(c) crown copyright Catalogue Reference:CAB/24/165 Image Reference:0004 (THIS DOCUMENT IS THE PROPERTY OP HIS BRITANNIC MAJESTY'S GOVERNMENT) I SJLiLJLIL " CAB """ " C P o 176 ( 2 4 ) . \ / 1 I J J T TOEMPTiOYMMI INSURANCE COMMITTEE. INTERIM REPORT. lc At the request of following t h e Prime M i n i s t e r Committee have examined tho r e l a t i v e t o Unemployment t o the C a b i n e t by the M i n i s t e r 169 of The M i n i s t e r o f Labour of (24) A (In the the Exchequer, of the Board o f The M i n i s t e r o f ciroulated Chair) or, in his Treasury, Trade t Health, The S e c r e t a r y f o r The P r e s i d e n t in labour. absence The S e c r e t a r y t o the The P r e s i d e n t proposals Insurance c o n t a i n e d Memoranda CcP. 1 6 9 ( 2 4 ) ana C P . The C h a n c e l l o r the of Scotland, the Board o f Education, The Lord A d v o c a t e . After careful proposals contained to, consideration of the v a r i o u s i n t h e Memoranda above the Committee submit t h e f o l l o w i n g and recommendations t o the referred suggestions Cabinet. SCOPE OP PROPOSED 2, As t h e Cabinet a r e a w a r e , t h e passage i n t o LEGISLATION. o f an Unemployment Insurance B i l l i s necessary i f on a v e r y e a r l y l a r g e numbers o f unemployed a r e not t o be d e p r i v e d A p r i l 1924 onwards. It of b e n e f i t possible to confine even i f from t h e middle it were date persons i s s t r o n g l y urged t h a t would be most u n d e s i r a b l e law of it politically the p r o p o s a l s o f t h e Government t o a s t o p gap measure, a b o l i s h i n g the "gap" ( e x t e n d i n g i n extreme oases t o as much as 26 w e e k s ) , which w i l l i n t h e , a b s e n c e o f l e g i s l a t i o n commence i n t h e middle of A p r i l n e x t , and t h a t not i m p o s s i b l e , i t irould be most d i f f i c u l t , , t o pass two Unemployment Insurance i n ' t h e remainder o f the p r e s e n t S e s s i o n , remaining p r o p o s a l s o f t h e M i n i s t e r On ' the o t h e r hand i t of Sealing the Labour. has been p o i n t e d out t o Committee t h a t having r e g a r d t o t h e s m a l l amount Parliamentary Actuary w i l l report time a v a i l a b l e , the f a c t Bills one B i l l w i t h t h e coming " g a p " and t h e o t h e r d e a l i n g with 3. if that the the of Government r e q u i r e p o s s i b l y a month t o examine and on t h e a c t u a r i a l a s p e c t s o f r e a s o n a b l e t i m e must be p r o v i d e d the p r o p o s a l s , for the d r a f t i n g \ that of the measure and t h a t t h e p r o p o s a l s t h e m s e l v e s a r e i n t h e main of a h i g h l y c o n t r o v e r s i a l character, i t w i l l prove i m p r a c t i c a b l e t o s e c u r e t h e passage i n t o law o f a quite single comprehensive B i l l c o v e r i n g the v a r i o u s c o n t e n t i o u s of the M i n i s t e r 4. proposals o f Labour, by the m i d d l e o f next month. I t has a c c o r d i n g l y been s u g g e s t e d t h a t two should b e prepared and submitted simultaneously; - " Bills r to Parliament - one d e a l i n g w i t h t h e coming " g a p " and the other w i t h remaining p r o p o s a l s , and t h a t h a v i n g r e g a r d t o o t h e r the claims o f t h e Government on p a r l i a m e n t a r y time a f t e r t h e B a s t e r Recess i t would be w i s e t o make p r o v i s i o n i n t h e B i l l w i t h the " g a p " f o r a p e r i o d 5. o f not l e s s than s i x months. The Committee reoommend t o t h e Cabinet (i) dealing ­ That t h e M i n i s t e r o f Labour should be a u t h o r i s e d to p r o c e e d as s p e e d i l y as p o s s i b l e w i t h t h e p r e p a r a t i o n o f a comprehensive Unemployment I n s u r a n c e B i l l , c o v e r i n g the whole o f h i s p r o p o s a l s as approved by the C a b i n e t ; (ii) BIODS FOB. ilCH UNEM­ bOYMEHT JJJEFrT iOULD BS iYaBLE. 