The Second Vatican Council of the early 1960s, which renewed the working of the Catholic Church, calls upon people to work together for the 'common good'.
Russell Sparkes
Former Deputy Investment Manager of the Central Finance Board of the Methodist Church and visiting fellow, St Mary’s University, Twickenham.
We cannot separate a discussion of taxation from a discussion of the legitimate role of the state in the provision of welfare. Whilst the Church, in her formal social teaching, has said relatively little about the level and shape of the tax burden, she has discussed the role of the state in the provision of welfare on several occasions since the publication of Rerum Novarum in 1891.
In 2022, the UK government spent over £1 trillion, or over 45 per cent of national income, in total. Of that spending, around 60 per cent was on welfare, including health and education. Around half was on welfare and healthcare alone. These items of government expenditure have increased rapidly in recent years. Government spending is, more or less, at record levels for peacetime. A different approach to the provision of welfare would lead to a radically different tax burden, leaving communities with greater resources to provide healthcare and welfare services in ways other than directly through the state.
The Second Vatican Council of the early 1960s, which renewed the working of the Catholic Church, calls upon people to work together for the ‘common good’. This was defined, for example, in Gaudium et Spes (1965): “The common good, that is, the sum of the conditions of social life which allow social groups and their individual members relatively thorough and ready access to their own fulfilment” (Gaudium et Spes 26)
That the Church should take care of the poor and sick is highlighted in paragraph 42 of the same document: “when circumstances of time and place create the need, she [the Church] can and indeed should initiate activities on behalf of all men, especially those designed for the needy, such as the works of mercy and similar undertakings” (Ibid 42). Indeed, the Church today is the largest provider of healthcare in the world.
In order to genuinely reach fulfilment, we need to care for others in a way which expresses love for those in need and develops deep and meaningful relationships with them and others in the community. This raises the question of whether this can be done effectively through the state as a universal provider and financer of welfare.
Rerum Novarum contains much material on how a Catholic alternative to state welfare provision might be constituted. In paragraph 48, it strongly endorses the establishment of mutual self-help groups: that is, workplace institutions which offer help to those in need, such as relief to these who cannot work through illness or injury or those left widowed. The document reminds us of the mediaeval guilds which offered such support: “History attests what excellent results were brought about by the artificers’ guilds of olden times… Such unions should be suited to the requirements of this our age” (Ibid 49).
The document also notes that the Church has created charities and facilitated alms-giving throughout its history but warns that these bodies have been appropriated or nationalised by governments, a theme to which we shall return: “In many places the State authorities have laid violent hands on these communities, and committed manifold injustice against them; it has placed them under control of the civil law, taken away their rights as corporate bodies, and despoiled them of their property” (Ibid 53).
Two principles seem particularly relevant when examining welfare issues. The first is Christian anthropology: the point that the Church’s understanding of humanity is based upon the person defined in relation to others and fulfilled through small associations. The second is subsidiarity: the principle that decisions should be taken by the lowest and most local level rather than by a central authority.
The most basic principle of Christian anthropology, following Genesis, is that man is made in the image of God – imago Dei. Hence the teaching repeatedly reminds us that “individual human beings are the foundation, the cause, and the end of every social institution”.74 Indeed, Gaudium et Spes bases the idea of the common good on the nature of the person:
“For the beginning, the subject and the goal of all social institutions is and must be the human person which for its part and by its very nature stands completely in need of social life. Since this social life is not something added on to man, through his dealings with others, through reciprocal duties, and through fraternal dialogue he develops all his gifts and is able to rise to his destiny.” (Gaudium et Spes 25)
It is important to stress this point. The human person is the starting point for the Church’s social teaching. We have freedom so that we may be capable of love. To be a person, to be called to love, implies that we are also part of a society. There is a further point: persons do not exist in isolation. To be a human person is similarly to be part of a society, beginning with the family into which one is born. To love others is to serve them, to do them good. And in working to fulfil ourselves and each other, we work together: hence the repeated advocacy of ‘small associations’. It might be asked, “why small?”. The answer to this is that the limitations of our human nature mean that we can only develop intimate relationships with a relatively small number of people. Of course, people can bind together in larger associations too which may have certain advantages. And the state has certain functions. We are also part of a worldwide community to which we have obligations. But our human nature is such that the state is best, in this area of the provision of welfare, when it is aiding other associations within society and not displacing their functions. Whilst there are no geographical limits to defining our neighbour, our obligations to those closest to us are different from those to people who are more distant.
This was highlighted by the explicit development of the concept of subsidiarity by Pope Pius XI in Quadragesimo Anno, the encyclical commemorating the fortieth anniversary of Rerum Novarum in 1931. The basic idea of restricting state power is already found in Rerum Novarum, particularly paragraphs 12-14 on the primacy of the family as compared with the state and paragraphs 14-15 on the role of government. Quadragesimo Anno defines subsidiarity thus:
“Just as it is gravely wrong to take from individuals what they can accomplish by their own initiative and industry and give it to the community, so also it is an injustice and at the same time a grave evil and disturbance of right order to assign to a greater and higher association what lesser and subordinate organizations can do. For every social activity ought of its very nature to furnish help to the members of the body social, and never destroy and absorb them.
