HC Deb 09 May 1935 vol 301 cc1147-259

Order for Second Reading read.

3.27 p.m.

The MINISTER of HEALTH (Sir Hilton Young)

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

The House will have seen from the full explanatory memorandum attached to the Bill that it arises in circumstances which, in view of the particularly technical nature of the Bill, it will perhaps be useful that I should explain with some care. In 1934 we passed the Unemployment Act, by which we brought into existence the Unemployment Assistance Board. The principal provisions of that Act were to the following effect: that there should be two appointed days, the first and the second, and that on the first appointed day the administrative responsibility and the financial responsibility for the class in receipt of transitional payments should be transferred from the Ministry of Labour to the Board, and that on the second appointed day there should be a further transfer to the care of the Board of the other able-bodied unemployed who are specified in Part II of the Act. Those were, in general, the able-bodied unemployed holding certain qualifications in respect of National Health Insurance who are not in the transitional payments class.

In order that hon. Members may clearly apprehend the provisions of the Bill, I should further remind them that it was part of the essential financial provisions of the Unemployment Act, 1934, that, on the transfer of financial responsibility for the latter class, on the second appointed day, a beginning should be made of financial contributions in consideration of the relief of the local authorities from financial responsibility for that class. It will be within the memory of the House that the basis of those contributions was to be 60 per cent. of the expenditure of the local authorities on the relief of the class transferred on the second appointed day in the standard year, and that the standard year was taken as the financial year 1932–33. That basis was laid down by the Unemployment Act, 1934. In pursuance of the provisions of that Act, the first appointed day was in due course fixed as 7th January, 1935, for the transfer of responsibility in respect of the transitional payment class, and the second appointed day, for the transfer in respect of the other class, was fixed as 1st March, 1935. There followed events which are within the recent recollection of the House, and, in consequence of those events, it was decided, and confirmed in legislation by the House, that there should be postponement of the second appointed day. That was done by the Unemployment (Temporary Provisions) Act, passed in February of this year.

As a consequence of the postponement of the second appointed day, there was a considerable change in the financial outlook as regards Poor Law relief and responsibility therefor, in so far as they concerned the local authorities' budgets. The local authorities were led to expect by the passage of the Act and the ascertainment of the appointed day that on 1st March they would be relieved of liability, and get the big assistance which was a consequence of the Act. When that expectation was negatived by the postponement of the second appointed day, it was obviously necessary to make provision to deal with that situation; the financial memorandum affixed to the Unemployment Assistance (Temporary Provisions) Act stated that measures would be proposed for dealing with it. The Bill is introduced in consequence of that undertaking to deal with what I may describe as the disappointment of expectations of financial relief on the part of the local authorities in respect of the Poor Law relief of able-bodied unemployed.

The principle upon which the Bill is based is that local authorities should, as far as possible, be put in precisely the same position after 1st March as they would have been if 1st March had been retained as the appointed day. In order to do that, we must clearly estimate the local authorities' expenditure on the relief of the class in question, and we must ascertain what contribution they would have made to the board under the financial scheme of the original Bill. By deducting the contribution from the estimated expenditure, we shall ascertain the grant which they should now receive to put them in the position in which they would have been if we had retained 1st March as the appointed day. That raises the question of how to estimate the expenditure of which they would have been relieved. We cannot estimate the grant which they must receive simply by finding out what the local authorities expend on poor relief on the class concerned, because to do that would leave the local authorities, unchecked and uncontrolled, to make any expenditure they please, and to throw the burden on the taxpayer. That would be contrary to all rules and principles of sound finance followed, certainly at present, in our legislation. The only way in which it is possible to proceed is to determine a standard period, by reference to which we estimate the expenditure of which they would have been relieved. That process is a matter of common agreement, and there is no dispute in regard to it between the central Government and the local authorities.

Very close negotiations and conferences have been undertaken between my right hon. Friends the Chancellor of the Exchequer and the Minister of Labour and myself and the local authorities on this subject, as a result of which a basis for the determination of the standard period has been arrived at by common agreement—I may say that without fear of contradiction—by the parties concerned. The standard period which has been selected, and by reference to which we shall determine the grant to be made, is the three months immediately preceding 1st March, that is, December, 1934, and January and February, 1935. Perhaps the most natural proposal was that the standard period should be the corresponding three months in the preceding year, or the preceding 12 months, but, as a result of considerations which were advanced, it was decided to select those three winter months, and to estimate the expenditure upon relief in accordance with the actual expenditure during those three months.

The House will see, of course, that that is a very big advantage to the local authorities, because their grant is determined by reference to the expenditure in the three most expensive months for relief—the three winter months. I will indicate how great an advantage to the local authorities results from this method of selecting the standard period. During the three months chosen, the average weekly expenditure in England and Wales on outdoor relief, which is the standard in the matter, was £131,000. Let me show what would have happened if we had chosen other and perhaps more natural periods. If we had chosen the preceding three months, the average weekly expenditure was only £111,000; if we had chosen the corresponding three months of the preceding year, the average expenditure was only £108,000; and the difference between these figures and the actual figure for the period chosen, namely, £131,000, is the measure of special advantage which is given to the local authorities.

I may mention here one other circumstance in explanation of the proposals. The House may ask how long this arrangement is to last, because, although it may be a fair and, indeed, even a generous basis at the present time, a critic might very well say that the conditions in another year might be such that there would cease to be any advantage to the local authorities. In order to safeguard the local authorities from any danger of disadvantage in that regard, the Bill provides that the duration of this basis is to be either until the second appointed day is actually determined, when of course it will come to an end automatically, or for a limited period of six months. If the arrangement is to last for longer than six months, a review will be necessary, and the matter can be reconsidered in the interests both of the taxpayer and of the ratepayer.

I have dwelt, I think not unduly, upon the advantage which accrues to the local authorities from the selection of this particular period, and I think it is right, in order to give a full picture of the relative balance of advantages to central and local finance in this matter, to point out another circumstance as a result of which, the longer this transition period goes on, the greater will be the financial advantage which the local authorities will derive. That lies in the basis of the contributions which they are to make to the Board after the second appointed day—contributions which have also to be taken into consideration and set against the estimated expenditure in calculating the grants which they will derive during the interim period. As I have already mentioned, those contributions which are to be made by the local authorities to the Board, in consideration of the big financial liability of which they are being relieved, are based upon the year 1932–33 as a standard period.

The fact to which I want to draw attention is that, owing to that standard year for the calculation of contributions having been fixed so far back as 1932–33, there is a very substantial advantage to the local authorities. I will point out, first of all, what the advantage is, and will then attempt to set a figure upon it. The nature of the advantage is, of course, that, as the expenditure in question has been steadily going up since the year 1922–23, we are, by taking that back year as the standard, letting the local authorities off, so to speak, with a very much smaller contribution than they would have had to make if the contribution had been fixed in respect of a more recent year. I have calculated, and the calculation can easily be checked, that this represents an advantage to the local authorities of no less than £1,250,000 per annum.

The relief that is being provided to local authorities under this Measure in anticipation of the coming into force of the full provisions of the Unemployment Assistance Act, 1934, is in itself of a very large order. The amount of the expenditure of which local authorities are being relieved is £6,000,000 a year, while the amount of their contributions is only £2,000,000 a year, so that there is a positive benefit to the local authorities on this transaction of no less than £4,000,000 a year. It is always more interesting to consider the application to a particular locality than just to take the integral total for the whole country. Let me, therefore, point out the order of relief which is being experienced by certain local authorities under the Measure which is now being introduced. I am taking, of course, the most conspicuous cases, which strike the eye, and it happens that they are also the cases which stand most in need of some such assistance. I will take some of the hardest hit areas, and quote the assistance which is to be given to them by the grants under the Bill. Liverpool will get assistance equivalent to a 2s. 7½d. rate; Sunderland will get assistance equivalent to a 2s. rate; Merthyr Tydvil—one of the very hardest cases, as we are all so well aware—will get assistance equivalent to a 2s. 9d. rate; and, taking the country as a whole, the equivalent of a 3½d. rate is the average assistance to all local authorities. In face of these figures, of course, it cannot possibly be said that this is not very substantial help.

There is one other provision of the Bill which needs explanation. Clause 2 is a purely machinery Clause, but Clause 3 is an important practical provision. It is to assist local authorities which have budgeted for the past year in expectation of further help. It is not for me to say whether local authorities which made their budgets for the past year in the expectation of earlier help were acting wisely or not in so doing: I have simply to consider the actual position produced by the fact that they have done so, and I have to recognise the fact that they have done so, and that thereby a certain number of these local authorities have been placed in a difficult position. I have further to see what assistance it is possible to give them in order to enable them to overcome the difficulties of their position.

In my view, and in the view of the Government, the situation is not one which requires any further direct assistance. I am aware, from certain resolutions which have been passed, that the view has been advanced in certain quarters that the local authorities had some right to expect that the assistance which we are now dispensing should be granted from as early a date as the 1st October last. That opinion is based on a complete misconception. It is now, I think, common ground that no undertaking was ever given by the Government that assistance should be given at that early period. Whether the local authorities are wise or unwise in the view they have taken it is not for me to say; it is simply for the Government to see what help can be given to them in view of the difficulties of their situation. The appropriate help here is that which has been suggested to the Government, and which the Government have adopted, of enabling those local authorities to spread the additional expenditure of poor law relief for which they had not budgeted over a term of years by means of a loan. That is not without precedent, and, in fact, there is good precedent for it in dealing with similar emergencies in our Poor Law legislation; and it is this precedent which we follow in Clause 3 of the Bill which enables local authorities to spread this additional expenditure over a five-year period.

There is one other matter to which I should refer before I commend this Bill to the House. This is a difficult and technical Bill, and one which only those who have rather closely followed these matters can fully understand at first sight, but I trust that I have explained the provisions of the Bill so as to make them intelligible to Members of the House who have not had the advantage of fully following the matter in all its stages. But there is another and more general aspect of this question to which a certain prominence has been given, and which has been called to the attention of the Government and myself by resolution passed in certain quarters, and that is as to the particular consideration which should be given to the areas which we now call the special areas, and to which, on previous occasions, we used to refer as distressed areas. Let me say at once, that the needs and special hardships of, and the special consideration required by, the areas that we have in mind are matters which are closely present to the minds of us all and which, when we are dealing with such questions as these, receive the most careful attention and the most sympathetic consideration to make sure that in all regards we are doing not only bare justice, but full justice and giving sympathetic treatment to the areas in question.

I am quite confident that if I detain the House for a few moments in order to enumerate the special consideration which has been given to the distressed areas in the elaboration of the various forms of legislation which have been produced in this connection, I shall convince the House that that attention has been full, and certainly not inadequate to the needs of the distressed areas. Throughout, every possible provision has been made to assist the situation for them, in so far as it is possible to do so in common sense, and in justice to the other areas of the country. In the first place, the House will remember that when it was obvious that more time must be taken in altering the permanent scheme for the relief of local authorities from Poor Law expenditure, the special area grants were introduced in order to tide over the interim. Grants to the extent of £500,000 a year—I think it was £440,000 for England and Wales—were made, and when it was apparent that the transitional period was going to be longer than at first seemed necessary or likely, those grants were extended by my right hon. Friend the Chancellor of the Exchequer during a second period which covered 11 months of the year; £500,000 a year during approximately two years to cover the transitional period.

The House will also remember that a further very special concession was made to assist the finances of the distressed areas by my right hon. Friend the Chancellor of the Exchequer when the Unemployment Assistance Bill was passing through the House of Commons in Committee. The decision was this. It was of a technical nature, but it was to allow the temporary distressed area grants, to which I have referred, to be deducted before calculating local authorities' contributions. Thus, the £500,000 grant was deducted from the expenditure of the standard year 1932–33 in fixing the contributions of the local authorities. The effect of that was very substantial, and meant another £300,000 for the assistance of distressed areas. So that that second opportunity was taken to give assistance which could properly be given to distressed areas.

But there was a further circumstance to which, I think, due weight has never been quite given in some of our discussions on the subject, because it is a little under the surface, and that is, the consideration that, in spite of the central Exchequer now coming forward as it does in the present Bill to relieve the local authorities, including the distressed areas, of so large a part of the burden of Poor Law relief, we have agreed with the local authorities to maintain unchanged for the full duration of this grant period the block grants—to maintain them unchanged until they fall for revision in the year 1937. It will not escape the attention of the House that the block grant is calculated very largely in relation to those factors of unemployment which find their expression in the expenditure of Poor Law relief. The House will see that the distressed areas continue to get the block grant calculated upon expenditure of which they are now being relieved. No less than £3,000,000 a year may be regarded as the part of the block grant which is dependent upon the unemployment factor.

If we consider the special factors to which I have referred, we shall see that very special consideration has been given to the conditions of the special and distressed areas in arriving at the financial basis of this Bill. Further, when we consider what I have described as the very favourable circumstance as regards the standard period for determining the grant fixing the three winter months, and when we consider, too, that, owing to the nature of the conditions the distressed areas are those which will derive the most benefit from this source, we see that the condition of these areas has been very present to the mind of His Majesty's Government in arriving at this arrangement for protecting the interests of the local authorities.

There is one other circumstance which I should, perhaps, mention. We may be tempted to consider other special forms of relief and assistance to the distressed areas. If that be so, let us bear in mind that we have now established a special machinery by which other and further forms of assistance can be brought to the aid of distressed areas through the Special Commissioner for the area. In particular, I bear in mind the very interesting possibility which has been raised by the Special Commissioner of assistance to that part of the rates of distressed areas which go towards housing. It is the idea which he has formulated, and which is now under discussion, of a public utility society or a housing association to be financed by means of grants, which, if it were to be established, would be a very important aid to the housing rates of the areas in question.

I have laid this Bill before the House with such clearness as I can both to explain and to justify its provisions from the point of view of the general situation of all local authorities in the country, and of local authorities in the distressed areas in particular. I should, indeed, have supposed that this Measure would have met with very little opposition from the House, and I cannot but believe that, when the House has had an opportunity of discussing and considering its provisions, it will come to the conclusion that its provisions have the merit not only of doing the fair thing by local authorities, but of doing the fair thing by local authorities in a generous spirit. The only reason I have to suppose that there is any doubt or hesitation on that subject is the Amendment that has been tabled by the right hon. Gentlemen opposite in which they advance reasons for refusing to give a Second Reading to the Bill. If we look at the final words of the Amendment we see what are really the grounds upon which it is proposed to ask the House not to give a Second Reading to this Bill, with its fair and generous treatment of local authorities. The Amendment states that hon. Members opposite cannot assent to any further legislation which fails to give effect to the principle that the entire cost of maintaining unemployed persons who are not in receipt of unemployment benefit should be a national charge.


Hear, hear.


As a matter of fact the Amendment and the cheers of hon. Members opposite are dealing with a very small point, how small a point perhaps they hardly realise. It has been stated by my right hon. Friend the Chancellor of the Exchequer on more than one occasion that the effect of all the provisions to which I have referred, the effect of the cost of transitional payments being borne by the Exchequer, the effect of relief being given in respect of liability for expenditure upon other able-bodied unemployed and the effect of local authorities' contribution being fixed in regard to expenditure during the standard year—the effect of all these provisons is to relieve the local authorities of how much percentage does the House think of the entire cost of maintaining unemployed persons who are not in receipt of unemployment benefit?


Ninety-five per cent.


Ninety-five per cent. I supposed that the figure was unknown to hon. Members opposite, or challenged by them in order to account for the terms of their Amendment, but I confess that since I have now discovered that the figure is already present to their minds I am even more at a loss to understand their opposition to the Bill. What we have before us then, what is in dispute in the terms of the Amendment, is nothing more than 5 per cent. of the total cost of maintaining the able-bodied unemployed. I would say that 5 per cent. liability on the local authorities is a very small residual liability. This House would be very ill-advised if it were to reduce that amount any further than it has been reduced. When we consider the basis of our national system of finance, in the distribution of financial responsibility between those who have the administrative responsibility so as to maintain a proper interest in the two great parties in the machine of national government—the local authorities and the central government—I think we shall be very reluctant to make any further reduction in the liability of local authorities. It is a sound principle surely, at any rate it is a principle which we have always followed with admirable results, that we shall consider these matters from the point of view of balance of interest between the rate payer and the taxpayer; and to ask us to go further than we are going, in piling a burden upon the taxpayer to the relief of the ratepayer, would, I am sure, be a most unwise proceeding.

Such are the issues which lie before the House. By way of summary of what I have said, let me state that the questions which lie about the fringes and outskirts of this Measure may be controversial and interesting, but I am confident, with regard to the Measure itself, that it does the right thing by the local authorities in view of the postponement of the appointed day, and it does that right thing in a generous and fair spirit. There is a large measure of agreement between the local authorities and the central Government, and I can with confidence commend the Bill to the House.

4.5 p.m.


I beg to move, to leave out from "That" to the end of the Question, and to add instead thereof: this House regrets that difficulties have arisen with public assistance authorities in making the necessary financial adjustments consequent upon the delay and subsequent breakdown in the central administration of Part II of the Unemployment Act, 1934, and, being of opinion that, in the present state of the law, difficulties of this nature will recur, this House cannot assent to any further legislation which fails to give effect to the principle that the entire cost of maintaining unemployed persons who are not in receipt of unemployment benefit should be a national charge. I noticed no enthusiasm in the speech of the Minister of Health; I noticed no note of triumph in his words. He is here to-day occupying a very difficult position as the whipping-boy for the Chancellor of the Exchequer, who should have been in his place, and whom we shall expect to hear to-day to defend a Bill of which he is the real parent. The right hon. Gentleman has made some little reference to the past history of this Measure. He has been very careful to leave out of that history certain chapters which reflect little credit on the Government. I am saying what is believed by Members on the other side of the House as well as by my hon. Friends when I state that the Government's handling of the problem of the unemployed is an unparalleled story of mess and muddle which would be a disgrace to a parish council. I want to carry the mind of the House back to a speech made by the Minister of Health on 12th April, 1933, when there was a debate on unemployment, and the right hon. Gentleman was sent to the House to declare the new policy of His Majesty's Government with regard to the maintenance of the unemployed. I know that there was a good deal of very careful phrasing of words in that speech, but there were certain words which bear only one meaning and which created the same impression in the mind of every Member who heard the right hon. Gentleman speak. The right hon. Gentleman said: One of the bases of this redistribution of responsibility between local authorities and the central Government will be that the central Government shall accept responsibility, both administrative and financial, for assisting all the able-bodied unemployed who need assistance.


Will the right hon. Gentleman read the following words?


I have already said that this essential truth was clouded with many other words, but I will certainly read what follows: The acceptance of this responsibility by the central Government will necessitate a readjustment of the present block grant paid to the local authorities by the State, since they will be relieved of a liability to which they have hitherto been subject.—[OFFICIAL REPORT, 12th April,1933; col. 2607, Vol. 276.]

I notice no cheers from the other side now that I have read the sentence as requested. Does that sentence invalidate the statement I have already made, that the right hon. Gentleman came down to the House and either deliberately misled it, or that at that time it was the intention of the Government to accept 100 per cent. responsibility for the able-bodied unemployed?


It is a perfectly clear inference from the words which the right hon. Gentleman at first failed to read that the acceptance by the Government would not be 100 per cent. responsibility, but that there would be a reduction.


This is like a theological argument. I am on the central point, and it is no good the right hon. Gentleman trying to wriggle out of it. Hon. Members opposite know that on 12th April, 1933, they believed it was the intention of the Government to take over full responsibility for the maintenance of all the able-bodied unemployed. Now the right hon. Gentleman uses a phrase about the local authorities' disappointment of expectation. It is a base betrayal of the local authorities. After that statement which I have read and which impressed people on all sides of the House as being a departure from existing practice, there were gloomy months of silence. In November, when the House was about to rise, a Bill was introduced; and then, when the House met again, without any warning, without any suggestion to the local authorities that there was to be a single word altered, a new Bill was brought forward. I raised the point at the time, and we never got an explanation. The explanation is, however, obvious. It was shoddy workmanship on the part of the Government. From April to November they had time to prepare the Bill. They prepared the Bill, but in less than a fortnight they had to withdraw it and introduce another. The Bill ambled on through 15 days of Standing Committee and five days of the Report stage, and received the Royal Assent on 28th June.

That was time enough to deal with all the outstanding problems that were left, to bring the administrative machinery into operation. It was not until December that the Government brought the regulations before the House. Those regulations did not have a very enthusiastic reception, even amongst supporters of the Government. The Government were warned, not merely by my hon. Friends but by Members in other parts of the House, that the regulations meant trouble for the Government. The Government thought they knew better. When the first appointed day operated on 7th January a storm broke out. I think no one can remember anything like it, for its spontaneity and depth of feeling. Every Member of this House with unemployed in his constituency had a very unhappy January. People did feel that it was something which had to be remedied. We all remember the sad spectacle of Ministers coming down to the House in sackcloth, and with ashes about their heads, saying in grief that they had made a mess of the whole position. Because they made that mess local authorities found themselves in difficulties, and through no fault of their own. It is true that there had been discussions with the local authorities, but on 7th January everything went back into the melting-pot again and local authorities felt entitled to raise the whole problem.

The right hon. Gentleman has spoken of the standard year, and made a virtue of it—that the standard year was so far back, 1932–33, that really that was to the advantage of local authorities. But what is the crucial fact to the local authorities? It is that in 1932, 1933, 1934 and during the first months of 1935 the number of people on out-relief has increased and the expenditure of local authorities has increased until, on the Government's own showing, local authorities are now spending 50 per cent. more on out-relief than they6 were spending in the standard year 1932–1933. That was a very serious situation for the local authorities. We are told that the Government have now taken over 95 per cent. of the cost of the maintenance of the unemployed. That is about the worst piece of financial jugglery that I have ever seen. Figures have been used on many occasions to prove the most extraordinary things. The reason why this percentage can be swollen to 95 per cent. is that the Government are taking transitional payments on the assumption that if they did not pay them everybody would go on the Poor Law. The Chancellor of the Exchequer said, in that famous speech of his, that the cost of transitional payments was £51,000,000, when he told us that 95 per cent. of the burden was being borne by the State. The Minister did not hear it, but we heard it on these benches, and we were able to give him the figures, without any reference to his notes. Never since the first big Unemployment Insurance Act, 1920, have the unemployed at the expiration of the period of standard benefit been thrust upon the Poor Law. To swell the figures of State help by £51,000,000 is to imply that if they had not given that help all the people would have been driven to the Poor Law. No Government would have dared to do that.

The truth is that they have relieved the local authorities of only a part of the burden. The 60 per cent. to 40 per cent. basis represents the fact, except that the proportion of the local authorities in the future will probably prove to be higher, in spite of the right hon. Gentleman's view about the importance of 1932–33 being taken. That principle was a vicious financial principle. It was a step which had never been taken in this country before. The local authorities in the past have been assisted by the Imperial Exchequer. Never in our history have impoverished local authorities had to come to the aid of the Exchequer. That is what is happening under this Bill, and I think, in view of the fact that in the last two or three years the burdens of local authorities have been increasing, it is right that we should face the situation as we now do. The right hon. Gentleman seems to think that keeping the 5 per cent. responsibility on the local authorities is a kind of moral weapon. He has no right to charge them that 5 per cent. for administering a problem over which they have no control. He is not co-operating with them now in the treatment of the able-bodied unemployed. That is being done by national machinery, and not one penny ought to be expected from the local authorities to deal with a problem which has been taken out of their hands so far as the machinery is concerned; a problem which has never been dealt with before by compelling the local authorities to make a contribution to the Unemployment Assistance Board in a most undemocratic way. All areas pay, but with no vestige of local authority control in the expenditure of the money.

