OLD AGE PENSIONS BILL.

HC Deb 01 July 1924 vol 175 cc1197-255

Order for Second Beading read.

The FINANCIAL SECRETARY to the TREASURY (Mr. William Graham)

I beg to move, "That the Bill be now read a Second time."

As hon. Members know, the Bill is merely a repetition or the Financial Resolution which has already been discussed. It is confined to the narrow financial proposition which gives an additional benefit of £39 a year in the case of a single individual and £78 a year in the case of a married couple over and above the scale of allowance applicable under the former Old Age Pension system That, in a single sentence, is the beginning and the end of the Bill, and I respectfully ask the House to give it a Second Reading.

Sir KINGSLEY WOOD

I have informed the Financial Secretary to the Treasury that I want to put a few points to him. I have had a communication, which I have shown to the hon. Gentleman, from an important body which for a long time has been dealing with the question of old age pensions. I think that most hon. Members are familiar with that body. It is called the National Conference on Old Age Pensions, and its chairman was the well-known medical man, Sir Thomas Oliver, and its secretary, a very enthusiastic secretary, was Mr. Dennison, of Newcastle-on-Tyne. I suppose that there has been no more active organisation in connection with old age pensions than this particular committee, which, during the last few years, has unceasingly endeavoured to advocate the case of the old age pensioners. They have written to me to-day and, as I have informed the Financial Secretary to the Treasury, they are rather disappointed with the proposals of this Bill. The communication says: The National Conference will be disappointed, particularly in view of the many promises given by the Labour party and the Government now in power to do the right thing for the aged poor. Many hon. Members, and I daresay the Financial Secretary to the Treasury himself, share the disappointment that the Government have not been able to go much further than they have gone. I would not particularly complain of their action, because one must have regard to the financial possibilities, but for the statements and promises that they themselves have given. I daresay that the Financial Secretary to the Treasury, who is a fair man, will, at any rate, recognise that the complaint which I wish to make is not that the Government have not gone further, but that they have failed to fulfil their promises. If they had not made those promises a good deal of the criticism which can now be directed against them would not have the weight that it has. Many hon. Members at the last General Election had to contend with Labour candidates who gave most definite pledges in this connection. In my constituency the Labour candidate delivered at every door a leaflet containing a copy of the Resolution which was moved three or four times in this House by members of the Labour party. The leaflet ended by saying that the Labour candidate was in favour of it and that I was against it. That leaflet undoubtedly got many votes for my opponent.

It is a matter of grave complaint that the Government are not fulfilling their pledges in this Bill. Apart from that, it may be said that this is a measure of justice to the old age pensioners of the country. I hope that when the Financial Secretary replies he will deal with the aspect of the matter to which I have referred, and will say fairly and squarely to the House that there is to be no repetition of that sort of conduct. I notice that an hon. Gentleman opposite still does not understand the ground of my complaint. Even if I had made the promise referred to—which I did not—that is no ground for another person breaking his pledge. I hope the Financial Secretary will have regard to that aspect of the matter. People who make pledges and do not fulfil them must not complain if they are severely criticised.

I am not surprised, therefore, at this particular association, not one of the officers of which has any connection with any political party, when they state they are gravely disappointed with the proposals of the Government. I suppose that is solely because they read all the resolutions that were moved and the pledges which were given by hon. Members opposite. A very large number of the old age pensioners themselves will be very disappointed also. Those who cast their votes for Labour Members on the promises which were made have now a right to say that they have been very cruelly deceived. [HON. MEMBERS: "Oh!"] It is a fair thing to say, and I do not know why hon. Members opposite should object. If a person voted for a Labour Member on a distinct promise and pledge that the means limit is going to be removed, and if the Labour party got into office but did not bring forward such a proposal, then the person who cast that vote has serious grounds for complaint. It is idle for hon. Members opposite to say that they are not in power. They could bring forward their proposals and do their best to fulfil the pledge, and if other Members of the House took the responsibility of rejecting the proposal, then the Government and hon. Members opposite would have done all that they could do as honourable men to fulfil their undertaking. A new doctrine is being put forward by hon. Gentlemen opposite. The Lord Privy Seal on Saturday endeavoured to explain away the large number of pledges which have been broken, and expressed the view that nowadays a pledge was fulfilled if it was carried into effect by instalments. That is a curious doctrine, and I wonder how it would commend itself to the old age pensioner, his family, or his friends who voted for Labour at the last election on the strength of a definite pledge in this connection.

It is not so much the fact that the actual proposals themselves represent failure on the part of the Government to carry out, to the best of their ability, the pledges which they gave and for which they got a very handsome return. When you give these pledges and get votes for them and then fail to fulfil them, the votes cannot be taken back again. If a few hon. Members opposite resigned their seats on this question, it would be different, and no doubt a means of straightening things out will be found in due course. I can quite understand that the people who gave their votes for pledges which have not been fulfilled will take an obvious remedy on the next occasion. That does not help the old people who were promised so many things which are not being given to them by this Bill. The Secretary to the National Conference on Old Age Pensions, Mr. Dennison, in the course of this communication says: I have to-day written to the Chancellor of the Exchequer pointing out to him a question which it was understood would receive special attention in any proposals he might bring forward, namely, that any assistance in the form of shelter, clothes or food granted by children to their aged parents should not be taken into consideration in any assessment by the pensions officer. I have no doubt the Financial Secretary to the Treasury will be able to give a favourable reply to that question this afternoon. He will be able to give it with more authority and no doubt with more satisfaction than I could give it. Another point is raised by the association on which I think there is more difficulty: Further, no attention has been given to the inflation of the income of the old age pensioners. As you are aware, if an old age pensioner invests his money in the Post Office Savings Bank or any other form of investment and receives less than 5 per cent. interest, his income is inflated to 5 per cent. by the pensions officer. It is held, and I think rightly held, that only the actual income received should be assessed. I should be glad if you press that point. That is also a point to which the Financial Secretary might address himself, It appears to be very unfair that an old age pensioner who does not actually receive 5 per cent. interest on his savings should have his income assessed by the pensions officer at the rate of 5 per cent. I believe it is a matter of regulation and it is, therefore, all the easier for the Financial Secretary to give us an undertaking that he will make an alteration in that respect and do a minor measure of justice to those concerned. Another matter, raised, I think, in a question on the Order Paper to-day, is the position of aliens in connection with old age pensions. Does the hon. Gentleman propose to make any alteration which will result in British subjects getting such preference as they can, especially in relation to the question of the number of years during which they require to be domiciled in this country? I hope it will be possible to do something in that direction, and I think very few people would complain if persons born in this country were placed on a proper and just footing in comparison with aliens on this matter. Whilst I understand quite well the difficulties of the Chancellor of the Exchequer, I regret that the Government's present proposals mean a series of interrogatories to old age pensioners concerning means and earnings. I wish to be fair to the Government and it is perfectly true that an advance is made by this Bill, but it should be clearly understood that, even under the Government's proposals, thrift is still penalised. In fact, if a man has shown exceptional qualities of thrift and has saved an amount of money which produces an income above the amount mentioned by the Chancellor of the Exchequer, he is penalised on that account. To my mind, thrift is a, quality which, in this country, wants a good deal of encouraging at the present time. It is regrettable that a man who, by thrift and hard work, has saved a certain amount of money should be penalised under the Bill.

It is also a matter of regret that inquiries in regard to earnings are still to be addressed to the old age pensioner. I was chairman for many years of the London Old Age Pensions Authority, and while I believe the inspectors endeavour to do their work with tact and discretion, yet, with the best will in the world, all sorts of misunderstandings arise. I hope in time it will be possible to avoid inquiries of that sort. Even although the machinery of administration has been perfected during a good many years of experience, in working, there are no less than 8,000 appeals from the pensions officers as to the income or earnings of old age pensioners. All these cases probably mean the old age pensioner having to go before the committee and submit to cross-examination on his means and earnings. I remember how difficult it was to conduct these investigations with kindness and decency towards the pensioner. I understand the reason for the inquiries, but I regret that they still have to be made. I look forward to the day when it may be possible to increase the present rate of pension and lower the age. In my own constituency men can be discharged from a Government factory at the age of 60, and they have to wait until they are 65 before any recompense comes to them from the State. There is a good case for lowering the age limit, if we could afford to do so.

I agree with the remark which the right hon. Baronet the Member for Colchester (Sir L. Worthington-Evans) made recently, that anyone who looks at all the various types of insurance, calling for so many deductions from the workers' wages and at all the organisations at work in connection with social services, must come to the conclusion that if we are to do anything effective we must make a determined effort in this House to get some comprehensive scheme of dealing with all these matters. It would save a large sum of money. Consider the different organisations and the different sets of officials who administer national health insurance, unemployment insurance, old age pensions and all these other schemes, and one is driven to the conclusion that the proposal of this Bill is only to be regarded as a step forward. It is probably a step in the right direction, but I hope it is not leading away from the idea of a comprehensive scheme. I appreciate what has been done in this Bill, and if so many foolish and rash promises had not been made it would have met with a better reception. Hon. Members opposite cannot get away from that point. In conclusion, I hope the day will not be long distant when in this House we may have a comprehensive scheme which will cover all those old people, as well as other people, and I hope it will give much better terms and conditions than are embodied in this Bill.

Sir JOHN SIMON

I feel a little sorry that the hon. Member for West Woolwich (Sir K. Wood) should have taken up so large a part of his speech in discussing pledges given in this quarter and in that, for though these are, no doubt, very proper matters to consider, they do not form, I think, the principal topic with which the Second Reading debate on this Bill should concern itself. The first and most important fact is that this Bill, though, as the Financial Secretary to the Treasury said, it deals with a proposition within a very narrow limit, undoubtedly is going to improve old age pensions, is going to increase the old age pension of a number of people who at present do not get the full amount, and is going to bring a large number of people within the scope of the scheme who are not within it to-day. To that extent, it seems to me, everybody ought to rejoice heartily that the Government are able to go to this point, though, for my part, I confess to a great feeling of disappointment that it has not been possible for the Chancellor of the Exchequer at this present time to go further. The Financial Secretary said the proposition falls within very narrow limits, and it does so for this reason, that the Government have been extremely careful to draw their Financial Resolution in such very strict and confining terms that it is impossible for any private Member of this House to hope to amend this Bill by extending it in the directions in which he might wish to do so. A very different course was taken by those who were the authors of this legislation, for in 1908, when the original Old Age Pensions Bill was introduced by the Government of that day, the Financial Resolution was in the widest possible terms, and there was a really free opportunity to the House of Commons to mould the Bill upon the basis of a much wider Resolution.

I desire to say a word or two on the subject of the removal of the thrift disqualification in this Bill, and the first observation that I should like to make is this People sometimes speak as though the reason why you must try to remove the thrift disqualification on old age pensions is because, as long as there is a thrift disqualification, it operates as an actual discouragement to thrift. For my part, I doubt very much whether that is a true analysis of the position. I do not think that a disqualification on the ground of savings in actual practice operates as a discouragement to thrift. What it does is that it operates as a very unfair penalty upon thrift, and it creates a very widespread and a very natural sense of injustice. It is not true, I think, that the disqualification for receiving an old age pension, so far as that disqualification arises from the fact that the person has exercised thrift and has saved money, is at all likely, or to any serious degree is likely, to cause people to be reckless and spendthrift who otherwise would not be, because, of course, the individual, as a rule, who is exercising thrift exercises that thrift long before the age of 70. He exercises it, at any rate, in early middle life, and it is not the case, I apprehend, with ordinary men and women in any walk of life that they abandon their natural instincts to be thrifty, if they are thrifty, merely because they realise that, if they are thrifty and 70 years of age come upon them, they may find thereby that they may lose an old age pension.

Therefore, I think it is as well to be clear that the real reason why it is so important to get rid of the disqualification of thrift in an old age pension system is not really because it is calculated to undermine the moral litre of people or prevent thrifty people from exercising thrift, but because it creates a very real injustice. It is because it takes people who, in every other respect, are exactly like one another—the same age and the same circumstances—and it says to the person who has been spendthrift and reckless, "We will reward you with an old age pension," and it says to the man who is exactly the same except that he has been thrifty and careful, "Since you have been thrifty and careful, an old age pension shall not be given to you." The origin of the proposition that old age pensions were going to destroy the bent of thrift in the British people is to be found in the Conservative party. One of the worst things about the Conservative party is that they know nothing about the history of their own party. I see, for example, my right hon. Friend the Member for the Scottish Universities (Sir H. Craik) opposite, and he will remember very well the lead which he gave on that occasion when he voted against old age pensions.

