his sincerest consideration to the request to restore the cut, at least at an earlier date than he proposes. Personally, I cannot see that it is very difficult to reckon up so many weeks at 2s. or 3s. a week more, as the case may be. It does not appear to be an insuperable difficulty, but if that is too much to do at least we could possibly talk about 1st May or 1st June. This afternoon a question was asked in the House as to what would be the cost to the Insurance Fund of reducing the contributions of the employers, the employed and the Treasury to the amounts payable before 1931. The answer, if I remember rightly, was something like £16,000,000 per year. I think we were told in the Budget statement that, apart from what would fall on the Unemployment Fund by the restoration of these cuts, that is, the cost of transitional payments, there is to be in this year approximately £4,000,000. So that if the restoration of the cuts were made from 1st April, I take it that the restoration would cost the Treasury on transitional payments something like £1,000,000 to £1,500,000. There would be no charge on the Unemployment Fund which the fund could not afford to bear, simply because we are told that already there is a reserve, which is building up at the rate of £3,000,000 a year.

To give back to the unemployed, therefore, 25 per cent. of the extra contributions imposed in 1931, does not seem to me to be in the same proportion as the Income Tax restoration, and I appeal to the Minister of Labour that the excuse of not being able to reckon so many weeks at 2s. or 3s., as the case may be, will not satisfy what, I think, is a legitimate demand. The fund can bear it; it is quite solvent. A reserve is being built up, and the only thing asked of the Chancellor in making the restoration date from the same time as the Income Tax, is a matter of from £1,000,000 to £1,500,000. I therefore, trust that, if not on this Clause, because I know the difficulty there would be between the other Act going on and this one coming in, the right hon. Gentleman will bear in mind before we come to a decision at some stage in the Finance Bill, whether this cannot be done. There is a legitimate grievance on this point, the cost is infinitesimal and it would assist the unemployed greatly. The very fact of increasing the payment shows that the Chancellor recognises the hardships under which the unemployed are suffering, and I, personally, think that there could be this restoration without any difficulty. I hope, therefore, that it will be borne in mind.

4.7 p.m.

Mr. BUCHANAN

I will not detain the Committee very long, because, like many others, I am anxious to get on with other Amendments; but I would appeal to the Minister to reconsider this matter. He has really only one answer, which is a fairly good answer from an administrative point of view. The question of whether the Income Tax people have got their reduction a day earlier or a day later does not matter. We are not now considering questions of Income Tax, but a section of very poor people, and whether the Chancellor can give them this concession a few months earlier to ease their lot. That is the issue, and not questions about Income Tax. The issue is whether the right hon. Gentleman cannot make the life of very poor people more pleasant a little earlier than would otherwise be the case. The only argument of the Minister is that it would be administratively impossible to make the date 1st April, thus antedating the concession and repaying people the amount outstanding. He says, in effect, that the difficulty of the exchanges would be insuperable. I cannot follow him in what is his only case.

The occupants of the Front Bench are becoming every day about the worst set of politicians in this country. I confess that they do certain things—things which do make a certain improvement; but when they do them, it is in the worst possible way. When restoring cuts they do it with tardiness and delay which, to the ordinary man in the street, is unbecoming, and certainly it looks as if they did not want to do it. If I were giving them any political advice—it is almost impossible to give the Prime Minister advice, because he knows everything already—but there are other ordinary human beings in the Cabinet, and from ordinary human, political considerations, they ought to do what they are now asked to do. When you are making a concession, the value of the concession is to make it at once. If you start to delay you lose a great deal of the value of your concession, and I say that, from the point of view of those supporting the Government, with any knowledge of strategy at all, they ought to bring this concession in much earlier.

The question of ante-dating to 1st April might be a little difficult, but if the Government have no greater difficulty that that, I think that with good will and a certain amount of toleration, the thing could be adjusted. Why it cannot be done from next week I cannot understand. Why cannot managers of the local Exchanges start next week and make up their forms accordingly? I can see a little difficulty in ante-dating, which is a good argument administratively, but I cannot sec why there is any difficulty about next; week, once they know that they have to do it. The Government do this thing, and they do it miserably, and appear to the world as miserable creatures. That is the long and short of it. The ordinary man, whether he believes in people on this side or anywhere else, says that if you are going to do it, let the people enjoy the concession quickly, instead of floundering about in this way. Those who have control of the Exchanges, the divisional officers and Employment Exchange managers, can do it with good will, and the Minister, in his own interest and in the interest of the unemployed, if he fixes the day for next Monday, I am sure will make ail much happier and himself much more humane.

4.13 p.m.

Mr. COVE

I have gained the impression—I hope that I am right—that the Minister of Labour has been deeply moved by the appeals which have been made to him. I have observed him very carefully, and when my hon. Friend mentioned the difficulties of administration, I noticed that he appeared to be seeking expert advice. I should imagine that if he took the Committee into his confidence, he would be able to tell us that the administrative difficulties could easily be overcome. I further observed that he had consultations with the Chancellor of the Exchequer. I trust that those consultations were as hopeful as the previous consultations he had. I am convinced that the Minister himself, if he were a free man, would now get up in his place and announce that this concession would be made. I am sure that it would meet the wishes of the whole House. I do not believe that there is a Member of this House, however interested he or she may be in any other particular section of the community, but would gladly see the restoration of this cut to the unemployed at the earliest possible moment.

It may be that the Chancellor, quite naturally, is concerned about creating a precedent as far as other restorations are concerned, but I do not believe that he need fear that. There is no section, as I say, represented in this House, and certainly no section of the cut classes outside, who would grudge for a moment the restoration of the cut, as far as it has gone in the proposals of the Chancellor, at the earliest possible moment, and I would like to join with those who have appealed to him to get rid of the idea that there would be insuperable difficulties for the administration. As a matter of fact, there would be the same difficulties, perhaps not to the same extent, on the 1st of July. These administrative difficulties will occur then. If the Government decided that the restoration of the cuts to the unemployed should take place at the earliest moment they would not only create a better feeling amongst the unemployed, but every cut section in the community would rejoice that this partial measure of justice had been done to the most unfortunate section of the community.

4.17 p.m.

Mr. GREENWOOD

To me the reply of the right hon. Gentleman seemed unconvincing. In the first place, he said that it would be difficult to make the restoration of the cuts retrospective. I admit that additional work would be thrown on the officials of the Department, but the records are there, they know perfectly well all the people who have been in receipt of benefit and are entitled to benefit since the 1st of April, and all it means is that on the 1st of July, or whenever it may be, they would get as an additional sum the amount of benefit to be added to the restored pay. My arithmetic is not very good but I think it would mean that a single man would receive on the 1st of July 22s. 9d. in respect of the 13 weeks during which he had been paid the lower scale of benefit when the House had determined that he should receive the higher. If there was sufficient good will on the other side the administrative difficulties of this problem could easily be overcome. The right hon. Gentleman is in a conciliatory mood. Let us follow up the suggestion and make it prospective instead of retrospective. Let us take the glorious 1st of May as the date at which the cuts should be restored, then the restrospective difficulty would disappear.

