Reinventing the dole: Chapter 5

8/4/2019 Reinventing the dole: Chapter 5

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CHAPTER 5: THE BILL IN PARLIAMENT

The parliamentary debates on the Unemployment Bill began with asecond reading debate in the House of Commons - the first general

debate on the principles of the bill - extending over three days between30 November and 5 December 1933. Another three days were devotedto money resolutions giving authority for the spending of publicmoney under the bill. The committee stage, providing an opportunity fordetailed scrutiny of the bill, followed in the new year. It took place onthe floor of the House, as befitted a bill of such importance, rather thanin a standing committee. The government imposed a guillotine, limitingthe committee stage to fourteen days, with four days for the remainingstages (report and third reading). The first five days, however, werespent on Part I of the bill and the time remaining for Part II provedinadequate. An extension was agreed and the committee stage draggedon, with long interruptions, until 25 April 1934. After debate in theHouse of Lords, the bill received Royal assent and became an Act on 28June. Unusually, the Act conferred on Part II its own title: theUnemployment Assistance Act, 1934. When Parts I and III were replacedthe following year by a consolidating act (the Unemployment InsuranceAct 1935), the Unemployment Assistance Act became a self-containedstatute.

The bills relatively uneventful passage through the House of Commonsowed a good deal to the personality of the Minister of Labour. Bettertonwas well liked: if anything he was suspected of being too nice. Labour

members repeatedly contrasted the provisions of the bill with thequalities of the minister. As the debates drew to a close, the bills mostoutspoken opponent, George Buchanan, exclaimed in exasperation,The Minister of Labour with his civil and nice manner gets us down. Weall feel at a disadvantage with him.1 And in the final debate on the billsthird reading, the Liberal spokesman, Sir Percy Harris, added his tribute:

For 27 days he has sat in his place with commendable diligence, amodel of how a Minister should guide through the House ofCommons a long, complicated and involved Bill. ... no Ministerwhom I have known has been more conciliatory in his manner and

deportment and apparently more desirous to meet criticism, and,according to his own ideas, anxious to disarm opposition.2

Bettertons diplomatic skills, combined with the governments invinciblemajority, ensured that such amendments as were made were mainly onmatters of detail. The most important was to Part I of the bill, though ithad major implications for Part II: in his budget speech on 17 April,Chamberlain announced the restoration from 1 July 1934 of the 10 percent cut in unemployment benefit rates imposed in 1931.3

Some of the issues raised in the Commons debates are summarised inthe following pages. For those seeking a fuller account, reports of the

debates in both Houses are readily available in the pages ofHansard.

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The means test

Opening the second reading debate, Betterton commended the bill tothe House of Commons as one of the most comprehensive and

constructive pieces of social legislation which have been introduced intothis House for many generations, based on the view that the Poor Lawis not the appropriate medium of relief for able-bodied industrial workerswho are unemployed through causes quite outside their own control,and who are anxious to work, as the overwhelming majority of themare. While rejecting the poor law, however, he strongly defended theprinciple of a means test, contrasting it with the Labour Partys policythat an unemployed man should receive, out of the pockets of hisfellow-citizens, a fixed payment as of right for the duration of the periodof his unemployment, whether he needs it or not - a policy which, heasserted, would compel the state to determine what kind ofemployment the worker should be willing to take and on what terms.Not only was a means test necessary, but it must be a household meanstest: I cannot attach any meaning to a test of need which is not relatedto the resources of the household of which the applicant is a member.4

The household means test was the main focus of criticism during thedebates; in particular, the assumption that an unemployed man wouldand should be maintained by his children or children-in-law. Governmentsupporters representing Tyneside constituencies gave disturbingexamples of the operation of the means test in their areas.5 Oppositionto the principle of a household means test, however, came mainly from

the Labour benches. Aneurin Bevan declared that the family was nolonger the unit of modern society; it had been destroyed by theindustrial revolution. As for the argument, beloved of supporters of themeans test, that if people were not prepared to maintain their ownparents they should not expect other peoples children to do so, he toldHudson:

