Considered in Committee under Standing Order No. 71A.

[Sir DENNIS HERBERT in the Chair.]

Motion made, and Question proposed, That it is expedient—

  1. (a) to make provision that, in determining under the Unemployment Insurance (National Economy) (No. 2) Order, 1931, questions as to whether the circumstances of applicants for transitional payments are such that, whilst unemployed, they are in need of such payments, the following rules shall be complied with—
    1. (i) wounds or disability pensions (as enumerated in section sixteen of the Finance Act, 1919) which are taken into account, shall be treated as if they were reduced by one half;
    2. (ii) weekly payments by way of compensation under the enactments relating to workmen's compensation in force in the United Kingdom which are taken into account, shall be treated as if they were reduced by one-half;
    3. (iii) money and investments treated as capital assets and taken into account shall, in so far as the value of all such money and investments considered in the aggregate does not exceed twenty-five pounds, be disregarded, and, in so far as that value exceeds that amount but does not exceed three hundred pounds, be treated as equivalent to a weekly income of one shilling for every complete twenty-five pounds;
    4. (iv) in taking into account the value to any person of any interest in the dwelling-house in which he resides, any sum which might be obtained by him by selling or by borrowing money upon the security of that interest shall be disregarded;
    and to authorise the expenditure, out of moneys provided by Parliament, of such expenses as may he incurred by reason of the provisions aforesaid; and
  2. (b) to permit the application of the same rules in the granting of outdoor relief under the enactments relating to the Poor Law."—(King's Recommendation, signified.)—[Sir Henry Betterton.]

The MINISTER of LABOUR (Sir Henry Betterton)

Before we proceed I should like to ask you, Sir Dennis, for the guidance of the Committee, to give some indication as to the scope of this discussion.

The CHAIRMAN

Members of the Committee will be aware that it is the practice in a case of this kind where there is a statutory enactment in operation which it is not proposed to interfere with that the Committee cannot discuss that particular statutory enactment. In the circumstances of this particular case, the Resolution before the Committee is one which provides for certain rules on the general question of whether the circumstances of applicants for transitional payment are such that they are in need of such payment. The statutory provision is that such payment shall only be made to unemployed persons who are in need of assistance, and the present proposal being limited to deciding how the question of need is to be determined, it would not be in order to discuss whether payment should be made without any regard to whether the applicant is in need or not. The Committee will be free to discuss how the question of whether an applicant is in need of assistance or not, should be determined, although as will be realised it is not open to any hon. Member to propose Amendments which go beyond the proposals in regard to which the King's Recommendation has been signified.

Mr. BUCHANAN

I understand, Sir Dennis, that you have laid it down that a Member cannot argue in favour of the complete abolition of a test of means, and that all he can argue is the question of the degree or nature of that test. Would it not be in order, however, for an hon. Member to endeavour to show that the administration of the means test was becoming a heavy charge on the Treasury and that on that ground it would be better to abolish it? Would he not be entitled to argue, not on the rights or wrongs of the means test, but on the fact that it was becoming a heavy charge on the Treasury?

The CHAIRMAN

I carefully avoided using the expression "means test" which does not appear upon the Order Paper or in these proposals. What I have ruled as being outside the scope of this discussion is the question of whether transitional payments ought to be made to persons irrespective of whether they are in need of assistance or not. That cannot be discussed. What may he discussed is the question of rules and whether the rules ought to be simplified or made so as to be less expensive in the matter of administration. That is a matter which can be discussed within my Ruling.

Mr. ARTHUR GREENWOOD

I take it, in effect, that the discussion will be about as wide in its scope as the Debate on the Second Reading of the Bill to which the Financial Resolution relates and that general arguments on the operation of the whole system of transitional payments will be in order.

The CHAIRMAN

It is not for me to say what would be in order on the Second Reading of a Bill. I cannot go beyond saying what would be in order in the discussion of this Resolution, and I hope I have put the matter clearly to the Committee. I have no doubt that it would be the wish of the Committee to allow as wide a Debate as possible, but the Committee must remember that the one thing which they cannot argue—and indeed I do not imagine that any hon. Member would seriously wish to argue it—is that these payments should be made irrespective of whether the applicant was in need at all or not. That is really the only thing which is barred from the discussion.

Mr. LEWIS

Do I understand, then, that the first Amendment standing in the name of the right hon. Gentleman the Member for Bow and Bromley (Mr. Lansbury)— in line 1, to leave out from the word 'expedient,' and at the end of the Question to add instead thereof the words 'to amend the law relating to transitional payments by

  1. (a) repealing the provision under which applicants for transitional payments are subjected to a means test; and
  2. (b) removing from the public assistance committees and restoring to courts of referees appointed under the Unemployment Insurance Acts the duty of dealing with applications for transitional payments'"—
is out of order?

The CHAIRMAN

Yes, because it would create a charge beyond that in regard to which the King's Recommendation has been signified.

Mr. BATEY

If the first Amendment is out of order, may we ask whether any of the other Amendments on the Order Paper are in order?

The CHAIRMAN

I think perhaps we might wait until we come to those Amendments, but I may relieve the hon. Member's mind by telling him, generally, that every Amendment which would increase the charge is out of order and that apparently covers all the Amendments on page 2492 of the Order Paper and the first three Amendments on the next page. As to the remaining three Amendments, the time to consider them will be when we come to them.

Sir H. BETTERTON

If I understood your Ruling aright, Sir Dennis, it will not be in order on this occasion to raise the question of whether there should or should not be a needs test. That question is decided by the Statute. It will be in order, however, I take it, to discuss the question of inquiring into a person's means in order to ascertain the extent of his need. As the Committee will observe, the purpose of this Financial Resolution is that a Bill may be introduced at once to provide that certain rules shall be complied with in determining the need of applicants for transitional payments and to permit the application of the same rules in the granting of out-door relief. When hon. Members examine the Bill they will see that it follows the terms of the Resolution. The Ruling which has just been given enables me to take the opportunity, which I am sure will be welcome on all sides of the Committee, of discussing the fundamental difference between us and hon. and right hon. Gentlemen opposite on this question. As I understand it, from the Amendments which appear on the Paper and from speeches which have been made and other indications, it is the view of hon. and right hon. Gentlemen opposite that no inquiry at all should be made into means before public relief is granted by way of transitional payments. That of course, is a new attitude and a new decision to which hon. Gentlemen have come. I do not in the least complain, because each of us has the right to change his mind sometimes, and hon. and right hon. Gentlemen opposite have just as much right to do so as anybody else. This statement of policy was first announced to the House by the hon. Member for Chester-le-Street (Mr. Lawson) on 5th April of this year when he said in that clear language which he always uses: As far as we are concerned we are for ending the means test root and branch without equivocation or qualification. That is the position which we take up with regard to the matter."—[OFFICIAL REPORT, 5th April, 1932; col. 40, Vol. 264.]

