Only a few days to go: We’re raising £25,000 to keep TheyWorkForYou running and make sure people across the UK can hold their elected representatives to account.

Donate to our crowdfunder

Unemployment Insurance Act, 1985.

– in the House of Commons on 8th April 1936.

Alert me about debates like this

3.49 p.m.

Photo of Mr Ernest Brown Mr Ernest Brown , Leith

I beg to move, That the draft of the Unemployment Insurance (Reduction in Weekly Rates of Contributions) Order, 1936, laid before Parliament on the eighteenth day of March in pursuance of the provisions of Sub-section (4) of Section 59 of the Unemployment Insurance Act, 1935, be approved. In the discussion to-day some light will be thrown on the success that has attended the working of Part I of the Unemployment Insurance Act, 1934. The House will remember that the problem which has confronted successive Governments since the War has been how to make and keep solvent the Unemployment Insurance Fund and, on the other hand, how to care for the able-bodied unemployed who have lapsed from benefit. Under the administration of the Ministry of Labour, and with the assistance and advice of Sir William Beveridge's Committee, Part I of the Act has been working so successfully that I can report to the House in moving this Motion that the fund is not only solvent but has been able to achieve the following ends, namely, to modify the regulations affecting seasonal workers under the Anomalies Act and to increase children's allowances by 1s. In addition, we have been paying off, and shall continue to do so, interest and redemption on the loan debt at the rate of £5,000,000 a year, and we have accumulated a capital reserve against any bad times which may come of £21,500,000. The Motion I am moving involves an average disposable surplus of nearly £6,500,000 a year. That is a very satisfactory statement for any Minister of Labour to be able to make, and is a proof that the foundations of Part I of the Act of 1934 were well and truly laid, and that in association with Sir William Beveridge's admirable committee the administration is working with satisfactory results.

There may, of course, be differences, and probably will be, among reasonable people as to how we should dispose of the surplus, but whether differences arise on that issue or not, the whole House will agree that the results I have summarised are a very considerable achievement for which the House will be grateful, and which the country will be glad to know. In order that hon. Members' minds may be refreshed as to procedure, I should like to remind them of the duties of the Statutory Committee. Under the law the Committee are required to make a report by the end of February in each year on the financial position of the Fund. They may make a report at such other times as the Committee think fit. They must make a report whenever they consider the Fund is likely to be insufficient to meet its liabilities. If there is at the time of the report a disposable surplus, or if the fund is insufficient to discharge its liabilities, they ate required to recommend such changes in the scheme as are necessary to bring the fund into equilibrium. They have complete responsibility for determining the extent to which there may be a disposable surplus in the fund or the extent of the deficit, and their conclusions on that point cannot be challenged. The Government and Parliament are, of course, not bound by the recommendations of the Committee as to the way in which the surplus should be used, but if the Government of the day differ from the conclusions of the Committee they must tell the House the reasons.

The report which is the basis of the draft Order I am moving was signed by all seven members. That is important when we are considering some of the issues involved, issues such as the probable trend of unemployment, the basis on which the calculations are made, and whether members of the fund desire to have their contributions reduced or to have increased benefits, or whether they prefer a compromise solution, part of one and part of the other. But the basis on which their own views were formed was agreed to by all members of the Committee. They all agreed as to the trend of unemployment and as to the calculations, but they differed as to how it should be done. It is important, however, for the House to realise that they all concurred as to the basis upon which the calculations were made. That concurrence meant that the Committee laid down general principles which underlie every consideration of the matters with which they are charged. One general principle is that they must have regard not to the immediate situation but to income and expenditure over a period of years. In other words, they must do their best to look ahead and take the long view before coming to a decision.

Two practical conclusions arise from that decision. The first is that they will be bound to make an assumption as to the amount of unemployment for a future period of years not less than that of a normal trade cycle and, secondly, that it was necessary from the outset to set aside from the surplus in good times a reserve which can be expended in making up the deficiency which will occur inevitably in times of trade depression. Following from these conclusions the procedure which the Committee adopted before presenting me with their report on the state of the fund was to ask for the advice of the Economic Advisory Committee of the Government as to the probable trend of unemployment over a period of years. Let me summarise that advice in this way. It was based on the following considerations: First, that the most reasonable hypothesis to adopt was that the average percentage of unemployment among insured persons between the ages of 16 and 64 years in Great Britain for the next 10 years will be in the neighbourhood of 151 per cent. or 16 per cent. Secondly, on the basis of this hypothesis, the average percentage of unemployment for a shorter period, such as eight years, will be materially higher and for a period of a complete trade cycle it might be placed at 16¼ or 16¾ per cent.

Photo of Mr Winston Churchill Mr Winston Churchill , Epping

Can the right hon. Gentleman give us the actual figures which would result—the number per week?

Photo of Mr Ernest Brown Mr Ernest Brown , Leith

I will deal with that a little later. At the moment, with an insured unemployment figure of 1,800,000 the percentage of unemployment is just about 14 per cent., or a little over. That will give the House some idea of the figures.

Photo of Mr George Griffiths Mr George Griffiths , Hemsworth

But this estimate was made when unemployment was 2,000,000.

Photo of Mr Ernest Brown Mr Ernest Brown , Leith

The estimate is made in the light of these considerations, and taking into consideration the period of a normal trade cycle. The advice of the Committee was couched in these terms. They offered this opinion subject to various reservations: We have no confidence that the averages may not diverge by a substantial amount in one direction or another from the above levels, though it seems to us as likely that their estimate will err in the one direction as in the other. It is to be regarded not as an attempt to prophesy but as a contribution, so far as the knowledge now available permits, to the formation of a working hypothesis upon which policy in regard to the contributions and benefits of the Unemployment Insurance Fund may reasonably be based. The Committee point out that these prophecies, these suggestions, and this advice, are to be subject to revision in the light of future events. They point out that if there is a major war or a financial collapse of magnitude or an unexpected improvement in international trade, then, of course, their advice' will need to be revised in the light of those facts. I put that in this form for this reason: I have noticed that in talking about the report some Members of the House and other critics outside have treated this advice of the Economic Advisory Committee as if it was a prophecy. It is not a prophecy. It is to say, in effect, after an examination of the material available and at their disposal at this time, that as prudent men if we retain finance sufficient to cover unemployment which does not rise above this on the average we shall be acting reasonably. That is the basis of their advice, and I mention the fact so that the House may be quite clear that these figures are not to be quoted as a definite prophecy of what is likely to occur.

Now let me come to the actual views of the Committee. The hon. Member for Chester-le-Street (Mr. Lawson) asks what is the figure on which the Committee based their figures. Their views and the course that they recommend may be summarised thus: 1, they hold the view that in principle the Fund should balance over a trade cycle; 2, they have taken a period of eight years, beginning with 1936, as the length of the next cycle; 3, they assume that beyond this the general trend of unemployment is likely to be downward; 4, they have prepared estimates of the prospects of the Unemployment Fund, based on applying the experience of 1935 to assumed percentages of unemployment of both 16¾ and 16¼ per cent. respectively for the next trade cycle of eight years, and in connection with both these percentages they have assumed that under the conditions of the Unemployment Insurance scheme oil the average 48 per cent. of unemployment will rank for benefit.

Let us consider the basis on which the recommendations rest, with those points in mind. On the assumption of an average of 16¾ per cent. of unemployment the committee conclude that with the present rates of contributions and benefits, and with the present conditions for receipt of benefit, the contributions will exceed the payments by £3,588,000 a year, while on the basis of 16¼ per cent. of unemployment the excess will be £5,538,000. If no accumulated reserve had existed the estimate would have been based on a higher figure than 16¾ per cent., particularly as the borrowing powers of the fund under the Act of 1934 are now strictly limited. But two facts led the committee to the conclusion, in which they all concurred, that the disposable surplus should be put at a slightly higher level. These are the two facts: 1, that the year 1936 began with an accumulated reserve of 221,500,000; 2, it is their view that unemployment in the depressed staple industries should decrease gradually, so that the rate should be less than 161 per cent., after the next eight years. On that basis they come to the conclusion, with those two factors in mind, that they can recommend to the Government that there is a disposable surplus of £6,500,000 per annum here. If the surplus is disposed of, on the basis of 16¾ per cent. nearly the whole of the accumulated reserve will be used up, but the fund will continue to balance if unemployment thereafter is 16 per cent. or less.

The committee call attention to the various conditions upon which their estimates of the present disposable surplus rest, and they say that if any of these conditions fail to be satisfied and there is no compensation in some other direction, it will be necessary to retract in whole or in part any steps taken for the disposal of the surplus. The three conditions to which they call attention and which I wish to emphasise are these: 1, that the mean average is not above 16:1 per cent. for the next eight years and that after that period it is 16 per cent. or less; 2, that the recovery of trade and the decline of unemployment will continue at least until the latter part of 1937; 3, that the estimate of not more than 48 per cent. unemployment ranking for benefit under the scheme is not exceeded.

Let me call attention to the estimates as to what might be done with the disposable surplus of £6,500,000. If the House will turn to page 14 of the Statu- tory Committee's report they will find spread out for the consideration of the Government and of the House what could be done with this surplus in various ways. First of all there is the reduction of contributions. The committee point out that if contributions were reduced by one penny per week from each party, in the case of men, aged 21 to 64, the cost would be £4,218 000; young men, 18 to 20, £479,000; women, 21 to 64, £1,391,000; young women, 18 to 20, £380,000. That makes a total of £6,468,000. If a halfpenny per week was the reduction for each party the cost would be: For boys and girls, 16 to 17—boys, £139,500; girls, £111,000; or a total of £250,000.

With regard to benefits, if benefits were increased by a shilling a week for men of 21 to 64 the cost would be £1,728,000; young men, 18 to 20, £133,500; women, 21 to 64, 2430,000; young women, 18 to 20, £71,000; a total of £2,362,500. If boys and girls 16 to 17 also had an increase of 1s. per week the cost would be £34,000 in respect of boys and £21,500 in respect of girls. There are one or two other things I should mention. If the increased benefit for dependent children was made a shilling for the first child, it would cost £645,000; if a shilling for each child, it would cost £1,345,000. If there was an increase of benefit for an adult dependant by a shilling, the cost would be £930,000. If it was desired to abolish the waiting week the cost would be £3,000,000. If the waiting week was reduced to three days the cost would be £1,250,000.

I have ventured to detain the House with these figures so that they can be put on record in the OFFICIAL REPORT for the convenience of Members who will discuss the matter in the country. The committee turned down two suggestions after considering them at length. The first was that we should use this surplus to add to the rate at which we are paying off the debt. They dismissed that suggestion on the ground that the arrangement now made for paying off the debt was a sufficient load for this generation to bear. They also turned down the suggestion that the benefit period should be extended, on a, series of complicated arguments with regard to the relation of the fund to the general taxpayer, and the undesirability of doing that in these particular circumstances.

So in the end the Committee narrowed down the issue to three propositions: Either that we should use the £6,500,000 to reduce contributions, or that we should use it to increase benefits, or a compromise on both. After having discussed all the arguments for and against each of these the Committee—there were seven members—a woman member and four others came to the conclusion, as stated in paragraph 68, that they ought to recommend to the Government, and the Government agreed, to dispose of the surplus by reducing the contributions all round by £6,500,000. There were two dissentient reports. Mr. Arthur Shaw, as the House knows, recommended that the whole of the surplus should be used for increase in benefits, and that of course will find support among hon. Members opposite. But that course did not commend itself to any other member of the Committee. Mr. Shaw stated his case fully and fairly, and, more than that, the Committee gave the arguments which had weighed with them and made them decide that they did not agree with him.

Let me summarise what they said. They said that the three points to be urged for the course of increasing benefits were these: 1, that industry and individuals had adapted themselves to the heavy contributions and the advantages of increased benefits would be more felt in the country; 2, if contributions were now reduced it would not be possible in future to raise them except to meet deficits, whether an improvement of benefit was found to be desirable or not later; 3, that the income should not be surrendered until the policy with regard to Part II of the Act was declared. All those factors weighed with Sir William Beveridge and the majority of the Committee.

The other report was made by a very able woman member of the Committee. There were two women members and they did not agree on this matter. Mrs. Stocks in her dissentient report argued that while she agreed with the majority of the Committee that the men's contributions should be reduced all round, yet she thought there ought to be no reduction in the cost of the women's contributions but an increase in women's benefits. She argued very subtly, not in form but in fact, that this should be done in order to achieve equality between the rates of benefit for males and females under the Unemployment Insurance Fund. The majority of the Committee, however, did not agree either with Mr. Shaw or with Mrs. Stocks. I would like to put before the House the four main arguments which weighed with the Committee and with the Government, and which I am sure will have weight with the House, in favour of the course recommended by the Committee, namely, the reduction of contributions by 1d. all round.

In the first place, the rates of contribution now in force were established by the National Economy Act, 1931, one of the few emergency measures which has so far been neither removed nor mitigated. This particular rate of contribution was fixed because of a heavy increase in unemployment rates in the emergency in 1931, and when the Bill was going through the House, before it became an Act, my predecessor made it clear that when the Statutory Committee undertook its duties, it would have to have regard to the fact that the increase of 2d. or 3d. in contributions was one of the emergency measures to he considered when there was any disposable surplus.

The second consideration which was urged was that the employers' and workers' contributions under social insurance are now on such a level as to make them a very sensible burden on industry. I do not think that can be denied. It must be borne in mind that when the House of Commons is surveying the field of social insurance, regard must be had to all concerned, not merely those who are insured but the three parties in the tripartite system of insurance; and in dealing with the position of the workers concerned, consideration must be had not only for those who are at a given moment unemployed, but those who are in work. The committee had these considerations in mind, and in their conclusion they point out clearly, forcibly and at length that the contributions are on such a level that they are a very sensible burden on industry. The present contribution for men is 10d. for unemployment insurance for each of the parties.

I think the third argument used will carry great weight with all hon. Members who have paid regard to the analysis I made concerning the possibilities of the next trade cycle. The argument is that the reduction of contributions in a period of uncertainty is a much wiser way in which to dispose of a prospective surplus than is the raising of rates of benefit, for contributions can more easily be redressed than benefits can be taken away if a bad period of unemployment comes. Hon. Members who have the emergency of 1931 in mind will know that it is possible at a time of emergency to add id., 2d. or 3d. to the contributions, but if there were a grave emergency and if the calculations now made on the hypothesis put forward on the advice of the Economic Advisory Committee should by any means prove wrong, it would be very difficult for any Government to reduce the level of benefits if they had been increased in order to dispose of a surplus.

Photo of Mr John Tinker Mr John Tinker , Leigh

Does not the right hon. Gentleman know that the Government say there will never be an increase in unemployment again?

Photo of Mr Ernest Brown Mr Ernest Brown , Leith

The hon. Member knows perfectly well that no such claim has been or is likely to be made on behalf of the Government. That which we are trying to do is to take a reasonably long and sober view of the future. It would have been much wiser for the unemployed of this country during the last 20 years if successive Ministers of Labour had had the advantage of advice of this kind and had taken a more sober view of the future. If that had been the case there would not have been the many changes in unemployment insurance which we have had during the last 15 or 20 years. In any case, hon. Members will find it very hard to refute the argument that it would be much easier at a time of unexpected, heavy unemployment to meet the emergency, if ever it should unfortunately occur, by increasing contributions.

Photo of Mr Edward Williams Mr Edward Williams , Ogmore

May I ask the right hon. Gentleman whether in determining the figures the Advisory Committee took into consideration the effects of the Government's Defence programme on the trade cycle?

Photo of Mr Ernest Brown Mr Ernest Brown , Leith

The advice given was in the light of the circumstances known to the Economic Advisory Committee, and it is on the basis of that advice that Sir William Beveridge's Committee tendered their report. All the factors that could be foreseen at the time were taken into consideration.

Photo of Mr Ernest Marklew Mr Ernest Marklew , Colne Valley

The right hon. Gentleman said that it would be much more difficult to lower benefits than to increase contributions at a time of crisis. Would he be good enough to say how that argument was reasoned out?

Photo of Mr Ernest Brown Mr Ernest Brown , Leith

I should have thought that no reason was required except the bare facts as to what has happened in this country during the past six years. If there is any party which ought to know that, it is the party to which the hon. Member belongs. This problem is one of the most difficult that any party would have to meet in a time of difficulty, and if there were an established level of benefit it would be much harder to attack that benefit. [Interruption.] I am very glad that hon. Members make these interruptions. In doing so they show that the argument is having great weight with them, and they know how tremendous is the force behind it.

The fourth argument which the committee advanced in support of the recommendation for a reduction of the contribution all round by ld. was that, taking into account any increase in benefit that is likely to be permanent, it is wise to survey the whole field and to consider the interests of all concerned. The committee took the view that if there was to be any increase in unemployment benefit rates in general, that could only be done, after full consideration by Parliament, as an act of deliberate social policy, and not merely because a reduction of unemployment on the one hand and a sound insurance Act on the other hand has produced a surplus.

Photo of Mr Jack Lawson Mr Jack Lawson , Chester-le-Street

For the information of the House, would the right hon. Gentleman be good enough to give the figures asked for as to how the percentage of unemployment works out over the next trade cycle?

Photo of Mr Ernest Brown Mr Ernest Brown , Leith

In reply to the hon. Member, on the basis of the present number of workers insured, 16.25 per cent. unemployment means approximately 2,100,000 unemployed and 16.75 per cent. unemployment means approximately 2,160,000. Those are the figures for which the hon. Member for Chester-le-Street (Mr. Lawson) asks. I would like now to say a few words concerning the minority report of Mrs. Stocks. I had the advantage on this matter of receiving a deputation composed of certain lady Members of the House and women representing various organisations. This advice is not based on the assumption that the benefit rates of the Unemployment Insurance Acts are based on needs. That has never been the view of any Government promoting an Unemployment Insurance Act in the past. The basis has been quite clearly that payments are not put forward as representing an estimate of what is actually required as complete cover against loss of income through unemployment. If schemes of unemployment insurance are not based on needs, but upon this practical consideration, how large a contribution is feasibly required on roughly equal terms for all employés and employers, and what is the best use that can be made of such resources in contributing to the maintenance of those out of employment? It is on this basis that the Acts are framed, and not on the basis of saying that the benefits proposed are not in all cases adequate for the full maintenance of those who receive them.

Miss RATHBONE:

Would the right hon. Gentleman say whether it is the case that Mrs. Stocks' argument was based upon needs? If he takes as a basis the actuarial considerations, does he deny that women contributors are paying enormously in excess of the value which they receive?

Photo of Mr Ernest Brown Mr Ernest Brown , Leith

The hon. Lady will know that Mrs. Stocks in her report laid stress upon this very argument. She put forward three arguments. In the first place, she said that it was anomalous to apply undifferentiated rates, which means an argument for equality. Secondly, she did not agree with the argument that lower rates of wages demand lower benefits. Thirdly, she emphasised the argument concerning needs. I would say to the hon. Lady the Member for the English Universities (Miss Rathbone) that surely it is unfair to argue on the basis of the relation between the amounts of benefit drawn by men and women, and to talk in terms of the women merely as insured contributors at a given time. Surely it is unfair to take as a basis of argument what a woman pays when she is an insured contributor and what she receives, and what a man pays when he is an insured contributor and what he receives. To do that is to overlook the fact that in dealing with men contributors, one is dealing not with what they receive for themselves, but with what they receive for dependants, among whom there are included vast numbers of women.

I would like to point out what I consider would be a much fairer basis of comparison. It would be to take the proportion of men and women in receipt of benefit at the present time, namely, 8.2 per cent. of men and 6.9 per cent. of women. It must not be forgotten that in the case of the men unemployed there are certain trades which carry the heaviest burden of long continued unemployment. These trades, of course, include a number of unemployed women in the cotton industry. Surveying the whole field of unemployment, it is remarkable that those who argue as to the unfairness merely in terms of the total sums paid out should overlook this important factor. As a matter of fact, the percentage of women drawing benefit nearly approaches the percentage of men drawing benefit. Moreover, there is no reason to suppose that the present lower rate of unemployment among women will be a permanent factor of our industrial life. I will go further and tell the House that there was a; period in 1931 when the rate of unemployment among women was greater than the rate among men. There are other factors which have to be considered when we are judging this matter.

On the main issue the committee, by a majority of five, including the Chairman, concluded in favour of a reduction of contributions by such party, in respect of all insured workpeople of 18 years and upwards by a penny a week. Mr. Shaw made his dissent known. Mrs. Stocks, while agreeing with the proposed reduction in the rate for men, proposed also a reduction of a half-penny per head for boys and an increase of 2s. in the benefit for women 'over 18, of 1s. 6d. for women between 17 and 18, and of 1s. for girls between 16 and 17. I would like to add, for the consideration of the House, that although this report of Mrs. Stocks is argued with great subtlety, she did not convince the other woman member of the committee, and I would say to the hon. Member for the English Universities that that seems to be a very good argument for putting two women on committees of this kind.

I am therefore in the happy position of asking the House to dispose of an aggregate surplus of nearly £6,500,000, as to £2,150,000 for the workers. At one penny per week, that is equivalent to an increase in wages of £40,000 per week. Those hon. Members who recall the time when wages once more began to rise, about two years ago, will know that in the period 1930, 1931, 1932 and 1933 a rise of £40,000 a week in wages would have been regarded as a very happy sign and a very welcome fact. I have no doubt that, whatever hon. Members may say in opposing this Motion, the workers of the country will welcome this reduction of a penny in their contributions. Of the same surplus, £2,150,000 is for the employers, and I would like to add one point which is not made by the committee with regard to the effect of a penny per head less contribution on a large number of firms. There has been a large number of firms working in recent years with no or very little profit, and it will be of great advantage to them to have a reduction of a penny per head on their insured persons. It will mean for them a very considerable help.

Photo of Mr John Potts Mr John Potts , Barnsley

As between a penny off the contributions and the payment, for argument's sake, of 1s. in increased benefits, is there not more sense in the shilling going to the people who are unemployed than in taking a penny off which is debited to the costs of production and charged to the industry? Which is the best for the people of the country?

Photo of Mr Ernest Brown Mr Ernest Brown , Leith

The hon. Member evidently did not rise to put a question but to make a speech, and I will, therefore, proceed with my remarks. There is quite a considerable number of firms, in difficult industries, which have had hard times, employing large numbers of men, who will welcome, and indeed do welcome, this prospective reduction in July of a penny in the contributions.

Now I come to the last point. The Treasury will benefit to the tune of £2,150,000. [HON. MEMBERS: "Hear, hear."] I expected that cheer, though I do not understand it. I know it is not a usual charge against a Minister of Labour that he pleases the Treasury, but I have never understood why it should be an occasion for contumely when money is saved for the Treasury. After all, the Treasury is not some abstraction. It is a great institution, and it is an institution which in no small degree is charged with community interests. Public finance is not a matter of arithmetic, but a matter of sound public policy, and I would say that it was not the least of the pleasurable moments which I had when I saw, on getting this report, that I might be able to go down to the House of Commons to move a Motion of this kind which would bring that rare thing, a smile to the face of the Chancellor of the Exchequer.

4.36 p.m.

