CHAPTER 22: WINTER AND THE COST OF LIVING The limits of elasticity Despite George Reids statement that

the comforts of one age become the necessities of the next, and any minimum standard must be determined largely by time and place, there is no mention in the record of the boards discussions in 1934-35 of the effect on the scale rates of any future changes in either the cost or the standard of living. This lack of foresight is easily explained. After the dramatic fall in prices between 1920 and 1923 and a more gradual fall between 1925 and 1933, by 1934 a period of greater stability seemed to have arrived. Within a few months of the revised regulations coming into force in November 1936, however, the question appeared on the boards agenda. The cost-of-living index, averaged over the year, had risen from 141 in 1934 to 147 in 1936. More significantly from the boards point of view, the index had risen from 146 in July 1936, when the new scale was approved by parliament, to 151 in November, the normal seasonal fall had failed to occur in the early months of 1937, and by May it was rising again. The standard reply to parliamentary questions on the subject in April 1937 was that the circumstances did not justify an increase in the boards scale. On 8 June, however, James Griffiths (a future Minister of National Insurance), on receiving the customary reply, put the question in more general terms: was it intended that the board should review the scales at any time, or must they stand where they are? The parliamentary secretary to the Ministry of Labour, R. A. Butler, plainly embarrassed, replied that he would require notice of the question.
1 2

On the same day, Nicholson asked Eady for a note of the boards views. The question was put to the board the following week. The index, Eady explained, had risen at least 5 per cent since the regulations were presented to parliament. While it might be argued that the scales were designed to include an element of elasticity, a point must come at which an increase could not be withheld without causing hardship. The board agreed that the critical point would be reached if the index were to rise to 160 - 10 per cent above its July 1936 level.
3

The boards views were set out in general terms in a note to the ministry. It stressed the elasticity argument: the cost of living was only one factor taken into account in fixing the scale rates, and the board had contemplated that the index might move up or down without the need to alter the scale. A movement might occur which would make such an alteration necessary, but that situation had not yet arisen. When the board met again after the summer break, however, the index stood at 155 and was expected to rise two or three points during the winter, bringing it close to the critical point of a 10 per cent increase. Plans were needed for action of some kind.
4

Winter allowances
22/1

It was a common practice for public authorities to raise their relief scales during the winter months or supplement them by the provision of coal. The boards scale was intended to operate in summer and winter alike but there had been suggestions by Labour MPs, as well as organised local demands by the NUWM (including the Bridgend campaign mentioned in chapter 26), that the board should pay winter coal allowances. This idea was now revived in a modified form by the boards officials. The proposal, in a memorandum discussed by the board on 7 October 1937, was not for a winter allowance as such. Instead it was suggested that the coincidence of the fluctuations in the cost of living index and the advent of winter could be regarded as a Special circumstance under Regulation IV 2, to meet which the Board could, during the winter months of this year, increase allowances in certain cases where it might be argued that the normal allowance would not be quite adequate for the circumstances produced by that combination of events. The proposal was presented as one of four options (in good civil service style, the favoured option was left till last). The other three were: a general revision of the scale rates; increasing all allowances by a fixed percentage; or a new regulation giving the board power to increase allowances to meet the cost of living or the incidence of winter or for any other similar reason. The first of these, the board was warned, would reopen debate on the adequacy of the boards allowances; the second would be indiscriminate and worsen the incentive problem; and the third, as well as leading to commitments by the minister as to how the power would be used, would expose the board to continuous pressure. Only the fourth option would involve no change in the regulations (and could therefore be implemented without parliamentary debate), and only that option would give increases of a purely temporary nature, perhaps starting in mid-November and continuing until the end of March. The additions could be limited to certain classes of applicants, such as householders with dependants and no other resources and single applicants paying for their own fuel and light. The amount might range from 1s. to 4s. a week, 2s. being suggested as the normal addition for a householder.
5

