Labour policy—false and true

Unemployment is to-day a burning question; it will always be in industry an outstanding difficulty. The main lines of Government policy are, therefore, important; they are of comparatively recent date. From 1890, and indeed before, Metropolitan borough councils and their predecessors, the vestries, and the principal provincial local authorities had been in the habit of providing relief works every winter for the unemployed, each on its own method and without investigating the necessitous circumstances of applicants for work. Local Labour bureaux—really Labour Exchanges—had been established in London by some vestries and metropolitan borough councils without statutory authority. Their establishment was formally authorized by the Labour Bureaux (London) Act, 1902. In 1905 Lord (then the Right Hon. Walter) Long, when President of the Local Government Board, inaugurated a voluntary scheme consisting of central and district committees in London to collect funds and provide work to deal with distress arising from unemployment. The practical operation of this scheme was deemed sufficiently successful to warrant the passing of the Unemployed Workmen’s Act, 1905, which provided for establishment, by order of the Local Government Board, of a statutory Central Unemployed Body and metropolitan Distress Committees in London, and outside London, of Distress Committees with central and local powers in each municipal borough or urban district with a population of not less than 50,000, and for the rest of a county, of Central and Local Committees. Then, as has been described, the State Labour Exchanges were authorized in 1909. Their establishment was the first attempt of Government to deal with unemployment on a considered policy.

1. STATE UNEMPLOYMENT INSURANCE

The next deliberate step was the scheme of State insurance against unemployment instituted by Part II of the National Insurance Act, 1911. It applied compulsorily to about 2½ million workmen in building, shipbuilding, engineering, construction of works and vehicles, iron-founding, and, to an extent, saw-milling, but not to non-manual workers. The contribution per week was: employers, 2½d.; workmen, 2½d.; State, 1⅔d., the State contribution being thus one-fourth of the whole. The benefit assured was 7s. per week for fifteen weeks, but nothing during the first week of unemployment, and, when payable, only at the rate of one week’s benefit for every five contributions paid. In 1916, the National Insurance (Part II Amendment) Act, 1914, brought in under the scheme a further 1¼ million workpeople employed in certain trades, principally metals and chemicals, and engaged in the manufacture of munitions of war. At the Armistice, the scheme therefore only covered some 3¾ million persons. This provision was wholly inadequate to meet the unemployment which ensued. A scheme of free out-of-work donation was instituted by the Government for both civilian workers and for men and women discharged from the Forces. This scheme remained in operation from November 1918, until November 1919, for civilians, and until March 1921, for ex-members of the Forces, and, in a few special cases, somewhat longer.

The Present Scheme of 1920

It was plainly necessary to make further provision, so a Bill for the extension of unemployment insurance was introduced in the House of Commons, first in December 1919, and again in February 1920, and passing into law in August as the Unemployment Insurance Act, 1920, came into operation on November 8, 1920. It is the statute under which the permanent National Unemployment Insurance Scheme is regulated—by it all previous enactments relating to unemployment insurance are repealed. This Act brings into insurance practically the whole industrial population, and also non-manual workers whose remuneration does not exceed £250 per annum. It excludes, however, agriculture and private domestic service, and empowers the Minister of Labour to grant certificates exempting the permanent employees of certain public undertakings, but, save in the case of railway servants, the numbers engaged in such specially excepted employments are not large. The total number of workpeople insured as the result of this Act is about twelve millions. The contributions prescribed by the Act of 1920 (since temporarily increased) are as follows:

The scheme is mainly worked through the Employment Exchanges. An unemployment book is issued to every insured worker, and, on obtaining employment, he is required to lodge it with his employer, who keeps it while the employment lasts, and when paying wages must affix to it a stamp of the value of the combined contributions of himself and the worker.

The books are valid for twelve months, from the beginning of July in one year to the beginning of July in the following year—a period known as the “Insurance Year.” Every July the books are exchanged. Employers usually lodge the books of their workers in bulk at the Employment Exchanges, where fresh books are written up for the ensuing year, but a workman has the right to take his old book himself to the Exchange and obtain his new book for the ensuing year.

Workmen are also entitled to receive from the Department, on application, a statement showing the condition of their accounts.

