1 December marks the 70th anniversary of the Beveridge report. The aim of the report was to change welfare as voters had known it. Seven decades on it hasn’t quite turned out like that.
Both William Beveridge, and, more importantly, Clement Attlee, were clear that welfare should be both based on and be driven by values. There were two aspects of welfare reform that particularly concerned Attlee. The first was that welfare’s values should reflect the wider working-class moral economy. Here there was a widespread belief that work should pay, that savings should not be penalised and that there should be no penalty put on honesty.
Attlee believed these values would be promoted by the insurance-based welfare that Beveridge proposed. Benefits would be earned by contributions, either through work or the wider caring functions that members of the family might undertake.
Attlee saw a contributory-based welfare as one that clearly gave entitlement on the basis of the functions individuals carried out and that those individual functions were linked to Attlee’s ideas about good citizenship.
Why didn’t the New Jerusalem planned by Attlee come about? There are two reasons normally put forward. The first is that insurance benefits were not paid at a high enough level to lift claimants free of means-testing. Likewise, Beveridge did not foresee the changing position of women.
Both of these reasons have some validity but they in no way explain why we have ended up today with a welfare state that is primarily means-tested ie benefits are awarded on the proof of need and not on the basis of being earned by contribution or one’s function as a citizen, for example, being a carer.
It is true that Beveridge did not foresee the changing position of women. But these changes could have easily been accommodated had the political imagination and political will been forthcoming.
Much more serious was the failure of governments that succeeded Attlee to abide by the three fundamental assumptions on which Beveridge built his contributory-based welfare. The first was the need for full employment. The welfare budget would not have been enough unless there was full employment. Similarly, the NHS was tasked with actively preventing ill health, and thereby dependence on benefit. Likewise the payment to families for children had to be generous enough so that the income one gained in work, where one kept the child payments in full, ensured that there were very clear work incentives.
The 70th anniversary presents Labour with the opportunity to begin building up a welfare reform programme so that, again, welfare as voters have known it is abolished and replaced over time by a contributory-based system. Welfare is the biggest of all the government budgets and therefore needs to be reordered. Similarly, the universal credit is on target to implode once it begins to deliver the single benefit to large numbers of claimants.
Setting out an alternative is therefore urgent on both counts. We need a clear policy for going into the election. We similarly need an alternative to the morally destructive universal credit.