The second point of the right hon. Gentleman, which he thought so devastating, made no impression on my mind. It was that in October, 1931, the increase in Income Tax was retrospective as from April, whilst the cut in unemployment benefit only operated after the passage of the necessary legislation. In reply to that I say that the increase of 6d. in the Income Tax did not amount to an additional 10 per cent. levy on the incomes of Income Tax payers. A reduction of 10 per cent. in unemployment benefit meant a net 10 per cent. reduction in the receipts going into a working class home. The two cases are not on the same footing. If the Chancellor's view about graduated taxation is right, then 10 per cent. to the Income Tax payer is an entirely different thing and a much lighter burden than 10 per cent. to people who are below the Income Tax level and who are in receipt of unemployment benefit.

My real object in rising was to ask whether the Chancellor of the Exchequer is to remain silent on this Clause, which deals with the date at which the Bill is to come into operation. It refers specifically to Clause 18 dealing with Treasury advances to the Unemployment Fund. Now that the Government have got out of the haze and uncertainty in which they have been living ever since they introduced the Bill, at least they have not disclosed the dates they had in mind, and as we have now some definition as to the dates, surely the Committee is entitled to know from the Chancellor of the Exchequer what will be the financial results of specifying the definite date of the 1st of July instead of the Bill remaining as it stood. This is the third or fourth time the Chancellor of the Exchequer has been present and we should hate him to remain a silent member. We hope he will say something on the financial aspects of the Clause. The Committee at least is entitled to know his views as to the financial effects of giving this new precision to the Bill, which was not there when it was introduced.

4.22 p.m.

Mr. McENTEE

I am wondering whether the consideration which is uppermost in the mind of the Chancellor of the Exchequer is the fact that he is making a profit on the unemployed and frankly does not like to give it up until the latest possible date. He said that a reduction of 100,000 in a number of the unemployed meant a saving of something over £3,000,000 to the Exchequer. Perhaps the right hon. Gentleman, the Chancellor of the Exchequer, would be good enough to sneer less and pay a little attention to what is said. He may be an extremely able man, I am not disputing that, but it does not give him the right to sneer at anything which is being said by another Member of the Committee. I feel certain that the people who have been suffering the cuts consider that the Chancellor of the Exchequer is not generous, and if this matter were left to a free vote of the Committee the right hon. Gentleman and The Minister of Labour would find that there are Members on their own side who would desire that the cuts to the unemployed should be restored at, the earliest possible moment.

The reply is that the earliest possible time is the 1st of July. Why? I think it is because it is inconvenient to the Department and to the Minister of Labour. The Minister of Labour will not say that it is impossible to restore the cuts earlier, neither will the Chancellor of the Exchequer. Everybody knows that it is not impossible to restore the cuts, whatever the date, whether it is the 1st of April or the 1st of May. It is perfectly possible. The only question is; is it the desire of the Government to do so? I think it is the desire of the Committee, if they were allowed a free vote; but is it the desire of the Government? To that question we are entitled to have a straight reply. Nobody in their senses will assert that it is impossible to restore the cuts, if the desire is there, and I am certain that the officials of the Department would not begrudge working overtime if it was necessary in the interests of these people. It might mean a few extra men and women being taken on; they would have an opportunity for employment. That would not be a disaster. It would help the Chancellor of the Exchequer if the numbers of the unemployed were reduced by the numbers it would be necessary to take on to make out the cards and books.

I want the Chancellor of the Exchequer or the Minister of Labour to give a straight reply; do they desire to restore these cuts or not? That is the whole question. If they do, then let them say so; and if it cannot be done then they should give us some reason, and not treat members of the Committee as though they were children, as though they were so simple that they can be put off with the story that it is impossible to restore the cuts earlier than the 1st of July. Members are not so simple, and people outside the House are not so simple. Nobody with an elementary education would believe the Chancellor of the Exchequer or the Minister if he says that it is impossible. In that case why not tell the country the real reason? It may be the matter of the £3,000,000. The Chancellor of the Exchequer, like everybody else, is anxious to hold on to any money he can get for the purposes of the future, and the amount for three months would mean 25 per cent. of the £3,000,000. That is a consideration for the Chancellor of the Exchequer. I appeal to the Minister to grant some concession to these men and women who are starving. A continuation of that state even for one week makes a big difference, and for one month a much greater difference. For two or three months it may mean life or death. Therefore, I hope that he will make a more satisfactory statement than the one he has made.

4.28 p.m.

Mr. PALING

In 1931 this country was supposed to be in a financial crisis and immediately it was discovered the Government took steps to put into operation the cuts and an increase in Income Tax in order to overcome the situation. These steps were taken as speedily as possible; the cuts were put into operation as early as possible. It was understood that when the financial crisis ended the cuts would be restored and the sacrifices no longer continued. According to the Chancellor of the Exchequer the financial crisis ended in March of this year, and he now finds the financial position of the country such as to allow him to modify some of the impositions put on in 1931. If that was the financial state of the country on the 1st of April, where on earth is the reason why the unemployed, who are the least able to bear the imposition, should have to suffer for three months longer than the financial state of the country warrants. I wish the Minister would look at it from that point of view.

The Minister of Labour says that it is all very well for us to stress the fact that the unemployed have to go on to till July, although the Income Tax payers get their 6d. from the beginning of April, and he adds that the imposition of the Income Tax in 1931 dated from the beginning of April, and that the Income Tax people have endured that imposition longer than the unemployed endure the cut in benefit. That is true. But surely that is not the measure by which we should judge this business. Although the Income Tax payers may have had the imposition longer than the unemployed have had the cut, the fact remains that the Income Tax payers could stand it and that the imposition of the extra 6d. for three months longer than the imposition of the cuts on the unemployed did not make a single pennyworth of difference to their standard of living, did not mean that they went short of a single meal, and I doubt whether they paid 6d. less for any meal that they have had in this House. But with the unemployed it was quite a different proposition.