The stamps representing contributions are sold at Post Offices, and the proceeds of sales are paid over weekly by the General Post Office to the Ministry of Labour. The remittances are placed to the credit of the Unemployment Fund established under the Act, and the State contribution is added to the amounts so received, and similarly credited to the Fund. When the Fund is in credit, i.e. when the revenue is more than sufficient to pay the benefits accruing due, any surplus moneys are handed over to the National Debt Commissioners for investment on behalf of the Fund. Owing to employment being exceptionally good immediately before and during the war, the Fund accumulated a considerable surplus, which amounted, in November 1920, when the Act of that year was passed, to about £20,000,000.

The benefits prescribed in the Act of 1920, which were afterwards temporarily varied, are 15s. a week for men and 12s. a week for women, with half-rate for boys and girls. Benefit was provided to be payable after the first three days of unemployment, afterwards permanently increased to six by the Unemployment Insurance (No. 2) Act, 1921, which constitute a “waiting period,” and for a maximum of twenty-six weeks in any “insurance year.” It was fifteen weeks in the Act of 1920, but this was increased to twenty-six by the Unemployment Insurance Act, 1921. The amount of benefit must not in any event exceed the proportion of one week’s benefit for every six contributions paid, i.e. one day of benefit for each contribution. This limit is in certain cases temporarily suspended by the Unemployment Insurance Act, 1921.

The conditions for the receipt of benefit are that a prescribed number of contributions have been paid, viz. a minimum of twelve under the Act of 1920—in certain cases temporarily relaxed by the Unemployment Insurance Act, 1921; that applications for benefit have been made in the prescribed manner; that the contributor proves that since his application he has been continuously unemployed, capable of, and available for, work, but unable to obtain suitable employment, and that he has not exhausted his right to benefit. The workman is disqualified[17] from benefit if his unemployment is caused by a stoppage of work due to a trade dispute at his place of employment, or if he has lost his employment through misconduct or by voluntary resignation without just cause. Nor is benefit payable while the workman is an inmate of a prison or a workhouse or any other institution supported out of public funds, nor whilst he is resident outside the United Kingdom. Should he be in receipt of sickness or disablement benefit under the Health Insurance Acts or of an old age pension, he can claim no benefit.

Once an insured worker becomes unemployed, the employer must return to him his unemployment book, which he must lodge at the Employment Exchange, where he may claim benefit. When a claim is made, an inquiry is addressed by the Exchange to the last employer of the workman as stated by him on the claim form, in order to ascertain whether the conditions for the receipt of benefit are satisfied, and whether any of the disqualifications apply. During the currency of his claim, an unemployed insured worker must attend at the Exchange as evidence that he is unemployed. There he signs a declaration during the normal working hours of his trade that he is unemployed and unable to obtain suitable employment. In normal times, the frequency with which unemployed insured workers have to attend for this purpose is as follows: If the worker lives within two miles of the nearest Exchange, he is required to attend daily; if he lives between two and four miles from the Exchange, he attends every other day; between four and six miles, he attends once a week, and furnishes a declaration signed by two persons that he is unemployed; if he lives more than six miles from the nearest Exchange, he is not required to attend there personally for the purpose of giving evidence of unemployment, but may forward a certificate signed by two persons as to the continuance of his unemployment. Claims for benefit are adjudicated upon, in the first instance, by officers appointed under the Act known as insurance officers. The manager of the Exchange acts as an “insurance officer” and authorizes payment of obviously valid claims. Those as to which doubt arises are sent to the Chief Insurance Officer in London for adjudication. If the insurance officer’s decision is unfavourable to the claimant, the latter has a right of appeal to a Court of Referees, consisting of an independent chairman, a representative of employers and a representative of the contributors. The chairman and the panels are appointed by the Minister of Labour. Either the insurance officer, or the Trade Union to which the claimant belongs, or the claimant himself, if leave is given to him by the Court, has a further right of appeal from the recommendation of the Court of Referees to an umpire appointed by the Crown, whose decision is final and conclusive.

