United Kingdom: Tackling Poverty in a Flexible Labour Market

Abstract

Much of the UK welfare state goes back to the system designed by Beveridge and implemented in the 1940s. In particular, a social insurance system known as National Insurance was set up to provide flatrate benefits for unemployment, sickness and disability, and old age, regardless of means, depending on contributions when in work. This was meant to limit means-testing to social assistance (the specifically anti-poverty element in the cash benefits system) for those not qualified for insurance benefits. However, this proved financially too great a strain on the Exchequer and the means-tested element has grown in importance over the years. At the same time, the focus has shifted to getting non-working people of working age into work rather than have them living indefinitely on insurance or assistance benefits.