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CHAPTER 2

‘From cradle to grave’

This is the greatest advance in our history. There can be no turning back. From now on Beveridge is not the name of a man; it is the name of a way of life, and not only for Britain, but for the whole civilized world.

Beveridge to Harold Wilson shortly after his report came out, recounted in Wilson, The Making of a Prime Minister, 1986, p. 64.

THE PUBLIC RECEPTION of the Beveridge report was indeed ecstatic. The leader writers of all the newspapers, the Daily Telegraph excepted, blessed it.¹ The Times called it ‘a momentous document’ whose ‘central proposals must surely be accepted as the basis of Government action. The main social standards on which the report insists are moderate enough to disarm any charge of indulgence.’² A survey of public opinion shortly after publication showed 86 per cent in favour and a mere 6 per cent against. Most notably, the better off favoured it almost as enthusiastically as those who stood to gain most. Among employers only 16 per cent felt they would gain directly, but 73 per cent favoured its adoption. For those defined as upper-income groups, 29 per cent felt they would gain, but 76 per cent supported the plan. Among the professions the figures were 48 and 92 per cent.³ Home Office intelligence reports monitored, in Paul Addison’s words, ‘an extraordinary anxiety that somehow the report would be watered down or shelved’.⁴

Such anxiety was not without justification. Some instantly said it could not be afforded, even as others argued that the benefits Beveridge was proposing were too low. The journalist J. L. Hodson recorded in his diary the evening he heard Beveridge broadcast the details of his plan:

Some of the Big Business gentlemen are already calling it a scheme that will put us all on the Poor Law. Unless prices are to fall a good deal after the war, the scheme errs on the side of modesty of benefits paid. £2 a week [the sum Beveridge recommended for the pension and an unemployed married man] won’t go very far. T. Thompson writes me from Lancashire: ‘Beveridge has put the ball in the scrum all right. I wonder what shape it will be when it comes out.’⁵

It proved to be a rather different shape. But the first question was whether it would come out at all.

Sir Kingsley Wood, the Chancellor of the Exchequer, struck first, even before the report’s publication. On 17 November he minuted Churchill that the plan involved ‘an impracticable financial commitment’. Wood in his youth had led the battle by the Friendly Societies against Lloyd George’s 1911 health insurance package. He now told Churchill that Beveridge’s plan would increase taxation by 30 per cent. It would not abolish want, but it would give money to those who did not need it. ‘The weekly progress of the millionaire to the post office for his old age pension would have an element of farce but for the fact that it is to be provided in large measure by the general tax payer,’ Kingsley Wood declared, launching a theme that would be echoed time and again down the years. He added: ‘Many in this country have persuaded themselves that the cessation of hostilities will mark the opening of the Golden Age (many were so persuaded last time also). However this may be, the time for declaring a dividend on the profits of the Golden Age is the time when those profits have been realized in fact, not merely in imagination.’⁶

By contrast Keynes, whom Beveridge had repeatedly consulted over dinners in West End clubs, believed the plan broadly workable and affordable.⁷ He was later to argue that ‘the suggestion that is being put about in some quarters that there are financial difficulties is quite unfounded.’⁸ After listening to Keynes, Beveridge had in fact trimmed his original ideas considerably in an attempt to keep costs down. The biggest single factor here was his proposal that old age pensions should be phased in over twenty years as people’s contribution records grew. But he had also agreed that family allowances be paid only for the second and subsequent children, and he had dropped plans to have full insurance for housewives, and benefits for those unable to work because they were caring for sick or aged relatives.⁹

Some of Churchill’s closest advisers also disputed Wood’s view. Lord Cherwell, his economic adviser and close personal confidant, thought it ‘altruistic but worth its cost’, and likely to ‘improve rather than worsen our economic position’. But he worried that the expenditure would alienate opinion in the United States on whom Britain’s economy was now heavily dependent. Americans would think they were being asked to pay for British social services. But he observed perspicadously: ‘On the other hand there has been so much carefully engineered advanced publicity that the Government’s hand may have been forced.’¹⁰