The next important point is that of the date. The right hon. Gentleman has told us that there was never any binding undertaking that the date should be any other than 1st March. That may be true. What is equally true is that the local authorities, somehow or other, got it into their minds, in some way or other they were led to believe, that it was going to be before 1st March. Let me quote a resolution passed by the Liverpool City Council, on 6th March, 1935. That is not a council with a red majority. I understand that it is a very respectable council.


It was passed unanimously by all parties.


This resolution was passed unanimously by a very responsible city council, who could not have gone into this discussion with their eyes closed. That this council records its profound dissatisfaction with the failure of the Government to provide substantial financial assistance to recompense the local authorities for the huge expenditure incurred owing to the delay in determining the date, the second appointed date, which the Government had led local authorities to believe would be in October, or an even earlier date in 1934. I think I am right in saying that in the financial memorandum to the Bill of 1934 there was a definite statement that neither of the appointed days would be before 30th June. I think it is a fair implication to suggest that in the minds of the people who read that statement there would be an impression that it might be almost any date afterwards. Whether anybody ever said in words what the actual date would be does not matter. The fact is that responsible democratic assemblies in this country on the basis of that statement framed their estimates for the current year. It was not their fault that the Government got themselves into such a tangle and had to scrap, as they virtually have scrapped, Part II of the Unemployment Act, 1934, and they were entitled to very generous treatment.

The right hon. Gentleman has done his best to put the rosiest complexion upon the action which the Government have taken. The point is that the local authorities will, after an enormous struggle and innumerable discussions, have their position more or less safeguarded to the end of September. I am beginning to mistrust the dates that this Government puts into Acts of Parliament or regulations. Why 30th September? We have had no indi- cation in this House, since the dramatic collapse of Part II of the Act in January, when there is to be any amending legislation in regard to Part II and when there are to be new regulations. This standstill arrangement seems to be an admirable description of the Government's policy on this matter. The point that I wish to raise especially is, that if the present trend continues—there is no reason to believe that it will not, for it has been with us now for three years—I mean the steadily growing incubus of expenditure on poor relief, the present situation is not going to satisfy the local authorities at the end of September. Clearly, they are going to be in a worse position than they are to-day.

As an example of crazy finance, I think we can quote the permission to local authorities to borrow for current expenditure. When the right hon. Gentleman spoke of 95 per cent. and so on, he said that to do anything different would be contrary to the rules and principles of sound finance. I defy any Member of this House to bring forward any case where the Treasury at any time has ever accepted the principle of paying for current expenditure by borrowing. We have gone on the sound principle of borrowing for capital expenditure and paying as we went on for day-to-day services. This is no concession to local authorities; it is an insult to them. They have not only to borrow but they have to pay interest—


Is the right hon. Gentleman correct there? Was there not an arrangement called the Goschen loans whereby after the strikes in 1921 and 1926 huge amounts paid in relief were funded and are now being repaid, certainly in my own constituency, by instalments every year, the total being £64,426 to be repaid to the Ministry of Health?


I think hon. Members will agree that this is a miserable little concession to local authorities, allowing them to borrow to pay out relief week by week. [Interruption.] The Noble Lady is not very much interested in this problem.

Viscountess ASTOR

I must protest. I was not saying anything. Every time the right hon. Gentleman gets up he attacks me, and I am getting really tired of it. Let him stick to his facts and stop his personalities about me.


If the Noble Lady will stop her running comments, I will do so.

Viscountess ASTOR

I was not making running comments.


Hon. Members on all sides of the House are aware of the chief contributions that the Noble Lady makes to our Debates. It is objectionable.

Viscountess ASTOR

I have not made such a mess as you have.


There is one further point, with which the House will agree, on which we might have a real concession from the Government. It is a small point and I hope that it will be possible for the Government to meet it. It is provided in Clause 1 (3) that The grant … shall be paid out of moneys provided by Parliament in such instalments payable at such times as the Treasury may direct. I should like to suggest as a small concession to the local authorities, who are having to pay out this money week by week and month by month through no fault of their own, that the Treasury might pay moneys on account each month and make a final adjustment some time later.

My final word in moving the Amendment is that I am satisfied, and I think many hon. Members on the other side will be satisfied, that there is no way out by a plan which tries to divide the responsibility for the maintenance of the able-bodied unemployed between the State and the local authorities. My right hon. Friend the Leader of the Opposition when he signed the Minority Report of the Poor Law Commission in 1908 stood by that principle. It is a principle which is finding support in all schools of political thought. Our distressed areas ever since the end of the War—councils of varied political complexion—have been claiming year after year that they should be relieved of the burden of maintaining the able-bodied poor. That is now common ground. There are very few people who would argue that in a time of grave economic stress like that through which we are passing, because of mere accident local authorities should have to bear the burden of the maintenance of their own unemployed.

I admit that the Government have done something to relieve the local authorities of a part of the burden. But why, instead of playing with the question and introducing small temporary Bills of this kind—I think this is the second we have had this year—why, instead of trying by negotiations between the Government and the Unemployment Assistance Board to get together some regulations that will, at any rate, look as though they would work, do the Government not go the whole way? I am sure they would have the full approval of the House if they decided to go the whole 100 per cent., and stopped trying to patch up a Measure which experience has shown to have broken down completely. I warn the Government of this. If they try to tinker with amending legislation, if they bring forward new regulations, the storm will break again. They will not be out of their difficulties, and in view of the very unhappy experience which they have had in dealing with this problem, I hope they will be prepared to accept the advice which will certainly be given to them from all sides of the House and will realise that it would be well, after their recent bitter experience, to make the burden of these unfortunate unemployed a truly national charge.

4.32 p.m.


I wish to thank my right hon. Friend the Minister of Health for the very lucid way in which he explained to the House the particulars of what he rightly described as a highly technical Measure. In so far as this Bill is a limited proposal to give effect to an arrangement which has been come to with the local authorities, little can be said by way of criticism of it. But if it is to be regarded as a permanent contribution towards the settlement of the relations between the local authorities and the National Exchequer in the matter of the financial burden arising from unemployment, then I think very little can be said for it. I wish my right hon. Friend had been able to go further in his statement as to what the Government are doing. If he had been able to assure the House that the whole of the assistance which the Government were giving was being administered equally as between authority and authority and between one part of the country and another and that no authority was bearing more than, say, 5 per cent. or 3 per cent. of the burden of maintaining the unemployed, the area of debate and controversy would have been greatly narrowed. But since the Unemployment Act was passed we have entered into conditions which are far from static, and there is no doubt that the burdens on many local authorities have been growing steadily since that time.

I had hoped to hear from the right hon. Gentleman some word of sympathy with those authorities who were not at the time when the original Act was under discussion classified as special or distressed areas but who are now facing a serious responsibility. Since that time the situation has deteriorated in many of these areas—in my own constituency in particular and in all those areas where there is concentrated a large number of unemployed who have been out of work for a year or more. I know that in comparison with the total unemployed register the number seems surprisingly small but, as I say, they are concentrated in certain areas and in those areas this arrangement under Section 45 of the Act simply does not work. For various reasons the amount of out-relief has risen steadily while the operation of the "not normally in insurable employment" provision is adding to the burdens on those authorities in a way which was not foreseen. My right hon. Friend referred to Liverpool and to the assistance which had been given there. Liverpool, no doubt, will have its case represented to the House by those who are entitled to do so but I may say-that in my own constituency, which is part of the Merseyside area, we have felt, that difficulty in an aggravated form. The amount of relief in respect of the able-bodied unemployed has risen by a substantial annual amount. In the year 1930–1931 it was £7,000 but since then it has risen in successive years to £20,000 and £30,000 and in the current year it is estimated that it will be £71,000. Having regard to all the circumstances we cannot feel that Section 45 will give us a permanent satisfactory basis for the settlement of these matters.

I had hoped also to hear something of the Government's intentions with regard to the whole field covered by this great problem of giving help to those who need it. I had hoped for some indication of whether we were to have a new Bill, or whether Part II of the Act was to go, or whether we were to proceed by regulations—some indication, to which we might be giving our minds, of what the permanent solution of the problem is to be. The right hon. Gentleman the Member for Wakefield (Mr. Greenwood) referred to the debate in April, 1933, and to the impression which was left on the minds of Members by the speech of my right hon. Friend the Minister of Health on that occasion. The circumstances of that debate are very clearly in my mind. It so happens that I was fortunate enough to catch your eye, Mr. Speaker, immediately after the right hon. Gentleman had spoken and the impression left on my mind was that there was an undertaking that the total charge of maintaining the able-bodied unemployed was to be a national responsibility. I do not make any quotations, nor do I dispute the interpretation which my right hon. Friend has to-day put upon the words which he used then but that was the impression left upon my mind and I agree with the right hon. Gentleman the Member for Wakefield that it was the impression left upon the minds of practically everybody in the House. On that occasion I endeavoured to thank my right hon. Friend for his statement and my hon. Friend the Member for Sunderland (Sir L. Thompson) whose name has been identified with this controversy very honourably and actively over a long series of years made a speech in similar terms.

Had we been able to foresee the way in which my right hon. Friend's promise was to be translated into practice, and the delays which were to occur, I fancy that our speeches And our attitude would have been very different, and indeed that our votes would have been different from what they were on that occasion. I acquit the Government—perhaps it would be presumptuous of me to put it in that way—but I certainly do not think that any charge could be brought against them of having failed to carry out any verbal undertaking or any legal obligation which they undertook in that regard. Nevertheless, there is a strong case to be made out in favour of some consideration being given to those local authorities who very reasonably anticipated that the appointed day would be in October. I think it was well known at the time that the local authorities were budgetting on the anticipation that the appointed day would be 1st October, and if it was not in the minds of Ministers that that would be the appointed day, why was some guidance not given to the local authorities? The facts must have been well known to the Ministry of Health, and it is clear, having regard to the fact that the day actually appointed was so much later, that Ministers must have anticipated what was going to happen. Therefore some consideration ought to be given to the authorities in this matter.

The whole position must be regarded as profoundly unsatisfactory. We are passing this temporary legislation without knowing what is the mind of the Government or what is their long-term policy in regard to the administration of Part II of the Act. I sincerely hope that before the Debate ends we shall have some information on these points. It is unfortunate that after all these years of experiment by trial and error Parliament has not yet succeeded in working out a satisfactory means of giving help to the unemployed which will be within the nation's capacity and will at the same time give satisfaction to and be acceptable to those who are in the position of requiring that help. I think that is one of the greatest failures of Parliament in the last 15 years, or indeed since the War. Considering the innumerable efforts that we have made and the great amount of Parliamentary time which has been devoted to this task, we might have hoped to-day for some indication from the Government, of the lines on which they wish to proceed in order that Parliament may give its mind, at long last, to the establishment of some permanent basis for dealing with this very difficult problem.

4.42 p.m.


I venture to express my agreement with the larger part of the speech of the hon. Member for East Birkenhead (Mr. White). I agree with him that we have had a very lucid exposition of the objects of this Measure, and I do not think that anyone here should now be in the position of failing to understand what the Government are seeking to do. In so far as the main objects of the Measure are concerned, I agree that this legislation is absolutely necessary in order to clear up the position created since the appointed day was further deferred, and to make arrangements by which the local authorities will not suffer as a result of this additional postponement. I think, however, there may have been omitted from the consideration of the Government the question of the interest for which the local authorities might reasonably ask, in respect of the money which they have had to borrow in order to meet the obligations now being met by the Government's concession, and I hope that my right hon. Friend will take that matter into consideration before we finally part with the Bill.

I also agree with my hon. Friend the Member for East Birkenhead on this point. If the Government are giving in an acceptable form a 95 per cent. contribution to the cost of maintaining the unemployed man who is not insured, and if that arrangement is in fact operative over all districts of the country then indeed I would not be anxious to press this question to the extent proposed in the Opposition's Amendment. I think if I saw 95 per cent. being evenly distributed among the various local authorities all over the country, I should take no exception at all. But I would like to draw my right hon. Friend's attention to the fact that this 95 per cent. which indeed is a large percentage, is inequitably divided. There is the burden falling upon certain districts which they ought not to have to sustain. The unfortunate thing is that, so far as I can discover, the districts which are suffering worst from inequitable distribution are the very districts which are least able to bear it. It is the districts in which distress is most prevalent which are having the hardest burden to bear, and it is quite easy to give a series of comparisons of various districts which are startling.

Let me take the city in which I am very much interested, namely, Glasgow. It is startling to find that after all that has been done Glasgow has to make a contribution to the Unemployment Assistance Board of £400,000 a year, while London, with five times Glasgow's population and I do not know how many times its wealth, has to contribute only £216,000. There is a similar comparison to be made with regard to Liverpool, which I think has to contribute £290,000 a year as against London's £216,000. Then Aberdeen has to contribute £30,000 a year, while Coventry, which has almost identically the same population, contributes less than £1,000 a year. I could weary the House with a number of illustrations of a similar character, and I think one is entitled to say upon those statistics that no system can be right that creates those immense inequalities.

You may say, if you like, that 95 per cent. is dispensed, but that is no comfort at all to the particular district that does not get it, especially if that district is finding it very difficult indeed, with its resources largely depleted and its distress increasing, to meet its ordinary expenses, without this extra burden, which I think is quite clearly recognised as a national matter. The change which has taken place in recent years has been the recognition that the distress created by unemployment was not due to any defect in a particular district which suffered, and that, indeed, it had become upon those localities a burden which the State must shoulder. I do not press that quite so far as the Opposition. Some portion of the burden ought to remain with the local authorities. I think that on the whole that is right, but we recognise this as a national burden, and it is something which the Exchequer should deal with in order to aid particular localities which are severely burdened.

I have referred to one or two inequalities which are, in themselves, somewhat startling, but I wish now to direct the House to one of the most glaring defects of which I am conscious, in the administration of this fund. It has arisen out of a blunder the general effects of which were not sufficiently observed at the time. As I have said, this question of unemployment does not stop at the border of any State. So far as unemployment is concerned Scotland and England are in precisely the same position and ought to be treated in exactly the same way. Indeed, the whole purpose of our administration in the past has been to make the Scottish workman who is unemployed the same as an English one. And why should there be any difference? It is a universal service to which the nation is applying its mind and giving its aid. But this extraordinary thing has emerged from the way in which these funds have been dealt with.

The House will remember that in the course of his speech this afternoon the Minister of Health referred to the fact that a grant of £500,000 had been given in 1934 to be distributed in order to help the districts which were seriously burdened by rates. That £500,000 grant did not cease to have its effect when it was given. It is being perpetuated to-day by the legislation with which we are dealing. As the Minister of Health explained, in calculating the contribution which the local authorities have to make to the Unemployment Assistance Board there is deducted the amount which any particular district received in that eleemosynary aid which they got in 1934. If that district got too little in 1934 its contribution to-day is too big, and therefore everything depends, so far as this dispensation of this fund is concerned, upon whether that £500,000 was equitably distributed or not. See what happened. Instead of treating this unemployment question and the burden arising out of it on the local authorities as a universal question for all the citizens of the nation, in which all were equally concerned, what was done by the Treasury was to segregate Scotland from England and treat them as different countries, as if they were workmen of different nationalities who must be differently treated.

There are certain services which Scotland operates for itself. It runs, for example, its own education and it runs its health department and its agricultural department, but the great bulk of all the other services are universal. In respect of the fact that there are these separate services there had to be arrived at, in olden times, some calculation when grants were made in respect of those services, some arrangement by which the grants should be proportionate to each other, and the system which has been in operation now for some long time was arrived at by Mr. Goschen. The portion was arrived at on a separate estimate on a variety of considerations, one of the things being the population of the country as against the other, and the taxation of the one country as against the other.

A decision was arrived at that when England got a grant Scotland should get 11/80ths of it. But that has no relation to the question of unemployment or the need of one country as against the other. Suppose that half the unemployment was in Scotland and half in England, it would be ridiculous to say that Scotland was to get 11/80ths. When it came to the distribution of this £500,000 there were four distressed areas in this country. Suppose that an arrangement had been made, a rough division equally among those distressed areas, Scotland would have got £125,000. If a calculation had been made as to what it had been costing Scotland at that time to support its able-bodied unemployed the figure would have been between £160,000 and £170,000. Upon this 11/80ths basis Scotland got £60,000, and, as I have said, this miserable, unjust grant perpetuates itself in the legislation which we had in 1934 and the legislation of to-day.

I do not know what my right hon. Friend the Secretary of State is going to say. Whether he is going to say, upon some figures or another, that Scotland is well enough treated I do not know, but whether that may be so or not Scotland must register its protest against its allocation being determined upon a principle which is ridiculous. I hope that whatever other comfort the right hon. Gentleman has to give us he will assure us that in matters of unemployment and relief of distress and so on we are not going to be treated again to an application of this principle of 11/80ths. If we are, very soon the Postmaster-General will be coming to say that it costs more to supply the Western Isles with letters than they were worth and Scotland must have only 11/80ths of what England gets, and similarly with regard to all other universal services.

It would be quite intolerable if this principle were to be applied any further in such matters, and I say also that in this Bill one of the things I particularly regret is that no attempt seems to have been made to remedy the position. Let me point out further, upon figures, how the situation works out, and I hope the House will forgive me if I indicate one or two of the results of the system upon which the Treasury proceeded. I find that as against Scotland's £60,000, Durham got £94,000 under the distribution of this £500,000, but whereas Glasgow alone to-day has to contribute £400,000 to the Unemployment Assistance Board, Durham, which got one-and-a-half times as much as all Scotland, contributed only £9,000. I find that Glamorgan, which got £66,000, has only to contribute £5,900. I know how badly off Glamorgan is and I am not suggesting for a moment that I wish to see Glamorgan pay more, but the comparison between these things becomes ridiculous. I have many examples here. Monmouth, which got £16,000, has to contribute only £13,000.


Is it not rather unfortunate that the right hon. Gentleman is making comparisons with areas which are the most distressed in Great Britain?


I hope my hon. Friend will forgive me using these illustrations. He will understand what I am driving at. The next most depressed district to South Wales is the West of Scotland. While I am not suggesting that the West of Scotland should be in exactly the same category as South Wales, there ought to be some relation between these cases. All the illustrations are not taken from South Wales. May now take the case of Liverpool, which comes much nearer to the Glasgow character. In Liverpool it is £57,000, as against £40,000 that Glasgow gets. Liverpool contributes £249,000, as against £400,000 that Glasgow has to contribute. Sheffield, which gets 58,000—£18,000 more than Glasgow—contributes only £91,000, or less than a quarter of what Glasgow has to contribute. Sunderland, which gets £10,000, will contribute £18,000; and West Ham, which gets £19,000, will contribute £50,000.

I am sure that I have said enough to show the House what an extraordinary mosaic of irregularities we have in this system of distribution, and in the amounts of contribution which these various districts make to the Unemployment Assistance Board. I feel, representing the constituency which is good enough to send me to. Parliament, that the way in which Scotland has been treated in this matter is a subject of very great grievance. I think I am entitled to appeal to my right hon. Friend to see that in some way or another this is remedied; and I think it is plain, also, that one of the greatest causes of the disparity between Scotland and some of the towns I have been citing is created by the absurd formula used in the distribution of this fund. I hope I have not wearied the House in the speech I have made on this matter, and I trust that I shall have some comfort from the Secretary of State, and that the Scottish people will know that some remedy is to be found for this very obvious grievance.

5.3 p.m.


I rise to associate myself with the Amendment moved by the right hon. Gentleman the Member for Wakefield (Mr. Greenwood), and to say that if it is pressed to a Division I shall have no hesitation in voting for it. I would like to try to trace back the position for a year or two earlier. For many years this problem has been confronting the House of Commons. It was very severe at the time when the "not genuinely seeking work Clause was operating, and consequent on that the Labour Government of 1929–31 abolished what was known as not genuinely seeking work. Following its abolition, most people thought that local authorities throughout the country would be largely relieved of the local burden of rates. That was partly true, but only partly. What happened subsequently was that the House of Commons and the country were faced with a situation arising out of the previous legislation, which neither the House of Commons nor anyone in the country actually foresaw. The Ministry of Labour, who were then running that section, came along and invented what had been in the minds of no other persons but themselves. They invoked a section of the Act and worked it in a way that nobody else ever dreamt would have happened. They invoked what is called "not normally in insurable employment." Hitherto, this had been limited to a well-defined group of people. It was confined to two sections, persons over the insurance income, or people who had been employers in a small way of business. Outside that group "not normally in insurable employment" had never applied to anybody.

Nobody ever expected that on the North-East Coast, with all its poverty arising from the shipbuilding stagnation, in the mining areas, in every part of the country where men had been out five or six months, these men were to be told that they had normally ceased to be insurable workers. Nobody ever dreamt that these men would be told that because of the terrible conditions of unemployment—and the right hon. Gentleman the Member for Hillhead (Sir R. Home) rightly said unemploy- ment was not a local but a national issue—they were not normally insurable. The Government have made it worse than a local condition; they have made it an individual condition, because they say, in effect, that because a man had reached, usually, the age of 50 and was living in an area that was going through hell he as an individual was responsible, because they punish him by saying that he was not normally in insurable employment. If you go back over the figures you find that for the 12 months following the "not normally insurable" qualification the figures went up by almost eight times. The section of the Act had been used and worked in a way that nobody ever thought could have happened.

The "not genuinely seeking work" Clause is ended. Since then other legislation has added to the burden of the Poor Law authorities. I do not want to be controversial here, but the Members of the Labour party must also accept a share of the responsibility. It has been said that the burden was raised in the year following the standard year that the Minister took. I think the Minister took the standard year as 1932–33. Is that the standard year?


; That is the year.


As he said quite rightly, the figures of the following year rose, and he contended that that meant a concession, to some extent, to the local authority, although I do not quite see his point in that connection. Why did they rise? This House—not this Parliament but a previous Parliament—for good or ill passed what was known as the Anomalies Act. Let us leave out what I would call the cant and humbug about administration. It was to deal with four classes of people: one was married women, one was seasonal workers, one was intermittent workers and the fourth section was really meant for short-time workers, though, in fact, it had no effect. The fourth I leave out, because in actual practice, due to an Amendment of mine which was carried, it was ineffective. The seasonal workers became wholly a charge on the Poor Law because they had no means; they came on to standard benefit, or what is now called transitional payment, extended benefit or uncovenanted benefit—call it by what name you like. These seasonal workers, who had hitherto under every Government received benefit, suffered more cruelly in some respects than under the means test, because in theory, although I never accepted it, it could be argued that if a man had £10,000 a year he could not have any benefit.

