OLD-AGE PENSIONS BILL.

§ MR. SMEATON (Stirlingshire)

moved to insert "net" before "income" in subsection (a). He desired to make it clear that only the available net income should be taken into account. The Amendment was intended to cover cases where people paid into clubs. As everybody knew, the working men in the country paid their pence in subscriptions to coal clubs, medicine and doctors' clubs, boot and shoe and clothing clubs, co-operative clubs, and so forth; and these subscriptions enabled them to obtain necessaries cheaply. Such payments reduced their incomes, and ought, therefore, to be deducted. No doubt the deductions would only be in pence; but then, the sliding scale of a pension also went down to pence; let them be fair to the thrifty.

§ THE FIRST COMMISSIONER OF WORKS (Mr. L. HARCOURT,) Lancashire, Rossendale

said the Government could accept the insertion of the word proposed. It was certainly the intention of the Bill that the yearly value of a man's income should be taken into account, and that it should not include any outgoings. The word "net" as applied to profits had a meaning which was fairly well understood, but as applied to income it would seem to require some definition. It was quite clear that rent 592 and cost of living were not to be deducted from income for the purpose of the Bill, and to insert the word "net" without any explanatory phrase or word would certainly not do. The intention of the Bill was clear, and they could not accept that word, which might give rise to an interpretation dangerous to the whole clause.

§ MR. WILLIAM RUTHERFORD (Liverpool, West Derby)

said he was sorry the Government would not agree to the Amendment. It was quite clear in reading over the whole of Clause 4 that it would be very difficult to ascertain what a man's means really were within the meaning of the clause. He would give a case in illustration. Supposing an old man or an old woman subscribed to the Post Office for a small sum to be paid at death. Was that to be deducted, or not? He took it that the proposer of the Amendment assumed that income meant the available net income that the elderly person was really going to receive and could spend, whereas by the clause as it stood, there were no limitations and no definition, and there was nothing to show that small outgoings such as he had suggested would be allowed to be deducted so that the net amount might be ascertained. It was obvious that if they had two or three people whose means hovered about the limit, and who had some little outgoing, those expenses would be included, unless Parliament made it clear by putting in the word "net," that such outgoings were not to be calculated in the income. He was in hopes when he saw the Amendment that the Government would accept such a simple way of doing ordinary justice, and he very much regretted, therefore, that the right hon. Gentleman had not accepted it.

§ MR. AUSTEN CHAMBERLAIN (Worcestershire, E)

said he did not quite follow the objection which the Government had to the Amendment. Supposing a person was left the benefit of a small property, and received the income from that property, but was bound to pay out of that income some small sum to another person, what would his income be taken as under the clause as it stood? 593 The net income would mean merely what they received for themselves after allowing for deductions, but was it quite certain that the word "income" by itself would mean the net income, and not the gross income? He was not certain whether there was not a technical meaning attached to the word "income" in law in connection with the Income-Tax Act, and if there was, and if the definition under the Income-Tax Act could be applied under the Bill, considerable injustice might be done, because the income for the purposes of income-tax included in certain cases money which the person clearly had not got to spend, i.e., it was rather the gross income of a business before making certain deductions which the business involved, than the not income available to be spent by the proprietor.

§ MR. L. HARCOURT

said it was the intention of the Government and of the Bill that only clear income or clear annual value should be treated under this section, and he was advised that that would be the effect of the words as they stood. Although the word "net" as applied to profits had a definite meaning, it had no such definite meaning as applied to the word "income," and it might give rise to the suggestion that from the income should be deducted the cost of living, etc., and the Government regarded the word as too dangerous and too wide to insert in this case.

§ MR. RAMSAY MACDONALD (Leicester)

asked what was the meaning of a "clear" income. Take the case of a middle class man who had insured his life; he deducted his insurance money for the purposes of the income-tax. Supposing those old persons who came under this clause were insured for their funeral expenses, which, was really a form of life insurance, would the premiums they had paid for that benefit be regarded as part of a clear income or be excluded?

§ MR. LYTTELTON (St. George's, Hanover Square)

said that in the case of house property of a rather common class, large deductions were generally made for unlets, for the collection of rents, and for such outgoings as repairs, 594 etc. Would the term "income" be the income after those charges had been satisfied or not? He would certainly have thought the income would be the gross rental receivable from those cottages, and that the landlord would not be entitled to deduct the expenditure necessary to command that rent.

§ THE CHANCELLOR OF THE EXCHEQUER (Mr. LLOYD-GEORGE,) Carnarvon

said he could not give an answer to a very complicated conundrum of that kind, nor did he think it was altogether a question for the Law Officers. It was more a question for the Inland Revenue, who had been interpreting these things in the past. With regard to insurance, he would say the Inland Revenue would deduct any payment made in respect of that insurance. There was a very elaborate set of regulations which had accumulated for years, and he would be sorry to answer the point of the right hon. Gentleman straight off. He would not like to commit himself, but he did not think the case would be likely to arise under this Act, which would not take in men who had property of that kind. They might, of course, get a man who owned a cottage, and he did not know what the regulations of the Inland Revenue provided in a case of that sort, but he should think they would follow the general principles adopted in the case of income-tax, with this exception, that it was likely they might give a more liberal interpretation under this Act.