Photo of Mr Arthur Greenwood Mr Arthur Greenwood , Wakefield

I think all of us on this side are profoundly disappointed with the speech of the Minister of Labour. I remember him in his unregenerate days when he sat at the end of the third bench below the Gangway on this side and appeared in this Chamber as the great champion of the unemployed. Now he speaks to us in mournful numbers of percentages and pence. Where is the old evangelical fervour which we used to get from the right hon. Gentleman when I happened to sit where he sits now? That unfortunately has evaporated. He talks now in the most mercenary terms. He is one who, before he had tasted the sweets of office, always held the highest ideals and was moved by noble sentiments, and to-day he wound up his speech, which I am bound to say, from a Parliamentary point of view, was a ghastly failure, with a paean of praise because he had saved the Treasury £2,000,000. The surplus, he said, was a considerable achievement, and he said the country would be glad to learn of this surplus. The unemployed are not glad to learn of it. The right hon. Gentleman appears to have left the unemployed out of his calculations. He has now become a hack for the Treasury, and he takes pride in the fact, and winds up the peroration of his speech on a note of pride that he at last, of all the Ministers of Labour, has done something to aid the sore beset Chancellor of the Exchequer.

He has given us not merely a paraphrase but the actual words of the Statutory Committee's report, which most of us have read. He might have saved the time of this House by defending a little more enthusiastically his slavish acceptance of the report of Sir William Beveridge's Committee, which he calls an admirable committee. I make no criticism of its personnel. It is limited because of action taken in 1931, in the first place, and then under the Unemployment Act of 1934. That committee is not concerned, as the Minister of Labour ought to be, with the position of the unemployed; it is concerned primarily with the solvency of the fund. That is its first consideration. It had its motto given to it by the Government, and its motto was, "Solvency, not service"; and the big thing that the committee has to do is to keep the fund solvent. It has made it solvent, but at what a price. It has done it by taking more money out of every insured worker in this country, by penalising for three years those who fell out of work, and now, as a result of a callous administration, it has a surplus to dispose of.

The committee examine—and I pay my tribute to the report—the various ways in which the surplus could be disposed of, and they give the arguments for and against each course, and their own arguments against a reduction of contributions, in my view, simply overwhelm the arguments which they themselves advance in favour of a reduction of contributions. The committee was divided. The Minister made the point that at least the committee all concurred with the basis of calculation. That is obvious. We all know there is a surplus on the fund, and those of us oil these benches agree that there is a surplus on the fund. But after that agreement ceased, and two out of the seven members did not agree. Agreement ceased on what was the fundamental problem, and that was how to dispose of the surplus.

The committee took evidence, and all the evidence except that received from the National Confederation of Employers' Organisations was in favour of assisting the unemployed by improved conditions or improved benefits and was against a reduction of contributions. I am not surprised that the National Confederation of Employers' Organisations pressed for a reduction. They naturally would. It means £2,000,000 in their pockets. Therefore the whole weight of the real evidence was against the conclusion reached by the committee in its report, and I am surprised that the right hon. Gentleman, with his history behind him, should have succumbed to all the specious arguments which were used by the committee in favour of a reduction of contributions.

The position is that there is a surplus of £6,500,000 of which the committee has to dispose. It is proposed that the employers and the workers should have their contributions reduced by a ld. per week, and that the State should itself, of course, enjoy the same advantage. What will be the effect on the employers? The right hon. Gentleman, almost with tears in his voice, told us about firms which were trembling on the very verge of collapse, to whom these pennies would mean salvation—those hard-pressed firms which had not been making profits and which were apparently really to be saved at the expense of the big mass of the unemployed workpeople of this country. But what are the facts? Some of them were given in the report of Mr. Shaw. If the right hon. Gentleman can quote his bits of the report, I will quote mine. On page 30 towards the end of paragraph 2 the point is being made that the relief to the employers would be so small as to be negligible in its effect, and Mr. Shaw says: This was illustrated by showing that on the contract price of a £90,000 cargo vessel of which the shipbuilders' direct costs would be £33,300 the saving effected would be only £43. The shipping people could pay that out of their £2,000,000 subsidy. The report goes on to say: Particulars taken from the report on the Import Duties Act Inquiry (1933) were submitted in relation to the cotton and woollen industries and it was shown that the reduction of the contributions by ld. per week for each party would benefit the employers to the extent of about £63,000 in the cotton industry, and £41,000 in the woollen industry. In the same report the figures relating to the gross output in 1933 were as follows—Cotton, £132,701,000; woollen, £101,897,000. Mr. Shaw draws the obvious conclusion that the saving thus affected could not materially help trade and industry. I think that is clear, because in the cooperative movement we know that in the cost of the retail distribution of groceries and bread the employers contribution now, apart from this reduction, amounts to.27 of a penny per £1 of sales. In the case of the retail distribution of meat it is.34 or one-third of a penny per £1 of sales. So one could go through the whole range of the distributive trades showing how small is the burden at the present rate. In the case of manufacturing the figures show that the existing burden is negligible. In the case of the manufacture of flour it amounts to.12 of a penny per £1 of output, rising in the case of pottery manufacture to 2d. per of output. The reduction now proposed means cutting that by one-tenth. That is what one penny off the present rate means. Is British industry to be saved by the right hon. Gentleman following this policy of saving one-tenth of one-tenth of a penny on output? The thing is fantastic, and the right hon. Gentleman's argument is completely fallacious.

Photo of Mr Winston Churchill Mr Winston Churchill , Epping

The right hon. Gentleman has not yet dealt with the workmen's contribution.

Photo of Mr Arthur Greenwood Mr Arthur Greenwood , Wakefield

I leave that to the last because it is the most important. The State is to save a little over £2,000,000 which would enable it to get next year the same Budget surplus as it had this year. A sum of £2,000,000 saved out of a Budget approaching £800,000,000 is clearly negligible. It may be that it will help to finance the Government's rearmament programme. We may get some bomber aeroplanes out of it, but I submit that £2,000,000 put directly into the pockets of the unemployed would have far more economic and social value. As for the workers, the employed worker is to have his contribution reduced by one penny per week. The right hon. Gentleman, quoting the report, referred to what this meant as a proportion of wages. I say that, however low wages are, one penny per week to the employed man is nothing. To the unemployed man it is something. That one penny per week is just going to be frittered away. There will be no advantage to the workers of the country in it. It will merely be squandered, if one can squander a penny.

Photo of Mr Malcolm McCorquodale Mr Malcolm McCorquodale , Sowerby

If the right hon. Gentleman refers to Mr. Arthur Shaw's report he will see in paragraph 5 the statement that there would be a, great deal of opposition to any attempt to raise the rates of contribution, presumably by one penny a week.

Photo of Mr Arthur Greenwood Mr Arthur Greenwood , Wakefield

Certainly, and we shall always, in this House, oppose an increase in the rates of contribution. My point is that this £2,000,000 will be frittered away, that indeed the whole of the.£6,500,000 now at the disposal of the Statutory Committee will be dissipated and will have no permanent social value. We, on these benches, believe that the maintenance of the unemployed should ultimately become a complete national responsibility. We do not believe that unemployment insurance is the way to deal with a grave problem of this kind but we accept the unemployment insurance schemes as they are now. We must do so as realists and I say, with a full sense of responsibility, that the employed workers of this country would prefer to continue to pay that one penny and to see the surplus going into the homes of the unemployed, first, because they think that that would be right and also because they realise that if they themselves were unemployed they would welcome increased benefits. I want the House to understand that as far as organised labour is concerned, and, I might add, the Co-operative movement as well, much as we dislike the contributory system we would rather see our people continuing to pay this penny if £6,500,000 more could go into the homes of the unemployed as a result.

What were the ways available of disposing of this surplus? The Committee toyed with the idea of paying off the debt. That was a, scandalous suggestion. It is a monstrous thing that workers of the future, those who are not yet in industry, will have to pay off a debt incurred because of the unemployment of their fathers through no fault of their own. If anything could ever have been justifiably added to the National Debt it was this debt on the Unemployment Fund and nobody who had not a 100 per cent. Treasury mind would ever agree to the disposal of this surplus in the repayment of that debt. The surplus might have been used for lengthening the period of benefit. It might have been used for the extension of the 26 weeks statutory period. That would have been of value to the unemployed workers. I should have thought that the Treasury, whose myrmidon the right hon. Gentleman confesses himself to be, would have welcomed that because, clearly, there would be advantages to the State in keeping people off Part II of the Unemployment Act of 1934 and away from the Unemployment Assistance Board as long as possible. The State makes a good bargain if it keeps people in unemployment insurance, because it only pays one-third of the cost but once they go to the Unemployment Assistance Board, the State pays the whole cost. The Government are now stealing, with the right hon. Gentleman aiding and abetting them in this crime of petty larceny, a sum of £2,000,000 and they will not gain by it, because they could have got £6,000,000 worth of assistance under Part II of the Act or the equivalent of it, if they had agreed to lengthening the period of benefit. I quote again from the report: It would therefore be possible for us now to recommend such a lengthening of the period for benefit or such changes in the conditions as would raise the proportion of unemployment ranking for benefit from the 48 per cent. assumed in our calculation to 54 or 553 per cent. In effect, on the present figures, this would transfer nearly 140,000 workpeople from receipt of assistance to drawing of benefit. If the right hon. Gentleman wanted to add a laurel to his crown there was his opportunity. To have extended the period of benefit and brought 140,000 unemployed away from the humiliation of the Unemployment Assistance Board and back into honourable unemployment insurance benefit, would have been worth this £6,000,000 which has accrued to the Fund very largely because of the Government's callous treatment of the unemployed. They might have shortened the waiting period. The Committee considered that proposition and turned it down. When our system of unemployment insurance started three days was regarded as a reasonable waiting period. The present system does not mean that people merely wait six days. It means that they wait ten days of unemployment before one penny comes into the home, and in these times when men are constantly in and out of work, and when the resources of the home have been dissipated, waiting for nine or ten days means agony to many. It would have been well worth while, at such a trifling cost, to have reduced the waiting period from six days to three days. They might indeed have increased the monetary benefits to the unemployed. There is a striking phrase in the report which seems to blow to smithereens the case of the statutory committee for the reduction of contributions. At the end of paragraph 48 on page 23 the report says: To take ld. off the contribution would cost practically the same as adding 3s. a week to all adult benefits; can it be doubted that the latter use would give more general satisfaction? They did doubt it, because in spite of visualising an additional 3s. per week for adult persons in the homes of the unemployed the Committee came down finally on the side of one penny per week off the contribution. Mr. Shaw worked out how this £6,500,000 might have been disposed of to what I regard as considerable social advantage. The weekly rate of benefit of unemployed men over 21 could have been raised by 1s. per week. Young men between 18 and 20, who are a problem under Part II of the Act, could have been raised 2s. a week. Boys of 17 and boys of 16 might have had their rates raised by 1s. per week. Women over 21 could have enjoyed an additional 1s. 6d. per week. Young women between 18 and 20, who are also a problem under Part II of the Unemployment Act, could have had their benefit raised by 2s. a week. Girls of 16 and 17 could have enjoyed an additional 1s. In addition to all that, the waiting period could have been reduced to three days. Each adult dependant of an unemployed person could have received an increase of 1s. per week, and there could have been an additional 1s. for each dependent child. Even that would not have swallowed up the £6,500,000. Instead of that, the right hon. Gentleman agrees to pour his £6,500,000 into the sands of the desert and no good will accrue to anybody. Hundreds of thousands of working-class homes would have benefited if the right hon. Gentleman had had one spark of the humanity which oozed out of him from every pore when he sat in another part of the House.

Unemployment insurance exists for the benefit of the unemployed. It does not exist for the purpose of accountants and other people balancing the budget of the Statutory Committee and the Unemployed Fund. Unemployment insurance was established before the War because unemployment had become a social problem, and a considerable and important permanent problem. When there is a disposable surplus in a fund contributed to by the very people who might need it and who might become the victims of unemployment, the right hon. Gentleman chooses the worst possible way of disposing of it. Our view is, and will always be, that any surplus of this kind to which employed people have contributed one-third, ought to be devoted to the unemployed who are the victims, the casualties of our economic struggle. This Parliament has a very heavy responsibility for the unemployed. There is not a Member of the House who has not made promises with regard to the unemployed, except the fortunate few who represent constituencies where unemployment is unknown. In the last Parliament Members on that side of the House walked about with grim faces because of the Government's failure to deal with the unemployed. It was not this side of the House that created the revolt 14 months ago; it was hon. Members opposite, who said that the unemployed were not having a square deal. Minister of Labour No. 2 then disappeared from the political scene for the time being.

The effect of the Government's action is to deprive unemployed people of £6,500,000 per year which is sorely needed in homes which might have had it given to them. While the Government keep their eyes on those who get work and brag every month about the increasing number of people who are at work, they cannot afford to neglect the people for whom they cannot get work. These people are really the Government's major responsibility. There is a large army of people who, in existing circumstances, are permanently unemployed. I proved last year that that core of unemployment is enlarging. What is their prospect? Everything they ever had in the co-operative society or the Savings Bank has gone, and they have to live on unemployment benefit, or on the largesse of the Unemployment Assistance Board. There is a larger army of people in and out of employment whose domestic situation, while not so bad as that of the permanent core of unemployed, is still pretty serious. Blankets are wearing out, crockery has been broken, everything is getting down to the very margin—and we get a penny off the contribution!

It is our moral duty in this House, to whatever party we belong, to care for those who fall by the wayside through no fault of their own. It is our duty to bring them the succour that they need. They are not unemployed through circumstances that they can control, but because of forces outside the control not merely of industry, but of this Government, because they are world-wide economic forces which nobody has yet thought to bring under control. They are victims who ought to be cared for as carefully and as tenderly as those who suffer in a great war. I hope the House will raise its voice against this sort of pinchbeck method of dealing with a very grave problem. Six-and-a-half million pounds squandered in the way suggested means nothing; used in the way suggested in the report of my friend Mr. Shaw, it would bring comfort to hundreds of thousands of working-class homes. I am asking Members on all sides of the House who realise what this or problem means in working-class homes to raise their voices in protest against the meanness of the Government in throwing away money which might bring good to many of our deserving fellow citizens.

5.9 p.m.

Photo of Mr Henry White Mr Henry White , Birkenhead East

I hope that in the midst of the heavy, and, I believe, unanswerable criticism that has been directed against the terms of this Order, the House will not lose sight of the fact that there are at least two important matters on which the House is entitled to be congratulated. It is a matter of no small importance and significance that we are here concerned with the possibility of disposing of a sum of £6,500,000 following upon the distribution of other surpluses—which, it is true, were small—which have been made in the course of the last two years. If, when we were engaged in those grim transactions which led to the cutting down of the unemployment benefit and the restriction of our social services, we had been able to look forward and see that in a comparatively short space of time we should have this substantial sum at our disposal, we should have been able to face the future in a much more pleasant frame of mind than we had in those days. The second matter which ought to be the subject of congratulation is that, thanks to the activities of the Statutory Committee and its admirable report, following upon other reports we have had from it, Parliament is to-day better able to come to a decision upon these matters than it has ever been before.

In the course of our discussion on the Second Reading of the Unemployment Measure, I stated that this seemed to be a satisfactory and expeditious way of getting the business done. Whether it will prove so, experience will only show, but I would like to put it on record that I believe the appointment of the Statutory Committee has been a great success and is a powerful adjunct to the deliberations of Parliament, which, in the last 20 years, has shown itself singularly unfitted to deal with the details of unemployment insurance as bearing on the intimate lives of the people. The Statutory Committee and also the House do, however, labour under a serious difficulty, which is inherent in the whole scheme and structure of our methods of helping the unemployed. The committee draws attention to it in paragraph 50 of the report, where it says: The present moment is particularly inopportune for surrendering income from the Unemployment Fund, because the committee have no information as to the probable policy of the Unemployment Assistance Board. The committee, commenting upon that, goes on to say: If contributions have been reduced, the committee will not be in a position to make any change of benefits. That is indeed an important and fundamental fact in surveying the whole field of Unemployment Insurance. It is obvious that the recommendations of the Statutory Committee, whatever they may be, have a profound effect upon the policy and finances of the Unemployment Assistance Board. This difficulty is inherent in the whole scheme. I do not know why the Statutory Committee should not have access to the knowledge of the policy of the Unemployment Assistance Board. It is certainly impossible for it to carry out its functions in a completely satisfactory way without it. The House is also at a great disadvantage in considering this question without having knowledge of the forthcoming regulations. The Minister is in a privileged position. We had hoped that in the spring, when the first swallows flitter across the horizon and the joyous note of the cuckoo is heard, my right hon. Friend would come down to the House and disclose his plans to an expectant country. It may be that we shall, in what- ever decision we come to to-day, be wrong. The Statutory Committee says that in effect in its report. The committee says that it hopes that opportunity may be left for the reconsideration of whatever may be done to-day in the light of the recommendations that may come from the Unemployment Assistance Board.

We on these benches have given very careful consideration to this report, and have come to the conclusion that we cannot support the Government in recommending that the whole of the £6,500,000 should be devoted to a reduction of contributions. My right hon. Friend said that there were powerful, indeed, unanswerable reasons why we should help industry by giving it the relief that a reduction of contributions by id. per week provides, but I think the arguments of Mr. Shaw in his minority report, emphasised by my right hon. Friend the Member for Wakefield (Mr. Greenwood) are a complete answer to that suggestion. We believe not that the relief to industry is negligible—we know exactly what it amounts to in pounds, shillings and pence—but that, as stated in the report, the actual effect upon any particular manufacturing industry would be of such a negligible character that the benefit cannot be handed on to the employ?és in terms of wages or to consumers in a reduction in prices.

On the other hand, an increase in the benefits to insured people would have the maximum amount of economic advantage for the country. It is true that every hon. Member must be anxious to support any project which will lighten the drab existence of the unemployed, but we are not animated solely by that sentimental conclusion. Sentiment is not always a reliable guide in formulating a practical policy, but we think that in this case sentiment, humanity and a practical policy follow the same course. By devoting this surplus to an increase of the benefits we should be increasing the consuming power of those whose necessities are greatest and who would use that consuming power in a way which would make itself felt most immediately and most certainly in the industrial life of the country.

There is much room for difference of opinion as to what form an increase of benefit should take if the proposal to dissipate this surplus by reducing the weekly contributions were rejected. There are one or two ways of doing it to which we on these benches attach very great importance. In the first place, we think it is a matter of some urgency that the waiting period of six days should either be done away with altogether or reduced. We are, of course, familiar with the arguments employed by those who maintain that a waiting period should be retained. It has always been the custom, they say; it was started by trade unions; and those who have been in employment for a considerable time will, no doubt, have money in hand with which to carry on during the waiting period. It is said also that the operation of the continuity rule has smoothed out most of the difficulties and hardships which arise from the waiting period. Those, however, who are familiar with conditions in the depressed areas, or in areas where there is much under-employment, know that the hardship arising from the waiting period is very great indeed. My right hon. Friend the Member for Wakefield pointed out that in practice it was not a waiting period of a week only but very often 10 days, and it is a very real difficulty, because in many districts where the family resources have been reduced to a minimum—and in those districts, by some strange misfortune, it is most difficult to get temporary relief from public assistance committees—the family reserves have to be reduced still further by parting with some article of furniture or clothing from an already very much attenuated home. Therefore, we should attach very great importance to the abolition, or at all events the reduction, of the waiting period.

We also think the argument put forward by Mrs. Stocks for maintaining the contributions of women at their present rate and at the same time increasing the standard allowance for women by 2s., is one which has not yet been answered. It has certainly not been answered on the basis of needs. The Minister, in his opening speech, said the case was not to be judged entirely by needs, but he went on to point out that a man had dependants and there were allowances for dependants, thereby refuting his own argument that the matter was not dependent upon needs, because in making allowance for dependants in the case of a married man that is, of course, the foundation of the whole case for the allowance. We cannot agree that the needs of a woman are less than those of a man to the extent of 2s. a week. I do not think that can be substantiated and, indeed, I should be prepared to argue that they are greater by 2s. a week. It is generally the case that women who are unemployed, if they are to get back into work, must be in a position to spend more liberally on their personal appearance than is necessary in the case of men.

In making an allocation of the £6,500,000 available we should also wish to see standard benefit continued for a longer period. Those who have many friends among the unemployed must know of the haunting dread which possesses them as the weeks go by and they get nearer to the time when they will become subject to the means test. Nothing would be of greater benefit from a humane point of view, arid also, I believe, from a practical point of view, than that the period during which standard benefit is payable should be extended. There is the further point that it would relieve the finances of the Unemployment Assistance Board. Under present conditions we cannot consider the two schemes together. When the question was before the House we criticised the division of unemployment assistance into tripartite and independent schemes. Whatever may be the future of unemployment assistance and unemployment insurance, sooner or later we must come back to one scheme. Whatever the form of the scheme may be it is impossible to work things satisfactorily on the basis of three schemes operated independently.

Here, again, we suffer through our ignorance, not knowing what is in the mind of the Minister or the Unemployment Assistance Board. I had hoped the Minister might assist us in this Debate by giving us at least a sketch of the new Regulations which are to be brought before the House in the fulness of time—lifting the curtain a little, even if he could not give us the actual terms. It would have been of considerable assistance to us in coming to a decision today if he had been able to do so. It may be that he has decided to dispense with the Unemployment Assistance Board in future, and will ask the House to allow him to take these matters again into his own control, within the Ministry of Labour, and that would be a step in the right direction, but at the moment we are in the dark and not in a position to discuss these matters fully and in the most intelligent way. During the long discussions on the Unemployment Bill we did not fail to point out the great disadvantage that would arise when Regulations and Orders of this kind came up for confirmation and had to be either accepted or rejected without any possibility of our amending them. If ever there was an occasion on which this House might have decided on full evidence—limited, as I have said, by ignorance of the Unemployment Assistance Board proposals, but having all the evidence of the various proposals presented to us by this committee—it would have been now. I feel the House could have reached a decision which would have satisfied the majority of hon. Members, but I am sure the present Order will not be regarded as satisfactory. By some combination of our own wishes and the proposals put forward by the Statutory Committee a plan might have been produced which would have brought great benefit to the country, great solace to the unemployed, and have left the whole scheme in such a way that it would be capable of greater flexibility for adjustment to the needs of the people.

5.28 p.m.

Photo of Mr Harold Macmillan Mr Harold Macmillan , Stockton-on-Tees

I think the House is indebted to the Minister for the very clear way in which he explained to us the main problem we have to discuss. It will be agreed, I feel, that this matter can be regarded either from the narrower point of view of the immediate problem as it was put before the Statutory Committee or from the rather wider implications which follow. On the narrow question of what is the best way of using this £6,500,000 I am bound to say that I find the arguments fairly evenly weighed. They are admirably set out in the report of the committee, and my right hon. Friend devoted a very large part of his speech to presenting them to us once more. On the one hand there is the solid argument that the increase in contributions which came into effect at the time of the Economy Act is one of the very few of those emergency Measures which have not been removed. There is also the argument that there is a burden upon industry, which is, if you adopt the policy of the Government, pro tanto removed. I am bound to say that is not an argument that weighs very heavily with me, because it is in effect an argument against the whole scheme of unemployment insurance. That burden is inherent in the scheme, under which one-third of the cost of the unemployed is a direct charge upon industry. I do not regard that part of the argument as a very powerful one.

