The Politics of Retirement in Britain, 1878-1948

The Politics of Retirement in Britain, 1878-1948 Using much original research, John Macnicol has succeeded in producing...

Author: John Macnicol

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The Politics of Retirement in Britain, 1878-1948

Using much original research, John Macnicol has succeeded in producing a detailed and thorough analysis of the evolution of the most important aspect of the British welfare state - the debate on retirement and state pensions between 1878 and 1948. His study begins with the late nineteenth-century debate over the 'worn-out' older worker, and the resultant campaign for state old age pensions. Important new insights are offered into the role of key individuals such as William Blackley, Joseph Chamberlain and Charles Booth, and interest groups such as the Charity Organisation Society, the friendly societies, the labour movement and pensioners' organisations. Subsequent sections examine the shift to contributory pensions as part of the 'New Conservatism' of the 1920s, the debate on retirement pensions in the following decade, the treatment of old age poverty by the inter-war social surveys, and the concern over the 'burden' of an ageing population in the late 1930s. The book concludes with a radical new interpretation of the 'Beveridge revolution' of the 1940s. JOHN MACNICOL is Reader in Social Policy at Royal Holloway, University of London.

The Politics of Retirement in Britain, 1878-1948 John Macnicol

CAMBRIDGE UNIVERSITY PRESS

PUBLISHED BY THE PRESS SYNDICATE OF THE UNIVERSITY OF CAMBRIDGE

The Pitt Building, Trumpington Street, Cambridge CB2 1RP, United Kingdom CAMBRIDGE UNIVERSITY PRESS

The Edinburgh Building, Cambridge, CB2 2RU, United Kingdom http://www.cup.cam.ac.uk 40 West 20th Street, New York, NY 10011-3211, USA http://www.cup.org 10 Stamford Road, Oakleigh, Melbourne 3166, Australia © John Macnicol 1998 This book is in copyright. Subject to statutory exception and to the provisions of relevant collective licensing agreements, no reproduction of any part may take place without the written permission of Cambridge University Press. First published 1998 Printed in the United Kingdom at the University Press, Cambridge Typeset in Plantin 10/12 pt [CE] A catalogue recordfor this book is available from the British Library ISBN 0 521 62273 5 hardback

Contents

List of tables Acknowledgements

Parti The campaign for old age pensions 1 Introduction

page vii viii

1 3

2 The nineteenth-century background

18

3 Blackley, Chamberlain and Booth

60

4 The opposition of the Charity Organisation Society

85

5 The attitude of the friendly societies

112

6 The labour movement and the state

137

Part II Contributory pensions

165

7 The First World War and the 1919 Ryland Adkins Committee

167

8 From 'all-in' insurance to contributory pensions

181

9 Neville Chamberlain, the 'New Conservatism' and the 1925 Act

200

Part III The debate on retirement pensions

225

10 Labour and retirement pensions in the late 1920s

227

11 PEP and retirement pensions in the 1930s: an ageing population

244

12 Poverty surveys

265

vi

Contents

Part IV The 'Beveridge revolution'

285

13 The pensions crisis of the late 1930s

287

14 The Treasury enquiry and the 1940 Act

325

15 The origins and working of the Beveridge Committee

347

16 After the Beveridge Report, 1942-1948

385

17 Conclusion

400

Index

411

Tables

2.1 Proportion of males aged 65+ defined as 'economically active' page 23 2.2 Poor Law dependency by age, England and Wales 39 2.3 Rates of pauperism by age, England and Wales 40 11.1 Numbers of elderly workers compared with unemployed, by industries (November 1933) 252 12.1 Earnings of a random sample of 3,939 adult males according to age, Liverpool 270 12.2 Earnings of all persons aged 60-64 and of old age pensioners, Liverpool 270 12.3 Percentage of persons employed in each age group, Liverpool 271 12.4 Age and poverty, showing the proportion of persons in each age group below standard 275 12.5 Inactive persons over 65 years: weekly household budget, excluding rent 280 12.6 Source of income of persons aged 60-64 and of old age pensioners, Liverpool 283 15.1 Estimated expenditure in 1945 (£ millions) 382 383 15.2 Pension values, 1914-1946

Acknowledgements

This book started life more than ten years ago, as a project funded by the Social Science Research Council (now the Economic and Social Research Council). I apologise for its length: it just grew, as more and more themes revealed themselves; and it had to be fitted in with many other research, teaching and administrative commitments. My first and overwhelming debt of gratitude is to Andrew Blaikie, Research Officer on that original project and now in the Department of Sociology at Aberdeen University, whose erudition, wisdom and scholarship have been a constant source of stimulation to me. Andrew wrote some excellent working papers for the project (from which I was able to develop ideas, especially in chapter 12), collaborated with me on a number of articles and conference presentations, shared with me a memorable three-week academic visit to the USA, and has been a true friend. Professor Margot Jefferys co-ordinated the original SSRC initiative, of which this project was one of several. I am most grateful to her for her encouragement in the early stages. The SSRC initiative was also an excellent opportunity to meet others working in the field, whose company was most stimulating. A very large number of people have helped me in a multitude of ways, among whom I should particularly like to thank Andrew Achenbaum, Vern Bengtson, Alan Gordon, Dulcie Groves, Peter Hennock, Katherine Holden, Helen Jones (who provided excellent research assistance at a very early stage), Ray Lee, Rodney Lowe, Susan Pedersen, Chris Phillipson, Sara E. Rix, Brian Sheldon, Harold Smith, Humphrey Southall and Noel Whiteside. My colleagues in the Department of Social Policy and Social Science at Royal Holloway have given me many ideas, and have studiously avoided asking 'How's the book?' any more than was absolutely necessary. I owe a very special debt of gratitude to Alan Deacon and Hilary Land, both of whom have been very kind and encouraging. I should like to thank the following academic libraries: the British viii

Acknowledgements

ix

Library of Political and Economic Science (particular thanks to Dr Angela Raspin); the University of London Senate House Library; Edinburgh University Library; the University of Birmingham Library (thanks to Dr B. S. Benedikz and Miss C. L. Penney for permission to use the Joseph and Neville Chamberlain Papers). Transcripts of Crown Copyright material in the Public Record Office appear by permission of the Controller of Her Majesty's Stationery Office. Lastly, my sincere thanks to my editor at Cambridge University Press, Richard Fisher, for his patience and professionalism, and whose gentle advice and encouragement has been much appreciated.

Parti

The campaign for old age pensions

Introduction

By the late nineteenth century, many thoughtful political commentators in Britain were viewing the prospect of mass democracy with alarm. Nineteenth-century capitalism was based upon a social organisation in which the bulk of private property and wealth ownership was concentrated in the hands of a tiny social elite, with the vast majority of the population dependent, either directly or indirectly, upon precarious waged labour. According to a political logic held by many across the political spectrum, the full enfranchisement of the working class would inevitably result in the capitalist class being quickly stripped of its wealth and power by entirely constitutional, parliamentary means. In short, capitalism and mass democracy seemed logically irreconcilable.1 Yet the political cataclysm did not happen. By stages, democratic voting rights were extended until universal adult male suffrage and partial adult female suffrage were achieved in 1918, the process being completed in 1928. To be sure, there were several nervous moments along this route - notably, in the period 1918-22 and when the first minority Labour government was formed in January 1924. But capitalism survived, and the unequal ownership of private property emerged unscathed. Even in the 'devil's decade' of the 1930s, when several European nations had become fascist dictatorships, the stability of its democratic institutions allowed Britain to weather the economic recession with its political order largely intact. By the post-1945 period in world history capitalism and mass democracy had become synonymous. The process of transition to a liberal capitalist democracy in Britain has been the object of intense scrutiny by political theorists, since it has raised every question that is central to democratic theory: the limitations on change set by the complex processes of competitive party democracy; the power of the state to accommodate and neutralise 'from below' political challenges by processes of incorporation; the agenda-setting by those key institutions that disseminate information, and thus influence 1

For an exploration of this theme, see Claus Offe, 'Competitive Party Democracy and the Keynesian Welfare State', in Offe, Contradictions of the Welfare State (1984), ch. 8.

4


cultural formation; the distinction between 'objective' and 'subjective' economic interests; and the legitimation of authority by concessionary processes, notably state welfare. Broadly speaking, liberal political theorists are relatively untroubled by the capitalism/democracy conundrum. The two most intriguing questions of political theory - why is the unequal distribution of private property tolerated? and why do citizens consent to obey authority? present no difficulty because mass political consciousness, or 'public opinion', is seen as essentially unproblematic. Since the subjective, expressed wishes of citizens are seen as 'real', the answer to both questions is, therefore, simple: because we wish things to be so. Liberal political theory offers the beguilingly attractive explanation that mass democracy has moderated free market capitalism to a degree acceptable to most citizens; any further erosion of inequalities would be unacceptable, violating too many individual and collective rights. In the liberaldemocratic analysis, state welfare has been a key factor in the reconciliation process, offering citizens a basic minimum guaranteed standard of living. Most famously expressed in T. H. Marshall's notion of a trinity of rights (civil, political and social), the welfare state has acted as a bridge between the vulnerable citizen and the excesses of free market capitalism.2 The neo-Marxist tradition of welfare analysis also views the challenge of mass democracy as potentially cataclysmic for capitalism. Where it differs sharply from the liberal analysis is in its contention that mass democracy has done little to effect a significant change in relative inequalities. Instead, it is argued, competitive party democracy has contained mass political aspirations, and largely neutralised them. The expressed wishes of citizens are highly problematic, being so subject to choice-distortion processes that they cannot be accepted merely at face value. The twentieth century may have offered tiny morsels, in the form of consumer goods and insecure property ownership, but the major social inequalities have remained very wide. State welfare has thus been a key instrument by which capitalism and mass democracy have been reconciled. The growth of state dependency Simultaneously with the growing challenge of mass democracy - and thus inextricably linked to it - there was occurring a significant shift in 2

T. H. Marshall, 'Citizenship and Social Class', in Marshall, Sociology at the Crossroads and Other Essays (1963), pp. 104-22; and 'Value Problems of Welfare-Capitalism', in Marshall, The Right to Welfare and Other Essays (1981), pp. 104-22.

Introduction

5

the process of capitalist development, such as to increase - slowly but inexorably - the dependency of citizens upon sources of income other than waged labour. As will be argued later in this study, over the past two centuries four distinct but inter-related labour market trends (themselves products of technological innovation) have had profound effects upon human behaviour, social relations and cultural formation, establishing the contextual setting in which citizens have negotiated their everyday lives: the exit of children from the industrial labour force, and the progressively longer periods of time spent by them in full-time education; the fall in the formal labour force participation rates of married women from the early nineteenth century to the 1920s and 1930s, then their steady rise after the Second World War; the gradual shake-out of older workers (predominantly male) from the labour force; and, beginning at the end of the twentieth century, the de-industrialisation of young, unskilled males. As industrial production became noticeably more technology-intensive at the end of the nineteenth century, and thus the labour market 'tightened up', so the distinction between 'work' and 'dependency' became clearer. In the nineteenth-century labour market, many individuals possessed an ambiguous status, drifting between what we now think of as notionally precise categories like 'employed', 'unemployed', 'retired', 'infirm' or 'part-time'. By the twentieth century, a clearer dividing line was becoming established between those engaged in the formal labour market and those dependent upon the waged income of a breadwinner. One aspect of this was the development of the idea of a career, terminated by a fixed age of retirement. The social and political elite of late nineteenth-century and early twentieth-century capitalist society thus found itself facing two interlinked challenges: mass democracy threatened to end for ever its economic and political dominance; and the growth of social dependency created a demand for expensive social welfare policies, funded by punitive levels of redistributive taxation, to support those who were becoming marginalised from waged labour. Nowhere were these two social forces more evident than in the campaign for old age pensions. By the early twentieth century, state pensions had emerged as the centrepiece of a powerful socialist challenge, and were to remain so thereafter, even if the determination behind that challenge gradually weakened with every passing decade. The story of how that challenge was mounted, and how it was countered and eventually defeated by the institutions of the state, is the central theme of this book. The saga of pensions thus provides a clear example of how the broader challenge of mass democracy was contained. But the

6


enormous difficulty faced by those within government whose task it was to accommodate this challenge was that long-run labour market trends were bringing about an inexorable decrease in the labour force participation rates of older males, just as demographic trends were increasing both the number and proportion of old people in the population. Less and less able to earn a living through formal work, the growing numbers of old people formed an increasing population of'dependants' at the top end of the population age structure. It was impossible not to provide state support for them. As jobs for older workers slowly disappeared, so there emerged a variety of arguments in favour of state pensions, resting on a logic which was unassailable, but whose contradictory nature summed up the central political dilemma of state welfare in a capitalist society. On the one hand were several broadly conservative arguments: pensions were needed to assist the continued shake-out of older workers, and thus improve industrial efficiency. If provided by the state (and especially if funded by contributions from working people themselves) employers could be relieved of the cost of providing them: it is significant that several leading employers were very supportive of the 1908 Old Age Pensions Act.3 Pensions also performed the important secondary functions of enhancing political legitimacy and relieving working-aged families of the expensive burden of supporting aged relatives, thus indirectly assisting the reproduction of labour. Yet, on the other hand, state pensions had the potential to become enormously expensive, as demographic and labour-market pressures created a rising tide of retirees. If funded by taxation levied principally on the rich, they could be highly redistributive. By removing older workers, the labour market would also be 'tightened up' and the bargaining power of younger workers enhanced, thus boosting the power of trade unions. Old age pensions thus quickly became the centrepiece of a rapaciously redistributive socialism that had to be resisted by the state at all costs. Steering a way between the Scylla and Charybdis of these two opposed forces was the central dilemma of the 'politics of retirement' in the period 1878-1948. However, before we move on in the next chapter to examine the late nineteenth-century origins of the campaign for old age pensions, we must consider the emergence of old age as a social issue.

3

Pat Thane, 'Non-Contributory Versus Insurance Pensions 1878-1908', in Thane (ed.), The Origins of British Social Policy (1978), pp. 101-3.

Introduction

7

The ageing of British society In all advanced industrial societies, the unfolding of the twentieth century witnessed profound changes in the status of old people. For the first time in their histories, such societies experienced substantial and ever-growing numbers of their elderly citizens reaching the seventh, eighth and even ninth decades of the life course. The ageing of industrial societies has had social, economic and political consequences of enormous importance. This demographic transformation of British society was unprecedented. In 1841 there were only 700,000 persons aged 65 or over (65+) in Britain, equivalent to just over 4 per cent of the total population; by 1901 the number had more than doubled, to 1,500,000 but, because of overall population growth, this still represented only 5 per cent of the total population; by 1981, however, Britain had 8,500,000 citizens aged 65+, equivalent to 15 per cent of the population. What caused this demographic shift? The most important factor in the ageing of the British population has been the fall in the birth-rate from the late 1870s to the early 1940s, determining the size of each successive birth cohort and squeezing in the base of the 'population pyramid'. By contrast, the post-Second World War high birth-rate 'baby boom' (lasting until the mid-1960s) has slowed the rate at which the British population has 'aged' by increasing the proportion of workingaged adults. From 1981 to 2011 the projected proportion of the 65+ population will rise little - from 15.0 per cent to 16.1 per cent - because the present and immediate-future generation of retirees are those born in the low birth-rate inter-war period. However, after 2011, and certainly after 2021, the proportion of people aged 65+ will rise significantly, as the 'baby boomers' move into retirement, so that they will reach a predicted 21.0 per cent in 2041. Conversely, by the time the generations born after the mid-1960s start to retire, the perceived problem will be diminishing.4 The second factor causing the ageing of the British population has been the decline in mortality at all ages, but especially in childhood, permitting more babies to survive to adulthood and more adults to survive to old age. Contrary to popular belief, longevity in middle age and old age has been the least important causal factor. Falling infant mortality has dramatically improved life expectancy at births but life expectancy in adulthood has not shown nearly such a spectacular 4

For useful summaries of the demographic factors, see: Christina Victor, Old Age in Modern Society (1987), ch. 6; Paul Johnson and Jane Falkingham, Ageing and Economic Welfare (1992), ch. 2.

8


improvement. In 1901, the average 65-year-old man could expect to live another 10.8 years, and a woman another 12.0; by 1991, these had only increased to another 14.0 years (man) and 17.8 years (woman). Thus projections which argue that, in the future, substantial numbers in the population of advanced industrial societies will survive to be c. 120 years of age are erroneous, since they are based upon life expectancy at birth. If, instead, the correct measure of life expectancy in adult years is used, then the 'success scenario' changes to one in which the overwhelming majority of citizens will survive until their mid-eighties, enjoying a healthy old age, and will then die suddenly after a 'compression of morbidity' occurs with the 'rectangularisation' of the survival curve. Paradoxically, these dramatic improvements in the survival rates, health status, and thus working capacity of older adults have been accompanied by the spread of retirement. In the 1890s, about twothirds of males aged 65+ were recorded as 'gainfully occupied'; the midpoint of 50 per cent was reached in the late 1920s; by the early 1950s, this proportion had fallen to one-third; and by the 1980s, it was less than 10 per cent (about half of whom were working part-time). Hence the rising population of old people became steadily fitter and healthier, and thus more able to participate in the labour market. Yet, at the same time, they were increasingly denied such participation, and were marginalised into economic inactivity. How is this paradox to be explained? Most explanations have been based to some extent upon a broad 'modernisation' model, in which the ageing of populations is seen as part of the transition to modernity in late industrial societies. Pre-industrial societies, operating from a predominantly rural economic base, will tend to have high birth-rates, high death-rates and an aged population that is cared for within the context of the small community or the extended family. With the coming of industrialisation, death-rates fall as living standards improve, until such an economy reaches maturity, at which point birth-rates also fall. (Such a point was reached by Britain in the 1880s.) The effect of this demographic transition is - after a time-lag - to increase the proportion of old people in the population because smaller cohorts of young will skew the population age structure upwards. At the same time, the industrialisation process performs several interactive functions. It places increasing emphasis on technological innovation in the production process, and thus certain groups of workers (notably, children and the aged) are displaced from the industrial labour force. In a more economically competitive era, the dictates of 'scientific' industrial management (manifested in 'Taylorist' or 'Fordist' practices) also require that such marginal labour be shed. Industrialisation creates the wealth to fund a state pension scheme. It

Introduction

9

produces an organised labour movement that demands state-subsidised retirement as an end-of-lifetime reward for service at the workplace, and as a means of supporting those older workers marginalised by the changing structure of capitalism. As part of the 'information explosion' and bureaucratic sophistication in such societies (for example, in social surveys or census data), age-based social divisions become more common and age discrimination grows.5 Like all broadly functionalist explanations, the modernisation model lapses into tautology and thus has serious deficiencies. It has little to say on how the distribution of power will affect prevailing social constructions of old age, and it does not explore the ways in which the interaction of class, race and gender produces marked inequalities in the 'old age experience'.6 Its greatest deficiency is that it fails to explore the question of agency. Explanations of the spread of retirement have thus had to push the 'modernisation' account a stage further. In doing so, historical accounts of retirement have tended to offer two kinds of explanation, either in opposition or in some kind of combination. First, there are those that prefer to stress a decrease in the supply of older workers, as a result of collective consumer choice. Growing prosperity in the twentieth century has meant that citizens have been progressively better equipped to fund their own retirement, either directly through private pensions, or indirectly, via the crisk-pooling' principle, through the collective protection of a state pension scheme. Advanced industrial economies can afford to respond sympathetically to the expressed desires of citizens for a package of work-related benefits a shorter working week, paid holidays, minimum standards at the workplace, and an employer-funded or state-funded period of leisure at the end of the life course. Hence Leslie Hannah has argued that ca central factor' in explaining the spread of retirement has been 'the increased capacity to finance retirement and the reduced dependence of the old on income from employment'. Hannah concludes that: 'Voluntary retirement is, in a sense, a luxury good whose incidence would be expected to grow in a hundred year period in which general living standards have perhaps tripled.'7 A version of this model also sees state 5

6

7

See, for example, Carole Haber, Beyond Sixty-Five: The Dilemma of Old Age in America's Past (1983), p. 127 For an interesting discussion of 'modernisation' models as applied to old age, see W. Andrew Achenbaum, Shades of Gray: Old Age, American Values and Federal Policies Since 7920(1983), pp. 6-17, 182-9. Leslie Hannah, Inventing Retirement: The Development of Occupational Pensions in Britain (1986), p. 124. For a similar view, see also: Paul Johnson, 'The Structured Dependency of the Elderly: A Critical Note', in Margot Jefferys (ed.), Growing Old in the Twentieth Century (1989), pp. 62-72.

10


pension schemes - introduced by popular pressure - as an important causal factor: such is the central theme of Carole Haber and Brian Gratton's recent study on the USA, in which the 1935 Social Security Act is seen as the key legislation triggering modern mass retirement.8 At first sight, a 'supply-side' explanation seems to possess a certain degree of plausibility, providing a perfect example of how the 'democratisation of retirement' has come about through popular pressure exercised via the ballot box. In the pages that follow, substantial evidence will be offered of grass-roots movements for a state pension scheme. The campaign that emerged in Britain at the end of the nineteenth century was initially led by middle-class reformers for conservative reasons; but it soon attracted an impressive amount of support from organised working people such that old age pensions became a radical socialist demand. The 1908 Old Age Pensions Act which followed was, despite its limitations, the most popular of the Liberal welfare reforms. Thereafter, pensioners' organisations were formed and constant pressure was exerted on governments to improve the state pension scheme, in terms of both level and coverage, to give a 'well-earned rest' to the 'worn-out worker' or the mother (less often mentioned), as a reward for citizenship. Such demands reached a crescendo in 1939, with the National Federation of Old Age Pensions Associations, the National Spinsters' Pensions Association, as well as the Labour Party and the Trades Union Congress, demanding higher pensions. Indeed, the potential danger of this popular pressure was one reason for the Treasury's long, and ultimately successful campaign to shift the funding of pensions to a contributory insurance basis. However, like all largely 'human agency' models of social change, a supply-side explanation fails in several respects. First, it does not explain the timing of events. The period between Baron Maseres's 1772 proposal for parish-organised annuity schemes for the 'industrious poor' and Canon Blackley's famous 1878 plan for 'national insurance' was positively brimming with pension suggestions from middle-class reformers. Yet it was only in the 1880s and 1890s that the debate on state pensions took off. We need to ask why. Second, it fails to explain the paradox that this late nineteenthcentury debate on the increasingly 'visible' poverty of the aged took place at a time when the old age pauperism rate was declining. Interestingly, this led late nineteenth-century conservatives (for example, within the Charity Organisation Society) to the logical conclusion that state pensions would not only be corrupting (in that they would weaken 8

Carole Haber and Brian Gratton, Old Age and the Search for Security. An American Social History (1994).

Introduction

11

individual and family responsibility), but that they were not needed. Old age poverty per se was thus not the key reason for the campaign for old age pensions. Third, it does not explain the gendered paradox that this late nineteenth-century debate on old age poverty was a highly masculinist one. Although women outnumbered men in old age (by nearly two to one in the post-1908 pensioner population), and although there has always been a substantial feminisation of poverty in old age, the 'problem' of old age poverty was usually constructed in terms of a masculinist, military metaphor of the 'worn-out worker' deserving to be 'de-mobilised' from the 'industrial army'. The focus of concern in the pensions campaign was thus on the crisis of the older male worker. Essentially, it was an industrial concern. Fourth, a 'supply-side' model collapses in the face of the volumes of evidence from the 1920s and 1930s that few chose willingly to 'retire' on a pension of 10s Od a week; in fact, it is clear that older workers desperately tried to cling on to jobs for as long as possible. All the evidence from contemporaries shows that jobs for older workers were inexorably disappearing, causing retirement to be forced upon individuals not because of their infirmity (as had been the case in the past), but because there was no work for them. In the aggregate, 'jobless' retirement gradually replaced 'infirmity' retirement, and on a far greater scale. Finally, the recent progress of 'early' retirement must be considered. Between 1951 and 1971, the economic activity rates of men aged 55-9 remained fairly constant (at 95.0 per cent and 95.3 per cent respectively); by 1994, however, the effects of diminishing labour market demand - consequent upon a transition to a new, 'post-industrial' capitalism - had lowered this to 76.1 per cent. Significantly, women aged 55-59 experienced increasing labour force participation rates in the same period - from 29.1 per cent in 1951, to 50.9 per cent in 1971 and 55.7 per cent in 19949 - because of the rising demand for 'feminised' labour. The second explanatory model is thus much more convincing, and is the one that is more favoured in the pages that follow. This argues that retirement has spread more because of a decline in the demand for older workers. As advanced industrial economies become more specialised, with a greater emphasis on technology-intensive production methods, and hence skill and adaptability, so older workers will be forced out of the labour market and marginalised into economic uselessness and a 9

Alan Walker and Tony Maltby, Ageing Europe (1997), p. 76.

12


consequent loss of social status. They will find themselves increasingly concentrated in 'light', undemanding occupations, or in relatively outmoded labour-intensive sectors (such as coal-mining or agriculture in the inter-war years) where, on retirement, they will not be replaced. New, expanding industries only take on young workers. In effect, older workers are progressively 'de-skilled' and thus 'de-industrialised'. In such a society, increasing emphasis in the labour market will be placed upon youth (mirrored by the emergence of a 'youth culture' in society at large). This is precisely what began to happen in Britain from the 1890s onwards.10 Pension systems were thus not the prime cause: retirement was not 'manufactured' by the state via social policies. In Britain, the trend to 'jobless' retirement commenced roughly two decades before the first (1908) state pension scheme, and rates of retirement seem not to have been affected by subsequent pension legislation (notably, the introduction of a retirement condition in 1946). The growth of state pension coverage was thus a response to prior labour market imperatives. Such a stark polarisation between two explanatory models is, of course, of limited heuristic value: 'supply' and 'demand' are not autonomous, and in this study the complex symbiotic relationship between the two will be explored.11 'Choice' can only take place within a given economic context. Once demand-side factors had operated for several decades, such that a critical mass of retirees was created, then a 'culture of retirement' or a 'retirement tradition' or even a 'medicalisation of retirement' became internalised by individuals and normalised in culture, manifesting itself in consumer expectations and in political campaigns. These expectations were articulated in a powerful language of democratic rights, citizenship and social justice. But abstract principles of justice were more the rationalisation of labour market imperatives than they were prime determinants of social policy. The distinction between 'infirmity' retirement and 'jobless' retirement is also of necessity crude. Analysts of the retirement experience have always shown that there is a blurring of the boundary between the two. Older workers may define themselves as 'infirm' because they are effectively jobless, or vice versa: such was the experience of the workingclass friendly societies in the 1890s; it was also noticed by social researchers in the 1950s;12 and the rise in disability and long-term 10

The definitive work, broadly applying such an analysis to the USA, is William Graebner, A History of Retirement. The Meaning and Function of an American Institution, 1885-1978(1980). 1 * For a sensitive discussion, see Frank Laczko and Chris Phillipson, Changing Work and Retirement. Social Policy and the Older Worker (1991). 12 For the 1950s, see Sarah Harper, 'The Emergence and Consolidation of the

Introduction

13

sickness benefit claims in the 1980s and 1990s was likewise partly a product of growing labour market insecurity.13 The changing status of old age In measuring the transformation of the 'old age experience' from preindustrial to late-industrial societies, historians have offered a number of models. One provocative and influential example is the 'veneration to degradation' thesis, put most cogently by the American historian David Hackett Fischer. In Growing Old in America (1977), Fischer has argued that in pre-industrial societies old people are highly valued for their rarity, authority, wisdom and - especially in societies where an oral tradition predominates - accumulated knowledge. They possess enormous value to the community or tribe as its natural leaders, and to the family as carers of children in a highly labour-intensive economy where both parents may have to work long hours. In short, they are venerated, and may even be accorded priest-like status. But industrialisation gradually robs them of this social value: the nuclear family dispenses with their services, and pushes them out of the nest; more citizens survive to old age, and thus their scarcity value is eroded; industrialisation creates a more specialised division of labour, with a greater premium on youth, skill and adaptability, and old people are seen as increasingly irrelevant to the labour process; the spread of mass education and literacy means that knowledge is encapsulated by the written word, and then within sophisticated information systems, and the oral tradition is lost. Old age thus brings obsolescence. In its cruder forms, this thesis can imply that in the past there existed some 'golden age of senescence', in which the aged were universally revered. Fischer, however, does not claim this: he recognises that in preindustrial societies there existed many contradictory customs and attitudes towards old people, and that the very old - the 'overaged', 'already dead' or inhabitants of the 'sleeping period' - were usually judged to be senile and were cruelly put to death.14 Thus it is important to remember that while the ageing of Western nations has led to much more rigid definitions of old age itself, the twentieth century did not invent inequalities of age. In pre-industrial and early modern societies, old age tended to be conceptualised by reference to certain cultural touchstones, such as wrinkled skin, grey

13 14

Retirement Tradition in Post-War Britain', in Michael Bury and John Macnicol (eds.), Aspects ofAgeing: Essays on Social Policy and Old Age (1990), pp. 12-29. Laczko and Phillipson, Changing Work, ch. 5. David Hackett Fischer, Growing Old in America (1977).

14


hair, toothlessness, grandparenthood, the menopause or the inability to perform crucial tasks. Such societies displayed complex attitudes towards their older members,15 and age-related status inequalities have worked in a variety of ways: in some tribes, such as the Samburu pastoral nomads of Northern Kenya, powerful social gerontocracies existed, with elderly men dominating tribal and family politics, excluding young bachelors from participation and even taking extra wives for themselves as they grew older; in others, the practice of ancestor worship would extend to the veneration of their older members, investing them with an almost mystical function as living repositories of wisdom and folklore (elderly women, for example, would possess a unique body of knowledge on matters of pregnancy and childbirth). Yet anthropological literature is also replete with examples of brutal sanctions being brought to bear against the old: parricide often existed as a culturally approved method of sons obtaining access to family land, and old women could find themselves suspected of witchcraft precisely because of their accumulated knowledge. In short, age divisions and age conflicts were commonplace.16 Likewise, historians of the early modern period have considerably enlarged our understanding of old age by pointing to the historical continuities in societal attitudes, especially the shifting balance between support of the aged by family, community and local state.17 Structured dependency What, then, is new about the 'old age experience' in the twentieth century? In attempting to answer this question, several radical analysts of old age posited the concept of 'structured dependency' in the 1980s as a deliberate counter to the outmoded platitudes of disengagement theory.18 Rather than viewing old age as an aggregate experience, a 'structured dependency' analysis emphasises that there will be substantial differences in the status of retired people according to factors of class, gender, race and age. As Alan Walker has argued: 15

16

17

18

See, for example, Keith Thomas, 'Age and Authority in Early Modern England', Proceedings ofthe British Academy, vol. LXII: 1976 (1977), pp. 205-48. Nancy Foner, Ages in Conflict: A Cross-Cultural Perspective on Inequality between Old and Young (1984). See, for example, Margaret Pelling and Richard Smith (eds.), Life, Death and the Elderly. Historical Perspectives (1991). See, for example: Alan Walker, 'Towards a Political Economy of Old Age', Ageing and Society, vol. 1, pt. 1, March 1981, pp. 73-94; Peter Townsend, 'The Structured Dependency of the Elderly: A Creation of Social Policy in the Twentieth Century', ibid., pp. 5-28; John Macnicol, 'Old Age and Structured Dependency', in Bury and Macnicol, Aspects ofAgeing, pp. 30-52.

Introduction

15

It is mistaken to regard elderly people as a homogenous group which might coalesce around a single politics of old age. In other words, there is not one but several politics of ageing, depending not on age as such but on socio-economic status, race, gender and religion . . . Older people carry into retirement inequalities created and legitimated at an earlier phase of the life cycle, particularly though not exclusively through the labour market.19 These components of structured inequality in society at large determine inequalities in old age, such inequalities widening with the transition to retirement. 'Dependency' is, at best, a highly contestable term, but in this context it connotes loss of direct access to the labour market, and its replacement by reliance on social security. The extent of this dependency cannot be denied. By the early 1990s, there were some ten million state retirement pensioners in Britain (men aged 65+, women aged 60+), and the cost of supporting them in pension and other social security payments totalled £34.5 billion (for 1992-3) - roughly equivalent in any one year to the entire cost of the National Health Service. Social security payments to the retired amounted to 47 per cent of total benefit expenditure in 1992-3, and social security absorbed fully one-third of public expenditure. As John Myles and others have argued, advanced industrial welfare states are essentially welfare states for old people, since they form by far the largest group of clients. 20 The scale of such state dependency by the retired is one reason why governments in both Britain and the USA in the 1980s and 1990s found it so difficult to cut public expenditure. As the Permanent Secretary at the Department of Health and Social Security (DHSS) attested in 1986, elderly people are 'the major pressure on social security expenditure', and 'the single major challenge facing the DHSS'. 21 It is evident, therefore, that the ageing of the British population has been a major reason for the establishment of an advanced, comprehensive and possibly 'irreversible' welfare state, for the growth of state dependency, and for the emergence of a substantial poverty population. However, there is a positive side to the equation. The 'greying' of the British population has also been an enormous success story. Increasing numbers of citizens have survived to old age, enjoying better health status and higher living standards than their parents. Historically unprecedented proportions of the population have been sustained 19

20

21

Alan Walker, 'The Politics of Ageing in Britain', in Chris Phillipson, Miriam Bernard and Patricia Strang (eds.), Dependency and Interdependency in Old Age: Theoretical Perspectives and Policy Alternatives (1986), p. 37. John Myles, Old Age in the Welfare State: The Political Economy of Public Pensions (1984), p. 2. Sir Kenneth Stowe, quoted in Michael McCarthy, The New Politics ofWelfare (1989), p. 37.

16


independent of the labour market. The majority of old people lead lives not limited by disability or serious health problems. For many, old age brings happiness, time for relaxation and reflection, a chance to reestablish quasi-parental relationships (with grandchildren) and freedom from drudgery. By the 1990s most retired people were healthy, were leading independent lives and were contributing greatly to the informal economy by performing a multitude of unpaid but vitally important tasks for their own children, for neighbours or for the community. Old people also represent the living embodiment of our past and thus bestow identity, continuity and meaning to younger generations. Without them, society would be infinitely the poorer. Such a positive view provides a valuable corrective to the portrayal of old age as an existential wasteland facing us at the end of our lives.22 Conclusion This study examines the period 1878 to 1948, beginning with the publication of Canon Blackley's state pension proposal and ending with the establishment of the Beveridge social security system. It was a crucial stage in the evolution of old age, witnessing a sharp rise in the number and proportion of old people: between 1901 and 1951, the number of persons aged sixty-five or over tripled, from 1,734,000 to 5,332,000, and as a proportion of the population, they grew from 4.7 per cent to 10.9 per cent. By the late 1940s, 'old age' had indisputably entered the social agenda; geriatric medicine was taking off as a specialism; the first social surveys of old people were being conducted, where previous ones had tended to regard them as incidental; demographic alarmism was being repeatedly expressed about the 'burden' of an ageing population; significant organisations and pressure groups had been established dealing with the needs of old people; and, most of all, a retirement condition had been attached to receipt of the state pension. Originally, the intention was to examine only the 1918-48 period, given that the previous forty years have had some coverage by a number of historians;23 but in the course of investigating this earlier period it became evident that several avenues remained surprisingly unresearched, that new ideas suggested themselves, and that some historical 22

23

See, for example, Pat Thane, Economic Burden or Benefit? A Positive View of Old Age (1987). See, for example: Jill Quadagno, Aging in Early Industrial Society. Work, Family, and Social Policy in Nineteenth-Century England (1982); Patricia Mary Williams (Pat Thane), 'The Development of Old Age Pensions Policy in Great Britain, 1878-1925' (University of London (LSE) Ph.D. thesis, 1970).

Introduction

17

received wisdoms required modification. Hence the scope of the book became greatly enlarged, and the analysis much more detailed. In the pages that follow, this study attempts to combine a 'political economy' explanation with a 'human agency' one: long-run economic trends have marginalised old people but, nevertheless, old people have always possessed enormous potential political power. The fact that this power has never been fully realised is part of the story told here. This study thus tries to describe both the economic background and the processes of campaigning, negotiation and compromise by leading actors in the policy-making drama that made up a lively 'politics of retirement'. As will be shown, those old people who formed pressure groups struggled long and hard to fashion positive identities for themselves and their fellow members. Such ethnographic evidence as exists (for example, from social surveys of the 1930s) reveals that, on an individual level, old people showed courage and defiance in the face of the steady erosion of job opportunities. Rather than marginalising old age, this study will demonstrate its inter-connections with other social issues. In the process, many fascinating paradoxes will be unearthed: for example, the organisation that was the most powerful campaigning group for the economic rights of old people (the Trades Union Congress) was also the strongest advocate of a retirement condition which in many ways was a flagrant and draconian interference with the rights of older workers. But, ultimately, actors in the policy-making drama were working within the economic constraints imposed upon them by complex shifts in the evolution of advanced industrial capitalism. The 'politics of retirement' was a richly creative human response to these economic constraints.

The nineteenth-century background

In the last quarter of the nineteenth century, the British economy underwent profound structural changes. Broadly speaking, the process of industrialisation moved to a 'late', 'advanced' or 'mature' stage, marked by an increasingly technological and less labour-intensive mode of production. The social changes brought about by this economic transition were extremely complex, nuanced and reactive upon each other, and can only be quickly summarised here. Unprecedented improvements in transportation systems (such as the steamship and the motor vehicle) began the process now termed 'globalisation', throwing British firms open to the chill winds of international economic competition; associated with this was a new concern with the health and productivity of the individual worker as a unit of labour, in turn giving rise to a social debate on poverty and national fitness. In an increasingly competitive society, men and women had greater incentives to control their own fertility, bringing about a steady fall in the birth-rate; demographers thus view the late nineteenth century as heralding a new phase of the demographic transition. A 'women's movement' emerged, first to campaign for the vote but then to address wider issues of legal, social and economic inequality between the sexes. In 1884 there was passed a third Reform Act which, to prescient observers, made mass democracy a future inevitability: as a result, there developed a 'new politics' in which the vote of the working class was courted through social reform proposals. Socialism emerged as a viable political ideology; though the British working class remained for a long time deferential and conservative, the appearance of a Marxism-influenced socialism in the 1880s offered a much harder-edged economic critique of capitalism and permanently changed the political culture. For the first time, trade unions of unskilled workers were successfully established and sustained (where in the past they had petered out), ushering in a new and more intense kind of industrial warfare. In 1870 there was passed the first of a series of Education Acts which were to lengthen the process of schooling in response to the need for a more literate and numerate workforce. 18


19

Gradually, the small family firm gave way to the large unit of production (notably, the joint-stock company) which used more scientific management techniques, rendering the relationship between employer and employee more impersonal; precise divisions of labour and job grading were introduced, including the rule of a fixed retirement age. Managerial and industrial efficiency motives began to be more and more influential: retirement on an occupational pension was one way of removing older staff who might block channels of promotion and inhibit the ambitions of their younger colleagues; pensions were also a way of instilling loyalty and discouraging employee turnover. During the second half of the nineteenth century in Britain occupational groups began to receive private pensions as part of the contract of employment: for example, civil servants from 1859, and elementary schoolteachers from 1892. By the time of the First World War, most advanced industrial societies had state and occupational schemes similar to Britain's, the consensus of opinion being that eligibility ages should be somewhere between 60 and 70. * From the late nineteenth century onwards, retirement in old age slowly spread until, one hundred years later, it had become a social norm. The spread of retirement in its modern form was thus a product of the complex interaction of social, political, economic and demographic changes. Searching for one principal cause may well be fruitless, since we are dealing with what the Report of the 1944-9 Royal Commission on Population, in a different context, called 'a complex web, rather than a chain, of cause and effect'.2 Nevertheless, this study will argue that declining labour market demand was crucial in triggering off 'modern' retirement. In retrospect, it can be seen that shifts in labour market demand have created the economic context within which have occurred four great social changes over the past two centuries. Put briefly, different groups in the population have experienced altered relationships to the formal labour market; and in a society where labour market value has been the touchstone of citizenship status, this has had profound consequences. First, children were slowly de-industrialised over the course of the nineteenth century (by a series of Factory Acts) as their labour became less and less necessary; the obverse of this development was, of course, that the increasingly technological mode of production required a better educated workforce, and hence successive cohorts of children experienced longer periods of schooling. This had profound effects upon 1

2

Hannah, Inventing Retirement, 1; Pat Thane, 'The Muddled History of Retiring at 60 and 65', New Society, 3 Aug. 1978, pp. 234-5. Report of the Royal Commission on Population, 1949, Cmd. 7695, p. 38.

20


fertility and family formation behaviour. Second, married women's relationship to the formal labour market also changed. In 1851, some 25 per cent of married women were classified as 'occupied'; but by 1901 this had fallen to 10 per cent, and remained there until the Second World War. However, by the late 1980s this participation level had risen to 64 per cent (albeit much of it in part-time work), and the effects of women's increasing economic independence on demographic and family-formation behaviour was arousing much comment. (There are, of course, many problems arising from the changing census definitions of labour market participation by women - problems which are similar to measuring the labour force participation of older males.)3 Third, from about the 1880s onwards, older male workers began to experience a slow crumbling away of job opportunities: hence, whereas in 1881 nearly 75 per cent of males aged 65+ were recorded as engaged in the formal labour market, by the 1990s this had diminished to about 8 per cent. The fourth group to be profoundly affected by labour market changes have been unskilled working-class males, who, since the 1960s, have been slowly de-industrialised, giving rise to the social and human problem that is encapsulated by the contentious term 'underclass'. It is the third group that is the subject of this study. Why did retirement slowly spread from the late nineteenth century onwards, and, more importantly, how did British society cope with the prospect of maintaining growing numbers of aged citizens who possessed little independent income? Retirement has always existed, and has always been an ambiguous and contradictory social experience. Far back into history, we can find examples of old age inducing individuals to withdraw from an active working life. Such voluntary retirement was mainly confined to the wealthy and powerful - those who could afford to spend their dwindling years in comfort and leisure. Until the twentieth century, the mass of the population faced a very different prospect in old age. For them, retirement was usually a consequence of loss of working capacity. To begin with, high levels of infant mortality whittled down the size of the child population, greatly affecting an individual's chances of survival to adulthood. Once in adulthood, the risks of death were considerably lessened: by the 1880s, 45 per cent of males aged 25, and 52 per cent of females, survived to the age of 65 - a one in two chance of survival, these odds improving with age. But a 'culture of mortality' in childhood engendered in working-class adults a profound pessimism about their 3

For a thoughtful exploration, see Pamela Sharpe, 'Continuity and Change: Women's History and Economic History in Britain', Economic History Review, vol. 48, no. 2, 1995, pp. 353-69.


21

prospects of surviving to old age. Early campaigners for old age pensions, like Joseph Chamberlain, recognised that exhorting the working class to save for old age was pointless since it contradicted their deeply held expectations that they simply would not live that long, even if this pessimism did not accord with the evidence from life-tables. As Leonard Courtney put it, 'can a butterfly even think there is going to be a winter?'4 The pattern of life for most working people in rural communities was thus quite straightforward: it was to go on working for as long as one was physically capable, moving to lighter or casual jobs, at progressively lower levels of pay (often, in old age, supplemented by Poor Law outdoor relief), until rendered completely unemployable by ill-health, accident or disability. For those too infirm to work, the final years of life were likely to be a precarious existence: every effort would be made to eke out a meagre living - by obtaining outdoor relief, by appealing to charities, by selling furniture and personal effects, by begging, by moving in with relatives - until all resources were exhausted. The last resort would be the Poor Law workhouse. The nineteenth-century Poor Law category 'aged and infirm' is testimony to this. Some historians have maintained that retirement is not a twentiethcentury phenomenon, and that one can discover, at certain points in history and in certain parishes of England, proportions of local populations equivalent to the ratio of retirees in advanced industrial societies. For example, Richard Smith has persuasively argued that the social history of old age over several centuries has been marked by shifts of emphasis between family care and care by the community through institutions such as the Poor Law. Communities in early modern Britain displayed crude 'dependency ratios' of old to non-old that were as high as those of today. The myth of retirement as a twentieth-century phenomenon is said to arise from a comparison with the nineteenth century only. In fact, Smith argues, the nineteenth century was quite untypical, in that it had a very youthful age structure, with exceptionally high labour force participation rates by elderly male workers. He does recognise the 'crucial character of the transformed circumstances surrounding the elderly and their relationship with the community in the mid- or late-twentieth century' which 'may well owe much to processes specific to the welfare system of the capitalist state', but, nevertheless, the message implicit in this view is that there is little significant 4

Comment by Courtney, 'Discussion on Mr. Booth's Paper: Enumeration and Classification of Paupers and State Pensions for the Aged5, Journal of the Royal Statistical Society', vol. 55, pt. 1, March 1892, p. 60.

22


difference between the experience of retirement today and that in early modern times.5 However, this study disagrees. Instead, it will argue that, from the 1880s onwards, older workers were steadily shaken out of a labour force that was becoming more technology-intensive and segmented into increasingly specialised divisions of labour. Gradually, the labour market niche that had been occupied by older workers was closed off. There may have been significant levels of 'retirement5 in early modern Britain (consistent with slow economic and demographic change), followed by a new demand for older labour as the industrialisation process took place: there is strongly suggestive evidence that the labour force participation of older males peaked towards the end of the nineteenth century, before declining. However, from the late nineteenth century onwards, the nature of retirement would change in several key respects: it would apply to a much larger section of the aged population, and hence be a near-universal experience (even if, within the retired population, there were sharp differences based on class, gender, age and - after the 1950s - ethnic status); the retired population would itself form a much larger proportion of the total British population; the majority of retirees would be dependent on one single state pension scheme; and the most crucial difference would be that, in contrast to the past, retirees would be retired primarily because there were no jobs for them rather than because of their ill-health. Thus, in the aggregate, 'jobless' retirement replaced 'infirmity' retirement, and on an infinitely greater scale. Paradoxically, retirement spread as the health status of old people dramatically improved, rendering them more capable than ever of working in old age. All these features were historically novel, making retirement a qualitatively different experience.6

The progress of retirement According to census data, the labour force participation rates of males in Britain aged 65+ steadily fell from the 1880s to the 1990s. The actual number of older males who were 'gainfully occupied' increased from 451,000 in 1881 to 683,000 in 1931, and then declined slightly to 565,000 in 1961. But, of course, the total male workforce increased 5

6

Richard M. Smith, 'The Structured Dependence of the Elderly as a Recent Development: Some Sceptical Historical Thoughts', Ageing and Society, vol. 4, pt. 4, Dec. 1984, pp. 409-28, quote from p. 425. For a brief discussion, see: Chris Phillipson, Capitalism and the Construction of Old Age (1982), pp. 3 7 - 8 .


23

Table 2.1. Proportion of males aged 65+ defined as 'economically active' 1881-73.6% 1891-65.6% 1901 - 61.4% 1911 - 56.9% 1921 - 58.9% 1931-47.9%

1941-no census 1951-31.1% 1961 - 24.4% 1971 - 23.5% 1981 - 10.3% 1991- 8.7%

(from 8,852,000 in 1881 to 14,790,000 in 1931 and 16,071,000 in 1961),7 as did the overall population. Thus the trend in labour/force participation was downward, as shown in table 2.1. / Allowing for the anomaly of 1921 and the probable faster rate of fall in the recession-hit 1930s, and smoothing out the differences, we can conclude that the labour force participation rates for older males fell by a rough average of six percentage points each decade from 1881. However, if based upon census data this downwards gradient is misleading. The census was taken every ten years (1891, 1901, etc.) in peacetime conditions. Thus it fails to record the two crucial periods which present us with a counterfactual that substantiates the central thesis of this study - the two World Wars. In both, wartime production stimulated the old 'heavy' industries and set up a demand for labour (exacerbated, of course, by manpower shortages caused by military callup) . In effect, on each occasion the British economy temporarily 'moved back' in production methods to where it had been several decades before. Consequently, the labour force participation rates of older men rose. The First World War did not fall into a census year, but we can get a rough idea of the direction of change if we examine the take-up of noncontributory pensions. (Because the scheme was means-tested, this take-up rate was a proxy for the economic circumstances of pensioners.) The number of pensioners fell from 987,238 in 1915 to 920,198 in 1919, despite an increase in the overall number of old people.8 In addition, the 1921 census showed a rise in labour force participation by older males (compared with 1911), indicating that they had temporarily remained in employment in the immediate post-war boom. During the Second World War, the 1941 census could not take place. But there exists evidence of pensioner working in the form of a survey conducted 7

8

R. C. O. Matthews, C. H. Feinstein and J. C. Odling-Smee, British Economic Growth 1856-1973 (1982), p. 563. This fall was also partly explained by inflation eroding the eligibility income limit.

24


each half-year of surrendered National Insurance contribution cards. (Those who continued working past pensionable age - 65 for men, 60 for women after 1940 - paid no contribution, but their employer had to pay an unemployment insurance and pension contribution.) The number of men aged 65+ surrendering stamped cards (and hence having performed some work) for the first half of 1939 was 322,000. For the first half of 1945, however, the figure was 622,000 - an increase of nearly 100 per cent, despite the fact that the total population of men aged 65+ grew by only 16 per cent. After 1945, there was a sharp fall in the number of such surrendered cards by older workers, as normal peacetime economic conditions returned.9 In examining the politics of retirement, the evidence used in this study will tend to be qualitative and testimonial, rather than quantitative. It will be left to future historians - braver and more numerate than this author - to mount massive econometric investigations into the precise timing and rate of retirement industry by industry, correlating such trends with the rate of technological innovation in each industry.10 Econometric indicators may be illustratively helpful, but they have their limits. It is clear that census data are not sensitive enough to measure the rich complexity of the labour force participation of older workers in the period 1878-1948. As the young William Beveridge commented as early as 1909, census returns of occupations have 'a very indirect and doubtful bearing upon questions of employment'.11 This study will show that notionally precise terms like 'retired' or 'gainfully occupied' were in fact misleading, since most males aged 65+ were awkwardly poised somewhere between these two states. The surveys of Charles Booth in the 1890s and David Caradog Jones in the 1930s showed that the labour market status of older males was extraordinarily complex and ever-changing, and that they drew their income from many different sources. Census data thus both under- and over-record the 'economic activity' of older people. On the one hand, all the testimonial evidence suggests that, given the prospect of having to survive solely on a 10s Od pension, many men and women aged 65+ in the 1930s sought out as much informal, casual or part-time work as was available, outside the 'insured 9

10

11

Report of the Royal Commission on Population, p. 115. These numbers are obviously rounded up. For a preliminary exploration, see: Paul Johnson, 'The Employment and Retirement of Older Men in England and Wales, 1881-1981', Economic History Review, vol. 47, pt. 1, 1994, pp. 106-28; Stuart M. Riddle, 'Age, Obsolescence and Unemployment. Older Men in the British Industrial System, 1920-1939: A Research Note', Ageing and Society, vol. 4, pt. 4, Dec. 1984, pp. 517-24. W. H. Beveridge, Unemployment, a Problem of Industry (1909), p. 121.


25

trades'. On the other hand, the official definition of 'gainfully occupied' in the formal labour market was over-optimistic. In the 1930s, unemployment reduced the effective total of 'gainfully occupied' older males by one-sixth. Of those who remained, many worked episodically: a survey of surrendered stamped National Insurance cards by those pensioners who had been in insurable employment during the first half of 1939 showed that only about 60 per cent were fully stamped for 26 weeks; 25 per cent had 14-26 stamps, and 15 per cent had 1-13 stamps.12 On this basis, the number of fully 'gainfully occupied' older workers should be reduced by a deflator of up to 40 per cent. To complicate matters further, social investigators in the 1930s noticed that many older men who were de facto retired were reluctant to relinquish the formal category of 'gainfully occupied' (since this involved the painful self-admission that incapacity had arrived) and recorded themselves as such in the 1931 census. Because of the limitations of census data, this study will rely upon the much more conventional source material of recorded observations by contemporaries. These testimonies are, of course, also problematic, in that we cannot be sure that contemporaries were fully aware of what was happening to their economic surroundings. (The rationale for econometric analysis is that it can reveal in retrospect what was not realised at the time.) But in the case of retirement one cannot help being struck by the unanimity of testimonial evidence. Nearly every thoughtful commentator agreed that, from the end of the nineteenth century onwards, older workers were being inexorably forced out of the labour market by structural changes in the economy. As will be shown, there was a remarkable degree of consensus among people of all political positions that this was happening, and that it was a significant, new development. Despite eschewing quantitative methods, this study is built upon the contention that the shift in the mode of production to a 'late-industrial' economy was the prime causal agent altering the status of older people. In no way does this model of agency imply a crude 'base/superstructure' economic reductionism - scarcely sustainable in these 'post-Marxist, post-modernist' times - but hopefully it will explore how human beings responded to these structural changes (albeit often imperfectly understanding them), tried to influence them (usually unsuccessfully), and fashioned a lively 'politics of retirement' out of the range of strategies for dealing with them. Cultural and political responses to the spread of retirement were 12

Memorandum by Sir George Epps (Government Actuary), 'Ministerial Enquiry into Old Age Pensions', 1 Dec. 1939, Public Record Office (henceforth PRO) T 161/995 (S. 45029/4).

26


exceedingly complicated, segmented by factors of class, gender, age, place, and so on. Even within these broad social divisions, there were sectional interests. Hence, for example, the National Spinsters' Pensions Association was a movement of working-class and lower middle-class women, but its membership was concentrated in certain geographical areas (often textile manufacturing), and it displayed a militant sectional consciousness that was hostile both to feminism and to the interests of married women. The National Federation of Old Age Pensions Associations was a radical left-wing organisation of pensioners, displaying a reckless militancy that was built upon contempt for the 'sham' of parliamentary democracy. By contrast, the inter-war trade union movement took a highly masculinist perspective, focusing on the interconnected problems of both young and old male industrial workers and scrupulously obeying the established conventions of political lobbying. In the pages that follow, much attention will be paid to the importance of human agency, diversity of interests, political negotiation and bureaucratic compromise. Personalities did matter, as in Neville Chamberlain's extraordinary determination to introduce a contributory pensions scheme in 1925, or in the bitter rivalries between Labour leaders that helped torpedo the retirement pensions plan of 1929-30. Again, the 'culture of old age' is a richly rewarding area of historical study: for example, there is considerable scope for projects that examine the changing social construction of old age as manifested in popular iconography and imagery,13 the precise economic circumstances of old people, the making of 'old age identities' by reference to popular culture, or the especial 'old age experience' of women. To an extent, old people have had to remain mute and inglorious. This study, lengthy as it is, can only examine one part of the impact of retirement. It cannot be a comprehensive 'social history of old age' since really what is needed are several discrete 'social histories of old age'. It is, instead, an examination of how many different actors and interest groups fashioned a lively 'politics of retirement' in the face of structural labour market changes, denning the 'problem' of retirement in many different ways, and how the state responded via its pension scheme. As such, it tries to combine, unobtrusively and eclectically, some recent approaches in historical analysis with the more old-fashioned genre of detailed 'grand narrative' that is unavoidable in tracing the life-history of a social policy. This study repeatedly stresses the paramount importance of the 13

Two notable examples of this kind of approach are: Andrew Blaikie, 'Photographic Memory, Ageing and the Life Course', Ageing and Society, vol. 14, pt. 4, Dec. 1994, pp. 479-97; and Thomas R. Cole, The Journey of Life: A Cultural History of Ageing in America (1992).


27

labour market in setting the economic context within which human beings negotiated their own lives, both individually and collectively via political action. The intention is not to downplay cultural analysis, but to emphasise that cultural responses were ultimately only responses. Human beings displayed a Canute-like inability to halt the steady displacement of older workers from the labour force as a reflection of the evolving development of twentieth-century capitalism: hence efforts to speed up the rate of retirement in the 1930s were as unsuccessful as those to slow it down in the 1950s. Pensions policies tended to follow, thus rationalising and possibly accelerating, long-run shifts in the structure of the labour market. Only a 'political economy' approach can successfully answer several key historiographical questions in the emergence of a 'politics of retirement'. Why was it from the late nineteenth century onwards, rather than earlier or later, that older workers began to leave the labour force? Why did a widespread debate on old age poverty commence only then, given that old age poverty had always existed? Why did Canon Blackley's 1878 pension proposal pass into history, when there had been many such ideas published in previous decades? Why did the poverty of the aged become more 'visible' in the 1880s and 1890s - just at the time when the rate of old age pauperism was declining? Why did pension campaigns appear in other countries at comparable stages of economic development, or with 'industrial' social attitudes - pension schemes passing into law in Germany in 1889, Denmark in 1891 and New Zealand in 1898? And how can one explain the gendered paradox that the debate on retirement primarily concerned the plight of the male older worker, when the highest rates of poverty in the nineteenth century had always been among old women? The question of timing - always a key question in historical analysis is particularly interesting in the case of retirement, for we can find many examples of pension suggestions before the late nineteenth century. In 1772 a proposal was made by Baron Francis Maseres of the Court of the Exchequer to set up annuity schemes in parishes for the industrious poor; a bill to this effect was introduced into the House of Commons in the following year, but was rejected by the Lords.14 In The Rights of Man (1791 and 1792), Thomas Paine advocated an annuity as of right of £6 per annum to everyone aged over 50, and £10 per annum to all aged over 60, the funds to be provided by a graduated tax on estates. In 1796, William Pitt proposed parochial funding of the aged, widows and orphans, and in his Treatise on Indigence (1806) Patrick Colquhoun 14

Francis Maseres, A Proposal for Establishing Life-Annuities in Parishes for the Benefit of the Industrious Poor (1792).

28


proposed an old age insurance scheme.15 Again, in 1879 there was published R. P. Hookham's suggestion for old age pensions in his Outlines of a Scheme for Dealing With Pauperism. Hookham was then aged 92, and stated that he had been formulating his ideas for at least three decades. Remarkably, Hookham proposed a universal pension scheme paying 6d per day at the age of 60 or 65, 9d per day at the age of 70 and Is Od per day at 80. Applying it to all social classes would divest the pension 'of the remotest resemblance to a charitable dole' so that it should be regarded 'as a debt due, a reward well earned, something to which the recipient is worthily entitled, causing him to hold up his head as a prize-winner'.16 Likewise, we should note that throughout the nineteenth century there had always been poverty in old age, especially amongst women; any Poor Law relieving officer would have testified to this.17 The question is, therefore, what made the poverty of the elderly more 'visible' at the end of the nineteenth century, given that the visibility of social problems depends as much upon the gaze of the beholder as on the plight of the subject? The answer must be located within a growing concern over three interconnected social trends: first, the most advanced sectors of the British economy were experiencing rapid technological developments that were shaking out older workers; second, this shift to a more technologyintensive mode of production, plus the new threat of international competition, were giving rise to fears about the health, productivity and industrial behaviour of young, able-bodied male workers - those who formed the backbone of the British industrial army; third, there was the question of how the Poor Law should be reformed, both to deal with these twin problems and to resist its democratisation in the light of the emergence of socialism. We must therefore begin our survey with a brief examination of what was happening in the late-Victorian labour market.

Labour market changes The division of labour in pre-industrial rural Britain was highly agestratified. Almost as soon as they could walk, children found themselves 15

16

17

Examples cited in: Joseph Chamberlain, 'Old-Age Pensions', The National Review, no. 108, Feb. 1892, pp. 721-2; J. Frome Wilkinson, The Blackley National Provident Insurance Scheme: A Protest and an Appeal (1887), pp. 1 - 2 . R. P. Hookham, The Question of the Day. Outlines of a Scheme for Dealing With Pauperism (1879), p. 6. For brief explorations, see: Pat Thane, 'Women and the Poor Law in Victorian and Edwardian England', History Workshop, no. 6, autumn 1978, pp. 29-51; Jane Lewis and David Piachaud, 'Women and Poverty in the Twentieth Century', in Caroline Glendinning and Jane Millar (eds.), Women and Poverty in Britain in the 1990s (1992), pp. 27-45.


