The Beveridge Report
and the Implementation
of the Welfare State
The plan for a universal coverage by a basic insurance marks the highest point which England has reached on her road to social security. . . . The people of England in their long pilgrimage have come at last “to the top of the hill called Clear,” whence they can see opening before them the way to freedom with security.
—DE SCHWEINITZ, ENGLAND’S ROAD TO SOCIAL SECURITY
The Beveridge Committee issued its report, Social Insurance and Allied Services, in December 1942 under the name of the chairman alone. The other committee members, all drawn from the civil service, were instructed by their superiors not to sign the report, and Arthur Greenwood, the Minister without Portfolio, had notified Beveridge in January that the report “will be your own report . . . the departmental representatives will not be associated in any way with the views and recommendations on questions of policy which it contains.” There were several reasons for Greenwood’s decision—from the start Beveridge had “dominated and even monopolized” the committee’s proceedings, his interpretation of the committee’s charge and his policy proposals went far beyond what the government had intended, and ministers did not want to commit the government to a proposal for postwar reconstruction that, in the words of the Chancellor of the Exchequer, “involves an impracticable financial commitment.”1
As early as July 1941, after only one meeting of the committee, Beveridge made it clear that he planned to do far more than inquire into the anomalies resulting from the piecemeal growth in social policy and make recommendations for tidying it up. In a short memo titled “Social Insurance—General Considerations,” he wrote, “The time has now come 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, that is to say if one could plan an ideal scheme, using all the experience gained in the past, but without being hampered by regard for vested interests of any kind?”2
Social Insurance and Allied Services, hereafter referred to as the Beveridge Report, proposed a rationalization and extension of contributory social insurance to provide subsistence benefits covering all “principal causes of interruption or loss of earnings,” a system of children’s allowances, and the “establishment of comprehensive health and rehabilitation services.” The report was greeted with great enthusiasm by the working classes, if not by the government, and sold over 600,000 copies within a year of issue. The Times stated, on the day after the report was issued, “Beveridge and his colleagues have put the nation deeply in their debt, not merely for a confident assurance that the poor need not always be with us, but for a masterly exposition of the ways and means whereby the fact and the fear of involuntary poverty can be speedily abolished altogether.” It added that the report’s central proposals “must surely be accepted as the basis of government action.”3
The Beveridge Report has been viewed as both an end and a beginning. Many see the report as marking the beginning of a new and more inclusive and generous phase of government social policy, the blueprint for the British welfare state. Others contend that many of Beveridge’s assumptions were backward-looking, and that his proposals largely were the culmination of the social policies of the previous four decades.4 Karl de Schweinitz, in the epigraph to this chapter, describes the report in Bunyanesque language, with the British people after a long pilgrimage being led by the shepherd Beveridge to the top of Mount Clear, from which they could see the Celestial City of social security.
This chapter examines the Beveridge Report and the beginnings of the postwar welfare state. Section I provides a detailed look at the report’s main proposals, and discusses how, in Beveridge’s view, these proposals would eliminate the “giant evil” of want. Section II examines the debate over the Beveridge Report within the government, the adjustments made to his proposals, and the implementation of social welfare legislation after the war, concluding with a discussion of the extent to which the adoption of the welfare state eliminated poverty in the 1950s.
I. The Beveridge Report
The call for a comprehensive overhaul and extension of British social policies did not begin with the Beveridge Report. A wave of “New Jerusalemism” hit Britain in the summer of 1940, and lasted throughout the war. Those calling for a postwar New Jerusalem or New Britain included Bishop (later Archbishop of Canterbury) William Temple, H. G. Wells, historians Arnold Toynbee and E. H. Carr, Harold Laski, J. B. Priestley, and many others.5 Carr, for example, in a leader in the Times on July 1, 1940, titled “The New Europe,” wrote that it was a good time to reflect on the values “for which we fight.” “If we speak of democracy, we do not mean a democracy which maintains the right to vote but forgets the right to work and the right to live. . . . If we speak of equality we do not mean a political equality nullified by social and economic privilege. If we speak of economic reconstruction, we think less of maximum production (though this too will be required) than of equitable distribution.”6 The January 4, 1941, special issue of the magazine Picture Post put forward “A Plan for Britain,” which called for “a job for every able-bodied man” and “a National Minimum—a standard below which no one should be allowed to fall, in employment or out, in sickness or in health, during widowhood or in old age.” To achieve the national minimum, the report called for the adoption of a national minimum wage, a system of child allowances, “an all-in contributory scheme of social insurance,” the abolition of means tests, and the establishment of a new Ministry of Social Welfare. It also proposed “a state medical service . . . and a complete overhaul of education.”7 The following month, the General Council of the Trades Union Congress proposed major revisions to the system of national health insurance and criticized the confusing nature of the existing social insurance programs, which they described as “a whole lot of schemes purporting to deal with the same problem, but each providing a different kind of remedy.”8 Finally, the policy think tank Political and Economic Planning, in a July 1942 paper on “Planning for Social Security,” proposed the adoption of “a national Plimsoll Line of goods and services for all classes, based on a ‘decent’ Human Needs Standard,” a national health service, and the merger of all existing income-maintenance programs into a Ministry of Social Security.9
The extent to which public support for reforming the social welfare system was a result of the war has been debated by historians. Some contend that the experience of war created social solidarity, which increased public support for an extension of the social safety net. According to Richard Titmuss, the evacuation from Dunkirk, the Blitz, and the threat of invasion caused a major shift in British public opinion toward collectivism. In his words, Dunkirk “summoned forth a note of self-criticism, of national introspection, and it set in motion ideas and talk of principles and plans.” The “dangerous period” from June 1940 to May 1941 “was most fruitful for social policy and action.” Historian Paul Addison added that “the demand for social reform at home sprang up suddenly [in the summer of 1940] as a gust of wind on a still day, and continued to blow with increasing force.”10
Other historians, including Beveridge’s biographer José Harris, maintain that the effect of the war on social policy has been overstated. They stress that “the breach with the past was less abrupt . . . [and] the aura of consensus was weaker” than Titmuss and others contend.11 Many of those who called for social reform during the war had supported such reform before 1939. When Tawney asserted in his pamphlet Why Britain Fights that one of Britain’s postwar goals must be to create “opportunities by which all can participate, according to their powers, in the treasures of civilization,” he was reiterating what he had been writing for two decades.12 Beveridge, in the concluding paragraphs of his report, echoed Tawney, the Picture Post, and others when he stated that “the purpose of victory is to live . . . [in] a better world than the old one,” and that his proposals were a sign to the British people and the world that “the object of government in peace and war is not the glory of rulers or of races, but the happiness of the common man.”13 There seems little doubt, however, that even if many of the persons advocating social reform after May 1940 had called for similar policies in the 1930s, their statements were now being heard by more receptive ears, not only from the political left but also from the growing “progressive Centre.”14
THE BEVERIDGE REPORT’S PROPOSALS
The main planks of Beveridge’s plan are well known, but bear repeating. The report began by stating that Britain’s existing social insurance policies, while “hardly rivalled” by any other industrial nation, were complex and inefficient as a result of their piecemeal growth. Not all persons or risks were covered by the existing schemes, and benefit rates in some schemes were too low. The problems with the existing programs were made clear by an examination of the interwar social surveys. Beveridge concluded that the chief cause of poverty for between three-quarters and five-sixths of the families below the poverty line in the cities surveyed was the “interruption or loss of earning power.” They had somehow fallen through the cracks in the safety net. For most of the remaining households in poverty, the cause was the large size of their families.15
