The ancient associations, whether distinguished by the name of guild, fraternity, mystery, company, or brotherhood, seem to have been no less addicted to feasting and conviviality than the Roman clubs that preceded them or the friendly societies that followed.
They generally assembled once a year for the purpose of acting some interlude or pageant. There is a curious account in the Liber Niger of the anniversary feast of the guild of the Holy Cross at Abingdon, from which Blomefield, in his History of Norfolk, probably took the following account which he has given us of that festival.
He says “the fraternity held their feast yearly, on the third of May, the Invention of the Holy Cross; and then they used to have 12 priests to sing a dirge, for which they had given them four pence a-piece; they had also 12 minstrels, who had 2s 3d, besides their dyet and horse-meat. At one of these feasts they had 6 calves, valued at 2s 2d a-piece; 16 lambs, 12d a-piece; 800 eggs, which cost 5d the hundred; and many marrow-bones, creame, and floure, besides what their servants and others brought in; and pageants, plays, and May-games, to captivate the senses of the zealous beholders, and to allure the people to the greater liberality (for they did not make their feasts without profit; for ‘those that sat at dyner’ paid one rate, and ‘those that stood pay’d another’).
“These guilds also gave annual charity, stipends to poor persons; found beds and entertainment to poor people that were strangers; and had people to keep and lend the said beds, and did other works of charity.”
The recurrent theme which arises in connection with friendly societies is the combination of social and economic activities. It is perhaps best exemplified in the introduction to the first Friendly Societies Act of 1793, in which friendly societies were described in a rather homely fashion as being “societies of good fellowship”, a description which still applies to a very important aspect of their activities today.
Although relatively little survives from the Roman period until the seventeenth century, it is understood that many mediaeval guilds carried out the functions of societies as ancillary to their trade promotion and protection activities. The last recorded guild was in existence in 1628. Many of the ceremonies and customs which characterised the guilds, as well as their basic objectives, were to be found in early friendly societies. Some of the benefits available within the guild were undoubtedly similar to those provided both in earlier periods and subsequently by friendly societies.
Societies Societies of various kinds were clearly an important part of the fabric of life and met many needs, either as part of the activity of a business association, religious duty, or social consciousness. The breadth of benefits granted to subscribers were sometimes quite advanced for their time. The Clerk’s Society founded in 1807 in Newcastle upon-Tyne provided this comprehensive cover.
* Sickness benefit of one guinea per week for the first 52 weeks of incapacity, reducing by a half for the next 26 weeks and, thereafter, to seven shillings for so long as the incapacity continues.
* Unemployment benefit of ten shillings per week for 26 weeks, extendible for a further 26 weeks at the discretion of the Management Committee.
* Total disablement, blindness, or other providential cause, £30 per annum, payable quarterly.
* Loans of up to £25 upon imprisonment for debt.
* £100 upon death, payable as directed in the member’s will, or alternatively, a widow’s pension of £15 per annum.
There was a system of fines for nonattendance of meetings, for disorderly conduct, cursing, swearing, and quarrelling. These were increased further if the impropriety continued after being called to order by the President or other official.
Egalitarian principles were commonly incorporated in the rules of societies in the eighteenth and nineteenth centuries, as illustrated by J.C. Curren in his book of 1809 On Friendly Societies. He cites the introduction of the Rules and Orders of the Honourable Society of Workington which commenced on February, 2, 1792, as an example which establishes clearly the ethos intended for members to adopt and follow.
“When we look upon mankind as being subject to an innumerable train of evils and calamities, resulting either from pain or sickness, or the infirmities of old age, which render them unable to procure even a scanty subsistence, when at the same time they are made capable of the noblest friendship, common prudence induces us so to form ourselves into society, that the insupportable condition of the individual may, by the mutual assistance and support of the whole, become tolerable. It has ever been deemed a mark of the greatest wisdom, for those who live in prosperity, and are able to endure labour, and follow their several callings and professions, to make some kind of provision against the day of adversity; and it is evident that a man by uniting in the bonds of society, will most easily accomplish, and most effectually secure to himself, this important end.”
