FABIAN POLICY REPORT BEVERIDGE AT 70 The future of welfare 70 years on from the Beveridge Report, with Liam Byrne, Jose Harris, Liz Kendall, Estelle Morris, Nick Pearce, Nicholas Timmins, Steve Webb and many others CONTENTS EDITORIAL 2 The next welfare settlement The Beveridge report was published at the high-watermark of British soli- Andrew Harrop darity. In December 1942, its bold social principles – of universal coverage, 4 Who was William Beveridge? full employment, family allowances, benefits in return for contributions, Jose Harris a national health service, and the right to citizen welfare – were readily accepted by the public and politicians of all parties as the way to ‘win the 5 From welfare state to welfare society peace’ and remake British society following the ravages of war. Barry Knight Over time the solidarity that underpinned the post-war settlement has 6 The spirit of give and take been eroded; and the conditions of society which informed Beveridge’s Nick Pearce conclusions have fundamentally altered. Public support for our welfare state is often now witheringly low, and its politics poisonous. As Kate Bell 8 The five giants and Declan Gaffney write on page 12, “…people have come increasingly Want – Kate Green to believe that social security is going to the ‘wrong’ people – extraordinar- Disease – Liz Kendall ily, the public believes one in four claimants are committing fraud – and Ignorance – Estelle Morris data from the British Social Attitudes Survey suggests that claimants are Squalor – Vidhya Alakeson now seen as significantly more ‘undeserving’ than they were 20 years ago.” Idleness – Steve Webb We often feel close to returning to distinguishing between the concepts 11 Peverse incentives of the ‘deserving’ and ‘undeserving’ poor – whereby destitution was an Anne Begg individual ‘failing of citizen character’ – which early Fabians effectively banished whilst inventing modern social policy. 12 Social security for everyone Beatrice Webb’s 1909 Minority Report to the Royal Commission Kate Bell and Declan Gaffney on the Poor Law was the first appearance of many of the Beveridge 14 A prize worth fighting for principles, as well as some of the specific recommendations. Beveridge Liam Byrne himself worked as a researcher for Webb and later wrote that his own report “stemmed from what all of us had imbibed from the Webbs”. 15 Something for something Beveridge was responding to the testing times he had lived through, Nicholas Timmins just as the Webbs’ sought to address the grinding poverty the poor law 17 Winning on welfare manifestly failed to address. Following the financial meltdown of 2008, Nick Pecorelli Britain today now faces its own crisis – very different to previous ages’, but no less real. There is now broad agreement that the left needs a new welfare contract based on solidarity, contribution and earned entitlement as part of broader notion of equal citizenship. But what is the institutional and policy design that can make this work, with an aging population and huge fiscal challenges? And how can it be done with public support? The Beveridge report is an obvious place to start looking for answers. Whilst times have changed, his recommendations speak across the decades in several ways. This report investigates what elements of the Beveridge report endure and what lessons can be learnt for the future of welfare. For the next 5 years the Trust has To find out how the Webb committed the vast majority of its Memorial Trust aims to tackle funding resources to a structured poverty and inequality in the programme that will be focused on UK, and to learn more about the [email protected] This report is published in www.fabians.org.uk association with Webb Memorial the issues of poverty and inequality in achievements of Beatrice Webb the UK. During this time the Trust is Trust and the legacy that the Trust General Secretary, aiming to answer three questions: Andrew Harrop Like all publications of the Fabian intends to leave, visit Deputy General Secretary, Society, this report represents not 1. What does a good society without www.webbmemorialtrust.org.uk Marcus Roberts the collective views of the Society, poverty look like? but only the views of the individual Report Editors, Sofie Jenkinson, writers. The responsibility of the 2. What are the factors that produce a Ed Wallis FABIAN SOCIETY Society is limited to approving Printed by DG3, London E14 9TE good society without poverty? 11 Dartmouth Street its publications as worthy of Designed by Soapbox, 3. Who does what to implement a good London SW1H 9BN consideration within the labour www.soapbox.co.uk society without poverty? 