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The Pamphlet Collection of Sir Robert Stout: Volume 72

Old Age Pensions

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Old Age Pensions.

"I admire you much, ye meek and patient pair,
For ye are worthy; choosing rather far
A dry but independent crust, hard earned,
And eaten with joy, than to endure
The rugged frowns and insolent rebuff
Of Knaves in office, partial to the work
Of distribution.


TThe state of opinion, the hopes that are everywhere stirring the labouring classes, the forces that determine the great evolution of history, render more and more clear and imperious the necessity of effecting social reforms. At each of our general elections the country expresses wishes and makes claims that indicate to our Government a clearly defined duty. Our democratic society manifests a growing indifference to the speculations of mere politics, and on the contrary, drawing away, as every day it does more and more, from revolutionary Utopias, the more vigorously will it hold the Government to the duty of maintaining steadily the public peace, the freedom and enlightenment of the labourer. Our Government has already, to a very great extent, met this want; but many useful questions yet remain to be taken up.

There are no new institutions more ardently desired than those that would guarantee the security of old age. So long as his strength is maintained, a man readily resigns himself to the mischances of fate, and finds in his moral and physical vigour elements of resistance that permits him to support the miseries of his condition, but in the state of our civilisation, the spectacle of an old age of weakness and want can no longer be regarded with indifference. Accordingly there have been established in recent years numerous interesting societies based on various forms of mutual association, with the view of providing retiring pensions for their members. This effort, which has been especially supported by the friendly societies, is a strongly marked indication of an absorbing public interest; but these institutions have as yet had only a limited range of action. One proof of this is the smallness of the allowances that the friendly societies are able to grant—and another proof is the very limited number of their members in ratio to populations.

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The Chief Registrar of Friendly Societies in England, in his last report, says:—" It would not be safe to reckon the members of friendly societies insured against sickness as numbering more than between three and four million." It may be taken roughly that there are over eight million of adults (i.e. twenty years of age and upwards) in the United Kingdom. Making every allowance for the upper classes and for married women, it would appear that little more than one-third of the working population are insured against sickness The number that ought to be insured cannot be put at less than nine million. Although our friendly societies have before them much ground to conquer, we cannot withhold our admiration for the work done, when we remember that so vast, and on the whole, so excellent, a provision has been created by the voluntary effort of workmen themselves, with little or no help or patronage from the State. To those who look forward with hope, and not without confidence, to the time when workmen will be able to keep in their own hands the organisation of labour, and to dispense with the capitalist middleman, the friendly societies may be looked on as a school of invaluable discipline. In them the workman learns something of business, he has to study the laws of interest and accumulation of money; he acquires the art of co-operation. Immense as are the blessings that the trades unions and friendly societies have conferred upon the working classes in helping them in the hour of need, when they are stricken by illness or suffer from injuries sustained in the course of their employment, it may well be that even these advantages sink into insignificance compared with the possibilities that He in the future. If ever a co-operative organisation of labour is achieved, its true founders will be the pioneers of self-help in friendly societies."

Whatever maybe the reasons that in other countries justify a direct interference and control in cases of sickness, the friendly societies have achieved such gigantic results that it would be impossible, even where it desirable, to thrust them aside. The only service that our Government can usefully perform is to give facilities for the protection of the funds of these voluntary societies and some actuarial help. It is more than fifteen years since the English Registrar of Friendly Societies first held out hopes that he would be able to issue safe tables of sickness and mortality, so as to afford a guide to workmen of the amount of premiums they must pay in order to secure the benefits they desired. The task has proved one of gigantic difficulty, and it is not yet accomplished. But it is hoped that in the near future tables will be furnished that will give the high water mark of actuarial science. When that is done, we may not unreasonably expect that friendly societies will put themselves generally in a position of impeachable actuarial soundness.

It is important, then, to come to the assistance of the workers not only by stirring up in them solicitude for their future, but by page 5 furnishing them with the means of rendering their good intentions effective in fact.

If the State were to put itself in their place, the object in view would not be attained; instead of spurring private persons to take the initiative, we should render them still more apathetic; instead of encouraging the emancipation of the democracy, we should benumb still more the energies of individuals. In order to obtain truly fruitful remits in the social point of view, people must be left free to act in providing for their future, but this freedom must find adequate basis of support. Such basis of support have hitherto been wanting.

As to the State subventions, these would, in some way, cement the association of workmen and employers. They would undoubtedly involve sacrifices, the importance of which may be considerable, and the problem for solution is one that cannot receive too great attention, but the national labour, the public wealth itself, cannot but reap a large profit from reforms designed to render the future of the workmen less uncertain, and our Legislature will no doubt be willing to accord satisfaction to wishes that are recognised by every one to be legitimate.

To what extent are the workmen and the masters able to contribute to the formation of a pension fund? An admissable rate of contribution being fixed, what results may be expected? Such are the first questions for consideration.

Workmen, it is superfluous to say, can save but little, and their power to save anything is frequently reduced by sickness and by want of work. Deducting from the full year, the holidays, the times of probable want of work, and the ascertained average period of illness for a given group of population, it seems difficult to admit that a workman can have the opportunity of saving more than in 290 days a year.

It is necessary, on the other hand, that the saving in view of superanuation, should not require of him a sacrifice, which, appearing excessive, runs the risk of repelling him. An ever-increasing number of workers are already taking upon themselves a variety of charges in the societies of which they are members, in order to protect themselves against want or sickness, and they will not join any new institution if the effort required of them be out of proportion to their means.

It is truly said that no voluntary pension scheme will ever secure a provision for all the aged poor, and indeed, no such plan could be expected to affect more than a minority of the working classes.

Much of the disappointment that is naturally felt in dealing with voluntary schemes of insurance, arises from too ambitious desires. No voluntary scheme could be expected to rid us of old age pauperism, and it must attain a great success before it could make even an appre- page 6 ciable impression on it. The persons who have the foresight and self-denial to provide for the future, are least likely, under any ciremstances to come upon the Benovelent Aid, and the class of persons that furnish the bulk of the recruits to the ranks of pauperism, are precisely the unthrifty and the self-indulgent To some extent, of course, every old age pension that is taken up, takes away a possible recipient of our charity, but no prudent advocate of a voluntary scheme would rest his case upon the hope of abolishing old age pauperism.

The weak point, again, of every voluntary scheme, lies in the lifelong and continuous effort which it demands of the workman. The choice is between a heavy payment over a short period in early youth and small instalments covering the whole period from 20 to 65. If the latter course is preferred (according to Canon Blackley's drift scheme), a man may secure a pension on the non-returnable scale of 5s. a week at 65, for a weekly payment of 2¼d. If he desires also to insure for 2s. a week for each of his children on his death, the weekly contribution would be 4½d. It would be idle to say, at all events, of the great majority of the working classes, that they would not pay see small amount per week, when fully employed they could well afford the money, but when sickness comes, or loss of employment, they fall into arrears, and, if their wages are low, it may require an heroic effort to recover lost ground. When payments are to be made not weekly, but quarterly or half-yearly, the tendency is strong to put off the saving until the day of payment comes near; then occasionally the workman finds himself short of cash, and the opportunity will be lost. Some external pressure would seem to be necessary to keep him to the mark, and to ensure the due performance of his good intentions

Such considerations have led many to believe not only that compulsion is necessary, if any general provision for old age is to be secured, but that a voluntary scheme is so little likely to succeeds hardly to be worth a trial. It is however, unecessary to discuss the desirability of compulsion, as there is a prior question that must be answered. How is compulsion to be carried out? Is it practicable?