Some of Britain's basic experiences and practices are worthy of our reference. For example, it tries to balance the growth of social welfare with the growth of the economy; it tries to balance the supply of social security with the demand; it introduces the mechanism of market competition in the supply of social security; and it lets the enterprises and individuals bear more responsibility in the relationship between the state, the enterprises and the individuals, and so on.
Heavy burden is difficult to bear
In the past 20 years, the United Kingdom to implement the reform of the social security system, there are three reasons:
First, the expansion of social security spending is faster than the growth of the economy. According to statistics, between 1960 and 1975, the GNP growth rate of Britain was 2.6%, while the annual growth of social security expenditure was
5.6%. Here, social security expenditures grew more than one time faster than GNP. The main factors contributing to the expansion of social security expenditures are (1) the aging of the population. Economic development and the establishment of the welfare system have led to an improvement in people's lives
and a longer life expectancy. The average life expectancy for men increased from 58.4 years in the 1930s to 69.8 years in the 1980s, and for women from 62.4 to 76.2 years. The rise in the rate of the elderly population has meant
a decline in the proportion of people of working age. The aging of the population not only causes pension and old-age payments to rise, but also makes it less able to provide income from social security contributions. (2) Dramatic increases in health care payments. Increased health care costs for the elderly
and the use of advanced medical equipment have caused a dramatic increase in health care payments. (3) The existence of a large unemployed workforce.
Secondly, the government cannot afford the heavy financial burden.
Britain's social security payments accounted for 38.6% of total government expenditure in 1953 and 53.5% in 1982. In terms of the sources of financing for social security, between the government, enterprises and individuals, more than half of the burden is borne by the government, which was 52.93% in 1989, a rate that is relatively high in European countries.
Thirdly, the negative effects of the social security system are becoming more prominent. Although the social security system plays an important role in ensuring the minimum living needs of the majority of the people and stabilizing the social situation in the long term, the higher welfare benefits are
easy to create a social concept: "no work or less work can still live", which is easy to make some members of the community to develop the mentality of enjoying the country's bounty, which is highlighted in the following ways This is highlighted by the problems of the "poverty trap" and the "unemployment trap".
The so-called "poverty trap", that is, when personal income increases, the allowances related to the level of personal income available to decline, but the increase in income tax, resulting in nominal income increased, but the real income fell. See Table 1.
The so-called "unemployment trap" refers to the existence of a high replacement rate for some unemployed people, i.e. the ratio of real income at the time of unemployment to real income at the time of employment, so that the unemployed people are unable to get out of poverty and lack incentives to look for work. See Table 2.
Table 2 illustrates that, with real earnings at employment only nearly ￡15 more than at unemployment, the unemployed would lose the incentive to look for work if they did not see the need to work for an additional ￡15.
Changing for the better
In the May 1997 general election in Britain, the Conservative Party, which had been in power for 18 years, finally went out of power, and a Labor government with Tony Blair as prime minister came to power. The revamped Labor Party, with its economic and social policies shifted to the right, essentially
followed the conservative approach. The Labor government focused on building a "new life" for Britain and pushing the British economy toward stable and sustainable growth. On the issue of social security, Labor believed that excessive social welfare was a major obstacle to Britain's development
. To this end, the following initial reforms have been implemented:
First, no increase in income tax to promote social welfare. Changing its previous image of "(raising) taxes and (expanding) spending", the Labor Party kept its election promise and put forward a five-year plan to reduce the deficit in public spending and promote social welfare in the new budget of July 1997, on the premise of not raising the basic and top rates of income tax.
The second is to encourage the "non-working class" to return to society. Britain has a population of 58 million, of which 1 million adults have never worked. The Labor government is trying hard to get this "non-working class" into work. If a private business takes on a new employee, the employer receives a weekly allowance from a government agency.
Thirdly, it has taken positive steps to encourage 250,000 young unemployed people into work and to abolish unemployment benefits. The Government used the Pound520,000 "windfall tax" (levied on the privatized telecommunications, aviation, railroads, water supply and other public **** sectors, which have made huge profits) as a fund to support the employment of young people and lone-parent families.
Fourthly, fiscal discipline should be strengthened to remove fraud. The UK has 79 million social security numbers for a population of 58 million. Some of these are legitimate, such as widows who can live off their dead husbands' pensions and continue to use their numbers, but many are used by fraudsters. In response, the government intends to scrutinize and re-register pensioners and unemployment benefits recipients.
Fifth, it proposes a new way of developing social security. The government's policy focus will no longer be on increasing social allowances, but on increasing social services.