This simple, eloquent statement is as appropriate today as when it was written two centuries ago. Each person is still subject to the capricious whims of fate and relies upon a continued ability to support himself.
19th Century Legislation Early in the nineteenth century a number of Bills were introduced to “encourage friendly societies”, for, while protecting their members, the societies undertook “the promotion of the happiness of individuals and, at the same time, diminishing the public burthens”.
Initially, at least, political expediency coloured judgment at this time so that Parliament concerned itself more with control of the population and their suspected motives for joining societies, than for the financial stability many actually sought from friendly societies. The Corresponding Societies Act of 1797 is typical of repressive legislation.
It forbade the administering of oaths by societies, a widespread practice at this time and parallels with Freemasonry and secret organisations were drawn. It is doubtful if the Act had the effect desired by its promoters and it fell into disrepute, being essentially political in character, but the emphasis of social legislation gradually changed thereafter.
One notable exception however, concerned the Friendly Society of Agricultural Labourers, established in 1833 in the small Dorset hamlet of Tolpuddle. The members were charged with administering oaths and sentenced to deportation for seven years. The treatment of the members became infamous and the case of the Tolpuddle Martyrs is still cited by socialists as typifying the worst aspects of capitalism and state control in using excessive power against legitimate trades union activity.
Throughout the nineteenth century a huge growth of friendly societies took place. At the beginning of the century there were about 7,000 societies in existence. These were the days of Tom Paine, who was forced into exile for promoting The Rights of Man. By way of reaction and to discover seditious republican plots a number of Parliamentary measures were enacted. Few societies had taken advantage of the opportunity to register under the Friendly Societies Act of 1793. This was primarily due to the suspicion among the labouring classes that the Act was devised as a tool for governing the population as an adjunct to the Combination Acts rather than for philanthropic reasons to improve their lot.
By registering, those with republican tendencies could, it was believed, be readily identified by the authorities. As members of societies they considered themselves vulnerable. Swift action by government agencies could be facilitated by registration. This would help to extinguish any possibility of a duplication of the American or French Revolutions. This prospect, with its attendant horror, was of real concern to politicians of the day.
This then, was the atmosphere at the time. In consequence the early legislation had little effect on the proliferation of welfare benefits for the poor. However, by the end of the nineteenth century there were some 30,000 registered friendly societies catering for the needs of some 4.5 million persons. A further million people were catered for by special societies applying only to their own industry, trade or profession.
This demonstrates the importance of societies when the working population was only about 10 million people, so that more than half of them were actually covered by friendly society membership. It was truly a remarkable success story which owed much to the application of sound actuarial principles creating financial stability and thus, confidence. This was a new phenomenon, as previously only charity or destitution greeted the unfortunate.
Industrial Revolution It is the period of the Industrial Revolution which gave the greatest impetus to the provision of social welfare systems. Before this time most individuals lived in small communities, close knit in character, where the established order of squire and church provided a backcloth of stability largely unchanged since the Middle Ages. Some relief from extreme deprivation was made by the local community who knew all the inhabitants.
With the uprooting of many rural communities and the migration of working people into large towns, where they were largely anonymous, this traditional pattern was disturbed. E.P. Thompson describes the situation in The Making of the English Working Class succinctly.
“Conditions for the ‘huddled masses’ were severe in the extreme and the industrial revolution was accompanied by widespread poverty and insecurity among the wage earning classes. Although Poor Law Acts were certainly in existence, indeed they had originated in Elizabethan times, they were intended to deal only with complete destitution and, as readers of Oliver Twist will remember, they were often administered in a spirit which was anything but humane.
“Although many social reformers and some industrialists made great strides to improve the lot of the working classes in the absence of any form of welfare state, old age pensions, death benefits, sickness
The dreadful conditions which prevailed in industrial areas gave them scope to appeal to the consciences of the well intentioned middle classes; persons with influence. Widespread exploitation, 16 hours working, six days a week being the norm; child labour from six years of age, poor housing, nonexistent recreation and health facilities, and sheer hopelessness, contributed to the urgency of the problems. Mortality was high, understanding of the causes in short supply. Food was provided by employers from company stores and was frequently adulterated, sometimes with fatal consequences.
