HC Deb 10 July 1940 vol 362 cc1185-94

4.9 p.m.

Mr. Lathan (Sheffield, Park)

I beg to move, in page 3, line 18, at the beginning, to insert "For."

This Amendment is entirely friendly and will, I hope, be accepted. It is designed to give more complete and accurate effect to what we believe to be the Minister's intention as regards the inclusion in unemployment benefit of non-manual workers. The Committee is no doubt aware that hitherto there has been a very unfair discrimination against the non-manual worker. The manual worker, whatever his earnings, was included in the insurance scheme, but the non-manual worker, simply because he was a non-manual worker, was excluded. A manual worker, for instance, might be so fortunate as to have an income of £10 a week, but a non-manual worker engaged in the same establishment and earning £5 a week, was excluded from the Unemployment Insurance provisions, simply because he happened to be a non-manual and not a manual worker.

The Minister, with characteristic courage, decided very early to sweep away that discrimination. His desires in that connection are welcomed, as we indicated in an earlier Debate, by the many hundreds of thousands of non-manual workers who will be affected by the proposed extension of this legislation. But the Minister's desires are likely to be frustrated and made ineffective unless there is some Amendment, either in the First Schedule to the principal Act, which is referred to in the Clause, or in the regulations attached to the Schedule and used in the operation of the provisions of the Act. It seems to those who are connected with the non-manual workers and are concerned with advancing their interests, that the difficulty arises from the terms of paragraph (9) of Part II of the First Schedule to the principal Act and I take the opportunity of reading the paragraph in question to the Committee, in order that the position may be clearly understood: Employment otherwise than by way of manual labour and at a rate of remuneration exceeding in value £250 a year, or, in cases where such unemployment involves part-time service only, at a rate of remuneration, which in the opinion of the Minister, is equivalent to a rate of remuneration exceeding £250 a year for whole-time service. That is in the Schedule attached to the original Act, and the intention of the Minister now is to raise that rate from £250 a year to £420 a year. I submit this consideration, which I hope the Minister will take into account. The reference to part-time service and to the rates of earnings will have the effect, which I am sure the right hon. Gentleman does not desire, of excluding many people whose total earnings in any given year may fall below the new salary limit which it is proposed to fix. Calculating earnings in the manner specified in the reference which I have just quoted, that is to say "at a rate of remuneration" may have the result that a person who in the course of a year earns only £100, earns that £100, on odd occasions, at employment in which he would be paid even "at the rate of" £1,000 a year. Yet at the end of the year would find himself with an income of the very low figure which I have mentioned. Parenthetically, I am sure that the Minister would not desire to exclude from these benefits people who are only partly employed while including the person who is fully employed.

During the Second Reading Debate I mentioned, by way of illustration, the case of musicians, and I would again draw the attention of the Committee to the position of that section of non-manual workers. A musician may earn his living by fulfilling engagements which are sometimes casual and sometimes on a regular basis. I am told that the ordinary fee is approximately a guinea for four-and-a-half hours' work. Applying the rule which has applied hitherto, that would work out at a rate of remuneration of about 4s. 9d. per hour. On a 36-hour basis the proposed salary limit of £420 a year would equal 4s. 6½d. per hour. Therefore, the earnings of the musician would be at a rate exceeding that covered by the new salary limit. If six such engagements were fulfilled each week, his weekly earnings would be six guineas or £375 10s. in the course of the year, but still the musician would be excluded by the operation of this regulation from benefiting under the proposed extension of the insurance scheme, because his remuneration would be "at a rate" which represented a figure higher than that named in the Clause.

There are other non-manual workers, commercial travellers, for instance, who are likely to be adversely affected by this arrangement. They are frequently paid on varying bases. Some are paid on commission only, and some on a blend of commission with salary, but in either case the total earnings fluctuate, and a man's pay in a good week may well be at a figure which would work out in excess of this proposed limit, although at the end of the year his total earnings would be well under £420 a year. Yet such a man would be excluded from the benefits which it is proposed to confer on non-manual workers. An example has been given to me by the Secretary of the National Union of Commercial Travellers. It shows that commission might be on a basis of, say, 5 per cent. on sales up to £5,000 and 2½ per cent. on the excess above that, or, again, the percentages might vary as between one week and another or one month and another, and in either case the man would be adversely affected. If he had good business in one week, the week upon which the calculation was made that would exclude him from the benefits which it is proposed to confer by this legislation. I am sure that it is not the intention of the Minister to exclude persons in that position, and there are a good number of them.

