§ LORD SOUTHWOOD rose to call the attention of His Majesty's Government to the desirability of instituting a national scheme of family allowances; and to move for Papers. The noble Lord said: My Lords, I beg to move the Motion on family allowances standing in my name. This issue is far from being new to your Lordships. It was last debated in this House in March of last year on the Motion of the right reverend Prelate, whose recent elevation to the Archbishopric of York we were all so pleased to welcome. Since then the principle of family allowances—or, as I prefer to call it, child endowment—has gained powerful and influential support. Public opinion which I believe has an unerring instinct for the right thing in 258 matters of this kind, is daily mounting in its favour, and I am glad to note that there is an awakening of interest on the part of His Majesty's Government. As late as 1938 the Government refused even an inquiry into the matter. Last year a more genial atmosphere was noticeable, because the then Leader of the House, Lord Moyne, promised the right reverend Prelate that the matter should be thoroughly investigated in responsible quarters, including those charged with the planning of our post-war system. A little later the Chancellor of the Exchequer, after persistent pressure from members of all Parties in another place, promised an inquiry into the cost of various schemes of family allowances. The result of that inquiry was issued in the form of a White Paper early last month, which I hope your Lordships may have had an opportunity of considering. It conveys, of course, no hint of the Government policy, but it sets out an objective analysis of various methods of administering and financing schemes of child endowment.
§ I shall not ask your Lordships to embark on the complexities of this White Paper, but shall content myself by quoting the estimate it gives for providing 5s. a week in respect of every child in the country under fifteen years of age, or in full-time education if over that age. The gross cost of making this payment is put at £132,000,000 a year. If the first eligible child is excluded, then the gross cost is put at £58,000,000 a year. If the first two eligible children are excluded, the gross cost is put at £23,000,000 a year. I prefer to develop my plea for an allowance for every child. I agree that £132,000,000—let me emphasize that that is the gross cost—is a lot of money, but if I am asked whether the nation can afford that sum; I must reply with the counter-question: "Can the nation afford not to afford it "? Should we not regard it as a thoroughly sound investment rather than anything in the nature of an expenditure. It may not be inopportune here to call your Lordships' attention to the fact that, according to the latest estimate of the Chancellor of the Exchequer—I think it was in March last—we are spending £12,500,000 per day on the war. That, of course, is apart from Lease-Lend expenditure, which at present is an un-ascertainable amount. So that really for the cost of the war alone for, say, ten 259 or eleven days, we could meet the entire cost of this great ideal of social service for a complete year.
§ May I just for a moment revert to the evidence of a growing and widespread approval of the principle of family allowances? A very important and influential section of the Conservative Party, conspicuous in which is Mr. Amery, has long advocated this reform. It has had the advantage, too, of the powerful and consistent support of The Times newspaper with its very great influence, particularly, if I may say so, in Conservative circles. The Liberal Party has, I believe, officially declared in its favour, as I think we may shortly be hearing from the neighbouring Benches. Inside the Labour Party, the project has been discussed for over a decade, and a decision has at last been reached. At the annual conference of the Labour Party held this Whitsuntide, a recommendation of the National Executive Committee in favour of a State provision of cash payments for family allowances was then passed by a majority of over a million votes. Again, at the Whit-sun Congress of the Co-operative Societies, representing, I think, over 6,000,000 members, the general principle of a non-contributory scheme of family allowances was unanimously agreed to.
§ So far as the trade unions are concerned, I am bound to admit that there has in the past been some opposition to any scheme of family allowances. The leaders of the opposition to it are men of great experience and integrity, and their views are not lightly to be dismissed. They fear that family allowances will cut across wage negotiations and will tend to encourage employers to refuse applications for increases in wage standards and to suggest instead increases in family allowances, which, of course, would obviously penalize the childless worker and the unmarried man. Other sections of the trade unions, on the other hand, do not share these views. They argue that wage standards depend entirely upon the state of the industry concerned, and, of course, on the bargaining powers of the two sides. A decision on this issue is expected to be reached at the Trades Union Congress which will be held in September next. It is not for me to anticipate the decision at that Congress, but I feel sure—and I am fortified in making that prediction by the result of the discussion at 260 the Labour Party Conference—that the idea of a national scheme, non-contributory and financed by the State, will meet with very wide support. So, my Lords, you will see how far public opinion, as expressed through such representative and influential bodies, is rapidly moving in favour of this tremendously important piece of social reform.
§ It may be that the war has aroused a national consciousness to what is, perhaps, after all, our greatest asset—the coming generation, to whom we have to look to build a better and, what I am sure we all hope will be, a much happier world. It may be that we feel that the very least a great nation can do at a time such as this is to provide a better future for the children of those splendid men—and women—who are dedicating their lives—yes, and giving their lives—to the greatest of all causes, the cause of freedom and liberty. Whatever the reason, there is undoubtedly a quickening in the nation's desire to see something done. As a matter of fact, in making family allowances to our Forces, and to a lesser degree in making a deduction from Income Tax in respect of children and in various other ways, I think we may say that the Government have already admitted in principle the necessity for family allowances. Are we not justified, therefore, in thinking that the time has now arrived to extend these benefits in full measure to the nation as a whole? And, in passing, let me draw your Lordships' attention to this, that even under our present unsatisfactory and inadequate system the families who are excluded from direct financial relief are the poorest of the poor, those whose earnings are so small that they are not liable even for Income Tax. It is a tragic anomaly, but it is nevertheless a fact.
§ In ordinary circumstances I should not in the least care about a referendum, a system which has some advantages but also I think many disadvantages, but I have no doubt in my mind that if a referendum were taken in this country on the question of family allowances, there would be an overwhelming majority in its favour. Why do so many of our fellow countrymen desire this reform? A section, a very important section, are deeply concerned about our declining birth-rate. We have, I am told, about the lowest birth-rate of any country in Europe. But, although the maintenance of our race is a matter which concerns 261 us all, I prefer primarily to base my appeal to your Lordships on a simple human issue. I claim that every child born should be given the fullest opportunity to grow up to be a healthy man or woman. Look after the children, and the race will take care of itself.
While I am on this aspect of the matter, may I very shortly quote one or two views of experts on social problems? Sir William Beveridge, who is well known as a great authority, wrote a letter to The Times on January 12, 1940, in the course of which he said this:
The needs of every family in the country vary with the size of the family; the greatest cause of poverty in this country is young children. The relatively high standard of health shown by children in the last war was in part a result of the system of separation allowances for men in the Forces. These do take account or family needs.
§ That view, I think I may safely say, is shared by many experts. Not long ago Sir John Orr estimated that the poorest groups in this country, with incomes of IOS. or less per head weekly, included 10 per cent. of the population but 20 to 25 per cent. of the children. The diet available was deficient for health in every particular.
Now I should like your Lordships to consider this matter for a moment from the angle of the mother. It is to the mother, I suggest, that these allowances should be paid. The case was put recently in most moving and telling fashion by Miss Aline Mackinnon in an address to the Women's Liberal Federation. She said:
Why should a child be doomed from the outset to have less good food, less birthday toys, just because when he arrives he finds that two or three little brothers and sisters have arrived before him and that all of them must have a little less if the new baby is to have anything at all.
§ Since I put this Motion on the Paper I have received a letter addressed to me at this House from a railway worker. He told me that he had seen in the newspapers that this matter was to be debated. He is a guard on the Great Western Railway and his letter is addressed from a town in North Wales. It is a very long letter and I will not weary your Lordships by reading the whole of it, but I would ask permission to read out a few extracts.
This is what he writes:
It may not be inopportune to place before you a short survey of the trials, privations and anxieties associated with the bringing up
of a family. We are a family of nine—seven children and our two selves … My average wages are in the region of four pounds a week. My wife is a wonderful cook, manager and dressmaker; yet our normal weekly budget, which is limited only to sheer necessities, amounts to £3 19s.
He sets out in very full detail the items of his budget, and then goes on:
You see, there is no provision for pleasures, in fact, we are both non-smokers and teetotalers and go very rarely to the cinema. Our children are brought" up in a Christian atmosphere and attend chapel and Sunday School regularly. Our budget may appear at first to be a miracle, but we rely for balancing it by the working of a Sunday turn of duty, and a little occasional overtime. Without these, we should be seriously in debt and possibly have to sell our furniture to pay for food …
My eldest boy is 17 and now away as junior engineer at the B.B.C. How we starved and struggled to give him a good education and place his willing feet on the first steps of the ladder, goodness only knows, but he has done wonderfully and won through in spite of everything. My second boy is 15 and is apprenticed to a firm of house furnishers; skilled in woodwork and a natural bent for building and engineering. We cannot afford to place him in his choice and let the nation receive the product of a natural creator, so he will have to eat his heart out at his present job.
He then gives particulars of his other five children whose ages range down from 13 to 4, and he finishes his letter in this way:
All my seven children enjoy good health and eat like horses. They are good and obedient children and a credit to their mother and to the nation. The only reason for our poverty is the existence of our family, and because of that (no little contribution to the real wealth of the nation) we must suffer. Our children do not know the joys of a seaside holiday. The sacrifice of rearing a family like ours cannot be put into words. It is one long struggle against adversity. The yoke is never lifted from our necks. We create and rear the children and when they are of an age the State takes them and uses them for its defence. Surely then, if the State expects to use them where and when it likes, it is only proper to make some contribution to the rearing and maintenance of them during their childhood. Big families should be an encouragement to further big families, but the atmosphere of a home where everything is always short and where peace and quietness are shattered by everyone doing everything in the same room has a deterrent effect on the next generation. Let us then make the big family a pleasure and a joy and build a new world on a surer foundation than the old.
§ This sincere and heartfelt letter speaks for itself. There must be thousands, many thousands, of similar cases. Is it right that parents should have to bring up their children under such handicaps—right for 263 the parents or right for the children? The average worker may be just able to cope with finding necessaries for one or two children; the third becomes burdensome; the fourth and fifth make things terribly difficult. This is obviously bad for the children, bad for the parents and most certainly bad for the State. Since this matter was last before your Lordships in March last year, Australia has established a scheme of child endowment at 5s. a week on a non-contributory basis. It became operative in July last and from the latest information I have been able to obtain from the High Commissioner in London it is working very satisfactorily. In this case I may say the 5s. is payable for every child after the first. A million children and half a million families benefit by the scheme and—a touch of generosity which I am sure your Lordships will appreciate—the 5s. is payable in respect of evacuee children from this country now in Australia. In New Zealand a scheme of family endowment was put into force in 1926—sixteen years ago. At first it was 2s. for each child after the second in the family with an income limit of £4. Now 4s. weekly is payable in respect of every child and the income limit is £5. If these reforms can be achieved in the great self-governing countries of our Commonwealth can we, ought we to lag behind in the Motherland?
