HL Deb 05 June 1934 vol 92 cc801-44

Order of the Day for the Second Reading read.


My Lords, in submitting for your consideration the Unemployment Bill which, notwithstanding its title, deals with the unemployed rather than with unemployment, I may perhaps be permitted to remind you that this is the fifth Bill dealing with social insurance which it has fallen to my lot to introduce into your Lordships' House. The last occasion was almost a year ago, to be exact on June 26, 1933, when I sought your Lordships' assent to the Unemployment Insurance (Expiring Enactments) Bill. It will be within your Lordships' recollection that I then explained that that Bill was a temporary measure necessitated by the imminent expiry of certain provisions in the existing schemes of unemployment insurance and transitional payments, and that it was merely intended to enable the provisions made by those schemes to be continued "pending the presentation by the Government of proposals for a comprehensive amendment of all the requirements for assisting the unemployed." The present Bill, containing as it does sixty-four clauses and nine schedules, is the comprehensive measure to which I then referred.

I might also remind your Lordships that I took the opportunity of saying on that occasion that, while I was not in a position then to communicate to your Lordships any actual details of the proposed comprehensive measure, I could indicate to your Lordships some idea of the Government's view as to one or two aspects of the matter. I mentioned in particular the necessity of putting the contractual insurance scheme upon a thoroughly sound financial basis and the importance of maintaining the principle that those persons who are not entiled to contractual insurance benefit should receive assistance according to their need. I pointed out how desirable it was to do everything practicable to maintain the employability of persons long unemployed and for that purpose to continue and to develop suitable measures of training and reconditioning; and I said a vital part of the Government's policy was to consider carefully whether some satisfactory arrangements could be made to deal with boys and girls who, upon leaving school, failed to secure employment. I think that before your Lordships have completed your consideration of the present Bill you will agree that no one of these points has been overlooked.

But I would go further. I am not commending this Bill to your Lordships merely as a measure designed to fulfil promises made with regard to the questions to which I have just alluded; for this Bill, in addition to other advantages, has received exhaustive examination and valuable criticism during some twenty-eight clays of discussion in another place. Further, as your Lordships are aware, the introduction of the annual Budget has enabled us to take stock of cur financial position. As the result of these two occurrences the Bill has been considerably altered and improved during its passage through the other House. I claim that it now represents one of the most comprehensive and carefully-thoughtout pieces of social legislation ever introduced by any Government and will result in Great Britain providing more generously for her unemployed than any other country in the world. In my judgment this Bill promises to be one of the most considerable achievements in the not inconsiderable record of the National Government up to the present time. Speaking as one who was a director of one of the large insurance companies of this country, before resigning upon joining the Government, I say without fear of contradiction, no insurance company, even if it eliminated profit altogether, could offer terms of insurance against unemployment in any way comparable with those afforded by Part I of this Bill.

Your Lordships will observe that the Bill is divided into two main Parts. The first of those bears the heading "Amendment of Unemployment Insurance Acts." The second is entitled "Unemployment Assistance." Part I deals with insurance pure and simple and provides for unemployed benefit to be drawn in full as a matter of right by unemployed insured workpeople. Part II, on the other hand, deals with the assistance of unemployed workpeople who are outside the scheme of insurance altogether, or for any other reason are not entitled for the time being to draw unemployment benefit. It also deals with supplementary assistance when required for persons drawing insurance benefit. In other words, Part II deals with all need arising out of unemployment not covered by Part I. I am sure your Lordships will concede that the elements of effective insurance are of necessity restricted by the amount of the contributions which can reasonably be collected. Outside this element the funds required for assisting the unemployed must be provided by the taxpayers alone. Part I of the Bill makes the terms of insurance much more generous. It doubles the maximum duration of benefit for those with good contribution records and thereby modifies one of the disadvantages inseparable from mass insurance. It wipes out the present gap between the school-leaving age and the beginning of the insurance age, and it makes provision for keeping or making the unemployed industrially fit.

Permit me to remind your Lordships that national unemployment insurance was first introduced by the Act of 1911, for which my noble friend Earl Buxton, when he was at the Board of Trade, was one of those primarily responsible. He was in the position in which I find myself tonight, when, on the 24th of May, 1911, just over twenty-three years ago, he moved the Second Reading of that first Insurance Bill. He was fortunate enough to secure the Second Reading without a Division. I hope history will repeat itself. On the 6th December, 1911, the Third Reading was challenged, and I think I am correct in saying that there were two Divisions, one on the question that the word "now" stand part, and the other on the formal Third Reading. Twenty-three years ago I was in the House of Commons and I had the privilege of supporting my noble friend in the Division Lobby on that occasion. I should like to recall the fact that that Division was on non-Party lines. When preparing this speech at home on Saturday last I looked up the Division List and I found that my noble friend the Marquess of Londonderry supported the noble Earl, that the Attorney-General as he then was, the noble and learned Marquess, Lord Reading, spoke and voted for the Bill, that the present Leader of the Opposition in your Lordships' House, Lord Ponsonby, voted with him, and so did the present Prime Minister. Under that scheme, which has proved of such incalculable value to the country, the first benefit became payable at the beginning of 1913. We have thus had over twenty years experience. It is a little unfortunate that this new Bill that I am submitting to your Lordships tonight has to take the form of an amending Bill. I may say, however, in passing, that it is the Government's intention as soon as possible to present to Parliament a consolidating Bill which will make the study of the unemployment insurance scheme a far less troublesome matter in the future.

Turning now to the chief provisions of this Bill, the first subject I would mention is one which will he as welcome to your Lordships as it is to the beneficiaries under the Bill. I refer to the provisions as to rates of benefit. It will be within your Lordships' recollection that in the autmun of 1931, when this country was faced with a grave financial crisis which necessitated sacrifices on the part of all classes of the community, the decision was reluctantly taken to reduce the rates of benefit. Your Lordships will have listened to or read with gratification the statement of my right honourable friend the Chancellor of the Exchequer when introducing ths year's Budget. The present Bill carries out the undertaking then given and as from the 1st July next restores the rates of benefit to the rates which were in force immediately before the coming into operation of the Unemployment Insurance National Economy Order, 1931. Your Lordships will be aware that the amount of benefit for dependent children—2s. for each child—was not affected by the reduction of benefit rates in 1931. The allowance for children is therefore not affected by the restoration of the rates to their former level. It would, however, he a mistake to assume that the question of increasing the rate of the children's allowance is closed. It will be the duty of the Unemployment Insurance Statutory Committee to advise the Minister upon the use to be made of the surplus in the Unemployment Fund which it is reasonable to anticipate, and your Lordships may be assured that the possibility of an increase in the rate of the children's allowance will be considered very carefully by the Committee together with other objects to which a surplus might be applied.

Next in order is a provision dealing with the period of benefit. It has been felt that something more ought to be done for the worker with a good employment record. Accordingly the Bill provides that such a worker shall be entitled to draw additional days of benefit in excess of the present maximum of 156 days in a year—that is, 26 weeks of six days. The number of such additional days of benefit will depend on the number of contributions he has paid and the amount of benefit he has drawn over the preceding five years, and a worker who has been in regular employment and has drawn no benefit for five years will be entitled to 156 additional days of benefit. In other words, he will be in a position to draw benefit during twelve months of unemployment. This, I think your Lordships will agree, is a move in the right direction. We are dealing here not with granting assistance in accordance with his need to a worker who has not contributed to such assistance, but with a scheme of contributory unemployment insurance with benefits as of right. The Government take the view that, while there should be as generous a minimum as circumstances permit, there should be a special concession to workers who have good employment records.

I do not want to suggest for one moment that the ground of differentiation is based upon any comparison of moral worth. Everybody knows the circumstances of the labour market to-day, and it may be taken as a general axiom that a man will gladly accept as much employment as he can get. In cases where some have better employment records than others, this is to be attributed not simply to a difference in the degree of willingness to accept work or of intensity in the search for work, but much more to circumstances outside the control of the individual worker. Nevertheless it is regarded as reasonable and in accordance with the insurance principle that the worker who has in fact had the longer spell of employment and has thereby not only paid more directly into the Fund but has also drawn less out of the Fund, should be entitled to something above the minimum if he should be unfortunate enough to lose his employment and to be bound to rely on the benefit for which he has been paying.

I now come to another subject which has been very much in the minds of all who have had to do with unemployment insurance in recent years; I refer to the financial provisions. I must draw attention to the growth of borrowing since the year 1921, a process that continued until in July, 1931, the Unemployment Insurance (No. 2) Act, of that year raised the maximum to £115,000,000. It was in the course of a speech recommending that measure to the House of Commons that the Minister of Labour in the Labour Government observed that "borrowing when you know that you have no opportunity to repay is a dishonest course." The present Bill, as I will explain in a moment, provides the "opportunity to repay." We are all agreed, I think, that the unemployment insurance scheme should be solvent and self-supporting. That position will have been reached when the present provisions have been amended as suggested in the Bill. Let me outline the proposals under this head. With the object of providing machinery for securing the continued solvency of the scheme the Bill sets up an Unemployment Insurance Statutory Committee. This Committee is to examine the financial condition of the scheme immediately after the close of each calendar year and within two months to make a report to the Minister of Labour on the financial condition of the Unemployment Fund. The Committee are also to make a report at any other time if they consider that the Fund is, or is likely to become, insufficient to discharge its liabilities. Apart from these duties of financial supervision the Committee will have a general duty of advising the Minister of Labour upon any matter connected with unemployment insurance which he may refer to them. If the Committee at any time report that there is an existing or a prospective deficiency, or that there is, and is likely to continue to be, a surplus to a greater extent than is required for working purposes, their report must contain recommendations for such amendment of the Acts as will have the effect of restoring the balance of income and expenditure.