While all claims to benefit have, in the first instance, to be made at an Employment Exchange—where benefit is in general paid—power is given to the Minister under Section 17 of the Act of 1920 to enter into arrangements with associations of contributors (practically all Trade Unions) under which members of such associations may prove their unemployment and receive their benefit through the machinery of the association. Before such an arrangement can be made, the Minister has to be satisfied that the rules of the association provide for payment out of its own funds of unemployment benefit to its members, and that the association has in operation a system for obtaining notification of opportunities of employment and of placing its members in employment. State benefit paid out by associations under this arrangement is subsequently repaid to the association from the Unemployment Fund. The associations are further entitled to a grant-in-aid of their administrative expenses not exceeding 1s. for every week of State benefit paid to their members under the arrangement. Shortly before the decline in trade, which began in the autumn of 1920, arrangements were completed or were in course of completion under Section 17 with nearly 200 associations having a membership of nearly 4,000,000 persons. Owing, however, to the increase of industrial depression and the consequent strain on the financial resources of the associations, a number of these arrangements were either terminated or not completed. The number of arrangements in operation on July 31, 1922, was 145, covering a membership of rather more than 1,000,000.

A new and important provision of the Act of 1920 was the right given to industries to contract out of the State scheme and institute special schemes of compulsory insurance for their own workers. Before a special scheme can be approved it has to be submitted by a Joint Industrial Council or an association fully representative of the majority of employers and employed in the industry. The Minister has to be satisfied that insurance against unemployment in the industry can be more satisfactorily provided by a special scheme than under the general scheme of the Act. The special scheme must cover all the employed persons in the industry, and the benefits must be not less favourable on the whole than the benefits provided by the Act. The industries which might naturally be disposed to contract out of the general scheme are those in which unemployment is less than the average rate of unemployment in all the industries included in the general scheme. In other words, only those industries might be expected to contract out which could, by reason of their lower rate of unemployment, provide greater benefits for the same rate of contribution as under the general scheme, or the same or a slightly better rate of benefit for a lower contribution. As against this, the rate of State contribution payable to a special scheme is reduced to a sum not exceeding three-tenths of the contribution which would otherwise be paid by the State in respect of contributions from the industry if the employers and employed persons in the industry remained in the general scheme. Only one special scheme has, so far, been approved, viz. that for the Insurance business, which covers about 80,000 persons. In view of the temporary emergency provisions made in the Unemployment Insurance Act, 1921, and the Unemployment Insurance (No. 2) Act, 1921, to meet the abnormal amount of unemployment, it became necessary to suspend the right of additional industries to contract out until the Unemployment Fund again attains a position of solvency.

A feature of the State scheme which is open to criticism is the right of insured persons to receive a refund in respect of their contributions. This provision follows generally the lines of Section 95 of the Act of 1911. The refund made is the excess of the employed person’s share of the contributions paid in respect of him, less any benefit he has received. Refunds are not payable unless the employed person has reached the age of 60 and has paid in the aggregate a specified number of contributions.

Emergency Provisions

Owing to the acute industrial depression, it has been necessary to add to the permanent scheme a number of temporary provisions. It was realized, when the Act of 1920 was being framed, that special provision was required to meet unemployment occurring immediately after the passing of the Act amongst persons who were being brought into compulsory insurance for the first time. Accordingly, Section 44 of the Act of 1920 provided that, for twelve months after the commencement of the Act, i.e. up to November 8, 1921, eight weeks’ benefit might be drawn if four contributions had been paid. Between the passing of the Act on August 9, 1920, and its commencement on November 8, 1920, the industrial situation materially worsened, and when the Act came into operation considerable numbers of workpeople were unemployed who had not paid even four contributions. The Unemployment Insurance (Temporary Provisions Amendment) Act, 1920, was accordingly passed in December 1920, providing that if an unemployed person could show that, although no contributions had been paid in respect of him under the Acts, yet he had in fact been employed in an insurable occupation in each of ten weeks since December 31, 1919, or of four weeks since July 4, 1920, that would count as equivalent to payment of four contributions under Section 44 of the Act of 1920, and eight weeks’ benefit might be paid to him.

