UNEMPLOYMENT INSURANCE BILL. (Hansard, 21 February 1924)

§ EARL DE LA WARR
My Lords, the measure which it is my privilege to lay before your Lordships this evening is the first Bill that has been brought to this House by a Labour Government. Therefore it has, I think, a certain slight historic interest. It is the last of a series of eight measures designed to make the old unemployment Insurance Act of 1911 capable of dealing with the present exceptional circumstances. As your Lordships know, the scheme of the unemployment insurance system was drawn up to deal with normal risks of unemployment when trade was comparatively prosperous. These attempts at transforming the original Act have not, I am afraid, been altogether satisfactory. My right hon. friend the Minister of Labour has undertaken to bring in a really comprehensive measure to deal with the whole matter. In the meantime, however, there is one difficulty that requires immediate attention.
As your Lordships know, there is a gap of three weeks which intervenes between two periods of benefit, and to make this point quite clear I will read to your Lordships the proviso which it is proposed to repeal :— '' Where benefit so authorised as aforesaid has been received by any person in the first benefit year for periods amounting in the aggregate to twelve weeks, that person shall cease to be qualified for the receipt of benefit in that benefit year until the expiration of three weeks from the date on which the last period in respect of which benefit was payable ended. It is obvious what this gap was originally intended to do. It was intended to compel the unemployed man to look for work and to discourage the shirker—on the whole, a very desirable object. But I submit to you that it is a mockery to tell an unemployed man to look for work now, when we know that there is no work. The 264 effect of this proviso is not to decrease unemployment, far from it. It is to confront the unemployed man with the cruel alternative of misery, frequently bordering on actual starvation, or of going to the Poor Law authorities, with all the consequent humiliations of pauperism. The object of this measure is to remove this cruel alternative. His Majesty's Ministers propose to do away with the gap, to rescind the proviso that I have read to your Lordships, and to make payments continuous.
The estimated cost was originally £600,000, but, owing to certain delays in introducing the measure, it has since been reduced to £500.000. Surely this is a very paltry sum when speaking of alleviating the misery of so many of our unemployed, especially when you take into consideration the undoubted saving in the rates that must result. The considerations that I have laid before your Lordships have secured unanimous approval for this provision in another place. I venture to hope that your Lordships will show equal sympathy, and that your approval will be granted with all haste, having due regard to consideration of the matter by your Lordships. Even now, day by day, week by week, thousands of men are entering upon this gap period, and I appeal to your Lordships to give practical effect to this Bill immediately, and thus show your undoubted sympathy with the cause of the unemployed, and remove from thousands of your countrymen the fears of pauperism. I beg to move that the Bill be read a second time.

§ VISCOUNT CAVE
My Lords, I should like to congratulate the noble Earl upon the fact that, so early in his career in this House, he has had the responsibility of introducing the first Government Bill, and also upon the manner in which he has discharged that duty, for he has stated clearly and, to the best of my belief, quite accurately, the existing law and the effect which the Bill is intended to have. I look upon this Bill as in the nature of an experiment. It is true, as the noble Earl has said, that the object of the gap was to prevent a man who is unemployed from supposing that he will always be maintained at the expense of the Unemployment Fund, however long he is unemployed, to encourage him to look forward 265 to the gap which is coming, and try to find work before it comes, and, of course, when the gap arrives, to give him a further incentive to finding work in the hope that he may continue to be employed in that work and may not again come back upon the Fund. I think that the gap had a useful intention.
But, as the noble Earl has pointed out, it is said by persons who are good judges that, although there are advantages in the gap, there have also been serious disadvantages—that the expedient has not had quite the effect that was hoped from it, and that many perfectly deserving working men have, owing to this expedient, either suffered distress during the period for which the allowance is discontinued or, what is almost as bad, have gone in some cases upon the rates, and so have had for the first time the experience of being maintained at the public expense. It is said that in some cases the evils greatly outweigh the benefits. That being so, so far as my friends and I are concerned, we are quite prepared, upon the recommendation of His Majesty's Government, to say that, the experiment should be tried, and we do not desire to offer any opposition to it.

§ EARL BUXTON
My Lords, I do not rise to oppose this Bill in any way. On the contrary, those with whom I act are in favour of it on the ground stated by the noble Earl in his introductory statement. As a matter of fact, this particular proviso was put into the original Act, for which I was personally responsible, with the object, as stated by the noble Earl, of saving money in the first instance so that the benefit should be able to extend for a larger number of weeks in other cases, but especially to give an inducement to the man, as stated by the noble Viscount who has just spoken, to look out in anticipation for work and, when this interval came, of doing his best to obtain it. That Act was passed, of course, in normal times when there was comparatively little unemployment, and when it was possible in many cases for a man to obtain work. I understand that the position of the Government now, in introducing this Bill, is that, though the gap of three weeks may be an inducement to a man to seek work, the chances are that he will not be able to obtain it, that the result of the three weeks will not be to enable him to obtain work and so reduce 266 unemployment, but will mean a very great addition to his discomfort and difficulties in being out of employment and, indeed, may bring him into very difficult circumstances indeed. So far as I am concerned, I think that is a blot on the Act and the sooner it is remedied the better.
I rose really to enter a caveat rather than to discuss the merits of this Bill, upon which, I think, we are all agreed. I should be glad if I might have the attention of the Lord Chancellor to this matter. I read the account of the debate in the other House and I understood from it that the Minister of Labour or his Department is preparing a Bill to amend the Unemployment Insurance Acts. I must confess that I was—I will not say alarmed, but a little disturbed at a remark which fell from the Minister of Labour. Very likely it was not deliberate and I do not wish for any answer in regard to it now, but I would like to ask the Lord Chancellor and my noble friend sitting below me to bear in mind, in regard to that new Bill, that the whole basis of the original Insurance Act, and the Acts which have been passed to amend it from time to time, was a contributory one. The employer contributes, the workman contributes and the State contributes.
The best test that this basis has been a successful one for the Insurance Act and the Acts amending that Act is that, in spite of the very great strain and the very great stress brought on the Acts by the, war, they stood the strain and the stress, and a considerable margin was accumulated for other purposes. That Act has been extended now to something like twelve million persons, whereas the original Act applied only, I think, to about two millons. I hope that the indication to which I have referred in the speech of the Minister of Labour did not mean that the Government will, in any sense, relinquish or depart from a contributory basis. The contributory basis is a stable one. It gives an interest to each of the three parties. I enter this caveat because I am anxious that the Government, in considering this matter, should bear in mind the basis of the original Insurance Act and not depart from it in any material respect.

§ THE LORD CHANCELLOR
In reply to the noble Earl may I say that no decision in regard to the contributory 267 basis has been come to. In considering the question I will certainly bear in mind what my noble friend has said on the subject. No suggestion has been made with regard to it this afternoon.

§ EARL DE LA WARR
My Lords. I beg to move that Standing Order No. XXXIX be considered in order to its being dispensed with, for the purpose of taking the Third Reading of this Bill.

§ EARL DE LA WARR
I beg to move that this Bill be now read a Third time.