§ MR. AUSTEN CHAMBERLAIN

thought the answer of the right hon. Gentleman showed that they were on rather a delicate point, and one requiring more serious consideration than had been given to it. Clearly the Government had not considered it, because the right hon. Gentleman was not prepared to answer, and said the Law Officers could not be expected to answer, and, therefore, he presumed they had not gone into it. What was the answer as far as the right hon. Gentleman had been able to give it? As regarded insurance, he thought the Inland Revenue would interpret anything in the nature of insurance as being entitled to an exception, following 595 the principles adopted in regard to income-tax, and that the Inland Revenue might, in fact, go a little farther in these matters than they would under the Income-Tax Act. But the Inland Revenue had nothing whatever to do with the administration of his Act. The Excise officer was, the Prime Minister interrupted, an officer of the Inland Revenue, but that was really a correction of his statement of the flimsiest character, in view of the fact that the Prime Minister had announced his intention to transfer the whole of the Excise officers to the Customs. The Customs was not the Board of Inland Revenue, and as a matter of fact the Excise officer in this case was not put forward as an official who was to act under directions from either the Board of Customs or the Inland Revenue; he had to act to the best of his knowledge and judgment in consultation with or in correction of the local pension committee, and if they differed, the determination of the dispute rested with the President of the Local Government Board. Accordingly the Board of Inland Revenue had nothing to do with the matter, and the Board's precedents in connection with the income-tax could hardly be said to be binding on the Local Government Board. The Chancellor of the Exchequer had said that the precedents in connection with the abatements allowed from income-tax in respect of the premium paid on an insurance policy would be followed. That was a statutory abatement, and the Inland Revenue only allowed it because there was a statutory provision to that effect, and the very fact that they only allowed it because of that would, he thought, be their justification for saying that where there was no statutory provision clearly Parliament did not intend them to do it. Under those circumstances he hoped the Government would reconsider the matter, for he thought it was clear that the word "income" by itself would not do. He would ask the Law Officer, who had now happily arrived, to assist them to find a suitable word.

§ THE PRIME MINISTER AND FIRST LORD OF THE TREASURY (Mr. ASQUITH,) Fifeshire, E.

did not think there was any necessity for the assistance of the 596 Law Officers. It was not a technical matter, and anyone acquainted with income-tax legislation, as he was, knew that the word "income" was rarely used in the Act. For that reason he thought there was a great advantage in putting it in this section, because it was not fettered by technical interpretations or legal associations. He understood by income what a pension committee or the Excise officer would say was, as a matter of common sense, the clear income of the person in question, and if they put in "net" he thought it would be a great mistake. Although he thought that, as a rule, the Excise officer would consider he ought to follow the spirit of the deduction allowed under the Income Tax Acts, it was much better in the interests of all concerned that they should not put in a hard and fast definition to prevent an elastic interpretation of the clause. In the case of cottage property, it was clear they could not regard the man's gross receipts as being his income, and the case of insurance premiums had been, expressly provided for by statute in regard to income-tax, and he thought a pension committee would form the same opinion about it.

§ MR. A. J. BALFOUR (City of London)

said he did not know whether leaving things to the common sense of the committees was the best way to avoid litigation, and the speech just delivered showed the extreme need of some guiding words. They had before them two illustrations of the difficulties that might ensue from the use of the word "income" only. Speaking as a man totally ignorant of the technicalities of the law, it seemed to him quite possible that if he were on one of these pension committes he should, from a common sense point of view, say the income from the cottages would be what was commonly called the net income, i.e., the gross income less the necessary outgoings, and in that he agreed with the Prime Minister. But he was not so clear about the insurance matter. He had the utmost sympathy with those who insured their lives in order to provide for a cost which might occur after death, or for their successors in any form, but unless they put in statutory words and said that the ordinary income-tax regulation 597 was to apply in this case, he asked Committee whether they thought a man's income was to be exclusive of what he paid for insurance purposes. He though common sense led them to the opposite view. Very likely old people would save what they could and put it by rather than insure directly with an office, but the House was not going to deduct such savings. What they put by themselves for expenses which would occur after death, the House did not deduct from their income. If, however, the money went into a society, they did deduct it. He did not think common sense made it clear that a proper distinction was to be drawn between these two cases. The Prime Minister prided himself on the fact that this phrase was not legal English, but common-sense English, which he properly distinguished from legal English, and they were dealing with common sense persons who were to distribute the fund. But let them compare that argument with the argument of the First Commissioner of Works. He said "net income" might lead the ordinary person to indicate a clear income, but it was a legal term which might be misinterpreted. He would have thought not, but he would accept the criticism of the right hon. Gentleman and make a suggestion. The First Commissioner of Works, appealing to a common-sense audience, talked about a "clear" income. Then let that be put in to the clause and it would hit off the common-sense of the committees who would have to deal with the matter. If "net" income was a legal definition, and they did not want to deal with the legal aspect, then let the commonsense word suggested by a commonsense Minister to a commonsense House of Commons express the meaning of the Government.

§ MR. ASQUITH

said the insertion of that word would not in the least assist the solution of the problem; the committees would still have to construe it according to their own ideas.

§ MR. AUSTEN CHAMBERLAIN

asked whether it was not necessary to put in some words in order to solve this problem. His right hon. friend had spoken of the insurance which many might be expected to make in the way of life assurance. He thought it was as stated by the hon. 598 Member for Leicester, but he was not certain. They were clearly likely to make insurance against sickness. They were far more likely to pay so much a week to insure against sickness, which was a far more pressing anxiety. He presumed that that would not be excluded from their means. With all respect to the Prime Minister, he adhered to his view with regard to what would be the effect of the Bill where there was no experience of these matters. The income-tax basis did not provide for any deductions for payments made to provide against sickness and for medical relief. Did the right hon. Gentleman suggest that the money he paid for doctors' bills was no part of his income?

§ MR. ASQUITH

said the income-tax did not regard insurance premiums as income.