There is also the argument that it is difficult to have regard to the rates of benefit in this particular part of our social services without having regard to other parts—that there is there a very large problem which ought to be considered by the Government in preference to tinkering in this fashion with this particular aspect of our social services. Against that there is—and on balance in my mind I come down against the Government—the undoubted fact, which was put forward by the right hon. Gentleman who spoke for the Official Opposition, that this contribution has become accepted by the men in employment, and that if you were to take, in any industrial area, a plebiscite of the men in or out of work, you would get a majority of men in work who would be prepared to continue to pay their penny, and to see a shilling, or whatever may be the additional benefit, go to their comrades who are out of work. There is the serious argument that if the hypothesis, on which the whole report of the committee and the policy of the Government are based, is correct, and if the rate of unemployment is likely to be over the next ten years, what the Economic Advisory Committee informed the Government, the decision we are taking to-day is very important. If the rate of unemployment does not sub stantially decrease, and we now reduce the rates of contribution, we shall be absolutely precluding ourselves from seeing benefits raised at all.

The committee, as I understand the position—and the Minister, will no doubt correct me if I am wrong—have only the right to recommend an increased contribution in some future year in order to meet a deficit, but for no other purpose, and therefore, if the calculation is correct that the fund will be in equilibrium for the next period, and if the proposals are carried, we are saying to-day that the rates of benefit now in existence are to remain in existence for the next 10 years. That is a very serious decision, and hon. Members ought to wait before they come to that decision.

Then there is the argument, which has finally brought me to the conclusion which I have reached, and which, I hope, other hon. Members will follow, to ask the Government to delay before they press forward with this Order. It is that the Minister is not being straight with the House in coming to-day, a few days before the Easter Recess, to deal with this Draft Order, which is not necessary. In a week or 10 days after the Recess he is to give up his whole scheme for the relief of the unemployed under Part II. I have always had a very soft spot in my heart, as I think have other Members of the House, for successive Ministers of Labour. They have each held one of the most difficult of all positions in any Administration, although it is not one of the most dignified. It is not given the ancient status of some of the other great offices of the State, but it is one which, we know, throws a tremendous burden upon whomsoever carried it.

In my experience, in the 11 years since I first entered the House of Commons, I have seen a fair number of Ministers of Labour. They come and go with startling rapidity. Those who have been the most successful have been those who have taken the House into their confidence and who have treated the Members of the House of Commons as their friends and colleagues in trying to formulate their policy. We have only to wait a week or two for the Minister to bring forward this Draft Order at a time when we shall know, as he now knows, what are the draft regulations under Part II which he and the Cabinet have approved, and it is not fair to ask the House to make this decision to-day without that information at our disposal. To that I particularly wish to call attention.

There are other and rather wider problems than the mere allocation of this £6,500,000 surplus that now accrues, and I very much regret that my right hon. Friend did not think fit to give the House any of his views upon those other questions. Everything to-day is so departmentalised. It would seem that Cabinet government has come to an end. We have before us a great question of public policy, and no representative of the Cabinet even thinks fit to come into the House. We deal day by day with different departmental problems, and the Government seem to have abandoned the task of advising the Rouse. Even after the Debate has been in existence for a couple of hours, there is not one representative of the Cabinet present, not even the Minister in charge of the Draft itself. I regret this tendency, which seems to be creeping over, to destroy the influence and continually to degrade the importance of the House of Commons, and to regard it as a body whose mere duty it is to register an automatic vote in favour of the proposals which the Ministers bring forward. The assumptions and the hypothesis, which my right hon. Friend quite truly put forward as part of the Committee's report, are passed over as though they were axiomatic, and as though they were a kind of assumed condition of the social and economic life of this country for 10 years to come.

I do not know who is trying to destroy the capitalist system and who is trying to support it. Are you going seriously to say that the system of society which it is our duty on these benches to preserve and develop, involves, during the period of the next 10 years, on the advice of the greatest economists we can find, a permanent rate of unemployment of nearly 2,000,000 people? I sat in this House in 1925, when 16 per cent.—it is easier to deal in percentages—

Photo of Mr Harold Macmillan Mr Harold Macmillan , Stockton-on-Tees

I do not remember what was stated, but I remember that my much lamented friend, Sir Arthur Steel-Maitland, who was one of the ablest Ministers who ever held the position now held by the right hon. Gentleman, introduced a Bill in 1926. I see my hon. Friend the Minister of Pensions in his place. He will remember the position well. The Bill was founded upon the Blanesburgh Committee. What was the Blanesburgh Committee's estimate of the probable rate of unemployment? Eight per cent. I remember the Liberal benches, and I remember my right hon. Friend the Minister himself, when, in every part of the House it was said, "What a pessimistic view. Are we doomed to have 1,000,000 unemployed" I remember Votes of Censure, and debates week after week, all through that Parliament, when the problem of unemployment, as we used to call it, was a problem of 1,000,000 men out of work, and not 2,000,000 men, and when a great committee, under the chairmanship of Lord Blanesburgh, estimated that the probable future rate of unemployment, upon which they based the finances of the Bill of 1926, would be a figure of 8 per cent. Now we are told, and I dare say it is right, that if there are no changes, no new policies, no fresh attack and given existing conditions—given, indeed, the problem which the Economic Advisory Committee was asked to solve—the probable rate of unemployment will be 16.5 per cent., or 16.75 per cent., for the next eight years.

I observed, and I am sure that all hon. Members will have observed when they read the report, that the members of the Economic Advisory Committee were very careful to guard themselves as to the character of their promise. Being very distinguished economists, they were not very easily going to be led into a trap, and they put in a great number of qualifications in taking that view of the probable future. They said: It is possible that a radical change in the outlook may be brought about by developments which it is now impossible to foresee, and, among the factors by which the course of trade is influenced is the economic policy pursued by the governments of this and of other countries. They guarded themselves in doing what very properly they did, answered exactly the question they were asked in the form in which it was asked. They did no more.

Each of them individually is making his contribution, as best he can, to remove the existing basic and permanent factor in our economic system. Among the members of this committee was, for example, Mr. J. M. Keynes. The whole effort of his economic thought is not to accept as a permanent condition of our affairs that one-eighth of our total man power should be unable to find work, and he uses every effort, and what power he and his friends have, to find some solution to this problem. What shocked me and bitterly disappointed me was the attitude of the Minister, who accepts those hypotheses. They are reasonable enough if they are put forward merely as the basis of a particular decision on the narrow question of what should be done in these immediate circumstances, but to accept them, and put them forward to pass this House without comment, as a kind of assumed condition of our affairs, is to be hopelessly defeatist, and is a quite unwarrantable attitude.

Let us look at the other axiom. Not only are we told that this Measure will bring equilibrium, and that it is the right thing to do on the basis of the 16 per cent. unemployed and of the inevitability of the trade cycle—surely problems that one would have thought the Government would try to mitigate or solve—but we are told, and it is also assumed, that only half, or rather less than half, only 48 per cent., of the people for whom this provision is made, are drawing benefit when they are out of work. It is one of the hypotheses that not more than 48 per cent. of the unemployed should be drawing benefit at any given moment, which means that not only will you have over 2,000,000 unemployed, and you look forward with apparent equanimity to that prospect for the next 10 years, but your finance is to be based upon always having 1,000,000 people on the means test.

Is that the decision of the Government? Is that what they say to this House at the beginning of a new Parliament? Is that the message of a great, combined, strong, powerful Government? It is a defeatist message. It is the message of a Government who are fading away. Whether we are dealing with the matters which we have been dealing with in recent weeks, whether we are dealing with external or internal matters, there is no hope or promise given to the Members of this House; there is expectance, apparently, of bad conditions, and the hope that, at any rate, they will not become too horribly worse. I shall vote against this Order on all those main grounds, and I hope that many hon. Members will do the same. I would much prefer that the Government should see their way to withdraw the Order now and postpone its consideration.

On the narrow question of whether this is the best use of this great surplus a much more powerful argument could be presented; at any rate, the weight of argument comes down upon the other methods, increase of benefit or the removal of certain conditions. In the conditions in which this proposal is presented to the House I think it is wrong, and I protest, in the name of many humble back-bench Members, against our being asked to make a decision when we have not the information about the future policy of the Minister which he himself has. We are asked to come to what would would be a very important and binding decision as to the conditions of Part I when we have no information as to what is to be the policy on Part II.

Lastly, I ask the Government to postpone the Order because, to come before this House and accept this frightful accusation against the existing order of society, is to say that that must go on and that we have no policy, no hope, no method to deal with it; it is to say that this 16 per cent., 2,000,000, will be unemployed over the next 10 years; that is the message to the English people. I repudiate that. I could understand it if it came from the Opposition benches, and if it were a Socialist statement; if one of my hon. Friends were addressing a mob and saying that this is an inherent condition of capitalist society, but I do not understand it coming from the right hon. Gentleman who, like us, is engaged in an effort to improve, ameliorate, and make continual growth in, the social and economic organism, which we believe to be capable of development and growth, and to be the best means of promoting the health and happiness of our people. On all these grounds I would ask the Government, if it is not too late, to reconsider pressing this Order to a vote to-day, and to come before the House with a comprehensive statement of their policy both under Part I and under Part II, combined, I should hope, with a statement, which we have not yet had, of their policy on the wider aspects of the economic recovery of this country.

5.45 p.m.

Photo of Mr William Spens Mr William Spens , Ashford

I had no intention of intervening in this Debate, but the way in which the hon. Member for Stockton-on-Tees (Mr. H. Macmillan) used a report submitted, by a body of economists, to persons who have to make up their minds what to do with a surplus from an insurance fund, compelled me to rise to my feet. I wonder what hon. Members would have thought if a body of economists, asked to make a report to this House on the manner in which a surplus from an insurance fund ought to be dealt with, had come forward and said, "Everything looks so perfect that you may assume you are not going to have 16 per cent., or 10 per cent., or 8 per cent., but you can assume you are going to have 2 per cent. unemployed over the next 10 years, because everything is going so well," and if the persons responsible for dealing with that insurance fund took that outrageous attitude and acted accordingly.

Surely everyone who has had any connection with insurance knows that insurance must be based on the most conservative estimate than can possibly be got out, and that is all that the suggestion of the committee amounts to. It has nothing whatever to do with what the Government think is going to be the future of this country. Therefore, I would beg hon. Members to have nothing to do with suggestions that this report contains anything which the Government think is going to happen in the future as regards unemployment in this country. I have listened to the speeches of three hon. Members opposite, and not one of them has dealt with what appears to me to be the first question that this House ought to ask itself when it is considering the recommendations of a committee in regard to dealing with this surplus: Where did the surplus come from, and to whom does it belong? Hon. Members opposite all seem to think that this is a fund of money which we in this House can vote shall be used as we think best for the future of unemployment and the insurance scheme. [HON. MEMBERS: "Why not?"] Because it comes from certain sources, and surely the persons who have subscribed it, and find that they have over-subscribed, have some right to be considered.

During the War a number of voluntary associations were formed by those interested in shipping, to insure themselves against losses at sea, and at the end of the War it was found that in innumerable cases the contributions which those people had paid had been overestimated, so that large surpluses were left in the hands of the committees concerned. Those surpluses had to be disposed of, and the first question that the committees asked themselves was, where did this money come from and to whom did it belong? In such cases the money belongs to those persons who have subscribed it, and whose contributions have turned out, thanks to the improvement, in this case under the National Government, to have been unnecessarily large. Therefore, with great respect to hon. Members opposite, it appears to me, and, I suggest, to other Members of the House, that the first persons who have a claim on this surplus are the three parties who have subscribed it, namely, the workmen, the State and the employers. If the committee had suggested that this surplus should be disposed of as we think fit for the general benefit of the country, I, for one, should have strongly disagreed, on the ground that any such suggestion was fundamentally opposed to the principle that we have no right to deal with other people's property in any way except to try to give it back to them if we find that it has been taken from them unnecessarily. For these reasons I shall support the Order which the Government are putting before the House.

5.51 p.m.

Photo of Mr George Buchanan Mr George Buchanan , Glasgow Gorbals

At least we ought to be thankful to the hon. and learned Member for Ashford (Mr. Spens) for introducing, as I think, a note of reality into the Debate. Before he spoke, I was afraid that the Debate was going to peter out, but he has at any rate introduced some kind of feeling and thought into the Debate. It would be all very well to argue in that way if we were dealing with insurance. If we were dealing with an insurance company, there would be a great deal in the hon. and learned Member's argument. But we are not dealing here with insurance. Nobody who has the slightest knowledge of the problem can say that we are dealing with the question of the maintenance and upkeep of the unemployed on an insurance basis.

If the percentage of unemployment were to rise, as one might well conceive that it might, to 30 per cent., is the hon. and learned Member going to say that the contributions would have to be determined by that percentage? If so, they must go sky-high. Obviously, in dealing with this problem, you have other considerations entering in, and they are not insurance considerations, but considerations of how the people who are to be regarded as unemployed have to be treated from day to day. Even, how- ever, on an insurance basis there is an answer to the hon. and learned Member. Even insurance companies make improvements in their policies; they do not always return the contributions; they make the conditions easier and better. In the present case, all that those who speak for the official Opposition are arguing is that those who receive the policy ought to have their conditions under that policy considerably improved.

I want to reinforce what was said by the hon. Member for Stockton (Mr. Macmillan), because the point he made is possibly the most important point of all. I differ considerably from the view of the hon. Member for East Birkenhead (Mr. White) with regard to the committee. He paid a great tribute to this committee, as though it were doing excellent work. It is easy for this committee to do its work. It enters upon its job at a time when trade is improving. But there have been other committees equally reputable and equally good, and unemployment insurance has been the graveyard of every one of them. To-day this committee, presided over by Sir William Beveridge, happens to meet with favourable conditions. But the question upon which I challenge the committee most is a question which Parliament ought to face up to much more seriously than it has done, and that is that this committee can decide what shall be the conditions of the unemployed. The committee can say what shall be the length of the waiting period, or what a child is to get. It can determine those conditions, and, when it has determined them, the determination of Parliament has to be the same as that of the committee.

Sir William Beveridge may be smart, but my opinion of him differs entirely from that of the hon. Member for East Birkenhead. I have appeared before him. I see nothing of the genius in him; I do not see that he is smart, and I do not accept the view that he is capable on this issue. He may be a first-class director in the School of Economics, but on this issue I do not take him at all as being a capable man. That does not mean to say that he is not capable; it means that I do not take him as capable on this issue, just as I did not take Sir Walter Citrine when he came down to tell us what the Anomalies Act was, and I do not take his advice. He may be able to run a trade union, but he is not capable of instructing the House of Commons on this issue, nor is Sir William Beveridge capable of doing so. His committee can sit round a board, they can amend the scales of benefit, they can alter, they can adjust; and Members of the House of Commons, who have been elected by the people, who have given pledges, who have said what can be done, are the one set of people who can do nothing in regard to it at all. A member of this committee, sitting round a board, could move, I understand, that the waiting period be reduced, or that half the surplus should be allocated to contributions and half to benefits. He could have done those things in that committee, but we in the House of Commons, who are elected for the purpose, cannot do it. What a position ! Moreover, you are not even being governed by a committee who are the best people for it. I do not accept the view that they are.

The point raised by the hon. Member for Stockton is a terribly serious one, namely, that, if we accept what this committee say, we are not determining the conditions of the unemployed for next year, but are determining their conditions for years to come. Everything in the report of the Advisory Committee goes to show that, except in case of war, the figures are almost bound to increase, and that, therefore, the contributions, if they are to be increased in the future, will never be increased for the purposes of benefit or of improving the conditions of the unemployed, but will only be increased for the purpose of balancing the fund. Surely that is a terrible position. To-day the House of Commons is not going to determine those conditions ahead, but the seven people who have signed the Majority Report are the people who will determine it. As a matter of fact, we have not the evidence upon which they have determined their findings. All that we have are these figures. We do not know their evidence. It is not here or, in so far as it is here, it is of the most sketchy type. Whatever evidence has been submitted has been against it. We are told that these are the conditions and they are not likely to get any better. The Government have not accepted their own committee's report because even this committee has not recommended that this should be put into operation until Part II comes. The right hon. Gentleman is playing about for time.

There is another point on which I should like to challenge the right hon. Gentleman, because I do not think he was quite fair. He led the House to believe that this was practically the only cut, because he dealt with no other cut concerning the unemployed. It was not the only cut. The unemployed that we are dealing with to-day have had the most savage cut applied to them, and it has never yet been restored. It is incorrect to say that we restored the cuts to the unemployed. The average man with 30 stamps could draw roughly speaking, 70 weeks standard benefit. To-day he can only draw 26 weeks in a given year. Before, he got back on to standard benefit provided he had 30 stamps in two years. Now he has 10 stamps to get as a further qualification. That is the most serious cut. The hon. Member talks about policy holders. The first thing that should be done is to see that the policy holders are paid their policy. They are not being paid their policy to-day. You can multiply the employers' difficulties tenfold but not one of them has the difficulties of these unemployed whose cuts have not been restored. This Government's display is becoming more and more contemptible. Millions of pounds are handed out to beet sugar, wheat and shipping. You go from one industry to another but, when it comes to the unemployed, there is nothing, and you take £2,000,000 from the Fund and hand it back to the Treasury so that the Treasury may subsidise some other vested interest. The unemployed man's right of appeal to the Court of Referees has been taken from him.

My hon. Friend talked about the waiting period being 10 days. It is longer than 10 days. A man who is paid off on Saturday signs for the next two weeks and on the Friday Light he is handed three days. If he has a wife without children, he has 13s. for the fortnight, or 39s. for three weeks. I leave out the children or we shall be accused of using sob stuff. Is there a man in the House who will say that that man's difficulty is not greater than that of any employer? If a man who is living with his sister is out of work there is nothing for her. If he brought a woman in from the streets and had children there would be something for them. If he was a widower with a daughter to keep house there would be something for her. Why should not a sister get a few miserable shillings? The Treasury is devoting its money either to subsidising its friends or preparing for war. If we were in danger, the first people we should ask to fight are those to whom we are now denying a modicum of justice. The first thing that should be done with the surplus of £6,000,000 is to improve the conditions of these people in their homes. I judge the greatness of a country not by its Government, or its King, or its colonies, or its armies. The test of a nation is the home life of the common people. I hope the House will decide that those who are unfortunate in their home life shall be made more comfortable than they have hitherto been.

6.13 p.m.

Photo of Mr Roland Robinson Mr Roland Robinson , Blackpool

Great credit is due to the Government for its handling of the unemployment situation, which has resulted in a condition whereby the Unemployment Insurance Fund finds itself with a surplus of £6,500,000. The right hon. Gentleman the Member for Wakefield (Mr. Greenwood) said the unemployed would not be glad to see that there was a surplus in the fund. I am convinced that he is wrong, because the reason for the surplus is that over a million of the fellow-men of the unemployed have found jobs. I believe that will be appreciated. I think the situation presented to us by the hon. Member who has just spoken was in many ways a prejudiced one. He suggested that the Government wished to subsidise its friends in one way or another. Surely the answer is that the subsidy is given only because we believe it will provide work for the unemployed men. In addition to that, the Government are providing some £84,000,000 a year in unemployment insurance and unemployment assistance out of public funds. I think that meets the criticism that nothing is done.

Photo of Mr Edward Williams Mr Edward Williams , Ogmore

Surely that is not correct. The men pay their contributions.

Photo of Mr Roland Robinson Mr Roland Robinson , Blackpool

I did not say they did not. I said the amount provided by the Government out of public funds was £84,000,000 per year. Having said that, I feel that in dealing with this most human problem of Unemployment Benefit—after all, it is the bread and butter of the unemployed—it would be rightful to give a few helpful criticisms. Hon. Members on the other side are constantly criticising and playing the part of the sharpshooter day after day, and I feel that when criticism comes from a real friend of the Government, it has a far greater value. There is at the disposal of the committee a surplus of £6,500,0000, and in the report the committee considered whether it would not be possible to extend the principle of Unemployment Insurance beyond the statutory period of 26 weeks. They came to the somewhat remarkable conclusion that Unemploy-Insurance constituted a tax upon employment. In page 16, paragraph 36, of the report, they say: The question cannot, of course, be considered only from the point of view of taxation. … The social advantage of providing for unemployment on the principles of insurance, rather than of relief, must at all times be weighed against the fiscal disadvantage of providing for it by a relatively undesirable form of taxation. That statement, I think, vitiates the whole value of the report. We have here a body of men to whom we are entrusting the future of the Unemployment Insurance scheme, and they say at the outset that, in their opinion, it is a relatively undesirable form of taxation. They prefer relief to insurance, and if their principle and their views were carried to their logical conclusion, there would indeed be no unemployment insurance in this country at all. If they have those views, and if they visualise the ultimate disappearance of the Unemployment Insurance Fund, this House would indeed be exceedingly unwise if we were to accept their advice. The hon. Member for East Birkenhead (Mr. White) said that the committee was a success. In my submission the committee was not a success, because its members admit that they do not believe in the principle of Unemployment Insurance. Having gone so far, they then take the view that, instead of extending insurance as they might have done, a reduction of contributions would offer an easier and a safer method of absorbing the surplus than a raising of benefit would be. Surely it is wrong that they should be looking for an easy and a safe method of absorbing the surplus instead of trying to serve a great national purpose. I believe that they have failed to grasp the fundamental national importance of a highly developed social insurance scheme. I do not believe that they understand the inestimable benefit that these schemes can be to the working men whereby they enable them to receive money from the State to maintain their dignity, and, at the same time, keep them away from the stigma of pauperism.

If we had not had these schemes working during the past 10 years there might have been times when England would have been faced with revolution. The net effect is that there is a vested interest of the working classes in the security of the nation and in the maintenance of our financial stability. Socially, insurance is intended to mitigate the effects of the world economic system against those who can least afford to bear the burden and stand changes in their economic circumstances. I urge upon the House that these schemes can never possibly be complete until they cover the widest possible range of people. Then and only then can you consider reducing the rates of contribution. The hon. and learned Member for Ashford (Mr. Spens) made a speech this afternoon wherein he referred to a shipping insurance scheme during the war and said that when it was found that too much money had been paid into the scheme, it was rightly and properly given back to those who had paid it. That may be true, but in this case surely he had completely forgotten that those who have been paying into the Unemployment Insurance Fund are the whole of the unemployed and not that portion at the moment entitled to draw the statutory rates of benefit. The whole of the unemployed have paid, and the only reason why they have not been able to achieve a full measure of benefit is that in the past the fund has not been in a solvent condition.

There are two things which ought to be done with this surplus. We can in the first place raise the standard rates of benefit, and, in the second place, remove a number of very striking anomalies. One of those anomalies, and to my mind the most important, is that of the seasonal workers, the position whereby men and women working in some particular trade find themselves covered only by insurance in the season. As soon as the season for that particular trade ends they are automatically thrown out of work and on to the means test. That situation happens in every seaside holiday resort in this country. You find people reasonably sure of jobs during the summer getting a living wage and very little more, and contributing regularly to the Insurance Fund. As soon as they are thrown out of work at the end of the season they cannot draw benefit as a right but only as a matter of relief. There is no alternative work for them, and when they most need the benefit of insurance they cannot get it.

To illustrate the position, I will mention what happens in Blackpool during the winter. There we have thousands of people who have no possible hope of jobs. They are living on a standard of relief which can give them none of the comforts of life, and in that town, under the leadership of the Council of Social Service, there are some 16 organisations trying to help these people who are out of employment. In December it was necessary, in addition to what was provided from Unemployment Assistance to give 580 families food relief. In January, 580 families had to be given food relief, and in February 620 families, and in addition we provided free meals for over 1,000 people at Christmas. That position exists in varying degrees in every seaside resort in England. We are not giving that help merely because we are kind-hearted people, but because we are firmly convinced in our hearts of a deep-rooted social injustice which deprives decent men and women of the right to maintain a fair standard of living in their homes during the sinter months. Readily we agree that the Seasonal Workers Order of lag summer did a great deal to mitigate the situation. It was welcomed throne out the country. But now is the time to complete the good work that was begun in the summer and give these people who are on seasonal work the fullest possible amount of benefit. I would say to the right hon. Gentleman, "Tear yourself away from the fascination of a penny saved," and, instead, remove the anomaly which has become so great that it amounts to a crying injustice.