While Churchill’s advisers argued, the government began desperately playing for time. The report was promptly referred to a committee of officials chaired by Sir Thomas Phillips, an old adversary of Beveridge who had originally worked for him in the Board of Trade. The committee accepted the principles of universality and a comprehensive health service, but still challenged key aspects of the social security side of Beveridge’s scheme.¹¹ It fell to Sir William Jowitt, who had replaced Greenwood as the Minister for Reconstruction, to tell the Commons on publication day that the government would merely ‘formulate its conclusions’.¹² The government, however, had a real problem. As a coalition it was almost bound to be divided between its Labour and Tory parts on such issues; moreover, the Labour and Tory parts were themselves divided internally. Some Conservative ministers supported the plan: Leo Amery, for instance, described it as ‘essentially Conservative’;¹³ others like Kingsley Wood damned it; yet others believed simply that no commitment could yet be made. Labour ministers, unsurprisingly, were in favour. But Bevin, his old distrust of Beveridge surfacing, took strongly against it, declaring – inaccurately – that many parts were unacceptable to the unions. Attlee and Dalton were in favour but remained lukewarm in pressing for implementation. Dalton in particular had noted a minute from Churchill in which the Prime Minister said he could not commit himself without a general election to test popular support.¹⁴ Dalton feared Churchill would win such an election by a landslide, taking Labour off the map.

It was left to Herbert Morrison, newly in the War Cabinet, to argue vigorously and in some financial detail the case for a firm immediate commitment.¹⁵ To accept the Treasury’s pessimism, ‘would be a surrender to idiocy in advance,’ he declared. The social benefits of the plan were ‘very great’ and it represented ‘a financial burden which we should be able to bear, except on a number of very gloomy assumptions’.¹⁶ He lost, but Churchill shifted his ground. The government would undertake to prepare the necessary legislation, but it would require a new House of Commons to commit the expenditure.¹⁷

Two months after the report’s publication, parliamentary pressure finally forced a debate. Sir John Anderson, Lord President of the Council, ‘a dry old civil servant-turned-minister’,¹⁸ led for the government with so little enthusiasm for Beveridge’s plan that he inflamed not only the Labour benches but a significant minority on his own side. MPs heard him declare ‘there can at present be no binding commitment. Subject only to that… I have made it clear that the Government adopt the scheme in principle.’¹⁹ The following day Kingsley Wood, the Chancellor, ‘lingered with apparent satisfaction over the financial perils of the plan’.²⁰

Since the start of the war, however, the Conservative Party had ceased to be a coherent body of opinion. The thirty-five-year-old Quintin Hogg (the future Lord Hailsham), neatly characterised by Angus Calder as ‘a frothing, bubbling, mockable but curiously clever young man’,²¹ had returned from the front to join a dining group of other youngish Tory MPs which met at ‘a little restaurant in the Charing Cross Road’²² (Conservatives having always had a penchant for plotting in supper clubs). The MPs were much attracted by Macmillan’s Middle Way view of a mixed economy steering a course between socialism and old-style laissez-faire capitalism, and were busy forming themselves into the Tory Reform Committee which was to receive tacit encouragement from Conservative ministers such as Butler, Eden and Macmillan himself. ‘What brought us together,’ Lord Hailsham recalled almost fifty years later, ‘was our feeling that the attitude of our leaders in the corridors of power as exemplified by their pussy-footing over the Beveridge Report was unduly unconstructive and unimaginative.’²³ Taking as his formula ‘publicly organized social services, privately owned industry’,²⁴ Hogg saw Beveridge as ‘a relatively Conservative document’ and tabled a motion seeking the immediate creation of a Ministry of Social Security. More than forty other Conservative MPs signed it.

Jim Griffiths, to whom would finally fall the implementation of Beveridge, capped that from the Labour benches with an even stronger call for immediate implementation. In the cruel but clever way of politics Herbert Morrison – possibly as a punishment precisely because he had been the most overt supporter of Beveridge in the War Cabinet – had been given the task of winding up for the government at the end of the third day. Faced with defending a negative policy that he had tried to make more positive, he produced what Jim Griffiths was to call ‘the best debating speech Morrison ever made’, underlining those parts (sixteen of the twenty-three recommendations) that the government did accept even if it did not yet intend to act.²⁵ The speech did enough to stop the Conservatives from rebelling. But 121 MPs from the Labour, Liberal and Communist parties together with 11 independents voted with Jim Griffiths. Among them was David Lloyd George casting his last ever Commons vote. It proved one of the biggest revolts of the war against the government. More than one historian has seen it as a defining moment in Labour’s 1945 election victory.²⁶

The debate finished on 18 February and in the course of that month six by-elections, ‘a general election in miniature’,²⁷ were held. The Beveridge report featured strongly in each campaign. In four of the six seats the Conservative vote dropped by 8 per cent even though Labour and the Liberals did not stand. The Home Intelligence department of the Ministry of Information was reporting ‘a disappointed majority’, adding ‘the Government is thought to be trying to kill or shelve the report.’²⁸

Churchill reacted. On 21 March 1943, in a broadcast entitled ‘After the War’ – his first wartime broadcast to concentrate on the home front – he continued to warn against imposing ‘great new expenditures on the State without any relation to the circumstances which might prevail at the time’.²⁹ But recognising ‘a duty to peer through the mists of the future to the end of the war’ he promised a four-year plan ‘to cover five or six large measures of a practical character’. These would be put to the electorate after the war and implemented by an incoming government.

