CLAUSE 1.—(Contributory Pensions for Widows, orphans and persons between the ages of 65 and 70.)

HC Deb 30 June 1925 vol 185 cc2253-91

Mr. LEES-SMITH

I beg to move, in page 1, line 8, to leave out the words "the payment of contributions (including ".

4.0 P.M.

The purpose of this Amendment is that we may at the very beginning of the Committee discussion challenge the whole principle of contributions for pensions and summarise the objections that we have against them. The Order Paper is full of Amendments which will occupy many days calling attention to the innumerable anomalies and harshnesses which this Bill contains, and to its unjust treatment of large minorities among the contributors to the Bill. Throughout these debates we shall point out again and again that the injustices and the anomalies we are complaining of arise fundamentally from the contributory principle which is at the heart of the Bill. As a matter of fact, the main evil in this Bill is due to the Chancellor of the Exchequer. At the period when he decided that, as a preamble to this Bill, he would reduce the Income Tax and the Super-tax of the comfortable classes by £42,000,000, this Bill was committed to a series of harshnesses and anomalies which will create disappointment and disillusion among the masses of the people when the Bill is understood. The Minister of Health, during the course of the Second Reading Debate, argued that to have put this Bill upon a. non-contributory basis would have been a financial impossibility. I am not going to enter at length into the various figures which he gave, but his figures are disproved by the main summary in the Actuary's report on page 24. That table, with which of course the right hon. Gentleman is familiar, shows that the contributions paid by employers and employed under this Bill, which we say should be paid by the State, in the first full year will amount to £22,000,000; 20 years hence they will amount to £36,000,000, and in the last year of which the Actuary takes any account at all they will amount to £42,000,000. That justifies our contention that there would have been no need for the contributory system at all if the Chancellor of the Exchequer had left the Income Tax and Super-tax where they were, and had used this £42,000,000 for the purposes of this Bill.

The Minister of Health, in the Second Reading Debate, argued that this Bill, with its contributory principle, would encourage thrift and foresight among those who partake of its advantages. This argument that a compulsory system of contributions encourages thrift appears to me the plainest fallacy. Thrift is a voluntary institution. Compulsory thrift is no thrift at all, and to impose compulsory contributions in the name of thrift is merely to impose a form of taxation. These contributions are a form of taxation, and the contributions of the workers are simply a poll-tax, such, I believe, as is still maintained in Kenya for the sake of African natives, but which has long been abandoned and obsolete in the financial system of this country.

Then you come to the contributions that are to be paid by the employers. I have not yet heard any answer from the Government Bench to the arguments which have been adduced against that system. What do they mean? Our contention is that this money should have been provided by the Income Tax and Super-tax.

The CHAIRMAN

It will not be possible for us to discuss the Budget again.

Mr. LEES-SMITH

I was not going to deal at any length with the Income Tax and Super-tax. I was merely going to contrast them with the contributions under this Bill, and to show that the Government would have obtained this money in that way with less injury to trade and industry. I was merely going to say that we were objecting to this system, not on account of any doctrine as between capitalism and Socialism, but because we believe that the contributory system of obtaining this money will impose the maximum disadvantage on trade and industry at this moment. We take the attitude that a tax is of no great disadvantage to trade. If it does not increase the standing charges of a trade, it does not increase the price which the traders have to charge and it does not handicap them in their competition with foreign rivals. That is the advantage of the Income Tax. It does not increase the standing charges, because the Income Tax is only imposed upon the profits which are left after the standing charges have been met. When we come to the system embodied in this Bill, however, it means that the standing charges in every business are increased at the rate of £1 per year for every man employed, and, in particular, the standing charges are increased in our export trades where unemployment is specially concentrated at this moment and which are struggling against the competition of rivals who are able to undersell them in neutral markets.

What is the further consequence of this non-contributory principle? It is that all the merchants and the middlemen and the retailers, whom it is generally known probably, in spite of our general depression, had a better year last year than any year since the close of the War, will pay very little because they employ very little labour, and the entire interest-receiving and bond-holding parasitic class will not pay one halfpenny between them, because of the simple fact that, as they are not engaged in industry, they employ no labour at all. That summarises our reasons for our contention that the non-contributory system would not only have been juster and more generous as between rich and poor, but that it would have been better adapted and adjusted to the present needs of trade and industry.

Before I conclude, I wish to ask the Minister of Health whether he will deal, in particular, with one point at this stage of our Committee discussions. A large part of the intention of the Government on this Bill has been left in considerable doubt by some of the statements of the Chancellor of the Exchequer. I am referring to what is going to be done between now and the close of the deficiency period. The Chancellor of the Exchequer made some general remarks which indicated that the Government were going to make some proposals with regard to the immediate future.

The MINISTER of HEALTH (Mr. Neville Chamberlain)

What is the deficiency period to which the hon. Member is referring?

Mr. LEES-SMITH

I am referring to the deficiency period under the Unemployment Act of 1924. The Chancellor of the Exchequer, in one of his speeches during the Budget Debates, said that he hoped that before this Pensions Bill passed away from this House a statement would be made that the Government would exercise their powers and authority to deal with the particular problem pre- sented by the next few years. If the Government have a statement of that sort to make, it ought to be made now at the beginning of our discussions, so that we shall be able to conduct the remainder of our deliberations with full knowledge of what is proposed. I should like, in order to elucidate this matter, to ask the Minister of Health what now is the actual position in his estimates as to the end of this deficiency period. He himself spoke, during the Second Reading Debate on this Bill, about the end of the deficiency period, but, so far as I have been able to ascertain from the figures, the end of the deficiency period is not in sight, and all the estimates upon which the deficiency period was based have in practice broken down. I have been reading the report of the Actuary on the Unemployment Bill.

The CHAIRMAN

I presume that the hon. Member is going to relate this to the question of contributions under this Bill.

Mr. LEES-SMITH

I am saying this, because that is exactly what the Chancellor of the Exchequer suggested, and I may add that I think it will be very difficult to debate this Bill unless we can deal with the suggestions of the Government and with the speeches of the Minister of Health. The right hon. Gentleman himself, in his Second Reading speech, pointed out that at the end of the deficiency period there would be a reduction of contributions. Therefore, I think I am entitled to enter into certain calculations and to ask certain questions as to when the Government think that the end of the deficiency period will arrive.

The CHAIRMAN

The hon. Member may suggest that as a line of argument, but he must not attempt to renew the whole of the discussion on this matter.

Mr. LEES-SMITH

I think you will find that I am going to give certain figures which have never been mentioned up to the present. We have been told that we are to look to the end of the deficiency period, and what I am pointing out is that all the calculations as to when that end was to be reached have broken down. The actuary, in his report, estimates that the end of the deficiency period will be in June of next year, but I maintain that all the calculations in that Report have been falsified by what has subsequently happened. The actuary estimated that at this present moment there would be 1,000,000 unemployed, but there are 1,250,000. The actuary estimated that the fund during the last six months would have a surplus of £300,000, and that the debt to the Treasury would be reduced to below £8,000,000. All these figures have now been falsified. Therefore, the question I wish to ask, since all these calculations have broken down, is what are the right hon. Gentleman's calculations and when does he estimate that the deficiency period will be reached and the contributions will be lower?

