CHAPTER 15: PRIDE AND COMPROMISE: (1) LOCALISM The new minister On 22 May 1935, the day after

receiving the boards proposals in the May memorandum, Stanley showed his contempt for the board and all its works by sending Chamberlain another memorandum for circulation to the cabinet committee, advocating a return to local administration. This document has not been traced but Treasury officials comments are revealing. J A N (later Sir Alan) Barlow wrote: Mr Stanley ... proposes to circulate with the U.A.B. memorandum ... a memorandum of his own which is completely destructive. ... His memorandum will almost certainly completely queer the pitch for a dispassionate consideration of the amendment of the regulations, as opposed to the complete destruction of the Board as contemplated in the Act. It may be impossible for the present Minister, in view of past history, to live with this Board, but does it follow that the whole plan must be abandoned? Sir Richard Hopkins added: The Ministers observations on the practical working of the scheme is a vicious attack fairly evenly distributed between the Act as an Act and the Board as a body of individuals. I trust the Chancellor can ensure that it is suppressed. It leaves no hope of amicable relations supervening. Sir Warren Fisher, as well as endorsing Hopkins advice, added his own comment: In spite of repeated efforts by the U.A.B. it is clear that the 2 Ministers have no intention of working with the U.A.B. The quicker they go elsewhere, the better.
1

Two weeks later, they went. The boards relations with Stanleys successor, Ernest Brown, were to be far from easy and a good deal of hostility remained between the two departments; but the change of ministers at least made communication possible and enabled serious negotiations on the future of the assistance scheme to commence. Ernest Browns appointment as Minister of Labour in place of Stanley in June 1935 was part of the cabinet reconstruction resulting from Ramsey MacDonalds resignation as Prime Minister and his replacement by the Conservative leader, Stanley Baldwin. Neville Chamberlain remained Chancellor of the Exchequer. Godfrey Collins who, as in 1934, was to play an important role in the cabinet committee on the regulations was reappointed Secretary of State for Scotland. Stanley remained in the cabinet as President of the Board of Education, while Hudson became Minister of Pensions.

15/1

After the aristocratic Stanley, second son of the Earl of Derby, Brown was a very different proposition. A former party colleague, Dingle Foot, described him as follows: Ernest Brown was, in the full sense of the term, a professional politician. During the war he had joined the Army as a private soldier and had been promoted to the rank of lieutenant. ... After demobilisation he became a paid speaker for the Liberal Party. He would spend the whole working week addressing Liberal meetings up and down the country. On Sundays he was a Baptist lay preacher. ... At turbulent gatherings Brown was in his element. He had every argument at his finger-tips; he knew the answer to every question and he had one other considerable advantage. In those days, when loudspeakers were still a rarity and orators had to make themselves heard above the din without any mechanical aid, he had the loudest and most resonant voice in public life. As a writer in the Daily Express once put it: He bawled his way through England.
2

Browns loud voice gave rise to reports of the following, doubtless apocryphal, conversation between two MPs: Whos that shouting? Its Ernest Brown talking to somebody in Birmingham. Why doesnt he use the telephone? Tom Jones, meeting Brown for the first time in December 1935, took to him at once: We shall get on ... much more easily with him than with Oliver Stanley. Brown like Jones is one of the People - obviously selftaught, devoted to books (I found he liked Erasmus) and to sailing. His father was cox of the Torquay life-boat. He has a quick political mind and has not lost his sincerity and sympathy. He vows he will stand firm in the House to anything we agree together in advance.
3

Two months later, after attending a meeting at the Ministry of Labour, Joness admiration was less uncritical: ... he is a true politician. He used very brave words. He was going to stand firmly by all he accepted - provided of course we conceded everything he asked and reduced the cuts to nil or nearly nil. He talks rapidly, very very often, and with an appearance of giving everything away for nothing, rather like a cheapjack at a fair, bringing his fist down on the table with a bang every few minutes to clinch matters.
4

Brown was as good as his word. He drove a hard bargain but never let the board down either as its representative in cabinet or as its parliamentary spokesman. The qualities that Jones admired, however, were not such as to endear him to the boards officials or its quasi-

15/2

official deputy chairman Strohmenger. Violet Markham wrote to Jones in November 1935: ... I deplore the extreme contempt Eady and Strohmenger load at every turn on Brown. I think they are mistaken both in fact and principle. I have the impression Brown is a decent shrewd man and in no sense a nit wit. Is it wonderful he goes steady with us after the mess of the Regulations? ... if I were Minister of Labour I should go very cannily with the Board!
5

