each town. We hope they will become the labour market. They may, where
necessary, provide an office where the Trade Board, if there is one,
will hold its meetings. We desire to co-operate with trade unions on
cordial terms, while preserving strict impartiality between capital
and labour in disputed matters. It may, for instance, be possible for
trade unions to keep their vacant-book in some cases at the exchanges.
The structure of those Exchanges may in some cases be such as to
enable us to have rooms which can be let to trade unions at a rent,
for benefit and other meetings, so as to avoid the necessity under
which all but the strongest unions lie at the present time of
conducting their meetings in licensed premises. The Exchanges may, as
they develop, afford facilities for washing, clothes-mending, and for
non-alcoholic refreshments to persons who are attending them. Separate
provision will be made for men and for women, and for skilled and for
unskilled labour. Boy labour will be dealt with in conjunction with
the local Education Authorities; and travelling expenses may be
advanced on loan, if the management of the Exchange think fit, to
persons for whom situations have been found.
So much for the policy of Labour Exchanges. That is a policy complete
in itself. It would be considerable if it stood alone; but it does not
stand alone. As my right hon. friend the Chancellor of the Exchequer
has announced in his Budget speech, the Government propose to
associate with the policy of Labour Exchanges a system of Unemployment
Insurance.
The House knows that the Minority Report advocates a system of
compulsory labour exchanges, that no person shall engage any man for
less than a month except through a Labour Exchange. That is not the
proposal we are making. We are making a proposal of voluntary Labour
Exchanges. I am quite ready to admit that no system of voluntary
Labour Exchanges can deal adequately with the evils and difficulties
of casual labour; but there is one conclusive reason against
compulsory Labour Exchanges at the present time. To establish a
system of compulsory Labour Exchanges in order to eliminate casual
labour, and so to divide among a certain proportion of workers all
available employment, would be absolutely and totally to cast out at
the other end a surplus of unemployed: and to do this before
preparations have been made for dealing with that surplus, would be to
court an administrative breakdown which could not fail to be attended
with the gravest possible disaster. Until poor law reform has made
further progress, to establish a compulsory system of Labour Exchanges
would only increase and not diminish the miseries with which we are
seeking to cope.
We have, therefore, decided that our system of labour exchanges shall
be voluntary in its character. For that very reason there is a great
danger, to which I have never shut my eyes, that the highest ranks of
labour, skilled workers, members of strong trade unions, would not
think it necessary to use the Exchanges, but would use the very
excellent apparatus which they have established themselves; that
therefore this expensive system of Exchanges which we are calling into
being would come to be used only by the poorest of the workers in the
labour market, and, consequently, would gradually relapse and fall
back into the purely distress machinery and non-economic machinery
from which we are labouring to extricate and separate it. It is for
that reason, quite apart from the merits of the scheme of unemployment
insurance, that the Government are very anxious to associate with
their system of Labour Exchanges a system of unemployed insurance. If
Labour Exchanges depend for their effective initiation and
establishment upon unemployment insurance being associated with them,
it is equally true to say that no scheme of unemployment insurance can
be worked except in conjunction with some apparatus for finding work
and testing willingness to work, like Labour Exchanges. The two
systems are complementary; they are man and wife; they mutually
support and sustain each other.
So I come to Unemployment Insurance. It is not practicable at the
present time to establish a universal system of unemployment
insurance. We, therefore, have to choose at the very outset of this
subject between insuring some workmen in all trades or all workmen in
some. In the first case we should have a voluntary, and in the second
a compulsory system. The risk of unemployment varies so much between
one man and another owing to relative skill, character, demeanour, and
other qualities, that any system of State-aided voluntary insurance is
utilised mainly by those most liable to be unemployed, and,
consequently, a preponderance of bad risks is established against the
Insurance Office fatal to its financial stability. On the other hand,
a compulsory system of insurance, which did not add to the
contribution of the worker a substantial contribution from outside,
would almost certainly break down, because of the refusal of the
higher class of worker to assume, unsupported, a share of the burden
of the weaker members of the community.