... we have had to keep his father and the fathers of most of thosewho are here. As a matter of fact, my own people have beenkeeping your fathers for generations. The point of view is absurdand ridiculous that an individual of 70 years of age, if he should

happen to be in employment, should be expected to support sonsof 30 or 40 years of age; that a young man of 20 or 25 years ofage, who is building up a home for himself and is for the timebeing living under the roof of his parents, should be asked tosupport brothers and sisters of 30 or 40 years of age; that sistersof 17 or 18 who happen to be lucky enough to get a little domesticservice should keep their brothers of 30 or 40; that aunts shouldkeep their nephews; that nieces should keep their aunts. ... That ason who happens to find employment near home, and thereforecan live at home, should help to maintain the home, while a sonwho has gone to work in the south of England, perhaps 100 miles

from home, should not make any contribution, is ridiculous. It

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amounts simply to making accident a basis of responsibility, and isnot firmly founded on any principle of equity that this House candefend.6

Discussion was severely hampered by the fact that the details of themeans test and, in particular, the allowance to be made for personalrequirements of members of the household, were to be set out later inthe boards regulations. It was a Conservative, Harold Macmillan, whopointed out the significance of the term personal requirements:

I am not a lawyer, but I take it that the word needs ... indicates aPoor Law basis, but that the word requirements envisages asomewhat more generous and wider view of the proper amount tobe disregarded of the income of other members of a householdbefore an assessment is made. In fact, on the regulations made

under this part of the Clause will depend whether theadministration of the means test is acceptable or not to the greatmajority of the people of the country.7

This interpretation was confirmed by Betterton, who claimed that,although the more enlightened PACs made an allowance of this sort, thebill was an advance on any previous legislation in making the practicemandatory and enabling the board to take into account the degree ofrelationship between the household member and the applicant.8

The assessment of need

The crucial question of the boards scale - the amounts of money thatapplicants and their families would be assumed to need - would,similarly, remain unanswerable until the bill had passed into law and theboards regulations were drafted. A good deal of concern was expressedabout the relationship between the boards allowances and theinsurance benefit rates. Replying to the suggestion that, like transitionalpayments, the boards allowances would be limited to the benefit rates,the parliamentary secretary, Robert Hudson, insisted that, far frombeing a ceiling, the benefit rates were the ground floor of the scheme:The limit of need will not be confined in any way to the rates of

unemployment benefit.9 The possibility of the boards allowancesexceeding the benefit rates, however, was seen by some as a threat tothe insurance scheme. The Liberal member for East Birkenhead, GrahamWhite, predicted that, if the board were to take into account all theneeds of the unemployed, it would make the insurance scheme looksimply silly. 10 When the restoration of the 10 per cent benefit cut wasannounced, he welcomed it as making it more possible for thecontributory scheme to survive, though it remained to be seen whetherthe disadvantages, if any, of receiving an allowance from the boardwould make it worth while to pay contributions to earn the right to aninsurance benefit.11 As we shall see, the benefit rates were to be one ofthe main factors taken into account by the board in fixing the level of its

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allowances, and the fact that, in spite of this, allowances often exceededthem was to cause severe problems.

Amendments prescribing a minimum level of allowances werepredictably defeated, though a proposal for a 3s. minimum scale rate for

a child (the insurance benefit addition for a child was only 2s.) attracted125 votes compared with the normal opposition tally of about 70.12 WhenEleanor Rathbone, the independent MP and campaigner for familyallowances, moved an amendment requiring the board to take intoaccount the minimum requirements of healthy physical subsistence -an attempt to introduce the idea of a scientific minimum - Bettertoninsisted that the Boards duty to promote the welfare of the unemployedwas a sufficient guarantee.13 Only time and the publication of the boardsregulations would show whether this assurance was justified.

