LETTERS TO THE EDITOR

" ALL-IN " NATIONAL INSURANCE

[To the Editor of the SPECTATOR.] Sin,—In a recent issue of the. Spectator Mr. Harold D. Jackson, stated the probable additional cost of the Broad Scheme in, the case of a Glasgow engineering concern. The following, figures (columns A and B) show the effect which that scheme. -would have on two other concerns. The amounts relating to Mr. Jackson's firm are given in column C :

Averace of '

A; B. C. A, B and Ci

(2) Employers' costs for one year : Under Broad Scheme (at 2s. 6d. per week per employee) .. /4,596 Deduct present costs :- National Health and Unemployment In- surance contribu- tions, Proportion of Poor Rates, Pen- sions, &c., to work- people, and Work- men's Compensation Insurance, all of which would cease under the Broad Scheme .. £3,015 Difference, being increase in costs under Broad Scheme .. £1,581

The firm dealt with in column B occupies extensive premises

sixteen years of age 707

(1) No. of employees over

(3) Employers' Costs per week per employee : s. d.

(a) Present costs .. 1 71

(b) Under Broad Scheme. . .. 2 6 748 580 .. 678 14,862 £3,770 .. £4,409 £3,620 £2,345 .. £2,993 £1,242 £1,425 .. 11,416 s. d. s. d. s. d.

1 101 1 6 .. 1 81 '

2 6 2 6 .. 2 6 in the centre of a city, and the large sum of Poor Rate paid in respect of these premises mainly accounts for the differences which will be observed on comparing the amounts for the Individual firms in item 3 (a).

If these figures are anything of a guide, it must be admitted that the increased cost of the Broad Scheme would be a fairly severe charge on employers. In the three concerns dealt with, the increased costs for a full year average 11,416, which is nearly 50 per cent. on present costs, and it is reasonable to think that an enquiry over a still wider field would not materially disturb these conclusions. In the main the benefits which Mr. Broad proposes for the worker mid his dependents are fair and reasonable. It is essential, however, that their cost should be apportioned equitably ;between the employers, the workers and the State, and the former are not likely to consider that justice has been done if they are called upon to pay 2s. 6d. per week per employee. Perhaps Mr. Broad decided to use this figure under some misapprehension of the facts regarding present costs to employers, for on page 12 of his booklet he states " it is estimated that the rough average paid now by employers is 3s. per week per worker " for Health and Unemployment Insurance, Employers' Liability, Workmen's Compensation, Poor Law taxation and other costs. From the figures given above (item 3 (a)) the average cost in the three concerns quoted is approximately ls. 8d. per week per employee, and as the difference between this amount and that of Mr. Broad is so very marked, some explanation of the make-up of his figure would be appreciated. An important and far-reaching change such as this scheme proposes must only lbe made after careful consideration of the actual facts, and at will not do to assess the employers' contribution on figures rwhich are no more than a " rough average."

Under the scheme it would appear as if workers of sixteen years and upwards who become unemployed will receive Unemployment Benefit of 30s. per week for males and 20s. per week for females. Many youths and girls therefore twill be much better off financially when out of employ- ment than when they are in work, and a very undesirable state of affairs will result. It is true that the scheme requires workers of all ages to pay the flat rates of ls. per week for women and ls. 6d. per week for men, and from this perhaps it may be argued that the benefits should not fluctuate according to age. It certainly would be better, however, that both the contributions of the workers and the benefits they derive should gradually increase according to age until the worker reaches twenty-one years, on which event the maximum contributions and benefits should become payable. Similar criticism can be levelled against the sick pay benefits, for here again the scheme proposes to give to the youngest worker the same benefits as it gives to the oldest. Mr. Broad's ?observations on these points would be greatly welcomed. Another matter about which information is required ;concerns the large number of private traders, such as small ;shopkeepers, commission agents, and others, who may be said to be " one-man businesses." Are these persons in the scheme ; and seeing that they are their own employers, do they pay both the worker's contribution (1s. per week for women and Is. 6d. per week for men) and the employer's ;contribution (2s. 6d. per week) ? If they do not pay the latter, who makes good the loss ?

Section 34 of the scheme, which deals with its administra- tion, gives no indication that the services of employers will be utilized to any extent in this connexion. This is to be ;regretted, for there are many duties which could be more ;efficiently carried out by employers than by the State, and ;certainly at a saving in cost. It is a side of the question 'which should be fully explored before any scheme is finally approved. As far as possible the aim should be to eliminate the bureaucracy, and by so doing reduce the cost of administra- tion to a minimum.

Section 18 of the scheme states that " all workers over :sixty-three will get pensions as follows : Women 20s. per 'week, men 30s. per week." Actually this means that the scheme provides only 30s. per week for the aged worker and his wife. Is this really enough to enable two people to live in proper comfort in their declining years In my opinion it is not, and certainly an Old Age Pension of this amount will not encourage many workers to discontinue their labours on reaching the age of sixty-three,.and by this means make way for younger men, which is one of the great advantages claimed by Mr. Broad for his scheme. It is, of course, possible to increase the pension, for by Section 35 " women who marry can arrange for continuing to pay the contributions in order to obtain the women's pension at sixty-three," and " women not engaged in any occupation for gain and wishing to join would do so on the same terms as women workers." It is doubtful whether much success will attend optional arrange- ments of this kind, and a point in connexion with them is, who will pay the employer's contribution? Section 35 also states : " Encouragement should be given to all the better paid workers to insure in Voluntary Societies for increased amounts to their pensions at sixty-three. The State can arrange terms with Voluntary Societies. This should mean big business and bring big relief in old age. It would also encourage true thrift." All this is excellent in its way, and no one wants to discourage true thrift ; but the cardinal principle must be to include in the scheme a really adequate -- even generous—Old Age Pension. Any scheme which omits to do this will be a failure, and attempts to overcome the difficulty by leaving the workers to supplement voluntarily their State pensions in order to make the latter adequate are very unlikely to succeed. Large numbers of workers would not do it. .Non omnia possums onines.—I am, Sir, &c.,