UNEMPLOYMENT INSURANCE (EXPIRING ENACTMENTS) BILL.

§ The MINISTER of LABOUR (Sir Henry Betterton)

I beg to move, "That the Bill be now read a Second time."

The object of this Bill is to extend for a year the Unemployment Insurance Act of 1930 and Sections 1 and 2 of the No. 3 Act of 1931. The No. 3 Act of 1931 is what is usually known as the Anomalies Act. I ought to explain that the effect of extending the Act of 1930 is automatically to extend the Transitional Payments Prolongation Act of 1932 and also the Determination of Need Act, 1932, since the operation of both these last two Acts is limited by reference to the Act of 1930. The Determination of Need Act, 1932, is, as the House will remember, that which secures 50 per cent of disability pension and 50 per cent. of workmen's compensation and makes certain provisions with regard to the amount of savings which are to be taken into account.

Might I at once, for the convenience of the House, point out what will happen if either of the Amendments now on the Paper is carried or, which comes to the same thing, if the House refuses to give a Second Beading to the Bill which I am now moving? The first result will be that transitional payment to those persons who have not 30 contributions to their credit in the last two years automatically ceases at the end of this month, and these persons would, I have ascertained, amount, as far as one can judge, to about three-quarters of a million people. The second thing is that the statutory protection for 50 per cent. of disability pensions and workmen's compensation and for savings up to the amount prescribed would also cease. The third result would be that the Anomalies Act would lapse, and the protection against the evils which were described in such impressive terms by those who were responsible for introducing and passing through this House the Anomalies Act would cease to be effective and would come to an end.

Another result would be that the adult dependants benefit, which is now 8s. a 176 week, would automatically become 7S. a week, representing a loss of 1s. a week to them; and a still further result would be that the power of the insurance officer to disallow a claim would be revived. As those Members of the House who were in the House in 1930 may remember, one of the provisions of the Act of 1930 was that an insurance officer should not disallow a claim that was in doubt, but that it should automatically go to the court of referees. That power would, as I say, be revived. Another result would be that the automatic right of appeal to the Umpire when the court of referees is not unanimous would go. As the House may remember, the Act of 1930 provided, among other things, that where the court of referees was not unanimous with regard to a decision, there should be a right of appeal to the Umpire. The next result would be that the genuinely-seeking-work Clause, about which there has been so much controversy, would revive. I was responsible to a large extent for the administration of that particular formula, and I confess that it is not one which I want to see revived at all, but the effect of passing either of these Amendments and of throwing out the Bill would be that that Clause would be revived. The last result to which I need call attention is that the provision made in the Act of 1930 for approved courses for juveniles instruction would go.

The hon. Gentleman opposite who will move an Amendment which will have the effect of throwing out the Bill will no doubt explain his reasons for desiring any of these things to happen. Speaking for myself, I want them all to be retained, but, if he or any of his friends have other views, no doubt they will explain why they do not want them to be retained. I am the last person to say that the hon. Gentleman or any of his colleagues on the Opposition Benches have not a right to alter their minds if they want to do so, and I shall listen with a good deal of interest to the reasons which they may advance as to why they want, for instance, the Anomalies Act to go, because that Act, which it now appears they wish to repeal, was passed, in spite of great opposition from hon. Members below the Gangway, by the last Labour Government, and the effect of not passing this Bill would be that it would go.

177 I want to make it clear that the needs test was not imposed by any of the Acts with which we are concerned to-day. It was imposed by the Order-in-Council of October, 1931, and is not affected at all by anything which we may do to-day. Therefore, so far as the needs test is concerned, if we throw out this Bill, all that will happen is that those applicants who have not 30 contributions to their credit in the last two years will cease to get any transitional payments, and the needs test to which they will be subjected will be the test applied by the Poor Law authorities to whom they must go if they do not get transitional payments. The result will be, therefore, that the charge for these cases, numbering something like 750,000 persons, will become a local charge instead of a national charge, which I should have thought was the one thing which hon. Members opposite were anxious to avoid.

I have, I hope, clearly explained what would happen if this Bill were not passed. Before I return to one or two other matters, particularly the Anomalies Act, about which I want to say something, I will refer to Sub-section (2) of Clause 1, which the House will see is in italics. By that financial provision Parliament is asked to provide the amount which is authorised by the Act of 1930; in other words, an amount to provide transitional payments for those applicants who have not 30 contributions to their credit, and who, but for this Bill, would get no transitional payments at all after the 30th June. As stated in the Memorandum to the Bill, it is estimated that the amount for this payment will be £30,000,000 in a full year and £22,500,000 in the current year, the current year for this purpose being the period between June this year and the end of the financial year in March next.

May I remind the House of one or two figures. My Estimates, which are already before the House, provide for a sum of no less than £54,000,000 as a direct charge upon the Exchequer for insurance benefit and transitional payments. That amount is made up of the equal third's contribution of the Exchequer, which is estimated at £19,650,000, transitional payments £31,400,000, and the deficiency grant, £2,950,000. If we add that sum to the £22,500,000 which we shall require by this Bill, the resultant cost of the Bill, together with the amount which appears 178 in the Estimates, reaches the vast total of £76,500,000, which is a direct charge upon the Exchequer for unemployment. For the purposes of comparison, may I remind the House that six years ago, in the year 1928–29, the expenditure for insurance benefit and transitional payments amounted in the aggregate to £53,700,000, of which the Exchequer's share was £11,800,000. To-day, the expenditure is £115,800,000, of which the Exchequer's contribution is £76,500,000. I do not propose, therefore, in these circumstances, to argue to-day, because I do not think it relevant, the principle of the means test. I would say, however, that the Order-in-Council did not disentitle a single individual to assistance if it was shown that he was in need of assistance. The insurance scheme can only meet its ordinary obligations to unemployed persons, because no less than 40 per cent. of the insured persons never claim benefit at all.

I hope that in the course of this Debate we shall have it stated clearly by those who speak for the Opposition whether they do or do not defend the payment of relief in cases where no need can be established. In this connection, I am just going to say a word, and it will only be a word, about the recent Report I called for at the request of the Leader of the Liberal party and at the request of the Opposition on the administration of the Durham Commissioners. In my view that Report is a justification of my action in appointing the Commissioners and is a justification of their administration. I have examined the scales most carefully and I find that they compare favourably with those in neighbouring districts, and I am satisfied that the Commissioners are carrying out their duties both humanely and with a proper regard to their responsibilities.

Next I wish to say a word about the Anomalies Act because, as I have already mentioned, it is one of those Acts which lapse unless this Bill be passed. The House, therefore, is entitled to a justification of the Anomalies Act. It is not sufficient for me to say merely that it was passed by the Labour Government. I realise the onus which rests upon me of showing that, in our view, it is desirable that that Act should be continued. At the same time I hope it will be made clear during the Debate what is intended by the difference in the wording of the 179 Amendment which stands in the name of the official Opposition and the Amendment in the name of the hon. Member for Bridgeton (Mr. Maxton) and the hon. Member for Gorbals (Mr. Buchanan). The official Opposition Amendment refers to certain anomalies which have the effect of depriving many unemployed persons of the right to benefit. We should like to know what are the particular anomalies which they have in view. The other Amendment is much more explicit. Those hon. Gentlemen do not want to continue the Anomalies Act at all, and say so in so many words. They are always consistent in this; they are always consistent except in their support of hon. Gentlemen above the Gangway. I would like to know what is the difference in the minds of those two sets of hon. Members. I quite understand what the hon. Member for Bridgeton means, but I am not so certain what the official Opposition mean. If they intend the same thing I would, if I may respectfully do so, offer my congratulations to the hon. Member for Bridgeton upon the tremendous influence which he appears to have exercised upon the Leader of the official Opposition, because less than two years ago we sat up all night while the hon. Gentlemen below the Gangway opposed the Labour Government of the day, moving 35 or 36 Amendments and telling us exactly why they objected to the Anomalies Act.

But, as I have said, that is not sufficient or my purpose to-day. I have to justify the continuance of the Anomalies Act. That involves a reference to a little past history. The Anomalies Act is stated to be an Act for the amendment of unemployment insurance "with a view to the elimination of anomalies." This story has its origin in the first report of the Royal Commission on Unemployment Insurance, which, incidentally, the Labour party also appointed. Paragraph 104, on page 38 of that report deals with this question of anomalies in these words: The seriousness of these anomalies lies in:

1. (1) the unnecessary expenditure from public funds to which employers, workers and the State have contributed;
2. (2) their effect on the repute of the scheme;
180
3. (3) their encouragement of methods of industrial organisation which may be harmful to trade and employment in general."

In the next paragraph it goes on to say: The classes of claimants to which our attention has been particularly directed in this respect are as follows:

1. (a) intermittent, short-time, and casual workers,
2. (b) married women,
3. (c) seasonal workers."

