MPs passed a bill to set up an unemployment insurance fund this week.

Finance Minister Eugene Cox said the bill fulfilled a call he had made more than ten years previously when the PLP was in Opposition.

Government is to put in $1 million seed money and then consult the community about how best to operate the scheme.

He said: "This is an historic bill to make provisions for an unemployment insurance fund for the long term benefit of Bermuda."

He said he believed the current recession had seen higher levels of unemployment. He said unemployment had reached six percent in the early 1990s but was at two percent in 1980.

The scheme will be set up, in accordance with International Labour Organisation principles, over the next 12 months after consultation with employers and other stakeholders.

Mr. Cox said the scheme would not become a disincentive to work and he said abuse of the scheme would be stamped out.

Opposition Leader Grant Gibbons said the Government was repeating an old pattern of committing to something and then doing its research afterwards.

And he chided the Government for not having concrete statistics about the numbers of unemployed - something Mr. Cox had complained about when the PLP was in Opposition.

He said: "Had the Government done some legwork by putting in place some data we would be in a much better position to judge."

Dr. Gibbons said there were a number of significant tax burdens including pension, land tax, and pay roll tax.

He said: "It behoves this Government to assess the impact."

The Opposition Leader said if the seed money was taken out of the consolidated fund and put into a separate fund it could not be properly audited.

He said: "I think this is just window dressing. I don't think it's terribly substantial."

Dr. Gibbons said the Opposition was reserving judgement on the bill until further details were known.

Mr. Cox said figures from the 2000 Census would provide information on unemployment.

Government backbencher Delaey Robinson said: "Whenever we bring in progressive legislation we always get howling from the Opposition.

"This is typical. When we have a recession Front Street might lose a bit of profit but our people lose jobs."

Bermuda Industrial Union leader and Government MP Derrick Burgess said existing help such as social assistance did not kick in until people were almost penniless and was aimed at the unemployable but the new fund would bring comfort for the unemployed.

Opposition Housing spokesman Michael Dunkley said the Government was putting the cart before the horse and should be looking at job creation rather than paying for people who were out of work.