17 FEBRUARY 1923, Page 6

LABOUR SHOULD CARRY ITS OWN CASUALTIES. T HE announcement in the

King's Speech that the Government mean to introduce a measure dealing with Unemployment Insurance benefits may lead to something very important. All recent discussion on the subject has turned on " Insurance by Industries," and we trust that the Government will be able to deal with the matter on those lines. It is hardly possible to exaggerate the significance of this problem.

The manual workers of Great Britain are haunted through their lives by the fear of unemployment ; even the most capable of them are subject to the chances and changes of the industrial world. If a practical scheme of insurance by industries is proved possible the workers have a right to demand that it should be put into force RS soon as possible. The dread of unemployment has hitherto given a tremendous stimulus to the practice of ca' canny. The workers felt that as they were not guaranteed against being thrown out of work and into starvation they must make their work last as long as possible. By going slow they set up their own form of insurance against unemployment. From this there flowed a double disadvantage ; the worker was personally demoralized, and all over the country the output was lowered. And, even when all this had been done, the workers, so far from being satisfied, were more dissatisfied than ever. They felt that any safety they had achieved was the result of their own cleverness, and that so far as the State or their employers cared, they might have gone on for ever suffering from the nightmare of unemploy- ment. These causes of dissatisfaction are plainly a national danger.

It is encouraging to know in these circumstances that many of the most acute minds have been at work upon a permanent scheme of insurance against unemploy- ment. A solution is now recognized as quite possible.

If Mr. Bonar Law's Government can carry a measure they will have the credit of one of the most beneficial Acts ever placed upon the Statute Book. The difficulties, of course, are very great. Look at the first and most obvious difficulty. Directly you have admitted that the principle of industries insuring themselves against unem- ployment is right because the acceptance of responsibility inspires each industry with a direct incentive for reducing unemployment, you have to admit that it is almost impossible to define an industry. What is it ? Where is it ? How can one draw a frontier line and say that at this paint one industry ends and another begins I No such thing is possible. There is a wide interlocking of industries and of labour. Hundreds of thousands of men drift about from one form of employment to another within a group of cognate industries. In many cases it might be found possible to arrange unemployment insurance only for groups of industries, but, even when that had been done—when the groups had been so far as possible decasualized—there would remain a residuum of workers for whom no group could accept responsibility. In a more perfect world, which the present generation will not know, it may be possible to bring even those outsiders into the fold, but, so far as we can see ahead, it will be necessary for them to be provided for by a scheme of direct State insurance. It should be the object of employers and employed alike to secure that the residuum should be as small as possible. If it should become large at any time there would probably be a return to the present lamentable conditions, under which men whose period for drawing a State dole has come to an end are thrown on to the Poor Law only to be sent back to the dole-officer when they have again become eligible for his money.

An extremely important point in insurance by industries —towards which the contributions should come from both employers and employed and for the management of which both sides should be responsible—is that the scheme should be economically sound. It would be difficult to imagine anything more disappointing or more cruel than to launch a scheme which became insolvent and damaged the industry so much that the insured men found themselves both without employment and without money. We dare say that the Government will find it necessary to proceed cautiously and to graft insurance by industries on to the present State scheme. There are some compact industries whose frontier can be exactly defined, and two or three of these have already invented schemes of self-insurance and have put them into practice. Again, even in industries which are not so compact but which have a very low rate of unem- ployment it should be possible to carry out schemes with little risk. But there are a very large number of industries in which it is extremely difficult to foretell what the financial risk would be. The problem might baffle the most experienced of actuaries, and yet it is essential that the employers who agree to set up a scheme of insurance should know where they stand. They must not be exposed to unlimited risks. It has been suggested that a scheme in what may be called a doubtful industry might guarantee unemployment pay for a definite period, and that if a man's unemployment continued longer—though that would be an exceptional case—the responsibility should fall upon the State.

We have high hopes of insurance by industries because in principle it has been generally welcomed—for instance, by the recent Committee on the Labour Exchanges, by the Geddes Committee and by most of the Trade Unions. The Unemployment Insurance Act of 1920 actually embodied the principle. Of course, for purposes of propaganda and in the ecstasy of drawing up pro- grammes the most prominent Labour leaders demand that unemployment insurance should be a purely State obligation and should be paid for out of Income-tax. One of the chief advantages of making industries them- selves responsible would be that the more they kept unemployment down, and the better they administered their schemes, the greater benefits they would be able to pay. But as we have remarked, the Government will have to proceed cautiously. Perhaps they will say in effect to the various industries : " There is a State scheme already in existence. We take that as our starting-point. We give you full permission to con- tract out of it, and if you will and can do so you will find it greatly to your advantage. If you produce no scheme, however, then you will be required to contribute to the State guarantee." It will be impossible, as Sir Lynden Macassey has pointed out, to press a button and suddenly have a new plan of insurance by industries. The change must be gradual, and even when it is virtually complete there will be that residuum of uninsurable men of whom we have already spoken. The Government ought to put no tiresome restrictions upon the classification of industries. We have read an interest- ing article in the Bulletin of the British Engineering Association in which the writer despairs of industries being able to group themselves and suggests that the classification should be not by industry at all, but by area.

Industry to carry its own casualties "—the phrase is Sir Lynden Macassey's—is at once a motto, a. policy, and an ideal. From the point of view of every working man it is something far nobler and more fruitful than " Work or Maintenance.' Although we cannot say what sort of Bill the Government will produce, it is well known that Sir Montague Barlow, the Minister of Labour, has worked unsparingly at this subject, and we sincerely wish for him the great satisfaction of getting something done at last.