Alternative solutions: localism and discretion Within days of Browns arrival at the Ministry of Labour, at least two alternatives to the boards proposals were being pressed on him from influential quarters. On June 7, the day the new cabinet took office, Chamberlain took Brown aside for a preliminary chat. He wrote to his wife: I was of course very careful to say that I was not asking him to commit himself in any way, as he must have time to master the position. But I told him the inner history of the U.A.B. and my own part in its inception and development. I pointed out the dangers of leaving things unsettled at the Election and the loss of prestige to the Government if the Board were scrapped. I urged him to get on terms at once with the Board and I warned him of the difficulties he might encounter in his new office. He did not of course commit himself but I feel satisfied that he will make a strong effort to find a solution on lines that would be acceptable to me.
6

If Chamberlain did not ask Brown to commit himself, he did, as a later diary entry shows, suggest a possible course of action which differed substantially from the boards proposals: a return to local public assistance standards followed by a gradual move towards greater uniformity, subject to consultation with local advisory committees. The idea, put forward three months earlier by the Ministry of Healths permanent secretary, Sir Arthur Robinson, was politically attractive, enabling any cuts to be spread over a long enough period to avoid serious hardship, taking account of local opinion and, above all, deferring indefinitely the laying of detailed new regulations before parliament. Whether either the board or the Ministry of Labour were at first aware of Robinsons suggestion is uncertain, but Chamberlain noted at the beginning of July that Brown was then working on it and it surfaced towards the end of September, first in a note sent to the board by Phillips with a request for comments - the first mention of the plan in the boards surviving records - and a few days later in the form of a definite proposition by Brown.
7 8 9

Another alternative to the boards proposals was being propounded from outside government by Ronald Davison. Events had shown, he argued, that unemployment relief must be discretionary, and discretion could not be exercised effectively by a central body:

15/3

This is no function for civil servants, especially those in the minor grades; and under the present scheme it is only the humblest and youngest officials who actually see the applicants. The higher officials, who possess the discretionary power, deal with the cases on paper, and there are thousands of cases to each officer. The answer, he suggested, was to entrust the front line work to committees modelled on the rota committees which had carried out mass interviewing of unemployment benefit applicants in the 1920s. They would be able to discuss not merely a mans monetary needs, but his present and future opportunities of re-employment, ... together with any other troubles that are keeping him down. Regional commissions, most of whose members would be appointed by the local authorities, would draw up rules of assessment for each region, based on a code and model scale laid down centrally, but the local committees dealing with individual cases would have wide discretionary powers. Although Davison did not suggest that the board should be abolished, its remaining functions would hardly have justified its survival.
10 11

Davisons ideas were open to obvious objections. Memories of the rota committees were both recent and unpleasant. The number of applicants would have ensured that the interviews were extremely brief, offering little opportunity for intelligent exercise of discretion. As for the regional commissions, Violet Markham wrote to Davison: The great variations in rent have been provided for separately. Apart from rent, stomachs, I might remark, are just the same (and ache just as much when they are empty) in London as in Merthyr. In London, as in Merthyr, people want the same minimum amount of heat and light and clothing. The Times, in similar vein, on publishing a letter from Davison setting out his proposals, commented: The old system was uprooted for nothing if Mr. Davisons suggestion is adequate and local self-determination can be restored. But there were others who, faced with the boards initial failure, found Davisons plan attractive as a means of re-introducing localism without handing responsibility back to the local authorities.
12 13

Browns reaction to these conflicting pressures was to play for time. He first asked his own officials for a commentary on the May memorandum and for answers to a list of searching questions on the boards figures and the implications of its proposals, ending with the fundamental question: was there really any need for central scales and was it worth disturbing the arrangements affecting between 200,000 and 250,000 people still receiving poor law assistance at local rates, who were to be transferred to the board on the second appointed day? The ministry officials were unenthusiastic about the boards proposals, pointing out that they would involve cuts in 34 per cent of existing allowances, varying between districts from 16.5 per cent to 48.4 per cent (the latter for the area round Glasgow); that the scale rates for man and wife and for single persons living alone would still be 2s. below the benefit rates and, therefore, below transitional payment rates in many areas; that there was no indication of the size of reductions to be made in rural areas; and that the scale remained complicated and in many cases the scale rates would not actually be paid. They also noted that the board
14

15/4

was proposing to spend 1 million a year less than its original estimate. The case for uniformity, they wrote, was strong, but it would involve cuts for large groups of unemployed people in some areas. The question to be decided was whether such cuts were politically possible. If not, the alternative was to adjust existing payments to the extent that local conditions required and local opinion would accept.
15