§ I have very little more to say, but I would like to call your Lordships' attention to this: A very alluring programme of post-war reforms is at the present time being held out before the German worker. He is being promised better housing, lower rents and, among other desirable things, increases in family allowances. Note, my Lords, the word "increases." Already there are allowances of 10 marks a month for the third and every succeeding child. Early this year a definite undertaking was given by State Secretary Reinhardt that, after the war, children's allowances will be paid in addition for the first child and the second child belonging to a family where the income, computed in our currency, is roughly equivalent to 2s 5s. to £3 a week. We are all well aware of the motives of the Nazis in encouraging large families. We know that they are military motives; we know full well that they are sinister motives. We know that the Nazi's one ambition—God 264 forbid!—is to dominate the world. But I cannot help feeling that this country—the country whose love for children is one of its grandest traditions—should lag behind no country in the world in making provision for the coming generation. We talk much about the future. The nation's children are the future. How can a better future be built up if the generation which has to build it is undermined by malnutrition? It is elementary that you can build nothing permanent unless the foundations are sound. I am sure your Lordships will agree that our children are the very fount of national life and their future manhood and womanhood depend so much, so very much, on their early formative years.
§ Those parents—and there must be millions of them in this country—whose daily concern is to make both ends meet are bringing up their little ones at a great disadvantage. The pinch of poverty grows greater with every mouth they have to feed. Cannot we remove, and remove for ever, this reproach on us as a great and progressive people? Cannot we, even in this dark and difficult day, by this constructive act of statesmanship start a movement that will bring relief and security to millions, literally millions, of parents and confer untold blessings not only on the children of this generation but on the generations to come? I firmly believe that the reward will indeed be very great. It will mean healthier and happier children, healthier and happier parents, and where there are healthy bodies there you generally find healthy and contented minds. What greater incentive could we give to our Fighting Forces than the sure and certain knowledge that their children will be better provided for when they return to civilian life?
§ Just one more word and I have finished. I remember having the privilege of listening to a debate in your Lordships' House early this year—I think it was in February—on the Motion of the most reverend and noble Lord, Lord Lang, who was then Archbishop of Canterbury. I think it was the last speech he made in this House in that high office. The subject of the Motion was religious education in the schools, and I remember the noble and learned Lord, Lord Atkin, calling attention to the steady increase in juvenile offences. Do you not think that it is just possible that part at least of these juvenile offences is due to the fact 265 that many parents have not the means properly to look after their children? I do not think that this is a matter in respect of which we should flinch at the cost. Our children are an asset beyond price and we can confer upon them—and upon ourselves—untold benefits by expediting this long-overdue reform but, by delaying it, we are adding to the years that the locusts have eaten. By a gross expenditure of £132,000,000 a year—let me repeat, little more than our expenditure on the war for ten or eleven days—we can enrich our nation beyond measure. Even looking at it from a mundane point of view—and I prefer infinitely not to do so—it is an investment that will repay itself many-fold. The money will' be spent upon necessities. The greatest employer, undoubtedly, in this country is the housewife out with her shopping basket, and her increased effective demand will mean greater employment over an immense range of industries. I can conceive of no act that will bring greater happiness to the community. The arguments in its favour are, in my view, so overwhelming that, in all earnestness, I appeal to His Majesty's Government to lose no time in bringing about this much-needed, this vital measure of social reform. I beg to move.
§ VISCOUNT SAMUEL
My Lords, as the noble Lord who has just spoken has said, this is a subject which is not by any means new to the House. In fact this is the fourth occasion upon which it has been discussed within the last few years. In 1938 the most reverend Prelate, who was then Bishop of Winchester but is now Archbishop of York, moved a Motion on the subject asking for an inquiry. In this many of us supported him, but the reply received was in the negative. The following year I had a Motion on the Paper, and moved it, dealing with the general question of the coming decline in the population, on which occasion the subject was again discussed. In 1941 the Bishop of Winchester again moved. Now we have this fourth occasion, and I am very glad to think that, for the first time, the Labour Party has spoken officially in support of this policy, and, by Lord Southwood, has itself moved the Motion. For ten years this reform, which, as the noble Lord has said, is long overdue, has in fact been blocked by certain of the trade unions through opposition 266 to which the noble Lord, Lord Southwood, has referred. Had it not been for that opposition—for a measure such as this could not be carried if definitely opposed by the trade union movement—I believe some such reform would have been effected some years ago.
Speaking on behalf of the Liberal Party perhaps I may express some little satisfaction that we, who have been advocating this reform for a long time, should now receive the somewhat belated support of the Labour Party, and should have received it in a speech to-day delivered with so much conviction and cogency that I feel sure the whole House must have been impressed by it. I do not propose to cover the same ground as the noble Lord who has just spoken. I propose in the first place to devote myself to this point. In some of your Lordships' minds doubt may exist as to whether this measure is really right in principle; whether its advocacy is anything more than a concession to political pressure, to a tendency of democracy to impose burdens on the nation at large for the advantage of the poorer classes of the community. As I say, I propose to deal with the question as to whether this scheme is in fact sound in principle; further, whether the nation can afford sums of this order at a time when already vast expenditure is being undertaken for the inevitable purposes of war. After that I propose briefly to deal with a number of points arising out of the nature of the scheme which may be proposed.
With regard to the point whether this is anything more than pressure from the working classes for something which may perhaps have to be conceded for fear of worse, or whether these family allowances are to be justified in principle, I would represent to your Lordships that this is only one, and the latest, proposal in a long-range policy adopted by this country deliberately and consistently at various periods. The first measure of the kind was the Elizabethan Poor Law which decided that the nation would not allow anyone actually to starve. Then there was a long gap of three hundred years until at about the middle of the nineteenth century there were laws passed relating to public health, designed to ensure that the whole nation should be able to live at all events in some degree of healthy and sanitary conditions. Following 267 upon that there came the great educational system which at the expense of the nation—though at first at the cost of some fees to parents as well—decided that children of the working classes ought to be educated at the common expense, though there was considerable objection by many people who said: "Why should I pay for the education of other people's children?"
After the General Election of 1906 there came a whole series of social reforms. First the old age pensions, then large State contributions to national systems of health and unemployment insurance, grants for maternity and child welfare centres and other measures. These were followed up by the Conservative Party who later introduced an important Bill for widows' and orphans' pensions. I think that the nation is agreed that that policy, taken as a whole, was sound and wise, and that no one would wish to abolish these measures now or to stop this expenditure even if it were politically possible to do so. When the Nazis boast of their accomplishments in this sphere of social reform, and speak of the large programmes that they have for the future, we do not say they are proceeding altogether on the wrong lines, that they are merely yielding to pressure, and that they are squandering the wealth of their nation in order to keep the poorer classes quiet. Our answer is that our own system of social reform of this order is wider and more generous and more extensive—which is, in fact, the case. It has grown up piecemeal and now the Government have set on foot a Committee of Inquiry to make proposals to consolidate it into a co-ordinated whole, that Committee being under the Chairmanship of Sir William Beveridge, who is, I think, becoming entitled to the name of "Coordinator-General to the British Empire."
Family allowances, as I say, are the latest of the proposals for continuing the policy of social amelioration which has been pursued during these generations. Can the nation afford it? The sums that are quoted are very large, but they ought to be looked at not only as they are in themselves but also in relation to the national resources. The growth of production in this country during recent generations, and especially during the last generation, has been phenomenal. Owing 268 to the development of science and its application to industry and agriculture, owing to the greater use of machinery and to chemical industry, and owing to the improved production from the soil, there has been an enormously larger output of commodities for the same amount of labour. But the labour force has also been increased, partly by the great growth of population, partly by the advent of numbers of women into the industrial field, and partly by the fact that the nation is healthier, and that less working time is lost by sickness.
When this is translated into terms of money, the facts are startling. I do not think that they have been quoted before in this House, and I should like to invite the special attention of your Lordships to them. From information kindly supplied to me at my request by the office of the Royal Statistical Society, I find that at the turn of the last century the average of national income for the decade 1894 to 1903 was £1,666,000,000 a year. In round figures, £1,600,000,000 a year was the national income at the beginning of this century. Before the last war, according to Professor Bowley, who is the leading statistician in these matters, the figure had risen to £2,000,000,000. A White Paper published by the Treasury in April of this year gives the figure just before the war, in 1938, as £4,595,000,000, and in 1941 as £6,338,000,000. The pound sterling has not the same value as it had thirty or forty years ago; nevertheless, after making allowance for that, the difference is very striking between a national income of £1,600,000,000 a year at the beginning of the present century and the present figure of £6,000,000,000.
It is against that background that we ought to consider these figures of expenditure on the Social Services. There was a Parliamentary answer given in the House of Commons on February 5 of last year which stated that the total expenditure upon all the Social Services in Great Britain, including education, and including rate expenditure, was £530,000,000 before the war. It is in relation to those figures that I would invite your Lordships to consider the proposals now before the House, and to answer the question whether it is possible for the nation to assume this additional burden.
There having been, owing to the growth of science, the increased use of machinery 269 and so forth, this large development in the production of wealth, the question arises how that new surplus should properly be used. It is, of course, being spent in many directions—much more leisure for the nation at large, shorter hours of work, holidays and so on. The standard of material comfort has risen. Wages have been improved, salaries have been increased, prices of many commodities have been lowered compared with what they were in the previous generation, and people arc able to enjoy more commodities and of better quality. Taking the country as a whole, the sum devoted to profits has greatly increased, and there has been visible much greater luxury among the wealthy classes and a larger number of very large fortunes. In the United States a similar process has given, rise to a great number of vast, and indeed, most excessive, fortunes.
Furthermore, this new surplus has been annexed by the State to a great extent through an increase in taxation and an increase of rates, and has been devoted to various purposes. Much of it, unhappily, has had to be devoted to warlike expenditure. A good deal has been devoted to improving the material equipment of the nation—transport, roads, ports and so forth—and some has been devoted to research, to improving the environment of our cities, and to the preservation of the countryside. It has been used for the necessary measures for raising the standard of life of the population, through better education and better Social Services and other things of that character. Furthermore—and this is the point which is directly relevant to this Motion—out of this vast increase of wealth, apart from all this social expenditure and expenditure upon enjoyment in various directions, there has been a direct attack upon poverty itself, by means of the various measures of social reform which have been carried out during the last generation.
I submit that the most important gap in this general series of measures which has been paid for out of this increase of national wealth is in relation to children. I propose on this to speak only very briefly, because the noble Lord who proposed the Motion has already covered the ground in his admirable speech, and also because I am to be followed by the most reverend Primate, the Archbishop of Canterbury, to whose maiden speech in 270 this House in that capacity we all look forward with much pleasure. He himself has been an advocate all his life of a broad policy of social progress, and we hope that his leadership of the Church, in the position of great and commanding influence which he now occupies, will enable him to give additional emphasis to that side of our national life.