What happened was worse than the means test. It was an occupation test and was a punishment on a person because he followed an occupation. He might not have a penny but he was punished, without regard to means, merely because of his occupation. The Government substituted, what to me was a horrible thing, an occupation test. In other words, it was not whether a person had means or not, but the occupation from which he suffered severely. I refer to it because it is a problem on the Clyde which is now accute. We have there now, in a town represented by the Secretary of State for Scotland, hosts of disqualified men who work on the summer boats and out in the country.

The reason why the figures rose in the year mentioned as compared with the previous year was that, in addition to "not normally in insurable employment" being rigidly worked, you had the seasonal workers, the married women and what are called the intermittent workers, all thrown on to Poor Law relief. Therefore, the figure rose and the authorities had to bear that burden, and to-day the local authorities are faced with bankruptcy. The hon. Member for Ebbw Vale (Mr. A. Bevan) questioned the right hon. Gentleman the Member for Hillhead using the figures he quoted. Let me say in fairness to him, because we both represent the same City, that these figures have been supplied to us by the Labour party of Glasgow; so do not blame the right hon. Gentleman.


I must correct my hon. Friend. It is true that the Labour party have a majority on the Town Council, but these figures were officially supplied to me by the Town Clerk.


If the secretary of my trade union sends me a statement, he is sending it from the trade union. At any rate these figures were sent by the Town Clerk, and nobody denies them. I deprecated at the time the quarrel between Jarrow and the North-East Coast. I thought it was a terrible spectacle to see both sides in poverty quarrelling about what share they were to get, instead of both trying to get the best share for each. The Ministry of Labour has created this problem by its regulations and Acts of Parliament. The Ministry of Labour is a national service, and therefore in the distribution of money to relieve what is a national problem there should be no discrimination at all. In my view it would be wrong to go juggling with this money in order that Liverpool shall get £100 less and Glasgow £1,000 more. No one would like to feel that he is getting more because someone else is getting less; but at the same time no one will disagree as to the unjust burden which Glasgow has to bear. With a population of just over a million Glasgow is paying £400,000; that is more than London, and, indeed, more than all the towns in England South of Birmingham put together. Is there anyone who can defend such a position?

I want to put a specific question to the Secretary of State for Scotland. It arises out of a conference which I attended some time ago, of representatives of local authorities at the Caxton Hall. There were present at that conference representatives of every depressed area, and at that meeting it was said quite definitely that a promise had been given by the Government to relieve them from the earlier date. I questioned the person who made that statement at the conference, and he said that in his presence, and in the presence of the Director of Public Assistance in Glasgow, who is now a member of the Unemployment Assistance Board, the Under-Secretary of State for Scotland, Mr. Skelton, definitely, specifically and without qualification promised the earlier date.

The SECRETARY of STATE for SCOTLAND (Sir Godfrey Collins)

Can the hon. Member give me some idea as to the date when the statement was made?


It was on or about the 10th of April.


There need be no dispute on the matter. The hon. Member is quite correct. In my hearing—


I misunderstood the Secretary of State, but I think I now realise his point. I am referring to a statement made at a meeting on or about the 10th of April, but the person who made the statement did not say the date on which the Under-Secretary of State made his statement. He said that it was made in the presence of the Director of Public Assistance for Glasgow, and that he could vouch for the statement being made, that the Under-Secretary of State at a private conference deliberately promised that the earlier date would be the date at which the Act would operate in Glasgow. I remember also that the hon. Member for the Scotland Division (Mr. Logan) asked whether he could use the statement in public, and in reply the representative said that they had come to the end of their tether in negotiation and that they were now going to state the facts publicly, and that the hon. Member could use the statement.

I now ask the Secretary of State for Scotland whether this earlier date was or was not promised by a responsible official of the Scottish Office. The Under-Secretary of State for Scotland is in some respects a more important Under-Secretary than any other, because he is in charge of a number of departments in Scotland and discharges the duties of the Secretary of State. The words of the Under-Secretary of State for Scotland are, therefore, worthy of serious attention, and it has been said that he quite definitely said that the Government were going to give the earlier date. What is the Secretary of State's reply to that?

I am not going to quarrel on the question of rates; I am much more worried about the treatment of the unemployed than I am about rates, but these matters cannot be separated from the general administration of unemployment insurance. At the present moment local authorities are over-burdened with heavy rates and cannot develop their ordinary normal work. There is the call of child welfare, the call of the unemployed, and the crushing burden of the rates. The proposal now is that the debt shall be funded, I think for 10 years in Glasgow and for five years in other parts. They will have to pay the interest on the money. I do not want to throw anything into the holiday spirit which is now abroad, but I think it is almost hellish that we should be discussing this dreadful poverty in the House of Commons to-day when within a stone's throw wealth is being spent almost without limit. The tragedy behind all this is not the amount of money but human needs and suffering. Every pound represents human suffering. It is easy to find money for displays, but we have to come and beg for a few miserable pounds to help human beings.

This Bill does not meet the problem at all. It is said that local authorities should pay something. Why? Surely they are now going to be relieved of this problem; surely they are not to go on meeting it for ever? I am sick and tired of platform platitudes about helping the unemployed and holding out the hand of fellowship. I do not want platform platitudes, but practical assistance. I want the Government to transform their speeches into actual practice and to give to these down-trodden authorities a chance of again rearing their heads.

5.28 p.m.


The hon. Member for Gorbals (Mr. Buchanan) has drawn a picture of the tragic position of our people, but he has omitted to state what is undoubetedly the fact, that in this country those who are suffering from unemployment have received, and are receiving, from this House in the way of housing, old age pensions, unemployment insurance, health insurance, and through our marvellous social services, greater assistance than is the case in any other country. The provision which this country is making for these people is greater to-day than in any country in the world. In the picture he draws of the condition of the people and the country he must give credit to this House and to all parties in this House for what they have done. We are all conscious of the poverty which exists, and the hon. Member well knows that this House for many years has addressed itself to this problem in a keen desire to improve the condition of our people. I remember only a few weeks ago an hon. Member on the opposite side saying there has been a complete revolution in the social conditions of our people during the last 25 years. I know the hon. Member feels keenly on this subject, and so do we all, on this side as much as on that, but I am not proposing this afternoon to deal with the Bill which has been explained in detail by my right hon. Friend the Minister of Health.

I am anxious to address myself to the question raised by my right hon. Friend the Member for Hillhead (Sir R. Horne), for he has opened to-day in this Debate an attack on the broad front that Scotland, and Glasgow in particular, has been unfairly treated by His Majesty's Government in these matters during the last few months. As hon. Members will recollect, the grants that we have been discussing represent the difference between, firstly, the estimated amount which the local authorities would have saved from 1st March onwards if the transfer to the Unemployment Assistance Board had taken place, and, secondly, the estimated contributions which would have been payable by them to the Unemployment Assistance Board under Section 45 of the Unemployment Act, 1934, if the second appointed day had not been postponed.


If the right hon. Gentleman is now going to deal with figures and give his point of view, will he deal with the observations of the right hon. and learned Member for Hillhead (Sir R. Home) with regard to the disproportionate amount of the allocation which Scotland is receiving?


That is the very point that I am coming to, and I hope to show that Scotland has received a fair deal. [An HON. MEMBER: "NO!"] I will try to show that, and that the amount that Scotland, and Glasgow in particular, is receiving to-day is far greater than many hon. Members suppose.


That is what we want.


As regards the first point, I am speaking on a subject which interests not only Members in this House but is of great interest to all local authorities in Scotland. It has been agreed, and I am sure hon. Members opposite will agree, that this should be calculated by reference to the corresponding actual expenditure incurred by the authorities in the months of December, 1934, and January and February, 1935. These are winter months, when expenditure on relief is likely to be higher than in any other three months in the year. The choice of these three months will, therefore, probably prove to have been a good bargain for Scottish local authorities, and this appeared probable at the time, for indeed since the 1st March the average weekly expenditure by local authorities in Scotland as a whole on able-bodied relief shows a reduction of about 4 per cent. as compared with the average for the three months referred to, and there is likely to be a further fall during the summer months.

As regards the second point—the contributions which would have been payable by local authorities to the Unemployment Assistance Board under Section 45 if the second appointed day had not been postponed—there are still one or two points remaining for discussion with the Scottish local authorities. It is, however, clear that the calculation of contributions on the basis laid down in the 1934 Act, namely, the expenditure in the year 1932–3, is very favourable to Scottish authorities. Expenditure in 1932–3 was much less than at present, and if the contributions had been based on this year's expenditure instead of on that of 1932–3, Scottish local authorities would have had to pay some £550,000 per annum more than they will in fact have to pay.

Scottish local authorities will accordingly obtain repayment on a favourable basis for the expenditure imposed on them by the postponement of the second appointed day.


My right hon. Friend recognises that the same applies to England.


I gave an argument to show that the basis of those three months has turned out to be peculiarly favourable to Scotland, and we thought that at the time. The contributions required to be made by those authorities towards the State scheme of unemployment assistance will represent only a very small percentage of the total cost of assisting the able-bodied unemployed. As stated in the explanatory memorandum and in the Financial Memorandum, Scotland's share is not, as it would be under the Goschen proportion, 11/80ths, but 32/80ths, or a total of £1,600,000. It has been contended by Scottish local authorities that their contributions under Section 45 of the 1934 Act would be less if the £500,000 grant to distressed areas had been allocated between England and Scotland according to needs or according to the unemployment in their areas, and that Scotland has been unfairly treated in this way. That contention, as put forward in a memorandum submitted by the Corporation of Glasgow and referred to in this House this afternoon by my right hon. Friend, is that allocation in proportion to expenditure on able-bodied relief would have given Scotland £189,000 instead of £60,000.

The figures quoted in the memorandum cannot, however, be accepted as affording a fair comparison between the relative burdens of authorities in the two countries. The basis is wrong. They represent, not the whole cost of able-bodied relief, but only expenditure on outdoor relief. It is not, therefore, a comparison of like with like, for all who know, as my right hon. Friend and my hon. Friends opposite know, the circumstances axe aware that in Scotland the relief to the able-bodied is almost entirely in the form of outdoor relief, whereas in England an appreciable amount of relief is given in indoor relief, in institutions. Accordingly, allowance must be made for this factor before any true comparison can be drawn betwen the two countries. The analogy, therefore, breaks down. In fact, it is not a comparison of like with like if allowance is not made for the fact that we grant outdoor relief in Scotland to the able-bodied poor and whereas in England, not only do they give outdoor relief, but indoor relief as well.


I think the Scottish Members would like some information to show the difference in cost that actually exists between the English and the Scottish local authorities in dealing with unemployed in institutions.


I am sorry I have not the figures, but my hon. Friend knows that in England indoor relief is given.


What is the figure?


I have not got it at the moment.


The right hon. Gentleman says that the comparison adduced by the right hon. and learned Member for Hillhead (Sir R. Horne) and my hon. Friend is not fair. He makes that dramatic statement. Will he give us a fair comparison, introducing both elements, indoor and outdoor relief, as between Glasgow and, say, Birmingham or any other English city?


Will the right hon. Gentleman state, with regard to the £189,000 quoted by my hon. and learned Friend the Member for Hillhead (Sir R. Horne), how far wrong that is?


I have no desire to shirk the issue, and if at the end of my remarks I can give figures, I will. In July, 1933, when proposals for the distressed areas grant were considered, Scotland's unemployment rate, taking the country as a whole, was 8.6 higher than the English rate, although there were many areas in England, especially in Durham and South Wales, where the unemployment rate was much heavier than the prevailing rates in Scotland and where the need for special assistance was probably greater than in Scottish areas. The hon. Member quoted Durham. In Durham at that time the unemployment rate was 39.6 per cent.; in Glasgow it was 28.7. The right hon. Gentleman quoted South Wales. The unemployment at Merthyr Tydfil at that time was 55.1, while in Glasgow, as I say, it was 28.7. Had the £500,000 been allocated in proportion to the numbers of unemployed in the two countries, Scotland might have received about £80,000, in place of £60,000.

When the grant was under consideration we had, however, to examine the whole circumstances and to bear in mind, not only Scotland's heavier rate of unemployment, but also the very important fact that only a few months previously, in connection with revision of the block grant, the Exchequer had been called upon to find £450,000 of new money—£350,000 for England and upwards of £100,000 for Scotland. If the Goschen equivalent had applied, Scotland would have received only about £54,000 extra, while in fact she received £100,000. This increased Exchequer contribution was due to increased expenditure by local authorities, largely on relief of the able-bodied unemployed, and so far at least as Scotland was concerned, the whole of the additional Exchequer money went to areas with a high rate of unemployment, this being the result of the formula for the distribution of the block grant which contains as one of its factors a heavy loading in respect of unemployment.

Taking the distressed areas grant and the block grant money together, Scotland received £160,000, as compared with England's £790,000. The Goschen equivalent would have been 11/80ths of England's share, but instead Scotland received 16/80ths, a considerably higher proportion, which affords no justification, I suggest, for any complaint of unfair treatment of Scotland.

Now let me come to another matter. I propose to deal with the particular case of Glasgow, because it interests many hon. Members and the main attack on the Government on this whole question has come from Glasgow. First, Glasgow has benefited greatly from revision of the block grant. During the first fixed grant period the Glasgow percentage of loading in respect of unemployment was 48.4. For the second fixed grant period it was upwards of 123. This means that as from 1933 Glasgow, because of her high rate of unemployment, received no less than £108,000 per annum of additional Exchequer money, which she will continue to enjoy until 1937, when the next revision of the block grant takes place, notwithstanding that in the interval her expenditure will have fallen very materially, first, by reason of the transfer of expenditure to the Exchequer under the Unemployment Assistance Act; and, secondly, on account of reduced unemployment. In considering the present position therefore, it is necessary to keep in view what Glasgow has already gained and will still retain under the operation of the block grant system.

Now I come to the contributions. It should be remembered that, in common with all other authorities, Glasgow's contribution under Section 45 of the Act of 1934 is based on expenditure in 1932–33, and since then her expenditure has greatly increased. In the result, the contribution in the case of Glasgow will not be 60 per cent., but will be only about one-third of the current transferred expenditure.


What is the percentage?


It works out this year that her contribution, because of the new basis, will be about one-third of her current transferred expenditure.


In one part of his statement the right hon. Gentleman used a percentage basis and then gave an entirely different basis. Can he give us a comparable percentage?


I am endeavouring to show that because the expenditure in 1932–33 was chosen as the basis, Glasgow's contribution this year does not work out at 60 per cent., but at one-third of her current transferred expenditure. As regards benefits which would accrue to Glasgow and every ratepayer in Glasgow through the Government Act of 1934, the benefit on account of transference on expenditure to the Unemployment Assistance Board will amount to approximately the sum of £1,000,000, namely, £980,000—a very much greater sum than in the case of any other city in the kingdom. Hon. Members opposite may complain that the Government have not done more in this matter, but if the National Government had not passed the Unemployment Act, 1934, that cheque for £980,000 would not be transferred to the Corporation of Glasgow. For years hon. Members opposite have urged that the whole cost should be transferred. Here is a Government which transfers nearly £1,000,000 of national money from the Exchequer to the Glasgow Corporation. The corresponding benefit in Liverpool is estimated at £750,000, in Sheffield at £155,000, in Birmingham £20,000 and in London £250,000. Glasgow, where the complaints come from, is to receive in the course of the present year a cheque for £980,000 as a direct result of the Government's Unemployment Act.


Surely the right hon. Gentleman recognises that that is because her need is greater. There is no City of comparable size in this country which has had so much calamity as Glasgow. The only other city whose numbers are almost identical is Birmingham, which contributes only a miserable sum of £28,000 to the Assistance Board, against the £128,000 of Glasgow.


I suggest to my fellow-countrymen that it is not a bad bargain for Glasgow to pay eleven-fold or even, to take the right hon. Gentleman's figure, fourteen-fold in order to receive forty-nine-fold benefits.


It is not a payment.


It is a payment from the Exchequer to relieve the burdens in Glasgow. If the National Government had not passed that Act, that cheque would not be paid to the Corporation of Glasgow. I go further and say that if the Corporation of Glasgow so desire they can reduce the rates to every ratepayer in Glasgow by 1s. 8d. in the £—a reduction entirely due to the action of the National Government in shouldering such an enormous part of the cost of able-bodied relief. My right hon. Friend the Member for Hillhead stated that the system had created inequality. I gather that he agrees that some portion of the burden should still remain on the local authorities. If I understood him correctly, he does not object to some 5 per cent. of the burden being left with the local authorities. I come now to what is left of the burden. I would observe that of the total cost of relieving able-bodied persons coming within the scope of the Unemployment Assistance Act, 1934, the Government will, in Glasgow, meet 95 per cent., if regard be had to the fact that no adjustment is being made on the block grant in respect of the transferred expenditure, leaving only 5 per cent. to be borne by Glasgow.

I deprecate in the strongest terms the suggestion that Scotland is unfairly treated by the Exchequer, and that her interests are not adequately protected in respect of unemployment relief. If we take the largest single grant paid to local authorities, it will be found that in Scotland the grant represents 25.8 per cent. of the total rate and grant-borne expenditure of local authorities, whereas in England the corresponding figure is 23.2 per cent., a difference of 2.6 per cent. in favour of Scotland. The question whether Scotland should receive £60,000 or £80,000 from the distressed area grant, seems to me a very small point in comparison with these large benefits which the people of Scotland, and especially the ratepayers of Glasgow, will receive from the sums which the Government have found from the National Exchequer to meet the cost of the relief of the able-bodied. I say nothing hero to ray Scottish colleagues of the fact that the Post Office might say that because of the heavy cost of delivering letters to the Outer Hebrides the rates should be raised, but let me remind them of the extra sums that Scotland gets under the Housing Acts and suggests that if a strict analysis is made between what Scotland is entitled to get and what she does get, it will not be an advantage to the people of Scotland.


The right hon. Gentleman should be defending Scotland, and not attacking Scotland.


If anyone thinks that Scotland with an Exchequer of her own would find her hardships lightened, he is committing a grave error. I have endeavoured to deal with the point whether Glasgow has been fairly treated, and also with the larger point whether Scotland has been fairly treated by the National Government under the block grant system. I hope I have shown that she has had a fair deal, and that she should have no reason to complain that she has not received anything but her full share.

Now I come to the important statement made by my hon. Friend opposite that the Under-Secretary had said that the appointed day would come into operation at an earlier date. I have been endeavouring to trace that statement, and I am glad that my hon. Friend has given me the opportunity of dealing with the story—I hope for the last time. A communication was sent to Glasgow Corporation by me asking them to substantiate the statement, and both the Under-Secretary, whose illness we all deplore, and the Secretary to the Department of Health, who was with him on that occasion, were asked if they remembered any such statement. The Glasgow Corporation could not produce a scrap of evidence that the statement had been made. My hon. Friend the Under-Secretary of State denied it emphatically, and the Secretary to the Department confirmed the denial. I, myself, in July, before the Glasgow budget was made up, stated categorically that the appointed day would be after the House met for the autumn session, that is, about two months after that statement was presumed to have been made. During the last six weeks I have taken care to put myself in communication with Glasgow to trace that statement, and, speaking here as a responsible Minister of the Crown, I state definitely that my hon. Friend never made the statement and that if he had made it, or thought he had made it, no responsible person in Scotland in view of my statement which was made within two months, would think that the appointed day could be earlier than the time I mentioned. The statement that the appointed day would be fixed at an earlier date has created false hopes that the burdens of local authorities would be lightened. I am grateful to my hon. Friend who raised the point to-day, and I hope that we shall not hear it repeated on any platform in future. I have endeavoured to show that we are facing this situation as a whole, that Scotland has no cause to complain against His Majesty's Government, and, further, that if this Government had not put the finances of this country in order, and had not faced an awkward situation with courage and determination, the cheque which is going to the Corporation of Glasgow this year would not have been £1,000,000.

5.59 p.m.


I should not like as an English Member of Parliament to intervene in a discussion of Scotland to which I have listened with considerable interest. I should like to say, however, how glad I am to hear what the Secretary of State has said with regard to the report of the meeting of 11th April. It is clear to those who have studied the facts from the start, that there was never any commitment of any kind, or even any suggestion from Members of the Government. I have listened to what the right hon. Member for Wakefield (Mr. Greenwood) said about the speech of my right hon. Friend the Minister of Health in 1933. I was abroad at the time that speech was made. When I arrived home I was told by some people that the Government were going to take over the whole responsibility of the unemployed, and I was very anxious to find out how far that statement was true. It is perfectly clear that there was a misunderstanding from the start, and, as has been definitely stated by the Secretary of State for Scotland, and as the Chancellor of the Exchequer and the Minister of Health have made equally clear on several occasions, the statement was totally inaccurate, and I think we should now get rid of it even for debating purposes. I had an opportunity of reading the speech afterwards and of ascertaining what the facts were, and I think we can dispose entirely of the idea that was then prevalent.

But there is a question in connection with the delay as to the Bill coming into operation which has not had all the consideration which it merits. It has been admitted all round that the three months, December, January and February, were three heavy months, that an extra heavy burden was cast upon the local authorities during those months such as had not been expected. I am voicing the feelings of a large number of Members, not merely Members of the Opposition, but of large numbers of supporters of the Government, in saying that that is a point which ought to have been taken into consideration. The Minister of Health, in his charming way, disposed of it as something which we need not think about now as far as the cash is concerned, but it is within the recollection of the House that when the Chancellor of the Exchequer presented his Budget he spoke in deeply sympathetic terms of the distressed areas, and indicated a desire to help, and here is an opportunity of putting right a little matter—a small matter to the country as a whole but a vital one to the districts in question. I hope that we have had the last "No" from the Government benches on that point but not a final answer. I admit that that is not a point which is directly before us in connection with the Second Reading of this Bill, but it does come up under the arrangements which are being made.

The Bill is, as I venture with great respect to remind those who have been speaking, definitely and clearly a temporary Measure. It has nothing to do with any permanent settlement. If it had, one would probably have a great deal more to say about it. What it does is to carry into effect an agreement which has been arrived at with the local authorities, the first point under it being the payments during the next six months, which are based on the very fair arrangement arrived at between the Minister and the local authorities. When the Secretary of State gave us figures just now for Scotland, incidentally he threw in figures for England, and I think his remarks were very necessary, because from what I know of the feeling in certain parts of the country I do not believe that anyone realises the enormous benefit which this arrangement will confer on the local authorities. It is no use people complaining that nothing has been done.

The right hon. Member for Wakefield spoke as though what had been done so far was almost a criminal thing, I have no recollection of any Bill being brought forward by the Government to deal with this question when he was Minister of Health, and it has been left to this Government to take its courage in both hands and to make a liberal and generous provision for a certain type of unemployment. I am not quite clear that the arrangement has not left a loophole for some, but at any rate it is a valuable provision that has been made, and I still feel that a large number of local authorities have not yet fully grasped all that the figures mean. I know that my own city of Liverpool does not yet grasp or understand the figures which are given by the Government Departments.

I have it definitely from the Government Departments that in the case of Liverpool this arrangement—without dealing with transitional payments—will result in the Government taking over 95½ per cent. of the liability. I am also informed definitely by the Treasury that if we also deal with the transitional payments the total percentage of liability which the Government are taking over in the case of Liverpool is 97¾ per cent. I have that clearly and definitely from the Government Departments. Let us look over the country as a whole and see what the benefits are which this Bill has brought, because there has been much confusion, a lot of dust has been created and clouds have been cast over everything.