Everyone knows that the position of the unemployed is such, and their standard of life so low, that their physical health is suffering. We have had statements from the Secretary for War and the First Lord of the Admiralty about the appalling number of men who have been rejected for physical reasons when they wished to join the Army or the Navy, and we are hearing almost every day statements of medical officers of health up and down the country that the health of the children is declining, mainly in families where unemployment is rife. If the health of the people, adults and children, is declining because of lack of means, surely it is important to restore those means as soon as possible. Why should these people, who, in many cases, have not enough food to consume, have to wait until the beginning of July when the money is there to be given them if the will to give it were there also? It may be a little difficult to go back to April, but it could be done if the Government wished to do it. Even if there were an insuperable difficulty about going back to April, it would not be nearly so bad if the Government went back to the beginning of May. We would rather go back to April, but would take May rather than nothing. That would still give the unemployed two months' extra money, and I am sure the Minister of Labour would find no difficulty in putting the proposal into operation.

4.34 p.m.

Mr. CHAMBERLAIN

The right hon. Member for Wakefield (Mr. Greenwood) has expressed the distress of mind that he feels at seeing the Chancellor of the Exchequer sitting upon the Front Bench and not taking part in the discussion. I would like to relieve him from his inconvenience. Also, of course, I was asked a specific question by an hon. Friend behind me. There seems to be some misapprehension on the benches opposite as to what the effect of this new Clause really is. The right hon. Member for Wakefield repeatedly asked me to make a statement as to how the finance would be affected by the operation of the particular Clause. It does not affect the finance in any way, except of course, that it makes provision that transitional payments which otherwise would expire on 30th June will go on until other arrangements take their place.

Mr. GREENWOOD

The Clause operates in July.

Mr. CHAMBERLAIN

But if Part I has not come into operation on 1st July, then this provides for a continuance of the present payment of transitional payments.

Mr. GREENWOOD

How about Clause 18 of the Bill, and the question of coming into operation of those payments?

Mr. CHAMBERLAIN

I shall come to that point in a minute. First let me deal with what was said by the hon. Member for West Walthamstow (Mr. McEntee). He seemed to be annoyed because I was surprised at his statement that every 100,000 reduction in the number of unemployed means £3,000,000 in the pockets of the Chancellor of the Exchequer. The hon. Member said that the Chancellor of the Exchequer was making a profit out of the unemployed, and said that I wanted to hold on to the money as long as I could. He said twice that every time there was a reduction of 100,000 in the number of the unemployed it meant £3,000,000 for the Chancellor of the Exchequer. If that really be the impression of the hon. Member surely it must be unique, because I think that everyone else in the Committee knows that it is the fund which benefits by the £3,000,000 and not the Chancellor of the Exchequer.

Mr. BATEY

Would the Chancellor not benefit because of the transitional payments?

Mr. CHAMBERLAIN

The hon. Member for West Walthamstow was not talking about transitional payments. He was accusing me of making a profit out of the unemployed by trying to hold on to £3,000,000, which he said would come to me by a reduction of 100,000 in the number of unemployed. Hon. Members are so evasive. The right hon. Member for Wakefield accused us of injustice because he said we were treating the Income Tax payers better than the unemployed. When he was answered by my right hon. Friend the Minister of Labour, who pointed out that the Income Tax payers began to pay the higher tax sooner than the unemployed received their cuts, hon. Members turned round and said that that was not the point at all, that the position of the unemployed was much harder than that of the Income Tax people. Hon. Members opposite can argue it one way or the other, but they cannot argue it both ways at the same time. If the right hon. Gentleman wants to press the point about injustice he must meet the point of my right hon. Friend the Minister of Labour.

Let me turn to the question which was put to me by my hon. Friend the Member for Stirling (Mr. J. Reid), who wanted to know about the repayment of the debt on the Unemployment Insurance Fund. He inquired whether we were going to repay the debt and thereby to cut into the surplus which might be available to the Statutory Committee when it comes into existence. The answer is quite simple and plain. We have to go on repaying, or paying interest, until the 1st July. There will be some small repayments, I understand, in May, but as it happens there is nothing due in June. There will be no payment in June, and after 1st July there will be no more repayments except those provided under Clause 18.

Question, "That the Clause be read a Second time," put, and agreed to.

4.40 p.m.

Mr. BATEY

If I move to leave out paragraph (b) of the new Clause, would it be in order?

The DEPUTY-CHAIRMAN

The hon. Member would not be out of order in moving that Amendment, but I ought to point out that the only effect of the Amendment would be to postpone the date on which the increase of pay would go to the unemployed.

Mr. BATEY

Every Member of the Committee would like to be able to debate the point if possible. It is all very well for the Chancellor of the Exchequer and the Minister of Labour to put us in a difficulty. They are entitled to laugh up their sleeves because they have linked the restoration of the cuts with the coming into force of this Bill. Some of us want to put off the coming into force of the Bill as long as possible, but on the other hand we want the restoration of cuts as quickly as we can get it.

The DEPUTY-CHAIRMAN

Perhaps I did not make myself clear. If an Amendment to delete paragraph (b) were carried, it would have the effect of postponing the restoration of the cuts until the Bill comes into operation.

Mr. BATEY

The matter is so important that even at the risk of being misunderstood I would like to move to delete paragraph (b) in order to have a Debate.

The DEPUTY-CHAIRMAN

I am afraid that the exact point which the hon. Member wishes to debate is the one which would not be in order if the Amendment were moved. The effect of the Amendment, as I have said, would be to postpone the restoration of the cuts until after 1st July. As that would be the effect, I could not allow hon. Members to argue that the cuts should be restored before 1st July. In other words, I could not allow them to debate the exact contrary of what the Amendment would bring about.

Mr. LAWSON

Would not that Amendment also postpone the effect of Clause 18 of the Bill and give the Committee an opportunity of debating the matter?

The DEPUTY-CHAIRMAN

It would undoubtedly have that effect. The effect of leaving out paragraph (b) would be to postpone any possible payment until a much later date than 1st July, even to the Greek Kalends, as he himself desires with regard to the other provisions of the Bill.

Mr. BATEY

Would it be possible to alter 1st July to 1st May? Would an Amendment to that effect be in order?

The DEPUTY CHAIRMAN

An Amendment in line 1 of the new Clause to substitute "May" for "July" would be in order.

4.44 p.m.

Mr. BATEY

I beg to move, as an Amendment to the proposed Clause, in line 1, to leave out "July" and to insert "May."