The memorandum admitted that the legality of using the boards discretionary powers in this way was not free from doubt and that the government law officers would have to be consulted. This warning was the outcome of anxious discussions involving Eady, Reid, Hancock and the boards legal adviser, Stuart King. King was asked to advise whether winter and the extra expenses it entailed could be treated as a special circumstance. Hancock reminded him that the regulation had already been used to provide for the needs of categories of cases, such as households of unusual composition, that winter allowances would be limited to narrowly defined classes of applicants and given as strong a discretionary flavour as possible, and that, unlike some of the other circumstances in which the regulation had been used, winter could at least be said to produce definite and ascertainable extra need.
6

22/2

King, while not prepared to say that winter - a foreseeable event which clearly was within the knowledge of the Board when the Regulations were framed - could in itself be regarded as creating a special circumstance, felt that it might do so if combined with an unforeseen rise in the cost of living; but he advised that the government law officers should be consulted. The outcome of that consultation proved embarrassing. The advice of the Attorney General at first seemed consistent with Stuart Kings views: that the cost of living, combined with other factors, might constitute special circumstances, though it would not justify an across-the-board increase in allowances. A written opinion given by the English law officers collectively a week later, however, was much less reassuring. It was, they stressed, not a final opinion agreed with their Scottish colleagues (a fact which enabled the boards officials to argue subsequently that no formal opinion had been given). Nevertheless, it was clearly the result of careful consideration of the legal issues. Regulation IV 2, the law officers wrote, could be used to meet the special need of a particular household for a commodity such as milk or coal, whose cost had risen, but the wording of the regulation was
7

inapt to cover a cause such as a rise in the cost of living which clearly operates on all households. ... It seems to us quite plain ... that the expenses of winter could not be treated as a special circumstance entitling the Board to give general directions to their officers to increase the allowances of all households or certain general categories of households in the winter. The proposal to concentrate help on households mainly dependent on the boards allowances was criticised as implying that earning members of a household should make a bigger contribution to the household expenses than the regulations contemplated. The law officers concluded that, before issuing an instruction on the lines proposed, the board was under a duty to submit an amendment of the regulations, though it might be permissible to make discretionary payments pending approval of the amendment.
8

The board, however, had already decided to proceed. The Attorney General was told that the issue had not been properly explained when the law officers views were sought, and that the board, having consulted both the Ministry of Labour and the Treasury, was going ahead on its own responsibility. The decision was announced by Brown in reply to opposition questions on the first day of the new parliamentary session, 21 October, and the instruction was placed in the House of Commons Library and subsequently published in the boards annual report. It read as follows:
9

1. The Board have had under consideration the fact that changes in the price of some commodities, together with the coming of the winter months, may create circumstances in many households which need to be specially taken into account. 2. They desire that officers should have regard to this fact in considering the question of allowances, and should make such
22/3

adjustments as appear to them to be reasonable in relation to all the circumstances of the case. 3. Cases should be considered as they fall due for review after the date of this instruction. While it is not intended to limit the power of an officer to deal with all cases on their merits, the Board desire that special attention should, on the first such review, be given to households where a substantial part, say not less than half, of the total household income is represented by the allowance from the Board. 4. While an officer must be guided by all the circumstances of the case in deciding whether an adjustment of the allowance is required and if so of what amount, the Board expect that in many households an addition of two or three shillings would meet the requirements if the household is of normal size and composition. A larger or smaller sum may of course be added where the circumstances of the case warrant it.
10

The published instruction was supplemented by a more detailed unpublished circular providing guidance on the treatment of straightforward cases and a basis from which modifications may be made to suit individual circumstances. Additions were to be awarded as and when cases were reviewed during the normal four-week cycle commencing on 1 November. An addition of the order of 2s. a week was suggested for a couple with no children or only one, 2s.6d. with two or three children, and 3s. for larger families. Exceptionally, larger sums were to be awarded, but rarely as much as 4s. Single householders living alone were to get 1s. if their net income after paying the rent was 10s. or less.
11

