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By December 1951 These Figures Had Risen To 1 Million And 1.46 Million ...

By December 1951 these figures had risen to 1 million and 1.46 million respectively.(2)
Whilst Deacon had focussed upon the issue of means tests as the main deviation from Beveridge, Michael Hill has cited three areas of difference, whilst still suggesting that Beveridge's recommendations were adopted almost in their entirety.(3)
The three significant differences identified by Hill were, firstly, the rejection of Beveridge's proposal that the retirement pension should be brought in gradually over a twenty year period. Instead, people were allowed to qualify much more quickly, even if contributions had not been made. The consequence of this was to reduce the level of benefit, bringing it closer to the subsistence level than envisaged within the plan. Secondly, there was a rejection of Beveridge's suggestion that unemployment benefit should continue for as long as individuals were prepared to accept any kind of work or training. Instead the maximum period of unemployment benefit was one year. Thirdly, there was the rejection of the idea that one agency should run the whole scheme. Instead a National Assistance Board set up to run the safety net assistance scheme. The question is why did the government deviate from the Beveridge plan in the way that it did? The answer I believe lies in a combination of economic factors and political expediency.
Let us begin by looking at the issue of pensions. An assessment of the Beveridge plan and its implementation in relation to pensions has been carried out by Dr Hugh Pemberton in his study if the current pension crises. He has taken a very clear position regarding background and motivations for decisions taken:
In 1942, Beveridge proposed a system of national insurance in which a worker's contributions would over time build up to provide a pension on retirement. In truth, Beveridge's scheme was never fully funded, though this was not clear to ordinary citizens at the time. But it was made less so by Labour's decision to drop Beveridge's twenty year transition period to full pension rights (the golden staircase) when it implemented the Beveridge plan in 1946. For those overseeing implementation, the long delay envisaged by Beveridge to allow contributions to build up was simply no practical politics in the context of sacrifices made by workers during the depression and the Second World War. Instead, full pensions were paid immediately to those insured since 1925, and after only ten years to those who had joined later. But abolishing the golden staircase severely weakened the finances of the scheme. This in turn meant that the Treasury ruled out plans to pay subsistence pension. And it essentially meant that the scheme became Pay-as-you-go.(4)
I find it difficult to draw any other conclusions than to agree with Pemberton. There could be no rational economic argument for the position taken by the government.


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