The matters on which the Committee may recommend amendments cover a very wide range and include rates of contributions, rates and conditions of benefit and the duration of benefit. Their report must give an estimate of the effect which the amendments they propose will have on the financial condition of the Unemployment Fund. The Minister of Labour will, he under an obligation to lay the Committee's report before Parliament together with the draft of an Order making either the amendments recommended by the Committee or other amendments having substantially the same financial effect. In the latter case he must give reasons for not adopting the recommendations of the Committee. The report, together with the draft Order, will he considered by both Houses of Parliament and, if both Houses pass Resolutions approving the proposed amendments, an Order must be made in the terms of the draft and will thereupon become law.

The borrowing powers of the Fund which are at present in suspense are to be definitely repealed. If the Fund is unable to meet its immediate liabilities, temporary loans will be made by the Exchequer. If these cannot be repaid out of the ordinary revenue of the Fund within a limited period, the machinery which I have just described will be set in motion to restore the solvency of the Fund and to provide for the repayment of the loans out of the Fund. So much for the future. There remains the debt, which, at the present time, is approximately £105,000,000. The Bill provides for the amortisation of the debt outstanding when the Bill comes into force by means of instalments of fixed amounts paid out of the Unemployment Fund to cover principal and interest, generally at the rate of 3⅛per cent. per annum. The Bill places the finances of the Unemployment Fund upon a sound actuarial basis, with the necessary provision for the amortisation of the debt, a burden which, in the Government's view, should not be transferred to the general taxpayer. I have gone into some detail on this matter because I am sure your Lordships will agree it is one of the first importance. The trouble in the past has been that Governments have been unwilling to face the facts. The Royal Commission called attention to the way in which the principles of insurance had been sacrificed to political expediency, the risk of unemployment had been repeatedly under-valued and rates of benefit had been increased, classes of dependants extended and conditions for benefit relaxed, regardless of their effect upon the solvency of a Fund which was already in debt.

I come now to another subject which I mentioned to your Lordships in June of last year as being amongst those with which the Government proposed to deal, that is, the Question of juveniles. At the present time the minimum age for entry into unemployment insurance is sixteen. The school-leaving age is normally fourteen or a little over. Your Lordships will be aware of the serious disadvantages resulting from this position. There is at present no means of ensuring that children leaving school are kept in touch with and given that advice and assistance in connection with their industrial future which are so desirable if their working lives are to proceed upon satisfactory lines. Under the Bill, unemployment insurance will begin at the school-leaving age. In the case of a juvenile above the school-leaving age and under sixteen, employed in an insured trade, a weekly unemployment insurance contribution of twopence each is to be paid by the juvenile, his employer and the Exchequer. Provision is made by which juveniles under sixteen who continue in whole-time education voluntarily, for at least a year, may receive a free credit of contributions. Unemployment benefit is to become payable at the age of sixteen, whereas at present it is not payable at the earliest till the age of rather more than sixteen and a half—until thirty contributions after sixteen. Dependants' benefit in respect of juveniles between the ages of fourteen and sixteen will he payable to parents entitled to benefit, not only as at present whenever the child is receiving full-time instruction at a day school, but also whenever he is unemployed for reasons outside his control. The Bill gives power to require employers to notify the discharge from their employment of boys and girls under the age of eighteen.

Next I will refer to a part of the Bill in which your Lordships have already displayed special interest—namely, the provision of instruction for unemployed boys and girls. The Bill contains special provisions imposing upon education authorities the duty of providing such courses of instruction as may be necessary and gives the Minister power to require the attendance at these courses of all unemployed juveniles over the school-leaving age and under eighteen, unless there is some good reason against it. The country has been disturbed at the evil effects of unemployment on boys and girls, and the object of these courses is to counteract the demoralising effects of unemployment and to keep the boys and girls fit in mind and body to resume work. I think we can claim that these provisions represent a great advance in the provision made by the State for dealing with the problems of juvenile employment and unemployment.

Let me now say a word about agriculture in relation to unemployment insurance. Agriculture is not at the moment to be included in the scope of Part I of the Bill, but it is a matter to which the Statutory Committee will direct their consideration and make recommendations. I have no doubt that many of your Lordships have definite views upon this question. Whatever view may be held, I am sure it will be a-greed on all hands that there is more unemployment amongst agricultural labourers than used to be the case and that very often the wages of these employees when in employment are such that it is practically impossible for them to make provision for a rainy day. At the same time there are undoubtedly great difficulties in the way of applying the existing unemployment insurance scheme to agriculture. The Government feel that the proper thing is to have this question thrashed out in the first instance before the body referred to, which will be in a position to hear evidence and to make any inquiries which appear necessary.

Perhaps the only other specific provision to which I need draw your Lordships' attention is that relating to the duties of the Unemployment Insurance Statutory Committee in reference to regulations and advice. One of the points made by the majority of the Royal Commission was that as the scheme stands the Minister of Labour has extensive delegated powers under the Unemployment Insurance Acts, and that in their view he should not in future exercise these powers before obtaining the advice of an independent authority. Your Lordships are familiar with the issue. On the one hand, of course, there is the practical impossibility of Parliament itself dealing with all the details of administration which are thrown up from time to time in the course of the operation of the scheme. On the other hand is the fear, which has often been expressed, of delegating too wide powers to Ministers and Departments. The Royal Commission referred to the Report of the Committee on Minister's powers dated 17th March, 1932, and said that "the Committee came to the conclusion that such delegation is both legitimate and constitutionally desirable for certain purposes within certain limitations and under certain safeguards." The Royal Commission made proposals which they considered to be in accordance with the principles laid down by that Committee, and what the Bill does is on the lines of the proposals of the Royal Commission.

It lays down as a general procedure that before the Minister makes regulations (other than regulations relating to instruction and training) under the Unemployment Insurance Acts, or makes Orders to deal with anomalies, he shall submit the draft of such regulations or Order, to the Unemployment Insurance Statutory Committee, who shall forthwith consider the draft and report thereon to him. The Committee are to publish draft regulations and to consider objections which may be communicated to them. Any such regulations which are made and the draft of any Order to deal with anomalies must be laid before Parliament, together with the relevant report of the Committee, and a statement by the Minister showing what amendments (if any) have been made since the report of the Committee, and what effect (if any) has been given to any recommendations of the Committee and, if effect has not been given to any of the recommendations, giving the reasons for not adopting them. I think that your Lordships will agree that this also is a move in the right direction. It is an endeavour to get the best of both worlds, that is to say, not to overburden Parliament with the thrashing out of the pros and cons of various detailed administrative requirements and at the same time not to leave any individual Minister too free a hand. The Unemployment Insurance Statutory Committee will have the further duty of advising the Minister of Labour upon such questions relating to the operation of the Unemployment Insurance Acts as he may refer to the Committee for the purpose.

Before I leave Part I of the Bill, let me say we in this country have an unemployment system which is unique. We have had over twenty years experience of its working, partly in times of good employment and partly during a period of unrivalled industrial depression. During the latter period the scheme has been called upon to play a part for which it was never designed. It has been hastily adapted to meet extraordinary conditions and in its new rôle it has had an extraordinary measure of success. It would be only natural, however, that in this long period during which the scheme has been operating certain defects should be brought to light, even had times remained normal; it was inevitable that the employment of this machine for a purpose for which it was never intended should result in a number of serious defects. The present Bill aims at remedying, and. I believe, with the fullest conviction, will succeed in remedying, the defects which have been made apparent. I told your Lordships last year that the Government considered that the somewhat long time which had been occupied in working out the revision of the scheme would have been well spent if the measure eventually produced was both well conceived and fundamentally sound. I say without fear of contradiction that the measure which you have before you answers both these descriptions. I do not claim that the last word in unemployment insurance has been said. Unemployment insurance cannot fulfil its function unless it is adapted to the industrial circumstances with which it has to deal; as those circumstances change from time to time, so must the scheme change. But I do say with the ultmost confidence that, if this Bill goes through, we shall have in this unemployment insurance scheme a first line of defence against the difficulties and hardships arising from unemployment that will prove of incalculable value and be a landmark in the history of this problem.