6. hi that e v e r y e f f o r t should he made t o . e x p e d i t e the i n t r o d u c t i o n i n and the passage of the B i l l through P a r l i a m e n t and t h a t should i t subsequently t r a n s p i r e t h a t t h e r e i s no p o s s i b i l i t y of s e c u r i n g the passage i n t o l a w of t h e comprehensive B i l l b e f o r e t h e m i d d l e . o f A p r i l , 1924. t h e C a b i n e t should c o n s i d e r t h e a d v i s a b i l i t y of i n t r o d u c i n g a s e p a r a t e B i l l d e a l i n g e x c l u s i v e l y w i t h t h e coming "gap". The Committee c o n c u r . w i t h in paragraph .4 of t h e M i n i s t e r CP. the v i e w s r of.devising a the e x i s t i n g &t'bi­ (on t h e number of weeks of b e n e f i t t o be scheme f o r p a y i n g b e n e f i t without drawn as a maximum d u r i n g a p e r i o d of 12 months) unemployed workers b e l o n g i n g to the i n s u r e d so l o n g as t h e y a r e c a p a b l e of w o r k , for ­ of L a b o u r s Memorandum 1 3 9 ( 2 4 ) as t o t h e d e s i r a b i l i t y trary,limit expressed s e e k i n g work and unable t o o b t a i n i t . have a l r e a d y approved t h e p r i n c i p l e of . Uncovenanted B e n e f i t " n to trades genuinely The Cabinet of t h e abolition and the Committee now recommend:That t h e M i n i s t e r of l a b o u r should be authorised to include in' his B i l l p r o v i s i o n s f o r s e c u r i n g ' p a y m e n t of B e n e f i t continuously without a r b i t r a r y l i m i t s t o genuine w o r k e r s so l o n g as t h e y remain unemployed i n t h e manner i n d i c a t e d i n d e t a i l i n t h e Appendix t o h i s Memorandum C . P . . 1 6 9 ( 2 4 ) . I:3S OP 7. 35FIT. A s t h e Cabinet a r e aware t h e e x i s t i n g r a t e s of b e n e f i t a r e as . Men 15/-. Women 12/­ Boy (16-18) .. G i r l . (16-18) follows:For w i f e ( c r i n v a l i d husband) Basic rate. 5/­ 7/6d. - weekly For each Young c h i l d 1/- PUBLIC RECORD OFFICE Reference T H E FOLLOWING FOLIOS ARE BLANK A N D H A V E N O T BEEN COPIED hit 8. W h i l e tho Committee concur g e n e r a l l y w i t h the proposals Rates o f of tho M i n i s t e r of Labour f o r Benefit Increasing as s e t out i n p a r a g r a p h 10 o f his Memorandum C P . . 1 6 9 ( 2 4 ) , they must warn the Cabinet the probable r e - a c t i o n s in the Rates w i l l which t h e . c o n t e m p l a t e d have on N a t i o n a l H e a l t h the Committee recommend t o the of increase Insurance, Cabinet:- That the M i n i s t e r o f Labour should be a u t h o r i s e d t o p r o v i d e i n h i s proposed B i l l t h a t the w e e k l y r a t e s o f b e n e f i t f o r men and women should be i n c r e a s e d t o 18/- and 15/- r e s p e c t i v e l y and t h e r a t e f o r each c h i l d to 2 / - ; the 5/- f o r a w i f e remaining u n a f f e c t e d . SQUER RIBDTIOrJ. 9. In paragraph 17 o f h i s Memorandum C P . 