REVERSING THE RISKS

Evening Post, Volume CXXV, Issue 143, 20 June 1938, Page 8

REVERSING THE RISKS

The enthusiasm with which the Prime Minister announced at Mastcrton on Saturday night the benefits which are to provided under the Government's social security policy "for a premium of Is in the £, only 4d more than you are now paying for unemployment," will not be shared by those who have made a close study of the proposals or by those who will have to contribute without receiving anything like an equitable return for their outlay. The list of benefits enumerated by Mr. Savage js an imposing one, admittedly, but to suggest that they are all to be received for the payment of a premium of Is in the £ is to omit important factors. The revenue from the tax on wages will not be sufficient to meet more than half the cost of the scheme, and the responsibility for finding the balance will fall on the Consolidated Fund. That being so, it is obvious that the taxpayers will have to find a very large amount in addition to their Is in the £, and the taxpayers who will contribute the larger share are the very persons who are deprived, by the means test, of many of the benefits which the Government aims to provide. They pay their full premiums and through other channels of taxation they subsidise the scheme, but when it comes to a distribution of benefits they are more or less left out in the cold. There can be no equity under such circumstances. In justifying the Government's social security plan, Mr. Savage used the fire insurance premium as an analogy. "Every fire insurance premium you and I pay," he said, "is handed straight over to the unlucky man who loses liis home and furniture in a fire, but we feel grateful that it wasn't our home and our furniture." An insurance company, however, does not charge the same premium for every risk. For instance, the premium on a ramshackle structure with no resistance to the flames and in an area without adequate firefighting equipment would be infinitely greater than the premium on a brick building in a district with a good water supply and efficient fire brigade. The Government, in its social security insurance scheme, is reversing the procedure. The man or woman who often by the exercise of thrift, is a fgood "risk," and who is not likely to qualify for many of the benefits set out in Mr. Savage's eleven points, is being, asked to pay a much higher premium than the man or woman who is likely to make full calls on the insurance pool. The Government is proposing to put the insurance machine into reverse gear.