I beg to move the Second Reading of the Unemployment Insurance Bill, 1924, which is necessitated by the fact of the high rate of unemployment at present existing in this country, and secondly by the large number of those unemployed who have exhausted all their contributions, on which they could draw benefits, accrued under previous Acts. A few figures with regard to the actual state of unemployment benefit are necessary. The latest returns to hand show that from 18th October, 1923, to the 5th May of this year, 78,685 persons lodged claims for unemployment benefit, these claims having been allowed. Approximately 34,000 had exhausted all right to benefit to which they were entitled on the 12th April of this year; 37,000 had their rights to benefit completely exhausted by the 3rd May. An estimate has been made with regard to the future and that estimate is that approximately 56,000 will have exhausted all benefits to which they might be entitled by the 1st July, and 73,000 would have exhausted all benefit at the end of August. By the 15th October, 1924, there would be no benefit unexhausted. One deduction arises from some of these figures. If you take an applicant for benefit who had been allowed the maximum number of days, that is to say, 156 days, the earliest date by which he could have exhausted his benefit in the second benefit year was the 17th April of this year. I have already stated that 34,000, approximately, had exhausted by the 12th April, all the benefit to which they were entitled. It is clear from those figures that that number have no further credit on the Unemployment Insurance Fund; 34,000 are definitely without further right to benefit from the fund. The balance of 44,685 remain for consideration, and the estimate is that about 19,000 have sufficient contributions to entitle them to the full term of 26 weeks, and some benefit to spare, which would fall into and be available in the next benefit year. Consequently only 19,000 have any hope of benefit in the next insurance year on the statutory basis established by the Act of 1923. That was the position which had to be faced: 78,000 people who had lodged claims which had been allowed, and only 19,000 without any great reduction in the ranks of unemployed, have any right to benefit in the next benefit year. The rest would have benefit completely exhausted and would be left without any resources, as far as the Unemployment Insurance Fund was concerned. That, of course, led immediately to the conclusion that some further provision for the relief of unemployment by way of unemployment benefit was necessary. The only question then to be decided was the manner in which this provision should be made. There was the question of either covenanted benefit or uncovenanted benefit. Uncovenanted benefit is very difficult to check, is much more wasteful even than the covenanted type, and is a severer drain on public funds. The expenditure necessary in connection with the supervision of the covenanted benefit has to be made in any event; the offices are there and the officials are being paid, and it was thought better, on a full consideration of all the circumstances, that the covenanted benefit system, the insurance system, should be adhered to in preference to the uncovenanted type of benefit. That means that this Bill is founded on that basis, the old insurance principle, with a small difference. The unemployment insurance goes on the principle that there is some proportion between contributions paid and benefit to be received, and that is adhered to with this difference, that benefit is to be paid out in advance of contributions.
I have no doubt that the word "dole" will be frequently mentioned this afternoon, and I would enter a protest against its use. It can only be considered a dole on one assumption, and that is that the money is never to be repaid to the Fund. That is not the intention that we have at the moment. The intention is that the employer, the employee, and the State shall repay in any year in which unemployment will be only normal—it has to be recognised that there is such a thing as normal unemployment in a country—the advances made by the Central Fund to the Insurance Fund. On that basis there is no justification whatever for applying the term "dole" to what is proposed in this Bill. It is based definitely on the old principle of some proportion, some relevance, between benefit to be enjoyed and contributions paid. Taking into consideration the number of those who have exhausted the right to benefit, on the present basis it is clear that the normal procedure of one day's benefit for every contribution is not desirable and would not meet the case in the present circumstances. The main proposition in the Bill is that any contributions paid for a person in an insurable occupation since the 8th November, 1920, are to be revived, and benefit will follow on the revival of those contributions. That may not be quite clear from the terms of the Bill itself, which seems to limit the revival of contributions to the second benefit year, but this Bill has to be taken in conjunction with the Act of 1923, and that, in Clause 3, stated "for the purpose of determining the amount of benefit to which a person is entitled no account shall be taken of any benefit which may have been received by such person between the 7th day of November, 1920, and the commencement of the first benefit year." That provision is carried into the present Bill and the effect, consequently, is that any contributions paid for a person in an insurable occupation since the 8th day of November, 1920, are revived, and the ordinary benefit follows thereon.