What we want is a restoration of the cuts as early as possible. We can see no justification for postponing the restoration until 1st July. In his Budget statement the Chancellor of the Exchequer gave much prominence to the fact that the cuts were to be restored. That statement was received with pleasure. If there was any regret about it, the regret was that the restoration was not to take place until 1st July. I see no reason why the restoration should have been linked with this Bill. I consider that the cuts could have been dealt with in a one-Clause Bill, put through this House in one day. This Bill has no more relation to restoration of the cuts than the Budget had. We have been told that the fund is making a profit of £16,000,000 a year. The cost of a full year's restoration of the cuts is only £4,000,000. To say that the restoration shall not start until 1st July means that, although there was a balance in the fund in the year ending 31st March, the restoration of the cuts will only apply to nine months of the next financial year. There can be no justification for such a proposal when the surplus on the fund amounts in a full year to £16,000,000.

This is a matter of urgency to the unemployed. I can well understand that the Chancellor of the Exchequer is not anxious even to have the restoration taking effect as from 1st May. I can understand that he would prefer 1st July. It is not only a question of the restoration of the outs to those on the Unemployment Fund, but the restoration of the cuts in transitional payments, and the longer it is put off the better for the Chancellor of the Exchequer. In my opinion, however, as the fund is making such a big balance we ought to leave the transitional payments out of the picture for the moment and concentrate our attention upon the fund. Having regard to the position of the fund, we say that the restoration of these cuts should not be put off a moment longer than is necessary.

4.46 p.m.

Mr. LAWSON

I am glad that my hon. Friend the Member for Spennymoor (Mr. Batey) has taken the course which he has taken. I intended to say something about the answer of the Chancellor of the Exchequer on this new Clause generally. I ask the Committee to note that what we are being asked to do here by the new Clause is, practically, to give our assent to Clause 18 of the Bill dealing with the question of the debt. That Clause has never been discussed in the ordinary way. One of the great grievances in connection with the Committee stage of the Bill is that there has been no proper discussion of the principle of whether the debt should be charged to the fund, whether the instalments of £2,750,000 half yearly should be paid as laid down in the Clause or whether on the recommendation of the Unemployment Insurance Statutory Committee further moneys should be payable out of the fund towards the discharge of these liabilities in addition to the instalments already mentioned. The Chancellor of the Exchequer has not dealt with the point of whether this debt should be charged on the fund or not.

Sir H. BETTERTON

Is the Amendment of the hon. Member for Spenny-moor (Mr. Batey) to substitute 1st May for 1st July in paragraph (b) of the proposed new Clause?

The DEPUTY-CHAIRMAN

No. The hon. Member is moving his Amendment in line 1 of the proposed new Clause. That would obviously be an introductory Amendment and, if carried, it would require consequential Amendments to be made later in the Clause.

Mr. CHAMBERLAIN

May we know exactly what the Amendment is?

The DEPUTY-CHAIRMAN

It is to leave out the word "July" in line 1 of the Clause, and to insert the word "May." If the Amendment were carried the first line of the proposed new Clause would read as follows: If this Part of this Act is not in operation on the first day of May, nineteen hundred and thirty-four, the following provisions shall have effect. In that case, consequential Amendments would be required in paragraphs (a) and (b) in order to bring the other dates into conformity with the Amendment.

Mr. LAWSON

That is material to the point which I was raising. If the Committee will give their attention to this question of the debt and the interest thereon, as I am sure the Chancellor of the Exchequer has done, I think they will find that the fund could be made solvent much sooner than seems to be assumed in these proposals and that it should be easily possible to do not only what the hon. Member for Spennymoor wants, but much more. The question is, if we want to have the fund solvent ought we to charge it at the outset with this great debt of £115,000,000? There is a strong opinion which is not confined to the Labour party that if the fund is to have a chance of solvency it ought not to be loaded with that debt and there are strong arguments for that view. In the main, the people who are on the fund or who will come on to the fund are not those who are responsible for incurring that debt.

The DEPUTY-CHAIRMAN

I am afraid that we cannot discuss the merits of Clause 18 upon this Amendment. The Amendment only relates to the point of whether the Clause should come into operation on 1st July or on some earlier date.

Mr. LAWSON

I would point out that paragraph (b) of the proposed new Clause contains the words: section eighteen of this Act shall come into operation on the said first day of July, My hon. Friend the Member for Spennymoor wants to make the date 1st May. What I am arguing is that the finances of the fund largely depend upon this debt, upon the interest that has to be paid and the other payments which are set forth in Clause 18. My point is that if the fund were relieved of this debt then it would be possible to—

The DEPUTY-CHAIRMAN

That is just what the hon. Member cannot argue. He would be entitled to argue that the effect of changing the date would be, let us say, to reduce the amount of redemption which is at present going on, or to ask what would be the financial effect of doing so, but he must not argue as to the effect of an amended Clause 18.

Lord EUSTACE PERCY

Is it not the case that the burden which the fund will have to bear if the Act comes into force is heavier than that which it is now bearing; and therefore the effect of the Amendment would be to date back for two months the imposition of a heavier charge on the fund?

The DEPUTY-CHAIRMAN

The Noble Lord may be correct as to that. All I am saying is that we must deal with Clause 18 as it is printed in the Bill and not as it might be amended.

Mr. LAWSON

If I am not in a position to debate the broad aspect of the debt and the interest thereon, and I think that is the general effect of your Ruling, Captain Bourne, I content myself with the statement that if the fund were not charged with the debt and with these interest payments, it would be an easy matter to date back the restoration of these cuts to 1st May in the manner suggested by the Amendment. Apart from that, I do not think that the Chancellor of the Exchequer met the point which I have made on previous occasions as to treating these payments retrospectively. He has never yet told us on what the date 1st July was based, or on what the finance of his proposal was based.

Mr. CHAMBERLAIN

I really do not understand what the hon. Member means.

Mr. LAWSON

Is the restoration as from 1st July based upon the fact that the figures are going to remain at the same point or not? Is the proposal based upon an increasing improvement in the figures or on what is it based? I suggest that both on that point and on the question of Clause 18 the right hon. Gentleman has not given us a full answer. The Committee ought to insist upon a proper discussion of Clause 18. We have not had such a discussion yet and it appears to me that we are going to be somewhat limited in to-day's discussion but I think the Chancellor of the Exchequer ought to find the time and opportunity to give us a fuller answer on these points than he has done.

4.55 p.m.

Mr. TINKER

The object of the Amendment is to ascertain whether the Committee are in favour of restoring the cuts a little earlier than the date mentioned in the financial statement. If we accept the proposed new Clause without a protest it means that we shall be debarred later on from raising the point which we desire to ventilate. We are anxious that the Committee should realise the plight of the unemployed owing to the deprivation of this 10 per cent. in their benefit and we urge that the restoration should be two months earlier than the Government propose. The Chancellor of the Exchequer estimated the cost to the Treasury of the restoration at £3,600,000 and one-fifth of that would be round about £800,000. That would be the cost of doing justice to-these people. The financial statement of the Chancellor of the Exchequer may be accepted by the country as irrevocable and of course if the House of Commons agrees with the financial statement nothing can be done to alter it, but the House of Commons has the right to discuss the financial statement and if the House feels that the restoration of the outs should take place at an earlier date the House has the right to say so.