§ MR. AUSTEN CHAMBERLAIN

said the hon. Gentleman who introduced the income-tax into the discussion said that the Excise officers would follow the precedent of the Income-Tax Act. His first observation upon that was that they would only follow it so far as the powers of this Bill corresponded with the powers of the Income-Tax Act, and this Act did not allow them to grant exemptions for payments made for life insurance. He suggested that some words should be put in to carry out the obvious intention of the Government in the matter.

§ MR. ELLIS DAVIES (Carnarvonshire, Eifion)

asked for further information as to how income was to be arrived at. In the case of insurance premiums they were according to the Prime Minister to be allowed to be deducted as under the Income-Tax Acts, but the income of cottage property was not to be the sum at which it was assessed to income-tax, but the rental after deducting all cost of repairs, as it was known that the cost of repairs was in excess of the sum allowed in income-tax assessments. There was also another class to be dealt with. How was the amount of income of persons in occupation of land to be arrived at. More than 80 per cent. of the farmers in his constituency held less than 50 acres or paid less than 599 £50 rent. On the basis of the income-tax their profits were deemed to be one-third of their rent. Was that the basis upon which the pension officer was to go? Was the profit of a farmer paying £50 a year to be put down as £16 13s. 4d.? If so, neither he nor the farmers would object. At the present moment, however, so far as he understood the law a elucidated by the Prime Minister, one basis was to be adopted for arriving a the income of a person with cottage property, and another for arriving at the income of a tenant farmer. In dealing with such a complicated matter which was likely to lead to litigation and injustice, there should be precision of definition. He did not at present see how the income was to be arrived at.

§ SIR F. BANBURY (City of London)

said the income of a tenant farmer was arrived at by taking a proportion of his rent.

§ MR. ELLIS DAVIES

said the income of a tenant farmer is deemed to be one-third of his rental.

§ SIR F. BANBURY

said that in the case of nine out of ten tenant farmers it would be nothing like that, but the person who was eligible for a pension was liable to be assessed on that basis. He contended that it would cause considerable hardship, because a great many people would be deemed to have an income they did not possess. If the word "net" was put in, it would certainly not include provision made for sickness or burial, nor would it include the payments suggested by the hon. Member for Leicester. If provision was to be made for that there must be a separate Amendment to deal with it. The only question for the Committee to consider at present was whether the word "net" should be inserted in this way. "Net" was a plain, simple, business word which every business man understood. "Net amount" meant the actual amount put into the pocket after all charges had been met, and available for spending. Its introduction would be a guide to the pension committee, and would not fetter them. He supported, therefore, the suggestion that it should be put in, although it was 600 not a legal word, in order to make the matter clear.

§ SIR E. CARSON (Dublin University),

as one who had had some experience in administering Acts of Parliament, did not think the insertion of either "net" or "clear" would strengthen the clause, without adding of what the amount was net or clear—of medical attendance, of repairs of cottages and so on. He did not see how the income-tax argument had any bearing upon the Bill. The income-tax set up an artificial income and laid down specifically what should or should not be taxed. If the Excise officer in administering the Bill was to work out a system, that was saying that he and not Parliament was to legislate. Committees might take most divergent views. One might exclude one set of payments, and another, another. It was Parliament that decided what should be included in deductions from income for taxing purposes. Even if that was not true, they could only deduct up to a sixth of the income. It was a purely artificial matter, and the whole question of profits under the Income-Tax Act was strictly regulated by Parliament. His own view was that they should leave the Bill us it stood. They would have Excise officers in the different districts setting up different standards of income and deductions, and in the end they would probably have to come back to the Local Government Board, the President of which would ultimately become the legislator in regard to the matter. The net conclusion of the whole argument came to this, that by leaving the word "income" as it was, without either the word "net" or the word "clear," they did not know what they were voting for.

§ MR. ASQUITH

said that he agreed with every word that had fallen from the right hon. Gentleman. He did not wish it to be supposed that he had said or suggested that in determining what was income, either the pension committee, the excise officers, or ultimately the Local Government Board should feel themselves bound to determine the matter by the artificial provisions of the Income Tax Act. The only reason he lad referred to it was to show that the problem under the Act was to ascertain hat part of a man's profits which was 601 really income; that was, the absolute profit, after all deductions which the Income Tax Act allowed from profits had been made for the purpose of ascertaining that which, from the point of view of the State, should be regarded as income and assessable under the Income-Tax Act. That was the problem presented by the Income-Tax Act, and he referred to that, not as laying down a rule, but as showing a useful precedent. He quite agreed that it would be better that the word "income" should appear simply without an epithet prefixed. As the right hon. Gentleman had said, the only way of really working the thing out would be, not to prefix a vague epithet like "clear" or "net," but to have a schedule allowing statutable deductions. But however carefully that schedule was drawn they would find that they had omitted something which ought to be included, and included something which ought to have been omitted. There was a well-known legal maxim that the mention of one thing meant the exclusion of another, and would introduce an endless chaos of interpretation. Was it not, therefore, far better to leave the interpretation of a particular case to the conjoint opinion of the pension authorities, or to the Excise officers, and in the case of differences, to leave it to the patriarchal control and jurisdiction of the President of the Local Government Board to determine the matter.

§ MR. J. W. WILSON (Worcestershire, N.)

said he agreed with the last two speakers in this matter, but he suggested that the better way to deal with the question was to have a general reference to what was the past year's income. In that way they would get a distinct figure to deal with, after the deductions in respect of payments to friendly societies, rent, etc., whereas to deal with the income of the coming year would be entirely speculative. Dealing with the past year, the receipts could be produced, and he submitted that if they desired to give the pension authorities and officers some indication as to how the income was to be arrived at, it would be more suitably done by specifying friendly society payments, and all outgoings of one sort or another, doing this at the end of the subsection rather than in the part they were now considering.