It is worth noting that in April 1998, the Labour government published a green paper on welfare reform, "The New Dynamics of Our Nation: A New Social Contract", which broadly outlined a "new blueprint" for the welfare system in Britain up to the year 2020, which reads:
Firstly, it sets out eight principles for a new welfare system for the next century:
(1) Reinventing the welfare state around the idea of work. The government would focus on helping working-age citizens to maximize their participation in the workforce, and would provide tax breaks or more assistance to working families.
(2) Public-private partnership in welfare. The government should not monopolize the welfare industry, and the public and private sectors should cooperate on welfare to encourage private pension insurance for citizens.
(3) Provision of high-quality public **** services such as education, health care and housing. It is never the duty of the government to do more than just hand out various kinds of allowances.
(4) Support for the disabled. The Committee for the Rights of the Disabled will be established to safeguard the rights of the disabled and to ensure the universality of their living and attendance allowances.
(5) Reducing child poverty. One third of children in the UK live in poor families on low incomes, and over the next five years the government will help one million children and their parents.
(6) Helping the very poor. Tackling "social exclusion" and providing employment and education opportunities.
(7) Removing fraud. Strengthen monitoring and inspection to prevent fraudulent behavior such as fraudulent housing allowance claims.
(8) Shift the government's focus from granting welfare allowances to providing good public **** services to make the modern welfare system flexible, efficient and user-friendly.
Introducing competition to cut costs
Four Conservative governments have been in power for 18 years, starting with Margaret Thatcher's administration in May 1979 and ending with the Mayer government stepping down in May 1997, a long period of 18 years.
In June 1985, the government published a Green Paper on social security reform, which was revised, and in December of the same year, the government presented a White Paper on social security reform. The Conservative Party believed that finding ways to squeeze the growing social security
barrier payments was of far-reaching significance, not only to enable the Government to continue to afford this huge cost not only in the present but also into the 21st century. The Conservatives have taken the following steps:
I. Privatization to expand the market economy element in welfare provision.
The Government has encouraged the privatization of housing by means of preferential sale of public housing and reduction of housing allowances. In addition to this, in the field of health, the establishment of private medical institutions is encouraged and they compete with state hospitals. In the area of old-age insurance, it is hoped that private insurance organizations will play a greater role. But the private sector has its own limitations and cannot provide greater coverage; it can only be a complement to the "welfare state".
The second major reform of the pension system
Pension payments have always been the largest single item of social security in the United Kingdom, and in 1995 they accounted for 38 percent of total public **** expenditure, or 10 percent of GDP in that year.
As stipulated in the National Security Act 1946, any British citizen who has paid National Insurance contributions for at least three years and reaches retirement age (65 for men and 60 for women) can claim a basic state pension. The ratio of pensioners to the population of retirement age jumped from 60 percent in 1951 to 91 percent in 1979. The British Journal of Labor Studies estimates that pensioners will increase
from 9.3 million in 1985 to 10.3 million in 2025, taking into account improved medical conditions and longer life expectancy. The government is implementing major changes in pensions to keep up with the trend of an aging population.
Delaying the retirement age and depressing the basic state pension. The government plans to raise the retirement age for women from 60 to 65, the same as for men, between 2010 and 2020. In addition, the government emphasizes that the basic state pension can only provide a minimum limit for living expenses and cannot be expected to be too high.
Lowering the State Income Pension. The State Income Pension was introduced in April 1978 by the Labor government. The Conservatives stipulated that for men now aged 50 and women aged 45 who had paid and wished to continue to pay an income level payment, they would receive a pension after 20 years at the same level as before, i.e. equal to 25% of their average wage earnings in the 20 years prior to retirement. However, for men under 50 years of age and women under 45
years of age, the standard of payment is reduced to an amount equal to 20% of the average level of wages earned in active work.
Occupational pensions are mandatory for enterprises. The government made it mandatory by law, as of April 1988, for all enterprises to introduce occupational pensions, regardless of whether they previously had them. Employees have the right to take their occupational pensions with them when they change workplaces
The lower limit of the occupational pension is required to cover the devaluation of the currency due to inflation, while the upper limit of the occupational pension is unlimited, and employees are allowed to voluntarily pay more contributions
to increase their occupational pensions. The government has encouraged companies to introduce occupational pensions by allowing a 2% rebate on national insurance contributions paid to the state for the first five years.
Employees are encouraged to obtain personal pensions. The government promotes workers to link up with banks, insurance companies and other organizations to pay a certain amount of fees on a regular basis and get a personal pension when they retire.
Third, adopt the principle of selectivity and introduce market mechanism to reform the medical insurance system.
