Social Services in Modern State – Beveridge and his Plan

If there is anybody to whom we owe much for the development of Social Services and to the rise of what is sometimes called the “Welfare State’, he is no less a man than Sir William Beveridge, whose theories on social insurance and allied subjects have become world famous and have been put into practice by most modern states.

A recent publication “Beveridge and his Plan” by Janet Beveridge, the wife of William, traces the origins and development which resulted in the Beveridge, report. In the preface to the book, Janet writes “Whether you like it or not, whether you are glad or sorry, the Beveridge Report was the inauguration of a new relation within the state, not only in this country, but throughout the World.”

William’s childhood and education

William’s father was a member of the Indian Civil Service and William was born in India at Rangpur in 1879. The earliest impressions that William recreated were rather poor. “Don’t expect to see an intellectual looking son,” his mother warned Henry, the father. William spoke English to his parents, Hindustani to his bearer, and German to his governess.

He came to England for his education and won the Entrance Scholarships to Chaterhouse at the age of thirteen and a half. During his undergraduate days at Oxford he took a lively interest in the daily progress in the war with the Boers and in the doings of the principal war correspondent of the Morning Post – Winston Churchill now Sir Winston. When it came to deciding a job, William threw up his chances at the Bar and accepted a post of sub-warder at Coynbee Hall in 1902.

From that time until 1942 when the Beveridge Report was published, he found time to make research work into the facts of poverty and insecurity. In August 1907, he went to Germany to study personally the German systems of social insurance of Bismarck. It was he who invented the Labour Exchanges. “The purpose of Labour Exchanges”, he wrote, “is to substitute a market for unguided hawking from door to door as the means of bringing the would-be buyer of labour and would-be seller together.”

In 1908 when the Government Bill for non-contributory means test pensions was being discussed, Beveridge wrote two special articles in the ‘Morning Post’ on Old Age Pensions by contribution as an alternative to the Government Bill and his first book. ‘Unemployment a Problem of Industry’, marked an era in economic presentation. During the first World War, Beveridge served under various capacities in the British Civil Service and after the War, at the request of Sydney and Beatrice Webb, he accepted the directorship of the London School of Economics.

The Beveridge Plan

That the state insurance schemes were in need of revision had long been recognized, but it was only in May 1941 that Mr Greenwood, on behalf of the coalition government, invited Lord Beveridge (then Sir William) to take charge of comprehensive survey of existing schemes of social insurance. Beveridge’s report on Social Insurance and allied subjects, was presented in November 1942. The result was electrifying. It was said that a queue a-mile-long had immediately formed itself from Kinsway to obtain copies from the Government Stationery Office. The report made three basic assumptions:

1.     The institution of children’s allowances.

2.     The framing of a comprehensive Health Service.

3.     The avoidance of mass employment.

Lord Beveridge had in mind the combination of social insurance and social security and laid down the following essential principles:

(a)    the scheme should be comprehensive, that is, it should apply to all and not only to a section of the population.

(b)    the organisation of social insurance should be treated as one part only of a comprehensive policy of progress. Social insurance can provide income security, but the nation must also attack disease, ignorance, squalor and idleness.

(c)    social security must be attained by cooperation between the state and the individual. The state should offer security for service and contributions. It should provide a national minimum of economic security and leave room for the individual to implement his resources by voluntary thrift.

The scheme was to be primarily one of insurance, giving benefits up to a reasonable subsistence level in return for contributions.

The Report includes a diagnosis of grant based on comprehensive surveys carried out in the principal cities and towns of UK. It was concluded that, of all wants, from three-quarters to five-sixths was caused by interruption or loss of earning power and the remainder by failure to relate earnings to the size of the family.

The population was divided into four main and two subsidiary classes:

(a)    Main classes (1) Employees (2) others gainly occupied, including employers, traders and independent workers of all kinds (3) housewives (4) others of working age not gainfully occupied.

(b)    Subsidiary classes (5) persons below working age; and (b) retired persons above working age.

Contributions would be paid in class (1) by both employee and employer; in classes by both employee and employer; in classes (2) and (4) by the insured persons; and in classes (3), (5) and (6) no contributions would be paid. Persons in class (1) would received benefit from unemployment, sickness and disability, pension on retirement, medical treatment and funeral expenses. Persons in class (2) would receive all these benefits except sickness benefit during the first thirteen weeks’ incapacity and unemployment benefit. Persons in class (4) would receive all benefits except unemployment benefit and sickness benefit. As a substitute for unemployment benefit, training allowances would be available to all persons except those in class (1) to enable them to undergo training for a new occupation. Maternity benefit and provision for widowhood, separation and retirement would be available to persons in class (3) by virtue of their husband’s contributions.

The whole scheme was to be administered by a Ministry of Social security.

Plan torpedoed

After considering the Beveridge Report, the Government issued its own scheme in a white paper on social Insurance in September 1944, varying to some extent the proposal made by Beveridge. The White Paper rejected the Beveridge proposals of a gradual increase in the scale of pensions and proposed a flat rate to start immediately, but on a scale much below the optimum suggested by Beveridge. It also proposed, in agreement with Beveridge Report, Retirement Pensions payable when an applicant actually ceased work.

The Beveridge Report, so popular, was in essentials put into practice in 1946 by the Labour Government. The National Insurance Act, 1946, which came into operation in July 1948, was the outcome of various deliberations and proposals on the report. It provides an extended system of national insurance, covering unemployment and sickness benefit, maternity benefit, widow’s benefit, guardian’s allowance, retirement pensions, death grant, and increase of benefit for dependants.

Appreciation of Janet’s book

There is no doubt that many persons are already aware of the various theories of Beveridge as some thirteen years have already elapsed since his famous report was first published. What is, however, interesting with Janet’s book is that she tries to give glimpses of the life of the man who has contributed so largely to the development of Social Services throughout the world. To us, Mauritians, the value of the book lies in the fact that it makes us realise that in most European countries, social insurance systems, more or less elaborate, were working before 1914 whereas here we have so far had no beginning. There does not prevent some people from saying that the Mauritian worker is well treated.

(Mauritius Times – 30th September 1955)

* Published in print edition on 29 April 2016

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