Reinventing the dole: Chapter 15

8/4/2019 Reinventing the dole: Chapter 15

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CHAPTER 15: PRIDE AND COMPROMISE: (1) LOCALISM

The new minister

On 22 May 1935, the day after receiving the board’s proposals in theMay memorandum, Stanley showed his contempt for the board and allits works by sending Chamberlain another memorandum for circulationto the cabinet committee, advocating a return to local administration. This document has not been traced but Treasury officials’ commentsare revealing. J A N (later Sir Alan) Barlow wrote:

Mr Stanley ... proposes to circulate with the U.A.B.memorandum ... a memorandum of his own which is completelydestructive. ...

His memorandum will almost certainly completely queer the pitch

for a dispassionate consideration of the amendment of theregulations, as opposed to the complete destruction of the Boardas contemplated in the Act. It may be impossible for the presentMinister, in view of past history, to “live with” this Board, but doesit follow that the whole plan must be abandoned?

Sir Richard Hopkins added:

The Ministers’ “observations on the practical working” of thescheme is a vicious attack fairly evenly distributed between theAct as an Act and the Board as a body of individuals. I trust theChancellor can ensure that it is suppressed. It leaves no hope of

amicable relations supervening.Sir Warren Fisher, as well as endorsing Hopkins’ advice, added his owncomment:

In spite of repeated efforts by the U.A.B. it is clear that the 2Ministers have no intention of working with the U.A.B. The quickerthey go elsewhere, the better.1

Two weeks later, they went. The board’s relations with Stanley’ssuccessor, Ernest Brown, were to be far from easy and a good deal of hostility remained between the two departments; but the change of ministers at least made communication possible and enabled seriousnegotiations on the future of the assistance scheme to commence.

Ernest Brown’s appointment as Minister of Labour in place of Stanley in June 1935 was part of the cabinet reconstruction resulting from RamseyMacDonald’s resignation as Prime Minister and his replacement by theConservative leader, Stanley Baldwin. Neville Chamberlain remainedChancellor of the Exchequer. Godfrey Collins who, as in 1934, was toplay an important role in the cabinet committee on the regulations wasreappointed Secretary of State for Scotland. Stanley remained in thecabinet as President of the Board of Education, while Hudson becameMinister of Pensions.

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After the aristocratic Stanley, second son of the Earl of Derby, Brownwas a very different proposition. A former party colleague, Dingle Foot,described him as follows:

Ernest Brown was, in the full sense of the term, a professional

politician. During the war he had joined the Army as a privatesoldier and had been promoted to the rank of lieutenant. ... Afterdemobilisation he became a paid speaker for the Liberal Party. Hewould spend the whole working week addressing Liberal meetingsup and down the country. On Sundays he was a Baptist laypreacher. ... At turbulent gatherings Brown was in his element. Hehad every argument at his finger-tips; he knew the answer toevery question and he had one other considerable advantage. Inthose days, when loudspeakers were still a rarity and orators hadto make themselves heard above the din without any mechanicalaid, he had the loudest and most resonant voice in public life. As a

writer in the Daily Express once put it: “He bawled his waythrough England”.2

Brown’s loud voice gave rise to reports of the following, doubtlessapocryphal, conversation between two MPs:

“Who’s that shouting?”

“It’s Ernest Brown talking to somebody in Birmingham.”

“Why doesn’t he use the telephone?”

Tom Jones, meeting Brown for the first time in December 1935, took tohim at once:

We shall get on ... much more easily with him than with OliverStanley. Brown like Jones is one of the People - obviously self-taught, devoted to books (I found he liked Erasmus) and to sailing.His father was cox of the Torquay life-boat. He has a quick politicalmind and has not lost his sincerity and sympathy. He vows he willstand firm in the House to anything we agree together inadvance.3

Two months later, after attending a meeting at the Ministry of Labour,

Jones’s admiration was less uncritical:... he is a true politician. He used very brave words. He was goingto stand firmly by all he accepted - provided of course weconceded everything he asked and reduced the cuts to nil ornearly nil. He talks rapidly, very very often, and with anappearance of giving everything away for nothing, rather like acheapjack at a fair, bringing his fist down on the table with a bangevery few minutes to clinch matters.4

