Nicholas Timmins - The Five Giants [New Edition] - A Biography of the Welfare State

Beveridge himself – who in March had spoken from a Liberal Party platform on the theme of ‘a people’s war for a people’s peace’ 34– set to work on a follow-up report on how to achieve full employment. But he found himself frozen out of Whitehall, the Treasury officials whom he had invited to join his study withdrawn. The government refused to commission his report: indeed, it worked frantically to get out its own White Paper, which proposed a ‘high and stable level of employment’ ahead of Beveridge’s Full Employment in a Free Society. Jose Harris judges that the way he had courted massive advance publicity for the 1942 report ‘was seen by many people inside Government as a flagrant breach of Whitehall conventions and as an attempt to usurp the powers and functions of the regular policy making machine’. 35He was not to work in Whitehall again until 1949, when the Labour Government appointed him to head an inquiry into the BBC monopoly.

CHAPTER 3

A very British revolution

It was the totalizing ambition of his [Beveridge’s] report that made its proposals so striking; the complete coverage against risks for all people. All for one and one for all. The Three Musketeers meet the Government Actuary.

Peter Baldwin, ‘Beveridge in the longue duree’, York Papers, Vol. A, p. 30

A LAYMAN READING the Beveridge report today is likely to be impressed not just by the way it provides the blueprint – if one that was far from entirely followed – for the modern social security system; nor only by its trumpet calls for the creation of the other giants of the modern welfare state. Even more striking, it contains almost all the key arguments that have raged about the welfare state since its publication.

You could almost believe, listening to the debate about its future down the years, that despite very changed circumstances there is nothing new under the sun. Indeed, from one of the many faces of the prism through which the report can be viewed, its proposals for social security may best be seen not as a great innovation but as an attempt at a knife-edge balance between competing and quite possibly irreconcilable goals. Beveridge also confronted a series of issues that neither he nor anyone in the succeeding fifty years has managed satisfactorily to settle. Chief among this group were: the seemingly easy question of what is meant by poverty; how to cope with housing subsidy; and the treatment of women within the social security system. Chief among the competing goals were the desire to provide security as of right, set against incentives for work and saving; and the balance between individual freedom and compulsion – compulsion for the good of all and for the good of the individual.

It may be a truism, but before you can abolish poverty you have first at some level to decide what you mean by it. Poverty was not a word Beveridge used. Throughout the report he settled for the then common synonym ‘Want’. It was his bold claim that Want could be ‘abolished’ which gave the report much of its popular appeal. As Tom Wilson put it, ‘the general public understood what was intended, and that was enough to win their enthusiastic support.’ 1But poverty has to be defined, and a minimum income quantified, if it is to be avoided.

Beveridge’s answer was a ‘subsistence’ income, a term he defined as meaning ‘benefit adequate to all normal needs, in duration and in amount’. 2He instantly conceded that there were ‘unavoidable difficulties’ in putting cash figures on such a concept. He had, none the less, to do so; and to set his benefit rates Beveridge drew extensively on the work of Seebohm Rowntree, the British Medical Association, a League of Nations study, and figures from the government-run Family Budget Survey which covered food, clothing, fuel, light, household sundries and rent. In several places the report suggests that the benefit levels he recommends are scientifically based, 3and he specifically criticises the levels of benefit set before the war precisely because ‘none of them were designed with reference to the standards of the social surveys.’ 4But his report is also full of the uncomfortable recognition that any definition of poverty is subjective. The science behind his benefit levels gave them some justification, but it remained an imprecise and subjective science.

Plainly a homeless, shoeless, starving figure in the December snows is poor. Victorian England had plenty of those, and many more people living at standards not much better. Rowntree and Booth in the 1890s did much to categorise and quantify what was only too plainly to be seen. Move much above that level, however, and poverty becomes subjective and relative. Even the precise amount of food needed to avoid poverty is open to argument, and it would be hard to contest that the poorest Edwardian slum dweller was not better off than the starving victims of Somalia’s or Rwanda’s wars in the 1990s. It was the rediscovery of this blindingly simple concept that was to put one of the final nails in the coffin of John Moore’s career as Secretary of State for Social Services forty-seven years after Beveridge wrote his report.

Beveridge was well aware of the problem. ‘Determination of what is required for reasonable human subsistence is to some extent a matter of judgement,’ he conceded early in the report. ‘Estimates on this point change with time, and generally, in a progressive community, change upwards’ 5– the very point with which John Moore was to have such difficulty. Equally, Beveridge conceded that neither could ‘any single estimate, such as is necessary for the determination of a rate of insurance benefit, fit exactly the differing conditions of differing households’. 6For all the evidence he cites for arriving at his cash benefits, there is no real attempt to hide the essential arbitrariness of the exercise. Time and again he uses phrases such as: It is reasonable to put the allowance for clothing as …’ 7or ‘It is suggested that [a particular sum for other items] … should be adequate.’ 8The argument about whether his benefit scales, or those introduced by the Labour Government, actually provided a subsistence income, and whether mere subsistence – freedom from physical want – was in itself a sufficient goal, was to rage on long after his report was published.

There were other difficulties. People on his subsistence income might not necessarily spend their money with ‘complete efficiency’. The basic calculations, he said, assumed that the recipient ‘buys exactly the right food and cooks and uses it without waste. Some margin must be allowed for inefficiency in purchasing, and also for the certainty that people in receipt of the minimum income required for subsistence will in fact spend some of it on things not absolutely necessary.’ He thus threw in a margin of 2s. od. for a couple and 1s. 6d. for a single adult.’ In addition he touched on an issue which would grow in importance as even the full employment enjoyed in the post-war years failed completely to wipe out long-term unemployment.

Strictly the figures for clothing and one or two minor items relate only to short periods of unemployment and disability, during which expenditure on renewals can be postponed; more will be needed in prolonged interruption of earnings. On the other hand, there should be room for re-adjustment in such matters as rent or retrenchment in the margin [the margin referred to above which allowed for inefficient or inessential spending]. On the whole, it seems fair to balance these considerations against one another and make no change in the benefit as between short and long interruption of earnings during working years. 10

Beveridge, to be fair, stated quite openly that he was designing his system to cope with ‘normal cases’, a phrase he repeatedly used. He was bringing Churchill’s ‘magic of averages’ to the average person. Insurance could not in fact cope with everything, and beneath the insurance plan there had still to be a safety net — National Assistance, or what later became income support. That would still be needed ‘to meet abnormal [my italics] subsistence needs’. 11Under Beveridge’s assumption of full employment, long-term joblessness would be abnormal.