That is the first and the main proposition in the Bill, and the position of the person at present unemployed who was at any time in an insurable occupation and had stamps paid for him is this, to put it in another way: The machinery for the proper method of counting what benefit has been received is roughly this: stamps are put on, representing contribution to the fund. When benefit is paid the stamps are cancelled. The effect of this Bill will be that stamps cancelled since the 8th December, 1920, will be revived. These cancelled stamps appear as if they were new stamps and entitle a person to benefit. The second main point in the Bill is with regard to persons enlisted in the National Military Forces. The proposition with regard to them is, that for a period of service which terminated on or before the 29th of June, 1924, in the case of a person who, before the date of enlistment, had had paid for him, under the Unemployment Insurance Acts, either 20 contributions at any time, or 10 contributions since the 8th November, 1920, there shall be paid to the credit of the Unemployment Fund by the Minister for Defence not less than 24 contributions for every insurance year, or portion of an insurance year, covered by the military service of such person. The contributions so paid are then credited to such person. That seems to go back even further than the 8th November, 1920, because it speaks of 20 contributions at any time, or 10 since the 8th November, 1920. That is explained by this fact, that the Act of 1920 re-adjusted the basis on which unemployment insurance was given, and included for unemployment insurance purposes many more people than were included in any previous Act. Those who were included in any previous Act and who had not exhausted the right to benefit had their contributions brought forward by the 1920 Act, and the 1920 Act is taken as the basis of all succeeding Acts, because it brought forward the contribution question and increased the number of those who might draw benefit under the terms of it.
The rest of the Bill is pretty well all machinery. It grafts itself on to the 1923 Act, takes away the second benefit year set up by that, establishes in place of it a new second benefit year, and third, fourth and fifth special benefit years, and then sets out a period over which all further benefit years shall be counted. The period dealt with in this special benefit year section is from the 29th June of this year to the 16th of October next year, and that period of about 66 weeks is divided into three benefit periods of 17 weeks, 21 weeks, and about 29 weeks. It is a matter of machinery, and the clause which follows the setting up all of these special years, limiting the maximum benefit payable in any benefit year, has to be taken in conjunction with this clause. Ten weeks is the maximum period over which benefit is payable in the 17 weeks period; 16 weeks is the maximum period over which benefit is payable in the 21 weeks period; the maximum is 15 weeks in the third period, and the maximum is 26 weeks in any normal benefit year. With regard to those who are likely to be benefited under the present proposals, and for how long they are to receive benefit under them, this may be of interest: I previously said that 78,685 people had been allowed benefit in the second benefit year. I have now to add on a number of 4,143 who, prior to the 17th May of this year, had been disallowed benefit because they had not 12 contributions to their credit. That proviso with regard to 12 contributions to credit is repealed in this Bill, and will not hold for the special benefit periods; that is, we are dealing now with a number of unemployed, about 82,000. Under the proposals of this Bill 25,000 persons will be entitled to 6 weeks benefit, or less. I have to make a rough division here in order to give totals—it is quite arbitrary, but it divides them into a period of benefits which may be looked forward to under the present proposals. Twenty-five thousand would be entitled to 6 weeks benefit or less; 20,000 would be entitled to between 6 and 13 weeks benefit; about 16,000 will profit to the extent of 13 to 19 weeks, and 21,700 will have between 19 and 26, the maximum number of weeks benefit.
The only other item which I wish to make any comment on at the moment is this: With regard to the total cost of unemployment benefit from the period, 30th June, 1924, to the 25th March, 1925, it is estimated in that period at about £600,000, but if no new Act were introduced, the total cost of unemployment for that period would be about £400,000. This Bill, therefore, puts on the unemployment fund, or at the moment on the Central Fund, an additional charge of something not less than £200,000. This is an estimate, and I say something not less than £200,000 because the estimate is put somewhat higher. £200,000 is the minimum charge on the Central Fund to be afterwards repaid from the Unemployment Insurance Fund.