HC Deb 24 October 1935 vol 305 cc468-80

10.27 p.m.

The MINISTER of LABOUR (Mr. Ernest Brown)

I beg to move, That the draft of the Unemployment Insurance (Increase of Benefit in respect of Dependent Children) Order, 1935, laid before Parliament on the twenty-second day of October in pursuance of the provisions of sub-section (4) of Section 59 of the Unemployment Insurance Act, 1935, be approved. I have been charged with the pleasant task of moving this Motion. I was thinking just now, when looking at my hon. Friend the Member for Chester-le-Street (Mr. Lawson), that he does not often envy a Minister of Labour his task, but I am sure he would like to be in my place for the next hour or so. I do not mean that I am going to occupy an hour, but I am anticipating that one or two hon. Members may follow me, and if any points are raised with which I have not dealt, my hon. Friend the Parliamentary Secretary will deal with them. I have noticed one or two comments upon the production of this Resolution and the Order to which it will give effect if the House gives its assent. I have heard it described to-day by the right hon. Member for Wakefield (Mr. Greenwood), in vivid and heated rhetoric, as an election bribe. It is astonishing what a small dose of cold fact will do to a mass of heated rhetoric. The fact is that in pursuance of my statutory duties I was bound, when Parliament reassembled, to produce this report and an Order based on it, but for the purposes of the future I had better put it on record in terms. The Act says: Within the period of two months after the receipt by the Minister of any report under this section or, if Parliament is not sitting, at the expiration of that period, then as soon after the expiration thereof as Parliament sits, the Minister shall lay the report before Parliament, and in a case where the report contains recommendations for the amendment of this Act or of any previous order made under this section, shall after consultation with the Treasury lay before Parliament— Then follow two provisions requiring, first, the laying of a draft of an order, and secondly, if there be disagreement with the recommendations of the Committee, a statement of the reasons which the Minister has for disagreeing. I am sure there are Members in this House who will not take that point at all, because they know the statutory law, but they will take the other point, and they will say, "You received the Report on the 10th July; why could you not make it effective before the House rose for the Summer Recess?" I will deal with that point a little later, because there is an explanation, a very vital one, which they themselves, if I happened to agree in this Resolution with the one particular recommendation of the Committee contained in a proviso, would have tried to make a major issue in the electoral contest that is before us. If hon. Members agree, as they do, that that was a grave and profound issue, what charge can possibly lie against any Minister who says that a short three weeks was not time enough before Parliament rose to consider all the implications of that issue, to which they themselves, if the effect had been otherwise, would have attached tremendous importance. The issue is quite simple. The Statutory Committee, which is charged with looking after the destinies of the Insurance Fund under Part I of the Act of 1934, made me a report. It is not my duty to-night to deal with the report except for one recommendation in it.

The report considered the condition of the fund. It is a very pleasing duty for me to inform the House that the fund is solvent, that there is a certain reserve, and, more than that, that the Committee, surveying the whole trend of events have, after making a forecast for a period of eight years in succession, come to the conclusion that, allowing for a certain figure of standard reserve, there is a disposable surplus of nearly £1,500,000. They recommend one thing after considering a number of things, namely, that the dependant's insurance benefit to children under Part 1 of the Act shall be raised from 2s. to 3s. There is a difference between now and two years ago. It is one thing to put a figure in an Act. It is an entirely different thing to have the money in the till. The money, owing to wise policy, is in the till, and the recommendation follows. I may be asked how many families will be affected. It will affect on the average 240,000 households weekly, and an average weekly number of children to the extent of 500,000. That is the proposition which I lay before the House in asking it to agree with this recommendation of the Committee.

There was, however, a proviso, and it is that proviso and its contents that caused what my hon. Friends would call the delay. It is the reason why the order was not made in July. As I have said, when Parliament did meet, I had to lay this Order, whatever the contents, whether favourable electorally to the Government or not, on the first day that Parliament assembled. In the course of a long argument, which I will not detain the House to describe, the Committee laid down a proviso that there should be an over-all limit to the amount of benefit payable, which they suggested should be 41s. The House will observe two things. The first is that that limit is unique in the insurance system. It has never been imposed in the whole history of unemployment insurance, and I do not need to say more than that to emphasise the gravity of the issues raised in a proviso of that kind.

