Beveridge’s rival

Beveridge’s rival: Juliet Rhys-Williams and the campaign for tax-benefit integration, 1942-1955

Readers of the Citizen’s Income Trust newsletter are likely to be familiar with Lady Juliet Rhys-Williams (1898-1964), a pioneering campaigner for basic income in mid-twentieth-century Britain whose son Sir Brandon was a founder member of the Basic Income Research Group in 1984. Over the last two years, I have used Rhys-Williams’ private papers (now held at the LSE) and other sources to piece together a history of her campaign, as part of a larger project on the debates over guaranteed income in post-war Britain. I have told the story in detail in a recent article for Contemporary British History *; this is a summary of some of the most interesting findings.

Juliet Rhys-Williams was born in 1898 as Juliette Glyn, younger daughter of the romantic novelist Elinor Glyn. From age 19 she worked as a private secretary in Whitehall, and at 22 she married Sir Rhys Williams, a South Wales lawyer, coalowner, and Coalition Liberal MP, with whom she had four children. During the 1930s Rhys-Williams became a leading figure in the maternity and child welfare movement, and also served alongside her husband on the Bishop of Llandaff’s Committee, which studied ways of alleviating the impact of the depression in South Wales (Nicholl 2004). Rhys-Williams’ political instincts were conservative and imperialist, but her experience of unemployment and malnutrition in the Rhondda pushed her towards a universalist view of welfare, and when she fought the safe Labour seat of Pontypridd as a Liberal National candidate in a February 1938 by-election she emphasized her support for family allowances, cheap milk, and better old age pensions. Later in 1938 she defected to the opposition Liberal Party in protest at the Munich Agreement, and it was here that she worked out her plan for a basic income during the Second World War. Rhys-Williams was particularly attracted to a basic income as a way of removing the stigma of the means test and making it easier for unemployed men to take part-time work.

The idea of a basic income received wide currency among British socialists and radicals between the two world wars, as Walter van Trier (1995) has shown, and Rhys-Williams may well have come across writings by figures such as Mabel and Dennis Milner, James Meade, and G.D.H. Cole. However, Rhys-Williams departed from her predecessors’ approach in two important respects. Firstly, she conceptualized basic income solely as a form of social security provision, paid for out of general taxation, not as a ‘social dividend’ financed by the profits of nationalised industries or a form of macroeconomic stimulus. Secondly, Rhys-Williams canvassed support for the policy not on the radical left but among the Conservative and Liberal establishment. Her scheme for a 20 shilling a week basic income, paid for by a flat-rate 45% income tax, received favourable coverage in The Economist, The Times, and The Observer and was taken up by a Liberal committee chaired by Sir Walter Layton. Rhys-Williams persuaded the Chancellor of the Exchequer, Sir Kingsley Wood, to commission an analysis from Treasury officials, and Eleanor Rathbone of the Family Endowment Society urged ministers to give it sympathetic consideration.

After the Second World War, the idea attracted renewed attention from economists such as Meade, Roy Harrod, and Alan Peacock, who saw a basic income as an alternative to the Attlee government’s collectivist tendencies (such as the continuation of wartime food subsidies) and a means of simplifying the tax system. The Liberal Party formally adopted a partial basic income as party policy in 1950, and the Conservative Research Department took a close look before concluding that it would be expensive and politically counter-productive. Finally, the Royal Commission on the Taxation of Profits and Income (1951-55) took evidence on ‘whether it would be advantageous to link income tax with social security payments and contributions’ – though it ultimately chose to reaffirm the traditional separation between the tax and benefit systems.

The debate over Rhys-Williams’ proposal anticipated many of the themes of later discussions of basic income. For instance, Rhys-Williams and other enthusiasts for basic income emphasized its simplicity and universality, especially in comparison with Beveridge’s social insurance scheme, and highlighted its particular advantages for housewives and carers, the unemployed, and workers in low-wage sectors such as agriculture. Rhys-Williams also tried to get round the free-rider problem by suggesting that the cash allowance could be made conditional on labour market participation – foreshadowing Tony Atkinson’s (1996) concept of a ‘participation income’. Conversely, critics of the idea focussed on the cost of paying subsistence-level allowances to every citizen: for instance, the Treasury official Herbert Brittain argued that it was

highly fantastic that when the total gross payments required, according to Beveridge, to relieve want, sickness, etc. amount to about £700 millions, we should go to the length of paying out £2,280 millions and of having to collect £2,000 millions more in income tax than at present.

Concerns about work incentives also featured prominently, and played into the deep-seated suspicion of the ‘undeserving poor’. As the economist Ralph Hawtrey put it in his evidence to the Royal Commission:

A disadvantage of the cash allowance is that it would be paid to many adults of varying degrees of moral ineligibility: the professional criminals while out of gaol, the tramps, wastrels and spongers, the feckless members of respectable families, who delay settling down to an occupation, have no just claim on public funds.

