"Rare & Refreshing Beveridge!"

Not since the day of Munich had the British press given such play to any single story. War news was all but pushed from the pages of London's war-curtailed dail ies. Many of them devoted half their space to news of the document which, in the midst of war, looked forward to a better post-war world. The Beveridge Report, published last week, was the biggest domestic event for Britons in many years.

Sir William Henry Beveridge's report ran to 200,000 words. Work had begun on it 18 months ago, when the white-haired economist was appointed by the then Minister of Reconstruction, Arthur Green wood, to "survey . . . existing national schemes of social insurance and allied services . . . and to make recommendations." Sir William had written the bulk of his report in longhand. Now it was before the public, and the public was eating it up.

Within five hours of publication it had sold 70,000 copies, by the week's end 90,000.

As had been forecast, the Beveridge Report proposed a comprehensive, compulsory system of social insurance for every man, woman and child in the British Isles, regardless of age, income or class, with premiums to be paid by the individual, his employer and the State (TIME, Dec. 7). But contrary to general pre-publication expectation there was not a revolutionary idea in the whole report. What Sir William proposed, in the words of Britain's steady, influential weekly The Economist, was "a plan for the security of incomes up to a minimum level . . . based upon existing schemes and existing methods."

The Enthusiasts. First reaction of press and public was one of almost unanimous approval. Said the London Times, traditionally first newspaper on the break fast tables of Britain's rulers: "A momentous document which should and must exercise a profound and immediate in fluence on the direction of social change in Britain." Other comments: Telegraph: "The consummation of the revolution begun by Mr. Lloyd George in 1911. . . . Perhaps the one really basic innovation ... is the establishment of a national minimum level of subsistence." Manchester Guardian: "A big and fine thing." Daily Worker: "A courageous attempt ... to alleviate some of the worst evils of present-day society. . . . The main principles . . . will be endorsed by all progressive opinion." The man in the street: "A bit of all right." The Plan. The Beveridge plan foresaw joint contributions by employer and employe of a maximum of 75 6d ($1.50) weekly, of which the employer would pay 33 3d (65-c-), the employe 45 3d, which would be deducted automatically from his wages. Remaining cost would be borne by the Treasury.

In the first year of application (1945) the cost would be distributed as follows: -L-351,000,000 from the Treasury; -L-194,000,000 from insurees; -L-137,000,000 from employers, and -L-15,000,000 from interest. In 1965, when contributions would be paid out at full rates the cost would be borne: -L-519,000,000 from the Treasury; -L-192,000,000 from insurees; -L-132,000,000 from employers, and -L-15,000,000 from interest.

Existing national insurance schemes cost -L-432,000,000 annually and are financed: -L-265,000,000 from the Treasury and specified local taxes; -L-69,000,000 from insured persons; -L-83,000,000 from employers, and -L-15,000,000 from interest. In addition to these payments, Britons are already paying some -L-160,000,000 a year (not including annuities) to private insurance companies.

For the premiums proposed, an average British family of four would get the following benefits:

>$11.20 a week unemployment insurance for an indefinite period (instead of the present $7.60 for 26 weeks).

>$11.20 a week for nonindustrial disability for an indefinite period (instead of $3.60 for 26 weeks).

>$11.20 a week for 13 weeks for industrial disability, two-thirds pay for an indefinite period--up to $15.20 (instead of half pay up to $7 a week plus $1.60 for two children).

>$8 a week for old-age pension (instead of $4).

>$40 marriage benefit for working women (instead of nothing).

>$24 to $80 for funeral expenses (instead of nothing).

Its Advantages. The entire project is based on three important assumptions which Sir William considered beyond the scope of his report. Those are: 1) that unemployment will never rise above 10%; 2) that there will be fullest international cooperation in post-war trade; 3) that 1945 prices (the year the plan would go into effect) will be no more than 25% above the 1938 price level. Failure of any of these assumptions would necessarily cause the collapse of the proposed subsistence level and, therefore, of the plan.