169(24) the M i n i s t e r o f Labour- recommends t h a t power should be taken i n the B i l l to modify t h e e x i s t i n g arrangements (under which the Exchequer a t p r e s e n t bears one of Insurance Scheme, the t o t a l cost o f t h e Unemployment which p r o p o r t i o n w i l l , again s o l v e n t , to i n c r e a s e fourth when the. Unemployment Fund i s be reduced t o o n e - f i f t h ( w h i l e the Fund- i s o f the. w h o l e ) insolvent) so as the Exchequer c o n t r i b u t i o n from 6f-d. t o 9jjfd. and t o p r o v i d e , when solvency I s reached, f o r payment by the employer, worker and t h e Exchequer of e q u a l c o n t r i b u t i o n s which, in o t h e r words, w i l l solvency i s a t t a i n e d ) , result the of 6d. in a n . i n c r e a s e , (when o f t h e Exchequer c o n t r i b u t i o n from 3d. t o 6d. 10. The Committee are Informed by the C h a n c e l l o r o f Exchequer t h a t on the i n f o r m a t i o n b e f o r e him the Unemploy­ ment Insurance Fund, ought t o b e a r and i s b e a r i n g t h e new charges which i t capable i s proposed t o the Fund w i t h o u t an i n c r e a s e d Exchequer Owing t o the f a l l the of lay upon contribution. i n the number o f unemployed the debt on the Fund in b e i n g r a p i d l y reduced. . existing F o r example, 475. a decrease of 100,000 i n t h e Unemployment means a r e d u c t i o n liability figures of £5,000,000 p e r annum on the on the Fund, and, g i v e n a continuous decline i n the Unemployment f i g u r e s a t the rate i t seems not present improbable t h a t the p r e s e n t of the Fund t o the Exchequer ( £ 1 1 , 0 0 0 , a ) 0 ) may be d i s c h a r g e d w i t h i n the next 18 months, circumstances any p r o p o s a l liability In these t o i n c r e a s e the Exchequer, c o n t r i b u t i o n a t t h e moment would, be d i f f i c u l t justify and would c e r t a i n l y be h i g h l y to contentious in Parliament, 11, The view was e x p r e s s e d t h a t h a v i n g r e g a r d p o s s i b l e future such a s M o t h e r s ' c l a i m s f o r measures o f Pensions, i t any p r o v i s i o n i n the B i l l for social a reduction of the ment Insurance Fund i s r e a c h e d , existing the Unemploy­ on the o t h e r hand, should remember t h a t the p r e s e n t r a t e t accepted b y Parliament betterment might be unwise t o make r a t e s o f c o n t r i b u t i o n when t h e s o l v e n c y o f Cabinet to on the d i s t i n c t the were understanding t h a t t h e y would o n l y be e n f o r c e d w h i l e the Fund was insolvent. 12, The Committee have r e q u e s t e d the C h a n c e l l o r the Exchequer and t h e M i n i s t e r o f Labour t o the q u e s t i o n o f light consider the Exchequer c o n t r i b u t i o n I n the o f t h e C o m m i t t e e s d i s c u s s i o n s w i t h a view t o the 1 submission t o the Cabinet o f the of difficulty. some a g r e e d s o l u t i o n of 13, The Cabinet have a l r e a d y a g r e e d that should b e Made in for provision the Unemployment Insurance the e x t e n s i o n o f Unemployment Insurance t o as and when t h e y b e g i n t o work f o r wages. of Bill the M i n i s t e r paragraphs rates of In e f f e c t contribution it is suggested be in of h i s Memorandum in respect between 14 and 16' should and g i r l s The proposals of Labour a r e set out i n d e t a i l 23 t o 32 i n c l u s i v e CP.169(24). Juveniles of that boys the and g i r l s the same as t h o s e f o r between 16 and 1 8 . These r a t e s a t boys present are:,-; Employer. Boys Employed. 