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Beveridge Principles

When Sir William Beveridge wrote his report on social insurance he identified five giant evils: squalor, ignorance,  want, idleness and disease.

Squalor, disease and want were all inter-linked. Squalor meant circumstances where disease was rife and often untreated. Want was both created by and a sustainer of disease: want was at times a result of worklessness due to ill-health, and meant that that ill-health could not be treated as there was no money to pay for medical care, thus perpetuating the poverty trap.

At the time of Beveridge’s report, Britain fell short of other countries in only one area: medical care. Whilst the rest of social security or insurance was disjointed and inadequate, it still compared favourably with other countries.  Medical care however did not compare well.

Beveridge proposed a new system that would be available to all regardless of class: Medical treatment covering all requirements was to be provided for all citizens, and rehabilitation treatment “for all persons capable of profiting by it.” Every citizen was to have access for “whatever medical treatment he requires, in whatever form he requires it, and to have access to “all necessary medical services, both general and specialist, domiciliary and institutional.” This is the NHS that Beveridge helped to set up: one that was paid for through contributions or taxes, and was fully available to all, ‘free at the point of use.’

He considered it a “logical corollary” that the State would want to reduce the number of people on incapacity benefits by ensuring a comprehensive health service – if the State helps people get better, it doesn’t have to pay them incapacity benefits. If the government did not pay directly for the disease or accident to be treated, then it would pay indirectly through reduced power of production; the individual would pay through loss of ability to work. There was therefore good economic reason for the government to provide a national health service.

There have been hints and suggestions that this may change. Doctors and MPs are mooting the possibility of charging for more services. But this surely goes against the fundamental principle behind the founding of the NHS.

Now I’m not a historian and I don’t know all the reasons or politics behind the start of the NHS. Nor am I an economist, so I don’t know all the capital costs and benefits of leaving someone to be ill versus paying for their treatment, recovery and return to work. But I’m fairly sure that if there were benefits in setting up a national health service then, there are benefits in keeping it now. If someone with the money to pay for treatment chooses not to, that is their choice (albeit with lost productivity for the State). But if someone who cannot afford treatment therefore doesn’t get any, that is a regression to a society not seen for seventy years.

Beveridge said that “restoration of a sick person to health is a duty of the State and the sick person, prior to any other consideration.” He also said “The Government should not feel that by paying doles it can avoid the major responsibility of seeing that … disease [is] reduced to the minimum. The place for direct expenditure and organisation by the State is in … preventing and combating disease.”

The State – this government – should not be considering removing ‘free at the point of use.’ The principle of providing ‘free’ healthcare (i.e., healthcare paid for by tax and/or NI contributions) is right. It is right for the government, who should not be paying incapacity benefits for people instead of paying for their healthcare; it is right for individuals who should not bear alone the cost of misfortune.

If charges are necessary – and I don’t run the NHS budget, so I don’t know – then it needs to be done very carefully. There needs to be complete consideration of the principle of the NHS – that people who can’t afford healthcare should not remain ill or unable to work for that reason. Any ‘core’ set of services needs to be based on this. And as Katherine Murphy[1] said, “we do have to have a grown-up conversation with regard to co-payments and top-ups. But with scandal after scandal in the NHS the public wants us to address those now. Unless care is made better, we cut down on waste and the public sees the NHS putting its house in order I don’t think it is the time for that conversation.”

Whatever is decided regarding charges, the end result should still be that no-one is ill because they are poor, and nor should anyone be poor because they are ill.

However comprehensive an insurance scheme, some, through physical infirmity, can never contribute at all

Beveridge had three principles: “a revolutionary moment in the world’s history is a time for revolutions, not for patching;” tackling Want alone was not enough; and the State should offer security that provides an adequate income without stifling “incentive, opportunity, responsibility.”

To remove Want, social security needed to be at a subsistence level, and it needed to make allowance for children. Beveridge intended that Want should be abolished through re-distribution. “The plan also assumes establishment of comprehensive health and rehabilitation services and maintenance of employment, that is to say avoidance of mass unemployment, as necessary conditions of success in social insurance.”

“Medical treatment covering all requirements will be provided for all citizens by a national health service organised under the health departments and post-medical rehabilitation treatment will be provided for all persons capable of profiting by it.”

“All the principle cash payments – for unemployment, disability and retirement will continue so long as the need lasts, without means test.”

The objection to means-test “springs not so much from a desire to get everything for nothing, as from resentment at a provision which appears to penalise what people have come to regard as the duty and pleasure of thrift, of putting pennies away for a rainy day.” But equally, “payment of a substantial part of the cost of benefit as a contribution irrespective of the means of the contributor is the firm basis of a claim to benefit irrespective of means.”

“Whatever money is required … should come from a Fund to which the recipients have contributed and to which they may be required to make larger contributions if the Fund proves inadequate. The plan adopted since 1930 in regard to prolonged unemployment and sometimes suggested for prolonged disability, that the State should take this burden off insurance in order to keep the contribution down, is wrong in principle. The insured persons should not feel that income for idleness, however caused, can come from a bottomless purse. The Government should not feel that by paying doles it can avoid the major responsibility of seeing that unemployment and disease are reduced to the minimum. The place for direct expenditure and organisation by the State is in maintaining employment of labour and other productive resources of the country and in preventing and combating disease, not in patching an incomplete scheme of insurance.”

“However comprehensive an insurance scheme, some, through physical infirmity, can never contribute at all.”

“The making of insurance benefit without means test unlimited in duration involves of itself that conditions must be imposed at some stage or another as to how men in receipt of benefit shall use their time, so as to fit themselves or to keep themselves fit for service.”

“The term ‘social insurance’ to describe this institution implies both that it is compulsory and that men stand together with their fellows. The term implies a pooling of risks except so far as separation of risks serves a social purpose. There may be reasons of social policy for adjusting premiums to risks, in order to give a stimulus for avoidance of danger, as in the case of industrial accident and disease. There is no longer an admitted claim of the individual citizen to share in national insurance and yet to stand outside it, keeping the advantage of his individual lower risk whether of unemployment or of disease or accident.”

“Social insurance should aim at guaranteeing the minimum income needed for subsistence.”

[1] chief executive of the Patients Association, as quoted in the Guardian, 24th June

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