I beg to move, "That the Bill be now read a Second time."
Nineteen months ago trade depression and unemployment began to settle down upon us. It developed in volume and intensity until by the middle of last year over two millions of people were registered as wholly unemployed and a million as on short time. During the latter half of last year the gloom fitfully lightened here and there. But the year ended with no sign of any break on a wide front. This year opened with a slender promise of improvement, which has been steadily maintained week by week. As a matter of fact, for the 10 weeks since 10th January to last Monday week the number of persons registered as wholly unemployed has fallen from 1,934,000 to 1,762,000—a welcome reduction of 172,000. In the same period the number of persons claiming benefit as short time workers has fallen from 303,900 to 236,000—another welcome reduction of 67,900. But with the opening of March two grave industrial disputes loomed up. As to these, let me say no word that is not a devout prayer for speedy and equitable settlement.
A year ago long protracted industrial trouble in a great industry profoundly accentuated the depression through which we were passing. To-day industrial trouble would throw us right back into the gloom out of which there are signs that we may be emerging. A year ago industrial trouble rendered more acute and serious the affliction which was then running its course. To-day industrial dispute would disastrously throw back the patient in what, I think, may be the early stages of recovery from that affliction. I most earnestly remind the parties to these disputes of this fact. Surely it must compel them to the resolute determination to secure, and secure as promptly as may be, settlements equitable and durable so that we may take full advantage, and at the earliest moment, of the turn of the tide. The tide is not making yet with anything approaching a definite current, but already here and there the water is creeping back again over the parched sands. That may not indeed be a real tidal movement. It may only be a temporary impetus. But at any rate let us be ready.
During this long and distressing period of unemployment, effort, on a scale out of relation to anything attempted in the past, has been put forward both by the municipalities and the Government—notwithstanding the straitened condition of national finance—to find remedy and palliative. And of this many-sided and continuing endeavour we are here to-day seeking to review and adjust to the necessities of the immediate future the part taken and to be taken by the scheme of insurance against unemployment.
Happily, before the slump came upon us in the fall of 1920, we had widely extended the area covered by the original Insurance Act. We had indeed increased the number of persons covered by insurance from 4 millions to 12 millions. On the other hand, it was unfortunate that, when the Act of 1920 actually came into operation, unemployment was pretty serious, with worse to follow. Therefore, it was quite out of the question to impose upon the 8 millions of newly-insured people the usual condition that a number of contributions paid while in employment must stand to the credit of the claimant for benefit. I was compelled to depart, for the time being from that sound principle and pay benefit in advance of the contributions that will be paid hereafter when prosperity again comes our way, laying down such conditions of eligibility as were possible in the circumstances. In the end, I laid down that 20 weeks' employment since 31st December, 1919, in an occupation rendered insurable by the Act of 1920 should be the first condition to be satisfied. Of course, here as always, and I must emphasise this, the claimant for benefit must foe genuinely seeking employment and unable to obtain it.
Three things have made this policy possible. In the first place, the Unemployment Insurance Scheme, in the period up to November, 1920, had accumulated a fund of 22 millions, owing to good employment during the War, and the relief afforded since the War by the Out-of-Work Donation Scheme. This fund was drawn upon. In the next place, the contributions from employers, employed, and the State have, as a temporary measure, been very substantially increased. Finally, the balance of money not thus provided has been raised by way of loan to be repaid.
These relaxations of the ordinary rules of insurance have been inevitable. But they do impose a serious strain upon the principles upon which the Act is founded. They tend to cause benefit on the uncovenanted side—that is the side with which I am now dealing, the side that covers the cases of so many of those newly-insured in the fall of 1920—to be looked upon rather as a compassionate grant than as an insurance benefit. That fact is very much before me. And in this Act, though compelled to make further provision of uncovenanted benefit, I am trying to make whatever opportunities for employment that may arise as a result of improved trade concomitant with a steady re-establishment of the permanent and true principles of insurance.
This Bill is necessary because unemployment still remains widespread and the provision Parliament has already made is drawing to a close. A year ago we made provision for 44 weeks' emergency or uncovenanted benefit, to cover the period from March, 1921, to June, 1922. For many that will be exhausted on 5th April. Last November we passed a most useful and timely Measure, the Unemployed Workers' Dependants Act, under which, for six months, an addition of 5s. weekly for the wife and 1s. each weekly for the children has been made to the 15s. benefit of the unemployed insured workman. That Act comes to an end on 9th May. In the present Bill I am proposing to keep the insurance benefit at its present level—15s. a week for the man and 12s. a week for the woman. I am proposing to continue the provision of the temporary Dependants Act of last November, thus adding to the 15s. benefit of the man 5s. a week for his wife and 1s. a week for each of the children.
Till June, 1923, when this Measure comes to an end. To do this, the existing rate of contributions from employers, employed persons, and the State, at present payable under both Insurance and Dependants' Acts, must be continued. Further, I must ask for additional borrowing powers. Under this Bill I am providing 15 weeks' benefit up to the end of October. The first payment of half a week will be made on 21st April, 14 days after the last payment of benefit to those who will have exhausted benefit under existing legislation. And, since the 15 weeks' benefit is to cover 30 weeks of the calendar, I am dividing up the 15 weeks into three fives, with a five weeks' gap between each. From November, 1922, to June, 1923, I provide 12 weeks' benefit, with two possible further extensions of five weeks each. That is a provision, following upon the extended periods of benefit already granted since the fall of 1920, which the three-fold contributory system, assisted by large borrowings for the time being, could alone make possible. It is a provision which imposes a heavy burden upon employers, upon employed persons, and upon the State. But it is a provision which we feel bound to ask the House to make, and in asking it, to remember that we have already had 18 months of very grave and continuous unemployment; that trade union out-of-work funds are pretty well exhausted; and that such material resources as unemployed people may have had at the outset of this affliction must by now have disappeared.
I think it right to remind the House also that the provision which has been made and is now contemplated, under this three-fold system of compulsory contribution to an insurance scheme, has, in fact helped hundreds of thousands of men and women, during this long period of distress, to avoid recourse to the guardians and to Poor Law relief. This is not only very much more satisfactory to themselves, but it has enormously relieved the burdens that would otherwise have fallen upon the local rates. These are the main considerations that led us to come down in favour of continuing benefit at its present level, even though that course involves a substantially increased charge upon an already heavily-burdened Exchequer.
My financial calculations in this Bill are based on the assumption that the number of persons wholly unemployed, making due allowance for persons on short time, will not exceed, between now and the end of June, 1,900,000, and will not exceed 1,500,000, on an average over the whole period June, 1922, to June, 1923. These are very cautious assumptions. Of course grave industrial dislocation would upset them, but they are very cautious assumptions, and they would enable me, if necessary, to provide £60,000,000 in benefit during the 15 months from April, 1922, to June, 1923. Of this amount, the employers would furnish rather more than three-eighths, the employed persons rather less than three-eighths, the State about one fourth. The proportion paid by the State under the Insurance Act, of 1920 is one-fifth of the total, and I propose to work back to that proportion when the present emergency is passed. The actual amount of the State contribution during the 15 months will be £14,700,000. That is £5,800,000 more than the State contribution for that period under the existing legislation.
I am here dealing with a period of 15 months. As regards the financial year 1922–23, the Estimates already laid make a provision of £7,610,000 as the State's contribution to the Insurance Fund, and £551,760 to the Dependants Fund, making a total of £8,161,760. I shall therefore have to lay a Supplementary Estimate to cover the further provision that will come in course of payment during the financial year 1922–23 as a result of the provisions of this Bill. It will be presented without delay. My present borrowing powers are £20,000,000. When, last June, I got these £20,000,000 borrowing powers, my assumption was that from June, 1921, to June, 1922, I should have to carry an average of 1¼ million persons wholly unemployed. As a matter of fact, recovery has been so far retarded that the average for the period in question will, so far as can be seen, be somewhere round about 1¾ million persons.
I well remember that, but I did not remember that the right hon. Baronet was quite so precise a prophet as his interruption suggested.
At that time I thought that we might assume an average of half a million persons wholly unemployed during the year from June, 1922, to June, 1923, but here again nearer touch with our prospects makes it manifest that we shall not see an improvement to that extent. As I have already said, therefore, I am basing my calculations for that period on the assumption that we shall have to carry not less than 1½ million persons wholly unemployed, and I am extending my emergency benefit provision accordingly. Further, when a year ago I got borrowing powers to the extent of £20,000,000, I said that I should have exhausted £16,000,000 of these powers in the early months of this year. I have not done so. Indeed, I have exhausted to date about £14,000,000. But, on the other hand, a year ago I thought I saw my way from the peak of £16,000,000 in the early part of this year to such repayments as would leave the debt outstanding at about £14,000,000 at the end of June of this year. Again, the seriousness and persistence of unemployment will prevent any such repayment between now and June. On the contrary, I am afraid I shall have to continue using my borrowing powers, which, on the present level of unemployment, will be exhausted by about the end of June. This is due to the continued gravity of unemployment, and to the further emergency provision which this Bill contemplates.
