, Research Paper
The Welfare State in the United Kingdom.
The United Kingdom is a Welfare State. In a Welfare State, the system of government enables the state to protect and promote the economic and social well-being of all its citizens. The basic objectives of a Welfare State is to foment the principles of equality of opportunity, non-discriminatory access to the wealth of the state and the state responsibility towards those members of the society who are unable to care for themselves or attain a minimum standard of living. In the United Kingdom, the basic idea of the British Welfare State has been articulated as the desire to care for all people resident in the United Kingdom “from the cradle to the grave”.
The main objectives have been traditionally defined as the eradication of “want, disease, ignorance, squalor and idleness”. Underlying these principles and objectives is the social consensus that it is preferable to live in a state in which all people in need are cared for by the state rather than in a community of people some of whom are poor, ill, hungry or destitute.
In order to meet these objectives, the members of the society collectively agree to contribute to a fund of money to assist the less advantaged members of the community. In this way, the responsibility for keeping all people in the society fed, clothed and healthy is the State’s. It is never the sole responsibility of any individual. In the perception of modern democracies, many of which are Welfare States, the model state is one in which there is no poverty and in which all people can achieve a comfortable standard of living irrespective of their health, social standing or their physical or intellectual abilities. The British Welfare State as now exists in the United Kingdom dates from 1945, that is, from the end of the Second World War (1939-1945).
The Welfare State was introduced by the Conservative government which, under the leadership of Winston Churchill, passed the Family Allowance Act. This Act, together with many others concerning social welfare, had first been proposed in the Beveridge Report which had been published three years previously, in 1942.Beveridge was born in Rangpur, India. He was the son of a British civil servant and was educated at Balliol College, Oxford. He became interested in unemployment in 1903 and in Unemployment: A Problem of Industry (1909), he argued that unemployment was caused by the way in which industry was organised. Beveridge was strongly influenced by the thinking of John Maynard Keynes (1883-1946), the English economist. Keynesian economics argued that economic recessions can be overcome by governmental policies aimed at full employment.
Keynesian economics – if the working population was paid more, then it would have more money to buy more which would, in turn, generate greater demand on industry and thereby greater economic wealth with the result that more jobs would be provided to meet this demand.
This philosophy has been put into practice by many governments across the world. The drawback is that it causes inflation. When workers are paid more, they spend more. When workers spend more, product demand increases. When product demand increases, prices rise. When prices rise, workers ask for more money in order to consume more. In other words, the value of money depreciates. According to modern economic thinking, inflation must be reduced to zero.
In Full Employment in a Free Society (1944), Beveridge demonstrated the influence of Keynesian economics in his thinking. At this time, too, he was invited by the British government to design the British Welfare State. The resulting Beveridge Report outlined a comprehensive social security scheme, The Beveridge Report
A fundamental feature of the welfare state is social insurance, that is, insurance usually financed by compulsory contributions which is intended to provide benefits to persons and families in greatest need. The Beveridge Report presented the plan to form a system of state insurance in the United Kingdom whereby all working men and women paid a contribution into a national fund from which they received services and financial support whenever required as of right. The plan also provided for child allowances, family allowances and a national health service. Beveridge himself said in 1942:
“The object of government in peace and in war is not the glory of rulers or of races, but the happiness of the common man.” (quoted in S. Williams, Politics is for People, p. 17.)
It is in this altruistic spirit that Beveridge worked and with which the Beveridge Report was drawn up. However, there was an underlying, less altruistic, political reason for the creation of the welfare state in the United Kingdom. Following the Second World War, politicians saw the whole exercise of introducing the welfare state into the United Kingdom as a means of raising public morale following the war effort. It became politically expedient that the British people should be compensated for their sacrifice during the six years of war and should have a better quality of life to look forward to after the cessation of hostilities. Two major historians comment on this:
“There existed, so to speak, an implied contract between Government and the people; the people refused none of the sacrifices that the Government demanded from them for winning the war; in return, they expected that the Government should show imagination and seriousness in preparing for the restoration and improvement of the nation’s well-being when the war had been won.” (Hancock, W.K. and Gowing, M.M., British War Economy, 1975)
But although the welfare state was perceived by the politicians as a kind of reward for the British people in general, the welfare state created had some fundamental flaws. The calculations for the welfare state were presented in Beveridge’s Social Insurance and Allied Services which was published in 1942. This document served as a blueprint for the benefit calculations of the welfare state. Beveridge’s calculations placed the emphasis squarely on the word “minimum”. In their enthusiasm which derived from their desperate need to introduce the welfare state, politicians overlooked this point, which had been emphasised in the Report nor in the propoganda supporting it. Beveridge himself asserted that insurance benefits would have to guarantee a minimum standard of living. However, in the event, Beveridge’s proposal for a minimum income level was below that set in 1936 by the Rowntree Commission. Following the war, Beveridge’s proposals were greeted with great public acclaim and enthusiasm, whereas in fact the British public found themselves celebrating minimum income levels of about 10 years earlier.