29

performing simple tasks which increased in complexity with each succeeding year - scaring crows, clearing stones from fields, collecting windfall apples, picking up ears of corn after the harvest, and so on. Being the product of a centuries-old evolution, agricultural labour had developed a precise relationship between the demands of the job, the rhythm of the seasons and the physical capacity of the labourer. These dominated the working life-cycle. The multiplicity of different tasks to be performed were finely divided according to age and gender. By modern standards, agriculture was massively labour-intensive, and employed high proportions of children, youths, women (married and unmarried) and old people. Over the course of the nineteenth century, there occurred a migration of population from rural to urban areas. In 1851, 50.2 per cent of the England and Wales population lived in urban districts, and 49.8 per cent in rural; by 1911 these proportions had changed to 78.1 per cent and 21.9 per cent respectively (more or less staying constant thereafter). There was thus a substantial drift of labour from agriculture to industry: the proportion of males aged 20 and over employed in agriculture dropped from 25 per cent in 1851 to less than 10 per cent in 1901. In the early stages of the industrial revolution - essentially, from the late eighteenth century to the late nineteenth - this level of labourintensity continued, even if its locus gradually shifted to the factory. So labour-intensive was early industrialisation that there was still massive enlistment into the labour force: apart from adult males, women, children and the old were part of the industrial army. The decline in the proportion of the population employed in agriculture was compensated for by the voracious appetite for labour possessed by the early industrial economy. By the end of the nineteenth century a new stage of economic development was reached. Technological developments in industry began to displace older workers who were judged unable to learn new skills, or were, quite simply, surplus to requirements. Continued inmigration from rural areas to the cities (boosted by the late nineteenthcentury agricultural depression) intensified the competition for jobs in the urban labour market. More and more aged citizens were forced into retirement because there were no jobs for them. At the same time, the administration of the Poor Law became stricter after 1871, and outdoor relief became harder for the impoverished elderly to claim. The aged were caught in the pincers of these two trends, and their poverty became more a topic of public discussion.

30


Youth and old age One important point must be stressed: old age and youth were interconnected social issues. The poverty of the aged would not by itself have been sufficient to impel a demand for old age pensions: after all, for most of the nineteenth century the propertied classes had turned a blind eye to acute old age poverty, especially in its feminised form. The real catalyst was that the impulse to economic modernisation was giving rise to a growing concern over the labour market behaviour and industrial efficiency of the young able-bodied worker. Thus conservative propagandists like Canon Blackley viewed state-sponsored contributory pensions as achieving twin results: the necessity of paying a large deposit between the ages of 18 and 21 would curb the reckless spending habits of the 'overpaid' young male and, in the process, remoralise him by socialising him into the capital accumulation process; at the same time, the cost to the Poor Law of supporting the aged would be greatly reduced by pensions in old age. From the 1880s onwards, there were growing fears over a 'residuum' of young casual labourers. Such concerns were to reappear regularly in the first half of the twentieth century, and were inextricably linked with the debate on the ageing of British society and the alleged inefficiency of older workers. We must remember, therefore, that 'social capital' concerns about younger workers (their health, their productivity, their willingness to work, their conformity to the discipline of the workplace, their industrial militancy) were the obverse of growing concerns about the 'worn-out' older worker whose industrial value was deemed to be very dubious, and who should thus be forced into retirement with the support of a state pension. Both were part of wider concerns about improved economic efficiency, industrial modernisation and manpower planning as British capitalism rode a series of crises in the first half of the twentieth century. Divisions of gender These twin concerns made the discourse on old age a highly masculinist one. Despite the fact that women outnumbered men in old age - and were to do so by nearly two to one in the post-1908 pensioner population - the male pronoun was repeatedly used to describe the aged, and the 'problem' was constructed in terms of a masculinist, military metaphor of the 'worn-out worker' deserving to be 'de-mobilised' from the 'industrial army'. This was more than a sexist convention: it revealed the crucial paradox that the late nineteenth-century debate about old age poverty was always a debate about older male


31

workers, yet the highest rates of poverty in old age were suffered by women. Throughout the nineteenth century, old women had always been poor, yet their plight had attracted little attention from the eager pamphleteers and vindictive moralisers of the middle class. When pensions were under discussion in the 1880s and 1890s, all the empirical evidence substantiated this. To give but one example: the 1900 Departmental Committee on the Aged Deserving Poor conducted a survey of a sample of old people to estimate how many had incomes below 10s Od per week (which was to be the point of eligibility for receipt of its proposed state pensions). Of 6,935 aged women surveyed who were not dependent upon the Poor Law, only 794 had incomes above 20s Od per week (an average low urban working-class wage), and 277 had incomes of 10s Od to 20s Od. Fully 3,294 had incomes below 10s Od per week, 1,818 were maintained by relations or friends, and 752 provided no information. (An additional 1,869 were in receipt of Poor Law relief.) In other words, only 15 per cent of those not dependent upon the Poor Law possessed incomes above what was proposed as the income cut-off point for pension eligibility. If those in receipt of Poor Law relief were included, the proportion fell to only 8 per cent. By contrast, out of a sample of 5,496 aged males, 2,684 (or 49 per cent of those not on Poor Law relief) had incomes above 10s Od per week.18 Despite such incontrovertible evidence of a substantial feminisation of poverty in old age, male pension campaigners of the 1880s and 1890s blithely went on proposing contributory insurance pension schemes that would have been utterly irrelevant to the old age income needs of women, because of their episodic or low-paid lifetime labour force participation. By the end of the 1890s, some campaigners - Charles Booth being a notable exception - were still seriously advocating a state pension scheme confined to the 'thrifty' (i.e. those who had been members of friendly societies): as Gertrude Tuckwell pointed out, this criterion would debar most women, because their low earnings made it impossible for them to join a friendly society.19 The great attraction of all contributory insurance pension schemes an attraction which continued to give them political viability long after their utter impracticality had been exposed - was that they would assist in the remoralisation of the male breadwinner and would involve minimal redistribution from rich to poor. In essence, they fitted perfectly with that long-standing conservative remedy of enforced redistribution 18

19

Report of the Departmental Committee on the Aged Deserving Poor, Cd. 67, 1900, Appendix II, pp. 13-15. Evidence by Tuckwell (Hon. Secretary of the Women's Trade Union League), Report from the Select Committee on the Aged Deserving Poor, 1899, p. 95.

32


of a male's earnings across his life-cycle (and, implicitly, within the nuclear family). Class distancing and generational distancing towards young working-class males has been a feature of social debates throughout history,20 and was, not surprisingly, a powerful sub-text in the late nineteenth-century pensions discussion. For example, in opposing any form of state pension, Octavia Hill deployed the familiar middle-class argument (also used later by Eleanor Rathbone) that young male workers were 'overpaid' relative to their needs, and could easily save for their old age: It is the young people, especially the young boys, that have the money. They have a great deal. You see they get a good deal, when from 17 to 18, almost a man's wages in the unskilled trades; and at that time they could do a great deal if they would. One often hears of their spending 6s Od a day, in pleasure, and taking nothing back at night.21

In the chapters that follow, the gendered nature of the 'politics of retirement' will be traced. Often this is difficult, for frequently gender was powerful by its very absence in explicit discussion. But close reading of the texts of the time shows that the late nineteenth-century debate on old age was highly gendered: fears of eroding male work incentives were combined with a marked reluctance to discuss the poverty of aged women. The moralistic classifications of thrift supporters reflected this gendered division: for example, George Bartley MP, in giving evidence to the 1893-5 Aberdare Commission divided the destitute elderly into three classes: (a) the old age of men whose earnings enable them to provide, but who have not done so; (b) the old age of men whose earnings render it impossible, or almost impossible, for them to provide sufficient for comfort in old age; (c) the old age of widows and single women. The solutions proposed by Bartley for each group reflected the judgemental mixture of morality, gender and labour market value. Those in group (a) were to be left to the mercy of a more deterrent Poor Law: it would be 'mischievous' to give them anything else. Group (b) should be helped by any proposed pension scheme. Bartley had little to say about the poverty of group (c), since they were not part of the new industrial problem.22 The social policy agency through which the young male worker was to 20

21

22

For an entertaining discussion, see Geoffrey Pearson, Hooligan: A History of Respectable Fears (1983). Royal Commission on the Aged Poor, 1895, C-7684-II, vol. Ill, Minutes of Evidence, p. 553. Ibid., C - 7 6 8 4 - I , vol. II, Minutes of Evidence, pp. 4 1 5 - 1 7 .


33

be disciplined in the late nineteenth century was the Poor Law. Thus the emergence of a debate on old age poverty just before the turn of the century must be analysed in the context of the changes that were taking place within the late nineteenth-century Poor Law, and the movement to restore it to its strict 1834 principles. Old age and the Poor Law If we look back at the history of the Poor Law, we can see that the problem of the aged was always linked to the problem of the young. From its gradual and hesitant beginnings, the English Poor Law made a clear distinction between the 'able-bodied' (essentially, young males) who possessed high labour market value, and the 'impotent' poor (the aged, children, lunatics, invalids and - to some extent - single mothers) whose labour market status was marginal. As far back as 1388, an Act attempted to designate the 'impotent poor' as a separate category, and Elizabethan Poor Law policy continued this distinction, always making relief to the impotent easier to claim while simultaneously imposing sanctions against vagrancy. The formalising legislation of 1597 and 1601 was primarily designed to repress vagrancy whilst preserving the impotent poor as proper objects of relief.23 The 1834 Poor Law Amendment Act attempted to restore the Poor Law to virtue and re-establish the distinction between the impotent and the able-bodied. Relief to the able-bodied was seen by Nassau Senior as 'the source from which all their other abuses have flowed'.24 Hence the 1834 Report paid little attention to the impotent poor, and virtually no recommendations were made in regard to their treatment. It declared: 'No use can be made of the labour of the aged and sick, and there is little room for jobbing if their pensions are paid in money. Accordingly, we find that even in places distinguished in general by the most wanton parochial profusion, the allowances to the aged and infirm are moderate.'25 The Report recommended that in future paupers should be classified according to a fourfold division: the aged and really impotent; children; able-bodied females; able-bodied males. The offer of the workhouse would be the 'self-acting test' that would enable officials to make the judgement of deservingness.26 The 1834 Report recommended that the workhouse regime for the 23 24

25

26

The Poor Law Report of 1834 (ed. S. a n d O. C h e c k l a n d , 1 9 7 4 ) , p p . 7 3 - 8 1 . Quoted in Peter Dunkley, The Crisis of the Old Poor Law in England, 1795-1834: An Interpretative Essay ( 1 9 8 2 ) , p. 9. Quoted in H e l e n Fisher H o h m a n , The Development of Social Insurance and Minimum Wages Legislation in Great Britain ( 1 9 3 3 ) , p. 4 2 . Poor Law Report, p. 3 7 8 .

34


aged and infirm should be less rigorous than for the able-bodied: the workhouse should be a place where 'the old might enjoy their indulgences without torment from the boisterous', whereas the able-bodied should be 'subjected to such courses of labour and discipline as will repel the indolent and vicious'.27 If possible, the aged were to be placed in specialised institutions. Partly this was because of widely held views that their poverty was less culpable than that of the young able-bodied male's. Old age was an inevitability over which the individual had no control: as Charles Booth remarked later, it was 'not to be avoided by any fear of penalty, nor liable to increase if the troubles they [the aged] bring are softened'.28 Partly it was because of the inherent difficulty of peering into a past life and adjudicating on the question of 'deservingness'. Partly it was because of the view that has pertained throughout the history of all social security systems: because old people have marginal relevance to the labour market, they need not be subject to punitive sanctions. But lenient treatment of old people was also cheaper. It was one of Chadwick's fatal mistakes not to have realised that, in a system largely financed by ratepayers, motives of economy would prevail such as to weaken the principles of less eligibility and the workhouse test. Even the building of general mixed workhouses - let alone specialised ones - was a slow process after 1834, because of their cost. Quite simply, it was less expensive to pay aged applicants (and other 'deserving' groups, such as widows) small sums in outdoor relief, and allow them to remain in their own homes, than to disrupt their lives and force them to live in workhouses; for an old person, such workhouse residence would be likely to become permanent, and thus the cost to the Poor Law would be far greater.29 The constraints of economy thus guaranteed reasonably lenient treatment: outdoor relief, in Gilbert Slater's laconic verdict, combined 'the maximum of humanity consistent with minimum cost'.30 For all these reasons, outdoor relief flourished after 1834, even being formally sanctioned in the case of the aged and infirm by the 1842 General Prohibitory Order. In theory, the 'offer of the house' continued as the deterrent device aimed at encouraging support of the aged by family, friends and neighbours; in practice, outdoor relief was disbursed in the form of small supplements to earnings. From 1847, Guardians 27 28

29

30

Ibid., p. 430. Charles Booth, Pauperism, a Picture: And the Endowment of Old Age, an Argument (1892), p. 154. Some conservatives argued that outdoor relief was a false economy, since it only encouraged further demands. See evidence by J. S. Davy, Royal Commission on the Aged Poor, vol. II, p. 120. Gilbert Slater, Poverty and the State (1930), p. 220.


35

could allow aged couples to have shared rooms in the workhouse rather than being separated in male and female dormitories; but few implemented this, as it was expensive. Of course, generalisations about Poor Law policy after 1834 have limited value, as there continued to be enormous local variations of practice. In some Unions, outdoor relief would be easily obtained by the aged and infirm, and on quite a generous scale; the workhouse regime would be liberal and humane, such as the 'Brabazon system' operated in Battle (Kent) where local ladies came in and taught the aged inmates the skills of sewing, knitting, wool-work, carpentry, and so on. In others, virtually all relief would be provided within the workhouse, and then it would be punitive in nature (for example, separating old couples) though stone-breaking and coarse oakum picking were never supposed to be applied to aged paupers. In between, there existed a wide range of practices. Contemporary opinion offered different explanations for these variations in relief practices. As we shall see, Charles Booth found them baffling. To the Charity Organisation Society, they reflected the relative strictness or laxness of Boards of Guardians. Others perceptively realised that outdoor relief availability was related to the demands of the local economy, and the need to sustain each area's reserve army of labour: Thomas Mackay pointed out that outdoor relief tended to be more easily available in agricultural regions in order to help farmers employ labour more cheaply (particularly at key moments in the annual cycle, such as harvests).31 Thus Derek Fraser has observed that, in rural areas, Boards of Guardians would consist of farmers, landowners and the local gentry, and accordingly 'wage rates and Poor relief were manipulated in the interests of farmers to maintain an adequate supply of labour to meet the highest seasonal demands'.32 Whatever the conditions for outdoor relief, evidence collected by Charles Booth in the 1890s confirms the obvious that the prospect of indoor relief in the workhouse acted as an effective deterrent until the point when the destitute aged person knew there was no alternative and accepted the inevitable: The labouring folk regard the 'House' with great aversion . . . Outdoor relief, on the other hand, is considered, more or less, as the natural and inevitable source of support when earnings fail. But even outdoor relief is not applied for till it is the last resource; the labourer will work and keep himself till he can work no longer. 31 32

T h o m a s Mackay, Methods of Social Reform ( 1 8 9 6 ) , p . 1 8 1 . D e r e k Fraser, ' T h e English P o o r L a w a n d t h e Origins of t h e British Welfare S t a t e ' , in W. J. Mommsen (ed.)5 The Emergence of the Welfare State in Britain and Germany,

1850-1950 (1981), p. 26.

36


For example, in Oxham (Cambridgeshire) there was 'intense abhorrence of the workhouse. The old people do not feel that they have done anything to deserve being "locked up". One says, "I would rather be hung than go in again".' Likewise, in Satterly outdoor relief was 'regarded as almost a right, but only asked for as a last resource'. 33 The amounts paid in outdoor relief to the aged in the late nineteenth century ranged, for a single person, from Is 6d to 4s Od per week, and, in a very few cases, even 5s Od or 6s Od per week. (These are the figures given in evidence by numerous witnesses to the 1893-5 Royal Commission on the Aged Poor.) The average amount seems to have been about 2s 6d (lower in rural areas than in urban), and would be regarded as a supplement to other sources of income (i.e. casual work, savings, charitable help or contributions from family).34 In the 1890s, Charles Booth found that, in rural areas, the amount paid to an aged person in outdoor relief was 'usually about 2s 6d a week, seldom falling below 2s Od or rising above 3s Od'.35 As E. H. Hunt has put it, such Poor Law 'pensions' were 'disability supplements intended to offset the diminishing market value of men no longer able to earn their keep but not yet sufficiently feeble to warrant full support'. 36 The dilemma for Guardians was that such supplements had to appear not to be allowances in aid of wages, for fear of raising the spectre of Speenhamland. For example, when giving evidence to the 1895 Royal Commission on the Aged Poor, the Local Government Board Chief Inspector, William Knollys, testified that the general amount given to the aged in outdoor relief was 2s Od to 3s 6d (single) and 4s Od to 6s Od (married). This was not in aid of wages, he said, but merely a supplement to 'earnings' - defined by Knollys, in a feat of intellectual contortion, as 'some means of an uncertain character which old people would be able to pick up, and would be entirely distinct from continuous wages'. Again, a representative of St Pancras Union testified that the maximum paid there was 4s Od: it was expected that this would be supplemented, and the minimum an old person should live on was, he judged, 7s Od per week.37 Such official hypocrisy was highly convenient: the blanket assumption by Boards of Guardians that outdoor relief was only a supplementary income was partly a logical reflection of the availability of paid employ33 34

35 37

Charles Booth, The Aged Poor in England and Wales (1894), pp. 3 8 3 , 4 0 0 , 4 1 1 . For a discussion, see E. H. Hunt, Taupers and Pensioners: Past and Present', Ageing and Society, vol. 9, pt. 4, Dec. 1989, pp. 4 0 7 - 3 0 , which is a trenchant reply to David Thomson, "The Decline of Social Welfare: Falling State Support for the Elderly Since Early Victorian Times', Ageing and Society, vol. 4, pt. 4, Dec. 1984, pp. 4 5 1 - 8 2 . 36 Booth, The Aged Poor, p. 3 4 1 . Hunt, Taupers and Pensioners', p. 4 1 5 . Royal Commission on the Aged Poor, vol. II, pp. 43, 52, 130.


37

merit for older workers (albeit often casual or part-time) , but it was also designed to force the aged to seek out all possible sources of income, and to reinforce filial support. It is clear from the evidence that the late nineteenth-century aged had very diverse sources of income, often several being combined. For example, Charles Booth's meticulous researches in The Aged Poor in England and Wales showed that old people in rural areas had five principal sources of income - the Poor Law (the 'parish'), charity, relations, earnings and means - but the mixture of these sources could be complex. Despite the official inducements, it was very difficult for children to support their aged parents when they themselves were struggling to raise a family on agricultural wages: thus only 5.3 per cent of aged were solely supported by relations. The proportion of aged whose income was solely from earnings was 24.4 per cent; but another 24.5 per cent had earnings plus one or more of the other sources of income, making a total of 48.9 per cent wholly or partly dependent upon earnings. A mere 5.0 per cent were solely dependent upon the Poor Law, but another 17.0 per cent had income from the Poor Law plus other sources, making a total of 22.0 per cent wholly or partly dependent upon the Poor Law. The earnings of men aged 65+ in these rural areas were, not surprisingly, low: 41 per cent earned less than 10s Od per week, and 90 per cent of them less than 16s Od per week (which was a good agricultural wage). 38 The 1895 Report of the Royal Commission on the Aged Poor criticised the tendency of Guardians to underpay, and noted that there were many cases where outdoor relief was provided in amounts which are, even when added to other resources of which the Guardians have knowledge, inadequate for the maintenance of the recipients, under the belief that the allowances are sure to be supplemented from other sources, which often exist even though they are not brought before the Guardians. It recommended that relief should be 'adequate to meet fully the extent of destitution'.39 In the six decades after 1834, outdoor relief payments slowly declined. Thus although in the short term the 1834 reform was a failure (in that outdoor relief was not immediately abolished), in the long term it must be viewed as something of a success. The cost of the Poor Law per head of population fell from 7s 2lA& in 1848 to 6s Id in 1892; the rate of outdoor pauperism fell from 55 per 1000 total population in 1849 to 19 per 1,000 in 1892; the rate of'not able-bodied' pauperism fell from 19.6 38 39

Booth, The Aged Poor, pp. 3 4 4 - 5 . Report of the Royal Commission on the Aged Poor, vol. I, pp. x, lxxxiv.

38


per 1,000 population in 1862 to 12.0 in 1892. And the proportion of all paupers who were 'aged and infirm' rose from 16 per cent of all paupers in 1802-3 to 48 per cent in 1901, indicating that the able-bodied were being squeezed out: though the population of England and Wales rose threefold, the number of able-bodied unemployed males on relief was ten times less by the latter date. 40 In short, up to the 1890s the rate of pauperism was falling, albeit at different speeds for different groups. Such statistics of progress were tellingly used by leaders of the Charity Organisation Society to argue that state pensions were not needed. This process of 'de-pauperisation' accelerated after 1871, with the newly formed Local Government Board's 'crusade against outdoor relief - an attempt to tighten up administration of the Poor Law, and (in some cases, in alliance with the Charity Organisation Society) implement a 'back to 1834' policy. The origins of this campaign lay in the crisis felt by the governing class in the late 1860s over the temporary increase in the rate of pauperism - a 'welfare crisis' which also reflected the political crisis of the late 1860s (and is dealt with fully in a future chapter). It was essentially a crusade against the able-bodied, but its precepts were held to apply also to the aged and policy towards them was made stricter. Viewed in the longer term, this change of official policy at the end of the nineteenth century must be placed in the context of two key influences: the urgent need to discipline the able-bodied male; and an apprehension over the democratisation of relief, particularly with the rise of socialism.

The Poor Law dependency of the aged If we examine the late nineteenth-century Poor Law, we find a paradoxical situation: the aged were a major client group of the Poor Law, and thus needed to be lifted off outdoor relief if the Poor Law was to be restored to its 1834 strictness and impose harsher discipline on the young able-bodied males; yet the new concern over old age poverty emerged at a time when old age pauperism was declining. For most of the nineteenth century, empirical evidence on old age pauperism per se was unobtainable, since all paupers aged 60+ were placed in the broad category 'aged and infirm'. It was impossible to ascertain how many of these owed their pauperism solely to old age. In 1890, however, the evidence was collected in the form of'Burt's return', showing that, on a 'one-day count', 19.5 per cent of the 65+ population (16.0 per cent of males and 18.9 per cent of females) were on Poor Law 40

Karel Williams, From Pauperism to Poverty (1981), pp. 4 0 - 1 .


39

Table 2.2. Poor Law dependency by age, England and Wales Under 16

16-65

Over 65

10,762,808

16,867,116

1,372,601

77,415

63,352

0.5

4.6

205,045 14.9

Total population of England and Wales Pauper population, one-day count (Burt's return): Indoor paupers (a) Number 51,611 0.5 (b) Percentage Outdoor paupers (a) Number (b) Percentage

177,567

125,756

1.6

0.7

Total (a) Number (b) Percentage

229,178

203,171

2.1

1.2

Pauper population, twelve-month Count (Ritchie's return): Indoor paupers 232,284 (a) Number 111,782 1.4 1.0 (b) Percentage Outdoor paupers 385,299 441,805 (a) Number 2.3 4.1 (b) Percentage Total 617,583 (a) Number 553,587 3.7 5.1 (b) Percentage

268,397 19.5

114,144 8.3

287,760 21.0 401,904 29.3

Source: Report of the Royal Commission on the Aged Poor, 1895, vol. I, C-7684, p. xii.

relief at any one time (indoor and outdoor), compared with only 1.6 per cent for the age group 16-65. In 1892, more detailed information was available, in the form of 'Ritchie's return'. This took two counts: a oneday count on 1 January 1892; and a twelve-month count ending on Lady Day 1892. The full results are shown in table 2.2. Burt's return also showed how pauperism increased in old age. Of those aged between 60 and 65, 5.3 per cent were paupers; of those aged 65-70, 10.9 per cent; of those 70-75, 18.5 per cent; of those 75-80, 26.1 per cent; and of those 80 and over, 30.0 per cent. In addition, Charles Booth estimated that, if one isolated the working class and small traders, something like 40-45 per cent of those aged over 65 were paupers at some point in the course of a year. Because of the lack of statistics of old age pauperism per se prior to 1891, estimates of the fall in its rate before the 1890s were somewhat conjectural. Several attempts were made, by excluding lunatics, vagrants

40


Table 2.3. Rates ofpauperism by age, England and Wales Year

Percentage of paupers under 16 to population under 16

Percentage of paupers 16-59 to population 16-59

Percentage of paupers 60+ to population 60+

1861 1871 1881 1891 1901 1905

4.2 4.5 2.7 2.2 1.9 1.9

2.0 2.2 1.3 1.0 0.80 0.98

21.6 21.7 15.2 14.0 13.8 14.7

Source: C. S. Loch, Statistics of Population and Pauperism in England and Wales', Journal of the Royal Statistical Society, vol. 69, pt. II, June 1906, p. 292.

and children from the category of 'not able-bodied'. One by Spencer Walpole in 1898 calculated that the rate of pauperism among the population aged 60+ had fallen from 25.7 per cent in 1861 to 16.9 per cent in 1891. 41 Another slightly different estimate was published by C. S. Loch and is shown in table 2.3. Both of these estimates suggested that, whereas old age pauperism had steadily declined since the 1860s, its rate of decline had been slower than that for other groups and had largely ceased by the end of the nineteenth century. Relatively speaking, the aged were a growing obstacle in the way of Poor Law reform. From the 1870s onwards there were increasing concerns that the Poor Law was failing in its historic aim of maximising the productivity of labour by disciplining the ablebodied male, whose industrial behaviour was increasingly seen as the key to the revitalisation of British capitalism in a new era of international economic competition. The removal of those categories of pauper largely irrelevant to the labour market (the 'impotent') was an essential precondition of successfully implementing a 'back to 1834' policy. If the young and the old were removed, the burden of clientage would be reduced by over two-thirds. Hence there appeared proposals such as 'boarding out' children in cottage homes as a humane alternative to the workhouse. In the case of the aged, two alternative policies were suggested: either more generous outdoor relief (with perhaps no aged paupers being required to enter the workhouse); or a system of income support so distinct from the Poor Law that a 'back to 1834' policy could be easily implemented - that is, a system of state old age pensions. (A third policy - that of braving the situation out, doing nothing, and 41

Report of the Committee on Old Age Pensions, C-8911, 1898, Appendix I, p. 20.


41

continuing to reduce outdoor relief - was the policy of the Charity Organisation Society, and will be dealt with fully in a future chapter.) Official policy swithered between these two possibilities. The push from the Local Government Board bureaucrats after 1871 was to apply the doctrine of less eligibility to the aged, with the 'offer of the house' as the only alternative. But presidents of the Local Government Board no doubt more sensitive to political pressures - tended to contradict this: for example, in 1885 Arthur Balfour issued a circular reminding Guardians that married couples aged over 60 had a statutory right to their own bedrooms, and need not be separated; again, in 1891, Charles T. Ritchie sanctioned the provision in the workhouse of newspapers and books for the aged; this was followed in the 1890s by orders allowing tobacco, snuff, tea, coffee and cocoa. The 1895 Report of the Royal Commission on the Aged Poor concluded that workhouses were not appropriate places for old people, and in response another Local Government Board President, W. Shaw-Lefevre, issued a circular recommending that outdoor relief should be easier to claim for those aged who had led thrifty and independent lives. Boards of Guardians did not necessarily pay much attention to these instructions, but they were very revealing of the Poor Law's growing dilemma. By the 1890s, Poor Law policy towards the aged was falling into some confusion. By the end of the nineteenth century, therefore, it was clear that the Poor Law could only be restored to its 1834 strictness if the aged were somehow removed. Most early advocates of old age pensions thus envisaged them as an essential precondition of a tightened-up Poor Law. Canon Blackley's aim was to cut the cost of the Poor Law by one-half, and at times he spoke of its complete abolition. Joseph Chamberlain more subtly realised that public opinion would not permit 'back to 1834' Chadwickian reforms to be applied to the aged pauper. 'If you turn the screw much more there will be an outbreak', he warned. There would be deaths from starvation, and this 'would quickly produce a popular agitation against the whole system'. On the other hand, if the old were removed, 'we should then justify an even more stringent administration of the present Poor Law, and should meet the prejudice which rightly or wrongly now exists, on the ground that the old are treated with considerable hardship'.42 Likewise, Charles Booth opposed any moves to make outdoor relief easier for the aged to claim, and declared: 'It is an integral part of my plan that, concurrently with the 42

Royal Commission on the Aged Poor, vol. Ill, pp. 653, 657; Letter from Chamberlain to C. S. Loch, 26 Nov. 1891, published in The Charity Organisation Review, vol. 8, no. 86, Feb. 1892, p. 37.

42


establishment of pensions in old age, out-relief under the Poor Law should be abolished.'43 Booth acknowledged that such reform of the Poor Law would be very difficult to achieve, but it was 'a task that would be immensely lightened if the old people were withdrawn from it' by a system of pensions. In euphemistic terms (possibly because he was on this occasion speaking at a socialist meeting), Booth outlined the desirable state of affairs that would follow: We should then, I think, be able to divide those to whom relief is still necessary into far more definite classes, treating each class suitably, and I think we should be able to make very considerable economies, but above all we should have a much more efficient system - one in which there would be much less waste of expenditure than there is now.44 Such views were held across a wide range of liberal-reformist (but not socialist) opinion in the 1890s. There was widespread praise for the 1834 reform, and considerable apprehension that a socialist Poor Law would bring back the 'lax' administration that prevailed before 1834. Thus Professor Alfred Marshall roundly condemned 'the ruinous folly of the Old Poor Law; which was perhaps the most serious danger with which England has ever been threatened'.45 But Marshall had other enemies: to Thomas Mackay he confessed that 'I think that after the Old Poor Law the Independent Labour Party is the greatest danger of the present century; both being powerful engines for preventing people from making the best of their abilities.'46 Marshall thus mapped out two possible survival strategies in the face of the socialist threat. First, to liberalise the dispensing of outdoor relief to 'the thrifty, the prudent and the upright . . . and thus to enlist the conscience and the reason of the best of the working classes on the side of prudent and careful reformation'. The second, wholly unwise strategy, would be to turn a deaf ear to these working-class complaints, 'and thus to make it likely that when working class rule, already near at hand, has actually arrived, no patient hearing will be given to the advocates of moderation in the use of outrelief'.47 Another fearful soul was Sidney Webb, who likewise admired the 'bracing system' introduced into the Poor Law in 1834. The abolition of 43 44

45

46

47

Charles Booth, Old Age Pensions and the Aged Poor: A Proposal (1899), p. 49. Quoted in Francis Herbert Stead, How Old Age Pensions Began to Be (n.d., c. 1910), p. 44. Alfred Marshall, ' T h e Poor Law in Relation to State-Aided Pensions', Economic Journal, vol. 2, March 1892, p. 186. Quoted in A. M. MacBriar, An Edwardian Mixed Doubles: The Bosanquets versus the Webbs: A Study in British Social Policy 1890-1922 (1987), p. 69. Alfred Marshall, 'Poor Law Reform', Economic Journal, vol. 2, June 1892, p. 375.


43

outdoor relief to the able-bodied male was now 'virtually complete', but the existence of 'deserving' groups like the aged on outdoor relief hindered the continued work of de-pauperising the working class. Lifting the aged off the Poor Law by a state pension scheme would reinvest the concept of 'pauperisation' with a clear meaning, and hence assist in the arduous task of remoralisation. Thus, for Webb, the object of a state pension scheme was 'not so much the comfort of the individual pensioner as the stoppage of the degradation and demoralisation of the existing pauper class'. By judicious reforms such as state pensions, the rising popular demand for radical reform of the Poor Law could also be pre-empted: 'To be able to head off the crowd from a dangerous course the statesman must, from the outset, be continually leading them towards the same end, but by safe paths'.48 Given that the aged enjoyed public support as axiomatically 'deserving', then the continued democratisation of the Poor Law could lead to a series of liberalising policies which would grant generous outdoor relief as of right. As Joseph Chamberlain said: 'There is no agitation which I think would be more dangerous, and of which I have greater fear, than an agitation in favour of something like widespread out-door relief'.49 By the 1890s, there were also growing concerns that some citizens were taking the view that, because they had paid rates all their lives, they were then automatically entitled to outdoor relief in old age. Alfred Marshall observed in 1892 that the working class were: learning with astonishing rapidity that a man who has not grossly misconducted himself and has to the best of his ability saved and made provision against adversity, has an equitable claim to receive back in case of need part of what he has contributed to the Poor-rates.

Marshall pointed out that working-class political leaders were increasingly taking this view and popularising it; he thought that they were justified in so doing.50 (As with so much of the liberalism of the 1890s, Marshall's approval was merely a bowing to the inevitable.) Likewise, a member of the 1893-5 Royal (Aberdare) Commission commented, of the Poor rate, 'There are some who think that it is in the nature of an insurance contribution by the ratepayer against his or her own old age',51 48

49 50 51

Sidney Webb, ' T h e Reform of the Poor Law', Contemporary Review, vol. 58, July 1890, pp. 97, 1 0 7 - 8 , 120. Royal Commission on the Aged Poor, vol. Ill, p. 660. Marshall, 'Poor Law Reform', p. 374. Comment by A. C. Humphreys-Owen, Royal Commission on the Aged Poor, vol. II, p. 86.

44


and Charles Booth was to warn that, by the 1890s, outdoor relief was 'often claimed very much as a right'.52 This fear was to grow after 1894, when the conditions for standing as a Poor Law Guardian were considerably relaxed: the Local Government Act of that year lowered the property qualification for election to, and membership of, Boards of Guardians, from £40 annual value to £5. By the 1900s, a growing number of Boards of Guardians were dispensing outdoor relief to the aged as a right, thus seriously undermining the concept of 'deservingess'. In short, desert was replacing destitution as the criterion for eligibility. If this were extended to the able-bodied (say, by new socialist Boards of Guardians in urban areas), then the entire deterrent basis of the Poor Law would be destroyed. However, lifting the aged off the Poor Law and on to a system of pensions would erode the legitimacy of any future attempts by working-class, socialist Boards of Guardians to liberalise outdoor relief, since the client group arousing most public sympathy would have been removed. By the end of the nineteenth century, therefore, the problem of remoralising and disciplining the young able-bodied male worker, and hence assisting the revitalisation of British capitalism, was giving rise to a lively debate about whether the Poor Law should be replaced by a system of state old age pensions. This debate was rendered all the more urgent by the significant changes that were taking place in the structure of the labour market. The marginalisation of older workers We can see clearly the beginning of the marginalisation of older workers if we examine the structure of the late-Victorian labour market in both its rural and urban contexts. Unfortunately, official 'blue book' reports offer little help to the historian, and so this section will rely on the observations of several well-informed and concerned contemporaries. As a linguistic construct, the 'worn-out' worker requires sensitive analysis, and further discussion will be conducted in future chapters. Deciding how 'representative' such testimonial source material is can be a problem, but what strikes anyone diligent enough to read the contemporary sources is how much agreement there was - from a great diversity of observers, but especially from trade unionists who were closest to what was happening - that jobs for older workers were disappearing with the emergence of a new kind of capitalism. Living standards generally had risen over the past fifty years, it was agreed: the 52

Booth, The Aged Poor, pp. 330-1.


45

rate of outdoor pauperism was in decline, working-class saving was increasing, wages were higher, death-rates were falling, and so on. But the lot of the aged had grown worse relative to the rest of society. Typical of this concern was William Sutherland's verdict: A better system of sanitation and municipal government generally, increased medical skill, more temperate living, better wages during working years - all these things have tended to extend the life of the working classes; while, at the same time, the increased pressure at which modern industry is run has made it more difficult for the aged to obtain employment.53

In 1899 the journalist Vaughan Nash pointed out that life expectancy was rising, yet the period of earning was shortening. Fewer and fewer jobs were available for older workers, he noted. In addition, the spread of joint-stock companies and more 'scientific' management techniques had resulted in a more impersonal relationship between capitalist and employee, in which the old fared badly: no longer would they be kept in work for sentimental reasons. Wrote Nash: 'With the day of the industrial athlete, who must always be at the top of his training to keep pace with the swing of the workshop that is racing against the world, there has come the final break-up of human relations between employers and workmen.'54 From a different background was the Poor Law Guardian M. J. Cole, who observed such changes taking place in the mining industries of his home area, Cannock. Overall prosperity had increased in the past fifty years, but the relative condition of the aged had worsened; thus pensions were needed, and the rise in wealth meant that they could be funded. Like Nash, Cole argued that the working life had been shortened: he attributed this to the recent Workmen's Compensation Act, which made joint-stock companies unwilling to keep on employing older men because they were becoming industrial liabilities. 'Younger men were forcing out their elders, and this was a very serious matter', commented Cole. 55 A similar analysis was offered at some length by John Metcalfe, in The Case for Universal Old Age Pensions (1899). Metcalfe noted that new inventions in machinery, requiring specially skilled men, were displacing workers who, if they were middle-aged, found little chance of obtaining anything other than low-paid labouring jobs. The worsening condition of the aged was directly the result of increasing mechanisation in 53

54

55

William Sutherland, Old Age Pensions: In Theory and Practice With Some Foreign Examples (1907), pp. 2 2 - 3 . Vaughan Nash, 'The Old-Age Pensions Movement', Contemporary Review, vol. 75, JanJune 1899, pp. 4 9 7 - 8 . Poor Law Conferences Held in the Year 1899-1900 (1900), p. 22.

46


industry. 'What we respect and venerate is not old age in itself, but old age that can claim to be superior to youth in either judgement or independence', he wrote; now that new technology was eroding their previous judgemental superiority, born of experience at the workplace, the aged were losing their venerated social status. Metcalfe was bemused by the relative powerlessness of human agents to reverse these trends: the new economic imperatives necessitated that a large jointstock company had to be ruthlessly competitive and shed older, inefficient workers: 'A manager with a lot of hungry shareholders on the one side, and the fierce competition of rival firms on the other, is helpless, whatever his character or personal feelings may be'. 56 This view was held right across the political spectrum. As will be shown in a future chapter, by the 1890s socialists were becoming increasingly concerned about what was happening in the labour market. Thus in 1899 Keir Hardie called for old age pensions to support older workers who were being displaced because 'the limit of the age of employment is being so much reduced in large industrial establishments'; and others expressed disquiet over the plight of the 'worn-out' older worker.57 At the 1906 TUC Annual Conference George Barnes (of the Amalgamated Society of Engineers) introduced a motion calling for universal, tax-funded old age pensions of at least 5s Od per week, payable from the age of 60, to ameliorate 'the hard lot of the worn-out workers'; the working life had become more intense in the last twentyfive years, said Barnes: 'There had been a speeding-up and a hustling-up in the workshop, and the result of such intensification had been that the old man was unable to keep up with it, and was put on the industrial scrap-heap at an earlier age than was the case before.'58 Much of the pro-pensions socialist literature of the early 1900s is replete with anxieties about the effects of new technology in displacing older workers. Unless supported by the state, these unemployed older workers would form a growing reserve army of labour that would compete with younger workers and force down wages. This concern was to grow and become the basis for the labour movement's demand for retirement pensions in the inter-war years. But among industrialists and political conservatives a similar realisation was developing. One interesting later example of this - in the form of a soothing political bromide - is Stanley Baldwin's famous 'peace in 56 57

58

John Metcalfe, The Case for Universal Old Age Pensions (1899), pp. 1 3 - 2 3 , 3 3 . Independent Labour Party. Report of the Seventh Annual Conference, 1899, p. 29. For the 'worn-out industrial worker', see: Independent Labour Party. Report of the Fourteenth Annual Conference, 1906, p. 41, and George Barnes, From Workshop to War Cabinet (1924), pp. 4 5 - 6 . Report of Proceedings of the Thirty-Ninth Annual Trades Union Congress, 1906, p. 146.


47

our time' speech of 6 March 1925 in the House of Commons. Baldwin reminisced back to his youth in his father's small family firm - the type of enterprise that was already passing: it was a place where nobody ever 'got the sack', and where we had a natural sympathy for those who were less concerned with efficiency than is this generation, and where a large number of old gentlemen used to spend their days sitting on the handles of their wheelbarrows, smoking their pipes. The firm was 'the last survival of that type of works which ultimately became swallowed up in one of those great combinations towards which the industries of today are tending'. But already, Baldwin went on, there was emerging 'a new state of industry', marked by the squeezing out of small firms, more ruthless business organisation, employers' cartels opposing trade unions, and greater alienation between capitalist and worker. In a moment of unintentional economic determinism, Baldwin argued that there was nothing that could be done about this tendency, 'because it comes largely, if not principally, from that driving force of necessity in the world that makes people combine together for competition and for the protection they need against competition'.59 Two points need to be noted. First, some observers regarded the 1897 Workmen's Compensation Act as a 'cause'. In the late 1890s and early 1900s many trade union leaders blamed it for greatly hastening the displacement of older workers. As the Leeds Mercury of 30 December 1898 put it: 'In trades in which the workman's immunity from accidents largely depends upon good eyesight, manual dexterity, and robust physical health, the employer is naturally reluctant to engage any workman who may, by reason of age, or some trifling infirmity, fall below this high standard of physical fitness.'60 But the effects of the Act must have been marginal. It only offered compensation where it could be proved that the accident had not been caused by the worker's negligence; it was difficult and expensive for trade unions to fight such cases in the courts where an employer refused to admit liability. Again, the Act only covered a limited range of industries and certain strictly defined hazards. Its inadequacies were such that the labour movement made reform of workmen's compensation a priority, and succeeded in persuading the Liberal government to introduce an improved scheme in 1906.61 Disliking the Act greatly, they were thus probably over-inclined to cast it in the role of villain. The 1897 Act was not in any way a prime cause of the displacement of older workers: rather it was itself a product 59 60 61

Stanley Baldwin, On England, And Other Addresses (1926), pp. 4 2 - 4 . Quoted in Metcalfe, The Case, p . 3 1 . P. W. J. Bartrip, Workmen's Compensation in Twentieth Century Britain (1987), ch. 2.

48


of the shift to a late-industrial capitalism that required a younger, more skilled workforce. Second, the growing displacement of older workers was often rationalised into a conclusion that the objective health status of older males was worsening; but this was not necessarily the case. A striking example of this misunderstanding took place when Charles Booth gave evidence to the Aberdare Commission. Booth argued that in 'modern industry generally' it was harder for the aged worker to find work. Lord Aberdare was puzzled by this: he thought Booth was saying that old men were no longer fit enough to survive the new stresses of industrial life; how could this be, since living standards had improved, and work was becoming more technology-dependent, and thus lighter?62 The answer was that the new economic conditions of the 1890s made the older worker appear less 'fit' to meet the challenges of industry. Paradoxically, from the 1890s onwards - as the health status and working capacity of older male workers steadily improved - so were they increasingly seen as 'worn-out' 'veterans of industry' who now deserved a 'well-earned rest'. The social observers' perception of decreasing working capacity was thus a reflection of the fact that demand for the labour of older males was diminishing, and this was lowering their economic status relative to the rest of society. In addition, as a subsequent chapter on the friendly societies will show, older workers were becoming more inclined to define themselves as 'worn-out' in relation to shrinking job opportunities: hence the paradox, still puzzling to historians, that friendly society sickness benefit claims were rising at a time when overall health status was improving.

Charles Booth on the crisis of the older male worker The most systematic qualitative analysis of what was happening to the older industrial worker was provided by Charles Booth, in The Aged Poor in England and Wales, and in the five-volume 'Industry Series' of his classic Life and Labour of the People in London. Booth's interlinked twin concerns of Poor Law reform and the need for greater industrial efficiency were magnificently combined in The Aged Poor in England and Wales. At first sight, this thick volume appears to deserve the verdict of his wife that it was 'very dull. There was little to enliven the mass of statistics which composed a large part of it'. 63 62

63

Royal Commission on the Aged Poor, vol. Ill, p. 580. See also Beveridge, Unemployment,

pp. 116-24. Mary Catherine Booth, Charles Booth, a Memoir (1918), p. 143.


49

However, on closer inspection the density of information in it yields many fascinating clues on what was happening to older workers. The Aged Poor was a study of 285 out of the 648 Poor Law Unions in England and Wales, based upon responses to a questionnaire issued by Booth (completed by local clergy), 'Ritchie's return' of 1892, and the 1891 census. Booth's aim was to examine the practices of different Poor Law Unions in their treatment of the aged, to construct some general hypotheses from this information, and to relate Poor Law policy to the structure of the local economy. There were technical difficulties involved in this undertaking (such as the fact that terms like 'employment' and 'thrift' did not necessarily have consistency of meaning), but the results were nevertheless very instructive. Booth concluded that, even under identical social conditions, variations of Poor Law policy towards the aged were so marked as almost to defy analysis. This conclusion actually reflected Booth's unwillingness to investigate the particular demands of the local economy in each Poor Law Union; it led him to argue that such inexplicable anarchy would make it impossible to re-establish a tightened-up, 'back to 1834' Poor Law unless the aged were lifted off outdoor relief completely and supported by a system of state old age pensions. Nevertheless, a rough typology could be constructed: on the one hand were those geographical areas in which the aged still had plentiful employment opportunities (with, as a consequence, low proportions of them on outdoor relief); on the other hand were those areas where employment opportunities were disappearing and support by outdoor relief was greater. In general, rural areas with a labour-intensive, predominantly agricultural base offered aged workers a myriad of casual or light employment opportunities and thus they could continue working to extreme old age. Employer-employee relations tended to be paternalistic, Poor Law relieving officers would know their aged clients well and rural communities were tightly knit places where the socially unfortunate were looked after - providing that they knew their place. Booth wrote: 'In village life the old are, and are felt to be, a common burthen - a burthen on the community. Ties of blood and ties of friendship make a network of support on which the aged poor rest, irrespective of such private or public charity as may be available in addition.'64 In rural areas the proportion of old people was higher than average: younger workers had migrated to urban industry, and the old thus experienced less competition for available work. Population density was also low. At the other extreme, those areas with the highest proportions of aged 64

Booth, The Aged Poor, p. 357.

50


people on outdoor relief were urban conurbations with new industries. Such areas had high population densities and growing populations, marked by constant in-migration of young workers from the surrounding countryside. These younger workers competed with the old for jobs, and thus displaced them. Urban employers also felt no sentimental or community-sanctioned obligation to retain older workers. And, most important of all, the new industrial enterprises developing in cities used innovative technology which - apparently - the old could not master. The Aged Poor provided summaries of many different Poor Law Union practices, all adding up to a picture of enormous detail. From these, a few illustrative examples will suffice. All highly rural areas provided considerable employment opportunities for older workers. Thus in the villages in Hemel Hempstead Poor Law Union aged men were retained on farms 'as long as possible, on wages from a few shillings for minding sheep or trimming hedges, etc., to 14s 6d or 15s Od as carters, etc. Some, unfit for other work, are employed by surveyors on roads.' Glanford Briggs (Lincoln) was also typical of rural areas: 'the parish is entirely agricultural, and work is plentiful; most over 65, if in good health, earn something'.65 Likewise, at Brampton (Cumberland): 'for the men chiefly agricultural labour, e.g. turnip and potato hoeing, hedging, harvest work, stone-breaking. For most of this they receive children's wages or food only.'66 The southern areas of England contained prime examples of antiquated, labour-intensive agricultural methods. Thus in the south there were generally 'few places where the old cannot get employment of some kind, either by continuing their usual occupation or by doing light occasional work'. For example, in Mailing (Kent), old men and women performed 'chiefly field work. Fruit, nut, and hop plantations in Kent give a good deal of employment to the elder poor'. 67 In rural society, the division of labour among older workers was highly gendered. There was a clear understanding of 'men's work' and 'women's work', the latter being domestic and/or caring in nature. For example, in Hoxne (Suffolk), 'Old women go charring (9d or lOd a day and keep), and washing (Is Od a day). Old men get jobs of gardening, work on roads, or other people's allotments for about Is 6d a day. Many instances of farmers employing old men past their work.'68 In Stockton, old women acted as housekeepers to widowed miners with children and did some light field work in harvest time; in Gateshead 'females able to sew, wash and clean can get two or three days' work a week (at Is 6d to 65 67

Ibid.,pp. 166-7, 176-8. Ibid.3pp. 310,266-7.

66 68

Ibid.3pp. 134-5. Ibid.3pp. 160-1.


51

2s Od and food), among better class artisans'; and in Hartlepool old women did 'a little sewing or knitting'. Likewise, in Bellingham many shepherds were able to work until old age, 'sometimes helped by aged wife or younger members of family . . . Aged women sometimes go out charring and nursing (Is Od to Is 6d a day and food). Others live with married children, who look after them kindly in return for help.' In Gloucester, women 'until extreme old age' performed charring and laundry work, 'seldom working more than one day a week, or getting more than Is Od a day'.69 In the rural labour market, both men and women continued working for as long as they were physically able. When retirement came, it was 'infirmity' retirement. (As has already been noted, this fact alone makes it misleading to draw parallels between Poor Law dependency by the aged in pre-industrial society and retirement today.) The return from Ely was illustrative of this: 'Average labourer works till he can work no longer, i.e. to 70 or 75. Some few take light work, or do odd jobs, earning small pittance. If quite broken down or worn out they go to the workhouse.'70 These placid, rural communities provided a model of what social relations and Poor Law relief practices had been before industrialisation. At the other extreme, the information collected from urban areas revealed the world as it would become in the future. In such areas the introduction of new technology was displacing older workers; there was constant competition from the young; and where work was unskilled it was often physically arduous, rendering a worker 'worn-out' a good ten years earlier than in rural areas. In towns and cities, Booth concluded, men 'not only break down at an earlier age, but are accounted "incapable" sooner still . . . In one way or another effective working life is ten years longer in the country than in the town, or, speaking generally, is as seventy to sixty.'71 As has been noted a few pages earlier, this kind of comment, increasingly made by many social observers from the late nineteenth century onwards, was more a reflection of the lack of jobs for older workers than any actual decline in their health status. The midland areas contained many centres of manufacturing; the replies from these showed that men had great difficulty obtaining work after the age of 50 if they had been dismissed. Thus in Derby there was 'little employment for the aged, who are crowded out by the number of young people out of work, ready to undertake anything that crops up'. 72 Likewise, in the northern districts there was far less work for older men in urban as compared with rural areas. 'Where all employments are 69 71

Ibid.,pp. 110-11, 114-15, 108-9,206-7. 72 Ibid., p. 321. Ibid., pp. 218, 188-9.

70

Ibid.,pp. 150-1.

52


highly skilled or laborious, age specially disqualifies', noted Booth. 73 In York, 'masters grow less willing to employ any but young men'. In Sheffield, 'Old men past work are few, killed off by heavy character of iron and steel works, grinders' disease, lead colic, phthisis, and intemperance.' In any case, work for older men was practically non-existent. Similarly, in Stockton, 'A few old women get washing, rough sewing and mending; younger women compete for this, and the supply is limited. For men there is almost nothing, except street sweeping.' Competition with the young men in an over-stocked urban labour market was also a feature in Hartlepool: there aged men had much greater difficulty in obtaining employment than formerly 'as, owing to increased population, young people are numerous and preferred'; there was thus very little employment - 'old men may act as caretakers or watchmen'. 74 Broadly speaking, these examples typified the developing sectors of the urban labour market, which was increasingly marginalising older workers. In Southwell (Nottingham) there was 'Much less work for the aged than formerly; in villages the only employment open to men is agricultural work; in towns, gardening and odd jobs in addition; earnings Is 6d to 2s 6d a day'. Likewise in Walsall there was 'no special employments for aged. Difficulty of old men in finding work increases; so many young available; absorption of private firms by Joint Stock Companies has destroyed old friendly relations between individual masters and old servants.' Often, a specific development in production techniques could be identified: for example, in Mansfield the introduction of new machinery in the hosiery trade was reported to have caused 'much distress' among older workers.75 However, where there were long-standing industries with 'traditional', paternalistic employer-employee relations, the older workers would be looked after if they had given the firm long service. This was particularly true of the mining industry (made up of many small coal companies). Thus in Morpeth 'aged miners, having worked long in one pit, are kept on at pit's mouth to 70 or 80, doing easy jobs at lower wages'. In Stockton 'old men work in mines, go round calling people in early morning. Owners are very good in providing the old with light work', and in Bootle the local mining company was 'very good to the old, giving many light work'.76 Textile mills also provided lighter work for their aged employees, 'suited to their failing powers'. Railway companies operated similar support schemes. In Gateshead, the North Eastern Railway was the largest employer: it tended to pension off its 'old servants' or employed them 'as messengers, watchmen, etc. (10s Od to 73 75

74 Ibid., p. 142. Ibid.,pp. 118-19, 120-1, 110-11, 114-15. 76 Ibid.,pp. 202-3, 196-7,230. Ibid.,pp. 108-9,110-11,130-1.


53

20s Od a week)'. 77 It was clear to Booth that a transition was taking place, and he described the problem thus (in a passage he cited frequently as a concise summary of the situation): Everywhere a good deal is done for old servants. Their case is a recognised charge on all industrial undertakings of character and long standing, and is usually met by the provision of suitable light work at ages based rather upon the needs of the recipient than on the value of the services rendered . . . These factors are found less, and increasingly less, in urban than in rural communities, and the effect on the condition of the old is very serious.78 These new developments in urban industry were specifically examined in a second publication of Booth's - the 'Industry Series' of Life and Labour.19 Coming from a business background (his own shipping firm), Booth viewed social conditions with the sharp eye of the perceptive capitalist. He was convinced that a new kind of industrial system was emerging in the 1880s and 1890s - he called it 'the modern system' marked by large joint-stock companies (replacing small family firms), technology-intensive production methods, scientific management of the workforce, a more impersonal capitalist/employee relationship, new and more specialised divisions of labour - and the gradual displacement of older workers. 'The recognised characteristics of modern industry are an extreme division of labour, a continuously extending use of machinery, and a general complexity of organisation', he observed. He was not pessimistic about these changes; small firms would always exist: There is consequently a continuous flux in the development of industry, and it would be as reasonable to suppose that the day of small businesses is over as to look for an end of gnats, because of the strong flight or open beak of the swallow, or of smallfishesbecause of the whale's great mouth. Booth argued that the new large firms need not automatically lead to more impersonal and alienating relationships between capitalist and worker. 80 However, he was clearly concerned that new social and political problems could be thrown up by this modernisation process: if, for example, it worsened rates of poverty, then there could be problems of social disorder and political unrest. There was no reason, thought Booth, why the new industrial system should produce greater poverty for the majority of workers. But he clearly believed that it was worsening the condition of the old by displacing them from jobs, and gave evidence to that effect to the 1893-5 Royal Commission on the Aged Poor. 77 79

80

78 Ibid., pp. 136-7, 114-15. Ibid.,pp. 3 2 1 - 2 . Charles Booth, Life and Labour of the People in London: Second Series: Industry (1903 edn). Volumes V - I X form Volumes I - V of the 'Industry Series 5. In the following footnotes, the volume numbers refer to the latter. Ibid., vol. V, pp. 6 9 - 7 1 .

54


As an employer, Booth was fascinated by the effect that these structural economic changes were having on the lives of ordinary people who sold their labour in a labour market that was complex to the point of anarchy. How did workers - especially the unskilled - survive the Darwinian struggle in 'the seething mass of industrial life',81 particularly when demand was affected by a complex set of variables (the trade cycle, the seasons, the weather and so on) and there was often an overabundance of labour supply? How did they negotiate the fluctuations of income that would accompany the life course - in particular, the fact that unskilled males tended to experience a peak of earning power when aged in their twenties (in contrast to the middle-class professions, where the peak was in middle age)? The answer was, of course, that there were extraordinarily complex age stratifications in the London labour market that intersected divisions of skill, class and gender. Except for a small minority of exceptionally stable skilled trades, a worker's progression through the life course was marked by frequent changes of job (or downward occupational mobility caused by 'life-cycle deskilling', as Ransome and Sutch have described it). 82 These changes were dictated by physical ability, and hence by age. Often, the series of occupations would be logically connected. To give but one example: sailors and seamen found it impossible to continue at sea after about the age of 50, when the required strength, dexterity and general physical endurance declined. They would then obtain work in the docks, ports or other ship-related businesses on dry land, where their knowledge and experience would be needed. Some became house painters: the latter was ca trade to which men often turn late in life. Every sailor is a painter'. 83 Likewise, publicans had a high age-profile because theirs was an occupation filled by men who had retired from other more physically demanding jobs (whereas barmen tended to be young).84 Recognising that an analysis according to age was thus enormously important, Booth was determined to investigate 'the manner in which opportunities of employment necessarily shift from trade to trade as the workers pass from boyhood to old age'. But he recognised that these age stratifications made the analytical process very problematic: 81 82

83 84

Ibid., p. 4 7 . Roger L. Ransome and Richard Sutch, 'The Impact of Ageing o n the Employment of M e n in American Working-Class Communities at the E n d of the Nineteenth Century', in David Kertzer and Peter Laslett (eds.), Ageing in the Past: Demography, Society, and Old Age ( 1 9 9 5 ) , pp. 3 0 3 - 2 7 . Booth, Life and Labour. Industry, vol. I l l , p. 3 6 3 and vol. I, p. 7 8 . Ibid., vol. I l l , p. 2 3 0 .


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Many who are messengers up to twenty may appear later, for instance, under railway service; a surplus of young domestic servants may pass into the category of extra (i.e. outside) domestic service, or be found as coffee or lodging-house keepers or publicans, or become cabmen, busmen or stablemen, or join the police; lads described as 'factory labourers, undefined', or engaged in sundry manufactures - soap, candles, chemicals, etc. - may, perhaps, afterwards feed the ranks of dock labour, or become in their years of greatest strength gasworkers or coal-porters.85

There might be other complicating factors, such as the seasons. For example, men who worked as gasworkers in the winter (when demand was high, and jobs were relatively plentiful) often worked as building workers in the summer.86 Nevertheless, despite this complexity some general patterns could clearly be discerned. Booth provides us with a remarkable analysis of the age profiles of key industries in the London labour market, correlating these age profiles with the stage of development of that industry, i.e. whether it was new and expanding, or old and declining. His analysis is mainly confined to male workers because of the fact that marriage introduced a complicating factor into female labour force participation. Industries which were 'youthful' (containing a high proportion of young workers) tended to be one of three types: (a) large firms, in areas of recent economic development, with new technology-intensive production methods; (b) service industries, involving one-to-one contact with members of the public who expected those serving them to be young; and (c) occupations where dexterity, strength and vigour were required, or where the health hazards were so extreme that the effective working life was short. A good example of (a) was surgical, scientific and electrical instrument-making. 'The age distribution is characteristic of a new trade', noted Booth.87 Industry (b) was typified by the drapery trade, containing high proportions of both young men (49 per cent of its total male workforce aged under 25) and young women (65 per cent of its total female workforce aged under 25). The extended hours worked by drapers, combined with long periods standing up, had a detrimental effect on their health (for example, Booth noted that they often had to bolt down their meals in very brief absences from the serving counter). Most of the customers were young women, and they liked to be served by young men. Hence, unless they could start up an independent business most young drapers had to seek other employment as they grew older.88 Four apposite examples of industry type (c) were plumbing, fur85 87

Ibid., vol. V, pp. 43, 47. Ibid., vol. II, p. 35.