There was an important difference of emphasis between the published and unpublished instructions. The published circular implied a wideranging use of discretion by the boards officers in making such adjustments as appear to them to be reasonable in relation to all the circumstances of the case, subject to a broad indication that an addition of 2s. or 3s. would be appropriate for a household of normal size and composition. The unpublished instructions severely circumscribed the officers discretion, specifying the amounts to be allowed for single householders and families of different sizes. By describing the figures as a basis from which modifications may be made, the circular made it clear that officers were to award precisely these amounts unless there were grounds for varying them in individual cases. The discretion conferred on the boards officers by regulation IV 2 had thus to a large extent been exercised in advance by the board itself. Two classes of cases were excluded from the additions, neither of which was mentioned in the published circular: those already getting equivalent additions under the standstill and those affected by the wage stop, though the instruction added that special care must be taken to avoid hardship in wage stop cases. The strict logic of the wage stop undoubtedly demanded that the same limit should apply in winter
22/4

as in summer, but those affected by it were the poorest of the boards applicants. Polly Hill commented two years later: Most of those coming under the wages stop provision will be applicants with high rents and young families, so that they should be eligible for winter allowances; as it is, they receive the same allowance in winter as in summer.
12

Similar criticism came from a less likely quarter. Reynard, the boards Scottish member, wrote to Reid in February 1939: The association of Wages Stop with winter allowances is of doubtful or debatable propriety ... Winter allowance is a discretionary payment not provided by scale, and in my opinion should be given in order to obviate hardship irrespective of the wage stop of the applicant ...
13

A note submitted to the board in August 1939, discussing the anomalies arising from the criteria for awarding winter allowances, admitted that the effect of the wage stop, while not strictly an anomaly, had given rise to a considerable amount of criticism; but the policy remained unaltered.
16

The additions in practice By the end of November 1937, all current assessments had been reviewed and 254,543 additions awarded - about 44 per cent of the allowances in payment. By mid-January 1938 the number of additions had risen to 263,388. It is clear from the report of a regional officers conference in November 1937 that the instructions were not being interpreted with undue generosity, additions being refused in some areas for reasons not mentioned in the instructions. Fieldhouse reported that in the north-east region an applicants youth, his work record and the size of the weekly allowance were features regarded as justifying withholding the addition, at least initially. The relationship between the boards allowances and insurance benefit rates was another factor taken into account: in Scotland, Morton reported, applications for additions in rural areas were generally resisted, since awards in these cases could have led to widespread demands for supplementation of benefit. These policies were endorsed by the other regional officers.
14 15

The additions were criticised in the House of Commons as both discriminatory and going beyond the boards discretionary powers. Graham White complained that the board was trying to deal with a problem affecting nearly all applicants as one of special cases. The statement in the published guidance that 2s. or 3s. would be appropriate for a household of normal size and composition led to questions as to the meaning of this term, to which R A Butler replied tautologically that such households were those the size and membership of which do not in themselves provide a ground for special consideration and that the expression was given a reasonable application by the officers of the UAB by whom it is well understood.
16 17

22/5

Despite such criticisms, the board had succeeded in meeting the demands for both cost-of-living increases and winter allowances in a way which did not formally commit it to either as a regular occurrence, and without conferring on any category of applicants the right to an addition of a specific amount or, indeed, to any addition. But it could only be a temporary solution, provoking demands for more explicit recognition of the effects of both rising prices and winter conditions. The board now had to consider whether the regulations should be amended to provide a clearer legal basis for action in future years. Meanwhile, having introduced the additions at the beginning of winter, it had to decide how and when they should be withdrawn. The end of winter The question of withdrawal of the additions would have been easier to answer if the rationale for introducing them had been less ambiguous. If they were winter additions (a term which the board had been careful to avoid using), it would be logical to withdraw them at the end of the winter. If they were cost of living additions, the time to withdraw them would be when the cost of living fell to a level at which they were no longer needed. But the additions had been presented as a response to the combined effects of winter and rising prices. While prices might be expected to fall in the spring, there could be no certainty that this would happen. Fortunately for the board, it did: in March 1938 they were told that the index, having risen to 160 at the end of 1937, had fallen to 156 and was likely to fall further. As it was still 10 points higher than when parliament had approved the 1936 scale, this would hardly have justified withdrawing the additions. In conjunction with the ending of winter, however, it was enough to convince the board that, subject to the ministers views, they should be withdrawn as soon as may be. Brown agreed but decided to take the matter to the cabinet together with a proposal for an amending regulation enabling winter allowances to be paid in future years. Withdrawal of the additions, he warned his colleagues, would provoke emphatic protests, but the proposed new regulation would take much of the sting out of the opposition.
18 19

