might have been generally accepted as decisive. But many of the
supporters of the Government had at the election made speeches in
favour of old-age pensions. One of its most powerful members had
thrown his weight into the scale. The idea had taken hold of great
sections of the working classes. The trade-unions, that see in
increasing old-age poverty the chief drawback to their policy of
enforcing in each trade a uniform and minimum wage, were naturally
delighted that the State should undertake, out of public funds, to
remove their difficulty. A number of Bills dealing with the question
had been introduced into the House of Commons by private members; and
the reluctance of the Government to take it up had become a favourite
form of party attack. The Government acted as perhaps most
Governments, under the circumstances, would have done. While refusing
to give any pledge, and repudiating any sympathy with the idea of
universal pensions, and insisting that an encouragement of thrift
should be an essential condition of any old-age pension scheme, they
refused to admit that a false departure had been made; and they
appointed a new Committee--of which the writer of these lines was a
member--to report upon the best means of improving the condition of
the aged deserving poor, and upon the feasibility of dealing with
their case by old-age pensions.
Mr. Chaplin, the President of the Local Government Board, an
experienced and very popular member of the Cabinet, presided over the
Committee; and the fact that he drew up the report of the majority
gave that report its chief political importance. The Committee
consisted largely of members who had already committed themselves
deeply in favour of old-age pensions; and it will hardly be disputed
in England that it carried with it much less financial and political
weight than its predecessors; and that the majority report--which was
carried by 9 to 4--is more remarkable for the boldness of its
recommendations than for the cogency of its reasoning. It completely,
and almost contemptuously, discarded the conclusions of the majority
of the Aberdare Commission, and the unanimous opinion of the
Rothschild Committee; and it recommended that old-age pensions,
derived in part from Imperial and in part from local sources, and
varying from 5_s._ to 7_s._ a week, should be granted to all the
deserving poor who had attained the age of sixty-five and whose
incomes did not exceed 10_s._ a week. It proposed that these pensions
should be granted by committees established in every poor-law union
and elected by the poor-law guardians; that they should be revised
every three years; and that they should be distributed through the
agency of the post-office.
On the great difficulties that seemed so formidable to its
predecessors it touched very lightly. How many of the poor were likely
under the proposed system to become pensioners, and what burden of
taxation was likely to be thrown on the State, were questions that
were put aside as irrelevant to the inquiry. To meet the enormous
difficulty of deciding upon the real merits, and of investigating the
real circumstances, of the great masses of independent and industrious
labourers who live in the manufacturing towns, or are constantly
moving from one great centre of population to another, and circulating
in quest of work through the whole extent of the Empire, it was
suggested that the relief be confined to those who were resident in a
single locality; and it was pointed out that a number of charities,
endowed out of old legacies or donations, and applying to particular
classes or districts, had come to be administered by the Charity
Commissioners, and that in this restricted field they had been able to
convert a large part of the income at their disposal from doles into
permanent pensions.
The thrift test and the character test, which previous inquirers had
found it almost impossible to establish on a satisfactory basis, were
defined on the loosest lines. The pensioner must not, during the
preceding twenty years, have been sentenced to penal servitude or
imprisonment without the option of a fine; he must not, during the
same period of time, have been in receipt of poor-law relief 'other
than medical relief or unless under circumstances of a wholly
exceptional character'; and he must have 'endeavoured to the best of
his ability, by his industry and by the exercise of reasonable
providence, to make provision for himself and those immediately
dependent on him.'
The extreme vagueness and the extreme elasticity of such provisions
are sufficiently manifest; and it is difficult to see how they can
give any real assistance in practical legislation; while they leave
the door open to the largest and most lavish expenditure. I have
endeavoured in a minority report to deal with these questions at
somewhat greater length than my present space will admit; but a few
pages may suffice to give an outline of the case of those who believe
the new policy to be both mistaken and dangerous.
Nothing is more certain or more cheering in the condition of modern
England than the extraordinary diminution that has taken place, during
the present generation, in pauperism. It began with the reform of the
poor law in 1834; and although it has been found possible to relax
greatly the stringency of the poor-law regulations that were then
made, it has steadily continued. Much of this is due to the increase
in the rate of wages which has taken place in most departments of
English industry, and which has been accompanied by a great decrease
in the cost of most of the chief necessaries of life, as well as by a
considerable reduction in the hours of work. Sir Robert Giffen, in the
very remarkable paper which he published, in 1883, on the condition of
the working classes in England during the preceding fifty years, has
shown that in every class of work in which it is possible to make a
comparison the wages of the labourer have in these fifty years risen
at least 20 per cent., and in most cases between 50 and 100 per cent.;
and he has clearly demonstrated that no other section of the community
has obtained so large a proportion of the increase of the national
wealth, and improved in so great a degree in material prosperity.