I do not believe that hon. Members who go about the country abusing the Government realise what the local authorities are getting and what they are going to get by this arrangement. It is an arrangement for which we ought to be grateful. The spread-over has been treated with scorn and contumely by the chief spokesman of the Opposition, but I would remind the House that the suggestion for that came from local authorities and not from the Government, and it is just as well that we should understand on which leg the boot ought to be put. It is quite true that the local authorities did not want it if they could get an increased grant, but when their hopes were cast down in that direction they preferred this spread-over to being left in the lurch altogether, and the Government agreed to the spread-over. I still hope the Government will see the reason and fairness of giving some additional grant. I have heard some people say that we are asking too much, but we are not discussing what we have got for the future but the hard position in which we were at the end of last year. In the main it is important that we should realise that the Bill makes good the promises and undertakings the Government have given, although we still have a feeling that we might have been more fairly treated in one matter.

That is all I wish to say in support of the Second Reading, but I have a word to offer on the Amendment of the Opposition. It is an absolutely sweeping Amendment. The Opposition want to take over everything nationally. There is no question that the great bulk of unemployment to-day is a national responsibility, and the Government accept that view. I speak for Liverpool, and there are other hon. Members who can also speak for Liverpool and for Glasgow and the other ports. Those ports are the nerve-end of this country's commerce overseas, and when world trade is shut down it is the people in those ports who suffer most, not because of any fault of their own but because of the national situation.

We have to-day an inverted state of affairs. A few years ago the nerve centres were the other way round. To-day it is the Midlands and the South that are reaping the benefits. It is a national problem and the Government have accepted the main principle. But there must always be a certain amount of local responsibility. I do not agree with the suggestion that because a central board is to deal with these questions in the main that, therefore, all responsibility should be lifted from the local authorities. I believe the local authorities would feel in that case that they were being outrageously put on one side. After all, there is such a thing as taxation and representation going together, and we must leave a certain amount of responsibility with the local authorities. I feel that those who think over the situation carefully will accept what the Minister has said and agree with it—except, perhaps, for debating purposes. In conclusion, I would like to bring the mind of the House back to the speech with which the Debate was opened, and ask hon. Members to note the excellent provisions there are in the Bill, which I feel sure will be better understood by the people in the next few months than they are to-day, when a judgment, which in my view is premature, is being formed as to the possible effects of the Measure.

6.13 p.m.


If it had not been for the Scottish intervention, I think it would have been difficult for the hon. Member for West Derby (Sir J. Sandeman Allen) to have made his speech, because it is in complete opposition to the main tendency of the Debate before the narrow, though important, issue affecting Scotland was raised. The Minister for Health based his case for the Bill on three main principles. To the first of those principles no exception can be taken. The Bill is necessitated by the postponement of the second appointed day under the Act of 1934. I was somewhat surprised to hear the hon. Gentleman who has just spoken saying that it was a temporary Measure. It is temporary only in so far as the period of ascertainment for the allocation of the grant is concerned. It makes permanent as, indeed, the Act of 1934 made permanent the allocation of responsibility between the local authorities and the State. That was the main part of the Measure of 1934 as regards local authorities; so that part is not temporary. It is only a temporary Bill because the second appointed day cannot be fixed until the Unemployment Regulations are brought forward. With that position we do not quarrel. Something had to be done, and the only complaint the local authorities have in respect of it is that there has been too much delay. It would have been highly desirable had this decision been made earlier, because the local authorities would have known where they stood and a great deal of unnecessary local embarrassment would have been saved. The local authorities would in many instances have been able to prepare their budgets with certain knowledge of what was expected of them.

The second point made by the right hon. Gentleman was in seeking to justify the allocation of two-fifths to the State and three-fifths to the local authorities for maintaining the able-bodied unemployed still chargeable to the local rates. He used precisely the same argument as was used by the hon. Member for West Derby, that it was always considered a great principle of legislation in Great Britain for some measure of responsibility to rest with the local authority, that it was undesirable for a local authority to escape responsibility entirely and that there was still some virtue in the principle of no taxation without representation. The hon. Member for West Derby has surely forgotten the Insurance Act of 1934, because the three-fifths will be collected from the local authority and paid to the Board, and upon that Board local authorities will have no representation whatsoever. Furthermore, in the administration of the Board the local authorities have no place. How does the hon. Gentleman defend his principle that there should still be divided financial responsibility between the local authorities and the State, when the States takes over the whole of the administrative responsibility?

Surely that completely answers the hon. Gentleman's proposition, and it also answers the proposition of the right hon. Gentleman the Minister of Health. I understand why it would be extremely unwise for the State to put unlimited funds at the disposal of the local authority, And to accept the administrative decisions of the local authority, and it is in order that that might not be done that the financial relationship of the State to the local authorities in this country has been so adjusted that if the State has to spend an additional sum of money the local authorities have to spend an additional sum in proportion. That is not a position that exists at the moment in this matter. There is only one ground upon which divided financial responsibility may still be defended, and that is that it is desirable that the local authority should carry some of the burden because it still lies within the power of the local authority to reduce the burden. The hon. Member, in the latter part of his speech, made it clear that unemployment lies entirely outside the power of a local authority to relieve.


Not entirely.


It would be interesting to discover to what extent a local authority is responsible for unemployment. The point of every speech from the Government benches and from the benches of the Opposition has been that unemployment is a condition arising from causes outside the control of any territorial area. If financial provision is not made necessary by the local authorities still having administrative responsibility, and if unemployment is something which occurs outside the power of the local authority, where is the case for the local authority having to make any contribution for the maintenance of able-bodied persons? The only case is a historical one. It has always been contended that the able-bodied poor should be chargeable to the local rates. They always were. The State never made a contribution to the poor rate. It was the case, until unemployment insurance came to be established, that relief of poverty, no matter how arising, was the responsibility of the local authority and the local rates. No one contends against the strength of that historical principle, but surely the principle is outweighed by the two considerations that if you compel local authorities to carry a portion of the burden of unemployment merely because it was established by Queen Elizabeth that that should be so, it leaves out of account the fact that the distribution of unemployment in the modern world brings about very serious social dislocations; and that unemployment arises adventitiously, from place to place, and cannot be remedied locally. One local authority might be called upon to bear a burden of unemployment not only out of proportion to its power to do so, but out of proportion to any equitable distribution of the burden on the rates.

I submit that the second proposition has not been established, and that a case has not been made out for allowing any proportion of the maintenance of the able-bodied poor to rest upon local authorities, except that weak historical case to which I have alluded, which was referred to by the Royal Commission on Unemployment Insurance and which has been mentioned on several occasions before. It is hard lines that the people in distressed areas should be called upon to pay hundreds of thousands of pounds a year in tribute to a moth-eaten historical principle entirely out of accord with the realities of the world to-day.

The problem of the distribution of unemployment over the local authorities of Great Britain has received at least some attention at the hands of the Government. The Minister of Health made a speech in 1933 on the subject, and on the occasion of the Debate which then took place the hon. Member for Sunderland (Sir L. Thompson) moved an Amendment which was accepted by the Government. The hon. Member made a speech the burden of which was that the obligation for carrying the able-bodied poor should now be discharged by the State.


That is subject to the careful words used by the Minister at that time, and which implied after financial adjustments. When the Minister made that statement I had distinctly in mind that it related to the financial relations necessary to cover the local authorities.


It is impossible to reconcile two statements like these: (1) the State should accept the responsibility of maintaining the able-bodied poor, and (2) there should be some financial readjustment that leaves some of the burden upon the local authorities.


Might I ask the hon. Member for a definition? What does he mean by "unemployed persons"? Does he imply the definition in the Act of 1934, or something wider?


I was using the wider and embracing term of unemployed able-bodied poor not chargeable to the unemployment scheme.


Yes, but our discussion on the Bill is related to the provisions of the 1934 Act.


From 1st March this year, if the second appointed day had remained as 1st March, the Unemployment Assistance Board would have accepted entire responsibility for the whole of the able-bodied poor, with the exception—


No; responsibility for the assistance of those able-bodied unemployed within the scope of Part II of the Act, which is really the point.


If the hon. Member had not interrupted me he would have noticed that I was saying "with the exception."


It is not clear.


Everybody knows that the overwhelming mass of the able-bodied unemployed of Great Britain falls within Part II of the Unemployment Insurance Act. From the point of view of the authorities, the number of persons who can still be chargeable to the local authorities, that is to say, those whose salaries previously took them above the national insurance limit, form a negligible burden upon the rates. I think the hon. Member is quibbling. Would he dispute that the three-fifths still left with the local authorities represent the burden of carrying those who are outside the scope of the unemployment insurance scheme?


I think I could very well illustrate that. It has been said that the average of relief is 95 per cent. I should say that for many local authorities it is almost 100 per cent., and that that could be confirmed by statistics. I think to-day that the full 100 per cent. is being borne by local authorities.


The hon. Member has not answered my question. In 1933 the House accepted an Amendment, moved by him I gather in order—I will not say "in order"—but its effect was to rescue the Government from a very embarrassing situation. The purport of the Amendment was that the able-bodied poor should be chargeable to the State. The Unemployment Insurance Bill of 1934 was not then on the stocks. The definition which the hon. Member is drawing between those able-bodied who are outside Part II and those who are inside Part II arose subsequently to his Amendment, and did not exist at the time of his Amendment.




I would give way once more to the hon. Member, but—


The hon. Gentleman has made a direct challenge to me.


All hon. Members know that in 1933 the Unemployment Insurance Bill of 1934 was not before the House. Therefore, the language "ablebodied poor" could have referred only to persons unable to find employment, and who were chargeable to the poor rate.


Distinct reference was made by the Minister to future legislation.


The hon. Member may have been in the confidence of the Minister, but I suggest that even the Minister did not know in 1933 the text of the 1934 Bill. It had not been framed, at least as far as the House was concerned, and the House accepted the definition of the able-bodied poor contained in the hon. Member's own Amendment. If the hon. Member is able to make a distinction between the able-bodied poor who are inside and the able-bodied poor who are outside Part II, neglecting those who are outside National Health Insurance benefit, I would ask him again, does he, therefore, suggest that the three-fifths which is still left to the local authorities represents the cost of maintaining that category of persons who are not included in Part II of the Unemployment Insurance Act? If he does not, the present situation is a violation of the principle which he himself moved in 1933. The Minister of Health at that time, and the hon. Member himself, deceived the House of Commons. Certainly he did not deceive us all, because I remember pointing out at the time that subsequently they would be able to shelter themselves behind the ambiguity of the language they used, but the impression they left upon the House and the country was that the principle of responsibility was going to be accepted in the Unemployment Insurance Bill. I spoke to hon. Members sitting on the Government Benches at that time, and they castigated me for casting doubt upon the intentions of the Government—


I did.


The hon. Member was angry with me for saying that the right hon. Gentleman was misleading the House, but subsequent events have confirmed my impression. The third principle upon which the right hon. Gentleman has attempted to justify this Bill is that the local authorities are better off under the Bill than they would have been if the 1st March had remained the second appointed day, and he gave a number of figures to prove it. It is astonishing to hear hon. Members say that the Labour Government of 1929–31 took no step at all to deal with this problem. Figures have been given in this House, and they have never been denied, showing that by 1930–31 the number of able-bodied poor chargeable to the Poor Rates in Great Britain had fallen to a figure lower than it had ever reached during the previous 10 years.

The administrative effect of the Unemployment Insurance legislation of 1930 was that the unemployed became chargeable to the Unemployment Insurance Fund, and the local authorities at that time made no complaint about the burden of the able-bodied poor, because that burden had been substantially reduced, and indeed, was then very small. But subsequently, between 1931 and 1934 the State threw more and more unemployed on to the backs of the local authorities, and that was done deliberately. I hear an hon. Member say "No," but the Government, under the Anomalies Act, carried out regulations to which the trade union representatives on the Committee set up under the Act could not consent, and they resigned. They quarrelled with the regulations and resigned from the Committee, and the Government carried out the regulations in spite of the disapproval of persons who had to be consulted under the Act.

Over 220,000 people were thrown off benefit under that Act, and under the regulation referred to by the hon. Member for Gorbals (Mr. Buchanan), about not being likely to obtain insurable employment, hundreds of thousands more were cast on to the local rates, so that by 1934 the local authorities of Great Britain were carrying a very substantial burden in respect of unemployment. In 1931, in respect of the able-bodied poor—not the poor generally—they were paying out £193,676, but in 1933–34 they were paying out £589,500, and in 1934–35, £942,889. It is perfectly correct to say that, if 1932–33 remains the standard year, the local authorities will be badly hit. What was happening? The State was transferring from its own shoulders to those of the local authorities the burden of maintaining the able-bodied poor, and under this Bill it is proposed to leave them with three-fifths of the increased burden. The hon. Member shakes his head. Is not that true?




I shall be glad to learn from the hon. Member in what respect it is wrong. If 1932–33 still remains the standard year, they will be carrying a far heavier burden. The Government are able to appear generous at the present time by leaving the local authorities with three-fifths of the burden of which they relieved themselves in 1931, and it is absolutely monstrous, therefore, to use these figures in order to suggest that the Bill represents an actual improvement. In Durham, in 1931, they were paying, in respect of the able-bodied poor, £85,429, and in 1934–35, £228,000, so that this process of transference has been continuous throughout the country, and the local authorities had a very strong case indeed. Even if allowance is made for taking December of last year and the first two months of this year as the standard for the calculation of State assistance to local authorities, they will still be carrying a heavier burden than in 1930. All that has been done is to reduce the burden for the weight of which the Government themselves are responsible.

The statement has been made, I think, by the right hon. Member for Hillhead (Sir R. Horne), and also by the Minister of Health, that the distressed areas have benefited in two ways. It is said, in the first place, that they have benefited because the distressed area grant is still being carried forward, and that, in calculating the responsibilities of local authorities, they are still to have the benefit of the distressed area grant in the sum which is to be calculated. In the second place, it is said that they will benefit because the grant formula has not been reduced as it would have been had full account been taken of the reduction in the Poor Rate. I stand here subject to correction, because I am speaking now without my book, but that is news to me. The grant formula devised under the Local Government Act, 1929, was weighted in respect of three factors—low rateable value per head of the population; the number of children under five years of age; and the percentage of unemployment. It is true that account was taken of the rate poundage due to the Poor Rate, but it is a mistake to suppose that unemployment became one of the factors because of the direct burden upon the Poor Rate of maintaining the unemployed. That was never the contention. The contention was that the existence of unemployment impoverished the resources of the area, and consequently the population formula had to be weighted in respect of that factor. In other words, even if there had been no able-bodied people chargeable to the Poor Law authorities in 1929, it would still have been found necessary and desirable to weight the population formula in respect of the existence of unemployment.

It is, therefore, incorrect to say that the grant formula is not going to be altered, and that therefore the relief to local authorities will be continued. There is no justification in the present position for that statement, but, even if it were the case, there has been no fall in the Poor Rate—it is up. The formula could not have been readjusted in respect of the rate poundage when it was higher. The population formula could have been adjusted in respect of the number of people resident in the area, but that happens automatically When there is a decline in the population, the amount of grant is automatically reduced, and the draining away of population from the North and West is at the moment reducing the amount of money available to local authorities. It is incorrect, therefore, to say that the distressed areas are benefiting under that formula at the present time.

The second point I admit. I admit that the local authorities are having the benefit of the distressed area grant. But it would be folly, and contrary to the facts of the case, to suppose that the burden of the distressed area is represented by the figures read out by the right hon. Member for Hillhead or by the hon. Member for Gorbals. It is quite correct that Glamorganshire and Monmouthshire will pay a greatly reduced sum to the National Board, but the question is, why should an area which is admitted by everyone to be most dreadfully distressed pay anything at all to the Board? To my mind it is really scandalous that hon. Members can come to this House and justify the payment of money on the ground that it is less than was being paid before, while the distressed areas are still left in dire need of funds. One would have thought that the Government, instead of paying lip-service to the distressed areas, would have seized this opportunity of removing the whole burden from them, but instead of that they leave it upon them, and take thousands of pounds from the children in these distressed areas.

We are getting tired of listening to speeches in this House and across the wireless by all sorts of distinguished persons to whom it would be out of order for me to refer to to-day, asking the country to come to the help of the unemployed and deploring the grievous burden of unemployment, while, whenever there is an opportunity for the Government to do something, this is the sort of House in which it is discussed. Whenever something can be done, the House is empty, but whenever lip-service van be given the House is packed. It is really leading the country to the lowest possible opinion of Members of this House when they fail to translate what everybody regards as desirable principles into immediate effect. The burden is still not represented by the sums we have to pay. Monmouthshire is paying a 9d. rate and Glamorganshire a 3½d. rate in respect of Poor Law loans raised between 1921 and 1926. The hon. Member was correct when he interrupted my right hon. Friend and said that there has been precedent for the capitalising of current expenditure. My right hon. Friend was perfectly correct, except in this regard, that the Merthyr, the Rhondda, West Ham, and Chester-le-Street boards of guardians, because they had to carry enormous Poor Law burdens, had to borrow money from the Goschen Committee. When the 1925 Local Government Act was passed, the Poor Law authorities were abolished and absorbed into the counties and boroughs, and they had to accept the outstanding loans which would never have been contracted had the State accepted the principle which it is accepting now. If the Act had been in existence in 1921, those loans would never have been contracted. The depressed areas which had been carrying the burden of unemployment for the longest time had to pay to the State not only the sum to be paid under this Bill, but a rate of 9d. in Monmouthshire, 3½d. in Glamorganshire, and rates, the amounts of which I am not aware, in other parts of Great Britain where loans are outstanding. Hon. Members must not run away with the impression that this is going to relieve depressed areas entirely. It still leaves the nation sucking vitality from the most devitalised areas in the country.

I submit to hon. Members in all parts of the House, without consideration of party distinctions whatever, that the right hon. Gentleman has not made out a case for this Bill, and that the case for relieving the local authorities wholly burdened with unemployment is over- whelming. I cannot find adequate language with which to express my indignation that in my area there are towns with 96 per cent. of the population idle, that workers have been idle for 10, 12 and 14 years, and that this House still proposes to collect out of the pennies and halfpennies of these people sums of money and re-distribute them over the country as a whole. It is a monstrous proposition, and one of which this House ought to be heartily ashamed, when children are going without boots and clothing and are badly nourished because the local authorities have not the means to provide them with these things. If you left this money in those areas, the local authorities would be able to treat the people more generously. It is an indictment of the callousness and heartlessness of this House that it is practically empty, and has always been empty during the last three years whenever there has been an opportunity of doing some concrete act on behalf of the distressed areas. Local authorities do not agree with this Bill, and the right hon. Gentleman misleads the House when he says that they do. The local authorities have certainly agreed, assuming that they had to carry any part of the burden at all, with the formula contained in the Bill, but local authorities still claim—and there is every justification for it—that the Bill leaves them with a burden which they ought not to carry, and, what is even worse, leaves the burden on the weakest in the community.

6.51 p.m.


I do not intend to keep the House as long as I proposed to do when I came into the Chamber, because much that I was going to say has been said, I will not say better, but as well. I suppose that there was bound to be a Bill like this in order to get us out of the unholy mess into which we have got through some grave misunderstanding between the Government and the administrative bodies in this country. I think that the local authorities are more to blame than any one else, and I said so at the Caxton Hall, when they came there in a body and slanged the Government and Members of Parliament, expecting us to sit quiet and say nothing. I got up, and in a few frank, plain, English words told them what I thought about them. The men there—the repre- sentatives of the local authorities of this country—looked apparently sensible businessmen, but if they had had sound sense, they would have gone to the Exchequer and said, "Is 1st October the appointed day or not?" Those men in that room that day, if they had had a business proposal in connection with their own business, would, first of all, have gone to the bank manager before they overdrew their accounts by some thousands of pounds and took the risk of the cheques they drew coming back marked "R.D." They would have gone to the bank manager first before they overdrew their accounts to the extent of thousands of pounds, and would have come to a clear understanding with him. If I had been Chancellor of Exchequer of my town, I would have taken jolly good care to see the parties responsible and ask, "What is the appointed day? Am I right in supposing that it is the 1st October?" Instead, we had nebulous nothings, and all sorts of useless phrases were used, but no definite pledge was given by anyone in authority. Edinburgh does not take 1st October as the appointed day, but Glasgow does. Those who know something of the personnel of the two different corporations may guess why, but that is the fact. It has been said that the local authorities do not agree with this Bill. My friends in my own local authority do not agree with it, but I do in a measure. I am not in the pocket of the local authority, neither should any Member of Parliament be. We are free agents.


Surely the hon. Member ought not to use language like that. No hon. Member can be regarded as being in the pocket of any local authority.


Perhaps the use of the phrase "in the pocket" in this Debate is not very appropriate, and I withdraw it. I am not in the power of any local authority. We beg leave whenever they do wrong to question what they do and complain about them. No doubt we could all give illustrations of what happened in our different constituencies in the delay which has unfortunately been occasioned, and which is the cause of this Bill. At any rate, the Bill is not wholly attributable to the local authorities. The fixing of the second appointed day is on 1st March, 1935, and, in justice to the local authorities, there is something in what they say, namely, that there is something significant about 1st March, which is one month before the close of the financial year. It is very significant to me, at any rate. It has caused additional cost to my council at Gateshead. I have the figures, and I have verified them at the Treasury. The gross amount of additional cost in Gateshead, a depressed area, is £17,212, and if you take off the £5,000—the payment of £1,000 a month for five months—the special grant for the distressed areas in relief of the ratepayers which is not to be expended for any other purpose, it leaves £12,000, or 6d. in the pound from the distressed area. It is a very heavy cost.

I am almost as much concerned about the imponderable spiritual factors which cannot be tabulated in any list of figures. There is the grave depreciation in the physical reserves of our people in the distressed areas. In Gateshead about 40 per cent. of the able-bodied unemployed are dealt with by the public assistance committee, and the reason given by friends of mine in Gateshead whom I can trust—medical officers and others—is that the Ministry of Health inspectors during the test periods have discarded the 40 per cent. of the cost on our able-bodied relief list as not satisfying the requirements of the Act owing to non-insurability or sickness. I will give the gist of the statement: The able-bodied sick are a new charge due to the long depression which has existed, and in consequence the recipients have exhausted all claim to National Health Insurance. It is estimated that the non-insurable persons reached 22 per cent. and the sick 78 per cent. of the 40 per cent stated. That is a very serious state of affairs, but I am proud of the fact that in spite of the long, bitter and hard years, there is so little moral declension in our people. I am proud of the breed to which I belong, but its physical deterioration, the eating up of the physical reserves of the people, that they cannot when they get work easily be fitted for work, is a very serious matter to me. This question is not one of party at all; it is one of sheer humanity and nothing less. It is far beyond any party issue. I do not care whether I get votes for it or not. It makes not the slightest difference to me whether I get votes by any speech I make. The question is whether it is right or just. The Government say that ordinary relief—it has been said by the Chancellor of the Exchequer—has little to do with unemployment. The only sufficient answer is that in 1920 ordinary relief in Gateshead was £155 a week, and it is now 21,162 per week. Comparing Gateshead and Birmingham, the city which the Chancellor of the Exchequer knows quite well, it means £25,500 for Gateshead and £28,000 for Birmingham; in one case a shilling in the pound rate, and in the other a penny in the pound.

