and shows that we have sufficient information and that the safeguards which we present in the Bill are sufficient to enable us to offer the proposal as an acceptable one to the House of Commons. May I point out this, that the postponement of the proposals would give us no further information than we have at the present time. Such data as we have, such bases for calculation as we have at the present moment, will speedily increase; and we hope if the Bill is passed, and these insurance proposals are introduced and applied to certain trades, before long we shall have better experience in order, if necessary, to extend the system still further. I would point out, and I think it is an important point, that the data on which we are acting the data of our actuary on which he proceeded based on the actual experience for many years past of the great trade unions, including in insured trades something like 300,000 persons, and the data seem to me to be very sound, direct data, founded entirely on the payment of unemployed benefits. . . .

are

Then there is a further argument, perhaps of a rather more specious character, which has been raised on the first reading and since. It is that we should not carry out the compulsory part of this scheme, but make a beginning with voluntary insurance alone. That also, I hope, will be strenuously resisted by the House, because without the compulsory part we cannot make a real effort — we cannot carry out a comprehensive system of National Insurance against unemployment. All the experience abroad goes to show that a purely voluntary scheme will not really be of an effective character. It naturally includes bad risks, and almost from the bcginning it is bound to be more or less financially unsound. The only scheme a scheme which has some supporters, and which no doubt in itself has had some success is what is called the Ghent system. That scheme we have already adopted in our Bill as regards the voluntary part of it, but, as the sole contribution of this great question, it is totally and wholly ineffective. The Ghent system is this: it is a simple and direct contribution of recognised associations, which in these cases means trade unions alone, and of

a State contribution to such unemployment benefits as they give. We desire to encourage not only those who are at present able to insure for themselves, but we are even more desirous by compulsion to secure the provision of unemployed benefits for those who for any reason at present are unable or unwilling to insure themselves. . .

The scheme is obviously confined to certain classes of the population, and it would certainly be fatal to any scheme of insurance to say that it must not be applied to limited cases. That has never deterred us from attempting any social reform or any social legislation which, in the first instance, applied to a limited class. I contend, on the other hand, that we are entitled - and we are doing it every day · to utilise the resources of the community for the purpose of instituting such reforms, even though of a limited character, and applying them only to limited classes. I think we can say that, although in a sense this contribution is to a limited class and a limited number, it is really a contribution benefiting all trades and all classes of the community. . .

Allegations have been made in many quarters that the scheme of the Bill as a whole is going to throw great additional burdens on workmen, employers, and the State. That I deny altogether. Insurance against sickness and unemployment will involve no new burden. The burden exists at present, but in future it will be better distributed and more easily and equitably borne, and more people will be benefited by this system of insurance. Take the case of unemployment. At present the burden appears in the national ledger as pauperising Poor Law expenditure, as systems of State or municipal doles, and as sudden emergency works which very often are a waste of money. So far as the provident workman is concerned, it is met by the contribution to the trade union, and where he is improvident, it is met by the neighborly assistance he receives, and which is so freely and ungrudgingly given among the working classes, and by the costly realisation of his belongings, costly credit, and costly arrears. In connection with these operations, the man

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is subjected both mentally and physically to the suffering which the unemployment brings in its train. I think it will stand to reason that it must be infinitely better to have permanent machinery to anticipate the rainy day" and to distribute the money more equitably over various interests and more uniformly over the period. I think one can safely assert that the burden, far from being greater, would really be less than before.

There is one other objection to the scheme upon which the House will allow me to say a word. We are told that we ought to differentiate this is an important point our contributions and benefits according to the risks of a trade as a whole, and that we ought to distinguish more between trade and trade, and even distinguish between various sections of a trade. I do not think that will receive the support of my hon. Friends below the gangway. Trade unionism has always preached the solidarity of labour, and that, so far as it goes, the regular man and the irregular man should be put together. We are providing in this Bill for certain differentiation, and as our experience extends we may be able to provide that still further, but I think, at all events, in the first instance, it is very important that we should, as far as possible, take what is called the flat rate and apply it to engineering and shipbuilding and to the other trades in the building construction group, and see how it will work out, and with what justice, to the various interests concerned.

I wish to refer to another point upon which I think there has been on the part of my hon. Friends below the gangway considerable apprehension, and that is in regard to the effect this Bill may have upon trade unions whether the provisions are drafted sufficiently wide to enable a trade union to become and remain an approved society without necessitating any effective alteration in its practice, or in its ordinary functions as a trade union. I can well understand the anxiety that all trade union men have if they feel that the real effect of this Bill is going to undermine or destroy trade unions. These great organisations, built up during many years in

the past, and whose position has become so strong, might very well feel that any proposal whereby their general position was in any way weakened or undermined would be indefensible, and that no such Bill ought to be put on the Statute Book. I am one of those -I have always said so publicly-who believe, and I believe it is the opinion of the House now, that it is not only in the interest of labour itself, but in the interest of employers as well, that these trade unions should be strong, representative, and independent, and I can assure my hon. Friends and the House generally that nothing is further from the object and desire of the framers of the Bill than that when it becomes an Act it should be used as a disruptive force against any trade union.

I have endeavoured to deal with the chief criticism, most of which has been directed against Part II, and some of which has been directed against Part I of the Bill. There is just one other point which I may refer to incidentally. I have seen the scheme criticised with reference to its being too bureaucratic. We are, after all, going to deal with it through the Labour Exchanges, and the voluntary associations through the combination, and we hope co-operation, by means of joint committees of representative employers and workmen. If it can be shown in any way that those panels of referees can be made more representative than those proposed by this Bill, we shall very much welcome any suggestions that can be made; but I can assure the House that our sole desire is to put the system, as far as we can, on a representative basis. . . .

This is our proposal, and this is our contribution to social reform. I am sure that my right hon. Friend, and certainly I, would be the last to claim that in any sense this is a final solution of the problem of sickness or unemployment, but I think it has this great merit, that while it is a considerable step forward in the direction which we all desire to follow, it is not only no obstacle to, but I think it is an avenue towards, the extension of various other systems, also in the same direction. We have founded it, as we believe, on a business basis and on sound actuarial calculations, and we offer it to

the House as a great and beneficent step forward, which, if the House accepts it, will do much to achieve that which we all desire -the improvement of the social condition of the working classes.

Extract 87

LESSONS FROM GERMAN EXPERIENCE

(Sir Rufus Isaacs, Attorney-General, Commons, May 24, 1911)

SIR RUFUS ISAACS1: . . . In the framing of this measure the Chancellor of the Exchequer and those who have been privileged to take part at all in the discussion of the details of this measure have had the incalculable advantage of the experience of the German Empire in relation to this compulsory insurance. Germany has gradually built up a system which by common consent is of a most beneficent character and is working to the advantage not only of the employer, but also of the employed. The White Paper which has been circulated quite recently contains the opinions of a number of German employers which really are most valuable in considering what we can anticipate as the probable result of this measure, certainly upon employers. I am not going to attempt to read them or quote them to this House, but I will summarise them in two or three sentences, and I believe fairly, having regard to the opinions. therein expressed. The general opinion in Germany is that by freeing the working classes from anxiety by reason of sickness, infirmity, and accidents, their conditions of life have been materially bettered, and, from the employers' standpoint, the contributions they make have proved an excellent investment. The insurance law has tended to improve the relations between the employer and the employed, without impairing the independence of the workers. Indeed, if you study the history of the last twenty-five years, the period covered by the insurance legislation in Germany, it will be

1 Parliamentary Debates, Fifth Series, Commons, vol. 26, col. 368 sqq.