But the mere increase of wages is but one element of this improvement.
The very mainspring of the prosperity of the great masses of the
British working classes is to be found in their increased sobriety,
and in the habits of thrift and providence that have followed the
spread of education. The statistics of the Friendly Societies, the
Industrial and Provident Societies, the Building Societies, the
savings-banks, and of countless other institutions, created by
voluntary working-class effort for the purpose of insuring against
sickness or death, and providing working-class investments, attest in
the clearest manner the rapid growth of provident and thrifty habits
among the wage-earning classes. In no other respect is the improvement
of the nation so marked and so indisputable and no element in the
national character is more important to its prosperity and to its
enduring greatness. In the evidence that was brought before our
Committee, it was shown that since 1849 the pauperism of Great Britain
had been reduced from 62.7 per 1,000 to 26.2 per 1,000, if lunatics
and vagrants are included, to 22.8 per 1,000, if lunatics and vagrants
are excluded.
The first, and most vital, condition of any sound legislation for the
relief of poverty is that it should not impair these industrial
qualities, or weaken these vast voluntary organisations of self-help
which are their result. Can it be said that the old-age pension policy
is compatible with this condition?
It proposes to open, in addition to the existing system of poor
relief, a new fund, amounting to many millions of pounds a year, and
drawn from compulsory taxation for the purpose of subsidising simple
poverty; a fund to which it is to be rather creditable than otherwise
to resort; a fund which is intended to deal, not with exceptional
calamity, but with that which springs from the mere efflux of time,
and which is, beyond all others, the most normal and most easily
foreseen. It proposes to teach the whole working population to look to
the State, and not to themselves, for the provision for their old age,
and for the old age of those who might be dependent on them, and thus
to destroy the most powerful of all motives to thrift--the very
mainspring of productive and self-sacrificing industry. And it
proposes to do this at a time when wages are higher than they have
ever been before; when voluntary societies for securing the poor from
want are flourishing and increasing as they have never done before;
when the rapid decline of pauperism is one of the most marked and most
universally recognised signs of national improvement. Can it be
seriously believed that the addition of many millions a year to the
State funds directly employed in the relief of poverty will, in the
long run, tend to diminish pauperism or to encourage self-reliance and
thrift?
Mr. Chamberlain and the other more considerable advocates of old-age
pensions clearly see that if such pensions are to be of real value
they must discriminate between the deserving and the undeserving; and
they believe that they may have the effect of stimulating, instead of
weakening, thrift. For this purpose several schemes have been devised.
The most popular Continental method of achieving this end is by a law
obliging the working man in early life to insure against old age, and
by supplementing the income derived from this insurance by a State
subsidy. In Germany, where this system is actually carried out, the
old-age pension is derived from three sources--viz. compulsory
insurance by the workers, compulsory contribution by the employer, and
a State subsidy. Compulsory insurance found for many years a powerful
English advocate in Canon Blackley; and it has been recommended by a
recent inquiry in Holland, which, however, refused to propose any
system of old-age pensions. According to the best accounts, the German
system has been far from successful either economically or
politically; and it has certainly not prevented Socialism from
becoming one of the great dangers of the State. Into this question,
however, it is needless to enter, as it is now universally admitted in
England that compulsory insurance for old age is an impossibility; for
it would certainly be repudiated by the working classes.
A large group of proposals are to the effect that old-age pensions
should be granted to all poor persons over the age of sixty-five whose
total income is less than 10_s._ a week, provided that a certain
portion of that income consists of a fixed annuity acquired by their
own industry and thrift. It is urged that in most of the great
branches of industry a deserving man in his earlier and stronger years
could easily earn such an annuity; and it is suggested that the State
should double it, or add to it sufficient to make it up to 10_s._ a
week, or supplement it by a fixed grant of 2_s._ 6_d._, or 5_s._, or
even 7_s._ a week.
The objections to such schemes are very serious. It is obvious that if
they encourage a workman to save up to the amount required to secure a
pension, they would have a directly opposite effect as soon as that
amount had been attained. The first result of any addition to his
income would then be to disqualify him for a pension. It is also
obvious that the pensioner of sixty-five would have a strong
inducement to abstain from the work he could easily do, and that if he
continued to do it he would compete on exceptionally favourable terms
with the workman who, though he had passed the prime of life, was not
yet entitled to a pension, restricting his means of employment and
beating down his wages. Many of the most necessitous and deserving
poor would also be left unrelieved.
