50 Years Ago: Some Socialist Points on the Beveridge Report (1992)

The 50 Years Ago column from the December 1992 issue of the Socialist Standard

The Times reads into the Report the "confident assurance that the poor need not always be with us”, but this is merely a misuse of terms, and one incidentally for which Beveridge appears not to be responsible. He talks all the time of abolishing “want" by which he avowedly means something quite different from abolishing poverty. By want he means the condition into which the workers fall when their wages stop, not the condition in which they always are because they are carrying the capitalist class on their backs. Beveridge is quite clear about the distinction and says so. Did he not make a statement on December 1 (reported in the BBC news broadcasts but apparently not in the Press) that it had always been his view that want could be abolished within the ranks of the wage-earners without any inroads into the wealth of the rich? He is saying in effect in his Report want could be abolished without interfering with capitalism, but neither he nor the Times want to abolish poverty. But for the poverty of the poor there could be no riches for the rich—a state which he and they find quite acceptable.

[from Socialist Standard, December 1942.]

The State of Medicine (1982)

From the June 1982 issue of the Socialist Standard

The National Health Service was sold to us as a guarantee of health and security but is itself now the invalid of the Welfare State. If not actually bankrupt, it suffers from a lack of much needed investment. If not completely chaotic it is periodically shaken by massive reorganisations which attempt to relieve its administrative problems, often by reintroducing a system previously condemned as restrictive and inefficient. In April 1974 a “three tier” structure was imposed, which severed all links with local authority control; now the latest reorganisation has brought back the District Health Authorities, which include local councillors. At the receiving end of all this are the aptly- named patients, who bring their ailments to the surgery or the hospital in the hope that the NHS is alive and well and competent.

This hope is sustained by a popular misconception of the role of the state as the beneficent, munificent parent of us all its children. This concept springs from the belief that only the state has the resources to run something which is both essential to everyone’s interests and wide enough to operate in that way. For example, the Armed Forces are supposed to protect “our" country, “our" freedom, “our" way of life. The driest of Tories would never suggest that the forces should be owned and financed by private companies—quoted on the Stock Exchange, subject to take-overs, asset stripping and the rest. In the same way, when the coal mines were seen as necessary to the efficient and profitable operation of British industry they were taken away from the fragmented, competitive set-up of the private pit owners and were nationalised.

It was on the same theory that the NHS was born. Before the war, medical services in Britain were disjointed and unco-ordinated, varying in resources and efficiency from one area to another—and not necessarily in accordance with the demands for them. There were over a thousand voluntary hospitals, from large establishments with the most modern equipment and some weightily distinguished consultants down to the small, struggling cottage hospital. About 2000 more hospitals had been founded by local authorities or had sprung from the sick wards of workhouses. They were often precariously financed, living off donations, bequests and flag days, even selling their wall space to the advertisers of patent medicine, which must have been rather confusing to the patients. This haphazard development extended to the other branches of medical care such as GPs, medical inspectors and so on. There was a compulsory medical insurance but this covered only wage earners, excluding their families and was not valid for any treatment other than by a GP.

The war gave an opportunity radically to reshape this confusion into some sort of order and a basis for this was provided by the state-run Emergency Medical Service (EMS) which was at first designed to deal with air raid casualties but whose scope was widened to take in other categories such as evacuated children. The EMS directly employed doctors and nurses, for a wage, and it took over entire hospitals so that by September 1941 it controlled ½ million beds.

At the same time the government was aware of the need to proffer some promises of a better world after the war. as an encouragement to the people who were suffering in the battles, under the bombs and so on. The most famous of these pledges was the Beveridge Report, prepared by a committee which started its work just as Germany was invading Russia and which produced its findings in late 1942. Beveridge promised that “a comprehensive national health service will ensure that for every citizen there is available whatever medical treatment he requires, in whatever form he requires it”.

The coalition government accepted Beveridge’s health service proposals and before their defeat in 1945 two ministers Ernest Brown (National Liberal) and Henry Willink (Conservative) presented plans for a National Health Service on the model suggested in the Report. It was of course left to the Attlee government to push through the necessary Act, to fight the British Medical Association over doctors’ pay and conditions—and eventually to take the credit for what they wrote into history as a great humanitarian reform.

Experience, and the adaptation of the NHS to the everyday needs of a society based on class privilege, have exposed the reform for what it is. Only the most myopic devotee of the NHS would now claim that its services are of the highest possible standard and are freely and equally available to everyone. There is a swelling tide of frustration and disillusionment with the NHS; the 1979 Royal Commission on the NHS commented: “Nor does the evidence suggest that social inequalities in health have decreased since the establishment of the NHS. The position (of partly skilled and unskilled workers) appears to have worsened relative to those in (professional and managerial jobs).”

An essential part of the best treatment is that it should be immediately available; most conditions which need attention can only get worse the longer they are neglected. But one of the big problems of the NHS are the waiting lists, which are well above the half-million mark. An especially grisly economy operates in the waiting lists: economy because it is a matter of resources which are expensive and therefore scarce, and grisly because it often means the death of some of those who are kept waiting. As might be expected, Enoch Powell has described the situation in stark, heartless words:

  If the hospital resources are to be continuously used, there must be awaiting list, a cistern from which a steady flow of cases can be maintained. Private practice can afford to have gaps because patients are buying time. (A New Look At Medicine and Politics.) 

This probably sounds very sensible on the Stock Exchange, or to government ministers who are aware of their responsibility to run this society in the interests of a small minority. The actual flesh and blood people, who suffer and die in the queue, can be expected to see it differently. In the case of kidney disease, for example, the decision to treat or to abandon the sufferer to die is largely dependent on their place in the economic order of priority. One leading kidney specialist has described the dilemma:

  The financial situation is now so acute that children are having to compete with adults for treatment and they tend to lose out because priority has to be given to adults who have families to look after and mortgages to maintain. (Quoted in The NHS — Your Money Or Your Life, by Lesley Garner.)

Many people are trying to escape these obstacles by buying their way into private treatment. The result has been a boom in the insurance schemes like BUPA and Private Patients Plan. Most of this expansion comes from companies who are paying to insure their workers; from their point of view the pay-off is in a quicker, planned admission to hospital, less time off work and easier access to the patient while they are in hospital. (The numbers of people insuring themselves, in contrast, is falling.)

But the private sector too operates on something of a delusion. The kind of insurance which is affordable by wage earners covers only a limited range of ailments—typically, an operation which requires only a brief stay in hospital both before and after the event. It does not cover the chronically sick, the lingering terminally ill, the physically or mentally handicapped, the old people who need intensive nursing during a senility which intensifies towards death. These sorts of ailments can be treated privately but to do so would cost the sort of money which is beyond the scope of the insurance schemes. As one consultant in mental handicap put it: “In mental subnormality you see the patient for the rest of their life”. It is, then, no surprise that BUPA favours a mixed state and private medical service, with the private schemes taking the cream of the short-term patients while the NHS grapples with the rest. A foreseeable result of that would be to depress the state service even further, as investment, doctors and nursing staff were attracted into the private sector.

Whatever the outcome of this conflict, we can be despairingly confident that the basic, vital facts about health and sickness will receive only scant attention. The vast majority of death and disease today does not happen through an accident, nor is it unavoidable. For example, thirty million people die every year from starvation, simply because they are too poor to escape from a famine which itself is the result of the production of food as commodities rather than to meet human needs. Then there are the “industrial” diseases like asbestosis, which are a direct consequence of the way in which some workers get their living and which inflict a brutally slow, agonising death on their victims. More subtly, there is the sickness which can be written into the death certificate as due to other causes but which is in fact the result of the jobs their victims do or the places where they live.

