Unemployment Insurance Acts, 1935 and 1936.

– in the House of Commons on 25th March 1938.

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11.6 a.m.

Photo of Mr Ernest Brown Mr Ernest Brown , Leith

I beg to move, That the draft of the Unemployment Insurance (Additional Benefits) Order, 1938, laid before this House on the second day of March, in pursuance of the provisions of subsection (4) of Section 59 of the Unemployment Insurance Act, 1935, be approved. In rising to move this draft Order, I wish to ask your guidance, Mr. Speaker. Perhaps it will be for the convenience of the House if I am allowed to discuss both this Order and the other Order in my name on the Paper, and they can then be both debated as widely as your Ruling will allow, with such other issues as it is to the advantage of the House and the country that we should discuss.

Photo of Lieut-General Edward Fitzroy Lieut-General Edward Fitzroy , Daventry

If that is the feeling of the House, I have no objection.

Photo of Mr William Adamson Mr William Adamson , Cannock

I am quite prepared to accept that.

Photo of Mr Ernest Brown Mr Ernest Brown , Leith

The House will remember that the procedure set up under the original Act made it obligatory on the Insurance Statutory Committee to make a report once a year, at the end of the calendar year, on the financial position of the Fund. Of course, when they make their recommendations, in pursuance of their decision, the Government have the right either to accept or not to accept, but the Government cannot alter the decision of the Committee as to what the financial position of the Fund is. The Committee can recommend, in pursuance of their judgment as to what the position of the Fund is, either, that improvements shall be made in one way or another, or if, as may occur in years to come, the balance swings the other way, that steps shall be taken to meet any deficit. The Government then have the right to differ from the Committee as to the method suggested. If they do, they must come to the House with proposals having exactly the same financial effect as the Committee's recommendations and state their reasons to the House. On this occasion the Government agree with the recommendations of the Committee, and the Draft Orders are meant to implement them if and when Parliament agrees.

I have noticed a tendency for some of those who discuss this problem, both inside and outside the House, to suggest that because the Government accept the recommendations of the report they necessarily accept the Committee's statements as to the course of unemployment. This is not so. The Committee have, in the course of three or four reports, given carefully balanced views as to what the course of unemployment will be; but in connection with their present report the House will see two things: first, that their forecast last year was unduly pessimistic; secondly, that, although over the whole of the year that is true, there was a sharp alteration in the last quarter of the year. Let me give one or two facts in order to make that clear. In 1936 the experience of the Fund was better than the expectations of the Committee in the previous report. They expected an average of 14.5 per cent. of unemployment, with 46 per cent. ranking for benefit. The actual experience of that year was 12.9 per cent. of unemployment, with 46.2 per cent. ranking for benefit. For the year which we are now considering the report forecast an average of 12 per cent. of unemployment throughout the year, with 45 per cent. ranking for benefit; whereas the actual experience was 10.7 per cent. of unemployment, with 48.4 per cent. ranking for benefit.

So the House will see that, while the Committee's reports are most valuable examinations in the light of information available to them; both general economic information on the one hand, and, precise and particular information as to the actual experience of the Fund in the course of their examination and administration, on the other; yet it is not the case that, because the Government of the day regard the recommendations of the Committee as reasonable in the circumstances, the Government of the day necessarily share the view of the Committee as to the outlook in terms of any particular percentage forecast of unemployment. I will not go further than that, except to say that I made my view on that generally clear two days ago. This is the fifth report on the General Fund, and the second on the Agricultural Fund. The House will remember that since 1935 there have been two reports, and all the reports have happily been favourable as to the position of the Fund. Indeed, I think the House as a whole will agree that the setting up of the Unemployment Insurance Statutory Committee, with its most able chairman, Sir William Beveridge, was a major piece of social machinery and a most valuable piece of social machinery; and, from the point of view of those concerned to see that undue fluctuations in the treatment of unemployment do not occur it is a most valuable body. These reports help us to understand, as we were not able to do, the general trend and possibilities, and, more than that, to take evidence, in a way not possible before, from various bodies as to what should be done with any balance that may accrue at the end of the year.

May I refresh the memory of the House with the results of previous reports? In 1935, the Committee recommended that there should be is. for dependant children additional to the 2s. which was then the ruling rate. That was at a cost of £1,250,000 per annum. It will be observed that the recommendations of the Committee take into account the finances of the Fund for some years ahead, since their view of the Fund is governed by a present view of an eight-year trade cycle. It does not follow that next year or the year after they will take a view of an eight-year cycle, but in all their reports up to now that is the view they have taken. When we are financing these proposals, we are not merely financing for one year, but for the whole of the trade cycle. There has been a good deal of misunderstanding as to the use of the balances, by those who do not understand that they were not recommending conditions for one year only, but for the whole period of the trade cycle. In 1936 the recommendation was on the other side of the balance sheet. It meant an annual loss of revenue to the Fund of £6,500,000, because one penny was taken off the contributions all round for all persons aged 18 years and over.

Last year, two major recommendations were made. The waiting period was reduced from six days to three at an annual cost of £1,250,000, and the maximum number of days was increased and the ratio of deductions decreased from one in five to one in eight, at a cost of £1,000,000 per annum. To-day we have these two reports, one on the state of the General Fund and the other on the Agricultural Fund. Let me deal with the facts as the Committee found them and with the recommendations made inside their findings, which are binding upon the Government. They found, at the end of December, 1937, that the general account had a balance of £60,379,000. I would ask the House to note that word "balance," because I have seen the £60,000,000 described outside as a surplus. It is not a surplus, but is the balance at the end of the year.

Photo of Mr Joseph Batey Mr Joseph Batey , Spennymoor

Will the right hon. Gentleman tell us the difference between a surplus and a balance?

Photo of Mr Ernest Brown Mr Ernest Brown , Leith

That is precisely what I am now proposing to do. The balance is £60,000,000, but the Committee have taken a decision from the beginning—and the House has agreed up to now—that it would be a very prudent thing to hold part of each annual balance as a reserve. In the first report it was just over 13,000,000. The reserve that has been earmarked is a prudent reserve, and I want the House clearly to understand that both the Committee and the Government take the view that, in our administration of this Fund, we do not desire to do anything which will need undoing in the years ahead, even if the circumstances of unemployment may be adverse. For my part, as Minister of Labour, I am determined, as far as I can, to see that nothing is done under my administration which will need undoing because of lack of prudence. I would rather pay less immediately and make sure that there is no necessity to increase contributions or to decrease benefits in the years ahead, than take perhaps a more optimistic or rash view which might lead to steps of that kind, because such steps would have immediate repercussions in the homes of the unemployed people, who would have to suffer if any alterations were made because of imprudent finance.

Photo of Mr Arthur Jenkins Mr Arthur Jenkins , Pontypool

That is on the assumption that the present benefits are paid?

Photo of Mr Ernest Brown Mr Ernest Brown , Leith

No, I do not say that. I do not accept the hon. Member's point of view in that interjection at all. We have made it quite clear that, without expecting that there would be a balance to dispose of this year of £7,500,000, which is the sum earmarked by the Committee this year, each successive year we have been able to increase the benefit, which is exactly what we are now asking the House to do again. I am merely making the point that when we do increase benefits to meet the needs— although, as the House knows, the Unemployment Fund has never been laid down on the basis of need at all—we make our alterations for good. We want to make them as permanent as human foresight and prudence can ensure.

Photo of Mr Arthur Jenkins Mr Arthur Jenkins , Pontypool

Do I understand that the Minister admits frankly that the present rates of benefit are not adequate for needs? He knows perfectly well that a very large number of people now on statutory benefit have to apply to the Unemployment Assistance Board for a supplementation of their present benefits.

Photo of Mr Ernest Brown Mr Ernest Brown , Leith

I am not going to be drawn into a discussion of that matter, because I have made it quite clear that we have never discussed this problem on that basis. What we have done is to establish a fund, the primary purpose of which from the beginning was to tide over those whose unemployment periods are more or less short. What we are doing now is to see whether, as a result of our present experience, by wise administration and by the valuable structure of the Statutory Committee, we can make improvements from time to time, which the House, on all sides, is, of course, glad to do. I quite expect to hear in the course of the discussion to-day that Members in other parts of the House would wish that what we are intending was even something more, and if I cared to detain the House I could state the adjectives that would be used by those hon. Members of the House.

Photo of Mr Ernest Brown Mr Ernest Brown , Leith

Oh, yes, I could, quite easily. I have a very good memory. It is not foresight now; it is memory. I have heard those adjectives so often that they are written on my brain. The difference is, that part of that balance is earmarked against any adverse trend which may come during the average cycle. The improvements of previous years to which I alluded in the early part of my speech are estimated by the Committee to account, out of the balance of £60,000,000, for £15,366,000, and this with the amounts put aside to reserve, in view of bad times that might come, accounts for £52,900,000. That leaves us, as the Committee declare, out of the balance of £60,000,000, with a disposable surplus of £7,416,000, after forecasting the probable course of employment in this next period. It means an annual distribution over a cycle of eight years of about £1,000,000, and the Committee recommend, therefore, that the £7,416,000 shall be reckoned for the period of the cycle as equivalent to a disposable surplus at the rate of £1,000,000 a year, and that is the basis of their recommendation to the House to-day of the proposals which I will explain in a moment.

There is one other thing. Each successive improvement in the scheme means that the balance of the Fund is reduced. For instance, in 1935 the balance in the Fund represented a balance point of unemployment of 18·1; then 17·7 as the result of the first improvements; then 16 per cent. as the result of the improvements in 1936; and 15·4 per cent. following the improvements last year. If Parliament agrees to the improvement recommended to the House to-day, the Committee point out that the balancing point of the Fund will then be 15·1. Last winter we asked the House to give the Committee power to recommend an additional repayment of debts in addition to the £5,000,000 of interest and redemption which they were paying under the Act of 1934. The House gave the Committee that power and the Committee recommended that out of the balance there should be paid off £20,000,000 extra. That £20,000,000 will be paid off at the end of March, and since the present debt stands at £103,000,000 it will come down to £83,000,000. As I explained when I was conducting that Bill through the House, that means a net saving on interest and redemption of £500,000. So that in considering the Order relating to the general account it must be borne in mind that £1,000,000 represents the disposable surplus over the cycle on the General Fund and the additional £500,000 is the result of paying off £20,000,000 extra of debt.

Photo of Mr William Adamson Mr William Adamson , Cannock

Is that £20,000,000 in addition to the Statutory amount of the £5,000,000 that can be paid under the cycle?

Photo of Mr Ernest Brown Mr Ernest Brown , Leith

I thought that I had made that quite clear. It does not affect the £5,000,000, although the two together will affect the period and the rate of repayment up to 1971. There will, of course, be a variation in the capital payments.

Photo of Mr Aneurin Bevan Mr Aneurin Bevan , Ebbw Vale

The £5,000,000 a year will still be paid on the remaining debt of £83,000,000? In other words, the statutory amount of £5,000,000 for the annual interest and repayment of the debt will not be reduced?

Photo of Mr Ernest Brown Mr Ernest Brown , Leith

That is so. The statutory £5,000,000 will be paid. The £20,000,000 is in addition, and still the Committee have been able to recommend the additional benefits. The House will remember that the Act of 1937 gives power to the Committee to reborrow up to the point at which the Fund would have been if the extra £20,000,000 had not been paid off, if they need to do so in order to deal with an adverse situation. The recommendations are straightforward. The Committee received evidence from all kinds of bodies as to what ought to be done, and having weighed the evidence they came to an agreement, with a minority of two. Mr. Ayre and Mr. Craig were the minority. The remainder of the Committee, including the chairman, came to the conclusion that the proper thing to do—and the Government agree with that view—is to make two alterations, first, to increase the adult dependants' allowance, which includes wives, who are the majority, from 9s. to 10s. at a cost of £1,000,000 a year over the cycle and, secondly, to alter the number of additional days of benefit in favour of the man with a good record of contributions over five years, by making the ratio of deductions in respect of benefit previously drawn one in ten instead of one in eight. Last year we altered the ratio from one in five to one in eight. Therefore, several weeks more benefit will be payable. I think that recommendation will be regarded as welcome and prudent, and that the House will agree that it is advisable.

Now I turn to the Agricultural Account. The balance declared by the Committee on 31st December was £1,825,000. That included £647,000 balance from 1936. We are only in the second year of the working of the agricultural scheme. The contributions began on 4th May, 1936, but the benefits did not begin until 5th November in that year, so there were six months more contributions than benefits paid to be accounted for in the figures. In 1937 the Committee reported an excess of receipts over payments of £1,178,000. A prudent view is needed, because of the small experience we have had of the working of the scheme. The Committee make that clear in their report.

The Committee have come to the conclusion that they can recommend the following alterations. (1) That the waiting period be reduced from six days to three, in order to make it similar to that prevailing in the General Account. That will cost £50,000 per annum; (2) That there should be reduced contributions of one halfpenny, costing £180,000. In discussing the original Agricultural Insurance Act the House will recollect that there was a great deal of comment in the House and in the Committee upstairs as to whether 4d. or 4½d. was the right levy. At first, the Committee thought that 4d. should be the levy, but the Government took the view that, on the whole, since the position was without precedent it was wiser to start with 4½d., but I gave a pledge in the Committee upstairs that in reviewing the whole field after our experience we would take that fact into account. We have taken that fact into account, and the very satisfactory balance in the Fund shows that we do not need the extra halfpenny. Therefore, the contribution in future as from the July exchange of books will be 4d. for men instead of 4½d., and for women 3½d. instead of 4d. That will mean a decrease in the administration cost of the Agricultural Fund of £22,500.

The third recommendation of the Committee was that the weekly rate of benefit in the case of young men between 18 and 21 should be increased from 10s. 6d. to 12s. That will cost £5,000 a year. The fourth recommendation is to rectify an anomaly. Attention was drawn to this matter by Mr. Holmes, of the Agricultural Workers' Union, and several agricultural Members of this House, whose names I need not mention, although my particular attention was called to it by the hon. Member for King's Lynn (Mr. Maxwell). When the Act was passed it was thought necessary to make a ten-contributions rule, that is, that the payment of a further ten contributions should be required after exhausting the benefit rights in the previous benefit year whether the overriding maximum of 300 days or the lower maximum based on the rules proportioning benefit to unexhausted contributions. We found certain anomalies, whereby men who had enough contributions to qualify did not, because of this rule, receive benefit. Therefore, the Committee recommended that the anomaly should be rectified, and in future the ten contributions rule will apply only where the claimant has exhausted 300 days benefit in a benefit year. That recommendation will cost £10,000 a year.

As a result of the recommendations, the income of the Fund will be less by £180,000 a year, due to the reduction of one halfpenny all round in the contributions, and the expenditure of the Fund will be increased by £42,500. The changes will come into force—except for the reductions in contributions, which begin with the July exchange of books—on 31st March. I am sure the House will feel satisfaction that experience has enabled the Committee to recommend, and the Government in turn to recommend to the House, these welcome changes, which will no doubt be gladly received in the homes of the unemployed people.

11.34 a.m.

Photo of Mr Aneurin Bevan Mr Aneurin Bevan , Ebbw Vale

I want to start my speech by making what has become the usual explanation to the House in discussing these matters. We have not the opportunity of discussing these Orders in detail. They have to be accepted or rejected in toto. Although the Statutory Advisory Committee have had the opportunity of discussing the various alternative methods of using the money at their disposal, and have been able to receive evidence from different bodies who have been able to make representations, the only people who are forbidden by Statute, who are forbidden by the Act, from deciding how to make the best uses of the money are Members of the House of Commons. Everyone else has had an opportunity of representing the claims of different classes of people to receive the surpluses at the disposal of the Fund. We are forbidden to do so, and, consequently, the Government and the country are denied the experience and knowledge which are available in this House. Only a few years ago, when the Unemployment Assistance Regulations were before this House, we realised the disadvantage of not being able to make use of the knowledge and experience in the House, and I want to say, in passing, that it must not be understood that we in any way abate our opposition to this form of legislation. But in consequence of the position with which we are confronted we are unable to divide against these Orders because they do, in fact, contain certain benefits for unemployed people. We should like to have been able to make other suggestions as to the way the money should be used, but it is, of course, impossible for us to divide against the Order.