I now pass from Part I, the insurance part of the Bill, to Part II, which although it has little formal connection with Part I, is a sequel or corollary to it. It is a national scheme, nationally paid for and nationally administered, without taint or stigma of the Poor Law, for those outside the benefits of Part I, and in addition it provides supple mentary assistance, when required, for persons within Part I. I trust I have sufficiently emphasised the Government's view that the insurance scheme should be self-supporting and should pay its way without recourse to enormous borrowings. The benefits secured by the scheme must be related to the income of the scheme or, in other words, must be limited. There must be some period of time after which an unemployed man ceases to be entitled to benefit: otherwise, the scheme must become bankrupt; or, alternatively, the rates of contribution—in other words, the premiums—must be fixed so high as to be intolerable.

At the present time, after some years of an unexampled industrial depression there are large numbers of persons who by reason of prolonged unemployment are not entitled to insurance benefit. In round figures the numbers may be placed at about one million. Of these, about 150,000 will, I am glad to say, again become entitled to benefit owing to Me improved terms proposed in Part I of the Bill. But after allowing for that your Lordships will appreciate that there will still remain in round figures 850,000 whose right to insurance benefit will have been duly met and fully discharged, and they will thus cease to be beneficiaries under the insurance scheme. Notwithstanding that according to all the signs and portents the period of depression is now happily drawing to a close, the numbers who are not entitled to benefit under Part I are likely to remain large for a considerable time to come. Clearly, in a modern civilised society reasonable and humane provision must be made for these unfortunate persons, the majority of whom are the victims of circumstances entirely beyond their own control. Moreover, I invite your Lordships to recognise the fact that the unemployment insurance scheme comprises only about 12,750,000 persons employed in what I may call wage-earning occupations have already alluded to the exclusion of agriculture. Domestic servants, too, are not insured for unemployment. These, together with persons employed in a few other occupations, constitute a large body of workers who are subject to the vicissitudes of unemployment, but are outside the unemployment insurance scheme altogether. On any broad and reasonable view it would be unjustifiable in devising a scheme for the assistance of persons who are in need on account of unemployment to discriminate between those who have exhausted their insurance benefit rights and those who, owing to the limits imposed upon the scope of the insurance scheme, have been unable to acquire benefit rights because their employment was not insurable.

The scope of Part II of the Bill has accordingly been drawn very wide so as to include practically all persons who normally follow wage-earning employment. For reasons of administrative practicability it is necessary that the scope of the proposals should be stated in definitive terms, so that the question whether a person is or is not within the definition can be confidently and rapidly determined. We have, therefore, looked at the field covered by the Widows, Orphans' and Old Age Contributory Pensions Acts as indicating what I might call the boundaries of Part II, which will in consequence comprise some four million persons in addition to the 12,750,000 who are within the scope of Part I of the unemployment insurance scheme—a total of 16,750,000 persons. Wide, however, as the scope of the Bill is, it has been necessary to keep in mind the fact that we are dealing with the industrial problem of unemployment and that we are concerned in the proposed legislation with persons who can reasonably be expected, as trade conditions improve, to take their place again in the ranks of self-supporting workers. The scope is accordingly limited to those who are able-bodied, or, as the Bill puts it, "capable of and available for work "and who are under the age of sixty-five.

The problem that Part II seeks to solve is that of dealing with large numbers of persons who are unemployed, but have no rights to insurance benefit. Under the law of our country as it stands there is already provision for those who are in need, without distinction of class, age, sex, or previous employment. Since 1601 the Poor Law has provided the medium through which the conscience of the community has expressed itself towards its less fortunate members. In theory the Poor Law and the Poor Law organisation provide a normal method of relieving the needs of those who, through unemployment or for any other reason, are in want. Why not, therefore, allow it to function and carry such load as the fluctuations of trade and industry may cast upon it? I want to face that question quite frankly.

There are several answers that I venture to submit to your Lordships why that course is both undesirable and impracticable. In the first place the Poor Law is local, both in its finance and in its administration. That was no disadvantage in bygone days when each locality was in a position largely to determine its own fate. To-day, however, one part of the country may be depressed and, if I may say so, may be clogged with unemployment almost to the extent of solidifying into a sort of rigid economic strata on account of developments and movements of industry which it is powerless unaided to modify or arrest. I do not wish to do more in this connection than refer to what have come to be known as the distressed areas. Obviously, those areas, with their depleted finances, are in no position to provide even upon the most meagre basis for their impoverished members. The position has only been made tolerable for them, and for many other less stricken districts, by the unemployment insurance scheme carrying large numbers of persons with the help of the national Exchequer after their rights, as determined on any sound financial basis, had been exhausted. To place upon localities all unemployed persons who are not entitled to unemployment benefit is therefore unthinkable. Indeed, it is necessary to go further and recognise that, notwithstanding the great extent to which the Unemployment Fund and the Exchequer have relieved them, the burden still resting upon local authorities in respect of the able-bodied poor is one which should be lightened.

The total amount disbursed by public assistance authorities last year upon relief of able-bodied persons on account of unemployment has been estimated at approximately £6,500,G00, and I may say at once upon that point that the Bill has the effect of shifting to the Exchequer rather more than 40 per cent. of that expenditure. Your Lordships will, I think, be prepared to accept as a truism the statement that responsibility for administration must follow financial liability, and that if the State is to provide the funds necessary for the relief of its able-bodied unemployed, the State must also assume control of the administrative arrangements. I base Myself, however, upon more than that. In my sketch of the history of the unemployment insurance scheme I reminded your Lordships of the fact of the debt that accumulated in the autumn of 1931. Under the economy measures which followed the formation of the National Government a stop was put to further borrowing and those persons not entitled to benefit in virtue of their contributions were made a direct charge upon the Exchequer under the transitional payments scheme. The beneficiaries under that scheme received payments according to the extent of their need, subject to certain overriding limits. The system obviously involved the individual consideration of cases in the assessment of need, and this duty was placed upon the public assistance authorities.

The fact, however, was that while the State provided the money, the local authorities controlled its rate of expenditure, and experience has shown that this is an unstable and unsatisfactory state of affairs which should not be maintained as a permanent arrangement. The Government decided therefore that in order to secure uniform and equitable administration and to maintain proper control over the very large sums which the service involves, the duty of assisting the industrial unemployed should be centralised. The question then arose as to the authority that should be charged with this duty. The Minister of Labour is responsible for the administration of the Unemployment Insurance Acts and other measures relating to employment and unemployment. Under this Bill it is proposed to set up an Unemployment Assistance Board to which these matters will be referred. The authority set up by Part II of the Bill is a norm-political Board appointed by His Majesty by warrant under the Sign Manual. Members of the Board will hold office in accordance with the terms of their warrants. They will be above the ebb and flow of Party politics, and I am confident that your Lordships will agree that it is desirable that they should be so. At the same time it must be recognised that the powers of the Board will be large and their exercise will touch the lives of many hundreds of thousands of our fellow-countrymen. It would be altogether foreign to the best traditions of our Constitution that any Board or authority, however well chosen, should be given such powers and left immune from any control by, or effective suggestion from, the Government of the day and Parliament. Steps are therefore taken under the Bill to protect that position.

I suggest that the existence of need is a cardinal condition of the assistance of those who have no claim upon the Insurance Fund and that in making provisions accordingly the Bill will commend itself to most people of all Parties and classes. To be quite just, I believe that the criticism of the means test has been more against a particular kind of means test than against the principle itself. Most important in ensuring a just and reasonable standard in the assessment of need is the requirement that the need of an applicant for an allowance shall be determined and his needs assessed in accordance with regulations. It is therefore provided in the Bill that one of the duties of the Unemployment Assistance Board shall be to draw up such regulations.

So far I have only outlined to your Lordships those proposals which relate to the grant of allowances, but the Board's duty to able-bodied unemployed and their dependants will not be confined to assisting them by means of cash payments. Your Lordships will be well aware of the growing public recognition of the fact that men who are experiencing long periods of unemployment need more than physical sustenance. It requires a man of strong character to withstand the corroding effects of a vain and hopeless search for work extending over months and possibly years, and the tragedy is that when at last work comes muscles may have become soft and the habit of application and discipline lost, so that the hold upon a job which was sought for so long is precarious and weak. I submit, therefore, that it is a notable and significant step forward that there should be submitted to your Lordships under this Bill proposed legislation which charges a central authority in the widest terms with the duty of promoting the welfare of persons who are in need of work, and in particular with the making of provision for the improvement and reestablishment of the condition of such persons with a view to their being in all respects fit for entry or return to regular employment. Your Lordships will agree that these men need to have their employability maintained and, if necessary, improved. Above all, they need to be kept in contact with the opportunities of employment that present themselves. That is why we propose to lift them out of the field of public assistance connected with the Poor Law authorities and Poor Law traditions, and deal with them under a scheme which is mainly industrial and not eleemosynary in its outlook.

Your Lordships will have the opportunity on the Committee stage of considering in detail all the provisions of the Bill. In this connection I ought to add that it is essential the Bill should become law not later than the 30th of June next. The reason for this is, as your Lordships are aware, that a number of important provisions in the existing scheme of unemployment insurance come to an end on that date. While, therefore, I have no desire to suggest that the proceedings in your Lordships' House should be unduly curtailed—on the contrary, I hope that the provisions of the Bill will be given the closest possible examination by your Lordships—I desire to stress the absolute necessity of our making such progress with the Bill that the Royal Assent can he sought before the end of the present month.

