CHAPTER 12: THE CUTS The first month On the day the UAB opened its doors to the

public, 7 January 1935, The Times wrote: Everything points to the prospect that 1935 will be a distinctly happier year for most of those who, in spite of the industrial recovery, will not be able to find work. The Regulations under which the Board will operate are intended and expected to be more generous, particularly in respect of dependent children, than the previous system of relief. About 3,000,000 more, it is estimated, will be distributed to the transitionals alone; and, except in a few areas where the rates of relief, when paid out of the taxpayers money, have been unduly high, those suffering from persistent unemployment will certainly be better off.
1

That evening, after the 9 oclock BBC radio news, the chairman of the board spoke to the nation. After explaining the positive aspects of the regulations - the improved allowances for children, the easing of the means test, the officers discretionary powers and the right of appeal he ended on a more cautious note: The task of looking after the unemployed who are in need has rested upon the Local Authorities for over 300 years. We have had six months in which to create a new system on a national basis and we shall see to it to correct any weaknesses which this system may disclose. I want to be frank about one thing. It is inevitable that the Regulations will mean a reduction in certain cases, but in a very large number of others it will mean an increase, for as the Minister of Labour told the House of Commons, we estimate that the increase in payments to the people who are at present receiving transitional payments will be at the rate of 3,000,000 a year. From those disposed to criticise I ask for patience, for the system must develop slowly.
2

There were good grounds for caution. The extra 3 million was, at best, only an estimate. Even if it proved correct, it would be little comfort to those whose incomes were to be cut. Already there were signs of trouble in South Wales. On 2 January, the Welsh Secretary of the National Council for Social Service, Sir Percy Watkins, had warned Strohmenger and Tom Jones of the preparations being made for protest meetings and marches: Merthyr, Rhondda and Pontypridd are bad patches, but the discontent is not confined by any means to those areas. ... People on whose judgement we can rely tell me that the temper is uglier than anything they have seen for years, and these people
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are strongly urging that something ought to be done to give the decent minded folk a chance of refusing to be stampeded into a general rising. The main complaints, Watkins reported, were about the treatment of families with a wage-earning member, facing cuts in the region of 12s. a week.
3

Most of the cuts were as yet only hypothetical. The transfer to unemployment assistance was to be spread over an eight-week cycle as transitional payment determinations expired. Thus, in the first week, only about one-eighth of the current cases were to be reassessed, and even they would receive payments at the old rates during that week. By the beginning of January, however, it was obvious that the means test was going to be administered with a rigour to which South Wales was entirely unaccustomed. In some respects, gradualness made matters worse. Tom Joness daughter Eirene (later Eirene White, MP) wrote to him on 22 January: No one knows when the inquisition is going to visit him and they are working themselves into a state of hysteria because they dont know when their turn will be. Apparently they are revising 400 a week in Tonypandy area, but no one knows in what order and they are dramatising the visit of the officer and getting terribly excited and worked up. ... club work is at a standstill because instead of getting on with singing or acting, someone starts off on the cuts and theres no stopping them.
4

The demonstrations were not spontaneous. The NUWM was hard at work organising meetings and marches, making 7 January a day of national demonstration when, the movements leader Wal Hannington recalled, All over Britain ... tens of thousands of unemployed marched in sleet and rain to protest against this new attack upon their standards. But the protests could not be dismissed as the actions of a small communist-inspired minority. On 5 January the South Wales Miners Federation decided to convene a conference on the 26th to protest against the regulations and decide on lines of action. A united front demonstration on Sunday 20 January brought thousands marching down the Rhondda Valley to Pontypridd - 60,000 according to Hannington. They had a huge demonstration on Sunday, Eirene Jones wrote, and things are chalked up over the houses, Break the Slave Act or it will break you, etc. etc. Preserved among Violet Markhams papers is a cutting from the Western Mail and South Wales News of 23 January in which the following meetings and demonstrations are reported to have taken place the previous day:
5 6

A United Front demonstration in Merthyr, attended by nine or ten thousand people and addressed by Hannington and others (the Merthyr Trades Council and Labour Party refused to cooperate with the communists, holding their own demonstration instead).