The supreme authority of the State ought, therefore, to let subordinate groups handle matters and concerns of lesser importance, which would otherwise dissipate its efforts greatly.” (Quadragesimo Anno 79-80)
As we shall see below, welfare provision, at different times in many countries, was the responsibility of families and institutions to which families and working people belonged – guilds, friendly societies, mutual insurance associations and so on. These were successful, and the role of the state in this area developed initially to fill in gaps in provision and to provide a baseline for those who were most vulnerable. In many countries, we see remnants of the previous way of doing things, such as in social insurance schemes for healthcare of the type that exist in Germany. But, in most modern states, the government has become the primary financier and often the provider of healthcare and welfare operating through centralised state bureaucracies in an impersonal way. In Centesimus Annus, published in 1991, Pope John Paul II reflected on this development:
“In recent years the range of such intervention has vastly expanded, to the point of creating a new type of
State, the so-called ‘Welfare State’. This has happened in some countries in order to respond better to many needs and demands, by remedying forms of poverty and deprivation unworthy of the human person. However, excesses and abuses, especially in recent years, have provoked very harsh criticisms of the Welfare State, dubbed the ‘Social Assistance State’. Malfunctions and defects in the Social Assistance
State are the result of an inadequate understanding of the tasks proper to the State. Here again the principle of subsidiarity must be respected: a community of a higher order should not interfere in the internal life of a community of a lower order, depriving the latter of its functions, but rather should support it in case of need and help to coordinate its activity with the activities of the rest of society, always with a view to the common good.
By intervening directly and depriving society of its responsibility, the Social Assistance State leads to a loss of human energies and an inordinate increase of public agencies, which are dominated more by bureaucratic ways of thinking than by concern for serving their clients, and which are accompanied by an enormous increase in spending. In fact, it would appear that needs are best understood and satisfied by people who are closest to them and who act as neighbours to those in need. It should be added that certain kinds of demands often call for a response which is not simply material but which is capable of perceiving the deeper human need. One thinks of the condition of refugees, immigrants, the elderly, the
sick, and all those in circumstances which call for assistance, such as drug abusers: all these people can be
helped effectively only by those who offer them genuine fraternal support, in addition to the necessary care.” (Centesimus Annus 48)
This message is echoed in successive encyclicals, including Deus Caritas Est (2005) and Caritas in Veritate (2009). In Pope Francis’s encyclical Fratelli Tutti (2020) and apostolic exhortation Evangelii Gaudium (2013), a ‘welfare mentality’ is criticised and the importance of relationships with, and genuine personal
care for, the poor is emphasised. It is true that, in the post-war period, support for some kind of state financing of healthcare and welfare provision has been a feature of Church documents. It is also the case that it has been clear that the Church believes that the state has a responsibility to ensure that all can receive appropriate healthcare and material provision in case of serious need. But it has not been intended that provision by the state should replace forms of support based on the family, mutuality and fraternity.
This Catholic vision contrasts with the reality of welfare provision in the UK. In our country, healthcare is essentially the monopoly of the National Health Service (NHS) which is a government agency and one of the largest employers in the world with 1.4 million staff.
The King’s Fund is an independent charity working to improve health and care in England. In May 2018, it produced a detailed report analysing healthcare data from 21 OECD (Organisation for Economic Co-operation and Development) countries and stated that the NHS was continuing to fall behind other comparable countries. Britain has poor survival rates for major diseases and low numbers of doctors, nurses and hospital beds per capita. However, the ratio of doctors’ pay to average earnings is amongst the highest in the world. There is also evidence of weak accountability in the system with several recent, very serious, scandals following the ignoring of warnings and complaints. These problematic outcomes are despite the fact that, in 2021, the UK had the fifth-highest level of healthcare spending in relation to national income out of the 38 OECD countries. Few, if any, comparable countries have a healthcare system of the type that exists in the UK. In Germany, for example, there is mixed financing combined with
church, charitable, mutual, commercial and government provision of healthcare. This is true of much of Europe.
When it comes to welfare, less –well-off households receive income supplements through a system of Universal Credit in the UK. As is indicated by the name, this is a uniform system delivered by a state bureaucracy with little consideration being given to the specific needs of recipients and the personalised measures that might help them move away from welfare. The provision of welfare does not have to be like this, as Catholic social teaching and recent British history (and indeed the history of other countries) make clear.
