The Beveridge Report, 1942: Causes and Effects

The Beveridge Report, 1942: Causes and Effects CHAPTER 2: The publication of the Beveridge report in December 1942 is one of those moments in history which offer a unique challenge to historians. It is an event about which everybody at the time had a viewpoint. I recall my Grandfather telling me that William Bevridge was the architect of the welfare state, and the publication of his report marked a turning point in the lives of working class people across Britain. It is therefore a challenge for the historian to ignore their pre-conceived notions, and write an account of the Beveridge report based upon the information as it stands, rather than based upon perceptions. To write about what truly motivated Beveridge, what his true principles were, and what the real aims of the report were, rather than making assumptions based upon what is seen at face value. That is what I aim to do here. To understand the work, one has to understand the man, and that will be my starting point for this chapter. William Beveridge was a Liberal, indeed he became a liberal MP in 1944, but he was not a liberal in the classic tradition. Indeed, Beveridge would probably have more in common with the Liberal Democrat tradition of today than he would with the tradition of Lloyd George, and it should be remembered that he flirted with the idea of joining the Labour party at around the time he wrote his report. Various writers have wrestled with the idea of placing Beveridge somewhere on the left to right political spectrum, but in truth, any attempt to try and place him in this way would do the man and his work a disservice. Probably the best analysis is that of the Williams’ in ‘A Beveridge Reader’ and reiterated by Robert Leaper: â€Å"Beveridge was never a grand social theorist; he always favoured a practical, problem centred approach.†(1) From the evidence I have seen, it would be best to describe Beveridge as a pragmatist. He saw a problem, and looked for the best solution to solve the problem as he saw it. He showed no apparent concern for where the solution may have had its origins, only that the solution solved the problem. This is not to say that Beveridge did not have underlying principles. It has been argued by Albert Weale that two persistent themes run through his work: â€Å"The first is the belief that virtually the prime goal of public policy should be the development of an efficient economy capable of high levels of productivity. Underlying Beveridge’s conviction on this point, there appears to have been a tacitly assumed belief in the paradox of capitalist production: capitalism resulted in a highly unequal distribution of wealth, and yet it was the only system capable of producing sufficient wealth to eradicate poverty. The second persistent element in his social theory was Beveridge’s view that a highly centralized bureaucracy, staffed with public-spirited officials, would be the leading instrument of social reform.†(2) Having looked at what Beveridge was, it is also vitally important to understand what both he and his report were not. Beveridge was not a socialist and he was not a revolutionary, and neither was his report. As Eveline Burns points out: â€Å"In this context it can be seen that the Beveridge report is evolutionary, rather than revolutionary. The great contribution of the author consists in his recognition of the fact that the end of one stage of development had in fact been reached and that the time was ripe for the reorganization and new unification of the various programs in conformity with the changed social attitudes.†(3) Whilst I have broken with any idea of this being a report of revolutionary proportions, I must also break with the argument of Bartholemew, which I believe was somewhat dismissive of the report. He states: â€Å"So what did Beveridge propose? It was very simple. Everyone would make flat-rate contributions to a national insurance scheme. Those who fell ill, became unemployed or reached retirement age would, in return, receive flat-rate payments. That is it. The rest was detail.†(4) Bartholemew may technically be correct. The report did contain a lot of detail centred on this core principle. But the report also contained a vision or blueprint for the future, and in many respects, it was this part of the report which was of particular interest, as Beveridge went far beyond his initial remit. It is some of these ideas which I would like to look at now. As Burns points out: â€Å"It should be noted first of all that the report is essentially concerned with assuring freedom from want, in so far as want is due to interruptions of income or to the occurrence of costs unrelated to income to which all or the vast majority of the population are at some time or other liable.†(5) But this attack on want only formulated one part of the overall objectives, which was to attack what Beveridge described as the five giants. Beveridge stated in his second of three guiding principles: â€Å"The second principle is that organisation of social insurance should be treated as on part of a comprehensive policy of social progress. Social insurance fully developed income security; it is an attack upon want. But want is one only of the five giants on the road to reconstruction and in some ways the easiest to attack. The others are disease, ignorance squalor and idleness.†(6) Within the report, it was only the giants of want and by implication, idleness which were tackled head on. But with some imagination, it is not difficult to foresee the origins of the NHS, the development of a comprehensive education system and a local authority house building programme within its pages. Beveridge embodied within his plan, a vision for the future, which could be tackled piece by piece, beginning with want. The picture painted by Beveridge was an overall scheme which he described as follows: â€Å"The scheme embodies six fundamental principles; flat rate of contribution; unification of administrative responsibility; adequacy of benefit; comprehensiveness; and classification. Based on them and in combination with national assistance and voluntary insurance as subsidiary methods, the aim of the plan for social security is to make want under any circumstances unnecessary.