NICHOLAS TIMMINS
January 1995
THE PIPERS AT THE GATE OF DAWN
In every country it is unfortunate not to be rich; in England it is a horrible misfortune to be poor.
Alexis de Tocqueville, Voyages en Angleterre et en Irlande en 1835
‘They used to tell me I was building a dream …’
E. Y. Harburg, ‘Brother can you spare a dime’, American song of the Great Depression, opening line
At this stage of the war, the main ideas of reconstruction were in their first bloom, but largely, also in a state of suspended animation. Like the sleeping beauty, they awaited the prince’s kiss. In almost every field of reconstruction, Beveridge’s report of December 1942 was to be the decisive breath of life.
Paul Addison, The Road to 1945, p. 171
IN JUNE 1941, Sir William Beveridge was called in by Arthur Greenwood to be offered a job. Greenwood was the Labour Minister for Reconstruction in Britain’s wartime coalition government. Beveridge was an egotistical sixty-two-year-old civil servant who believed his destiny was to organise key parts of Britain’s war effort. He was asked instead to chair an interdepartmental committee on the co-ordination of social insurance. The task hardly sounded inspiring. With tears, not of joy but of bitter disappointment, in his eyes, he accepted.1 It was the strangest of starts to one of the greatest of adventures – the founding of Britain’s modern welfare state.
Beveridge’s reaction was perhaps not surprising, for he was no ordinary civil servant. He was already well known as a radio broadcaster, academic, public servant and newspaper columnist; a man with more careers behind him than most ever enjoy. He was also by any standard, despite his detractors (of whom there were plenty), a member of the Great and the Good, at a time when such a class was perhaps more easily defined than at the start of the twenty-first century.
Born the son of a British judge in India in 1879 into a house staffed by twenty-six servants, he was schooled at Charterhouse. At Oxford he read mathematics and classics before, in 1903 at the age of twenty-four, he became in effect an Edwardian social worker and researcher at Toynbee Hall, the university foundation for the poor in the East End. It was there that ‘he learned the meaning of poverty and saw the consequences of unemployment’.2 The impoverishment of this part of London was to affect others in the tale of Britain’s welfare state, including Clement Attlee and Sir Keith Joseph, even if the conclusions each was to draw from the experience were to be rather different.
At Balliol, Beveridge recalled, the Master, Edward Caird, used to urge his charges ‘to go and discover why, with so much wealth in Britain, there continues to be so much poverty and how poverty can be cured’.3
Oxford and Toynbee Hall triggered in Beveridge a lifelong interest in unemployment and broader social questions, turning the young man into a social reformer, but one whose academic training convinced him that policy should be based on exhaustive research and detailed analysis. In his autobiography, Beveridge characterised his own progress at the time as being from ‘Oxford to Whitechapel, Whitechapel to Fleet Street, Fleet Street to Whitehall’.4 On the way, however, there had been a visit early in 1907 to Germany, where he had studied the systems of compulsory social insurance for pensions and sickness, though not yet for unemployment, which Bismarck had introduced in the 1890s. It was an important and fitting lesson, for Bismarck’s is the only name to rank above Beveridge’s as a welfare state designer, although of a rather different model.
Late in 1905 the twenty-six-year-old Beveridge, on a recommendation from Caird, was installed as a leader writer at the Tory Morning Post, a newspaper which eventually merged with the Daily Telegraph. There he was given licence to write on social policy and advocate labour exchanges and unemployment insurance, drawing on the forms of social insurance he saw in Germany. That work brought him to the attention of the thirty-three-year-old Winston Churchill, who four years earlier had crossed the floor of the Commons from the Conservative to the Liberal benches. In July 1908, Churchill brought Beveridge into the Board of Trade as a fulltime civil servant. Over the next three years, Beveridge played a crucial role in the creation of a national network of labour exchanges of which he became the first director; and then in the formation of the world’s first, if initially highly limited, statutory insurance scheme against unemployment. The measure was introduced in 1911 by David Lloyd George and by Churchill, who by 1906 had become so imbued with the cause of social reform that he declared Liberalism to be ‘the cause of the left-out millions’.5
In government service, Beveridge had seen Lloyd George as Chancellor introduce the first state pensions, dubbed by their grateful recipients ‘the Lord George’ (because only a Lord could afford to be so generous), and had seen the spectacular row over the 1909 ‘People’s Budget’ which raised the money to pay for them. The pensions, Lloyd George declared, lifted ‘the shadow of the workhouse from the homes of the poor’. Churchill, more temperately, declared of the first relatively meagre means-tested payments: ‘We have not pretended to carry the toiler on to dry land. What we have done is to strap a lifebelt about him.’
The first unemployment insurance in 1911 covered only about 2.75 million men, or roughly one in six of the workforce, in industries at high risk of cyclical unemployment such as iron and steel and shipbuilding. It ran out after fifteen weeks. But with it came the first state-backed insurance scheme for health. Lloyd George’s famous ‘Ninepence for Fourpence’ was more comprehensive, covering all male workers earning less than £160 a year. For the worker’s compulsory fourpence (just under 2p) a week, the employer had to add threepence and the state twopence. The scheme was administered by ‘approved societies’ and provided the services of a ‘panel’ family doctor, but no right to hospital care or medicine; with that came sick pay of ten shillings (50p) a week, but no cover for wives and children other than a maternity grant. What marked out the health and unemployment measures of the 1911 National Insurance Act from anything that went before was that both were contributory, compulsory and state organised, with employers, employees and the taxpayer each contributing: the so-called tripartite system. What they were not was comprehensive.
The same Liberal Government had also introduced the first tentative legislation on free school meals (for large families only), school medical inspections, and the first overtly redistributive budget – the ‘People’s Budget’ – to pay for it all. The House of Lords, then still the power-base of the landed aristocracy, was faced by a new supertax and what were, in effect, wealth taxes. They threw out what Lloyd George had declared to be ‘a war budget’ – one ‘for raising money to wage implacable warfare on poverty and squalidness’. He added the hope, which he almost lived to see realised, that ‘before this generation has passed away we shall have advanced a great step towards that good time when poverty and wretchedness and human degradation which always follow in its camp will be as remote to the people of this country as the wolves which once infested its forests’.6 The result, after a long battle, was the