3.30 p.m.

Mr. ANEURIN BEVAN

On a point of Order. I listened to your Ruling very carefully, Sir Dennis, and if you have noted what the right hon. Gentleman has said, you will have observed that he has addressed the whole of his remarks up to now to a discussion of the desirability of a means test as such. Are we, therefore, to be allowed to follow the Minister in that line of argument?

The CHAIRMAN

I am bound to say that I did not hear, in the circumstances, every word that the Minister said, but I think that when a Minister introduces a Resolution, as long as he does not argue a point, he is entitled to state shortly the reasons why he is introducing a Resolution to deal with some particular aspect of any matter.

Mr. LAWSON

As the Minister has quoted a statement that I made, which I would be very desirous of amplifying and supporting, shall we have an opportunity of meeting the viewpoint which the right hon. Gentleman has put and of dealing with that particular quotation?

Mr. HOLFORD KNIGHT

Further to that point of Order. May I say that the argument which my right hon. Friend is now advancing appears to be contrary to the Ruling given from the Chair?

The CHAIRMAN

There is perhaps some confusion in the minds of hon. Members between the different expressions "means test" and "needs test." I hope I made it clear that the question of what being in need means is fully within the limits of discussion. All that is shut out is the discussion of the question whether these transitional payments should be made to persons regardless of their being in need. It is not a question of regardless of what their means are, but of regardless of their being in need.

Sir H. BETTERTON

I most certainly will not transgress the Ruling you have given, Sir Dennis, and I will not pursue what I was saying—

HON. MEMBERS

Go on.

Mr. McGOVERN

Let us have a heart-to-heart talk.

Sir H. BETTERTON

I am only too anxious to do so. Upon this fundamental matter there has been a complete change of attitude on the part of hon. Members opposite. I find that in September of 1931 the hon. Member for Dumbarton Burghs (Mr. Kirkwood), at Scarborough, raised this very question, and moved an amendment to the effect that the Labour party should pledge itself to raise the benefits under the scale endorsed by the party before the last election, and to abolish the means test to those on transitional payments. That was a perfectly clear, straightforward amendment. I observe that no answer whatever was given by the official spokesman, but the chairman, at the end of the proceedings, said: Are the Independent Labour Party pressing their amendment? There were cries of "Yes," and the amendment of the Independent Labour Party was then put to the vote and lost, on a show of hands. That apparently was the view just before the election, and therefore, both with regard to the limited question and with regard to the main question, what we are asked now, as I understand it, is that we should accept a principle which was rejected by the Labour party immediately before the General Election.

I want to proceed at once to explain who are affected by this Resolution. It is only those who have exhausted their insurance qualification, those who have no longer any claim upon the Insurance Fund, and whose claims to benefit have ceased and whose relief is provided wholly by the National Exchequer. Under the Order which was made a year ago, it was laid down that it must be assumed that an applicant had exhausted his right to insurance benefit after 26 weeks, and I cannot think that that can be regarded as an ungenerous allowance of time. If you add it up, you will find that a man and wife and three children would have received £38 benefit in 26 weeks, and if you take the contributions at 10d. a week, you will find that it would take 18 years before he would have paid in enough to meet that £38.

The claim of hon. Members opposite, as I understand it, is that he who has exhausted his claim on the fund and who then must look to the State for relief shall have that relief, whatever his means be and without any inquiry into them. Therefore, the claim is that that person should be privileged as against the in- sured person in that he has exhausted his insurance rights, and that he shall be privileged as against the man who claims poor relief, in that there is to be no inquiry as to his means. We do not hold that view, and, while there may be legitimate differences of opinion as to what the standards should be, we adhere to the view that public money cannot be given to persons without regard to whether they need it or not. I will give my reasons, and the first point to which I shall refer is by way of affording an analogy. When hon. and right hon. Members opposite were in office, they passed the Anomalies Act, and they did it because they thought—and, I think, thought rightly—that there were certain abuses which required correction. We are acting on evidence of what appeared to us to be abuses at least as flagrant as, if not more flagrant than, some of those which were corrected by the Anomalies Act.

I will give one or two examples among many of actual cases which have come to my notice. There is the case, for instance, of a married man with £240 in the bank, £240 in War Savings Certificates and his wife £1,100 in the bank. He applied for transitional payment, which, of course, if granted, would be paid for by the State, and he was refused. That is the case of a man whose means did not justify him going to the State for relief. There is another case of a single man with £1,500 in the bank. He applied for transitional payment, and was refused. Hon. Members opposite may be interested to know that both those cases happened to come from Wales.

Mr. A. BEVAN

Were they granted or refused?

Sir H. BETTERTON

They were refused, but they would have got payment had it not been within the power of the authorities to ascertain their means. Another case is that of a single man with £755 in the Post Office Savings Bank, £212 in Birmingham Corporation Stock and £100 in Vickers Stock, making a total of £1,067. That was an application which was made and, of course, turned down, but it would not have been turned down had this test not applied. There is the case of a single woman with £1,700 invested, producing £60 a year dividends. I have many other cases of the same kind. I will give one or two cases of family income. I have a case here of a single man who has his father, brother and sister living with him in the same house. The father owns the house, and the total income of the four persons coming into the house is £13 5s. per week. The man applied, but no determination was made. In the case of a single man residing with his father and three brothers, the rent is 11s. a week and the total income of the household £14 16s. 6d. An application in this case was also refused. A single woman residing with her brother and two sisters made application. The brother and sisters were working, and the total income was £14 7s. 6d. No determination was made in that case.