In conclusion, let me say, that this Bill opens up an entirely new chapter in national social service. The State becomes responsible for financing and administering a scheme for relieving all need arising from unemployment. That surely is a change of profound significance. While there is much in the Bill that is important to which I have had no time to refer, I hope I have at least made clear to your Lordships the main structure and purport of the proposals. I hope, too, that your Lordships, appreciating the conception of the whole measure, will feel that I am justified in claiming for this Bill that it, is one of the most comprehensive, constructive, and well-thought-out pieces of social legislation that any Government has ever placed before Parliament. Believing with the fullest conviction that I am justified in making that claim, I submit this Bill with confidence to your Lordships for Second Reading. I beg to move.

Moved, That the Bill be now read 2ª.—(Lord Rochester.)


My Lords, I feel a bit battered by the devastating flow of eloquence of the Minister who has moved the Second Reading of this Bill. One almost feels one requires some time to recover. Debates in your Lordships' House do, of course, have a value from time to time. Occasionally we have discussion of matters of academic or scientific interest and, of course, we have first-class knowledge of matters such as betting or land taxes and matters affecting the personal knowledge of members of your Lordships' House, but when it comes to questions of sociological interest, such as unemployment insurance, I think that this House has no very real part to play in legislation. The attendance, for example, as compared with the attendance at the last sitting indicates a lack of interest on the part of other members of your Lordships' House. We have here at the moment about twenty or twenty-five members as compared with sixty-five some two hours ago, and Divisions on matters which really interest members of this House sometimes comprise as many as 150 members.

It was extraordinary that the Press of this country in discussing the Unemployment Insurance Bill actually stated—and I read it in a number of newspapers—that as soon as the Bill passed through all its stages in the House of Commons it was now law. I see the Minister who moved the Second Reading agreeing with me that this extraordinary statement at the newspapers indicated their feeling of how unimportant was any effort on the part of your Lordships' House in connection with the matter of unemployment insurance. This debate, of course, is utterly unreal, and it seems to me that to a very large extent it is a waste of a considerable amount of time. Already an hour or more has been wasted, and I propose to waste another half-hour of the time of those of your Lordships who are here, and after that we shall no doubt have other members each of whom will add twenty minutes or half an hour to this task.

We on these Benches object to the whole attitude of the Government to this type of measure. We object that the Government should accept unemployment in the cool way in which they do. We object to the fact that they are not attempting to deal seriously with unemployment, but are merely attempting, by a sort of mathematical formula, to deal with the effects of unemployment. True, there has been a very considerable reduction in the numbers of the unemployed in the last eighteen months, and I think the National Government are entitled to compliment themselves on that result; but I object, and the Party with which I am associated objects, to the fact that we are still accepting as normal—and the Minister stated in so many words this fact—that, for example, there are still over 2,000,000 unemployed in this country. I happened to look at the last number of the Ministry of Labour Gazette and I found that there are 274,000 unemployed coal miners, representing about 1,000,000 people, men, women and children, suffering from unemployment in the coal mining industry. It is the same in engineering, where there are 120,000 unemployed, and in the building, public works and contracting industry, where the unemployed number 270,000. Yet we know that there is an immense housing and slum problem which has not been seriously touched by the action of the Government.

I cannot help thinking that the speech of the Minister was extraordinarily inhuman. It was as though he forgot the meaning to men and women of this problem of unemployment. Somehow, his speech was all a discussion of figures and stabilising the Fund, and there was no realisation of the starvation and the malnutrition resulting from unemployment. I do not expect the Government to accept the Socialist solution, but surely the Government might have brought a little vision to bear on this matter. Might they not, without in any way accepting our Socialist solution, have considered, for example—I am sure that some of them have, but not as a Government—the raising of the school-leaving age as a means of dealing partly with unemployment? It would not only have the effect of taking off the labour market 200,000 or 300,000 young people, but if, as the Minister says, unemployment is quite inevitable, then it is possible to make a virtue of the necessity of unemployment and to call it leisure, and then to use the raising of the school-leaving age as a means of educating people to enjoy and make the most of the leisure which the system has forced upon them. The raising of the school-leaving age would perhaps have only affected some 200,000 or 300,000; nevertheless, it would have been a measure which would have had value to the country as well as helping to deal with unemployment.

Then there is the question of shortening hours of work. The Government have all the time opposed any statutory shortening of the hours of labour, and have not even supported international legislation in that direction. One might mitigate the hardship of those who are unemployed by a fairer distribution of the national income, but when we have a Budget we find that the wealthiest people get a gift by remission of Income Tax of £24,000,000, practically the whole of which is subscribed by the savings involved by the application of the means test to the poorest people in this country. The means test actually made a saving of £21,000,000 in a year, and the whole of that £21,000,000, taken from the pockets of the very poorest people, is then put into the pockets of the wealthiest section of the community by the remission of Income Tax in the last Budget. I know that to many members of your Lordships' House that reasoning must sound fantastic; nevertheless it is a fact which cannot be gainsaid.

The Government are not even considering the humanitarian aspect of the suffer- ings of the families of the unemployed when they continue to support what I would call the scarcity method of raising prices, the method by which, in the world, we destroy food in order to keep up the prices of food for the benefit of productive industry. None of these things has been considered from the point of view of the actual sufferers from unemployment, and it is a fact that that suffering has even been to some extent increased by otherwise excellent measures undertaken by the Ministry of Agriculture, which have had, and are having, the effect of raising the price of certain essential food products, particularly bacon and milk.

Our reason then for opposing this measure is, first of all, because it does lack humanitarianism and shows a, lack of vision. I noticed that the noble Lord said that the question of agricultural labourers was under consideration, but surely, when a Government Bill of this magnitude was being introduced, these new classes of the community could have been included in the Bill. That would have had the effect of lowering the contributions by broadening the basis from which those contributions are taken. The matter of agricultural labourers has been discussed for years and years, and practically all sections are in favour of the inclusion of agricultural labourers in the Bill. Why not domestic servants? Why are not they included? Then a valuable section of the community might also have been brought in. I refer to clerical workers with over £250 a year. If you are going to have an Insurance Bill—a contributory method of insurance—it does seem absurd to limit contributions to the very poorest people when, by including much wider sections you could secure a much larger income and better benefits to those who have to receive them.

The Minister was very pleased with the fact that the Government had made the Fund solvent, but they have made it solvent in the first place by dividing the unemployed into two categories. For no reason a man is taken out of a better category, and put into a worse category for no fault of his own, just because the Minister says that they have to have the Fund solvent; in other words, a mathematical calculation of receipts and disbursements is more important than the actual amount which can be distributed in benefits. That division was put in—and the Minister omitted to tell your Lordships this—for the reason that the Government wanted to bring to an end any possibility of continuous unemployment benefit being drawn by an unemployed man. Now under Part I the unemployed insured will simply get a sum of money not calculated on their needs at all, but based on mathematical calculations of how the Fund is to be maintained solvent. The way it is to be maintained is by a continuation of high contributions, by a continuation of contributions which are raised to an immense amount for the poorer section of the workers, and by the continuance of what in my opinion is an entirely unjustifiable clause arranging for the repayment of the debt of the Fund. The result of high contributions on the one hand, and, on the other hand, repayment of a debt incurred in a time of great suffering and widespread unemployment, is that the benefits to be paid by the Fund are very low indeed.

These benefits mean nothing else but insufficient food for the people who are receiving them. I want to give one example to the House to illustrate that fact. There was an interesting inquiry in Stockton-on-Tees where the local authority had two very bad slum areas. They decided to close down one slum, area, and about ten years ago they built a beautiful new housing estate which they called Mount Pleasant. They moved about 150 families to this new housing estate and everything looked beautiful. But they found, after those families had been in the new houses for some years, that whereas in the old slum area the death rate of these unemployed families —90 per cent. were unemployed—went down slightly, yet in the new housing estate the death rate increased by 50 per cent. The actual figures were 22 deaths per thousand before they left the slum area and 33.5 deaths per thousand after they had been five years in the new houses. The medical officer of health could not understand what had happened and enquired into the whole position. He arrived at the only possible explanation. That was that the people had to pay in rent for the new houses 9s. a week on the average compared with 4s. 8d. in the old slum area. That meant that they had 4s. 4d. less a week to spend on food. Therefore children and adults were not getting enough food and they died in consequence.

They died because the unemployment benefit which the Government are continuing was insufficient to provide at the same time a decent house in a decent area and enough food. The actual expenditure on food per head per week was found by the medical officer of health to be reduced from 3s. 9½d. to 2s. 10½d. How would any of us care to live on an expenditure of 2s. 10½d. a week for food? It is not easy to think of it, but it is easy to shift responsibility by saying that these people are used to it. How can human beings be expected to live on 2s. 10½d.? Of course they do not do it. They die. That is why we resent the inclusion in this measure of provision for the repayment of the debt, which will mean lower benefits, which will mean that hundreds or thousands of people will die.

