Orders of the Day — Clause 10. — (Application of Unemploy- ment insurance Acts to employment abroad.)

– in the House of Commons on 9th December 1929.

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Photo of Sir Austin Hudson Sir Austin Hudson , Hackney North

I beg to move, in page 9, line 29, at the end to add the words: Provided that such regulations shall not come into force until after the passage of a resolution to that effect by both Houses of Parliament. All of us on this side thoroughly agree with this Clause, and the only reason I am moving this Amendment is to make quite certain that the machinery is as perfect as we can make it. The difference between the procedure as it would be if this Amendment were not accepted and as it would be under my proposal, is this: Under Section 35 of the Act of 1920, it is provided that regulations must be laid before Parliament and may be annulled by an address by either House, but they actually come into force at the date on which they are made. The Amendment proposes that they shall not come into force until both Houses of Parliament have passed a resolution to that effect. We are rather afraid that difficulties may arise in connection with the machinery of this new arrangement for allowing people who are employed in foreign countries to come under the Unemployment Insurance Act and that is why we desire the regulations to come before the House. If the regulations are working smoothly and are generally agreed to, the Minister will not have any difficulty in getting them through both Houses of Parliament; but this Amendment would allow us to see the new provisions which are to be made. It is a little difficult to be certain of the advantages to be gained under the Clause. Some people are not sure that men will not have to pay contributions and get very little in return. Until the Clause has been in operation for some time it is extremely difficult to see what will happen. There is objection in the country to Departments having power to make regulations, and therefore it will be all to the good if they have to come before Parliament. The Amendment is only a very small addition to bring about what I think is called affirmative resolution procedure as against negative resolution procedure.

Photo of Miss Margaret Bondfield Miss Margaret Bondfield , Wallsend

This Clause is inserted in the Bill in response to a constant agitation for some such pro- vision on the part of a group of very highly skilled and valuable men. The question arose in connection with bridge building, in the first instance, if I remember rightly. Suppose that a firm with headquarters in this country—and we are not contemplating firms which have not their headquarters here—send out a body of men, who may be away for two or three years, to build a bridge across the Zambesi, or somewhere else. When the work is done, they return home only to find that, although they have been amongst the earliest insured persons, having come under the provisions of the Act of 1911, they have forfeited all their rights on account of having been uninsured for two years. There are not a great number of these cases, and they can be quite clearly safeguarded. The Clause is so drafted that the Minister will have to take account of every application and deal with specific cases, making such regulations as will ensure continuity of registration, and so on. Though this will affect only a very small number of persons, those persons have had a real grievance in coming back to the country after finishing their job abroad, as iron and steel workers, engineers, etc., only to find that after all the contributions they have made to the Fund they are excluded from benefits by reason of the fact that they had taken this work abroad. That is the sole purpose of the Clause, and I think the safeguards in the principal Act with regard to laying the regulations before Parliament are sufficient.

Photo of Major Sir Frank Markham Major Sir Frank Markham , Rochester Chatham

Do those remarks apply to the dock yards?

Earl WINTERTON:

I am sure the intentions of the right hon. Lady are admirable, and I have no doubt that the intentions of the distinguished group of people of whom she spoke are equally admirable, but the question is whether the Clause as drafted will carry out those intentions or whether there are not certain dangers to be feared. I am sure the right hon. Lady had no desire to withhold any information from the Committee, but she had not given us very much information about the Clause. After searching carefully through both the Clause and the explanatory memorandum, I cannot find that there is any time limit upon the operations of the Clause. These people might be employed abroad for a matter of five or ten years—that sometimes happens. I think it is reasonable that highly skilled workers going abroad should remain in insurance, but I do not think it is reasonable that a man living for ten years outside the country and engaged in work abroad should be included in this insurance scheme; at least I think it is doubtful whether he should, and I should like to hear the views of the Minister on that point.