In short, the government’s proposals were far from being generous and poverty has continued to be a social problem in the United Kingdom until today as a result. Another negative result of Beveridge’s minimalist calculations is that, by using the 1936 Rowntree standard for calculating the benefit rates for the new welfare state at the end of the war, the relative cost of child care was severely underestimated. The result was that poor households with children receive less income per person than do married couples with no children who are dependent on state assistance. For this reason, the poverty of dependent families with children is greatly increased relatively. This is the case even today, although families with children do get about ?7.50 per child per week until they are 16 years old.
Soon after its introduction, the welfare state was reformed.
Three major reforms to social welfare were implemented:
1. Introduction of the National Health Service
2. Payment of child allowances
3. Maintenance of full employment (Beveridge had budgeted for an unemployment rate of 8,5%.)
Unemployment and other benefit reforms were built on 4 key principles:
1. There should be a universal, flat-rate benefit.
2. The benefit should be paid at an adequate subsistence level.
3. The range of benefits should cover all types of want.
4. Benefits should be paid for as long as the want lasts.
In respect of unemployment benefits, Beveridge recommended that:
“Any person exhausting his claim … will be able to continue to draw unemployment benefit without a means test, subject to attendance, as required, at a work or training centre.”
Beveridge realized that prolonged periods of unemployment and disability had two consequences for most claimants:
1. A claimant’s income needs “tend to increase rather than decrease” as time goes by.
2. measures “other than the provision of income become increasingly necessary, to prevent deterioration in morale and to encourage recovery.”
Beveridge believed that benefits should be paid for as long as the need lasts if poverty is to be prevented. This presupposes the premise that the eradication of poverty enhances the quality of life for all members of the community. As stated at the outset, the basic objectives of the welfare state is the eradication of want, disease, ignorance, squalor and idleness. Has this been achieved?
1. Unemployment benefits, child and family allowances and National Assistance payments have helped prevent widespread poverty in the United Kingdom. (1995: 32% of the UK revenue is spent on social security benefits)
2. The National Health Service provides hospitals, clinics and GP practices for all residents in the United Kingdom. In recent years, the NHS has become over-bureaucratized. The top-heavy administration of the NHS has proved a financial burden to the service. A system of pay-beds has been introduced into some hospitals, thereby privatising part of the service. But this is insufficient and the NHS is undergoing reforms at present. Particularly costly is the care of old people who make up an increasing proportion of the population. There has been some attempt to encourage hospitals to privatise and to encourage people to contribute to private health insurance schemes. (1995: 13% of the UK revenue is spent on the NHS)
The NHS is complemented by an extensive system of social welfare. Social workers care for the elderly, the disabled, the homeless and the mentally incapacitated.
3. Since 1944, the United KIngdom has taken responsibility for the education of its citizens up to the age of 16 in Primary and Secondary schools. This education is provided free of charge. (1995: 12% of the UK revenue is spent on education and science)
4. After the Second World War, the government began housing programmes throughout the country. Financed and managed by local town councils, council housing estates sprang up on the peripheries of towns across the United Kingdom. The estates were made up of rows of semi-detached, two-storey houses with front and back gardens. These houses were rented at a low rate to working-class tenants. As demand exceeded supply, lists were drawn up of families needing council houses. In the 1980s, Margaret Thatcher won grateful thanks from many working-class council house tenants when her government made it possible for long-standing tenants to buy their council house from the local council at a very reasonable price and with low interest loans. Today, many council estates are well-established and virtually indistinguishable from the middle- and upper middle-class housing estates.
5. Unemployment in the United Kingdom in 1993 was 10.25% of the active working population (approx. 28 million). This level has been decreasing steadily in recent years. Today, the United Kingdom has one of the lowest unemoployment rates in the European Union. The number is approaching Beveridge’s calculation for full-employment of 8,5%.
Although very comprehensive, the British welfare state has constantly fallen short of its main objectives. In the UK, the failings and weaknesses of the welfare state are compensated in part by charities, of which there are a very large number, A few examples are Oxfam, Save the Children, Shelter, the Lifeboat Association, the RSPCA, the RSPCC, Help the Aged, Dr. Barnado’s etc.. So it cannot be argued that it was a total success.
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