UNEMPLOYMENT AND FAMILY ALLOWANCES (NORTHERN IRELAND) AGREEMENT BILL (Hansard, 21 November 1946)

§ The Financial Secretary to the Treasury (Mr. Glenvil Hall)
I beg to move, "That the Bill be now read a Second time."
The purpose of this Measure is to give effect to an agreement, dated 18th September, 1946, between the Ministry of Finance, acting for the Government of Northern Ireland, and the Treasury acting for the United Kingdom. That agreement provides for the payments by the two Exchequers to meet a part of any difference arising in the cost of unemployment insurance, unemployment assistance, and family allowances, as between the two countries. The agreement also provides that it shall not come into operation until it has been ratified by the Parliaments of the two countries concerned.
It is sometimes forgotten that Northern Ireland is part of the United Kingdom. It pays the same taxes, it maintains the same social services, and the same standards as this country, but, owing to industrial and social conditions, which are different in some respects from those in other parts of the United Kingdom, the cost of the social services there is higher than in this country. Since 1926 Parliament has recognised this and it has accepted the principle that the United Kingdom should assist Northern Ireland by helping to meet some of the additional cost which falls upon that country so far as unemployment assistance and unemployment insurance are concerned. There- 1133 fore, from 1926 onwards provision has been made by agreement for the two Governments to meet the extra cost which might fall according to a formula laid down.
The last agreement was made in 1935 and it covered, as I have already indicated, unemployment insurance and unemployment assistance. That agreement has, however, been rendered unworkable by the Determination of Needs Act which was passed in 1941. In that Act, for example, the Unemployment Assistance Fund came to an end and was closed on 31st March, 1942. This did not matter very much then, because during the war there was full employment both in Northern Ireland and in this country, and there was a war-time financial arrangement between Northern Ireland and the United Kingdom. That arrangement was such that any balance of cost as between the one Exchequer and the other might have to be borne on Votes of Credit. As the House knows, Votes of Credit came to an end on 31st March last, and, therefore, it is essential that something should be done to put the matter on a proper basis fairly soon.
The House would perhaps like me to say a few words as to the scope of the new agreement. This is attached as a Schedule to the Bill. It is agreed, I think, that a new agreement is now necessary, and we hope that its Second Reading will be non-contentious. It is essential, however, that this new agreement, unlike its predecessor, should be comprehensive. It should cover other parts of the Social Security Code as well as Unemployment Insurance and Unemployment Assistance. It is all the more necessary that the scope of the new agreement should be extended when we remember that the finance of the old and only element in previous agreements namely unemployment insurance and unemployment assistance, will presently be merged in a single Fund, provided under the recently passed National Insurance Act. A full agreement covering the whole of the new Social Security Code will not be possible until that can be put into operation in this country in 1948, and, therefore, as the House will see from reading the present Bill, the agreement, which it ratifies, does visualise another and fuller agreement to come.
There are certain changes between this agreement and that which went before.
1134 The most notable perhaps, and the only one to which I will call the attention of the House, is that the 1935 Agreement provided that the United Kingdom Exchequer should pay to Northern Ireland 75 per cent. of the excess cost to Northern Ireland of her expenditure on unemployment insurance and unemployment assistance subject to certain limitations; whilst as the House will have noticed the present agreement provides that the United Kingdom Exchequer should pay 80 per cent. of the excess cost to Northern Ireland of her expenditure under those heads, and also includes, for the first time, payments in respect of family allowances. That excess, as the Financial Memorandum points out, is to be measured as the amount by which the cost exceeds the parity ratio of Exchequer cost in Northern Ireland 2.2 per cent. to Exchequer cost in Great Britain 97.8 per cent. The 2.2 per cent. has been arrived at as the nearest convenient approximate figure to the percentages which obtained before under the old Agreement. It is arrived at by taking the proportion of the Class I figures here and in Northern Ireland—that is, the total employed in the United Kingdom and the total employed in Northern Ireland.
What will the cost be? One word on that. As is stated in the Financial Memorandum attached to the Bill, it is estimated that for 1946–47 the cost in respect of unemployment insurance will be £395,000, in respect of unemployment assistance £140,000, and in respect of family allowances £840,000, making a total of £1,375,000. I should, perhaps, add that the estimate for family allowances does not cover a full year because, as the House will remember, family allowances in this Financial Year will run for a period of about eight months only. The possible cost in a full year will therefore not be £840,000, the estimate given here, but something like £1,260,000. The estimates for the future under the other heads are difficult to give because they will depend very largely on the unemployment experience of Northern Ireland as compared with that of the United Kingdom.
Before I sit down I should like to make one or two observations on the subject of our sharing this burden with Northern Ireland, because I understand that in certain circles at any rate there is some criticism, the argument being that Northern Ireland should stand on its own 1135 feet and bear these costs in full. That has not been accepted by this country, and certainly not by Parliament, for at least ten years. What is forgotten by those who argue in that way is that Northern Ireland is part of the United Kingdom, and that its people are British taxpayers like any other citizen living within these islands. They bear the same tax burdens and enjoy the same standards of Government social services as the rest of the United Kingdom. If Northern Ireland appears not to be so wealthy as Great Britain as a whole, that can also be said of parts of England and certainly of parts of Scotland and Wales. If it were possible to analyse the payments to unemployment insurance by various localities in this country as against the benefits drawn, it would be found quite definitely that the balance was a debit one. Simply, therefore, because the balance goes the other way in Northern Ireland at the moment is no reason why anyone should assert that we are subsidising Northern Ireland.