88

86 Ibid., vol. V, p. 261. Ibid., vol. Ill, pp. 66-80.

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making, printing and pottery work. Plumbing, requiring strength, suppleness and manual dexterity, had a youthful age profile, with lots of boys as mates. Fur-skin dressers and furriers tended to inhale fur into their lungs and were 'generally past work at fifty'. Likewise, printers suffered pulmonary complaints because of the atmosphere at work: if a compositor could avoid this, he could work to over 60; however, machine work, which was harder, had few men aged over 55. Pottery and earthenware work was strenuous, hot and dusty. Booth observed: The irregularity of hours, the periods of idleness, and the stress and character of the work, as well as the high level of pay, are enough to account for the bad reputation these men have for intemperance. They cannot continue at it later than up to forty-five, or in rare cases,fiftyyears of age, and are apt to fall into the ranks of the very irregularly employed casual labourers and loafers.89 On the other hand, the industrial features that correlated with an 'old' age profile were: smaller firms, long-established types of industry, more labour-intensive production methods, lighter work, and the industry undergoing a decline. 'An excess of elderly men . . . is a sure sign of a declining industry', noted Booth: 'The most striking instances of excessive proportion of the old are the decaying or decayed trades coopers, shipwrights, silk-weavers, rope-makers, and watch-makers.'90 The construction of clocks and watches by hand was being replaced by mechanisation, and was an example of light work in a declining trade. Another was wooden boat-building - experiencing slow decay because of the appearance of iron and steel ships - where the trade union placed limits on the entry of young workers so that the shrinking number of jobs could be shared out by existing older workers: because wooden boat-building was light work, there were 'plenty of good workmen past sixty years of age'. 91 The last resort of older workers would be casual work, or precarious self-employed activity: as David Caradog Jones was to observe in Liverpool in the 1930s, Booth noted that 'the old and broken down of other trades sometimes take to street selling as a last resource'.92 What seemed to be happening was that the speed of transition to new industrial methods, and a younger workforce, was taking place at a rate that could not be accommodated by the existing age structure of London labour, and the low-grade jobs that had previously offered some sustenance to the 'worn-out' worker were simply disappearing. Continued in-migration of youth from the surrounding rural areas maintained a constant labour supply. Hence older workers were experiencing increasing difficulty in finding the kind of 89 90 92

Ibid., vol. I, p. 8 0 ; vol. II, pp. 138, 2 1 0 , 9 0 - 1 . 91 Ibid., vol. I, p. 2 5 1 and vol. V, p. 4 9 . Ibid., vol. I, pp. 2 6 9 - 7 5 . Ibid., vol. I l l , p. 2 5 9 .


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light or casual jobs that their fathers would have occupied when in their sixties and seventies. Essentially, there was developing a 'crisis of work' for the older male worker. Booth was interested in ascertaining the point at which 'loss of capacity' arrived, and the worker was incapable of working any more. Clearly, the answer was different for every trade, depending on the complex interaction of the factors summarised above. But given the hours of work, and conditions, it is not surprising that many workers were cworn-out' at 60 or 65. The best conditions were in healthy and light trades: cabinet-makers, for instance, commenced work at 8 or 9 a.m., had ten minutes off at 10.30 for lunch, one hour for dinner, half an hour for tea, and ceased work at 7 or 8 p.m., working to 1 p.m. on Saturdays. Others were not so lucky. Glass-bevellers experienced ioss or diminution of wage-earning capacity' around 55 (silverers, cutters and fitters) or earlier (bevellers) 'because the cold, wet process, interconnected with drinking habits, induces rheumatism'. Older woodcarvers had to 'confine themselves to coarse work, at low pay, as eye and hand fail early'. Long hours alone could render the working life short: for example, baking required 'physical strength and a power of sustained effort under exceptionally exhausting conditions . . . and where long hours prevail few men can stand the strain for more than twenty years'. The older bakers developed phthisis, bronchitis and pneumonia, because of the flour in their lungs. Thus bakers appeared to 'lack energy. The masters complain of stupidity and lack of interest in their work; and say that the men have "no ambition" '. Likewise, blacksmiths experienced arduous work in hot, noisy and dusty surroundings: hence 'men are worn out at the comparatively early age of fifty, and after forty-five it is not easy to obtain a fresh job'. 93 However, in some trades older workers could remain in employment: if there was a high level of skill involved, if the work was light in nature and healthy in environment, and if the trade was stable because of steady consumer demand. Thus jewellers and piano-makers could work to old age. 94 Cabinet-making was undertaken in small, old-style firms with close relations between masters and men: hence older workers were kept on for as long as possible.95 This was also true for tailors, but for a different reason: most were self-employed, and could work to old age (as long as they were able to obtain orders) since there was no employer to dismiss them. 96 In the most highly organised of these trades, there was virtually a job 93 94 96

Ibid., vol. I, pp. 1 8 9 - 9 0 ; vol. Ill, pp. 1 5 6 - 7 and vol. I, p. 3 3 0 . 95 Ibid., vol. II, pp. 10, 6 0 . Ibid., vol. I, pp. 1 7 8 - 8 1 . Ibid., vol. Ill, p. 9.

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for life. 'The boy who starts work in any of these trades may fairly hope to live his life and end his days in it', noted Booth, citing cabinetmaking, engineering, iron and steel work, leather-dressing, bookselling and milling as examples.97 Clerks and bank officials also stayed for life: it was very difficult for a middle-aged bank clerk to regain employment in the same occupation, if dismissed. In such long-service employment, loyalty bonuses were used as inducements 'to encourage those who have once entered to remain as long as they are fit for work'; when retirement was absolutely necessary, a pension would be forthcoming. Again, typefounding was 'a trade in which men may live and die in one situation, and is characterised by strong family ties . . . Men are very rarely discharged on account of old age, their experience sometimes making old men more valuable than the younger ones'. 98 Clearly, these kinds of enterprises were the pointers to the future, in that they were developing their own pension schemes as a way of removing older workers deemed inefficient, and in them it was very difficult for the middle-aged to find new work: in engineering (which was experiencing the introduction of electrical power and automation) men could stay in a job until aged 70 or later; but it was 'universally admitted to be a most difficult thing for a stranger to obtain employment if he is, or looks to be, fifty years of age'. 99 Booth viewed the old mid-Victorian fluidity of labour as having a value that was functional to economic enterprise: the alternative would be 'to sink to a system of caste, with all its fatal stagnation'.100 But he was not unduly perturbed by the obvious transition to modern industrial organisation, with its new concentrations of capital. Much could be gained by it: for example, economies of scale, scientific management and precise job-grading could greatly improve efficiency. Booth wrote: There is nothing that is necessarily hostile to the welfare of the worker in the specialisation of labour, or in the use of machinery, or in good book-keeping, or in the substitution of science for rule of thumb . . . Although something is lost in the character of the relations between employer and employed under the large system of industry, something also is gained.101 As his biographers have observed, Booth was broadly optimistic that, with some judicious measure of state intervention (by 'limited socialism'), capitalism could flourish and simultaneously eliminate poverty - providing that workers took on an 'individualist' mentality and adapted their skills to new demands. 102 The one group that was clearly losing out, however, was the older workers. They were increasingly at an 97 99 102

98 Ibid., vol. V, p. 44. Ibid., vol. Ill, pp. 276-7 and vol. I, pp. 348-51. 10 101 Ibid., vol. I, p. 303. ° Ibid., vol. V, p. 50. Ibid., pp. 70-1. T. S. and M. B. Simey, Charles Booth, Social Scientist (I960), pp. 132-3.


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industrial disadvantage, 'so that they do not, except indirectly, share in the general prosperity'.103 Some system of income support would be needed for them, if industry was to be further streamlined and if the Poor Law was to be tightened up. This, then, was the background to the late nineteenth-century campaign for old age pensions. It was built upon a dual imperative: the need to improve industrial productivity by disciplining the young, able-bodied male worker (via a stricter Poor Law); and the need to hasten the industrial exit of the older, 'worn-out5 worker who was increasingly surplus to the requirements of modern capitalism. At its outset, therefore, the pensions campaign was highly conservative. As Helen Bosanquet perceptively observed, 'it is an entirely middle-class movement in its origin, and in no sense emanates from the working classes themselves'.104 But by the late 1890s these essentially conservative motives were being turned round as socialists began to see old age pensions as something very different: they would recognise the citizenship worth of old people, providing them with a guaranteed income; they would 'tighten up' the labour market by removing the competition of older workers; and they would re-channel wealth to the working class by confiscatory levels of taxation levied upon the capitalist class. As Will Crooks put it, old age pensions would benefit 'the veterans of industry, people of almost endless toil, who have fought for and won the industrial and commercial supremacy of Great Britain . . . We claim these pensions as a right.'105 By the late 1890s, a lively and often acrimonious debate had emerged, based upon contested meanings of concepts like 'pauperisation' or the 'worn-out worker', and symbolising a wider conflict between capital and labour. It was from these intriguingly paradoxical origins that a 'politics of retirement' was to develop. 103

104

105

Speech by Booth, Old Age Pensions. Verbatim Report of the Proceedings at a Conference, 1899 (1899), p . 4. Helen Bosanquet, The Strength of the People. A Study in Social Economics (1902), p. 2 4 7 . House of Commons Debates [henceforth H of C Deb.], 4s, vol. C X C I I , 9 July 1908, col. 197.

Blackley, Chamberlain and Booth

Canon Blackley In the November 1878 issue of the journal the Nineteenth Century there was published an article on 'National Insurance' by a somewhat obscure rural vicar, Canon William Blackley. Blackley's scheme has passed into history more for its timing than for its originality: it appeared just before that great decade of social discussion and structural economic change, the 1880s, and thus engendered public controversy. It is one of the paradoxes of British social policy history that a plan for state-funded old age pensions, seen by many in the early twentieth century as a piece of radical socialist welfare policy, should have originated in one of such conservative views. William Lewery Blackley was born in Dundalk, Ireland, on 30 December 1830. He came from a prosperous landowning family, wealthy enough to send him to school in Brussels, and thereafter he attended Trinity College, Dublin. Ordained in 1854, he became a curate of the parish of St Peter's in Southwark - a very poor part of London, subject to all the problems of Victorian inner-city working-class life. One of these caught up with Blackley very soon after his arrival: he contracted cholera and nearly died. It was largely for the sake of his health, therefore, that in 1855 he was transferred to Frensham, in Surrey, to be vicar. He thus spent most of his working life in the relative tranquillity of rural parishes: first, Frensham until 1867; then North Waltham, in Hampshire, until 1883; then King's Somborne, also in Hampshire, until 1889. Finally, in 1889 Blackley moved to St James the Less, Westminster, and remained there until his death in 1902. This move to London was occasioned not by religious impulses, but because of his involvement in various campaigns and public activities (particularly old age pensions for the clergy): he moved there 'so as to be able more easily and at less loss of time to attend the necessary meetings'.l 1

M. J. J. Blackley, Thrift and National Insurance as a Security Against Pauperism, with a Memoir of the Late Rev. Canon Blackley and Reprint of His Essays (1906), pp. 1—23.

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61

The early advocate of old age pensions was thus a conservative vicar deeply embedded in rural society and with the cast of mind of the rentier class - a fact that should be borne in mind when considering his views on the causes of working class poverty. Two inter-related strands of thought in particular ran through his analysis of social problems. The first was an unbending commitment to the temperance movement. Blackley and his family were total abstainers, and he held strong views on the evils of drink among the working classes; whenever he moved to a new parish, he immediately began a temperance campaign in it. The second was the conviction that most social evils stemmed from what he called 'national improvidence'. This idea was to be repeatedly stressed in his addresses and writings, and its moral and political implications were cogently outlined in a sermon preached at Westminster Abbey on 28 September 1879. Blackley insisted that many questions of social politics - 'secular education, improved sanitation, purity of election, and so forth' - were not suitable matters for discussion from the pulpit. National improvidence was, however. It lay at the root of idleness, self-indulgence, drunkenness and poverty: it was ca national sin', stemming from 'want of Christian self-denial'. Symptomatic of this was the reliance by some 700,000 citizens on the Poor Law, which had to be paid for by 'the forced taxation of the provident of all classes, high and low alike'. 'This inoculation of pauperism' had 'infected the whole spirit of the nation', and was leading to political discontent, since the independent working man was increasingly encouraged to feel unity with the 'new class' of paupers. Throughout Blackley's writing there ran an obsessive fear of pauperism (manifested in spine-chilling warnings), the growth of which might destabilise existing class relations. Pauperism, he wrote, 'creates a new class in our state which confuses our whole social order, and does the work of Satan in awaking and fostering immeasurable social discords.'2 In common with such apocalyptic social writing, there was an interesting generational distancing on Blackley's part, manifested in a strong hostility towards the potent masculinity of the young male: he frequently referred to 'the really ignorant, sensual, unenlightened boys of our nation', with 'their waste, their sensuality, their ignorance and their selfishness'.3 The solution was to infuse the independent working man with a sense 2

3

W. L. Blackley, 'National Improvidence - a Sermon Preached at Westminster Abbey on Sunday September 28 1879', in Blackley, Thrift, pp. 128-39. This volume contains several of Blackley's writings. See also, W. L. Blackley, Collected Essays on the Prevention of Pauperism (1880). W. L. Blackley, 'National Insurance: a Cheap, Practical, and Popular Means of Abolishing Poor Rates', Nineteenth Century, 4, Nov. 1878, pp. 854, 838.

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of financial security by a scheme of national provident insurance. This would wean him away from the dangerous and false political alliance with the 'new' pauper class, and show to him that he was really 'a rich man and a capitalist compared to the pauper'. 4 Hence Blackley's celebrated November 1878 article in the Nineteenth Century was entitled 'National Insurance: a Cheap, Practical, and Popular Means of Abolishing Poor Rates'. Written in the typically rambling and hyperbolic style of the nineteenth century social tract, Blackley's article proposed a strategy of individual capital accumulation: each wage earner should pay a lump sum of money into a 'national club' (in effect, a state-run friendly society) when he or she was aged between 17 and 20. The amount could vary depending on when it was paid: he initially suggested £15 if paid at the age of 20, or £14 at I8V2; in time, as the scheme prospered, this could probably be reduced to £10 'or even much less'. With accumulated interest, it could fund a sickness benefit scheme paying 8s Od per week until the age of 70, and then a pension of 4s Od per week thereafter. The advantage of paying in the lump sum early in life was that it would then accumulate the highest interest: £15 invested at the age of twenty was the equivalent of £24 invested at the age of thirty-five. Benefits would be paid through the Post Office, and everyone would be compelled to join the scheme. Blackley's obsession was with the 'enormous class' of improvident people that he believed to exist - 'young labourers by the dozen without a change of decent clothes, continually and brutally drinking, and living almost like savages, while earning fully a pound a week'. If his scheme were implemented, many beneficial results would follow, he believed: providence, thrift and independence would spread throughout the working class; Poor Law expenditure would fall - initially by half, and then perhaps to such an extent that the Poor Law could be wound up pauperism would disappear and wages would rise; and 'every male Englishman' would be given 'a direct money interest in the stability of our institutions'.5 In essence the scheme contained those two classic recipes for social betterment endlessly proposed by the propertied classes: a remoralisation of the working class; and the enforced redistribution of the individual's own lifetime earnings towards economically vulnerable points in the life-cycle. Blackley's scheme had a large number of serious drawbacks that painfully revealed its author's distance from late nineteenth-century working-class life. Despite his optimistic assertion that the only objec4 5

Blackley, 'National Improvidence', p. 136. 'National Insurance', pp. 838, 841, 855-6.


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tions would be 'matters not of principle, but of detail', there were several fundamental flaws to his pension plan. In the first place, it was utterly unrealistic to expect that young men could save such a large lump sum so quickly. Blackley was briskly dismissive of this problem, arguing that it would be no hardship for a young bachelor to 'live well' on 9s Od a week and put the rest of his income towards saving £15 by the age of 20 to fund the scheme.6 However, to argue this was to ignore the classic problem in all contributory old age pension schemes: those who needed a pension most in old age were precisely those who were least able to save during their working lives - the low paid, the irregularly employed and women. For them, saving would have been difficult in the extreme - unless accompanied by levels of compulsion that would have had to be positively draconian. (Blackley's enemies took a delight in pointing out just how much compulsion there would have to be.) 7 And many wages were below this amount: for example, in 1872 agricultural wages in the depressed southern counties averaged around 13s Od to 14s Od per week, with wages in Dorset as low as 10s 4d. As Blackley wrote those very words at his vicarage in Hampshire, agricultural labourers in the fields around him were earning an average of 13s 8d per week, which had fallen to 12s Od per week by 1898.8 It is instructive to note that, by contrast, the income from Blackley's living in King's Somborne was said to be £700 per annum, or nearly £14 a week.9 Apart from its inherent impracticalities, a major drawback of the scheme was the opposition of the friendly societies. The backbone of the societies' operation was their sickness benefit provision, and they were naturally suspicious of any proposed schemes of state-sponsored welfare that threatened their power and income. In a sense, Blackley dug his own grave where the friendly societies were concerned. First, he refused to separate out his twin proposal for sickness benefit and old age pensions: the societies might have accepted the latter without the former.10 Second, he made some rash and intemperate attacks upon them. Absurdly, he claimed that the ratio of improvident to provident in the working class was three to one. Even when provident working men joined a friendly society, he declared: 'these self-denying efforts only too 6 7

8

9 10

Ibid., pp. 843, 840. J. Frome Wilkinson, The Blackley National Provident Insurance Scheme. A Protest and an Appeal (1887), pp. 5-7. Wage rates from appendix to R. E. Prothero, English Farming Past and Present (1961 edn). Frome Wilkinson, Blackley National, p. 25. E. P. Hennock, British Social Reform and German Precedents. The Case of Social Insurance,

1880-1914 (1987), p. 117.

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often bring them, in the end, to no better condition than that of the improvident pauper'. The reason, claimed Blackley (citing some rather dubious evidence from Hampshire), was that half of all friendly society policies lapsed, and that nine out of ten of them were insolvent.11 Another sweeping claim by Blackley was that the British working man was less 'provident' than his continental counterparts.12 The extent of friendly society ire can be seen in the Rev. J. Frome Wilkinson's attack on Blackley, The Blackley National Provident Insurance Scheme. A Protest and an Appeal (1887). Wilkinson showed that friendly society membership was much higher in Britain than on the continent, and strongly disputed Blackley's criticism of friendly society finances. Much more attuned to the realities of working-class life, Wilkinson argued that it was inconceivable that workers could save the amount of Blackley's deposit: wages were simply too low, or earnings might peak later in life, or (especially in rural areas) employers might victimise those who were known to be saving for the future. Wilkinson's book also contained some amusingly scurrilous comments on Blackley's pastoral competence (from local residents in King's Somborne), alleging that he was too often absent in London pursuing his political career to look after his parish properly. It is clear that Wilkinson's attack was symbolic of labour aristocrat resentment that a wealthy, sedentary, middle-class vicar could tar the entire working class with the same brush of contempt. Blackley's proposal aroused considerable discussion. He founded the National Providence League in 1880 (with John Lloyd as secretary, and a galaxy of establishment and religious figures - including the Earl of Shaftesbury - as members). In 1885, a House of Commons Select Committee on National Provident Insurance was appointed to investigate the scheme: it considered the matter for two years and then rejected it, because of the degree of compulsion that would have had to be involved, and because of its redistributive effect.13 The League gave assistance to Joseph Chamberlain in 1891 when he formed a committee of one hundred MPs sympathetic to the cause of pensions. But the inherent limitations of Blackley's scheme, plus the opposition of the friendly societies, made for little progress. By the 1880s, therefore, the idea of state old age pensions had hesitantly entered the arena of public debate. Three factors were there11

12 13

Blackley, 'National Insurance', pp. 835-7. This was a common accusation against the friendly societies but, as will be shown in a subsequent chapter, it was based upon an over-pessimistic definition of'insolvency'. W. L. Blackley, Thrift and Improvidence: a Wordfor Working Men (1884), p. 4. Report from the Select Committee on National Provident Insurance (1887).


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after to push it further into the realm of practical politics, against a background of worsening industrial prospects for the older worker: first, the interest and patronage of a leading politician; second, rigorous empirical evidence of the extent of poverty and destitution in old age; third, the backing of the newly emerging labour movement which, with its roots in the trade unions and other working-class organisations, was able to make the old age pensions agitation a mass movement. Joseph Chamberlain The first of these factors appeared in the person of Joseph Chamberlain, who - for all his ideological ambivalence, political trimming and occasional evasiveness - emerged as the Westminster politician who did most to keep the question alive in the 1890s. This was certainly the verdict of many contemporaries: for example, during the passage of the 1908 Bill, Lloyd George was gracious enough to call Chamberlain 'the statesman who, on the whole, has done more to popularise the question of old age pensions in this country than anyone else',14 and similar tributes poured forth from the press. In tracing the evolution of Joseph Chamberlain's interest in old age pensions, we must first take note of his background, for in many ways his own life mirrored the evolution of nineteenth century capitalism. Born on 8 July 1836, his father owned a boot and shoe business in Camberwell, South London, into which the young Joseph entered after attending University College School. A turning point in his life occurred in 1854, when Chamberlain's uncle, John Nettlefold, bought the UK rights to the manufacture of a newly invented tapered iron wood-screw. The 18-year-old Joseph went to work in this Birmingham-based family business, and suddenly found himself immersed in a very different and challenging commercial environment - one which epitomised the aggressive expansionism of the successful mid-nineteenth-century family firm. In order to survive, consolidate and expand, Nettlefolds had to out-perform its Birmingham rivals and break into highly competitive foreign markets. Possessed of considerable business acumen, the young Joseph Chamberlain proved to be a key factor in the firm's rapid expansion, and Nettlefolds inexorably swallowed up its less efficient local rivals - to the accompaniment of allegations about its ruthless business practices.15 The economic base of mid-nineteenth-century Birmingham consisted 14 15

HofCDeb., 4s, vol. CXC, 15 June 1908, col. 566. Peter T. Marsh, Joseph Chamberlain. Entrepreneur in Politics (1994), chs. 1 and 2; Dennis Judd, Radical Joe: A Life ofJoseph Chamberlain (1977), pp. 1-20.

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of numerous small manufacturing workshops, resulting in a strong tradition of craft unionism, a relatively prosperous labour aristocracy and considerable upward social mobility. As a result, a 'radical tradition' was strongly in evidence, with the Liberal Party dominating local politics. Joseph Chamberlain eagerly threw himself into this political cauldron, helping to found the National Education League in 1869 and becoming Mayor of Birmingham in 1873. For Chamberlain, therefore, the application of capitalist principles to local government became a blueprint for a national political strategy. By the time of his entry into parliament in 1876 as a Liberal (having largely sold out his business interests) his political philosophy consisted of three elements. The first was the urgent need to respond to the 'legitimate' political claims of the working man, partly because Chamberlain believed these to have an inherent social justice, but partly also because he presciently observed that the 1867 Reform Act had created a sea-change in the political culture. The threat of working-class political power was only weak and implicit in the 1870s, but by the following decade (especially after the 1884 Reform Act) it had become very real indeed with the advance of socialism. Chamberlain was convinced that the 'one nation' commonality of interests that flourished in the small workshops of Birmingham could be replicated on a national scale, by judicious reforms. Socialism could not be defeated by defensive posturing, or Gladstonian complacency: it had to be met with a new kind of populist radicalism. Personally, Chamberlain found himself out of sympathy with many of the new socialist leaders of the 1880s, and he could never shake off the conviction that socialism was a kind of political aberration that was fundamentally alien to the temperament and true interests of the British worker. A radical programme not at odds with the basic tenets of capitalism would thus easily pre-empt the socialist threat and meet the 'legitimate' political claims of the working man. Second, this wooing of the newly enfranchised working man was to be achieved by greater state intervention, very selectively applied, to alleviate the grosser inequalities of rampant free market capitalism and simultaneously improve the health and productivity of the workforce. An early favourite cause of Chamberlain's - as with other radical Liberals - was free, unsectarian state elementary education financed wholly out of the rates, and he was bitterly disappointed at the inadequacy of the 1870 Education Act. Finally, Chamberlain's conception of social reform was individualist, aiming to achieve the moral uplift of the working class into a petty capitalist mentality. Social reform could only be contemplated if it promised to inculcate thrift and self-reliance. As will be shown, this


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obsession with labour aristocrat values instantly rendered Chamberlain's reformist prescriptions largely irrelevant to the real poverty problem in late Victorian Britain. All in all, these three underpinnings made Chamberlain's radicalism limited, cautious and very soon outdated. As Peter Fraser observes, far from being a fundamental challenge to the laissez-faire system, Chamberlain's programme in fact represented the death throes of the old nineteenth-century politics.16 But for a time, in the political atmosphere of the 1870s and 1880s, Joseph Chamberlain appeared to be a man with ideas that were dangerously advanced. As several historians have observed, it is difficult from today's perspective to appreciate the nuanced complexities of late Victorian politics, and to understand the symbolism of, and the precise linkages between, issues like Church disestablishment, land reform, temperance, imperialism, parliamentary reform and education. In addition, historians have shared Beatrice Webb's frustration at trying to understand 'the mixed motive and the difficulties of a nature in which genuine enthusiasm and personal ambition are so curiously interwoven'.17 Even his most sympathetic (and most recent) biographer expresses some uncertainty over whether Chamberlain's espousal of old age pensions was genuine, or whether it was merely ca self-serving gesture'.18 It is only necessary to note that the Liberal Party at this time represented an ideological 'house of many mansions', a loose coalition of diverse interests united by loyalty to Gladstone's leadership. Until the end of the 1880s, the left wing of the Liberal Party offered a natural home for radicals and even a handful of working-class MPs (providing they did not ask too many questions about awkward issues such as the eight-hour day); to such radicals, as to the 'new Liberals' of a generation later, it seemed tantalisingly possible that the party could be transformed and modernised, and the power of the patrician Whigs broken. It was in this context that Chamberlain was urgently pressing his claims to be the natural leader of the radicals; and, having achieved ministerial status in 1880 as President of the Board of Trade, he evolved his 'radical programme' and presented it to the public in a series of speeches in 1885. For the 1885 general election campaign, the package was re-titled the 'unauthorised programme', and it swept Chamberlain and his fellow Liberals into power in all seven Birmingham seats. Essentially, the programme comprised the bolder Liberal nostrums of the 1880s - free elementary education, land reform, fiscal reform (involving a shift from indirect to direct taxation and a graduated 16

17

Peter Fraser, Joseph Chamberlain: Radicalism and Empire, 1868-1914 (1966), pp. xiv, 46. 18 Quoted in ibid., p. 120. Marsh, Chamberlain, p. 350.

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income tax), overhaul and strengthening of local government, further parliamentary reform and so on. 19 The first and most notorious expression of the 'radical programme' was the 'Doctrine of Ransom' speech, delivered to a working men's demonstration at Birmingham Town Hall on 5 January 1885. Chamberlain began by pointing out that massive changes had been ushered in by the 1884 Reform Act: three-fifths of the electorate were now working men, and the existing political parties would have to adjust to the fact that 'the centre of power has been shifted, and the old order is giving place to the new'. The urgent need for social reforms was placed in the context of one of the most controversial passages of nineteenth-century political rhetoric: But then I ask, what ransom will property pay for the security which it enjoys! What substitute will it find for the natural rights which have ceased to be recognised? Society is banded together in order to protect itself against the instincts of those of its members who would make very short work of private ownership if they were left alone.20 The furore that followed this speech paradoxically attested to the ambiguity of Chamberlain's message - an ambiguity intriguingly revealed by the use of the rhetorical exclamation mark to close the first sentence in the published collection of his speeches. (Most subsequent historians have replaced it with the incorrect and less subtle question mark.) In other words, commentators of all political complexions read into the speech whatever meaning they chose - in essence, whether Chamberlain was proposing social reform as a means of weakening the rights of private property, or as a means of ultimately strengthening them. Other 'radical programme' speeches of 1885 were built upon the four central social reforms of free education, land reform, local government reorganisation and tax reform, dressed up in rhetorical flourishes deploring the extremes of wealth and poverty. Prosperity had expanded in Britain 'in a degree and proportion for which the most sanguine of our predecessors was not in the slightest degree prepared. The accumulation of capital has been enormous'. Yet there was always a million of the population in receipt of poor relief, and another million on the verge of pauperism. However, although acknowledging the hardship of the very poorest - the urban casual poor and the agricultural labourers Chamberlain's reformist creativity could offer only moral exhortations appropriate to the labour aristocrat, and he could not bring himself to 19

20

C. H. D. Howard, 'Joseph Chamberlain and the "Unauthorised Programme"', English Historical Review, vol. 65, Oct. 1950, pp. 477, 4 8 4 - 5 . Charles W. Boyd (ed.), Mr. Chamberlain's Speeches, vol. I (1914), pp. 130-9.


69

advocate the redistribution of wealth necessary to finance effective reforms, since such 'confiscation' would 'destroy that security, and lessen that stimulus'.21 The cautiousness of Chamberlain's position thus revealed precisely those limitations on late Victorian liberalism that eventually alienated nascent socialists like Keir Hardie. The 'radical programme' speeches of the mid-1880s contained virtually no mention of poverty in old age (nor poverty among women), apart from the vague hope that 'an honest, decent and industrious man' should be able 'to lay aside something for sickness and old age'. 22 But we can see that a Blackley-type contributory pensions scheme - without the element of compulsion - would have fitted snugly into Chamberlain's reformist programme. However, such a proposal did appear several years later, after the turbulent political upheavals following the 1886 Home Rule Bill. For complex and still-debated reasons, Chamberlain led the opposition within the Liberal Party to the Bill, and subsequently split off with his supporters, attaching his loyalty to Lord Salisbury's Conservatives. In his new home, he was soon to become a restless political cuckoo. The first public advocacy of old age pensions by Joseph Chamberlain took place on 17 March 1891, when he spoke in favour of a Conservative and Unionist candidate at a by-election at Aston, following this up with several other public utterances in the same year.23 The context within which pensions were proposed was Chamberlain's 'labour programme' of 1891-2. Other elements in the programme were the extension of smallholdings, industrial accident insurance, stricter monitoring of friendly societies, reform of the Factory Acts and stronger housing legislation.24 But the centrepiece was old age pensions, and throughout 1891 and 1892, Chamberlain worked energetically to promote his new idea. (He had been impressed by the 1889 German pension scheme, though he disliked its Bismarckian compulsion.) Chamberlain studied the subject in depth, 'covering sheets and sheets of blue foolscap with notes in his minute handwriting', as his first biographer tells us; 25 he made several key speeches on the subject; he published articles (which even in cold print reveal something of the man's persuasiveness as a speaker); and, on 13 May 1891, he put together a voluntary parliamentary committee of MPs (chaired by himself) to draw up a scheme. There is no doubt 21 23

24 25

22 Ibid.,pp. 162-3, 169-70. Ibid.,p. 169. J. L. Garvin, The Life of Joseph Chamberlain (6 vols., 1933), vol. II: 1885-1895, p. 509; Joseph Chamberlain, A Political Memoir 1880-92 (1953 edn), pp. 294, 297. Garvin, Life, pp. 511 - 1 2 . Ibid., p . 513. These are to be found in the Joseph Chamberlain Papers, JC 6/3/4/7, University of Birmingham Library.

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that he more than any other politician kept the issue alive in political circles in the early 1890s. Chamberlain saw state pensions as a way of achieving a ' tight ened-up' Poor Law that would impose stricter discipline on the able-bodied male. In his abbreviated notes of evidence to the Aberdare Commission in 1893 he approved of the strict regimes of Poor Law administration, but feared that, if applied universally, 'any stereotyped system of stringency would inevitably produce a public scandal'. 'Already serious popular discontent in many districts', warned Chamberlain, continuing (with his own italics): Dangerous Parliamentary agitation, which might break down principles of the Poor Law, is certain, unless steps are taken to convince the electorate that no unnecessary harshness obtains, and that all cases of unmerited misfortune are fully and kindly considered. The popular sentiment is strongest in the case of old age pauperism, and hence any well-considered scheme of old age pensions will go far to strengthen hands of Poor Law authorities in dealing stringently with able-bodied, as well as with what may be called criminal pauperism.26

The political imperatives of the 1890s demanded a bold scheme that would outflank the new socialists. The year 1892 marked the first appearance of independent Labour MPs in the House of Commons (Keir Hardie, John Burns and Havelock Wilson); Chamberlain believed that this independent Labour representation was weak (as, indeed, it was in the 1890s), and could thus be defeated by judicious social reforms. The formation of the Independent Labour Party in 1893 caused him greater concern, however. Thus despite his contempt for most labour leaders, the progress made by socialism in the 1890s was acknowledged by Chamberlain in much more specific policy proposals alongside the lamentations about extremes of wealth and poverty. As Peter Hennock has observed, after the political turmoils of the 1886 Home Rule split, Chamberlain's need in the 1890s was to renew his contact with the working-class voter.27 Chamberlain identified four strategies that were currently being discussed. The first of these was a Bismarckian compulsory insurance scheme: this he rejected as too costly, limited to those in employment and an unwarranted infringement of personal liberty. Second, there was 'universal endowment', via tax-funded pensions as proposed by Charles Booth. Since this would cost something like £21,000,000 per annum, it was briskly dismissed by Chamberlain as 'outside the scope of practical 26

27

'Notes of Evidence by the Right H o n . J. Chamberlain, M.P.' ( 1 8 9 3 ) , Joseph Chamberlain Papers JC 6/3/4/8. Hennock, British Social Reform, p. 120.

Blackley3 Chamberlain and Booth

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polities'. The fourth proposal - more generous out-relief to the aged was also rejected, leaving Chamberlain supporting the third option: the stimulation of voluntary thrift, in order to assist provision already being made by the prudent and self-reliant sections of the working class.28 However, for all his painstaking preparation, the logic of Chamberlain's position on pensions was built upon a set of contradictions that reflected the limitations of radical liberalism, and its ultimate class loyalties. To begin with, he convincingly argued that it was impossible for most working class individuals to save over the course of the lifecycle. Unlike in the middle classes, working-class earning power diminished as old age approached, and thus 'when old age looms close at hand, and becomes a pressing reality, he [the labourer] finds that any power of saving he may ever have had has altogether departed'. Workers in their sixties found themselves moving down the labour market into lower and lower paid jobs, until forced out by ill-health. They then eked out a precarious existence, avoiding for as long as possible any contact with a deterrent and humiliating Poor Law. Their final months or years were spent in the degrading conditions of the workhouse. On the basis of 'Ritchie's return', 401,904 out of 1,372,601 persons aged 65+ were in receipt of poor relief in the year 1891-2 - nearly 30 per cent. Among the working class, the proportion was probably 1 in 2!/2.29 Since eightninths of paupers aged 65+ had never received poor relief up to the age of 60, destitution in old age could not be said to be caused by misconduct but was due 'entirely to the incapacity consequent on advancing years'.30 Now, in the changed political world of the 1890s, Chamberlain was less willing to accept the efficacy of moral exhortations. He argued that Charity Organisation Society-type arguments about old age poverty being the result of improvidence were rendered irrelevant by the realities of urban working-class life - 'a strike, a frost, illness or accident, makes them dependent at once upon others for their subsistence' - and by the actuarial odds that were stacked against such prudence: To provide at twenty-five for an annuity of 5s a week at sixty-five would cost in the Post Office £44 16s for males and £51 18s lid for females. The annual premium payablefromtwenty-five to sixty-five for the same pension would be £1 11s lOd and £2 0s Id respectively. How can a labourer with ten shillings a week or a workman with less provide these sums? 28

29

30

Joseph Chamberlain, 'The Labour Question', Nineteenth Century, N o . 89, Nov. 1892, pp. 6 9 9 - 7 0 2 . Joseph Chamberlain, 'Old-Age Pensions and Friendly Societies', The National Review, no. 143, Jan. 1895, pp. 5 9 2 - 6 1 5 . Chamberlain, 'Labour Question', p. 698.

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Chamberlain recognised that, even among the more prosperous of the working class, there was a motivational problem in insuring against 'so uncertain and distant a result' as old age - unlike sickness, which was always present in people's imaginations. But this apparently rational calculation did not accord with reality: recent life-tables showed that survival rates from early adulthood to old age were in fact quite good: the proportion of 25-year-olds who survived to the age of 65 was 45 per cent in the case of men and 52 per cent in the case of women. Chamberlain thus acknowledged that Booth's universal, tax-funded scheme was 'logically defensible',31 and at times he almost seemed to be offering a 'citizenship' justification for pensions as of right for 'the veterans of industry', in rhetoric that evoked his 'ransom' speeches of the previous decade: The industrious poor have really some claim on the society that they have served and on the state as its representative. After a life of unremitting toil at a remuneration which has barely sufficed for daily wants, they ought not to be compelled to receive their subsistence at the cost of their self- respect.32 But in the end Chamberlain could not bring himself to approve of a scheme like Booth's that would require £21,000,000 to be raised in taxation. Even as late as 1903, he was declaring that 'the promise of universal pensions to everyone, without reference to previous character, would be the greatest blow ever struck at thrift in this country'.33 Hence for a long time his only envisaged option was a voluntary, contributory insurance scheme. He was remarkably naive on the possibility of the low-paid paying the necessary lump-sum deposit to start such a scheme, suggesting that 'in very many cases employers and friends, and charitable people, would gladly assist the insurer to commence his deposit, and that a great deal more might be expected from employers of labour and others in this direction.'34 Chamberlain was well aware, from having studied Booth's arguments, that such a scheme would do nothing for the most poverty-stricken elderly citizens who either could not afford contributions or who had irregular labour market records (in particular, casual labourers and women). But somewhat brutally he dismissed the criticism that his scheme would leave untouched 'the very poor or the submerged tenth' with the response that these classes of people were unlikely to survive to the age of 65. 35 He conceded that the majority of old age paupers were women; yet women were 'very seldom intempe31 33 34

35

32 Ibid., pp. 7 3 6 , 7 3 3 . Ibid., pp. 7 2 7 - 8 . Quoted in Fraser, Chamberlain, p. 2 3 5 . Royal Commission on the Aged Poor, 1 8 9 5 , vol. II, C - 7 6 8 4 - I , Minutes p. 6 6 5 . Chamberlain, 'The Labour Question', p. 7 0 1 .

of

Evidence,


73

rate', and were 'persons who by the very necessity of their lives are in the majority of cases almost precluded from saving'. But the especial and serious problem of feminised poverty was never properly confronted.36 Like Blackley, Chamberlain seems to have been primarily concerned with the remoralisation of the male breadwinner via a pension scheme that would encourage him to save when young;37 at times, this aim seemed more important to him than relieving poverty in old age. Another problem never fully resolved was the role of the friendly societies. Given their potential political power, they had to be incorporated as the operating medium of Chamberlain's proposed scheme and he did his best to assuage their fears by arguing that their current reluctance to provide old age pensions for their members was damaging their reputations. Yet at the same time, he repeatedly commented on their financial difficulties arising from increased sickness benefit claims, thus implying that they would be precarious and unreliable administrative agencies.38 Chamberlain's practical proposals received most cogent expression in the three schemes suggested by the parliamentary committee he set up in 1891 and chaired. First of all, there was a scheme to be operated through the Post Office: having saved a total of £2 10s Od before the age of 25, and making an annual payment of 10s Od, a person would be eligible at the age of 65 for a pension of 5s Od per week. Second, a higher initial deposit (£5) and an annual contribution of £1 could provide the same level of pension, plus provision for widows and children in the case of death before 65 (or a rebate if the subscriber remained unmarried). In both these cases, the state would contribute a deposit equal in amount to that of the subscriber. Third, there could also be a scheme for women: a pension of 3s Od per week at age 65 could be funded from an initial deposit of £1 10s Od at age 25, and subsequent annual subscriptions of 8s 8d.39 The 'labour programme' was much discussed in the general election campaign of 1892 (which put the Liberals into power until 1895). Once a cabinet minister (as Colonial Secretary) in Lord Salisbury's 1895 Conservative government, Chamberlain's room for public campaigning was much more limited, but he attempted to press the cause of pensions from within the cabinet. He had ventured to persuade Lord Salisbury to 36

37

38

39

Royal Commission on the Aged Poor, vol. II, p. 659; see also Chamberlain, 'Old-Age Pensions and Friendly Societies', p. 598. Joseph Chamberlain, 'Old-Age Pensions', The National Review, no. 108, Feb. 1892, pp. 7 3 6 - 7 . For example: 'Old-Age Pensions', p. 729; 'Old-Age Pensions and Friendly Societies', pp. 592, 6 3 9 - 2 . 'Old-Age Pensions and Friendly Societies', p. 611.

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include Chamberlainite social reforms in the party's 1895 election manifesto (via the long 'Memorandum of a Programme for Social Reform' of 20 October 1894, which warned of the political threat of socialism), but the latter did nothing. As we shall see, Chamberlain also served on the 1893-5 Royal (Aberdare) Commission on the Aged Poor, giving evidence to it and even producing a minority report of his own in 1895. He was instrumental in appointing the Rothschild Committee and, according to his biographer, was angry at the committee's negative report of 1898. On 24 April 1899, he issued a promise in parliament that the government would introduce some form of legislation on old age pensions before they left office, and followed this up a month later with the appointment of the Select Committee of MPs under Henry Chaplin.40 He also piloted the 1897 Workmen's Compensation Act through parliament. However, it was difficult for him to get old age pensions discussed in a cabinet whose members considered the whole idea 'socialistic'. Despite some sympathetic noises, Lord Salisbury was always careful to distance himself from his colleague's more radical proposals. On the publication of the Chaplin Report in July 1899 Chamberlain made a public commitment to implement its recommendations, but the outbreak of the Boer War in October radically altered the political and fiscal situation, absorbing his and the cabinet's attention. Nevertheless, on 17 November 1899 - during a lull in the South African crisis - Chamberlain did try to secure cabinet agreement for two pension schemes. The first was non-contributory, targeted on a person aged 65 and over 'unable without assistance to maintain himself by his labour', and offered pensions of no more than 5s Od per week to those who had not received Poor Law relief in the past twenty years; the cost was to be borne by the local rates, supplemented by Treasury grants totalling £2,000,000 to £3,000,000 per annum. The second was limited to those who had contributed to a friendly society for at least twenty years, or to those few in number who had availed themselves of the Post Office contributory scheme.41 There remained, of course, the crucial problem of how to finance a pension scheme in a way that would not open the way to demands for a universal, tax-funded scheme. Even his voluntary insurance scheme needed a state subvention of at least £9,000,000 per annum, which Chamberlain refused to contemplate from raised taxes. The problem was that a new source of revenue had to be found. The ingenious 40 41

Garvin, Life, vol. Ill, pp. 6 2 5 - 6 . Memorandum by Joseph Chamberlain, 'Aged Poor', 17 Nov. 1899, Joseph Chamberlain Papers JC 6/3/4/14.


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solution was a tax on foreign corn, and by the close of the 1890s Chamberlain was formulating a policy of imperial preference and tariff reform which, he hoped, could form the basis for policy alternatives to socialism. Distracted by the Boer War, however, Chamberlain could only return to the subject of pensions in 1903 - by which time the initiative had been wrested from his hands by socialists. He was aghast at their insistence that state pensions should be universal and taxfunded. Inexorably, Chamberlain's pension proposals began to get bogged down in the question of funding, and became lost in the wider debate over free trade versus protection. By his tariff reform campaign of 1903, he was to split his own party a second time.42 Chamberlain was felled by a stroke in July 1906, and this effectively removed him from national politics; but his ideas had become passe well before then - even by the time he presented his pension scheme in 1891. As Richard Jay observes, Chamberlain found his scheme liked by nobody: conservatives believed it to be too radical, socialists objected to its Gladstonian fiscal ethos, and the friendly societies remained suspicious.43 In particular, from the mid-1890s onwards the labour movement poured increasing scorn upon Chamberlain. The delays surrounding the Rothschild and Chaplin Reports struck them as no more than cynical procrastination, and to them he appeared opportunistic and merely reactive: for example, F. H. Stead pointed out that the Chaplin Committee was appointed one month after an old age pensions conference sponsored by the National Committee of Organised Labour was held in Chamberlain's home territory of Birmingham.44 Possessed of highly developed political antennae, Chamberlain tried to steer a cautious way through these rival positions. But his scheme was from the beginning flawed by one inherent logical contradiction: it justified itself on the extent of old age poverty, yet was designed to reward only the labour aristocrat who, of all the working class, was least likely to suffer poverty in old age. Like so much late nineteenth-century liberalism, Chamberlain's scheme was too little, too late. By the late 1890s, he found himself being overtaken by those very socialists against whom, two decades earlier, he had uttered his Cassandra-like warnings.

42 43 44

Fraser, Joseph Chamberlain, pp. 2 3 5 - 7 . Richard Jay, Joseph Chamberlain: A Political Study (1981), p. 178. Francis Herbert Stead, How Old Age Pensions Began to Be (c. 1910), pp. 5 2 - 3 ; for labour hostility, see Trades Union Congress Parliamentary Committee pamphlets, Mr. Chamberlain's Unredeemed Pledges (1903) and Mr. Chamberlain's Modern Fallacies (c.

1904).

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Charles Booth Blackley's claim as the original inspiration of the old age pensions campaign owes more to the apposite timing of his proposal than to anything else. Chamberlain launched the pensions question on its political trajectory. But the most systematic empirical case came from a third figure - the pioneer poverty investigator Charles Booth. Booth was born on 30 November 1840, and died on 16 November 1916. His family background was one of financial security - his father was a prosperous corn merchant - and in the 1860s Booth founded his own shipping firm in partnership with his brother Alfred. In his youth, Charles Booth had been a radical (for example, he joined the National Education League), but he thereafter lapsed into an idiosyncratically conservative position; he was to remain somewhat disillusioned with party politics for the rest of his life, and had the knack of getting on personally with those whose views he did not share (such as Octavia Hill, H. M. Hyndman or Tom Mann). Most remarkable of all was the way that this conservative found himself a hero among socialists in the late 1890s, because of his espousal of universal, non-contributory old age pensions. The precise reasons why Booth decided to investigate poverty in the 1880s have been debated by historians. The Simeys' rather misleading view that Booth was spurred on by a claim by H. M. Hyndman's Marxist organisation, the Social Democratic Federation, that onequarter of the population of London lived in poverty has now been convincingly refuted.45 Like many eminent Victorians, Booth suffered periods of ill-health, self-doubt and melancholia, and it may be that there was an element of personal therapy in his compulsively detailed social survey work. In modern parlance, Booth was a 'workaholic'. He devoted long hours to his business, and enjoyed nothing better than writing up dense empirical publications like The Aged Poor in England and Wales (1894), obsessively quantifying social problems to the second decimal place. Again, there is something in explanations which stress Booth's interest in both Comtean positivism and new business methods (such as double-entry book-keeping); allied to a long-standing family interest in social issues, this excited his curiosity about the measurement 45

T. S. and M. B. Simey, Charles Booth, Social Scientist (I960), pp. 68-70; Peter Hennock 'Poverty and Social Theory: The Experience of the Eighteen-Eighties', Social History, no. 1, Jan. 1976, pp. 67-91; Rosemary O'Day and David Englander, Mr Charles Booth's Inquiry. Life and Labour of the People in London Reconsidered (1993), pp. 27-31; Englander and O'Day 'Introduction' in Englander and O'Day (eds.), Retrieved Riches: Social Investigation in Britain 1840-1914 (1995).


77

of poverty and social problems, in which existing official 'blue books' were deficient. However, the most likely explanation is also the simplest. As a thoughtful capitalist, Booth was well aware from the turbulent events of the 1870s and the 1880s that new forces were at work in British society. The rise of socialism and unskilled trade unionism, the extension of democracy, the shift to what he called the 'new system' of larger industrial units, and all the other interlocking factors (outlined in the previous chapter) created the potential for a huge social and political upheaval. Significantly, Booth began his poverty investigation just about the time of the great demonstrations by the unemployed in London in 1886 and 1887. By the mid-1880s, he was involved with the clique of middle class social investigators and politicians in London who were concerned with the 'condition of England question': Rosemary O'Day and David Englander have shown how well 'networked' Booth was in the social politics of the metropolis, and from this myriad of contacts he became fully conversant with all the prevailing issues.46 Not surprisingly, his writings contain frequent anxious passages on the need to forge a synthesis between 'individualism' and 'socialism' or 'collectivism'. Booth first became interested in old age pensions in 1891, the year in which Chamberlain began publicising his scheme. His first public advocacy of pensions was on 15 December of that year, when he presented a paper on 'Enumeration and Classification of Paupers, and State Pensions for the Aged' to the Royal Statistical Society.47 According to one account, the paper received a very hostile reception from the audience: one witness called it a 'startling suggestion'. So intense was the discussion that a continuation meeting was held one week later, so that there could be time for more debate. In the intervening week, there were many attacks on Booth's idea. 48 Likewise, the memoir by Booth's wife records that 'not a voice was raised in favour of the proposal' at the second meeting, which was held in a thick, gloomy London fog that rolled into the hall and at times obscured the discussants. 49 However, it seems likely that there is an element of Booth-worship in both of these accounts, which seek to play up the daring originality of his proposal. With characteristic frankness, Booth himself acknowledged in his paper that several other pension proposals had preceded his (for example, by the National Providence League and by the Poor Law 46 47

48

49

O'Day and Englander, Booth's Inquiry, pp. 2 9 - 3 1 . Charles Booth, 'Enumeration and Classification of Paupers, and State Pensions for the Aged', Journal of the Royal Statistical Society, vol. 54, pt. 4, Dec. 1891, pp. 6 0 0 - 4 1 . Belinda Norman-Butler, Victorian Aspirations. The Life and Labour of Charles and Mary Booth (1972), p. 119. Mary Catherine Booth, Charles Booth, a Memoir (1918), p. 23.

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Reform Association). As we have seen, Blackley's scheme had been investigated by a House of Commons Select Committee in the mid18808, the German pension system had been introduced in 1889 and the Danish in 1891, and public discussion was growing. Joseph Chamberlain had launched his pensions proposal into the political world some nine months earlier, and considered that, by 1891, the whole issue was 'ripening' enough to be publicly acceptable.50 Again, the transcript of the discussion of Booth's paper (published in the Journal of the Royal Statistical Society) shows that a lively, critical discussion took place nothing more than any speaker to the Society would have expected from a well-informed audience of strong-minded people.51 What made Booth rather unusual is that, although a conservative in social and political matters, he realised from the very beginning that only a tax-funded, non-contributory state pension scheme - highly redistributive from rich to poor, and from men to women - would truly alleviate old age poverty. This gave his pension proposal a radical flavour, and was to throw him into the company of socialists in the late 1890s. But Booth was emphatically no socialist. The radical nature of his proposal reflected the urgency of the problem as he perceived it. Thus we need to probe more deeply to find out Booth's underlying motives. Like the socialists of the 1890s, Booth sought the universal 'endowment' of old age and used the language of rights to argue that the pension was a badge of citizenship. Even more striking was Booth's immediate realisation that poverty in old age was essentially a woman's problem: hence contributory schemes were a complete irrelevance. He wrote: It is held that those who have worked for a lifetime have a claim to something more than social charity, and however this argument may be regarded as to men, it has considerable force with respect to women, who have often spent lives of the most active and invaluable citizenship without ever having the smallest opportunity for saving.52 Tax-funded old age pensions would be redistributive to the poor on both class and gender lines, argued Booth: 'These arguments acquire double force when we consider how very large a proportion of the destitute old are women.'53 He pointed out that the overall ratio of 50

51

52

53

Chamberlain to Rev. W. H. Higgins, 16 May 1891, Joseph Chamberlain Papers, JC 6/ 3/4/4. 'Discussion on Mr. Booth's Paper', Journal of the Royal Statistical Society, vol. 55, pt. 1, March 1892, pp. 5 6 - 7 9 . Charles Booth, Pauperism, a Picture; And the Endowment of Old Age, an Argument (1892), p. 168. Ibid., p. 198.


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women to men aged over 65 on Poor Law relief was 176:100. (Women greatly outnumbered men in the case of outdoor relief, but there were more men than women in workhouses, reflecting both differing labour market status and the prevailing view that older men were less able to look after themselves.) Booth realised that it was utterly impossible for most of the working class to save adequately for old age. His researches told him how desperately most aged workers hung on to jobs rather than applying for Poor Law relief. Likewise, he quickly realised the impossibility of deciding 'deservingness' from the scraps of evidence of an old person's past life. A case can also be made for arguing that Booth's intellectual honesty forced him to acknowledge the incontrovertible power of his empirical evidence. 'Old age stands out plainly as the prevailing cause of pauperism after 65', he declared firmly in The Aged Poor in England and Wales.54" His detailed study of several London workhouses showed that in Stepney it was a principal cause in 32.8 per cent of cases of pauperism; and in St Pancras, 23.4 per cent of cases. Booth made telling use of Burt's and Ritchie's returns (see previous chapter), which revealed the progressive rise in the rate of pauperism in old age. In his evidence to the 1905-9 Royal Commission on the Poor Laws, he pointed out that fully half of all recipients of outdoor relief were aged 60+ and, of these, three-quarters were women.55 Booth concluded: 'When we consider how many of the poor are old, we cannot escape the conclusion that poverty is essentially a trouble of old age.'56 However, Booth was emphatically not interested in old age poverty for its own sake. Instead, old age poverty was a 'problem' in so far as it prevented the Poor Law being tightened up and restored to the punitive regime intended by the reformers of 1834. He was thus entirely in accord with the Local Government Board's 'crusade against outdoor relief and enthusiastically supported the strict Charity Organisation Society-influenced regimes in Poor Law Unions such as Bradfield, Brixworth and Whitechapel.57 With the aged poor removed, outdoor relief could be abolished and workhouses made more punitive; the full panoply of deterrence could be directed at the able-bodied male, whose industrial behaviour was the key to the revitalisation of British capitalism. Hence Booth approvingly cited examples of strict Poor Law Unions, which had produced 'marvellous' results. But the problem with past examples of strict discipline was that they had depended upon the 54 56 57

55 B o o t h , The Aged Poor, p . 5 4 . Charles B o o t h , Poor Law Reform ( 1 9 1 0 ) , p . 3 7 . Booth, Pauperism, a Picture, p. 148. Evidence b y B o o t h , Royal Commission on the Aged Poor, 1 8 9 5 , vol. I l l , C - 7 6 8 4 - I I ,

Minutes of Evidence, p. 575.

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energy of one particular reforming individual on a local Board of Guardians; when that great administrator left, the Guardians reverted to laxness. What was needed was a new policy not dependent upon the whim of an individual, but upon a foolproof system - the Holy Grail sought by the reformers of 1834. 58 Booth thus argued: If we are to reduce poor relief everywhere . . . it can only be by first simplifying the problem with which the Guardians generally have to deal, and by then putting some pressure on them calculated to exercise a steady influence in the required direction. Both simplification and pressure, as I shall attempt to show, may be found in the endowment of old age, and the result should be the entire abolition of out-relief within measurable time.

'There must be no mixing of pensions and poor relief, argued Booth, vehemently opposing the alternative of more generous outdoor relief (perhaps as of right) to the aged as Very dangerous, far more so and more insidious in its dangers than would be any general pension system. It is a proposal without principle or finality, based solely on sentiment.' With outdoor relief abolished and state pensions introduced, the Poor Law could operate properly: If such a policy could be pursued throughout the land - if the administrative citadel were no longer undermined by old age, nor betrayed by the daily demands of the sick, nor assaulted in the name of the fatherless and the widow the change might be very great. Independence, self-respect, and prudence would be encouraged, and duty and charity take each its proper place.59 Workhouses would henceforth be occupied only by the able-bodied, and based upon 'progressive discipline; which would bring with it more laborious work and less comfort'.60 Thus when Booth described his aim as preventing pauperism 'by catching the poor on the downward grade before they have dissipated everything; acting exactly in the opposite way from out-relief, which insists upon the dissipation of savings before anything can be done', 61 the prime object of his concern was the sanctity of the workhouse as an agency of social discipline, and not the poverty of old people. The ideal of a strict workhouse regime was impossible to achieve if it had to apply to non able-bodied categories like the aged, the infirm, widows, children and so on. To be sure, Booth at times appeared to be arguing in a rather elliptical fashion from the point of view of the aged pauper, as when he said of workhouses that decent old people who found refuge there 'cannot but be associated with very questionable companions'.62 But his 58 59 60 62

Mary Catherine Booth, Charles Booth, p. 150. Booth, Pauperism, a Picture, pp. 179, 207, 210, 212. 61 Booth, Poor Law Reform, p. 41. Booth, Old Age Pensions, p. 50. Booth, Pauperism, a Picture, pp. 167-8.


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concern that workhouses were not appropriate places for old people was primarily a concern for the workhouse, not for the old person: a ratcheteffect liberalisation process in workhouse regimes was taking place because old people were 'unsuitable' inmates. For Booth, the problem was that 'pauperisation' had become clouded in meaning by being applied to the non able-bodied, especially the aged. His obsessive search for 'facts' was directed at this goal of reinvesting it with a clear operational utility so that it could be applied effectively to the young able-bodied. Hence he argued that a 'twelvemonth count' of old age pauperism was better than a 'one-day count' because 'our object is to estimate the extent of pauper degeneration': to measure repeated spells on relief by such a longitudinal analysis was essential because 'to ask more often is more demoralising than to receive continuously'.63 A clear distinction between the 'respectable' and the 'pauperised' needed to be re-established. In the absence of a state pension scheme, many 'respectables' had to apply for Poor Law relief in old age, thus making this distinction impossible. However, with a state pension scheme in place, the concept of 'pauperisation' would be rehabilitated. By contrast, conservatives - less far-sighted than Booth - argued that state old age pensions would merely pauperise every old person.64 Booth frequently held a virtually hereditarian view of pauperism. Like many later eugenists, he argued that pauperism could be an incipient condition which would lie dormant for much of the life course. Some individuals were 'would-be paupers' well before applying for Poor Law relief: the personal stories of pauperism he collected in Stepney showed the extent to which 'some who are very much pauperised in their character and surroundings may go without relief for several years together, and the same stories show how with old age there is a gradual settling down into permanent pauperism'. The problem of identifying the 'pauperised' was rendered even more problematic because of the difficulty of ascertaining the precise cause of old age poverty: deciding whether old age alone was a 'direct' or an 'indirect' cause was vexatious because old age aggravated other causes of poverty.65 (This was a critical comment made by C. S. Loch in the discussion after Booth's Royal Statistical Society paper on pensions.) Clearly, Booth believed that moral failings would reveal themselves as causes of pauperism much more often, if only the investigative tools were better: 'Sickness and old 63 64

65

Booth, The Aged Poor, p. 9. E v i d e n c e b y T h o m a s M a c k a y (Charity Organisation Society), Royal Commission Aged Poor, vol. II, p . 5 0 4 . B o o t h , The Aged Poor, p p . 1 3 2 - 3 , 164.

on the

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age are causes so overwhelming and obvious as to draw a curtain over what has gone before; behind that curtain we doubtless might find some whose previous life offered another explanation of their condition.'66 In short, it was intrinsically impossible to peer into an old person's past life and decide 'deservingness'. Octavia Hill expressed the problem eloquently, when asked how one might gather evidence on the needs of the poor in old age: I could only think that it could be accurately obtained from people who had lived for years among them. You see it is a very different thing from getting evidence of the present condition of affairs. If you attempted to get the evidence of outsiders, they can only go by hearsay, and of course the causes of pauperism are perhaps far back in the years that are long ago gone. The man has lost his opportunity of better work by bad temper when he was 20, and you meet him at 80, perhaps.67

This was an intensely frustrating situation for those who believed that moral failings were a major cause of poverty. Pauperism as an objective condition was difficult to define as long as Boards of Guardians, faced with the problem of relieving the aged, operated outdoor relief practices that varied so widely between strictness and laxness. In The Aged Poor in England and Wales, Booth pointed out that the rate of pauperism in old age could vary tenfold between Unions: the lowest rate discovered by him was 8 per cent, in the two Unions of Castle Ward and Brixwell; the highest was 84 per cent, in St Saviour's in Southwark. He believed that such variations correlated with local conditions only to a limited extent. Thus after surveying these wide variations he concluded that 'these facts are to a great extent such as elude analysis and defy summary treatment'. Even under similar social conditions, there were 'wide differences in the extent of pauperism, and very little to account for these differences'.68 If analysis was impossible, then so was effective Poor Law policy. Fine-tuning would achieve nothing beneficial. However, a radical solution in the form of state old age pensions would remedy the situation by lifting the 'respectables' off the Poor Law, revealing the incorrigible residue of 'pauperised' to be easily identified. We can see, therefore, that Booth's analysis of old age poverty was located firmly in the context of the problem of the young able-bodied male, and the need to rehabilitate the concept of 'pauperisation'. That this is not more often stressed is possibly due to the ostensibly radical nature of his pension proposal, and the paradox that a scheme so driven 66 67 68

Ibid., p. 12. E v i d e n c e b y Octavia Hill, Royal Commission on the Aged Poor, vol. I l l , p . 5 5 3 . B o o t h , The Aged Poor, p p . 4 1 9 - 2 0 .


