Thursday, 1 May 1924
Seanad Éireann Debate
MINISTER for FINANCE (Mr. Blythe): The provisions of this Bill are of two main types. First, there is an all-round cut of one shilling in the old age pension. There is also provision for a revision of the scale of means. At present a person may have private means and an old age pension, totalling in all £1 per week. It is proposed that in future the pension and private means shall not exceed 16s. a week. This Bill is being brought in out of necessity. Senators are pretty well aware of the financial situation of this country. They are aware that even with a very much higher rate of taxation here than exists in Great Britain, there is a deficit. It seems to us that no good can be done for the country if we try to wipe out our deficit by means of increased taxation. It would be comparatively easy, I should say, for some time ahead at any rate, to collect the taxation that might be necessary to meet our ordinary expenditure, including debt charges. But we know that the country is already handicapped very seriously by the heavy burden of taxation, and to increase it would tend to strangle industry and handicap enterprise, and finally to impoverish the country. We feel that our line of policy must be to endeavour to make our Budget balance by reducing expenditure and not to be content merely with balancing our Budget on our present scale of taxation, but if possible, to reduce the present burden which, as I have said, is already very considerably higher than it is in the neighbouring countries.
We have undertaken during the course of the past year several substantial economies. We have carried out several measures which give substantial economies. For instance, in  the case of national teachers, whose salaries have risen very considerably since the beginning of the European War, we effected a cut of 10 per cent. In the case of the D.M.P. and Civic Guard we effected a cut which amounted to one-seventh of the salary, a good deal more than 10 per cent. We felt that it was necessary also that a cut should take place in old age pensions. At present this is a very heavy charge on the State. As a matter of fact, we are paying now, with half the Irish revenue for 1920-21, three-fourths of the total charge of old age pensions for all Ireland in 1920-21. We have only about half of the all-Ireland revenue to do that with. In Scotland in 1920-21 the old age pension charge amounted to 2 per cent. of the revenue. In Ireland in 1920-21 it amounted to 9.1 per cent. of the revenue, and in the Free State at the present time, it amounts to 13.2 per cent. of the total revenue. We could not undertake any policy of economy and say that no attention should be paid to this particular charge. We are most anxious not to inflict hardship on these poor people, but we have to bear in mind that the cost of living was higher when the old age pension was fixed at its present scale, than it is at the present moment. It rose in the intervening period to a point a great deal higher than it was when the pension was fixed at 10s. A reduction of the pension to 9s. now would not leave the pensioner any worse off from the point of view of actual value or of actual purchasing power than he was when the 10s. rate was fixed. It would leave the pensioner a good deal better off than he was during the years 1920-21. So that, from the point of view of actual value, we are not leaving the position of the pensioner harder than it was during those years I have mentioned.
I think people will also understand that, in view of the very great financial difficulty that this country is in, we can hardly afford to pay more in actual value to the pensioners at present than was paid to them, say, in 1920, or than was paid pre-war, because the value of 9s. now will be as great as the value of 5s. pre-war. We are simply keeping them in or about the same position.  from the point of view of the value of the pension. If we do that, it is all that we really can do in the present circumstances. We who propose this would be desirous that the value of the stipend of the pensioner should be increased, but we find that that cannot be done, and we propose simply to make an adjustment that will not result in actual loss to the pensioners. In the case of those who have private means, we feel that there is not so much hardship in the provisions for the revision of the means scale. It is not necessary, I think, to go into the details of the provisions of the Bill. If events had been different in this country during the past couple of years, such a measure as this would not have been necessary.
We have had a certain burden of debt piled up against us, and not only that, but great damage done to every industry and business in the country by the upset of these years. We cannot simply ignore that. We must try to carry on our business in such a way as to make the handicap as light as possible. It would be easy for us, perhaps, to say that we were not going to try to meet our recurrent and normal expenditure out of revenue. A policy of that sort would very soon hit the old age pensioner and every other class in the country a great deal harder than economy will. If we pursued a policy of borrowing to meet requirements, the value of money would go down rapidly, and 10s. would not be anything like the value of 9s. Even the £ might soon find itself of less value than 9s., if we did not pursue a sound policy of economy.
