Lords Sitting of 15 December 1927

Preamble
The House met at a quarter past four of the clock, The LORD CHANCELLOR on the Woolsack.
The Marquess of Cambridge—Sat first in Parliament after the death of his father.

DEWSBURY GAS ORDER, 1927.
THE FIRST COMMISSIONER OF WORKS (VISCOUNT PEEL): My Lords, I beg to move that the Dewsbury Gas Order, 1927, be approved.
Moved, That the Special Order which was presented on the 15th of November last be approved.—(Viscount Peel.)
On Question, Motion agreed to.

CALVERLEY AND HORSFORTH DISTRICT GAS ORDER, 1927.
  PETERBOROUGH GAS ORDER, 1927.

    BEVERLEY GAS ORDER, 1927.
    VISCOUNT PEEL: My Lords, I beg to move that these three Special Orders be approved.
    Moved, That the Special Orders which were presented on the 22nd of November be approved.—(Viscount Peel.)
    On Question, Motion agreed to.

NEYLAND GAS ORDER, 1927.
VISCOUNT PEEL: My Lords, I beg to move.
Moved, That the Special Order which was presented on the 28th of November last be approved.—(Viscount Peel.)
On Question, Motion agreed to.

UNEMPLOYMENT INSURANCE BILL.
Order of the Day for the Second Reading read.
VISCOUNT PEEL: My Lords, this measure, the Unemployment Insurance Bill, might generally be described as a measure to secure that unemployment in-
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surance should be regarded as an insurance scheme and should be free from any suggestion of "dole" or charity. The Bill gives insured persons a statutory right, on the fulfilment of certain conditions, to benefit. But these simple truths are embedded in a complicated matrix of references and cross-references to other Acts which make the Bill not very luminous even after careful perusal—even to the very elect themselves. The attention of my right hon. friend was called to the difficulty which members in another place had in dealing with the Bill and, as your Lordships know, a Paper has been placed in the Vote Office setting out the amendments to clauses or schedules in Acts relating to unemployment which have been amended by this Bill. I cannot say it is very entertaining reading for your Lordships, but I trust it may while away an hour or two of your less occupied moments. I feel, nevertheless, that some consolidating Bill would be both beneficial and necessary. I spoke to my right hon. friend on the subject and I found that his meditations had been occupied with a similar question.
It may, I think, fairly be said that a system of unemployment insurance with sickness insurance, workmen's liability and employees' compensation has become a part of the social legislation of the country. The system began to be established on a statutory basis in 1911. It was then confined to about a quarter of those persons who are now included in it. They were for the most part employees in trades liable to serious fluctuations in employment, but under the Act of 1920 the scheme was extended to cover substantially all employed persons except those engaged in agriculture and domestic service. Unfortunately for the Act, very soon after it passed there came upon us a very severe trade depression, which we all remember. Those persons who were insured for the first time had no opportunity but of paying a very trifling number of contributions. The scheme therefore got into difficulties almost at once and the subsequent history, for the six or seven years after that, has been one of a series of legislative makeshifts. Something like a dozen Acts, I believe, have been passed in the last seven years.
In 1924 when an Act was passed, it was felt that a limit must be set to the

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operation of the Bill so that there might be an exhaustive inquiry into the whole subject. The inquiry was undertaken by a Committee of which, as so often happens, a distinguished member of your Lordships' House was asked to be Chairman, Lord Blanesburgh. It included employers, trade unionists, two chairmen of the local employment committees, a Poor Law expert and members who might be considered to represent the general public. Consequently it included a great variety of persons with very many different points of view. After a year's investigation they arrived at a unanimous Report. This unanimity was, of course, due to compromise. The Committee say:—
"We believe that the value of the recommendations is enhanced and not diminished by this fact."
It would of course be a great advantage if this scheme could be accepted by all Parties and the scheme of insurance removed for good out of the arena of Party politics. I do not deny that the subject is very difficult and controversial. Some persons are mainly impressed by the "dole" or demoralising aspect of the situation and perhaps tend to do less than justice to the real necessities of the case. Others are so impressed with the sufferings of the unemployed that they are prepared to go even as far as the payment of full wages during unemployment, however long that period may be.
I should like, if your Lordships would allow me, to quote what should be the characteristics of a good unemployment insurance scheme as described by the Committee. They very compendiously set out the principles on which such a scheme should be founded under six heads:—

"(1) The worker's contribution must be moderate in amount. It should never normally exceed 5d. a week, and, supplemented by the contribution of his employer and the State, should secure him an insurance sufficient in the great majority of cases to save him, during inevitable unemployment, from recourse to public assistance.

(2) The scheme must not, by the extent of benefit promised, tempt the insured contributor to improvidence when in receipt of good pay.

(3) It should provide benefits definitely less in amount than the general labourer's rate of wage, so that there may be no temptation to prefer benefit to work.

(4) It must not interfere unduly with the mobility of labour in this country.

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(5) It must not deter from emigration those who would be benefited by a life overseas.

(6) Subject to these conditions, the scheme should be made as attractive in its benefits to the insured contributor, as, on a strictly actuarial basis, it is possible to make it."

Those were the general conditions governing a contributory unemployment scheme as laid down in the Report of Lord Blanesburgh's Committee. The Government, after weighing the whole subject and particularly the Report itself, have adopted the main recommendations of the Blanesburgh Committee, and so far as they require legislation have embodied them in this Bill.
Before I deal with the general principles of the Bill I should like to say one word about finance. Alterations of the contributions to be paid, the present debt of the Fund being as high as £22,300,000 in November last, are postponed—and are not dealt with under the present Bill—till the Government shall be able to judge more clearly of the financial situation. The Blanesburgh Committee set out a permanent scheme designed to be actuarially sound over a trade cycle. On the advice of the Government Actuary they assumed that normal unemployment would average 6 per cent., and on that basis they settled the rates of benefit and of contribution. But they were faced by two difficulties. The first was a great increase in the debt of the existing scheme brought about by the General Strike and the coal dispute. This debt they proposed to liquidate by an additional penny on the contributions of each of the three parties to the scheme, the employers, the employed and the State. The second difficulty was the ascertainment of whether we were at present in a normal trade cycle. On this they expressed the view which I should like to quote from paragraph 63 of the Report:—
"While we are satisfied that that scheme with its rates of contribution cannot properly come into operation until, with a real prospect of continuance, what we may call the position of last April is restored, until that is to say, the existing scheme is again more than paying its way, we are not without hopes of that point being reached within a period that may be measured by months rather than by years."
Thus they contemplate the continuance of the existing contributions until the pre strike position has been restored with a real prospect of continuance.

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During this period the existing contributions, amounting to 1s. 9d., would be payable. Thereafter three equal sixpences would be payable, and when the debt existing at the commencement of the present scheme was extinguished the contributions would come down to 5d. The view of the Government is that it is premature to deal with finance in the present measure. The debt is still heavy, the conditions for the start of the new scheme as laid down by the Blanesburgh Committee have not yet come about, and the whole matter, including equality of contributions between the three parties to the scheme, is postponed until nearer the time when the proposals could possibly have any direct effect. Your Lordships will know that the postponement of any action dealing with the contributions does not affect the case for the present Bill at all.
Having dealt with the general finance of the Bill I must say a word upon its leading principles. Under the Act of 1920—I think it is called in some of these Papers the principal Act—an insured person could get one week's benefit for every six contributions. Again, the twenty-six weeks' rule, as it was called, limited benefits to not more than twenty-six weeks in any year. But owing to this trade depression and the difficulties which supervened almost at once, what was known as "uncovenanted benefit" was added to the existing scheme of standard benefit. Under the Act—I think it was of the Labour Government—of 1924 this benefit changed its name to "extended benefit," but the two terms are really synonymous. I think that extended benefit is practically interchangeable with uncovenanted benefit. It is this extended or uncovenanted benefit which has given some justification for the use of the word "dole". The word has been very unfairly used in connection with standard benefit itself. But where you have apparently two systems of benefit operating under the same scheme the distinction is not always very clearly appreciated by the general public. It can of course be urged that even extended benefit is not a "dole" because a record is kept of the amount of benefit received over and above standard benefit. When contributions are afterwards paid by the person who has received extended benefit they are cancelled at the rate of six contributions for every week's benefit
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already received. Again, the amount of contributions has been raised to a level actuarially sufficient to carry both classes of benefit. Nevertheless, it is clear that extended benefit is really raised on the security of subsequent contributions—not a very safe investment from a business point of view.
Further, extended benefit is granted, not by way of contract or as of right, but on the decision of the Minister. The claimant has to prove (a), that he is normally in insurable employment; (b), that insurable employment is likely to be available for him; (c) that he has had a reasonable period of employment in the last two years; and (d), that he is making reasonable efforts to obtain employment. The question whether these conditions are fulfilled is settled by the Minister, acting through sub-committees of the local employment committees attached to the employment exchanges. The Minister has power, if he thinks it expedient, to withhold this benefit; and he has done so in certain classes of case—for instance, in the case of single persons who can look to their parents for support, in that of married women who can look to their husbands for support, and in that of short-time workers earning half or more of their normal earnings. Following the advice of the Blanesburgh Committee this discretionary element is wiped out altogether by this Bill. It absolutely disappears and all benefit is made payable as of right under simple conditions.
The chief of these conditions are that thirty contributions must have been paid in the preceding two years and that a claimant must be genuinely seeking work. Further than that, under Clause 5 (2) (ii) of the Bill, while an unemployed person may have a reasonable period in which to try to get back to his old trade, he must after a reasonable time be prepared to accept work in some other trade. Your Lordships will see at once, on a comparison both of the benefits and of the contributions, that insurance under the new scheme is far more generous than under the old. Under the new scheme a person may receive benefit continuously for as long a period as seventy-eight weeks. The provision as to accepting work in some other trade is directed, of course, against the stereotyping of labour in closed compartments. There must come a time under

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certain conditions of business when there is no chance of a man obtaining work in his old occupation and an effort must be made to find work in another.
The next point is the adjudicating machinery under which the benefit is administered. Dealing for the moment with the old system, as there were two classes of benefit so there were two systems of machinery to administer them. As I have already stated, decisions as to extended benefit were theoretically made by the Minister, but in practice the cases were as a rule referred to rota committees of the local employment committees in each exchange area. This method of adjudication follows the discretion of the Minister into limbo and is entirely swept away. The old system for administration of standard benefit is now, I think, with very small changes, the only system that is retained.
Let me sketch what that system is. A claim is made at a labour exchange. The unemployed person hands in his card with the weekly stamps on it, which he has obtained from his employer, and the exchange communicates with the employer to find out the reason why the man left. It also asks the central record office at Kew how many contributions the man has paid. If the claim is in order, the officer passes it and payment is made immediately after the six waiting days. The man has to register at the exchange daily as evidence that he is unemployed. If the local insurance officer is in doubt, he refers the case to the Chief Insurance Officer at Kew, who decides it. If the decision is adverse, the claimant may appeal to the court of referees, a body composed of an independent chairman, a representative of the employers and a representative of the workers. If the decision is again adverse the claimant has the right of appeal to the umpire, and the Chief Insurance Officer, if he disagrees with the court of referees, may also go to the umpire. The umpire, who is appointed by the Crown, decides the case finally. The decision of these cases, therefore, lies with entirely independent officers. The discretion of the Minister does not come in and there is no political influence whatever in the decision of these cases.
The procedure that I have shortly described is the single procedure adopted, but in addition—this is a new point—to this existing procedure, claims are reviewed
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every thirteen weeks, that is, four times during the benefit year, by the court of referees. An examination of this kind is obviously necessary in order to make sure that the benefit continues to be properly claimed. I have three observations to make as regards changes in contributions and in the classes of people who receive benefit. One of the main changes in rates is that, instead of 18 s., a man gets 17 s., and a married man gets 17 s. plus 7s. in respect of the wife, that is 24 s., as against 18 s. plus 5s., or 23 s., under the old scheme. That is to say, a shilling moves from the unmarried man in favour of the married man in order that the latter may meet his greater responsibilities. With regard to dependents a man is not to claim benefit for a woman not his wife who lives with him unless she looks after his children.
One of the chief changes made in the system is the establishment of a new class of recipients of benefit, called "young men" and "young women"—that is, people between the ages of 18 and 21—the rates for whom your Lordships will find set out in the first three schedules. The preponderating opinion of the employment committees advised these changes and they were strongly endorsed by the Blanesburgh Committee. They were anxious to do as little as possible to diminish the work habit among young people, and benefits, and therefore contributions, were placed at a lower rate. They were also afraid that if benefits at this age were placed too high these young people might be deterred from migrating, if necessary, to other parts of the Empire. I should add that, by an Amendment introduced in another place, young men and women with dependents receive the adult rate of benefit.
Then we come to juveniles—that is, people between the ages of 16 and 18. The Blanesburgh Committee suggested that payment of benefit should be withheld in the case of juveniles unless the persons concerned attended a suitable course of instruction where such a course was available. The existing legislation empowers the unemployment insurance authorities, if they so desire, to insist on attendance at a course of instruction as a condition of benefit. It is impossible to make this a rigid condition, because the amount of unemployment among juveniles would be, and fortunately is, so small in certain areas that it would