The other point, which is perhaps just as important from the point of view of a consideration of policy, was that not only should there be this over all limit, but that there should be an actual figure expressed, namely 41s. The effect of this would be twofold. At the moment there are a small number of households with very large families which get more than 41s. a week. Some draw as much as 46s. so that if the proviso were accepted by the Government, if I had not put in a statement disagreeing with the proviso, it would have meant an actual cut to a small number of large families of anything up to 5s. In the second place, if the "stop" was at 41s. there would not be the full allowance to the larger families. The 41s. level was struck at a family consisting of five children or more.

I have figures here showing how the scale will work out in the case of families of more than five, without the proviso. This will be the new rate as compared with the old: man and wife and one dependent child, old rate 28s., new 29s. Man and wife and two dependent children, old rate 30s., new rate 32s. Man and wife and three dependent children, old rate 32s., new rate 35s. Man and wife and four dependent children, old rate 34s., new 38s. Man and wife and five dependent children, old rate 36s., new 41s. Man and wife and six dependent children, old rate 38s., new 44s. Man and wife and seven dependent children, old rate 40s., new rate 50s. Man and wife and nine dependent children, old rate 44s., new rate 53s. Man and wife and 10 dependent children, old rate 46s., new rate 56s. [Laughter.] Hon. Members cheer ironically and may be inclined to ask how many families will be affected. It is estimated that the families under the scheme above the five-children level number some 10,000, and that above eight there are some 1,000 families.

I must add two other things. The Committee, in their report, do not urge the principle of the over-all limit on financial grounds. The 10,000 families with over five children and the 1,000 with eight children will make no substantial difference to the financial arrangements. The Committee urge it on very grave grounds of public policy. I would add that the Government have disagreed with the proviso without in any way deciding for or against the general issue which the Committee raised. We have come to the conclusion that that issue should be left open for further consideration, and we have therefore decided, as is set out in the statement which accompanies the Draft Order, not to accept the Committee's recommendation that there should be a limit of 41s. on the amount of benefit paid in any individual case.

If the Motion on the Paper is carried I propose to give effect to it at the earliest date at which it is administratively possible, and therefore it will take effect from 31st October, and the first payments will be made on the 7th and 8th November. I can only say one more thing. It was the very grim duty of the first National Government, as one of its first actions, to impose cuts upon the pay of the unemployed. It is my very pleasant duty, in moving the last motion in this Parliament, to move this Resolution which increases dependants' benefit for households under Part I of the Act.

10.40 p.m.


At the outset of his remarks the right hon. Gentleman mentioned the fact that he had a pleasant task to perform. I can assure him that I know too much about the work that he has to do in his Department to begrudge him a pleasant duty. I shall not use hard words about this matter. I am pleased that something is coming to the unemployed, but when I hear of the coincidence of this procedure on almost the last day of Parliament with the date on which it is to be granted, simple as I am I think that that coincidence amounts almost to a miracle. The right hon. Gentleman tried to explain why he did not give a decision before the House rose in July. I did not see any ground in his reasons, and I thought it was extremely mean. It is true that he received the report on 5th July, but will the Minister of Labour say that he did not know the contents of the report before the 5th July? I do not think he will. Before these reports are made there are comings and goings. Anyone who knows anything about departments is aware that the right hon. Gentleman would be almost in a position to make up his mind when the report was signed. I do not begrudge the Government this election opportunity, since it brings something to the people concerned, but I do not think that the Minister will expect either ourselves or the people outside to believe that there is not a very direct connection between the period when it is decided to pay and the election. The right hon. Gentleman said that the Act of 1934 was responsible for bringing the fund into a solvent condition. That is not correct, of course.

Mr. BROWN indicated dissent.