The child is an and in himself, not merely a means to an end. The child must be considered for his own sake, and, if the welfare of the child is hindered by poverty and malnutrition and the miseries of an overburdened household, then he suffers, and the duty of the nation has not been done. But we know that children, who should form the chief happiness of family life, very often, among the working-classes, are a material cause of its wretchedness. Our industrial system is based upon the idea of the average wage. The wage system is based upon the notion of a wage for an average family. This idea of the average, however, is profoundly misleading. It may be most useful when dealing with figures on a sheet of paper or with curves on a graph, but when you translate those figures and those curves into human lives, the whole notion of a wage to be fixed in accordance with an average family becomes absurd. In this country 1,250,000 children belong to families which have four, five or more children, and to say that that does not very much matter because the average wage takes into account a great many families who have no children, or only one or two, is no satisfaction to the families which have large numbers of children, and does not correspond in the least to the realities of the case.
The burden imposed upon the families by a number of children is partly due, as the noble Lord has said, to the State itself. We ourselves have made it harder for these large families by taking measures, which in themselves are most necessary, for retaining the children at school to a much later age than used to be customary, and again, by preventing them from going into various employments until they reach an older age. The effect of that has been to make children much less of an asset to a working class household and much more of a burden. Furthermore, there is the question of the coming decline of the population. The White 271 Paper issued by the Registrar-General a few weeks ago tells us that in the next decade, or soon after, the population of this country will take a downward turn, and that that will proceed progressively during the years that will follow. Indeed, it might become catastrophic if emigration were to be resumed on a large scale in the post-war world. It is not to be suggested that 5s. a week allowances for children will have an immediate and very marked effect upon the birth-rate, but the burden of children is a factor in causing the restriction of families, and if a working-class family receives for four children £1 a week, that would certainly be a factor that would be taken into consideration in considering the questions relating to the limitation of families.
Now let me turn very briefly to the particular points that will arise on schemes that have been proposed. I will not detain your Lordships by arguing them one by one and giving the grounds for the beliefs that I hold. I would merely urge that after giving some study to these questions for a good many years the following are the elements that would characterize a good scheme of family allowances, if your Lordships agree that a case has been made out for any scheme at all. First, I think, as most of the supporters of these measures believe, it ought to be a State scheme and not impose a charge mainly upon industry, as has been done in France and Belgium and some other countries. I came to that conclusion with some hesitation because I was always rather attracted to the scheme in which industry should be required to pay this charge; but on the whole I think the arguments in favour of a purely State scheme outweigh it. And similarly, a contributory insurance scheme would, I think, not be so satisfactory as the ones that have been mostly discussed by the public at large, and in the White Paper which has been presented by the Chancellor of the Exchequer. Five shillings seems to be a suitable sum, and that is generally agreed as the basis of a desirable scheme.
I am one of those who think that this sum ought to be paid in cash, and not paid in food, as is sometimes suggested. It is often said that the problem would not be so acute and the harm done by poverty would not be so great if the mothers were more skilful in buying 272 foods and in preparing them, but that is not borne out on examination, certainly not in regard to the purchase of the foods. In an interesting article in The Times a few days ago a Report was quoted of a Committee on Nutrition of the British Medical Association, in the course of which they say that, subject to her purchasing powers being adequate, the average housewife does, in fact, purchase by rule-of-thumb methods foodstuffs which broadly approximate to dietaries considered by physiologists to be satisfactory. The question has arisen whether the higher incomes ought to be excluded, whether the allowances should be given only to the poorer strata of the population. On that I would submit that a universal scheme is preferable. In the first place the saving would be small. The White Paper shows that if the line were drawn at £420 a year and incomes above that did not receive the allowance, the saving would only be somewhere in the neighbourhood of five per cent. of the total charge. It would involve great complexity of administration and also the embodiment of the principle of the means test, to which considerable objection is taken.
Then, if it were to be agreed that the scheme should be universal a difficult question arises with regard to the present Income Tax allowances. Ought the family allowances to replace the present Budgetary allowances in respect of children? Some of the advocates of family allowances seem to regard those Income Tax rebates as being in fact a State endowment for children of members of the middle and wealthier classes. That, I would submit, is a complete fallacy. A tax rebate is not the same thing as an Exchequer grant. Take, for instance, the working man with an unduly low wage of £2 a week. He would pay no Income Tax at all. If he were to pay the standard rate of Income Tax of 10s. in the pound, £1 a week would be taken from him in taxation. The fact that the State does not take that £1 is not the same thing as saying that the State gives him £1. In other words, a rebate is not the same thing as a grant.
I could illustrate the matter in a different way. I have been reading in the last few days a book by a friend of mine who, thirty years ago, was Inspector of Gendarmerie in Turkey. At one time he 273 had to suppress a great deal of brigandage in the neighbourhood of Smyrna, and there was one brigand who was something of a Robin Hood and who, in a particular case, had kidnapped the son of a fairly well-to-do resident of the district and had said that he would release him only on payment of £1,000. With great difficulty the father got together £1,000, came to the rendezvous, and handed it over. Whereupon the brigand chief said he was sorry he had been troubled to collect so large a sum; he had been misinformed as to what his means really were and he returned him £400. Far be it from me to suggest that the Chancellor of His Majesty's Exchequer resembles in any degree a Turkish brigand, but it is true in both cases that to abstain from taking is not the same thing as to give.
Well, the children's allowances in Income Tax take into account, or are intended to take into account, all the circumstances of the case, and are intended to be equitable, considering the social conditions and customs of the nation. They go up to 9s. 7d. a week per child, and when you are considering what the effect on Income Tax rebates would be if a general all-round grant of 5s. a week is given it would be wrong to suggest that because parents for the first time got 5s. a week, the Income Tax payer should forfeit whatever allowance he may get at the present time which may rise in some cases to 9s. or more. This is the conclusion I submit to the noble and learned Viscount on the Woolsack, an ex-Chancellor of the Exchequer, who will reply to the debate. The conclusion should be this—and I should be very interested to know if he would agree—that when the all-round payment of 5s. a week is made, that is a new circumstance which the Chancellor of the Exchequer will be entitled to take into account when he is considering Income Tax rebates for children, and it will not be unjust to modify the rebate system in order to leave the taxpayer no better off, nor worse off, than he was before—that is to say, the first 5s., similarly to the first 5s. in other State payments for any purpose for children, should be cancelled in view of its being replaced by the 5s. children's allowance. This would be an offset to the Exchequer. It should be done, I submit, not as part of the measure establishing family allowances, but should be done in a Budget as a modification of the rebate 274 system. If that were done, it would save many millions a year in the new burden imposed on the Exchequer.
These are the observations which I desire to offer to the House. If, nevertheless, this burden is found to be too heavy in present circumstances, and some limitation should be imposed upon it, that limitation could with least harm be effected by excluding the first child. That would save about 40 per cent. of the cost. I should regret very much if that limitation were made, and I think the scheme would be much the worse if it were done, but in the circumstances of the present time it is possible that the Chancellor of the Exchequer might find that indispensable. In New South Wales, where a scheme was adopted in 1929, and in Australia, where the Child Endowment Act was passed last year, the first child has been excluded. It may be said that even if the first child were now excluded, that could not be maintained because pressure would soon be brought to bear to remove that limitation. I believe that is true, but if the financial circumstances after the war were such that it would be impracticable to bring in the first child at the cost of very many millions, then that pressure could be resisted, while if the financial conditions were not such, then the change ought properly to be made and the first child, after an interval, should be brought in.
I trust it may be found possible for the Government to give a favourable reply to these representations, and that even during the war a beginning may be made in this direction. It would show great strength if, while we are engaged in this gigantic struggle, we did not postpone the development of our programme of social amelioration. It would prove to the people at large, and in other countries, that we are in earnest when we say we are hoping, and indeed determined, that the war shall not prevent a great improvement in the social conditions of our nation. Your Lordships may perhaps differ as to whether this is a propitious moment, but I trust that in general you will approve at least the principle of the Motion that has been made by the noble Lord.
THE LORD ARCHBISHOP OF CANTERBURY
My Lords, I am very glad that my first opportunity of addressing your Lordships since I became Archbishop of Canterbury should be connected 275 with a subject that has engaged my interest and attention now for a considerable number of years, and with an increasing eagerness to see action taken. Perhaps I may be allowed to say what were the circumstances which led to my becoming so strongly persuaded as I am of the importance of this step. It represents a line of approach to the subject that is not quite the usual one, and therefore to some extent reinforces the more familiar arguments. We have to remember that we are discussing this matter in time of war when, in consequence, there is, for practical purposes, no great problem of unemployment; but it was as a result of the study of the problem of unemployment that I was led to desire so eagerly a general scheme of family allowances. During the worst period of that trouble I appointed a small committee to consider various activities set on foot by voluntary agencies so that we might be able to give advice for the future as to which were the more valuable. We very quickly found that there was real need for a much wider investigation than we had started, and the committee was therefore reconstituted with a view to inquiring into the human circumstances resulting from unemployment so far as they were not the subject of inquiry by Royal Commissions and other agencies of the State. Here I should wish to acknowledge the very remarkable generosity and kindness of the noble Lord, Lord Rushcliffe, and his colleagues in the Unemployment Assistance Board, in putting at our disposal all their resources of knowledge, and allowing us access to what are, of course, very carefully guarded documents—the registers of the unemployed, with notes upon their condition.
We wished to send round a team of inquirers, and we found that the Pilgrim Trust were eager to make a similar inquiry, with the result that we joined forces. The Pilgrim Trustees added two members to the committee I appointed to supervise the inquiry, and the team of students whom we had already chosen went to a number of places to pursue their investigations. The result was that very remarkable volume, Men without Work, which received the warmest possible commendation from almost all sections of the Press, but was to some extent obscured from the public view by the rising clouds of war. For that 276 reason it did not obtain as much attention as I think it was really entitled to on the part of the public. None the less it did have one rather remarkable effect in that, through the attention which it called to the situation of those who are really poor and have large families, it brought the question of family allowances into a prominence that it had not previously had. Several of those who have been intimately connected with Social Services for a long time past declared that it was that volume, Men Without Work, the Report of the Pilgrim Trust inquiry, which put this for the first time effectively on the map.
The importance of that is that it arose from an inquiry into quite a different set of circumstances—circumstances already largely met by the activities of the Unemployment Assistance Board. As we went into the conditions of the unemployed, it was found impossible to detach the whole of that inquiry from the problem of poverty generally. There was further staring us in the face this most important fact that it was more profitable for a man with a large family to be unemployed than to be employed in many industries. That is, of course, as disastrous as any state of things can be. No one is going to propose, I think, to reduce the family allowances given under the unemployment scheme, but we have either got to do that or else secure that this balance is in some way redressed; otherwise whenever there are periods of unemployment—and while we hope that by wise provision we may avoid anything so serious as the period through which we went round about 1929 to 1931 and so on, yet we cannot hope altogether to escape the incidence of that evil in future—whenever unemployment recurs we shall, unless we have taken some such step as this, again be confronted with a situation in which there is a direct financial inducement to a certain section of the people to be unemployed rather than employed. I have singularly little sympathy with the principles of the Poor Law Report of 1832, or the Poor Law Act of 1834, but so violent a reversal of the principle of less eligibility is one that I imagine nobody in his senses is going to propose.