Rather than patch the existing schemes, Beveridge recommended the creation of a new comprehensive and coordinated system of social insurance, together with a program of children’s allowances. In an address given at Oxford five days after the release of the report, he stated that his program was meant to provide “a national minimum of income,” to ensure that “everyone at all times, in virtue of contributions made by him, and as of right without any means tests, has the minimum income necessary to meet his responsibilities.” By providing income security for the British people, his plan would abolish want, one of the “five giant evils” on the road to reconstruction. Additional government policies would be necessary to provide freedom from the other giant evils: disease, ignorance, squalor, and idleness.16
The plan covered all British citizens, not just the working class. To be eligible for benefits, an individual made compulsory weekly contributions to the insurance fund, or had contributions made on his or her behalf. The contribution was set at a flat rate—all insured persons made the same weekly payment to the social insurance fund. In return for their contributions, individuals received benefits when their earnings were interrupted due to unemployment, sickness, accident, disability, or retirement, or by the death of the breadwinner, and also received maternity and funeral benefits. These benefits also were provided at a flat rate, “irrespective of the amount of the earnings which have been interrupted by unemployment or disability or ended by retirement.” The weekly benefit was the same for each principal cause of interrupted earnings—unemployment, sickness, disability, and retirement. It would be generous enough to “provide by itself the income necessary for subsistence in all normal cases,” and would “continue so long as the need lasts, without means test.”17
Despite the extension of social insurance to cover virtually all needs, there still would be some people who were not eligible for benefits, either because they did not meet the contributory conditions or the conditions for benefit, or were “in need through causes not suitable for insurance,” such as deserted wives. All persons not covered by insurance would be covered by National Assistance. The level of assistance should be enough to meet individuals’ “needs adequately up to subsistence level, but it must be felt to be something less desirable than insurance benefit; otherwise the insured persons get nothing for their contributions.” Unlike insurance benefits, assistance would be subject to a means test. It would be funded completely by the national exchequer. The adoption of national assistance would effectively mark the end of the Poor Law.18
Beveridge admitted that freedom from want could not be achieved simply by his plan for social insurance and national assistance. It required, in addition to insurance, the adoption of children’s allowances, a comprehensive system of health and rehabilitation services, and policies to maintain employment and prevent mass unemployment. The interwar social surveys found that between one-sixth and one-quarter of poor families were in poverty due to their large number of children. A flat rate insurance benefit could not be set high enough to provide families of every size with a subsistence income, so some system of child allowances was necessary. However, the payment of child allowances only to families in receipt of social insurance benefits would create serious disincentive effects, since persons with large numbers of children might receive as much or more in benefits when unemployed or sick than they earned in wages when working. Beveridge therefore proposed the adoption of a universal system of children’s allowances payable to all families regardless of income, “subject to the omission of the first child when the parent is earning.” Allowances should continue up to age 16 for children “in approved full time education.” Universal children’s allowances would serve an additional purpose—they would help to reverse the decline in the birth rate. The allowances would be paid for out of general taxation.19
The abolition of want also required the adoption of a comprehensive national health service. In his December 6 Oxford address, Beveridge argued that equal access to health care must be regarded as part of the national minimum. The national health service would ensure that all citizens had access to whatever medical treatments they required, including home and hospital care, access to specialists, nursing and midwifery, dental care, and postcare rehabilitation, “without remuneration limit and without an economic barrier at any point to delay recourse to it.” Medical services would be provided to every citizen “without a treatment charge.” The goal was for every citizen to be “as well as science applied to the prevention and cure of Disease can make him.” The report raised many issues regarding the organization and financing of health care that it did not address in any detail, and called for a further enquiry into the topic.20
Finally, the success of social insurance in abolishing want hinged on the maintenance of employment, by which Beveridge meant the abolition of mass unemployment and of long-term (“year after year”) unemployment for individual workers. Mass unemployment would create severe financial pressure on the social insurance fund, while the idleness associated with long-term unemployment demoralized individuals. The report did not propose how to maintain employment at a high level, other than to call for the state to use its powers “to whatever extent may prove necessary to ensure for all, not indeed absolute continuity of work, but a reasonable chance of productive employment.” However, in addresses given around the time of the report’s publication, Beveridge discussed his views regarding employment policy in more detail. He argued that the destruction of idleness, the “fifth giant,” was the most important postwar aim. Unless idleness was destroyed, “the other aims of reconstruction . . . are out of reach in any serious sense and their formal achievement is futile.” The reduction of unemployment required a fluid labor market and national planning to relate the nation’s needs and resources to each other, which in turn required some encroachment by the state into the field of private enterprise in certain sectors of the economy. Beveridge admitted that private enterprise is “a ship that has brought us far on the journey to higher standards of living and of leisure,” but added that the interwar period has shown that it is “a ship for fair weather and open seas.” The abolition of mass unemployment required that the state play a larger role in postwar economic affairs.21
Part of the cost of social security was to be paid for by weekly contributions from workers. In addition, employers would make a weekly contribution on behalf of each employee, which they should view as “a proper part of the cost of production” because social security would create a healthier and more efficient workforce. The state also would contribute to the cost of social security out of general taxation. Thus, the Beveridge Plan continued the “tripartite scheme of contributions” begun with the 1911 National Insurance Act. The division of costs among the three groups varied across programs. Beveridge envisioned that workers’ and employers’ joint contributions would cover two-thirds of the cost of unemployment benefits, five-sixths of the costs of retirement pensions, disability benefits, and widow’s benefits, and some undesignated share of the cost of health care. The state would provide one-third of the cost of unemployment benefits, one-sixth of the cost of pensions and disability benefits, and the entire cost of children’s allowances and national assistance. It also would pay for the National Health Service, with some assistance from local governments through local rates and from the social insurance fund.22
While some reformers argued that the cost of social security should be borne entirely out of general taxation, Beveridge defended the use of workers’ contributions on two grounds. First, he claimed that the British people preferred contributing to the insurance fund rather than receiving benefits as a free allowance from the state—“there is a psychological desire to get something for which you have paid.” Nor did they want contributions to vary according to income. They wanted, to use a later phrase, “something for something” rather than “something for nothing.” Second, Beveridge believed that a contributory system helped “to keep the Social Insurance Fund self-contained.” The existence of a self-contained fund would make clear to the public that benefits could be increased only if their contributions also increased, and would help to ensure that the British people did not come to view the state as “the dispenser of gifts.”23
The weekly benefit paid to those experiencing an interruption of earnings would be adequate both “in amount and in time.” Beveridge stressed that the proposed rate of benefit “is intended in itself to be sufficient without further resources to provide the minimum income needed for subsistence in all normal cases.” Moreover, benefits “will continue indefinitely without means test, so long as the need continues.” In the concluding section, he reiterated that a rate of benefits “materially below” that proposed in the report could not “be justified on scientific grounds as adequate for human existence.” Lower benefits or pensions would mean “that the cost of unemployment or sickness or childhood is borne . . . indirectly in privation and lowered human efficiency.”24