Faced with this advice, and with a general election a few months ahead, Brown could hardly be expected to endorse the boards proposals. Little progress was made during the summer months. Rushcliffe was, as usual, fishing in Scotland, while Eady and his staff were kept busy by a series of questionnaires from the ministry, seeking clarification of every conceivable aspect of the proposals. Whether these were a genuine attempt to assess their merits or a mere delaying tactic, they enabled Brown to get through the summer without making any formal response to the board. There was, in fact, a fundamental tactical difference between the board and the minister. The board did not want the standstill, the anomalies perpetuated by it and the wasteful and demoralising duplication of work resulting from it, to continue for a day longer than was necessary. For Brown, however, the standstill was a minor inconvenience. There were few complaints about its effects and whatever method was used to bring it to an end would involve cuts for many of the unemployed, probably without any net saving to the exchequer. Above all, new regulations would produce angry protests both in parliament and in the country. If something had to be done, Robinsons proposal had obvious advantages over the boards plan which involved bringing in new regulations at the outset. But the political risks involved in backing a solution diametrically opposed to the boards wishes were equally obvious. Towards the end of September, Phillips discussed the Robinson plan with Eady. Finding him unwilling to contemplate indefinite postponement of the new regulations, Phillips suggested that a solution based on the May memorandum might be acceptable provided that the board was willing to expand the role of the local advisory bodies and place more emphasis on protection of the vested interests created by the standstill. After consulting Strohmenger, Eady submitted a tentative plan giving the advisory committees a specific function in relation to the treatment of rents - the main source of local variation in living costs and offering some additional protection to standstill cases. Instead of a complicated rent rule, the committees would be asked to advise on the adjustments to be made where actual rents differed from the amounts allowed for them in the scale rates. Subject to these adjustments, allowances already in payment under the standstill would be preserved; but this protection would not apply to new cases, single applicants, or cases where, owing to lax treatment of resources, the household income was more than twice the scale allowances. Where a change of circumstances would result in a standstill allowance being reduced, time would be allowed for an appeal hearing. Part of the additional cost of these proposals would be met by tightening up the treatment of

15/5

earnings, but the net cost would still be about 1 million more than that of the May proposals.
16

The package as a whole, Eady explained in a letter to Rushcliffe (still fishing in Scotland), was very diplomatic in the sense that it is closely related to what we have discussed with Phillips, and it is intended to give Phillips, if he wants it, an opportunity for suggesting to the Minister that both on guarantee and on the local touch this goes pretty far.
17

It did not, however, go far enough for Brown, who was by now wholly committed to the view that the standstill must be unscrambled slowly before there could be any question of new regulations. Rushcliffe returned unwillingly from Loch Ness (where, he reported, the weather was awful and the sport extremely good) to be informed by Brown of his conclusions, which were summarised in a note presented to the board the following day, its first meeting since the summer: The Minister has throughout regarded it as important to maintain the framework of the Act and the authority of the Board in any new arrangements that may be made. ... The result of his consideration, however, is to convince him that it is not practicable, at any time that can immediately be foreseen, to substitute for the present Standstill a position in which all applications are determined in accordance with a single set of regulations of universal application; the differences in local practice are too great to allow of this. He proposed that, by a slow and gradual process, unreasonable allowances paid under the standstill would be reviewed, taking due account of responsible local opinion.
18

This, in the boards view, was taking gradualism too far. In an attempt to win Brown over to Eadys plan, they reluctantly offered to raise the scale rate for a couple living alone from 24s. to the insurance benefit rate of 26s. At this point, however, negotiations were interrupted by preparations for the general election which was to take place on 14 November 1935.
19

It was essential that something should be said in the governments election manifesto about the future of the means test, but drafting a statement which would be acceptable both to the cabinet and to the board was by no means easy. The final draft was Chamberlains work: The arrangements under the Unemployment Assistance scheme have received prolonged and anxious consideration by the Government, and, as already stated in Parliament, no alteration will be made in the existing standstill arrangements before next spring at the earliest. The Government regard it as important to maintain the existing powers of the Unemployment Assistance Board and the general framework of the Unemployment Assistance Act. They will, however, give effect to any recommendations by the Board for improved arrangements, where these may be shown by experience to be desirable. The
15/6

standstill arrangements are, as they were always intended to be, temporary. They must be replaced by permanent arrangements, which must remedy certain abuses and at the same time avoid hardship to applicants. Any action must be gradual, and must be carried out in full association with local opinion, so as to give effect to reasonable differences in the localities. As regards the Means Test, the Government believe that no responsible person would seriously suggest that unemployment assistance, which is not insurance benefit, ought to be paid without regard to the resources properly available to the applicant. The question is not whether there should be a Means Test, but what that test should be. This is a matter which is now under close examination, but in any scheme great importance will be attached to maintaining the unity of family life and, in addition, provision will be made to meet any cases of proved hardship.
20

