DRAFT UNEMPLOYMENT INSUR ANCE (INCREASE OF BENEFIT IN RESPECT OF DEPENDENT CHILDREN) ORDER, 1935. (Hansard, 24 October 1935)

§ THE PAYMASTER-GENERAL (LORD ROCHESTER)
My Lords, I beg to move, with reference to the Draft Unemployment Insurance (Increase of Benefit in respect of Dependent Children) Order, that the Draft Order as reported from the Special Orders Committee be approved. Your Lordships will perhaps recall that one of the measures taken in 1188 1934 to put the scheme of unemployment insurance on a sound actuarial basis was the establishment of an independent Committee, known as the Unemployment Insurance Statutory Committee, to give advice and assistance to the Minister in connection with the discharge of his functions under the Acts and in particular to advise him as to the state of the scheme's finances. One of the duties of the Statutory Committee is to make a Report to the Minister when they find that the Unemployment Insurance Fund is, and is likely to continue to be, more than reasonably sufficient to discharge its liabilities and upon making such a Report to recommend such changes in the scheme of unemployment insurance as will restore the Fund to a condition of equilibrium.
The Act also provides that if within the period of two months after the receipt by the Minister of any Report on the financial condition of the Fund or, if Parliament is not sitting at the expiration of that period, then as soon after the expiration thereof as Parliament sits, the Minister must lay the Report before Parliament together with the Draft of an Order carrying out the Statutory Committee's recommendations or with such amendments as will have substantially the same effect on the financial position of the Unemployment Fund. The Draft Order requires the approval of your Lordships' House by Resolution. These provisions explain the presentation of the Draft Order to your Lordships' House at this juncture. In their Report made on the 4th of July the Statutory Committee find that the Unemployment Fund is, and is likely to continue to be, more than reasonably sufficient to meet its liabilities. In these circumstances the change which the Committee recommend is that the rate of benefit in respect of dependent children should be raised from 2s. a week to 3s., subject to the proviso that the total benefit to any claimant should not exceed a certain limit for which 41s. a week is suggested. The Committee estimate that this change will increase the expenditure of the Fund by approximately £1,250,000 a year.
The Minister, after consultation with the Treasury, has decided to adopt the Committee's recommendation regarding the increase to 3s. a week in the rate of benefit in respect of dependent children; 1189 but for reasons which are stated in the statement by the Minister which accompanies the Draft Order, he does not propose to adopt the proviso suggested by the Committee. As is there indicated the question of principle involved in this part of the Committee's recommendation is one which requires fuller examination and discussion than is possible in the circumstances in which your Lordships meet on the present occasion.
The Special Orders Committee of your Lordships' House, in their Report upon the Draft Order, have alluded to the fact that the Order does not contain any statement as to the date on which the Order will take effect and have indicated doubt whether the omission of that date from the Draft Order is in accordance with the provisions of the Act. Upon this I must invite your Lordships' attention to the words of subsection (5) of Section 59 of the Act. Acting upon the best advice upon tee matter that it was possible for him to obtain, the Minister has adopted the view that the subsection clearly differentiates between the terms of the Draft Order, which needs the approval of your Lordships' House, and the addition to the Draft Order of the date, which is to appear, not in the Draft Order as submitted to your Lordships, but in the Order itself when it is made after the Draft Order has been approved. Thus your Lordships will recognise that the Act of Parliament does not require that a date should appear in the Draft Order—and, indeed, the insertion of a date might prove embarrassing. I am, however, in a position to inform your Lordships that the Minister intends to bring the Order into operation at the earliest possible moment and that he proposes to insert the date "31st October next." The effect of this will be that the first payments of unemployment benefit, including the children's allowance at the increased rate, will fall to be made in practically all cases upon the 7th and 8th November.
It may occur to your Lordships that, as the Statutory Committee presented their Report on July 4, it might have been possible to present the Draft Order to your Lordships before Parliament rose early in August. Such a course was not adopted because the questions raised by the Statutory Committee in their Report required more time for their proper consideration than was available before the 1190 end of the Session. As I have indicated, the Act allows two months for such consideration and provides further that, if at the expiration of two months Parliament is not sitting, then the Minister must lay the Report, together with a Draft Order, before Parliament as soon as Parliament sits again. The Draft Order is now before your Lordships' House in accordance with this provision of the Act. This is a measure with the purpose and effect of which we must all be in sympathy, and it is, I venture to suggest, a matter for congratulation that the steps taken by the Government in 1934 to place the Unemployment Insurance Fund upon a sound financial basis should have had as an incidental consequence this welcome improvement in the provisions of the unemployment insurance scheme in respect of dependent children. I beg to move.