The cabinet agreed and the additions were withdrawn during the four weeks 9 May to 4 June - a political rather than climatic definition of winter. In accordance with the cabinets decision, Brown delayed announcing the boards intentions until 9 May, the day on which withdrawal was to commence. The decision was denounced by the opposition as mean and contemptible, but he was able to point out that the winter allowances paid by the Labour-controlled London County Council had been withdrawn three weeks earlier and that the cost of living index, which had stood at 160 when the additions were introduced, had fallen to 154. Although Hannington described the astonishment of the unemployed at receiving formal notification of withdrawal, the protests predicted by Brown do not seem to have materialised on any significant scale. Most applicants probably regarded the additions as winter allowances, even though they were not officially
20 21

22/6

so described, and were not really surprised when they were withdrawn in late spring. The Unemployment Assistance (Winter Adjustments) Regulations 1938 It seemed virtually certain that the board would have to grant similar increases during subsequent winters and that, in view of the doubtful legality of the 1937-38 additions, a new regulation would be needed. King produced a draft, avoiding any reference to the winter months, since nobody quite knows what are the winter months. The regulation in its final form provided that, in a case where special needs due to winter conditions existed, an allowance might be increased by such amount as was reasonable in the circumstances. It was debated in the Commons on 18 July 1938. Dingle Foot, in a speech that could have been drafted by the law officers themselves, argued that the board had overstretched its discretionary powers the previous winter; but he was critical both of the vagueness of the new regulation, which gave no indication of how the board would use its powers, and of the fact that it referred only to winter conditions and not to the cost of living. If the coming of winter were again to be accompanied by a rise in the cost of living, he asked, would the board be able to take both into account? No reply was given, but Brown confirmed the boards intention of using its powers in broadly the same way as the previous winter, making payments from the beginning of November to April and applying the same criterion of eligibility: that the boards allowance was at least half the household income.
22 23 24

The boards officials, in fact, proposed a shorter period of winter additions for 1938-39 than in the previous year - five months instead of six, starting in the second week of November and ending around Easter (Easter Sunday 1939 fell on 9 April). This time, all the additions were to start in the same week and finish in the same week, instead of being spread over a four-week cycle. When the proposal was put to the board, Tom Jones argued for a further reduction from five months to four. As a compromise, the board agreed that withdrawal should take place at the end of March, but Brown objected on political grounds. An urgent decision was needed if the introduction and withdrawal dates were to be announced simultaneously. Rushcliffe reluctantly agreed to a two weeks extension to 15 April. With Reid (who had by then succeeded Eady as secretary of the board) away in Scotland with Reynard, it fell to Hancock to persuade Markham, Jones and Hallsworth. He reported to Reid on the outcome:
25 26

Miss Markham, at Tom Jones instigation, tried to see the Minister yesterday afternoon but he had already left. ... In the end all three agreed that it would be preferable to name a terminal date two weeks later than originally proposed rather than to leave the date at large, and this is what we are doing. Hallsworth gave his consent very grudgingly indeed, and he will no doubt unburden himself at the next meeting of the Board. Miss Markham and Tom
22/7

Jones seem to have resigned themselves to the change fairly easily.

