"During the last 50 years a comprehensive scheme of national insurance has been gradually developed to become the central feature of our system of social security.” These were the words of the then Minister of Pensions and National Insurance Richard Wood, in a forward to a government booklet: Everybody’s Guide To National Insurance, May, 1964. If this statement does anything at all, it underlines capitalism’s continuing, indeed developing, need for all sorts of compulsory insurance provisions for its working population.
We have come a long way since the days of Lloyd George and his five shilling pension proposals, and the very limited dole and "panel” medicine of the inter-war years. To even these comparatively modest measures, there were always the objectors who thought “the country could not afford it,” but it was Lloyd George himself who shoved his opponents contemptuously aside with the observation that paying a pension was cheaper than maintaining old people in work-houses. And this has been the sort of criterion which has guided the reformers ever since; despite the professed humanitarianism of the Labour Party, their spokesman Jim Griffiths was under no illusion about the aims of national insurance when he commended his sweeping post-war proposals to the Commons on February 6, 1946:
The loss to the Nation caused by preventive illness alone is appalling, for it has been estimated at £300 millions a year, equal to 3/5ths of the cost of the scheme in its initial year. To those who fear we cannot afford this scheme, I would advise them to ask themselves if we can afford to go on without it.
Under this National Insurance Bill, a wide range of “benefits” was enacted based to a large extent on the old Beveridge proposals, and estimated to cost some £452 millions in 1949 and £496 millions in 1955. Contributions were to range from 2/2d. to 4/7d. a week from workers, and their employers were to make weekly contributions ranging from l/9d. to 3/10d. per employee. There was also to be a grant from the Exchequer, and all of this money was to be pooled in the National Insurance Fund, to which would be charged the costs of benefits and administration.
This arrangement has remained largely unaltered over the years, but it is nonsense to suggest, as some Labourites and others were doing then, that the scheme would abolish poverty. Prime Minister Attlee claimed in a Commons speech (February 7, 1946) that “the Bill would help to maintain the high standard of purchasing power among the masses of the people.” But just take a look at some of the benefit rates then, and see if you agree with him: —
Unemployment or sickness 26/-per week (£2 married couple)Pension . . . . . . 26/-per week (£2 married couple)100 per cent Disability Pay 45/-per weekNat. Assistance (ordinary) . . . 50/-per weekfor man and wife (begun 1948) 65/- per week
Incidentally, an interesting and pertinent comment is made on the scheme by M. Penelope Hall in her book The Social Services of Modern England. She says:
One drastic modification in the Beveridge Plan was made at the start. Benefits have never been paid at subsistence level. Beveridge regarded this modification to his scheme as disastrous.
In the 20 years since 1946, government cost estimates have been sadly put out by continuously rising prices and increases in the cost of living, so that various amending Acts have had to be passed, stepping up the benefits and the contribution rates. By 1959, for example, unemployment, sickness and pension rates all stood at 50/- per week single, while National Assistance was at 76/- (normal) and 96/- (special) for a man and wife. This was the year, you may recall, that the Tories were pointing with pride to their achievements in this field, ignoring such uncomfortable facts as 1¾ million people having to apply for National Assistance—about 1.4 millions of them old age pensioners.
But even the Conservatives, jubilant at their 1959 election victory, could not pretend that provisions were adequate, even by the miserable standards that capitalist politicians set, and not long after that their graduated pensions scheme was introduced, which meant larger contributions from those earning over £9 a week, to secure proportional payment in addition to a flat-rate pension. Under such an arrangement, you would get an extra sixpence a week added to your flat-rate pension for every £7 10s. paid in, and when you consider the piffling extent of these changes, you might wonder what all the song and dance was about. Certainly there was nothing from the workers’ point of view, although from the Government’s angle the new scheme gave the pension system some flexibility, and so no doubt was intended to keep down the extra cost.
The whole question of National Insurance was tossed about by the main parties at the 1964 election, and it was becoming apparent anyway that an overhaul was due in the system of payments and contributions. For example, while there was not the heavy and persistent unemployment of the twenties and thirties, there was the question of “labour mobility” and the tiding over of unemployed workers when retraining for new jobs, following the decline of some of the older industries. So the Labour Government’s measures now include compulsory compensation payments to any worker made redundant after a minimum of two years at the same job.
In the government’s social security arrangements, it is interesting that they have retained essentially unchanged the graduated pension scheme of which they had been so scornful when the Tories introduced it. In addition, there is the “Earnings-Related Short-Term Benefits Scheme” which just means that there will be a flat-rate sickness and unemployment benefit of £4 a week minimum, plus further payments, depending on your average weekly earnings between £9 and £30 a week. Here again we see the pressure of present-day conditions in the government’s attempts to offload at least some of the burden of the rising cost of benefits from the central Exchequer. Quite clearly also, the 1946 scales and payment methods no longer suffice to keep workers ticking over in sickness or between jobs, and once more the modern emphasis is on “flexibility”. It could be that this is something we shall see more of in the future, what with the growth of new industries and the decline of the old, to say nothing of plain old-fashioned unemployment because of trade crises.
And what other changes have there been recently? Oh yes, the old Ministry of Pensions and Njational Insurance has been replaced by the brand new “Ministry of Social Security” (surely a contradiction in terms) with responsibility for all the schemes which were formerly administered separately, such as National Assistance. These particular payments will be known as “supplementary benefits” and are a fitting reminder of the way in which reformers' plans can misfire. In 1953, Lord Beveridge admitted that he and the experts had originally expected National Assistance payments to be on a small scale only and to gradually diminish. But, in fact, the very opposite has' happened, and the government has resigned itself to the fact by allowing for increased rates of benefit when the new arrangements start in the autumn.
What all these measures add up to is merely the organisation of 1966 poverty by 1966 methods, and the usual attempts to maintain the workforce at the appropriate standards of health and efficiency to keep capitalism’s production and profits going. It has been the irritating habit of Labourites to claim that these Acts bring dignity to workers’ lives, but their very existence is an indication of the essential indignity of working class life. And despite the increasing intricacy of state insurance and widening of its scope, there are many who stay stubbornly poor even by “Supplementary Benefits” standards. Like the 15,000 families admitted by Assistance Board Chairman Lord Runcorn to be “living on assistance at the moment, at an income well below their needs, because allowances are based on the best estimate that can be made of a man’s future earnings.” Or like “those whose take-home pay is less than they need by assistance standards, although in full employment.”
Eddie Critchfield
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