Social insurance and the contributory principle: A paradox in contemporaryBritish social police

At the outset of the twenty-first century, the situation of British Nationa l Insurance is one of paradox. Due to socioeconomic changes and successive government policies over the past three decades, the contributory principle , which was a cornerstone of social security reconstruction after World War II, has been in remarkable decline. At the same time contributions to the National Insurance Fund increased significantly and continues to represent a substantial form of total social security revenue. The contributory princ iple has a broad public appeal, but National Insurance does not figure prom inently in public debates and the system is poorly understood. Recent polic ies have added to the ambiguity as to how far the contributory principle co nfers social rights, and have further eroded its rationale. The article sta tes that this situation is not matched by developments in other European co untries. Despite substantial reforms and heated debates marked by controver sy, the prospect for social insurance and the contributory principle appear s considerably better than in the UK. One major explanation is, the article argues, the distinctive notion of social insurance in Britain and particul arly the lack of "wage-replacement" transfers. Elsewhere in Europe, earning s-related transfers sustain a very different incentive structure, instituti onal involvement and wider public participation in matters of social insura nce.