§ LORD MARLEY
My Lords, I need hardly say that we on this side of the House welcome this long overdue extra shilling to the children of the unemployed; but we regret deeply the apparent acquiescence of so many people in this country in the continuance of the unemployment which makes this extra shilling necessary. I think the country should bear in mind with much greater resentment the continuation of an unemployment figure of nearly 2,000,000. I hope very much that that fact will be borne in mind in the immediate future, because, until we have dealt with the need for this sort of regulation, the country cannot be satisfied with what is being done. I am not going to claim that this is a bribe to the electors in the forthcoming General Election, though I am bound to say that it must have that appearance in the minds of many people. I am not going to say that, because I understand the administration difficulties, and the difficulties of working out a scheme without endangering the stability of the Fund.
I cannot, however, help thinking that it is a great pity that the Government, in making this proposal, did not take into account the fact that the Statutory Committee, on page 19, made in so many words the suggestion that the higher rate 1191 of children's allowance might be introduced at about the beginning of August, 1935. Now I do not see why, having made that calculation—and the Statutory Committee was in possession of and seised of all the facts—the Government might not have adopted the beginning of August and, though the first actual payment was not made until the 7th of November, have made a back payment to these families who have suffered for so many years. The total cost of this is only £100,000 a month. The calculation of the Statutory Committee was made along the lines that they could afford to pay that money from the beginning of August. That would have been a very small Christmas gift to families whose need is very great: the payment of the accumulataed shillings to these miserable and unhappy children over a period of eight or nine weeks. I still venture to hope, and I appeal to the Minister in charge of this Order, that the Minister may see his way, even though he fixes the date as the 31st October, to make the date of commencement of the payment the earlier date and contribute a small sum as an accumulated back payment towards these people.
With regard to the recommendations of the Statutory Committee that there should be a maximum of forty-one shillings above which the extra shilling should not take effect, I am very glad—and we on these Benches are extremely glad—that the Government have decided not to adopt that recommendation. But there is a species of danger in the statement made by the Government that they have not adopted that upper limit, not because it is palpably unjust in itself, but because they have not had time to consider its implications. I should like an assurance from the Minister that after the Election there will not be a reversion to this miserable forty-one shillings upper limit, by which the larger families, the families with six, seven and eight children, will be deprived of this poor extra shilling.
Finally, let me say that the reasons suggested for this upper limit will be found at the top of page 18 of the Statutory Committee's Report. This is one of the most disgraceful sentences that has appeared in a public document for many years, and I want to draw the attention of the House particularly to the first four lines on the top of page 18, because I hope that we who sit on these 1192 Benches will never forget the meaning of those four lines. Let me read them out: The wages of many unskilled labourers for a full week are now in the neighbourhood of forty shillings; that is to say, very much less than these possible rates of unemployment benefit. What right has the richest country of the world publicly to admit, in a public document, that thousands of our labourers, putting in hours of work which have been denounced by the Ministry of Labour in the recent Annual Report as going up to 90 and 100 hours a week, take home forty shillings as a wage upon which to keep them and their large families? I hope that that fact will be broadcast throughout the Election, as a measure of the disgrace which falls upon a country which, with the enormous wealth available, with the millions of pounds that are poured out whenever there is a new public issue in the City, permits and continues a 40s. wage to labourers who have families to keep.

§ LORD ROCHESTER
My Lords, in reply to the noble Lord opposite, may I point out to him that if any alteration were suggested as to revising the upper limit to which he has referred after the Election, it will be necessary to come to the House again for a new Order, and so he need have no fear of anything happening without having every opportunity of discussing it on the floor of this House. As regards the question of date, I am advised that it is not possible to make it retrospective before the day the Order is made, but I would remind him that he referred to page 19 of the Report and its reference to August 1, and by deduction he will see that it would mean a saving of £300,000 in the three months he referred to. That will go into the surplus and as surplus over and above the reserve it may be utilised in some other way.
He will notice that on page 16 emphasis is placed on the fact that the Trades Union Congress General Council, in addition to the amendments of detail named in the Report, proposed increases of 2s. a week in the rates of benefit to adult men and women generally and an increase of 3s. a week in the benefit for dependent children, whereas the National Confederation of Employers' Organisations a few paragraphs further down suggest reduction of contributions as 1193 having the first claim on any surplus; the cuts in benefit made in 1931 having been restored while the contributions still remain at the higher figure and should therefore be reduced. So it is quite impossible to anticipate at this stage what the Statutory Committee might recommend to the Minister as to the utilisation of any surplus over and above the reserves which they may feel bound to hold in the Fund. He will see therefore that the £300,000 saved will still go into the surplus and it will be open to the Committee to make recommendations, not necessarily for the benefit of dependent children but for the benefit of other contributors, or in the reduction of contributions.