HL Deb 07 December 1937 vol 107 cc360-72

LORD KENILWORTH rose to ask His Majesty's Government whether the Minister of Labour, in summarising the information obtained from the investigation now proceeding as to the cost of living of certain wage-earning families, will give some figures setting out the value of the Social Services received by those families; and to move for Papers. The noble Lord said: My Lords, I have to ask the indulgence of your Lordships in order to ask the Question which stands on the Paper in my name. The reasons underlying this Question are based upon a long experience gained in dealing with matters concerning the relations between employers and employees in the engineering industry and particularly the earnings of those who fall under the heading of wage-earners. Before retiring from business it fell to me to preside over many meetings dealing with such questions. I should explain that meetings such as these were conducted in a very friendly atmosphere, both sides endeavouring to arrive at a fair settlement bearing in mind the claims of the wage-earners and those of industry. In considering the claims of the wage-earners naturally the question of the cost of living was raised. The unknown value of the social benefits received by the wage-earners was always a matter upon which no authoritative information existed, and therefore, in view of the great importance which must be attached to the investigations now taking place by His Majesty's Government through the Ministry of Labour, I beg to propose for your Lordships' approval the suggestion contained in the Question I have placed upon the Paper.

The Social Services cost this country anything between £400,000,000 and £500,000,000 a year and it is self-evident that some part of the community must receive substantial benefits therefrom. Those benefits may be spread over all, but it is fair to assume that the greater part must reach the lowest-paid workers, otherwise the benefits must be regarded as having failed to carry out the underlying intention. In the main those benefits are distributed, as is well known to your Lordships, by His Majesty's Government through the Ministries of Labour, Education and Health. In addition there is very considerable expenditure by other authorities, the county councils and municipalities. In addition to the contributions of the wage-earners themselves, the State and the employers each contribute similar, and in some cases larger, amounts under the unemployment and sickness insurance schemes. Education costs the country through taxes and rates over £100,000,000 a year. It is one of the greatest of our Social Services, but my experience as a governor of a school supported by an old charitable bequest would lead me to believe that the families of the wage-earners do not receive by any means the whole of this amount. The Ministry of Health deals with so many sides of the Social Services that one can only mention housing as one matter to be considered.

It is becoming evident that this matter in various other aspects than the mere cost is receiving careful thought from a large number of people apart altogether from industrialists. Since I placed my Question on the Paper I have been greatly impressed by the presidential address delivered to the Royal Society of Arts by a member of your Lordships' House, the noble Lord, Lord Amulree, who chose as his subject "The State and the worker." With your Lordships' permission I will quote a sentence or two from the noble Lord's address. He said: The welfare of the worker is determined not only by the amount of remuneration which he receives for his services and the conditions under which his work is done but also by the extent to which he is provided with advantages, free of charge or partly paid for by the State, which would otherwise have to be paid for by him or which he would have to do without. Most of what is usually termed social legislation thus comes under review. If your Lordships would take the opportunity of reading that address it would do more to advance the point of view I am endeavouring to raise than any words of mine.

In dealing with this question I am in no way unmindful that wage-earners themselves contribute in a degree to rates and taxes, and I have to express through long experience very great admiration for the spirit in which the best workers of the country—I refer to those in constant employment—contribute to both unemployment and sickness benefit very generally for the welfare of their less fortunate fellows. The present investigation—and this is the important point, my Lords—is likely to set the datum line for the future regulation of wages of our millions of workers, and that is my reason for bringing the matter forward. I have endeavoured to deal with it in the simplest possible manner, not bringing in a large number of arguments to strengthen my case; but in view of the fact that we as a nation pride ourselves upon these great Social Services and the high standard of living enjoyed by the wage-earners of this country, I do think that it is desirable in this present investigation to set out the value of the Social Services enjoyed by the families of our wage-earners. Those services have an important effect upon the family budget, and I therefore hope that my suggestion will meet with a favourable reception from your Lordships. I beg to move.


