What Did the Labour
Government do?
1945-51
Beveridge Report
• William Beveridge –
Economist and Social
Reformer.
• Famed for writing the
Beveridge report
• The Beveridge Report was
the Report of the InterDepartmental Committee on
Social Insurance and Allied
Services chaired by William
Beveridge.
Recommendations
• 1. Proposals for the future should not
limited by "sectional interests" in learning
from experience and that a "revolutionary
moment in the world's history is a time for
revolutions, not for patching".
• 2. Social insurance is only one part of a
"comprehensive policy of social progress".
The five giants on the road to
reconstruction were Want, Disease,
Ignorance, Squalor and Idleness.
• 3. Policies of social security "must be
achieved by co-operation between the
State and the individual", with the state
securing the service and contributions.
The state " should not stifle incentive,
opportunity, responsibility; in establishing a
national minimum, it should leave room
and encouragement for voluntary action by
each individual to provide more than that
minimum for himself and his family".
• The British people hoped that “post-war
would be better than pre-war”
5 Giants of the Beveridge Report
• WANT (poverty)
• DISEASE (bad health)
• SQUALOR (bad housing)
• IGNORANCE (poor education)
• IDLENESS (unemployment)
• Beveridge said
• “this is a time for revolution not patching”
• Universal welfare plan that should cover
the whole population of the country.
Acts passed during the War
• Education Act 1944
• All children over the age of 11 should
receive a separate secondary free of
charge and that the school-leaving age
would be raised to 15 as soon as possible.
• Family Allowances Act of 1945
• Coalition Measure introduced a child
allowance of 5 shillings a week (25p) for
the second and all subsequent children
regardless of family income.
Labour Tackling the 5 Giants
WANT
• The main social problem to tackle
• 1946 National Insurance Act created the
structure of the welfare state.
• Extended the 1911 National Insurance Act
to cover all adults and also put into
operation a comprehensive National
Health Service.
• Compulsory contributory scheme for each
worker and in return for the weekly
contribution from workers, employers and
government, an individual was entitled to
sickness and unemployment benefit.
• Pensions for women at 60
• Pensions for men at 65
• Widows and Orphans’ pensions
• Maternity and Death Grants
Quote
• James Griffiths, Minister of National
Insurance
• “The best and cheapest insurance policy
offered to the British people, of any people
anywhere”
Problems with Pensions
• The Pensions were still not enough to live
on.
• Value of pensions reduced by inflation
• Pensions levels remained below basic
subsistence levels.
National Assistance Board
• Helped people not in work or who had not paid
enough contributions to qualify for full benefit.
• People in need could apply for further
assistance from the national assistance board.
• Applicants were means tested but not the same
as the draconic means testing of the 1930s
• Money provided by Government from central
taxation.
• Government also required local authorities to
provide homes and other welfare services for
the Elderly and handicapped.
Purpose
• To provide a whole new social security
structure and really did provide a safety
net through which no person should fall
into serious poverty.
Family Allowance Act
• Attack household poverty.
• Started by the wartime government
• Small amount of money paid to all mothers
of two or more children.
• Money paid to the mothers and not the
fathers
• Not means tested
Industrial Injuries Act 1946
• Compensation paid by the government ,
not individual employers and all workers
were covered.
Summary of Want
• Almost 50 years earlier,
Seebohm Rowntree had
identified old age, sickness,
injury at work and
unemployment as the main
causes of poverty.
• Labour had directly attacked
these problems and provided
help and assurance to many
and in doing so removed the
fear of falling into serious longterm poverty.
DISEASE
• Most people consider the greatest
achievement of the post-war Labour
Government to be the creation of a
National Health Service.
3 Aims
• UNIVERSAL ACCESS
– NHS was for everybody
– Regardless of Class and income
• Comprehensive
– Meeting all demands
– Treating all medical problems
• Free at the point of use
– No patient would be asked to pay for any
treatment
Funded
• The service was and is paid for by the
taxation and National Insurance payments
made by every worker
ORDINARY WORKER
PAYS TAX
FUNDS NHS
Before NHS
• Healthcare had to be paid for
• About ½ the male workforce was entitled
to assistance through various insurance
schemes
• Wives and families did not qualify
• Many families had no insurance and had
to rely on support from friends, neighbours
or local charities.
Services Offered
• Offered free health care at the point of
need
• Everybody was entitled to
– GPs
– Specialists
– Dentists
– Spectacles
– False Teeth
– Maternity and Child Welfare Services
Opposition
• At first opposition came from Doctors
• “Being treated like civil servants”
• Would end the Gravy train of private
healthcare
Aneurin Bevan
• Minister for Health
• Responsible for
establishing the NHS
• Defused the situation
with a new payment to
doctors
Results of the NHS
• Even though there was opposition to the
NHS, ordinary people celebrated the
arrival of the NHS
• The new NHS was inundated with a
backlog of untreated problems.