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be impossible to arrange courses of instruction. But by a new clause, Clause 8, money can be found from the Unemployment Fund for courses of instruction, and this money is not to exceed 50 per cent. of the moneys provided by Parliament. The benefit, therefore, may be said in these cases to be paid partly in cash and partly in kind.
This Bill does not come fully into operation at once. In Clause 14 will be found details of what are called the transitional periods. The object of this clause is, of course, to give insured persons full notice of the change and to make as easy as possible the passage from one system to another. A person may obtain benefit on easier conditions than the thirty contributions to which I have referred, at least during the transitional period. The maximum period during which these concessions operate is just under twenty-four months from the commencement of the Act, and the minimum is just over one year.
Those are the main changes that the Bill makes, but I think that, for the sake of clearness, I should allude to two or three of the more important minor provisions of the Bill. Subsection (1) (c) of Clause 5 refers to subsidiary occupations. A man thrown out of work will not lose benefit if he takes up a subsidiary occupation which he might have carried on even while he was in full work. If a man, for example, were working at some occupation during the day and then took up some occupation during the evening, the clause would apply. At present I understand that if a man loses work and takes up such an occupation he might lose his benefit, but he now retains his benefit if he could have done that particular work while he was doing his ordinary work when he was employed. In Clause 6 you will find the question of disqualification in the case of a stoppage following a trade dispute. At present, in the case of a stoppage of work due to a trade dispute, a particular class of men—say deputies in a mine—would be excluded from benefit in Leicestershire, for instance, if some members of a similar class in Durham were on strike. This new provision limits the disqualification to a particular pit.
The concluding words of the clause repeal the section which gave benefit when the stoppage was due to the
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contravention of the provisions of an industrial agreement. This important provision is introduced on three grounds—(1), That the insurance officers ought not to be judges of the aggressor in a trade dispute; (2), that the old provision operates against long agreements, which are, of course, valuable for securing peace in a trade; and (3), that it operates unfairly as between employers and employed, because, if the men went on strike in breach of an agreement their places could be refused, without forfeiting unemployment benefit, by any other workers to whom they might be offered, as men need not take on work with that employer while the dispute was going on. Under Clause 7 the bridge between two periods of unemployment is expended from six weeks to ten weeks and no second waiting period is therefore necessary. This removes the difficulty in the case of people who are generally employed but experience a difficulty owing to extra holidays imposed upon them in depressed times. Clause 10 modifies the conditions under which trade unions and associations can administer State unemployment benefit. In future on every occasion on which they pay State benefit they will be expected to pay benefit out of their own funds at the same time. Then Clause 13 brings the present provision relating to Regular ex-Service men into line with the new thirty contributions rule.
These are the main provisions of the Bill which is intended generally to secure provision in case of unemployment on particular conditions as a matter of statutory right to persons who are within the field of insurance. Before I conclude, however, I must make one reference to a complaint of some Poor Law guardians that the Bill will increase their burdens. It is said that when people are thrown out of insurance, cease to meet the conditions of insurance, they will simply go over the road to the Poor Law guardians; they will make, in fact, an appeal to the rates and industry will suffer in consequence. That is true to this extent, that although the benefits are much greater under the Bill than under the previous system, the thirty contributions rule is more severe than the present rule for extended benefit. But, anyhow, there is no immediate risk of any such danger as is feared by the Poor Law guardians.

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First of all the old conditions will prevail during the transitional period and during that time at least there will be no extra call upon the guardians. Again, whether or not there is to be any call upon the guardians must be a speculative matter, because, of course, as trade improves and no doubt will improve, the level of unemployment in the coming years must diminish.
It is a mistake to suppose that persons who are cut off from benefit will go automatically to the guardians. A very interesting paper has been laid upon the Table (Cmd. 2984) which compares the figures for unemployment and employment, and those who go on benefit or go off benefit, with the figures for those who come upon the rates, and if that paper is studied it will be seen that there is very much less correspondence than would be supposed between the two sets of figures. Of course if the scheme is to be contributory (and this is essential if it is not to be a demoralising system of something for nothing), then there must be a contribution test of some kind. The test chosen by the Blanesburgh Committee was similar to that proposed by the Labour Government of 1924 to come into practice some twelve months after that Act was passed, and this is as generous as it is possible to make it, to secure a run of benefit as long as 78 weeks for a man who is totally unemployed. In fact we may say that the advantages of a State contributory scheme are, I think, admittedly great. We hear much of hard cases. They are the staple of debate on platforms and in Parliament, but we hear little of the great mass of cases which will be met under this far-reaching scheme. There must, of course, be limits to any contributory scheme, but I submit that this scheme is as generous as it is possible to make it under the necessarily limited conditions and that it fulfils all those principles of insurance which have been laid down in the nature of axioms by the Blanesburgh Report. I hope, therefore, that this Bill will be passed. I beg to move its Second Reading.
Moved, That the Bill be now read 2a.—(Viscount Peel.)
EARL BUXTON,EARL BUXTON,who had given Notice to move as an Amendment, that the Bill be read 2athis day three months, said: My Lords, I have given Notice for the
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rejection of this Bill, but my first observation is in reference to something which fell from the noble Viscount who has moved the Second Reading with regard to the drafting of the Bill. We have become accustomed, I am sorry to say, to legislation by reference and this, I think, is about the worst case that I have yet seen. Here is a Bill which is intended to simplify and consolidate the present Unemployment Insurance Acts. It is to be obeyed by millions of working people. I consider myself and my noble friend to be experts in these matters, but I have not the faintest idea, in reading the Bill without referring to previous Acts, what it is all about and I undertake to say that no noble Lord here can understand the Bill as it stands. It is true that the noble Viscount last night issued a Paper showing how the clauses will read, but that in itself is not clear and, at all events, it was issued too late. I think it would have been better if the noble Viscount had allowed the Chancellor of the Exchequer to save the expense of that Paper.
Perhaps noble Lords will allow me with all modesty to venture to claim their indulgence in this matter because it happens that, as President of the Board of Trade in 1911, I was responsible for drafting, introducing and passing the original Unemployment Insurance Act. At that time the insurance scheme, dealing with health and unemployment insurance, was divided into two parts—one under the auspices of my right hon. friend the then Chancellor of the Exchequer, Mr. Lloyd George, and the other for which I was responsible. Not very much was heard about the Unemployment Bill, nothing like so much as was heard about the Health Bill. The same limelight was not thrown upon it or, perhaps, I might say not so much Limehouse light. It did not deal with vested interests or the strongest of all trade unions, the medical profession, and nobody was expected to lick stamps and fix them on the books. So far as that Bill was concerned it was passed with comparative ease. Of course it was of a modest and experimental character, but I think it is interesting, looking back now, to realise that it was then that the State admitted its real responsibility in regard to the question of unemployment. That principle, of course, has been extended very much since then. That Act was a

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modest one. It applied only to 2,500,000 people, and the whole of the contributions from the three partners amounted to 7d., and the benefit was 7s. That was before the cost of living increased. Now no fewer than 12,000,000 people are covered, the contributions amount to 1s. 9d., and the benefit is 18 s.
I think those who had to do with the matter are justified in claiming that the Act of 1911 was well and truly laid, because there have been fifteen Unemployment Acts since then and every one of them has been founded on the principle laid down in 1911, the details also to a great extent remaining the same. In spite of the difficulties that have arisen the contributions for benefits for unemployment have amounted to an enormous sum. In the last sixteen years a sum of not less than £300,000,000 has been spent in benefit for those out of employment. Some might hold that, as compared with the investment of that money at five per cent., that outlay is an unprofitable investment on the part of the State, but I think that, translated into the terms of the amount of suffering which has been prevented, it has been a great national investment and a great national asset. It has saved the breaking up of many a home, it has prevented privation and destitution, and has maintained the physique and morale of those who were unemployed; and I am not sure that it had not something to do with the ease with which the industrial difficulties that arose after the War were dealt with.
My noble friend has referred to the Blanesburgh Committee and the Bill. I think all of us would desire to express a debt of gratitude to the members of that Committee, and especially to the Chairman, for the work which they have done, and for the unanimity which was finally shown by the Committee. It was a remarkable thing, on a question of this sort, to obtain a unanimous Report from such a representative Committee. And what I regret, and what I venture to criticise, is that the Government have not adopted the main recommendations of that Report, which, I would emphasise, stand and fall together. To take part of them and leave the rest is to cut across the advantages accruing from the unanimous Report of that Committee. As far as I can see also it is the last chance
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we shall have of obtaining a unanimous Report of this character, because I notice that the Trades Union Congress at their last meeting censured the two Labour members of the Committee for not presenting a Minority Report, and the speakers on that occasion said that if Labour Members were on a Committee there always ought to be a Minority Report. They went further than that, and said that that Minority Report ought to be drawn up before the Committee sat and be agreed on by the Labour Party themselves.
My noble friend has stated very fairly some of the proposals of the Committee in regard to benefit which are adopted in the Bill, and he has dealt especially with the question of the standard rate of benefit. He made that so clear that I do not think it is necessary for me to go over the same ground again, and to show what is the difference between the proposed standard benefit, with which I think we all agree, and the dual system which now prevails. There is only one point, which I shall probably raise in Committee—namely, whether thirty contributions in two years is not excessive from the point of view of the insured person. The noble Viscount showed that the Committee recommended certain reductions in the benefits, but he did not state that which is very material to the whole question as to whether this Bill carries out the proposals of the Committee—namely, what the proposals of the Committee were in regard to contributions. They proposed certain reductions of benefit but they coupled with them very considerable proposals in regard to reduction of contributions, both from employers and employed. Their first proposal, to which my noble friend did not refer, one to which the Committee attached the utmost importance, was that the State contributions should be equal to the contributions of the two other partners to the transaction.
VISCOUNT PEEL: I did refer definitely to that.
EARL BUXTON: I am sorry, I did not hear it. The proposal of the Blanesburgh Committee was that as soon as the abnormal period is finished there should be a basic rate of 5d. for each of the partners in the transaction, that is, a total of 1s. 3d. against the 1s. 9d. which

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is the present figure, and that that ought to be laid down definitely in any Bill dealing with the matter; and further, that, during the abnormal period, that should be increased to 6d. in order to bring about a reduction of the debt. In other words, they propose that the employer's contribution should be reduced from 8d. to 5d., and the workman's from 7d. to 5d. and that the State should give a contribution equal to that of each of the two other parties. In regard to youths, they proposed the considerable reduction of 2d. or 3d., and in the case of juveniles of 1½d. To that part of the Report my noble friend did not refer. That is based on the actuarial statement that when the abnormal period of unemployment is past, and when the unemployment figures are reduced to about 720,000 on a 6 per cent. basis, the reduction of benefits and the reduction of contributions go hand in hand and the lien on the Fund would be correspondingly reduced.
How has the Government dealt with those proposals? My noble friend said they had adopted the main proposals of the Committee. That is not so, as far as I can judge, and certainly was not so when the Bill was introduced—and, after all, in these matters one must deal first with the Bill as introduced. There were, I think, just two Amendments made in Committee in the other House. The Government adopted—quite rightly—a standard benefit, but they made no provision for dealing with the very difficult questions which must arise when the standard benefit is brought in—namely, the case of those who are at present receiving the extended benefit, and who will be put out of benefit because they will not be able to qualify for the new standard benefit. Secondly, they have accepted the reductions in the proposed benefits for adults, juveniles and young persons. On the other hand—and this is my first objection to the Bill—they have not accepted any proposals on the other side. My noble friend said that provisionally they desired to keep up the rates, in order to repay the debt, and so on. With that, I think, no one would quarrel, but the objection we have to this Bill is that, while they are accepting reduction in benefit, they are making no statutory provision to carry out the proposals of the Committee in regard to reduction
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of contributions. The result is that there is no security whatever that, at any time when the fund is in a better position, the proposals of the Committee for the very serious reductions in the contributions from the three parties will be accepted.
My noble friend referred to the question of training. One of the most important points, and one to which the Committee attached almost more importance than to anything else, was the training of juveniles, in order that when they return to work they may be better fitted for it, and therefore more likely to get it. That was entirely ignored in the original Bill, and the Bill as it now stands, though it provides to a certain extent for some training, gives really no guarantee that the training suggested by the Committee will be brought into force. The Committee attached so much importance to it that they said they would make no recommendations for the reduction of benefits for juveniles in other respects unless there was attached to it the condition that if the benefit was paid it should carry training with it; indeed, that the benefit itself should be called a training fund and not a benefit at all.
The Government were forced, I think, by the opinion in regard to this matter to deal with the question. But their proposals are very vague. The powers are not compulsory nor are they contingent on benefit being received. They ignore altogether children between 14 and 16, and they limit their proposals to those between 16 and 18, though the Committee themselves were very strongly of opinion that they ought to extend, as far as they could, up to the age of 21 for both sexes. Further, the idea of the Committee certainly was that the expenditure of this money was a matter for the Treasury and should not fall on the Unemployment Fund. It seems to me altogether beside the object of an Unemployment Fund that money should be expended out of it on educational purposes. It is very hard on those who are contributing heavily to their own insurance that they should pay additional contributions towards the education of some of their colleagues, and I am sorry that the Government have put that into the Bill instead of throwing the whole of the cost on the Treasury.

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I should like to say one word on the question of the State payments. The principal proposal of the Committee, and the one to which I think they attached the greatest possible importance, was that in this matter of unemployment insurance the three partners—the State, the employer and the employed—should bear the same burden. That is one of their principal recommendations, and it is really at the base of all the financial proposals which the Committee made in regard to the matter. The State, after all, has the administration of the Fund. It imposes the compulsory contributions, and it would seem only fair that the division among the three partners should be on lines of equality. As a matter of fact, since the Fund was instituted employers and employed have paid about £237,000,000, and the State has paid only about £82,000,000.
The Minister of Labour objected to the proposal solely on the ground that the outlook was so obscure that it was premature to consider this matter. It appears to me it is not a question of normal or abnormal times but a question of principle. Indeed, I should say that the more difficult and more abnormal the times the greater reason there was for a larger contribution from the State. My noble friend will remember, I think, that he was in charge of a Bill last year which took away from the Unemployment Fund a considerable annual sum in order to pay it over to the Treasury. That was during the time of the Strike. As a result the Fund was depleted last year by the Treasury to the extent of about £4,000,000 or £5,000,000, which it seems to me ought to be repaid at the present moment. But the objection I find to the Bill on those lines is that the Government have not adopted any of the proposals of the Committee in regard to the State contribution, the reduction in contributions, or the training of juveniles, nor have they provided anything in reference to meeting the difficulty of those who are thrown out of work.
That brings me to the gravest and most formidable problem which has been raised by this Bill. The adoption of a standard benefit, as my noble friend has pointed out, and the abolition of the dual system of the extended benefit must inevitably throw out of benefit a very considerable number of persons who will not be able to qualify for the new standard benefit,
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the basis of which is 30 weekly contributions in the two previous years. These persons will either have to live or to starve on their own resources or be driven to the Poor Law. As my noble friend has said, the extended benefit was adopted at a time of great national emergency and in those circumstances it was inevitable that it should continue for a great number of years. But clearly it is not within the purview of an Insurance Act. It is based on a totally different system and everyone agrees that is ought gradually to disappear; and the Committee recommend that the scheme shall be placed on a proper insurance basis. After all, this system has been in force for seven years. There are many thousands who have received, and are still receiving this extended benefit, and it cannot be abolished at the end of the period of two years proposed by the Bill without enormous hardship, injustice and privation to a very large number of persons.
What are the estimates of the numbers affected? They vary from 200,000 down to the figure which was given by the Minister of Labour as 30,000. "It is almost impossible to say what the numbers are. The Government Actuary himself told the Committee that he found it impossible to find any statistics which would enable him to estimate the relief to be derived from this provision which would have any effect at all; that is to say, he was unable to give any estimate of the number of those who would be unable to qualify for the standard benefit and thereupon would be thrown out of benefit. But the Government seems not to be particularly interested in the matter. Indeed, my noble friend did not mention anything about it this evening or give us any figures on which we could base our estimates.
When the Bill was about half-way through the Committee stage in another place a White Paper was issued giving estimates which the Government thought would be sufficient to work on. That was a Paper of a very remarkable character. In the first place, these estimates of the number of those who would be thrown out of benefit through not being able to qualify, were made on a basis of 1 per cent. only of those who at the moment were on the live register—a number of about 970,000. One per cent. or about 10,000 of those were taken

