So4103 Welfare Politics

So4103 Welfare Politics

J42755

1. William Beveridge is often identified as the founding thinker of the British welfare state. Describe the main features of his vision of the welfare state. Make reference to Beveridge’s influential report on Social Insurance and Allied Services (1942), including at least one quotation from the report (800 words).

William Beveridge was a British economist and a progressive social reformer. Beveridge’s first encountered the realities of unemployment during his work at Toynbee Hall, which lead to him investigating the problems and then administering schemes to deal with them. This experience allowed him to write Unemployment, A Problem of Industry in 1909 from this he a created a system of labour exchanges to try and help combat unemployment, which he would then get to implement when he joined the Board of Trade in 1908. By the time Beveridge became chair of the committee on social insurance and allied services “he had almost forty years of more or less continuous experience with problems of poverty and unemployment” (John Jacobs 1992). Beveridge was known for being a “staunch advocate of social justice” (History In An Hour 2012).  

The Beveridge report was published on December the 1st 1942 and outlined a plan for a better system of social security. It was an instant success The Times wrote that it was  ‘a momentous document, which should and must exercise a profound and immediate influence of the direction of social change in Britain’ (London Time 1942). In this report Beveridge would ensure that people would have “freedom from want from cradle to grave” (Beveridge 1942) as social insurance was intended to be an attack on want. Compulsory insurance for all would result in benefits for all and as these benefits were going to be set at a level that would ensure everyone had access to the basic needs. There were three main principles of the report, the first principle being that ‘a revolutionary moment in the worlds history is a time for revolution not for patching’ (Sir William Beveridge 1942) by this he meant that the current social climate was only going to be transformed through drastic change not a continuation of the current system. The foundation of the Beveridge report was the idea of full employment Beveridge considered idleness to be one of the five evils. Beveridge did not like the idea the term ‘welfare state’ he called it social insurance because he wanted to make it clear that it was something for something. He wanted the scheme to be based on the principle of taxation as opposed to just general taxation. However, this meant that benefits could only be set as high as the poorest member of society could afford to pay without being lower then ‘subsistence level’. Although Beveridge believed that benefits should be set as low as possible so as not to remove people incentive to work. Beveridge’s insistence on the insurance principle made in difficult when determining retirement pensions, as it meant that if pensions were going to be paid at the initial higher rate than there would be pensioners benefiting without having made the necessary contributions. Therefore, he proposed that the pensions scheme be phased in over a twenty-year period. The main thing that ensured the success of the Beveridge report was the combination of its comprehensiveness and its simplicity combined with everyone memory of the poverty endured during the depression of the thirties. For many the plan hit at the heart of their deepest fear as the existing benefit scheme was in effective due to disjointed manner it was introduced throughout the century and without any real consideration for the real issues at play. Beveridge also included an adjustment to the existing scheme of national assistance into his report for those people that would inevitably fall through the gaps in the system. He proposed that the existing national assistance should no longer be paid through insurance benefits but through general taxation. This would also be paid at subsistence level and would require a means test. Beveridge did account for the fact that in the first few the number of people claiming national assistance may be high due to the phasing in of the pension scheme.

Overall Beveridge set out a plan that if implemented he believed had the potential to rid the world not just of want but of other fears such as dying and old age and ill health.

1. It is often suggested that the Beveridgean welfare state emerged in the context of a ‘social-democratic consensus.’ Explain what this means (400 words).

A social democratic consensus emerged during the period from 1945 to 1975  and is defined as ‘common ground shared across the main political parties as to the desirability and commitment to reforming capitalism through gradual reform from above’ (Hughes, Gordon 1998).  The political model of post war Britain encouraged nationalisation, trade unions, heavy regulation, high taxes and most importantly a generous welfare state.  The consensus developed policies throughout the 1930’s and the second world war. The social democratic consensus was based on settlement which in this context is used to explain the negotiations and compromises made by each group. The  economic settlement was mainly based on  Keynesian economic theories. This theory was believed to hold the solution ‘to the world – wide problem of an unmanaged capitalist economy which was prone to crises’ (Hughes, Gordon 1998). This theory was highly critical of the traditional laissez – faire economics that was used at the time, as Keynes argues that for full employment to be achieved the government would have to actively intervene in the economy. Keynes also argues that it was the governments job to act to reduce any increase in inflation that may be caused by full employment. Keynes stated that the only solution is   state managed capitalist society based on full employment which generates economic growth. Continued economic growth was essential to fund the welfare state. Whereas Beveridge’s report supported full male employment as a means of leading to further consumption of leisure which would inevitably lead to a higher standard of living.  The second focus was political settle and the broad welfare state. During this time key politicians appeared to agree in terms of the need to move for the traditional Laissez- faire model of government towards a more active form a state intervention, in order to regulate the economy. The Beveridge report of 1942 put forward a plan of social insurance based on a ‘universal flat rate’ of contribution and benefits. Leading political actors took onboard the theories of Beveridge and Keynes in order to  begin the post- war reconstruction of society. In early 1926 Keynes did predict that ‘in the future the government will have to take on many duties in order to avoid the past’.