UNEMPLOYMENT (BENEFIT AND ASSISTANCE). (Hansard, 18 November 1937)

§ Mr. Ellis Smith
We desire to produce evidence, within the short time at our disposal, of the need for an increase in benefit and allowances for the unemployed of this country. We are raising this question because of the large number of resolutions which have been passed by municipalities, trade councils, and other organisations throughout this country, and we are raising this question for the following main reasons: First, we consider that the present standards are already too low. We consider that it is not the fault of the men and women that they are employed, and that it is most unfair, unreasonable and mean that their dependants, and particularly their women and children, should be allowed to suffer the mental torture which they are suffering at the present time because of the already too low benefits. We say that there is no justification in the year 1937 for the maintenance of these standards. We are raising the question, secondly, because of the large surplus in the Unemployment Fund. According to statements recently made, the approximate state of that fund at the end of this financial year will be £60,000,000. We contend that the fund could well afford an increase of at least 10 per cent. in unemployment benefit and dependants' allowances in order to keep pace with the increased cost of living.
We are raising this question, thirdly, because we consider that the Government should give instructions to the Unemployment Assistance Board that, owing to the increase in the cost of living, the benefits 721 and allowances paid by the Board should should be at once increased. We are not asking the Government to take our evidence of the need for this. We ask them to be good enough to turn to the report published by the Unemployment Insurance Statutory Committee dealing with the 1935 period. If the Minister will turn to page 16 he will find the following words: If at any time a further surplus were available, we should not exclude investigation of the need for extending the period of benefit or easing the conditions for re-qualifications. On page 17 they go on to state: Though the responsibility for final decision rests not with us but with the Government and Parliament, we are required to make a definite recommendation. Our experience is that when it is left to this committee to report the whole issue is prejudiced, and when their report comes before the House the Government accept it and automatically, owing to their large majority, they are able to carry the recommendations without alteration. We would be lacking in our duty at the present time if we did not raise this issue before the Statutory Committee came to a decision in order that they can consider the evidence produced in this House, the national assembly of the people. On page 20 the committee state: Broadly speaking, the longer an individual has been unemployed, the greater his need for benefit or assistance, because his other resources will have been exhausted. On page 21 they say: Any increase of unemploymer t benefit rates in general should now be made only after full consideration by Parliament as an act of deliberate social policy. In view of the relative improvement in trade there is no excuse for not putting into operation the suggestions of the committee. If he looks at page 30 of the report the Minister will see that all the evidence suggested that the time had now come for an increase in unemployment benefit and allowances, and that the only evidence against that view was that given by the National Confederation of Employers. On the basis of that report alone, and without bringing forward any other evidence, we say that the time has now come for an increase.
It is generally agreed that there has been an increase in the cost of living, and that makes the matter one of urgency. The other day I was reading "Lloyds Bank Review," which published 722 official figures showing that the rise in the cost of living in the past six years had been at least 10 per cent. What is often lost sight of by those who have not experienced these conditions themselves, or have not been in close contact with the people for whom we speak, is that the smaller the income of a family the larger is the proportion of it which has to be spent on food. Those who have suffered most from the rise in the cost of living are those who with relatively low wages, and those who have to depend on unemployment benefits and Unemployment Assistance Board allowances. "Lloyds Bank Review" says also that in certain areas the cost of living has risen more than in other areas. Had there been time I could have quoted the figures, but I wish to give the Minister adequate time in which to reply, and I hope that I shall be excused if I do not give the figures which otherwise I should have produced. According to that Review the increase is greatest in those areas where there is a bigger proportion of unemployed than in the relatively prosperous areas in the South of England. In Scotland, in the North-East, the North-West and certain parts of the Midlands, where the relative number of unemployed is greater than in the South, the cost of living has gone up higher than elsewhere.
The Minister has told us, in answer to a number of questions, that in the case of those coming under the Unemployment Assistance Board he intends to leave things to the discretion of the officers of the Board. I understood that the main purpose of the Act setting up that Board was to bring about uniformity of administration throughout the country, but the granting of increases to meet the rise in the cost of living is to be left to the discretion of the officers, the main purpose of the Act will be defeated. It will lead to varying interpretations in different parts of the country of the Circular which has been sent out. We say there is only one right way to deal with the matter, and that is for the Minister to give instructions that the scale of benefits shall be increased. It is not fair to the officers of the Board to leave it to their discretion. Feeling is very high in those centres where the number of the unemployed is high, and as a result of the public feeling and the pressure of public opinion the officers, who, generally speaking, are trying to administer the regulations in as 723 generous a way as possible, will be placed in a most difficult position. We, therefore, say that benefit and allowances should be increased and a circular be sent out by the Ministry of Labour through the Unemployment Assistance Board.
Some few months ago the Trades Union Congress were in consultation with the Minister of Labour on this question. The Trades Union Congress sent a letter to the Minister of Labour, who replied and the Congress sent a further reply. Since that day, the Congress have not received any further reply, despite the fact that the position has become worse since the correspondence took place. Ministers quote at various times Trades Union Congress reports when it suits them to do so. I ask them to be good enough to examine further reports which have been published by the Trades Union Congress dealing with the issue which we are now raising, and I am prepared to leave it to them, if they will give these reports the same consideration as they have given to the others.
In these days, unemployment is not the fault of the individual. I know the people of this country as well as do most people, and I say without hesitation that 99 out of ion unemployed men and women would run to a job to-morrow if it were offered to them. If hon. Members accept that statement, and I am sure they would if they knew the unemployed, let me ask them why it is that people are unemployed. First of all, we say that it is because of the social system. But it is no use talking about that to-night. I am concerned to-night about immediate results. The Staffordshire Employment Exchanges conducted an investigation on their own a few months ago, and the conclusions they came to were published in the "Staffordshire Sentinel" on 27th August, as follow: Investigations by the North Staffordshire Employment Exchanges have revealed some interesting facts regarding local industries and provide evidence of the degree of mechanisation and rationalisation in the main source of employment in the district. Figures for the present year, compared with those for so years, show that in the colliery industry there has been a decline of 25 per cent. in the number of men employed, despite the great increase in production, the greater output and the present boom. There is a slight increase in the numbers employed in the colliery industry, although in this industry production has also considerably increased. 724 The fact is that the increase in production in British industry is relatively greater than in any other country in the world. We, therefore, say that rather than let the unemployed exist on the benefits that they are receiving, having regard to the increase in the cost of living, to the present £60,000,000 surplus in the unemployment fund and to the mechanisation and rationalisation which has increased output and improved the competitive position of British industry in the world market, this House would be lacking in its duty if it did not bring this issue to the front and ask the Government to use their influence with the Unemployment Assistance Board and the Statutory Committee so that the unemployed might live in better conditions than they have at present.