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by conservative motives was eagerly taken up by socialists. From the outset, Booth criticised Blackley's and Chamberlain's contributory schemes as both inadequate and involving unacceptable levels of compulsion. To be distinct from Poor Law relief (and hence restore the Poor Law to virtue), state old age pensions would have to be universal, and non-stigmatising; if universal, they would have to be compulsory; if compulsory, they would have to be tax-funded (Booth suggested 3d on income tax, plus Vid per lb. import duty on sugar: together they would yield £12,000,000). There could be no gradual build-up to full rights: the scheme would have to provide full benefits immediately. Sixty-five would be the most appropriate qualifying age, as there was general agreement that that was when 'active working life' ended and it was 'the age at which pauperism increases by leaps and bounds'. Booth initially suggested an old age pension of 5s Od per week to the 1,323,000 men and women in England and Wales aged 65+ in 1891, at a total cost of £17,000,000 per annum. Later there were suggestions for other alternatives such as 7s Od per week for all from the age of 70 (£20,684,082 total cost), 4s Od from 65 (£19,513,009), or 2s 6d from 60 (£19,202,560).69 In several interesting respects, Booth was highly prescient. He made a tentative stab at measuring the health status of the aged.70 His advocacy of state pensions partly rested upon the newly-emerging 'underconsumptionist' economic arguments of the 1890s.71 He discussed what would now be called the issue of 'generational equity' - whether the young (some of whom would not survive to old age) should be expected to pay for the old in a tax-funded, pay-as-you-go scheme. He frankly confronted the central issue that, if a scheme were to be effective (for example, in tackling old age poverty immediately), it would necessitate wealth redistribution from rich to poor via tax funding. Booth estimated that the 'break-even point' would be an annual household income of about £150; above that, there would be redistribution, and below it there would be net gain. He was aware that pension costs would rise as the population aged. And he raised the question of the effect of pensions on wages (an issue that was to grow in importance in the future): this was 'a very serious charge and one which demands very serious consideration and discussion'. Somewhat optimistically, Booth denied that the pension would encourage employers to cut the wages of older 69 70 71

Ibid., p p . 196, 2 2 7 , 2 3 5 - 6 ; B o o t h , Old Age Pensions, p . 5 3 . Booth, The Aged Poor,?. 3 5 5 . A l o n K a d i s h , ' C h a r l e s B o o t h as a n U n d e r c o n s u m p t i o n i s t E c o n o m i s t ' , in E n g l a n d e r a n d O ' D a y , Retrieved Riches, p p . 8 9 - 1 0 2 .

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workers: instead, he argued, pensioned workers would be able to hold out for higher levels of pay.72 Booth's motives in campaigning for a universal state old age pension system were thus complex and oblique. They were rooted in his political conservatism: pensions were really an adjunct to, and necessary condition for, the reform of the Poor Law to render it more punitive and harsh in dealing with young able-bodied males. But Booth had opened up a hornet's nest, for the radical, redistributive implications of his proposal made it increasingly popular with socialists in the 1890s. From them was to come a very different justification for a state pension scheme. 72

Speech by Booth, Old Age Pensions. Verbatim Report of the Proceedings at a Conference,

1899 (1899), p. 7.

The opposition of the Charity Organisation Society

Until the mid-1890s, the campaign for old age pensions was a broadly conservative movement - part of a raft of proposals aimed at restoring the Poor Law to administrative virtue and imposing harsher discipline upon the able-bodied male; its conservatism was also evident in the unwillingness of pension advocates (Booth excepted) to contemplate anything other than contributory insurance funding. However, from the mid-1890s onwards, the labour movement eagerly and gratefully took up the issue of old age pensions and turned it into something very different. Booth was the first to cross the ideological Rubicon and support the labour demand for non-contributory, universal pensions; others (such as Canon Barnett) followed him. But until the mid-1890s the old age pensions movement was hampered by several enormous obstacles. As we have seen, the inherent limitations of all contributory insurance schemes was one. Another was the perceived impossibility, in the political world of Gladstone and Salisbury, of raising the public finance necessary to fund even a limited contributory scheme like Chamberlain's. A third important obstacle was the opposition of two interest groups - the Charity Organisation Society and the working-class friendly societies. For very different reasons, these two powerful vested interests mounted a strong rearguard action against state old age pensions. By the end of the 1890s, however, the opposition of each was waning, and the initiative had been seized by socialists who viewed pensions as a piece of radical social policy. This chapter will consider the first of these interest groups. The origins of the Charity Organisation Society The founding of the Charity Organisation Society (COS) in 1869 has been ably analysed by a number of writers, and needs no more than a brief mention here.1 It represented, on the one hand, yet another 1

Most notably by Charles Loch Mowat, The Charity Organisation Society 1869-1913. Its

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chapter in the evolution of neo-Malthusianism and classical economics as applied to welfare - an intellectual tradition stretching back to Thomas Hobbes, David Ricardo, Adam Smith, the 1834 Poor Law Report and practitioners such as Thomas Chalmers in Glasgow in the 1820s and William Rathbone in Liverpool in the 1860s, finally reappearing on the British political agenda in the 1980s and 1990s. More specifically, however, the COS grew out of upper middle-class fears over a series of inter-connected political and economic crises in the late 1860s. At the same time, structural changes in the labour markets and the social ecology of all large cities (particularly London) were worsening the lot of the casual labourers, causing a widening polarisation between rich and poor, temporarily increasing the rate of pauperism, and renewing fears of the 'dangerous classes' (manifested in concerns over the way that the maladministration of existing City of London charities had allegedly spawned a class of professional beggars). As Stedman Jones has put it, the founders of the COS perceived themselves as a re-established 'resident gentry', restoring the balance of class forces.2 The founding of the COS took place in April 1869. A few months later there was issued the important circular to Boards of Guardians by the President of the central Poor Law Board, George Goschen, instructing them to co-operate more fully with local charities: the Poor Law was to relieve only the 'undeserving' in workhouses; private charity would relieve the 'deserving'. In this way, outdoor relief could be reduced and perhaps eventually abolished. It is quite clear that the socially well-connected founders of the COS knew their way round the corridors of Victorian government: as Helen Bosanquet was later to admit of the 'Goschen Minute' of 20 November 1869, 'if this document was not actually drafted in the offices of the Society, it was nevertheless the direct outcome of its deliberations and conclusion'.3 The aim of the COS was thus to establish a vast network of control over the disbursement of all financial help to the poor and destitute. This was to be effected by the 'capture' of local Boards of Guardians: the COS initiated vigorous blood-curdling campaigns in key areas to try and persuade the extremely limited and middle-class local government electorate to vote in their members as Guardians, and they took full advantage of the fact that some Guardians could be nominated.

2

3

Ideas and Work (1961). A recent fine work is Robert Humphreys, Sin, Organised Charity and the Poor Law in Victorian England (1995). Gareth Stedman Jones, Outcast London. A Study in the Relationship Between Classes in Victorian Society (1971), pt. III. Helen Bosanquet, Social Work in London, 1869 to 1912. A History of the Charity Organisation Society (1914), p. 266.


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The COS ideology The ideology of the COS has been subjected to thorough analysis, and needs no more than a brief outline here. The Society boasted a number of adept publicists, who have left to posterity a full exposition of its philosophy: its energetic secretary between 1875 and 1913, Charles Stewart Loch; the neo-Malthusian Thomas Mackay (who wrote with especial wit and pungency); the housing reformer Octavia Hill (somewhat idiosyncratic, and rather on the fringes of the Society); and Helen and Bernard Bosanquet (the former capable of interesting and reflective analysis). According to its highly individualist philosophy, social problems were ethical in origin - the result of moral choices freely exercised by rationally calculating hedonistic individuals. Like the authors of the 1834 Poor Law Report, the COS ideologues made a clear analytical distinction between poverty and pauperism. The former was not a social problem: it was, instead, the inevitable outcome of those marked social inequalities that spurred individuals on to greater efforts at self-improvement, thus benefiting the community as a whole. Only if poverty had reached a state of abject destitution, and the individual was morally blameless, would the COS help. By contrast, pauperism and dependency were the great social and moral evils which would inexorably grow unless the conditions for receipt of Poor Law relief (in particular, outdoor relief) were made as unpleasant, punitive and stigmatising as possible. Pauperism was thus a degraded mentality^ or, in Thomas Mackay's medicalised metaphor, 'a disease requiring scientific treatment'.4 Hence C. S. Loch argued that 'our business should not be with the poor as such, but with those who are in distress or destitution or who have in them the seeds of pauperism'.5 Poverty was thus not economic, it was attitudinal: as that COS stalwart Albert Pell put it, 'it is not the amount which a man earns a week that is the measure of his condition, it is whether he has been so trained as to be able to live below his income.'6 Likewise, Thomas Mackay argued that 'human happiness and the right ordering of society' depended largely upon 'a recognition and acceptance of the doctrine of personal responsibility'; for this to happen, 'the spirit of dependence has to be exorcised'.7 If the inculcation of personal responsibility was the only answer to social problems, then 4 5 6

7

Thomas Mackay, Methods of Social Reform (1896), p. 37. C. S. Loch, Charity Organisation (1892), p. 12. Statement by Pell at the 1878 Central Poor Law Conference, quoted in a tribute to him, in Poor Law Conferences Held in the Year 1899-1900 (1900), p. xix. Mackay, Methods, pp. 9-10.

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clearly outdoor relief was potentially destructive of the whole fabric of society, since it fatally corrupted the recipient. In modern parlance, it set up a dysfunctional 'incentive structure'. To the COS leaders, each individual was unique, with a wholly personal set of wants and desires. Society was composed of competing individuals, and remedial intervention should be directed at the encouragement of this individuality. In this way, communities would be welded together into self-sustaining units. Social casework would thus be precisely tailored to an individual's especial circumstances, utilising the resources of family, friends and neighbours so that 'independence' and self-reliance would be encouraged: where money was given, it might be in the form of a loan rather than a potentially demoralising gift. Slowly, all outdoor relief would be abolished and replaced by scientific charity. All ideologies are contradictory, and the COS's was no exception. It is instructive to pause briefly and examine some of these contradictions, for they are highly relevant to its position on state pensions. The first was the clash between moralism and scientism. On the one hand, COS leaders frequently took a position on social issues that stressed the mystical, emotional and ultimately immeasurable quality of human relations. Most ordinary people, they argued, lived by feelings and emotions, and not by the tenets of Comtean positivism. This tendency was especially evident in Octavia Hill, whose digressions on social problems were anecdotal and impressionistic in the extreme - a tribute to her sentient nature and her conviction that human relations could not be quantified, they could only be felt. In a less mystical form, this position stemmed from the central tenet of neo-Malthusian classical economics that social analysis should start not from raw empirical data but from certain immutable laws of human psychology derived from carefully observed social behaviour - such as the pleasure/pain principle: empirical data were useful only in so far as they verified these laws. Hence Thomas Mackay observed approvingly that C. S. Loch's opinions of Poor Law issues took it as axiomatic that pauperism should be reduced: Loch's opinions have been arrived at independently of statistics. He has adopted the view of the Poor Law experts which is based on administrative experience, and on a careful analysis of human nature. Hitherto it has not been thought necessary to defend the position by elaborate statistics.8 Loch himself, when confronted by Charles Booth's dense empiricism in The Aged Poor in England and Wales, argued that the statistics there presented showed clearly 'the large play of personal motives and friendly 8

Ibid., pp. 223-4.


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and family feelings that make up the reality of most of our lives, and are in a sense important economic factors'.9 As we shall see, the traditionalist COS leaders poured sarcasm and scorn on Booth's statistics on old age pauperism, believing - with some justification - that Booth's was a spurious empiricism concealing political expediency. Yet, on the other hand, COS leaders were capable of engaging their opponents in convoluted statistical arguments, and were remarkably successful in this. C. S. Loch in particular showed no qualms in presenting elaborately empirical papers to expert audiences like the Royal Statistical Society. Likewise, COS activists argued that theirs was a dispassionate, 'scientific' charity, dependent upon 'method' and meticulous recording of applicants' circumstances through detailed casework. This combination of moralism and empirical analysis was very evident in the COS's case against state pensions. There were, too, intriguing gendered paradoxes in the Society's work. Most of the casework and visiting was performed by women; men ran the committees. 10 The Society's male figures, such as Bernard Bosanquet, seem to have found it awkward and embarrassing to encroach upon the domestic terrain of the working-class poor.11 The COS provided an invaluable training-ground for many upper middle-class women (such as Eleanor Rathbone) who later entered public life, and it stressed the importance of women in holding together the working-class family. But this was always as a dependant of a male breadwinner. The working-class woman's function was to ensure the efficient reproduction of the family: Helen Bosanquet argued that poverty was 'mainly a woman's problem', requiring 'a woman's remedy' of better domestic skills rather than higher male wages. 12 As we shall see, the marked feminisation of poverty in old age was attributed to the past failing of a male breadwinner. A final contradiction worth noting is the way that overt class motivation - manifested in quite explicit fears of working-class revolution and in welfare recipes that sought to impose draconian social controls on the able-bodied male - was contrasted by an emphasis on citizenship and the essential commonality of interest between classes. The COS provides us with one of the first uses of the concept of citizenship as applied to welfare. 'Bridge-building' between the social classes was a frequently 9

10 11

12

C. S. Loch, 'Mr. Charles Booth on the Aged Poor', Economic Journal, vol. 4, 1894, p. 468. Jane Lewis, Women and Social Action in Victorian and Edwardian Britain (1991), p. 10. A. M. MacBriar, An Edwardian Mixed Doubles: The Bosanquets versus the Webbs: A Study in British Social Policy 1890-1922 (1987), pp. 6-7. Helen Bosanquet, 'Physical Deterioration and the Poverty l i n e ' , Contemporary Review, vol. 85, Jan. 1904, p. 73.

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stated aim, and the COS's moral exhortations were infused with a rhetoric of reconciliation. However, the residuum of casual poor and the pauper class were ruthlessly excluded from this common citizenship. And the 'classless society' was to be achieved by the working class gazing upwards admiringly at the urban gentry. Wrote Helen Bosanquet: The best chance of permanent progress for any class is such a rise in its income as will enable it to emulate successfully the mode of life of the class just above it . . . It is probable that the worst cases of degradation from increase of income have been where the recipients have not been in contact with a superior class near enough to serve them as a guide.13 These and other contradictions made the COS philosophy quite complex, and it is thus important not to portray it in terms of caricature. A further complicating factor is that, from the 1890s onwards, there opened up serious ideological fissures within the Society as more liberal and politically astute members rebelled against the inflexibility of the 'old guard' leadership. Many of these 'liberals' had previously been enthusiasts for the Society's traditional values, but by the mid-1890s they were seeing those rigid values as less and less relevant to the changing needs of British capitalism and political culture (particularly with the advance of socialism in the 1890s). The central issue in this ideological split was old age pensions, and it will be explored in greater detail later in this chapter. Ultimately COS ideology was one of pure unfettered free market capitalism, dedicated to the defence of a social organisation in which private property was held by a tiny minority at the apex of the class structure and redistribution of wealth and income was to be minimised. It was a tribute to the COS's political backwardness that its leaders made no attempt to disguise this, even in the changed political culture of the 1890s. All forms of state intervention (notably the Poor Law) were anathema because they redistributed wealth from rich to poor; social casework would impose moral and material control over the most potentially dangerous section of the working class; the abolition of outdoor relief would lower wages, thus reducing the unit cost of labour; the reproduction of intact, internally controlled working-class families would provide the stability in which capital accumulation could best take place. Thus Thomas Mackay's verdict was that the Poor Law was a 'narcotic' on the 'natural thrift and acquisitive instincts of the poor'. 14 Welfare was to be provided not by redistribution from rich to poor, but by inter-generational transfers within the extended family: 13

14

Helen Bosanquet, The Strength of the People. A Study in Social Economics (1902),

pp. 96-7. Mackay, Methods, p. 24.


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Through the welding power of the family life the three generations form one homogenous whole, with identical interests; nowhere is there any sharp break dividing us from the past and future. Our welfare was at one with that of parents and grandparents, and is one with that of children and grandchildren.15

The creation of an 'inclusive', harmonious society was to be achieved not by enforced redistribution but by the slow growth of prosperity and the 'natural', organic development of private, self-help institutions such as the friendly societies: this would inexorably spread the ownership of private property to more and more citizens and would constitute 'the true socialisation of wealth'. Participation in the capital accumulation process - by hard work, saving and property ownership - would provide a defence against the easy temptations of democracy. By the 1890s, the older COS leaders greatly feared the extension of democracy. The nearhysteria with which they greeted the 1894 Local Government Act (which opened up the franchise for Boards of Guardians) was partly a tribute to their political backwardness, but it also arose from their feeling that, as yet, insufficient numbers of the working class were incorporated into the capitalist process. Thus Thomas Mackay feared that 'uninstructed public opinion' would force politicians to outbid each other with 'illusory electoral promises', creating the danger of 'a strong democratic government, animated by the prevalent spirit of philanthropic rapine, and officered, as seems inevitable, by wildcat politicians of all parties.'16 As the 1890s progressed, and socialism emerged as a viable political force, the class self-interest of the COS 'old guard' became more pronounced and their defence of private property became more explicit. Whereas the COS leaders had dominated the social debates of the 1870s and 1880s (their basic principles being in accord with what the vast majority of the middle classes believed), by the 1890s they began to panic at what they perceived as socialism's hidden agenda - an agenda that would first involve the introduction of expensive state social policies, then state control of all forms of economic activity (all would be 'servants of the state'), and finally the confiscation of wealth and private property. Hence Thomas Mackay, writing in the mid-1890s at the peak of the COS's internal crisis, protested against 'the absolute harmfulness of the collectivist principle, which lies at the root of the English Poor Law system'; the new proposals for extending this principle via more collectivist social policies 'amount in the aggregate to a policy of using taxation not as a means of providing for the public services, but as an 15 17

Bosanquet, The Strength, pp. 182-3. Ibid., p. 2.

16

Mackay, Methods, pp. 1 0 , 2 0 - 1 , 4 1 - 2 .

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instrument for redistributing wealth'.17 Likewise, Charles Percy saw the Poor Law, public health and state education as 'socialistic' in principle the thin end of a dangerous political wedge.18 'Under a complete system of socialism the whole population would be a kind of glorified paupers', warned J. St Loe Strachey, and C. S. Loch saw old age pensions as merely a prelude to 'socialistic' proposals for the regulation of wages by the state. 19

The case against old age pensions Bearing all this in mind, it is not hard to understand why the COS leaders were so opposed to state pensions. Their arguments operated on two levels: those based on cardinal principles of political economy; and those based upon a powerful and ingenious empirical case.20 COS leaders argued that the knowledge that a 'free' state pension awaited one at the end of a working life would fatally erode workingclass thrift, self-reliance and prudence. Relieved of the fear of a povertystricken and degraded old age spent in the workhouse, the feckless working-class man or woman would neglect to accumulate savings during his or her adult years. Even a contributory scheme, if organised by the state, would destroy independence. The 'natural' bonds of support from family, neighbours and community would wither; mutuality would thus be destroyed, and with it would go social stability. A vast section of the working class would be 'pauperised' by the grant of a pension over a certain (arbitrarily-chosen) age. Thus the concept of 'pauperisation' itself - so essential to maintaining social discipline and the work ethic - would lose its meaning. COS leaders were always deeply concerned about the continued existence of outdoor relief (though pointing with some satisfaction to its steady reduction); state pensions would be outdoor relief by another name, and would lead on to demands that more parts of the Poor Law should be liberalised perhaps leading to the ultimate nightmare of freely obtained outdoor relief for the unemployed young able-bodied. From this, it was but a short step to a complete socialist transformation of society. The cost of 17 18

19

20

Ibid., p. 2. Charles Percy, 'Old Age Pensions', Poor Law Conferences Held During the Year 1893 (1894), p. 45. J. St Loe Strachey, 'Introduction', in The Manufacture of Paupers, A Protest and a Policy (1907), p. 5; C. S. Loch, Chanty and Social Life (1910), p. 351. For an initial guide to sources used in the following section, and as a stimulus to ideas, I am indebted to an excellent article by J. H. Treble, 'The National Leadership of the Charity Organisation Society, Old Age Poverty and Old Age Pensions in Britain 1878-1908', Journal of the Scottish Labour History Society, no. 18, 1983, pp. 1 8 - 4 2 .


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universal, tax-funded pensions at the age of 65 was bad enough, involving a scale of income redistribution that was seen as confiscatory; what lay at the end of this political road was too awful to contemplate. 'There is no claim to relief less worthy of acceptance than the claim of indigent old age', argued The Charity Organisation Review in 1894, completely reversing the growing liberal orthodoxy that the aged should be treated differently from young able-bodied males.21 There was nothing special about old age: no logic determined that the age of 65 ushered in 'the estate of life to which state subsidy should begin', especially as the COS maintained that nearly half of old age pauperism commenced before the age of 65. If the discipline of economic independence was abandoned in the case of old age, then it would soon be abandoned at other points in the life course. 22 Interestingly, the COS put this principle into practice in their administration of the Poor Law in Whitechapel. Normally Boards of Guardians would take the age of 60 as the point at which a pauper would be classified as 'not able-bodied', but in Whitechapel each case was decided upon its merits, depending upon whether an applicant appeared capable of work. A fixed age definition would set up an incentive to deceive. Said William Vallance, clerk to the Whitechapel Board of Guardians: One man at 60 may be very aged and enfeebled and infirm; another man may be quite as capable of getting his living at 60 as he has been for some years. I should rather look with disfavour upon the age being fixed, inasmuch as it would offer an inducement to the paupers themselves to deceive as regards their age. You have to depend very largely upon their statements, but as it is, you can form your own judgement, looking at the man, or looking at the woman.23 Most venom was directed at the Booth pension proposals: these 'free and universal pensions' would be appallingly wasteful, would raise • taxation, would disturb investment and would 'add to our present pauperism a sort of hybrid and disguised pauperism'.24 But the Blackley and Chamberlain insurance-based schemes were also attacked as unrealistic, objectionable and impractical. They could only apply to the more prosperous sections of the working class, and these should be saving of their own accord. Thus Charles Fremantle said of the Chamberlain scheme, By it only the willing fish would be swept into the net, while the too numerous small fry anxious to elude the cast of the fisherman, whose especial object it 21 22

23 24

Editorial, Charity Organisation Review, vol. 10, no. 108, Jan. 1894, p. 40. Mackay, Methods, p. 193; 'Notes of the M o n t h ' , Charity Organisation Review, vol. 8, no. 88, April 1892, p. 143. Report of the Royal Commission on the Aged Poor, 1895, vol. I, C-7684, p. xi. 'Notes of the M o n t h ' , Charity Organisation Review, vol. 8, no. 85, Jan. 1892, p. 18.

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nevertheless is to secure them, are allowed to swim away at their ease in the sea of thriftlessness and prospective pauperism.25 Likewise, Thomas Mackay argued that all insurance pensions were pointless because so many of the poor would not save for old age (as the low take-up of Post Office deferred annuities showed). He claimed that only one out of every 1,023 friendly society members were aged paupers; this showed how thriftless were the vast majority of aged paupers.26 The idea of 'state-organised thrift' was a contradiction in terms, and would have dangerous consequences since it would only stimulate demands for universal, tax-funded pensions; a state subsidy to the friendly societies would disturb the natural development of workingclass saving, and would eventually put the societies under state control; all state-provided pensions would lower wages, as the pre-1834 'Speenhamland' allowance system had done; pensions of any kind would discourage filial support. A final interesting point of principle made by the COS related to family responsibilities: the fact that women outnumbered men in the aged pauper population demonstrated that the remedy for this 'feminisation of poverty' in old age lay in the encouragement of male breadwinners to make adequate provision (during their working years) for the old age of their spouses.27 Helen Bosanquet's conclusion was that 'The most important institution, then, for the maintenance of old age is the natural and legal provision made through the family; and this relation, as I have said, generally suffices, unless it is weakened by some external agency.'28

The empirical case These arguments of principle were often conveyed in repetitive assertion that was strident and formulaic. By contrast, the COS's empirical case was coolly and impeccably statistical, based upon several clever arguments. The first was that the overall rate of pauperism was declining. Thus nothing needed to be done, other than continuing with the slow, difficult and unspectacular work of remoralising the working-class. By this means, pauperism would in time be extinguished. We should note that, until the 1890s, the mood of the COS was highly optimistic, since 25

26

27

28

Charles Fremantle, 'Old-Age Pensions and Pauperism', Charity Organisation Review, vol. 9, no. 9 3 , Sept. 1 8 9 2 , p. 3 2 1 . Mackay, Methods, pp. 1 8 4 - 5 ; T h o m a s Mackay, 'National Pensions', Charity Organisation Review, vol. 8, no. 8 8 , April 1 8 9 2 , p. 128. C. S. Loch, 'Pauperism and Old-Age Pensions', in Bernard Bosanquet (ed.), Aspects of the Social Problem ( 1 8 9 5 ) , p. 153. Bosanquet, The Strength, p. 2 4 1 .


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the natural play of market forces seemed to be steadily increasing working class prosperity and diminishing pauperism. Within the overall rate of pauperism ,was the rate of old age pauperism. As was discussed in the introductory chapter, statistics of pure old age pauperism did not strictly speaking exist before 1890 (when Burt's return appeared), but it was possible to obtain a general measure of progress from the pauperism rate of those aged 60 or above (which included those who were paupers because of infirmity). From this, it could be deduced that old age pauperism was also declining, though at a slower rate than for other groups. Between 1861 and 1901, the rate of decline of pauperism for the three principal groups had been: those aged under 16, 55 per cent; those aged 16-59, 60 per cent; those aged 60+, 36 per cent. 29 (All pauperism rates rose slightly in the early 1900s, confirming the COS's fears that liberalisation of administration and talk of reform had fatally raised popular expectations and produced a growing 'pauperisation'.) The COS's explanation for the slower rate of decline of aged pauperism was highly ingenious. Loch argued that the aged of the 1890s were the generation who had spent their childhood and much of their working adulthood under the pre-1870s Poor Law regime (before the formation of the Local Government Board and its 'crusade against outdoor relief): during their formative years they had thus become more 'pauperised' by lax administrative policies, compared with later generations. Since pauperism was learned behaviour - a rational response to 'over-generous' welfare incentives - it became ingrained into an individual's character and could not easily be removed. After 1871, however, the practical and moral guidance of the COS, plus the stricter and more professional regime of the Local Government Board, both effected a change. Thus as successive generations aged into the future, the benefits of stricter relief policies would become apparent. Old age poverty would eventually disappear.30 The best policy was therefore one of continuing to reduce outdoor relief and allowing there to take place what C. S. Loch called 'the spontaneous growth of institutions suited to the actual wants of the people'. 31 In addition, Helen Bosanquet argued that the existing generation of aged were a generation who had experienced long lives of toil, since they had spent their childhood in the labour market (before factory legislation and the extension of state 29

30

31

C. S. Loch, 'Statistics of Population and Pauperism in England and Wales', Journal of the Royal Statistical Society, vol. 69, pt. II, June 1906, p. 292. Loch, 'Pauperism and Old-Age Pensions', pp. 135-6; Loch, 'Mr. Charles Booth' pp. 4 8 4 - 5 . Memorandum by C. S. Loch, Report of the Royal Commission on the Aged Poor, vol. I, p. cxvii.

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elementary education): future generations of aged would be less 'wornout', and would thus be less poverty-stricken in old age. 32 Thus despite its pessimism on the ease with which the working class could be corrupted by 'doles', the COS was actually optimistic regarding the future - providing that laissez-faire continued. As measured by friendly society membership, savings, bank deposits, rising real wages, a shorter working week, reductions in crime, increasing per capita food consumption, and other indicators of prosperity and capital accumulation, much improvement had been made. 33 Interference would only upset the balance of market forces. We should note that this analysis by the COS failed to appreciate what other social observers were noticing: that jobs for older workers were beginning to disappear. The second plank of the COS's empirical argument was a critique of those very pauper statistics. The pauperism rate was said to be essentially artefactual, being a product of the relative laxness or strictness of different Boards of Guardians in administering relief. The pauperism rate was thus not a proxy for true poverty. Where liberal critics of the Poor Law argued that the pauperism rate was a serious under-estimate of poverty, the COS argued that it was a gross over-estimate. All pensions proposals had one thing in common, argued Thomas Mackay: they started from the assumption that old age pauperism was excessive.34 This, however, was fallacious. If the pauperism rate was in fact just 'evidence of social demoralisation', then it was no basis for policy prescription.35 Statistics such as Burt's return merely indicated 'certain eccentricities of administration'.36 'A Union can have as many paupers as it chose to pay for', was the comment by another COS member.37 In support of this proposition, the COS proudly cited the instances of Boards of Guardians they had taken over and run themselves. Their achievements in this important area had in fact been much less successful than they had hoped for in the glad confident morning of 1869. Despite sympathetic help from the bureaucrats of the Local Government Board, at the peak of its success only sixteen Boards of Guardians were under COS control - a tribute to the amount of grassroots opposition the COS encountered. Nevertheless, these COScontrolled Poor Law Unions were held up as shining beacons of administrative virtue, and an indication of what could be achieved 32 33 34 36 37

Bosanquet, The Strength, p. 2 3 4 . Mrs Bernard Bosanquet, The Standard of Life, and Other Studies ( 1 8 9 8 ) , p. 2 3 . 35 Mackay, 'National Pensions', p. 125. Loch, 'Statistics of Population', p. 2 8 9 . Mackay, Methods, p. 167. C o m m e n t by Sir J. Athelstane Baines, 'Discussion on Dr. C. S. Loch's Paper', Journal of the Royal Statistical Society, vol. 6 9 , pt. II, June 1906, p. 3 1 7 .


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nationally if only there was a will to do so. The most often cited paragons were Brixworth, Bradfield, Whitechapel and St George's-in-the-East. In these Unions, the number of paupers on outdoor relief had been reduced to infinitesimal amounts by the strict application of COS principles. Frequently, once the COS gained control of a Board of Guardians, no new cases of outdoor relief would be permitted, and every effort would be made to remove existing applicants from the case load. Medical relief would be granted only on loan, and the 'offer of the house' would be strictly applied. The aim was to provide relief only within the workhouse. The results appeared to be a striking vindication of the COS. For example, C. S. Loch contrasted the cases of Brixworth (a COScontrolled Union, whose reformed regime had been started by Albert Pell) and Stockbridge (non-COS), both of which had almost identical pauperism rates in 1861 (6.6 per cent and 5.9 per cent respectively). By 1891, these had fallen to 0.8 per cent and 4.7 per cent respectively. The contrasting rates of decrease (90 per cent and 27 per cent) showed, argued Loch, what could be achieved by 'wise' COS administration.38 Even more spectacular was Whitechapel, that jewel in the COS crown, where the reforming spirits had been Canon Samuel Barnett and William Vallance (clerk to the Guardians). The number of indoor paupers relieved there had been 1,419 in 1870, and by 1894 it was 1,623 - very little difference. However, the numbers on outdoor relief had been reduced over the same period from 5,339 to only 30. In 1870 the proportion of all Whitechapel paupers on outdoor relief had been 79.0 per cent; by 1894, it had shrunk to 1.8 per cent. By contrast, in Bethnal Green (contiguous to Whitechapel and sharing many of its social characteristics) relief was disbursed carelessly and 'the virus of pauperism' had spread.39 Again, in COS-controlled Bradfield the number of outdoor paupers had been cut from 999 in 1871 to 18 in the mid-1890s; likewise, the pauperism of those aged 60 or over had been reduced from 1 in 2.8 of that age group in 1871 to 1 in 25.1 in 1892. It was claimed that, in all such transformed Unions, the virtual abolition of outdoor relief had resulted in increased membership of friendly societies and medical clubs, higher wages and greater willingness on the part of families to support their older relatives.40 This was exactly what the COS believed could be achieved at national level. There were other reasons, argued the COS, why the aged pauper statistics should be treated with the deepest suspicion. Generally, the pauperism totals were swelled by minor and trivial items of outdoor 38 40

39 Loch, 'Mr Charles Booth', pp. 479-81. Mackay, Methods, pp. 70-7. Mackay,'National Pensions', pp. 125-6; Bosanquet, The Strength, pp. 177-8.

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relief, which were no indication of really acute poverty. In reality, there were degrees of pauperism, ranging from a bottle of medicine (which would appear on the outdoor relief statistics), or a shilling supplement to other earnings, right through to full indoor relief for an utterly infirm and incapable person. Only the last was a true indicator of pauperism: outdoor relief should thus be excluded entirely from consideration.41 Further, C. S. Loch argued that 46 per cent of paupers aged 65 or over had been paupers before the age of 65: thus even if one accepted the highly artificial definition of 65 as 'old age', many who were notionally 'aged paupers' were not paupers primarily because of old age. In an ingenious exercise, he applied this reductive process to Stepney. In April 1889, Stepney had 1,129 persons on Poor Law relief, of which 400 were aged 65+. Of these 400, 181 had been chargeable before the age of 65, leaving only 219 chargeable after that age. Of these, 76 were paupers because of sickness. Removing other categories, Loch calculated that only 123 out of the original 400 were paupers solely because of old age a proportion of 31 per cent. If the Stepney figures were applied nationally, then only some 5 per cent of those aged 65+ were paupers solely because of old age.42 Another inflator of the statistics was said to be the tendency of applicants for outdoor relief to over-state their age, so that they could claim relief more easily. Relieving officers in non-COS Unions found it difficult to disprove such claims (since birth registration in Britain was still incomplete), or were sentimentally disinclined to do so.43 Finally, there was a tendency in the gathering of all official statistics (as in the census) to 'round up' to 60 the ages of applicants in their late fifties.44 In almost every aspect of their empirical battle against old age pensions, COS leaders were determined to overturn the growing liberal orthodoxies. Hence where pension campaigners argued that a 'twelvemonth' count of aged pauperism was much better than a 'one-day count', in that the former cast a wider net over the real extent of the problem (and revealed a higher rate of old age pauperism), the COS maintained that a 'one-day' count was better. A 'twelve-month count' inflated the statistics by 'double-counting' aged paupers who had migrated from one Union to another (a particular problem in London). 45 Thus if one disaggregated the old age pauperism statistics, removing 41 42 43 45

'Notes of the Month', Charity Organisation Review, vol. 8, no. 85, Jan. 1892, p. 17. Loch, 'Pauperism and Old-Age Pensions', pp. 1 5 3 - 5 . 44 Loch, 'Mr Charles Booth', p. 470. Loch, 'Statistics of Population', p. 292. Loch, 'Mr Charles Booth', pp. 4 7 0 - 1 .


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all the factors that artificially inflated them, then the level of old age pauperism became surprisingly low. The size of the 'problem' that remained was infinitely less than liberals claimed it to be, argued the COS. Of the 268,397 persons aged 65 or over in England and Wales on Poor Law relief on 1 January 1892, only 63,352 (or one-quarter) were on indoor relief. Excluding the aged paupers in workhouse infirmaries, one was left with only some 42,000 true 'aged paupers', or a mere 3.1 per cent of the total population aged 65 or over. The scale of the problem was actually very small - and certainly not sufficient to justify an expensive and socially dangerous system of tax-funded universal pensions.46 Throughout the 1890s, the 'old guard' COS leadership suggested a two-part alternative to universal state pensions. First, the screw should inexorably be tightened on all outdoor relief to the aged until it disappeared completely. 'Undeserving' aged paupers should only be relieved in the workhouse. They argued that, in the case of the aged, there had been so many improvements in workhouse regimes that the workhouse had become 'an almshouse and not a task house', as Thomas Mackay put it. Humane treatment of the aged should continue, they argued. There were excellent examples of what could be tried, such as the 'Brabazon system': educative programmes were set up, involving COS visitors, under which the workhouse-bound aged were encouraged to keep up old domestic skills (such as sewing and knitting) and learn new ones. All of this kept at bay the feared mentality of dependent 'pauperisation'.47 The vacuum left by the abolition of outdoor relief would be filled by the COS's own private old age pension scheme, which would be confined to the 'deserving' aged. In 1877 the COS set up its 'Tower Hamlets Pensions Committee', with Albert Pell as Chairman, and a membership including Canon Barnett, A. G. Crowder, Russell Barrington, Charles Fremantle and J. R. Hollond. Its aim was 'To provide pensions so far as its funds permit, for those poor persons who seem by their character and circumstances to be worthy of assistance outside the workhouse.' By 1881, only 119 pensions had been granted. In the 1880s, the scheme was extended to three more East End of London Unions - St George's, Whitechapel and Stepney - and other District Committees followed suit. Expenditure steadily increased; but still by 1896 only 1,194 pensions were being paid, at a total cost of £13,683. Of these, the vast majority (961) went to women, and only 233 to 46

47

Loch, Tauperism and Old-Age Pensions', pp. 1 5 3 - 5 ; E. W. Cripps, 'Old Age Pensions', Poor Law Conferences Held in the Year 1899-1900, p. 10. Mackay, Methods, pp. 5 8 , 8 2 - 3 .

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The campaign for old age pensions 48

men. According to Thomas Mackay, the average amount paid in such pensions in the early 1890s was 3s 6d per week, on top of a rent payment.49 Not surprisingly, the main reason why this private pension scheme expanded so slowly was the stringent criterion of 'deservingness' applied. The COS had no qualms about peering into the obscurity of a past life and deciding moral worth. In addition, it is clear that its pension scheme functioned more as a remoralisation process than as a relief of old age poverty. Recipients were chosen so that they could be moral exemplars to the less fortunate: they were to be 'the "cream" of the old working people in the district', and the whole scheme would only encourage 'the true interests of the class it is intended to benefit' (that is, the working class in general) if the strictest of standards were applied to applicants.50 Pensions were only granted after rigorous investigation, including interviewing neighbours and ascertaining how much help from younger relatives was available. If able to pass the test of 'deservingness', there was still another hurdle to leap. Despite the munificent wealth of its supporters (and the large salaries it paid its senior officials), the COS insisted upon raising money from fresh donations for such cases. Help should be immediate, in order to strengthen the 'human' contact. 'Deserving' cases were enticingly advertised in The Charity Organisation Review, like some kind of public confessional, and only if donors were found would the recipient receive a pension. (Significantly, the donation had to be paid to the Society's Council, who would then pass it on to the relevant District Committee - another indication of the autocratic style of the Council.) The pension would be taken to the recipient's home each week by a COS visitor, thus maintaining the human contact and moral surveillance. A few examples will suffice to show how strict were the criteria of 'deservingness', based upon evidence of filial support, saving, blameless misfortune, and so on: The Shoreditch Committee ask for £4 7s 6d, to enable them to continue an allowance to a widow aged 74. She supported herself for 44 years, first by keeping a school, and then by book-sewing, but has been for some time too infirm to work. Relations who used to help are now unable to do so, owing to the failure of a bank. The Stepney Committee ask for £5 4s, to supplement a pension granted to two old maiden sisters, aged respectively 83 and 85. They were formerly school48

49 50

Bosanquet, Social Work, pp. 2 8 2 - 8 ; Charity Organisation Society Annual Report for 1897, p. 4 6 . Royal Commission on the Aged Poor, 1895, C 7 6 8 4 - 1 , vol. II, Minutes of Evidence, p. 5 0 1 . Statement by Marylebone District Committee, quoted in Mowat, Charity Organisation Society, p. 98.


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teachers, and saved £400, but lost it by the failure of a bank. They again started saving, and put by another £130. This is now exhausted, and age prevents them earning more than a nominal sum. The Poplar Committee ask for £ 3 18s to complete for six months an allowance of 10s 6d a week to a very nice old labourer and his wife. Nearly half the money needed is contributed by their children. The old man has been in two benefit clubs. He is becoming very infirm, but his wife nurses him with great care. He is 77 and she is 72 years old. The Stepney Committee ask for £4 11s, to provide an allowance of 3s 6d a week for a most respectable couple, both aged 70 years. The man has cataract in both eyes. He is now past work. His wife is only able to do a little housework; both were in domestic service. A sister-in-law gives rooms and a little food. The Fulham Committee ask for £ 3 18s, to complete an allowance of 4s 6d per week for six months to a respectable single woman, aged 88. She has now no relations left who can help, but a friend gives Is 6d per week. She was a nurse, and managed to save £42, long since exhausted. A niece, who is now dead, supported her for some time. The Poplar Committee ask for £7 16s, to complete an allowance of 10s a week for six months to an old shipwright and his wife. Two sons and a married daughter contribute the balance. At various times the old man put by out of his wages as much as £81 in the P. O. Savings Bank, but the money is now all gone. 51

The crisis over pensions In the 1870s and 1880s, the COS was at the zenith of its influence. Although it never succeeded in its aim of capturing the entire Poor Law system, and imposing its control over the disbursement of all relief, it enjoyed a dominant role in the social debates of those two decades. However, in the late 1880s a series of political and economic crises in London (such as 'Bloody Sunday' of 13 November 1887) was pushing a more politically far-sighted section of middle-class opinion away from the stern, unbending tenets of economic individualism and towards more collectivism 'liberal' remedies. Most of these 'reluctant collectivists' (such as Charles Booth, Professor Alfred Marshall and Canon Barnett) had much in common with the COS leaders - especially regarding the need to restore the Poor Law to its 1834 virtues. Where they differed, however, was in their view that limited extensions of state power were needed in order to attack specific problems endemic in late Victorian capitalism and to preserve the body politic from the ravages of the new socialist challenge, particularly in the aftermath of the widening of the parliamentary and local government franchise. As has been stressed in the introductory chapter, state old age 51

Charity Organisation Review, vol. 10, no. 109, Feb. 1894, pp. 109-11.

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pensions were proposed as one such limited intervention. They would lift a large client group off the Poor Law, and thus enable it to concentrate more effectively on its task of disciplining the able-bodied male and identifying more clearly the 'residuum' of casual labourers so that harsh remedial measures (such as labour colonies) could be implemented. An urgent problem faced by the middle-class reformers was the democratisation of the Poor Law. The 1884 Reform Act had extended the parliamentary franchise, and the 1885 Medical Relief (Disqualification Removal) Act had ended the disenfranchisement of those only in receipt of Poor Law medical relief. By the early 1890s, there was developing strong political pressure to enlarge the local government franchise, and open up the election of Boards of Guardians (which was achieved by the 1894 Local Government Act). The prospect of those who received public relief being able to elect the dispensers of that relief caused much heart-searching among middle-class reformers. If there were henceforth included on the outdoor relief rolls all those categories that aroused public sympathy (such as the aged or widows with children) then a liberalised Poor Law might grant outdoor relief as an automatic right. On the other hand, a reformed Poor Law, dealing only with the able-bodied, would be much more difficult to liberalise. By lifting the largest client group off outdoor relief, the socialist challenge could be pre-empted. However, COS leaders revealed their political backwardness by opposing any such limited 'collectivism interventions. What Stedman Jones has called 'the remoteness and anachronistic flavour of the positions adopted by the Society in the 1880s'52 alienated many of the more politically far-sighted of its supporters. We cannot understand the desperation of the COS's rearguard fight against old age pensions in the 1890s unless we appreciate that it was conducted against two distinct groups: first, the ideological renegades like Booth, who shared many of the COS's presuppositions (and were thus attacked in a particularly vituperative and sarcastic manner); second, the socialists of the 1890s who advocated the sweeping away from power of that very class that the COS represented. Broadly speaking, three possible remedies were on the middle class reform agenda in the 1890s. The first was the liberal orthodoxy: to lift off the Poor Law all those whose labour market value was marginal (the traditional 'impotent poor' of the old Poor Law - widows with children, the aged, children, the chronic sick and disabled), replacing outdoor 52

Stedman Jones, Outcast London, p. 300.


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relief by alternative income maintenance policies such as old age pensions, workmen's compensation, widows' pensions, cottage homes for orphans and a public medical service outside the Poor Law. Outdoor relief could then be virtually abolished (the workhouse being the only alternative), and a pre-emptive strike would have been made against those socialists who wished to render outdoor relief freely available to all as part of capitalism's bill for its own social casualties. Previous crusades against outdoor relief in individual Unions had depended upon heroic and somewhat isolated reformers. This was too vulnerable a basis for permanent reform: what was now desperately needed was a major structural change in the Poor Law that would render it impervious to socialist tampering. As a 'liberal' member of the COS council (the Revd Brooke Lambert) argued at a council debate on old age pensions in 1892: They could not shut their eyes to the fact that a new element had come into the discussion of these questions, and that the advance of democracy to power had created a new factor. They were bound to look forward to all manner of proposals for reform of the Poor Law, and it was wise that they should be beforehand with some practical scheme which would prevent rash revolutionary lapses.53 A second possible remedy suggested in the 1890s (by those of a more conservative disposition) was to remove the Poor Law from democratic control. This was an option favoured by some COS leaders: civil servants (presumably of an expanded Local Government Board) would take over the running of the entire system.54 To this end, the COS lobbied hard to have the Poor Law specifically excluded from the 1894 Local Government Act, pending the appointment of a Royal Commission on the Poor Law (which they hoped to pack); but they failed.55 The proposal is of historical interest, however, since it was to be applied in other aspects of income maintenance policies provided by the state in the twentieth century. The third remedy was that advocated by the COS die-hards: to brave the situation out, to resist all changes, to spread the gospel of the COS, and to work continually for the reduction of outdoor relief until its virtual abolition. To those, such as Joseph Chamberlain, who opposed such stubbornness on the grounds that it was politically very dangerous, Thomas Mackay boldly declared that social revolution would best be staved off by a 'cautious and continuous restriction of the facilities for 53

54 55

'Note of Special Meeting of the Council on 21 March 1892', Charity Review, vol. 8, no. 8 8 , April 1 8 9 2 , p. 153. See, for example, Mackay, Methods, pp. 3 9 - 4 0 . Bosanquet, Social Work in London, p. 2 7 3 .

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obtaining Poor Law relief; this course of action would 'force the poor not into revolution, but into the orderly acquisition of property by means of the tenures already recognised by civilised society'. Likewise, C. S. Loch pointed out to Chamberlain that the virtual abolition of outdoor relief in Whitechapel had not caused social revolution. Mackay's hope was that, in the 1890s, there would be formed a 'natural alliance' between those two bulwarks of social conservatism - the COS and the friendly societies - in order to fight off the pensions challenge and achieve the 'dispauperisation' of the entire working class. 56 Essentially, it was a disagreement over the tactics required to defeat the perceived socialist threat. To those liberals who supported the first remedy, this die-hard COS position was too dangerous. The inflexibility and political backwardness of the COS 'old guard' caused much sorrow on the part of erstwhile supporters. For example, in the 1890s The Hospital magazine warned that: 'Mr. Loch has done good service in the past; but if he continues his present attitude, the influence of the COS must suffer considerably.'57 Accordingly, by the 1890s, key figures had partially dislodged themselves from the COS, and were now suggesting forms of 'limited socialism' or 'partial collectivism'. As we have seen, Charles Booth and Joseph Chamberlain were impelled to take up the cause of pensions for these reasons. A third interesting figure worth examining is Canon Samuel Barnett. Canon Barnett had originally been a COS enthusiast. Born in 1844, of a wealthy business background, Barnett took up his position as vicar of St Jude's in Whitechapel in 1873, and began the many enterprises aimed at moral and community regeneration for which he was to become deservedly famous (notably his involvement with Toynbee Hall, the university settlement). Barnett was active in many COS enterprises: for example, he helped found the Tower Hamlets Pensions Committee in 1877, and served a lengthy spell as a COS Poor Law Guardian in Whitechapel.58 As his wife recorded, 'During all the thirty years that Mr. Barnett served as a Guardian he never vacillated as to the wisdom of abolishing out-relief . . . and often referred with satisfaction to the figures of reduced pauperism, saved rates, and the absence of applicants.'59 However, the political turmoils of the 1880s forced Barnett into a 56

57

58

59

Mackay, Methods, pp. 2 4 , 1 6 6 - 7 ; Letter from L o c h to Chamberlain, Charity Organisation Review, vol. 8, no. 8 6 , Feb. 1 8 9 2 , pp. 3 7 - 4 4 . Quoted in Henrietta Barnett, Canon Barnett, His Life, Work and Friends (2 vols., 1 9 1 8 ) , vol. II, p. 2 6 8 . Standish Meacham, Toynbee Hall and Social Reform 1880-1914. The Search for Community ( 1 9 8 7 ) , chs. 2 and 3 . Henrietta Barnett, Canon Barnett, p. 2 8 1 .


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realisation that a more ideologically accommodating position was needed in order to achieve the twin aims of defeating socialism and reorganising the labour market. He had come out in favour of old age pensions in his 1883 article on 'Practicable Socialism': he rejoiced in the fact that, in Whitechapel, outdoor relief had been virtually abolished; but limited state intervention was now required in order to provide some measure of help for the very low-paid, and answer the socialist question of why the state should not provide all that was needed. Among several suggestions made by Barnett was one for a pension system paying 8s Od to 10s Od per week 'to every citizen who had kept himself until the age of 60 without workhouse aid'.60 Like Joseph Chamberlain, Barnett viewed this proposal very much in the context of the problem of the able-bodied young male. Once state pensions were introduced, public opinion would be mollified: 'then the conscience of the community will permit of stern treatment being applied to the idle and dissipated.'61 For the residue of able-bodied that remained as clients of the Poor Law, Barnett suggested a division into 'the unfortunate' and 'the idle' by the offer of a work test. Those able-bodied who refused this work test would be 'sent to the house of correction, there to be kept at hard labour for such time as may seem good'. The aim of Poor Law policy (in which it was inherently failing, through having to deal with so many aged poor) should be to get hold of the loafer, to take him out from among the poor, and to confine him until he had learnt some habits of punctuality and of work. It is impossible to do this until charitable public opinion is satisfied that provision is made for every one who needs, that the old man who sweeps the crossing and shivers out his petition has an adequate pension. Once this was done, the public 'which now protects the loafer', would leave him isolated, 'and he, driven by his needs, will accept the correction which will make him industrious'.62 Faced with the socialist threat in the 1890s, Barnett became increasingly impatient with the COS's inability to move with the times. In 1888, the Society had opposed his plan for a training farm for the unemployed (part of the 'correction process'), and Barnett had accused COS leaders of 'refusing to do anything except clothe themselves in the dirty rags of their own righteousness'.63 But the really bitter break came 60

61 62

63

Samuel A. Barnett, 'Practicable Socialism', The Nineteenth Century, no. 74, April 1883, pp. 5 5 4 - 7 . Quoted in Treble, 'National Leadership', p. 4 1 , n. 92. Samuel and Henrietta Barnett, Practicable Socialism. Essays on Social Reform (1895

edn),pp. 261-9,274-5. Quoted in Mowat, Charity Organisation Society, p. 127.

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when Barnett read his paper, 'A Friendly Criticism of the COS' at the Society's Council meeting of 15 July 1895. The issue of old age pensions was a key reason for the snapping of Barnett's patience. He accused the Council of having a 'narrow' mentality, and of being 'unwilling to leave the ruts which it has made . . . It has a sort of panic at the suggestion of socialism, and in fear of its presence ruthlessly destroys some of its own good work.'64 Livid with rage, Loch virtually accused Barnett of political cowardice: Barnett's idea of progress, said Loch, was merely 'a series of reactions . . . having changed once or more than once [he] may yet change once again'.65 In their own ways, these were highly accurate comments on each side's position in the old age pensions debate. The COS campaign against old age pensions From 1891, the campaign for old age pensions quickened in tempo, with Booth and Chamberlain unveiling their schemes, such that state pensions became the social issue of the 1890s. Deeply worried by this, the COS leadership began a concerted counter-campaign. As Helen Bosanquet was later to observe, somewhat sorrowfully, 'perhaps no question has given rise to more controversy within the Society, or alienated more of its supporters'.66 The problem for the COS leaders was that - for all the reasons already explained - their political backwardness caused them to over-estimate the socialist threat. They thus viewed old age pensions as a portentous issue, upon which hung the entire future of civilised, capitalist society. C. S. Loch sternly warned that 'we have two paths before us': one - slow and difficult - would eventually lead to social independence, prosperity for all and a stable society; the other - the path of liberal political expediency - was dangerous, fatally expensive and would result in social dependence.67 The COS Council moved quickly. A special meeting was held on 21 March 1892 to discuss the question. Thomas Mackay read a paper putting the case against state pensions, but there was opposition from the Revd Brooke Lambert, who warned the Council that it would be very politically foolish to ignore the growing public support for pensions, and thus to open the way to the socialists. Lambert supported Booth's universal 5 s Od pensions and argued that those who did not really need them would not to claim them. Rather unwisely, Lambert asked his audience of neo-Malthusians how many of them would bother to claim: 64 65 66 67

Quoted in Henrietta Barnett, Canon Barnett, vol. II, p. 2 6 8 . Quoted in Mowat, Charity Organisation Society, p. 129. Bosanquet, Social Work,p. 2 9 6 . Loch, 'Pauperism and Old-Age Pensions', p. 165.


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'Cries of "all!" "all!" from the audience, the majority of whom held up their hands'. 68 Other members of the Council spoke, and opinion was divided. Nevertheless, the views of the cold guard' leadership held sway, and at its meeting of 5 December 1892 the Council formally declared its opposition to all proposed old age pension schemes that would be paid out of public funds.69 The COS leaders now turned their full guns on Charles Booth, whose universal, tax-funded scheme was seen as the most dangerous, because it was the most 'socialistic'. Initially - in the late 1880s - Booth and the COS had been in complete accord on most issues. For his poverty survey, Booth had specifically chosen as his investigators two individuals who had been rent collectors for Octavia Hill - Beatrice Potter (Webb) and Maurice Paul - and, in turn, Bernard Bosanquet had approved of the Booth survey at its outset.70 But now Booth was repeatedly attacked in the most bitter fashion. His fetishistic empiricism was held up to ridicule, the implication being that it was essentially the product of political cowardice. Wrote Thomas Mackay sarcastically: 'Mr. Charles Booth is evidently a born demographist, not easily to be restrained from the manipulation and decimal-pointing of all figures within his reach.' Booth was not the objective, impartial investigator he claimed to be, said Mackay: unlike the COS activists, he had no direct experience of Poor Law administration. Booth's 'shower bath of 5s pensions', as Mackay wittily put it, would be simultaneously wasteful and demoralising in the case of the vast majority of aged who, on the COS's calculations, did not need them; and yet 5s Od per week would not suffice in those 'deserving' cases of real hardship that the COS were prepared to relieve. Of Booth's growing fame, Mackay commented that he would 'decline to swell the uncritical chorus of adulation which has accompanied all his efforts'.71 Despite these coruscating criticisms from the COS 'old guard', Booth's pension scheme was attracting the support of a growing number of more liberal COS activists. The political and labour-market imperatives - already outlined - were one reason; another was the seductive power of Booth's empiricism, which seemed to absolve many aged from moral responsibility for their poverty. A third interesting reason was that tax-funded universal pensions could be seen as enhancing thrift, by giving an individual an inducement to save for old age. Thus although Mary Calverly (writing in the Charity Organisation Review) dismissed Joseph Chamberlain's contributory pension proposals as a 'bribe to 68 69 70 71

'Note of Special Meeting', p. 153. 'Notes of the M o n t h ' , Charily Organisation Review, vol. 9, no. 96, Jan. 1893, p. 18. Stedman Jones, Outcast London, p. 306; MacBriar, An Edwardian Mixed Doubles, p. 66. Mackay, Methods, p. 258.

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thrift' that would not improve character, she was prepared to consider the merits of the Booth scheme, despite its high cost, since it was so difficult for the average working man to save for old age. Calverly felt uncomfortable at the tendency of the COS leaders to dismiss Booth's pensions as 'universal pauperisation'; the wealthier classes enjoyed inheritance and unearned income, and 'we never think of calling them paupers, but persons of independent fortune'.72 Unease over such class-based double standards increased in the 1890s, as supporters of universal pensions (particularly socialists) accused the COS of rank hypocrisy in asserting that they would fatally demoralise the working class, whereas recipients of occupational pensions were not affected. Thus in the sessions of oral evidence before the 1893-5 Aberdare Commission on the Aged Poor, Henry Broadhurst cleverly trapped Octavia Hill into first declaring that she was against 'all systems of pensions . . . in any form', but then blithely stating that pensions 'to higher class people' were 'utterly different'.73 Such blatant inconsistency angered opponents of the COS. It was 'claptrap', said the Revd Charles Cox, to fear the erosion of working-class independence: 'Did ministers and civil servants behave badly because they were assured of a pension in their old age?' asked Cox, pointing out that several members of the Aberdare Commission would themselves receive handsome pensions in retirement.74 Charles Cox was typical of those who attacked the COS with increasing ferocity in the 1890s. In 1894 - the first election of Guardians under the new democratised franchise - Cox had become a Poor Law Guardian in Brixworth (previously dominated by the COS, and held up as one of their model Unions). In a long address to a local Poor Law conference in 1898 (events which were held throughout the country each year, and which had been uncritical forums for COS ideology), Cox launched a devastating attack on the COS claims regarding their long rule in Brixworth (now ended). He began by noting that this was the first time that 'an avowed and determined advocate of outdoor relief such as himself had been permitted to address these Poor Law conferences: in effect, he accused the COS of conspiring to prevent such views being heard. Yet, argued Cox, the COS's views were those of a small minority - as was shown by their lack of success in capturing Boards of Guardians. Even where they had gained control in the past, 72

Mary Calverly, 'Thrift and Old Age Pensions', Charity Organisation Review, vol. 9, no.

73

Royal Commission on the Aged Poor, 1895, C 7684-11, vol. Ill, Minutes of Evidence, p. 558. Poor Law Conferences Held in the Year 1899-1900, p. 78; Revd J. Charles Cox, 'Old Age Pensions', Poor Law Conferences Held in the Year 1898-9 (1899), pp. 636-8.