5d. G i r l s 4-^d. I t i s also and g i r l s proposed t h a t the 4-gd. 32 d. 4d. 3fd. weekly b e n e f i t for between 14 and 16 should be, boys g i r l s 4/-;. corresponding boys 5/-, r a t e s f o r boys and g i r l s between 16 and 18 are,, boys 7/6d, regard Exchequer. g i r l s 6/-. Having to the c u r r e n t r a t e o f wages t h e s e l a t t e r of b e n e f i t a r e thought to be too high f o r boys and g i r l s between 14 and 16 and t h e s u g g e s t e d in the r a t e of benefit for same c o n t r i b u t i o n s could f u r t h e r reduction thorn, a l t h o u g h t h e y pay the as boys and g i r l s between 16 and 18, be j u s t i f i e d between 14 and 16 have o n l y and have t h e r e f o r e rates on t h e ground just necessarily that come i n t o those insurance paid v e r y few oontribu­ tions. 14. It is contemplated contributions be a p p l i e d that part of the revenue from o f j u v e n i l e s between 14 and 13 s h o u l d to a s s i s t Unemployment C e n t r e s . in the maintenance of Juvenile This c o n t r i b u t i o n might t a k e the form c f a per c a p i t a a t t e n d a n c e g r a n t out of the Unemployment Fund t o tho L o c a l E d u c a t i o n Authority, ( o r other Body running t h e c e n t r e ) , i n r e s p e c t of each boy or g i r l r e q u i r e d t o a t t e n d receiving 15. the C e n t r e for benefit, The Cabinet w i l l no doubt hear i n mind, the considerations i n d i c a t e d i n p a r a . 5 0 of l a b o u r ' s Memorandum, respecting the H e a l t h Insurance Scheme of the proposed In t h i s i s made to the Memorandum by the M i n i s t e r circulated t o the C a b i n e t a f t e r the g e n e r a l important the M i n i s t e r tho p o s s i b l e age f o r unemployment i n s u r a n c e . 16. as a c o n d i t i o n of reaction on r e d u c t i o n in the connection of H e a l t h reference (CP.174(24)) the Committee had c o n s i d e r e d question. The Committee recommend to the Cabinet - That the M i n i s t e r o f l a b o u r should be a u t h o r i s e d t o make p r o v i s i o n i n h i s B i l l f o r the' e x t e n s i o n o f unemployment insurance t o j u v e n i l e s , as and when they b e g i n t o work f o r w a g e s , the p r o v i s i o n s t o i n c l u d e i n t e r a l i a arrangements f o r the r a t e s of c o n t r i b u t i o n b e i n g p a i d i n r e s p e c t o f j u v e n i l e s between 14 and 16 b e i n g the same as t h o s e f o r j u v e n i l e s between 16 and 1 8 : f o r the w e e k l y b e n e f i t which j u v e n i l e s between 14 and 16 should- r e c e i v e , b e i n g , boys 5/-, g i r l s 4 / - , and f o r c h a r g i n g the Unemployment Insurance Pund. w i t h payments t o bo a p p l i e d towards the maintenance o f Unemployment Insurance C e n t r e s . The proposed B i l l a l s o t o c o n t a i n p r o v i s i o n s to s e c u r e t h a t as a c o n d i t i o n o f r e c e i v i n g b e n e f i t j u v e n i l e s s h a l l be r e q u i r e d t o a t t e n d Unemployment Centres i f a v a i l a b l e . ISIOB - 1 7 . -35le Committee a g r e e g e n e r a l l y w i t h the v i e w s isI OP expressed by t h e M i n i s t e r of l a b o u r in P a r a s . 3 3 to 38 i n c l u s i v e jffiU­ , \ Ifl o f h i s memorandum r e s n e o t i n s : the d e s i r a b i l i t y o f a b o l i s h i n g JIM plT the e x i s t i n g p r o v i s i o n f o r 1. certain 18. cases a t t h e age of refunds of c o n t r i b u t i o n s 60. The Committee recommend to the C a b i n e t (i) ;I (ii) in ­ a at the M i n i s t e r of l a b o u r should be a u t h o r i s e d t o make p r o v i s i o n in his' B i l l f o r the a b o l i t i o n o f the refunds i n q u e s t i o n w i t h o u t compensation; That t h e M i n i s t e r o f l a b o u r should be a u t h o r i s e d , i f pressed i n Committee, t o o f f e r a-scheme of compensation f o r cases where r i g h t s may be said t o have a l r e a d y accrued on the l i n o s s u g g e s t e d by him, v i a . the payment to persons who a r e over 50 y e a r s of age and have paid 50 c o n t r i b u t i o n s at l e a s t ...v"-,. ; ::'.mm?t;kmik. o f t h e o r e sent v a l u e of the e x c e s s v a l u e of t h e i r c o n t r i b u t i o n s over b e n e f i t which t h e y have r e c e i v e d , p l u s compound I n t e r e s t a t 2%%. 