§ The Parliamentary Secretary to the Ministry of Labour (Mr. Butler)
I should like, first, to register my agreement with the natural anxiety of the hon. Member for Stoke (Mr. E. Smith) about the conditions, especially of those who are living on assistance or insurance benefit; but I cannot share to the same extent as he does the feeling of pessimism about present conditions. He must remember that, despite the increase in mechanisation which he fears so much for his own district, and which we have had an opportunity of seeing for ourselves during this autumn, with that increased mechanisation there is a larger number of people employed than ever before in this country. That is an important fact for those people who dread the arrival of machines to remember. However, it is not for me to enter to-night into a disquisition on machinery and I will at once come to the subject of his complaint. When questioning the Minister on 11th November, the hon. Member gave notice that he would raise this question at an early date and I am much obliged to him for choosing to-night, which happens to be convenient from our point of view. The resolution passed by the town council of the City of Stoke-on-Trent reads as follows: This council urges the Minister of Labour to reconsider his decision respecting his refusal to increase the benefit to those in receipt of unemployment assistance benefit out of the accumulated surplus in the Unemployment Insurance Fund and the Unemployment Assistance Benefit Fund. 725 I should point out a confusion of thought in that resolution, because it is shared by a good many people. The resolution supposes that it is possible to pay out of the Unemployment Insurance Fund money for unemployment assistance. I must make it clear that it is not out of the surplus of the Unemployment Insurance Fund that assistance is paid. Assistance is paid direct from the Exchequer and is based on need. That is the whole underlying motive of those who assess the need of those who need assistance. Therefore it is very confusing that this council should have passed a resolution from which it may be thought that money for assistance can be paid out of the reserve or surplus of a fund which is intended to relieve unemployment by insurance, and I want to make that point perfectly clear at the beginning. I should like also to make clear the distinction between assistance which is based on need and insurance benefit which is worked out on an actuarial calculation according to the contributions paid into the fund.
Having got this point clear, I think we can see that there is confusion in the resolution, but I do not want to spend the whole of my time over the resolution. I will come to the point raised by the hon. Member about unemployment assistance. He does not like the method suggested by the Board, which my right hon. Friend has announced in this House, and which is contained in the circular issued by the Board, a copy of which is in the Library. It instructs the Board's officers to deal with all cases on their merits, and the Board desire special attention to be given to households where a substantial part, say, not less than half, of the total household income, is represented by the allowance from the Board. We are informed that the Board expects that in many households an addition of from 2s. to 3s. would meet the requirements, if the household is of normal size and composition, and a larger or smaller sum may, of course, be added, where the circumstances of the case warrant. We thought that those instructions were the most sensible that could possibly be made under present conditions. At present, the Board's officers are engaged in carrying out those instructions. This is a definite attempt to help by unemployment: assistance families which may he adversely affected by rises in the cost of living. We 726 think that this is the most successful way of dealing with the problem of those living on assistance.
The hon. Member said he thought the object of the Act and the Regulations was to introduce uniformity of administration. So it is. We have uniformity of administration, and the board is carrying out a system of relieving those in need, unrivalled and unequalled in the history of this country. I have seen in counties all over the country the board's officers at work, and I cannot pay too high a tribute to the manner in which each household is investigated personally by the officer. The whole success, I think, is based on the personal attention given by the officers and the Advisory Committee.