It seems to us that all these difficulties arise from the introduction of the phrase "rate of remuneration." It would be very difficult to fix rates of remuneration that would be equitable to all sections of non-manual workers. The rate of remuneration—daily, hourly or weekly—may be entirely appropriate to a manual worker, but there it is unnecessary to have such a provision, because, as I have said, the manual worker, whatever his earnings, whatever his rate of remunera- tion, is provided for. We desire that this unfair arrangement should not continue to operate, and I hope that the Minister, by the acceptance of this Amendment, or by alterations in the Schedule or the Regulations, will meet the case which I have submitted for his consideration.

4.18 p.m.

Mr. Rhys Davies (Westhoughton)

I should like my right hon. Friend to bear in mind another problem connected with the question which the Mover of the Amendment has raised. I am not familiar with this difficulty in connection with Unemployment Insurance, though I am in connection with National Health Insurance. I think however the principle is the same in the two cases. Under the National Health Insurance scheme a non-manual worker in receipt of not more than £4 16s. 2d. per week, which is at the rate of £250 per annum, is compulsorily insured, but if he gets a penny a week above that he is not and is called open to pay the whole of the contributions himself. He becomes a voluntary contributor. The right hon. Gentleman will be aware that some mean employers and always anxious to push their employés into the voluntary contributor class in order to save themselves a few pence a week.

I would draw attention to the way the Ministry of Health works in connection with these matters; I understand that the inspectors of the Ministry of Health for this purpose are the same as for the Ministry of Labour. Now that we are at war, wages have gone up slightly in some industries in which non-manual workers are employed or war bonuses are paid and overtime is worked, and this pushes the earnings from, say, £4 16s. 2d. a week to £4 18s., and what I complain of is that the Ministries concerned, instead of waiting until the wages are stabilised beyond the level of £250 per annum, take the first opportunity to jump in and say, "Now your income is above £4 16s. 2d., and you are outside the scheme except as a voluntary contributor." I have put the point rather strongly, but I am sure that my right hon. Friend will not be offended. I wonder whether he could devise a scheme under which the Ministry would have to be assured that there is a stabilisation of the wage at above £8 a week, in this case, before it is determined that the worker is outside the scheme, because it is un- fortunate that workmen should be played with on the cat-and-mouse, or the in-and-out principle. I suggest that officials of the Ministry might wait for three or six months to see how far wages are stabilised before they take any steps to clear people out of the scheme.

4.21 p.m.

Mr. Bevin

I regret that I am unable to accept this Amendment. The speeches to which we have just listened from the two hon. Members prove, I think, that the Amendment would not solve the problem. I recognise that the in-and-out arrangement in insurance presents a very difficult problem, but I do not think it can be solved by a Bill which has been introduced, as this one has, to meet a particular need. I would remind hon. Members that much of the trouble has arisen with those in the class between £5 and £7 a week, and I think it will be minimised to a very large extent by the higher scale which is being introduced. On the other hand, in a later Amendment the problem is raised the other way, and there again this Amendment would not meet it. There it is the problem of the man, the non-manual worker, who has a standard rate and then has to work overtime. It was assumed when the original Act was drawn up that among clerical workers there was no overtime. Happily, many of them have become organised in their respective unions and standard rates for overtime and bonus and other payments have now come into the wage structure, and I am worried about how this problem will affect them.