We say that these and similar cases are abuses not less flagrant than those with which the Anomalies Act dealt, and they are cases to which it is clearly indefensible, in our view, to pay State relief without inquiry into the means of the applicant. There may be, on the figures I have given, two families living in the same street, one with an income twice that of the other, and yet the family with the lower income may actually be paying taxes in order to provide the dole for the family with the larger income. That is the sort of thing that causes resentment up and down the country in a way that is fully justified.

I want to put another aspect of the matter. The agricultural labourer very often, unfortunately, has a wage which is but little more than the amount received by an unemployed man with his wife and three children, and he, through his little luxuries such as tobacco and beer, is actually paying taxes to provide the dole for families whose income may be four or five times as great. That is a situation which really cannot be regarded as satisfactory. In our view, there is no shadow of doubt that the principle of inquiry into means in order to determine need is a right measure of justice to all those who have to find the money. I want to refer to the Order in Council of last year. That states, in Section I, Sub-section (4), that the Committees shall make such inquiries and otherwise deal with the cases as if they were estimating the need of an unemployed able-bodied person who had applied for public assistance, but as if such assistance could only be given in money. It is inherent in that system that there should be some discrepancies and some lack of uniformity between one district and another and one part of the country and another. But, as I have often told the House, my right hon. Friend the Minister of Health and I have done a great deal to secure much greater uniformity than there was when this system was first put into operation.

I cannot help thinking that many of the attacks which have been made upon public assistance committees have been both unjust and ungenerous. They have, with very few exceptions, carried out their duties with fairness and sympathy. These persons who are elected by their constituents, are, we are given to understand, competent and suitable to look after the interests of agricultural labourers, clerks out of employment, shopkeepers and other uninsured persons; and they are perfectly competent apparently to organise local schemes of training for the unemployed; but the moment they begin to exercise their duties with regard to transitional payments, then we are given to understand they at once become monsters of inhumanity. I cannot help thinking that there is a good deal of cant in criticisms of that kind. There has long been a demand, not only among hon. Gentlemen opposite, but among all Members in all parts of the House, for what they call a more humane Poor Law, and I cannot understand why they seem to discredit the very instrument through which they want to achieve that end.

I have in the House during last year said—and I hope that hon. Gentlemen will believe that I meant what I said—that I was watching the working of the administration of transitional payments, and that I would give the matter my closest consideration. I have done so, and I am satisfied that there are discrepancies in principle which we can rectify at once, as we are doing in the Bill. I will give some examples. I have here some instances of discrepancies in the treatment of disability pensions. I am told that Manchester generally disregards 50 per cent. Birmingham ignores the first 5s. in every case, and larger amounts where the disability calls for more than the usual assistance. In Lancashire one-fourth of disability pen- sions, or 6s., which ever is the smaller, may be disregarded. In the case of savings, Manchester ignores £5; Birmingham ignores savings of £5 for a single man and £10 for a man and wife. Leicester ignores savings up to £25, and a claim is not allowed until savings are reduced to £25. In London savings of a small amount are usually ignored, and if they exced £20 no determination is generally made. These are examples of discrepancies with which I want to deal.

This Resolution and the Bill which will be founded upon it are limited to three types of resources, namely, disability pensions, workmen's compensation, and savings, or, more properly, capital assets. Our object is to get, if we can, a uniformity of principle in dealing with these three types. There will be a minimum which will be uniform and general in its application, with discretion above the minimum to be exercised by local authorities on the merits of each individual case. May I first deal with the question of disability pensions? My hon. and gallant Friend the Member for North St. Pancras (Captain Fraser) made a speech on the 17th February, 1932, in which he said: That is the whole basis of the law under which such compensation is given, whereas the disabled soldiers' benefit bears no relation whatever to his earning capacity or to the earning capacity of which he has been deprived. There is, therefore, not a strict parallel between these two cases. He was referring there to compensation cases and soldiers' disability cases. He continued: Moreover, in my judgment, the disability pension is not wholly given to support and maintain life. It is given partly as compensation to provide amenities and comforts over and above those which are ordinarily enjoyed. He said a little later: When the appropriate time comes I shall press for some Amendment in the Bill which the Minister says he will have to bring in after the Royal Commission's Report giving statutory recognition to the fact that a disabled man's pension is not given to him solely for maintenance."—[OFFICIAL REPORT, 17th February, 1932; cols. 1753 and 1755, Vol. 261.] That is exactly what this Bill will do. It will give statutory recognition to what my hon. and gallant Friend asked, and it will secure absolute protection for a portion of the disability pension. My object, and my only object, in this matter is to protect by statute the position of the disabled man. The Clause in the Bill accepts the principle which he urged, namely, that a portion of the pension should be deemed to be in respect of something other than maintenance. I have constantly stated in this House that I hope these men will be dealt with sympathetically, and I repeat it. There will be no change of attitude so far as we are concerned. It is not proposed to interfere with the discretion of public assistance authorities to allow more than the statutory minimum in proper cases. That means that while a man is to be entitled under statute to protection for half his pension, if the nature of his disability involves him in extra expenditure over and above that which he would ordinarily require for his maintenance, then the committees may make him a greater allowance.

It has been urged that we ought to have inserted a minimum of money, that we should have put in some words like this, "But in no case shall the amount paid be less than so much per week." I considered that point with the utmost desire to help the disabled man, and the conclusion I came to was that the insertion of a figure of so much per week might, and probably would, do more harm to him than good, because public assistance committees would be very apt to regard it as a maximum, would be very prone to regard it as an amount beyond which they ought not to go, and if that view were taken then men with a large degree of disablement might be very seriously affected indeed. It is in the interests of the men themselves that we have framed this proposal in the way we have. I may add that the proposal is in conformity with the recommendation of the Royal Commission. My hon. and gallant Friend pointed out that there was a difference between the cases of persons suffering from disablement due to the War and those suffering from an injury caused by an industrial accident. I considered that point very carefully, and have come to the conclusion that in a matter of this kind, whatever the differences may be, we ought not to distinguish between them, and, therefore, we have decided that the same rule shall apply to the money which a, man has as compensation for some industrial accident. I have not had the time to read, or, indeed, to do more than glance at, the report of the Royal Commission, but I am told that in regard to industrial compensation we have gone rather further than the Royal Commission recommended. Whether that be so or not, I think we ought to go as far as we have gone, and treat these people in the same way as we treat disability cases.