96, Jan. 1893, pp. 2-4. 74


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this had been done by electoral chicanery - revealing their fundamental dislike of democracy. Since the 'free elections' of 1894, many of these had passed out of COS control. One such was Brixworth. Between 1871 and 1894 the number of indoor paupers there had been cut from 108 to 96, and the number of outdoor paupers from 1,118 to only 17. Yet wages had not risen, as the tenets of classical economics predicted they would: in fact, average agricultural wages had fallen, from 14s Od to 13s Od per week. Nor had friendly society membership risen. Hardship among the poor seemed to have increased. Thus the COS had failed in their legal obligations as Guardians of the Poor. Most devastating of all was Cox's charge that, in order to implement the supposed 'economical' regime of minimal outdoor relief, the COS had spent so much on officials' salaries and other administrative expenses that overall costs in all their model Poor Law Unions had greatly increased. In Whitechapel, for example, the cost of outdoor relief had fallen from £6,864 to £555 between 1870 and 1898; but over the same period total expenditure had risen from £31,771 to £48,232. These real financial figures were never mentioned in COS propaganda. Nor did the COS point out that, where outdoor relief was virtually abolished, paupers simply migrated to neighbouring Unions. In conclusion, Cox charged the COS with being ca wholly irresponsible body. . . the way it now finances the large charitable funds entrusted to its care is little short of a scandal'.75 In short, his list of accusations made the COS out to be inhumane, self-seeking, hypocritical and deceitful. The smouldering discontent of the more liberal rank-and-file COS members came to a head in mid-1894. Inspired by Canon Barnett, several COS District Committees sent letters of protest to the Council, expressing resentment over both its autocratic style, and its readiness to level charges of 'disloyalty' against those members who did not show total obedience to the views of the majority of the Council. It is clear that old age pensions were the key issue: many rank-and-file members were dismayed at the Council's decision of 5 December 1892 to oppose all proposed state schemes.76 Gradually losing their grip on the situation, the 'old guard' COS leaders were unable to influence the policy-making process in the way that they had hoped. An official enquiry into the Poor Law did not come until 1905-9, and by then it was too late. They did manage to make the 75

76

Revd J. Charles Cox, 'Outdoor Relief: With Special Reference to Brixworth, Atcham, and Whitechapel', Poor Law Conferences Held in the Year 1899-1900, pp. 1 9 3 - 2 1 5 . For the debates o n this issue, see Charity Organisation Review, vol. 10, no. 113, June

1894, pp. 278-99.

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1893-5 Aberdare Commission a showcase for their ideas: Loch and Pell served on it, and Vallance, Mackay and Hill gave oral evidence. But the 1896-8 Rothschild Committee and 1899 Chaplin Committee paid much less attention to COS views. The Society established a 'Committee on Old Age Pensions' in 1900, and published a collection of papers on the subject three years later;77 but the Committee observed events, and could not influence them. By the early 1900s the Charity Organisation Society had become marginal to the old age pensions debate. Thus although its leaders continued to issue dire warnings of what would follow in its wake, the Society was powerless to prevent the 1908 Old Age Pensions Bill becoming law. Helen Bosanquet had always made interesting and perceptive criticisms of the old age pensions campaign, suspecting that it was a middleclass movement of political expediency not primarily concerned with the real needs of impoverished old people. For example, she very much doubted whether the varying needs of the aged poor - as human beings - would be adequately met by a 'small monetary allowance' of 5s Od per week. Based upon her experience of the Society's own pension scheme, she regarded the sums of 5s Od (single) and 8s Od (couple) plus rent to be the very minimum needed. Besides, there was more to life than money; old people were far more likely to suffer from loneliness than from lack of food or clothing - 'secluded almost entirely from the world, friendless and childless, their days wear away in dull monotony' - and when infirmity came upon them, it was most often the lack of help from younger relatives that forced them to take refuge in the workhouse. A universal pension would hardly alter this situation, she pointed out. 78 Writing in 1910, C. S. Loch also grudgingly conceded that there must be instances where the new state pension was reaching those in real destitution, but a better way would have been to target the really needy.79 Looking back from 1914, Helen Bosanquet regretted the abandonment of the pauper disqualification for receipt of the state old age pension, since it had blurred the distinction between the 'pauper class' and the 'pension class', and she attributed the rise in aged pauperism from the mid-1890s to both the pernicious effects of democracy (causing irresponsible, vote-catching Guardians to be elected) and the old age pensions campaign, which had fatally raised the expectations of 77

78

Charity Organisation Society Committee on Old Age Pensions, Old Age Pensions; A Collection of Short Papers (1903). 79 Bosanquet, The Strength, p. 197. Loch, Charity and Social Life, pp. 4 6 0 - 1 .


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old people. 80 But there was a tone of relief in her acceptance of the collectivist fait accompli of the 1908 Act. The introduction of taxfunded, means-tested old age pensions had not ushered in the socialist millennium. In one respect, though, the prophecies of the COS were to prove partially correct. They had always argued that the introduction of state pensions would lead to a fall in wages, in that pensioned older workers would be able to compete more favourably in the labour market with younger workers.81 Believing in an infinitely expandable labour market (what would now be called a 'supply-side' viewpoint), the COS failed to appreciate that jobs for older workers were drying up and that therefore decreasing numbers of them would be serious industrial competitors with the young. But after 1908, and especially after 1925, employers did increasingly cut the wages of their older, pensioned employees by exactly the amount of the pension. This was to give the politics of retirement a new twist. 80 81

B o s a n q u e t , The Strength, p p . 2 4 4 - 5 . See, for example, L o c h , Charity and Social Life, p . 3 5 7 .

The attitude of the friendly societies

The friendly societies: origins and growth Apart from the Charity Organisation Society, the other principal force opposing state old age pensions until the very end of the 1890s was the working-class friendly societies. This chapter will explore the reasons for their qualified opposition, and why they eventually came round to supporting state intervention. The very long-term origins of friendly societies are almost 'lost in antiquity', as two commentators have put it.1 We know that guilds and craft organisations providing mutual assurance existed in Roman times; and in the reign of Edward III there was founded the St Catherine's Guild of Coventry. This latter included the provision for a member that 'if sick, or infirm through old age, he is to be supported by his Guild according to his condition'. Moral judgements as to the applicant's character were exercised: £no one notorious for felony, homicide, lechery, gaming, sorcery, or heresy' was to be admitted.2 In his study of the subject, Voluntary Action (1948), Lord Beveridge found several preindustrial examples, such as the Incorporation of Carters (founded in Leith in 1555), and in the medieval and early modern periods friendly societies were associated with craft guilds. A leading historian of the societies has estimated that, by the end of the eighteenth century, there must have been several thousand local small 'box clubs' and primitive friendly societies in Britain.3 Many contingencies could be covered by a simple insurance contract between members, such as sickness, old age, loss of sight, loss of a limb, fire, flood, shipwreck, robbery, maintenance of members who travelled in search of employment (the 'tramping artisan'), fire 1 2

3

C. H. L. Brown and J. A. G. Taylor, Friendly Societies (1933), p. 1. Quoted in Richardson Campbell, Provident and Industrial Institutions (n.d., c.1925), p. 21. Lord Beveridge, Voluntary Action. A Report on the Methods of Social Advance (1948), p. 22; P. H. J. H. Gosden, Self-Help. Voluntary Associations in the 19th Century (1973), p. 9.

112

The attitude of thefriendlysocieties

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damage, or the loss of tools of a trade. However, most societies only provided two kinds of benefit: first, for sickness or infirmity (whether physical or mental); second, for the expense of a funeral (via 'death benefit'). Amounts paid in sickness benefit varied, but - to give one example - in the 1880s the Ancient Order of Foresters normally paid sickness benefit of 10s Od per week for the first twelve months of sickness, half-pay of 5s Od per week for the next twelve months, and 2s 6d per week thereafter 'for the remainder of sickness'.4 The financial basis of the friendly societies varied greatly. The largest pretended to operate true actuarial policies, in which lifetime contributions accrued interest, but in practice they fell into the temptation of funding more on a 'pay-as-you-go' basis: as we shall see, this meant that they deliberately ran deficits. Many small societies were based upon the 'dividing out' or 'box club' principle, whereby any surplus of contribution income over benefit expenditure was divided among subscribers at the end of each financial year. Members of friendly societies tended to display the sectional consciousness of the labour aristocrats who distanced themselves from unskilled manual labourers. Like most nineteenth-century skilled working-class institutions, the friendly societies had an inward-looking, secretive mentality: social and ritualistic functions were often as important as welfare cover. These rituals were impenetrable, and - somewhat to the impatience of outsiders - the societies' financial workings were often shrouded in mystery. In short, friendly societies represented a 'state within a state', offering alternative institutions, support systems and training in the arts of government in a society where the conventional state institutions - notably parliament, local government and the Poor Law - were closed off the the working class. But it would be quite wrong to see them as paragons of private welfare, entirely independent of the state. For in fact throughout their history they were closely monitored and controlled by the state. In 1793 there was passed Rose's Act ('for the encouragement and relief of Friendly Societies'), which required them to be registered if they wished to enjoy the status of recognised bodies. As Peter Gosden has pointed out, between 1793 and 1875 parliament passed no less than nineteen Acts aimed at friendly society regulation, and five parliamentary committees (plus the 1871-4 Royal Commission) investigated their activities. At key moments of political unrest - such as 1830-2 and the late 1860s - the friendly societies came under intense state scrutiny, and 4

Figures from Revd John Frome Wilkinson, The Friendly Society Movement (1891 edn), p. 227.

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fears were repeatedly expressed over what might happen if they became politicised.5 Thus in the eighty years after Rose's Act the friendly societies lived an uneasy existence. Like the craft unions, they occupied a twilight world of semi-illegality. (The frequency with which the word 'loyal' appeared in their titles was a tribute to this, as was the fact that overt political discussion in their meetings was often prohibited.) The smaller societies faced recurring financial difficulties: there was inadequate legal protection for members if a treasurer embezzled funds (such a fate befell the large Manchester Unity in 1848); competition between societies caused them to undercut each other dangerously; organisation could be amateurish; incompetence, instability and fraud were not uncommon - for example, a sick club might go bankrupt after members had paid in for many years.6 In 1867, the Registrar of Friendly Societies estimated that, since 1793, 13,935 out of the total of 38,315 societies formed (or 36 per cent) had collapsed.7 In short, the societies were inherently weak; and with a politically docile labour aristocracy as members, the state had little need to exercise overt control. Significantly, major new intervention came in the early 1870s, after a brief period of trade union growth and radical political activity. A Royal Commission on Friendly Societies sat between 1871 and 1874: it investigated their organisational structure and financial problems, producing four reports. It estimated the total membership of all societies to be around 4,000,000 - a significant growth from the estimated membership of 648,000 made by Sir Frederick Eden in 1801 - and it noted that roughly half of all societies were still unregistered. The 1875 Friendly Societies Act, which followed the Royal Commission, offered further financial inducements to registration. Registered societies were granted a range of legal and financial advantages; but they had to conform to even stricter rules as a condition of being registered. Most notably, they had to submit quinquennial returns of sickness and mortality, upon which basis there would take place a valuation of assets against liabilities; but in return they were given greater financial advantages, such as legally being able to hold land and property in the name of their trustees, and taking out legal proceedings.8 Quinquennial valuation enhanced the role of consultant actuaries, who imposed upon societies control from 5 6 7

8

P. H. J. H. Gosden, The Friendly Societies in England 1815-1875 (1961), pp. 155-73. Ibid., pp. 9 4 - 5 . Humphrey Southall and Eilidh Garrett, 'Morbidity and Mortality Among Early Nineteenth Century Engineering Workers', Social History of Medicine, vol. 4, no. 2, Aug. 1991, p. 240. Wilkinson, Friendly Society Movement, pp. 223-5.


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outside via the arcane and mysterious science of life-tables. Another Friendly Societies Act in 1896 tightened control even further. The problems of the societies It is difficult to generalise about the friendly societies in the nineteenth century, since they operated on so many different levels. At the top were those two great institutions, the Manchester Unity of Oddfellows and the Ancient Order of Foresters; at the bottom, the term 'friendly society' covered a multitude of dividing societies, sick clubs, collecting societies, tontines, village clubs, and so on. Thus estimates of friendly society membership are problematic. In the early 1890s, the combined membership of the Manchester Unity and the Foresters totalled 1,600,223; but adding in the branches of affiliated orders brought this up to 1,727,809. In addition, membership of other registered friendly societies totalled 2,133,710. According to Sir Edward Brabrook, Chief Registrar of Friendly Societies, there were another 3,318,942 members of'collecting societies'.9 On the most generous estimate, fully 8,078,816 individuals in the United Kingdom were friendly society members (in 24,041 separate societies) in the late 1890s.10 However, many estimates excluded the collecting societies: to the friendly society purist, these societies (with their scandalously high expense ratios and rate of lapsed policies) were too ruthlessly commercial to fit comfortably with the ideals of fraternity, mutuality and risk-pooling. Thus the Rothschild Report of 1898 put the membership of registered societies at 4,203,601, plus another 1,106,507 members in unregistered societies.11 The tendency to lapses of membership was more pronounced in the smaller societies, making crosssectional counting less than accurate: even in the well-run Manchester Unity, one-eighth of members lapsed in afive-yearperiod in the 1890s.12 Thus if we accept these lower estimates as more reliable, we can conclude that, by the end of the nineteenth century, just under half of all adult males in the UK were members offriendlysocieties. Whatever these differences in counting, it is clear that the friendly societies were growing in membership in the fifty years before the First World War. Registered friendly society membership alone doubled between the late 1870s and the early 1900s.13 This has led historians of 9

10 11 12

13

Report of the Royal Commission on the Aged Poor, 1895, C-7684-II, vol. Ill, Minutes of Evidence, pp. 591-2. E. W. Brabrook, Provident Societies and Industrial Welfare (1898), p. 56. Report of the Committee on Old Age Pensions, C.8911, 1898, p. 6. Alfred W. Watson, An Account of an Investigation of the Sickness and Mortality Experience of the I. O. O.F. Manchester Unity During the Five Years 1893-1897 (1903), p. 11. Gosden, Self-Help, p. 91.

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both the left and the right to indulge in some counterfactual thinking regarding state intervention. To the left, the growth of friendly society membership constituted a potential danger to the capitalist state, especially with the politicisation of the craft unions in the early 1900s and the increasing tendency of trade unions to use their friendly society benefits to finance strikes. On this scenario, they could have become alternative working-class welfare institutions, able to resist control by the state. Indeed, the 'Liberal welfare reforms' of 1906-11 can even be seen as a method of breaking their power.14 To the 'new Right', the friendly societies offer a tantalising prospect of what private, self-help welfare might have been had not the paternalistic state intervened and created a 'dependency culture'.15 However, over-romanticised views of the friendly societies tend to overlook several harsh realities. First, their membership was confined to the most skilled and prosperous of the working class - in other words, they failed to cover those who most desperately needed income support in times of lost earnings. Levels of premiums also correlated with the financial soundness of the society: the most skilled could pay the highest contributions, and thus enjoyed the most reliable protection. Second, there were very few women members (only 70,000, according to one estimate in 1902).16 Societies for women did exist - such as the Order of United Sisters, founded in 1884 by the Revd J. Frome Wilkinson - and could be found in areas with highly feminised workforces (for example, textile manufacturing). But women's low membership reflected their episodic labour force participation, the actuarial complications induced by maternity, and the fact that women's overall sickness claims were higher up to the age of 60.17 Thus another group especially in need of welfare (particularly health insurance) was effectively excluded. Third, lapses in contributions were common. One estimate was that some 50 per cent of starting members eventually dropped out.18 Provision for old age per se was uncommon. Superannuation schemes attracted few takers. The Ancient Order of Foresters began one such in 1883, but ten years later it had only three subscribers out of the society's 830,720 members. The Manchester Unity's equivalent 14

15 16

17

18

For an interesting, nuanced exploration of this theme, see Stephen Yeo, Working Class Association, Private Capital, Welfare and the State in the late Nineteenth and Twentieth Centuries', in Noel Parry, Michael Rustin and Carol Satyamurti (eds.), Social Work, Welfare and the State (1979), pp. 4 8 - 7 1 . David Green, Reinventing Civil Society (1993). Statement by R. Waite, Report of the Old Age Pensions Conference Held in the Memorial Hall, 14 and 15 January, 1902 (1902), p. 16. Alfred Watson, Friendly Societies for Women, with Special Consideration of the Sickness Risk from the Actuarial Point of View (1897), pp. 1 - 4 . Evidence by Reuben Watson, Royal Commission on the Aged Poor, vol. Ill, p. 622.


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scheme had 500 members in the early 1890s (less than 1 per cent of its total membership).19 Trade unions did offer superannuation to their members, albeit under strict terms and as a small part of their overall benefit provision. As with nearly everything to do with friendly societies, there are frustratingly different estimates of the extent of such cover. One, by the Chief Registrar of Friendly Societies (Sir Edward Brabrook) claimed that in 1890 the total expenditure of 259 trade unions who operated as provident institutions (providing a range of benefits) was £862,000; of this sum, only £87,000 was spent on superannuation benefits.20 It is probable that this latter total was paid by only half of these trade unions, for another rather higher contemporary estimate was that some 120 trade unions paid superannuation benefit in 1895. Of these, twenty-six unions represented nine-tenths of members, paying out a total of £128,591 in that year to 7,254 beneficiaries - an average of about 7s Od per week each. This was dispensed on a discretionary basis, subject to stringent conditions. A recipient had to have been: a member for a certain number of years, over a certain age, and able to prove (for example, with a medical certificate) 'that he is not able to earn more than one-half the wages of his trade, or that he is not able to earn the correct wages of his trade by reason of old age or infirmity'.21 Apart from providing much-needed support for older members, the strict application of this last condition was designed to protect the trade union-negotiated rate for the job by removing possible competition by a reserve army of older members. True superannuation schemes were intrinsically problematic. In order to be financially sound, and guarantee to pay benefit at the age of 65, they had to charge high rates of contribution and accumulate large reserves.22 From the members' point of view, superannuation benefits were unattractive. Although the actuary to the Manchester Unity (Reuben Watson) pointed out that, statistically, new entrants had a good chance of surviving to old age - of every 100,000 who entered a friendly society at age 18, 48,343 could expect to survive to age 65, and 36,974 survive to 70 - nevertheless old age was seen as a too-distant contingency to be worth insuring against.23 19

20 21

22 23

James H. Treble, 'The Attitudes of Friendly Societies Towards the Movement in Great Britain for State Pensions, 1878-1908', International Review of Social History, vol. 15, pt. 2, 1970, p. 278. Brabrook, Provident Societies, p. 32. Evidence by John Burnett (Chief Labour Correspondent of the Board of Trade), Report of the Committee on Old Age Pensions, pp. 1 0 4 - 5 . Report of the Royal Commission on the Aged Poor, 1895, C-7684, vol. I, p. lviii. Ibid., vol. Ill, Minutes of Evidence, p. 613. This estimate takes no account of lapses in

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But there was another, more important, reason for the lack of true superannuation schemes. This was that friendly societies paid quasi-old age pensions anyway in the form of sickness benefit. The 1875 Friendly Societies Act defined old age as 'any age after 50', and although the Court of the Queen's Bench ruled that 'natural decay' was not 'sickness', most societies were very reluctant to follow this ruling.24 To deny sickness benefit to a needy older member went against their fraternal ethos; societies were very unwilling to see any of their members fall on to the Poor Law in old age; competition for new members meant that societies had to be seen to be generous in interpreting the terms of their insurance contracts with members; the societies' constitutions would not permit them to go against the wishes of their members, and these members wanted sickness benefit paid for old age infirmity; finally, anyone taking out a true annuity scheme could not have been denied sickness benefit as well in old age, and there was little point in such 'over-insurance'. 'Pay them . . . if they should live to the age of Methuselah', was the comment of the Oddfellows Magazine, arguing that this was the contractual right of older members. 25 The position was summed up graphically by the Revd J. Frome Wilkinson: When the period of loss of wages arising from the disability of old age and wornout working powers arrives, the society's doctor in many cases feels compelled to stretch a point and, rules notwithstanding, to judge cases brought to his notice by the heart rather than the head, lest the old folk become altogether destitute and fall on the poor-rate. The cause of humanity triumphs, but the outraged science of vital statistics avenges itself upon the society as a whole, and deficiency upon deficiency is quickly piled up. 26

A few societies separated sickness benefit from annuities. For example, the 'Rules and Regulations of the Castle Eden Friendly Society' offered male members aged 60+, and women aged 50+, either an annuity graduated by age or sickness benefit, but not both. 27 But such instances were rare. Mostly, societies were generous to their older members foolishly so, in the opinion of their actuaries. Few were quite as giving as the Hearts of Oak Society, which paid reduced sickness benefit to members aged over 60 who were still able to work a little (earning up to

24 25 26

27

contributions, which would have considerably reduced the number remaining as members in old age. Gosden, Self-Help, pp. 262, 266. Oddfellows Magazine, vol. 26, no. 244, April 1895, p. 104. J. Frome Wilkinson, 'Friendly Society Finance', Economic Journal, vol. 2, no. 8, Dec. 1892, pp. 7 2 5 - 6 . Rules and Regulations of the Castle Eden Friendly Society (n.d.), in Friendly Societies.

Seven Pamphlets, 1798-1839 (1972), pp. 28-31.


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12s Od per week),28 but all looked upon their older members as automatically deserving. Thus by the end of the nineteenth century, 'infirmity' had become synonymous with old age. As a representative of the Manchester Unity put it: 'A large amount of sick pay is given now to members who are not suffering from any specific disease, more in the form of a pension than anything else, and to that is attributed the insolvency existing to a large extent in the order.'29 The growing 'insolvency' of friendly societies requires careful consideration, for it has long been held as the major reason for their coming round to a position of support for state pensions in the 1890s and early 1900s. The question of 'insolvency' In an important and influential interpretation advanced in the 1960s, Professor Bentley Gilbert argued that changing patterns of morbidity and mortality over the course of the nineteenth century were creating serious financial problems for the societies. The older quick-killing diseases of the early industrial era (notably, epidemics) were being replaced by degenerative illnesses of longer duration (such as tuberculosis, cancer and heart disease). The actuarial gain to the societies derived from a longer period of contributions was more than wiped out by the extended period of benefit that now had to be paid out at the end of the life course. This demography-driven problem was exacerbated, maintained Gilbert, by the tendency of friendly societies to use out-of-date lifetables in setting their premiums and benefits. They 'almost invariably' used William Farr's English Life Table No. /, based upon mortality rates in the period 1836-54. Farr's table showed that, at age 20 (which we can take as the normal age of entry into a friendly society), a male could on average expect to live to 59.5 years of age. But by 1890-1900, the expected average age of death of males reaching maturity was 62.0 years, and by 1911 it was 64.2 years.30 Societies were developing a 'topheavy' age structure, but were not fully realising the fact. A further exacerbation arose from the fact that, as society membership grew at the end of the nineteenth century, so competition for new members increased; premiums were lowered below actuarially justified levels in 28

29 30

Alfred William Watson, Friendly Society Finance Considered in its Actuarial Aspect (1912), p. 13. Evidence by Tom Hughes, Report of the Committee on Old Age Pensions, p. 3 1 . Bentley B. Gilbert, ' T h e Decay of Nineteenth-Century Provident Institutions and the Coming of Old Age Pensions in Great Britain', Economic History Review, vol. 17, no. 3 , April 1965, p. 553.

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order to woo new members. Finally, argued Gilbert, the decline in the birth-rate from the late 1870s diminished the proportion of new, young entrants who otherwise would have swelled the societies' incomes.31 The result was that, of 14,988 friendly societies in England and Wales subject to a special valuation in 1891 by the Chief Registrar's Office, 11,866 showed a deficiency of funds, and only 3,122 showed a surplus. The total surplus was £1,781,319, and the total deficiency, £10,734,515.32 There were considerable variations in insolvency between societies. Thus in 1891 the Manchester Unity's solvency ratio was 19s Id in the pound; in the Ancient Order of Foresters it was 17s Id; and in the Free and Independent United Order of Mechanics it was only 10s 3d.33 A similar survey for the 1896-8 Rothschild Committee examined returns from thirty-four societies with 22,608 branches, covering 2,351,150 members (or one-half of total registered friendly society membership). Of those prepared to reveal their financial condition, 5,049 societies and branches showed a surplus, and 12,448 a deficiency.34 On the face of it, this was a very serious situation: it seemed that, where the societies' futures were concerned, they were in a 'really desperate actuarial position', and little could be done to prevent 'the bankruptcy toward which they were rushing', as Gilbert has put it. Faced with this impending actuarial cataclysm, so the argument goes, the societies came round to a support for old age pensions in the late 1890s and early 1900s, perceiving that a non-contributory state scheme would relieve them of the burden of supporting their older members. These demographic imperatives overcame the inherent social and political conservatism of the societies. And the necessity of placating them was 'an important determinant' of the form of both the 1908 state pensions scheme and the 1911 National Insurance Act.35 However, this thesis - very influential on subsequent historians - now requires considerable modification. Granted, if we accept the evidence of the consultant actuaries who advised the friendly societies, then Gilbert's explanation appears plausible, for by the end of the nineteenth century these actuaries were uttering Cassandra-like warnings about the societies' insolvency. They urged the societies to make sickness benefit cease at the age of 65 and to develop true deferred annuity schemes for their older members. Many witnesses to the Aberdare Commission of 1893-5 took this line. Reuben Watson (actuary to the Manchester 31 32 33 35

Bentley Gilbert, The Evolution of National Insurance in Great Britain ( 1 9 6 6 ) , p. 173. Wilkinson, ' F r i e n d l y Society F i n a n c e ' , p . 7 2 1 . 34 G o s d e n , Self-Help, p . 102. Gilbert, The Evolution, p. 170. Ibid., pp. 1 7 5 , 178, 160.


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Unity) was pressing this upon them as far back as 1878, and repeated the advice in his oral evidence to the Commission.36 Sir Edward Brabrook (Chief Registrar) also argued that this was the only way forward, but understood why it was so difficult for the societies: he believed that they were nervously waiting for each other to take the first step in this direction. In the slightly exasperated tone deployed by many middle-class social commentators when observing working-class culture, Brabrook tried to show how tantalisingly easy it would be: he argued that an annual contribution (from the age of 21) of 19s Od would fund sickness benefit of 10s Od per week for the first twenty-six weeks of sickness, and 5s Od thereafter; only an extra 10s Od per annum was needed to fund a fixed pension after the age of 65 of £13 19s per annum.37 Reuben Watson's calculation was that just under 2|d a week a little more than the cost of a glass of beer - would secure a 5s Od per week pension at age 65. 38 Yet society members stubbornly ignored such advice. Interestingly, though most of the consultant actuaries maintained an attitude of Olympian disdain towards the dividing societies, dismissively arguing that they were not based on true insurance principles (thus not requiring the services of actuaries), and that they adopted the morally dubious solution of dissolving themselves in order to get rid of risky members,39 the Chief Registrar did have some good words to say about them on this very point. Their simple funding mechanism meant that they could not be tempted into paying disguised superannuation: 'There is no affectation of providing for old age, either directly or indirectly', wrote Brabrook: 'If the members feel it their duty to provide for old age, they know they must go elsewhere to do so.'40 However, there are important reasons for not interpreting these apocalyptic warnings as necessarily an accurate reflection of friendly society finance. Actuarial advice had been forthcoming throughout the second half of the nineteenth century, dependent upon analyses of mortality and morbidity. These texts included: Charles Ansell, A Treatise on Friendly Societies (1835); Henry Ratcliffe, Observations on the Rate of Mortality and Sickness Existing Among Friendly Societies (1850); Francis G. P. Neison, Snr, Contributions to Vital Statistics: Being a Development of the Rate of Mortality and the Laws of Sickness (1845); Reuben Watson, Explanatory Treatise on the Valuation of Friendly Societies 36 37 38 39 40

Reuben Watson, Explanatory Treatise on the Valuation of Friendly Societies (1878), p. 38. Brabrook, Provident Societies, pp. 1 1 4 - 1 7 . Royal Commission on the Aged Poor, vol. Ill, p. 621. See, for example, Watson, Friendly Society Finance, p. 2 1 . Brabrook, Provident Societies, p. 70. Likewise, Beveridge observed that the dividing societies were 'the way to insurance without an actuary, a form of reading without tears whose attractions are undeniable'. Beveridge, Voluntary Action, p. 44.

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(1878); Francis G. P. Neison, Jnr, Observations on the Efficient Valuation of Friendly Societies (1885) and The Rates of Mortality and Sickness According to the Experience for the Ten Years 1878-1887 of the Independent Order of Rechabites (Salford Unity) Friendly Society (1889). Modern

analysis of these and other sources shows that they all revealed the fact that sickness benefit claims increased with the age of members.41 Prior to 1834, registered friendly societies had had to submit tables of contributions and benefits to local Justices of the Peace; but the 1834 Friendly Societies Act had repealed this, devolving responsibility on to the societies themselves. The larger and more responsible societies sought advice from consultant actuaries after 1834. By requiring registered societies to undergo quinquennial valuations, the 1875 Friendly Societies Act increased the role of the actuaries even further. (An interesting point to note is that the 1874 Final Report of the Royal Commission had mooted the possibility of the state providing 'model tables' for registered friendly societies to use; but no government had dared implement this, for fear of being held responsible if a society went bankrupt.) It is important to bear in mind, therefore, that as the role of the consultant actuaries increased, so did their advice become more peremptory, alarmist and possibly even self-serving. A little scepticism thus goes a long way, for several reasons. First, the issue of insolvency was not as serious as many commentators have made it out to be. 'Insolvency' was an actuarial construct, and could be calculated in different ways. Most commonly, it involved the comparison of assets (the monies, plus interest, that a society expected to receive in the future from existing members) against liabilities (what the society could expect to pay out in the future in benefits). A deficiency meant that, unless remedial steps were taken, immediate and nearfuture claims could be paid, but claims further into the future could not. This was quite different from a 'deficit' in commercial terms, where all existing claims cannot be met and bankruptcy ensues. Supporters of friendly societies were quick to point this out: the Revd J. Frome Wilkinson asserted that 'When a valuer, then, arrives at an arithmetical result, bringing out a surplus or a deficiency of the funds of a friendly society, he is not stating a fact; he is merely giving an estimate, which may become a fact.'42 The construction of such estimates was a highly technical process, involving a complex set of variables: for example, there were different ways of calculating assets in the form of land, 41

42

James C. Riley, 'Disease Without Death: New Sources for a History of Sickness', Journal of Interdisciplinary History, vol. 17, pt. 3 , Winter 1987, esp. pp. 5 5 5 - 9 . Wilkinson, The Friendly Society Movement, p. 88. In chapter 10, Wilkinson explained the technicalities of the valuation process.


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property or investments, or of predicting future interest rates; again, a deficiency would increase if a society withdrew funds for much-needed capital expenditure. Thus estimates of future solvency could easily be upset. Second, most of the concern over insolvency in the 1890s came from middle-class outsiders, such as the actuarial advisers and interested politicians, and not from within the societies. Actuaries like Alfred Watson tended to adopt a slightly patronising, 'holier than thou' attitude - albeit from a position of some affection - towards the societies' financial affairs. 'This is the moral every actuary is preaching', was a typical comment of the time (in this case, a comment by Brabrook on the need to separate sickness and superannuation benefits).43 Socialists were a little suspicious of this middle-class interference: 'we find some patronage, and much help that is not patronage, from the upper and middle classes in the friendly society movement', wrote Frederick Rogers caustically in 1903.44 There had been a long history of mild mutual misunderstanding between the two sides (for example, during the oral evidence hearings of the 1867-9 Royal Commission on Trade Unions). Frome Wilkinson took a delight in pointing out that in 1845 the eminent actuary Francis G. P. Neison, Snr had predicted the imminent collapse of the Manchester Unity, on the basis of its sickness and mortality returns: Wilkinson gently chided those 'who look upon members of the Institute of Actuaries as being next door to infallibility'.45 In short, the desiccated science of life-tables did not fit in easily with the friendly society ideals of conviviality and fraternity. One can also detect some class distancing in the actuaries' implicit attitude that even the labour aristocracy were incapable of managing their own financial affairs. Such moral rectitude was their duty: but it also rendered their evidence over-alarmist and not wholly reliable. Bentley Gilbert likewise tended to adopt this view, maintaining that 'even the best managed' societies 'did not understand precisely the reason for their actuarial deficiencies'; nor could they explain things to their members ('hard-handed men for whom statistics were a mystery').46 Far from being outwith their control, as Gilbert implied,47 these deficiencies could be remedied, and were being remedied. They arose 43 44

45 46 47

B r a b r o o k , Provident Societies, p . 3 6 . F r e d e r i c k Rogers a n d F r e d e r i c k Millar, Old Age Pensions: Are They Desirable and Practical? ( 1 9 0 3 ) , p . 2 8 . Wilkinson, Friendly Society Movement, p . 3 7 . Gilbert, The Evolution, p . 175. Gilbert a r g u e d t h a t , b y t h e 1890s, t h e older a n d smaller societies were ' t h e nearest to b a n k r u p t c y ' , b u t even t h e larger societies 'were in m a n y cases u n a b l e to take t h e steps necessary to insure solvency'. Ibid., p . 174.

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chiefly out of the tendency of the societies to operate on a pay-as-you-go basis, funding current benefits out of current contributions and holding little in reserve - a technique so tempting that it was to become the practice for state National Insurance in the twentieth century and has been adopted by all individuals who maintain personal overdrafts. Thus trade unions who ran benefit schemes had, on average, only fifteen months' income in hand at any one time.48 As a result, it was relatively easy for the societies to reduce their deficiencies. All they had to do was raise their contributions, be more rigorous in excluding or not admitting individuals who were cbad risks', and expel those lodges or districts that interpreted the insurance contract too liberally. (Sir Edward Brabrook himself admitted that 'nothing is more elastic than the contract made by a friendly society with its members'.)49 Periodically, the large societies did just this. For example, a valuation carried out in 1870 revealed the Manchester Unity to be 90 per cent solvent, with a deficiency of £1,343,447. The directors instructed the districts and lodges to increase the contributions of older members, to decrease some benefits, and to revise the benefits given to superannuated members. As a result, in the next quinquennial valuation (1875), the deficiency had been reduced to £372,168. However, by 1880 it was up slightly, at £627,820.50 In the 1900s, another reduction of deficiencies took place by means of such reforms. As a result, society membership fell slightly: between 1902 and 1908, the Ancient Order of Foresters contracted from 676,974 members to 630,683, and the Manchester Unity from 752,509 to 751,431. One estimate was that between 1880 and 1908 the net deficiencies of all friendly societies were reduced from £4,270,434 to £3,015,043. In 1910, the President of the Institute of Actuaries, George Francis Hardy, candidly admitted that previous valuations had given a far too pessimistic view of the societies' financial condition, and commended them on their reformatory moves to greater solvency.51 We can conclude, therefore, that societies deliberately ran deficiencies, but kept them under control.

48

49 50

51

Brabrook, Provident Societies, p. 36. One of the rather moralistic points made by actuaries was that this meant that, at any one time, younger members were paying for the benefits of the older members. Quoted in Old Age Pensions. A Collection of Short Papers, p. 28. Wilkinson, Friendly Society Movement, pp. 9 0 - 2 ; 'Assets and Liabilities', Oddfellows Magazine, vol. 15, no. 114, June 1884, p. 162. Alfred W. Watson, 'Some Points of Interest in the Operations of Friendly Societies, Railway Benefit Societies and Collecting Societies', Journal of the Institute of Actuaries, vol. 44, April 1910, pp. 171, 249, 258; Watson, Friendly Society Finance, Considered in its Actuarial Aspect (1912), pp. 6 - 7 .


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A demographic crisis? If the issue of insolvency is something of a red herring, so also is it the case that demographic factors do not by themselves explain the shift of attitude by the friendly societies towards state pensions. Longevity in adult years did not rise dramatically in the second half of the nineteenth century. Increased life expectancy at birth was largely a consequence of the reduction in infant mortality. As has been shown, between 1854-60 and 1890-1900 (the period in which this demographic problem is said to have developed) the life expectancy of a 20year-old male only rose by only 2.5 years - hardly enough to precipitate a major actuarial crisis. Hence the average age of Manchester Unity members rose from 35.62 years in 1868 to 36.91 years in 1893.52 Nor were the societies exceptionally burdened by older members. Although the number of people aged 65+ in Britain rose from 700,000 to 1,500,000 between 1841 and 1901, rapid population growth ensured that they remained a constant proportion of the total population at just under 5 per cent. One authoritative estimate was that in the Manchester Unity in 1897, 30,234 members out of a total of 673,394 were aged 65+ (4.5 per cent). In the Foresters in 1891, the proportion was even lower, at 2.6 per cent.53 Recent analysis by James Riley shows that the 'curve of morbidity' according to age followed roughly the same trajectory for different periods in the nineteenth century; by the end of the century, claim levels for all age groups were higher, especially for those aged 65+, but not on such a scale as to warrant impending catastrophe.54 The life-tables cited by Gilbert demonstrate this - though he draws an erroneous conclusion from them. Farr's English Life Table No. /, based on mortality between 1838 and 1854, showed that, for each million male births, 651,903 men would reach the age of 20, and 531,697 would reach the age of 40. Tatham's English Life Table No. IV, based on mortality between 1891 and 1900, showed that, out of each million male births, 711,714 would reach the age of 20 and 615,964 would reach 40. Gilbert argued that this constituted an increase in the survival rate of men aged over 40 of 15.8 per cent in fifty years - a significant increase.55 However, Gilbert mistakenly used the one million as the denominator. Instead, the number of survivors at age 20 should be 52 53 54 55

Oddfellows Magazine, vol. 2 6 , n o . 2 4 4 , April 1 8 9 5 , p . 102. Ibid., p . 110; W a t s o n , An Account, p . 16. Riley, 'Disease W i t h o u t D e a t h ' , p . 5 5 6 . Gilbert, The Evolution, p . 1 7 1 , footnote.

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used, since this was the age from which friendly society contributions would normally be made. On this calculation, 81 per cent of 20-yearolds were predicted to survive to age 40 in 1854; by 1900, this had only increased to 87 per cent, or by 7.4 per cent. In addition, the high rate of contribution lapses (as we have seen, 50 per cent was an authoritative estimate) whittled down the number actually surviving as friendly society members at the age of 65 (though to some extent this was countered by re-joining). To be sure, the life expectancy of friendly society members in adult years was higher than that for the general population; likewise, their death-rates at every age below 75 were lower. But life-tables alone do not explain why the friendly societies were experiencing some financial difficulty in the 1890s. It is evident, therefore, that life-tables alone are no explanation: the demographic effects were too weak. What was undeniably causing problems was the rise in sickness benefit claims and, more importantly, the longer duration of such claims - a rise that was occurring at all ages, but which was most pronounced among older members. There are two possible explanations for this. The first is that, quite simply, the fall in mortality over the course of the nineteenth century was accompanied by lowered health status. In effect, the one was the corollary of the other. This phenomenon at first sight appears paradoxical: why should advances in living standards, quality of environment and, to a lesser extent, medical intervention have improved the rate of survival but lowered the aggregate health status of those who survived? This paradox was understood at the time - for example, by authorities as far apart as Francis G. P. Neison, Snr, in Contributions to Vital Statistics (1845), and Edgar Collis and Major Greenwood in The Health of the Industrial Worker (1921). The most important contemporary investigation was that undertaken by Alfred Watson, a consultant actuary to the Manchester Unity, and published in 1903. Watson showed that sickness benefit claims had risen at all ages in the Manchester Unity between 1846-8 and 1893-7, but the highest rates of increase had occurred among those members aged 65+. Thus the 'weeks of sickness' experienced by those aged 65+ had risen from 1.8 per cent of the total weeks of sickness to 31.6 per cent over that period. Watson noticed that morbidity varied by region and occupation, but these variations did not seem to explain the paradox of falling mortality and rising morbidity: as far as could be ascertained (and there were enormous problems in measuring occupational status over time), there had been no significant increase in those occupations (such as labouring) that had higher morbidity rates. The most striking feature was


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the increase in protracted sickness (i.e. more than two years' duration) between 1866-70 and 1893-7. 56 More recently, the economic historian James Riley has investigated the problem, using several large data sets from different periods in history, including nineteenth-century British friendly society records. Riley's intriguing hypothesis is that there takes place a process of 'insult accumulation', whereby the more incidents of sickness an individual experiences, the more they will experience future sickness. Hence if mortality falls there will be more survivors with 'impaired lives' whose lower health status will reveal itself in higher sickness benefit claims.57 However, taking the recorded incidence of sickness at its face value produces a somewhat one-dimensional explanation. As any medical sociologist will testify, the measurement of health status by morbidity rates is inherently problematic: the reporting of sickness will depend upon many variables, including self-perceptions (or 'lay definitions') of sickness, the willingness of individuals to seek expert diagnostic procedures, the availability of health care, and so on. Self-definitions of sickness may be affected by a range of psycho-social factors (for example, stress), many of which may originate in the economy and the labour market.58 All forms of social dependency - unemployment, vagrancy, disability, psychiatric disorders - increase in times of economic recession and industrial re-structuring. Hence the recession of the inter-war years produced a rise in rates of long-term disability and sickness, alongside medical improvements that should have had the opposite effect (indeed, Watson himself investigated this at one point).59 Conversely, these rates fell during the full-employment years of World War II. A final point to note is that concepts of 'sickness' and 'unemployment' are twentieth-century constructs, being in part a function of categorisations introduced by state welfare. As Noel Whiteside has argued, the introduction of separate categories of 'sick' and 'unemployed' in the 1911 National Insurance Act 'superimposed a rigid classificatory system on a far more amorphous social reality than is sometimes supposed'. Before then, the two categories merged imperceptibly into each other: those with lower health status would be more likely to be displaced from the labour market and, once so marginalised, would suffer a degree of poverty that would exacerbate their medical 56 57

W a t s o n , An Account. J a m e s C . Riley, Sickness, Recovery and Death: A History and Forecast of III Health ( 1 9 8 9 ) ,

pp. 171-2. 58

59

A n example can be found in the 1980s and 1990s - decades of economic re-structuring - which witnessed the appearance of n e w stress-related disorders. Report by the Government Actuary on an Examination of the Sickness and Disablement Experience of a Group of Approved Societies in the Period 1921-27, C m d . 3 5 4 8 , 1930.

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condition, or would be more likely to define themselves as unfit for work through infirmity.60 In a moment of frankness, the Chief Registrar warned against taking the evidence of rising sickness at face value: 'sickness benefit in friendly societies was a question of extreme difficulty', admitted Brabrook, being subject to so many variables: 'He thought it was really hardly possible to construct a coherent definition of what sickness in friendly societies really was. It was not in any sense a definite physical fact; therefore, one had to deal with a variety of considerations.'6 * An interesting early exploration of the effect of the labour market was published by T. S. Ashton in the Economic Journal for 1916. Using data from the Amalgamated Society of Engineers (ASE), Ashton showed that claims to both sickness benefit and superannuation benefit tended to rise most rapidly during, or just after, periods of economic recession (for the ASE, these peaks were 1869, 1879, 1898 and 1909). Conversely, during the full-employment First World War (creating an exceptional demand for the labour of engineers) these rates dropped significantly. Hence the proportion of ASE members on superannuation benefit fell from 5.4 per cent in 1909 to 2.8 per cent in 1915, and those on sickness benefit from 10.2 per cent in 1908 to 1.8 per cent in 1915. There was thus an exceptionally low rate of recorded morbidity for ASE members during the war, despite the considerable visual evidence that they were working long hours under great stress; the fact that they saw their work as vital to the war effort meant that they were willing to ignore any latent sickness. Ashton surmised that, after the war, there would be a rise in sickness claims as the cumulative effects of the wartime health strains revealed themselves as a greater propensity to take early retirement via long-term sickness benefit.62 By contrast, James Riley discounts any major causal connection between economic factors and morbidity rates, since rising sickness benefit claims in the late nineteenth century occurred alongside improving real wages and marked fluctuations in unemployment. In addition, he argues that, since Watson's evidence showed that sickness was becoming more protracted in duration rather than more frequent in incidence - in other words, there was no great change in a worker's propensity to enter a sickness claim - then sickness claims are 'a poor proxy for economic performance'. Deploying a behavioural, 'rational 60

61

62

N o e l Whiteside, 'Unemployment and Health: A n Historical Perspective', Journal of Social Policy, vol. 17, pt. 2, April 1988, pp. 1 8 8 - 9 . C o m m e n t by Brabrook, 'Discussion on Dr. Snow's Paper', Journal of the Royal Statistical Society, vol. 7 6 , pt. 5, April 1 9 1 3 , p. 5 1 1 . T. S. Ashton, 'The Relationship Between U n e m p l o y m e n t and Sickness', Economic Journal, vol. 2 6 , Sept. 1916, pp. 3 9 6 - 4 0 0 .


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choice' model, he argues that more protracted sickness was partly a consequence of 'affordable convalescence', resulting from higher living standards.63 However, such a hypothesis is posited on the assumption that workers fundamentally do not want to work; if it were plausible, steadily improving living standards in the twentieth century would have been accompanied by increases in absenteeism from work through sickness that would have reached staggering proportions. In addition, it fails to take account of the fact that aggregate data on unemployment and real wages are relatively crude economic indicators, since they mask the profound sectoral shifts that were taking place in the late Victorian labour market, combined with technological innovation. Both of these were creating increasing job insecurity, which was manifested as an increasing 'sickness experience'. In the case of older workers, the disappearance of jobs - noted, as we have seen, by Charles Booth and many other insightful social commentators - must have led to their denning themselves as 'worn-out' or 'infirm' not according to some objective standard of health, but according to the diminishing opportunities offered by the labour market. Likewise, when employers increasingly told an older worker that he was 'too old to work' or 'too ill to work' or 'too slow to work', their judgements must have reflected changing economic realities. The increase in protracted sickness is consistent with a permanent disappearance of jobs. Here one is up against intriguing problems of evidence interpretation. The friendly society definition of sickness was 'inability to follow one's usual employment'. There were thus two elements to the 'sickness experience equation': the perceived health status of the individual, and the supply of jobs. Both elements need to be considered; but this is something that middle-class contemporaries conspicuously failed to do. Tantalisingly, what was not said was more striking than what was said: repeatedly, middle-class commentators alluded to the problem, but held back from openly discussing it. They could only define it in moralistic terms. For example, Sir Edward Brabrook pointed to the rising sickness benefit claims for each ten-year cohort of friendly society members, and noted that: 'an age comes when a man is not able to work any longer, and that age is approached by a gradual increase of the length of time during which a man, on the average, is unable to work'. Pointedly, he warned the societies that 'mere inability to work through old age is not within the terms of the contract' of insurance; but he understood why 'a liberal construction of the contract should exist, where a member has no 63

Riley, Sickness, pp. 172-6.

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source of maintenance, and would otherwise be compelled to seek relief from the Poor Law authorities'. Commentators such as Brabrook acknowledged that sickness claims could be affected by factors such as occupation, the character of the individual, strictness of benefit administration, region and even climate - but they pointedly refused to discuss economic restructuring. The most oft-cited explanation was that there was a considerable element of malingering which could not be anticipated by model life-tables.64 The 'moral hazard' explanation was also suggested by G. H. Ryan (a vice-president of the Institute of Actuaries), after hearing a preliminary version of Alfred Watson's important 1903 paper on sickness experience. Ryan commented that 'sickness results did not solely depend upon the law of nature, but the human will entered into them . . . there was what was called "malingering" on funds'. Ryan attributed this to lax administration, or higher benefits - the knowledge of which corrupted members. Another discussant warned that 'sickness was an extremely difficult subject to deal with', adding, significantly, that 'members were sick in times of bad trade, or want of employment'. Ralph Price Hardy (also a vice-president of the Institute) likewise hinted at possible labour market causes when he warned the societies that 'the premium for genuine human sickness did not provide an "out-of-work" benefit'; but Hardy would not elaborate.65 Alfred Watson was similarly elliptical in his analysis. He admitted that the explanation for increasing claims was 'probably not to be found in anything capable of statistical expression', but refused to take cognisance of labour market factors. Instead, he suggested a decline in working-class morality: there had been an increase in 'the claim habit' - by which Watson meant that the old stigma attached to claiming had gone.66 The problem with this 'moral hazard' explanation (always suggested by contemporaries in the most guarded of terms) was that it was inconceivable that the section of the working class most deeply imbued with Smilesean, capitalist values should have been avoiding work through fictitious sickness claims. Nor would friendly society members have allowed it. They would, however, have turned a blind eye to applications for sickness benefit from those of their members who were permanently displaced from the labour market, and society doctors 64 65

66

Brabrook, Provident Societies, pp. 8 4 , 8 8 , 1 1 2 - 1 3 . C o m m e n t s by G. H . Ryan, C. H . E. Rose and Ralph Price Hardy, in discussion of Alfred W. Watson, ' T h e Methods of Analysing and Presenting the Mortality, Sickness and Secession Experience of Friendly Societies, with Examples Drawn from the Experience of the Manchester Unity of Oddfellows', Journal of the Institute of Actuaries, vol. 3 5 , July 1900, pp. 3 2 3 - 4 , 327, 329. C o m m e n t by Watson, 'Discussion on Dr. Snow's paper', p. 5 1 3 .


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would have colluded by being more inclined to enter 'senile debility' on a medical certificate.67 Given that in the nineteenth century the boundaries between 'sickness', 'unemployment' and 'old age' were exceedingly blurred, the rise in sickness benefit claims must have reflected shrinking labour market opportunities. An increasing number of older friendly society members were defining themselves as 'worn-out' because there were a decreasing number of jobs for them. The societies' attitude to state pensions The attitude of the friendly societies towards the movement for old age pensions was complex. Superficially, a contributory state pension scheme threatened their very existence; and, given how few of their members had recourse to the Poor Law in old age, they had no direct interest in the problem of the aged pauper or the need to lower Poor Law expenditure.68 But the societies were very conscious of the poverty of the majority of the working class who were not their members. They were thus caught between a desire to perpetuate their own institutions and an understanding of their own irrelevance for the poorest in society.69 Thus a Manchester Unity member forcibly reminded his brethren that there were six million workers not in friendly societies who in old age needed the help of a pension scheme like Charles Booth's.70 Societies were also aware that a state old age pension scheme would relieve them of the obligation of supporting their older members, who were their greatest financial liabilities. All were agreed that older members presented a rather more difficult financial problem than younger ones: as Alfred Watson put it, 'if a branch is relieved of all its liability in respect of the older members, a position approaching solvency is frequently secured'.71 It is clear, then, that the 'attitude' of the societies was complex and divided. A further complicating factor was that the societies had differing attitudes depending upon which type of pension scheme was under discussion. They were implacably opposed to Blackley's scheme: being universal, compulsory, contributory and initially including sickness 67

68

69

70

71

See letter on the apparent increasing incidence of this, in Oddfellows Magazine, April 1895, p. 118. T h e societies felt that even the small number of friendly society members who went on to the Poor Law in old age was an over-estimate, since it mainly consisted of exmembers dividing societies. To the purist, these were not true friendly societies. Pat T h a n e , 'Non-Contributory Versus Insurance Pensions 1 8 7 8 - 1 9 0 8 ' , in Pat T h a n e (ed.), The Origins of British Social Policy (1978), p. 93; Treble, ' T h e Attitudes', p. 275. George Turner, 'State Pensions in Old Age', Oddfellows Magazine, vol. 27, no. 262, Oct. 1896, p. 310. Watson, Friendly Society Finance, p. 9.

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benefit provision, it most obviously threatened their business. As we have seen, matters were not helped by Blackley's clumsiness in casting aspersions on the societies' financial soundness by claiming that nine out of ten of them were insolvent. Thus although Blackley dropped his sickness benefit plan, the damage had been done: a special friendly society conference in 1887 rejected his scheme. Likewise, they voiced strong objections to the 1887 Select Committee on National Provident Insurance. 72 The second scheme under consideration was Joseph Chamberlain's voluntary, contributory one. Chamberlain was politically astute, and was thus very conscious of the potential opposition of the friendly societies. In evidence to the Aberdare Commission, he expressed his respect for their power: I attach the greatest importance to the co-operation of the friendly societies. They are brought into communication with all that portion of the working classes which is already thriftily minded . . . Their criticism would be very damaging . . . their opposition might easily be fatal and if they were universally to be opposed to any scheme that was proposed of this kind, I do not say that their opposition would be fatal, but I certainly should think twice myself before I attempted to proceed in face of a hostility which I should myself consider to be so important and so dangerous.73 As with every Chamberlain utterance, however, one is unsure how far he was talking up such opposition for the sake of political ends (in this case, inaction), or how far he was trying to win over waverers within the societies. The ambivalence of the friendly society position in the 1890s is revealed in Chamberlain's printed 'Notes of Evidence' to the Aberdare Commission (with his italics): 'Importance of their co-operation. Their political influence. Organised opposition might be fatal. Hitherto most of leading officials have criticised adversely', reads the relevant passage; but it is shortly followed by the rather more ambiguous entry: 'Signs of altered opinion. Letters from officials and members. Main reason of opposition, fear of any increased control or interference [by the state] .' 74

Thus throughout his evidence to the Aberdare Commission he praised them to the skies, and made strenuous attempts to show that his proposals would not threaten them. For example, one of his schemes of the 1890s envisaged a state subsidy for a contributory scheme administered by friendly societies. But they tended to remain suspicious of 72

73 74

Treble, 'The Attitudes', pp. 2 7 0 - 1 ; Report from the Select Committee on National Provident Insurance ( 1 8 8 7 ) , p. 14. Royal Commission on the Aged Poor, vol. Ill, pp. 6 6 5 - 6 . 'Notes of Evidence by T h e Right H o n . J. Chamberlain, M.P.', Joseph Chamberlain papers, JC 6/3/4/8.


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Chamberlain's political ambitions, and pointed out that his proposal would do nothing for male casual labourers and women. 75 The third type of state old age pensions scheme discussed in the 1890s was one that would provide a state subsidy to friendly societies or other thrift and saving institutions. On this, opinion was divided. In evidence to the 1893-5 Aberdare Commission, Sir Edward Brabrook asserted his opposition to such a subsidy, but at the hearings of the Rothschild Committee (which specifically examined such schemes) James Kirk (of the Ancient Order of Foresters) declared that such a scheme would help the societies. Likewise, Tom Hughes (board of directors of the Manchester Unity) said that state interference of this kind 'would be for the benefit of friendly societies'.76 Not surprisingly, what the societies feared most was a state contributory scheme, since it would have been impossible for their members to contribute twice over. Thus after some initial hostility they became quite welcoming towards the fourth type of scheme discussed in the 1890s Charles Booth's non-contributory, universal one (though there were some reservations that it might weaken the incentive to save). Since it would be funded from taxation, it would not draw off any of their business. Indeed, it might permit them to cease paying sickness benefit at age 65. Thus Reuben Watson declared his support for the Booth scheme, though he did express his concern that friendly societies should be doing more to encourage their members to take out proper annuity schemes; likewise the Revd Frome Wilkinson endorsed Booth. 77 The gradual thawing of friendly society opposition to the idea of state pensions has been well discussed by James Treble and others. 78 Not only was their attitude mixed, depending on the type of scheme under consideration, but there was a difference of attitude between the leadership and the consultant actuaries (who tended to appear before official committees), and the rank and file. There was also greater receptivity towards state help on the part of the smaller societies. It is thus quite wrong to think of one monolithic 'friendly society view': there were substantial differences of opinion, and one has to distinguish between the rather conservative institutional identity of the big societies and the attitude of their individual members. Thus, when asked if a state pension system for friendly society members would ease the burden of 75

76

77 78

'State Pensions for the Thrifty', Oddfellows Magazine, vol.26, no. 242, Feb. 1895, pp. 3 3 - 4 0 . Report of the Royal Commission on the Aged Poor, vol. Ill, p. 605; Report of the Committee on Old Age Pensions, 1898, C.8911, Minutes of Evidence, pp. 29, 40. Royal Commission on the Aged Poor, vol. Ill, p. 619, and vol. II, p. 311. Treble gives a full account of events in the 1890s and 1900s in 'The Attitudes', pp. 2 8 0 - 9 9 .

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sickness benefit to their older members, James Kirk replied: 'I believe so. I believe that is the feeling of the rank and file; mind you it is not the feeling of our leaders. I am bound to say that.'79 In short, by the end of the 1890s there was a vigorous debate within the friendly society world over the question of non-contributory pensions. On the one hand, the year 1898 saw the formation of the Old-Age State Pension League which wanted only a scheme for members of thrift agencies; on the other hand, in the following year there was formed the National Committee of Organised Labour for Promoting Old Age Pensions, which drew support from many of those very trade unionists who were staunch friendly society members and campaigned for universal, tax-funded state pensions at age 60. At the famous Browning Hall Conference of 13 December 1898 (usually taken to be the start of the organised labour movement's campaign) friendly society participation was insignificant; but, of the 630 delegates who attended a later conference at Birmingham (on 25 March 1899), fully 175 were from the Manchester Unity, 132 from the Foresters and 40 from three smaller societies. Many friendly society members were, on an individual level, active in the pensions campaign: for example, W. C. Steadman (chairman of the TUC's Parliamentary Committee) had been a member of the Hearts of Oak Benefit Society for thirty years; though he was 'as keen a friendly society man as he was a trade unionist', he felt it was now time for the societies to recognise the limitations of their cover, and support universal, non-contributory pensions.80 This view was also expressed by many participants at the labour movement's 1902 pensions conference at the Memorial Hall, Farringdon, London. Most speakers recognised the 'strong feeling' on the part of friendly societies towards noncontributory state pensions that would go to the 'thriftless' in society: Frederick Maddison, for example, believed that workers should join a friendly society - 'he regarded the man who ignored co-operation or friendly society as lost to all sense of his own conduct'. But most delegates recognised that friendly societies could never cover women and the low-paid.81 By the late 1890s and early 1900s, socialist campaigners were criticising the societies for their insularity, passivity and conservatism. They were being seen as increasingly out of touch with the growing radicalisation of the mainstream labour movement. Frederick Rogers pointed out that the friendly society movement did not appeal 'to ardent 79 80 81

Report of the Committee on Old Age Pensions, 1898, Minutes of Evidence) p. 4 0 . Report of Proceedings of the Thirty-Fourth Annual Trades Union Congress, 1901, p. 75. Report of the Old Age Pensions Conference, 1902.


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souls who werefilledwith a zeal for reform. Its aim is simply to make the best of things as it finds them'; for example, the societies did not join the struggle for higher wages. They were not based upon any great principle other than saving, said Rogers, and 'hoarding, even when it is redeemed from all its sordidness by the touch of a fine social enthusiasm, does not carry us far in facing the poverty problem'.82 Thus any scheme based upon a state subsidy to friendly societies would not work: it would be unfair to tax everyone just to benefit society members; the state could not underwrite insolvent societies; in many regions, societies did not exist; many could not join a society because they could not pass the medical inspection on entry; and the societies did nothing for women and the low-paid.83 Interestingly, this critical stance caused socialist pension campaigners to over-emphasise the 'insolvency' of friendly societies as much as did the middle-class actuaries.84 Criticisms like these had the desired effect, as did the societies' awareness that they were becoming increasingly at odds with the majority of the labour movement. By 1902 and 1903, motions in favour of state pensions had been passed by the National Conference of Friendly Societies. The first of these declared 'That it is the duty of the state to provide an old age pension of not less than 5s Od a week to all thrifty and deserving persons of 65 years and upwards where unable to work and in need of the same'. Though this could have been interpreted as a call for a Chamberlain-style scheme limited to the friendly societies, Frederick Rogers interpreted this event as the societies' leadership belatedly coming into line with the TUC and the Co-operative Congress.85 In 1907 even the Ancient Order of Foresters (which had been intransigently opposed) announced its support for selective, non-contributory pensions. But friendly society opinion continued to be divided right up to the time of the passage of the 1908 Old Age Pensions Act: a survey of society opinion on non-contributory state pensions (conducted by the Chief Registrar) showed that, of 151 societies replying, 67 thought that such a scheme would 'have an injurious effect' on them, 64 thought it would not, and 20 societies refused to commit themselves.86 However, there is no doubt that the 1908 Old Age Pensions Act and the 1911 National Insurance Act helped the societies by enabling them to 82 83

84

85 86

Rogers a n d Millar, Old Age Pensions, p p . 2 7 - 9 . N a t i o n a l C o m m i t t e e of Organised L a b o u r , Why We Should Not Subsidise the Friendly Societies to Get Old-Age Pensions (c. 1 9 0 0 ) . See, for e x a m p l e , F r a n c i s H e r b e r t S t e a d , How Old Age Pensions Began to Be (c. 1 9 1 0 ) , p . 127. Rogers a n d Millar, Old Age Pensions, p p . 5 4 - 5 . Gilbert, The Evolution, p . 2 2 0 .