Mr. AMMON

I rise to support the Amendment which has been submitted by my hon. Friend the Member for Keighley (Mr. Lees-Smith) and to emphasise one or two points which he has advanced and to bring forward one or two further objections. The object of the Amendment is to place the scheme on a non-contributory basis; in other words, to bring those who have fallen in the war of industry on precisely the same lines as those who have suffered during the War through which we have just passed. The Chancellor of the Exchequer, in introducing his Budget, also made mention of this proposed scheme as one of the means whereby the Budget would be made more palatable to the country, but since then evidently he has, during the process of discussion in this House, found that his child has not developed along the lines he wanted, and he has left it as a foundling on the doorstep of the Minister of Health, and that right hon. Gentleman is going to do his best to nurse it into life. The proposals, as submitted to the House, do impose greater burdens on industry. Another point we have to observe is that it is also proposed in the process of time to take off the old age pension as a State insurance and make it a contributory pension. The Chancellor of the Exchequer, in his Budget speech, in endeavouring to gain our sympathy, said: Most painful of all is the position of the young widow with several young children, left absolutely upon her own resources with a few pounds and a few belongings."—[OFFICIAL REPORT, 28th April, 1925; "col. 71, Vol. 183.] It was on behalf of such people that he said this scheme is being adumbrated, yet at the same time when the opportunity was given to him to relieve these poor people of the burden of Death Duties on their small belongings, he turned it down, whilst giving larger benefits to those who have already enough and to spare. I will not, however, trespass further on that point.

The proposals now before us will impose a certain amount of taxation upon industry and upon the working people of this country. Those proposals could have been adequately met had the Chancellor of the Exchequer not taken a large amount of money and handed it over to the Super-tax payers. Industry and employed workmen are being asked to take over a burden that ought, rightly, to have been borne by the wealthy section of the community. It is for that purpose that we are asking that this relief should be given. The Chancellor of the Exchequer stated that the end of the deficiency period would be reached at the moment that the figure of unemployment had fallen to 800,000. One can understand why he is glad that he is not piloting this particular Bill through the House of Commons, because since he made that speech we are a long way further removed from the possibility of getting over the deficiency period than we were in April of last year. As far as we can see, having regard to the discussion that took place yesterday, the deficiency period is always going to be with us. We are going to be burdened with an increasing charge on industry and labour, and this is going to grow every decennial period for at least 40 or 50 years. A large burden is going to be super-added to the trials and difficulties already pressing upon industry, and we submit that it would be in the interests of the insured people, in the interests of the community as a whole, and it would make better for peace in industry if this matter were taken over wholly as a State charge and not placed upon those who are insured and upon the industrialists in the country.

Sir ALFRED MOND

I do not intend to cover the ground which was covered at some length in the Second Reading Debate, when the House decided that this Bill should be on a contributory basis; but I would like to restate the position which we took up then, and to which we adhere. Our position is, that while, in general principle, we think that those who benefit should make some contribution to a scheme of this kind, we are equally convinced that in the present state of industry it is quite impossible to lay any further burdens either upon employers or upon the employed. That leads me to support the question which has been put to the Minister of Health by the hon. Member for Keighley (Mr. Lees-Smith) who referred to a speech made by the Chancellor of the Exchequer during the Budget Debates, which is very vividly in our minds, and in which, in dealing with this point, he indicated, realising the difficulty the Government were in, that some statement would be made on the point. I think it ought to be made now. It would very largely influence our opinion in regard to the votes we are to give if some statement could be made of the intentions of the Government.

I think it is generally agreed in the country—I do not know whether it is agreed in the Cabinet—that it is impossible to put what is really a large new standing charge on industry at the present time. Any such charge should have been deferred until, at any rate, the extra payments under the Unemployment Insurance Act have been reduced to normal, so that the contributions under this Bill would leave the standing charges where they are, and not make them any worse. That was what was indicated by the Chancellor of the Exchequer in his speech. We are anxious to learn whether the Government by this time have formulated any idea, because in the Press we have seen various indications of what the Government are proposing to do. There are many methods by which we could deal with this matter, but I will not enter into a discussion of them now. There is the so-called deficiency on unemployment insurance, which is largely a bookkeeping matter: money Lent by the Treasury to the Unemployment Insurance Fund, and the term of repayment could be spread over any period which the Treasury like to fix. It is because, for some reason that I have never understood, they have fixed an absurdly short date for repayment that these heavy contributions have been necessary.

The speeches that we have heard from the Mover and Supporter of the Amendment have been much on grounds which I and those associated with me, share, namely, that we cannot impose this new burden upon industry at the present time. We have an Amendment on the Paper, which will be reached later, which deals specifically with this point. If the hon. Member for Keighley (Mr. Lees-Smith) had limited his Amendment to that point, we might have found it easier to support it; but I do not see how we can accept the principle of making this whole scheme non-contributory, for two or three very good reasons. I do not think it would for acceptable to the country. No non-contributory scheme has ever been brought forward or suggested. We have contributory schemes under the national health insurance and under the unemployment insurance, and the contributory principle is well established in connection with friendly societies and trade union organisations, so that it is nothing new. If this Amendment were carried it would only end in wrecking the scheme and in not giving benefits either to the widows or to the people at 65, which we all wish them to have.

Sir GERALD STRICKLAND

I appeal to hon. Members generally, and more especially to hon. Members above the Gangway and to my right hon. Friend the ex-Chancellor of the Exchequer (Mr. Snowden), who is an authority on finance, not to mix up politics with finance in connection with this question of pensions. The most brilliant feature of the Chancellor of the Exchequer's scheme which appealed to me was when he pointed out that by the Government insurance scheme he was giving to the workers, on account of the Government co-operation, much greater value for their money than could be obtained by insurance through any insurance company. That added value is a gift to the workers, and the creator of that value is the Chancellor of the Exchequer, with the Government power of organisation behind it. So much is given to the workers, and for that the Government should be given credit from every party in this House. That added value, which is the result of Government organisation, should not be minimised or treated with disrespect. For that reason, I think all parties should not press the argument against the contributory basis. To put it briefly, a contribution supported by the Government scheme produces double the value that would otherwise arise. Moreover, I feel that the adoption of the gold standard and the lowering of prices—

The CHAIRMAN

I hope the hon. Member is going to relate these important matters directly to the subject of contributions.

Sir G. STRICKLAND

Entirely. Had I been allowed three more seconds to come to the point, that would have been very apparent. By that step, an added value has been given to the position of the workers, which adds to the contributions which the Government give indirectly towards this insurance. I think that is quite a fair point.

Mr. MARCH

I want to say a few words in support of the Amendment. It seems to me that running through the minds of most hon. Members is the idea that the workman has a little Klondyke into which he can keep dipping his hands and taking therefrom the contributions which are imposed upon him by the State for various things. Anyone would think that every workman who is going to contribute to this scheme is in full employment and getting a full and a good weekly wage. That is not so. For a long period under the Unemployment Insurance Act many casual workers have been very hardly hit, and they are going to be more hardly hit in connection with this scheme. The men now in casual employment round the docks and in some employers' yards have to work by the half-day, and very often they do not get more than a half-day, but they have to pay the full insurance contribution of 1s. 2d. [An HON. MEMBER: "No."] Yes they have. It is no use saying they have not. In addition, you are going to have a 4d. stamp attached, so that the total amount of the contribution will be 1s. 6d. That will be taking pretty nearly one-half of the wage that the man gets for his labour. Frequently the men are very fortunate if they get much more than a day or a day and a-half's work in a week. Therefore, these casual workers and the under-employed men are being hit all the time. We want to see whether some better arrangement could not be made whereby the casual workers who only do one or two day's work a week might be allowed to have an exemption, if this non-contributory principle cannot be accepted altogether. I would like to see the Government accept this Amendment, so as to give the fullest freedom for all those who are unemployed or under-employed, so that they can have benefit in the same way as the old age pensioners have had.

Mr. HARNEY

I am in favour of the contributory basis, although there is a good deal to be said for making this scheme non-contributory, especially at the present time. The effect of making it non-contributory would be to distribute the burdens imposed over the whole community through taxation, and not placing them upon what I may call the vital organs of industry. It would also do away with the injustices that, superficially at all events, will follow from a contributory system. There may be two large employers. One may employ 1,000 men and run his business at a loss. Under this scheme, because he has a thousand men, he will have to add to his loss £900. The other man may employ only 100 men, and he may make a profit of £1,000. Under this scheme, he will only have to pay £90, though he is already making a profit of £1,000, whereas the man who is making a loss will have to pay £900.