The Inland Revenue’s reaction to the idea of replacing tax allowances with cash payments was perhaps equally predictable. The Revenue’s chairman, Sir Cornelius Gregg, dismissed Rhys-Williams’ book Something to Look Forward To (1943) as ‘special pleading of a soppy sentimental character with no real principle behind it’ and insisted that it would be wrong ‘to entangle the Income Tax machine in the payment of Social Service benefits’. Crucially, this view was echoed by both the TUC and business leaders in their evidence to the Royal Commission.

Rhys-Williams’ failure to secure the adoption of a basic income can perhaps be attributed to three main factors: context, tactics, and strategy. Firstly, her campaign was hampered by the popularity of the 1942 Beveridge report on Social Insurance and Allied Services and the power of the assumptions on which it was based. As is now well known, Beveridge’s determination to conquer the ‘five giants’ of want, idleness, ignorance, disease, and squalor was counterbalanced by a more traditional concern to contain the cost of welfare and preserve the liberal ethos of independence and responsibility. His preference for contributory insurance and his determination to restrict payments to cases of entitlement or destitution were shared not only by Whitehall officials but also by trade union leaders, who believed the contributory principle was important because it established a ‘right’ to benefit. Support for progressive income tax as a means of achieving ‘equity’ between citizens was almost as widespread. As a result, both Labour and Conservative politicians decided to pursue their social and political objectives within the Beveridge model.

Secondly, Rhys-Williams’ energy and flexibility as a campaigner was ultimately a weakness as well as a strength. She revised her scheme so frequently that its social purpose was blurred, and showed a damaging tendency to treat expressions of interest as firm endorsements of her ideas. The sweeping claims which she made for basic income also invited suspicion: as Hugh Gaitskell (1952) pointed out, the notion that almost everyone would benefit seemed ‘naïve’ and incredible. In an era of professionalization, Rhys-Williams made it too easy for policy-makers to dismiss her as a crank, pushing pet ideas onto the policy agenda through her social and political connections.

Thirdly, these tactical mistakes were compounded by the strategic problem of Rhys-Williams’ political conservatism. The most obvious strategy for achieving a basic income in post-war Britain would have been to forge an alliance with left-wing welfare experts such as Richard Titmuss and Barbara Wootton who were sympathetic to universalist ideas, but Rhys-Williams’ hostility to socialism made this impossible. Her own approach implied a very different distributional coalition, uniting Conservatives, Liberals, women voters, and the low paid against the unionized male breadwinner. This was always an unlikely prospect, and once the Conservative leadership and the Royal Commission had turned the policy down, Rhys-Williams’ strategy disintegrated.

In a longer perspective, however, a more positive assessment is possible. Through her influence on figures such as James Meade and Alan Peacock, Rhys-Williams helped establish a current of interest in tax-benefit integration which has become central to British social policy debate in the post-war period. The tax credit scheme proposed by the Heath government in the early 1970s (which I have also recently examined**) drew heavily on her thinking, and her son Sir Brandon provided a direct link with the Citizen’s Income Trust and the modern campaign for a basic income. Rhys-Williams was in every sense a woman of her time, and her sometimes reactionary politics make her difficult to admire. She might nevertheless be regarded as the grandmother of the British basic income movement.

References

Atkinson, A.B. (1996). ‘The case for a participation income’. Political Quarterly, 67: 67-70.

Nicoll, William (2004). ‘Williams, Dame Juliet Evangeline Rhys (1898-1964)’, in Oxford Dictionary of National Biography. Oxford: Oxford University Press.

Rhys-Williams, Juliet (1943). Something to Look Forward To. London: MacDonald.

van Trier, Walter (1995). Every One A King: An Investigation into the Meaning and Significance of the Debate on Basic Incomes with Special Reference to Three Episodes from the British Inter-War Experience. Leuven: Katholieke Universiteit Leuven.

* Peter Sloman, ‘Beveridge’s rival: Juliet Rhys Williams and the campaign for basic income, 1942-55’, Contemporary British History online early view (2015), available online at http://www.tandfonline.com/doi/full/10.1080/13619462.2015.1077443#abstract

** Peter Sloman, ‘“The pragmatist’s solution to poverty”: The Heath government’s Tax Credit Scheme and the politics of social poverty in the 1970s’, Twentieth Century British History online early view (2016), available online at http://tcbh.oxfordjournals.org/content/early/2016/02/02/tcbh.hwv042.abstract

 

Peter Sloman is a lecturer in British Politics in the Politics and International Studies Department at the University of Cambridge

Footnotes

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