†(7) Up to this point, I have tended to focus upon the social dimension of the Beveridge report, but as I have said before, we should not loose sight of the pragmatic dimension of the man. In signing of the report in 1942, Beveridge claimed it was marked by â€Å"economy in administration, adequacy in benefits and universality in scope.†(8) It is the aspect of economy in administration which is most commonly neglected when looking at the Beveridge report, and in assessing the man behind it. One of the most important motivations behind the report was the desire to rationalise the existing system which consisted of a set of unconnected bodies working under rules laid down by up to six different agencies. This system was seen by Beveridge among others as not only inefficient but also expensive in administration costs. Beveridge claimed in the report that: â€Å"Social insurance and allied services, as they exist today, are connected by a complex of disconnected administrative organs, proceeding on different principles, doing invaluable service but at no cost in money and trouble and anomalous treatment of identical problems for which there is no justification. In a system of social security, better on the whole than can be found in almost any other country, there are serious deficiencies which call for remedy. It is not open to question that , by closer co-ordination, the existing social services could be made at once more beneficial and more intelligible to those whom they serve and more economical in their administration.†(9) The same point is made in a rather more cynical manner by Bartholemew: â€Å"People who looked at the detail and actually read his words understood that the old Victorian was not proposing the bonanza which many assumed then and continue to believe. Keynes advised Beveridge on his costings and said, ‘the Chancellor of the Exchequer should thank his stars that he has got of so cheap.’ Members of the economic section of the Treasury believed that the Beveridge plan was actually cheaper than the provision which existed previously.†(10) The desire of Beveridge to create a more rational economic system as well as being a primary motive more his war on want, was also an important contributing factor in his desire to see a nationwide health system. Writing just after the publication of the report, Leo Wolman wrote: â€Å"These amount to saying that the scheme, in order to work and to avoid building up excessive expenditures and costs, must provide that the insured be kept healthy and fit for work and remain in employment lest they settle down too often and too long to living on the insurance benefits. The report attempts to translate these assumptions into practical proposals by calling upon the government to face the problems of the post-war unemployment and by laying the foundations for an unprecedented system of health and rehabilitation benefits and services.†(11) What Wolman observed in Beveridge was a belief that by introducing a health care system alongside the social care system, the health of people would be improved, leading to less stress being put on the social security fund through sickness. This desire to maintain the health of the workforce is also linked to Beveridge’s desire for greater efficiency. As Beveridge points out in his report: â€Å"It is in the interest of employers as such that the employees should have security, should be properly maintained during the inevitable intervals of unemployment or of sickness, should have the content which helps to make them efficient producers.†(12) It is worth noting that Beveridge received widespread support among the business community based upon his arguments of it leading to greater efficiency of the workforce. Samual Courtauld, chairman of the fabric firm, speaking to the Manchester Rotary Club in February 1943, declared himself: â€Å"Strongly in favour of the principles and almost all the proposals of the Beveridge report. I have not the faintest doubt that if we can survive the first severe business contraction which arises after the war, social security of this nature will be about the most profitable long-term investment the country could make. It will not undermine the moral of the nation’s workers: it will ultimately lead to a higher efficiency among them and a lowering of production costs.†(13) We have up to now focussed upon two dimensions of the aims and principles of the Beveridge report: the social and the economic. What we must now do is look at the political principles and aims of the report. I do not refer to party political aims but the underlying political aims. The aims of doing what is best for the nation as Beveridge saw it. There is good evidence that Beveridge saw a danger in men returning from war, seeking a better world and seeing nothing better than before. There is also evidence that there was a fear of possible consequences within the House of Commons. Beveridge wrote in his report: â€Å"There are yet others who will say that, however desirable it may appear to reconstruct social insurance or to make other plans for a better world of peace, all such concerns must now be put on one side, so that Britain may concentrate upon the urgent task of war. There is no need to spend the words today in emphasising the urgency or the difficulty of the task that faces the British people and their Allies. Only by surviving victoriously in the present struggle can they enable the freedom and happiness and kindliness to survive in the world. Only by obtaining from every individual citizen his maximum effort, concentrated upon the purposes of war, can they hope for early victory. This does not alter three facts: that the purpose of victory is to live into a better world than the old world; that each individual citizen is more likely to concentrate upon his war effort if he feels that his government will be ready in time with plans for that better world; that if these plans are to be ready in time, they must be made now.