Beveridge (liberal tradition) refuted the assumption that joblessness is to be

found in moral vices. Unemployment is the contrary effect of 3 different

mechanisms:
1. Technological innovation
2. Cyclical or seasonal fluctuations in demand
3. Lack of communication bw workers and employers
The solution he came up with was to set up labour exchanges.
Reports he made drew attention of the Royal Commission on the Poor Laws and
asked him to join the Board of Trade headed by Churchill in 1908. He was given
job to formulate a national scheme of Labour Exchanges.

2 factors that made possible what was proposed in the report:

1. New blueprint for ec policy by Keynes assigned to the state the decisive
role of intervening during an ec crisis
2. WW2 provided a testing ground for and essential demonstration of the
Keynesian models validity. When war broke up, people were evacuated
from cities to the countryside, so different social classes talked to each
other and got to know each other resulted in national cohesion, and
move towards greater equality.

THE BEVERIDGE PLAN

Goal elimination of poverty.
How?
compulsory social insurance with national assistance and voluntary
insurance as subsidiary methods
allowances for children
establishment of comprehensive health and rehabilitation services
maintenance of employment
universal system of family allowance finances through taxation rather
than specific contributions
make sure that workers income is sufficient to satisfy the needs of the
family, so that to abolish want

Fundamental principle universalism, but not to weaken individual sense of

responsibility.
Aim to ensure that the state of being unemployed did not become more
appealing than being in work principle of less eligibility.
B wanted means testing to be abandoned. So, he wanted universalism,
simplification and homogeneity. Also, fragmentation of duties and separate
departments were to be replaces by a Ministry for Social Security.

B divides people in 6 categories: employees, other workers, married

housewives, other of working age but inactive, young under 16, elderly women
over 60, men over 65.

IMPACT OF THE BEVERIDGE PLAN ON WELFARE LEGISLATION

many of the elements in his scheme were not implemented, or even

abandoned
some argued that it contained incongruities
Churchill defeated in 1945 and replaced by prime minister Clement Attlee. New
pol leadership shaped the new system.
1945-48 framework of the new British welfare state was erected.
1945 Family Allowances Act aimed at eradicating child poverty, with no
means test. It introduced the principle that reproduction of family is of benefit of
community., so should be encouraged.

In the Report - a tripartite scheme. But the new system confined to employees
and level of benefits was lower. Later gradual erosion of the benefits in real
terms bc cost of living increased. Over the years, the share paid by state from
33% to 14%, undermining this system to the advantage of pay-as-you-go
system. Also, opposed to BV the new system had a means-testing approach.

1946 0 National Health Service most popular achievement, most widely

praised abroad. 1st ever national general health service. Features it had central
national administration, financing through general taxation, freedom to choose
ones GP, free admittance and treatment in hospitals, free medicine. Soon
countermeasures, bc too rapid rise in costs. So, started to require patients to
pay contributions.
Means-testing became more widely used from 1960s on.

BV as the founding father of the ws does not match with what really happened.

IS BEVERIDGE STILL USEFUL FOR WELFARE REFORMS?

BV is still very often cited.
Interest in his work bc he pinpointed some of the key features of social
protection arrangements. He paid a lot of attention to the possibility that welfare
policies might cause dependency. He also sustains that maintaining the right to
benefit must originate from a previous contribution.
Negative side of means-testing approach: substantial cost of procedures,
possibility of false positive and false negative cases, incentive to beneficiaries to
act opportunistically.