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A protest meeting addressed by D L Davies, MP, which filled the Pontyclun Schools. A conference organised by the Rhondda Borough Labour Party at Cymmer (Porth) Institute, at which 450 delegates, including 288 church representatives, decided to form a central committee for the whole of the Rhondda, representing industrial, commercial, political and religious organisations, to take steps with a view to the withdrawal of the regulations. A demonstration of more than 2,000 from Brynmawr, Nantyglo and Blaina districts, which broke into a meeting of the Blaina Trades and Labour Council (the Trades and Labour Council, perhaps as a result, appealed to church secretaries to convene a special meeting and cancel Sunday school so that their members could attend a demonstration the following Sunday). A meeting of the Aberdare Rotarians at which George Hall, MP, spoke about the effect of the regulations. A special meeting of the Abertillery Trades and Labour Council to confirm the executive committees decision to take part in a protest meeting initiated by the communist party, in defiance of the Labour Party constitution, and to co-operate with the United Front Committee formed to organise opposition to the regulations. (Mr R J Gunter - later the Right Hon. Ray Gunter, MP - insisted that this did not mean they were uniting on anything else!).
7

There could be no doubt that the thousands who participated in the demonstrations were motivated by a genuine and widely shared sense of outrage. The board, however, could derive some comfort from the fact that the most violent reaction occurred in South Wales, which was not only the traditional home of political militancy but also the area where lax administration of the means test had made it inevitable that the cuts would be numerous and large. Although there were demonstrations in other parts of the country, including Scotland and the east end of London, the extent of which has never been fully documented, they did not compare with the explosion of feeling in South Wales. Board members, in particular Tom Jones and Violet Markham, were at first mainly concerned about the need to defend the board from unfair criticism. Eady was, as usual, opposed to the boards rushing to its own defence. When Jones, at the board meeting on 10 January, complained of misrepresentation by the boards critics, Eady replied that the talk of cuts of 1 million a year in South Wales might not be very wide of the mark. It would be wiser, he argued, to ride out the storm, which would probably reach its height about the end of January and, if the experience of the Durham commissioners was repeated, would then gradually subside. Jones and Markham urged that the board should at least issue, as soon as possible, a popular explanation of the regulations, and it was agreed that this should be done, though the ever
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cautious Eady wondered if it would not be better done by the National Council for Social Service than officially by the board.
8

The following week, William Noble, warden of an educational settlement in the Rhondda, urged Betterton (now Lord Rushcliffe) to come to South Wales himself and meet some of the local leaders; there was, he said, not only resentment but complete confusion as to the meaning of the regulations. Eady advised against such a visit either before or immediately after the Rhondda demonstration - it would not do for the board to appear to be giving in to this kind of pressure - and Rushcliffe, to Markhams disgust, did not go. It is unfortunate, she wrote to Jones, that our staff with such great qualities have a blind spot where public opinion is concerned. Instead, the boards district officer, Gibb, agreed to meet a deputation. The impression he made, Eirene Jones told her father, was that though he meant well, he really had no idea of what the regulations meant to all these people. Gibb himself considered it quite good policy to see deputations from these demonstrations because many of the demonstrations include not only the NUWM but the United Front which includes local traders, Trade Union representatives etc., but he did not believe anything could be done to meet their objections: What they object to is man and wife getting 26s. and losing any part of that money.
9 10 11

It soon became clear, however, that something must be done to meet some of the complaints. In particular, however reasonable the regulations might be, they were being applied too rigidly and too little use was being made of discretion. An urgent instruction was issued on 18 January to prevent cuts of less than 1s. a week. Another urgent instruction, four days later, modified the rent rule: the 1s.6d. mitigation of low rent reductions for households with no resources was to be extended to those with disregarded income of less than 5s. Yet another instruction dealt with the treatment of applicants with unemployed sons or daughters aged 16 or over. In some cases the boards officers had excluded them from the assessment, leaving them with no source of income other than outdoor relief. Under the new instruction, all children of the applicant living with him, of whatever age, were to be treated as prima facie dependent on him unless eligible for an allowance from the board in their own right.
12