Brown was as good as his word. He drove a hard bargain but never letthe board down either as its representative in cabinet or as its

parliamentary spokesman. The qualities that Jones admired, however,were not such as to endear him to the board’s officials or its quasi-

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official deputy chairman Strohmenger. Violet Markham wrote to Jones inNovember 1935:

... I deplore the extreme contempt Eady and Strohmenger load atevery turn on Brown. I think they are mistaken both in fact and

principle. I have the impression Brown is a decent shrewd manand in no sense a nit wit. Is it wonderful he goes steady with usafter the mess of the Regulations? ... if I were Minister of Labour Ishould go very cannily with the Board!5

Alternative solutions: localism and discretion

Within days of Brown’s arrival at the Ministry of Labour, at least twoalternatives to the board’s proposals were being pressed on him frominfluential quarters. On June 7, the day the new cabinet took office,Chamberlain took Brown aside for a preliminary chat. He wrote to his

wife:

I was of course very careful to say that I was not asking him tocommit himself in any way, as he must have time to master theposition. But I told him the inner history of the U.A.B. and my ownpart in its inception and development. I pointed out the dangers of leaving things unsettled at the Election and the loss of prestige tothe Government if the Board were scrapped. I urged him to get onterms at once with the Board and I warned him of the difficultieshe might encounter in his new office. He did not of course commithimself but I feel satisfied that he will make a strong effort to find

a solution on lines that would be acceptable to me.6

If Chamberlain did not ask Brown to commit himself, he did, as a laterdiary entry shows, suggest a possible course of action which differedsubstantially from the board’s proposals: a return to local publicassistance standards followed by a gradual move towards greateruniformity, subject to consultation with local advisory committees.7 Theidea, put forward three months earlier by the Ministry of Health’spermanent secretary, Sir Arthur Robinson, was politically attractive,enabling any cuts to be spread over a long enough period to avoidserious hardship, taking account of local opinion and, above all,

deferring indefinitely the laying of detailed new regulations beforeparliament. Whether either the board or the Ministry of Labour were atfirst aware of Robinson’s suggestion is uncertain, but Chamberlain notedat the beginning of July that Brown was then working on it8 and itsurfaced towards the end of September, first in a note sent to the boardby Phillips with a request for comments9 - the first mention of the plan inthe board’s surviving records - and a few days later in the form of adefinite proposition by Brown.

Another alternative to the board’s proposals was being propounded fromoutside government by Ronald Davison. Events had shown, he argued,that unemployment relief must be discretionary, and discretion couldnot be exercised effectively by a central body:

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This is no function for civil servants, especially those in the minorgrades; and under the present scheme it is only the humblest andyoungest officials who actually see the applicants. The higherofficials, who possess the discretionary power, deal with the caseson paper, and there are thousands of cases to each officer.

The answer, he suggested, was to entrust the “front line” work tocommittees modelled on the “rota committees” which had carried outmass interviewing of unemployment benefit applicants in the 1920s. They would be able to discuss “not merely a man’s monetary needs, buthis present and future opportunities of re-employment, ... together withany other troubles that are keeping him down”.10 Regional commissions,most of whose members would be appointed by the local authorities,would draw up rules of assessment for each region, based on a code andmodel scale laid down centrally, but the local committees dealing withindividual cases would have wide discretionary powers.11 Although

Davison did not suggest that the board should be abolished, itsremaining functions would hardly have justified its survival.

Davison’s ideas were open to obvious objections. Memories of the rotacommittees were both recent and unpleasant. The number of applicantswould have ensured that the interviews were extremely brief, offeringlittle opportunity for intelligent exercise of discretion. As for the regionalcommissions, Violet Markham wrote to Davison: “The great variations inrent have been provided for separately. Apart from rent, stomachs, Imight remark, are just the same (and ache just as much when they areempty) in London as in Merthyr. In London, as in Merthyr, people want

the same minimum amount of heat and light and clothing.”12

The Times,in similar vein, on publishing a letter from Davison setting out hisproposals, commented: “The old system was uprooted for nothing if Mr.Davison’s suggestion is adequate and local self-determination can berestored.”13 But there were others who, faced with the board’s initialfailure, found Davison’s plan attractive as a means of re-introducinglocalism without handing responsibility back to the local authorities.