Although it is true that in the more flourishing trades men could
easily in early life save out of their wages a sufficient sum to
acquire this annuity, there are large fields of industry in which such
a saving would be almost or absolutely impossible. We have had
melancholy evidence of how utterly insufficient most forms of women's
wages are to provide the needed margin. The same thing is true of the
agricultural labourer in the more depressed districts in England and
in large tracts of Ireland and Scotland. Even in the more remunerative
employments innumerable special circumstances would prevent a thrifty
and deserving man from obtaining this annuity. Certainly no one is
more deserving of compassion and State aid than the widow and young
orphans of a working man; but the scheme we are considering would not
only not help them, but would most seriously injure them. It is a
direct incentive to the workman to sink his savings in an annuity
which would terminate with his own life.
The whole policy, indeed, of attempting to turn all working-class
savings into this one channel is a false one; and it has been shown
that no kind of saving is in fact less popular among working men than
the purchase of a deferred annuity. I may here be allowed to quote a
few lines from my own report:
'In the infinitely various conditions of a working-man's life thrift
will take many forms, and an attempt to prescribe a single form is
eminently injudicious. The whole life-plan of a farmer whose farm will
remain with him to the end will be different from that of an artisan
or a domestic servant whose power of earning a livelihood depends
entirely upon his physical strength. The former will probably find it
most profitable to expend his savings on the improvement of his farm.
Where the system of peasant proprietorship prevails most agricultural
thrift is directed to the purchase and enlargement of farms. In
Ireland it is largely directed to the purchase of tenant right, or to
enabling the younger members of the family to emigrate.
'Nor is it true that even the artisan will find the purchase of an
annuity the best thing to be aimed at. To buy a house or some
furniture; to start a small business; to expend his savings in tiding
over periods of slack or failing work; to avail himself of the
advantage which some fluctuation in the market gives to the man who
can transport himself promptly to a new locality or a new business is
often far more to his advantage. Above all, money expended in settling
his family is often his best policy as well as the course which is
most beneficial to the community. At present a large proportion of
working men look forward to their children to help them in their old
age, and make it a main object of their lives to place them in a
position to do so. It does not seem to me a wise thing for the State
either to emancipate children from this duty or to induce every
married working man to sink his savings in an annuity which will end
with his life and from which his widow and children can derive no
benefit. It is certainly not for the advantage of the country that in
selecting between alternative ways of providing for old age he should
be induced to choose that which throws the greatest burden on the
State. With the vast increase of population, with the great
fluctuations of modern industry, and with the rapid development of the
colonies, it is extremely desirable both in the interest of the
working men and of the State that they should be induced to transfer
themselves from congested towns and from exhausted industries to new
fields. A general pension system would certainly contribute most
powerfully to prevent them from doing so.'
It has been proposed by others that the pension fund should be placed
in the hands of Friendly or Benefit Societies, and that they should be
intrusted with its administration, or that subscription to such
societies for a certain number of years should be taken by the State
as the thrift test. On the first proposal it is sufficient to say,
that these great voluntary societies are themselves opposed to it; for
if they were directly subsidised by the State, they would be obliged
to submit to a State control of their management and their finances
which they do not desire. It is observed that only a very small
proportion of the subscribers to these societies ever find it
necessary to come upon the poor rates; and if a system of old-age
pensions were confined to these limits, it would act in the most
unequal manner. Their members are drawn in a far larger proportion
from the lucrative and flourishing trades than from those which are
struggling and underpaid. Few women belong to them. In Ireland, which
is the poorest part of the Empire, Friendly Societies scarcely exist;
and the same thing is true of large districts in Wales and Scotland.
The main result of such proposals would be to concentrate the new
State fund for the relief of poverty on the richest parts of the
Empire, and on the trades that need it the least.
The extreme difficulty of finding any efficient test of thrift is very
evident; and those proposed by a large number of the advocates of
old-age pensions are so easy as to be almost worthless. Some consider
it sufficient that a man has for a certain number of years not been in
receipt of poor-law relief, except medical relief or relief granted
under 'exceptional circumstances.' Others would accept the mere fact
that a man has lived to be sixty-five, as the drunken and disreputable
workman seldom lives so long. A large number of resolutions have
condemned Mr. Chaplin's report on the grounds that old-age pensions
ought not to be confined to the 'deserving' poor; that they ought to
begin at an earlier age than sixty-five; that they ought to be
administered by a body totally unconnected with the poor law, so as to
carry with them no taint of pauperism or eleemosynary relief. They
ought, it is said, to be universal; to be looked on as a matter of
strict right; to be considered as of the same nature as the pension
given to the soldier or the Civil Servant.
It is obvious that all this may carry us very far. It is estimated
that some of the most popular proposals would involve an annual
expenditure of considerably more than twenty millions of
pounds--making allowance for the saving that might be effected in the
ordinary poor-law relief, but not counting the cost of administration.