My Lords, first of all I would like to thank the noble Lord, Lord Kenilworth, for his great courtesy in sending to me a great deal of information on the points which he intended to raise this afternoon. That courtesy enabled me to consult the authorities in the Treasury on this Question. I would like to point out to your Lordships that the inquiry which is going on at present under the direction of a Committee advising the Minister of Labour is one that deals with the cost of living. It is capable of exact results, in that the object of the inquiry is to obtain particulars of the expenditure of representative sections of wage-earners and small-salary earners. The Ministry have compiled a form which has been sent round to selected households—some 40,000 of them—who are asked to make a return of expenditure for four separate weeks in four separate quarters. The return will deal with expenditure on food, rent, fuel, light, clothing, furnishings, cleaning materials, travelling, tobacco, newspapers and books, entertainment and other items of weekly expenditure which the ordinary wage-earning household has to make each week. The inquiry is not designed to give a return of the wages received, nor does it deal with the amount of unemployment benefit or allowances which any individual family may receive. Consequently the return when it is complete and analysed will give an average—a sort of sample of the expenditure of the whole of that part of the community. That does not give the value of the benefits or allowances which are obtained through the Social Services or the various insurance services. This is the sort of form that the Minister of Labour is sending out; it is a very long and detailed form, and I have no doubt that when this inquiry is complete we shall know a great deal more than we know now of the cost of living to the average working-class house.

The noble Lord, if I may say so, expressed himself extremely well in putting to your Lordships' House the suggestion he makes. I understand that this is the first time he has had the honour of addressing your Lordships' House. I hope that he will often address us again, and give us the benefit of his great experience in these matters. The difficulty with which I have to deal in relation to his request is one of feasibility. There is a difference, of course, between the cost of living and the standard of life. The cost of living is an exact thing which you can more or less determine; every household knows what it means in terms of cash. The standard of life certainly includes the cost of living, but it also includes a great many other things which a country provides for its citizens. Therefore, when we try to give a cash value to those other considerations which are provided under the Social Services it is extremely difficult to find a form in which to give that value. It may be perfectly clearly stated that no inquiry of this nature made to individual households would give us a really sensible return. In other words, it would be quite impossible to ask those various households to say, in terms of cash, what they receive from the expenditure on education, the subsidised housing or the various insurance schemes from which they may hope to benefit in the future.

To give an example, although it is true that a woman, possibly with a child, may become a widow early, or an orphan during the lifetime of her husband, it is not true to say that there is no value for her in a future pension scheme for widows of sixty-five. It has value, because it gives security for the future. Exactly the same principle applies to unemployment insurance. Even if a man is not drawing any benefit, his insurance has obvious value in giving him security, for he knows that if and when he goes out of work he will have this benefit to help him. Again, if an insured person is going to draw a pension at the age of sixty-five, it is untrue to say that the pension has no value at sixty-four and a half. It has a potential value, which will be actual at sixty-five. The noble Lord, Lord Mottistone, has complained that I am addressing the noble Lord who asked the Question. I apologise.


Not at all, but the whole Liberal Party are anxious to hear something of what you say!


It is therefore difficult to give a contingency value to those potential services. That is one of the difficulties which you have to face in dealing with this very difficult question. Then there are the other Social Services in addition to education and subsidised housing; there are the public health and public assistance services. It would be extremely difficult for a household to give those services a cash value. We must not overlook the fact that on the other side you have to take note of the various contributions which the worker makes. He makes contributions to his unemployment insurance; he certainly makes contributions through rates and taxes to the various forms of social service provided by local authorities. Therefore the difficulty of arriving at a clear-cut household value is to my mind almost insuperable. The authorities who are engaged in watching this matter and who compile figures every year on the subject all feel that the only way in which it could possibly be approached would be to have a close examination made by actuarial experts of the whole field of national expenditure on these Services, and then to arrive at some sort of problematical figure for the individual value received. Even then the figures would be of little value, because they would not be exact figures but only problematical figures. For that reason it is extremely difficult to do what the noble Lord suggests should be done.

Every year a return is made of the expenditure on the Public Social Services. Perhaps it is not very widely known, but in the last return, on page 7, in columns 13 and 14, will be found the expenditure under the heading of each of our Social Services, with the total expenditure for the year, and the number of persons directly benefiting from it. The last total made up amounts to the enormous sum of £488,000,000. These figures can only be analysed by real statistical and actuarial experts. The various sections of this expenditure are carefully watched by His Majesty's Government, and I am advised that they do not consider it feasible to attack the Social Service expenditure in the way of bringing it down to a definite cash value for individuals by means of an inquiry such as is being carried out now into the cost of living. Therefore I hope the noble Lord, who has so well introduced this question in your Lordships' House, and who, I am sure, will cause thought to be directed to it by those responsible, will not be too disappointed at the reply which I have been able to give him.