Brown’s reaction to these conflicting pressures was to play for time. Hefirst asked his own officials for a commentary on the May memorandumand for answers to a list of searching questions on the board’s figures

and the implications of its proposals, ending with the fundamentalquestion: was there really any need for central scales and was it worthdisturbing the arrangements affecting between 200,000 and 250,000people still receiving poor law assistance at local rates, who were to betransferred to the board on the second appointed day?14 The ministryofficials were unenthusiastic about the board’s proposals, pointing outthat they would involve cuts in 34 per cent of existing allowances,varying between districts from 16.5 per cent to 48.4 per cent (the latterfor the area round Glasgow); that the scale rates for man and wife andfor single persons living alone would still be 2s. below the benefit ratesand, therefore, below transitional payment rates in many areas; that

there was no indication of the size of reductions to be made in ruralareas; and that the scale remained complicated and in many cases thescale rates would not actually be paid. They also noted that the board

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was proposing to spend £1 million a year less than its original estimate. The case for uniformity, they wrote, was strong, but it would involvecuts for large groups of unemployed people in some areas. The questionto be decided was whether such cuts were politically possible. If not, thealternative was to adjust existing payments to the extent that localconditions required and local opinion would accept.15

Faced with this advice, and with a general election a few months ahead,Brown could hardly be expected to endorse the board’s proposals. Littleprogress was made during the summer months. Rushcliffe was, asusual, fishing in Scotland, while Eady and his staff were kept busy by aseries of questionnaires from the ministry, seeking clarification of everyconceivable aspect of the proposals. Whether these were a genuineattempt to assess their merits or a mere delaying tactic, they enabledBrown to get through the summer without making any formal responseto the board.

There was, in fact, a fundamental tactical difference between the boardand the minister. The board did not want the standstill, the anomaliesperpetuated by it and the wasteful and demoralising duplication of workresulting from it, to continue for a day longer than was necessary. ForBrown, however, the standstill was a minor inconvenience. There werefew complaints about its effects and whatever method was used to bringit to an end would involve cuts for many of the unemployed, probablywithout any net saving to the exchequer. Above all, new regulationswould produce angry protests both in parliament and in the country. If something had to be done, Robinson’s proposal had obvious advantages

over the board’s plan which involved bringing in new regulations at theoutset. But the political risks involved in backing a solution diametricallyopposed to the board’s wishes were equally obvious.

Towards the end of September, Phillips discussed the Robinson planwith Eady. Finding him unwilling to contemplate indefinitepostponement of the new regulations, Phillips suggested that a solutionbased on the May memorandum might be acceptable provided that theboard was willing to expand the role of the local advisory bodies andplace more emphasis on protection of the “vested interests” created bythe standstill. After consulting Strohmenger, Eady submitted a tentative

plan giving the advisory committees a specific function in relation to thetreatment of rents - the main source of local variation in living costs -and offering some additional protection to standstill cases. Instead of acomplicated rent rule, the committees would be asked to advise on theadjustments to be made where actual rents differed from the amountsallowed for them in the scale rates. Subject to these adjustments,allowances already in payment under the standstill would be preserved;but this protection would not apply to new cases, single applicants, orcases where, owing to lax treatment of resources, the household incomewas more than twice the scale allowances. Where a change of circumstances would result in a standstill allowance being reduced, time

would be allowed for an appeal hearing. Part of the additional cost of these proposals would be met by tightening up the treatment of

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earnings, but the net cost would still be about £1 million more than thatof the May proposals.16