The second alternative is an increase in the rates of benefit. It is clearly agreed that any addition to the rate of benefit to an unemployed man would meet his most urgent needs, whereas an extra penny to the workman who is employed and to the employer will hardly be felt at all. As the committee said in their report, those who pay these pennies have got used to it and they have adjusted their standard of living to meet it. On reading through the details of the report, the only evidence in favour of the reduction of weekly payments came from that one body representing employers. I was most interested in the paragraph where it is said that the statistics show that the savings would be so small as to make it impossible to pass on the benefits or to use it in securing contracts. Mr. Shaw well illustrated the point, but the right hon. Gentleman the Member for Wakefield did not point out this fact. Mr. Shaw's figures were not merely those produced by a dissenting member of the committee, but some of them were embodied in the body of the report itself, and especially the illustration about the building of a £90,000 cargo vessel where the saving through these proposals would be as small a sum as £43.

In the North of England we are particularly interested in cotton and in wool, and when we have to bring our minds to bear on those proposals, it is astonishing to think that people can consider the benefits real when in the cotton industry, out of a turnover of £132,701,000, the saving amounts to about £63,000 a year, and when, in the woollen industry, out of £101,870,000, there is a saving of about £41,000. The saving thus effected is so small that when parcelled out among individual firms it cannot possibly do anything to help trade and industry. The committee, looking at it from the point of view of workmen, said that the saving of a penny a week was negligible, and then, because they are going to give their findings the other way, they add all the pennies together, and say that they amounted to £40,000 a week, and that this is a big sum. We have to consider it in view of the fact that the money is going out at the rate of 1d. a man and in that way cannot give any real help.

The committee say that to take 1d. off the contribution would cost practically the same as adding 3s. per week to the standard rate. They add: Can it he doubted that the latter use would give more general satisfaction? I feel that Members of the House of Commons will agree with them when they utter that particular sentence.There are other alternatives. We can increase the children's benefit. The right hon. Gentleman the Member for Wakefield rightly said that pressure came from the National Government supporters in the last Parliament, and that it was we who pressed for it. We can reduce the waiting period. Finally, the committee say that they regret having to come to this decision while the future of unemployment assistance is unsettled. This decision must stabilise the benefits for a number of years. It might be that my right hon. Friend, when he is dealing with unemployment assistance, might feel called upon to give some increase in benefit rates and to remove some anomalies. How unusual it would be if he were face to face with the position that the payments by way of relief were to be higher than insurance payments, which are obtained by way of right.

It was pointed out by the committee, and the House must be fully conscious of it, that the choice between a reduction of payments and an increase of benefits is a major point of social policy, and that the responsibility for the choice rests not with the committee but with the Members of the House of Commons. It is a responsibility that we should not shirk. We should not complacently accept a report which we cannot help but believe is bad. The committee have treated the matter merely from the point of view of accountancy. They have no conception of the importance, either present or potential, of the Unemployment Insurance scheme to this country. It has been their business to strike a balance in cold blood. Having a surplus, they want to dispose of it in the easiest manner possible. forgetting that in our Unemployment Insurance scheme we have the finest piece of social work ever undertaken by any community. I appeal to my right hon. Friend, before it is too late, to realise that here is an opportunity for him and for the Cabinet to prove their inherent greatness by reversing this decision and rejecting the shortsighted, anti-social policy of the committee. Let them show courage and imagination. Let them have the vision of statesmen and bring forward a new scheme of extended benefit which will prove a blessing to the people of England.

6.32 p.m.

Photo of Mr Ellis Smith Mr Ellis Smith , Stoke-on-Trent Stoke

During the past few weeks we have had debates on many subjects such as subsidies to tramp shipping, when the benches opposite were packed with Members. We have had debates dealing with the Air Force, with the subsidy to Imperial Airways, with foreign policy, with the armed forces, and on each occasion the benches have been packed with supporters of the Government. To-day we are dealing with a question which vitally affects the lives of the poorest people in the country, and we find that out of 400 supporters of the National Government not more than 30 are present to hear the discussion.

Photo of Mr Alfred Denville Mr Alfred Denville , Newcastle upon Tyne Central

Do not be unfair. How many Members of the Labour Party are present?

Photo of Mr Ellis Smith Mr Ellis Smith , Stoke-on-Trent Stoke

The hon. Member, quite rightly, interrupts and asks how many of our Members are present. I welcome that interjection and I would ask him to count the number of our supporters and then calculate the proportionate difference there is between the representatives a the 400 Government supporters and our strength of 150.

Notice taken that 40 Members were not present; House counted, and 40 members being present

Photo of Mr Ellis Smith Mr Ellis Smith , Stoke-on-Trent Stoke

When the Minister of Labour was dealing with the report he claimed that the success of the scheme was mainly due to the administration of the Statutory Committee. He did not mention the great improvement in trade that has taken place not only in this country but throughout the world, which has enabled the committee to accumulate its surplus. He then dealt with the report and stated that the Statutory Committee had asked the advice of the Economic Council with regard to the future of unemployment. He said the Economic Council had stated that during the next ten years there would be an average number of unemployed of between 15 and 16 per cent, and that during a further eight years the average would be 16¼ to 16¾ per cent. May I draw attention to the Ministry of Labour Gazette for March last which show s that the percentage of unemployment at present is 15.4. With the number of unemployed decreasing, in view of the Governments' expenditure on armaments, the probability is that the figure will be less than 15.4 per cent.

The Minister did not say anything about the expense which the fund has to bear with regard to interest on its loans. We consider that the mil ole nation should bear the cost of that. We are supported in that view by the right hon. Member for Epping (Mr. Churchill) in a speech which he made on 4th April. 1930. I wish the right hon. Gentleman had been present now, because I am convinced that he would have been inclined to support us to-day if he had heard the reasons put forward from this side why the committee report should be turned down. He said that it might well be that an increase of indirect taxation borne by the whole of the consumers would be preferable to raising the millions for the maintenance of the Unemployment Fund directly as a tax upon the regularly employed workmen in the prosperous industries.

In the report we find that £5,000,000 is set aside for debt services. The American debt can be repudiated, the National Debt can be allowed to remain and be spread over the whole population, but the debt and the Unemployment Insurance Fund must be borne by those employed in industry. On page 3 of the report we see another very serious effect on the fund. The rate of interest charged against the fund by the Exchequer is 4.5 per cent. I suggest that that is a relatively high rate of interest in these days, and ought not to be charged. On page 91 of the Ministry of Labour Gazette for March we see the serious economic consequences of the report that is being put forward to-day by the Minister. I would draw attention to the economic consequences of the policy the Government are pursuing. We find that the average number of unemployed in London is 9.1, in the south-east area 9.9, in the south-west 12.2, in tin midlands 10.7, in the north-east 18.8, in I he north-west 19.1, in Scotland 21.4 and Wales 32.2. The reason why I draw attention to these percentages is to point out the serious effect of a report of this character on those industrial centres.

During the great controversy that took place some time ago with regard to the effect of Part II of the Act, we found that in South Wales, Lancashire, North Staffordshire and the North-East Coast, the whole of the population were unanimously indignant against the introduction of the Regulations. There must be something far deeper than any agitation from our point of view which brought about that protest. It was brought about very largely because every penny that is put into the pockets of unemployed and employed men is spent in the shops of the district where they live, while pennies put into the pockets of the employers are not necessarily spent in the industrial districts. If benefits had been increased there would have been a direct effect on the purchasing power and the consuming power of the workers, and that would have reflected itself in the takings over the counters of the shops in the industrial centres.

We find that the unequal development of capitalism is having a very serious effect on employment in the North. Owing to that unequal development more and more capital is being put into the aircraft industry and the wireless industry, which are not really of basic value to the country. The result is that in the South there is thriving industry and a low percentage of unemployment, whereas in the industrial North the basic industries are being seriously affected, those who are employed are having to work harder than ever and there is a larger percentage of unemployment. This has had, and will have, very serious economic consequences, not only to the ordinary working people but to the local shopkeepers in the industrial North.

The report of the Statutory Committee shows a surplus at their disposal. They have suggested, and the Government are accepting their report, a reduction of 1d. a week in the contributions of those who are employed. My mind goes back to the years 1929, 1930, 1931 and 1932, when unemployment was going up. During that time the people in the industrial centres bore a greater responsibility for the maintenance of the unemployed than they should ever have been expected to bear. The trade unions bore a greater responsibility than is generally recognised either by this House or the country. In one trade union that I know of—and the same will apply to other unions—men were paying contributions of 1s. 9d. a week in order to assist their fellows who were unemployed through no fault of their own, and these same men levied themselves to the extent of 3s. a week in order that benefits could be maintained at as high a level as possible. Yet to-day the Minister of Labour comes forward and asks us to accept a report in order that contributions can be reduced 1d. a week. I am as much in touch with the average person in industry as anyone in the House. I recently spent 25 years in industry and came from one of the biggest factories to this House.

If the workers of this country could vote on the question whether they should go on paying 1d. per week less or have increased benefits, the majority would vote for an increase in benefits. The first to suffer in 1931 were the unemployed. I shall never forget the General Election of that year when our supporters came up to tell us that the Lord President of the Council, speaking on the wireless with tears in his eyes, called upon the unemployed to agree to the economy cuts which were being carried through. The Lord President of the Council told the unemployed that they would be the first to have their cuts restored. The promises made in 1931 are being betrayed this afternoon, if this report is agreed to. Nearly all cuts have been restored, to the civil servants and to all other people, but the unfortunate unemployed, the poorest of the poor, have not had their cuts restored. The surplus, which could have been used to improve the condition of the many, is being used to suit the needs of the National Confederation of Employers. We have heard a lot as to who was responsible for the introduction of the means test, who was the first to suggest it. It was not this party. It was the National Confederation of Employers who first suggested the introduction of a means test, and the Government agreed to it just as they are going to agree with this report. If the policy of the Government is agreed to it means that unemployment benefit will be stabilised for some time to come.

What could have been done with this surplus? Benefits could have been increased on the average by 1s. a week for every man and woman unemployed; the waiting period could have been reduced to three days; the wife's benefit could have been increased by 1s. a week; and the allowance for every child could have been increased by 1s. per week, and then something of the surplus would be left over. I have seen one or two hon. Members of this House smiling at some of the arguments which have been put forward. It is easy for people to smile who have not had to go through some of the hardships which some of our friends have had to endure. They are men who are as good as any man in this House or in the Civil Service. These are the people who are being subjected to this treatment, and I welcome the support which is to be given us to-night by some hon. Members who usually support the Government. I hope that sufficient reasons will be produced to enable many hon. Members who usually support the Government to vote with us this evening, for by so doing we shall be reflecting the feelings of the masses of the people of this country.

6.50 p.m.

Photo of Mr Gwilym Rowlands Mr Gwilym Rowlands , Flintshire

I am rather surprised that the report of the Statutory Committee and the recommendations of the Government have not been better received by hon. Members opposite. Looking back over the history of unemployment insurance we can congratulate the Government on the comfortable position in which the fund is now. The hon. Member for Stoke (Mr. E. Smith) has referred to the depressing years of 1929–30. I also remember those years, and I can recall the position of the Unemployment Insurance Fund at that time when the State had to borrow £1,000,000 per week in order to pay unemployment benefit. In 1931, when the climax came, there was no difficulty in getting employers to pay an increased contribution, no difficulty in getting workers to pay an increased contribution, and, I am glad to say, no difficulty at all in getting the unemployed to accept cuts in their benefits. The patriotism and loyalty of these people was reflected in the fact that they voted in their hundreds and thousands for the very Government which had imposed these necessary cuts. To-day the position is infinitely better. What has made it better? It is the trade policy of the National Government. An improvement in trade and in employment has resulted in the Statutory Committee being able to report a surplus of £6,500,000. Some hon. Members have criticised the Statutory Committee for some of their recommendations. The committee are able to advise and recommend or these important questions, and for that reason I should hesitate before rejecting any recommendations they might make. One of the first things the Government did was to restore the cuts to the unemployed. They have even done more than that, because in October of last year they increased the children's benefit from 2s. to 3s., and that costs £1,250,000. For hon. Members to suggest that the cuts have not been restored is to suggest what they know is not true.

Photo of Sir Frederick Messer Sir Frederick Messer , Tottenham South

The people who suffered the cuts did not get them back.

Photo of Mr Gwilym Rowlands Mr Gwilym Rowlands , Flintshire

My intelligence does not appreciate the importance of that interruption.

Photo of Mr Edward Williams Mr Edward Williams , Ogmore

The unemployed in their 10 per cent. cut sustained a cut of nearly £14,000,000 a year, and they have not received a single farthing of that enormous amount.

Photo of Mr Gwilym Rowlands Mr Gwilym Rowlands , Flintshire

The cuts of the unemployed have been restored in the same sense as they have been restored to everybody else, and hon. Members opposite are simply quibbling on the matter. Do they suggest that because we asked the teachers to submit to a 10 per cent. cut that we should now increase their-salary by 20 per cent. in order to compensate them? Everybody endured cuts, and consequently to have restored the cuts by way of unemployment benefit upon the scale which used to be paid was fulfilling the promise made that the cuts to the unemployed would be restored. I observe that the report of the Statutory Committee makes a point that it would have been better if the Unemployment Insurance regulations had been before the House, and some hon. Members have emphasised that important point. A criticism has been made that it is intended to dispose of the surplus by reducing contributions. Inasmuch as the contributions of the employer, the employed and the State were increased, and inasmuch as all the cuts have been restored, it is only fair to industry as a whole to reduce the contributions.

We should all like to see the benefits increased, but inasmuch as we do not know what are to be the proposals of the Unemployment Assistance Board in their regulations, it does somewhat militate against the possibility of disposing of this surplus by way of increased benefits. While the statutory benefit can be fixed, although it may not be what we should like to see, there is nothing to prevent the Minister of Labour, if he thinks the conditions justify it, in making the Unemployment Insurance regulations a lot more generous and the benefits also more generous, because it is when an individual has drawn his full statutory benefit, after he has been six months unemployed that he needs it most. The hon. Member for Gorbals (Mr. Buchanan) said that this was not an insurance fund. We nearly lost it as an insurance fund in the years 1929 to 1931, but thank goodness it has been placed on an insurance basis again and I hope it is the intention of the Government to retain its insurance nature, and not put forward proposals for increased benefits which might have the result of making the fund insolvent once again. It is by far the better policy to accept the recommendations of the Statutory Committee. Taking the long view, I think that the relief given to industry will have a substantial effect upon reducing the unemployment figures, and for that reason I have pleasure in supporting the Government.

6.56 p.m.

Photo of Mr John Tinker Mr John Tinker , Leigh

This is one of those occasions when we are doubtful whether we did right in placing these duties on a statutory body, but Parliament decided to do so and now we have to express our opinion as to whether we agree with the recommendations of this statutory body or not. There is not much likelihood of the recommendations being changed, but the views expressed by hon. Members this evening might have some effect later on when the committee has to deal with another surplus. If we did not criticise their action to-night it might be taken that everyone was in full agreement with what has been done. That is not the case. We think that this money could have been expended in quite a different way. I also question very much the way in which the committee propose to deal with the debt. I have always held the view that the debt on the Unemployment Insurance Fund ought to have been swept away. It was created at a time of national emergency, and there ought to be no question of it being repaid. It would be far better to sweep it away and devote this surplus in quite a different way. I also think that the rate of interest, over 4 per cent., is too high as compared with the rate of interest prevailing in the money market.

Photo of Wing Commander Archibald James Wing Commander Archibald James , Wellingborough

The hon. Member talks about sweeping away the debt. How would he sweep away a debt of £105,000,000?

Photo of Mr John Tinker Mr John Tinker , Leigh

I should pay it out of the National Exchequer. I should put the burden on the whole of the nation, not on those in the fund.

Photo of Mr John Tinker Mr John Tinker , Leigh

I do not appreciate the point of the hon. and gallant Member. I would put the debt on to the whole of the country, not on those in the fund. There are two points of view in regard to the method of dealing with the surplus. I can well understand the Government arguing that as the contributions were raised last they ought now to be reduced. I objected then to their being raised, but, having been raised, I do not think we should be wise at this moment in reducing them. By the method adopted in this Motion the whole of the surplus is being given back by a lowering of the contribution. In other words, the workers will get £2,200,000, and the State and the employers will get a corresponding amount. It would have been far better if the whole of the surplus had been given in increased benefits. The whole of it would then have gone at once into circulation, and we should have had this £6,000,000 being spent by people in direct need of it, and week after week the money would have gone into the market. Every unemployed man or woman when they get their benefit spend the money as quickly as they can because it is needed. When a man falls out of work the money he has coining in becomes less than it was before. Assuming that he was spending his weekly wage before—and Heaven knows they require all they get in wages—then at once, when he gets his unemployment benefit, he must spend it. By increasing the amount of benefits that money would be put straight into use.

By the method we are adopting here we are saying to the State, "You retain £2,200,000." You may argue that it will be spent in some other way. It will, but it will be by reduced taxation and that will cover the whole community, and many of those who get the benefit of reduced taxation may be men and women who have no need of the reduction. Those who pay Income Tax do not as a rule spend all their money. That £2,200,000 will not go readily into the market and be spent to improve trade. It may be hoarded by the banks, but it will be practically dead in regard to its effect in the market. I claim also that the money we are giving to the employers will not go into the spending market as quickly as it would if it were given in increased benefits. Many employers keep money by them ready to use in the expansion of their works, and there is no shortage of money at present. So we find that two-thirds of this surplus will be practically dead for a long time, and will not be spent. There is only one way to get trade reviving, and that is by giving increased spending power to the people. The more money the workers get the more quickly will industry revive. By following the proposals of the Statutory Committee we are stopping that, and that is why I think the Government have taken a wrong line in not saying that they will give it all in increased benefits.

The Minister of Labour said there was a possibility that if unemployment benefits were increased to a certain point they might catch up with the lower wages in some industries. I take that to be an argument that in his mind it is well to keep unemployment benefit at low rates so that it shall not be too close on the lower rates of wages; that there is a possibility, by increasing the rates of unemployment benefit, that it might be made better for a man to be unemployed rather than to follow some of the lower-paid industries. If that is in the mind of any hon. Member opposite, it is his duty to see that the wages in the lower-paid industries are raised. I condemn the proposals of the Statutory Committee. They are founded on wrong principles, and there would have been greater approval in the country if the committee had decided to increase the benefits. If you were to take a vote of all the workers on the question whether they were prepared to contribute this extra penny or have increased benefits, you would get 90 per cent. voting in favour of the increased benefits. The workers would decide instantly for that as the better solution.

7.7 p.m.

Photo of Mr Austin Hopkinson Mr Austin Hopkinson , Mossley

It is a pleasure to find that this Debate has been conducted in the tone adopted by the last speaker. In the past, many Debates on this subject have been characterised by an acrimonious exchange between one side of the House and the other which is pleasantly lacking to-night. There were one or two points in the speech of the hon. Member to which I would like to refer. He said that if we increased the amount paid in unemployment benefit we should thereby increase the amount spent. The only wry to increase purchasing power is to raise the aggregate of wages paid to the workers. If you pay a man for producing nothing, the only effect is to put up retail prices against his fellow-workers and fellow-unemployed, and not really to increase purchasing power.

Photo of Mr Edward Williams Mr Edward Williams , Ogmore

Is it not correct that one of the three laws of currency is determined by the speed of circulation?

Photo of Mr Austin Hopkinson Mr Austin Hopkinson , Mossley

I am not dealing with that at the moment. I am giving these facts without any technical language. It does not increase purchasing power if you do not simultaneously get for the money payment a return for the money paid. The only solution of the problem is to increase week by week the aggregate amount of wages paid. From where comes all the money that goes into the Unemployment Fund? It comes out of productive industry entirely, and it does not matter whether you call it the State or the workers' or the employers' contribution. It does not matter if you borrow the money, call it Super-tax or Income Tax. Every penny has to come sooner or later out of productive industry. I made an offer some time ago to the trade union with which I am concerned, and I suggested that it was an offer which other employers in the engineering trade should consider. The offer was to raise the wages of our workers by the amount of the unemployment insurance premiums on condition that they paid the whole of the premium. It would not have made any difference. It has to come out of their pockets in the long run.

The point really is that if you rob the Sinking Fund as suggested by hon. Members opposite, in other words, if you do not pay off the debt, you really in the long run do not benefit the workers. The object must be to reduce the wages of capital and raise correspondingly the wages of labour. That is what we all in our hearts are desirous of seeing. The way to reduce the wages of capital is to pursue policies exactly the opposite of those pursued by hon. Members opposite when they formed the Government. The only effect of having a Labour Government is to increase to an enormous extent the wages of capital, and to that extent to reduce the wages of labour. When in 1931 we were able to terminate that policy we found that the wages of capital at once began to go down—and the wages of capital are precious little nowadays—and the wages of labour went up and up in proportion, which is what we on this side want to see more and more in the future.

But to return to the point of increasing the actual aggregate of money wages paid. Every man who is employed is contributing to keep those who are unemployed. To that extent the wage he draws at the end of the week is not a full wage and the larger the number of unemployed at any given time the smaller is the real wage of the men who get the work. It is for this House to consider to what degree it is fair to put this burden on the workers for the benefit of those who are out of work. It is a very difficult problem for each of us to solve. I hope hon. Members opposite will agree with me that it is our view not to throw an intolerable burden on those who are in work, and, in the case of the industry with which the hon. Gentleman who spoke last is concerned, who are in work in many cases for a pitifully poor wage. We should be neglecting our duty if, for the sake of popularity, we were to increase the burden on the man in work until his willing back is broken by maintaining too high a standard for those who have the misfortune to be out of work.

7.15 p.m.

Photo of Mr Edward Williams Mr Edward Williams , Ogmore

I am sure it will be difficult for any hon. Member on this side of the House to accept the economic doctrine advanced by the hon. Member for Mossley (Mr. Hopkinson). I am sure that if the hon. Member inquired into economics he would find that the amount of purchasing power in the country is determined by the speed of circulation. I would, however, like to put to the hon. Member one point particularly with reference to his remarks regarding the Sinking Fund. In 1931, the unemployed in this country were obliged to face a, 10 per cent. cut, which they had to sustain for three years. It is estimated that the cut yielded practically £60,000,000. In addition, the means test was applied to those who had previously come on to transitional payments, and it is estimated that this yielded more than £40,000,000. Consequently, the unemployed have already contributed a capital sum of more than £100,000,000. Does not the hon. Member agree that that amount of money should of itself meet the borrowings of about £100,000,000?

Photo of Mr Austin Hopkinson Mr Austin Hopkinson , Mossley

The hon. Member has asked me a question to which perhaps he would like a reply. I entirely disagree with him. The unemployed, by the regulations to which the hon. Member referred, have returned to the other workers of the country a very small percentage of the vast sums, amounting to hundreds of millions, which the other workers have paid to the unemployed in the past.

Photo of Mr Edward Williams Mr Edward Williams , Ogmore

The hon. Member has not grasped the point at all. The unemployed have made a contribution of more than £100,000,000.