†(14) If the warnings of Beveridge were relatively subtle, then those expressed by Conservative MP, Quinton Hogg, in the parliamentary debate on 17th February, 1943, were very much to the point: â€Å"Some of my honourable friends seem to overlook one or two ultimate facts about social reform. The first is that if you do not give people social reform, they are going to give you social revolution. Let anyone consider the possibility of a series of dangerous industrial strikes following the present hostilities, and the effect that it would have on our industrial recovery.†(15) Whilst I am not totally convinced that this was a major factor in the reasoning of Beveridge, the lessons of what happened post 1918 would not have been lost on him. I do also believe that it strongly influenced Beveridge’s ability to sell the proposals to the Conservative part effectively. The true extent of this will be looked at in the next chapter. It has been argued by John Jacobs that â€Å"the impetus for what was to become the Beveridge report came from the TUC, who had for some time been pressing the Government for a comprehensive review of social insurance.†(16) Whilst there is no doubt that the TUC had a degree of influence, this is a far too simplistic model. It is my view that the origins of the report, and the principles within the report lie in the growing realisation that the world was changing, that there was a need both socially and economically for systems in place to be made more efficient. William Beveridge had a long history within this area of study and fully understood the deficiencies of the system. As has previously been emphasised, the report was not revolutionary in its ideas. But it was a document which exerted an immense influence upon the future of social policy in Britain. In essence, I would describe the report as the attempts by a pragmatist to rationalise an irrational system. FOOTNOTES: Social Policy and Administration Vol 25, No 1, March 1991 : Article By Leaper, R page 4 Political Studies Vol 27, Issue 2, June 1979 : Article By Weale, A page 288 American Economic Review Vol 33, No 3, September 1943 : Article By Burns, E page 519 Bartholemew, J : The Welfare State Were In (Politico, London, 2004) page 57 Prev Cite, Burns page 513 Beveridge, W: The Beveridge Report on Social and Allied Services 1942 (HMSO, London, 1942) page 1 Ibid Page 2 Thane, P : The Foundations of the Welfare State (Longman, Harlow, 1998) page 235 Prev Cite, Beveridge page 6 Prev Cite, Bartholemew page 58 Political Science Quarterly Vol 58, No 1, March 1943: Article By Wolman, L page 6-7 Prev Cite, Beveridge page 109 Manchester Guardian, February 19th, 1943 Prev Cite, Beveridge page 171 Hansard Parliamentary Debates: 17th February, 1943, Col 1818 Jacobs, J : Beveridge 1942-1992 (Whiting and Birch, London, 1992) page 140 CHAPTER 3: Time magazine printed on December 14th, 1942: â€Å"Not since the day of Munich had the British press given such play to any single story. War news was all but pushed from the pages of London’s war-curtailed dailies. Many of them devoted half their space to news of the document which, in the midst of war, looked forward to a better post-war world. The Beveridge Report, published last week was the biggest event for Britons in many years.†(1) In our present day age of cynicism towards anything political, it is difficult to imagine the idea of a government commissioned report selling 90,000 copies in its’ first week, and eventually seeing sales of 600,000. Even less, the idea of people cueing outside HMSO in London to buy a copy. Such euphoria today is usually reserved for the latest Harry Potter adventures. But in December 1942, this is exactly what happened. People wanted to but and read this document. It was headlined by ‘Time’ as ‘Rare and Refreshing Beveridge.’ This is probably an accurate representation of how people in Britain saw this report. A rare opportunity to read something new and refreshing. The Beveridge report appeared to capture a mood in a way which was not seen before, and is extremely unlikely to be seen again. What is also unlikely to be seen again is a document with such overwhelming approval. Bartholemew notes that: â€Å"In a survey at the time, nineteen out of twenty people had heard of the report and almost all were in favour of it.†(2) The Mass Observation Archives provide us with a valuable insight as to the public perception of the report at the time. Typical of the responses was that of a male skilled worker of 50, from Streatham: â€Å"I have read it and think it champion and will take a load off the minds of people. The most important proposals, well they are all very important but suppose the Retirement Pension and Unemployment increase are perhaps the greatest benefit. It should be passed as quickly as possible. I do not see how anybody can oppose it except perhaps the Insurance Companies but they don’t matter, they have feathered their nests long enough.†(3) Two things are interesting to note from this. Firstly, how enthusiasm can lead people to see things which are not there; in this case the promise of higher pensions and unemployment benefits. Secondly, the cynicism towards the insurance companies which would today, probably be directed towards the politicians. Amid the euphoria, there were comments which, although not really dissent, questioned some of the assumptions. The following is an opinion of a woman regarding family planning: â€Å"Well I’m one of the bad selfish women; I had only one child because I didn’t want any more. And now that my husband and I have parted I’m not particularly sorry. I think my young daughter looks forward to having a family of three or four. But of course she may change her mind when she marries or after she’s had one. After all, it’s such a terribly personal problem. I think that family allowances and better housing and more hope of social security would make a difference to the number of children in better off working class and lower middle class homes. But I don’t think anything on earth would make the educated classes start having large families, because they simply don’t want them.