Sir H. CRAIK

I voted against old age pensions because they were then introduced and passed by the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George), with this penalty upon thrift, with which I did not agree and against which I spoke.

Sir J. SIMON

I did not say in the least that I was reproaching the right hon. Gentleman, but I was only saying that the Conservative party forget their own history in the matter. There were in the Parliament of 1908, I think, 163 Conservative Members. In fact, the Conservative party were about the size which the Liberal party are now. Of those 163 Conservative Members, 140 refused to vote for the Third Reading of the Old Age Pensions Bill of 1908. Let me add at once that 12 of them did vote for it, and 11 of them went further and voted against it, and I think we may safely see what the reason was—it is well to learn from history and experience—if we remind ourselves that in the House of Lords, which at that time, at any rate, was mainly representative of the Conservative point of view, an Amendment was carried which was to terminate pensions by the end of 1915, and the Bill in that form was sent back to this House of Commons, and it was found necessary for the Liberal majority in this House to refuse to accept that Amendment and to pass the Bill without it.

Sir K. WOOD

The right hon. and learned Member forgets that the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) stated that the old age pensions movement was due more to the inspiration of the Conservative statesman, the late Mr. Joseph Chamberlain, than to any other man.

Sir J. SIMON

The hon. Gentleman is misunderstanding me. What I am saying is that, if you want to find the origin of the fallacy that the reason why the thrift disqualification is objectionable is because it destroys the sense of thrift in the British people, you will find it in the ridiculous view adopted by the Conservative party in 1908, and the best of all illustrations of that is that the distinguished leader of that party in the House of Lords, Lord Lansdowne, in those very debates on the Old Age Pensions Bill, said that that Bill was: a Measure which we regard with great apprehension, which we fear may have far reaching and disastrous effects upon the future of this country, and he described it as follows: This Measure, I am mach afraid, is one which will weaken the moral fibre of the nation and diminish the self-respect of our people. I venture to say that time has, at any rate, proved this, that old age pensions do not weaken the moral fibre of any people, and the only reason why it is so important to get rid of the thrift disqualification has nothing in the world to do with the moral fibre of the nation. It is due to the fact that it operates as a penalty upon people who have been thrifty, and it creates thereby a, very grievous sense of injustice and inequity. What, the Government have done in this Bill—I say it without the slightest desire to cavil or to criticise—is very satisfactory as far as it goes, but I do not think it has been observed that the Government's proposal not only does nothing whatever to get rid of one of the greatest existing objections to the system, namely, the system of inquisition and inquiry as to poor people's small means, but it is actually going to increase that inquisition.

Let me just point out that, as things are at this moment, speaking broadly, an old man who has the magnificent sum of 10s. a week, and no more, may get a 10s. a week addition by way of pension, and as long as his receipts from all sources do not exceed 20s., he may hope to get some small sum, though it will only be Is if he has 19s., but it is not material to ask where he gets his small income from. It makes no difference at this moment whether the 10s. or the 15s. is the result of a gratuity, or of a saving, or the result of a little odd job on of a contribution from a son or a daughter, or from any other source of income, but the moment that the Government start this new principle, that you are not going to count against the old age pensioner a sum up to 15s. a week as long as that sum is not earned, it becomes, for the first time, necessary to inquire in many cases, not only "How much is the old person's income?" but "Where does he get it from?" and that, I venture to think, will be found to involve a still more aggravating inquisition than there is at the present time.

Mr. CLIMIE

They do ask where it comes from now.

Sir J. SIMON

The only reason why they sometimes ask where it comes from is because they want to test the truth of the total, but there is now going to be a new inquiry altogether. Let me put this example: There are plenty of old people, servants of municipalities, servants of private firms or of private individuals, who, as a matter of fact, are quite past their work, and who, none the less, are given whatever it may be, and they are not put in the position of being told, "You are past your work; you can have that, and you can do nothing for it." But it constantly happens that those old people have the satisfaction of being told, in the case of an old gardener, for instance, "It is a fine day; come and sweep up the leaves. I have my new gardener in, but I am glad to see you here on a fine day," and that old man takes a pride in the fact that there is something still, in a sense, which he is doing and for which he is being paid, whatever it may be, say, 30s., not really because he is earning it. It is not what he is worth at all, but it does not matter, and the decent employer—and it applies to other people besides individuals—is glad to put it that way, because it relieves an old man or an old woman of the very unhappy feeling that old age has made them incapable of work. See what this new scheme will do. It will now be necessary, for the first time, for that man or woman to come forward and say, "I want to prove that I am not really worth 30s. I am not really doing any work for it. I am merely a person worth, it may be, 4s. or 5s. for half-a-day's work now and again, and the rest is charity and gratuity." As soon as he proves that 25s. out of his 30s. is gratuity, and as soon as he goes through the indignity of that process, the Chancellor of the Exchequer says, "Very well, then, I will not count that against you; you are not earning it."

The Government are now setting up a new kind of inquiry, in village life as well as elsewhere, in which it will be necessary for these old people in many eases to prove that, though they are receiving, after 70 years of age, from, a former employer, it may be, so much under the name of being kept on and having wages, it really is in the nature of a gratuity. Anyone in this House who has been familiar, as I was some years ago, with the working of the Workmen's Compensation Act, knows that the point I am putting is a really effective point. I remember very well, as a young man at the Bar, this question often arose under the Workmen's Compensation Act in the County Court. When the employer is continuing, after an accident, to pay his workman the same sum of money as he paid before, is he, on that account, to avoid compensation? Is it not the truth that, owing to the accident, the workman has less earning capacity, and you have to have inquiries to estimate what is the real earning capacity of the man, and what amount is the result of charity or gratuity, and what amount wages.

It seems to me that, if you leave things as they are going to be left now, although I quite agree this is an improvement on the law as it stands, you are not only going to preserve all these irritating and ignominious inquiries, but you are actually going to increase them. The House will observe this very odd consequence. When you are dealing with Income Tax, the income that is earned is the meritorious income, and has an advantage, but when it comes to tile old age pension, any sum that is earned is a disqualification and is penalised. Of course, there is a theory behind this which I can understand. Indeed, my right hon. Friend the Chancellor of the Exchequer, when he introduced his proposal, not only told us that he had not got enough money to remove the thrift disqualification altogether, and to make old age pensions universal, but he went further, and said: I do not think it right to do anything to encourage earnings by individuals above 70 years of age."—[OFFICIAL, REPORT 25th June, 1924; col. 474, Vol 175.] [HON MEMBERS: "Hear, hear!"] I would venture respectfully to urge my hon. Friends above the Gangway not to cheer too readily. Let us get down to what is the human factor. There is nothing of trade unionism involved in this. Take the human factor. There is an old couple, each of them over 70, and each entitled to 10s. a week pension. It may be that the old man has also some little additional resource. These two old people can live on their old age pensions, with the husband's additional source of income. The old man dies. Is the Labour party really going to say to his widow, "If you, in your cottage, do a little needlework, if you earn a few shillings in tins way or that, our proposition is, in the language of the Chancellor of the Exchequer, I do not think it right to do anything to encourage earnings by individuals above 70'"? Surely that is quite wrong. What is really happening in connection with old age pensions is that an actual discouragement is being effected, a discouragement which, I think, is quite unnecessary, and which, in many cases, is very hard. There have been many cases of widows who have found that, without the husbands pension, the single pension for the home is not sufficient unless supplemented, and here you are saying, "If you dare supplement that income, if anyone is able to give you casual work to help that income up to a certain point, the old age pension policy of the Labour Government is that you will lose your old age pension."

I do not agree in the least with the view the Labour Chancellor of the Exchequer takes on this point. I agree with him in much, and have sincere admiration for his efforts for sound finance, but I altogether disagree if his proposition is that, even apart from the financial necessities of the case, it is wrong in principle to allow or encourage people to earn for themselves after 70 years of age. You may perfectly well trust the trade unions to see to it that this is not going to be an effective under-cutting of rates, and you will find plenty of people who do not belong to the Labour party supporting them. That is not the practical point. The practical point is whether the old man or the old woman is to be allowed to supplement the old age pension, the old woman by doing lace or needlework, and the old man gardening, or the like? It is a cruel thing to say to these old people, "Our proposition is that we ought to do everything we can to discourage you from earning after 70 years of age." I know the inquiries which have to be made are inevitably bound up with a means limit. For my part, I do not believe there is any way of avoiding this inquisition, except by getting rid of the means limit. [An HON. MEMBER: "The Income Tax limit."] I have gone into it as well as I can with my small amateur knowledge, and, as far as I can investigate it, my own view—and I believe it is confirmed by the Treasury authorities—is that there is not any clear and simple way out by taking the Income Tax limit. What happens in regard to the income Tax limit is merely that an individual, who takes the view that his income is within the Income Tax limit, is at liberty to fill up an application form, and claim exemption or abatement, but it still remains necessary to find out whether it is true. I am sorry to say, even Income Tax payers sometimes rather exaggerate their misfortunes. The consequence is you do not get a way out simply by saying, "I will substitute for £50 a year the sum of £140'; or whatever it may be. There is only one way to get rid of these extremely distressing and irritating inquiries, and that is by saying, as many people have said in times past, that, as a matter of fact, we must get rid of the means limit altogether.

Sir H. CRAIK

Is the right hon. and learned Gentleman aware that many on this side held the same view in 1909?

Sir J. SIMON

I am obliged to the right hon. Gentleman, and, perhaps, I may count him as a warm supporter of what I am saying now. I have a suggestion to make, but let me first point out to the Labour party that what I am saying now has been said with the greatest emphasis by some of those in whom they put their greatest trust. I am not going to quote election manifestoes, but let me call the attention of the Financial Secretary to the Treasury to the language that was used in the original Debate of 1908 by no less a person than the present Chancellor of the Exchequer. He was discussing the scheme by which the old age pension was made smaller and smaller, until it finally disappeared, because, as the result of inquiry and investigation, it was found the applicant had got a limited amount of other means. Speaking on the 9th July, 1908, on the original Old Age Pensions Bill, he said: The demand of the working classes of this country is for a universal pension of not less than 5s. a week, to begin at an age not higher than 65. He went on: Does he think "— he was addressing the then Chancellor of the Exchequer— that any self-respecting member of the working classes, a respectable working man with a private income of 10s. or 12s. a week, would submit to the inquisition prescribed by this Bill for the paltry sum of 1s. a week, and make a weekly journey to the Post Office in order to get it? I think know enough of the working classes of this country to warrant me in believing that no member of them is going to take advantage of that part of the Bill in order to get a pension under such circumstances. I ask hon. Members to contrast that view, formed and expressed by the present Chancellor of the Exchequer when old age pensions first became an actual legislative proposition on the Floor of this House, with the inquisition involved in determining the means of an applicant and adjusting his pension accordingly. That inquisition in practice will be found not only to be resented, but intolerable, and I do not suppose there is a Member of this House who has not had cases within his own experience and constituency. There is no necessity to make party capital out of this. We are all honestly, I believe, out to help the old people from being put to distressing inquiries, because what does the inquiry of a pension officer mean? I do not doubt he is an honest servant of the public, and does his work with as much consideration as he can, but it means inquiring from neighbours, and inquiring about gifts and gratuities. An illustration was given by the present Colonial Secretary in the Debate last year, in referring to a case of application for a pension. He said: The authorities came along and said, There is so much value attached to the potatoes and the greens that you are growing on your allotment, and we must deduct it.'"—[OFFICIAL REPORT, 21st February, 1923; col. 1189. Vol. 160.] There is nothing in this Bill which is going to stop that, and I do think the House of Commons, before reading this Bill a Second time, should follow the view mentioned by my right hon. Friend just now, and ask themselves whether it is not possible to contemplate really making old age pensions independent of people's means. There are two objections raised, and there is great force in both of them. There is the objection, first of all, that if you did that, a great number of people who have abundant private means would take the pension; and there is, secondly, the view that, as a matter of fact, it would be wasting a great deal of public money, and, therefore, the taxpayer would suffer severely and unnecessarily. I regard both those objections as objections of serious importance, and I want to put to the House some considerations with regard to each of them. First, take the proposition that if you made these old age pensions independent of any inquiry about means, the result would be that you would get people even of abundant wealth taking the pension. Would you?