I recognise all that and therefore, if it were not for some other considerations, I would vote in favour of a non-contributory basis. But you cannot have a non-contributory scheme without introducing these highly objectionable tests against which we have all spoken so strongly in connection with the old age pension, and if the right hon. Gentleman is now in a position to say, as he is, "I am going to do away with this means qualification, with this irritating inquisition, with the whole of these grievances which the old men and women have, I shall only be able to do it because already the discrimination of this class is determined by the contribution." He adopts then the simple rule, "I do not care what your means are so long as you come within the scheme. Those who pay in are those who draw out." There is another point. If you put it on a non-contributory basis it is very hard indeed to discriminate between the necessitous. I cannot see why a healthy man of 65 is more entitled to sympathy and assistance than an ailing man of 45. I cannot see why a healthy widow is more entitled to assistance than the wife of a cripple or a wife who has been deserted, and if you base the assistance of the State upon the needs of the members of the community then you would not know where you are going to stop.

Therefore, the only sound way is to have a contribution whereby you say to the people, who are presumably of the class that will be necessitous, "You will get an opportunity of contributing, and your contributions shall be the mark entitling you to the payment." I am sorry, therefore, that, although I sympathise deeply with all that has been said both on Second Reading and now as to distributing the burden over the whole community, still when you weigh the pros against the cons one is forced to the conclusion that the only way you can make it workable is to have a reasonable contribution, and the making of a contribution has this advantage, that it has with it no stigma of charity. [HON. MEMBERS: "What about the dole?"] The dole does not carry any stigma. [HON. MEMBERS: "Yes!"] I am very sorry to hear that it is thought that the dole does, because I was of opinion that these poor fellows whom I see in my own constituency standing round the Employment Exchange had at all events the consoling thought. "We are not in the humiliating position of being mendicants. We are men who are entitled to what we are getting. "But if you regulate the assistance that is given by the State in such a way that it is poured out without a man being conscious that he has poured anything in, it will be very hard indeed to rob him of the sentiment of something being given for nothing.

Mr. J. JONES

What about the Prince of Wales?

HON. MEMBERS

He works hard.

Mr. HARNEY

Whether he works hard or not, there are always special allowances for those at the top.

Mr. RHYS DAVIES

I would not have taken part in this discussion were it not for the argument of the right hon. Gentleman the Member for Carmarthen (Sir A. Mond), that this scheme ought to be contributory because we have established in this country a national health insur- ance scheme which is on a contributory basis. May I remind the right hon. Gentleman that there are other schemes in operation in this country which are non-contributory and which aim at covering practically the same type of cases as this Bill is intended to deal with. I will mention one or two. There is no contribution called from the workman in respect to insurance for workmen's compensation. When the idea of workmen's compensation was introduced into this House, it was argued then that workpeople ought to pay contributions in order to cover accident risks. We have got beyond that stage now, and it is idle to say that there are no social insurance schemes on a non-contributory basis. I will give another instance. There are no contributions asked for the moment in respect to old age pensions. This Bill, however, demands a contribution in order to meet that in future. So far as I understand it, a man when he joins the Army or the Navy is not called upon for a contribution in respect of any pension which he will receive when retiring from the Forces. [HON. MEMBERS: "He is!"] I understand he is not.

I want to combat the idea that it is necessary to call for a contribution from a workman simply because he is to get benefits. No workman is ever called on to pay a contribution in order that he may receive treatment in a hospital for infectious or contagious diseases. He gets that provision from the community without being called on for any contribution from his wages. I have an objection even stronger than any of those to a contributory basis for this scheme. Let us see what is called for from his wages from the average male worker at the moment. In the first place he has to pay 5d. a week under the National Health Insurance scheme, 9d. under the Unemployment Insurance scheme, and 4d. under this scheme; and of course he will be called upon to pay his trade union contribution as he ought to do. That will mean a contribution of about 2s. a week from his wages. The State should not therefore burden him further by asking him to contribute for the purposes of this Bill. He has got, in addition, death insurance and his friendly society contributions to pay.

I object to the principle that a widows' pension scheme should be established on a contributory basis. This idea of a widows' pension scheme came from America. Many good things have come from there. I have here copies of the laws relating to all the States in the United States of America where such schemes are in operation, and there is not a single one of those States, or the Scandinavian countries, where these schemes have been in operation for years, which has established a widows' pension scheme that calls for any contribution from the workman.

Viscountess ASTOR

Is it not the fact that in the United States of America it is not a widows' pension scheme at all, but that it was started for the juvenile delinquents with the object of catering for these children? I believe that the hon. Member got his information from the same place as I did to-day.

Mr. DAVIES

May I read the first two lines of the Pensions Code of the State of Ohio? It declares: Mothers' pensions; allowances for the support of women whose husbands are dead or become permanently disabled by reason of physical or mental infirmity.

Viscountess ASTOR

Will the hon. Gentleman take another State, the State of New York?

Mr. DAVIES

I will not be side-tracked from my argument. Widows' pensions schemes have been established, if I remember rightly, in nearly 40 States of the United States of America and in most of the Scandinavian countries. Those schemes have been in operation for many years, and this is the first Government in history which has ever deigned to call for contributions in this connection. I object to this scheme on that ground, which is probably the strongest ground of all. I know that the right Ron. Gentleman the Minister for Health will say that, if the scheme was non-contributory, it could not be a pensions scheme, but a charitable one. I am not influenced in the least by that view, because all payments made by the State from Treasury sources are not regarded as charity by any means.

I pass, if I may, to another point. I object to the working people being called on to contribute towards this scheme on another ground. The Noble Lady gave a hint as to the reason for the existence of mothers' pensions in the United States of America—that it was first established because it was thought that the State would gain financially by the payment of widows' and children's allowances.

Viscountess ASTOR

Children's, not widows'.

Mr. DAVIES

If the Noble Lady has seen the papers and has read them as I have done, she will find that these schemes differ very much as between one State and another. But I want to pass on to the point that these schemes in other countries have been established because by the payment from State funds of pensions and allowances to widows and children the whole community has benefited. It has always been assumed that the State would gain financially, and the argument was on these lines The Judge in the children's Court listened to cases of neglected and delinquent children, and he found that a considerable proportion of such children came from homes where the father was absent for some reason or other. Then the Judge declared that the State should take interest in such children and make grants for their maintenance, and thereby save the cost of those children going to institutions such as Borstal, industrial or reformatory schools. The Chancellor of the Exchequer made it clear to us the other day that there would be a saving in the rates by the adoption of this scheme. Consequently I say that if the community is going to gain financially by the adoption of this scheme, it means that the worker out of his wages is going to help to reduce the rates and taxes.

I have had something to do with the administration of the National Health Insurance scheme, and I have often wondered why the State is not contributing as much to the funds of this scheme as it contributes to the National Health Insurance scheme. I have never seen the percentage worked out, but I would like to know what are the proportions paid by the State in percentage form towards the benefits under this scheme and towards those under National Health Insurance Acts.

I have also taken some interest in the subject of widows' pensions. I had the honour some years ago of moving a Motion in this House in favour of these pensions on a non-contributory basis.

This scheme, I hope, and all schemes of the kind, are adopted because of the compassion of the community for the widow and the fatherless children. I trust, therefore, that the Government in this case is not going to exploit that compassion, not going to call upon the people to contribute towards what I think ought to be the duty of the State as such. What is going to happen is this: You will place upon industry, upon the wages of the workers in the main, a charge which ought definitely to fall upon the Income Tax payers.