§ MR. AUSTEN CHAMBERLAIN

thought the word "income" as it stood in the Bill was clearly not sufficient to meet the case raised by the hon. Member for Leicester, which the Prime Minister, as he understood, had expressed the desire and the intention of the Government to include. Therefore, he proposed, when they reached the proper point, to move, after the word "excluding," to insert the words, "any sums payable on premiums of insurance against sickness, death, or funeral expenses." That would specifically meet the case, which was a very exceptional one, and would not, he thought, be open to the objection raised by the Prime Minister, namely, that if they mentioned one thing they would exclude others. This was a case which stood by itself, and was altogether apart from the ordinary outgoings which had been spoken of. He thought it right to give the Chancellor of the Exchequer notice of his intention to move.

§ MR. HUNT (Shropshire, Ludlow)

suggested that after the word "income," the words might be inserted, "clear of all necessary outgoings."

§ MR. JAMES HOPE (Sheffield, Central)

said he would suggest another way in which the matter might be met, and which might not be open to the objection raised by his right hon. friend the Member for Dublin University. He would like to know the view of the Solicitor-General as to the use of the word "available" income, after deduction of reasonable payments and expenses. If they did not get a decision on this point to-day, it was one of the matters on which the Bill might perhaps be recommitted on Monday.

§ MR. WILLIAM RUTHERFORD (Liverpool, West Derby)

said they were being asked to decide this point on very insufficient information. The First Commissioner of Works had told them that if they left the word "income" alone it showed clearly what was meant. The Chancellor of the Exchequer had said that he rather thought that an allowance would be 603 made by the pension officer in respect of insurance payments, but was not quite certain, and that an allowance might be made in respect of repairs to the old man's cottage, but he was not quite certain of that either. Then the Prime Minister had told them, in the first instance, that the rules and regulations which affected income-tax would probably be taken into account by the pension officer; but when he rose again the right hon. Gentleman took that back, and said the rules and regulations as to income-tax had nothing to do with this point. He thought they were reasonably entitled to have some leading from the Government. The Prime Minister had concluded by practically saying that the Government insisted on the word "income" being left alone, and that neither the word "clear" nor "net" should be put in. Yet it was admitted by the three Ministers who had spoken that the subject was being left in the greatest possible confusion. The answer of the Prime Minister had rather indicated to them that it would be in the discretion of the pension officers, of whom there would be some hundreds all over the country, to deal with some of these points. In view of the Bill having been so loosely drawn, in view of the different statements of Ministers, and in view of the vague state in which this point had been left, he thought they were entitled to protest, and to say that they were, at all events, clearly of opinion that the income should be "net," after those reasonable deductions which a poor old man or woman should be allowed to make in ascertaining the amount of income for the purpose of this clause, namely, payments to friendly societies, the weekly payments to a burial fund, and so forth. They were entitled to ask that the word "net" should be accepted, or in the alternative that the Minister in charge of the Bill should undertake that on Report some words would be put in which would clearly define what the income was that was to be taken into account, and how it was to be arrived at, what elements were to be included, and how the deductions were to be allowed. Unless something of that kind were done, they would be perpetrating a piece of injustice calculated to 604 raise the greatest possible inconvenience and trouble all over the country. If, however, the Government, undertook to deal with this question properly on Report they might be able to make clear what income it was intended should be taken into account. Unless the Government were prepared to give one or other of these two assurances, he should certainly vote with his hon. friend opposite.

§ SIR JOHN RANDLES (Cumberland, Cockermouth)

said the one thing most clear about this matter was its obscurity, and if the Committee could not make clear the situation he did not see how the pension committees and Excise officers were to see their way through the fog. The word "available" had been suggested by his hon. friend, and that possibly might not be open to the objection of want of clearness. Not being a lawyer he was not able to make the point clearer, but he thought that some words might be introduced which would make the position less obscure. Somebody would have to decide it and if the committee did not it would be shelved, and the burden placed on somebody else's shoulders. Refusal to accept the Amendment did not end the difficulty. The pension committee would have to come to a conclusion on the matter if the House of Commons did not, and it was by no means an easy matter to come to a clear conclusion. Tot homines tot sententiœ. Almost as many opinions had been expressed as there had been speakers. "Net income " had a different meaning according to the tribunal that might have to decide the matter. "Clear" also had no definite meaning. He was rather driven to the conclusion which had been suggested that they ought to define either by way of exception or by introducing a schedule and putting into it exactly what they intended it to mean. The Prime Minister, he knew, said the schedule would introduce endless chaos of interpretation, but he thought the contrary would be the fact, and that there would be endless chaos if they did not do something. He could not see the difficulty himself of introducing exceptions or elaborating a schedule. He knew it meant trouble, and what the Secretary for War called clear 605 thinking, but it was the bounden duty of the House of Commons to put the matter as clearly as possible for the benefit of the pension committees, otherwise very grave injustice might be done. It would make all the difference into what category a pensioner fell, whether they did or did not carve out certain outgoings from his income. Payments to friendly societies for death funds had been instanced. If they were not allowed to carve those out of the income it might cut a man out of an old-age pension altogether, and he hoped even now, almost at the eleventh hour and the fifty-ninth minute, the Government would help the committee. It was not a matter of party disputation or recrimination. They all wanted to do the best with the Bill as it had been put before them.