Let us take a recent practical test. Take the case of separation allowance. The separation allowance that was granted during the War to a private or non-commissioned officer was a separation allowance granted to wife or mother, as the case might be, and had nothing in the world to do with whether the person was rich or poor. There were plenty of people who were in such a position that they never dreamed of asking for the separation allowance for their family relations, and I do not believe that what you may call the more fortunate classes would, as a practical matter, put in for and take, a pension of this sort involving application to the Post Office, the filling up of forms, and all the rest of it. Although, of course it is true that, from the Treasury point of view, the really serious loss of money would not arise because of a very limited number of very rich people, their real difficulty, no doubt, is with regard to the people in the middle position, who are much more numerous. But as I began by saying, I do not believe, if you made Old Age Pensions independent of means, you would find that people over 70 would, as a matter of course, take them. Should I be doing the present Lord Chancellor, or the Lord President of the Council, any injustice if I suggested that even although over 70 years of age, they would not apply for their Old Age Pensions? I do not believe it would have the result that all sorts of people, who have no right to the Old Age Pension on the ground of necessity, would put in a claim because of the technical right.

7.0 P.M.

I have a second point, and, if I may, I would ask the right hon. Gentleman the Secretary to the Treasury to consider it. I have no doubt at all that he, with his very great competence and skill, and his Treasury advisers, have considered this from many points of view, but may I respectfully ask if he has considered this suggestion? I put it forward with very great hesitation, but I feel it is so important to get rid of this investigation about means that the House will listen for a moment even perhaps to a farfetched suggestion. Would not it be possible to devise a scheme something on these lines, that when a man reaches the age of 70, and he is in circumstances which do not make it any part of his intention to apply for a pension of 10s. a week at the Post Office, he should be at liberty, under proper regulations, to execute a disclaimer, under proper guarantees and securities, and that he should receive from the Treasury an acknowledgment of his disclaimer. Having done that, he would be committing an offence if he made an attempt to get his pension. I suggest that by getting that disclaimer this result may be secured. When a mart dies, and his estate comes under review by the Revenue authorities for Death Duty purposes if in the case of people who are over 70 when they die, the estate is above a certain figure, then unless his executors produce the acknowledgment of his disclaimer, you might get from that estate the old age pension, and proper interest upon it.

It may sound a little fantastic; new things always do, but it is well worth while to see if there be not some means by which we can get rid of the means limit, and at the same time secure that an abuse of public money shall be done away with. It seems to me that the scheme would work cut like this. You have a man—say, a retired Judge—who may, for one reason or another, have accumulated a substantial fortune. I do not believe he is the least likely to put in for his old age pension, and I think that if he were given this inducement he certainly would not. He would disclaim it, and would have the record, and the authorities, when they reviewed his estate at death, if they found his estate was more than a certain figure, would say that, unless it was proved that he did not take his old age pension, the old age pension must be returned out of the estate as from the age of 70, with interest upon it. [An HON. MEMBER: "In the case of the Judge, what old age pension are you referring to?"] I am taking anyone whose income may be such as would not make it reasonable to take advantage of a pension.

There is an objection that it might lead to people trying to get rid of their property so that when they died it would appear that their estate was not more than so much. The answer is that they do it now. A large part of the time of the lawyers of Lincoln's Inn is taken up in settling the forms of arrangement in which it is hoped that Death Duties will be at a lower rate, because the total at death will be smaller. It is ridiculous to think that anybody is going to alter his practice in that respect because of this trifling sum. The more serious difficulty you would have to consider is how to deal with the people who, though they may have a substantial income in the later years of their lives—take, for instance, the highest ranks of the Civil Service, men who may have a retiring pension of £2,000 or £3,000 a year—may, none the less, leave a comparatively small estate. No doubt that case presents some difficulty, but I respectfully suggest to the Financial Secretary to the Treasury that unless this kind of plan has already been investigated, it would be worth a great deal to find a means by which we can get rid altogether of this inquiry as to what people's means are, and devise some other system by which, if necessary, we get the money hack again from the estates of those who never should have claimed the old age pension.

The Government have been able to do this little bit. It is the smallest fraction of what many of their supporters thought they would be able to do. It is a, small fraction of what Liberals, like myself, declare ourselves as most anxious to do. But I look with the gravest suspicion on such things as selecting earnings as the things to be penalised. I regret that the Government should actually increase, by this proposal, the inquiries which have to be made to find out what the circumstances of these poor old people are, and I hope that the Chancellor of the Exchequer will abandon the obstacle that he feels it his duty to put in the way of the poor old man or the poor old woman, earning, maybe, a few shillings It saves many old people a feeling that they are past work and adds something very necessary to the small pittance they get under the pension, and it would be a satisfaction to know that the Government, though they cannot do more at the moment, and have not done nearly enough, will do something to meet this case.

Sir JOHN PENNEFATHER

I must say that in the Old Age Pensions Bill we have some good points. The Bill admits that it is a good thing to encourage thrift, and it is a good thing for people to accumulate and to invest their money, and to draw the interest on their investments. That is, I think, sound; and the next point is that the Bill admits that the old age pension should be given to those who need it, and not to those who do not need it. Another thing I find to praise in the Bill is that it recognises that, while on the one hand there should be great sympathy and consideration for those who are suffering the double disability of being both old and poor, at the same time it is the duty of the Chancellor of the Exchequer to regard the national finances as a whole, and to consider how much can be devoted even to such an excellent object as old age pensions, without casting an undue burden upon the large number of the masses of the people who are, perhaps, not very much younger, and are not very much better off than the old age pensioners.

I must admit, having paid my tribute, that I am disappointed with the Bill—very disappointed. I agree with my right hon. and learned Friend (Sir J. Simon), and I think that a much better and stronger Bill could be presented, and would be passed through the House with the consent of all parties. I think the Government have spoiled the ship for a ha'porth of tar, and, if the House will bear with me, I will very shortly follow the trend of my right hon. and learned Friend's speech, and ask whether it would not be possible, even now, to improve the Bill. The difficulty is, as my right hon. and learned Friend pointed out, that it perpetuates and intensifies the necessity for these meticulous and obnoxious investigations into the means of the aged poor. I do not go so far as to say that no investigation should take place, and I do not think that anybody should come to the State and say, "I claim a pension of so much a week, but I refuse to give any information as to my financial position." At the same time, everything reasonable should be done to render these investigations as few and as little obnoxious as possible. I also find no trace of anything having been done for those who have no benefactors and who when they come to the age of 70, have often outlived the majority of their friends. There are, and there must be in the future, many old people who really have no one to turn to. They may have had bad luck, ill-fortune, ill-health, or they may be in this position through over-generous self-sacrifice, or through poverty. I have figures here, if anybody wishes to ask any questions, to show how people are penalised under the Bill. I want to ask whether it is not possible, even now, with the goodwill of the Government, to do something which might be so arranged as to cost very little more, or perhaps no more, than the sum the Chancellor of the Exchequer has set aside this year for the purposes of the Bill.

I want to press on the consideration of the Chancellor to the Exchequer the total abolition of those graduated payments which are the cause of so many anomalies. The abolition of the lot is not going to cost much. If hon. Members will turn to the OFFICIAL REPORT of the 20th June, they will find that, in March last, out of 916,771 pensioners, only 62,920 were affected by these gradations. That means that if these reductions were swept away altogether, and the 62,000 old age pensioners were granted he full 10s. per week, it would only cost £13,057 per week or £679,016 per year. At the same time as you get rid of the deductions you will do away with all the petty but expensive inquiries which now have to be made. The total net loss to the Treasury in making this great sweep of all these gradations will only be about £500,000 yearly, and if every one of the 63,000 pensioners were given the full 10s. per week instead of, as may be, Is., 2s., 3s. or 4s. weekly, the cost would be relatively small, while the advantages would be very great not only in the matter of admini- stration, but in the gain to the old age pensioners themselves. It would do away with all unpleasant inquiries.

Providing that all the old age pensioners received the full 10s. per week, then I think it would be quite right and proper to give a special extra thrift allowance somewhat on the lines of the thrift allowance mentioned by the Chancellor of the Exchequer. If a man came forward and said, "It is true that my income, as calculated, exceeds £49 17s. 6d. per year, but any income over that limit is due to my thrift, ' then I think the Chancellor of the Exchequer might say, "We will give you an extra special allowance, and if after the deduction of that allowance your actual income is less than £49 17s. 6d., then you shall have the old age pension in full." The Chancellor of the Exchequer told us in his White Paper that he estimated, under the operation of this scheme, to bring in 150,000 persons who are not now old age pensioners. If all these were treated under my suggestion, and were declared entitled to the pension of 10s. per week, it would cost £3,900,000 a year. If, on the other hand, the allowance was 7s. 6d. a week, the cost would be £2,925,000 a year, and if it were only 5s. a week the expense would be £1,950,000 a year. I hope that the Government will at all events consider whether such a plan as I have roughly outlined would not give greater satisfaction to the aged poor of the country and greater general satisfaction than the scheme embodied in this Bill. No doubt there might be some cases in which the Government scheme would better suit individuals, but the great mass of old age pensioners would benefit more from my scheme, I submit, and would be very grateful for it. I agree it might be impossible for any private Member to transform the Government scheme without the really benevolent sympathy of the Government, but, speaking on behalf of the aged poor, as I do, I ask the Government to give favourable consideration to the scheme I have suggested.

Mr. SCRYMGEOUR

I am gratified with the extent to which the Government have gone in dealing with this important question of old age pensions, but I think the need of these people is so urgent that we might reasonably have expected the Government to put them into a position which, unfortunately, they have not elected to do. There are some points in the scheme which require elucidation. The Chancellor of the Exchequer, on the 25th June last, stated that in the calculation of means the inclusion of gifts from sons or relatives or employers has given rise to a good deal of irritation and a good deal of indignation."—[OFFICIAL REPORT, 25th June, 1924; col. 473, Vol. 175.] We would like to know if this Bill really safeguards claimants for pensions in the matter of relatives providing them with housing accommodation. The relative may say to the old age pensioner, "We want to try and help you, and we would like to have you live with us." If that arrangement is carried out it really ought not to be regarded as part of the income of the old age pensioner, and we want to know if, in the new scheme put forward by the Government, such a matter as that is shut out from the inquiry as to the assessing of the pensioner's means. This process of assessment of means has given rise to a great deal of irritation, and in this matter I suggest a reasonable step might be taken by the Government so to safeguard the claimant for a pension that he or she shall not have to undergo an inquisition into the assistance afforded by a relative in the way of providing housing accommodation. The Government might give otherwise a more liberal scale of pension than they have yet done. We are proceeding on the lines of endeavouring to relax the existing limitations, and I want to make certain as to the position on the point I have raised. Perhaps the Financial Secretary to the Treasury, who is always so helpful in clearing up matters of this kind, and whose work at the Treasury is appreciated in all parts of the House, will tell us exactly whether the pensioner is safeguarded on this particular point of assistance from relatives who may seek to help him or her by providing housing accommodation.

Sir JOHN MARRIOTT

I do not propose, with all respect, to follow the points made by the last speaker. I want to offer just one or two observations, but I do not wish to detain the House at any length on the Bill now before us. With a great deal said by the Chancellor of the Exchequer last week I cordially agree, and, in particular, I agree that we must rule out universal old age pensions on the ground that the cost is prohibitive. I agree also that as between means resulting from various kinds of thrift no discrimination is possible. That was a point very strongly made by the Chancellor, and I respectfully and cordially agree. Above all, I agree that the whole problem of social insurance is at present more or less in a chaotic state. By the proposals which the Government have put before us they have placed a good many of us, who have given special thought and consideration to this matter, in a rather cruel dilemma. I doubt whether Members in any quarter of the House really like these proposals, but we hesitate to look a gift horse in the mouth.