The British health insurance is the second largest item in the social insurance system after pension insurance. The proportion of national health care payments to GDP in the UK was 4.4% in 1970, rising to
5.9% in 1980, increasing to 6.3% in 1990 and reaching 6.7% in 1992. On the other hand, as a result of restrictions on public ****spending, there has been no corresponding increase in government allocations for national health care, and the medical profession at large has complained of low
treatment, with a nationwide symbolic strike by nurses in 1988.
The Conservative government put forward a white paper on reform of the health care system in 1989, which was implemented in 1991. The aims of the reforms were: on the one hand, to continue to maintain the advantages of the National Health System (NHS) in terms of broad coverage and effective cost control; on the other hand, to improve the efficiency of the NHS and enhance public satisfaction while controlling the payment of the NHS.
The reforms are as follows:
First, the introduction of competition. Emphasizing that citizens have the right to choose their own hospitals, and that each hospital receives health insurance premiums based on the number of patients, the reform forces state hospitals to strive to improve their medical standards and services in order to attract more patients.
The second is to expand the authority of local health authorities. Local health authorities have gone from providing medical services to helping the public select hospitals, signing contracts with hospitals and distributing health care funds allocated by the state.
Thirdly, the vetting of GPs is being strictly enforced and GPs are given financial autonomy. As is customary in the United Kingdom, the initial diagnosis of a sick person is made by a general practitioner, who then determines whether or not to refer the patient to a hospital, depending on his or her condition. The government has stipulated that GPs are allowed to use about 20% of the per capita medical fee transfer income to purchase necessary medical and diagnostic equipment and improve medical conditions. However, general practitioners are heavily scrutinized and are required to have practical experience in treating 7,000
patients (rising to 9,000 by the 1992-93 fiscal year).
Fourth, hospitals must be granted "trustee" status. In order to generate income from healthcare, hospitals must contract with local health authorities, GPs and private providers in order to obtain
Trustee status, which gives them autonomy over the management of discretionary healthcare costs, freedom to employ medical staff and allows them to make a profit of up to 6 per cent of their discretionary healthcare costs. Profits. The "delegatee" pays for the use of capital equipment and is free to retain unplanned surpluses and borrow freely within the financial borrowing limits set by Parliament.
As a result of these reforms, the standard of hospital and GP services has improved, public satisfaction has risen, and total NHS expenditure has been brought under effective control. See Table 3.
The effectiveness of the reform has yet to be tested
From the time Margaret Thatcher came to power, the reform of the social security system by successive British governments has continued for 20 years. A number of points are worth noting:
First, the social security system in the UK has now changed significantly since the Beveridge report.
In 1942 Beveridge, a professor of economics at Oxford University, was commissioned by the government to draw up plans for the introduction of social security in Britain. After the Second World War, the Labour government adopted the Beveridge report as a model and passed a series of bills to establish Britain as a "welfare state".
After 20 years of reform, the British social security system has undergone important changes. First, the "principle of universality" has been weakened and the "principle of selectivity" has been strengthened. In the past, there was a great equality of rights to social benefits regardless of wealth. Nowadays, the Government focuses on helping low-income people who are in work, and reduces benefits for those who are able to work but are not in work. Secondly, in the trade-off between "equality" and "efficiency", the government puts more weight on "efficiency"
and tries to improve "efficiency" while safeguarding basic social needs. The government is trying to improve "efficiency" on the premise of safeguarding basic social needs. Once again, the role of the market economy will be brought into greater play, so that enterprises and individuals will have to bear more obligations in the financing of social security. Finally, the focus of government
management will gradually shift from the granting of social allowances to the provision of quality social services.
Secondly, in terms of the actual situation of the reform, a number of obvious results have been achieved, but there are also problems that cannot be ignored.
The effectiveness of the reform is highlighted by the fact that, through the "open source" (broadening the sources of income for social security) and "cutting back" (reducing social security payments), the development of social welfare in the United Kingdom has been gradually harmonized with the growth of the economy, and the momentum of the excessive growth of welfare has been curbed. The momentum of excessively rapid growth in benefits has been curbed. Social security payments as a share of GDP in the UK grew by 5.6 percentage points in the 10 years from 1970 to 1980, and by only 5.8 percentage points in the 15 years from 1980 to 1995
.
However, there are some non-negligible problems with social security in the UK. For example, the financial crisis of social security will continue to exist in the 21st century as the trend of population aging develops and the payment of social benefits increases
. In addition, the social problems caused by high welfare still exist, and the negative effect of "do or don't do the same thing" has only been weakened, and the rich and the poor are still very much polarized. Although the current Labor government has put forward good new ideas for reform, it is still
lacking concrete measures, and it is yet to be tested whether these measures can work.