In order to make this provision, therefore, and to carry it forward to June, 1923—that is to say, 12 months beyond the period for which in the legislation of last year I made the emergency provision—I am compelled to ask in this Bill for an increase of my borrowing powers from £20,000,000 to £30,000,000. I speak of that in the Memorandum to the Bill as an increase of about £11,000,000. That is because a portion of my existing £20,000,000 powers will be transferred to Ireland for the purpose of administering Unemployment Insurance. It means that in all, if the House agrees, I shall have for Great Britain borrowing powers up to £30,000,000. To the extent that I draw upon that, I have got to repay it.
I have in this Bill made every endeavour to grant this new provision of emergency or uncovenanted benefit on lines that shall strictly conserve the available help for those who really deserve and need it. To this end the uncovenanted benefit of the Bill will be granted under the conditions laid down for the recent extension of six weeks. Persons who have paid contributions entitling them to benefit under the permanent provisions of the Acts will not be subject to these conditions. Their rights will be determined in accordance with the conditions laid down in the Unemployment Insurance Act, 1920, and in particular, Sections 7 and 8 of that Act; and of course, as I have already said, all persons seeking benefit, covenanted or uncovenanted, must be really trying to find work and unable to obtain it. I should tell the House, further, that my right hon. Friend the Minister of Health and myself have taken steps to secure co-operation between the local employment committees, the employment exchanges, and the boards of guardians, all these bodies being concerned with the administration of financial assistance to mitigate the hardships of unemployment; and also between these bodies and the various authorities putting in hand relief work of different kinds. I lay it down also in this Bill that the guardians in giving assistance for the relief of distress must take into account the amounts received under this insurance scheme. That is in Clause 12.
Before I leave this important question of conserving our resources for those most in need of assistance, let me say that, undoubtedly, there is a danger that in a long continued depression of the kind we are now undergoing there may be persons who claim benefit without making really serious endeavour to find employment. We are all of us creatures of habit. A long period of enforced idleness is not, with any of us, the best stimulus for the work habit. It is ridiculous to suppose that benefit under this Bill will prevent a man seeking work who has a wife and children dependent upon him. But in the case of young persons who rely on relatives for food and shelter, the position is not quite the same. Unfortunately, the state of trade is such that it is rarely possible in such a case to test alleged inability to find work by offering a vacancy. I wish it were.
This is a matter in which we want the co-operation of employers. I have appealed before, and, because it is of the utmost importance, I take leave to appeal again to employers to send us their vacancies as trade revives, so that, before benefit is paid, we may call the attention of the applicant who says he cannot get work to a vacancy which we know is open. For a long period, of course, vacancies have been few and far between, except in the case of certain women's occupations. There they have been most useful to us. In the year 1921 the Exchanges placed 277,800 women and girls in employment, the separate individuals covered by these placings numbering 230,192. I make this latter point clear, because there has been a disposition in some quarters to pooh pooh this effort, and to suggest that we are quoting a figure which merely means that the same individual has been placed over and over again.
Before I sit down I must say a word in regard to the relation of the present proposals to any permanent scheme of unemployment insurance for the future. The object of this Bill is to deal with the situation arising in the period up to July, 1923. As far as possible, therefore, no changes are proposed which may hamper freedom of action in considering any permanent changes in the scheme which may hereafter be thought to be desirable. The recommendations of the Committee on National Expenditure, for instance, suggested, firstly, an investigation of the machinery of the present scheme; and, secondly, an examination of the possibility of extending the system of unemployment insurance by industries.
The possibility of effecting economies in the machinery of the present scheme by joint arrangements with the Health Insurance Scheme and otherwise is being investigated by a Committee appointed by the Minister of Health and myself, and presided over by the Government Actuary. One of the chief points which this Committee is examining is whether it is practicable to have a single card and a single set of stamps for Health Insurance and Unemployment Insurance, instead of two cards and two sets of stamps as at present. Owing to the complication of the matter immediate action cannot be expected. With regard to the single card, in particular, the Committee have reported that it will not be practicable to bring it into use next July. Should the Committee ultimately devise a scheme which is economical and practicable, I shall welcome it and shall be most glad to consider its adoption.
The other recommendation of the Committee on National Expenditure was as regards Unemployment Insurance by Industries. Section 18 of the Unemployment Insurance Act, 1920, enables industries to set up separate unemployment insurance schemes of their own on certain conditions. For various reasons—not least of which was the great depression in trade—litle advantage was taken of this provision. And owing to the large amount of unemployment benefit paid, and the consequent strain on the Unemployment Fund, it unfortunately became necessary in July last to lay it down that no further special schemes could be approved until the Unemployment Fund again became solvent. No hope can be held out that it will be possible to allow industries to form special schemes until provision is made for the debt of the Fund to be liquidated. Unless such provision is made the National Exchequer would have to make good the deficiency. The depression in trade has been so grave and so widespread that practically all industries have drawn large amounts of benefit out of the Unemployment Fund; and even in the few cases where this is not so it is clearly right that the burden of paying back the money which has been borrowed should be shared by all alike. When it is possible to re-open the door to special schemes without throwing an additional burden on the Exchequer, all practicable steps will most certainly be taken to promote their formation. This time may, unfortunately, be still some way off. But, at any rate, this gives an opportunity of considering with care the lines on which such schemes may best be formed. To that end I sent out on 22nd February a circular letter outlining the problem to all the organisations of employers and employed in the country, and asking for their views as to the best method of solution. It is too early as yet to forecast the results we may obtain from this circular letter. But the number of communications I have received in reply shows that the matter is arousing considerable interest.
In conclusion, in moving the Second Reading of this Measure, which will inevitably place once again a very heavy strain upon the machinery connected with the payment of unemployment benefit, I feel in duty bound to refer once more to the zeal and public spirit with which that machinery is being operated all over the country. The unemployment insurance legislation of the past two years, coupled with the prevailing heavy unemployment, has called for most exceptional efforts on the part both of the staffs of the Employment Exchanges and of the voluntary helpers who, in the Local Employment Committees, have done so much to assist us in the examination of claims to unemployment benefit. Throughout the whole year 1921 there were, at the Exchanges, on the average, week by week, a million and a half persons wholly unemployed claiming unemployment insurance benefit and over half a million claiming benefit as short-time workers. The number of claims to unemployment benefit examined by Local Employment Committees under the emergency provisions represents a tremendous volume of work. As Minister of Labour I wish to take this further opportunity of paying my grateful tribute to the signal social service rendered during this long period of depression both by the Local Employment Committees and the Exchange staffs.
I ought first to say, lest there should be any natural criticism as to the absence of many of my colleagues, that it is due to a meeting specially convened for a very useful purpose and it is with no desire either to ignore or not to be present at this most important Debate.
Something that would contribute to what we are dealing with would be. I am aware, whilst agreeing with the tone and temper of the right hon. Gentleman's speech, there is no section of the House which can get any satisfaction out of it. Whether it is viewed from the standpoint of finance or the burden to the country or to the insured persons who contribute, certainly they cannot be satisfied. But the most terrible side of the statement, and one which this House would do well to contemplate is that the most optimistic statement the right hon. Gentleman can make, the only consolation he can give us, with all the advisers and experts at his disposal, is that he cannot contemplate anything better than 1,500,000 unemployed for the next 15 months. It is very difficult for this House to put itself in a position even to gauge exactly what that means. The figures at the moment are nearly 2,000,000. It is true to say that at least 30 or 40 per cent. of that 2,000,000 men and women have already exhausted their first period of unemployment benefit, in addition to which their savings have gone and their trade union benefit is exhausted. That is their position and the best we can hope from all the expert advice is at least another 15 months for 1,500,000. Whatever Debates there may be on economic or political subjects which may excite or interest this House, there is nothing that ought to interest us and bring home to us the awful tragedy of our people more than the statement we have heard.
The right hon. Gentleman expressed the hope that the unfortunate dispute now taking place would not be extended. I want to say no word, and I hope no one will say a word which will widen the breach, because I do not believe the best way to settle a dispute is to widen it. I am not one of those who believe that the easiest way to get over a difficulty is to make it more difficult, and therefore I hope nothing will be said in this Debate to render the task of those who are striving for an honourable peace more difficult. But having said that, I do ask the House to fully understand how, if the dispute continues, or even if it does unfortunately develop, that under this Bill with which we are now dealing—and this Bill is an extension of an existing Act—we are not only doing an injustice, but we are depriving hundreds of thousands of people of what they believe to be their legitimate benefit. I want the right hon. Gentleman to follow me. Forget, if you can, the merits of the dispute on either side. Forget, if you like, whether the employers are to blame or the workers. Leave that entirely out; but remember that at this moment there are many thousands who are thrown out of work in consequence of the dispute and who are not parties to it. Whoever is to blame for it, they are not to blame. I do not care which side you take on the merits of the dispute, but please remember there are many thousands who are already thrown out of work and who are no parties to this dispute, but who are out of work because of the dispute, and if the lock-out notices are to have effect a week from to-day, you will find that there are in this situation at least 600,000 people who are not direct parties to the dispute. The unfortunate part of the Act is this, that it has been held that if the dispute is in a particular department which is affected, that the men and women who are not parties to the dispute are not to receive the benefit of Unemployment Insurance, which means that in the dispute now taking place all those people who are not parties to it, but by the particular nature of things are in the same department, are automatically thrown out of work and deprived, not only of the benefits of this Act, but of the benefits to which they have contributed and paid for. My right hon. Friend said on the last occasion he dealt with this subject, "Will you join with us in finding some formula to deal with it?"