1011
as specimen cases. An analysis of the 10,000 showed that about 11 per cent. (that would be about 100,000 on the whole register) would fail to satisfy the thirty contributions. That figure, of course, was too alarming to be left as it was and it had to be diminished in various ways. The anonymous actuary proceeded to reduce it, first by reducing pensions, which is perfectly sound; secondly, by giving his estimate as to what the coal position would be now as compared with what it was when the returns were made, and in various ways, by allowing 25 per cent. for this and 10 per cent. for that, he reduced the figures to 58,000 persons as the number who would lose relief two years hence if the Bill was passed and the standard benefit was introduced.
That was founded on one assumption which obviously was inaccurate. When this Return was made the coal mines were in a very disorganised condition and the percentage of those out of employment in that industry was exceptionally large. Whoever got out these figures had only assumption to go on. The assumption he acted on is that unemployment in the coal industry will be on the average of all the other employed trades. It is known that the coal trade is in far and away the worst condition of any trade. The President of the Board of Trade said the other day that there were 230,000 out of work, that the conditions were not improving and the prospects no better. A figure like that entirely vitiates the figures which the Government put before us. It seems to me that it is a very flimsy base on which to found a Bill of this description, affecting as it does so many persons. The noble Viscount said in his speech that it does not come into force until the conditions become strictly normal, but his own estimate of the position when those conditions come about, in the two years mentioned in the Bill, is that at least 56,000 will be thrown out of benefits, representing a population of about 150,000. That number will suffer from the Bill at that time.
My noble friend said that the bulk of these would not go on the Poor Law. I hope that may be true. I think there is a strong feeling amongst most of those persons that they will not, if they can possibly help it, resort to relief from the Poor Law. The Minister of Labour the
1012
other day said the figures he had before him showed that only 13.5 per cent. of those who were thrown out of employment went on relief during the first fortnight. Surely the first fortnight is just the period in which those persons would endeavour, if they disliked and hated going on to the Poor Law, to remain off it, but gradually, as the weeks and months go by and the pressure on their resources increases, more and more are they driven on to the Poor Law. The noble Viscount says that some of the figures on the Paper circulated a little while ago show that it does not follow, because there is greater unemployment, that there is greater demand for Poor Law relief. I do not myself think that is at all shown from the Paper. What is the alternative for these 56,000 men, youths and girls when they are thrown out of benefit because they cannot qualify? They have only two alternatives. One is to go on the Poor Law and the other is to endeavour to scrape along as best they can on their very meagre savings, which are soon dissipated. That is the alternative which the Government put before them and which I wish the noble Viscount had discussed a little more fully. I wish he had given us a little more detail as to what the Government propose to do in regard to that matter.
That brings me to the point I wish to emphasise to your Lordships—namely, that this Bill as it stands is premature. It does not carry out the provisions of the Blanesburgh Committee Report: it makes no real definite provision for the future. We cannot judge clearly for a few years hence what is likely to occur in regard to unemployment, industry and those other matters to which the noble Viscount referred. Everybody interested in the question would like, I think, if they could, to have at the earliest possible moment a permanent Act and to put this matter on a stable foundation, but I think it is a great mistake to introduce a permanent Act at the present moment when everything is so obscure. Anything may happen in two years. The Bill is founded on the hypothesis that the normal cycle of trade of 6 per cent. will arrive at that period. We all devoutly hope it will do so, but there is no evidence at present to support that view, and no justification for

1013
founding a permanent Act on such very difficult, very obscure and very shifting grounds.
Even the Minister of Labour himself, it seems to me, has given away the foundations of the Bill, because, when he was urged that the State should bear a larger share of the burden, his only reply was that the position was so obscure that we must wait and see how it will develop. Both he and the noble Viscount who is in charge of the Bill here have pleaded that the outlook is so obscure that it would be safer to keep the contributions as at present and reduce the debt until we can see better than we can now what is going to happen. The Minister of Labour, the other day, in Committee in another place, said that, though he did not necessarily expect it, it was quite possible these forecasts would be falsified and in that case he could introduce another new Bill. The Government Actuary gave a solemn warning that it would be very inexpedient to introduce such proposals as these until we had reasons for concluding that industry had entered into a normal trade cycle. It seems to me a dangerous proceeding to found permanent legislation on a hypothesis for which we have no proof and which lies on insecure and shifting ground. An overwhelming argument for dealing with the matter now by a temporary measure is that we have dealt with it before during abnormal times in that way. If that were done a permanent Bill could be introduced with general assent when these times have passed away.
I therefore desire to move the rejection of the Bill on two main grounds. In the first place, as I endeavoured to show in the early part of my speech, the Government ignore the most important and vital proposals and recommendations of the Committee and the Bill is, therefore, one-sided, incomplete, injurious to trade and unjust to contributors. I have also endeavoured to show that the outlook is so difficult and so obscure that to introduce a permanent Bill now is not only in itself a dangerous proceeding but one that will be fraught with great injustice to a very large number of persons. I would suggest that a temporary measure should be passed, if it is necessary, though the other Act is
1014
still in force, till we arrive at a period when we are on firmer ground for judging of the financial, economic and social effects of these proposals. I do not like opposing an Unemployment Insurance Bill and it is with regret that I ask your Lordships to divide against this one, but I believe that if it is persisted in and passed in its present form it will give a set back to the problem of finding the best method of dealing with unemployment, while it will commit a very great deal of injustice and bring about a great amount of hardship. I beg to move.
Amendment moved—
Leave out ("now") and at end of the Motion insert ("this day three months").—(Earl Buxton.)
THE LORD BISHOP OF SOUTHWARK: My Lords, I do not propose to discuss this Bill or to occupy your Lordships' time at any length. There are certain clauses in this measure which I should be able to support, but there are two matters in connection with it which cause me very great misgiving and on which I should like some reassurance from the noble Viscount who is in charge of the Bill. Before I mention these two points I would endorse what has already been said about the form in which this measure is cast. Here is a Bill of the greatest interest to something like 12,000,000 people, and it is cast in a form which will be quite unintelligible to the vast majority of them. Cross-word puzzles are all very well in their place. I have always regarded them as a harmless but irritating form of amusement, but they become perfectly objectionable when they are taken as a model for an Act of Parliament. I venture therefore to hope that those who are responsible for this measure will see that it is translated into simple language, simpler even than in the Paper which is before us, language which is ordinary commonsense English which may be read by those who run and which may be understood by those who are unintelligent.
Now I turn to a more important point. I should like some answer to a question which has already been raised by the noble Earl who has just spoken. What is going to happen when this measure comes fully into force, to those people who will no longer be able to receive unemployment benefit? We are uncertain as to their

1015
numbers—there may be anything between 30,000 and 200,000—but we all agree that there will be a large number of people who in the future will not be able to receive benefit in this way. How are they going to live? Are we in future to have this great Unemployment Fund out of which relief is given, or are these people to be thrown on the Poor Law? If they are thrown on the Poor Law what happens? It is bad economically. It means that the rates go up, and it means that as the rates go up business moves away from that district, and with the removal of business unemployment again increases and you get into the old vicious circle. But there is a more important objection which I have to this course—namely, that you have among the great mass of the working classes an intense desire to avoid coming in any kind of way on the Poor Law. This was very strong before the War, but I fear that in some districts of late it has been broken down. You will accelerate the breaking down of this instinct against resort to the Poor Law if you force 30,000 men or more to seek relief in this way.
Now I turn to the other problem which has really caused me to rise to address your Lordships. I have always been deeply interested in the question of unemployed juveniles. The latest figures we have on this matter show, I believe, that there are something like 60,000—the last figures I have refer to last year—who, every month, are on the register seeking employment. Those of us who have had anything to do with boys' clubs know that there is nothing more demoralising to the character, physique and general outlook of a boy than a period of unemployment. You see them going to bits before your eyes. This has been fully recognised by the Blanesburgh Report. Let me quote a sentence different from the one which has already been quoted from that Report, which quite emphatically and distinctly sets forth the recommendation of this Committee. The Report says:—
"It is at this age"—
that is, the age between 16 and 18—
"that industrial workers are made or marred, and we are convinced of the necessity of providing them when out of work with suitable industrial instruction and training. This is the reason for our recommendation that no payments shall be
1016
made to juveniles at all unless they attend a suitable course of instruction, wherever such a course is available. . … We attach the greatest possible importance to this provision of facilities for training."
When the Bill was introduced in another place no reference at all was made to this recommendation. In response to appeals from every side of the House, however, the Minister of Labour, in a most sympathetic reply, showed that he was prepared to try to meet in some way the wishes of the House.
But the clause which was actually introduced and which is now before your Lordships falls very far short of the recommendations of this Committee. Let me show you how it falls short. There are two classes of unemployed lads between the ages of sixteen and eighteen. There are those who are in and out of work. They are out of work a short time and then in work again. They can be helped by unemployment centres, of which there are eighty, I believe, now in existence. Those unemployment centres help to keep up their self-respect and their industrial efficiency. These centres, which in the past have suffered from lack of funds and equipment, will no doubt be largely helped through the support which will come to them in the future under this clause. But there is another class of unemployed boys, the boys who are out of work at the age of sixteen—comparatively few are out of work before sixteen—and have practically no chance of obtaining work. That is largely the case in the mining districts, it is the case in the shipbuilding districts, and there are districts of London where it is also the case. These boys of sixteen are out of work with no opportunity and no likelihood of obtaining work in the trades in which their fathers have been engaged.
This Report quite clearly recognises that these boys should have some definite training, not disconnected teaching, but definite training such as I believe is given to-day in Germany, for instance, to boys of this kind who are out of work. The Bill gives no kind of help whatsoever to those boys. It gives help, as I have already pointed out, to those who are out of work for short periods and can attend the unemployment centres. The Minister of Labour himself made this perfectly clear in his speech on the

1017
Report stage. He said of these unemployment centres, which it was proposed to set up:—
"The whole object of them is, in brief, to keep the boys and girls who attend them fit and interested. It is just to preserve their industrial character. It is not intended to teach any of them trades. It would not be correct for a moment to think that these classes can be used for vocational training; that is impossible."
He repeats this statement later on in another speech. What I urge on the Government is to see if they cannot carry out, if not in this Bill in another measure later on, the full recommendation of the Blanesburgh Report, that training should be given to these boys who are out of work not for a short period but probably for a very long period. I hope that this will not be regarded as a small detail which ought to be raised on the Committee stage. It really affects the whole question.
Whenever we are discussing this question there always arises the question as to how to reduce the amount of unemployment. Turn to a dozen experts and each one of them will give you a totally different solution of the problem. But another question which always arises is the question of the unemployable. Ask the experts how you are to reduce the number of unemployables and I venture to say that they will all agree in saying that if you can only train the boys who are out of work then, within a few years, you will have reduced by one half the numbers of the unemployables who are created very largely from the ranks of boys who for a long period have to be without employment.
EARL DE LA WARR: My Lords, I think there is probably one point in this Bill on which we should all be prepared to join in congratulating the Government, I refer to the removal of the word "dole" from our social system. There was one other point that the noble Viscount who spoke for the Government made that we probably all welcomed. This was when he said that the Blanesburgh Report had been accepted by all Parties and that unemployment insurance could thus be regarded from a non-Party point of view. That is not altogether true. The noble Earl, Lord Buxton, has pointed out that the Labour Party do not accept the Blanesburgh Report with any degree of gladness, although it is perfectly true that its representatives on
1018
the Committee did sign the Report, because they thought that in doing so they would get a unanimous Report which would go a very long way in their direction.
The noble Earl who spoke from the Liberal Benches went on to say how very far the Government was from accepting the Report in any of its essential recommendations, and the right rev. Prelate who has just spoken endorsed that opinion. We have been shown that the Bill fails to carry out the recommendations of the Report with regard to juveniles, with regard to the establishment of equal contributions from all parties, and with regard to the reduced contribution from industry. What reason was given for the non-reduction of industrial rates of contribution? The noble Earl, Lord Buxton, dealt with that point. He pointed out that the Government claimed that it was because of the debt of the Fund to the State, which had to be paid off. Lord Buxton showed that in reality there was no debt from the Fund to the State but, on the contrary, a debt from the State to the Fund, because the State had never really faced its responsibilities in this matter and paid a contribution equal to that which industry had paid.
These points have already been dealt with. The point which I wish to try to make is that this Bill is very far from being what the noble Viscount on the Government Bench implied it to be—a non-Party way of dealing with this situation. On the contrary, this is a purely political Bill, introduced from a purely political standpoint. I might almost go further and say that this Bill is not so much the product of the Ministry of Labour as of the Treasury. The whole principle of the Bill is designed to save the Budget, irrespective of the interests of industry. In so far as the State is willing to meet its obligations under this Bill it intends to keep up industrial contributions. In so far as it does not meet its obligations, in so far as it is going to turn away a very large number of men—this point has been discussed by the two last speakers, and the estimates vary from 30,000 to 200,000—it will inevitably throw a heavy charge upon the rates, and I submit to your Lordships that in so doing, in keeping up industrial contributions or in increasing the rates,

