The Five Giants [New Edition]: A Biography of the Welfare State
Nicholas Timmins
A LONGMAN/HISTORY TODAY BOOK OF THE YEARThe award-winning history of the British Welfare State –now fully revised and updated for the 21st Century.‘A masterpiece’ Sunday TimesGiant Want. Giant Disease. Giant Ignorance. Giant Squalor. Giant Idleness.These were the Five Giants that loomed over the post-war reconstruction of Britain. The battle against them was fought by five gargantuan programmes that made up the core of the Welfare State: social security, health, education, housing and a policy of full employment.This book brilliantly captures the high hopes of the period in which the Welfare State was created and the cranky zeal of its inventor, William Beveridge, telling the story of how his vision inspired an entire country. The pages of this modern classic hum with the energies and passions of activists, dreamers and ordinary Britons, and seethe with personal vendettas, forced compromises, awkward contradictions, and the noisy rows of the succeeding seventy years. The Five Giants is a testament to a concept of government that is intertwined with so many of our personal histories, and a stark reminder of what we might stand to lose.
The Five Giants
NICHOLAS TIMMINS is a senior fellow at the Institute for Government and at the King’s Fund, and a visiting professor in social policy at the London School of Economics and in public management at King’s College, London. He was public policy editor and commentator at the Financial Times from 1996 to 2012. He worked previously for Nature, the Press Association and The Times, and was a founder member of the Independent.
from the reviews:
‘A splendid book – knowledgeable, readable and fair’
ROBERT SKIDELSKY
‘Nicholas Timmins has done something extraordinary: he has made a masterpiece of contemporary history even better. Updated, extended and more relevant than ever, this book is quite simply indispensable’
MATTHEW D’ANCONA
‘The first thing I did when appointed as Secretary of State at Work and Pensions, Education and Health was borrow The Five Giants from the House of Commons Library in order to understand how the issues I was to deal with had developed since Beveridge’
ALAN JOHNSON
‘For years now, old copies of The Five Giants have been changing hands in Westminster for dizzying sums – and for a simple reason. Other books just offer fragments of the story of British government, only this gives you the full picture. I lend my copy to new recruits at the Spectator not as history but as a guide to what they will encounter – and how the same problems keep surfacing again and again. The facts and the figures, the jokes and one-liners, the power and the personality – The Five Giants has it all. It’s possible to understand modern Britain without reading this book, but it’s just a lot harder (and a lot less fun)’
FRASER NELSON, Spectator
‘Timmins’s book is remarkably fair … the first comprehensive biography of the welfare state from 1945 to the present day [and] a pleasure to read’
MALCOLM RUTHERFORD, Financial Times
‘Nicholas Timmins worked on this detailed and readable book for six years – and it shows. Few books deserve being described as “definitive” or “magisterial” as richly as this one does. Its scope is enormous, dealing with the welfare state from its early inspirations to the present day. It would hardly be possible to read this book – whatever one’s political convictions – and not find much food for thought. It ranks as an extremely stimulating book which will be read for years to come’
CONOR MCGRATH, Parliamentary Monitor
‘A remarkable tale, remarkably told … The story speeds along, and there are some wonderfully funny jokes’
FRANK FIELD, Literary Review
‘Extraordinarily comprehensive without ever being incomprehensible’
ROY HATTERSLEY, Independent
‘Timmins performs wonders of narrative clarity, anecdote and human detail in a book that finds its chosen level somewhere between Gibbon’s Decline and Fall of the Roman Empire and 1066 and All That … There is something very moving about his rhetoric of transformation and The Five Giants will stir up strong emotions. It is impossible not to respond in personal terms to a book that is part of so many of our histories, woven into the day-to-day texture of our lives’
FIONA MACCARTHY, Observer
‘Readable studies of the welfare state have been few. Timmins’ blockbuster, though, is amazingly readable, brilliantly researched, and in no way flashy or superficial’
ANGUS CALDER, Scotland on Sunday
‘The Five Giants is a book which no one who speaks, writes or thinks about social policy will want to miss, still less to admit to having not read’
TESSA JOWELL, Health Service Journal
‘Ambitious – and successful … In these 600 pages Timmins dissects and organizes the 50-year period with skill and clarity. His book inhabits that territory between good journalism and academic research, which has so often produced the best contemporary history in Britain’
MALCOLM WICKS, New Statesman
‘Eminently readable … for those who have a neat interpretation of history devoid of people and accidents, Timmins’ book is a healthy but enjoyable antidote’
HOWARD GLENNESTER, Guardian
‘Timmins writes with authority, and much inside information, on recent history. He has written the best account so far of Tory social policy since 1979. But the larger achievement of the book is to place the era of Thatcher and Major in the longer term perspective of World War Two. Timmins is no academic historian, but he has made good use of the work of academics, blending their findings with flair and enthusiasm. The result is a first-class history in which a detailed exposition of social policy is combined with narrative pace and lively portraits of the people involved’
PAUL ADDISON, Independent on Sunday
‘Positively moving … Timmins takes trouble to chart the improvements in education, health and housing which the majority of people in Britain have enjoyed in the time covered by his book’
ROBERT WRIGHT, Scotsman
‘Exceptional … a work of prodigious scope and illuminating analysis, a text of true scholarship’
IAN MUNRO, Lancet
‘Outstandingly acute … a highly readable book that adds to our knowledge of the evolving history of the welfare state and provides an indispensable source for coming to a sensible view about its successes and failures. Timmins brings alive both the process of making policy and its impact’
RUDOLF KLEIN, British Medical Journal
‘The welfare state deserves a biography on a grand scale. Nicholas Timmins provides just that’
JOHN REDWOOD, The Times
‘A tour de force … thoroughly researched, vividly written and bulging with out-of-the-way information. The Five Giants is the ideal companion to the more discursive works on the post-1945 period such as Peter Hennessy’s Never Again. Not that Timmins stops at the end of the post-war world …’
ANTHONY HOWARD, Sunday Times
‘The best account of British social policy since the war’
DAVID WILLETTS, Times Literary Supplement
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This eBook first published in Great Britain by William Collins in 2017
Copyright © Nicholas Timmins 2017
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Source ISBN: 978-0-00-733513-8
Ebook Edition © November 2017 ISBN: 9780008236168
Version: 2018-06-27
For Arthur, Violet and Effra
Plus any future siblings or cousins, in the hope
that as and when they need it, it will still be there.
And to all those people, users and providers,
politicians, civil servants, academics, clinicians,
managers, teachers and others who attempt to explain
the workings of the welfare state to ignorant hacks.
Without them the reporting of the subject would be
even worse than it is.
Social reform is a process, not an event: a kind of drama.
David Donnison, The Politics of Poverty (1981), p.viii
I do not agree with those who say that every man must look after himself, and that intervention by the state … will be fatal to his self-reliance, his foresight and his thrift … It is a mistake to suppose that thrift is caused only by fear; it springs from hope as well as fear. Where there is no hope, be sure there will be no thrift.
Winston Churchill, Liberalism and the Social Problems (1909), p. 209
‘Two nations: between whom there is no intercourse and no sympathy; who are as ignorant of each other’s habits, thoughts, and feelings, as if they were dwellers in different zones, or inhabitants of different planets; who are formed by a different breeding, are fed by a different food, are ordered by different manners, and are not governed by the same laws.’
‘You speak of –’ said Egremont hesitatingly, ‘the rich and the poor?’
Benjamin Disraeli, Sybil (1845), Book II, chapter 5.
When the evidence changes, I change my mind. What do you do?
Cod quote attributed to John Maynard Keynes
Contents
Title Page (#ua5ec31ed-296f-50a0-a181-f9b2e75b3784)
Copyright (#ulink_3e4c0933-148e-5e80-abd0-9c0d38a9f352)
Dedication (#u337b1496-09ba-5475-b955-99c6a404a1fd)
List of Illustrations (#ulink_0cfbda98-8d07-5eee-a5c3-228742b9fb67)
Preface (#ulink_e6040a5c-4497-5d6d-a8d5-65502c327aeb)
Preface to the Third Edition (#ulink_4f7920bf-314a-5a72-beb5-5bdd8c251465)
Introduction (#ulink_f841cf26-3d05-51fc-9039-80804f272937)
PART I THE PIPERS AT THE GATE OF DAWN (#ulink_c414b235-6e38-533d-998c-8e199dce2972)
1‘Thank you, Sir William’ (#ulink_700fde52-ef71-5e14-9a61-ed0def6239ed)
2‘From cradle to grave’ (#ulink_29ef6444-078b-5bd8-a3d8-40c6771d36b9)
3A very British revolution (#ulink_640c0dbd-a4a4-5352-adcd-93dde8ef5b7a)
PART II THE AGE Of OPTIMISM: 1942–51 (#ulink_04022a00-c0b1-5bd0-bb1d-0041e57572d3)
4Butler – Education (#ulink_84ddde45-365c-5c75-b35e-5817a0008983)
5Butler’s legacy
6Bevan – Health
7‘With a song in my heart’ – Health and Social Security
8‘The Tremendous Tory’ – Housing
9The Final Foundations
10Conservatives, Consensus and the New Jerusalem
PART III CONSOLIDATION: 1951–74
11‘You’ve never had it so good’: Conservatives 1951–64
12Hope springs eternal: Labour 1964–70
13The Dawn of Doubt: Labour and Conservatives 1949–70
14The Tories’ last hurrah: Conservatives 1970–74
PART IV THE TIME OF DISILLUSION: 1974–79
15It was getting colder by the hour: Labour 1974–79
16‘We were wrong all along’: Conservatives 1974–79
PART V THE WELFARE STATE UNDER FIRE: 1979–92
17Cuts and catastrophes: Conservatives 1979–83
18Fighting Leviathans: Conservatives 1983–87
19Forming the future: Conservatives 1987–92
PART VI RETREAT OR RENEWAL? 1992–2010
20Thinking the unthinkable: Conservatives and Labour 1992–97
21Social security and social exclusion: Labour 1997–2007
22Public services – health, education and housing: Labour 1997–2007
23The Brown caesura: Labour 2007–10
PART VII THREE SCORE YEARS AND TEN
24Austerity bites: The coalition and Conservatives 2010–16
Notes
Select Bibliography
Index
Photos Section
About the Publisher
Illustrations (#ulink_eab97a6f-e020-539c-88b8-fdb3a2c64dc5)
Plates
‘From cradle to grave …’ The Daily Mirror’s front page, December 2, 1942 (reproduced by permission of Mirror Syndication International)
Sir William Beveridge (Hulton Deutsch)
Health made Bevan’s name, but he was proud of his housing (Hulton Deutsch)
Rab Butler as President of the Board of Education (Hulton Deutsch)
Tony Crosland, Secretary of State for Education and Science (Hulton Deutsch)
Dr Guy Dain and Dr Charles Hill (Hulton Deutsch)
Jim Griffiths talks in 1955 to Richard Crossman (Hulton Deutsch)
The young Barbara Castle at the 1944 Labour party conference
Dr Derek Stevenson (© The Telegraph plc, London 1975)
David Ennals in hospital on the 30th anniversary of the NHS in 1978 (Press Association)
Sir Keith Joseph at the Conservative Party Conference in 1985 (Richard Open/Camera Press)
Norman Fowler in 1986 (The Independent/Brian Harris)
Roy Griffiths (Universal Pictorial Press & Agency Ltd)
Kenneth Clarke and Michael Portillo (The Independent/Edward Sykes)
Bevan’s council housing in Hainault and newly modernised bathroom and unmodernised washing facilities in flats on the LCC’s Millbank Estate (Greater London Record Office Photograph Library)
Ronan Point in 1968 (ANL/REX/Shutterstock)
Houses in St Paul’s Cray (Peter Van Arden)
Child in hospital in 1930s (Hulton Deutsch)
‘Babies under glass’ in 1944 (Hulton Deutsch)
Modern intensive care (By Ian Miles-Flashpoint Pictures/Alamy Stock Photo)
First family allowance day in Stratford, East London, 1946 (Hulton Deutsch)
Social Security Offices of the 1980s and 2000s (Benefits Agency/Photo by Jeff overs/BBC News & Current Affairs via Getty Images)
Classes at snowsfield Primary school in 1944 and 1954 (Greater London Record office Photograph Library)
Class at snowsfield Primary school in 1994 (snowsfield Primary School)
Integrated Illustrations
Beveridge Fighting the Five Giants by George Whitelaw published by the Daily Herald (© Mirror syndication International) page 12
‘Labour Isn’t Working’ (Conservative Party/Maiden outdoor) page 354
‘Come Out the Boy — Whose Throwing Things’ by Gerald scarfe published by the Sunday Times, 22 November, 1987 (Centre for the Study of Cartoons and Caricature, University of Kent, Canterbury) Page 439
‘Mrs Thatcher’s Plans for the NHS’ (BMA/Abbot Mead Vickers BBDO Ltd) page 470
‘This is the road’ by David Low published by the Evening Standard, 27 January 1950 (© Solo syndication/Centre for the Study of Cartoons and Caricature, University of Kent, Canterbury) page 499
Preface (#ulink_b52836da-f6e3-51c7-874a-e138b1f4c9bf)
There are undeniable structural difficulties in writing a narrative account of five or six not always closely related subjects across seventy years. The approach here has broadly been to break the story up by government and divide it again by subject – education, health, social security, for example. But a word of warning is necessary. Narrative thrust has been given precedence over organisational tidiness. Bits of subjects therefore crop up in places other than under their specific headings, particularly in the later chapters, where themes as well as the story are pulled together. They also appear out of their strict chronology. So to take just one example, the development of second pensions is dealt with in the late 1950s but not mentioned again in detail until the mid-1970s when what happened to failed schemes from the sixties and early seventies is discussed. Anyone, therefore, attempting to follow a particular subject rather than read the whole book would need to combine section headings with both a reading of the top and tail of each chapter, and judicious use of the index.
A note about titles is needed. I have used what felt right, which means inconsistency. Later knighthoods and peerages are therefore frequently ignored (I know who Ted Short is, but struggle to place Lord Glenamara). Conversely, where someone has long been ‘Sir’ or ‘Lady’ somebody I have tended to use the title even ahead of their elevation to it. I hope no individual feels insulted. Scotland, Wales and Northern Ireland will, alas, because like so many British histories this is effectively England’s story with both the wrinkles and the larger differences elsewhere largely avoided. I offer as a poor excuse lack of space and the way the British government assembles its statistics.
Any book like this is the work of many hands and even more brains. Aside from the primary debts listed in the introduction I have incurred many more. Well over fifty people, from current and former politicians and civil servants to ministerial advisers and actors in the welfare state’s drama, have given me time for interviews. Most are acknowledged in the end notes. Some, because they are serving civil servants, cannot be named. A few provided help knowing they might not emerge too happily from the process. To all of them I am grateful. There were others to whom I should have talked, but I simply ran out of time. To these I apologise.
Then there are debts to journalistic colleagues, particularly a string of past education editors of the Independent, Peter Wilby, Ngaio Crequer and Colin Hughes. Along with David Walker of the BBC, Malcolm Dean of the Guardian, and Tony Bevins of the Observer, they lent me their brains, their time and their books, while many others have lent me their copy, conversation and company over the years. Sue Johnson at the Policy Studies Institute library rapidly met requests for the oddest books and articles without raising an eyebrow.
At crucial moments three professorial Peters, Peter Scott of Leeds University, Peter Kemp of York University, and Peter Hennessy of Queen Mary and Westfield College, London University, rescued me by providing references, as did Tony Lynes, Ronnie Bedford and Charles Webster, the official historian of the National Health Service.
As a journalist rather than a historian, I have chiefly relied on others’ gutting of the Public Record Office for the period for which such records are available. Alistair Cooke at Conservative Central Office was, however, generous enough to let me loose in the party’s records in the Bodleian Library up to and including the crucial period of policy formation ahead of the 1979 general election. I am grateful to him for both the access and the permission to refer to documents, and to Dr Sarah Street and Dr Martin Moore for helping me find my way around them.
A dozen or so authors deserve special mention as well as being listed in the bibliography. Nobody can write about Beveridge without owing a huge debt to José Harris’s wonderful, multi-faceted biography of him. David Donnison’s works, but particularly his Politics of Poverty, are inspirational: object lessons in how to write about social policy. I doubt I could have managed to cover education without Brian Simon’s mighty and passionate Education and the Social Order, or Harry Judge’s illuminating A Generation of Schooling, or the sharp analysis and easy writing of Stuart Maclure and Maurice Kogan. Brian Ellis’s official history of pensions from 1955 to 1975 is a starred first example of how to make a horrendously complex subject seem simple and interesting. Nobody should write about the NHS without reading Enoch Powell, Rudolf Klein, and Charles Webster. And anything written by Nicholas Deakin is always stimulating, particularly his 1987 version of The Politics of Welfare. On a broader front, the 1940s are brilliantly served by Peter Hennessy’s Never Again, Paul Addison’s The Road to 1945 and Now the War is Over, and Angus Calder’s The People’s War, while Kenneth O. Morgan’s works, and particularly The People’s Peace, his history of Britain 1945–90, are indispensable – as is Hugo Young’s study of Margaret Thatcher, One of Us.
When I started work on this book in 1993, there was really no substantial modern post-war history available to match Derek Fraser’s fine work The Evolution of the British Welfare State, which takes the story up to Beveridge. Shortly after I started, Rodney Lowe’s The Welfare State in Britain since 1945 appeared. It is completely different in character from this work, much more academic and analytical, concentrating on what he dubs the ‘classic’ welfare state up to 1976 and then moving on to 1990 in less depth. It is an excellent book. But it is not this one. I hope in some small way this will complement that.
Finally there are more personal cheques to sign. Three people – Tony Bevins, David Walker and Julian Le Grand, the Richard Titmuss Professor of Health Policy at the London School of Economics – suffered the whole book in draft. David Willetts read chapters sixteen to nineteen. David Donnison read the housing sections, Dr Gordon Macpherson those on health, Sir George Godber the NHS material up to 1974, and Stuart Maclure the education sections. Frank Field, Sir Patrick Nairne, Sir Geoffrey Otton, Norman Warner, Robin Wendt and (as a prelude to an interview) Shirley Williams all read chapters, or parts of chapters, within their competence, as did two, by convention anonymous, civil servants. All saved me from errors of both fact and judgement, large, small and downright embarrassing. All made it a better book. Some provided criticisms I have not been able to answer. If there is credit, they deserve much of it. The undoubted remaining errors of fact, judgement and tone remain all mine.