Sir William, said his supporters, had drawn his plan for the future, not for the present or past. For the British Treasury the cost, particularly in the early years, would not be unbearable. (Said the Times: "The magnitude is not of such order as to intimidate any Chancellor of the Exchequer who has faith in the future of Britain.") Sir William himself argued that his plan could be operated far more economically than are present insurance companies, since many items of overhead would be eliminated. Specifically, said he, he was certain that under his compulsory plan funeral benefits (largest single item of British insurance) could be administered for 6d (6-c-) on the pound as compared with present costs of 75 6d ($1.50) under private insurance companies or societies.*

The Opponents. Critics of the Beveridge Report appeared an unimportant minority weighted against the bulk of national sentiment, but their potential strength forecast some stormy sessions in the scheduled post-Christmas debates in Parliament. They centered in the Tory Right, or Tory age as opposed to Tory youth (the latter, with the Liberals and Independents, were quick to back the plan) and the great insurance companies, which would lose much business by Sir William's proposals. But other potential opponents were small employers, who may find it hard to make the grade after paying their share of the contributions; the Labor Party, which sees the biggest part of its thunder stolen; trade unions, which subconsciously resented Beveridge since overall insurance would reduce members' reliance on the trade unions' benefits. Opposition was also expected from some sections of the medical profession ("the tightest trades union in the world"), which would fight nationalization of their services.

But the critics were acutely aware of the common man's baleful eye. Typical expression of opinion by Sir Joseph Burns, General Manager of Prudential Assurance Co.: "For my part I propose to spend a very long time over the report."

The Drawbacks? If there was an argument to be made against Sir William's case, it had little to do with the screams of the special interests whose toes were stepped on and nothing at all to do with the better distribution of wealth, which ought to improve Britain's economic strength. The most fundamental opposition arguments:

Britain--as virtually all economists agree--has to maintain a thriving foreign trade. Ever since World War I, Britain with her high taxes has been moving in the direction of a high-cost economy, which makes it harder & harder for her to sell goods overseas. Before World War II Britain's exports (including her income from shipping) had already fallen behind her imports and her income from foreign investments. She was living on her capital (the sale of gold, and securities).

If the Beveridge plan carries Britain farther along the road to high-cost economy by adding a larger (30%) fixed charge on British taxpayers and British business, this straw might be heavy enough to break the camel's sagging back.

And if the Beveridge plan weighs Britain down so that she cannot maintain her trade, her people will face want, social security or no. They might avoid it if the U.S. continued Lend-Lease aid, thereby in effect assuming the cost of the plan. Or they might avoid it by export subsidies, barter agreements and other devices such as Germany used before the war--thereby colliding head on with U.S. policy, which has been steadily heading toward freer world markets.

In that event, Sir William's assumptions --that Britain's unemployment will never rise above 10% and that there will be the fullest international cooperation in post-war trade--may, one or both, prove to be entirely unfounded.

The Creator of the Beveridge plan was last week the object of vast adulation. He had become the little man's hero in Britain. At a crowded press conference he flatly rebutted pre-publication charges that his plan would take Britain "halfway to Moscow." Said he: "It is entirely British. Even insurance schemes take on something of the national character--like types of houses and standards of female beauty."

Sir William Beveridge is slim, with longish white hair combed over a domed forehead. His eyes are china blue, his face pink, with deep humor incisions on either side of his wry mouth. Britons know him as an idealist who has never belonged to a political party in his life. He believes firmly in State planning, for which, says he, suitable political machinery should be provided.

His home is the largish, comfortable, book-filled Master's House at University College, Oxford, but he spends much time in his cell-like London Government office, living in a basement Reform Club where, since the blitz bombed him out, he sleeps comfortably in a passage.

Sir William comes from a long-lived family (his father died at 92, his mother at 87) and has his last years carefully planned out. After retiring at 70 (he is now 63) he looks forward to ten more active years to develop his firm belief that, given time for research, he can foretell the weather through statistical periodicity--a theory with which meteorologists disagree. His last years, between 80 and 100, he intends to spend facing a large wall on which he will have drawn a chart of his weather predictions. When his forecasts go wrong, he will commit suicide.

Said he last week: ". . . The object of Government in peace and war is not the glory of rulers or of races but the happiness of the common man."

*One of the most devastating sections in the Beveridge Report was Appendix D, "The Problem of Industrial Assurance," wherein Sir William exposed the costliness of industrial life insurance. In 1939 there were 103,000,000 industrial policies in force, or nearly three per head of the population. Premiums received were over -L-70,000,000 ($280,000,000), of which expenses and management took up -L-24,000,000 while shareholders' dividends amounted to -L-1,750,000 ($7,000,000). The handling of these vast businesses is done by 65,000 agents, many of them "penny-a-week men" touting and receiving small payments throughout the country. In 1938 men & women receiving unemployment relief were paying -L-1,750,000 ($7,000,000) yearly as premiums on life, death and endowment policies. In each of the last three years before the war about 10,000,000 policies were issued, of which about 6,750,000 ended prematurely each year. More than half were forfeited completely.

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