HC Deb 05 March 1936 vol 309 cc1680-92

Order for Second Reading read.

9.30 p.m.

The FINANCIAL SECRETARY to the TREASURY (Mr. W. S. Morrison)

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

In the course of the discussions on the Financial Resolution on which this Bill is founded I explained that, the purpose of the Bill is to give effect to an agreement between the Treasury of the United Kingdom and the Finance Ministry of Northern Ireland. The purpose of the agreement is to attempt to equate somewhat the burden of unemployment which falls on the Exchequers of Northern Ireland and the United Kingdom. Northern Ireland is a district which has its own peculiar problem of unemployment. It is a problem similar to the problem which exists in many parts of the United Kingdom where the industrial population is chiefly dependent for employment on one or two main industries. In the United Kingdom, where coal and shipbuilding are the main industries, if anything happens to depress those industries you have a heavy increase of unemployment. In Northern Ireland the two main industries are linen and the shipbuilding trade, and these have been in recent years depressed, with the result that Northern Ireland has a burden of unemployment on it which is comparable with the burden falling on some of our own special areas. In the United Kingdom the charge for the relief of unemployment is met by the Unemployment Insurance Fund, fortified as it is by the contributions which flow into it from the more prosperous industries.

In Northern Ireland, which has only these two industries, the burden is very acute. With the separation of the two Exchequers which took place when the Government of Northern Ireland was established in 1920, the two insur- ance funds were separated and there is no way of equating the burden except by an agreement of this character. In the course of the discussion on the Financial Resolution I went in some detail into the Agreement, and the finance involved. It was obvious that there were two points in particular which interested hon. Members. I think I am justified in saying that hon. Members opposite did not challenge the propriety of securing that the standard of unemployment benefit provided for the citizens of Northern Ireland should be the same as that for the citizens of the United Kingdom. But hon. Members expressed anxiety on two important points. The first was that referred to by the hon. Member for Chester-le-Street (Mr. Lawson) and the hon. Member for Gorbals (Mr. Buchanan) among others, who urged the point of view that a simpler method of dealing with the problem would be by amalgamating the two funds. Several hon. Members expresed the view that as the operation of the Agreement in present circumstances involved the transfer of money to Northern Ireland, there ought to be some control from Whitehall over the administration of unemployment insurance in Ireland so as to secure a proper expenditure of that money.

I believe it would be in accordance with the desires of hon. Members if I were to try to explain the reasons which have prompted us to come to a different conclusion about those two very important and debatable points. First, there is the question whether the funds should be amalgamated. I would like to make it clear that the opposition to this course does not come from Northern Ireland. My hon. Friend the Member for Down (Sir D. Reid) has expressed his entire concurrence with that view, and the opposition to that course is founded upon considerations which I shall briefly indicate. The short answer is that the Act of 1920, which established a separate Legislature and Government, provided for a separation of the funds, and, in general, for the administration of what we may call comprehensively the social services by the Northern Ireland Government, and the agreement we are now considering was, of course, constructed by the parties out of the existing framework created by that statute, which contemplated the separate administra- tion of the fund and of the service which is included in unemployment insurance and unemployment assistance.

I am aware that the hon. Member may say to me that that is not a complete answer, because what Parliament has done it can undo, and there is nothing to prevent legislation altering that provision, but I submit that such an alteration would be contrary to the whole spirit of the Act of 1920, which was that the social services should be administered by Northern Ireland and not by Whitehall. If the course of amalgamating the funds were followed grave administrative difficulties would have to be faced. The work of unemployment insurance involves a great deal of local activity, and it is not the sort of service which can be run from a centre without a great deal of specialised local assistance, in order that the broad lines of administration may be fitted to deal with the actual conditions in localities. For example, the work-finding function of Employment Exchanges would be greatly complicated if the funds were amalgamated, and, as a necessary corollary, the whole of the work of unemployment insurance and of the exchanges were controlled from this country. I offer those observations as an indication of the sort of difficulty that might arise. In the field of unemployment assistance one has to work with the co-operation of local authorities, and it would be a prospect not devoid of great difficulty if the central authority for the working of this service were to be in London and had to deal with local authorities in Northern Ireland. Certainly that would be the case within the present framework.