I trust that we shall go to a division on what is, after all, the fundamental part of this Measure—that men and women employed in the workshops and mines and factories shall suffer deductions from their wages in order that they might say to themselves that their dependents shall be saved from poverty on their death. I think that the Government in proposing a contributory basis for the scheme is callous and mean. If the Bill becomes law I hope that the day will come when a more humane Government will take office and change the whole system.

Mr. CHAMBERLAIN

In the echoes of the last speech we see the real purpose of this Amendment. This is not a business Amendment; it is not a serious or a real Amendment. It is merely a demonstration intended to lead up to a Division, the results of which may be utilised hereafter at some election.

Mr. KIRKWOOD

It is not right that we should be insulted in that fashion by a statement that we are not sincere and that we are playing a game for an election. The right hon. Gentleman is mistaken. We are not playing a game.

The CHAIRMAN

I seem to remember similar statements from all parties.

Mr. CHAMBERLAIN

Apparently it is perfectly legitimate for an hon. Member on the Front Bench opposite to accuse the whole of the Party on this side of being callous and mean, but we must not offer the slightest criticism of them. What is the real position? We have passed the Second Reading of this Bill, after discussing whether it should be a contributory or a non-contributory scheme. We have subsequently passed a Financial Resolution, which curtails or limits the contribution of the Exchequer to an amount which is based upon the assumption that there will be contributions under the scheme. Now an Amendment is moved to take away the contribution. If we do take away the contributions and do not increase the amount which is paid by the Exchequer, it is quite obvious that the next thing we have to do is to reduce the benefits. There is no limit, apparently, to the generosity of right hon. and hon. Gentlemen opposite, because I notice that not only is there an Amendment on the Paper practically to double the benefits for which no contributions are to be paid, but that a further Amendment proposes to exclude any contributions from the Exchequer at all. Hon. Members opposite have already a certain reputation for conjuring tricks, but to get double the benefits without any contributions from anyone is their most successful endeavour up to the present. The real fact is that we have to choose between a contributory scheme and no scheme at all. I have just taken out some figures to show the Committee what it would mean if we were able to make this a non-contributory scheme, with the benefits mentioned in the Bill. The cost runs from £2,750,000 in the current year up to £41,000,000 in 1935, £62,000,000 in 1955, and £66,000,000 in 1965.

Mr. D. GRENFELL

Does that include the whole scheme of the Bill?

Mr. CHAMBERLAIN

That includes the whole scheme of the Bill. It does not include, of course, the cost of old age pensions under the existing Act. It includes only the additional cost which will be incurred under this Bill. What I wanted to remind the Committee of was that you cannot take one particular item in the cost of our social services and say, "If you had not taken so much off the Income Tax you might have paid for this." The total of our resources is limited, and what you take for one purpose you cannot use for another. In regard to old age pensions, the Chancellor of the Exchequer in his Budget speech, pointed out that he had discovered that there was to be a big, unexpected increase in the charges upon the Exchequer owing to the old age pensions under the existing Act. If you add the two together, that is to say, the cost of old age pensions under the Act, and the old age pensions and widows' pen- sions under this Bill, you get up to enormous figures. The cost would be £29,700,000 this year, in 1935 it would rise to £77,000,000, in 1945 to £103,000,000, in 1955 to £117,000,000, and in 1965 to £123,000,000 a year.

Miss WILKINSON

Has the right hon. Gentleman made deductions from those figures for the saving on war pensions and other services that the Chancellor of the Exchequer had in mind when he was stating what the cost would be?

Mr. CHAMBERLAIN

What I am pointing out is what would be the cost to the Exchequer of the present Old Age Pensions scheme, plus the cost of the present Bill on a non-contributory basis, and I say that the amount would go up to 123 millions. You can take off war pensions from that, and you would get a saving. But even then the figures come to something very large indeed, and, whatever you give to a social service, you must remember will not be available for any other social service. It is no use to go to other countries and to pick out particular items in their social legislation and say that they are what we should have. Other countries have not all the things that we have. A country must adapt itself to what it can do in the way of social services. The United States are much richer than we are, and they may be able to afford things that we cannot afford. The general point I desire to make is that each country has to look after its own problems. Take the case of the pensions in America, to which allusion has been made. I have not seen the papers quoted, which, presumably, have been circulated quite recently, but I had an opportunity of seeing some papers on this subject a considerable time ago, and I recollect one thing which struck me at the time, namely, that in the cases where pensions or allowances are paid the very strictest inquiry has to be made into each case, and even with that inquiry there has been complaint made in certain States that the pensions and allowances have been abused. The great merit of this scheme is that you can do away with the irritating, exasperating and humiliating inquiry—an advantage which outweighs many of the so-called injustices and anomalies which hon. Members opposite profess to find in this Bill.

There is another point to which the Mover of the Amendment addressed himself, and which was repeated by the right hon. Member for Carmarthen (Sir A. Mond). He said that allusions have been made to the possibility of some reduction in the contributions exacted from industry in respect of Unemployment Insurance, and a demand was made that I should make a clear statement on the subject. The Government are not going to run away from anything that they have said on that matter. I have been examining, as I said on the Second Reading of this Bill, the whole question, to see what can be done, and the Government's proposals will be formulated in the shape of a Bill. I had hoped that that Bill would have been printed by now. It will be in print in the course of this week, and then hon. Members will see for themselves exactly what it is that we are proposing to do. In view of the fact that the Bill is being printed. I do not think it would be proper for me to enter into a discussion of what it entails. I can only give the Committee an assurance that we have been able to see our way to mitigate the burdens on industry in the matter of contributions towards Unemployment Insurance, and I suggest to my right hon. Friend the Member for Carmarthen that, whether the contribution be 4d. or 3d. or 2d., that really is not a question which should decide his attitude towards this Amendment. The difference between these figures is not one upon which (he existence of industry depends. That statement is all that I need make.

5.0 P.M.

Mr. WHEATLEY

The right hon. Gentleman began by telling us that if the scheme under this Bill were non-contributory he would have to reduce the benefits. Then he proceeded to prove that, and gave us figures, which I was not able to follow sufficiently closely, to understand the years to which they applied. The first figure was £2,750,000 per annum, the next, after a long period, was £41,000,000, and in 1965, he told us, the obligation on the State would amount to £66,000,000. He asked us to assume that the State to-day could not bear £2,750,000, and that in the year 1965, with all the rapid improvements that are taking place in the production of wealth, the State would be so poor that it could not bear an additional annual burden for this purpose of £66,000,000. I think there are very few people outside his own immediate followers who will agree with that estimate of the State's financial powers. One of my hon. Friends was good enough to interject the remark that the right hon. Gentleman was making no allowance for the savings to be made on War pensions. But may I remind the right hon. Gentleman, that when the Chancellor of the Exchequer was introducing his Budget, he placed a great deal of weight on the savings that were to accrue in respect of War pensions, and he reminded the House that the nation will save so much on War pensions in the future, that it will be in a better position than it is to-day to meet the obligations of this scheme. This year the nation would, I think, be asked to meet an additional burden of £2,750,000. It would have been interesting to have been told by the right hon. Gentleman how much of the £66,000,000 which he thinks the State would have to bear in 1965, would have been met out of the savings of War pensions that would have. taken place by that year. I think he forgot, in going out of his way to prove the burden that this would be on the State, that he was at the same time proving the burden it is going to place on the poor of this country. He proved the two things at the same time. Admittedly, the burden is great, and some section of the population has to face the burden, but the point the House of Commons has to consider is which section of the community is the better able to bear it. Are the poor, who are to be asked to contribute to this scheme, in a better financial position than the people to whom the right hon. Gentleman's friend made a gift of £42,000,000 for this year alone in the Budget which has just passed this House? That is the question. This year this would have cost us £2,750,000. This year we throw away £42,000,000. We give £10,000,000 of that to people with incomes—

The CHAIRMAN

The right hon. Gentleman will see that if this line of argument be allowed, some hon. Gentleman on my right may say that the whole cost, or a great part of it, might be found out of tariffs, and another hon. Member might say a great part might be met out of the taxation of site values of land.