†(4) This is a rejection of the idea that family allowance payments would lead to larger families, This is an interesting observation in light of concerns at the time concerning the declining population. What should be clear from these observations of public opinion is a confirmation of what Bartholemew said. There was widespread public support for the Beveridge plan, to such an extent, the government acted sooner on the proposals than they had initially wanted. There is a general belief that the public support put pressure on the government to accept the conclusions of the report whilst the war was in progress. In light of this overwhelming public support, it is interesting to look at where opposition and criticism to the report came from. From what I have seen, I would place the opposition and criticism to the report into four different groups; government opposition (particularly the treasury), the Marxist left, the Right Wing of the Conservative Part, and Feminist opposition. I have not analysed opposition from insurance companies separately as their arguments correspond with those of the Tory right, and are fairly self explanatory. What is necessary is to look at the nature of the opposition from these four groups; what motivated their opposition, and to look at what extent these oppositions were ideological or practical. This will provide a better picture of where the country stood at this time. As I have mentioned earlier, public opinion compelled the government to act in a way which it did not really want to. There were concerns within the government regarding Beveridges’s plan, particularly from the Treasury. This position has been well explained by Pat Thane: â€Å"The treasury expressed serious doubts about the possible effects of Beveridge’s plans on the post-war fiscal situation. They feared that it would require a high level of taxation which would discourage saving and hinder post-war expansion. A fierce debate was conducted among government economic advisors between those who argued that need could be met more effectively and cheaply by benefits means-tested on the same basis as the newly introduced annual tax returns and adjusted to local cost-of-living variations, and Keynes, who admitted the logic of this view but argued that this was impossible without a reform of the system of direct taxation, which was not immediately practicable, and that contributory insurance was a useful means of making employers share the costs of welfare. Keynes was convinced that the Beveridge plan was the cheapest alternative open to us and that the feared financial difficulties could be avoided by careful Treasury management.†(5) To the historian, this Treasury opposition was by far the most important. In analysing the political climate of the day, it shows differences of thinking at the highest levels of government at a time of war, and when a coalition government was considered to be united. But even more importantly, this Treasury opposition was to continue into the period of implementation, and as we shall see later on, these arguments had profound consequences upon how the Beveridge plan was implemented. It should also be noted at this stage that opposition within Government was not restricted to the Treasury. Ironically, Bevin was initially strongly opposed to the conclusions of Beveridge, believing that it was contrary to the interests of the trade unions, which were best met by higher wages, although the TUC were strongly behind the plan. Whilst the majority of the Socialist movement including the Labour Party, the TUC and interestingly the Communist Party, were firmly behind the plan, the Marxist left were strongly against the plan on ideological terms. Their position is well summarised by a Socialist Party of Great Britain pamphlet written in 1943: â€Å"We propose to show that this apparently philanthropic gesture on the part of the Government will not be an entirely unmixed blessing for the working population, and the approval with which it has been received by different sections of political opinion arises in some cases from the complete lack of knowledge that whatever benefits, if any, may accrue to a certain number of workers, the employers will most certainly gain on balance in the long run.†(6) The essence of the Marxist left position was that capitalism was the cause of poverty and could not be reformed. It would therefore be wrong for socialists to support attempts to reform the system to make it more palatable. Groups such as the socialist party of Great Britain also viewed the report as an attempt to placate the working class, and prevent any possible social revolution at the end of the war. The position of these groups was in the overall scheme of things, of little relevance. This may not have been the case if the Communist Party, by far the largest Marxist organisation, had adopted a Marxist position rather than the reformist position of the TUC. If the opposition of the Treasury was practical, and the opposition of the left was ideological, then the opposition of the Tory right was a combination of the two. There existed then as now, a strong desire to minimise the role of government in affairs as much as possible, and so there was a natural ideological objection to the government run social insurance scheme. Conservative MP, David Willetts has reflected upon the Tory opposition, and has drawn the following conclusions: â€Å"Conservatives were wary of Beveridge for two main reasons. The Conservative Party conference of 1943 passed a motion ‘That this conference is of the opinion that the existing friendly societies should remain part of our social security system’ in response to the fear that Beveridge’s ambitious new social insurance scheme would undermine friendly society provision, a fear which proved well founded. There was also a worry that these benefits would not be as well-targeted as Beveridge hoped.