Amid all the process of welfare reform, cutbacks, and austerity measures, we would almost forget that the British welfare state offers its citizens historically almost unprecedented protection against the risks of illness, old age, invalidity and unemployment, among other things. It was Sir William Beveridge who identified the five ‘evil giants’ of the society of his time: want, disease, ignorance, squalor and idleness. The welfare state was the solution he proposed to combat these giants. Since then, his ideas – and those of many other ‘founding fathers’ of the welfare state – have relieved the hardship for many Brits who suffer from unemployment, illness or other social risks. However, in our current time, the solutions that modern welfare states have offered increasingly are considered as part of the problem themselves. Therefore, traditionally, Part One of Social policy review focuses on the state of affairs in each of the pillars of the welfare state. It assesses to what extent the evil giants have been defeated, which new problems and unintended consequences have emerged and how this affects the policies. In this year's edition, we focus on four policy areas: pension policies, health care, income benefits and housing.
In Chapter One, Gordon Clark reassesses the behavioural assumptions underlying pension policies and its recent reforms. To guarantee the sustainability of the British pension system, defined benefit pension systems with a guaranteed benefit at retirement have been replaced by so-called defined contribution systems in which the benefit at retirement depends on external conditions and choices made by citizens themselves. This implies that people are becoming increasingly responsible for their own pensions. This presumes that people are capable of making decisions about their pensions. Clark argues that the behavioural paradigm that has recently became popular in many social-scientific disciplines challenges the ideas of individuals as rational decision makers. Therefore, he argues that it is not surprising that many of those participants tend to make decisions that, when considered over the long term, are not in their best interests. So, according to Clark, in addition to the neo-liberal paradigm that grounds the reforms of the British pension policies, a neo-paternalistic one is needed to correct the decision-making pitfalls of individuals.
The NHS is the British answer to the evil giant of ‘disease’.