HL Deb 03 April 1940 vol 116 cc40-8

5.30 p.m.


My Lords, I beg to move that the Special Order, as reported from the Special Orders Com- mittee yesterday, be approved. Perhaps in doing so I ought to bring a few points before your Lordships very briefly in regard to the Report which that Committee made. The Report of the Statutory Committee on Unemployment Insurance shows that, owing to the improvement in employment generally, income has exceeded expenditure by over £16,500,000 in the year ended December 31 last. At the same date the net balance in the Fund was £57,500,000, while the debt on the Fund was £77,000,000, the rate of interest payable on the debt being 3⅛ per cent. The improvement in the Unemployment Insurance account is largely due to increased employment owing to Defence expenditure, and they say this: It appears to us to be certain as any prophecy can be that the end of the present war will be followed, as the end of the last war was, by severe unemployment. That being so, they do not feel justified in spending the large amount of balance which has been collected last year and during previous years in increasing benefits and doing other things, such as the reduction of contributions and so on, which would reduce the amount of the Fund and swallow up a good deal of the balance which had gradually been piling up. They recommend, therefore, that part of the accumulated balance should be used to reduce the debt and advise the allocation of £37,000,000 to that end. That would leave £20,000,000 in the balance of the Fund, and £40,000,000 of debt as against the present £77,000,000.

This reduction of debt will mean a saving of £1,100,000 per annum, and the Committee recommend that the saving should he used to improve the rate of benefit in respect of the first two children of unemployed people by increasing the benefit by one shilling a week as from the 15th of the present month. His Majesty's Government accept the recommendations which have been made by the Committee, and propose to put the recommendations into operation. It is not necessary to get an affirmative Resolution from your Lordships' House in regard to the repayment of debt, but it is necessary to get an affirmative Resolution in regard to improving the benefits for the first two dependent children. Your Lordships will therefore see from paragraph 2 of the Draft Order that that is the matter which comes before the House to-day. As regards the agricultural part of the scheme, a similar im- provement is made in regard to the first two dependent children. That also comes under paragraph 2. What is, however, required, to come before your Lordships for affirmative Resolution in this connection is that there was a ceiling to the benefit that could be paid to agricultural workers in the past. That was 33s. a week, and it is now proposed to raise it to 35s. The agricultural scheme had an excess of income over expenditure last year of £600,000, with an accumulated net balance of just under £3,400,000.

Your Lordships will see from the Report that the Committee state there are some 50 per cent. of the unemployed in the agricultural industry who do not fall under the insurance fund, and inquiries are being made as to how that happens. I imagine it is probably the case that a large number of men who were not in any special employment put themselves down as agricultural workers, although in fact they only do a certain amount of casual work at the time of the harvest. We shall know more about that when the Committee have inquired into it. I do not think I need say any more, but if any noble Lord raises any point I shall do my best to meet it. Meanwhile I ask your Lordships to give approval to this Draft Order.

Moved, That the Special Order, as reported from the Special Orders Committee yesterday, be approved.—(Earl Stanhope.)

5.35 p.m.


My Lords, my noble friends and I can only approve of one part of this Motion by the Government, and that is giving an extra one shilling per week to the unemployed man for the first two children of his family. We do not want to delay the Order, and that is the attitude taken by my right honourable friends and honourable friends in another place. I understand it is proposed to begin paying this extra shilling about the middle of this month. But with regard to the way the very large surplus is to be disposed of, and indeed the findings of the Committee, we have some observations to make of a critical nature. Your Lordships will have heard the noble Earl quoting the opinion of the Beveridge Committee, as I may call it, with regard to the future course of unemployment during the present war.