There is one aspect of the Committee's report to which I want to draw special attention. The Statutory Committee have certain obligations imposed upon them by the Act of 1935. The Committee are forbidden to go outside their statutory powers; they are the prisoners of the Statute. They can only do things which the Statute permits, and if they exceed their powers we must draw attention to it. In our judgment, the Statutory Committee have exceeded their powers, gone outside the duties imposed upon them, by discussing the very serious matter of the relationship between benefit and wages. I have looked at the Act of 1935 to find whether there is anything in it which enables them to do this, but neither in the text of the Act nor in the Schedule, which refers to the duties of the Committee, can I find anything which would entitle the Statutory Committee to assume that they can make inquiries and observations on matters which lie outside the purely actuarial scope of the Fund. There is language in the Schedule which might conceivably be strained to give the Statutory Committee this right, but I think it would be straining the meaning of the words beyond what was intended by Parliament. Indeed, it is obvious from the report of the Statutory Committee that they entertain doubts whether they are entitled to make these investigations and observations upon the relationship between rates of benefit and wages, because in paragraph 63 they say: Apart from this practical difficulty, there is much to be said for the view that introduction either of a 'ceiling' or of a 'wage-stop' into unemployment insurance raises issues of social policy, which should be dealt with only by full Parliamentary procedure after special inquiry directed to the question. Then again, on the next page they say: If in the general scheme there were either a 'wage-stop' or a 'ceiling,' or if, on the other hand, the wage system made allowance for dependency, the main objection to further increases in rates of benefit would be removed. In another part of the report they say that in their judgment the obligation to consider insurance proper, which is what they have to do, excludes the right to make observations and recommendations upon the matter. We take serious exception, first, to the Committee making general observations of this kind which are in the nature of propaganda for a principle which they themselves have no right to discuss, and, in the second place, if it is held that the Committee have not exceeded the powers given them and wish to exercise them, they should do so in a way which enables full inquiry to be made and full representations to be made from all interested in this important matter. As far as I know, apart from the inquiry of the Ministry of Labour, the Statutory Committee have not received any advice from organisations of labour or from employers on this matter. Indeed, no opportunity has been furnished to people to give advice and evidence upon it, and the Committee in their report show the necessity for full inquiry being made before conclusions are reached.

The Committee, knowing the seriousness of this matter, and knowing the full implications of relating rates of benefit to wages, conclude that it would not be wise to come to a conclusion upon it until full inquiry has been made; and yet on page 25 they come to such a conclusion. They discuss the relative claims of adding is. a week for each child as against giving this 1s. additional benefit to the adult worker, and they conclude that it ought not to be given in respect of each child, because it would increase the number of those who are now receiving benefit in excess of wages, by 25 per cent. In other words, the Committee have chosen to give is. to the adult dependant, because it will increase by only 11 per cent. those persons who are in receipt of more benefit than they earn as wages, and they refuse to recommend the additional is. to each child because it would raise this number by 25 per cent. What is the position which the Statutory Committee wish to take up? Is it that no conclusion ought to be made until full investigation has been made, or, alternatively that such a conclusion ought to be made at once, and that in making it they refuse to give an additional 1s. for each child?

Miss Rathbone:

I should like to know how the hon. Member justifies his complaint against the Statutory Committee, and whether his real complaint is not against the Minister. The Committee point out that there is no satisfactory solution of the rate benefit problem because there are practical difficulties in recommending an increase in the rates of benefit. It would bring them up against difficulties arising out of the wage system which makes no provision for dependants, and they suggest that the Minister should make an inquiry into the general problem. They made the suggestion three years ago, and, therefore, I think the hon. Member is rather unjust to the Statutory Committee, and that his real complaint is against the Minister.

Photo of Mr Aneurin Bevan Mr Aneurin Bevan , Ebbw Vale

Surely the hon. Lady has not grasped my point. The Committee express the view that it is not imposed on them by Statute to make recommendations about a matter of wide social policy. They are not asked either by Statute or by the circumstances of the case to discuss the effect upon wages of raising the expenditure.

Miss Rathbone:

Are they not allowed to consider the effect upon the Fund of making an alteration which might make the Fund very difficult to protect in future?

Photo of Mr Aneurin Bevan Mr Aneurin Bevan , Ebbw Vale

The hon. Lady's preoccupation with family allowances makes it difficult for her to understand the point I am making. Surely, I ought to have at least her sympathy, if not that of anyone else, in this matter. The Committee have refused to recommend the additional 1s. for each child, not because it would make the benefits too high, for they say that looking at it as a whole, the existing scale of benefits cannot be regarded as so fully meeting needs as to make it undesirable to raise them further, but because it would make the benefits higher than wages. That is a very serious matter. There we have a body, set up by Parliament, which regards it as its first duty to protect the wage system. Having a certain amount of money at their disposal—far more money than they say, as a matter of fact—and having to choose between recommending two principles, raising the rate of benefits or not raising it because of the effect upon wages, they have chosen not to raise benefits. Whatever may be the views of hon. Members as to the relationship between benefits and wages, I think I shall have the support of all parts of the House when I say that we must take exception to the Committee making recommendations of this nature.

If it is the wish of the House that benefits should have an upward limit in order that people may not be over-insured, then such a decision should be made by the House after full inquiry and Debate, and not be slipped through as it is in this way. If there are any more surpluses to be disposed of, we shall find that the Committee will be adding to this method in report after report, and we shall find the same vicious principle invoked throughout the whole of unemployment insurance. From the nature of the Committee's observations, hon. Members can see the position which exists in the country. The position has been reached in which the scales of benefit are already higher than the rates of wages paid in many industries. That is a fair statement of the facts, and it is a very serious thing that in many industries many people are receiving wages that are less than the scale of unemployment insurance benefits and allowances, which everybody admits is already inadequate.

There is an even more serious aspect of the matter to be considered. Recently there was in the House a Debate in which hon. Members in all parts expressed their concern about the decline in the birth-rate. Some years ago, the Chancellor of the Exchequer gave rebates for children in respect of Income Tax in order to encourage larger families, and recently the Minister of Health brought forward proposals the object of which was to find out in what sections of the people and in what areas there was a decline, in order that the position might be remedied. Now the Committee are saying that there should be a limit to benefit, because the people with large families would receive more benefit than wages. It is a system of legislation which penalises large families. What a completely chaotic condition of affairs when, on the one hand, the Government express concern about the declining birth-rate and, on the other hand, bring in legislation penalising large families. There would seem to be no guiding principle in the social policy of the Government. The Government have said in the past that the people they want to encourage are those who have large families, but these are the very people whom this upward limit would first affect. I think that is a highly undesirable position to continue, and I hope that the right hon. Gentleman will convey our views to the Committee, and that the Committee will desist from this kind of conduct.

The recommendations now before the House in draft form dispose of £1,500,000 a year as being the only sum which the Committee feel would be at their disposal for each of the eight years covered by their review, but that sum is kept artificially low by the fact that the Committee use £20,000,000 of the available surplus in order to reduce the debt of the Fund from £103,000,000 to £83,000,000. Let the House consider for a moment what that means. We have always taken exception to the debt being on the Fund. The debt was contracted in respect of an area of insurance wilder than the existing area, and indeed, if my memory is correct, the Government of the day managed to get this through the House of Commons by a piece of hocus-pocus.

Photo of Mr Aneurin Bevan Mr Aneurin Bevan , Ebbw Vale

I remind the hon. Member that there was a revolt even on the the Government Benches at that time, and it was obvious from the Debate that that revolt would have resulted in a defeat of the Government if it had been possible to have a Division. Even in those circumstances, the Chancellor of the Exchequer had to make a concession in order to secure the passage of the legislation. Here we have people within the area of unemployment insurance proper having to discharge a debt which was not incurred by them or in respect of them, but which was incurred in the wider area of the unemployed who are now chargeable to the Unemployment Assistance Board. We say, as we have always said, that this debt ought to be a charge on the National Debt and not on the Unemployment Fund. It is entirely inequitable to charge it upon the Fund. No one has attempted to defend its being charged upon that Fund, either from an actuarial or any other point of view.

Photo of Mr Aneurin Bevan Mr Aneurin Bevan , Ebbw Vale

It is the opposite of insurance. The Fund was started off with a liability which was put there so that, if years of prosperity came, as they did, in respect of the Fund, the accumulated surplus would be kept down by the necessity of paying the debt and would not be dis- tributed in higher benefits to the unemployed. The £20,000,000 which is now being paid off the debt could easily have been used to increase the benefits. If the Committee are entitled to take the view that this money will not be needed, and that they will use it to pay off the debt, and that in eight years time they will still be enjoying the balanced figure of 15.1 per cent. of unemployment, then there is no reason at all why that money should not at once be made available for additional benefit at the rate of £2,000,000 a year. If they feel safe in using this £20,000,000 to reduce debt, then the money is available. If the money is available, why not use it for the benefit of the unemployed, and not for the benefit of the moneylender or the Exchequer?

I ask hon. Members to consider the social effects. Usually a man pays his debts when he is at work. When he is idle he is usually left alone. Here we have the reverse. When a man is working he has no debt to pay, but when he becomes idle he has a debt to pay. That is the reverse of common-sense. The right hon. Gentleman smiles, but that is the case. Let him remember that in the distressed areas the Unemployment Assistance Board are reducing allowances to young men to the limit of 10s. a week. Those reductions will have their full effect at the end of this month. The Government say to the young men, to whom they are preaching the necessity for fitness, "You must live on ten bob a week, not because we have not the money for you, but because we are going to give £20,000,000 to pay off this debt." That is a monstrous proposition. If the Government used this money for the purpose, and if the Fund had not this debt, the means test could be abolished.

Photo of Mr Herbert Williams Mr Herbert Williams , Croydon South

That would be a bad thing, anyhow.

Photo of Mr Aneurin Bevan Mr Aneurin Bevan , Ebbw Vale

I do not wish to discuss the hon. Member's troglodyte opinions now. They are not worth discussion in any case. But there is not an hon. Member opposite who, if he had the opportunity, would dare to go into the Lobby and to vote for the family means test. They have always dodged it. I cannot pursue that matter, because it would be out of Order. It is a very serious proposition for these young men that at a time when their allowances are being reduced, the House should approve of a proposal to apply £20,000,000 to the reduction of a debt which the Fund ought never to have borne. When we consider the ways in which the Committee are disposing of the surplus, what is happening becomes obvious. The unemployed of this country are now faced with a formidable enemy—the Treasury. Unemployment allowance is paid from the Treasury. Unemployment benefit is paid from the Fund. The more people are chargeable to unemployment assistance, the more the Treasury have to find. The less they have to find the more the Fund has to find.

At the moment unemployment assistance benefit is being supplemented in the manner already indicated by my hon. Friend the Member for Pontypool (Mr. Jenkins). To the extent that benefit rates are being raised, a great deal of the advantage will go to the Treasury, and not to the unemployed. We do not know what proportion of the £1,000,000 will be used in the additional is. a week that will directly go to the unemployed, because we do not know the amount or the rate of the supplementation for the country as a whole. What we do know is that a very large proportion of this £1,000,000, which the right hon. Gentleman has suggested will be given in additional benefits, is already being received in supplementation from the Unemployment Assistance Board, so that the Treasury, and not the unemployed, are to gain some of the benefit. With regard to the £500,000, the Treasury will get the benefit, because that will increase the number of people on the Fund, and decrease the number on the Board. Almost all of them, except those having new determinations, will be taken off the Board and put on the Fund, and the only advantage they will gain will be the difference between what they receive as unemployment assistance now and what they will receive as unemployment insurance benefit then. As to the great bulk, this £500,000 will be a direct advantage to the Treasury, and not to the unemployed.

This, therefore, is not a proposal to raise the standard of the unemployed. It is an economy—a proposal to save money for the Treasury. While we entirely approve of the first principle, we are doubtful about the second. The General Council of the Trades Union Congress asked that this sum should be used in order to remove the waiting days. That would have been a great benefit to the unemployed because at present, in many parts of the country, men have to wait nine and ten days, or ever longer, before they get benefit, and that is a very serious thing indeed for them. What is the reply of the Committee to that proposal? It is interesting. They say that in their opinion it is better that a man should receive additional help at the end of his period of unemployment than at the beginning of it, because then it does him most good. If the right hon. Gentleman accepts that principle, it is difficult to see how he can justify unemployment assistance at all, because unemployment assistance operates on the principle of reducing the assistance to the unemployed man who has been unemployed longest. It is only when he has been unemployed for two years that he comes on the Board and his allowance is reduced. Yet the Committee contend that it is at the end of his period of benefit that he should have the greatest help. There is a direct conflict between those two propositions.

I come now to the agricultural report. It is monstrous that the Committee should give back £180,000 a year in reduction of contributions, having regard to the low scale of benefit paid to agricultural workers. A sum of £40,000 of the available surplus is to be used for increased benefit but £180,000 is to go to the Treasury in reduction of contribution. Have the representatives of the Agricultural Workers Union asked for that reduction of contribution? [HON. MEMBERS: "No."] I do not think they have. The employers, of course, have asked for it. They always do, but the workers have not, and if the burden of contribution falls heavily upon anyone, it falls heavily upon the agricultural worker. One of the justifications for the low rate of benefit to agricultural workers was the fact that the agricultural workers could not afford to pay higher contributions, but they have paid higher contributions. Why were low rates of benefit fixed for them? It was because increased rates of benefit in the agricultural areas would serve to level up the agricultural wages, and exactly the same reasoning applies in the case of agriculture as to industry generally. The rates of benefit are being kept artificially low because, if they were raised, employers would have to pay decent wages.

The results of this policy are evil in the extreme. The Committee point out significantly in their report that there are fewer agricultural workers insured than were expected, and they say that one of the reasons probably is that the reverse of the Gresham law is operating. The good scheme tends to drive out the bad, instead of the bad driving out the good, and men are trying to qualify under the general scheme because the rates of benefit are higher. That means that the agricultural worker is trying to urbanise himself, trying to leave the countryside and more and more to find refuge in the towns, to get into the urban areas along the frontiers between agriculture and industry, and draw a wage from the town, denuding the countryside, with the result that the supply of agricultural labour will progressively fall off. Hon. Members opposite are supposed to be the custodians of the agricultural industry in this country, but here they have adopted a policy which is driving young men from the countryside into the towns. It would be a far more intelligent thing if you had used this £180,000 a year surplus to raise the rates of benefit in the agricultural districts and thus forced up the level of the miserably low wages of the agricultural worker.

It seems also that the Statutory Committee are at fault in making, and the right hon. Gentleman in accepting, this recommendation after only one full year's experience of the agricultural insurance scheme. Surely a longer period was necessary before they could come to a conclusion of this kind. We have always objected to the machinery which has been established to govern insurance and assistance in this country, and these recommendations and the reasons upon which they are based fully confirm the fears which we have always expressed about them. It would be far better, and we should have a healthier system of insurance, if the House of Commons were more enfranchised in this matter and had more power to deal with it; and though we cannot divide against these Orders to-day, we protest most bitterly against this wanton dispersal of money which is so badly needed by the poorest people in the country.

12.9 p.m.

Photo of Mr Duncan Sandys Mr Duncan Sandys , Lambeth Norwood

Before I follow the hon. Member for Ebbw Vale (Mr. Bevan) in what he has put before the House, I would like to take this opportunity, which is the first time that I have spoken in a Ministry of Labour debate since the appointment of my hon. Friend the Member for Mid-Bedford (Mr. Lennox-Boyd) to his new office, to congratulate him upon that appointment. I feel that the appointment of a Parliamentary Secretary to the Ministry of Labour has never before aroused such profound interest as on this particular occasion. During the short time in which my hon. Friend has held his new responsibilities he has made his presence felt, not only in this country but throughout the world. I would moreover remind the House that my hon. Friend brings to his new task not only a profound knowledge of, and an acute interest in, the wider sphere of foreign affairs, but a long and consistent record of interest in and sympathy with all labour and unemployment questions. The House well remembers the frequent contributions which my hon. Friend has made during the various debates in this House on employment matters and in regard to the Special Areas. I am sure, that the House, with me, will wish him every success in his new appointment. I do not know why the hon. Member for Gorbals (Mr. Buchanan) laughs. The House always wishes success to new Ministers, particularly those who are called upon to deal with the very difficult and important problems for which the Ministry of Labour is responsible.

The hon. Member for Ebbw Vale complained about the working of the unemployment insurance system. I think that he did that system and its machinery an injustice. He talked about these regulations slipping through and said that the Opposition could not oppose or reject these Orders. Of course they can reject them, and of course they can oppose them. They cannot amend them, but this House, if it does not approve of these Orders, can reject them, and the Minister will then have to go back to his office, think again, and bring back some new Orders which will commend themselves to the House. It is, therefore, absurd to suggest that this is an authoritarian system and that the House has no freedom of criticism. Of all the administrative machinery of this kind that has been set up in this country in recent years, this unemployment insurance system has worked particularly smoothly. Undoubtedly that is to some extent due to the capabilities and to the long experience of Sir William Beveridge, the Chairman of the Statutory Committee.

I propose to-day to concentrate on one particular aspect of this question, one which was touched upon in several places in the speech made by the hon. Member for Ebbw Vale. The Statutory Committee, owing to the satisfactory financial state of the fund, found themselves in a position to recommend the distribution of additional money in the form of allowances. They had to decide whether to distribute that money in the form of allowances to dependent adults—in most cases wives—or to children, or to both. They, in fact, decided to distribute it to the dependent adults exclusively. I want to question the advisability and the justifiableness of that decision. I would like briefly to stress the need which exists to-day for an increase in the allowances for children. I would like further to examine the considerations which led the Statutory Committee to recommend these allowances solely for adults and to show that it was purely a fear of over-insurance which led them to that decision. Finally, I wish briefly to examine the possibility of overcoming these difficulties.

