I sorted out my best outfit, this time sapphire blue, to go and see the Prime Minister. The interview was short. Harold Macmillan charmingly greeted me and offered the expected appointment. I enthusiastically accepted. I wanted to begin as soon as possible and asked him how I should arrange things with the department. Characteristically, he said: ‘Oh well, ring the Permanent Secretary and turn up at about 11 o’clock tomorrow morning, look around and come away. I shouldn’t stay too long.’
So it was the following morning – rather before eleven – that I arrived at the pleasant Georgian house in John Adam Street, just off the Strand, which was at that time the headquarters of the Ministry of Pensions and National Insurance. In a gesture which I much appreciated – and which I myself as a Cabinet minister always emulated – John Boyd-Carpenter, my minister, was there at the front door to meet me and take me up to my new office. John was someone it was easy to like and admire for his personal kindness, grasp of detail and capacity for lucid exposition of a complex case. And he was an excellent speaker and debater. All in all, a good model for a novice Parliamentary Secretary to follow.
The first step was to re-read the original Beveridge Report in which the philosophy of the post-war system of pensions and benefits was clearly set out. I was already quite well acquainted with its main aspects and I strongly approved of them. At the centre was the concept of a comprehensive ‘social insurance scheme’, which was intended to cover loss of earning power caused by unemployment, sickness or retirement. This would be done by a single system of benefits at subsistence level financed by flat-rate individual contributions. By the side of this there would be a system of National Assistance, financed out of general taxation, to help those who were unable to sustain themselves on National Insurance benefits, either because they had been unable to contribute, or had run out of cover. National Assistance was means tested and had been envisaged as in large part a transitional system, whose scope would diminish as pensions or personal savings rose.
It is easy in retrospect to poke fun at many of Beveridge’s assumptions and predictions. But Beveridge had sought to guard against the very problems which later governments more or less ignored and which have now returned to plague us, in particular the debilitating effects of welfare dependency and the loss of private and voluntary effort. Whatever the effects in practice, the Beveridge Report’s rhetoric has what would later be considered a Thatcherite ring to it:
… The State should offer security for service and contribution. The State in organizing security should not stifle incentive, opportunity, responsibility; in establishing a national minimum, it should leave room and encouragement for voluntary action by each individual to provide more than that minimum for himself and his family. [Paragraph 9]
… The insured persons should not feel that income for idleness, however caused, can come from a bottomless purse. [Paragraph 22]
Much of our time at the Ministry was taken up both with coping with the effects of and finding remedies to the difficulties which flowed from the gap between Beveridge’s original conception and the way in which the system – and with it public expectations – had developed. So, for example, in those days before inflation took hold and benefits were annually up-rated to cope with it, there were cries of disapproval when National Insurance pensions were increased and National Assistance, which made up your income to a certain level, was not. People also increasingly came to expect something better than a subsistence-level pension to retire upon, but the contribution levels or financing from general taxation which this would require seemed prohibitive. This lay behind John Boyd-Carpenter’s idea of the ‘graduated pensions’ scheme, whereby the payment of higher contributions could secure a somewhat higher pension, and provision was made for the encouragement of private occupational pension schemes. Another constant source of difficulty for which we found no ultimate (affordable) answer was the ‘earnings rule’ whereby pensioners who worked would at a certain level of income lose part or all of their pension payments. It was the impact of this on pensioner widows which caused me most difficulty and not a little heart-searching.
Apart from the Beveridge Report and other general briefing from the department, it was the case work – that is the investigation of particular people’s problems raised in letters – which taught me most about the Social Security system. I was not prepared to sign a reply if I did not feel that I properly understood the background. Consequently, a stream of officials came in and out of my office to give me the benefit of their matchless knowledge of each topic. I adopted a similar approach to parliamentary questions, which would be shared out between the ministers. I was not content to know the answer or the line to take. I wanted to know why.
Having served as a junior minister to three different ministers in the same department I was interested to see that the advice tendered to the ministers by civil servants differed, even though it was on the same topic. So I complained when both Niall Macpherson and Richard Wood received policy submissions proposing approaches that I knew had not been put to their predecessor, John Boyd-Carpenter. I remember saying afterwards: ‘That’s not what you advised the previous minister.’ They replied that they had known that he would never accept it. I decided then and there that when I was in charge of a department I would insist on an absolutely frank assessment of all the options from any civil servants who would report to me. Arguments should be from first principles.
I also learned another lesson. There was a good deal of pressure to remove the earnings rule as regards widowed mothers. I sympathized with it strongly. Indeed, this was one of the issues upon which, as a new MP, I had publicly stated my position. I thought that if a woman who had lost her husband but still had children to support decided to try to earn a little more through going out to work she should not lose pension for doing so. Perhaps as a woman I had a clearer idea of what problems widows faced. Perhaps it was my recollection of the heartbreaking sight of a recently widowed mother eking out her tiny income buying bruised fruit at my father’s shop. But I found it almost impossible to defend the Government line against Opposition attack. I raised the matter with officials and with my minister. On one occasion, I even raised it with Alec Douglas-Home as Prime Minister when he came to speak to a group of junior ministers. But although he seemed sympathetic, I never got anywhere.
The argument from officials in the department was always that ending the earnings rule for even this most deserving group would have ‘repercussions’ elsewhere. And, of course, they were logically correct. But how I came to hate that word ‘repercussions’.
Ministers were wrong to take such arguments at face value and not to apply political judgement to them. It was no surprise to me that one of the first acts of the incoming Labour Government in 1964 was to make the change for which I had been arguing, and to get the credit too. The moral was clear to me: bureaucratic logic is no substitute for ministerial judgement. Forget that as a politician, and the political ‘repercussions’ will be on you.
I retained my taste for the Chamber of the Commons, developed during my two years on the backbenches. We faced no mean opponents on the Labour benches. Dick Crossman had one of the finest minds in politics, if also one of the most wayward, and Douglas Houghton a formidable mastery of his brief. I liked both of them, but I was still determined to win any argument. I enjoyed the battle of facts and figures when our policies were under fire at Question Time and when I was speaking in debates – though sometimes I should have trod more warily. One day at the Dispatch Box I was handed a civil service note giving new statistics about a point raised in the debate. ‘Now,’ I