Mr. WHEATLEY

On that point of Order, may I remind you that ever since this question was introduced to the House, it has been associated with the finance of the Budget, and that the right hon. Gentleman himself has not been entirely free in his remarks from making that association? I am submitting to you that the point we have to consider here is whether the State, or the poor and industry, should make up the necessary finance of this scheme.

The CHAIRMAN

The right hon. Gentleman would be perfectly entitled to say that the State should bear this burden, but when he says it should be borne out of incomes, or that the Chancellor of the Exchequer should not have granted certain remissions, that would lead to one endless controversy alien to this Bill. It might be in order on Second Reading, but not on this Amendment.

Mr. WHEATLEY

I will try to keep within your ruling by reminding the right hon. Gentleman where the money could be found, without going to the pockets of the poor. There are in this country at the moment a certain number of people whose incomes are in excess of £2,000 a year.

The CHAIRMAN

That argument cannot be allowed, because, as I say, other hon. Members will indicate other sources, and then we should be quite wide of the mark. The right hon. Gentleman may argue that the State should assume the whole of this burden, but, when it comes to ways and means, it cannot be in order on this Amendment to review the fiscal system of the country.

Mr. WHEATLEY

May I remind you that the right hon. Gentleman, in the course of his remarks, told us that we must have a Bill based on contributions, or no Bill at all, and what he asked the Committee to assume from that was that if he did not get his revenue from these contributions, there was no other source of revenue. Surely, therefore, it is quite in order for me to remind the right hon. Gentleman, in his state of darkness regarding the condition of this country, which he painted in black colours compared with lands that are far away, that there are in this distressful country very valuable little corners in which hoards of money could be discovered by an industrious Chancellor, and while I dare not mention, I suppose, the people with over £2,000 a year—

The CHAIRMAN

The right hon. Gentleman would be in order in saying that this money should be found from the general resources of the country, rather than the contributions of beneficiaries, but when he begins to indicate this or that source from which it might be found, it is really going back on the Budget discussions, and would be quite endless, because other hon. Members could suggest various sources of revenue.

Mr. WHEATLEY

I will not attempt to draw the Committee and you, Sir, into an entanglement. I will not pursue the point further, except to say that when the country awakens to the folly of having put the present Government in power, and returns a Government that is more sympathetic to the poor, that Government will have no difficulty in finding this money, without putting the burden on the poor. There was another point made in support of his proposal by the right hon. Gentleman—I think it was stated also from the Liberal Benches— that if you make this a non-contributory scheme you will have all those obnoxious inquiries into the conditions of the poor which we are all so anxious to avoid. Under this scheme, not a single inquiry into the conditions of the poor that is taking place to-day will be removed. In order to convince this Committee, or any reasonable person, that the poor under this scheme will be placed m a position where they will be free from the inspector, the right hon. Gentleman requires to prove that a widow can live on 10s. a week, or that the children of a widow or orphans can be maintained on the allowances laid down in the Bill. He can, of course, do nothing of the kind, and as it is impossible, and as it will be impossible, for them to live on the sums provided for in this Bill, they will require to go elsewhere, as they have at present, and when they go elsewhere, they will have to undergo the inquiry, inspection and investigation to which they are now subjected, with this difference, that the Minister of Health, who is the chief guardian of the poor in this country, having laid it down that, in his opinion, they are amply provided for in this Bill, they will require to answer many more questions than they do now in order to satisfy the inspectors in his Department. I think the case that the right hon. Gentleman made against the Amendment was as unconvincing and unsympathetic as could be, and we shall press the Amendment to a division.

Sir J. MARRIOTT

The right hon. Gentleman who has just sat down alluded to that happy day when the country will awaken to the folly of putting the present Government into power. [HON. MEMBERS: "Hear, hear!"] I anticipated those cheers. I should like to say to hon. Gentlemen opposite that I, at any rate, am one of those—and I speak on this particular point with some little knowledge—who are convinced that the country put this Government in power very largely for the purpose of bringing forward the scheme which we are considering at the present time. [HON. MEMBERS: "No!"] Very largely for this purpose. I am not going to follow hon. and right hon. Gentlemen opposite into the details which they have presented to the Committee. The only point I desire to urge is this. The Amendment is, in effect, an Amendment for the destruction and rejection of this Bill, and I hope that the country will note that an Amendment, which is deliberately designed to wreck the whole scheme, has been proposed by hon. and right hon. Gentlemen opposite.

We have it on the authority of the right hon. Gentleman the Minister of Health that the whole framework of this Bill has been constructed—and by giving a Second Reading to the Bill the House has assented to the principle—on a contributive basis. I want to say more than that. I myself, for the last year or two, have taken some modest, some little part in commending this principle to the country at large. I have spoken on it in many places, and on this particular point I do speak with some knowledge. I am absolutely convinced that, if those for whom hon. Gentlemen opposite claim particularly to represent were consulted, they themselves would be in favour of the contributory principle. [HON. MEMBERS: "No!"] I am quite certain of it. They want to escape from the difficulties, the intricacies of non-contributory schemes. One hon. Gentleman opposite referred to the hospitals. I have some little knowledge of hospital administration, and I know that more and more the local hospitals of this country are putting themselves on what is essentially a contributory basis. They are framing schemes, which are eagerly welcomed by the poor people of the districts of this country, for small and regular contributions to the finance of the local hospitals by means of village clubs, and so on. The people of this country are very much more self-respecting in these matters than some hon. Gentlemen would like us to suppose. They desire to make contributions, very often from very small means—I have in my mind rural villages where small contributions, it may be a penny a week, are being made to local hospital funds regularly, and with a sense, I was going to say, of exaltation in the minds of the people who make these contributions.

Therefore, I, at any rate, am one of those who most strongly support the Minister of Health in his determination that this Bill shall be on a contributory basis. But I support that principle most of all for this reason, that we are either going to have this Bill on a contributory basis, or we are not going to have the Bill at all. Hon. and right hon. Gentlemen opposite must take the responsibility for this Amendment. If it is carried it means the destruction of the Bill. [HON. MEMBERS: "No!"] Yes, quite emphatically it means the destruction of the Bill. Hon. and right hon. Members opposite must accept the responsibility for the logical consequence, and the Parliamentary consequence of their own proposal. I, for one, am not prepared to see the Bill destroyed.

Mr. G. THORNE

On a point of Order. I wish to ask, Mr. Chairman, whether a Division on this Amendment will prejudice a discussion and a Division upon the Amendment in the name of my right hon. Friend the Member for Carmarthen (Sir A. Mond) and others—in Clause 9, page 9, line 233, at end, to add the following new Sub-section: (3) The provisions of this Section shall not take effect until the deficiency period, as defined in Section sixteen of the Unemployment Insurance (No. 2) Act of 1921 has terminated, and the weekly contributions of employers and employed for the purposes of unemployment have been fixed in accordance with Section four of the Unemployment Insurance Act, 1923, at rates not higher than the maxima prescribed in the First Schedule to that Act.

The CHAIRMAN

No, I do not think that Amendment will be in any way prejudiced. All the Committee will have decided, if they reject the Amendment now under consideration, is that there shall be some contribution, but that will not prevent an Amendment being proposed which seeks to delay the operation of the contribution.