I submit that the case for increased children's allowances is absolutely unanswerable. The Government's advisory committee on nutrition have themselves laid down that a child to be properly nourished must have somewhere between one and two pints of milk a day. If we take the lower amount, one pint, at current prices we see that out of the 3s. allowance the mother will have only something like 8d. left to meet the child's remaining needs for the whole week. Sir John Orr only recently stated that a child of six needs between 6s. and 7s. spent on it to maintain proper health. Even the Unemployment Assistance Board consider that 3s. 6d. is required to provide a child with the necessities of life. I submit, therefore, that it is perfectly clear that the 3s. insurance allowance for children is insufficient. I am not quarrelling with my right hon. Friend's statement that this arrangement is calculated on an insurance basis. I recognise that fact. Nevertheless I point out that if the children are to be dependent on that allowance, the 3s. is insufficient.

I ask the House also to examine the figures of the applicants with large families who have had to go to the Unemployment Assistance Board for supplementation of their benefit The numbers, I admit, are small, but the steady rise recently in the numbers is significant. I quote only two figures which were given recently by the Government in answer to questions in the House. On 11th November last the number of applicants who had to go to the Unemployment Assistance Board for supplementation of benefits was 2,863; on 28th January of this year that figure had risen to 8,664. That, of course, leaves out of account all those applicants who went to the Board and had their applications rejected under the means test. I admit that the numbers I have quoted are few compared with the total number of people who come under unemployment insurance. But that is not the point. It is easy enough to show that the Unemployment Assistance Board allowances themselves are totally insufficient. The fact that people on unemployment insurance have to go to the Unemployment Assistance Board at all, and that the number of those who have had to go there has been quadrupled in 2½ months, shows, I think, that there is a serious maladjustment in the scales.

Let us now examine the reasons which led the Statutory Committee to make the recommendations upon which these Orders are based. Anyone who reads the report will agree that nowhere do the Committee question the children's need of increased allowances. In fact the whole spirit of the report is most sympathetic to the case for increased children's allowances. It is a very lucid report. I do not agree with the hon. Member for Ebbw Vale that the report is confused.

Photo of Mr Aneurin Bevan Mr Aneurin Bevan , Ebbw Vale

I never used the word "confused." It is a clear report.

Photo of Mr Duncan Sandys Mr Duncan Sandys , Lambeth Norwood

The hon. Member said it was a contradictory report. It is confused, therefore.

Photo of Mr Aneurin Bevan Mr Aneurin Bevan , Ebbw Vale

It is clearly contradictory.

Photo of Mr Duncan Sandys Mr Duncan Sandys , Lambeth Norwood

Hon. Members opposite have very queer ideas about what is confused, as we gathered from the debate yesterday. The right hon. Gentleman the leader of the Opposition yesterday accused the Prime Minister of having a confused mind, but if he had been here to-day and had heard some of the remarks of the hon. Member for Ebbw Vale he might have felt that at any rate all the confusion was not on one side of the House. The overriding consideration which weighed in the minds of the Statutory Committee in reaching their conclusions was undoubtedly an administrative one, namely the question of over-insurance. That difficulty runs right through the report. I would draw the attention of the House to a reference to the matter in Paragraph 64: Looked at as a whole, the existing scale of benefits cannot be regarded as so fully meeting needs as to make it undesirable to raise them further, if and in as far as this can be done without multiplying unduly the evils of over-insurance. The Committee are always stressing the evils of over-insurance. That is the consideration which has weighed most in their minds. The Committee in fact were faced, as we are faced to-day, with the whole problem of the relationship between wages and benefit. I think every one will agree that it is an unhealthy state of affairs when a man out of work gets more than when he is in work. The only way the Statutory Committee could avoid aggravating the existing evils of over-insurance, was by denying to the children the additional allowance which on grounds of health every one will recognise to be desirable. On page 25 of their report the Committee say: The particular form of benefit which, having regard both to the advantage of increasing the income of persons when unemployed and to the social disadvantage of over-insurance, appears most desirable at this juncture, is the benefit to adult dependants. The Committee go on to explain exactly how their minds were working. They say: To add 1s. a week to the benefit for adult dependants increases the number of cases where men are as well off unemployed as employed, by less than 10 per cent. If, instead of this, we were to add 1s. a week to the benefit for each dependent child, the number of such cases would be increased altogether by more than one-third, while for the larger families the contrast between the effects of the two changes is even more notable. The Committee go on to say: We propose accordingly, by a majority, that the rate of benefit for an adult dependant should be raised from its present figure of 9s. a week to 10s. a week. It is clear from that how the mind of the Commitee was working. They would have liked to recommend something different. But owing to the difficulties of over-insurance and to the limited scope of their terms of reference, this was the only thing they could do.

Photo of Mr Aneurin Bevan Mr Aneurin Bevan , Ebbw Vale

Will the hon. Gentleman quote the terms of reference to justify that?

Photo of Mr Duncan Sandys Mr Duncan Sandys , Lambeth Norwood

The hon. Member himself complained that the Committee had gone outside their province.

Photo of Mr Aneurin Bevan Mr Aneurin Bevan , Ebbw Vale

My point was that they were going outside their terms of reference in having any regard to the effect of wages.

Photo of Mr Duncan Sandys Mr Duncan Sandys , Lambeth Norwood

It is clear that the Committee felt that their scope was restricted and that they had limited terms of reference within which they must keep. At the end of paragraph 63 they say: To consider the problem of dependency in relation to persons who are unemployed leads to an impasse in one direction or another. In the present report we have to take the law as it is. The Committee were clearly working within prescribed limits. I cannot, therefore, agree with the hon. Member for Ebbw Vale in blaming the Committee for not making recommendations which would have had repercussions for outside the field for which they are responsible. That does not, however, mean that Parliament has not a duty to review the whole problem in its wider aspects. On page 24 the Committee themselves say: As was urged by the Family Endowment Society, and is obvious from the figures cited above, the problem of dependency needs to be considered as a whole. We cannot, unfortunately, deal with it as a whole within the scope of this Debate, but it is a question which will have to be considered by Parliament in the near future. In this connection I would like to stress the point that this problem of over-insurance, while it is acute in certain categories, is not very widespread. In fact the obstacle which is holding up these children's allowances is not such a very formidable one. In paragraph 50 of the report it will be seen that the average wage is 55s. 6d., while the average benefit is only 24s. 6d. There are, moreover, only 2.3 per cent. of the claimants who are better off under unemployment insurance than they are when they are earning wages. In fact, even if the additional 1s. children's allowance were granted, as many of us would like to see, serious over-insurance would still only occur in the larger families of four or more children. There are only 19,000 families under the unemployment insurance scheme with four or more children, as compared with 114,000 with three children or less. From these figures, therefore, it will be seen that the additional children's allowances are being denied to the very numerous families which have few children just because of the danger of over-insurance in the comparatively few families which have many children. I would like to examine the possibility of overcoming this problem. The report itself, I think, provides the answer to it. In paragraph 64 it says: If, on the other hand, the wage system made allowance for dependency, the main objection to further increases in rates of benefit would be removed. That is the answer to the problem. It is only by raising the earnings of those in work that we shall overcome the question of over-insurance. It is clear that to ask for a minimum wage based on the assumption that every working man possesses for the whole of his working life a large family of eight or more children is obviously ridiculous, absurd and impossible. The alternative to that is to make an addition to the wages of that small percentage of people who have large families during the actual period in which the children are dependent upon their parents. I should be transgressing the Rules of Order if I went into the question of family allowances in general. I would like to see them for all children, but we must confine ourselves to-day to the question of over-insurance which arises from the report. This could, in my opinion, be largely overcome by a very restricted system of family allowances applicable only to the fourth and subsequent child. An allowance of 5s. a child would cost only about £6,000,000 a year.

I naturally welcome, and everyone will welcome, the increase of allowances for adult dependants. In many cases their need is very great. I recognise also that without a wage adjustment it would be extremely difficult in present circumstances to increase the children's allow- ances. Therefore, in common with all other Members, it does not occur to me to oppose this Order. At the same time I would ask the Minister to review, between now and next year, when another report will be before us, the whole problem of dependency and the entire relationship between benefit and wages. The report recommends an inquiry into this question, and I hope my right hon. Friend will institute such an inquiry and will submit the results to the consideration of Parliament. In conclusion, let me remind the House that this problem of child dependency is not a new one. A former Prime Minister of this country made some very pertinent remarks upon this subject some time ago. He said: There is a difference in the numbers which compose the families of the labouring poor, so that were the minimum wage fixed upon the standard of a large family it might operate to the encouragement of idleness among one part of the community; and if it were fixed on the standard of a small family those would not enjoy the benefit of it for whose relief it was intended. What measures then can be found to supply the defect? Let us make relief in cases where there are a number of children a matter of right and honour instead of a ground for opprobrium and contempt. What I have just read is an extract from the official report of a speech made by William Pitt in a debate in the House of Commons on Mr. Whitbread's Minimum Wage Bill as far back as 12th February, 1796. A century and a half have passed since then. With the passage of years, and with the vast changes which have taken place in our social and economic system, this problem of child dependency has become more acute than ever. I accordingly express the earnest hope that this matter will at length receive from the Government, industry, and Parliament the attention and consideration which it deserves.

12.37 p.m.

Photo of Mr Henry White Mr Henry White , Birkenhead East

The duties which fall to the Minister of Labour and those who help him are so responsible, and affect the lives of the people so seriously, that no difference of party and, indeed, no extraneous circumstances, would prevent me, or I think anybody else, from expressing the hope that the new Parliamentary Secretary will be successful in dealing with the problems which will face him in his new office. If that was the intention of the hon. Member for Norwood (Mr. Sandys) I associate myself completely with him, although I must confess that, as the words fell from his lips, I found myself in some uncertainty as to whether he had come to the House to bury Caesar or to praise him. At all events, I would not seek to probe into that matter, and perhaps the House will agree with the few sentences which I have said. My hon. and right hon. Friends on these Benches have not, on every occasion when the Minister has presented Orders based upon recommendations from the Statutory Committee, been able to accept them, but have felt obliged to oppose them or to urge other views. I think that if it were not for the limitations imposed upon us by the rules prescribing how these matters are presented to us, we might be tempted on this occasion to suggest other proposals, but we have no wish to oppose this further extension of benefits which the Minister is in the fortunate position of being able to lay before the House.

The right hon. Gentleman has been extraordinarily fortunate since he assumed his high and responsible office. Every time he has appeared before us he has been in the fortunate position of proposing some benefit for the unemployed. He has been batting on a very good wicket, and has handicapped the bowling very considerably. To-day the wicket is not quite so good, it is beginning to look a little bit worn, showing some signs of crumbling, but, whatever our differences of opinion, we can all join in congratulating ourselves on the fact that we are still engaged in the distribution of a surplus. I should be very glad indeed if I could have the assurance from any quarter of the House that next year we shall be discussing a report which is as favourable as that which we have before us to-day and shall again have some proposal presented for the benefit of the unemployed. I feel some doubt whether it would not have been right for the Committee to make their report even more conservative. It is a conservative report, and properly so. We have to remember the danger of possible attacks upon the scales of benefit and everything else if the country should go further down the slope into less prosperous times. It does not require any imagination to foresee the sort of case that might be made out, the sort of cries which would arise over people getting more money on the dole than when in work. I think it is our duty to be so sound and conservative in our recommendations as not to expose the unemployed to the risk of the attacks which would be made upon them and upon the scales and upon everything else if we should again run into an atmosphere of crisis.

Since the report was issued the situation in America has not improved, and we all know to our sorrow and regret that the international tension, which is the cause of the frustration of so much human effort, is no better, in fact, is aggravated. We can hope that this state of affairs will pass away, but in the meantime it is the duty of everyone concerned with industry and employment to carry on his business with courage and efficiency. If people will do that they will be rendering no mean service to the country. My right hon. Friend took occasion to make some criticism that people have argued that the Government, by adopting the recommendations of the Statutory Committee, have accepted the economic forecasts and foundations upon which they were made. I confess that I myself have been guilty of doing so. I remember saying at a meeting of a chamber of commerce that the Government, acting upon the best advice that was available to them, had made certain recommendations, and even now I feel that if the Government were not satisfied with the economic situation which is the basis of the report they ought not to accept the recommendations; but I let that pass.

I am glad that the Debate to-day has turned upon the question of over-insurance and the alternative of children's allowances. I do not find myself able to agree entirely with the hon. Member for Ebbw Vale (Mr. Bevan) that the Statutory Committee have gone outside their terms of reference in raising this matter. It is not the first time they have done it. They raised it last year, and so did the Unemployment Assistance Board, and in the Debate last year, in my own humble way, I pointed out that there was a very grave problem and that it did require the fullest possible investigation with a view to a solution. In paragraph 62 and those which follow in the Report it is stated that some investigation has been made into this, and whether it was within their powers or not I think the Statutory Committee have rendered an important service in bringing the matter to the front. I hope that from now on there will be a comprehensive inquiry into the whole matter, with a view to action. The situation is almost intolerable. It is shocking that the poorest people in this country, whether they are in work or out, are the people with the largest families. They have three or four children or more, and as their families increase the position becomes—well, it would be grotesque if it were not so cruel. We all know cases of the kind in our own constituencies.

I know the case of a man who is blessed with 11 children. He might be sent to work next week, but see what would happen. He is what is known as a heavy driver and he receives between £5 and £6 per week. You could send him to work to-morrow for £3 per week, but his family would starve. The result is that he still continues to draw assistance at the rate of 63s. 6d. a week, on which sum that family cannot live. The Unemployment Assistance Board cannot carry out their statutory duty of relieving all his needs, except his medical needs. That is an extreme case, but it shows the urgency of dealing with that type of problem. I hope that the Minister will be able to adjust the relationships of these proposals and to show the effect of the arrangement upon the other part of the unemployment assistance scheme. Since the second appointed day a whole series of problems has arisen, which this is not the occasion to discuss, but the line of demarcation between the two bodies is assuming an increasing importance. On the appropriate occasion I hope that the right hon. Gentleman will go into this matter in great detail, because a feeling is arising in the minds of many of us that the time has come for a fundamental change, and that the Minister should take all these matters under his own jurisdiction.

I should be glad if the Parliamentary Secretary would deal with the smaller points of what will be the effect of the rise of 1s. in the dependants' benefit, upon the unemployment assistance scheme. The hon. Member for Ebbw Vale said that recommendations which we are now considering would benefit the Treasury to the extent of £500,000 a year. I have not attempted to make any accurate balance sheet for the whole of the recommendations made by the Statutory Committee and accepted by Parliament, but there has been a tendency to go to the aid of the Treasury in this matter. I would like him to deal with the question whether it follows from the dependants' benefit that an applicant to the Unemployment Assistance Board who has no resources will automatically receive an increase upon the same scale. If that is the case it would be some offset, from an accounting point of view, to the benefit which the Treasury will get.

Speaking on the Unemployment Insurance Bill just before Christmas, I took occasion to restate the views that we on these Benches have always held in regard to the repayment of debt. I would like to associate myself with everything that was said by the hon. Member for Ebbw Vale about that transaction. We have pressed it on every proper occasion to the utmost of our ability, and we can see from the history of the matter the handicap that is placed upon the unemployed and upon the Fund as a whole. If that debt had not been settled upon the Fund, we should have been free to do something comparable with the amount of the reduction of one penny in the contribution rates, which would have been very welcome indeed. It would have helped the unemployed and industry. Certain aspects of the present proposal are highly businesslike, but it is most unbusinesslike to lend money at 2 per cent. and borrow it at 5 per cent. The present recommendations reduce the anomaly and should be welcomed, but they show how right we were to oppose the original transaction and the fact that the financial scheme of that time should have been allowed to come into operation. That is one satisfactory aspect of these proposals.

There is a further small point with which I should like the hon. Gentleman to deal. Reading through the paragraph in the report dealing with debt and the relationship between the interest which is received and the interest paid on the money borrowed, the Committee refer to their investments, and say that the investments to be sold would normally be those which bring in the highest rate of interest. That is rather a puzzling statement, made without any explanatory comment. I have been puzzling myself for an explanation of it.

Photo of Mr Aneurin Bevan Mr Aneurin Bevan , Ebbw Vale

If you ask the Treasury to raise a large sum of money in order to reduce debt, you sell your securities at the highest capital price in order to get the largest sum.

Photo of Mr Henry White Mr Henry White , Birkenhead East

In a matter of that kind I should think that the amount of the interest to be brought in would be the chief consideration. I have been much puzzled about this matter. Possibly other hon. Members have been, too, and we should be glad to know what the explanation is. Has the Statutory Committee gone outside the scope of its proper duties in raising the question of dependency and over-insurance? It seems rather to contradict its statement that these matters are for Parliament and for public policy when they come up for final recommendation. All the members of the committee are capable men under a very able chairman, and it is evident they feel that there is a very grave problem which ought to be tackled without delay. Not for the first time in this House I appeal for an inquiry to be put in hand and carried through to a conclusion. We labour under some difficulty, which is likely to grow rather than to diminish, from the fact that we have not a statutory committee dealing with the social service as a whole.