§ MR. SMEATON

said that after the debate that had taken place, if he could get an assurance from the Chancellor of the Exchequer that some regulations would be issued for the guidance of the pension officers, so as to allow them to make a liberal reduction on the lines suggested, he was prepared to withdraw the Amendment. If not, he should go to a division.

§ MR. CHIOZZA MONEY (Paddington, N.)

moved to insert in the first line of subsection (a) the word "unearned" so that, in calculating the means of a person for the purposes of this Act, it should be the unearned income only that should be considered. He said his object was to save the applicants from the tender mercies of the pension committees. He looked upon those committees with some alarm, and anyone who read the various sections of Clause 4 would conclude that when these incomes had to be decided, in accordance with the sliding scale, the task would be difficult indeed. He desired to exclude from the provisions of this Clause all those persons who were earning their incomes. Subsection (a) was worded— The income which that person may reasonably expect to receive. He submitted that an old man of seventy to seventy-one could not be reasonably expected to earn any income for any considerable length of time, and this, taken in conjunction with the proviso that— That income in the absence of other means of ascertaining the income, being taken to be the income actually received during the preceding year"— would be very unfair to the old men earning a few shillings a week. Obviously the power to earn income decreased very rapidly after seventy, and if an old man was earning 9s. or 10s. a week in 1908, he could not reasonably be expected to earn as much in 1909. The pension committee under 610 this clause would have to take it that he would be able to earn that income in the succeeding year. He invited the Chancellor of the Exchequer to compare the respective positions of an old man of seventy, possessing a house worth£200, bringing in 6s. a week, and an old man of seventy earning 11s. a week. The latter would receive 3s. under the sliding scale, whereas the owner of the house would receive 5s. a week. Therefore the property owner would be in a superior position as compared with the man earning his income. The object of this measure was to have regard to the past services of a man to the community. The man earning his income was still performing services to the community, and he ought to receive his pension over and above any amount he might be earning. That man ought to receive the 5s. a week, quite apart from the 10s. or 11s. he received as wages. He would be quite willing to accept some definition of "unearned," although that had not been considered necessary in the case of the income-tax. He was also willing to accept a limitation as to the incomes of those to whom this particular provision should apply. As an alternative he suggested that instead of saying "the unearned income" they should Say "the income in the form of rent or interest which that person may reasonably expect to receive."

§ MR. LLOYD-GEORGE

said that obviously it was impossible for the Government to accept the Amendment. He rather complained that it had been moved without any estimate being given as to what it would cost. He thought the Government was entitled to ask hon. Members who moved Amendments of this sort what, in their judgment, would be the cost, because if they did not give that information the Committee was not in possession of all the case. He wondered whether the hon. Member had the slightest idea of what it would cost to accept this Amendment without any limitation.

§ MR. CHIOZZA MONEY

said he had stated most clearly that he was quite willing to limit it.

§ MR. LLOYD-GEORGE

said he had to consider the Amendment on the Paper. The Lord Chancellor might receive a pension of 5s. a week, or the Attorney-General, so long as they spent all their earnings. A man in business might be earning as much at seventy years of age as at fifty, because his business might have developed. A workman, if he worked hard and broke down in health after managing to save enough money to build a house, was to be penalised under the Amendment. That was so unfair that he did not think it was necessary to dwell any further upon it. Again, the Amendment would not only add at least another £750,000 to the cost of the Act, but it would be chiefly for the benefit of the well-to-do. He hoped the Committee would confine the Bill to the more destitute instead of to those who were better off.

§ MR. AUSTEN CHAMBERLAIN

agreed that it would be impossible to accept an Amendment of this kind. The hon. Member who moved it, however, had called attention to a very real difficulty, and had he confined his observations to that point his case would have been a good deal stronger. As an illustration, the hon. Member inquired how a pension authority would calculate under this Bill the income of an old man 612 who had in the past year been able to earn a few shillings a week, and had secured an average wage during the year of 8s. a week. The continuance of that would be dependent upon the goodwill of an employer, because such wages would probably be paid, not merely for present services, but in recognition of a long life spent on an estate or an old connection with the works. Consequently such an income would be largely dependent upon the continued existence of the person from whom it was received and also upon the continued good health of the recipient. The hon. Member would avoid any difficulty by excluding that case altogether.

§ MR. WILLIAM RUTHERFORD

said he wished to point out a serious difficulty that would arise if the Amendment were not accepted. Supposing an old man of sixty-nine was earning wages amounting to a few pence less than 10s. Instead of continuing to work that man under this Bill would deliberately give up his job in order that on reaching seventy he should not have an income of 10s. a week, whereas if the word "unearned" were inserted he would go on earning that money. It was very desirable that he should be encouraged to do that, and be allowed to continue to receive his pension. Why should such an Amendment not be considered on the ground that the cost had not been worked out? If the Bill were passed in its present shape every person approaching seventy years of age would immediately give up any little occupation he might be carrying on and in which he was earning a few shillings a week, and society generally would be all the poorer for the loss of that useful labour which old people should be encouraged to perform. He thought they should have had more encouragement from the Chancellor of the Exchequer. If the Amendment had been accepted, it would have been made clear that if a man in the country was earning half-a-crown a week as a scarecrow, or something of that sort—[Laughter]. There were people in society who were not earning half-a-crown a week, and he thought the Committee might have some respect for the old man who was earning half-a-crown a week in a humble occupation of that kind. Why should he be 613 precluded from receiving a pension, and thereby penalised because he was doing a little work? If the Amendment was pressed to a division, he would vote for it.