I want to plead with the Government seriously to consider and to agree to a 100 per cent. maintenance of all the able-bodied unemployed, without exception. It may be said that there are no exceptions, but there are. You will find the definition of who are the able-bodied unemployed under Section 36 of the Widows' and Orphans' Pensions Act of 1925. I contend that the Government should take over, without any qualifications, all the able-bodied unemployed as a national charge. In my opinion the National Government can well do it, and they would justify themselves more by doing this than in any other way. This is where I differ from the last speaker. He never says, "Thank you" for what the Government have clone. I do. I am very grateful for what has been given, on account, by reason of the block grants remaining unaltered until April, 1937. To take the case of Birmingham again, that city is relieved now by 52 per cent.; that is to say the ratepayers in Birmingham, instead of paying £39,800, are paying £19,300, and they benefit by this Act to the extent of the huge sum of £20,500. Gateshead benefits by 82 per cent.—that is from £48,500 to £8,500, a net gain of £40,000, which is something to be very devoutedly thankful for. I say "Thank you" to the Government for that; and I confute all my Labour opponents in Gateshead by that tangible evidence of what the Government have done. But I do suggest that the National Government could well afford in every way now to make it 100 per cent.

Let us have done with the settlement of this question by formulas devised by senior wranglers. Let us get down to the plain, straightforward proposition that the able-bodied unemployed, who are out of employment not through any local circumstances but owing to the national and world-wide depression, should be a national charge. It is said that gratitude is a lively sense of favours to come. While I am thankful for the benefits received in Gateshead, I ask the Government to do the big thing which might be expected of a National Government, and to give the full 100 per cent. relief.

7.4 p.m.


I find it extremely difficult to follow or understand the labyrinthian calculations and computations made from the Government Front Bench. The figures placed before the House have been so weird and varied that the Government purported to show that 95 per cent. relief has been given to the local authorities. I can well imagine that if the debate progresses on these lines a case will be made out to show that the local authorities are owing the Government something before we come to the Division on this Bill. That is the atmosphere surrounding the case put up by the Government spokesmen. May I address myself to one or two points in connection with the general matter and to answering one or two questions raised particularly by the hon. Member for the West Derby Division of Liverpool (Sir J. Sandeman Allen). He wanted to know why any local authority should have taken 1st October as likely to be the appointed day; and he asked what justification there was for the local authorities doing that.

Many statements have been made in this House to show why the local authorities should have 1st October in mind. A month ago in a similar debate I myself quoted the speech which was quoted by the right hon. Member for Wakefield (Mr. Greenwood) this afternoon. Apart from that, may I ask: Is it not remarkable that the local authorities were practically unanimous in budgeting on the basis of 1st October being the appointed day? Surely their very unanimity shows that there must have been some justification, somehow, somewhere, for municipal corporations from one end of the country to the other budgeting for that particular day. The hon. Member also suggested that Liverpool did not want total relief from the burden of maintaining the able-bodied unemployed. I do not know whether the hon. Member will make that statement in another place, but I can assure him that I speak for Liverpool, and as a Member of the Liverpool City Council I am taking part in this debate to ask for precisely that—total relief from the burden of maintaining the able-bodied unemployed.

From these benches we say that the basic problem is the one which has been stressed and emphasised so many times during this debate—that unemployment, which is a national if not an international burden, shall be a national liability, and that the industrial areas shall not be doubly penalised. In the first place, under present conditions the industrial areas do, of course, suffer a penalty because they are industrial areas. Now, from the point of view of this Bill, they are suffering a double penalty. The burdens they have been asked to bear are altogether disproportionate because there are other areas of the country which are scarcely bearing any share of what is a national burden. These industrial areas find their development and extension retarded and impeded because of the heavy rate charges they are asked to meet. In Liverpool the public assistance rate was increased by 1s. 4d. this year, and the general rate by 1s. Large estates have been acquired in Liverpool and other industrial areas in more prosperous times, and now we are unable to develop those estates because we are not able to attract industries to them, because of the comparatively high rates which have been forced upon us under the Government's policy in connection with unemployment.

Liverpool has been criticised for concentrating too much on the shipping industry, but it has made great endeavours in recent years by the acquisition of these estates to attract those industries which would give us a more comprehensive civic and industrial life. Now we find that kind of development and extension impeded, if not crippled, by the Government's policy on these two matters. We also find in the industrial North that many industries which were born in our cities have now migrated South, simply because the industrial areas are being asked and expected to bear an altogether unfair share of this burden—while other areas are living in comparative affluence because of the inequitable way in which this national financial burden is spread at the present time.

Assuming for the moment that the Government's case that 95 per cent. relief has been granted to local authorities is correct, may I suggest that an investigation might be made, or consultations held between Government Departments and local authorities, to see that the 95 per cent. is received by every local authority. We find that there are some local authorities which are not receiving the same amount of relief or grant as that received by other authorities. In addition to all these points, the costs of poor law relief is increasing. Particularly was that the case in the months immediately prior to 1st March. At the end of 1930 the number of persons in receipt of poor law relief was 976,000, and the figure has risen to 1,432,000. In Liverpool the amount to be raised for public assistance this year is £1,286,000, an increase of £132,000 over last year. This illustration from the experience of Liverpool gives some idea of the amount of the burden which we are discussing to-day. In conclusion, I come back to the only real point that emerges from this discussion, that is, that unemployment, so far as we are concerned—and I think this is common ground—is a national problem and should, therefore, be a national burden. No local authority in any industrial area should be left labouring under the impression and the grievance that it is being asked to pay a double penalty when it is already penalised as an industrial and distressed area.

THE CLERK at the Table informed the House of the unavoidable absence of Mr. SPEAKER from the remainder of this day's Sitting.

Whereupon Sir DENNIS HERBERT, the CHAIRMAN OF WAYS AND MEANS, took the Chair as DEPUTY-SPEAKER, pursuant to the Standing Order.

7.10 p.m.


I think that the attack made on me by the hon. Member for Ebbw Vale (Mr. A. Bevan) merits some reply, and I must excuse myself for not replying to the previous speaker. I have been in this House now for many years, and I have been through many discussions on the relief of the able-bodied unemployed—but the Debate of April, 1933, has become something of an historic event. I had the fortune, as the hon. Member mentioned, to have an Amendment down on that occasion which was accepted by the Government. I always look upon that as the culmination of the great attempt of the Government to take over the charge of the able-bodied unemployed; and it was the first time in the history of this country that any Government had signified its desire of contributing to the welfare of the unemployed in this way. There was no ambiguity in my mind when I moved the Amendment and the Minister made his reply as to what was meant. It was quite clear to me that besides the necessity of financial adjustments there would have to be some form of legislation which was not defined by the Government, and could not be defined then; and that legislation was seen in the 1934 Act.

It is very unfair to use the arguments that the hon. Member did in regard to that position. When the Minister made that statement, he made it quite definitely in a very carefully-worded phrase, having regard to all the complications and all the facts of the necessity of future legislation. I say again that I have no doubt in my mind that the Government have fully implemented practically everything they promised on that occasion. The hon. Member also stated definitely that the local authorities were going to be left with three-fifths of the burden of unemployment.


The hon. Member has mistaken what I said, I referred to three-fifths of the burden of maintaining the able-bodied poor being still chargeable to the local authorities.


That seems to be the same thing and surely the statement about three-fifths is not fair. It must be borne in mind that under the 1929 Act the weightage accorded to unemployment was reviewed three years afterwards and in that second review, as was clearly stated by the Minister, the burden is being carried now by the State. It is also true that throughout the country—with very few exceptions in the industrial areas—the burden of unemployment is less than it was when the second review was made. To that extent, therefore, the industrial areas must be relieved of a burden of unemployment which the Government have distinctly taken over. If we were carefully to analyse the position in our constituencies we should find that there has been material benefit from the Government's legislation. I have gone into this matter in regard to my own constituency, and I find that under the 1934 Act we have been relieved to the extent of 2s. in the £. Under the 1929 Act we were relieved of 2s. 2d. in the £. That is 4s. 2d. in the £, or £165,000 a year. In analysing the position I have borne in mind that the burden of unemployment increases the charge for local services, health services, etc., and having made all these allowances I have to ask myself whether this amount represents anything like the charge for the burden of unemployment in my constituency. I have come to the conclusion, and if hon. Members analyse the position up and down the country they will agree with me, that the Government have fully implemented their pledge of 1933.

What lies in the future I do not know. If hon. Members are going to argue for the taking over by the State of the complete burden of unemployment, that is another question. That will involve the equalisation of rates and it will also raise the question of Government control and infinitely wider questions than we are debating to-night. This Debate does not circle round such a wide range as that. The Debate is concerned with consideration of the fact that the Government's promise was not implemented on 1st March, but later. The Bill deals with the basis on which compensation is made to the public authorities, and the basis is that they will be no worse off under the provisions of the Bill than they would have been if the grant had come into operation on the 1st March. The method is based on the figures of December and February and it is clear that it will be to the universal advantage of the local authorities.

The Bill says that from the grant there shall be deducted such amount as may be determined by the Treasury to be equal to the portion of the annual contributions which would have been payable. Subject to that condition the whole thing will be implemented. Is that deduction fair? I would point out that the distressed areas do not pay 60 per cent. It is 60 per cent. less the special grants, and in most cases it represents nearer 50 per cent. than 60 per cent., which is a great advantage. It was an advantage of £10,000 to us. Taking all these things into consideration and reviewing the matter in a wide and broad sense, it is true to say that there has been no attempt to relieve the burdens of the local authorities as great as in this Bill and preceding Bills. I welcome the Bill and heartily support it, and I would ask the Opposition whether they are going to vote against it. Are they going to decline a contribution for their own local authorities? Let us be fair. I for one am not going to refuse anything. I am going to take every penny I can get, and I welcome what we can get under this Bill.

7.22 p.m.


There is no hon. Member for whom I have a greater personal regard than the hon. Member for Sunderland (Sir L. Thompson), and whatever I may have to say about his speech will be said with great trepidation and respect. In reply to the hon. Member for Ebbw Vale (Mr. A. Bevan), the hon. Member recalled the occasion on the 12th April, 1933, when he had before the House a certain Amendment as a result of which the Minister of Health made a statement, and the hon. Member for Sunderland now says that he had no doubt at the time it would mean all the subsequent legislation, and incidentally, I suppose, this Bill.


I did not say all subsequent legislation. I said that it would necessitate future legislation.


I accept the correction. My hon. Friend went on to say, and I do not seek to dispute it, that he understood all these complicated things. He understands perhaps as well as or better than any Member of this House the trend of this complicated subject, but those of us who are less versed in the matter and who have less experience in Parliamentary forms and language say with equal assurance that when we heard the statement of the right hon. Gentleman we got, perhaps erroneously, a different impression. The impression which we had—looking back upon the context and without seeking in any way to misrepresent anyone on the Front Bench, and being fully conscious of our own shortcomings and inexperience—was that the Government's reference to subsequent financial adjustments in the grant would relate merely to taking from the grant that proportion of money which was applicable to unemployment. It was perfectly obvious that there having been a factor in the calculation relating to unemployment, if the State were going to take over the whole cost they would reduce the grant by that amount. That was the impression which I had. I do not dispute that the hon. Member for Sunderland knew that that was not quite so. If he did know that, I wish that out of regard for our great friendship he had given me that inside knowledge.

This Bill, so far as its context goes, and the very able statement by which it was introduced, seeks to implement the promise of the Government that the local authorities will not suffer from the introduction of the standstill order. In so far as it does that, and it only just does it, no one has any quarrel with it, but the debate in which we are engaging takes a much wider form and centres upon the point as to whether or not the central Government should at some immediate time take over the whole cost of maintaining the able-bodied unemployed. I believe that the overwhelming opinion in this House and the country is that it should do so. Let us consider where we are going in this matter. We have had one piece of legislation after another, one form of calculation after another, periods of grants and re-adjustments of grants, until hardly anyone can carry all these things in his head, and very few people without conscious effort can understand the financial relationship between the local authorities and the central Government. The Government to-day through their official spokesmen have almost admitted the principle, except that if there is to be local administration they say they must make the local authority find something, and the smallest amount that they can ask them to find is 5 per cent. That is the case of the Government to-day, as I understand it.

I wonder whether the position is a correct one. Have we not central administration to-day for the great bulk of unemployment in the country, and yet with that central administration, over which the local authority has no control at all, and will have no control under this new legislation, every local authority has to contribute to the central fund 60 per cent. I use that figure subject to correction, because when we use it we know that it is 60 per cent. less a certain proportion of the grants, and my hon. Friend the Member for Sunderland is probably correct in saying that it may be 50 per cent. or even less. Whether it be 60 per cent., 50 per cent. or 40 per cent. does not matter for the point which I am making. The point is that you are going to make it compulsory on the local authority, which is responsible to its electors, to part with a certain amount of money which it raises year by year from its electors and to pay it over to the central body, over which it has no control. If the argument used by the right hon. Gentleman is sound and the central authority cannot allow the administration to pass out of its own hands without some local fund being raised, the same argument holds good in respect of the local authority. You cannot expect the local authority to ask people for their votes and to admit that they are in no position to control the expenditure which they have raised from the ratepayers. One is just as great a departure from well considered principles of finance as the other.

In Durham we have to pay £59,000 under this new legislation to the central fund. That is a large amount of money. The ratepayers of Durham County will have that sum to pay, although their local representatives, whom we have elected to look after these things, will have no power at all over the spending of that money. That is as much a departure from the principles of our financial system as the other. We have passed the time when this obvious national burden should have been taken over by the State. One thing which I cannot understand, and on which I should like to be enlightened, is that everybody seems to be agreed that the burdens of the local authorities are almost unbearable. Attempt after attempt has been made in this House by successive Governments to relieve the burdens in respect of unemployment and public assistance, and while these attempts are being made the burdens of the local authorities increase under these heads. There has been a successive increase under this particular head year by year in the last few years, despite the fact that we have special grants of one sort or another from the central Government.

We have to take a larger view of the situation. I cannot believe that this rating problem has not some relation to the other great problem with which we are faced. I cannot visualise a solution of the unemployment problem unless first of all the whole rating system is revised. There is great difficulty in raising the increasing rates required in the localities, and in the distressed areas there is a double difficulty at the present time. Durham County, part of which I have the honour to represent, carries a very big rates burden, and even the hon. Member for Sunderland must admit that his own constituency is troubled at the moment by increasing rates. Indeed, when I recalled that fact, I was surprised at the very roseate view taken by him in his speech of the assistance which Wearside generally is getting in this respect. The danger in Durham County is that our heavy industries are in a state of depression. We are seeking by various means not only to revive them, but to attract newer and in some cases lighter industries to our area. We find from experience, however, that the rate burden is a great deterrent to industries which might otherwise establish themselves there.

On these grounds I feel that this Bill and the Act to which it is supplemental are insufficient for the solution of this problem. But a solution must be found if the conditions of our people are to be improved. I thought that the right hon. Gentleman the Member for Hillhead (Sir R. Horne) stated in a perfectly devastating way the case against both this Bill and the original Act, and that he demolished the whole system by which we are seeking to tackle this problem piecemeal. No one could defend a system which differentiates between one local authority and another in the manner described by the right hon. Gentleman. When he pointed out, as he did so admirably, that the 95 per cent., which, it is contended, the central Government is now paying, is not evenly distributed over the local authorities, it seemed to knock the bottom out of the case for these repeated attempts by this Government and previous Governments, and to establish a case for an immediate revision of the whole rating system in its relation to these main charges.

We have all been troubled with the effect of the "not normally insurable" provision, and the difficulty caused in years past by people falling out of insurance and becoming a burden on the rates. I wish to know what steps are being taken to protect local authorities against a repetition of that trouble. The powers of the local assistance boards have been widely increased, and I understand they now take over the care of the able-bodied poor up to a certain point. Are the local authorities in any way responsible or are they likely to get the people who are at present under the care of the board thrown back to their care?


The situation in regard to that matter is in no respect affected by the present Bill.


That is my point. I am asking whether there is any protection in the Bill against a repetition of the sort of thing I have indicated. If, as the right hon. Gentleman says, there is no protection and the position is not affected, then it seems to me that the Bill is inadequate and the Act to which it is a supplement is also inadequate to deal with our problem. I feel that we are a long way from solving our problem. I also feel that it is a problem which will not wait much longer and which requires a radical solution. Local authorities are carrying on tremendous services under great difficulties and they are worthy of more practical help than they have hitherto received. In so far as the Bill will help them we desire them all to be successful, but there is no one who gives a thought to this matter to-day who does not feel that the burden of public assistance must in the long run retard the development of social services and dull the initiative of the local authorities to whom we owe so much and to whom we ought to offer all the help we can give.

7.38 p.m.


Controversy this afternoon has centred round four major points. The first was the charge against my right hon. Friend the Minister of Health that he had committed the Government to undertaking the entire relief of the unemployed, in a speech which he made some time ago. The second was that the Government had misled the local authorities or had made some half-promises which caused the local authorities to anticipate that the second appointed day under the Act would be fixed earlier than 1st March. The third was the reiterated claim that 95 per cent. of the cost of relief in respect of unemployment is being borne by the Government, and the fourth and last point is the question of whether the Government ought to undertake the entire relief of unemployment and not leave the local authorities to bear any part of the cost.

As far as the first two points are concerned, I do not think that the Members who made those statements can have read the speech which my right hon. Friend made on that occasion relative to the Government taking over responsibility for the able-bodied unemployed. Any fair-minded person reading that speech would see, I think, that it was not in any way an unqualified assurance to the effect suggested. I was not a Member of the House when that speech was made but I heard of it and I read it carefully and I am stating the impression which it made upon me. As regards misleading local authorities as to the date of the second appointed day, I have attended the various meetings of municipalities held in Westminster during the last three or four months and, apart from the categorical charge made by the Glasgow representatives that they were given to understand that the date would be 1st October—which has been denied by the Secretary of State for Scotland—no other municipality brought forward any definite statement. All they said was that "they had been given to understand." To-day, the Liverpool Corporation has been quoted as a corporation on which there is a majority representing the political views held on this side of the House. They said they had been given to understand that it would be the earlier date and I cannot help thinking that if a municipal authority composed of such capable men had been able to point definitely to any assurance they would have been more specific.

Now we come to the question of the 95 per cent. I admit that I was green with envy when I heard the hon. Member for the West Derby division of Liverpool (Sir J. Sandeman Allen) say that Liverpool was being relieved of 95 per cent. at least and, if anything, rather more. I do not question that the Chancellor of the Exchequer is justified in his claim that, taking the country as a whole, the National Exchequer bears 95 per cent. of the cost of relieving the able-bodied unemployed. The question is whether the remaining 5 per cent. is borne evenly and equitably or falls heaviest on the shoulders of some of the municipalities which are hardest hit. I represent one of the divisions of Manchester and knowing that Manchester had a heavy bill for public assistance, I made inquiries after the Unemployment Act of 1934 was passed, as to the extent to which it would relieve Manchester during the coming year.

The estimated figures which I was given showed that it would relieve Manchester definitely of £144,000 for the year ending March, 1936, which was equal to about a 6d. rate. It would leave Manchester liable to contribute, on the 60 per cent. basis, £129,000 towards the total cost in respect of able-bodied unemployed relief. I thought at first that that would leave Manchester with practically a clean sheet in respect of the unemployed but I found that there was an item, in respect of which they got no relief from the Government, of £238,000, described as being for the relief of persons normally engaged in a regular occupation. This is not in any way institutional relief. It is additional to a figure of £389,000 which general public assistance will still cost them. I inquired as to the nature of this £238,000 payment, because it was additional to the £129,000 contribution to the Unemployment Assistance Board, and I was told that it was made up of the relief of persons who did not come within the definition requisite to bring them into benefit under the Unemployment Assistance Act. An analysis of those not taken over by the Unemployment Assistance Board showed about 50 per cent. were cases of temporary sickness, 20 per cent. cases of physical disability, 25 per cent. cases not normally insured, and of the remainder, part were black-coated workers whose incomes had exceeded £250. The cost of these is £238,000 a year on the Manchester ratepayers for which they will get no relief whatever from the Unemployment Assistance Board.

Taking Liverpool as a fairly analogous case, when I heard the hon. Member for West Derby say that Liverpool was getting 95 per cent. and more, I looked again to see whether there was any possible way in which Manchester was getting the same. Adding together the figure of £238,000 which they are not relieved of at all and the £129,000 which is their estimated contribution to the Unemployment Assistance Board, we get a figure of £367,000, and can £367,000 by any chance constitute less than 5 per cent. of Manchester's total cost for unemployed? Of course, the idea was fantastic. I could not check it from the other side of the picture, namely, the Government payments, because my right hon. Friend the Chancellor of the Exchequer said that £51,000,000 a year was the cost of transitional payment they had been bearing and a further £6,000,000 a year will be the estimated cost under the new Act, of which about £2,000,000 would be borne by the local authorities—that is £57,000,000, of which £55,000,000 will be borne by the Government and about £2,000,0001 which is somewhere about 5 per cent., by the local authorities.

To try to form, in the absence of definite figures, some estimate of what amount the Government would be dispersing in the area of Manchester in the form of transitional payment and in the form of what the Unemployment Assistance Board would contribute, let us take the figure of Manchester's population as somewhere in the neighbourhood of 900,000, which of a total population of 45,000,000 is somewhere about 2 per cent. If £51,000,000 transitional benefit is being paid for the whole area of the country and Manchester constitutes about 2 per cent. of that, Manchester's share would work out at about £1,020,000 per annum, plus £144,000 odd that was going to be borne by the Unemployment Assistance Board, and that would give a figure of £1,164,000 as the Government contribution. If Manchester is paying £367,000 as against the Government's contribution of £1,164,000, it means that Manchester is paying about 32 per cent. instead of only 5 per cent. Whether it arises owing to the peculiar nature of the employment in that area, which is not common to other places, I do not know. I think I have said enough to show that I am justified in saying that Manchester is not being relieved of anything like the due proportion of the cost of her unemployed, although, as I said at the outset of my speech, Manchester is going to have £145,000 saved to her under the terms of the 1934 Act.

Whether or not the whole cost of the unemployed should be borne by the State, I certainly agree with speeches which have been made that the position has been radically changed now that the Un- employment Assistance Board are to be responsible for the disbursement, or, at any rate, for the fixing of the scales. I want to put to hon. Members, whatever their views on this subject, a hypothetical case, which is yet a very likely one. Manchester's public assistance rate was 4s. 2⅛d. in the £ for the year ending 31st March, 1935. Manchester has got a number of salubrious satellite towns and villages. One of the most distinguished in that regard is Blackpool, where plenty of well-to-do men live who work in Manchester. Blackpool's public assistance rate is 7⅝d. in the £. There is also Southport, which has a rate of 1s. 0½d. in the £. There are plenty of other places, like the place where I live, where the amount of relief is only trifling.

