112 SECTIONAL ADDRESSES. 
contrast the advantages of making provision for families within each 
industry separately or through a more general scheme of taxation. If 
the bachelors are more willing to pay the tax when they see their comrades 
and their comrades’ children benefiting, the first method has at least one 
great advantage. On the other hand there are advantages in extending 
the area of the tax to bachelors not engaged in industries providing 
subsidies, and even to some who are not bachelors. There is much to be 
said from the point of view of the revenue in favour of taxing those who 
are without dependants far more fiercely than they are taxed at present, 
but the policy of earmarking taxation is always a somewhat doubtful 
one, as earmarked contributions may be less or more than is needed to 
cover the cost of the object for which they are earmarked. 
From the suggestion to tax certain wage-earners for the benefit of 
other wage-earners we may pass to the practice of taxing wage-earners 
for their own benefit, as embodied in unemployment and health insurance 
schemes, in the various pension schemes already adopted in the Civil 
Service, and as proposed in the Pensions Bill. It may be said that here 
we are not dealing with taxation but-merely with deferred pay; that 
the contributions, covering as they do the workers’ own risks, are a 
forcible method of saving, but cannot fairly be called taxation. This is 
perfectly true when the saving would or could be made voluntarily. 
Indeed, when compulsory savings replace voluntary savings the worker 
may gain in earnings, since the compulsory scheme may contain a contribu- 
tion from the Exchequer and large-scale insurance is cheaper than small- 
scale insurance. But when wage-earners are too poor to save, enforced 
saving leaves them for the time being poorer than before, and Mr. Neville 
Chamberlain’s hope that the Pensions Bill® ‘would encourage people to 
try to add to the benefits and thus achieve complete independence for 
themselves ’ is likely to be frustrated by the reduction in their means. 
We are agreed that the benefits of these schemes must be secured. We 
are, I believe, agreed that they must be augmented. But the provision of 
future benefits by taxes on present wages may not be the best method of 
giving such benefits when wages are low. The wage may be too small 
to be deferred. Nor does the fact that employers pay a larger proportion 
when the wage is exceedingly low help those who are on the verge of 
unemployment and may by this arrangement be pushed over it. 
It is to be feared that if normal wages be not adequate to cover calcula- 
tions for the future, contributory schemes, however advantageous, may 
make things more difficult than before for workers belonging to a grade in 
which numbers are great in proportion to demand. It cannot be assumed 
that the demand for such labour is inelastic. In many instances it is, as 
when labour paid at a low rate is employed in co-operation with better- 
paid labour and in industries in which its cost is but a small proportion 
of total cost. But frequently the demand is elastic, as in agriculture, 
where we are constantly told that labour cannot profitably be employed 
even at minimum wage rates which seem to many of us less than moderate. 
Contributory insurance schemes have occupied much attention lately, 
probably more than they deserve. The contributions demanded by each 
individual scheme are no great matter; even taken together they do not 
amount to a vast charge per worker. But, small as they are, they are 
6 The Times, May 19, 1925. 
