uently, would gradually relapse and fall
back into the purely distress machinery and non-economic machinery
from which we are labouring to extricate and separate it. It is for
that reason, quite apart from the merits of the scheme of unemployment
insurance, that the Government are very anxious to associate with
their system of Labour Exchanges a system of unemployed insurance. If
Labour Exchanges depend for their effective initiation and
establishment upon unemployment insurance being associated with them,
it is equally true to say that no scheme of unemployment insurance can
be worked except in conjunction with some apparatus for finding work
and testing willingness to work, like Labour Exchanges. The two
systems are complementary; they are man and wife; they mutually
support and sustain each other.

So I come to Unemployment Insurance. It is not practicable at the
present time to establish a universal system of unemployment
insurance. We, therefore, have to choose at the very outset of this
subject between insuring some workmen in all trades or all workmen in
some. In the first case we should have a voluntary, and in the second
a compulsory system. The risk of unemployment varies so much between
one man and another owing to relative skill, character, demeanour, and
other qualities, that any system of State-aided voluntary insurance is
utilised mainly by those most liable to be unemployed, and,
consequently, a preponderance of bad risks is established against the
Insurance Office fatal to its financial stability. On the other hand,
a compulsory system of insurance, which did not add to the
contribution of the worker a substantial contribution from outside,
would almost certainly break down, because of the refusal of the
higher class of worker to assume, unsupported, a share of the burden
of the weaker members of the community.

We have decided to adopt the second alternative, and our insurance
system will, in consequence, be based upon four main principles. It
will involve contributions from workmen and employers; it will receive
a substantial subvention from the State; it will be organised by
trades; it will be compulsory upon all--employers and employed,
skilled and unskilled, unionists and non-unionists alike--within
those trades. The hon. Member for Leicester[15] with great force
showed that to confine a scheme of unemployment insurance merely to
trade unionists would be trifling with the subject. It would only b