Labour policy—false and true

by Lynden Livingston Macassey

The Memorandum claimed maintenance, apart from the Poor Law, for all persons who were unemployed and for whom no suitable work could be found. Where persons were entitled to unemployment benefit from the Trade Unions they should receive it and in addition be paid unemployment benefit under the Unemployment Insurance Acts; the rate of benefit, under those Acts, to be increased to a sum to be fixed in regard to the prevailing cost of living. Unemployed persons who did not receive benefit under the Acts, and those who had received it, but had run out of it, should be paid maintenance up to a total sum per week fixed in due relation to the cost of living. Trade Unions paying unemployment benefit were to receive a Government subsidy.

In addition the Memorandum called for wide extension of the National Insurance Act, 1911, and for abolition of its restriction to a limited number of trades, and also for amendment of the National Insurance (Part II) (Munition Workers) Act, 1916, which brought in munition workers and persons engaged in metal and chemical industries under the Act of 1911, and created, it was said, invidious distinctions, as for example, between a worker who would be insured if engaged on a particular article needed for use in war, but who would not be insured if engaged on the same type of article when it was needed for ordinary commercial use. The Memorandum also called for amendment of the Act of 1916 in regard to its application to women, and for the extension generally to women of the National Unemployment Insurance Scheme.

The London Resolution of 1918

When one passes to the year 1918, we find no indication whatever that the Labour Party had any premonition of the decline in trade which commenced in the spring of 1920, or were gifted with any widening vision as to the remedies required to meet it. This appears from the proceedings of the Labour Party’s Annual Conference in that year, and from the resolution which was passed on the prevention of unemployment. This resolution, after declaring that the years immediately following the war would probably include periods of grave dislocation of profit-making industry, called upon the Government to arrange the carrying out of the next succeeding ten years’ programme of national and local government works, including housing, schools, roads, railways, canals, harbours, afforestation, reclamations, etc., in such a way as “any temporary congestion of the labour market may require.” This resolution solemnly and without reservation committed the Labour Party to this sweeping generalization:—“Now that it is known that all that is required to prevent the occurrence of any widespread or lasting unemployment is that the aggregate total demand for labour should be maintained year in and year out at an approximately even level, and that this can be secured by nothing more difficult or revolutionary than a sensible distribution of the public orders for works and services so as to keep always up to the prescribed total the aggregate public and capitalist demand for labour, together with the prohibition of overtime in excess of the prescribed normal working day, there is now no excuse for any Government which allows such a calamity as widespread or lasting unemployment ever to occur.”

One can thus realize what, up to the end of 1918, were the sovereign panaceas of the Labour Party for the prevention of unemployment after the war. Let us proceed to trace from and after 1919 the recommendations of Labour, which it is now said, had they been adopted by the Government, would have averted the present conditions of unemployment.

The Prevention of Unemployment Bill, 1919

On March 21, 1919, the Labour Party brought to second reading in the House of Commons their “Prevention of Unemployment Bill,” which embodied only the old principles that Labour had been advocating since 1900, to meet seasonal and cyclical unemployment. The Bill in no sense met the present abnormal trade depression, and was rejected. It proposed to vest in the Minister of Labour all powers and duties in regard to unemployment insurance, the prevention of destitution, and the relief of the able-bodied poor. It provided that the Minister should advise the Treasury how the various Government works and services should be organized and apportioned over different seasons of each year, and spread over different years, so as “to regularize” the national aggregate demand for employment, including both public and private employment, as between the different seasons of the year, and as between the good and bad years of a trade cycle, and so, by maintaining at an approximately constant level the national aggregate demand for labour both by private employer and by public departments, prevent irregularity of employment. It also put the Minister under an obligation to establish and maintain such institutions as he should deem requisite, in which he was to provide for able-bodied persons entitled to public assistance under the Act, and for whom no suitable situation could be found, such employment of an educational character and such physical and mental and technological training as he should think fit. All persons admitted to such institutions were to be provided by the Minister with proper maintenance. The Bill in addition proposed to constitute as the local unemployment authority, who were to act through an unemployment committee, the London County Council in respect of the Administrative County of London, and the council of every borough and urban district of a population of 20,000 or over, and the county councils in respect of the rest of an administrative county. Each such council, acting through the unemployment committee, was to be bound to organize all work—manual or clerical—under its control, so as to maintain the labour demand in its district at a constant uniform level. In addition, each such council was to be put under obligation to provide every person, for whom suitable employment could not be found, with such maintenance as its medical officer of health might certify to be necessary to maintain such unemployed person and his dependents in a state of physical efficiency. All the expenses of the local unemployment authorities in carrying out the Act were to be met out of the local rates to the extent of a 1d. rate; all expenses over the proceeds of a 1d. rate were to be recovered from the Treasury. There was no limit whatever to the charge under the Bill[9] upon national funds.

Labour’s Recommendations to the Industrial Conference, 1919

The next important declaration in 1919 by Labour in respect of unemployment is contained in the Joint Report of the Provisional Joint Committee presented to the Meeting of the Industrial Conference, Central Hall, Westminster, April 4, 1919 (Parliamentary Paper, 1920, Cmd. 501). It will be remembered that on February 27, 1919, the Government called together, under the shadow of a miners’ strike, a Conference consisting of representatives of employers and Trade Unions to consider the industrial situation. That Conference, after expressing its opinion that any preventible dislocation of industry was always to be deplored and in the then existing critical period of reconstruction might be disastrous to the interests of the nation, resolved to appoint a Joint Committee to consider, amongst other things, the question of unemployment and its prevention. A unanimous report was presented by the Joint Committee, signed by the employers’ representatives and also by the Trade Unions’ representatives, the latter representing all the great Trade Unions, with the exception of the railwaymen, the miners and the transport workers.

In their Report the Committee stated that they had not had sufficient time at their disposal to investigate thoroughly the problem of unemployment, and therefore would only indicate briefly some of the steps which might be taken to minimize it or alleviate it. As aids in this direction they recommended organized short-time, the working of overtime only in special cases, postponement, until bad times, of Government non-urgent contracts, prosecution without delay of a comprehensive housing programme, State development of new industries such as afforestation, reclamations of waste lands, development of inland waterways and, in agricultural districts, the development of light railways and/or road transport. In addition the Committee recommended that the normal provision for maintenance during unemployment should be on a more adequate scale, and be wider in its application than was provided by the then existing Unemployment Insurance Acts, and advocated the extension of the National Unemployment Insurance Scheme to underemployment (i.e. workers on short-time or casual employment for less than a full working week). They also recommended the provision of facilities whereby workers while unemployed and in receipt of unemployment benefit could obtain access without payment of fees to opportunities for continuing their education and improving their qualifications. Child-labour, they advised, should in times of unemployment be limited, and sickness and infirmity benefits increased, the age of qualification for old age pensions reduced and the amount of the pension increased.