Further, I would like to know what machinery the right hon. Lady will provide to ensure that benefit is paid to these people if they get out of employment while they are abroad. The explanatory memorandum says the Clause proposes to permit the payment of contributions in certain cases. I presume that what she means is that it permits the payment of contributions and also the payment of benefits. I do not say the case would be common, but what would happen if a British firm which took a contract abroad were to fail and the workpeople were thrown out of employment in the country to which they have gone? What is to be their position? They have paid their contributions and they are under the Act.

Photo of Miss Margaret Bondfield Miss Margaret Bondfield , Wallsend

Obviously, the principal Act would govern that point. No benefit is paid outside the United Kingdom.

Earl WINTERTON:

That makes the position more extraordinary, and I wish to repeat my question. We all know of the experiences which some reputable firms have had with contracts in countries abroad. The firm take a contract, but finds the conditions wholly different from what they had expected them to be, and they are not able to fulfil the contract. I do not say they fail dishonourably to fulfil it, but they cannot complete it, and it is taken over by somebody else. Those people find themselves out of employment, and yet the right hon. Lady says that they will not be entitled to benefit. Those men are stranded in Buenos Aires, Rio or some part of our Dominions. They may have been there in some cases nine or 10 years and yet we are told by the Minister of Labour that they cannot draw any benefit until they return to this country. The result is that in some cases they have to obtain money from the British Consuls. What benefit can it be to these people to pay contributions if they are not to receive any benefit. That is a point on which we shall require to be fully satisfied. There are one or two other points which require some further explanation. Clause 10 provides that: Regulations made under Section thirty-five of the principal Act may provide that, subject to any prescribed conditions, where persons in the employment of a person resident or having his principal place of business in the United Kingdom are engaged outside the United Kingdom for the purpose of the execution of some particular work. That would apply to our Colonies. I know that frequently the India Office engages men in this country under short-term contracts to do work in India, and some of them would normally come under the Unemployment. Insurance Acts of this country. In such cases, does the right hon. Lady insist on those people being insured and have they to continue paying their insurance?

Earl WINTERTON:

Yes, I have read the Clause.

The DEPUTY-CHAIRMAN:

May I point out to the Noble Lord that we are not discussing the Clause. We are discussing the Amendment on the Paper.

Earl WINTERTON:

I thought that the latitude which you, Mr. Dunnico, usually allow would have permitted me to ask those questions, but I will not pursue my point any further. I contend that the words: where persons in the employment of a person resident or having his principal place of business in the United Kingdom are engaged outside the United Kingdom, might be held to apply to Government Departments. This is an important point which strengthens my support of the Amendment, and that is why I think the Regulations should be laid on the Table of both Houses of Parliament. I also think that it is very necessary that we should know whether or not this Clause is in conflict with the immigration laws of various countries. I am exceedingly doubtful, from what I know of this subject, whether it would not be held that if a business man engages workmen in this country and takes them over to Canada it would not be a breach of the law of Canadian immigration. I know a case where a distinguished Canadian banker was recruiting a staff in this country to work in his branches in Canada, and the Dominion's Minister of Immigration stated that what this gentleman is doing is illegal.

It is important that we should have some reply on these points. I do not know whether this provision would apply to firms who have taken contracts in the United States. I know that the United States law on this question is much more stringent than the Dominion immigration law. It has already been pointed out that we are not opposed to this Clause, in fact we have always encouraged the idea of British contracts abroad being carried out by British labour with British capital, and that is why we want to know that we are safe in this respect by passing this Clause. I would like to know whether the Dominion Parliament has been consulted on this matter and whether the Canadian representative has been asked whether what is proposed in this Clause is contrary to the immigration laws of Canada. I think we ought to have some further explanation on the question of the payment of contributions, apparently without any provision at all for those persons receiving benefit.

Photo of Miss Margaret Bondfield Miss Margaret Bondfield , Wallsend

I have been asked what happens in the case of insured persons being called upon to go to some other part of the world in which they are going to fulfil a contract, and afterwards come home to this country. The answer is that they are permitted to make an arrangement at headquarters by which their contributions will be continued so that when they come back they will be entitled to benefit. The payment of benefit comes under the regulations which apply in this country.