• Doctors, dentists and opticians were
flooded with patients
• Prescriptions rose from 5 million a month
before the NHS to 13.5 million in
September 1948
• In the first year 5,000,000 spectacles were
dispensed
• 8,000,000 dental patients were treated
Spiralling Cost
• Victim of its own success
• Became an ENORMOUS EXPENSE
• National Insurance only contributed 9% of
NHS funding in 1949.
• The rest coming from general taxation.
Charges
• By 1950 the NHS was costing £358 million
a year
• The Labour Government were forced to
BACKTRACK on the principle of a free
Service by introducing charges for
spectacles and dental treatment
• The Government was also constrained
(limited) by the economy still recovering
from the war.
Conclusion of the NHS
• Despite criticism,
compromises and
constraints the NHS
was arguably
“The greatest single
achievement in the
story of the welfare
state”
Beveridge Report
• Beveridge made clear his desire for an
education system available to all,
especially the poor, which would provide
opportunities and develop talent.
Problems with Education
• Before 1939 Education services varied across
the country.
• The quality of secondary education was variable
• Many children received no education past
primary stage and poorer parents could not
afford the fees that some secondary schools
charged.
• Scholarship did exist but pressure to leave
school and bring in wages was very high.
Education Act 1944
• Also know as the Butler Act
• Main idea was equality of opportunity
• Allowing working class children with ability
to progress as far as they could without
being restricted by the demands to pay
expensive fees.
• However in reality the Act was rather
different from its original aims.
• Butler believed that the future of Britain’s
strength and Wealth lay in
Science
Technical
Butlers idea
• Three level education system
• Technical
• Grammar
• Secondary modern
• In Scotland the last two were normally
called senior and Junior secondary.
• Originally each type of school would have
equal status.
• In reality though it was not the case.
Which School
•
•
•
•
All children sat an exam at 11
Called the 11+ exam or Qualy in Scotland
Decided the type of school a child went to.
Those who passed went to a senior
secondary school and were expected to
leave school after 15, go on to university
or get jobs in management and the
professions.
Fail?
•
•
•
•
Junior secondary
Leave school at 15
Enter an unskilled job
By failing the 11+, thousands of children
were trapped in a world of low
expectations and inferior education.
Success or Failure
• There was a small increase in the
proportion of working class boys at
grammar school but the real benefits lay
with the middle classes.
• Grammar schools and senior secondary's
were given far more government spending
than junior secondary moderns.
• 11+ exam was socially divisive and highly
contentious selection procedure.
• Secondary modern became the ‘inferior’
partner offering little in the way of
opportunities to children.
• Many children were classified as nonacademic as grammar schools could only
take about 20% of children.
Lack of Understanding
• Never really understood the need for a
tight control of educational policy.
• Some of the leaders such as Attlee,
Dalton, Cripps all went to Public School.
• Little understanding of state system
• Others like Bevin, Morrison and Shinwell
had little formal education.
• Tomlinson who became Minister of
Education in 1947 left school at 12.
• Compared to the equality
of opportunity and
provision being enacted in
the fields of social security
and health, the Labour
Government did little for
the educational welfare of
the working class.
Serious Problem
• The chronic housing shortage at the end
of the war was the most pressing problem
facing the government.
• Already a serious shortage before the War
• Made worse by the destruction of 700,000
houses by Hitler’s bombers.
• In 1945, 1/3 of all British houses were in
need of repair and renovation.
• As peace broke out a huge rebuilding
programme was needed.
• Labour Manifesto
“Labour’s pledge is firm and direct – it will
proceed with a housing programme with the
maximum practical speed until every family in
this island has a good standard of
accommodation”
Aims and Reality
• The aim was too build 200,000 houses
each year.
• Economic conditions did not help
• Raw materials were in short supply and
expensive
• Lack of building workers.
• Timber had to be imported from Sweden
and America.
• The responsibility for Britain’s housing
problems fell to Bevan at the Health
Ministry
• Bevan’s policy was to help those most in
need i.e. working class.
• Most of the scarce building materials were
allocated to the local authorities to build
council houses for rent.
• Between 1945-51 4 council houses were
built to every private house.
• As a short term solution the government
built prefabricated houses known as
“prefabs”
• 1946 saw the completion of 55,600 new homes; this rose
to 139,600 in 1947, and 227,600 in 1948. While this was
not an insignificant achievement, Bevan's rate of house
building was seen as less of an achievement than that of
his Conservative (indirect) successor, Harold Macmillan,
who was able to complete some 300,000 a year as
Minister for Housing in the 1950s. Macmillan was able to
concentrate full-time on Housing
• However critics said that the cheaper housing built by
Macmillan was exactly the poor standard of housing that
Bevan was aiming to replace
• However despite all this, the shortage was
still chronic and many families were forced
to take residence in disused army camps.
• After the War there was
– Increase in marriages
– Rapid increase in birth-rate
– Reluctance of families to continue living as an
extended family.
• All this meant that houses were swallowed
up as fast as they were built.
• In spite of labours undoubted
achievement, given the difficult economic
situation, there was still a serious housing
shortage in 1951 and long waiting lists for
council housing.
