Universal Credit and the Five Giants.
Reading Nick Timmins’ excellent book on the history of the welfare state, I was struck by the extent to which the challenges faced by Beveridge in establishing the welfare state over sixty years ago are similar to those faced today.
Arguments over fairness, complexity, incentive, and universality appear perennial, both in policy debates and in practice. The following excerpts from the book help to illustrate these issues and place them in a historical context.
“There were seven different government departments directly or indirectly involved in providing cash benefits of one kind or another”
“By 1941, there were three different types of pension, and three different types of unemployment benefit, all operating under different rules”
“The result was ‘different rates of benefit involving different contribution conditions and with meaningless distinctions between persons of different ages’ as Beveridge was to say in his report”
Universality of Child Benefit (p.21)
“He [Beveridge] had also come to see that benefits could not be run that way [as insurance]. To combat poverty, and at the same time provide work incentives, it was essential that children’s benefits be paid at the same rate whether the parent was in or out of work”
The role of women (p.54)
“Beveridge shared the widespread assumption that women would simply go home to be housewives… during marriage, most women would not be gainfully employed” (For clarity: Beveridge did not oppose married women working)
“Britain was also seen to have ‘a population problem’ … He also wanted incentives for marriage and child-bearing”
Direct payments to recipients through an insurance-based system (p.57)
“Management of one’s income is an essential element of a citizen’s freedom.”
Benefit levels / durations and incentives (p.59)
“[Time-limiting benefits] was ‘wrong in principle … most men would rather work than be idle’ … but the danger of providing adequate benefits indefinitely was the men ‘may settle down to them’ a ‘habituation to idleness’.
Summing up, he concludes that the left and the right would issue calls to go ‘Back to Beveridge’ – but to which bit of Beveridge would depend on who was doing the calling.
An apt summary of the situation ever since, and one that indicates that the Universal Credit will not solve all of the ills of the benefit system. What Universal Credit does do is, like Beveridge, take a fresh look at what our welfare state has become and consider what we want it to be.
Starting from a blank sheet of paper, the Universal Credit creates a compelling and uniting vision of a benefit system that continues to protect those out of work, but does less to stifle their initiative or incentive to progress.