The report concluded by addressing a question: is the abolition of want “a practicable post-war aim”? In his answer, Beveridge turned first to the information contained in the interwar social surveys. Despite the fact that a substantial share of families were found to be in poverty in each of the cities surveyed, the “great bulk” of working-class families had incomes that were far above the “minimum for subsistence.” Beveridge calculated that in East London in 1929 the aggregate surplus income of working-class families above the (primary) poverty line exceeded the aggregate deficit of those below by a factor of 30. For York in 1936, using the more generous human needs standard, the surplus of those above the standard exceeded the deficit of those below by more than a factor of eight. He concluded that the abolition of want in interwar Britain “was easily within the economic resources of the community”; its existence was “a needless scandal due to not taking the trouble to prevent it.”25
The social surveys, along with other economic and biological evidence, showed that living standards had increased substantially in the previous three or four decades. However, this increasing prosperity did not eliminate poverty. The moral, according to Beveridge, was that “new measures to spread prosperity are needed. . . . Abolition of want cannot be brought about merely by increasing production, without seeing to correct distribution of the product.” In more recent terminology, trickle down by itself had proved insufficient to cure poverty. But there was a second, more encouraging, moral as well. The growth in living standards since 1900 had occurred despite the waste of four years of war and the disruption of the international economy following the war. The moral was that there was no reason to believe that the current war would bring an end to economic progress, making the plan for social security an unaffordable luxury. In sum, when the war ends the “abolition of want by re-distribution of income” will be within the means of the British people, and the new distribution, if properly designed and financed, need have no disincentive effects and “can increase wealth, by maintaining physical vigour.”26
THE GENEROSITY OF BENEFITS
Historians have debated what precisely Beveridge meant by his proposal that the level of benefits should be “sufficient without further resources” and “adequate for human existence.” Were his proposed benefits based on Rowntree’s primary poverty (physical efficiency) standard, on his human needs standard, or somewhere in between these two? Beveridge admitted in Part I of the report that it was not easy to define a subsistence income: “Determination of what is required for reasonable human subsistence is to some extent a matter of judgment; estimates on this point change with time, and generally, in a progressive community, change upwards.” Harris maintains that Beveridge “concluded that insurance benefits must be related to the wider concept of ‘human needs’” and that he envisioned Rowntree’s human needs standard “as the basis upon which all state cash benefits should be calculated in the social security arrangements of the future.” On the other hand, Veit-Wilson contends that Beveridge used the term “subsistence” to refer to the primary poverty standard, and that the benefit rates contained in his report “represented not a living income but a state contribution towards one which recipients would have had to supplement in other ways if they wished to live social lives.” He goes on to argue that by adopting a physical efficiency standard but implying that benefit levels were “adequate” and “sufficient for all normal needs,” Beveridge was being “consciously ambiguous” or “perhaps even mendacious.”27
Glennerster and Evans are only slightly less critical. They point out that Beveridge’s insistence on flat-rate insurance contributions (and therefore rejection of progressive funding) “made irreconcilable his objectives of subsistence adequacy and universal coverage.” The maximum rate of individuals’ contributions was constrained by the ability of the low-skilled to pay. This in turn meant that benefits could be set above a minimum level only if the state agreed to contribute a substantial subsidy to the social insurance fund, which was not politically or financially feasible. Faced with this dilemma, Beveridge chose to “sacrifice the principle of subsistence to the requirements of his other principles.”28
How do Beveridge’s benefit rates compare to Rowntree’s human needs and physical efficiency standards? Veit-Wilson points out that Beveridge’s benefit level for a single man or woman was “two-thirds or less” of Rowntree’s human needs scale, although he admits that the allowances for children set by Beveridge were more generous than those set by Rowntree.29 Gazeley found that the relationship between Beveridge’s recommended benefits and Rowntree’s human needs scale differed substantially across family types. For a couple with no children or one child, Beveridge’s rate was 75–78% of Rowntree’s human needs scale, for a couple with three children the scales were the same, and for a couple with four children Beveridge’s rate was slightly above Rowntree’s scale. Gazeley calculated that Beveridge’s recommended benefits for families with one to four children were 31–35% above Rowntree’s primary poverty scale, which would seem to go against Veit-Wilson’s conclusion that the approach used by the Beveridge Committee in setting benefit scales “was indistinguishable in principle and . . . in composition from the primary poverty measures described by Rowntree in 1899.”30
Why didn’t Beveridge set benefits at a higher level? Despite his 1941 statement that the committee should devise an “ideal scheme” of social security, Beveridge, in writing the report, faced two constraints, one perhaps self-imposed, the other real. The first constraint revolved around an issue that by 1942 already had been debated for over a century—the effect of public assistance on work incentives. At the beginning of the report, Beveridge wrote that one of the “guiding principles” he adhered to in making recommendations was that “the State in organising security should not stifle incentives, opportunity, responsibility; in establishing a national minimum, it should leave room and encouragement for voluntary action by each individual to provide more than that minimum for himself and his family.” The role of social insurance was to guarantee “the minimum income needed for subsistence”; setting benefits much above subsistence would create work disincentives and would be “an unnecessary interference with individual responsibilities.”31 Veit-Wilson, Glennerster and Evans, and others, perhaps rightly, have criticized Beveridge for accepting the Victorian concept of “less eligibility.” Still, the concern of many economists, government officials, and politicians over the possible disincentive effects of state benefits put Beveridge under some constraint in setting benefit levels.
Even if Beveridge had not been bothered by questions of less eligibility, he could not have avoided the issue of cost. Concern among government officials regarding the possible cost of his scheme began months before the report was released. One of those concerned about affordability was Keynes, who was very enthusiastic about the general scheme. A major reason for this concern was the fact that no one knew what British national income would be when the war ended—forecasts varied from £6.5 billion or less to £7 billion. In a note to Sir Richard Hopkins at Treasury in June 1942, Keynes wrote that “to commit ourselves here and now or in the near future to what we could only afford on the assumption of a national income comfortably in excess of £m6,500 would be very imprudent.” Keynes opposed Beveridge’s plan for fixed weekly contributions on theoretical grounds, as they were in effect a poll tax on workers and an employment tax on firms. However, he argued that such contributions should be retained “in order that the additional charges on the Budget may not look altogether too formidable.”32
Beveridge met with Keynes several times during the spring and summer of 1942 to iron out the plan’s finances. Keynes suggested ways to reduce costs by about £100 million, some of which Beveridge accepted. In the end, Keynes concluded that “Beveridge has made a manful effort to meet the financial criticisms which have been made,” that he made “very large concessions from the first version of the scheme,” and that his revised proposals were not “open to serious criticism on purely financial grounds.” On the last point he was overly optimistic. The Chancellor of the Exchequer, Kingsley Wood, believed that even the revised proposal was financially impractical and premature. He wrote Churchill in November complaining that Beveridge and others were assuming that the war’s end would usher in a Golden Age of prosperity, and added “the time for declaring a dividend on the profits of the Golden Age is the time when those profits have been realized in fact, not merely in the imagination.”33
