Welfare: from security to responsibility?

Few UK citizens live without relying on the welfare state at some point. For most of us, our health, our education and our financial security in times of unemployment, infirmity and old age depends on state-provided welfare arrangements. But what the state can and should do to maintain and improve the security of its citizens has been fundamentally challenged. Alongside changes in families and in work, these challenges have been a key source of uncertainty and insecurity at the end of the twentieth century. The costs and the principle of the state‘s provision of social security have been questioned. In particular, the power of the state, and its potential for ordering people’s lives, both as tax-payers and as recipients of welfare, has come under scrutiny. Major changes have already occurred and more are promised. The second transformation of welfare provision in the last 50 years is under way. The first transformation was the period of radical reform after the Second World War, which brought together the institutions of the modern welfare state. Such transformations have profound effects on people’s lives, their incomes, their security and even their longevity, as some of the changes in the values of old age pensions, shown in Box 4.1, illustrate. Box 4.1 Changes in the value of state pensions The 1930s

In the 1930s, a third of pensioners lived below the poverty line (Rowntree, cited in Beveridge, 1942, para 235). A pension of 10/- (50p) per week for a single person was inadequate to meet the following outgoings: Table 4.1 Requirements for retired persons at 1938 prices https://www.niso.org/standards/z39-96/ns/oasis-exchange/table">

Requirements For Retired Persons At 1938 Prices

Man and Wife

Man

Woman

Food … … … …

11/6

6/−

5/6

Clothing … … … … …

2/8

1/4

1/4

Fuel, Light and Sundries … …

5/−

3/−

3/−

Margin … … … … …

2/−

1/6

1/6

Rent … … … … …

8/6

6/−

6/−

29/8

17/10

17/4

Source: Bevendge, 1942

In addition, benefits regulations meant that families entitled to unemployment and other benefits could not afford to maintain elderly relatives at home, since the value of their pension was deducted from benefit entitlements. As a result, many pensioners lived permanently in lodgings in wretched conditions on subsistence diets. George Orwell’s (1937) account of pensioners’ lodgings in The Road to Wigan Pier describes landlords taking out private life assurance on sick pensioners as a means of making money from their deaths.

The ‘golden age' of state welfare

By 1948, the value of state pensions had leapt by 160 per cent to 26/- (£1.30) for a single person. At the peak of its value, in 1978, the £31.70 pension for a married couple was the equivalent of 39 per cent of average male earnings (DSS, 1997). Figure 4.1 State welfare for all https://s3-euw1-ap-pe-df-pch-content-public-p.s3.eu-west-1.amazonaws.com/9780203392188/fb16edb4-b861-43fd-8fd4-c2fe7f6b0b0d/content/fig00023_C.jpg" xmlns:xlink="https://www.w3.org/1999/xlink"/> Source: Picture Post, 1947

The twenty-first century?

In 1979 the basic state pension was worth 23 per cent of male average earnings. In 2002 it was only 16 per cent of male average earnings (National Pensioners Convention, 2002; Department of Work and Pensions, 2002). The charity Help the Aged calculated that to pay for the basic requirements – a healthy diet, adequate heating (thousands of old people die each winter from cold related illnesses) and transport – a single pensioner requires an income of between £99 and £120 a week. However, a basic state pension is £75.50 per week (Help the Aged, 2002). While the government is pledged to raise this by a minimum of £100 a year this would only mean a weekly increase of £1.92 for a single pensioner. At the same time, however, there has also been an increase in the number of well-off pensioners that is also indicative of the more diverse lives at the beginning of the twenty-first century. With an increasingly ageing population (16 million by 2040, Office for National Statistics, 2002) the longer-term policy aim, reflecting the current shifting patterns of welfare provision, is to raise the proportion of retired people with a private pension from 40 per cent to 60 per cent Figure 4.2 https://s3-euw1-ap-pe-df-pch-content-public-p.s3.eu-west-1.amazonaws.com/9780203392188/fb16edb4-b861-43fd-8fd4-c2fe7f6b0b0d/content/fig00024_C.jpg" xmlns:xlink="https://www.w3.org/1999/xlink"/> Source: Help the Aged