unpaid service’24 – proved in tune with the times. Mass Observation recorded 70 per cent of women giving the report, with its recognition of the value of unpaid women’s work, unqualified support.25 Some did see through the rhetoric, recognising that the improvements Beveridge’s proposals undoubtedly brought did not fundamentally change the married woman’s position. Elizabeth Abbott and Katherine Bombas, for example, in a 1943 pamphlet for the Women’s Freedom League, argued that ‘the actual proposals … leave her as before, a dependant and not a partner’.26
In fact the framework Beveridge had chosen – a work-based scheme, founded on employee contributions – inevitably left women who did not work dependent on their husbands’ contributions. The other failures of the scheme included its inability to deal adequately with the large post-war rise in single parenthood, divorce and separation, but to blame Beveridge for that is a little like blaming medieval armourers for not foreseeing the effects of gunpowder. In 1938 there were just 10,000 divorce petitions. By 1945 the number had increased two and a half times, but still only to 25,00027 – a tiny fraction of their twentieth century peak of 183,000 in 1995.
Disability, too, presented difficulties. For those injured at work a separate industrial injuries scheme could be created. And for those not injured at work who simply became disabled, unemployment benefit was available if they had paid sufficient contributions. Others, however, would have to fall back on means-tested national assistance and local authority services. Carers do not feature in the report, in part because if married women are not expected in the main to work, they are there for other ‘vital duties’. And Beveridge could not have foreseen the extent to which medical science would preserve life among many more people who acquired their disability at birth or in childhood and so never had the chance of qualifying for non-means-tested benefits through insurance contributions.
If these were the chief issues Beveridge failed to resolve – issues that are with us still – his report also reflects vividly the conflicting goals that ran through the debates about social security both before and after its publication. Throughout, he attempted to balance rights with duties, incentives against security, and individualism against collectivism. Thus he wanted as far as possible to have benefits paid as of right, without the means-tests which he said made help available ‘only on terms which make men unwilling to have recourse to it’.28 But he balanced that with the duty of having to contribute.
Benefit in return for contributions, rather than free allowances from the State, is what the people of Britain desire. This desire is shown both by the established popularity of compulsory insurance and by the phenomenal growth of voluntary insurance against sickness, against death and for endowment, and most recently for hospital treatment. It is shown in another way by the strength of popular objection to any kind of means test. This objection springs not so much from a desire to get something for nothing, as from resentment at a provision which appears to penalise what people have come to regard as the duty and pleasure of thrift, of putting pennies away for a rainy day. Management of one’s income is an essential element of a citizen’s freedom. Payment of a substantial part of the cost of benefit as a contribution irrespective of the means of the contributor is the firm basis of a claim to benefit irrespective of means.29
There was another reason why Beveridge went for an insurance system rather than a tax-based one. In the 1940s liability for income tax started much higher up the income scale than it does now. Many in the working class did not pay. As late as 1949 a single man did not start paying income tax until he was earning 40 per cent of average manual wages, while a married man with two children under eleven had to earn fractionally above average manual earnings to pay any income tax at all. Over most of the next fifty years, under governments of all colours, the income tax threshold fell as government spending – not just on the welfare state – expanded. By 1992, the equivalent percentages were down to below 25 per cent and 29 per cent respectively.30 It is one factor that led lower earners progressively to question the value of the welfare state.
Beveridge was clear that he did not want a ‘Santa Claus’ state which appeared to give something for nothing, and in the 1940s a tax-based social security system would have been chiefly paid for by business, the then much smaller middle class, and those above them. What the less well paid did already have to find, however, were the existing national insurance contributions for the health and unemployment schemes. Unlike income tax, they were used to paying these. Indeed, Beveridge went to some lengths to suggest, with questionable accuracy, that the contributions he proposed amounted to ‘materially’ less in aggregate than the sums already paid out for national insurance contributions, for voluntary policies covering sickness, death and endowment, for hospital treatment policies and for medical fees.31 It was another reason why he wanted ‘Benefit in return for contributions, rather than free contributions from the State’. In suitably Thatcherite terms, he also argued that citizens ‘should have a motive to support measures for economic administration’ and ‘should not be taught to regard the State as the dispenser of gifts for which no one needs pay’.32
Furthermore, Beveridge worried about incentives to work and to save and to encourage people to take responsibility for their own lives. ‘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 the minimum for himself and his family.’33 Indeed, in harsher words later in the report, he said that ‘to give by compulsory insurance more than is needed for subsistence is an unnecessary interference with individual responsibilities’.34
Thus his whole scheme was built on a minimum income to provide subsistence, not on the model followed in most of Europe of providing earnings-related benefits. What Beveridge built was a platform on which everyone could stand, with a safety net below it in the form of means-tested national assistance for those who lacked the contributions to qualify. It was, however, a platform down to which anybody who was slightly better off fell if they became unemployed or disabled. He did not, as the continental countries did, attempt to build a system which maintained the individual’s economic place in society, if only for a time. It was to be a minimalist, not a maximalist provision, one that left in Beveridge’s word ‘room’ – in practice incentives – for those who could afford it to provide for themselves over and above the state scheme.
In addition, this minimum provision was to be based on flat-rate contributions in return for flat-rate benefits. Critics have since divined in this the basic flaw in Beveridge’s grand design. He wanted to provide something that took people off means-tested benefits. But because he pitched his insurance benefits at subsistence level – a level that would only meet ‘reasonable human needs’ and even then only for ‘normal’ cases – the amount paid was little different from the sums provided by the safety net of means-tested national assistance. That had to be the case, unless those on national assistance were to be given less than enough to live on – too little to prevent Want. As a result, there was little in financial terms to make national insurance benefits more attractive. Their attraction lay in their being paid by right, without a means-test.
On top of that, however, Beveridge wanted not just flat-rate benefits, but flat-rate contributions in which everyone paid the same for the same cover. That meant the contributions had to be pitched low enough to be affordable by the low-paid. Such contributions, however, were simply not able to generate enough cash to pay benefits at well above the national assistance rates without either a large Exchequer subsidy, which did not appear politically achievable, or much heavier contributions from employers, which would simply be passed on in either lower wages or higher prices. In this way, the very solidarity Beveridge sought – everyone paying the same in return for the same benefit – helped undermine his aim of abolishing Want.
Beveridge’s insistence on a minimum also came about because the man who once believed the unemployed needed the ‘whip of starvation’ to ensure economic advance,35 still worried about work incentives. He in fact favoured, without listing it in his recommendations, a minimum wage. But at the same time he believed that ‘the gap between income during earning and during interruption of earning should be as large as possible for every man.’36 Again, this