I was surprised to hear the Minister of Labour use the argument that those who were being relieved of 6d. in the Income Tax were people who had suffered equally with the unemployed. Nobody who pays Income Tax can be said to be suffering like the unemployed. That the 6d. relief in the Income Tax should be made about the same time as the restoration of the cuts, because the additional tax was imposed about the same time as the cut, is no argument at all to an unemployed man or woman. I hope that on this question we shall get an expression of opinion in favour of our proposal not merely from this side of the Committee but also from hon. Members opposite. The agitation in regard to the childrens' allowances had some effect on the Government and caused them to shift their ground. I hope that that fact will not be lost on hon. Members opposite and that some of them at any rate will help us in this matter of an earlier restoration of the cuts. If they refuse to do so it will show that there is no real feeling on the other side in favour of the proposals of this kind.

4.57 p.m.

Mr. HOLDSWORTH

I understand that this Amendment has been moved primarily for the object of raising a Debate on this question as to the restoration of the cuts. But I wish to ask the Minister of Labour whether, supposing this Amendment were carried, the effect would not be to enable the Treasury to take any surplus which might accrue, in order to pay off the debt on the Unemployment Fund two months earlier than they would otherwise have power to do. We do not want that result.

4.58 p.m.

Mr. ANEURIN BEVAN

I do not know what other Members of the Committee feel about it but I am not anxious that we should discuss Clause 18 at this stage. I am mindful of the promise that was given—or at least if a promise was not actually given a broad hint was given by the Prime Minister in response to pressure from hon. Members—that Clause 18 would be recommitted in order that we should have a chance of debating its merits. I do not say that the right hon. Gentleman promised it but I think hon. Members in all parts of the Committee share the impression that the Government are under an obligation to allow us an opportunity of discussing Clause 18. I think if we do not get such an opportunity there will be a general impression both in the Committee and in the country as a whole that the Government have evaded their obligations in the matter. I am not anxious to discuss the question of Clause 18, because it cuts into a Debate that I hope we shall have at a later stage, but I would like to ask whether the argument of the Minister against the last Amendment is not now of no force against this Amendment. I understood him to say then that it was highly inconvenient for the 1st May to be put in instead of the 1st July, but I think it is much less inconvenient in this case.

I want to urge on the Government, however, that it is not right for the Chancellor of the Exchequer to say that bringing forward this date will have no effect on the funds at his disposal. I admit that he would save no money at all with respect to the accumulation of reserves in the Unemployment Insurance Fund, but he would certainly benefit by an alteration in the maximum scales of transitional payment. I understood him to say in his Budget speech that if the scales of benefit were adjusted in accordance with the restoration of the cuts, that would have the effect of raising the maximum rates of transitional payment, which would necessarily mean that he would have to find additional money earlier. That is precisely one of the main reasons why I want this date brought forward.

If hon. Members will think of the situation, I will not say in Durham, because there the Government themselves have brought about larger reductions in benefit than exist in other parts of the country, but in Glamorganshire and South Wales, they will see that owing, first, to the universal poverty and, secondly, to a humane local government administration, very large percentages—somewhere between 90 and 94 per cent.—of those unemployed and on transitional payment are receiving the maximum transitional payment. Consequently, the assumption arises, although it is not true in every case, that if the restoration was brought forward by two months, all the unemployed people now on transitional payment, in addition to those on insurance benefit, would have an immediate rise in their unemployment insurance payment. That would have a highly beneficial effect on those distressed areas, because practically all the unemployed would have an increase in their benefit.

I would like to point out that the Chancellor of the Exchequer has omitted to deal with the point that he has been handling a surplus of £31,000,000, is already a year behind in the restoration of the cuts, and has allowed the money to flow into the Sinking Fund, but if hon. Members opposite are indeed anxious to assist the distressed areas, if they are sincere in their desire to see to the better nourishment of the children in South Wales, in Lanarkshire, and in Durham, they will vote for the Amendment, because this Amendment will give the higher rates of benefit in those distressed areas two months earlier. I would like to hear from the supporters of the Government—some of those, for example, who went into the Lobby to vote for the 3s. instead of the 9s. for the children—what justification they have for voting against this Amendment, because although it would not increase the children's allowance, it would put the father and the mother in possession of 2s. 9d. for two months longer, and the child would thereby benefit. I would therefore ask them to tell us why they disapprove of this Amendment and yet considered it necessary to raise the children's allowance from 2s. to 3s. I need hardly say that if we could secure this addition for two months, it would have not only a great effect upon the income going into the homes of people in my constituency and in many of the industrial districts, but it would at the same time have the effect of giving those people much greater encouragement.

There is one further point. If we bring the date of the restoration of the cuts forward in this way, those who are on transitional payment will indeed be able to enjoy the maximum increase longer, because when the Bill comes into operation the maximum is going to be destroyed, and when the maximum is destroyed those who are on transitional payment at the time will to a large extent lose the restoration. In the course of his Budget speech, the Chancellor of the Exchequer made the perfectly legitimate point that those who are on maximum transitional payment would receive an immediate benefit in the restoration of the 10 per cent. because the maximum payment would be increased. Indeed, I think he used the figure of something like £3,600,000 in a full year as the cost to the Exchequer of that restoration.

Mr. CHAMBERLAIN

Not in a full year, but in the current year. It would be a good deal more than that in a full year.

Mr. BEVAN

I beg the right hon. Gentleman's pardon. It was £3,600,000 in the current year. He was, I gather, unable to estimate it accurately, as it is not yet known who will benefit by the restoration of the cuts, because all who are on the maximum transitional payment will not necessarily, as the law remains now, secure the full 10 per cent. if that 10 per cent. raises their maximum transitional payment above the assessment of need.

Mr. BUCHANAN

What is that? I do not want to interrupt the hon. Member, but take the case of a person now receiving the maximum amount of 15s. 3d. or the case of a married couple with two children now receiving 27s. 3d. Am I to understand from the hon. Gentleman's argument that that ordinary, simple case will not automatically get the increase of benefit granted right away? The public assistance committee has already decreed that they need the full amount of unemployment benefit, and that committee, therefore, can have no alternative but to say that these people need the full unemployment benefit still; in other words, the benefit has been raised to that amount, and the public assistance committee cannot come along and say to a man who is now getting 15s. 3d., "You will still receive 15s. 3d., although your scale may now be 17s."

