TOPICS OF THE DAY.
OLD-A.GE PENSIONS ONCE MORE.
rpHE Government have been given an opportunity .1_ for extricating themselves from the perilous position taken up by them upon the question of old-age pensions, and if they are wise they will take advantage (If it. The impossible demands made at the Trade. Union Congress in the presidential address, and endorsed apparently without dissent by the delegates, place the whole subject upon a new footing. Mr. Gill, M.P., declared on behalf of the Trade-Unionists that they must have a scheme of old-age pensions which shall not only be universal, non-discriminatory, and non-contributory, but also which must begin at sixty instead of sixty-five. The President further demanded that the castle in Spain shall be built at once, and all at once. The proposal as sketched by Mr. Gill means an expenditure of not less than thirty- five millions a year, even if his very optimistic deductions in the matter of savings on Poor Law administration are accepted as practical. Mr. Gill is not in the least frightened by this sum. As the Daily Chronicle in an excellent leading article 'puts it, his attitude is one of "blow the expense." It is not his business, says Mr. Gill, but that of the Chancellor of the Exchequer, to find the money,—a point of view which reminds one of the Eastern Sultan whose notion of a Finance Minister was that of a man whose business it is to produce whatever money is required and when it is required. If ho could not find the money, the proper remedy was the bow-string. What was the use of a man who could not do his own proper work ? He was merely cuinbering the earth.
When we say that the attitude of the Trade-Union Congress gives the Government an opportunity to with- draw froui their present position as regards old-age pensions, we by no meanssuggest. that they should make that attitude an excuse for breaking inconvenient pledges rashly given. We desire no cynical action of that kind. Our contention is that the rejection of the proposals set forth by the Prime Minister and Mr. Asquith —assuming that the Congress supports its President— gives the Government an undoubted right to with- draw their offer altogether. It is quite clear from what took place at the Congress that the Labour Party will not be content with anything less than a scheme which will involve an immediate expenditure of from thirty to thirty-five millions a year. Therefore the only wise and safe plan for the Government is not to touch the question at all. In a matter like this, half or quarter measures will be perfectly useless. They will merely involve the Government in a, crowd of difficulties. For example, they will prevent the Chancellor of the Exchequer giving relief from taxation which he. might otherwise give. They will also raise an enormous amount of opposition from those who, like ourselves, are convinced- that not only are old-age pensions most dangerous to the cause of Free- trade, in that they involve a very great burden upon the Exchequer, but also because they will weaken the fibre of the nation and demoralise men by teaching them to look to the bounty of the State rather than to their own efforts. In fact, they are an engine of pauperisation. There are, no doubt, some questions where the Government can say : "We are not very clear about the advantages of the scheme, and we realise the financial and other difficulties. But the demand for it is so strong that we feel bound to satisfy that demand up to a certain point,—that is, up to the point where the demand is reasonable and practicable. By the half-measure we propose we shall be able to avoid the danger of excessive expenditure, and yet show a conciliatory and sympathetic spirit to the demands of the Labour and Socialist Parties." We are no doctrinaires in politics, and quite realise that it may sometimes be necessary to adopt this attitude on certain questions where public opinion is setting very strongly. For example, we thought many of the provisions of the English Small Holdings Bill doubtful, but, on the whole, we quite agree that the Government did the right. thing in attempting to satisfy by a reasonable com- promise the demand of the working classes that the land question should be dealt with by the State giving facilities for the acquisition of small holdings. The question of old-age pensions cannot, however, be safely • approached in this way.
• The notion that the demand for the expenditure of thirty to thirty-five millions a year on a scheme of universal non-contributory and non-discriminatory old-age pensions at sixty can be bought off by a plan which will be so discriminatory and generally so narrow in its scope as to cost no more than some six or seven millions a year is a pure delusion. By such a proposal the Government will simply irritate the Labour Party, and lay themselves open to the charge of betraying the democracy and offering them a stone instead of bread. No more indignation and disappointment will be caused by a refusal to deal with the subject at all (especially if such refusal is coupled with a reduction of taxation, as it might well be) than by an absolute refusal. But perhaps it will be said that the Government may soothe the annoyance and disappointment caused by their narrow scheme by saying, and letting it be said, that it is only a beginning, and that their plan can be extended later into a full-blown pension scheme in accordance with the wishes of the Trade-Unionists. To argue thus is simply to betray the cause of Free-trade. If the plan is introduced as only a beginning, which later will blossom into the full system with the full expenditure of thirty-five millions a year, then the Government must expect to be denounced, and rightly denounced, for intro- ducing Protection on the instalment principle. A scheme defended on the grounds just stated can only mean the doom of Free-trade and the adoption of a general tariff. Every practical financier knows that it is absolutely impossible to obtain another thirty-five millions a year by direct taxation or by retrenchment. The whole, or nearly the whole, of the money will have to be got by Custom- duties. Further, these Custom-duties must be of a Pro- tective nature, because it would be impossible for a Liberal Government to propose taxation upon food or upon raw material. Therefore the necessary taxation will have to be levied on manufactured and partly manufactured goods. But as these goods only come into Britain to the value of a hundred millions a year, and as the taxation of them is sure greatly to decrease their volume, the Old-Age Pensions Tariff will have to be at least 40 per cent. ad valorem on all manufactured and partly manufactured articles. Where, with such a tariff, is Free-trade ? It is no advantage to a man_ to be slain by one who calls himself a friend. The dagger cuts just as deep when the words are mild and gentle. The destruction is the essential fact.