The hon. Member for Westhoughton (Mr. Rhys Davies) has pointed out that the Ministry of Health is also affected, and I cannot be expected to deal with the whole problem in an unemployment Bill, and yet the two things have to run together. I am glad that the problem has been raised, but I would ask that this Amendment and the subsequent ones should be withdrawn, and I give an undertaking to refer the whole problem quite promptly to the Statutory Committee and ask them to take evidence and see whether they can provide some new rule which will guide my Ministry and also guide the other social services. If I accept either of these Amendments, I shall land myself into another set of difficulties and shall have to listen to other speeches on the problem, and I would rather have the matter thoroughly investigated and, if necessary, have a new rule drawn up, which would probably get over all the difficulties. I undertake to try to get that done as quickly as possible.

Mr. Lathan

On the basis of that undertaking, I beg to ask leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

4.24 p.m.

Mr. Isaacs (Southwark, North)

I beg to move, in page 3, line 25, at the end, to insert: (2) Where there is in existence an agreed or accepted standard rate of wage or salary, such standard rate shall be the rate of remuneration for the purposes of this Act. I wish to move this Amendment formally, although after the undertaking which has been given I shall withdraw it. There is a point in connection with it which I wish to bring specially to the attention of the Minister, because it has not been mentioned so far. In the printing industry there are one or two classes of workers, including readers, whose wages are fixed by an agreement. For example, a night worker for a 38½-hour week gets £8 a week, that is 4s. 2d. an hour. If that night worker loses his regular job his union may find him casual work. That casual work is paid at the rate of 4s. 6d. per hour, as against the 4s. 2d. When he goes later to see about his insurance he is told that 4s. 6d. an hour is worth £450 a year and that he is out of insurance. The point in my Amendment is that where there is an agreed or standard rate that standard rate should be taken as the figure, because a casual man never gets a full week's work or a full year's work, even though his hourly rate is above the figure. I know of a man who for 13 years was regularly employed and insured. He fell out of work but got a casual job for two years, but when that casual work came to an end he did not get unemployment benefit, because the rate of his earnings was above that set out in the Act, though in fact his wages in a year were actually less. I have formally moved the Amendment and I will now beg leave to withdraw it.

Amendment, by leave, withdrawn.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

4.26 p.m.

Mr. Graham White (Birkenhead, East)

I do not rise to commit the offence of trying to argue an Amendment which is out of order, but I should like to take the opportunity of saying that, judging from the correspondence which reaches me, there is doubt in the minds of some of the newly insured class about when they will be entitled to come into benefit. They wish to know whether they will have to be insured for a full year before they will be entitled to draw benefit. I should be glad if the Minister would clear up that point.

4.27 p.m.

Mr. Lawson

I would like to confirm what the hon. Member for East Birkenhead (Mr. White) has said, and would draw the Minister's attention to another point. Among those who are spoken of as black-coated workers are some who were formerly insured, but because their wages rose above the limit of £250 they afterwards ran out of insurance and lost their insurance rights. I should like to know whether those persons will come immediately into insurance again or will have to wait the same period and be subject to the same conditions as those who come into insurance for the first time.

4.28 p.m.

Mr. Ammon

The Minister will recall that on the Second Reading I raised the question of an anomaly which arises under Clause 4 from the fact that certain persons who are receiving between £250 and £420, are not excepted persons. The Minister will remember that when the Emergency Powers Regulations of September, 1939, came into force authority was given by which any certificate of exception given by the Minister should continue in force if the conditions on which it was given remained unchanged, but Save as aforesaid, the power of the Minister to give certificates under the said provisions and of the holder of any existing certificate to identify persons thereunder shall not be exercised during the operation of these regulations. What I ask the Minister now is that in the case of an employé covered by such a certificate whose earnings have not increased beyond £420 the certificate of exemption shall continue to apply. The Minister has truly said that under a Bill like this he cannot be expected to alter all the legislation on this point, but I suggest to him that it is not desirable to create further anomalies. Speaking frankly, so far as I am concerned I am in favour of there being no change, and that we should leave the problems as they are. This affects the employés of the local authorities, the utility organisations and the corporations, all of whom are concerned about this, and for whom a very serious problem is created. I ask the right hon. Gentleman whether he can see his way to prevent this further anomaly being created in the Bill, or being extended to the £420 class.

4.31 p.m.