27

Neither for the first time nor for the last, the board had found itself under pressure from the minister to be more rather than less generous. They could hardly refuse, especially when, as in this case, no major principle was at stake. Once more, an instruction carefully drafted with an eye to publication was issued, repeating the criteria laid down the previous year and adding a specific mention of the eligibility of single persons for winter allowances. And once more it was complemented by unpublished instructions, which now gave official approval to discrimination on moral grounds:
28

Unsatisfactory character or evidence that the standard of living adopted by the applicant is already below normal and that his attitude towards employment is unsatisfactory ... may indicate that an addition of a less amount than normal will be sufficient or that none at all is required.
29

Despite this advice, the number of additions awarded was higher than the previous winter: 296,000 out of 585,000 applicants, or just over half, were receiving them a week after the starting date. The scale of the task must have discouraged the use of discretion to separate the deserving from the undeserving, while the new regulation itself made it less important to maintain the fiction that each case had been considered individually. While the boards statistics were no doubt subject to a margin of error, they can hardly have been so inaccurate as to justify Wal Hanningtons assertion that only a very small number of claimants were granted extra allowances.
30 31

Somewhat perversely, however, after the relatively passive reception of the withdrawal of winter allowances in May 1938, their reintroduction in November became a focus of dissatisfaction and protest. The NUWM mounted a series of dramatic demonstrations between mid-October and January. They included 200 unemployed men lying down in Oxford Street, the busiest shopping centre in the West End of London, five days before Christmas, chanting We want extra winter relief; a hundred typical unemployed workers (Hanningtons description) demanding to be served tea at the Ritz Hotel two days later; 150 unemployed carol singers singing suitable words appropriate to the circumstances outside Rushcliffes London home on Christmas morning; the hanging of a banner from the top of the Monument in the City of London; and a mock funeral procession through central London bearing a black coffin on which were painted the words He Did Not Get Winter Relief.
32

A deputation from the NUWM at the end of December submitted a list of points for discussion at a meeting (which was refused) with Rushcliffe, Brown and other ministers. It included the arbitrary application of the winter relief regulation, the failure to inform applicants of their rights, the inadequacy of the allowances, the exclusion of wage-stopped
22/8

applicants, and the need for a uniform scale of payments. Strangely, it did not include the main source of dissatisfaction among recipients of winter allowances in 1938-39: their duration. On this subject there was a good deal of sympathy with applicants feelings among officials. A district officer, three of whose area offices had been occupied by unemployed demonstrators in November 1938, wrote to headquarters:
33

Among the statements made from a loud-speaker van to the crowd of over 100 outside the Shoreditch Area Office ... was a statement that the Board had decided that winter began on 14th November. Had the winter allowances been in payment a month earlier I think we should have had much less trouble with the N.U.W.M. in the East End of London, and the stay-in strike might have been avoided.
34

About the same time, Middleton Smith reported the view of area officers that only an unusually mild spell had prevented more widespread complaints. The more educated section of the public, he wrote, take the view that once the Board had decided to grant winter allowances criticism might be avoided by issuing them at the time that the heavier expenses of winter months on fuel, food and clothing are normally first incurred. A number of district officers, meeting in March 1939, similarly favoured an earlier start, even if the allowances also had to be withdrawn sooner. The board decided, therefore, that for the winter of 1939-40 the allowances should begin and end two weeks earlier than in 1938-39.
35 36 37

The possibility of a fairer criterion for awarding winter allowances was also discussed in 1939. The requirement that the boards allowance should be at least half the households income was unfair: an increase in earnings might be fully offset against the households income from the board but still result in the withdrawal of winter allowances. An alternative formula suggested by Reid was, however, rejected because it would have resulted in too many people qualifying, and the board decided to leave the formula unchanged, relying on administrative instructions to iron out some of the anomalies. No substantial change was made until 1941, when the abolition of the household means test made a formula based on household income inappropriate, but by then winter allowances were being paid mainly to pensioners (they were eventually abolished in 1944, in a fundamental revision and simplification of the boards scales, but reintroduced by the National Assistance Board after the war in the form of discretionary payments, mainly to pensioners, for extra fuel).
38 39