It was partly then from the repercussion of the whole unemployment problem upon this matter that we were led as a remedy—and this is indeed the only proposal 277 very strongly advocated in that volume—to the scheme of family allowances. When we consider the matter as it arises in peace-time perhaps its relation to the unemployment assistance is the most conspicuous factor that makes it appear that some kind of action is really necessary. But there is an equally strong reason for taking action in war-time. Though the Government have been successful to a degree which calls for gratitude from all of us in their control of the food situation and the prevention of any startling rise in prices, yet, of course, prices have risen, and rising prices impose a burden upon the large family far greater than upon the small family in the wage-earning classes. There is, therefore, every reason in the circumstances of war for bringing this forward as a war-time measure, but there would be other reasons equally cogent for maintaining it as a peace-time measure. The reasons are different in war-time from those in peacetime, but the balance of reasons in both cases is heavy in favour of taking a step in this direction.
Obviously the plea that comes home to us most strongly is that in this way you can afford relief to the worst types of poverty. A very high proportion of primary poverty occurs in large families, and, if you lift the burden from those families, you are dealing with the problem where it is most acute and where none of us, I imagine, would wish to say that the people should be held in any way guilty for what they are suffering. But there is a reason which I think should figure more largely in any consideration of the subject. We speak a great deal about the health of the children, and that is the primary consideration. But, so far as sentiment is to be brought in, I think the sentiment should be directed to the working-class mother. I would submit to your Lordships that she is the real heroine of our phase of civilization, even more than the men who work in dangerous trades. The working-class mother with a large family never stops working from morning till night. She has no remuneration for her work at all, and though it is true no doubt that where the family is too large for the family resources the children are liable to go without, there is someone in the family who goes without still more, and that is the mother. She is the housekeeper. To her the money for maintaining the family is entrusted, 278 and it is her means that are cut down first and most drastically.
There is surely a strong plea for justice to this large and heroic section of the community which would be met by a system of family allowances. It can be met in no other way, and that is one of the reasons why it would be desirable, as is proposed, that the payment should be made to the mother, not only because it is she who has the spending of the money for the sake of the children, but because it is a recognition of the great service that she is rendering day and night to the community by her labour in caring for and bringing up the family.
As I have said, the subject is so familiar that I do not want to go over the ground that has been well covered before, and I will very briefly turn to the question whether we can afford it. This is one aspect of the question which I am not specially competent to discuss, but there is one point in reference to it which it is worth while repeating to remind, if not ourselves at any rate those who are very frightened of growth of expenditure of this kind, and that is the complete, the almost absolute difference, between expenditure within the country and the spending of money outside it. This, after all, is a circulation of our resources within the country. As the noble Lord who introduced the Motion pointed out, this is highly productive, for all this is going to be spent upon necessities, upon exactly that kind of goods which is the occasion for the largest amount of employment, and, therefore, of new work per pound invested. It is not a matter of circulating out of the country wealth that we possess, and parting with wealth and writing it off for something that is consumed and done with: it is indeed the most productive kind of expenditure upon which we can engage.
The noble Lord was perfectly entitled to ask us to regard it rather as investment than as expenditure. Now in order to invest money no doubt you have to be able to lay hands on it, but there is not any difficulty about that. There is no doubt that it can be obtained if there is the will to obtain it. The question, fundamentally, is not really whether the nation can afford it—certainly it can—the question is whether we should too much dislocate the system of life with which we are familiar by withdrawing this large sum from those who are still able to pay something 279 for the benefit of the large number who are able to pay very little or nothing at all. But it is all a matter of internal adjustment. There is no question of taking any of the nation's wealth and sending it outside the country, so that the nation itself is not in the smallest degree impoverished. It is simply a wiser distribution of wealth.
The noble Viscount who followed drew a distinction, no doubt a perfectly just distinction, between an Income Tax rebate and an Exchequer grant, but the net result of both processes is that the citizen has the money and the Exchequer has not. I do not much care under what heading of bookkeeping that result is produced, but that is what happens. The money is either left in the Income Tax payer's pocket or put into the pocket of someone who is not an Income Tax payer; in either case it is not in the Exchequer. The important point surely is this, that there has been relief offered in respect of children to that section of the community which is very well-to-do, and we can hardly be satisfied to let that stand without taking care that the benefit is extended also to those upon whom the burden lies most heavily.
And the proposal is just in principle in this sense, that the care of children, while it is primarily the concern of parents, is not the concern of parents only; the State itself is deeply interested in the rearing of healthy children in sufficient numbers for its welfare. Therefore the State which has so deep an interest in the matter may reasonably take its share in the burden. I know that there is anxiety in some quarters that any measure of this sort will diminish parental responsibility and dissipate family affection and so forth. I remember when I began turning my attention to this question some forty years ago, reading a book called The Heart of the Empire, edited by Charles Masterman. One of the chapters opened with the picture of a wealthy lady well known for her social good works, ringing the bell and saying to the butler when he came: "Please send the nurse to take the children off; they are making rather a noise and disturbing me in my writing." When this was done, she sat down to compose her article on the importance of not giving school meals to the children of the poor for fear of destroying family 280 affection. Family affection, like other sentiments, flourishes best when not subject to intolerable strain, and we shall strengthen rather than weaken family life if we secure conditions where parents can feel that their children are not at any rate so great a burden and do not bring to them such perpetual strains and anxieties as in the conditions with which we are familiar now. There is an appeal for sympathy, but it is more than an appeal for sympathy. It is, I think, a real appeal to justice on which the case for family allowances must rest.
§ LORD RUSHCLIFFE
My Lords, I think probably all your Lordships will be grateful to the noble Lord, Lord South-wood, for having raised this question this afternoon. It is a question which has been before your Lordships on a good many occasions, and if any justification were needed I think it would be found in the speech that we have just heard from the most reverend Primate. Speaking for myself I am very grateful for what he was good enough to say about the help which the Board of which I was Chairman was-able to give in the most important inquiry with which he was associated. The provision of family allowances has always had very powerful advocates in your Lordships' House. The noble Viscount, Lord Samuel, has advocated the principle on more than one occasion with great power, as indeed he has to-day, and the most reverend Prelate, when Bishop of Winchester, recently raised the question and has always been a firm supporter of the principle. I think that what really is the substance at the back of this demand for family allowances is this. It is felt that in cases where there are large families a system of a flat rate of wages for low-paid workers does not secure, and cannot secure, adequate provision for their families. I think that puts the case quite shortly, and that is really what is at the back of this demand for family allowances.
I agree with what the noble Viscount, Lord Samuel, said a moment ago that this is really an attack on poverty. I myself would always dissociate the question of family allowances from any question of wages. Family allowances should not be regarded in any case as supplementation of wages. They should be regarded as an attack on poverty and a defence against the results of poverty. 281 That is a most important distinction to make. This question of family allowances is no new one. It is a question which, if I may so put it, has troubled the conscience as indeed it has perplexed the intelligence of men through many generations who have striven to improve the social conditions of this country. I have here the report of a speech made in another place on February 12, 1796. It was made by Mr. Pitt on the Second Reading of a Bill introduced by Mr. Whit-bread. The Bill was called the Labourers' Wages Bill and the Motion for the Second Reading was seconded by Mr. Honey-wood. Mr. Pitt opposed this minimum wages Bill and he opposed it on the grounds that it would not secure the object which Mr. Whitbread had in mind.
What he said was this:Neither what the honourable gentleman proposed, nor what he himself had suggested, were remedies adequate to the evil it was intended to remove.Later on he said:Now by the regulations proposed, either the man with a small family would have too much wages, or the man with a large family, who had dons most service for his country, would have too little. So that were the minimum fixed upon the standard of a large family, it might operate as an encouragement to idleness on one part of the community; and if it were fixed on the standard of a small family, those would not enjoy the benefit of it for whose relief it was intended. What measure then could be found to supply the defect? Let us make relief in cases where there are a number of children, a matter of right and an honour, instead of a ground for opprobrium and contempt. This will make a large family a blessing, and not a curse; and this will draw a proper line of distinction between those who are able to provide for themselves by their labour and those who, after having enriched their country with a number of children, have a claim upon its assistance for their support.That is in substance exactly the argument which has been addressed to us to-day by Lord Southwood, by Viscount Samuel and by the most reverend Primate. It is really a suggestion that you can only achieve what Mr. Whitbread had in mind by a system of family allowances.
I was first brought up against this question of family allowances in connexion with my duties as Chairman of the Assistance Board. In a chapter over my signature in the Board's Report for 1937 it was said:The Board's obligation under the Act is to provide for the needs of the applicants and their families… The applicants whose allowances approximate most closely to the 282 amounts they would earn if in work are mostly men with large families of children. The needs of such households are not necessarily less because the father's normal wages arc: low having regard to his domestic responsibilities.The Report also says:In about 6 per cent., or over 30,000, of the cases the applicant is receiving an allowance from the Board which is within 4s. of his normal wages.That is exactly the point made by the most reverend Primate. The Report goes on:An unemployed man is saved various items of expenditure which an employed man must necessarily incur and, in these cases, therefore, it can be said that the applicant is as well off on the Board's allowance as he would be in employment.Nobody would suggest that unemployment allowances should be reduced. In my view it would be impossible to reduce them and most improper to try to do so. But a system which produces the result that a man is as well off, if doing nothing as he would be if in work, or even better off than if in work, is self-condemned. It is a situation which it is wholly impossible to justify. It may be said that the position in 1937 was very different from the position now. It may be said that wages in 1942 are very different from what wages were in 1937, and that therefore the considerations which prompted the words in that Report do not apply now as they did then. I do not think there is any force whatever in that objection. I will give my reasons for that opinion. In 1937 the amount of the allowances for unemployed persons was considerably less than now. For instance, in 1937 24s. was the allowance for a man and his wife. Now it is 30s. which is an addition of about 25 per cent. The allowances for children have gone up in about the same proportion, 25 per cent. But the cost-of-living index in 1937 was 160. In December, 1941, it was 201, which is also an increase of 25 per cent. Therefore, the argument which I ventured to set out in this Report in 1937 is just as valid now as it was then, because while wages have gone up—I do not know by how much they have gone up—the cost of living has gone up, probably, to at least an equal extent.
