Poverty increasing. Welfare state in crisis. Do we need a new Beveridge Report?
Heather Rawling, Leicester Socialist Party
It hasn't always been like this. Food banks, zero-hour contracts, homelessness crisis, an NHS unable to cope. The landslide 1945 Labour government created the welfare state and transformed the lives of millions of working-class people.
The reforms were largely based on the recommendations of the 1942 Beveridge Report. Improvements in housing, health provision and education had been fought for by the labour movement. Trade unionists had long made demands for nationalisation of the coal, steel and railway industries.
Many of the hard-won gains introduced by the post-war Labour government are long gone.
The pandemic has revealed stark inequalities in today's society. The poorest areas have been hit hardest by Covid, with about twice as many deaths as in the richest areas.
Child poverty is on the rise and those already in 'deep poverty' have seen the biggest reduction in their earnings, either being furloughed, having their hours reduced, or being laid off.
So do we need another Beveridge Report? Is it possible to restore the welfare state to its original mission of caring for people 'from cradle to grave' and creating a safety net to prevent destitution? Or do we want to create something better?
In truth, the post-war welfare state was not ideal. There was still poverty, and there was still homelessness. We had a National Health Service but the pharmaceutical industry was left in private hands. Even so, it was a huge improvement on the past.
However, the welfare state was created at the beginning of one of the biggest and most sustained economic booms the world has ever seen. That is not the situation today. Capitalism as a system is in deep crisis. The world economy was heading for recession even before the pandemic. Covid has merely accelerated underlying processes. In 2020, the UK economy recorded its worst economic performance for over 300 years - worse than the slump after the First World War and the Spanish flu.
The original report outlining a universal welfare state was written by a liberal, William Beveridge, and published during the Second World War. It promised to overcome what he patronisingly called the 'five giants' of Want, Disease, Ignorance, Squalor and Idleness.
But why would a liberal pen such a report? It was written when the Labour Party was in coalition with the Conservative Party. The two main classes in society - the ruling class owners of finance and big business, and the working class - had different reasons for supporting it.
The Great Depression of the 1930s had caused mass unemployment and deprivation for many. Governments acted in the interests of the ruling class. They sought to make the working class pay for the collapse in world trade as they erected trade barriers. The 1931 National Government issued an emergency budget involving drastic cuts in public spending and wages, and a rise in taxation.
The effects on the industrial areas of Britain were immediate and devastating. By the end of 1930, unemployment had more than doubled from 1 million to 2.5 million. Unemployment benefits were severely means-tested and limited to 15 weeks. Many became destitute.
The cruel and barbaric workhouse system was abolished in 1930, but many workhouses - renamed Public Assistance Institutions - continued under the control of local county councils. At the outbreak of World War Two almost 100,000 people were accommodated in the former workhouses, including 5,629 children.
The soldiers of the Second World War were poorly nourished and not as fit for battle as the ruling capitalist class would have preferred. But they didn't just need fit soldiers to defend British interests around the world, they needed a fit workforce to mine the coal, manufacture the steel and produce goods to sell globally. Moreover, the ruling class was concerned that the extreme poverty that they had inflicted to save their economic system might provoke rebellion and revolution.
The report recommended that proposals for the future should not be limited by "sectional interests". A "revolutionary moment in the world's history is a time for revolutions, not for patching". But I don't think Beveridge had in mind a socialist revolution! Rather, these reforms were to head off any revolutionary movements.
The capitalist class and their representatives in parliament were terrified of a post-war revolutionary wave around Europe. Many of them welcomed the Beveridge recommendations. The Times called the report "a momentous document which should and must exercise a profound and immediate influence on the direction of social change in Britain".
However, Winston Churchill and the Conservative Party opposed much of the implementation of the Beveridge Report, including voting against the founding of the NHS.
Churchill was in favour of postponing the implementation of Beveridge until the end of the Second World War and 'the financial situation was known'. Only 29% of the public agreed when parliament voted for postponement.
Workers gave their verdict on Churchill in 1945 when they elected a Labour government with a massive majority.
The working class saw in the report promises of a brighter future. Those that survived the war wanted well-paid jobs, decent homes, and better living standards after the sacrifices they had made. The Labour manifesto promised to address Beveridge's five 'giants'.
The Beveridge Report aimed to provide a comprehensive system of social insurance 'from cradle to grave'. He was opposed to the hated and degrading means testing - a mainstay of the Poor Law for the destitute pre-1945. Workers would now pay a flat-rate weekly contribution and, in return, benefits would be paid to the unemployed, the sick, the retired and the widowed. Family Allowance - a payment for each child - was introduced and paid directly to the mother. Workhouses were finally abolished.
However, the proposals were flawed in many ways: they discriminated against women and there was still the idea of the 'deserving' and 'undeserving' poor. Benefits were inadequate and at mere subsistence level. They bore no relation to the cost of living. But in a situation of almost full employment during the post-war boom they did provide a safety net for many working-class people.
However, as the post-war boom came to an end in the mid-1970s, successive governments looked to restore capitalist profitability at the expense of the working class. Years of cuts and austerity have decimated the benefit system. In July 2020, 5.6 million relied on the hated Universal Credit for their income. £257.33 per month for single claimants under 25. £324.84 per month for single claimants aged 25 or over isn't even subsistence. The overall effect has been to plunge people already on low incomes into rent arrears and debt and, in some cases, homelessness.
