Labour needs a new Beveridge Report, fit for the 21st Century

Chris Evans MP

Just before Parliament broke for recess the Welfare Reform and Work Bill was about to pass another hurdle on the way to becoming law. George Osborne hailed it as “a central part of a new contract for Britain”, which all “progressives” should rally round. Once again the Chancellor claimed for the Conservatives the mantle of reform – leaving Labour to oppose or support.

Of course, there are parts of the Bill Labour supports: more apprenticeships, lower rents for social housing, and capping the amount that people can claim in benefits so people are always better off in work – a measure from Labour’s manifesto. But Osborne’s Bill also abandons the goal of ending child poverty, and cuts support for those too sick to work. No “progressive” can support that, which is why Labour MPs voted for our reasoned amendment, showing which parts of the Bill we support, and which we will seek to stop or change. That is the kind of responsible, constructive Opposition the country needs.

But the deeper failing of Osborne’s welfare reform, and an opportunity for Labour, is the lack of ambition – which is odd for a man who really, really wants to be Prime Minister. His attempt at reform is another in a long line of modifications to the post-war welfare state that William Beveridge designed in 1942. The system we have now, largely based on means testing, bears little resemblance to Beveridge’s blueprint for a contribution-based social insurance system, with flat rate benefits. And yet, the Chancellor is still trying to bolt on new features to a creaking frame which is more than 70 years old. We still have relics of that system: National Insurance, Labour Exchanges (in the form of Jobcentre Plus), and the notion that what people can claim reflects what they’ve paid in – an idea almost completely at odds with how the system actually works.

Any successful social security system demands the consent of the whole public, not just part of it. Public trust in the welfare system is at an all-time low, with three in four people thinking we spend too much and get too little in return. That trust is being eroded by the system’s contradictions. It shouldn’t be surprising to politicians that when the public compare their understanding of how the system should work, to how it really does, their response is dismay, anger, or even resentment toward those who are seen to be taking advantage.

For Labour to win the welfare debate we should start with an acceptance that the Beveridge Report was written for a very different world: for a country rebuilding after war, when 40 per cent of jobs were in manufacturing, only a third of working-age women were employed, and one in three workers were under 25. Life expectancy was around 70 years for men, 76 for women. Very few moved; either geographically or socially.

Rather than offering blanket support or opposition to Osborne’s latest attempt at patching the tyres on a broken car, Labour should offer nuanced support to his plans, backing the bits that will work, opposing the parts that will not. But beyond this we can reclaim our place as the party of welfare reform with a bold and comprehensive plan. A new Beveridge Report, fit for the 21st Century.

It should be the Labour Party that is calling for all moderates and progressives from across the political spectrum – and those outside of politics altogether – to get behind our plan. As a political party we have the ability to marshal diverse voices in favour of a fair, efficient welfare system that supports people into sustainable work and provides for those in need. We can be the ones that propose the radical changes that are needed.

However, to really achieve this Labour politicians must be willing to give up control. While a new Beveridge Report can be commissioned by us and championed as a Labour vision for the future of welfare, it cannot just be a policy document by Labour MPs for Labour MPs. Like the original, it must be led independently. And like the original, nothing can be off the table. Tax credits, out-of-work benefits and employment support, and how we help people with housing costs, disability and in old age. And, of course, how we pay for it all.

There will be recommendations we are uncomfortable with, the report will find areas for change that will not sit well with many of us. But if we are to reclaim welfare reform and provide a positive Labour vision we must be willing to challenge ourselves as well the country. We must be willing to support new ideas, not just offer blanket opposition to the Tories.

It is only by presenting bold new ideas, built on an acceptance that we do not have a monopoly on truth, that Labour can control the agenda. If we match the ambition of Beveridge we can take welfare reform from this government and ensure it is a Labour vision that shapes the future.