Earl WINTERTON:

I do not think that I have made my point quite clear. The men I refer to are sent abroad under certain contracts which have been entered into, and they are engaged by the Secretary of State or the High Commissioner.

Photo of Miss Margaret Bondfield Miss Margaret Bondfield , Wallsend

If the Secretary of State or the High Commissioner is the actual employer of these men, then they would pay the proportion which is usually paid as an employer's contribution. No question arises as to whether this would be contrary to the immigration laws.

Photo of Lord Eustace Percy Lord Eustace Percy , Hastings

May I give as an illustration the case of a teacher who is receiving a pension. If that teacher goes abroad, arrangements are made whereby he retains his right under the scheme while he is abroad, but his rights under the scheme are rights which do not accrue, ex hypothesi, before he comes home. They are rights to a pension on retirement, and all that is needed is to keep those rights alive by continuing the payment of contributions. The unemployment scheme is a very different thing indeed. It is not a scheme under which you contribute in order to gain eventual benefit on your retirement from work at the age of 60 or 65, but a scheme under which you pay contributions in order that you may get benefits whenever you are unemployed within, let us say, two years after you have paid contributions. These people are going to be told, "You must continue to pay your contributions during the three, five or 10 years that you are abroad, but during that period no rights shall accrue, so that you are under a definite disadvantage as compared with your comrade who has stayed at home."

If this Clause has any meaning at all, it is that a man who goes abroad shall be able to retain the same rights as he would have had if he had stayed at home. The whole claim has been that a man should not suffer because he goes abroad, but under this Clause the man is to suffer when he goes abroad, because, although when he comes home he may have retained his position under the Insurance Act while he is abroad, yet, if he is thrown out of work while he is abroad, he gets none of those benefits which his comrade at home would get under the same contractual relationship. This might not be very serious if under this Clause we were only talking of contracts—of a contractor in England sending his men out to perform a contract on the Zambesi, or wherever it may be; but I think the right hon. Lady will agree that this Clause covers the case of a firm with a head office in the United Kingdom and branch offices in the Dominions, who have a regular system of exchange between the staffs of those offices. In such a case a man may fall out of work when he is employed in one of the Dominion offices just as much as he may when he is employed at home, and yet he is to receive no benefit when he is out of work.

There are two serious points in this matter which have led my hon. Friend to move this Amendment. The first is that the Minister, or the new despotism, as we call it now, is given the widest possible power of making regulations laying down the conditions under which these men who go abroad are to be allowed to remain in insurance. The second is even more serious. It is that this Clause leaves the Minister no power to make regulations covering the one thing which these men want most, namely, that they shall have the same claim to benefit as the man who remains at home, I think there is no power under this Clause to do that; at any rate, that is my assumption—that the Minister has no power to give to the insured person outside this country any right to benefit, no matter what his unemployment may be while he is out of it. That cannot be satisfactory. I tremble to make the suggestion, but I really would suggest to the right hon. Lady that this is another Clause which she might well withdraw.

Photo of Miss Margaret Bondfield Miss Margaret Bondfield , Wallsend

I should like, if I may, to clear up this point, which is quite a simple one about which obviously there is a misunderstanding. This provision was not put in on the initiative of my Department at all; it is an attempt to meet the views of deputations received, and is intended simply and solely to meet a case which has been put forward by insured persons and certain groups of employers. They say to the Ministry, "We go out under a contract which we think will be over in two years, but which may run on for two-and-a-half or three years. We have a contract to take our men out and bring them back again, and we want to be quite sure that, when they come back, they shall be no worse off so far as the insurance position is concerned than they were when they decided to go out." The question has never been raised of paying benefit outside this country, and that is not the point. The point is as to whether the Ministry can make any arrangements, if the firms are prepared to pay the contributions, by which this can be done. I looked at the question to see what my powers were, and I found that I had no power even to make such an arrangement as these people want made. [Interruption.] I would specify particularly engineers and iron and steel workers. The Iron and Steel Trades Confederation was the body which brought it to my notice. They had discussed the matter with certain engineering firms who had large contracts abroad. The position is quite simple, and the Clause is a very limited one, to take such limited power as is asked for to make arrangements with firms for the continuation of contributions, so that men who go out under contract and are brought back under contract shall not be worse off when they return to this country.