Penal sanctionsThe penal provisions of clauses 39 and 40, described in chapter 4,provided a more tangible topic for debate, since they were set out fullyin the bill itself. The strongest criticism was aimed at the power to sendapplicants to the workhouse as a condition of maintaining their families.A government supporter, Ian Horobin, argued that if this was intendedas a sharp lesson, making the man more amenable to training oremployment, from ones knowledge of the house that does not seemto be a very likely effect. If it had merely been put in as a lastweapon, would it not be better to face the fact that the applicants in

question were not appropriate people to be dealt with by the board?

14

The ensuing debate revealed some confusion in the minds of ministersas to the position of a man who, having been sentenced to theworkhouse, decided to walk out. Would he be left to starve, given thatlocal authorities were to be prohibited from paying outdoor relief to aperson to whom Part II of the Act applied? Bettertons reply was thatsuch a person would be excluded from the boards scope under clause40 (the grounds for exclusion could be either failure to maintain himselfor persistently contravening the condition that he become an inmate ofthe workhouse), whereupon the outdoor relief prohibition would cease toapply.15 The parliamentary secretary, Hudson, offered a simpler solution.

By discharging himself from the workhouse, he explained, the manwould automatically lose his status under Part II and could then be dealtwith by the PAC as they saw fit.16 Aneurin Bevan accurately describedthis as an absolute travesty of the Bill and raised the question againthe following day. If a man who discharged himself from the workhousewas to be entitled to outdoor relief, he argued, all the penaltiesimposed upon him under sections 39 and 40 vanish into thin air; wehave deprived ourselves of any means of punishing this terriblyincorrigible person. But if he was not to be entitled to outdoor relief,the effect would be that he was permanently imprisoned in the

workhouse.17

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The local authorities were not, in fact, quite as defenceless as Bevanimplied. A person who failed to maintain himself or his family, resultingin their having to be relieved by the public assistance authority, couldbe prosecuted under the Vagrancy Act 1824 as an idle and disorderlyperson, an offence punishable with imprisonment. The local authorities,however, did not want the odium of prosecuting the boards rejects, andan attempt was made in the Bills closing stages to place on the boardthe responsibility for prosecuting its applicants for persistent failure tomaintain themselves or their dependants or to comply with conditionsimposed by the board. Hudson argued that this would cut across thewhole conception of the Bill which was to leave the public assistanceauthorities as residual legatees, and the amendment was withdrawn.18

The proposal to require attendance at a local authority work centre incases of special difficulty also came under attack. A number of localauthorities had work centres, set up to comply with their duty to set

able-bodied paupers to work, which the board was to be allowed to usein addition to or instead of its own centres. The poor law work test hadin practice been largely ignored in the face of the mass unemploymentof the 1920s, and since 1930 local authorities in England and Wales(there was no similar requirement in Scotland) had been required onlyto formulate such arrangements as may in the circumstances of theirarea be practicable for setting to work male persons who are capable ofwork to whom relief ... is afforded, and for training and instructing suchmen, and for their attendance at suitable classes of physical training orof an educational character.19 Despite the emphasis on training andinstruction, however, there was little about the centres that was eitherconstructive or useful. A Labour MP recalled a visit to the London CountyCouncils Belmont Colony, an institution with a relatively goodreputation:

...men were sent there not for training but as a punishment. ... Iremember going to Belmont as a visiting guardian and seeing menengaged there in carrying earth in sacks from one place anddepositing it in another place.20

Betterton, however, assured the House that before making anyarrangement to use such a centre the board would satisfy itself as to the

type of work and instruction provided. It would be absurd, he added, toset up new centres to do what local authority centres such as Belmontwere already doing.21