That shows the difficulty of the situation. You are compulsorily insured, whether you like it or not, and you say to the employer: "You must pay for this employé," and the employer and employé both having paid, neither of them being parties to the dispute, but because of this interpretation of the Act, immediately the man becomes entitled to the benefit he thought he was paying for, you deprive him of it. All I can say is that my right hon. Friend did leave the impression on many of us that he recognised the difficulty and was anxious to find a remedy for it, and to find words to meet it. But the point I am making is, first, the particular connection and application of this matter to the unfortunate dispute now pending and which creates a tremendous injustice to hundreds of thousands of people. By the amending Bill with which we are dealing it is not remedied in the least. I put it to my right hon. Friend that that must create a serious state of affairs, for this reason. The men I am now dealing with, hundreds of thousands of them, have been subjected within the last six months to a heavy reduction in wages. Large numbers, again, have been on short time, and you may take it as an absolute fact that the resources of the homes are very limited. Now, when you throw these men, as they will be thrown, out of work and then deprive them absolutely of their benefit, what is the alternative? The alternative is immediately to go on to the Poor Law. There is nothing which irritates our people, there is nothing which demoralises our people more, and there is nothing our workers resent more than pauper relief, especially when, as I have indicated, and as has been admitted here, they are being driven to that resource because you deprive them of the very thing to which they are entitled. That is not only a serious state of affairs, but one that should immediately be remedied.
But, again, in this same Bill, in another form, you are dealing with juveniles in the same way. My right hon. Friend says, "Please remember that we are preventing young boys receiving this benefit when, as a matter of fact, they are under the guardianship of their parents." Yes, that is true and no one wants to have any unemployment insurance benefit paid in such a way that it would be a direct temptation not to work. We admit the point. We do not want that at all. But do not let the House assume that the phrase the right hon. Gentleman has uttered gets over the difficulty, because what he has actually done is this: Please remember when you talk about stopping benefit that you are stopping something for which the people are paying; you do not put any limitation so far as age is concerned in the payment, but having compelled people to pay you deprive them of the benefit. Let me give you a case. Under the Circular No. 505c, supposing a young man is single and living with his parents, you say he is not to be entitled to benefit although, mark you, he has paid.
You may take the case in which he does pay first. What happens? The Circular says:
Benefit for the further period of six weeks should not be recommended in the case of a juvenile living with his or her parents or other relatives or who is assisted or may reasonably expect to be assisted during unemployment by his parents or other relatives.
Let me first deal with the point you make that you have taken the necessary steps to prevent single men living with their parents receiving the benefit. It is true you have done that, but you have done two injustices by it. In the Act of Parliament you made no restriction upon those paying into the fund. Supposing there is a father, and supposing in the home there are three brothers, all working and all single but all unemployed, and the father out of work as well. Under these instructions, you can deprive the whole of these boys of the benefit, although the father is himself out of work and unable to discharge his responsibility. I ask is that fair? That is exactly what this Circular not only has done but was intended to do, because the definition of "parents" in this Bill only means parents if they were in a position to do it. As a matter of fact, in practice the parents can themselves be out of work and yet by this Circular you have prevented the workmen having unemployed benefit.
Generally speaking, of course, we shall not vote against the Second Reading of this Bill. We will not vote against it because, with 1,900,000 already out of work—people for whom, unfortunately, this sum of money is the only source of income—we not only feel that we cannot vote against it, but we feel that no Member of this House ought to vote against it. But, in saying that, we re-affirm our protest against this method of dealing with the unemployed. Doles, unemployment grants or unemployment insurance is not the solution. No one can recognise that more than those who sit upon these benches. We had an illustration of the Government schemes this afternoon in the Ministry of Transport sanctioning a road scheme. The clear intention of that was not for the purpose of giving the contractor the benefit of a contract, but to provide work for the unemployed. In the case stated this afternoon, of which more will be heard, that certainly has not been fulfilled. I am trying to apply common sense to the situation. It may be I am not succeeding, but I cannot help that. In any case, I am not putting it unfairly when I say that these schemes were propounded with the clear intention of providing work for unemployed people. If it had been a business proposition, it would not have been put forward in the way it was. It was meant to deal with an emergency in a special way. All I have to say, in conclusion, is that I do ask the House to again seriously consider the horrible state of affairs as outlined by the right hon. Gentleman. Here is the summer and another winter and another fifteen months, all of which we can visualise, all of which we can picture, of misery and suffering for these people. That, in itself, ought to be the best indication of the gravity of the situation, and should bring home to us that this problem of unemployment cannot be solved by even the change from this bench to the Treasury Bench. I am not so foolish as to believe that. I neither say it inside this House nor outside. It cannot be changed by a mere change of the party sitting on that bench or on this. It cannot be changed by a policy merely adaptable to our own country. It is far deeper, far greater than that. It is an international problem, affecting, not alone this country, but the world as a whole, and if any proof of that be needed, let us take the position of America at this moment. America possesses 34 per cent. of the coal of the world, is a credit country throughout the world, with the dollar at a premium everywhere. It is almost a self-supporting country. All the factors tend to show that America ought to be the best place in the world at the present moment, but there are nearly 6,000,000 unemployed, due obviously to the fact that America wants customers just as we want customers. Therefore, when I say that we cannot alter it by merely transferring from one bench to the other, what I also mean is that we have got to change the policy. In other words, we still hold Versailles responsible for much of the unemployment. That is why we believe that the only—
I not only accept your ruling, but I was attempting not to be called to order for merely suggesting that a change from this side to that would make the difference. I can only say that we give our support to the Second Reading of the Bill, and we hope, in the Committee stage, that some of the injustices I have already pointed out will be rectified. Above all, we recognise, with the right hon. Gentleman, that merely the establishing of unemployment insurance or doles is not a real cure for the great problem.
I beg to move to leave out the word "now," and at the end of the Question to add the words "upon this day six months."
I do not think it is necessary to deal with what the right hon. Member for Derby (Mr. Thomas) has said in his speech. It is difficult indeed to know what his object was in making that speech. We had a long portrayal of the sufferings of the working classes, but I should like to ask what earthly use it is to tell the House again and again that these unfortunate men who are out of work are suffering from grave privations. Indeed, every Member of the House knows perfectly well that they are suffering in this way without being told by the right hon. Gentleman or his colleagues. I believe, too, that every Member of the House would be glad to do everything he could in any way to help these unfortunate men. It is simply wasting the time of the House to endeavour to raise feeling by describing the deprivations of the unemployed again and again.
In essence, this Bill does what the right hon. Member and his colleagues have been recommending the whole time. The policy of the Labour party in dealing with unemployment is this: They say, "In the course of the European War, we spent some £12,000,000,000, involving us in a debt of some £8,000,000,000, and therefore it is perfectly absurd to pretend that having spent £12,000,000,000 we cannot spend, say, another £1,000,000,000 in relieving unemployment in this country, in one way or another." When that point of view of hon. Members of the Labour party is contested, they say, "At any rate, let us borrow money to relieve the sufferings of the unemployed." And that is exactly what the right hon. Gentle-
man is doing. I would like the right hon. Gentleman to remember that this is not the first time we have heard these arguments in the House, and I wish to protest against what may be described in mathematical language as the system of legislation by "infinite series." May I be allowed to quote what I said on No. 3 of this infinite series, in June, last year? We saw at once that each Unemployment Act, as it was passed, was not a complete thing in itself, but one of a series which would continue year by year. The right hon. Gentleman said that anybody could criticise after the event. If I may do so, I would like to remind him that some of us who opposed his previous Bill prophesied before the event. On the Third Reading of that same Bill, to which I have referred, last June, I said:
I hope the House will kick this Bill through into the other place as quickly as possible. We want it kicked there so that there will be room for the next Bill on the subject. As far as I can guess, on the information at present available, we shall have about two more of these Unemployment Insurance Bills before the repeal comes about."—[OFFICIAL REPORT, 28th June, 1921; col. 2023, Vol. 143.]
That is real prophecy. If the right hon. Gentleman requires something further, we objected to these borrowing powers because we knew it was inevitable that the right hon. Gentleman would ask for more in the autumn—which he did—and more again in the spring of this year—which he is doing now. I say it is perfectly useless to go on legislating on these lines, for all series, whether finite or infinite, do have a sum in the end, and the unfortunate taxpayers and people of this country will have to meet the sum whatevery Government happens to be in power when the crash comes. Legislation of this kind, which pretends to deal with the unemployment problem, does not deal with the problem at all. It merely deals with a mitigation of the painful symptoms. Like so many quack remedies, it even, in my opinion, adds to the gravity of the disease. It adds to the gravity of the disease in two ways. In the first place, it takes money out of industry, and taking money out of industry, no matter how hon. Members may argue, does inevitably lead to an increase of unemployment. In the second place—and I hope hon. Members of the Labour party will not accuse me of saying what is cruel or unjust—it prevents the competition
of the man who is out of work against the man who is in work. On the other hand, it may be said by some that the prevention of such competition will be for the good of the man. A little thought will convince hon. Members that it is not good, in the long run, that such competition should not exist.
