444.    The aim of the Plan for Social Security is to abolish want by ensuring that every citizen willing to serve according to his powers has at all times an income sufficient to meet his responsibilities.    Is this aim likely to be within our reach immediately after the present war?

445.  The first step in considering the prospective economic resources of the community after the present war is to see what they were just before the war.   The social surveys made by impartial investigators of living conditions in some of the main industrial centres of Britain between  1928 and 1937 have been used earlier in this Report to supply a diagnosis of want.   They can be used also to show that the total resources of the community were sufficient to make want needless.    While, in every town surveyed, substantial percentages of the families examined had less than the bare minimum for subsistence, the great bulk of them had substantially more than the minimum. In East London, in the week chosen for investigation in 1929, while one family in every nine had income below the minimum and was in want, nearly two-thirds of all the families had at least 20/- a week more than the minimum, and nearly a third had 40/- a week more than the minimum;   these were actual incomes after allowing for sickness, unemployment and irregular work. (‘See New Survey of London Life and Labour.   Table XVII in Vol. Ill, p. 91) In Bristol the average working-class   family enjoyed a standard of living more than 100 per cent, above its minimum needs; while one Bristol family in nine in the year 1937 was in sheer physical want, two families out of every five had half as much again as they needed for subsistence. (The Standard of Living in Bristol, p. 24.)     Similar contrasts were presented in every survey.    Another way of putting these contrasts is to compare the surplus of those who had more than the minimum with the deficiency of those who had less.    In East London, the total surplus of the working-class families above the minimum was more than thirty times the total deficiency of those below ft. In York, where Mr. Rowntree in 1936 used a much higher minimum—the standard of human needs containing more than bare physical necessaries of food, clothing, fuel and housing—the three classes of the working population living above the standard had a total surplus above it at least eight times the total deficiency of the two classes living below the standard.    Want could have been abolished before the present war by a redistribution of income within the wage-earning classes, without touching any of the wealthier classes.   This is said not to suggest that redistribution of income should be confined to the wage-earning classes;   still less is it said to suggest that men should be content with avoidance of want, with sub­sistence incomes. It is said simply as the most convincing demonstration that abolition of want just before this war was easily within the economic resources of the community; want was a needless scandal due to not taking the trouble to prevent it.

446. The social surveys showed not only what was the standard of living available to the community just before the war but also that it had risen rapidly in the past thirty or forty years.    The recent London and York surveys were designed to provide comparisons with earlier studies.    They yielded unquestionable proof of large and general progress.   When the New Survey of London Life and Labour was made in  1929, the average workman in London could buy a third more of articles of consumption in return for labour of an hour’s less duration per day than he could buy forty years before at the time of Charles Booth’s original survey. (New Survey of London Life and Labour, Yol I, p. 21.)    The standard of living available to the workpeople of York in 1936 may be put over-all at about 30 per cent, higher than it was in 1899. (Rowntree:  Poverty and Progress, p. 453.)   This improvement of economic conditions was reflected in improvement of physical conditions.    In London, the crude death rate fell from 18.6 per thousand in 1900 to 11.4 in 1935 and the infant mortality rate fell from 159 to 58 per thousand.    In York the infant mortality rate fell from 161 per thousand in 1899 to 55 in 1936; in the same period nearly 2 inches was added to the height of schoolchildren and nearly 5 Ibs. to their weight. (Rowntree, op. cit., pp. 298-302. For Glasgow heights and weights of boys and girls of 5, 9 and 13 years of age from 1910-14 to 1929-33 are given at para. 174 of the Report of the Committee on Scottish Health Services (1936 Cmd. 5204) and show increases in all cases) Growing prosperity and improving health are facts established for these towns not as general impressions but by scientific impartial investigation. What has been shown for these towns in detail applies to the country generally. The real wages of labour, what the wage-earner could buy with his earnings just before the present war, were in general about one-third higher than in 1900 for an hour less of work each day.    What the wage-earner could buy, when earning had been interrupted by sickness, accident or unemployment or had been ended by old age, had increased in even larger proportion, though still inadequately, by development of social insurance and allied services.