It is a very great advantage to have these reports. If we get them with ample time for consideration, it is a wholly desirable development in our legislation, as long as Parliament does not allow to pass away its duty of scrutiny and criticism, and is prepared to reject a recommendation if it thinks fit. It is, however, dealing with the matter more or less in a departmental way. The whole economic muddle in which we are enforces the case for a general staff to review the whole of the social services and to see that they are developed in an orderly way so as to give the maximum benefit to the community. We are glad to see that, in considering this report, we are still considering the best means of disposing of a surplus, and I hope that, when we meet again next year for a similar discussion, we shall find the position not less favourable than it is to-day.

12.56 p.m.

Photo of Mr Roland Robinson Mr Roland Robinson , Blackpool

It is an eloquent testimony to the general improvement of conditions in this country that year by year the Unemployment Fund can present rising surpluses, as has been the case in the last three or four years. This year the surplus is such that the Government are able to make arrangements to pay off £20,000,000 of debt, and at the same time to increase adult dependants' benefits by 1s., and to increase the number of additional days. I do not wish to deal with the general question, but to raise a number of specific questions with which I hope the Parliamentary Secretary will deal in his reply.

In particular, I should like to support the view of the hon. Member for East Birkenhead (Mr. White) on the question of the securities sold in order to provide the £20,000,000 for the repayment of debt. Like the hon. Member, I cannot understand why it is considered necessary to sell the securities with the high yield, because that must affect the general income of the Fund. The hon. Member for Ebbw Vale (Mr. Bevan) suggests that the reason may be that a higher price would be obtained for them, but in my experience I find that it is not always the security with the highest yield that fetches the highest price; there are other questions, such as marketability and so on, and it might easily be better to sell some securities with a smaller yield.

In these Debates in previous years I have expressed my opinion that, if our unemployment insurance scheme is to be fully satisfactory, it must cover as wide a number of the insured unemployed population as possible. I am very pleased to know that this year the percentage of insured unemployed receiving benefit is as high as 54.8, the highest percentage since 1931. While, however, I am pleased that it is so high, I want to say at the outset that I do not feel that the percentage is high enough. The Statutory Committee points out with some pride, as a dominant fact, that about half the insured persons registered as unemployed are in benefit. While in a way I feel that a certain amount of satisfaction may be derived from that statement, I should be inclined to say rather that the dominant fact is that something like half the number of insured unemployed cannot claim benefit, and I do not like a system under which the unemployment insurance scheme does not cover as many of the unemployed as it can; I feel that we should stretch it out, if possible, until practically all are covered. That will save these men from having to undergo the means test, as they do at the present time.

I think it is wrong that it should ever be suggested that there should be reductions in contributions so long as the unemployed themselves are not fully covered, or, indeed, so long as they are not receiving sufficient benefit to maintain themselves at the standard at which we want them to be maintained. The House may remember that some two years ago I opposed most strongly the suggestion that 1d. should be taken off the rate of contribution, and I oppose the suggestion made in the present minority report that we might consider taking off something from the contribution, while insufficient is paid out. Like the hon. Member for Ebbw Vale, I am most uneasy about the suggestion that, in the case of the agricultural scheme, ½d. should be taken off the contribution. The benefit rates under that scheme are none too large, and the conditions of the past year have proved that the agricultural worker can pay his 4½d. I think, therefore, that the payment should be continued in order that others may have better benefit.

I want now to pass to a question which I have raised in the House on many occasions, the question of the seasonal worker. It is my intention to come back to the House time and again until that injustice is met. Admittedly, some three years ago, an improvement in the situation was made, for which everyone is very grateful, but it has only gone half-way. In seaside resorts all over the country this problem of the seasonal worker is one of the burning questions of the hour. It is not a matter of politics, or of the views of one party or another; in all these resorts all the people who have studied this question find it impossible to understand why a fuller measure of benefit is not given to the seasonal worker. The workers themselves cannot understand it. Resolutions have been passed on this subject time and again by local authorities. Last year a concerted move was made, and the Minister of Labour received a resolution which was started by the council of Bridlington, and supported by numerous other local authorities, urging that the seasonal worker should be more fully covered by unemployment insurance.

I myself have raised the question in the House of Commons on many occasions and at the end of December the Minister of Labour promised me that this special point should be submitted to the Statutory Committee, so that he could have their views on the subject. It was on 23rd December that he gave me that promise. On 1st February I put a question to him in the House, and his reply was that the matter had been submitted to the Statutory Committee. I have read the report of the Statutory Committee twice, and I cannot see in it a single reference to seasonal workers. It seems a little difficult to understand what Members of the House of Commons are to do about this matter. We can put questions to the Minister of Labour about it, and his invariable answer is that the matter depends entirely on the views of the Statutory Committee, and we can only accept or reject what they have said. I cannot see why, when, as in this case, a matter is specially submitted to the Statutory Committee by the Minister, the Statutory Committee should be allowed to pass the matter over without even giving their views for or against action, and I would ask the Parliamentary Secretary in his reply to deal specially with that point, because there is a very real grievance.

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

Mr. Robinson:

I think it is perhaps a little unfortunate that, on the occasion of a Debate of this importance, there should be so small an attendance in the House that a count is called—I notice that the lack of attendance is on all sides.

Photo of Mr George Buchanan Mr George Buchanan , Glasgow Gorbals

I thought the hon. Member's speech was worthy of a greater attendance.

Photo of Mr Roland Robinson Mr Roland Robinson , Blackpool

During this year the employment committee in Blackpool, which is faced with this very important problem, passed a resolution dealing with the subject, and asked that it should be circulated to the other employment committees in the country. I regret to say that the Minister of Labour refused to circulate that resolution, and the other committees were not enabled in that way to discuss with our committee in Blackpool this very important problem. I believe that if a resolution such as this could be circulated, the Statutory Committee would find that there is a much greater volume of support for an improve- ment in the conditions of seasonal workers than they had thought. Another matter of a similar kind is the position of the disabled ex-service man. The whole country has from time to time recognised that the disabled ex-service man needs some special treatment; so the rule was laid down, as a general principle, that in the case of a disabled ex-service man, if he has 10 stamps in one year on his card he is able to qualify for unemployment benefit. But in the seaside resorts that is not being fully carried out.

Photo of Mr Robert Bourne Mr Robert Bourne , Oxford

As I understand the hon. Member's argument, this is a point which ought to come up on the Ministry of Labour Estimates.

Photo of Mr George Buchanan Mr George Buchanan , Glasgow Gorbals

I think that the hon. Member is urging that the Statutory Committee should consider this matter along with the matter of the seasonal workers. His complaint is that they have not considered this, although it has been brought up.

Photo of Mr Robert Bourne Mr Robert Bourne , Oxford

If it is a matter for the Statutory Committee, it is in order. I understand that the hon. Member is making the complaint that a regulation of the Ministry of Labour has not been carried out.

Photo of Mr Roland Robinson Mr Roland Robinson , Blackpool

I am suggesting that this is a matter on which we ought to have a recommendation from the Statutory Committee. The position in the seaside resorts is that if a. disabled ex-service man lives in a resort where he can get work only in the summer, even though he has 10 stamps on his card, he is classed as a seasonal worker, rather than as a disabled ex-service man. I think that in matters such as this, the Statutory Committee ought to be more conscious of human values and have rather warmer feelings. Such a man deserves our sympathy, perhaps, above all, and I would be grateful if the Parliamentary Secretary would deal with that one point. We ought to see that the regulation in regard to disabled ex-service men is not overruled by the regulation in regard to seasonal workers.

A small point which is referred to in the Statutory Committee's report is what is called mixed employment. I would refer to the case of a man who lives in an industrial town and generally is an in- dustrial worker. It may be that, having been out of work for some little time, he gets a job, say, on a golf course as a green keeper, perhaps, for a few months. Then, when he falls out of work again, he finds that he is classified, not as an industrial worker, but as an agricultural worker, and that he gets less benefit than he was previously entitled to. The Statutory Committee should have recommended, in regard to this mixed employment, that there should be a fixed period before a man is considered to have changed his occupation from industry to agriculture, because it is creating unfair hardship to make these people worse off because they have done the decent thing in taking a small job for a time.

In so far as the agricultural scheme has improved benefits, and has reduced the waiting period, I am wholeheartedly in favour of it, but I cannot view with satisfaction the proposal to reduce contributions. The general expenditure under the agricultural scheme is £700,000 a year. Out of that, £455,000 goes in benefits, and the cost of administration amounts to £245,000. In order to pay an average weekly benefit of £9,000, the administrative expenses are as high as £5,000.

Photo of Mr Robert Bourne Mr Robert Bourne , Oxford

I think the hon. Member must raise that point on the Ministry's Estimates.

Photo of Mr Roland Robinson Mr Roland Robinson , Blackpool

In so far as this is dealt with and explained in the Statutory Committee's report, surely I am entitled to call attention to it. If I do not raise it now, the Minister can say that no complaint was made when this very matter was discussed.

Photo of Mr Robert Bourne Mr Robert Bourne , Oxford

I think not; because that is not a matter which the Statutory Committee's report mentions. The question of whether the costs of administration are too high is one which must be raised on the Ministry's Estimates.

Photo of Mr Roland Robinson Mr Roland Robinson , Blackpool

I accept your ruling, Mr. Deputy-Speaker, and I hope that I shall have an opportunity of raising the matter later, because it is a matter of the greatest importance. I hope the Parliamentary Secretary will look into the matters which I have raised. He is newly appointed to his position, and he will be doing a great service if he can deal successfully with the large number of anomalies which are creeping up under the scheme.

1.14 p.m.

Photo of Mr George Buchanan Mr George Buchanan , Glasgow Gorbals

I think all parties are pretty well alike to-day in the fact that our Members are not in attendance. This subject is not very exciting, and, after the excitement of recent times, it is almost asking too much to expect Members to turn up for such a humdrum subject. Another thing we are all alike in is in our general attitude to the subject. The two Conservative Members who have spoken have both taken a very enlightened view of that subject. The hon. Member for Norwood (Mr. Sandys) pleaded very seriously for an increase in the children's allowances. That is a plea which will be welcomed by Members on this side. The hon. Member for Blackpool (Mr. R. Robinson) raised the question of bringing into the scope of insurance a greater number. He also raised the question of the seasonal worker. I am glad he did so, because it shows that, even among Conservative Members in this House, it is becoming more and more apparent that they are taking a more enlightened view of the treatment of the workers.

The hon. Member for Norwood, and the hon. Member for East Birkenhead (Mr. White) offered words of congratulation to the Parliamentary Secretary. I hope that I shall not be accused of being ungenerous even to my opponents, but I must say, in common fairness, that I cannot join with them in their action sincerely. Quite frankly, I look upon the appointment of the Parliamentary Secretary as one which causes me grave concern. Here we have a Department that needs human understanding, and one which is charged with looking after large numbers of practically defenceless children who are in need of help and succour. I say frankly—because I think that sometimes we are inclined to get mealy-mouthed in this House—that a man who has defended such an outrageous thing as the bombing in Spain is not a man to whom I look with great confidence to show kindness to children in this country.

To-day we are discussing the report of the Statutory Committee, and if I were to criticise the hon. Member for Ebbw Vale (Mr. Bevan), I would say that he has practically covered everything and has left me with little to cover. I agree with him as far as his criticisms in that connection were concerned, but I join issue with the hon. Member for East Birkenhead, although he and I are in agreement on most subjects. He offered almost fulsome praise of the Committee. I cannot see their great value. Look at their report. Half a dozen servants of the Ministry of Labour, without all this padding and get-up, could give us the same sort of thing. What are they giving us? What have they told us? They have told us hardly anything that the ordinary student of unemployment has not know for years. We are told that they are to be congratulated upon giving so much of their time, but what about the officials of the Ministry of Labour, all capable men? There is one man who is retiring about whom I would like to say a word in passing. I often say hard things, and I think that, when kindness is due, I ought to say kind things. The Assistant Permanent Secretary to the Ministry of Labour, Mr. Price, is about to retire, and if ever a man deserved well of the common people it is he. He is the man, who, in the days when the "Daily Mail" and other newspapers had flaming headlines about the unemployed robbing the Fund, went right into that matter, and, by facts, logic and proof, ended once and for all the calumny heaped upon the unemployed. I hope that Mr. Price, because of his service to the poor will, in the days of his retirement, enjoy much happiness.

I was saying that there is nothing in the report but what all of us know. Take this learned reference to wages, one might almost think, from the way the Minister spoke, that the committee were entitled to extraordinary praise for what they have told us. They have told us what everybody knows, namely, that some unemployed men receive a little more than certain other men receive in wages. Who does not know that? This document has been printed in order to tell us. Why? What else have they told us? They have told us something about the Fund. Who did not know that it was £103,000,000 in debt? Who does not know that they have paid back £20,000,000? We all know it but they have taken up part of the report in order to tell us that. Who does not know that it is now down to £83,000,000? Why should it be necessary for Sir William Beveridge, Professor of Economics, to tell us that? Every schoolboy knows it. I should have thought that the professor would have given us even better English than that which we have here. Good gracious, look at it. We are told nothing but what any ordinary human being knows. If you walk into any employment exchange and meet the manager—the standard of managers in recent years has improved—he will tell you far more than this, and he will tell it far more intelligently. But we have to send for some professor, who nowadays seems to be at the head of everything, to tell us all this. He raises issues about wages and about fundamental social policy. I am not going to go into them to-day because this is neither the place nor the time to do it.

We are the House of Commons, but in these days when we see the appointment of such a Parliamentary Secretary we are inclined to think that we are not the House of Commons. Still, I hope that we are. Even when committees are presided over by Sir William Beveridge, they should pay us the compliment, at least, of telling us where they get their data and facts. They tell us that the Ministry of Labour is conducting an investigation and that certain people receive such-and-such wages. What was the kind of investigation? Who are the people? Where are they? What kind of occupation do they follow? I see sandwich men, poor devils, walking along the street, carrying boards telling you where you can get a shave, who receive not more than 30s. a week. There are other men in miserable jobs. These instances are used to show that they are hard-working men, and they are used in this report to depress the standard of the unemployed. If such a man does not take these miserable jobs he is described as lazy, and yet when he takes these jobs he is used as deadly evidence against the unemployed. What a state we are in.

To-day the hon. Member for Ebbw Vale has been criticised because he said that we could not divide against this report. Of course, we cannot. We cannot do it because we should be dividing against the giving of these increases to the unemployed. The House of Commons has got to the stage that Sir William Beveridge and one or two other people can tell it what the unemployed should get. The hon. Gentleman the Member for Blackpool knows more about seasonal workers than any of these people. Since he came into this House he has devoted himself to their interests. Great credit is due to a man of comparative comfort who devotes himself to the interests of such a very defenceless section of the unemployed as the seasonal workers. He knows what ought to be done for them. Sir William Beveridge knows less about the seasonal workers than does the hon. Member, and yet he is to decide what is to be done.

We are getting into an intolerable position, and as self-respecting Members of Parliament we ought to make a protest. We have lectures about democracy. What sort of democracy is this to which we are subjected in our relation to this report? Democracy, surely, comes in more on this question than on many others. The present unemployment figures are 1,800,000 About 900,000 are on standard benefit. That turns over four times at least in the year and represents more than 3,500,000 recipients. Taking the wives and the families there is at least a population of 7,000,000 concerned, and yet the House of Commons cannot determine the amount on which those 7,000,000 human beings have to live. Sir William Beveridge can, but we cannot. I cannot move that there should be an allowance of 3s. 6d. or 4s. for a child. No, that would be democracy. If this sort of thing happened in connection with Income Tax or Super-tax there would be "hell to pay" in this House. It would not be tolerated. It is done only because we are dealing with the weakest section of the community. The amount for children ought to be increased.

I want to make an appeal for an equally defenceless section of the population. The Trades Union Congress have made certain recommendations in the order of priority. They recommend, first, the abolition of the waiting period, secondly, an increase in the benefit for women and, thirdly, a decrease in the amount of contribution. I think the third recommendation is reactionary, but with the other two I am in full accord. It is in regard to the second recommendation that I want to make my plea. In these days I cannot understand how a human being can be expected to exist on 15s. Recently, I had some conversation with a very capable woman who runs the Scottish Board of Health, and we had a very interesting talk on how a woman manages to live on 15s. a week. We hear terrible stories about the treatment of poor people abroad, but it is well occasionally to see how our own poor people are treated. Let us see how a woman manages on 15s.

I recently attended a conference in Southport, a very pleasant town. It was the end of the season and the women, the girls, were being paid off. I thought that conditions in my own division were bad, but I think the condition of these girls was worse. They were girls with good records of employment and were entitled to 15s. benefit. Out of the 15s. the least that any of them was paying for a room was 6s. For boot repairs, not new boots, and certain articles of clothing they had to find 1s. and another 1s. had to be found for travelling fares and insurance. When they had met other charges they had only 6s. left; less than 1s. a day on which to live. Think of what that means for a growing woman. She needs three meals a day. Can it be done? It may be said that I am sentimental. I am not; I am trying to reduce life to a businesslike proposition. How are such people to live and remain respectable?

