Foremost among them I place the consideration I have just indicated: that in this way, and in this way alone, it becomes possible for work-people who receive high wages when they are at work, and where habits of expenditure and standards of family living are built up on that basis, to receive when unemployed, adequate relief without that leading to anomalies which in the long run would prove intolerable. But there are many other arguments.
A Model Scheme from Lancashire
About five years ago I had the opportunity of witnessing at very close quarters the working of an unemployment scheme on an industrial basis. The great Lancashire cotton industry was faced during the war with a very serious unemployment problem, owing to the difficulty of transporting sufficient cotton from America. It met that situation with a scheme of unemployment relief, devised and administered by one of those war Control Boards, which in this case was essentially a representative joint committee of employers and employed. The money was raised, every penny of it, from the employers in the industry itself; the Cotton Control Board laid down certain rules and regulations as to the scale of benefits, and the conditions entitling a worker to receive it; and the task of applying those rules and paying the money out was entrusted to the trade unions.
Well, I was in a good position to watch that experiment. I do not think I am a particularly credulous person, or one prone to indulge in easy enthusiasms, and I certainly don’t believe in painting a fairy picture in glowing colours by way of being encouraging. But I say deliberately that there has never been an unemployment scheme in this country or in any other country which has worked with so little abuse, with so few anomalies, with so little demoralisation to any one, and at the same time which has met so adequately the needs of a formidable situation, or given such general satisfaction all round as that Cotton Control Board scheme.
I cannot describe as fully as I should like to do the various features which made that scheme attractive, and made it a success. I will take just one by way of illustration. It is technically possible in the cotton trade to work the mills with relays of workers, so that if a mill has 100 work-people, and can only employ 80 work-people each week, the whole 100 can work each for four weeks out of the five, and “play off,” as it is called, in regular sequence for the fifth week. And that was what was done for a long time. It was called the “rota” system; and the “rota” week of “playing off” became a very popular institution. Under that system, benefits which would have been far from princely as the sole source of income week after week—they never amounted to more than 30/- for a man and 18/- for a woman—assumed a much more liberal aspect. For they came only as the occasional variants of full wages; and they were accompanied not by the depressing circumstances of long-continued unemployment, but by what is psychologically an entirely different and positively exhilarating thing, a full week’s holiday. That meant that the available resources—and one of the difficulties of any scheme of unemployment relief is that the resources available are always limited—did much more to prevent misery and distress, and went much further towards fulfilling all the objects of an unemployment scheme than would have been possible otherwise.
That system was possible in the cotton trade; in other trades it might be impossible for technical reasons, or, where possible, it might in certain circumstances be highly undesirable. The point I wish to stress is that under an industrial scheme you have an immense flexibility, you can adapt all the details to the special conditions of the particular industry, and by that means you can secure results immeasurably superior to anything that is possible under a universal State system. Moreover, if certain features of the scheme should prove in practice unsatisfactory, they can be altered with comparatively little difficulty. You don’t need to be so desperately afraid of the possibility of making a mistake as you must when it is a case of a great national scheme, which can only be altered by Act of Parliament.
The Moral Obligation of Industries
I do not underrate the difficulty of applying this principle of industrial relief over the whole field of industry. There is the great difficulty of defining an industry, or drawing the lines of demarcation between one trade and another. I have not time to elaborate those difficulties, but I consider that they constitute an insuperable obstacle to anything in the nature of an Act of Parliament, which would impose forcibly upon each industry the obligation to work out an unemployment scheme. The initiative must come from within the industry; the organisations of employers and employed must get together and work out their own scheme, on their own responsibility and with a free hand. And, if it happens in this way—one industry taking the lead and others following—these difficulties of demarcation become comparatively unimportant. You can let an industry define itself more or less as it likes, and it does not matter much if its distinctions are somewhat arbitrary. It is not a fatal drawback if some firms and work-people are left outside who would like to be brought in. And if there are two industries which overlap one another, each of which is contemplating a scheme of the kind, it is a comparatively simple matter for the responsible bodies in the two industries to agree with one another as to the lines of demarcation between them, as was actually done during the war by the Cotton Control Board and the Wool Control Board, with practically no difficulty whatever. But for such agreements to work smoothly it is essential that the industries concerned should be anxious to make their schemes a success; and that is another reason why you cannot impose this policy by force majeure upon a reluctant trade. It is in the field of industry that the real move must be made.
But I think that Parliament and the Government might come in to the picture. In the first place, the ordinary national system of unemployment relief, which must in any case continue, might be so framed as to encourage rather than to discourage the institution of industrial schemes. Under the Insurance Act of 1920 “contracting out” was provided for, but it was penalised, while at the present moment it is prohibited altogether. I say that it should rather be encouraged, that everything should be done, in fact, to suggest that not a legal but a moral obligation lies upon each industry to do its best to work out a satisfactory unemployment scheme. And, when an industry has done that, I think the State should come in again. I think that the representative joint committee, formed to administer such a scheme, might well be endowed by statute with a formal status, and certain clearly-defined powers—such as the Cotton Control Board possessed during the war—of enforcing its decisions.
But—and, of course, there is a “but”—we cannot expect very much from this in the near future. We must wait for better trade conditions before we begin; and, as I have already indicated, the prospects of really good trade in the next few years are none too well assured. For a long time to come, it is clear, we must rely upon the ordinary State machinery for the provision of unemployment relief; and, of course, the machinery of the State will always be required to cover a large part of the ground. The liability which an industry assumes must necessarily be strictly limited in point of time; and there are many occupations in which it will probably always prove impracticable for the occupation to assume even a temporary liability. For the meantime, at any rate, we must rely mainly upon the State machinery. Is it possible to improve upon the present working of this machinery? I think it is. By the State machinery I mean not merely the Central Government, but the local authorities and the local Boards of Guardians.