In sum, as Veit-Wilson admits, there were political reasons for many of the ambiguities in the Beveridge Report. Those regarding costs and the level of benefits were to a large degree conscious, as Beveridge was trying to construct a document acceptable both to those demanding a New Britain and to the Treasury. However, not all the blame for the ambiguities should be assigned to Beveridge. In an October memo, Keynes wrote Hopkins that he had asked Beveridge to “speak less precisely” about the level at which postwar benefits and contributions would be set. Keynes believed that the report was a “grand document,” and he wanted to maximize the probability of getting a version of it adopted by Parliament. The best way to do that was to keep some of the financial details a bit vague.34
II. Debate over and Implementation of the Welfare State
On December 2, 1942, the day after his report was issued as a Command Paper, Beveridge discussed his “Plan for Social Security” in a radio address. He concluded the address with an appeal to the Prime Minister. The plan, he said, “is a completion of what was begun a little more than thirty years ago when Mr. Lloyd George introduced National Health Insurance, and Mr. Winston Churchill, then President of the Board of Trade, introduced Unemployment Insurance. . . . The Minister who thirty years ago had the courage and imagination to father the scheme of Unemployment Insurance, a thing then unknown outside Britain, is the man who is leading us to victory in this war; I’d like to see him complete as well the work that he began in social insurance then.”35 The reaction of Churchill and the Cabinet to the report was far less positive than Beveridge had hoped. The Cabinet was divided, with reactions ranging from positive to lukewarm to damning. This is not surprising given the coalition government, but there was division not only across parties but also within both the Conservative and Labour parties. On January 12, 1943, Churchill circulated a note to the Cabinet stating that a “dangerous optimism” regarding the possibilities for postwar Britain was growing among the public. The government needed to be cautious because the state of the postwar economy was uncertain, and the Beveridge proposals might prove to be unaffordable. He therefore asked Cabinet ministers to refrain from making promises about the future, “because I do not wish to deceive the people by false hopes and airy visions of Utopia and El Dorado.”36
Parliament debated the Beveridge Report on February 16–18, 1943. Churchill had recently returned from Casablanca and was ill with pneumonia, but sent another note to the Cabinet on February 14 regarding how to handle the debate. The note’s tenor was different from that of the previous month. He wrote that Beveridge’s “approach to social security, bringing the magic of averages nearer to the rescue of the millions, constitutes an essential part of any post-war scheme of national betterment.” A government body should be set up to examine the feasibility of the particular proposals, and to reshape them in preparation for legislation. He added, however, that the government could not at this point make any commitments regarding postwar policy. This would be a task for the Parliament elected after the war, which could mold social legislation to existing economic conditions.37
The debate did not go well for the government. Its three main speakers—Sir John Anderson on the 16th, Sir Kingsley Wood on the 17th, and Herbert Morrison on the 18th—gave somewhat conflicting views on the Beveridge Report. Anderson unenthusiastically stated that the government approved the scheme in principle but would make no “binding commitment.” Wood emphasized the need for a cautious approach and stated that the government’s duty was to “weigh all the financial implications of the Beveridge plan so that hopes incapable of fulfilment should not be held out.” Morrison, in the most positive speech, reiterated that the government needed to “watch finance,” but stressed that it accepted most of Beveridge’s “fundamental principles.” The division at the end of the debate produced 121 votes against the government, including 97 from Labour. This represented an “unprecedented rebellion,” the most votes against the government up to this point in the war.38
The Economist’s leader of February 20 criticized Anderson and Wood for the lack of vision, courage, and “practical idealism” in their speeches, which “outraged Parliament and a large part of the public.” It added, “The Government must say Yes or No. They cannot sit on the fence. . . . Is the prevention of want to be a first charge in any event?” The political fallout from the government’s position quickly became apparent. There were six by-elections in February, a “general election in miniature,” and the Beveridge Report figured prominently in each of them. In five of the elections, all Conservative-held seats, the government candidate won by a very small majority against an Independent candidate, and in four contests the Conservative vote declined by an average of eight percentage points. A Home Intelligence department’s survey in late February found that a “disappointed majority” thought the government was “trying to kill or shelve the Report,” which “augurs ill for the future of social security.”39
The outcome of the parliamentary debate, the results of the by-elections, and the Home Intelligence reports regarding public opinion caused Churchill to modify his position on social security. He still doubted whether the Beveridge Plan was affordable, and he wanted to focus on winning the war before worrying about the peace, but the strength of public and parliamentary support for the Beveridge Plan forced his hand. According to Addison, “reconstruction . . . flowed around and past [Churchill], like a tide cutting off an island from the shore.”40
On March 21, 1943, the Prime Minister made a radio address to the nation titled “After the War,” which focused on postwar reconstruction. Throughout much of the address Churchill sounded once more like the “young redistributor” of the decade before the First World War. After stating that he refused to tell “fairy tales” to the British people or to make premature pledges “to impose great new expenditure on the State,” he proceeded to “peer through the mists of the future to the end of the war.” He advocated the government adopt a four-year plan covering “five or six large measures” concerning social policy. Without mentioning the Beveridge Report (although he once referred to “my friend Sir William Beveridge”), Churchill said the time was ripe for “another great advance” in social security, and he and his colleagues in the government were “strong partisans of national compulsory insurance for all classes for all purposes from the cradle to the grave.” He also called for government employment policies, education reform, child allowances, and a national health service, stating that “there is no finer investment for any community than putting milk into babies. Healthy citizens are the greatest asset any country can have.” No promises could be made during the war, but the government will undertake “every preparation, including, if necessary, preliminary legislative preparation . . . so that when the moment comes everything will be ready.”41
The government began preparing for postwar social policy shortly thereafter. A White Paper on A National Health Service was issued in February 1944 by the Ministry of Health, followed by White Papers on Employment Policy in May and Social Insurance in September, both issued by the Ministry of Reconstruction. The proposals laid out in these papers were similar to those made by Beveridge. A National Health Service stated that the government planned to provide every man, woman, and child with “a comprehensive service covering every branch of medical and allied activity, from the care of minor ailments to major medicine and surgery” free of charge. Funding of the health service mainly would come from national and local taxation, although part would come from contributions “under whatever social insurance scheme is in operation.”42
The White Paper on Social Insurance was in some ways remarkably similar to the Beveridge Report. It began by stating it was the government’s duty “to plan for the prevention of individual poverty resulting from those hazards of personal fortune over which individuals have little or no control.” Like the Beveridge Plan, the White Paper proposed to cover the entire population, to increase the level of unemployment and sickness benefits and retirement pensions, to create a system of family allowances, and to include a system of National Assistance for those who fell through the safety net. Insurance benefits would be funded by a “tripartite scheme of contribution,” with a combination of employee and employer contributions paying for five-sixths of most insurance benefits (except unemployment) and the state contributing the remaining one-sixth; the contribution for unemployment benefits would be shared equally between employees, employers, and the state. Family allowances and national assistance would be funded entirely by the Exchequer.43
