The obligations on the state implied by the system were ignored. Revenue from contributions was expropriated for general expenditure and did not therefore accrue in a fund. Contributors’ entitlement to benefit was squeezed — their retirement pension at one stage was lower than that awarded to non-contributors. Many found their child benefit began to be taxed under the Coalition. Even more seriously, the Coalition’s Lib Dem pensions minister, Steve Webb, abolished the contributory retirement pension. Although the new flat-rate retirement pension is to retain some conditions, including a notoriously short qualifying period of contributions or exemptions, it is not clear that the rights earned by contributors over a lifetime will be fully recognised and protected, nor that higher earners will all be entitled to the additional pension for which they have paid. Indeed, all who have worked, earned and saved over a lifetime will now live in fear of the means-testing which will inevitably follow them into retirement.

Contribution conditions were at the same time eroded for the regime’s favoured groups as politicians gave way to the demands of different “rent groups”, voters who wanted more than the smaller non-contributory assistance sum. Caving in to the pressure began in the late 1940s with the pensioners who had not yet met the 17 years of contributions conditions to qualify for a full pension. Attlee’s government set the precedent. Successive regimes followed, introducing more generous and additional benefits, not tied to conditions.

No responsibility appears to have been shown by those in power to the duty of protecting the system or the rights of those who paid for it. The list of benefits increased in variety and number: from those for incapacity to those in respect of workless households, headed by parents (often lone) with children, to housing benefit. In the last decade a dizzying array of in-work benefits was introduced, designed to overcome the perverse incentives of a system in which people out of work and on the dole could be better off than those in work. The state is paying the price for having used its power in a way Beveridge saw as morally wrong.

So changed has become the language and practice of state morality that Beveridge’s assumption of a household breadwinner and a system to tide people over the temporary downturns of working life has disappeared. New generations of voters seeking that for which they have not paid, supported by campaigning groups and media, have contributed to the change, as the governing classes have moved away from the language of moral responsibility to the shifting ground of “fairness”, the meaning of which depends on the ideology of the speaker. The upshot today is a system with too high a proportion of people living beyond their means, and contributors to the NI system doing less well from the system than those they support, in what Beveridge labelled a “something for nothing” society.

Although the government’s priority is now to cut the deficit, not to change the way Britain pays its keep, its ambitions for the country are certainly more than just to “get by”. If it wants to deal with the problem of benefits, it could go in for a step-by-step reform, along the lines set out by the German economists. Or it could risk regime change, which Schuknecht and his colleagues suggest can sometimes be necessary if reform proves impossible.

A bold Chancellor like George Osborne could — with Duncan Smith to help him — choose regime change and transform the NI system into a personally-owned, independently-managed, fully- funded scheme. Not only would this move be popular with his own party, it would be supported by many trade unionists and has been proposed by Labour’s former welfare reform minister, Frank Field. There is evidence that such regime changes work, from Chile, Singapore and Australia. The funds which have accrued are not only good for pensions, but they can provide the backbone for sovereign wealth funds and investment, and for that elusive growth for which successive British governments strive, as they face the conundrum of paying for the future.