No, it is not correct. The right hon. Gentleman has to bear in mind that one of the factors in bringing the fund into a solvent condition is the people who will not benefit by this provision, who are excluded because of the operation of Part II of the Act and the previous Order on the subject of the means test. It was not due to the 1934 Act at all. In 1931 the workers' contribution was increased. From 5th October, 1931, to 30th September, 1935, the increased contribution of the workers to the fund amounted to £24,500,000, which the workers had found out of their wages. I asked to-day at Question Time what was the amount saved by the 10 per cent. reduction from the 5th October onwards, and was told that it amounted to £15,000,000. That is, altogether, £39,500,000 which has been paid by the workers in extra contributions and in reduced benefits over the past four years. Now the worker himself, after paying nearly £40,000,000, is going to be given £1,250,000 back. I am pleased that he is going to get a little of what he has himself paid. The right hon. Gentleman told us how many families are going to get the benefit of this award, but he did not give us the number of individual beneficiaries. As far as I can gather from the Ministry of Labour Gazette—


It affects 210,000 households. That is the weekly average.


But there are something like 1,000,000 people who are outside the fund altogether. What is going to be their position? In their case, instead of an opportune shilling at a particular moment, there is not even to be a statement as to what their condition is going to be in the future under these regulations. While, therefore, we on this side welcome any little amount that comes to the unemployed, we wish to make it quite clear that that amount simply represents payments that the worker has made himself, and it totally ignores the greater part of the unemployed whose condition is far more lamentable, namely, the long-term unemployed. While we welcome what is being done, I think we are entitled to underline the fact that, while the Government have been ready at this moment to come to some decision on this matter, they have failed to come to any decision on matters affecting the large number of unemployed who need most attention.

10.48 p.m.


The Minister of Labour has been subjected to so much criticism recently on the ground of procrastination and delay that neither his friends nor his opponents in this House will grudge him his pleasant task this evening of recommending to the House the acceptance of the proposals made by the Statutory Committee. My hon.

Friend the Member for Chester-le-Street (Mr. Lawson) could not resist the temptation to suggest that this is something in the nature of an electioneering expedient, but my right hon. Friend has had as much experience of electioneering as any Member of the House, if not more, and he would know full well that, if the intention of this proposal had been an electioneering expedient, it would have been so crude and blatant that it would have defeated its own end. It would have had the same effect as the revision of the Tea Duty just prior to the Election of 1929.

I am very glad that it has been possible to make this recommendation to the House. I am very glad that the Statutory Commission appear to have adopted the principle that the first charge upon any surplus in the Fund should be devoted to remedying the indefensible anomaly of the children's allowances. That has been an utterly indefensible position since the scales of the Unemployment Assistance Board were fixed in a great many cases considerably in excess of the existing scale. I am very glad for another reason, for this Motion if accepted by the House can never be rescinded, because public opinion in this country would not stand for that. When we were discussing the provisions of the Bill which ultimately became the Unemployment Act, there was no item which was the subject of keener debate, or of more agreement, than the question of the children's scale, and if the House of Commons had been given an opportunity of expressing an unfettered opinion then we need not have been discussing this Motion to-night, because effect would have been given to it at the time. My right hon. Friend said it is not his duty to-night to discuss the report on which this recommendation is based, and I agree with him. I should like however to express a tribute to the committee for the nature of the report they have submitted. It is a very valuable contribution to public knowledge on this all-important subject. In some respects it is somewhat a somber report, because it appears from it that there is less resiliency in the Unemployment Fund than one would have been led to expect from a study of the unemployment position, and also it indicates the great difficulties there will be—and this perhaps is the most valuable thing in it —as to where we may look for the development of more unemployment in the future. It is an important report, and one I hope that will be read by every Member of the House.

I should like to make this suggestion to my right hon. Friend. I have always felt, and I am sure other Members have had the same feeling, that it is rather lamentable that we have to spend such a long time in so many acrimonious discussions in regard to this very vital matter of rates of benefit. The suggestion I would make is that when the House reassembles after the poll he should endeavour to explore the possibility of finding means of ascertaining points of agreement in this matter, to limit the area of disagreement and widen the area of agreement and to see whether we cannot reach a settlement by agreement which will be within the capacity of the nation to pay and also acceptable to those in need.

10.53 p.m.