Take two men, whether they are in business for themselves in Manchester or whether they are professional men. One of them lives, for instance, in my Division in Manchester and the other chooses to go out and live where I live, or, better still, at Blackpool. One of them is mulcted, as far as relief of the poor is concerned, at 7d. in the £ and the other at 4s. 2d. in the £. There is no justification for saying that the man who chooses to live in Manchester should pay 4s. 2d. and the other man get away with about 7½d. They are two men who could live in the same neighbourhood, but one lives near his work and the other goes further out. My hon. Friend the Member for Sunderland (Sir L. Thompson) said that the manner in which the cost of the relief of the unemployed should be borne should be the subject of a special debate. I agree entirely with him, but I could not forbear to put forward that one case which I think is worthy of consideration by some of my hon. Friends.

7.53 p.m.


The hon. Member who has just sat down gave us a very fair illustration. We could not have done it any better. Unemployment should be a national charge. I have, just convenient to my own constituency, the very same thing. In Clydebank and Dumbarton, where the money is made and where the work is done, we now have unemployment, but just four miles away at Bearsden and Helensburgh, where the supposed great and wealthy live, they have practically no unemployed, and the result is that they escape taxation. The manager fraternity and the lawyer fraternity live in Bearsden and the shipbuilders live in Clydebank and Dumbarton, and now they have to carry the burden of unemployment, which is most unfair and is the cause of the trouble. That is what we are up against to-day. The right hon. Member for Hillhead (Sir R. Horne) made out a case to-day for the complete revision of the amount of contributions required to be made to the Unemployment Assistance Board in terms of Section 45 of the Unemployment Act, 1934. The case that he made out is our case. He made out our case just as the hon. Member for Rusholme (Mr. Radford) makes out our case.

The right hon. Member for Hillhead, the hon. Member for the West Derby Division of Liverpool (Sir J. Sandeman Allen) and the hon. Member for Sunderland (Sir L. Thompson) have taken a very keen interest in this business. I have attended with them the deputations and delegations which came from England, Scotland and Wales on this matter. Also, I have been with them on a delegation to the Members of Parliament because the Chancellor of the Exchequer refused to meet the local authorities, not only of Scotland but of England. I would like the House to understand that. That is what you call a mighty man. But the mighty man of Gath has been pulled down before, and so will he be.


I am sure that the hon. Member is not suggesting to the House that the Chancellor refused to meet the local authorities on this Bill.


No, but on the general question of this burden with which they were going to be faced. And not only that, but I interviewed the Chancellor of the Exchequer myself—because he and I are very friendly—to try to get him to waive the business, and he told me distinctly that he could not receive the Scottish delegation because by that time he had turned down the Englishmen. That is an extraordinary story. Those Members whom I have mentioned, the hon. Member for Sunderland and the hon. Member for the West Derby Division of Liverpool, have taken a very keen interest in this subject, and they have stated the case clearly and explicitly to the Chancellor of the Exchequer on behalf of the different parts of the country that they represent. The right hon. Member for Hillhead, along with the hon. Member for Govan (Mr. Maclean) and myself, stated the case on behalf of Scotland to him, and we really got nothing. And there is nothing here to-day. We are getting nothing from the Chancellor of the Exchequer. Yet even the hon. Member for Rusholme along with the right hon. Member for Hillhead, the hon. Member for Sunderland and the hon. Member for the West Derby Division of Liverpool are just like the ostrich, running their heads in the sand and not facing up to the business at all.

You have to remember that the right hon. Member for Hillhead made out the case for complete revision. Complete revision of what? He was stating to the Chancellor of the Exchequer that the terrible burden he was forcing on the West of Scotland was absolutely ridiculous. I want the House to understand this, although I do not know whether they will carry it out or not. The Treasurer of the City of Glasgow, Mr. P. J. Dolan, told the Chancellor of the Exchequer, when he was with a deputation on the matter, that unless the Chancellor of the Exchequer gave them better terms than he was suggesting in this Bill they would get Glasgow's share of administration to do. Whether they will carry out that suggestion I do not know, but it is a serious situation. Here is the treasurer of the second city of the Empire who has told the Chancellor of the Exchequer that they are not willing to administer this business. Not only that, but the same individual told us when he was on a deputation before the Members of the House of Commons that it was a Member of the Government who had led him to believe that 1st October was the date, and he gave the name of the Member of the Government.

Now I find everybody running away from this, accepting the statement of the Chancellor of the Exchequer against every other member of the community who had anything to do with this matter. I have never seen anybody getting away with anything as easily as the Chancellor is doing on this occasion. And I find Members here to-day representing English constituencies which are going to be badly hit, accepting the position. We come forward at this juncture and offer them a way out. We have put down an Amendment which we will carry to a Division, giving them an opportunity to decide for the localities they represent as against the Government. I wish they would take a leaf out of the book of the individuals whom we have to face on the Scottish Standing Committee. They are not in the least bit afraid to vote against the Government when it suits them. I mean Tories. But here in the House of Commons it is a different matter, because on the Scottish Standing Committee what we are up against is the rights of private property, and when they are invaded you find where individuals stand. They are prepared to defend them even against the Government they are supposed to support.

But what is at stake here? It is the poor, the unemployed. And here are men who are a power in the land, men who carry weight in this country, and instead of standing up to the Chancellor of the Exchequer in defence of those who are not able to defend themselves, they go away and make fine speeches. The right hon. Member for Hillhead (Sir R. Horne) makes a case which demolishes the whole of the Chancellor's Bill, and then he finished up by trying to justify it, and he will vote for it. He will not vote with us; neither will the hon. Member for Rusholme (Mr. Radford).

How is this going to work out for us? Why did the treasurer of the City of Glasgow make the statement that he did to the Chancellor of the Exchequer, that he would throw the whole administration of able-bodied unemployment on the Chancellor of the Exchequer? Because Glasgow is asked to contribute 14 times the amount that Birmingham is asked to contribute. Glasgow has to contribute in one year as much as Birmingham has to contribute in 14 years, and the two cities have about the same population. I am not accusing the Chancellor of the Exchequer of showing any special preference to Birmingham, because Birmingham has always been synonymous with Chamberlain. Here is my own constituency, Clydebank. How are we faced there? Clydebank, with a population of 46,963, receives a grant of £2,563. This is nearly the amount paid out to Rotherham. Rotherham's population is 50 per cent. more than Clydebank's, but Rotherham's contribution to the Board is £4,000 as against our £46,000.

A further examination of the returns brings out similar glaring anomalies. Here you have Coventry with a population of 167,046, and their contribution is only £788. Aberdeen, with a similar population, has to contribute £30,111. Gateshead with a similar population has to contribute £25,528. I hope that hon. Members will give this their serious attention, because it is a tragedy. This is unfairness run riot. Take London. The administrative County of London, with a population of 4,484,523, is required to pay a sum of £216, but for the purpose of comparison here is the difference. Glasgow, with a little over 1,000,000 population, has to contribute almost £400,000. There is something radically wrong here, something worth inquiring into. I asked the Chancellor of the Exchequer when we went to see him as Members of the House of Commons if he had not really made a mistake, if his system was not working out most unfairly, and if he should not withdraw it. I asked him to have the same courage as the Minister of Labour had when he withdrew his regulations.


I think that the hon. Gentleman was not present when the Secretary of State for Scotland spoke earlier this evening. The Secretary of State for Scotland made a definite statement, which I am sure will give great satisfaction to the hon. Member, that Glasgow will receive £980,000 from the Unemployment Assistance Board as against the £400,000 that she has to contribute.


Let me point out as a representative of Glasgow that there are other items which the Secretary of State for Scotland did not mention and which Glasgow has to pay, and they reduce the £980,000 cheque considerably.


I only thought that the hon. Member for Dumbarton Burghs (Mr. Kirkwood) would like to have that very salient fact in his possession, because he was feeling very indignant, and £900,000, I think he will feel, is something of a solatium.


I thank the hon. Member for his information, but I have been here too many years now and I have dealt with so many Chancellors of the Exchequer and Cabinet Ministers in general that figures do not count very much with me. When I hear what the treasurer of the City of Glasgow has to say I feel that there is an injustice being done. It is perfectly true that the Chancellor of the Exchequer is going to give us about £1,000,000, but we require £1,500,000. That is no exaggeration. And the districts that I am appealing for here to-night are the districts that have made all the money for the Chancellor of the Exchequer. Make no mistake about that. The money is not made in London. It is spent in London. The wealth of Britain is made in the Midlands, the North and Scotland; not down here. This is where it is wasted. So that I would require to go into this matter of the £900,000 to see just how it works out, whether it is going to be as beneficial as it appears at first sight.

As I was saying, I asked the Chancellor of the Exchequer to withdraw this system. He may have set out with all the good will in the world. I do not question that for a moment, just as in the same way the Unemployment Assistance Board, I have no doubt, set out with all the good will in the world to give us Regulations that would deal with a unique situation. The Regulations appeared to them, men of sage experience, headed by an ex-Minister of Labour who had not only had experience in this Government but in former Governments in the same office, to be all right on paper, but when they came to be applied to human beings they worked out so disastrously wrong that the Minister of Labour decided to withdraw them. From every side of this House complaints were launched against them.

This is the same case again. It is operating not as Glasgow against Liverpool or Birmingham, or London. Take my own constituency, which I know best, as against Kilmarnock. Kilmarnock will not pay one farthing in the £, but we in Clydebank are going to be taxed to the extent of is. 1½d. in the £. There is nothing reasonable about that. One would have thought that the Chancellor of the Exchequer and his advisers would have been able to produce a scheme which would have worked out more equitably. When I put a question to him the Chancellor of the Exchequer said that the code which he was applying here was that which applies to the financial relations between Scotland and England; that is that Scotland gets 11/80ths. I pointed out to him then, as I point out to the House now, than 11/80ths in the case of education and social services works out all right. As far as we are concerned, we do not complain. But in this case the basis is not applicable; it is outrageous; it works out all wrong, and there is no fairness in it. I want to emphasise the point put by hon. Members who support the Government that you ought to be taxed according to your ability to pay. If that rule was applied here Wales and Durham and all the depressed areas would fare more equitably than they do.

This proposal is going to crush us. How is it possible for us in the West of Scotland, who are being asked to pay fourteen times the amount which Birmingham will pay, to compete with Birmingham in inducing new industries to come to the district? I know Birmingham very well. There is practically no unemployment there. They have never known the terrible nightmare with which we are afflicted in the mining areas and shipbuilding yards. My own industry, engineering, has never known in Birmingham what unemployment really means; electrical engineering doing well, motor engineering booming, and we have been sending men from the Clyde and Newcastle regularly to meet their demands. We have given to Birmingham of our best, mentally and physically; while our own engineering yards on the Clyde are going derelict. And this is how the Chancellor of the Exchequer treats us; this is the recompense we get for giving of our best! He puts on such a deadweight in taxation that it will be quite impossible for us to invite individuals to come into our district with new industries. This has got to stop. Neither the Chancellor of the Exchequer nor anybody else is going to get away with this quietly. Something will have to be done. If the Government think that we on the Clyde are going to submit to this they have never made a bigger mistake. If Glasgow is worth its salt and cares to put its threat into operation, I will stand by it to the best of my ability. It is too funny for words to think that the Government should treat us in this fashion; should propose to put a bar against our being able to compete with other districts for new industries.

We have about a dozen of the finest ship-yards in the world, scrapped; iron-works and steel works in the same condition. These men will never work in these yards again because the industry, under the reorganisation scheme, does not require them, but these men are there and their families are there. There are no finer workmen in the world; Great Britain has no better asset than these men. But there they are roaming about the streets with nothing to do, nobody wants them, while individuals, irrespective of their religion or political opinions, are doing their utmost to try to find new industries, new openings for these men. Talk about a square deal, a new deal, this is a new deal with a vengeance. It is a new devil when you are proposing to put all this pressure on local authorities.

There is only one way out. They talk about a complete revision. That is a case of "Live old horse, and you will get corn." But we want the wherewithal now, and the Chancellor of the Exchequer has the power. What is the use of the Chancellor coming down to this House with a Budget that is balanced, with millions of a balance? It is the boast of the supporters of the Government that we are the only country, that "we are the boys that fear no noise," that no other country in the world is in such a sound financial position as we are. Fancy boasting like that, with millions of a balance on one hand, and here we are faced—and this Bill brings us right up against it—with another balance that the Chancellor is slighting here—millions of wasting manhood, unemployed, nobody wanting them, and not only wasting manhood, but wasting womanhood. Think of it. Think what those local authorities have to face up to. The Chancellor of the Exchequer promised us that he was going to relieve us of this burden, that he was going to make it a national charge, and the hon. Member for the West Derby Division of Liverpool (Sir J. Sandeman Allen) stood up and said that Members of the Opposition were going through the country crying down the credit of the Government. Have we not every justification?

Here is a Government, the most powerful Government of our times. There is nothing that they desire to do but they can carry through this House, and the Chancellor of the Exchequer and his sup- supporters—there is no denying it; they can put as much face on it and use all the sophistry that they have been using to-day to try to cover it up—created the atmosphere throughout the country that they were going to bear the burden of the able-bodied unemployed; and instead of that we are fighting again for our very life. In those districts that are the worst hit, where poverty is rampant, even in this Jubilee year, how can those folk rejoice? Could we rejoice? Not only could we, but would we rejoice if we had nothing to depend on but what came from the labour exchange and the public assistance committee? Is there any man in this House who would rejoice under those conditions? Not one. I am giving them credit for being men, men of understanding. How can we who are comfortable, well-fed and well-clad, we who have come from them, we who live among them, we who know the hellish nightmare through which they have to live, we who know the starvation that exists—how can we ask them to rejoice?

A jubilee. What does the Book say, what does the Bible say, about the jubilee? "Every man's debt was forgiven." Where is all our Christianity, where is all the praying that goes on here day after day, when we are faced with the facts, when we are in the position, as the Government are in the position, to deal with this question of bearing the burden of unemployment, and they refuse? They send it back to be borne by the local authorities, back to Durham, back to Scotland, back to Wales, back to where the wealth of Britain is produced. Not only Members of the Socialist party in this House, but others reasoned with the Chancellor of the Exchequer when we were before him, men who were sent from industrial areas that are hard hit, and those local authorities which have to administer this, with all the fine speechifying and figures that are thrown across the Floor of this House, figures that will mean nothing to them, that will not feed anyone—those local authorities are dealing with this terrible question, and it was the duty of the Chancellor of the Exchequer and the Government not to make it harder for those men, because the local authorities and the officials of the local authorities have had a terrible time for years.

One would have thought, particularly when this atmosphere of brotherhood was supposed to be abroad in the land, this comradeship, that the Chancellor of the Exchequer would have extended to the local authorities the right hand of fellowship and said, "Yes, certainly. We have substantial surpluses left here in cash, and you local authorities, who are dealing with that awful other balance, wasting manhood and womanhood, we will put in your hands the wherewithal to lift those men and women out of the slough of despond that they are in and by that means give them a chance in life, a renewal of the idea that they have some part to play in the scheme of things." If he had done that, then not only the Members of this House and the local authorities, but the unemployed as well, could have enjoyed a jubilee in a manner in which they have not enjoyed this Jubilee.

8.35 p.m.


I was originally moved to rise because the Minister of Health challenged the hon. Member for Dumbarton Burghs (Mr. Kirkwood) on a specific point as to whether the Chancellor of the Exchequer had refused to see the representatives of the local authorities, and the Minister of Health said, "Not on the subject of this Bill." I find that the Explanatory and Financial Memorandum to this Bill begins by referring to the postponement of the second appointed day. That is what this Bill is about, and it was on that question that the local authorities from various parts of England, Wales and Scotland came down here with the object of interviewing the Chancellor of the Exchequer. It was that body which he refused to see. He was ready to see Members of Parliament, but we were anxious to get support from the representatives of the local authorities. Eventually, with the greatest trouble and against the Chancellor's emphatic protest, we succeeded in getting one representative from Liverpool as a kind of assessor to go with us and to report back to the local authorities so that they could know what we had done. That is an accurate account of what happened, and it fully supports the original statement made by the hon. Member for Dumbarton Burghs as against the intervention of the Minister of Health. It is important that these facts should be accurately stated, and I have endeavoured, as one who has been on these deputations, to give my recollection of what took place.

As regards the Bill, there is no doubt that it makes some move in the direction of putting the local authorities as nearly as may be in the financial position which they would have occupied had the second appointed day not been postponed. A great many local authorities are not satisfied that they are in fact placed in that position, but I like to give credit that the move is in the right direction and it seems ungracious to continue to refuse a crumb because one wants the whole loaf. I feel, however, that by continually accepting, time after time, driblets of temporary assistance to tide over the immediate necessity of the day we are in danger of losing sight of the main problem. For that reason, I believe that the party above the Gangway are justified in putting down the Amendment in the terms in which it is put, for as long as we live from hand to mouth, taking a piece here and a piece there, the final question as to where the responsibility is going to lie will not be faced; we shall always be putting it off. I really cannot be mesmerised by the repetition of this formula about 95 per cent. and 5 per cent. It really does not mean as much as it sounds, because a good deal of what is included in the 95 per cent. has operated for a long time, and the local authorities have protested—and no one can say without justice—against the burden which remains upon them.

That is the burden which has to be considered and which they still feel so crushing. The division of the burden is still, I think, nominally 60–40, and that, with the certain conditions that have been made, it may be 50–50. That, however, is not 100 per cent., and 100 per cent. has been the aim of the local authorities the whole time, and the aim of those of all parties in the House who represent the distressed areas. We have never consented to give that up. I see no reason why it should be given up because at the present moment the whole basis is purely artificial. We are left on a basis which nobody could defend in theory or logic. The local authorities still contribute, but local control counts for nothing and local expenditure is still going on. That is quite unjustified. I suggest that it can only be cured if it is tackled on a nonparty basis. I am usually suspicious when people say, "Get away from the party basis," but in this matter the people who represent the areas which are concerned ought to get together, not in a committee room upstairs, but on the Floor of this House, because that is the only way in which to get anything done.

The Chancellor of the Exchequer on one occasion said, rather cynically I thought, when he was faced with the representatives of the depressed areas, "As against you I am only one, but I have all the other Members of the House." To some extent that is true. That is to say, if the Chancellor comes to the House and addresses the Members of those areas which are not distressed, and says, "I think this is a fair sum, I think I have gone far enough and if I go any further you fellows will have to pay the bill," naturally he will get the support of the majority of Members of the House, who, I am thankful to say, do not represent acutely depressed areas. I am glad to say that the acutely depressed areas are still in a minority. It is easy for the Chancellor to get Members who do not represent those areas round to his support. The only way to meet that situation, to meet quantity with quality, is to show that those who represent the depressed areas feel very acutely on the matter, and are ready to push it to a Division. I respect the feelings of loyalty of hon. Members opposite who are reluctant on any occasion to vote against the Government; I have felt the same in earlier days; but here is a time when, unless some definite impression is made, unless the people who represent this peculiar interest, which is a regional and not a party political interest, unless they really show that they are united to practical effect, I am afraid that nothing will be done.

After all, what are the Government gaining by holding up this last point? If it is such a very little that remains to be done in comparison with the whole problem, if they mean that the proportion is to be taken as 95 per cent. to 5 per cent., can it be worth while to make all this fuss and get all this opposition, which is most keenly felt in the country, for the sake of the remaining 5 per cent.? They would put the whole thing on a much more logical and human basis, and a much more sound basis for themselves, if they took over the whole problem. I urge that that can be done, and that those who believe it should be done should hold together on this question. In a speech of which I have not seen a full report the Parliamentary Secretary to the Minister of Labour, who should know as much about labour problems as most people, used a remarkable sentence in which he said that the North remained to be dealt with. After four years of this Government that is a remarkable statement. There is, however, not only the North, but Wales and parts of Scotland and Lancashire that remain to be dealt with. On matters like this Bill, where the question involved is not a party question, seeing that certain regions of the country have been rather ready to sink into the background because others were doing better so that their problems could be reserved for later consideration, should unite and not allow their problem to be postponed; and they should show their unity in the only way that counts, namely, by their votes in the Lobby.

8.45 p.m.


I do not think I should have intervened but for the fact that reference was made by the Minister to something that is likely to happen in my constituency as the result of the Bill. He made what appeared to be rather a startling statement when he said, mentioning it with other places, that Merthyr Tydvil would be relieved to the extent of about a 2s. 9d. rate. I should like whoever is to reply for the Government to-night to explain for my personal edification how that figure has been arrived at, whether that gain is a gross gain or a nett gain, and whether the gain will be real or fictitious. I should like to know, also, whether the 2s. 9d. is intended to include the special areas grant, and also whether the Minister arrived at that figure upon data supplied him by the local authorities. The real figure will undoubtedly be found to be appreciably smaller than that, and if the real figure is closely and further analysed it will be found that a borough so distressed as Merthyr Tydvil will not, in fact, gain anything at all. Reference has been made to the effects of the Local Government Act, 1929, and the Minister went out of his way to tell us that, notwithstanding the alleged assistance derived from the Bill we are now considering, the block grant would continue to operate unchecked. Personally, I very much regret to hear that because, as the hon. Member for Ebbw Vale (Mr. A. Bevan) made clear, whatever advantages may have accrued to some areas when the block grant commenced to operate, that grant, with its formula, is operating progressively to the detriment of some of the most depressed areas in the country. In my own area the block grant has deprived us of the equivalent of a 5d. or a 6d. rate, and it is a progressive loss, getting larger every year. As the hon. Member for Ebbw Vale said, the formula on which that block grant is based no longer applies with the least measure of fair play to the areas which are worst hit.

Reference has also been made—and I shall not elaborate the point—to the continued burdens borne by so many of these depressed areas as the result of debts incurred, perforce, during the distress between years 1921 and 1926. I am referring largely to the Goschen loans. In a depressed area such as Merthyr Tydvil that means an additional rate of over 9d. in the £. When these disadvantages, which could easily be corrected by the Minister, are taken into consideration, not only do we find that there is no relief coming to these depressed areas through this Bill, but that the position is being continually worsened. What is most upsetting of all is the continued refusal of the Government to act, in spite of increasing pressure brought to bear upon them by their own supporters. In fact, I hesitated about getting up this evening because most of the speeches from the Government benches—as well as those from the Opposition benches—had already expressed the view that the policy of the Government does not take into consideration the distress and the causes of the distress in the areas which the speakers represent. The hon. Member for West Middlesbrough (Mr. B. Griffith) appealed to the Government to go one step beyond the 95 per cent., because it is cold comfort for an area such as that which I have the honour of representing to be told that 95 per cent. of the burden of sustaining the poor of the country is being borne by the State when in that area there is a poor rate of between 15s. and 16s. in the £. In face of the extraordinarily high rates and the great burden of poverty in the distressed areas it is absurd for the Government to say that the State is maintaining or supporting 95 per cent. of the poor in this country.

