Breaking the camel's back
Frank Field
One of the eight members of the Supplementary Benefits Commission was reported as saying recently that their 48,000 employees, both clerks and executive officers, were behaving just like trade unionists. This comment was prompted by an overtime ban, which started in Scotland and soon spread to the rest of the country. But what made this industrial action different from most were the demands of the supplementary benefit workers. They were not banning overtime in order to win a pay rise, but as a means of drawing attention to the need for more staff. Both union leaders and rank and file members, had, reached a point where they were unwilling to go on providing a service which so heavily depended on recruiting temporary staff, as well as keeping claimants waiting an inordinate length of time for interviews.
The action of the Civil and Public Services Association was important, then, for two reasons. Firstly, no trade union had ever before organised an industrial act involving civil servants. Secondly, the dispute was about improving the service to the public, and not in furtherance of a wage claim. The union demanded an additional 5,000 members of staff, and the Government had to increase its initial offer of 1,000 to 4,000 established employees before the overtime ban was called off. But, although the poor have been hit by an inadequate employment of staff to deal with their inquiries, was the union right to strike for more staff? Wouldn't a more proper demand be for fewer supplementary benefit employees?
To argue in favour of this line of action we need to go back to the Beveridge proposals, and try to find out why the supplementary benefit system is in such a crisis.
Apart from a few important modifications, the structure of our social security system is that which was proposed in 1942. There are two kinds of benefits, contributory and non-contributory. The contributory scheme was designed to prevent the poverty caused by loss of earnings in old age, sickness or unemployment. The non-contributory side, which was run by the National Assistance Board, was built as a safety net for those unable to draw insurance benefits.
Beveridge's new era where want had been abolished never dawned, for his scheme was not fully implemented. No government has set National Insurance benefits at a high enough level to guarantee an income above the poverty line for those unable to work. Likewise, family allowances were not made generous enough to ensure that the incomes of those who earned a poverty wage were nevertheless brought above the supplementary benefit poverty line.
The failure to implement fully the Beveridge proposals is now apparent. The scheme realised that not everybody would qualify immediately for National Insurance benefits. For these, payments would be made under the National Assistance Scheme, but over time the numbers dependent on means-tested supplements would decline. This has not happened. Although greater numbers have qualified for insurance benefits, many of these recipients are forced to draw a supplement to their insurance benefit because, by itself, it is inadequate to prevent poverty.
Today, therefore, and nearly twenty-five years after the Beveridge proposals were implemented, three times as many people are dependent on supplementary benefits (which replaced National Assistance in 1966) as were on National Assistance in 1948. One in eleven of the population is now dependent, either in part or wholly, o na means-tested supplement from the Supplementary Benefits Commission.
The existence of inadequate insurance benefits, together with low wages, has meant that the poor are unable to meet the growing number of charges for welfare services. And, instead of making sure that families have an adequate income so that they can fully participate in the market — or alternatively provide the services free to everyone — various schemes have been devised to exempt the poor from payment. These schemes have become the responsibility of the Supplementary Benefits Commission and have considerably increased its work load. For example, when National Health Service charges were increased in the mini-budget of October 1970, more poor families were made eligible for free benefits. But these benefits are only free provided the poor are willing to undergo a means test. Something like 340,000 working families are eligible for free welfare foods and milk, and although the Government is unable to give exact figures, there has been a substantial increase in the numbers eligible for free optical and dental care and for free medicines.
The administration of all these schemes, together with an increase of about a million more supplementary benefit recipients over the past couple of years, proved to be the straw which broke the camel's back. To which one might add, some straw!
But fewer recipients of means-tested benefits, rather than more staff to cope with claimants, should be the aim, and is one of the reasons why the Government hopes to introduce a system of tax credits. Such a scheme, which was published recently, will become operative only during the next Parliament. What, then, can be done in the intervening three or four years?
The clerks claim that one reason why they are overworked is the vast increase in unemployed men drawing benefit. But, thanks to one of the additions to Beveridge's scheme, claimants now draw wage-related benefits for the first six months of unemployment. Claimants then have a further six months on flat rate benefit before they exhaust their right to unemployment benefit. During the first six months a family man's 'benefit is invariably above the poverty line. And given that the vast majority of claimants only draw benefit for a short period, one measure the clerks might argue for is an extension of wagerelated benefits for another six months, plus the right to draw flat rate unemployment benefit for two years. This reform would reduce 'at a stroke' the numbers dependent on supplementary benefit.
A second reform would be a substantial increase in old age pensions without a corresponding increase in supplementary benefit rates. With the current rate of inflation, there are few people who doubt the need for this move anyway. It would also result in a very considerable drop in the number of old people forced to draw supplementary benefit, as well as bringing substantial help to the 600,000 or so old people who, although eligible, refuse to draw a supplement to their pension.
The Civil and Public Services Association, who have been led skilfully by their leader Bill Kendall and deputy Peter Thomason, might accept this line of argument, but retort that, a few weeks ago, they saw the most immediate need as one for more staff. With the recruitment of the 4,000 additional 'staff the immediate need is now to reduce the numbers dependent on means-tested benefits.
Frank Field is Director of the Child Poverty Action Group.
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