A survey of cases dealt with in the first week revealed a number of other grievances, mainly due to rigid application of the means test. Household members other than the applicants children were being left dependent on the poor law, unreasonable cuts were being made on account of childrens earnings, contributions from children who had left home were being deducted in full, applicants were being forced into dependency on in-laws, and there were difficulties caused by fluctuating resources. Such problems could, if necessary, be dealt with by minor modifications in the instructions and greater use of discretion; but evidence was emerging of a gap between intention and achievement which could not easily be bridged.
13

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When the board met on 23 January, Eady announced that a rough examination of the first weeks assessments showed a net reduction of about 7 or 8 per cent in the total payments. Instead of spending 3 million more than the local authorities, it now seemed that the board was spending considerably less. The main reason, he believed, was the large number of nil determinations in cases where resources had been ignored in the past. The resources discovered by the boards officers had been larger than expected, perhaps partly because of increased earnings over the Christmas period. The assessment work, Eady reported, had been done with remarkable accuracy, but in some cases it could have been done more intelligently and discretion might have been exercised to better effect. There were varied reactions. Reynard insisted that there had been no lack of discretion in Glasgow. Jones and Markham again urged that action should be taken to counter misleading statements in the press. Rushcliffe admitted that the general level of rents was lower than he had expected, but suspected that a major cause of the cuts was that some local authorities had deliberately increased transitional payments in recent months to embarrass the board. He also expressed concern at the small number of appeals, fearing that applicants seeking to appeal were being sidetracked, despite Eadys assurance that area officers were merely explaining the regulations to them, not dissuading them from appealing. Taken as a whole, the record of that meeting shows that the board had not yet grasped the seriousness of the situation or the radical nature of the measures that would be required in the coming weeks.
14

Why the regulations failed What had gone wrong? Why, after the concessions forced on the board by the minister and the cabinet committee in November 1934, were the regulations apparently so much less generous than had been expected? Much of the detailed evidence is in a memorandum which the board submitted to the minister in May 1935, containing both the boards account of events and its proposals for the future. Although this document, referred to below as the May memorandum, represented in part the boards defence of its administrative record, there is no reason to doubt that the statistical material is substantially accurate.
15

An additional source of evidence is the examination carried out by the board of changes in transitional payment determinations in the second half of 1934. The average level of payments had risen slightly over that period, despite the improved employment situation and the resulting increase in the earnings coming into applicants households. After eliminating the effects of the restoration of the 10 per cent cut in benefit rates, it was estimated that increased laxity had increased the annual rate of expenditure by about 1.5 million. In some areas, increased laxity may have been an unconscious reaction to the imminent transfer of responsibility to the board. In others, such as
16

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Barnsley and Hull, it was deliberate and may have been intended, as Rushcliffe believed, to make the boards task more difficult. At all events, the result was that a large part of the extra 3 million which the board had expected to spend was already being spent by the local authorities. The May memorandum showed the results of determinations issued by the boards officers in the weeks commencing 21 January and 18 February 1935 and the two weeks commencing 1 April. The April figures were used mainly to model the effects of the changes proposed in the memorandum, while the January and February figures were used for comparison with the previous transitional payment assessments (the February figures were based on the amounts that would have been payable under the boards regulations, rather than the amounts actually paid, since the standstill was already in force). The January figures showed an overall reduction of 7.5 per cent (5.6 per cent in England, 12.7 per cent in Wales and 10.7 per cent in Scotland), the February figures a reduction of 6.7 per cent. The most striking difference was between households with other resources, incurring cuts of 18.4 per cent, and those without resources whose payments increased by 2.5 per cent. For those without resources, most of the cuts were between 2s. and 5s. a week. For those with resources, most of the cuts were 5s. a week or more; in one out of four cases, 10s. or more. A typical case was that of a single man aged 27, living with his parents in East London and receiving transitional payments of 17s. a week. Under the boards regulations, the earnings of his father, two brothers and sister, after deductions for their personal requirements, exceeded the households needs by 21s.4d., leaving him with no entitlement to an allowance.
17