The package as a whole, Eady explained in a letter to Rushcliffe (stillfishing in Scotland), was

very “diplomatic” in the sense that it is closely related to what wehave discussed with Phillips, and it is intended to give Phillips, if he wants it, an opportunity for suggesting to the Minister that bothon guarantee and on the local touch this goes pretty far.17

It did not, however, go far enough for Brown, who was by now whollycommitted to the view that the standstill must be unscrambled slowlybefore there could be any question of new regulations. Rushcliffereturned unwillingly from Loch Ness (where, he reported, the weatherwas awful and the sport extremely good) to be informed by Brown of hisconclusions, which were summarised in a note presented to the board

the following day, its first meeting since the summer: The Minister has throughout regarded it as important to maintainthe framework of the Act and the authority of the Board in anynew arrangements that may be made. ... The result of hisconsideration, however, is to convince him that it is notpracticable, at any time that can immediately be foreseen, tosubstitute for the present Standstill a position in which allapplications are determined in accordance with a single set of regulations of universal application; the differences in localpractice are too great to allow of this.

He proposed that, by “a slow and gradual process”, unreasonableallowances paid under the standstill would be reviewed, taking dueaccount of “responsible local opinion”.18

This, in the board’s view, was taking gradualism too far. In an attempt towin Brown over to Eady’s plan, they reluctantly offered to raise the scalerate for a couple living alone from 24s. to the insurance benefit rate of 26s.19 At this point, however, negotiations were interrupted bypreparations for the general election which was to take place on 14November 1935.

It was essential that something should be said in the government’s

election manifesto about the future of the means test, but drafting astatement which would be acceptable both to the cabinet and to theboard was by no means easy. The final draft was Chamberlain’s work:

The arrangements under the Unemployment Assistance schemehave received prolonged and anxious consideration by theGovernment, and, as already stated in Parliament, no alterationwill be made in the existing “standstill” arrangements before nextspring at the earliest. The Government regard it as important tomaintain the existing powers of the Unemployment AssistanceBoard and the general framework of the Unemployment

Assistance Act. They will, however, give effect to anyrecommendations by the Board for improved arrangements,where these may be shown by experience to be desirable. The

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“standstill” arrangements are, as they were always intended tobe, temporary. They must be replaced by permanentarrangements, which must remedy certain abuses and at thesame time avoid hardship to applicants. Any action must begradual, and must be carried out in full association with localopinion, so as to give effect to reasonable differences in thelocalities.

As regards the Means Test, the Government believe that noresponsible person would seriously suggest that unemploymentassistance, which is not insurance benefit, ought to be paidwithout regard to the resources properly available to theapplicant. The question is not whether there should be a Means Test, but what that test should be. This is a matter which is nowunder close examination, but in any scheme great importance willbe attached to maintaining the unity of family life and, in addition,

provision will be made to meet any cases of proved hardship.20

The opening sentence merely repeated what Brown had said a few daysearlier in reply to a parliamentary question and gave no indication as towhen new arrangements would be introduced, but it nevertheless gaverise to a general expectation that new regulations would appear in theearly months of 1936.

The election brought overwhelming victory for the “national”government, which by now was Conservative in all but name. Brownremained Minister of Labour, a post he was to retain until 1940 when hewas replaced by Ernest Bevin. The board, meanwhile, had had time to

revise its earlier proposals, pushing “localism” to the limit consistentwith maintaining the board’s ultimate authority.

A note by Rushcliffe discussed at the board’s meeting on 6 Novemberspeculated on the lengths to which local differentiation could be taken.Could there be differences in the amounts allowed for light and fuel, forexample, “on the ground that the nights are longer and the climatemore inclement at, say, Stonehaven than it is at Torquay”? Could thedifferent physical needs of applicants in industrial and other areas, oreven the long-established practices of local authorities, be taken intoaccount?21 The board proceeded to re-examine each section of the May

memorandum to see where and how local advice could be brought inand what other changes might make the proposals more attractive tothe minister. As well as local rent rules, it was agreed that the advisorycommittees should be asked to advise on the reductions to be made inpredominantly rural areas and that they should decide the timetable(within a limit of 12 months rather than the 6 months proposed in theMay memorandum) for bringing allowances under the standstill into linewith the new regulations. The board reversed its previous decision toexclude single persons from this transitional protection. Having injectedthis strong dose of “controlled localism” (Strohmenger’s phrase), theboard decided to withdraw the proposal to raise the scale rate for a

couple living alone to 26s. They also revised yet again the proposedearnings rule for relatives other than the applicant’s spouse or parent.