Notwithstanding all the statements which have been made in the Debate, and notwithstanding the appeals that are now being made almost daily to the Government to face up to the problem of poverty and the causes of the distress, my own constituency is at present being offered nothing more by this Government, I very much regret to say, than an inquiry by a Royal Commission. If that is not adding insult to injury, if that is not a deliberate attempt at humiliating the people living in that area, which has a great and incomparable industrial record and tradition, I do not know the meaning of the words "insult," "injury" and "humiliation." I regret that I have been compelled to refer to this matter, but the speech of the Minister held out absolutely no hope for the distressed areas. The Budget Speech almost entirely ignored those areas.

The policy of the Government is one of negation, and has nothing constructive about it. Some of us are forced to entertain the appalling thought that the Government are tinkering or flirting with a great problem, and are refusing to face up to the implications of that problem which have forced the Government to place the Bill before the House. I emphasise the appeal which has been made that those of us who represent the distressed areas should come together, because the Government have no policy, and are refusing to face their obligations towards the distressed areas. What is likely to happen in the near future in Merthyr Tydvil, so far as the Government are concerned, will happen in many other county boroughs or counties. The Government have refused to examine the cause of the depression and the poverty, and have refused to place before the House a constructive policy to revive industry. The Government are abandoning those areas to their distress. They refuse to adopt any policy which promises hope of rehabilitating the economic and industrial life of those areas. I do not know whether any appeal can move the Govern- ment to take a constructive step. I am afraid I shall have to abandon an appeal, because the Government have abandoned their duty. One thing is certain. The distressed areas will have to let the country know, not through this House but in other ways, that they are not prepared to accept the policy of abandonment and despair which the Government have forced upon them. I should like the Minister or his Parliamentary Secretary to explain where the data were obtained which prompted the Minister to tell the House to-day that Merthyr Tydvil is likely to gain by the operation of the Bill.

8.58 p.m.


I pay my tribute to the Minister for the clear and knowledgeable way in which he presented this most difficult Measure to the House. In considering the necessities of the Bill we must have in mind the difficult cases, some of which were put before us by the hon. Member for Merthyr Tydvil (Mr. S. Davies) with so much feeling when outlining the claims of his constituency. In every case we must permit our hearts to rule our brains to a major extent, but we must never forget that we are the custodians of the liberties, the requirements and the needs of the whole country.

A great principle is involved in the Bill, that of national control or county and borough control. Those of us who have a little knowledge of the application of the last Local Government Act know how, little by little, local power and local responsibility are being traversed and curtailed under a bureaucracy of Civil Service administration, and some of us are wondering whether the present Bill, which places further power in the hands of the Civil Service of this country, is the best way of dealing with a vital problem. In the furtherance of social reform—not always can it be correctly so designated—it may be that the central bureaucracy will be used still further in local as in national affairs, but if we are to be forced into a vast national machine without being able to rely mainly on our own individualism and power and on the possession of our own ego, we may deteriorate, and we have to be careful, because of our knowledge of our responsibilities to our brethren who are less favoured than ourselves. We must preserve a correct sense of proportion as to the methods and the means by which we carry out our plans for their succour and relief.

Let me refer hon. Members to Clause 3 of the Bill, and I ask them to glance at it. They will see outlined there a method of borrowing money which, with great respect to the draftsmen of the Bill, I suggest shows a weakness which could be exploited, if the system were fully applied nationally, but which would not be exploited if it were utilised only in a local sense and by a local group. I may be told by hon. Members who are experts in money matters, and whom, fortunately, we have among us, that the nation can provide money more cheaply than a locality or a county. That may be, but I ask hon. Members to glance at the first two lines of the Clause and then to look at the marginal reference. Those first lines state: The council of any county or county borough may borrow by way of temporary loan or overdraft. That specifies the type of loan. The marginal reference is: Temporary power of public assistance authorities to raise loans. It does not require a very astute lawyer to be able to present at least six different forms in which that paragraph could be understood. There may be perfect answers to that point, but when we are considering the proper method of giving assistance to the unfortunate folk who would obtain work if they could, but have to rely upon what is sometimes miscalled the "dole," and when we are dealing with public money, it is proper to consider which is the most advantageous way of approaching the great problem of the unemployed.

The issue of the Bill is whether its proposals should be carried out nationally, with all the implications thereof as well as with the implications of indirect taxation, possibly extravagant borrowing and, alternatively, cheaper money, or whether it should be done with the help of the splendid spirit of our local authorities, often composed of working men who, after working in the day, give their time in the evening to public affairs. There would be a keener bargaining propensity in such local centres than would exist in the central bureaucracy. Those two forces have an interplay upon everything which concerns our national necessities, as well as upon the future of our nation and country. Let me point out that you can make the running of a country too expensive, and that you can spend money and not get full value for it. Some of us who are interested in education have seen to what extent the peculiarities of inspectors can extravagantly waste the money of the nation as well as of the public authorities, and get very little value in return for the expenditure. Some of us have also noted, in respect of housing problems, most foolish and expensive schemes put forward in relation to the housing of the people. I am not going to say that in every case these huge blocks that have been put up in our midst—these ugly human mills, these boxes in which people are supposed to live—do not perform the work and purpose for which they have been erected, but I do say to the generation that is coming that the health of children bred in four or five-storey blocks—

Mr. DEPUTY-SPEAKER (Captain Bourne)

I think that the hon. Member would perhaps be more in order in using that argument on the Estimates for the Ministry of Health.


I shall, of course, observe your ruling, Mr. Deputy-Speaker, but I made that reference merely as an illustration, and not as a central argument. I thought I might use it to illustrate my point in comparing national with local methods of expenditure. Whether in connection with housing or in connection with the provision of money for schemes for those unemployed who have passed the period of uncovenanted benefit, I would suggest that we should be extremely careful as to how far we allow national dominance to take the place of local responsibility. While it may be quite right and proper to utilise this method of providing money, I should have welcomed it more enthusiastically if its control had been placed rather upon the shoulders of the local authorities, not however, without assistance from the national Departments. I am not saying here to-night that those centres where unemployment is almost missing should not bear some financial responsibility in respect of this matter, but I do say that there is in the method set out in this Bill a possibility of waste and extravagance, and I would ask the Member of the Government who is to reply whether, under Clause 3, there is not a possibility of leakage and wastage which may be almost irreparable. Finally, I would again ask the Minister whether, before this Measure is placed on the Statute Book, he will not preserve the traditional responsibility of local administration for the provision of local finance, rather than passing to a system whereby eventually the State will dominate what should be an insurance scheme, and a scheme of substantial assistance and support for the great industrial development of our country?

9.9 p.m.


One would have expected that the hon. Member for West Leyton (Sir W. Sugden), in view of his great legal knowledge, would have had something constructive to offer us. The proposal before the House is one for temporary provision for unemployment assistance. During the past few months we have had nothing but temporary provisions. While the House of Commons has not been able to make up its mind, time is passing, expenses are being incurred by public bodies, and the condition of unsettlement in regard to public finance has very much perturbed them. We are now confronted with a Bill which purports for a time, though how long the time is to be there is no indication, to settle, in a suspense account as it were, the question of certain relief for these particular bodies.

We were told that a change from local government was about to take place, that the administration was no longer to be in the hands of political parties, but that a special Civil Service body was about to be set up, that rules and regulations were about to be framed, and that, out of the vortex of political life, a clean and new system was about to come into operation which would ensure in the future, on the lines of past experience, proper management and able control by efficient men of the system that is before us. In the first operation of that Bill, however, we found the Government without a knowledge of mass psychology, without the mental ability to comprehend the great units that form this composite British nation, dealing with primary matters concerning the life of the people and transferring them from one body to another when the machine was not ready. That which had been in operation from the year 1601, in the reign of Elizabeth, they, in 1935, started to get rid of in the twinkling of an eye.

We find the Minister supercilious in his attitude towards deputations bearing on this important point. Those deputations have presented themselves from all parts of the country, not from the Labour party, but from what are considered to be safe, honest, respectable Tories, if such people can exist. I suppose they can exist, for anomalies exist in all walks of life. The fact remains that, when they present a case, they should be heard. I was always taught at school that mathematics was an exact science, but I have never found so much disputation in connection with accountancy as I have found to-day with regard to the disparity between 95 and 100 per cent. If there be only a difference of 5 per cent., I would ask in the name of common sense—and I think that that is about as strong a term as I would like to apply to the National Government—what it is that they are hesitating about. If we come to an agreement on a 95 per cent. basis, can any Minister say in this House that, in regard to the operaion by these municipal bodies of something which is now considered to be national, the other 5 per cent. cannot be conceded?

I want to point out that the question of the allocation of percentages up and down the country is not altogether a question of correct percentages in the distribution of a sum of money. I contend that there are certain boroughs and cities which are the life of this nation, and as such, owing to the particular position that they occupy, they can certainly claim a right to preferential treatment. If the Port of London were in distress, I should claim that, as one of the great distributing arteries of commerce in this nation, it had a special claim. Again, take the case of Glasgow, with its poverty, its shipping centres and industries that are capable of keeping an artisan class proficient. It is essential for the life of this country from the point of view of industry that preferential treatment should be given in such a case as that. There are the questions of indentured apprenticeship and of the shipyards, knowledge of which can only be acquired by training, and these questions call for special attention. You cannot change great engineering factories or take shipbuilding yards and hawk them up and down the country like a pedlar selling chamois bags or watch keys and such like. You must have trained men. Therefore, this is a matter of the life-blood of the nation. What the Minister has stated may be all right given in a flippant manner in the House of Commons, but there is a responsibility outside this House to which attention must be paid. You do not meet the demands of a great city which has to bear the burden of large bodies of unemployed. It is through no fault of its own that that port, like the rest of Merseyside, has to bear these particular burdens. To those who live in Suburbia and in fashionable parts of England this may not be a great problem, but to those in the industrial North and the Midlands it is a question of life and death. How are we to attract trade to our great and important centres if we are to be heavily burdened with taxation?

I am pleased that the hon. Gentleman the Member for the West Derby Division of Liverpool (Sir J. Sandeman Allen) is now in his place. He had some very kind words to say about the Government and he phrased them as coming from Liverpool. I say with all sincerity that that opinion is not shared by any political party in the City of Liverpool. I believe that he does his work well, but even he in speaking to-day does not represent the point of view of any political party in the City of Liverpool in regard to this particular question. The Liverpool City Council—and I speak with full knowledge, because I happened to be present—have stated that the Government's decision and the proposition which they put forward are an injustice and of very little value to the port of Liverpool. I make that definite statement because Liverpool, apart from politics, occupies a unique position. I am not saying this from a party point of view. I feel that this matter is beyond the scope of either the Liberal, Tory or Labour party, but it ought not to be beyond the possibility of the Minister who introduced this Bill, which is only of a suspensory character, to give something more definite.


Is not the hon. Gentleman referring to the feeling in Liverpool a little time ago? I happen to know that a great many people in Liverpool to-day take a different view, now that they know the facts, from the view they took a little time ago?


I do not want to do an injustice to the hon. Gentleman. It would be the last thing I would attempt to do. Certain statements that emanated from Liverpool were found not to be quite accurate and on that point I give way, but the fact remains that the complaint in regard to the imposition upon Liverpool still exists, and they still complain in that City. In fact, I will go so far as to say that the hon. Gentleman is to attend a meeting within the next fortnight to consider the very thing with which we are dealing to-night. Liverpool is calling a meeting to deal with the inadequacy of the provisions in the present Bill. The two conveners of that meeting are in this House. There is a Member on our side and a Member on the other side. To me a spade is a spade.

What are we going to do here? I want to know what the Minister is going to do. We would wreck the Bill if it were possible to do so, for to place the Government in a worse quandary would not make much difference, as far as ports up and down the country are concerned. They are not receiving the relief that they ought to get. I want to know what the Government intend to do with regard to the Merseyside in order to attract trade. If we are to be burdened with taxation we shall not attract people to our ports. Derating has given manufacturers the opportunity of carrying on, but from those who are poor we are demanding higher rents. Surely the Minister of Health and the Parliamentary Secretary cannot be complacent in regard even to the housing problem of that city, which will be affected under this Bill. Have we not the right to ask the Government in regard to this financial arrangement, "How long are you going to be before you make up your mind? What do you intend to do, and when do you intend to do it? Are you going on in a state of suspended animation for the duration of this Government?" We want to know whether the Government are going to do anything or not?

The Minister may answer me by saying that there is nothing in my arguments, and I might express the same opinion about the Minister's statement, but that would not get us anywhere. The people of Liverpool—and it is a Tory Council which is managing that great city—want to know what relief they are to get, and what the Government are going to do for the whole of the people. What are the Government going to do to assist them? I suggest that, in regard to the provisions of the Bill where the Government are taking borrowing powers unto themselves, there is no benefit in saying to a person already overburdened with debt, "We will case the burden. You go to the moneylenders and carry on. You will not pay it all at once, as we know that you cannot do so, and, therefore, we are easing the situation to try to make things better for you to carry on for five years."

We shall have to pay the money, and what we want to know from the Government is, "Where do you come in?" We are asking the Government, "What part are you going to bear? How are you going to do it from the point of view of lending money? Are you going to meet this burden of carrying on for the five years? Have you any ability to provide finance, having regard to the fact that you have taken it in hand and made a hash of it up to now?" We want to know where the Government are going to end. We know it will end in a general election. We know there will be trouble at the general election, and most of the hon. Members opposite will not come back again, some of the Liverpool Members included. They will not come back, because they are already fed up now. Otherwise they would be in the House, expressing their views either for or against this matter. The hon. Gentleman has done so, but no other Member for Liverpool.

Is there going to be a reversion to the old Poor Law system? If the regulations to be brought before the House are not accepted, do the Government intend to scrap the whole machine or not? With regard to the financial proposals, how far is this three months business going to suit the administration of the National Government? This may be a little bit outside the ordinary business arrangement, but if one were examining a prospectus in regard to a business covered under the headings as I find them here, any business man on these benches, whether he belonged to the legal profession or to the shipping industry, would get down to rock bottom and say, "How is this going to affect the finances of our city?" All over the country we find that there are special areas that seem to be God's chosen spots. The industrial workers in particular areas in times of prosperity can work hard and slave and make fortunes. When depression comes they get forgotten. When they have money to spend they can go into other areas to spend it, and we find prosperity all along the line in certain areas, which get the spending power of our people. Suburbia enjoys the benefit of money earned in industrial and congested areas.

I want to know, in regard to this financial proposition, is it only how much per cent. one is able to get? Is it beyond the brains of the National Government to tackle something which would at least solve the riddle of the financial obligation before the House? I have been amazed, in passing up and down the country, to listen to arguments here, there and everywhere, but never have I been more amazed in all my life than at the incompetence of Ministers, who run away with the idea that those who ask questions do not know anything about the subject. They seem quite indifferent, because the Government have huge numbers in this House, and those who ought to be here stay outside, being too cowardly to remain in the House to face the issue. We have a Ministry to-day that not only dragoons Members of the House of Commons, but takes no notice of the small minority who put their case forward.

I contend that this matter is of such great national importance that the Government ought to allow a free hand and a free vote to every Member of the House to deal with this particular question with regard to the heavy burden that is now falling upon this country, more especially in regard to the depressed areas. We ought to have from the Government to-night a statement that while this will—and I agree it will—to a certain extent meet the difficulties they will give us some hope that in the very near future this great scheme of raising the depressed areas and adjusting the financial burdens is going to be dealt with. If such a simple outline could be given, there would be no necessity for Amendments, resolutions or condemnations to be passed by this House. If there were more confidence and less in- trigue and trickery on the Front Bench the House would be much healthier.

9.30 p.m.


I have very little to add on the general issue raised by this Bill. The right hon. Gentleman the Minister of Health in introducing the Bill made very high claims for its general principle. He said that there might be marginal questions which might be the subject of very little controversy, and perhaps the subject I raise may come under the category of marginal questions. I hope the right hon. Gentleman will give it his consideration and let us know what the Government propose to do, if they propose anything at all. The object of the Bill, he said, was to put local authorities in the same position as they would have been had the second appointed day not been postponed. I would suggest, in passing, that it is not merely a question of local authorities, because the position of the unemployed men themselves ought to be taken into consideration. It is possible that you might do rightly and fairly by local authorities and at the same time not do so by individual unemployed men. However, if the Bill were to achieve even the avowed object of putting local authorities in the same position as they otherwise would have been, there would not be so much to be said against the Bill.

A very difficult and peculiar situation has developed in fishing constituencies, of which my own is a typical example. The right hon. Gentleman will recollect that share fishermen, that is to say fishermen who are wholly remunerated by share, have been excluded from, and are still excluded from, the unemployment insurance scheme. When the Unemployment Bill was introduced a year ago, and indeed some time before, these fishermen were assured that they would come under the scheme. When the Bill was published it was found that they did not come under the scheme proper, but under Part II of the scheme, that is being within the National Health Insurance scheme. The postponement of the second appointed day, therefore, has had a peculiar effect upon them, because whereas in other cases the postponement of the day has simply meant a question as to which of two sets of machinery the men were going to be dealt with under, in their particular case it has meant that their coming into the insurance scheme has been entirely postponed. They have been buoyed up with hope for over a year at the prospect of coming into this scheme, and now that hope has been deferred and there is no prospect, so far as they can see, of their coming into the scheme in the near future. That has put them in a very serious position, and it has also put the local authorities of the districts in which they live in a very peculiar situation.

Everyone knows that these fishing constituencies have been very hardly hit in the last few years, but the share fishermen, like others, have been averse to appealing to the Poor Law. They have tried their utmost to avoid the Poor Law. Having been told that they were to come under this new scheme, they naturally made greater efforts than ever to avoid coming within the Poor Law, but the position is becoming so difficult that it is doubtful whether they can refrain from appealing to some form of assistance much longer. The postponement of the second appointed day means that they have only the Poor Law to appeal to. That is bad for them and for the local authorities concerned, because the burden of providing these men with assistance has not been taken into account in fixing the ratio of assistance that the local authorities have had previously.

It is almost certain that in the near future those constituencies will have to pay more and more in the way of poor relief to fishermen whom they had hoped, and the fishermen had hoped, would have been taken over by the Unemployment Insurance scheme, as amended by the Unemployment Act. That is to say that they would come under Part II, and to that extent there would be certain relief to the local authorities. I do not know how long it is likely to be before Part II of the Unemployment Act comes into operation, but the longer the date is postponed the greater the problem will be for the local authorities. I would suggest to the right hon. Gentleman that there arises here a new set of circumstances which ought to be taken into consideration, and I would ask him whether he does not think that these constituencies have a special case for consideration, because there is going to be an added burden placed upon their shoulders which has not been taken into account in the previous negotiations in trying to fix the assistance which the local authorities require. The short question that I would put to the right hon. Gentleman is this: Does he not think that in the case of these fishing constituencies there are exceptional circumstances which warrant his attempting to meet their case by special provision to help them over the difficult times which undoubtedly are in front of them?

9.40 p.m.


The debate on the Amendment that we have moved has covered a wide field and led to a few interchanges of opinion between Members on each side of the House. I do not think the Government have reason to congratulate themselves upon the circumstances that have led them to introduce the Bill. If ever the history of a blunder has been recorded in this House it has been the record of the Government's treatment of the unemployed and their attempts to legislate in their interests. For example, an announcement was made that a Bill was to be introduced to deal with unemployment and with transitional payments. That Bill had to be withdrawn, because something was wrong with it, and a new Bill substituted before it had had a Second Reading. We went through the whole procedure upon that Bill, and it was then decided to bring in regulations based upon Part II. The regulations were introduced, and while they were being debated it was discovered that there was an error in the regulations and, like the original Bill, the regulations had to be withdrawn, and reprinted and in the revised form brought before the House. Afraid that hon. Members might not understand the regulations, the Government issued a 10 page explanatory memorandum, but even that 10 page memorandum was insufficient to clarify the regulations, and the Government issued a 32 page memorandum to explain the 10 page memorandum. Right through the whole history of the Unemployment Act and the regulations the Government has perpetrated the most remarkable errors and blunders that any Government that has even been in power in this country has ever been able to perpetrate before Members of the House of Commons.

The Secretary of State for Scotland to-day replied to charges that were made and to criticisms directed against the treatment of Scotland. He made some remarkable statements. I do not expect the Parliamentary Secretary to the. Ministry of Health to reply on any points dealing with Scotland, on which I do not propose to touch much, but I want to say frankly that when the Secretary of State for Scotland brings forward a mass of figures to prove that the Government are actually bearing 95 per cent. of the financial responsibility for maintaining the able-bodied unemployed on transitional payment and on the Poor Law, he is trying to prove too much. He went on to say, and he made a great point of it, that the Treasurer of the Glasgow City Council was going to have presented to him a cheque for £980,000. I want to analyse the cheque which is going to be sent. I hope that I am in the Glasgow City Council Chamber when the Treasurer receives the cheque, because I am certain that he will drop dead with astonishment if ever he receives a cheque for £980,000 from this Government to meet the deficit upon the unemployment burden which the Government have cast upon that City Council.

Glasgow, however, has to give the Government £400,000 so that there is really only £580,000 left out of this cheque of which we have heard, and it is to be borne in mind that the cost of maintaining the able-bodied unemployed in Glasgow during 1933–34 amounted to £2,233,560. But we are told they are to get a cheque for £580,000 to cover that financial responsibility. Talk about bearing 95 per cent. of the cost of the unemployed! That is the position in Glasgow, not to take into account the other areas in the country. Such is the attempt that is being made to arrive at a figure of 95 per cent. If the statement of the Secretary of State for Scotland is the best that can be done by the Government in the way of explanation of this matter to the House, then it would seem that the Government are adding one more blunder to those which they have already committed. This is another blunder added on to the amazing blunder of the Chancellor of the Exchequer in applying the local formula of 11/80ths to Scotland in the case of a national grant on a national issue and only giving £60,000 to Scotland in the distribution of the last grant. Even then, the Chancellor of the Exchequer departed from his own formula. The Glasgow town council only got £40,000, and had the Chancellor applied his own formula to the conditions in Glasgow that town council alone would have been entitled to the grant which was made to the whole of Scotland.

The Government's blunders in this connection show that they either do not understand the problem or that they are wilfully neglecting it and mishandling it in order to create such a position in the country that they can throw up the whole thing and tell the local authorities to look after their own affairs because the Government cannot do any more for them. Imagine in these days resurrecting the formula of a dead and gone Chancellor intended by him to apply to conditions as they existed in his own day. Imagine digging up out of the grave as it were the dead hand of a former Chancellor in order to throttle the Scottish people by applying this 11/80ths principle to a matter which ought to be dealt with on a national basis. Was the Goschen formula imposed upon Scotland when men from the shipyards and the fields were wanted to go into the Army during the War? The Government then did not say that they only wanted 11/80ths of the men of Scotland. When the Conscription was passed there was no provision in it that only 11/80ths of the manhood of Scotland—


May I ask the hon. Member a question?


No, the hon. Member may not—not on this matter. On any other matter arising out of the facts of this case she may, but at present I am criticising the formula.


Is the eleven-eightieths the total grant obtained by the whole of Scotland?