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adopt changed life-tables for new entrants which provided for the cessation of sickness benefit at the age of 70. 87 In explaining the shift of attitude of the friendly societies towards state pensions, one not only has to distinguish the different types of pension proposal, but one must also place the societies in a broader economic and political context. As has been argued in this chapter, an interpretation which over-stresses demographic and epidemiological factors such as that advanced by Bentley Gilbert - only tells part of the story, and ignores the profound changes that were taking place in the labour market. A complex and at times rather technical refutation of Gilbert's thesis has been offered in this chapter, and this refutation accords with the testimonial evidence of contemporaries. For example, during the proceedings of the Rothschild Committee, Tom Hughes (of the Manchester Unity of Oddfellows) was specifically asked by Lord Rothschild: 'Do you think that the demand for state aid [for friendly societies] has anything to do with the actuarial unsoundness of some of the lodges, or do you think that it is a spontaneous feeling that the state ought to help those who help themselves by care during certain periods of their life?' Hughes replied: 'I think that to a large extent it is a spontaneous feeling on the part of the members.'88 What Hughes identified as a 'spontaneous feeling' was actually the product of growing insecurity in the labour market and a changing political culture. Thus a crucial factor in the societies' shift of attitude was that the labour movement generally was becoming more politicised. By the end of the 1890s, the craft unions were coming round to supporting the idea of an independent labour representation in parliament, and were less off-hand towards the new unskilled unions. As many social historians have observed, the 'labour aristocracy' was feeling increasingly politically insecure, and unable to survive on its own. Friendly societies were not a conservative island unto themselves: their members also occupied the political world of organised labour. As the general labour movement took up the cause of non-contributory universal old age pensions with growing enthusiasm in the 1890s, so were the friendly societies pulled along in its wake. 87 88

B r o w n a n d Taylor, Friendly Societies, p p . 9 2 - 3 . Report of the Committee on Old Age Pensions, Minutes of Evidence, p. 2 9 .

The labour movement and the state

Having begun as a highly conservative movement, initially dedicated to a tightening-up of the Poor Law and then encompassing industrial concerns about the alleged inefficiency of the 'worn-out' worker, the campaign for old age pensions took a very different turn in the 1890s. It became the central demand of the British labour movement's social programme, and part of a wider socialist strategy for redistributing wealth through welfare policies. After growing interest shown by the Independent Labour Party and the Trades Union Congress in the 1890s, the socialist demand for pensions was expressed in the 1900s through the 'National Committee of Organised Labour for Promoting Old Age Pensions For All' (NCOL). This organisation was the principal pressure group that brought about the 1908 Old Age Pensions Act. The role of the organised labour movement was crucial, especially in ensuring that the 1908 scheme was non-contributory.

Socialism and old age pensions After its hesitant beginnings, socialism in Britain came of age in the 1890s with the formation of the Independent Labour Party (ILP) in 1893. What distinguished the ILP was its commitment to a clearly denned socialist programme that would redistribute wealth to the working class. The 'social' programme passed at the inaugural conference (at Bradford, on 13 and 14 January 1893) demanded: the abolition of overtime, piecework and child labour; a maximum eighthour day in all trades and industries; provision for the sick, disabled, widows and orphans (to which was added in the following year 'the necessary funds to be obtained by a tax upon unearned incomes'); and collective ownership of the land and all means of production, distribution and exchange. There was a 'political' programme, seeking the reform of parliamentary democracy (including the abolition of the monarchy and the House of Lords); and a 'fiscal' programme, calling for the abolition of indirect taxation and the introduction of a 137

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graduated income tax.1 By 1896, the demand for pensions was more clearly defined: 'state pensions for every person at 50 (fifty) years of age, and adequate provision for all widows, orphans, sick and disabled workers'.2 Explicit discussion of old age pensions intensified at ILP Annual Conferences from 1899 onwards. Keir Hardie gave strong support in his 1899 chairman's address, and motions in favour followed in 1902, 1903, 1906, 1907 and 1908. At the same time, other socialist groups were voicing similar demands. H. M. Hyndman's Marxism-influenced Social Democratic Federation also sought old age pensions from the age of 50, with no qualifying conditions.3 The first appearance of the pensions issue at the TUC Annual Conferences came in 1892 (a year after Charles Booth and Joseph Chamberlain launched their campaigns). There was some suspicion that it was a fraudulent political issue: it was one 'we must approach with caution. There is a catchy sound about it, meant probably to snare the unwary', and Poor Law reform was said to have greater priority. But in the following year John Hodge introduced a motion in favour of 'a national State-aided system of old-age pensions', and similar motions appeared at practically every TUC Annual Conference for the next few years.4 There were several important reasons for the labour movement's espousal of old age pensions in the 1890s. First was the 'endowment' of old age. The term 'endowment' was frequently used by radicals in the 1890s and 1900s, and it requires a brief explanation. Normally a term applied to wealth inheritance, it had been deliberately commandeered by socialists to imply that the working class should enjoy the same automatic 'citizenship' right to support from the state in times of need that the wealthy enjoyed through family legacies. Hence 'motherhood endowment' was also a goal of some socialists and feminists in the 1900s, before it slowly metamorphosed into the more conservative family allowances movement of the 1920s. The ILP's social programme thus demanded the 'endowment' of those who found themselves in a position of economic distress through the contingencies of accident, illness, old age, orphanhood, etc. - a recognition that there were particularly vulnerable points in the working-class life course. The groups to be endowed were those who 1

2 3

4

Independent Labour Party. Report of the First General Conference, 1893, p. 10; Minutes of the Second Annual Conference of the Independent Labour Party, 1894, p. 13. Minutes of the Fourth Annual Conference of the Independent Labour Party, 1896, p. 33. A. M. MacBriar, An Edwardian Mixed Doubles: The Bosanquets versus the Webbs: A Study in British Social Policy 1890-1922 (1987), p. 91. Report of the Twenty-Fifth Annual Trades Union Congress, 1892, p. 29; Ibid., Twenty-Sixth,

1893, p. 50.


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were marginalised from the labour market. As such, socialists unwittingly adopted the 'social capital' criteria of liberal Poor Law reformers who advocated 'generous' state provision for those irrelevant to the capitalist process. They also implicitly accepted the 'male breadwinner' model of social relations within the family: income support was only to be provided for the working-aged woman if she was 'husbandless' through the death, illness or disability of her male provider - an assumption that reflected the low formal labour force participation of married women at that point in history. Interestingly, the ILP on occasions even regarded some women's work as brutalising and enslaving: it was a scandal that some wives and mothers were 'compelled to go to the mills and factories because their husbands can't earn sufficient to keep their families in necessaries'.5 Such endowment of the marginalised was expressed in language that stressed rights, justice and the claims of citizenship, rather than the need to remove them from the Poor Law in order to bring punitive sanctions against the able-bodied male. A second motive for supporting old age pensions was that the endowment of old age would be one of several social policies through which wealth distribution would be achieved. Here we must be wary of attributing one single, monolithic view to all members of a labour movement that was extremely heterogeneous. On the moderate wing were activists like Francis Herbert Stead and Frederick Rogers, who viewed old age pensions primarily as a moral question of social justice. Stead's famous account of the labour movement's campaign, How Old Age Pensions Began to Be (1910), is written in an almost mystical Christian socialist style, with virtually no trace of hostility towards the capitalist class. Stead and Rogers viewed old age pensions very much as a 'single issue' campaign, in which it was important to build bridges with all political parties and interest groups: 'Keep yourself carefully from entangling alliances with any political parties. Our demand is not a partisan one. It is supported by men of different parties, and our movement must be colour-blind to party distinctions. Our appeal is to "good men in all parties".'6 After the 1908 Act had been passed, Rogers was convinced that the main reason for the National Committee's success had been its non-partisan approach. Of course, this 'classless' moral stance was also tactically necessary in order to convert a parliament that contained very few working men with labour sympathies. Like many socialists of the 1900s, Rogers viewed the existing parliamentary 5 6

ILP pamphlet, To the Women of the ILP (n.d., c. 1890s). F. H. Stead, Hints to a Helper (National Committee of Organised Labour pamphlet, n.d. c. 1901); see also, Frederick Rogers, Politicians and Old-Age Pensions (n.d., c. 1903).

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democracy, based as it was upon an exceedingly limited franchise, as something of a fraud: he saw the party system as 'simply sectarianism in politics'.7 By contrast, radical left-wingers viewed old age pensions as part of a broader strategy for using the parliamentary machinery to pass expensive pieces of social legislation, involving punitive levels of income tax levied on the rich: by this parliamentary, entirely constitutional means, the capitalist class would be stripped of its wealth and power. (This rationale for state pensions was to be a strong motive of left-wingers, until cleverly outmanoeuvred by the Conservative government's 1925 Widows', Orphans' and Old Age Contributory Pensions Act.) A universal, non-means-tested pension of 5s Od per week at the age of 60 (or even 50), funded entirely out of income tax, would be highly redistributive. As W. J. Vernon said, in a very socialist presidential address to the 1899 TUC Annual Conference, 'We are annually gathering up the leaves, whilst the evil tree, with its millions more of leaves yet to fall, is practically left untouched. The evil tree should be cut down.' Old age endowment was thus to be funded cby a reasonable and equitable system of taxing ground values and an extension of the graduated income tax', in which 'no taxation would be exacted from the working class'.8 It is thus slightly missing the point to argue, as Peter Hennock has done, that the NCOL 'were political innocents, not much concerned to calculate the relation between means and ends'.9 Instead, they began from the presupposition that a socialist society was desirable, and possible to achieve by the parliamentary machinery. Repeatedly, socialists argued that the money was available to fund even the most expensive contemplated pension scheme (£26,000,000), and cited statistics to prove this. In Riches and Poverty (1910 edn) Leo Chiozza Money estimated that, of £1,844,000,000 total national income, 5,500,000 persons out of a total population of 44,500,000 received fully one-half, and the remaining half was received by the remaining 39,000,000 persons. More than one-third of the nation's total income was enjoyed by less than one-thirtieth of its people.10 Frederick Rogers quoted an Inland Revenue estimate that the increase in gross national income between 1894-5 and 1901-2 had been £209,896,000, an 7

8

9

10

National Committee of Organised Labour (NCOL), Tenth and Final Annual Report and Balance Sheet, July 1908-July 1909, (n.d.) p. 13. Report of the Thirty-Second Annual Trades Union Congress, 1899, p. 27; Ibid., TwentySixth, 1893, pp. 27,51. E. P. Hennock, British Social Reform and German Precedents. The Case of Social Insurance 1880-1914 (1987), p. 123. Leo Chiozza, Money Riches and Poverty (1910 edn), p. 48.


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11

increase of 32 per cent. Likewise, in the House of Commons in 1907 George Barnes argued that in 1900, nine rich men had died leaving estates totalling over £19,000,000, and that since 1900 forty-six had died leaving estates worth over £78,000,000. 1 2 A central aim of the labour movement at this time was thus to reform the system of taxation. Indirect taxes were seen as taxes on the poor, and were to be replaced by direct taxes on land, property and high incomes. The ratio of direct to indirect tax revenue had steadily increased over the course of the nineteenth century: in 1840-4, direct taxation had raised £12,800,000 and indirect taxation £37,400,000 (or a ratio of 1:3); by 1900-4, these figures were £59,400,000 and £67,400,000 respectively (nearly equal). In order to achieve what Peter Fraser has called 'a comfortable revolution by Act of Parliament', socialists in the 1900s proposed to abolish all indirect taxation, and add £72,000,000 to budgetary revenue raised by a steeply graduated income tax, providing a surplus for improved state education, old age pensions, maintenance for the unemployed, and the payment of MPs: this was 'the socialist budget'. 13 They were thus impatient with the claims of Chancellors of the Exchequer in the early 1900s that the middle and upper classes were 'overtaxed' and that budgetary surpluses should go towards reductions in income tax rather than state pensions. In short, the demand for old age pensions was expressed by left-wing socialists in the language of explicit class conflict. A third argument deployed in favour of pensions related to this class antagonism. It was maintained that the non-working class were already well endowed in their old age. The wealthy enjoyed inheritance, and the middle classes received private pensions or public service pensions paid for by the taxpayer. Hence George Barnes pointed out in 1906 that there were 171,000 ex-public servants receiving retirement pensions totalling £7,903,000. 1 4 (Interestingly, this was almost exactly what the 1908 state scheme was to cost in its first version.) Likewise, Keir Hardie's response to the question of where the money for pensions was to be found was merely to state that no such difficulty existed when public service pensions were paid; and George Barnes argued that, if the industrial system would not pay workers during their working lives the wages sufficient to put something by for old age, then the state had a moral obligation to provide old age pensions, just as it provided 11

12 13

14

Frederick Rogers, A Plea for Old-Age Pensions (c. 1907), pp. 3 - 4 ; Rogers, Our Aged Fellow Subjects (c. 1903). HofCDeb., 4s, vol. CLXIX, 12 Feb. 1907, col. 220. Peter Fraser, Joseph Chamberlain: Radicalism and Empire 1868-1914 (1966), pp. 284-6; Philip Snowden, An Autobiography (2 vols., 1934), vol. I: 1864-1919, ch. 9. Report of the Thirty-Ninth Annual Trades Union Congress, 1906, p. 146.

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'deferred pay' pensions for its servants. W. J. Vernon was less moderate in tone. On the alleged difficulty of finding the money for state pensions, he mockingly pointed out that 'No difficulty arises when the landlords or clergy are under consideration, or some great general, who had been responsible for the speedy exit from this world of a few thousands of black men.'15 The outbreak of the Boer War in October 1899 may have given Lord Salisbury's government the excuse to do nothing on the pensions issue, but it steeled the resolve of labour activists to reject the argument that universal state pensions were 'unaffordable'. The war eventually cost something like £250,000,000, and the TUC Annual Report for 1902 gleefully quoted Joseph Chamberlain as saying that, had the war cost twice as much, it would still haye been worth fighting.16 It is clear, therefore, that, in debating the 'affordability' of state pensions, socialists were operating from an entirely different set of political premises than were Liberal or Conservative politicians. Another quite separate argument for old age pensions advanced by socialists was that capitalism was entering a significantly new phase, characterised by technological innovation, new labour-saving machinery, a speeding-up of production methods, scientific management, greater alienation between capitalist and worker - and hence the displacement of older workers. Old age pensions would recognise the claims of those 'worn-out industrial workers' who lived in dread of hearing from an employer the words 'you are too old to work'.17 (One of the National Committee's most published pamphlets was Rogers's selfexplanatory The Worn-Out Workman: What is to be Done With Him? (c. 1900).) The increasing insecurity felt by all workers, and especially the aged, was described by W. J. Vernon to his fellow TUC delegates: The steady elimination of the direct employer, together with the rapid progress which is being made in the direction of trusts and combines and the continued introduction of wage-saving machinery, threatens the very existence of the workers, and should be sufficient to cause you to pause, and ask yourselves the question: In what position are we likely to find ourselves in the near future, pursuing the same methods as we are pursuing today?18 Thus TUC and ILP pension campaigners sought pensions paid from 15

16 17

18

Speech by Hardie, reported in NCOL, Seventh Annual Report and Balance Sheet, July 1905-July 1906, p. 15; Barnes, Report of the Fortieth Annual Trades Union Congress, 1907, p. 182; Vernon, Report of the Thirty-Second Annual Trades Union Congress, 1899, p. 48. Report of the Thirty-Third Annual Trades Union Congress, 1902, p. 33. Independent Labour Party. Report of the Fourteenth Annual Conference, 1906, p. 41; Francis Herbert Stead, How Old Age Pensions Began to Be {c. 1910), pp. 5-6. Report of the Thirty-Second Annual Trades Union Congress, 1899, p. 48.


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the age of at least 60, or at any age on the grounds of infirmity: the pension would be 'the right of every worker when incapacitated from further labour'.19 There was also a more self-interested trade union motive for endowing the 'worn-out5 worker - and one that was to grow in importance in subsequent years. The existence of a reserve army of labour had long been a concern of trade unionists: in Das Kapital, Marx had discussed the 'relative surplus population', which included those 'who have lived beyond the worker's average life-span'; they 'weighed down' the 'active army of workers' during periods of economic stagnation, and 'put a curb on their pretensions' during periods of over-production.20 The endowment of old age would encourage older workers to withdraw from employment, thus 'tightening up' the labour market: there would be removed a potential reserve army of labour, whose presence - in competition with younger workers - permitted employers to undercut trade-union-negotiated wage rates. Old age pensions and workmen's compensation were a dual strategy directed at this end. (For this reason, the labour movement was determined to improve the 1897 Workmen's Compensation Act.) As James O'Grady said in his president's address to the 1898 TUC Annual Conference: 'if preference will be given to the young men with whom the risks of accidents are less . . . pensions for old age will be advanced a considerable step nearer to realisation.'21 The contradictory implications of this argument went unremarked: on the one hand, the pension was to be a 'citizenship' reward for service in the labour market (service by women in the domestic sphere was little mentioned); on the other, older citizens were to be corralled off into economic uselessness. But to trade unionists, the evident reality was that late-industrial capitalism was already marginalising older workers, and would surely continue to do so. One other paradox worth noting is that trade union leaders, at this stage, were not awake to the danger (voiced by devotees of classical economics, such as the Charity Organisation Society) that paying pensions to older workers without a retirement condition or a means test would actually worsen the problem of a reserve army of labour by subsidising their low wages. Only later was this to become evident. Finally, old age pensions were placed in the context of Poor Law reform. Not surprisingly, the labour movement did not share the enthusiasm of Blackley, Chamberlain and Booth for a 'back to 1834' 19 20 21

Ibid., p. 48; ibid., Thirty-Seventh, 1904, p. 97. Karl Marx, Capital: A Critique of Political Economy, vol. I (1976 edn), p. 797. Quoted in W. C. Mallalieu, 'Joseph Chamberlain and Workmen's Compensation', Journal of Economic History, 10, May 1950, p. 56.

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policy of renewed deterrence towards the able-bodied male. Nor were its members obsessed with the fear that 'pauperisation' might lose its meaning if outdoor relief were relaxed: 'I am not concerned greatly about the question of pauperising', was Rogers' terse dismissal.22 Labour's desire, by contrast, was to replace the entire Poor Law by specific measures (old age pensions, widows' and orphans' pensions, 'work or maintenance' for the unemployed, expanded state education for children, and so on); and, short of that, to end what was seen as 'maladministration' (basically, the denial of outdoor relief to needy cases), to remove all civil disabilities placed upon paupers and to work for the full 'democratisation' of relief so that the working class could get elected to Boards of Guardians. For Rogers, the system of poor relief to the aged was 'clumsy, wasteful, and often needlessly cruel, and old age pensions would be cheaper, more humane, and more scientific as well'.23 Poor Law officials lacked the competence to decide between the 'deserving' and the 'undeserving'. The way the system operated in practice, those who had been thrifty during their past lives were denied relief, while the profligate were rewarded. Besides, Poor Law inquisition was humiliating: it 'violated the chaste reticence of the self-respecting poverty', by 'compelling it to lay bare its sacredly-guarded secrets to the public gaze'.24 Thrift would be best encouraged by paying universal state pensions as of right, entirely separate from the Poor Law. As we shall see, this concern with the penalisation of thrift was to be a recurring one in the labour movement's attitude to means-tested pensions after 1908. Hence as early as 1893, in his president's address to the TUC Annual Conference, Samuel Monroe advocated the total abolition of the existing 'poor-law and pauper-making system'. John Hodge's motion at that conference argued that the 'maladministration' of the Poor Law would be best remedied by a system of old age pensions 'by which no taxation would be exacted from the working classes', and which would not interfere with the existing superannuation schemes run by trade unions. (Trade union insistence on a universal pension system, with no means tests, arose partly from growing fears at this time of state interference in friendly society and trade union benefits, especially those that were used to subsidise strikes.) Other TUC delegates wished to see the election of 'working men' as Guardians.25 Motions on Poor Law reform followed at several TUC Annual Conferences, though by the 22 23 24 25

Rogers, A Plea, p . 8. Frederick Rogers, The Present Position of Old Age Pensions (n.d., c. 1 9 0 3 ) , p. 2. N C O L , Old Age Pensions for All. An Appeal to the Electors (n.d., c. 1900s). Report of the Twenty-Sixth Annual Trades Union Congress, 1 8 9 3 , pp. 3 0 , 5 0 - 1 .


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early 1900s it was obvious that the Poor Law was going to be replaced by alternative social legislation.

The National Committee of Organised Labour The labour movement's growing interest in old age pensions was transformed into a practical campaign in 1898. The moving spirit was Francis Herbert Steady warden of Robert Browning Hall, Walworth, London, who seems to have become interested in the question of old age pensions as one of several topical social issues. Stead had invited William Pember Reeves (of the New Zealand High Commission) to Browning Hall on several occasions to speak on his country's scheme (in the design of which he had been involved). Stimulated by this, Stead assembled a conference on 13 December 1898 at Browning Hall. This event was the acknowledged starting point of the labour movement's organised campaign. The Browning Hall Conference was attended by trade union leaders representing over half a million members, some trades council officials, and a motley collection of smaller friendly society figures. Prominent labour leaders included George Barnes (of the Amalgamated Society of Engineers), Will Crooks (chairman of the Poplar Board of Guardians), Frederick Maddison, MP, and J. Sansom (of the National Union of Gasworkers and General Labourers). As in all the labour movement's pensions agitation, the 'new unions' of the unskilled played an important part. The notable event was the appearance of Charles Booth. Though Booth was an unimpressive speaker, his presence gave enormous respectability to the gathering, and assisted Stead's efforts to make the pensions campaign a 'single-issue', non-party one. The underlying conservatism of Booth's position created few problems for his largely socialist audience, who seemed blithely unconcerned with the fact that Booth argued the case for pensions in the context of the need for a stricter Poor Law. As Peter Hennock has observed, all that mattered to the labour movement was that Booth shared their view that the aged should be lifted off the Poor Law.26 The Browning Hall Conference was followed by regional conferences, at Newcastle, Leeds, Manchester, Bristol, Glasgow and Birmingham (much to Joseph Chamberlain's embarrassment), at which Booth also spoke. With the campaign quickening in tempo, the government appointed the Chaplin Committee on 25 March 1899, and on 1 May Charles Booth published Old Age Pensions and the Aged Poor. Finally, on 26

Hennock, British Social Reform, p. 124.

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9 May there was formed the 'National Committee of Organised Labour for Promoting Old Age Pensions for All'. The National Committee was to spearhead the labour movement's campaign for the next nine years. Reflecting Stead's and Rogers' desire to remain non-party, it sought to enlist the support of 'all politicians from whatever school who will work for a sound system of pensions for aged persons who need them'.27 Approval was also obtained from the organised churches. For example, a deputation was sent to the Archbishop of Canterbury in January 1900, and pledges were forthcoming from various senior bishops.28 Adopting the tactics pioneered by previous pressure groups, the National Committee published brief pamphlets which were sent out in large numbers and it networked energetically within the labour movement. It was funded by subscriptions from labour organisations, plus large annual donations from Charles Booth and George Cadbury: for example, in 1901-2 these two men gave £150 out of the NCOL's total subscriptions of £221 3s 6d. The publication of the Chaplin Report in July 1899 was the high point in the National Committee's first year, since it seemed likely to be followed shortly by a government promise of legislation. However, in October 1899 there occurred the outbreak of the Boer War. 'The great wave of passionate enthusiasm which has swept over the country', as Rogers put it, diverted attention from social reform and, more importantly, gave the Conservative government the perfect excuse for further delay.29 Within the cabinet, only Joseph Chamberlain showed any real commitment to the cause of pensions, and, as Colonial Secretary, he was fully occupied with the South African question. In addition, as the labour movement intensified its efforts and would obviously only settle for a universal, tax-funded pension scheme, so Chamberlain became increasingly evasive. 'Our second year has been full of events which have been almost entirely hostile to our work', wrote Frederick Rogers of the period July 1900 to July 1901. 30 But the National Committee did not let up in its efforts, and continued its propaganda work. It drew some comfort from the fact that parliamentary candidates were put under pressure on the pensions issue when campaigning in the 1900 general election. But there was acute frustration that a Parliament without a significant bloc of independent labour MPs proved continually evasive: 'Of vague sympathy there was enough and to spare, of sitting on the fence not a 27 28 30

N C O L , First Annual Report and Balance Sheet, July 1899-July 1900 (n.d.), p. 6. 29 Ibid., pp. 6 - 7 . Ibid., p. 11. N C O L , Second Annual Report and Balance Sheet, July 1900-July 1901 (n.d.), p. 9.


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little, and of a clear understanding of the conditions of the problem, some.'31 However, after the Boer War ended in 1902, the National Committee's campaign picked up. The TUC had instructed its Parliamentary Committee to convene a conference on old age pensions, and this was to produce the most significant event of 1902. On 14 and 15 January, a conference was held at the Memorial Hall, Farringdon, London, representing 118 trade unions, 12 trades councils and 74 co-operative societies. Because it was about to hold its National Congress in two months' time, the National Conference of Friendly Societies did not participate (although two individual friendly societies attended). At the Memorial Hall Conference, the inaugural address was given by W. C. Steadman, of the TUC Parliamentary Committee. He ridiculed the prevarication of the various official committees of the 1890s, criticised the Poor Law's treatment of the aged (arguing that state pensions would be a more humane alternative) and exposed Joseph Chamberlain's caution. Five motions were debated, which combined together called for a national scheme of old age pensions, non-contributory and funded entirely out of imperial taxation, of at least 5s Od per week, payable from the age of 60.32 The state's response At this point, it is appropriate to examine briefly how the old age pensions debate moved into the portals of government in the 1890s, via the proceedings of several official committees. In essence, these committees explored the different positions on the question of whether or how outdoor relief should be granted to the aged: none at all (the COS); only to the 'deserving' (Local government Board); greatly relaxed - possibly even as of right - to all aged; contributory old age pensions (compulsory or voluntary) supplemented by outdoor relief; finally, all outdoor relief to the aged replaced by universal, non-contributory old age pensions (advocated by Charles Booth and by the socialists - but for very different reasons). The debate in the 1890s was essentially conducted across this spectrum, and was evident in the proceedings of several important official committees of enquiry. The activities of Canon Blackley's National Providence League had been rewarded in 1885 with the appointment of a House of Commons Select Committee on National Provident Insurance under the chairmanship of Sir Herbert Maxwell. Established 'to inquire into the best 31

Ibid., p. 11.

32

Report of the Old Age Pensions Conference, 1902.

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system of National Provident Insurance Against Pauperism', this committee examined five suggested schemes, of which most time and attention was devoted to Blackley's. The committee's unsurprising verdict was that many of the poorest class would be unable to save the necessary deposit between the ages of 18 and 21 required by the Blackley scheme. It commented: Among the poorest classes so many exceptions would have to be made in case of both women and men that the scheme would to a great extent fail to benefit many of those who at present add very largely to the pauperism of the country. It would not assist those who are out of work, or compel those who are idle and dissolute to go to work. This was, of course, the classic dilemma of all suggested contributory schemes of the 1880s.33 The quickening of political interest in the 1890s was reflected in the appointment by Gladstone's Liberal government of a Royal Commission under Lord (Henry) Aberdare in 1893. The remit of the Aberdare Commission revealed with perfect clarity how the twin issues of Poor Law reform and old age pensions were interlinked and part of the same problem: its terms of reference were essentially to consider whether outdoor relief should be made easier for the aged to claim (possibly even obtainable as a right), or whether they should be lifted off the Poor Law completely, so that it could henceforth impose a stricter discipline on the able-bodied male. The membership of the Aberdare Commission covered a wide range of opinion, except in one respect: despite the feminisation of poverty in old age, it contained no women. Lord (Lyon) Playfair effectively assumed the chairmanship on Aberdare's illness in December 1894, and became formal chairman on the latter's death on 25 February 1895 the day before the report was due to be signed. (There was some resentment on the part of the bolder spirits on the commission that Playfair had watered down passages drafted by Aberdare which had firmly recommended a state pension scheme.) The Prince of Wales personally requested to serve on the commission, but resigned from it on 19 February 1895 because of the party political implications of its recommendations. Other leading figures on its membership were Joseph Chamberlain, Charles Booth, Henry Broadhurst (of the Trades Union Congress), the veteran agricultural trade union leader Joseph Arch, Charles Stewart Loch (secretary of the Charity Organisation Society) and Charles Ritchie (President of the Local Government Board between 1886 and 1892). There were widespread suspicions that its membership 33

Report from the Select Committee on National Provident Insurance (1887), pp. iii-viii.


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had been deliberately chosen in order to create the maximum of conflict and disagreement.34 Yet it is precisely this conflict of views that makes the Aberdare Report such a fascinating record of the social politics of the 1890s - particularly in its minutes of evidence, where is to be found the real cut-and-thrust of debate. The main report ranged widely over the emerging dilemmas in the Poor Law's treatment of the aged, summarising all the tendentious 'outdoor relief versus pensions' arguments in the income support of the aged poor. Too politically paralysed by the clash of interests of its members, it simply avoided making a bold decision. It felt able to recommend none of the pension proposals put to it, and rather weakly suggested two main courses of action: first, no fundamental alteration of Poor Law practice, but a greater distinction between the 'respectable' aged who became destitute, and those aged whose destitution was brought about by their own misconduct (it declined to elaborate on how this distinction might be drawn) - with higher levels of outdoor relief being paid to the former; second, some development of Post Office annuity schemes. The main report concluded with a blaze of optimism about the growth in the working class of friendly society membership, saving, self-reliance, and so on, but acknowledged the 'widespread expectation' that some provision other than the Poor Law would have to be introduced for those aged poor 'who have led respectable and industrious lives'.35 In effect, the issue had been left for others to pick up. The controversies attendant upon the report's proceedings were reflected in the plethora of minority reports that were published along with the main report. These are impossible to summarise briefly, as they represented different positions on the 'outdoor relief versus pensions' spectrum. Some strongly supported the relaxation of outdoor relief to the 'deserving' aged; some opposed this as creating what C. S. Loch called a 'privileged class who should receive outdoor relief as a kind of right'; Chamberlain, Ritchie, Booth and two others objected to the inadequacy of the report's recommendations; Loch emphatically rejected any state pension scheme, preferring a policy of advice and guidance to the aged poor; and Henry Broadhurst outlined the socialist case for universal non-contributory pensions. The report's minutes of evidence showed that, by the mid-1890s, 34

35

For the background, see Patricia Mary Williams, 'The Development of Old Age Pensions Policy in Great Britain, 1 8 7 8 - 1 9 2 5 ' (University of London (LSE) Ph.D. thesis, 1970), pp. 7 9 - 9 0 . Report of the Royal Commission on the Aged Poor, vol. I, C-7684, 1895, pp. lxxxiii-lxxxvii.

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proponents of the middle way solution of a compulsory insurance-based pension scheme were running into difficulties. Robert Hedley (a Local Government Board inspector) pointed out in his evidence that a compulsory scheme was utterly impractical: 'in a free country', he said, 'where labourers migrate from place to place, and carry no certificate of identification with them, I think it would be extremely difficult'.36 Another witness feared that if the state made any contribution at all to a compulsory insurance scheme, then this would have a detrimental effect on the character of the working class.37 In other words, state-induced thrift was a contradiction in terms. Despite its inconclusive recommendations, the Aberdare Report did point the way to further action. In 1896, a year after its publication, Joseph Chamberlain (then Colonial Secretary) appointed a 'Committee on Old Age Pensions' under Lord Rothschild to investigate possible schemes. Rothschild's eight-strong team of members reflected its particular bias: three were Treasury civil servants and three were staunch friendly society men - Edward Brabrook (Chief Registrar of Friendly Societies), Alfred Chapman (parliamentary agent of the Ancient Order of Foresters) and Alfred Watson (consulting actuary to the Manchester Unity of Oddfellows). This was the first significant appearance of Watson who, as Government Actuary between 1917 and 1936, was to play such an important part in pensions policy-making. The Rothschild Committee's terms of reference required it to examine schemes 'for encouraging the industrial population, by State aid or otherwise, to make provision for old age', and to consider 'their effect in promoting habits of thrift and self-reliance', plus 'their influence on the prosperity of the friendly societies'. The committee considered over one hundred pension schemes submitted to it in evidence, dividing these into four types: (a) compulsory and contributory; (b) universal and non-contributory, but means-tested; (c) encouragement of voluntary insurance; (d) state aid towards only friendly society members. Despite the fact that 96 of the schemes submitted in evidence were non-contributory or compulsory, the committee interpreted its terms of reference as excluding types (a) and (b) above, and as focusing mainly on (c). These last were the only kind it could approve (with only one member dissenting). It maintained that only a small section of the working class really needed a pension in old age; a man who earned 20s Od per week should have no serious difficulty in contributing 2d per week into an existing scheme such as the Post Office deferred annuities 36

37

Royal Commission on the Aged Poor, 1895, C-7684-I, vol. II, Minutes of Evidence, pp. 9 4 - 5 . Testimony of Mr. Allen (Guardian of St Pancras Parish), ibid., p. 150.


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(which would provide 2s 6d per week at the age of 65). Such a perspective might have had some viability a decade earlier, but in the political world of the late 1890s it rendered the Rothschild Committee's proceedings instantly irrelevant. The conclusions of the Rothschild Committee were thus a bitter disappointment to pension campaigners. Conservatives were delighted: gleefully, the Charity Organisation Review commented that the committee's strictly limited scope of enquiry 'reflects credit on the Treasury official who was responsible for drafting it'.39 Among supporters of universal, non-contributory state pensions there were strong suspicions that these terms of reference had been carefully chosen in order to buy time, and that Joseph Chamberlain was being too innocent by half when he expressed disappointment at the committee's conclusions. Such compromise solutions were looking distinctly threadbare by this stage, as the question of old age pensions was being raised in parliament with increasing urgency. (In 1899, eight pensions bills were introduced into the House of Commons.) In response to this pressure (some thought as a means of dampening it down), Joseph Chamberlain appointed a Select Committee under Henry Chaplin (President of the Local Government Board) - its membership including David Lloyd George - to report upon 'the best means of improving the condition of the Aged Deserving Poor' and to investigate the feasibility of the bills presented to parliament. It was unclear whether the real concern of this committee was with the aged poor themselves or with the sanctity of the 1834 deterrent principles, when the report lamented that cases are too often to be found in which poor and aged people, whose conduct and whose whole career has been blameless, industrious, and deserving, find themselvesfromno fault of their own, at the end of a long and meritorious life, with nothing but the workhouse or inadequate out-door relief, as the refuge for their declining years.40 As has been shown, preservation of the sanctity of Poor Law principles was a major concern in the pensions debates of the 1880s and 1890s. Another had been the dilemma between, on the one hand, the 'painful position' and hardship of those deserving aged poor whose only source of maintenance in their declining years was the Poor Law and, on the other hand, the growth of working-class self-help institutions and the slow decline of old age pauperism. The problem, noted the report, was 'how to devise the means of making kindlier and more humane provision 38 39 40

Report of the Committee on Old Age Pensions, C. 8911 (1898), pp. 2, 13. 'Old Age Pensions', Charity Organisation Review, vol. 4 (n.s.), no. 20, Aug. 1898, p. 65. Report from the Select Committee on the Aged Deserving Poor, 1899, p. iv

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for the one class without doing anything to discourage or arrest the laudable efforts of the other'.41 The Chaplin Committee's report recommended a non-contributory pension of no less than 5s Od and no more than 7s Od per week, administered by County Councils (in order to keep the pension distinct from Poor Law relief), with local pension committees supervising claims. The vexatious problem of establishing 'deservingness' was resolved by the attachment of various conditions to be fulfilled by an applicant, which represented the consensus of many witnesses: a pensioner would have to be a British subject, aged 65 years or over, not convicted of an offence without option of a fine in the previous twenty years, not in receipt of Poor Law relief (other than medical relief) in the previous twenty years, not in receipt of income above 10s Od per week and who had 'endeavoured to the best of his ability, by his industry or by the exercise of reasonable providence, to make provision for himself and those immediately dependent upon him'. 42 The penultimate stage in this official interest was the establishment of a small departmental committee chaired by Sir Edward Hamilton (and consisting of Edward Brabrook, Samuel Provis and Noel Humphreys) to examine the practical problems involved in the Chaplin Committee's recommendation. Conducting its own census of a sample of old people, this departmental committee calculated the effect of the eligibility clauses. This was not always easy, as the statistical evidence was sometimes flimsy: in particular, persons imprisoned without option of a fine were not separated out in crime returns, and only an estimate could be made of those that would be excluded. Another problem was that the committee had to rely upon data from the 1891 census for total figures, and these data were inaccurate; up-to-date costings could only have been undertaken after the 1901 census. Again, the effect of the exclusion of those who had received non-medical Poor Law relief was to some extent conjectural; it was thought likely to debar some 27 per cent of persons aged 65 or over in England and Wales, but this was only an estimate. In all, the effect of these exclusions would be to lower the number of pensionable individuals in the United Kingdom from a total of 2,016,000 aged 65+ down to about 655,000 people receiving 5s Od pensions at a total cost of £10,300,000, including administrative costs. 43 Finally, in 1904 a small House of Commons Select Committee 41 43

42 Ibid., p. viii. Ibid., pp. ix-xii. Report of the Departmental Committee on the Aged Deserving Poor, Cd. 67, 1900. The excluded classes were: 741,000 persons with incomes above 10s Od per week; 515,000 paupers; 32,000 aliens, criminals or lunatics; and 72,700 unable to comply with the thrift test; giving a total of 1,360,700 excluded.


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(which included Lloyd George) considered the operation of various eligibility clauses. 44

The Liberal government Thus by the end of the 1890s the case for contributory pensions had effectively collapsed. Considerable obstacles still stood in the way of a tax-funded, universal scheme - notably the Conservative government's unwillingness to contemplate its cost. However, the year 1902 was an optimistic one for the NCOL. In March, the National Conference of Friendly Societies passed a resolution in favour of state pensions. 'After peace - pensions!' was the slogan at the end of the Boer War, with the hope that some of the level of taxation imposed during the war could be retained to pay for pensions. These hopes were dashed, however, when the April 1903 Budget gave a £12,000,000 windfall to the middle and upper classes in the form of a 4d reduction in income tax. Joseph Chamberlain launched his tariff reform campaign shortly afterwards, and though Chamberlain gave some veiled hints that the revenue raised could be used for pensions, tariff reform diverted attention from social reform. (The NCOL also believed that a tariff-funded pension scheme would be a contributory scheme by another name.)45 With the landslide electoral victory of the Liberal Party in 1906, the cause of old age pensions took a quantum leap forward. Fully 59 per cent of Liberal candidates had mentioned the need for pensions in their election addresses, the social reformist 'new Liberalism' was gaining influence within the party, and all twenty-nine Labour MPs were pledged to the programme of the National Committee. Ten members of the National Committee were now MPs, including John Burns (President of the Local Government Board), Thomas Burt, George Barnes, Will Crooks and J. R. Clynes. The chronology of what subsequently happened has been described by a number of historians, and needs only a brief mention here.46 During 1906, increasing pressure was brought to bear upon the Liberal government. Infused with confidence, the labour movement redoubled its efforts. On 27 February 1906, a deputation from the Parliamentary Committee of the TUC visited the new Chancellor of the Exchequer, Herbert Asquith, while the National Committee lobbied MPs. On 14 March, a resolution in favour of pensions was introduced in the House 44 45 46

Report and Special Report from the Select Committee on the Aged Pensioners' Bilk 1904. Gilbert, The Evolution, p. 199. See: Stead, How Old Age Pensions; Williams, 'The Development', chs. 7,8, 9; Gilbert, The Evolution, ch. 4; Hennock, British Social Reform, ch. 9.

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of Commons by the Labour MP James O'Grady, and was passed without a division. Both Asquith and John Burns made sympathetic noises: Asquith declared that 'on the broad grounds of principle' there was 'the strongest and keenest possible desire' on the part of the government to further the object of the resolution, and Burns even said that he supported a universal scheme paying 5s Odfromthe age of 65. However, the National Committee found - as the suffragettes were to find very soon - that Asquith, the consummate parliamentarian, had a clever way with words that made his promises appear to have greater substance than they actually possessed. Two very different interpretations of 'universality' were emerging: that of the National Committee, which meant pensions to all over a certain age; and Asquith's 'categorical' version, whereby numbers would be whittled down by a series of exclusions designed primarily to contain costs. This was very evident as negotiations progressed. On 13 June a National Committee deputation (Thomas Burt, George Barnes and the Liberal MP Leo Chiozza Money) visited Asquith, who gave it a sympathetic hearing while warning of the 'impossible' cost of what the labour movement was seeking. Some £15,000,000 would be needed for pensions at 65, equivalent to 6d on income tax. Thus Asquith supported universality, but 'subject to certain conditions' for exclusion, which he defined as 'non-residence and criminality'. Ominously, he discussed the possibility of a later qualifying age (68 or 70) and an income limit.47 Much the same occurred on 20 November 1906, when a deputation of 150 Labour and Liberal MPs put the case for pensions to the Prime Minister, Sir Henry Campbell-Bannerman, and Asquith. CampbellBannerman said that he 'entirely agreed' with everything the deputation had said, 'and he was only prevented by the limits of time and money from acceding to their requests'. A universal scheme would be 'the only satisfactory method . . . with, of course, certain well-understood exceptions'. A contributory scheme was entirely rejected as involving 'inquisitorial machinery'. The Prime Minister assured the deputation that the matter would be dealt with, 'as soon as time and money permitted'.48 Planning continued within the government, at a relaxed pace, but when the King's speech at the opening of parliament in February 1907 contained no reference to pensions there were vociferous protests from Labour MPs. However, two months later Asquith announced his budget for 1907, and included in it was a cautious promise that a beginning 47

48

N C O L , The Seventh Annual

Report and Balance Sheet, July 1905-July

1906 (n.d.),

pp. 16-17. NCOL, The Eighth Annual Report and Balance Sheet, July 1906-July 1907 (n.d.), p. 8.


155 49

would be made on pensions in the following year. However, only £2,250,000 was to be set aside to 'lay the foundations' of a pension scheme. Given that even the Chaplin Committee's recommended scheme - more limited than labour radicals sought - would have cost £11,000,000, fears were growing that Asquith was orchestrating endless delay. There was considerable Labour annoyance that one-third of the anticipated budget surplus of £3,700,000 was to go to the middle class, in the form of a 3d reduction in income tax.50 Asquith was in charge of the planning of pensions during 1907-8 (assisted by Reginald McKenna, President of the Board of Education), and in November 1907 the scheme was examined by a cabinet committee consisting of Asquith, McKenna, John Burns and, later, Lloyd George. Under Treasury pressure, two significant economies that were now introduced were the raising of the pensionable age to 70, and the lowering of the married couple's pension rate from 10s Od to 7s 6d. The 1908 Old Age Pensions Act On 7 May 1908 Asquith (who became Prime Minister on 7 April) presented the budget for which he had previously been responsible (as Chancellor of the Exchequer). In it, there was a promise of old age pensions, and a bill was soon forthcoming. The Old Age Pensions Bill began its second reading on 15 June 1908, introduced by Lloyd George as the new Chancellor of the Exchequer (who in effect took over from Asquith at the very last stage). As Bentley Gilbert has put it, it was 'the most meagre possible response to the conflicting pressures for old age pensions of the last decade'.51 Lloyd George himself was caught between a recognition of the very limited nature of the proposed pension scheme and an apprehension over the likely escalation of its cost in the future, given that a non-contributory scheme contained no automatic defences against popular pressure to make pensions universal, non-means-tested, payable at 60 and higher in amount. There had been some discussion of a possible contributory scheme, perhaps modelled on Germany's, but nothing came of this.52 Interestingly, at this stage the Treasury opposed even contributory pensions, preferring the option of more generous outdoor relief to the aged.53 In the parliamentary debates, there were many protests from Labour MPs at the bill's 49 51

52 53

50 HofC Deb., 4s, vol. XLXXII, 18 April 1907, col. 1191. Ibid.,pp. 10-12. Bentley B. Gilbert, Lloyd George: a Political Life. The Architect of Change 1863-1912

( 1 9 8 7 ) , p. 3 3 8 . For details, see Hennock, British Social Reform, ch. 9. Pat Thane, 'Non-Contributory Versus Insurance Pensions 1 8 7 8 - 1 9 0 8 ' , in T h a n e

(ed.), The Origins of British Social Policy (1978), p. 98.

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exclusion clauses, but the attitude of the labour movement was that the introduction of a non-contributory scheme was a significant victory and would provide the basis for further expansions.54 By contrast, the Conservative Party's strategy was to overload the bill with improvements by introducing eleven amendments, thus rendering it impossibly expensive. It is clear that the Conservative Party saw its long-term political objective as shifting the funding basis on to contributory insurance: in a famous diary entry for July 1908, Austen Chamberlain recorded that the attitude of senior Conservatives was to accept the bill 'as a temporary bridge to a complete scheme on a contributory basis'.55 In response to these amendments, five aspects of the bill were altered during its passage through parliament: a sliding scale means test was introduced, married couples were awarded the full double pension of 10s Od instead of 7s 6d, the pauper disqualification was limited to two years, paupers in receipt of medical relief only were not to be disqualified, and ten years' membership of a friendly society was accepted as fulfilment of the industry test. Nevertheless, despite these liberalisations, the Old Age Pensions Act which passed into law in 1908 was very limited in coverage. The level of pension was 5s Od per week, subject to a means test: any earnings above £21 per annum caused the pension to be reduced, shilling by shilling on a sliding scale, down to a minimum of Is Od per week; and above earnings of £31 10s Od per annum an applicant failed to qualify. Parliamentary pressure altered the original provision for a single cut-off point of £26 per annum. It is worth pausing briefly to examine the 'exclusion' clauses (relating to age, means, status and character) that made the new pension scheme less than truly universal. On one level, the purpose of these clauses was quite straightforward - to place an upper limit on expenditure. The Treasury had insisted that no more than £7,000,000 per annum should be spent and, in a non-contributory scheme, the only way of containing costs was to make the scheme selective in cover. In the Bill's planning stages, the cabinet committee had discussed long and hard the need to keep the scheme as inexpensive as possible. The committee's conclusions were summarised in a memorandum of 24 March 1908 by the Chancellor of the Exchequer, H. H. Asquith, demonstrating how the various eligibility clauses would whittle down the number of applicants and reduce total expenditure. Asquith warned that any scheme put forward at the moment would have to conform to 'certain very definite 54 55

For an account of Labour's attitude, see Snowden, Autobiography) Sir Austen Chamberlain, Politics From Inside: An Epistolatory

(1936), p. 118.

vol. I, pp. 1 7 4 - 9 3 . Chronicle 1906-1914


157 £

limitations': it would of necessity be experimental, it must not unduly mortgage the finances of the present and following years' and it must harmonise with any forthcoming reform of the Poor Law. The whole tone of his memorandum was one of Gladstonian caution: the eligibility clauses were to be judged primarily by the criterion of cost containment. Especially interesting, in view of his earlier promises to the NCOL, was Asquith's declaration to his cabinet colleagues that, '"universal" schemes, such as that put forward by Mr Charles Booth, are out of the question'.56 The first economy was a raising of the qualifying age from 65 to 70 years, even though Asquith admitted that 65 had been generally accepted by most pensions campaigners as the appropriate age at which to attack old age poverty. Raising the age of eligibility thus did more than anything else to destroy the effectiveness of the Act as a measure to combat poverty in old age. An income limit of 10s Od per week (as originally proposed) was deemed necessary in order to prevent pensions going to those 'not needing' them. Such a means test would eliminate 36.8 per cent of the 2,116,267 persons in the United Kingdom aged 65+ (i.e., 778,283 persons), and 31.3 per cent of the 1,254,286 aged 70+ (i.e., 393,405 persons). Thus the combination of income limit and qualifying age of 70 instead of 65 drastically reduced the total of 'pensionables' down to a mere 860,881. Nationality was regarded as a logical criterion. Thus aliens were to be excluded, as were their wives. But since naturalisation was comparatively cheap and simple to obtain, it was decided to exclude those who had not been continuously resident in the United Kingdom for twenty years preceding their attaining the age of 70. Much more problematic were those clauses that were designed to exclude applicants of bad character, and hence make the pension scheme as far as possible one for the 'deserving'. The belief in an incorrigible 'residuum' was quite widely held in Edwardian social debates, and although Labour MPs generally objected to the concept, they accepted this condition without much comment, believing that the Act's imperfections could gradually be removed. Persons who had been in receipt of Poor Law relief after 1 January 1908 were disqualified (except in the case of medical relief), as were lunatics in asylums. Also ineligible were those sentenced to prison without option of a fine, even for ten years after the date of their release. A person convicted for drunkenness under the 1890 Inebriates Act could, at the court's discretion, be disqualified for ten years thereafter. Finally, a pension could be 56

Memorandum by H. H. Asquith, 'Old Age Pensions', 24 March 1908, PRO PIN 3/1. Information in the following paragraphs is based upon this source.

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denied to anyone who, in the opinion of the pension authorities, was guilty of 'habitual failure to work according to his ability, opportunity, or need, for his own maintenance or that of his legal relatives'. The significance of these eligibility clauses is somewhat ambiguous, and historians have been intrigued by them. Though their primary aim was the rather mundane one of cost containment, they did have a strong symbolic importance, indicating the tension in the Act between family and community support for the elderly. Hence they have been seen as evidence of the 'Victorian, moralistic attitude to the poor' that permeated the Act's intentions and made the pension scheme an essentially residual measure,57 or, on a more subtle level, as indicative of the desire to reinforce by legislative fiat what John Brown has called the 'very powerful but confused set of assumptions and values' pertaining to family responsibilities and moral conduct. 58 The peculiar mixture of these practical and symbolic considerations is well illustrated if one considers the origins and outcomes of the discriminatory clauses. In the first place, such eligibility constraints were broadly in line with what most pension campaigners had previously suggested. A summary of private members' pension bills presented to parliament between 1899 and 1907 shows that many of them contained disqualifications in line with the 1908 Act - mostly stipulating the age of 65, British nationality and evidence of 'industry and reasonable providence'. 59 As has been shown, the discussion in the 1890s had centred on the question of thrift erosion, with both the Aberdare and Rothschild Commissions stressing this concern. The 1899 report of the Chaplin Committee had recommended clauses virtually identical to those in the 1908 Act, and the financial calculations of Sir Edward Hamilton's departmental committee of 1900 had been based upon such exclusions. Finally, the Liberal government paid close attention to the existing schemes in Denmark and New Zealand (introduced in 1891 and 1898 respectively): the latter was particularly draconian, excluding applicants who were aliens, had been imprisoned for a certain term, had deserted their wives and neglected to maintain their children, were above an income limit, possessed property over a certain value or, interestingly, made any attempt to dispose of income or property in order to engineer eligibility.60 Thus the 1908 Act's clauses were not far out of line with 57

58

59 60

D o r e e n Collins, 'The Introduction of Old Age Pensions in Great Britain', Historical Journal, vol. 8, pt. 2 , 1965, p. 2 5 9 . John Brown, 'Social Control and the Modernisation of Social Policy', in T h a n e , The Origins, p. 133. M e m o r a n d u m , 'Old Age Pension Schemes' ( 1 9 0 7 ) , P R O P I N 3/1. T h e 1 9 0 3 - 4 Select Committee had examined in detail the Danish, N e w Zealand and Australian states' schemes.


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contemporary reformist opinion, which argued that such 'good character' clauses were necessary to legitimise the scheme by making it distinct from the Poor Law. The symbolic nature of these clauses is rendered even more apparent by the fact that many of them proved impossible to enforce. This seems to have been realised by the cabinet in advance. For instance, Asquith, in his budget speech of 7 May 1908, said: As to character, I think the less you go into that question, short of actual conviction for crime, the better. All those suggested tests, which look so well on paper, thrift, prudence, good repute, etc., when you put them into a concrete shape, are not only extremely difficult to apply, but in their application produce cases of unwarrantable hardship.61

The 'habitual failure to work and support one's family' clause had been recognised in advance as essentially unenforceable, unless one conducted long and expensive enquiries into each suspect case. It was not expected to debar more than a tiny handful of applicants, and local pensions officials were given no guidance on exactly how to enforce it. 62 Disqualification of criminals promised to be difficult because of the paucity of accurate statistics on convictions by age. The Home Office pointed out that, in the year ended 31 December 1906, there were 622,444 convictions in England and Wales; but these included very minor offences, such as 'driving without a light'. Again, this figure referred to total convictions and included persons convicted more than once. It was thus impossible to ascertain exactly how many individuals this involved. The estimated number of 'habitual criminals at large' was 4,126; but, of these, the proportion aged 65 or over was unknown.63 The way out of this problem was to debar only those found guilty without option of a fine, and hope that this would be acceptable. The oddest clause of all was the one excluding recipients of Poor Law relief, since this defeated the Act's central purpose of lifting the aged out of pauperism (though to an extent this was a logical corollary of the guarantee that pensions would not disenfranchise). The need for economy pulled policy in one direction, the desire to make pensions distinct from Poor Law relief pulled it in another. In the parliamentary debates on the bill, Lloyd George insisted that paupers had to be excluded in order to hold down costs; but this was really only a transfer of expenditure to Boards of Guardians since, on government estimates, the average weekly cost of a pauper aged 65+ was close to the level of the proposed pension - nearly 5s Od for indoor relief and just under 61 62 63

HofCDeb., 4s, vol. C L X X X V I I I , 7 M a y 1908, col. 4 7 0 . Brown, 'Social Control', p. 130. H o m e Office memorandum, 6 Nov. 1 9 0 7 , P R O P I N 3 / 1 .

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3s Od for outdoor relief. (The total cost of Poor Law maintenance of paupers aged 65+ was £3,189,000, and of those aged 70+ it was £2,344,000.) Originally, it had been proposed to exclude all those who had been in receipt of Poor Law relief at any time in the previous twenty years, but this foundered in the face of political opposition and the administrative difficulties of ascertaining such individuals. The number of persons who might be assumed to have had Poor Law relief in the previous twenty years was 541,682 - but despite its apparent final-digit accuracy, the Home Office warned that this figure 'must be regarded a entirely hypothetical'.64 The easier and more politically acceptable option was to exclude those in receipt of relief after 1 January 1908: this removed in theory 368,000 people aged 65+, and in practice 272,000 aged 70+, lowering the cost of the pension scheme considerably. It would have been logical to allow existing paupers to claim pensions, thus lifting them off the Poor Law and making its reform easier. But, paradoxically, it was precisely the overall Poor Law reform strategy that caused Asquith to recommend the opposite. Once again, old age pensions were inextricably part of the wider issue of Poor Law reform. In 1905 there had been appointed the Royal Commission on the Poor Laws and the Relief of Distress - intended at the outset as part of the Local Government Board's 'back to 1834' campaign. The Board hoped that the Royal Commission would produce a report recommending a reimposition of deterrence. Throughout the formulation of the 1908 Old Age Pensions Act, the Royal Commission was hard at work, and its report was expected imminently. Poor Law reform was uppermost in the minds of all participants in the pensions debate. Asquith thus argued that the pension scheme should be temporary, so that it could harmonise with a radical overhaul of the Poor Law. He minuted to his colleagues: 'It appears to us, in view of the forthcoming report of the Poor Law Commission, to be the best plan, for the moment and provisionally, to exclude at any rate all actual paupers from the scheme.' 65 The final irony was that in 1911 political pressure led to these exclusion clauses being substantially moderated. There had been many public protests over them, 66 and as early as April 1910 a bill was introduced by Hayes Fisher and five other MPs to meet these criticisms. 67 Eventually the government gave way and in August 1911 royal 64

65 66

M e m o r a n d u m , 'Replies to Certain Questions on Old Age Pensions', 8 Nov. 1907, P R O PIN 3/1. M e m o r a n d u m by Asquith, 'Old Age Pensions'. 67 See, for example, material in P R O T 137/2. Material in P R O P I N 3/2.


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assent was given to a bill effecting significant amendments. On 31 December 1910 the Poor Law disqualification had lapsed anyway, since parliament had applied it only to that date. Once old age pensions began to be paid, these eligibility clauses created some problems. Age was the first. Civil registration of births in England commenced in 1837, and became compulsory in 1875; in Scotland it commenced, and became compulsory, in 1855; in Ireland, only in 1864. English claimants born after 1 July 1837 could obtain, free of charge, a birth certificate from the General Register Office, but if born before that date they could supply other items as evidence: insurance policies, entries in a family bible, indentures of apprenticeship, and so on. Sources of information were many and varied: for example, the records of the Registrar-General of Shipping and Seamen were used to ascertain the ages of a ship's crew at the time of a particular voyage.68 As is well known, the lack of systematic birth registration caused great problems in Ireland, especially in the west of Ireland where the sum of 10s Od for a married couple made a significant difference to the household economy. Ireland's greater levels of poverty, plus its higher age structure (partly caused by continued emigration of the young) meant that the proportion of pensioners to total population in Ireland was much higher than in England and Wales (4.62 per cent, as against 1.85 per cent), though the proportion of pensioners to the total population aged 70+ was not significantly higher (68.8 per cent, as against 62.4 per cent). 69 Ascertainment of age in rural Ireland involved interviewing priests and other local figures, or even cross-examining claimants on significant events. Applicants had often rehearsed suitable replies: 'I was able to eat a potato out of my hand on the night of the big wind', showed that one had been alive in 1839. 70 The residence qualification originally created anomalies where there was a temporary absence from the United Kingdom; the 1911 relaxations required the claimant only to prove residence for twelve years in the aggregate out of the previous twenty, and there were various disregards (for example, for service abroad for the Crown). Most discontent arose over the means-testing, especially where support by children resulted in a pension being reduced. Likewise, the 1911 Act assumed that savings accrued 5 per cent interest, though many forms of investment (such as the Post Office Savings Bank) only returned 2Vi per 68

69 70

H. J. Hoare, Old Age Pensions: Their Actual Working and Ascertained Results in the United Kingdom (1915), pp. 1 5 - 2 7 . Ibid., p . 168. Appendix to the Report of the Departmental Committee on Old Age Pensions, including Minutes of Evidence, Cmd. 411, 1919, q. 3702.

