First Schedule. — Part I.

Orders of the Day — UNEMPLOYMENT INSURANCE (No. 2) BILL. – in the House of Commons am ar 18 Gorffennaf 1924.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Mr. T. THOMSON:

I beg to move, in page 14, line 7, to leave out the word "week," and to insert instead thereof the words "three days."

1 do not propose to argue this question. I understand, notwithstanding what happened in Committee, when unfortunately the Minister was unable to accept this Amendment, that he has now thought better of it and is willing to accept it. I, therefore, beg to move that in place of one week three days shall be inserted as the waiting period.

Photo of Sir Henry Betterton Sir Henry Betterton , Rushcliffe

It is really. impossible for the House to accept an Amendment which is going to add £4,500,000 a year without some word of explanation. This Amendment really is a matter of supreme and fundamental importance. Let me remind the House what the effect of it will be. This Bill is drawn upon the footing that the deficiency period will end in June, 1926. The Bill also provides that when that period of deficiency comes to an end the rate of contributions will be considerably lessened. Those of us who were on the Committee will remember that during the Committee stage, and indeed on the Floor of the House on the Second Reading, we made certain additions which fundamentally affected the financial structure of the Bill. Under these circumstances, we asked, and the right hon. Gentleman was willing, that we should have a second Report by the actuary in order that we might understand exactly where we stood and what was the financial position. The actuary has told us that in consequence of the additional charges that were made in the House and in the Committee the period of deficiency will be prolonged for something like 10 weeks, and that when it comes to an end there will be a balance of only £100,000 a year on an income of £30,000,000 a year. Therefore, it is obvious that the margin between solvency and insolvency on that very large turnover will be, very small.

It was proposed in Committee by the hon. Member (Mr. T. Thomson) that this waiting period should be reduced from six days to three. The right hon. Gentleman, in dealing with that Amendment, said that the Amendment meant de-arranging the whole financial structure of the Bill. He has not said a word today to tell us why he has changed his opinion or to show us in any way why the acceptance of this Amendment will not derange the whole financial structure. Of course, it will. The actuary has shown us that the present deficiency, which is something like £7,000,000, will be wiped off in two years or thereabouts. The effect of imposing a further charge of £4,500,000 a year will mean that you will no sooner finish one period of insolvency than you will embark upon another. You will wipe off the present period of insolvency in two years, and then, owing to what we are now doing, you will inevitably embark upon another. It is obvious that the effect will be that the period of deficiency will continue indefinitely and that this fund will be in imminent danger of being definitely insolvent.

May I remind the House what will be the permanent effect. Those who contribute to this fund at present pay a very large contribution—the employers 10d. and the employés 9d. It was held out to them that when the period of deficiency comes to an end their contributions will be reduced. The right hon. Gentleman in his Bill has held out the same hope, and the effect of what we are doing now will be that, not only will that hope be deferred, but I believe it will abolish altogether the chance of that expectation being realised. If the right hon. Gentleman is prepared to accept that position, the responsibility will be on his own head. All that I can say is that it will, without doubt, cause the greatest disappointment among those who are contributing, for, so far from reaching the expected lower rate of contribution within two years, they will be compelled indefinitely to pay at the present high rate.

Photo of Mr Thomas Shaw Mr Thomas Shaw , Preston

I do not think that the insured persons will raise any great complaint on this point. It is not out of any discourtesy on my part that this matter has not been discussed. I thought the House was well aware of the facts. It is true that if this Amendment is accepted the end of the deficiency period will be further from sight. It is also true we are assuming that, as time goes on, there will be a decrease of unemployment, and when the end of the present deficiency period comes there will be less unemployment, so that the fund will remain sound. In view of the fact that the matter has been discussed previously and the House is in possession of all the necessary information, I hope we may be allowed to get to the next Amendment.

Photo of Mr Philip Lloyd-Greame Mr Philip Lloyd-Greame , Hendon

Is it not the fact that the £100,000 will not remain at the end of the deficiency period at the present rate of contribution?

Photo of Mr Thomas Shaw Mr Thomas Shaw , Preston

What the actuary said was that unemployment at the end of the time would be so-and-so and the financial position would be so-and-so. The Bill has extended the deficiency period, but the probability is that with a prolongation of that period there will be a much lower number of unemployed, and therefore the fund will remain sound.

Photo of Sir Philip Colfox Sir Philip Colfox , Dorset Western

h it competent to introduce at this stage an Amendment which will very largely increase the expenditure under the Bill? I am well aware of the fact that this money does not coma directly out of the Treasury, but a very substantial part. of what goes into the Insurance Fund comes from the Treasury, and I submit it will largely increase the cost if this Amendment is carried.

Photo of Mr John Whitley Mr John Whitley , Halifax

Lt has been held in regard to Amendments of this kind that they do not come under the Rule, because they do not increase the charge on public funds, although their effect might be, if they were extended too much, to bankrupt the fund. For that reason they have not been ruled out.

Amendment agreed to.