The Working Group on Inequalities In Health recently reported that a labourer, a cleaner and a dock worker are twice as likely to die as is someone in the “professions”; they are twice as likely to suffer respiratory and infectious diseases, have trouble with their circulatory and digestive systems. The distinction is a false one, since both “labourers” and “professionals” are members of the same class but the point is made; it is the former who in many ways suffer the harsher degree of exploitation, the heavier weight of impoverishment. More evidence comes from Professor Harvey Bremner of John Hopkins University, who has spent some twenty years studying the subject. Bremner is convinced that economic stress on workers stimulates physical and mental illnesses; specifically he says that a rise of one million in unemployment over five years could cause an extra 50,000 people to die and 60,000 more cases of mental illness. He also says that Scottish workers are under a peculiar stress, due to a more severe competition between industries there and this is reflected in sickness striking quicker, and more harshly, when there is unemployment.

So it comes down to a matter of class. The working class—those people who need to sell their working abilities in order to live—include those who do the dirty, monotonous, dangerous work as well as those who do the stressful, ulcerative jobs in “management” and the “professions”. It includes the people who crowd into cramped, jerry-built homes under the pollution of industrial capitalism. The other social class, who do not have to work because they own and control the means of life, can afford to live away from all this; they experience no stress of insecurity, their homes are spacious and leisured, they have access to the best of diets. If they want it that way, their lives can be a continuous recreation. The medical care they can command was typified in Tudor Hart’s Inverse Care Law. which laid down that the availability of good medical care varies inversely with the needs of the people it serves. Simply, they can have the best of everything—the best homes, food, education, medicine.

This class do not need the National Health Service, which was designed for the workers, to patch them up and get them back to work as quickly and as productively as possible. Whatever medical care is available to the working class exists only because it contributes, in the short or the long run, to the production of profit and the accumulation of capital. One of the reasons for setting up the NHS, for example, was that it is cheaper to pay for the hospitals, GPs, health centres and the rest through taxation than through the complex process of means testing, claims and rebates which was operated in the private system. Doctors who have trained for years to relieve sickness are persistently faced with agonising choices, based on the demands of a balance sheet rather than human comfort and survival:

   If I abandon or downgrade the patient with advanced cancer of the stomach in favour of two patients with hernia, how do I make a cost benefit analysis? How do I equate the loss of six months dyspepsia-free survival with the economic utility of the return of two breadwinners to work? (Garner, op. cit.)

Well, she or he can’t. The NHS is sick because at best it is struggling against the inexorable demands of the social system in which human needs count for little. Capitalism deprives its people of their dignity in many ways — in sickness and in health and in the end in their tragic, unjustifiable deaths.

Ivan

The NHS, from Birth to Old Age (2018)

From the July 2018 issue of the Socialist Standard

The National Health Service began seventy years ago, on 5 July 1948. One initial consequence was an enormous rush of patients who needed treatment that was now free at the point of use. One doctor, who had qualified on that very day, referred to:

   the colossal amount of very real unmet need that just poured in needing treatment. There were women with prolapsed uteruses literally wobbling down between their legs … It was the same with hernias. You would have men walking around with trusses holding these colossal hernias in. And they were all like that because they couldn’t afford to have it done. They couldn’t afford to consult a doctor, let alone have an operation. (Quoted in Nicholas Timmins: The Five Giants)

There had of course been progress in medical care before the NHS, such as big reductions in infant mortality, increases in life expectancy and much-improved treatment of infectious diseases such as TB. Better sanitation and so on had helped, but medical knowledge had improved too. During the Second World War, the Emergency Medical Service had provided free treatment, not just to war casualties but also to war workers, child evacuees and so on, and had resulted in the creation of a national blood transfusion service.

The Beveridge Report of 1942 advocated the establishment of ‘A national health service for prevention and comprehensive treatment available to all members of the community’. In reality, it was a way of getting workers who were ill well enough to go back to work; and, like most things under capitalism, it was done on the cheap. The talk of prevention entirely missed the point that much illness – both physical and mental – is caused by the way society is arranged, with dangerous and unhealthy living and working conditions and a great deal of stress inflicted on people.

The idea of free treatment lasted just three years, as in 1951 charges were introduced for dentures and spectacles. For the NHS cost far more than the government had expected: two-thirds more than predicted in its first nine months alone. The view that, as better care made people healthier, the cost of the NHS would fall turned out to be an illusion. As time went on, the idea of treatment that was free for all was gradually abandoned more and more, since the capitalists’ taxes simply could not pay the full cost and patients had to bear some of the burden. Free eye tests, for instance, were dropped in 1987. Nowadays only certain categories of people receive free dental care, and a medical prescription costs £8.60 per item (with a number of exemptions).

There were many changes over the years, partly as a result of advances in medical technology, such as transplant surgery, and the introduction of magnetic resonance imaging. But a constant theme was the mismatch between what was needed for patients and what could be afforded. Technical advances meant expensive new equipment had to be purchased; and people are living longer, resulting in them having more and more conditions that need to be treated. There have been frequent reorganisations, and privatisation and outsourcing have become commonplace, all undermining further the original vision of free and equal treatment for all, and they have been introduced in similar ways by both Labour and Conservative governments. Problems with, and cuts to, social care mean increasing difficulties for the NHS, which has more patients to cope with.

A nurse who is a socialist was interviewed in the June 1991 Socialist Standard. She made the point that the reforms brought in that year in April were to ensure that the NHS conformed to the demands of the market. She noted too the absurdity of applying price considerations to the provision of health care: ‘many pieces of technical equipment are unused because nobody can afford to buy their use’.

A particular problem in recent years, though no doubt it existed before, is that of stress among NHS staff. Almost two-thirds of young hospital doctors ‘say their physical or mental health is being damaged because pressures on the NHS are putting them under intolerable strain’ (Guardian online, 11 February 2017). There are also issues with recruitment, some but not all of them due to Brexit and the uncertainty that has created. Employing and retaining general practitioners is a particular problem, with many GP surgeries closing because they simply cannot be staffed. At present there is in all a shortage of at least forty thousand medical staff.

According to the British Social Attitudes survey, public satisfaction with the NHS was at 57 percent in 2017, a drop of six points on the previous year. The main reasons for being satisfied were the quality of care, treatment being free at the point of use, the attitudes and behaviour of staff, and the range of services and treatments available. Dissatisfaction was due to staff shortages, long waiting times, lack of funding, and government reforms. Despite all its problems, though, people consider that the NHS remains a key part of the welfare state.

A decent health care system would have increased resources, and treat both staff and patients far better than happens now. The socialist nurse mentioned above stated, ‘socialist hospitals will keep patients in for longer periods. At the moment hospitals do their best to throw patients out so that their beds can be filled, new money can be made. People need to be properly looked after and capitalism isn’t letting us do that as well as we can and should.’ In fact it is arguable whether keeping patients in for longer is such a good idea, and a socialist health service might well put far more emphasis on prevention rather than cure. But decisions about such matters will be made on the basis of what is in the true interests of those being treated, rather than what serves capitalism and profits.

Paul Bennett

Pensions and Poverty (1954)

From the May 1954 issue of the Socialist Standard

In April, 1908, a young man lost a bye-election in North-West Manchester. He had been President of the Board of Trade in Mr. Asquith’s government, serving on the cabinet with Sir Edward Grey, Haldane and Lloyd George. A brilliant future was predicted for him. His name was Winston Churchill. He was not out of Parliament for long. In the Manchester Reform Club after the count a messenger brought a telegram from the Liberal party in Dundee, inviting him to contest a pending bye-election. Before Dundee voted, the Chancellor of the Exchequer presented his budget, with provision for the payment of old age pensions.

The decision of the Liberal government of 1908 to introduce the Old Age Pensions Act was first announced in the King’s speech in January of that year and was met with cries of, “The country can’t afford it!” (The annual cost was £6 million—today it is over £275 million.) Nevertheless, the year saw the Act passed, granting to people of 70 or over a pension of from 1s. to 5s., subject to a means test. After 1908 many Acts covering sickness and unemployment insurance were passed, including the Widows’, Orphans’ and Old Age Contributory Pension Scheme of 1925— which introduced contributory pensions—and the Old Age Pensions Act of 1936. which allowed non-contributory pensions at 70. Thus when the 1939 war came the Statute Book carried a mass of legislation dealing with national insurance. The system had developed piecemeal and contained many inconsistencies and much overlapping between government departments, local authorities and the Approved Societies.