447. The rise in the general standard of living in Britain in the thirty or forty years that ended with the present war has two morals.    First, growing general prosperity and rising wages diminished want, but did not reduce want to insignificance.    The moral is that new measures to spread prosperity are needed.    The Plan for Social Security is designed to meet this need; to estab­lish a national minimum above which prosperity can grow, with want abolished. Second, the period covered by the comparisons between say 1900 and 1936 includes the first world war.   The moral is the encouraging one that it is wrong to assume that the present war must bring economic progress for Britain, or for the rest of the world, to an end.   After four years of open warfare and diversion of effort from useful production to the means of destruction during 1914-18, there followed an aftermath of economic conflict;   inter­national trade was given no chance to recover from the war, and Britain entered into a period of mass unemployment in her staple industries.    Yet, across this waste period of destruction and dislocation, the permanent forces making for material progress—technical advance and the capacity of human society to adjust itself to new conditions—continued to operate;   the real wealth per head in a Britain of shrunken overseas investments and lost export markets, counting in all her unemployed, was materially higher in 1938 than 1913. The present war may be even more destructive. It is likely to complete the work of the first war in exhausting British investments overseas and to deprive Britain largely of another source of earning abroad through shipping services: in these and in other ways it will change the economic environment in which the British people must live and work and may call for radical and in some ways painful readjustments. There are bound to be acute difficulties of transition; there are no easy care-free times in early prospect. But to suppose that the difficulties cannot be overcome, that power of readjust­ment has deserted the British people, that technical advance has ended or can end, that the British of the future must be permanently poor because they will have spent their fathers’ savings, is defeatism without reason and against reason.

448. The economic argument set out above is in terms not of money, but of standards of living and of real wages. If the argument is sound, it is clear that abolition of want by re-distribution of income is within our means. The problem of how the plan should be financed in terms of money is secondary, though it is a real problem, since the fact that the whole burden, properly distributed, could be borne does not mean that it can be borne unless it is distributed wisely. Wise distribution of the burden is the object of the Social Security Budget as outlined in Part IV. There it is shown that the Plan involves for the National Exchequer an additional charge of at most £86 million in the first year of full operation. It does not seem unreasonable to hope that, even with the other calls upon the Exchequer, an additional expense of this order could be borne when actual fighting ceases. The Budget imposes a much increased burden on the Exchequer in later years to provide retirement pensions; this is an act of reasonable faith in the future of the British economic system and the proved efficiency of the British people. That, given reasonable time, this burden can be borne is hardly open to question. The exact rate at which the burden will rise is not settled finally in accepting the plan, since the length of the transition period for pensions is capable of adjustment and, if necessary, can be prolonged without serious hardship. As regards the insured person, the Budget requires of him contributions for vital security which together are materially less than he is now paying for compulsory insurance and for voluntary insurance for less important purposes, or on account of medical services for which he pays when he receives them. For the employers, the plan imposes an addition to their costs for labour which should, be well repaid by the greater efficiency and content which they secure.

449. The argument of this section can be summed up briefly. Abolition of want cannot be brought about merely by increasing production, without seeing to correct distribution of the product; but correct distribution does not mean what it has often been taken to mean in the past—distribution between the different agents in production, between land, capital, management and labour. Better distribution of purchasing power is required among wage earners themselves, as between times of earning and not earning, and between times of heavy family responsibilities and of light or no family responsibilities. Both social insurance and children’s allowances are primarily methods of re-distributing wealth. Such better distribution cannot fail to add to welfare and, properly designed, it can increase wealth, by maintaining physical vigour. It does not decrease wealth, unless it involves waste in administration or reduces incentives to production. Unemployment and disability are already being paid for unconsciously; it is no addition to the burden on the community to provide for them consciously. Unified social insurance will eliminate a good deal of waste inherent in present methods. Properly designed, controlled and financed, it need have no depressing effect on incentive.

450.   Want could have been abolished in Britain just before the present war.    It can be abolished after the war, unless the British people are and remain very much poorer then than they were before, that is to say unless they remain less productive than they and their fathers were.    There is no sense in believing, contrary to experience, that they will and must be less productive. The answer to the question whether freedom from want should be regarded as a post-war aim capable of early attainment is an affirmative—on four conditions.   The four conditions are:—

(1)    That the world after the war is a world in which the nations set them­ selves to co-operate for production in peace, rather than to plotting for mutual destruction by war, whether open or concealed;

(2)    That the re-adjustments of British economic policy and structure that will be required by changed conditions after the war should be made, so that productive employment is maintained;

(3)    That a Plan for Social Security, that is to say for income maintenance, should be adopted, free from unnecessary costs of administration and other waste of resources;

(4)    That decisions as to the nature of the plan, that is to say as to the organisation of social insurance and allied services, should be taken during the war.