There are two improvements that I have noticed in our social life. The first is the greater care of the working people for their children. When I was a boy at school there was a gool deal of religious feeling in my district. I was a Protestant. I used to feel very sorry for some of the children of the other religious faith who went to school, in bitter cold weather, with bare feet. That sort of thing has gone. The other improvement that I have noticed is the cleanliness, tidiness and morality of the women folk. If we want these young women recipients of unemployment benefit to keep moral and clean—looking at it from the pure business point of view and leaving out sentiment—how can we expect them to do it on 15s. a week? This Statutory report, this wonderful document that hon. Members have praised, does not mention that subject. The hon. Member for the English Universities (Miss Rathbone) seemed annoyed when the hon. Member for Ebbw Vale mentioned it. Perhaps she was feeling sympathy for her fellow trade unionist, Sir William Beveridge. Where is there a mention in this report, this wonderful document, of the human problems to which I referred? The Trades Union Congress, with all its faults, represents 5,000,000 organised industrial workers. Surely a body like that is entitled to at least a paragraph in the report. Such a body are entitled to say that the recommendations of the Committee have something wrong about them.

The Committee do not mention the seasonal worker. I should like to say a few words on that subject. We denounce the means test. The means test is a punishment of means, but the seasonal worker is punished in regard to occupation. We may have some control of our means, but very few have control of their occupation. Therefore, I maintain that something should be done for the seasonal workers. One point was referred to by the hon. Member for East Birkenhead to which I should like to refer. When we were discussing the Unemployment Regulations the Minister made great play of the fact that although the regulations provided that the amount would be 24s. it meant that no person would get less, if they had dependants, than the standard benefit rate. Since then nobody with dependants has benefited from unemployment assistance at less than 26s. per week. From the statement of the Minister I thought the matter would be put right automatically but when I spoke to him I found that that was not quite the position. What was meant was the benefit rate then in existence; not the benefit rate which exists now. When we spoke of the benefit rate we did not think it was a rate which was variable, but a constant benefit rate.

I am not going to discuss the position of agricultural workers but I think it is a mistake for hon. Members above the Gangway to think that employment insurance can be run under two schemes. With modern means of transport, motor cars, you find in every hamlet the children of agricultural workers travelling to school two or three miles in order to get a better education, and yet when the father is unemployed he is to get a less benefit rate. The position is ridiculous and indefensible, and one of the things I want to say is that before there is any proposal to reduce contributions there should at least be an abolition of the 30s. maximum. A farmer and his wife and three or four children get only 30s. a week. And this Statutory Committee, which is the last word in wisdom on this subject, which is supposed to guide us on these matters, comes along and says it is to be 30s. still. There is not a farm worker in this country even with the miserable wage they get who would not gladly continue to pay the half-penny if it would have raised his standard benefit. This is the report we get. And Parliament has sunk to such a low level that we cannot move any Amendment.

I should like to have moved an Amendment to widen the term "dependant." Why should not a man who has lost his wife and employs a housekeeper to look after his home and children be paid for his housekeeper in the same way as for his wife? Why should not a bachelor brother who has a sister living with him get a dependant's allowance for his sister? Why should not the whole range of dependants benefit be extended? On all these matters this report is strangely silent. These are human issues, but the time of this Committee is taken up with examining wages with some preconceived idea that wages should be attacked or that the standard benefit should be attacked. I regret that we cannot divide against it this afternoon. I wish the matter had been raised in a form so that we could have had a division, because I think when the country understands the position this will be an addition to the already formidable indictment against this Government in regard to unemployment insurance, which will one day help to sweep them into the oblivion into which I think they should go.

1.41 p.m.

Photo of Captain James Duncan Captain James Duncan , Kensington North

I generally read three newspapers each morning and one of them is the "Daily Herald." In the middle of the "Daily Herald" there is always a paragraph headed "Get busy Mr. Brown." I am delighted to be able to congratulate the Minister on getting busy this morning, and also delighted that the wheels of industry are busy. It is only because industry is busy that we have a surplus to deal with. What a different picture to that of 1931, when instead of dealing with a surplus hon. Members opposite who were then in office were turning and twisting as to how they would deal with an ever mounting debt. I entirely agree with the way in which the surplus has been dealt with—reduction of debt, an increase of benefits to dependants of 1s. a week, and an extension of benefits for those with good insurance records. I am glad that the Minister has not accepted the report of the minority of the committee. It would have been a great mistake to have adopted that recommendation at this time of comparative prosperity. Industry, both employed and employers, can afford the extra contribution, and it is only in a time of depression that employers and employed really need a reduction in contributions. To suggest, as the minority did, that we should reduce contributions at this time seems to me to be entirely wrong.

The hon. Member for Ebbw Vale (Mr. Bevan) dealt with the point that Parliament has no right to amend these Orders. Quite apart from the fact that Parliament has a right to oppose or reject them if it thinks fit, I feel that in this complicated modern world, there is an advantage in devolving such things as Parliament can rightly devolve on committees with power to make recommendations to Parliament. I think there is a great advantage in developing some form of devolution, because Parliament is overburdened with legislation and administration already. Time after time hon. Members on all sides of the House have asked for a new legislation on one thing or another, and the Government have had to answer that there was no time for it. If more time were taken up in moving Amendments in connection with this matter, it would mean that less legislation would be passed than at present, and certainly not more, as many hon. Members want.

My hon. Friend the Member for Norwood (Mr. Sandys) referred to the question of whether there should be an increase in children's allowances instead of an increase in the allowances for adult dependants. I would point out to him that in paragraph 41 of the Report another point of view is expressed. I do not say whether I agree with it or not, but refer to it only to show that there is another point of view. In that paragraph, the Parliamentary Committee of the Co-operative Congress deprecates any lowering of the contributions and favours an increase of benefits, giving first place to the rates for adult men, on the ground that families have already been helped by the raising of the benefits for children. I refer to that only to show that there is an opinion in certain quarters that adults should have their turn this year, because the children have had their turn in the past.

Photo of Mr George Buchanan Mr George Buchanan , Glasgow Gorbals

The adults are not being given an increase; it is being given to the dependants of adults—a totally different thing.

Photo of Captain James Duncan Captain James Duncan , Kensington North

I agree, but the Parliamentary Committee of the Co-operative Congress gave first place to the rate for adult men. In this case, it is a question of adult dependants.

Photo of Mr George Buchanan Mr George Buchanan , Glasgow Gorbals

The Co-operative Congress, in their reference to adult men, included women as well.

Photo of Captain James Duncan Captain James Duncan , Kensington North

They said that nothing more should be given to the children. The main reason I have risen is to ask for an inquiry into a particular point by the Statutory Committee next year. The point has already been raised on one or two occasions. It was the first recommendation of the Trades Union Congress General Council, and it deals with the abolition of the waiting period. I agree that there are reasons for not altogether abolishing the waiting time, and that in most cases there is really no definite hardship, particularly if the man concerned has had a full working week before.

Photo of Mr George Tomlinson Mr George Tomlinson , Farnworth

And particularly if he is well off.

Photo of Captain James Duncan Captain James Duncan , Kensington North

The cases to which I wish specially to draw attention are those of casual workers. I have in mind the case of one man, whose name I have already conveyed to my right hon. Friend. The man is a furniture remover, and his weekend ends on a Wednesday. He was out of work, but he happened to get one day's work on a Monday. He went to the exchange on the Wednesday, hoping to get benefit for part of the week, but he was told that he could not, because there was a three days' waiting period. He was told that there were two days' money waiting for him, but that he could not get it until the Friday week. He did not have any more work until that Friday, ten days afterwards, when he got another day's work, and could not go to get his benefit. Actually, what happened was that his wife went to the exchange and she was given the money, although I do not know whether they were within the legal limits in paying it. However, for nine days that man was without anything.

It would not have mattered if he had had a full week's work before, because then he would have had something with which to pay the rent, but he had had only one day's work in that week, and because it happened to have been on a Monday, he could not get any benefit until nine or ten days afterwards. The curious thing is that if he had worked on the Friday or the Saturday, he would have got the benefit, because the three days' waiting period would have been fulfilled. I am informed that that is a very common case, not only among furniture removers but among many other casual workers in London and in other parts of the country. I think that the whole question of the waiting period in the case of casual workers should be the subject of a special inquiry by the Statutory Committee next year, in order to see whether they cannot make some recommendation on the subject. On this occasion, I have great pleasure in supporting the proposals which my right hon. Friend has made.

1.51 p.m.

Photo of Mr George Tomlinson Mr George Tomlinson , Farnworth

In commenting on the Report, I should like to call attention to the fact that the Minister suggested that the acceptance of the Committee's recommendation by the Government did not of necessity mean the acceptance of the arguments and reasoning contained in the Committee's report. I suggest, however, that, bearing in mind the fact that, as the Minister pointed out, the Government were free either to accept the recommendations or to make other recommendations, the acceptance of those recommendations leaves the House no alternative except to assume that the Government are in agreement with the arguments stated in the report. The hon. Member for Norwood (Mr. Sandys) suggested that there was confusion in the mind of one of my hon. Friends because of an argument which my hon. Friend used with regard to the decision of the Committee concerning children's allowances. Yet, the hon. Member for Norwood complimented the Minister, who accepts the findings of the Committee, although he is free to present an alternative, and sought to justify the conclusion of the Committee to sacrifice the needs of the children to the sanctity of a wage system which does not meet family needs.

I have been interested to hear the discussion on family allowances and their relation to this report. I feel rather the same as the hon. Member for Gorbals (Mr. Buchanan) about this report. Wages have never had any relation to children at any time. Never in the history of the industrial system have they been related to children. I come from a family in which there were seven children, and my father's wage never varied as a piece-rate of 25s. to 28s. during the whole of the time we were children. As a trade union secretary, if I go to see an employer of labour and point out the injustice under which an individual is suffering because of the wage he is receiving, and if I refer to the man's family, the employer immediately says. "The family is no responsibility of mine." The employer pays the man his wage—

Photo of Mr Robert Bourne Mr Robert Bourne , Oxford

The hon. Member may not enter into a discussion of that on this particular Motion.

Photo of Mr George Tomlinson Mr George Tomlinson , Farnworth

I bow to your Ruling, Sir, I was working round to the point that the individual is in the position in which his responsibility as a parent and his responsibility as an insured person come into conflict. I want to stress the point which was made to some extent by the hon. Member for North Kensington (Mr. Duncan). I strongly oppose the recommendation of the Committee that the waiting period of three days should not be abolished. I cannot understand why it was ever introduced into an insurance scheme. The hon. Member who spoke last said he believed in the principle of the waiting days but did not give us any reason for that belief. The Committee suggest that they have not accepted the principle of the abolition of the waiting days on the ground that: Extension of the period of benefit by more additional days appears to us preferable to any further change in the waiting time, which was reduced last year from six days to three days. Money given at the beginning of a period of unemployment is not as valuable socially as money given at the end when other resources have become exhausted. I wish to put before the House the case of thousands of people in the country who are never in the position which that paragraph envisages—who can never afford to wait three days before they receive benefit. The argument with which the Committee seek to bolster up their decision has no basis in logic or in fact. My hon. Friend the Member for Gorbals made one mistake. The Trades Union Congress is mentioned in the report. It is mentioned in one line: Though we were pressed by the Trades Union Congress General Council to abolish the waiting time altogether, it is right to observe that a waiting period of three days at least is a common condition among trade unions in their systems of benefit. I challenge that statement. It is not a common condition among trade unions. Further, I suggest to the Committee that when they are making comparisons they ought to compare like with like. A trade union is not an insurance organisation. It is true that benefits are paid occasionally in respect of stoppages of work, but the function of the trade union is not insurance. I wish to put before the House the principle that when a person insures against a certain contingency, the benefits should begin when the contingency arises. Unemployment insurance is the premium paid by the worker and the employer against the contingency of the individual going out of work. My contention is that the contingency arises on the first day of unemployment and not on the fourth day. The assumption made here is that it does not arise until the fourth day. That does not apply to any other form of insurance of which I know, except sickness insurance under the National Health Insurance Act, and I suggest that the only reason for this departure from the ordinary principle of insurance is that in this case it applies to the working class.

When insurance is made against other kinds of contingencies the amount of the insurance is paid as soon as the contingency arises. Before coming to this House I read a Debate in which I was keenly interested and in which a right hon. Gentleman spoke about insuring against the possibility of not coming back to Parliament. In that case the insurer would have been paid when the contingency arose, that is, when he lost his seat in Parliament. I understand that the premium was paid, and I am also given to understand that the benefits have been paid. In the circumstances, I would commend that form of insurance to many hon. Members who were here yesterday but are not here to-day. Again, if an hon. Member insures against fire in his business or in his home when does he receive payment? If he has made the right kind of arrangement, he will be paid when the fire occurs, without many questions. The insurance company does not wait until he has had had three fires before they pay him. If he insures against the breakage of a plate-glass window the company does not wait until the window has been broken three times before they make payment. But here, dealing with the workers, we go on the principle that unemployment does not arise until a man has been three days out of work.

I put it to the Minister very seriously that a great hardship is involved. I could quote, not the case of an individual furniture remover, but the cases of a score of cotton operators in a little village. They are supposed to be engaged in a regular occupation and their week finishes on Wednesday. They will probably receive payment for three days' work to-day. They have been signing on during the week at the employment exchange, and they will not receive anything for the first three days of this week until next Friday. They are not people who can afford to wait for that period. The other day we had a discussion about unemployment generally and I wanted to raise also the question of under-employment which is definitely linked up with the principle of the waiting period, and also with the wage level. The Statutory Committee suggests that if an increase were made in the benefit in a given direction the proportion of people who would be entitled to receive benefit, and whose benefit would then be higher than their wage rate, would increase by 20 or 25 per cent. If the Lancashire cotton industry continues to decline at the present rate and if the conditions of the last three months persist, the figure will be a great deal more. The majority of the people in the weaving industry in Lancashire to-day—a body of from 90,000 to 100,000 adults—will be on a wage less than unemployment statutory benefit. Not in one case, but in thousands of cases during the past week has that been so.

Is it to be suggested that these people should be penalised both at the beginning and at the end of the period? That is what is taking place under present conditions. There is the anomaly which arises in the case of the adult female worker in the cotton industry who escapes for a time from that industry. Owing to the conditions outlined by the hon. Member for Blackpool (Mr. Robinson), many workers in the cotton industry in the summer months, when there is no work available for them in the industry, take a seasonal occupation. They then put themselves into this position. Having worked short time in the industry and then having worked full time throughout the summer at a seasonal occupation and obtained 27 or 28 stamps for a continuous working period, such workers are unable to draw any benefit at all, because they are regarded as seasonal workers. The short-time working in the industry in which they are normally engaged does not qualify them for benefit under the Regulations. The decision is taken that they have got to go to the Unemployment Assistance Board after working the 25, 26 and 27 weeks.

The same thing applies to the men who seek to escape from the factory, in this instance, into the countryside. They automatically become agricultural labourers by accepting a few days' work on a farm, and the position is not exactly as the hon. Member for Blackpool pointed out, but is worse, because the individual, having been working in a mill and then having accepted work as an agricultural labourer, is transferred from one scheme to the other, he must of necessity have more than 20 stamps as an agricultural worker before he can draw unemployment pay in that connection, so that he is penalised at both ends. The tragedy of the situation among us at the present time—and it is not something in the future when a slump might develop, but it is something which is present with us now—is that the people who are working are worse off than the people who are altogether unemployed. Unless some attempt is made to deal with this question from the standpoint of the Ministry of Labour, in conjunction, it may be, with the Ministry of Health, you are deliberately putting a premium, not on idleness, but on inefficiency, in that the individual who wishes to work is penalised because he receives not only less than he should, but less than he would receive if he was not working at all.

2.7 p.m.

Miss Rathbone:

Like other speakers in this Debate, I have no desire to oppose the draft Regulations, but I wish to point out some anomalies in them. I think it was the hon. Member for Gorbals (Mr. Buchanan) who pointed out the failure of the Regulations to do anything to improve the rate of benefit to single women. That is a grievance which has been pointed out over and over again and no one who knows the facts can dispute what the hon. Member said as to the inadequacy of the amount for a working woman, who has to live in respectable lodgings, which very often she finds it harder to obtain that does a man and who has to pay more for her clothing also. The Trades Union Congress did make a recommendation on this point to the effect that the amounts of women's contributions and men's contributions and benefits should equalise. The report pays almost no attention to that; indeed I do not think it discusses it at all. But it would have been better if the Trades Union Congress had pressed that recommendation more strongly and had made it rather earlier. Two or three years ago, the last time there was a surplus to distribute, it is well known that it would have cost very little and would have been a very easy alteration to make. Mrs. Stocks, one of the members of the Statutory Insurance Committee, put forward a minority report at that time, but there was very little support for the proposal from the Trades Union Congress then. Now they put it forward, but only among a number of other recommendations, and when they were asked to which of their recommendations they wished to give priority, they selected the abolition or the shortening of the waiting period and the allowance for children, two recommendations excellent in themselves, but having no particular relation to the women contributors. Therefore, I do not feel quite as grateful to the Trades Union Congress for their rather academic proposal as I might otherwise have done.

