UNEMPLOYMENT INSURANCE ACTS, 1935 TO 1938.

HC Deb 28 March 1939 vol 345 cc1998-2009

10.8 p.m.

Mr. Lennox-Boyd

I beg to move, That the draft of the Unemployment Insurance (Increase of Benefits and Reduction in Contributions) (Agriculture) Order, 1939, laid before this House on the ninth day of March in pursuance of the provisions of Subsection (4) of Section 59 of the Unemployment Insurance Act, 1935, be approved. This Order is the outcome of a very highly satisfactory state of affairs, and I think I need make only a brief statement upon the present position of the agricultural account of the fund and the changes in contributions and benefits which the Order proposes. Last year the excess of income over expenditure was £949,000, and upon the last day of last year there was an accumulated reserve of £2,774,000. The reasons for that balance and for that excess of income over expenditure are well known to all Members, and it is the view of the Statutory Committee that the following changes are required. Contributions in respect of those of 18 years and over will be reduced by 1d. from July, 1939, to July, 1942, and thereafter by ½d. That means that men over 21 will until July, 1942, pay 3d. instead of 4d., and afterwards 3½d.; that women over 21 will pay 2½d. and later 3d.; that young men between 18 and 21 will pay 2½d. and later 3d.; and young women 18 to 21 will pay 2d. and later 2½d. The object of the change in the next three years is partly to reduce the present large balance and return to industry as early as possible some of the past contributions levied in excess of requirements.

In regard to benefits, very substantial benefits are recommended. The benefit for men of 21 and over will be raised by 1s. from 14s. to 15s., and for women by 6d. from 12s. 6d. to 13s. For men between 18 and 21 it will be raised by 1s. from 12s. to 13s. and for women between those ages by 6d. from 9s. 6d. to 10s. The benefit for boys from 17 to 18 will be raised by 1s. 6d. from 6s. to 7s. 6d., and for girls by 1s. from 5s. to 6s. Of those under 17, boys will in future receive 1s. more, that is 5s., and girls 6d. more, that is 4s. In addition the benefit for adult dependants will be increased by 2s. from 7s. to 9s. This, of course, involves a change in the maximum sum that could be received by way of benefit by an unemployed agricultural worker. There have been many arguments urged in favour of raising this maximum figure, and now an unanswerable reply is advanced because of the changes in the benefits, and also because of the fact that since the fund was first instituted there has been a very substantial improvement in the value of wages in the average agricultural county. Under the new arrangement a married man with two children will receive 30s. Hitherto that has been the maximum even for a married man with three children, but he will now be in a position to receive 33s. This is an improvement which, I think, will commend itself to the House.

These changes will involve a decrease in the income of the fund on the agricultural account of about £380,000 a year for the first three years from July, 1939, and later £190,000 a year, while there will be an increase in the expenditure at once of £78,000 and later of £101,000. We propose to start the higher benefits immediately, on 30th March, if the House agrees to-night to this Draft Order, but the lower contributions are not to begin until the new unemployment books are issued early in July this year. I need not deal with the problem of long hirings, which has already been raised, and I hope that the arguments in favour of the change proposed which I put forward upon the Bill to which we have just given a Second Reading have adequately met any doubts and difficulties in people's minds.

I commend this draft regulation to the House because it carries a stage further the work of restoring the common status to the agricultural worker. I have always held the view that there is no logical reason why the agricultural worker should not have been given the advantage of unemployment insurance. The discrimination against him was removed two years ago and now the opportunity has arisen, because of this surplus, to increase still further the advantages given to him. We are dealing with the men and women upon whom our survival as a great nation depends. One of the most important among contemporary political problems is how to get more people back to the land to maintain them and to keep them there at adequate wages. Not the least of the methods whereby that can be achieved is the proposal which I now commend to the House. While there will be no pause in our proposals to bring agricultural revival, I think that this draft Order is a real contribution towards the task in which all parties are united.

10.15. p.m.