In three successive paragraphs the report deals with these different classes of workers. In paragraph 109, dealing with intermittent workers, it says: We accordingly recommend that no claimant shall be treated as unemployed within the meaning of the Unemployment Insurance Acts, who habitually works for only two days or less in each week, and is unable to satisfy the statutory authorities that he is normally employed in regular insurable employment for the other working days of the week. Married women are dealt with in paragraph 119, where it says: Regard must, of course, be paid to the fact that many women work after marriage, especially in those districts and industries where they are customarily employed in large numbers. But we cannot avoid the conclusion that, under the present conditions, married women who have no wish to work have no difficulty in obtaining unemployment benefit, and we are satisfied on the evidence before us that there are many married women receiving benefit who have not since marriage worked in an insurable trade, and, in their existing circumstances, have no intention of doing so. In regard to seasonal workers the report says: In our view a worker who habitually obtains his (or her) living for the year, by work in a seasonal occupation for a part of the year, should not be deemed to be unemployed and qualified for benefit during that part of the year which is the off-season. We therefore recommend that a seasonal worker should be entitled to benefit in respect of unemployment occurring within the season subject to the general conditions applying to all claimants, but that during the off-season a claimant who, from his industrial record, appears to the Insurance Officer to be a seasonal worker, should not be entitled to benefit unless he can prove to the satisfaction of the Court of Referees"— On receiving that report the Labour Government proceeded to introduce a Bill. The then Minister of Labour, Miss Bondfield, said, in introducing the Bill: Hon. Members will see that there they sketch out"— 181 that is, the Royal Commission— in very broad outlines, the lines upon which they think these anomalies should be dealt with. The Government agree, in principle, with these recommendations, and the purpose of the Bill is to give substantial legislative effect to the recommendations contained on page 51 of the Report. That is the object which the Minister of Labour set out to attain, by the drafting and introduction of the Bill. Miss Bond-field then proceeded to deal with the three classes of persons to whom I have referred, namely, the people who work for a short time each week, the seasonal workers, and the married women. This is what she said with regard to the seasonal workers: There are certain classes of workers who do not, in fact, do anything except particular seasonal jobs, and they wait until next season comes round before they come into the employment field again. These, I submit, can be better dealt with by regulation than by any words in a Statute. With regard to those who work a few days a week, she said: It is obviously unfair that those people who do not wish to have a full week's work should be able to draw regularly four days' benefit from the Fund and earn two days' wages in the shops. With regard to the married women, she said: I think that it will have to be made clear that benefit is not a dowry on marriage on account of contributions paid; that it is not a source of income to enable a woman to be economically independent of her husband's earnings, or to supplement the poor earnings of her husband; that marriage does not create a special privilege to escape the normal obligations of a job; that benefit is only due to an unemployed married woman who is still in the industrial field, and will remain so in the same sense in which a man or a single woman remains."—[OFFICIAL REPORT, 8th July, 1931; cols. 2104–8, Vol. 254.] So, in each one of these three classes of case, she justified the proposals that she made to deal with them.

§ Mr. LOGAN

What did she say in regard to those cases of bona fide employed persons who lost their jobs because their firms closed down, and who were compulsorily turned into seasonal workers?

§ Sir H. BETTERTON

I have not that before me, but I will hand the volume of the OFFICIAL REPORT to the hon. Gentleman afterwards, so that he may find it for himself. Not only was it her view, but she was, of course, representing the 182 Government, and she was reinforced in what she said by a previous Minister of Labour, Mr. Thomas Shaw. He said: Let me recall to the House the genesis of this Bill. From every part of the House, without exception, there were complaints that people were drawing insurance benefit by fraud, or, at any rate—though 'fraud' was the word frequently used—were drawing them when they ought not to be drawing them. Those complaints did not come from one part of the House, but from all parts. In another place he said: The Government agreed in principle with the interim report that these were anomalies which ought to be removed. In a final passage, Mr. Shaw said: It is not true to say that the workers are not in favour of this Bill. There is no keener opponent of abuses in the world than the working classes. You cannot help the Unemployment Insurance scheme, you cannot help your own friends, by shutting your eyes to the fact that these anomalies exist."—[OFFICIAL REPORT, 8th July, 1931; cols. 2218 and 2228, Vol. 254.] Therefore, it is, I think, perfectly clear that in the view of those who were in office at that time, there were really serious abuses which they sought to remove and to rectify. Accordingly, they brought in their Bill. That Bill afterwards became the Act which I now wish to continue for another year. In Section 1, the Act says: It shall be the duty of the Minister, after consultation with the Advisory Committee constituted for the purposes of this Section, to make…regulations. Later on it says: Before making any regulations under this Section, the Minister shall submit a draft thereof to the Advisory Committee and that Committee shall forthwith proceed to take the draft into consideration, and shall as soon as may be make a report thereon to the Minister. When I was appointed Minister of Labour in the first National Government, in August or September, 1931, the Advisory Committee to which the Act refers—the Act had been passed in July, a few weeks before—had not been set up. I took immediate steps to do what this Act asked, and I set up an Advisory Committee. I took steps to obtain the personnel of the Advisory Committee, as prescribed by the Act itself, and, having done that, I submitted a draft, as the Act also said that I should, to the Advisory Committee. From them I received a unanimous report with regard to the regulations for married women; 183 there was no suggestion of alteration. The only suggestion in that case was that there was a close balance of argument, and they left me the choice between two alternatives. I chose the alternative which was recommended by the Royal Commission, and I am, in general, satisfied that the regulations are working in accordance with the Act. I have watched their working, and only quite recently, within the last two or three days, I received a report as to the working of them. In one or two respects I think that those regulations might be modified, and I am proposing—I have to submit the proposals to the Advisory Committee—to submit certain revised regulations dealing with two of the classes of persons, seasonal workers and married women. I shall get a report in due course from the Advisory Committee who will have considered the regulations which I am proposing to make.

I have no hesitation in asking the House to renew this legislation. I believe that it has removed the abuses which were referred to by the Royal Commission, by Miss Bondfield, by Mr. Shaw, and by many other Members of the Labour party, as will be seen by anybody who cares to look through the OFFICIAL REPORT. I believe that their anticipation of the efficacy of the Act has been justified. As I agree with their view, I propose now to ask the House to continue the Act for another year.

The Bill provides for the continuance, for a further period of a year, of the existing provisions as to unemployment insurance and transitional payments, which otherwise expire on 30th June. Without it, the whole system would be reduced to chaos, and we should have no power after 30th June to make transitional payments to a large number of the unemployed. No one regrets more than I do that I am not in a position today to submit comprehensive proposals dealing with the whole of this matter. That is a matter of very great regret.

§ Mr. MAXTON

Tell us why?

§ Sir H. BETTERTON

The reason is that the more one looks into this matter the more complex the problem appears. What we are determined to do, if we can, is to found a system which will stand the test of time. I attach great import- 184 ance to that point. This involves, of course, financial and administrative questions, which are all the more difficult owing to the size and the nature of the present unemployment. I would ask the House to consider with me some of the problems which they and I have to face, it has already been announced by the Minister of Health, in his speech in the House on the 12th April, that the Government propose to introduce this Session—and I may remind the House that it is unlikely that this Session will end in July—a Bill dealing on a national basis with the problem of assistance in respect of unemployment, and that it has been decided that the Government shall accept responsibility for assisting all the able-bodied unemployed who need assistance. That will involve an adjustment of the financial relations between the State and the local authorities.

In any scheme dealing with unemployment insurance, it is, in my view, fundamental that the scheme must be placed on a sound financial basis. The essence of an insurance scheme is that it is a contract between the worker and the scheme, by which the worker, in return for his payment of contributions, receives benefit as of right, subject to the fulfilment by him of certain conditions. The conception of a contractual policy can only be maintained if the finances of the scheme are on a sound basis. While conditions remain as they are, the unemployment insurance scheme, which is designed, as is well known, to be the first defence against unemployment, cannot hope to carry the whole burden of unemployment if it is to be maintained in a solvent and self-supporting condition.

Such devices as the granting of overdraft benefit under the name of un-covenanted benefit, extended benefit; or transitional benefit, have, as the House knows, been brought to an end. There will be a large number who are not entitled to benefit merely because they do not satisfy the contributions condition of the insurance scheme, and at present, as is well known, they receive transitional payments. For nearly two years the administration of the scheme has devolved upon local authorities, in accordance with the improvised legislation introduced in the autumn of 1931, and I am very glad to express my view, and the view of the Government, that we owe a debt of gratitude to the local authorities for the way 185 in which they have shouldered this heavy and difficult task. With very few exceptions it has been faithfully undertaken by the local authorities. But it is difficult, as a permanent arrangement, to have a system under which the Exchequer finds the whole of the money and the local authorities assess the need. Moreover, as I have often been reminded in this House, experience has shown that there is a number of local anomalies and variations in the administration of transitional payments, and one of the objects of any new scheme will be to secure a greater measure of uniformity. At the same time, it is important that the House should understand that this does not mean any abandonment of the principle that, whereas persons entitled to insurance benefit obtain it as a contractual right, those who are not entitled to benefit can only claim assistance if they show that they need it. Unless this distinction is maintained, the whole scheme of contributory unemployment insurance falls to the ground.

