10 things you may not know about the Beveridge reportPosted: November 27, 2012
This Saturday sees the 70th anniversary of the publication of the iconic report credited with the creation of the welfare state.
Sir William Beveridge published his report within weeks of the victory at El Alamein that seemed to mark a turning point in the Second World War. His ideas, and the language in which he expressed them, seemed to many people to symbolise what they were fighting for: a better world after the war and no return to the miseries of the 1930s.
He famously set out to slay five giants: Want, Disease, Ignorance, Squalor and Idleness. The report recommended a comprehensive system of social security to replace the mixture of private insurance and means tested dole that had existed before the war. It also made three basic assumptions about post-war society: a free and universal National Health Service; policies to promote full employment; and family allowances paid to all households with children regardless of whether they were in or out of work.
Here’s a flavour of the inspirational message:
‘Freedom from want cannot be forced on a democracy or given to a democracy. It must be won by them. Winning it needs courage and faith and a sense of national unity: courage to face facts and difficulties and overcome them; faith in our future and in the ideals of fair- play and freedom for which century after century our forefathers were prepared to die; a sense of national unity overriding the interests of any class or section. The plan for social security in this report is submitted by one who believes that in this supreme crisis the British people will not be found wanting, of courage and faith and national unity, of material and spiritual power to play their part in achieving both social security and the victory of justice among nations upon which security depends.’
It’s a testament to the power of his report that even now politicians who want to reform the welfare state talk of going ‘back to Beveridge’. Yet behind the enduring myth, the truth about Beveridge and his famous report is sometimes different and almost always more complicated. Here are 10 things you may not know:
1) The man. Beveridge was 63 years old when the report was published. An expert on social welfare and unemployment, he had been a senior civil servant before and during the First World War and was one of the main architects of labour exchanges and wartime rationing. However, his focus had shifted from welfare to economics in the 1920s and 1930s (he was director of the London School of Economics for 18 years between the wars). When the Second World War broke out he was desperate to return to the civil service to work on manpower issues. He turned down an invitation from the minister, Ernest Bevin, to head up the Ministry of Labour’s new welfare department on the grounds that ‘I didn’t feel welfare was up my street’.
2) The job. The innocuous-sounding Committee on Social Insurance and Allied Services came about ‘almost by accident’, according to Beveridge’s biographer José Harris, and was meant to be about the technical details of co-ordinating different pre-war schemes. Bevin saw the job as a way of getting rid of him. Beveridge reacted to the job offer by bursting into tears over what he (rightly) saw as a ‘kicking upstairs’.
The committee’s terms of reference were to make a survey of ‘existing national schemes of social insurance and allied services, including workmen’s compensation, and to make recommendations’. Beveridge was determined from the start to turn it into something much more far-reaching and to go beyond a consideration merely of cash benefits. He sketched out most of the elements of his plan a year before the report was published and before the committee had heard any witnesses.
3) The impact. The Beveridge report sold 100,000 copies in the month after publication and a total of 600,000 including a cheaper and shorter version. An American edition sold another 50,000. Copies circulated in the resistance movements of occupied Europe and assessments of it were found in Hitler’s bunker in 1945. One ordered that it should get no publicity but if it did get mentioned it should be described as proof that ‘our enemies are taking over national-socialistic ideas’. The second assessed it as ‘superior to the current German social insurance in almost all points’. The share price of commercial insurance companies slumped after the report proposed universal national insurance and a National Health Service.
4) The politics. Beveridge is hard to pin down politically (a key reason why politicians from all parties still use him as a reference point). His initial reaction to the Great Depression in the 1930s was to argue on free market lines for wage cuts but he was gradually converted to the more socialist idea of economic planning and later became a Liberal MP. The same mixture is evident in the 1942 report. In an early ‘heads of a scheme’ paper Beveridge described the National Health Service as ‘a free universal service on communist lines provided out of taxation’. He saw full employment as an essential precondition for the plan to work but also advocated compulsory training camps for malingerers. The report also argued in imperialist terms that ‘housewives as mothers have vital work to do in ensuring the adequate continuance of the British race and of British ideals in the world’.
