What William Beveridge might have really wanted for the modern welfare state

Those of you who were kind enough to read yesterday’s blog entry will know that I was disgusted with Liam Byrne, the shadow Secretary of State for Work and Pensions, after he wrote an article for The Guardian that marked him (in my opinion) as a closet Tory. Or at least a collaborator. If you haven’t read that article, please feel free to go back and explore my arguments.

Having said all that I realise that some of you might feel justified in asking what sort of article I would have written in his place, given the chance. This is your chance to find out because that’s exactly what I’ve done. I’ve kept the same headline and intro paragraph, and some other material including the final paragraph are as Mr Byrne wrote them, but the rest is what I think he should have been saying.

I wonder if you’ll agree with me?

A William Beveridge for this century’s welfare state

Labour won’t win on welfare reform by default. On jobs and benefits we need another tough-minded social revolution.

If William Beveridge could see what has happened to his great plans for the future, he would be spinning in his grave.

I do not suggest this because his once-great political party has entered into an atrocious marriage-of-convenience with their once-bitter rivals, the Conservatives.

No, the reason I believe the great statesman’s body may be, even now, drilling its way to subterranean parts unknown is the terrible fate to which this coalition has Con-Dem’ned his ‘social insurance’ scheme – which you and I now call The Welfare State.

Beveridge argued that this system would provide a minimum standard of living “below which no-one should be allowed to fall”. It recommended that the government should find ways of fighting the five ‘Giant Evils’ of Want, Disease, Ignorance, Squalor and Idleness. He included as one of his fundamental assumptions the fact that there would be a National Health Service of some sort, a policy already being developed by the Ministry of Health.

He saw full employment (defined as unemployment of no more than three per cent) as the pivot of his social welfare programme. Measures for achieving it included Keynesian-style fiscal regulation.

It took a Labour government to make this a reality, after the Cons called for the Beveridge report to be trimmed and delayed, and the Coalition’s plan to privatise the NHS in all but name, and its obstinate determination to avoid the wisdom of Keynes’ fiscal policy might be enough reason to believe that, 70 years after his famous report, his ideas have been ground beneath the heel of contempt.

Worst of all is the way his system is being abused in order to victimise the unemployed, the sick and the disabled. If Mr Beveridge were alive today, I am sure that this fact alone would kill him!

Beveridge’s system was built on the idea of full employment, so he would have been horrified at the long-term unemployment breaking out all over Britain. This is why the country needs Keynesian-style investment in new industry, creating new jobs. This would help eliminate Idleness, one of his five Giant Evils; guarantees that these jobs would pay a decent, living wage (and not just the bare minimum) would eliminate Want as well. Let’s not forget that the Credit Crunch, that led to the current huge national deficit, was caused by people whose wages couldn’t pay their costs, borrowing in order to make ends meet – and then finding they could not pay back their unsecured loans!

Beveridge would have been appalled at the spiralling cost of benefits, knowing as he did that investment in industry would bring those costs down. A larger, well-paid workforce means fewer people on benefits, and more taxes paid to support those who must rely on the State – such as the long-term sick and the disabled.

Contrast this with the current situation. The Coalition’s suicidal fixation with austerity has starved the UK of business investment to the point that more than 20 people are chasing every single available job. As a result, the benefits bill is much higher than the Treasury can comfortably accommodate, and it’s likely to increase!

And what is this government’s solution? It intends to limit housing benefit, so that any individual who cannot afford the rent for their residence will be slung out on their ear. It intends to time-limit unemployment benefits and has already begun offering inappropriate jobs to claimants – the classic is driving jobs for those without licences, in order to clear them off the books for a while. And it has employed Atos, an IT corporation, to carry out assessments of disability claimants using a tick-box questionnaire, instead of employing medical experts. It’s well-known that this company is under orders to get as many claimants as possible off the books and there is a wealth of evidence that shows this has led to a shocking amount of inaccuracy in the way Atos employees have filled out the forms. A survey by the Citizens Advice Bureau in Mid Wales found more than 40 per cent of those they questioned, who undertook the assessment, discovered serious errors – the answers input by the assessors were not the answers they had been given.

Labour is on the side of people who work hard and do the right thing. It is the purpose of government to provide the best conditions for this to happen. The Coalition has failed to do this on an epic scale.

But Labour won’t win on welfare reform by default. Seventy years on from Beveridge, it is time for Labour to take on this Liberal reformer’s ideas again, just as we did in the 1940s.

In rethinking the future, Beveridge’s first principles are the right place to begin.

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6 thoughts on “What William Beveridge might have really wanted for the modern welfare state

  1. Roger T

    Two thought provoking blogs there Mike! You have made so many points that it would take far longer than the half hour I have at lunch to go through them all, but let’s pick out a few. Btw my scribbling is from the point of view of a lifelong non-Tory voter (mostly but not always Labour, and yes I was one of many conned into voting LD by the fawning and obsequious Clegg).

    “…it was a lack of decent pay that caused the Credit Crunch in 2008”
    Actually it was unregulated American banks lending to folk it knew couldn’t afford their loan repayments that did it, decent pay or not. If they had had “decent” pay, the banks would simply have lent them even more, ending in the same sorry mess!