In terms of numbers affected, the January figures showed that 64.5 per cent of applicants with resources and 39.9 per cent of those without suffered cuts. Nearly half the losers were living as members of families (i.e. households of three or more persons). The proportion facing losses was, naturally, highest in areas where the local authorities had virtually failed to administer a household means test: 74 per cent of those with resources in Glamorgan, Monmouthshire and Barnsley, 76 per cent in Barrow-in-Furness, 79 per cent in Blackburn and 84.5 per cent in West Ham. But there was another reason why applicants with resources were hit hardest: the rent rule. Reductions for low rent were based on a comparison between actual rent and the basic rent allowance. Larger households, having higher basic rent allowances, were more likely to be affected; but large households were also most likely to have earning members. The May memorandum shows the extent of low rent reductions. About 85 per cent of applicants were in households of two or more persons, to which the rent rules applied. About 60 per cent of them (64.4 per cent of those with resources) had rents low enough to result in a reduction. The total reductions for low rents amounted to about 2,650,000, while the increases for high rents totalled only about 900,000. The
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reductions averaged about 3s.6d. a week for those with resources and 2s.6d. for those with no resources. The averages were higher in rural areas: in the rural areas of Scotland, 5s. a week for those with resources and 4s. for others. The operation of the low rent rule did not necessarily mean a net reduction in the applicants income, since it could be outweighed by other provisions of the regulations. Only two-thirds of low rent reductions in resources cases led (or would have done but for the standstill) to an actual cut in the weekly allowance; less than half did so in cases where there were no resources. Even so, there must have been about 250,000 cases where an actual cut would have resulted from the rent rule. Such cuts were not unexpected, but the board had failed to anticipate the effects of the combination of low rents and household resources. The result in the worst affected areas was catastrophic. If nothing had been done to prevent it, the overall reduction in payments to applicants with household resources would have been as much as 30 per cent in Glamorgan, 28.5 per cent in Monmouthshire, 40 per cent in West Ham and nearly 42 per cent in Barrow. These are net figures, including gainers as well as losers. In Glamorgan, for example, 74 per cent of applicants with resources would have been losers but 20 per cent would have gained. The percentage cut for losers alone would have been much more than 30 per cent.
18

The proportion of cuts would have been smaller if the boards officers had made more use of discretion; but to expect them to do so while struggling with an unfamiliar and complex set of rules was unrealistic. The boards initial instructions described the use of discretion as the most important as well as the most difficult part of the officers duties and stressed the need for vigilance to ensure that the circumstances of a case did not call for adjustment of the allowance either upward or downward. More specific guidance was provided on discretionary increases in the amounts that earners were to be allowed to retain for personal requirements, mentioning in particular the clothing needs of a clerk or school teacher and travelling expenses. But only one paragraph was devoted to the power to award increases for special circumstances, the only cases specifically mentioned being those with needs arising from sickness, such as a special diet, or where a woman applicant, say an unemployed clerk or typist, is obliged to pay a relatively high rent. The May memorandum denied any general failure to exercise discretion but admitted that, in the third week of the boards administration, discretion had been exercised in applicants favour in only about 5 per cent of cases. Three months later, the number of discretionary additions had doubled. At the time when it was most needed, however, discretion did little to mitigate the effect of the regulations.
19 20

In spite of everything, the board and the government might have stood firm behind the regulations but for two highly embarrassing facts. The first was the extra 3 million which, instead of going into the pockets of
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the unemployed, remained locked in the Treasurys coffers. The second was the impact of the regulations in County Durham, where the board had taken over not from an erring local authority but from commissioners appointed by the minister, who had already cut transitional payments by some 250,000 a year. The boards regulations produced further cuts in nearly half the cases in the county and increases in only about a third, resulting in an overall net reduction of 3.7 per cent. It may have been true, as Reid had suggested in 1933, that the commissioners had been so concerned to disarm criticism that they had let applicants down lightly, leaving scope for further economies, but the accusation of being meaner than the Durham commissioners could only be damaging to the boards reputation.
21