The last consideration is the financial effect of this proposal. The object of the agreement we are considering is to equate, as far as may be, the Exchequer contributions. The excess of cost of this particular service to Northern Ireland is to be shared between the Exchequers of the United Kingdom and of Northern Ireland in the proportion of three to one, that is, 75 per cent. of this excess is to be contributed by the United Kingdom Exchequer and 25 per cent. by that of Northern Ireland. In other words, it is a proposal for dealing with a burden which falls on the taxpayers of the two countries—because the agreement casts a burden upon the taxpayers of the two countries. If, instead of adopting this method, we were to amalgamate the funds it is true that the excess cost falling on Northern Ireland would be met, but it would not be met by the taxpayers of the two countries but by the resources of the Unemployment Fund of Great Britain. The burden would be borne by a limited class of taxpayers of the United Kingdom, namely, those who contribute to the Unemployment Fund—the workmen, the employers and the Exchequer—and would not be shared among the general taxpayers as a whole. If this heavy excess were to be borne entirely by the Unemployment Fund I can see that it might be such a heavy burden on the fund as to reduce its ability to provide benefits in the United Kingdom.

Mr. MAXTON

The Government are proposing to reduce contributions.

Mr. MORRISON

If this excess cost had been cast on the Unemployment Fund in this country, it might have been an impossibility to make the reduction in contributions lately proposed. With regard to the question of control, I have very great sympathy with the desire manifested by hon. Members to secure control over expenditure emanating from the Exchequer of this country. That is a sentiment which will always strike a favourable echo in the breast of anyone speaking for the Treasury. Again I say that control established in this country would be contrary to the spirit and the letter of the Act of 1920, but, apart from that, I would not like this House—taking into consideration the general character of our contribution to Northern Ireland, because I conceive it to be a fair and generous apportionment—to think because the sum proposed under this agreement is a considerable sum that we shoulder anything like the whole cost of unemployment insurance in Northern Ireland. Of course we do not. The great bulk of the money that goes to provide the service of unemployment insurance and unemployment assistance in Northern Ireland is found in Northern Ireland. Not only have the employers and the employed to pay their contributions, but the Exchequer of Northern Ireland has to bear its due proportion of the total expenditure of Great Britain and Northern Ireland, taken together, before it can qualify for any contribution under this Bill. Even then Northern Ireland gets only 75 per cent. of the excess; the remaining 25 per cent. she has to bear herself.

It is clear, in the way that I look at it, that it would be very difficult indeed to have Whitehall supervision over a service in Northern Ireland the bulk of the cost of which is defrayed out of purely North of Ireland money. It is not a proposal which is likely to work smoothly, and for these reasons it is not one that I feel the House ought to adopt at the present time. Let is not he thought that because I am now arguing against this sort of detailed control in the administration of the fund in Northern Ireland, that we are leaving the matter entirely at large. If hon. Members will consult the Schedule to the Bill, which is the agreement, they will find that Article 7 provides: If at any time the classes of persons insured or of persons entitled to apply for an unemployment allowance the rates of contribution the rates or conditions of benefit or the regulations under which allowances are paid or the general method of charging administrative expenses or the method of financing the Unemployment or Unemployment Assistance Funds differ in Great Britain and Northern Ireland there shall be made such adjustment, if any, in the amounts of the contributions from one Exchequer to the other as the Joint Exchequer Board, after consulting the Government Actuary, may consider just. The effect of that article is roughly this: The whole of this agreement, upon which the contribution is payable to Northern Ireland, rests upon the assumption that the rates and conditions of unemployment benefit and unemployment assistance will remain the same, that the general system will remain the same in Norther Ireland as here. Any variation of that system will, by Article 7, bring up the question of contribution again. The assumption of the whole agreement is that there will be a uniformity between this country and Northern Ireland. I would ask the House to accept as the best guarantee that the fund in Northern Ireland will be administered with the same standard as obtains here, the fact that Northern Ireland has in fact throughout these years, even when the old agreements broke down and she got no assistance from this country, maintained as good a service of unemployment insurance as has obtained here. That record in the past in this small part of the United Kingdom is the best guarantee the House can have that there will be no important variation in the standards of administration between this country and Northern Ireland.