1019
the Government is in both ways dealing a heavy blow at trade.
Contributions per capita of men employed mean for industry a direct tax which must be part of the cost of production. After all, Income Tax may be a burden, but it is at least spread over the whole nation and all interests in the State pay according to what they are taking out of industry, according to their profits. Under this system those parties in the State whose interest is fixed, such as debenture-holders, pay no contribution whatsoever. Stockbrokers, lawyers and those in other industries and professions, who, we know, make considerable profits compared with the amount of labour that they employ, will make very little contribution on this basis. Surely it is madness to try to raise money, to try to tax the number of men employed, when the very problem from which they are suffering is unemployment itself. Why, therefore, should this Government, while claiming to accept the Blanesburgh Report, reject this most important recommendation of that Report? As I have said, in so far as the Government do not meet their obligations these men must go on to the rates. Rates are a direct charge on production; they are part of the cost of production. They bear most heavily on those necessitous areas where the bulk of the unemployment is to-day and, as the right rev. Prelate said, can only result in increasing unemployment in those areas.
On what ground do the Government claim to be passing the provisions of this Bill? What is the necessity for this Bill? The Minister of Labour, in the other House, made it very clear. He said that it was because this was an insurance scheme, and they had to deal with it on a strictly actuarial basis. We claim that there is no actuarial basis for the provisions of this Bill. The Minister of Labour, when he was asked why he took the particular basis that he has taken—namely, 6 per cent.—as the foundation of his calculations, replied that he personally had come to the conclusion that it was at least as reasonable to take 6 per cent. as any other figure. If we refer to the evidence of the Government Actuary, which is to be found in a White Paper, what do we find that he says? He says:—
"There are, however, no means by which the recipients of benefit during this period
1020
could be statistically classified, even if, which is equally impossible, the general rate of unemployment in the period could be predicted."
Is anything clearer than that, whatever the reasons for this Bill, there is no justification for it on actuarial grounds, because it possesses no actuarial basis whatsoever?
I have already tried to argue that the manner in which the Government propose to pay off the debt to this fund—namely, by maintaining the existing high rate of industrial contribution, against the recommendations of the Blanesburgh Committee—is one that is designed to harm and damage industry. I want to make one more point round that subject. Not only is the fact that these contributions are high a serious matter for industry, but as there is no existing actuarial basis for any calculations, the amount of contributions towards the fund is bound over a period of years to be variable. Indeed, since the first Act was introduced, there have been no fewer than five attempts to find a basis for settling the amount of premiums. They have varied from 6⅔d. to 10 d., then to 1s. 6¾d., then 2s. 1¾d. and then back to 1s. 9d., and now in the Blanesburgh Report we have been recommended to change the basis once again. If you examine those figures, and the dates on which the changes took place, you will see that they increased during periods when unemployment was particularly serious. That means that the industrial contributions were actually increased at a time when industry was particularly depressed. If unemployment is variable, and we are all agreed there, and if industrial contributions must be fixed, then the inevitable conclusion to be drawn is that the State contribution must vary, that is, that the State must be prepared to fix industrial contributions and then itself pay the residuum.
Your Lordships may say that it cannot be done—that the State cannot afford to take on such a liability. I want to put this point to your Lordships. We have to face the facts of the situation. There are round about a million men unemployed, and if we wanted, and I do not for a moment suggest any of us do, to let those men starve, we are not by law at the present moment allowed to do so. Therefore we are faced by the situation that round about a million men are

1021
unemployed, and somehow or other they have to be maintained alive, and the question we have to consider is how best we can carry out that operation. We have three choices. Either we must make industry carry the burden direct, or we must throw the burden on the rates, or else make the State spread the whole burden over the whole of the national wealth. It is not a bit of good thinking that we are going to solve this problem by shirking our liability. Shirking a liability which has to be faced does not wipe off that liability. We have to consider whether we are going to meet this obligation in a spirit at once generous and businesslike, or whether we will deal with it in a way which is niggardly, inefficient, overlapping, and the cause, through its inefficiency, of countless misery.
How does this Government imagine that it is going to help industry by reducing the Income Tax, when it is going to tax industry in a much more harmful way, either through per capita contributions or through the rates, which I have already shown are infinitely more harmful to industry even than Income Tax? This Bill can only make things worse. It will deprive of benefit men who most need and deserve it—men who are in industries which have been depressed for years, men whose savings are already exhausted. Your Lordships will realise that in certain industries, such as mining and steel, there are many men who not only have not had thirty weeks' work but hardly thirty days' work in the year, and these are the men who are going to be hardest hit by the Bill. It provides no hope for the young men who, for years, have not been able to obtain a status in industry because they have never been able to get a job, and are therefore not insured. It affords but little hope of training for these young men, or for those who must look to eater industry if they ever hope to have another job again.
This proposal comes from a Government which is willing to continue pouring half a million children a year on to the labour market from our schools between the ages of 14 and 15, while able-bodied men are left in enforced idleness, and which continues to regard this problem as one capable of being solved by tinkering and by piecemeal legislation. It perpetuates
1022
and intensifies a system whereby such obligations as it does recognise are met in such a manner as to do the most harm to those industries and districts which are suffering most, instead of coming forward with a bold scheme which recognises from the beginning the national responsibility for this essentially national problem. If the noble Earl, Lord Buxton, presses his Motion for the rejection of the Bill to a Division all those who sit on these Benches with me will join him.
LORD CARSON: My Lords, I can assure you that I am not going to make a speech on a Bill not one line of which do I understand. But the other evening when the Landlord and Tenant (No. 2) Bill was introduced I spoke as strongly as I could in protest against a Bill of that character being taken without proper time for its consideration at the end of the Session in this House. There was this to be said for that Bill, that it had passed its Third Reading in the House of Commons without a Division, but the present Bill is a much more difficult Bill to understand, and much more complicated. It was strongly contested in the House of Commons. Therefore once more I rise to protest against the way in which we are asked to pass it here to-day. As a lawyer of some fifty-one years' experience I can assure you that it would take at least a week to understand this Bill; yet I am asked to vote for it to-night, knowing nothing on earth about it, except what I have been able to pick up—which is very little, because unless you know the real aims and objects of the Bill such speeches as we have heard in the House to-day give us little or no assistance in deciding which way to vote.
My natural wish would be to vote against the Amendment. But ought I to do that in regard to a Bill that I do not understand, in regard to a Bill that the Government have given us no opportunity of understanding? Ought I to do it in regard to a Bill which affects large masses of the working people of this country? Ought I to do that, or ought I to agree to the noble Earl's Amendment which says that it should be postponed for three months? I would much rather see it postponed for some months; that is a very reasonable suggestion. And if I am able to stay in the House until the Division, having

1023
regard to my other arrangements, I shall certainly vote for the Amendment that has been moved. But I have another reason, and it was referred to by the right rev. Prelate who addressed us, and who always takes such an interest in this class of Bill. It is that the Bill is an absolutely unintelligible Bill in the way it is drawn. I suppose legislation ought to be drawn up so that the people affected by it are able, in the present progress of education, to make something out of it. I defy any one, I do not care how intelligent he may be, belonging to the so-called labouring classes, to understand this Bill upon the reading of it. And why? I never saw a Bill drafted like this before, never. It is what we have been protesting against at the Bar, on the Bench, and in the House of Commons ever since I came into Parliament thirty-five years ago—legislation by reference. But it is legislation by reference gone stark, staring mad. I never in my life read such a production.
I take one page at random. Here is the kind of thing that you have to make out:—
"subsection (1) of section one of the Unemployment Insurance Act, 1922, shall be amended as follows—
(i) for the words 'a widower or an unmarried man has residing with him any female person for the purpose of having the care of his dependent children and is maintaining that person, or has and has had living with him as his wife any female person' there shall be substituted the words 'either a man or a woman (but not being a person entitled to an increase under this section otherwise than in respect of his or her dependent children) has residing with him or her and is wholly or mainly maintaining a female person who has the care of the dependent children of the person entitled to benefit'."
Then you come to the next paragraph:—
"… for the words 'decided by the Minister' there shall be substituted the words 'determined in the same manner as a claim for benefit'."
and so on, giving definitions. For instance, I find this:—

"(i) for the words 'an unmarried person' there shall be substituted the words 'a person';

"(ii) after the words 'widowed mother' there shall be inserted the words 'widowed stepmother, mother who has never been married or mother whose husband is permanently disabled and unable to work'."

1024
That is something like ordinary Acts of Parliament, but now turn to the Fourth Schedule.
Really, if the Government did not know that they have such a majority in the House of Commons and that we are all like sheep here, always following them, I do not think they would dare to bring in a Bill of this kind before any intelligent assembly. There are at least from thirty to forty amendments made in the Schedule, any of which is almost equal to a small Bill. Take one of them. Here is a little amendment, which they call a minor amendment, It looks so well, it is such a small thing that it does not matter. It is an amendment to the Unemployment Insurance Act, 1920:
"At the end of subsection (3) there shall be inserted the following new paragraph:—
"If the employer, being a company, fails to pay to the unemployment fund any sum which it has been ordered to pay under this subsection, that sum, or such part thereof as remains unpaid, shall be a debt due.…"
Why was not that put direct into the Bill? It was in order that they might say that this is a very small Bill, which you can pass in an hour or two.
At the very last moment—I suppose in consequence of some observations of a rather drastic character which were made by Sir John Simon, in which he gave up the Bill in despair—they produced this document which I hold in my hand, a document of nineteen pages, to tell you what the Bill is about. Then you are going solemnly to say and assert, in taking your part in the Constitution, that you will vote the Bill, and you will amend it in Committee in half an hour. So long as that way of transacting business goes on in your Lordships' House I know of no way of making a protest against it, except determinedly and consistently voting against it, and if the noble Earl goes to a Division I shall support him.
VISCOUNT HALDANE: My Lords, I do not always find myself in agreement with the noble and learned Lord opposite. On this occasion I do find myself in agreement with him. He has pointed out to your Lordships that a Bill of great importance is brought before us at a period of the Session when we cannot attend to it or even properly consider it. It is a Bill of great magnitude

1025
which gave rise during its passage through another place to something like a scandal owing to the want of adequate presentation and time. In addition to that, the Bill has been subjected to a very searching analysis by my noble friend Lord Buxton, who speaks with great experience and much authority upon the subject. My noble friend Lord De La Warr has also drawn your Lordships' attention to various points of great importance. I shall not recur to them, but I wish to say that I find myself also in agreement with the right rev. Prelate who spoke earlier in the debate and who pointed out the deficient provisions of the Bill with regard to training. That is a matter of great importance because this is a Bill to deal with unemployment. One of the greatest of the problems which confront the Government at this stage is the problem of unemployment, and here is a Bill in which they do not appear to have given any but the most superficial consideration to the problem. There is Clause 8 I agree; but anything more inadequate to the purpose before us it is difficult to conceive.
I will not go over ground that has already been covered in this debate, but I must say that the problem of unemployment is not an insoluble problem, nor is it one which the Government can excuse themselves for failing to consider in the Bill before us. There are considerable prospects of new forms of employment coming before us. I will not go into those which are discussed in the last Report and the former Reports of the Fuel Research Board, whose Reports I always read with great interest. But I recognise that some of the new methods of employing coal and providing energy are methods which will require still more consideration before they can be said to be practicable. I go rather to one form of employment that is an established fact. Last year the noble Viscount who is in charge of this Bill rendered a great service to us by the very lucid exposition he gave of the Electricity (Supply) Bill when it was before this House. I have always thought that the Electricity Act was an accomplishment greatly to the credit of the Government. I have given them the fullest praise for it and I shall continue to do so. But, having passed it, they seem to have taken very little further interest in it. I know that
1026
schemes are going on and that is the very thing I have in mind; but I want to know why under this Bill when the opportunity offers there is no sign of any serious desire on the part of the Government to prepare young persons who are going out of employment in such industries as the coal industry to go into the electricity industry?
The Electricity Act is coming into operation more rapidly than was anticipated. Already a scheme for Central Scotland is through and the contracts for carrying it into execution are being placed. Already a scheme for the London area is coming very near the point at which work will have to be done under it. There will be employment of three kinds under these schemes. There is the setting up of the generating stations; there is the establishment of the grid system, which will require a great deal of work; and last, but not least, there will be the enormous amount of work which has to be done in the municipalities where distribution is to take place and in the small places which will be served from time to time by the grid system. There is a great deal of employment for workers, but workers who will require a certain amount of training and a certain amount of skill. All I find in this Bill is the very meagre and dubious provision, which will probably be starved by the Treasury even as it stands, for giving some kind of teaching, which does not seem to me to be in the least apposite to what is required.
The problem of unemployment is a very serious one and I think that nothing can excuse the Government for not having grappled with it much more seriously than they have. There are before them the things to which I have referred and other things for which they might be taking in hand the training of all those who will have to go out of certain industries which are more or less being superseded, such as a large part of the coal industry, and prepare them for taking up other things. Nothing is done. Had the Government even taken up the general education of these unfortunate young people designated in this Bill, they would have put them in a position to find employment for themselves more readily than they can do at present. But there is nothing of the kind, and it looks as if the only notion of the Government is to tide these