§ Mr. E. Smith
Will the hon. Gentleman say a word, before the time expires, on the insurance method?

§ Mr. Butler
The hon. Gentleman can always trust me to cover all points. I am coming to the insurance side. On the administration side, I think this method is best.

§ Mr. T. Smith
I suppose we may take it, that that is the hon. Gentleman's last word?

§ Mr. Butler
The hon. Member can take it that we support the action of the board, which we think is best. At the request of the hon. Gentleman, I come to the question of insurance. The Unemployment Insurance Act provides, as the hon. Gentleman knows, that the Statutory Committee shall, at the end of the financial year, review the whole problem of the financial condition of the fund. They are further empowered, before making any financial report, to give notice of their intention, and to take into consideration any representations made to them. I can tell the House to-night, in reply to the hon. Gentleman's anxieties, that the Statutory Committee have every intention in the near future to give this notice of their intention and to take into consideration representations which we hope will be made to them before the end of the present year. The hon. Gentleman will see that notice issued in due course over the next few days, and that Committee, I am informed, will take into consideration representations, as they have done in the past.
727 This matter of reporting to the Government upon the state of the fund is a statutory duty laid upon the Insurance Committee. They will perform it, I am sure, with the same ability as they have done in past years, and they will, I am sure, report, as they have in the past, upon the condition of the fund as they see it at the end of this financial year. When they report, the Government will give their report the same anxious and close consideration that they have given to previous reports which they have received from them. The hon. Gentleman quoted various extracts, into which there is no time to go in detail, from their report of 1935. I may remind him that since those remarks were made by 728 the committee they have themselves reduced the waiting period and have reduced the contributions. Therefore, the optimistic remarks made by the Insurance Committee were thus carried out. The hon. Gentleman no doubt hopes that the committee will make further remarks which have a similar desirable effect. That I cannot foretell. I can only tell him that it is the committee's intention to receive immediately representations, as it is their statutory duty to do, and then to report at the end 0# the financial year. It will then be for the Government to consider what they have said.