There is another important problem, which no doubt the House will consider, as I have been considering it most anxiously for several months past. That is whether it is really justifiable any longer to treat persons like agricultural labourers and uninsured railwaymen who need relief in a different manner from those obtaining relief who are in insured trades. There are numbers of workpeople outside the insurance scheme who normally work for wages and who look for work in the same field as insured workpeople, who register for employment at Employment Exchanges, and who are placed by those Exchanges. It would be in accordance with the announcement of the Minister of Health that a scheme of unemployment assistance according to need should cover those persons. In addition to the relief of need due to unemployment, it will be one of our primary objects to maintain so far as possible the employability of the unemployed, and, with this object, we shall continue and develop where possible suitable schemes of training and reconditioning. I am also considering whether we cannot make more satisfactory arrangements for dealing with boys and girls who become unemployed after leaving school. For the general policy of the system of assistance to unemployed industrial workers, the Minister of Labour will be responsible, 186 on behalf of the Government, to the House. I have endeavoured to explain my reasons for asking the House to give a Second Reading to the Bill, and I now beg to move.

§ Mr. LAWSON

I beg to move, to leave out from the word "That" to the end of the Question, and to add instead thereof the words: whilst realising the necessity for continuing certain temporary provisions in the Unemployment Insurance Acts, this House cannot assent to the Second Reading of a Bill which fails to remove the injustice inflicted toy the reductions in (benefits and the imposition of a means test, and continues in force provisions with regard to certain anomalies which have the effect of depriving many unemployed persons of their right to benefit. The right hon. Gentleman has explained to the House that this Bill really includes four Bills, each of which deserves very serious consideration in itself; but I think the House will have been mostly interested in what he said during the last few minutes of his speech, about the proposals of which he has just given us a kind of shadowy outline. I do not intend on this occasion to say anything about those proposals. In this, as in other matters, we must be cautious enough to wait and see exactly what is meant. But I am not so optimistic as to believe that the right hon. Gentleman's schemes are going to make the situation any better for the unemployed. One thing that he said did surprise me, and I really think we ought to know what was his meaning. The Minister of Health announced some weeks ago that the Government were going to take responsibility for the able-bodied unemployed. That announcement was welcomed with cheers in this House, and it was weclomed particularly by those who represent the depressed areas. It was taken as an indication that the Government were going to take financial responsibility for those able-bodied unemployed who are at present on the Poor Law, and that the depressed areas would be relieved to that extent. Now, however, the right hon. Gentleman says that there is to be an adjustment of the finance between the State and the local authorities. If that means that the local authorities are still going to bear either the whole or a part of the finance for these able-bodied unemployed, it simply means that the areas that most need 187 succour and relief are going to get either little relief or no relief at all. I hope that I have misunderstood the right hon. Gentleman, and that his statement this afternoon does not mean that what the Government said they were going to do is not in fact going to be done. The right hon. Gentleman this afternoon has given no indication at all to the House that there is going to be during the next 12 months any relief whatever from the very burdensome condition of things borne by the individual unemployed, by their families, and by the local authorities.

The right hon. Gentleman tells us that the scheme which has been put before the House takes time. The Government, with their majority and time at their disposal, have been in office for two years, and the net result of all their work is that the great mass of unemployed are in an infinitely worse position than ever before. There are want and misery on a scale never before known by the British working classes in the history of this country. The Parliamentary Secretary to the Ministry of Labour told us this afternoon that the needs test has meant a saving of £20,500,000 since the Government came into office. The right hon. Gentleman in December, 1932, estimated that the needs test was saving £15,000,000 a year. The Government's estimate originally was £10,000,000. We were told on 1st December that they were saving £15,000,000 a year, which means something like £30,000,000 in two years. There has been taken from the unemployed by way of reduction of benefit £12,500,000 a year by the 10 per cent. cut. That means that, on the Minister's own estimate on 1st December, the unemployed of this country have suffered a reduction during the last two years of £55,000,000.

It is time that we looked into the result of that kind of policy. The hon. Gentleman told us that, under the means test there were reduced payments in 5,000,000 cases, and that payment was refused in 994,000 cases; so that there have been reduced or refused payments in respect of something like 6,000,000 people. The unemployed number 2,600,000, according to the right hon. Gentleman's figures. I should think it is a moderate estimate to say that the total number affected is round about 9,000,000 to 10,000,000, that 188 is, about a quarter of the population of this country. There has been a reduction in the incomes of the poorest of the poor of £55,000,000 directly. The result has been that, not in labour circles, not in party circles, but among people of all parties, men and women in the churches and in all walks of life, there has been a great outcry against the operation of these cuts, and what is called, in a rather mild way, the operation of the needs test. What has been most striking has been some of the evidence coming from medical quarters as to the physical condition of the people. I wish that I could divest myself of my party traditions, and every other thing, in dealing with this question to-day. There is not a Member of this House in any party who does not know that the condition of great masses of our people is lamentable beyond words. It has become so had that it is attracting the attention of medical men. I have in my possession a recent copy of the "Lancet," in which reference is made to areas where there has been for long unemployment. Dr. Mackay, writing to the "Lancet" says: From impressions gained in the outpatient department of the Queen's Hospital for Children, I personally, have no doubt that the health of East End mothers is worse now than a year or two back.…Those of us who work in such hospitals are well aware that in times of stringency the mother is always the first to go short of the essentials of an adequate diet. Anyone who knows anything about public health knows, of course, that attention was drawn some months ago to a statement made by Dr. Smith, head of the Dispensary at Newcastle-on-Tyne. Dr. Smith said: The misery and distress among the sick poor of Newcastle is still appalling. Attention was drawn to that statement. He is at the head of a dispensary run by a committee who represent no parties but who represent just that good nature and fine feeling characteristic of the best type of our citizens. There was so much notice taken of it, that Dr. Smith and his assistants began to make an examination of the reasons for the condition of many of the mothers who came there to see them. They began to investigate the causes of those physical defects. They investigated the incomes of the people. I have a statement here regarding the examination of 230 cases, of whom 125 were persons living on less than 3s. a week 189 for food. I ask this House to consider that as one of the most serious facts ever placed before it. There are other facts in connection with the investigation. They are the logic of the means test. There is no doubt whatever that mothers, and also fathers, punish themselves to give the children food and clothes.

Attention was drawn to a statement by Dr. M'Gonigle, of Stockton-on-Tees—I see that the hon. Member for Stockton (Mr. Macmillan) is present. It was an appalling statement. Families had been taken out of an old slum area and put into new council houses. There were 700 people concerned. The death-rate was so astounding that they were compelled to investigate the causes. The death-rate in the riverside area, the old area, had actually gone down on the whole, but in the new area it had increased by about 8 per cent., and was much higher than the national rate. When they made an investigation, they discovered that the real cause of it was that the people had to pay something like 4s. more rent than they had paid in the older area, and they had therefore less to spend upon themselves. Who can justify cutting down the incomes of men and women who are so circumscribed, so limited in their income that a few shillings a week make all the difference in the world as to their standard of health?

The right hon. Gentleman says that there is a report just out, and that the House of Commons has no right to spend money unless it gets a report of the result of that spending. We hope to get a full and free opportunity to discuss that report in all its details. There were 74,000 cases dealt with in that report, and they got only 44 doubtful cases out of the 74,000. I think the House will agree that a proper report would mean that at least those who reported would give some indication of the condition of the other people, that they would take out some instances in order to show what really was prevailing. You read the 44 cases and you get a sort of impression that they are very wealthy in that part. Why, the best of them have not enough among them to buy the poorest knacker running at Ascot to-day, or to keep it. I think that the reporters, in order to give a fair report, should have taken out, at any rate, cases showing the real condition of the people in that area, and not the exceptional conditions of the hard saving, 190 thrifty men who are usually good Tories. The Labour party, if they had not given some benefit, would probably have been charged with making some discrimination against their opponents.

The right hon. Gentleman might have told us something else. He might have told the House that the chairman of this Commission who reported could not live on his salary of £l,200 a year, and that he had resigned. The right hon. Gentleman, or the Parliamentary Secretary, might tell the House why he resigned. One of their own kind, a Tory, gets £750 a year to work with him. There is another gentleman of the same type who gets £750 also. Three good Tories. Let the right hon. Gentleman appoint three Labour men to investigate the administration in any Tory district. When we appoint Labour men to posts in Durham it is said that we are giving pals jobs, but when good Tories appoint their own men, it is described as impartiality. I would ask the House to inquire into this type of case, which is an indication of the kind of thing going on.

There was a friend, a neighbour of mine, who served in the Dardanelles, and was wounded. It was thought he was permanently out of the War, but late in 1916 he was sent back to France, and served until 1918. I had a letter from his widow this morning. He got 8s. a week pension. An accumulation of colds, and all the rest of it, brought on phthisis, and in December he was dying. The county public assistance committee gave the family what is the standard. Because of his condition, the doctor gave the man an extra half-crown. The commissioners in January said the family was getting 2s. 9d. too much according to their scale, and they took 2s. 9d. off the eldest boy. The man dragged on. The new commissioner came in in May and said to the public assistance committee that the family was getting 6s. too much in addition to the 2s. 9d., and he said: "If you do not take that 6s. off, we will take 6s. off the eldest boy." The man has died since.