1027
unfortunate young people over a period of starvation and to let them take their chance afterwards.
The proper course is to train them. I know that economists of the Government say that that is an expensive business and that we have not the money. We have plenty of money to do it if we bear in mind that we shall have to spend something considerable in saving these people from starvation. It is a very inadequate view of economy to take to say that it is too expensive. It is a view of economy which is wholly wrong, and you must realise that by hook or by crook you have to raise the money, as you can raise it, to save them from becoming a burden upon you in the immediate future for want of preparation for a vocation in life. I am, and I have always been, a strong advocate of the education of the democracy and of their mental training, to fit them for a variety of occupation which I believe will be greater and greater as science advances and its application to practical things develops. For that reason alone I should have to condemn this Bill.
But I condemn it still more for the reasons given by the noble and learned Lord opposite and by my noble friend Lord Buxton. This is a Bill, if ever there was one, which should have been prepared after the fullest consideration and should have been of such a scope as to cover the whole problem. This is not the time of the year to bring forward such a Bill, nor is the Bill, brought forward in the fashion in which the Government have brought it forward, worthy of our serious attention. It is far better, as Lord Buxton said, to make a temporary provision to tide over the period of difficulty, and then, next Session, to introduce a real Unemployment Insurance Bill on a larger scale, including training to enable workers to go to other industries, and of such a character that we could pass it with some hope that it will really deal with what, perhaps, is the gravest problem which confronts us at the moment. It is because I hold these views that if my noble friend goes to a Division I shall support him.
VISCOUNT PEEL: My Lords, may I take the opportunity, as I see my noble friend Lord Blanesburgh in the House and as he was not here when I was introducing the Bill, to express our gratitude to him
1028
for the great and successful labours which he has brought to accomplishment as Chairman of the Committee on Unemployment Insurance? I think we shall all feel that it was a really masterly performance, not only to produce so admirable a Report but to bring all the different conflicting views and opinions of the Committee, members of which, of course, represented differing views and opinions, into one unanimous Report. I commend both his ability and his astuteness.
The noble and learned Lord behind me, Lord Carson, has spoken with some disparagement of the way in which this Bill was drafted. I am bound to say I have some sympathy with his observations. When I tried to address myself to the Bill I found myself in a net of familiar references to other Bills and by a schedule remarkable for its complexity. I could not but admire, to tell the truth, the methods of another place or the ability of members in the House of Commons who were able, apparently, to discuss for so many days as they did so complicated a Bill and a Bill founded on references and cross references to past Acts. But I felt, when I came to address myself to it, less competent than some of those members. I felt it very difficult to understand the Bill unless I was assisted, and because I felt that possibly that feeling might be shared by some of your Lordships, I asked as soon as possible—in fact as soon as I began to study the Bill—if this Paper could be prepared and circulated showing what are the changes brought about by this Bill, making it, I think, a good deal more intelligible to your Lordships' House. I was rather disappointed by the reception it got. I thought I had made rather a gallant effort for the elucidation of the Bill and I was told by the noble Earl, Lord Buxton, that I had better not have done it at all, that I had wasted money. I think that is a little hard.
EARL BUXTON: May I explain that is not exactly what I said? I said the Paper before us was very useful and that it would have been more so if we could have had it some time ago. We only had it last night and, therefore, have only had a few hours in which to study it. I am not blaming the noble Viscount.
VISCOUNT PEEL: I thought it was the night before.
EARL BUXTON: Well, it was not here.
VISCOUNT PEEL: I can only say that I really did my best to make the thing intelligible and I am very grateful to those officials who worked very hard for two days in order to produce the document in time for your Lordships. I regret profoundly that you did not have it before. I should have liked you to have weeks in which to study it, but I really did my best. It is rather hard that the noble and learned Lord, just because the House of Commons have produced a Bill in a remarkable form, should inflict a great injury on the country and the insured people by asking you to throw this Bill out at a very serious issue of affairs.
I think three points were dealt with in the course of the discussion. There was first of all the question of the training of juveniles. It was complained that nothing, or very little, was put in the Bill about the training of juveniles. My first answer to that is that it was not necessary to put it in because if the noble Earl, Lord Buxton, had had time to study the Act of 1920 he would have seen that there is ample power to require juveniles, as a condition of receiving benefit, to go to some of these centres and get education. I said that it was not possible as yet to put in a compulsory clause that they must go to these training centres as a condition of receiving benefit, but the Government is doing everything it can to develop these training centres for juveniles. May I read what was stated on behalf of the Government a few days ago in another place on that point?—
"We have established, and are establishing, throughout the whole of South Wales, Northumberland and Durham, which are the acute spots, juvenile unemployment centres in a number of towns. And when the system is complete … there will not be a single boy … who will not be able to go to a juvenile unemployment centre if he wishes to do so and obtain instruction. … The whole of the machinery of the employment exchanges is there to place these boys as they emerge from their training."
My answer, and it is a complete answer, to those who say: "You are not giving training to these juveniles who are out of work," is that in these depressed areas the Government has declared that before long there will be a complete system of training centres so that not one of these young people shall lack training during the time he is out of employment.
1030
May I explain for a moment that this is not a comprehensive Bill to deal with unemployment. It is a Bill to deal with unemployment insurance. It does seem to me rather illogical to desire to throw out a Bill establishing a great system of unemployment insurance because it does not deal with the whole system of unemployment. That, as the noble and learned Viscount opposite said, is a great question. It is a question to which the Government is directing by far the greatest part of its attention, endeavouring to attack the problem from a great many sides and on a great many issues. To say that you are going to throw out this Bill because it does not deal with matters which would not be relevant to it is really to display an extraordinary levity in dealing with a most serious subject. The noble Earl, Lord Buxton, suggested, I think, that I did not say very much about those who would be excluded from benefit. As I tried to explain, and as has been made clear over and over again in the Report of my noble friend Lord Blanesburgh, under any system of unemployment insurance you must have certain tests, however wide those tests may be, because if it is a system of insurance to which everybody must contribute it quite clearly is not fair to all the other contributors to make the conditions for some people so easy that they get spent upon them money which has been contributed by the others and which is not fair to the general standard of insurance.
May I read on that point paragraph 75 of the Report? So much stress has been laid, and rightly laid, on my noble friend's Report and it has been treated as almost a criminal act on the part of the Government to depart in the least from any of the inspired observations of my noble friend, that I am entitled, I think, to read it in my own defence. It says:—
"It is only a small minority who are continuously unemployed for any great length of time."
It has been forgotten, I think, in the discussions that unemployment changes from one to another and that the people who are continuously unemployed are very few. The Report goes on:—
"Thus at the worst our proposals could not shut out many, and they would only be those who had failed to obtain work in an average of 15 weeks out of 52. It will

1031
be conceded that in the generality of cases persons with so poor a record of employment could scarcely claim still to be in the insured field; that there is grave doubt as to the genuineness of their search for work; and that the exclusion of such individuals is only fair to the general body of insured contributors."
Therefore, the Report itself admits that there must be under any scheme of insurance a certain number of persons who are excluded from benefit. In my speech in opening the discussion I gave certain figures taken from the Actuary's Report as to the number of persons who might, two years hence, find themselves outside the field of insurance. These figures have been criticised, and the noble Earl, Lord Buxton, without producing any figures or any evidence himself, is distressed at the figures of the Actuary. You can always reply to a point by saying that the Actuary's figures are wrong, but I ask your Lordships to study them and then consider whether the noble Earl, Lord Buxton, is right and the trained Actuary is wrong.
As regards the question of Poor Law, a great deal of distress was exhibited by the noble Earl, Lord De La Warr, who, rather to my surprise, seemed to be very much disturbed at the idea of putting burdens on industry. Why, it is only a few weeks ago that we were informed that his Party wanted to clap another £100,000,000 on the taxation of this country, which must have a disastrous effect on industry and a terrible reaction on unemployment. It was admitted that if that money was to be raised it would have to be done by taking those reserves which were going to be put aside by companies for industry. What are the facts as to the transfer? I can only deal with such figures as have been already examined by actuaries, but it comes out quite clearly that it by no means follows that these men who get out of the field of unemployment insurance will go to the Poor Law. The White Paper that has been circulated to your Lordships shows clearly that there is no necessary connection between the two sets of figures. It does not at all follow that those who are thrown out of insurance must have recourse to the Poor Law.
The third complaint, and I think the most grievous complaint, made about the attitude of the Government towards the
1032
Report, was that they had not strictly followed the advice of my noble friend's Committee in the matter of finance. The noble Earl, Lord Buxton, laid tremendous stress on the necessity for equal contributions from all parties — employers, employed and the State. I was wondering why he laid so much stress upon that, and I thought that probably it was a part of the Bill of 1911 with which he had so much to do. I was rather surprised therefore when I looked up the Act of 1911 to see that in his own measure there was no equality. There was to be a contribution of 2½d. from the employer, 2½d. from the employed and 1⅔d. from the State. Therefore he was very nobly defending a principle which is not his own and which he did not carry out when he had the opportunity. But there is a very curious misapprehension about this part of the Blanesburgh Report. As I have stated, the question whether contributions are reduced to 6d. or 5d. makes no difference to the present position at all. The contributions under the Blanesburgh Report are to go on at the present rate of 1s. 9d.
The Blanesborough Report suggested that when what flowed into the Fund was greater than what flowed out of the Fund it might be possible to reduce contributions to equal sixpences and at a later stage to equal fivepences. The noble Earl, Lord Buxton, was very indignant that this was not to be put into the Bill at once. He answered his own point very accurately, I thought, in a later part of his speech, because when he asked your Lordships to throw out the Bill he said, in effect, "I think this Bill is premature owing to the difficulty of gauging the situation and the troubles of unemployment. It really is not possible to bring in and pass an Unemployment Insurance Bill at this stage. Wait a little time until the situation is settled." That is the reason why the Government decided that they could not, in view of the uncertainty of the financial situation and the labour situation, reduce contributions at this stage to equal sixpences or equal fivepences. They reserve their decision on that point until a time when matters are more settled and when, the heavy charge upon the Fund having been either paid off or very much reduced, it will be possible for the Government to say with some certainty what those contributions should be.

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Therefore we have not gone away from the Blanesburgh Report. All we have done is to postpone consideration of that portion of the Report until a later stage.
It is really quite untrue to say that we have not fallowed the main principles of the Blanesburgh Report. The noble Earl, I thought, rather hankered after the old extended or uncovenanted benefit, but the question on which your Lordships will have to vote is: Are you or are you not going on with the old system of uncovenanted or extended benefit, which gave to the whole scheme the possibility of having the word "dole" attributed to it, or are you going to put the whole system of unemployment insurance on a new basis, on one single basis, so that under certain conditions unemployed persons will be able to claim, not as a charity but as a right, these grants from the insurance fund? By this measure we exorcise and destroy any idea of taint and demoralisation and place the whole system of unemployment insurance on a firmer basis far more suitable to the virile and independent spirit of the people of this country.
THE LORD PRIVY SEAL (THE MARQUESS OF SALISBURY): My Lords, perhaps you will allow me to offer one word of explanation. I was very much surprised and rather shocked to hear that my noble friend Earl Buxton was not able to obtain a copy of this White Paper earlier than, I think he said, this morning.
EARL BUXTON: Last night.
THE MARQUESS OF SALISBURY: I myself am responsible for having made an announcement to your Lordships' House as far back as Tuesday afternoon that there would be copies of this White Paper available for noble Lords in the Printed Papers Office in the course of that evening. I do not know whether the noble Earl was here at that moment or if he asked for the White Paper and did not find it there.
EARL BUXTON: It is simply this, that I did not hear of it until last
night, I did not mean that it was not there.
THE MARQUESS OF SALISBURY: I am a tiny bit reassured, but I am very sorry the noble Earl had not a copy of it. I made the announcement before a rather full house that copies would be available in the Printed Paper Office on Tuesday evening. I did not verify it myself, but I am informed it was there.
VISCOUNT HALDANE: I got it.
THE MARQUESS OF SALISBURY: Then I am a little bit reassured. But may I say how deeply I sympathise with noble Lords in the difficulty? I deplore as much as anyone the way business is thrown at your Lordships' heads, if I may use so colloquial a phrase. In this case, as I say, my noble friend did his very utmost to produce this White Paper—this is the first time, I think, that this has ever been done—in order to make matters easier for your Lordships, and if it was not produced at an earlier date I do not think that this was his fault or the fault of any noble Lord in this House. Let me add that I shall certainly make it my business to convey to my colleagues the criticisms—may I say the well-founded criticisms?—that have been made upon the way in which this Bill is drafted. I hope this may have effect. It has been suggested to me that we really ought to consider at a very early date the consolidation of this law, and I will promise to convey that opinion also to my right hon. and noble friends. I hope that what I have said will be sufficient to show your Lordships that the Government are not insensible to the criticisms that have been made. We shall do our best to use what influence we possess in order that the thing may not happen in so serious a form on another occasion.
On Question, Whether the word "now" shall stand part of the Motion?—
Their Lordships divided: Contents, 64; Not-Contents, 27.

CONTENTS.

Cave, V. (L. Chancellor.)

Sutherland, D.

Cranbrook, E.

Doncaster, E. (D. Buccleuch and Queensberry.)

Salisbury, M. (L. Privy Seal.)

Bath, M.

Exeter, M.

Eldon, E.

Argyll, D.

Fortescue, E.

Northumberland, D.

Ancaster, E.

Iddesleigh, E.

Lovelace, E.

Annesley, L. (V. Valentia.)

Kintore, L. (E. Kintore.)

Lucan, E. [Teller.]

Askwith, L.

Lamington, L.

Malmesbury, E.

Bledisloe, L.

Lovat, L.

Midleton, E.

Cushendun, L.

Merrivale, L.

Morton, E.

Danesfort, L.

Mereworth, L. (Lord Oranmore and Browne.)

Mount Edgcumbe, E.

Darling, L.

Onslow, E.

Daryngton, L.

Merthyr, L.

Plymouth, E. [Teller.]

Dynevor, L.

Mildmay of Flete, L.

Stanhope, E.

Elphinstone, L.

Monk Bretton, L.

Westmeath, E.

Fairfax of Cameron, L.

O'Hagan, L.

Fairlie, L. (E. Glasgow.)

Ormonde, L. (M. Ormonde.)

Bertie of Thame, V.

Gage, L. (V. Gage.)

Ponsonby, L. (E. Bessborough.)

Chaplin, V.

Hampton, L.

Falmouth, V.

Harris, L.

St. Levan, L.

FitzAlan of Derwent, V.

Howard of Glossop, L.

Teynham, L.

Inchcape, V.

Islington, L.

Tweeddale, L. (M. Tweeddale.)

Peel, V.

Jessel, L.

Ullswater, V.

Kilmaine, L.

Wigan, L. (E. Crawford.)

Wynford, L.

NOT-CONTENTS.

Lincolnshire, M. (L. Great Chamberlain.)

Haldane, V.

Hemphill, L.

Illingworth, L.

Reading, M.

Arnold, L.

Meston, L.

Ashton of Hyde, L.

Muir Mackenzie, L.

Beauchamp, E.

Buckmaster, L.

Rathcreedan, L.

Buxton, E.

Carson, L.

Southwark, L.

De La Warr, E.

Cawley, L.

Stanmore, L. [Teller.]

Russell, E.

Charnwood, L.

Sudley, L. (E. Arran.)

Strafford, E.

Clwyd, L.

Thomson, L.

Denman, L.

Wavertree, L.

Allendale, V. [Teller.]