19c The Committee recommend t o t h e Cabinet - That the M i n i s t e r o f Labour should be a u t h o r i s e d t o make p r o v i s i o n i n h i s B i l l f o r t h e removal of t h e p r e s e n t di s q u a l l ­ f l e c t i o n f o r b e n e f i t i n cases where work p e o p l e a r e thrown out of work owing t o stoppage due t o t r a d e d i s p u t e s at the e s t a b l i s h m e n t a t which they a r e employed, a l t h o u g h they a r e t a k i n g no p a r t i n the di spute, 20, The Cabinet w i l l Labour i s i n f a v o u r observe that of the the M i n i s t e r of insertion in his B i l l of a Clause w i t h d r a w i n g the r i g h t 1C of the Unemployment Insurance A c t , 1920, on an industry, Labour, subject t o the a p p r o v a l of to set,up a s p e c i a l to contract 21, c o n f e r r e d by S e c t i o n cut of g e n e r a l In this scheme f o r itself c o n n e c t i o n the a t t e n t i o n of t h e s e t t i n g UP of a s p e c i a l Act f o r , 22, (i) (ii) s a y , a p;ri c u l t u r a l and so that the the adoption. t h i s p r o p o s a l would r e n d e r i m p r a c t i c a b l e future cf scheme. Committee has been drawn t o the f a c t of the M i n i s t r y in scheme under the labourers, The Committee recommend t o the Cabinet T h a t , the M i n i s t e r of Labour should be a u t h o r i s e d t o make p r o v i s i o n i n h i s B i l l f o r the a b o l i t i o n of the e x i s t i n g s t a t u t o r y power t o f o r m s p e c i a l schemes f o r insurance by i n d u s t r y f o r the f u t u r e , on the u n d e r s t a n d i n g t h a t such p r o v i s i o n w i l l be w i t h o u t p r e j u d i c e t o t h e p o s i t i o n of a g r i c u l t u r a l w o r k e r s , domestic s e r v a n t s and other s i m i l a r c a t e g o r i e s of e m p l o y e e s , That t h e M i n i s t e r of Labour, i n c o n s u l t a t i o n with the Minister of A g r i c u l t u r e and F i s h e r i e s and t h e s e c r e t a r y f o r Scotland, should be r e q u e s t e d t o a s c e r t a i n the v i e w s of the A g r i c u l t u r a l i n t e r e s t s as t o t h e i n c l u s i o n of a g r i c u l t u r a l workers i n the Unemployment Insurance Scheme and, i f s o , as t o t h e p r e c i s e form which such i n c l u s i o n should take', ­ A 0*) of the p r e s e n t v a l u e of the e x c e s s v a l u e of t h e i r c o n t r i b u t i o n s over b e n e f i t which t h e y have r e c e i v e d , p l u s compound i n t e r e s t a t 2 - 1 $ . TRADE DISPUTE DISQUALIEICATIOM. 19c SPECIAL HERBS 20 , INSURANCE ffi INDUSTRY. -kvu The Committee recommend t o the Cabinet - That the M i n i s t e r o f Labour should be a u t h o r i s e d t o mehe p r o v i s i o n i n h i s B i l l f o r the removal of the p r e s e n t d i s q u a l l ­ f i c a t i o n f o r b e n e f i t i n cases where work p e o p l e e r e thrown out of work owing t o stoppage due t o t r a d e d i s p u t e s a t the e s t a b l i s h m e n t a t which they e r e employed, although they a r e t a k i n g no p a r t i r the dispute, The Cabinet w i l l Labour