†(7) As I referred to at the start, there was a certain coronation between the position of the Tory right and that of the Insurance companies, whose primary concern was that they would loose a lot of business by Beveridge’s proposals. Their position was on the whole supported by the Tory right. The position of the Tory right was certainly more influential than that of the left, by virtue of the fact that they had a voice in parliament, but we should not overestimate the strength of their opposition in overall terms. Indeed, their position had little impact upon the outcome of the report. There was probably greater support for their position within government than was apparent, but political expediency led others to take a more liberal position. The most interesting ideological position was that of the feminist movement. Their position has been effectively laid out by Sheila Blackburn: â€Å"Socialist feminists maintain that, despite women’s sterling war effort, Beveridge deliberately reduced married women, with regard to social security, to second class citizens. This, they insist, Beveridge achieved via three means. First, Beveridge specified that married working women should pay reduced national insurance contributions and, as a result, they received lower benefits. Second, socialist feminists discuss how Beveridge made arrangements for married working women. Third and most importantly, feminists criticise Beveridge for assuming that the majority of married/co-habiting women would abandon paid work to be financially supported by a male bread winner.†(8) We must be careful at this stage to avoid moving away from the question we are looking at; that is opposition at the time to Beveridge. The feminist debate upon Beveridge continues to this day, and we must avoid using current arguments and imposing them upon feminists in 1942. But there is a strong body of evidence to suggest that these arguments formed part of the feminist opposition at the time. This has been reflected by Leaper in looking at the demands of the Woman’s Freedom League. They demanded: â€Å"that men and women should in marriage not be treated as a team but as individuals each paying equal contributions and receive equal benefits; and that in every case men and women should pay the same and receive the same benefits.†(9) He has also quoted the following extract from Abbott and Bompass who published a fierce feminist critique of the report in 1943: â€Å"It is where the plan falls short of being really mutual in character, where it shuts out or exempts from all direct participation over nine million adult women, where it imposes financial burdens on men alone, instead of spreading them equitably over all, that it fails and is open to criticism.†(10) The importance of the feminist lobby should not be overstated. Whilst there was extensive feminist opposition to Beveridge, he also gained much support, as Blackburn has pointed out: â€Å"Beveridge’s views were largely in accord with those of the majority of the organised women’s movement in Britain in the 1930’s and 1940’s; and it seems futile and somewhat patronising to berate both him and them for failing to think what they ought to have thought from the vantage point of the 1990’s.†(11) I would summarise that the feminist position was important in 1942, but had little impact upon the implementation of the Beveridge proposals. The importance of the feminist position has been in the ways in which the welfare state has been altered, taking on board many of the feminist arguments. I would be my argument therefore, that the feminist argument has gained in strength and credibility over time, and is now highly influential in the shape of the welfare state. The Beveridge report was without doubt a monumental document, which gained public acclaim to an extent which we are unlikely to ever see again. One should not underestimate the role of Beveridge himself in gaining this support. In many respects, Beveridge was a very modern politician. He manipulated the media very effectively, building up substantial support for his report before it was published. As a result, the opposition was limited. As I have mentioned, the most important opposition came from the Treasury, and this opposition did impact upon the way Beveridge was implemented. But on the whole, the support was far too extensive for it to be ignored, and the spirit, if not all the detail became the foundation of the welfare state. FOOTNOTES: Time: Monday, December 14th, 1942 Bartholemew, J : The Welfare State Were In (Politico, London, 2004) page 56 Mass Observation Archive: Topic Collections on Social Welfare and the Beveridge Report, 1939-1949 Ibid Thane, P : The Foundation of the Welfare State (Logman, Harlow, 1998) page 236 Website: www.worldsocilaism.org Website: www.davidwilletts.org.uk Woman’s History Review Vol 4, No 3, 1995: Article By Sheila Blackburn page 371 Social Policy and Administration Vol 25, No 1, March 1991: Article By Leaper, R page 18 Ibid page 18 Prev Cite Blackburn page 376 BIBLIOGRAPHY: Titmuss, R : Essays on the Welfare State (Unwin University Books, London, 1963) Political Quarterly Vol 14, No 2 : Before and After Beveridge Journal of Social Policy Vol 27, No 1 : Article By Jim Tomlinson The Economic Journal Vol 53, April 1943 : Article By Owen, ADK Historical Journal Vol 35, No 3, 1992 : Article By Fielding, S Review of Economic Studies, Vol 11, No 1, 1943 : Article By Hicks, JR