Photo of Mr Austin Hopkinson Mr Austin Hopkinson , Mossley

No, that is not the case. If you give a man £100 and subsequently he returns to you £1, you cannot say you are indebted to him to the extent of £1 and he is indebted to you to the extent of £99.

Photo of Mr Edward Williams Mr Edward Williams , Ogmore

The hon. Member infers, of course, that the unemployed man may not be the same person, but it is to the same fund.

Photo of Mr Austin Hopkinson Mr Austin Hopkinson , Mossley

The unemployed have made no contribution at all.

Photo of Mr Edward Williams Mr Edward Williams , Ogmore

I put forward the argument in order that the hon. Member may reflect upon it. During the last five years the National Government have made the unemployed sustain that enormous cut either by way of cuts in unemployment benefits or in transitional payments. That is the fact facing the unemployed of this country to-day. Moreover, the National Government have perpetrated a system which makes it impossible for persons who have been working for years, and who are unfortunate enough to be members of a family which may be unemployed, to receive the whole of the wages they earn in that they have to help to maintain their dependants. There is another point I would put to the hon. Member for Mossley. It would seem that when borrowing has to take place in order to maintain the unemployed, it is a vile thing, but when it is for the purpose of making preparations for the Defence Forces of the country, it is a virtuous thing. I would ask the hon. Member to reflect upon that.

It is very difficult, particularly after listening to the speech of the Minister this afternoon, to understand why the recommendations of the committee should have been so wholly accepted by the Government. In reading the two Minority Reports, and particularly the figures contained in the report by Mr. Shaw, hon. Members will find that if the sum of £6,500,000 were distributed in such a way as to reduce the waiting period and increase the benefits, it would certainly have a far more beneficial effect upon the nation in general than would the reduction of the contribution by ld. It would seem that we have reached a stage in the government of this country when even the Cabinet is losing authority in matters of policy. Boards and committees are appointed to make recommendations. They make those recommendations largely on an actuarial basis, and because they are not composed of persons elected by the people, they have no regard at all for humane considerations. They merely propound their recommendations upon what is sometimes a hypothetical basis.

For instance, this afternoon I asked the Minister whether the Government's Defence programme had been taken into consideration by the Statutory Committee, and he replied that all things had been considered. We are not yet able to understand whether that defence programme was taken into account, and naturally it largely depends on the time at which the recommendations were made. The persons on the committee were very intelligent men in their spheres. We have heard them broadcast and we have been able to appreciate some of their writings, but in this matter they were concerned merely with balancing the fund upon some hypothetical basis, and they were certainly not concerned about the plight of millions of people in this country.

A report has been published by Sir John Orr in which he indicates that there are about 4,500,000 people in this country who are suffering from malnutrition. Here is an opportunity to distribute this sum of £6,500,000 in a way which would help the people who are suffering most. All that has been ignored. I appreciate that if a committee is appointed to make recommendations to the Government, and if the Government have a policy, as have the present Government, of low wages, and if the recommendations made are largely in consonance with that policy, the Government will be prepared wholly to accept them. It is that which has happened in this case. From the very beginning the Government have not favoured the policy of increasing wages. They have no remedy at all for the unemployment problem. Even the committee admitted in all their actuarial calculations that 16 per cent. of the people are to be unemployed.

The Government make no serious attempt to tackle the problem of the distressed areas, nor do they make any serious effort to deal with the staple industries of the country, except through rearmament. There is an ever-increasing tendency to construct small industries for the production of consumption goods, and not to help to revive industry by increasing the production of capital goods, so that the distressed areas, which depend on the construction of capital goods, have to remain distressed In South Wales there are 32 per cent. of unemployed, rates are always increasing, purchasing power is always contracting, and this means that there can be no market in a distressed area, because wages are low

The reason for this distress is low purchasing power. The reason we cannot get industries into the distressed areas is that there is in those areas a low purchasing capacity. It will be impossible to have new industries in those areas unless an increased purchasing capacity can be given them. Here is the opportunity. In these areas there is an enormous number of persons unemployed, and proportionately they would receive a greater amount of the £6,500,000. To that extent we should be able to induce new industries to go into the areas, because we should be able to expand the markets by increasing the purchasing capacity of the people. It would seem that the economic policy of the Government is deliberately designed to place the distressed areas in a worse position than that in which they are. I hope the Minister will reflect upon the many things that have been said to him from all sides of the House to-night.

It is not a stroke of ingenuity on the part of the Government that they have made the Unemployment Insurance Fund solvent, when, on the one hand, there were increased contributions, and, on the other, reduced benefits. Almost an idiot could propound a solution for a problem on those lines. The contributions were increased by over 30 per cent. and the benefits were cut by 10 per cent., and there was an easy solution for what seems to have been for the Government a really difficult national problem. I do not wish to enter into a discussion regarding the statements made by hon. Members on the other side, particularly the two speeches I heard regarding the cause of the crisis. The Government have been obliged to tackle the cause of the crisis; they have been obliged to reduce the enormous interest charges on War Loans. Is there any reason for the high interest charges which still exist there?

I hope the Minister will endeavour to realise that by putting this money into the hands of the common people of the country and by removing the grievous anomalies which obtain to-day, he would expand the purchasing power of the people and help to relieve what in many areas is dire starvation. There are thousands of people in the South Wales valleys, in the Rhondda Valley and in various places in my own constituency, who are ill-clad and ill-shod, who have nowhere to turn, who are faced with penury and misery from day to day, who are ashamed to send their children to school because they are so badly clothed, and who never have a reasonably good meal. If the Minister would give to those people some hope that they would have just 1s. per week extra, it would help to lessen the gloom of their lives, it would give them a ray of hope, and would bring a little sunshine into the lives of their children.

7.29 p.m.

Photo of Mr Harold Balfour Mr Harold Balfour , Isle of Thanet

I think the hon. Member for Ogmore (Mr. E. J. Williams), who expressed his point of view in a very positive manner, and other hon. Members, ought to be grateful to the Government in that in this year of grace 1936 we are able to debate from a Parliamentary point of view the disposal of a surplus. Had hon. Members on the Front Bench opposite and their friends been in control of the country and continued at the pace they were going between 1929 and 1931, irrespective of the causes, the effect would have been that if we were here to-day we would not be in the happy position of considering how to dispose of a surplus.

There are two observations I would like to make, the one of a general nature, and the other of a particular nature as to how I think in some ways this money could be better spent. In the first place, is the House wise at the present time not to start considering whether we are right in discussing unemployment insurance benefits in relation to contributions as a segregated item in our insurance system? Are we wise to have a Statutory Committee presenting a. report on Unemployment Insurance, when there are all these other forms of insurance, which have so entered into our national life that I do not believe we can continue indefinitely to deal with Unemployment Insurance, Health Insurance and Contributory Pensions Insurance as separate entities. Hon. Members above the Gangway think, and they are entitled to their thoughts, that this Debate is one of the signs of the decline and fall of capitalism. I suggest, however, that it is one of the signs of the rise of capitalism. It is only in the last 50 years or so that we in this country have come to a sense of social conscience and have realised that our task is to make every man a capitalist, whether he possesses money or not, if he possesses the skill and ability to perform some particular duty in our industrial life. A man's capital may not be represented by pounds, shilling and pence in the bank, but, by our system of national insurance in its various forms we are making every man a capitalist, in that the State is capitalising many hundreds of pounds in respect of every man's working life in industry.

In the not distant future we shall have to consider the possibility of a Ministry of Insurance to co-ordinate the various phases of national insurance. One finds in all the large towns of this country insurance officers investigating the particular circumstances of Unemployment Insurance. There are also officers investigating contributory insurance under the Ministry of Health and pensions insurance under the Ministry of Pensions. In each large town you will find these three officials investigating three different kinds of insurance, but all working on the same lines, inquiring into the lives and conditions of the people, and probably not one of those officials would be able to recognise either of the others if they met in the street. Certainly not one of them knows the scope of the work or the character of the investigation which the others are carrying out, and I believe that to be a weakness in our present system. Most of us accept gladly this report of the Statutory Committee, but it ought to be recognised that this is, possibly, one of a declining number of occasions on which we shall be called upon to investigate these segregated insurances. We may have to think in future of insurance on a national basis under a Ministry of Insurance.

The special observations which I desire to make refer to another way in which this money could be spent. My hon. Friend the Member for Blackpool (Mr. J. R. Robinson) referred to seasonal workers. A great deal has been done for the seasonal workers by amending the Regulations under the Anomalies Act. We all recognise that their position has been improved considerably. Nevertheless, with this money available, I think that some of it, at any rate, could have been spent more wisely if it had been devoted to the cases of seasonal workers and married women. I would draw attention to the Regulations concerning married women. They do not take into considerations length of employment prior to marriage, and I can best indicate the position by quoting the case of a woman who had been employed in a shop for five years. She left on 25th December, 1935, to get married. She fell out of employment, and a claim was made on 30th December, 1935, but was disallowed by the court of referees on the ground that the applicant had materially lessened her prospect, of employment by marriage. A married women, in respect of whom only 30 contributions have been paid, and who has been employed in domestic service or laundry work, can claim benefit, as her prospects of employment, it is held, have not been materially lessened by marriage, and she can continue to draw benefit for an indefinite period.

Some of this money might have been spent in arranging that married women should be allowed at least a quarter before being submitted to the statutory authorities or alternatively, like seasonal workers, that in the case of a married woman a certain number of contributions paid before marriage should entitle her to a limited period of benefit. I revert briefly to the general observation with which I commenced. When the right hon. Gentleman replies I would ask him, in the interest of hon. Members in all parts of the House, to say whether he visualises an indefinite prolongation of the segregation of insurance into different branches or whether he sees in the future some prospect of co-ordinated insurance which I feel is lacking at the present time.

7.36 p.m.

Photo of Mr Thomas Sexton Mr Thomas Sexton , Barnard Castle

I want to draw the attention of the House to some interesting figures in this report. On page 3, paragraph 5, we find that the interest on the debt amounted to £4,769,000. Further on we find that the benefit paid was £44,000,000 which means that for every £1 paid in unemployment benefit 2s. was paid to the recipients of interest. Then we find that the administration costs were £4,500,000 amounting again to 2s. for every £1 which the unemployed worker got. The interest which the fund is paying on borrowed money is at the rate of 4.2 per cent., but when I turn to the end of the report I find that the interest which we are receiving on our balance is only 1¼ per cent. If we paid interest only at the same rate as the rate of interest which we receive, we would have saved for the fund nearly £3,500,000 which would be a very useful contribution towards increasing benefit or reducing the waiting period. But as usual the rentier and the. financial profiteer must have his pound of flesh, no matter what happens to the unemployed man.

I had a letter yesterday asking me to support the reduction of the waiting period to three days. I represent part of a special area and I know the abject misery which exists owing to the present waiting period. The period amounts to 12 days because, in addition to the six waiting days, there are six further days which must elapse before any payment can be received. According to Mr. Shaw's note the reduction to three waiting days could be made at a cost of £1,250,000. I think the money would have been better spent in that way than in reducing contributions. The increased benefit which could be paid with the remaining £4,250,000 would represent £2 per head, per year, to the unemployed—not a very large sum but yet enough to provide some of our unemployed men with a, suit of clothes per year or some of their wives with a dress per year. We find women to-day being compelled by economic conditions to go to jumble sales and fight one with another for cheap dresses, snatching them out of each other's hands. In the same way, women are reduced to go to jumble sales to get boots and clothes for their men folk.

It is not that our people like to wear second-hand or third-hand clothes. It is not that they deserve second-hand or third-hand clothes. They deserve the best clothes in the country because they are producers of all the wealth of the country. When I read, as I sometimes do, the advertisement columns of the capitalist Press, especially the "Observer," and when I see coats advertised at £2,000 each, I wonder in what kind of society we are living. Those coats costing £2,000 each are made to wear and somebody must buy them, but they are certainly not bought by the people who are on the Unemployment Fund. I have seen in my own district hanging in the back yards sheets and blankets so patched that one could not tell what the original material was. There used to be a saying when I was a boy: Patch next to patch is neighbourly but patch on patch is beggarly. With most of these poor people to-day it is a case of "patch on patch" because of the meagre pittances which they are receiving. I beg the Government not to save this money as they are striving to save it. I ask them to spend it and to spend as much more to help these people, and if the debt does mount up, then let them do with it as they have done with the debt to America and pay by token.

7.41 p.m.

Photo of Mr James Guy Mr James Guy , Edinburgh Central

There has been a certain volume of criticism against the proposals of the Government as to how this £6,500,000 is to be distributed. I can imagine what the criticism would have been, however, if the problem before the House was that of meeting a deficit of £6,500,000, and if in 1934 there had been a miscalculation as to how the fund would work out, leading to such a deficit. As it is, owing to the very conservative estimate made in 1934 and the very considerable reduction in the total of unemployment since 1934, we are in the fortunate position of having a, surplus and not a deficit. The criticisms offered to day have narrowed down to one point, namely, that this money, instead of being used for the reduction of contributions, should be used for increasing benefit. I agree that there is a great deal to be said for that view, but having studied the report of the Statutory Committee I think that that body applied their minds in a judicial and reasonable way to the various alternatives, that they carefully balanced all the considerations involved, and that they have, rightly, come down on the side of reduction of contributions.

It is not as though there had been no concessions since 1934. It has been possible to make several concessions as a reult of the careful administration of the fund. First, we had the restoration of the 10 per cent. cut in benefit and that, it must be remembered, is coupled with the indirect concession of the fall in the cost of living. I find that hon. Members opposite, time and again, fail to take into consideration this question of the cost of living. They forget that when you have a certain amount of weekly income the purchasing power of that income is dependent upon the prevailing prices. A second concession which has not been mentioned is the concession to the seasonal workers. It is a small concession, but they may get another.

Then there was, before the General Election, the concession on the children's allowances, which cost £1,250,000. It was said at the time of the election that that was a piece of window dressing, a bribe to the electors, but I said to myself time and again that that was one of the dividends accruing as a result of the careful administration of the fund, and that I regarded it as an earnest of further good things to come; and here we have, not £1,250,000, but £6,500,000 of a surplus. It is rather surprising, I think, that the Statutory Committee should take a more optimistic view of the future of the fund and of the amount that might be distributed in one way and another in this last report as compared with their previous report, dated the 4th July last year. Hon. Members will remember that there they were very doubtful as to what would be the balancing point of the fund in the next eight or ten years. Hon. Members will recollect that in 1934 the balancing point was 18.1 per cent. of unemployment; in the report of July last year the balancing point was 17.7; and it is now 16 per cent. What is the principal factor which may have been in the mind of the Statutory Committee? I suggest that the main factor was that between the report of last summer and the report dated 31st December last there had been a General Election and that the Statutory Committee had this consideration before them, that they saw a period of some four or five years of National Government during which this fund would be carefully administered.

When an hon. Member spoke about looking forward to an average of 2,000,000 unemployed over the next eight or ten years, I think he omitted one consideration. It must be borne in mind that at present we are below 16 per cent.—I believe we are actually below 15 per cent. for the whole country at the moment—and that at the end of December last year, the date of this report, the percentage was 14.1. What I think the Statutory Committee envisaged was not a steady 2,000,000 unemployed, but that there would be a steady improvement over the next few years and that then, possibly owing to circumstances entirely beyond the control of this Government, there might be a large-scale depression and for a period of a year or two a large increase in unemployment. I believe that under the financial administration of the present Government there will be a definite tendency to set up nothing in the nature of either a boom or a depression, and that there will be less in the way of extremes in the next 10 years than there has been in the last 10 years.

I should like to say a word about a question referred to by several speakers, and that is the question of the reduction of the debt, the possible alternative, referred to by the Statutory Committee, that not only the surplus of £6,500,000, but the total accumulated reserves which now amount to £21,000,000, should be allocated for the reduction of debt, and that if the available surplus in years to come, representing the contributions as they are at present, were put to the reduction of debt, the whole of this £100,000,000 debt would be wiped out in about 12 years. I as rather attracted by that proposal, because there is no doubt that that debt is a heavy burden on the fund and upon industry in general, but when one remembers that to a very large extent this debt was built up, not out of unemployment insurance proper, but out of the old uncovenanted benefit and, later, the transitional payments, I think it would be quite unreasonable, as is stated by the Statutory Committee, that the repayment of this large sum should be put upon the contributors, those employed in insurable industries, and should be repaid during the next 10 or 12 years, and that it is far better, although it still remains a heavy burden on the fund, that it should be spread over the next 30 or 40 years.

Just a word about the point referred to in the Minority Report of Mrs. Stocks, the other alternative that there should be a variation in the amount of benefit paid to the women contributors. I believe there is a strong case to be made out for a differentiation in the present scale of benefit to the women unemployed, but it is admitted by the Statutory Committee that they had not before them sufficient evidence on which they could fully make up their minds, and that is a problem which, I think, should be further considered by the Statutory Committee. In the meantime I consider, after careful reading of this report, that the wise thing to do is to make the flat reduction in the contributions for men and women, and in this connection I think it is fair to point out that proportionately the women contributors are getting a larger benefit, because they are getting a reduction of one-ninth of their present contributions, as compared with one-tenth of the contributions of the men.

My last point is this: I have from time to time made a complaint in this House as to Scotland not getting its adequate share in any sums that are being spent in various directions, and I think it is only fair to point out in this particular connection, when one considers the position of this fund and that the average rate of unemployment in Scotland to-day is 21 per cent., as compared with some 15 per cent. for the whole of Great Britain, that Scotland is getting rather more than she is entitled to and actually has a better concession, according to this report, than she could possibly have hoped to have got if there had been one fund for Scotland. It is only right to point out that we are getting the benefit in Scotland of this being a British fund and not merely a fund for Scotland alone. I think on the whole that the Statutory Committee have arrived at the correct conclusion, and I shall have no doubt in supporting the Government on this Motion.

7.55 p.m.

Miss RATHBONE:

Unlike many speakers in this Debate, some of whom have stolen into the Chamber about five minutes before having the good fortune to catch your eye, Mr. Speaker, I have been present throughout the whole of it, except, I think, during one speech, and it has been really pleasant to hear at last, in the last speech, the speech of one, a supporter of the Government, who is in favour of the Order. One is tempted to think that perhaps the Minister sent scouts into the Lobby imploring someone to come to his succour, in the confidence that he would have no difficulty in getting heard.

Photo of Mr James Guy Mr James Guy , Edinburgh Central

Did not the hon. Lady hear the speech of the hon. Member for Flint (Mr. Rowlands) about half-an-hour ago?

Miss RATHBONE:

Yes, and I was going to refer to it. That was the first speech in the course of the Debate in which a supporter of the Government supported the Government's proposal, and it was such an astonishing event that I could scarcely believe it. I thought the line of his advocacy was perhaps not always wisely chosen. For one thing, he saw nothing in the complaint which had been made, not only by Members of the Opposition, but by several Members who are supposed to be supporters of the Government, that it would have been very much wiser if the Minister had left over the consideration of this report, as he perfectly well could have done, until the Unemployment Assistance Regulations came before the House. The hon. Member for Flint (Mr. Rowlands)—I am sorry he is not here—observed that there was no relation between the two subjects that made it at all necessary that the House should know what the Unemployment Assistance Regulations were to be before they gave their opinion upon the proposals now before us. But the Statutory Committee took the opposite view. In two places in their report—they have been quoted already, so I will not trouble the House with them again—they deplored that at the time when they had to make their recommendations they were not in a position to know what the unemployment assistance rates were going to be.

I would suggest that the Minister would be wise, in view of the extraordinary testimony offered to-day, both by the nature of the speeches made by supposed supporters of the Government and by the rows of almost entirely empty benches opposite, except when an hon. Member comes in for the purpose of making a speech, to withdraw this Order. It seems to have friends in no quarter of the House, and I am obliged to come to its rescue. I think some of the comments have been very unfair, not so much on the Order, as on the nature of the report. I think it is a remarkably able report and one that delights me—(I suppose it is a feature that appeals to a University Member)—by the extraordinary fairness with which it states the arguments against its own case. This report, I suggest, will be of great service to any hon. Member who wants to make a speech in the country against this Order and does not want to go to the trouble of original composition. He could not make a better speech against the Order than to read certain pages of the report itself, where it sums up the arguments against reducing the contributions and in favour of increasing the benefits. When I read the arguments on both sides it seemed to me that the astonishing thing was that, after stating the case so admirably and fairly, the committee should have come down on what seemed to me, on their own evidence, to be clearly the wrong side.

The case for increased benefits rather than a reduction of contributions has been dealt with repeatedly and admirably by other speakers. I want to draw the attention of the House to an aspect of the question which again has been left to the very last, namely, those portions of the report which concern the position of the women contributors. That seems to me the weakest part of the committee's report, and yet, there again, we have the charming characteristic, which we might have expected of the very able man Sir William Beveridge, who is chairman of the committee, that when he is using a weak argument he is so clear-headed and so honest, that he cannot resist saying how weak it is, almost seeming to laugh at his own argument. Just listen to the reason which the report gives for not accepting the exceedingly modest proposal put forward by Mrs. Stocks. Her proposal is simply that instead of reducing contributions all round, the contributions for women should be left unchanged and the benefit for women should be raised by 2s. That would make the benefits of men and women the same. As she points out, the women themselves were prepared to pay for this by foregoing any reduction of their contribution; and she further points out that, although this proposal involved some diminution in the total relief to industry recommended by the majority of the committee, the reduction would be comparatively small and would fall mainly on those industries which employed large numbers of women, which were the least hardly hit industries and, therefore, the least in need of such relief.

What is the argument given by the committee for not accepting a proposal which would delight all women's organisations and bring a desperately needed 2s. to the contributor, which would not disturb the structure of the fund and which would reduce by very little the relief to industry The report says: Such a proposal cannot be ruled out without consideration. But it would mean a notable change from former policies in social insurance; having regard to the differences of wage level between men and women it would seem anomalous to many people to exact the same contributions and to give the same compensation for loss of wages. Will the House note the Committee's argument—" It would seem anomalous to many people." Was such a reason ever given in a Government document for not making a change? The Committee does not say that there is any justification for the difference between men's and women's rates in the different needs of the two sexes. It explicitly disavows that argument. It says: If the question be approached from the standpoint of needs, ii might be difficult to show that the needs of single women are as much as 2s. a week below those of single men; many people would say that the needs are substantially equal. Many people certainly would. Even if it be admitted—and scientific observers are divided on the question—that the food needs of women are greater than those of men, Mrs. Stocks well observes: There would be some force in the argument if men and women lived by bread alone. They do, however, live by much else, including fuel and lodging and. especially when seeking work, by, respectable appear, antes.' Society is running some danger when it makes it impossible for a woman to keep up respectable appearances when she is seeking work, and may conceivably in some cases drive her to seek employment in directions which are not respectable. I would beg the Minister to think again and to consider whether he cannot accept this extremely modest proposal. I want to say something which goes a little beyond the Mrs. Stocks' argument. I wonder whether hon. Members—there are very few of them to listen to me—realise how incredibly unfair the position of women is under the social insurance system. The more I study that position the more I feel that social insurance amounts to little else than a positive fraud on women.