The opening sentence merely repeated what Brown had said a few days earlier in reply to a parliamentary question and gave no indication as to when new arrangements would be introduced, but it nevertheless gave rise to a general expectation that new regulations would appear in the early months of 1936. The election brought overwhelming victory for the national government, which by now was Conservative in all but name. Brown remained Minister of Labour, a post he was to retain until 1940 when he was replaced by Ernest Bevin. The board, meanwhile, had had time to revise its earlier proposals, pushing localism to the limit consistent with maintaining the boards ultimate authority. A note by Rushcliffe discussed at the boards meeting on 6 November speculated on the lengths to which local differentiation could be taken. Could there be differences in the amounts allowed for light and fuel, for example, on the ground that the nights are longer and the climate more inclement at, say, Stonehaven than it is at Torquay? Could the different physical needs of applicants in industrial and other areas, or even the long-established practices of local authorities, be taken into account? The board proceeded to re-examine each section of the May memorandum to see where and how local advice could be brought in and what other changes might make the proposals more attractive to the minister. As well as local rent rules, it was agreed that the advisory committees should be asked to advise on the reductions to be made in predominantly rural areas and that they should decide the timetable (within a limit of 12 months rather than the 6 months proposed in the May memorandum) for bringing allowances under the standstill into line with the new regulations. The board reversed its previous decision to exclude single persons from this transitional protection. Having injected this strong dose of controlled localism (Strohmengers phrase), the board decided to withdraw the proposal to raise the scale rate for a couple living alone to 26s. They also revised yet again the proposed earnings rule for relatives other than the applicants spouse or parent.
21

15/7

By the last week of November, after a board meeting extending over three days, a draft of the new proposals was ready. In a covering note to Strohmenger, Eady wrote: We are emphasising the importance of the Committee question on the assumption that it is the problem of localism which is really interesting the Minister and others. ... It is on this way of approach that, in drafting this section, I have played up the section for all its worth. ... It is a little bit exalted, but I am not sure that in relation to E.B. it may not be attractive.
22

The expectation of early agreement was reflected in the debate on the Kings Speech on 3 December, when the Prime Minister expressed the hope that the overhaul of unemployment assistance would be undertaken before we have come together for very long after the Christmas Recess. As events were to show, the proposals submitted to Brown on 5 December did provide a basis for agreement, but there were numerous skirmishes still to be fought, in each of which the board was to be forced to retreat a little further. In each case it was the unemployed who were to be the gainers.
23

Negotiations were resumed in the new year. At a meeting with Rushcliffe on 3 January 1936, Brown pressed for a number of further improvements. Could there be a discretionary power to pay a married couple 26s. where that rate was in payment under the standstill? Could smaller families be exempted from reductions for low rent? Could a married son be treated as a boarder? Could people who reapplied after a break, during the transitional period when standstill allowances were still in payment, retain their rights under the standstill?
24

Further meetings followed, during which some of Browns anxieties were allayed. If married sons could not be treated as boarders, much the same result could be achieved by a generous disregard of earnings. For couples, the board agreed that, where 26s. was being paid under the standstill, no reduction should be made for a considerable time. The most troublesome questions were the reductions for low rent and the treatment of new cases. Brown, mainly concerned with the short-term impact of the new regulations, opposed any cuts for low rent for families with up to three children. The board saw the issue as one of principle: to pay the same allowances to applicants with widely differing rents seemed incompatible with their duty to pay allowances based on need. Agreement was eventually reached on the basis that low rent reductions would be made only where the actual rent was more than 3s. below the standard rent; but the last word on this subject was far from having been spoken.
25 26

Assimilation of new cases The treatment of new cases - those applying for allowances after the commencement of the new regulations, when others were still receiving higher amounts under the standstill - was problematic. Successive
15/8

versions of the boards proposals had assumed that the new regulations would be applied rigorously to new applicants. At first it seemed that Browns doubts related only to the definition of a new case. At a meeting of officials on 16 January, however, Phillips suggested that it might be difficult to explain why a person treated as a new case was getting less than other applicants in the same district. Was it possible, he asked, to devise a scheme under which liquidation would proceed at a uniform rate throughout the area so that at any given time everybody would be treated alike no matter when they became applicants - the principle which was referred to in the ensuing debates as assimilation? This suggestion was totally at variance with the boards intentions. Strohmenger reiterated the objections to creating new vested interests: to bring new cases under the standstill would amount to an admission that the new regulations were not generous enough. At most, the definition of a new case might be amended to exclude people reapplying after receiving an allowance during the previous eight weeks.
27