Mr. T. Williams

I am certain that this Order will receive the universal assent of the House, but the Minister cannot congratulate himself on this Order having been possible. While we are all anxious to improve the benefits and the general situation as affecting agricultural labourers in what we have been doing for the past 18 months or two years we have not given the agricultural worker who was unemployed the benefits to which he was entitled. Instead of doing something to keep the skilled agricultural labourer on the land, as the Parliamentary Secretary said they were doing, the separate scheme for agriculture, with the miserably low benefits, tended to decrease the number of skilled workers on the land, for during the past two years there has been no diminution in the numbers that have left the land. We understand that in 1936 the Government were taking a. leap in the dark. The actuary had no figures upon which he might make a fairly safe calculation, but the Government at that time were not only timid, they were actually mean to agricultural labourers. The result has been more or less disastrous to agriculture, since the number of young men who might have been kept on the land has decreased and the town has had its unemployment increased accordingly.

I said in 1936 that the contributions were high enough for such lowly-paid workers and that the benefits were too low. I disputed the prophecies of the Government about a 7½ per cent. unemployment figure, and fortunately that figure, which was accepted by the actuary and the Government, has been reduced to only about 5½ per cent. Instead of the estimate of a surplus of £831,000 in the first 18 months, we have a surplus of £2,770,000 at the end of two years. It is easy for the Statutory Committee to make recommendations of this kind to improve benefits and to decrease the weekly contributions, but during those two years we have been paying to men over 21. either married or single, only 14s. per week. I said in 1936 that to offer benefits of 14s. a week to a person who was legitimately unemployed was to compel him to sponge on poverty-stricken homes and that, instead of doing so, he would march to the town or the city and we should lose our best skilled labourers for all time. The estimates have gone wrong, but they have gone wrong fortunately in the right direction. Unemployment has been far less than was anticipated by the Department or the Minister, but there has not been as much unemployment actually in agriculture because the labourer who has fallen unemployed has automatically migrated somewhere else and obtained a situation. The real numbers, therefore, have not expressed themselves at the Employment Exchanges.

The recommendations of the Statutory Committee are thoroughly acceptable, and as the Parliamentary Secretary said, we are anxious to see this scheme constantly develop. We want to see not only the benefits increased, but a new relationship between the general scheme of benefits and the benefits paid to unemployed agricultural labourers. The increased benefits are acceptable to those who have been in receipt of so little in the past, but if one examines them closely one sees that they do not mean very much even now. The young man between 18 and 21 who falls unemployed is still to receive 13s. a week with the addition that this Order makes. Imagine a man of that age, a big, strong, hearty young man, falling out of work for four or five weeks in December and January, when the numbers, according to the statistics, are increasing every year, and who has to hang on in his rural area on 13s. a week. It is not a very great encouragement, even with the addition. Boys between the ages of 17 and 18 require good food and all the encouragement that parents can give to retain them at home, even with the increase, which amounts to 1s. 1d. per day. Between the ages of 17 and 18 the increase will be 10 d. per day. It is true that those increases are very welcome but they are not as much as we desire.

I would add one word about the Government side of the scheme. I said in 1936, and I have to repeat it in 1939, that when farmers are to be dealt with the Government are rarely known to be ungenerous, but when agricultural labourers are to be dealt with the Government have never been known to be really generous. In 1936, the contribution paid by the Government for every person over 21 in the general scheme was 10d. and the contribution paid under the agricultural workers scheme was 4½d. Since that time, the contributions for the person of 21 years of age or over have been reduced by ½d. per week and the Government incidentally make a saving. This order further decreases the contribution to 1942, and then half the decrease will come back, and so we go from 4d. to 3d. and then back to 3½d. Between 1939 and 1942, as a result of the reduction in contributions, the Government are going to save annually about £130,000 or £140,000. In other words, while they are reducing contributions to the agricultural labourers Unemployment Insurance Fund, and while they are supposed to be giving the unemployed agricultural workers increases of benefit, the Government are actually saving for the Treasury as much as they are giving to the agricultural workers in increased benefits. [AN HON. MEMBER: "No."] Approximately, yes, and I am sure that the right hon. Gentleman will not deny the statement that I am making.