I think that, probably, the most succinct statement or summary I can find of the argument which I venture to address to your Lordships is contained in the speech made by Mr. Amery in the House of 283 Commons in June, 1938. Referring to the uncorrected flat rate of wages he said:It means that the coming of every additional child is a hardship not only to the parents but to all the rest of the family. The larger the family the fewer the rooms they are crowded into, the less food they have for each child. The whole' burden of poverty falls hardest upon those children who come into existence in large families and is itself a cause of the creation of poverty.He then went on to refer to the point made by the most reverend Primate. He pointed out that the birth-rate in 1938 was already 25 per cent. below what was required to maintain "our present population."
These considerations seem to me to establish an absolutely irresistible case for the principle of family allowances. When, in my capacity as Chairman of the Assistance Board, I had to consider these matters very closely I made what inquiries I could as to how far this system had been adopted in fact in this country, and I found that there was a number of firms of high standing who had in their own businesses adopted a system of family allowances. There is really no secret about it. If there were I would not give their names, but their names have been published, so I do not hesitate to mention them now. I found, for example, that a very important firm of paper bag manufacturers—who, I believe carry on business in Bristol—Messrs. E. S. and A. Robinson, gave 2s. 6d. a week for each child in excess of two, the wage limit of the parent being £4 a week. The significance of that case is that it is a trade board case and the wages of the operative are governed by the trade board. In spite of that, this enlightened firm of manufacturers thought that in addition to the wages which they were bound to pay under the trade board ruling an addition should be made for the children of the operatives.
Messrs. Pilkington, a well-known firm of glass manufacturers at St. Helens, gave 5s. per child for all children in excess of three, with a wage limit of £400 a year. Macleans, a very well-known firm, gave 5s. a child, starting with the second child, the wage limit being £5 per week. Messrs. Bibby and Sons, of Liverpool, make up wages to a, minimum where there are three or four children, and to a higher minimum where there are five children or more. Then the very well known firm 284 of Tootal, Broadhurst—a very big Lancashire cotton firm which before the war employed between 4,000 and 5,000 workers—gave 5s. a week for each child after the first three, with a wage limit of £6 per week. These examples show that this system of family allowances has been, and is, in actual practice, at any rate in the establishments of these firms which are amongst the most important firms in their different trades in the country.
The experience of other countries has been referred to. The noble Viscount, Lord Samuel, referred to New South Wales. A system of family allowances was tried in France during the last war. When the cost of living went up as it did France, of course, was confronted with the position that the wages then paid in the country were insufficient. Instead of doing what we did here—that is, raising the wages of the operatives—what they did was to give monthly allowances for each child of the operatives. The effect of that was that as they mixed up wages with allowances they found that employers began, if they could, after the war, to employ single men who had no children. So that system—which was wholly wrong in principle—of mixing up allowances with wages, was abandoned and they adopted another complicated system of a pool which I need not go into now.
I am not quite sure that I agree with what Lord Southwood said when he suggested that these allowances should be paid for every child from the first one onwards. It would be true, I think, to say that, generally, in wage negotiations in the case of women the negotiations centre round a single woman with no dependants. But if you are considering the wages of men negotiations centre round the family man, the man with a wife and one or two children—what you may call a normal working-class family household—and wage rates are based on conclusions which are come to bearing these consideration in mind. With regard to the whole question of family allowances, I think that the case is, in principle, absolutely irresistible, but I would not myself agree that allowances should be given for the first two, and possibly not for the first three children, for the reasons I have given. I believe that wages are almost invariably fixed either by trade boards or by negotiation upon a footing, as I say, that a man is a family 285 man, or in the case of a woman that she is a single woman with no dependants.
I do not propose to follow the most reverend Primate in his excursions into the realms of finance. I do not know that this would be the appropriate occasion to do so. I should like, however, to make one or two observations which occur to me, with no special knowledge of these things, but which seem to me fairly obvious. No one can say what the financial position of this country after the war is going to be. No one can say what money will be available then. What I am saying applies equally whether there is a Liberal, a Conservative or a Socialist Government in power. In the first place, there is no doubt at all that the productive capacity of this country will be enormously greater after this war than perhaps it has ever been before, and its capacity for producing wealth will be greater than it has ever been. The difficulties of those who at that time will be responsible for the conduct of affairs will be concerned not so much with production as with distribution. That is probably fairly obvious.
On the other hand, it is quite clear that we shall be faced with a gigantic debt. We shall be faced also with immense taxation. Furthermore, we shall have with us thousands, and possibly hundreds of thousands, of people whose livelihood has been destroyed, whose little businesses have been bombed and who, owing to the war, are completely without employment. The noble Viscount, Lord Samuel, said the other day in this House, and I think quite truly, that there was a real danger that two or three years after the war there might be a depression worse than that which followed the last war. One hopes that that may not occur, but it is at any rate a real possibility and a real danger. It is by no means certain, I suppose, that after this war instead of being a creditor nation we may not become a debtor nation. What that means when it comes to buying abroad raw materials for our manufactures and food to eat I shall not enlarge upon now, but obviously if that should happen it would have a very serious effect. I should like to say this with all the emphasis at my command. Nobody is more anxious than I am that social conditions should be improved, and that everything possible should be done to improve them; but what I am just as anxious about, speaking 286 as an individual, is that hopes shall not be raised, expectations shall not be excited, or promises made which would turn out in the event to be absolutely impossible of fulfilment whatever Government may be in power, and under whatever system of government we may then live.
Let me remind your Lordships of three or four expectations which have already been raised—I shall not refer to them as promises. In the first place, we have been told, and indeed we know, that immense sums will have to be spent in this country on rebuilding. We shall have to rebuild our shattered cities. We are told that we are going to replan and rebuild, as indeed we must, not only London but almost every town in England. That alone will cost an immense sum of money. Next—and I am bound to say that this made me shudder a little—the noble Viscount, Lord Samuel, said the other day that steps were being pre pared "for feeding the populations of Europe and Asia." That in itself is l pretty big undertaking, I should imagine, but apparently it is one of the things for which we arc already preparing, and I gather, from what the noble Viscount said, that it is an obligation into which we have already entered.
§ LORD RUSHCLIFFE
My anxieties are relieved, to some extent, by what the noble Viscount has just said. Then there is the question of old-age pensions. Under the present system, where old-age pensioners have needs over and above the present pension of 10s. a week they are dealt with by supplementary grants. There is now, I believe, a request that the scale of old-age pensions should be raised, so that there will be no need for supplementary pensions at all, but so that all needs will be satisfied by an increase of the flat rate. That may or may not be the proper thing to do, but I would point out that, if it is done, and if old-age, pensions are raised from 10s. to 15s. a week as a flat rate, there would still be a million old-age pensioners whose needs would be unsatisfied; and, if the old-age pension were raised from 10s. to 20S., there would be still a quarter of a million pensioners whose needs would be unsatisfied; so that what it would cost to 287 " abolish the present system, under which a supplementary pension is given only where it is needed, I do not know, but obviously the cost would be enormous.
Again, take education. We are told—and I do not dissent from it for a moment—that the school age is going to be raised, and that an immense sum is going to be spent on education. That is no doubt perfectly proper, and is one of those things to which we must look forward and for which we must be prepared to meet the bill; but it is going to cost a good deal of money. Then there is expenditure which comes under the Ministry of Health, and, if I had anything to do with it, which, of course, I shall not have, I would put this almost first on the priority list. I refer to the demand that the dependants of a man who is ill and who is receiving health benefit should also receive an allowance, as well as the man who is sick. That is a demand which in my view is absolutely irresistible.
I venture to point out these things only in order to suggest that whatever money is available should be spent in the best way, and in the way most likely to conduce to the benefit of the people at large. I myself support Lord Southwood's Motion. I think that the case for family allowances is irresistible, as long as they are limited to families, say, over five in number—a man, his wife, and three children, or at any rate two children. But I do not agree, for the reasons which I have given, that a family allowance should be paid for the first child. On the question of whether there should be an income limit, I express no opinion. The private firms whose schemes I put before your Lordships had in each case an in-come limit. There are very powerful arguments both for and against, but on that matter, as I have said, I express no opinion. On the general terms of this Motion, subject to what I have said I support the Motion, and I am very glad that Lord Southwod has brought it forward.
LORD BALFOUR OF BURLEIGH
My Lords, as one who has supported the principle of family allowances for many years, I do not feel able to remain silent to-day, in spite of the fact that, in the four admirable speeches to which your Lordship; have already listened, I think that the case has been very conclusively 288 established. If I may I would like to offer my very respectful congratulations to the most reverend Primate, who has to-day delighted your Lordships with his maiden speech. A great many of the arguments that I had intended to put before your Lordships have already been used, and in the first instance, therefore, I would like to approach this matter rather from a personal point of view. I have the good fortune to be the father of a family which by modern standards I think would be classed as a very large one. I have fortunately always been able to earn enough money to give them enough to eat. That has been a source of great gratification to me, but it irks me to think that there are very large numbers of children in the country whose parents are not so fortunate. I am not going to give your Lordships the statistics because I think they are a matter of dispute, but the fact is not denied that in a very large section of the population the children have not had enough food to provide them with the full development of which they might otherwise have been capable. I believe it is a fact that 25 per cent. of the children in this country are in families of more than three, and it is a very unpleasant thought to me that, according to the quotation from Sir William Beveridge, the greatest single cause of poverty in this country is young children. That seems to me to be a very tragic circumstance, and one which is very irksome to those of us who have children of our own.
Moreover, every Income Tax payer has benefited, as has been stated, by a form of child endowment. With very great respect to the noble Viscount opposite and his Turkish brigand, I quite fail to see the distinction in the way that it works out. I know that I get in respect of each of my children this endowment or allowance of, I think he said, 9s. a week—in common with those who are on the high level of taxation—and that certainly relieves me to that extent, and, as far as I can see, is precisely the same as a cash allowance of the money. I do not follow the comparison between the Chancellors of the Exchequer and Turkish brigands. From what the noble Viscount told us of his Turkish brigand I should have thought that his methods and his clemency compared very favourably with those of the Chancellor of the Exchequer—certainly the present one and, from what I recollect 289 of the operations of the noble and learned Viscount on the Woolsack, almost as favourably as his.
All that is very well, and on the humanitarian grounds the case is established a hundred per cent. Then we have to come to the point, Can we afford it? One of the instances I was going to give to your Lordships was that of certain industrial firms who have already got schemes in operation, but the words were taken out of my mouth by my noble friend Lord Rushcliffe. In the case of Tootall, Broad-hurst, which he mentioned, I had the privilege of talking to the head of that firm the day before yesterday, and he confirmed to me the very admirable results this system has given to them. From their point of view—that of the hard-headed business man—it has been an extraordinarily sound investment. That is rather an interesting point. On the general point of whether the State can afford it, £132,000,000 a year sounds a lot of money. The noble Lord who moved the Motion was careful to say that that was the gross cost, and I think I am right in saying that if the compensatory reduction to Income Tax payers is allowed for presumably it would be less. There is another point about that Income Tax allowance. It is another irksome point to me that those whose wage is not big enough to pay Income Tax consequently do not get that children's allowance; they only get it if they are so far down the scale that they have to seek public assistance.