We have decided to adopt the second alternative, and our insurance
system will, in consequence, be based upon four main principles. It
will involve contributions from workmen and employers; it will receive
a substantial subvention from the State; it will be organised by
trades; it will be compulsory upon all--employers and employed,
skilled and unskilled, unionists and non-unionists alike--within
those trades. The hon. Member for Leicester[15] with great force
showed that to confine a scheme of unemployment insurance merely to
trade unionists would be trifling with the subject. It would only be
aiding those who have, thank God, been most able to aid themselves,
without at the same time assisting those who hitherto, under existing
conditions, have not been able to make any effective provision.
To what trades ought we, as a beginning, to apply this system of
compulsory contributory unemployment insurance? There is a group of
trades specially marked out for the operation of such a policy. They
are trades in which unemployment is not only high, but chronic, for
even in the best of times it persists; in which it is not only high
and chronic, but marked by seasonal and cyclical fluctuations, and in
which, wherever and howsoever it occurs, it takes the form not of
short time or of any of those devices for spreading wages and
equalising or averaging risks, but of a total, absolute, periodical
discharge of a certain proportion of the workers. The group of trades
which we contemplate to be the subject of our scheme are these:
house-building, and works of construction, engineering, machine-and
tool-making, ship-building and boat-building, making of vehicles, and
mill-sawing.
That is a very considerable group of industries. They comprise,
probably at the present time, 21/4 millions of adult males. Two and a
quarter millions of adult males are, roughly speaking, one-third of
the population of these three kingdoms engaged in purely industrial
work; that is to say, excluding commercial, professional,
agricultural, and domestic occupations. Of the remaining two-thirds of
the industrial population, nearly one-half are employed in the textile
trades, in mining, on the railways, in the merchant marine, and in
other trades, which either do not present the same features of
unemployment which we see in these precarious trades, or which, by the
adoption of short time or other arrangements, avoid the total
discharge of a proportion of workmen from time to time. So that this
group of trades to which we propose to apply the system of
unemployment insurance, roughly speaking, covers very nearly half of
the whole field of unemployment; and that half is, on the whole,
perhaps the worse half.
The financial and actuarial basis of the scheme has been very
carefully studied by the light of all available information. The
report of the actuarial authorities whom I have consulted leaves me in
no doubt that, even after all allowance has been made for the fact
that unemployment may be more rife in the less organised and less
highly skilled trades than in the trade unions who pay unemployment
benefits--which is by no means certain--there is no doubt whatever
that a financially sound scheme can be evolved which, in return for
moderate contributions, will yield adequate benefits. I do not at this
stage propose to offer any figures of contributions or benefits to the
House. I confine myself to stating that we propose to aim at a scale
of benefits which would be somewhat lower both in amount and in
duration of payments, than that which the best-organised trade unions
provide for their own members, but which, at the same time, should
afford a substantial weekly payment extending over by far the greater
part of the average period of unemployment of all unemployed persons
in these trades.
In order to enable such a scale of benefits to be paid, we should have
to raise a total sum of something between 5d. and 6d. per week per
head, and this sum will be met by contributions, not necessarily
equal, from the State, the workman, and the employer. For such
sacrifices, which are certainly not extortionate, and which, fairly
adjusted, will not hamper industry nor burden labour, nor cause an
undue strain on public finance, we believe it possible to relieve a
vast portion of our industrial population from a haunting and constant
peril which gnaws the very heart of their prosperity and contentment.
The House will see the connection of this to the Labour Exchanges. The
machinery of the insurance scheme has been closely studied, and, as at
present advised, we should propose to follow the example of Germany in
respect of Insurance Cards or Books, to which stamps will be affixed
week by week. When a worker in an insured trade loses his employment,
all he will have to do is to take his card to the Labour Exchange,
which, working in conjunction with the Insurance Office, will find him
a job or pay him his benefit.