The commissioner, when he reported, should have given cases of that kind. I will give it to the Minister if he wishes it. The commissioner could have given cases by the dozen where brave men and women of the finest character and the finest calibre are condemned to live on 191 the mere offal that they can get hold of, on a standard of life which is unbelievable to the average Member of the House but which must be known to some who are familiar with these areas. I warn the House that, if they attempt to use those 44 cases as they have been used in the Press, to make believe that that is the standard of Durham, we have material at our disposal which we will unhesitatingly use. The fact remains that there are 74,000 cases in which people are living on a standard of life which no one under any conditions could justify.

I want to ask the right hon. Gentleman why he will not tell us how much this administration is costing. He knows, from the commissioner to the last unit, how many officials there are employed. He knows almost to a penny how much a year it is going to cost, but he will not tell the House. I venture to say that it is because he dare not. There are a dozen chief administrators who are costing £10,000 a year. If it costs a penny, it will cost £60,000 a year. The truth is that the right hon. Gentleman is spending £l to get Is., and he is making the House and the country believe that there is some sort of virtue in this kind of administration when in fact the only thing that they are doing is to cut the standards of individuals as well as to intimidate those who are administering the Poor Law. I have not been able to get the figures showing the effect of the administration of the needs test upon various localities, but the movement that has grown up during the past year among Members of all parties is sufficient testimony as to what is happening. I know that in Durham since the Government took office the increase in the number of cases dealt with has been about 3,000 a week, and the extra cost of administration has been about £4,000 a week. That is laying a burden on local authorities which they cannot possibly continue to carry.

The right hon. Gentleman said the Government were bringing the local authorities together and that by a certain arrangement they were placing some of this weight on the better-to-do areas. What has become of that arrangement? If the conference has broken down, what are the Government going to do about it? They have admitted by implication the lamentable position of the people in 192 those areas. It is not possible by any words to convey a description of the conditions under which local authorities work in those parts. What is going to happen in the next 12 months? Are these areas which have had an increasing unemployment problem to continue without any help at all? The unemployment figures may seem to be getting better, but in these areas which are asking for help they are getting worse. In the North of England the coal trade is in a state of collapse. They cannot go 12 months in face of a situation of this kind. What with the means test, the reduction of unemployment benefit, the growth of unemployment, and the savage operation of this new thing called "transitional payments" we on these benches cannot see that there is any risk whatever in voting for this Amendment.

I want to say something, too, about the not-genuinely-seeking-work Clause, it is true that that would be restored if the Bill was not passed, but it is also true that, if it was not passed, there would be demolished what is called the fourth condition for unemployment insurance, that is the condition in which it is declared that certain people are not normally insurable. The right hon. Gentleman told me that there were 253,000 eases in which men and women had been cast off the register altogether because of that condition. That is a serious fact. They are men and women, particularly men, of long-dated unemployment. They are middle-aged and elderly, and they do not come back again. They are the kind of people who go on to the Poor Law, and I do not think there is the slightest doubt that the increase in the Poor Law is in the main among men who have been declared not normally insurable. A man came to see me on Sunday morning. He was a very fine type. He is one of those who under the needs test are not getting transitional payments. He is concerned as to how long the little that he has will last. He is about 60 and is a good type of workman. He has been idle for three years. He gets no transitional payments because he has a certain amount saved up. He has been called to go before the court of referees. His main trouble is that, if he is turned down by the court of referees and declared to be not normally insurable, his name will be taken off the register. Not only has he to pay his own stamp for health insur- 193 ance, but he will have to put the employer's stamp on. When he has finished under these conditions his little savings will be gone, and there will be no future for him.

The right hon. Gentleman ought to give the House some explanation of the operation of the not-normally-insurable condition. The truth is that the law has stopped those sleuths who used to interrogate and harry men, but under the fourth condition the same thing is going on as far as the elderly men are concerned. If the not-genuinely-seeking-work Clause is the rule, it is high time that the right hon. Gentleman took steps to stop this interrogation and harrying of men of long-dated unemployment under the guise of the not-normally-insurable condition. It just goes to show that even the most innocent Clauses, under an Administration which means to cut down standards, can be used by Ministers if they wish it. That is exactly the effect of it. While the not-genuinely-seeking-work Clause is involved in the Measure, there is also the Clause which has taken the place of that not-genuinely-seeking-work Clause, and which is being worked in a devastating way among those people.

The right hon. Gentleman gave us a gentle dig or two about the Anomalies Act. We are willing to accept all our responsibilities in these matters, but he slid gently over the account of the regulations. He made regulations, and one regulation in particular, altering the whole intention and purpose of that Act. When he submitted the regulations to the Advisory Committee, they pointed out to him that one of the regulations would have the effect of disqualifying married women who lived in industrial areas and whose unemployment was due to industrial depression. To-day these women have been turned off by the thousand. The Advisory Committee pointed out that such regulation would not do, but the right hon. Gentleman took no notice and issued his regulation, the danger of which had been pointed out by the Advisory Committee. The result is that whole masses of women are being cleared out and are losing benefit. I do not suppose that even the opponents of the Act will say that there was the slightest intention that the matter should be applied in that direction. The Trades Union Congress 194 have written to the right hon. Gentleman and have sent deputations to see him, and they have pointed out repeatedly that he has diverted the whole purpose and intention of that Act. Although the Act is intended to catch a few people, its administration and purpose have been so diverted that we should not have the slightest doubt or hesitation in taking steps to abolish the existence of the Act.

I wish to speak upon another point which illustrates what the administration can do. The right hon. Gentleman was so moved by the protests throughout the country about the penalising of disabled soldiers that he brought before the House Measure to exclude 50 per cent. of their pension from being taken into calculation. I do not know what was his intention, but the wording of the Act says that 50 per cent. of the pension shall be excluded. That was a minimum. It did not mean that you could not exclude more than 50 per cent. That was my impression. I thought that that was the intention. I know that up and down the country there were public assistance committees whose conscience as to the war service of these men was so acute that they actually excluded the whole of the pension. But as a result of the operation of the Act the 50 per cent. has become the maximum. It is rigid, and the commissioners representing the Minister in Durham are most exacting in that respect. They never make it less, but they never make it more than 50 per cent.

The House will remember that the Act was applied also to Poor Law cases, that is, disabled men under the Poor Law. But in the case of the Poor Law, instead of being compulsory, it was permissive. It was permissive on the part of public assistance committees as to whether they should exclude part of the pension or not. I wonder if the Minister of Health can tell us how it comes to pass that public assistance committees in different parts of the country are actually refusing to take any notice of the Act. Disabled ex-soldiers who are on the Poor Law are not getting any benefit from the Act at all. I am told that in regard to public assistance committees in London the Act might as well not have been passed, and that they do not take any notice of it, but include the whole of the pension.

195 I asked a question of the Parliamentary Secretary a short time ago about a letter sent to the Durham Public Assistance Committee. The interpretation of the letter was to the effect that the committee must include the whole of the pension. When I asked the question I was unable to obtain an answer, but I hope that before the Debate finishes the right hon. Gentleman will give an answer on this matter, because I assure him that public assistance committees up and down the country are acting in such a manner that the Act might never have been passed. It is not that public assistance committees are ignoring it, but it is said that circulars are sent out by the Ministry of Health to the effect that they should not operate it.

§ The MINISTER of HEALTH (Sir Hilton Young)

Can the hon. Gentleman tell me to what circular he refers?

§ Mr. LAWSON

The circular which was sent to Durham about public assistance matters about a fortnight ago. I asked the Parliamentary Secretary a question about it, and he said that it had not been before the Committee yet and therefore he could not deal with the interpretation of the paragraph.

§ Sir H. YOUNG

I think that probably the hon. Member is referring to a letter which was sent to Durham and not to a circular.

§ Mr. LAWSON

Perhaps I was wrong in using the word "circular" rather than the word "letter." There is another matter which ought to receive the attention of the Minister. It is the question of reservist soldiers who receive pay. A reservist soldier has perhaps been out of the Army a year or two and receives an allowance every quarter. A young fellow recently came to see me. He had been unemployed for 12 months. He said, "I got a new suit on the strength of this money coming"—I think it was about £3 10s.—"but I should not have got it if I had not expected receiving the money. Now that a good deal of it is being stopped, I do not know how I shall be able to pay for the suit." This is a young man who used to be one of the doyens of the Conservative party, one of the outposts of Empire, and a man who can be called upon to-morrow if need be. It used to 196 be made the special privilege of the Conservative party to protect men of this description. The man receives an allowance and immediately half of it is collared by the public assistance committee. Is that the intention? Is it right under the administration of the right hon. Gentleman that men of this description should be penalised in this way? I cannot think that any Member of the House would justify that kind of interpretation of the needs test. I am afraid that it is only one of the cases which light up a great mass of injustices which operate under this method of dealing with the people at the present time.