Let us consider a few of the facts, and I would beg Members to consider those facts in relation to each other, because it is only in this way that their cumulative effect is visible. There is, first, the point under Unemployment Insurance that, because women's contributions are pooled with men's, women receive immensely less in proportion to the value of their contribution; than men. Take the figures for 1934 which were given me by the Minister. The contributions of males were roughly £47,000,000. Their benefits were £34,500,000, or nearly three-quarters of their contributions. The contributions of females were £15,000,000. Their benefits were only £6,000,000, which is a little more than one-third of their contributions. The principal reasons for that great difference are two. The first is the lesser rate of unemployment among men. The Minister said something rather misleading. He said that the women's rate was 6.9 and the men's 8.2. It would be a mistake for the House to take that as an indication of the relative balance of men's and women's unemployment, because the smallness of the difference is due to the fact that men are much longer unemployed and are therefore driven off benefit on to unemployment assistance. There is a much greater difference really between the lesser ratio of women's unemployment and the higher ratio of men's unemployment.

The other and more important reason is the greater burden of dependants on the men. In May, 1934, only 3 per cent. of the women, but 61 per cent. of the men drew dependants' allowances, and the average value of the men's dependants' allowances was much heavier because it usually includes a wife as well as children. There is a good answer to that, and it is given by the Statutory Committee. They point out that while these facts are undenied, "there appears to be no reason why women should have the benefits of the lower risk of unemployment any more than any other class of insured person." Most women would accept that argument if it were applied consistently, if women and men were treated as part of one great common body of workers throughout the insurance field. That, however, is far from being the case. What the Government have done as the social insurance system has developed is to treat men and women as part of one community when it told to the benefit of the fund. When it told against the benefit of the fund to pool men and women together, they have been treated separately. Take, for example, the position under unemployment insurance. The lower rates of contribution and benefit for women mean, of course, that for every woman who is employed, the employer contributes less and the State contributes less. There is no equality or parity there. Secondly, the one class of woman who is found to be a heavy burden on the Unemployment Fund, that is, the married woman, was segregated and subject to a special class of regulations under the Anomalies Act, which resulted from October, 1931, to April, 1935, in the disallowance of no less than 275,000 claims by married women. That is not the whole story. Let us pass to national health insurance—

Photo of Mr Robert Bourne Mr Robert Bourne , Oxford

I think we had better stick to unemployment insurance.

Miss RATHBONE:

Will you allow me to make my point quite shortly?

Photo of Mr Robert Bourne Mr Robert Bourne , Oxford

No, we must keep to the subject before the House, and the hon. Lady cannot wander into other forms of insurance.

Miss RATHBONE:

May I plead this? What is before the House is the report of the Statutory Committee—

Photo of Mr Robert Bourne Mr Robert Bourne , Oxford

It is not. The hon. Lady can take it that what is before the House is the Order.

Miss RATHBONE:

I must, then, leave that section of the subject alone. May I say this—because several Members have alluded to it, and the Member who spoke last made it the burden of nearly the whole of his speech—that you cannot deal with one section of social insurance without relation to the rest. There are two important paragraphs in this report, and if I am not allowed to allude to them, I am the only speaker who has not been allowed. The committee says, in paragraph 68: It appears to us that reasoned judgment as to the proper level of unemployment benefit, for men and women alike, involves a fuller study than has yet been made both of the living conditions of unemployed persons and of the relations between wages, benefit, unemployment assistance and other forms of assistance. In another passage the committee says: It is appropriate to look at social insurance as a whole, and to compare the statutory provisions made for loss of earnings through unemployment with the provision made for loss of earnings through sickness. If I am not allowed to develop that point, I would only say that under Health Insurance women are made to bear the burden of their heavier sickness claims, but in Unemployment Insurance the fact that they have lighter claims is not accepted as any reason why they should draw a rate of benefit proportionate to the value of their contributions. I beg the right hon. Gentleman to consider two points: first, whether he will not defer the whole Order until we get the rates of unemployment assistance before us; and second, in the interval, to think again whether he cannot make this little contribution towards giving a fair deal to women under Unemployment Insurance by accepting Mrs. Stocks' proposals. Will he also tell us what lie intends to do to meet that recommendation of the Statutory Committee Is he going to "set on foot inquiries which will throw further light on this problem" and enable the House really to consider the field of social insurance as a whole, all these problems in relation to one another?

8.16 p.m.

Photo of Mr Guy Rowson Mr Guy Rowson , Farnworth

Like the hon. Member for the English Universities (Miss Rathbone) I have been surprised during this Debate at the criticism which has come from all quarters of the House. The hon. Member for Central Edinburgh (Mr. Guy) tried to make out a case for this Order and to back up the Government's proposals, but I think that even he found something to criticise in the Order. The hon. and gallant Member for the Isle of Thanet (Captain Balfour), like many hon. Members opposite when dealing with unemployment and the depression through which the nations of the world have been passing, referred to the conditions which existed in 1931. Some of us who have been away since 1931 remember the conditions prevailing at that time, but we of the Labour Party have always argued and feel to-day that what we have to do is to look after the unemployed as best we can. The proposal before the House strikes me as ungenerous and uncalled-for and one which ought not to have been submitted at this time, in view of the fact that we are promised new Regulations in the near future. My view is that someone has been pressing the Government to bring in this new Order now. I am not sure about it, but I have an idea that the Confederation of Employers' Organisations have been at work. They are referred to in the report. The confederation represents employers who employ, probably, between 7,000,000 and 8,000,000 people, and they are naturally concerned in this matter. Recently, Health Insurance contributions were raised by ld. a week to employers and employed. Is it the object of the Government to give back that penny to the employers? There may be something in that, though I am not sure, and perhaps the Government representative will tell us when he speaks.

The proposal to reduce contributions ought not to be accepted by the House. There are many ways in which this £6,500,000 could be used, and one of the most useful would be in abolishing the waiting period, or at any rate reducing it by half. If we could reduce it to three days instead of six we should bring the Unemployment Insurance Acts into line with the Health Insurance Acts and with Workmen's Compensation Acts, and from that point of view it should be worthy of consideration by the Government. Another way in which some of this money could be used would be to extend the period during which standard benefit is payable. As previous speakers have said, the thought of the means test hanging over the heads of the unemployed when they have finished their 26 weeks of standard benefit is bearing them down, is causing some of them almost to worry their hearts out. I know that the Government have to some extent amended the Regulations since 1931, and that if a workman hen five years complete contributions without having taken any unemployment benefit he can get more than the 156 days' benefit, but in the mining industry, which I represent, there is always some short time in the summer months, and it is difficult to find a, case where there has been any extension of the 26 weeks.

I do not want to go too deeply into the problem of unemployment, because there will be other opportunities to discuss it, but I wish to refer to something in paragraph 41 of the report, and would point out to the Parliamentary Secretary that it shows where the Confederation of Employers' Associations come in. It says: In response to a request for information as to the weight of contributions in particular industries, the National Federation of Employers' Organisations submitted statements in regard to coal-mining, shipbuilding and textiles. In coal-mining, during 1934, the employers' and workers' payments for unemployment, health and pensions, workmen's compensation and miners' welfare represented 11¾d. per ton, or 8.5 per cent. of the net value of the output, given as 11s. 6d. per ton. I do not know why they selected the coal-mining industry for that comment. It is all very well for them to talk about 11¾d. per ton, but anyone who knows anything at all about the subject knows full well that between 4d. and 5d. per ton could be attributed to workmen's compensation itself, because the industry is a dangerous and hazardous one. If you deduct what it costs for miners' welfare and workmen's compensation, the whole amount for pensions, for health insurance and for unemployment insurance does not cost any more than is paid for mining royalties, and there is no comment about mining royalties being a burden on the industry. I submit that I am fully entitled to make this point: that the Government are succumbing to the pressure of employers' associations in bringing this Measure forward at this juncture. I will back up that assertion by reference to a statement by the confederation in a pamphlet which they issued in February, 1931: We would, however, point out that since the War the State, (a) by fixing high rates of unemployment benefit and constantly relaxing the conditions for the payment of it; (b) by paying grants to local authorities for distribution in wage rates higher than our export industries can afford; and (c) by the extension of statutory wage-fixing machinery, has not only in large measure determined the general standard of wage levels, but has also clone so in such a way as to make it difficult, if not impossible, for employers and workers to rectify the maladjustments which have grown from the State action. I submit that in putting those proposals before the Statutory Committee they have had that particular point of view in mind, because the conditions which are wanted by the employers' organisations are low unemployment benefits and difficult conditions under which to obtain them, so that they can get the workers to accept lower wages than would be accepted if there were generous conditions of unemployment benefit.

I have heard previous speakers mention 16 per cent. of the insured workers, but I think the actual figure is between 15 per cent. and 16 per cent. It is all very well for hon. Members opposite to talk about the present figure being a conservative estimate, but I would like them to take cognisance, when they are dealing with this problem, of the opinions of Sir William Beveridge and even of the hon. Member for Stockton-on-Tees (Mr. H. Macmillan). These gentlemen have at least shown some knowledge of the conditions with which the world might be faced. The figure may not be less than 15 per cent. or 16 per cent. in the near future, especially if war can be avoided, and it may be considerably over 20 per cent. if another crisis comes along, as it did in 1929–31. I do not wish to be a prophet or to predict in any way, but I will venture to utter the statement that neither we nor hon. Members opposite can avoid those great crises while we continue under the capitalist system. We ought to face the issue as the House of Commons and a Parliament, and make proper preparation for these things; we should see to it that those who are the unfortunate victims of our system are generously and properly provided for.

8.28 p.m.

Photo of Sir Arthur Baxter Sir Arthur Baxter , Wood Green

This Debate has been conducted on both sides with the most admirable restraint and with the most commendable constructive thought. I am sure that hon. Members opposite will agree with us that the problem of unemployment is a disgrace that we all share, that the desire to assist the unemployed is shared as much on these benches as by themselves and that the fact that the people, whom hon. Members have described and whom we have seen in our constituency work, are suffering so much and living under such wretched conditions, is a disgrace to all of us who have any thought in this country. There I go the whole distance with hon. Members opposite. The only difference that comes between us, although we both want the same objective, is as to how that objective is to be achieved. If I may criticise those who spoke from the opposite benches, one of the great mistakes you make is to talk of and treat the unemployed as if they are a detached, independent part of the economic body. They are not. The unemployed population are a part of the problem of employment. In the Election which took place last November, my Socialist opponent never, to my knowledge, made one speech except on the unemployed, and it would appear that the millions of people who were in work were of no importance to him. [HON. MEMBERS: "Oh!"] I said that it would appear—

Photo of Mr Robert Bourne Mr Robert Bourne , Oxford

The statement of the hon. Member is no doubt interesting, but I do not see what connection it has with the Order now before the House.

Photo of Sir Arthur Baxter Sir Arthur Baxter , Wood Green

I wish to come at once to the point of this Debate, which is that since unemployment is so closely related with employment, the method of the Government in assisting employment is the best cure, in the long run, in assisting unemployment.

Photo of Mr Robert Bourne Mr Robert Bourne , Oxford

That point certainly does not arise.

Photo of Sir Arthur Baxter Sir Arthur Baxter , Wood Green

With due respect, I wish to deal with the reduction of the contribution. My point, which is, no doubt, very badly made, is that the whole of this nation, and the economic construction of this country, are based on productive industry, and that there are three partners in productive industry, the State, the employer and the worker. I claim that the Government are taking a courageous and wise step in reducing the contribution rather than spreading the benefits, so that in the long run, and taking the long view, employment will be increased, wages will eventually be increased and the stigma will be lessened—[Laughter]. I am sorry if that arouses the humour and the risibility of hon. Gentlemen opposite. I am sure that you believe with us that the one thing that matters is to stimulate employment, and I take it that this is a constructive move towards that end. I unhesitatingly support the Government in taking this courageous step, which I think even those of you who always take the short view and who never believe that there is anything five years ahead—[Interruption]. Those of us who are also partners in the economic State have suffered enough at your hands.

Mr. D EPUTY-SPEAK ER:

The remarks of the hon. Gentleman are supposed to be addressed to me.

Photo of Sir Arthur Baxter Sir Arthur Baxter , Wood Green

I apologise; I am sorry. I will bring my remarks to an end with this one observation. While Mr. Speaker was in the Chair, there was some discussion about the cuts made in 1931. One of the hon. Members opposite spoke of them almost as though they were a loan and should be repaid later on. We are misled by hon. Members opposite, who perpetually treat the unemployed as though they were not part of the whole State. [HON MEMBERS: "Absurd!"] I will end my remarks. [HON. MEMBERS: "Hear, hear!" and "Go on!"] I am not like the hon. Lady the Independent Member for the English Universities (Miss Rathbone), who so seldom ends her remarks, and apparently does not think that independence entitles her ever to support the Government. I will end my remarks by this one quotation from the works of Oscar Wilde: To cure the soul by means of the senses, and the senses by means of the soul Those of you who are always for unproductive expenditure will live to see the justification of our Government's sound finance and common sense facing of realities, with the most muddle-headed Opposition in the world, and their daring to take to-day a step, knowing that you will make the most of it and that you will grossly misrepresent it. The Government intends to help the economic State and its three partners, the employer, the State and the worker, to increase employment and to increase wages, so that the unfortunate partners of productive industry, the unemployed, shall be benefited and eventually cured of their troubles.

8.35 p.m.

Photo of Mr Benjamin Riley Mr Benjamin Riley , Dewsbury

I do not propose to make any observations on the speech of the hon. Member for Wood Green (Mr. Baxter), because I confess that I found it entirely impossible to follow some of his arguments. My criticism of this Order can be stated in comparatively few words. The test that I would apply to it is whether the Order can be shown to be in the real interests of the whole community. I have no doubt that the Minister claims that it can, and presumably that is his task to-day. He finds his fund with an estimated surplus, for a few years ahead, anyhow, of something like £6,000,000 net, after meeting, of course, the annual charge of £5,000,000 for interest on the old deficit of the fund, and surely the test to be applied is, what is the best that can be done with that sum of £6,000,000? I submit to the Minister that on every ground the obvious thing was to deal with it in such a way as would give the largest measure of increased standard of living to the largest section of the community.

The Minister, however, by this Order, is dividing the £6,000,000 roughly into three. He is giving £2,000,000 per annum of the surplus to the workers in reduction of contributions, £2,000,000 to the employers in reduction of their part of the contributions, and £2,000,000 in relief to the taxpayers of the country. I think all Members of the House, in whatever quarter they sit, must agree that if, instead of spreading so large a portion of this surplus over a small number of employers in comparison with the mass of the working class, and a small number of taxpayers in comparison with the working class, the whole £6,000,000 had been devoted to raising the purchasing power of the great mass of the unemployed, it would have been far more beneficial to the country as a whole than distributing it in the way that is now proposed.

I will not go over the arguments, which have been so often stated, as to the amount of relief it will afford to the employers, but it cannot possibly be sufficient to make possible a reduction in the price of goods to the consumer, or a substantial improvement in employment. I happen to be a small employer of labour, employing about 100 people, and I find that under this distribution we shall get about £100 per annum from the Government. We do not want the £100; we cannot translate it into any reduction of price; we could do without it; but, if it were put into a general pool of 16,000,000 for the unemployed, it would be spent in primary products—food, health, clothing, furniture and so on. From whatever point of view it is tested, the method proposed is not one that is likely to benefit the community as a whole, and that is the real test. Everything in this Order points to the fact that the Minister is only meeting the demands of employers and the demands of taxpayers. They, however, are not the community, but are only a small portion of it. The people who are the real nation are the working class, to whom this relief would have been of substantial benefit. On these grounds I say that by this Order the Minister is serving, not the interests of the community, but only the interests of a small section of the community.

8.40 p.m.

Photo of Miss Ellen Wilkinson Miss Ellen Wilkinson , Jarrow

At one time the hon. Member for Wood Green (Mr. Baxter) held an important position as the editor of a paper which spent a good deal of time in pointing out that, if the capitalist system was to be kept going, it was necessary to get goods into the hands of the people, and that, the raising of purchasing power was an extremely important part of that process. On many occasions that paper, I think during the time that the hon. Member was its editor, took a vigorous line in advocating that course, but the hon. Member now comes down to the House and tells us something quite different.

Photo of Sir Arthur Baxter Sir Arthur Baxter , Wood Green

I remember the campaign to which the hon. Lady refers. It went on for many years. The line taken was that we should increase the distribution of goods by the power of increasing wages and rates of wages—that it was entirely through wages that an increase in consumption was achieved.

Photo of Miss Ellen Wilkinson Miss Ellen Wilkinson , Jarrow

That is true, and I was grateful to the hon. Member, for it helped me on one occasion to win a strike. But the hon. Member seems to have forgotten the importance of this question of purchasing power from the point of view of keeping the machine going and of absorbing what is produced. Why should the hon. Gentleman get upset and think that there is something immoral in that purchasing power being in the hands of an unemployed man? He has lectured us on muddle-headedness, but he has himself given us a striking example of it.

Photo of Sir Arthur Baxter Sir Arthur Baxter , Wood Green

Spending power is only productive when it comes from wages paid by production. The putting up of money for no work at all is the beginning of the end.

Photo of Miss Ellen Wilkinson Miss Ellen Wilkinson , Jarrow

I am not sure whether I should be allowed—I am afraid I should not—to indulge in a little lecture to the hon. Gentleman on the most elementary economics, but it is the gravamen of our case against the Government. From the point of view of his own capitalist system, all that really matters is getting the goods to the consumer, and the effect of unemployment is just that people have not the power to buy what is produced. If you doubled the unemployment benefit, you would to that extent increase employment.

Photo of Sir Arthur Baxter Sir Arthur Baxter , Wood Green

Then why not quadruple it? Why put any limit?

Photo of Miss Ellen Wilkinson Miss Ellen Wilkinson , Jarrow

There is one very simple practical limit, and that is the extent to which you can increase production. Hon. Members, finding nothing else about which to congratulate the Minister, say that at least there is a surplus, and, if these dreadful Labour people had been here, there would not have been one. Is the surplus anything to be pleased about? It is not a trading surplus. It is not a surplus such as you might have got through the operation, say, of the Post Office. It is a surplus that has been secured by niggardly administration. Mathematically you can secure any surplus. [Interruption.]

Photo of Mr Robert Bourne Mr Robert Bourne , Oxford

I must remind the House that we are not in Committee.

Photo of Miss Ellen Wilkinson Miss Ellen Wilkinson , Jarrow

I am sorry to excite hon. Members opposite, but they make the most extraordinary statements, and one has really occasionally to put them right. I am aware that we are dealing with standard benefit, but throughout the administration of standard benefit there has been this attempt, whenever it has been possible, since 1931 to turn people off benefit. [Interruption.] You have only to take your own Government report and the fact that you have had to have a committee to examine the working of the Anomalies Act. You have this £6,000,000 screwed out of the purchasing power of the unemployed. I am sorry to emphasise that word "screwed" if it upsets hon. Members, but that is just what happens. The screw has come not only from the Federation of Employers' Associations but also from the Treasury. What conceivable difference is the £6,000,000 going to make, wasted in the way it is to be wasted? I advisedly say "wasted." My constituency is about as hard hit as any. In Jarrow our unemployment rate has reached, on occasion, 80 per cent., and is now well in the seventies. There is nothing like it in the country. We are not particularly proud of it, but I am just recalling it to the Minister's mind. I put this matter to a large meeting of unemployed and asked them to vote on it, and their considered opinion was that the penny meant just nothing to them. I tried to put the best face on the Government's case and I said, "It means at least a box of matches." They said, "Oh no, we pinch those off the missus." A penny to these men means nothing, but £6,000,000 spent in purchasing bare necessaries means £6,000,000 added to the internal market. If I talk in terms of internal markets instead of the spending power of the unemployed, the hon. Member opposite may agree with me. I refer him again to his own editorial. I do not say he wrote it, but at least he must have read it. The prosperity of the internal market was one of the strong lines that it took. Here is a reduction in the internal market of £6,000,000, which would make it possible for the barest necessities to be bought. I know the Minister is a bound man. His Cabinet has taken the decision, and there is not very much point in making appeals to him. One can only hope that they make him uncomfortable. I always have the deepest sympathy with the unfortunate individual who is Minister of Labour in any Cabinet at present.

There are two points to which I would draw his attention—the question of dependants' allowances and the waiting period. Here are two matters on which the £6,000,000 might well be spent, The difficulty that I am calling to the Minister's mind, which he knows so well himself, is the difficulty that there is particularly with the sort of people who are drawn by the chief cartoonist of the hon. Member opposite—the little man who is not accustomed to going to the public assistance committee. There are large numbers of the working class who, unfortunately, have had to become experts in dealing with public assistance committees, but there are a large number who simply do not know their way about. This six days waiting period, which is really 12, means 12 days without any income coming in at all. The average working-class family is living up to the limit of its income. There is no margin at all. I have known families which have literally starved rather than appeal for public assistance during that period.

The second point is in regard to dependants' allowances. If we have made the Minister specially uncomfortable, and he thinks he really ought to do something for these people, he might see whether on this question his Department could really be a little more, shall I say sympathetic, or human, or shall I leave it to him to supply an adjective. In his sermons on Sundays his adjectives come like a rippling brook. He can supply so many more and so much better than I can. You have really the most rigid definition at the moment with regard to dependants. Among women there is very great difficulty in getting elderly housekeepers, or women who are acting in the capacity of housekeeper and mother to children, recognised. There are dependants whom the workers in their generosity keep in order to prevent them from having to go to the workhouse, and the Minister knows how rigid is the dependant's benefit apart from the actual wife and children. If the £6,000,000 had been spent on that alone, it would have helped tremendously in the humanising of the Unemployment Fund, and I therefore suggest that fact to the Minister when he is pondering over the questions that have been raised.

8.56 p.m.

Photo of Mr Jack Lawson Mr Jack Lawson , Chester-le-Street

I wish to protest at the outset of my remarks against the conditions under which this Debate is being conducted to-day. During the whole of the proceedings, with the exception of one of the Whips, and the two Ministers who represent the Department, there has been no other Minister of the Government present. When we are discussing an important matter of this kind, and particularly one in which the Exchequer is interested, a first-rate Member of the Government at least ought to be present. I wonder if hon. Members opposite are really satisfied about the proceedings here to-day, and if they dare face the unemployed and tell them that during the whole of the proceedings there was not a Minister present except the two Ministers representing the Department.

Photo of Mr David Quibell Mr David Quibell , Brigg

The Minister of Labour looks satisfied with himself.

Photo of Sir Arthur Baxter Sir Arthur Baxter , Wood Green

What about your party?

Photo of Mr Jack Lawson Mr Jack Lawson , Chester-le-Street

Two years ago we discussed the Section which was originally laid down in the Act of 1934, when there was very grave disturbance in the minds not only of the Opposition, but of supporters of the Government, because it was considered that we were dangerously limiting the powers of the House when discussing a very important matter. The assumption to-day has been that, because the Statutory Committee is in being, you cannot better the conditions under which we are discussing this matter. It has nothing to do with the case at all. The Statutory Committee have laid down certain fundamental financial principles which they have to follow under the Acts of 1934 and 1935, but I do not think that anyone visualised that we would not be able to discuss various alternative ways of distributing any surplus of the fund.

To-day we have before us the proposals of Mr. Shaw as stated in the report. There are 11 different classes, who, he proposes, should receive some benefit from this surplus. He also suggests that there should be a, reduction from six waiting days to three waiting days. Mrs. Stocks makes two definite proposals, one affecting men and the other affecting women. We are not in a position to do anything about those proposals to-night. Complaint is not limited to hon. Members on this side of the House. There have been speeches by Government supporters desirous of making some change not in the amount to be spent, but in the manner in which it should be spent. But we cannot make a single amendment of the proposals which have been laid down. I wonder whether the Minister is quite satisfied with that state of things. I would remind the House, and particularly hon. Members who are discussing this question for the first time in a new Parliament, that this stereotyped state of things has not always been in existence. This is the first time that we are being nailed down financially and cannot make a proposal. Are supporters of the Government really going to allow this state of things to continue? Is the Minister satisfied?

