% of total welfare spending

1
of total welfare spending
When does spending on each aspect increase
most? Where does spending decrease?
2
This involved
3
Thus welfare spending continued to grow
throughout the 1960s and 1970s.
Why?

• Public expectation continued to grow more and
  more was expected from the Government in terms of
  safeguarding health, education housing, security
  in times of need.
• More and more pressure groups appeared such as
  Child Poverty Action,
• founded in 1965.

• Welfare provision became a profession Social
  Services Departments were established in all
  local authorities in 1971, and in 1974 the NHS
  was reorganised.

4

• On top of all this, the Labour Governments of
  1964-1970, and 1974-1976, under Wilson (he was
  replaced by Callaghan in 1976, who continued
  until 1979), tried to use welfare to redistribute
  wealth and target the poorest, even though this
  meant increasing use of means testing, because
  the amount of wealth created in the country was
  not growing as much as hoped for.

This became a great problem after the 1974
election when the Labour Government tried to make
a social contract with the unions. This was the
result of the way in which the unions had brought
down Heaths government, a period dominated by
the politics of confrontation. During this time
an international oil crisis, coupled with strikes
by miners and electrical engineers had led to the
declaration of a state of emergency. The social
contract proposed by the Labour Party involved
the trade off of better social services to
counter demands for higher wages. Wilson
announced the end of pay beds in NHS hospitals
and an immediate full move to comprehensive
education.
5
(No Transcript)
6
However, this did not solve the industrial
unrest. When Wilson tried to impose a 5 limit on
wage rises, there were strikes by Ford car
workers and public sector workers. As K.O Morgan
has observed Amidst overflowing rubbish bins,
closed schools and undug graves, the unions
destroyed wantonly a government which could
hardly have been gentler to them and which had
steadfastly ruled out statutory restraints on
pay.
This was why Callaghan made a stand in the Labour
Party conference in 1976. He imposed cash limits
on all services and welfare expenditure was cut
in real terms by almost 5.
7
However, after the 1979 general election, though
the Conservatives actually promised to end the
post war dependency culture, and roll back the
state, welfare expenditure rose by as much as
4 in election years.
Why?

• There were more elderly and old people requiring
  pensions and health care people were living
  longer.
• High unemployment meant increased expenditure on
  social security.
• Social services were, and are, labour intensive
  it is very difficult to make cut backs and
  increase productivity so they became relatively
  expensive.

8
Perhaps the most important reason, however, was
the popularity of state welfare. No one could
really envisage a future without them. Moreover,
the middle classes benefited as much as the
unemployed, through tax relief on mortgages, and
grants for university education for their
children.
On top of this, attempts by the Government to
bring in the private market to replace public
services, found little support amongst private
insurance companies. When Mrs Thatcher tried to
end state earnings related pensions and replace
the NHS with private insurance schemes in 1982
and 1986, private companies were unwilling to
take on people who might cost more to look after
than they had paid in.
9
Only in 1987 Supplementary Benefit was replaced
with Income Support, and additional payments were
transferred to the Social Fund, to which
claimants were expected to contribute 70 of
their grants. At the same time the power of local
government was reduced, and more power given to
smaller accountable bodies such as school
governors, hospital trusts, hospital trusts and
budget-holding GPs.
However, public spending on welfare did not
decrease. People were unwilling to give up
mortgage tax relief and grants for higher
education and occupational pensions.
Moreover, the reduction in the power of the
local authorities actually increased the power of
central government as a regulator and paymaster.
10
To what extent and in what ways did various
aspects of the Welfare State change 1951-1980?
11
Social Security.
Remember that this was no longer supposed to be
necessary everyone would be contributing to
society in some way.
More money was spent on Social Security in the
1960s than any other welfare department, and by
the mid 1960s it had overtaken defence as the
most expensive item of public expenditure. Initial
ly social security was to be dependent on
contributions but there were many disabled
people and single parent mothers who could not
make their contributions. So, means tested
benefits, which Beveridge had hoped would wither
away, actually expanded. By the mid 1970s there
were 45 different means tests, and the
complication Beveridge had hoped to eliminate was
worse than ever.
12