5) The gaps. As I explained in a piece for Guardian Housing last week, Beveridge had no answer to the question of how to pay for housing costs. This ‘problem of rent’ was seized on by critics inside the government as an excuse for rejecting the principle of subsistence. His biographer José Harris described it as ‘an Achilles heel for the Beveridge system for the elimination of means tests and the abolition of primary poverty’. However, there were other gaps in his report too and these grew as society changed after the war in ways that he could not have foreseen. His insurance-based system would also struggle to cope with the needs of married women, single parents, carers and the civilian disabled. His insistence on the principle of flat-rate contributions for flat-rate benefits also meant that insurance benefits had to be kept low to make contributions affordable to the low paid.
6) The Welfare State. Beveridge hated the term because to him it implied a ‘Santa Claus’ state. ‘Benefit in return for contributions, rather than free allowances from the State, is what the people desire,’ he said in the report. He preferred the term ‘social service state’ with an emphasis on duties rather than rights. In the late 1950s, an old friend recorded in his diary that Beveridge had met him for lunch in distress that ‘his original ideas had been mutilated, reversed and taken completely out of his hands although given his name; that he had come to loathe both the caption “Welfare State” and the title “Beveridge Plan” which had become like advertising slogans, which taken together had led many people hopelessly to misunderstand what he had truly worked for’.
7) The other Beveridge reports. The 1942 plan was one of three Beveridge reports. He described his proposals as ‘a very small part of what is required for social reconstruction’ and as the prelude to the industrial reorganisation and economic planning that would be needed after the war. The second two parts of what he saw a trilogy were Full Employment in a Free Society (1944), which set out his ideas on economic planning, and Voluntary Action (1948), which argued that the state needed to leave space for non-governmental forms of action in ‘the promotion of the good society’.
8) The backlash. The Whitehall establishment strongly disapproved of the way he conducted his inquiry and publicised his report. He was excluded from working on the implementation of his plan and was never again employed inside the civil service. The Treasury ordered that there should be no official assistance with his Full Employment in a Free Society and all his civil service advisors had to withdraw. He was later appointed as chairman of two new town corporations in the North East but was told in 1952 that he was too old to continue after he had resisted attempts by the Conservative housing minister Harold Macmillan to increase house building by cutting house sizes and amenities.
9) The popularity. The man dubbed the People’s William was elected as the Liberal MP for Berwick in a by-election in 1944. However, that was held under the wartime convention that the three coalition partners would not stand against each other. His apparent popularity counted for nothing at the 1945 general election and he was defeated by the Conservatives after only nine months as an MP. According to Nicholas Timmins in The Five Giants, the main issue in the election was neither social security nor health, but housing.
10) Means testing. Much of the popular support for Beveridge’s principle of insurance-based benefits was based on hatred of the means testing (and in particular the household means test) of the 1930s. The plan included a safety net of means-tested national assistance (what would later become income support) but Beveridge envisaged that the need for it would diminish over time. That turned out to be completely wrong, partly because of the flaws in his plan, partly because society and the economy changed and partly because of the way the system was implemented after 1948. Pensions were paid in full from the start, which meant they were never really paid for out of the pensioner’s contributions. National insurance rates were only uprated once every five years whereas national assistance was uprated with inflation annually and claimants normally had their actual rent paid in full. Means testing gradually displaced insurance over time and the universal credit, which the government bills as the most radical reform of the welfare system since Beveridge, is in many ways the complete opposite of what he proposed.
Most of the details in this blog come from William Beveridge: A Biography by José Harris and The Five Giants: A Biography of the Welfare State by Nicholas Timmins. The report itself is not available anywhere in full online that I can discover (an extract is here) but this summary produced by the American Social Security Administration in 1943 gives a good contemporary impression. If you listened to today’s The State of Welfare on Radio 4, you will know some of this already. If not, it’s well worth listening again.