I should have liked to ask the Government what they intend to do about the present situation. They will not sanction public works in order to provide employment, or approve of a reduction of hours. They have no policy at all. Never had a Government a greater opportunity. They have a majority of ten to one, and they have an overwhelming part of the Press on their side, and yet after two years of power the net result of their work has been to take £55,000,000 from the unemployed, to take, by means of the Anomalies and Unemployment Insurance Acts, unemployment benefit from 500,000 cases, and to put 250,000 people on to the Poor Law. The depressed areas are infinitely more depressed than ever, and the Government refuse to finance public works or to agree to a reduction of hours. There is not a grain of policy except the policy of the comfortable, arm-chair person whose only object is to increase the misery of the already miserable.

§ Mr. GRAHAM WHITE

The hon. Member for Chester-le-Street (Mr. Lawson) has told the House, with the eloquent sincerity with which he speaks, of the misfortunes of his constituents, fortified in this instance by medical testimony of the very serious hardships prevailing in the district which he represents. I can only speak of what comes within the range of my own knowledge, but I could, if I were so minded, give the House examples of a similar nature to those which he has quoted here this afternoon. My knowledge does not enable me to say how general or how far spread they are, but that they exist in my locality, as in his, there is no question whatsoever. They arise, I think, from 197 the fact that all sorts of claims and liabilities fall on individual families which it is impossible for any rigid system to take into account. I will instance one class of case. There are large numbers of people who have obtained their family goods on the hire purchase system. Under the Means Test these people are living in a state of nightmare. They have to look at the food bill with one eye and they have to look for the visit of the collector from the furniture dealer with the other. They have, so to speak, to put a loaf of bread into the scales week by week against the apprehension that they may have to surrender the furniture which is necessary for their existence. I mention that as an example of cases which do exist.

I understood the hon. Member to say that the lot of the working class was harder and worse to-day than it had been at any time in the history of this country. On reflection, I think he will admit that he went a little bit too far in that statement. If he will acquit me of any impertinence, I would say that if he looks at the report of the Poor Law Commission for 1834 he will see there a state of things—

§ Mr. ANEURIN BEVAN

You have to go back a hundred years.

§ Mr. WHITE

I mention that because it is the first thing that comes into my mind. If he will study that report he will see depicted there a state of things which would make him thankful that he is living even in the present time. I listened with great interest to the reason why he was going to vote for the Amendment, and I fail to see how under any of the difficulties which he mentioned the people would be advantaged if we carried the Amendment. He said that he did not see any risk in voting for the Amendment. I think he used the words, "I think there is no risk." Speaking as representative of an industrial area, I find it far too great a risk to vote for an Amendment which would throw the whole of the present scheme into chaos and which would actually make the lot of very many unfortunate people immediately a great deal harder. There was, however, one observation of the hon. Member with which I find myself in complete agreement, in regard to "genuinely seeking work." I was delighted to hear the Minister say that he 198 did not wish to see the "Genuinely-seeking-work" Clause upon the Statute Book again.

Every word that was used by the hon. Member for Chester-le-Street in regard to the present procedure is undoubtedly true, and I can see no reason for it in administration. It seems to me to be an administrative futility, for the reason that people are being disqualified in considerable numbers and are being transferred from transitional payment to the Poor Law, thereby aggravating the difficulties of the local authorities in the depressed areas. If we were in the course of framing a permanent, comprehensive scheme for dealing with these matters, it would be necessary to consider what safeguards might be necessary to see that all applicants for benefit were genuinely seeking work, but under present conditions when it is a fact that for every known job there are scores of applicants and that the very rumour of a job leads to a great concourse of workpeople, what is the point of sending unfortunate people of from 55 to 65 years of age round about, knowing full well that the errand is futile and has no other object than to wear out their bodies and to wear out their boots. To replace their boots in present circumstances is almost harder than finding a job.

From the point of view of administration, I would like my right hon. Friend to consider this matter, because we already trust the applicant for benefit on matters which are even more important than this particular aspect. We trust a man when he signs twice or three times a week and says that he has not been at work on the other days of the week. We do not question his word on that. We trust him when he gives us his industrial qualifications. We trust him when he gives us the numbers of his family and dependants. On all these matters we do not raise any question, and the small number of prosecutions show that the confidence is not in any degree misplaced. The present arrangement is detrimental not only to the individual but to the local authorities, and as a piece of administration it is futile. There is an unfortunate impression, I hope not widespread, that a man may be perfectly honest so long as he is employed, but if he has the misfortune to become unemployed his word is not as good as it previously was. That is a 199 reflection upon a very large body of very worthy people.

I was not convinced with the arguments of my right hon. Friend for the postponement of the major Measure which we had hoped to have before us ere this. It is clear that the establishment of a comprehensive scheme of help for the unemployed which would be acceptable to the nation and tolerable to the needy is urgently needed and is the most important domestic legislation that this Government is called upon to deal with, and none of the reasons for the delay are adequate. The Royal Commission reported last October, after most exhaustive inquiry in which they examined everybody who had any evidence of value to give, and it cannot be said that further delay is going to bring new-facts to light, nor can it be urged that the experience of the Measures we are discussing this afternoon, and which are to be continued, have not been in operation a sufficiently long time for us to learn the benefits and the disadvantages that can arise from them. I fail to see in the Government's programme any legislation of greater importance than that to which I have referred. We know that another great piece of legislation to which the House will have to devote itself before long, the Constitution of India Bill, cannot be brought in until next year.

Some of us have suffered considerable disappointment at the events which have taken place since the pledge was given by the Minister of Health on the 12th April. The Minister of Health, in response to very urgent appeals from all parts of the country on a purely nonparty basis, said that the Government had in view a short-term policy and a long-term policy for dealing with unemployment in the depressed areas. What has happened to the short-term policy nobody knows. Perhaps the Minister will throw some light on that subject. As to the long-term policy, we have had a somewhat sketchy indication this afternoon of what it is to be. The Minister of Health said it was the primary purpose to make the closest connection between Government help and the promoting of the physical and mental welfare of the unemployed. In the minds of those who heard that speech that was something that was imminent, but we find that we may have it before us sometime before 200 Christmas. All the matters under consideration this afternoon and the measures which are carried forward in this Bill will require the most careful consideration, and we shall certainly bring to bear on them the constructive criticism which our knowledge and experience may enable us to give in regard to them.

I listened with great interest to the statement of the Minister in regard to his future intentions. I listened with profound hope that he would give us some signs of approaching this matter from a new angle, and I was pleased to gather some crumbs of comfort in that direction. How much they may amount to time alone can reveal, but so long as we regard unemployment as simply a question of keeping the unemployed as cheaply as possible there is no solution possible. We have given too much attention to the problem from that particular angle and it is time we approached it in some different way. The problem is entirely different from the problem that confronted the pioneers of unemployment insurance. They set out to provide a stop gap and to provide relief and help during temporary periods of unemployment, but the whole condition of things is now altered. The increased dependence of nations on each other, the fact that no country can deal with its unemployed on its own, has altered the whole situation. The rapid growth of machinery and the intensification of its application at a time when consumption has not kept pace with production has produced a situation which raises the question whether unemployment is capable of being dealt with by insurance. That is a matter for argument and I do not propose to argue it now, nor do I hold that view, but it is merely an indication of how very serious and how completely changed the problem is from what it was 10 of 12 years ago.

I have indicated one matter on previous occasions, and it is relevant to mention it to-day, because we are continuing under these proposals arrangements for training youths. The Minister has stated, and I heard it with pleasure, that he proposes to do something very much more important in that line. This is the third time that I have mentioned this subject. I do not want to imitate the bellman in "The Hunting of the Snark," who thought that if he men- 201 tioned anything three times it was necessarily true, but if I mention a subject three times here I do so in the hope that hon. Members may consider that it is worthy of consideration. Having regard to the fact that the growth of machinery will make inevitable a very large increase in compulsory leisure, our policy must be to concentrate that leisure at both ends of the scale in regard to age upon those who will be able to benefit most from it, that is to say, those who are of the educational age from 14 to 18 and those between the ages of 55 and 65. In dealing with the latter class first I do not think that the great mass of those who have been employed for a great period of their industrial life and who have been the backbone of this scheme from its inception are at the present time getting anything like a square deal. When we consider the scheme in its final form we ought to endeavour to give these people a very much clearer run of benefit than they are getting to-day. It is very important that this matter should be linked up with the Old Age and Contributory Pensions schemes and there should not arise the difficulties and gaps which exist at the present time. From the financial point of view it would not be a very great strain.

With regard to the continuation of the training of juveniles there is no doubt that if the 1,900,000 juveniles could be taken off the labour market it would have a profound effect on the employment of vast numbers of able-bodied men in the age limits immediately above; the 880,000 young men in the prime of life, for whom no scheme of relief can be any possible compensation for loss of work. It is impossible to say how many of these men might be brought back into employment but it is not unreasonable to assume that 600,000 might get employment, and with the £28,000,000 which would thus be saved a great deal could be done towards training and education, not only for the benefit of the individual but for the benefit of the nation as a whole. I asked the Parliamentary Secretary to the Ministry of Labour whether any estimate had been formed of the amount of unemployment in juveniles which would arise in 1936–37, and he informed me that there would be a considerable increase in the numbers available for employment at those years, but that he could go no further than that. I am not able to 202 assert dogmatically the proposition, neither can the Parliamentary Secretary deny it, but I do say that unless there is an expansion in the amount of labour and employment available for juveniles in 1936–37 570,000 boys and girls will be out of work in those years, and that is a state of things which the House of Commons cannot contemplate. That is why I was glad to hear that the Minister of Labour proposes to do something big on this line.