Much is due also to John Pawsey, my agent, to Betty Palmer, my copy editor, and to Philip Gwyn Jones, Caroline Hotblack and Kate Harris at HarperCollins for various forms of faith and aid, some beyond the call of duty.
The most personal cheques of all go to Tony for his energising encouragement and superbly pedantic reading of texts and to Jerry, both of whom at times had more faith in this project than I did; to Audrey Maxwell for organisation and memories; to Zoe, Jonathan and Robert for their wonderful forbearance; but most of all and for all of those to Elaine, sans qui…
Preface to the Third Edition (#ulink_11d48eaa-40ff-58c5-91f9-a7f15186e22b)
This fills in the missing sixteen years since the second edition of The Five Giants ended. It is probably the last edition. If not, it probably should be.
Not because, however battered parts of it feel at the time of writing, and now at age seventy, the welfare state is at death’s door. That seems less than likely any time soon, given that it is still consuming £500bn of government expenditure, or very roughly a quarter of the country’s income.
Rather, it will probably be the last edition because if this book has any value, some of it lies in the fact that for a fraction over half of its life since 1948 I was lucky enough to report not on all of it, but on key parts of it, as they happened, while working for the Press Association, The Times, the Independent and finally for the Financial Times.
I was never in the room, but I was often outside, eavesdropping, or pressing my nose up against the window. I had a ringside seat. And when I did not, I was working with journalist colleagues who did, including a whole string of excellent political, economic, education, employment, and even housing correspondents, when they existed, over the years.
So not only did I – and I hope the readers – gain hugely from the unending education provided by practitioners, recipients, civil servants, politicians, lobbyists, academics, think-tankers, special advisers and journalistic colleagues, but those relationships allowed me to go back later to query, improve, reshape and, sometimes by anecdote, illuminate parts of the account.
Since 2012 – and the reason this edition should probably be the last – I have still had a seat at the circus. But it has been a few rows further back, as I’ve turned from a journalist into a chronicler – though not a proper historian. And, as time goes by, it will be from a few rows further back, in the cheaper seats. I will know well fewer of the people, inside and outside government, who shape it.
This edition seeks again to find that fine balance between 1066 and All That and Gibbon’s Decline and Fall of the Roman Empire, with enough space in there for readers to stand at least a chance of making up their own minds. Among my favourite moments since the first edition have been when I’ve been approached by foam-flecked young Tory researchers and profoundly over-earnest young Labour ones who have both told me how wonderful it is. The former because ‘it tells you everything that is wrong with the welfare state’ and the latter because ‘it shows exactly why we must defend it’.
As the third edition was being written, some of the same motivations that drove the first edition piled back in. Not least the return to the streets of the homeless who had largely been absent, and largely to at least some level cared for, for the previous decade and more. If we are all in this together, for them at least, it does not show. And because if the first edition was written in part for those who did not know life before Margaret Thatcher, this one is in part written for those who, if they remember him at all, believe only that Tony Blair was a war criminal.
It comes at a most opportune time, and a most inopportune one. It is opportune because it is just ahead of the seventy-fifth anniversary of the Beveridge report and of the seventieth anniversary of two of the key pillars of Britain’s modern welfare state: its social security system and its National Health Service. A good time to bring the story up to date, and thus to reflect.
It is inopportune because on 23 June 2016 Britain voted to leave the European Union. The impact of Brexit on the welfare state, for good or ill, may well be profound, though in ways we can only guess. For that and other reasons this edition ends full of question marks. But there have been plenty of other occasions over the years when the welfare state has been called into question – as I hope its biography shows.
This edition, like the first, remains the work of many more people than me.
In addition to all those who gave up time for interviews and who – where they can be – are acknowledged in the endnotes, there remain many additional IOUs. A completely comprehensive list would run to many more than these pages.
For the second edition, my primary debts include my professorial Peters, Peter Kemp at Glasgow University, and Peter Scott, then vice-chancellor of Kingston University, who rescued me with references and lessons on housing and higher education, as did Richard Layard of the London School of Economics on the labour market and employment policy. John Perry of the Chartered Institute for Housing and Stuart Maclure, along with John Carvel and David Brindle of the Guardian, also provided important compasses. Andrew Dilnot, at the time director of the Institute for Fiscal Studies, bullied me into giving a lunchtime seminar on where I had got to, even before I had: an excellent discipline. Along with Richard Layard, John McTernan, Alan Langlands, John Perry and Julian Le Grand, he read drafts of the additional text for the second edition, as did two civil servants who, even now, I cannot thank, much as I would like to.
Between the second and third editions I also owe thanks to an emeritus professor of classics at Durham, whose name I have alas long since lost, who wrote a very sweet note pointing out that the famous words of Petronius on p. 290 are in fact a cod quote. He had, he said, traced it to occupied Berlin after the war, where a presumably classically trained and deeply frustrated British officer had pinned it to a bulletin board from whence, in the days before the internet, it had, so to speak, gone viral.
The second edition – and indeed the third – owe a great deal to the members of the public policy team at the Financial Times who taught me much over the years, particularly Jim Kelly, Miranda Green and Chris Cook, successive education correspondents. My debts at the FT go much wider, not least to Richard Lambert, Lionel Barber and Robert Shrimsley, who gave me wings to fly, but also to Robert Chote, Chris Giles and Martin Wolf, each of whom sought to beat some economics into me, and also to Patti Waldmeir, who shouted at me that I did not understand US welfare reform to the point where I finally did; or at least understood it better. Again at the FT, Peter Cheek in the library dug cuttings out of basements and conjured documents out of nowhere. Outside the FT, Andy Cowper of Health Policy Insight has been, variously over the years, both a great editor and an endless source of inspiration and humour. At HarperCollins I also had the immense privilege of being edited again by Philip Gwyn Jones and Georgina Laycock, who have gone on to better things than seeking to sort me out. The second edition, like the first, was also read by Tony Bevins, and was, as is this in part, in his memory. He liked it, and one could not ask for more. He would doubtless have improved this edition. Howard Glennerster’s and Rudolf Klein’s repeatedly updated editions of their British Social Policy since 1945, and The New Politics of the NHS, plus their other writings, were critical guides to both that edition and this.
For the third edition – which fills in sixteen missing years, rather than the six between editions one and two – most of those cheques are there to sign again, and many more. Aside from the interviews, I owe huge amounts to the many present and former staff at the institute for Fiscal Studies, but most particularly to Carl Emmerson, Mike Brewer and Paul Johnson, and over the years to many at the London School of Economics, particularly but not only to Nick Barr, Gwyn Bevan and Tony Travers, and most especially to John Hills and his team at the Centre for Analysis of Social Exclusion (CASE). Not just for all their many publications – and an analysis of CASE’s output from The State of Welfare in 1989 to Social Policy in a Cold Climate in 2016 would probably make a PhD thesis in its own right – but for many conversations. At King’s College, London, I am in debt to Alison Wolf.
Countless other academics, think-tank practitioners and special advisers have sought to keep me on the straight and narrow over the years, often from sharply differing viewpoints. Any list is invidious, but those who must be mentioned include in random order Alan Maynard, Paul Gregg, Peter Taylor-Gooby, Alan Smithers, Nick Bosanquet, Tony Culyer, Mike Rawlins, Nick Black, Jane Millar, Nick Mays, Colin Talbot, Simon Burgess, Carol Propper, Bill Morgan, Nick Seddon, Ruth Lister, Fran Bennett, Andrew Haldenby, Olly Grender, Anita Charlesworth, and in earlier days, when they were doing different things, Rick Nye, Danny Finkelstein and Geoff Mulgan.
The third edition was made easier by work already done for the Institute for Government, the King’s Fund and the Health Foundation which helped tell the update to this story. These include Never Again?, Universal Credit and Glaziers and Window Breakers, which are referenced and are now in the bibliography, not as an act of self-aggrandisement, but because they tell parts of this story in more detail and contain the source for many of the quotes.
Those publications would not have been possible without the support of Chris Ham, Andrew Adonis, Peter Riddell, Jennifer Dixon, Jill Rutter, Julian McCrae, John Appleby and Nigel Edwards, and the immense help of, among others, Philippa Stroud, Iain Duncan Smith, David Freud, David Nicholson, Stephen Brien, and a whole clutch of civil servants who, by convention, have to remain anonymous.
Even since the second edition, there has been an explosion in political ‘instant history’, not least Anthony Seldon’s multiple accounts as either author or editor of the Blair, Brown and Cameron years. These helped no end, and in places go into much more of the gory political row around some of the issues than has been possible here. But if I had to recommend just two political histories that cover the third edition, it would be Andrew Rawnsley’s magisterial accounts of the Labour years, Servants of the People and The End of the Party, and Matthew d’Ancona’s excellent In It Together for the coalition period.
For getting this edition to publication my biggest single piece of thanks goes once again to Peter Hennessy, who inspired this in the first place, and who found me a way back into HarperCollins that was defeating me. The next two go to Julian Le Grand of the LSE and Matthew Taylor at the Royal Society of Arts. Julian, as with the earlier editions, suffered all of this in draft, making many helpful suggestions and corrections while also, crucially, solving a major structural problem. Matthew, in conversation, not only donated the core of the final conceit but also, critically, delivered the very last line. Debts don’t get much bigger than that, and to both I am immensely grateful.
But there are many more. Once again I owe thanks over and above the call of duty to Kate Harris, who got me to the incredibly helpful wizards of the Oxford English Dictionary, allowing me to illustrate rather than assert how the language around ‘the welfare state’ has changed. In no particular order, Nick Hillman of the Higher Education Policy Institute was immensely helpful, both in conversation and with sources, and then in reading the drafts on higher education, while Roderick Floud expounded on his Gresham College lecture for me. Ken Jones gave me an early sight of his latest edition of Education in Britain, and Richard Garner, the Independent’s long-standing education editor, did the same with The Thirty Years War, his account of thirty years of education reporting. Richard, along with Conor Ryan, now at the Sutton Trust, found time to read the schools sections. Chris Ham and Richard Humphries at the King’s Fund read health and social care. Adair Turner, Joanne Segars and Steve Webb read the pensions material. John Hills checked references to his and his colleagues’ work. Matthew Whittaker at the Resolution Foundation read and corrected key passages. Gus O’Donnell pointed out a key omission. Chris Giles at the Financial Times put right my account of the financial crash. Gavin Kelly and Dan Corry were extremely helpful. Alistair Darling and John McTernan read the Labour years and David Willetts the account of the succeeding ones. Parts were also read by civil servants, or retired civil servants who either have to, or chose to, remain anonymous. All of these helped immensely. They corrected errors of fact, tone and judgement. And where, despite their best endeavours, undoubted errors remain in all three categories, the responsibility is mine.
For the third edition and at HarperCollins my thanks are due to Arabella Pike, now William Collins publishing director, who happily, from my point of view, remembered the first edition from her most junior days at HarperCollins; to Joe Zigmond and Tom Killingbeck, my editors; to Steve Cox who produced a fine copy edit; and to Iain Hunt, senior project editor, who with good grace and no little wit undertook the heavy lifting.
Immense thanks are once again due to Elaine, Zoe, Jonathan and Robert, and to Arthur, Violet and Effra, along with Audrey, Rick, Frann and Jerry and his family, all of whom made me laugh, and who put up for endless months with a deeply distracted man.
Finally there are remarkably few new ideas in here. Rather, as with the first edition, I have largely been a weaver of other people’s ideas, analysis, dreams and actions into a tapestry: the welfare state’s story.
NICHOLAS TIMMINS
May 2017
Introduction (#ulink_bf9a507d-ca04-5f50-b521-bbb640d5472f)
Theory is so much clearer than history.
E. P. Thompson, The Poverty of Theory (1978), p. 237
Freedom from Want cannot be forced on a democracy or given to a democracy. It must be won by them.
Sir William Beveridge, 20 November 1942
This book started life one September Sunday in 1989 when Peter Hennessy, in one of his more Tigger-ish moods, bounced into the Independent to deliver his ‘Whitehall Watch’ column. He had been working on Never Again, his history of Britain from 1945 to 1951, and had been re-reading the Beveridge report. ‘Someone,’ he said, ‘needs to write a good modern history of the welfare state, and you ought to do it. You can call it The Five Giants. You just start with Beveridge with tears in his eyes and work forwards.’
The idea seemed frankly farcical. I was covering the government’s NHS review and John Moore’s attempt to recast the language of welfare. I had just acquired two more small children. There seemed not enough hours in the day. I was a journalist, not a historian. And there were large parts of the welfare state about which I knew nothing. The idea, however, would not go away. If there was much about which I was ignorant, there were bits of the subject about which I did know something. On and off, I’d spent more than fifteen years reporting them. For some of the more exciting events related here from the mid-1970s on, as Max Boyce would put it, ‘I was there.’ Other motivations piled in. When, in Keith Joseph’s final days as Secretary of State for Social Services, I first started reporting what the academics would call social policy, I had wished for a single volume which simply told the story of how we had got there – the events, ideas, personalities, issues and pressures which had taken the post-1945 welfare state to that point. One that had the best quotes and some of the best jokes all in one place and referenced, and which provided at least a background from which some of the more technical issues could be tackled. Something between Gibbon’s Decline and Fall of the Roman Empire and 1066 and All That — only for the welfare state and all in one volume. There were single-subject accounts, but none which covered the waterfront or provided quite that mix.
Other motives included bemusement at how the Portillos, Redwoods and the other younger Thatcherites of this world – all of them broadly my age, the generation of whom Ian Kennedy, Professor of Medical Law and Ethics at King’s College, London, once said, ‘if you say soixante-huit to them, they don’t think you’ve got a digit wrong’ – could have such heartfelt hostility to an idea for which I had an instinctive sympathy. To me, and for all its myriad faults, some form of collective provision had always seemed, to put it at its lowest, the least bad way of organising education, health care and social security – things we all need, and which not all of us can guarantee to provide for ourselves either all the time or at the time they are needed. The challenge had always seemed how to improve the workings of the welfare state, not how to dismantle it.
Furthermore, as someone who had grown up with the swings and roundabouts of alternating Labour and Conservative governments, I became increasingly aware that most people under forty have only limited adult memories of life before Thatcher. The period before that, despite the way Kenneth Clarke would have it, is now history, not current affairs. Yet a little history can improve understanding of the current debates about the welfare state, and limit the chances of getting carried away by them.
It is quite important to know that virtually every day since 1948 the NHS has been said to be in crisis, and that for the last seventy-five years morale within it has invariably never been lower. It is worth understanding that every time unemployment rises significantly, there is, like a bad dog that has its day, a spell when the unemployed are blamed as work-shy scroungers before unemployment settles at a new plateau. It is worth knowing that in education, yesterday has almost always been better than today, despite rising numbers passing ever more advanced levels of examinations and reaching higher education in ever greater numbers in every year (with two exceptions) since 1945. It can help to put the Conservatives’ stewardship of the NHS into perspective to know that the first Secretary of State to be sued by a patient for failing to provide an operation was a Labour minister, not a Conservative. Such knowledge matters because it can ward off false despair – the sort which in 1987 afflicted the Tories over the NHS, when they felt they would never gain any credit for it and came the closest they ever have to dismantling it.
Then again, there is the need to attack a few myths. For example that before Margaret Thatcher’s arrival in 1979 all was sweetness and light, and that all was well with the welfare state. It wasn’t. Or that there have been no advances to go alongside the reverses in the past fifteen years. There have.
But if the view that there was a Golden Age in which a lavishly funded welfare system operated in a rosy glow of consensus needs challenging, so does the obverse view which has begun to gain currency – that there never was any real agreement about ends and means, and that the Conservatives always did have a blueprint for breaking the thing up. It is an interpretation advanced in triumph by some on the right who believe their schema for the world is about to come to fruition. It is subscribed to on the left by those who want to believe in a conspiracy theory, and by some who now want to blame themselves for not seeing it coming. It is constructed by trawling through past pamphlets, essays and speeches for the source of ideas now in play such as grant maintained schools, or vouchers for training. Such a view misrepresents history. It is the equivalent of arguing that because in today’s Labour Party there are still people who believe in nationalising the top 200 companies, then if a future Labour government did nationalise them, it would prove that always to have been the Labour Party’s secret aim. Such a view is plainly tosh. Its equivalent is to argue that because there were Conservatives in the 1950s and 1960s who pressed for cash-limited vouchers, for privatisation of both supply and demand, and for a drastic rolling back of the welfare state, then that was always the secret Tory agenda. The ideas did exist, but they were not then in the plans of any political party, any more than nationalising the top 200 companies is in Labour’s in 1995.
Equally, attempts to portray repeated Treasury proposals for new NHS charges or the raising of the school starting age as part of the Conservatives’ desire to undermine the welfare state misunderstands the Treasury’s function. It propounds such ideas to governments of all colours because part of the Treasury’s job is to stop governments spending money. The proposals Gaitskell backed in 1951 to scrap the NHS dental service and introduce ‘hotel’ charges for NHS beds were almost as draconian as anything proposed by his Conservative successors. But they were not introduced, any more than a Cabinet majority was ever assembled for the more extreme pieces of surgery proposed for health and education by the Treasury, by Chancellors and even at times by Prime Ministers under the Conservatives between 1951 and 1964. Equally, the Treasury and Treasury ministers proposed loans in place of student grants, and significant benefit cuts, to Labour as well as Conservative governments.
In judging how far there was a consensus about the welfare state, one must look at what actually happened, not just at the naughty thoughts each side harboured.
The counter-myth to the conspiracy of the right is that before 1979 satanic socialists set out to control the nation by placing it in some universalist cradle-to-grave feather bed aimed at sapping its moral fibre and taking the Great out of Britain. This doesn’t wash. For a start, from 1945 up to 1979 the Conservatives controlled the welfare state for almost exactly the same period as Labour, and were responsible for some of its most expansionary phases. If the Conservatives at times moved to make services more universal – launching the first great explosion in higher education, for example – Labour, equally, joined Conservative governments in extending means-testing. The welfare state (the phrase has its own problems which we’ll come to in a moment) is after all a living, moving, breathing being, bits of whose boundaries have moved back and forth under both parties in the past fifty years. It is not some fixed nirvana which we either draw nearer to or retreat from.
