2 William Beveridge
2.1 The Beveridge report
The architect of much of this reform in the field of social welfare was William Beveridge. His report entitled ‘Social Insurance and Allied Services’ was compiled as the war was at its height (Beveridge, 1942). In it Beveridge set out a plan to put an end to what he called the ‘five giants’ – Want (today we would call it poverty), Disease, Ignorance, Squalor and Idleness (unemployment). The centrepiece was a state-run system of compulsory insurance. Every worker, by contributing to a scheme of national insurance deducted through the weekly or monthly paypacket, would be helping to build up a fund that would pay out weekly benefits to those who were sick or unemployed or who suffered industrial injury. The scheme would pay pensions at the end of a working life to employees and the self-employed. The idea was to support the worker and his family. Benefits were to be set at a level that enabled a man, his wife and child to survive. There would be benefits for widows and an allowance for guardians of children without parents to care for them. A system of family allowances for the second child and subsequent children was intended to ensure that those with large families were not penalised. There was also to be a marriage grant, maternity grant and benefit, some specific training grants and a death grant. The key feature was that people were eligible to receive these benefits and grants because they had contributed. Rich and poor ‘paid the stamp’ and could claim as of right because of this.
For those who had not paid enough contributions or were not contributing to the national insurance scheme, there was a second tier of welfare provision, national assistance. The financial side of this (later to be renamed supplementary benefit and, later still, income support) was meant to be a supplement to the main scheme rather than to be central. The main scheme was universal – everyone had a right to it based on contributions. Only if supplementary help was needed did the ‘means test’ come into play, enquiring into your savings and your circumstances – who lived with whom, who was dependent on whom, and so on.
Alongside these financial security provisions for all, there would be universal access to education and to health services. These would be funded from taxation and would be free at the point of use. Again everyone in work would pay, but in this case, since taxation increased with increasing income, the rich would pay more. The package overall gave meaning to the proud boast that the welfare state provided care for everyone – protection ‘from cradle to grave’. For it all to happen, however, there had to be full employment. The government would give top priority to the rebuilding of a strong, peacetime economy and the redeployment of troops into civilian work. Only if the workers were in work would they be contributing to the scheme.
In the box below are some of the comments made at the time by ordinary people who were questioned by teams of social researchers gauging reactions to the report and to the publicity that surrounded it. They will give you a first hint of the reception that Beveridge received.
What did people think of the Beveridge report?
Positive comments were in a clear majority:
‘It's the goods! All the yearnings, hopes, dreams and theories of socialists for the past half-century have been crystallised into a practical economic formula. Equity for the "lowest common denominator”. I was staggered by its comprehension.’
(Insurance clerk, male, 39, Newport)
‘It gave me a feeling there was something to work for and fight for after all and that our efforts might be rewarded by some real social improvement, giving meaning to the phrase “winning the peace”.’
(Royal Artillery, male, 29)
‘I am aware of a new feeling of confidence in myself as a member of a democratic society when I see those social reforms which I have considered necessary for such a long time actually taking shape.’
(Accountant, male, 40, Prestwick)
But there were negative comments too:
‘My friends seem to think it's a clever piece of eyewash to retain the capitalist system by getting the people on its side.’
(Student, male, 22, Enfield)
‘ “A lot of blah” is the most frequent remark from the women in the factory. “ Don't believe a word of it; we've ‘eard these promises before”.’
(Stores Keeper, female, 57, Winchcombe)
‘I think it is direct encouragement to the lower type of humanity to breed like rabbits.’
(Temporary civil servant, female, 38)
Activity 1: Beveridge in his time
By clicking on the link above, you will find an extract from An Introduction to the Beveridge Report by John Jacobs, which gives you some background on Sir William (later Lord) Beveridge and includes a vivid account of the impact of his report. Read the article now and then jot down answers to the following questions.
Why was this report so popular?
Why was insurance so much more important than assistance?
What else was in what Jacobs called the ‘grand scheme of reconstruction'?
The popularity of the report stemmed from the hope it held out for a new future in which poverty would be abolished and no one would remain in need. It seemed to include virtually all sectors of the population and to be simpler and more far-reaching and effective than what had gone before.
The insurance principle was designed to give workers a sense of dignity and self-respect; there need be no shame about claiming something for which they were eligible through contribution. Assistance was designed for those who fell through the net and were unable for one reason or another to accrue contributions. Assistance benefits were means-tested and bore the taint of charity. Assistance, in Beveridge's view, needed to be at a lower level than insurance, otherwise people who had paid contributions would feel resentful.
Insurance was only part of a larger scheme to promote social progress. In order to make a full contribution to society, it was felt that individuals needed also to be protected from disease, and given access to education and housing. Full employment was crucial to the success of the scheme, and family allowances were necessary to ensure that those with children did not fall into poverty.