Beveridge Approach vs Workfare Approach - Essay Example

www.academia-research.com Sumanta Sanyal d: Welfare The Beveridge Approach versus The Workfare Approach (The New Right & New Labour) Introduction For any essay on Welfare in the present context it is first necessary to consider the concept of poverty alleviation as the English saw it. This is so because the English poor laws, from the Statute of Labourers (1349-1350) and proceeding to the Reforms of 1834, are the very basis of the concept of the Welfare State worldwide, and certainly in many European countries and the USA where they are closely associated. "Certainly it is, that, on the welfare of its labouring Poor, the prosperity of a country essentially depends " (Sir Frederic Eden, The State of the Poor, 1797, - Derived from: Quigley, William P., Undated). The Ideology of Welfare Put succinctly, politically there are two mainstreams of ideology - the left wing and the right. The Left Wing: The left wing stands for institutional welfare in a collectivist fashion with public provision. The Right Wing: The right wing, conversely, stands against institutional welfare with public provision. Instead it is for individualistic residual welfare. These are the two broad spectrums of the two types of politics available today. Nevertheless, it is cautioned that matters are not that straightforward. Often left-wingers favour practices that disable institutional support that may affect their broader ideology and there are right-wingers who may favour it as it positively affects their broader policies. This is only a particular instance. (An Introduction to Social Policy, Undated). With these preliminary investigations into the progress of welfare from the British realm to the present day the essay now proceeds to examine the Beveridge and Workfare approaches. The Beveridge Approach In November, 1942, Sir William Beveridge presented his report entitled "Social Insurance and Allied Services" to His Majesty the King. In it he mentioned that there were three guiding principles that he had used to formulate his policy of public social service. These are as follows. Sir Beveridge asserted that any experiences gleaned in the past must be used to build opportunities to the future. Such experience should not be restricted on the basis of any sectional interests vested in its gathering. He personally remarked of this - "A revolutionary moment in the world's history is a time for revolutions, not for patching." (The Beveridge Report, 1942) The second principle cautioned that the organisation of social insurance should be treated as only a part of overall social progress. This was so because social insurance aimed at negating all want in the British people. Sir Beveridge cautioned that 'want' was only one aspect of the reconstruction that was then necessary to put the British Empire back on its feet after the war. The other four were - disease, ignorance, squalor and idleness. Then third principle was that social security w3as to be achieved by co-operation between state and individual. The state would offer security for service and contribution. It would organise security but not stifle incentive, opportunity and responsibility. It would establish a national minimum but it would leave room and encourage voluntary action by an individual to procure more than that minimum for himself and his family. (The Beveridge Report, 1942) New Labour's Welfare Policy When the 'New Labour' Party came to power in Britain in May, 1997, it did so with a considerably changed economic manifesto from its previous stint which immediately preceded its re-election. Under Tony Blair, the new labour economic policy was strongly oriented towards the supply side and the welfare state was intended to exist on the basis of steady employment provided by the pull of demand. All these changed policies were meant to dovetail with Tony Blair and Bill Clinton's 'embryonic' "Third Way" - a set of ideologies that is meant to take account of the increasing phenomenon of globalisation where no country in the world can expect of exist on it own without regard to the economic realities of other countries. These changes were in further regression to the policies of the social democrats all over Europe in the 60s and 70s. The labour party reoriented itself to the tune that it hoped to intervene minimally with industry and collaborate on a similar lower scale with trade unions. (Glyn and Wood, Undated) The Salient Features: The Beveridge Report The Beveridge report depended upon the alleviation of want by improving the State insurance to levels where it could provide against interruption and loss of earning power and special expenditure arising at birth, marriage and death. Beveridge based his report on social surveys impartially conducted in a scientific manner to identify those afflicted with want. A minimum standard was set against which unsatisfied want could be measured. The surveys found, to a majority, that three-quarters to five-sixth of such people afflicted with want were so due to interrupted or loss of earning power. Practically the rest of the one-quarter to one-sixth were so due to unrelated earnings during income period to amount of family needs. The earning power automatically covered the other assistance categories such as security for costs incurred at birth, marriage and death. The surveys were conducted before old persons accessed pension benefits. The standard used to conduct the surveys was deemed to be the subsistence level and those living under it or near it were deemed to be in need of state assistance. (The Beveridge Report, 1942) The Beveridge report must be seen in the light of the fact that Britain had to provide for its citizens at a time that was a transition between the tow wars. Surveys revealed two salient facts about the age constitution of the British population. A major proportion of the population was above working age and was due for pension benefits. Beveridge proposed that these be provided with adequate pensions on an ongoing basis without means tests over a transition period of 20 years. Beveridge hoped that this would be an adequate coverage of old persons in need of assistance. The second fact was that the birth rate of the population was exceedingly low and, for this, Beveridge proposed that adequate assistance for childcare and maternity care would reverse this trend and induce the population to invest in children. (The Beveridge Report, 1942) The Beveridge report clarifies six categories of people, encompassing all strata of citizens regardless of upper income limit, as candidates for its recommended social benefits. These are as below. All persons with normal employment under contract of service. All other persons gainfully employed as employers, traders and independent workers. All housewives as married women of working age. All persons of working age not gainfully employed. All persons below working age. All persons retired and above working age. (The Beveridge Report, 1942) As mentioned earlier, the Beveridge report placed the highest emphasis on social security for the last two classes, the retired persons and the children. Retired persons would get pension benefits while children would