Mr. T.W. BENNETT: I have no quarrel with the necessity to reduce the old age pension for the purpose of balancing our Budget, but in the present Bill there are one or two sections that seem to me to be rather harsh. I allude to Section 5 (2)—
AN CATHAOIRLEACH: Of course you are conscious that this is only the Second Reading. I do not want  to stop you. I only want to see that you will confine your observations to the general principle itself until the time for going into details.
Mr. BENNETT: What I mean is the cut seems to me to act rather unfairly. When the time comes I will possibly move that the one-tenth be made less. These are the only things that appeal to me as rather harsh. I would like if some of the anomalies in the existing Bill had been repealed. I know that through administrative action large numbers of people have been excluded possibly who are most deserving of the pension. I think it is a pity that some arrangement could not be made to meet the case of persons who never have had the pension, or who are never likely to get pensions—old people whose ages could not be found and whose names through one cause or another are not on the registers. I know many cases where such people have not got pensions. I regret that some section was not inserted to meet such cases. Otherwise I think the necessity for the reduction exists. I think the arguments for the reduction from 10s. to 9s. weekly perfectly sound. I think if such a reduction was not made and if our finances were let get into a state of confusion the 10s. would possibly not be worth what the 9s. would be.
Mr. MacLYSAGHT: I intend to vote against this Bill, and I would like to give the reason for doing so on such an important matter. The arrangement dealing with assignment is a very good one, but nevertheless I feel that I must vote against the Second Reading. The question of economy is a bee in my bonnet, and Senators will remember that I made unavailing efforts previously to effect some economies. I quite agree that these economies are necessary, but I think the axe is not being used as ruthlessly as it should to justify an attack on the poorer section of the community. At the outside, these people have 16s. weekly, and some of them have nothing at all. To take 1s. from them represents 10 per cent. of their means, and means depriving them of the necessaries of life. If you reduce, let us say, a salary of £360 a year by 10 per cent. you are only making the  holders give up luxuries and, perhaps, making them use a tram instead of a taxi. Since I was here last I believe that Dublin has gone in for taxies! In the case of old age pensioners the cut means giving up something that is absolutely necessary. The Minister for Finance states that 13.1 per cent. of the revenue is represented by these pensions. I believe the reason the percentage is 13.1 is that the wrong people have pensions. I do not want to stir up muddy water, and it is exceedingly muddy water, this question of old age pensions in the country. The people know the unsatisfactory way in which the pensions were given. It is really a legacy of the old regime, and I do not want to rake it up. What I do say is, if the ineligible pensioners were eliminated it would be much more satisfactory than to deprive the poorer section of the community of one-tenth of their income, and it would save much more than £300,000. If I saw an indication that the axe was going to be used impartially, and that ineligible persons were going to be deprived of the pension, instead of depriving the deserving ones of 1s. a week, then I should vote for the Bill.
Mr. BARRINGTON: Following what Senator MacLysaght has said, I think it is an open secret that there are vast numbers of pensioners throughout the country who are not really entitled to it. There are men who were owners of farms, that they made over to their sons, and who remain in the house, in receipt of pensions. Their wives may be also getting pensions. These people are to all intents and purposes in the same position as they always were. They have far more means than the minimum set out in the Schedule of the Bill. I am quite sure that what Senator MacLysaght has said is absolutely true, that if power was taken to revise these pensions a far greater saving would be effected than by depriving old people, who really deserve it, of 1s. a week.
I know a case which occurred a short time ago within my own experience. A woman met me on the road and said that it was very hard lines that she was not in receipt of  a pension. She said that she believed that she was the right age, but there was no record of it. I said, “How are you entitled to a pension; have you not got a farm?” As a matter of fact, she was driving three very good milch cows along the road. She said, “My husband has a pension, and I do not see why I should not have one also.” I said, “How are you entitled to it? Your means are greater than the minimum in the Act.” She stated that everyone else had a pension and she did not see why she should not have one as well. I know that these cases exist to a large extent, and I should not be surprised if on investigation it was found that the bulk of old age pensioners was composed of people of that class. I hope that the provision of Section 4 will either be extended or used to enable this sort of pension to be reviewed.