The White Paper accepted Beveridge’s notion of a flat rate of contributions and flat rate of benefits. However, the benefits were in some cases less generous than those envisioned by Beveridge. The White Paper stated it was “not practicable” to adopt “a subsistence basis for benefits” for two main reasons. First, the insurance scheme, which “must necessarily deal in averages of need and requirement,” could not be adapted to the nearly “infinite variety of individual conditions.” Second, the scheme’s contributory nature meant that any increase in benefits required an increase in employee contributions. The benefit level should be set to provide “a reasonable insurance against want” while taking into account the “maximum contribution which the great body of contributors can properly be asked to bear.” The White Paper also set the weekly cash allowance for each child at a level below that set by Beveridge. Finally, while Beveridge proposed that unemployment and sickness benefits be continued as long as needed, the White Paper set limits on both, calling sickness benefits of unlimited duration “psychologically unwise” and unemployment benefits subject to abuse. It concluded by thanking Beveridge for his “comprehensive and imaginative Report” and noting that much of his plan was embodied “in the proposals set out in this White Paper.” It then ended with a flourish, stating that the proposed plan provides “against every one of the main attacks which economic ill-fortune can launch against individual well-being and peace of mind,” and calling social insurance “a necessary means . . . to achieving positive effort and abundant living.”44
The Ministry of Reconstruction produced its White Paper on Social Insurance without input from Beveridge, who wrote that by March 1943 “it became clear to me that the Beveridge Report was no longer my concern.” The following month he began an investigation of policies to maintain full employment, which led to his book Full Employment in a Free Society, published in November 1944, six months after the publication of the White Paper on Employment Policy, which had been produced quickly to ensure it would appear before Beveridge’s book. Beveridge responded by adding a postscript to Full Employment criticizing the White Paper for underestimating “the seriousness of the disease” of unemployment and for its inadequate practical proposals.45
The White Paper began by stating that after the war “the maintenance of a high and stable level of employment” would be one of the government’s “primary aims and responsibilities.” It added, however, that government policy by itself could not guarantee a high level of employment, which required in addition expanding export markets, reasonably stable wages and prices, and “sufficient mobility of workers between occupations and localities.” The White Paper proposed two main policies to maintain a high level of employment. The first involved the use of countercyclical public investment. Local authorities should annually submit to the appropriate departments five-year programs of capital expenditure. The government would consolidate these proposals, and adjust public spending upward or downward as needed to maintain employment at a high level. During periods of declining private investment, it would, “by granting loan sanctions or otherwise facilitating finance, bring forward projects which otherwise might have had to wait for a later opportunity.” The other policy involved varying weekly social insurance contributions of workers and employers according to the state of the economy, to maintain a high level of private consumption. Contribution rates would be lowered when unemployment was above the “estimated average level” and raised when unemployment was below average. The decline in payroll deductions during downturns would increase workers’ disposable income and thus “help to maintain demand for consumers’ goods.” The idea of varying contribution rates according to the state of the economy was originally suggested by economist James Meade in the spring of 1942, and was discussed briefly in the Beveridge Report.46
The White Paper’s discussion of the budgetary effects of its policy recommendations was confusing and ambiguous due to its attempt to be acceptable to both Keynesian and orthodox economists within the government. It stated that none of its major proposals “involves deliberate planning for a deficit in the National Budget in years of sub-normal trade activity,” but added that this “does not mean a rigid policy of balancing the Budget each year regardless of the state of trade.” In other words, the budget need not be balanced “in a particular year” but it “must be balanced over a longer period.” This period could not be too long, since any “undue growth of national indebtedness” would reduce public confidence in the economy.47
The White Paper was “epoch-marking,” but according to Beveridge it did not go far enough, being “an anti-cycle policy” when what was needed was a program that “takes as its aim freedom from idleness and sets out a Policy of Full Employment to achieve that aim.” Full Employment in a Free Society provided just such a policy. Beveridge asserted that the government should use its “responsibilities and powers” to maintain full employment, which he defined as “having always more vacant jobs than unemployed men . . . [jobs] at fair wages, of such a kind, and so located that the unemployed men can reasonably be expected to take them.” To accomplish this task, the state would have to substantially increase its role in the economy. First, and most important, it needed to ensure that national income was large enough to provide jobs for all those who were available to work—in Beveridge’s term, it needed to maintain “at all times adequate total outlay.” But large regional differences in unemployment between the wars demonstrated that adequate outlay was not enough; jobs and workers needed to be brought together. To do this, the government should create a National Investment Board that would, among other things, control the location of industry. It would be empowered to prohibit firms from locating in areas where employment already was plentiful and to encourage them to locate in areas where jobs were needed most. Finally, full employment requires a flexible labor supply, which should be promoted by policies to secure the “organized mobility of labour.” Because “changes in the demand for labour are inseparable from progress . . . if and when change is necessary, men and women shall be willing to change their occupations and their places of work, rather than cling to idleness.”48
Whereas the White Paper was ambiguous in not defining what it meant by a “high” level of employment, Beveridge argued that the government should strive for an unemployment rate of no more than 3%. The few without work would be seasonally or frictionally unemployed; Beveridge described them as “the irreducible margin of labour required to be standing by at every moment to make change possible . . . a shifting body of short-term unemployed who could be maintained without hardship by unemployment insurance.” He admitted that his estimate of full employment was far more optimistic than other estimates, or his own earlier estimates for that matter—in his 1942 report he had assumed that after the war the average unemployment rate would be about 8.5%, although he hoped it would be possible to reduce it below that number. Most if not all economists in the government thought his estimate wildly optimistic. Even Keynes, in a note to Beveridge shortly after Full Employment was published, wrote, “No harm in aiming at 3 per cent unemployment, but I shall be surprised if we succeed.”49
Only one plank of the welfare state was put into place by the Coalition government. In June 1945, a month after VE Day and a few weeks before the general election, Parliament adopted the Family Allowances Act, authorizing the payment to all families of 5s. per week for each child after the first, up to school-leaving age. The benefit rate was that suggested by the White Paper on Social Insurance, and below that supported by Beveridge. Benefits were paid for out of general taxation, and were not means tested.50
In late May, shortly after the breakup of the coalition government, Churchill called for a general election to be held on July 5. While the election manifestoes of the Conservative and Labour parties differed on many major issues, both called for the adoption of compulsory national insurance, a national health service, and policies to maintain employment at a high level. The Conservative Manifesto proposed to adopt the policies recommended by the White Papers on Social Insurance, A National Health Service, and Employment Policy, and stressed the important role that private enterprise must play in promoting the economic growth necessary for the adoption of social security. The Labour Manifesto asserted that while all parties claimed to support social legislation, Labour had “led the fight” for social security while the Conservatives were in power, and only “the Labour Party is prepared to achieve it.” The manifesto argued that the Conservatives support full employment if it can be obtained “without interfering too much with private industry,” while Labour was willing “to keep a firm public hand on industry in order to get jobs for all.” Labour supported “planned investment in essential industries” and control over the location of new factories to ensure that there would be “no depressed areas in the New Britain.”51
Many explanations have been offered for Labour’s landslide victory in the 1945 general election. The issues considered most important by the British people in the run-up to the election, as revealed by polling, were housing, full employment, and social security. In the words of Peter Hennessy, these issues “were Beveridge’s ‘Giants on the Road to Recovery’ translated into voters’ preoccupations and, given Labour’s greater emphasis upon them and the Conservatives’ lack of credibility as giant-killers, translated into voting intentions as well.” The electorate, “with memories of the 1930s still fresh” in their minds, did not “trust the Tories with the reconstruction of Britain.” Viewed this way, Labour’s victory was a victory for the Beveridge Plan. Ironically, Beveridge, who had won a 1944 by-election as a Liberal, lost his seat to a Conservative, one of the few Conservative gains in the election.52
