The Beveridge Report
was a comprehensive and ambitious design for a desirable society. The program
retained a purview for every contingency, and advocated a package of remedies
that were weighted in different ways. First of all, Beveridge enumerated Five Giants
of human beings: Want, Disease, Ignorance, Squalor and Idleness.
The ultimate goal was
to vanquish the Five Giants completely by combining measures of social policy,
yet a priority existed. Want was the worst vice, but the easiest to eliminate.
Thus, the first target of the state was ‘freedom from Want’.
The means to terminate
Want was Social Security to meet two goals: a design for securing an income up
to a minimum when people encountered either the interruption of income, the
loss of working capability, or exceptional expenditures; and a design to bring
an earnings stoppage to an end as soon as possible.
In addition, important
assumptions existed: to accomplish the Report, it was necessary in advance to
prepare
(1) Children’s
allowances: Children’s allowances should be provided up to the age of 15 or 16.
To the extent that family earnings were based only on a father’s wage, a larger
family made them relatively poorer. Allowances were needed regardless of the
social insurance system.
(2) Comprehensive
health and rehabilitation services: Health
services symbolized and actualized the prevention and treatment of diseases and
rehabilitation of working ability. Their aim was to return people to the labor
market as soon as possible. Unemployment was the worst waste of resources.
(3) Maintenance of
employment: It was undesirable to provide the long-run unemployed persons
unconditional cash transfer as a right because the ‘dole’ would lower workers’
moral sense. Mere income security was insufficient for the happiness of human
beings. Only equality of opportunity, and full employment, could avoid moral
risks.
Under the three
promises, Beveridge advocated Social Security that united the three remedies.
The set of three elements, with different weights, was characteristic of him.
We examine the character and the relationships among the three characteristics
in the following manner.
The first and main
component was social insurance for basic needs, which had a principle of
compulsory contributions. All citizens had their own right to be guaranteed a
living up to a minimum. The scheme embodied six fundamental principles: “flat
rate of subsistence benefit; flat rate of contribution; unification of
administrative responsibility; adequacy of benefits; comprehensiveness; and
classification”.
The first principle
meant that the state should whenever ensure (only) a minimum level of
subsistence, regardless of amounts of citizens’ incomes. Together with the
fourth (adequacy of benefit), it indicated a National Minimum. Specialists out
of the Beveridge Committee, such as S.B. Rowntree and A. L. Bowley calculated
the level. For instance, unemployment benefits were 40 shillings per week, and
so was the retirement pension. This system included not only rights for every
citizen, but also duties. There was no guarantee to be provided benefits beyond
the minimum.
Instead, there remained
ample room for private insurance. People had to work for an abundant living. Up
to the minimum, it was a protection. Beyond the minimum, it was a competition.
The second principle implied that all citizens had to pay the same
contribution, irrespective of the amount of their property. The rate of weekly
contribution was four shillings and three pence (except the people between age
16 and 20).
Under the social
insurance system with the first and the second principles, revenue and
expenditure would be balanced in terms of both an individual and a state.
People had a right of benefits in exchange for their duty of contributions. An
increasing budget for welfare was designed to balance the benefit and
contribution of insurance. Namely, the social insurance system subsumed a
standard citizen who was industrious and independent to some degree.
Nevertheless, all
citizens could not afford to contribute completely. Some physically or mentally
handicapped persons would fall through the mesh of any insurance scheme.
Accordingly, society had to establish a second and subordinate component, i.e.,
public aid for exceptional contingencies. This was a transfer in cash out of
the National Treasury. Traditionally, from the age of the poor laws, people in
Britain had strongly resisted any type of means test.
‘Doles’ in poor laws
were always accompanied by a ‘stigma of pauperism’. This public assistance was
conceptualized to be subjected to a strict means test because it had to “be
felt to be something less desirable than insurance benefit”.
The National Treasury
was no infinite cash register, so the state was duty-bound not to let the
society members indulge in being extravagant and lazy. The following were
specific allowances and temporary assistance: maternity and widows’ benefits
(36 shillings per week up to 13 weeks); a guardian benefit (24 shillings); a
dependent allowance (16 shillings); a children’s allowance (8 shillings);
marriage (up to 10 pounds); and funeral and industrial assistance. These were
unilateral transfers. The second component needed certifications and means
testing, with provisions to avoid engendering stigma.
The third and
complementary component was related with the principle that, rather implicitly,
permeated the entire Report. Complementary meant encouraging private savings in
addition to the state’s basic provisions.