The relation of the whole scheme of insurance to the present voluntary
efforts of trade unions requires, and will receive, the most anxious
consideration, and I am in hopes that we shall be able to make
proposals which would absolutely safeguard trade unions from the
unfair competition of a national insurance fund, and will indeed act
as a powerful encouragement to voluntary organisations which are
providing unemployed benefit.
I have thought it right to submit these not inconsiderable proposals
in general outline to the House of Commons at this early stage, in
order that the proposals for Labour Exchanges which we are now putting
forward may be properly understood, and may not be underrated or
misjudged. We cannot bring the system of unemployment insurance before
Parliament in a legislative form this year for five reasons: We have
not now got the time; we have not yet got the money; the finance of
such a system has to be adjusted and co-ordinated with the finance of
the other insurance schemes upon which the Chancellor of the Exchequer
is engaged; the establishment of a system of Labour Exchanges is the
necessary forerunner and foundation of a system of insurance; and,
lastly, no such novel departure as unemployment insurance could
possibly be taken without much further consultation and negotiation
with the trade unions and employers specially concerned than the
conditions of secrecy under which we have been working have yet
allowed. This business of conference and consultation of the fullest
character will occupy the winter, when the Board of Trade will confer
with all parties affected, so that the greatest measure of agreement
may be secured for our proposals when they are next year presented in
their final form.
It is only necessary for me to add that the pressure and prospect of
these heavy duties have required me to make a re-arrangement of the
Labour Department of the Board of Trade. I propose to divide it into
three sections. The first will be concerned with Wages questions and
Trade disputes, with Arbitration, Conciliation, and with the working
of the Trade Boards Bill, should it become law; the second, with
Statistics, the Census of Production, Special Inquiries, and _The
Labour Gazette_; and the third, with Labour Exchanges and Unemployment
Insurance.
One of the functions of the last section will be to act as a kind of
intelligence bureau, watching the continual changes of the labour
market here and abroad, and suggesting any measure which may be
practicable, such as co-ordination and distribution of Government
contracts and municipal work, so as to act as a counterpoise to the
movement of the ordinary labour market, and it will also, we trust, be
able to conduct examinations of schemes of public utility, so that
such schemes can, if decided upon by the Government and the Treasury,
be set on foot at any time with knowledge and forethought, instead of
the haphazard, hand-to-mouth manner with which we try to deal with
these emergencies at the present time.
Such are the proposals which we submit in regard to the organisation
section of this problem. I have carefully confined myself to that
section. I have not trespassed at all upon the other no less important
or scarcely less important branches, and I am quite certain this
Parliament will gladly devote whatever strength it possesses to
attempting to grapple with these hideous problems of social chaos,
which are marring the contentment and honour of our country, and
which, neglected, may fatally affect its life and its strength.
FOOTNOTES:
[15] Mr. Ramsay MacDonald.
III
THE BUDGET
THE BUDGET RESOLUTIONS (May 4, 1909) 277
THE BUDGET AND NATIONAL INSURANCE (May 23, 1909) 297
THE LAND AND INCOME TAXES (July 17, 1909) 318
THE BUDGET AND THE LORDS (July 26, 1909) 344
THE SPIRIT OF THE BUDGET (Sept. 5, 1909) 357
THE BUDGET AND PROPERTY (Oct. 7, 1909) 384
THE CONSTITUTIONAL MENACE (Oct. 9, 1909) 405
THE BUDGET RESOLUTIONS
HOUSE OF COMMONS, _May 4, 1903_
The Leader of the Opposition this afternoon told us that we were at
the beginning of what would be a very complex and a very protracted
discussion. If that discussion continues as it has begun, the
Government will have no reason to complain of it. We have made
extensive and even daring proposals. Those proposals have been
accepted and, on the whole, even acclaimed by the public at large, and
they have not been substantially challenged in this House. The Leader
of the Opposition, it is true, devoted his reasoned and temperate
speech to making a careful inquiry into the foundations and the
character of certain of the taxes by which my right hon. friend
proposes to raise the revenue for the year; and I gathered he
accepted, with such reservations as are proper to all engaged in a
large discussion, and as are particularly appropriate to a Party
leader, the general principle of differentiation of taxation in regard
to the amount of property, but that he demurred to and condemned
differentiation in regard to the character of property. The right hon.