• Moreover, the numbers of people recorded as
  living in poverty a very difficult task to
  achieve as the definition of poverty became a
  relative concept in the mid 1950s.
• Nevertheless, the numbers living in poverty,
  whether relative or absolute, have increased
  throughout the period from 1951 to 1979.
• The chief victims are the same as in the 1880s
  and the inter-war years
• The old, often unaware or too ashamed to claim
  means tested benefits.
• Young children in large families, especially as
  the real value of Family Allowance and Child
  Benefit fell.
• The low paid, who were disqualified from claiming
  Supplementary Benefit, or the full amount of
  unemployment benefit if that exceeded what they
  had been earning before they were made
  unemployed.
• By 1988 half a million claimants were caught in
  the poverty trap, where as the incomes of the
  poorest rose, they were unable to claim means
  tested benefits, whilst paying tax meant that
  they ended up with less than they would have if
  they were unemployed.

13
This led to the creation of a special department
for Social Services within the Local Government
Department at the end of the 1960s. Directors for
Social Services were appointed within every local
authority to coordinate and oversee provision for
all personal services, from home help, mental
health, day nurseries and day care centres.
Welfare provision was expanding the problem of
poverty was not diminishing significantly, but
was the country able to finance all of this its
policy of full employment.
14
Was there any significant change to the National
Health Service?
Average life expectancy has risen as infant
mortality and infectious diseases have
declined. Expectations have risen.
However, there has been increasing doubts about
the ability of the NHS to deliver health care
efficiently.
The Guardian Thursday 17/2/05
15
The problems?

• While medical science has progressed, economic
  resources have remained scarce. It has been
  difficult to allocate resources in such a way as
  to provide the optimum health care. Bureaucracy
  and waiting lists have appeared excessive and
  morale has fallen.
• The service was dominated by consultants Bevan
  was unable to over-ride the BMA- which has led to
  what some have called a national sickness rather
  than health service, with the emphasis on
  treatment rather than prevention. In the 1940s
  Bevan and the Socialist Doctors association had
  been hoping to set up a network of health
  centres, which would try to improve health and
  awareness of the dangers to health generally, to
  reduce the incidence of the extremes.
• Some of the illnesses treated by the NHS, for
  example, have been caused by private industry,
  yet it is the tax payers who have had to foot the
  bill for treatment.

16
However, no viable alternative was devised before
1980, and the advantages gained, especially by
the middle classes have meant that it has
survived.
17
To what extent did post war governments realise
the dream of Beveridge and Keynes of full
employment to pay for their welfare commitments?

• The period from 1950 to 1970s if often seen by
  historians as a Golden Age of
• high growth (2.8 on average),
• low unemployment (2 on average between three
  and a half and four and a half hundred thousand)
• low inflation (3.8 until 1967, though it
  spiralled to 16, with the oil crisis in 1973).

This led to significant improvements in living
standards.
18

• Infant mortality halved during these years (31 to
  17 per thousand births)
• Life expectancy increased (66 to 69 for men, 71
  to 75 for women).
• Wages increased and hours of work fell,
  effectively doubling average earnings), though
  women stll lagged behind men.
• Home ownership expanded.
• More people owned cars and domestic appliances.

19
However, other countries, Britains competitors,
did even better, and there were concerns that
British industry was still not modern or diverse
enough to compete, as imports rose. There was
still full employment the public sector was
growing, and there was government support for
nationalised industries and subsidies to failing
firms to avoid unemployment..
So, governments of the 1960s began to consult
with employers and workers, setting targets for
investment and exports.
This was started by the Conservatives, who set up
the National Economic Development Council in
1962. The Labour Party took this further by
setting up the Department for Economic Affairs,
which was supposed to plan prices and incomes. A
National Board for Prices and Incomes was set up
to suggest a norm for prices and incomes, and to
investigate excessive increases. Wilson also set
up a Ministry of Technology, and encouraged firms
to join together to cut costs and coordinate
production.
20
However, this experiment with central planning
failed.