Mr. BEVAN

It is precisely because I want that point cleared up that I am raising it, and while the hon. Member and I are entirely at one in the matter, the difficulty is that that agreement is not shared with the Chancellor of the Exchequer, and it is because I am anxious that the Chancellor of the Exchequer shall make the matter clear that I am raising it. Let me put it from another angle. The local public assistance authority has the obligation under the law to assess the amount of transitional payment to be paid. It decides that the maximum amount of 15s. 3d. a week for a man and 2s. for a child is necessary, but supposing the 10 per cent. is put on, and it raises the amount to 17s., may not the public assistance committee say that that applicant will not receive the full amount of 17s.?

The DEPUTY-CHAIRMAN

I think the point that the hon. Member is now raising will arise on the next Clause—that is to say, he is dealing with the effect of the increase.

Mr. BEVAN

I am very anxious to follow up the point made by the Chancellor of the Exchequer in his last speech, and I am trying to argue that this must be brought forward immediately, because if the maximum is destroyed under the Unemployment Insurance Bill when it comes into operation, the advantage of raising the maximum to those on transitional payment will be thereby lost. If it is admitted that all who are now on the maximum will have their maximum raised to the new maximum under these provisions, the Chancellor of the Exchequer should be able to tell us the exact sum that it will cost him, because it is known how many are at present on the maximum transitional payment.

Mr. HOLDSWORTH

The numbers may alter.

Mr. BEVAN

Yes, but the numbers of those at present in receipt of unemployment insurance benefit are known now, and if they are the same at the beginning of July, the Chancellor can tell us what it will cost, and he need not leave it to a Supplementary Estimate later on. Why cannot the right hon. Gentleman tell us? Because, in point of fact, he knows very well that automatically all those on the maximum may not be raised to the new maximum; in other words, the Chancellor of the Exchequer is cheating the Committee and the country into the belief that he is automatically raising all those on the maximum—

The DEPUTY-CHAIRMAN

I have been listening to the hon. Member very carefully. He is entitled to ask the Chancellor of the Exchequer what it would cost to bring forward the date by two months, but his argument is now directed to the proposals in the next Clause, and it should be raised then.

Mr. BEVAN

I will not extend the argument now, in deference to your wishes, Captain Bourne. Indeed, I will attempt to bring the matter up on the next Clause, because I am very anxious to secure the reply of the Chancellor of the Exchequer on that point. I would only like to point out that if we are able to secure the concession that we are now demanding, and if in fact the new maxima are to be increased, it will be to our benefit to have them as early as possible, because, when the new Bill comes into operation and the maxima are destroyed, they will then cease to bear the 10 per cent., and most of the people in our district will have a reduction in their standards of benefit.

5.16 p.m.

Mr. BUCHANAN

I want to put forward one point which should have some weight. The arguments have centred round the question of administration as to whether the date can or cannot be put forward. I take it that the Minister of Labour, and possibly the Chancellor of the Exchequer, will agree that the cost is not keeping the Government from accepting the Amendment. If that be so, it becomes a question of administration. I would like to describe what happens in some parts of the country, for example, on the North-East Coast. Whole factories are shut down for the holidays for a given period of 10 days or a fortnight. For that period all persons come on to the maximum scale of transitional payment. That is to say, during that time, when nobody is working, the great bulk of the insurable population who are unemployed, and who may for the rest of the year never be on the full scale, automatically come on to the full scale. That is the practice on the North-East Coast, where, during what is known as race week at Newcastle, the works are shut down and the unemployed man on transitional payment comes on to the full scale, although during the rest of the year he may not toe on that scale. In Glasgow this holiday period comes a week after the Bill comes into operation. Glasgow, therefore, will get the benefit of the new Measure, whereas Newcastle will not. Consequently, Newcastle, which is analogous to Glasgow in interests and type of population, will be barred from this benefit at the one time of the year when it is of incalculable value to the people whom it concerns; for at that time great numbers come on for transitional payment who do not come on at any other time of the year, and they will be de barred from receiving the extra shilling or two.

It is therefore important that the date should be early, so that the Bill will come into operation before the holiday period. I would ask the Minister of Labour to consider again the administrative difficulties. I do not think they are insuperable if he is agreed that the cost does not stand in the way. The Opposition have been very reasonable in not insisting on the 1st April and in suggesting the 1st May instead. I remember shortly after the War, when things were much more difficult and when the Minister of Labour had not the machinery at his disposal that he now has, a similar change was made in a much shorter time and without any difficulty. I suggest, therefore, that the Minister should make an attempt to bring about this change at an earlier date. Let Ministers try for once to forget that they are politicians, to think in terms which will do credit to themselves and to do the thing decently. Let them not be always missing the tide and the boat in everything that they do. Let them do the thing now. I cannot see any administrative difficulties, and I am certain that none of the officials see them. I think the Minister might at least announce that he will give way on this point and restore the cuts on 1st May.

5.22 p.m.

Sir P. HARRIS

We are on a very narrow point. There is no particular magic in the 1st July; we might be discussing the 1st August or any other date. The only reason we are discussing 1st July is that the original intention of the Government was that this Bill was to be passed by that date. We are suggesting that a better date from every point of view is 1st May. I agree that the 1st April presents considerable difficulties in administration when you are dealing with a large army of unemployed persons, because many of them will have returned to employment by the time the Bill comes into operation. I think the Minister could admit that no particular importance is attached by his Department to the 1st July. That being the case, we are justified in proposing a substitute date. The earlier date would be more satisfactory to everybody concerned, and would more represent the desire of the Committee, in view of the pledges given to the unemployed that the cuts would be restored at the earliest practical date. It is as well to remind the Committee that the proposed new Clause is a machinery Clause and does not raise any question of principle, but we are forced to discuss the date now on this new Clause, because, if we did not, we should not be able to Debate it on the following proposed new Clause. I hope that the Minister will make a concession and accept the earlier date. We could then go on to discuss the large number oil new Clauses. If we do not get a decision on this Clause now, we shall be prevented, owing to the Guillotine, from having discussions on the others.

5.24 p.m.

Sir H. BETTERTON

It really is impossible to substitute 1st May for the 1st July and to pay the benefit at the increased rate from the 1st May without a new Bill. I say that for this reason. The benefits are payable under the Bill as from the 1st July. The only way to pay them, if the date were the 1st May, would be to make them retrospective That would neither answer the purpose which hon. Members have in mind, nor would it be administratively possible. There are not the same people unemployed on the 1st April and on the 1st July. A man who may be unemployed to-day may be employed for the whole of the rest of the time. There may be others, like those mentioned by the hon. Member for Gorbals (Mr. Buchanan), who, owing to local circumstances, are on benefit for a fixed time. It would be neither fair nor right nor possible to put the date back and to make payments retrospectively. The numbers with which we deal are not the same, nor are the individuals the same; they vary from week to week and from month to month. Therefore, in order to get what hon. Members want we should have to have a new Bill, because we cannot put the rest of this Bill into operation on the 1st May, as many of the 60 or 60 Clauses are not susceptible to being brought into operation on that date. It is not a question of cost, but a question of the impossibility of doing what is asked.