5 Comments:

  1. Alex

    Why not as opposed to apprentices put the school leaving age up to 18 and have smaller trade schools it cant be hard if a child is not accademic at 13 to let him/her go to trade school and try all the trades untill 15 say then have tests to see which would suite them best while only doing a few core Gcses them employers can take them at 18 yrs old as improvers

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  2. Andrew Searson

    I agree with Mike. Labour have to think beyond the present paradigms on welfare, in work benefits etc, framed by the Tories which is divisive and panders to the worst in human nature. The concept of basic income or a ‘Citizen’s income’ should be seriously explored. It’s universality would equalise the anti welfare arguments and it would eradicate the fear of poverty. We should seriously be exploring a Land Value Tax as well as making a serious plan to close all tax loopholes and avoidance schemes. We have under 5 years to get a people’s manifesto to match that of 1945. The anguish and fear faced by the masses in the 1930s leading up to the 1945 elections are here again today but so are the aspirations, dreams and hopes for a better Britain, a more fairer Britain and a government that governs for the many not the few. The time is now. Let us be radical.

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  3. Robert

    “Of course, there are parts of the Bill Labour supports: more apprenticeships, lower rents for social housing, and capping the amount that people can claim in benefits so people are always better off in work ”

    Surely the way to do the bit about welfare and wages is to pay people a decent wage not the same as welfare for god sake.

    Between labour and the Tories they got rid of over 92,000 disabled people how many more before one of the parties ask are they all fakes cheats, because after listening to Reeves I would say they must be.

    Labour Tory, Tory Labour the difference well do we have any, I hope Corbyn has some, but I will not hold my breath.

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  4. George Talbot

    Providing enough benefits are available to those in work, those for the unemployed need not be held below a basic pay. And this may be unfair. Thus a widower and widow each with three school age children who marry surely deserve high benefits when each earns low wages?

    But if Labour wants to emulate postwar welfare in the 21st century, I urge it to recognise more changes than Chris Evans does. Beveridge assumed full employment, decent wages and retirement much closer to the end of life. These minimise costs and avoid envy of the pool of unemployed now used to curb retail price inflation and of pensioners.

    Since then decades of deregulation including from marriage for life to free love, divorce on demand and gay marriage, and from a prices and incomes policy and capital controls* to free labour and capital markets have created an unsound global system that depends on unsustainably expansionary monetary and fiscal policies supported by large benefits. And deregulation of fractional reserve banking has resulted in growing mountains of credit and intractable debts.

    Hoping for “a fair, efficient welfare system that supports people into sustainable work” is an illusion to which Labour is prone. It should listen to The Debt Business† and reflect on Lord Turner’s closing comment, from 36:02 mins. This ends: “If we can’t break this dependence on debt, it’s only a matter of time before we face another disaster.”!

    * Capital controls allow governments to set exchange rates to balance current accounts. Ours is 6% of GDP in deficit.
    http://www.bbc.co.uk/programmes/b066w659

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  5. Mike Curtis

    It is a pity that “..presenting bold new ideas” manages to avoid any mention of a Basic Income which at one stroke virtually eliminates poverty and makes the system future proof against the predicted fall in employment as the technological revolution really starts to bite. It would be expensive, but by removing all the paraphernalia of means testing and managing the ridiculously complicated system we have managed to build over time, it would save a lot of money directly. Indirect benefits in, for example health and crime, should make it a viable, even attractive, economic proposition.

    Simply by using the word “welfare” we are presupposing a continuation of an unequal society where there will be some people left out who must be helped either by charity or explicit redistribution. In a rich country in an increasingly rich world at the start of an age of technological marvels, we in the Labour Movement should surely be looking at nothing less than a society where nobody is left out; where everybody can live a life, if not of plenty, then at least enough to maintain health and dignity. This does not mean the end of just rewards for hard work, entrepreneurship or differentials, just the end of poverty.

    A new report certainly, but I would not call it a new “Beveridge” which implies reapplying old principles,. It should be a rigorous exercise to define and cost an entirely new way forward.

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