Temporary Act of March, 1921

Unemployment continued to grow, and early in 1921 it was apparent that many persons, who would normally have paid contributions and so qualified for benefits under the Act of 1920, were disqualified because, owing to the exceptional industrial position, they had not been in a position to pay contributions. The Unemployment Insurance Act, 1921, was therefore passed in March, 1921, which came into force immediately, and made special provision for the payment of unemployment benefit to persons who were not qualified for benefit by reason of not having paid contributions. Under the Act of March, 1921, it was provided that during each of two special periods, the first from March 3, 1921, to November 2, 1921, the second from November 3, 1921, to July 2, 1922, unemployed persons might draw up to a maximum of sixteen weeks’ benefit provided they showed:

The decision whether applicants for benefit satisfy the special conditions prescribed by the Act of March, 1921, rests with the Minister, but was given the power to refer questions relating to compliance with the requirements to the Local Employment Committees. This power has been freely exercised, and in practice the recommendations of the Committees in regard to cases submitted to them for consideration are usually accepted by the Minister.

The Act of March, 1921, increased the rates of benefit to 20s. a week for men and 16s. a week for women, with half-rates for boys and girls. Arrangements were also made for an increase in the rates of contributions as from the beginning of the next ensuing insurance year, viz. July 4, 1921, but these were again increased by a subsequent Act. Notwithstanding the special provision of benefit made by the Act of March, 1921, large numbers of persons who remained unemployed and had exhausted their rights to benefit in July 1921. It was, therefore, decided to introduce fresh legislation, making further provision for this class of case.

Temporary Act of July, 1921

The solvency of the Unemployment Fund had been impaired by the Act of March, 1921, and at the same time distress from unemployment was increasing. The Unemployment Insurance (No. 2) Act was, therefore, passed on July 1, 1921, which gave power to the Minister to extend the maximum period of benefit which might be drawn in each of the two special periods prescribed by the Act of March, 1921, by six weeks, making the maximum period of benefit twenty-two weeks, instead of sixteen. A great number of six-week extensions were granted, dating from February 22, 1922, which expired on April 5, 1922. At the same time the rates of benefit were temporarily reduced to 15s. a week for men and 12s. a week for women, with half-rates for boys and girls as long as the “deficiency period” lasts, i.e. (Sect. 16) until the Treasury certifies that the Unemployment Fund is solvent; and the waiting period of three days in the Act of 1920 was permanently raised to a week as under the original Act of 1911. The contributions payable from July 4, 1921, were increased under the Act of July, 1921, to the following amounts:

These rates of contributions were payable until July 1, 1923, or the expiration of the deficiency period, whichever is the later, after which the rates prescribed in the Act of 1920 were restored.

It has to be borne in mind that the provisions made by the Unemployment Insurance Acts of December, 1920, March, 1921, and July, 1921, are temporary only, and not part of the normal State scheme. The Act of March, 1921, authorizes the Treasury to advance moneys to the Unemployment Fund up to ten million pounds; this was increased to twenty million pounds by the Act of July, 1921. It has been necessary for the Treasury to make advances to enable the Fund to pay the benefits: the amount owing by the Fund to the Treasury on December 31, 1921, was approximately eight million pounds.

Temporary Provision for Dependents’ Act of November, 1921

As part of the temporary emergency programme of the Government to alleviate the abnormal unemployment existing in the autumn of 1921, the Unemployed Workers’ Dependents (Temporary Provision) Act, 1921, was passed on November 9, which made provision for the payment of allowances to the wives and dependent children of unemployed workers who were in receipt of benefit under the Unemployment Insurance Acts. This provision, as made by this Act, was for a period of six months only—to end on May 7, 1922. The Dependents Act provided that persons who were liable to be insured under the Unemployment Insurance Acts and their employers should, for a period of six months from November 7, 1921 (which period might be extended in the event of any deficiency occurring in the Fund) pay additional contributions for the purpose of creating a Fund separate and distinct from the Unemployment Fund, out of which allowances for dependents would be paid. To the contributions of employer and employed, the State made an addition.

Grants were made at the rate of 5s. per week for a wife and 1s. a week for each dependent child.

