In our first chapter we found ourselves arguing for a Citizen's Income from two different directions: from criteria for an ideal benefits system, and from the problems experienced by our present system. In order to understand the present system we need to see how it evolved in all of its complexity (this chapter) and then focus on previous attempts at radical reform of the tax and benefits structure (Chapter 3). Readers from countries other than the UK might wish to study the histories of their own benefits systems, and particularly the history of any current universal benefits.

A means-tested past and a means-tested future?

In the UK, we have got to where we are now by evolutionary change rather than by radical reform, and by the swing of a pendulum, moving back and forth between universality and selectivity, between providing for everybody and providing for people who fit into particular categories. The pendulum has rarely reached either end of the spectrum. It has more often been near to the selectivity end, but it has taken an occasional lunge towards universality, only to be dragged swiftly back towards the other end.

The 1601 Poor Law set up local administrations to provide for people unable to provide for themselves, and to establish ‘houses of correction’ for able-bodied men who could not find work: suggesting that those physically able to work but not working, for whatever reason, were in need of ‘correction’. By the end of the eighteenth century, unemployment was increasing and wages were not keeping up with living costs. The administration of the Poor Law being local, experiment was inevitable, and in 1795 at Speenhamland the Poor Law Guardians began to subsidise low wages as a means of relieving poverty. Amidst fears that this policy would lead to a general reduction in wages, and a belief that a man who cannot provide for his family loses his dignity, a review was held. The ensuing debate led to the Poor Law Amendment Act 1834, which enshrined the idea of ‘less eligibility’: that is, that the unemployed man or woman should not be paid as much as they would get if they were employed. Before 1834, ‘out relief ‘ had provided food for families that could not afford to feed themselves.