Mr. ROBERT YOUNG

It is perfectly true that on the Second Reading of this Bill the House determined that this scheme was to be contributory, but that does not preclude us from pointing out facts in relation to the contributory principle which ought to be considered. We have been told that if we adopt a non-contributory scheme the amount to be paid will increase at a great rate in a given number of years. I do not think that is a fair statement, and if we are to have statements of that kind we ought to have figures showing exactly what the cost will be. It is not only a question of the saving of war pensions. If this scheme means anything at all, it is going to save large sums to ratepayers, local authorities, charitable institutions, and so forth throughout the country. I hold the opinion that when these pensions are paid, whatever the widows and orphans get will be saved in other directions, and the cost to the nation, speaking generally, will not be very heavy. We have a right to protest that the circumstances of the time have not been taken into account in devising this contributory scheme. Almost all those who will benefit by the scheme are people who have received no concession during the past few weeks to assist them in paying the contributions. Nothing has been given to them out of the Budget.

We know the state of the country. We know that large numbers of people are getting very small wages, and some of them are working only a few days a week, yet all will be called upon to contribute to this fund, which in itself will be a heavy liability upon them. We have also a right to protest that industry should be called upon to pay a share which, in the end, will come out of the pockets of the workers, because it will be looked upon by the employers as an addition to wages. This contributory scheme is nothing else but taxation imposed upon those who are brought within its scope, and it is taxation applied by the Government at a time when it is relieving taxation on the well-to-do, and on those who are better able to pay. Reference has been made to the proportion to be paid by the Government towards the scheme. I should like to know exactly where we stand in that respect. It may seem a strange thing to say, but I am very much afraid of this scheme on the actuarial basis, in so far as the workers are concerned. These actuarial schemes seem to be worked out in such a way that enormous sums of money are accumulated over and above the benefits paid. In connection with the Health Insurance scheme large funds are in the hands of the Government; the approved societies themselves are not allowed to invest these funds as they would like, the Government causing them to invest so much in one particular direction, while the Government itself invests so much in other directions. How far is this scheme going to cause enormous sums to be aggregated in the future, so that the State may ultimately shift off its responsibility for contributing in any shape or form?

Why did not the Government on this question of a contributory scheme stick to the lines already laid down in this country? Why have they introduced a principle which is altogether divorced from employment? What has industry to do with old age? As far as I know the only connection is that in many cases industry makes men prematurely old; but you are not doing anything for the prematurely old in this scheme. Industry often kills men before they can be called old, but you are not doing much to meet that case. Why should industry under present conditions be called upon to contribute towards old age pensions at 65? It is not responsible for a man becoming 65. We all become 65 after the same lapse of time, if we live. Industry has nothing to do with it, and if the Government had been just in this matter, since they were determined to have a contributory scheme in regard to sickness and unemployment, they should have been consistent enough to keep old age pensions entirely apart from the scheme and have prevented them from being charged upon the wages of the workers and the returns of industry.

For these reasons I protest against the contributory scheme. I am aware that no discussion will determine otherwise than in favour of this scheme being contributory, but we believe all the supposed difficulties mentioned in connection with a non-contributory scheme are fanciful and unlikely to materialise. The cheapest way of providing pensions would be to go along lines whereby you could use the ordinary machinery of the State without any great addition of servants in order to work that machinery, so as to get in the amount necessary to meet the charge for pensions. From the point of view of the worker who is receiving no benefit from the Budget, from the point of view of the employer who is having a heavy charge put on his industry at a time when he cannot stand it, and from the point of view that old age pensions should have been kept distinct and separate from sickness and unemployment, I shall vote for the principle of a non-contributory scheme, although I am anxious for widows' pensions.

Mr. CHARLES EDWARDS

The right hon. Gentleman the Minister, as is his habit when he speaks, imputed motives. He imputed to hon. Members on this side of the House the motive of election purposes for putting down this Amendment There is nothing in that suspicion. We would prefer the Minister to accept the Amendment, and he could take all the credit for it, and use it as much as he liked at elections. If I were imputing motives, I should say that the Government have brought forward this Bill in order to establish a contributory pensions scheme, knowing that if we were in power we would establish a scheme of a different kind, on a non-contributory basis, and that it would be very difficult to go back upon that scheme once it had been established. I am supporting this Amendment because I think it right and not for election purposes. If this scheme were sufficient to maintain people without troubling the Poor Law; if it were sufficient to induce people of 65 to withdraw from industry, and make way for the younger people who are unemployed, then whether contributory or non-contributory, I should support it. But it does neither of these things. It is not sufficient to maintain anybody. It will induce no old person to withdraw from industry, and it will leave unemployment just as it is to-day.

The contributions paid by the workers at present are very heavy. There are contributions out of wages for hospitals, doctors, institutes, and there are various other payments which make up a large amount—to the worker—in the week. Another payment is now to be added on. It will be imposed at the expense of many useful contributions at present paid by the workers; out of sheer necessity they will have to cut down their payment in other respects or withdraw some of them altogether in order to meet this new demand. We are told that industry is tottering; still another burden is to be placed upon it. No contributory scheme can be a fair one which relieves the one section of the community best able to pay. The hon. and learned Member for South Shields (Mr. Harney) was concerned lest the workers should be taking something out of a fund without paying in. He need not 'fear. The people who produce the wealth will pay their share; they will have to contribute without any doubt. I support the Amendment, as I say, not for election purposes, but believing that it is the proper thing, and that a scheme should be brought into existence which would require payments from everyone in the community properly entitled to make those payments, instead of relieving those who are best able to pay.

Mr. TREVELYAN THOMSON

The hon. Member for York (Sir J. Marriott), in rebutting this Amendment, suggested that if it were carried the scheme would be wrecked. I submit that if it were possible to carry this Amendment, the same force which carried it would be able to bring in a new Financial Resolution, which would place this scheme on another and more desirable footing. I support the Amendment because, following on the old-fashioned Liberal lines of the original Old Age Pensions Act, it proceeds on a non-contributory basis, and I have heard no argument to show why we should change from that sound principle. It seems to me at this time most unfortunate to place upon industry, whether on employers or employed, any additional burden, and I am astonished that this Government of all Governments which is so concerned with the revival of trade and industry should further handicap trades and industries which are already struggling. Recently the manager of a steel works in the North of England stated that this Bill would involve on that particular works a new cost of £12,000 a year, and the same thing applies throughout the length and breadth of the land. It is impossible at present for industry to stand further burdens. Moreover it is inequitable in its incidence with regard to workers of all sections. An employer who employs a large number of men or who causes the employment of a large number of men is penalised. You have the case of the large manufacturer who employs 1,000 or more, and who will have to meet a heavy charge in consequence. You have another man who may be making as large a sum, or larger, a professional man or a merchant, who employs a mere handful of men possibly, and all of whose employés are above the insurance limit, and he will contribute nothing to the scheme and continue drawing a larger profit than the manufacturer who is burdened by this Bill. Therefore, so far as industry is concerned, it hits very unequally the various sections of the community. If it was a non-contributory scheme, those who are not working in industry would contribute their fair share of what, after all, is a communal charge, and it is not right that industry, because it is industry, should be burdened with the cost of old age pensions, or with the cost of orphans in the way that this Bill will bring about. I submit that what the right hon. Gentleman the Minister of Health has told us as to the intentions of the Government and the relief they are going to give to industry does not justify us in supporting this scheme, and that before we vote on this Amendment, we are entitled to know more definitely what the Government's real proposals are, because the one is linked up with the other. We cannot weigh the incidence of this particular Clause unless we know what they are doing in regard to unemployment insurance generally. I hope the Parliamentary Secretary to the Ministry, who, I see, is bursting to speak, will be able to enlighten the Committee on this very important point before we go to a Division.