To unravel this tangle an inter-departmental committee was set up in June 1941, under the chairmanship of Sir William (now Lord) Beveridge, to survey the whole field of social insurance and allied schemes and to make recommendations on their inter-relation. This committee produced in November 1942 the famous Beveridge report. At that time, in the depth of the war, the report appealed widely as a design for a great new world and many extravagant hopes were conceived. Beveridge, himself was, apparently, less sanguine. In the Sunday Times of 14/2/54 he says, “The Beveridge Report . . .  was a model . . .  of financial caution and of moral responsibility, above all in regard to pensions.”

In February 1946 the National Insurance Act 1946 was debated in the House of Commons. Although the Bill was sponsored by the Labour government of the time, the Conservatives gave their support and the second reading was taken without a division. The Act implemented many of Beveridge’s recommendations and covered a wide and complex field. The principle of the “subsistence level”—that is, benefits as of right high enough to command the bare necessities of life—was accepted and a method of adjusting benefits to allow for changes in the cost of living was devised. Minimum old age pensions were immediately raised to 26s. per week, thus rejecting Beveridge’s proposal of a gradual increase over a period of years. Perhaps it was this splash of generosity which moved Mr. Arthur Greenwood to say in the debate on the Bill, “ It . . .  is a contribution to the better life which . . .  the people of this country richly deserve . . . which will enable the people . . . to tread the path of greater freedom with great dignity . . . ”

As laid down in the National Insurance Act of 1946, retirement pensions were easily the most expensive of benefits. It was estimated at the time that in the first year of their payment they would account for half the cost of the entire National Insurance Scheme and by 1976 for two-thirds of the total cost In addition, many people receiving pensions at the new higher rate had only contributed amounts in accordance with the former (lower) pension. Thus it was expected that even if pensions remained at 26s. per week, the expenditure of the pension fund would eventually exceed its income. But the rise of prices since 1946 has reduced the buying power of the 26s., so that in 1951 and again in 1952 it was necessary to apply the principle of the "subsistence level” and increase the minimum retirement pension. Today it stands at 32s. 6d. And old age pensions, whatever the amount will become steadily payable to an increasing number—in the next 20 years the number of people of pensionable age will rise from seven million to 10 million.

These factors have aggravated the problem of balancing the accounts of the National Insurance Fund. The government actuary’s report on the scheme for 1951-52 estimated that only 5 per cent of expenditure on retirement pensions is covered by past contributions: this year is expected to be the last in which the fund’s income from contributions and exchequer assistance will balance with its expenditure. In the future there will be a growing deficit which will rise to about £417 millions by 1978 and which can only be eased by such measures as: (a) reducing pensions; (b) postponing the minimum pensionable age; or (c) increasing contributions. Once again, “. . . the country can’t afford it! . . .” The Manchester Guardian of 10/2/54 commented, “ The problems involved . . .  are such that it could make the financing of National Insurance a main issue at the next election.” So we are nearly back to Dundee, 1908!

Nobody should conclude from this that the life of an old age pensioner is one long spree of riotous extravagance. In fact, the worry of making ends meet presses as heavily today as ever. Both the News Chronicle and the Manchester Guardian have recently published a series of articles on the serious distress of old people. A letter to the editor of the News Chronicle on 4/3/54 told of an unexpected visit on a woman pensioner which found her without a fire, making a dinner of a slice of dry bread and a meat extract cube dissolved in water. In the Manchester Guardian of 11/11/53 appeared the story of a W.V.S. worker who helped to distribute cheap lunches to old people in Poplar. Among those she served was the blind man who lived alone in a room at the top of a lodging house, who never had a fire, a plate or a saucepan. He would sometimes grumble and swear, sometimes smile obsequiously, at the women who brought his food. And there was an old woman who lay in a room congested with dusty Victorian furniture, who never spoke, only glared and spat into a kitchen bowl. These are not exceptional cases. In his report for 1953 the Medical Officer for Brighton recorded some terrible poverty amongst the aged and contended that their lot has actually worsened since the introduction of the so-called Welfare State. The National Federation of Old Age Pensioners’ Associations calculated in May 1953, after a survey of 2,700 pensioners, that the 32s. 6d. per week fell short of a single pensioner's actual needs by 6s. 6d. and that many pensioners were consequently living below the line of subsistence. These facts are hard to reconcile with Mr. Greenwood's promised path of freedom and dignity.

Inadequate pensions have compelled more and more people to apply for National Assistance. In December 1953 nearly one and a quarter million persons who were drawing National Insurance benefits were also receiving National Assistance. About 80 per cent, of these were old and sick. The needs of a single person, excluding rent, are assessed by the National Assistance Board at 35s. per week. In most cases an additional average of 11s. 6d. per week is granted for rent. This payment is subject to a means test. According to the National Federation of Old Age Pensioners, it leaves less than 2s. to be spent on food each day. This, then, is the outcome of the hopes and the promises to care for the aged. We have a pensions scheme, which, whilst fast running into the red, does not provide benefits large enough to keep pensioners on the level of bare subsistence, so forcing them to submit to a means test to obtain assistance which in turn is insufficient. The reformers’ plans have once more gone awry: the means test of so many unpleasant memories is with us again. Lord Beveridge said in the House of Lords on 20/5/53 that “National Assistance, which the experts and I thought would have to continue on a small scale and would gradually diminish, is increasing year by year. Today there are at least twice as many people, nearly two million people, in receipt of National Assistance, subject to a means test, more than there were three or four years ago.”

Old people may well wonder why their burden is always so heavy. Firstly, they are not poor because they are old; but because they are old workers: their poverty is the distilled, concentrated poverty of the whole working-class. It is a condition which only the working-class experience—aged capitalists do not need to apply for National Assistance. Secondly, capitalism is not much interested in old people. Workers live only by their wage, which depends upon being able to work. When working ability is impaired by approaching old age the wage is threatened and eventually ceases. Employers, in their own interests, have most use for young workers—the old, if employed at all, are relegated to such jobs as nightwatchman or doorkeeper. Some firms are generous to their superannuated employees, but they are the exception and have little effect on the problem.

The decline in the working usefulness of old people is reflected in the community at large. They become unwanted, sometimes even by their own families. They are pushed from place to place and increasingly regarded as a nuisance. Some are left to decay in filthy, remote rooms. Others, like the old lady and the blind man in Poplar, maintain a fierce, abusive independence; perhaps they are the most pitiful of all.

It is fear of coming to this that makes workers support pension schemes in our workplaces and pay into the old age endowment policies which the insurance companies organise. The advertisements of these schemes aim to excite response by playing upon the dread of aid age. “ If it hadn’t been for him I should not have been provided for,” says the widow-like lady of one advertisement. The benefits of these schemes may ease old people’s poverty, but its abolition is well beyond their scope.

Despite the years of legislation since 1908, to grow old can still be a catastrophe. Pensions, allowances, cheap subsidised tobacco come and go—the pensioners’ poverty goes on, seemingly for ever. The history of old age pensions is one of despair, makeshift, futility— and distress. It is a fair sample of the history of reformism itself. This lesson must be learnt. Said Henry V to his reluctant soldiers before Agincourt, “Old men forget, yet all shall be forgot . . . " A melancholy phrase. Yet somewhere there must be hope. Is it too much to ask that old men should for once remember? We will settle for that. As a beginning.

Ivan

Where Reformism Fails (1943)

From the March 1943 issue of the Socialist Standard

The dispute between Reformists and Socialists is not a very easy one to disentangle. This is partly due to the variety of arguments put forward by reformists, but above all to the failure of reformists to grasp the Socialist explanation of the problem that has to be solved.

The problem is not that of a social system that is satisfactory on the whole and only needs improvements here and there. If it were the reformist would be on the right road —but then there would be nothing in the Socialist case for the abolition of Capitalism.

