Aside from housing policy and the question of what the purpose of a political speech is, the third part of my critique of Tim Farron’s William Beveridge Memorial Lecture was that it went for, “simple cheer-leading for Beveridge – he was a Liberal! he did great stuff! hooray! – rather than any crunchier analysis of William Beveridge’s legacy and what it means for contemporary policy problems”.
To which a fair response, ‘OK Mr Critic. What would YOU have said?’ So here are the two crunchier problems with Beveridge’s legacy I would have addressed had an unfortunate error with the invites (or a storming of the podium) seen me give the William Beveridge Memorial Lecture. Both are looked at from the perspective in England, although similar issues apply in Scotland, Wales and Northern Ireland too.
Two of the safest words to use in any speech to a Liberal Democrat gathering are “William Beveridge”. Yet look more closely at what he believed, and you find views that those who applaud most enthusiastically at the mention of his name are often dubious about when expressed by someone else, especially if there are holding a Conservative Party membership card.
Beveridge opposed the idea of a ‘welfare state’. As he said himself of the eponymous Beveridge report, the aim, “was not security through a welfare state but security by cooperation between the state and the individual”. Moreover, he supported compulsion: “Unemployment benefit will continue at the same rate without means test so long as unemployment lasts, but will normally be subject to a condition of attendance at a work or training centre after a certain period.”
In other words, he wanted a world where the state helps individuals rather than substitutes for their effort. But the world in which he wanted to do that is very different from the one we are now in, which leaves us with two major policy problems.
First, we have health and social care systems based on fundamentally different principles. Health is free at the point of need; social care is means-tested. Social care is, as Paul Burstow calls it, Beveridge’s orphan.
Moreover, the costs of moving one system to the other basis would be massive. The exceptions where you pay for state health care (such as prescriptions) are fairly minor compared to the full costs of the system, and conversely the means-tests for social care bring in massive income that would be lost if it became free.
So we are going to have two separate systems, run on two separate bases. But we also know that health and social care are increasingly best delivered when done in an integrated fashion, especially because people’s longer lives means more people who need both long-term health and social care. Moreover, housing is often an important factor that cuts across both health and social care.
How then to square this growing circle? The answer is to shift to a focus on the individual, emphasising prevention and early intervention from whatever mix of services the individual needs and based on someone taking responsibility for helping them through the different systems in one integrated manner.
It needs to be easier to share personal records across different parts of the system – with those personal records under the control of the patient, who gets to choose what to share, but who if they wish to have their data shared then find the system is able to do just that, accurately and quickly.
Alongside that we need to make it easier and more common for people to save for their social care costs. As Steve Webb has shown with pensions reform, a focus on making financial options simpler and with lower administration costs can bring benefits to millions, including those on low incomes who can only afford to save a little. Indeed, the less you can afford to save the more important it is that fees are low, savings are safe and financial products appropriate.
Second, there is the problem with the contributory principle. Beveridge’s world was predominantly one of mixed-sex couple being married for life, the man at work and the woman at home, with both dying shortly after retirement.
For that sealed unit a contributory principle based on the earning of the one person who worked made much sense. But now that we have a far more diverse pattern of households, it no longer makes sense. And one where – thank goodness – people live for longer. In Beveridge’s time life expectancy was lower than the pension age; now, thank goodness, it’s much higher.
For a 21st century society, the idea of basing a system on a sealed household unit with one member of it making life-long contributions is no longer workable. Life is much more varied than that, and that also means great variety in a household’s ability to make contributions from a regular pay packet. That’s a big problem, especially as it rests on the assumption that paying work is the only thing worthy of counting as a contribution in a contribution-based system. Move away from that assumption and you run into even more complexity.
Which is why the smart move is to apply more widely the approach taken by Steve Webb on pensions. It’s a twin-track approach. A good basic safety net for everyone and in addition an easy, low-cost and reliable way for people to top up the safety net as and when they can during their lives.
In the circumstances of this century, that combination is far truer to the original liberal principles of Beveridge than what we currently have outside pensions and is the way forward not just on pensions but on social care and what’s currently called, and greatly neglected, ‘income protection insurance’.
Take that approach and we’d have a welfare system that honours William Beveridge’s legacy not just in name but in practice too.