THE EARL OF CARNARVONrose to call the attention of Her Majesty's Government to the principle of insurance against sickness and old age under public guarantee. He did not, on this occasion, seek any definite answer from the Government on the subject, and his remarks would be very brief; he only wished to point out how closely connected it was with the system of poor relief. It was principally as the question concerned the agricultural poor that he wished to consider it, although there were many other views in which it might be regarded— for instance, as it applied to the poorer classes in large towns, in which there was even more sickness than in the rural districts. He thought every one of their Lordships who had been a member of a Board of Guardians must have become aware of how unsatisfactory a character was the system of out-door relief—he might go further and say, he must have become well aware how unsatisfactory was the condition of the agricultural labourer. When the agricultural labourer fell into decay he had but two alternatives before him, miserable penury or the workhouse. He did not wish to bring any indictment against the Poor Law, as, in many respects, it fulfilled the purposes contemplated by it; but no one would deny that it was open to certain objections. In the first place, it encouraged on the part of large classes dependence on the help of others, and conversely it discouraged independence. It was again 1182 quite evident that it was conducted with very great inequality in its administration, harsh in one parish, extravagant in another a few miles off. As an example of this, he had got some figures respecting the workhouses of Bristol and Bath, where the relative number of paupers was the same. In Bristol, with the same number of paupers as Bath, 119 gallons of wine were consumed in one year, as against four gallons at Bath; 171 gallons of whisky, as against six gallons; and 7,400 gallons of beer, as against 500. He did not say this extraordinary inequality prevailed in every workhouse; but it showed, as most noble Lords were already aware, that in one case the Poor Law could be administered with extreme economy, and in another with great laxity. The result was that thrifty persons, removed just above the level of pauperism, were severely taxed to provide for those who were improvident, and the country was, in consequence, taxed enormously. It might be answered that there were already existing two national institutions which met the case in point—namely, friendly societies and the system of Government insurance. Nothing could be better than the system of Government insurance as far as it went; but it was open to three objections. In the first place, it was perfectly voluntary; in the next, the payments for Government annuities were in most cases continuous year by year; and, lastly, Government annuities provided only for the case of old age, and not also for sickness. Friendly societies, however provided for sickness, and where those societies were founded on sound principles the requisite provision existed. But a large proportion of the population—about 75 per cent of the whole male population—had no part in these friendly societies. Then a great number of these societies were absolutely insolvent, having been founded on rules and principles radically unjust and unsound. It was a remarkable thing that last year out of the registered societies alone no less than 155 broke. How many more, then, of the unregistered societies must have met a similar fate? There could be no doubt that many more of these had broken. Again, in times of distress large numbers were unable to continue their subscriptions, and so left the societies. There was a society in Hampshire with which he was acquainted, founded on the most solvent principles; 1183 and yet in the time of distress last year of the whole number that joined two-thirds were compelled to leave it, being unable to pay their subscriptions. No one who knew the condition of the agricultural classes could doubt that its male members could, were they so minded, easily save a considerable sum as a provision for the future. It was well known that during the past year there had been a large consumption of spirituous liquors, and a great deterioration in labour. From statistics collected by the Chamber of Agriculture it was shown that during the last three years there had been an increase of wages to the extent of 50 per cent, and a diminution of the quality of the work in exactly the same amount. The plan he had to suggest was this— that every man should be compelled, before he was 21 years of age, to invest, through the Government, a sum not less than £10, the accumulated interest on which would form a provision in case either of sickness or of old age, and he would thus be saved from the necessity of going into the workhouse. That a young man could easily save that sum no one would doubt. He himself knew scores of cases where such a sum had been saved before a young man attained his majority, and scores on scores where far more than that had been squandered in drink, or otherwise frittered away. Now, was any remedy possible for this state of things? In great measure the evil was irremediable; but in another point of view a great deal might be done; and in order to ascertain what was possible, and how much could be done, it was necessary to distinguish between outdoor and in-door relief. In-door relief was repugnant to many; and, therefore, if it was possible to deal with the greater part of the poorer population by means of Government insurance, that portion which remained would be more capable of being dealt with by a system of uniform administration. And to effect this latter end still more than at present, he would merely, in passing, refer to a proposal, assuming the shape of a movement of considerable extent throughout the country, for placing in-door relief under Government administration in the same way as the prisons. When, however, they came to the question of out-door relief, it