Consider what it is that causes a man to be unemployed. As far as in me lies I do endeavour to see the problem as a whole, without any desire to further any personal end. Although my view may not appeal to the Labour party, it is, at any rate, a very honest conviction, made with the intention of helping to solve the problem. I am sure that hon. Members of the Labour party will give me credit for that. A man is unemployed for one overriding reason and one reason only; that is that the demand for the product of his labour is insufficient to pay the wage which he demads or which he is obliged to demand under trade union rules. I think we may say that in theory there is a demand for every product of industry at a price. That is to say, if the price can be reduced low enough, there is always to be found a customer for the product somewhere in the world. As the Noble Lord the Member for Hitchin (Lord R. Cecil) says, that may result in a man working a full week and then going home with a wage of practically nothing. That, of course, is the reductio ad absurdum. But I want to impress upon hon. Members why it is that you can only get out of an unemployment crisis in one way—that is to say, the demand for the product of industry must become an effective demand. It can become an effective demand in two ways; either the cost of production in that particular industry may be reduced to such an extent that purchasers who hitherto were frightened off buying by the high price become practical competitors in the market and buy; and the other is that the demand may increase to such an amount that they are willing to pay the existing price. I hope I have made it clear to hon. Members that the argument is that what we need to do is to make the demand for the products of our labour an effective demand instead of an ineffective demand, as it is at present. The Opposition suggests that we should frame our foreign policy in such a way that the foreign demand may become effective, in other words, that we should refrain from depressing the ex- change rates of great customers like Germany by any artificial measures such as those contained in the Versailles Treaty. I agree. I think we are adding immensely to the acuteness of the unemployment problem by insisting upon reparations. We can gain our foreign markets again, we can gain even the German market if the true cost of production in England can be got down to a figure which will make such a demand effective, that is, if the cost of production in England is made less than the cost of production in Germany. If this is so, it will not matter what the exchange rate between the two countries may be, trade will flow to our advantage.
Let me return to the immediate subject of the Bill. I have quoted one or two prophecies that I made on the Floor of the House nearly a year ago, and I am sorry I cannot avoid making a further quotation from what I said on that occasion. In the Act which was brought forward in March, 1921, the actuarial situation was calculated on the basis of an average of 1,000,000 unemployed per week up to July of this year. In June of last year that basis had been changed to an average of 1,250,000 unemployed per week. The Minister of Labour, when asked what was the reason for taking one and a quarter millions as the average number of unemployed for the year ending in July of this year, said that he had referred it to the Government actuary. On further inquiry we got from him the statement that what he had referred to the Government actuary was not an actuarial problem at all, but merely a problem in simple arithmetic. The right hon. Gentleman in effect said to the actuary this: "There is going to be an average of 1¼ million persons unemployed between now and July of next year," and having, by fixing that basis, done the whole of the actuarial work concerned, he asked the Government actuary to calculate what borrowing power would be necessary and what premiums would be required, a calculation which I believe any Board school child of the age of 13 could make quite easily if he had paper and pencil. It certainly was not necessary to get an able gentleman like the Government actuary to work out such a calculation, a calculation based upon a begging of the question by the Minister
of Labour. When that basis was fixed, we who opposed the right hon. Gentleman criticised it as severely as we could. Here is what I said on the Committee stage of that Bill:
The million and a quarter estimated for is certainly nothing more nor less than a guess, and from all the signs of the times an extraordinarily bad guess, too. The whole thing is based on guesses, which have always been bad guesses, upon anticipations which have never been fulfilled. This is going to run him into demanding continual and increasing borrowing powers. We objected to these borrowing powers being asked for, and we object to it still, because we know it is inevitable that the right hon. Gentleman will ask for more in the autumn, and for more again in the spring of next year.
That is our objection to this Bill—that we do not know where this business is to stop. The right hon. Gentleman comes this time and wants further borrowing power. We do not know that he will not come to us again in about three or four months' time with another amending Bill, wanting still further borrowing powers in order to pay still higher benefits. It may be said that it is very easy to bring destructive criticism against a Measure of this sort, and I admit that that is an accusation which the right hon. Gentleman is entitled to make. My trouble in combating a criticism of that sort is that the people of this country and the Members of this House have been reduced to a state of emotional sloppiness which baffles description. Starting from about 1906, by proposing a policy which I think we may properly term the policy of 9d. for 4d., the Prime Minister has set himself to work, like all demagogues in history, to produce a state of emotional sloppiness so that he could get people to give him the necessary votes for a continuance of that policy and an increase of it as time went on. I congratulate the Minister for Labour above all his colleagues. He has really understood the Prime Minister's policy to the fullest extent and has done his level best to carry it out. In this particular instance what he has done is this: Up to the present he has passed, I think, four Measures, and is about to pass a fifth, and presumably, if he remains in Office, he will pass three or four more, and all these Measures are devoted to the fulfilment of a remarkable piece of policy originally designed by the Prime Minister.
That policy is this: "Let us give the people from the cradle to the grave various forms of outdoor poor relief, and let us call that outdoor poor relief by another name, so that no man or woman or child may have any shame whatsoever in demanding it as a right." What is this Unemployment Insurance Benefit, so-called, but Poor Law relief, and nothing else? It has been argued by Members of the Labour party that Poor Law relief is a non-contributory thing. The only fault I find with that argument is that it is totally untrue. Every man who receives outdoor relief is contributing, even during the period of relief, through the rates which he pays upon the habitation he occupies. It is, therefore, perfectly absurd to come to us here and to say that there is any difference between this contributory Insurance Scheme and Poor Law relief. They are exactly the same thing. In each case the recipient is contributing or has contributed a portion of the premium. If hon. Members will contemplate the ultimate state of affairs which will arise, they must agree that it is quite time we called a halt. We have already, I understand from the calculations of a very competent man, got more than 50 per cent. of the population in receipt of doles of one sort or another. We are rapidly approaching that Utopia of the Prime Minister—that Utopia in which every child from its cradle to its grave will be provided for at the expense of someone else.
The solution of the problem is, like all solutions of all difficulties, a very unpleasant and difficult thing. The solution is outdoor relief, and nothing else, but outdoor relief, called by its proper name and bearing its full stigma. Men and women being what they are—we Members of this House are very much of the same temper—as long as they can draw money from the taxpayers, which is from the pockets of their neighbours, without any stigma upon them, will continue to draw it. In two connections this policy is wrong. In the first place, it takes away the money, the capital, which would be the source of employment and of fresh wealth production. In the second place, it takes away the stigma which attaches to Poor law relief, by what is a gross piece of pretence, inasmuch as it is really giving Poor Law relief, and nothing else. I ask the House, therefore, seriously to consider whether it is not time that we put an end to this 9d. for 4d. policy which has been the curse of the country for so long. It is degrading, or endeavouring to degrade the whole character of our fellow-citizens, and in company with many other observers I must say it is a matter of extreme surprise and immense satisfaction to find how little effect the Prime Minister's policy has had on the men and women of to-day. I say that for this reason: while the Government policy has in every way hampered the conduct of industry by its interference, and has abstracted from industry that capital which should be a source of constant reproduction of capital and new wealth, while it has hampered in every possible way a recovery of the nation, all the time outside this House men of the working classes have been facing this difficulty, employers have been facing it, and they have been working together, as far as they can, with a bit of "give" here and a bit of "take" there, in sympathy and in friendship, to pull the country out of the appalling position that Government policy has landed it in.
In my own trade reduction after reduction of wages has taken place. There has been hardly a murmur from the men. I know that skilled engineers throughout the country (that is those who are lucky enough to be in work now) are passing through a time of very great privation. But when I go to my men and tell them, "We cannot raise wages for the present," they turn to me always and say, "Well, taking it on the whole we consider that we are very lucky to be in work at all." That is the spirit which throughout the country is pulling us through in spite of what the politicians and the Government say. I think that our outlook, as far as unemployment is concerned, is very much brighter than it has been since the War. For three years we saw the seriousness of this matter accumulating, and we saw the frantic endeavours of the Government, by one device and another, to maintain the standard of living above what the nation could afford. As long as the standard of living was above what the economic situation would allow, I and others with me took an intensely pessimistic view of the future of industry. But now the scene has changed altogether.
The greatest industry, the foundation industry of the country, is at last on an economic basis. The unfortunate colliers of this country are receiving wages equivalent to a standard of living which on the average is very much below the standard of living in 1914. That being so, we know that that great industry is on an economic basis at last. But there is some possibility now of building up a true prosperity instead of the false prosperity of 18 months ago. [HON. MEMBERS: "By the starvation of the people!"] That interruption is typical of the Labour Benches from which it emanates. May I explain to the hon. Members who interrupted that not only have I mingled my blood with that of the colliers in the trenches, but my sweat with theirs at the coal-face for many years? Therefore, when hon. Members suggest that I have no feeling with these men, my comrades in war and in peace, they are suggesting what is not true and what is unworthy of any hon. Member of this House. I take a very optimistic view at the present time. Unhappily, the sufferings of the working classes have not reached their worst point yet. Accumulations of savings, which were made, to a very large extent, in spite of all the accusations of extravagance we have heard, have made it very much better for the workers of the North than anyone would have anticipated up to now. But those savings are exhausted and the immediate prospect before the worker is one of very great privation. At any rate, he has the satisfaction of knowing that all the while, very largely as a result of the very poor standard of living at the present time, prosperity and a better standard of living are becoming nearer and nearer and more and more possible.