§ Mr. COVE

You are optimistic.

§ Mr. WHITE

We are hopeful, at any rate, and if a spur is necessary in order to overcome any difficulties he will find that we are prepared to give him loyal support. In considering these problems from the financial point of view, as indeed we must, there is one aspect which is sometimes overlooked and that is the steadying influence of our system of unemployment insurance on the general economic position of the country. Between 1929 and 1931 there was a loss in wages of £131,000,000. That in itself is a serious cause of unemployment, because it means a loss in consumptive power. In America over a comparable period the loss was more catastrophic; it amounted to approximately 50 per cent. of the purchasing power of the workers in America. Certain charitable institutions, municipal bodies and others gave a certain amount of relief and doles to the unemployed, but it was a mere bagatelle in comparison to the amount of consuming power which was lost. In Germany the situation is somewhat better. There was a terrible fall in wages and purchasing power, but something like one-eighth of that loss was made good by payments to the unemployed. In this country the situation is quite different. We lost £131,000,000 in wages, but by increased payments of about £71,000,000 to the unemployed, we have made good over 50 per cent. of that loss. We pride ourselves, and quite rightly, that our industries, our works and factories, have been kept going better than in America or Germany, and those critics who look upon these payments as something in the nature of a loss fail to realise how much of our increased stability is due to the fact that we have been more generous in this matter than other countries of the world. Hon. Members on these benches propose to support the Bill, although I understand that some of them desire to 203 raise points on the Committee stage. Apart from that we shall give such support as we can to the Bill.

§ Captain FRASER

I hope the House will excuse me for returning to a matter upon which I have spoken several times already in this Parliament. I do not want to engage in any controversy on the general subject, because it is clear that no person who is not under the necessity of supporting a party campaign—I say that in no offensive spirit—can possibly be tempted to vote for the Amendment, because the result would be chaos. There is therefore no need for those who support the general policy of the Government to be concerned about the decision of to-day's Vote or to go into any controversy which might arise on the speech made by the representative of the Labour party this afternoon. He did not exaggerate the sad condition of a great many people who are unemployed, but the remedies which he implied would be put into force by his party would, I think, produce even worse results. The issue on this Vote is in no more doubt where this Government is concerned than any other substantial issue, because it still has the confidence of the country. Notwithstanding the results of any by-elections the country believes that the Government is pursuing a policy which does give us an opportunity of coming out of our present difficulties.

I want to deal with the case of the disabled soldier and his pension as it is affected by the administration of the means test. I do not say on behalf of the ex-service man, or of any other people, that there should be no means test. The means test, as applied to the disabled soldier, was not invented by the present Government, but it has meant that men receiving pensions going to the public assistance committee for additional relief are obliged to indicate their present means. I cannot see that there is anything wrong with that in principle. One of the Acts which is to be continued by this Bill, the Determination of Need Act, introduced a new principle. It was a principle of greats importance to the ex-service man, that when he went before the public assistance committee for relief, not for benefit or transitional payment, some part of his pension could be left out in computing the amount that 204 should be given. I am glad to know that this is to be continued under the present temporary legislation. That was a new principle, and while there are some who seek every opportunity to show that this Government have no concern for any ex-service man, or for any other men, they did give him this boon, which was an improvement from the point of view of establishing statutory recognition of the reason why a pension is paid.

A year ago the Government were asked to exclude from consideration under the means test the whole of the disability pension. Some said that and no more; but others, and I was one, did not go quite so far, because we realised that some of the disability pensions are of such a magnitude, relative to the allowances upon which some unfortunate people have to exist, that it would not be reasonable to ask that the whole of a substantial disability pension should be left out of account. I do not regret that this Measure does not include a provision to leave the whole of a disability pension out of account, but I regret very much that we have come to this time of the year and find no general scheme ready, no provision made, to give greater benefits to ex-service men receiving smaller pensions. Under the law a man who is entitled to 7s. 6d. a week national insurance benefit has that completely left out of account when he goes before the public assistance committee, but his neighbour, who may be an ex-service man, receiving 8s. a week in respect of one of the smaller disability pensions, has half of that taken into account.

I cannot see any justification whatever for that, and I repeat the request which I have already made, that the Minister of Labour will take the first opportunity of remedying this matter and that he will go a little further and remedy it up to a 16s. a week War pension. Beyond that it does not trouble me very much if some part of the pension is taken into account, because I do not see how, even in the case of a disability pension, you can expect it to be paid twice, once from national resources and then again from local resources. But where smaller disability pensions are paid I do not see why they should not be considered. If you give a man 8s. a week you do not expect him to live upon it, much less to feed his family. You are compensating him for his injury and the handicap it is 205 to him in getting a job, and you make him an allowance. In principle it is quite indefensible to allow the 7s. 6d. paid under the national health insurance to be left entirely out of account and insist upon half of the 8s. being taken into account. I ask the Government to relieve a good deal of legitimate anxiety not merely by saying that they will consider it, but by saying that smaller pensions up to 16s. will, in fact, be left out of account by order of the Government and not by discretion of the public assistance committee.

Perhaps the House will allow me to say something with regard to the observations of the hon. Member for Chester-le-Street (Mr. Lawson) on this particular subject. He referred to a friend of his who was receiving a reservist's pension. He introduced the subject immediately after a reference to the needs test, and no doubt an audience which was not aware of the distinction might have supposed that that was another case in which a cruel Government had taken into account a disabled soldier's pension. The hon. Member was, of course, referring to a reservist's pension, which is quite a separate matter. Anyone acquainted with the matter would have known that, but the general public would not have known it from the way in which the hon. Member put it. I am not defending the thing, but I wish to point out that there is a difference between a disability pension and a reservist's allowance.

Another point was this: The hon. Member said there were cases where the result of passing the examination under the needs test had been to cause reductions in the allowances made to ex-service men. I do not think that that is wholly untrue. I do know of cases where that has happened. It is almost inevitable, when you try to introduce uniformity, that it will in some cases lead to reductions and in other cases to increases. I do not think the House must be gravely concerned if that happens. If the uniformity is reasonable and if uniformity is desirable, we must be prepared to meet an occasional hard case in which the result of creating uniformity is to the disadvantage of a particular individual. But my impression is that the public assistance committees as a whole are interpreting that provision correctly and generously. I 206 think that generally they are giving more than the 50 per cent., especially on the small pensions.

The hon. Gentleman seemed to me to misunderstand the point of the difference between "taking into account" and making a payment. The law unquestionably says that half disability pension must be "taken into account." But that does not forbid the public assistance committee, having taken half into account, granting a greater allowance if there is greater need, which has the effect of leaving the whole out of account. The hon. Member should understand that, but he did not state his case clearly. I know of cases where the smaller pensions have been left wholly out of calculation, though they have been half taken into account to comply with the law. I believe that many public assistance committees are leaving these small persons wholly out of account so far as the need payment made to the individual is concerned. If that is true, the cost to the Treasury, or to the Ministry of Labour of making it. compulsory upon all to do that, can be very little. I made an estimate which I gave to the House some months ago, that to make a minimum of 16s., that is to say to proclaim that no pension of 16s. or less should be taken into account at all, would cost about £200,000. That is on the assumption that none of the public assistance committees is giving any of these cases more than they are strictly obliged to do under the law. I believe that many public assistance committees are doing much better than that. Therefore, the cost would be a great deal less than £200,000.

I listened with patience and with a desire to understand the Minister's reasons for bringing forward this temporary legislation. I can well understand that the solution of this whole problem is very difficult, and if in the end there is brought to this House a solution which is better than the present system, which gives people greater faith in the insurance system and in the determination and willingness of the Government to do whatever they can for the people with the resources available, I shall not have minded waiting a few months; but I must confess that I am disappointed that they have not been able to have this matter relating to the ex-service men rectified. It is a question on 207 which a great many of my friends in the House felt very strongly some months ago. I hope, therefore, that the Minister will consider the matter again and do something in that connection.

Finally, a word about the means test and the principle which I feel ought to underlie any insurance legislation. I regret that we have not got the matter before us now in a shape which would make detailed discussion of these proposals possible. I do not think we can leave out of account in any insurance scheme the guarantee which is given to the insured person, that under all and any possible conditions the fund into which he has paid will be solvent. I suggest that it is the right policy to pursue not to give out more than comes in, not to borrow under any circumstances, and to keep the fund solvent. Secondly, I would like to feel that what was paid out bore some relation to what was paid in by the individual. I think it is a little hard to convince the working man that a scheme is fair when he who has paid in for 10 or 12 years draws out exactly the same as he who has paid in for only a few weeks.