The Labour government quickly went to work implementing the welfare state. The National Health Service Act was adopted in 1946, although the British Medical Association engaged in a running battle with Aneurin Bevan, the Minister of Health, almost up to the day the law went into effect, July 5, 1948. The year 1946 also saw the adoption of the National Insurance Act, which represented “the core of the Beveridge Report.” It provided flat-rate sickness and unemployment benefits, retirement pensions, widows’ benefits, maternity and funeral grants, and guardians’ allowances, paid for by flat-rate contributions by employees and employers, and by general taxation. The weekly benefit rate for unemployment, sickness, and retirement was 26s. for a single individual and 42s. for a married couple. These nominal benefits were slightly greater than the provisional level of postwar benefits (24s. and 40s.) included in the Beveridge Report. Beveridge obtained his benefit rate by taking the benefits he had calculated for 1938 and increasing them by 25% to account for wartime inflation. The Minister for National Insurance, James Griffiths, wrote that he increased benefits by 2s. “to maintain the Beveridge level,” meaning that wartime inflation had been somewhat greater than Beveridge had assumed. Griffiths informed the House of Commons that “we have in this way endeavoured to give a broad subsistence basis to the leading rates.” However, Abel-Smith contends that both the Coalition and Labour governments had “fiddled” with the cost of living index, so that it understated the actual increase in prices for poorer working-class families. As a result, Griffith’s benefits were below those set by Beveridge in real terms. To make matters worse, the act did not index benefit levels to take account of annual changes in the cost of living—benefits were to be reviewed every five years, and adjusted then if necessary. When the insurance scheme came into operation on July 5, 1948, prices were 72% greater than in 1938 while benefits were only 31% greater than those originally set by Beveridge; in real terms “benefit rates were nearly a third below what Beveridge had recommended as necessary for subsistence.” Thus, from the beginning benefits failed to meet one of the key criteria envisioned by Beveridge and the government. For reasons that are not clear, this erosion of the purchasing power of social insurance benefits did not receive much attention in the late 1940s.53
The National Assistance Act, adopted in May 1948, was the final plank in Labour’s welfare state. The act abolished the Poor Law, in the 350th anniversary year of its enactment, and replaced it with the National Assistance Board to act as a residual relief agency. In doing so it shifted the responsibility and cost of assisting those who fell through the cracks of the social insurance system from local and county authorities to the central government. The act provided means-tested cash allowances to persons either who were not eligible for national insurance or whose insurance benefits needed to be supplemented. Beveridge had argued that the level of national assistance should be “less desirable” than insurance benefits. In practice, this often turned out not to be the case. Assistance benefits were set slightly below insurance benefits, but those receiving assistance typically had their “full actual rent” paid in addition, so that some recipients received more than they would have if they had been eligible for insurance benefits.54
Labour’s election manifesto also had pledged a policy of “jobs for all” and elimination of the depressed areas. The fulfillment of this pledge turned out to be easier than expected. Although the unemployment rate reached 12% during the “Great Freeze” in February 1947, it was down to 2.9% two months later, and remained at that level or below until reaching 3.0% in January 1959. From June 1948 through December 1951 the peak U.K. unemployment rate was a mere 2.0%, in January 1949. The only region that could be classified as depressed between 1949 and 1955 was Northern Ireland, where the average unemployment rate was 7.2%. The North of England, Scotland, and Wales, each of which had severe unemployment problems between the wars, had unemployment rates averaging less than 3.0% from 1949 to 1955. Unemployment rates in the South of England during this period averaged less than 1.5%, and in the Midlands less than 1.0%.55
What role did the Labour government play in maintaining full employment? It helped to reduce unemployment in the depressed areas by influencing the geographic distribution of new jobs, using financial inducements and coercion to get firms to locate new plants in the North, Scotland, or Wales rather than in the South or South Midlands, where employment was plentiful. Some historians also contend that the government helped to keep the aggregate unemployment rate low through the use of Keynesian demand-management policies, and most working-class voters at the time viewed Labour as “the party of full employment, the party which had exorcized for ever the ghosts of Jarrow, Wigan, and Merthyr Tydfil.” The notion that government policy played an important role in maintaining full employment has been disputed by economists. Matthews, in a seminal 1968 paper, raised “serious objections” to the view that full employment was a result of “the Keynesian revolution.” He argued that the postwar decline in demand deficiency was not a result of expansionary fiscal policy because the government “persistently had a large current account surplus.” Rather, postwar Britain experienced “a gigantic cyclical boom,” driven by a high and sustained level of private investment. Tax incentives helped prolong the boom, but it largely was a historical accident, a result of pent-up investment opportunities that had been stifled by two world wars and the interwar slump. This does not mean, of course, that government full employment policy failed, but rather that, in the words of Cairncross, it was “rarely put to the test in the 1950s and 1960s. . . . The government never had to handle a situation in which full employment was really in jeopardy.”56
National Insurance and the National Health Service were brought into operation on July 5, 1948, the third anniversary of Labour’s election victory. Two days earlier an article in the Daily Mail summed up the public’s anticipation: “On Monday morning you will wake up in a new Britain.” Griffiths, who as Minister of National Insurance had done much to bring the day about, wrote in his memoirs, “Beveridge called for a crusade to slay the five giant evils which afflicted our society—poverty, ignorance, disease, squalor, and idleness. Within three years of our electoral victory, the Labour Government had provided the legislative framework and created the organization designed to rid our country of all five.”57
To what extent did the new policies reduce the poverty rate? In 1951 Rowntree provided an estimate of the effects of the new social policies in his third survey of York, Poverty and the Welfare State, coauthored with G. R. Lavers. The book’s purpose was to examine “how far the various welfare measures which have come into force since 1936 have succeeded in reducing poverty.” Rowntree and Lavers estimated the percentage of working-class persons and households living in poverty in 1950 (using a poverty standard comparable to that of 1936) and compared it to the percentage found by Rowntree to be living in poverty in his 1936 survey. They found that York experienced a “remarkable decrease in poverty” between the two surveys. In 1936, 31.1% of the working-class population was living in poverty; in 1950, only 2.8% of working-class individuals and 4.6% of working-class households were in poverty. The causes of poverty also changed over time. In 1936 the major causes had been unemployment and inadequate wages of persons in regular employment, whereas in 1950 no families were in poverty because of the unemployment of the chief wage earner, and only 1% of the poor were in poverty because of low wages. The main causes of poverty were old age (68.1% of poor families) and sickness (21.3%). The government announced an increase in retirement pensions shortly after the survey was undertaken, and Rowntree and Lavers estimated that if the more generous pensions had been in force when the survey was done the share of working-class households in poverty would have been 1.95% rather than 4.64%.58
To determine the extent to which the “remarkable” reduction in poverty was due to the adoption of welfare legislation, Rowntree and Lavers adjusted social insurance benefits and contributions to 1936 levels, and deducted from household income “the value of food subsidies, family allowances, school milk, cheap milk for infants, and free school meals where granted.” These calculations revealed that in the absence of post-1936 welfare programs some 22.2% of working-class individuals and 24.7% of families would have been living in poverty. Without the welfare state, the share of persons or families in poverty in 1950 would have been lower than in 1936, but still would have been quite high. Finally, Rowntree and Lavers calculated what the share in poverty would have been in 1950 if the welfare state was in place but the unemployment rate in York was 8.8%, its level in 1936. In this scenario, 9.1% of working-class families and 7.9% of individuals would have been in poverty. The recent welfare legislation “substantially reduced the amount and the severity of poverty” that resulted from unemployment. In sum, if the welfare state had not rid the country of poverty, it had reduced poverty rates to very low levels.59