Nor is the problem that of a social system which started as capitalist but is steadily evolving towards something fundamentally different, Socialism. If it were there would be nothing in the Socialist explanation of the true nature of Capitalism; that it is a system the character of which is determined by its being based on the division of society into two antagonistic classes, a capitalist class which possesses the means of production, but does not produce, and a working class which produces, but does not possess. The Socialist points to the fact that though capitalism changes in superficial ways, its foundation does not change. The capitalist class are as much the owners and controllers of land, factories, railways, etc., as they were 60 or 100 years ago. Capitalism changes but not in essentials. It does not evolve to Socialism. While the capitalists remain in control of political power they will continue to avert any change which would deprive them of their ownership. They constantly introduce reforms to deal with the most resented effects of their system, but they firmly resist attempts to interfere with the foundation of capitalism which is the cause of the evil effects.

Socialism cannot be achieved without a social revolution, that is a change in the property basis of society, from private ownership to social ownership and democratic control.

In the past most reformists held one or other of the first-mentioned views; either they believed that the social system is essentially sound but needed improvements in detail or they believed that an accumulation of reforms would ultimately produce a fundamental change. We need not here concern ourselves with the first group, since the workers who believe this now are certainly a diminishing number; but the second idea is still the idea that guides the majority of supporters of the Labour Party. The idea is wrong and harmful, not so much because those who hold it labour largely in vain, but because while they continue to hold it they will not direct their efforts to the real task that has to be accomplished.

That the idea is wrong can be seen if a little attention is given to the results of the activities over a number of years. Have those activities been fruitless? If we judge by the very large number of reform measures passed by Parliament in the past 50 years we would say that they have been very fruitful; but if we go to the heart of the matter and ask whether capitalism has become a system in which life is comfortable, happy and secure for the workers we see that the gulf between reformist hopes and their practical achievements is enormous. The legislative changes are too numerous to count but nothing material has been altered thereby. The workers are still poor, still haunted by unemployment and insecurity. The capitalists are still rich, still in control of power. The explanation of this seeming paradox is absurdly simple once it is grasped. It is that reforms do not reform capitalism, nor is that the intention of those who introduce them. Reforms are not positive improvements added to a firm structure but piecemeal measures to alleviate the worst effects of new evils (or old evils grown more acute) as they arise. As each new evil arises or old evils get permanently or temporarily worse the cry goes up that something must be done. The reformers step in with their proposals, but the capitalist State, when it tardily takes action, just does the least that it believes will suffice to patch up the evil. The reform may be a gain for the workers if it is compared with the worst state of the evil just at the time when the reform is introduced, but it may mark a worsening of the workers' position compared with the position a few years earlier when the evil was of smaller dimensions, and still more so when related to society's growing powers of producing wealth. The reformer, however, looks only at the immediate alleviation and forgets that capitalism can go on producing new evils as fast as old ones are temporarily dealt with. As Bernard Shaw, Sidney Webb and others (most of whom failed to act up to their own knowledge) wrote in a "Manifesto of English Socialists" exactly 50 years ago: "Meantime small improvements made in deference to the ill-formulated demands of the workers, though for a time they seem almost a social revolution to men ignorant of their own resource and of their capacity, will not really raise the condition of the whole people."

These words might well be studied by men and women who to-day acclaim the Beveridge Report as "almost a social revolution."

There are still other reformists who say they realise that Socialism is the only solution, and that it requires a basic change in the foundations of society after political power has been obtained for that purpose. Their case for advocating reforms is rather different. They argue, as did Shaw and his associates in the above-mentioned Manifesto, that reforms give the workers more leisure and less anxiety so that they are better able to turn their attention to Socialism; or else they argue that the struggle for reforms is part of a valuable and necessary educational process for the workers. Both arguments could with greater justification be made for the trade unions, where the workers wage their own struggle over wages and conditions of work. Where the argument fails in its application to the Labour Party's efforts for legislative reforms is that it overlooks the part played by the openly capitalist parties. Fifty years ago it was supposed that a Labour Party would take the lead in securing the introduction of more or less drastic reforms, up to and including the time when there would be Labour Governments able to take the initiative in drafting bills and pushing them through Parliament. Nothing like that has happened. Can anyone point to any outstanding Act of Parliament associated in the public mind with the Labour Party? Do the workers remember the two Labour Governments for any bold measures they introduced? On the contrary, despite the spade work of the Labour Party, outstanding reforms are associated with their political opponents, particularly Lloyd George and now Sir William Beveridge.

The Labour Party has worked up agitation for one demand after another, only to see them introduced by Liberal or Tory Governments which naturally reaped whatever credit there was to be obtained. Far from educating the workers towards some ultimate goal, the effect has been rather to persuade them that the capitalist politicians are not so bad after all, for do they not introduce measures similar in name if different in detail from those on the Labour Party programme? At the present time we see a spectacle that is still more remarkable, a Labour Party which believes in leadership yet devotes much of its efforts to popularising the leader of the Tory Party, Mr. Winston Churchill, and heaping its praises on a Liberal, Sir William Beveridge. So far has this gone that probably many Labour voters do not even know who is the leader of their own Party.

After all these years of effort by the reformist parties, capitalism is intact and as powerful as ever. It will continue to be so until such time as the workers turn their attention away from reformism to the task of capturing the capitalist citadel—control of the machinery of government —for the purpose of taking over the means of production and distribution for the community.

Edgar Hardcastle

Labour's bad memory (1981)

From the October 1981 issue of the Socialist Standard

But this is terrible. They have elected a Labour government and the country will never stand for that. (Woman dining at Claridge's, 26 July 1945.)

Thirty years ago—on October 5 1951 to be exact—the British people voted to set themselves free, to expunge austerity from their lives, to replace snoek and dried eggs with good red meat. At least that was what Tory politicians (like Churchill, Eden, Butler, Woolton—how evocative the very names are now) had told them would happen if they got rid of the Labour government.

The government—Labour's first ever with its own majority—was elected, in the final stages of the 1939/45 war, on the promise to build a fair, abundant, secure Britain. What happened, between 1945 and 1951. to swing the voters the other way?

The Labour Party was all but wiped out by the 1929 crash and the MacDonald defection. When the war started in 1939 they were inching their way back to a position where they could challenge the Conservatives' apparently eternal majority. There is little doubt that the war condensed and hastened the changes Labour need to carry that challenge to victory.

The popular mood in 1945 was very different from that after the First World War, when recovery meant getting back to the Good Old Days when the British monarchy, the Empire, the  pound sterling and the Royal Navy were to last for ever and ever amen. In 1945 the rampant desire was for progress; pre-war Britain was remembered as a place where incompetent and complacent politicians turned a blond eye to chronic unemployment and the rise of the European dictators, only worried that nothing should upset important events like Royal Ascot and the Eton and Harrow match at Lord's.

The post-war urge for social change had, ironically, been stimulated by the official war propaganda, which was based on the theory that the workers would more readily sacrifice themselves in their masters' interests if they could be persuaded that this would result in a better Britain than before the war. Churchill, in a speech to the boys at Harrow School (what more appropriate place?) declared:

When this war is won . . . it must be one of our aims to establish a state of society where the advantages and privileges which have hitherto been enjoyed only by the few shall be far more widely shared by the many . . .

This type of assurance was given by the Beveridge Report, published in 1942, with its proposals for a comprehensive welfare state and which millions of workers were silly enough to believe was a plan for a society free from poverty.

That this restlessness benefited the Labour Party rather than the Conservatives was partly due to another profound working class misconception. The success of the Russian forces against the German invaders was regarded as evidence of the efficiency and desirability of a system of state control. As a result Labour, as the party of natonalisation, picked up a lot of votes. Tory candidate Aubrey Jones (later a minister) said that during his 1945 election campaign he was persistently told by people in his audiences: "Look what nationalisation has done for Russia, and how great and strong she has become." There was also the idea—quickly dispersed by experience—that a Labour government would be able to deal more amicably with the Russians—"that left could talk to left."