War and the cost of living On the outbreak of war in September 1939, winter allowances ceased to be a viable alternative to increases in the scale rates directly related to the cost of living index. The index stood at 155 in September; by October it had risen to 165; by December it reached 173 and it was still rising. Towards the end of September, the parliamentary secretary to the Ministry of Labour, Ralph Assheton, said that the board was
22/9

carefully watching the position. A week later, Brown announced the boards intention to pay winter allowances on the same general lines as the previous year, but he made it clear to the House of Commons that this did not represent the boards response to war-time price rises: ... I think we had better deal with the question on its merits instead of linking the two questions together, as we did two years ago.
40 41

The boards officials were more cautious. A note written in early October suggested that the government would want to maintain for as long as possible that the rise in prices was a temporary adjustment to a new equilibrium and that the board would take whatever action was necessary under the Winter Adjustments Regulations. Stuart Kings advice, however, was that, to enable a general cost-of-living increase to be given, new regulations would be needed, either increasing the scale rates or giving the board a discretionary power to increase allowances. Whichever method was used, it would probably be the signal for an agitation for a similar increase all along the line of wages, benefit, pensions, billeting allowances, Service dependants allowances, etc. and must therefore be a matter for cabinet decision.
42

The question was discussed at a board meeting on 24-25 October which, Reid reported to the absent Tom Jones, has reminded us of former days except for the wagging of Strohs admonitory finger. A memorandum discussed at that meeting noted that the index, showing a rise of 16.3 per cent in food prices since July 1936, was based on 1914 spending patterns of working class households. It was not likely that the household of an unemployed man will buy ribs of English beef, fresh butter or eggs in any quantity. Prices of the foods they were more likely to consume - chilled beef and mutton, bacon, flour, bread, tea, sugar, milk, cheese, margarine and potatoes - had risen by only 12.8 per cent, and the cost of fuel and lighting by a similar percentage. Since a quarter of the scale rates was for rent, which was normally met in full, an increase of just under 10 per cent would compensate for these price rises. Under war conditions, however, there must be some retrenchment in normal expenditure, from which the boards applicants could not be entirely exempted. The memorandum, therefore, recommended that any increases in the scale rates should not be based directly on the cost of living index. It also drew attention to the political dangers of leaving the increases to the boards discretion, which would
43

put the whole basis of the allowances under the Boards control. At present when the general adequacy of the Boards allowances is assailed it is always open to the Board to say that the allowances are in accordance with a standard approved by Parliament. If the Board could make what general adjustments it pleased, this advantage would be lost, and the Board would in consequence be always liable to direct pressure to make increases.
44

22/10

The board reacted cautiously. While Reynard reported the unanimous view of investigating officers in Scotland that the level of prices was causing difficulties for families on assistance, Hallsworth regarded it as a sudden and exceptional deviation from the general trend and argued that the boards allowances included a margin on which applicants could manage for the time being despite some cases of hardship. Violet Markham was anxious that the board should avoid contributing to a disastrous general and progressive increase in prices, wages and the various forms of assistance. Nevertheless it was agreed that, if the index remained around or above its present level, an increase should be given. On the first day of the board meeting, the assessment sub-committee met to consider the method to be used. Amending the scale rates, they decided, would produce unwelcome side-effects: earnings disregards, rent rules and the fall-back would all be affected. They suggested, instead, that the allowances assessed under the existing scale should be increased by 1s. per adult and 6d. per child under 16. The amounts were provisional but the proposal to give a bigger percentage increase to families with children was a deliberate concession to public criticism of the childrens scale rates. The recommendation was endorsed by the board and a formal statement approved, concluding as follows:
45 46

If, and as soon as, evidence is forthcoming that the increase in prices reflected in the last index number is likely to continue for a considerable time the Board will be prepared, without delay, to submit proposals for the purpose of bringing the standard of the unemployment allowances into conformity with the new conditions.
47

The Treasurys concern about this proposal was conveyed in a letter from a principal assistant secretary, Frank Tribe, to Reid, expressing the hope that, unless the October index figure showed a very substantial rise, the board would continue to treat cases of hardship as they arose, rather than give a general increase: We are very anxious to avoid any increase in the level of social services because of the small rises in the cost-of-living which were unavoidable on the outbreak of war and we are, as you know, resisting any proposal to increase old age pensions or workmens compensation because of the cost-of-living.
48