Relatively little was said in the debates about the constructive side ofthe boards work, including its power to provide training. Bettertonreferred enthusiastically to the clause allowing grants to localauthorities for work schemes of the Whipsnade type.22 There was somecriticism by opposition members of the proposal to allow the board tosubsidise training courses provided by voluntary bodies over whichparliament would have no control.23 One such body was the CentralCommittee for Womens Training and Employment, which trained

unemployed women for domestic service and whose chairman, Violet

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Markham, was to be a member of the UAB (although this was not knownat the time of the debate). The working class, George Buchananremarked, cannot employ domestic servants, and I have a fundamentalobjection to working-class money being used to provide domesticservants for the rich.24

Appeals

Throughout the debates, there were frequent references to the appealmachinery. There was strong criticism of the proposed method ofappointing tribunal members, the chairman being appointed by theMinister, the workpeoples representative by the board from a panelnominated by the Minister, and the third member being the boards ownrepresentative. Graham White described it as simply grotesque thatdisputes between the board and local authorities as to responsibility for

border-line cases were to be decided by tribunals set up by the boarditself consisting of their own chosen men, with no higher authority toensure uniformity.25 He moved, unsuccessfully, an amendment to havethese scope appeals heard by the unemployment insurance appealbodies - the court of referees and the umpire.26 Later, Sir Stafford Crippsmoved an amendment, also unsuccessfully, to make the ministerresponsible for appointing all tribunal members, not just chairmen.Appointment by the board, he said, seems to be about the worstconceivable type of appointment there could be, because the board isthe body against whom the appeals are to be made. Hudson explainedthat, so far as the workpeoples representatives were concerned, it was

simply a matter of administrative convenience that the tribunal clerk, anofficer of the board, should decide which member of the panelnominated by the minister would be invited to sit on a particularoccasion. He suggested that selected should be substituted forappointed, to make it clear that it was the minister who did theappointing.27 The change was merely cosmetic and even the cosmeticeffect was frustrated by a further government amendment moved in theHouse of Lords simply for the purpose of clarity, providing that theworkpeoples representative was to be not only selected but alsoappointed by the board.28

Surprisingly little was said about the selection of tribunal chairmen.They were not only certain to play the leading role in the tribunalsdeliberations but were to have sole responsibility for hearing scopeappeals and for granting leave to appeal in other cases. GeorgeBuchanan asked Betterton whether, like nearly all the courts of refereesin the insurance scheme, the tribunals would have lawyers as chairmen.Not necessarily, Betterton replied; chairmen of courts of referees wereusually lawyers because the points they had to decide were largelylegal. But lawyers would not be disqualified and the same practicewould probably be followed in regard to the chairmen of both bodies29 (infact, as we shall see in chapter 7, most of the chairmen were not

qualified lawyers).

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The question of payment of tribunal members was raised ratherhalfheartedly by Lawson who, moving an amendment providing forpayment of a salary, admitted that he was not too strong on it.Hudson replied smugly:

One of the outstanding characteristics on which this country canpride itself in its government is its capacity to get a great deal ofoften onerous and unpleasant work done for nothing or for bareout-of-pocket expenses. The court of referees ... has been inexistence for years, and members other than the Chairman havebeen willing to give their services free with only out-of-pocketexpenses and payment for loss of remunerative time. We do notwant to do anything that will put the members of this tribunal on alower plane than the court of referees ...30

Whether unemployment assistance tribunal members would haveregarded payment for their services as a slight or as welcomerecognition of the value of their work remains an open question, but thepractice of paying the chairman a fee and allowing the other membersto claim only expenses and an allowance for loss of earnings hasremained firmly established in the British social security system, theonly exceptions being those tribunals with one or more medicallyqualified members (doctors, it seems, do not object to being put on alower plane than other tribunal members).