A further motivation to write this book was anger – anger that it is impossible now to travel on the London underground or walk the streets of our big cities without finding beggars, or, more often, without beggars finding us. That, in my lifetime, did not happen before the late 1980s. There were the down-and-outs on the Embankment. There were the spikes, the left-over remnants of the Poor Law workhouses, which housed the alcoholics and schizophrenics who avoided all the ropes in the safety net. But there were no young people, their lives blighted, sleeping in doorways in the Strand.
Then – and despite that anger – there was the perverse need to declare that, even after well over a decade of ideological assault, the welfare state still exists. Almost everyone to whom the idea of the book was mentioned instantly cracked a joke about the need to be quick about it before the thing disappeared. Most publishers wanted to call it From Cradle to Grave. Yet when welfare state services still take two-thirds of an annual government expenditure totalling £262 billion, the animal, whatever strains it may be under, can hardly be said to be dead. Create a strong enough perception that the welfare state is dying, however, and you make it easier to lop off further chunks without anyone asking where they went.
And then it just seemed fun. The story of the welfare state is a great adventure – a story worth telling, particularly when all its fiftieth anniversaries were looming.
And so in the end the book got written. It did so only because Andreas Whittam-Smith was generous enough to provide in 1993 a six-month sabbatical from the Independent. In turn I was lucky enough to be able to spend that time at the Policy Studies Institute as a Distinguished Visiting Fellow, funded by money from the Joseph Rowntree Foundation. The PSI’s monastic cells, learned but practical inmates and good library made it an ideal place to be. These, along with what is owed to Peter Hennessy for donating the idea, are my primary debts. There are many other listed in the Preface.
The finished book may not be what any of those who helped so much envisaged. Nor does it answer all the challenges given as motives for writing it. What it does represent is a perhaps over-ambitious stab at twisting the kaleidoscope of the post-war history of Britain. In most versions, the welfare state, certainly after 1945–51, plays only a walk-on part. This one attempts to put the welfare state centre stage while allowing economic, political and even cultural events to play the walk-on roles. They are, however, there and they are crucial to the story, because they do so much to define and limit what can be done. The welfare state, after all, is itself a key cog in the economy. Too much discussion of social policy, too much measurement of its success and failure, appears at times to take place in a vacuum, untainted by the realities of the world at the time.
One theme which repeatedly emerges is the law of unintended consequences: that decisions taken for the best of motives will often go awry. This applies to governments seeking expansion, for example by providing larger subsidies to high-rise flats to produce more housing. But it applies equally to governments trying to draw back: for example, by withholding benefits from sixteen- and seventeen-year-olds because they should be in education, work or training, not on the dole. It is a lesson the right would do as well to remember as the left.
One issue should perhaps be dealt with here because it stands outside the narrative. In the mid-1980s, Correlli Barnett’s brilliant and detailed polemic The Audit of War helped influence Tory hostility to the welfare state. Barnett saw the ‘New Jerusalem’ of the welfare state itself, along with the historic and continuing failure to organise high-grade technical education, as the twin causes of Britain’s relative economic decline. His thesis has been widely debated elsewhere and by others far better informed than I. But while the second half of his argument has force, the first seems overstated. Other Western countries also developed modern and much more extensive welfare states after the Second World War, most ended up spending appreciably higher shares of their income on them than Britain did – and almost all achieved higher growth rates.
Britain, physically less scarred by war, had laid the foundations of its welfare state earlier. But to argue that it crippled the economy seems, in Sir Alec Cairncross’s phrase, ‘badly out of focus’. Cairncross calculates that spending on education, health, housing, pensions and unemployment benefit reached about £1.5 billion in 1950 – half as much again in real terms as before the war. But defence expenditure never ran below £750 million after 1945, roughly twice as much in real terms as in 1938, and reached more than £1400 million again in 1952. Food subsidies, which are arguably a part of the welfare state but are also an economic regulator put in place to keep prices down, cost approaching £500 million in 1949 – more than any single social service.
Almost £2.5 billion in cash compensation or commitments to interest-bearing stock went through the national accounts after 1945 to pay for nationalisation.
To argue that any one of those caused Britain’s relative post-war decline would be as logical or illogical as to argue that the welfare state did. The causes are complex, not singular or bipolar. They involve such measurables as the loss of markets and capital base during the war, and Britain’s post-Imperial role after 1945 as the world’s third largest military power and international policeman. They equally involve such immeasurables as to how far the country felt it needed to strive, having just won the war, and why labour relations, and hence productivity, were so bad. Indeed, to argue that the welfare state should not have been established, or should not have been established yet, is to ignore political reality. A country which had covered large tracts of East Anglia in concrete to launch bomber fleets, and the south coast in Nissen huts to launch the largest invasion the world had ever seen, could hardly turn round to its citizenry and say it was unable to organise a national health service; that it couldn’t house its people; or that it would not invest in education. Furthermore, compared to pre-war levels, the big surge in welfare state spending started in the late 1950s, not in the immediate post-war period which Barnett rightly identifies as one of the critical periods when Britain failed to invest in its industrial base. But that begins to jump ahead in the story.
Before we start, a word about definitions is needed. There is no agreement about what constitutes ‘the welfare state’. Even the origin of the phrase is the subject of learned dispute.
It was popularised in Britain in 1941 by an Archbishop of York and only adopted by Clem Attlee in time for the 1950 election. The Oxford English Dictionary used to be a little slow, but the phrase only reached the dictionary’s addenda in 1955 and with a definition we would now use in 1964.
At times its boundaries have been drawn so tightly as to exclude most of the social security budget, limiting it to what the Americans call ‘welfare’: payments to the poor plus what we, in the national accounts, still call ‘welfare foods’. At others, as in Pauline Gregg’s 1967 book The Welfare State, it has been drawn to embrace virtually the whole of the economic and social history of Britain from 1945, including nationalisation, the neo-corporatism of NEDO, and beer and sandwiches at Number Ten – the aspects of Britain as a welfare state that Baroness Thatcher plainly did want to roll back in 1979, and over which she was largely successful.
The phrase also suffers the drawback of being static, as though ‘the welfare state’ were a perfect work, handed down in tablets of stone in 1945, never to be tampered with. Even to use the phrase is to set artificial frames. As an entity it does not exist – it is a collection of services and policies and ideas and taxes, including tax reliefs, whose boundaries expand and contract over time. It can never, at any one moment, be said to have been assembled or dismantled. Beveridge hated the phrase and refused to use it, disliking its ‘Santa Claus’ and ‘brave new world’ connotations.
I would rather not have had to.
For this book it is defined in the strictly limited sense of representing the antonyms to the ‘five giants on the road of reconstruction’ which Beveridge identified, the policies and services created to combat Want, Disease, Ignorance, Squalor and Idleness. Even here, boundary problems proliferate. Is legal aid part of the welfare state or not? Is planning, given that the New Towns clearly were? Is training, given that much of it has always been employer-funded, and yet it is a subject closely linked to education and one in which governments inevitably get involved?
The imperfect solution to these quandaries has been to be deliberately eclectic and to write about what most interests me. This decision extends to the book’s coverage of the mainstream services of health, education, social security, housing, social services, and, in lesser detail, employment policy. Thus it is possible to read The Five Giants and scarcely know that nurses exist or that Commonwealth immigration, which greatly affected the welfare state and was greatly affected by it, took place. The development of family planning – a profoundly controversial subject at the time – rates only a sentence or two. Social work is covered, but sketchily, it being one of those subjects where if you scratch too far below the surface you fall into an extremely large hole. The book distorts by omission. Welfare foods and food subsidies which at times consumed large sums of taxpayers’ money are barely mentioned; nor is the tobacco concession of two shillings and fourpence a week that, up to 1957, went to those pensioners who were prepared to swear that they smoked, in order to compensate them for a hike in tobacco tax in the 1940s. School examinations are only touched on. By no means all changes to benefits or housing subsidies have been charted, and training receives the lightest of looks. The list could go on. The excuse is twofold. First, even in a book this size, not everything can go in. As one former permanent secretary put it: ‘You have to remember that every minister who went through here wanted to leave his or her mark on the system and very few of them failed entirely.’
He was speaking of social security; but his remark could apply to any of the government departments or subjects covered. And second, I had a tale to tell. There is a lot of detail here. But too much detail, too many by-ways and sub-plots, can spoil a story worth telling. The Five Giants, then, is not a book of accounting, or even of analysis, though there is a little of each within it. It is primarily a biography of a subject still very much alive. I hope it proves worth reading.
NICHOLAS TIMMINS
January 1995
PART I (#ulink_179d1039-1a81-5cb6-a09e-0398126362b0)
THE PIPERS AT THE GATE OF DAWN (#ulink_179d1039-1a81-5cb6-a09e-0398126362b0)
CHAPTER 1 (#ulink_ffb366e0-d16a-5d3c-887e-72325d37faf8)
‘Thank you, Sir William’ (#ulink_ffb366e0-d16a-5d3c-887e-72325d37faf8)
In every country it is unfortunate not to be rich; in England it is a horrible misfortune to be poor.
Alexis de Tocqueville, Voyages en Angleterre et en Irlande en 1835
‘They used to tell me I was building a dream …’
E. Y. Harburg, ‘Brother can you spare a dime’, American song of the Great Depression, opening line
At this stage of the war, the main ideas of reconstruction were in their first bloom, but largely, also in a state of suspended animation. Like the sleeping beauty, they awaited the prince’s kiss. In almost every field of reconstruction, Beveridge’s report of December 1942 was to be the decisive breath of life.
Paul Addison, The Road to 1945, p. 171
IN JUNE 1941, Sir William Beveridge was called in by Arthur Greenwood to be offered a job. Greenwood was the Labour Minister for Reconstruction in Britain’s wartime coalition government. Beveridge was an egotistical sixty-two-year-old civil servant who believed his destiny was to organise key parts of Britain’s war effort. He was asked instead to chair an interdepartmental committee on the co-ordination of social insurance. The task hardly sounded inspiring. With tears, not of joy but of bitter disappointment, in his eyes, he accepted.
It was the strangest of starts to one of the greatest of adventures – the founding of Britain’s modern welfare state.
Beveridge’s reaction was perhaps not surprising, for he was no ordinary civil servant. He was already well known as a radio broadcaster, academic, public servant and newspaper columnist; a man with more careers behind him than most ever enjoy. He was also by any standard, despite his detractors (of whom there were plenty), a member of the Great and the Good, at a time when such a class was perhaps more easily defined than at the start of the twenty-first century.
Born the son of a British judge in India in 1879 into a house staffed by twenty-six servants, he was schooled at Charterhouse. At Oxford he read mathematics and classics before, in 1903 at the age of twenty-four, he became in effect an Edwardian social worker and researcher at Toynbee Hall, the university foundation for the poor in the East End. It was there that ‘he learned the meaning of poverty and saw the consequences of unemployment’.
The impoverishment of this part of London was to affect others in the tale of Britain’s welfare state, including Clement Attlee and Sir Keith Joseph, even if the conclusions each was to draw from the experience were to be rather different.
At Balliol, Beveridge recalled, the Master, Edward Caird, used to urge his charges ‘to go and discover why, with so much wealth in Britain, there continues to be so much poverty and how poverty can be cured’.
Oxford and Toynbee Hall triggered in Beveridge a lifelong interest in unemployment and broader social questions, turning the young man into a social reformer, but one whose academic training convinced him that policy should be based on exhaustive research and detailed analysis. In his autobiography, Beveridge characterised his own progress at the time as being from ‘Oxford to Whitechapel, Whitechapel to Fleet Street, Fleet Street to Whitehall’.
On the way, however, there had been a visit early in 1907 to Germany, where he had studied the systems of compulsory social insurance for pensions and sickness, though not yet for unemployment, which Bismarck had introduced in the 1890s. It was an important and fitting lesson, for Bismarck’s is the only name to rank above Beveridge’s as a welfare state designer, although of a rather different model.
Late in 1905 the twenty-six-year-old Beveridge, on a recommendation from Caird, was installed as a leader writer at the Tory Morning Post, a newspaper which eventually merged with the Daily Telegraph. There he was given licence to write on social policy and advocate labour exchanges and unemployment insurance, drawing on the forms of social insurance he saw in Germany. That work brought him to the attention of the thirty-three-year-old Winston Churchill, who four years earlier had crossed the floor of the Commons from the Conservative to the Liberal benches. In July 1908, Churchill brought Beveridge into the Board of Trade as a fulltime civil servant. Over the next three years, Beveridge played a crucial role in the creation of a national network of labour exchanges of which he became the first director; and then in the formation of the world’s first, if initially highly limited, statutory insurance scheme against unemployment. The measure was introduced in 1911 by David Lloyd George and by Churchill, who by 1906 had become so imbued with the cause of social reform that he declared Liberalism to be ‘the cause of the left-out millions’.
In government service, Beveridge had seen Lloyd George as Chancellor introduce the first state pensions, dubbed by their grateful recipients ‘the Lord George’ (because only a Lord could afford to be so generous), and had seen the spectacular row over the 1909 ‘People’s Budget’ which raised the money to pay for them. The pensions, Lloyd George declared, lifted ‘the shadow of the workhouse from the homes of the poor’. Churchill, more temperately, declared of the first relatively meagre means-tested payments: ‘We have not pretended to carry the toiler on to dry land. What we have done is to strap a lifebelt about him.’
The first unemployment insurance in 1911 covered only about 2.75 million men, or roughly one in six of the workforce, in industries at high risk of cyclical unemployment such as iron and steel and shipbuilding. It ran out after fifteen weeks. But with it came the first state-backed insurance scheme for health. Lloyd George’s famous ‘Ninepence for Fourpence’ was more comprehensive, covering all male workers earning less than £160 a year. For the worker’s compulsory fourpence (just under 2p) a week, the employer had to add threepence and the state twopence. The scheme was administered by ‘approved societies’ and provided the services of a ‘panel’ family doctor, but no right to hospital care or medicine; with that came sick pay of ten shillings (50p) a week, but no cover for wives and children other than a maternity grant. What marked out the health and unemployment measures of the 1911 National Insurance Act from anything that went before was that both were contributory, compulsory and state organised, with employers, employees and the taxpayer each contributing: the so-called tripartite system. What they were not was comprehensive.
The same Liberal Government had also introduced the first tentative legislation on free school meals (for large families only), school medical inspections, and the first overtly redistributive budget – the ‘People’s Budget’ – to pay for it all. The House of Lords, then still the power-base of the landed aristocracy, was faced by a new supertax and what were, in effect, wealth taxes. They threw out what Lloyd George had declared to be ‘a war budget’ – one ‘for raising money to wage implacable warfare on poverty and squalidness’. He added the hope, which he almost lived to see realised, that ‘before this generation has passed away we shall have advanced a great step towards that good time when poverty and wretchedness and human degradation which always follow in its camp will be as remote to the people of this country as the wolves which once infested its forests’.
The result, after a long battle, was the 1911 Parliament Act which removed for ever the right of the Lords to delay financial legislation.
Beveridge was thus not only a close Whitehall observer but a key player in the formation of what has been dubbed the ‘ambulance state’ – the lifebelt precursor to the modern welfare state which thirty years on he was to do so much to help create.
With the arrival of the First World War, Beveridge moved in to the Ministry of Munitions, where he was involved in deeply controversial moves to mobilise manpower and where he worked directly with Lloyd George. In 1916 he went to the Ministry of Food, becoming one of the chief architects of rationing and price control. He finished his first Whitehall career in 1919 at the age of thirty-nine as the ministry’s Permanent Secretary.
Peace saw him leave the civil service to become director of the London School of Economics, transforming it into a great base for the social sciences. During a spell as Vice Chancellor of London University he commissioned its massive and Teutonic Senate House (the building Hitler earmarked to be his London headquarters). In 1937 he went back to Oxford as Master of University College. His academic appointments did not, however, to use the title of his autobiography, remove him entirely from power and influence. In 1934 he was appointed chairman of the Unemployment Insurance Statutory Committee, whose job it was to keep the insurance fund solvent, and in 1936 he was brought back to Whitehall to help devise the rationing that operated from 1940. In 1941, when Greenwood called him in, Beveridge had a knowledge of the origins and scope of social services in Britain that was probably unequalled.
He was connected everywhere. R. H. Tawney, the great Christian socialist thinker, was his brother-in-law and friend. He knew well Sidney and Beatrice Webb, founders of the Fabian Society, who in fact had introduced him to Churchill. (Churchill’s aside,’I refuse to be shut up in a soup kitchen with Mrs Beatrice Webb’,
appears to have been no barrier to the appointment.) It was in fact Mrs Webb who had first proposed a free health service for all in her minority report of the Poor Law inquiry of 1909. Clement Attlee and Hugh Dalton, two men to whom would fall the job of finding the cash for Beveridge’s plan, had been lecturers on his staff at the LSE. Dalton was to be Attlee’s first Chancellor of the Exchequer in 1945. As well as having worked with Churchill, Beveridge was a friend of John Maynard Keynes, whose new economics were to make the welfare state possible, and he knew Seebohm Rowntree, whose landmark studies of poverty in York in 1899 had first helped drive the 1906 Liberal Government into its reforming zeal and whose follow-up study in 1936 was to influence Beveridge’s own report. In a line to the future, his research assistant at Oxford was a bright young economist called Harold Wilson.
But Beveridge was not an easy man. José Harris, in her biography, is reduced to summing him up as ‘rather baffling’. To some, she says:
he seemed wise and loveable, to others overbearing and vain. To some he was a man of dazzling intellect, to others a tedious bore. To some he was endlessly generous and sympathetic, to others harsh and self-centred to the point of complete insensitivity. By some he was seen as a humane, radical and visionary reformer, by some as a dangerous bureaucrat, by some as a sentimental idealist with his ‘head in the clouds and his feet in the pond’. He has been described to me personally as ‘a man who wouldn’t give a penny to a blind beggar’ and as ‘one of the kindest men who ever walked the earth’.
Others have been terser and harsher. Angus Calder in The People’s War describes him as ‘the outstanding combination of public servant and social scientist’, but adds: ‘He was also vain, humourless and tactless.’
He tried to run the LSE as an autocracy, inducing a mutiny by the staff in favour of a constitution. Lionel Robbins, a young lecturer at the school who would later produce the Robbins report of 1963 which initiated the great post-war expansion of British universities, once said: ‘I doubt if it ever occurred to him to regard the great men of those days as his equals, let alone, what some of them certainly were from the academic point of view, his superiors.’
Arrogance, brilliance and a belief in statistical evidence did not prevent him from espousing unlikely ideas. Harold Wilson, when Prime Minister, would recall having to talk him out of a firm belief that fluctuations in unemployment were linked to the price of wheat which was in turn affected by a sun-spot cycle.