§ LORD R. CECIL (Marylebone, E.)

moved to amend subsection (a) by inserting after "the income which that person may reasonably expect to receive" the words "as of right." The first difficulty he had in his mind was that in the case of a man who was receiving 10s. or 12s. a week as a pension, or from other sources. Unless some such words as he proposed were inserted—he was not sure that the words he proposed were the best for the purpose—the result would be that the State would be making a present to the employer of the difference between 10s. or 12s. a week and 8s. a week. If a man was receiving 12s. a week before this scheme came into operation, his total income under the sliding scale would be 13s. That was clear from the sliding scale, and unless they made an Amendment of this kind it appeared to him that it would be the interest of all those people, whoever they were, whether employers of labour or charitable agencies, to reduce the payments to 8s., so that their pensioners would be in precisely the same position as now. That was a difficulty which must be met in one way or another. There was another difficulty if this clause remained as it was. So far as he could see the unhappy pensioner would have to bring into account every little present he received. If he got 10s. as a Christmas box that would have to come into the account; and, if he was allowed a little tea and sugar by an old employer, that also would have to come into the account. He did not think the framers of the clause had any idea of the stringency of its terms. Every conceivable thing was brought into account by the Bill. He was not exaggerating, as hon. Members would find if they turned to the Bill. Subsection (a), which they were discussing at present, merely dealt with cash, and it would bring in the Christmas-box. Subsection (b)— The yearly value of any advantage accruing to that person from the use or enjoyment of 614 any property belonging to him which was personally used or enjoyed by him."— would his the person who was living in a house of his own. Subsection (c)— The yearly income which might be expected to be derived from any property belonging to that person which, though capable of investment or profitable use, is not so invested or profitably used by him"— meant that if he had£5 in a stocking, it would have to be brought into the account. Subsection (d)— The yearly value of any benefit or privilege enjoyed by that person"— would include tea, sugar and milk. That was a very severe clause indeed, and he suggested that the Government must do something to limit it, otherwise if the unhappy pensioner did not make a return of all these things, he would come under the penalties of the Act, which were very severe. Clause 9 provided that any person who, for the purpose of obtaining an old-age pension, made a false statement or a false representation would be liable on conviction to imprisonment for a term not exceeding six months, with hard labour. He did not believe the Government intended that, but at the same time that was the proposal of the Bill. He begged to move.

§ MR. LLOYD-GEORGE

said it was perfectly clear from the speech of the noble Lord that this Amendment was not at all relevant to subsection (a), but to the subsections which came later in the clause. The noble Lord's criticism was not directed to the subsection with which they were now dealing as to income, but to the subsections dealing with benefits and privileges. If that was the case, the Amendment ought to be moved at a later stage. He could not follow the noble Lord in his criticism of the later subsections. He did not think it was a convenient method to discuss subsection (b) when dealing with an Amendment to subsection (a), If they did so they would 615 get into such a state that it would be absolutely impossible to get on with business. They would be able to discuss the whole matter if they would only discuss it a little more concisely. He thought the Committee could have discussed the whole of this clause in the seven or eight hours they had at their disposal. He agreed that the points raised by the noble Lord would have to be discussed, and he would give explanations when the later subsections came on. There were only two or three points of substance in the clause, and with the assistance of the noble Lord and of hon. and right hon. Gentlemen they were fair matters for clearing up, but if he started to clear up subsections (b), (c), and (d), before they disposed of subsection (a)——

§ LORD R. CECIL

What about Christmas boxes?

§ MR. LLOYD-GEORGE

That is 10s. in cash, and I do not agree that that comes under subsection (a). As a matter of fact it would not come under subsection (b) either.

§ LORD R. CECIL

It would come under subsection (a).

§ MR. LLOYD-GEORGE

said it would not in his opinion. If a man made his income from tips, he would include that. But that was a matter for discussion. There were some who were really paid in tips. There were waiters who were supposed to pay for being allowed to enter certain restaurants, because they looked to the tips for their income. All that sort of thing had to be considered by the pension officer and the pension committee. That was why it would be absolutely impossible to deal with every specific case in a clause of this kind. These matters would have to be left—he would not say to the discretion of the officer, but to the consideration of the officer, and that was why he could not accept the words of the Amendment. He had taken the trouble that morning to take four or five of the earlier Amendments on the Paper and to count what the additional cost would be if they were carried. He thought the Committee would be interested to know——

§ MR. AUSTEN CHAMBERLAIN

The right hon. Gentleman is now proceeding to refer to other Amendments. Is that in order?

§ THE CHAIRMAN

I think the right hon. Gentleman would be very well advised not to give these figures, because it is exactly that kind of information which widens the area of discussion and makes it impossible for me to keep it within proper limits.

§ MR. LLOYD-GEORGE

said his point was this. The difficulty of the Chancellor of the Exchequer was to find the money. When he was confronted with these Amendments which involved additional cost he was bound to point out to the Committee, subject to the Chairman's ruling, that it was impossible to say what all these accumulated additions would amount to, but it was certain that they would amount to such a preposterous sum that it would be quite impossible for any Chancellor of the Exchequer to face the task of finding the money. He would deal with the later Amendments when they came to them. The first Amendment would have demanded£750,000; and here was another amendment by the noble Lord which asked for£500,000 to meet the case of some 40,000 persons—not very poor persons at that—who were receiving 10s. or 11s. a week pensions as old labourers on estates. The Committee would see that these two Amendments, which involved an additional £1,250,000 to the charge on the Exchequer, were moved not even with any confidence, because, as his hon. friend the Member for Paddington said: "Any other sort of words would do; it is not the words I ask the Committee to adopt." The noble Lord asked the same thing: "I do not think these words are very well expressed; the Government may take another form of words." But when it was proposed to add an additional £1,250,000 to the national expenditure hon. Members ought to be a little more careful. These were the kind of drawbacks to such Amendments; they went on by stages at something like £500,000 per Amendment. It was impossible for the Government to accept the Amendment.