All sections agree, I think, that the present position in regard to old age pensions is intolerable and indefensible. We feel that in the first place because at the present time very inadequate benefits are enjoyed at an enormous cost to the taxpayer. In the second place, we hold the present position to be intolerable because the system is not only costly but irritating to the recipients, chiefly on the ground, which has been so largely explored this afternoon, that the whole system is inquisitorial in character. In the third place, we hold it to be intolerable because the present system does unfairly, as most of us think, and injuriously differentiate between the thrifty and the non-thrifty recipients. In the first place, I said that at present these old people are enjoying inadequate benefits at an enormous cost to the taxpayer. I remember that when the right hon. Gentleman who is now the Member for Paisley (Mr. Asquith) first introduced the old age pensions scheme in this House in 1908 he put the cost of the scheme at £6,000,000 a year as a total, though it was admitted that the cost would rapidly rise to £7,500,000. The whole House, the whole country, is aware that to-day it is costing £24,000,000 a year.

What, as a matter of fact, does this enormous expenditure secure to the aged poor? It secures, as the House knows, a maximum of 10s. a week if the means obtaining by the recipients do not exceed £26 5s. per year. It secures 1s. per week where the total means do not exceed £49 17s. 6d. That means that the aged man or the aged woman, after, perhaps, half a century of tail, must not have more than £1 a week. That is an inadequate benefit secured at an enormous cost. Compare this with the figures given last week as to the cost of an indoor pauper at the present time, which is 26s. 50½d. per week, or the cost of a criminal in penal servitude, which is £ 2s. 2d.! We are treating the aged poor far worse than we are treating either the criminal or the pauper. In the second place, I suggest that the concomitant of granting a pension is unduly inquisitorial and, in a sense, impertinent. How many applicants for pensions were there last year according to an answer by the Financial Secretary to the Treasury last week? It was then stated that the annual number of applicants for old age pensions is 167,967, and that those who, on one ground or another, were rejected, or whose pensions were revoked, numbered 33,155 persons. Of these about 7,000 persons were rejected on the ground of age, and about 12,000 others on the ground of means.

I want the House for a moment to try and imagine what these figures—these cold figures—mean to the aged poor of this country; and, beyond that, mean to the cost of administration. The cost of administration to-day is nearly £5 per head of the applicants for pensions, and nearly £1 per head of the actual pensioners. In the third place, I suggest that the present system is unfair and injurious in its differentiation between the thrifty and unthrifty. The right hon. and learned Gentleman the Member for Spen Valley (Sir J. Simon)—who I am sorry not to see at the moment in his place—said the real point was the penalisation of thrift. I agree. I have very often heard it said from a certain section of the House that thrift is not a virtue, but that, on the contrary, it is in the nature of a social crime. [HON. MEMBERS "No!"] Yes, I have often heard that observation inside and outside this House; but I do not think the Chancellor of the Exchequer would agree with that sentiment. On the contrary, he confessed not long ago in this House that he was staggered and obviously pleased by the enormous amount of saving on the part of the workers of this country. He gave the House some interesting figures, which show that if thrift is a crime there are, happily, a good many criminals.

The Chancellor of the Exchequer showed us that more than £200,000,000 is now annually saved by relatively poor people in this country. The friendly societies alone collect £9,000,000 a year. The collecting societies collect about £7,000,000 a year. The trade unions collect for their benefit funds £8,000,000 a year—and here may I add my respectful testimony to the admirable work they are doing from the point of view of the benefit funds. The industrial insurance companies collect, in premium income, over £31,500,000. This gives us a total of about £55,500,000 of savings by non-State-aided insurance societies and agencies. In addition to that, you have a sum of about £160,000,000 a year which comes in through the savings banks, through the trustee savings banks, through the railway savings banks, the co-operative societies, the building societies, and the National Savings Certificates. That is a very remarkable achievement, and, as I say, if this is to be accounted a crime there are, happily, many criminals.

What do the proposals of the Government in dealing with this problem actually amount to? In the first place, they will not help the national Exchequer. The method is one which will not diminish the charge upon the Exchequer, but will increase it, avowedly, at once, by £4,000,000 and before long, we were told, by £7,000,000 a year. Do the proposals give us in return for that anything in the nature of an adequate provision for old age? I am suggesting that that is not the case. The right hon. and learned Gentleman the Member for Spen Valley showed that the inquisition as to means, so far from being mitigated by the proposals of this Bill, actually will be more meticulous than ever. Take any of the illustrations which were given last week in the White Paper, and apply this test: Will these proposals encourage the people either to increase their industry or their savings? They will, unfortunately, not encourage them in industry, for industry under this Bill is a crime for people over 70. In respect to thrift, they will help only those who are thrifty to the extent of £39 a year.

With great respect I submit that the whole difficulty of the means limit is in- soluble except in one way. On that point Sir William Beveridge—and there is no higher authority in this country—has said that we have got into an insoluble difficulty to-day from which we can escape only in one way. I want, before I sit down, to suggest that we shall never satisfactorily solve this problem, we shall never get rid of the difficulties which attach to the means limit until we make our old age pension system an integral part of a very much larger scheme, and until we get the whole thing on to a contributory basis. I very much regret that it was not on that basis long ago.

My point, and the only point that I want to-night, to put before the House is the one to which I have already referred—that public social services ought not to be regarded in isolation, and that this problem will not be solved until we envisage it as a whole. Till then we shall never discover appropriate remedies. In what direction are these remedies to be looked for? I suggest that they will only be fouund in some comprehensive scheme of national insurance which will cover all the contingencies of industrial life, which will bring into one single system national health insurance, unemployment insurance, compensation for accidents, old age pensions, widow's pensions, mother's pensions, and perhaps other benefits as well. Speaking on one of the first days of the Session, I outlined to the House the scheme which I had in mind. I had hoped before now to be enabled to lay that scheme in detail before the House. My own main objection to the proposals which the Government have brought forward in this Old Age Pensions Bill is that they offer no satisfactory solution of the problem which they attack. On the contrary they are actually increasing the difficulties, and those difficulties are neither few nor insignificant which lie in the way of the solution which I regard as the only possible and permanent solution of this problem. It was said the other day that this new scheme of old age pensions would increase the difficulties to be surmounted in establishing a contributory system. But we are not now in a position to look a gift horse in the mouth. I am not prepared, therefore, to oppose the proposal made in this Bill, but I want to safeguard my position by saying here and now that the scheme will not advance, but rather hinder and retard, the only possible solution of this problem as a whole.

Mr. TREVELYAN THOMSON

The Parliamentary Secretary has referred to the narrow compass and limited lines of this reform. The discussion which has followed must have made him wish that he had taken a larger vision and a broader outlook and brought in a more comprehensive scheme, because there never was a time when in all sections of the House a greater desire was shown to do something on broader lines. The speech made by the hon. Gentleman who has just sat down indicates that in all sections of the House, and even in those sections which originally opposed the granting of old age pensions, there has been a revulsion of feeling, and that which in the past was denounced has now been received with acclamation. Consequently I regret that the Government have not taken their courage in both hands and brought in a more comprehensive scheme. They often tell us that they have not the power. How do they know they have not the power. At any rate, they have the power to try and test the House in order to see whether there is a progressive majority in this House willing to carry out a larger scheme.

As a matter of fact they have not given the House an opportunity of declaring itself on this question, and they are legislating, not only behind public opinion, but behind the general feeling of the House, which is in favour of a large and more comprehensive Measure. The hon. Member who has just spoken referred to the failings of the non-contributory system. I cannot share his view with regard to pensions as they exist now for people over 70, and I think it would be a mistake to alter that which is already part and parcel of our system. I do think, however, that between the ages of 65 and 70 it would be very desirable to graft on to our existing system a contributory system whereby the men who have become old and worn in service might have leisure at an earlier age than 70 years of age. That would not only relieve distress, but it would relieve the unemployment problem by taking off the ranks of the unemployed many men of middle and younger age who are now drawing unemployment benefit. If they could receive a pension at 65 more of these men could find work in the ranks of industry.

I want to put a question to the Parliamentary Secretary. Reference has been made to the inquisitorial system, and I want to ask whether it is too late, even within the narrow limits of this Bill, for the Government to reconsider the method which at present is adopted of calculating the means of pensioners. Reference has been made to the fact that it is not actual income that is ascertained, but a hypothetical income, and that is a very unfair basis. The first £25 capital value is regarded as free so far as income is concerned. The next £375 is calculated at one-twentieth, or 5 per cent., and above that it is calculated at 10 per cent. Surely that is at variance with the actual facts of the case. These people who have saved are people who are somewhat cautious as to their investments. They do not seek large returns, and do not keep it in a stocking, but put it in the savings bank, or into some other security where a small return is found.

I had a case before me the other day of a farm worker who had lived 50 years in one house, and who, through hard work on a small holding, had saved over £600. Because he had saved that money his application for a pension was turned down owing to the hypothetical method of calculation which has been adopted, which showed that he had an income barring him from receiving an old age pension. I quite admit that the Bill which the Government have introduced, and the limit of £39 which they allow, will remove the hardship in that particular case, but it does not remove the hardship in other cases. What is the position to-day? Even when this Bill is passed, if you maintain your present system of ascertaining the income of the individual, you will still have the case of a man who has the good fortune to save £900 being treated unjustly. On the first £25 nothing is taken into account. On the next £375 the amount is 5 per cent., making £18 15s.; and the next £500 is calculated at 10 per cent., which is £50, thus making up a hypothetical income of £68 15s.

I submit that is penalising thrift in the very worst form. You take this fictitious income, and then you say because the man is getting 10 per cent., on a part of his savings he is not to receive any old age pension, or it has to be reduced proportionately. I appeal to the Parliamentary Secretary that it is not yet too late to modify the methods whereby the income is ascertained, and to say that at any rate those who have saved and have been thrifty shall not be penalised by being credited with a much larger income than they can possibly receive or are receiving. I hope it may be possible for the Government to have regard to this very real hardship which still continues, and I trust they will bring in Amendments to the Bill so that a more just and equitable method of ascertaining the income may be arrived at.

With regard to the inquisitorial system; surely if in dealing with the Income Tax payments it is sufficient to ask the individual to make a return, and check it if necessary, the same principle might be applied to the old age pensioner. The pensioner might be asked to make a return of his income, and a certain amount of checking might be done later on, but I think it is a wrong thing to have all this inquisition into the means of the pensioner, because it is treating those who have the least money worse than those who have the larger sum. I hope the Government will realise that the sense of the House is in advance of their tame and halting measures, and they ought to test the House on this point. [HON. MEMBERS: "Oh, oh!"] It will be time for hon. Members above the Gangway to jeer and sneer when the House has rejected some of their social measures. They are now legislating behind the opinion of the House, and I hope that when they tackle the next social problem they will not be behind, but in advance of the general feeling of the House.

Sir H. CRAIK

I should not have intervened in this Debate but for the references made by the right hon. Gentleman the Member for Spen Valley (Sir J. Simon) in the course of his speech. The right hon. Gentleman made a reference to what happened in 1908 on this question of pensions, and it is astonishing to me to find how many of the phrases and sentiments so well expressed by the right hon. Gentleman were in a feebler manner expressed by me in 1908 in regard to the evils of the inquisitorial system. We have not forgotten the history of our own party on this question. We know it only too well and in 1908 when the Pensions Bill was being introduced we proclaimed very much those very defects to which the right hon. Gentleman the Member for Spen Valley has called attention. The right hon. Gentleman said that the system of old age pensions works unjustly and imposes a most serious and unjust penalty on thrift, but at the same time he does not admit that it discourages thrift. But how can you discourage thrift more effectively than by treating it unjustly because it is thrift? There may be some subtle distinction, but for the life of me I cannot see it.

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I do insist, however, that you treat the thrifty pensioner unjustly. I agree with the right hon. Gentleman that we do treat thrift most unjustly and unfairly, but I do think we discourage it. We have had from my hon. Friend the Member for York (Sir J. Marriott) a wider scheme of contributory pensions. In 1908, rightly or wrongly, we urged that system of contributory pensions, and we said over and over again that we did not desire that it should be based strictly upon actuarial principles. We wished it to be liberal, even lavish, in the assistance and supplement that it would give to contributors, but we urged that the principle of contribution should be established. I remember, too, that we urged at that time that many things might be taken in place of contributions—that service in the Territorial Army, any public service, or any day performed to the nation, might be taken as a substitute for contributions. Do let us, however, in some way or other, have that small contribution which implies a small effort on the part of the contributor, and supplement that to the very highest and most generous degree, regulating it by all the skill that is possible, and guaranteeing it with all the credit of the State, but still allowing a small effort to be made on the part of the contributor.