These are the considerations which I would advance to the House in support of this Bill. It is hoped that this new agreement will provide a permanent basis for the adjustment of contributions between this country and Northern Ireland. There are many points in the agreement to which no doubt hon. Members would like to draw attention, but I would ask hon. Members to note that by an exchange of correspondence between this country and Northern Ireland it has been agreed that in certain conditions the question can be re-opened. That is to say, if at any time our liability under the agreement exceeds £1,000,000 the question can be re-opened, and if any change in legislation affects the whole basis of the agreement the matter will be open to review. I put forward this Bill and the agreement scheduled in it as something which the House may well consider to be an attempt to regulate the relations of the Exchequer of Northern Ireland with the Exchequer of Great Britain so as to provide that the standard of life in this important matter of unemployment insurance and assistance shall remain the same in every part of the United Kingdom.

9.50 p.m.

Mr. LAWSON

This is the third Bill of this kind that has appeared before the House since 1920. The hon. Gentleman has assured us that this will be a permanent agreement and probably the last of its kind. The hon. Gentleman has no more right to say that than any other financial secretary had before. If the speech of the hon. Gentleman, in which he practically said that they could not give any further consideration to the question of the amalgamation of the funds, is any guarantee of the real mind of the Exchequer, the sooner the House brings the Government up against this problem and insists on a settlement of it, the better. The problem has arisen from the Act of 1920, under which Northern Ireland became responsible for the conduct of its own unemployment insurance machinery. They did not do that because the Act of 1920 was passed, because they could have still remained within the insurance system of this country, but they deliberately chose to become a separate entity in unemployment insurance. They thought, what many of us thought, that the basic industries then appeared to be going concerns and that they would be able to have an insurance system and an income which would place their fund in a superior position to that of the general fund in this country.

There were in this country people in the basic industries who thought the same thing. Economic events have not justified their view, nor have they justified the view of the people in Northern Ireland. To their dismay, therefore, they had to come cap in hand to this country to ask for some help. Then this Government devised the means of the agreement in order to give the necessary help to maintain the fund of Northern Ireland on the same basis of contributions and benefits as we had in this country. I like the wording of this Bill, which follows that of other Bills with reference to this question. It says that provision has to be made with a view to assimilating the burdens on the Exchequer of the United Kingdom and the Exchequer of Northern Ireland in respect of unemployment insurance. I like the word "assimilating." When we are talking about the equalisation of rates as between the Special Areas and the rest of the country, I am going to suggest to hon. Gentlemen that we should talk about assimilating, because, as far as I can gather, the difference between equalisation and assimilation is that you do not get anything if you call it equalisation, but if you call it assimilation you can be sure that you will get a fairly large chunk of financial help. There would have been no need for any agreement had it not been for the Government's 1934 Act. The strange thing about Northern Ireland is that our electors decide what their unemployment insurance will be. Every time we have a change in insurance systems in this country Northern Ireland has to follow suit. It has been rather amusing to me, as a Member of the Labour Government, to watch the Northern Ireland Conservatives following the Socialist Government in their unemployment insurance legislation.

Lieut.-Colonel Sir WILLIAM ALLEN

There is some good in Socialist legislation.

Mr. LAWSON

At any rate, the Northern Ireland legislation has been changed every time it has been changed here. Previously, up to 1929, the grants were based upon the relative population of the two countries. Under this agreement the unemployment insured population is the basis of calculation. That is the reason for the new agreement. What does the Bill do? The Financial Memorandum said that the total annual payments from the Exchequer of the United Kingdom to that of Northern Ireland under the agreement had been, in 1925 (six months), £706,000; in 1926, £879,000;in 1927, £296,000; in 1928, £483,000; in 1929, £346,000; in 1930, £547,000;and in 1931, £165,000. I understand that in the first year of the new agreement we shall have to pay £722,000 and that afterwards there will be a blank cheque so far as new conditions are concerned, subject to the number of unemployed. I do not think that the North of Ireland representatives in this House will deny that there is any more right for this country to grant this money to them than to any other State or Dominion within the British Commonwealth of Nations.

Sir DAVID REID

Certainly there is. Northern Ireland is part of the United Kingdom. No other State or Dominion is.