One of the things emerging from the recommendations of the Statutory Committee, as I stated at this Box in 1936, is that the Government were all wrong when they granted a rebate for long hirings. My statements were right. The Statutory Committee told us that to pay out £10,000 in rebates has cost not less than £12,000 in administration. It has cost us £12,000 to pay a rebate of £10,000 to farmers to hire their labourers for a long term. I am glad that the Government are accepting the recommendations of the Statutory Committee and are abolishing the rebate for long hiring. Those who clamoured most for a rebate were those farmers who engaged their labourers for a long period and who told the Statutory Committee that unemployment was much less in their areas than in other areas. All their statements have been proved to be false because, as a matter of fact, where long hiring has taken place unemployment has been larger than in other areas where the workers were paid weekly or in other ways.

I welcome the improvement that has taken place. If the Government still want to keep agricultural labourers on the land they will not only do something to stabilize prosperity in agriculture but will encourage the skilled men and the younger generation to remain on the farms by providing them with reasonable conditions and by not separating so sharply the conditions obtaining in towns from those obtaining in rural areas. That situation has gone so far that it has now become a menace to farmers, and they would do almost anything to produce the appropriate number of skilled labourers on the land. I know that the Minister of Labour can do little in this respect, but, so far as benefits are concerned, he ought to bear in mind the fact that benefits must not be regarded as having too close a relationship to wages. The wages of agricultural workers have always been too low; they are too low to-day; and when we are considering benefits which are only very occasional benefits, we ought not to forget that, if an agricultural labourer loses a week's wages of 32s. or 33s., it is not too much to allow him, if his family is large enough, to have as much benefit as if he pursued his normal avocation. We welcome these improvements, and look forward to the day when they will be increased even more.

10.27 p.m.

Sir Thomas Rosbotham

I want to congratulate the Minister of Labour on the success of this scheme. I have been on many a deputation to Ministries of Labour to make strong requests that the agricultural worker should have a system of unemployment insurance, but we were always told that it would require new legislation, and the matter was shelved. I think it is right that we should now offer to the Minister some congratulations. His office is one of great difficulty, and he does not get many favours shown to him. He will probably recall a deputation of one that waited upon him. That deputation of one was the Member for Ormskirk, and I told him then that I was certain that, if he pressed forward with an unemployment insurance scheme for agricultural workers, he would have a substantial balance. To-night that has been proved to be the case, and I am sure the Minister is gratified by the success of the efforts that he put forward to get this scheme on the Statute Book.

Like the hon. Member for Don Valley (Mr. T. Williams), I wish that agriculture could be so prosperous that the men would remain on the land, and that they would be better paid. We know that many men have left the land to work on the new road schemes, because they could get better pay. We want to be in a position on the land to pay our men as much wages as they are paid on these road schemes, and I trust that every effort will be put forward to bring prosperity to the land. These men who work on the land are very worthy men. They are real craftsmen. Let anyone who has never had hold of a plough before try to plough a straight furrow and see what a mess he will make of it. The agricultural worker cannot only plough a straight furrow in the literal sense, but also in the moral sense. He is a fine type of man, and deserves every support. I wish again heartily to congratulate the Minister on the success he has attained. I trust that, when an accumulated balance arises again, something will be done for the elderly men by way of a grant that would enable them to go on to a cottage holding and spend the rest of their lives in peace.

10.30 p.m.

Mr. Turton

I rise only to ask one question. What puzzles me is the position of women under this agricultural insurance scheme. In my own division—the North-Eastern division—I find that the unemployment among women is about 63 per cent., whereas that among men is 7 per cent. I cannot understand this large proportion of women unemployed under the agricultural insurance scheme. Some divisions have a rate of unemployment of only 14 per cent., yet in the North-Eastern area it is 63 per cent. The feeling among the agricultural workers is that, while they are anxious for the women to have an insurance scheme, they do not want the women to be an undue burden on the scheme. If the Minister can explain the high rate of unemployment among women it will give some satisfaction.

10.31 p.m.