May I say one word as to what the employers have done in this connection? It is not the custom for employers to say much about what they are doing, and those who have listened to the representatives of employers of labour in this House are apt to get a very wrong impression of what is going on in the industries of the country outside. Living as I do in a manufacturing district, I know that many employers are devoting at the present time and have devoted during the last 12 months every effort of mind to render the situation a little better for those whom they have the honour to employ; and they have been successful. The employers who have given up a little to help their men, and the men who have faced this appalling situation with such bravery and patience, have between them, not only wiped out much of the bad effect of Government legislation, but have rendered it possible to look forward, in the course perhap6 of two or three years, to a better and happier life for the workers of this country.
I beg to second the Amendment.
I would first like to congratulate the hon. Member for Mossley (Mr. Hopkinson) on the very clear and lucid speech he has delivered. He has dealt with this subject in a sincere manner and I believe he is just as much interested as any hon. Member who supports the Bill in putting an end to this period of unemployment which everyone deplores. A country cannot be happy unless everyone can get work of some sort to do, and even a man who is born with a considerable income finds himself unhappy unless he has some work to do. It is to the benefit of a country that there should be plenty of work at remunerative rates for everyone who wishes to do it. That does not mean that everybody desires work. There are, unfortunately, a considerable number of men and women—and I am not now alluding to any particular class—who, if they can exist without work, will do so. The position in which the country is at the present time seems to be the same as the position in which the country was in 1832 when, following upon the period of the Napoleonic wars, there came a considerable period of depression and unemployment. This resulted in doles, not in the form which the Minister puts forward, but doles in the form of outdoor relief. The country got into such a state and the cost to the ratepayers was so great that the Poor Law of 1832 was brought into operation. It is very unfortunate that some hardship must be inflicted in dealing with this matter, but what we want to do is to endeavour to incite men and women to work, with the knowledge that if they do not work they will find it extremely difficult to keep body and soul together. You have to inculcate that into a great number of people, and once you start these allowances—allowances which are by no manner of means small—you at once create a class of people who would far sooner receive doles of this sort than work. There is no denying that. You also create a class who come forward and, while in receipt of a very considerable sum of money every week, pretend they are unemployed, and in many cases extract from the pockets of the unfortunate taxpayer doles in this form. The only thing one can do in such circumstances is to make oneself very disagreeable. It is the only way. If, when the right hon. Gentleman started with the chief Measure about a year and a half ago, his plan had been successful, if we had tided over that year and a half without the necessity of continuing this system, there might be something to be said for the proposal. Both the hon. Member for Mossley and myself, however, a year and a half ago, said that, at the end of that period, as certainly as we were standing here, another Bill would have to be introduced. I do not claim that I foretold the present industrial position, but what I did was to say that the number of people out of employment would increase as long as these doles were given. We must make up our minds to that fact. We must get back to the old system which operated in 1832 if we want to bring the country back to anything like a state of prosperity. We are never going to create employment by Acts of Parliament or by speeches or by any of the various methods in which the Prime Minister has indulged for the last three or four years. In my election address to the City of London in 1918 I ventured to say we were face to face with a very troublous time, and the only way to meet it was by hard work and economy. That produced a certain amount of criticism from my opponents of the Radical party, who asked me if I had nothing better to say than that, and I replied that I had not. Everyone knows that the Prime Minister had all sorts of ideas about a new world. He thought the old world would never come back again, that all unemployment would be stopped, and all misery finished. The proper thing to have done was to have recognised that the War had put us back by at least a century, and instead of imagining that we were going to be better off, we should have realised that we would have to do everything we could in order to ensure that we were as well off as before the War. The whole plan was misconceived. Unfortunately the Prime Minister succeeded in deluding the people.
I was only pointing out that the policy which led you up to these doles was wrong, but I will not pursue that point. The proper course for the Government now, is certainly not to bring in a Bill of this sort. What is the right hon. Gentleman going to do in June, 1923? I am not going to prophesy that there will be greater unemployment then than now. I hope not, and I am inclined to think it is impossible that there should be, but there will be unemployment as long as the right hon. Gentleman introduces Bills of this sort, and eventually the situation will have to be faced. The right hon. Gentleman will have to be unpopular; he will have to say to people: "If you have not got work, all you can do is to go into the workhouse. Not outdoor relief, but into the workhouse." That is all there is for it. [HON. MEMBERS: "Oh, oh!"]
This is a serious matter. We have to look into this question seriously. We are not here on the election platform. We are here to talk sensibly, and I have said what the right hon. Gentleman will be compelled to do eventually.
The moment we say that, the people will find work for themselves. [HON. MEMBERS: "Where?"] Well, look at the engineers. They can get work now, but they do not choose to take it.
All that sort of thing would stop if the course which I suggest were taken. It all comes back to what I said just now, that the only way to make this country prosperous is by hard work and economy. We cannot expect to have the high wages and the short hours which prevailed during the War. People have got to put their backs into work and to wipe away all these ridiculous trade union rules, and let every man do his best. Unless that is done
there will be no prosperity. The only way to judge of the future is by the past. All this sort of thing has been tried over and over again from the days of Athens and Rome down to the period after the Napoleonic wars, about a century ago. Those are my opinions, and I am certain they are shared by a great number of people who, at the same time, consider them rather unpopular, and on the whole would rather not express them, though agreeing with them. I should like to ask the right hon. Gentleman one question about the Bill. I notice in Clause 1 the words:
Where a person entitled to benefit … has and has had living with him as his wife any female person.
Is that in the old Act? I dare say it was in the old Act, but it is rather extraordinary that we should provide for a man who "has had living with him as his wife any female person." It seems to me to be a provision of a slightly immoral character, and one which I should not have thought likely to secure the approval of the right hon. Gentleman.
I have carried forward here the provisions, generally, for dealing with unemployed workers, with the exception of the small addition of the closing lines of the Sub-section.
I shall not debate it. I hope the country will see this, that while these proposals may tide over an emergency they will not heal the sore. It will be necessary, sooner or later, to take steps which must be unpleasant to a great number of the people who are unfortunately suffering, but the longer we put it off the worse it will be, and the sooner the Government make up their minds to do the unpopular thing, the better it will be for the country and for everybody.
The hon. Member for Mossley (Mr. Hopkinson), who moved this Amendment, and the right hon. Member for the City of London (Sir F. Banbury), who seconded it, may not unfairly be described, I think, as "financial diehards," and I think my right hon. Friend was at all events bowled out of his own ground by the intervention of the hon. Member for Barnard Castle (Mr. Swan), who told him that the cost of maintenance of a person in the workhouse was more than the cost to the State under this Bill, and therefore disposed of that particular argument. I am very glad to know that both the Mover and Seconder of the Amendment have great sympathy with the unemployed, and I welcome their statement that they are as much concerned about workmen getting work as any Member of the House. The hon. Member for Mossley is always interesting, always instructive, and sometimes amusing, although I should think he scarcely intends that, and he was in his usual form this afternoon; but I cannot help thinking that he carried his argument just a little too far even from his own point of view. He is a whole-hogger, and he moved, therefore, the rejection of this Bill, and so far as I can understand him, he moved it on the ground that in order to get work, which we all agree is what we want rather than doles or anything of that kind, you must have the standard of living depressed. His argument is that you must bring down wages until such time as the products of those wages are at such a price as to attract customers, and, secondly, you must do nothing for the unemployed man except to offer him the cold comfort of the Poor Law. I think that is the main argument underlying the hon. Member's speech. It seemed to me that that carried him a little further than he intended, because what follows? If we depress the standard of living below a certain point and offer nothing except the Poor Law, which the most self-respecting of these people will not have, cannot the hon. Member see that we are depressing the individuals' strength to such a point that what is gained on the swings is lost on the roundabouts? It seems to me that the hon. Gentleman, in sticking to his own corner, which is far more suitable to the beginning of the eighteenth century than now, is carrying himself a good deal further than I am sure his kindly nature would like him to go.
Will the right hon. Gentleman carry his own argument to its logical conclusion, which is that if a man has seven or eight meals a day, and big meals at that, he will produce much more than if he only has two?
That is another illustration of the extraordinary mind of the hon. Member. I would remind him that there is moderation in all things. What we want is the greatest production with the greatest possible advantage both to the man himself and to the community, and I suggest that the whole-hog theory of my hon. Friend will not give him that result. I do not, however, rest my case upon arguments and theories. As the hon. Member knows, those ideas of his were tried last century, and failed. During the early days of the last century we had the most miserable poverty we have ever had, poverty which has been described as the most acute poverty, but let me give another illustration. If it were true that low wages were the best means of getting large industries and successful industries, how is it that the low wages of the last century were in the least prosperous trades and the high wages in the most prosperous industries? Take the agricultural industry. Everybody agrees that the agricultural labour was starved by a wage which ultimately produced a man physically and mentally starved, and therefore with low efficiency.
