A Welfare State
Britain in the 20th Century: Making
and Unmaking the Nation
Quiz Questions
1. What was government expenditure as % of
Gross National Product in a) 1900; b) 1979?
2. What were defence and social services
expenditure as a percentage of government
expenditure in a) 1910; b) 1979?
3. What percentage of the workforce was
employed by the state in a) 1851; b) 1976?
4. What was the standard rate of income tax in
a) 1900; b) WWII?
Quiz Answers
1. Government expenditure as % of Gross National
Product in a) 1900: 14%; b) 1979: 52%
2. Defence and social services expenditure as a
percentage of government expenditure: a) 1910:
27%/52%; b) 1979: 11%/81%
3. Percentage of the workforce employed by the
state in a) 1851: 2.4%; b) 1976: 22.7%
4. Standard rate of income tax: a) 1900: 3.33%; b)
WWII: 50%
What does this data indicate?
• Major shift in the scale and nature of the state in the
twentieth century.
• Huge increase in expenditure
• Increased reliance on taxation to fund this
• A shift towards social services
• In turn, the rise of this big state means that it comes to
constitute a major part of the economy and becomes a
major employer
• The rise of a ‘welfare state’? In contrast to the warfare
state which had been fundamental in the making of
Britain, and the laissez-faire state which had
characterised the Victorian era?
The Rise and Fall of the State-Centred
Nation?
• Famous opening to A.J.P. Taylor’s English History,
1914-45: ‘Until August 1914 a sensible, law abiding
Englishman could pass through life and hardly notice
the existence of the state … broadly speaking, the state
acted only to help those who could not help
themselves. It left the adult citizen alone.’
• Margaret Thatcher, reported in The Times, 9 February
1984: ‘I came to office with one deliberate intent: to
change Britain from a dependent to a self-reliant
society – from a give-it-to-me to a do-it-yourself
nation; to a get-up-and-go instead of a sit-back-andwait-for-it Britain.’
Historical Problems/Questions
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Why did Britain move from a laissez-faire to a welfare
state?
How important was the Second World War in this
process, or was such as system already emerging?
To what extent did the reforms emerging out of WWII
see the creation of a new kind of state-nation in
Britain?
Has the period since the war seen the consolidation
or breakdown of this relationship between the state
and the people, and if so why?
Evolution/Earlier Roots: The Liberal
Welfare Reforms of 1906-14: Examples
• Power for local authorities to
provide free school meals 1906 –
symbolic importance of state
food
• School Medical Service 1907:
shift to free national health
service
• 1908 Old Age Pensions Act: low
level and limited to 70+; but
income tax funding points to
redistributive model
• (Beveridge’s) 1911 National
Insurance Act
(sickness/unemployment: just
20% men; but key model for
welfare state)
Liberal Welfare Reforms of 1906-14:
key changes
• Concern about fitness of the nation (earlier
lecture)
• Acceptance of state intervention when
individuals cannot help themselves:
children/elderly
• Looking beyond the less-eligibility principle of the
poor law
• Helping people to help themselves: insurance
principle – not a handout
• Willingness to fund via national income tax: shift
from local to national welfare system
Evolution ii): the interwar years
• Often seen as a very negative period for welfare:
• failed promise of homes for heroes
• Dominance of Treasury/City of London/Conservative
party and economics of spending cuts, low taxation,
unemployment, low inflation, protection of Sterling
(sticking to the gold standard)
• When the Labour government of 1931 refuses to
reduce unemployment benefit loses support of
financiers and collapses
• Resulting unemployment, poverty, ill-health …
• Use of humiliating ‘means test’ to keep down benefits
A more positive reading of the
interwar era
• Introduction of non-contributory ‘dole’ for unemployed
soldiers following war
• Gradual extension of insurance system across the
period: forced by high level of unemployment and
popular pressure, B.B. Gilbert argues that this leads to
virtual welfare state by 1939
• Insurance designed for temporary unemployment not
the long-term form of interwar era
• High level of long-term unemployment means that
system can no longer be supported by insurance fund
alone and has draw on general taxation
Other areas of interwar development
• Health: new Ministry of Health 1918; Maternity
and Child Welfare Act 1918; by 1939 most
workers had access to panel doctors under
insurance system; 1929 local authorities take
over poor law and convert many institutions into
hospitals
• Education: principle of secondary education for
all accepted
• Housing: 4m built – mix of local government and
private with state aid
• Pensions extended to 65+ 1925
What sort of welfare system by 1939?
• Emerging social services
safety net
• But minimalist –
continuity of lesseligibility principle (to
discourage reliance)
• Limited to those who
can’t provide for
themselves
The main aspects of change
WWII/1945• Education Act 1944: secondary education for all (realises aim of
interwar)
• Family Allowance Act 1945: for all children after first, direct to
mother (poverty worst for women and children interwar because
they are not covered by work-linked national insurance; also
addresses anxieties about population decline)
• National Insurance Act, 1946 (still main basis of welfare state vision)
• National Assistance Act, 1946 (for those not covered, replacing
stigma of poor law, intended to be for very few not covered by
insurance system – aim of full employment, and health service and
family allowance to offset need)
• National Health Act 1946 (starts 1948)
• Integrated system, follows blueprint of 1942 Beveridge Report
• Ties welfare state to need also for full employment: integral
elements in post-war settlement
Key Principles of the new Welfare
State
• Flat rate of subsistence benefit
(equality; vs stigma and ‘means
test’; but also to keep costs down
and discourage abuse
• Flat rate of contribution
(insurance principle)
• Unification of system (main
problem of system that had
evolved interwar – involving
multiple insurance agencies, local
government, voluntary groups …
• Adequacy of benefit levels
(criticism of interwar poverty)
• Comprehensiveness (poverty
among children eg exposed by
evacuation)
Limits to radicalism (vs myth)
• Continuation of insurance
principle of 1911• Welfare in return for
contribution, not as a right
• Benefits to be set at a
minimum level
• To some extent a tidying up
of interwar system
• In fact many find level of
social security inadequate
and forced onto national
assistance
Problems
• Adequacy not easy to define, easily becomes a
bottomless pit
• Depends on full employment; full employment
increases inflation and level of expectation
• Demographic change (ageing; changing structure
of the family)
• New medical technology, rising expectations
inflate cost of universal/ comprehensive health
care
• Trying to base on flat rate contribution tied to
poorest
Outcome
• Although Beveridge a reluctant collectivist, the welfare
state that emerged was not one simply based on social
security; instead a more radical system rooted in principles
of comprehensiveness and universalism
• And vision of funding shifts due to collapse of minimalism
and problem of funding via flat rate contributions
• Therefore the welfare state that emerges depends on
state’s role in manipulating economy to ensure funding and
full employment (Keynesian mixed economy)
• This economic as well as social settlement key in making
Britain a welfare state up to 1979
• Importance in welfare state, but also myth of welfare state
and its making in redefining the nation?