The recommendation of an increased benefit for adult dependants is excellent, but I must point out that it increases the injustice of the whole system in regard to women contributors. As it is now, it is notorious that women contributors pay far more in contributions than their benefits are actually worth if those contributions were pooled separately. The defence is that the contributions are not pooled separately, but that men and women are parts of a community and that women contributors are helping to pay for the wives and children of men contributors. I think most women would have no objection to that if the Government would stop playing the game of "Heads I win, tails you lose" with the women contributors. In every form of national insurance where women's claims are heavier, they are pooled separately, and they pay almost the full burden of their heavier weight of claims.

Photo of Mr Herbert Williams Mr Herbert Williams , Croydon South

Would the hon. Lady suggest that that was equally true of old age pensions?

Miss Rathbone:

Yes. If you take the women contributors and the men contributors, of the women who actually contribute towards old age pensions under National Health Insurance the great majority never get any benefit at all, because they go out of insurance long before they become eligible.

Photo of Mr Herbert Williams Mr Herbert Williams , Croydon South

Is the hon. Lady not aware that, for a variety of reasons, there are about twice as many ladies drawing old age pensions as there are gentlemen?

Miss Rathbone:

That does not prove the case, as a great many of them are drawing old age pensions under a non-contributory scheme, but although I would like to go into a discussion on old age pensions, I do not think it would be in order on the present occasion. I merely wanted to show that women are not getting a fair deal, but are helping to build up a fund out of which men benefit, and that this anomaly is being intensified by giving larger allowances to adult dependants, because there are very few adult dependants belonging to women contributors. The vast majority are wives, and very few husbands are economically dependent on their wives in the sense recognised by the Act. Vast numbers of women workers are partly or wholly responsible for aged parents, because so often the burden falls on the daughter rather than on the son, the latter having a family to keep, but these women will not get any benefit for their parents under this draft Order.

The second anomaly that I want to point out is that again although an increased benefit for adult dependants is excellent, it benefits those whose hardship is considerably less, taking the arithmetical figures, than that of the hardship of those with children. Several hon. Members have called attention to the failure of the Statutory Committee to recommend an increased allowance for children. Those of us who put forward figures showing the actual working out of the scale of allowances in comparison with family needs know that the allowance as it is just barely covers the minimum primary needs of a man and wife without children, but for those with families there is a deficiency which grows from 1s. or so in the case of the couple with one child to over 13s. in the case of those with five children, and upwards as the number of children increases. The sharpest edge of poverty, as every sociological inquiry during many years past has shown, falls on the family with dependent children, and for that family these proposals do nothing.

The report of the Committee has quite clearly stated the reasons. It does not pretend to claim that the allowances for children are enough, but the Committee decline to recommend an increase for two reasons: first, because it would cost too much, and, secondly, because it would immensely increase the proportion of beneficiaries who draw more when unemployed than when employed. I have been criticised by the hon. Member for Gorbals because I sprang to my feet when one of his colleagues criticised the Committee by saying that they had no right to take any notice of the anomaly of the lack of co-ordination between the wage system and the insurance system. Perhaps university Members are specially bound to be fair, and I could not help feeling that that particular criticism of the hon. Member was not quite fair to the Statutory Committee. Every one of us who has made a serious study of this problem—there is no subject to which I have given more time in the past 20 years—is up against this anomaly.

I happen to be chairman of the Children's Minimum Council and also of the Family Endowment Society. As chairman of the former I sponsored a memorandum which pointed out the grave need for an increase in children's allowance and the terrible deficiency in the allowances as they now are. As chairman of the Family Endowment Society I sponsored another memorandum which pointed out that if what we desired was granted it would increase the disparity between benefit and wage levels, and would increase the number of those who would be drawing more when unemployed than when employed. It is an anomaly which arises out of the nature of things. But I wish nevertheless that the Committee had recommended the increase, because children's needs are more important than the slight increase which would have resulted in the number of those whose allowances would exceed their wages when they were employed.

The body that I think deserves severe criticism is the Ministry of Labour itself. Some hon. Members who have spoken do not seem to have realised the valuable service that the Statutory Committee has performed in drawing attention as plainly as was possible within their terms of reference, to a defect, not in the wage system but in the social system, which leaves children of the community so inadequately provided for. This is a very serious question and the Ministry have done what they usually do, they have simply taken the short-term policy of this Committee. They have dealt with the surplus; they have carried out certain investigations into the cost of living and wage rates; but they have blandly ignored the recommendation of the Committee that an inquiry should be set up into the whole question of provision for dependants. The same characteristics run through and through the performances of this Government.

Photo of Mr Ernest Brown Mr Ernest Brown , Leith

The hon. Member is not quite fair. First of all we have provided the Committee with the most complete analysis of facts and of sample cases that has ever been provided by anyone; and, secondly, the Committee themselves point out that we are now in the middle of making the most elaborate investigation ever made in the world into the cost of living—an accurate investigation.

Miss Rathbone:

I am quite prepared to admit that the facts should be accumulated, but more than facts is needed: we want principles and performance based on those facts. There is really no need for so elaborate an investigation to prove what everyone has known. I have myself written two books, and I do not know what else, to point out the anomaly of this lack of provision for child dependency. The wives and dependent children in the community exceed in number the whole body of occupied persons, employers, employed and self-employed, and when the social system makes no provision whatever for that group of the community how can you expect to have a satisfactory system of provision for the workers, whether in work or out of work? This Government always goes on the same line.

Photo of Mr Ernest Brown Mr Ernest Brown , Leith

And you always scold us, and that is all right.

Miss Rathbone:

I wish the scolding would produce more effect. The Government live from day to day, from hand to mouth. Their leading motive is to keep the ship afloat, to keep themselves in office. Just as in international matters they treat dictators by running away from them, just as in the question of armaments they delayed for years before they did anything about it—until the right hon. Member for Epping (Mr. Churchill) and the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) forced them to take notice—so in this question of provision for the future population they are running the risk of nothing less than race suicide. They are getting us nearer and nearer every day to a position when it will be too late to prevent a really dangerous decrease of the population. To re-populate is a much slower process than to rearm. It takes 18 years before a baby becomes a mother, and another 18 years before the offspring of the mother becomes a potential producer or soldier, or colonist. Unless the Government really rouses itself to consider this problem and to deal with the problem of child dependency and provision for dependency, it will be running a very grave risk. I think it was the hon. Member for Norwood (Mr. Sandys) who suggested that there ought to be a committee set up to discuss this question. I am glad to see that he is a new convert to family allowances, which I have often advocated. I suggest that some much larger committee than a committee of the Ministry is necessary. We want a com- mittee which represents all the principal Government Departments. It is a question that concerns the Ministry of Health.

Photo of Lieut-General Edward Fitzroy Lieut-General Edward Fitzroy , Daventry

The hon. Member is getting very wide of the mark now.

Miss Rathbone:

I was coming to the point, which I am sure you will recognise is in Order, of pleading that a committee should be set up to carry out the proposal which has been made, not only by this report, but by a report printed two or three years ago, that there should be a real investigation into the question of the relation between wages and unemployment insurance and the wider question of provision for the population. I trust that the Government will really do something about that matter, and I appeal to the Minister of Labour, who, I know takes a very sympathetic interest in it, to bring the question before the Government and to plead for a thorough investigation. In the meantime, I only wish that the draft Orders had done something more, as well as the several useful small reforms that they contain, to provide at least for the children of the unemployed. A rise in the rate of allowance to these would at least have made us sure that the group of children were not gradually, by under-nourishment, going to recruit the ranks of a future C3 population.

2.27 p.m.

Photo of Mr Herbert Williams Mr Herbert Williams , Croydon South

I have listened with considerable interest to the speech of the hon. Lady the Member for the English Universities (Miss Rathbone). At one moment she rather reminded me of what has been described as "the bellicosity of the non-fighting tribes." I was particularly interested in her references to her intellectual difficulties as chairman of the Children's Minimum Committee and chairman of the Family Endowment Society. Both these bodies, I take it, have separate offices, and when the chairman of one wants to telephone to the chairman of the other, the tragic result is that she finds the chairman out. I agree that there are difficulties in this matter when you get obsessed with a particular subject without considering its relations to other subjects. The proposal that people should not be paid what they earn, but paid in relation to another person's sense of irresponsibility in regard to large families, has never appealed to me. There is only one system of payment which has any intellectual basis. It is that a man should be paid for what he produces, and a proposal that he should be paid not for what he has produced industrially, but what he has produced as a parent seems to me an entirely false idea.

Miss Rathbone:

Does not the hon. Member consider that the woman who, after all, is the person who produces the children, is performing a service to the community?

Photo of Mr Herbert Williams Mr Herbert Williams , Croydon South

It entirely depends on what she produces. There are in many public institutions people who ought never to have been produced at all. The remarkable fact is that we had the higher birth-rate at a time when we had no social services, except that which Queen Elizabeth made in the form of a drastic and often unkind Poor Law. The higher the people's standard of living, the lower is the birth-rate, and not the reverse. However, that is not the issue I rose to discuss, but the hon. Lady stimulated my thoughts a little.

Everybody has been speaking to-day on the assumption that we have a lot of money to throw about. The first word of warning came from the hon. Member for East Birkenhead (Mr. White). He wondered whether, if this report had been written a few weeks later, the recommendations would have been quite the same. I do not know whether hon. Members have looked at the tables on pages 50 and 51, which are rather interesting. One table gives a list of the total number of unemployed persons, and the next table gives a list of claims admitted for insurance benefit. The third table shows the percentage relationship of the two. If we look at the numbers of insured persons unemployed, of whom there are 1,304,000, we find that 578,500 had claims admitted for insurance benefit, being 44.4 per cent. of the total number of insured persons registered as unemployed. I have written in the figures, which are later than those given in the report, from 14th February, which I have taken from the Ministry of Labour Gazette. There has been, as we all regret, an increase in unemployment to 1,770,000. Nearly the whole of that increase is reflected in increasing claims for insurance benefit, and the whole burden of the increased unemployment is met out of the Insurance Fund and not by the Public Assistance Board.

That is of the greatest significance, and the reasons are obvious. There has been a stimulus to trade in the heavy districts, which, to a large extent, are in the distressed areas, and there has been a recession of trade in the districts that were previously doing very well. Many of the light and luxury industries are having rather a bad time at the moment. The motor car industry is not doing too well, the wireless industry is not doing so well, and the textile industry generally is suffering a measure of recession. On the other hand, iron, steel and coal, heavy machinery and shipbuilding industries are very good, and the improved employment in the Special Areas, as we by a form of inverted snobbery decided to call them, shows an improvement. The result is that the hard core of unemployment, which was ranging round 350,000, has gradually crept down until to-day, as the Minister of Labour told us, it is 279,000. We have the curious fact that unemployment is diminishing in what were the distressed areas and increasing in what have been the prosperous areas, with the result that people who have recently gone on the register are people who have satisfied the first statutory condition and, therefore, their claims are on the Insurance Fund.

The reflection on the finances of the Fund is rather interesting. Last June there was a surplus in the four-week period of £566,000. In the four-week period to 14th February the working surplus was only £26,000. It is conceivable that when we get the figures on the 18th of next month, which will show the picture at this moment, although I imagine there will be some fall in unemployment, we may find the Insurance Fund, for the first time for many years, having had a period in which it has incurred a loss. In these circumstances, I am not one of those who says to the Minister, "What a pity it is you are not improving benefits here or there." I am going to speculate whether, in the improvements we are making to-day, we are not taking grave risks. Nothing could be more deplorable than that in 1940 or 1941 some Government should have to come to the House and say, "We are very sorry, but circumstances similar to those of 1931 have recurred, and we have to ask the House to sanction a 10 per cent. cut in unem- ployment pay." That would be a first-class disaster. If we are to avoid that we ought not to be too free in improving benefits when times are fairly good. That is the sensible thing. I differ from many speakers to-day. I think we ought to devote ourselves more to paying off the debt. It would be good finance. I am certain that hon. Members in this House are denying the principles of sound finance if they say that we ought to ignore the debt, that the debt ought not to have been charged against the Fund.

Photo of Mr Joseph Batey Mr Joseph Batey , Spennymoor

We have never said that.

Photo of Mr Herbert Williams Mr Herbert Williams , Croydon South

Then to whom should it be charged?

Photo of Mr Joseph Batey Mr Joseph Batey , Spennymoor

The Government should pay it.

Photo of Mr Herbert Williams Mr Herbert Williams , Croydon South

Who are the Government? The Government, in the financial sense, are just the mass of the people. Those who during times of adversity have had the money "on the strap," as it is popularly called, ought to be the people to make the repayment. Why should the burden be cast upon other people? Why should we be so irresponsible as to ask other people to pay our debts? That is really what such a proposal means. I am absolutely convinced that the debt ought to be charged against the Fund. On the 31st of this month we shall have the debt reduced to £102,250,000, and at that date, making a guess, the amount of the current fund will be £61,000,000. The sum of £20,000,000 is going towards reducing the debt. I should like to see the Minister say "I will make no improvement in benefits until I have completely wiped out the debt, so that we can have a free hand."

After all, we are increasing debt in a good many directions. In the National Budget this year we shall add £100,000,000 to our national debt. Ten years ago we were reducing the national debt by £50,000,000 or £60,000,000 a year. Trade at this moment is not improving. It is getting a little worse. I am one of the optimists, I do not think we are in for a first-class slump, but I have to assume that we may be. I look forward almost with horror to the prospect that some 18 months hence we may be face to face with another first-class financial crisis. We are not treating the unemployed persons in this country badly. The first major Unemployment Insurance Act for which the Labour party were responsible was passed into law by the right hon. Gentleman whose absence on personal grounds I regret, for we were very good personal friends. I refer to Mr. Tom Shaw. In 1924 he was responsible for a very important Measure under which it was provided that a man and wife and two children were to have 27s. a week, and he resisted a proposal that the 2s. for each child should be raised to 3s. Under the Order which we are now making a similar family of four will get 32s. a week.

In the meantime, what has happened to the cost of living? At the time when Mr. Shaw introduced his Bill the index figure of the cost of living was 178. It is now 156. If we convert the figures to a comparable basis, the 27s. which the Labour party in 1924 thought was adequate—[Interruption]. It was adequate in the sense that the Labour party were prepared to vote against proposals to increase it. They presented their original proposals and they put their Whips on against any proposal to increase the payments. What my right hon. Friend is now proposing is the equivalent, on the same cost-of-living basis, of 37s. 6d. a week, as nearly as it can be calculated. That is a generous provision. Unemployment insurance was never intended to represent full maintenance. It ought not to. Otherwise, why should people work if they can live in comfort without working? I think that is a rotten principle. If it is not important for people to be industrious they will not be industrious. I hate the doctrine of idleness, and we ought not to encourage it.

We ought not to make it worth while for people to prefer to be idle rather than to go to work. So far as the mass of my fellow countrymen are concerned they want to be industrious, but there is a small fraction who do not hold that view. There are a number of people in the country who, if they can dodge work, will dodge it—as long as they qualify for benefit. They are not a large proportion, only a very small proportion—every investigation has proved that they are a very small proportion—but the example is contagious. The demoralisation will slowly spread upwards, and in the long run it will be a disaster. It is no good saying, as some do, "If wages are so low that benefit exceeds them you must alter the wage basis." You can make a speech like that, but you do not solve the problem in that way. You cannot pay out in wages more than you have got. That is a horrid thought, but it is true.

None of the high-minded speeches from the party opposite solves any problem. Declamation against the abomination of employers paying wages which are less than benefit does not raise those wages by a brass farthing. We have to face up to the issue "Why is it?" and very often we find the answer to "Why is it?" buried deep down in the fact that the commodities which are produced at these low wages are commodities the price of which it is very difficult to raise, and if you attempt it you destroy that source of employment altogether. It is only a few days ago that a million signatures from those protesting against the cost of living were brought to the Table of this House by the party which is now entirely absent from the House. Not one of us desires to see people paid so low that they cannot maintain some reputable standard of life, but you cannot solve any problem by vague denunciations, and so long as the fact remains that in certain occupations the produce of industry is so low that low rates are paid for it you have to contemplate either the destruction of that employment or, alternatively, to make sure that the subsidy to people when they are not in work does not bear such a relation to the wages that they will not want to work.