was perfectly possible to consider the subject of insurance. Under public guarantee two 1184 kinds of insurance were possible—voluntary or compulsory. Voluntary was by far the best, the only objection to it being that so long as men knew they could come upon the parish for their 2s. 6d. per week, and so long as they looked at this as the final escape from their trouble, so long would it be almost impossible to accept the principle of voluntary insurance. If it was clear that the only escape was the workhouse there would be much less reluctance to come into a national society, with a Government guarantee, to provide for old age. As regarded compulsory methods, a distinguished friend of his, well versed in these matters, had made a calculation showing that the accumulated interest on a sum of £10, contributed at the age of 21, would enable a payment of 8s. a-week to be made. If this was to be done, it would, of course, become absolutely necessary to enable employers to take the weekly contributions out of the wages of their employés and pay it over to the Government. This was not a new idea. It had been adopted in some countries abroad, and a somewhat similar course had been adopted as regarded our sailors; it had been adopted in the Army, and it had been already sanctioned by legislation in regard to the school fees of factory children who were on half time, and in each case with success. As regarded the advantages of such a scheme, he thought they were obvious. It would not only be beneficial to the individual, but it would relieve the taxpayer from an enormous load of taxation in the shape of poor rate, which the thrifty class had to pay for the support of the unthrifty class. Not one penny of the cost of carrying out the proposal need be thrown upon the country, while the subscribing individual would have as security the national guarantee. The machinery for carrying out the scheme was already at hand in the form of the Post Office Savings Banks. The money would be paid at a time when a man could best afford to save the money; and it would be paid once and for all, instead of being continuous from year to year, and consequently dependent partly on the resolution of the man himself, and partly on his varying circumstances. It might be urged against the measure that it tended to centralization; but it was absurd to put forward such an argument as that at 1185 this time of day. He had thus briefly touched upon the points of the proposal in order to bring the matter under the notice of Her Majesty's Government. It might be possible to sweep away the mass of pauperism which existed so largely in this country, and which, cancerlike, was draining away the life of the country; but by adopting some such proposal as he had indicated much might possibly be done to mitigate its effects; and those who did their best to promote such schemes were undertaking a task which was worthy of their best efforts.
§ EARL STANHOPEsaid, he had always taken a considerable interest in this subject. He thought the operation of Post Office Savings Banks would have to be considered before the scheme of the noble Earl could be adopted. In his opinion, the Post Office Savings Bank system ought to be developed, and extended to every village in the Kingdom, and that by those means much might be done to encourage thrift among the lower classes. The existing Post Office Savings Banks were not sufficiently well known, moreover, they did not take any less deposit than 1s., and the interest they paid was exceedingly small. He thought much good might be effected by allowing smaller sums to be deposited. And he could not see why the State should not accept small deposits into the Consolidated Funds, as was the practice in Prance. The success of the Penny Banks in London and the North of England showed what might be done in the matter, and the French system was an instance of the success attending the reception of very small sums. He sincerely trusted that the Government would consider this great question of extending the usefulness of Post Office Savings Banks throughout the length and breadth of the land.
§ EARL GRANVILLE, while fully admitting the importance of the question which had been raised by the noble Earl, and the wretchedness involved by pauperism, was not in a position to state that it was the intention of the Government to bring forward any proposals upon the subject in the sense of the suggestions of the noble Earl. It was, no doubt, a matter of great interest; and some years ago a Royal Commission sat to inquire into the subject of what provision could be made in the matter of national assur- 1186 ance against death, old age, and sickness. The Report of that Commission went fully into the matter, and as a result of their inquiries were based alterations in the Friendly Societies Act, which he believed to have resulted in improvement as regarded the encouragement of feelings of self-respect and independence among the working classes. In reference to insurance against death and old age, measures had already been taken by the Post Office Savings Banks to insure payment to persons of an amount at death and old age in the shape of deferred annuities. In regard to sickness, however, the Commission reported against the Government undertaking the matter. They thought that the difficulties would be enormous, and that the Government would be unable to protect themselves against imposition. The Government, therefore, undertook no responsibilities in regard to it. One result of the inquiry was the appointment of a Registrar and Assistant Registrars of Friendly Societies, and the adoption of steps for regulating and controlling those organizations. Their Reports, presented periodically to Parliament, tended to place a check upon the abuses and mistakes which had previously marked the conduct of these societies. He was not aware that the Government had any information which would justify them in going beyond the action which had been taken on the Report of that Commission.