The next point the Resolution deals with is savings, an extraordinary difficult matter. It must be remembered that the money for transitional payments comes from persons many of whom have no savings at all, and, indeed, very often from persons who have to call upon their savings in order to pay their taxation. That is a point of view which we cannot ignore. On the other hand, I am very much impressed by the fact that owing to the prolonged industrial depression we are getting among the applicants for transitional payments an increasing number of persons who may have had really good industrial records for perhaps 20 or 30'years, and may not have been out of work during the whole of that time until 26 weeks ago. At the end of 26 weeks of unemployment they find that their insurance rights are exhausted. As the law stands at present they might be called upon to use up the whole of their savings before they got relief. It is represented, and I think rightly, that the present system is a discouragement to those people who, with a good industrial record over a long period, have saved something, and our problem, therefore, is to secure equal justice by recognising on the one hand the claims of thrift and on the other avoiding injustice to the taxpayer. Here, again, what we propose is, I am told, recommended by the Royal Commission. It is put in rather different words, but the substance and the effect are the same.

We propose to say that the first £25 of savings shall be disregarded, and that in regard to the second £25 it shall be assumed that from that second £25 there is an income of 1s. per week. The Committee will observe that that means that it will be assumed that there is no income from the first £49 19s. 11d., because the second £25 to which I have referred must be a complete sum of £25. The first £49 19s. 11d. is not taken into account at all. Then we say that every additional £25 up to £300 shall be assumed to produce an income of 1s. a week.

Mr. COVE

That is 10 per cent. Will you tell us where we can get such an investment?

An HON. MEMBER

Russia.

Sir H. BETTERTON

If you work it out arithmetically it does—

Sir HERBERT SAMUEL

May I ask whether in this respect the Resolution is equivalent to the recommendation of the Royal Commission?

Sir H. BETTERTON

Yes. I have not studied the recommendation of the Royal Commission, but I am told that this is substantially what the Royal Commission recommends. House property raises another point which has aroused a great deal of controversy. The Resolution aims at prohibiting compulsion on an applicant to sell or mortgage his house property, but the local authorities will still be required to take into account any income derived from letting off any part of the house, and also the fact that the applicant has no rent to pay. So far as workmen's compensation is concerned, the payments are to be taken into account to the extent of one-half. I am only going to say one word in conclusion.

4.0 p.m.

Mr. A. BEVAN

Before we leave that point, may I ask whether the capital assets and the savings of the other members of the family will be entirely disregarded in assessing the applicant's claim for transitional payment? Here we are dealing, I understand, with the means of the applicant himself, but I think the Committee would like to have some light upon the attitude of this Resolution to the capital assets and savings of other members of the family.

Sir H. BETTERTON

It does not affect that at all. The fact is that local authorities will do in the future with regard to capital assets of the family exactly as they have done in the past.

Mr. BEVAN

Then they will take the liquid assets of the other members of the family into account?

Sir H. BETTERTON

They will pursue the same rule as they have done hitherto. The point to which the hon. Member has referred, of course, raises the whole question of family income. Probably we shall be asked in the course of this Debate why we have not included that, too. I will tell the hon. Member that that question, as nobody knows better than the right hon. Member for Bow and Bromley (Mr. Lansbury), with his tremendous experience of Poor Law, raises just about the most difficult and complex questions that can be raised, and is one of the questions in considering which the Royal Commission expended two years. In a temporary Bill, 48 hours after the report has come into my hands, I am not going to give a decision on a matter which has taken nearly two years to consider, and before I came to any conclusion on this matter I shall want not only to consider what they have said, but I shall also have to read, as I shall read, the evidence on which they founded their conclusions.

Mr. BEVAN

I do not desire to raise the whole matter of family income, but do we now understand that as the applicant is allowed to have £49 19s. 11d., a member of the family to which the applicant belongs must be completely impoverished? [HON. MEMBERS: "No."] I want to understand whether the same rule applies to members of the family as applies to the applicant.

Sir H. BETTERTON

No doubt, in the course of the Debate, that point will be developed, but it would not be very convenient to deal with a case of that kind when I am endeavouring to explain the terms of this Resolution.

In conclusion, I would draw attention to the last part of the Resolution which says that the same rules shall apply with regard to pensions, compensation and savings in the granting of outdoor relief. That is a matter for which of course my right hon. Friend the Minister of Health is responsible, and he will deal with it. I would remind those who have any doubt as to whether that is right or not, of a Debate which took place in this House as long ago as 23rd May, 1817, on the Savings Banks Bill, one Clause of which proposed to allow persons to avail themselves of parochial aid, should they require it, although they might have at the time money in the banks for savings not exceeding the amount of £30. One hon. Gentleman, Mr. Hammersley, particularly objected to this portion of the Bill as it was so complete a deviation from the principle of the Poor Laws. But the interesting thing about it is that another hon. Member, Mr. Frankland Lewis, speaking of the operation of the Clause, said: Even under the Poor Laws, as at present administered, they did not require that an individual should be absolutely destitute of all property before assisting him. It was discretionary with the overseers, and in most cases that discretion was exercised on the side of mercy and humanity. That was 115 years ago, but what I would point out is that it is exactly that principle which is contained in the Bill which is to be founded on this Resolution. So that the principle is not a new one.

Mr. BRIANT

There is the word "permit" in paragraph (b) of the Resolution. Do I understand that under paragraph (a) these exemptions come under the word "shall," and that as regards paragraph (b) they are permissive?

Sir H. BETTERTON

That is right.

Mr. BRIANT

Why?

Sir H. BETTERTON

My right hon. Friend the Minister of Health will deal with that. I have given, I hope, a clear explanation of what is contained in the Financial Resolution, and I hope that the right hon. Gentleman the Leader of the Opposition will do what he has told us he would do the other day, namely, help us to get the Bill through, although, of course, he is quite entitled to say that it does not go as far as he would like.

