UNEMPLOYMENT INSURANCE (NORTHERN IRELAND AGREEMENT) BILL. (Hansard, 23 March 1926)

§ THE EARL OF PLYMOUTH
My Lords, this Bill is required to confirm an Agreement between the Treasury and the Ministry of Finance in Northern Ireland. I do not think that it is necessary for me to go into the details of the Agreement at any length, but I will try briefly to explain its objects. The underlying idea is that Northern Ireland, so far as unemployment insurance is concerned, should be in a position to maintain the same rate of contributions and benefits as prevails in this country. I think your Lordships will agree that this is an eminently desirable object, for, at the time of the passing of the Government of Ireland Act, 1920, the Government of Northern 747 Ireland made it perfectly clear that they felt that the Act should in no way have the effect of depressing their social services.
The Act of 1920 made unemployment insurance a Transferred Service, but it was not believed at that time that any financial difficulties would arise in connection with it. As a matter of fact, ever since that time the position in Northern Ireland has gradually been getting relatively worse compared with that in this country. In 1925 the percentage of insured persons unemployed in the two countries was, in Great Britain, 11 per cent., and in Northern Ireland, 23.9 per cent. Taking another figure as an example, up to September 30 last year the loans made by the respective Exchequers to their respective Unemployment Insurance Funds were, in Great Britain,£7,935,000, and in Northern Ireland,£3,614,000. Your Lordships will see that these figures are out of all proportion, and it is quite clear that, if matters were allowed to rest where they are, Northern Ireland would have to cut down the benefits paid under its insurance scheme very drastically indeed.
The first object of this Agreement is to keep the two Funds at parity for the period from September 30, 1925, 0 March 31, 1926, and for the four succeeding years, and this is to be done by additional payments, if necessary, from the Exchequer of the country in which the poorer Fund exists to its Unemployment Insurance Fund. After that there is an equalisation payment from one Exchequer to the other, but I think I should point out here that this contribution is to be calculated, not on the total of the insured population in the respective countries, but on the basis of the total population, for the simple reason that the percentage of insured people in Northern Ireland is smaller than in this country and it would therefore be obviously unfair to this country if the calculation were made on the basis of insured people only. In addition, as a recognition of the fact that each country keeps an independent control over its unemployment insurance system, it is stipulated in this Agreement that only 75 per cent. of the sum required to equalise the charge per head of population will be paid over from one Exchequer to the other.
748 I really do not think that it is necessary for me to go into any further details. The net result of the whole transaction is that the contribution of the British Exchequer for this year will be about£680,090. It is very difficult, owing to the uncertain industrial conditions, to say at all accurately what will be the position in the future, but the contribution from the British Exchequer for the year 1926–7 has provisionally been fixed at£875,000, and it is hoped that it will not exceed that sum in any succeeding year. I should add that, in order to safeguard the British Exchequer against an unlimited liability, the Northern Irish Government have undertaken that, should the contribution from the British Exchequer exceed the sum of£1,000,000 in any one year, the Imperial Government shall be free, with out any question of breach of the Agreement, to re-open the question upon its merits. I beg to move that the Bill be now read a second time.