Mr. FARREN: The Minister when explaining this Bill informed us that there would be an all-round cut of 1s. a week in the old age pension, and that further than that there would be a revision in the scale of means of persons eligible to get the pension, and a revision of the amount in proportion to the amount they received. It is intended not only to take 1s. a week off the old age pensioners, but there is a further cut to take place, so that people who have been a little bit thrifty and who have endeavoured to provide for their old age are to be penalised, and the amount of the income they receive is to be considerably reduced under this Bill. I asked the Minister to explain the Bill, but he did not tell us what the amount of saving would be. I was anxious to hear the figures as to the amount of saving which would be effected by a reduction of 1s., and by the reduction on the amount of income which they would be entitled to have to enable them to receive the pension. He bases his whole case for the Bill on the fact that we must have economy.
Under the provisions of this Bill we propose to have economy at the expense of the poorer section of the community, the section that can offer the least resistance—the poor tenement  slum dwellers who have nothing but 10s. a week to keep body and soul together, and who, because of their pride, will not go to the union and be branded as paupers. These people are endeavouring to eke out an existence in miserable slums in Ireland and by their refusal to go to the union are saving the ratepayers a considerable amount of money, because if they went to the unions they would cost the ratepayers considerably more than the miserable 10s. which they get to enable them to keep body and soul together. The Minister, when introducing this Bill in the Dáil, said that some people were inclined to think that because of the success of the Loan there is less need for economy than previously. He said that there is no less need—in fact, we still have to borrow, and if we are to carry out the promise of economy given when the last loan was issued, we would still have to economise. Are we to understand from that that the Minister got his loan on the promise of economy such as this? I say, “If this is the price we are to pay for the loan of money, for God's sake give it back.” Is this the price we have to pay for wealthy people subscribing to the loan? Are we going to reduce the aged poor to such a state, when. God knows, they are in a bad enough position already.
The Minister, while making the 1s. cut all round, proposes to reduce the amount of income a person should have to entitle him to receive the old age pension. That means that people who have been thrifty and who have endeavoured to provide for the rainy day, are to be penalised. In most of the Trade Unions in this country men from boyhood and women from girlhood, have subscribed to the different Trade Unions, to many of which are attached benevolent funds. They subscribed from the time they were 18 or 20 up to the period at which they are past their labour. They subscribed in many cases for over 50 years to the benevolent funds, and they are entitled to a small superannuation allowance from the respective Trade Unions. The Minister, under the Bill, proposes to penalise these people because they endeavoured  to do something which every right thinking man and woman would endeavour to do. These people will have their pensions docked so much in consequence of their being thrifty. If the Trade Unions who pay superannuation allowances to their old members have any sense, they will take the benefit to themselves and not allow the State to have it. I think that is likely to take place. It is unfair that old men and women who have been thrifty should be penalised in this fashion. The Minister told us also that the old age pensioners will be as well off now with the proposed cut as they were in pre-war days. Would the Minister tell us that they will be as well off as when the Old Age Pension Bill was first introduced?
What is the difference between the cost of living when the Old Age Pension Bill was first introduced and the cost at present? If he makes a calculation he will find that they will not be as well off by the reduction of 1s. as they are now. I must oppose this Bill, because I think we are starting economy at the wrong end. We see across the water that not alone are they not going to make a cut in the old age pensions, but responsible statesmen have promised to wipe out this question of means altogether. They have in contemplation a reduction of the age limit. I think some old age pensioners in this country will begin to wonder whether this glorious prospect that was held out to them a few years ago when we got the management of our own affairs, is such a glorious one. The Minister does not tell us that there is any intention to have a revision in the pension in a few years time, and so far as I can gather, this is only to be the first cut. He does not hold out any hope that if things improve there will be a little increase given. I do not intend to say anything more on the Bill at this stage, as in Committee we will have a further opportunity of discussing it. I oppose it, and will vote against the Bill.
