A modern Beveridge
I contributed to the BBC’s excellent Radio 4 programme this morning commemorating the seventieth anniversary of the Beveridge Report. They asked me to set out what I thought needs to be done to bring it up to date, and this is what I said:
One person was missing from Danny Boyle’s brilliant Olympics opening ceremony. William Beveridge, more than anyone, helped shape what defines modern British society.
His report came after the lost decade of the 1930s – when an economic crash caused mass unemployment, rising poverty and a big gap between rich and poor. It came in the middle of a war when people of all backgrounds were making the ultimate sacrifice. That shared national purpose made people think about the kind of country and future they were fighting for. At times of national or economic adversity that’s always more important.
Beveridge’s answer was that we had to eliminate the five great evils: Squalor, Ignorance, Want, Idleness, Disease. His great insight was that it is easier and cheaper if we work together as a society to do this.
That makes us stronger and better as a country – one in which we work together in solidarity and where we pool social risk. We put in when and what we can through tax and National Insurance. That provides the services on which we all draw, and the extra help when we need it – when we retire, have children, fall ill or lose our jobs.
The best example is health. The NHS doesn’t just provide care based on need, it does it far more cheaply than the US system where individuals fend for themselves with many falling through the cracks.
Beveridge’s insights remain as true today as they were in the 1940s. But they need renewal.
A modern Beveridge should go back to his first great cause – full employment. He did not blame the unemployed, but understood that a market economy does not always generate the jobs needed to provide work for all. Government must steer the economy, and when necessary directly provide work. We need to get back to that – and the greatest challenge now is to provide jobs for the young.
But society has changed. Beveridge lived in a world of extended families and male breadwinners. He gave us the right tools. But we need to apply them to today’s society – one where women want to work and we need the contribution that they can make.
To do that we need universal childcare. And with many more women working the economy grows and pays for the initial investment made.
We need the same approach for social care. The growing numbers of older people and others who need care can get better help, more efficiently delivered, when we make it a proper new pillar of the welfare state.
And lastly a modern Beveridge should go back to perhaps his most old-fashioned building block – social insurance. We all make contributions – and the richer rightly pay more – so that we can draw on them when we need to.
That principle has been undermined. Take the old age pension. It used to go up in line with earnings or prices, but we were told in the 1980s that we could no longer afford this. Instead we pumped billions into tax relief to encourage people to build up inefficient private pensions. But that goes overwhelmingly to the top ten per cent. Two-thirds of tax relief goes to higher rate taxpayers.
Beveridge would have been appalled – and so should we. So let’s go back to Beveridge basics, boost collective pensions, and stop these hand-outs to the rich.