In a minute to a Treasury colleague two days later, however, Tribe wrote: I have always felt that the first concession to be made will have to be on unemployment assistance allowances, since these represent the rock bottom subsistence rates for people without other resources. I think we should resist any increase in the rate of allowances until the cost-of-living has risen [since the outbreak of war] by 10 per cent but we may well find that when the figure for the 1st November is published that position will have been reached.
49

22/11

Reids reply to Tribe stressed the boards view that an increase in allowances was necessitated by the price level already reached. At its next meeting on 16 November, the board was told that the index figure to be published the following day showed a further rise from 165 to 169 - an increase of 9 per cent (11.6 per cent for food alone) over the prewar level - and decided that action was now justified. Draft regulations were provisionally approved giving effect to the increases of 1s. per adult and 6d. per child, with a similar increase in the earnings disregards and an increase of 1s.6d. in the 15s. scale rate for single applicants not living as members of households.
50 51

At this point, the awkward question of responsibility for the submission and approval of draft regulations again came to the fore. The Treasury, still reluctant to agree to the proposed increase, suggested that Brown should write to the Chancellor of the Exchequer, Sir John Simon, indicating the boards desire to submit draft regulations. The Chancellor would decide whether the letter should be considered by the Economic Policy Committee of the cabinet or whether he should discuss it with the Prime Minister. Brown, presumably anxious to avoid any new accusation of bypassing the statutory procedure, refused to write such a letter. He says, Tribe wrote,
52

that it is not his job; that the proper procedure is for the Unemployment Assistance Board, when they think fit, to submit draft Regulations to him ... that the initiative rests with the Unemployment Assistance Board and that if we at the Treasury want to stop the Board taking the line of action they think right it is for us to intervene and for the Chancellor to take the initiative.
54

53

Instead of Brown writing to Simon, therefore, Simon wrote to Brown asking him to refer the matter to the Economic Policy Committee. Rushcliffe prudently sent Brown not the actual draft regulations, which under the statutory machinery would have to be laid before parliament with any amendments, but a draft of the draft. The Economic Policy Committee met on 24 November, in the knowledge that the Opposition intended to raise the whole question of the standard of living of pensioners, the unemployed and others on low incomes in the debate on the Address the following week. Those present included both Reid and the Treasury permanent secretary, Sir Horace Wilson. The outcome was hardly in doubt. The Treasurys advice to Simon was that the scale rates were not adequate to accommodate a 10 per cent price increase and an increase in allowances was inevitable, despite the risk that insurance benefits might also have to be raised to prevent supplementation reaching a level at which the virtue of insurance was disappearing (the benefit rates were, in fact, increased in August 1940 by 3s. a week per adult and 1s. each for the first two children, followed by a further increase in the assistance rates in November 1940). Brown backed the boards proposals, while suggesting that an announcement might be delayed until shortly before Christmas if the cost of living had not risen much in November. The cost would be
55

22/12

reduced by an expected fall of some 100,000 in the number of applicants (over the first two years of the war it fell from 394,230 in September 1939 to 173,595 in September 1940 and 46,226 in September 1941). In response to Simons concern that the government might be faced with repeated recommendations by the board for small increases, Brown suggested that the childrens scale rates should be increased by 1s. per head instead of 6d. Wilson, however, warned that whatever increases were given would provide a higher base line for future increases, and the proposals were approved without amendment. When the draft regulations were formally submitted to Brown on 30 November, he was told that the board had carefully considered whether a further increase in the childrens rates was required but had decided against it. The rates proposed, Rushcliffe wrote, compared on the whole favourably with those recognised in most other social services (a somewhat controversial statement in the light of the fact, noted in a Times leader a few days before, that the allowances for taking in evacuated children were 10s.6d. for a single child and 8s.6d. each for more than one, excluding the cost of clothing, while the boards allowances for children would still be only 3s.6d. for a child under five and 6s.6d. for a child of 14 or 15), and higher rates would produce allowances for large families out of relation to their reasonable requirements and increase the numbers affected by the wage stop.
56 57 58