The weather, it seemed for a time, was all that there was to blame. He drove himself and others hard. Wilson, staying with him in his pre-war days at Oxford, recalls him rising at six to take an icy bath, following it with a couple of hours’ work before breakfast. If he was far from easy either to know or to work with, he was also no more consistent than the rest of us. Over his lifetime his views varied from strong support for the free market to a dirigiste view of the advantages of central control and planning during the First and Second World Wars, via a distinct if intermittent sympathy with Fabian socialism. At times he favoured generous social welfare, at others he believed ‘the whip of starvation’ was a necessary precondition for economic advance.
After his report was published he was to become briefly a Liberal MP, and it is as a liberal and indeed Liberal document that his great work is best read: an attempt to bridge the desire for security and an end to poverty on one bank with encouragement for individuals to stand on their own two feet on the other.
A mere four years before his clarion call for full employment, social security from cradle to grave, a national health service, and a war against ignorance and squalor, he had been for two long walks with Beatrice Webb, then in her eighties, over the downs near her Hampshire home. Her diary records:
His conclusion is that the major if not the only remedy for unemployment is lower wages … if this does not happen the capitalist will take his money and his brains to other countries where labour is cheap … he admitted almost defiantly that he was not personally concerned with the condition of the common people.
If his desire for reform appeared to have waned, the war was to change that. But its arrival in 1939 left him bitter and frustrated. His talent and past experience, he felt, demanded a role in government. He bombarded government departments with offers of assistance, stringent criticism and unsolicited advice. He complained bitterly that ‘the present crew have no conception at all of how to plan for war.’ Along with other veterans of First World War administration, he gravitated to Keynes’s Bloomsbury house during the autumn and winter of 1939. The ‘ancient warhorses’, to use José Harris’s phrase, denounced Chamberlain’s incompetence to each other and devised alternative strategies.
When Churchill became Prime Minister in May 1940, Beveridge wrote to remind the old bulldog of their ‘old association’ and to offer his talents. He followed up with letters to Attlee, Ernest Bevin and Herbert Morrison, the key Labour ministers in the newly formed coalition government. None wanted the awkward and arrogant ex-Permanent Secretary around. Bevin, whom Beveridge was later to feel had betrayed him, did offer him charge of a new welfare department in the Ministry of Labour. ‘I didn’t feel that welfare was up my street,’ Beveridge said. ‘… organisation of manpower was my goal.’
One by one, Keynes and the others were absorbed into Whitehall as part of the flood of academics whose presence was to do so much to help win the war against Nazi Germany. But Beveridge, who hardly helped his case by the style in which he proffered advice and sought work, remained outside. Finally, in July 1940, Bevin asked him to carry out a brief survey – in a firmly non-executive capacity – of wartime manpower requirements. At last Beveridge was doing the work he wanted to do. The survey done, in December he again became a full-time civil servant as under-secretary for the military service department at the Ministry of Labour. There he drew up the list of reserved occupations exempt from call-up; but he continued to demand from Bevin an ever larger role in running manpower.
The two, however, did not get on. Beveridge, condemned by so many as autocratic, in turn applied the same adjective to Bevin’s mountainous personality. The bull-necked ‘tsar’ of the Transport and General Workers Union, in Kenneth Morgan’s memorable epithet,
had been brought in from the general secretaryship of the union to provide the sound base for labour relations in wartime that the First World War had so notably lacked. Bevin saw his remit coming firmly from ‘my people’. And while he used a range of Beveridge’s ideas during the months they worked together, it seems plain he did not trust with any executive responsibility a man he almost certainly associated with the coercive and at times damaging manpower policies that Beveridge had helped draw up in 1914–18.
At the beginning of June 1941 someone else got the job Beveridge wanted: Godfrey Ince, who went on to become the department’s permanent secretary, was made Director General of Manpower. Beveridge was taken off administrative work and put in charge of a study on the way skilled manpower was being deployed into the forces. Four months before, however, in February, the Trades Union Congress had been to government to lobby about the hopelessly untidy mess of sickness and disability schemes by which workers were then covered. An inter-departmental committee was proposed to Cabinet in April. Bevin, having initially opposed the idea, suddenly saw it as a way of getting rid of someone whom he had clearly come to see as a pain in the neck.
It was Greenwood who formally made the job offer, but Beveridge recorded twenty years later that it was Bevin who ‘pushed me as chairman of the Social Insurance Committee by way of parting with me … my removal from the Ministry of Labour … was “a kicking upstairs’”
away from the work he believed he was cut out to do. Hence the tears that started to his eyes.
Indeed, so disillusioned was Beveridge that he appears for some months to have done little or nothing about his new task. His appointment, announced on 10 June 1941, attracted much parliamentary and press comment. But Beveridge spent the next months touring military bases and finishing his study on how the army was wasting skilled engineers. His reaction is perhaps understandable. The terms of reference – ‘to undertake, with special reference to the inter-relation of the schemes, a survey of the existing national schemes of social insurance and allied services, including workmen’s compensation, and to make recommendations’ – scarcely sounded like the dawn of a revolution or the making of a place in history.
While Home Office and Ministry of Health officials had higher hopes, the Treasury saw the committee merely as ‘a tidying up operation’, one of its senior officials declaring that the terms of reference had been made ‘as harmless as they can be made’.
Bevin’s parting shot, according to Beveridge, was that the inquiry ‘should essentially be official in character, dealing with administrative issues rather than with issues of policy’.
Arthur Greenwood, however, saw it as something a lot bigger and in an early example of spin-doctoring gave briefings to that effect, inspiring Fleet Street so to write it up.
The day after the committee was formally announced several newspapers reported in remarkably similar terms that it would be ‘the widest and most comprehensive investigation into social conditions … with the object of establishing economic and social security for every one on an equitable basis’.
Certainly something, if only at a tidying-up level, needed to be done. If, forty years on in 1984, Norman Fowler concurred in his civil servants’ judgement that the social security ship needed to be hauled in ‘to have the barnacles scraped off it’,
in 1941 the social security system – if it could even be called that – was a vessel full of holes and rotten planks through which it was only too easy to fall. It was showing all the strains and anomalies that piecemeal growth of voluntary and state provision over the previous forty-five years had produced since the Workmen’s Compensation Act of 1897.
Seven different government departments were directly or indirectly involved in providing cash benefits of one kind or another. To modern eyes, some of these seem mighty strange: Customs and Excise, for example, administered ‘the Lord George’, the first state pension. But by 1941 there were three different types of pension, and three different types of unemployment benefit, all operating under different rules. War victims and their dependants were helped by the Ministry of Pensions, but the civilian disabled, widows and orphans were the responsibility of the Ministry of Health. The Home Office had its finger in the pie through running workmen’s compensation in some industries. For many, however, cover for industrial injuries was provided by for-profit insurers who scandalously tried to buy off claimants with inadequate lump sums when disaster struck. ‘Indoor servants’ in private houses were excluded from the state unemployment insurance scheme; those in ‘establishments and institutions’ were included. Health insurance now provided panel doctors for those in work who earned less than £420 a year, but that still covered less than half the population. Wives and children remained excluded. Sickness benefit was provided through non-profit-making ‘approved societies’ whose benefits varied as widely as their performance. A good one might provide a nursing home, dental treatment and spectacles, a poor one only the minimum sickness benefit guaranteed by the state. And beneath and alongside all this, local authority committees, the inheritors of the Elizabethan Poor Law, paid means-tested benefits to those in need.
The result was ‘different rates of benefit involving different contribution conditions and with meaningless distinctions between persons of different ages’ as Beveridge was to say in his report.
There he picked out just one example of the many he said could be found. A married man with two children, he recorded, received 38s. od. (£1.90) a week if unemployed. If he then became sick and unavailable for work, his benefit more than halved to 18s. od. An unemployed youth of seventeen, by contrast, received 9s. od.; but 12s. od. if he was sick. It was this considerable mess that Beveridge was set to sort out. He did so in the grandest of styles, and on a scale that no one who appointed him could possibly have envisaged.
The first hint of what he was planning, and that he had no intention of just tidying a few things up, came in July when he produced a paper for the committee headed ‘Social Insurance – General Considerations’. ‘The time has now come,’ he declared, ‘to consider social insurance as a whole, as a contribution to a better new world after the war. How would one plan social insurance now if one had a clear field … without being hampered by vested interests of any kind? The first step is to outline the ideal scheme, the next step is to consider the practical possibilities of realising the ideal, and then the changes of existing machinery that would be required.’
Beveridge aside, the committee was staffed entirely by officials. There was a civil servant apiece from each of the seven departments involved in social insurance. In addition, there was the inevitable official from the Treasury, one from the Ministry of Reconstruction, the Government Actuary, and a representative each from the Assistance Board and the Friendly Societies. They spent the summer drawing up background papers and inviting evidence, while Beveridge’s attention was elsewhere.
In all, 127 pieces of written evidence were to be received, and more than 50 private evidence sessions held with witnesses. But only one piece of written evidence had arrived by December 1941 when Beveridge circulated a paper entitled ‘Heads of a Scheme’ which contained the essence of the final report a year later. The paper proposed unifying the existing schemes, paying flat rate benefits at a rate high enough to provide ‘subsistence’ – that is, sufficient to live on, free of poverty – while the whole should be financed by contributions divided between the insured, employers and the state. As Point One, the paper opened with the key statement which was to stretch his terms of reference up to and beyond their limit and which was to underpin the whole report.
1 No satisfactory scheme for social security can be devised [without the] following assumptions.
A A national health service for prevention and comprehensive treatment available to all members of the community.
B Universal children’s allowances for all children up to 14 or if in full-time education up to 16.
C Full use of powers of the state to maintain employment and to reduce unemployment to seasonal, cyclical and interval unemployment, that is to say to unemployment suitable for treatment by cash allowances.
So there it was. The nation needed a national health service; tax-funded allowances for children; and full employment to make social security work.
The reliance on insurance – though insurance backed by the state, so-called ‘social’, as opposed to private, insurance – reflected what already existed even if less than half the population was covered in 1941. It also reflected what Beveridge had helped design for the unemployed in the years after 1908 and his own long-held beliefs. In 1924 he had written a tract for the Liberals advocating ‘insurance for all and for everything’. Always opposed to means-tests, he had like many of his compatriots become affronted by both their enormous expansion and the harshness of the particular tests used during the Great Depression of the 1930s. He wanted to see benefits paid as of right. One consequence of the insurance principle, the paper states, is that ‘no means test of any kind can be applied to the benefits of the Scheme’.
But while Beveridge believed that everything that could be insured for should be, he had also come to see that benefits for children could not be run that way. To combat poverty and at the same time provide work incentives, it was essential that children’s benefits be paid at the same rate whether the parent was in or out of work. For if only means-tested help was given for children, then the low-paid with large families would be better off out of work than working – unless benefit rates were to be set dangerously low. Equally, family allowances would also help to prevent poverty among the low-paid. Rowntree’s work had shown that low wages in large families were the primary cause of poverty in 1899 and even his 1936 study showed they still played a significant role. Thus, Beveridge concluded, children’s allowances had to be tax funded, not insurance based. He had additional motives for backing family allowances. The war had seen the cancellation of the 1941 census, and on the information available Beveridge believed erroneously that the birth-rate was still declining, as it had been in the 1930s. It was a trend he believed required to be reversed in the national interest.
‘Once this memorandum had been circulated,’ Beveridge declared blithely in his autobiography, ‘the committee had their objectives settled for them and discussion was reduced to consideration of the means of attaining that objective.’
They had indeed, and there was to be no little annoyance among the committee members at Beveridge’s general unwillingness thereafter to listen to their views, other than on technical matters. But point one of the memo had another instant effect: it alerted the government to the scale of what he had in mind. Alarm bells started to ring. Beveridge was asked to withdraw his three assumptions, and refused. On 17 January 1942, Greenwood wrote to him after talking to the Chancellor, Sir Kingsley Wood, declaring that ‘in view of the issues of high policy which will arise’ the departmental representatives should in future be regarded merely as ‘advisers and assessors’. The report would be signed by Beveridge alone and ‘be your own report’. The civil servants ‘will not be associated in any way with the views and recommendations on questions of policy which it contains’.
In other words, the government was damned if it was going to let itself be committed.
Work on the committee speeded up through 1942 as witnesses were called and evidence taken. But the credit (or reproach: some see the report and its aftermath as a key cause of Britain’s post-war decline) for the report’s popular impact may need to go as much to Janet Mair as to Beveridge himself.
Jessy, as Janet Mair was known, was the wife of David Mair, a somewhat austere mathematician and civil servant who was Beveridge’s cousin. She and Sir William had become close before the First World War, Mrs Mair sharing, in Jose Harris’s words, Beveridge’s ‘dreams and ambitions’. A powerful personality in her own right, she and Beveridge were to marry a fortnight after the report was published. They had, however, already scandalised the ‘lady censors of the University world’ when Mrs Mair moved into the Master’s lodgings at University College at the outbreak of war.
Jessy also had, in Peter Baldwin’s words, ‘a knack of putting in the baldest terms the ideas that lay more implicitly in her husband’s writings’.
During the crucial stages of the report’s compilation in the spring and summer of 1942, Jessy was staying with relatives in Scotland. But it was she, according to Jose Harris, who ‘greatly encouraged’ Beveridge not just to rationalise the existing insurance system but to lay down long-term goals in many areas of social policy.
There is no evidence to suggest that Mrs Mair was responsible for any of Beveridge’s substantive proposals. But much of his report was drafted after weekends with her in Edinburgh, and it was she who urged him to imbue his proposals with a ‘Cromwellian spirit’ and messianic tone. ‘How I hope you are going to be able to preach against all gangsters,’ she wrote, ‘who for their mutual gain support one another in upholding all the rest. For that is really what is happening in England … the whole object of their spider web of interlocked big banks and big businessmen [is] a frantic effort to maintain their own caste’. And she urged Beveridge to concentrate on three main policy objectives – ‘prevention rather than cure’, ‘education of those not yet accustomed to clean careful ways of life’, and ‘plotting the future as a gradual millennium taking step after step, but not flinching on ultimate goals.’
Beveridge of course had a track record as journalist and broadcaster, not just as an academic and administrator, and could express ideas clearly. He was fond of lists: ‘ten lions on the path’, ‘six principles’, ‘three assumptions’, as well as his ‘five giants’. But nothing else he wrote – certainly not his Full Employment in a Free Society whose preparation two years later was to worry both Churchill and his Chancellor – has the same rich blend of Cromwellian and Bunyanesque prose to be found in the drably titled Social Insurance and Allied Services.
When the report was published on 1 December 1942 its reception was ecstatic. On the night before there were queues to buy it outside HMSO’s London headquarters in Kingsway. The first 60,000 copies of the full report at 2S. od. (lop) a time were rapidly sold out. Sales topped 100,000 within a month and more than 200,000 by the end of 1944.
It is hard to believe that most of those who bought it made it through to the end. Much of this 200,000-word excursion through technical exposition and complex appendices is heavy going. Even Beveridge’s own section is hard work, and the report may well rank alongside Stephen Hawking’s A Brief History of Time as one of the most bought but least read books ever published in Britain. What made its reputation and provided its impact was the twenty-page introduction and the concluding twenty-page summary, separately published in a cut-down version at 3d. Combined with the full report this took sales above 600,000:
in HMSO folklore, nothing is said to have outsold it until the Denning report on the Profumo scandal twenty years later.
And that introduction and summary were couched in terms unlike those of any government report before or since. Beveridge declared that he had used three guiding principles. First that ‘a revolutionary moment in the world’s history is a time for revolutions, not patching’. When the war was ‘abolishing landmarks of every kind’, he declared, now was the time to use ‘experience in a clear field’.
Second, his plan for security of income – social security – was principally an attack upon Want. ‘But,’ he went on, hammering the point home with mighty capital letters, ‘Want is only one of five giants on the road of reconstruction, and in some ways the easiest to attack. The others are Disease, Ignorance, Squalor and Idleness.’ Third, he stressed that social security must be achieved by co-operation between the state and the individual. ‘The State should offer security for service and contribution. The State in organising security should not stifle incentive, opportunity, responsibility; in establishing a national minimum, it should leave room and encouragement for voluntary action by each individual to provide more than the minimum for himself and his family.’ But that minimum should be given ‘as of right and without means test, so that individuals may build freely upon it’.
Taking social insurance as the base, he wrote in boldly the three assumptions needed to make it work: family allowances, a national health service, and ‘maintenance of employment’. In the conclusion of the main report, he expanded the themes in Bunyanesque terms. The plan, he said, ‘is not one for giving to everybody something for nothing and without trouble’. It involved ‘contributions in return for benefits’. War offered the chance of real change, for ‘the purpose of victory is to live in a better world than the old world’. And, most importantly, he stated that in itself social security was ‘a wholly inadequate aim’; it could only be part of a general programme.
It is one part only of an attack upon five giant evils: upon the physical Want with which it is directly concerned, upon Disease which often causes that Want and brings many other troubles in its train, upon Ignorance which no democracy can afford among its citizens, upon Squalor … and upon the Idleness which destroys wealth and corrupts men.
In that one ringing paragraph Beveridge encapsulated much of post-war aspiration. By seeking not only freedom from want, but a national health service, improved education, full employment and an attack upon Squalor (which Beveridge saw as being as much about town and industrial planning as about housing), he gave the vital kick to the five giant programmes that formed the core of the post-war welfare state: social security, health, education, housing, and a policy of full employment, the giants constructed to combat Beveridge’s five giant evils.
The report in practice does not mention education apart from its trumpet call for the attack on Ignorance. Nor does it deal in any detail with housing save for his struggle over how to handle rents within social security. Even a Beveridge could not stretch his terms of reference that far. The sections on how the health service would work are undisguisedly tentative. Beveridge himself stressed the need for further study. But the necessity of comprehensive health care ‘without a charge on treatment at any point’
is repeatedly driven home – not just to prevent poverty, but on economic grounds, to help keep people working, and quite simply on moral ones: ‘restoration of a sick person to health,’ he states, ‘is a duty of the State and the sick person, prior to any other consideration’.
If the report’s impact at home was spectacular, it was also pushed heavily overseas by an initially enthusiastic Ministry of Information. Details of ‘The Beveridge Plan’ were broadcast by the BBC from dawn on 1 December in twenty-two languages. Copies were circulated to the troops, and sent to the United States where the Treasury made a $5000 profit on sales.