get allowances. The other four classes would get social security appropriate to their circumstances. All classes would be covered for comprehensive medical treatment and rehabilitation and funeral expenses. (The Beveridge Report, 1942) The essay has posited the main features of the Beveridge report and now it shall proceed to develop comparative instances between the report and The British Labour Party's 'New Welfare Policy', uncovered in 1997. The Two Approaches: A Comparison At the very onset of this section it is stated that the essay finds that the Beveridge solutions for social insecurity are more socialistic and inclined towards the left than the Labour new welfare deal. This is so because of a few notable factors. When the Beveridge report was filed Britain was coming out of the aftermath of two world wars. The working age population was decimated to a high percentage. The major age group were those past working age. There was a severe need for regeneration through the birth of more children to induct fresh blood into the British heritage. So the Beveridge report was preoccupied with these two categories of citizens - the possible pensioners and the children. The first was to be taken care of in lieu of their past valued services to the system. The second was to be valued so that the heritage could be sustained into the future. Like Roosevelt's 'New Deal' across the Atlantic the report had to rely highly on public spending, possibly on infrastructure, to fuel the economy into healthiness. Though reconstruction in Britain was a joint effort with both public and private participation the private sector was still to weak to bear the costs of providing social security, even minimally, expect as engines generating jobs with some attendant benefits for those so employed. Social security was the responsibility of the government - the institutional factor. There was little scope for manipulating intricate macroeconomic factors so that security could be automatically provided by market forces. Also, there was necessity to provide institutional direction to the population, as in the instance of raising the rates of childbirths. In contrast, Tony Blair's new government of 1997 was faced with challenges of entirely different nature. Global forces that were somewhat beyond the reach of the government were increasingly threatening the British economy. Lower production costs elsewhere were pushing British goods and services out of both internal and external markets. The result was decrease in production capacities and declining job opportunities. This was compounded with inflation at home fuelled by increased government spending (Glyn and Wood, Undated). As a result the new labour welfare policy was more inclined towards the right and less socialist than the Beveridge one. The Blair government was depending upon supply side economics to strengthen the economy. Increased production would increase job availability. Easy availability of labour would put downward pressures on wages that would only fuel increase in productive capacity. The downward pressure was also supposed to keep inflation down to sustainable limits. Government spending, especially on new welfare schemes, was to be curtailed. The private sector was supposed to keep employment levels high without dependence on institutional security measures to insure earnings. Two other salient features of this new deal - the Blair one - were that there was sustained effort on providing efficient healthcare facilities to all citizens. The other was in the instance of children's education. The new labour manifesto placed major emphasis on improving children's education by lending direction to the school system in Britain. This is another area where the Blair welfare scheme has some difference with the Beveridge one. The Beveridge schemes were trying to induce the population to have more children and provided attractive child benefits as incentives. The Blair government was intent on revamping the school system because of another very intense reason. The present global situation is much more competitive than the one at Beveridge's time. At that time the war was over and there were jobs available for those who could take them. The level of competence was also not so high as today in relevance to essential technical knowledge. The level of technical competence required today is much more than at that time. The pressure on children is also high. To relieve some of this pressure of intense competition it is necessary to direct their education in such a manner that, on an overall basis, they are able to exist comfortably in a world where competencies are highly stratified. Thus, it is necessary to provide them with a round education that can enable them to take up whatever profession that they are naturally suited to and that they are capable of. New learning strategies, based on cognitive sciences, have to be employed. All these require expenditure and Tony Blair's government has to provide Britain with that. Strengths and Weaknesses: It is very difficult to project comparative strengths and weaknesses of these two approaches. This is because the time periods of these are so especially variant. The Beveridge approach was a basic one with little economic juggling while the Blair one has to do intricate juggling with macroeconomic issues, some being globally-influenced, before it can hope to succeed in its mission. Conclusively, the Beveridge schemes for providing social security were wholly institutionalised and thus wholly amenable to manipulation and directioning. On the other hand, the Blair schemes are partly dependent on market forces for providing social security. These market forces are diverse and all of them may not be amenable to manipulation and directioning. Conclusion In retrospection, whatever its strengths and weaknesses, the Beveridge schemes saw Britain through a rough patch in its history. It remains to be seen how the Blair schemes fare in the future. References Glyn, Andrew, and Wood, Stewart, Undated document, New labour's Economic Policy. Extracted on 18th April, 2006, from: http://www.economics.ox.ac.uk/Members/andrew.glyn/GlynandWood.pdf#search='Glyn%20and%20Wood%2C%20New%20labour%27s%20Economic%20Policy' Quigley, William P., Undated document, Five Hundred Years of English Poor Laws, 1349-1834: Regulating the Working and Nonworking Poor. Extracted on 17th April, 2006, from: http://www.uakron.edu/law/docs/quigley.pdf#search='William%20P%20Quigley%20Poor%20laws' Sir William Beveridge, November 1942, Report: Social Insurance and Allied Services. Extracted on 17th April, 2006, from: http://www.southalabama.edu/history/faculty/rogers/357/beveridge.html Bibliography Social Policy : Philosophy of Welfare, Sourced from: Mishra, R, Society and social Policy, 1984. extracted on 18th April, 2006, from: http://www.homestead.com/rouncefield/files/socialpolicy.htm An Introduction to Social Policy, The politics of welfare, Undated document. Extracted on 17th April, 2006, from: http://www2.rgu.ac.uk/publicpolicy/introduction/ The Labour Party Manifesto for the 1997 'UK' General Election, May 1997. extracted on 17th April, 2006, from: http://www.forscotland.com/tracklab/manifesto.html Read More