To counter the worst social effects, friendly societies of all kinds were created. They embraced a wide range of activity: building societies, retail and wholesale co-operatives, savings banks, trade unions, and welfare clubs. From 1910 to 1947, friendly societies administered the state sickness benefit scheme and, at their peak in 1945 also catered for the further needs of 8.75 million private subscribers through over 18,000 branches or societies.
The National Insurance Act 1911 So far as welfare provision is concerned, the most significant change in the relationship between the state and the individual occurred upon the introduction of the National Insurance Act, 1911. It was also to mark the beginning of a new phase in the role of friendly societies.
The Act required compulsory contributions from employees and employers in return for benefits. It was the first piece of legislation which applied insurance principles but without the element of selection, which of necessity, characterised commercial schemes. Previous legislation had merely changed the duties or privileges of citizens. For example, the Workmen’s Compensation Acts of 1897, and 1906, merely imposed a duty of legal liability on employers. By the introduction of the Old Age Pensions Act 1908, persons over the age of 70 became eligible for an Old Age Pension, subject to a means test. This benefit was conferred without contributions having been made.
The 1911 National Insurance Act, therefore, marks a significant and fundamental change in the method of financing universal welfare, made possible only by the long and painful experience by friendly societies. Indeed, the actuarial basis for the scheme was provided from the mortality experience of societies and the task of administering it fell to societies, too.
Voluntary benefits were secured from societies as previously but separate management and resources were made available to administer the state scheme. These functions were authorised by the government and the expenses met. Such sections within existing societies were known as “Approved Societies”. Thus began an extraordinary partnership, set to last until the introduction of the welfare state in 1948.
The contribution made by friendly societies in pioneering this enormous undertaking appears never to have been fully recognised and indeed is almost forgotten today. By 1938, over eight million people were reliant upon societies for the administration of their welfare benefits.
Beveridge The turning point was the Beveridge Report which was published in 1942 with the objective of establishing a basis for the postwar development of “social insurance and allied services”. The desire to remedy the inequalities in society were stimulated by the harshness to which the working population had been subjected in the period between the two world wars.
Unemployment insurance had been greatly extended in 1920, and a contributory pension scheme introduced in 1925. Local authorities accepted responsibility for the impoverished, a function previously undertaken by the Boards of Guardians under the provisions of the Poor Laws. However, during the depression of the late 1920s and throughout the 1930s the National Insurance Fund became inadequate. Benefits, already meagre, were cut and the period of entitlement was also limited.
For those who had exhausted their rights to benefit, further help was available subject to a rigorous and unsympathetic means test. The inhumane application of “the rules” and the resurgence of the Victorian concept of the deserving poor and by implication, an undeserving poor, was to cause much bitterness.
The prime evils identified and addressed by Beveridge were the “giants” of want, disease, ignorance, squalor and idleness. These were to be defeated by a combination of state social insurance assisted by voluntary self help. Unfortunately, the aspect of personal responsibility has been much neglected in the period since the introduction of the welfare system for reasons examined later.
Lord Beveridge went to some lengths in his report, to encourage a partnership in defeating the “giants”, recognising the scale of the difficulties which were much exacerbated by an economy virtually bankrupted and ravaged by war. He stated: “Social security must be achieved by cooperation between the state and the individual. The state should offer security for service and contribution. The state in organising security should not stifle incentive, opportunity, responsibility; in establishing a national minimum, it should leave room and encouragement for voluntary action by each individual to provide more than that minimum for himself and his family.”
Aspects of these principles were later ignored in two vital respects. First, Beveridge had proposed that pensions be introduced over a 20 year phasing in period based on contributions made. The government, however, introduced full entitlement at once and decreed that they should be paid for out of current taxation revenues. Thus “pay as you go” funding was born. Under such arrangements those that are in employment at any period contribute to the pension of those retired. As they themselves retire their pensions are provided by the new generation of workers, and so on. It has proven to be an unwelcome legacy for government and workers alike.
