75 years since Beveridge

This month marks 75 years since the publication of the Beveridge Report, the blueprint upon which the post-war Labour Government built the modern welfare state. The report famously set out proposals to tackle the five social ills of squalor, ignorance, want, idleness, and disease, and its suggestions paved the way for the formation of the National Health Service and a significant expansion in social security.

Given that the achievements of the 1945 Labour Government are widely viewed–both inside and outside of the party–as the definitive achievements of the movement, the fact that William Beveridge himself was never a member of the party and actually went on to become a Liberal Peer has been an occasional source of embarrassment. I’ve even heard some attempt to do down the ’45 Government as insufficiently radical since even ‘a Liberal’ thought these were reasonable policy changes. Such a view is a mistake.

For one thing, in terms of socialist political economy, the real radicalism of the 1945 Government was in its nationalisation of a range of major industries. Although here too, from a more dogmatic position you might claim that the policy was a disappointment, as instead of handing control of the means of production directly over to the workers it was retained by central government via their mandarins.

In terms of the Beveridge Report itself, such criticisms misunderstand both the role Labour influences played in the drafting of the report and the ways in which the policies of the post-war government differed from the proposals.

Yes, Beveridge went on to become a Liberal Peer, but at the time he was drafting the report he had already spent the best part of four decades working alongside Beatrice and Sidney Webb, two of the most important early Fabians and possibly the dominant source of Labour thinking on economic and social issues until Anthony Crosland’s ‘The Future of Socialism’ in 1956. The Webb’s and the Fabian Society were a major influence on Beveridge, particularly in terms of their thinking on practical social interventions for alleviating poverty. His proposals, notably around the idea of a national health service, bear all the hallmarks of the Fabians’ statist approach and the report itself was commissioned by a Labour member of Britain’s wartime Cabinet. It is hardly surprising that Labour were so taken with the report, given that it was commissioned at the party’s request from a long-time research partner of many of the movement’s greatest thinkers.

Yet, it is in the differences between the report and the actions of Attlee’s Government that contrasting Liberal and Socialist thinking really starts to make itself apparent. Whilst Labour did implement much of the report, in doing so it often didn’t implement them in quite the way Beveridge had intended. While we do have a tax we call ‘National Insurance’, in practice this is just another form of taxation and it is from the totality of the government’s income that social security and national health provision is financed. When Beveridge spoke of insurance it was in a much more literal sense, a scheme which people paid into regardless of their income and where the pot which accrued would pay out insurance claims for those who qualified. In our system this contributory principle exists only in the need to contribute a certain number of years’ employment in order to qualify for a state pension, and even there the immediacy with which retirement pensions were introduced has meant that state pensions have always had to be paid out of the receipts of new members rather than from a real pension fund, unfortunately a bit like a Ponzi scheme. Therein in a nutshell is the gap between Beveridge and Labour, the idea of universal provision vs. provision based on some measure of contribution, and a disagreement between democratic socialist and social liberal thinking which continues to this day.

75 years ago, Beveridge certainly started something and he deserves recognition as one of the fathers of the modern welfare state, but let us be clear that it wasn’t the child he wanted. His report was important because it enabled Labour following its surprise victory in 1945 to have a clear first draft of a plan for a new welfare state to hand, a plan based upon the Fabian thinking which had lain at the heart of the party since its very formation and which they could adapt to meet the more exacting standards of the party’s philosophical beliefs.

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