§ LORD ARNOLD
My Lords, the noble Earl, in moving the Second Reading of this Bill, did not stress the financial commitments involved, and, indeed, I scarcely think that any of your Lordships listening to him, who might not be familiar with the provisions of the Bill and with the White, Paper that has been issued in connection therewith, would realise that the effect of this Bill is extremely likely to be a cost to the British taxpayers of between£4,000,000 and£5,000,000 With commendable discretion the noble Earl avoided giving that impression, but I will supply the deficiency because I think that the facts about this Bill ought to be fully known.
The noble Earl said that in the current year the cost to the Exchequer of Great Britain would be£680,000 and that it had been estimated that in the following year the cost might be£875,000. He did not tell your Lordships that the cost in the following three years as well is likely to be about£875,000 per annum, and may indeed reach£1,000,000. Even on the basis of£875,000 for four years, with the addition of£680,000 for the current year, the costs come to over£4,000,000, and, if the item amounts each year after the current year, as it may do, to£1,000,000, the total will be nearly£5,000,000. More- 749 over, there is a clause in the Agreement, to which the noble Earl referred, under which, if the liability, supposing it were all discharged by this country, were to come to more than£1,000,000, then the matter is to come up for review; and I have no doubt whatever, having regard to the fact that the Government have on this occasion given way to Ulster that they would give way again, so that the ultimate cost might, indeed, be distinctly more than£5,000,000.
This Bill is only another example of the propensity, I might almost say the practice, of his Majesty's present advisers to settle their difficulties by a cash payment at the expense of the taxpayers of Great Britain. Sometimes it is a cash payment and sometimes it is a gift, as in the case of the Italian Debt settlement. But whether it is a cash payment, or, in effect, a gift, it is a very expensive matter for the British taxpayer. Thus it comes about that under the present Government—and I shall have a word or two to say about its professions of economy in a moment—the Chancellor of the Exchequer is at his wits' end for money. Of course, the Government always has a defence for its extravagances that is satisfactory to itself. In the present case the defence is the hardships of Ulster. We in the Labour Party are not unmindful of the hardships of Ulster, and I shall have a word or two to say about that in a moment, but, whatever may be said about the hardships of Ulster, the broad fact remains that this request, or a request for money in connection with Ulster's Unemployment Fund, has been made to the British Exchequer for years and has always hitherto been refused. It was refused by Mr. Baldwin in 1923 when he was Chancellor of the Exchequer; it was refused by Mr. Neville Chamberlain when he was Chancellor of the Exchequer; it was refused by Mr. Philip Snowden when he was Chancellor of the Exchequer; and it now falls to this present Government, with all its vaunted professions of economy, to accede where, on three or four separate occasions in the past, the request has been refused. The present Government has given way, and thus it is that we have this Bill which, as I pointed out, may cost the taxpayer£4,000,000 or£5,000,000, or even in certain circumstances more than that.
750 We in the Labour Party are not unmindful of the hardships of Ulster, and we recognise that owing to exceptional depression in her two main industries—shipbuilding and linen—the Unemployment Fund of Ulster has run into debit to a very large extent., and we are quite willing to assist Ulster in that dilemna. But what we have proposed, and surely it is most reasonable, is that these millions should not be given to Northern Ireland out-and-out, but should be lent to Northern Ireland as a loan, so that when the good days come again for Northern Ireland, as no doubt they will come, this money that we have advanced, and which we can very ill afford to lose, and which this Bill is going to lose altogether, may be returned to us.
There is an extremely good precedent for this proposal in what is happening in regard to our own Unemployment Fund. Our own Fund in this country is in debit. It ran into debit at one time to the extent of£17,000,000. Happily, that sum has now been reduced. and stands at between£7,000,000 and£8,000,000, but the Chancellor of the Exchequer did not then come to the House of Commons and say: "Well, here is this Unemployment Fund not doing well, the conditions are worse than were anticipated, and I propose that we pay the money out of the taxes, in order to put the matter right." Not at all. What happened was that our own Unemployment Fund went into debit and the money was borrowed at 3 per cent. interest. All we propose is that exactly the same procedure should be followed in regard to these millions which are now to be given to Northern Ireland. No adequate reply has been given to that contention. No adequate reply can be given to it, because it is so right and proper and so in accordance with what is happening in this country.
I say, then, that the attitude of the Government is one which is open to great criticism, and it is specially open to great criticism in view of their professions about economy and their professed desire to retrench. This is not the occasion—I wish it were—for a general debate on the question of economy, but the time will conic, and come within a few weeks, when we shall have an opportunity here of reviewing that whole problem in detail. It will 751 then be very easy to show, I am sorry to say, and to prove to within five places of decimals, what a hollow mockery the Government's professions as to economy are, and how tragically the Chancellor of the Exchequer has failed in carrying out the policy of retrenchment which he put before the country last year, and which the noble Marquess opposite supported, and how completely falsified have been the expectations which the noble Marquess held out a short time ago. When that opportunity for debate comes we on this side will undoubtedly take it.
I think the attitude of the Government with regard to this Bill is singularly unfortunate in view of the mean and shabby way in which they have retrenched on the social services, health and so on, and propose to raid the benefit funds of the health societies of the workers. That brings into very disagreeable and ugly contrast the attitude of the Government in regard to this Bill and towards the proposal we have put forward that this money should not be given but lent to Northern Ireland. I have no hope that the economists in this House will get up and support our proposal. I know that the Bill will be passed on to the Statute Book. I am sorry Lord Banbury is not in his place. He has a reputation for being an economist, which, as I have said before, is not very well based, because his only idea of economy is to cut down schemes for benefiting the working classes, and when it comes to spending money on the fighting Services the more money that is spent the better he is pleased. Still, if he were in his place he might have given some support to our proposal, which is so right and reasonable in itself.
I hope, although this Bill will pass, that the Government, before they bring forward another Bill, as they may be tempted to do—for instance, if the million mark should be exceeded—will then pay more attention to the proposal that the money should be advanced and not given. Meanwhile this Bill will go on the Statute Book as another tribute to the extravagance of the Government and another proof that under this present Administration we are not going to have any real economy at all.

§ THE EARL OF PLYMOUTH
My Lords, I am quite unable to understand the 752 heat which the noble Lord has put into his speech. I am not going to follow him into the realms of economy. It is really quite irrelevant on this Bill. I think this is a matter of elementary justice, and the noble Lord has not denied the contention that it is only right and fair that Ulster should not suffer in her social services as a result of the Act of 1920. I do not think the noble Lord disagrees with that contention. The only suggestion he has made is that this money should be lent and not given to Ulster. I think he is labouring under a certain misapprehension. The suggestion seems to imply that the whole of the deficiency of the Ulster Fund is to be made up in this way. That is not so. All that is being done is that these equalisation payments are being made to wipe out only the excess of the deficiency over the amount which may be proportionate to the British Fund's deficiency, which is a very different thing. I hope your Lordships will give the Bill a Second Reading.