More copies were dropped into France and other parts of Nazi-occupied Europe where they caused concern at the highest level. After the war, two papers marked ‘secret’ and providing detailed commentary on Beveridge’s plan were found in Hitler’s bunker. One ordered that publicity should be avoided, but if mentioned the report should be used as ‘obvious proof that our enemies are taking over national-socialistic ideas’. The other provided an official assessment of the plans as ‘no “botch-up” … a consistent system … of remarkable simplicity … superior to the current German social insurance in almost all points’.
Overnight Beveridge became a national hero – in Paul Addison’s phrase, ‘The People’s William’.
It was ‘like riding an elephant through a cheering mob’, Beveridge said.
Halls were packed to hear him expound his proposals in the rather prissy Edwardian tones that marked his speech. He broadcast and wrote about it endlessly, batting down critics who said his proposals would lead to feather-bedding and moral ruin. When an American declared that if Beveridge had had his way in the days of Good Queen Bess there would have been no Drake, Hawkins or Raleigh, he replied with a touch of the wit that his critics would deny him: ‘Adventure came not from the half starved, but from those who were well fed enough to feel ambition.’
A little seventeenth-century evangelical language, however, in a boringly titled and dense government document, even when propounded by a well-known Oxford don, is not enough to explain the report’s impact. To understand that we must go back, through the influence of the Second World War, to the Great Depression of the 1930s, the outcome of the Great War, and even beyond.
The Boer War (1899–1902) had provided one part of the stimulus for the great reforming programme of the Liberal Government of 1906 when it was discovered that almost half those volunteering to fight in South Africa were medically unfit. The First World War exposed the same problems even more brutally and on a much larger scale. One survey showed that one conscript in three was not fit enough to join the forces.
Only a third were judged Grade One. By the time of the Second World War, seven out of ten were put in the top grade.
The mud and carnage of Flanders and the Somme, the days of ‘lions led by donkeys’, also changed British society for good. The Victorian era and the gilded summers of its Edwardian afterglow, in which hideous poverty had come to exist alongside abundant wealth, were to be swept away for ever. Lloyd George, in language Beveridge would have recognised, declared in 1917:
The present war … presents an opportunity for reconstruction of industrial and economic conditions of this country such as has never been presented in the life of, probably, the world. The whole state of society is more or less molten and you can stamp upon that molten mass almost anything so long as you do it with firmness and determination … the country will be prepared for bigger things immediately after the war … and unless the opportunity is seized immediately after the war I believe it will pass away.
The Welsh wizard found poverty abhorrent and the agenda from which he was working bore striking similarities to Beveridge’s almost thirty years later: unemployment insurance, health, housing and education, and a desire to end the 1834 Poor Law which had established the workhouses and the principle of ‘less eligibility’. In order to provide a vigorous incentive for self-help, the 1834 Act required that Poor Relief be set at a standard below the earnings that an industrious labourer ‘of the lowest class’ could achieve, regardless of the impact that policy had. The view then was strong, and its echoes can still be heard today, that poverty was the fault of the individual and should be punished. As the Royal Commission whose report produced the Act put it: ‘Every penny bestowed, that tends to render the condition of the pauper more eligible than that of the independent labourer, is a bounty on indolence and vice … nothing is necessary to arrest the progress of pauperism, except that all who receive relief from the parish should work for the parish exclusively, as hard and for less wages than independent labourers work for individual employers.’
Individuals would thus be forced, as far as possible, to stand on their own two feet. There was no intent here to prevent poverty, only to avert starvation.
Despite Lloyd George’s words, in 1917 too little was done too late. But before the grand vision collapsed, there was a brief illusion that all was well. The rapid removal of wartime controls brought a short but spectacular boom, producing the certain assumption, in the phrase of the day, that it was ‘business as usual’. Significant strides were made in education and the expansion of council housing. Unemployment insurance, limited to a few high-risk industries in 1911, was further extended in 1920 to cover around twelve million workers, roughly three-quarters of the workforce.
But Britain’s share of world trade proved to have contracted sharply during the war. The economy swung rapidly into recession. In 1922 the ‘Geddes axe’, named after Sir Eric Geddes who chaired the economic committee, introduced swingeing public spending cuts. These curtailed plans for educational expansion and left Lloyd George’s euphoric promise of ‘Homes Fit for Heroes’ with a desperately hollow ring. As the new unemployment insurance came in, the total number of unemployed increased in the summer of 1920 to more than a million. Between then and the summer of 1940 it never fell below that mark and at times rose above three million.
The new experience of mass unemployment dominated social policy for the next twenty years, for it rapidly destroyed the insurance basis of the 1911 and 1920 Acts. Large numbers either exhausted their right to benefit, or were thrown out of work without having earned it in the first place. Fearing large-scale unrest and the Bolshevism which had just produced the Russian revolution, the government responded with a series of ad hoc measures starting in 1919 with Christopher Addison’s ‘out-of-work-donation’ for the unemployed: the words ‘the dole’ entered the vocabulary. The payment was not means-tested, and semi-inadvertently it established the principle that the state had a commitment to maintain all the unemployed, not just those whose insurance payments were up to date. But at the same time it undermined the insurance principle.
Worse was to come. In 1929 the American stock market collapsed, bringing in its wake the deepest recession the modern world has known. Its length was not matched in Britain until the early 1990s when the very welfare state created in reaction to the 1930s helped mitigate the effects. In the early 1930s, Keynes had yet to ride to the rescue on the white charger of his new economics. He was still developing his theories: indeed, the jibe at the time (which with the name changed can still be used today) was that ‘where five economists are gathered together there will be six opinions and two of them will be held by Keynes’. Cutting the soaring expenditure on the unemployed to defend the gold standard became the sole touchstone of British economic policy. It smashed the Labour Government in 1931. Ramsay MacDonald was left as Prime Minister of a new National Government, but effectively a prisoner of the Tories, to carry out the blood-letting of ‘severe surgical operations’ on Britain’s economy.
Insurance benefits were cut, and those who had exhausted their benefit or lacked sufficient contributions to qualify were transferred to the Public Assistance Committees of local authorities, who in 1929 had replaced the Poor Law guardians. The committees were empowered to enforce a stringent household means-test. As Derek Fraser put it:
The means test, like the workhouse before it, was destined to leave an indelible mark on popular culture. The means test of the early 1930s was a family one which involved a household assessment of need, taking into account the income of all its members, be it the few shillings pension of the aged parent, or the coppers earned on the son’s paper round. Its inquisitorial tone produced resentment and frustration among applicants and heightened family tension, already aggravated by the loss of patriarchal dignity and discipline consequent upon unemployment itself.
In effect it put the unemployed ‘right back on the Poor Law (though not in name) which, locally administered, exhibited wide regional variations in scale and conditions of benefit. Injustice only added to the demoralisation.’
A father whose son or daughter found work could see his benefit ended. George Orwell recorded it as ‘an encouragement to tittle-tattle and the informer’. A word from a jealous neighbour spotting a new coat or pair of shoes could bring the means-test men round demanding to know where the money had come from. Its effects became seared into the national soul.
In 1934 responsibility for the means-test and its attendant benefits was removed from local authorities and placed in the hands of a national Unemployment Assistance Board which at least applied rather more consistent rules. Freed of their direct financial responsibility for the unemployed, local authorities found in the late 1930s that their Poor Law responsibilities for children, the sick, the elderly, widows and deserted wives began, in Fraser’s words, ‘to mellow’. A 1937 report from Political and Economic Planning, an early independent research organisation and think-tank, records them slowly evolving into something faintly recognisable as the social services departments to come: ‘Instead of the grim Poor Law of the nineteenth century with its rigorous insistence on the principle of “less eligibility” and the workhouse test we have a liberal and constructive service supplementing the other social services, filling in gaps and dealing with human need in the round in a way which no specialist service could ever be expected to do.’
Such a picture, according to Sir George Godber, then a medical officer with the Ministry of Health, remained very much that of the best. ‘Some of the services, particularly the accommodation for “wayfarers”, could be grim indeed when I was inspecting them in 1939.’
Unemployment, as Fraser says, had become ‘the central issue of the inter-war years. Its malignant canker had poisoned millions of homes; it had blighted whole industrial regions; it had disinherited a generation; and it had laid low an elected Government.’ The Pathé News images of the Jarrow Crusade of 1936 are the most potent symbol of the times. Two hundred men, selected from hundreds of volunteers among the 8000 made redundant after the Tyne shipyard and its linked industries closed, marched to London and on Parliament led by their MP ‘Red Ellen’ Wilkinson (whom we will meet again). Their cheerful discipline washed through with despair still comes through the flickering black and white film. In the short term they received and achieved nothing – indeed, on their return they learned their dole had been cut; as the Unemployment Assistance Board explained, while on the march they would not have been available for work had any turned up.
Yet unemployment was far from touching everybody equally. While it reached 67 per cent in Jarrow, it was a mere 3 per cent in High Wycombe, and 7 per cent in London’s Deptford.
Britain’s first great twentieth-century experience of mass unemployment was as regional as its return was to be in the recession of the early to mid-1980s. As in the eighties – though not the nineties – it was heavy engineering, coal, steel, and shipbuilding that were razed by foreign competition. The twenties and thirties added to that the dramatic decline of King Cotton in Lancashire and the slower decline of Yorkshire wool: the world was discovering that it wanted fewer of the ‘millions of yards of calico and thousands of steam engines’
that Britain had previously provided. So it was chiefly the north of England, Scotland and Wales that suffered.
None the less, other parts of the country and the middle classes were not entirely immune. In 1934 it was estimated that 300,000 clerks, office managers, engineers, chemists and the like were out of work, white-collar workers whose earnings were too high to qualify for the state insurance schemes and who thus did not appear in the general statistics.
In 1936, when the worst was over, Fowey in Cornwall, Ross on Wye, and Keswick in the Lake District featured alongside Wigan, Hartlepool and Glasgow as priority places for official contracts because their adult unemployment had run at above 25 per cent in the previous year. But it remains true that even at the absolute nadir of the slump, more than three-quarters of the workforce was still working. And overall – again a pre-echo of the eighties – those in work enjoyed real, rising standards of living over the two decades before World War II. In fact the thirties was to be the last decade for half a century when it could fairly be said that the rich got richer while the poor got poorer.
The 1930s not only saw George Orwell chronicle the plight of lower England in The Road to Wigan Pier, it also saw J. B. Priestley’s English Journey. The novelist and critic travelled from Southampton to Newcastle by way of most points in between and back to London. He found three Englands. There was ‘Old England’ of the cathedrals, the colleges and the Cotswolds, ‘a luxury country’ that ‘has long since ceased to earn its own living’. Then there was the nineteenth-century England: ‘the industrial England of coal, iron, steel, cotton, wool, railways’ with ‘thousands of rows of little houses all alike’, ‘detached villas with monkey trees’, ‘mill chimneys, slums, fried-fish shops’ and ‘good-class draper’s and confectioner’s’ – all existing in ‘a cynically devastated countryside’ itself dotted with ‘sooty dismal little towns and still sootier grim fortress-like cities’. It was an area he described as ‘the larger part of the Midlands and the North’ but ‘existing everywhere’. This England, Priestley judged, ‘is not being added to and has no new life poured into it. To the more fortunate people it was not a bad England at all, very solid and comfortable.’
But this England also contained the England of the dole, one that looked as if it had ‘devoted a hundred years of its life to keeping gigantic sooty pigs. And the people who were choked by the reek of sties did not get the bacon.’
It was this England that also contained Hebburn and Jarrow, its ironworks derelict and its shipyards nearly so when Priestley visited in 1933, three years before the march. He pronounced the town quite simply ‘dead’.
Wherever we went there were men hanging about, not scores of them but hundreds and thousands of them. The whole town looked as if it had entered a perpetual, penniless bleak Sabbath. The men wore the drawn masks of prisoners of war. A stranger from a distant civilization … would have arrived at once at the conclusion that Jarrow had deeply offended some celestial emperor of the island and was now being punished. He would never believe us if we told him that in theory this town was as good as any other and that its inhabitants were not criminals but citizens with votes.
Writing nine years before Beveridge, in an unconscious premonition of things to come and using the same capital letters, Priestley railed: ‘If Germans had been threatening these towns instead of Want, Diseases, Hopelessness, Misery, something would have been done, and done quickly.’
Priestley also found a third England – and not one which appealed much to his fastidious taste. That was ‘the new post [First World] war England … the England of arterial and by-pass roads, of filling stations and factories that look like exhibition buildings, of giant cinemas and dance halls and cafes, bungalows with tiny garages, cocktail bars, Woolworths, motorcoaches, wireless, hiking, factory girls looking like actresses, greyhound racing and dirt tracks, swimming pools, and everything given away for cigarettes and coupons.’
It was also, he might have added, the England of the middle-class estates of twenties semis that were just starting to explode into the thirties suburban private house building boom, the England of Beckenham and Bromley and of Metroland, the rise of the clerk and the demise of the servant, the heyday of ribbon development, of the Great West Road, the Art Deco of the Firestone and Hoover factories, the days of ‘glass and white tiles and chromium plate’.
This England was a country of which a large section had prospered despite the celestial emperor’s view of Jarrow.
But all three of these Englands, along with the rest of the United Kingdom, went again to war in 1939. And it was war which merged them closer into one.
As if to underline that not all social progress halted in the 1930s, the school leaving age had been due to rise to from fourteen to fifteen on 1 September 1939. But in the early hours of that morning German tanks rolled into Poland and the mass evacuation of schoolchildren and mothers from Britain’s cities, planned since the time of Munich, began.
In three days – war was finally declared on Sunday the third – an incredible one and a half million people were decanted into the countryside, including 827,000 schoolchildren, 524,000 mothers and their children under school age, and 103,000 teachers and helpers.
It was the start of the massive movements of population that were to stretch and bend the old class system as never before, one of the effects of a war which impinged on the civilian population in a way that 1914–18, for all its carnage on foreign fields, never did. While it slew the flower of a generation, from whole families of yeomen recorded on village war memorials to the gilded contemporaries of Robert Graves, the First World War did not throw people together as the Second did. It did not force one half of England to see how the other half lived. The Second World War, Paul Addison says, in The Road to 1945:
hurled together people of different social backgrounds in a series of massive upheavals caused by bombing, conscription, and the migration of workers to new centres of war industry. Over the war as a whole there were 60 million changes of address in a civilian population of about 38 million, while more than five million men and women were drawn into the three armed services. There were one and a half millions in the Home Guard, and about the same number in the various Civil Defence services, by the end of 1940. More than one and a quarter million evacuees, over half of them children, were billeted on families in the reception areas in February 1941. The number of women working in industry increased by 1,800,000 between 1939 and 1943. In air-raid shelters, air raid warden’s posts, Home Guard units, and overcrowded trains where soldiers barged into first class compartments, class barriers could no longer be sustained. ‘It is quite common now,’ Lord Marley was reported as saying in 1941, ‘to see Englishmen speaking to each other in public, although they have never been formally introduced.’
Many of the first evacuees soon returned home. But the impact of incomers who were mostly (though not entirely) from poorer inner city areas on the more comfortable countryside was remarkable. Ben Wicks in No Time to Wave Goodbye, his remarkable compilation of evacuees’ experiences (he was one himself), records children brought up in the days before mass television who, having watched cows being milked, were convinced they were being offered urine to drink; some who had never slept in a bed and preferred the floor; while Richard Titmuss told of the child who said to his visiting mother: ‘They call this spring, Mum, and they have one down here every year.’
Mabel Louvain Manning took in two boys.
The first morning I was awoken about 6 am by such a noise, it was the boys fighting in bed! One had a bloody nose which had splattered all over the wall. I cleaned them up and got them ready for breakfast. They had no idea how to use a knife and fork and picked up a fried egg by their fingers. They didn’t like stew or pies, only beans in tomato, which they wanted to eat out of a tin, and chips.
When they came to me, one was wearing wellingtons, the other plimsolls, and no coats or extra shirts or underclothes. I cadged what I could from friends, and then decided to write to the parents for more. The mother wrote back saying she would have to get their suits and shoes out of pawn, which she did, and sent them down.
There were horrified tales of nits, lice and scabies, taken up by a press amazed by stories of children sewn into their only clothes. In Dorset a couple took in a mother and three children.
It was very hot weather when war broke out, but those older children went all round my house urinating against the walls.
Although we had two toilets, one being outside with very easy access for them, they never used them. Although my husband and I told the children and the mother off about this filthy habit they took absolutely no notice and our house stank to high heaven.
A more revealing tale of life in the under-toileted Glasgow slums came from the Scottish mother who told her six-year-old: ‘You dirty thing, messing up the lady’s carpet. Go and do it in the corner.’ The evacuation produced happier humour, too. Jean Chartrand recorded two boys billeted on a cousin’s farm asking to help with the milking. ‘One boy had put the pail under the cow’s udders and was holding it there while the other boy was the using the cow’s tail like a pump-handle. They were both very disgusted when there was no milk forthcoming.’
Some made lifelong friends from the experience, other children found themselves abused and exploited, emotionally, physically and even sexually, and never recovered. The lesser shocks were not all one way. Eileen Stoddart recalled coming from a ‘very respectable home. Some of the girls ended up in tiny cottages, three to a single bed, with bedbugs which they had never seen before in their lives. I wasn’t allowed to wash my hair for four months since we had to bring the water up the hill from the village pump.’
The overall impact of the whole experience, however, is summed up by one child’s memory of her family taking in three sisters. ‘We had never seen the like before and seriously learned how the other half lived.’
Or as Rab Butler, the creator of the 1944 Education Act, was to put it: ‘It was realized with deepening awareness that the “two nations” still existed in England a century after Disraeli had used the phrase.’
By the time Beveridge was appointed, the war had progressed through Dunkirk and the Battle of Britain to the Battle of the Atlantic as the convoys from America worked to save Britain from potential starvation and defeat. Food was rationed, with the Board of Trade, not the Labour Government of 1945, coining the phrase ‘fair shares for all’ as clothes rationing came in. And there had been the Blitz. By June 1941, the month Beveridge took on his task, more than two million homes had been damaged or destroyed by bombing, 60 per cent of them in London.
Bombs respected neither class nor income. The Luftwaffe may have effected a slum clearance programme around Britain’s docks that it would take years of post-war housing programmes to equal, but they also took out homes in Mayfair and Belgravia and the comfortable suburbs of towns when targets were missed or bombs jettisoned on the way home. Not just cities and big towns up and down the land were hit, but eastern and southern coastal areas in ‘tip and run’ raids. Some 100,000 people had been killed or seriously injured and the Emergency Medical Service was already running an embryo national health service by providing free treatment to ‘casualties’ – a definition which included evacuees.
