Letter: 'Golden age' of the friendly societies was a time of hideous suffering

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The Independent Online
Sir: We have become accustomed to the Tory dream of taking us back to the good old days of Victorian Britain, but Keith Joseph's euology on the friendly societies (2 February) left me dumbfounded and indignant. He is impressed that 10 million working people belonged to these societies in 1896, and wonders what went wrong. Why did we end up with a socialistic system and a nanny state when these fine Samuel Smiles bodies were there, founded on the great principle of self-help?

Lord Joseph blames Lloyd George. He might equally well have pointed his finger at Winston Churchill, Lloyd George's co-conspirator in the 1908 government of Asquith. The two of them brought in the double-barrelled National Insurance Acts, which dealt with insurance for health and unemployment. Their model was not, in fact, socialistic - it was Bismarck's Prussia. The Germans invented the welfare state to see off the challenge of socialism.

Friendly societies opposed the scheme until the last minute. They feared that their membership would fall when compulsory state insurance came in. They had opposed all plans for state pensions for the same reason. But they were won round in the end for two reasons.

First, their own actuarial basis was shaky. They chiefly paid members' sickness benefits. Workers were living longer and claiming more benefits, while the birth rate was falling and the new members were not there in the same numbers. When Lloyd George brought in the state pension scheme, in 1908, a few million old folk over 70 had a better chance of staying out of the workhouse. This took a burden off the friendly societies. Second, Lloyd George brought the friendly societies into the national scheme where they became 'approved' societies, and administered health insurance.

If we are to return to the world of the friendly societies, we will not be rediscovering a lost golden age, but a time of hideous suffering. When the opposition to compulsory health insurance was at its height, Lloyd George pointed to the number of women in the workhouse.

This is not to say that our social security system could not be administered in a better way. Most reformers, including Lloyd George and William Beveridge, much preferred the principle whereby people paid contributions which covered their needs, rather than the state doling out money regardless of what had been paid in. That was impossible with the first pension scheme, because the recipients were already over the age of 70 and would have been dead before they got any benefits. Both health and unemployment insurance were supposed to be self-financing, and they were for a time. State support came in bit by bit as the schemes went broke - never as a socialistic measure.

If Lord Joseph really believes that we need a new way of administering social insurance, and that there are lessons for us in history, he should not rely, as he seems to, solely on the work of the Institute of Economic Affairs, which is well- known for its evangelistic approach to free enterprise. There are plenty of good books on the subject. Lord Joseph might find one at his local library, if he still has one.

Yours faithfully,


London, N5

4 February