Resolved in the affirmative, and Amendment disagreed to accordingly.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

AUDIT (LOCAL AUTHORITIES) BILL.
Order of the Day for the Second Reading read.
THE MARQUESS OF SALISBURY: My Lords, this is a Bill which has been rendered necessary by certain scandals in the administration of local affairs with which, of course, your Lordships are very familiar. It applies to all local authorities who are the subject of audit by the public auditors, provided by the system in this country; that is to say, it applies to an local authorities except provincial boroughs, and even to them in respect of education and housing. These local authorities to which the Bill applies have great authority and great power, but they are in a position of trust. They are trustees to administer their affairs according to law. There is only one power in this country which is omnipotent, and that is Parliament. Every other minor authority must administer the law according as Parliament provides it, and I need not say
1036
that these local authorities are not exempt from this obligation.
The matter which we have had to complain of is that in a certain number of cases—not a very large number—local authorities have assumed authority to administer their funds, and the control of the funds entrusted to them, not according to law but according to what they conceive to be the wishes of the localities in which they live. They are bound, of course, to pay the greatest deference to their constituents, but they are not entitled to act contrary to the law. The system which prevails in this country, in order to prevent authorities from spending money illegally, is the system of public auditors, which has been in existence for some hundred years. These public officials are quite independent, and not subject to the control of any political Minister. Their duty, as your Lordships know, is to examine the accounts of local authorities, to see whether the funds over which they have control have been administered legally and accurately, and in the event of their finding that there has been an inaccuracy, or an illegality, to hold those people responsible who actually carried out the payments in this irregular manner. That is the law as it exists. They surcharge those who are responsible.

1037
As I have said, there have been a certain number of local authorities who have deliberately defied what they know to be the law, in order to carry out the policy which they prefer in these matters. I am not going to weary your Lordships this evening with the citation of examples, all the more because everybody is very familiar with them, and especially with the case of Poplar, which has been very much in the public eye and in the public mouth in reference to these particular irregularities. There were several cases of irregularity connected with Poplar. One, for example, was the payment of wages to their servants far above what had been agreed upon by the general body of local authorities in London, who had acted in communication with and with the assent of the local trade unions, whose business it was to represent the trades in this matter. The result was that as the cost of living fell, the Poplar authority was paying wages in the case of men 40 per cent. higher than the approved rates, and in the case of women very nearly 80 per cent. higher.
I do not suppose there is any member of your Lordships' House, wherever he may sit and whatever opinions he possesses, who will not agree that irregularity of the kind I am speaking of must be corrected. The auditors, of course, surcharged the Poplar authorities, and surcharged a certain number of other authorities who acted in a somewhat similar manner. They were perfectly right in so doing. At the present moment there is an appeal, of course, from the decision of the auditors. Appeal is not very satisfactory, and I will explain in a moment the changes which the present Bill suggests, but the question I would like to ask your Lordships is this: What happens when an auditor surcharges a local authority? What happens is by no means effective. These cases to which I am referring, and to which I ventured to apply the term defiance of the law, have reference to very large sums of money, and the only remedy which we possess against a local authority which is the subject of a surcharge of an auditor, is to proceed personally against the members of the local authority who are in default. The only remedy is to distrain upon their goods, if they will not pay. It is no use to distrain upon their goods, because they do not possess effects which are sufficient,
1038
or anything like sufficient, to meet the particular demand upon them. It is quite true that under the law, if the distraint in these particular cases is not sufficient, they may be sent to prison, but your Lordships are aware that that kind of remedy is very unsatisfactory. We do not desire to send people to prison for those reasons, and it does not succeed, because they earn a certain amount of public sympathy and the proper deterrent ends of justice are frustrated. Therefore there is an evident call for some change in the law.
It is for these reasons that I have the honour to ask your Lordships to read this Bill a second time. It is a Bill which deals entirely with details. There is no great principle involved in it. It is designed merely to make more effective the remedies which all must admit are required in order to correct these irregularities. The Bill begins by making a distinction between a surcharge of £500 or over and a surcharge of less than £500 against the members of a recalcitrant authority. In the case where the sum is less than £500, broadly speaking the present system is allowed to continue, but where it is £500 or over then, if the surcharge is made, it involves disqualification of the offending member of the local authority for a period of five years. Observe that that is a much better remedy really than the old remedy of distraint and, possibly, imprisonment. This, disqualification for five years is to make the punishment fit the crime. If a man shows by his acts that he is not willing to obey the law as a public official the proper remedy is to say that he shall not be a public official; that is a thoroughly suitable answer. Moreover, it is not only a suitable answer, but it is a very effective answer. These gentlemen who are tempted to defy the law dread the power which this Bill will give to disqualify them from holding office for a period of years. And therefore, without being at all vindictive, this remedy is an effective remedy.
As I have said, there are not a large number of cases which we have in view. I think, if I am rightly advised, of the few cases of this magnitude which have been the subject of appeal during the last five years, only twelve, so far as the appeals to the Ministry are concerned, and five others, appeals to the High

1039
Court, come within this description of a defiance of the law to which I have alluded. Under the present law the appeal against the auditor's decision lies, at the option of the appellant, either to the Minister or the High Court; but, as we are going to enact, if your Lordships are willing to do so, that a finding against a member of a local authority is to involve disqualification, we think that it would be much better that such a decision on appeal should rest in the High Court, not in a political Minister, who might be the subject of criticism by his political opponents that he had not acted fairly in the matter.
That is the first important distinction which I should like your Lordships to bear in mind. There is another improvement in the matter of appeal. At present, if the appeal lies to the Minister, he has the power, even if he finds that an irregularity has been committed, to dispense with the penalty. But if the appeal goes to the High Court there is no power to dispense with the penalty. It was thought until quite recently that even in that case, even where the High Court found against the appellant, the Minister might intervene and say: "Notwithstanding the fact that you have been condemned by the High Court, yet because you acted, as you thought, reasonably, or because you acted under a misapprehension of what the law really is, I, the Minister, in my discretion will dispense with the consequences." But that turned out not to be the case, and in one of the appeals which were brought—in the case of Poplar—the Court found that the Minister had no such power. Now we propose to deal with all those difficulties, and in every case, whether the appeal is to the Minister or to the High Court—whether, that is to say, the cases are below £500 or above it—we give power to the tribunal, whichever it may be, to dispense with the consequences, to remit the disqualification, to let the man off the sum of money which would be exactable, or diminish the sum of money which would be exactable. A perfectly free hand is given to the tribunal, provided only that they find that the man acted, as he thought, reasonably or under a misapprehension. That is the improvement which this Bill proposes.
Another difficulty arises in the present law. Where an appeal is taken to the
1040
Minister, not to the High Court—as I have pointed out, under the present law the appellant may choose—and where, in the course of the proceedings, the Minister finds that a difficult point of law arises, he has no power to state a case for the decision of the High Court. That is obviously a blemish in the present law, and that also is remedied. The Minister can state a case on a point of law when the matter is being heard before him. Not only may he state a case, but, as is usual in this kind of provisions, if the High Court intervenes—the High Court may move in the matter—and directs him to state a case, he must do so. There is one other little matter in this respect which I should like to mention to your Lordships. I said just now that there had been a mistake on the part of the Ministry of Health in their apprehension of the law. They thought they had power to discharge the liabilities of the appellant where they thought fit even when the appeal had been brought in the High Court. There were certain such cases which took place before the decision in February of this year under which that view turned out to be an error. It is necessary, of course, to deal with those particular cases and there is a special provision in the Bill that in these particular cases, notwithstanding that the Minister was under a mistake, ex post facto it shall be put right and these people shall be relieved.
Lastly, the practice in respect of these appeals is that appeals to the Minister—that is, appeals as they will be in future—in respect of small sums of money are decided without a personal hearing by the appellant. That also is not consonant with our modern view. If a man appeals he ought to be heard. Therefore there is a provision that where he appeals to the Minister he shall always have a personal hearing by some official appointed by the Minister for the purpose. I do not think I need trouble your Lordships with any more detail. There are special provisions, machinery provisions as to costs, which are not the costs of these appeals, with which I need not trouble you. Broadly, I hope I have conveyed to your Lordships the general purpose of the Bill. It is to remedy the lack of power which at present resides in the State to see that local authorities do not misuse their powers by spending the public money contrary to the law.

1041
It has been found in practice that the existing remedies do not carry that into effect, and that even when they are applied it is found that they do not act as a deterrent and that, consequently, contrary to the wishes of Parliament, these irregularities continue.
Though it is a little complicated in explanation it is really a very simple Bill. We apply the penalty of disqualification rather than the other; but we hedge it round with new provisions as to appeal so as to safeguard those who are affected by this new provision from the possibility of injustice. I hope your Lordships will agree with His Majesty's Government that this is a very moderate and very well considered measure, that its provisions are adapted to the particular mischief which they have to meet, and that you will be good enough to give the Bill a Second Reading. I beg to move.
Moved, That the Bill be now read 2a.—(The Marquess of Salisbury.)
LORD ARNOLD: My Lords, the hour is late but this Bill which the noble Marquess has described as a simple Bill and also a well-considered Bill—I am afraid I do not agree with the adjective—is, as a matter of fact, a very important and far-reaching Bill, or may be, in its consequences. Therefore, I do not think I need apologise for occupying a few minutes of your Lordships' time in trying to put before you some considerations which we, on this Bench, have in mind in opposing the Bill. The truth is that this Bill raises questions—and I think I can say this without the slightest incursion into the hyperbolical—of fundamental constitutional importance. It is a Bill which I think I shall be able to show is unfair in some respects and very undemocratic. If I can substantiate those contentions, as I think I can, then it is unfortunate that it has to be considered at such a late hour and under these conditions. However, I will not say any more about that. I am sorry the noble and learned Lord, Lord Carson, has gone because I think we should probably again have been able to welcome a speech from him in this regard had he been here. All I say is, and I think there will be general agreement about this, that in so far as I have represented the position correctly, if there is not much
1042
time or good opportunity to consider this Bill it is not the fault of the Opposition.
The noble Marquess began by saying that many things have happened which he thought were very wrong and that this Bill was necessary. But I should like to make it clear at the outset that this is not the right way of dealing with any matters which ought to be dealt with. Personally, I think there has been a great deal of exaggeration about such matters; but where there are really gross and flagrant cases, or if, indeed, cases of corruption and matters like that are to be considered, they are different and could be dealt with by better methods than these. This is a piecemal kind of legislation of the worst description. Why did not the Government take a broader view? The whole question of the relations between the national Government and local government wants overhauling. This really is only part of the problem. Great financial adjustments are needed and ought to take place as between the Exchequer and the local authorities. Everybody knows that this is so but nothing is done. If something were done to deal with those matters most of the difficulties of which the noble Marquess has spoken would not have arisen.
Then, as regards the district auditors themselves, about whom I shall have something to say in a moment, this is not the way to deal with their functions. Changes are needed in the whole system, including new and much better definitions of their duties and powers. As a matter of fact, this Bill does not really relate in words to the powers of the district auditors, but in effect and in practice it will enormously increase their powers to the detriment, as I hold and as I think I can show, of the good working of our local authorities. Who are these district auditors? They are men, officials, appointed by the Minister of Health. They are not responsible to any public body, so far as I know. They are not under the purview of Parliament. The noble Marquess said a great deal about Parliament being paramount and Parliament being supreme, but I believe I am correct in saying that not even a question can be asked in another place specifically about a district auditor. If that is so, and that is my information, it is a very remarkable state of things. Of course I am not attacking these indi-

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viduals personally at all, but in that public sense surely they are irresponsible persons. Yet they can surcharge simply on their own judgment, and if that is upheld the Bill fixes new and very serious penalties in regard to what may be sincere differences of opinion about such a question, for instance, as a reasonable rate of wage.
The noble Marquess in the very early stage of his speech, and again and again, referred to the law. He said that if persons defy the law and break the law this, that and the other ought to be done. One of the difficulties about these very complex matters is this. Nobody knows exactly what the law is. That is one of the troubles, as I shall show your Lordships. The noble Marquess was really putting the case far too high, if I may say so with respect, from his point of view when he was so emphatic about the law. It was a perfectly single thing, almost like something you can prove. But that is not the position. What does this Bill do? The noble Marquess explained clearly the penalties, but I do not think he quite brought out the difference between the very serious penalties which this Bill may impose on councillors or guardians who are surcharged and the position as it has been hitherto. The noble Marquess says: "Hitherto you can only distrain and cannot get enough money that way, or you can send to prison." Some people prefer to go to prison in a good cause and, therefore, the law, as he suggested, could be defied. But under this Bill an amount for which the member of a local authority is surcharged becomes a civil debt and the man can be made bankrupt. Many local councillors no doubt would be made bankrupt, because as a rule they are not well-to-do people. That is a very serious matter. It is a fundamental change. That is quite apart from the fact that if the surcharge is for £500 a member of a local authority may be disqualified from sitting for five years—that is a long time—and if he has been made bankrupt, which he may have been, and has not been discharged, he might be disqualified for an even longer period.
What does this mean when we come down to its practical effect? I say it makes these district auditors most formidable persons because of this fear of financial liability which may end in bankruptcy. It is not so much that perhaps,
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although I think grave objection can be taken to the actual provisions, as the deterrent effect on the activities of local authorities which this Bill will have. At any rate at the moment I want to emphasise that. These members of local authorities will naturally be very apprehensive in regard to their financial position, because a mistake on their part may land them in bankruptcy. When the noble Marquess says in the last few years there have not been so many cases in which anything serious has happened, that does not cover the effect of this Bill. The effect of this Bill is, if I may use the word, also its potential effect, the effect of terrorism. That may seem a strong word, but it is the best one that comes to my mind. The Bill will act as a kind of campaign of terrorism against certain members of local authorities and they will be held back from doing good things in many cases—good things about which there might be difference of opinion but which cannot be defined as breaking the law. They will be held back from doing those things because of the fear of the provisions of this Bill. I will prove in a moment that that is likely to happen.
The result will be that many good men will refuse to serve on local authorities. This is a very serious point. After all, it is a somewhat thankless task in many respects to serve on local authorities. The work is very hard and often very arduous, and there is no very great inducement. If this kind of thing is going to operate, some men will say: "We certainly are not going to subject ourselves to these fears and possibilities; and whereas we might have served we will not serve." Do your Lordships want that? I am informed that already there are cases of men, desirable representatives on the local authorities of London, who have said that because of this Bill they are not going to stand again; they are not going to expose themselves to these risks and dangers. Do your Lordships want that? It is well known that in some other countries the personnel of the local authorities is not anything like so high as it is in this country. We run a risk under this Bill of distinctly reducing the character and personnel of our local authorities. I think that is a serious matter. Your Lordships will say: "All these things will not happen; this is all exaggeration;

