Welfare State

I

Introduction

Welfare State, system whereby the state provides benefits in such areas as unemployment, medicine, education, and housing, particularly applied to the British welfare state put in place after World War II.

The British welfare state, the creation of the Clement Attlee governments (1945-1951), was a product of the Beveridge Report (1942), World War II, and the long-term social and political concerns as epitomized by the Liberal social reforms of 1905 to 1914. In addition, as the historian Asa Briggs observed in 1961: “The trends and tendencies which led journalists, politicians and historians to apply the label welfare state to Britain may be noted in all individualized communities.” Briggs went on to define a welfare state as one in which market forces were modified in at least three ways:

“First, by guaranteeing individuals and families a minimum income irrespective of the market value of their work or property; second, by narrowing the extent of insecurity by enabling individuals and families to meet certain social contingencies (for example, sickness, old age, and unemployment) which lead otherwise to individual and family crises; and third, by ensuring that all citizens without distinction of status or class are offered the best standards available in relation to a certain agreed range of social services.”

Before World War I most European states had introduced at least a modicum of social welfare provision, including Bismarck’s Germany and even Tsarist Russia. In Britain, as elsewhere, some employers felt that welfare provision would bring the benefit of a more physically efficient workforce, and some working people had rising expectations of better provision.

II

Background to the Development of a Welfare State in Britain

In Britain, by the end of the 19th century, the practical, as well as the intellectual, basis of the Poor Law, as reformed in 1834, was crumbling. There was also greater awareness of the extent and effects of poverty as a result of a series of late-Victorian and early Edwardian social surveys, notably those conducted by the wealthy liberal businessmen Charles Booth and Seebohm Rowntree, and details of the poor physical state of a high proportion of urban volunteers for the army at the time of the South African War (1899-1902). After the Liberal Party came back to office in 1905, it soon showed a willingness to raise public expenditure within free trade finance and to offer piecemeal (rather than comprehensive) solutions to poverty (see Liberal Britain). The government’s measures included some provision for school meals for poorer children (1906), school medical inspections and treatment (1907 and 1912), old age pensions (legislation, 1908, payments from 1909), minimum wages for “sweated labour” (under the Trades Boards Act 1909), labour exchanges (1909) and unemployment and health insurance (1911).

The Poor Law system was ended in 1929, by which time many of the groups previously covered by it had been moved to specialist care (for example, unfit elderly people to geriatric hospitals). In the inter-war period, health and unemployment insurance and pensions were extended, as were other health provisions, for example in the areas of maternity and child welfare. The greatest criticism of social welfare during this period was that its various provisions covered only certain groups of people and that many of those most in need did not gain assistance. There was a strong case for universal coverage of social welfare and a more even provision of hospitals across the country. In the straitened economic conditions of the 1930s, however, there was little political will to find the money.

The political determination to provide a wider-ranging social welfare system came during World War II. The massive bombing of civilian targets led to expectations of equality of treatment for those injured. Similarly, in a time of national shortages, rationing was deemed to be a fair solution, with priorities given to such groups as mothers, infants, and schoolchildren, and not those with the greatest purchasing power. As in World War I, morale-boosting home propaganda dwelt on the “empty larders” of wartime being rewarded by “jam tomorrow” in the form of better social welfare, housing, and education.

The Beveridge Report of 1942 provided the main foundations of social policy for the next four decades. Though later there was greater emphasis placed on education and housing, as well as on local welfare services (often known as personal social services), Beveridge set the main criteria for at least until the 1980s.

III

The Beveridge Report, 1942

William Beveridge , a former journalist, civil servant, and senior academic, was appointed in 1941 as chairman of an inter-departmental group of civil servants to undertake “a survey of the existing national schemes of social insurance and allied services, including workmen’s compensation” and to make recommendations. The resulting report, published in December 1942, was entitled Social Insurance and Allied Services.

It set social welfare in a broad context. Beveridge characterized his aim as being to attack “Five Giants”: want, disease, ignorance, squalor, and idleness. It envisaged that in the post-war period the economy would be run so as to avoid mass unemployment, and that there would be a comprehensive health scheme. It also assumed that there would be a system of family allowances, to eliminate child poverty and to provide an incentive for an unskilled person with a large family to work and not to rely on unemployment and other benefits.

Beveridge’s social insurance proposals were to provide universal benefits “from the cradle to the grave”. They would cover all the normal risks of life, providing maternity, widows’ and orphans’, medical sickness, industrial injury, unemployment, old age, and funeral benefits. To pay for these, people would make a flat-rate contribution (that is, one that did not vary according to income), which was intended to be affordable by all those in employment.

The Beveridge Report was embraced by the Labour Party but was received coolly by the then prime minister, Winston Churchill, who was reluctant to pledge the government to implementing it. Churchill was fearful of too lavish promises (as when, in 1918, prime minister David Lloyd George spoke of “a fit land for heroes to live in”). However, in 1944 the government introduced a major Education Act and in 1945 a Family Allowances Act.

IV

Social Security

The Attlee government acted on the Beveridge Report by introducing in 1946 a National Insurance Act (for England and Wales, with a 1947 Act for Scotland) and the National Insurance (Industrial Injuries) Act. In broad terms, this legislation followed Beveridge in offering coverage against all major risks from birth until death. Contrary to Beveridge’s recommendations, the contributions were not one flat rate but varied according to age and sex, as well as to whether the contributor was employed, self-employed, or unemployed. Within these categories, however, there was one rate, regardless of income. As a result, the rates needed to be kept relatively low and the scheme brought in much less money than it might otherwise have done.

Payments to recipients were also at a flat rate, which soon proved not to reach subsistence level. So, again contrary to Beveridge, there had to be additional funds for those who remained in poverty even with the benefits. These supplementary benefits were provided on a means-tested basis through the National Assistance Board set up under the National Assistance Act of 1948. Beveridge had called for a long-term unemployment benefit scheme coupled with compulsory training for those who had been out of work for a long time. The 1946 Act put a six-month time limit on benefits, with an extension to twelve months for those with good contribution records. As regards pensions, Beveridge had recommended that those who had not been in earlier schemes should pay in for 20 years to gain a full entitlement to benefits. The government settled for 10 years, however, thereby incurring heavy costs for the future.