    “So people on benefits are on ‘unearned support’, are they?”
    I would suggest that Byrne is pointing the finger at those who for successive generations have seen living on benefits as a viable life choice rather than those who have worked and been laid off as you suggested. The latter deserve the benefits because they have paid for them over the course of years through their taxes. The former have comedy programs made about them – Shameless anyone? And yes, there are thousands of Gallagher families up and down the land, you can’t deny it!

    “ ‘Social Security has to change’… In these five words alone, Mr Byrne can be read as supporting their agenda”
    Well, it does, doesn’t it? We cannot afford it end of, you don’t have to be a Tory to see that. Yes, we should make the fat cat corporations and their owners pay the taxes they owe and that would go more than some way to making the Welfare State affordable, but therein lays the danger of capitalism. If we scare these companies off to India or wherever, all their jobs will go with them and we’d end up in an even worse scenario.

    I don’t want to appear over-critical as you make some very good points, especially the discrimination against the truly disabled and that godawful ATOS company for example, but “Ed Miliband’s squeezed middle” is much bigger than a “small” part of society, and probably includes the likes of you and me, like it or not. It is this section of society that largely determines the colour of an elected Government because they can actually be bothered to vote which is why poiticos of all shades keep referring to them.

    Blimey, I’ve only got through part of yesterday’s blog, I better stop now. Maybe I’ll come back for more later!

    I’m afraid with the “Scared Panda” in charge Labour are headed for years in the wilderness. Here’s a radical idea – Peter Mandelson for leader, he’d put the wind up the Tories no question. I’ll leave that one with you!

    1. Mike Sivier

      I think we’re both on the same page as far as the cause of the Credit Crunch is concerned. The banks were lending to people who couldn’t afford their loan repayments. Why not? They weren’t getting paid enough. Okay… I expect a percentage were living beyond their means as well. When I wrote that part of the piece, I was thinking to a comment made by Billy Bragg on Question Time a few months ago. The point he was trying to make was that wages have been dropping, in proportionate terms, for many years. If workers had been getting proper living wages, then they might not have gone looking for loans they couldn’t pay in the first place.

      Unearned support – I think you’re on the button about where Byrne was pointing the finger. The problem is that he is in danger of doing what the Coalition has chosen to do: make it seem as though the scroungers are the majority. They’re not. Only one per cent of those on benefits is undeserving. The problem with them is that they are very clever, and find ingenious ways not to get caught. Instead, it’s the innocent parties who take the brunt.

      The large companies are a much smaller part of the economy than small and medium sized businesses. While I agree that we don’t want to scare them all away, we shouldn’t overstress their importance either. What we need, I think, is a little investment in new industry, to get people into paying jobs. Then there will be fewer people on benefits and the system will be more able to take the strain. The trouble with the Coalition – and especially the Tories – is that they are interested in making scapegoats out of certain sections of society (‘scapegoats’ is actually a misnomer; they were the ones that got away, originally – but I’m digressing). Divide and rule, as I think we all know by now.

      MANDELSON for leader? Really? Isn’t he a lord now, and therefore out of the running?

      I thought the problem lies with the people who write the speeches and press releases. Not sharp enough. But that can change.

      1. Roger T

        I was joking when I suggested Mandy, but he’s got more gravitas in his pinky than both Milibands and Mrs & Mrs Balls put together. Until Labour come up with someone who acts like he/she could actually lead (the country not the party) then I’m afraid those strange creatures the “undecided voters” will not put Labour back in power for a few elections yet.
        This lack of gravitas is reflected in Cameroon’s popularity rating which even under the current heavy manners is waaay ahead of Ed Of The Dead.

      2. Mike Sivier

        For the sake of trying to start a discussion, I think I’ll keep my own opinions about who should be leader to myself and ask if any other readers would like to say what they think. Anyone?

  2. Sam

    I agree with you on the whole, however it is worth remembering that its not just the big businesses we are afraid of losing, its the whole banking sector which has become the cornerstone of our economy since it became service based in the Thatcher era. If we start raising taxes and restricting the bonuses that bankers receive then we will be in danger of losing the strongest part of our economy. Since 1979, the wealth of the rich has grown 287x but the average man’s wealth has only grown by 18%. Evidently something is wrong.

    Another area of concern is that if the welfare state is restructured around Beveridge’s principles we must not forget that we are in an era far different to that of the 1940s. Technologies have advanced, societies are far more liberal in their thought, women’s rights have advanced (although they are still not treated as entirely equal in terms of wages in employment). The reforming of the welfare state is necessary but it seems that enormous change in its whole structure is necessary if we are ever going to create a successful and efficient welfare system.

    1. Mike Sivier

      What about this idea that we should only pay bonuses if people deserve them? The whole idea of not rewarding failure? If there’s one sector of industry that’s failed us all in the last few years, it’s finance, and the banks have made huge losses – they would have all gone to the wall if the government hadn’t bailed them out. So shouldn’t bank employees be expecting to see reduced bonuses – if they get them at all?
      I’m not sure I’d agree that banking is the strongest part of our economy. It might be the largest, but the two things aren’t the same.
      Another part of the solution has to be building up other sectors of the economy. I’d be looking for emerging industries and trying to get investment for them. The fact that banks aren’t lending money at the moment tends to support my belief that banking is weak at the moment but the only way to pick up is to invest in something that actually makes a profit so they might as well get on with it.
      I don’t agree that enormous change in the structure of the welfare system is required – or at least not without seeing lots of very solid evidence. But it’s certainly true that it needs to be adapted to the times in which we now live.

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