THE GOVERNMENT AND THE FUTURE. (To THE EDITOR or EBB
•• Brzerma.") Sra,—I have no wish for controversy, and note with satisfac- tion that for you, as for me, Free-trade stands before all else. As to your main comment on my letter (Spectator, Tune 15th), I would submit that neither from Mr. Asquith's point of view, nor from the point of view of many Liberals who, like myself, advocate a universal scheme, can old-age pensions be "a short out to Protection." We, who believe that a small national endowment of old age would stimulate thrift, while the • ' destitution test" of the Poor Law destroys both thrift and self-respect, are ready to meet the eighteen to twenty.two millions this would in practice cost (1) by more decisive reduction of Army and Navy expenditure, (2) by raising license-duties to an American level, and (3) by increased taxation of accumulated wealth. Mr. Asquith in his Budget made it clear that the scheme he contemplates will be more restricted and will cost less even than the figures of the Rothe. child and Hamilton Committees. From nei the retandpoint would it be advisable to pay old-age pensions by increasing indirect taxation. The economic justification is that old-age pensions rest on the same principle as equalisation of rates. They are of the nature of a deferred annuity, to make good, under our existing industrial system, the average shortage (a) in the share the worker gets from the wealth his labour is creating, and (b) in the margin over bare necessities he ought to have to enable isbn to provide out of wages for his voperammustion allowance. If the incidence of indirect taxation is tested on the Free-trade assumption that the consumer of dutiable articles, broadly speaking, pays the duty, and if the incidence of direct taxation is approximately determined by a scientific apportionment, it is matter of demonstration that the worker is paying from 50 per cent. to 100 per cent. more in taxes in proportion to his income than the man of 25,000 to £10,000 R year, and the pressure of indirect taxation is heaviest on thepoorest of all. To pay pensions by Tariff Reform would be therefore doubly unjust. By starting pensions at all you logically admit that the means of the poor ar•e insufficient to provide superannuation, and then you would be exacting a forced contribution from the means which you admit scarcely cover bare necessities.
As to mismanagement of legislation alienating sympathy, that is the common lot of all Governments. If this has happened in regard to the Bills of this Ministry, is it not possible that this is due primarily to too great willingness to do just what you ask for,—to sacrifice cherished Liberal principles in order to conciliate moderate Free-traders? This was plainly the case with the Education Bill: On the whole, I submit that this great composite majority, mainly representing very advanced and Radical views, has not insisted unreasonably on full execution of its undoubted mandate, but has acquiesced in much trimming down of hoped-for reforms, with excellent good sense, in order to meet exactly the situation you point to. No Ministry in programme or tactics is free from error. This Ministry in its management of the business affairs of the nation, in the adjustment of interests where conflicting, and in the moderation of its proposals on all topics, though it has in more than one matter cooled the ardour of its warmest supporters, does not deserve such short shrift at any rate from those who are asking for just this spirit of moderation. And it is the only visible and adequate bulwark against the supreme danger. —I am, Sir, &C., FRANCIS A. CHINNING. House of Commons Library.
[The £18,000,000 to 222,000,000 a year which Sir Francis Charming hopes old-age pensions would cost would soon- become the 229,000,000 which, as we show in answer to Mr. T. Mason's letter, Mr. Burns admitted will be the cost of pensions for everybody of sixty-five and over. Even if a beginning were made with a limited scheme, the limitations would soon be swept away. The plans suggested above for obtaining the money by reductions in our naval and military expenditure are illusory. The coat of the fighting Services may conceivably be kept where it is, but it is far more likely to rise. But even if a million or two were to be saved here, it would be more than' wanted to meet new expenditure on such things as small holdings. But for the rejection by the House of Lords told the Irish Convention of the Government's chief measures, we should already be committed to an extra two millions a year. Possibly the Government may raise a considerable sum if they adopt a high-license system; but there is little chance of this unless they are prepared to meet the opposition of the Temperance party. The increased taxa- tion of accumulated wealth would be both unjust and im- prudent, and would send thousands of men who are now Fr•ee- traders into the opposite camp. In practice, the money will have to be raised by a tariff. Very likely the Government will refuse to accept the inevitable, and fall over the attempt to get another 2,30,000,000 a year by direct taxation. That is, they will commit the country to old-age pensions, and then go act and leave it to their opponents, the Tariff Reformers, to find the money. They will, of course, be delighted to find so good an excuse for a Protective tariff ready made, for one of their chief difficulties up till now has been to find an excuse for raising more taxes. The policy sounds as if it had been devised in a lunatic asylum or in a Protectionist committee- room, and yet it is set forth in the name of Free-trade ! The fiscal argument against old-age pensions is overwhelming ; but, apart from that, we condemn them as a vast scheme for pauperising the nation by wholesale and indiscriminate out- door relief. It is merely that under a sentimental alias. The Ministry, no doubt, has good intentions ; but instead of being a bulwark against a supreme danger, it is fast bringing tbat danger upon us in an overwhelming torrent..—En. Spectator.]
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