I pointed out only the other day that one of the problems with inveterate modernisers is that they frequently lack any real sense of history.

Today I come across an interesting illustration of this particular point in the form of this post from Lee Gregory on the subject of pension reform.

The problems with pensions started at the end of the Second World War. Beveridge had just presented his report demanding the slaying of 5 giants (Want, disease, squalor, idleness and ignorance) and apart of these proposals was the establishment of a savings system which would put money aside for the future when one retired. Notice the one important aspect here: a savings system which would put money aside for the future! The plan was for money to be put aside by workers for when they retire. But the politicians did not do this. Instead they presented in their manifestos the establishment for pensions for all. This is not what Beveridge wanted. For Beveridge those who worked should have the pensions when they retire, those who retired could not have pensions because they had not saved money as there was no system to.

But why make this promise? In one of the most opportunistic ideas in the history of politics, the promise of pensions for all was made to get votes. The elderly are a big voting group and after the war they were targeted to win an election and pensions were the way to do it. This means that the pensions system has been based on pay now for the current retired citizens. Now we have an aging population where people are living longer, retire at the same age but adds together to lead to a decrease in the working population. The decrease in the working population means less people to pay into the pensions system, and therefore smaller pensions, unless you increase tax, but this does not solve the problem as people will continue to live longer but retire at 65; thus the work force paying into the pensions system decreases.

What? Sorry to have to ask this, but have you actually read Beveridge? I mean properly as in the actual report itself and not some third-party analysis of it.

The Beveridge report categorically does not state that ‘ those who retired could not have pensions because they had not saved money as there was no system to’ – what it actually says on pensions is:

“…in the introduction of adequate contributory pensions there must be a period of transition during which those who have not qualified for pension by contribution but are in need have their needs met by assistance pensions. National assistance is an essential subsidiary method in the whole Plan for Social Security , and the work of the Assistance Board shows that assistance subject to means test can be administered with sympathetic justice and discretion taking full account of individual circumstances. But the scope of assistance will be narrowed from the beginning and will diminish throughout the transition period for pensions. The scheme of social insurance is designed of itself when in full operation to guarantee the income needed for subsistence in all normal cases.â€?

Beveridge’s actual proposal was for an initial means tested ‘assistance’ pension for those who had not accrued sufficient/any NI contributions on the introduction of the Welfare State, one which would be phased out over a period of twenty years, after which everyone who had paid into the NI system would receive a pension by right.

In practice this is near identical to Turner’s proposal for compulsory pension contributions – the only missing element in the implementation of Beveridge was that NI contributions weren’t ring-fenced off into the future reserves he proposed should be created.

However, as you’re actually working for a Labour AM and a party member this is all rather by the by. What I really would like to know is just where the hell you got the idea that the pension policy of the Attlee government – as expressed in the 1945 manifesto – was ‘ one of the most opportunistic ideas in the history of politics, the promise of pensions for all was made to get votes’.

Perhaps the Welsh Labour Party would like to inquire just what it is they’re actually teaching students about Labour Party history at Cardiff University as it certainly bears little or no relationship to reality.

Are we now so divorced from our own history that the 1945 manifesto and legacy of the Attlee government has become, in the eyes of younger party members, a matter of simple political expediency? If this kind of thing is getting to be a prevailing view in the Welsh Labour Party then they might as well exhume Nye and have him ceremonially stuffed and mounted on a rotisserie.

Lee, the 1945 manifesto was born of a ideological commitment to social justice through the creation of the welfare state. We, the Labour Party, went to the country on a manifesto we believed in that was based on principles we believed in.

I know this may be a strange concept today but we fought the 1945 election on the basis that we were seeking power in order to implement the manifesto, not that we were writing a manifesto in order to win votes and gain power.

That Britain failed, in the long run, to build up the reserve of NI contributions that Beveridge advocated to pay for the retirement pension has nothing to do at all with making politically expedient promises to win an election. One cannot even hold the Labour government of the day fully responsible for that failure as it held office for only the first six of those twenty years, which were then followed by an unbroken series of Tory governments from 1951 onwards until the Wilson government of 1966.

You’ve forgotten here that World War II almost bankrupted the country – in fact only at the end of this year do we finish paying of debts to the US arising from the ‘Lend Lease’ agreement with Roosevelt that funded the costs of war. The American’s didn’t give us the means to resist the threat of Nazi Germany, they sold them to us on credit.

To understand why the reserves proposed by Beveridge were never accrued you need to examine the fiscal policies of successive governments from 1945-1966. No, Britain didn’t build up reserves as Beveridge recommended – the Attlee government didn’t have the opportunity to do that due to crushing costs of rebuilding Britain after World War II and the post-war austerity. One therefore has to look closely as well at the policies of the Churchill and MacMillan governments to identify where, and why, the failure to build up reserves happened and payment of pensions became a matter of taking money from general taxation rather than from reserves derived from National insurance.

Can I suggest, here, that you need to expand your reading material somewhat; let’s start with the basics and Caroline Benn’s biography of Kier Hardie before taking in biographies of Attlee, Bevan, Bevin and Gaitskill, plus possibly Stafford Cripps, and throw in the early volumes of Tony Benn’s diaries and the Churchill diaries which cover 1951-55 for starters.

That should give you a fair and much more accurate perspective on party history that you appear to possess at the moment.

UPDATE: It’s possibly a little cruel to add this but according to Lee’s personal bio on his blog he’s just completed a degree at Cardiff University and has aspirations of going on to a Masters & Ph.D before becoming a lecturer in Social Policy.

all of which makes his mischaracterisation of Beveridge’s recommendations on Pensions and NI all the more alarming.

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