In Scotland you will find that the Army and the Police Forces were largely recruited from the agricultural labourers, but that is not the case with regard to England to anything like the same extent, and the reason is that the agricultural labourer in England was getting 9s. or 10s. per week, and was therefore reduced to a man little worth more than that, while the agricultural labourer in the North has always had his £1 a week, and therefore is a much better man physically and in every way. Let us complete this argument. Let me remind the hon. Member for Mossley that the industries in which labour was well paid found markets all over the world. Right up to the War, and even after, the shipbuilding industry of this country was one of the most prosperous, and, as he knows, not only now but for the last generation the workers in the shipbuilding industry have been the most strongly organised, demanding and obtaining the highest wages possibly of any body of workmen in this country, and, as a consequence of those wages increasing their efficiency, they have built up an industry which has been the marvel and the envy of other people. I might cite the cotton industry, which is more or less the same. The cotton industry for generations has been well organised. Some 95 per cent. at any time in the last 20 or 30 years of the men in the cotton industry have been in their unions, and what has been the result? You have found that trade organised in such a way that the employers and the men met together, that common sense on both sides came on top, and that they conducted the industry on the whole with less stoppages than other industries have suffered. Again, they have arranged their industry in such a way as to be most efficient, and therefore their goods have gone all over the world. Therefore I say to my hon. Friend that in putting these old-fashioned arguments, which, after all, come from old-fashioned economists, he is putting something which will not stand the test of experience. What has been going on in the last few years? The hon. Member has talked about the Insurance Acts in terms of derision, but what should we have done without the Insurance Acts? I suggest to my hon. Friend that, whatever the financial aspects of the case may be, the imponderable results of the benefits from the Insurance Acts are incalculable, and they have saved this country from anarchy during the last few years. For these reasons, I do not at all accept my hon. Friend's arguments in favour of rejecting this Bill.
I come to the speech of my right hon. Friend the Member for Derby (Mr. Thomas). In opening, he commented upon the fact that the Minister had said there was going to be an average of a million and a half of people unemployed as between now and next June twelvemonths, and he commented upon that as being one of the most grave statements he had heard made from that Bench. He also commented upon the distress and upon the fact that the people's resources are getting low. He said they have pawned their things and are therefore not in a position to stand the unemployment strain during the next 15 months as well as they have stood it during the last 15 months. I think he was quite right in calling attention to that, and my hon. Friend the Member for Mossley stated that it was unnecessary to do so, because he felt sure that every Member agreed with what the right hon. Member for Derby had said. I cannot believe however, that the average Member of this House realises to the full the terrible tragedy of this unemployment problem to those who have got to go through it, and when I say those who have got to go through it, I do not mean only these 1,500,000 men. I do not remember a time when the great mass of those who were unemployed have been better looked after than they are now, but I wish to call attention to one section of the community not covered by this Bill, a section which is suffering more acutely than any other section of the community. I mean those who are just above the line of insurance. I mean the men who were getting, perhaps, £300 or £400 a year quite recently. There are thousands of those men now who find that the industries in which they were engaged have collapsed, with the result that they are not in a position to get anything else to do. They are the class of people who, even if they had to starve, would not accept Poor Law relief. They find it very undignified to stand in a line expecting a dole, to which they are not entitled even if they did, by the way. I know some of these men myself. Some of them are men with families, and in order to get along at all they have pawned their effects, they have borrowed money from their friends, they have, in fact, mortgaged their enterprise for the next two or three years, whatever may happen, and I believe that those men are the most acute sufferers at the present time, and likely to be in the next few months. Therefore, while endorsing the proposals made with regard to the great mass of the unemployed, I should be glad if, either in this Bill or some future Bill, some provision could be made for those people. I endorse what has been said by the right hon. Member for Derby that no more grave statement could be made from the Front Bench in this House than the statement that, after all the unemployment we have gone through in the last year and a half, we should still have to look forward to a million and a half of workmen being out of work on an average for the next 15 months.
I want to say a word about another statement made by the Minister of Labour, in regard to insurance by industry. I understood him to say that there was little prospect of anything being done in the way of getting forward with that particular branch of the question for a long time to come—he did not know how long. I attach more importance to that particular aspect of the matter than to any other, because I believe that only in proportion as you can encourage those in industry, by which I mean employers and employed alike, to develop what might be called a corporate pride in their industry, only when you can get them to realise that you will never get the best out of a man unless provision is made for him getting decent security all his life, will you get them to realise the extreme importance of carrying on their industry in such a way that the State will not be burdened by these large numbers of people out of employment in times of trade depression. Therefore I regret that the Minister of Labour has taken up the attitude, that until this money that is now owing to the State can be liquidated, no further step can be taken to get on with this insurance by industry, and I submit to him, that even if it costs the State a little more money to expedite the getting on with these schemes of insurance by industry, I think it would pay the State, having regard to all the facts in the situation. I do not think insurance by industry is in any way incompatible with the present Bill, or any insurance Bill. Provision is made, at all events, by one Clause of the Bill that that can be applied when the time comes. What is necessary at the present time is for workers and employers to get well organised, so that each can speak for their respective side, and, when that is done, get together and try to develop industries, look forward a little as to what is likely to happen, and get on with their industries, so as to avoid unemployment, so far as it is possible to avoid it. There are two matters which were referred to by the right hon. Member for Derby with which I was not in agreement. For instance, he made a great point about the young man deprived of benefit, and considered that that man is suffering an injustice. I do not see any injustice about it.
That is an exception, and there is nothing more alluring to some than to find an exception trotted out as if it applied to the whole mass. There will be exceptional cases of hardship even there, but let us get on commonsense lines. The extension of this benefit was intended to apply to a man who is married and has a family, and therefore 5s. additional was given for the wife and 1s. for the child. That was the basis of the Act so far as I understand it. The Act was not intended to apply to the young man, and if it be necessary to make a provision, the young man getting 15s. a week—many of them live at home, and therefore get shelter and food, sometimes for nothing—is not the extreme case that some would make out. The right hon. Member for Derby made a point with regard to the non-reaping of benefit by the men now involved in the lock-out. After all, those men voted on the question, as I understand, and therefore they are affected by the dispute.
I am glad that this Bill has been brought in, and I think that, on the whole, the Minister of Labour may be congratulated upon having weathered an exceptional storm so far, and upon having brought in a proposal which has the appearance and promise of carrying us through an exceptional period again up to the middle of next year. There is no other Government that has ever done anything like that. I do not say it is enough, or too much, but all I say is that this Bill does reflect a growing volume of social consciousness in this country. We are not living in times when each man's hand is against the other's, but we are beginning to live in a time when it is recognised that the community must have regard, and is having regard, for the poorest amongst us. It is only by that means, and an extension of that means, that we can pick labour up from the low ground of competitive struggle and place it on the higher ground of freedom and justice.
I do not suppose that the Amendment for the rejection of this Bill is to be taken very seriously. It rather indicates a demonstration, and provides an opportunity for those prophecies of the fulfilment of disaster, which gives so much satisfaction to my right hon. Friend the Member for the City of London (Sir F. Banbury). My right hon. Friend took some little credit to himself for the correctness of his prophecy, but I cannot recall to mind, since I have been a Member of this House, any piece of legislation which he did not prophesy would be a failure, if not a disaster. One who always does that, must surely be right sometimes. The mover and seconder of the Amendment did not, of course, offer any alternative, and I was not surprised. My hon. Friend the Member for Mossley (Mr. A. Hopkinson) interrupted the right hon. Member for Derby (Mr. Thomas) to ask what his remedy was, and I had expected he would himself have had one ready for our consideration; but it appeared that all he could suggest was that he would bring down the cost of production when, as he thought, trade would flow in sufficient amount to make it unnecessary to have an Unemployment Insurance Act. I quite agree that you must go on reducing costs when you are in competition to such a point as will enable you to compete successfully with others; but I cannot accept the view that at this moment, if you reduce costs to any figure you like, you can get sufficient trade for the whole population of this country. Upon that point, I would like to say, that while it is undoubtedly a fallacy to suppose that low wages necessarily mean low costs, it is equally a fallacy to maintain that the higher the wages the lower the costs, as is sometimes assumed. What matters is not the rate of wages, but the actual cost of the particular article you are making. That is quite compatible with high wages, but it depends upon a great many other things besides wages.