9.0 p.m.

Photo of Lord Eustace Percy Lord Eustace Percy , Hastings

The right hon. Lady has said that this has only been asked for in respect of firms who are under contract to bring their men back but that does not appear in this Clause at all. Under this Clause as it stands the Minister would have power to make regulations, as I understand it, to oblige a man, who was sent out by his employer to a branch office with no contract, to continue to pay insurance contributions.

Photo of Miss Margaret Bondfield Miss Margaret Bondfield , Wallsend

Surely, I made it quite clear that there is no obligation on the man. Unless a man asks to be allowed to continue to pay his contributions, he is not forced to do so at all.

Photo of Lord Eustace Percy Lord Eustace Percy , Hastings

That is the right hon. Lady's intention, but it is not the Clause. The Clause empowers her to make regulations which may provide that subject to any prescribed conditions, where persons are in employment. … they shall. … be deemed for the purposes. …

Photo of Lord Eustace Percy Lord Eustace Percy , Hastings

But subject to any conditions. If the right hon. Lady wishes to confine it to workmen whose employers are under contract to bring them home, I hope she will accept an Amendment on Report to the effect that these regulations shall only apply in the case of men whose employers are under contract to bring them home.

Photo of Major Sir Frank Markham Major Sir Frank Markham , Rochester Chatham

I should very much like to know how the Minister regards the position of dockyard workers who may be sent abroad on Government service for long periods to Bermuda, Gibraltar, or other places. So far the right hon. Lady has said that this only applies to men sent out by a firm under contract. I should also like to know whether they have to pay their contributions during the whole time that they are away, as I understand is the case with men under contract with private firms, and whether they become entitled to benefit the moment they commence their voyage home, or when they first set foot in England and apply to an Employment Exchange.

The DEPUTY-CHAIRMAN:

I should like just to make it clear to the Committee that I have allowed a discussion to take place on the Clause together with this Amendment, and the Committee will understand that this is the only discussion that can take place on the Clause.

Photo of Miss Margaret Bondfield Miss Margaret Bondfield , Wallsend

I would point out that the men described by my hon. Friend the Member for Chatham (Mr. Markham) are established employés, and that, therefore, in their case the question would not arise.

Photo of Mr John Grace Mr John Grace , Wirral

I should like to point out that the right hon. Lady has not put the case of the Amendment which is before the Committee. The whole point of the Amendment is that we are anxious that Measures which are passed by the House of Commons should be made effective by the House, and not by Government Departments, and the important question of the regulations and conditions which can be attached to this Clause is one which, we consider, the House should from time to time have an opportunity of seeing and approving. This is a question of men going abroad for years, whose rights, I understand, are to be safeguarded, but what is to happen to them in the meantime? What is to happen to them under these regulations, which we have not seen and which at the moment we have no idea of? Does the right hon. Lady mean that there are to be actual weekly payments made by these men through their employers during the time that they are abroad? Suppose that a man is abroad for five or 10 years. Are we to understand that weekly sums can be deducted from the wages paid to them abroad, and that during that time they are to receive none of the benefits which, had they been in this country, they would have been receiving? That is a very important point to which we are entitled to ask for an answer. I will also ask the right hon. Lady to deal with one point that has been raised by the Amendment—whether she does not consider that it is a reasonable thing that, on a matter of great importance like this, the House should have a right to consider and review the regulations which are passed by her Department, and which should be laid on the Table of the House and criticised by Members.

Photo of Sir Percy Harris Sir Percy Harris , Bethnal Green South West

I have no objection to the Amendment as such. On the contrary, I have moved similar Amendments myself. I am all for keeping control, as far as possible, of any regulations made by the Minister. I do not suppose the right hon. Lady has any serious objection to that. I think it is a good thing that Parliament should keep control of regulations, but when it comes to this Clause, I am surprised at the attitude of the two Noble Lords. I am not quite clear whether they think the Clause is too weak or too strong, whether it goes too far or not far enough. Hon. Members above the Gangway always claim to have a monopoly of the Empire. They are the great Imperial party. In the words of Rudyard Kipling, What do they know of England who only England know?

