[To the Editor of the SPECTATOR.] Sin, —The fact that
insurance (either subsidized by the State or not) and State relief may be alternative ways of dealing with the same matters, appears to have caused some who are discussing the " All-in Insurance Scheme " to overlook the possibility that unemployment insurance is not feasible in the actuarial sense at present. In insurance two conditions must be satisfied. The risk must be steady and calculable. It must be so great that the premium or contribution is necessarily excessive. At present neither of these conditions is satisfied with regard to unemployment.
The amount of unemployment is so abnormal that the Insurance Fund is in debt to the Treasury to the extent of fourteen million pounds in spite of high rates of contributions that are everywhere resented by employers and workpeople. If the " All-in " scheme is to be based on present unemploy- ment experience and the rates of contribution are to be fixed so as to make a special Treasury subsidy unnecessary, the premium must be so high as to create a feeling amongst those directly concerned that will break the scheme down at once. Moreover, the stable conditions implied in the fixing of premiums do not exist and are not likely to exist for a long time.
People are misled by the analogy with sickness insurance. The latter is possible only because public hygiene attacks the causes of sickness. If there were no Public Health Authority, the sickness experience of the Approved Societies would be as great as the unemployment experience of the Insurance Fund. Unemployment cannot be brought within the scope of insurance until there are public authorities dealing with unemployment as health authorities deal with sickness. The conditions in which unemployment insurance was begun in this country have ceased to exist, and the Unemployment Insurance Fund is being administered, not as an insurance fund, but as a relief fund to which employers and employed workpeople contribute. It seems, therefore, that however desirable the " All-in " scheme may be as a means of organizing or co-ordinating the agencies that deal with the risks contem- plated, the conditions in which unemployment can be dealt with on actuarial principles do not exist.—I arn, Sir, die., A. G. BURTON.