Industrial Labour and Welfare Legislation after the First World War: A Reply

Abstract

I should like to thank Dr Lowe for his comments on my earlier article; the merits of an alternative view apart, his response provides a more detailed insight into the dilemma facing the ministry of labour immediately after the war than my rather brusque overview. However, I find myself unable to accept the general tenet of his argument and wish to contest his analysis on two main points. First, I think it is vital to clarify at least three different interpretations of the idea of 'contracting-out' of the national unemployment insurance scheme. Secondly, I will question the assumptions he makes about organized labour in this period. Finally, I will make some general comments about the utility of the idea of 'administrative impracticality' in determining the nature of social policy development in this area. Leaving aside those regulations permitting unions to administer state unemployment benefit to their members, we need to note that the interpretation of the term 'contracting-out' differed between union officials and civil servants. Dr Lowe's argument implies that organized labour was demanding complete autonomy in the administration of publicly funded unemployment benefit. As I made plain earlier, in I9I6 the T.U.C. supported the right of those unions who so chose to waive their obligations under the national scheme altogether, relying instead on their own unemployment schemes funded by their members' contributions alone. Hence, from the original union standpoint, no 'irresponsible form of devolution' was being demanded: only a redefinition of the parameters of the national scheme. By contrast, the 'contracting-out' scheme concocted by the ministry of labour and the Treasury was, initially, designed to ensure that the national scheme was not left with all the 'bad risks' and offered the statutory state subsidy to those industries prepared to provide unemployment insurance for all their workpeople... skilled, unskilled and fringe casuals alike. Certainly such a clumsy compromise was 'administratively impractical', involving as it did the apportionment of the industrially mobile and seasonal workers in an unrealistic fashion. It would be wrong to assume that the 'insurance by industry' proposals under discussion in I 9 I 9 were identical to the recommendations of the Geddes committee, three years later. By 1922, policy aimed to reduce the liability of the Exchequer and was no longer concerned with mollifying potential labour opposition. The committee set up to consider Geddes's proposal' was critical of the contracting-out clause in the 1920 Act: 'it enables industries with low unemployment to escape what might be regarded as their fair share of the common burden of unemployment'. Contributions to special schemes would not in future be allowed to fall below the national rate; any surplus would be forfeit to the Exchequer. Again, administrative regulations