Photo of Mr Jack Lawson Mr Jack Lawson , Chester-le-Street

It may be an easy way for him, but it is certainly not a good thing for Parliament, as the hon. Member for Gorbals (Mr. Buchanan) very ably pointed out. Here are five men and two women. We know their names, but to the main body of hon. Members they are mostly unknown. They have been allowed to discuss this £21,000,000 surplus. There is a potential £6,500,000 annually to be distributed. They have been allowed to discuss this matter at length, and have not been tied down in the way that we, the elected Members of the people, are. After they discussed it, they came to a majority decision, yet we, the elected Members of this House, cannot even make the slightest change in the distribution of the amount that is at disposal. That is a state of things which is not to the credit of the Government, and which certainly does not make for intelligent Parliamentary proceedings. There is a further point which has been raised during the Debate. The committee who discussed the matter before us were in pretty much the same position as that in which we are situated. They complained that they did not know what was going to be done about dealing with one half of the unemployed.

The right hon. Gentleman told us that for the next eight years there will be a mean average of unemployed of 2,225,000. He referred to 16¼ per cent. and 16.5 per cent., but the Statutory Committee very definitely based their conclusions upon a mean average for the next cycle of eight years of 16.75 per cent. However much unemployment may have gone down, this Government apparently are to have the credit of stabilising unemployment at about two and a quarter millions. That is a very serious matter. I remember when the present Chancellor of the Exchequer stated, in a sort of half reflecting way, that the unemployed for the next 10 years would be considerable. He was credited with saying that the unemployed for the next 10 years would number 2,000,000. I know that he did not say that, but many people believed that he did. There has seldom been such a sensation in the country as that which was created by that statement, and yet to-night we have been told by the Minister of Labour that the mean average for the next eight years will be round about 2¼ millions. And we have never turned a hair; we are getting used to it; we are becoming indifferent. It is the state of things under which we are working that is leading to indifference. We are shelving our responsibilities. It is the Statutory Committee who have to do the job and bear the responsibility. It is the Unemployment Assistance Board who are responsible. Consequently, there is an apathy growing in the House and the country about unemployment, which is menacing to the social life of the country.

I read with great interest, and was staggered by, the facts in the book by Sir John Orr on malnutrition There is nothing that moves me in regard to the question of malnutrition more than the fact that men have become so hopeless that they are settling down to taking no interest in life. Let us face the facts. Great masses of men are rotting morally. They are being reduced to a state which is next door to a living death.

The committee complained that they were labouring under a very great disadvantage. They say in page 22: The present moment is particularly inopportune for surrendering income from the Unemployment Fund, because the Committee have no information as to the probable policy of the Unemployment Assistance Board. One of the reasons which prompted the committee to propose an increase of children's benefit last July, was the desire of reducing as much as possible any occasion for supplementing benefit to large families, either by unemployment assistance or by public assistance. When the new scales of unemployment assistance are published and applied, there may prove to be other types of claimant for whom an increase of benefit is equally desirable to avoid supplementation. But, if contributions have been reduced, the committee will not he in a position to make any change of benefits.

Photo of Mr James Guy Mr James Guy , Edinburgh Central

Will the hon. Member read the next paragraph? The paragraph which he has read is not the view of the Statutory Committee.

Photo of Mr Jack Lawson Mr Jack Lawson , Chester-le-Street

They were setting out the arguments against reduction of contributions. As the hon. Member for the Combined English Universities (Miss Rathbone) said, they were very fair in putting the arguments both for and against, and the one that I have quoted is one of the arguments against. What is the position to-day The Minister of Labour knows what is going to happen. He knows something about the regulations, because we understand that they are almost ready. He also knows, by investigation, exactly what is the position in the country with respect to those under the Unemployment Assistance Board. We have asked for that report. A special report was made when the regulations broke down. A sample report has been made on a very wide scale which practically covers the whole country, and the right hon. Gentleman has that in his possession. He may have brought it up to date. He knows, but the Statutory Committee did not know and we do not know, the facts, and yet he is asking the House and asking innocent Members opposite to follow him blindly into the Lobby to deal with subjects in regard to which the Statutory Committee said that it was necessary to have more information. We are working in the dark to-night.

The committee point out that the total on the fund will be less than half, and the other half, roughly, will be on public assistance. If there are to be something like 800,000 people on public assistance—

Photo of Mr Ernest Brown Mr Ernest Brown , Leith

No, 725,000. It is less than that.

Photo of Mr Jack Lawson Mr Jack Lawson , Chester-le-Street

If nearly 2¼ millions of people are to be unemployed, as a mean average, what does that mean so far as the benefit of those people is concerned? Some of them are going to be out of work for weeks and months. Some of them will have repeated doses of unemployment. This kind of thing has gone on for years. Many of these people are not the poor types of men. They are not what were called the unemployables. They include the best craftsmen, the best type of workers, yet they have long terms of unemployment and repeated doses of unemployment, and the consequence is that they have been deprived of any little assets that they had. There really is a case for supplementing benefits. The Minister has given us one half of the report and my right hon. Friend the Member for Wakefield (Mr. Greenwood) has given us the other half, but no one can read the report of Mr. Shaw without coming to the conclusion that if there was a free vote in the House there would be a reconsideration of the proposals of the Statutory Committee. Mr. Shaw is very searching in the points he makes. The substance of them is that it is really not going to be of much advantage to the employers, and I am sure it will not be any advantage to the workers.

It is unchallengeable that workmen, both those unemployed and those who are at work, if they had an opportunity of expressing themselves would vote not for a reduction of the contributions but, if there was a possibility of the surplus being so used, for increasing benefits. It is the Chancellor of the Exchequer who is getting the benefit. He is the only man who is going to get what matters in respect of this surplus. He really ought to have been present this evening. The Minister's action has not been dictated by the state of the fund or by any consideration for the workers; his final words clearly showed that he has a tender regard for the Chancellor of the Exchequer. The Minister of Labour seems to be very sure of himself on this matter, but I tell him that a Minister who gets concerned about the Chancellor of the Exchequer is almost lost. A good Minister has plenty of trouble with the Chancellor of the Exchequer, but when he begins to do the work of the Chancellor of the Exchequer his Department is in danger.

We have been considering to-day a great human problem. It has been dealt with partly in financial terms. Figure upon figure and fact upon fact have been given. I do not think there is any hope of making any impression upon the right hon. Gentleman, or upon this House. The state of the benches during the proceedings proves that, but when the country realises that the Government are so callous and so direct in their methods as to take money which ought to go towards improving the condition of the unemployed, while at the same time they openly admit that the average during the next eight years is to be 2,250,000 unemployed, the country will consider that this is not only as important as the international questions which confront us at the moment, and will ultimately wreck the Government, as it deserves to be wrecked.

9.20 p.m.

Photo of Mr Frank Griffith Mr Frank Griffith , Middlesbrough West

I was interested in one remark made by an hon. Member opposite, who, I believe, used to hold an important position on the Press, that we should consider particularly the spending power of the people by not taking money out of the pocket of the taxpayer. There is a great deal of confusion in regard to this question of spending power. From the point of view of promoting employment, spending power is entirely the same from whatever pocket it comes. It does not matter two straws whether the money comes from people in the slums in buying acid drops, or whether it is spent in buying cigarettes by the taxpayer, as long as the money is spent. What we have to consider—and the choice does arise in the question before us—is whether the decision of this House is going to occasion more spending by one section of the people or another. If you leave the money in the pockets of the taxpayers it will probably lead to an increase of sales by spending it profitably or by investing money in machines to make hammers, as Mr. Wells once put it. In the other case people will spend it on consumable goods. That is a matter to be considered quite dispassionately. I can imagine a state of affairs in which it would be better for the country if the money were invested in machinery rather than in consumable goods, but that is not the state of affairs which faces us at the moment. We want more circulation. We are faced with a stagnation of money which cannot find an outlet. Capital as well as labour is on the dole and what we want is to get freer circulation.

This brings me to the appeal I want to make to the Minister. I quite appreciate his position. He is advised by a very able committee. He can get no advice from this House because we are not allowed to amend anything. We may make suggestions, but he cannot pay any attention to them. Any Amendment would be out of order. Therefore, the right hon. Gentleman falls back on this able committee, and he says that there are so many who have reported one way and a minority of two who have reported on several points on the other side. So he decides for the big battalions. I sympathise with him to a certain extent, but does he not realise his position? He is able to revise the recommendations of the Statutory Committee. He has the power to do this, subject only to the fact that he must indicate to the House where he has made an alteration. He can alter a scheme and put before us something else. Is not this an occasion where he should take that step? The committee were bound to take a conservative view; they were in a way civil servants. They cannot form opinions as to whether the situation in the future is going to be rosy or not. They cannot afford to be overoptimistic. But the right hon. Gentleman is a Member of the Cabinet; he presumably knows all its plans; he presumably believes in its future. Perhaps he does; I do not know whether anybody does now. But I know that he is full of hope and courage. Ought not he to be the man who should say, "I have two courses open to me, the one a timorous course? It is going to assume that everything will come out badly, and therefore I am going to save up all the money I can."

The other way is to put the money into circulation—not to hide his talent in the ground like the man in the Scripture, but to put it out to service where something could be made of it. That is a position which might be too much for Sir William Beveridge and his committee. They can present the facts, but it is the Minister who must make the ultimate decision. If he believes in the Government and in the future of this country, I believe that he would have done wisely to take his courage in both hands and spend the money in the other way. Electorally it would have been the same. After all, there is something in moral and prestige. If the Government show that they have confidence in themselves, the country, too, may begin to wake up and believe that something will be done. It is always what I have seen in the case of this Government; they go so far and then draw back at the critical moment. To have spent this money in the way which has been suggested by the right hon. Gentleman who spoke for the official Opposition and the Member for East Birkenhead (Mr. White) might have involved some risk, but it would be a risk that would be repaid a hundredfold.

9.28 p.m.

Photo of Mr Ernest Marklew Mr Ernest Marklew , Colne Valley

As a new and comparatively inexperienced Member of this House it is just within the bounds of possibility that I may mistake the purpose of its debates. if I am wrong, perhaps I shall be corrected by older and more experienced Members, but at any rate I have formed the conclusion that the purpose of debates is to ascertain the minds of Members with regard to the particular proposal under discussion, and as far as possible to act consistently and to take such guidance as the House may give through the free and frank expression of its opinions. I cannot conceive that this House can otherwise fulfil its function, which I understand to be that of executive officer of the will of the people of the country. I have listened to all but two of the speeches—and those two were brief—which have been delivered in this Debate, and I have come to the conclusion that if the Minister is guided at all by the weight of the opinions which have been expressed, if he pays any attention to the wishes of the House as expressed not only from the Opposition benches but from the benches supposed to be occupied by his own supporters, he will certainly not push to the extreme to-night his request that the House should give its assent to the confirmation of this Order.

Knowing as I do something about the spiritual dispositions of the right hon. Member's mind and how prayerfully disposed he is on occasions I am quite sure that this afternoon and this evening he must have been engaged very frequently in silent prayers, if only to be saved from those he is accustomed to look on as his friends. Time after time from the benches behind him volley after volley has been fired at his proposals, criticism after criticism being directed against the case which he in a half-hearted manner tried to put up in support of this Order. I submit that the Minister of Labour cannot claim that he is acting in accordance with the wishes of this House if the wishes of this House are to be ascertained by the arguments adduced from these benches, both on the Opposition and on the Government side. I would suggest that if the occupant of the Chair, whether yourself or the Speaker, for whom you are deputising, were acting in a judicial capacity, listening to the arguments from both sides of the House and summing up the matter with an impartial mind, you could have no alternative but to advise the House that the weight of argument and the strength of the evidence were all in favour of rejecting this Order.

The Minister cannot claim to be acting even on such advice as he asked the House to believe that he was guided by as far as that advice was given with a due consideration to the weight of evidence. On page 30 of the report, which I must admit contains the Minority Report of Mr. Arthur Shaw, though this statement has never been challenged by the Minister or any of his supporters, it is stated: with the exception of the evidence submitted by the National Confederation of Employers' Organisations all written and oral evidence was in favour of disposing of the surplus by increasing benefits. What is the use of a committee, even it be dignified with the name of a statutory committee, if it cannot give advice in accordance with the, weight of evidence, if it is only to accept the evidence of one section of the people represented, and is to rule out the evidence of the great body of people affected and whose interests are more important than the interests which may be associated with the National Confederation of Employers' Organisations? The advice tendered by the statutory committee, having regard only to such advice as has weight of evidence behind it, should induce this House to recognise that the recommendations of the statutory committee are not such as to recommend themselves to the good judgment and approval of the House.

The third point I should like to make is in connection with what I have conceived to be the real purpose of unemployment insurance. I may be wrong; being young and inexperienced I am likely to make mistakes; but I have always conceived that the ostensible object of insurance was to provide some sort of assistance, always inadequate, to those who were in need of that assistance. The relief afforded by these various schemes has generally had some relation to the question of need. For instance, individuals in receipt of a certain salary during the period they are employed, if it is considered that the salary is sufficiently high to exclude them from requiring public assistance from insurance benefits during any subsequent period of unemployment, are excluded on the ground that their salary when employed is too large to bring them within the purview of unemployment insurance schemes.

I suggest to the House that this Order is condemned on the ground that if, as the Minister claims, it is to give relief to all, it cannot be claimed to give relief where it is most urgently needed or would be most appreciated. That is recognised in the report on page 22 of which the Statutory Committee tell us quite frankly that: To take 1d. off the contribution would cost practically the same as adding 3s. a week to all adult benefits; can it be doubted that the latter use would give more general satisfaction? In the administration of public affairs and in the dispensing of moneys for which we may be said to be the trustees, surely we ought to adopt that line of action and pursue that policy which would give the most general satisfaction. Will the Minister carry out that policy, will he adopt that advice? If he does not do so, he will be acting once more in direct conflict with what is palpably suggested, though not recommended in so many words, by the Statutory Committee itself.

Another point I would like to make is that the recommendations of the committee, which we are asked to approve, cannot be claimed to deal justly with the contributors, even on the grounds of treating the surplus on a strictly insurance basis. I heard some very strange arguments this afternoon and evening by individuals who have been begging the Opposition to regard the Unemployment Insurance Acts as embodying insurance schemes. I think the hon. Member for Gorbals (Mr. Buchanan) very neatly disposed of that suggestion. These Acts are nothing of the sort. They are schemes to make the workers in employment shoulder the burden of their fellow workers who are out of employment. Let me not be told that the employer makes his contribution and the State its contribution. If I am told that, I shall reply with the assertion, which no one dares challenge with any hope of being able to refute, that the State cannot make its contribution until the worker has first put it into the Treasury, and that the employer cannot make his contribution, nor does he, until the worker has in the first instance earned that contribution for him.

The Minister has defended the reduction of contributions on the perfectly unjustifiable ground that it would be easier to increase contributions in the future than to decrease benefits should the fluctuating state of the fund require any adjustments to be made. I refer to this point because the Minister himself so frequently emphasised it, and when he was speaking I challenged him to state to the House why it was easier, if the exigencies of the fund in the future should require it, to increase contributions rather than to reduce the rate of benefits, he shuffled round the point, and pretended to answer it by saying that hon. Members on this side know perfectly well what are the difficulties. Of course we do. I was not asking the right hon. Gentleman to state the difficulties, but to state why those difficulties were so appreciable. He failed to refer to that point. The real situation is that it is comparatively easy to raise contributions when it is necessary to do so. That, however, is due to the generous disposition of the workers as a class; they never grumble, when they are in work at making a contribution, very often out of proportion to their own capacity to make it, in order to assist those who, for the time being, are out of work. But when it comes to asking for a reduction of benefit from those who have no other income to rely upon and no other means of satisfying their own and their families' requirements than their unemployment benefit, knowing the entirely insufficient nature of that benefit, they naturally resist.

There is the real reason why it is easier to increase contributions if the occasion demands it than to decrease benefits. The reason is to be found in the spirit of generosity on the port of workmen, of which the Minister, through his policy, would take a mean and unfair advantage, preferring this cheap and easy way of meeting the possible exigencies of the fund in the future rather than meeting them in a fair and just way, which would be to say that those who can afford to do so ought to lighten the burden of their fellows and should be called upon to do thath before they ask for and are given any relief for themselves. The man in employment never begrudges his contribution to the fund, but the man who is unemployed is bound to resist the reduction of his benefit.

In conclusion, I ask hon. Members opposite who have listened to any portion of the Debate not to be influenced by the circumstance that these recommendations embodied in the Order are to be accepted by us merely because the Statutory Committee makes them. What are we here for if not for the purpose of forming judgments of our own and, so far as we are able, giving executive power to those judgments by the way in which we vote in the Division Lobby? We are supposed to be the most shining example, and very nearly the last surviving example, of democratic Government, but if this evening we accept the proposal of the Minister and surrender our own rights to frame policy and to make decisions, reserving to ourselves only the right to accept, and not daring even to exercise the right to reject proposals such as these, then we are undermining democratic forms of Government and tamely submitting to Government by a committee, and that a committee not even directly or indirectly responsible to this House.

9.44 p.m.

Photo of Mr William Gallacher Mr William Gallacher , Fife Western

When the Minister concluded his introductory speech with the remark that he wanted to put a smile on the face of the Chancellor of the Exchequer, I made an interjection which was not caught up at the time, but to which I wish to refer now, and to which I would like hon. and right hon. Members to give some attention. I consider it nothing short of a scandal that a, Minister should make so flippant a, remark in view of the fact that he was dealing with a question that affected thousands of men, women and children who are going short of food and clothing. I am certain that no hon. Member can deny that that is the case, and the question which ought to have concerned the Minister was how to utilise this money to ensure that these men, women and children would at any rate get a better share of the require-merits of life than they are obtaining at the present time. Smiles on the faces of innocent children would be more desirable than a smile on the face of the Chancellor of the Exchequer. From my study of the right hon. Gentleman I am convinced that all the wealth of Midas would not bring a smile to his face.

In the course of this discussion we heard an hon. Member below the Gangway opposing the suggestion that this £6,000,000 should go to the unemployed on the ground that to give an unemployed man a week would not make his position any better. I never heard such an argument. I do not want to take advantage of this occasion to give the House a lecture on Marxian economics though I think such a lecture would be much needed. I agree that if the printing press were used to turn out nominal money which had no relation to the production of consumption goods, as is proposed by the Social Credit party, it would mean a general depression. But to give this £6,000,000 to the unemployed would very much better their position, without affecting for the worse the conditions of the employed workers in the country.

Take the case of the millions which are going to the royalty owners. Suppose you handed that money out to the unemployed. The unemployed would be better off and there would be no disadvantage to the employed. It would only cause disadvantage to another and less worthy section of the unemployed, namely, the rentiers. The more you can give to the unemployed of whatever money is available at the present time, the more advantageous it will be, both to the unemployed and the employed, because it will be utilised for consumable goods instead of being wasted at Monte Carlo and in other directions. Another hon. Member said that criticism from friends of the Government would be helpful. I was surprised at that statement because I had come to the conclusion that the Government had not any friends left. I am certain that before long the present Government will not have any friends and will pass from our midst altogether. The speech of the Minister and his support of this document will help to lead to an early demise of the Government as at present constituted.

I wish to direct special attention to this point. The Minister said that unemployment insurance was not arranged on a basis of need. He said that the principle of unemployment insurance was that a fund was raised from certain sources to be used in the best possible manner to meet the requirements—apart altogether from the question of need—of those who were thrown out of employment. Now this fund, which has been organised for the purpose of aiding people thrown out of employment, has a surplus of £6,000,000. Again, I emphasise that it is not a question of need. This money was raised for the purpose of helping the unemployed, yet the Minister calmly proposes that this surplus, instead of being used for the purpose for which he himself says the fund was organised, is to be handed back to those from whom it came. I never heard such a proposition. And this proposal is made at a time when people are in urgent need and are clamouring for help.

What does Mr. Shaw propose? That a man between 21 and 64 should receive 18s. a week. Will the representative of the Government say that 18s. a week is too much for any man between those ages? I would like to see the Minister being asked to go out with 18s. in his pocket to spend the evening in the customary manner in which Ministers spend their evenings. I remember a discussion in reference to the fact that the Chancellor of the Exchequer—to whose face a smile is to be brought—was attending a dinner which cost 38s. a head. I do not know what one would get for 38s. a head. I see an hon. Member opposite who, I believe, is associated with the shipping industry. He is not smiling now, but he was smiling recently when the shipping subsidy was under discussion. I wonder how those in the shipping industry, who have their hands deep in the subsidy, would feel on 18s. a night, not to speak of 18s. a week. Is the Minister then prepared to say that it is better to hand back this surplus than to devote it to giving a man 18s. a week? Then, Mr. Shaw proposes for women between 21 and 64, a payment of 16s. 6d. a week. Will the Minister say that 16s. 6d. is too much for a woman to live on for a week? I wish to impress on the Minister and on Members opposite that in many cases these are questions of life and death. They can read in the newspapers day by day of mothers who are being driven to desperation because of the miserable amounts they are receiving. Yet we get flippant remarks here about putting a smile on the face of the Chancellor.

I know cases such as those referred to by the hon. Member for Gorbals (Mr. Buchanan) of men who have lost their wives and who are trying to keep households going, perhaps with a sister acting as housekeeper. When those men are out of employment they receive no consideration whatever for such housekeeper. We see the friends of hon. Members opposite getting subsidy after subsidy and getting their hands deep into the public purse, but when there is a surplus of £6,000,000 in a fund specially organised to deal with unemployment, it is not to be given to the unemployed. As I said before it is not the question of what the people need. To give a man 18s. a week is not giving him what he needs. But when you have a fund that is organised to meet, as far as it can, the necessities of those who are faced with unemployment, and instead of utilising it for the purpose of increasing the allowances, you talk about handing it back, never was there such a proposal as that.

I say it is almost incredible to believe that a Minister could come and act, as the Minister of Labour has acted, as the humble messenger of Sir William Beveridge and the Statutory Committee. There never was the slightest indication in his attitude or in anything that he said that gave any representation of a Minister representing a Government. It was just one quotation after another from the report that had been prepared by Sir William Beveridge, and this is one of the factors of which every Member in this House has to take note. I make an earnest appeal, especially to those who supported the subsidies to the shipping industry, to the beet sugar industry, and to others, not to take up this attitude of handing back this money, but to use the money for the purpose for which the money was collected. The fund has been organised to assist the unemployed. Let us in this House tell the Government that it has to go to the unemployed, and if the Government do not like it, let the Government go.

We have already been told by this Government that we have either to give up our policy or to give up the Government. Intimidation of that kind should never be tolerated, and I am certain that to-night the Members of this House would vote against the Government, would vote against the pitiful example of leadership which we have had from the Minister of Labour, except they are afraid that if the Government go, there will be a slaughter, not of the innocents, but of the guilty. It is the one thing that is in the minds of hon. Members opposite, but I ask them to face the possibility of a slaughter. It is better that hon. Members opposite should be slaughtered than that the men, women, and children who have been thrown out of employment by the decay of capitalism should be kept continually in the condition in which they find themselves now. To every penny of this money the unemployed are entitled. It was raised for that purpose. Let this House decide that for that purpose it shall go.