This basis of funding is obviously weaker than one whereby contributions are accumulated until vesting age is attained. Such a pension is fully funded and is financially secure. If the ratio between the retired and employed changes adversely, as now appears likely, the financial burden on the contributors is increased. This creates a measure of insecurity in that this transfer of wealth may incur political, social and economic risks.
Second, when the government sought to implement a new sickness system based on the Beveridge Report, against specific advice and recommendation, no place was found within the framework for the continuation of the work of friendly societies. The administration of the sickness benefit system was removed. In consequence, the sums paid by the government to meet the costs of vetting, distributing and accounting for benefits ceased to be paid.
These payments had spread the costs of administering societies over a much wider total membership than would have been the case without the “Approved” sections. When, therefore, it was proposed in postwar Britain to divorce private and state administration, societies were faced with a serious problem of increasing costs. Overnight a large proportion of their business disappeared together with the income to support more benevolent and costly services. Adaptation was required quickly to replace the income lost and to contain costs to the proportion of premiums which pertained previously.
The Welfare State and its effect on friendly societies Thus the decline in friendly society activity and strength is marked by the advent of the welfare state in 1948. Initially at least, societies maintained their market position, but as time went on, fewer and fewer people saw the need to provide for themselves. State benefits were extended to meet more contingencies, and eventually the relationship between contribution and benefit, and thus the insurance nature of the scheme, was eroded. The criteria for eligibility for benefit became need, not the requisite contributions record. In time, national assistance, free school meals, capital for the replacement of household goods and many other benefits were added to the original benefits available.
It became apparent to many that there was little point in providing for a duplication of entitlement from both a friendly society and the state, this being silly if to do so made claims invalid from the state schemes as these were frequently means tested.
This may be to oversimplify the situation as many social commentators point to evidence of a division in society marked by those with a high degree of security and income, and who make little use of social security; and those who have low incomes, constant insecurity without financial reserves, and who rely heavily upon the social security system. It is widely believed that this division is growing.
From the standpoint of friendly societies their traditional markets have diminished, whatever category of business is considered. Those on low incomes cannot afford to save, neither can they buy much protection from adversity however prudent they may wish to be. Those who are in employment commonly enjoy pensions provisions from an occupational scheme, periods of sick pay, and private medical insurance either, free, or at group discounted rates. Only the growth in the numbers of self employed offer expanding opportunities as they remain exposed to the full rigours of self reliance.
Although the protection of a standard of living may be wholly dependent on continued employment and good health most people do not see the need to make further insurance provision. This is evidenced by the fact that over 85 per cent of the working population have no sickness or disability insurance other than that provided by the state.
As the standard rate of benefit is approximately 17 per cent of national average earnings few can really appreciate the risks to their standard of living. Social security statistics suggest that a middle aged man is six times more likely to be off work sick for a period exceeding six months, than he is to die before normal retirement age.
Clearly, there is an enormous gulf in public perceptions between the reality of the value of the state benefit structure and what it will provide and the standard of living enjoyed by the majority of the population, or there exists an almost total disregard of the risks and consequences of becoming unable to work. Either way, it is a matter which should concern us all. Is this perhaps, as some argue, the most insidious effect of the welfare state?
It is hardly surprising that the introduction of the welfare state in 1948 marks the beginning of a long decline in the numbers of members and of societies. After all, the state took upon itself the provision of most of the services previously afforded by societies leaving them but a minor role of topping up levels of benefit.
The state scheme became subject to continuing pressures to extend the range and level of benefit as new groups of people with particular needs were identified. Pressure groups, aided by politicians, have continued this practice and have been very successful in their campaigns. There is in contrast, no one to speak for the great body of taxpayers.
The result is that most people no longer feel the need to insure themselves as it is commonly assumed that the state will provide whatever is necessary to maintain living standards if they should become ill, unemployed, or if the breadwinner dies.