Under Part II of the Bill these unemployed workers, not because they are wicked but because they have been unemployed longer than others, are taken out of unemployment insurance and put under a new authority called the Unemployment Assistance Board. Under Part II the Unemployment Assistance Board is not responsible to Parliament. Therefore if they administer a means test in a way Which brings still further suffering to these families, they cannot be brought to book by being brought under the criticism of elected Members of Parliament. We object to that plan of dealing with the needs of the people by a body which is not subject to Parliamentary control. We object also to the heavy payment demanded from local authorities towards the expenses of this body. I forget the exact figure, but something in the neighbourhood of 60 per cent.—the Minister will correct me if I am wrong—of the cost of disbursements must be met by local authorities who will have no voice whatever in the work of that Board. I notice that in a leading article recently The Times strongly criticised that provision in the Bill and said: "This provision is suspiciously like taxation without representation and should be deleted. It is not deleted. It is maintained in the Bill.

Then again the means test, to which the Minister referred, has been maintained with inadequate children's allowances. I want to tax your Lordships' patience for a few minutes while I touch on the effects of the means test. After all, while it may mean keeping us from our dinner for a short time, it means keeping hundreds of thousands of unemployed from their dinner for all time. Therefore I make no apology for taking a few minutes of your Lordships' time over a matter on which we on these Benches—and we know we are not in this respect alone among members of your Lordships' House—feel deeply. Under the means test, the details of which are laid down in the Bill, there is left to a family to expend on rent and food, a sum of money which, experience has shown, is quite inadequate to live upon. I have never tried to do it and I do not suppose any member of your Lordships' House ever has, but the matter has been examined by experts and we know the result of their inquiries.

The British Medical Association appointed a committee on nutrition and that committee reported that for a child of one to two years of age the minimum sum necessary per week was 2s. 8d., for a child from three to six years, 3s. 4¾d., and for a child from eight to ten years of age, 4s. 2d. The Bill allows 2s. The minimum for a young child, according to the committee, is 2s. 8d. Even if we gave a child one pint of milk a day only, and nothing else, that would come to ls. 9d. per week, and what is left of your 2s. when you have given one pint of milk a day? The sum included is utterly and hopelessly inadequate. "It is considered," says the report, that one pint of milk per day from the age of one to five years, and half a pint a day to ten years, constitutes a sufficient and safe quantity, but more could be given with advantage. I may say that the British Medical Association in compiling these diets had to add one warning note. They said that during the compilation of these diets constant vigilance has been exercised to keep the cost down to the minimum which permitted the purchase of an adequate diet. It has not been possible to prepare a diet for a child alone at a less cost than half a crown a week. Yet we find 2s. maintained as the sum of money which a juvenile unemployed can draw if the parent is also unemployed!

It is piling suffering upon suffering. These children pay into the Unemploy merit Insurance Fund from the age of fourteen but they may not draw benefits until they are sixteen, and the Fund, in order to maintain the solvency by which the Minister sets so much store, is actually making a profit out of children of £750,000 a year—a profit out of children, by taking money out of their pockets and refusing to give them unemployment insurance benefit when they are unemployed unless the parents are also unemployed, and then giving them a sum of money which every possible scientific test has proved to be hopelessly and utterly inadequate. The present head of the medical service of the London County Council, whose name is held in immense honour by all who know the work of doctors in connection with child welfare, Dr. Somerville Hastings, in an article in the Lancet about a year ago gave a report of an examination which he undertook of twenty-one unemployed families on the means test which has been maintained by this Bill. Fifty-three children were examined and thirty-three were found to be under-nourished.

This Bill means, then, the continuation of the starvation and under-nourishment of children in order that the Bill may provide for a continuation of the solvency of the Unemployment Insurance Fund, or, as regards the means test, in order that the public, knowing these things, may be prevented from influencing the administration of the means test where, in a locality, public opinion is more alive to the needs of the people than are the detached administrators included in the new Assistance Board. Dr. Somerville Hastings's inquiry found that the amount available for food, warmth and clothing in these families varied from 1s. 4d, to 4s. 6d. a week, and averaged 2s. 5½d. per head. That is not for food only, it is for food, warmth and clothing.

I am looking forward to hearing what the Archbishop of Canterbury is going to say about this. I know that he will support the findings of the clergy who examined this question in Northumberland and in Shoreditch. In Northumberland, the Archdeacon of Northumberland and a committee of clergy examined the whole question in Newcastle-on-Tyne, and this is what they said: Our attention was first arrested by the almost unanimous request, on the part of the unemployed men, that what was really most needed was food. In visiting we have observed that the mothers are suffering from under-nourishment, particularly in families where there are several children. This is endorsed by doctors in charge of welfare centres, who affirm that long-continued unemployment is telling increasingly on the health of mothers. So the continuation of the means test and the desire to maintain the Fund in a solvent condition is going to continue the under-nourishment and the starvation of mothers, as found by the committee of clergy of Northumberland. In Shore-ditch, the clergy of the Shoreditch rural deanery went into the same question, and they said: Whilst realising the need for public economy [we] endorse the opinion recently expressed in the memorandum of the clergy of Newcastle-on-Tyne on the subject of unemployment and the working of the means test. It is our considered opinion"— that is, the opinion of the clergy of the Shoreditch rural deanery— that the findings of that memorandum are in accordance with the actual conditions obtaining in this neighbourhood—namely, as a result of the means test many are suffering from under-nourishment, and we feel that there is need of a more generous interpretation of the same. In Merthyr an election is taking place at the present time. There are about 90 per cent. unemployed in that area.


Ninety per cent. of whom?


Of the miners. It is extraordinary to realise that the infantile mortality in that area is 73 per thousand as compared with 65 per thousand in the rest of the country—8 per thousand higher, because of the fact that there is not enough food for the children to live en. It is true that the infantile mortality has been reduced in the last two years. It is true that in 1931 it was 120 per thousand, and at the same time in the rest of the country it was 63 or 64 per thousand. It has been reduced in the last three years to 73 per thousand. But the medical officer of health in making that report gives the warning that whilst the drop is gratifying, it is too early as yet to attribute very great significance to this fall. In other words, lie maintained what he previously stated, that the fact that there is insufficient food for the people is the cause of the deaths of children under one year of age being at least 8 per thousand more than in the rest of the country.

This is having an effect upon tuberculosis. We have a report from the North of England prepared by the Committee on Malnutrition. My Lords, what a disgrace, in the second richest country in the world, in a civilised period, that we actually have to appoint a committee against malnutrition!It seems extraordinary in the midst of such great wealth, but this sort of Bill continues this malnutrition. That Committee on Malnutrition found that in certain areas in the three years 1925 to 1927 the death rate from consumption in these depressed areas, graded as such by the Treasury, was sixty-one per million greater than in the more fortunate areas. Since unemployment became much worse it has risen from sixty-one per million to ninety-five per million greater than the rest of the country to-day. That is to say, that a thousand people have died during the past year in the depressed areas, who might have been alive had they lived in other towns. Those areas are depressed because of the essential maintenance of the solvency of the Fund, and the repayment of the debt of the Fund, making the benefits payable too little, and because of the maintenance of the means test, with the attendant result on the health of the people.

I have here a letter from a girl working in a mill. She says: I am a ring spinner in a Lancashire mill. My husband is out of work and we have two children. I go out to work at 7.15 in the morning, so as to be there for 7.45. I run round four sides all day till 5.30, with only the hour break for dinner; at the end of the week I get 29s. 3d…. 1 am dead tired when I come home at night, what with bad work and the heat and not able to get much nourishment…. My husband does all the housework and washing, except ironing and baking. I iron the clothes on one night during the week, and on Sunday I bake. This keeps me busy till dinner time, and then I just get to rest a bit on Sunday afternoon. With my husband being out of work every shilling is precious. He cannot get anything on the means test as they say we have 2s. 3d. over the limit. The scale is 27s. for four. Then she tells how she spends her big income: Rent, 7s. 6d.; coal, 3s. 8d.; milk, 1s.; insurance, 1s.; union, 9d.; gas, 1s. 6d.; washing and cleaning materials, 1s.; and 6d. for doctor's bill for the children. She adds: Now I don't know what you think of Lancashire, but this is what I think: we are not living, we are just existing. We are being driven down to the very lowest level, like they have driven the coolies, and it is time Lancashire women woke up to the facts and got a move on. It is no disgrace for any working mother to come out into the open and fight for food and better conditions for her children. I am with that women in her fight. We are lighting against this Bill because it is maintaining the poverty and misery of these wretched people by a demand that the Fund shall be solvent, that you must repay the debt to the country contracted in bad times, and that you must maintain the means test, so that the Income Tax-payers can get their £24,000,000.