I am preaching what is not, perhaps, a popular doctrine. The easiest way to get cheap votes is to promise everybody everything, but it is not the honourable way, and what I love about my fellow countrymen is that in the long run they do not believe those who promise them everything. I say that in the long run, and if you are merely vote-catching, you will get more votes by refusing things than by promising them, for the people believe you when you say "No" and doubt you when you say "Yes." That is what saves democracy in this country. What really threatens democracy is mass bribery. It is that which has brought it into peril in every country in the world. Here, fortunately, we have checks such as do not exist in the United States, where an irresponsible Parliament paid out £400,000,000 of money without any justification at all. Here the responsibility for finance lies with the Government. They are not only representative but responsible. The object of my remarks to-day has been to try to impress upon the House once again that because our hearts are sympathetic we must not pursue a course which will create another crisis of the kind that landed us in such difficulties only six-and-a-half years ago.

2.45 p.m.

Photo of Mr John Leslie Mr John Leslie , Sedgefield

The hon. Member for South Croydon (Mr. H. G. Williams) has stated that he is not in favour of increasing the benefits until the debt has been repaid. I wonder whether he would apply that principle in respect of the huge subsidies which have been given to tramp shipping companies who are now able to pay dividends, and whether he would require them to pay back the subsidies which the. Government have given them. If not, why have the workers to be penalised all the time and why are they to be the only people who have to pay back?

Photo of Mr Herbert Williams Mr Herbert Williams , Croydon South

I have not the slightest hesitation in saying that every penny of subsidy which has gone to tramp shipping has been spent in the additional amount of wages paid because of the subsidy.

Photo of Mr John Leslie Mr John Leslie , Sedgefield

The hon. Gentleman said also that he was against high benefits because they were an encouragement to people not to work. If he knows anything about the unemployed he will agree that no unemployed man can draw benefit if he refuses to take a job to which he is sent by the employment exchange.

Photo of Mr Herbert Williams Mr Herbert Williams , Croydon South

No; if he fails to carry out the written instructions of the manager, which is not quite the same thing.

Photo of Mr John Leslie Mr John Leslie , Sedgefield

I have been the general secretary of a trade union, and I know how our members have been treated when they have gone for benefit. We accept the recommendations of the Statutory Committee as far as they go, but they do not go far enough, unfortunately. It is good to note that there are to be increases of benefits to single men among agricultural labourers, but it would have been far better to have kept the contri- butions at the same rate and to have given increases of benefit all round. It is a thousand pities that the allowances to children have not been increased. To agricultural workers the burden is very great indeed.

The Minister gave us a resumé of the statutory regulations for a period of years, but he significantly omitted to mention the recommendation for the inclusion of non-manual workers by raising the income limit from £250 to £400. It was urged that their inclusion would strengthen rather than weaken the Fund, and surely such a suggestion ought to have consideration by the Government. If the Government consider that the Statutory Committee are the best people to deal with unemployment insurance, why have the Government not carried out that recommendation? There is a class of worker that goes in and out of the Act as remuneration rises and falls. Those people pay, but they are seldom if ever entitled to benefit. I hope that the Minister will use his influence with the Cabinet to bring the non-manual workers into the Act as speedily as possible.

I want to take up once again the case of the seasonal worker. An agitation is on foot at the present time against the application of Sunday trading restrictions at holiday resorts. I see present an hon. Member who has taken an active part in that agitation. It is proposed to exclude holiday resorts, and, on the ground of difficulty in obtaining staffs, it is suggested that girls should be employed for seven days a week.

Photo of Mr Roland Robinson Mr Roland Robinson , Blackpool

That is not quite a fair statement. It has never been suggested on any occasion that people should be employed for more than six days. None of us who are interested in this matter have done anything but say that there should be a day of rest.

Photo of Mr John Leslie Mr John Leslie , Sedgefield

That is different from the point of view put by a deputation which came to me a few days ago and contended that they wanted the whole seven days. One factor in this matter is that when the workers are thrown out at the close of a season they have no benefit, although they have to pay into the Fund during the seasonal periods. They are naturally not anxious to take a job at a holiday resort, and they would prefer to get a job elsewhere. Another strong reason against working in holiday resorts is that they have to work many hours while other people can enjoy the sunshine and the healthful recreation. In his speech the other day the Minister seemed to think that the outlook for employment was very rosy indeed.

Photo of Mr Ernest Brown Mr Ernest Brown , Leith

I did not say it was very rosy indeed, but that the outlook was by no means as black as some hon. Gentlemen had represented.

Photo of Mr John Leslie Mr John Leslie , Sedgefield

At any rate, the Minister seemed to think that it was not so bad. He told us, also, that the increase in the number of workers in employment was the greatest on record. I think that is true, but it would be very serious if it were not so because of the growth of population. Surely the growth of the population means that there ought to be an increase in the number of people employed; otherwise it would be serious.

If the future is not so bad and there is no likelihood of a slump, why conserve the Fund to the extent that has been decided upon? With the increased cost of living there is a case for increased benefits. The Fund can afford it, as was shown by the deputation that went from the trade unions, as mentioned in the report, and by the recommendation of one trade union representative on the Statutory Committee who showed that benefits could be increased by 1s. a week in certain cases and by 2s. in others. The Government remind us that the Fund borrowed from the Treasury in the years of the great distress, and that when you borrow you must pay back. Why single out the Unemployment Fund for that treatment? Have the Government not been lavish in giving huge sums to shipping companies who are now able to pay dividends? There ought to be a similar request to them, if a request is being made that the Unemployment Fund should pay back the amount that has been borrowed. Why penalise the workers? The Fund ought to be relieved of this burden of debt.

2.53 p.m.

Photo of Mr John Tinker Mr John Tinker , Leigh

The hon. Member for South Croydon (Mr. H. G. Williams) always interests me because of the way in which he puts his case. He now seems to be taking an unpopular line in order to be popular. He says that the people of this country do not believe in promises, and he has made it his policy to resist any kind of promise so that he will get the support of the electors. He is a very smart man indeed. I was one of those who regretted the change when, a few years ago, we handed over certain duties to the Statutory Committee, because it meant that the work of Parliament had been handed to another body. If that process is to be taken to any considerable extent it will mean that Parliament will hardly be worthy of the name.

The Debate this afternoon has not had the same interest, nor has there been the same attendance, as has been usual on occasions of this kind. Why is that? Because we recognise that whatever we say can have no effect upon the matter. We have to accept the recommendatoins of the Committee in their entirety or to reject them. It is almost impossible for one to vote against those recommendations. The best way to attack any one of them would be to vote against all the recommendations, but it would be very bad for us to vote against certain increases in benefit. We are, therefore, tied down to approving the Regulations, whether we like to do so or not.

I want to deal with what is called over-insurance, which means, in effect, that a person may get in benefit more than he would be getting if he were in work. It means that a man with a large family is driven into the position, because the wage he would get may be slightly less than he would receive in unemployment benefit, of being led not to seek employment. That is a matter which must be watched very carefully. It is a striking reflection on the state of affairs in this country. We have continual appeals for an increased population, because we realise what is likely to happen if there are not more children, but the Statutory Committee, in reference to this question of over-insurance, say that they do not want to give more to the unemployed man because the effect might be to diminish the desire for work. The alternative is to see that by some means the man with a large family is not penalised in that way. The hon. Member for South Croydon said that years ago there was no trouble about this question, but surely he must recognise that we have made great advances, that great social improvements have been made, and this is one of the questions that will have to be examined and recognised before very long, because otherwise the population will go lower and lower. Men and women nowadays, with the education that they get, will not bring up large families because they realise what the extra burden is, and unless provision is made in that direction it will be a serious matter for the country.

I made it my business to call a meeting of the unemployed in my constituency to consider this report, because I felt it would help me in the Debate if I could have first-hand information of what they thought about it. They are the people who are chiefly affected by what is being done, and it is only when you get a body of unemployed people before you and see all their troubles and difficulties that you really get in touch with the situation. I put the case before them, and explained what it meant. One difficulty that they felt was in understanding why they should have to pay back this accumulated debt, because that is what it means. I told them that the Fund had a burden of debt of over £100,000,000, which was created in a time of deep depression, that on that debt interest has to be paid, and that the Statutory Committee had decided that £20,000,000 of the surplus should be used to repay part of that debt. I pointed out that the saving of interest that would thereby be secured would lead to a further surplus for distribution. They said that they agreed but that surely Parliament ought to have been wiser than to saddle the unemployed with a tremendous burden of debt. One man asked me whether it meant that, if he were in distress and applied for Poor Law relief, interest would have to be paid on that Poor Law relief. People find this position very difficult to understand. Unemployment benefit was given to people in need, and, when the Unemployment Fund got behind, it was in a time of deep depression, and, therefore, the payments were made out of the Fund to people who were in dire need. In those circumstances, surely it is as illogical to burden the unemployed with that debt as it would be to burden in a similar way the man who was receiving Poor Law relief. It amounts to saying that they have to pay interest on the money that has been granted to them to help them out of their difficulties.

It is altogether wrong, first, that the debt should be on the unemployed, and, secondly, that, even if £20,000,000 has to be repaid, it should be taken from the surplus. I have always held that depression was caused mainly by lack of spending power on the part of the people. Therefore, to deprive the poor of spending power makes distress greater. By taking this £20,000,000 from the people to whom it would otherwise have been distributed, their spending power is restricted to the extent of £20,000,000, and that would have gone a long way to help large numbers of poor people out of a terrible plight. At the meeting to which I have referred, I noticed, looking round the room, that nine-tenths of the men and women present could have done with a new outfit. The men could have done with a new suit of clothes, and the women with a better dress than they had, while in the case of both men and women there was an obvious need for better footwear. If I had been on the Statutory Committee, I should have asked myself what I could do to improve the lot of these poor people, and should have made it my business to give every unemployed man a suit of clothes and a pair of boots and every unemployed woman a dress and a pair of boots. That would have done them some real good. Moreover, whenever goods are taken off the market, it gives rise to more employment. If, however, the spending power of the people is restricted, greater unemployment follows. I contend that the Statutory Committee have not done as well as they could have done. They have been obsessed, as it seems to me, by the fact that they have to carry out the work of Parliament, and they have not taken, as I think they ought to have taken, the wider view and said that, if there was a sufficient surplus to enable them to do something for the unemployed, they would do it, and chance what happened for the future.

There seems to be in the minds of hon. Members opposite an idea that there may be a slump, or, to use the new term, a recession, and funds are being kept back to the extent of £37,000,000 against that possibility. I thought that the National Government had got beyond thinking about a slump; I thought that everything was so good that there was no possibility of its ever happening again. If, however, it has to come, let it meet its own burden, and for the time being give to the unemployed men and women all the surplus that we have. If depression should come, the country is big enough to meet it and deal with it, but at least let us try to make the lot of unemployed men and women as good as ever we can. I contend that the bulk of the £60,000,000 which I understand is the total should have been used for the purpose of improving the lot of these men and women, who are sadly in need of the help that we could give them. That is why to-day I very much regret that I am in the position of not being able to record my vote. I should have liked to express my feelings on this matter, and I think it would have been far better if that had been possible. Then the country would have known. There would, of course, have been no question of any objection to the increase of 1s. in dependants' benefit, but a vote would have expressed to the Statutory Committee and the Government the feeling that exists on these benches against the present recommendations. Although we are not voting against it, I trust that what we have said will have some effect when they come to examine this next year, and that whatever money there is in the Fund as a surplus will be given to the unemployed men and women, to make their lives a little better than they are at present.

3.6 p.m.

Photo of Mr John Withers Mr John Withers , Cambridge University

After what has been said on both sides, I think it only right to put on record that, at any rate, one Member on this side docs not agree entirely with what the hon. Member for Croydon (Mr. H. G. Williams) has said.

Photo of Mr George Buchanan Mr George Buchanan , Glasgow Gorbals

There were two other Conservative Members, earlier on, who dissociated themselves from it.

Photo of Mr John Withers Mr John Withers , Cambridge University

I think the same principles ought to be applied on both sides. For instance, if the debt on the Fund is to be repaid by the beneficiaries, be it so: deal with it as a debt to be repaid; but all the amounts advanced on subsidies for companies who are paying dividends should be repaid as well, on the same basis. It would be very difficult to arrange; but I think that ought to be done in order to make it homogeneous. I think it right just to say that, not for the purpose of creating any impression except that we should like to treat the matter absolutely fairly on both sides.

3.8 p.m.

Photo of Mr William Adamson Mr William Adamson , Cannock

When the right hon. Gentleman made his statement, he found it necessary, in the interest of the House, to give a general review of the proposals. The discussion that has arisen has indicated a keen interest in the proposals before us, and the alternatives that have been put up from all quarters of the House. It is not my intention to go into the more extraneous matters that have been raised, but to concentrate on one or two of the major issues. I would begin by emphasising our protest, which has become periodical on these issues, against the procedure that has been adopted in dealing with these questions. The very fact that it may be argued that the giving of certain advisory powers to the committee means devolution of our duties, shows the seriousness of the position. The principle of devolution could hardly be carried to that extent, but the House of Commons, which is the last custodian of the people's rights, is deprived of the opportunity of submitting amendments on matters that directly affect the interests of a large percentage of our people. We join issue on the question of whether these regulations should be brought forward in such a way as prevents the House of Commons expressing its desires, except that we can adopt or reject the proposals.

The right hon. Gentleman, in submitting the proposals, carried out his duty faithfully, although when he expressed his belief that the usual adjectives which he knew well would be employed in the Debate, I think that he must have been disquieted. Criticism in the main has been directed at the inadequacy of the work he has accomplished, and not at himself. He may have the assurance at least that he may go down to history, in acting on behalf of the Statutory Committee, as a benevolent dictator. I do not intend to enter into the whole question of the repayment of the £20,000,000 of the existing debt, or to deal with the debt itself, except to reiterate that the debt on this Fund should not have been placed upon one section of the community. It should be a national obligation, and, when the resources of the country permitted, it should be abolished. We believe that they have gone about this proposal in the wrong way. There is no doubt, judging from the discussion to-day, that many avenues have been indicated in respect of which they could have allocated the additional reserve and which, we believe, would have been in the best interests of the country.

The Committee would have been well advised to have taken the abolition of the waiting days into account. It is all very well to argue that it is better that the unemployed man and his family should feel the effect of the three waiting days at the beginning rather than at the end of the unemployed period. The facts of the case are that in the main, the wages of the normal worker are pledged before he receives them, even in the last week of his employment. Debts are already due to the butcher and baker before he receives his wages. There is very little margin upon which he can rely as a reserve to fall back upon, so as to overcome the difficulties of the waiting period. We trust that the attention of the Minister will be directed towards influencing the Board to come to a decision that the waiting period should be abolished. We cannot object to the increased benefits in that they will alleviate the position to a certain extent. When it comes to the position of the agricultural workers, many of us who represent urban and rural areas deplore the setting up of two separate sections under Unemployment Insurance. It may have been necessary and convenient at the time.

It is very interesting to read the first year's review of the administration of the Agricultural Fund. Very few of us visualised that there would be a higher ratio of unemployed women in agriculture as compared with men. The problem with regard to the difference in the benefits to agricultural workers is one that will have to be reviewed again and again in order to bring them into closer ratio with each other. We have the position to-day where the Minister of Agriculture is attempting to encourage increased productivity of foodstuffs, while the Minister of Labour is tending to drive the agricultural workers to seek employment in the urban districts, where they cannot only have the advantage of better wages but can ultimately come under the scheme of unemployment insurance on the general conditions that apply to other sections of workers.

This problem will be intensified the more that mechanisation comes into agri- culture, because there will be a higher ratio of unemployed in agriculture who cannot be dealt with under existing conditions. It is from that point of view that I think it was inadvisable for the Committee to recommend a reduction in the contributions in respect of agricultural workers. Was there not rather a need, out of the surplus, to have given additional benefit to the unemployed agricultural workers? They are the only section in industrial insurance in respect of which the maximum amount of benefit that can be paid is fixed. It is rather strange that that principle should be applied to the agricultural worker because his continuous low wage level always brings him nearer to the verge of insufficiency in regard to the needs that have to be supplied. The payment of a maximum of 30s. benefit, irrespective of family, is an imposition that ought not to have been tolerated. If the contribution level had been maintained there might have been some additional benefit paid to the unemployed agricultural workers. It may be difficult after a survey of such a short period of the working of the Agricultural Fund, actuarially to commit ourselves to what ultimately will be the result, yet in the circumstances of to-day I do think that the Committee might have recommended an increase of benefit for the agricultural workers.

Other issues have been raised by various hon. Members. There is the question of seasonal workers. The hon. Member for Blackpool (Mr. R. Robinson) reminded the House that he had persuaded the Minister to submit this question to the Committee, but, like other hon. Members, I have looked in vain for any reference to it in the report, and I suppose we must assume that they are still considering the matter. Some years ago I had an opportunity of meeting the officials of the right hon. Gentleman's department on behalf of drifter fishermen, and we came to an arrangement whereby the existing allotments of allowances to drifter fishermen in the herring industry were recognised as wages, and after consultation with the Department they were brought into unemployment insurance. Owing to the conditions of a seasonal nature which apply in the herring industry it is a matter of consideration whether there should not be very special exemptions in their circumstances. Undoubtedly, it is a problem which the Minister should ask the Statutory Committee to consider.