Ministers were at pains to stress that, whatever similarities there mightbe between the tribunals and the courts of referees, there was onefundamental difference: the referees were concerned with questions of

law and the tribunals were not. Thus, while a higher authority - theumpire - was needed on the insurance side to ensure uniformity in theinterpretation of the law, no such need arose in the assistance scheme.When Graham White demanded that scope appeals should be heard bythe courts of referees, with a further right of appeal to the umpire,Hudson replied that such questions as a mans normal occupation werequestions of fact: There is no question of co-ordination. ... We do notneed an Umpire sitting in London who has not seen the man to decidewhether John Jones is or is not normally a coalminer.31 Resisting aproposal to allow appellants to be represented at appeal hearings,

rather than merely accompanied by a friend, Hudson argued that legalquestions would not be involved: all the tribunal would have to do wasto establish the facts32 - ignoring the fact that one of the two grounds onwhich leave to appeal could be given was to be that the decisionappeared not to be in accordance with the regulations. Similarly, theSolicitor-General, Sir Donald Somervell, replying to the debate on anamendment requiring the tribunals to arrive at their decisions in ajudicial manner, stressed the discretionary nature of the scheme. Thetribunals, he argued, would be concerned with the human element.33

Debate on the appeal provisions was curtailed by the guillotine and aLabour amendment removing the requirement of leave to appeal was

not reached. The fact that the opportunity of moving it at the report

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stage of the bill was not taken suggests that it was not regarded as ofgreat importance, though later events were to show that it would havebeen in the governments interests, as well as in the interests of theunemployed, to allow unrestricted access to the tribunals.

Parliament and the board

The most fundamental change proposed in Part II of the bill was, ofcourse, the creation of the Unemployment Assistance Board. In hisopening speech in the second reading debate, Betterton argued thecase for centralisation. The existing disparities in the administration oftransitional payments must be brought to an end:

I do not mean that there should be a rigid, uniform system all overthe country; but I do feel quite certain that it is indefensible thatone authority should provide the money while another spends it.

Central administration, he explained, could take a number of forms.Direct administration by the Ministry of Labour would mean transferringthe whole question of discretionary payments into national politics in amost acute form; even if local committees were to decide individualcases, rules would have to be laid down and the Minister would be heldresponsible for the decisions. An independent board subject to noparliamentary control would be just as objectionable. So the governmenthad chosen a third course:

The Minister of Labour will be responsible to Parliament forgeneral policy and for obtaining the necessary money, but the

application to individual cases of the policy approved by theMinister and by Parliament will be the business of an independentBoard.

To ensure that the services of local people were not lost, he added, thebill provided for the establishment by the board of local advisorycommittees, and he felt certain that the board would be quick to seizethis opportunity (in fact, for reasons to be explained in chapter 14, theboard was, in this respect, extremely dilatory).34

The Labour spokesman, Arthur Greenwood, opened his attack on Part IIof the bill with the accusation that it centralises, bureaucratises andintensifies the Poor Law principle and that the board was to beappointed by the Crown and removed from the criticism of thisHouse.35 The financial secretary to the Treasury, Leslie Hore-Belisha,presented the board in a more favourable light, arguing, first, that theappointment of its members by Royal warrant and the payment of theirsalaries from the consolidated fund was intended to impress upon thenation that the board is not a servant of the Ministry of Labour, butenjoys an absolutely independent status and, secondly, that the Houseof Commons would have increased control:

Every regulation ... made by the board will be subject to

Parliamentary approval. Every report submitted by the board willbe discussed by this House, if this House so desire. So will the

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accounts of the board. The Vote on Account, the Appropriation Bill,Votes of Censure, Adjournment Motions and the ConsolidatedFund Bill itself will provide occasions for deliberation upon thisboard.36

But serious doubts remained on both sides of the House. As Dingle Foothad pointed out, while the Boards regulations could be debated, theycould not be amended and would have to be accepted or rejected as awhole.37 Parliamentary approval would in practice, therefore, be littlemore than a formality, however forcefully the regulations might havebeen criticised before the vote was taken. Other members raised thispoint and the issue was debated at length on the last day of thecommittee stage of the bill, 26 March 1934 (on that occasion there wasmuch confusion between the provisions relating to the regulations andthose dealing with the procedural rules to be made by the board, thelatter not being subject to approval by parliament),38 but no concession

was offered by ministers.