I remember that a great deal was said at that time about the German contributory system. Many of those who were then in this House, and who, like some of the right hon. Gentleman's colleagues, had their spiritual home in Germany, thought that there might be something in following the example of Germany, but that was set aside. I say now that, if the right hon. Gentleman the Member for Spen Valley had the courage of his opinions, and went into the Lobby against what I consider to be a niggardly system, which does not half sufficiently get rid of these inquisitorial suggestions, I would follow him. The right hon. Gentleman does not have the courage of his opinions, and, although he has denounced as niggardly the policy of the Government in this matter, he is not prepared to follow that up by boldly voting for the wider scheme.

Mr. MILLS

The boy stood on the burning deck!

Sir H. CRAIK

The worst of these interruptions is that they are so obviously unintelligible. If they were clear, they might possibly assist Debate. Instead of regretting the action that we took in 1908, and being ashamed of it, as the right hon. Gentleman says we are—

Sir J. SIMON

I always listen with the greatest respect to what is said by the right hon. Gentleman, who is an old friend of mine, but, really, I was most careful to say that I was quite certain they did not regret it; but let us have it clearly on record—they did vote against old age pensions.

Sir H. CRAIK

We voted against a particular Bill throughout, which we thought was based upon wrong foundations, which we thought very unjust and objectionable in its inquisitorial methods, and because we thought that a simpler and more logical system would have made it possible to get rid of these limitations and make the pensions universal. Now the right hon. Gentleman, who thinks we have been glad to forget our past, has stood up this afternoon and given us a complete scheme of universal pensions, with the safeguards which he suggests would prevent lavish or unprofitable expenditureߞa scheme which, for my own part, I think is worthy of the very greatest consideration, and which I should be very glad to see adopted.

Mr. BARKER

I wish to appeal to the Financial Secretary to give the wage-earners the benefits of this Bill. The idea of taking old men out of the labour market is a very laudable one, especially when you have a million men unemployed; but, before you can take an old man out of the labour market, he must have an income upon which he can live. I submit that a man cannot live to-day with any degree of decency on an income of 10s. per week plus an old age pension of 10s. Under this Bill, if a man earns 12s. per week, 2s. per week will be taken off his old age pension. If he earns 14s. per week, then 4s. will be taken off his old age pension; if he earns 18s. then 8s. will be taken off his old age pension, and if he earns £1 a week he gets no old age pension whatever. I submit that that is very unjust to the wage-earner. When I read the financial statement issued by the Chancellor of the Exchequer, I was filled with consternation. I could not believe it was his intention to treat the wage-earner in this way.

I should like to know, before this Debate closes, what is meant by earnings. Earnings, as they have been interpreted for many years under the Old Age Pensions Act, have been a disgrace to the Government. If a man has a garden, the produce of that garden has been taken as earnings, and his old age pension has been reduced in proportion to the value of the produce of his garden. The same thing has been done with the allotment holder, and with people who have kept a few fowls. The value of the produce of their fowls has been guessed at by the inquisitor, and the old age pension has been interfered with to that extent. I should like to know, before this Debate closes, what is to be the position of the wage-earner under this Bill. We have been told that earnings are expressly excluded from the Bill. If that be so, then these dastardly actions to which I have referred will be repeated again and again. I am profoundly disappointed that the Government have not given the wage-earners the benefit of this Bill. If a person has 15s. per week or £39 per year, as a result of thrift, his pension is not interfered with. Thrift has been glorified in this House during the past two hours, but I do not myself glorify any working man who has a poor income if he stunts his family in the interest of thrift.

I do not see that thrift can be exercised by the working classes on the income they have at the present time, and I am quite certain that when this Bill is passed, if it be passed in its present form, and goes to the constituencies, the Labour Members will have a very unenviable time with these poor people who are earning small wages at the present moment, because they will not get any benefit from the Bill. The same remarks apply to married couples. The most that a married couple can have in income is £2 per week If they have more than £2, they get no pension whatever. Under these conditions, the position of these people will remain, as it is now, perfectly intolerable, and I do hope, therefore, that the wage-earners will be given the benefit of this Bill.

Mrs. WINTRINGHAM

I wish to welcome the introduction of this Bill before the House to-night, but, like the right hon. Gentleman the Member for Spell Valley (Sir J. Simon), I feel that it does not go far enough, and I have, perhaps, the same criticism to make which has already been made by many speakers, and that is that the Bill has two defects. First of all, it still allows tine method of inquisition; and secondly, it does prevent people over 70 from performing casual labour unless they have something taken from their pensions. The details of the inquiries as to means are, to one who knows the forms, as I happen to do, very delicate for the applicants. They have a great deal of diffidence in answering the questions, and particularly, perhaps, Question No. 11, which is put in a very bald way, and says: How much money have you? None of us like to declare how much money we have, and the nearer it is to the border-line of poverty the less we like to declare it. I think a question of that kind has to be approached gently, and rather, I think in a tone of apology. Then, after the form is filled in, the pension officer has to make the same inquiry, and I desire to pay a tribute to the pension officers, who have a very difficult task to perform. I think that very often it is a sort of over-conscientiousness that makes them appear rather inquisitorial.

The applicants have to answer questions as to the profits they obtain, as the last speaker has said, from any small efforts of their own. They are asked, in the country districts, how many chickens they keep, whether they keep a pig, and as to any other earnings with which they are trying to eke out the small sum of money that they have. These questions are very vexatious, and I think the ap- plicants, who, perhaps, are generally people of very slender education, rather resent them, because they are very sensitive to the circumstances under which they are trying to live. Here is a rather typical case that came before me in my own constituency. Other Members, I am quite sure, have similar cases. This is the case of an old man of 76, who has not applied up to the present for the old age pension, but he feels now the pinch of poverty. All that he possesses in this world is a set of threshing machines. He has two sons, one of whom, with his wife, lives with him. This old man of 76 keeps no books; he cannot read; he can just get a living along with his sons, and he has very great difficulty in making ends meet

When he applies for the old age pension, the form asks what is his income. The matter is complicated, because, in houses like that of which I am speaking, the whole of the earnings go, as a rule, into the same common fund, and cannot be separated, so that his income is very difficult to determine. He is not himself capable of working; he possesses no money; he has no book debts, and his only possession is this threshing set. The value of the threshing set is, at the present time, about £400, which, at 5 per cent., works out at £20 a year, or 7s. 9d. a week. That is very detailed reckoning, and pension officers may very well differ in reckoning these assets. I cite thus just as one of the cases which present very great difficulty when the inquisition has to come along and find out exactly what money a man has. As long as we have any qualification at all, we are bound to have this inquisition. The pension officer does not want to be too inquisitive, but, because of his very duties, he has to perform this task, often from over-conscientiousness, in that way. The second defect in the Measure is that the earnings of people over 70 should be counted. We have the Report of the Departmental Committee on Old Age Pensions, which said: The inclusion in the pensioner's means, by which he may lose his right to a pension, of certain kinds of income injuriously affects thrift, benevolence and industry. Under the proposed Bill these earnings are counted before the pension is given, and it means that those are treated less generously who are thrifty than those who have saved. They are penalised in three ways. First of all, they must not accept charity, or it is counted against them, or help from their sons, daughters or friends. They are literally discouraged from working, and it is really penalising earning, and I think when the only income is the 10s. it is very hard lines, because 10s. is quite insufficient for a man or woman to live on. The total of this penalising is a loss of happiness, because no one likes to feel that he is not needed and there is a certain joy and happiness when these people arrive at old age to feel that they are still of some use in the world. I have seen it over and over again in the case of old men and women. Perhaps a woman is only able to do a little bit of crochet work, or can only take care of her grandchildren or keep a neighbour's house clean or do a little caretaking. It is the same with the man. An old man can do a little gardening and other little odds and ends, and it is a real detriment to him if he cannot express his desire for service, in doing work at that age. They are much happier at work, and there is a sense of independence and self-respect and they prefer to work as a rule rather than have people benevolent to them. They are also very valuable for the knowledge they have, because an old man or woman who has worked in industry may not perhaps have the physical strength to earn the actual money, but, at any rate, has knowledge which can be imparted to other people. The right hon. Gentleman the Member for Spen Valley (Sir J. Simon) expressed so well the desire of men and women to do this little bit of extra work and so add to their earnings. I call it earning for pleasure. Very often, by this little extra sum a man can buy his tobacco, or a woman a little bit of lace for frills, or a new cap, or a new garment by earning this little extra money. They feel they have earned it and they have a right to spend it as they wish. I think we all agree on the principle of giving old age pensions. It is a fearful prospect to think of old age and no adequate subsistence and, if only the Treasury could realise what the right hon. Gentleman suggested, if some plan could be devised whereby the Bill would be widened a little, it is not very much to ask and it would not mean a very great expense. Until we get conditions that these people have enough to live on, we feel that they should be allowed to earn a little in that way. We want to encourage working over 70 if it is not going to penalise them but is going to give them a little pleasure, and it leaves those who are most harassed by the inquisition in the same position. For this reason I beg the Treasury to consider the suggestion made by the right hon. Gentleman the Member for Spen Valley.

Mr. W. GRAHAM

The Debate was started by the hon. Member for West Woolwich (Sir K. Wood) and supported by others on the ground that the proposal we are now submitting was a departure from the pledges which we had given during Parliamentary elections and Motions which we have supported in the Chamber. I quite agree with those who suggest that is rather a barren controversy, for those who are by constitution rather cautious in debate are entitled to say that we have never suggested at any time that you could wipe out the whole of the means disqualification at one stroke, because that involves a very large sum of money, and we have been cautious to argue especially in existing financial conditions, that we can only proceed stage by stage. It is perfectly fair to ask whether, having regard to all the circumstances in which we found ourselves as a party financially when we took office, we have done all we could do at the moment. Be it remembered that over a very large part of the expenditure of the present year we ourselves had little or no control. The Estimates were settled before we came into office. We had to raise taxation to meet that expenditure, and, of itself, that, to a material extent determined the financial policy of the Government and its commitments during the present year. We have been five or six months in office, and, as a first step—because this was very clearly defined as an instalment by the Chancellor of the Exchequer—we are providing under this proposal approximately £4,150,000, rising rapidly in the next few years to nearly £7,000,000. It is a rather odd fact, and it reminds us very sharply of the great change that has taken place in national finance, that when the change we are introducing to-night is effected it will amount to rather more than the original estimate in 1908 for old age pensions as a whole, so remarkably have conditions altered during those years.

But I think we are also entitled to point out, though this is perhaps hardly strictly relevant, that during the same time and within this very financial year we are finding a sum of rather more than £600,000 for an improvement in the allowance of pre-War pensioners. So that taking the two sums together, there is £4,750,000 down, so to speak, in two spheres of pension administration, to say nothing at all, for the moment at all events, as to the sum we may have to find if we are able later in the year to embark upon a scheme of mothers' or widows' pensions. So, everything considered, I cannot help feeling that we have made on the whole a good beginning. No doubt it becomes all Governments to be modest in their statements, but when we look at existing financial conditions, when we remember the comparatively limited powers, from some points of view, which we possess, £4,750,000 strikes me as no ordinary achievement.

Sir J. SIMON

The hon. Gentleman says, "With the very limited powers he possesses." Surely he does not suggest that the fact that the Government for which he is speaking has a minority of the House supporting it is the smallest obstacle in the way of proposing more for old age pensions if he finds it possible to do so.

Mr. GRAHAM

No, that is not the point I have in mind. I was speaking almost entirely from the point of view of other financial commitments. I think that the £4,750,000 which we have found under the two heads was no ordinary achievement. We have made it perfectly plain that as regards old age pensions this is merely a beginning of a larger scheme. The hon. Member went on to suggest various alterations turning upon the position of aliens, the system of valuing property and other parts of what I would call the administrative structure. I made it clear on the last occasion that there is very real ground for criticising the existing system of valuing the property of applicants for old age pensions. As regards the position of aliens, there probably would be no tendency in any part of the House substantially to alter the conditions in that respect. As regards these two suggestions, and other suggestions which have been made, they fall within a scope wider than the terms of the Financial Resolution. I would point out that what the Government have had to decide was whether they would introduce a proposal merely to amend the scale of allowances and to get that through the House, or whether they should embark upon a wider Measure, which would open the door for all kinds of Amendments proposed by hon. Members in all parts of the House, which would necessarily involve a good deal of time and consideration. We were compelled to take the course that we have taken, and to introduce a narrow financial proposal. Accordingly, I entirely agree that this Bill is merely a repetition of the Financial Resolution, and I should admire the ingenuity and the genuis of any hon. Member who could put down an effective Amendment to this Bill.

