Unemployment Insurance
| Author | J. F. G. Price |
| Date | 01 July 1927 |
| DOI | http://doi.org/10.1111/j.1467-9299.1927.tb02296.x |
| Published date | 01 July 1927 |
Unemployment Insurance
By
J.
F.
G.
PRICE,
C.B.
Principal
Assistant
Secretary,
Mtnisfry
of
Laboiir
[Paper read
tefore
the
Institute
of
Public Adiniriistralioit
on
301h
January,
19271
EFORE
attempting to state some of the problems which confront
B
those responsible for the administration of the Unemployment
Insurance Scheme, it is desirable to give
a
brief outhne of that scheme
and its origin.
Unemployment Insurance in a national sense first took shape in
1911,
when Part
I1
of the National Insurance Act of that year dealt with the
subject. Before that date such provision against unemployment as
existed was undertaken by some Friendly Societies and Trade Unions.
The Royal Commission on the Poor Law, which reported in
1909,
recom-
mended that State and Municipal encouragement and assistance should
be given to this form of provision.
The Act of
1911
related to only
a
few trades, the chief of which
were engineering, shipbuilding, iron-founding, and building.
It
covered
about
zi
million people.
The general basis of the scheme was the creation of a fund by contn-
butions froin employers, insured workers, and the Exchequer, out of which
would be paid benefit at
a
weekly rate to those insured workers who
became unemployed and who fulfilled the conditions for the receipt of
benefit. This general plan has been followed in the extensions
of
the
scheme which have been made since
1911.
In
1916
the scheme was extended to cover workers
on
munitions and
in certain other occupations whose need for insurance against unemploy-
ment would obviously be great
on
the termination of the War. This Act
brought the number of insured persons up to about
33
to
4
millions.
Before the end of the War the Government had decided that with the
coming of peace
it
would be necessary to make provision for
a
much
larger number of persons, and in particular for men returning from the
Colours to civil life, than were covered by
the
Acts of
xgrr
and
1916.
An extension of the Unemployment Insurance Acts
at
that time would
not have achieved this object. Accordingly, immediately after the
Armistice a scheme
of
Out-of-Work Donation was brought into being
under which genuinely unemployed ex-Service men and civilians could
receive
a
weekly payment which, in the case of men, amounted to
zgs.
a
week with extra payments for dependants.
.Go
Unemployment
Insurance
The Out-of-Work Donation Scheme was something quite apart from
the Unemployment Insurance Scheme. The whole cost was borne
entirely by the Exchequer. The scheme ran for twelve months for
civilian workers, and for more than two years for ex-members of the
Forces.
111
1920
was passed the principal Act which is the basis of the present
scheme.
It
brought into insurance practically the whole of the employed
industrial population with the main exceptions of workers in agriculture
and private domestic service. There were a few other exceptions, but
the general principle adopted was that all manual workers and other
workers whose remuneration did not exceed
k250
a year should be covered,
unless it could be said that there was no danger of periodic unemploy-
ment.
Unfortunately the enlarged scheme was launched at a time when the
short post-war period of good trade was coming to an end. Almost
immediately
a
depression set in which, with comparatively slight move-
ments in both directions, has lasted ever since. The depression, which
was already quite severe in the spring of
1921,
was further accentuated
by the dispute in the mining industry which led to
a
stoppage for a period
of three months from the end
of
March to the end of June of that year.
Towards the end of that time there were two million persons registered
at
the Employment Exchanges as wholly unemployed, and a further million
who were working short time to such an extent that they were entitled
to unemployment beneht under the statutory rules. This was exclusive
of workers in the mining industry.
It
is
not necessary to dwell upon the depth and long continuance of
the present trade depression.
It
is enough for present purposes to say
that from the beginning of
1921
there has never been less than one
million unemployed persons registered at the Employment Exchanges,
while the average from the beginning
of
1921
to the end of
1926,
a
period
of
six years, has been over
1,400,000.
The magnitude
of
the financial transactions of the scheme
is
indicated
by the figures of receipts and expenditure during the six years which have
elapsed since the extended scheme
came
into operation. In November,
1920,
there
was
a
balance
in
hand from the more limited scheme
of
~zz,ooo,ooo.
The receipts, maidy contributions, since that date to the
end of
1926,
amount to
~268,000,000,
giving a total
oi
some
~~go,ooo,ooo.
Benefit
paid
between November,
1920,
and December,
1926,
amounts
to about
&z81,ooo,ooo.
Other outgoings, such
as
refunds
of
contribu-
tions, amount to about
64
millions, and the expenses
of
administration
to
~26,000,000.
The resources of the Fund were thus
&23,000,000
less
than
the
expenditure.
This
has been met by loans from the Exchequer,
which at the present time amount to about the Same figure.
The present
is
not an unsuitable time for discussing the problems
The amount paid out was over
~62,000,000.
26
I
To continue reading
Request your trial