§ MR. CHAPLIN (Surrey, Wimbledon)

said he entirely agreed with the right hon. Gentleman that it was extremely inconvenient to discuss the Bill in Committee under the existing methods. But whose fault was that? It was certainly not the fault of those on that side of the House. The right hon. Gentleman objected to the course taken by hon. Gentlemen in moving Amendments by which they could make their voices heard on a subject of special and particular interest to them, or, it might be, on subjects differing from that dealt with by his noble friend which would cause great hardship and cruelty to many people in the country. Hon. Members ought not to be condemned for so doing, because that was the only possible chance they had of getting a hearing at all in defence of these poor people. If there was any trouble at all in this matter it arose from the course the Government decided to take from the first and before they had oven seen an Amendment on the Paper.

§ THE CHAIRMAN

I would remind the right hon. Gentleman that that is not germane to the Amendment before the Committee. It is out of order to question the decision of the House.

§ MR. CHAPLIN

I was not referring to the action of the House, but to the action of the Government.

§ THE CHAIRMAN

That is the old excuse. The House has passed the Resolution, and it is not competent for the Committee to reflect on it.

§ MR. CHAPLIN

said that when the right hon. Gentleman challenged the procedure of hon. Members on that side of the House, he thought he was within his right in defending them against the charge made against them. He did not intend to discuss this particular Amendment on that occasion. As to the estimates which the right hon. Gentleman had made in regard to the cost of this and further Amendments——

§ MR. LLOYD-GEORGE

I did not refer to further Amendments.

§ MR. CHAPLIN

Well, in regard to the Amendment they were discussing 618 now. If the right hon. Gentleman found himself in difficulty because Amendments were moved entailing further cost on the Treasury and further provision to be made by the Government, again who was to blame? Not hon. Gentlemen on that side of the House. Their complaint had been from the outset that the Bill had not been thought out as it ought to have been. If it had been, the right hon. Gentleman would have foreseen the necessity of making provision for these cases of hardship about which great complaints were made. The justice of his observation had been proved over and over again, because the right hon. Gentleman had given way. and willingly given way, to them in the course of the debates.

§ MR. RAWLINSON (Cambridge Univeristy)

said he had abstained from taking part in these discussions, for he felt that no legal right was given under the Bill at all at present and therefore the discussions were merely of words. The pension was to be given by means of a relieving officer or pensions committee, just as poor relief was now given by the boards of guardians; therefore the discussions on legal points were perfectly out of place. But the Amendment moved by his noble friend raised a most important point—looked at from the point of view of this very extraordinary section about ascertaining a man's income and the concrete instance given by the noble Lord. Supposing by some sort of fortune or good luck a man had a legacy left him in one year of, say, £25, or that he happened to have had a benefactor, or a friendly old employer, who had given him a dole of£20 or£30; if the benefactor died and it was well known that that man would never again receive a legacy or dole, under this extraordinarily drawn scheme that man would be excluded from the benefit of the pension, because they would be bound to take his income as the exact amount of money actually received during the preceding year. Surely the right hon. Gentleman could not have meant that. That was not merely a legal technicality; the point went to the root of the meaning of the section. Surely the right hon. Gentleman could not mean that any absolutely 619 voluntary payment made to a man during the year 1908 would exclude that man from receiving a pension in 1909. If that was not meant, then the words proposed by the hon. Member must be inserted in this line, and also in line 11. He gathered from the right hon. Gentleman's shaking his head that that was not, in his view, the meaning of the section, but he pressed to have some words put in to make it clear that any voluntary payment made during the year would not prevent a man getting his pension in the following year.

§ THE ATTORNEY-GENERAL (Sir W. ROBSON,) South Shields

said he thought his hon. and learned friend had not given his usually vigilant care and attention to the section under review. He agreed that "income" was a very vague word. It occurred in many statutes for different objects. It had received a rather different scope in such statutes as the Insolvent Debtors Act and other Acts, where "income" had to be construed in each case according to the general purpose of the statute. "Income" under the Income Tax Act would not cover voluntary payments unless they were of the character of a clergyman's Easter offerings or a waiter's tips. In each particular case it was left to the assessor to say what was the character of a particular payment which was to be treated as income. In this case they could not give a perfectly precise and accurate definition of the word. All that they could do was to define the tribunal, and to say that in this case they were going to have a particular person, the pension officer, who was to be entrusted with a wide discretion governed by the general meaning of the clause. What was the general meaning of the clause in so far as the Amendment was concerned? A great deal had been said about voluntary payments which might be made in one year and next year be taken as part of the income; but if one looked at the clause as it was they would arrive at substantial agreement that where there was a legacy it would not be treated as income. There were undoubtedly some cases in which it might be argued that a voluntary payment should be treated as income— "the income which a person might reasonably expect to 620 receive." That again covered some of the cases mentioned by the noble Lord. As to the case of a mere casual tip, that would not necessarily enter into the anticipated income for the succeeding year.

§ LORD R. CECIL

said he agreed that he was putting the case of a casual gift. As the hon. and learned Gentleman knew, there were a large number of cases where it was the custom to give a small sum regularly at Christmas.

§ SIR W. ROBSON

said that matters of that kind, having regard to the complexity of human relations, could not be dealt with to a degree of precision. They should be left to the discretion of the pension officer. Then by steps and stages they arrived at the income which might reasonably be expected next year. A mode of ascertaining the income in the absence of other means would be by taking the amount of the previous year, and if he as Excise officer had to construe the section he would exclude voluntary gifts unless there was reasonable likelihood of their recurring. Absolute uniformity could not be obtained or provided for. In the succeeding subsections property was dealt with, and in the last the yearly value of any benefit or privilege, and there was quite enough to indicate to the pension officer the way in which he should set about ascertaining income apart from voluntary and casual payments.