Mr. John Morgan

I am sorry to be obliged to put in a cautionary word about the balance that has accumulated. To me it is a danger signal an indication that a dual scheme of unemployment insurance is proving to be an instrument for driving away from the land men who otherwise would stay. The amount that has accumulated is significant. I believe that the actuarial framers of the scheme were not so far out; that there has been that amount of unemployment in agriculture, but the affected men have left the industry in order to qualify in the general scheme. They have earned their general stamps, and have then left on the cards the agricultural insurance stamps that have not been utilised. They have had no benefit from the stamps, numbering fewer than 20, that may be on the cards, and these have simply gone to the credit of the Fund. The men have left the land, and have been seeking the benefits of the general scheme. I believe there will be no advantage from all this until there is one scheme for agriculture and for industry as a whole. This is borne out by figures published in the "Labour Gazette" for August and September, which indicate that the number of men working in agriculture between the ages of 21 and 45 are considerably fewer, proportionate to the numbers employed, than in general industry. They have left the farming industry to go out to other industries, in order to qualify. And the reason is clear from the benefits paid in this scheme, for 13s. a week for a man of 20 or so out of work leaves him no alternative but to find another job elsewhere. His agricultural insurance card is worth nothing to him in that sphere; he must earn his stamps in another line of life. Any improvement in benefits, or any lowering of the contribution from 4d. to 3d. will not affect this drain of men from agriculture.

I think a scheme which segregates the agricultural worker in this way tends to accentuate the very thing we are against, the special treatment of agriculture and agricultural workers, and it tends to affect the whole position in a way that cannot be regarded with satisfaction. I believe the main point is that this accumulation does not indicate that unemployment has not been as acute in the industry as was allowed for at the beginning of the scheme. We are faced with the fact still—and I think the Minister can confirm it—that we are losing men at the rate of 1,000 a month from the industry at the present time. They are drifting into these other industries, and the point is that there is no machinery to enable the men to drift back again. Once a man has earned his insurance card in general industry, he has no inducement to come back into agriculture on that basis of benefit.

The argument that is created by this surplus is an argument not for offering lower contributions. Actually we ought to be seeing the contributions rise in order to enable the agricultural worker eventually to qualify in the general scheme. The lower the payment you call upon him to make, if you get him down to 3d., the easier it becomes for a low wage to stand the deduction of that low payment. But if you are forcing up the amount of weekly stamps on the cards, you will be bringing the agricultural worker nearer to being brought within the scope of the general scheme, which, I believe, will be the only solution in the end.

The little support that we get from this scheme in the direction of forcing up wages is to the good. In three counties at least they are going to be able to pay unemployment insurance in excess of the wages laid down by the agricultural committee, and in the case of nearly half the counties the benefits for the unemployed man will be within 2s. 6d. a week of the county wage laid down, and that anomaly will not be countenanced for long. It will mean that the increased benefits are going to force up the wage levels in the agricultural industry, and for that we are glad. Therefore, I suggest that, if we could have kept up that type of pressure through the instrument of unemployment insurance, it would compel the agricultural industry to face up to the postiion of paying a higher wage to its workers. Not that I am complaining that the farmer is not paying the wage that he should. That is not the present point. It is that I believe that any pressure of this kind will force the country as a whole to face up to the real state of agriculture. If you perpetuate conditions which allow low insurance benefits to support low wages, you remove part of the case of agriculture for proper treatment in this House and the country as a whole. We have to build up the case for agriculture to pay a better wage, and if we can make the farmer approach it in that way, he must be forced to support the case which is being built to pay higher wages and bring them more into line with those paid to skilled workers in any other kind of industry. One of the instruments we must not weaken in forcing up the wage position is unemployment insurance, and the nearer we can bring the benefits and the weekly contributions to those of the general scheme, the more likely we are to bring satisfactory upward pressure upon the general wage position and the proper treatment of agriculture by the country as a whole.

10.39 p.m.

Mr. Mathers

Before a reply is made from the Government Front Bench, may I ask a question about what, I think, is a point which the Minister could easily make? We are told that there will be a saving of £12,000 in doing away with the rebates that have been made in respect of long-term hiring. I am concerned to know what is involved in that saving? How will that saving be realised, and what does it involve for those who have been in charge of that administration? Does it mean anything in the way of dismissals of those who have been concerned with that administration or how will, in fact, this £12,000 saving be realised?

10.40 p.m.