Mr. Bevin

The reply to the first point is that they will be entitled to benefit when they have 30 stamps, and to the second point, that if they have had 30 stamps in the last two years under the existing rule and then become insured under this rule, they will be entitled to benefit. The reply to the last question is that we shall make a regulation permitting the issue of a certificate so as to cover those of the new class as though £420 had always been the upper limit—I do this with regret—that is to say, for persons in the £250 to £420 class who, on 6th September, 1939, had completed three years' continuous service, in employment of the types specified in Part III of the First Schedule to the 1935 Act.

Question, "That the Clause stand part of the Bill," put, and agreed to.

Remaining Clauses ordered to stand part of the Bill.

Schedules agreed to.

Bill reported, with Amendments; as amended, considered.

Motion made, and Question proposed, "That the Bill be now read the Third time."

4.33 p.m.

Mr. Lawson

We have not had information of the cost of the concessions which are being made, and I should like an indication from the right hon. Gentleman of the cost of all the arrangements under the new Bill. I would point out that, according to the last report, there is, under the general scheme, a balance of something like £57,000,000. The Statutory Committee recommended that £37,000,000 be paid in repayment of debt. I should like to draw the attention of the House to a fact which is rather refreshing to those who have followed unemployment insurance through many years. It is that the General Confederation of Employers objected to repayment of debt to the amount recommended by the Statutory Committee. Those who know anything about unemployment insurance and the history of its financial side will be very much surprised, and pleasantly so, that that was the attitude of the employers be fore the Statutory Committee. They point out that we may be in the position, when the war is over, of wanting a very large surplus to meet the needs of unemployment. Those who are responsible for the Fund and for meeting the concessions ought to have in mind—I am sure the Minister himself is so disposed and sees the difficulty—legislation for dealing with the waiting period. They have money at their disposal. Large numbers of men in one of the staple industries—

Mr. Deputy-Speaker (Colonel Clifton Brown)

The hon. Gentleman is making a Second Reading speech upon the Third Reading stage.

Mr. Lawson

I asked Mr. Speaker whether general remarks of this kind were possible, and I understood him to say that they were. As a matter of fact, I wanted to draw attention to the fact that not only are there people who will be immediate beneficiaries under the new arrangements, but there are great numbers of people in the mining industry who are unemployed. I am not proposing to deal with the waiting period now, but the matter really ought to be receiving consideration at the present moment, not merely because of unemployment benefit, but because the services of the men are needed in other ways. I do not know whether I may be allowed to say to the Minister that, while I appreciate the Bill, and congratulate him on the very important concessions he has given a very short time after coming into office, I would point out that those of us who know the staple industries would rather see, as I know he himself would, people working than being idle. At the present moment, people are being asked to volunteer for certain functions for the military. I hope that we shall use for this purpose, not the local authorities, but the Employment Exchanges, to let men in the heavy industries register to do for payment some of the work which the military want, instead of it being done by volunteers who may not be quite so suited to it.

4.38 p.m.

Mr. Tomlinson (Farnworth)

I want to say a word about the concession which the Minister has promised to make respecting the Regulations. I am sorry that the Regulations enable the Minister to take away a good many people who ought to remain in. One can see the difficulty that would have arisen had men between the incomes of £250 and £420 been compelled to come into the scheme while men under £250 were allowed exemption, by arrangements with local authorities and other bodies. Yet I feel that this question of Unemployment Insurance is so linked up with the general population of workers, either by hand or brain—to use a figure of speech which brings them all in and which we found necessary some little time ago in order that workers might be described as other than manual—that when we attempt to do that, but, at the same time make regulations enabling many to contract out, it is depriving the scheme of some portion of its universality, which is its chief virtue. I hope that, before long, not only will the Statutory Committee be given this question to deal with relating to border-line cases, but, in some way, the whole question of Unemployment Insurance and National Health Insurance may be referred to the Committee with a view to doing what the Bill attempts to do, in its way, that is, extend the scope of insurance rather than restrict it by regulation.

Question, "That the Bill be now read the Third time," put, and agreed to.

Bill read the Third time, and passed.