Thirdly, I would proclaim as clearly as possible—and here I do not yet despair of securing the assistance of Members of the Labour party—that some sort of means test is a necessary part of any scheme of public assistance. Without it you are heading straight for chaos, and in my judgment for bankruptcy. So far as my constituents or any ex-service men who look to me for advice and guidance are concerned, I believe I can say that what is more important to them than almost anything else in the world is that the State which pays them their pensions, which looks after them as generously as may be, should be solvent in order to be able to go on doing it.

§ Mr. A. BEVAN

The House always listens to the hon. and gallant Member with close attention and great respect, but I shall not be accused of exaggeration when I say that on this occasion it has been difficult to follow the line of reasoning that he has adopted. I have been trying to understand what it is that he has been asking the Government to do. The hon. and gallant Member rebuked my hon. Friend the Member for 208 Chester-le-Street (Mr. Lawson) who, he said, had misunderstood the case he was presenting, and the circumstances in which the Government gave public assistance committees the right to disregard 50 per cent. of compensation and 50 per cent. of disability pensions. Let me remind the hon. and gallant Member and the House of the circumstances in which the concession was made. The hon. and gallant Member has represented that the concession was due almost entirely to the generosity of the Government. As a matter of fact it was due to the difficult circumstances in which the Government found themselves as a consequence of having to make some concession in the case of transitional payments. On that occasion so much indignation had been aroused all over the country and in the House about the Government's direction to the public assistance committees in regard to the possession of savings and small property, that they were obliged to make a concession in that respect. They brought in a Bill which enabled public assistance committees, in respect of a small amount of savings and a small income from property, and compensation or disability pensions, to make allowances in calculating income.

Now the Government have had to admit that the position of a man who has never been able to pay into an insurance fund—the black-coated army and the agricultural worker, for instance—and who is now in receipt of public assistance, is not quite the same in respect of his disability pension as that of the man who has paid a contribution to the insurance fund and has exhausted his right to covenanted benefit. Therefore, if in the case of the recipient for transitional payment savings could be disregarded, and disability pension could be disregarded as to 50 per cent., it was obviously desirable and just that the man who had to rely only on public assistance should have the same claim. It was not due to the generosity of the Government. It was due to having to extend to recipients of public assistance the principle that they had already extended to almost the same category of persons in receipt of transitional payment. I simply dot the i's and cross the t's in pointing out that the Minister of Labour, finding himself in an embarrassed position, for the purpose of statutory consistency had to ex- 209 tend the same principle to the second category. But be having extended the principle statutorily, his right hon. Friend the Minister of Health has not gone the next step and seen that the benefit is actually conferred on the persons themselves. That is the difference.

There may be two men living side by side. One may be an ex-railway worker, and the other an ex-collier. The ex-collier may be in receipt of a disability pension or in receipt of something from savings. When he goes before the public assistance committee in their capacity as assessors for transitional payment, they can allow 50 per cent. of the disability pension and a certain amount of income from savings to be disregarded in calculating income. But this man's neighbour, who has never made a contribution to the Unemployment Insurance Fund, or the man who has exhausted his title to benefit on the basis of his contributions and is now in receipt of transitional payment, is in precisely the same position as far as his title to relief is concerned. He comes before the same committee and they take the whole of the savings and the whole of the pension into account. I would like the hon. and gallant Gentleman to realise that by putting these two persons statutorily in the same position we have not put them actually in the same position and we shall not do so unless we compel the public assistance committees to adopt that portion of the Act which is now not obligatory but voluntary.

§ Captain FRASER

I do not challenge the position as the hon. Member has outlined it but I think this position remains. Where the Government is spending its own money it has been more generous and where it is making rules and regulations for local authorities to spend their's, it has not been quite so free but has left it to the local authorities. I think the Government definitely has been more generous than some of the local authorities and that the hon. Member ought to address his complaint to them.

§ Mr. BEVAN

The hon. and gallant Gentleman misses the point. The ultimate statutory custodian of power in these matters is not the local authorities but the Minister of Health. He has been entrusted by the House with certain powers of interference with the public assistance authorities and on many occasions he has interfered. In West Ham, 210 Chester-le-Street and other cases he deposed the old guardians and put commissioners in their stead. The powers which the Minister of Health enjoys and which he exercised in those instances have been carried forward into existing legislation. The Minister has the power and has exercised it in numerous instances of pointing out to the public assistance authorities that they are too generous in their treatment of the poor. In fact, he has secured reductions in the scales of relief. My point is that if the Minister has the power to say that the amount is too much, he has also the power to say that it is too little, though in no circumstances that we know of has the Minister done so.

§ Mr. BEVAN

The Minister of Health has the power to say it is too little. He has the power of interfering with the public assistance authorities to declare that they are not treating recipients of Poor Law relief in a humane and just manner. It is quite wrong to suggest that he has no power. I do not know whether the hon. Gentleman opposite has had any experience of public administration but I have been and still am a member of a local authority and I am sure that if the representative of the Ministry of Health went down to my public assistance authority and said "In my judgment you are not providing adequate assistance for this or that person" the local authority would take those representations into account. But he never makes such representations. The hon. and gallant Gentleman the Member for North St. Pancras (Captain Fraser) said that this was a matter for the local authorities and he rebuked us for putting forward purely party considerations. I do not think I misunderstood him. He said he could not understand anybody putting on the Order Paper a Motion of the kind that we have put down except for party purposes.

§ Captain FRASER

With all respect I said I could not understand anyone voting for it. That is different.

§ Mr. BEVAN

The hon. and gallant Gentleman must not now try to ride away upon a plea of that sort. He said he could not understand us voting for a proposal of this kind because of its 211 possible effect on the position of the unemployed. But he knows very well that if the House voted for the Amendment and against the Bill that would be an instruction to the Government to proceed immediately to deal with unemployment in a more humane way. It is a Parliamentary quibble of the most trivial character to suggest that if we carried the Amendment we would be injuring the unemployed or doing anything but instructing the Government in the way I have indicated. Any Member of Parliament accustomed to the procedure of this House and to the various methods of placing the Opposition in a difficult position knows that we sometimes have to vote against a thing which is superficially good in order to get something else which is really better. That is the position in which the House finds itself this evening. If we are to be rebuked for taking up a party position I would remind the hon. and gallant Gentleman as I have done before that the places where ex-service men are worst treated in Great Britain, are places where the public assistance authorities are in the hands of Conservative majorities and where they have more resources at their disposal than the authorities in the distressed areas which are usually controlled by Labour majorities. If he wants to do his duty by the ex-service men, let him ask the headquarters of his party to bring pressure to bear upon Conservative members of public assistance committees in London and elsewhere which do treat ex-service men in a callous and indefensible manner. It is no use coming to this House and attempting to conceal facts which are known to many of us who are or have been engaged in the day-to-day administration of Public Assistance Committees.

There is another aspect of the matter to which I would direct attention. I would remind the House of the discussion on the recent Vote of Censure. We were rebuked on that occasion, too, for putting down a Vote of Censure against the Government and making no provision for the maintenance of the able-bodied poor as a national charge. The Minister of Health on that occasion made a speech which was a model of lucidity and close reasoning, and the House were satisfied, particularly the Liberal party. The Liberal party were so pleased at being 212 able to vote again with the Government that they accepted the statement of the Minister to the full that the Government had now accepted the principle of making the maintenance of all able-bodied poor a national charge. Some of us reminded the Liberals that in their desire again to run away from a position which they had taken up, they misunderstood the Government's proposals. The Government, we pointed out, intended to bring forward schemes to readjust the finances of the local authorities in relation to grants from the State and, after that readjustment, to make the maintenance of the able-bodied poor a charge upon national funds which would then be augmented by contributions from local funds.

That was the position taken by the Minister of Health. Now the Liberals are saying that the Government is not carrying out its promise. The Government is carrying out its promise all right. It never intended to take the whole burden of maintaining the able-bodied poor off the shoulders of the local authorities. It has never in my hearing in this House promised to do so, and it is not good enough for the Liberals who ran away from the Vote of Censure to say now that the Government is not carrying out its promise. The Minister of Health said—an extraordinary proposition—that he would consult the local authorities and try to obtain their consent to a scheme under which the better-off authorities would make a contribution to a fund out of which the State hoped to make additional grants to distressed areas to assist them to maintain their own able-bodied poor. That was the position taken by the Government, and everybody knew at the time that the Minister was adopting a procedure which was almost certain to end in failure because the better off local authorities could not be expected to agree to such a proposition.

I admit that the Minister of Health is not helpless if they refuse to agree. He has the power to disregard the observations of the better-off authorities, but the method that the Minister is adopting organises against him and against the distressed areas all the more prosperous authorities and makes his task much more difficult. I thought the Minister was anxious to deal with this problem expeditiously. He ought to do so because it is a short-term policy that 213 we are now discussing—the policy of immediate relief—and the assumption was that relief would be given to the distressed areas before the Summer Recess. We are now at the middle of June, and the Minister of Health is still engaged in negotiations with recalcitrant local authorities. The local authorities in more prosperous areas tell him, as indeed they have every right to, that in the South and South-East of England where economic developments are taking place, authorities must necessarily make provision for expansion of local services in anticipation of the migration of industrial populations and cannot be expected, with those additional burdens, to make any contribution to the distressed areas. But the Minister of Health is bound to go on with the negotiations because the Chancellor of the Exchequer in the Budget did not provide any funds at all for this purpose.