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it is perfectly clear that nothing of this kind will occur." There is no guarantee of that whatever.
The noble Marquess spoke about the law. Let me carry your minds back to the Cockerton judgment, which is a very relevant matter in this connection. Your Lordships will remember that famous case at the very beginning of this century. It was a case which upset everybody's preconceived ideas as to what could be done, but the judgment was upheld in the Court of Appeal and it really led in no small degree to the Education Act of 1902; and that Act had no small effect in causing the downfall of the Conservative Party later on. Therefore, from a seemingly quite trivial cause, very great results follow. What was the Cockerton judgment? I think we ought to remind ourselves, because it is relevant to-night. The Cockerton judgment, in a word or two, was this. It had to do with the definition of elementary education. For years and years, I think it is correct to say, in elementary schools certain subjects had been taught, such as French, German and chemistry. Mr. Cockerton, who was a district auditor, came to the conclusion that those subjects were not really to be brought within the purview of the word "elementary" and, therefore, he said, the law was being broken and he surcharged. His decision was upheld. It did not matter that it was perfectly good expenditure—expenditure which Parliament wanted. As a matter of fact Parliament passed the 1902 Act to make it legal.
THE MARQUESS OF SALISBURY THE MARQUESS OF SALISBURY That was a case tried in the High Court.
LORD ARNOLD: Yes, it went to the Court of Appeal but did not come to your Lordships' House. Just consider the position. This expenditure had been going on, had been sanctioned by the Board of Education through grants; and had been sanctioned in fact by Parliament because money had been voted by Parliament for this education. Could anything be more legitimate and less worthy of the description of illegality and defiance of the law than that? But the expenditure was held to be illegal and men were surcharged. That shows the great uncertainty that exists as to what the law is.
LORD JESSEL: Was anybody punished? Did anybody incur any penalty?
LORD ARNOLD: No, but the point is this. I am glad my noble friend interjected his question because it enables me to make clear what I think is the great mischief of this Bill. In the end nobody was punished. I dare say in the matter of all these things which I am mentioning that in the end no one would actually be punished, but what I am emphasising is the fear of punishment and the suspense of a thing hanging over a member of the local authority for months. Men will not run such risks. I am going to give a case in point which, I think, will make this quite clear. This case, according to my information, is up-to-date. It occurred in one of the local councils of London in the last two or three months.
This is a council which not very long ago set up an incinerator for dealing with dust and refuse. The work of raking all the refuse out of the carts on to the top and pushing it down the hopper, I believe it is called, is extremely dirty, disagreeable and, I am told, in some respects dangerous work. I have been surprised that you can get men to do it at all. The men doing this work have been receiving the munificent remuneration of £3 3s. a week which, having regard to prices in London, is not high. The council thought, not, I admit, unanimously, but by a majority, that this work ought to be paid for by a slightly higher wage and they therefore proposed the very moderate increase of 1s. 6d. a day. If you take the full working week of six days that would have brought the remuneration up to the princely sum of £3 12 s. a week for this extremely objectionable kind of work. What happened? The clerk of the council said: "Oh, but you must be careful, there is the district auditor. Perhaps he will not allow this. If this Bill which is before Parliament is passed you may be surcharged." Actually a deputation from this council went cap in hand to the district auditor to ask him: "Please can we raise the wages of the men doing this kind of work eighteen pence a day?" They asked him whether he would pass it, or whether they would be surcharged if they did it. The district auditor said, No, they could

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not do it; he would not pass it. They said: "Then can we regrade wages?" He said, No, he would not pass that. Therefore, as I understand it, the proposal has been dropped.
Surely, that is a very unsatisfactory state of things. A local authority, duly elected by the people to carry out a policy, and obviously a perfectly reasonable policy, cannot increase the wages of men doing this kind of work eighteen pence a day because the district auditor says he will surcharge them. It makes these district auditors very formidable persons. They become, without exaggeration, little Mussolinis. Men will not stand that. It is no wonder that men are saying they will not become members of local authorities and will not work under those conditions. I do not think any one of your Lordships would stand it. One effect of this measure will be that public authorities will change their policy, not because under this Bill they will be necessarily punished, but because they might be punished and because they will be living in this state of uncertainty.
I could quote to your Lordships other cases showing how in the past very extraordinary decisions have been given by these district auditors, but I do not wish to speak too long. There was the famous decision, I think it was in the case of the Westminster Council, in which the Council did not accept the lowest tender. The district auditor asked: "Why have you not accepted the lowest tender?" They said: "That is no business of yours, we will not tell you." He surcharged them. It was decided that he was wrong, but fancy a district auditor taking up such a position. There was a case under the Elementary Schools (Provision of Meals) Act, in which the district auditor said that fruit and cod liver oil and extract of malt, which were being given to poor children, did not come within the definition in the Act, and I believe it took the whole weight of one of the biggest local authorities in the country to get that man to agree that fruit might be given, although fruit is held by most medical authorities, indeed I think by nearly all medical authorities, to be a form of food. But the London County Council, because of that decision, had to give up giving children cod liver oil. Another case,
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which appeals to me because I have had certain financial experience, is that of a local authority which was surcharged because it paid 1¼ per cent. commission. I admit that that is on the high side, but I do not know the circumstances. It does not strike me as outrageous. District auditors do not all give judgments alike. It depends to a great degree on the individual view of the man.
The noble Marquess says these bodies defy the law, but the difficulty is they do not know what the law is. Look at the position. These councils are elected by the ratepayers. They have been constitutionally elected and certainly in such instances as I have cited they ought not to be put in fear of penalties. If the ratepayers are not satisfied with them they can turn them out at the next election. This Bill is really, so far as local authorities are concerned, hamstringing the constitution. That is why I say it is a Bill which may have far-reaching constitutional consequences. There is sufficient protection in many respects under the existing law, and as I have already said, if the Government will deal with these things in a larger way that is something we should be prepared to consider. Let me take the question of wages. It is on the question of wages, I think, that there have been more differences of opinion and more surcharges than in regard to any other matter, although the functions of the district auditors are not confined to wages. We do not know indeed into what realms district auditors may go before long. But in the matter of what wages should be paid to the employees of local authorities we get at the heart of political controversy. It is part of the policy of those who sit on this Bench, part of the policy of the Labour Party, to try to raise the standard of life of the people and we hold that local authorities should be I do not say extravagant.
THE MARQUESS OF SALISBURY: But these were extravagant.
LORD ARNOLD: If there were cases in which local authorities were clearly and unmistakably paying wages which could not be reasonably defended they could be dealt with. We want to raise the standard of living of the people and we want to pay good wages. I do not say

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extravagant wages, but good wages. Can you say in the case of these men working at the incinerator doing that horrible work, that there was anything extravagant in wanting to raise their wages from £3 3S. to £3 12 s.? There is nothing extravagant about that, but because the district auditor said the council cannot do it and that they will be surcharged it cannot be done. That is my reply to the noble Marquess.
The position is serious because of this change which is being made—I always speak with great diffidence regarding legal matters because I am not a lawyer—by what I suppose is called case law. A case was heard and came to your Lordships' House in 1925. It had been thought that councils could pay such wages as they thought fit, but it was decided in that case, as I understand it, that that was not really the correct view—that it was really the district auditor who had to decide whether the wages were what he thought reasonable. If that is the correct view of the judgment it clearly makes a material difference. It gives enormous power to these district auditors. Take, for instance, the question of the Burnham scale. There are people who hold that the Burnham scale is too generous. I do not hold that view myself, but that view is taken. I do not say this will happen but I put it forward as an illustration. There is nothing to prevent people, in view of the Cockerton judgment, saying that they think this is too much, that salaries ought not to be paid on that scale and appealing to the Courts. It may be said that that will not happen, but it is all very upsetting. You may have cases where that will happen. The Burnham scale will be defended, no doubt, because it was arrived at after careful inquiry and it is likely to be upheld, but there are other things which would not be upheld.
My summing up of the matter is that the effect of this Bill will be to stop the carrying out in many cases of the proper and legitimate policy of the Party to which I belong. That will be the effect on them because of this fear of the consequences. I say that is not right. If people work hard and get a majority they should not be exposed to a state of things in which they will have no appeal. I will quote something from the Minister of Health. The noble Marquess
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has spoken about the Minister of Health and has said you can appeal to him. The Minister of Health said Socialists were determined to use local government to advance their theories, and it was his duty to frustrate them. This Bill, in my view, is part of that process of frustration, and there have been other methods of the same kind. I do say, though I do not wish to use any strong language, that we do not think this a fair or a right form of legislation, and I am strongly of opinion, if I may be permitted to roam into the realms of phantasy, that if we should ever have a Labour Government in power in your Lordships' House, and if we introduced an equivalent Bill regarding something affecting vested interests, your Lordships would have something to say of a strong character about a measure of that kind.
My last point has to do with expenditure on education. This is a very important part of local expenditure. The noble Marquess said that this Bill applied to all local authorities except provincial boroughs, but even there I think he said that it applied to education. Take the case of a surcharge in respect of education expenditure of one kind or another. There might be, for instance, a dispute about wages, not necessarily under the Burnham scale but the wages of cleaners, or if certain local authorities lent their schools for political meetings the auditor might say that they must not do so but must charge for the use of the school. If the council refused to do that, difficulty might arise. If the amount of the surcharge is under £500, the appeal, at the option of those surcharged, is to the Minister of Health or to the Court. But, supposing they chose to appeal to the Minister of Health, what does the Minister of Health know about education expenditure? It is no business of his. He has nothing to do with it.
I suggest to your Lordships that here is a possible Amendment, entirely non-controversial, which would improve the Bill, which is helpful and, indeed, necessary to make it a proper Bill. I suggest that in Clause 2, in regard to a matter which comes under the Bill in respect of some surcharge for education expenditure of one kind or another, the appeal, if under £500, should at the option of those surcharged be, not to the Minister of Health, but to the Minister of Education. I should like to ask the noble

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Marquess whether that point has been considered. He may say that the Minister of Health would confer with the Minister of Education and that it would come to the same thing in the end, but I do not think that this is a satisfactory way of doing business. I feel that appeal ought to be to the Minister of Education, and I cannot see any harm in such an Amendment. It would make the Bill more businesslike and I suggest that such an Amendment, which I will put down for the Committee stage, should be acceded to. I hope this request will be considered by the Government, because I think it is eminently reasonable. I can see no objection to it but considerable advantage in it.
I am sorry to have spoken so long. There is a great deal more that I should have liked to say on this important subject, but I will not occupy the time of the House further, particularly as I understand that my noble friend Lord Jessel wishes to speak. We say that this is not a reform Bill, that it is a reactionary measure, that it does not go the right way about things and that it is a punitive Bill. If the hour were not so late and we had not already had a Division recently we should feel it our duty to press this Bill to a vote, but in the circumstances we shall spare your Lordships that trouble. I should like to make it clear, however, that this does not in any way compromise our opinion of the gravity and, indeed—though I do not wish to use strong language—of the iniquity of this Bill. I hope that it will be rejected, but I am afraid that it will not.
LORD JESSEL: My Lords, I shall be very brief in my remarks, because of the lateness of the hour. I was not surprised at the speech of the noble Lord opposite, but I congratulate him on having been much more moderate than usual and having made several good points against this Bill from the point of view of his own Party. I had the pleasure of serving with the noble Lord for a good many years on the Public Accounts Committee in the House of Commons. There was an official there, whom we all respected, called the Controller and Auditor-General, and his functions are very much the same as those of these local auditors. The noble Lord asks to whom these local auditors are responsible, since they are not responsible to the
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Minister of Health. It is a very good thing that they are not so responsible. They are independent gentlemen of position, who are in no fear of the Minister of Health, who are independent in their views and are not prejudiced by any Party feeling. I suppose they must be removable by somebody, and I presume that, in the same way as Parliament has the right to remove the Controller and Auditor-General, if there is any case of misfeasance on their part Parliament could do the same with the local auditors.
I should like to take one very important point that the noble Lord made. He complained regarding the action of a particular borough council about the wages of certain men employed in a rather distasteful employment. It is very difficult to judge of these cases unless one knows all the details thoroughly, but it did not strike me that these men were getting very bad wages if they received £3 12 s. a week, for many skilled artisans right through the country would be very glad of wages like that. One of the cries of the present day is that the men in the sheltered trades in this country are getting very high wages compared with those in the unsheltered trades; and we know that it is upon the work done in the unsheltered trades that much of the prosperity of the country depends. Let us look into this question of wages. There is in London an industrial council which meets to fix by mutual arrangement what the various wages should be in London, and I believe the auditor allows 10 per cent. over the fixed rate if it is necessary in particular boroughs owing to particular circumstances. The noble Lord cannot judge, any more than I can, without hearing the facts of the case, whether these men were properly treated or not.
Let me add that, as regards the auditors, it is quite easy to ask them questions. I have myself known cases in local government where it has been necessary to go to the local auditor and ask whether a certain arrangement would be allowed or not. He has the knowledge, and in any case you can always go to the Ministry of Health and appeal to them. Accordingly there is no real reason why any person should fear to go upon a local authority because he may be surcharged. I have had a good deal of experience in London and I have never known anybody to be deterred

