The Five Giants [New Edition]: A Biography of the Welfare State. Nicholas Timmins
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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.17 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’”18 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’.19 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’.20 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.21 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’.22
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’,23 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.24 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.25
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