UNEMPLOYMENT

Evening Post, Volume CXX, Issue 144, 14 December 1935, Page 10

UNEMPLOYMENT

BRITISH EsSTJRAXCE

COMMITTEE'S REPORT

The report has been-published of the Unemployment Insurance Statutory | Committee recommending the increase lof 'benefit for the children of the unj employed from 2s to 3s per week, the | order for which was issued recently (says the "Manchester Guardian"). The committee reported to the Minister in July, before Parliament rose, and the Minister has brought forward a resolution to approve the higher rate for children in the House of Commons. After, pointing out that the recommendation will increase the expenditure of the fund by £1,250,000 a year, the report adds: "If the higher rate of children's allowance is introduced at about the beginning of August, 1935, the additional expenditure of the fund during the remaining five months of the calendar year will be about £500,000. On this assumption, the accumulated balance of the Unemployment Fund at the end of 1935, according to revised estimate A, will be about £16,900,000, and according to revised estimate B, will be about £18,750,000." A LIMIT. The committee states that under the proposal to increase the allowance for children an unemployed man with a wife and five dependent children would draw 41s a week in unemployment benefit, and that where there were eight or ten such children (and such cases were not unknown) he would draw 50s to 56s a week. Therefore, in order that benefit would not exceed wages, the committee proposed the limit of 41s. With regard to the financial condition of the fund, it had been assumed that there would be a balance of £21,000,000 at the end of 1935. Of this £10,500,000 should have been accumulated during this year. There had, however, been a setback in the process of recovery and in increase of unemployment during the early part of this year, a higher percentage of unemployment ranking for benefit and a higher weekly" cost of each claim to benefit. The result was that during January and February the expenditure of the fund exceeded its income, and though substantial weekly surpluses had since been realised, the net addition to the balance of the fund in the first six months of 1935 could hardly be much in excess of £3,500,000. Two revised estimates for 1935 prepared on different bases give surpluses of £6,864,000 and £8,736,000 with accumulated balances of £17,391,000 and £19,263,000 respectively. The balancing point on the present basis of contributions and benefits is 18.1 per cent. With the average of 14.9 experienced in the past ten years the unemployment fund on its present basis would have a surplus income of more than £12,000,000 a year, which would be enough to take 2d per week off the contributions of each party to the. insurance, or provide improved rates of benefit The Trades Union Congress General Council proposed weekly increases in benefit of 2s for adult men and women, and of 3s for dependent children. "Increases of this scale," the committee state; "are altogether beyond the means at our disposal." FUND'S PROSPECTS. It is added that a strong case was made by the National Confederation of Employers' Organisations for reduction of contributions, and there were also representations made on behalf of women for increased benefit. The committee does not consider that the annual surplus on which it can count is sufficient to meet either of these claims. It concludes that the fund is, and is likely to continue to be, more than reasonably sufficient to discharge its liabilities. Before the end of the year the committee hopes to have the results of an investigation which is being made at its request of the remoter prospects of unemployment, in the light of which it will be able to review the situation. "We need hardly emphasise," adds the report, "the uncertainty on which all our present conclusions rest. In attempting to establish .unemployment insurance as insurance, providing guaranteed benefits for definite premiums without risk either of insolvency or of piling up idle reserves, we are venturing into unexplored fields ambushed, by dangers. "At any moment our calculations may be defeated by an unexpected turn of events; our modest hopes of seeing the benefits of the scheme improved, or its burdens diminished, may ba shattered by obscure economic forces or incalculable human decisionsmore happily, by a return of international co-operation in trade and finance, our present hopes may be made to look like fears. But for all its uncertainties, we believe that our attempt is worth making; by the right union of daring and caution, it may be preserved from failure."