9.59 p.m.

Photo of Lieut-Colonel Anthony Muirhead Lieut-Colonel Anthony Muirhead , Wells

The hon. Member for Chester-le-Street (Mr. Lawson) called my right hon. Friend and myself solid in so many words and second-rate by inference. We are not discouraged by that. It would probably need reference to a Statutory Committee to decide whether on balance we have been complimented or not. He complained that there has been an absence from the front Government bench of other Members of the Government. Perhaps he was not here when the Prime Minister listened to a portion of this Debate, but, leaving that aside, I am certain that if my hon. Friend carries his mind back to the days when he was a member of a Government, he will remember very many occasions such as this when probably the departmental Ministers were for the most part the only habitual residents of the front Government bench, and on those occasions, as on this, he and the House perfectly understood that no disrespect to the House was intended.

I suppose it is true to say that the human race is more governed and swayed by considerations of comparison than by those of actuality, and I think that has been brought out in this Debate. Nobody really objects that a certain amount of money is to be given to somebody, but what we have been concerned about has been the particular method of distribution. As the arguments in favour of a particular course have been set out, first by the Statutory Committee and secondly, very fully and forcibly, by my right hon. Friend the Minister of Labour, I do not think there is much for me to do except to traverse the various points which have been raised in the course of the Debate. To start with the right hon. Member for Wakefield (Mr. Greenwood), he said that my right hon. Friend had spoken in "mournful numbers." If I may take the poetic quotation from which that phrase is culled, it runs: Tell me not, in mournful numbers,Life is but an empty dream.' All that I can say is that if my empty dream resulted in a disposable annual surplus of £6,500,000, I should habitually eat the most indigestible things I could for supper and wake up a happier man.

The next point which the right hon. Gentleman raised was to say that the particular proposal for this distribution would put £2,000,000 into the pockets of the employers. That aspect of the case was also mentioned by the hon. Member for Leigh (Mr. Tinker) and, from our side of the House, by the hon. Member for Blackpool (Mr. J. R. Robinson). But let us look at some other pockets into which some of this money is going. It is stated by the Statutory Committee that the distribution which they recommend will be equivalent to a rise in wages of £40,000 a week, and they point out that during the year 1935, which has been a year—one is glad to emphasise it—of very appreciable wage rises, the weekly rise has been £187,000, so that actually the comparative rise in wages which this distribution will represent to the employés' side will be something a little under a quarter of the total weekly wage rise during the year 1935. I do not think anybody can suggest that that is inconsiderable. I am sorry that I happened to be out of the House when my hon. Friend the Member for Mossley (Mr. Hopkinson) made his speech, but I understand that he put that point with great cogency, and when I hear that my hon. Friend put a point of that description with great cogency, I know that it cannot possibly be dealt with by a better voice.

In point of fact, to take up a general attitude of hon. Members opposite to this method of distribution rather than distribution by way of benefit, I would say this, that it is just this tendency to neglect the cumulative effect of disregarding the apparently small contributions to sound finance that eventually lands any Governments, as it landed their Government, in financial disaster. The hon. Member for Chester-le-Street said that any Minister of Labour or any Ministers who pleased the Chancellor of the Exchequer were almost lost, but Ministers who do not please the Chancellor of the Exchequer are lost entirely.

The hon. Member for Wood Green (Mr. Baxter) in a, speech of great force showed that one had to consider this question of sound finance, and he put forward a strong argument in favour of the course which the Government have pursued. The last remarks of the right hon. Member for Wakefield were a general wail of despair about the misery which was being caused by the economic forces of the world which no one had thought fit to bring under control. That was impressive, but it was rather spoiled subsequently by a remark by the hon. Member for Stoke (Mr. E. Smith), who drew attention to the improving trade, not only in this country, but throughout the world.

The hon. Member for East Birkenhead (Mr. White) raised a point which was voiced by many other hon. Members about the difficulty in which the House was by having either to agree to or to reject this proposal in tote. That, indeed, is the case, but the hon. Member for Gorbals (Mr. Buchanan), who was on the same tack, was wrong in his line of argument. He complained that the Statutory Committee had decided for a long period ahead quite definitely the particular form of treatment of the unemployed. The Statutory Committee has not decided it at all. The Government has not decided. It is the House which will have to-night an opportunity of deciding for itself. I would ask the hon. Member, however, whatever views he may have on this proposal, to remember that the whole machinery of Governmental approval and finally of Parliamentary approval is as open on this point as on any other.

The hon. Member for East Birkenhead, the hon. Member for Stockon-on-Tees (Mr. H. Macmillan), and other hon. Members complained because we were bringing forward this proposal when the regulations of the Unemployment Assistance Board were probably shortly to come before the House. What is my right hon. Friend the Minister to do? He is taunted almost daily because of the delay in the Unemployment Assistance Regulations, yet, when he brings something forward, the burden of the complaint is that he is bringing it forward too early. [An HON. MEMBER: "That is a cheap point."] The spring appears to be a season of the year in which one cannot do right. Somebody said that it was a cheap point. Let me give a dearer one. The Statutory Committee, with that fairness which gained the commendation of the hon. Lady the Member for the English Universities (Miss Rathbone), put the particular point about the Unemployment Assistance Regulations very forcibly, but notwithstanding that, they felt entitled to make this proposal and they did not consider the proximity of the Unemployment Assistance Regulations a, cogent reason why they should not put forward this proposal for the consideration of the Government.

The hon. Member for Stockton-on-Tees was horrified at the mention of the rate of unemployment of 16.75 per cent., and that point was taken up by many hon. Members opposite. One or two doubts were raised by hon. Members for Farnworth (Mr. Rowson) and Stoke (Mr. E. Smith), who wondered at this figure being chosen because they saw the prospect of a declining rate of unemployment. That is true. The Statutory Committee draws attention to the fact in their report that the true rate for December, 1935, was 14.1, and they also said they were prepared to consider a diminution in the rate down to the latter part of 1937. The trend for the immediate future is therefore fully taken into consideration by the Statutory Committee. What one has really lo come down to is what, in point of fact, enters into this calculation of 10.75 per cent. I do not think I do the hon. Member for Chester-le-Street any injustice when I say that his remarks rather indicated that we were setting this out as a sort of holy thing that had to be adhered to as closely as possible. We might almost have imagined that in future years, if we found the trend of unemployment becoming more favourable, there would be an emergency cabinet meeting to see whether we could not adjust our policy more in consonance with this forecast. I think that that was the emphasis which a great many hon. Members made. I do not think that I can do better than to read exactly what this calculation was intended by the committee to be, and what it has been accepted by the Government to be. Referring on page 7 to a statement submitted by the Committee on Economic Information, the committee says: This statement has been submitted to us by the Committee on Economic Information subject to various explanations and reserves suggested by the Sub-Committee. It is to be regarded not as an attempt to prophesy but as a contribution, so far as the knowledge now available permits, to the formation of a working hypothesis upon which policy in regard to the contributions and benefits of the Unemployment Fund may reasonably be based. I emphasise the words "working hypothesis." The hon. and learned Member for Ashford (Mr. Spells) in a spontaneous, but all the more telling speech, made an answer to the hon. Member for Stockton-on-Tees. It was a burden of the complaint of the hon. Member for Stockton-on-Tees that the Government should even have accepted this particular figure as a working hypothesis. It is true that any anticipation like that—nobody is more ready to admit it than the Economic Advisory Council or the Statutory Committee—is uncertain, but at all events the Government, with necessary Governmental prudence, have not been afraid to accept that particular figure which the Statutory Committee have put forward as a working hypothesis, and no one will be better pleased than the present Government if, in subsequent years, that particular figure is falsified on the right side, though, indeed, an anticipation of a previous committee was falsified, unfortunately, on the wrong side,

The hon. and gallant Member for the Isle of Thanet (Captain Balfour) made a far-reaching recommendation in the form of a combined plan of health and unemployment insurance. That opens up a very wide and interesting subject which is, perhaps, matter for further investigation, but I think he will agree that this is not the time at which one would develop consideration of that subject. He also mentioned—although I did not hear his speech myself I anticipated that he would mention it—the question of seasonal workers. All I can say on that subject is that it was carefully and thoroughly investigated by the Statutory Committee only last year, and as the outcome of that consideration fresh regulations were brought forward, and that at less than a year's distance from those fresh regulations coming into force it is rather early to suggest an alteration in them.

Then the hon. Lady the Member for the English Universities made a telling speech on her own particular subject. One phrase in it particularly struck me. She said that what was being done for women generally was little more than a positive fraud in the realm of social insurance.

Miss RATHBONE:

Little "less" than.

Photo of Lieut-Colonel Anthony Muirhead Lieut-Colonel Anthony Muirhead , Wells

I beg pardon. Yes, "a little less." I wondered what, in fact, it was that was a positive fraud, and I was left in doubt until the hon. Lady the Member for Jarrow (Miss Wilkinson) told me that unemployed men had "pinched" matches from their wives. That seemed to be the rock bottom of social injustice where the sexes are concerned.

Miss RATHBONE:

If I may put the point in a single sentence, it is that the Government treat women on the plan of "Heads I win and tails you lose." Wherever it is profitable to the fund to pool women and men together it is done, and wherever it is profitable to the fund to segregate women from men and treat them as a separated class they are so treated.

Photo of Lieut-Colonel Anthony Muirhead Lieut-Colonel Anthony Muirhead , Wells

I never toss with coins like that. If we worked out in strict proportion the amount which can be drawn in benefit by women, related to their contributions, instead of the amounts being 15s. for women and 17s. for men it would be 15s. 3½d. for women and if and when this particular proposal is agreed to that discrepancy of 3½d, will, in point of fact, be reduced to a penny; so I do not think there is very much cause for complaint in respect of the comparative value that men and women get in respect of their contributions. It has been shown, too, that over a period of 15 years the inequalities have gone first one way and then the other, and that substantially womn have gained as much as they have lost. The hon. Lady also mentioned the Anomalies Act in relation to married women. There was no question there of trying to discriminate unfairly against women. The whole object of the Anomalies' Regulations was to remove undoubted abuses which were pressing on the fund to the detriment both of women and of men. I must say that I was sorry that the Chair prevented her from developing her argument over the whole field of social insurance. I do not propose, to go over the ground off which she was warned, but I suggest that if she had pursued her activities further she would have found that the boot was largely on the other foot.

The hon. Member for Farnworth raised the point that in some way the National Confederation of Employers' Organisations had exercised undue pressure upon the Statutory Committee. If the hon. Member turns to the report he will find that, quite apart from the general evidence which was presented by that organisation, on the subject that he mentioned, the Statutory Committee specifically asked the Confederation for further evidence on the subject. When an independent committee actually go out of their way to ask the Confederation for specific evidence on a certain subject, it is rather hard to blame the Confederation for exercising undue influence upon the proceedings of the committee.

Those were the main points raised by bon. Members, and most of them were raised not by one hon. Member only, but by several. A further point was raised by the hon. Member for East Birkenhead, who said frankly that he considered that the Statutory Comniittee had been a success. I do not know exactly in which respect he meant that, but I feel certain that he and many other hon. Members will join with me in giving as much expression of gratitude as we can to the admirable work done by Sir William Beveridge and his colleagues. I am glad that an hon. Member on the opposite side of the House should have given me this opportunity of expressing what I am sure is a widespread feeling.

It is possible that the hon. Member meant success in a broader and less personal aspect, that is that, quite apart from the particular work of those gentlemen, the method of approaching these subjects by means of a Statutory Committee had, in this case, and not merely in this report but in other reports which they have put before the Government, been a success. The report of the committee shows the extent and the complexity of the subject with which the committee had to deal. First, in order to establish a basis for their report, they had to make a very careful scrutiny, in which they called to their assistance another body, the Economic Advisory Council, of the trade and unemployment situation, and to make a forecast several years ahead. Having got that basis, they had to consider the particular method of disposal of the surplus, which necessarily led them to consider a variety of factors that go right to the root of the social service system in this country.

The Debate which has taken place in the House to-day has only emphasised the importance and complexity of the factors with which the Statutory Committee have had to deal. I think it is common knowledge that the burden which falls on a modern Government, the burden which falls on a modern Parliament, is increasingly heavy. Increasingly Government and Parliament have to consider problems involving a great number of very detailed considerations, and I agree with the hon. Member for East Birkenhead in his opinion that on the whole this House is not too well adapted for the detailed consideration of some of these problems. I think that of recent years a fear has been raised in the minds of many students of government as to whether the present structure of government and the present structure of Parliament would be sufficient to stand the strain of this increasing burden of detail work which is being thrust upon it. Therefore we have seen a development of statutory and semi-statutory bodies throughout this country, such as the British Broadcasting Corporation and the Unemployment Assistance Board; and even the marketing schemes, although they have large independent powers of operation, have a statutory basis of existence.

Lastly, we have the particular committee whose report we are considering this evening. The bodies such as those I have mentioned are much too diverse in their nature, composition and activities to enable any effective detailed comparison to be made between them, and it is certainly too early to say that any one of them provides a sealed pattern which could be followed in every case. Perhaps there is no such sealed pattern. The hon. Member for East Birkenhead said that time would show, but I am convinced that the technique of the relationship of statutory and semi-statutory bodies to the Government and to this House must be studied carefully and worked out carefully if we are to preserve the efficiency of government and Parliament under modern conditions, and if we are to preserve, as we must preserve, ultimate definite Parliamentary control over whatever is brought forward and whatever has to be decided. If I may say so, the Debate to-day has shown that, even when something originates in a statutory committee, this House will treat that subject properly and sincerely when it comes before Parliament for final decision, and I believe that on the correct solution of this particular technique a great deal of our modern governmental and Parliamentary procedure will in the future depend. The Statutory Committee has examined an important problem; it has issued a report which the Government have adopted and have come to a conclusion which I think the House will do well to endorse.

Question put.

The House divided: Ayes, 184; Noes, 96.

Division No. 145.]AYES.[10.30 p.m.
Acland-Troyte, Lt.-Col. G. J.Greene, W. P. C. (Worcester)Palmer, G. E. H.
Agnew, Lieut.-Comdr. P. G.Gridley, Sir A. B.Patrick, C. M.
Albery, I. J.Grlmston, R. V.Peat, C. U.
Amery, Rt. Hon. L. C. M. S.Gritten, W. G. HowardPenny, Sir G.
Anderson Sir A. Garrett (C. of Ldn.)Guest, Hon. I. (Brecon and Radnor)Peters, Dr. S. J.
Anstruther-Gray, W. J.Guest, Maj. Hon. O.(C'mb'rw'll, N.W.)Petherick, M.
Apsley, LordGuinness, T. L. E. B.Pilkington, R
Astor, Hon. W. W. (Fulham, E.)Gunston, Capt. D. W.Porritt, R. W.
Baldwin, Rt. Hon. StanleyGuy, J. C. M.Procter, Major H. A.
Baldwin-Webb, Col. J.Hanbury, Sir C.Radford, E. A.
Balfour, Capt. H. H.(Isle of Thanet)Hannah, I. C.Ramsay, Captain A. H. M.
Barclay-Harvey, C. M.Hannon, Sir P. J. H.Ramsnotham, H.
Baxter, A. BeverleyHartington, Marquess ofRankin, R.
Beauchamp, Sir B. C.Harvey, G.Rathbone, J. R. (Bodmin)
Beaumont, M. W. (Aylesbury)Haslam, Sir J. (Bolton)Reed, A. C. (Exeter)
Bernays, R. H.Hepburn, P. G. T. Buchan-Reid, W. Allan (Derby)
Blair, Sir R.Herbert, Major J. A. (Monmouth)Remer, J. R.
Blaker, Sir R.Herbert, Captain S. (Abbey)Rickards, G. W. (Skipton)
Blindell, Sir J.Hills, Major Rt. Hon. J. W. (Ripon)Ropner, Colonel L.
Bossom, A. C.Hope, Captain Hon. A. O. J.Ross, Major Sir R. D. (L'nderry)
Boulton, W. W.Hopkinson, A.Ross Taylor, W. (Woodbridge)
Bower, Comdr. R. T.Horsbrugh, FlorenceRowlands, G.
Boyce, H. LeslieHudson, Capt. A. U. M. (Hack., N.)Runciman, Rt. Hon. W.
Briscoe, Capt. R. G.Hudson, R. S. (Southport)Sandys, E. D.
Brown, Rt. Hon. E. (Leith)Hulbert, N. S.Sassoon, Rt. Hon. Sir P.
Bull, B. B.Inskip, Rt. Hon. Sir T. W. H.Scott, Lord William
Butler, R. A.James, Wing-Commander A. W.Selley, H. R.
Campbell, Sir E. T.Keeling, E. H.Shakespeare, G. H.
Cartland, J. R. H.Kerr, Colonel C. I. (Montrose)Shaw, Captain W. T. (Forfar)
Cary, R. A.Kerr, H. W. (Oldham)Shute, Colonel Sir J. J.
Cobb, Sir C. S.Kerr, J. G. (Scottish Universities)Simon, Rt. Hon. Sir J. A.
Collins, Rt. Hon. Sir G. P.Latham, Sir P.Smiles, Lieut.-Colonel Sir W. D.
Colman, N. C. D.Leckle, J. A.Southby, Comdr. A. R. J.
Colville, Lt.-Col. D. J.Leech, Dr. J. W.Spears, Brig.-Gen. E. L.
Cooper, Rt. Hon. T. M. (E'nburgh, W.)Lennox-Boyd, A. T. L.Spens, W. P.
Craddock, Sir R. H.Lindsay, K. M.Stanley, Rt. Hon. Lord (Fylde)
Cranborne, ViscountLlewellin, Lieut.-Col. J. J.Stanley, Rt. Hon. Oliver (W'm'l'd)
Crookshank, Capt. H. F. C.Lloyd, G. W.Storey, S.
Crowder, J. F. E.Loder, captain Hon. J. de V.Strauss, H. G. (Norwich)
Cruddas, Col. B.Loftus, P. C.Stuart, Hon. J. (Moray and Nairn)
Davies, Major G. F. (Yeovil)Lovat-Fraser, J. A.Sueter, Rear-Admiral Sir M. F.
De Chair, S S.McCorquodale, M. S.Sutcliffe, H.
Donner, P. W.MacDonald, Rt. Hon. M. (Ross)Tasker, Sir R. I.
Duggan, H. J.Macdonald, Capt. P. (Isle of Wight)Tate, Mavis C.
Duncan, J. A. L.McKle, J. H.Taylor, Vice-Adm. E. A. (Padd., S.)
Dunglass, LordMaclay, Hon. J. P.Thomas, Rt. Hon. J. H. (Derby)
Dunne, P. R. R.Magnay, T.Thomas, J. P. L. (Hereford)
Eastwood, J. F.Manningham-Buller. Sir M.Thomson, Sir J. D. W.
Edmondson, Major Sir J.Margesson, Capt. Rt. Hon. H. D. R.Titchfield, Marquess of
Emmott, C. E. G. C.Markham, S. F.Tree, A. R. L. F.
Emrys-Evans, P. V.Mayhew, Lt.-Col. J.Tryon, Major Rt. Hon. G. C.
Everard, W. L.Mellor, Sir J. S. P. (Tamworth)Tufnell, Lieut.-Com. R. L.
Fleming, E. L.Mills, Sir F. (Leyton, E.)Wakefield, W. W.
Fox, Sir G. W. G.Mitchell, H. (Brentford and Chiswick)Wallace, Captain Euan
Fraser, Capt. Sir I.Mitchell, Sir W. Lane (Streatham)Waterhouse, Captain C.
Fremantle, Sir F. E.Mitcheson, G. G.Wickham, Lt.-Col. E. T. R.
Furness, S. N.Moreing, A. C.Winterton, Rt. Hon. Earl
Ganzonl, Sir J.Morrison, W. S. (Cirencester)Wise, A. R.
Glucksteln, L. H.Muirhead, Lt.-Col. A. J.Womersley, Sir W. J.
Goodman, Col. A. W.Nicolson, Hon. H. G.
Gower, Sir R. V.Ormsby-Gore, Rt. Hon. W. G.TELLERS FOR THE AYES.—
Graham, Captain A. C. (Wirral)Orr-Ewing, I. L.Lieut.-Colonel Sir A. Lambert Ward and Mr. Cross.
NOES.
Acland, Rt. Hon. Sir F. DykeCluse, W. S.Gallacher, W.
Adams, D. (Consett)Cocks, F. S.Gardner, B. W.
Adams, D. M. (Poplar, S.)Compton, J.Garro-Jones, G. M.
Adamson, W. M.Daggar, G.George, Major G. Lloyd (Pembroke)
Alexander, Rt. Hon. A. V (H'lsbr.)Davies, R. J. (Westhoughton)George, Megan Lloyd (Anglesey)
Anderson, F. (Whitehaven)Davies, S. O. (Merthyr)Green, W. H. (Deptford)
Banfield, J. W.Day, H.Greenwood, Rt. Hon. A.
Batey, J.Dobble, W.Grenfell, D. R.
Bellenger, F.Dunn, E. (Rother Valley)Griffith, F. Kingsley (M'ddl'sbro, W.)
Benson, G.Edwards, Sir C. (Bedwellty,Griffiths, J. (Lianelly)
Broad, F. A.Evans, D. O. (Cardigan)Hall, G. H. (Aberdare)
Brown, Rt. Hon. J. (S. Ayrshire)Fletcher, Lt.-Comdr. R. T. H.Hall, J. H. (Whitechapel)
Buchanan, G.Foot, D. M.Hardie, G. D.
Charieton, H. C.Frankel, D.Harris, Sir P. A.
Henderson, A. (Kingswinford)Maxton, J.Simpson, F. B.
Henderson, J. (Ardwick)Messer, F.Smith, E. (Stoke)
Henderson, T. (Tradeston)Morrison, R. C. (Tottenham, N.)Stephen, C.
Herbert, A. P. (Oxford U.)Naylor, T. E.Stewart, W. J. (H'ght'n-le-Sp'ng)
Holland, A.Oliver, G. H.Taylor, R. J. (Morpeth)
Hopkin, D.Owen, Major G.Thurtle, E.
Jenkins, Sir W. (Neath)Paling, W.Tinker, J. J.
Jones, A. C. (Shipley)Parker. H. J. H.Walker, J.
Jones, Morgan (Caerphilly)Potts, J.Watkins, F. C.
Kelly, W. T.Price, M. P.White, H. Graham
Kennedy, Rt. Hon. T.Pritt, D. N.Wilkinson, Ellen
Lathan, GQulbell, J. D.Williams, E. J. (Ogmore)
Lawson, J. J.Rathbone, Eleanor (English Univ's.)Wilson, C. H (Attercilffe)
Lee, F.Riley, B.Windsor, W. (Hull, C.)
Leonard, W.Ritson, J.Woods, G. S. (Finsbury)
Leslie, J. R.Rowson, G.Young, Sir R. (Newton)
Macmillan, H. (Stockton-on-Tees)Sexton, T. M.
MacMillan, M. (Western Isles)Shinwell, E.TELLERS FOR THE NOES.—
Marklew, E.Short, A.Mr. Whiteley and Mr. Mathers.

Question put, and agreed to.

Resolved, That the draft of the Unemployment Insurance (Reduction in Weekly Rates of Contributions) Order, 1936, laid before Parliament on the eighteenth day of March, in pursuance of the provisions of Sub-section (4) of Section 59 of the Unemployment Insurance Act, 1935, be approved.