Civil defence brought social classes together as much as the armed forces. My mother, a slip of an eighteen-year-old who worked as an ambulance attendant when the bombs began to fall on Bristol, recalls giggling with her middle-class friends at the shy approaches of dustmen too old and too young for call-up when they first sat at opposite ends of the canteen waiting for the siren’s call. ‘We just didn’t know people like them, or they people like us,’ she recalls. ‘We had never heard such language. But when you saw the risks they’d take to pull people out of bombed buildings, there couldn’t any longer be any sense of them and us.’
Claims of social cohesion can be overdone. The prison population almost doubled to more than 21,000, much of the increase owing to sentences for looting. Anélitestill lived better than the rest and black markets flourished. Nicholas Davenport, the highly successful and socialist City journalist wrote in the spring of 1941: ‘Not a week passes without the Ministry of Food prosecuting hundreds of food offenders and the Board of Trade dozens of offenders against clothes rationing and quota laws.’
But that same rationing was to change dramatically the nutritional status of the British people during the course of the war. Richard Titmuss, who told the official tale of the war’s social effects, recorded that ‘the families in that third of the population of Britain who in 1938 were chronically undernourished had their first adequate diet in 1940 and 1941 … [after which] the incidence of deficiency diseases, and notably infant mortality, dropped dramatically.’
It became known early on that the Royal Family too had ration books and ate Spam, while the King posed for a publicity photograph as he joined a ‘Pig Club’ – just about anything that was left over could be used for pig swill and converted into pork and bacon.
Eleanor Roosevelt, visiting King George VI and Queen Elizabeth, found windows blown out in Buckingham Palace and a black line painted round the inside of the bath, above which it was not to be filled. The Queen’s remark after Buckingham Palace was hit: ‘It makes me feel I can look the East End in the face’,
may sound sentimental, even patronising. It contained, however, a truth.
The switch to a war economy had also virtually eliminated unemployment. By the summer of 1941 it was down to 200,000 and falling. In 1943, soon after Beveridge reported, it had fallen to a mere 62,000, most of whom were in transit from one job to another.
Not only that, wages were rising. And Keynes, the uncertain prophet in the wilderness of the early 1930s, had now become the fount of Keynesianism. He had published his General Theory of Employment, Interest and Money in 1936 and had been in the United States where he had seen in Roosevelt’s New Deal the effects of ideas similar to those he advanced. Since June 1940 he had been inside the British Treasury, his influence plain on the 1941 Budget. While there were battles still to be fought before Keynesian economics ruled, the results of the government’s ever-growing economic intervention appeared to be demonstrating that his theories worked on this side of the Atlantic, too.
Things plainly were changing. The Times had gone pink, or so it seemed to right-wing Tories. In October 1941, Geoffrey Dawson, who had done so much to scar the paper’s reputation by his support for appeasement, was replaced by Robin Barrington-Ward, a Balliol contemporary of Beveridge. The paper’s official chronicler records Barrington-Ward as a radical Tory who was ‘inclined by temperament to welcome social change in advance, prepare for it, and so control it.’
He took the paper to the left. Earlier that year E. H. Carr, the leftish historian, had been appointed assistant editor, from which position he argued consistently for the need to espouse social justice as the aim after the war. In a sense, the then small group of Tory reformers, whose views had first been clearly articulated in 1938 when a rather obscure back-bench rebel called Harold Macmillan had defined the politics he was to follow in a book called The Middle Way, had found a voice in the leader columns of The Times. Even before Dawson left, however, a new tone had begun to emerge. An editorial on 1 July 1940 declared:
Over the greater part of Western Europe the common values for which we stand are known and prized. We must indeed beware of defining these values in purely 19th Century terms. If we speak of democracy we do not mean a democracy which maintains the right to vote but forgets the right to work and the right to live. If we speak of freedom we do not mean a rugged individualism which excludes social organisation and economic planning. If we speak of equality we do not mean a political equality nullified by social and economic privilege. If we speak of economic reconstruction we think less of maximum (though this job too will be required) than of equitable distribution.
Labour’s right-wing egalitarians, Tony Crosland in the 1950s or Roy Hattersley in the 1990s, could have said amen to that. One Tory MP was later to growl (though not in the context of the welfare state) that TheTimes had become merely ‘the threepenny edition of the Daily Worker’, the Communist Party paper which was suppressed for a time during the war.
If the voices on The Times were a-changing, they were not alone. The Economist, long the guardian of financial orthodoxy, could pronounce that the ‘old controversy’ over ‘the question of whether the state should make itself responsible for the economic environment’ was ‘as dead as a doorknocker – that is, useful for making a noise but nothing else’.
Newspapers may shape the world around them, but they also reflect it. The churches had found a new vigour in siding with the underdogs, running meetings demanding social justice after the war. In this William Temple, appointed on Churchill’s recommendation as Archbishop of Canterbury in early 1942, played a key role. He was to bless Beveridge’s marriage later that year and still later was to be contemptuously described as Beveridge’s ‘warm-up man’ by Correlli Barnett, the Cambridge historian whose influential reinterpretation of the Second World War puts Beveridge high on the list of Great Satans responsible for Britain’s post-war decline.
In 1941, while still Archbishop of York, Temple had written Citizen and Churchman in which he defined the ‘Welfare-State’ in contrast to the Power-State of the continental tyrannies.
A meeting of the Industrial Christian Fellowship in the Albert Hall in October 1942, at which Temple spoke, drew ten thousand participants. ‘The general demands included … a central planning for employment, housing and social security,’ Picture Post reported.
It was thus fertile ground into which Beveridge was to plant his dragon’s teeth, seeking to raise up giants to respond to the ‘five giant evils’ he had identified.
Moreover, during 1942 the Conservatives found themselves losing by-elections to some of the oddest characters ever to sit in Parliament. Labour, the Liberals and the Tories did not stand against each other because of the coalition – indeed, Labour actively backed some of the Conservative coalition nominees. The awkward independents, standing on the vaguest and most confused of platforms, still won. Screaming Lord Sutch should have been born earlier. Soon Labour was to find its own candidates losing by-elections in similar circumstances.
Mass Observation, the pioneering opinion poll organisation, found in December 1941 that one person in six said the war had changed their political views. ‘Eight months later, in August 1942 [four months before the Beveridge report], the proportion was one in three,’ Angus Calder records. ‘At this time it was also found that only one-third of the voters expected any of the existing parties to get things done as they personally wanted them after the war. This minority was mostly Labour or Communist.’
The old Conservative front was collapsing. What might be dubbed the new progressive centre of Tory politics which was to receive Labour’s inheritance in 1951 was yet to have its day.
The sense that something more than victory over Nazi Germany had to be planned was also present in government itself, even if the terms were not yet very clearly defined. Churchill had, after all, appointed Arthur Greenwood Minister for Reconstruction – the same Greenwood who as Labour deputy leader, standing in for an ill Attlee in the Commons debate on the eve of war, had been urged by Leo Amery from the government benches to ‘Speak for England, Arthur.’
Churchill, back on the Conservative benches, had his days as a Liberal social reformer the better part of thirty years behind him, but he still retained Liberal or even Whiggish sentiments. His interest in home affairs had dissipated in the 1930s in the face of his concern for Empire and the threat of Fascism. But addressing the boys of his old school, Harrow, in 1940, he said: ‘When this war is won, as it surely will be, it must be one of our aims to establish a state of society where the advantages and privileges which have hitherto been enjoyed only by the few shall be far more widely shared by the many, and by the youth of the nation as a whole.’
He had sent R. A. (‘Rab’) Butler to the Board of Education and appointed him chairman of a new Conservative Post-War Problems Committee. In August 1941 he met Roosevelt for the first time off Newfoundland where they agreed on the Atlantic Charter – a joint statement of war aims, even though the United States was not yet formally in the war. The pair called on all nations to collaborate ‘with the object of securing for all improved labour standards, economic advancement, and social security’. Peace should bring ‘freedom from fear and want’.
Beveridge was to exploit that statement in his report, citing it as backing for his plan.
And against this background, as Sir William prepared his report, the war raged outside Britain itself. On 22 June 1941, less than a fortnight after Beveridge’s appointment, Hitler had attacked the Soviet Union. Britain at last was not alone. For those with an abiding loathing of Communism, and who had seen the perfidious Nazi-Soviet pact of August 1939 allow the Soviet Union to swallow Finland and the German tanks to roll into Poland barely a week later, this was as hard a moment as any in the war. Not least for Churchill. In a broadcast that showed both courage and statesmanship, he declared that Nazism was indistinguishable from the worst features of Communism. ‘No-one has been a more consistent opponent of Communism than I have been for the last 25 years. I will unsay no word that I have spoken about it.’ But he went on to declare that with the tanks rolling, ‘the [Soviet] past with its crimes, its follies and its tragedies flashes away … I see the ten thousand villages of Russia … where maidens laugh and children play …’ and ‘… the cause of any Russian fighting for his hearth and home is the cause of free men and free peoples in every quarter of the globe.’
Most people believed initially that the Soviet Union would be smashed. But in July, Stalin announced his horrific but awe-inspiring ‘scorched earth’ policy. By September British ships were on the nightmarish Arctic convoys to Archangel carrying aircraft and other supplies. At the end of that month ‘Tanks for Russia’ week was launched in British factories: they came out with the legends ‘Stalin’, ‘Marx’, ‘Lenin’ and ‘Another for Joe’ chalked on the sides. And as Hitler became bogged down in the Russian winter snows and Moscow held, admiration for Soviet sacrifices grew. A conviction became widespread well outside the ranks of the Communists and Labour’s left that the Soviet system could not be all bad. There can be few more symbolic exemplars of this particular time than the Christian and Conservative T. S. Eliot, then based at Faber & Faber, turning down the manuscript of Animal Farm, the savage and prophetic satire of the Russian revolution and Soviet system written by the atheist and socialist George Orwell. Eliot did so on the grounds that it did not offer ‘the right point of view from which to criticise the political situation at the present time’.
The success of Beveridge’s report with its universalist and collectivist themes has to be seen against this complex backdrop. There were three more factors which were to give it the greatest impact of any British social document of the twentieth century.
The first is that Beveridge argued along the grain of current thinking. He may have drafted his report before he saw the evidence, but he already knew what much of its substance would be. Jose Harris writes:
One of the most striking features of the evidence submitted to the Beveridge Committee was the very widespread expectation among witnesses that the inquiry was going to lead to radical, even ‘Utopian’ social change. Quite where this expectation came from is not entirely clear, but it may well have derived from Beveridge himself and from his frequent references in articles and broadcasts to the abolition of poverty and to post-war social reform. A second striking feature was the very wide degree of support among witnesses for the kind of reform that Beveridge already had in mind – a measure of the extent to which Beveridge himself was interpreting rather than creating the spirit of the times. Again and again witnesses pressed spontaneously and independently for measures which afterwards became the main policy proposals of the Beveridge Report – namely, family allowances, full employment, a universal health service, a uniform system of contributory insurance, subsistence-level benefits and the reduction or abolition of public assistance.
Not everyone believed in planning for a New Jerusalem, let alone a Utopia. Sir John Forbes Watson, Director of the Confederation of British Employers, virtually urged Beveridge to abandon the report:
I want to say here – it will go on the shorthand note, but I do not know that I want to say it publicly – we did not start this war with Germany in order to improve our social services; the war was forced upon us by Germany and we entered it to preserve our freedom and to keep the Gestapo outside our houses, and that is what this war means.
Others shared that view and believed improvements could not be afforded. J. S. Boyd, vice-president of the Shipbuilding Employers’ Federation told the committee:
I am saying something I would not like printed – there may have been excellent reasons in the last war for talking about homes fit for heroes and there may be excellent reasons today for talking about improving the social services, but at the same time any of us who are trying to think at all do realize and do appreciate that the problems after the war are not problems that the man in the street concerns himself about, and you may be causing a much greater degree of danger by telling him something which in fact even the most optimistic of us may fear will be impossible after the war.
The industrialists’ desire not to go on the record may be significant; and the employers were not united. In November 1942, when Beveridge’s report was complete but not yet published, 120 senior industrialists including the head of ICI produced ‘A National Policy for Industry’ which called for companies to be responsible for proper housing for their employees, for supplementing the state pension and for subsidies to prevent unemployment. They also sought family allowances and the raising of the school leaving age to sixteen. The report had as much of corporate paternalism as state action about it. But in suggesting that big companies should almost become miniature welfare states the industrialists, if not in the same regiment as Beveridge, were marching to a similar beat.
The route Beveridge took, however, was not preordained. Evidence to the committee threw up alternatives of which he was already aware and which were to be recurring themes in the post-war years. Several witnesses argued for the abolition of contributions. Benefit should be funded either from taxation or from an identifiable surcharge on income tax. That Beveridge opposed, first because of its implied extension of means-testing, and second because of the Treasury’s longstanding opposition to earmarked taxes. Equally, there were arguments for flat-rate benefits paid for by graduated contributions: those who earned more would pay more. Both Political and Economic Planning and the Association of Approved Societies, who ran health insurance, pressed for that measure, which Beveridge dismissed, Jose Harris records, as the epitome of the ‘Santa Claus state’. ‘I believe there is a psychological desire to get something for which you have paid … the tradition of the fixed price is very strong in this country. You do not like having to pay more than your neighbours.’ Others including the International Labour Office praised the kind of ‘earnings-related system commonly found on the Continent’, where benefits were not flat but graduated according to previous earnings.
All these Beveridge rejected, objecting that earnings-related benefits would damage savings. In so doing he took the British social security system down a road that was both recognisable – the insurance basis already used for both employment and health – and very different from the earnings-related systems adopted over most of the rest of Europe after the war. For all the rhetoric in the early part of the report that ‘a revolutionary moment in the world’s history is a time for revolutions’, Beveridge in many ways was far from revolutionary. He produced something people would recognise. And he recognised himself what he had done. In paragraph 31 he stated that his proposals ‘spring out of what has been accomplished in building up security piece by piece’. In important ways, he added, the plan was ‘a natural development from the past. It is a British revolution.’ Both in its incrementalism – the way in which in large measure it stuck to the old system of flat-rate benefits paid for by flat-rate contributions split three ways between employee, employer and state – and in its choice of a path other countries did not follow, Beveridge’s report was indeed a very British revolution.
The second additional factor in the report’s reception was that Beveridge through broadcasts, articles and half-leaks – he was an occasional member of the massively popular radio ‘Brains Trust’ – had made very certain that the world knew it was coming. He had repeatedly referred publicly to ‘equality of sacrifice’ and the possibility of abolishing poverty. In March 1942, more than six months before the report, Picture Post could write: ‘Everybody has heard of Sir William Beveridge.’
As early as April 1942, a Home Intelligence report noted: ‘Sir William Beveridge’s proposals for an “all-in” social security scheme are said to be popular’, and by the autumn Home Intelligence was recording that: ‘Three years ago, the term social security was almost unknown to the public as a whole. It now appears to be generally accepted as an urgent post-war need. It is commonly defined as “a decent minimum standard of living for all”.’
Harold Wilson had turned down the secretaryship of the committee. But Frank Pakenham (the future Lord Longford) was a friend and assistant of Beveridge, sympathetic to his work, and well connected in Fleet Street. He acted as an unofficial public relations officer.
Brendan Bracken, the Minister of Information, wrote to Churchill in October: ‘I have good reason to believe that some of Beveridge’s friends are playing politics and that when the report appears there will be an immense amount of ballyhoo about the importance of implementing the recommendations without delay.’
There was indeed. In mid-November the ever-tactful Beveridge unwisely told a Daily Telegraph reporter that his proposals would take the country ‘half-way to Moscow’, a statement he promptly disowned but which only lowered by a few more degrees the icy reception the report was to receive from right-wing Tories and parts of government.
A frantic debate in fact was already under way over what facilities Beveridge should be given to publicise his recommendations. It was finally resolved on 25 November by Churchill minuting Bracken: ‘Once it is out he can bark to his heart’s content.’
Bracken changed tack. He apparently saw the report as a great morale-booster at home and for the troops, and a useful propaganda weapon overseas. His ministry recognised the force of Beveridge’s own declaration in the report that ‘the purpose of victory is to live in a better world than the old world’. Beveridge added 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.’ Where ministers were to part company with Beveridge was over the third clause of that sentence: ‘that, if these plans are to be ready in time, they must be made ready now’.
The final piece of luck and timing which ensured the report’s ecstatic reception lay with Montgomery and the British Eighth Army. The Japanese attack on Pearl Harbor a year earlier had seen the United States finally enter the war, but apart from survival, and the heroism of the Soviet Union, there had been little else to celebrate since 1939. Monty had gone into action at El Alamein at the end of October. The battle started badly. But on 4 November a BBC announcer, his voice shaking with excitement, delivered General Alexander’s Cairo communique stating that Rommel was in full retreat in Egypt. The news from North Africa only got better. Churchill in one of the war’s best remembered aphorisms pronounced on the 10th: ‘Now is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.’
Suddenly, after three years, there was a future to look forward to – and one that the times demanded should be very different from the past. On 15 November, for the first time since war was declared, Churchill ordered that the church bells ring out, not to announce invasion but to celebrate Monty’s victory.
A fortnight later the Beveridge report was published, its own words ringing out like a great bell. In his final paragraph Beveridge became more Churchillian than Bunyanesque:
Freedom from want cannot be forced on a democracy or given to a democracy. It must be won by them. Winning it needs courage and faith and a sense of national unity: courage to face facts and difficulties and overcome them; faith in our culture and in the ideals of fair-play and freedom for which century after century our forefathers were prepared to die; a sense of national unity overriding the interests of any class or section. The Plan for Social Security in this report is submitted by one who believes that in this supreme crisis the British people will not be found wanting.
There were – and still are – many battles to be fought against Beveridge’s five giants. His report’s popular impact was a matter, in Jose Harris’s judgement, ‘partly of luck and partly of careful calculation’ but partly also simply of the times in which it was made.
Beatrice Webb commented rather acidly how odd it was that Beveridge of all people had become a national hero. But if one sentence had to sum up popular reaction, it is the breathless enthusiasm of the Pathé News interviewer on the night the report was published. The white-haired, waist-coated, oh-so-Edwardian figure of Beveridge intoned to the massed cinema audiences of the great British public: ‘I hope that when you’ve been able to study the report in detail, you’ll like it. That it will get adopted, and, if it’s so, we shall have taken the first step to security with freedom and responsibility. That is what we all desire.’
