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Crossman and social security

Richard Crossman’s relationship with the social security system began in 1956, when the Labour Party’s National Executive Committee (NEC) – to which he had been elected a few years previously – gave him the onerous task of speaking against a conference motion calling for an increase in pension contributions. Crossman was initially prepared for a total and unmitigated defeat on the conference floor, until someone furnished him with a copy of a recent report on the future of the pension system prepared by Professor Richard Titmuss of the London School of Economics. Titmuss proposed a new form of ‘national superannuation’ which was linked to earnings and accumulated contributions, rather than on the payment of a single flat-rate. Crossman noted the clarity of the proposals with his usual humour:

I read that pamphlet. I understood it. I’m not very good usually at economics but I understood it. With a blinding flash I understood national superannuation.1

He thus proposed to conference that they should postpone the motion calling for higher contributions until they had had an opportunity to scrutinise Professor Titmuss’ proposed scheme. Amazingly, Crossman emerged from the conference vote victorious; albeit in a Pyrrhic way, since the NEC of the Labour Party was now committed to further investigation and consideration of the Titmuss proposals. A working group was established – including Crossman and Titmuss himself – and devised a more complete version of the plan which could be brought into effect following a Labour victory in the 1959 election.

The proposals sparked a large-scale debate on pension policy and looked set to be one of the defining issues when the country went to the polls in 1959. The result, however, was disappointing for Crossman; Labour lost to the Conservatives, and the policy was not brought to fruition. In the intervening period, Labour continued to work on its proposals and the Conservative government began implementing its own reforms to the pension scheme. The government system was very similar to Labour’s: a basic state pension with a graduated, additional scheme linked to that individual’s level of national insurance contributions. Although it might not immediately be obvious how these proposals differed from the Labour plan, Crossman nevertheless attacked it on the basis that it did not provide a sufficient return to the taxpayer – or as high a return as the Labour model. As Crossman admitted, ‘both the plans were, of course, unintelligible to the general public. But the public did vaguely get an idea that the politicians were competing in promising to abolish poverty in old age’.2

Naturally, the assertion that retirees would be better served by Labour was challenged by the Conservatives and a war of words erupted between the front benches over the issue. The Conservative minister responsible for pensions, John Boyd-Carpenter, accused Crossman of using ‘schoolboy tactics’ over the issue.3 For his part, Crossman (who, at that point, was not officially a Labour front bench spokesman on the issue) asserted in an article published just before the May 1961 local elections that:

In our treatment of old age pensioners we are the most backward people in Europe, with the exception of Fascist Spain.4

He insisted here, and elsewhere, that the Conservative scheme was a ‘swindle’ (in the sense that the Labour proposals offered a better return for the contributions), and emphasised that under the ‘national superannuation’ system offered by Labour, the plan was for ‘half-pay’ on retirement. (In other words, a worker earning 10s per week could expect 5s per week on retirement.) In an article written for the Daily Mirror on 30 June 1959, Crossman also appealed directly to the public but, perhaps fatally, did not attempt to conceal the cost implications of the plan:

The truth is that the British nation can afford to abolish poverty in old age – on one condition. We must be prepared to pay the increased contributions necessary to finance the scheme.5

The politics of pensions, 1972Crossman’s views on social security and social policy can be illuminated by considering his own understanding of socialism should be. Unlike others in the ‘Keep Left’ Group of the post-war period, Crossman did not regard nationalisation (of key industries) as an integral or indispensable policy in the instigation of socialism. ‘Collectivism’ and ‘nationalisation’, he told his audience at the Buscot Park conference ‘are only means to an ends’.6

That end is some form of material benefit for the majority of the population. For most people, he argued, nationalisation only made sense ‘as part of wider planning for full employment’ (in short, for it to work, its benefits must be material).7 In his contribution to the Buscot Park conference Crossman emphasised this point further. The function of a socialist state in the middle decades of the twentieth-century, he asserted, was to maintain an ‘enforced minimum of civilised life’.8 He rejected entirely the idea – which ‘the Communists used to’ believe – of an ‘enforced maximum’.9 His view is that the state should provide a minimum which acts not only as a safety net to catch anyone who falls on hard times, but also as an incentive: ‘We want people to want more than the minimum and to work for it’.10