Also during. We have here the epitomised memorandum issued to the Select Committee on Special Orders in your Lordships' House, and I am quoting from that. I have also refreshed my memory by referring to the Report itself. The remarks to which I wish particularly to draw attention, and which have shocked my noble friends and my Party, are these. First of all, the Report says it is impossible to make any reasonable forecast of the future course of unemployment. That is an extraordinary statement to make in the middle of this war. The Government have again and again assured us all would be well. On the last occasion particularly, Lord Templemore said it was true there have been delays in taking up the slack of unemployment, but before long every man willing and able to work would be in full employment, and there would be a shortage of labour. Those were the comfortable words that Lord Templemore had to say to your Lordships, while in another place the Minister of Labour always paints the rosiest picture of what is going to happen to-morrow and the day after to-morrow. Now we find the Statutory Committee on Unemployment Insurance—a very distinguished body under the Chairmanship of Sir William Beveridge—declaring they cannot make any reasonable forecast of the future course of unemployment. That is point number one.

The second thing is even more shocking to my noble friends, and that is that the Committee say it is certain as any prophecy can be that the end of the present war will be followed, as the end of the last war was, by severe unemployment. Surely we have learned something from the events following the Armistice which closed the last Great War? That statement must, of course, have been made after all available information had been obtained from the Government, and it seems to me to reek of defeatism—not defeatism in war, but defeatism on the Home Front. We declare that it is the Government's business now to have the best available talent hard at work devising schemes to prevent the dislocation which this Committee advise is bound to happen after the war, and to prevent this heavy unemployment, and we must make our protest on this occasion against any such doctrine.

That is the preamble. Having questioned the premises on which these proposals are founded, we want also to question the proposals themselves. I regret very much, not for the first time, that we have not got any direct representative of the Trade Union Congress in your Lordships' House. I always think organised labour should be represented in your Lordships' House; but I will do my best to state very briefly their point of view with regard to this large surplus which has accumulated. It is mentioned briefly in the Report, and it should have been received with more attention and sympathy. They hold that in spite of the Government and their bad organisation, the incidence of war—as regards war work and so forth—is bound to reduce unemployment, and therefore the surplus in the Fund will increase. Therefore it would be desirable to give greater concessions now to the remaining unemployed, particularly in view of the rising cost of living. First of all, they recommend that there should be an all-round improvement of benefits. The proposals they made would, I understand, cost about £6,000,000 a year. We are aware that this would mean legislation with the law as it is at present. The debt has to be paid off, and indeed the Committee of your Lordships have found that this Order is intra vires. That is one proposal. They wish particularly to have the three-day waiting period abolished, which would cost about £5,000,000 a year, and there are certain anomalies in the regulations for married women with good industrial records which they would like to see revised.

Those were the Trade Union Congress proposals, and I notice that in the Report of the Statutory Committee one of the members, Mr. G. W. Thomson, in a note of reservation, supported two of the suggestions of the Trade Union Congress. We regret very much that these proposals of the Trade Union Congress, which are supported by the Labour Party as a whole, were not adopted, and that, in effect, the Chancellor of the Exchequer has seized upon this large surplus of money for the reduction of the debt. We think that the occasion should have been taken to improve the benefits all round in the way I have described. I felt bound, on behalf of my noble friends of the Party for which I speak in your Lord- ships' House, to make that protest, but we do not wish to delay the passage of the Order, because at any rate the 1s. a week for the first two children is helpful, and we are only sorry it does not apply to all the children of the unemployed men.

5.43 p.m.


My Lords, the noble Lord opposite quoted the précis which was laid before the Special Orders Committee, but he only quoted half the sentence when he stated that the Committee say it is impossible to make any reasonable forecast of the future course of unemployment. The noble Lord did not even stop at a comma, but missed out the rest of the sentence which shows that they were referring to what was likely to happen at the conclusion of the war.


I meant that.