The interviewer replies, all italics and capital letters and deference: ‘Thank You – Sir William’.
CHAPTER 2 (#ulink_43e57a6d-af0a-58a5-b096-b0e6499f8446)
‘From cradle to grave’ (#ulink_43e57a6d-af0a-58a5-b096-b0e6499f8446)
This is the greatest advance in our history. There can be no turning back. From now on Beveridge is not the name of a man; it is the name of a way of life, and not only for Britain, but for the whole civilized world.
Beveridge to Harold Wilson shortly after his report came out, recounted in Wilson, The Making of a Prime Minister, 1986, p. 64.
THE PUBLIC RECEPTION of the Beveridge report was indeed ecstatic. The leader writers of all the newspapers, the Daily Telegraph excepted, blessed it.
The Times called it ‘a momentous document’ whose ‘central proposals must surely be accepted as the basis of Government action. The main social standards on which the report insists are moderate enough to disarm any charge of indulgence.’
A survey of public opinion shortly after publication showed 86 per cent in favour and a mere 6 per cent against. Most notably, the better off favoured it almost as enthusiastically as those who stood to gain most. Among employers only 16 per cent felt they would gain directly, but 73 per cent favoured its adoption. For those defined as upper-income groups, 29 per cent felt they would gain, but 76 per cent supported the plan. Among the professions the figures were 48 and 92 per cent.
Home Office intelligence reports monitored, in Paul Addison’s words, ‘an extraordinary anxiety that somehow the report would be watered down or shelved’.
Such anxiety was not without justification. Some instantly said it could not be afforded, even as others argued that the benefits Beveridge was proposing were too low. The journalist J. L. Hodson recorded in his diary the evening he heard Beveridge broadcast the details of his plan:
Some of the Big Business gentlemen are already calling it a scheme that will put us all on the Poor Law. Unless prices are to fall a good deal after the war, the scheme errs on the side of modesty of benefits paid. £2 a week [the sum Beveridge recommended for the pension and an unemployed married man] won’t go very far. T. Thompson writes me from Lancashire: ‘Beveridge has put the ball in the scrum all right. I wonder what shape it will be when it comes out.’
It proved to be a rather different shape. But the first question was whether it would come out at all.
Sir Kingsley Wood, the Chancellor of the Exchequer, struck first, even before the report’s publication. On 17 November he minuted Churchill that the plan involved ‘an impracticable financial commitment’. Wood in his youth had led the battle by the Friendly Societies against Lloyd George’s 1911 health insurance package. He now told Churchill that Beveridge’s plan would increase taxation by 30 per cent. It would not abolish want, but it would give money to those who did not need it. ‘The weekly progress of the millionaire to the post office for his old age pension would have an element of farce but for the fact that it is to be provided in large measure by the general tax payer,’ Kingsley Wood declared, launching a theme that would be echoed time and again down the years. He added: ‘Many in this country have persuaded themselves that the cessation of hostilities will mark the opening of the Golden Age (many were so persuaded last time also). However this may be, the time for declaring a dividend on the profits of the Golden Age is the time when those profits have been realized in fact, not merely in imagination.’
By contrast Keynes, whom Beveridge had repeatedly consulted over dinners in West End clubs, believed the plan broadly workable and affordable.
He was later to argue that ‘the suggestion that is being put about in some quarters that there are financial difficulties is quite unfounded.’
After listening to Keynes, Beveridge had in fact trimmed his original ideas considerably in an attempt to keep costs down. The biggest single factor here was his proposal that old age pensions should be phased in over twenty years as people’s contribution records grew. But he had also agreed that family allowances be paid only for the second and subsequent children, and he had dropped plans to have full insurance for housewives, and benefits for those unable to work because they were caring for sick or aged relatives.
Some of Churchill’s closest advisers also disputed Wood’s view. Lord Cherwell, his economic adviser and close personal confidant, thought it ‘altruistic but worth its cost’, and likely to ‘improve rather than worsen our economic position’. But he worried that the expenditure would alienate opinion in the United States on whom Britain’s economy was now heavily dependent. Americans would think they were being asked to pay for British social services. But he observed perspicadously: ‘On the other hand there has been so much carefully engineered advanced publicity that the Government’s hand may have been forced.’
While Churchill’s advisers argued, the government began desperately playing for time. The report was promptly referred to a committee of officials chaired by Sir Thomas Phillips, an old adversary of Beveridge who had originally worked for him in the Board of Trade. The committee accepted the principles of universality and a comprehensive health service, but still challenged key aspects of the social security side of Beveridge’s scheme.
It fell to Sir William Jowitt, who had replaced Greenwood as the Minister for Reconstruction, to tell the Commons on publication day that the government would merely ‘formulate its conclusions’.
The government, however, had a real problem. As a coalition it was almost bound to be divided between its Labour and Tory parts on such issues; moreover, the Labour and Tory parts were themselves divided internally. Some Conservative ministers supported the plan: Leo Amery, for instance, described it as ‘essentially Conservative’;
others like Kingsley Wood damned it; yet others believed simply that no commitment could yet be made. Labour ministers, unsurprisingly, were in favour. But Bevin, his old distrust of Beveridge surfacing, took strongly against it, declaring – inaccurately – that many parts were unacceptable to the unions. Attlee and Dalton were in favour but remained lukewarm in pressing for implementation. Dalton in particular had noted a minute from Churchill in which the Prime Minister said he could not commit himself without a general election to test popular support.
Dalton feared Churchill would win such an election by a landslide, taking Labour off the map.
It was left to Herbert Morrison, newly in the War Cabinet, to argue vigorously and in some financial detail the case for a firm immediate commitment.
To accept the Treasury’s pessimism, ‘would be a surrender to idiocy in advance,’ he declared. The social benefits of the plan were ‘very great’ and it represented ‘a financial burden which we should be able to bear, except on a number of very gloomy assumptions’.
He lost, but Churchill shifted his ground. The government would undertake to prepare the necessary legislation, but it would require a new House of Commons to commit the expenditure.
Two months after the report’s publication, parliamentary pressure finally forced a debate. Sir John Anderson, Lord President of the Council, ‘a dry old civil servant-turned-minister’,
led for the government with so little enthusiasm for Beveridge’s plan that he inflamed not only the Labour benches but a significant minority on his own side. MPs heard him declare ‘there can at present be no binding commitment. Subject only to that… I have made it clear that the Government adopt the scheme in principle.’
The following day Kingsley Wood, the Chancellor, ‘lingered with apparent satisfaction over the financial perils of the plan’.
Since the start of the war, however, the Conservative Party had ceased to be a coherent body of opinion. The thirty-five-year-old Quintin Hogg (the future Lord Hailsham), neatly characterised by Angus Calder as ‘a frothing, bubbling, mockable but curiously clever young man’,
had returned from the front to join a dining group of other youngish Tory MPs which met at ‘a little restaurant in the Charing Cross Road’
(Conservatives having always had a penchant for plotting in supper clubs). The MPs were much attracted by Macmillan’s Middle Way view of a mixed economy steering a course between socialism and old-style laissez-faire capitalism, and were busy forming themselves into the Tory Reform Committee which was to receive tacit encouragement from Conservative ministers such as Butler, Eden and Macmillan himself. ‘What brought us together,’ Lord Hailsham recalled almost fifty years later, ‘was our feeling that the attitude of our leaders in the corridors of power as exemplified by their pussy-footing over the Beveridge Report was unduly unconstructive and unimaginative.’
Taking as his formula ‘publicly organized social services, privately owned industry’,
Hogg saw Beveridge as ‘a relatively Conservative document’ and tabled a motion seeking the immediate creation of a Ministry of Social Security. More than forty other Conservative MPs signed it.
Jim Griffiths, to whom would finally fall the implementation of Beveridge, capped that from the Labour benches with an even stronger call for immediate implementation. In the cruel but clever way of politics Herbert Morrison – possibly as a punishment precisely because he had been the most overt supporter of Beveridge in the War Cabinet – had been given the task of winding up for the government at the end of the third day. Faced with defending a negative policy that he had tried to make more positive, he produced what Jim Griffiths was to call ‘the best debating speech Morrison ever made’, underlining those parts (sixteen of the twenty-three recommendations) that the government did accept even if it did not yet intend to act.
The speech did enough to stop the Conservatives from rebelling. But 121 MPs from the Labour, Liberal and Communist parties together with 11 independents voted with Jim Griffiths. Among them was David Lloyd George casting his last ever Commons vote. It proved one of the biggest revolts of the war against the government. More than one historian has seen it as a defining moment in Labour’s 1945 election victory.
The debate finished on 18 February and in the course of that month six by-elections, ‘a general election in miniature’,
were held. The Beveridge report featured strongly in each campaign. In four of the six seats the Conservative vote dropped by 8 per cent even though Labour and the Liberals did not stand. The Home Intelligence department of the Ministry of Information was reporting ‘a disappointed majority’, adding ‘the Government is thought to be trying to kill or shelve the report.’
Churchill reacted. On 21 March 1943, in a broadcast entitled ‘After the War’ – his first wartime broadcast to concentrate on the home front – he continued to warn against imposing ‘great new expenditures on the State without any relation to the circumstances which might prevail at the time’.
But recognising ‘a duty to peer through the mists of the future to the end of the war’ he promised a four-year plan ‘to cover five or six large measures of a practical character’. These would be put to the electorate after the war and implemented by an incoming government.
He did not mention the Beveridge report by name, an omission that can only have been deliberate. But he promised ‘national compulsory insurance for all classes for all purposes from the cradle to the grave’. It was, he said, ‘a real opportunity for what I once called “bringing the magic of averages to the rescue of the millions”.’ To that he added the abolition of unemployment. ‘We cannot have a band of drones in our midst, whether they come from the ancient aristocracy or the modern plutocracy or the ordinary type of pub-crawler’, and the voice of Keynes could be heard in Churchill stating that government action could be ‘turned on or off as circumstances require’ to control unemployment. There was, he accepted, ‘a broadening field for State ownership and enterprise’ and his vision included a housing drive, educational reform, and much expanded health and welfare services. ‘Here let me say there is no finer investment for any community than putting milk into babies.’
Thus it was Churchill, rather than Beveridge, who defined social security as running ‘from the cradle to the grave’ – a phrase used by both the Daily Mirror and the Daily Telegraph on publication day – as he signed the wartime coalition up to it. What Lord Woolton, the future Tory party chairman, was to call ‘the shandy gaff’ of Conservatism and Socialism, which was to dominate post-war politics for thirty years, was beginning to emerge.
Churchill’s initial opposition to Beveridge needs explaining. First and foremost his attention was fixed firmly on winning the war, without worrying much about what was to come afterwards beyond hazy notions of some continuation of the coalition with himself at the head. This was, after all, still only ‘the end of the beginning’. D-day remained eighteen months away. Second, he had to hold together a coalition which contained Labour but also a Tory party that was itself divided on the plan. Third, his doubts over the affordability of the proposals can be seen as genuine. And fourth, despite the fact that Beveridge had constructed something that Churchill would recognise and had himself implemented thirty years earlier – social insurance – the new plan was very different in character.
The social insurance Churchill had helped introduce had been designed, broadly, for the working classes, with the Poor Law in reserve as the ultimate safety net. The better off had been excluded from the state-organised unemployment and health schemes. Beveridge’s plan was thus not ‘the cause of the left out millions’ which Churchill had espoused as young man, but the cause of all the millions.
And finally Churchill had been infuriated by Beveridge’s determination to get the government to act immediately, as revealed both in the repeated pleas in the text of the report and in the pre- and post-publication publicity that he had sought. The Prime Minister was reported ‘to have taken strong exception to the report, to have refused to see the author and forbidden any government department to allow him inside its doors’.
Churchill proved, however, on one level as good as his broadcast word, while on another getting his way. A month after the broadcast a Whitehall committee chaired by Thomas Sheepshanks was set up to consider implementation of Beveridge’s report, eventually producing a White Paper on Social Security in 1944.
The same year the government published White Papers on a National Health Service and on Employment Policy, set up a Ministry of National Insurance, and delivered the 1944 Education Act. A housing White Paper followed in March 1945 and on 11 June, as virtually the final act of the coalition government, the Family Allowances Act became law. It provided five shillings (25P) a week for the second and all subsequent children to every family in the land – real money at a time when the average male manual wage was £6. The first universalist benefit of the modern welfare state had been created, even if its actual payment fell due under a Labour government. Yet only to that, and to the Education Act whose financial impact in mid-1945 was yet to be fully felt, did Churchill commit significant sums of the taxpayers’ money ahead of a general election.
Beveridge himself – who in March had spoken from a Liberal Party platform on the theme of ‘a people’s war for a people’s peace’
– set to work on a follow-up report on how to achieve full employment. But he found himself frozen out of Whitehall, the Treasury officials whom he had invited to join his study withdrawn. The government refused to commission his report: indeed, it worked frantically to get out its own White Paper, which proposed a ‘high and stable level of employment’ ahead of Beveridge’s Full Employment in a Free Society. Jose Harris judges that the way he had courted massive advance publicity for the 1942 report ‘was seen by many people inside Government as a flagrant breach of Whitehall conventions and as an attempt to usurp the powers and functions of the regular policy making machine’.
He was not to work in Whitehall again until 1949, when the Labour Government appointed him to head an inquiry into the BBC monopoly.
CHAPTER 3 (#ulink_da52e15f-e217-522d-b513-7a269bfa9d9a)
A very British revolution (#ulink_da52e15f-e217-522d-b513-7a269bfa9d9a)
It was the totalizing ambition of his [Beveridge’s] report that made its proposals so striking; the complete coverage against risks for all people. All for one and one for all. The Three Musketeers meet the Government Actuary.
Peter Baldwin, ‘Beveridge in the longue duree’, York Papers, Vol. A, p. 30
A LAYMAN READING the Beveridge report today is likely to be impressed not just by the way it provides the blueprint – if one that was far from entirely followed – for the modern social security system; nor only by its trumpet calls for the creation of the other giants of the modern welfare state. Even more striking, it contains almost all the key arguments that have raged about the welfare state since its publication.
You could almost believe, listening to the debate about its future down the years, that despite very changed circumstances there is nothing new under the sun. Indeed, from one of the many faces of the prism through which the report can be viewed, its proposals for social security may best be seen not as a great innovation but as an attempt at a knife-edge balance between competing and quite possibly irreconcilable goals. Beveridge also confronted a series of issues that neither he nor anyone in the succeeding fifty years has managed satisfactorily to settle. Chief among this group were: the seemingly easy question of what is meant by poverty; how to cope with housing subsidy; and the treatment of women within the social security system. Chief among the competing goals were the desire to provide security as of right, set against incentives for work and saving; and the balance between individual freedom and compulsion – compulsion for the good of all and for the good of the individual.
It may be a truism, but before you can abolish poverty you have first at some level to decide what you mean by it. Poverty was not a word Beveridge used. Throughout the report he settled for the then common synonym ‘Want’. It was his bold claim that Want could be ‘abolished’ which gave the report much of its popular appeal. As Tom Wilson put it, ‘the general public understood what was intended, and that was enough to win their enthusiastic support.’
But poverty has to be defined, and a minimum income quantified, if it is to be avoided.
Beveridge’s answer was a ‘subsistence’ income, a term he defined as meaning ‘benefit adequate to all normal needs, in duration and in amount’.
He instantly conceded that there were ‘unavoidable difficulties’ in putting cash figures on such a concept. He had, none the less, to do so; and to set his benefit rates Beveridge drew extensively on the work of Seebohm Rowntree, the British Medical Association, a League of Nations study, and figures from the government-run Family Budget Survey which covered food, clothing, fuel, light, household sundries and rent. In several places the report suggests that the benefit levels he recommends are scientifically based,
and he specifically criticises the levels of benefit set before the war precisely because ‘none of them were designed with reference to the standards of the social surveys.’
But his report is also full of the uncomfortable recognition that any definition of poverty is subjective. The science behind his benefit levels gave them some justification, but it remained an imprecise and subjective science.
Plainly a homeless, shoeless, starving figure in the December snows is poor. Victorian England had plenty of those, and many more people living at standards not much better. Rowntree and Booth in the 1890s did much to categorise and quantify what was only too plainly to be seen. Move much above that level, however, and poverty becomes subjective and relative. Even the precise amount of food needed to avoid poverty is open to argument, and it would be hard to contest that the poorest Edwardian slum dweller was not better off than the starving victims of Somalia’s or Rwanda’s wars in the 1990s. It was the rediscovery of this blindingly simple concept that was to put one of the final nails in the coffin of John Moore’s career as Secretary of State for Social Services forty-seven years after Beveridge wrote his report.
Beveridge was well aware of the problem. ‘Determination of what is required for reasonable human subsistence is to some extent a matter of judgement,’ he conceded early in the report. ‘Estimates on this point change with time, and generally, in a progressive community, change upwards’
– the very point with which John Moore was to have such difficulty. Equally, Beveridge conceded that neither could ‘any single estimate, such as is necessary for the determination of a rate of insurance benefit, fit exactly the differing conditions of differing households’.
For all the evidence he cites for arriving at his cash benefits, there is no real attempt to hide the essential arbitrariness of the exercise. Time and again he uses phrases such as: It is reasonable to put the allowance for clothing as …’
or ‘It is suggested that [a particular sum for other items] … should be adequate.’
The argument about whether his benefit scales, or those introduced by the Labour Government, actually provided a subsistence income, and whether mere subsistence – freedom from physical want – was in itself a sufficient goal, was to rage on long after his report was published.
There were other difficulties. People on his subsistence income might not necessarily spend their money with ‘complete efficiency’. The basic calculations, he said, assumed that the recipient ‘buys exactly the right food and cooks and uses it without waste. Some margin must be allowed for inefficiency in purchasing, and also for the certainty that people in receipt of the minimum income required for subsistence will in fact spend some of it on things not absolutely necessary.’ He thus threw in a margin of 2s. od. for a couple and 1s. 6d. for a single adult.’ In addition he touched on an issue which would grow in importance as even the full employment enjoyed in the post-war years failed completely to wipe out long-term unemployment.