In the 1930s there were soup kitchens. Today we have food banks. In February 2021 there were over 2,200 food banks in the UK. Means testing increasingly underpins the benefit system, eroding the universalism of the original welfare state.
The Socialist Party says:
- No to all cuts in jobs, public services and benefits
- Defend our pensions. An immediate 50% increase in the state retirement pension as a step towards a living pension
- Scrap Universal Credit. For the right to decent benefits, education, training or a job without compulsion
- A shorter working week with no loss of pay
The National Health Service Act of 1946 gave everyone free health care at the point of entry. Labour's minister of health, left-winger Nye Bevan, came up against fierce opposition from the upper echelons of the medical profession and 'stuffed their mouths with gold' to overcome their resistance. From its birth, the NHS has existed side by side with private medicine.
Today, big business and private medicine have made huge inroads into healthcare. The Private Finance Initiative is crippling the NHS: an initial £13 billion investment by private companies could cost the NHS £80 billion over 30 years.
Many services, such as cleaning and catering, have been outsourced to private companies, and this process has accelerated during Covid. There are charges for dental treatment and the opticians. Even before the pandemic there were 100,000 unfilled posts as pay has been frozen and the NHS has been starved of funds. The NHS is not safe in Tory hands.
The Socialist Party says:
- Reverse privatisation of the NHS. Bring all outsourced workers and services in-house on permanent contracts
- Abolish PFI and all associated debts
- Kick out the private contractors
- A 15% pay rise for all health workers
- A socialist NHS to provide for everyone's health needs, free at the point of use and under the democratic control of health workers and users
The 1944 Education Act was implemented by the Labour government in 1947. It raised the school leaving age to 15. All local authorities had to provide primary, secondary and further education. Prior to that, most working-class children remained in elementary school until aged 14.
However, the 11+ exam remained, creating a three-tier secondary school system of grammar, technical and secondary schools. At age 11, children were allocated to a school according to their 11+ results. They would be trained for their future working life as academics and professionals, typists and draughtsmen, and factory hands.
Comprehensive education was later introduced by a Labour government, although grammar schools still existed in some parts of the country and 'public' schools still educate the children of the rich.
Maintenance grants for university students, although means tested, were paid by the state as well as tuition fees.
Following on from the marketisation of universities, education is gradually being privatised as academy trusts take over many schools, creaming off funds for managers and threatening education staff's pay and conditions.
The Socialist Party says:
- Free, public and democratically run high-quality education available to all at any age
- End the marketisation of university education. Abolish tuition fees and introduce a living grant
- No to academies and free schools
- Free, publicly funded nursery education for all children who require it
Fresh in people's memories was the empty promise of building homes fit for heroes after the First World War. 1.2 million new houses were built from 1945 to 1951, when the programme officially ended: 156,623 of the homes were prefabs. Twelve new towns were also planned to reduce overcrowding. However, the 1951 census revealed that there was approximately the same level of homelessness as in 1931. There were 750,000 fewer houses than was needed and many slums still existed.
The Socialist Party says:
- Implement a massive building programme of publicly owned housing on an environmentally sustainable basis to provide good quality homes with low rents
- Nationalise the banks and building companies under democratic workers' control and management
The 1945 Labour government nationalised steel, iron, gas, coal, electricity and railways, which helped to keep unemployment rates low. However, these were all ailing industries that had suffered chronic lack of investment going back decades. Yet they were vital industries to the post-war economy.
The government paid massive amounts of compensation to the owners of these industries and left the original bosses in charge.
All of these industries are now in private hands, sold off at knock-down prices to profiteers.
The Socialist Party says:
- Renationalise all privatised industries under democratic workers' control and management. Compensation paid only on the basis of proven need
- Organise a trade union struggle for an immediate increase in the minimum wage to £12 an hour without exemptions as a step towards a real living wage of £15. For an annual increase in the minimum wage linked to average earnings
- Scrap zero-hour contracts. Workers' rights from day one of employment
- Fully fund a public scheme of socially useful and environmentally friendly jobs on decent rates of pay
The war against the Covid pandemic has exposed the weaknesses of capitalism on a world scale. Over 150,000 have died in the UK, over 3 million worldwide. Many deaths were preventable. Failure to lockdown early enough, failures of effective test and trace, lack of PPE, inadequate benefits to enable people to self-isolate, inadequate workplace health and safety - all this contributed to the death toll.
Government spending in the financial year 2020/21 was £394 billion, the highest figure outside of war time. But the capitalist class and its political representatives will attempt to make the working class and the poorer sections of society pay. Furlough is coming to an end in October as well as the top up to Universal Credit. Local councils are passing on public spending cuts to workers.
We cannot let this happen. The heroes of the pandemic are the key workers, the health and care workers who risked their lives and some made the ultimate sacrifice. Capitalism will not offer us a decent future. We need socialism. To achieve that, we need a mass working-class party that can bring together workers in struggle. United on a socialist programme, workers have the potential economic and social power to end capitalism. By nationalising the banks and finance institutions, and big business, under democratic workers' control and management, a socialist government would lay the basis for democratically planning the economy and society and creating a welfare state that genuinely cares and looks after its people from cradle to grave.
In The Socialist 28 April 2021:
May Day Greetings 2021