MAJORITY REPORT.

the health service should be available. They do not appear to
have contemplated the possibility that in some areas the proportion
 of the population who would be embraced within the
scheme under any income limit likely to be acceptable to the
industrial classes, would be so large as to afford a strong argument
on grounds of public economy for the replacement of the contract
system by a whole-time salaried service.
180. The National Association of Trade Union Approved
Societies appear to have accepted the insurance principle, and
indeed, desire to extend it in several important respects (see App.
XCII, paras. 102-104). The National Conference of Friendly
Societies approve, as we have indicated above, a complete
reorganisation of all health services on a public basis financed
entirely from rates and taxes.

131. Mr. Alban Gordon makes the following statement : —
““ My own personal predilection would therefore be in
favour of abandoning altogether any attempt to base a
National Medical Service on insurance funds, to abolish
medical benefit altogether, relieving the Insurance Act contributions
 proportionately, and to finance a National Medical
Service out of taxation, national and local. The incidence
of such taxation would, in the long run, be very much the
same as that of the contributions under the National Insurance
 Act, the remitted or substituted portion of which would,
therefore, counterbalance that increase in general taxation.
““ At the same time it cannot be denied, from the point
of view of political expediency, that it might be unwise to
hand back to the insured persons and their employers a
sum of eight million a year, which they are now paying
without complaint, only to re-levy the same sum in the
form of increased taxation in some other direction whizh
might be strongly resented. Furthermore, the insurance
funds now contain an exceedingly large sum of money by way
of accrued surpluses on the first two quinquennia, a large
portion of which is proper to be used for medical and allied
purposes. Some of this might well be utilised as a capital
sum to defray in whole or in part such expenses consequent
upon the inauguration of the National Medical Service as
are of a capital nature, e.g., primary health centres, such
as are contemplated in the Dawson Report, additional
hospital accommodation, and conversion and improvement
of existing hospital buildings, &c.”” (App. XIII, 46,47.)

Tae ‘“ Means TrsT.”’

132. In connexion with these views we may give a brief
outline of the operation of what is called the ** means test ’’ as it
appears in the various health services. In the Insurance system