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By the last week of November, after a board meeting extending overthree days, a draft of the new proposals was ready. In a covering note toStrohmenger, Eady wrote:

We are emphasising the importance of the Committee question on

the assumption that it is the problem of localism which is reallyinteresting the Minister and others. ... It is on this way of approachthat, in drafting this section, I have played up the section for all itsworth. ... It is a little bit exalted, but I am not sure that in relationto E.B. it may not be attractive.22

The expectation of early agreement was reflected in the debate on theKing’s Speech on 3 December, when the Prime Minister expressed thehope that the overhaul of unemployment assistance would be“undertaken before we have come together for very long after the

Christmas Recess”.23

As events were to show, the proposals submitted toBrown on 5 December did provide a basis for agreement, but there werenumerous skirmishes still to be fought, in each of which the board wasto be forced to retreat a little further. In each case it was theunemployed who were to be the gainers.

Negotiations were resumed in the new year. At a meeting withRushcliffe on 3 January 1936, Brown pressed for a number of furtherimprovements. Could there be a discretionary power to pay a marriedcouple 26s. where that rate was in payment under the standstill? Couldsmaller families be exempted from reductions for low rent? Could amarried son be treated as a boarder? Could people who reapplied aftera break, during the transitional period when standstill allowances werestill in payment, retain their rights under the standstill?24

Further meetings followed, during which some of Brown’s anxieties wereallayed. If married sons could not be treated as boarders, much thesame result could be achieved by a generous disregard of earnings. Forcouples, the board agreed that, where 26s. was being paid under thestandstill, no reduction should be made for a considerable time.25 Themost troublesome questions were the reductions for low rent and thetreatment of “new cases”. Brown, mainly concerned with the short-termimpact of the new regulations, opposed any cuts for low rent for families

with up to three children. The board saw the issue as one of principle: topay the same allowances to applicants with widely differing rentsseemed incompatible with their duty to pay allowances based on need.Agreement was eventually reached on the basis that low rent reductionswould be made only where the actual rent was more than 3s. below thestandard rent;26 but the last word on this subject was far from havingbeen spoken.

Assimilation of new cases

The treatment of new cases - those applying for allowances after thecommencement of the new regulations, when others were still receivinghigher amounts under the standstill - was problematic. Successive

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versions of the board’s proposals had assumed that the new regulationswould be applied rigorously to new applicants. At first it seemed thatBrown’s doubts related only to the definition of a new case. At ameeting of officials on 16 January, however, Phillips suggested that itmight be difficult to explain why a person treated as a new case wasgetting less than other applicants in the same district. Was it possible,he asked, to devise a scheme under which “liquidation would proceed ata uniform rate throughout the area so that at any given time everybodywould be treated alike no matter when they became applicants” - theprinciple which was referred to in the ensuing debates as “assimilation”? This suggestion was totally at variance with the board’s intentions.Strohmenger reiterated the objections to creating new vested interests:to bring new cases under the standstill would amount to an admissionthat the new regulations were not generous enough. At most, thedefinition of a new case might be amended to exclude people

reapplying after receiving an allowance during the previous eightweeks.27

Brown again intervened personally. At a meeting with the board on 7February 1936, he argued the case for assimilation of new and oldcases. Strohmenger replied that the board had been willing to drop theproposal for a time limit for liquidation of the standstill, on theassumption that the number of standstill allowances would graduallydiminish by natural wastage. If new cases were to be treated in thesame way as old, not only would a time limit be necessary, but cutswould have to be imposed on whole classes of cases on the same day,which could only lead to trouble.28 But Brown was not convinced andRushcliffe had to agree that the board would reconsider both thisproblem and that of low rents - a tactical victory for Brown, sinceRushcliffe had insisted at a meeting with Brown earlier that week thatthe board would not reconsider the rent rule unless the ministry putforward an alternative and that, in any event, new cases must not bebrought within the standstill.29

The resentment of the board’s officials was expressed forcefully byRushcliffe’s private secretary in a letter to Tom Jones:

The Minister, or, to be more precise, the Ministry, has asked the

Board to think again. I hope the Board will think again, althoughnot as the Ministry may perhaps expect. Frankly I was disgustedby yesterday’s meeting and I was not a little astonished by the ill-mannered levity of some of the Ministry officials.

