The Five Giants [New Edition]: A Biography of the Welfare State. Nicholas Timmins
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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’35 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.36 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’.37
Overnight Beveridge became a national hero – in Paul Addison’s phrase, ‘The People’s William’.38 It was ‘like riding an elephant through a cheering mob’, Beveridge said.39 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.’40
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.41 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.42
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.43
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.’44 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.45 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.46 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