Mr. LAWSON

For the purpose of unemployment insurance Northern Ireland is not part of the United Kingdom. They have definitely placed themselves on a separate basis. I will not carp over this matter, because I intend to ask my hon. Friends to support the equalisation of benefit for workers; but we do not agree that the Financial Secretary's speech is the last word on this subject. There must be either amalgamation or control. We cannot go on continually this way. I do not think there is any real argument why there should he grants made to Northern Ireland any more than to any other State or Dominion within the British Commonwealth of Nations. It is a very serious matter that we have not control over this question. The Financial Secretary used various arguments as to the difficulties of taking over the North of Ireland machinery, such as the Employment Exchanges, etc. There is no difficulty in that. There would be no more difficulty in our running the North of Ireland Employment Exchanges and conducting all the activities than there would be in running them anywhere else in the United Kingdom. It is very probable although one does not like too much centralisation, and without casting any reflection upon the Northern Ireland machinery, that the whole organisation would be run far more efficiently from this country as the centre than it is run at the present time.

Since I last spoke on this subject I have received several letters from Northern Ireland. In Northern Ireland there are always difficulties in regard to such things as religion, and I gather that there is complaint that through the exchanges when work is given out special privilege is given to people of certain religious persuasion. I do not know what there may be in that complaint, but there is always danger of that kind of thing taking place there. Northern Ireland have a peculiar problem of their own in that respect. I would ask hon. Members representing Northern Ireland to give us some guarantee that they will do what they can to see to it that no particular prejudice is shown towards people because of any political views they hold or because of the religious creed they profess. I do not know what the Financial Secretary can do about that matter, but it is something over which we ought to have some control.

We shall not vote against the Bill, which gives equal benefit as well as equal contributions, but I hope that the Financial Secretary will have a fresh look at the problem. He has convinced himself that this is the last Bill of the kind. It is not the last Bill. I can see the possibility under the rearmament measures of the Government that North of Ireland shipyards will benefit to some extent, and if they become prosperous Northern Ireland will have to return some money; but I would draw attention to the fact that they have already had something like £3,500,000 without returning anything. There is no guarantee in this Agreement that this country will get anything back. The only straight thing to do will be to have an amalgamation, or, failing amalgamation, some control. I hope that, so far as the giving of work through the exchanges is concerned the Financial Secretary and the hon. Members from Northern Ireland will see to it that no prejudice is shown against any men because of their political or religious convictions.

10.3 p.m.

Mr. BUCHANAN

On this Measure, although the temptation is great to go outside it, I shall refrain from discussing issues other than those directly concerned in the Bill. In connection with North of Ireland Measures one is always constrained to criticise the Government of that country. One almost feels instinctively a desire to oppose such a Measure because of the type of Government in Northern Ireland, but I will refrain from doing so to-night because it would not be fair to the people who live under the Government of that country. Northern Ireland is part of the United Kingdom, but one cannot but feel that there is constantly a difference of treatment between that which we give to Northern Ireland and Southern Ireland. Only a few years ago we entered into a bitter feud with the Irish Free State over a comparatively miserable sum about annuities, a feud which upset industry and commerce.

Notice taken, that 40 Members were not present; House counted, and 40 Members being present—

Mr. BUCHANAN

I always feel a cynic on these matters. When we are discussing unemployment insurance we usually get a handful of attendance from certain hon. Members, and we have seen that to-night. When we discuss problems of defence, for which the unemployed are usually the first people called upon, we usually have the House packed. I feel that these issues are as great and as important as those of defence, and some of us feel that on the questions of land annuities and the Government of Northern Ireland there have been two different kinds of treatment and unnecessary friction.