Earl WINTERTON:

The hon. Member is, no doubt, aware that this Clause not only applies to the Empire but also to those foreign countries for which he and his party have always had such a particular regard.

Photo of Sir Percy Harris Sir Percy Harris , Bethnal Green South West

We want our manufacturers to get contracts not only in the Empire but in foreign countries as well. That means more employment for British workmen and more steel manufactured in English foundries. Apparently the new doctrine of the Noble Lord is that we should take no contracts except in this country or in. the Empire and should refuse all contracts for foreign countries. That is a pernicious doctrine to which Members below the Gangway give no countenance. As far as I can see, this is an honest attempt to make good a very serious defect in previous insurance Acts. It is undoubtedly a fact that there is a danger that, if men accept employment abroad, their position in the insurance scheme will be prejudiced. That is a thing which we want to remedy. [Interruption.] Hon. Members had five years to do it, but they were asleep until someone woke them up. Here is an honest attempt to face a real problem. It is common knowledge that many of our big engineering firms, such as Pearsons, for instance, have opportunities of getting contracts, especially for the manufacture of bridges, in Africa and South America, but, naturally, the men hesitate to work on such contracts if, when they get back, they find themselves out of work and uncovered by the Unemployment Insurance Act. It is to regulate that difficulty that this Clause is introduced, and I am entirely in favour of it. Whether it is advisable to have regulations made by the Minister laid before the House is another question. I am always in favour of that, and I suggest that, if the right hon. Lady cannot accept the Amendment, she might give an undertaking to consider it on Report. It is a thoroughly sound idea.

Photo of Miss Margaret Bondfield Miss Margaret Bondfield , Wallsend

The Regulations will be laid for 21 days under the provisions of the principal Act. I cannot see why there should be any variation from the principle of those Regulations.

Photo of Lieut-Colonel Sir Arthur Heneage Lieut-Colonel Sir Arthur Heneage , Louth Borough

I am moved to address the Committee partly on account of the observations of the hon. Member who has just spoken. He, like his party, is willing to wound but absolutely afraid to strike. The Noble Lords have made very useful and pertinent criticism. It is very largely on account of the words used by the right hon. Lady that the Committee finds itself in an extraordinary situation of doubt and difficulty. She says, first of all, that it applies to persons who are now insured. Presumably it does not apply, therefore, to any new form of insured persons, or to people who may be insured after the passing of the Act but who are not insured before. We ought to have some explanation of those words. There is another point on which explanation is certainly required. What is the meaning of the words "under contract"? I understand that is not a term that is applied to persons who go on board a ship. We want to know whether it refers only to those working in this country or whether it refers to those who have embarked on ships. This is only to be applied to men who are willing to be insured. That raises several very large questions. Is there to be a weekly deduction from their wages, or are they going to have a lump sum deducted when the period of their contract expires, in other words, presumably, when they come home? If that is the case, it is a very unfair arrangement. If they have been abroad a long time, a large deduction will be made which will come to them as a considerable shock.

There is a considerable difficulty which has come under my own personal observation. There is a question of clerks attached to foreign missions. Sometimes these missions go to places which are -under the control of our own troops, for instance, the occupied territory in Germany. Nearly all military and naval laws deal with these questions. But there are missions which go to other of our territories. I had an interesting time in Germany on the Inter-Allied Commission of Control, but there were no regulations to deal with it. There were a great many clerks enlisted in this country on English so-called contracts, and the question of their deductions has not been satisfactorily settled to this day. In fact, I am now getting letters from people who were clerks to that Commission eight or 10 years ago wondering what is the actual amount that they should have received from the Government. This does not concern private contractors at all. I warn the right hon. Lady that, in introducing this Clause without making special provision for this case, she is laying up a very difficult heritage for herself. Let me give one instance. Certain warrants had been made for those men, and they were so involved on account of the difficult legal position, that they had to be decided by the King himself. The right hon. Lady can only get out of the difficulty by having the King's signature, and I suggest that she can put the matter right by the very simple means indicated in regard to this Clause.