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cent.71 This 'penalty on thrift' was subsequently to be taken up by the labour movement as the major argument for universal, non-meanstested pensions. Whatever the controversy over these clauses, there is no doubt that old age pensions were very popular with their claimants. The first payments were made on 1 January 1909, and covered roughly 490,000 recipients. By the end of the financial year 1908-9, 647,494 pensions were being paid, to a total value of £8,077,110. By 1912-13, total recipients had risen to 967,921 and cost to £12,315,061, because of the 1911 relaxations. These inexorable rises seemed to confirm the worst fears of the Treasury that an open-ended commitment had been made. Though 'a pension for the very old, the very poor and the very respectable', as Pat Thane has put it,72 the payments had a marked effect on old age poverty. In 1912-13, 93.6 per cent of pensions awarded were for the full amount of 5 s Od - a graphic illustration of the extent of hidden poverty in old age - with women benefiting disproportionately. Touching stories circulated of pensioners' gratitude towards the Post Office clerks who disbursed the payments, some even giving themflowers,fruit and sweets in return. For many years, the old age pension was affectionately known as 'the Lloyd George' in tribute. Undoubtedly, then, the 1908 Old Age Pensions Act emerged as the most popular and least controversial of all the Liberal government's welfare reforms. Such popular acclaim should not blind us to the economically and politically hard-headed motives behind it, nor the serious deficiencies in its coverage. Fixing the eligibility age at 70 rendered the Act a very blunt weapon against old age poverty. Nevertheless, in three important respects the 1908 Old Age Pensions Act was potentially very radical: first, it overwhelmingly benefited women. Although women made up 58.6 per cent of the population aged 70 and over, they constituted fully 62.5 per cent of old age pensioners when the scheme began. In other words, women outnumbered men by nearly 2:1 in the pensioner population - a tribute in part to their greater longevity, but principally to the feminisation of poverty in old age.73 Second, the scheme was tax-funded and thus highly redistributive, in that it targeted the poorest section of the working class. Third, there was no retirement condition. Subject to the sliding scale means test, a pensioner could continue working and still claim the pension. The 1908 Act was thus one of the few examples in modern welfare history of a guaranteed basic income paid regardless of whether or not the applicant 71 73

72 Ibid., q. 5082. Thane, 'Non-Contributory', pp. 103-4. The female:male disproportion was highest in urban areas, and lowest in rural.


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was in work, with a tapering income disregard. In effect, it was a virtual negative income tax scheme.74 Gender blind, redistributive, targeting the poor and awarded to recipients by virtue of their status as citizens rather than as producers, the first old age pension scheme, inadequate though it was, represented social reform as socialists sought it. This radical potential did not go unnoticed within the labour movement. Most socialists saw the Act as only a beginning, and were encouraged by Lloyd George's promises that it was 'incomplete . . . purely the first step'.75 It still remained to lower the age of eligibility and make it truly universal, wrote Frederick Rogers, but he was satisfied that the Act was 'so framed and based that these things will grow naturally out of it, if those who have been a most potent force in causing it to be passed - I mean the Labour Party - continue alert and awake to its future developments.'76 Likewise, at the 1908 TUC Annual Conference, a resolution called for the pensionable age to be lowered to 60, and Ben Tillet commented that 5s Od 'was a wretched sum to give . . . Cabinet Ministers lighted cigars at that price, and they would not think much of a dinner that did not cost more'. Tillet even declared that he wanted pensions paid at the age of 50. 'I am going to use it as a lever for extorting something more', was Philip Snowden's promise.77 Such politically sabre-rattling sentiments seemed to prove correct all the warnings of conservatives that a non-contributory scheme was highly dangerous, in that it contained no automatic defences against 'irresponsible' populist demands. Because of his difficulty in resisting such expansionist demands from backbenchers while the Old Age Pensions Bill was passing through parliament, Lloyd George had become a convert to the contributory insurance principle.78 Most of all, the Treasury was viewing the new pension scheme with the deepest apprehension. Accordingly, from 1908 onwards it began a long campaign to have the funding of the state pension scheme shifted to a contributory insurance basis. 74

75 76

77

78

T h e 1908 Act was one historical example of negative income tax cited by Milton Friedman w h e n the N i x o n administration in the U S A was considering its proposed Family Assistance Plan in 1 9 6 9 - 7 2 . Vincent J. and Vee Burke, Nixon's Good Deed: Welfare Reform (197'4), p. 141. HofCDeb., 4s, vol. C X C I I , 15 June 1908, col. 5 6 5 . N C O L , Tenth and Final Annual Report and Balance Sheet, July 1908-July 1909 (n.d.), p. 8. . Report of the Forty-First Annual Report of the Trades Union Congress, 1908, pp. 1 9 2 - 3 ; H of C Deb., 4s, vol. C X C I I , 9 July 1908, col. 148. Initially, Lloyd George had rather unconvincingly argued that, because the scheme was paid out of public funds, to which all citizens contributed in direct and indirect taxation, it was therefore a 'contributory' scheme. H of C Deb., 4s, vol. C X C , 15 June 1908, col. 5 6 5 .

Part II

Contributory pensions

The First World War and the 1919 Ryland Adkins Committee

The effect of the First World War on pensioners was contradictory. On the one hand, the full employment conditions brought about by a war economy increased the labour force participation of pensioners, and thus some of them experienced a rise in income. At the same time, full employment boosted the political confidence of the labour movement and greatly expanded trade union membership (which roughly doubled in size from 1914 to 1920, from about four million to over eight million). This had an inevitable knock-on effect upon the militancy of pension campaigners (most of whom had roots in organised labour). As we have seen in the previous chapter, the labour movement had always regarded the 1908 Act as 'unfinished business', and was determined to pursue its goal of tax-funded, non-contributory pensions, universal in cover and with no means tests, paid if possible from the age of 60. Thus in early 1916 Asquith, as Prime Minister, received deputations from trade unionists and Labour MPs demanding higher pensions; but he refused their requests on grounds of cost.1 Pressure from the labour movement continued throughout the war, and in 1919 resolutions demanding a pension of £1 per week, payable at the age of 60, were passed at the annual conferences of the Labour Party, the Women's Cooperative Guild and the National Conference of Labour Women. Even more indicative of the renewed militancy was the formation, on 1 July 1916, of the National Conference on Old Age Pensions (NCOAP) to campaign for the removal of the 'thrift disqualification' clauses and, secondarily, a raising of the pension level. Based in organised labour, the NCOAP gathered the support of one hundred MPs under the leadership of Tom Wing, its spokesman in parliament. But despite its claim to represent the interests of over ten million people, the leadership of the NCOAP were steeped in labour aristocrat values; thus, as will be shown, their focusing on the 'penalty on thrift' inherent 1

Patricia Mary Williams, 'The Development of Old Age Pensions Policy in Great Britain, 1878-1925' (University of London (LSE), Ph.D. thesis, 1970), pp. 320-1. 167

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in the 1908 Act's means-testing procedures was to present the Treasury with an issue that could be exploited in a very different way.2 Yet while bringing more employment opportunities for older workers, the war set off rising inflation (particularly of food prices), which seriously eroded the value of the pension and lowered the real levels of the income limits. Between July 1914 and November 1918, the overall cost of living rose by between 120 per cent and 125 per cent, with food prices rising by just over 130 per cent (offset by falling rent levels, owing to the new rent controls).3 By the end of the war, the basic 5s Od pension had fallen to about half its 1908 value. For those pensioners who could not work, therefore, the effects of wartime inflation were serious. Perversely, the improved job opportunities offered by a war economy, plus the effective fall in the means-tested income limits, resulted in an increasing number of pensioners finding themselves ineligible for the pension; hence the number of pensioners, having risen from 647,494 in 1909 to 987,238 in 1915, fell thereafter to 920,198 in 1919 (all figures relating to the last Friday in March).4 As in 1909, women formed roughly 63 per cent of the pensioner population and old age poverty continued in large part to be an exacerbated form of women's poverty generally: in other words, those factors that made women poor for the majority of the life course - lower remuneration at work, fewer job opportunities, irregularity of employment, the demands of motherhood, dependence on a husband's wages and his willingness to share them equitably - prevented them accumulating any appreciable assets, and made them poor in old age. Thus the 1919 pensioner was most likely to be a working-class woman who, having lived a life of frugality and self-denial while bringing up a family, and having outlived her husband, now faced a poverty-stricken old age. To many pension campaigners, applying a test of thrift by legislative fiat on such a citizen seemed an increasingly poor joke. The pressure of public opinion did have some effect. In August 1916 the government made a concession in the form of a system of supplementary allowances of 2s 6d per week to those pensioners on the maximum pension suffering from 'special hardship' owing to rising food prices. (Like many welfare innovations that became permanent, this was initially thought of as a temporary measure for the duration of the war 2

3

4

Andrew Blaikie, "The Emerging Political Power of the Elderly in Britain 1908-1948% Ageing and Society, vol. 10, pt. 1, 1990, pp. 2 2 - 3 . Appendix to the Report of the Departmental Committee on Old Age Pensions, including Minutes of Evidence, Cmd. 411, 1919, q. 8714 (hereafter, Minutes of Evidence). In subsequent passages, question number references are given for the Minutes. Report of the Departmental Committee on Old Age Pensions, Cmd. 410, 1919, p. 18 (hereafter Report).

The war and the Ryland Adkins Committee

169

only.) A year later, in August 1917, the 'special hardship' condition was removed such that the allowance became, in effect, a 50 per cent addition to the basic pension. In addition, the means tests were relaxed and the limit on earnings raised to a starting point of £1 10s Od. Thus by March 1919, 911,706 additional allowances were being paid, out of the total of 920,198 pensions (£5,997,000 for the former, £11,731,000 for the latter).5 Without really admitting it, the government had raised the value of the pension by half. But this was really only a holding operation, a postponement of the day when the whole future of old age pensions would have to be considered. The increasingly obvious plight of pensioners, and the growing militancy of their supporters, forced Lloyd George's post-war coalition government to consider the issue early in 1919; and thus on 3 April 1919 there was appointed a departmental committee on Old Age Pensions under Sir W. Ryland Adkins, a Liberal MR The committee's membership The Ryland Adkins Committee may have been appointed, as Bentley Gilbert implies, with the intention of producing as anodyne a report as was possible in the circumstances.6 But the collection of witnesses it assembled gave forth such powerful evidence on the abject poverty of pensioners that the committee had to take notice and, in fact, it produced quite a radical majority report. Its membership consisted of three elements. First of all were the civil servants: Sir Henry Robinson (vice-president of the Local Government Board for Ireland), Sir Arthur J. Tedder (ex-Commissioner of Customs and Excise), Sir Alfred Watson (now Government Actuary), Sir Theodore G. Chambers (Controller of the National War Savings Committee), H. J. Comyns (Local Government Board) and Ewan F. Macpherson (legal member of the Local Government Board for Scotland). Of these, it was Sir Alfred Watson who was the torch-bearer for the 'Treasury view' that, in the light of the nation's post-war economic difficulties, there should only be a minimal increase in pension levels. At this point, it is instructive to pause and consider the career of the man who was never elected to any representative office, yet was to play such an important part - arguably, the most important part - in the development of state pensions policy in Britain. Born in 1870 (d. 1936), he was the grandson of Reuben Watson, a consulting actuary with a wide practice advising several friendly societies (the most 5 6

Report, pp. 18-19. Bentley B. Gilbert, British Social Policy, 1914-1939 (1971), p. 237.

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important being the Manchester Unity of Oddfellows) who gave evidence before the Aberdare Commission. On leaving school, the younger Watson entered his grandfather's practice, and in 1893 he passed the final examination as a fellow of the Institute of Actuaries with a first class and the highest mark of his year. At the remarkably young age of 26, Alfred Watson was appointed to the Treasury-dominated 1896-8 Rothschild Committee (which, as we have seen, pronounced such a negative verdict on state pension proposals). On that committee, his youth did not prevent him from interrogating witnesses in an aggressive and combative style. Likewise, in the proceedings of the Ryland Adkins Committee, Watson showed little mercy with witnesses (such as Longstaff Dennison of the NCOAP) who turned up with illprepared and sloppy evidence. He published several important papers on friendly society finance in the 1900s (including the key 1903 paper analysing the 'sickness experience' within the Manchester Unity), and became acknowledged as the leading expert on the subject. Because of this, he was appointed chief actuary to the National Health Insurance Joint Committee in 1912 (giving up a lucrative actuarial consultancy). As Government Actuary from 1917, Watson advised governments of the day on a large variety of matters. With the expansion of state National Insurance, Watson's influence increased greatly, and he made sure that his office played a key role in all social policy-making in general, and pensions policy in particular. As his obituary records, his competence and judgement became so respected within Whitehall that his advice was sought even on matters well outside the province of Government Actuary; no doubt another factor was that Watson's cool actuarial advice could be used to outmanoeuvre the extreme demands of socialists in the heady days of 1918-24. After the Ryland Adkins Committee, Watson chaired the enormously important Inter-Departmental Committee on Health and Unemployment Insurance between 1922 and 1923 (discussed fully in the next chapter), and served on numerous other key Government committees. Within the Whitehall bureaucracy, he was the driving force behind the move to contributory pensions in 1925, and in the inter-war years no social policy proposal could become law without the imprimatur of the Government Actuary's office.7 As the civil servant W. J. Braithwaite recorded, with unconscious irony, 'the country has never recognised what a great public servant they had in Watson'.8 In short, the senior civil servant with the greatest responsi7

8

'Memoir of Sir Alfred Watson', Journal of the Institute ofActuaries, vol. 68, pt. 1, no. 320, 1936, pp. 1-7. H. N. Bunbury (ed.), Lloyd George's Ambulance Wagon. Being the Memoirs of William J. Braithwaite 1911-1912 (1957), p. 204.


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bility for the state old age pension scheme was a determined opponent of tax-funded, non-contributory universal pensions. The second group consisted of MPs from all parties, most of whom proved very sympathetic to the mass of evidence behind the pensioners' case: Lt. Col. Nathan Raw, Joseph Devlin, Major J. G. Jameson, Arnold Rowntree (MP for York between 1910 and 1918), G. R. Thorne and Stephen Walsh (both Labour). Of these, it was Rowntree who figured most prominently in the evidence-taking (on several occasions acting as chairman), and Devlin and Walsh who stood out for a radical increase in the pension level. Finally, there was a third group of members, made up of those with friendly society connections, who could be relied upon to provide conservative ballast - W. A. Appleton (secretary of the General Federation of Trades Unions) and J. H. Dunford (High Chief Ranger of the Ancient Order of Foresters) - or those with direct experience of dealing with pensioners: Mrs H. Jennie Baker, Miss M. Cecile Matheson and Henry Woodall. Whether or not she actually conceived of the idea, Miss Matheson played a large part in the organising of an appearance before the committee of two women pensioners aged in their early 70s whose evidence was a devastating revelation of old age poverty. The proceedings of the committee If the government hoped that political loyalty, Treasury orthodoxy and friendly society self-interest would produce innocuous, do-nothing conclusions then they were to be very disappointed. The evidence presented to the committee by fifty-six witnesses over twenty-seven working days between 29 April and 24 September ran to nearly half a million words and stands as eloquent and often tragic testimony to the plight of Britain's aged population. Read over seven decades later, the statements of the witnesses practically leap from the page and reveal the human stories behind the managerial and technocratic problems of social administration. The first and overwhelmingly most important issue dealt with by the committee was the effect of means testing. In 1919, 62 per cent of the population aged 70 and over were receiving pensions, and 38 per cent were not. It was impossible to tell exactly how many of this 38 per cent were excluded by the capricious decisions of pension officers, but the statistics showed clearly that most of those who applied for a pension and found themselves disqualified from receiving one were disqualified on account of means - that is, income from interest on savings, employment, friendly society benefits, occupational pensions or gifts from

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friends and relatives. Out of the total of 920,198 pensioners in the UK, 142,084 were new claims made in the year ending 31 March 1919. Of these, 31,218 were questioned by pensions officers, of which 17,542 were disallowed. Thus roughly 12 per cent of all new claims were disallowed. But, at the same time, disqualifications were being made against pensioners of longer standing: in the year ending 31 March 1919, a total of 48,766 pensioners were disqualified (out of new and old claims). The majority of these (25,142) were on account of means; the next category (11,244) because of receipt of Poor Law relief; then age (10,281); and,finally,'other causes' (l,099). 9 The problem of means testing was then, as now, the principal dilemma of a non-contributory, tax-funded selective scheme targeted at the most needy. The Treasury's view was that, unless it were to be a prohibitively expensive universal scheme, an income limit had to apply, and means had to be assessed. But this seemed to penalise those very civic virtues of personal thrift, economic independence and family support that the Act was ostensibly trying to uphold. The 'penalty on thrift' seemed to punish a pensioner, by a reduction in the pension, for income that derived from having saved over his or her lifetime. Any form of assistance in cash or kind from sons and daughters could be regarded as income: for example, the occasional meal from one's children would be allowed, but if a pensioner was regularly looked after in this way such filial generosity could lead to a reduction in the pension. If a pensioner kept a garden to grow vegetables, the income from this would be taken into account. Furniture over the value of £50, or even a sackful of money stuffed in a mattress, if admitted to a pension officer, would be assessed as earning interest at 5 per cent. Designed to reward virtue, the 1908 Act seemed to be encouraging evasion and falsehood. Most pension officers took great pains to ensure that pensioners received their due. cWe leave no stone unturned to see that he gets the pension', said one: . . . 'If we think a person is entitled to a pension we use everything in our power to see that he or she gets the pension.'10 But officers struggled with the inherent problems involved in applying standard rules to an enormous variety of human situations. This was compounded by the regional and cultural diversity of British society at the time. Quite simply, pension officers often lacked the necessary information with which to decide marginal cases of eligibility, especially on grounds of age and means. The committee heard of cases where eligibility was engineered by dishonesty, but these were vastly outnumbered by instances of real 9

Report, p. 18.

10

Minutes of Evidence, qs. 513, 515.


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hardship, where the kindness of children, friends or neighbours would, in effect, be penalised. Numerous cases of unfairness were put to the committee. The standard injustice voiced by many witnesses was the apparent situation where people might lead a life of Smilesian frugality, saving all their lives, and then find themselves ineligible for a pension; whereas other people could lead a veritable rake's progress of a life, reaching the age of 70 in a penniless state, only to find themselves rewarded by the weekly grant of 7s 6d of taxpayer's money. Here working-class culture collided head-on with administrative regulation. As has been shown in the last chapter, labour leaders had always disliked having to adjudicate between the 'thrifty' and the 'thriftless' and had thus supported universal pensions; but meanstesting had found its way into the 1908 Act as one of several devices introduced to constrain cost. However, the thrift disqualification contrasted sharply with the other exclusion clauses (for example, debarring criminals) which were designed to reward only 'good citizenship', and hence legitimise the new scheme. Thrift was of enormous symbolic importance in the British working class, particularly among its articulate skilled elite who tended to provide the leadership of organised labour. It accorded with powerful internalised self-definitions of respectability and civic virtue. Thrift was 'the poor man's sword of honour', as the NCOAPputit. 1 1 But concentrating on the thrift issue produced a confused moral outrage that was easy to deflate. This was particularly evident in the appearance before the committee of J. Longstaff Dennison, the NCOAP's secretary. Dennison's style clearly irritated many committee members, particularly his use of terms like 'despicable' to describe the treatment meted out to pensioners who had their applications disqualified. It smacked of naked friendly society self-interest when he declared that the most important priority was to allow income from friendly societies, trade unions and superannuation funds to be disregarded as income in any means-testing, with the next most important being the reduction of the age limit, and only finally a raising of the pension level.12 He fell foul of the committee's questioning on a number of embarrassing issues: they discovered errors in the written evidence he had submitted on behalf of the NCOAP, demonstrating to him that these were very rare cases of maladministration by pension officers, rather than defects in the Act itself. Especially mortifying was the committee's crucifixion of Dennison over his erroneous claim that 11 12

Quoted in Blaikie, 'Emerging', p. 26. Minutes of Evidence, qs. 993, 1042, 1053.

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deaths among pensioners had risen from 63,852 in 1910 to 118,730 in 1916 because of the fall in the real value of the pension. 13 Representing a particularly vulnerable and poverty-stricken group in society - and voicing their demands through the moral invective of the male friendly society leader - the NCOAP's concentration on the thrift issue produced the kind of emotional indignation that could easily be torn apart in the clinical surroundings of a government committee. The problem was not that Dennison's moral outrage was based on a few selective cases of injustice, albeit keenly felt: it was that the average working-class life could not be judged in such black-and-white simplicity. The ability to save for one's old age was most definitely not a reflection of one's propensity to thrift and good citizenship. As Charles Booth had argued in the 1890s, any number of accidents and misfortunes could occur during the life course to condemn one to an impoverished old age. This was especially so given that, by a ratio of two to one, women outnumbered men in the pensioner population: a working-class woman who devoted her life to bringing up children was at the mercy of her husband's wages and his conditions of employment, over which she had precious little control. Her economic status in old age would reflect these external factors, and it was thus an irrelevance to assess her own 'thriftiness'. Hence one witness, Samuel Andrew Pinkerton (a Surveyor of Customs and Excise, and formerly a pension officer) felt that the pension had little effect on thrift, since there were so many other factors involved: An old woman, for instance, has been very thrifty, but she has no money. She has spent it perhaps in educating her children who may have died. She is a thrifty person although apparently she has not been thrifty. She has probably been more thrifty than a person who did not educate her children, but put them out to work and lived on their earnings and saved £20. 1 4

One committee member who grasped this point was Sir Alfred Watson. He argued that one person might have saved nothing over a lifetime because of accident, generosity or bad luck (a large family, illness, the maintenance of relatives, and so on), whereas another person might have been able to accumulate savings simply through the good fortune of not being so burdened, or through sheer meanness of character.15 Watson was primarily motivated by fiscal parsimony: in the absence of a contributory scheme (which he would have liked), he wanted to preserve means-testing as a strong line of defence against demands for a universal pension of as much as £1 a week, as voiced by many in the labour 13 14

Ibid., qs. 1062-83, 1085-92, 1215-29, 1302-19. 15 Ibid., q. 3359. Ibid., qs. 3151-9.


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movement. Paradoxically, therefore, he presented such arguments to show that the case of groups like the NCOAP was weak: its call to remove the 'penalty on thrift' assumed that thrift could be rewarded, whereas Watson - with true civil service scepticism - realised that the means-testing had not been designed as a moral weapon. It was merely a Treasury device to keep down costs and target the really needy.16 In short, it was clear from the evidence presented to the Ryland Adkins Committee that the means-testing and other disqualification clauses were rapidly losing their symbolic and legitimating value. Indeed, they were bringing the pension system into disrepute, providing a rallying-point for the powerful, if confused, activism of groups like the NCOAP. By 1919, the only justification for these clauses was the one stressed by Asquith in 1908 - financial. But with the pension having fallen so low in value, and a newly confident labour movement demanding universal pensions, those financial constraints were proving harder and harder to justify. Nearly every witness agreed that 7s 6d was inadequate, and that it should be substantially raised; some even wanted £1 a week. Few witnesses were prepared to support a contributory scheme. Some suggested 65 or even 60 as the qualifying age, and in this they were supported by a marked degree of consensus among witnesses that individuals should be able to retire somewhere between 60 and 70 if they so chose. It was around that age, said Alderman Peter Phythian (chairman of the St Helens Pension Committee) that, in St Helens, a working man was 'usually a finished man. He is usually done . . . He cannot get employment by any means. Prior to the war it was practically a by-word in St Helens that a man was too old when he got to 55. We had a great many people out of work.' Similarly, John Errington, of the Northumberland and Durham Miners' Permanent Relief Society, testified that the average age of retirement of a miner in his area was 56 to 66 years; the age of eligibility for the pension should thus be no higher than 65. The TUC representatives thought that after the age of 60 years, the majority of workers were 'worn-out'; they found to their cost that 'their commercial value becomes very low'.17 It is important to remember that labour representatives did not want retirement forced upon workers against their will, since they recognised that there was much variation in the ageing process from individual to individual. Many workers clearly felt that they were at the mercy of their employers, who would dismiss them when they became incapable of work - sometimes justifying this by a medical examination.18 While this 16 18

Ibid., qs. 1560-1. Ibid., qs. 2625-7.

17

Ibid., qs. 2623-4, qs. 5244-58, q. 3016.

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was less true in the old-style family firm, which would tend to adopt an attitude of paternalistic responsibility towards its older workers, transferring them to lighter work when they reached their 60s, it seemed to have become the case in large units of employment, with a more impersonal employer/worker relationship and confrontational industrial relations. In the North Western Railway, for example, there was a pension scheme providing benefits at the age of 65, which meant that for most workers retirement at this age was compulsory, especially 'where it is desirable in the interests of the good management of the railways'. Interestingly, what determined whether or not a man would be retired was not only managerial considerations but 'the man's condition of health. As a matter of fact, if it is thought that they can afford to go they are generally retired.' The company pension made this decision easier by facilitating the shedding of older workers who were more prone to illhealth: 'it helps to maintain the staff in better condition and gives opportunity for promotion for the younger ones'.19 Thus the desire to secure adequate pensions, without means tests or enforced retirement, led the labour movement to call for universal pensions of £1 per week. Several witnesses before the Ryland Adkins Committee from labour organisations (such as William Marlow, secretary of the National Conference of Friendly Societies, G. H. Stuart Bunning of the TUC, or Airs E. M. Lowe of the Standing Joint Committee of the Industrial Women's Organisations) combined all the above demands together and asked for universal pensions of £1 per week payable at the age of 60 - which would have cost around £214,000,000, as against the existing scheme's £17,728,000. Even at 10s Od per week, universal pensions at the age of 70 would cost £41,000,000; paid at the age of 65, they would cost £70,000,000; and paid at the age of 60, they would cost about £107,000,00020 (estimates varied slightly). Within the committee, as has been shown, Sir Alfred Watson was doing his best to pour cold water on such grandiose proposals. However, Watson's fiscal caution came a poor second best to the overwhelming evidence of poverty among pensioners. Some sample pensioner budgets were laid before the committee: these showed rents to be about 2s 6d per week (one-third of the pension plus allowance), and the main items of food expenditure to be bread (around 9d, for one loaf per week), margarine (6d to Is Od), eggs, tea, sugar and potatoes. As expected, those pensioners who had other sources of income, and thus lived above 19

Ibid., qs. 3791-4.

20

Ibid., qs. 9064-7.


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the 7s 6d per week level, were much better able to include meat, fish and tinned milk in their diets.21 But far more telling than this rather unsystematic empirical evidence was the appearance before the committee of two pensioners from Birmingham. Appropriately enough, both were female. Mrs Caroline Thompson, aged 73, lived on 9s 6d per week (7s 6d pension, plus 2s Od from a charitable settlement). After payment of rent (3s Od per week for an unfurnished room), light, fuel and laundry (since she was unable to do her own washing), she had precious little left to spend on food mainly bread and butter, a little bacon, sugar, tea, tinned milk, jam sometimes and potatoes once a week. She made one 9d loaf last a week ('it gets very stale towards the end of the week') and never had fresh milk. Throughout her life, Mrs Thompson had been a model of thrift and self-denial, and yet had ended up in poverty. She had had to nurse an invalid husband for fourteen years until he died, keeping both of them on a total income of 1 Is Od per week. For fifty-three years she had been loyal to one job - splitting pen nibs in a factory, at wages of 9s Od per week - maintaining her dignity throughout. ('I did not want my masters to know that I was so poor. I did not go about in disgrace. They had no idea.5) Even in the desperate poverty of old age, she maintained a staunch pride, dressing neatly in charity-provided clothes ('of course, it is not the latest fashion', she commented rather wistfully), and refusing to apply for Poor Law relief.22 The other pensioner witness was Mrs Elizabeth Lorton, aged 72 and a widow for thirty-one years. She fared slightly better, having the 7s 6d pension, 2s Od per week from a lodger, and occasional earnings from the rather unpleasant work of nursing female suicide cases for the local police at 2Vid per hour. She was marginally better off than Mrs Thompson: she ate more meat and could afford to eat 9d worth of bread in two days, whereas Mrs Thompson made such an amount last a week. But Mrs Lorton's diet was still heavily based round small amounts of basic foodstuffs - tea, bread and butter, eggs (only three a week), stewed rice and condensed milk. She testified that price rises had made it much more difficult to live on 8s Od or 9s Od compared with before the war, and that her health was adversely affected by lack of food. 23 By the end of the committee's evidence-taking, therefore, there was little doubt that a substantial rise in the level of the pension was inevitable. But this could only be financially and politically acceptable if firm constraints were still placed on the scheme. Otherwise there would 21

Ibid.3pp. 224-5.

22

Ibid.,pp. 216-20.

23

Ibid.,pp. 220-3.

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be no line of defence against the demands for a universal scheme at the age of 60. Three alternatives were possible: to limit eligibility to those who did not pay income tax; to keep the present structure, raise the pension slightly and lift the means-testing income limits just enough to fend off political pressure; or to keep the 1908 scheme, but supplement it by a contributory pension system in some way. Treasury pressure began to push policy towards this third option. The recommendations of the Ryland Adkins Committee were split roughly along these lines. A majority report signed by Adkins, Chambers, Baker, Devlin, Dunford, Matheson, Rowntree, Thorne, Walsh, Woodall and - in absentia - Appleton, subject to some notes of reservation, called for a pension of 10s Od per week with no means qualification - in effect, a universal pension - 'for all citizens at the age of 70', pending the possibility of a contributory scheme at a lower age. The majority report pointed out that the means limit would have to be doubled to compensate for the rise in prices; but because of the arguments against the 'penalty on thrift' voiced by many witnesses, their recommendation was to abolish means-testing altogether. Outdoor relief should cease to be a disqualification, though indoor relief would remain as one; relaxations were introduced into the entitlements of aliens, non-residents and criminals; and the largely inoperable 'failure to work' disqualification was to be abolished. Interestingly, a note of reservation by Baker, Devlin and Walsh called for a pension of £1 a week eventually, with 15s Od immediately, payable at age 65; while Rowntree and Thorne maintained that, to reflect the rise in the cost of living, the pension should be 12s 6d.24 A minority report signed by the economic conservatives (Robinson, Tedder, Watson, Macpherson, Raw, Comyns and Jameson) warned that the nation was 'labouring under enormous financial difficulties'. They thus rejected a universal pension, merely suggesting a doubling of the income limits and a 10s Od pension - though Nathan Raw wanted it to be 12s 6d a week. It is likely that some of the seven minority members probably the civil servants, led by Watson - saw the only way out of the pensions conundrum in the long term as a contributory scheme, for although recommending the retention of income limits they simultaneously argued that means-testing caused a disproportionate amount of resentment.25 In doing this, they were cleverly turning round the arguments of their opponents, and preparing the ground for the future. The Ryland Adkins Report was signed on 7 November 1919, and published five days later, coming before the cabinet on 8 December. 24

Ibid.3pp. 10-14.

25

Ibid.3pp. 15-17.


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Despite the fact that it proposed that public expenditure on pensions be more than doubled, to £41,000,000, it was considered with the utmost urgency. Though its fiscal implications were anathema to most of the cabinet, in the atmosphere of post-war political nervousness it was considered fatal not to accede in some measure to labour's demands. The principal problem was how to get legislation passed by the notoriously conservative House of Commons of 'hard-faced men' that had entered at the 1918 general election, and in time to give pensioners an immediate increase. This was achieved by the extraordinary tactic of forcing a bill through by suspending the rules of procedure in the House, and virtually prohibiting any debate; Lloyd George even made a personal appearance as a sweetener to disgruntled MPs who complained that they could not get hold of a copy of the bill from the vote office, and were thereby being asked to approve a measure without having seen it. Thus on 19 December 1919 an Old Age Pensions Amending Bill went through all stages of Commons approval in only one and a half hours. In a speech riddled with apologies, the Leader of the House, Andrew Bonar Law, constantly referred to the nation's economic difficulties but used every conceivable argument to win over MPs to the case for higher pensions, including the assurance that 'if we succeed in passing this Bill, it will have a quieting effect on the general unrest which exists in the country'.26 By the 1919 Act the pension was raised to 10s Od per week, and the income limits lifted to between £26 5s Od and £49 8s Od per annum nothing like the doubling that the majority and minority reports had demanded. This, it was estimated, would include some 220,000 pensioners hitherto excluded. Outdoor relief would not disqualify, nor would treatment in a Poor Law infirmary for three months in any one year. Other relaxations broadly followed the Ryland Adkins Report, including the abolition of the 'habitual failure to work' clause.27 The proceedings of the Ryland Adkins Committee had dragged the economic and social circumstances of pensioners out into the open, and laid them bare for public scrutiny. Never again would the Treasury allow such an expensive item of social expenditure to be discussed so openly, with such a parade of highly vocal witnesses demanding higher pensions. It was very noticeable that all the MPs on the committee had been very sympathetic to the pensioners' cause. Virtual mass democracy had just arrived in Britain, and within Whitehall there were great fears that this would engender what one Treasury official was later to call a 'panem et 26 27

HofCDeb., 5s, vol. CXXIII, 19 Dec. 1919, cols. 8 6 5 - 8 . Ibid., cols. 8 8 5 - 6 .

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circenses' tendency in politicians to outbid each other with vote-catching promises of expensive social reforms. Henceforth, the senior civil service would do everything they could to 'take pensions out of polities'. Their chosen weapon was to be the contributory principle.

8

From ' all-in5 insurance to contributory pensions

The background The work of the Ryland Adkins Committee and the 1919 Old Age Pensions Amending Act did not in any way defuse what Bentley Gilbert has called the 'unexploded bomb' of the pensions issue.1 For in the early 1920s the question of support for the aged became tied in with much broader and politically controversial questions about the entire income maintenance system. In fact, the period 1920-4 was one of extraordinary political and civil service activity, directed at a radical overhaul of the social insurance foundations that had been laid in 1911. This, the 'all-in5 insurance planning, aimed at the amalgamation of health and unemployment insurance into one scheme (with a single stamp and card), reform of workmen's compensation, expansion of pensions coverage (to include widows and orphans) via a new contributory scheme and - most radical of all - the introduction of a new public assistance safety-net to occupy that problematic gap between unemployment insurance and the Poor Law. The fact that few of these plans actually materialised should not in any way detract from the enormous importance of the 'all-in' insurance planning. Potentially, it was one of the most important periods of social policy reform in the twentieth century. With a unique insider's perspective - based on familiarity with the subject matter but also, no doubt, on Whitehall folklore - the ex-civil servant Sir John Walley convincingly argued that the principal 'all-in' insurance body, the 1923-4 Anderson Committee, was far more high-powered in calibre and radical in intent than the Beveridge Committee of twenty years later.2 But 'all-in' insurance foundered on that very rock it was designed to surmount mass unemployment - and only the plan for pensions survived. None1 2

Bentley B. Gilbert, British Social Policy, 1914-39 (1971), p. 238. Sir John Walley, Social Security: Another British Failure? (1972), Ch. 6 and p. 72. Walley gives a very useful account of the rather complicated chronology of the Anderson Committee.

181

182


theless, it gave the Treasury the ideal opportunity to effect the first crucial shift in pension funding away from taxation, and towards a contributory insurance basis. In the history of state pensions, the 1925 Widows', Orphans' and Old Age Contributory Pensions Act thus stands as a crucial mid-point between the 1908 and 1946 Acts. And, as will be shown, it served a vital political and economic function in deflecting socialist demands for something much larger and more expensive. The move to contributory pensions came about because of the convergence of several factors that produced the broader 'all-in' insurance activity. First of all, there were relatively mundane technocratic and managerial reasons behind this renewal of interest. Owing to the piecemeal way in which they had developed, there were many anomalies in the administration of Britain's early social security policies. Workmen's compensation was run by insurance companies, employers' mutual insurance companies and establishment funds; unemployment insurance by employment exchanges, trade unions and other industrial associations; health and maternity insurance by approved societies; burial insurance by insurance companies, collecting societies, friendly societies and the Post Office; and, of course, old age pensions by the Customs and Excise Department, payments being made through the Post Office.3 For reasons of political expediency or administrative convenience, many of these policies had been introduced with the caveat that they would soon be improved; the need for a thorough administrative overhaul had been recognised by social security experts ever since 1911. There was also strong pressure within Whitehall from the Ministry of Labour, which was pondering the possibility of a new assistance scheme similar to that which appeared a decade later as the Unemployment Assistance Board, and was investigating other alternatives, such as 'insurance by industry'. But this administrative overhaul was not directed at managerial tidiness merely for its own sake. Reform of the whole income maintenance structure took on a sudden urgency in post-war Britain as exservicemen returned from the trenches to look for work. These fears of the revolutionary potential of the ex-servicemen have been well documented by a number of writers4 and, although perhaps somewhat exaggerated for reasons of self-aggrandisement by the Home Office's Director of Intelligence and spy supremo, Basil Thomson, they nevertheless dominated cabinet discussions of unemployment insurance in the immediate post-war period.5 3 4 5

J. L. Cohen, Social Insurance Unified (1924), p. 46. For example, Gilbert, British Social Policy, ch. 2. See, for example, Cabinet 53(20), 30 Sept. 1920, PRO CAB 23/22.

From 'all-in' insurance to contributory pensions

183

Once these immediate fears had receded, reorganisation of social insurance became a popular political topic. With the break-up of the Lloyd George coalition government in October 1922, British politics reverted to fierce inter-party rivalry - made all the more intense by the situation, peculiar to the early 1920s, and never to be repeated, whereby all three parties were virtually neck and neck in electoral terms, particularly in their respective shares of the total vote. 'The question is what is going to happen now', mused Neville Chamberlain apprehensively, as he surveyed the inconclusive result of the 1923 general election,6 which gave the Conservatives 38.1 per cent of the total vote, Labour 30.5 per cent and the Liberals 29.6 per cent. The 1918 Representation of the People Act had increased the electorate from 7,700,000 in 1910 to 21,400,000 in 1918, which meant that there was a large body of new voters to be wooed. Social reform thus became a lively political issue.7 The steady rise of the Labour Party (as yet untried in full governmental office, and thus to be feared), growing trade union membership and the example of the 1917 Russian Revolution all gave an edge to the labour movement's demands for much more generous social security payments. Until the experience of minority office in 1924 clipped their radical wings, Labour spokesmen demanded 'work or full maintenance' (at trade union rates) for the unemployed. By 1920-1 Labour spokesmen were demanding benefits in the region of £2 for a householder, 25s Od per week for single men and women, and additional allowances for children - as against the existing unemployment benefit rates of 18s Od per week for men and 15s Od per week for women.8 An important part of Labour's proposed very radical social security package was pensions for widows. Labour had a long-standing interest in the welfare of widows: this had been one of the Independent Labour Party's early demands, and recurred in a variety of forms, such as the Women's Co-operative Guild's idea of 'a minimum for the family'. By the early 1920s a group of Labour MPs (led by Rhys Davies) was regularly demanding widows' pensions funded out of taxation: on 20 February 1924, for example, the House of Commons passed a motion introduced by the Labour MP, Charles Dukes, favouring the principle of pensions 'to all widows with children, or mothers whose family 6 7 8

Political Diary, 9 Dec. 1923, Neville Chamberlain Papers, NC 2/21, University of Birmingham Library. Cohen, Social Insurance, pp. 11 — 13. See, for example, resolution moved by J. R. Clynes, HofC Deb., 5s, vol. CXXXVIII, 24 Feb. 1921, cols. 1198-1203.

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breadwinner has become incapacitated, such pensions to be provided by the state and administered by a committee of the municipal or county council wholly unconnected with the Poor Law'.9 Much of the subsequent policy 'innovation' that came from nonLabour sources in the 1920s was thus an urgent reaction to socialist demands and intended to divert the tide of such demands into safer waters. In one of those periodic, almost intuitive fits of self-scrutiny and ideological reorientation that has enabled it to thrive in the twentieth century, the Conservative Party took the lead. Prominent figures in it began to piece together a strategy of anti-socialist reformism that would win over the middle ground of voters. It was not enough merely to construct an anti-socialist bloc, as Lloyd George had done between 1918 and 1922 - with disastrous results for his own party. For new life to be breathed into conservatism, an especial kind of social policy had to be formulated that would be both electorally appealing and based on the economic and moral virtues of contributory insurance. This ideological reconstruction was to come to fruition in 1924-9 as the 'New Conservatism', personified by Neville Chamberlain's extraordinarily energetic tenure at the Ministry of Health and, in the case of old age pensions, with Stanley Baldwin and Winston Churchill providing crucial support. 'Unless we leave our mark as social reformers, the country will take it out of us hereafter', warned Chamberlain,10 and throughout 1923-4 Baldwin was acutely conscious that social reform had to figure prominently on the Conservatives' agenda.11 In October 1923, for example, he stated: In my view the time is coming when we ought to aim at linking up, guided by the experience of past years, all these benefits of old age pensions and national health and unemployment insurance to see whether it is not possible to devise a more comprehensive, a more watertight, a more beneficial scheme for the people of this country than exists today.12 Again, after the 1923 general election Baldwin rallied his parliamentary troops in the famous Hotel Cecil speech of 11 February 1924, defining the 'New Conservatism' and warning his fellow MPs: 'You are not going to beat Labour on a policy of tranquillity, negation or sitting still. There is a vitality in Labour at present in the country, and unless we can share a vitality of that kind we shall be unable to conquer.'13 9 10 11 12 13

HofC Deb., 5s, vol. CLXIX, 20 Feb. 1924, cols. 1884-1925. Quoted in Iain Macleod, Neville Chamberlain (1961), p. 109. Keith Middlemas and John Barnes, Baldwin (1969), p. 284. Quoted in Cohen, Social Insurance, pp. 11-12. Quoted in John Ramsden, The Age of Balfour and Baldwin 1902-1940 (1978), p. 188.


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Social insurance was to be the medium through which these welfare expansions in the name of political 'vitality' were to take place: unlike tax-funded welfare, social insurance was minimally redistributive and thus accorded with traditional Conservative notions of sound finance; it also had strong moral connotations, in that it could be portrayed as state-encouraged saving. State social insurance had the same broad ethos as the private insurance industry, and would inculcate similar values in its recipients. Cleverly, leading Conservatives had taken the rhetoric on 'thrift disqualification' voiced by pensioners' groups such as the NCOAP, and used it to political advantage. Abolishing means-testing was also attractive in that it would assist the private pensions industry: henceforth, a private pension could be enjoyed alongside a state one. Hence the Conservatives' 1923 general election manifesto announced that 'the encouragement of thrift and independence must be the underlying principle of all our social reforms', and in his election address of the following year Baldwin declared that the aim of 'all-in' insurance was 'to get rid of inquisitorial inquiries and encourage thrift'.14 Planning within Whitehall This convergence of administrative and political impulses led to a flurry of activity within Whitehall. The Ministry of Labour had been examining insurance by industry since at least 1918, and had initially rejected it on the obvious grounds that it would go against the cardinal insurance principle that risks should be pooled: in practical terms, the state scheme would be greatly weakened if too many prosperous industries seceded and formed their own schemes.15 Various technical difficulties might arise, such as how to define a skilled worker (for example, an engineer) who might move between different trades.16 By 1923 the balance of these arguments had condemned insurance by industry to the policy sidelines - as the MP Sir John Marriott put it, 'there is a great deal to be said for it, although I am afraid there is still more to be said against it'17 - and interest was focusing on the much more radical idea of 'all-in' insurance. Essentially, this involved the amalgamation of health and unemployment insurance into a single scheme (with one stamp from employees), on to which would be tacked 14

15 16

17

Quoted in Andrew Blaikie, 'The Emerging Political Power of the Elderly in Britain 1908-1948', Ageing and Society, vol. 10, pt. 1, 1990, p. 26. 'Memorandum by the Ministry of Labour', May 1918, PRO PIN 3/8. Report on the Possibility of Developing Unemployment Insurance by Industries, 1923, Cmd. 1613. HofCDeb., 5s, vol. CLXXXIV, 18 May 1925, col. 125.

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on the Treasury's long-standing goal of a contributory pensions system covering the elderly, and widows and orphans. By providing coverage for those aged 65-70, a glaring defect of the 1908 Act would be remedied: there would be partial relief for the poverty that rapidly worsened in the sixth decade of the life course. Lowering the age of eligibility would be politically attractive, cutting away the ground from under socialists who wanted universal pensions at age 60, and would legitimate the shift in the financing of pensions on to a contributory basis. Contributory insurance funding would throw much less of a burden on the Treasury, and would by its very basis provide limits to the monetary level and coverage of pensions. Such a shift would guarantee that any future expansion would be by a contributory scheme only; indeed, some planners even believed that the proposed new scheme could immediately replace existing non-contributory pensions. Finally, there was some hope within planning circles that such a new pension scheme would encourage the withdrawal of older workers from industry, and help alleviate the unemployment that had suddenly hit British industry. By the time that 'all-in' insurance was taken up within Whitehall, however, the post-war economic recession had begun to bite, instilling a climate of fiscal austerity highly inimical to policy innovation. 'All-in' insurance was thus born into a very hostile world: its value as a simplification of the existing system had to be set alongside any extra costs that might arise in its administration. The tension between these two influences was very noticeable in every subsequent Whitehall discussion o f all-in' insurance. The first examination was undertaken by the Watson Committee, a committee of thirteen civil servants appointed on 17 March 1922 to investigate the possibility of amalgamating health and unemployment insurance. Its chairman was the ubiquitous Sir Alfred Watson, whose mercurial rise upwards - from a humble consultant actuary to the friendly societies to the most powerful figure in social policy planning in the immediate post-war period - has been charted in the previous chapter. Watson had been responsible for many of the Geddes recommendations on public expenditure cuts, and played a crucial role in watering down various post-war radical social reform demands (such as motherhood endowment), using his actuarial knowledge to define the parameters of what was 'affordable'.18 He was now charged with the task of unifying unemployment and health insurance so that economies in administration could thereby 18

For an account of his role regarding widows' pensions, see Susan Pedersen, Family, Dependence, and the Origins of the Welfare State. Britain and France, 1914-1945 (1993),

pp. 169-75.


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be effected. The committee was split on the question of a single card combining both halves of national insurance, and thus could not recommend it, but there were other minor cost-cutting suggestions.19

The Anderson Committee But most important of all was the appointment of a committee of topranking civil servants, chaired by Sir John Anderson, Permanent Secretary at the Home Office. The story of this committee and its work is one of the little mysteries of social policy history. Though it failed to push a complete 'all-in' insurance package through the policy machine, the eventual outcome of the committee's deliberations, the 1925 Widows', Orphans' and Old Age Contributory Pensions Act, was a spectacular success for the Conservative Party and permanently changed the course of pensions policy in Britain. As has been shown, the idea of contributory pensions had a very long history. It was particularly favoured by those of conservative economic outlook, since insurance-based pensions were massively cheaper than tax-funded ones. By the early 1920s most people of a middle-way reformist viewpoint (including some on Labour's front bench) were coming round to the view that a shift of pension funding to the contributory principle would be inevitable at some point in the future, given the ageing of the British population. But there remained the several stubborn problems inherent in a contributory scheme that had been fully discussed by pension campaigners in the 1890s and 1900s: such a scheme would do nothing for women, the low-paid and casual workers who suffered the worst poverty in old age; pension levels would be limited by what the low-paid could afford in contributions; and political expediency dictated that there would have to be a large state subvention for several decades, until such a scheme became 'fully funded'. Nevertheless, to the fiscally cautious the alternative was even worse: inexorable pressure from Labour radicals and pensioners' organisations for a removal of all means tests and income limits, thus creating a universal scheme; and thereafter, demands that pensions be raised in value to some standard of decent subsistence; with an ageing population, this would create a massive (and highly redistributive) pension expenditure in twenty or thirty years' time. In short, the great advantage of the contributory principle was precisely that pension levels could be 19

Interdepartmental Committee on Health and Unemployment Insurance: First and Second Interim Reports, 1922, Cmd. 1644, and Third Interim Report, 1923, Cmd. 1821. Also memoranda in PRO PIN 1/1.

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held down to what the lowest paid could afford in contributions. The arcane mysteries of actuarial science could build a protective wall round the pension scheme, insulating it from the clamorous demands of mass democracy. The party rivalries that burst forth with the demise of the Lloyd George coalition in 1922 placed pensions back on the political agenda. The opportunity was there for any politician bold and imaginative enough to take it. Within the Conservative Party, there was considerable backbench interest in a reformed pension scheme. A small committee of MPs, headed by Sir John Marriott and including Neville Chamberlain, began to cast around for possible schemes and paid particular attention to a pamphlet on 'all-in' insurance by Thomas Tucker Broad, who had been a coalition Liberal MP between 1918 and 1922. Broad's pamphlet, entitled An cAll-Iny National Insurance Scheme. Security for All Workers

and their Families (1924), proved very popular with the public, going through eight editions in its first year of publication. Very much in keeping with the political nervousness of the early 1920s, Broad justified his plan by thoroughly capitalist arguments. The industrial unrest in the mining industry in 1921 had convinced him that 'the just aspirations of the men for security in the terrible risks of their calling' needed to be met by a scheme that would ensure 'the greater peace and prosperity of this important industry'. He thus presented a plan for one unified social insurance scheme consisting of unemployment benefit, sickness benefit, old age and widows' pensions, orphans' benefits and medical and maternity benefit financed by new higher contributions. A contributory pension scheme would be introduced immediately, providing benefits at the age of 63 of 15s Od per week for women and 25s Od per week for men initially, rising to 20s Od and 30s Od respectively in 1930. This would result in the immediate retirement from the labour market of an estimated 100,000 women and 900,000 men, who would be seduced by the prospect of receiving a generous pension without having had to pay the necessary contributions. Eventually, the scheme would be entirely contribution-funded, and the existing 1908 scheme could be wound up. Broad was one of the first campaigners to advocate better pensions as a solution to the unemployment problem. With a million older workers retiring under the new scheme, jobs would be vacated for younger, more productive workers and industry would benefit. 'A contented workman does better and more work. Restrictions on output could be removed when the unions saw that the aged were protected', he argued. Employees would work harder: in messianic language he predicted that there would be 'a quickening right through the ranks of industry giving


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largest promise of reward to the toiler, success to trade and industry, and added strength, prosperity, and greatness to the State.'20 However, one major weakness of Broad's scheme was that he said nothing on the crucial question of whether and how these new pensioners would be compelled to retire. 'Each year as workers attain the age of 63 they will retire on pensions', was his single, rather optimistic, assertion.21 But if there was to be no compulsion, then there would be nothing to stop older employees claiming the pension and continuing to work - which, as we shall see in future chapters, was a problem that was to grow in the inter-war years and have profound economic consequences. Broad sent his scheme to the Prime Minister, Andrew Bonar Law, on 17 April 1923. It was then passed on to Sir Alfred Watson, who went over it with an actuarial fine-tooth comb. Watson was in even more parsimonious mood than usual - perhaps also exhibiting civil service defensiveness towards a scheme thought up by an outsider - and he raised numerous objections. He argued that contributions to fund Broad's scheme would have to be higher than many working men and women could afford. Initially, the excess of contribution income over the amount paid out in pensions would cause the government political embarrassment, in that the amount of the annual pension vote would be reduced, thus implying that the government did not care for pensioners. Thereafter, the cost of the new pension scheme would rise alarmingly. Existing pensioners would feel great resentment towards the cohorts of new retirees who received higher, non-means-tested pensions without having had to pay for them. However, Watson did suggest that it might be possible to introduce a new insurance pension of 15s Od per week, payable at the existing age of 70, financed by a weekly contribution of 4d per week. Pensioners would qualify if they had paid contributions for at least twenty years, or half the period since the commencement of National Health Insurance contributions in July 1912, whichever was the shorter. Interestingly, Watson viewed insurance as a way out of the 'penalty on thrift' problem: applying it 'would help to delimit the class in whose case a means limit really does amount to a thrift disqualification'. As was to be expected, Watson was entirely negative on the need for improved pensions. There was 'no strong reason for increasing existing pensions in a time of falling prices', especially in the case of agricultural labourers where the combined husband-and-wife pension, if raised, 20

21

T. T. Broad, An 'All-in3 National Insurance Scheme. Security for All Workers and their Families (1924), pp. 2, 4-5, 13-15, 18, 24. Ibid., p. 24.

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might come close to normal wage levels. Repeatedly, he warned that little more could be levied from workers in higher insurance contributions. And he made numerous technical criticisms. In the absence of a strict, actuarially sound contributory scheme all he could suggest was that pensioners who had been eligible for National Health Insurance should be able to claim the 1908 pension without any means-testing. (This simple but effective idea was to be incorporated in the 1925 contributory pension scheme.) All in all, the private memoranda suggest that Watson and his senior civil service colleagues, perhaps mindful of the worsening economic situation, were now reluctant to envisage much in the way of radical social policy reform.22 However, Watson's political masters had other ideas, and wanted action. The post-1922 political pressures for reform over-rode the need for economy, and led Baldwin to instruct his civil servants to investigate the possibility of a new contributory pensions scheme. Though assuming prime ministerial office in May 1923, Baldwin only set the planning in motion in the following November - just before he somewhat precipitously went to the country on the issue of tariff reform. But however languid his manner and method may have been, Baldwin's role does seem to have been decisive: Watson informed his colleagues on 19 November that, 'on instructions from the Prime Minister', contributory pensions were to be put high on the planning agenda.23 The committee was formally constituted on 13 December, by which time Baldwin had lost the election. There then followed a period of political hiatus, during which the outgoing Conservative government decided to hand over power to a minority Labour government. Over the Christmas and New Year period of 1923-4, therefore, the Anderson Committee examined 'all-in' insurance and the narrower issue of contributory pensions. It performed one of those rapid and high-quality investigations for which the senior civil service is famous, being able to do this because of the expertise, experience and Whitehall power of its personnel. To some extent, of course, the ground had already been laid out for it in public discussion; and it simply began where the Watson Committee had left off. But it went much further, making several important and far-reaching recommendations for the whole income maintenance system (such as the handing over of the Poor Law to Public Assistance Committees, and the creation of a new 22

23

'National Insurance and Old Age Pensions. M e m o r a n d u m by the Government Actuary', 26 July 1 9 2 3 , P R O P I N 1/1. T h o u g h corresponding cordially with Broad, Neville Chamberlain had also doubted the accuracy of Broad's calculations. See Neville Chamberlain Papers N C 7/11/18. 'Schemes of Special Help. M e m o r a n d u m by the Government Actuary', 19 N o v e m b e r 1 9 2 3 , P R O P I N 1/1.


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assistance scheme as an alternative to the Poor Law) that reflected its appreciation of the fact that mass unemployment was going to be longterm. Chaired by Sir John Anderson, its membership consisted of the leading figures of the relevant departments: Sir Horace P. Hamilton (Customs and Excise), John Lamb (Scottish Office), Sir Arthur Robinson (Ministry of Health), Horace Wilson (Ministry of Labour), H. D. Hancock (Ministry of Labour and the committee's secretary) and, once again, Sir Alfred Watson. The extraordinarily high calibre of the Anderson Committee indicates the importance that old age pensions had assumed. With ruthless efficiency, the committee went through the several possible options for pensions reform. There was very strong pressure to end the 'penalty on thrift', and only a universal scheme with no means tests would satisfy this. Anything less would merely be a postponement: for example, trying to differentiate between separate sources of income, and permitting some (such as friendly society benefits) but not others (such as gifts from relatives), would be a headache to administer and would create yet more anomalies and 'hard cases'; soon the demand for universal pensions would reappear. But a universal scheme would 'impose formidable new financial burdens on the state', Anderson warned. At 10s Od per week but with a lowered eligibility age of 65, it would cost an anticipated £73,000,000 in 1925 and £117,000,000 in 1945 - as against the existing scheme's anticipated £24,000,000 in 1925 and £40,000,000 in 1945. Even with a universal scheme in place, critics might not be satisfied: if wealthy old people were entitled to draw the same flat-rate pension as the poorest, then there would be strident demands for additional payments for the very poorest pensioners and means tests would hence reappear. A second alternative was a system of supplementary pensions based on the individual's record of insurance contributions, to be grafted on to the 1908 scheme and payable at the age of 70; but this would in effect be a dangerous admission of the fact that the existing pension was too low in amount, and would also render future governments vulnerable to pressure for across-the-board increases. A third idea given some consideration in Whitehall was to set up a 'general fund', financed by National Health Insurance contributions, which would be used to make special assistance payments to the unemployed and supplementary pensions to pensioners in need. But to redistribute the contributions of current employees in this way would flagrantly violate the insurance principle founded by the 1911 National Insurance Act - important as a legitimating device - and hence on political grounds it 'could not be entertained'. Finally, brief consideration was given to the possibility of

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replacing the existing 1908 scheme by a contributory one; but this would throw the many uninsured elderly back on to the Poor Law, thus reversing the whole intention of the 1908 Act. However, such difficulties could be avoided by a system of contributory pensions for those aged 65-70 and linked to National Health Insurance. Somewhat disingenuously, the Anderson Committee concluded in their private deliberations that cthe limitation of such a scheme to the employed population could be justified on the ground that the risk of old age affected the employed population more seriously than the non-employed'. In fact, the reverse was true, since the severest poverty in old age affected those with the worst employment records, particularly women and casual workers. The interim report admitted this in its printed version: it pointed out that whereas 63 per cent of the female population aged 70 or over were in receipt of old age pensions, only about 7 per cent of women aged 65-70 were National Health Insurance contributors. But the only option that would steer a way through all the above difficulties and effectively stem the political pressures for universal, tax-funded pensions was a contributory scheme for those aged 65-70. 2 4 The immediate conclusion of the committee was to reject one grand, unified insurance scheme with a single card, oddly justifying this on the very grounds that had been used by supporters of call-in' insurance to argue their case. Acknowledging that the existing system was chaotic and overlapping, the report then came up with a classic argument for doing nothing to improve the situation: 'the public have become thoroughly accustomed to the existing bases and methods of provision and powerful interests are entrenched in these systems'. 25 There then followed a curiously hostile, perhaps Treasury-inspired reference to the whole principle of non-contributory pensions: 'It may be represented that, if the State undertakes to provide a pension at a given age without requiring the pensioner to contribute to its cost, the community is being pauperised and the incentive to make provision against old age is being destroyed.'26 But, the report continued in a somewhat lofty mandarin tone, 'it must be assumed that this consideration was in the mind of Parliament when the original Old Age Pensions Act was passed', and 24

25

Information in the previous four paragraphs from: Anderson Committee, 'Summary of Conclusions Reached at Meeting on Tuesday 18th December'; 'Notes of Provisional Conclusions Reached at Meeting o n 28th December'; 'Summary of Conclusions Reached and Points Discussed - 2nd January 1923'; Anderson to Baldwin, 8 January 1924; and Committee on Insurance and Other Social Services. First Interim Report. Old Age Pensions. Possible Changes on a Non-Contributory Basis (8 Jan. 1924); all contained in P R O P I N 1/2. 26 First Interim Report, pp. 1 - 2 . Ibid., p. 4.


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thus it was pointless to re-open the question. (An interesting reflection of Treasury dislike of the 1908 non-contributory pension is the contemptuous usage, in departmental memoranda at this time, of the term 'free pension' to describe it.) Quickly discussing the difficulties outlined above, the committee firmly dismissed any proposals other than a new, limited contributory scheme for the 65-70-year-olds, and promised to give this full consideration in a second report. 'We have worked with all possible speed', Anderson wrote to Baldwin on 8 January 1924, enclosing a copy of the committee's first interim report that had been composed and printed in only three weeks.27 He promised to look into the actuarial details of the proposed new scheme, but warned that this would take time. Time, however, was one thing that Baldwin did not have. He had already decided to hand over power to Ramsay MacDonald's first Labour government. Shrouded in some secrecy, the Anderson Committee continued its work. Labour's lost opportunity The last possibility of a universal non-contributory scheme being introduced came with the minority first Labour government, which held office for little more than nine months, between 23 January and 4 November 1924. In the general election campaign of December 1923, all three political parties had promised to tackle the thrift disqualification issue, and Labour candidates had gone farthest of all, even implying that means-testing would be done away with completely. Many of its more radical supporters hoped that the new government would seize this opportunity to honour its long-standing promises and introduce a completely tax-funded (and hence highly redistributive) universal pension scheme, paid at the age of 70 or even 65, and unencumbered by any means tests or income limits - ca civic right and not a compassionate grant', as George Thorne put it.28 It seemed a hopeful sign that the new Labour Chancellor, Philip Snowden, had been a passionate campaigner for non-contributory pensions all his life. Labour should have seen the dangers looming on the political horizon if they failed to seize this last chance, for the official Conservative manifesto had included a specific promise to reorganise insurance 'against old age, ill-health and unemployment'. This could only mean one thing - a contributory pension scheme to replace the existing one. By contrast, Labour's manifesto 27 28

Anderson to Baldwin, 8 Jan. 1924, P R O P I N 1/2. HofCDeb., 5s, vol. C L X X V , 25 June 1924, col. 4 8 5 .