Temporary Act of April, 1922

Yet still further emergency legislation has been necessary to meet the continuance of unemployment. On March 13, 1922, there were in Great Britain 1,690,000 insured persons registered as wholly unemployed and 225,000 as on short-time. Of these, large numbers began to run out of benefit on April 5, the date at which expired the six weeks’ extension of benefit under the Act of July, 1921, each subsequent week adding to this number. On July 2, 1922, the whole of the emergency or “uncovenanted” benefit provided by the Temporary Act of March, 1921, would have wholly expired. In addition, on May 9, 1922, the Unemployed Workers’ Dependents (Temporary Provision) Act, 1921, came to an end. The Government accordingly passed the Unemployment Insurance Act, 1922, which came into operation on April 6, 1922. The effect of its complicated provisions can be shortly summarized. It terminated the second special period under the Act of March, 1921, at April 5, 1922, instead of July 2, 1922, as by that Act provided. It then prescribed a third special period and a fourth special period, the third from April 6, 1922, to November 1, 1922, the fourth from November 2, 1922, to July 1, 1923. During the third special period, insured persons no longer entitled to benefit under the permanent insurance scheme will be allowed to receive “uncovenanted” benefit for an aggregate of fifteen weeks, increased to twenty-two weeks by the Unemployment Insurance (No. 2) Act, 1922—passed July 20, 1922. As this fifteen weeks’ benefit had to cover thirty calendar weeks, it was divided up into three periods of benefit with a gap between each of five weeks, reduced to one week by the Act of July 20, 1922. During the fourth special period, twelve weeks’ benefit will be paid, with two possible further extensions of five weeks each. The insurance benefit remains, under the Act of April, 1922, at the same level as before, namely 15s. per week for the men and 12s. for the women, with the additional benefit provided by the Dependents’ Act of November, 1921, 5s. per week for the wife, and 1s. per week for each child. The rates of contributions by employed persons, employers and the State are the totals of the contributions under the Act of July, 1921, and the Dependents’ Act of November, 1921, and are, therefore, as follows:

These will be the contributions until the end of the deficiency period as defined in Section 16 of the Act of July, 1921.

From June 1921, to March 1922, the Unemployment Insurance Scheme was continuously carrying an average of 1¾ million persons, and 53½ million pounds of benefit were distributed; the Government’s estimate is 1½ million persons wholly unemployed from April 1922, to June 1923. These figures will involve the payment of sixty million sterling in benefit for those fifteen months; of this amount the State will ultimately contribute one-quarter of the whole as against one-fifth under the permanent scheme of the Act of 1920, and the liability of the State will continue at the higher figure until the end of the emergency period. For the financial year 1922-23, the estimates provided for £12,196,130 as the State’s contribution to the Insurance Fund and £551,760 to the Dependents’ Fund, making a total of £12,747,890. In April fourteen millions of the twenty million borrowing powers conferred on the Minister of Labour by the Act of July, 1921, were exhausted, and it was estimated that the whole twenty millions would be exhausted by July 1922. The Act of April, 1922, therefore increased the borrowing powers of the Minister from twenty millions to thirty millions sterling.

The Efficiency of the State Scheme

This was investigated by the Committee on National Expenditure (see First Report Parliamentary Paper, 1922, Cmd. 1581, p. 144). They recommended, and properly so, that the question should be carefully explored of placing unemployment insurance on the basis of insurance by industry. They also urged an investigation by a committee of experts of the administration of the State scheme with a view to its improvement. Very considerable simplification and improvement would appear to be possible judging from the report of Sir Alfred Watson, the distinguished Government Actuary. The cost to the taxpayer of Unemployment Insurance and Employment Exchanges since 1912-13 is stated in the Report of the Committee on National Expenditure to be as follows:

The above figures do not include the cost of the Unemployed Workers’ Dependents Act, which is financed independently of the Unemployment Fund and which imposes on the Vote charges of £2,192,000 in 1921/22 and £670,000 in 1922/23.

In my judgment, one thing is certain: if the National Unemployment Scheme had not been administered, as it has been, by the Ministry of Labour through the past and present dark days of depression, there would have been a serious upheaval in this country. The very fact that a worker could go and discuss his position with a sympathetic official of the Labour Exchanges helped to soothe his feelings of resentment against his unhappy lot. The receipt of benefit over the counter of a State institution encouraged him to believe that the State took an interest in the welfare of himself and his dependents. Whether, therefore, unemployment insurance by industries as a whole or each industry separately may or may not be arranged in the future, it would be exceedingly ungrateful of the people in this country to overlook the national work that has been performed by the Ministry of Labour and the officials of the Employment Exchanges under most difficult circumstances.