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from standing for a local authority on account of that fear. It is rather unfortunate that the noble Lord's friends should be deterred, but I do not know why there should be any difficulty or what is their reason. After all, I am sure the noble Lord, who knows accounts pretty well and is a very good business man, though he told us that he was not a lawyer, must know that, when one authority is paying men 10 per cent. over the ordinary wages and in another place 78 per cent. more is being paid, this is not fair either to the mass of the population in the district or to the rest of London. In London our rates up to about 90 per cent. are centralised. Money comes from the richer boroughs, who are very glad to give it because it is the duty of the richer boroughs to help the poorer boroughs, though they have no control over this money. Surely, when the industrial council fixes a rate, no single borough in London has the right to exceed it to such an extent as has been mentioned by the Leader of the House.
I am not going into the Cockerton judgment, which the noble Lord said was partly the cause of the fall of the Conservative Government of the day. Perhaps he is hoping that, through the instrumentality of this Bill, the same fate will attend the present Government, and that we shall see the noble Lord and his colleagues sitting on these Benches. If so he may be congratulated on the fact that this Bill has been introduced by the Government of the day. There is a real need for this Bill and I do not think anybody need be deterred from standing for a local authority by reason of its introduction. I think, too, that great improvement has been made in the Bill since it was introduced in the House of Commons, because when it was introduced there was no right of appeal to the Courts in respect of any less sum than £500. That has been taken out, and everybody is given a right of appeal to the Courts.
The noble Lord quoted the Westminster case. I was one of those who, metaphorically, stood in the dock in that case. It was a simple case. There was a contract for gravel and we did not accept the lowest tender because we were not quite so certain as to the ability of the contractor to carry out his tender. We acted on the advice received from our
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experts. We did not wish to appeal to the Minister, and we preferred to go to the Courts. We went to the Courts and got justice there, and that is the reason that I am glad that the Government changed their minds and made the Courts open to everybody, whether in respect of £500 or a smaller sum. I think the Bill is not going to have the far-reaching effect which the noble Lord supposes, because statistics show that there have been very few of these cases coming before the Minister, or before the Courts. In these extreme cases, however, you must have some power, and this Bill only gives that power. As the noble Marquess the Leader of the House said, it was discovered this year that there was a great flaw in the procedure, that if a man was condemned by the Courts through no fault of his own there was no power for the Minister to remit the penalty. Therefore I am glad that this Bill has been introduced. I do not think it is a matter of great controversy and I congratulate the Government on having found time to pass it through the House of Commons. I hope it will be read a second time to-night.
THE MARQUESS OF SALISBURY: My Lords, I do not intend to trouble your Lordships at length, but I should like to thank my noble friend Lord Jessel for his very valuable speech. He speaks with much greater practical knowledge of the subject than I do, and I am sure your Lordships heard what he had to say with great satisfaction. It relieves me also from the obligation to deal with the incinerator case. My noble friend pointed out that in London wages are a matter of agreement—of broad agreement between the workers and the local authorities—and in the particular case of Poplar, to which I referred, the local authority insisted upon giving much higher wages than were permitted by that agreement. Nobody can defend that, and I am sure that the noble Lord, Lord Arnold, did not attempt to defend Poplar. It therefore proved our case.
Let me say one word about what the noble Lord said as to local auditors. These district auditors are independent. If they were persistently unreasonable they would be subject to ordinary disciplinary action, but they are, and ought to be, independent. If they make a mistake they are, as I have said, subject to appeal, but I would like to point this

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out to the noble Lord. For eighty years, during which appeals have been taken from the district auditors to the High Court, the High Court has never found it necessary to impose costs against a district auditor for having acted unreasonably. Even if they were wrong, on which I do not say anything, yet they have been so little wrong that during eighty years no Court of Justice has imposed costs against them. I think that is a test of their impartiality which the noble Lord ought to value. The fact that they are subject to appeal does protect the subject against any injustice, and is the very foundation upon which everything depends in this country. Then the noble Lord said that this Bill was going to be a great deterrent of good public servants from serving on the local authorities, and he quoted a very famous case. My memory does not go back far enough to remember how that case originated, whether in the High Court or before the Minister, but if it originated in the High Court—
LORD ARNOLD: It went to the High Court.
THE MARQUESS OF SALISBURY: Then it is precisely cases of that kind which this Bill will remedy, and the noble Lord did not see that, because under this Bill, where a local public servant does not act unreasonably or acts under misapprehension, there is power, even when the action is condemned by the High Court, to remit the penalty. That has not been so up to now, and that is no doubt the very case which the noble Lord has in mind in the particular famous case which he quoted. If the new Bill, which I am asking your Lordships to read a second time, had been the law then, it would have been possible to remit all the penalties.
VISCOUNT HALDANE: The noble Marquess has forgotten the Cockerton case. The objection to Cockerton was that he decided a great question of law and principle, and it took not only litigation but a great Bill on the part of the Conservative Government to put it right.
THE MARQUESS OF SALISBURY: The broad fact remains that, under this Bill, so long as a local official does not act unreasonably, or even if he acts under a misapprehension, then there is power,
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which never existed before, for the High Court to remit, if it thinks fit, all the penalties.
LORD ARNOLD: That is the uncertainty.
THE MARQUESS OF SALISBURY: Yes, but observe that up to now there has been no power to cure, and yet the noble Lord gives us no credit for this improvement in the law. I venture to think that my noble friend and myself have established that this amendment to the law will be in the interests of justice, and also in the interests of good government, and I confidently ask your Lordships to read the Bill a second time.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

PUBLIC WORKS LOANS (No. 2) BILL.
House in Committee (according to Order): Bill reported without amendment.

DESTRUCTIVE INSECTS AND PESTS BILL.
Order of the Day for the Second Reading read.
THE PARLIAMENTARY SECRETARY OF THE MINISTRY OF AGRICULTURE AND FISHERIES (LORD BLEDISLOE): My Lords, I beg to move the Second Reading of this Bill. It is a small Bill, it is wholly uncontroversial, but it is not unimportant to the agricultural and horticultural community. It has passed the House of Commons without any criticism. One of the most serious sources of loss with which farmers and gardeners have to contend is the toll which is levied to an ever-increasing extent by insects and pests upon their crops. It is estimated that they cost the agricultural community annually something like £12,000,00—considerably more than is caused, for instance, by such diseases as foot-and-mouth disease and diseases about which we in Parliament speak and hear much more than we do of insects and pests.
Under the existing Statutes relating to destructive insects and pests—namely, the Act of 1877 and the Act of 1907—the Minister of Agriculture may require local authorities to carry out orders issued

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under those Acts for the prevention of the introduction and the spread of destructive insects and pests, and may order them to pay compensation for any crops destroyed under such an order. But the system of administration by local authorities has not been a success, and mainly it has failed because where you have one county running into another it is quite easy for the spores of a post such as American gooseberry mildew to pass over the county boundary, and one county authority may be keen and eager and active to work under the Acts, and another may be indolent and slack in the matter, and the pest consequently tends to spread. As a result of that, in 1914 the Department of Agriculture took over the administration of these Acts, and worked them through their own inspectors. But the appearance of any new and dangerous pests—and the word "pest" includes fungoid diseases, and a good many of those rather inscrutable diseases which are due to what is sometimes described as an ultra-microscopic and filterable virus such as mosaic disease—would necessitate very urgent and drastic action if they are to be suppressed.
This action may involve the destruction of crops by the officers of the Ministry of Agriculture, but at the present time the Minister has no power to pay compensation for such destruction. Such compensation is payable by local authorities, but only if they agree to pay. The Government Department has, however, no power to pay. This Bill accordingly provides that an inspector of the Ministry may by order be empowered to remove or destroy any crop infected with what I may call a non-indigenous insect, or any crop to which such insect is likely to spread, and to enter upon any lands and take any necessary steps in connection with any crop for preventing the spread of any such insect. I may incidentally say perhaps—there is a rather humorous element about it—that an insect is defined as including not merely bacteria but vegetable microorganisms and these various viruses of which we hear so much at present. It includes, therefore, every sort of pest, whether of animal or vegetable origin, which is calculated to cause disease to our economic plants in this country.
By subsection (2)—it is only a one-clause Bill—the Minister may pay compensation
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for any crop so removed or destroyed. It is hoped that the need for the exercise of these powers and the consequent payment of compensation will not often arise, but in any case there is a safeguard in the Bill against any undue expenditure under this head, the total expenditure being limited to £2,000 in any one year, unless the Treasury consents to any larger expenditure. We hope and believe that this provision will enable us to deal drastically with any pest coming into this country from other countries immediately upon its arrival. Subsection (1) (c) provides that an order under the Acts may impose a maximum penalty for a second or subsequent offence of £50. The maximum penalty previously under the old Act was no more than £10, and it is noticeable that in the case of wart disease in potatoes, which is a very serious disease, for which no cure has yet been discovered, it is well worth while for a dealer in potatoes to disobey the order and risk the penalty of £10. That penalty in such a case would not be a sufficient deterrent if a grower or dealer thought it worth while to ignore the order.
Subsection (3) provides that proceedings for an offence against the order may in the case of an offence in connection with the movement, sale, consignment or planting of potatoes, be instituted within twelve months from the date of the alleged offence. The existing law necessitates the proceedings being brought within six months, but it may take some time to detect some of these modern diseases, and it is thought not unreasonable to ask that the period should be extended to twelve months. Subsection (4) amends the previous Acts by removing the limitation on compensation. The compensation was limited under the original Act, which was not altered by the subsequent Act, to three-quarters of the value of the produce destroyed, and, if the produce was actually infected with a destructive insect or pest, to one-half only. It is thought only fair, as these Acts cover cases where a plant may be the carrier of disease, that the full market value of the crop should be recovered by way of compensation.
Subsection (5) is important. It enables the Minister to deal with bacteria and virus diseases, and it is proposed to do that by the extension of the definition of "insect." Perhaps I

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may indicate why it is particularly important at the present time that this extension of the definition should be allowed—because one of the most serious diseases in this country to-day is what is called the mosaic disease, a serious disease which is very prevalent in North America, and affects a very large number of economic plants in this country, particularly potatoes and tomatoes (which of course are allied to potatoes); others are leaf-roll in potatoes and reversion in black currants. I suppose there has been more loss from reversion and its allied trouble, the black currant mite, in respect of black currants than from any other fruit disease that we have known in recent years. This Bill applies to Scotland, but not to Northern Ireland, because this would be regarded under the Government of Ireland Act as a non-reserved service in respect of which the North of Ireland Parliament can itself legislate. I have only to add that this Bill has been approved by the Horticultural Advisory Council of the Ministry of Agriculture, upon which all branches of the industry are represented, and I therefore ask your Lordships to be good enough to allow this Bill to be read a second time. I beg to move.
Moved, That the Bill be now read 2a.—(Lord Bledisloe.)
LORD BUCKMASTER: My Lords, I wish to thank the noble Lord for his clear exposition of the Bill and to express my regret that the Bill was not introduced at an earlier stage of our proceedings when it would have been possible for us to have heard in greater detail the very valuable and interesting information which the noble Lord possesses upon this topic. My purpose is not to make any criticism upon the Bill, but I desire to ask a question and to make a request. Everyone knows that among the insect pests that are destructive of crops the wire-worm is one of the most effective. Indeed, in the course of this year a Bill has been introduced to amend the Poisons Act in order that poisons might be spread for the destruction of the wire-worm. In February of this year your Lordships passed without a Division a Bill for the protection of plovers who live almost exclusively upon wire-worms. If you desire to fight the evils of nature you can never do it more
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effectively than by using the weapons which nature herself provides. The question I want to ask is why a Government who profess themselves to be so interested in agriculture have declined to give the faintest chance of success to that Bill in another place when it could by no conceivable possibility have taken more than a few hours for its fullest consideration.
I have been, I still am, most anxious to credit the Government with the sincerity of their good intentions; but it seems impossible to comprehend why such a Bill could not have had an opportunity in another place. The very thing that the noble Lord himself referred to with regard to the Bill that is now before us applies equally there. It is of no use having local protection of a bird like the plover; you must have it universally or it is useless. Therefore it is of no effective use to leave it in the power of the local councils, and in the same way as this Bill appears to put the whole protection in the hands of the Government, which they ought to have, so does the Lapwings Bill protect the plover universally throughout the kingdom. That is the question I ask. I might add I am not quite sure that I expect an answer. I do not suppose the noble Lord will be able to give it. As he will not be able to give it and as I will try not to be unpleasant if he refuses, may that give some added strength to the request I wish to make. I wish to ask the noble Lord and the noble Marquess the Leader of the House whether they will represent to the Government in strong terms that a Bill such as the Lapwings Bill, which was passed with the support and at the request of the agricultural societies of this kingdom, should, when it has once been through this House without a Division as an unopposed Bill, and once through this House without a Division as a section in a Government Bill, have some chance of success next Session when I will promise that I will introduce it at the very earliest time possible.
THE MARQUESS OF SALISBURY: My Lords, I certainly engage to convey the noble and learned Lord's wishes to my colleagues. He probably knows the situation in another place better than I do in regard to this Bill. The noble and learned Lord said quite truly that the

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Bill passed your Lordships' House with general assent. Very few Bills pass the House of Commons with general assent, and I should think, although I have not had an opportunity of obtaining any accurate information, that it probably will be found that objection was felt in certain quarters in another place to the Bill. If that was the case, of course the Government have to economise the very little time that is at their command, and I imagine that what happened was that when the Bill was threatened with opposition it was necessary that it should not interfere with other more important measures. I quite understand the noble and learned Lord's interest in this matter. I sympathise with him and I shall certainly take an early opportunity of mentioning the matter to those who are in power in another place.
LORD BUCKMASTER: Strengthened, I sincerely trust, by the noble Marquess's own support.
LORD BLEDISLOE: My Lords, may I be allowed to add that, speaking unofficially for the moment and speaking on behalf of my Department in a general way, we fully accept the proposition which the noble and learned Lord put forward, that it is very undesirable to destroy the birds which take part in destroying destructive insects. Speaking for myself, I am a warm supporter of the noble and learned Lord in respect of his own Bill. But I should like to mention this. As
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regards the wire-worm, of course we all know that the wire-worm has been particularly prevalent since the War owing to the turning over of old pastures. It is a serious pest at the present time; but the noble and learned Lord will realise that wire-worms are not affected by this Bill.
LORD BUCKMASTER: No.
LORD BLEDISLOE: The Bill refers only to imported pests. Unfortunately, the wire-worm is an indigenous pest and a very destructive and rampant indigenous pest in this country.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

WALLASEY CORPORATION BILL. [H.L.]
Returned from the Commons, agreed to, with Amendments.

BUSINESS OF THE HOUSE.
THE MARQUESS OF SALISBURY: On the Motion for the adjournment I desire to call your Lordships' attention to the fact that we are asking your Lordships to meet at eleven o'clock to-morrow morning.
House adjourned at a quarter past eight o'clock till eleven o'clock to-morrow.