The parliamentary reaction The House of Commons did not meet after the Christmas recess until 28 January. The first business on the order paper was a debate on a supplementary estimate of 5 million, covering the boards expenditure for the month of March (the allowances paid in January and February, before the second appointed day, were to fall on the Ministry of Labour vote). The debate, however, had little to do with the supplementary estimate and consisted mainly of a series of speeches by members of all parties, including government supporters, calling for immediate action to mitigate the cuts. The government found itself almost friendless in its defence of the regulations and was forced to agree to the debate being extended over two days, by the end of which there was a marked change in the attitude of the minister. Oliver Stanleys opening speech on 28 January showed that he was well aware that the debate would be dominated by concern about the cuts. He had never attempted to conceal from the house, he said, that the regulations would cause reductions, which were bound to be more severe in areas where administration had been lax. But he repeated the estimate that, over the country as a whole, the increased cost would be around 3,000,000 a year. That estimate, he added, I have no reason whatsoever to alter - a rash statement, since he must have known that there were now, at the very least, serious doubts as to the accuracy of the estimate. It was, he argued, too early to judge the effect of the regulations. Instead, he blamed the boards officials who untrained in the particular work had to assume responsibility for a large number of payments under a rather complicated system which had only just been brought into force. They had failed to understand the boards intentions as to the use of discretion; but, he assured the House, immediate steps were being taken, and on certain points had already been taken, to put this right. If the regulations themselves were found to cause grave anomalies or hardships, it would be the boards desire, as well as its duty, to submit amending regulations. Finally, he undertook to make a full report on the working of the regulations available to parliament as soon as it was possible to get an adequate picture.
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A series of speeches followed, protesting about the operation of the regulations. The government benches, Eady reported, were very empty throughout and there was difficulty in finding anybody to say a reassuring word about the regulations. But if government supporters did not want to sit through the debate, a number of them were ready to speak on behalf of their constituents. Robert Boothby reported that an enquiry into 42 cases in the Scottish fishing town of Peterhead had shown cuts averaging 6s.11d. and ranging from 2s.6d. to 18s.6d. and only one increase of 1s. The cuts, he said, were brutal. He ascribed them mainly to the rent rule, which penalised people because they are not charged 10s. a week for the miserable houses in which they are compelled to live. ... I do not want to oppose the government or to be factious or difficult, he concluded, but it is our duty to put these points if we see our constituents being battered, as I think my wretched people are being battered. He was followed by another speaker on the government side, the member for Dunfermline Burghs, Sir John Wallace, who admitted, I did not contemplate that there was even a remote possibility of such cuts being made and pleaded for a revision of the boards scales at the earliest possible date. The member for Kilmarnock, Kenneth Lindsay, as Eady reported, made effective play with the fact, which we cannot deny, that up to the present 80 per cent of the determinations in Kilmarnock are reductions.
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Government supporters with constituencies in the north-east of England criticised the rent rule. Sir Robert Aske argued that it was wrong to apply the same rule to town and country: If people are paying only 5s. rent in an industrial town today, that means that they are suffering great inconvenience and probably distress through insanitary arrangements and other defects. ... There ought to be no reduction because of rent in industrial towns. Sir Luke Thompson, the member for Sunderland, drew attention to the situation of large families who could not afford a high rent and therefore suffered a double cut - through the rent rule and the supercut.
26

From the Labour benches there were emotive speeches by South Wales members, though in Eadys judgement they were less effective than Lawson, the member for Chester-le-Street, who complained that the board was cutting the allowances awarded by the Durham Commissioners. A Lancashire member, Gordon Macdonald, similarly reported that, though no other county council had treated the unemployed with such meanness, even in Lancashire there were cuts. He criticised the administration of the household means test: We can hardly believe that the Minister intended that where a brother-in-law, or a brother, or a cousin happened to be lodging with an applicant, his income should decide the amount of allowance to the unemployed father of a number of children. George Buchanan, the member for the Glasgow (Gorbals) division, made the same point, illustrating it with magnificent dramatic effect (Eady wrote) by the case of an unemployed widower who, on moving to
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his sister-in-laws house with his children, found that her husband was expected to maintain both families out of his wages. His speech, Eady reported, as often happens, really rattled the Government Front Bench.
27 28