The hon. Member for Kirkdale (Sir J. Pennefather) referred to the position of the 63,000 people whose pensions to-day are under the full amount, and he made a suggestion bearing on the detailed written reply which I gave in the OFFICIAL REPORT recently. I will not take time now to examine the proposal which the hon. Member made, but it is perfectly clear that it would involve a serious departure from what we have now in mind. As the scheme stands, it will bring the whole of the 63,000 old age pensioners who are not now receiving the full amount of old age pension up to the full amount of 10s. per week.

Sir J. PENNEFATHER

Is the hon. Member correct in that statement? Suppose these people are not receiving the full amount of old age pension on account of their earnings, the present Bill will not alter that.

Mr. GRAHAM

I am coming to the problem of earnings later. In so far as earnings apply in the case which, the hon. Member quotes that may be true, but in my later statement I shall show that it will be true in only a limited number of cases. The overwhelming majority of the 63,000 people who are now receiving less than 10s. per week will be brought up to the full pension. Not only that, but the Estimate which has been summarised in the White Paper shows that approximately 150,000 or 170,000 additional people will be enfranchised for the purpose of old age pensions. So that, on the whole, we can claim that a very large number of people are brought within the limits of what is, from the financial point of view, perhaps a narrow proposal.

I come now to the scheme adumbrated by one hon. Member, namely a proposal for a comprehensive scheme of social insurance. There is not the least doubt that a scheme of that kind makes a very strong appeal to a large number of Members, and, quite clearly, that is a matter which requires detailed consideration; but the fundamental difficulty which it raises is that of the contributory element. A certain part of our superannuation has grown up in this country on a noncontributory basis. There are other allowances, like old age pensions and the additional grants to pro-War pensioners, which are not strictly on the eleemosynary principle. That is, they are allowances which, perhaps from the highest point of view, have been earned from the State, but are not related to any contributory basis. On the other hand, there are all kinds of schemes in force which are strictly related to a contributory basis, and every student of this problem of social insurance, from Sir William Beveridge downwards, has quite fully recognised the difficulty of reconciling what has grown up so far with the comprehensive scheme which many advocates of that reform have demanded. I cannot pronounce on it, nor have I any authority to do so, on behalf of the Government, but I do say this, that, on the whole, I cannot believe that the change which we are introducing in giving these old age pensions, and the improvement that we have effected in the case of the pre-War pensions, will seriously militate against the success and effective character of any scheme of social insurance which may be introduced. When these changes come about we shall have to reconcile them in a comprehensive scheme, if the comprehensive scheme which we desire comes about. Perhaps I cannot be expected to give any further reply under that head.

Another hon. Member suggested that we should take the Income Tax limit as the basis of our proposal. His idea in supporting that scheme was that we should get rid of a good deal of the investigation which is now necessary. I am not quite sure that that would be the case, but in any event there are two substantial difficulties as far as the Income Tax limit is concerned. The Income Tax limit is a fixed amount only nominally and on paper. In practice it varies or fluctuates with the different conditions of individuals with or without families and homes. There would be a great deal of administrative complication in taking the Income Tax basis. Quite apart from any difficulty which attaches to the Income Tax basis on the administrative side, the cost of it to my right hon. Friend would be prohibitive. We have tried to make it clear that on that footing, the cost would be only £3,000,000 less in the first year than the cost of the total removal of the means limit.

That is to say, while the immediate removal of the means limit on old age pensions would cost £18,000,000 in the first year, the adoption of the Income Tax basis, which would be approximately £150 or a little less in the ease of a single individual and £250 or less in the case of a married person would mean a cost in the first year only £3,000,000 less than the cost of the total removal of the means limit. That large sum would rise rapidly in very much the same kind of proportion as the smaller sum which we now propose will rise, because of the increased numbers of old age pensioners who will be with us at a comparatively early date. I think I have said enough on these two parts of the discussion to indicate the very substantial difficulty with which the Chancellor of the Exchequer is confronted.

I come now to deal with two points which were raised by my right hon. Friend the Member for Spen Valley (Sir J. Simon), the hon. Member for Dundee (Mr. Scrymgeour), the hon. Member for Louth (Mrs. Wintringham) and others. They turned, in part, upon the question of earnings, as affected by the proposals of the present Bill, and also in part upon what is called the inquisitorial investigation into means, and the right hon. Gentleman made a suggestion of a somewhat complex character, which raised, as I am sure he will agree, far-reaching issues lying far beyond the confines of this Bill. It is true that when the Chancellor of the Exchequer made his proposal to the House he very definitely said that he did not want to encourage old people over 70 years of age to be engaged in work.

Major MOULTON

This equally penalises the earnings of a wife, who may be 20 years younger than her husband. Is it suggested that a woman of 50 should not work to help her husband?

Mr. GRAHAM

If my hon. and gallant Friend will leave detailed points like that to the Committee stage of the Bill, we shall be able to show that a great many of the difficulties which hon. Members have in mind can be settled.

Sir J. SIMON

Will it be in order for the hon. Member to move an Amendment?

Mr. GRAHAM

If the hon. Member moves an Amendment which does not increase the charge, I have not the least hesitation in saying that it will be in order. On this question of earnings, it is true that the Chancellor of the Exchequer indicated that it is no part of his intention in the least to encourage work by people over that age. I agree that that is a debatable proposition, but I do not suppose that my right hon. Friend would deny that for a moment. Undoubtedly there are certainly hardships falling on old people with which we are familiar, more particularly in industrial, and also in agricultural areas in this country. But where the old age pensioners are able to work, the problem would be solved very largely. If they are able to work, the income flowing from that would tend to increase the amount of their income up to the income limit. The problem turns far more, closely upon those casual earnings which are got by large numbers of old people, and it is mainly on that point that I would say a word or two. A great deal turns upon the definition of "earnings." May I make the plea that under the scheme we have in mind there would be a very definite effort to draw a distinction between earnings, in the sense of what are strictly attributable to the labour of the individual, and those earnings which may be regarded as a kind of award or return for past services

Certain Members in the course of the Debate have indicated the case of old age pensioners who are in a small occupation, who help in a shop, or who are otherwise engaged in some form of casual employment. I should think that it will be quite easy within this scheme to draw such a distinction as will secure the great bulk of the benefit for old age pensioners in that position. Some hon. Members have suggested, inside and outside the House, that persons in the position of those whom I have just described might enjoy the benefit of the 50 per cent. allocation as between what is attributable to earnings in the strict sense, and what is a mere return on capital. I ought to warn the House at once against the difficulty of making a precise allocation in that way. A great deal will depend on the individual merits of each case. Generally I am advised that there will be a very sincere effort on the part of the pension officers, and also on the part of the pensions committees in the district, to which, after all, these applications go for determination, so to interpret that as to confer the greatest possible part of this benefit upon the old age pensioner.

Mr. PALMER

Would you, under the rule, interpret the rent of the house or the value of the house in which these old people were living as coming within the category of earned or unearned?

Mr. GRAHAM

In that case, without giving a final or precise answer, they will get the benefit of the increase of the allowance to 15s. over and above the existing figure, and I think that if inquiry be made into the value of maintenance and the occupation of a house that difficulty will very largely disappear. The right hon. Gentleman passed from that to a criticism of the inquisitorial investigation, as it is described. I do not propose to-night to restate the argument that if there is to be a means limit at all it is generaly recognised that there must be an investigation of some kind, but I do hope to convince the House that with the scheme which we propose there is bound, on balance, to be less investigation than there is now. I may give one or two reasons in support of that contention. The House will remember that under the scheme, as it stands now, it is necessary for pension officers, because of the comparatively smallness of the allowance, to look into every small and trifling items of income which the pensioners enjoy, but when it is remembered that the central part of our proposal is that in the case of the individual applicant, an extra allowance of 15s. per week is to be made in making the calculation in favour of the pensioner, all those familiar with the social conditions in industrial and agricultural areas will agree that, having regard to the higher limits which are now being given, it will be perfectly plain to the pension officers and others that detailed and meticulous investigation such as is now often necessary will no longer be required. Accordingly, to that extent the inquiry is very largely reduced.

My right hon. Friend sets against that what he conceives to be a new inquiry in the shape of an inquiry into what is earned under the proposals which we now submit. Already, in the operation of the existing scheme, it is necessary to know what is the source of income. I cannot believe that in practice you are going to add substantially to the inquiry that you are now making, and in any even I have no doubt that, on balance, under our proposal, the investigation will in practice be reduced. But so long as any income limit remains at all investigations must take place. I am advised that it will be the aim and effort of the officers to carry out that investigation is as sympathetic a spirit as possible I have often paid a tribute to them far the way in which their duty is discharged. Any person over 70 years of age, at the end of a long, harassing and industrious life, does resent question about means. Very often these people, through no fault of their own, find it difficult to make a return or to answer the simplest question. Moreover, in many cases it is very difficult indeed to arrive at the facts as regards birth and the rest. No one who has served on a pensions committee will dispute that the officers, in the majority of cases, take very great care to build up a case, in so far as it can be built up, for the applicant, and in all the cases of complaint which I have personally investigated, I have found that for the most part they turn upon some thing which the old age pensioner quite naturally resents, but which, I am afraid, is inseparable from any scheme so long as the income limit remains.

Mr. EDMUND HARVEY

Is it intended to issue instructions to the pensions officers to carry out their inquiries in future in the spirit which the Financial Secretary has indicated?

Mr. GRAHAM

There is no need to issue instructions of that kind. [HON. MEMBERS: "Yes!"] I am quite willing to bring this matter to the notice of the old age pensions officers of the country. I do not dispute that there has been ground occasionally for complaint. I have only stated the result of my experience in the overwhelming majority of cases which I have personally investigated, both before and since I held my present office. The right hon. Gentleman made a suggestion which he thought would reduce the difficulty as regards the inquiry. It came broadly to this: That the applicant should execute a disclaimer, which would afterwards operate as a power of recovery against his estate for such amount of old age pension as had been wrongly paid. I cannot give the House the legal details of such a proposal. But it is clear that the difficulty would arise only after the death of the individual. Secondly, there must be this difficulty, that so long as the income limit remains at all there might be all kinds of fluctuations of income and resources up to the time preceding the death of the recipient. I am not quite clear as to how that difficulty is to be met. Without pronouncing further upon the proposal, I do not think at the moment that it is one which we can adopt at this stage, but I entirely agree that any proposal, put forward from any part of the House, which will reduce the administrative inquiry and thereby reduce the cost and facilitate the grant of pensions, is worth investigation. Accordingly, within the next week, before the Committee stage, I undertake to make further inquiry upon the suggestion and to give a more detailed reply then. I appeal to hon. Members in all parts of the House to give a Second Reading to this Bill, not because we believe it to be the final stage on the road of reform, but because it is one instalment of what we propose to introduce from time to time for those who, after industrious effort, have reached the eventide of life.

Mr. STURROCK

I have listened with very great interest to the speech which has been made on behalf of the Government. The Financial Secretary to the Treasury and I are very old colleagues in the matter of dealing with pensions questions of all sorts, but I take the liberty of saying that I am profoundly disappointed with the statement which he has just made, for this reason if for no other—many reasons could be enumerated—that any Member of any party, except the Labour party, might express disappointment this evening on the attitude of the Government towards this Bill. I will refer only to the inquisitorial methods which are supplied to old age pensioners in all parts of the country. I did indeed hope, altogether apart from party polities, and on this I appeal to hon. Members above the Gangway as I do to Members in every part of the House, to agree with me, that too much inquisition applied to the application of the Old Age Pensions Act—

HON. MEMBERS

Who imposed it?

Mr. STURROCK

What does it matter now who imposed it? Let us deal with the thing as a living fact in the lives of the aged and poor people of the country, and, for Heaven's sake, let us try for one moment to escape from party politics altogether! I appeal to hon. Members to agree with me that there is ample machinery in every form, and that, if properly applied with some imagination on the part of the Financial Secretary to the Treasury, it would provide all the inquiry that it is necessary to make of applicants for old age pensions. What happens now? I cannot give the exact figures of all that is spent on old age pensions, but I know very well that a great deal of money is spent every year in Scotland on the travelling expenses, salaries and all the extras which go to make up the expenditure in travelling round the country and inquiring into the case of every pensioner in every parish in Scotland. I respectfully submit to the Financial Secretary that he could get over all the difficulty of meeting those cases, and that he could introduce a much more humane method of dealing with them, by appointing either a clergyman or a justice of the peace or an organisation or society in the neighbourhood to inquire into the case of any man or woman who applied for the pension. He could thus ascertain in a much more humane way than the present the rights or wrongs of any case that was in question.