He did not mention the Beveridge report by name, an omission that can only have been deliberate. But he promised ‘national compulsory insurance for all classes for all purposes from the cradle to the grave’. It was, he said, ‘a real opportunity for what I once called “bringing the magic of averages to the rescue of the millions”.’ To that he added the abolition of unemployment. ‘We cannot have a band of drones in our midst, whether they come from the ancient aristocracy or the modern plutocracy or the ordinary type of pub-crawler’, and the voice of Keynes could be heard in Churchill stating that government action could be ‘turned on or off as circumstances require’ to control unemployment. There was, he accepted, ‘a broadening field for State ownership and enterprise’ and his vision included a housing drive, educational reform, and much expanded health and welfare services. ‘Here let me say there is no finer investment for any community than putting milk into babies.’³⁰

Thus it was Churchill, rather than Beveridge, who defined social security as running ‘from the cradle to the grave’ – a phrase used by both the Daily Mirror and the Daily Telegraph on publication day – as he signed the wartime coalition up to it. What Lord Woolton, the future Tory party chairman, was to call ‘the shandy gaff’ of Conservatism and Socialism, which was to dominate post-war politics for thirty years, was beginning to emerge.³¹

Churchill’s initial opposition to Beveridge needs explaining. First and foremost his attention was fixed firmly on winning the war, without worrying much about what was to come afterwards beyond hazy notions of some continuation of the coalition with himself at the head. This was, after all, still only ‘the end of the beginning’. D-day remained eighteen months away. Second, he had to hold together a coalition which contained Labour but also a Tory party that was itself divided on the plan. Third, his doubts over the affordability of the proposals can be seen as genuine. And fourth, despite the fact that Beveridge had constructed something that Churchill would recognise and had himself implemented thirty years earlier – social insurance – the new plan was very different in character.

The social insurance Churchill had helped introduce had been designed, broadly, for the working classes, with the Poor Law in reserve as the ultimate safety net. The better off had been excluded from the state-organised unemployment and health schemes. Beveridge’s plan was thus not ‘the cause of the left out millions’ which Churchill had espoused as young man, but the cause of all the millions.

And finally Churchill had been infuriated by Beveridge’s determination to get the government to act immediately, as revealed both in the repeated pleas in the text of the report and in the pre- and post-publication publicity that he had sought. The Prime Minister was reported ‘to have taken strong exception to the report, to have refused to see the author and forbidden any government department to allow him inside its doors’.³² Churchill proved, however, on one level as good as his broadcast word, while on another getting his way. A month after the broadcast a Whitehall committee chaired by Thomas Sheepshanks was set up to consider implementation of Beveridge’s report, eventually producing a White Paper on Social Security in 1944.³³ The same year the government published White Papers on a National Health Service and on Employment Policy, set up a Ministry of National Insurance, and delivered the 1944 Education Act. A housing White Paper followed in March 1945 and on 11 June, as virtually the final act of the coalition government, the Family Allowances Act became law. It provided five shillings (25P) a week for the second and all subsequent children to every family in the land – real money at a time when the average male manual wage was £6. The first universalist benefit of the modern welfare state had been created, even if its actual payment fell due under a Labour government. Yet only to that, and to the Education Act whose financial impact in mid-1945 was yet to be fully felt, did Churchill commit significant sums of the taxpayers’ money ahead of a general election.

Beveridge himself – who in March had spoken from a Liberal Party platform on the theme of ‘a people’s war for a people’s peace’³⁴ – set to work on a follow-up report on how to achieve full employment. But he found himself frozen out of Whitehall, the Treasury officials whom he had invited to join his study withdrawn. The government refused to commission his report: indeed, it worked frantically to get out its own White Paper, which proposed a ‘high and stable level of employment’ ahead of Beveridge’s Full Employment in a Free Society. Jose Harris judges that the way he had courted massive advance publicity for the 1942 report ‘was seen by many people inside Government as a flagrant breach of Whitehall conventions and as an attempt to usurp the powers and functions of the regular policy making machine’.³⁵ He was not to work in Whitehall again until 1949, when the Labour Government appointed him to head an inquiry into the BBC monopoly.