So the Labour Party could enter their election campaign in 1945 in rollicking style. "The Labour Party," proclaimed their manifesto Let Us Face the Future "Is a Socialist Party and proud of it. Its ultimate purpose at home is the establishment of the Socialist Commonwealth of Great Britain . . . " They proposed to nationalise key industries and to set up the National Health Service. It was to be the dawn of a new era of equality and plenty: "Homes for the people must come before mansions, necessities for all before luxuries for the few" their programme said.

This heady stuff helped Labour to a crushing victory, laying low five Tory Cabinet ministers in the process. Clement Attlee, spurning a chauffeur driven limousine, climbed into the family Austin Ten for his wife to drive him to Buckingham Palace where the king, seemingly unafraid in the presence of so dangerous a revolutionary, asked him to form a government to keep capitalism running. Attlee went off to do as the king asked; seven ex-miners were in his first Cabinet but the king didn't seem to mind. Excited Labour MPs sang the Red Flag in the House; at least it was probably the Red Flag but quite a few of them were such shakily recent converts that they knew neither the words nor the tune of the Socialist Commonwealth's funereal anthem. There was excitement of a sort outside Parliament too; "Those who are well off are trembling with fear" confided Marie Belloc Lowndes to her diary.

Well of course they need not have worried. At the election, Attlee had made quite clear what he thought of all that nonsense about socialism: " . . . it is time that the Labour Party ceased to mouth Marxist shibboleths about the proletariat having nothing to lose but their chains. It is just not true." On this cue his government, ex-miners and all, quickly got down to an attack on the living standards of the working class. The country (by which they meant the British capitalist class) was in trouble; therefore everyone (by which they meant the British working class) must work harder and pull in their belts. Food rations were sometimes cut below those endured in wartime and some—for example bread and potatoes—were rationed for the first time. Up and down the country posters were slapped on hoardings bellowing "We're Up Against It! We Work Or Want." In February 1948 the government published a White Paper on Wages and Personal Incomes, which was the first of numerous post-war attempts at a wages "policy", more accurately called wage restraint. The White Paper touched off a long war between the government and trade unions in which the government could claim some success; over the next 2½ years prices increased by 8 per cent while wages went up by only 5 per cent.

On the whole the unions were sympathetic to the government, which caused their frustrated members to stage "unofficial" strikes—strikes without union backing—in which they sometimes had to fight their union almost as hard as their employer. The "unofficial striker" became as black a folk devil as the "flying picket" was to Callaghan's government in the seventies. The government reacted sharply, sending in servicemen to break strikes and in 1949 considering in Cabinet a plan to deport trade unionists who were organising strikes in the docks and in 1950 actually prosecuting some gas workers who went on strike outside the agreed procedure.

This attack on the working class was largely the work of Stafford Cripps, once a turbulent rebel who was expelled from the Labour Party but had become an austere devotee to the economic progress of the British capitalist class. Through a long painful illness Cripps stoically urged the working class, in the name of honour, duty and honesty, to work harder and longer for less. One of his notable methods of cutting wages was the massive devaluation of sterling in 1949 from an exchange rate of $4.03 to $2.80. Cripps did this after emphatically denying that he had any such intention, which did not seem to disturb his sense of honour or honesty.

A similar zeal was evident in the Attlee government's participation in the military conflicts of world capitalism. One of its earliest decisions was to develop an independent British nuclear arsenal—an historic fact which has never lessened the fervour of those thousands of Labour supporters who have subsequently demonstrated against those weapons. When the Americans—calling themselves the United Nations—went to war against North Korea in 1950 the Labour government gave immediate and unqualified support. British workers were sent off to fight there—nearby 700 of them were killed—and the period of national service (Labour had already made history by keeping conscription going for the first time ever in "Peace") was increased from 1½ to 2 years. They spent what were then record peacetime amounts on armaments; Gaitskell's first proposals, when took over as Chancellor from Cripps, were for an annual expenditure on something he called "defence" of £1,500 million. At the same time he imposed charges for prescriptions, dental treatment and spectacles—a bitter blow for those who had struggled for so long to realise the article of faith of a "free" National Health Service.

Perhaps they were consoled by the fact that, apart from some last minute havering over steel, the Attlee government kept their pledge to nationalise basic industries. In the case of coal it was common for the oldest ex-miner in the district capable of tugging on a rope to be taken to the pithead to run up the National Coal Board flag and declare that the people had at last taken over the mines.

Well as we all know, people who are under emotional stress tend to overlook important but inconvenient facts. The truth was that nationalisation was very far from ownership by the people; why else did Tories like Churchill and Quintin Hogg (now Lord Hailsham) say that in most cases they had no objection to the state takeover? In his book The Road to 1945 Paul Addison says:

In each case the argument for state control was as much accepted by businessmen as by Labour politicians . . .

When the Bank of England was nationalised there was not even an outward sign of change; the Governor, his Deputy and the Court were left in office, to carry on as before. Nobody suggested bringing some ancient retired clerk, grown dim-eyed from years of poring over ledgers, to raise the Red Flag over Threadneedle Street.

Many members of that government paid a high personal cost in their efforts to hold British capitalism together in crisis. Two of them—Cripps and Bevin—died. And when, thirty years ago, they lost the election, they were written down—inaccurately—as a party of rigid political theory, of experiment, the party which bungled its way into crises, shortages and finally into its own defeat.

They were a long time recovering. But among the Labour ranks as they went down that October day was one whose canny grasp of political reality looked forward to the day when the workers would be dissatisfied with the Tories too. Harold Wilson's great contribution to the politics of capitalism was to win recognition for Labour as a "pragmatic" party. He practised deceit in a new dimension. Theory and experiment, a desire for a different social order however misinformed, were for those who watched white haired, wheezing ex-miners raise flags. Wilson might stand watching too but at the same time he knew that it was his role to bring the Labour Party to its destiny as the alternative administration for British capitalism.

Ivan

Labour and the reform of capitalism (2004)

From the May 2004 issue of the Socialist Standard

The Labour Government of 1945-51 was the highwater mark of one strand of activity within capitalism, the triumph (much of it temporary, as we now know) of one school of thought on the question of how capitalism should be run. Its significance cannot be understood without knowing the background from which it sprang.

The population of each separate capitalist country is divided into two classes: the minority, who own the means of production, distribution, and exchange, and the majority, who operate all those means – factories, mines, offices, transport systems, banks, media and so on - but do not own them. This minority of owners constitutes the ruling class, and the rest of us constitute the working class.

The owners, however, are not a monolithic block, all having exactly the same opinions. Naturally, they all believe that the capitalist system is divinely ordained, and will last for ever. But they do not all have the same ideas as to the best way of running the system from day to day, or year to year. Many factors can cause disagreements within the ruling class. Some are internal, some are external.

Internally, there are always two main schools of thought. All capitalists want to get the most out of their workers, obviously. But what is the best way of doing that? Some think they should rule largely by fear. Toe the line, accept long hours, low wages, and poor conditions, they say to their workers, or out you go. And if you can’t get a job, you can join the unemployed – who, this school of thought believes, should be treated as harshly as possible.

Alongside the “treat-’em-rough” school is the “pretend-to-be-nice” school. One basic reason for this school is the desire to avoid the harmful consequences of the alternative - disease spreading across class boundaries, and decrepit recruits for industry or the armed services. But apart from that, some capitalists think that more humane methods are more profitable in the long run. Less primitive conditions in the workplace, a bit better treatment of families, somewhat less harsh handling of the unemployed, will all pay dividends, they think: be nice to your workers, and they will be nice to you, says this philosophy.

External factors also cause differences of view within the ruling class. When capitalism’s continuous conflicts lead to open warfare, with its clashing armies and bombing raids, its heartless slaughter of civilian populations and its massive destruction of towns and cities, the capitalists within each country often draw closer together, and feel they must strengthen their state as a bulwark against the threatening dangers from foreign capitalists which have now been made so obvious. For instance, when there is danger from abroad, and armies may have to be transported quickly round the country for the benefit of the country’s capitalists as a whole, then ruling class opinion tends to believe that the country’s transport systems should be in the hands of the state – the executive committee of the capitalist class.