Crossman was more than aware of the principal limit to this approach: that it was virtually impossible to obtain any satisfactory agreement on what should constitute the ‘enforced minimum’ and to what standard it should be produced.11 How far, in short, is it possible to maintain the distinction between an incentive and a reward? This way of thinking is evident in Crossman’s plan for national superannuation. It is a plan for ‘value-for-money’ superannuation (as Crossman himself admitted),12 but it is not strictly ‘redistributive’ in any classical Marxian definition of the term (although Crossman did argue that ‘redistribution’ was a prerequisite quality in any state pension scheme).13

The material element to Crossman’s thinking seems unusual for a man who began his life in philosophy and devoted a substantial amount of his time to worrying that British socialism lacked a defining, theoretical basis. Crossman would perhaps retort that the material was important, since only through material improvement and advancement could poverty be alleviated. Indeed, in no other aspect of policy does that ‘materiality’ appear more striking than during Crossman’s time as Secretary of State for Health and Social Security (1968-1970).

The pension plan (which was in many ways ‘Crossman’s brain child’) had been in the 1964 Labour manifesto but had been required to wait; not necessarily because of policy or funding problems, but because those responsible for implementing it had not been granted anywhere near the requisite authority before that point (in 1964, the Minister for Social Security did not even have a cabinet seat). In Crossman’s view, the fault lay with many people and in a variety of factors; chief among them, how the 1964 government prioritised the delivery of its superannuation pledge. Harold Wilson, Crossman alleged, had wanted a ‘Kennedy-style hundred days’ when he first came into office, but wasted it by concentrating on the wrong issues.14 However, the national superannuation plan was also controversial among the very people it was designed to benefit. It seemed to encroach on the territory of private pension schemes which, by then, had become well established; and many workers would undoubtedly have wanted to retain the distinction between the two. Inevitably, this raised both practical and philosophical questions concerning various mechanisms for ‘contracting out’ of the national superannuation model and, more importantly, how far the scheme was truly part of an ‘enforced minimum’.15

The result of this failure to accord pension reform appropriate importance after the Labour victory of 1964 (the first time the party had been in office in thirteen years) was, according to Crossman, ‘a story rich in lessons’.16 It also meant that upon his accession to the Department for Health and Social Security in 1968, Crossman had only two years in which to introduce legislation giving the new national superannuation a legal basis. The Bill that he finally had leave to present fell at the final hurdle; abandoned during the parliamentary ‘wash up’ prior to dissolution for the 1970 election. Wilson and other senior members of the party, perhaps anticipating a Labour victory, perhaps felt that the legislation could wait until after the election, or perhaps they were frightened of its more controversial elements.

It is worth noting that the debate in which Crossman was so instrumental – about how to pay for pensions, and what sort of pension the state should provide – was not resolved (and arguably has still not been satisfactorily resolved). In 1978, four years after Crossman’s death, the Boyd-Carpenter system (which had been in operation since 1961) was replaced by a new ‘SERPS’ (‘State Earnings-Related Pension Scheme’). SERPS was designed to complement the existing ‘basic state pension’, with the payments its contributors received graded, or ‘banded’, according to their respective national insurance contributions. SERPS, which was influenced by Crossman’s treasured ‘national superannuation’, was superseded in 2002 by the ‘S2P’ (‘State Second Pension’) .

Andrew Burchell, August 2012

References:

1. MSS.154/4/PAM/21, The Politics of Pensions: the Eleanor Rathbone Memorial Lecture, by R. H. S. Crossman (Liverpool, 1972) p. 12.

2. Ibid, p. 13.

3. See MSS.154/10/4 (press cuttings), Surrey Comet, 25-02-59.

4. MSS.154/10/9, untitled newspaper.

5. MSS.154/3/S/1/37.

6. MSS.154/3/AU/1/222.

7. MSS.154/3/AU/1/251.

8. MSS.154/3/AU/1/221.

9. MSS.154/3/AU/1/221.

10. MSS.154/3/AU/1/221.

11. MSS.154/3/AU/1/223.

12. MSS.154/10/9.

13. MSS.154/3/S/1/197.

14. MSS.154/4/PAM/21, p. 25.

15. MSS.154/4/PAM/21, pp. 17-19.

16. MSS.154/4/PAM/21, p. 26.

Illustration:

Eleanor Rathbone Memorial Lecture, The politics of pensions, 1972 [MSS.154/4/PAM/21]