The last speaker that day was the parliamentary secretary, Hudson, who offered a number of explanations for the cuts. He quoted an article in the Aberdare Leader entitled How Labour outwitted the Ministry as evidence of the illegal practices of some local authorities, especially in the last few months when, knowing that the board was about to take over, they did not see any object in incurring odium and difficulty by investigating cases too closely. In some cases, the local authority had treated two applicants living together as separate households, or had ignored increases in earnings. Like Stanley, he relied on the estimated 3 million extra cost, citing the increase from week to week in the average level of payments as evidence of its accuracy. The points raised in the debate, he assured the House, would be referred to the board and could be dealt with by administrative action. Finally, he stressed the role of the appeal machinery: The whole effect of the Regulations depends upon the action of the appeal tribunals. ... I cannot personally conceive of any chairman of an appeal tribunal refusing leave to appeal where he has any doubt whatever, on looking at the case papers, that the determination was other than fair and reasonable. I am perfectly certain that if this Debate had taken place three weeks from now, when the appeal tribunals have been working, we should have heard a very different story.
29

In fact, whether Hudson knew it or not, the number of applications to the tribunals was small and the number granted leave to appeal was very much smaller still. Before the debate was resumed the following day, urgent consultations took place between Stanley and the boards chairman and secretary. They were recorded briefly by Eady: The Minister asked to see the Secretary at 11 a.m. He stated that the Debate was running very badly, that Members of all Parties were complaining to him of the cuts which they had not expected, having regard to the statement he had made when introducing the Regulations. He asked that the Board should consider as a matter of the greatest urgency whether they could ease the position by the exercise of discretion, and he mentioned in particular the effect of the rent rule and the trouble of the two households. The Secretary asked the Minister whether his chief concern was to reduce the number of cuts or to ensure a larger expenditure of money, as the approach to the problem would differ. The Minister made it clear ... that at the moment he was considering the stream of cuts that would be following on each week until the 1st March.

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At 11.30 the Chairman came to see the Minister and the Minister repeated the same view. The Chairman informed him that the Board had already been considering the problem of the households and that it would push on as fast as possible. Agreement was reached as to the points on which, in winding up the debate, Stanley could offer some reassurance.
30

The second day of the debate was largely a repetition of the first, with government supporters again joining the opposition in condemnation of the effects of the regulations. The Labour leader, George Lansbury, demanded that the cuts should be restored and that the appeal tribunals should adjudicate between the board and the unemployed. A similar proposal for some form of standstill order, deferring any cuts until applicants had had the opportunity of appealing, was made by a Conservative member, Captain Ramsay. The idea of inflating the role of the tribunals in this way, however, was unlikely to commend itself either to the board or to the government. Stanleys response was on the lines agreed with Rushcliffe and Eady. Unlike Hudson the previous day, he adopted a conciliatory manner, conceding that the regulations had not worked as expected. He was more cautious than before about the extra 3 million but still insisted that the average payment was rising week by week and was already appreciably higher than before the regulations had come into force. Even in Merthyr Tydfil, one of the hardest hit places under the Regulations, about 50 per cent of the people were getting increases, albeit small ones (this figure, he admitted, was culled from a press report; the truth, shown later by the unpublished May memorandum, was that only 29 per cent of applicants in Merthyr got increases, taking the January and February figures together). But he conceded that it was no answer to a claim of hardship to say that somebody else was going to benefit: what we have most certainly to deal with are the instances of grievance and hardship under the Regulations which have been raised in Committee. The board was issuing instructions to deal with cases where two families were living under the same roof and to prevent large families from being subjected to reductions under the rent rule as well as the super-cut. The complaint that the board was insisting on imposing very small cuts had, he said, already been dealt with. The board was also considering the treatment of cases such as that mentioned in the debate where an elderly man was made wholly dependent on his son-in-law. All these matters, Stanley insisted, could be dealt with by the use of discretion. There was one point, the effect of the rent rule in low-rented areas, which might require a change in the regulations, but he again suggested that the difficulties were due largely to the fact that new men doing a new job act with a timidity that experienced men do not.
31

As the debate concluded, it was clear that Stanley could not be relied upon to defend the board unless drastic action was taken to meet the complaints. The supplementary estimate, which had provided the occasion for the debate, was to go through its report stage a week later, by which time the critics would have gathered further ammunition. It was up to the board to consider how far it could go, whether by
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instructions to its officers or other means, to ensure continued ministerial support, without which the future not only of the regulations but of the board itself would be in doubt.

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.

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