I think we owe a debt to the British Broadcasting Corporation for some of the broadcasts that we have heard recently. There was one last Saturday. I did not hear it, but I have read about it, and I understand there has been considerable trouble about it. A Mrs. Keen, the mother of six children, and thirty-four years of age, said that she felt very old, that she had not had a holiday for fourteen years, and that she puts her children to bed early for fear they might ask for a piece of bread, which would be wanted for their breakfasts in the morning. This is because she is on the means test, maintained by the Government, and so has not enough money to feed her children who, if they are asleep, do not feel so hungry. It is a very remarkable state of things. Mrs. Keen thinks it is unfair and rotten. I agree with her. I think this Bill is unfair and rotten, and that is why we on these Benches are opposed to it—because it is an unfair and rotten Bill.

We are told, and the Minister is very pleased with it, that the Government are having camps to recondition the workers. Why do they want reconditioning? Only because they are starving and undernourished. You have to take them to a camp with a sort of Fascist régime, and recondition them for work which does not exist. The whole thing is fantastic. It is not their fault that they are unemployed, and the Government are using their immense power to force and bully these people into regimentation in concentration camps. I do not wonder that there is widespread resistance to these camps. The Bill has been called a "slave Bill "and the camps have been called "slave camps,"and I believe it is not an inapt description. In the minds of tens of thousands of people this Bill is a slave Bill, applying a form of slavery to these people.

There is a book written by Professor Soddy called "Money versus Man." He says: The unemployed, but for the taxation levied on the well-to-do, would starve. As it is they only half live. They consume less and less as a right and more and more as a charity, and insecurity of livelihood saps their independence and morale as poverty undermines their health and that of their children. The submerged tenth of the nineteenth century ever grows. Though ameliorative legislation may have reduced the actual intensity of their individual sufferings, the proportion affected increases. This is occurring in an age in which science has already abolished the physical necessity for poverty. The penury of the masses accompanies, as ever, avid enhances the relative wealth of the few. This is not national wealth but the reverse. It is only too clearly indicative of national decline and decay. I think that is not an unfair picture of the conditions before this Bill, which will not be made better, but which will be made worse and deliberately made worse, as a result of the passing of this measure.

We of course believe that the only solution is a socialist solution. We know that unemployment is not due to the faults of these men. The causes of unemployment are national and international. We know that when you apply machinery to production, and machinery is privately owned, the workers become unemployed by the very application of that machinery, and that is why Socialists demand a socialist solution of the problem. A Leader of the Labour Party, Mr. Arthur Henderson, in a speech he made at the annual conference of the Labour Party two years ago, used these words: Circumstances …. have given a new impetus to the need for bold and drastic socialist remedies. One of the objects of the Labour Party is to secure for the workers the full fruits of their industry upon the basis of the common ownership of the means of production, distribution and exchange. That surely means that the aim and fundamental purpose of organised labour is completely to transform the existing system by measures of socialist reconstruction, to replace it by a new social order. Labour stands for Socialism because it is convinced that we can only realise economic freedom and social equality by substituting commuunity owned and publicly controlled industries and services for disorganised competition and the domination of vested interests. We stand for the socialist solution. We say that if under the present system we have unemployed, then those unemployed must and shall have either work found for them or full maintenance. Resolutions to that effect have been carried by the Labour Party year after year, and will be put into effect as soon as the opportunity comes. It is for that reason that we consider that this Bill has only a temporary importance. As soon as Labour is returned to power we shall repeal the whole thing. We do not consider it is worth amending. We do not consider that your Lordships' House is the place to apply Amendments, except in special circumstances. We shall repeal the whole measure. We shall abolish the means test. We shall abolish the Unemployment Assistance Board, and we shall provide the socialist solution for unemployment as a whole and full maintenance for those who are unemployed and for their dependants while unemployment continues. Therefore, while we are opposed to the whole measure, we shall not vote against it on Second Reading. We have come to the decision not to vote on Second Beading against measures passed by the House of Commons. We are opposed to the Bill root and branch, but we shall not trouble to amend it, we shall repeal it when the opportunity comes.


My Lords, there is very little to be added in the way of explanation of the Bill after what the noble Lord, Lord Rochester, has said, and certainly nothing to be added in the way of criticism after the speech to which we have just listened from the noble Lord opposite. But I should not like to be wholly silent on a matter so closely affecting the social welfare of our people. I want to get down from the region in which the noble Lord has just left us and to deal with the Bill as entitled to our support on the simple practical ground that it does provide a real constructive basis upon which the assistance of the unemployed can be continuously erected. First of all, it does make the insurance part of the scheme real, and not fictitious. I dare say your Lordships, like myself, listened with some astonishment to the way in which the noble Lord who has just sat down derided any attention to mathematical calculations and the like, arid I should have thought that nothing in the long run was more unfair to those who have entered this insurance scheme, than to ignore the necessity of its sound financial basis. The language which he used recalled to my mind some of the practices which very nearly brought this country to a very serious financial crisis not many years ago.

Further, this Bill has the great merit of securing for the uninsured and those who have dropped out of insurance, or who have been incapable of insurance, some maintenance on which they can rely without recourse to the Poor Law with its most unwelcome associations. When I remember the position of the unemployed only a few years ago, the fact that a Bill of this kind should be introduced, with at least this strong basis of permanent assistance for the unemployed, marks a very great change. Thirty years ago I was very closely connected with the unemployed problem in London. It was the time of rival newspaper and charitable funds. It was the time of illconsidered, haphazard, most expensive but futile public works. It was the time when charity was the only resource, and that was both intermittent in its character and inadequate in its scale. And it marks a greater measure of advance than sometimes we realise that this whole question of unemployment should now be put at least on the basis—however inadequate the superstructure may be—that this Bill provides.

I must not allow myself, especially as I have an engagement elsewhere, to follow the noble Lord in what he has said. With many of his criticisms the representative of the Government will deal, but I cannot refrain from saying that it seems to me very strange to repudiate altogether the necessity of a means test. You may say that the scale is not sufficient, you may believe that it should be increased, but to say that there ought to be no means test is running a risk which has been run at times in other countries with disastrous results. Any attempt to put the unemployed precisely in the same position as men who are doing a full day's work, with all the responsibility and strain that that means, would, I think, be very unjust to the great body of the working people of our country. Moreover, I cannot but say that experience has shown that one of the most expensive things—and a thing which has in the past more quickly led to general social distress—has been the sentiment which is wholly unrestrained by facing the actual facts of the case.

If I may say so, with the greatest possible sympathy for a great deal that the noble Lord has just said, I do not think that he will command, in this House or elsewhere, greater attention to what he has described as the humanitarian aspect of the question by indulging in the somewhat violent language with which he concluded his criticisms of the Bill. I think he was going beyond the limits of legitimate criticism in describing a Bill so constructive, so carefully arranged, and based upon such practical experience, as simply rotten because it does not go so far as he would wish. If I refrain from following the noble Lord I know that he will not suppose that I am in the least degree wanting in sympathy with all the difficulties that he has so fully and with such feeling put before us.

Perhaps he may be the more inclined to allow me not to go further in my allusions to his remarks if I say that there is one point on which I happen to share his disappointment and his misgiving, and it is only upon that point that I desire for a few moments to ask your Lordships' attention. It is the part of the Bill that deals with the problem of the juvenile unemployed—Clauses 13 to 15 of the Bill. It is quite unnecessary to dwell upon the magnitude and the seriousness of this problem. As to its magnitude, the number of juveniles between fourteen and eighteen on the books of the employment exchanges and of the juvenile employment bureaux in January of this year was 117,000. If you include, as you ought, the juveniles who do not register, it will be a moderate computation to say that the number of juvenile unemployed at the present time is certainly not less than 156,000, and this number is bound to increase when the higher birth rate which succeeded the years of the War begins to have its effect. I imagine that that peak year would be about 1937. In 1937 the number of boys and girls between the ages of fourteen and eighteen will exceed the number of boys and girls in 1933 by no fewer than 443,000, and one who is well able and entitled to speak on this whole problem has assured us that there may be between 100,000 and 150,000 more young persons out of work in 1937 than there are to-day unless there is some almost miraculous improvement in the industrial situation.

If that is the magnitude of the problem then it is needless to dwell on its seriousness. The noble Lord will forgive me if I do not dwell on it, because there is no use dwelling on what is clear to the imagination of all of us. It is needless to spin words describing the need of all these young unemployed and the position in which they are placed through no fault of their own—the slow and certain sapping of their physical health, of their capacity of mind, and of their strength of character. It is really appalling that in large parts of this country there should be more or less permanent unemployment among masses of young people between the ages of fourteen and eighteen, the most formative years of their lives. Therefore the part of the Bill which deals with juvenile unemployment is, as the noble Lord who introduced it rightly said, one of very great importance, and I do not hesitate even on Second Reading to ask your Lordships to give special attention to it.

The noble Lord has described the proposals in Clauses 13 to 15 under which the local education authority has to make a survey of the number of unemployed juveniles between fourteen and eighteen within its area, and if it considers it desirable or necessary that they should have courses of instruction it will be required to provide them, if the Minister of Labour approves of the course in consultation with the President of the Board of Education. He may approve of these courses, and he may require the attendance of young persons between these ages at these courses if their attendance can be reasonably expected. He also takes formidable powers, if he is satisfied that a local education authority is negligent in providing these courses, to make a compulsory order if need be by means of mandamus.