The General Election of July 1945 came at a time when war, and its dangers, was in the forefront of public debate. There had of course been an enormously destructive war across Europe (and elsewhere) in 1914-18. When that ended, there was a huge feeling of relief: it must have been a fit of madness, people thought, and could never happen again. It was, in fact, “the war to end wars”. But then, only a score of years later, a second even more destructive global conflict erupted – so close to the first that some men actually had to fight in both, and certainly many families suffered in both. The electorate after the first war, in November 1918, returned the victorious wartime premier, Lloyd George, with a large majority committed to a return to the status quo; but in July 1945 the wartime premier, Winston Churchill, was defeated, and the Labour Party gained 393 MPs, compared with 213 Conservative and 12 Liberals. Labour formed a Government, and Clement Attlee became Prime Minister.

Stronger state

After two catastrophic world wars within only thirty-one years (1914-45), the preponderance of opinion within the capitalist class moved over to the support of a stronger state. The state had already been dictating much of the country’s economic activity during the war, under the direction of the Conservative-majority Coalition Government. A series of Acts of Parliament after 1945 took much fuel and transport into state ownership, and in many ways gave a formal framework to what had already been happening (owing to military necessity) throughout the six years of the Second World War. The Government took over what it regarded as essential services to support the other industries, which of course continued in private capitalist hands. It nationalized the Bank of England, coal, and civil aviation in 1946, electricity and transport in 1947, gas in 1948, and iron and steel in 1949.

Conscription into the armed forces, and compulsory direction into “essential industries”, e.g. munitions, during the war, had revealed that the working class were neither as well educated nor as healthy as they should ideally have been if they were going to supply the maximum of rent, interest, and profit to the owning class. A soldier who is not physically fit enough to join an attack on an “enemy” army, or skilled enough to read the instructions about how to operate a heavy machine gun or a tank, is not much use to the high command. The peace-time worker, too, has to be active and knowledgeable in order to operate modern machinery. So reforms were pushed through in health, creating the National Health Service, which (as the Labour Government boasted at the time) cut down the number of days lost to industry through illness. In education, the school-leaving age was raised to fifteen in 1947, and the Labour Government implemented Butler’s Education Act (passed by the Conservative Parliament in 1944), which created a tripartite system of grammar schools, technical schools, and secondary moderns, all of them free, with entry based on the so-called “eleven-plus” exam. These schools in effect aimed respectively at supplying office-workers, skilled manual workers, and the rank-and-file of the labouring population, to service capitalist industries. (The capitalists themselves continued to send their offspring to “public schools”, that is private schools outside the state system.)

Measures were taken to give a degree of social security to the whole population, “from the cradle to the grave”: a policy which put into effect the 1942 Beveridge Report, written by a Liberal. This social security, plus the free Health Service, meant that the great majority of the population, the workers, were kept in reasonably good condition, able to operate the industries of the country, and not likely to catch infectious diseases which could spread to the owning class. (Germs do not believe Mrs Thatcher’s assertion that there is no such thing as society.)

A very large part of Labour’s reforms was accepted by the Conservative governments which followed the Labour Government after 1951. This is not to say that all opinion within the ruling class supported nationalization; some voices still spoke out in opposition, and decades later nearly all of this carefully-constructed apparatus of state capitalism was dismantled and returned to the ownership of private capitalists. The capitalist organization of industry, of course, was undisturbed. The whole of the great nationalization debate had been simply about whether to have particular capitalist industries owned by the state, acting on behalf of the whole capitalist class, or by particular individual capitalists.

Much of the so-called Welfare State, however, has been preserved throughout the following half-century by Governments of whatever complexion. It has been recognized as benefiting the operation of British capitalism, and therefore it is still here.

The Labour Party claimed that their reforms were Socialist. The Labour Party fought the 1945 General Election on the programme outlined in its manifesto Let Us Face the Future, which declared that the Labour Party “is a Socialist Party, and proud of it. Its ultimate purpose at home is the establishment of the Socialist Commonwealth of Great Britain” and so on: hardly language which Labour’s leaders would use today. Though this was the “ultimate purpose”, the measures which it actually proposed (and, to do it justice, the measures which it actually carried out) were those described above. Its ringing declaration was one thing; its immediate objectives - the nationalizing of half a dozen fuel and transport industries, and health and education reforms - were another. Despite its fine-sounding claims about its “ultimate purpose”, the Labour Government of 1945-51, like every other Government, in practice merely tried its hand at running capitalism.

Why did that Government claim to be Socialist? The over-riding reason is that no ruling class can ever tell the truth about its own system. No owning class is ever going to say to the people at large, “You go on working and producing, and we’ll go on taking off you what you produce”. Instead, every ruling class seizes on whatever philosophy, or religion, or system of belief is currently popular or persuasive, and claims it for itself. When the British bourgeoisie made its first attempt to grab power, it claimed to be merely promoting Christianity (Cromwell called one battle “a crowning mercy” from Heaven). Many European countries, two or three centuries ago, proclaimed that Catholicism, or alternatively Protestantism, was their guiding light. When the French bourgeoisie took power, it claimed to be bringing in Liberty Equality, and Fraternity. The twentieth century saw a number of state-capitalist revolutions in Eastern Europe, Russia, and China, during which the revolutionaries claimed that they were introducing Communism, and Democracy (in some cases to the extent of putting Democratic in the official name of the country). In the Middle East, the ruling class of many countries claim that they are marching under the banner of Islam. In the same way, the Labour Government of 1945-51 claimed (as we saw) that they were going to introduce a “Socialist Commonwealth”.

Anyone who wishes to find out what is really happening in the world must first learn to distinguish between talk and action.

Alwyn Edgar

A weak brew (1982)

From the December 1982 issue of the Socialist Standard

The Beveridge Report, Social Insurance and Allied Services, was published in December 1942; 70,000 copies were sold within hours and in a short time there were few adults who did not know of, and generally approve, its main recommendations. Produced in the depths of wartime, the Report promised to abolish want by solving the peacetime problems of poverty and unemployment, a prospect that was to inspire workers to improve their contribution to the war effort.

Sir William Beveridge was Chairman of an Interdepartmental Committee set up in June 1941 by Arthur Greenwood, a Labour Party Minister in the coalition government, to undertake a survey of "the existing national schemes of social insurance and allied services, including workmen's compensation, and to make recommendations". State run insurance schemes for the elderly and unemployed were not new: pensions for some old people were first paid in 1909 and were non-contributory until their scope was extended in 1925. A National Insurance Act in 1911 had introduced (for workers below a certain income) a restricted system of insurance for sickness and unemployment, with employees, employers and the state all contributing. There were also voluntary associations and schemes run by individual employers.

Most of the Beveridge Report was concerned with the reorganisation of social insurance into a more economic and comprehensive national scheme. Its specific proposals covered every aspect of life but did not include the practical details of how a comprehensive health service should be organised. 

Beveridge considered that practically all the acute poverty in Britain had two causes — the "interruption or loss of earning power and failure to relate family income to family needs". It was considered that, because so many wage earners were "far above want", poverty could be abolished by "a redistribution of income within the working classes at all". His solution was a "double redistribution of income" through social insurance and children's allowance.

The enthusiastic reception given to his Plan was, according to Beveridge (The Times, 9 November 1953) due to "the subsistence principle, the guaranteeing to every citizen, in virtue of contributions and irrespective of need or means, of an income in unemployment, sickness, accidental injury, old age, or other vicissitudes, sufficient without further resources, to provide for his basic needs and those of his dependants". (Quoted by J. C. Kincaid, Poverty and Equality in Britain.) This central idea, the subsistence principle, was what had made his Report more than just a rationalisation of existing services. Flat-rate benefits were to be linked to flat-rate contributions; the obligation to contribute would be the same for everyone regardless of income and adequate financial support, at a minimum subsistence level, obtained as of right and without the hated means test.