§ Dr. Morgan (Rochdale)
It is a very good reason.

§ Mr. Hall
We are no more subsidising Northern Ireland than we are subsidising the poorer areas of this country. As a matter of fact, Northern Ireland—I think it is time the House was reminded of this—stood by us during the war. She assisted us materially, from the financial point of view as well as with moral find material support. She assisted us with men and she raised very large sums of money which were of great help. I therefore ask the House to give us the Second Reading of this Measure without a Division.

§ Mr. Osbert Peake (Leeds, North)
I must congratulate the Financial Secretary to the Treasury on his clear exposition of the terms of the Bill, but I must also express my warm approval of the very generous attitude towards Northern Ireland and its Government which his speech disclosed, compared with the attitude of the Socialist Party to Northern Ireland in days gone by. For our part, we accept the Bill, which represents the result of a freely negotiated agreement between His Majesty's Government and the Government of Northern Ireland. The hon. Gentleman stressed the extent to which 1136 there will be contributions under the Bill from the Imperial Exchequer towards certain services in Northern Ireland, but he did not stress very much, or at all I think, the fact that, in certain circumstances the further contribution might, in fact, be the other way. This is an equalising agreement. If unemployment in Northern Ireland falls below he average in this country, and should the people in Ulster limit the size of. their families to something below the average of the United Kingdom as a whole, there will be a contribution drawn from Northern Ireland into the Imperial Exchequer. This provision seems to us on these benches to be a very fair arrangement, and we shall certainly support it.

§ Dr. Morgan (Rochdale)
I rather misjudged the Business of the House today. I did not think that this Bill would be taken. I do not want to oppose the Bill really, because I am very friendly disposed towards both parts of Ireland, North and South. I would like to place on record my opinion that the arguments used by the Financial Secretary to the Treasury in support of the Measure seem extraordinary. For example, he made a plea that Northern Ireland was loyal. Well, that may be quite true, but there are other inhabitants of Ireland who were also loyal and who died for Great Britain. By reason of its geographical situation, their country is not to get any advantages under the Bill. They lived in a different part of Ireland. It is also to be remembered that many of the inhabitants of Ulster and Northern Ireland at present suffer many disabilities. Apart from the question of their loyalty, which is not in doubt, they cannot get certain civic rights which the ordinary citizen in Great Britain gets. While I agree that this Bill should be given a Second reading without opposition, I want to say that I differ completely from the arguments put forward by the hon. Gentleman. They could be riddled absolutely. He could have used better arguments than the ones he employed.

§ Sir Ronald Ross (Londonderry)
Before the hon. Member sits down, could he explain his point? As I understood it, he said that there were other loyal people in Ireland outside Northern Ireland to whom the benefits of this agreement should be extended. Is he making the point that Eire should be brought in?

§ Dr. Morgan
The hon. Member misunderstands me. There is a tendency in certain parts of Ireland to misunderstand references made in the friendliest spirit. I did not intend to convey that people in another part of Ireland were going to receive or were entitled to receive any benefits. What I was saying is that certain people in Northern Ireland have now many civic disabilities against them. In spite of the fact that we here do not agree with them or suffer from them, we are allowing Bills like this without opposition.