The book was published less than two weeks before the 1951 election and, as might be expected, it made quite a splash. Its findings were “eagerly seized on by the Labour Party as impartial and irrefutable evidence of . . . the benefits of their rule.” The Manchester Guardian hailed “the ending of poverty,” and Lavers himself claimed that “to a great extent poverty has been overcome by the Welfare State.”60
No other town-level surveys similar to that of Rowntree and Lavers were undertaken during the 1950s. Perhaps as a result, most Britons at the time assumed that the social welfare policies adopted in 1945–48 had virtually eliminated poverty. This was unfortunate, because in recent decades Atkinson et al. and Hatton and Bailey have shown that there were problems with Rowntree and Lavers’s analysis and that their results were seriously misleading. Hatton and Bailey reanalyzed the surviving data from the 1950 survey and found that 8.9–11.8% of working-class households and 5.7–8.6% of individuals were in poverty. That is, the actual poverty rate in York was roughly twice that reported by Rowntree and Lavers. Hatton and Bailey also recalculated what the poverty rate in 1950 would have been in the absence of post-1936 welfare programs and found that the welfare reforms caused the share of working-class households in poverty to decline by 9.8 percentage points, about “half that suggested by Rowntree and Lavers.” What caused Rowntree and Lavers to underestimate the poverty rate and overestimate the effects of the welfare state? It appears that “a number of different biases crept in during the process of measurement.” These biases mostly went in the same direction, and in combination produced overly optimistic results.61
Hatton and Bailey’s findings support the notion that the welfare reforms of 1945–48 should be viewed “as a set of incremental changes to social security, rather than as the birth of an entirely new system.” They also support the views of academics who had questioned Rowntree and Lavers’s results from the beginning. As early as 1952, Peter Townsend argued that there was “reason to doubt” both the findings of the third survey of York and the role played by the welfare state in reducing poverty. He maintained that since the war prices were increasing faster than insurance benefits and that as a result “the benefits conferred under the National Insurance scheme have been increasingly inadequate in recent years in providing for the necessities of subsistence, even in the stringent Beveridge sense of ‘subsistence.’” To the extent that the rate of poverty had declined since the war, it was due more to full employment and rising wages than to the welfare state.62
The optimism of the 1950s was dealt a blow in 1965, when Townsend and coauthor Brian Abel-Smith, in The Poor and the Poorest, presented new information that led to what has been called “the rediscovery of poverty.” Abel-Smith and Townsend examined the extent of poverty in 1953–54 using household-level expenditure data collected by the Ministry of Labour and the Rowntree-Lavers poverty standard adjusted to take price changes from 1950 to 1953–54 into account. They found that 4.1% of persons in their national sample (and 5.4% of households) were in poverty in 1953–54, as compared to Rowntree and Lavers’s estimated 1.7% of the population of York in 1950. Another 4.0% of persons lived in households with expenditures less than 20% above the poverty line, and 6.6% were in households with expenditures between 20% and 40% above the poverty line. Some 14.7% of the persons in their sample, “representing about 7½ millions in the population,” were living either in poverty or at the margins of poverty.63
Abel-Smith and Townsend’s analysis of poverty in 1953–54 together with Hatton and Bailey’s reanalysis of poverty in York in 1950 present a different and less optimistic picture than that contained in Rowntree and Lavers’s book. The extent of poverty had indeed declined since the 1930s, but the combination of economic growth, full employment, and the adoption of the postwar social security system had failed to eliminate poverty.
The information presented in this chapter shows that the set of policies proposed in the Beveridge Report and the resulting welfare legislation of 1945–48 were to a large extent the logical extension of—in Beveridge’s words “a completion of”—the expansion of the role of government in social welfare policy that began with the Liberal Welfare Reforms of 1906–11. This does not mean, however, that Beveridge should be described as backward-looking, or that the importance of the postwar legislation should be downplayed. Beveridge’s proposals were different from the Edwardian or interwar social welfare policies in at least three important respects. First, while the earlier legislation covered only the working class, and in some cases only the poor, the Beveridge Plan was universal, covering the entire British population. Second, the National Health Service, as proposed by Beveridge and adopted by the Labour government in 1948, went far beyond the health benefits provided before the war. One of the most, if not the most, important aspects of the National Health Service was its notion of equal treatment—all citizens were to have equal access “to whatever medical treatments they required.” Third, the Beveridge proposals shifted much of the cost of social security to the central government, and thus to general taxation. Family allowances were completely paid for by general taxation, and most of the costs of the National Health Service also were funded by the Exchequer. The adoption of National Assistance and the abolition of the Poor Law shifted the entire cost of residual relief from the localities and the counties to the national government.
In sum, while the Beveridge Plan should not be considered as revolutionary, it was far more than a simple extension of the Liberal Welfare Reforms. Because of the adoption of the National Health Service, universal coverage, and equality of treatment, Britain after 1948 deserves to be referred to as a welfare state, while Edwardian Britain and interwar Britain do not. Unfortunately, despite the enthusiasm with which the welfare state was greeted by the British public, the policies adopted in 1945–48 did not reduce poverty and insecurity to negligible levels. Those historians such as de Schweinitz, quoted at the beginning of this chapter, who maintained that the Beveridge Plan marked the culmination of Britain’s quest to eliminate economic insecurity, were mistaken. Beveridge may have enabled the British people to glimpse the Celestial City of social security, but neither he nor the postwar Labour government were able to lead them to the gates. The social welfare legislation of the 1940s did not represent “the end of the road of social reform.”64
The rediscovery of poverty in the 1960s led to a sharp increase in the attention given by academics to the effects of social welfare legislation, and the amount written on post-1950 British social policy is immense. I have little to add to this literature, and so this book ends where many histories of the welfare state begin, with the adoption of the postwar Labour reforms. The next and concluding chapter summarizes the major issues raised in the book and the changing nature of British social policy from the 1830s to 1950.
1. Beveridge (1942: 19); Harris (1997: 373–76); Barnett (1986: 27–28).
2. This short document contains the germ of many of the ideas that appear in the 1942 report and has been called “the first draft of the Beveridge Report.” It can be found in the Beveridge Papers, LSE Archives (BEVERIDGE/9A/41/1).
3. Times, “Freedom from Want,” December 2, 1942: 5. The Financial Times was less enthusiastic. In an editorial titled “From Cradle to Grave,” it noted that the report represented the view of only one person, stressed the plan’s high cost, and concluded that any move to put it into practice in the near future “would be inopportune, to say the least.” Financial Times, “From Cradle to Grave,” December 2, 1942: 2.
4. On Beveridge’s backward-looking assumptions, see Glennerster and Evans (1994) and Veit-Wilson (1992).
5. Barnett (1986: 11–24).
6. Times, “The New Europe,” July 1, 1940: 5. For another example, see Priestly (1967: 51–58).
7. Excerpts from “A Plan for Britain” and introductory comments from the editor of Picture Post can be found in Hopkinson (1970: 15, 90–99). I thank Amanda Goodall for bringing the report to my attention.
8. Beveridge (1953: 296–97). The Trades Union Congress’s statement is in Parl. Papers, Social Insurance and Allied Services, Appendix G: Memoranda from Organisations, Paper 3 (1942–43, VI), pp. 13–17.
9. A condensed version of the Political and Economic Planning report is contained in its memorandum to the Beveridge Committee. Parl. Papers, Social Insurance and Allied Services, Appendix G, Paper 7 (1942–43, VI), pp. 34–37.
10. Titmuss (1950: 508–9); Addison (1975: 104).
11. Harris (1992); Harris (1997: 367–69); Leaper (1992: 20–23); Lowe (1990).
12. Tawney (1941: 46). The quote is similar to statements in Tawney (1920) and (1931).
13. Beveridge (1942: 171).
14. Addison (1975: 17–18).
15. Beveridge (1942: 5–7).
16. Beveridge (1943: 92); Beveridge (1942: 6).
17. Beveridge (1942: 121–22, 10–11).
18. Beveridge (1942: 141–42).
19. Beveridge (1942: 154–58). In his words, “with its present rate of reproduction, the British race cannot continue; means of reversing the recent [downward] course of the birth rate must be found.”