THE BISHOP OF WINCHESTERthought the scheme proposed by the noble Earl (the Earl of Carnarvon) was one worthy of consideration; but he thought nothing definite should be attempted until inquiry had been made by means either of a Commission or a Committee. The great majority of persons, who came upon the rates had been improvident or intemperate, or both, in early life; and, therefore, any scheme which would compel them to cultivate a habit of saving, and therefore of self-denial, must be of advantage to them as far as their moral nature was concerned. It would be no particular hardship upon men of the working class, who, as a rule, earned as much between the ages of 18 and 21, when, as a rule, they were unmarried, as they did ten years later, when the responsibilities of married life were upon them, to be called upon during those three years to save a sum 1187 of £10; and, as far as the middle and upper classes were concerned, they would have the prospective advantage in return for their payments of an abolition of poor rates for the provision of out-door relief.
§ LORD COTTESLOEthought the scheme of the noble Earl well worthy of consideration. It was true, as the noble Earl opposite (Earl Granville) had stated, that a Royal Commission reported some years ago on a cognate subject; but no such plan as that of the noble Earl was before that Commission, and, therefore, he thought that further inquiry might be instituted with advantage. Bills had been introduced in the other House of Parliament for giving facilities for investing small sums in the public funds, and for extending the powers of the Post Office Savings Banks; and he thought they might go a step further, and provide for a system of self-insurance, under Government guarantee, such as had been suggested by the noble Earl. He recommended that a Select Committee of their Lordships' House should be appointed to inquire into the subject.
§ THE EARL OF REDESDALE (CHAIRMAN of COMMITTEES), said, that he did not understand how the making a young man provide compulsorily before he was 20 for his maintenance in sickness and old age would lead to habits of thrift when compulsion existed; and he pointed out that, though the subject was one of much importance, there were practical difficulties which required the most careful consideration. Among these were the questions of what was to be done with the money in the way of investment, what rate of interest was to be paid, and how it was to be secured against fraudulent diminution by want of care and honesty on the part of those persons who were to be intrusted with the management of the fund.
THE EARL OF KIMBERLEYsaid, he believed the scheme suggested by the noble Earl to be utterly impracticable. They had been told that it would encourage thrift; but the compulsory taking of money from a man was not thrift, and many persons might find themselves in such positions that it would be very hard upon them to take any part of their earnings. Then, again, the scheme would place an enormous burden upon the Government, not only in the ma- 1188 nagement of a vast fund, and in the machinery to carry it out, but in the laborious inquiries it would involve. Many persons would evade payment, many employers would be defaulters— in short, what responsibilities would not the Government incur in connection with it? The scheme had a very taking appearance at first; but he thought it would be found impossible to work.
THE LORD CHANCELLOR, said, that, so far as he had been able to think the matter over, he was very much inclined to concur with the noble Earl who had just spoken. He desired to point out one difficulty in addition to those just mentioned by his noble Friend which now occurred to him, and that was, that the scheme would involve a serious interference with the labour market. They would, he thought, find that young men would not be content to receive less for their labour than the full market rate, and the result would be that the burden of the tax would fall upon the employer.
§ EARL FORTESCUEsaid, that he had had more than 20 years' experience as president of a very large friendly society, and knew that frauds were frequently perpetrated even on those societies at present. The Government would certainly be considered a much fitter object of plunder; and he earnestly warned them against undertaking the administration of any system of sickness insurance. There was no thrift in the scheme, for thrift was the voluntary exercise of self-denial, and was not a matter of compulsion.
THE EARL OF PORTSMOUTHsaid, that, as President of the Hampshire Friendly Society, he had taken great interest in this subject. He complained that the new Friendly Society's Act did not go far enough. It did not insist upon security for the assured. He believed that if the Government undertook an extensive system of insurance such as that which had been suggested, they would have such great difficulty in fixing the rates of premium that they would have, in fact, to make the good lives pay for the bad. In the case of the friendly societies, they rejected many lives which must necessarily be accepted under a national system, where good and bad lives would become the subject of insurance. The great difficulty in the way of the poor insuring in friendly societies or 1189 clubs was the want of security. He knew as a fact that in one Union more than half of the old people in the workhouse had been obliged to go there in consequence of having lost their insurance money by the breaking up of parish clubs. There was a great temptation in the way of such societies breaking when they had many old and sickly members; and many of them in such circumstances divided the money, wound their clubs up, and robbed the poor people of that to which they had looked forward as a provision for old age.