The Minister of Labour in eulogising—and, I think, justly eulogising—the effects of the Insurance Acts, said that they had prevented thousands of people from making application to the guardians. I wish, very much, I could whole-heartedly endorse that observation, but 1 am afraid it is getting less and less true, and, indeed, it is bound to be so, because nobody pretends that 15s., or £1 a week to a married man, is sufficient to keep him. He must have some income from some other source. That source may have been his savings, but, as his savings become exhausted, he has to look elsewhere, and the result is that you find to-day thousands and thousands of people, who never thought they would have to go to the guardians for relief, who are in receipt of unemployment benefit, but who are also receiving relief from the guardians. That, to my mind, is the terrible tragedy of the situation to-day. It is not that people are starving. At any rate, in my part of the country I have made careful inquiry, and, although one could hardly exaggerate the distress which many people are suffering, yet there is no actual starvation; but there is a degeneration being created in the moral standard of our people, which is going to leave its trace upon them long after this temporary state of things is past. That, to my mind, is a dreadful thing. People who thought they would perish rather than ever go to the guardians for relief are finding everybody is doing it. They themselves resist for a long time, and then they go, and it is unfortunately true, that having once begun on a course of that kind, after a time the repulsion, the loathing, the humiliation which they experience at first, disappears, and they get to accept as an ordinary incident in their lives the receipt of relief from the guardians.
We are beginning to get a sort of interchangeability between unemployment insurance benefit and relief from the guardians. You have a Clause in this Bill repeating a former Clause, that account has to be taken by the guardians of the amount which is being received in unemployment benefit. What is the result of that? The right hon. Member for Derby spoke of a number of people who were likely to be thrown out of employment if the lockout took effect, and he said that many of them were working short time. Why, there are many people who are working short time to-day who are actually worse off than they would be if they were not at work at all. I have had them complain bitterly to me of that very fact. If, therefore, these people are not able to obtain unemployment benefit, as the right hon. Gentleman said, it is not going to be the disaster from the physical point of view, of which he spoke. It does not mean that they are going to be 15s. or £1 a week worse off, but it simply means that they will get their money from the guardians instead of unemployment benefit. That is the answer to the hon. Member for Mossley, who thinks that the proper course is to allow these people to go to the guardians. They would get the same amount of money as they are getting now, and would get the whole of it from the guardians, instead of part from the guardians and part from the unemployment insurance. The result of that would be a greater charge on public funds, and, therefore, if his argument be correct that an increased charge on public funds will add to unemployment, his remedy is going to be worse than the remedy provided by my right hon. Friend. This memorandum states that it is expected something like £60,000,000 may be expended upon benefits in the course of the next 15 months I know my right hon. Friend feels that he has been on the safe side in making that estimate. I hope that that may be so, and that the amount may be less. I cannot say at present I see such signs of revival in trade as would justify any optimism whatever, but if you take it that £60,000,000 is going to be paid out in benefits, then, I think, you must add, possibly, another £60,000,000 to be expended by the guardians in relief during the same period.
What are we going to get for £120,000,000 in the course of the next 15 months? It does seem a lamentable thing that all this money is going to be spent in keeping people in idleness. I have already spoken of the effect it produces upon the people themselves. In these circumstances a good many people are revolving in their minds the question whether there is not some way by which you could, at any rate, get some return for the expenditure, which everybody agrees is necessary in order to keep these people's bodies and souls together, and a certain proposition has been made. It is this. I think my right hon. Friend will know that local authorities have put in hand a certain number of relief works, and they have paid labour on those relief works a rate which has been the subject of a certain amount of controversy. Of course, their official resources are limited. They cannot indefinitely continue to spend money on works of public relief, but if they could have a part of this Unemployment Insurance Benefit made over to them instead of to the workmen they could probably employ a large number of people more upon new works, and this would give them some return in the future, and would cost them so much less, whereas they would not be prepared to undertake the work if they had to pay full rates. Seeing that in many cases it is exactly from the same ratepayers that the guardians obtain their income, you would have what the guardians are now paying paid to men actually doing work, instead of being paid to men who are doing nothing at all.
This scheme has been discussed, particularly in the Midlands, and it has had the warm approval, not only of eminent local authorities there, but also of local labour leaders, who see that atone and the same time you may take a block of people off the Insurance Fund, and these could do for the local authorities' works which would be of solid benefit to them, and would, at the same time, keep up the self-respect of the men who would work upon them. I ask my right hon. Friend whether he has been able to give such consideration to a scheme of that kind as enables him to look favourably upon it. I can understand that this is not the simple question that it may, at first sight, be supposed to be. You have got already a large number of men being employed by the local authorities who are not on the Unemployment Insurance Fund, and it may be argued that they would come automatically upon the Insurance Fund if we started a scheme of this kind. I cannot believe that is a difficulty that cannot be got over. After all, I say, the local authorities have already determined that they will embark upon certain works for which they are prepared to pay the full rate. If they are so prepared and, in addition, will undertake further works on condition that they might make some arrangement of this kind, and take a block of men off the Insurance Fund, surely this is a thing which might, at the same time, benefit the Insurance Fund and help the local authorities? I suggest to my right hon. Friend that this idea is worth following up, and that it would be really an economical proposition if it could be put into operation; that he should have it examined by the experts of his Department with a view of seeing whether some practicable scheme cannot be evolved in the course of the next few months.
I was very glad to hear what the right hon. Gentleman said about the circular which he had issued to certain trades in connection with the question of unemployment insurance by industry. I do not take the view that my right hon. Friend the Member for the Gorbals Division (Mr. G Barnes) did of what the right hon. Gentleman said. I understood that he was pursuing this subject, and although he did not see any possibility of putting it into operation at the moment, still he was exploring the difficulty—because this, again, is not a very simple matter. It is a difficult matter. It is a question of different rates of unemployment in the different industries. You also have the fact that people do not want to be confined to one industry, but to be able to move from one to another, and indeed if it did not have elasticity it would be an uneconomical arrangement to the country generally because in every industry you would have a reservoir which could not be used in other industries and which, therefore, would remain permanently unemployed. That would be very undesirable. You must, therefore, have some method by which you could transfer the surplus of labour in one industry to another; a method by which you could make a proper financial adjustment for the different rates of unemployment which prevail. There are other difficulties, but there is so much to commend this scheme in itself that I hope there also the right hon. Gentleman will lose no opportunity of exploring it to the very utmost.
One great advantage of insurance by industry is that the same people pay the benefit that provide, the employment. Therefore, as they are the same people, it will always be to the interest of those who are concerned in administering the fund to find employment at the earliest possible moment, and so save the contributions to which they are liable. Further than that, I also commend the scheme because I think it is one which brings the employers and employed together. It gets them to work jointly; it has the great merit of bringing them into conference for matters which are not in dispute between them. It is bound to lead to an interchange of information between masters and men as to the state of their industry, and as to the steps that should be taken to make it more prosperous, so relieving unemployment. Those considerations are so weighty in my mind that I do venture to think it is worth while for my right hon. Friend in the time that he has at his disposal to explore some of these difficulties and see whether he cannot find a solution to them.
I want to congratulate the right hon. Gentleman on having retained the very meagre benefit suggested in the Bill before us. It has relieved some of our anxieties, for our impression generally was that there was likely to be a reduction in the relief now being dispensed to the unemployed. I want to add to that my regret that the right hon. Gentleman has not taken advantage of this opportunity to remove several of the inequalities which exist, and which apply to the man who is 90 per cent. of his time out of employment and 10 per cent. in, but who is compelled to contribute to an unemployment fund from which he never benefits. I have had the opportunity more than once of bringing this matter before the right hon. Gentleman, and I have been received with courtesy and sympathy, I did hope, therefore, that, on the introduction of a new Measure, some of the suggestions I have made, and some of the inequalities I have pointed out, would perhaps have been dealt with and removed altogether. The right hon. Gentleman will give me and my colleagues credit that at the introduction of the principle of unemployment insurance we persistently opposed the principle of a contributory Bill. We subsequently accepted it as inevitable. I do not want, if possible, to repeat the arguments I used previously, but I have one or two typical cases which I put before the right hon. Gentleman to show the inequalities and injustices which exist, as affecting at least three-quarters of a million of men who have been included in this legislation, and for which the original legislation was never intended.
Perhaps the House will bear with me, for I must repeat some of my arguments. The principle underlying the system of Unemployment Insurance was based upon the application of Section 2 of the National Health Insurance Act, which only applied to certain scheduled trades which did not afford permanent employment. The men I happen to represent have no employer. They are never employed by any particular person for any length of time. Let me give the right hon. Gentleman a case. Of course we will be met by the argument that under the Act things are infinitely better for the bulk of the men who do receive benefit. No doubt there is some truth in that, but if the right hon. Gentleman had met, as I have, day by day, men who have been harshly dealt with by existing legislation, he will be as convinced as I am that if there were only a few cases some remedy ought to be applied to them. I did expect, when new legislation was introduced, that something would be done to temper down the great injustice that hits the men I mention by the six days' qualifying period. The irony of the whole business, the right hon. Gentleman will recognise, is that the man who is employed by a permanent employer for three weeks out of a month and is idle one week out of the month is described as a short-timer, although he has three weeks' wages and is paid under the Unemployment Insurance Act for the one week he is idle in the month.