451. Is there any reason why the fourth condition should not be satisfied here and now?    Re-construction of social insurance and allied services to ensure security of income for all risks is a general aim on which all reasonable men would agree.    It involves changes affecting many sectional interests, but it raises no issues of political principle or of party.    It involves an immense work of detail in legislation and organisation for which time is essential, for which there may be less time in the uncertain aftermath of war than there is today.    If a plan for freedom from want, so far as social security can give it, is to be ready when the war ends, it must be prepared during the war.

452.To give effect to the Plan for Social Security embodied in this Report requires decisions of three kinds:  decisions of principle, decisions of execution and detail, and decisions of amount, that is to say of rates of benefit and contribution.   Decisions of the third kind, as to rates of benefit and con­tribution, do not need to be taken now; they can wait until the probable level of prices after the war is better known.   Decisions of the first kind, that is to say decisions of principle, can be taken now and need to be taken, if any Plan for Social Security is to be ready when the war ends.   The decisions required are:—

(1)    A decision to introduce a unified comprehensive scheme of social insurance embodying the six fundamental principles set out in paras. 303-309:   flat rate of subsistence benefit, flat rate of contribution, unification of administrative responsibility, adequacy of benefit, comprehensiveness and classification;

(2)    A decision to entrust administration of the scheme to a Ministry of Social Security ;

(3)    A decision to appoint some person or body to prepare the necessary legislation and bring the scheme into being, so that it is ready when the war ends.

Decisions of this character can “be taken by Parliament alone. If His Majesty’s Government accept the main recommendations of the Report, it is suggested that the first step would be to submit to Parliament resolutions approving the introduction of a scheme of social insurance and allied services, in accordance with the principles named, and approving the constitution of a Ministry of Social Security. If these resolutions were accepted, there should follow the setting up of some authority—a Minister, a group of Ministers or a body of Commissioners—to prepare the necessary legislation. The bringing into effect of a scheme on the lines of the Report involves the repeal of many Acts of Parliament and their replacement by one or two Acts of Parliament and a mass of detailed regulations. Consideration of the new legis­lation proposed would give Parliament a second opportunity of judging the scheme in concrete form. All the detailed Regulations, in accordance with normal practice, would be laid before Parliament before being put into force.

453.    Whatever body was charged with the task of preparing the new legislation and Regulations would deal with many questions of detail for which no decisions, or provisional decisions only, are suggested in the Report.   There are some matters for which fresh formal investigation might be required. These include:—

(a)    The organisation of the national health service forming the first part of Assumption B of the plan.    This is a matter for further investigation either by the Departments concerned or by a new independent body, in consultation  with  the  authorities  which  are  concerned  outside the Government;

(b)   The organisation of the rehabilitation service which forms the second part of Assumption B.   This matter is already under examination in the Ministry of Labour and National Service;

(c)     The problem of alternative remedies briefly described in paras. 258-264, and requiring, as is stated there, examination by some body with the requisite  technical  and practical  qualifications  and  ample time for investigation ;

(d)    The fitting of the special provisions for industrial accident and disease into the social insurance scheme;

(e)     The problem of differential rates of benefit and contribution for different parts of the country or different occupations, and the various problems of   demarcation   between   different   insurance   classes.   These   could appropriately be examined by some body which might ultimately become the suggested Social Insurance Statutory Committee.

All these and many other questions require continuous detailed study. That study will come automatically, if once the decision of principle is taken to establish a unified co-ordinated system of social security which shall put an end to physical want.

454.    The foregoing outline for procedure does not mean that the Plan for Social Security is indivisible in time, so that all that is involved in it must be done at one and the same time by one Act of Parliament.   There are some parts of the plan which can be dealt with separately and later than the rest, including such matters as transfer of responsibility for public assistance from Local Authorities to a national authority.   There are some parts, like children’s allowances, which could, if this appeared desirable, be dealt with in advance of the rest.   In any case the magnitude of the reconstruction involved makes it inevitable that some of it should be taken by stages.    But some parts must be taken together or not at all, and even if reconstruction is by stages it is important that the whole should be dominated by unity of design.   To deal piece-meal with particular defects of the present system, and above all to deal piece-meal with deficiencies in the amount of benefit or compensation now provided, in advance of a general decision on the whole plan, involves the risk, almost amounting to certainty, of a continuance of that anomalous and unjust treatment of like cases by different methods which the plan is designed to remedy. Piece-meal legislation is likely to be less satisfactory and in the end more costly, for less advantage to the community as a whole, than comprehensive unified treatment of the problem of social security.

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