I was one of those who imagined that when this Government came into office we were at last going to see an end to all bureaucracy and officialism. What does one find? The Financial Secretary, for whom I have the highest regard, seems to be disappearing beneath a sea of bureaucracy. I appeal to him—it may be a dying hope—to strike to get rid of those influences which I feel certain he is bound to encounter at the Treasury or elsewhere, if he goes higher, as he undoubtedly will. I ask him to try to bring into the administration of old age pensions a different spirit and that feeling of humanity which he has advocated on behalf of his own party in the past, and which I have tried to advocate on behalf of my party. I ask him to introduce new ideas of administration and to take people on credit more than has been done in the past. I object completely to the system which prevails to-day, and I protest against this Government or any Government continuing methods of administration which I am sure are repulsive to the feelings of Members of all parties. I hope my hon. Friend the Financial Secretary wilt consider the suggestion that something might be done to work the administration of these pensions on the lines indicated—by receiving on behalf of applicants statements from clergymen, justices of the peace or other persons whose names and whose work qualify them to give such recommendations. This Bill is a very short one and I think it is a very bad one, because it continues the conditions as to the means, with the provision that they shall be calculated after deducting therefrom such part, if any, thereof, but not exceeding in any case £39, as is derived from any source other than earnings. I wish to score no points against the Labour Government. I have been in politics long enough to know that no party which gains power ever fulfils all the obligations which it is under to those who have supported it in the country. This Government is the last example of that, and there never was a greater example. The promises made by my own opponent and by others who came forward on behalf of the Labour party at the last Election were such that it would have been very difficult, in that particular respect, to defeat them. Here we have an opportunity of implementing the promises which were made on every platform in the country. I am not specially singling out the Government, because on this matter of old age pensions all parties were committed to making the widest extension possible of the scheme. It was almost universally agreed that old age pensions should be accorded to anyone at the age of 65 or 70 who cared to make application, but this Government has not only maintained the inquisitorial machinery set up when the Act was first passed, but has continued to make all sorts of reservations which I personally deplore, and which I feel sure hon. and right hon. Gentlemen on the Treasury Bench themselves deplore.

9.0 P.M.

Mr. T. HENDERSON

I desire to bring to the notice of the Financial Secretary a point which has not been mentioned during this Debate. I under stand this is a Bill which seeks to remove certain disqualifications. May I remark, in passing, that every opportunity was given to both Liberals and Conservatives to remove them long ago. I wish to refer to one particular disqualification: It is a disqualification which affects an aged couple who have reared a family, when through economic pressure or a desire to better themselves that family cross the seas and take up residence in some distant part of His Majesty's Dominions. The old couple naturally desire to end their days with their children in that far off country, but in order to do so they must sacrifice the old age pension. I understand that service pensioners have had extended to them the right of receiving their pensions in any part of His Majesty's Dominions and, if that be the case, I ask the Financial Secretary to consider the possibility of continuing the payment of old age pensions to those old people who may take up residence in any of the Dominions or Colonies. I have received many letters upon this subject showing that there is a real hardship involved. These old people do not desire to go abroad if it means the loss of the pensions; yet there is a craving in the hearts of old men and women not to be separated from their children, and it would be a great benefit to them if the Government introduced a Clause which would allow of the continuance of pension in the circumstances I have mentioned. I think everything that could be said on the subject of pensions, apart from this, has been said in this Debate over and over again, and I am not going to attempt to repeat it, but I press upon the Government the necessity for some such reform as I have indicated.

Major MOULTON

I want to raise one point on this Bill in regard to the penalisation of earnings. An old age pen- sioner over 70 may have a wife 20 years younger than himself, a woman of 50, but for her there is no relief, and I think the Government might explain under what great moral principle they say that if a pensioner and his wife have an annuity left to them, that ought not to be taken into account for pension purposes, but that if a woman of 50 goes out and tries to do a little work to improve their position, that is a thing for which no relief can be given. I honestly say that, before this Bill had been introduced, if anybody had suggested that a Labour Government could so penaiise earnings as compared with unearned income, I do not think I or anybody would have thought it possible.

Major HORE-BELISHA

I do not think it is right that this Bill should go through without strenuous protest. It inserts into our law a thoroughly harmful and vicious principle. It penalises, for the first time, earnings. Take the case of a man who may be beating a carpet in his back garden. You will have to have inspectors sent down by the Treasury to discover whether the carpet he is beating belongs to him or somebody else. That is the kind of principle that the Government are introducing into our law. The inquisition is Spanish enough as it is, but it is being made far more rigorous and inexcusable under this Bill than it has ever been before. It is no exaggeration to say that the old age pensioner is going to be put upon the rack. The hon. Member for West Woolwich (Sir E. Wood) called attention to some of the pledges given by the Socialist Government previous to the last Election, and I really think it is most relevant to call attention to those pledges, for this reason, that those pledges have not ceased with the entry into office of the Labour party. Representatives of the Government are still going up and down the country proclaiming that they are the only people in the world who can do anything far the old age pensioners. Again, the pledges are relevant for another reason, and that is that the Chancellor of the Exchequer ventured to justify this Bill on the ground that it was a fulfilment of pledges. Had he not done that, there might have been some excuse for him. If he had been frank enough to come here and say: "This Bill does not implement the pledges which we gave, but, nevertheless, it is the most that we can do," there would be some excuse for him. But he said: The Financial Resolution which I now submit to the Committee is in fulfilment of pledges which have been given by all parties in this House. He proceeded to give the pledge that was given, for instance, by the Labour party, which begins in this way, that when the Labour party gets into power it will take care that little children shall not needlessly die. What the precise relevance of that remark is, I have thoroughly failed to understand after mature consideration, and I want to know when a Bill is to be introduced that is going to prevent this species of murder, and I want to know whether in the Schedule of that Bill measles is going to appear as one of the justifiable causes of death. At any rate, ran the pledge, little children shall not needlessly die;….it will make generous provision for the aged people."—[OFFICIAL REPORT, 25th June, 1924; col. 468, Vol. 175.]

Mr. DEPUTY-SPEAKER (Mr. Robert Young)

I do not think we are called upon to discuss the position of children on this Bill, which has to do with old age pensions.

Major HORE-BELISHA

I had already passed, by somewhat rapid transition, from the children to the old age pensioners, and I was merely quoting from a speech made by the Chancellor of the Exchequer in justification of this proposal. He also read the pledges of the Liberal party, which, according to him, were that the thrift disqualification attached to old age pensions should be immediately removed. This Bill is not removing it, and, therefore, it is quite disingenuous of the right hon. Gentleman to pretend that by this Bill he is giving expression and fulfilment to the pledges given, either by his own party or the Liberal party, in regard to old age pensions. So insistent was he upon this point, that I would remind the House that he also said: The proposal that I am now submitting to the House fulfils, amply fulfils, generously fulfils, the pledge that was given by the Prime Minister in the quotation that I have just read to the House. Not content with that, he ventured to stress it by saying: I submit that this is a fulfilment of the Government's pledges, and it is a fulfilment of the pledges of the Liberal party. It is a fulfilment, an ample fulfilment, of the pledge given by the Unionist party at the last Election."—[OFFICIAL REPORT, 25th June, 1924; col. 477, Vol. 175.] Any Chancellor of the Exchequer who justifies a proposal of this kind upon a ground such as that lays himself open to the charge that he is not expressing veraciously what are the facts. The facts are these, that in 1921 the right hon. Gentleman who is now the Secretary of State for the Home Department moved a Resolution in this House, as follows: That, in the opinion of this House, the recommendation of the Departmental Committee on old age pensions in favour of the repeal of the provisions in the Old Age Pensions Acts as to calculation of means should be adopted and the Old Age Pensions Act amended accordingly, thereby enabling applicants for and recipients of the old age pension to derive the full benefit of their thrift and personal provision for old age and to receive assistance from friends, employers, and organisations without reduction of or disqualification for the full pension. That was the pledge given by the Socialist party, and if they were prepared to vote for that principle before they came into office, it is, according to all the principles of morality and honour, as I understand them, their bounden obligation to fulfil that pledge. The right hon. Gentleman who is now the Home Secretary, in moving that Resolution, made some remarks which are of the highest interest, because they are a complete answer to such remarks as were made by the Chancellor of the Exchequer in introducing the Financial Resolution. He said: The purpose of the Motion is to remove the means limit which at present stands in the Pensions Act of 1919. If the Motion is accepted, the amount of the pension and the qualifying age will remain unchanged.… The case for universal pensions appears to me to be…as a citizen's right. It should not be subject, as unfortunately it is to-day, to any poverty test, or lead to any inquisitorial investigation. Moreover, I consider that the retention of the means limit is really indefensible. The Chancellor of the Exchequer said that the means limit could not be logically removed at all, and he suggested that it would be quite possible to remove it. The right hon. Gentleman who is now Secretary of State for the Home Department said that its retention is entirely indefensible, and that experience goes to show that it operates with the greatest possible harshness against many of our best citizens… Possibly the only doubt existing in the minds of most hon. Members will be as to whether, under existing circumstances, this sum can be raised. I venture to remind the House that the cost of our armed forces has gone up from £86,000,000 in 1913 to £269,000,000 in 1920, and I need not say the money has been raised."—[OFFICIAL REPORT, 11th May, 1921; cols. 1979 and 1983.] The cost of these armed forces has now decreased, and would have decreased still further had the Socialist party not thought fit so far to sacrifice their principles as to find work for the building of cruisers. I was quite prepared to support them in the building of those cruisers, and I did support them.

Mr. DEPUTY-SPEAKER

The hon. Member is rather wandering away from old age pensions.

Mr. WALLHEAD

Is it your opinion, Mr. Deputy-Speaker, that the hon. Gentleman will begin to believe in himself if he talks long enough?

Major HORE-BELISHA

Is it your belief, Mr. Deputy-Speaker, that the hon. Gentleman will be able to make a joke if he tries long enough? In a discussion of this kind, when hon. Gentlemen have said so much in their constituencies—

Mr. WALLHEAD

And you have done so little in your party.

Major HORE-BELISHA

My hon. Friend says we have done so little. We could not have done more than introduce these pensions, and it is perfectly ridiculous to endeavour to deny the Liberal party credit for having introduced old age pensions. They were then 5s. They were increased to 7s. 6d., and, subsequently, to 10s., and I venture to say it is absolutely no reproach to us that we did do something, and we did as much as we were permitted to do at the time. The point I was making was that hon. Gentlemen who sit upon the Socialist Benches went down to the constituencies, and still go down to the constituencies, and say that they are the only people who ever did anything, or ever will do anything for old age pensions. I only referred to the cruisers, because they did not promise to build cruisers, and they did build them. The right hon. Gentleman, in saying that the means limit retention was absolutely indefensible, was supported in the Lobby by the Lord Privy Seal, the Postmaster-General, the Secretary of State for War and the Chief Labour Whip. Either they meant what they said, and meant to bear the consequences of their action, or they did not. If they did mean to bear them, they are in justice and honour bound to carry out their pledges to the full, quite irrespective of the cost, because the cost was an element they dealt with in their speeches. If my own party had so disgracefully, so inexcusably and so villanously broken their plighted word, I should not have hesitated to stand up and say what I thought about it.