Well, can we afford it? The noble Viscount opposite dealt with the point with an eloquence and a wealth of detail which I could never hope to rival, and I shall not attempt to elaborate it beyond repeating the point which my noble friend Lord Rushcliffe has made, that the problem for us in future is not going to be the production of wealth, but its distribution. That is a lesson which most of us have learnt, I think, since the last war.' We have seen this chronic curse of unemployment when, if only the purchasing power had been there, the unemployment could have been exorcized. Starting from that basis—namely, that we have ample wealth at our disposal through modern means of production and that our problem is one of distribution—I am attracted by this proposal as a form of distributing purchasing power.
There is one fundamental condition, of course, which has to be observed, and 290 that is that the population are going to be willing to continue to work. There is no production of wealth without labour, and I am not talking of the so-called "working-class" population alone. I think that is a very much misused phrase. I venture to say that your Lordships as a body are just as much workers as any other section of the community, but we are not often called "the workers," we are generally called something quite different. Well, work is, I suppose, one of the greatest blessings of life, but I freely admit that it is one of those good things of which one can quite easily have too much. That is why one is glad that in course of time, one hopes, hours of labour will continue to be shortened, and that this wealth will be produced by labour spread over the whole population instead of only a section, with a large section unemployed. Now this proposal for family allowances attracts me as a method of distributing wealth because we get something in return. That is the point made by the most reverend Primate, who said that the working-class mother is the real heroine of the situation to-day. Well, so she is, and nobody in his senses can say that the mother of four or five children who cannot afford to keep a servant does not work hard enough to justify the payment of a family allowance.
I do not propose to advocate any particular system. I leave that to the economists who advise the Chancellor of the Exchequer, but I would venture to take up one thing which my noble friend Lord Rushcliffe said in his word of warning about post-war finance. Lord Rushcliffe said that he hoped that expectations would not be roused and prospects held out which could not be fulfilled, or might not be fulfilled, thus leading to disappointment. That is a very proper warning, and one with which I absolutely agree. But on the other hand I think it is just as important that we should not be so frightened by the prospect of poverty that we should make economies which would accentuate the disease which ' they are intended to cure. Most of your Lordships probably have clear recollections of the terrible things which were done in the name of economy when the Geddes "axe" fell after the last war. I shall give your Lordships a tiny example which branded itself on my mind. I saw hundreds of thousands of little Scots fir trees piled up and burned because we 291 could not afford to plant them out in the forests of the future. Can you imagine the folly of that; yet it is only one example of perhaps hundreds of things done at that time, with the result that the men who would have planted them were thrown out of employment and had to go on the "dole."
My noble friend Lord Rushcliffe called attention to the amount of money which would have to be spent on rebuilding. I venture to say that is a groundless fear. I share his apprehensions in some respects, but not in that, because I do not think we need worry about the cost of rebuilding. The limit in rebuilding is only the materials and labour available. To the extent of these materials and labour, building can go on merrily without any trouble as to finance; but that subject is too wide to pursue in detail today. I hope possibly we may have an opportunity at some time or other of following this up, because it is a matter of very great importance, but probably your Lordships have had enough of that side of it to-day.
May I just say one word in conclusion? Nobody welcomes the extension of Social Services of this kind more than I do. My remarks are not intended to have a definite application to the people who are going to receive this money if it is granted, but have application to the community in general. I feel we are all talking a great deal too much about rights, and a great deal too little about duties. That applies to every class in the community. We all look upon the Government as a sort of fairy godmother who will come along and help us when we want help, give us money when we are poor, and help us out of our difficulties of every kind. If some great man—and nobody better than the Prime Minister—would give the whole nation a lecture on duties instead of rights, it would have a very wholesome result. But that is a little bit off the subject. I should like to congratulate the noble Lord opposite on having introduced this Motion, and I look forward with great interest to what the noble Viscount on the Woolsack will say in reply.
§ LORD LATHAM
My Lords, in rising to support the Motion before your Lordships' House, I should like to refer to one or two matters which have been raised in the course of its consideration. May I 292 first of all, however, compliment my noble friend Lord Southwood upon the very cogent and impressive speech he made in submitting this important Motion, and congratulate him on being fortunate enough to have a growing body of informed opinion in support of the principle—a circumstance which is somewhat rare with projects of this kind. As the noble Viscount, Lord Samuel, said, for a long time in this country, and indeed in other countries, efforts have been put forward, with the general concurrence of the people, to iron out economic injustices and to squeeze out social burdens. In this country it has been mostly done in two ways—one by direct payment to eligible recipients, as in the case of unemployment insurance, national health insurance, non-contributory and contributory pensions, or by the institution or extension of Social Services in which no direct payment is made, but services and facilities are provided.
In dealing with the—admittedly for very many thousands of parents—unrelieved burden of poverty which results from having a young family; in dealing with that clear economic and social injustice, the question arises how best it should be done, whether by the method of direct payment, as is proposed in the scheme for family allowances, or by extending the existing, or introducing new, Social Services. There have been many persons very much concerned about social well-being who have had to decide for themselves which is the better method of meeting this particular problem—whether it should be done by way of individual family endowment, or whether it could not better be done by an extension of the Social Services. It is now generally admitted that this particular problem can only be satisfactorily dealt with by the method of direct payment to the parents, and that it would be difficult adequately to meet it by any extension of the Social Services or by any introduction of new services. The noble Viscount, Lord Samuel, was less than fair, if I may say so, to the trade union movement, and less than correct historically, when he said that but for the opposition of the trade union movement this project might have come to fruition ten years ago. May I remind your Lordships and the noble Viscount that ten years ago we were still living in a period of real or artificial crisis?
§ LORD LATHAM
It is a fact that ten years ago we were living under conditions of real or artificial crisis. The noble Viscount was a member of the Government which imposed some of the most rigorous cuts upon the Social Services. They reduced unemployment benefit, introduced the iniquitous transitional benefit proposals, cut expenditure upon education, stopped substantially the clearance of the slums, and in many other ways implemented the proposals of the majority of the May Committee with a vigour and adequacy which may have been satisfying at the time, but which left a very serious mark upon the Social Services of this country that remains to this day. The May Committee, of which I can speak with some freedom, as I was a member of it, was conceived in fear and reported in panic. The Majority Report, which I did not sign but opposed, was one of the most reactionary documents which ever received the dignity of being published as a Blue-book. It is not fair to say that the opposition of the trade union movement has delayed this project.
Moreover, may I suggest that this opposition of the trade union movement has not been factious, and has not been without some foundation? Their fear was that the direct payment of family allowances would embarrass negotiations for the settlement of wages, and would weaken the power to exact a proper wage standard. Abundant authority for that can be found in the history of wage negotiation. I remember, as one who was at one time employed on the railway, that claims for increased payments to porters were met with the argument that porters received tips. We know that waiters' wages are determined by reference to the fortuitous circumstance that they may or may not receive tips. We know—history tells us—that miners' wages have not been uninfluenced by the fact that they get a certain quantum of coal. And who can deny that in the past the fact that an agricultural labourer was entitled to a cottage with or without a garden had its effect upon the standard of wages settled for the agricultural labourer? Therefore I think that the trade union movement has not been without justification in carefully 294 considering what the effect of this proposal would be.
I am sure that all those who support it would regret very keenly if the result of paying family allowances had the consequence of reducing the standard of wages. That would be a consequence which none of us could do other than deplore. My own view—and I shall be happy to see that the trade union movement takes a similar view—is that the social conscience is now such, and the power of the trade unions and the machinery for negotiation of wages and conditions are now such, that there is little danger of a system of family allowances operating to reduce or depress the standard of wages. In those circumstances, it is clear that the case for the direct payment of family allowances is now made out.
The mover of the Resolution suggested that the allowances should be paid to all children. I entirely agree with him. I cannot follow my noble friend Lord Rush-cliffe when he suggests that the first or indeed the second child should be excluded. I think it is not now generally' the case that wage standards are settled by reference to the particular person who performs a task; that it may be a single woman or a married woman, or it may be a man with a family or without a family is not now a material consideration in establishing the standard of wages. Wages are being increasingly established by reference to the skill of the worker and the nature of the job which needs to be done, irrespective of the person who may, do the job. I think that any scheme which left out of account any child up to the age of fifteen and any child beyond that age still, receiving full-time education, would fail very substantially of its purpose. I think also that the scheme should be non-contributory. This is not in my view a burden which could be fairly cast upon industry or cast upon those eligible to receive family allowances. I am not so sure whether it is justifiable to cast upon industry the very serious contributions which have to be made in respect of unemployment insurance, national health insurance, and contributory pensions, bearing in mind that in many cases, especially in difficult times, industrial undertakings employing several thousands of men have to pay weekly several thousands of contributions and may in the end make much less profit than 295 a stockbroker or professional man, even including an accountant, who may employ not more than twenty men and, therefore, only pay twenty contributions to these insurance funds. I submit to your Lordships that this duty of dealing with children is a social duty which ought to be borne entirely by the State.
There should, in my submission, be no means test. There exists already sufficient discrimination educationally between children, and whatever ground there may or may not be for a means test as regards adults, I suggest that there can be no grounds, moral or otherwise, for imposing a means test in respect of the receipt of family allowances. I contend that allowances should be made to all children irrespective of means. That is the case at present with regard to Income Tax reliefs, which are not determined by reference to a means test. In point of fact, the larger your income the larger is the relief, which is the reverse, normally, of the practical operation of a means test. Moreover, Service allowances are not determined by reference to a means test. A private, if he is still in receipt of a thousand pounds a year, is nevertheless entitled to receive the Army allowance for his child without any means test. And if that be the case I suggest that there should be no means test, no differentiation between the children of one family and the children of another, but that the family allowance should be granted to all children up to the age of fifteen.
We then come to the point raised by my noble friend Lord Rushcliffe with regard to how the money is to be provided. In my submission the problem is not, at least for a number of years after the war, how the money is to be provided, but how materials and labour, especially labour power, is to be provided for meeting the gigantic tasks which will face not only this country but the world at large. But if there is any danger a few years after the cessation of hostilities of the problem of unemployment becoming acute, I can conceive no better way of seeking to relieve that problem than by such a project as family allowances, because by them you increase,' in perhaps the most valuable way, the purchasing power of the people. The purchasing power of the working people is the best purchasing power, economically, that there is in the country. As has often been 296 said, the working man gets his wages on a Friday and by Tuesday it is back in the bank again through the butcher, the baker and the candlestick maker. By such purchasing power money really circulates, and if we need to provide employment, or to ward off the danger of unemployment, the purchasing power which would result from the institution of a scheme of family allowances would, in my submission, be one of the best schemes that could be devised.