There was concern about the fact that MPs would be precluded fromraising in the House the treatment of individual constituents. Where anallowance was in dispute there would be a right of appeal, but theappeal tribunal would not be concerned with the behaviour of theboards officers. If an applicant was treated harshly, brusquely orintolerantly, Aneurin Bevan asked, to whom could he complain? Neitherthe local authority nor the tribunal would have any power to deal withthe complaint, and the mans MP would not be able to raise the mattereither. The officers would be responsible only to a board sitting in

London, over whom the House would have no control.39

In the course of debate, it emerged that MPs might, after all, be able toquestion a minister about the actions of an officer of the board. A Labourmember, Major Nathan, drew attention to the fact that under the bill itwas the boards officers, not the board itself, who were to decideindividual applications, and the officers, unlike the members of theboard, were to be paid out of money voted by parliament. It ought,therefore, to be possible for parliament to discuss their actions. Hore-Belisha, plainly unprepared for this suggestion, gave no clear reply.40

Winding up the debate on the second money resolution a week later,

however, Chamberlain conceded Nathans point: I certainly thinkquestions can be put down about the acts and procedure of the staffswho are not on the Consolidated Fund.41 On the face of it, this was animportant breach in the ministers defences, but in practice thetreatment of individual applicants was seldom raised on the floor of theHouse during the period of the boards existence.

Finance and the local authorities

The complaints of the local authorities about being asked to contributeto the cost of a scheme over which they would have no control were

supported by Labour and Liberal speakers in the second reading debate.Greenwood and Dingle Foot both argued that the whole cost ought to be

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borne by the exchequer. Foot maintained that Hilton Youngs statementin the censure debate on 12 April had led the local authorities to expectthis.42

The House returned to the subject the following week, when the money

resolutions were debated. At a series of meetings with local authorityrepresentatives, Chamberlain had tried to arrive at a formula acceptableto them. The Association of Municipal Corporations, representing theurban authorities outside London, maintained that the whole cost shouldbe borne by the exchequer. The County Councils Association and theLondon County Council, both sympathetic to the government, acceptedthat the local authorities should contribute a proportion of their outdoorrelief expenditure for a standard year, but were disposed to argue aboutboth the proportion and the year. They were also concerned that thelocal authorities might have to deal with large numbers of applicantsturned down by the UAB for refusing training. Chamberlain complained

to his sister on 9 December:

The Local Authorities have been very stupid over theUnemployment Bill. I did think of making a small furtherconcession to the so-called distressed areas but instead of askingfor that they turned up with the old story that the Exchequerought to bear the whole cost. Seeing that we do bear over 95 percent I am rather fed up with this greediness.43

A few days later later, however, he relented and a decision to limit thecontribution demanded of authorities in the distressed areas wasannounced.

The Unemployment Assistance Act

After scrutiny by the House of Lords, the bill received Royal assent andbecame an Act on 28 June 1934. The names of the six members of theUnemployment Assistance Board were announced by the Prime Ministerthe following day. After six months of debate, the effects of the Act onthe unemployed remained almost as uncertain as on the day of the billspublication. Labour MPs certainly did not regard the board as a bodycreated to improve the lot of the unemployed; but perhaps even they

were prepared to suspend judgment until the boards regulations weremade public and it became possible to assess their likely impact. If therehad to be a means test and it could no longer be administered byLabour-controlled local authorities at the expense of the nationalexchequer, it was at least possible that the board would make as good ajob of it as anyone else would have done.

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Reinventing the dole: a history of the Unemployment Assistance Board 1934-1940by Tony Lynesis licensed under the Creative Commons Attribution 3.0 Unported License. To view a copy of this license,

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Reinventing the dole: Chapter 5

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