Photo of Mr Robert Bourne Mr Robert Bourne , Oxford

I want to raise a point as to the meaning of the words: a person resident or having his principal place of business in the United Kingdom, because I gather from the Minister's speech that this Clause has been framed to meet the representations made to her principally by the engineering trade. I would like to suggest that there are other trades in which there is a principal company in the United Kingdom and subsidiary companies abroad in connection with which skilled people in insurable occupations go out from this country and work for those subsidiary companies, which are under the legislation of the country where the work is done. I am not at all clear whether a recommendation in this Clause will cover the case of these people, where the head company is in England, and the company which holds the majority of the shares is for technical reasons registered abroad. These people would be in insurable occupations if they were employed in England or if they were employed in a country by a firm with headquarters in England. Does this meet the case? If not, they have a very definite grievance.

Photo of Colonel Victor Cazalet Colonel Victor Cazalet , Chippenham

The Minister told us that she had no power whatever; in fact, she said she had looked into the matter and found that she had even less power than she thought she had. I see in line 27 of this Clause, the words: subject to any prescribed modifications or exceptions. I have read the Clause several times in order to try to understand the full import of that sentence. It seems to me that that sentence alone gives the right hon. Lady a very wide area of discretion, and would, I think, entitle her to make regulations or take decisions upon many of the points raised by hon. Members on these benches. As I understand it, the manner in which the collection of these insurance contributions will be made is that the firm in England, or the representative of the firm located in England, will contribute each week full contributions, both on behalf of employer and on behalf of the employé, to the insurance Fund during the whole period the individual is employed on a contract in some foreign part.

I think I am right in that assumption. It appears that under this scheme the fund is assured of collecting all the contributions. The fund cannot possibly lose; it must gain very considerably by any contract that is made abroad, and men engaged in that contract continue to be insured under this Clause. But during the whole of that time no benefit whatever can be paid to them. They cannot benefit in any way. [An HON. MEMBER "They do not need it!"] On the other hand, they have to continue to pay full contributions during the full period. An hon. Member below the Gangway suggested that they might be in employment three, four, or even five years. My point is, that as they cannot possibly benefit under the Act in any way whatever, is there not some means by which they shall be able to continue to be insured, and that immediately they come back to this country they shall continue to be in the same position in regard to the Insurance Fund and enjoy the same benefits as when they left the country? That, I understand, is the object of the Clause. Surely, that would he obtained if, instead of having to pay under this Clause the maximum contribution with the minimum benefits, they paid the minimum contribution, entitling them to the full benefits when they returned home. That is a fairer way of treating these individuals who can get no benefit out of the scheme when abroad, although they have to pay the maximum contributions.

Photo of Mr Arthur Dixey Mr Arthur Dixey , Penrith and Cockermouth

I should like to ask the Minister a question on this subject. As I understood her, she had in mind certain groups of the engineering trade; that there was an absolute demand for a provision of this nature. From what I can gather there are other trades who might well come within the scope of this Clause. I was not clear from what she said whether she wanted to treat it as a regulation to be applied to the trades who had already applied, or whether she wanted to treat it as a regulation which she could apply to any trade.

Photo of Miss Margaret Bondfield Miss Margaret Bondfield , Wallsend

There are a few questions which hon. Gentlemen wish me to answer. First of all, the hon. and gallant Gentleman the Member for Oxford (Captain Bourne) said he wanted to be assured about subsidiary companies. It is perfectly clear that the Clause is so worded that there will be no question of making any agreement or any regulation connected with any trade unless the person is resident or has headquarters in this country. I should not consider making any regulations concerning any subsidiary company abroad. With regard to the extent of the Clause, it will be only those persons who think it will be to their advantage to come into the scheme who will make application, and where persons consider under these conditions that it is to their advantage I shall certainly consider the matter.

Amendment negatived.