Beveridge was obliged by the Treasury Chiefs to give figures for subsistence incomes. His estimate of the minimum necessary for families to live on was based on calculations made by Seebohm Rowntree, for his research into poverty in York in 1936. Using contemporary knowledge of dietary requirements Rowntree had worked out a minimum budget for a family of 5 — the equivalent of £2.90 at 1938 prices. He was concerned to show that families on a lower income, no matter how efficiently it was managed or how restrained their behaviour, were unable to provide for their barest physiological needs. Seven per cent of working class families in York were suffering "primary poverty" — dreadful deprivation for which the sternest moralists could not say they were to blame. "Secondary" poverty included families whose income was so little above Rowntree's poverty line that "inefficient" budgeting put them in the same condition as those in primary poverty.

The benefit rates recommended by Beveridge ) for a family of five — £2.65 at 1938 prices) were at a lower level than Rowntree's "human needs" minimum budget, mainly because he did not allow for personal sundries like a newspaper, haircuts or birthday presents. He did allow a tiny margin (of one sixth) for "inefficiency in purchasing, and also for the certainty that people in receipt of the minimum income required for subsistence will in fact spend some of it on things not absolutely necessary". The rate for old people was even lower than for working adults. Beveridge thought if "dangerous to be in any way lavish to old age" until adequate provision had been made for the health of the young. The proportion of old people in the population was increasing and the aim should be to discourage retirement and the claiming of pension. The benefit paid widows and blind persons should be limited by the assumption that they could find work.

The low level of benefits was claimed as a merit of the scheme since it would not interfere with the freedom and responsibility of individuals to make their own provision above that level; it would not discourage "thrift". If the scheme were financed by contributions it would be convenient to administrate and the Social Insurance Fund could be self contained. People preferred to pay and, mindful of their moral welfare, citizens should realise that benefits linked to contributions provided a motive for supporting measures for prudent administration. They "should not be taught to regard the State as the dispenser of gifts for which no one needs to pay". However if employees had security and were properly maintained during inevitable intervals of unemployment or sickness, this would help to make them efficient producers.

The acceptance of the Report, by capitalists and politicians, as a basis for post-war planning was influenced by the belief that healthy, contented workers would make a more efficient labour force, and by the fear that without social reform there might be social disorder. It was widely thought that there would be unemployment in the post-war period — Beveridge assumed up to 1,500, 000 — and those fighting and working to win the war needed to know that "their" country would have something better to offer in the future than the pre-war means-tested poverty. Another merit from the capitalist point of view was that the proposals were "moderate enough to disarm any charge of indulgence" (The Times, 2 December 1942), though some criticism was still made on that ground.

The National Health and National Insurance Acts passed by the post-war Labour Government were along the lines recommended in the Beveridge Report. The scope of schemes already in existence was enlarged and extended, and made national in operation. The Bill for the one new measure, allowances for children, was presented in Parliament during the closing weeks of the coalition government and became law during the short Conservative Ministry of May-July 1945. Family allowances were paid at a lower rate that Beveridge had wanted but the school meals and milk service were counted as payment in kind.

Before the Report was published negotiations took place between Beveridge and Treasury Chiefs, including Keynes, who agreed to a scheme which limited the Treasury contribution to £100 million a year or 20 per cent  of the total costs of benefits paid out. In the interests of "financial soundness" the needs of poor people were to be measured according to an amount of money fixed by prior agreement. To satisfy Keynes' condition for support, and because he worked on insurance principles, Beveridge had planned for pensions to be paid at the full rate only after the scheme had been in operation for twenty years. (Those already near pensionable age could be covered by assistance pensions subject to a means test.) The Labour government decided to pay the full amount when the national insurance scheme began to operate in 1948, and also reduced the qualifying time to ten years. (Years of contributions made to earlier schemes were counted.) This intention had also been outlined in the 1944 White Paper.

When the National Insurance Act was passed in 1946 the figures for benefit rates and allowances were based on 1938 minimum needs with some allowance for the increase in prices between 1938 and 1946. James Griffiths, Minister of National Insurance, justified the rates as being "broadly in relation to the cost of living". The "subsistence" basis, so important to Beveridge, became a broad subsistence basis. By 1948 prices had risen still further and the actual purchasing power of insurance benefits paid to adults was 25 per cent lower than even the Beveridge minimum. The cost of living continued to rise and with only a small increase in National Insurance benefits the gap widened, so that means-tested national assistance benefits were actually higher than social insurance benefits. In 1953 Beveridge was calling on the Conservative government to raise the benefit rates to adequacy for subsistence, or to say "that they have formally abandoned security against want without a means test, and declare that they drop the Beveridge Report and the policy of 1946." (J. C. Kincaid.)

An important difference between the recommendations in the report and the policy accepted by both the Coalition and Attlee governments concerned unemployment. Benefit was made payable for only 30 weeks, with the possibility of a further limited period based on an exemplary employment record. Beveridge had wanted those out of work to receive benefit for the full term of their unemployment. After a certain period they might be obliged to attend a training centre, nor should those in receipt of unemployment benefit be allowed to hold out indefinitely "for work of the type to which they are used or in their present places of residence, or if there is work which they could do available at the standard rate for that work".

Compiled by a supporter of free enterprise capitalism, the Beveridge Plan for ending poverty by social insurance was a moralistic scheme whereby workers whose employment was interrupted or ended would be given support by the state at a minimum subsistence level, and as cheaply as possible. Cheese-paring social reform was used in the post-war years in support of argument for wage restraint. It is difficult to reconcile the extravagant claims made about the Welfare State with either the aims of Beveridge or the legislation passed in the years since the war. Poverty today is not the result of a decline in once effective services, the social security system never having been intended to give more than the minimum of support to members of the working class not provided for by employment. Trying to get means-tested benefits adds to the problems of the poor; but even if insurance benefits had been increased to take recipients above some poverty line, it would have made little difference.

Forty years after Beveridge high unemployment, not to mention the plight of single parents, means so many people needing supplementary benefit that in some areas queues form outside DHSS offices before they open and the staff are unable to cope with the pressure of work. Many thousands of families live in deep poverty despite the father being in full time work, and are entitled to Family Income Supplement and other benefits. According to EEC official statistics 6.3 per cent of British households live below the poverty line, when poverty is defined as living on less than half the average income in this country (Guardian, 12 October 1982). Some conditions may be better now than forty years ago, but this can be of little comfort to the mother who in 1982 has to decide whether to get shoes for her child with the money from supplementary benefit meant for her own food. The patience—if that is the word—of reformers is such that an increase in child benefit is being out forward as the way to end family poverty.

Poverty is a working class problem. The vast majority, the working class, who do all of the work of society do not own the means of production. Working class lives are restricted by this fact even without the additional burdens borne in times of unemployment, old age and sickness.

Pat Deutz

Labour's Strange 'Revolution' (2015)

Editorial from the July 2015 issue of the Socialist Standard

Labour's electoral victory, 70 years ago this month, was a strange sort of revolution.

Since 1940, the Labour Party had been in power as part of the wartime coalition. 1945 saw them merely increase their share of the political cake. Clement Attlee, for instance, previously Deputy Prime Minister under Churchill, moved up a step. Similarly, Herbert Morrison, who had run the home front during the war, continued to run the home front during the peace. Morrison, Home Security during the war, stepped into Attlee's shoes as Deputy Prime Minister.

Amongst rank and file Labour MPs elected in 1945, there were dozens of majors and lieutenants - the officer class – and not a single private. The very ordinary elite remained quite firmly in control of the political establishment.

Labour's crowning glory of '45 is seen as the creation of the so-called welfare state, in particular the National Health Service.

Although associated with the Labour Party, in fact all capitalist parties supported the drive for reorganisation of 'social security' – the provision of housing, health and education, and of unemployment and old age payments. Beveridge, whose report formed the basis for the social security reforms after 1945, was a Liberal. The Education Act of 1944, which established free compulsory secondary education for all, was the work of the Tory 'Rab' Butler.

To the capitalist class, it was evident that the existing system needed reform. A patchwork quilt of measures enacted over a century was unsystematic and hence inefficient – particularly in cost terms. Loopholes existed through which workers could gain more than they 'needed'.