2. CONSTRUCTION OF WORKS OF PUBLIC UTILITY

Unemployment Grants Committee

In December 1920, the Government decided financially to assist local authorities to enable them to put in hand works of public utility in order to relieve unemployment, and appointed the Unemployment Grants Committee, under Lord St. Davids as Chairman, to receive applications for grants, examine schemes and allocate funds.

The Scheme of 1920

The Committee was instructed to observe, amongst others, these general principles:

1. Works were to be approved only in cases where the Ministry of Labour certified that serious unemployment, not otherwise provided for, existed in the area administered by the local authority undertaking the work.

2. The works were to be such as would be approved by the appropriate Government Department as suitable works of public utility.

3. The grant was not in any case to exceed 30 per cent. of the wages bill of additional men taken on for the work.

4. Preference in employment was to be given to unemployed ex-Service men.

The powers of the Committee were subsequently extended as follows:

(i) The grants could be increased from 30 per cent. to 60 per cent. of the wages bill.

(ii) The Committee was authorized to assist, in addition to local authorities, (a) “public bodies”—being any board, commission, rating authority or trustees, or other body or persons who manage or undertake works in pursuance of statutory powers, not being a body trading for profit, and (b) through the local authority—boards of guardians, distress committees and voluntary agencies.

A sum of £2,000,000 was placed at the Committee’s disposal for the financial year 1921-22, and a further sum of £630,000 for 1922-23. All this money has been allocated, though not spent (see Table p. 189), and has provided, or is providing, direct employment for approximately 110,000 men for varying periods. Nearly as many more are indirectly employed in the preparation of materials for use on the approved works in factories, workshops, quarries, etc. Almost 3,000 applications from local authorities have been considered in detail, of which over 2,000 have been granted. The total capital cost of the works so financially assisted is estimated at approximately £9,000,000.

The Extended Scheme of 1921

In September 1921, the Government directed the Unemployment Grants Committee to undertake the administration of a further scheme for the relief of unemployment through local authorities. The new scheme provided for giving to local authorities, who put in hand works of public utility for the relief of unemployment, financial assistance on the following basis:

(a) In the case of revenue-producing works: Grants equivalent to 50 per cent. of the interest for five years on loans raised for a period of not less than 10 years in order to meet expenditure oil approved schemes.

(b) In the case of non-revenue-producing works: Grants equal to 65 per cent. of the interest and sinking fund charges on loans, raised to meet expenditure on approved schemes for a period of half the term of the loan, subject to a maximum period of fifteen years’ grant. Both classes of grants were conditional on the work being commenced before January 1, 1922, and completed before March 31, 1923. The commencing date was, however, subsequently extended. A provisional limit of £10,000,000 was originally fixed as the total capital value of the approved works to which these two grants were to be applied. Local authorities, however, took up the Government proposals with so much enthusiasm, and the work of examining and approving the Schemes was accomplished so expeditiously, that by the end of 1921 schemes to the capital value of nearly £10,000,000 had been approved, and many others were under consideration.

The Government accordingly decided, in December 1921, to increase from £10,000,000 to £13,000,000 the capital value of the works which might be approved for these grants; and on the further development of the work, in January 1922, again extended the limit from £13,000,000 up to £18,000,000. Works up to the limit are certain to be approved. Up to May 31, 1922, the capital value of the works approved was:

(For details, see Table p. 190)

The amount of direct employment which it is estimated will be given by these works is 629,113 men-months. The amount of employment indirectly given in the preparation of materials will probably amount to as much more. The cost to the Exchequer of the national financial assistance afforded to these works must necessarily at the present time be somewhat of an estimate, as the loans raised by the assisted authorities are for varying periods, with the result that the grants vary from periods of two-and-a-half up to fifteen years. The burden to the State is a diminishing one, and is spread over a period of fifteen years, but the total amount of the burden so distributed will probably amount to about £8,700,000.