In my political life there has been a tremendous change in public opinion on this matter. I remember when the hon. Member for Bridgeton (Mr. Maxton) and I entered this House some 13 years ago—I was even more callow than I am now—we were almost in our early days in a scene because the children's allowances then were only 1s. Public authorities to some extent supplemented that amount. Those were the figures when we first entered the House of Commons and it says much for the diverse interests and for the agitations of one kind and another that to-day at least public opinion in the great mass of the common people has succeeded in having the rates increased to this amount. I cannot altogether compliment the Committee on the language in this report. I wish those who write these reports would remember that simple people like me have to read them. My education is of a very meagre kind—not that of attending the London School of Economics. I beg those who write these reports to make them simpler and more easily understood.

The common fallacy persists that the unemployed have had their cuts restored. I read in a newspaper to-day that more than the cuts have been given by the increased children's allowance. By far the greatest attack on the unemployed was not the 10 per cent. cut but the cutting down of the period of standard benefit from a year and four months to six months and the application alongside that of the means test. Teachers, doctors, Members of Parliament and everyone else have had their cuts restored in toto. The unemployed are the only section of the community whose cuts it is not even proposed to restore.

We got this document on 10th July. What grave issues of public policy kept you from making up your mind there and then as to the three shillings? The Minister cut the ground from beneath his own feet. He said the Government had decided neither to reject nor to accept the recommendation. Why should they wait for six months to decide nothing? Why should we wait six months for them to make up their mind? That is what has been done in regard to this matter. The position is that they have decided nothing. I could understand some considerable time being taken if the Government were going to say, "We are turning the Committee down" or "We are accepting the Committee's recommendations." The Minister said that they were not doing either of these things but leaving the whole question in abeyance. What is to hinder him from coming to a decision on the question of the 3s. I have listened to all the discussions about Abyssinia and the League of Nations. You are only giving countries about 10 days to make decisions of vital consequence on the question of sanctions. Questions affecting peace can be decided in a few weeks, almost days, but we are told by the Minister that on the question of 2s. as against 3s. it must take six months. Is there anybody who, in fairness and decency, can say that on sanctions and grave issues the Government must act, and act swiftly, and yet on a question of giving 3s. per child, on a question almost of life and death to a parent, they must consider the matter for six months?


If it had been done before, the decision would have been taken in less than three weeks.


The Minister, long before he received the report, was exercising his mind on the question of the 3s. His predecessor said at that Box that he was not against the 3s.; in fact he said that he was in favour of it, and that the only question was one of finance. The financial consideration has been solved, and yet they took three weeks to make up their minds to do nothing. To-day they rush in with this proposal on the eve of an election. I see a distinguished Scottish lawyer sitting opposite. If he had the case to argue in the Scottish courts he knows that there would not be a judge who would not take the view that, if the Government had wanted to do this, they could have made up their minds 18 months ago. The time has come when something ought to be said in regard to the cost. It was said by an hon. Gentleman behind—and I must correct him because in these cases he is so manifestly fair—that the time had come when the first charge on the fund should be for children's allowances. That is not the first charge on the fund. The first charge is the redemption of the debt.


The words I used were "a first charge on any surplus."


The first charge is the debt, and the time has arrived when the debt on the fund of £100,000,000—it is slightly decreased now—should be lifted. I understand that one of the planks of the Government in the Election is a £250,000,000 loan for national defence. Would anybody dream of placing that charge on any one section of the community? No. It is national defence. This £100,000,000 debt was incurred in unemployment relief, a national charge, not a charge against the fund, but a charge against the whole nation. The whole thing should be wiped out and put as a national charge in the same way as any other national debt.

One thing is very urgent and that is the question of the relationship of this scheme to the Unemployment Assistance Board. It is going to raise a shocking position. In Glasgow the position will be severe. I welcome the Minister's decision not to put on the maximum for the family. If this country is going to emerge into the question of birth control it ought to do so freely, with all the issues put clearly before it, and not by some side door. I am concerned about the position in my own city, and the same conditions apply elsewhere. In Glasgow there is a 40s. maximum for the family. That is what went on under the old means test. To-day the new Board are governed by that maximum to some extent under the standstill order. You are going to have a family where the husband may be just out of work, and next door in the same tenement close in the same street, paying the same rent, there may be a family where the husband has been eight months out of work, and yet that family is going to receive 1s. a week less for each child than the other family, which will receive 3s. per child. The thing is not defensible. I know that some Board scales are a little higher, but that is what happens in Glasgow.