i s i n f a v o u r observe that the M i n i s t e r of of the i n s e r t i o n i n h i s B i l l of a Clause withdrawing the r i g h t conferred by S e c t i o n 1G of the Unemployment I n s urance A c t , 1920, on an industry, Labour, subject to set to contract 21, t o the a p p r o v a l up a s p e c i a l out of g e n e r a l In t h i s of the M i n i s t r y scheme f o r c o n n e c t i o n the a t t e n t i o n of the that the adoption­ t h i s p r o p o s a l would render i m p r a c t i c a b l e future the s e t t i n g up of a s p e c i a l Act f o r , 22, (i) (ii) say, a g r i c u l t u r a l and so scheme, Committee has been drawn t o the f a c t of itself of in scheme under the labourers,, The Committee recommend t o the Cabinet T h a t . t h e M i n i s t e r of Labour should be a u t h o r i s e d t o make p r o v i s i o n i n h i s B i l l f o r the a b o l i t i o n of the e x i s t i n g s t a t u t o r y power t o form s p e c i a l schemes f o r insurance by i n d u s t r y f o r the f u t u r e , on the understanding t h a t such p r o v i s i o n w i l l be w i t h o u t p r e j u d i c e t o the p o s i t i o n of a g r i c u l t u r a l w o r k e r s , domestic s e r v a n t s and o t h e r s i m i l a r c a t e g o r i e s of e m p l o y e e s . That the M i n i s t e r of Labour, i n consultation w i t h the M i n i s t e r of A g r i c u l t u r e and F i s h e r i e s and the d e c r e t o r y f o r Scotland, should be r e q u e s t e d t o a s c e r t a i n the v i e w s of the A g r i c u l t u r a l i n t e r e s t s as t o the i n c l u s i o n of a g r i c u l t u r a l workers i n the Unemployment Insurance Scheme and, i f s o , as t o the p r e c i s e form which 3uch i n c l u s i o n should take-, 0 ­ rfCEPTIOB loF CERTAIN IAS3BS 23. While t h e Committee concur w i t h the v i e w of the M i n i s t e r of generally Labour t h a t JOF .;CHKj?SOPLE IN is highly desirable BPLOYMliNT. who are now " e x c e p t e d " from the scheme on the principle that that their the c l a s s e s of It workpeople employment was permanent should be brought i n t o i n s u r a n c e , they realise t h a t the a d o p t i o n o f ' t h i s p r o p o s a l would be h i g h l y c o n t e n t i o u s and might s e r i o u s l y a f f e c t of the B i l l i n t o law. The R a i l w a y the passage "Conciliation" Grades form, one of the most important "excepted" c a t e g o r i e s and the Committee t h i n k t h a t i t desirable is highly t h a t the views- of the R a i l w a y Companies and t h e workpeople concerned should be a s c e r t a i n e d ; , 24. The Committee recommend t o the Cabinet:- That the M i n i s t e r of T r a n s p o r t and the M i n i s t e r cf Labour should be a u t h o r i s e d t o a s c e r t a i n , a s soon a s p o s s i b l e the v i e w s of the Railway- Companies'and the R a i l w a y " C o n c i l i a t i o n " Grades cn the p r o p o s a l t o b r i n g t h e s e grades i n f u t u r e i n t o the Unemployment In s ur anc e B. c he me, RAFT BILL. 25. The Coimittee--recorrariend t o the C a b i n e t : . . That the M i n i s t e r of Labour should be authorised t o prepare a draft B i l l in ' accordance w i t h the d e c i s i o n s reached by the Cabinet and t o submit the B i l l i n q u e s t i o n t o the Committee f o r con­ s i d e r a t i c n as soon as p r a c t i c a b l e . T.S. iened) T. JOKES . " R.B. HOWORTH. oint S e c r e t a r i e s t o the Committee. 2 j Whitehall Gardens, S . i J . 1 , 12th March, 1924. I n i t i a l l e d on b e h a l f CHAIRMAN. of the Committee