The work done by the Unemployment Grants Committee has been of an extraordinarily difficult and complicated character and most capably directed. It has been no easy task to exercise a wise and statesmanlike discretion, amid the welter of proposals, the pressure for financial assistance and the stringent limitation on the latter. So far as it is possible to administer relief works on a sound basis the Committee has achieved it.

Analysis of Approved Schemes Assisted on the Basis of 60 per cent. of the Wages Cost.

Up to May 31, 1922.

Analysis of Approved Schemes Assisted on the Basis of Grants of Interest and Sinking Fund.

Up to May 31, 1922.

N.B.—The roads assisted by the Unemployment Grants Committee, while distinct from the Expedited Road Schemes of the Ministry of Transport, nevertheless were all examined by the latter Ministry before approval by the Committee.

3. EXPEDITED ROAD SCHEMES

To meet the extension of unemployment, in the autumn of 1920, the Government created a special fund for expediting the construction of new arterial roads and the improvement of existing roads of importance. The fund amounted to £10,400,000, consisting of: (1) £4,000,000 to be contributed from the Road Fund (established under Sections 2 and 3 of the Roads Act, 1920, from the proceeds of the duties on mechanically propelled vehicles and horse-drawn carriages and drivers’ licences, less £600,000 payable to Local Taxation Account); (2) £1,200,000 to be contributed by the Treasury, and (3) £5,200,000 in loans from the Treasury to local authorities. The scheme provided for a grant from this fund to local authorities who expedited road works approved by the Ministry of Transport, of one-half of the cost, and if the local authorities were not able to find the other half, for a loan for that amount repayable within five years, at Treasury rate of interest. A condition was that one-half of the cost of the work should be labour cost; if the latter fell below one-half, the grant would be proportionately reduced. In addition the Government passed the Unemployment (Relief Works) Act, 1920, on December 3, 1920, which by the Expiring Laws Continuance Act, 1921, is continued in force till December 31, 1922. This Act expedites and simplifies the procedure for compulsorily acquiring and entering into possession of land for works of public utility intended to mitigate unemployment.

The 1920-21 Programme

On March 31, 1921, the commitments on this special fund, in respect of road works commenced to relieve unemployment, were as follows:

A description of the schemes will be found in the “Report on the Road Fund for 1920-21,” Parliamentary Paper, 1921, Cmd. 245.

The 1921-22 Programme

The continuance of unemployment necessitated still further efforts, and in the autumn of 1921 the Government, with the assistance of the Ministry of Transport, again took action. It was decided to allocate a further sum of £2,000,000 from the Road Fund for road works in areas in which the Ministry of Labour certified that serious unemployment existed, for the relief of which no other provision was available. This sum of £2,000,000 was allocated as follows:

(1) £1,000,000 to special road schemes estimated to cost £2,250,000 in Essex and Kent to be carried out by unemployed labour resident within the County of London, the Government undertaking to provide the difference between the cost of the works £2,250,000 and the £1,000,000 contributed by the Road Fund, viz., £1,250,000 less such contributions as could be obtained from the local authorities in whose districts the roads were situated.

(2) £1,000,000 to road works in the provinces other than the schemes referred to under (1).

The allocations for the unemployment road programmes of 1920-21, and the above for 1921-22 overlapped; a readjustment was necessary. The present readjusted allocations are now as follows:

The total commitments, therefore, in respect of road works to relieve unemployment are £12,557,671, less the local authorities’ contributions under 2 (1) (b) above.

By the end of February 1922, the funds had been fully allocated to particular schemes, although in a few cases the details had not been completely settled nor the grants finally made.

The Special Metropolitan Schemes

Following the practice of 1920-21, a separate allocation was made in 1921-22 for dealing with unemployment in the Metropolitan Police Area. The distress in that area is relatively so serious that special steps had to be taken to cope with it. The conclusion, without doubt rightly come to by the Ministry of Transport, was that it was better to carry out schemes in Essex and Kent on which a large number of men could be employed than road works in the built-up metropolitan area on which only a small number could be usefully engaged. The labour engaged on these works is obtained through the Labour Exchanges in London.

The special London Schemes are as follows: