National Insurance. The Wonderful World of Pensions for All.

With the turn of the year, the weekly national health and pensions insurance deduction has been increased by one penny. It sounds little enough in itself, but one needs to be only a little bit behind the scenes to realise what a gigantic farce is this one facet of the capitalist structure. At a time when the cities of Britain are holding waste paper “drives,” thousands of leaflets have been printed giving particulars of the new deductions, values of stamps to be affixed, etc., etc.; head offices of giant concerns have sent out thousands more circulars; overworked wages clerks all over the country, at a time when all effort is supposed to be directed towards the practical furtherance of the war, are poring over the circulars and spending many extra hours, often unpaid for, in altering the pay sheets and balancing the deductions. Clerks in post offices and insurance companies are similarly affected. Millions of unused stamps will have to go back to the paper mills. Fresh stamp dies must be cast. From a purely monetary point of view, several thousands more pounds a year will come into the Exchequer ; so far as the worker is concerned, it will be only another penny off his wages, and he won’t notice it—any more than he has noticed the slow rise in the cost of living (a slow rise is so much more imperceptible than a rapid one), the reduction in the meat ration, the jam ration, and the income-tax deduction—after all, his wages have gone up. Keep on piling straws on to the camel’s back is the principle adopted, one day his knees will begin to bend, and then, before it is too late, you can take the last straw off again.

Of course, we know the old age pension has been increased. It now amounts to the large sum of twelve shillings a week. Actuarial accountants love to work out these little sums—so much per week on the weekly contribution, so much extra on the old age pension. But the funny part about it is that these increases take place just at a time when all the old age pensioners have elbowed their way back into industry again and are hard at it, together with the “too old at forty’s,” lathe turning, portering, rivetting, and so on.

It is questionable whether pensions insurance is any more upon an “actuarial” basis than unemployment “insurance.” As anybody who has followed the ups and downs of unemployment insurance is aware, during periods of depression large sums have to be taken from the proceeds of general taxation to augment the unemployment fund, the process being reversed during periods of “good” trade. In the present instance, the decrease in the civilian death rate indicates an improvement in the health of the population, so that the expenditure upon sickness benefit should less; the average total weekly increase in deductions is 2d. (1d. employer, 1d. worker), the increase in pensions is 2s. ; is one worker in twelve in receipt of an old age pension?

Capitalism is much the same everywhere. The New York Nation of November 8th last states that it now appears certain that “the U.S. Treasury will rely on a substantial increase in the pay-roll taxes levied under the Social Security Act for a major part of the additional revenues required for the 1942 tax bill.” “One proposal, which apparently has strong support within the Treasury Department, calls for raising the employee’s contribution to the old age and survivor’s insurance fund from the present one per cent. to five per cent., and increasing the levy which supports unemployment insurance. The possibility of combining old age, survivors’, disability and unemployment insurance in one system, supported by a tax of approximately six per cent., is also being studied.” Commenting upon this, the Nation states, “It would undoubtedly reduce purchasing power, but since it would fall predominantly on low-income families, its chief effect would be to cut down the consumption of food and other everyday necessities,” and, further on, “On the pretext of extending the benefits of social insurance, it would adopt a brazen soak-the-poor tax bill.”

But putting high salaried actuaries on one side for the moment, what is the practical effect of the recent change? Relatively, the position is the same as before —the worker has a bob or so stopped out of his wages, the old age pensioner can still manage to escape the workhouse by sponging on his poor relatives or, if there are none, he can in most cases get a supplementary allowance from the public assistance committee, and the employers think they have done a nice little bit of business by making the worker bees save up for their old age, so saving the expense of keeping them in institutions. We hate to disillusion our capitalist masters, but would it make so much difference if the whole vast governmental apparatus of deductions, accounting and stamping were scrapped and the “pension” paid out of general taxation? Actually, it would make but little difference, for the worker’s wages always tend to equal the cost of living—after all, you must feed the beast to get the work out of him—so that deductions from wages tend to be counter-balanced by increases in wages, and in any case, it is the capitalist class themselves who fork out the bulk of the taxation. The whole business reminds one very much of the “octroi” system in France, where taxes are levied on all sorts of commodities coming through the gates of a city, thus bottling up the traffic on important roads. The principle is the same. The capitalist class have a great dislike of coughing up the necessary cash to run a necessarily expensive administration, so they think out all sorts of ways of passing the buck on to the worker, thus causing themselves more expense in the long run than would otherwise be the case.

But the even funnier part of the whole business is: the thousands of government clerks, many of them poring over and haggling about interpretations of regulations and enactments, deluding themselves with the idea that they are doing highly important work, and the workers taking it all in and saying “what a wonderful world we live in—a pension for all those who are too old to work.”

However, some workers don’t take it all in, and perhaps this short sketch will cause some enquiring new reader to make a more thorough examination of the capitalist society in which we live.

RAMO.