Dr. GOGARTY: It seems to be forgotten how this old age pension arose. To listen to the statements here one might think that there was a general refusal for anyone to enter the seventies, until that extraordinarily generous  democrat, Mr. Lloyd George, made a gesture, at the nation's expense, first of 5s. and later of 10s. That was one of the most unwelcome heritages we had to accept when the Free State was being formed.
While I listened to those who objected to the old age pensions and who objected to the cut, I noticed that it was not so much against the cut as against the fact that there was no machinery to discriminate between those who were deserving of the pension and those who were not. I have seen people who were middle-aged drawing the old age pension, because they thought it had become the fashion. When we remember the country is greatly handicapped and has to pay over a million a year for the vote-catching device of an English politician, I do not think it is incumbent on us to raise a cry against the very worthy attempt of the Treasury to make us live within our income. One would think there was nobody prepared to live in the country if he could not get a pension at 70 years of age, and that the civic pride of which Senator Farren spoke as existing in the slums, is absent from the rest of the country. Nevertheless, it does not prevent people accepting the dole with alacrity. It is not so much the Bill he criticises as the discrimination of those entitled to the pension, or the suggested machinery to prevent people divesting themselves of their goods in favour of their sons in order to enjoy this alien imposition imposed on our State. I am in support of any attempt at retrenchment, and I shall support the Bill.
Colonel MOORE: I consider that the most unscrupulous cutting down of expenditure should be made in this country, and if that had been done I would find no fault with this Bill, but on the other hand, I see extravagances  and expenditure of money that should never have been expended, and all sorts of extravagances that ought to have been put down. It is those extravagances in the Army and other places that have produced the necessity for the Budget or the Estimates that have now come before us, and which showed the necessity in this country of cutting down expenses. If the Ministry had begun at the top of the tree, for instance, with the Governor-General and the expenses concerning his establishment, and all the other expenditure, and gone down through the list of expenses which are quite beyond the power of this country to pay, I would have nothing to say against this Bill. I feel that the present Minister for Finance is doing his best to make some cuts, but I think he began at the wrong end. He began with the poorest instead of the richest and that is the reason why I oppose this Bill. We see in the Budget all sorts of things which are going to hit the people. Jam, which is most used by the poor people, is taxed. Everything is against the poor instead of the rich.
Mr. FORAN: I would like to say something on the point raised by Senator Gogarty, who describes the old age pension as an alien imposition. I would like to say that if the aliens had imposed more legislation of this kind on the country I would regret their leaving it, and how any Senator can get up in this assembly and actually disagree with the pensioning of the aged poor in this or in any other country, I cannot understand. When he gets up and makes a statement of that kind, I fear it would be too much to allow it go unchallenged. I think that in every democratic State in the world the tendency is to introduce legislation of this kind. It may be that in this country the administration of it is somewhat loose, and that we may be able to do something to tighten up the administration, because nobody would approve of middle-aged people drawing pensions. These are the people we are to deal with instead of coming in and attacking unfortunate people who have to try and exist on a pension of 10s. a week. We are told that the rate must be cut down to that of the pre-war period. No  Senator in this House, or no fair-minded pensioner or fair-minded individual, agrees that a pension of 5s. a week is adequate for any person who has spent a decent life and gets into the seventies after having rendered valuable service to the State. I do not think it was that much-talked of politician who introduced that Act at all. I think it was Asquith, and not Lloyd George. On our side we disagree with the amount of pension, but approve of the tightening up of the administration.
Mr. DOUGLAS: I do not suppose there is a member of the Seanad who would not vote gladly against the Bill if they thought they could do so fairly and honestly. The Bill is naturally an unwelcome one. Most of us who have given support to the Government would feel that we would like to dissociate ourselves from a measure of this kind. I have given it great thought, and decided I will not vote against the Bill, not because I do not think the whole of it is desirable, but because I think we must all share to a large extent the responsibility. The Bill divides itself into three parts, one of which I am totally opposed to, one of which I reluctantly agree to, and one of which I favour. The latter provides for the general tightening up of the machinery in which, I think, we must give every possible assistance to the Government. I doubt very much the wisdom of the provision by which thrift is penalised. Unless the Minister puts before us figures which will show that this is a vital part of the Bill, I will vote against it in Committee, because I think, particularly in Ireland, it is a mistake to have it thought or felt that those who are at the age of 70 should be unduly penalised because of their savings. In a sense, that applies to another provision of the Bill, but to alter it would be unwise. The other provision is a provision which reduces the 10s. a week to 9s. in accordance with the cost of living. That I reluctantly would agree with under present circumstances, though I do not like it.