The noble Lord made that as a second point, but he said it was an amazing thing that they should not have been able to say what the course of employment would be during the war. What they did say was that taking the war and afterwards it was impossible to say what employment there would be. The noble Lord and I differ on a great many subjects, but the other day he surprised me somewhat by a remark he made. I suggested that there was a considerable amount of unemployment clue to the war beginning, and he suggested that we were much too quick in making the change-over and in causing people to discharge those who were working for them. That is exactly what is likely to happen at the end of the war. The moment the war ceases the output of munitions of all sorts and kinds will come to an end as rapidly as possible. Practically in every case contracts contain a "break" clause, and those working with such a clause will at once cease to manufacture. People then have to take up their ordinary peace-time occupations and fulfill peace-time requirements. But who can say what we shall be able to afford at the end of the war? It will depend how long the war goes on and to what extent taxes increase. Motor cars and other things which employ a great deal of labour may not be required to any extent by the general public for the simple reason that they may not be able to afford them.

If one thing has come out clearly in the situation of the world as a whole I should have thought it was that employment found by the State never takes the place of employment which is found to meet the requirements of private individuals. That, I know, is directly contrary to the view of many members of the Socialist Party, but you have only to look and see what has happened in the United States of America to find confirmation of it. There, I understand, the policy of what is called out there "priming the pump" has been used to a gigantic extent, and they have piled up debt in that country to an extent which we in ordinary peace-time conditions would regard as being quite beyond our reach. Yet the fact remains that they have in the United States of America a vast amount of unemployment in spite of all that has been done by the State to try and reduce it and indeed to try and abolish it. Very little effect seems to have been produced as a result of all their efforts. Therefore when the noble Lord opposite expects this Government, or any Government, to be able to find plans by which the whole of those now employed in making munitions will find work to do and the wages which they can get in any ordinary State employment by making roads and doing work of that kind, he has only to look and see what is the result of the experience of other countries to realise how small a contribution such work makes towards the reduction of unemployment. Therefore when the Commissioners, who after all have amongst them several distinguished economists whose views must carry weight, themselves make the remark that has been referred to, I do not think the Government are unjustified in taking a similar view.

I am sorry to hear the noble Lord make one statement which I did not expect from him, because I am quite certain he knows a great deal too much really to take it seriously. He said something about the Chancellor of the Exchequer seizing this balance. He knows well that this reduction of the debt is not going to have the smallest effect upon the future Budget, or indeed, upon any Budget. The money is transferred from the Minister to the Debt Commissioners, and remains in their hands. If they find that these particular investments are not such as they desire to hold and they sell them, they are compelled to buy investments to an equivalent amount. Therefore this is not a hen roost which can be robbed by the Chancellor of the Exchequer, nor is it a windfall which falls into his open hands in order to help his Budget in the future twelve months.

I do not think I need go into the question the noble Lord raised regarding the benefits that the Trade Union Congress desire. We would all like, of course, to improve the benefits, but to pile up the expenditure on the Fund at a moment like this, and then possibly have to reduce it again at the conclusion of the war, would be an extraordinarily unwise policy and one which those who have the labour interest most at heart, as many of your Lordships in this House have, would feel was undesirable and not one to be followed. The noble Lord mentioned the case of the married woman. That of course is not an insurance case at all. When a woman who was in employment and gradually accumulating contributions to the unemployment fund, married, what happened in a good many cases was this. She had not the smallest intention of going back into employment. She took up household duties, and, we hope, had a family, but she thereupon proceeded to draw insurance as an unemployed person. That was not the intention of the Fund at all, and eventually legislation was passed to prevent it happening. Now, in order to draw insurance, she has to show that she is definitely, in spite of her marriage, going back into employment and that, in spite of her efforts to get work after her marriage, she has been unable to do so. Therefore this particular point is not an insurance point at all, and no doubt it was for that reason the one member of the Commission who supported the other two recommendations did not support that one. I think I have sufficiently met the noble Lord's arguments. I do not suppose I have persuaded him, but I hope I have made him realise that there is another point of view and one which must be given full weight.


My Lords, may I by leave of the House thank the noble Earl for the very full explanation he has given of the Order? I entirely agree that under the present system of capitalism we cannot solve the problem of post-war un-employment. That can only be done under Socialism.


Or in Russia.


It has been done there all right.