Historical and Political Essays

by William Edward Hartpole Lecky

A purely non-party Committee, presided over by Lord Rothschild, and consisting mainly of distinguished financial authorities connected with the permanent Civil Service, and therefore removed from active politics, was appointed in 1896, in accordance with the recommendation of the Aberdare Commission, to inquire especially into the question of old-age pensions; and it reported in a document of conspicuous ability. It was unanimous in condemning as impracticable or dangerous all the schemes for such pensions that were brought before it; and it fully confirmed the views of the preceding Commission. The report, and the evidence on which it is based, clearly show the ways in which measures intended for the benefit of the working class may prove in the highest degree injurious to them.

If the matter could have been decided by pure reasoning, this report 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 5s. to 7s. a week, should be granted to all the deserving poor who had attained the age of sixty-five and whose incomes did not exceed 10s. 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?