Mr. KENNY: I would like to call attention to one matter in particular in this Bill. Presumably it is the intention of the Bill to put all old age  pensioners pretty well on the same footing. We find in the schedule that the first application of the reduction to 9s. would be to people whose means do not exceed £18 5s. a year. Now, that £18 5s. a year would be 1s. a day, and that provision would mean that a person having 7s. a week would get 9s. pension. Now, anybody who has experience of old age pensions administration would know that the vast majority of people at present in receipt of old age pensions are not drawing 7s. a week from their own resources. My experience is that most of those people have nothing at all. But they have a son or daughter who are in indigent or poor circumstances, but who yet can give them a corner at the fireside and a bed to the aged father and mother. That particular class of accommodation would be worth perhaps 2s. a week. Most of the pensioners have that. Others have 2s. or 3s. a week in addition to that from a former employer who is charitably disposed. Well, here you find a schedule with 7s. a week or 1s. a day. There is a big disparity between the old age pensioner who has 7s. a week and gets a further 9s. a week pension and the vast majority of the people to whom I refer. These are people who have nothing at all, but who are entirely dependent on the 9s. I do not think that anybody could say that 9s. a week would provide barely an existence for a person at the present prices. But when you come to a minimum—no matter how low you place the standard—then every penny cut off that standard means a lowering of it. That would be getting on towards the actual hunger point. I do not think any Teachta or Senator would like to see a person in circumstances like that. I only refer to it to ask the Minister to reconsider this point. I cannot give him approximately what the change would mean, or what it would amount to. Take, for instance, a person who would be in receipt of £7 16s. a year. That would be 3s. a week. My suggestion would be to give him 10s. a week. Now, that person would have 13s. a week between the two. That would still leave a great disparity between that person and the next person who  would receive 16s. I do not know what the change would mean in the way of money to the Treasury, but, certainly, the intention of the Bill is to put all old age pensioners as nearly as possible on a similar footing. At the present moment there is too much of a gap between the man I indicate and the one who gets 16s. a week.
Mrs. STOPFORD GREEN: I believe that there are many people who find themselves in the position that I find myself in—that is, being drawn into consultation without having the information needed for coming to a just and right opinion. An inquiry was begun by the Government last November, and the facts given by the Government in April do not add a single item to what we were told in November. We do not know how many figures like 80 per cent. are given. They convey nothing. We do not know what is the proportion of the various classes, how many are fraudulent and how many are honest people, and unless some figures of some kind are given it is very difficult to make up one's mind. It would, I think, be a relief to some of us if we could feel that in a year's time there would be some further examination of the whole question. Then we might know what were the facts, how far the city districts differed from the rural districts, where aid was most needed, and how, without lessening economy, we could give the best aid to the poor. If we had some promise of that it would be a relief to some of us. I do not know whether the Minister would be inclined to consider that view, but it would, I am sure, be a relief to many of us.
The EARL of MAYO: I intend, sir, to vote for this Bill, particularly on the score of economy. There was one remark made by the Minister for Finance, Mr. Blythe, which I could not follow, when he said that 5s. some few years ago would be worth 9s. now. That would lead one into a vista of statistics and calculations which is quite beyond my brain even to think about. Now, there was another remark made by Senator Colonel Moore. He asked why do you  not begin at the top. He said why not begin at the salary of the Governor-General, which is, I believe, £10,000 a year. Why not begin here with ourselves? We get paid for coming here and we get free passes. I would ask the Labour Members now would they consider this proposition —if they would like to return 10 per cent. of their salary to the Government or perhaps a little more, and pay a part of their free passes. I think that would make a difference, and it would, at all events, be some help to meet our obligations and would be well received, I am sure, by our Finance Minister.