I hope that the Government will accept the Motion and introduce a scheme during the war. I can conceive of nothing that will be regarded by the people of this country, in the Forces, in the munition factories, in the Civil Defence Services, as a more solid earnest of the intentions of the Government after the war, or as a more encouraging indication of what this war is being fought for, than the introduction of a scheme of family allowances which would relieve so many families of constant economic drudgery, this almost permanent state of poverty until parents have reached an age when they are no longer able to enjoy the arts and graces of life. If there is anything in the sanctity of family life—I think your Lordships will all agree there is much—that sanctity cannot exist unless there be economic sufficiency and economic security. This proposal for family allowances is a method by which the State can provide for the children of to-day and the children of to-morrow. We are fighting this war both for to-day and to-morrow. The children represent both to-day and to-morrow.
§ THE LORD CHANCELLOR (VISCOUNT SIMON)
My Lords, not for the first time this most important subject has provided in your Lordships' House an instructive and a stimulating debate. I join very fully, if I may, with those who have spoken in offering to the noble Lord, Lord Southwood, my sincere congratulations both on the speech which he made and on the useful discussion which it has provoked. I well remember, and probably others present in your Lordships' House will remember, the debate last year—I think it was in March—initiated by the present Archbishop of York, when very interesting speeches were made by the late Lord Stamp and by my noble friend Viscount Samuel. I have read the reports of the earlier debates and in particular an earlier speech made by my 297 neble friend Viscount Samuel, I think, some two or three years ago.
We ought to be sincerely grateful to the noble Lord for raising the matter to-day because I entirely agree with him that this movement has of late gained increased support. I hope the noble Lord, Lord Latham, will not suspect me of trying to utter a covert reproach—that is not in my mind—when I say that it is a fact, as Lord Southwood reminded us, that this topic has been discussed by the Labour Party for a decade. That is the fact, and it is also the fact of course that there has been a very sharp division of opinion between trade union leaders on the subject; largely for the reason explained by the noble Lord who has just spoken, in view of anxiety as to the effect of the adoption of such a proposal on wage negotiations. I may be a very poor judge of the importance of that particular influence, although I have studied the matter with such care as I can, but I find it very difficult to believe that in existing circumstances it would have any such effect.
At any rate we have now two very important facts—one which has already occurred and the other which is shortly to take place. At Whitsuntide the Labour Conference adopted by a majority—it sounds enormous when one says a majority of a million, but that is not very big at a Labour Conference—the recommendation of the National Executive Committee for a non-contributory cash scheme of children's allowances. That is a very important point, because manifestly whatever may be the early prospects of this scheme it cannot progress unless working-class opinion is on its side. The equally concrete matter about to occur is that in September next, when the Trade Union Congress holds its usual annual meeting, this topic, as I understand, will come prominently before it and the whole country will learn what is the view taken by the organized working-class movement of the proposal.
Your Lordships, of course, will readily understand that for other reasons also there cannot be expected from me here now an announcement of a Government decision. That is obvious. There are two reasons which I will mention. In the first place, the White Paper which has been published shows that very large sums of actual annual expenditure are involved. These financial considerations fall, and 298 must fall, within the special charge of the Chancellor of the Exchequer and would involve Budgetary provision which must rest with the elected Chamber. The service which your Lordships' House renders in this sort of matter is a service of stimulus and discussion, and I take the view myself—I take it more and more as I have the privilege of being a member of it—that the House is capable of performing a most valuable function in that regard. The second reason is that Sir William Beveridge, with the assistance of an Inter-Departmental Committee—as I think my noble friend Viscount Samuel mentioned—is now carrying out at the request of the Government a survey of existing national schemes of social insurance and allied services, including workmen's compensation. While the subject of family allowances is not strictly within the scope of that inquiry, it is so clearly connected with it that it seems to the Government, and I think it will seem to your Lordships, that the Government cannot wisely reach an independent decision on the question of family allowances except in the light of the Beveridge Report. It becomes important, therefore, to know how soon this Report may be expected. It is believed that the Report of Sir William Beveridge may be expected in the autumn. When the Government have received that Report they intend to give it immediate consideration and they intend to reach their conclusions as soon as possible on the whole subject. I hope and I think that the noble Lord who has raised this matter will feel that that is an important announcement which I have been in a position to make.
But while I cannot for that reason make a Government declaration to-day, I hope your Lordships will allow me for a few minutes before we close the debate to associate myself with the discussion of this subject. It is one in which I have taken a great deal of interest: What I should like to do in a few sentences is to try to place this subject of family allowances, or children's allowances, in its true setting in relation to our system of Social Services. My noble friend Viscount Samuel discussed something of the kind in his speech. I am approaching it from a slightly different angle but with many of the same ideas in my mind. Contrast our wage system with our system of assistance in connexion with Social Services. Our wage system, generally 299 speaking, is one in which the amount of wages does not vary with the responsibilities and burdens of the wage-earner at home. People doing the same work side by side industrially are regarded as entitled to the same wage whatever be their respective family circumstances. I dare say that that may be necessary. It may be necessary for collective bargaining. It may certainly be necessary because differential wages—paying more to the man with a family than to the man working at his side who is a bachelor—might result in preferential employment for unmarried and childless men. At any rate that is the system.
Contrast that with the system upon which our Social Services are based—and, I may add, with our treatment of the men in the Forces to-day—because they have been very largely built up on a different principle. The principle upon which they have been built is designed to meet this plain fact, so powerfully brought to our notice by the most reverend Primate in his speech to-day: equality of treatment and equality of assistance is, in many cases, not really secured by equal money payments without regard to family circumstances. Like the Archbishop, and like my noble friend Lord Rushcliffe, I have long ago been depressed and disturbed by the fact, brought to my knowledge, that if you took the lowest range of wage earners, it might be that a poor man with a large family who was out of work was going to get more money out of unemployment assistance than he would from week to week if he was at his job. That is a system which cannot possibly endure without the most fearful injury all round. "To each according to his need" is a well known formula which recognizes that needs vary, and it seems to me that in nothing do they vary so obviously, among people of limited income, as in the circumstances, in the variations, due to the numbers of those in the family who require maintenance.
Like my noble friend Viscount Samuel, reflecting upon this, I was rather inclined to date this differential treatment under social reform from the early days of this century, from the period which he and I can look back on when we were already in Parliament, when first by old age pensions, then by national insurance against illness and unemployment and so forth, 300 the roots of this enormous spreading tree were planted. It is, however, fair to say, as he says, that whatever may be the demerits of the old Poor Law—and heaven knows it had demerits—it did proceed on the principle that it was necessary to give people more help if they had more children.
One of the most recent illustrations of this principle which we follow in reference to social relief I venture to dwell on for a moment. It was referred to, I think, in a sentence, by my noble friend Lord Rushcliffe. It is one of the most recent illustrations of it in civilian life, because it came into force after the war began. In March, 1940, was passed an Act of Parliament which gave supplementary pensions to be added to the basic pensions for old age or for widows. I was Chancellor of the Exchequer at the time, and I had the duty and the satisfaction of proposing that to Parliament and carrying it into law. I did so in the face of a great deal of criticism based on the argument that a much better plan would be merely to raise the pension level by an addition to the flat rate. But I was quite convinced, and I think that experience most clearly shows, that that was an error, because if you do add to a pension of 10s. a week another 5s. or even another 10s. you are not meeting the needs of a great many very poor pensioners, while, on the other hand, you are, in some cases, adding what it is not necessary to add to the pension of a person who has got a contributory pension—who has paid for it and who is entitled to it, but is not asking for additional help from the State.
I took the opportunity of inquiring of the right Department to-day, and the results of my inquiries are interesting as illustrations of this principle that when you are giving on social grounds, from public funds, relief, the method which has great advantages is a method which varies the amount of relief with the need. If it can be done—I would make this a condition—without imposing rigorous tests which are rightly resented, then there is great merit in such a method. This is what is happening under the Supplementary Pensions Act of 1940. The scale rate for supplementary pensions is increased if the child is under five years by 3s. 9d. a week; if the child is between the ages of five and eight years by 4s. 3d.; between eight and eleven years by 4s. 9d.; between eleven and fourteen 301 years by 5s. 3d.; and between fourteen and sixteen years by 6s. 9d. That, of course, in each case is for each child, and there may be a further increase if special circumstances justify it. This is the result, and it is a very interesting result to me.
If you take the total amount now being given in supplementary pensions and imagine it as expressed as an average, the average increase is about 9s. 6d. a week all round. But, in fact, the assistance goes to those who need it in proportion as they need it, and the consequence is that this 9s. 6d. covers a range of additional payments from as little as 1s. a week to as much as 30s. a week. There are people to-day who are drawing, in addition to their pension, another 30s. a week, under this system, who could never hope to get it unless the State in administering certain forms of social help were to recognize that the children in the home form a very important factor in determining what it is right in the circumstances to receive.
The noble Viscount, Lord Samuel, made a reference to averages. However useful averages may be in their proper place, they have certainly very little to do with the matter here. As I listened to him, I was reminded of what I was once told by that very distinguished doctor and physiologist, Dr. Norman Moore. He told me that he had been reading a treatise by a foreign man of science on a very rare disease which hardly ever attacked the human species, and the pamphlet stated that "on average" it attacked human life in middle age, say at about the age of forty-five. But Dr. Norman Moore told me that, when he examined the very limited number of cases which had been clinically recorded, he found that there were only two; one was the case of a baby six months old, which had lost its life from this disease, and the other was the case of a man who was ninety on his last birthday, and who had also been carried away by the same disease. Yet the author of that pamphlet reached the mathematically correct conclusion that, on the average:, the dangerous age was forty-five!
What I have tried to point out—I know that it is elementary, but sometimes it is worth while to dwell on elementary things for a moment or two—as to the nature of the assistance which we try to 302 give by means of the Social Services, in particular applies during the last generation to the case of special provision for children. I have taken out a short list of examples to show that that is so, and to show that it is not a case of giving the assistance broadcast, without considering the needs of the family, but of applying the help in proportion as, and in the case where, the help is needed. These examples will be well known to your Lordships, but I think that it is worth while to collect them. The expectant and nursing mother is watched over by the Maternity and Child Welfare Services, provided partly by the local authority, but with a subvention by the Exchequer which used to be 50 per cent. as a specific grant, but which is now merged in the general block grant. Free milk, or very cheap milk, is provided for nursing and expectant mothers and for children under five, and the cost is over £12,000,000 a year. The child is then taken over by the education service. The cost of that service in 1942, excluding assistance to universities and anything else of that kind, and dealing only with elementary and secondary schools, will, so far as the Exchequer is concerned, be about £67,000,000. If there is added to that the rate-borne expenditure, the precise figures for which are not yet available, the two together will total something like £120,000,000 annually. Free education for all children has not been extended beyond the age of fourteen, but, of course, free places are provided in secondary schools for promising children, with maintenance allowances for those who need them, and with provision for such a child to proceed to the university with a local educational authority scholarship or a State scholarship.
