Pension provision has a profound impact on work incentives, as well as on the propensity to save. In taking an overall view, this book has important lessons for today's debate, provided that the reader is willing to push through the ideological framework which John Macnicol seeks to impose on the story he seeks to tell.
His book kicks off with an introduction which hardly links to the rest of the volume, the structure of which the author tries to fit into the neat little boxes of class and gender. Fortunately, the story to be told is so good that it keeps breaking out from the limited confines the author is intent to place upon it.
Here is one example of the slant in much of Macnicol's text. On too many occasions, we learn that the wicked Tories would only countenance welfare reform provided it was financed on a basis of national insurance. The working class, in other words, would pay for its own reforms. There is no hint that there could be other, more substantial, reasons for such an approach. Paying directly for benefits may affect the behaviour of the recipient, for example.
A further difficulty with this approach comes when the author moves away from the interwar years, dominated by the Tories, and on to the programme of postwar reconstruction. Clement Attlee accepted the insurance principle not because he was a crypto Tory - nothing could be farther from the truth. He did so because he believed that a welfare system which people believed they owned was one which might not only survive longer, but would play its own part in building a new socialist commonwealth.
It is true that Lord Beveridge drove the insurance principle into a financial cul-de-sac by insisting on flat-rate contributions for flat-rate benefits. But both Beveridge and Attlee mitigated the regressive nature of this national insurance poll tax by aiming to put the taxpayer's contribution at two-thirds of the welfare bill. An analysis of this Exchequer contribution, adding a progressive element to a system which allowed practically every worker to be a full member of the insurance scheme, does not feature in this volume.
Where the book is good is in the section dealing with the reform of the Poor Law, and the advent of old age pensions. And it is exceptionally good in the chapter dealing with the interwar studies of poverty.
Better than any other study I have read, Macnicol shows how the reform of the Poor Law at the turn of the century was not simply about easing the lot of the aged poor, whose only offence was that they no longer had the strength to drag themselves to work should any employer want them. Help for the aged opened up the opportunity for a tougher regime for those of working age, and this too was a goal for most reformers who advocated the introduction of state pensions.
Macnicol excels, adding much to public knowledge, and hopefully to the political debate, in his analysis of what was read from the interwar poverty studies. He shows how the aged poor were very largely written out of these studies by those who wrote up the surveys, despite what the raw data indicated.
I had long been aware of how Rowntree's arbitrary "poverty line" had underestimated the costs of women and children, as compared to the adult male. I had not appreciated how a similar exercise operated against the elderly. Nor did I understand how a whole stream of survey findings were, in effect, doctored so as to emphasise the poverty of the working family.
This part of the book will pay handsome dividends once Parliament begins to debate the Government's proposals for long-term pension reform. No government has been able to contemplate reforms benefiting pensioners in 40 years time without making, thankfully, major concessions to today's pensioners. John Macnicol's book will provide much help to those wishing to keep the Government on course.
The reviewer is MP for Birkenhead and was until recently minister with responsibility for welfare reform
Frank FieldReuse content