Another question which has been discussed this afternoon is the relationship of wages and benefit rates. Technically this might be outside the jurisdiction of the Statutory Committee, but I welcome the fact that they have explored this question, as it is one which must be taken into account. I suggest that the inquiry should be of a much wider character if the Minister ever comes to the conclusion that such an investigation should be undertaken. I think there should be an exploration not merely into the relationship of wages and benefits, but to an extension of the social services and other aspects of our social conditions today. It would at least concentrate public opinion on some sections of employers in industry who are paying too low a standard of wages for human existence. I am not going into the relative value of children's allowances in relation to the social services. It is a good feature in unemployment insurance that we do take into account the responsibilities of the bread-winner so far as there are allowances for children, but there is surely a wide field that can be explored, not merely as to the minimum standard necessary to maintain physical fitness, but to maintain the general position of these people.

I am glad that many hon. Members opposite have dissociated themselves from the point of view that it would be always desirable to keep down the rates under unemployment insurance. I recognise that insurance risks are bound to arise always, and that in the fluctuation of employment conditions, we must take into account what reserves there should be for future responsibilities; but to attempt at the present time to prevent the extension of the benefits would certainly be fatal. We are desirous that, in the course of time, there should be greater extensions, not only on the lines suggested by the Trade Union Congress, but on the lines of a wider application of unemployment insurance to sections of people who do not come within it now.

I ask the Parliamentary Secretary to consider whether it would not be advisable that, in the annual review by the Statutory Committee, greater attention should be paid to the fluctuations, and that consideration should also be given to the fact that, after all, the unemployed have always been the first to suffer when economies have been made and have almost always been the last to get advantages. The right hon. Gentleman the Minister was fortunate in that he took over the Ministry at a time when it was possible to give increases, but the whole of the proposals for which the Minister has been responsible during the last three years have not made up for the years during which the men and their families received insufficient to maintain a decent existence. While accepting the increased advantages which are now to be given to the unemployed, we ask that the Minister should do something to give a fuller and more adequate existence to those who suffer from unemployment, through no fault of their own, but owing to the social system in operation.

3.30 p.m.

Photo of Mr Alan Lennox-Boyd Mr Alan Lennox-Boyd , Mid Bedfordshire

The wise and temperate speech of the hon. Member who has just sat down is typical of the Debate, and I will do my best to answer briefly but fairly the many questions put to my right hon. Friend, with courtesy and point. May I thank hon. Members, and especially the hon. Member for Norwood (Mr. Sandys) and the hon. Member for East Birkenhead (Mr. White), for their kindly greetings to myself? May I say to the hon. Member for Gorbals (Mr. Buchanan), whose absence for the moment I regret, that when the time comes for me to lay down the work of Parliamentary Secretary of this Department I hope he will agree that I may have introduced into that work some of that human sympathy and understanding which I had never denied that he possesses, but which he feels that I lack.

In dealing first with the remarks of the hon. Member for Ebbw Vale (Mr. Bevan) it may be of advantage to the House if I make a further statement on the annual debt charge of £5,000,000. As my right hon. Friend said, the Statutory obligation will remain, even though the sum of £20,000,000 is being devoted to the repayment of debt, but from the saving resulting from this payment the annual debt charge will in future be £4,013,000 in place of the original £5,000,000. I will not trouble the House with the figures on which this total has been arrived at, but the matter is dealt with on page 16 of the Statutory Committee's report. The hon. Member seemed to feel that the Statutory Committee had exceeded their powers in raising the question of the relation of wages and benefits. I had intended to deal in some detail with that point, but I think the hon. Member has been fairly effectively answered by the hon. Member who spoke last. It is, of course, open to the hon. Member for Ebbw Vale to challenge the conclusions at which the Committee had arrived, but I do not think it is open to him to deny them the right—indeed they are by Statute obliged to do so—to make recommendations for the amendment of the scheme. By Section 59 of the Statute the Committee are obliged to make recommendations for the amendment of the scheme in connection with the maintenance of its financial stability. Clearly, they must consider possible recommendations and the merits of each. Equally clearly they are entitled to say, as they do in the report, that in their judgment the matter of the relation of benefit and wages is one that should be raised in legislation. I do not think it altogether fair to charge the Committee with having exceeded their powers in that regard.

Photo of Mr Aneurin Bevan Mr Aneurin Bevan , Ebbw Vale

I based the whole of my case upon the Statutory Committee's own report where they say: The introduction either of a 'ceiling' or of a 'wage-stop' into unemployment insurance raises issues of social policy which should be dealt with only by full Parliamentary procedure after special inquiry directed to the question. My complaint is that, having said that, they then go to apply the very principle which they themselves have said should be dealt with by special legislation.

Photo of Mr Alan Lennox-Boyd Mr Alan Lennox-Boyd , Mid Bedfordshire

I see the hon. Member's point, but I think my original statement meets it, and with his permission I will not labour it at greater length. In regard to the question of the debt, the point of view of those who think that the Fund ought never to have been saddled with a debt incurred in a period of acute depression is well understood in this House, but the House has decided against it. Since the debt charge has to be met, I think hon. Members on both sides will agree that there is, in the words of the "Manchester Guardian": everything to be said for making its present burden as light as possible". That we venture to think, this Order will do. The hon. Member asked why if £20,000,000 can be saved to be used in debt redemption should not the £20,000,000 spread over 10 years be used at the rate of £2,000,000 a year for the increased benefit of the unemployed? If he looks at the report he will find in paragraphs 32 and 33 an explanation of why the Committee think that while £20,000,000 can, with propriety, be used for the reduction of debt, it could not with safety be used to increase benefits. In paragraph 32 the disposable surplus of £7,416,000 is stated to have been arrived at, on the basis of caution. In paragraph 33 the amount of money available for debt reduction is determined by "reasonable optimism"; they say: The appropriate sphere for the use of this power appears to us to be defined by the margin between caution and reasonable optimism in forecasting the rate of unemployment. The hon. Member made one or two references to the question of agricultural insurance, and he drew attention to the fact that there has been a reduction of contributions. I think the impression was given, no doubt quite unintentionally, that little or nothing has been done in these proposals to increase benefits as well. It is true that in the agricultural scheme a halfpenny reduction of contributions is envisaged, but there is also a reduction of three days in the waiting period and an increase of 1s. 6d. a week to young men in receipt of unemployment benefit; and I do not think it is making use of a political argument in a debate from which party prejudice has been conspicuously absent if I remind the hon. Member that this insurance scheme itself is the work of the present Government and provides very well appreciated social machinery in country districts which have hitherto lacked it.

In regard to the question asked by my hon. Friend the Member for Norwood, who raised the general question of mainenance and children's allowances—and the same subject has been raised by the hon. Lady the Member for the English Universities (Miss Rathbone) and by a number of other speakers—it involves questions going far beyond the scope of the present Orders, and, indeed, beyond the work of the Ministry of Labour alone. All those arguments which have been put forward from different parts of the House will be considered and weighed. Various inquiries have been taking place through the Ministry, to which attention is drawn in the report, but to which a number of Members have made little or no reference, as, for instance, the Ministry's inquiry into the relation of wages and benefits which is printed as Appendix C in the Statutory Committee's report. There is also an inquiry going on into the cost of living, and a mass of very useful information is being assembled. I do not think the House will wish me to say more than that it is most important that the Government should have such information when considering arguments that have been brought forward from different parts of the House. I would have liked to have shown some of the difficulties of this problem by drawing attention to the wide divergencies of views on this subject which have been shown in the course of this short debate by Members in different parts of the House.

Now I would like to deal very briefly with the very interesting speech made by the hon. Member for East Birkenhead. He is, and has been since its inception, chairman of his own local employment committee, and anything that the hon. Member has to say on subjects like these is naturally listened to, not only because of the respect in which he is held in this House, but also because of his practical experience in work of this kind. He asked two questions, to both of which I would like to make brief answers. He himself, I am sure, will realise that the line of demarcation between the work of the Unemployment Assistance Board and that of the Statutory Committee is too wide a subject to consider fully in the course of a Debate of this kind, but when he asked what the effect of the rise of 1s. in dependant's benefit would be on the Unemployment Assistance Board's scale, I am in a position to give him an answer. Indeed, the answer was given later in the Debate by the hon. Member for Gorbals, who raised the same question himself, and then, basing his answer on correspondence which he had had with the Ministry, answered it effectively. I think my hon. Friend the Member for East Birkenhead will agree that the rates of unemployment benefit are not based upon need, and I am sure he will perceive that it would be most unwise to adopt the principle that a change of benefit rates in either direction, either up or down, ought to be followed by a similar change in the rates of unemployment assistance. I think the House will agree with me that we must, from the point of view of those in receipt of assistance, envisage the possibility of a downward descent in benefit as well as of an upward rise.

The hon. Member and my hon. Friend the Member for Blackpool (Mr. R. Robinson) asked a question concerning a statement in the report which has puzzled them both, with reference to the sale of investments—that the investments that are to be sold are those which pay the highest rate of interest. It is important that there shall be no misunderstanding on this subject and I will therefore give a fairly full answer. The securities that are to be retained should be such securities as are best fitted, in the Committee's view, to be retained with the course of future unemployment in view. It so happens that some of the securities now held do not fit in with the position as well as others, and it also happens that that part of the securities happens to be such securities as yield an interest rate upon the price paid for them a little higher than the average. It is pure chance, but I hope that that statement meets the question that has been asked.

In regard to the other questions raised by my hon. Friend the Member for Blackpool, I would give a brief reply to two or three points. He referred to seasonal workers, and he asked my right hon. Friend to bring the matter before the Statutory Committee. It was brought before the Statutory Committee. There is nothing significant in the failure of the Committee to mention specifically that it had received representations concerning seasonal workers. Sir William Beveridge's Committee received a number of other recommendations, and, as I have said, there is nothing significant in the fact that the recommendation concerning seasonal workers, like many other proposals, is not dealt with in the Report.

Photo of Mr Roland Robinson Mr Roland Robinson , Blackpool

If the Statutory Committee in its report does not give any reasons for rejecting these suggestions which we make, how are we to find out why they are turned down year after year?

Photo of Mr Alan Lennox-Boyd Mr Alan Lennox-Boyd , Mid Bedfordshire

I can only suggest to my hon. Friend that if he feels strongly on the matter, as I am sure he does, he should continue to press it, as he has done before, and no doubt the patience which has been rewarded in other spheres may find its reward there. With regard to my hon. Friend's question about ex-service men, he appeared to think that there is in the case of ex-service men a prior insistence on their seasonal as distinct from their ex-service capacity. I am sure the House will agree that ex-service men quite properly get privileges in order to enable them to enter the insurance field, for example, the privilege in favour of ten instead of 30 contributions in the two years, but once they have entered the insurance field through this well deserved and entirely proper privilege, it is only right that if they are seasonal workers they should be treated as such.

With regard to the various points raised by the hon. Member for Goebbels. [Laughter.] The explanation of that slip of the tongue is that on more than one occasion the hon. Member for Gorbals has addressed me by the word which I improperly used in describing his constituency. The hon. Member asked how it was that the investigation by the Ministry was conducted, that is, the investigation into the relation between wage rates and benefits. He appeared to think that the information was arrived at in some academic seclusion by Sir William Beveridge and that it had no relation to the lives of ordinary people. As is shown on page 54 of the Committee's report, the information was acquired through the work of the local exchanges, and far from being used to depress wage rates in this country the information can in future be of enormous advantage in dealing with measures likely to improve the general standard of living. The hon. Member asked that the Trades Union Congress should be entitled to be consulted on matters of this kind and that their recommendation should be accepted. I shall not go into the way in which the Statutory Committee was first formed and the need to preserve its judgment inviolate, but I think it is common knowledge that the Trades Union Congress on more than one occasion were represented by delegates who interviewed the Statutory Committee, and great regard was paid to all they said on behalf of those millions of wage-earners whom they represent.

Photo of Mr Aneurin Bevan Mr Aneurin Bevan , Ebbw Vale

Did the Committee intimate to the representatives of the Trades Union Congress that they proposed to make recommendations with regard to the relation of wages and benefit, and to base one of their recommendations for an actual change in benefit upon their views?

Photo of Mr Alan Lennox-Boyd Mr Alan Lennox-Boyd , Mid Bedfordshire

I am afraid I cannot answer that, but I should think that it is likely they did not. The Trades Union Congress were asked how they would like any disposable surplus to be used, and the Committee paid due regard to their wishes; and then, basing themselves on information acquired from the Trades Union Congress and other sources, they came to the conclusion which the Government have now accepted. In regard to various other points raised in the course of the Debate, I am sure that both the hon. Member for Farnworth (Mr. Tomlin-son) and the hon. Member for Cannock Chase (Mr. Adamson) will be satisfied if I tell them that their request with regard to the abolition of the waiting period has been noted and will be listened to, as all such requests would be from them, with respect.

Photo of Mr Alan Lennox-Boyd Mr Alan Lennox-Boyd , Mid Bedfordshire

With regard to the question asked by the hon. Member for Gorbals about the rate paid to single women, I cannot at this moment say more than that those rates are the best that can be paid within that actuarial system on which unemployment insurance is bound to be framed. With regard to the question asked towards the end of the Debate by the hon. Member for Sedgfield (Mr. Leslie) for the inclusion of non-manual workers in the scheme, it will be remembered that my right hon. Friend said a little time ago that he could not promise legislation this Session. The request has by no means been turned down, but I am sure the hon. Member will be satisfied if he knows that the reason that it is not being done is that no legislation is possible this Session.

The hon Member for Cannock Chase suggested that one part of the policy of the Government was to drive the country worker into the towns. I venture to think that not the least satisfactory part of the agricultural proposals in the Order before the House is the fact that it will have quite the opposite effect and tend to keep good workers on the land because of the improved conditions brought about by insurance. If he wishes that the two schemes should be amalgamated—and indeed, the question of my hon. Friend the Member for Blackpool could only be satisfactorily answered if he wished that—I need hardly point out that at the present moment it would be impossible to ask from the agricultural worker that contribution of ninepence which is asked from the worker in industry. Everybody must hope the time will come when, with expanding prosperity on the land, there will be no reason for any difference in the rates of benefit or contribution. Till that time comes, it is impossible to amalgamate the two schemes. I hope that I have met most of the questions that have been asked, and I should like to thank the House for the courtesy and attention with which they have listened to my observations.

Photo of Mr Aneurin Bevan Mr Aneurin Bevan , Ebbw Vale

There is an important point raised by the hon. Member for Gorbals to which we should like to have a more specific reply. When the Unemployment Assistance Regulations were before the House the rate of unemployment assistance for the man and wife with no resources was related to the original unemployment benefit. Now there is to be an increase of 1s. in the rate of benefit, so that the rate is 27s., while in the regulations it is 26s. Does the hon. Member or the Minister think that the Unemployment Assistance Board is by regulation forbidden to make the 1s. increase if it so desires?

Photo of Mr Alan Lennox-Boyd Mr Alan Lennox-Boyd , Mid Bedfordshire

I did not deliberately evade answering that point. I referred to the question asked by both the hon. Member and the hon. Member for Gorbals. The best answer would be to read to the House a reference made by my right hon. Friend on 21st July, 1936, when introducing the Regulations. He said: In the normal case the industrial worker who is head of a household with one or more dependants and no available resources will receive not less than his present benefit rate."—[OFFICIAL REPORT, 21st July, 1936; col. 298, Vol. 315.] If the hon. Member turns to the Draft Unemployment Assistance Regulations, 1936, issued by the Minister of Labour two years ago he will find roughly the same phrase used in paragraph 7: Will in general receive not less than their present unemployment benefit rate. I am afraid that I am not in a position to add anything more.

Photo of Mr Aneurin Bevan Mr Aneurin Bevan , Ebbw Vale

Will the right hon. Gentleman make representations to the Board to take into account the fact that ordinary benefit rates have been raised by 1s. in respect of this category of beneficiaries, and that as men are much worse off at the end of a period of insurance benefit than at the beginning it is desirable that in these cases the additional 1s. should be given?

Photo of Mr Ernest Brown Mr Ernest Brown , Leith

If I may speak again with the leave of the House, I can only say that I should not like to add anything to what I said in the letter to the hon. Member for Gorbals. That which we call the "fall back" was put in as a result of the examination of the no resources cases as compared with those with resources.

Photo of Mr George Buchanan Mr George Buchanan , Glasgow Gorbals

I should like to give notice that at the first opportunity I shall raise this matter, if I can manage it, on the Adjournment.

Question put, and agreed to.

Resolved, That the draft of the Unemployment Insurance (Additional Benefits) Order, 1938, laid before this House on the second day of March, in pursuance of the provisions of subsection (4) of Section 59 of the Unemployment Insurance Act, 1935, be approved.

Resolved, That the draft of the Unemployment Insurance (Additional Benefits and Reduction in Contributions) (Agriculture) Order, 1938, laid before this House on the second day of March, in pursuance of the provisions of subsection (4) of Section 59 of the Unemployment Insurance Act, 1935, be approved."—[Mr. E. Brown.]