Sunday, April 12, 2020

Peter Sloman's "Transfer State"

Peter Sloman is Senior Lecturer in British Politics at the University of Cambridge and a Fellow of Churchill College. He was a Junior Research Fellow at New College before moving to Cambridge in 2015. His first book, The Liberal Party and the Economy, 1929-1964 (2015) examined how British Liberals engaged with economic thought in the era of John Maynard Keynes and William Beveridge.

Sloman applied the “Page 99 Test” to his latest book, Transfer State: The Idea of a Guaranteed Income and the Politics of Redistribution in Modern Britain, and reported the following:
Page 99 of Transfer State examines the beginnings of the ‘rediscovery of poverty’ in the UK during the late 1950s and early 1960s. In this part of the book, I discuss the growing realization that the ‘welfare state’ established in Britain during the first half of the twentieth century ‘had not managed to eliminate poverty’, even when this was measured by the very limited ‘poverty line’ defined by the means-tested National Assistance scale.

William Beveridge had hoped that the contributory National Insurance system which he devised in Britain during the Second World War would ‘guarantee the income needed for subsistence in all normal cases’, but in fact the number of citizens claiming means-tested National Assistance rose from 842,000 in 1948 to 1.8 million in 1954, ‘largely because insurance benefits did not take account of regional variations in housing costs and had not kept up with inflation’. Survey research by sociologists such as Dorothy Cole and John Utting at Cambridge University and the London School of Economics also highlighted three other ‘major deficiencies in the system’: ‘the incomplete take-up of means-tested benefits, the inadequacy of support for the working poor, and the operation of the “wage-stop”, which restricted Assistance payments for unemployed workers to no more than they would have received in work’.

In itself, the analysis on page 99 of Transfer State does not give a complete picture of the book; indeed, the material discussed here will already be familiar to many historians of British social policy. However, as I go on to say in the next few pages, it helps explain why proposals for a guaranteed minimum income – such as the Negative Income Tax scheme which Milton Friedman popularized in Capitalism and Freedom (1962) – gained wide appeal in Britain during the course of the 1960s. Guaranteed income schemes promised to solve many of the problems caused by contributory National Insurance and means-tested National Assistance by providing an automatic form of income support for all households, using the latest computer technology and drawing on information from the tax system. In many ways, this discussion paralleled the debates which took place during the US War on Poverty, though there were some significant differences in emphasis. Whereas the North American debate over guaranteed income was shaped by concerns about ‘cybernation’ and economic change, British enthusiasts tended to focus more narrowly on the practical issues of poverty relief and administrative simplification.

The 1960s ‘rediscovery of poverty’ is now a long way off, but its legacy continues to shape social policy today. In Britain, as in the USA, conservative complaints about ‘dependency culture’ helped spawn ‘welfare reform’ initiatives during the 1980s and 1990s, but tax credits and other benefits have increasingly become the central tool of anti-poverty efforts in both countries. The integration of the UK’s means-tested working-age benefits into Universal Credit can be seen as a fulfilment of the technocratic goals of the 1960s, though the system has been tied up (until the Covid crisis hit) with a controversial set of job search requirements and benefit sanctions. And, of course, the idea of a Universal Basic Income is now on the political agenda across the western world, as I show in my final chapter. The tangled history of the UK’s ‘transfer state’ thus has powerful lessons for policy-makers as they seek to construct a response to the challenges of automation, precarious work, and inequality.
Learn more about Transfer State at the Oxford University Press website.

--Marshal Zeringue