Brown again intervened personally. At a meeting with the board on 7 February 1936, he argued the case for assimilation of new and old cases. Strohmenger replied that the board had been willing to drop the proposal for a time limit for liquidation of the standstill, on the assumption that the number of standstill allowances would gradually diminish by natural wastage. If new cases were to be treated in the same way as old, not only would a time limit be necessary, but cuts would have to be imposed on whole classes of cases on the same day, which could only lead to trouble. But Brown was not convinced and Rushcliffe had to agree that the board would reconsider both this problem and that of low rents - a tactical victory for Brown, since Rushcliffe had insisted at a meeting with Brown earlier that week that the board would not reconsider the rent rule unless the ministry put forward an alternative and that, in any event, new cases must not be brought within the standstill.
28 29

The resentment of the boards officials was expressed forcefully by Rushcliffes private secretary in a letter to Tom Jones: The Minister, or, to be more precise, the Ministry, has asked the Board to think again. I hope the Board will think again, although not as the Ministry may perhaps expect. Frankly I was disgusted by yesterdays meeting and I was not a little astonished by the illmannered levity of some of the Ministry officials. It seems to me that all this talk about not being able to convince the Cabinet and the House of Commons is so much eye-wash. If it comes to a deadlock the Minister will be forced to lay before Parliament a statement of his reasons for, and a copy of the report of the Board on, the variations and amendments made by him, and I fancy that the Boards criticisms are likely to be more damaging to the Ministers amendments than he appears to anticipate.

15/9

... This Board, whether the Ministry like it or not, has come to stay, and so long as the members of the Board, individually and collectively, stand by their guns, I believe we shall win through.
30

But while such fighting talk might have appealed to some members of the board, confrontation was not the name of the game in which Rushcliffe, Strohmenger and Eady were engaged. About this time Violet Markham commented on the relationship between Eady and the ministry: I find all the non M. of L. officials at Thames House regard the said M. of L. as mud: a bloody Soviet it was called recently by a Treasury official and our men heartily endorse that view. But why Eady collapses as he does in front of Phillips no one understands though his obvious inferiority complex vis vis his old Ministry is a great disadvantage for the Board.
31

It was also about this time, ten days after King George Vs death, that she complained that Rushcliffe was at his feeblest and worst and that Eady seemed to be nervous that he would be running round offering all manner of further concessions to ease the new Kings path before they are asked for.
32

With grave misgivings, following the meeting with Brown on 7 February, the board offered a new concession to meet Browns concern about the married couple rate. In addition to the proposal noted above to waive the first 3s. reduction for a low rent, it was now proposed that the scale rate for a couple without dependants and with no other resources would be raised from 24s. to the unemployment benefit rate of 26s. - a device which was to be known as the fall-back.
33

Tom Jones, on hearing of the latest tactical retreat agreed in his absence, wrote a strong letter of protest to Rushcliffe: It has seemed to me, rightly or wrongly, that we were surrendering the duty laid upon us of dealing with need and of doing so in such a way as to remove or reduce inequalities and therefore injustice in the treatment of applicants.
34

- which provoked a jocular reply from Eady, reminding Jones of a fictitious extract from a leader in the Daily Chronicle: Whether it be right or wrong to permit the vivisection of pauper children, there will be general agreement that if it is to be done it should be done under the supervision of the Home Office.
35

While the board may have felt that its latest concessions ought finally to settle the issue, Brown did not. The question of assimilation remained unresolved. At a further meeting on 24 February 1936 with Rushcliffe, Strohmenger and Eady, at which agreement was reached on most of the outstanding points, he recalled the governments election pledge that the new arrangements would avoid hardship and that action would be
15/10

gradual and carried out in full association with local opinion. Under the boards proposals, new cases would not get the benefit of this pledge. Far from being satisfied by the fall-back proposal, he had never suggested that couples should get 26s. in areas where that rate was not already in payment under the standstill. Strohmenger reminded him that the difficulties caused by the original regulations were due to the number of cuts. Assimilation would eventually mean more cuts, to bring new cases in line with the regulations. But Brown was not convinced and it was decided that the disagreement should be reported to the cabinet committee. As we shall see, the question of assimilation was eventually resolved in Browns favour. But even that would not be enough to secure cabinet approval of the regulations.
36

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.

15/11