A prize worth fighting for

Exactly 70 years ago, William Beveridge published the white paper that would revolutionise Britain. The story of the report is one of high principles. Principles that are simple and strong remain to this day. Principles inspired by old British values like ambition and compassion, dignity and duty. And crucially for us in the Labour movement, the pride and the possibilities of work.

Legend has it that the great man did not get off to an auspicious start. Desperate to organise manpower on the home front, it is said that Beveridge burst into tears when told he was instead to lead an inquiry into the small matter of social insurance.

It didn’t take Beveridge long to rebound. In the first nine months of 1942, he took evidence from 127 individuals, pressure-groups and lobbyists. In July, he unveiled his five giants. By summer, he had struck a ‘deal’ with Keynes on the money. Finally as the winter drew in on 1 December 1942, the BBC began broadcasting from dawn, details of the plan in 22 different languages. The report leapt off the shelves: it became the most popular government white paper until the Profumo scandal. Sex and spying versus social security was never going to be a fair contest.

By the end of 1944, a white paper and then a bill and then a Ministry of National Insurance were produced and crucially Ernie Bevin, Herbert Morrison and Clement Attlee had perfected the alchemy that would turn theory into reality: marrying social security with the new goal of full employment that would pay for it.

So Labour’s 1945 manifesto declared a policy of ‘jobs for all’ and ‘social insurance against the rainy day’. “There is no good reason why Britain should not afford such programmes but she will need full employment and the highest possible industrial efficiency in order to do so.”[1].

Finally on the afternoon of 6 February 1946, the minister of national insurance, Jim Griffiths got to his feet to move the national insurance bill be read a second time. After years of preparation, a nation battered by war passed the Beveridge report into law.

The lesson of history is clear: even in the toughest times our country can afford to put ambition into action when we act to put people into jobs.

The challenge now for Labour is not to abandon the principles of Beveridge and Bevin; it is to renew them for new times, against a Tory Party that has learned nothing from their history.

We believed then what we believe today, that the bedrock of social security is full employment. We believe that an equal society demands an equal measure of dignity for all. And we believe that responsibility is expected and should have its reward.

Full employment, universalism, and contribution. For us these words are not a slogan. They’re an expression of decency.

The Tories have never believed, or fought for the idea of full employment. They basically believe that you’re on your own. They can’t even be bothered to make their work programme work, and it shows. The latest figures reveal monthly referrals to the flagship welfare-to-work scheme has halved at a time when long-term unemployment is still rising. Their cuts to councils are deepest where jobs are fewest. Their plan to cut too far and too fast has throttled the recovery.

The result is unemployment that is higher than in May 2010, with long-term unemployment and long-term youth unemployment still rising. All of this means that the welfare bill is rising through the roof: £24bn higher than forecast. We were promised a revolution but the work programme doesn’t work and universal credit is becoming universal chaos.

This unchecked and uncontrolled cost of failure now drives the Tories to short-change Britain’s strivers. Rewards for work are being decimated. Tax credits are being cut so hard that thousands would actually be £728 better off on benefits than in a job. Cuts to childcare are forcing women out of work. And for millions of families universal credit will make things worse; a couple with kids working full time could lose £1,200 a year.

The result is stark. Today British workers are producing more and earning less. For the first time we are set to become a country where social mobility goes into reverse.

Under this government the contributory benefits attacked by Macmillan and Thatcher are set to become nothing more than a rounding error. Excluding pensions they will total just 4 per cent by 2016-17. It is now five minutes to midnight for Beveridge.

Our job in the Labour party is to turn this tide. But let’s be honest, the politics of this are tough. Support for the welfare state isn’t rising, it’s falling.

I think there is a simple explanation. Britain has changed since Beveridge. Think about the world of work today.

Work has changed fundamentally. The idea of having a job for life is a distant memory and more than 40 per cent of people now work part-time, in temporary jobs, or are self-employed. There are more women in work now than ever before and our society is ageing. Prices are rising and living standards for ordinary families are being squeezed – in just the last four years, low to middle incomes have fallen by 7 per cent.

These changes mean that working people need new things to help them get on in life. They pay in, but feel they get little out. People feel short-changed. They want a better deal.

Once upon a time, social security was all about ‘minimising disruption to earnings’. Now it must be about something more: maximising potential of earnings.

So our job is to turn ‘short-changed’ Britain back into a ‘something for something’ Britain. Where people see, once more, that the way to get ahead in life is to earn it. Where we restore the rewards for work and, crucially, we help people with the things they need to get ahead in life.

People who have paid in and worked hard for decades rightly wonder why they don’t get more support to retrain. Those who have saved for the future need to know that their pension won’t be eaten away by hidden costs and charges. And parents who want the freedom to work need a childcare system that is fit for the 21^st century.

Our task in the year ahead is to show how playing by the rules, working, caring and saving becomes the key to unlock the new things Britain’s workers need, such as earned entitlements like tax credits, childcare, rewards for savings and a bigger pensions pot.

We will never forget our history. We can only put ambition into action if we put people into jobs. That’s why we believe one nation social security is built on full employment. This is a goal that demands government take responsibility for creating opportunities and individuals have a responsibility to take them.

That’s why we must insist on a simple starting point: a tax on bankers’ bonuses to create a fund for 100,000 jobs for young people: on the proviso that young people have to take those jobs.

I believe we can win on social security. If we get this right, the prize is great. We get a country that works harder, earns more and is more equal. It’s a prize well worth fighting for. It’s a prize of which Bevin and Beveridge would be very proud.