New Towns Act 1946
• Gave the government the power to decide
where new towns should be build.
• The aim was to create town that were
healthy and pleasant to live in unlike the
random uncontrolled growth of Britain’s
19th century industrial towns.
• 14 New Towns were established before
the end of the labour government in 1951
including Glenrothes and East Kilbride
Success or Failure?
• Historians
• 1951 Voters
Unemployment
• Need to avoid a return to the problems of
the late 1920-30s.
• Mass Unemployment etc
• In 1944 a White Paper (government
proposals for discussion) seemed to
accept the need for full employment.
Nationalisation
• One answer to the problem of
unemployment was nationalisation
• Meant that, in theory, the government
would take over major industries and run
them for the benefit of the country rather
than private owners
• Labour believed that they could control
and manage the economy more effectively
and maintain full employment.
• Beveridge believed that unemployment
could not be brought down below 3%
• By 1946, the unemployment figure was
2.5%
• Dalton, the 1st post war chancellor of the
exchequer, claimed that full employment
was
“The greatest revolution brought about by
the Labour Government”
Why did this occur?
•
•
•
•
Marshall Aid?
Governments economic policies?
Post-war boom?
Mixture of all of these?
Unemployment levels 1931-51
1931
1932
1933
1934
1935
1936
1937
2,630
2,745
2,521
2,159
2,036
1,755
1,484
• (thousands)
1938
1939
1940
1941
1942
1943
1944
1,791
1,514
963
350
123
82
75
1945
1946
1947
1948
1949
1950
1951
137
374
480
310
308
314
253
How do you achieve Full
employment?
• Keeping interest down
• This encouraged private investment and
local authority spending
• The Government controlling inflation (price
controls & rationing)
Reality
• De-mobilisation was carried out without
upsetting economic recovery
• There was no return to high levels of
unemployment in the pre-war depressed
areas of northern and western Britain.
• North-east coastal area of England had
unemployment rates of 38% in 1938
• 1951 the figure stood at just 1.5%
•Britain faced massive problems between 1945 and 1951:
•bread and potato rationing
•severe shortage of raw materials
•fuel shortages during the winter of 1947
•a 30% devaluation of the pound
•inflation
•balance of payments problems
•losses of overseas assets and markets
during WW2
•loss of one-quarter of its national wealth
during WW2
Devaluation of the Pound
• Helped the exports industry
• E.g. A British car was now 30% cheaper
• Therefore world demand for British exports
grew.
Positive Evaluation
•Economic historians tend to conclude that it was difficult
to see how Labour’s performance could have been
improved upon.
•Britain’s growth rates were better than America’s. The
wartime slogan ‘Britain can take it’ had changed to ‘Britain
can make it’. (Pearce)
•‘The single most important domestic achievement of the
Labour government was the maintenance of full
employment after the war.’ (Brooke)
•This was made more impressive by a climate of crisis and
diminished resources. Between 1945 and 1951,
unemployment averaged 310,000 a year, compared to
1,716,000 for the period 1935-9.
Positive Evaluation
•Labour’s achievement of full employment by 1950 led to
a belief that further, more radical social reforms were
not needed and that ‘a growing economy would take care
of remaining social problems.’ (Thane)
•The average real wage in 1949 was 20% higher than in
1938. People were better off.
Criticism
•There is very little to criticise about the unemployment
record during the period 1945-51
•Only once, during the fuel crisis of 1947 (sparked by the
exceptionally harsh and prolonged winter), did unemployment
briefly approach the one million mark
•The raising of the school leaving age from 14 to 15 in
1947 helped keep the unemployment figures down.
•Some historians argue that Labour can take little credit
for full employment. Most of the factors affecting
employment were outwith government control e.g.
•world demand was growing
•Britain could sell all its exports
•all countries needed to re-stock due
to the damage and interruptions of
the war
•therefore the government did not
have to create jobs itself
IDLENESS
Overall Judgement
• The Labour Government focused on their
attempts to build a fair society in Britain
where help was available to all.
• “New Jerusalem”
• Pro’s
• 5 Giants were under severe
attack
• State now provided a safety
net
• Cradle to the Grave
• Rowntree’s investigation of
York in 1950 found that
primary poverty had gone
down to 2% from 36% in 1936.
• Poverty had been reduced but
not eliminated
• Still much to do
• Adequate schools, hospitals
and houses were in short
supply.
• Cons
• Labour only built on the work
done by the Liberal 1904-14
and Coalition Government of
1940-45
• Only completed the Welfare
State originated by others
• Lack of experience in
government and restricted by
serious economic problems
• Some critics argued that the
government was either doing
too much for the people.
Nanny State.
• Apart from a disappointing record on housing,
Labour carried out its manifesto promises.
• By 1951, Britain had a comprehensive system of
social security, unified health and education
services and full employment.
• Many doubt whether the conservatives would
have completed the social welfare system had
they won the election.
• Attlee wanted his reforms to last, and although
criticised for not being radical enough, and he
was successful in this as the conservatives
largely accepted the welfare state.
OVERALL!