Strictly the figures for clothing and one or two minor items relate only to short periods of unemployment and disability, during which expenditure on renewals can be postponed; more will be needed in prolonged interruption of earnings. On the other hand, there should be room for re-adjustment in such matters as rent or retrenchment in the margin [the margin referred to above which allowed for inefficient or inessential spending]. On the whole, it seems fair to balance these considerations against one another and make no change in the benefit as between short and long interruption of earnings during working years.
Beveridge, to be fair, stated quite openly that he was designing his system to cope with ‘normal cases’, a phrase he repeatedly used. He was bringing Churchill’s ‘magic of averages’ to the average person. Insurance could not in fact cope with everything, and beneath the insurance plan there had still to be a safety net — National Assistance, or what later became income support. That would still be needed ‘to meet abnormal [my italics] subsistence needs’.
Under Beveridge’s assumption of full employment, long-term joblessness would be abnormal.
Then there was rent, an issue which resolutely refused to be normal. In 1947 owner-occupiers made up just 26 per cent of households. A mere 13 per cent of households were council tenants, the remainder renting privately in one form or another.
Then as now there were wide variations in rent for the same quality and size of housing – more than a tenfold difference. Beveridge struggled with whether to pay an average allowance for rent. The effect of that would be to leave those in more costly homes below subsistence level once they had paid it, and those in cheaper homes than the average better off financially. The alternative was to pay rent in full for pensioners and the insured unemployed as already happened for those on means-tested national assistance. That, however, raised problems of incentives, about which Beveridge was particularly hard-nosed when it came to the elderly. If rent was met in full for pensioners, ‘it will appear indefensible that those who just before retiring have been able to secure good accommodation at a relatively high rent should thereby retain this advantage for the rest of their lives, in kind if not in cash, as compared with those who have been less fortunate or less foreseeing. On the other hand, if those who are already drawing pension on the basis of one rent are free to move to more expensive accommodation and have their pension increased accordingly, pensions will come to look like subsidies to landlords.’ Had Mrs Thatcher’s government in the 1980s taken a similarly tough view, it would not have designed the poll tax specifically to take account of little old Tory ladies rattling around on their own in large houses from which their children had fled; and history might have been different.
Rent was one of three ‘special problems’ Beveridge identified, and after many hours of work and nine pages of discussion in the report, he recognised that he had failed to solve it – that it involved bigger questions such as housing policy and the distribution of industry. Beveridge went for a flat rate allowance within unemployment benefit,
admitting he was having ‘to make the best of a difficult situation’. The Labour Government in 1948 dropped that idea and instead met actual housing costs, subject to a means-test. How housing costs should be handled was to remain a permanent thorn in the flesh of the welfare state.
Women also posed problems, given the scheme Beveridge had devised. Indeed in his original ‘heads of a scheme’ he acknowledged: ‘The treatment of married women is one of the most troublesome problems in social security.’
Feminist writers (and not only feminist writers) have bitterly attacked Beveridge for his views and recommendations. There is some justice in that, but only some. The assaults tend to ignore that Beveridge was of his time and that if he failed to foresee radical changes to come, then that foresight was also denied to many others. In fact his recommendations did much to improve women’s position. Before his report single women enjoyed virtually the same right as men to unemployment benefits if in work, but only means-tested assistance if they had never worked or had not paid enough contributions. On marriage, women became ‘adult dependants’ on their husbands and, apart from the maternity grant, they had no rights under the health insurance scheme. ‘None of these attitudes is defensible,’ Beveridge declared.
By the time he was writing, women were pouring into the workforce: an extra 1.8 million were recruited into industry alone between 1939 and 1943, in addition to those who joined the armed forces and took other work. In 1940, the qualifying age for their pension had been dropped to 60, to encourage them to undertake war work. It was the start of a dramatic change in women’s role and status. But Beveridge shared the widespread assumption that after the war, as after the First World War, women would simply go home to be housewives. The 1931 Census (the most up-to-date figures Beveridge had available) showed that more than seven out of eight married women did not work. As he told the committee, ‘provision for married women should be framed with reference to the seven rather than the one’;
so he assumed in the report that ‘during marriage most women will not be gainfully employed’.
Beveridge also shared another common concern. Britain was seen to have ‘a population problem’ – not as in the 1970s of potentially too many people, but of potentially too few. During the 1930s the birth-rate had fallen. In fact by 1942 it was rising, a product of a record number of marriages on the eve of war and a sharp rise in illegitimacy,
but Beveridge was not to know that. ‘In the next thirty years,’ he said in the report, ‘housewives as mothers have vital work to do in ensuring the adequate continuance of the British race,’
adding later: ‘with its present rate of reproduction, the British race cannot continue; means of reversing the recent course of the birth rate must be found.’
He not only expected married women to be housewives, he also wanted incentives for marriage and child-bearing. He therefore recommended a marriage grant (that was never implemented), maternity grant, maternity benefit for thirteen weeks for those in work, family allowances and widow’s benefits; and in addition women and children were to fall within the ambit of the new, free, national health service. The package as a whole ‘puts a premium on marriage, in place of penalising it’, he declared.
In addition to the cash that was to be paid as family allowances to ensure ‘subsistence’ both in and out of work, Beveridge also wanted to keep tax allowances for children. In that decision lay the seeds of the great Child Benefit battle. He in part wanted them retained because he held mildly eugenidst views. Although he did not say so in the report, he believed the tax allowance, which is worth more to the better off, would encourage the middle and professional classes – ‘the more successful’ in society, as he put it – to have more children.
(Similar reflections about the desirability of who should do the breeding were to sink Sir Keith Joseph’s chances of leading the Tory party thirty-three years later.) He thus clothed his recommendations for women in pro-marital and pro-women rhetoric. Marriage gave women a ‘new economic status’ and they should thus begin ‘a new life in relation to social insurance’.
Recognition that housewives performed ‘necessary service not for pay’ even led Beveridge, after much agonising about whether it would encourage family break-up, to recommend a rather unsatisfactory separation benefit to be paid when marriages broke down – unless, of course, the woman was the guilty party. This, too, was never implemented.
Beveridge did not formally oppose married women working. Indeed, he proposed benefits for those who did through a special lower rate of national insurance contribution which they had the choice of paying – although it produced lower unemployment and disability benefits as it was assumed that the husband would already be providing a home to live in. But work by married women was likely to be ‘intermittent’, Beveridge believed, and he did not see the income from it as a crucial part of the household’s financial survival. All this stemmed from his view that benefits should provide only a basic income and that man and wife were ‘a team’. Thus the woman’s pension, and her entitlement to benefit during her husband’s unemployment and disability, came from her share in that partnership. This even stretched to the old age pension being notionally cast as a pension for a couple that was reduced for single people, rather than being seen as a single person’s pension to which extra was added for a dependant. Beveridge disliked the concept of wives as dependants, and he argued that his proposals ended that. The description ‘adult dependant’, he said, should be reserved ‘for one who is dependent on an insured person but is not the wife of that person’.
His concept of the married woman’s role – and crucially his rhetorical recognition that she derived rights from her ‘vital unpaid service’
– proved in tune with the times. Mass Observation recorded 70 per cent of women giving the report, with its recognition of the value of unpaid women’s work, unqualified support.
Some did see through the rhetoric, recognising that the improvements Beveridge’s proposals undoubtedly brought did not fundamentally change the married woman’s position. Elizabeth Abbott and Katherine Bombas, for example, in a 1943 pamphlet for the Women’s Freedom League, argued that ‘the actual proposals … leave her as before, a dependant and not a partner’.
In fact the framework Beveridge had chosen – a work-based scheme, founded on employee contributions – inevitably left women who did not work dependent on their husbands’ contributions. The other failures of the scheme included its inability to deal adequately with the large post-war rise in single parenthood, divorce and separation, but to blame Beveridge for that is a little like blaming medieval armourers for not foreseeing the effects of gunpowder. In 1938 there were just 10,000 divorce petitions. By 1945 the number had increased two and a half times, but still only to 25,000
– a tiny fraction of their twentieth century peak of 183,000 in 1995.
Disability, too, presented difficulties. For those injured at work a separate industrial injuries scheme could be created. And for those not injured at work who simply became disabled, unemployment benefit was available if they had paid sufficient contributions. Others, however, would have to fall back on means-tested national assistance and local authority services. Carers do not feature in the report, in part because if married women are not expected in the main to work, they are there for other ‘vital duties’. And Beveridge could not have foreseen the extent to which medical science would preserve life among many more people who acquired their disability at birth or in childhood and so never had the chance of qualifying for non-means-tested benefits through insurance contributions.
If these were the chief issues Beveridge failed to resolve – issues that are with us still – his report also reflects vividly the conflicting goals that ran through the debates about social security both before and after its publication. Throughout, he attempted to balance rights with duties, incentives against security, and individualism against collectivism. Thus he wanted as far as possible to have benefits paid as of right, without the means-tests which he said made help available ‘only on terms which make men unwilling to have recourse to it’.
But he balanced that with the duty of having to contribute.
Benefit in return for contributions, rather than free allowances from the State, is what the people of Britain desire. This desire is shown both by the established popularity of compulsory insurance and by the phenomenal growth of voluntary insurance against sickness, against death and for endowment, and most recently for hospital treatment. It is shown in another way by the strength of popular objection to any kind of means test. This objection springs not so much from a desire to get something for nothing, as from resentment at a provision which appears to penalise what people have come to regard as the duty and pleasure of thrift, of putting pennies away for a rainy day. Management of one’s income is an essential element of a citizen’s freedom. Payment of a substantial part of the cost of benefit as a contribution irrespective of the means of the contributor is the firm basis of a claim to benefit irrespective of means.
There was another reason why Beveridge went for an insurance system rather than a tax-based one. In the 1940s liability for income tax started much higher up the income scale than it does now. Many in the working class did not pay. As late as 1949 a single man did not start paying income tax until he was earning 40 per cent of average manual wages, while a married man with two children under eleven had to earn fractionally above average manual earnings to pay any income tax at all. Over most of the next fifty years, under governments of all colours, the income tax threshold fell as government spending – not just on the welfare state – expanded. By 1992, the equivalent percentages were down to below 25 per cent and 29 per cent respectively.
It is one factor that led lower earners progressively to question the value of the welfare state.
Beveridge was clear that he did not want a ‘Santa Claus’ state which appeared to give something for nothing, and in the 1940s a tax-based social security system would have been chiefly paid for by business, the then much smaller middle class, and those above them. What the less well paid did already have to find, however, were the existing national insurance contributions for the health and unemployment schemes. Unlike income tax, they were used to paying these. Indeed, Beveridge went to some lengths to suggest, with questionable accuracy, that the contributions he proposed amounted to ‘materially’ less in aggregate than the sums already paid out for national insurance contributions, for voluntary policies covering sickness, death and endowment, for hospital treatment policies and for medical fees.
It was another reason why he wanted ‘Benefit in return for contributions, rather than free contributions from the State’. In suitably Thatcherite terms, he also argued that citizens ‘should have a motive to support measures for economic administration’ and ‘should not be taught to regard the State as the dispenser of gifts for which no one needs pay’.
Furthermore, Beveridge worried about incentives to work and to save and to encourage people to take responsibility for their own lives. ‘The State in organising security should not stifle incentive, opportunity, responsibility; in establishing a national minimum, it should leave room and encouragement for voluntary action by each individual to provide more than the minimum for himself and his family.’
Indeed, in harsher words later in the report, he said that ‘to give by compulsory insurance more than is needed for subsistence is an unnecessary interference with individual responsibilities’.
Thus his whole scheme was built on a minimum income to provide subsistence, not on the model followed in most of Europe of providing earnings-related benefits. What Beveridge built was a platform on which everyone could stand, with a safety net below it in the form of means-tested national assistance for those who lacked the contributions to qualify. It was, however, a platform down to which anybody who was slightly better off fell if they became unemployed or disabled. He did not, as the continental countries did, attempt to build a system which maintained the individual’s economic place in society, if only for a time. It was to be a minimalist, not a maximalist provision, one that left in Beveridge’s word ‘room’ – in practice incentives – for those who could afford it to provide for themselves over and above the state scheme.
In addition, this minimum provision was to be based on flat-rate contributions in return for flat-rate benefits. Critics have since divined in this the basic flaw in Beveridge’s grand design. He wanted to provide something that took people off means-tested benefits. But because he pitched his insurance benefits at subsistence level – a level that would only meet ‘reasonable human needs’ and even then only for ‘normal’ cases – the amount paid was little different from the sums provided by the safety net of means-tested national assistance. That had to be the case, unless those on national assistance were to be given less than enough to live on – too little to prevent Want. As a result, there was little in financial terms to make national insurance benefits more attractive. Their attraction lay in their being paid by right, without a means-test.
On top of that, however, Beveridge wanted not just flat-rate benefits, but flat-rate contributions in which everyone paid the same for the same cover. That meant the contributions had to be pitched low enough to be affordable by the low-paid. Such contributions, however, were simply not able to generate enough cash to pay benefits at well above the national assistance rates without either a large Exchequer subsidy, which did not appear politically achievable, or much heavier contributions from employers, which would simply be passed on in either lower wages or higher prices. In this way, the very solidarity Beveridge sought – everyone paying the same in return for the same benefit – helped undermine his aim of abolishing Want.
Beveridge’s insistence on a minimum also came about because the man who once believed the unemployed needed the ‘whip of starvation’ to ensure economic advance,
still worried about work incentives. He in fact favoured, without listing it in his recommendations, a minimum wage. But at the same time he believed that ‘the gap between income during earning and during interruption of earning should be as large as possible for every man.’
Again, this reinforced the argument for a minimum standard of benefit.
In line with his attempt to balance rights with duties, but also to keep people in touch with work, he recommended both a training benefit and arrangements that would be recognised by those who in the 1980s and 1990s called for American-style Workfare for the unemployed. He did so, however, in a context which was not implemented. For Beveridge recommended that unemployment benefit should be paid without time limit, not just for the first six months as was the case before he reported, nor for the twelve months that was actually implemented in 1948. To reduce someone’s income just because they had been out of work for a certain period was ‘wrong in principle’, Beveridge said.
Most men would rather work than be idle. But the danger of providing adequate benefits indefinitely was that men ‘may settle down to them’, adding that ‘complete idleness, even on an income, demoralises’. Thus he said men and women should be ‘required as a condition of benefit to attend a work or training centre’ after six months, the requirement arriving earlier in times of good employment and later in times of high unemployment. The aim would be twofold: to prevent ‘habituation to idleness’ but also ‘as a means of improving capacity for earning’. There was a dear precursor here for the gradual tightening of entitlement to benefit and the requirement for training and Re-start programmes that Lord Young, Patrick Jenkin and their successors were to introduce in the 1980s and which Labour was to adopt with far greater vigour at the turn of the century. Attaching such conditions to benefit, Beveridge also noted, would unmask malingerers, and those claiming benefit while working.
For young persons, Beveridge said, ‘who have not yet the habit of continuous work the period [before training] should be shorter; for boys and girls there should ideally be no unconditional benefit at all; their enforced abstention from work should be made an occasion for further training’.
Neither of these work and training requirements was implemented: the full employment (indeed, labour shortages) of the 1940s and 1950s made them seem unnecessary. The recommendation that the young should be denied unconditional benefit would have to wait until the days of John Moore and Lord Young forty-five years later, with disastrous results for some.
In his report Beveridge attempted to reconcile a new universalism that did indeed stretch from the cradle to the grave – from maternity grant to funeral grant by way of all-in insurance – with incentives to work, to save and to take individual responsibility, while at the same time checking abuse. In so doing he redefined the social security debate, but also defined the battleground as it has been fought over ever since. The left would ever after be able to stress the universalism of Beveridge and his desire to end poverty through all standing together to help each other. The right would look at his insistence on leaving room for private initiative; that the state should not provide all, but only a basic minimum, and then in return for clear-cut duties. Each, over time, would issue calls to go ‘Back to Beveridge’: to which bit of Beveridge would depend on who was doing the calling.
The plan was indeed unconsciously eclectic in many of its underlying ideas. It contained bits of Socialism and bits of Conservatism in its liberal mix. The way in which its vision yoked together competing ideas into what appeared to be a coherent whole helps explain why it proved in the end acceptable to all political parties: it contained something for everyone. The flaws in its design, however, ensured there can never, in any pure sense, be a return to Beveridge. That is not just because he failed to design that unattainable goal, an ideal system. The rest of Europe, while taking in the main a different road from Beveridge’s very British revolution, equally failed to design fault-free systems. Their route (generally earnings-related benefits linked to earnings-related contributions, often run locally or independently of central government and often through bodies more like friendly societies than the state) also ran into difficulties. Any social security system must generate conflicts between individual and collective responsibilities, between rights and duties, between incentives and security of income. It may never be got right once and for all; the balance will endlessly shift. And it was on to such shifting sands that Beveridge’s report was launched. Before it came into effect, however, a general election had to be held.
Precisely how and why Labour won its unexpected landslide in 1945, producing the first ever majority Labour Government is outside the scope of this book,
but three quotations can explain it for present purposes. The first is from Lord Hailsham, recalling a conversation he had with a French officer in the Lebanon as early in the war as 1942, before he even returned for the Beveridge debate. The Frenchman remarked that it would be difficult after the war to avoid socialism.
‘Au contraire,’ said I, ‘il sera impossible.’
‘Pourquoi?’
‘Parce qu’il est déjá arrivé.’ In this I was not far wrong.
The second source is Churchill to Lord Moran: ‘I am worried about this damn election. I have no message for them now.’
At Walthamstow, near the end of the campaign, his worries were confirmed as for once he was booed into silence by a 25,000-strong crowd demanding ‘What about jobs?’ and ‘What about houses?’
The third quotation is also from Hailsham: ‘Again and again during the 1945 elections I was greeted with voters who exclaimed to me absurdly: “We want Winston as Prime Minister, but a Labour government.” When I explained patiently that that was the one thing they could not have, they were wont to reply: “But this is a free country, isn’t it? I thought we could vote for who we want.”‘
While the electorate might have trusted Winston, they chose, with memories of the 1930s still fresh, not to trust the Tories with the reconstruction of Britain, a project that involved much more than just Beveridge and his five giants. Before Labour took power, however, the foundations of post-war education – that most political of all the arms of the welfare state – had been laid.
PART II (#ulink_f438810e-556f-5561-9794-067410bbbbdb)
THE AGE OF OPTIMISM (#ulink_f438810e-556f-5561-9794-067410bbbbdb)
1942–51 (#ulink_f438810e-556f-5561-9794-067410bbbbdb)
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