Unemployment Insurance in Great Britain

Report Outline
Emergency Session of British Parliament
History of British Insurance System
Financial Experience of British Scheme
Administration of British Scheme
Criticisms of British System and Proposed Changes
Special Focus

Emergency Session of British Parliament

Pending Revision of British Unemplyoment Benefits

The chief task before the British Parliament, convened in special session September 8, is to produce a balanced budget for 1932. A deficiency of $600,000,000 has to be made good by fresh taxation or economy or both. Immediate savings of almost $500,000,000 will have to be effected, according to the Committee on National Expenditure whose report, issued on July 31, 1931, precipitated the fall of the Labour government and the formation of the new National Cabinet. Of this total the majority of the committee recommended that two-thirds be saved under the head of unemployment insurance. This saving could be achieved by a reduction of benefits by 20 per cent; an increase of weekly contributions to 20 cents each for workers, employers, and the state in the case of men; extension of the scheme to include certain classes now outside it; and an application of “need tests” by public assistance authorities to all applicants who have exhausted their insurance rights, but are still within the industrial field.

The new British cabinet has compromised with the recommendations of the May Committee and Chancellor of the Exchequer Snowden is expected to call for a 10 per cent cut in unemployment benefits and a 10 per cent increase in contributions, together with other economies and increases in taxation. Meanwhile Prime Minister Macdonald's new cabinet has received a vote of confidence in Parliament but his espousal of an economy program involving a reduction in unemployment benefits has cost him both the leadership of his party and the support of his Seaham constituents. He will resign his seat in Parliament, it is reported, as soon as that body has adopted the program of the new government.

Proposals of Unemployment Insureance for United States

While these momentous events are taking place in Great Britain, the persistence of the depression in the United States has stimulated public discussion in this country of unemployment insurance as one of various remedies that might be adopted to protect unemployed persons from the full effects of continuing unemployment. Proposals are being advanced for the creation of various types of unemployment insurance schemes: state and industrial, compulsory and voluntary, contributory, and non-contributory. Official and unofficial studies of the experience of Great Britain and Germany with their public systems are being made or have recently been concluded. These include inquiries conducted in Europe during the summer by a special agent of President Hoover and by Senator Hebert (R., R. I.) on behalf of a special committee of the United States Senate, and studies by the Brookings Institution and by Industrial Relations Counselors, Inc. Bills for the establishment of an American system of unemployment insurance are being prepared for introduction in the next session of Congress where, owing to current economic conditions, they are likely to receive a more favorable hearing than similar measures have been given in the past.