It is pleasant to turn from the credulity and folly with which the subject of old-age pensions was treated at the Trade-Union Congress to the able letter on the whole subject addressed to Tuesday's Times by seven men who have studied the question in all its bearings,—Lord Avebury, Mr. W. A. Bailward, Sir Edward Brabrook, Sir Arthur Clay, Sir A. Lyall, Mr. Tom. Mackay, and. Sir William Chance. These are all persons of political insight and ability, and several of them have a deep knowledge of all matters affecting thrift and the administration of the Poor Law. Their letter states that there are three ways, and three ways only, in which the demand for old-age pensions can be met. One is the universal scheme, which, as they say, would be intolerably costly ; the next is the scheme for granting pensions only to persons who are necessitous or deserving ; and the third is a scheme for encouraging and assisting by Government action persons who are willing to make some sacrifice to entitle themselves to pensions. This last is the system advocated by the signatories of the letter, though they assent to Govern- ment assistance as a matter of compromise rather than as a thing good in itself. Already there is a law on the statute-book (an Act of 1819) by which the Government can receive from Friendly Societies the money derived from the contributions of members, and pay on such contribu- • tions a fixed rate of interest during the whole lives of the members. It is proposed that this principle should. be applied to contributions made for the special purpose of ensuring old-age pensions. In effect, the signatories of the letter suggest that the Government should. pay a rate of interest 1 per cent. higher than that at which they borrow money. The result of this contribution, they think, would not be likely to be a burden of more than a million a year, but it would enable the Government to 'give very much better terms to those purchasing pensions. For example, a payment of £1 a year, which is only two-thirds of a penny per day, or a little more than fourpence per week, made by a man of twenty up till the age of v would assure him a. pension of 7s. 4d. a week at the age of sixty-five, if only 21 per cent. interest were allowed. An additional 1 per cent. interest would add 3s. a week to that pension and make it 10s. 4d. In order that the bounty of the Government should not be abused by persons of means, it is suggested that a shilling a week should be the largest contribution taken from any individual. The difficulty of irregular payments is met as follows. There would be no forfeitures, but every sum of money that had been actually deposited with the Government would be allowed for when the pension age was reached,- i.e., any falling off in the periodical contributions would be met by an equivalent diminution of the pension or an equivalent postponement of it. It will be noted that the scheme does not, as it stands, provide for persons incapable of making contributions, or for those who are now too old to make provision for themselves. For such persons, and as a temporary measure, it is suggested that the Government should give a special contribution.
Though we recognise the great ability with which the scheme has been worked out, and though, of course, we infinitely prefer it to the proposals made either by the Trade-Union Congress, or those shadowed forth by Mr. Asquith and the Prime Minister, we ourselves are more inclined to a proposal on the lines of the late Canon Blackley's well-known scheme, or perhaps we should say that We desire to see the scheme of Lord Avebury and his colleagues supplemented in this direction. It seems to us that the period of wage-earning before marriage is the time when a man of the working class should be pro- viding for his old age. It is calculated that a sum of not much more than £9 paid at the age of twenty-one would entitle a man (if he lived so long) to an old-agp pension of 5s. a. week at sixty-five. Under normal conditions, men and women begin to earn wages at sixteen. We do not see why in the six years between sixteen and twenty-two the great majority of men should not be able to contribute the 30s. a year, or say a penny a day, which would entitle them to an old-age pension at sixty-five. Though we do not, as a rule, like compulsion, we think it would be quite reasonable to apply it in the present case, and to enact that every person (male or female) earning wages should be compelled to make a payment of a penny a day from sixteen up to twenty-two. As has been suggested, the money might be collected from the employer by making him pay a penny a day of the employed person's wages in special stamps, which stamps could serve no other purpose than to be attached to the old-age pension policy which each person between the ages of sixteen and twenty-two would be compelled to take out at the Post Office. In order to facilitate matters, any person might be allowed to make, or have made for him, a single payment, either at the age of sixteen or in any previous year, including the moment of registration of birth. Such payments would of course be very much smaller than £9, and no doubt many parents would clear their children from all further liability by paying the requisite sum at birth.
One more point has to be considered. What would happen in the case of vagrant or unemployed young persons, or persons employed so casually that they would never receive enough stamps in the year to complete their premiums, or, again, who would defy the law requiring them to take out the Government old-age pension policy? We admit that to say that this would be a matter, like all other law-breaking, for the police is not to give a very satisfactory answer. We suggest that the Guardians of the Poor should have imposed upon them the duty of prosecuting delinquents, and that in cases where it could be proved that it was literally impossible for the young person to contribute, the contribution should be made out of the rates, but should be a debt enforceable should the young person in question become a wage-earner later in life. No doubt, whatever was done, a certain number of persons would break through the net, but that, in our opinion, is not in itself an argument for rejecting the pro- posal for compulsory universal insurance of the kind we have described.