My Lords, I think many noble Lords will be greatly obliged for the very lucid explanation which has been given to us. It has made the point perfectly clear, for it has proved to us that the return is going to be perfectly valueless. The noble Lord started by saying that the return would enable us to know what was the cash value of the cost of living. He then told us that there were insuperable difficulties connected with the suggestion that had been made. I have great sympathy with what my noble friend Lord Kenilworth said. I have been interested for a long time in industrial matters, and I ask myself how can one say what his cost of living is if someone gives him his rent, if someone pays for his doctor, if someone pays for the schooling of his children, and for everything he has, except bread and cheese. To give a return leaving out all that has to be spent in order that a man may lead a decent life is to give a return which is valueless. I had no intention of speaking, but I have come to the conclusion that it is merely waste of paper, ink, pen and time to send round such a return.

There is an easy way of getting what is the cost of the Social Services. I speak entirely from memory now, but I remember that during the current year a statement was made in another place that the tax cost of Social Services this year was £215,000,000. Expenditure raised by taxation amounted to £860,000,000, Debt Services and Defence amounted to £425,000,000, which leaves a balance of £435,000,000, and out of that £215,000,000 goes to Social Services. If my noble friend throws in his hand and says that the difficulties are insuperable, he can obtain the information he requires from the Treasury Return of 1937. There he has it. £215,000,000 this year is provided out of Imperial taxation, quite apart from the amount raised by local rates for public services, partly provided by the men who receive the service back again—namely the working people. I have complete sympathy with what was said by my noble friend behind me, and I am surprised that the Department should give such an answer as they have given, because they have told us, here and now, that the pink paper they are sending round is quite valueless, and I believe it is if the Government cannot add Social Services to the total.


My Lords, may I join in congratulating the noble Lord, Lord Kenilworth, upon his first and very interesting contribution to our proceedings? When I read his Motion on the Paper, I thought there was a catch somewhere, and it very soon exposed itself in the very lucid and clear address which the noble Lord gave. He and other great captains of industry are apparently looking for some such figures as the noble Lord who spoke last referred to, in order to say: "Oh! yes, here are the cost-of-living figures, and here are the wages, and here is the value of the Social Services. You are getting too much, and we can knock something off." The noble Lord smiles. I am not suggesting that he would do so personally, but he knows that if these people can get hold of certain figures which represent the unseen wages, as they call them, of what they call the wage-earners, they will have a bargaining point which will enable them to bring pressure to bear upon trade unionists, or members of the wage-earning class, the employees, to take less wages. Therefore, I was very glad to hear the noble Lord, the Paymaster-General, say that it was not practicable to give these figures. Neither is it. It is quite impracticable, and I am very surprised that such an experienced member as the noble Lord who spoke last should say that it was practicable. These Social Services are provided for everyone. The noble Lord himself, if he goes into a public park, is getting the benefit of Social Services.


I do not wish to hide the fact that I am getting the benefit of Social Services. I know it, but why should other people not be ready to disclose it?


How can we sum up what is the amount of the benefit? The noble Lord and Lord Kenilworth could send their children and grandchildren to secondary schools if they wanted to. In Germany it would be compulsory, under the Nazi régime, which some people in this House appear to have a hankering after. In America it is done voluntarily. It only happens to be our custom in this country, if we have a certain income, to send our children to private schools, but we are quite legally entitled to send them to secondary schools. Lord Kenilworth mentioned the amount which is spent on education. Supposing he has a grand-daughter who wishes to come up to London and study art. All the art schools in London get a grant from the London County Council, and I, as a resident in London, help towards the paying of that grant through my rates. The Paymaster-General was perfectly right in saying that you cannot assess the value of these Social Services. When I saw the noble Lord, Lord Mancroft, to whom I used to enjoy listening in another place, rise this afternoon I thought he was going on another line. I thought he was going to say that the cost of Social Services was too high, that we were being too extravagant, and not earning what we were spending.


The noble Lord was wrong again.


I was hoping he was. I rather agree that at the present time our expenditure is very high, and that, with the adverse balance of trade, it is a rather serious state of affairs. I think it is deserving of attention, and very close attention. I think the expenditure, local and national, is high to-day compared with the volume of trade which we are doing, and taking into consideration the adverse balance of trade. I think it is a great responsibility upon the Government. But that is another story: we are paying for the wrong fiscal policies which the present Government and its immediate predecessors introduced. With regard to this Question of what the so-called wage-earners get in the way of Social Services, as all noble Lords have mentioned they help to contribute to the cost as taxpayers by every pipe they smoke, every glass of beer they drink. Yet I still think the standard of life of the masses of the people in this country is far too low.