All that sounds very effective, but I wonder what it is practically coming to in point of fact. I should like to ask such questions as these, and I am glad my noble friend the President of the Board of Education is in his place. I should like to ask whether schemes are now being prepared in consultation between the Ministry of Labour and the Board of Education, because any schemes that are going to do the slightest good and are not merely going to occupy the time of those attending must be based on very great thought and the accumulation of a very great deal of experience. In the second place I should like to ask what efforts are being made for the proper equipment of buildings where these presumably greatly multiplied instruction centres are to be housed, and, still more important, where is the personnel of teachers to come from, because it is only teachers of very exceptional training and qualification who can really deal with the class of boys and girls who would be within those centres. In the third place, I cannot but ask how we are to secure any continuity of attendance. There is not much educational value in courses of instruction where the membership is continually shifting, where some are in work one month, oue of work the next, and back again to work the following month. Let us take the figures. If I remember rightly, between April, 1933, and January, 1934, there were in attendance at the existing juvenile instruction centres just over 93,000 boys and girls; but during one week in January of this year the actual attendance was only 17,000, which shows how irregular the attendance is.

Once again, I wonder whether it is really wise to create within the Ministry of Labour another special Board of Education. At every point of this matter it is the Board of Education and the local education authorities that are involved and, as I hinted, it is a matter of grave importance to see that the educational value of this work is not forgotten. Why not leave the Board of Education to deal with it, making it its main responsibility to undertake the provision of education in this vital matter, working, of course, in co-operation with the Ministry of Labour? These are among the many considerations that compel me, at least on this point, to agree with the noble Lord that the right way in which to approach this problem of juvenile unemployment is to raise the school-leaving age to fifteen.

I am not at this stage going to enlarge on that point. I will only say that your Lordships will recognise that the circumstances surrounding this question are completely different from those that surrounded it when it last came before your Lordships' House. There is a growing consensus of opinion that this is really the right way to approach this problem. I shall trouble you with only two illustrations. First, the executive of the Association of Education Committees, when they were informing the Minister that they would do their best to work this Bill, added their view that the educational and economic interests of the country would be better served by raising the age of obligation to attend school to fifteen; and I may quote in terser language one who never speaks on popular education without being entitled to be listened to with respect, Sir Percy Jackson, Chairman of the West Riding Education Committee: I suggest that the Minister of Labour can halve hisproblem and more than halve his cost if the Government will raise the school-leaving age to fifteen. It would keep an immense number of juveniles from crowding into an already overcrowded market, and it would ensure, at least, that a large number of young juvenile unemployed would receive the benefit of regular discipline and continuity of instruction.

I shall not say more on that subject now, but after giving the matter some careful thought I am satisfied that the most practical and effective way of dealing with a large part of the problem of juvenile unemployment is to raise the school age to fifteen. I put it to the Government, particularly to my noble friend the President of the Board of Education, though I must not wander from strict attention to this particular Bill, that it is not really too late to reconsider this matter. The school age could be raised without altering the structure of this Bill in the least, and I suggest that that is the right way to deal with a large part of the problem. I turn now to this matter of those who are over fifteen. The provisions of the Bill, inadequate as they may be from an educational point of view, are perhaps the best that could be expected for them. I think that perhaps some of your Lordships share with me the regret that in 1918 we had not the courage to persevere in the large plan of national education which was presented at that time by Mr. Fisher, and which would have secured the existence in this country now of properly organised continuation schools in which large numbers of these juvenile unem ployed could have been fruitfully occupied and educated. But that is crying for the moon now.

Here I would only venture to suggest again that if these instruction centres are to be of real value they should be in the hands of the Board of Education. Let it be remembered that this is not dealing with a temporary problem, it is dealing with a problem which will last and may become more insistent. It is quite certain, as far as I can see, without some complete change in the industrial situation, that the number of juvenile unemployed will be with us in at least their present numbers for a long time to come. Therefore, the best method of dealing with them is a permanent problem for those responsible for the education of the country to consider, and it is one to which they ought to bring at once all the resources they may have of knowledge and of experience, and the best teachers they can command. I have not hesitated to dwell upon this single point even in the Second Reading discussion because I think it is of great importance.

I will close by saying that in spite of the criticisms of the noble Lord opposite, in spite of my wish that at least in many parts the amount of relief could be greater than it is, I think this Bill is constructed on sound lines and is a basis on which even better things may afterwards be raised. I congratulate the Minister of Labour on his success and skill in piloting this complicated Bill through another place, and I hope your Lordships will share with me a wish that it may at least alleviate that heavy burden of unemployment that lies upon our country.


My Lords, as one of those who before 1931 was a member of the Labour Party, I should like to preface the very few remarks that I shall venture to detain your Lordships with at this late hour by saying at the outset that whether I contemplate the constructive, social reform which your Lordships are now considering or, as it seems to me, the complete irresponsibility of much of the criticism directed against it by the Labour Opposition, I find each spectacle calculated powerfully and almost equally to reinforce my conviction that we did well to support the National Government in 1931. I can see nothing in a measure con ceived in the terms of the present Bill which contravenes even the innermost orthodoxes of the pre-crisis Labour Party. Indeed, I find myself sometimes wondering, suppose we could play a trick on the noble Lords opposite and by altering one figure in their calendars persuade them that this was the year of grace 1924, the year of the first Labour Administration, the halcyon days in which they were conscious of no obligation, as they now are, to be constantly protesting against the meanness, the harshness of the treatment meted out to the unemployed by the Government, for the sufficient reason that although in times of greater prosperity the then Government was giving the unemployed considerably less, it did at any rate possess the saving virtue of being a Party. Government, and their own—suppose we could by some magician's stroke of that character transport noble Lord's opposite to 1924, and offer the present Bill to what would then, I am sure, be their admiring inspection as their own offspring, I cannot bring myself to believe they would readily detect it as a changeling. For my own part I can say without hesitation that there is one respect, and one respect only, in which it seems to me easy to distinguish this Bill as one which could not have been produced by the Labour Party, or by any other Party for that matter. Its very comprehensiveness seems to me to characterise it as the product of a National Administration.

As I have listened to the criticisms of the Bill in the course of this debate, as I have read the criticisms advanced against it in another place, as I have read the onslaughts made on it on public platforms in the country, I have been constantly struck by the fact that critic after critic has based his offensive against this measure upon the assumption that its primary purpose is to increase the generosity of the treatment of the unemployed. Now that seems to me, rightly considered, in itself to be a tremendous testimony, not only to this Bill, but to the success with which the National Government has handled the unemployment problem as a whole. It seems often to be forgotten that this measure which your Lordships are now discussing is but the climax of a long series of measures, among which the late Labour Government's Anomalies Act was a conspicuous landmark, all resigned primarily to render the Insurance Fund solvent.

Solvency was the promised land which shone remote and unattainable before successive Ministers of Labour. The many hours of debate which were consumed in the Parliament of 1929-1931 in discussing unemployment insurance were all overshadowed by the grim spectre of the virtual bankruptcy of the Fund, and here we are to-day discussing a constructive reform of our unemployment insurance scheme, after all only two-and-ahalf years of National Government, years which coincided in most other countries with the acutest phase of the economic depression. At a moment when so many other great industrial countries Are finding themselves compelled to impose fresh sacrifices upon their industrial workers, we find ourselves discussing this great reform of our unemployment insurance scheme, already the most generous in the world, and in our discussions its prospective solvency, that almostdespaired-of ideal of all the recent predecessors of this Bill, is so completely taken for granted that that issue, once so overshadowing, has been, with the exception of some words from the noble Lord, Lord Marley, almost untouched. That, I venture to suggest, is one measure of the superiority, in times like these, of National Government and national co-operation.

The mechanism which is to secure the future solvency of the Fund is, of course, the Statutory Committee. Now, strangely enough, that Committee, together with its counterpart under Part II, has excited the sustained hostility of the Labour Opposition. I say strangely, for in the past I have studied assiduously the doctrine not only of Labour leaders but of Socialist theorists, and that doctrine, unless I have been sadly mistaken, has constantly reiterated the virtues of statutory committees, central control, and public planning in the public interest. Now it is surely a commonplace that today unemployment is very largely due to deep-seated changes in our industrial structure. Industry has changed its habitat. New industries are springing up and old industries withering away. In those conditions, which are essentially conditions of flux, surely it is essential that labour should be mobile and adaptable, that there should be a statutory central body expressly designed, as this proposed Unemployment Assistance Board is, for the training and guidance of those who will have to seek work, and no doubt, in many cases, for their retraining, for the readaptation of their acquired skill to the rapidly changing needs of a rapidly changing world. What is that but State planning, a centralised public planning in the public interest?