And the welfare state also brought them benefits. The war had revealed serious flaws in the health of the 'nation'. The British Tommy, with his rotten teeth and pigeon chest, became an object of derision. This was a bad for fighting - and for working when peace returned. Something had to be done. In 1943, arch-capitalist Sir Samuel Courtauld freely admitted that social security 'will ultimately lead to higher efficiency among them and a lowering of production costs'. Healthy workers make healthy profits.

The welfare state, the promise of a 'better world' tomorrow was also a carrot, an incentive to increase production – and killing – during the war. The Beveridge Report honestly declared 'each individual citizen is more likely to concentrate upon his war effort if he feels that his Government will be ready in time with plans for that better world'. It was a promise that had to be fulfilled to avoid social unrest and conflict.

However, like all reforms, the measures that constituted the welfare state were always viewed by the capitalist class as subject to requirements. As early as 1951, the Labour government introduced the first charges on its own supposedly free National Health Service.

The welfare state and the NHS may have benefited the workers, but that was not the intention. The intention was to maximise profits, to increase the welfare of the capitalist class. So far as revolution was involved, the reforms were an attempt to avoid it.

Why Beveridge reorganized poverty (1992)

From the December 1992 issue of the Socialist Standard

Fifty years ago this month the Report on Social Insurance and Allied Services by Sir William Beveridge was published to widespread acclaim. Supporters of all the pro-capitalist political parties hailed the Report as the basis for a restructured and improved social provision for the working class after the war against Germany had been won. According to the veteran Communist campaigner Willie Gallagher there was no mistaking the attitude of the British population to the plan. He told the House of Commons:

The trade union movement wants the Beveridge Plan, the Co-operative movement wants it, the Labour Party wants it, the Communist Party wants it, and the Liberals and a section of the Tory Party want it. It is clear that the great masses of the people, as represented by these forces, want the plan.

In retrospect it may seem ironic that those on capitalism's extreme left-wing, as well as its more mainstream defenders, should have been so enamoured with the Beveridge Report. Their reformist enthusiasm certainly overlooked the fact that one of its express aims was to increase productivity and encourage the working class to concentrate on the war effort while holding out the vague hope of better conditions to come, echoing Lloyd George's 1918 "land fit for heroes to live in" homily.

While the Labour and Communist Parties jostled for a reformist advantage over the Beveridge Report, the Socialist Party analyzed the purpose and nature of the Beveridge proposals in a pamphlet called Beveridge Re-Organises Poverty. This pamphlet quoted the Tory MP Quentin Hogg (now Lord Hailsham) and his advice on the necessity of social reform within capitalism—"if you do not give the people social reform, they are going to give you social revolution"—and suggested that the Beveridge recommendations were best judged in the light of the wave of working class discontent which followed the 1914-18 war, which the capitalist class and their political representatives feared might be repeated.

Poor relief

The actual content of the Report and the proposals it put forward for social reform were, as the Times put it, "moderate enough to disarm any charge of indulgence" (2 December 1942). In large part the reforms aimed at providing an efficient working framework for the replacement of the unbalanced and disparate system of poor relief previously in existence in Britain. In fact a familiar claim of Beveridge at the time was that his proposals would be cheaper to administer than the previous arrangements. As he put it in his Report:  

Social insurance and the allied services, as they exist today, are conducted by a complex of disconnected administrative organs, proceeding on different principles, doing invaluable service but at a cost in money and trouble and anomalous treatment of identical problems for which there is no justification. (p. 6, emphasis added).

Many of Beveridge's proposals were already effectively in force for a significant number of workers, but the Report recommended the introduction of a unified, comprehensive and contributory scheme to cover the loss of employment, disablement, sickness and old age. An enlargement of medical benefits and treatments was proposed, as was a plan for non-contributory allowances to be paid by the state to parents with dependent children.

This latter scheme was criticized in another Socialist Party pamphlet called Family Allowances: A Socialist Analysis, which demonstrated how Beveridge's proposed Family Allowances would be of principle benefit to the employing class, not the wage and salary earners, allowing employers to make-across-the-board wage reductions as wages had previously had to take account of the entire cost of the maintenance and reproduction of workers and their families, even though the majority of workers at the time had no dependent children to provide for. The Family Allowances plan was a scheme based on targetting provision on those workers actually with children. Family Allowances: A Socialist Analysis explained: 

wages must provide not only an existence for the workers himself, but also enable him to rear future generations of wage workers to take his place. It is quite logical therefore from a capitalist point of view to raise objection to a condition which in a large number of cases provides wages "adequate" to maintain children for those who in fact possess no children.

Poor get poorer

In outlining the case for universal state benefits and health care, the Beveridge Report was undoubtedly of some benefit to sections of the working class who, for one reason or another, had found themselves outside the existing schemes of provision. But as the case of Family Allowances demonstrated some of the gains for the working class were more apparent than real.

As the Socialist Party was able to predict, the recommendations of Beveridge and, for that matter, the modifications that have been made to the various branches of the welfare state in the last 50 years, have not succeeded in solving the poverty problem. Particularly since the end of the post-war boom in Britain in the late 1960s, the problems of poverty and income inequality have accelerated. To confound the prediction of some supporters of capitalism (and some so-called Marxists too) that the tendency of state-assisted capitalist development is to make the rich relatively poorer and the poor progressively richer, the numbers of those in relative and absolute poverty have increased in Britain, America and a number of other leading industrialized countries. Moreover, this phenomenon currently shows no sign of being reversed, despite the attentions of the reformers.

Part of the explanation for this lies in the way in which state benefits have periodically failed to keep pace with rises in the general price level, and the systematic way in which entitlements like unemployment benefit and income support have been allowed to fall as a proportion of the average wage. In 1979 a married claimant in Britain qualified for 35 percent of average earnings, but by 1990 this was down to 27 percent. In the same period of time the number of unemployed men means-tested rose from just under half to three-quarters. The break between pensions and earnings meant that a single pensioner received only £46.90 a week instead of £58.65 and a married couple £75.10 instead of £94.05. Meanwhile in the US, an unemployed New York woman with two children receives one third less in real terms than in 1972 (Sunday Times, 6 September).

In the year 1990-1 the government spent £77 billion on health and social security, 42 percent of general government expenditure. For the current financial year 1992-3 the total is likely to be about £100 billion, necessitating the present large increases in the government's Public Sector Borrowing Requirement. With the increasing demands placed on the health service and the additional burdens placed on social security expenditure during the slump, pressure to cut back in government spending is intensifying.

Sticking plaster

As the 1942 proposals of Beveridge indicated, and experience has subsequently proved, expenditure on the welfare state can never really serve as anything more than a sticking plaster on capitalism's poverty problems. The capitalist system leaves little room for sentiment and its driving concerns of profitability and capital accumulation impinge on the effectiveness of the welfare state, as they impinge on everything else. The health services and social security have to be paid for ultimately out of the profits of the capitalist class, generally via taxation (the burden of which in the last analysis falls on the bosses) or borrowing.

The need to keep health and social security expenditure in check does not therefore come about because of the blind malice or hatred of politicians but because of the need to keep the amount of profit taken off the capitalists as low as possible. The spectre of a declining rate of profit after tax—restricting future investment in the profit-making sectors of the economy—is not something the capitalist class are simply going to sit back and accept. This was demonstrated by the rise of so-called "Thatcherism" in Britain and other industrialized countries in the 1980s. whose overt mission (not altogether successfully carried out) was to reduce borrowing and the proportion of the capitalists' accumulated wealth taken through tax. This, indeed, was the same mission undertaken by the last Labour government after its initial attempts to expand the economy through Keynesian economic policies ended in chaos.

Today, with the world in the midst of another economic crisis, and with future attacks on the welfare state developed since Beveridge, we can confidently re-assert our initial analysis of 50 years ago, to the effect that Beveridge represented not the "new world of hope" set out by the reformers, but a "re-distribution of misery". That misery remains and will do so as long as capitalism and its insane priorities continue to carry all before it.

Dave Perrin