gentleman singled out for special censure and animadversion the two
sets of taxes in relation to land and to the licensed trade. He used
an expression about some of the forms of taxation proposed by the
Chancellor of the Exchequer which was a striking one. He said that
they diverged from the principles which have hitherto dominated
civilised society.
Even at the risk of that accusation we on this side of the House have
always taken and will always assert an entirely different position in
regard to the taxation of land and of liquor licences from that of the
taxation of other classes of property. The immemorial custom of nearly
every modern State, the mature conclusions of many of the greatest
thinkers, have placed the tenure, transfer, and obligations of land in
a wholly different category from other classes of property. The mere
obvious physical distinction between land, which is a vital necessity
of every human being and which at the same time is strictly limited
in extent, and other property is in itself sufficient to justify a
clear differentiation in its treatment, and in the view taken by the
State of the conditions which should govern the tenure of land from
that which should regulate traffic in other forms of property. When
the right hon. gentleman seeks by comparisons to show that the same
reasoning which has been applied to land ought also in logic and by
every argument of symmetry to be applied to the unearned increment
derived from other processes which are at work in our modern
civilisation, he only shows by each example he takes how different are
the conditions which attach to the possession of land and speculation
in the value of land from those which attach to other forms of
business speculation.
"If," he inquires, "you tax the unearned increment on land, why don't
you tax the unearned increment from a large block of stocks? I buy a
piece of land; the value rises; I buy stocks; their value rises." But
the operations are entirely dissimilar. In the first speculation the
unearned increment derived from land arises from a wholly sterile
process, from the mere withholding of a commodity which is needed by
the community. In the second case, the investor in a block of shares
does not withhold from the community what the community needs. The one
operation is in restraint of trade and in conflict with the general
interest, and the other is part of a natural and healthy process, by
which the economic plant of the world is nourished and from year to
year successfully and notably increased.
Then the right hon. gentleman instanced the case of a new railway and
a country district enriched by that railway. The railway, he
explained, is built to open up a new district; and the farmers and
landowners in that district are endowed with unearned increment in
consequence of the building of the railway. But if after a while their
business aptitude and industry creates a large carrying trade, then
the railway, he contends, gets its unearned increment in its turn. But
the right hon. gentleman cannot call the increment unearned which the
railway acquires through the regular service of carrying goods,
rendering a service on each occasion in proportion to the tonnage of
goods it carries, making a profit by an active extension of the scale
of its useful business--he cannot surely compare that process with
the process of getting rich merely by sitting still. It is clear that
the analogy is not true.
We are further told that the Budget proposals proceed on the
assumption that there is a corner in land, and that communities are
denied the opportunity of getting the land required, whereas, it is
asserted, there is in fact nothing approaching a corner in land. I do
not think the Leader of the Opposition could have chosen a more
unfortunate example than Glasgow. He said that the demand of that
great community for land was for not more than forty acres a year. Is
that the only demand of the people of Glasgow for land? Does that
really represent the complete economic and natural demand for the
amount of land a population of that size requires to live on? I will
admit that at present prices it may be all that they can afford to
purchase in the course of a year. But there are one hundred and twenty
thousand persons in Glasgow who are living in one-room tenements; and
we are told that the utmost land those people can absorb economically
and naturally is forty acres a year. What is the explanation? Because
the population is congested in the city the price of land is high upon
the suburbs, and because the price of land is high upon the suburbs
the population must remain congested within the city. That is the
position which we are complacently assured is in accordance with the
principles which have hitherto dominated civilised society.