Mr. E. Brown

I am glad to reply to some of the points which have been put, as well as to the general argument and to the references to past prophecies. The hon. Member for Thirsk and Malton (Mr. Turton) put a question about the percentage of women. All that I can tell him about the actual percentage is that it is a fact. Of course it varies in different areas, and it may be that the East and North-East areas have a larger percentage compared with the others. I am anxious to go a little further than that, because the House might get the impression from the large percentage quoted that it is likely to be a menace to the scheme as a whole. Let me give the figures, so that the House will know what the size of the problem is. The total number of persons insured is 720,000. Of these 34,000 are adult women, 5,500 young women, 4,500 girls between 16 and 17, and 3,000 girls between 14 and 15. So, whatever may be the excess percentage in particular areas, with regard to the scheme as a whole it cannot be a problem of such magnitude that it will endanger the finance of the scheme. However, we shall watch it. I can assure the hon. Member for Linlithgow (Mr. Mathers) who asked a question about the staff that it will have no large effect upon the personnel. It is a question of the redistribution of work, because the saving is in the actual machinery of this particular scheme. It is a very expensive one. In our administrative machinery we do not keep the entire staff as permanent. There are always some coming and going because we have to work administratively according to the number of unemployed in an area. The saving is in the actual administration and it should not largely affect the personnel.

I will not be drawn at this stage into a wide discussion into the causes of the decline of agricultural labour from the land except that I would put in a caveat. I would ask the hon. Member for Don-caster (Mr. J. Morgan) not to attach quite so much importance to unemployment insurance as a factor in the drift from the land as he appeared to. I have never put it as high as that, for it is only one factor of many. Any man surveying the problem of the trend of labour in industry will know that there is a drift against work in the mines in certain areas, there is a drift against work in the merchant service, and there is a drift against work in the home as well as a tendency against work on the land, and it is a question of the whole condition and not of one particular item in the condition which has to be faced.

Mr. J. Morgan

You would admit that the agricultural worker rather covets the benefits of the general insurance scheme?

Mr. Brown

I was coming to that point. Therefore I welcome, and I am sure agricultural Members welcome, the references to the fact that this is as much a matter for the non-agricultural as for the agricultural parts of the country.

I am grateful to the hon. Member for Ormskirk (Sir T. Rosbotham) for the kindly things that he said. He joined the prophets in 1936, as did the hon. Member for Don Valley (Mr. T. Williams). I am always glad to hear a prophet who is able to say, "I told you so." I shall have to revise the aphorism that Mr. Gladstone used to use. He used to say, "You cannot argue with a prophet. You can only disbelieve him." I will not say that I disbelieved them in 1936, but I was certain that I was going to take no responsibility for bringing in the first scheme for agricultural workers too optimistically, and I said so over and over again. I had much rather begin cautiously and see whether I could do more after gaining experience than begin by measuring the problem too optimistically and having to increase contributions or lower benefits at the end of the day.

I would draw attention to the low percentage of unemployment in agriculture. It is not the case that men are leaving the land and taking other work merely because of unemployment benefit. There are many other reasons. In some cases other work has been available at very high wages, and that may not be the case in three years time. A good proportion of unemployment of an agricultural character does not now rank but may then rank for agricultural benefit, and we may find the proportion much higher. Indeed the Statutory Committee hints that the time may come when the proportion will be as high as 70 per cent.

I cannot let this Debate close without paying a tribute to the memory of the late Mr. Alfred Shaw who represented the trade unions on the Statutory Committee with such skill, pertinacity, wisdom and with such human sympathy from the beginning until his recent death. I am sure the whole House will wish to express to his relatives their sympathy and appreciation of the great work he has done in connection with the unemployment insurance scheme. For my part it is a great joy to know that we are able to increase the benefits for the workers concerned. I have not gone as far as some hon. Members would wish to go, but I ask the House to understand that as long as I am Minister of Labour, whether it is an industrial or an agricultural scheme, I do not propose to come to this House with a scheme which will not stand the test of time as far as any man can reasonably foresee it. I prefer to do a little less and be asked for more, rather than do so much more and then have to cut the more at the end of an adverse day.

Resolved: That the draft of the Unemployment Insurance (Increase of Benefits and Reduction in Contributions) (Agriculture) Order, 1939, laid before this House on the ninth day of March in pursuance of the provisions of Sub-section (4) of Section 59 of the Unemployment Insurance Act, 1935, be approved.