There is the question touched on by the hon. Member for Chester-le-Street (Mr. Lawson), who mentioned the difficulty of religion. Far be it from me in this House to add to the difficulties of the people of Northern Ireland. I have lived there, and I know some of their difficulties and problems, but I would say to the representatives of Northern Ireland here that there is a feeling among a certain section of people there that they are not quite getting a fair deal under this scheme. They may be wrong, but when the Government are making a grant of money raised out of national taxation, quite apart from creed or race, they have a peculiar responsibility on them to see that there is no religious test or difference when public money is concerned. I do not want to cast any reflection on the Northern Ireland Government, but there is a feeling—it may arise out of other issues—and the people who have communicated with me have possibly paid the Treasury a greater tribute than they are entitled to. They feel, whatever may be the faults of the Treasury, that if they make inquiries, at least on religious matters, they will have no bias. I therefore ask the Financial Secretary on the matter of these tests at least to ensure, in the granting of public money, that representations are made to the Northern Ireland Government to see that nothing of that kind creeps in on the question of giving work—I know the Government have no power over an employer granting a job—and to see that as far as possible in this matter, and in the payment of benefits, these questions are not allowed to intervene.

There is another point. I think the Financial Secretary will carve for himself something of a future, and I want to say to him, without arrogance, not to prejudge his future by starting to discuss matters about which I think he needs a little more coaching than he has had. On the question of the difficulties of administration, let me say that there are not half the difficulties in administering unemployment insurance in Northern Ireland than there are in his native country of Stornoway. There, in Stornoway, you have 50 times more difficulties —the language difficulty, for instance, the difficulty of fisher girls, etc., which far transcend the difficulties in Northern Ireland. The great bulk of the Northern Irish population is confined to Belfast and to Derry, where the problem is practically the same as in Liverpool, Newcastle, and Glasgow.

I think the hon. Gentleman is right in not opposing this Bill, although the temptations for us to do so are great, but to punish anyone by voting against this Measure because we have some political difference with these people would be wrong. I was always in dread in this House when we were opposing these Regulations and the coming of the new system under Part II. I thought the one case for Part I was Belfast, and I lived in dread lest Belfast would be quoted against me, because the one matter on which the two religious sides entered into a common cause was in the treatment of Poor Law relief in Belfast, and Part II did mean much better treatment for the able-bodied poor in Northern Ireland.

Therefore, I do not want to oppose this Bill, but the hon. Gentleman should give us some chance of making representations in these matters. For good or ill, a large section of the population of Northern Ireland think that in these matters they have not got representation. Some of us have a union with a large membership in Northern Ireland, and we feel that on issues arising there we should have the right to make representations, through some Treasury official, to the Northern Ireland Government. We feel that in making representations across there we do not possibly get the satisfaction that we might get otherwise.

I find to-night a unanimity which I wish was always to be found here. Only a few weeks ago I had to suffer the whole opposition of this House with regard to the insurance of agricultural workers, when Members here defended different rates of benefit for those workers. To-day they stand here and say they want uniform rates for workers in Northern Ireland and workers here. I want uniform rates for all workers. I think an insurance scheme ought not to differentiate between abode and abode or occupation and occupation. I remember that on another occasion a man who now occupies a place at the other end of this building led us to oppose a certain Measure. I dodged it on that occasion by the not very creditable step of abstaining from voting. I think I ought to have voted with the powers that be at the time, but I did not do it. I should certainly have been led to oppose the Measure, but I felt that it would give rise to difficulties that were possibly unnecessary.

The Northern Ireland. representatives have been very generous, and have not made the stir that they could make about this Bill, and I feel that in return they are entitled to a certain generosity in regard to relief for the poor of Belfast. What I am afraid of is the possibility of the Belfast Corporation being too niggardly rather than too' kindly in their spending. The Labour party have a right to ask from the Government of Northern Ireland generosity in the treatment of their people. I have had one or two complaints about the want of uniformity in the scheme, and have written to the Government of Northern Ireland about them. If I do not get satisfaction I shall try to raise them here, since we arc now voting this money, but I trust that the Government of Northern Ireland will take our conduct on this occasion, not as an indication that we are giving way to any kind of fear, but as an evidence of generosity which I hope they will return, not only in their dealing with unemployment insurance, but with the terrible question of religious persecution, and that they will see that the minority, who hold their views strongly, are treated with a kindness and toleration that will bring to an end the present terrible conditions and place Northern Ireland on a higher level than it has occupied hitherto.

Bill committed to a Committee of the Whole House for Monday next.—[Sir A. Lambert Ward.]

    c1692
  1. CONSOLIDATED FUND (No. 1) BILL. 13 words
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