But, of course, the service provided by the education authorities is not limited to instruction. It includes periodical medical inspection and provision for medical needs. If the parent cannot afford to provide medical treatment, then the local education authority must do so, and get whatever contribution is right from the parent. There are special schools for handicapped children. There is the provision of school meals and school milk. I have read statements recently which do not put the facts in that regard as high as they should be put. A great increase has been going on under that head. The 303 immediate goal for school meals is, I believe, a provision for something like a million meals a day. It is not that yet, but the numbers are rising very fast, and are now 720,000, whereas eight months ago they were 300,000. It is true that the parent should pay the cost of the raw food, but in necessitous cases nothing at all is paid. Milk in schools is now being provided for three-and-a-half million children, and it is provided at the special price of ½d. for one-third of a pint, and in necessitous cases free.
I think that we must add to that the general food policy of the Government, established as soon as the war began, by which we are keeping down the prices of the staple foods to below cost. That, of course, is of special benefit to homes which contain a large number of children. What is the cost of that to-day? I remember that when I was Chancellor of the Exchequer I thought it would be £100,000,000; but it is now, in the current financial year, expected to be £150,000,000, and that is excluding the loss due to shipping losses. The services which are now going on in respect of evacuated children must also not be omitted. There are hundreds of thousands of evacuated children who are being maintained by the Government in reception areas, and who have been maintained there since the beginning of the war; and, if I may use an average for a moment, the average gross weekly cost to the State is about 11s. per child, of which on an average about 2s. is recovered from the parents.
It is not necessary to take other examples, but it is manifest that the cost of all these things is very considerable. I am not so much concerned in this connexion to emphasize the cost, however, as to point out that the principle which underlies all this is the principle of adjusting the extent of the assistance to the needs of the particular family. I believe that to be the foundation of a very large part of our present Social Services, certainly in the case of children, and one which applies from beginning to end. I say nothing about the benefit of the Purchase Tax not being charged against children's clothes and footwear, and the relief from Purchase Tax of utility clothing. My point is that the whole effort and scheme of the modern State in its social relations is really to endeavour to 304 consider the needs of the family, and of the children in the family, rather than to proceed by a cast-iron rule. Certainly it would be quite wrong to treat the idea that the State is required to do something special for children as something which is new; it is a principle which has already been applied in many ways, and the real question, as it seems to me, which is raised by the noble Lord and by others is this: what is the proper way of developing, with necessary regard to financial powers, a system which is already in existence?
I make these observations not in the least to be obstructive but for the purpose of arguing that what is being sought here is not some new and exceptional departure, but is a development of the system which already exists. The question is not whether anything can be done for the welfare of children, the question is whether further provision by the State for the welfare of children, within the limits of our financial powers, should take the form of, say, cash allowances to parents, or payment, some will say, to the mother, or whether it should be by developing existing services, by further provision in kind, or by some combined scheme. I think this matter has now reached a point where quite a useful service could- be rendered if those who have put so much energy into the general crusade, would now consider with some care what really is the best form in which to press for this new class of relief.
I was very much interested to hear the noble Viscount, Lord Samuel, in his speech showing that he had thought out the issue at various points. For example, would an allowance in cash given to parents—all of it, all the 5s.—go for the benefit of the children? I thought in the speech of the noble Lord who opened the discussion there was, if I may say so, a slight indication—perhaps it occurred in that most moving letter which he read to us—that it was not quite clear whether this extra provision was to be earmarked definitely for the advantage of the children, as children, or whether it was going to operate to increase the family income—no doubt in a family hard pressed. Probably most of us feel that a plan such as this, if it is going to be adopted and carried out, should be quite definitely one which secures that it is the child who gets the benefit. No doubt that is the reason why some people have advocated that the money should be given to the mother. 305 Then again, what are the pros and cons in relation to making the provision in kind? The most urgent needs are perhaps the things that can be well provided collectively. Even if one confines oneself to food, is collective action the best way for securing the provision of food, the best cooking of it, or a balanced diet such as modern science insists upon especially for growing children? It is obvious that those are considerations which will need to be closely examined.
There is also the school of thought, thoroughly sympathetic to the general idea, which none the less thinks that increased and improved housing, increased and improved health services, and all those services which go with education may, for a given sum, do as much good as, even more good than, the payment of a children's allowance per week. And there is also a question which has to be considered if increased provision is made specifically for children, as being that which is the more urgently needed: should it be done by means of the enlargement of those services for health and feeding of children which already form a part of the Education Department's services, both here and in Scotland; or should it fall under another class of relief, say, under the Ministry of Health probably? I think myself that so much devoted attention has been given to the general topic that it will be helpful to have some of these matters considered, and a definite view expressed. I do not for a moment suggest on that account that the right method is a Royal Commission, for that, I think, would not accelerate a decision, but I do think that before the matter is decided it has to be realized that these are far from being mere matters of detail.
I hope I have shown—it certainly is a fact—that I am really deeply interested in this subject, and I have invited attention to some of the questions involved. If I might, I should like in a friendly fashion to end with a mild criticism on two points, not at all designed to overthrow the good arguments, but merely because my training and experience, such as they are, have always led me greatly to admire good and sound arguments, and greatly to regret if anyone seeks to supplement the force of them by adding a bad one. Even though I may not get the approval of the noble Lord, Lord Balfour of Burleigh, I do think it is really fallacious in this connexion 306 to talk about children's allowances under Income Tax as discriminating against the poorest, and I will very briefly state why. Income Tax in form is a charge of a standard rate of tax for the year, at the present moment 10s. But the whole of the scheme of Income Tax allowances, whether it is for earned income, or for marriage, or for anything else, is simply a machinery by which you secure that, in place of there being a level 10s. put upon everybody's pound the real effective Income Tax is represented by a curve, adjusted to the ability of Income Tax payers to pay. That is the object of it. You begin by saying that there shall be no tax at all until the income reaches a certain figure; you go on by saying that if the tax is being charged on an income that is earned you will treat the income as though it were a smaller income than if it was unearned: you subtract a tenth. If the man is married you subtract something from his assessment because, in order to equalize the burden, it is fair that, in view of his responsibilities, he should not pay so much. And exactly the same thing is true about what are called children's allowances. The object is to secure that the man who has got two children to maintain as well as the rest of his household should pay tax at the standard rate upon a rather smaller figure in order to make the tax just as between him and another man with the same income who has not got any children at all.
Now that has really got nothing in the world to do with the grant from the Exchequer of assistance for children. You might just as well argue—Lord Balfour of Burleigh would have to argue—that because the Income Tax law makes an allowance for earned income, therefore everybody who has not got enough income to be taxed, but who earns the little that he has, is entitled to a subsidy from the State. The two things really have nothing to do with one another except that the name happens to be the same in both cases, and I wish very much that the advocates of this reform would not include among their admirable arguments the sort of argument, how can we justify this discrimination against those who are too poor to pay any Income Tax? It is not an injustice. It is saying that, as between two people who have to pay Income Tax, the man who has got an extra burden 307 ought not to be taxed as highly as the man without the burden; but they are both taxed. The person who is too poor to be taxed would be very hardly dealt with if, to prevent his being discriminated against, he was brought into taxation for the purpose of excluding a portion of the tax. It is better to get off altogether than to get off a little.
The other thing I am afraid I do not quite like—I speak with the greatest respect to my noble friend whose speech I greatly admired—is the argument that, after all, this would only cost ten or eleven days of war. If we allow ourselves, even in the House of Lords, to use that argument, where shall we get to? War is the most terrible consumer of wealth there can be. If we are going to say it is only eleven days of war for this particular relief, it must be eleven days of war every year. How many days of war will be needed to pay the extra old age pensions that are suggested, no doubt can be calculated. Surely we cannot compare the cost of permanent improvements in the scale of our Social Services with the cost of so many days of war. It at least will give a very misleading impression—and may give a very misleading impression where, above all, we are, all of us, under a duty to speak with accuracy and moderation, and not to captivate an audience by what is really misleading.
How have we managed to do what we are doing to finance the war? This colossal scale of our war expenditure requires not only the raising of taxation to unprecedented levels, but requires the unprecedented concentration of all available resources on the war effort. That concentration has been secured in a variety of ways, by drawing into the Government net capital which in peacetime would be required for development—there must be development after the war is over. It is done by postponing the maintenance and replacement of assets which, after the war, must be replaced. It is done by drawing on stocks and accumulations; it is done by sales of foreign investments. We shall not be able to go on selling our investments over again for eleven days every year. It has been done by the imposition of rationing and other expedients which represent the 308 severest strain on every class of the community.
My own approach would be this. I am not saying at all that the financial problem which this proposal involves is necessarily insurmountable; I do not know; but this is not the time to enter into a detailed discussion of what our financial position after the war may be, or what steps may be necessary to meet it. It is quite clear we shall not be able to settle what we can afford by way of permanent annual expenditure in time of peace merely by reference to what has been found necessary and practicable in the wholly abnormal circumstances of this war. I should be sorry if my noble friend thought I was pouring cold water on his enthusiasm, or making any unreasonable criticism, but I do feel it my duty to point out as clearly as I can that there is really a great danger in the argument that this or that enormous proposed annual outlay represents, after all, only so many days of war. That argument is, as I have said, extremely captivating to a certain type of mind outside, but it is our duty to use it with great care. That is all I have to say, and in conclusion I should like to congratulate my noble friend on the speech he made and on the debate he has initiated.
§ LORD SOUTHWOOD
My Lords, I do not propose to take more than two minutes. First of all, I should like to congratulate the most reverend Primate on what he called his maiden speech in his new office, and I am sure he will be of great service in our debates. I thank the noble and learned Viscount on the Woolsack for his very full reply to this Motion. I did not expect he would be able to tell us that these family allowances were going to be put into operation right away. I am not optimist enough for that, but I am not discouraged with what he has said. He has referred to the manner in which children have been considered in practically all Social Services put into force in the last few years, and that rather strengthens my argument for family allowances.
With regard to the noble Viscount's last statement about the cost of the war, I am not a financier, and I am afraid I do not understand the depths of finance. I merely mentioned that the cost of the 309 war is £12,500,000 a day, because the money is being found. My argument in this case was, and still is, that this cost of £132,000,000 a year gross will not be money lost. It will be money circulated, money spent, which will come back both in health and increased employment. I understand that this matter is to be debated very shortly in another place, and I am not without hope—especially after the remarks of the noble and learned Viscount—that we are within measurable distance of this social reform, which I believe will be of incalculable benefit to the country. I have every reason to feel hopeful after the noble Viscount's statement that the matter is being considered, and from that point of view I believe this debate has not been altogether a waste of time. I beg leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.