Mr. BUCHANAN

The right hon. Gentleman has dealt with the Resolution in regard to workmen's compensation, savings and disability pensions. Can he tell me why sickness income has been left out? Under Health Insurance the first 7s. 6d. is exempt, but the right hon. Gentleman knows that the Poor Law authorities up and down the country have been ignoring that. I want to ask why nothing has been done here about sickness benefit, which seems to be as important as workmen's compensation and disability pensions, seeing that sickness is certified.

Sir H. BETTERTON

That is a statutory obligation.

Mr. BUCHANAN

But they do not carry it out.

Sir H. BETTERTON

It is quite open to hon. Gentlemen to ask why this, that and the other are not included in the Bill. I say at once that it is limited to these three points, and we are not prepared, until we come to the larger legislation next year, to go further than we have done in the Bill which will come before the House.

Mr. GREENWOOD

The right hon. Gentleman asked us to do what we could to expedite this Resolution and the Bill. Had he offered some crumbs of comfort I think we might have been prepared to have done it, but I must say that my hon. Friends and myself are profoundly disappointed with the small, restricted nature of the concessions which have been given. The Government have been driven, as a result of the pressure of public opinion, to make some kind of gesture. Ever since this test has been in operation there has been a growing public resentment, not confined to Members of the Labour party, against the operation of transitional payment. Public assistance committee after public assistance committee, local authority after local authority, irrespective of party complexion has made its protest, first against the nature of the task that has been imposed upon it by the Government, and, secondly, against the conditions under which they were being driven, willy nilly, to administer it on pain of supersession. This revolt is not a revolt against the people with £1,500 in the bank. This revolt is a revolt because decent people, whatever their political party, find that, as a result of one year's operation of transitional payment, harshness has been unavoidable, and hardships have fallen on hundreds of thousands of families. That is the truth, and there is no hon. Member attending this Committee this afternoon that has not got in his own constituency scores of cases of really serious hardship inflicted in order to save a man with £1,500 slipping through and getting payments.

Let us look at some of the terms of the proposal made by the Government. In the case of wound or disability pensions one-half is to be allowed. The right hon. Gentleman, when it suited his case, quoted the Royal Commission on Unem- ployment Insurance, and said that the Government were doing better than that. Taking their proposals on the whole, they are doing worse than that. Most of us are busy men, but we have had time to look at some of the points in the report, and in the case of disability pensions their suggestion is that half of the pension should be omitted, but they say: It is in our view impossible to prescribe an absolute rule to be applied in all cases. And they suggested that in exceptional cases the local authority should have power to ignore more than 50 per cent.

Sir H. BETTERTON

The local authorities have that discretion.

Mr. GREENWOOD

The local authorities as the public assistance committees have power, but there is nothing, as I understand, in the Resolution which would permit a public assistance committee, acting as agent of the right hon. Gentleman, giving more. If I am wrong in that, I should be glad if the right hon. Gentleman would correct me. Then I must take the Resolution as it reads. It says 30 per cent. What is the position to day? The first 7s. 6d. of National Health Insurance benefit is already ignored. An ex-service man with a 20 per cent. disability—and that is the least for which the pension is paid—receiving 8s. per week, will have 4s. remitted. The mart who is sick and is likely to recover, is permitted a remission of 7s. 6d. There is no justice in that. There is no justice in the 50 per cent. If you were dealing with the matter purely on grounds of destitution you might say that you must take a proportion of it into account, but, if you are dealing with an unemployed man who is still in the field of insurable employment, that disability pension, if it has been accurately assessed, measures the amount by which his employability has been reduced. In those circumstances, regarding the matter from the point of view of the unemployed, the whole of the 100 per cent. ought to be remitted, because, so far as you can express it in money, it is something that has been given in order to bring that person up to the normal, and to put him into the industrial firing-line on equal terms with other people.

There is, I therefore suggest, a case for the unemployed, disabled ex-service man, an insured person who appears to have lost his livelihood for the time being, to be treated as though that income were not there, because it is the compensation intended to bring him up to the efficiency level in industry. The same applies with regard to the second item, that of workmen's compensation. There, one half is to be remitted. The Minister of Labour tells us that that is better than the proposal in the Report of the Royal Commission. What is set down in that Report is that they could not lay down any rule and that this is a matter for consideration. I agree with him that the principle is the same. Whether a man has been temporarily disabled as a private in the industrial army, or permanently disabled as a member of the forces of the Crown, is immaterial. The point is that for the time being he is out of the battle. Whether it be workmen's compensation or pensions—and we are dealing, remember, not with people who have fallen by the wayside and who are being dealt with by the Poor Law, but with workers and potential workers—applicants ought to be dealt with in a way differently from assuming that 50 per cent. of the disability does not matter and is not there. They ought to be treated as though the whole of the disability, as expressed in money, were part of themselves, part of their very person, and ought therefore not to be taken into account.

Now we come to a very difficult point, the question of capital assets. On that, we are told by the right hon. Gentleman that the Government have followed broadly the terms of the Royal Commission's report. Well, either my arithmetic is very bad or the right hon. Gentleman's is wrong. I take the case of a man with the maximum amount mentioned in the Resolution, a sum of £300. On the scale suggested by the Government, such a person would be regarded as having an income of £28 12s. per year. I have checked my arithmetic, and I believe that that can be reckoned out as equivalent to a dividend of 9½ per cent. on his capital. The report of the Royal Commission, as I estimate it in the case of the man with £300 of savings, regarded £23 8s. as income, so that the Government are not doing as well as the Royal Commission's report. The Royal Commission assumed only a mere 7⅘ per cent. return on the capital of these industrial capitalists with £300, while the right hon. Gentleman assumes 9½ per cent. What justification is there for that? [Interruption.] I am not wrong about "nearly 10 per cent." It may be true that the first £25 is disregarded, but every complete £25 after that is regarded. If there is £300, it is reckoned as an income of one shilling per £25 per week, that is, 11s. per week from £300.