20. Beveridge (1942: 158–63); Beveridge (1943: 94).
21. Beveridge (1942: 163–65); Beveridge (1943: 50–60).
22. Beveridge (1942: 107–16).
23. Beveridge (1942: 11–12); Harris (1997: 409). Beveridge referred to social security benefits funded entirely from taxation as the “Santa Claus state.”
24. Beveridge (1942: 122, 170).
25. Beveridge (1942: 165–66).
26. Beveridge (1942: 165–67).
27. Beveridge (1942: 14); Harris (1997: 382); Veit-Wilson (1992: 282–84, 296–97). Timmins (1995: 52) disagrees with the charge that Beveridge was “consciously ambiguous.” He concludes that Beveridge made “no real attempt to hide the essential arbitrariness” of his method for arriving at benefit rates.
28. Glennerster and Evans (1994: 57, 61–62); Timmins (1995: 59).
29. Veit-Wilson (1992: 284, 294); Veit-Wilson (1994: 103–5). The main reason for the large discrepancy between the two scales is that Beveridge included little for personal sundries, such as beer, tobacco, a wireless, or a daily newspaper, expenses that Rowntree included in his human needs scale. Rowntree (1937: 98–101).
30. Gazeley (2003: 153–56). Hatton and Bailey (1998: 580–83) compared the Rowntree/Linsley human needs scale with the Beveridge scale for London in 1930 prices, and obtained results similar to those found by Gazeley. Excluding rent, the Beveridge poverty line for a single adult male was 60.9% of the Rowntree line. However, for a couple the Beveridge line was 4.7% above the Rowntree line, and for a couple with three children it was 10.2% above the Rowntree line.
31. Beveridge (1942: 6–7, 14, 76, 118–22, 143, 154, 170, 293). Compare Beveridge with Wells’s ([1905] 1967: 155) comments on incentives in A Modern Utopia: “The modern Utopia will give a universal security . . . but it will offer some acutely desirable prizes. The aim of all these devices, the minimum wage, the standard of life, provision for all the feeble and unemployed and so forth, is not to rob life of incentives but to change their nature, to make life not less energetic, but less panic-stricken and violent and base.” At a memorial service held for Wells shortly after his death, Beveridge read from A Modern Utopia, calling it “the book which had influenced him most” (Smith 1986: 484). Beveridge’s 1948 book Voluntary Action stressed the important role of voluntary organizations in postwar Britain.
32. Keynes (1971: 204, 206, 216, 223–24). In another note to Hopkins, Keynes referred to “the ‘fiction’ of a contributory system,” and then offered several reasons for retaining it.
33. Keynes (1971: 220–55); Timmins (1995: 45).
34. Keynes (1971: 246–47, 255).
35. Beveridge (1943: 86).
36. Churchill (1950: 861); Timmins (1995: 44–46); Addison (1975: 220–21).
37. Churchill (1950: 862).
38. Addison (1975: 223–25); Timmins (1995: 46–48); Barnett (1986: 30); Times, “Financing the Beveridge Proposals,” February 18, 1943: 4; Times, “Beveridge Plan Division,” February 20, 1943: 2; Financial Times, “Premier May Seek a Confidence Vote,” February 19, 1943: 1. One of the votes against the government was cast by Lloyd George, his last vote in the House of Commons. In his autobiography, Beveridge (1953: 323–25, 331–33) wrote that after his report was published members of the government ignored him, and that “the Government boycott of me became formal and explicit” after the parliamentary debate. He added: “no member of the Government of any party, other than the Minister of Information, spoke to me about my Report after it had been made, or discussed any of its proposals with me.”
39. Economist, “The Parting of the Ways,” February 20, 1943: 225–26; Economist, “By-Elections,” March 6, 1943: 293; Addison (1975: 225–27); Timmins (1995: 48).
40. Addison (1975: 126); Lowe (1990: 158); Timmins (1995: 48–49).
41. Churchill’s speech is in James (1974: 6755–65). The description of the pre-1914 Churchill as “the young redistributor” is from Lindert (2003: 316).
42. Parl. Papers, Ministry of Health, A National Health Service (1943–44, VIII), pp. 5, 46–47.
43. Parl. Papers, Ministry of Reconstruction, Social Insurance, pt. I (1943–44, VIII), pp. 5–7.
44. Parl. Papers, Ministry of Reconstruction, Social Insurance, pt. I (1943–44, VIII), pp. 7–9, 17, 40. The White Paper set unemployment and sickness benefits at the nominal level suggested by Beveridge, but the increase in prices by 1944 was higher than he had predicted, so that in real terms benefit levels were lower. According to Abel-Smith (1992: 14), few members of Parliament, aside from the recently elected Beveridge, criticized the decision to set benefits below the subsistence level.
45. Beveridge (1953: 328–31); Beveridge (1944: 259–74).
46. Parl. Papers, Ministry of Reconstruction, Employment Policy (1943–44, VIII), pp. 3–6, 15–24; Keynes (1971: 208–9); Beveridge (1942: 164–65).
47. Parl. Papers, Ministry of Reconstruction, Employment Policy (1943–44, VIII), pp. 24–26. On the debate among government economists regarding policies in the White Paper, see Peden (1983; 1988), Tomlinson (1987), and Booth (1987).
48. Beveridge (1944: 17–19, 29, 32, 36, 131–35, 166–75, 272).
49. Beveridge (1944: 126–28); Beveridge (1942: 164); Keynes (1971: 381).
50. On the reasons why allowances were set at 5s. per week rather than Beveridge’s suggested 8s., see Macnicol (1980: 192–94). The first family allowances were not paid until August 1946.
51. The Election Manifestos are in Craig (1970: 87–105).
52. Hennessy (1992: 85); Timmins (1995: 62); Beveridge (1953: 347–49); Morgan (1984: 36–44).
53. Timmins (1995: 112–38); Morgan (1984: 151–63, 170–73); Beveridge (1942: 89–90, 150); Abel-Smith (1992: 14–15); Peden (1985: 153–54).
54. Abel-Smith (1992: 14–16); Chambers (1949: 70–71).
55. Great Britain, Department of Employment and Productivity, British Labour Statistics: Historical Abstract 1886–1968 (1971: 306, 316, 328).
56. Morgan (1984: 180–84); Timmins (1995: 133); Matthews (1968); Cairncross (1981: 374).
57. Timmins (1995: 127); Griffiths (1969: 88).
58. Rowntree and Lavers (1951: 1, 26–36). Rowntree was 80 years old when the survey was undertaken. Hatton and Bailey (2000: 522–26, 537–41) discuss the extent to which the 1950 poverty scale was indeed comparable to Rowntree’s 1936 human needs scale.
59. Rowntree and Lavers (1951: 36–40, 46–49).
60. Kynaston (2009: 28); Hatton and Bailey (2000: 517). Rowntree, like Beveridge, was a supporter of the Liberal Party, and one wonders how he felt about Labour politicians’ use of his conclusions.
61. Atkinson et al. (1981); Hatton and Bailey (2000: 526–36).
62. Hatton and Bailey (2000: 536). Townsend’s 1952 essay is included in Townsend (2010: 136–47).
63. Abel-Smith and Townsend also examined poverty in 1953–54 and 1960 using a “national assistance standard,” and estimated that the percentage of persons living in households with expenditure/income less than 140% of the government’s national assistance scale increased from 7.8% in 1953–54 to 14.2% in 1960. Abel-Smith and Townsend (1965: 16–17, 35–36, 57–58).
64. On the definition of a welfare state, see Briggs (1961). Titmuss (1956: 6).