THE BEVERIDGE Report advocated full employment and the creation of a welfare state. It was 1942 and the second world war had raised workers’ expectations of a better future. Thousands had died and those returning felt they deserved decent jobs and better living standards after their sacrifice.
The organised working class had long fought for better health provision and social security. Most people hated the 350-year-old ‘Poor Law’ and saw the idea that people should only receive relief from the state in the workhouse as barbaric.
Many of the ruling class also feared a return to the hungry 1930’s which had provoked mass movements of the unemployed and a wave of revolutionary struggle across Europe. Capitalism also needed a fit new generation of workers to rebuild the economy, so a ‘welfare state’ suited their needs as well.
The welfare state was supposed to offer social protection to everyone as a right. It would offer a network of services to provide a foundation of support.
The Beveridge report was seen as the cornerstone of this plan. Beveridge wrote of attacking the five giants of ‘Want, Disease, Ignorance, Squalor and Idleness’. He said workers and employers should pay contributions in return for a ‘comprehensive’ system of social insurance.
This would be free at the point of use and cover people from cradle to grave. The main areas were:
- Provision of unemployment and sickness benefit, maternity benefit, widows’ benefit and pension, retirement pension and other grants.
- A free National Health Service.
- A system of Children’s Allowances.
- An Industrial Injuries Scheme.
- Training schemes for the unemployed.
Inadequate benefits
HOWEVER THIS scheme, intended to provide for people particularly during periods when they weren’t in work, had serious deficiencies. It took no account of such needs as disability, divorce and long-term unemployment, where people were unable to contribute.
Benefits were inadequate and held at an unreasonably low level. They provided for subsistence levels only – enough to cover the costs of physical existence but not enough for a basic standard of living, let alone replacing income lost due to redundancy or sickness.
Seebohm Rowntree had previously worked out how much families needed for a minimally decent standard of living. But Beveridge recommended lower levels which bore no relationship to the cost of living.
In many European countries benefits are linked to what people previously earned. Britain is the exception. After all the alterations to the benefit system since the 1940s, they bear no relationship to minimum needs today. As several studies prove, benefits are not enough to live on.
Changes have led to more and more means-testing of benefits rather than providing for everyone as intended. The welfare state should have helped prevent poverty but there’s one major contradiction.
You have to be poor already in order to receive help. As soon as someone’s income increases they lose their benefits. This creates a poverty trap. The poor pay the highest marginal tax rates in Britain because of the combined effect of tax and benefit withdrawal.
Blair’s distortions
TONY BLAIR’S speech was suggesting a further move away from ‘universalism’ – a system providing for everybody free at the point of use, which he calls “paternalistic”. He said that the 1945 government had inherited a society where “70% were have-nots” and made it into one where “70% were haves.”
This is a smokescreen. The shift away from ‘cradle to grave’ provision has come about because of capitalism’s economic crisis. The bosses want to boost their own profits by paying less tax and they are creating an ideology to justify this.
Blair’s ‘reforms’ in all services are meant to solve this problem. In higher education for instance, it means individual students paying tuition fees and/or a graduate tax and getting into debt through loans.
Blair claims that the welfare state is “associated with fraud, abuse, laziness, a dependency culture, social irresponsibility encouraged by a welfare dependency.” This is not just insulting but a total distortion of the truth.
On social security, supposedly 2% of benefits claimed prove fraudulent. However this figure is based on the fact that large commercial organisations assume they will lose 1-2% through fraud. But Benefits Agencies, unlike department stores, don’t lay money out on display and invite people to walk round with shopping trolleys!
Even if this figure is correct, this is a tiny amount compared to the sums taken by big business’s tax evasion and fraud, which goes unchallenged by the government.
Blair’s attitude harks back to the philosophy of the Poor Law, implying that it’s a person’s own fault if they are poor. Of course the reason for poverty is economic.
Big business constantly tries to increase profits. During recession in particular, companies protect themselves by putting workers on the dole and driving down wages. Long-term unemployment has mushroomed because of the destruction of manufacturing industry, not because of welfare.
Health divide
THE WELFARE state’s crowning glory was the National Health Service. Since 1948 this reform has benefited the working class and poor. However massive inequalities remain in health care today.