Hon. Members can reckon up what it means. It works out at 9½ per cent. That money is not invested at 9½ per cent. Working people do not save for the income they get on the money; they save to have a nest-egg against a rainy day. At the best, they only get 2½ per cent. in the Post Office Savings Bank. They might have a little money in War Loan, but they are certainly not getting anything like 9½ per cent. Then there is the case of the old age pension. Take the case of a man and his wife in the noncontributory class with joint resources of £300. The first £50 is disregarded, and the rest is reckoned at 5 per cent. and is regarded as an income of £12 10s. per year, which is 5 per cent. on £250. It is monstrous to suppose that because people have £200, £250, or £300, in the bank, they are getting on that, in cash which they can spend at the grocer's and the butcher's, 9½ per cent., or anything near it.

Mr. WALLHEAD

Would it not be possible for some of those who are getting 9½ per cent. to be appointed as financial advisers to the Treasury?

Mr. GREENWOOD

The suggestion might well be addressed to the Government. These concessions are very small. What are they going to cost the Treasury? What, in the aggregate, is going into the pockets of hard-pressed families with unemployed wage-earners? According to the Financial Memorandum which has been circulated, it is estimated that this is not going to cost more than £1,000,000 a year. As it is stated that transitional payments now cost £52,000,000 a year, it means a little less than 2 per cent., at the very best. My view is that the right hon. Gentleman has no foundation for that figure of £1,000,000. I should like somebody to tell us how many disabled ex-service men are to-day receiving transitional payments, or who might be eligible for transitional payments when this part of the Resolution passes into law. I should like to know how many people are receiving workmen's compensation. We must know that, because otherwise there is no way of calculating this £1,000,000. We ought to know the number of people with means who have been applying in order to understand what the saving is likely to be. I repeat—because the Government must tell us a little more about the money side of this—that the Government have no evidence to support their estimate. Their words are very cloudy in the Financial Resolution. They have no real basis for their estimate that this is going to put something approaching £1,000,000 into the pockets of the unemployed.

I come to the next point. There are areas in this country where transitional payments have been administered in a little more generous spirit than the right hon. Gentleman likes, and where, in spite of the threats of the Minister of Labour, the conditions which are being operated are superior to those in this Motion. What is to happen in those areas which are among the most hard-pressed, and which have suffered longer from trade depression than any other areas in this country? What is to happen on the north-east coast, in Durham, in South Wales and in South Yorkshire? These areas are going to suffer under these new, generous concessions by the Minister of Labour. The assistance given to people who have had 10 or 12 years of industrial depression is to be less. While the right hon. Gentleman might hand out a few score thousands of pounds in some directions, he will take it from the working people in other areas. That is what this Financial Resolution amounts to, and that is what the Bill will amount to when it comes before the House.

Our objection to the Resolution, and to the Bill which is to follow it, is that they do not touch the great mass of injustice inflicted directly under the scheme and which has given rise to the volume, the growing volume, of public indignation. I have every sympathy with the abnormal case, but I am referring to the normal case of the ordinary industrial family, where there is cruel hardship because of the application of the principle that everything that comes into the house is part of the family income. It does not matter whether a son of 25 years of age is expecting to be married; his earnings have all to go into the common pot, every penny of them. Not only are romances being blighted month by month, and marriages postponed, but serious hardship is growing, and people are, willy nilly, leaving home. Hon. Members may say that it is wrong, but it is perfectly natural. This process is breaking up family life. I am speaking with regard to the bulk of cases, those of the normal family.

4.30 p.m.

I cannot understand the way in which the matter has been administered. I will except, if you like, the case of Rotherham, where the vast majority of people who applied received the full transitional payment. I will take areas where there are no Labour men in the ascendancy, and no wicked agitators disturbing the public mind, where no such elements exist, but where there are respectable authorities and yet where they have given full benefit in three-quarters of the cases. If they do that, believe me there is every justification for full payment in those three-quarters of the cases. What happens in Aberdeen? Full benefit is given in 11.2 per cent. of the cases? As against Southampton, which pays full benefit in 71 per cent. of the cases, grave injustice is being done to a large percentage of the applicants in the town of Aberdeen, if conditions are reasonably comparable. The Motion does not touch the problem. These are not anomalies. To-day anomalies are relatively small and unimportant compared with the mass; they are excrescences. It is the whole system which is wrong. Many hon. Members, when they talk about uniformity, mean bringing people who are a little better off down to the level of the others. We are generally accused of doing so, but, of course, this proposal will do precisely the same kind of thing. If there ought to be a measure of uniformity—and the right hon. Gentleman has pleaded his three ewe lambs of classes of case—then what about the monstrous difference of administration as between different parts of the country? There can be only one conclusion. Either millions of pounds are being flung away by Conservative and Liberal local authorities, or, in large numbers of places, honest people for whom transitional payments were intended are not getting even what the right hon. Gentleman told us he thought they ought to have. But we go further than that. The right hon. Gentleman is still going to drive the disabled ex-service man to the doors of the public assistance committee; he is still going to subject the householder who has a cottage of his own to indignity by a Poor Law inquisition such as no Income Tax payer ever suffers. So long as any unemployed worker is dealt with by the Poor Law, I shall fight it. I have never in my life agreed to any unemployed worker going to the Poor Law.

Mr. BUCHANAN

It is not true. You drove them on to it. [Interruption.] You bitterly drove seasonal workers on to the Poor Law by depriving them of every penny of benefit.

The CHAIRMAN

Order!

Mr. GREENWOOD

This repetition of bitterness is indicative of the hon. Member's mind—

Mr. BUCHANAN

It is not robbing people of benefit, anyway.

Mr. GREENWOOD

I would remind the hon. Gentleman that the Government which he sometimes supported took people off the Poor Law.

Mr. BUCHANAN

Yes, but you drove them on to it.

Mr. GREENWOOD

For the last 12 months we have had something in this country that we have never had since we have had unemployment insurance as a system—an association of unemployment insurance with the Poor Law. Ex-service men—

Lieut.-Commander AGNEW

Would the right hon. Gentleman make himself perfectly clear? Is he suggesting that during his administration unemployed agricultural labourers were not sent to the Poor Law if they were destitute?