The concept of social and personal responsibility set out in the preface to the original rules of the Hearts of Oak Benefit Society in 1842, appears alien to many today. “Providence has given to no man an indemnity from affliction, disease and death; it is a duty, therefore, that every man owes to himself and family, to provide against these exigencies and that distress which inevitably attends their visitations.”
Few people could take exception to the principle so ably and succinctly put but, nonetheless, the practice is that it is neither followed nor advocated. The psychological effects of creating a universal welfare programme have yet to be fully appreciated. Governments are beginning to realise the consequences and withdraw some of the entitlements, but in such a way as not to be too politically damaging.
The Pressures on Welfare For example, the liabilities of the state for retirement pensions in the next century have become so onerous as to call for their curtailment. This has been engineered in such a way that persons currently approaching retirement have no significant change to their anticipated benefit levels. It is only the generation of those retiring in the next century that begin to feel the reductions. A campaign to induce people to contract out of the state scheme by cash incentives has also been mounted. In conjunction with the marketing efforts of commercial insurers, a large proportion of those likely to be affected have been encouraged to take advantage of the option and migrated to the private sector.
It remains to be seen whether, as a group, those that contract out will contribute sufficient to pensions provision to make possible annuities which will be adequate to sustain their lifestyles in retirement. It is widely believed that underfunding of personal pensions is commonplace.
Whether the government departments established to administer welfare, have given the standard of service desired or achievable is open to debate. Certainly the population of earlier periods in our history would be astonished at the range of services now available. Whether as much has been done as should, or as efficiently, humanely, or appropriately, is questionable, especially when considered relative to our understanding and increasing ability to pay over previous generations.
It is to the present generation of politicians and social economists that the responsibility must be passed for creating new means of meeting the identified needs of society and for creating an atmosphere in which those needs can be met. The adverse treatment of friendly societies during this century, which has occasioned their decline, ought to be reversed to harness the goodwill which exists among large sections of the community for the common good.
Several generations have grown up under the impression that the state will provide for them in times of adversity. There are two primary contribute sufficient to pensions provision to make possible annuities which will be adequate to sustain their lifestyles in retirement. It is widely believed that underfunding of personal pensions is commonplace.
Whether the government departments established to administer welfare, have given the standard of service desired or achievable is open to debate. Certainly the population of earlier periods in our history would be astonished at the range of services now available. Whether as much has been done as should, or as efficiently, humanely, or appropriately, is questionable, especially when considered relative to our understanding and increasing ability to pay over previous generations.
Meeting Society's Needs It is to the present generation of politicians and social economists that the responsibility must be passed for creating new means of meeting the identified needs of society and for creating an atmosphere in which those needs can be met. The adverse treatment of friendly societies during this century, which has occasioned their decline ought to be reversed to harness the goodwill which exists among large sections of the community for the common good.
Several generations have grown up under the impression that the state will provide for them in times of adversity. There are two primary reasons why this illusion is about to be dispelled. First, the expected future demographic profile of society and, second, the difficulties faced by governments of all persuasions to control effectively social and welfare costs and its administration. As realism displaces undue optimism, it is logical to assume that it will be accompanied by a resurgence of interest in, and support for, friendly societies.
The social experiment of universal benefits and medical attention, unlimited and irrespective of cost, is increasingly under pressure, and in some cases actually being withdrawn. A humane society will demand from the medical profession, politicians and economists an acceptable solution which will reach ordinary people, and which will be both caring and effective. The search to provide this will almost certainly embrace self-help groups of all kinds. Friendly societies are one such option.
This analysis of the essential characteristics which distinguish friendly societies from other forms of organisation, and of the nature of social problems we can anticipate evolving over the next 50 years, should enable the managements of societies to adopt a strategy for the survival and proliferation of this unique form of self-help enterprise. If they can successfully do so, friendly societies can address the deficiencies in the state welfare system and complement it. In order to contribute, societies must appear relevant, purposeful, and efficient. Their managers must seek to develop services and qualities which people need, governments find effective, in terms of cost and benefit, and which improve the lot of our citizens.