But when we seek to rectify this system, to break down this unnatural
and vicious circle, to interrupt this sequence of unsatisfactory
reactions, what happens? We are not confronted with any great argument
on behalf of the owner. Something else is put forward, and it is
always put forward in these cases to shield the actual landowner or
the actual capitalist from the logic of the argument or from the force
of a Parliamentary movement. Sometimes it is the widow. But that
personality has been used to exhaustion. It would be sweating in the
cruellest sense of the word, overtime of the grossest description, to
bring the widow out again so soon. She must have a rest for a bit; so
instead of the widow we have the market-gardener--the market-gardener
liable to be disturbed on the outskirts of great cities, if the
population of those cities expands, if the area which they require for
their health and daily life should become larger than it is at
present.
I should like to point out to the Committee that the right hon.
gentleman, in using this argument about the market-gardener,
recognises very clearly--and I think beyond the possibility of a
withdrawal--the possibility of these cities expanding and taking up a
larger area of ground in consequence of the kind of taxation which my
right hon. friend in his land taxes seeks to impose. But let that
pass. What is the position disclosed by the argument? On the one hand
we have one hundred and twenty thousand persons in Glasgow occupying
one-room tenements; on the other, the land of Scotland. Between the
two stands the market-gardener, and we are solemnly invited, for the
sake of the market-gardener, to keep that great population congested
within limits that are unnatural and restricted to an annual supply of
land which can bear no relation whatever to their physical, social,
and economic needs--and all for the sake of the market-gardener, who
can perfectly well move farther out as the city spreads, and who would
not really be in the least injured.
We take the view that land cannot be regarded as an ordinary
commodity, nor are we prepared to place publicans' licences in the
same position as ordinary property. A licence is a gift from the
State, and the licensed trade is subject to special restrictions and
special taxation; this has been recognised by all parties and by all
Governments. The position in regard to licences, as we know perfectly
well, has been sensibly and, indeed, entirely altered in the course of
the last few years. We have seen the assertion on the part of the
licensed trade of their right to convert their annual tenancy of a
licence from what it has been understood to be, to a freehold, and in
that position they must face the logical consequences of the arguments
they have used and of their action. If there are any hardships to them
in the taxation proposed, let the hardships be exposed to Parliament
and they will be considered in no spirit of prejudice or malice. Do
not, however, let us have attempts to represent that the tax which
involves an increase in the cost of production extinguishes the
profits of the industry. It does not necessarily affect the profits of
the industry; it is not a deduction from resultant profits; it is an
incident in the turnover. If there are hard cases and special
instances, we are prepared to meet them with the closest attention and
with a desire to avoid severity or anything like the appearance of
harsh treatment of individuals. But we decline to regard licences or
land on the same footing as ordinary property. Licences are not to be
regarded as ordinary private property, but as public property which
ought never to have been alienated from the State.
No one will deny that we are making very considerable proposals to
Parliament for the finance of the year; but the Conservative Party
have gravely compromised their power of resistance. Those who desire
to see armaments restricted to the minimum consistent with national
security, those who labour to combat the scares of war, and to show
how many alarms have no foundation,--those are not ill-situated, if
they choose to make criticisms on the scale and scope of the finance
required for the year's expenditure. But an Opposition that day after
day exposes the First Lord of the Admiralty and the Prime Minister to
a rain of questions and cross-questions, the only object of which, or
an important object of which, is to promote a feeling of insecurity,
involving demands for new expenditure of an almost indefinite
character, those who, like the right hon. Member for Dover,[16] hurry
to and fro in the land saying--or was it singing?--"We want eight, and
we won't wait"--they, at least, are not in the best position to tell
the taxpayer to call on some one else. Surely a reputation for
patriotism would be cheaply gained by clamouring for ships that are
not needed, to be paid for with money that is to come from other
people.