What I am stating now is that there was no question of imposing any formula when men were wanted, either voluntarily or by conscription, from Scotland during the War. Then you took all you could get because it was a national emergency and the formula vanished. This also is a national emergency and the formula ought to be abandoned in this case as well, in order to make up to Scotland what Scotland was deprived of in the distribution of the last grant. The House has heard the figures submitted by the town clerk of Glasgow read out by a former Chancellor of the Exchequer the right hon. Gentleman the Member for Hillhead (Sir R. Horne). When we find the right hon. Gentleman criticising the present Government and the party under which he was formerly a Cabinet Minister, when we find from all sides of the House such statements as we have heard about the conditions imposed on the unemployed, we must wonder why this Government is permitted not only to continue but to ride off on these questions as though they were doing some great and glorious thing.

It is high time that the Government recognised their mistakes and intimated to the House their withdrawal of the regulations. They can pass any Acts they like. They can pass this temporary Measure and keep it in operation up to September or for a period not exceeding six months. They can introduce other Measures of the same kind to follow it but, sooner or later, the unemployment problem will bring down this Government. If the Government take an early Election upon some issue of loyalty and try to make use of the present loyal feeling in the country; if they try to snatch a victory out of all this display of loyalty, they may come back, but the problem will still face them. That problem will ultimately wreck the Government. Sooner or later the country will arraign Ministers who year after year and in Government after Government have failed to apply their minds and energies to the solution of the problem. It is no new problem. It commenced to affect the country severely in 1921 when we sold the German Fleet to the shipowners at a price about three times less than the cost of building new tonnage; when orders were cancelled and men thrown on the streets. From that date until now, with the exception of a period in 1931 and the early part of 1932, unemployment has steadily grown with slight fluctuations until it reached almost the 3,000,000 figure. Under this Government since 1931 it has never gone below 2,000,000. The Government look forward to having 2,000,000 on the unemployment register for years to come.

What a glorious prospect for a National Government with a majority of over 500 in this House. They tell the country that 2,000,000 adults must remain unemployed and that number, with their dependants, must represent anything between 6,000,000 and 8,000,000 people who, we are told, must be dependent on unemployment relief or on the amounts given by the Unemployment Assistance Board. What a wonderful prospect for this great National Government—an admission of failure that would, in any ordinary public company, mean the complete sweeping off the board of directors of every individual who continued to manage the business along those lines. I hope that when we divide on this subject those who believe with us will come into the Lobby with us. Nobody knows when the Regulations are coming in. Even in this Bill the Minister of Health is taking precautions lest by the month of September he is still unable to have the Regulations submitted to the House, by the Minister of Labour. What a wonderful combination that they cannot come to some arrangement by means of which they can settle the new Regulations which will assist the unemployed who have passed out of standard benefit.

This National Government, which saved the Nation in its hour of crisis, is to-night faced by its own crisis by introducing this Bill. That is the crisis of the unemployed, and therefore the Government has not solved the national crisis. The Government has not solved any of the things for which it came in. It came in to save the pound, and it gave away the pound. It came in to save the Gold Standard, and we went off the Gold Standard. I am going to ask, not the Minister of Health, but the Lord Advocate and his colleagues in the Scottish Office to put up a stronger fight for better circumstances for Scotland. After our national programme is over, Scotland is not going to be pushed into a corner, and when we find, year after year and Parliament after Parliament, Scottish officers taking up an attitude which is almost futile as regards standing up for the rights and interests of Scotland, it is no wonder that we find Scottish affairs being treated in the way they are by the Cabinet. I hope that when the question comes to be considered, as I understand the Chancellor of the Exchequer is prepared to consider it, in consultation with Scottish Members, the ratio which is at present applied will be altered and better methods adopted to prevent Glasgow and Hamilton and other towns in the distressed areas of Scotland being treated in the manner they are at the present time, and being left with the burden of maintaining most of the unemployed in Scotland. Then there may be said something in thanks to the Scottish Office, but until then, I think the only thing we can do is to oppose the Government.

9.59 p.m.


I have no complaint at the course this Debate has taken. When we discuss anything which relates to unemployment or unemployment insurance, we all know the deep feeling this vital question evokes. At the same time, I start by saying that I think the case I have to demolish is an easy one. The hon. Gentleman who spoke last will forgive me if I am unable to reply specifically to certain questions he raised. For certain reasons beyond our control the Scottish reply was made earlier, and that was adequate to meet the questions raised by the Scottish Members. There were two points of general application to the whole of Great Britain. The first point was the Goschen Loan. Whatever may be said about the Goschen Loan in other matters, this Bill has no relation to it, and is not framed on it. Secondly, there was a complaint that a limit had been set in this Bill in so far as the arrangement suggested was that it should continue for only seven months to 1st October, or the appointed day, whichever is the earlier. It was at the special request of the local authorities themselves that a limit was put on this arrangement.

Let me deal with some of the other arguments put. They are the old arguments we have heard so often in all these unemployment Debates, which were put forward and met by the Minister of Labour or the Parliamentary Secretary. Firstly, let me start by reminding the House what is the purpose of this Bill. It is a short and simple one, and is to put the local authorities in the same financial position as they would have been in had the second appointed day occurred on 1st March. That is a simple and a narrow issue. The first argument was that we are not doing justice to the local authorities financially because some people said that the financial burdens should be undertaken as though the appointed day had happened much earlier—on 1st October. The hon. Member for Wavertree (Mr. Cleary) in support of that claim said how surprised he was that all local authorities urged the same date. I think we know more than anybody the date the local authorities urged. They urged a variety of dates. No undertaking, no statement, direct or indirect, no spoken words, indeed no evidence, has been adduced in this Debate to show that there was anything more than a pious hope, which, in course of time, had been elevated into a pledge.

The right hon. Member for Wakefield introduced an ingenious argument, as he always does. He quoted the Financial Memorandum to the Unemployment Bill, to the effect that as the Bill continued transitional payment after the 30th June certain things were done which I need not trouble about, but in view of that it was anticipated that neither of the appointed days would be before 30th June, and he elevated that argument into the fact that it ought to be on 1st October. He will forgive me if I fail to follow the argument. I shall read the OFFICIAL REPORT to-morrow with great interest, and I hope I am not doing him any injustice. Now we come to the next argument. We realise that local authorities, rightly or wrongly, did expect that there might be an earlier date, and it is to meet that expectation that we have authorised borrowing for the burden which they bore from October down to 1st March. As soon as we try to help local authorities the right hon. Gentleman comes forward and says "What crazy finance," and he defies us to quote a precedent. The precedent is 1921, when exactly the same thing was done, when local authorities were allowed to borrow for exactly the same purpose.


They sent me to prison.


It was a precedent which was set by one coalition National Government or another.


Is the same thing likely to happen?


The right hon. Gentleman did not recognise the difference between crazy borrowing and borrowing for a specific purpose. His Government proceeded on the Kathleen Mavourneen principle of "it may be for years and it may be for ever." They borrowed over £100,000,000 without any expectation of being able to pay it back. Here the Minister of Health must satisfy himself, in approving borrowing, that it is for the limited period under the Bill and for the specific purpose. There is all the difference in the world. The next point was the old hardy annual of the pledge given by the Minister of Health during the Debate in 1933, that the Government should take over the financial responsibility for the able-bodied unemployed. Hon. Members have only to read the next sentence to see how silly it is to think that a pledge was given. I do not blame hon. Members. It is very difficult when a Minister is explaining a new system for Members to take in the whole implication of it. One can only get one's impression by reading the OFFICIAL REPORT the next day. The hon. Member for Ebbw Vale (Mr. A. Bevan), who knows this unemployment question backwards and forwards, got up afterwards and explained in precise language what he thought the Minister meant. He was right. The hon. Member for Bishop Auckland (Mr. Curry) was not deceived. The hon. Member for West Derby (Sir J. Sandeman Allen), who made such a straightforward speech, against the opinions, I know, of some of his constituents, who have not the same knowledge as he has, as soon as he came back from abroad, read the OFFICIAL REPORT and the position was luminously plain to him. The Government does not mind being blamed for what it does, but it does mind being blamed because hon. Members misunderstand plain statements made by Ministers from this Box.


Would the right hon. Gentleman deal with the sentence of the Minister of Health which I quoted?


The Minister of Health dealt with that sentence. If the right hon. Gentleman is in doubt, let him read the speech of the hon. Member for Ebbw Vale. Within two months of that speech the then Minister of Labour repeated what the Minister of Health had said and made abundantly plain what the position was.


In all parts of the House that night the impression was given that the Government did intend to accept full responsibility for the able-bodied unemployed, and hon. Members voted for the Amendment because they disagreed with me.


That is really not good enough. This is what the hon. Gentleman said after the Minister of Health had spoken: The local authorities at the moment are making a certain contribution and they will still be making a certain contribution by loss of block grant, but they will have no administrative responsibility of any sort. Therefore, although they will be called upon to make a contribution of an unknown quantity for the maintenance of the unemployed, they will not be allowed any voice in the administrative management"—OFFICIAL REPORT, 12th April, 1933; col. 2696, Vol. 276.] Let me explain how much better the position is than was then anticipated. The House will remember the debate on the Second Reading of the Unemployment Bill in December, 1933. When the Minister of Health spoke it was the intention of the Government to take over the responsibility of the administration of Poor Law relief, to relieve local authorities to the tune of £1,500,000. That fact was revealed by the Chancellor of the Exchequer, who went on to say that at that time the cost of outdoor relief as near as they could estimate it was £6,500,000. The cost to-day on the basis chosen in this Bill based on the three winter months for Great Britain is likely to be £8,400,000, so that whereas it was anticipated that the cost would be £6,500,000 for Great Britain, on the basis of this Bill is is anticipated that it will be £8,400,000. Let the House follow the next point. When the Chancellor of the Exchequer spoke in December, 1933, it was estimated that the local authorities would be relieved of £2,600,000. In the issue and on the basis of this Bill local authorities are to be relieved of £5,600,000. Thirdly, when the Chancellor spoke he mentioned the fact that to be relieved of the burden local authorities would be asked to contribute £3,900,000. In the issue and on the basis of this Bill they are being asked to contribute £2,800,000. If hon. Members will put these three facts together they will find that in consultation with local authorities, when all reasonable claims have been considered and largely met, the net result is that local authorities are asked to pay now £1,000,000 less in order to be relieved of a burden which is £3,000,000 more than it was two years ago. These facts speak for themselves.

The hon. Member for Ebbw Vale made a very interesting speech, and if he will allow me to say so I enjoy listening to his speeches because his arguments are so subtle. He would have made a first-class Jesuit. His argument was that it was a very novel procedure that local authorities should be asked to make a financial contribution to the Treasury rather than that the Treausy should make a contribution to the local authorities. There would be something in the argument, if local authorities were asked to make a percentage contribution in respect of a service over which they had no control. But what they are being asked to do is to make a fixed contribution, a contribution which is fixed in relation to a period over which they do have control. There is a difference of principle there. Really, it is only a question—if the hon. Gentleman will listen to my argument I think that he will enjoy it—of machinery. I do not want to go into the case he argued. He is really so subtle that he is missing what is happening under this Bill. Let me put it in simple terms. If I owed him a debt of £3 and he said to me, "I will relieve you of that debt if you pay me £1," I should say "Thank you very much; that is good business for me," and by paying £1 to him I am entirely relieved of my debt of £3. That is exactly the position. Local authorities, by paying one-third of the cost of out-relief, are relieved of the whole burden. In other words, the net result is by basing the grant on the cost of out-relief in the winter months, they are to be relieved in Great Britain of 66 per cent. of the cost. It is no good talking about national responsibility for the unemployed; that is an ideal to which all parties have given lip-service. The only point I make is that of all Governments we have gone furthest towards making that ideal come true.

Let me give the House one or two figures to show what a good bargain local authorities have struck. I agree that in the event they have struck a much better bargain than they anticipated. It is a good bargain. In Durham the annual cost of out-relief based on the winter months is £262,000. The grant they will receive will be at an annual rate of £204,000. By winter months I mean December, January and February. In the West Riding of Yorkshire the cost of out-relief is £132,000, and they will be relieved of £88,000. In the case, of Middlesbrough—I do not think my hon. Friend the Member for West Middlesbrough (Mr. K. Griffith) is as grateful as he should be—the cost of out-relief is £37,000, of which they are to be relieved of £27,000. I think he should be more grateful than he is.


I am still invited by the local authority of Middlesbrough to attend their general meeting of protest, which I gather is to take place on the 16th of this month.


My hon. Friend should know better. After these facts, and in view of my long friendship with him, knowing what an honest and can did mind he has, I shall be extremely hurt if he attends that conference when he knows that £27,000 of a debt of £30,000 is being taken over by the Government. The total cost of out-relief in Liverpool is £990,000, of which they will be relieved of £756,000. We have heard a great deal about the 95 per cent. responsibility of the State; taking the whole field of employment. If you take the whole field of employment in Liverpool, the State is assuming a responsibility for something over 98 per cent.




It is no good the right hon. Member saying "nonsense." These figures can be demonstrated. I agree that the right hon. Gentleman would like to think that they are nonsense.


Can the Parliamentary Secretary give us details of these figures?


I shall be very glad to show the hon. Member the basis on which they are made. Take Glamorgan. The annual cost of out-relief in Glamorgan is estimated, based on those three months, to be £96,500, of which we are taking over £89,000, or more than 90 per cent. of the burden of out-relief. The hon. Member for Merthyr Tydfil (Mr. S. Davies) asked a specific question with regard to the Merthyr figures. He was told that the effect of these financial arrangements will be that Merthyr Tydfil will be relieved to the extent of a rate of 2s. 9d. in the £, and he wanted to know whether that was gross or nett. It is nett. The estimated cost of outdoor relief as regards Merthyr Tydfil is £43,000, of which the Exchequer takes over £27,000. I think I have said enough to show that really the local authorities have struck a much better bargain than they anticipated.


Will my hon. Friend inform me what the figures are for Hartlepool and West Hartlepool?


I have not got them here, but I will let my hon. Friend know.


Can the hon. Gentleman give me the figures for Dumbarton and Clydebank?


I have not got them.


Will he kindly send them to me?


The hon. Gentleman will realise, as I have told him before, that one of the things that I am thankful for is that I am not responsible for him, I will send his request to the Secretary of State for Scotland, and I have no doubt he will hear from my right hon. Friend. May I add that I said that in an entirely complimentary sense? Let me sum up. Concessions have been made to local authorities with the result that a very substantial proportion of the burden of their out-relief, for the first time under this Bill, will be taken over by the State. The whole basis of calculation is in their favour—the fact that we have chosen a standard year when the cost was low compared with the cost to-day, the fact that we fix their contributions for the whole of the period down to 31st March, 1937, at 60 per cent. of the cost in that standard year 1932–3, the fact that we have deducted from the cost in that standard year the distressed area grant, so that the net effect is that that grant, or a large proportion of it, is carried on for the whole of this long period, the fact that we have not deducted anything from the block grant, although we have relieved the local authorities of a considerable portion of their rate- and grant-borne expenditure, the fact that we have based their expenditure now on the winter months and that that expenditure governs the grant, which means that the grant is very much higher than it would otherwise have been, and, on the top of all that, the fact that we have indulged in what the right hon. Member opposite called crazy finance and enabled the local authorities to spread expenditure already incurred over a period not exceeding five years—all this shows, I say, that really we have done well by the local authorities.

The hon. Member for Wavertree (Mr. Cleary) was concerned about the 95 per cent. argument, and he said that before the evening was out the Government would be claiming that the local authorities owed the Government something. I entirely agree. I think the local authorities owe the Government a great debt of gratitude.

Question put, "That the words proposed to be left out stand part of the Question."

The House divided: Ayes, 152; Noes, 49.

Division No. 176.] AYES. [10.25 p.m.
Adams, Samuel Vyvyan T. (Leeds, W.) Goodman, Colonel Albert W. Nicholson, Godfrey (Morpeth)
Albery, Irving James Gower, Sir Robert North, Edward T.
Allen, Sir J. Sandeman (Liverp'l, W.) Graham, Sir F. Fergus (C'mb'rl'd, N.) Percy, Lord Eustace
Allen, Lt.-Col. J. Sandeman (B'k'nh'd.) Greene, William P. C. Preston, Sir Walter Rueben
Anstruther-Gray, W. J. Gretton, Colonel Rt. Hon. John Procter, Major Henry Adam
Apsley, Lord Gritten, W. G. Howard Radford, E. A.
Assheton, Ralph Guy, J. C. Morrison Ramsay, T. B. W. (Western Isles)
Balfour, George (Hampstead) Hacking, Rt. Hon. Douglas H. Ramsden, Sir Eugene
Balfour, Capt. Harold (I. of Thanet) Hamilton, Sir George (Ilford) Rankin, Robert
Barton, Capt. Basil Kelsey Hanbury, Cecil Reed, Arthur C. (Exeter)
Beauchamp, Sir Brograve Campbell Harvey, George (Lambeth, Kenningt'n) Reid, William Allan (Derby)
Beaumont, Hon. R. E. B. (Portsm'th, C.) Haslam, Henry (Horncastle) Remer, John R.
Blindell, James Headlam, Lieut.-Col. Cuthbert M. Rickards, George William
Boyce, H. Leslie Henderson, Sir Vivian L. (Chelmsford) Robinson, John Roland
Boyd-Carpenter, Sir Archibald Herbert, Capt. S. (Abbey Division) Ropner, Colonel L.
Brocklebank, C. E. R. Hills, Major Rt. Hon. John Waller Ross, Ronald D.
Brown, Ernest (Leith) Hope, Capt. Hon. A. O. J. (Aston) Ross Taylor, Walter (Woodbridge)
Browne, Captain A. C. Horsbrugh, Florence Russell, Albert (Kirkcaldy)
Buchan-Hepburn, P. G. T. Howard, Tom Forrest Russell, Alexander West (Tyncmouth)
Burnett, John George Howitt, Dr. Alfred B. Rutherford, John (Edmonton)
Caporn, Arthur Cecil Hume, Sir George Hopwood Salmon, Sir Isidore
Chapman, Col. R. (Houghton-le-Spring) Hunter, Dr. Joseph (Dumfries) Salt, Edward W.
Chorlton, Alan Ernest Leofric Hunter, Capt. M. J. (Brigg) Savery, Samuel Servington
Clayton, Sir Christopher Jackson, Sir Henry (Wandsworth, C.) Shakespeare, Geoffrey H.
Colfox, Major William Philip James, Wing-Com. A. W. H. Smiles, Lieut.-Col. Sir Walter D.
Colman, N. C. D. Jamieson, Douglas Somerville, Annesley A. (Windsor)
Conant, R. J. E. Kerr, Hamilton W. Sotheron-Estcourt, Captain T. E.
Cooper, T. M. (Edinburgh, W.) Lamb, Sir Joseph Quinton Spencer, Captain Richard A.
Copeland, Ida Leckle, J. A. Stanley, Rt. Hon. Oliver (W'morland)
Courtauid, Major John Sewell Leech, Dr. J. W. Stevenson, James
Cranborne, Viscount Lockwood, John C. (Hackney, C.) Storey, Samuel
Crooke, J. Smedley Lockwood, Capt. J. H. (Shipley) Strauss, Edward A.
Crookshank, Capt. H. C. (Gainsb'ro) Loder, Captain J. de Vere Stuart, Lord C. Crichton-
Croom-Johnson, R. P. Loftus, Pierce C. Sugden, Sir Wilfrid Hart
Cruddas, Lieut.-Colonel Bernard Lovat-Fraser, James Alexander Tate, Mavis Constance
Davies, Maj. Geo. F. (Somerset, Yeovil) Lumley, Captain Lawrence R. Thompson, Sir Luke
Dawson, Sir Philip Lyons, Abraham Montagu Thorp, Linton Theodore
Dickle, John P. MacAndrew, Lieut.-Col. C. G. (Partick) Tufnell, Lieut.-Commander R. L.
Duckworth, George A. V. Macdonald, Sir Murdoch (Inverness) Wallace, Sir John (Dunfermline)
Duncan, James A. L. (Kensington, N.) McEwen, Captain J. H. F. Ward, Lt.-Col. Sir A. L. (Hull)
Dunglass, Lord McKie, John Hamilton Ward, Irene Mary Bewick (Wallsend)
Ellis, Sir R. Geoffrey Maclay, Hon. Joseph Paton Warrender, Sir Victor A. G.
Elliston, Captain George Sampson Manningham-Buller, Lt.-Col. Sir M. Wells, Sydney Richard
Emrys-Evans, P. V. Margesson, Capt. Rt. Hon. H. D. R. Wills, Wilfrid D.
Fielden, Edward Brocklehurst Martin, Thomas B. Wilson, Lt.-Col. Sir Arnold (Hertf'd)
Ford, Sir Patrick J. Mills, Sir Frederick (Leyton, E.) Windsor-Clive, Lieut.-Colonel George
Ganzoni, Sir John Mills, Major J. D. (New Forest) Wise, Alfred R.
Gillett, Sir George Masterman Molson, A. Hugh Elsdale Young, Rt. Hon. Sir Hilton (S'v'noaks)
Gilmour, Lt.-Col. Rt. Hon. Sir John Moreing, Adrian C.
Glossop, C. W. H. Morris-Jones. Dr. J. H. (Denbigh) TELLERS FOR THE AYES.—
Goff, Sir Park Muirhead, Lieut.-Colonel A. J. Sir George Penny and Sir Walter
Goldie, Noel B. Munro, Patrick Womersley.
Adams, D. M. (Poplar, South) Brown, C. W. E. (Notts., Mansfield) Cove, William. G.
Attlee, Clement Richard Buchanan, George Cripps, Sir Stafford
Batey, Joseph Cleary, J. J. Davies, Rhys John (Westhoughton)
Bevan, Aneurin (Ebbw Vale) Cocks, Frederick Seymour Davies, Stephen Owen
Dobbie, William Holdsworth, Herbert Nathan, Major H. L.
Edwards, Charles Jenkins, Sir William Paling, Wilfred
Foot, Dingle (Dundee) Kirkwood, David Rea, Walter Russell
Gardner, Benjamin Walter Lansbury, Rt. Hon. George Rothschild, James A. de
George, Major G. Lloyd (Pembroke) Logan, David Gilbert Smith, Tom (Normanton)
Greenwood, Rt. Hon. Arthur Lunn, William Strauss, G. R. (Lambeth, North)
Griffith, F. Kingsley (Middlesbro', W.) McEntee, Valentine L. Tinker, John Joseph
Griffiths, George A. (Yorks, W. Riding) Maclean, Neil (Glasgow, Govan) White, Henry Graham
Griffiths, T. (Monmouth, Pon'ybool) Mainwaring, William Henry Williams, Edward John (Ogmore)
Groves, Thomas E. Mallalieu, Edward Lancelot Williams, Thomas (York, Don Valley)
Grundy, Thomas W. Mason, David M. (Edinburgh, E.) Wood, Sir Murdoch McKenzie (Banff)
Hall, George H. (Merthyr Tydvil) Maxton, James
Harris, Sir Percy Milner, Major James TELLERS FOR THE NOES.—
Mr. John and Mr. D. Graham.

Bill read a Second time.

Bill committed to a Committee of the Whole House, for Monday next.—[Sir G. Penny.]