§ Major Haughton (Antrim)
After the speech by the Financial Secretary in which he explained this Bill with his usual clarity and asked that there should be no controversy, I felt that it would be passed as he would have liked it, as an agreed Measure and one that perpetuates a principle laid down as far back as 1925, which has been honoured and agreed by Governments of different complexions ever since. But one or two things said by the hon. Member for Rochdale (Dr. Morgan) require answer. As I understand it, he and some of his friends find fault, from time to time, with anything in the nature of a financial subsidy being paid to Northern Ireland, but the extraordinary thing is that on the other side of the Channel those elements which are antipartitionists find the greatest fault with the Government over there for making such tremendous contributions to the Imperial Exchequer—

§ Mr. Deputy-Speaker (Mr. Hubert Beaumont)
The hon. and gallant Member has gone as far away from the subject as I can allow him He must now come back to the Bill.

§ Major Haughton
To come back to the Bill, the point which should be clearly understood is that the formula explained by the Financial Secretary does not come into operation until there is an excess payment by either side. It is not sufficiently clearly understood that Ulster meets out of her own resources the unemployment insurance, the unemployment assistance and the family allowance until the cost of those services exceeds the proportion laid down in the formula—2.2 and 97.8. This Bill not only deals with the three items set out in the Preamble, but covers other circumstances, such as retirement pensions, and, in certain circumstances, it could work round the other way and favour the Imperial Exchequer, 1138 as I hope it very often will. On behalf of my friends in this part of the House I would like to say that we accept this Bill as an agreed measure and also as one, which, as I have said, perpetuates a principle dating back to 1925. 9.10 p.m.

§ Mr. Mulvey (Fermanagh and Tyrone)
While I raise no objection to the passage of this Bill, at the same time I would like to refer to the question of the loyalty of Northern Ireland. I have had a long experience of Northern Ireland having lived there for 40 years—

§ Sir R. Ross
On a point of Order. If my hon. and gallant Friend the Member for Antrim (Major Haughton) was not allowed to deal with the financial subsidies of Northern Ireland, is this discourse upon loyalty in Order?

§ Mr. Deputy-Speaker
The hon. Member had not gone so far that I could determine whether what he was saying was in Order or out of Order.

§ Mr. Mulvey
My statements arose out of the remarks made by the Financial Secretary. Loyalty in Northern Ireland is conditional upon what they can get from this House of Commons. There is absolutely no loyalty in Northern Ireland like the loyalty in this country. There is no such loyalty in Northern Ireland if they cannot get anything from this House. We have had evidence in the past that they have been the most disloyal people in any part of the British Empire

§ Sir R. Ross
I do not know that it is really right for me to follow one who is my Member of Parliament, but I thought that his exuberant feelings would probably overcome him in due course and that on a financial Bill which has been treated generally as a financial Bill we should have a speech dealing entirely with conditional loyalty. I think it is right for me to say that our loyalty is unconditional, that we have given proof of it in this war. We have had our share of bombing, we have paid high taxes, and we have a higher tax than in Eire. I could go on for a very long time—

§ Mr. Deputy-Speaker
Yes, but—

§ Mr. Mulvey
rose—

§ Mr. Deputy-Speaker
—if the hon. Member had the permission of the Chair to do so, which will not be forthcoming.

§ Sir R. Ross
I saw your eye was moving in my direction, Mr. Deputy-Speaker, so reluctantly I must leave a theme with which I could occupy the time of the House probably for the rest of the Session. Therefore, I would conclude merely by welcoming the Bill, which I think is a very fair proposition. It is continuing a principle accepted by every type of Government—the Labour Government, Unionist Government and National Government—since 1925. The previous arrangement was rendered obsolete by subsequent legislation, so there had to be a fresh agreement. I would just remind the House that these payments to level up—this equalisation account as we may call it—on social services is by no means the whole picture of the financial relations of the Northern Ireland Treasury with the British Treasury, because the British Treasury receives many millions, and has received very many millions from the Northern Ireland Exchequer during the course of the war and before it.

§ Captain Delargy (Manchester, Platting)
To return to the Bill which the hon. Member for Londonderry (Sir R. Ross) appears to have forgotten, I am all in favour of extending the benefits of this Bill to the people in Northern Ireland. I am in favour of extending to the people of Northern Ireland all the benefits to which they are entitled, particularly when they are not likely to receive any benefits from their own domestic Government. I dissociate myself entirely from the somewhat warm—or was it merely lukewarm?—approval which the Financial Secretary appears to extend to Northern Ireland, an approval which is quite at variance with the traditional policy of the Labour Party. I hope that this is not one other principle from which the Front Bench is trying to run away. I might also say that while these smaller pieces of legislation are being applied to Northern Ireland it is high time that other legislation passed in this House was also applied there, which they have refused to apply.