There are features in this Bill—the means test is a notable example—to assail which many members of the Opposition have had to swallow statements made during the period of their responsibility by Labour leaders of that day. It does seem to me that in order to assail these statutory committees, noble Lords opposite will have to swallow in addition a small library of authoritative volumes of socialist exegesis by the noble Lord, Lord Passfield, and his disciples—perhaps in many ways an even less digestible meal. It has been alleged by these former advocates of public planning—I think it was alleged by the noble Lord, Lord Marley—that these statutory bodies, by taking unemployment benefit out of politics will be infringing the sovereignty of Parliament. They are in fact, of course, not taking unemployment out of politics. They are taking unemployment and unemployment benefit out of local politics, which for a variety of reasons will be exceedingly well rid of them. Full ultimate responsibility still rests where it always has rested, on Parliament. These statutory bodies are in fact examples of that devolution of Parliamentary burdens, with full ultimate retention—admittedly ultimate—of Parliamentary sovereignty, which I venture to think will have to be carried a great deal further in the near future if Parliamentary democracy is to protect itself effectively against what is now perhaps the principal danger threatening it, that is, the possibility that it may break down under the sheer dead weight of its legislative duties.

If the Unemployment Assistance Board is perhaps in a sense the most far-sighted and significant mechanism under Part II of this Bill—a mechanism, which, as I have tried to show, noble Lords opposite ought to be the first to welcome—there is another provision to which for immediate and human reasons I have no doubt your Lordships will extend a much warmer welcome. Four millions approximately of those whom all previous Governments, including unfortunately the late Labour Government, had to leave out of the insurance system, are at last to be released from the stigma and the rigours of the Poor Law. I have never been able to understand, seeing that among all Parties it has been agreed that it would be intolerable if, let us say, an unemployed miner had no recourse save to the Poor Law, on what principle it should be tolerable that an unemployed agricultural worker should have no recourse save to the Poor Law.

As I have every reason to remember from having worked for a good many years in close contact with a local Labour Party in a semi-agricultural area, the late Labour Minister of Health, who is nowadays repeatedly denouncing the means test, was responsible for a circular—No. 1069—in January, 1930, in which he insisted upon the means test being rigorously applied to the agricultural and other unemployed uninsured workers who then had nothing save the Poor Law between them and destitution. The noble Lord, Lord Marley, and many speakers on behalf of the Labour Opposition in the country, have shown themselves very movingly sensitive to the distress among the unemployed during the last two and a half years. That sensitiveness, we must all admit, does infinite credit to their hearts. When, however, one recalls what comparatively little attention members of the Opposition have devoted to distress among unemployed agricultural workers, for example, who possess neither a powerful trade union nor a wellorganised vote, one cannot help sometimes wondering whether that sensitiveness does not in some ways do equal credit to their heads.

It is a matter, I am sure, of the greatest satisfaction to your Lordships that this Bill holds out hope that in the very near future the agricultural worker will be included in the insurance scheme. But in the meantime your Lordships will undoubtedly welcome the provision by which he is taken straight into Part II of this Bill. Indeed, it is just possible, if the optimistic estimates of the generosity with which Part II is to be administered prove to be correct, that there may in the near future be a marked decline in the anxiety of the agricultural worker to be admitted to the insurance system. He may be tempted to rest content with enjoying the privileges of Part II without shouldering the corresponding obligations of Part I. For myself I hope that that will not be so. What has been wrong with the agricultural worker in the past has been that not only his economic status but his social status has been unfairly depressed. Society has permitted and even, as it seemed, almost encouraged him, to suffer from an inferiority complex, as One to whom ordinary industrial standards could never apply. Therefore I for my part very much hope that agriculture will shortly be brought in—no doubt with necessary modifications—under Part I, as well as under Part II of this Bill.

I now come to the last point on which I shall venture to detain your Lordships. This Bill, if your Lordships approve it, will come into force within a few days of the twenty-second anniversary of the first Unemployment Insurance Act, the world's first scheme of compulsory insurance against unemployment. In those not very distant days contributions were but 2d. each for both employer and employed, only 2,250,000 persons were insured, and benefits, which were of short duration and hedged about with a whole zareba of restrictions, were only 7s. per week. To-day 13,000,000 persons are insured, and though contributions are five times as high, insurance status is eagerly, and sometimes even fraudulently, sought for. Average benefit rates for a man are three times as high as they were in 1912.

When children's allowances are taken into account the rates of benefit, and indeed probably of the new relief, will rise well above the lower wage levels of fully employed persons. I trust that the noble Lord, Lord Marley, and noble Lords opposite, will recognise that whatever other shortcomings they may find in these provisions, they do show a courageous disregard of the classic warning administered by the distinguished origin of so much Socialist doctrine, Mrs. Sidney Webb, who, as your Lordships are probably very well aware, prophesied, to use her own words, that— If anything like the same sum that an employer pays could be got by attending daily to sign at the employment exchange, there certainly would be what she did not hesitate to describe as a ruinous increase in voluntary unemployment. I would not myself accept that pessimistic prophecy, any more than I would accept the too cynical comment of the foreign observer who said that "you can have as much unemployment as you choose to pay for." I think that both Mrs. Sidney Webb and the foreign cynic thought too poorly of the moral fibre of our people, but I do think that noble Lords opposite and the Labour Party in general might not unfairly be reminded of the warning voiced by so distinguished an ornament of their Party as Mrs. Sidney Webb, the source of so much of their own doctrine, and doctrine which we have actually heard voiced here to-night, when they inveigh, as they habitually do inveigh, against the alleged meanness of the present rates of benefit for the unemployed.

And, if I may end on this point, we ought not to let Lord Marley get away with the suggestion that there is nothing to be said on behalf of these rates of benefit except that they are mean, that they are harsh, and that (as I think I heard him say) they will be responsible for hundreds of thousands of deaths. The present rate as it stands to-day at 27s. 3d. represents slightly more purchasing value than did 30s. when the Labour Party was in office in 1930, and the restored 30s. after July 1 of this year will represent an increase of at least 3s. 6d. worth of purchasing power on the rate allowed in times of greater prosperity by the Party on behalf of which the noble Lord is speaking. Moreover, the present rate as it stands to-day, even before these unworthy (as the noble Lord thinks them) additions proposed by this Bill are made, not only represents about 6s. more purchasing power, but actually stand at a higher cash level than did the rate in 1924 when the Labour Government was in office. The year 1924 was not, as the last two-and-a-half years have been, the trough of an unexampled economic depression. As the withering blasts of righteous indignation to which the noble Lord has treated us play upon the present rates of benefit, your Lordships will do well to remember that they proceed from persons who afforded consistent and indeed enthusiastic public support to a Government which in much more prosperous times accorded to the unemployed distinctly lower rates of benefit.

The noble Lord, Lord Marley, was most pessimistic as to the future of the health of the people of this country. He spoke of their being hundreds of thousands of deaths. He gave us some very interesting and some very moving figures, culled from researches by Dr. Somerville Hastings, the former Labour Member for Reading, and the Committee on Malnutrition. I do not propose to follow him into those suggestions, but I should just like to say that I think there are many of your Lordships who will be more optimistic about the future course of events in this country and who will prefer to base their prophecies—for they can only be prophecies, whether they are the holocausts which Lord Marley foresees or whether they are the happenings which I should prefer to foresee myself—upon, shall we say, statistics published last September by the Chief Medical Officer of Health, Sir George Newman. As your Lordships may remember, he told us that during 1932 in the period of the deepest depression the two most characteristic tests of malnutrition, infantile mortality and deaths from tuberculosis, had not only both decreased but were the lowest on record, and he proceeded to compare the figures in two large groups of industrial areas, one with a heavy and the other with a light incidence of unemployment.

I am not a doctor and I cannot pretend to justify or to criticise it, but the result at which he arrived was, as your Lordships will no doubt recall, that not only were the mortality and other rates in the bad area not inferior to those in the good area, but on the average the improvement in the area where the incidence of unemployment was heavy was actually greater than in the area where it was light. I do not suggest that that is necessarily typical, although it was given by the Chief Medical Officer of Health, who is not a Party man, as typical of the year 1932. I know how easy it is for noble Lords opposite to tell us that we are hard-hearted if we refer to any statistics which do not suggest that this country is on its last legs and that its people are doomed to something which sounds like an early extinction, as they obviously must be, if the statistics which the noble Lord flung out are to be accepted.

I only suggest that there is ground for optimism, and that at any rate a Bill which so conspicuously increases the generosity with which benefit rates are administered is perhaps not the best occasion on which to treat us to a speech 75 per cent. of which was a description of the awful results of malnutrition, which undoubtedly exist, which have existed under all Governments, and which we hope this Bill is likely to decrease. The Minister of Labour in the last Labour Administration—it falls rather strangely on our ears now, but it was spoken when the Labour Party was in office—said that unemployment insurance. was "not a matter of Party politics." This Bill seems to me not so much a non-Party measure as an all-Party measure, and I hope that everyone of your Lordships who believe that national co-operation is preferable to Party conflict will give it his support.


My Lords, I beg to, move that the debate be now adjourned.

Moved, That the debate be now adjourned.—(Earl Buxton.)

On Question, Motion agreed to, and debate adjourned accordingly.