on the footing either of compulsory or voluntary insurance, accompanied and fortified by State aid. The Royal Commission on the Aged Poor in 1895 reported adversely to all the proposals which had up to that time been made. There followed a series of inquiries into schemes for granting immediate pensions to the aged and deserving poor. There was Lord Rothschild's Committee, there was a Select Committee of this House presided over by the right hon. Gentleman the Member for Wimbledon in 1899, and there was Sir Edward Hamilton's Departmental Committee of 1900, and again a Select Committee of this House in 1903. Much valuable information was accumulated and classified in the course of these inquiries, with the result, I think, that all the material facts may now be said to have been ascertained. But up to this moment nothing has been done, nothing at all.

In the meantime other countries have been making experiments. The German system, which is one of compulsory State-aided assurance, has been in existence since 1889. . Under it pensions averaging a little over £16 13s. a year are paid to insured persons of the age of seventy and upwards. The State contribution amounts to less than 40 per cent of the whole, and it would seem that in 1907 not more than 126,000 persons out of a population of over 52 millions were in receipt of old age pensions.

More instruction, I think, for our purposes is to be derived from the legislation initiated in Denmark in 1891, in New Zealand in 1898, and subsequently in New South Wales and Victoria. These systems, though differing widely in their details, have several important features in common. In the first place, they do not depend for their application upon either voluntary or compulsory contribution on the part of the pensioner. In the next place, they are limited in all cases to persons whose income or property is below a prescribed figure; and, thirdly, in all cases they impose some test or other, varying in stringency and in complexity, of character and desert in regard to such matters, for instance, as past criminality or pauperism. Although both in Denmark and in New Zealand

the expenditure upon the pensions has, in the course of time, exhibited a tendency to increase beyond the original estimate, yet the cost of administration has turned out to be relatively small, amounting in New Zealand in 1907 to not more than 1.67 per cent; and I think I may say that in none of these communities is there any dissatisfaction either with the principles or with the working of the law, and certainly no disposition to go back to the state of things which prevailed before old age pensions were set up. His Majesty's present Government came into power and went through the last general election entirely unpledged in regard to this matter, not that they were insensible to its importance or to its urgency, but they felt it right to enter into no binding engagement until they had had full time to survey the problem in all its aspects, and what is still more important to lay a solid financial foundation for any future structure it might be possible to raise. It was accordingly not until we had seen our way to make some substantial provision for the reduction of the national liabilities that I found myself able to announce in the Budget of last year that this year it was our intention to make a beginning — and more than a beginning I never promised — in the creation of a sound and workable scheme. . .

Extract 26

SECOND READING OF OLD AGE PENSIONS BILL

(Mr. David Lloyd George, Chancellor of the Exchequer, Commons, June 15, 1908)

MR. LLOYD GEORGE1: The scheme is necessarily an incomplete one. We have never professed that it was complete and dealt with the whole problem; we wished it to be treated as an incomplete one, and to be considered as such. It is purely the first step, and I may even say that it is necessarily an experiment.

1 Parliamentary Debates, Fourth Series, vol. 190, col. 564 sqq.

The second observation I should like to make is this, that those who have criticised most severely the disqualifications which we have introduced into the Bill are those who are opposed to the principle of the payment of old age pensions at the expense of the State at all. Therefore I should invite hon. Members to consider very cautiously those criticisms when they recollect the quarter from which in the main they have come.

The first general criticism is that this is a non-contributory scheme. I am not sure that that is not the effect of the Amendments of the noble Lord the Member for Marylebone [Lord Robert Cecil] and my hon. Friend the Member for Preston [Mr. Harold Cox] - these two anarchist leaders.1 I demur altogether to the division of the schemes into contributory and non-contributory. So long as you have taxes imposed upon commodities which are consumed practically by every family in the country there is no such thing as a non-contributory scheme. You tax tea and coffee, sugar, beer, and tobacco, and you get a contribution from practically every family in the land one way or another. So, therefore, when a scheme is financed out of public funds it is as much a contributory scheme as a scheme which is financed directly by means of contributions arranged on the German or any other basis. A workman who has contributed health and strength, vigour and skill, to the creation of the wealth by which taxation is borne has made his contribution already to the fund which is to give him a pension when he is no longer fit to create that wealth. Therefore I object altogether to the general division of these schemes into contributory and non-contributory schemes.

There is, however, a class of scheme which is known as a contributory one. There is the German scheme, in which the workmen pay into a fund. It is rather a remarkable fact that most social reformers who have taken up this question have at first favoured contributory schemes, but a closer examination has almost invariably led them to abandon them on the ground that they are unequal

1 Cf. infra, Extracts 27 and 28.

in their treatment of the working class, cumbersome, and very expensive, and in a country like ours hopelessly impracticable. . Let me give you now two or three considerations why, in my judgment, a contributory scheme is impossible in this country. In the first place, it would practically exclude women from its benefits. Out of the millions of members of friendly societies there is but a small proportion, comparatively, of women. Another consideration is that the vast majority are not earning anything and cannot pay their contributions. The second reason is that the majority of the workingmen are unable to deflect from their weekly earnings a sufficient sum of money to make adequate provision for old age in addition to that which they are now making for sickness, infirmity, and unemployment. I do not know what the average weekly wage in this country is; we have not had a wage census since 1886. I hope the Board of Trade will soon be able to publish the result of the wages census initiated some months ago, but I do not suppose we shall have the Returns in time for our debates on this Bill. The average weekly wage in 1886 was 24s. 9d., and 57 per cent of the working classes in this country were earning 25s. or less. It is quite clear, therefore, that out of such wages they cannot make provision for sickness, for all the accidents and expenses of life, and also set aside a sufficient sum to provide a competence for old age as well. Take the agricultural labourer with his 155. or 16s. a week. How can he set aside 4d. a week for a period of forty years, in addition to what he has to set aside already for the purpose of sickness or infirmity? . . .

The provision which is made for the sick and unemployed is grossly inadequate in this country, and yet the working classes have done their best during fifty years to make provision without the aid of the State. But it is insufficient. The old man has to bear his own burden, while in the case of a young man who is broken down and who has a wife and family to maintain, the suffering is increased and multiplied to that extent. These problems of the sick, of the infirm, of the men who cannot find means of

earning a livelihood, though they seek it as if they were seeking for alms, who are out of work through no fault of their own, and who cannot even guess the reason why, are problems with which it is the business of the State to deal; they are problems which the State has neglected too long. In asking the House to give a second reading to this Bill, we ask them to sanction not merely its principle, but also its finance, having regard to the fact that we are anxious to utilise the resources of the State to make provision for undeserved poverty and destitution in all its branches.

Extract 27

OPPOSITION TO OLD AGE PENSIONS BILL

(Mr. Harold Cox, Commons, June 15, 1908)

MR. Cox1 moved an Amendment declaring:

While it is desirable that the State should organise aid for the unfortunate by establishing and assisting a general system of insurance against the principal risks of life, it is unjust to spend the taxpayers' money in giving subsidies to persons selected by arbitrary standards of age, income, and character.

He said he was not opposed on general grounds to the organisation of a system of old age pensions, but he was strongly opposed to the particular scheme which the Government had put forward, because he held that the scheme was unjust in principle, and as a consequence was necessarily unjust in almost every one of its details. That arose from the fact that if they started with a false principle, they were bound to set up arbitrary distinctions which must act harshly upon particular individuals and give a favour to one man while they refused the same favour to another man who had an equal title to it. Why should they start by saying that people over the age of seventy were entitled to a pension any

1 Parliamentary Debates, Fourth Series, vol. 190, col. 596 sqq.