020 7227 4900 (main) movement. Cover photo: © AP/Press “ Beveridge on Beveridge: recent speeches of Sir 020 7976 7153 (fax) Association Images William Beveridge”, published by the Social Security League, [1944]. Library of the London School of Economics & Political Science 1 / Beveridge at 70 still matters. Firstly, it is important when ex- household, even though we have tax credits work aged under 25 was both guaranteed panding the boundaries of the welfare state, to top-up low earnings. To avoid poverty and required to accept a job, training or in order to show that the costs will be borne low-earning families typically need both community work. by the beneficiaries. This pragmatic version top-ups from government and two work- Robust conditions matter because they The next welfare settlement of ‘soft’ hypothecation was important for ing parents. So the state needs to do more help people meet their own long-term The left rightly celebrates how much of Beveridge’s legacy lives on, Beveridge’s new social insurance scheme; to help second earners stay in work, by aspirations and also because they shrink but it is just as relevant today when thinking improving the incentives in tax credits and the pool of people who relying on state but should also feel inspired to seek out comprehensive solutions to about how to win support and raise money offering free or subsidised childcare. At the support, thereby opening the way to giving the giants we face today, writes Andrew Harrop for expanded provision in areas such as moment the coalition is going the other way those remaining more help in the future. social care. in the way it is designing universal credit Better popular understanding of the welfare Secondly, while most welfare provision is and cutting to Sure Start. system’s robust requirements could also earned and paid for through the taxes we be the route to changing the terms of the all pay, there are some entitlements where public debate. For example, growing media receipt only seems justified when preceded To restore faith, reports of the tough policing of ESA and by a sustained and earmarked contribution. politicians must change personal independence payment (PIP) may Andrew Harrop is General Secretary In the mid-2000s the Turner commission challenge the unpleasant tabloid narrative of the Fabian Society concluded this was still the case with re- tack and explain that it of scroungers and shirkers ‘on the sick’. spect to pensions, and recommended that And a job guarantee for young people, and only people who had spent decades in the is because the rules are perhaps in time lone parents with older ISTENING TO MOST commentary about adults below pension age declined in value inequality since they bind-in people of UK earning or caring should expect a pen- now robust, that people children, could help give legitimacy to those Lthe British welfare state might leave you by around a quarter, relative to average all backgrounds and sustain public con- sion by right. who remain on benefits, for what in future depressed, fearing that the legacy of Sir Wil- earnings. sent for redistributive spending. Lastly The same argument could be made by can have confidence in might be a time-limited period. liam Beveridge’s 1942 report is all but dead. So while many people believe the cost universal entitlements smooth risks and advocates of more generous, contribution- A change in language and attitudes will But in spite of legitimate and troubling con- of welfare is out of control, over the next costs across our lifetimes, which in many based unemployment and sickness protec- the genuine need of those not happen on its own however, or even cerns, ‘follow the money ’ and you’ll see the 20 years spending on working-age social instances is a good in itself, regardless of tion. Today people who become unemployed just as a result of shifting policy. After all, in spirit of Beveridge is alive and well: for the security is actually set to halve as a share whether we are at risk of poverty. Together but have savings or a working partner are within the system office Labour tightened the rules on welfare two largest areas of public spending are free of national income, due to the falling value these arguments make a compelling case limited to £1,900 of state support, which but also ratcheted up the language, so peo- healthcare (‘provided for all citizens by a of entitlements. As a consequence, just as for universalism in areas such as the state does not go far for most families. Restoring It will only be possible to end in-work ple thought there was more of a problem national health service’) and state pensions, in the pre-Beveridge era, ‘benefits amount pension and the NHS. a more generous insurance system would poverty, by taking firm action on pay, not less. To restore faith, politicians must earned by national insurance contributions. to less than subsistence’ (unless you are a But the benefits of universalism will not be expensive, so could only be a long-term conditions and job-security for low-paid change tack and explain that it is because Both were recommendations of December pensioner or have children) and the system always outweigh the high costs.