A postcode lottery exists, where those who are less well off tend to have greater need and yet have less access to health care than the rich. If anything, the divide between rich and poor has got worse.
None of this is helped by New Labour’s policies. The Private Finance Initiative (PFI) in particular, hands over hospital buildings and equipment to private companies who, in general, have no experience of providing health care.
Staff employed by these companies tend to have worse pay and conditions than those employed by the NHS. PFI often involves these companies borrowing money to pay for new buildings or refurbish old ones. The NHS then pays them back, with interest, over many years.
This is obviously more expensive than if the NHS did the job itself. Most projects cost well over what was originally estimated.
The next step on the road to the NHS’s dismantling is the government’s proposal of ‘Foundation Hospitals’. These will operate in the private sector, free from government involvement. They will be able to raise money, buy and sell, hire and fire at will.
A major benefit of public services has been that they are, to an extent, accountable to the people they serve. These private companies however, are accountable only to their shareholders.
This move will make inequalities in health even worse. It will lead to a two-tier health service, no doubt being able to afford the best equipment and possibly the best staff. Of course, as with Railtrack, the taxpayer will pay when it all goes wrong.
This is certainly not what was intended when the NHS was set up. The privatisation of public services, shows how whole-heartedly New Labour has become the party of big business and turned its back on the working class. The picking apart of the welfare state to allow companies to make more profit has accelerated under this government.
Even our hard-won pensions will no longer be protected, and people will be expected to take out private insurance to cover their retirement.
End profiteering
DESPITE PROPAGANDA that welfare costs are out of control, the welfare state has always been extremely cheap. Compared with most of Europe, Britain spends very little. If anything private finance will increase costs and lead to a less effective service.
The push towards NHS privatisation benefits only big business. However after decades of under-funding, there clearly must be a radical improvement in how the health service, and the welfare state generally, is run.
The NHS needs to be better integrated (between hospitals, primary care, community care, social services, public health, occupational health, dentistry etc) with better co-operation between different sections to give people the best possible service.
This must be publicly funded. Trade unionists and communities must step up the campaign to eliminate profiteering from the NHS. We need a fully accessible service which provides for everyone equally, not the present postcode lottery.
The Socialist Party calls for the immediate reversal of PFI and PPP (Public Private Partnerships). The money is there for a decent welfare state now. But extra funding is undoubtedly required. Nationalising the pharmaceutical industry, which makes billions in profit from people’s illness, could raise this.
At present several different companies make similar drugs to compete against each other for the same market. Nationalisation would help direct research at finding cures for diseases and developing treatments for less common illnesses which don’t make companies a profit at present because they aren’t a big enough market.
Recruiting and keeping staff would be far easier if pay and conditions were improved and people felt they were achieving something useful for society rather than constant crisis management.
Nationalising the pharmaceutical companies and private utilities would let us use their enormous profits to develop the NHS and welfare state, instead of lining the bosses’ pockets.
All charges for health care should be completely abolished. Democratically elected, fully accountable, representatives of workers and welfare-state users should be actively involved in deciding how it’s run.
We also stand for a decent living pension, increasing annually and linked to average earnings. Full employment could be achieved by reducing the working week without loss of pay. However, those unable to work should be given a decent level of benefit and offered the choice of training or jobs without compulsion.
Socialist solution
THE WEALTH and technology exist under capitalism to achieve these simple demands. But the bosses would not let many of these measures take place as they would cut across their profits.
As long as capitalism exists, our public services and welfare state will be under threat. Past governments have proven incapable of running the welfare state to provide for our basic needs. That’s why the transformation of society along socialist lines is the only way forward.
Not just the NHS, but the banks and big manufacturing industry would be under democratic workers’ control under socialism. This would allow society to tackle the root causes of ill-health – poverty, poor housing, pollution – and give people the opportunity to lead productive lives in the knowledge that society will care for them properly in return.
All of these things and more could be provided for under socialism. A system which plans what society needs and sets about producing it rather than putting profit before people, could even end the need for a welfare state in time.
Everyone would be able to help develop a better society. There would be no stigma attached to the idea of society ‘providing for’ people’s needs, as co-operation rather than competition between people would be the norm.
