Sir Alfred Watson, the Government Actuary, before the Committee of Inquiry on the Labour Exchanges, pointed out the great financial benefit it would be to the principal industries to provide their own unemployment insurance, and referred to the large margin there would be available for the actual costs of the benefits. In a most interesting pamphlet published on “Unemployment Insurance,” Mr. Henry Lesser, the President of the National Federation of Employees Approved Societies, states that in one industrial undertaking employers and employed pay in respect of the National Unemployment Insurance Scheme over £22,000 per year, but that in normal times the persons employed in that particular firm do not receive in the aggregate in unemployment pay more than £800 a year, a case, he says, which may be taken as typical of the whole of the industry in question.
One outstanding advantage which would result from each industry effecting its own unemployment insurance would be the feeling it must undoubtedly engender in the minds of both employers and Trade Unions of their responsibility for the combined working of the industry, and the effect it is bound to have in producing a better spirit between the two parties and amongst the men, who will no longer feel that they are taken on and discharged merely as it suits the interests of the firm. A thorough investigation should be made as to what industries could undertake their own unemployment insurance, and whether it is better that they should do so, or come into a general scheme of insurance by all industries. The ordinary objection of employers and Trade Unions representing “good” industries, i.e. those with a low rate of unemployment, is that they are paying for the “bad” industries with a high rate, but is not that rather the essence of insurance? It may well be that only insurance by all industries acting collectively is possible. If such turns out to be the case, that plan should be adopted ready for carrying into practical operation on the approach of more normal times. Industries which rely mainly on casual labour are a more difficult proposition. Decasualization is essential, and that must be effected by some means of restricting the free influx of labour into the industry, as has been done in the Dock Labour Scheme in Liverpool. The efficiency of the Liverpool method is undoubtedly due to the co-operation between the dock labour employers and the Unions; it has been most strikingly successful. It affords a basis for procedure in very many industries. There must, however, I am afraid, remain a residuum of unemployment insurance to be handled by the State, in the absence of any other authority, on the lines presumably of the present National Unemployment Insurance Scheme, but it would be reduced to small proportions if all the great industries of the country were providing for their own unemployment.
Reform of Present Out-Door Relief System
In connection with unemployment, the present system of Poor Law relief wants overhauling. The provision of relief by the Guardians (in addition to, or substitution for, unemployment insurance benefit) on varying standards in different places throughout the country is extremely wasteful and disturbing to social harmony. If this is taken out of the hands of the Guardians, as has already been recommended by both the majority and minority reports of the Poor-Law Commission, and committed into the hands of some local authority—because local responsibility is essential for the spending of money raised by local rates—it would mark progress of no uncertain kind. Absolute standardization is impossible, because of the varying social circumstances and indeed social outlook in different parts of the country, but, after allowing for this, much greater approximation to uniformity could be secured.
Unemployment Insurance by Firms
Without any doubt the best approach to insurance by industries or by industry as a whole is to start with insurance by firms. An admirable beginning has been made in this direction by the National Federation of Employees Approved Societies—particulars of this scheme can be obtained from the Secretary to the Federation, c/o British Thomson-Houston Co., Ltd., Rugby—it is also described with great clearness by Mr. Lesser in the pamphlet referred to on p. 260. The experience of the Federation is most instructive. In many works, before the days of National Health Insurance, there were sick clubs which provided for members unemployed through illness, benefits from a fund to which employers and employed alike contributed. Both employers and employed viewed, with considerable regret, the proposed absorption of these clubs into the new Approved Societies established under the Health Insurance Act, and to obviate that fate reconstituted their clubs with the approval of the Insurance Commissioners into “Works Societies,” and obtained official sanction for these Societies to administer the State scheme. Later these Works Societies decided to undertake the administration of unemployment benefit at their respective works under Section 17 of the Unemployment Insurance Act, 1920. There were three conditions precedent: first, that the Society must provide for payment out of its own voluntary funds of an additional unemployment benefit equal to one-third of that payable under the Act—that is to say, if the State benefit was 15s. the Society must add to that at least another 5s. out of its private fund and so pay a total benefit of 20s. The second stipulation was that the Society must have a system for ascertaining the rates of wages and the general conditions of employment prevailing in all occupations in which its members were engaged; these particulars were always well-known, and there was not much difficulty about that. The third requirement was that the Society should have an effective system of ascertaining vacancies for employment—this meant some organization distinct from the Labour Exchanges. Such an organization was finally obtained through the co-operation of the local Chambers of Commerce, who receive from their associated firms particulars of vacancies which the Chambers send on to the different Works Societies. The scheme works exceedingly well. It was first adopted by the South Metropolitan Gas Co., and later by the Gas Light and Coke Co., Messrs. Debenhams, the British Thomson-Houston Co., Ltd., Taylor Bros. & Co., J. T. & J. Taylor, Ltd., and a number of other firms. The Society acts as the State’s agent with regard to paying out the State benefits, and in addition pays at the same time a supplementary benefit of one-third of the State benefit, for which an extra contribution is generally levied on the workers at the rate of 2d. per week, and most of the employers contribute to the supplementary benefit fund. One cannot fail to be struck in reading Mr. Lesser’s pamphlet by the extraordinary success of the Federation’s scheme in producing co-operation and good feeling between masters and men. With the experience which firms get through putting into operation a method of unemployment insurance of this kind, the way is opened for the institution of a wider scheme of grouped firms, and ultimately for insurance by industry or industries.
CHAPTER XXV
THE RIGHT RELATIONSHIP BETWEEN EMPLOYERS AND EMPLOYED
1. CONTENTMENT IN INDUSTRY (b)
Human Status of the Worker in Industry—The Slowness of Ordinary Conciliation Machinery—The Whitley Councils Scheme—Joint National and District Industrial Councils—Works’ Committees—The Slow Progress of Works’ Committees—The Success of Works’ Committees on the Clyde—Executive Management a Matter for Employers.