Mr. BROAD

I wish to add my word of protest against this scheme being placed on a contributory basis. The Minister has told us about the many claims there are on the State for meeting social services, but I wonder if he realises the many claims there are on the small wage-earners in this country, and what they mean in their full incidence, and if he realises that the man who, through his fear of possible poverty in the future, would starve his children in order to make provision for a possible old age, when his income does not allow him to feed his children properly week by week, is not exercising a virtue, but a vice. I say that to exercise thrift and make provision for a possible future at the expense of feeding your children is not a thing which should be commended, but when it comes to a State which says to the worker: "No matter what the demands of your family may be, or how hard you find it to provide them with bread day by day, you have to contribute to an old age pension or a widow's pension, which may not be your lot at all," then, I say, it ceases to be the vice of the individual and becomes the crime of the State, and I say that this imposition of this tax on the wage of the worker is a mean and despicable crime. I have known men with mechanics' wages in the years gone by, with their travelling expenses and big families. When it comes to Saturday, there is the. question of boots for the youngsters to keep their feet dry, and on Tuesday their money has gone, and the dinner of many a working man is a walk round the streets, and the same on Thursday and Friday, till they get their money, and if, in addition to that, you take this contribution, it seems to me that you have gone very much too far.

If you think you have the right, as a community, to compel the workers to do things like this, at all events, you have as a responsibility to see that the thing that you insist on the workers doing is a reasonable thing, and I say that this is not reasonable. With your three insurances, there is 1s. 6d. a week to pay directly from the wage packet of the worker, but I think every economist here will recognise that the other Is. 7d. per week is going to come from the worker's wages also, and that is 3s. Id. a week, without all the other contingencies, such as having to go to a doctor for your children or your wife. It will be a case of giving your wife a chance to die without medical care, because you are paying some pence per week to provide her with a pension in case you die first. If you impose this as a responsibility on the workers, at all events, there should be some security that they will get the benefit. For the workers of this country, with unemployment as precarious as we have had it in the last few years and as it is likely to continue in the future, I say that this is not a certainty, but a lottery. Take any insurance scheme. You have to have some regulations as to continuity of payment, and a good many hon. Members opposite will know what very great profits are made by industrial insurance societies, not out of the provision of benefits from the premiums, but from the lapsed policies. Many a worker may pay in from 16 to 65 years of age, may pay for 50 years, and then, forsooth, because, according to the scheme of the right hon. Gentleman, for the last three years they have not had fairly regular employment, the whole of the contributions that they have paid in for 50 years will be set on one side.

Two years after this scheme is in full operation—as far as old age pensions are concerned, that comes in 1928—and, taking the figures in the actuary's statement, in 1930 there will be about half of the men over 65 years of age entitled to an old age pension. Those hon. Members who are employers know what chance of employment they give to the worker over 60 years of age. It is only casually, when trade is particularly busy, that the man over 60 years of age is employed, and in addition to that he is the last taken on and the first put off, but, because of the last three years, if he has not qualified by 39 weeks' contributions for each year, he will be deprived of his benefit, and I say that such a gamble is a two-to-one chance of an old age pension. Take, again, the widow's pension. The census of 1921 showed that we had 1,800,000 widows in this country, and, according to the Government's own computation, 206,000 of those will get a pension next year as widows. The rest will never get a widow's pension, unless they get married again and are so unfortunate as to lose their second husband. A nine-to-one chance of a widow's pension next year is not good enough to make us approve of such a scheme. The maintenance of the widow, we say, is not the responsibility of the poor but of the whole of the community, and the burden ought not to be placed upon the poor. Again, we say that the responsibility for making provision for old age is not the responsibility of the poor but of the whole community.

Take the case of the agricultural worker, who in some counties received as little as 23s. or 24s. a week last year. Thank goodness, we had an interval of a different Government, and as a result of that their wages have now gone up to something in the neighbourhood of 30s. a week, but if a man has 30s. a week and has to pay out of that for Health Insurance and this Pensions Insurance, those who know the conditions of life of workers in the agricultural areas and the claims that the agriculturists, the farmer and the landlord, are making that they cannot afford a penny more in the wages of these people, will realise that, if their contention is right, every penny of this is to come out of the wages of the agricultural worker. We have our fresh air funds to take the children from the towns out into the country, but, from what I have seen of the children in some of the agricultural villages in this country, I think we want a fund to bring them to live in some of our slums in London for a few days, so as to get the standard of living there, because they look miserably lean and thin as a result of their miserable conditions of life; and the Minister would impose a further tax on these people!

I say that, from the moral point of view, as to where the responsibility lies, from the point of view of where the ability to pay lies—we know it does not lie with the. worker, but with the general community—from the point of view of security of getting the benefit under this insurance scheme, from the point of view of the adequacy of the provision made, this is an impossible scheme. We find under this scheme that the widow of next year, whose husband was not qualified because the contributions were not paid or because he happened to be a small trader on his own account, may have to turn out in industry and try to maintain children, without any pension at all, and she will have to pay this tax, while the widow of 20 years of age, whose husband dies after January next year, a strong, healthy young woman, who has never left industry and has, it may be, a good business, without children, is to have a pension of 10s, a week for the rest of her life at the expense of the other poor widow. I say that these great social services which we have now regarded as a national responsibility should be met from the national point of view, and not put on such a, miserably mean and despicable basis as is the whole of this scheme, inadequate in its benefits, uncertain in its provision that they will be obtained, and imposing a burden which it is impossible to bear. From every point of view, I think the Committee, if they think these things out, not from a, party point of view, but from a humanitarian point of view, will agree that when we go into the Division Lobby we ought to have a majority for the Amendment.

Mr. STAMFORD

I think the issue raised by the Amendment now before the Committee is a perfectly simple issue. It is as to whether the cost of this scheme should properly be regarded as a cost to be borne by a section of the community, or whether it ought to be regarded as a cost properly to be borne by the whole of the community. So far as I am concerned, and so far as the Members on this side of the House are concerned, we believe that the cost of a scheme like this, which is to make provision for orphans and for aged people, should be regarded as a cost that ought to be shouldered by the whole of the members of the community. Take the case of the orphans under this Bill. No one, I think, can argue that there is any special responsibility which industry ought to carry, or which the people employed in industry ought to carry, to make provision for children who have the misfortune to be left in that position. I think it would be utterly impossible for any Member on the other side of the House, or for the Ministers who are in charge of this Bill, to. state a case for the consideration of this Committee why employers in industry or workpeople engaged in industry should in any sense be regarded as specially responsible for the maintenance of orphans, as is contemplated in this particular Measure.

Allusion has already been made to the position of the large industrial employer and the smaller industrial employer. I am not going to stress that comparison now, but I am absolutely at a loss to understand the reason which prompts the Government to come to the House of Commons and urge that, in making provision for orphan children, there should be a specially large contribution laid on the large employer of labour, whatever his financial position may be, and that, there should be a smaller contribution laid on the smaller employer of labour, again irrespective of his financial position.

Turn now from the case of the orphans to the case of the aged veterans of industry. This Bill proposes that contributions should be levied on the two partners in industry in order to make provision for the aged people who up to now, so far as they have had provision made for them, have had it made on an entirely non-contributory basis. Again, what are the special reasons why the maintenance of the aged people should be regarded as a special responsibility to be borne by the employers and workpeople in industry? Personally, I regard the proposal to make all old age pensions contributory as being one of the most retrograde proposals in the Bill. After all, when a citizen has given years and years of steady service to the community, it is not a very big thing to ask that, when he reaches the age beyond which he (or she) becomes incapable of being further employed, the State, which has had the advantage of the service of that citizen, shall not withhold from that citizen the opportunity of a system of pensions for which no contribution is called from the potential recipient, because, after all, that is the proposal in the Measure.

