welfare state

welfare state. There are many theories as to why the welfare state developed, from the radical view of its serving the needs of capitalism by maintaining political stability and providing healthy, educated workers, to the democratic perspective that it arose from the demands of the working class expressed through the ballot box. It has been called ‘an erratic and pragmatic response of government and people to the practical individual and community problems of an industrialised society’.

In the laissez-faire, capitalist, self-help ideology of the 19th cent. fears of dependency and disincentives for the poor resulted in harsh measures based on the workhouse. At the turn of the century Booth's (London) and Rowntree's (York) studies, revealing the facts of poverty and showing its origins in social and economic conditions, helped to raise awareness of the problem and set the stage for reform.

Measures taken by Asquith's Liberal government, with Lloyd George as chancellor, represent the foundations of the British welfare state. Non-contributory old-age pensions (1908), paid for by higher taxes (‘the People's Budget’, 1909), and the National Insurance Act—Health and unemployment (1911) were the most important reforms. In the inter-war years the problem of unemployment dominated social policy; the insurance scheme could not cope and in 1931 the dole was cut and a family means test implemented, a return to relief based on Victorian deterrent values.

The Second World War threw people together, and in the relative social cohesion of the war years they determined that ‘never again’ should there be a return to the misery of the 1930s. The Beveridge Report (Report on Social Insurance and Allied Services, Cmd. 6404) gave shape to these ideas. Beveridge identified ‘five giant evils of Want, Disease, Squalor, Ignorance and Idleness’ and, to fight each evil, ‘five giants on the road to reconstruction’: social security, a national health service, housing provision, state education, and a commitment to full employment. In July 1945 a Labour government, fully committed to wholesale reform, was elected in a landslide general election victory. Led by Clement Attlee, it lasted until 1951 and founded the modern British welfare state.

Poverty was to be conquered by a commitment to full employment together with social insurance. The coalition government's 1944 Employment White Paper made explicit all-party acceptance of Keynesian demand management to combat unemployment. Social insurance provisions, based on Beveridge, were a move from selectivity to comprehensive coverage. Compulsory contributions to a National Insurance scheme provided for incomes during sickness, unemployment, widowhood, and retirement; there was also a means-tested safety net, national assistance (now income support), and family allowances (now child benefit). The National Health Service Act (1946) provided for free health care for all regardless of means, and the birth of the NHS in 1948 was a triumph for Aneurin Bevan, minister for health. Education reform had been initiated by R. A. Butler, Conservative education minister in the coalition government, in his 1944 Education Act. The school-leaving age was to be raised to 15 and there was free secondary education for all. Finally, council housing was to solve the problem of homelessness and squatting which followed the end of the war.

Throughout the 1950s and 1960s there was cross-party consensus on the welfare state. In the 1970s the consensus was challenged from the right by neo-liberals who wanted to ‘roll back the state’. Their arguments, together with rising unemployment, reawakened concern over costs and a ‘dependency culture’. The election of a Conservative government under Margaret Thatcher in 1979 led to debate on the future of the welfare state, but few measures to reduce its scope were taken until after the third Conservative election victory in 1988. The debate continues: broadly there are two interrelated issues: the universalist One Nation approach versus a means-tested safety-net system, and the sustainability of the costs of provision.

Margaret Wilkinson