Question put, "That the word 'July' stand part of the Clause."

The Committee divided: Ayes, 262; Noes, 52.

Division No. 200.]	AYES	[5.39 p.m.
Acland-Troyte, Lieut-Colonel	Bowyer, Capt. Sir George E. W.	Cazalet, Capt. V. A. (Chippenham)
Agnew, Lieut.-Com. P. G.	Boyd-Carpenter, Sir Archibald	Chamberlain, Rt. Hon. N. (Edgbaston)
Albery, Irving James	Braithwaite, J. G. (Hillsborough)	Chapman, Sir Samuel (Edinburgh, S.)
Anstruther-Gray, W. J.	Broadbent, Colonel John	Clarke, Frank
Apsley, Lord	Brocklebank, C. E. R.	Cobb, Sir Cyril
Astor, Maj. Hn. John J. (Kent, Dover)	Brown, Col. D. C. (N'th'l'd., Hexham)	Cochrane, Commander Hon. A. D.
Atholl, Duchess of	Brown, Brig.-Gen.H.C.(Berkt.,Newb'y)	Colville, Lieut.-Colonel J.
Baldwin, Rt. Hon. Stanley	Buchan, John	Conant, R. J. E.
Balfour, Capt. Harold (I. of Thanet)	Buchan-Hepburn, P. G. T.	Cooke, Douglas
Barclay-Harvey, C. M.	Bullock, Captain Malcolm	Cooper, A. Duff
Barrio, Sir Charles Coupar	Burgin, Dr. Edward Leslie	Craddock, Sir Reginald Henry
Beauchamp, Sir Brograve Campbell	Burnett, John George	Cranborne, Viscount
Beaumont, Hon. R.E.B. (Portsm'th,C.)	Butt, Sir Alfred	Croft, Brigadier-General Sir H.
Belt, Sir Alfred L.	Cadogan, Hon. Edward	Crookshank, Col. C.de Windt (Bootle)
Bernays, Robert	Campbell, Sir Edward Taswell (Brmiy)	Crookshank, Capt. H. C. (Gainsb'ro)
Betterton, Rt. Hon. Sir Henry B.	Campbell-Johnston, Malcolm	Cross, R. H.
Blindell, James	Caporn, Arthur Cecil	Crossley, A. C.
Borodale, Viscount	Castlereagh, Viscount	Culverwell, Cyril Tom
Bossom, A. C.	Cayzer, Sir Charles (Chester, City)	Davidson, Rt. Hon. J. C. C.
Bowater, Col. Sir T. Vansittart	Cayzer, Maj. Sir H. R. (prtsmth., S.)	Davies, Maj. Geo. F. (Somerset, Yeovil)
Bower, Lieut.-Com. Robert Tatton	Cazalet, Thelma (Islington, E.)	Davison, Sir William Henry
Dawson, Sir Philip	Law Sir Alfred	Russell, Hamer Field (Sheffield,B'tslde)
Denman, Hon. R. D.	Leckle, J. A.	Rutherford, John (Edmonton)
Draws, Cedric	Leighton, Major B. E. P.	Rutherford, Sir John Hugo (Liverp'l)
Duckworth, George A. V.	Lewis, Oswald	Salmon, Sir Isldore
Duggan, Hubert John	Lindsay, Noel Ker	Salt, Edward W.
Duncan, James A. L. (Kensington, N.)	Lloyd, Geoffrey	Samuel, Sir Arthur Michael (F'nham)
Dunglass, Lord	Locker-Lampson, Rt. Hn. G.(Wd.Gr'n)	Sandeman, Sir A. N. Stewart
Ellis, Sir R. Geoffrey	Loder, Captain J. de Vere	Savery, Samuel Servington
Elliston, Captain George Sampson	Lovat-Fraser, James Alexander	Scone, Lord
Emmott, Charles E. G. C.	Lyons, Abraham Montagu	Selley, Harry R.
Emrys-Evans, P. V.	MacAndrew, Lieut.-Col. C. G.(Partick)	Shaw, Helen B. (Lanark, Bothwell)
Entwistle, Cyril Fullard	MacAndrew, Capt. J. O. (Ayr)	Simmonds, Oliver Edwin
Erskine-Belst, Capt. C. C. (Blackpool)	McCorquodale, M. S.	Simon, Rt. Hon. Sir John
Evans, Capt. Arthur (Cardiff, S.)	MacDonald, Rt. Hon. J. R. (Seaham)	Smiles, Lieut.-Col. Sir Walter D.
Everard, W. Lindsay	Maclay, Hon. Joseph Paton	Smithers, Waldron
Fermoy, Lord	McLean, Major Sir Alan	Somerset, Thomas
Flint, Abraham John	Macquisten, Frederick Alexander	Somervell, Sir Donald
Ford, Sir Patrick J.	Maitland, Adam	Soper, Richard
Fox, Sir Gifford	Manningham-Buller, Lt.-Col. Sir M.	Southby, Commander Archibald R. J.
Fraser, Captain Ian	Margesson, Capt. Rt. Hon. H. D. R.	Spears, Brigadier-General Edward L.
Fremantle, Sir Francis	Martin, Thomas B.	Spender-Clay, Rt. Hon. Herbert H.
Fuller, Captain A. G.	Mason, Col. Glyn K. (Croydon, N.)	Spens, William Patrick
Galbraith, James Francis Wallace	Mayhew, Lieut. Colonel John	Stanley, Rt. Hon. Lord (Fylde)
Ganzonl, Sir John	Meller, Sir Richard James	Stanley, Hon. O. F. G. (Westmorland)
Gault, Lieut.-Col. A. Hamilton	Mills, Sir Frederick (Leyton, E.)	Stevenson, James
Gillett, Sir George Masterman	Mills, Major J. D. (New Forest)	Stewart, J. H. (Flfe, E.)
Gilmour, Lt.-Col. Rt. Hon. Sir John	Monsell, Rt. Hon. Sir B. Eyres	Storey, Samuel
Glossop, C. W. H.	Moreing, Adrian C.	Strauss, Edward A.
Gluckstein, Louis Halle	Morris, Owen Temple (Cardiff, E.)	Strickland, Captain W. F.
Glyn, Major Sir Ralph G. C.	Morris-Jones, Dr. J. H. (Denbigh)	Sueter, Rear-Admiral Sir Murray F.
Goodman, Colonel Albert W.	Morrison, William Shephard	Summersby, Charles H.