And this expenditure would be a growing one; and once accepted it
could hardly be withdrawn. The vast addition to the national debt that
might follow a great European war or the great shrinkage of the
national income that might easily follow some revolution in trade or
manufacture, might render the burden of taxation incomparably more
serious than at present; but once the great mass of the population had
learned to regard State support in old age as their normal prospect
and their inalienable right, it would be impossible, without producing
a social revolution, to recede. All the advantages gained by
generations of economical administration of the national finance would
be nullified; while the certain result of this crushing addition to
taxation would be to weaken incalculably the spirit of thrift,
providence, and self-reliance, and at the same time to lower wages, by
removing one of the great considerations by which they are regulated.
And this reduction of wages would fall not only on the recipient of
the pension, but also on multitudes who would never live to attain it.
Nothing can be more certain than that a general system of pensions
attached to the labour of the wage-earner must lower wages, at least
among all those who are approaching the pension age; while it would
prevent or retard their natural increase over a far wider area.
It would also most certainly bring with it the gravest danger of
corruption. It would not be easy to secure the pure and the impartial
administration of these vast funds; but the political dangers would be
much more serious. It is proposed that the pension system should be
first introduced on a small scale, but gradually extended till it
included all the aged poor, or at least all who were deserving. Such a
question would infallibly pass into the competitions of party warfare.
It would become in most constituencies one of the most prominent of
electioneering tests. Rival candidates would be competing for the
votes of a wage-earning electorate who had a direct pecuniary interest
in increasing or extending pensions and in relaxing the conditions on
which they are given. Can it be doubted that in many cases their first
object would be to outbid one another, and that national and party
politics would soon be forced into a demoralising race of
extravagance?
I cannot conclude without protesting against the supposition that
those who think with me are indifferent to the great evil of old-age
destitution and propose nothing for its relief. The committees which
have most clearly pointed out the dangers of old-age pensions have
also urged, that within the lines of our present poor-law system it is
quite possible to do much, by an improved classification, to
distinguish among the recipients of poor-law relief between the
respectable and the worthless. Much has already been done, and in the
most important unions the guardians have introduced a large amount of
classification by merit. As I have already said, the immense majority
of the respectable aged poor are now relieved only in their own homes
or in comfortable infirmaries. The severe test of absolute destitution
has in practice been greatly relaxed; there is a legal provision
preventing those who are receiving help from Friendly Societies from
being disqualified for relief; husbands and wives are no longer
separated in the workhouse; and in some unions of which we had
evidence much more has been done. This, however, depends too much on
the will of particular Boards of Guardians, and there are in
consequence great inequalities of treatment. The condition of the
deserving poor may be greatly improved by relaxation in points of
hours, discipline, and visitors, and by workhouse arrangements
securing more universally that paupers who have lived respectable
lives should not be obliged to mix with the drunken, the disreputable,
and the hopelessly idle. And, though extensions of outdoor relief
should be carefully watched, and entail great dangers, yet under wise
and strict administration something more may be done in this
direction.
But all this should be regarded as essentially poor-law relief, and
not as the recognition of a claim of right for services supposed to
have been rendered to the community. No form of State Socialism is
more dangerous than the doctrine which has been countenanced by Prince
Bismarck, and which is making many disciples in England--namely, that
an industrious man, who has pursued his course in life with perfect
independence, made his own contracts, chosen his own work, and been
paid for it by stipulated wages, is entitled, if he fails in obtaining
a sufficiency for his old age, to be placed as a 'soldier of industry'
in the same category as State servants, and to receive like them, not
on the ground of compassion, but of right, a State pension drawn from
the taxation of the community. There is no real analogy between the
relief that is very properly granted to such workmen in their
destitution, and the pensions--largely of the nature of deferred
pay--that are given by the State or by private employers, under the
terms of distinct contracts, and for specific services duly rendered,
to those who have entered into their employment and placed themselves
under their control.
INDEX
Aberdare Commission, 303
Addington, 273
American Revolution, 34-37, 55-57, 77, 78
Anne, Queen, 295
Anti-Semite movement, 116-121, 123-125, 128
Arnold, Dr., 251
Australia, 58
Austria, 116, 145
Bacon, 28, 94, 101
Bayard, Mr., 48
Bayle, 97
Beaconsfield, Earl of (B. Disraeli), 126, 151, 153, 207, 211, 214,
215, 217, 283;
imperialism, 46;
policy regarding Eastern Crisis, 222;
relations with Lord Derby, 223;
Queen Victoria's regard for, 296
Beer, George, 56
Bentham, J., 43, 101
Bernard, Claude, 121
Bismarck, Prince, 288, 289, 317
Blackley, Canon, 310
Blennerhassett, Lady, 131-133, 145, 148, 149
Blomfield, Bishop, 263
Bossuet, 96-98
Boulanger, General, 116
Bright, 207, 208