TAXATION FOR UNEMPLOYED

Nelson Evening Mail, Volume LXIV, 29 March 1930, Page 3

TAXATION FOR UNEMPLOYED

HARD TO DEFEND Some of tho dangers of unemployment insurance wore pointed out by Sir William Bevcridgo in n locturo at Oxford last month. He. said tho British insurance scheme of 1911 gave in exchange for contributions a strictly limited allowance to tido men over passing depression under a- contract which though compulsory was to be something like a fair bargain for each man and each industry, lb had been replaced by a general system of outdoor relief to the able-bodied, administered by labour exchanges and financed mainly by a tax on employment. Some industries had 10 times 'as great a risk of unemployment as others; some were now paying in threo or four times as much as they drew out, while others were drawing out three or four times as much as they paid in. Dock' and wharf service for every £ll it contributed toward the cost'of its unemployment got £3l from tlic direct contributions of other industries besides £l7 from the taxpayer. Eight other industries with erght times as many insured persons as dock's and wharfs, and paying 10 times the contributions, were drawing in benefit only the same total. The employers' and workmen's contributions were little more than a device for transferring money from one group of persons to another; 'they had become a form of taxation which on fiscal theory was hard to dofend. - DEMORALISING EFFECTS

The real danger of the present situation did not lie where many critics placed it, i.e., in tho possibility of inducing work-people to draw benefit when they could get work, Sir William Beveridge added. That kind of abuse was pretty effectively checked by the labour exchanges, and could be stopped completely and at once by employers notifying vacancies promptly and universally to the exchanges. The real danger of unlimited relief of unemployment lay, not in the fear of demoralising individual workmen, but in the fear of demoralising Governments, employers and trade union officials so that they took less thought about prevention of unemployment. Once it was admitted in principle that ; cither under the guise of insurance or in some other form, genuine unemployment could bo relieved indefinitely by the simple device of giving money from a bottomless purse, prevention was likely to go by tho board. The thoughts and time of Governments and Parliaments might be absorbed, as they had largely been absorbed during the past 10 years, in successive extensions and variations of tho relief scheme. The fear of causing unemployment might,_ as Mr Rowe and Professor y Clay had suggestd, vanish from the minds of trade union negotiators and lead to excessive rigidity of wages and so to unemployment. Industries practising casual employmentlike dock and wharf service and building—or practising perpetual short time —like cotton—might settle down to batten-on the taxation of other industries, or of the general public, in place of reforming their ways.