Mr. GREENWOOD

They are being sent there to-day. [Interruption.] Of course they were; it is perfectly true. What I said, and it still remains true, is that people were taken off the Poor Law and put on to unemployment insurance benefit. It is true that agricultural workers were not among those persons; I hope they will be included among the insured workers before very long. The point that I want to make is that we are operating now under a system whereby, for the first time, unemployment insurance has been linked with the Poor Law system, and whereby Poor Law methods and Poor Law machinery are being used to assess the claims of people such as those whom the right hon. Gentleman to-day is purporting to assist. I say that that is a retrograde step. Never, since 1834, when the new Poor Law system was established, has a single new function been given to it; the whole process has been to take away from it functions which it ought not to exercise. The development of our education, our Public Health Acts, unemployment insurance itself—the whole purpose of these was to take people away from the Poor Law, and the administration which is being perpetuated now in this Financial Resolution is a reversal of the policy of a hundred years.

This is tremendously important to the unemployed. The principle of the Poor Law is deterrent. The principle of the Poor Law is that nothing can be given unless a person is destitute. The means test has been part of the Poor Law ever since we have had the Poor Law. Either through malice or through ignorance, people have accused me of inventing it, but it is inherent in the Poor Law; so long as you have destitution authorities, all means must be taken into account. But that is no reason for allying that kind of machinery with the administration of unemployment insurance. That goes back to the days when a man who was workless was regarded either as a rogue or a vagabond, when he was regarded as suffering from some personal moral defect. That is not true to-day, with 3,000,000 people out of work, including some of the most highly skilled and most reliable operatives in the land, and our objection to this mean concession is that, even as regards this small class, they still have to suffer the humiliation of the Poor Law.

I come to the further question of the inquisition as regards their means. So long—and, if there were any doubts, 12 months of administration of transitional payments has proved it up to the hilt—so long as conditions remain as they are now, the scales of justice will always be weighted against the poor, and I am prepared now to put myself with everybody who will stand against any means test administered by the kind of people who are administering it to-day.

Captain FRASER

Have some courage, and say what you mean.

Sir H. BETTERTON

Do I understand the right hon. Gentleman to say that he would approve of a means test if it were administered by some other authority?

Mr. GREENWOOD

No. I assure the right hon. Gentleman that I am not here this afternoon to run away from this question—

Mr. PIKE

It would be a change. [Interruption.]

Mr. GREENWOOD

If hon. and right hon. Gentlemen on the Front Bench would either keep their ungenerous statements unsaid or say them on the Floor of the House, I should prefer it. I am saying that, under the conditions under which we are living to-day, the last 12 months have proved that the scales of justice are weighted against the poor.

Mr. PIKE

Is it not true that the Minority Report included in the volume which we have before us to-day proves conclusively that the administration is not operating in the way that the right hon. Gentleman suggests?

Mr. GREENWOOD

I think the hon. Member has not read the Minority Report—[Interruption.]

Mr. McGOVERN

The point is that the right hon. Gentleman is against any means test at all.

Mr. GREENWOOD

If the hon. Member for Shettleston (Mr. McGovern) wishes to make a speech, let him rise in his place.

Mr. McGOVERN

Every week a different statement is made by representatives of the Labour party on the means test. Will they, in justice to their supporters in the country, state quite sincerely whether they stand for or against any form of means test?

The CHAIRMAN

I think the hon. Member will realise that that is a matter which cannot be debated now, according to my Ruling.

Mr. McGOVERN

I am only asking the right hon. Gentleman a question which he has pretended time and again to answer but which he continues to evade. I am only asking him to say in the course of his speech where his party stand. For Heaven's sake, let him give us a clear statement.

The CHAIRMAN

The hon. Member is perfectly entitled to ask that question on a proper occasion, but I cannot allow questions to be asked and answered on a matter which is shut out from this Debate.

Mr. GREENWOOD

I do not wish to go beyond your Ruling—[Interruption.] If I have done so, I am sorry.

The CHAIRMAN

The right hon. Gentleman will forgive me, but it is quite the contrary. I was not suggesting that he had gone beyond my Ruling. What I said was that the question asked of him was one which I could not allow to be either asked or answered.

Mr. GREENWOOD

Then it is open to me to proceed from the point where I left off. I repeat what I was saying, namely, that 12 months of administration has proved that any means test administered under the existing organisation of society is bad, and ought to be opposed. It has been proved beyond doubt within the last 12 months that, in order to catch the odd cases to which the right hon. Gentleman refers, an enormous number of people have been sacrificed. So far as I am concerned, I would rather let the few through than that the majority should be sacrificed.

Mr. COVE

That means no means test.

Mr. GREENWOOD

That means no means test.

The CHAIRMAN

I must now warn the right hon. Gentleman that he is going beyond my Ruling.

Mr. GREENWOOD

I am afraid that hon. Members have led me on. This question, as the right hon. Gentleman made quite clear in his opening remarks, is one on which there is a fundamental difference between us. He raised the question at the beginning. Our answer to him is, first, that his concessions are virtually worthless; that large numbers of people, as a result of these so-called concessions, will be worse off; and that, even as regards this relatively small group of people, the old iniquitous principle of investigation into means by a Poor Law authority still continues. Had the right hon. Gentleman given us any real crumb of comfort, we should not have taken the step that we propose to take to-day; but we regard his concessions as empty, and, because of that, we shall be compelled to oppose them in the Division Lobby tonight.

Mr. BRIANT

The speech we have just heard leaves us in some doubt whether a means test administered by some other authority would meet the right hon. Gentleman's wishes. Some hon. Members opposite say rather seriously that in no conditions whatever should there be any inquiry by poor law or other authorities. Only a few days ago the Leader of the Opposition said he was against giving benefit to the individual unemployed man who had means of his own.

Mr. LANSBURY

I certainly said that but, if you are going to quote it, kindly quote the whole statement. It is understood in this House that Members treat each other in an honourable manner and no one has any right to draw one statement from the context. I said at Shore-ditch that, whilst I was still of that opinion, because of the fearful treatment of the poor people of this country I would fight to the uttermost of my power against any means test whatever in the conditions that we are living in.