What is the alternative to bureaucratic and expensive state provision? How can welfare be made more relational and fraternal? Rebuilding civil society would seem to be a good start, particularly by a revival of mutual self-help groups, inspired by spiritual values, which we might call by their old mediaeval name of ‘guilds’. Of course, we cannot return to the exact model of mediaeval guilds any more than we can return to speaking Chaucerian English. But we can note their important functions. The guilds were one part of an interconnected system of Christian aid and welfare linked, as they were, to great churches and hospitals, the latter providing both alms and medicine. They were also a mutual self-help group. Indeed, the guild chest or fraternal treasury had a close resemblance to more modern friendly societies, as there was not only help for when somebody was unable to work but also a pension for the infirm.
Sadly, the Reformation destroyed this model of welfare and healthcare provision in Britain. But, in many countries and in many different eras, this form of mutual and fraternal welfare provision sprung up and was extremely effective. In the UK and in much of continental Europe, for example, unemployment insurance, health, pensions and so on were provided by fraternal, mutual and charitable organisations as well as commercial ones. In Britain in 1910, nearly seven million people were members of registered friendly societies. These organisations provided unemployment and disability insurance as well as being fraternal organisations; this element of fraternity is crucial to a proper Christian approach to welfare. This figure excludes members of mutual insurance organisations which were not registered as friendly societies. It also excludes the many people who received welfare services through trade unions.
Before the Second World War, charitable hospitals (the same names we know today – Great Ormond Street, St Bartholomew’s, and so on) took in 60 per cent of all patients requiring acute care, and local government provided places for many others. About 19 million people had health insurance and most of the rest of the population were members of Friendly Societies or made direct payments for their medical costs.
The post-war reforms to healthcare policy in the UK more or less entirely displaced all forms of voluntary, charitable, mutual and commercial provision. This was unlike the experience of much of continental Europe, especially in the area of healthcare. It was also contrary to the intention of William Beveridge, often thought to be the architect of the modern welfare state. Catholic social teaching has been clear, throughout the ages, that the state should not displace the provision of welfare that arises within society itself but rather support it. Mutual and charitable welfare provision has been praised in almost every social encyclical, including Rerum Novarum, which noted in relation to what it described as “benefit and insurance societies” that:
“The State should watch over these societies of citizens banded together in accordance with their rights, but it should not thrust itself into their peculiar concerns and their organization, for things move and live by the spirit inspiring them, and may be killed by the rough grasp of a hand from without.” (Rerum Novarum 55)
There is another, fundamental, reason why the Church should be wary of the automatic response that remedying social need and deprivation is nowadays only the responsibility of governments. Throughout the developed world, church leaders worry about declining attendance and, in particular, the drift of the young from the faith. This is combined with the apparent loss of effective evangelisation. Yet, surely, one of the most effective modes of evangelisation is the witness of actions, as has been demonstrated throughout history. It would seem appropriate to end with some reflections on this by Sr Helen Alford, Dean of the Faculty for Social Sciences at the Pontifical University of St Thomas Aquinas and President of the Pontifical Academy for Social Sciences:
“And John Paul says, no, it’s [Catholic social teaching] part of moral theology. I think the reason he does that is to say it’s a crucial part of the church’s teaching… it’s actually part of the faith, it’s part of the proclamation the Church should be making… I think it’s a crucial part of evangelization. It’s also about living a good human life and being in dialogue with non-believers and helping to build a better world, but it’s also about evangelization, it’s about showing what the Gospel is doing in society.”75
In the UK, 23 million people received a welfare benefit of some type in 2021. As has been discussed at length, our healthcare provision is probably unique in Europe for lacking any substantial church, charitable or mutual provision: there is, for most people, a single provider and source of finance. Recent social encyclicals have suggested that a different model could be less bureaucratic and more efficient and effective, and thus impose less of a cost on families through taxation – costs which ultimately create problems that welfare then attempts to solve in a sort of vicious circle. An infrastructure grew in the nineteenth century for the provision of welfare that could have been supported and nurtured rather than displaced and destroyed. In early alignment with the principles of Catholic social teaching and the words and actions of Pope Francis, these organisations worked fraternally with those in greatest need – whether that need was temporary or permanent. Perhaps the greatest criticism of the limitations of the modern form of the welfare state appears in the many encouraging signs of charitable and social action, with new organisations regularly springing up to meet the social and economic needs that are neglected by the current formal structures despite the spending of 45 per cent of national income by government. To break this vicious circle, reform at the government policy level is necessary. We need policies which break up the state monopoly of healthcare and welfare and which allow mutuality to thrive.
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74. Pope John XXIII, Mater et Magistra (1961) 219, as an example of this common refrain.
75. ‘Church‘s social justice push is part of evangelisation, head of papal academy says’, Crux (11/4/2023).
All individuals, families, civil society organisations and corporations, as well as the state, are responsible for promoting the common good and solidarity.
The framing question for this reflection is whether addressing the national debt from the response to Covid-19 will require cutbacks in expenditure or increased taxation or both
In this chapter we are concerned with the principles and applications of taxation within Scripture and not the development of a systematic theology.