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merely promised 'generous provision for the aged people, the widowed mothers, the sick and disabled'.29 It was not to be. Once in office, Labour let slip the opportunity and, by doing so, opened the way for the Conservative Party to effect the crucial shift to contributory pensions that the Treasury had been working towards ever since the 1908 Act. Thus, Labour handed to its opponents a unique opportunity to make much political capital out of social reform. Even more historically damning is the fact that, in office, Labour did little more than what the Conservatives would have done anyway. The general election of 6 December 1923 had produced an inconclusive result: though the Conservatives had won the largest number of seats (258), they were in a minority compared with the total seats of Labour, Liberal and other MPs (357). The Liberals decided to support Labour (albeit very conditionally), and thus the prospects for a Conservative government were not good. Those with sharp political acumen, such as Neville Chamberlain, favoured handing over to Labour immediately after the election, on the basis that 'they would be too weak to do much harm but not too weak to get discredited'. Chamberlain speculated that Labour might be able to remove the income limit for old age pensions and introduce a widows' pensions scheme, but knew that in most other areas Labour's scope for radical innovation would be very constrained indeed.30 However, Baldwin's administration had to continue in office until the constitutional position was resolved. This they did until their final cabinet meeting of 22 January 1924, when Baldwin announced that he had decided to resign and recommend Ramsay MacDonald as his successor. For a few weeks, therefore, the Conservative government behaved as any new government would, and drew up a programme of legislation to be included in the King's speech. It was agreed that on old age pensions there should be included a promise to remove the thrift disqualification by raising the income limit.31 The basis for this decision was a memorandum put to the cabinet by William Joynson-Hicks, Minister of Health, in which he warned of the escalating cost of pensions but pointed out that all the political parties had promised to remove the thrift disqualification. An inexpensive way of achieving this (pending the more radical overhaul to be proposed by the Anderson Committee) would be to distinguish income received from sources such as savings, 29 30 31

F. W. S. Craig (ed.), British General Election Manifestos 1900-1974 ( 1 9 7 5 ) pp. 4 7 , 4 9 . Diary, 9 D e c . 1 9 2 3 , Neville Chamberlain Papers, N C 2 / 2 1 . Cabinet minutes of D e c . 1923 and Jan. 1924, esp. Cabinet 3 ( 2 4 ) , 11 Jan. 1924, P R O CAB 23/46.

From call-in' insurance to contributory pensions

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investments, friendly society or trade union benefits, superannuation funds, gifts, etc., from money earned through working, and only remove means-testing from the former.32 Clearly, Joynson-Hicks believed that this would appease the pensioners' lobby, while still avoiding the full expense of a universal scheme, since (as the Ryland Adkins episode had shown) it was the means-testing of income from thrift and saving that caused most resentment. In fact, Labour did even less than this. Once in office, its only innovation was a cautious raising of the income limit - rather than its complete abolition - to a starting point of £39 per annum (15s Od per week) for income other than earnings from employment; the upper limit was henceforth to be £88.17s 6d per annum. A formal distinction was thus made between occupational earnings and other forms of income. It was hardly the radical step demanded by some Labour backbenchers, and it caused much embarrassment among the parliamentary leadership, for it seemed shabby and parsimonious - an outward impression that was an accurate reflection of the bill's origins. On 18 February 1924 the Labour cabinet were forced into a decision by an imminent House of Commons resolution on widows' pensions to be proposed by the Labour backbencher, Charles Dukes. Snowden was instructed to defuse criticism by making no promises on widows' pensions, £in view of the financial situation', but to indicate that the government would be taking action 'to remove some of the defects of the old age pension system'.33 Snowden was determined to resist backbench calls for a complete abolition of means-testing, on the grounds of cost, and stressed the financial difficulties in a memorandum to his cabinet colleagues. On universal pensions at age 70 he was adamant: 'It is not my intention to discuss the merits of this suggestion as its cost is in present circumstances prohibitive'. Using phraseology identical to Joynson-Hicks's earlier memorandum (indicating that he had used it for inspiration), Snowden warned of rising pension costs if the means qualification was completely abolished: by 1945, the pensions bill would be £29,000,000 more than the anticipated £40,000,000 under the existing scheme. And his recommendation was more even cautious than his predecessor's - merely a slight raising of the means-testing limits for income other than earnings.34 Snowden's proposals were cursorily approved by the cabinet on 29 April, by the simple device of allocating 32

33 34

C.P. 19(24): 'Old Age Pensions. M e m o r a n d u m by the Minister of Health', 10 Jan. 1924, P R O C A B 2 4 / 1 6 4 . Cabinet 1 4 ( 2 4 ) , 18 Feb. 1 9 2 4 , P R O C A B 23/47. C . P . I 8 0 ( 2 4 ) : 'Old Age Pensions. M e m o r a n d u m by the Chancellor of the Exchequer', 13 March 1 9 2 4 , P R O C A B 2 4 / 1 6 5 .

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part of the forthcoming budget surplus to an easing of the limits, to be incorporated in a bill, and the precise details were approved on 15 May.35 Labour's fiscal conservatism was reflected in the fact that no new money was to be raised. Thus in introducing the Old Age Pensions Bill in the Commons on 25 June 1924, Philip Snowden, repeatedly uttered grave financial warnings about the 'prohibitive' cost if pensions were made universal. They would cost £69,000,000 in twenty years' time, and would have to be paid out to wealthy individuals who could not possibly need them, such as millionaires and dukes. (One member impishly asked Snowden whether, out of twenty-two Dukes in Britain, there were enough over the age of 70 to constitute such a serious problem.) Snowden stressed that, within the constraints of sound finance, the new bill would do something for pensioners. Giving the most favourable example possible, he pointed out that a pensioner couple with an income of 20s Od per week from earnings and 30s Od per week from other sources would still receive a joint pension of 20s Od per week, bringing their total weekly income to £3.10s. (Such instances were, in fact, extremely rare.) He also gave what in retrospect proved to be over-optimistic estimates of the increase in pensioners that would be brought about: he claimed that, out of a total of 917,000 old age pensioners, 63,000 did not get the full pension - they would now do so; in addition, another 173,000 people aged 70+ currently excluded by the income limits would in future be eligible in full or in part. Thus 1,090,000 people out of a total of 1,600,000 aged 70+ would henceforth qualify.36 In fact, the number of old age pensioners increased by less than Snowden's estimate - from 916,771 on 31 March 1924 to 997,160 on 31 December 1924. Interestingly, the Treasury had no means of knowing how much of this increase was a result of the 1924 relaxations.37 Liberal and Conservative MPs took considerable delight in taunting Snowden for his inability to keep Labour's election promises. But on all sides there was an awareness that the 1908 pension scheme was landlocked, and the arguments of the contributory pensions lobby began to look more and more convincing. As two social policy experts were later to remark, the 1924 relaxations 'extended non-contributory pensions as widely as the system permitted'38 - 'the system' meaning for them, and for Philip Snowden, the constraints of fiscal orthodoxy and hence the 35 36 37 38

Cabinet 28(24), 29 April 1924, and Cabinet 32(24), 15 May 1924, PRO CAB 23/48. HofCDeb., 5s, vol. CLXXV, 25 June 1924, cols. 4 6 9 - 7 9 . Ibid., vol. CLXXXI, 6 March 1925, cols. 8 1 0 - 1 1 . Sir Arnold Wilson and G. S. Mackay, Old Age Pensions: An Historical and Critical Study

(1941), p. 85.


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necessity for some means-testing. Endlessly refining the means-testing procedures in an attempt to make them more fair simply made them appear more and more pointless. This was forcibly illustrated when MPs went round and round in circles trying to define what constituted earnings from work, as distinct from other forms of income. 39 Yet in a climate of economic recession and economic austerity such as pertained in the early 1920s, mainstream political opinion increasingly viewed a universal, tax-funded scheme as an impossibility - especially as the proportion of pensioners in the population would rise in the future. Speaking in the Commons on Snowden's bill, the MP Sir John Marriott summarised the three reasons why, in his view, the pensions dilemma was 'intolerable and indefensible'. First, 'because at the present time very inadequate benefits are enjoyed at an enormous cost to the taxpayer'. Second, the means-testing procedures were highly irritating to the recipients, such that a very small number of anomaly cases tended to discredit the whole scheme. Finally, the existing system unfairly tried to distinguish between the thrifty and the non-thrifty - an inherently impossible task, given the enormous variety of human situations.40 As a campaigner for contributory pensions, Marriott was indulging in some kite-flying. But he had succinctly voiced the dilemma faced by the Labour leadership. Most Labour cabinet ministers were deeply imbued with the tenets of inter-war fiscal orthodoxy, viewing cuts in public expenditure and reductions in taxation as the only ways to assist the export trades which, it was believed, held the key to Britain's economic revival. For example, Labour's 1922 general election manifesto had declared that 'Labour attaches the utmost importance to economy in the public administration'.41 None held this view more strongly than Labour's 'iron chancellor', Philip Snowden. In presenting his budget proposals to cabinet, Snowden had outlined the key principles upon which it was based. The first two of these principles were plain and uncompromising: '(1) To impose no new taxes. (2) To make no additions to existing taxes.'42 Predicated on those two prior assumptions, pensions reform could only be miserly. Added to this, it is likely that there was a Treasury-driven, relentless backstairs campaign being mounted by senior civil servants to persuade Labour cabinet ministers round to the view that contributory pensions were the only viable option. Yet pressure for universal and higher pensions from the party's left 39 40 41 42

HofCDeb., 5s, vol. CLXXVI, 23 July 1924, cols. 1469-85. Ibid., 5s, vol. CLXXV, 1 July 1924, col. 1219. Craig, Election Manifestos, p. 93. Cabinet 28(24), 29 April 1924, PRO CAB 23/48.

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wing touched a sensitive spot with the leadership, most of whom were well aware of the extent of old age poverty. Snowden's easing of the means tests had disappointed many backbenchers, and even some cabinet ministers. The first Labour government stands as a watershed in the Party's history - the moment of truth when its radical demands came up against the implacable opposition of the senior civil service, the financial institutions, the ritualistic inertia of parliamentary democracy, and the constraints of 'sound' finance. To Labour right-wingers like Snowden and MacDonald, the period in office revealed clearly the limits within which future Labour policies would have to be set if they were to be politically practicable. Snowden later wrote that the Labour Party was 'composed in the majority of new and undisciplined members who would expect the Labour government to do all sorts of impossible things'. It was important to show that Labour was 'not under the domination of the wild men'. 43 To radicals, Labour's nine months in office showed that policies should be even more socialist and should aim to transform the institutions of the capitalist state: from this was to flow the ILP's 'Socialism in Our Time' strategy of the late-1920s. Though somewhat muted for the sake of party unity, these tensions manifested themselves throughout the nine months of Labour's minority rule. On the pensions question, the more radical spirits in the cabinet had insisted that Snowden should make it clear to parliament 'that his proposals are an instalment of the government's policy, and not necessarily the last word', 44 and on 23 May 1924 the Lord Privy Seal, J. R. Clynes, circulated to his cabinet colleagues a letter he had written to Ramsay MacDonald complaining that the 1924 relaxations 'fall far short of the policy which as a Party we have advocated in the past, and to which many individual members are personally pledged'. 45 But, given the electoral precariousness of the first Labour government, these rebels were reluctant to rock the boat. At one point, Snowden did make a vague promise to introduce a mothers' pensions scheme and lower the old age pension age to 65, but he pointedly refused to elaborate.46 Hence when the Anderson Committee's second interim report was presented to Philip Snowden in July 1924, it came as something of an embarrassment. The fact of its imminence was conveyed to the cabinet on 2 July, and a decision was made to discuss it at the next cabinet meeting. Labour's Home Secretary, Arthur Henderson, even suggested 43 44 45

46

Snowden, Autobiography, vol. II, pp. 595—6. Cabinet 32(24), 15 May 1924, PRO CAB 23/48. C.P.315(24): 'Old Age Pensions. Removal of Thrift Disqualification. Copy of Letter from the Lord Privy Seal to the Prime Minister', 23 May 1924, PRO CAB 24/167. HofCDeb., 5s, vol. CLXXV, 25 June 1924, col. 479.


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that a cabinet committee should be set up to consider it and make recommendations.47 At the next meeting, on 9 July, another discussion took place but (owing to the absence of the Prime Minister) no cabinet committee was appointed. Yet again, the report appeared on the cabinet's agenda for their next meeting of 15 July, but - mysteriously the agenda was changed, and this item was dropped.48 The contents of the report were probably seen by only a few ministers, who were sworn to secrecy, and some of them may have privately supported its conclusions. Nothing was made public, but news of the Labour leadership's dilemma over the Anderson recommendations must have leaked out. Subsequently, the Conservatives were to exploit it with glee. We will never know for sure what Labour would have done in 1924 had it possessed a workable parliamentary majority. Subsequently, Snowden was to declare that the Conservatives' 1925 Act 'was based upon a plan which the Labour government had prepared, and which they would have introduced that year if they had remained in office' - but this was written when he had joined the National government and was even more favourably inclined towards the Tories (and even more hostile to his previous colleagues on the left).49 Clearly, it would have required a masterful combination of tactful persuasion and political bullying for the Labour leadership to have brought its own backbenchers round to supporting a contributory pensions scheme, and as the Labour government reached the end of its difficult life, such an effort was deemed not worthwhile. The pensions episode is thus the quintessence of the collapse of Labour's radicalism in 1924. Faced with the problems of surviving as a minority government, harassed at every turn by the majority opposition of Liberals and Conservatives and thus unable to produce any really innovative legislation, Labour did nothing. 47 48 49

Cabinet 39(24), 2 July 1924, PRO CAB 23/48. Cabinet 40(24), 9 July 1924, and Cabinet 41(24), 15 July 1924, PRO CAB 23/48. Snowden, Autobiography, vol. II, p. 721.

9

Neville Chamberlain, the 'New Conservatism5 and the 1925 Act

Labour's failure of nerve meant that when the Conservatives swept back into office in November 1924, with a massive 223-seat majority, the way was open for the introduction of a contributory pensions scheme. This was to be the cornerstone of the 'New Conservatism', symbolising the determined efforts of Baldwin, Churchill and Chamberlain to defeat socialism on its own terms by forging a new kind of social policy - one that would woo the working-class electorate while involving minimal redistribution between classes and, if possible, no contribution from the state. The combination of political creativity and Treasury determination was to prove irresistible. Much of the groundwork had already been done by the Anderson Committee, which had skilfully narrowed all the policy options down to one. By the time they completed their second interim report and passed it on to Philip Snowden, the committee members had had five months in which to consider the question carefully.1 The first half of this second interim report dealt with widows' pensions, and firmly concluded that such a scheme could only be contributory (because of the nation's economic difficulties), compulsory (for actuarial soundness) and limited to the employed population (so that the existing National Health Insurance machinery could be used to deduct contributions). A contributory basis would also avoid all the means-testing problems that were the source of such bitterness in the existing old age pension scheme. The 'male breadwinner' assumption was paramount. The aim of the widows' and orphans' pension scheme was to reward the 'husbandless' woman: it was 'to enable mothers, in cases where the family breadwinner is dead, to devote proper care to the upbringing of dependent children'. There was also a strong element of social engineering, reflecting the emerging view in Whitehall that pensions could lower registered unemployment by inducing certain groups marginal to the labour market (particularly, women workers and older male 1

Committee on Insurance and Other Social Services. Second Interim Report (1924), PRO PIN 1/3.

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workers) to withdraw from paid work. An old age pension at the younger age of 65 would meet the criticism 'that the qualifying age for pension is too high and that the scheme fails to give the needed relief to workers whose value as industrial units has begun to be seriously impaired by age'. The report claimed, on the basis of a recent survey into 10,000 unemployment benefit claimants, that, of those aged 60 and over, 17.6 per cent of males and 30.8 per cent of females were Verging on the unemployable'. Widows with children were to be particularly targeted: 'The object and the result of a grant of pension should be to withdraw the majority of widows from the competitive labour market, at any rate when they have the care of dependent children.'2 However, the committee was able to recognise that such a withdrawal for the period of motherhood would seriously affect a widow's labour market value when she returned to work: hence the pension was to continue to the age of 70. After outlining the structure of widows' pensions, the second interim report then went on to consider the proposed old age pension scheme, taking up the arguments it had left off in its rather rushed first report. Complete and immediate substitution of the existing non-contributory scheme by a new contributory one was fiscally attractive: there is no doubt that the committee's members would have liked to have engineered the total destruction of the 1908 non-contributory scheme. But such a radical step was deemed politically impossible, since it would leave the majority of elderly women (who, in turn, formed a majority of pensioners) without any coverage. Introducing a new contributory scheme with higher benefits for those aged 70 and over, to run in parallel with the 1908 scheme, would be politically dangerous, since it 'would probably be adduced as proof that the current scale of free pension was inadequate and would stimulate a demand for a revision of the scale of free pensions in an upward direction which it would be difficult to withstand'.3 Thus the Anderson Committee re-asserted its original idea that a new scheme could only apply to the 65-70 age group, and would have to be at the same level as the existing pension. It pointedly ignored the fact that practically everyone - including Stanley Baldwin - agreed that 10s Od per week was too low.4 Quickly, the committee outlined its proposed new scheme for a pension linked to the individual's contributory record under the National Health Insurance system: this would be paid at the rate of 10s Od 2 4

3 Ibid., pp. 7, 17. Ibid., p. 16. 'The pension itself is inadequate in amount', admitted Baldwin in his 1924 general election manifesto. F. W. S. Craig (ed.), British General Election Manifestos 1900-1974

(1975), p. 58.

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per week between the ages of 65 and 70 to those who held 'insured status' for a period of at leastfiveyears prior to the attainment of the age of 65. At the age of 70, as Watson had earlier suggested, such pensioners would proceed to the non-contributory pension which they would receive without any means-testing. The political attractiveness of such a scheme was obvious: initial entrants to it would receive full pension entitlement provided they possessed at leastfiveyears' worth of National Health Insurance contributions immediately prior to attaining the age of 65. 5 For reasons offiscalsoundness, the scheme had to have an actuarial basis; but for reasons of political expediency, this had to be underpinned by a pay-as-you-go element. Much of the groundwork had already been done, therefore, and by ignoring the Anderson Committee's second report Snowden had presented the incoming Conservatives with a golden opportunity. However, for the complex political and administrative pressures described earlier in this chapter to come together and produce actual legislation it required the guiding hands of a few determined, powerful and energetic politicians. In 1924 three such figures were ready and willing - Stanley Baldwin, Winston Churchill and Neville Chamberlain. It is difficult to unravel the precise respective contributions to the 1925 Act of each of these three leading architects of the 'New Conservatism'. As has been shown, Baldwin played an important inspirational role. But the tricky task of piloting the legislation through all the difficult shoals of policymaking and resource allocation fell to Chamberlain and, to a lesser extent, Churchill. As historians such as John Ramsden and David Dilks have recounted, in excellent studies, Neville Chamberlain was the standard-bearer of the 1924-9 'New Conservatism'.6 Born in 1869, his family life had been deeply immersed in politics and dominated by his father Joseph who, as we have already seen, was an advocate of contributory state old age pensions in the 1880s and 1890s as a means of wooing the new workingclass voter. Like Stanley Baldwin, Neville Chamberlain had been a relatively late starter in politics - indeed, his early adulthood had been marked by a disastrously unsuccessful family business enterprise, attempting to grow sisal in the Bahamas. This experience exacerbated two aspects of his personality: a shyness of manner with strangers (often interpreted by political opponents as aloofness or contempt) and an iron determination. Several years in business in Birmingham led to an increasing involve5 6

Second Interim Report, pp. 1 8 , 2 0 - 1 . John Ramsden, The Age of Balfour and Baldwin 1902-1940 (1978), esp. ch. 12; David Dilks, Neville Chamberlain, vol. I (1984).

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ment in local politics, and eventually Chamberlain became Lord Mayor in July 1915. A second career disaster befell him a year and a half later, when he was hurriedly appointed Director-General of National Service by Lloyd George in late December 1916 and given inadequate facilities and time in which to get his department off the ground. Feeling the full brunt of Lloyd George's withering contempt for political failures, Chamberlain resigned after only eight months in the post. Despite frequently ambivalent feelings towards the ugly world of politics, Chamberlain stood for parliament in 1918 for the Birmingham Ladywood constituency and was elected. His opportunity came with the accession of Baldwin to the leadership of the Conservative Party in May 1923, and the marginalisation of the 'old guard' Tory leadership of Lord Curzon and Austen Chamberlain. A new kind of Conservative politician had emerged, and Neville Chamberlain was its quintessence. The personal and career difficulties he had experienced - against a background of growing disarray within the Conservative and Unionist Party - strengthened his resolve to succeed in national politics. The young Neville Chamberlain had not exactly welcomed the 1908 pension scheme, describing it as 'radically rotten in principle'7 and 'simply a scandalous attempt to catch votes . . . a direct discouragement of thrift, to which nevertheless the general drift of thought among the working classes is tending'.8 From the very beginning, arguments based on class economic self-interest were wrapped up in moralistic rhetoric. But Chamberlain possessed the same radical, interventionist inclinations as his father, and these pulled him in the direction of social reform. Just as Joseph Chamberlain was to grasp the need to woo the new working-class voter in the 1880s and 1890s, so his son Neville was thinking on exactly the same lines in the politically volatile years after 1918. Like Baldwin, Chamberlain realised that the Conservative Party would only survive the challenge of mass democracy if it developed a new kind of populist capitalism. The state should work to instil a petty capitalist mentality in working men and women by judicious social reforms and the spread of private property ownership. Thus, as early as 1918, he was urging the party to develop an interest in social reform; as David Dilks observes, he realised that the party, 'especially with the electorate nearly trebled by the Act of 1918, could not survive if it were identified with the middle class or the rich, the diehards, the establishment'. 9 On a personal level too, Chamberlain found the socialist threat 7 8 9

Quoted by Arthur Greenwood, HofCDeb., 5s, vol. CCCL, 27 July 1939, col. 1697. Quoted in Keith Feiling, The Life of Neville Chamberlain (1946), p. 48. Dilks, Chamberlain, vol. I, p. 264.

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uncomfortably close: his Labour opponent for Birmingham Ladywood in the 1918 general election put forward a very radical manifesto, including nationalisation of the mines, factories, land and railways, a work guarantee for the unemployed, the conscription of wealth to pay for the war, abolition of the House of Lords and - significantly mothers' pensions. In the 1922 general election, Chamberlain's constituency majority over Labour fell to less than 2,500 votes, compared with nearly 7,000 in 1918; and in 1923 it fell to 1,500. In 1924, he was elected by a majority of only seventy-seven votes, after four recounts. Thereafter, he moved to the safe Conservative seat of Birmingham Edgbaston, which he represented until his death. By 1923-4 Chamberlain saw contributory pensions as the cornerstone of a new strategy of Conservative social reform and, as John Ramsden observes, he quickly grasped the fact that the 'New Conservatism' would stand or fall on its social policy.10 It is clear that it was the insurance basis of the plan that attracted him. Contributory insurance possessed important political and economic advantages: it personalised the notion of the right to benefit, in contrast to tax-funding, and thus helped fashion a mentality of competitive individualism among citizens; the solidaristic and redistributive effects of the existing non-contributory scheme could thus be destroyed; and, most important of all, the contributory principle would build solid defensive walls round the pension scheme, insulating it from demands for improvements. Contributory pensions were to be the perfect example of a 'New Conservatism' social reform that would benefit the working class, cost the state relatively little, boost the fortunes of the Conservative Party and weaken Labour's electoral appeal by removing the 'thrift disqualification' which radicals were using as a justification for an expensive, universal scheme. Ending means-testing would also assist the expansion and profitability of the private pensions industry, especially if the level of any new state pension was kept low. * * Neville Chamberlain was thus determined to play the contributory pensions card for all it was worth. During the nine months of the minority Labour government, he chaired an 'All-in Insurance SubCommittee of the Unionist Party' to draw up a plan. Reflecting its desire to assist the private sector, this committee received crucial advice from Duncan Fraser, actuary to the Royal Insurance Company of Liverpool, and worked in some secrecy while the Anderson Committee 10 11

Ramsden, The Age ofBalfour and Baldwin, p. 267. For a brief discussion of how the 1925 Act benefited employers' company pension schemes, see Leslie Hannah, Inventing Retirement. The Development of Occupational Pensions in Britain (1986), p. 29.


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was simultaneously completing its second interim report. It is clear that there was some covert cross-fertilisation between the two committees: for example, Fraser cryptically recorded on 7 July 1924 that he had seen Watson 'a month ago' concerning some actuarial calculations.12 (It is significant that some of the records of this committee ended up in the Public Record Office.) A comprehensive insurance scheme should have four elements, Chamberlain argued: '(1) it must be contributory, (2) it must be compulsory, (3) it must cover the 4 main needs for security: unemployment, sickness, old age, and death, leaving widows and dependants, (4) the provision for old age must offer sufficient to induce the old men to retire'.13 The fourth objective was an industrial objective, and meant that initially Chamberlain was only concerned with older male workers. Indeed, in the discussions by Chamberlain's committee widows' and orphans' pensions were only tacked on as an afterthought - really only a political sweetener. 'What we want is a workable scheme, which will give us a pension sufficiently high to make it worthwhile for the old men to come out of industry', was Chamberlain's instruction to Fraser, adding that 'in the first instance the enquiry will deal only with employed males'. 14 The improved pension was thus to be an inducement to retire, and in Fraser's memoranda the emphasis was always on pensions to men. But it is clear that Chamberlain also aimed to fashion a scheme that would have maximum political attractiveness. Thus he initially instructed Fraser to do the necessary actuarial calculations to produce a scheme with pensions of 25s Od per week. If levels of contributions could not sustain this, then 25s Od would be paid from ages 65 to 70, and 15s Od thereafter. Agricultural workers would receive lower pensions, because of their diminished ability to pay contributions, and widows' pensions, if introduced, would be 15s Od per week (plus 5s Od for each orphan). Chamberlain appears to have been very keen to offer these high benefits, and expressed some irritation when Fraser suggested a more practicable maximum pension level of 15s Od per week.15 A major weakness of the Chamberlain scheme was that large reserve values would be needed (underwritten by the Treasury) if full pension rights were granted immediately to those entering the scheme aged over 16; they would have to receive reduced benefit until the scheme 12 13 14

15

Fraser to Chamberlain, 7 July 1924, PRO PIN 1/4. Quoted in Feiling, Chamberlain^ p. 114. Chamberlain to Fraser, 20 May 1924, and 'Memorandum for Mr. Duncan C. Fraser', by Chamberlain, 20 May 1924, PRO PIN 1/4. Chamberlain to Fraser, 11 June 1924, ibid.

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matured fully in forty-nine years' time (or pay progressively higher contributions). Even for a 16-year-old the contributions would have had to be high (Is 8d per week). For this reason, Chamberlain's committee more or less rejected the possibility of the 25s Od pension in July 1924.16 Over the summer of 1924 there was some to-ing and fro-ing over the administrative and funding mechanisms, and on 20 October Fraser's final report was completed - nine days before the general election. Fraser had scaled down his calculations to produce a pension of 15s Od per week at ages 65 to 70, and a 5s Od supplement to the existing 1908 pension at age 70 (eventually replacing it entirely with a pension of 15s Od per week). Contributions for a 16-year-old would be more realistic - IVid per week from men. The 1908 non-contributory scheme would thus be 'rapidly superseded', and eventually would be no more than a safety net. By 1991, a considerable amount of public expenditure would be being saved.* 7 In his October 1924 general election manifesto, Chamberlain argued that the only way to end the present 'objectionable and irritating enquiry into private affairs' which was a consequence of means-testing was to have a contributory scheme. Confident that his committee's version would be implemented, he even promised that such a scheme would give its beneficiaries 'a larger amount at an earlier age'.18 Likewise, Baldwin had included a long section on pension reform in the official Conservative manifesto, admitting that the existing pension level was too low and promising a contributory scheme 'at an earlier age and of a substantially larger amount'.19 The 'New Conservatism' in action Appointed Minister of Health in the Baldwin administration, Chamberlain seized the opportunity presented by this relatively new ministry with its wide powers and enormous range of public responsibilities. It took a politician of his exceptional energy and determination to realise the full potential of the demanding Health portfolio. Within days of assuming the seals of office, he drew up a list of twenty-five bills that he wished to introduce over the next five years, of which twenty-one had passed into law by 1929.20 One of these was a bill for widows' and orphans' pensions, to which would be attached a new old age contributory 16 17

18 19 20

Chamberlain to Fraser, 25 July 1924, ibid. Memo by Duncan C. Fraser, 'A Contributory Scheme of Pensions for Men', 20 Oct. 1924, ibid. Neville Chamberlain Papers, NC 18/l/457a (hereafter NC). Craig, Election Manifestos, p. 58. Feiling, Chamberlain, p. 129; Cabinet 64(24), 26 Nov. 1924, PRO CAB 23/49.

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pensions scheme. It was much less of an 'all-in' insurance package than the previous year's planning had promised; and it did not go all the way and replace the existing scheme. Nevertheless, Chamberlain had boldly seized the opportunity to make pensions the flagship of the New Conservatism and, by doing so, effect a crucial shift in pension funding. The 1925 Widows', Orphans' and Old Age Contributory Pensions Act was a spectacular success for Neville Chamberlain personally and for his party as a whole. It came at a time of enormous personal confidence for the man: his letters and diary entries reveal a politician at the zenith of his career, revelling in the hard work, long hours and intellectual demands of high politics, enjoying excellent physical and mental health, and positively exuberant over the challenges of ministerial office. To the somewhat arcane, complex and forbidding subject of pension funding, Chamberlain brought his exceptional gifts of hard work, mastery of detail and political acumen. Not the least of the challenges was the necessity of arguing on equal terms with trained professional actuaries like Sir Alfred Watson who, Chamberlain's Principal Private Secretary later commented impishly, was 'perhaps a little difficult, but more actuarial than awkward'.21 It is an indication of Chamberlain's energy that at one point, he and his Parliamentary Secretary, Kingsley Wood, had to oversee the Pensions Bill as it proceeded through a committee of the whole House until well after midnight, with the Rating and Valuation Bill being considered in Standing Committee at 11.30 the following morning. Samuel Hoare was not exaggerating when he wrote to his colleague of the 1925 Act that 'not only is it a great personal triumph for you but it is also a historic event in the development of Conservative policy'.22 To some extent, the triumph was engineered by the tactic of surprise, which left Labour in disarray and covered with embarrassment. Chamberlain was well aware that Labour had missed its opportunity, and was determined to exploit this to the full; a few civil service advisers (such as Sir Horace Wilson) wanted the scheme delayed in view of the worsening economic situation, but Chamberlain would have none of it. Considerable secret planning took place within Whitehall over several months to make sure that the bill contained no technical flaws that Labour could seize upon. In particular, Sir Alfred Watson took it upon himself to warn that this might be the last opportunity to introduce a contributory pensions scheme.23 But first, Chamberlain - like cabinet ministers before and since - had 21 22 23

Quoted in Dilks, Chamberlain, vol. I, p. 414. Hoare to Chamberlain, 23 July 1923, N C 7/11/18/12. Sir John Walley, Social Security: Another British Failure? (1972), p. 61.

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to establish good relations with the Chancellor of the Exchequer (in this case, Winston Churchill), for extra revenue would have to be raised to fund the new scheme for several decades before it became truly actuarial and self-supporting. The closeness of their co-operation was also a reflection of the importance of the bill to the Treasury: this was one battle the Treasury was determined to win. Thus after a discussion of the proposals in cabinet on the morning of 26 November 1924, Chamberlain met with Churchill in the afternoon, and the two men agreed on their strategy. Fortunately, Chamberlain had no difficulty in persuading Churchill of the vital importance of social reform for the party's survival. Winston Churchill had just re-joined the Conservative Party after nineteen years with the Liberals (having established a reputation as a social reformer in the 1906-14 government), and was thus looked upon with some unease by Tory backbenchers - which was hardly lessened by Baldwin appointing him Chancellor. He badly needed to attach his name to popular social reforms, and viewed contributory pensions as just one such measure. He was also aware of the need for urgent action if Labour were to be pre-empted: pensions were 'a fence to jump at a gallop'. 24 The plan was to get Churchill to announce the measure in his forthcoming budget - still several months off - and follow this up quickly with legislation that would have been carefully prepared over months of planning. Chamberlain was not a man to leave such things to chance. Churchill was receptive. He was anxious to reduce direct taxation 'in order to relieve industry' - by removing 6d from income tax and cutting super-tax. 'But he would have to balance the benefits by doing something for the working classes, and for this he looked to pensions', Chamberlain noted in his diary. Churchill had examined the Anderson Committee's second interim report, and found it 'very hopeful for it was not expensive'.25 For a small additional contribution, greater protection would be offered to the working class - 'security for sixpence', as Churchill put it. Like Chamberlain, he perceived the contributory principle as a way of instilling capitalist values: it would be 'an absolutely inseparable element in our social life and eventually must have the effect of attaching the minds of the people, although their language and mood in many cases may not seem to indicate it - it must lead to the stability and order of the general structure'.26 Placing the new pension scheme in the context of tax cuts for the rich was potentially hazardous, and was to lead to considerable Labour criticism in parliament that this 'rich man's 24 25 26

Martin Gilbert, Winston S. Churchill, vol. V: 1 9 2 2 - 1 9 3 9 (1976), p. 77. Diary, 26 Nov. 1924, N C 2 / 2 1 . Quoted in Paul Addison, Churchill on the Home Front, 1900-1955 (1992), p. 241.


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budget' made the working class pay for their own benefits. But Churchill was an unrepentant advocate of capitalism: he believed that 'the rich, whether idle or not, are already taxed in this country to the very highest point compatible with the accumulation of capital for future production', and maintained that what he was doing was merely reducing a tax burden which was ca grave discouragement to enterprise and thrift and a potent factor in the tendency to high profits'.27 He argued that the state subvention necessary to grant the new contributory pensions to those who had not accumulated enough contributions was of benefit to the working class, and 'from the standpoint of social and political justice' was a counterbalance to the tax cuts.28 Churchill suggested that the two ministers should work closely together. But they were very different kinds of human beings, and the reserved, ascetic Chamberlain sometimes found it difficult to handle a volatile and rumbustious Chancellor 'who has a new idea every hour'.29 'He wished to treat the subject free from personalities (I gathered that he meant he wasn't going to claim all the credit for himself)', Chamberlain noted wryly.30 There was also some resentment on the part of Ministry of Health officials that their measure (on which they would have to perform all the hard preparatory work) might appear as yet another Treasury success. But by and large the relations between them were cordial and productive. In effect, the planning for the 1925 Act was based on an amalgamation of the recommendations of Chamberlain's 'all-in' insurance committee and the Anderson Committee. The latter was re-activated on 8 December 1924 in order to consider the Chamberlain committee's proposals, and produced a third report on 9 February 1925. Most of this was concerned with highly technical criticisms of Fraser's funding and administrative mechanisms, but beneath this veil of actuarial mystification was a fear of the political consequences if a new scheme offering higher pensions ran in parallel with the old. Fraser's proposed levels of contributions and benefits were dismissed as impractical, especially his idea of having his new scheme accumulate a large fund: if there were a margin of contributions over benefits, 'the most determined efforts will be made both in Parliament and outside to reduce the contributions or to increase the benefits'. There would be resentment on the part of those of similar economic status who were excluded from the new scheme with its higher benefits (for example, the self-employed): they would demand 27 28 29 30

Quoted in Gilbert, Churchill, vol. V, pp. 7 3 , 7 4 . Addison, Churchill, pp. 2 3 6 - 7 . Chamberlain to Ida Chamberlain, 28 March 1925, N C 18/1/479. Diary, 26 Nov. 1924, N C 2 / 2 1 .

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that the non-contributory scheme's pension levels be raised. The Anderson Committee looked with dismay at Chamberlain's proposed maximum old age pension level of 25s Od per week, and widows' pensions of 15s Od per week: 'The maximum would be the standard, and the provision of such a pension would at once raise the presumption that the current scale of free pensions was inadequate and would stimulate a demand for a revision of the scale of such pensions in an upward direction.' Thus the new pensions could only be 10s Od per week.31 An important hurdle that had to be overcome was the raising of the necessary money from a budget that balanced after the proposed tax cuts. Strategically, the Chancellor had earmarked a pruning of naval expenditure as the necessary precondition for an expanded pension scheme. But here he came up against the opposition of the Admiralty, which believed that Japan posed a serious naval threat in the Far East. W. C. Bridgeman, First Lord of the Admiralty, had wanted a substantial three-year programme of cruiser-building and was prepared to argue his case forcibly. It is one of the many oddities of the history of pensions in Britain that at one point the crucial Act of 1925 hinged on arguments over the possibility of war with Japan, but Churchill, as a former First Lord of the Admiralty, was an adept negotiator and agreement was reached.32 One consequence of these overall budgetary constraints, however, was that they finally killed off Chamberlain's idea of fixing his new contributory pension at a level higher than the 1908 one, 33 though it is hard to see how this idea could have been effected, since (as the Anderson Committee had repeatedly warned) it would have immediately encouraged exactly what the 1925 Act was partly designed to forestall - demands that the non-contributory pension be raised. As the date of Churchill's budget drew closer, therefore, the planning for the new pension scheme reached its conclusion. In March and April 1925, Chamberlain and his Ministry of Health officials were hard at work on the bill, full of glee at the prospect of pre-empting the Labour Party on the issue of social reform: 'We shall have given the pensions which the Labour Party only talked about'.34 The new scheme would also be popular within the Conservative Party, since it would cost relatively little, and would be welcomed by those older workers who would immediately benefit from it without having had to contribute all their working lives. 31

32 33 34

Committee on Insurance and Other Social Services. Third Interim Report. Examination of Certain Proposals Relating to Contributory Pensions (9 Feb. 1925), esp. pp. 5, 12, PRO PIN 1/3. Gilbert, Churchill, vol. V, p. 7 4 - 8 . Neville to Hilda Chamberlain, 1 Feb. 1925, N C 18/1/471. Neville to Ida Chamberlain, 28 Mar. 1925, N C 18/1/479.


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The final inspection of the bill was undertaken by a cabinet committee (including, inevitably. Sir Alfred Watson), which met in early April. There were a number of complex actuarial and technical questions (such as what arrangements to make for those who moved out of 'insurable employment' but wished to continue paying voluntary contributions)35 but the background work had been thoroughly done, and the cabinet committee concluded its work quickly. Thus when the full cabinet considered the proposals on 22, 27 and 29 April there was little discussion. The importance of the measure to all concerned is indicated by the extreme secrecy under which the proposals were shrouded, Baldwin even having to reprimand his cabinet when a very minor leak to the press took place36 - and thus when Churchill rose to deliver his budget speech at 3.30 p.m. on 28 April 1925, the effect was, in Chamberlain's words, 'truly sensational. No one had any idea that our plans were so far advanced and the Labour Party are filled with gloom at the thought of the opportunity they have missed'.37 In the budget speech, Churchill portrayed contributory pensions as bringing new security to the worker. The scheme had to be contributory because of the inevitability of rising costs brought about by an ageing population: to ignore such fiscal caution would result in 'an overburdened Treasury, fettered Parliaments, and a dependent people'. Even with the restraints of the contributory principle, after thirty-five years the new scheme would be costing £21,000,000, and the 1908 scheme £56,000,000 - a total of £77,000,000. 'Are we justified in laying these charges upon posterity?', asked Churchill. Labour speakers grumbled loudly over the contributory principle, and over the tax cuts for the rich, but could offer no real alternative.38 Clearly, the Labour leadership was beginning to sense a trap, for on the following day Philip Snowden denied that he had approved the Anderson Committee's second report before he had left office. He firmly stated that he was against any social policy that demanded contributions from working people: 'That has always been the position of the Labour Party', he declared.39 The trap was expertly sprung on 18 May, when Neville Chamberlain began his speech in the Commons introducing the second reading of the Widows', Orphans' and Old Age Contributory Pensions Bill. He 35

36 37 38 39

Widows', Orphans' and Old Age Contributory Pensions Bill. Financial Government Actuary, 4 April 1925, P R O C A B 2 7 / 2 7 6 . Cabinet 2 2 ( 2 5 ) , 27 April 1925, P R O C A B 2 3 / 5 0 . Diary, 1 May 1 9 2 5 , N C 2/21. HofCDeb., 5s, vol. C L X X X H I , 28 April 1925, cols. 7 1 - 9 . Ibid., 29 April 1 9 2 5 , cols. 1 8 0 - 1 .

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by the

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taunted the Labour front bench, citing an election pamphlet by Snowden, in which Snowden had promised a new pension scheme commencing at the age of 65 for the elderly, widows and orphans. Repeatedly, he asked Labour to declare whether their proposed scheme would have been non-contributory (and thus prohibitively expensive) or - as he claimed - contributory, and on the lines suggested by the Anderson Committee. 40 This was a typical Chamberlain tactic, delivered with the thinly veiled contempt for his political opponents that made him unpopular on the opposite side of the House. And it was followed up in the Commons the next day with a similar attack on Labour by Sir Laming Worthington-Evans (Secretary of State for War, and a former Minister of Pensions) who, Chamberlain recorded with relish, 'turned the knife round and round in the wound until they simply squirmed'. But Chamberlain believed Labour's attitude to be hypocritical - to him they were 'a thoroughly dishonest lot' - for he claimed he had heard that John Wheatley, when Minister of Health, had privately declared himself in favour of a contributory scheme; even more damning was the alleged remark by Arthur Greenwood that 'only the general election saved us from having a contributory scheme ourselves'.41 All this was good knock-about politics, which left the Labour front bench in disarray. Chamberlain then went through the arguments in favour of his scheme. First and foremost, it would be far cheaper than a tax-funded, non-contributory scheme. Mindful of his more cautious backbenchers, Chamberlain presented the measure as quintessentially Conservative. There would be an extra burden on industry of £10,250,000 per annum in the form of employer contributions, but 'every employer will agree that the psychology of the workman has a very marked effect upon his output, and that one will always get better results when men are satisfied and contented than when they are restless'. The new scheme would thus strengthen the hallowed Conservative virtues of independence and self-reliance among the working class: it would 'complete the circle of security for the worker' begun with unemployment insurance, health insurance and workmen's compensation. 42 But Chamberlain also presented the bill as a signpost to the 'New Conservatism'. In an emotive introductory passage, he portrayed his party as caring for the weak and vulnerable in society in a way that more than matched Labour's claims: 40 41 42

Ibid., vol. CLXXXIV, 18 May 1925, cols. 7 3 - 8 5 . Neville to Ida Chamberlain, 23 May 1925, N C 18/1/487. HofCDeb., 5s, vol. CLXXXIV, 18 May 1925, cols. 90, 92.


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The very title of this Bill conjures up at once scenes of tragedy and of pathos, of sudden bereavement, of children deprived of their natural protectors and guardians, of failing powers in men and women who were once strong and vigorous and now, as old age has come upon them, have become helpless and dependent upon others.43 Chamberlain was no doubt privately disappointed that the level of the pension was not the 15s Od per week recommended by his own committee. But he must have been persuaded by the Anderson Committee's warnings on this, for in parliament he gave a vigorous but somewhat unconvincing justification for keeping the level at 10s Od. He as much as admitted that the weekly sum of 10s Od per week for a single person, and £1 for a married couple, would be insufficient to live on; but it would be enough to encourage retirement from a full-time job, and the pursuance of part-time work.44 Faced with such a well-orchestrated parliamentary onslaught, Labour speakers could not put up a very convincing opposition. They found themselves in a rather surprising alliance with a few right-wing Conservative backbenchers who objected to the extra burden thrown upon industry by the new employers' contributions. The main point of criticism of Labour MPs was over the contributory principle but, as has been seen, the ground had been cut from under their feet on this issue: privately, Labour leaders were acutely embarrassed over their party's failure of nerve a year earlier. John Wheatley's parliamentary protests that the new scheme would put a heavy burden on industry sounded unconvincing when many of his left-wing backbenchers frequently argued that industry's ability to pay should be disregarded.45 The really prescient criticism made by Labour speakers was that the Chamberlain scheme would encourage employers to impose wage cuts on older workers equivalent to the value of the pension - a concern that was to grow over the subsequent fifteen years, until it was to form the central dilemma of Labour on the pensions question. All in all, therefore, the Widows', Orphans' and Old Age Contributory Pensions Bill passed through parliament relatively easily, earning plaudits for its principal creator. The 1925 Act The funding mechanisms and administrative arrangements for the 1925 Act were exceedingly complex, and can only be summarised briefly here.46 The scheme was based upon the National Health Insurance 43 46

44 45 Ibid., col. 73. Ibid., col. 90. Ibid., col. 104. Even the summary in Wilson and Mackay's classic study takes up four densely packed

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system: it could thus be slotted into an existing administrative machinery, and eligibility by past contributions could be quickly established (which was politically advantageous). All wage earners earning less than the National Health Insurance income limit of £250 per annum, and credited with at least five years' continuous contributions prior to the commencement of the scheme, were covered. Contributions were fixed at a level that would fund benefits for a 16-year-old entrant. (For a man, these were ^Vid each from employer and employee; for a woman, 2V2d from employer, and 2d from employee.) All those above that age had their benefits funded by current contributions and by a considerable Exchequer subsidy (or 'back-service' charge). Technically, the scheme began with a massive capital liability of about £650,000,000 at 4 per cent interest. The Exchequer subsidy was paid into a 'Treasury Pensions Account', and was a fixed payment of £4,000,000 per annum. Thus although it was not a tripartite insurance contract, in that there was - controversially - no weekly contribution from the state (only an employer's and an employee's one), the cost to the Treasury was predicted to rise. This would be offset by savings on health and unemployment benefits (which henceforth ceased at age 65), on the falling annual cost of war pensions (from estimates of £67,000,000 in 1925-6 to £10,100,000 in 1965-6: significantly, these had always cost more tn^n the state old age pension scheme). Contributory pensioners received the new pension between the ages of 65 and 70, with no means tests. They then proceeded to the 1908 non-contributory pension, still at 10s Od per week, but with no means tests: these were received 'by virtue' of the 1925 Act. (Widows' and orphans' benefits were paid from 4 January 1926; 'age 70' pensions from 2 July 1926; and 'age 65-70' pensions from 2 January 1928.) Gradually, the contributory scheme would supersede the non-contributory one, assisted by decennial increases in contributions (only one of which actually took place - in 1936). Thus a 16-year-old entrant in 1926 would pay 20 per cent of the cost of the pension at age 70; one in 1936 would pay 55 per cent; one in 1946, over 80 per cent; andfinally,a 16-year-old entrant in 1956 would pay the whole cost. However, by this date there would still be many in the scheme above the age of 16 who would have to be funded by the 'back-service' charge. Only by the early twenty-first century might the scheme be fully funded. Wives not in insurable employment who were aged 65 received their chapters. See Sir Arnold Wilson and G. S. Mackay, Old Age Pensions: An Historical and Critical Study (1941), chs. 10-13. Information on this and subsequent paragraphs from this source, and from Widows', Orphans' and Old Age Contributory Pensions Acts 1925-1932. Report by the Government Actuary (1935).


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pension by virtue of their husband's contributions, but only when their husband reached pensionable age. Since the scheme was based upon labour market participation, this was the only way cover could be extended to dependent wives. Women thus gained, but at the cost of a reinforced dependency upon a male breadwinner. In terms of riskpooling, the greatest losers were single men, since they saw most of their contributions going to other beneficiaries (the widows, orphans, and dependent wives of other men). By 1933, 446,000 men and 264,000 women were receiving the '65-70' pension, plus 423,000 widows and 277,000 orphans. Frustratingly, 'by virtue' pensioners aged 70+ were included in the financial returns for the non-contributory 1908 pension (still administered by the Customs and Excise Department). An interesting aspect of the Act was that the liability of employed persons over the age of 65 to pay contributions ceased, but their employers still had to pay contributions: this was explicitly done to prevent the preferential employment of older workers.47 The political urgency of outflanking radical demands for a universal, tax-funded pension had thus created a distinctly odd scheme, which in practice broke all the rules offiscalvirtue preached so assiduously by its chief creator, Neville Chamberlain. It was transparently 'pay-as-you-go', with all kinds of concessions made to new entrants (such as the 'pre-Act widows') as political sweeteners. As the economist W. B. Reddaway later observed, no self-respecting insurance company would have contemplated it. It neither followed the true insurance principle of adjusting premiums according to the value of prospective benefits, nor the 'social service' principle of payment according to ability.48 The Treasury made gloomy noises about the huge capital liability it had undertaken. But in truth it was enormously relieved that what had emerged was much cheaper than possible alternatives, and had permanently contained the cost of state old age pensions. In the development of state pensions in Britain, the events of 1919 to 1925 were extremely complex and have had to be recounted in detail in order to do justice to the intricate interplay of political, economic, social and administrative factors. We should note that at no time was there any serious controversy about the need for pensions. The world of the 1920s was very different to that of the 1890s, when conservatives could argue that the impoverished elderly should take the consequences of their apparent fecklessness and inability to save in their past lives. A variety of factors had rendered such a view politically untenable - in particular, 47

48

C P 204(25): Improved Old Age Pensions and Pensions for Widowed Mothers. Memorandum by the Minister of Health, 18 June 1925, PRO CAB 27/276. W. B. Reddaway, 'Preface', in Wilson and Mackay, Old Age Pensions, pp. xii-xiii.

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the pressure of mass democracy, the increasing power and confidence of the labour movement, organised lobbying by pensioners and the slow spread of retirement among a growing number of old people. (By the mid-1920s, the proportion of males aged 65+ still formally classified as 'gainfully occupied' had fallen to 55 per cent.) In any case, the Ryland Adkins Report had revealed a powerful consensus of evidence on the utter irrelevance of moralistic factors in explaining old age poverty, particularly in its feminised form. The controversy of the 1919-25 period was thus over the level of pension, its qualifying conditions and, in particular, how it should be funded. These questions were crucial to the management of post-war capitalism, and formed the terrain of a fierce political battleground. As we have seen, throughout this period radicals demanded a universal, tax-funded pension for all aged 60 or over, with no means tests and at an 'adequate' level (by which was usually meant £1 per week). But to those who considered themselves fiscally responsible, this was a nightmarish prospect, raising the annual pension bill from under £20,000,000 to over £200,000,000. Pension funding thus became the litmus test of whether the British state could absorb, contain and render harmless the radical challenge from organised labour that had grown steadily since the 1880s and had been made even more potentially dangerous by the 1918 Representation of the People Act. Indeed, the period 1918-25 was probably the most important in the evolution of British welfare policy, witnessing a concerted and ultimately successful civil service strategy of containment. The battle was fought on several fronts and over several demands - 'secondary education for all' through a massive expansion of scholarships and free places, mother's pensions, family endowment, council housing for all the working class, a state medical service, a social security/job creation strategy that would provide 'work or maintenance' and universal, subsistence old age pensions. Of these, old age pensions were the potentially most expensive, and thus the shift from contributory to non-contributory funding was crucial to this wider strategy of containment. It is against this background that one must summarise the arguments on either side. Non-contributory benefits The principle that state benefits should be non-contributory was the vital economic underpinning of the 'citizenship' pension long demanded by radicals in the labour movement. The political left in Britain had always been deeply suspicious of the contributory principle, seeing it as a regressive poll tax designed to avoid redistribution from rich to poor:


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since contributory funding of pensions was in reality a 'pay-as-you-go' system, contributions were flat-rate taxes by another name. Labour radicals scoffed at the argument that contributory benefits carried a firmer legal entitlement than non-contributory ones, since, they argued, governments could manipulate the insurance contract whenever they liked by altering the conditions, duration and level of benefit. For example, in a recession benefits could be cut in order to facilitate wage reductions, and this could be spuriously justified by the need to lower contributions. Chamberlain's 1925 scheme was thus seen by them as a fraudulent distortion of the 'citizenship pension' principle: 'I submit that what the right hon. Gentleman has done here is merely to take a popular label and use it as a description of a deceptive concoction', said John Wheatley, and another Labour MP's verdict was even more caustic: 'It suggests to me the case of a pick-pocket taking my watch and presenting me with it afterwards and thinking he has done me a good turn in the process.'49 The fact that the new scheme's aim was 'to make the working classes pay for their own poor, and to throw upon them the casualties of the capitalist system', as another Labour MP put it, 50 was particularly galling because of the tax cuts dispensed to the wealthy in Churchill's budget. Labour radicals argued that there was massive wealth in the upper classes that could be taxed and redistributed through welfare: according to authoritative estimates, in the 1920s the top 5 per cent of wealth holders in Britain owned 91 per cent of all marketable wealth,51 with the top 2.5 per cent of occupied persons aged over 20 holding about two-thirds of wealth.52 Even more telling was the estimate of income distribution made by the economist Colin Clark. According to Clark, in 1928 nearly one-half of all national income (£1,665,000 out of a total national income of £3,673,000) went to the top 10 per cent of income earners (2,080,000 earners) who earned more than £250 per annum (the National Health Insurance income limit); the remaining half of national income was shared among the 90 per cent (18,065,000 earners) who earned less than £250 per annum.53 The debate between 49 50 51

52

53

HofCDeb., 5s, vol. CLXXXIV, 18 May 1925, cols. 95, 317. Ibid., col. 358. This point is stressed in Lynda Mountford, 'The Debate Within the Labour Party on the Contributory Principle as an Instrument of Social Policy 1 9 0 8 - 1 9 3 1 ' (University of London (LSE) Ph.D. thesis, 1984), p. 332, appendix 2. In ch. 7 Mountford provides an interesting discussion of the 'contributory versus non-contributory' issue. A. M. Carr-Saunders and D. Caradog Jones, A Survey of the Social Structure of England & Wales (1937 edn)3 p . 109. Colin Clark, The National Income 1924-31 (1932), p. 76. According to another estimate for 1938, the top 10 per cent of income earners took 38 per cent of pre-tax incomes. See Richard M. Titmuss, Income Distribution and Social Change (1962), p. 38.

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contributory and non-contributory pensions was thus really a debate about the degree of wealth and income inequality that should pertain in British society. Radicals were distinctly unimpressed by the 'moral hazard' arguments used by politicians as diverse as Neville Chamberlain and Lady Astor to condemn a 'free' pension paid for by other taxpayers, seeing these arguments as self-interested, class-based and hypocritical. They maintained that large amounts of taxpayers' money frequently went in handouts to the wealthier classes - as in the compensation paid to the railway companies after the First World War, or in the generous pensions paid to High Court judges. They ridiculed Neville Chamberlain's tendency to portray the case for the contributory principle as some kind of morality play. The lavish lifestyles of Conservative cabinet ministers rendered such sentiments distinctly hypocritical, since they protested their own incorruptibility in the face of the largesse of inherited wealth and other massive occupational benefits. To Labour MPs, a striking personification of this was Lord Birkenhead. Birkenhead received a pension of £5,000 per annum in reward for his services as Lord Chancellor in Lloyd George's coalition government, but was required to give this up on becoming a cabinet minister (Secretary for India) in 1924, again on a salary of £5,000 per annum. Under a new ruling, cabinet ministers were not allowed to supplement their salaries from other sources, so Birkenhead also had to forgo his income from journalism (£10,000 per annum). After strenuous protests by him, the chairman of the Conservative Party discreetly arranged for £10,000 from party funds to be paid to him as compensation for loss of his pension.54 Birkenhead's lifestyle was hardly an example of the values of frugality and thrift that Chamberlain was trying to instil in the working class.55 To more perceptive Labour observers, the shift to contributory funding was not only a gigantic confidence trick played by the Conservatives for political advantage; it was also part of a broader economic strategy designed to deflate the economy, reduce public expenditure and create the conditions in which private capital could be freed up to move into more profitable areas of investment. It is worth remembering that throughout his tenure at the Ministry of Health, Neville Chamberlain was involved in a long battle with high-spending Poor Law Boards of Guardians whose generous relief payments challenged the low-wage sector and placed a rising burden of rates on 54 55

John Campbell, F. E. Smith: First Earl of Birkenhead (1983), pp. 7 1 7 - 1 9 . See Earl of Birkenhead, The Life of F. E. Smith, First Earl of Birkenhead (1959), esp.

p. 476.


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56

local businesses. Chamberlain was determined to reduce Poor Law expenditure and strengthen the role of the central state in controlling relief. In 1923, for instance, he had received a deputation from Sheffield, which pointed out that the Vickers steelworks there had calculated that between 1913 and 1922 the cost per ton of steel attributable to the rates had risen from 4s Od to £1 14s Od.57 It is clear that Chamberlain saw the 1925 pensions scheme as assisting the reduction in rates (particularly in the case of widows) by raising the finance directly from the working class; indeed, he argued to the cabinet that the initial saving to the Poor Law would be £3,500,000, rising to £8,000,000 per annum.58 Contributory insurance thus gave the central state greater control over social policy funding. The contributory principle was seen as fraudulent because it placed a double burden on the working class: they not only paid a contribution out of their pay packets, but the employer's contribution would eventually be paid by them in higher prices or reduced future wage rises. As W. B. Reddaway commented, 'only the very simple-minded' would accept the thesis that the employers actually paid their own contributions.59 Apart from underwriting the back-service charge until the new scheme became fully self-funding, the state paid no contributions. Even worse, the Act's ingenious provision for a gradual tapering-off of the state's funding of the 1908 scheme (replacing it with more and more 'by virtue' pensioners aged over 70 funded by their own and their employers' contributions) meant that workers were to be increasingly deprived of what they had fought for and won in the 1908 Act. This point was made forcefully in the debates on the 1925 Act by the Labour MP, Frederick Pethick-Lawrence. He pointed to the increasing liability of 16-year-old entrants to pay for the cost of their 'over-70' pension, and concluded of the Act that: 'so far as it confers any benefits upon young men and women entering the scheme at the age of 16 it causes them to pay for the whole of those benefits which they receive and takes away from them benefits which they now obtain for nothing. Talk of feeding a dog on its own tail!' He also questioned the political morality of the state introducing a compulsory insurance scheme, into which the state paid no insurance contributions.60 An even more interesting and constructive criticism was made in the 56

57 58

59 60

F o r a discussion of this issue, see James E . Cronin, The Politics of State Expansion. War, State and Society in Twentieth-Century Britain (1991), pp. 9 4 - 5 . Dilks, Chamberlain, p . 3 3 0 . C.P.204(25): 'Improved O l d Age Pensions a n d Pensions for Widowed Mothers. M e m o r a n d u m b y the Minister of Health', 18 April 1925, P R O C A B 27/276. Reddaway, 'Preface', p . xiii. HofCDeb., 5s, vol. CLXXXIV, 18 May 1925, cols. 159-61.

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Commons by Hugh Dalton. As a trained economist, Dalton had prepared alternative financial estimates showing how the £42,000,000 in tax cuts for the wealthy

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