§ MR. AUSTEN CHAMBERLAIN

said there could not be a greater contrast than between the speech they had just heard and that of the Chancellor of the Exchequer. The Committee was indebted to the Attorney-General for arguing upon the different sections which the Chancellor of the Exchequer had waived aside with an obiter dictum as irrelevant, and, indeed, suggesting that his noble friend had introduced them into the discussion for the purpose of wasting time.

§ MR. LLOYD-GEORGE

denied that he had said so.

§ MR. AUSTEN CHAMBERLAIN

said the right hon. Gentleman, with some 621 show of irritation, had said there would be plenty of time to discuss this point if hon. Members did not waste time by discussing subsections which were not relevant. The Attorney-General invited the Committee to look at subsections (b), (c), and (d). He hoped the Chancellor of the Exchequer before administering undeserved rebukes would consult the Attorney-General as to the meaning of the Bill he had in charge. He desired to call the attention of the Attorney-General to the effect of his arguments on a large class of benefactions enjoyed by people who might expect to benefit under the Bill. He agreed with the Attorney-General that it was impossible to meet every case by exact definition, but there should be certain guiding principles showing a clear idea of what was intended. It was quite true that the Excise officer was subject to the control of the President of the Local Government Board, and that that gentleman in turn was subject to the control of Parliament, but it would certainly be undesirable to have an annual discussion on the reduction of the salary of the right hon. Gentleman on the question of the exact interpretation which he had or should have put on the words of the Act. Should there be taken into account for estimate of income such doles or gifts as were given by charitable institutions or individuals? It was probable that an old person would receive gifts for successive years to which he had no right, and for which he could make no claim. He did not quite know the attitude of the Government on this point. The Attorney-General, speaking of a casual gift, such as a Christmas-box, said he should not himself take into account anything unless there was a reasonable likelihood of the same thing occurring in the subsequent year. That was clear under the terms of the Bill. But ought it to be taken into account if there was a reasonable likelihood of its occurring. Ought they to take into account charitable gifts, either from individuals, friendly societies, endowed charities, or any source of that kind? In his opinion they ought not. Let them suppose that at the present time there was a charity which gave an old-age pension. Some societies did give pensions, and 622 others money grants and doles at certain stated intervals in the year. It was probable that the persons who received those gifts last year would receive them this year, and as long as they lived. The probability being admitted, ought those charitable gifts from those charitable funds and benefactions from private individuals to be taken into account. Surely they ought to be in addition to and not in subvention of anything the State might give. It was quite clear that there were cases in which such societies as he spoke of would desire to supplement the allowance given by the State. If such subventions brought the man within the limits of the sliding scale, were they at once to reduce the pension? They certainly ought not. The case in favour of not reducing the pension in the case of private benefactions was even greater. It was quite possible that though people might continue to make these charitable grants after the pension was given, they certainly would not do so if the only result was to relieve the Exchequer. Even if those gifts were taken into account there would not be the escape from the additional expenditure of£500,000 to which the right hon. Gentleman had referred, because people would cease to make gifts if they were made the grounds of reducing or refusing a pension. He should certainly support the Amendment.

§ MR. HAROLD COX (Preston)

said there was an extraordinary contrast between the speech of the Attorney-General and the attitude taken up by the Government a couple of days before. The Attorney-General gave as a reason for rejecting the Amendment that all these matters must be left to the pension committee, and in their discretion they must decide what an income was. As the Government had adopted a sliding scale, that meant that the committee was to decide what pension a person was to have. A couple of days ago an Amendment was proposed to give discretion to the committee, an Amendment which he supported on grounds of humanity. The Government refused to accept that because they said no discretion ought to be left to the pension committee; but now, according to the Attorney-General, 623 everything was to be left to the pension committee. That seemed a very important admission. They now knew the mind of the Government. These pensions were not to be given as a right, and they were only charitable pensions to be given by pension committees instead of boards of guardians.

§ MR. STUART WORTLEY (Sheffield, Hallam)

said the Chancellor of the Exchequer had said that the formidableness of this proposal could be measured by the fact that it would involve £500,000 a year. He did not think that they could escape that £500,000 a year. Instead of allowing the House to decide whether that £500,000 a year should be placed on the backs of the taxpayers, they were going to leave it to the chance selection of pension committees and pension officers, with the prospect, as the Attorney-General had reminded them, that was experienced in the case of the clergyman's Easter offering, which, like a shuttlecock, passed between the Court of first instance and the Court of Appeal, and eventually was decided on a final appeal to the highest Court of the Empire. The Attorney-General might revel in that prospect, but the humble pensioner would not regard it with the same delight, because what he required was a scientific way of deciding the question. These varying payments took the form of cash payments, and it would have to be settled some time or other how they were to be dealt with; but if they did not decide how they were to be dealt with for the purpose of calculating pensions, they would not only be throwing the duties of that House on to the shoulders of irresponsible subordinate officers, but they would be going further and putting power in the hands of the donors of these merely revocable and precarious payments to place this burden on the Exchequer. He hoped the House would make up its mind to settle this question once for all.

§ LORD WILLOUGHBY DE ERESBY (Lincolnshire, Horncastle)

said the clause as it stood would give an infinity of trouble, and lead to a good deal of injustice when the Imperial officer came to attend to the matter. He could not understand 62