Colonel Sir HUTCHESON POE: I would like to refer to one matter which has been lost sight of by other speakers. It is very material. When the Old Age Pensions Act was introduced some years ago, the idea was to save a certain percentage—what the percentage was I do not know—of people who in those days were obliged to go into the workhouses, from doing so. It was never intended that the Act should be a step towards the evasion—because that is what it meant—of family obligations. In those days there were certain people—I am speaking in reference to the agricultural community particularly—who were not in a position to support the aged members of their families, and the old people, in the absence of any help, were obliged to go into the workhouse, a stigma which we all know they were very much averse to. Unfortunately when the Old Age Pensions Act came into operation, many agricultural families took advantage of it to try to evade their responsibilities towards the aged members of their families, and instead of supporting them as they had done, they tried to get in the thin end of the wedge, and they got the pension. The Minister has referred to the great laxity in the administration of the Act, and grave abuses arising from it. I gather from the reports of the proceedings in the Dáil that the Minister intends not to be too strict as to exactly who shall benefit by this Bill, but he will be very strict in the case of people who are not entitled to any benefit, getting any benefit from it. I am quite in agreement  with Senator Mrs. Stopford Green's suggestion, and I believe we would all welcome a revision of the scheme after a short period. The Minister tells us he has no intention of interfering further with old age pensions, and I think we can accept that assurance. I am quite sure that is the intention, and that that intention will be adhered to. Later on, when we come to discuss the details of the Bill, if the Minister can see his way to make any little concessions, I am sure he will do so. I hope the Seanad will not think of rejecting the motion for the Second Reading.
Mr. BLYTHE: When I spoke in the first instance, I omitted to say that the saving to the Exchequer by means of the Bill if it passes in its present form, will amount in the first full year to £400,000, and that amount will ultimately rise to £500,000, or a little over it, per annum. While I would be very glad if we could revise this Bill, and if necessary reverse the process of it, I do not think there would be any possibility of being able to do that within a year, or even two or three years. Some little time must elapse before our finances would be in such a position as to enable us to do that. While undoubtedly a considerable number of people in the past received the pension though they were not entitled to it, the number is not nearly so large as is commonly believed. You usually find there is more  talk about the one person who is receiving a pension without being entitled to it than there is about the thousand persons who get the pension and are justly entitled to it. Everything possible has been done, since the change of Government, to review questionable cases with a view to taking the pension from people not entitled to it. I do not think the number is really very great. It certainly would not give us any considerable fraction of half a million a year. When people talk about economies the thing to remember is that we want economies running into some millions, and certain picturesque cuts which we could make and which might save perhaps £50,000, are not any solution of the difficulty. I would like also to deny entirely the charges of gross extravagance made against the Government. I do say that while we were not able to concentrate on the question of economising during the time when the safety and the life of the State were in danger, we have not indulged in any orgy of expenditure. If Senators will remember how the Army was created, how it was flung together and sent out to fight almost in the process of being created, they will understand that there was of necessity some laxity and some losses, but I do not think there is any other State where an Army was so created in which there has been less or as little cause for complaint.
Thomas Westropp Bennett.
Richard A. Butler.
Mrs. Eileen Costello.
Peter de Loughry.
Sir Nugent T. Everard.
Oliver St. John Gogarty.
Mrs. Alice Stopford Green.
Sir John P. Griffith.
Henry Seymour Guinness.
Marquess of Headfort.
Rt. Hon. Andrew Jameson.
|Patrick Williams Kenny.
Earl of Kerry.
General Sir Bryan Mahon.
Earl of Mayo.
James J. Parkinson.
Col. Sir William Hutcheson Poe.
Mrs. Jane Wyse Power.
Earl of Wicklow.
William Butler Yeats.
|Joseph Clayton Love.
William John Molloy.
Col. Maurice Moore.
|Last Updated: 16/05/2011 19:07:53||Page of 17|