We are left with this position then, that the difficulties of the distressed areas are continually growing. Local authorities in those areas are finding it increasingly difficult to carry on the services which are obligatory and the Minister of Health is engaged in futile negotiations with local authorities who ultimately will not be able to come to any agreement. If the Minister of Health is to speak this evening we are entitled to learn from him what stage these negotiations have reached. Does he see any prospect of being able to make proposals to the House before the Summer Recess? If so, will he indicate to the House exactly when he thinks he will be able to do so. If he is not able to do so, in what way is the Government going to implement the promise made in the course of the recent Debate and what proposals do they intend to make to relieve distressed areas of the burdens which have accumulated?

I would remind the House that whereas unemployment is decreasing in certain parts of Great Britain it is unfortunately on the increase in the distressed areas, in the areas where the iron and steel, coal mining and shipbuilding industries are concentrated. It is precisely in those areas that the difficulties have accumulated and we are entitled to ask what relief those areas can expect from the Government, because the situation is becoming almost unbearable in many places. The public assistance rate in 214 Glamorgan is 8s. 8d. in the £ and in Monmouthshire 6s. 9d. in the £. In some of our distressed areas it is higher than the total rate in some of the other areas. We are surely entitled to ask the Minister what his proposals are to deal with this difficult set of circumstances.

Some regret has been expressed because the Minister of Labour is not in a position to bring forward his permanent scheme. He said that after all it is a most complicated matter. It certainly is, because the Minister is not in a position to form a judgment about the volume of unemployment with which he has to deal. The Government are able to form no estimate at all as to the economic situation. It is impossible for the right hon. Gentleman, with whom I sympathise, to provide an unemployment insurance scheme without any reliable estimate of the unemployment situation with which he is going to be faced. That has been the difficulty all the time. Scheme after scheme has been produced, which has had the superficial features of permanency, and the scheme has always been unbalanced by an economic development for which no one has made any provision. I cannot, therefore, feel sorry that such a scheme has not been brought forward, for you cannot expect to get a scheme of unemployment insurance until you have something like a stable economic situation, and that is quite impossible, in the judgment of this party, within the limits of the existing social system. Those who are asking for a permanent unemployment insurance scheme are asking for something that it is impossible for existing society to give.

I am also not very sorry for another reason. We have been told—and many of us regard the statement as ominous—that under any permanent scheme the administration of unemployment insurance benefit is to be entrusted wholly to The Employment Exchanges and to commissioners in various parts of the country. If what is being done in Durham is any indication of what is to happen all over the country when the permanent scheme comes into operation, I hope it will be indefinitely postponed. I have always favoured the maintenance of the unemployed being made a national charge, but I should be the very last person to be pleased about its being taken out of the hands of the public assistance commit- 215 tees if it is to be entrusted to commissioners who will behave like these people in Durham. We, on these benches, support a national scheme for the maintenance of the unemployed, but it must be a scheme for the adequate maintenance of the unemployed. It must not be thought that the party to which I have the honour to belong support a national insurance scheme under which the whole of the unemployed will be made a national charge, if that scheme is to be administered in anything like the way in which it is now being administered by commissioners in various parts of the country.

If the right hon. Gentleman has any such intention in mind, he had better postpone it, because the stability to which the spokesman of the Liberal party has referred would be gravely upset if South Wales, Durham, and Scotland were simultaneously treated as Durham is being treated now. The only reason why the right hon. Gentleman has ever got away with it is because Durham is on its own. The only reason why he was ever able to get away with it when Chester-le-Street, West Ham, and Bedwellty were so treated was because they were comparatively isolated, but if the treatment of the unemployed is to be uniformly, over the country, what it is now in Durham, the right hon. Gentleman had better postpone his scheme, because he will not get stability in circumstances of that kind. If such administration is to be universal, many of us will not be spending our time at all in the House of Commons; we will be spending it in the constituencies, organising lynching parties against the commissioners. Hon. Members may smile, but there is a limit to which men can be driven.

In my own district at the moment the full effects of the Government's legislation are being warded off from the unemployed by the administration of a Socialist public assistance committee. The Government are being protected from the full consequences of their policy by their political opponents, but if that cushion is removed, and if the unemployed are fully exposed to the attacks of the commissioners and to the methods of commission administration, and if you say that those commissioners shall have full power in their own district to lay down scales of relief, there will be 216 nothing left for an unemployed man, who no longer will be able to express himself electorally at the ballot box, except to take direct action against the source of his trouble, the local commissioners. We should be doing less than our duty if we exposed the unemployed to that sort of behaviour on the part of the commissioners without attempting to protect them.

I have seen this thing develop in my district before, and there were many ugly scenes as a consequence of it. I want to point out to hon. Members here that men will not indefinitely see their children starving without making some effort to protect them. It is true—it is not sentimentality—but it is awfully difficult in this House to try to bring home to Members something of the state of affairs that exists in the country. They are so accustomed to dealing with statistics and with abstract categories that they fail to see the human reality that lies behind those categories, and hon. Members of this House, whenever attempts are made to bring to their imagination the circumstances that exist in the provinces, are apt to smile. If, therefore, we are unable to influence their conduct by any speeches that we can make here, we shall have to try to influence their behaviour in some other way. We are helpless except to do it in that way, and I want to try to convince hon. Members that the legislation which took away £55,000,000 from the unemployed has inflicted grievous physical hardship upon large numbers of people, that children in working class homes in Great Britain are growing up dwarfed and stunted and under-nourished as a consequence of this legislation, that in my district alone you have school children inspected by the medical officers of health who declare that they are lighter and shorter as a consequence of under-nourishment. Hon. Members cannot face those facts with equanimity.

We are discussing this matter in the House of Commons, and the World Economic Conference is discussing the same matter not far away. The World Economic Conference is discussing unemployment on the assumption that unemployment is the responsibility of society, but this House is discussing unemployment on the assumption that unemployment is the responsibility of the 217 unemployed individual. There is no consistency at all between those two positions. The unemployed man is being penalised because he is unemployed. If the House of Commons legislated consistently with the King's speech yesterday, it would be paying higher rates of benefit for those unemployed the longest, not higher rates to those idle for a few weeks only. Really cur attitude towards this matter must start from some principle. You may regard unemployment as the responsibility of the individual or of the State. This party regard it as the responsibility of the State, and therefore they regard it as brutal and unjust to punish an individual for something for which he himself has no responsibility.

The problem has fundamentally changed. It was possible in the nineteenth century to bring sufficient pressure to bear on an idle workman to drive him to find employment. If he could not find it in this country, he could find it in Caanda, America, Australia, or New Zealand, but nowadays he cannot go anywhere. He cannot become a pioneer. There is no free land for him, and he is not even adaptable, owing to the modern machine production. Nowadays you take a boy from school and put him in a workshop. You can have division of labour only by specialisation, and you make every individual into a mechanic, an engineer, a miner, a textile worker, or something of that kind. You make him a cog in a machine. If there are surplus engineers, it is not possible for that man to convert himself into a pattern maker, or a collier, or a textile worker. The very character of the modern industrial process upon which our capacity to produce wealth is based makes for the helplessness of the individual in face of social circumstances. It is not, therefore, intelligent, it is not scientific, to act as though unemployment is the responsibility of the individual, who can neither run away from his home and find work elsewhere nor make himself into anything other than the specialist which the industrial process has made of him.

Therefore, if we are going to legislate intelligently, our legislation must be based upon the assumption that unemployment is the responsibility of the State, not of the individual. The House of Commons cannot assume responsibility for the maintenance of the unemployed 218 unless it assumes responsibility for employment. The reason why you cannot escape from this contradiction is that you are bound to punish the individual, stupidly, mercilessly, for something over which he has no control because you will not take the next logical step, and it is mealy-mouthed sentimentalism for Members of the Liberal party to get up and talk about unemployment being treated in a new way, unless they will take the next step and say that if the State is going to assume responsibility for unemployment, it must assume responsibility for employment; and if it assumes responsibility for employment, Liberals will have to become Socialists. If we are going to organise, if we are going to have intelligent unemployment legislation, we shall have to have intelligent employment legislation, and the House of Commons will have to assume the responsibility of directing the economic activities of the nation.

It is nonsense in the extreme for Members to argue as though we can get out of this difficulty within the limit of the existing system, and that is why, whenever I listen to unemployment insurance Debates, I feel as though we are discussing the whole matter in an air of unreality. Until you can bring on to the Floor of the House of Commons economic plans, intelligently and scientifically considered, for the organisation of the work of society, this House must always be talking nonsense when it discusses unemployment as a social problem, and because you refuse to accept responsibility for employment, you are driven inevitably to make it the responsibility of the individual man. Legislation of this sort can be defended on one ground, and on one ground only, and that is that British men and women have not yet found it intolerable.

The hon. Member w