Mr. BRIANT

The right hon. Gentleman accuses me of deliberately misleading the House. I have given the only quotation that I have. If I had any context modifying that, I would have given it, but I must repeat that the right hon. Gentleman stated that he was against giving benefit to the individual unemployed man who had means of his own. I want to know how he is to avoid giving that benefit unless there is some form of inquiry. That is the only point I make about that. I regret that I have seemed to mislead the Committee, but I do not see how without some inquiry the right hon. Gentleman could arrive at the decision that he said that he wished to arrive at. [Interruption.] I will not pursue it any further. It is quite unnecessary. As regards pensions, I feel some alarm at the very mean suggestion that has been made, and I agree with the right hon. Gentleman opposite. I can see no sanction whatever in this proposal for allowing a deduction of more than 50 per cent for a pension. If there is such a sanction, I wish someone on the Government Bench would point it out. The only sanction for a reduction of more than 50 per cent. occurs when a man applies for poor law relief for public assistance. Under this there is no such sanction whatever.

The Minister of Labour tried to persuade the Committee that the proposals with regard to savings were identical with those in the report and he said that a man who had only £49 would be exempt. I cannot quite agree. The words of the report are that account shall be taken of savings of £50 or more and a shilling per week shall be deducted for each complete £25 beyond £50. That is to say, using his own illustration that a man who is receiving just under £75 would not have anything deducted for this. If I am wrong, perhaps someone will correct me.

There is another point that I want to accentuate. It will be noticed that these provisions are mandatory as regards transitional payments but permissive for ordinary relief. Knowing something of some public assistance committees, I very much doubt whether they would make these deductions, and I am very much afraid it will mean that these men will not get this 50 per cent. deduction which is suggested and which is mandatory on those applying for transitional benefit. Why cannot it not be made mandatory in both cases? Further, the right hon. Gentleman is putting the public assistance committees in an immense difficulty. He is making them say that, if they make all these allowances, they have to raise more from the rates and the Government, as far as I understand, make no provision to meet the increase, which must come from the Poor Law authorities. That is putting a temptation in the way of local authorities to disregard altogether the deductions for pensions, for compensation and for the value of investments. I do not think it is fair to the local authorities at all. I do not think it is right that these matters should be fought out at the elections. One person will say he is in favour of deducting £50, another £100, and so on. Let the House come to a conclusion as to what is right and just and make it mandatory on public assistance bodies, at any rate until some further amendment of the law is carried out.

But I go still further. These proposals do not really meet the real dangers and the real grievance of the people. My experience is that the real grievance is not so much the question of capital, or compensation, or pensions, but the general attitude of public assistance committees. You may make all these deductions, and it will still be open to a public assistance committee to take into account nearly all the money from a daughter who is employed in an office and whose very dress is as much a part of her equipment as a carpenter's tools. I have a case in hand now where the average of the whole family, after rent and insurance are paid, is 5s. per week per head. That includes two men, one 23, and the other 19. Is it reasonable, is it fair to expect those men to have no pocket-money whatever out of their earnings Yet, if they have less than 5s. a head, obviously the family cannot live. I have been engaged in Poor Law work for 27 years and I am slow in criticising it. I know the difficulty of administering the law and I know how easy it is to find special cases which seem a hardship. I have in my possession the official correspondence with one of the largest public assistance committees in. London. I asked them why only so much was allowed, and the official reply is that they regard the family as not destitute. After rent is paid the figure works out at exactly 2s. 10d. per head per week. If a family in receipt of 2s. 10d. per head per week is not destitute, I fail to understand what destitution means. It is not enough to keep body and soul together. Anyone who knows how they live knows what happens. They have to pawn goods and obtain clothes and boots which they cannot pay for.

I am not giving these as extreme cases, I could multiply them by 50. The grievance is against the attitude of the authorities, and nothing like this will ever alter it. I want to be assured that any legislation that is undertaken in the future will grapple with much more than the question of pensions. It seems to me deplorable that a young man should be put in a position where he is left practically without any pocket money. It is more than lamentable, it is a danger to drive them down to such a low standard of life. I hold very strongly that, if a family has attained to a certain standard of life, there is no greater danger than to lower it. The full amount of transitional benefit is inadequate in many cases for a family to live on and they have to part with something. To use a simple illustration, if a man, by thrift, has acquired a, piano, it is a disaster if be has to part with it. He will never make another effort to improve the standard of his home. It is a simple thing, but it is by these simple things that one judges the standard of life. This, such as it is, is better than nothing. That is poor praise but it is all the praise that, it deserves.

5.0 p.m.

I regret that hon. Members opposite, with whom I agree in many of their criticisms, will keep on insisting upon the humiliation and degradation of applying to the Poor Law. I know, as they know, thousands of aged people in every sense as respectable as an unemployed man, and they have to apply. I know thousands who are not insured, and they have to apply. A widow's pension, if she gets one, is not sufficient and must be supplemented from the Poor Law. I do not want to make these people think they are degraded by going to the Poor Law. The Poor Law is intended for people for whom, through sickness or unemployment or from some other cause, it has become necessary to apply for public relief, not as a shame but as a moral right. I do not want it to be insisted upon so that you shall make these people shrink from going. I know these are revolutionary suggestions, but I hope that some Government, some day will be bold enough to place all forms of public assistance, whatever they are, under one Department and avoid distinctions as between different classes of people and different forms of assistance. As long as public assistance committees are laying down, as they are in some cases, a completely false standard of life which is not fit for any human being, it is not only a hardship to the particular family, but it means that the State in future will rue its action by reason of the demoralised families which will grow up and by reason of the physical deterioration which will affect the next generation. I hope that the Minister will not only exercise his powers but his great influence to see, if this system is continued—possibly it may be necessary to continue it—that at least it is adminis- tered with humanity and with an eye on the real needs and necessities of the people.

Mr. LEWIS

The right hon. Gentleman the Member for Wakefield (Mr. Greenwood) devoted a considerable part of his speech to expressing indignation, because, as he said, for the first time Unemployment Insurance is linked with the Poor Law. It was strange that he should put forward that case. Why is it that the Unemployment Insurance Fund is bankrupt to-day? It is precisely because the right hon. Gentleman and those who think with him have for a long time persisted in confusing Unemployment Insurance with Poor