This allowance is not given to the man but it is a sum of money to the child of the unemployed person. Whatever differences there may be between hon. Members opposite and hon. Members on this side we ought to agree to lift the children outside the battle. What defence is there for giving the child of a man who has been a year or more out of work 1s. a week less than the child of a man who has only been a week out of work. It is not a question of arithmetic but the human consideration of the child. The increased allowance to 3s. is introduced to give the child a better chance. Why differentiate against the child of the man who has been 12 months or two or three years out of work, the child, say, of the Durham collier or of the Glasgow shipworker, with their years of unemployment?

I say that this House should insist, in the dying hour of Parliament almost, that at least those on transitional benefit should have the 3s. The Order makes an improvement for some people and to that extent I welcome it. I do not know what the fates have in store for us, but I trust that the electors throughout the country will see that the unemployed are decently and humanely treated. Are we not to have a reply from the Under-Secretary or anyone?

Mr. E. BROWN rose


We were told the Under-Secretary was to reply. It is most unfair.


I assure the hon. Member there was no discourtesy intended, but—


Surely we may be told something about the standard benefit, and that the children are to get the 1s. We have had eight hours on Abyssinia. Surely we can have five minutes on the children.


I thought we were to have some reply before the Debate closed.


I do not think it would take the hon. and gallant Gentleman many minutes.

The PARLIAMENTARY SECRETARY to the MINISTRY of LABOUR (Lieut.-Colonel Muirhead) rose


I must point out that this Order deals only with the Unemployment Insurance Act, and the question which the hon. Member for Gorbals (Mr. Buchanan) raised, dealing with transitional benefit, is definitely out of order.

11.12 p.m.

Lieut.-Colonel MUIRHEAD

I do not think there are many points to which to reply. The hon. Member for Chester-le-Street (Mr. Lawson) raised questions which have been dealt with by my right hon. Friend. The hon. Member for Gorbals (Mr. Buchanan) presumed that my right hon. Friend had complete foreknowledge of what was going to be in the report. I can only say that when a report is received on a certain date, no presumption should be made that the Minister knew what was in the report before it was issued. If the hon. Member went into the matter he would find that his presumption was not well founded. The hon. Member for Chester-le-Street thought we had brought this proposal forward in the form of a bribe, but he cannot have it both ways—that we were producing a good thing as a bribe and that the good thing was in fact a bad thing. It is not a bribe. It is simply the result of sound finance, which is directly attributable to the sound general policy of the Government during the last four years. The hon. Member also asked what would happen to the people who were not getting it. That is always an argument which is used. We generally find the argument, "Why did you not do it earlier?" and in the second place the argument, "You are doing it to benefit certain people but there are others who will not get it." If we were to proceed on those lines, of never doing any- thing unless we do it early, and never doing anything if anybody will be a little better off than someone else, we should never get very far with any measures of social reform. I sympathise a little with the hon. Member for Gorbals in his difficulty about the reports, but I do not think he is such a simple fellow, when he reads official reports, as he tries to make out he is. I am reminded of a phrase of Cobbett's with regard to machinery, that he never looked at a machine without being tempted to understand it. When it comes to official reports that temptation is almost invariably removed.

No one has objected to the regulation. When we consider the setting in which this recommendation is placed, the circumstances which surround it—it is the result of the recommendation of an independent body—and that it is the result of sound finance and a solvent financial position, we can safely recommend the order to the House.

Question put, and agreed to.

Resolved, That the draft of the Unemployment Insurance (Increase of Benefit in respect of Dependent Children) Order, 1935, laid before Parliament on the twenty-second day of October in pursuance of the provisions of sub-section (4) of Section 59 of the Unemployment Insurance Act, 1935, be approved.

The remaining Orders were read, and postponed.