What is our case? That the casual labour man has no employer. He is employed by Tom to-day, Dick to-morrow, and Harry the day after. He has never an assured full day. He is employed on Monday morning, and after four hours of employment his services are dispensed with in the afternoon. He goes idle till the Wednesday when, perhaps, he get half a day. He may have a day the following week, and these two days in the two weeks rob him of the benefit, although he has been idle five days in the week previously. The right hon. Gentleman tells me, and, of course, I accept it, that that only disqualifies the man from the second Monday, and that if he is idle the next day it makes up the six days. But supposing he is not. Supposing he is employed one day and idle the next day, he is disqualified again. Take another case, a case I have represented to the right hon. Gentleman, of the man who is idle on the Friday morning of this week, and is idle till Friday afternoon at five o'clock the following week. That is six full working days, and because the man gets four hours' employment after five o'clock on the sixth day the present Regulations disqualify him for the whole of the six days. I contend that he ought to be entitled to four days for that week, but he does not get it because he has been employed for four hours after the end of the sixth working day. I recognise the difficulty of the Minister of Labour because the statutory working day is not eight hours, but 24, and if a man is employed any hour or two hours during the 24 hours, that disqualifies him.
What I have mentioned is no isolated case. These cases come before me every day in the week, and I know the right hon. Gentleman sympathises with them. I admit that the result of my communications with the Minister of Labour has not been altogether unfruitful, because already he has promised investigation, although it is not investigation that I want. I thought the right hon. Gentleman would have removed some of these glaring inequalities, and he must recognise that this machinery was never intended to deal with casual labour. I strongly object to the principle on which the men are dealt with who are idle three days out of each week and have three days' work. Those men have three days' unemployment, and they ought to be scheduled as short-timers just the same as the man who has worked one day out of four.
I want to say quite frankly that I think this system is an unmistakable encouragement to men not to look for work at all. Take the cases I have mentioned. Supposing a particular firm tells a man to come out after five o'clock at the end of six days. If he does not go, he loses his chance of employment; if he goes, he gets perhaps four hours' work, and he is disqualified for the six previous days. I submit that the right hon. Gentleman has a glorious opportunity here, and I intend to move an Amendment during the Committee stage in the direction I have indicated. The trouble is that we are confronted with this fact: The men who really want unemployment benefit, and who deserve it more than anybody else, if they are employed for only one half-day during the week cannot get it, but they have to pay out of their half-day's wage. The hon. Member for Ladywood (Mr. N. Chamberlain) hit the nail on the head in his speech. It is quite true that, as a matter of fact, these qualifications and regulations are costing the country considerably more than the concessions I am asking for. If these men do not get assistance from the Government or from Unemployment Insurance, they gradually drift into the ranks of those who think that they can do better by appealing to the Poor Law, because by that means they get more than they would get under the insurance scheme. Therefore, I hope that the Minister in his reply will give me some hope that there is a chance of dealing with the anomalies I have mentioned.
May I refer shortly to two of the most extraordinary speeches I have ever listened to in this House, the speech of the hon. Member for Mossley (Mr. Hopkinson) and the speech of the right hon. Gentleman the Member for the City of London (Sir F. Banbury). I do not want to hurt the feelings of any hon. Member who has expressed the view that his heart is bleeding for the poor, and I do not want to follow the arguments of the right hon. Baronet the Member for the City of London. On the one hand, as far as the workers are concerned, we have a policy of negation from the hon. Member for Mossley, and the policy of the workhouse from the right hon. Gentleman the Member for the City of London.
The right hon. Baronet has not had much experience in these matters, and he is not justified in recommending the workhouse to anybody. His lot has been pitched in more pleasant places, and if he had had a little more experience of the workhouse, he would be less glib in talking about it. The hon. Member for Mossley said it was hopeless to go on with legislation of this character, because the unfortunate taxpayer would have to pay in the long run. I take this opportunity of seriously suggesting to the hon. Member for Mossley that, if things continue to go on as they are doing, and if something is not done to stop this terrible downward trend of purchasing power, it is just possible that the overburdened taxpayer will no longer be overburdened, because he will have very little money to pay taxes at all, if the people rise up in indignation against this state of things.
The hon. Member for Mossley based his speech on the law of supply and demand, and I never heard in my life a more eloquent denunciation of the failure of private enterprise. The statement he made was that there was no market for the products of the labourer, and, therefore, there would be no demand, and the situation could not be relieved. I am not going to condemn private enterprise for the sake of condemning it, but there are two kinds of demands. In the first place, there is the artificial demand created by the markets; and, in the second place, there is the natural demand created by the people who are hungry and starving. The latter is the demand that appeals to me most, and if private enterprise has failed to meet that demand, that is a lamentable and abject confession of the failure of private enterprise to meet the natural law of supply and demand.
The hon. Member for Mossley and the right hon. Gentleman the Member for the City of London and others have failed to recognise that there is, after all, a real solution of the question of unemployment, if they will only settle down to consider this striking fact that 300,000,000 producers have gone out of production who were our customers. In the aftermath of the War Central Europe and the Balkan States have all gone practically out of production, and is it any wonder that the whole world is suffering from unemployment to-day? The trouble is not local, but international, and when any attempt is made to relieve it—already the murmurs are loud and deep—even the praiseworthy attempt that is being made by the Prime Minister now has been ridiculed all over the country and in this House by his own colleagues.
I am not going to suggest or anticipate what will happen in Genoa, but I do suggest and definitely state and believe that statesmen should have the courage to recognise that the real solution is not lowering wages or reducing the purchasing power of the purchaser to a point that he cannot purchase at all. Increased production depends not upon low wages so much as upon vitality, and if you sap the workers' vitality by reducing his purchasing power to the lowest possible minimum his producing power has got to suffer, and his output will not increase but decrease. For these reasons I recommend the Minister of Labour and every Member of the House and the thinking public to recognise that the real solution of the unemployment problem is an international one, and the ordinary remedy will be to set Europe, Central Europe and the whole of Russia on its feet again so that they will be customers for our produce, and thus find employment for the people who are out of work to-day.
I do not as a rule intervene in Debates of this kind, because, generally speaking, there are at least five-and-twenty Members in this House ready to advocate or criticise whatever proposals are under discussion. On this occasion I think that there will be a very considerable dearth of supporters of my hon. Friend the Member for Mossley, who had the courage to offer a direct negative to this Bill. I wish to say a few words in support of his contentions. I think it requires some courage on the part of a representative of a large democratic constituency to advocate the views put forward by my hon. Friend the Member for Mossley. In the nature of things it is not easy to propose a reduction of unemployment benefit or to take any step which might seem to have an effect which might almost be described as cruel. It is so easy to be vicariously charitable. It is so easy to depict the severe trials which a large number of unfortunate people in this country are obliged to suffer through no fault of their own. It is so easy to paint a picture of misery and misfortune. It is so easy to arouse the sympathies which are latent in every breast for the sufferings of our fellow men. Likewise it is so easy, under the enthusiasm of sympathy of that kind, to vote the money of other people for the alleviation of distress. Anyone can do that and go away home feeling as though he has performed a virtuous action, when, in fact, he has quite vicariously satisfied an emotion by charity which involves no sacrifice whatever on his part. As a matter of fact, whether you call it Unemployment Benefit, or National Housing, or Old Age Pensions, or any one of those expenditures of public money, they are in fact all in the nature of public charity; but they have this unfortunate side, that instead of it invoking in the giver the emotion which charity should invoke, instead of invoking in the receiver the emotion of gratitude which should be invoked, they invoke neither the one emotion nor the other. They invoke neither the emotion which induces one to put his hands into his pocket and to deny himself in order that he may give, nor the gratitude which should be felt by the receiver.
These legislative doles have a bad effect on both the giver and the receiver. They dry up both the sources of charity and the emotion of gratitude. I feel that this kind of vicarious charity, as voted by Parliament, must have a serious and demoralising effect on the people of this country. The great thing to do is to teach men to give. There has never in the past been the smallest lack of generous men and of generous classes in this country, and if it had been left to private enterprise, in the form of charity, to meet the difficulties, trials and horrors of the present day, charity would have risen to the occasion; the money would have been forthcoming, and voluntary effort would have done far better than Legislative action.
What we are suffering from, as the last speaker (Mr. Sexton) said, is a paralysis, not merely of our own industries at home, but a paralysis of industries all over Europe. Why is industry paralysed, and what remedy can we find for it? I am not one of those who say that the Genoa Conference is a foolish undertaking. I would try every possible remedy. The paralysis of the industry of the world is due to the fact that the capital of the world has been very largely destroyed. It has been blown into the air, burnt and wrecked in every kind of way. Much of the capital on which the industries of the world depend has passed out of existence and until it is recreated industry must suffer and unemployment must be rife all the world over. There is no way of recreating that capital by borrowing money, by issuing scrip, or by any kind of agreement between country and country. No financier can create what does not exist. No paper by being printed, and with any amount of backing behind it, if it does not represent real capital is of value. You cannot get the workers of the world at work again without real capital at their back, and that can only be created by industry, by wise invention, by skilful direction and by the two forces that make industry profitable—by the work of the hand and the work of the brain. These two co-operating together can recreate capital, and if when produced it can be saved and not immediately spent it will supply us with the means of getting rid of this horrible unemployment.
What you demand you will get. What you pay money for you will get. If you demand unemployment you will get it. If you pay for unemployment you will get men out of work. I do not mean to suggest that if you cease to pay for unemployment all unemployment will cease, but the tendency is always the same. You will get the thing you pay for, and if you officially state that you will pay for unemployment you will aggravate the very condition which you desire to relieve. What you want to demand now is capital. You want more capital.