But the cost of living and the standard of life are, as has already been said by the Paymaster-General, very correctly if I may say so, very different things. A tremendous lot depends on the household economies of a man drawing a certain wage. One man may have a clever wife, probably a Scotswoman, who knows how to manage the family budget and is a good cook. That man may be better off than his neighbour, who is a feckless creature and has not been brought up properly, and consequently has not the same standard of living. We cannot assess these things. But what I do say on behalf of the Party I now represent in your Lordships' House and for whom I speak, is that the standard of living of the people, taking into consideration wages, Social Services and everything else, is too low. In great categories of workers— agricultural labourers, coal miners and others—the standard of life is too low and it ought to be raised; and I wish the Government would show more energy in trying to raise it.


My Lords, before your Lordships leave this subject I am sure you will excuse me a moment if I say one word upon quite a different aspect of it. I did not know it was possible in this debate to raise the Party issues in the sense that my noble friend Lord Strabolgi has raised them. There is no dispute, least of all with the noble Lord, Lord Kenilworth, about the fact that we want every working-class family to be as well off as they can possibly be. I see what is in the mind of Lord Kenilworth, whom I have known for twenty or thirty years; he wants to get a just estimate of what I may call the budget of the working-class family during the inquiry which is now proceeding. Nobody who knows him would dream that his idea was to reduce their standard of living by showing how much they get from the State. On the contrary, I know his object is—because he has helped so much in the matter to which I am going to refer—to try to make the division in this case fair and just so that one particular family shall not be put down as getting more than another class of person, and so that we may know just what is coming in arid what is going out.

I came here this afternoon because, as I always have to do, I must keep a vigilant eye open if I am to continue to be the senior trustee, if I may so say, of the £1,400,000,000 the people have saved, to see that nothing is done to militate against that wonderful movement, which can only survive if it is fairly treated. Of course there is a danger that when you are going to assess the value of working-class incomes you may forget those outgoings which, although they are not compulsory by law, nevertheless are standard and continuing. Now of course it is quite true that there are certain things we should ascertain from the return that the noble Lord, Lord Kenilworth, proposes.

With regard to the public services I think it was indicated by the Paymaster-General that one could almost arrive at the gross amount that was coming in. But that is only what the State provides. When you really come to look into a working-class family budget, as I have had to do these last ten or eleven years, you will find out really what its members have got to spend. Not only have they to provide for the deductions from wages, but they have to provide these sums for national savings of various kinds on which the well-being of the whole household depends; for the children's education depends absolutely and entirely in many cases on the savings that they are making, and if they stop saving the hope of the boy of a very poor household going perhaps to Lord Kenilworth's own works and becoming a captain of industry, as has often happened, is banished like a dream. So I respectfully say to the Paymaster-General that when this is put in another form, as assuredly it will be, and before we spend any more money, let us see what the working-class family really gets from the State. When we see that it gets all this, that and the other, as indeed we rejoice that it does, let us not forget these voluntary contributions which, though they are not established by law, are as essential in the working-class home as is anything that is demanded by the rent collector or the tax collector.


My Lords, I have nothing to complain of in the terms of the speeches of the noble Lords who have spoken on this Motion. I think that my noble friend Lord Mancroft has mistaken slightly what has been asked. We can give, and we will give, exact figures for the items in the cost of living; but what we cannot assess accurately in cash value is what the individual families receive through the Social Services. That can only be got, as I am told by experts, by a careful scrutiny by actuaries or statistical people, and then by getting an approximate figure—it could never be an exact figure. Therefore I think we must be content with the knowledge of the total sums which we spend on the various forms of Social Services and the total number of people in this country who receive benefit therefrom. Now I turn to the noble Lord, Lord Mottistone, and we all congratulate him on the marvellous success of his savings campaign, which he has so devotedly carried on through all these years. The wonderful prosperity and resilience of our working classes are shown by the way in which they have been able, through the savings banks, the Post Office Savings Bank, and the various savings certificates which are sold, to accumulate the enormous sums of money that they have. I think that this expenditure of £488,000,000, as the amount was last year, on the Social Services, goes a long way towards enabling those working-class families to be provident to that extent.


My Lords, I would like to thank the Paymaster-General for so courteously replying to my points, and I fully appreciate the difficulty in obtaining this information. I quite understood that it would have to be obtained actuarially and could not be embodied in the returns from the households. If I may I would like to say to the noble Lord, Lord Strabolgi, that the points he endeavoured to make against me were actually admitted by me in my few remarks. I said that the Social Services were for all, and though a great part of the vote for education goes to the poorer people I fully appreciate that it goes to the Universities as well. I thank your Lordships for your attention, and in view of the difficulties in obtaining this information I beg to withdraw my Motion.

Motion for Papers, by leave, withdrawn.