Poverty122pp

feature Celebrating sixty years of the welfare state? In the recent celebrations of the sixtieth being of many working-class communities by the socio-economic upheavals of those years.’ anniversary of the implementation of the majority of Beveridge’s welfare state Benefits also help people cope with family change, including allowing some individuals reforms, the National Insurance Acts and either an independent income within relationships or a way out of relationships which turn the National Assistance Act, which out to be abusive. And social security also ties together introduced a nationwide system of the whole population together in interwoven webs of cross-subsidy (as part of the public national insurance and a means-tested finances, which Richard Titmuss likened to Crewe junction, with transfers going in many safety net, seem to have been forgotten. different directions). Fran Bennett looks at what happened. This last point is worth emphasising. Far from benefits up to 2003 being a mechanism which emphasised ‘them’ and ‘us’ (as New Labour, wrongly, said when it introduced new tax credits), both national insurance and child benefit could be seen as drawing people together.2 National insurance does this by bringing about a sharing of risks, and acting as a national savings scheme without high overheads. Child benefit does so by achieving redistribution over the individual lifecycle and between the genera- tions, with the whole community contributing to Mark Boulton/Photofusion everyone’s future through helping parents with the cost of their children’s upbringing. In fact, Why celebrate the sixtieth anniversary research by John Hills and colleagues in 1997 of the social security system? showed that the tax and benefits system as a Ten years ago, Robert Walker described the whole was then more about what they called social security system as the greatest success ‘William Beveridge’-type redistribution (over the of the twentieth century welfare state.1 He individual lifecycle) than ‘Robin Hood’-type emphasised that it is society’s principal weapon redistribution (between rich and poor).3 against social exclusion (and, therefore, evidence of a civilised and civilising society), it gives a A national conference held in 1992 did focus on return on savings and a reward for past contri- social security, and two volumes of essays were butions, and it is an investment in people and published as a result.4 Some authors argued the future prosperity of the country, and a cushion that the National Assistance Act introducing a at times of economic change. Norman Ginsburg national means-tested safety net was the key from London Metropolitan University (one of the achievement of Beveridge’s report. It is more contributors to a website set up by the University comprehensive than many such schemes in the of Wales to mark sixty years of the welfare developed world, and involves a legal right to state at http://welfarestate2008.newport.ac.uk) help, rather than a discretionary claim mediated expands on this last point: ‘One of the great through a social worker, which has been more paradoxes of the Thatcherite Conservative era common elsewhere. There are also nationally is that the welfare state helped, to some extent, uniform rates of benefit, not always the case in to cushion the devastation wrought on the well- other countries. 12 Poverty 131 feature So why are we not celebrating this security is the first since Beveridge – in other achievement? words, to assume that the system we have is There are some longstanding reasons which the same as it was in the late 1940s. Of course, may explain why we are not so ready to cele- this is not the case, even if some elements are brate sixty years of the social security system. still recognisable. So did any developments First, the criticisms of the original Beveridge since Beveridge’s time make social security a scheme are well known. For example, it was cause for celebration? built on the traditional family unit, with most married women’s rights mediated through their The evidence is mixed. Paul Gregg identifies husbands’. The wife as a mother (according to three periods of change since Beveridge.5 The Beveridge) would be hard at work adding to the first was an attempt to introduce earnings rela- British race, with provision for immigrants and tion for benefits in the 1960s and 1970s, to other forms of diversity not really imagined. make the UK’s national insurance system more like those of continental Europe. But this did not There were also some glaring gaps in social stick. Earnings-related additions to short-term insurance, which left some groups unprovided national insurance benefits were abolished in for. In addition, though it dealt with interruptions the 1980s and we are now well on the way to in earnings, low pay and poverty in work were abolishing earnings-related state pensions, a not seen as significant problems. Perhaps most process which started in the 1980s.6 importantly, the social insurance scheme pro- vided minimum rights for the many – the mod- Non-means-tested, non-contributory benefits est level of benefits and the initial dependence were introduced in the 1970s under the then of the system on flat-rate contributions meant Labour government to give an income and meet the scheme was limited in its ambitions and the additional costs for disabled people, and to middle classes did not really develop a deep- provide an income replacement for carers. Claimants… seated loyalty to it in the same way as they did These are one of the success stories of social to social insurance systems in some other security provision, arguably looking more like frequently have European countries. More recent critics have the benefits based on citizenship, which are strong feelings also argued that it excludes some groups, gives more common in the Scandinavian countries, more to the higher paid, and is not proportional and making a real difference to the lives of many of stigma and or progressive in terms of the burden it imposed disabled people and carers. But, for carers in frustration on contributors. particular, these benefits are paid at an inade- quate level. In addition, governance was an issue. There is a model of social insurance in which insurance There was also an expansion of means-tested contributions are seen as more separate from benefits in the 1970s, including new benefits for taxation, and the funds are often managed by people in paid work, such as family income the social partners – trades unions and employ- supplement and a national system of rent and ers. Arguably, this model can give both contrib- rate rebates. This was the first major recognition utors and claimants a more tangible stake. But (apart from benefits for specific costs, such as our national insurance system has always been child benefit and disability benefits) that social state-run and contributions are now being security provision might also be necessary for increasingly integrated into the tax system. people in work. There are perhaps more obvious reasons why The 1980s were dominated by cuts in national we are not celebrating the sixtieth anniversary insurance benefits, as well as the tightening of of means-tested benefits. On the one hand, qualifying conditions. Then the mid-1980s saw claimants of such benefits frequently have the Fowler reviews, which started from the per- strong feelings of stigma and frustration. On the spective of the Thatcher government’s attempts other, the taxpayers who fund the benefits often to reduce public spending and ended by creat- have just as strong feelings of resentment ing a means-tested benefits system suited to a against those who claim. This suggests that it is mass role and computerisation.7 Gregg talks not sufficient for a viable welfare state to about the increasing moves in this period towards depend solely on altruism, especially where a residualised means-tested model of benefits, people in poverty are concerned. brought about by both these developments. Developments since Beveridge In opposition, Labour’s 1992 shadow Budget A common error among social policy commen- included proposals for more generous universal tators is to talk as though each review of social benefits – child benefit and pensions in particular Poverty 131 13 feature Celebrating sixty years of the welfare state? – financed by higher payments. But significant- posed by the Commission for Social Justice – ly, these plans were seen as being rejected by but that this had been rejected on the grounds the electorate when Labour did not win the of cost. The rejection was probably also due to general election that year. They were also linked the strong influence of changes in the system of to the ‘southern discomfort’, which Labour was ‘welfare’ in the United States on New Labour said to be suffering from – a situation in which ideas. the acceptable limits of taxation were seen to have been reached and aspirant voters were So where are we now? Positive supposedly put off by Labour’s tax proposals. developments since 1997 Some commentators now argue that this was a Levels of financial support have improved – and mistaken interpretation, or at least may have not just for those in work, via tax credits. Child been exaggerated. But the belief was so strong benefit has been increased in real terms, at that we could be said to be still living in its least for the first or eldest eligible child. Benefits shadow. for young children in out-of-work families have more than doubled in real terms. The incomes Following the general election, the Commission of pensioners on pension credit have also on Social Justice was set up by the late John improved and are now up to the ‘minimum Smith.

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