On 29 November 2017, the Rt Hon Alan Milburn delivered Beveridge Lecture at the Royal Statistical Society, which this year commemorates the 75th anniversary of William Beveridge's famous report. With a lecture titled 'Slaying the "Five giants: Past, present and future"', the former government Health Secretary and current chair of the Social Mobility Commission proposed 'five giant reforms' relevant to today's challenges.
Sir William Beveridge was RSS president when he publishing his landmark report Social Insurance and Allied Services, released on 1 December 1942. Alan praised the Report’s radicalism, which successfully tackled Beveridge’s famous ‘five giants’ - ‘want’, ‘disease’, ‘ignorance’, ‘squalor’ and ‘idleness’ - and laid the foundations for the National Health Service and post-war welfare state.
Alan argued that an equally radical approach is now needed to tackle challenges that Beveridge could never have foreseen, address injustices which have since arisen and promote social mobility - which, for too many people, has now stalled. 'Over recent years, it has become increasingly obvious that ours is a country where all too often demography defines destiny,' he said. 'Poor schools ease people into poor jobs. Disadvantage and advantage cascade down the generations. Over decades, we have become a wealthier society but we have struggled to become a fairer one … Whole sections of society feel they are not getting a fair chance to succeed.'
Such a situation is disturbing, Alan said. 'The history of our continent tells us that when the majority feel they are losing unfairly, while a majority gain unfairly, things can turn ugly … The public mood is sour and decision-makers have been far too slow to recognise that untrammelled wealth for a few at the top, growing insecurity for many in the middle, and stalled life chances for those at the bottom is no longer a viable social proposition for Britain.'
He proposed that social mobility represents part of the answer. 'At a time when more and more people feel like they are losing out, social mobility can be a rallying point to prove that modern capitalist economies like our own are capable of creating better, fairer and more inclusive societies. It is the best antidote to the growth of political populism, both of Right and Left, that we are witnessing across the world. In my view, it’s the defining issue of our age.'
Like Beveridge, 75 years ago, Alan argued that 'five giant reforms' are needed. He listed them as follows:
1. Employment policy
First, in labour market policy, ministers should address the growing problem of poverty among people in work, who have increasingly been 'victims of Britain’s endemic low pay trap' since the 'decoupling of economic growth from wage growth, at the bottom end of the labour market especially.' Alan continued: 'A transparent concordat between State and business is long overdue where government is clear with employers what their social obligations will be and how it will help … Such a concordat could nudge all large businesses to create better internal career ladders so more workers get the chance of more progression and higher pay. Getting people off welfare into work must continue but there should be a new and equal priority given to moving people from low pay to living pay.'
2. Education policy
Secondly, fresh emphasis should be given to both vocational education and improving educational outcomes among children from poorer families and poorer parts of Britain. 'The income gap is larger than either the ethnicity gap or the gender gap in schools,' Alan noted. 'It is time to put the ending of that profound unfairness at the heart of our country’seducation policy. The government should set clear objectives for doing so and it should commit to a redistribution of education resources to those areas that need them most.' This should include Ministers finding 'new ways of giving the best teachers better incentives, including higher pay, to teach in the worst schools.' Social mobility and educational attainment could also be improved by Britain developing a greatly improved 'vocational education and training programme offer for low-paid workers with low or no qualifications who want a second chance later in life.'
3. Regional policy
Third, Alan argued that 'a fundamental rethink is needed in regional and spatial policy' to tackle the growing assumption that people 'who want to get on have to move out” from economically weaker areas. The issue isn’t simply a North/South one as 'towns like Great Yarmouth and Minehead have as poor prospects as Blackpool or Mansfield.' He continued: 'A less divided Britain will require a more redistributive approach to spreading education and employment prospects across our country. That will mean rebalancing public spending so that more of the transport and education budgets are targeted at the towns and counties of left-behind Britain. It will also entail the Government working with large employers and devolving more power to local councils, to bring new high-quality job opportunities - backed by financial incentives - to the country’s social mobility coldspots.'
4. Housing policy
New housing policies are needed to address market failures, increase house-building and address falling levels of owner occupation - 'one of the foundations for higher levels of social mobility.' Tax incentives should also be devised to ensure that, in the private rented sector, 'more affordable longer tenancies become the norm' as too many tenants are 'moving frequently - so destabilising schooling and family life.'
5. Health and social care policy
Fifth, policy-makers should rise to the challenges posed by fundamental 'changes both in disease and demography' - including rates of diabetes, arthritis and dementia. Part of the solution lies in ensuring that those with chronic diseases are 'offered their own State-funded budgets so they can buy the care that is right for them and personalised to their needs.' Such an approach should lead to higher satisfaction but lower spending. But new technology’s potential is also enormous and needs to be exploited. Alan explained: 'The world is on the verge of a huge leap forward in how healthcare is delivered. Mobile phones will routinely be used to monitor the health of patients with chronic disease. People will have virtual consultations with their doctors and nurses. This is not a fantasy future. It is already happening. What is more if the benefits of pharmocogenetics can be realised, the next few decades could see our whole model of health care moving from one that has been about detecting and then treating illness to one that instead predicts and prevents ill-health.'
Turning to social care, Alan concluded that the current system for meeting the costs of old age is unsustainable. A fresh start is needed and, in view of the political risks involved, it should involve the government and opposition aligning around some core elements of a new system. He outlined the principles that it might be based on:
- That the State has an obligation to ensure that no pensioner should live in poverty.
- That some of the current spending on old age benefits for better-off pensioners is switched to old age care for poorer ones.
- That the State should invest more in elderly care, but so too must the individual.
- That new mechanisms to release the equity tied up in people’s houses are key to making individual contributions more affordable.
These are the foundations for reform, Alan said. 'They will take time to build. And courage to implement. But they are the means of making Beveridge’s contributory principle relevant to the modern age.'
Taken together, these giant reforms have a 'common core purpose: to provide security in a world which feels increasingly insecure.' They are also linked by a belief in the need to redistribute income, opportunity and power - plus a conviction about the need for a new partnership between the State, the citizen and the market.
Alan concluded that the radical spirit of the Beveridge Report should be rekindled. 'In a world today where the challenges feel big but modern politics all too often acts small, the time has come for politicians to rediscover a sense of purpose and of possibility,' he said. 'For all its faults, his [Beveridge’s] Welfare State made our country more kind and more fair. This job of this generation of policy-makers is to reinvent it for the new century in which we live.'
The 2017 Beveridge Lecture was co-hosted with the Nuffield Foundation. An edited version of the lecture is published on the New Statesman website, and the lecture will be available to watch in full on our YouTube channel shortly.