Gower, Sir Robert	Muirhead, Lieut.-Colonel A. J.	Sutcliffe, Harold
Granville, Edgar	Munro, Patrick	Tate, Mavis Constance
Grattan-Doyle, Sir Nicholas	Nation, Brigadier-General J. J. H.	Thomas, Rt. Hon. J. H, (Derby)
Greene, William P. C	Nicholson, Godfrey (Morpeth)	Thompson, Sir Luke
Grigg, Sir Edward	Nicholson, Rt. Hn. W. G. (Peters'fld)	Thomson, Sir Frederick Charles
Grimston, R. V.	Nunn, William	Thorp, Linton Theodore
Gunston, Captain D. W.	Ormsby-Gore, Rt. Hon. William G. A.	Todd, A. L. S. (Kingswinford)
Guy, J. C. Morrison	Patrick, Colin M.	Touche, Gordon Cosmo
Hacking, Rt. Hon. Douglas H.	Peake, Captain Osbert	Tree, Ronald
Hales, Harold K.	Peat, Charles U.	Tryon, Rt. Hon. George Clement
Hamilton, Sir Georgs (Ilford)	Penny, Sir George	Tufnell, Lieut.-Commander R. L.
Hannon, Patrick Joseph Henry	Percy, Lord Eustace	Turton, Robert Hugh
Hartland, George A.	Perkins, Walter R. D.	Ward, Lt.-Col. Sir A. L. (Hull)
Harvey, Major S. E. (Devon, Totnes)	Petherick, M.	Ward, Sarah Adelaide (Cannock)
Haslam, Henry (Horncastle)	Peto, Geoffrey K.(Wverh'pt'n, Bllst'n)	Wardlaw-Milne, Sir John S.
Haslam, Sir John (Bolton)	Pike, Cecil F.	Warrender, Sir Victor A. G.
Headlam, Lieut.-Col. Cuthbert M.	Powell, Lieut.-Col. Evelyn G. H.	Waterhouse, Captain Charles
Hellgers, Captain F. F. A.	Pownall, Sir Assheton	Watt, Captain George Steven H.
Henderson, Sir Vivian L. (Chelmsford)	Procter, Major Henry Adam	Wayland, Sir William A.
Heneage, Lieut.-Colonel Arthur P.	Raikes, Henry V. A. M.	Wedderburn, Henry James Scrymgeour-
Hills, Major Rt. Hon. John Waller	Ramsay, Capt. A. H. M. (Midlothian)	Weymouth, Viscount
Horne, Rt. Hon. Sir Robert S.	Ramsay, T. B. W. (Western Isles)	Whyte, Jardlne Bell
Horsbrugh, Florence	Ramsbotham, Herwald	Williams, Herbert G. (Croydon, S.)
Howard, Tom Forrest	Reid, David D. (County Down)	Willoughby de Eresby, Lord
Howitt, Dr. Alfred S.	Reld, James S. C. (Stirling)	Wilson, Lt.-Col. Sir Arnold (Hertf'd)
Hudson, Robert Spear (Southport)	Reid, William Allan (Derby)	Wilson, Clyde T. (West Toxteth)
Hume, Sir George Hopwood	Remer, John R.	Wilson, G. H. A. (Cambridge U.)
Hunter-Weston, Lt.-Gen. Sir Aylmer	Rhys, Hon. Charles Arthur U.	Windsor-Clive, Lieut.-Colonel George
Hurd, Sir Percy	Ropner, Colonel L.	Winterton, Rt. Hon. Earl
Hurst, Sir Gerald B.	Rosbotham, Sir Thomas	Womersley, Walter James
Inskip, Rt. Hon. Sir Thomas W. H.	Ross, Ronald D.	Wood, Rt. Hon. Sir H. Kingsley
Jackson, Sir Henry (Wandsworth, C.)	Ross Taylor, Walter (Woodbridge)	Worthington, Dr. John V.
James, Wing.-Com. A. W. H.	Ruggles-Brise, Colonel E. A.	Young, Rt. Hon. Sir Hilton (S'v'noaks)
Joel, Dudley J. Barnato	Runciman, Rt. Hon. Walter
Knox, Sir Alfred	Runge, Norah Cecil	TELLERS FOR THE AYES—
Latham, Sir Herbert Paul	Russell, Albert (Kirkcaldy)	Captain Austin Hudson and Lord
	Russell, Alexander West (Tynemouth)	Erskine.
NOES.
Adams, D. M. (Poplar, South)	Edwards, Charles	Jenkins, Sir William
Attlee, Clement Richard	Evans, R. T. (Carmarthen)	Jones, J. J. (West Ham, Silvertown)
Banfield, John William	Foot, Dingle (Dundee)	Jones, Morgan (Caerphilly)
Batey, Joseph	George, Major G. Lloyd (Pembroke)	Lawson, John James
Bevan, Aneurin (Ebbw Vale)	Greenwood, Rt. Hon, Arthur	Logan, David Gilbert
Brown, C. W. E. (Notts., Mansfield)	Grenfell, David Rees (Glamorgan)	Lunn, William
Buchanan, George	Groves, Thomas E.	McEntee, Valentine L.
Cocks, Frederick Seymour	Grundy, Thomas W.	Makins, Brigadier-General Ernest
Cove, William G.	Hamilton, Sir R.W.(Orkney & Zetl'nd)	Mallalieu, Edward Lancelot
Cripps, Sir Stafford	Harris, Sir Percy	Maxton, James.
Daggar, George	Hepworth, Joseph	Poling, Wilfred
Davies, David L. (Pontypridd)	Hicks, Ernest George	Parkinson, John Allen
Davies, Rhys John (Westhoughton)	Holdsworth, Herbert	Rathbone, Eleanor
Dobble, William	Janner, Barnett	Roberts, Aied (Wrexham)
Salter, Dr. Alfred	White, Henry Graham	Young, Ernest J. (Middlesbrough, E.)
Samuel, Rt. Hon. Sir H. (Darwen)	Williams, Edward John (Ogmore)
Smith, Tom (Normanton)	Williams, Dr. John H. (Llanelly)	TELLERS FOR THE NOES.-
Thorne, William James	Wilmot, John	Mr. G. Macdonald and Mr. John.
Tinker, John Joseph	Wood, Sir Murdoch McKenzie (Banff)

Question, "That the Clause be read a Second time," put, and agreed to.