If you turn to the Report of the actuary on the financial provisions of this Bill you will find that the contributions payable for entrants at 16 in the year 1926—inclusive of the decennial increases—in addition to providing for the new benefits at the age of 70, will provide for about 20 per cent. of the old age pensions to which they, and in the case of men, their wives and widows, will be entitled. For entrants of 16 in the year 1936, 55 per cent. of the old age pensions will be similarly purchased. For entrants in the year 1946 over 80 per cent. of the old age pensions will be brought on to the contributory basis; while in the case of persons who enter insurance in the year 1956, and afterwards, the whole cost of the old age pensions will be provided by the contribution.

That I regard as one of the most distasteful features of this Bill, and one of the most retrograde proposals in the Measure. It is, of course, perfectly true that the State has to make a certain contribution. It makes no contribution at all for the first year. After that, I believe, it makes a contribution of about £4,000,000 per year for 10 years and an increasing contribution after that. But that is on account of the people who are now getting on in years. It is perfectly clear, according to the Report of the Actuary, that the consequence of the financial arrangements made and embodied in this Bill completely removes the present non-contributory old age pensions, and makes the whole cost of pensions, not only in the interval from 65 to 70 but after the age of 70, a contribution that will bear upon the two partners in industry, the workpeople and the employers. That cuts dead against the policy that has been already embarked upon, so far as this country is concerned, in regard to old age pensions.

It is, I think, a most niggardly and mean proposal. In using those words I do not for a moment think that I am exaggerating. It is a mean, and it is a niggardly proposal, to take away from the old people of this country the advantage that they have hitherto enjoyed of receiving old age pensions—however inadequate they may be—to take away the advantage of the contributory scheme of pensions which does to some extent recognise that the State owes some recompense to those aged workers who have served their day and generation. Consider now where they are placed by this system of contributory pensions contemplated by the Bill. For the various reasons already stated, I think that the party on this side of the House take a perfectly right and proper stand in tabling this Amendment.

I am not going this afternoon to enter into the question of how the money ought to be provided for a scheme of this kind, but I believe it could be found in directions other than those suggested by the Government. In my opening remarks, I said that I believed that the party on this side of the House felt that the responsibility for these charges ought to be regarded as a social responsibility, a communal responsibility, and not in any sense a sectional responsibility. Looking at the matter from that point of view and from the point of view of one who regards this obligation as definitely and distinctly a social obligation, it seems to me to follow that the funds out of which this payment ought to be made are those socially created. I am perfectly certain of this, that the Chancellor of the Exchequer who had the will to put forward a non-contributory pensions scheme would not find it at all difficult to discover funds of a socially created character out of which the cost of this scheme could be borne. On this side we shall go to the Division on this Amendment perfectly confident that we are taking the right step in the attitude that we are maintaining here in Committee this afternoon.

Mr. SNELL

I should like to say a word or two congratulatory on something which fell from the lips of the hon. Member for York (Sir J. Marriott). He told us in his speech that the poor were dying with anxiety to play their part in contributing to this scheme. Those words are rare and refreshing, because we have been led to understand that the whole genius of the poor was diverted to avoiding payment at all, and to getting something from the State to which they were not entitled. It is refreshing to know that when it comes to a question of people having to pay they are to be flattered, though it is a question of their getting something to which they are rightly entitled at the hands of the State.

The Amendment is one in the nature of a principle. We have rightly challenged the fundamental position taken up by the Government. In speaking upon this matter the Minister of Health, dealing with the question as to whether it would be financially possible to do without a contributory scheme, used the usual device on these occasions. He quoted the gross figures, which seem to be alarming, without taking into account at all the national saving, calculable and incalculable saving, that would ensue if this scheme were passed. The right hon. Gentleman probably thought that we should not be alert enough to make deduction. The real fact is that if you take from the gross total of these figures that the right hon. Gentleman mentioned the saving that would come to the nation in other ways, the amount he gave would be very seriously reduced. I want to say that, in fact, the poor do contribute to the funds of the nation in a very real if indirect way. They contribute in character. They contribute by their industry. They contribute in the children that they bring up for the service of the State. They contribute, when the time comes, in the defence of the nation It is really quite ridiculous to assume that nobody contributes service to the nation except he who pays in actual cash. It was further said by the right hon. Gentleman that if you take this money for one thing you cannot have it for another. I should like to say in that regard that the right Bon. Gentleman falls into the old fallacy of the wages fund—that there is a certain amount of money available, and if you take this amount of money for one thing you cannot have it for another. Assuming the first statement of the Minister is correct, the deduction may be allowed, but nothing has been proved more false than the old wages fund theory. There is no fixed amount. There is always an amount which can be expanded to meet national necessities. Other hon. Gentlemen who have spoken have suggested other ways in which it might be expanded.

It was further said by the Minister of Health that, if you do not pay, we shall be compelled to peep and pry into your private affairs. In order to avoid this inquisitorial power, we are expected to submit to paying what should be the natural service of the State on its own account. In conclusion, I only wish to say that the taunt that this was done merely for ejection purposes leaves one cold. Worse things have been used for election purposes. I ask hon. Gentlemen opposite to believe that in bringing this matter before the Committee we are making a leaf contribution to the discussion of this very important matter.

Major HORE-BELISHA

I am afraid that the speech of the Minister of Health has not been fully appreciated! Had it been fully appreciated this Committee would not have been listening now with such restraint to the discussion which is now taking place. The right hon. Gentleman actually made himself responsible for telling us that it is a matter of no importance whether the contributions are 2d., 3d. or 4d., for, in due course, and in the fullness of time, the result of the Government's deliberations would be made apparent, and we would be told upon some other occasion—and presumably upon some other Bill—what relief the Government proposes to extend to those who contribute to this particular scheme. In my submission this is a matter in which it is of very great importance that industry should know, that the employer and employé should know, exactly what they are becoming liable for by way of contribution under this scheme. We who have to vote one way or another upon this Amendment are entitled to be informed before we do so of the considerations for which we are voting. Are we voting to place a contribution of 4d. upon every man engaged in industry, or are we voting to place a contribution which is of less value and less extent. I submit that it is treating the Committee with scant courtesy to withhold that information which the industrial population of the country are awaiting with the greatest anxiety.

It is from that point of view that I rejoice that this Amendment has been brought forward. I should have thought that the Government, under normal circumstances, would have felt itself that this was a very excellent opportunity to give to the industrial population of this country that information which they are awaiting so anxiously at the present time. After all, this matter whether the contribution is to be 4d. or less is one of very great importance. We are passing through one of the greatest Industrial crises in this country. The Prime Minister yesterday drew a very gloomy picture of the industrial situation. Yet the Minister of Health comes here not prepared to tell the House exactly what the true burden of this scheme is likely to be. He said that it does not matter how much it is to be, that it is really a question of principle that we are arguing at this moment—a principle of contributory versus non-contributory pensions. The right hon. Gentleman says that the principle of contribution is of the highest ethical value, and in that somewhat astounding argument he was supported by the hon. Member for York (Sir J. Marriott), to whom, however, we are indebted for a contribution of very great value to this controversy by the assiduous efforts in research, and in public speech, whereby he has prepared the ground for the Bill.

6.0 P.M.

The British workman has a virtue, it seems, which is not found in his richer brethren. If you offer a British workman a glass of beer for which he has not paid he will refuse it. He will say, "This is an insult, I am a. British workman, and I am not in the habit of drinking beer for which I have not paid." I have never seen that same virtue either exercised by, or expected from, the richer and more fortunate classes of the community—those who have wealth which they receive for nothing. They have not shown a very keen desire to make away with it at the very earliest opportunity; and all that I can say is that, if the British workman is anything like me, the more he gets for nothing the more he will rejoice. Then consider the lofty character of contributory schemes.

Whereupon the GENTLEMAN USHER OF THE BLACK ROD being come with a Message, the Chairman left the Chair.

Mr. SPEAKER resumed the Chair