Reflections on William Beveridge

At the foundation of the welfare state it was clear that Beveridge was under the same pressure to 'patch' as we too have faced ever since he designed it.

In proceeding from this first comprehensive survey of social insurance to the next task — of making recommendations — three guiding principles may be laid down at the outset.

1. The first principle is that any proposals for the future, while they should use to the full the experience gathered in the past, should not be restricted by consideration of sectional interests established in the obtaining of that experience. Now, when the war is abolishing landmarks of every kind, is the opportunity for using experience in a clear field. A revolutionary moment in the world's history is a time for revolutions, not for patching.

2. The second principle is that organisation of social insurance should be treated as one part only of a comprehensive policy of social progress. Social insurance fully developed may provide income security; it is an attack upon Want. But Want is one only of five giants on the road of reconstruction and in some ways the easiest to attack. The others are Disease, Ignorance, Squalor and Idleness.

3. The third principle is that social security must be achieved by co-operation between the State and the individual. The State should offer security for service and contribution. The State in organising security should not stifle incentive, 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.

William Beveridge from ‘Social Insurance and Allied Services’

Revolutions are difficult precisely for the reason Beveridge identified - they challenge sectional interests. Today the welfare state itself has become one of those sectional interests.

Beveridge also noted that social insurance is only part of what is required, and this is surely correct. However it is noticeable that in the delivery and funding of the welfare state social insurance is one of the weakest elements of the current system. Once we take out the taxes that the poor pay we find that only £25 billion is actually being spent on lifting people in the lowest 40% of earners out of poverty (that's 2.5% of GDP). The vast majority goes on fighting the other 'giants'. May be we've got the balance wrong?

The final principle seems more honoured in the breach than in observance. We have neither a clear minimum nor an encouragement for voluntary action - quite the reverse - obscure entitlements and perverse incentives.

For more thoughts on this see my essay for The Centre for Welfare Reform - Who really benefits from welfare?