The political advantages of giving the increases before Christmas were obvious. The board decided on 29 November that this should be done in as many cases as possible, though Reid warned that it was the heaviest task the staff had been asked to undertake (those who remembered the 1935 standstill might have disagreed) and that there might be difficulties, especially in London. The regulations were not debated in the Commons until 12 December and did not come into force until 18 December but, when the board met in the new year, they recorded their appreciation of the work of the staff, including staff brought into the London offices from other areas, in making the increases before Christmas.
59 60

There was little serious criticism of the new scale rates. In the debate on the regulations, Dingle Foot pointed out that people who had exhausted their benefit entitlement would now receive allowances above the benefit rates and Campbell Stephen suggested that half a million people might apply to the board for supplementation of benefit - but, like past warnings of mass applications for supplementation, the prediction was not borne out by events.
61

Political considerations apart, how necessary were these increases? In Rushcliffes letter to Brown of 22 November enclosing the boards proposals, he had claimed that the board had evidence that many applicants are now experiencing real difficulty in making ends meet. That statement rested on no more than broad impressions and an a priori assumption that a 10 per cent fall in the value of allowances must have this effect. In mid-November, Reid asked district officers to ascertain what representations of hardship had been made by
62

22/13

applicants or others, whether investigating officers or others in touch with applicants had reported such hardship, and whether the difficulties had been confined to particular classes of applicants. The replies were inevitably subjective, some districts reporting extensive complaints, others few if any. The one point on which the information was both consistent and relatively objective was that about one in four recent appeals mentioned the cost of living. Given the small numbers of appeals, the probably unrepresentative nature of appellants, and the likelihood that price increases would be mentioned in their grounds of appeal even if they were not a serious source of hardship, this could hardly be regarded as solid evidence in support of the boards case.
63

More telling evidence, though on an even smaller scale, was provided by Middleton Smith, who spent three days accompanying London investigating officers on home visits. He reported that, out of about 15 cases where an allowance had been in payment for some time, the wife was present in seven cases and in five of these the applicant or his wife raised the question of increased prices, making remarks such as If the allowance is not increased soon I dont know how I will be able to manage. Two applicants said they could not provide necessary footwear for their children. The three visited at meal times were all single: The meal consisted in one case of two slices of dry bread, and in the other two of bread jam and tea. Judged on this evidence one would say that the applicants were having a hard time. Middleton Smith recognised the subjective nature of such judgements: ... in some of the cases in which I would, on the small amount of evidence available, have deduced that hardship existed, the same thought had not occurred to the investigating officer who accompanied me. It may therefore be possible that investigating clerks become so inured to such conditions that they fail to recognise as hardship conditions which would certainly be regarded as such by a competent judge. (On the other hand, of course, my impression may have been incorrect.)
64

We can only conclude that the board had no firm evidence of the extent or degree of hardship caused to applicants and their families by the rise in prices. The testimony of the area officers and Middleton Smith came too late to influence the decision but, in any case, it would have been impossible to say whether such hardship as existed was caused or merely intensified by recent price increases. Nor was any attempt made to repeat the enquiries carried out by the board in drawing up the original scale in 1934. The December 1939 increases were based mainly on an arithmetical calculation of the sums needed to restore the purchasing power of applicants - a method which was to be used on many subsequent occasions by the board and its successors, in preference to a fundamental reappraisal of the adequacy of the scale rates.

22/14

Reinventing the dole: a history of the Unemployment Assistance Board 1934-1940 by Tony Lynes is licensed under the Creative Commons Attribution 3.0 Unported License. To view a copy of this license, visit http://creativecommons.org/licenses/by/3.0/ or send a letter to Creative Commons, 444 Castro Street, Suite 900, Mountain View, California, 94041, USA.

22/15