It seems to me that all this talk about not being able to convincethe Cabinet and the House of Commons is so much eye-wash. If itcomes to a deadlock the Minister will be forced to lay beforeParliament a statement of his reasons for, and a copy of the reportof the Board on, the variations and amendments made by him,and I fancy that the Board’s criticisms are likely to be moredamaging to the Minister’s amendments than he appears to

anticipate.

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... This Board, whether the Ministry like it or not, has come to stay,and so long as the members of the Board, individually andcollectively, stand by their guns, I believe we shall win through.30

But while such fighting talk might have appealed to some members of

the board, confrontation was not the name of the game in whichRushcliffe, Strohmenger and Eady were engaged. About this time VioletMarkham commented on the relationship between Eady and theministry:

I find all the non M. of L. officials at Thames House regard the saidM. of L. as mud : “a bloody Soviet” it was called recently by a Treasury official and our men heartily endorse that view. But whyEady collapses as he does in front of Phillips no one understandsthough his obvious inferiority complex vis à vis his old Ministry is agreat disadvantage for the Board.31

It was also about this time, ten days after King George V’s death, thatshe complained that Rushcliffe was “at his feeblest and worst” and thatEady

seemed to be nervous that he would be running round offering allmanner of further concessions to ease the new King’s path beforethey are asked for.32

With grave misgivings, following the meeting with Brown on 7 February,the board offered a new concession to meet Brown’s concern about themarried couple rate. In addition to the proposal noted above to waive

the first 3s. reduction for a low rent, it was now proposed that the scalerate for a couple without dependants and with no other resources wouldbe raised from 24s. to the unemployment benefit rate of 26s. - a devicewhich was to be known as the “fall-back”.33

Tom Jones, on hearing of the latest tactical retreat agreed in hisabsence, wrote a strong letter of protest to Rushcliffe:

It has seemed to me, rightly or wrongly, that we weresurrendering the duty laid upon us of dealing with need and of doing so in such a way as to remove or reduce inequalities andtherefore injustice in the treatment of applicants.34

- which provoked a jocular reply from Eady, reminding Jones of afictitious extract from a leader in the Daily Chronicle:

Whether it be right or wrong to permit the vivisection of pauperchildren, there will be general agreement that if it is to be done itshould be done under the supervision of the Home Office.35

While the board may have felt that its latest concessions ought finally tosettle the issue, Brown did not. The question of assimilation remainedunresolved. At a further meeting on 24 February 1936 with Rushcliffe,

Strohmenger and Eady, at which agreement was reached on most of theoutstanding points, he recalled the government’s election pledge thatthe new arrangements would avoid hardship and that action would be

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gradual and carried out in full association with local opinion. Under theboard’s proposals, new cases would not get the benefit of this pledge.Far from being satisfied by the “fall-back” proposal, he had neversuggested that couples should get 26s. in areas where that rate was notalready in payment under the standstill. Strohmenger reminded himthat the difficulties caused by the original regulations were due to thenumber of cuts. Assimilation would eventually mean more cuts, to bringnew cases in line with the regulations. But Brown was not convinced andit was decided that the disagreement should be reported to the cabinetcommittee.36 As we shall see, the question of assimilation was eventuallyresolved in Brown’s favour. But even that would not be enough tosecure cabinet approval of the regulations.

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Reinventing the dole: a history of the Unemployment Assistance Board 1934-1940 by Tony Lynes

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Reinventing the dole: Chapter 15

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