The Welfare State

The Welfare State Timeline

Below is a timeline that explains the developments and establishment of the modern Welfare State:

The Origins of the Welfare State

The term 'Welfare State' initially described Labour's post-war social policy. However, the origins of the Welfare State date back to the early 1900s with Liberal Prime Minister Herbert Asquith's reforms between 1908 and 1910.

Fig. 1 - H.H. Asquith

Here's a brief look at the welfare policies enacted by Asquith's Liberal government:

The Establishment of the Welfare State

After the Second World War, Clement Attlee's Labour government introduced a series of measures to tackle social inequality. These policies established the modern Welfare State in Great Britain. Such policies emanated from a wartime report on social welfare by British economist William Beveridge. Here's a brief overview of Beveridge:

• Name: William Beveridge
• Born: 5 March 1879
• Background: Trained as a lawyer before becoming a Liberal politician. In the early 1900s, William Beveridge helped Chancellor David Lloyd George establish the Old Age Pensions Act (1908) and National Insurance Act (1911).
• Why he's important: Published the Beveridge Report, which led to the establishment of the modern Welfare State.

The Beveridge Report

During the Second World War, William Beveridge headed a committee tasked with investigating social welfare in Britain. Beveridge's committee identified five fundamental problems in British society which prevented people from bettering themselves; he entitled these problems 'The Five Giants'.

The Five Giants were:

• Disease.
• Ignorance.
• Idleness.
• Squalor.
• Want.

Fig. 2 - Norwich after bombing

William Beveridge's findings were published in 1942 in a report entitled 'Social Insurance and Allied Services'. The hugely popular 'Beveridge Report' sought to rectify The Five Giants, outlining social security for British people 'from the cradle to the grave'. The report, which ultimately led to the establishment of the modern Welfare State, called for a system that would be:

• Comprehensive – The system must comprehensively cover all issues 'from the cradle to the grave'.

• Compulsory – All social insurance would be compulsory, and all workers must contribute.

• Contributory – Workers would contribute a proportion of their wages.

• Non-means tested – Available to everyone regardless of financial situation.

• Universal – Available to all.

Labour Reforms 1945 - 1951

Between 1945 and 1951, the Labour government introduced a series of social welfare policies. These policies were designed to combat Beveridge's 'Five Giants'. Let's look at how each Giant was tackled.

Fig. 3 - William Beveridge

The Welfare State during Thatcherism

Conservative leader Margaret Thatcher was elected Prime Minister in 1979. Throughout her 11-year premiership, she dismantled many of Labour's post-war social welfare policies.

Economic Policies

Margaret Thatcher followed Friedrich Hayek's economic theory of monetarism – the belief that governments should control the amount of money in circulation. In 1979, to curb inflation, the Thatcher government raised the base interest rate to 30%.

Despite the introduction of this policy, inflation hit 20% in 1980. This led Thatcher's government to increase taxes and slash public spending. While this policy curbed inflation, unemployment hit 9.6%.

Trade Unionism

In 1980, the Thatcher government passed the Employment Act. This policy limited the number of people who could join a picket line and banned 'secondary action'. This policy was followed by the Employment Act of 1982, which banned political strikes and made trade unions financially accountable for damages that resulted from industrial action.

Fig. 4 - Margaret Thatcher

Housing

The Housing Act of 1980 allowed tenants to buy council houses at a reduced rate. By 1987, over 1 million tenants had bought council homes. While the 'aspirational' working class heralded the policy, councils could not reinvest funds into building new houses. This led to the depletion of council houses across the United Kingdom.

The Poll Tax

In 1989, the Thatcher premiership introduced the Poll Tax in Scotland. The Poll Tax was a flat-rate, fixed tariff for adult residents. Before the introduction of the Poll Tax, households had paid an amount based on the value of their property.

The introduction of the Poll Tax meant that individuals living alone saw a decrease in their taxes, but large households saw a substantial increase. The Poll Tax was introduced throughout Britain the following year.

Privatization

In 1982, Margaret Thatcher sold off the National Freight Company to its employees. As her leadership continued, Thatcher became bolder in her bid to sell off nationalized companies. Starting with British Telecom in 1984, Thatcher then privatized British Gas, British Steel, British Airways, British Petroleum, and British Coal.

The Welfare State under Thatcher: Historiography

Margaret Thatcher's relationship with the Welfare State splits historians into two camps:

• Those who believed that Thatcher's policies were dictated by the circumstances in which she worked.
• Those who believed that Thatcher's policies were dictated by her own political and economic beliefs.

This historiographical dispute is known as the Structure VS Agency debate.

Structuralist Historiography

Structuralists believe that a person's actions are dictated by the circumstances in which they operate. In the case of Thatcher, structuralists believe that Thatcher had no choice but to dismantle the Welfare State. They believe Thatcher's choices were dictated by high public expenditure and crippling economic difficulties.

Agency Historiography

Agency refers to the ability of an individual to act independently. Those on the agency side of the debate believe that Thatcher's choices were dictated by her own political and economic beliefs.

The Welfare State Summary

It's interesting to note that the two most significant post-war British leaders are Clement Attlee – the founder of the welfare state, and Margaret Thatcher – the enemy of the welfare state. Aside from a sense of bitter irony, this observation demonstrates the predominance of social welfare in both UK politics and British society.

While at opposite ends of the political spectrum, both Attlee and Thatcher created a lasting impact on politics that transcended Labour/Tory ideology. Conservative leader Winston Churchill increased welfare spending during his second term, and New Labour continued many of Thatcher's themes throughout Tony Blair's premiership. While the significance of Attlee and Thatcher cannot be disputed, one question remains: Whose welfare legacy remains more apparent in Britain today?