It is about time that the electioneering methods that are adopted by my hon. Friends who now form the supporters of the Government were reconsidered. There can be no ground whatever for deluding people—and old people—into believing that their good fortune depends upon the election of a particular party. In the year 1922, Mr. Myers, who was then Member for Spen Valley, moved precisely the same Resolution which the Home Secretary moved the year before, and he said: In a word, we would make the birth certificate of the applicant for an old age pension the sole test upon which the decision is made. The Chancellor of the Exchequer, speaking here last week when introducing the Financial Resolution, said there was no alternative between doing what he was doing, and creating universal pensions, under which system a birth certificate alone would entitle a man to a pension, which would be a ridiculous and illogical system, and would compel him to give pensions to dukes and lords. But when it came to a Motion of this kind before the right hon. Gentleman was in office, the whole Socialist party went into the Lobby in favour of making the birth certificate the test. [Interruption.] Personally, I am prepared, and I am sure the whole of the Liberal party is prepared, to carry out what it said. What is the use, year after year, of moving Resolutions of this kind, and using strong language of this kind deprecating the action of other parties, if there is no honest intention whatever to do what you say? It is a perfectly serious point, although it seems to amuse my hon. Friends. They have got the cash, and they are prepared to let the discredit go. "We shall be told by the Government," said Mr. Myers in moving his Resolution, "that there is any amount of sympathy for this proposal," and no one could express it more eloquently than my hon. Friend the Financial Secretary to the Treasury. [HON. MEMBERS: "Divide!"] It is a most extraordinary thing that my hon. Friends say the most bitter and the most unkind things about their opponents, and yet cannot stand criticism for one moment.

Mr. DEPUTY-SPEAKER

I think if the hon. and gallant Member would address his remarks to me, he would not be interrupted.

Major HORE-BELISHA

I think, Mr. Deputy-Speaker—[HON. MEMBERS: "Divide!"]—that hon. Gentlemen who address such unkind and such venomous remarks to Members on these benches should have the courage to listen, and not be so anxious to move the Closure, in order to avoid the inevitable necessity of hearing what other people think about them.

Mr. DEPUTY-SPEAKER

I must ask the hon. Member proceed with his speech.

Mr. RICHARDSON

With all respect, I submit that the interjection "Divide" is not disorderly or out of order.

Mr. DEPUTY-SPEAKER

I have asked hon. Members to allow the hon. Member to proceed with his speech.

Major HORE-BELISHA

I will read an extract from a speech made by a colleague of my hon. Friends who support the Government, upon a Resolution which called for the immediate and entire removal of the means disqualification. I know that my hon. Friends are most anxious not to take their medicine, but, as long as you will allow me, I shall go on. I promise that my speech shall not be of more than two hours' duration. There is no obstruction whatever. We shall be told by the Government that there is any amount of sympathy with this proposal, but there is no money to back it. We cannot accept sympathy without something, behind it. Sympathy is useless unless backed by something of a substantial character. I am not going to accept any argument advanced from the point of view that we cannot find the money, while we are able to point to avenues of expenditure of a much less desirable kind. I decline to listen to any argument which is supported only by the statement that no money can be found for this purpose. In support of these pious principles, the right hon. Gentleman the Secretary of State for Scotland went into the Lobby, and was followed by the Parliamentary Secretary to the Admiralty, and the Lord Privy Seal, and not least, by the hon. Gentleman who is now Financial Secretary to the Treasury and is so eloquent in his arguments opposing the principles he formerly advanced. The Postmaster-General and the Home Secretary, and a large number of other Ministers and their satellites went into the Lobby, including the Secretary for the Colonies and the Secretary of State for War, and the Chancellor of the Duchy of Lancaster. I do not see in the list the First Commissioner of Works, but the Minister for Overseas Trade was there, and a very large number of others. Indeed, I see all who were members of the Socialist party in those days.

Precisely the same Motion was moved again in the following year, 1923, and similar remarks were made in favour of the total abolition of the means limit, which was characterised by the hon. Gentleman who moved the Motion as an "objectionable method to which no hon. Member of this House would submit," and on that occasion practically all the right hon. and hon. Gentlemen who now sit on the Front Treasury Bench went into the Lobby in favour of that Motion. Even the Prime Minister of England has supported the total and immediate abolition of the means limit, and it is therefore, in my estimation, quite inexcusable for the right hon. Gentleman the Chancellor of the Exchequer to come down to this House and say what he did say, namely, that this Bill fulfils every pledge that has been given by the Socialists and every other party. That is the point that I am making. If the right hon. Gentleman has the frankness to say: "It does not fulfil it, but it is the best I can do," everybody would have sympathy with him, but he absolutely says that this is a fulfilment, and a complete fulfilment, of every promise and undertaking ever given by the Socialist party. He knows perfectly well, and I have demonstrated, that it means nothing of the kind. I am not like the hon. Member for Gorbals (Mr. G. Buchanan) who bitterly attacks his Front Bench one day, and gets up and pats them on the back another day. I have some consistency. I do attack his Front Bench, and I shall continue to do so. I do not blow hot and cold. He is one of the most moderate extremists that has ever been in this House, and one of the least courageous. Extraordinary statements were made by the Chancellor of the Exchequer when he introduced the Bill into the House, and one of the most extraordinary ones was: "I do not think it right to do anything to encourage earnings by individuals above 70 years of age." In the course of this speech he referred to the Report of the Departmental Committee on Old Age Pensions, and it so happened that that Committee, under the heading in its Report of "Industry" said—[HON. MEMBERS: "Divide!"]

Mr. DEPUTY-SPEAKER

I call on the hon. Member to proceed with his speech.

Major HORE-BELISHA

My hon. Friends are so afraid of hearing the truth that they keep up a constant interruption, which only gives me an extra stimulus. We believe with many witnesses"— says the Report— that the old people themselves are likely to be healthier and happier when engaged in suitable occupations than when induced to live in idleness. Now you have it on the authority of the Chancellor of the Exchequer that he does not think it right to do anything to encourage earnings by individuals above 70, and I have no hesitation in asserting that to take away from the old men or women their habit of earning their livelihood, is tantamount to sentencing them to death. There is no question about it. They have been accustomed all their lives to work. Under a principle such as this, Mr. Gladstone could not, in his latter days, have been Prime Minister of this country, and if one pauses to read history, one would see that a great deal of most valuable work has been done by men who were over the age of 70 years. Why one should inaugurate in this century a principle which penalises them and is virtually sentencing them to death, I cannot understand. Nor is the State going to benefit by a system of this kind, because it is simply an invitation to the person who is earning money to go to his employer and say: "You give me that money as a gratuity and the State will replace it by an old age pension." It is not going to save one penny. Even if the inclusion of earnings were tantamount to giving a universal old age pension, any hon. Member who looks at the number of people over 70 years of age, and the difference between those numbers and those who are actually going to get a pension under this system will see that the increase of numbers consequent upon giving the old age pension to everybody will be so infinitesimal as to make the cost perfectly negligible.

I want to know what progress the Government have made into their investigation of a comprehensive scheme of old age pensions. The Departmental Committee proposed an old age pension at the age of 65, and it did not go far enough for some right hon. Gentlemen who are now sitting on the Front Bench. They issued a Minority Report, urging that pensions at the age of 65 should be immediately put into operation "this autumn." That was the autumn of 1919. I want to know what progress the Government has made in its consideration of this Report. There is only one way of facing the cost of this scheme, and that is by an all-in insurance scheme, which is to cover the widow, and those who have accidents, and the old age pensions, and those who suffer financial loss, from whatever cause. The House has a right to know the progress of the investigation, because it is only when such a scheme is provided that people will get pensions at 65, and the means limit will be abolished. I have had a very courteous hearing from this House, but I think it only right that, when a Government which is so debased as to claim that it has implemented and satisfied pledges when it has done nothing of the kind—I think it is only right that it should be reminded of the fact by hon. Members who are sufficiently interested to point it out, on behalf of the old people that it has done nothing of the kind.

Mr. B. TURNER

I want to support the Second Reading of the Bill and to appeal to the House to accept the advice of the right hon. Member for Spen Valley (Sir J. Simon) and of the hon. Member for Woolwich (Sir Kingsley Wood), both of whom are evidently in favour of abolishing the means limit completely. Their speeches this afternoon certainly were in that direction, and so was the speech of the hon. Gentleman who last addressed the House. I feel therefore that the Financial Secretary to the Treasury should accept their suggestion and abolish once and for all the means limit. All sides of the House are agreed upon that, and if hon. Members are really honest in the speeches they have made then I think our Front Bench should accept their offer. But why, when the Financial Resolution was under discussion, did not hon. Gentlemen make this proposal? I would gladly welcome our Front Bench taking the bold step which has been suggested and telling the Super-tax payers, both Liberal and Conservative, that they will have to bear the burden. Let us have a compulsory scheme of old age pensions at 70 or 65. After all this idea of old age pensions did not drop like manna from the heavens: it was spoken of in the market place by Labour speakers long before it was introduced in the form of legislation.

Major HORE-BELISHA

And the Liberal party in the first place criticised it on the ground that it did not abolish the means limit.

Mr. TURNER

The hon. Gentleman has been trying to give castor oil to hon. Members on the benches around me, but now he cannot himself take senna tea. I am certain that if we get an intimation from the leaders of the Liberal and Conservative parties in favour of the abolition of the means limit the Labour Government will welcome it. I have not changed my views for the last 40 years. I have always held that there should be a non-contributory scheme of old age pensions at 65. The present inquisitions are devilish, and I hope our leaders will be courageous enough to accept the offer of the other parties to abolish them.

Mr. FOOT

I only intervene because of the speech made by the hon. Gentleman in charge of the Bill to-day. He was speaking on a point raised again and again, namely, the question of earnings and the inclusion of earnings in the calculation made for fixing the amount of pension. The hon. Gentleman said that the officers and the local committees would be instructed to place the most favourable interpretation on the word "earnings." I think that those who serve, or have served, on old age pension committees will be of opinion that there is no agreement at all between the Government officer and the local committee. The local committee is generally very desirous of securing the pension for the applicant, while the officer, in pursuance of his duty, is very much more careful in his inquiry and much keener in his interpretation of the existing law. What I wish to know is this, whether we are to rely simply on the instructions sent out both to the committees and the officer to put a liberal interpretation on the word or whether something could not he inserted in the Regulations, or in this Bill by way of preference, to ensure that the interpretation of the word shall he liberal in the case of these old people. This is a very short Bill, but in the first Clause in which reference is made to "earnings" surely it would be possible to have some definition of the word inserted, so as to go beyond the present limited interpretation too often imposed.

I believe the hon. Gentleman sought to distinguish between different kinds of earnings. He said there would be two kinds of earnings brought under the consideration of the Committee. Would it be possible, although the Financial Resolution has been passed to amend this Bill by so defining the word as to allow a wider and more generous interpretation to be applied? I hope that when that discussion does arise in the Committee there will be no restrictions on hon. Members, and that we shall not be thrown back merely on the terms of the Resolution. Will it be possible to further consider the point raised earlier in the Debate and accept from these old people the same declaration as is accepted from Income Tax payers. That point was raised in the course of the Debate on the Financial Resolution. When we are dealing with millions of money and with people in a very much more fortunate position than these pensioners, and much more qualified to make returns, we make no inquisition in the first instance; we simply say: "Give us a return of your income and we will base our assessment upon it, but if we find you have been guilty of fraud we will punish you for it."

Mr. CASSELS

It is all very well to make a return of income, but the employer has also to say what he pays his employés, and there is a check in that way.

Mr. FOOT

There is no check on the employer, but if in the course of his return he is found guilty of fraud he is punishable. In many other cases we do accept returns. When the pensions were increased under the Act of 1920 we accepted from the people who applied for the increase, a declaration as to their need. Why cannot we rely on the genuineness and honesty of these people and accept from them a declaration, rendering them of course liable to punishment in the case of deliberate fraud? That will do away with the necessity for the inquisitions. It will make the pension more acceptable to the recipients, and I hope therefore we may have some assurance that the Bill will be altered in this direction, so as to get rid of these aggravating inquiries which make the old age pension far less of a concession than it should be in the minds of the people. I have only one last sentence. I hope the Government in the definition will have some regard to the point raised by the hon. Member for Salisbury (Major Moulton), and that we may be able to exclude from the Bill the earnings made either by husband or wife if they are below 70 years of age. I understand those are excluded now by the terms of the Resolution who are over 70. But if the husband of a pensioner is himself under 70, or the wife of the pensioner is herself under 70, surely the fact that he or she is going on earning ought not to be taken into consideration.

Sir K. WOOD

That would increase the cost.

Mr. FOOT

I am not sure it will. I hope, however, that point will be raised, as it has been raised in debate, and considered in Committee and I hope if it is, that the Chancellor of the Exchequer, as I am sure will be the case with my hon. Friend opposite, will give the matter their sympathy.

Question, "That the Bill be now read a Second time," put, and agreed to.

Bill read a Second time.

Bill committed to a Committee of the Whole House for To-morrow.—[Mr. W. Graham.]