• Wilson was unable to curb the boom he had
  inherited, even though he introduced a 15 import
  tariff.
• His welfare policy, increasing pension and
  abolishing prescription charges, while at the
  same time increasing taxes on profits, led to
  devaluation, which helped in the short term,
  making British goods cheaper abroad, but which
  again did nothing to solve the problems of lack
  of modernisation and diversification.
• Restructuring, retraining and education were not
  addressed.
• Attempts to curb wages through an incomes policy
  failed because there was low unemployment , and
  the unions became stronger, culminating in
  strikes over pay that led to a state of
  emergency, and a three day week in 1972,
  precipitated by an oil crisis.

21
This was why, in 1976, after years of fruitless
struggle with the unions, Callaghan pulled the
plug from government subsidies to businesses that
were not making money.
Attempts at government planning in industry had
failed - some argue because the Labour
Governments 1945-51 should not have tried to
implement the ideas of Beveridge and Keynes -
some argue because they did not go far enough.
22
Was there a significant redistribution of wealth,
so that more people could pay for their own
insurance, health and educational needs?
Contrary to contemporary opinion of the time, no.
The post war tax system saw the burden of
taxation fall less on corporations and the
relatively rich, and more on those on or below
average incomes.
Why?

• Higher rates of taxation were reduced, whilst
  because of inflation, those on very low pay found
  themselves having to pay income tax, even though
  their wages could not buy as much.
• The shift towards flat rate taxes, such as VAT,
  first introduced 1972-3, and the community charge
  1989-90, disproportionately hit the poor.

23

• On top of this there were more and more perks for
  the better paid managers, in the form of tax
  relief for such things as company cars these
  going to people who already benefited from
  mortgage relief and university grants.

Wealth was redistributed from the top 10 to a
certain extent, but it went mainly to the next
40-50. In the 1980s the bottom 50 had only a
16 share of the total wealth of the country.
24
To what extent was education developed as a means
of empowering the poorest in society?
The Butler Education Act raised great
expectations , as the school leaving age was
raised and a MiOnistry for Education created,
that education would be geared towards the
aptitude of the students and the needs of the
country.
One of its stated aims was to bring about
equality of opportunity. What actually happened
was that everyone was given the chance to sit an
exam, which would prove how unequal children
were. Nor was it possible to identify from the
exam set exactly what the aptitude of each
student actually was. Instead children were
fitted into neat categories professions, crafts,
lowly skilled, mirroring the existing class
structure.
25
Those who benefited most were the middle classes,
who no longer had to pay the fees they once did
for grammar schools, where fee paying was now
abolished. Regional provision was also
uneven, and though all governments tried to
reassure that there was parity between the
grammar, technical and secondary modern schools,
it was clear that this was not the case. In fact,
technical schools, which should arguably have
been the most important if Britain was to create
a modern, efficient, adaptable and productive
work force, almost disappeared completely,
absorbed into grammar schools and then
comprehensives. It was assumed that technical
education would be provided in these schools it
was not. Even the Colleges of Advanced
Technologies (CATs) set from 1956. Have drifted
towards the humanities and social sciences. They
had stated in the 1960s that they would have 80
of their students studying science and
technology. In fact this never went beyond 70,
and it continues to fall.
26
The major change that has taken place has been
the move towards comprehensive education.
The first comprehensives were set up in at
Windermere in 1945, Anglesey in 1949, with the
first purpose built comprehensive in Kidbroke
Anthony Crossland, one of the chief theoreticians
of the Left, and Education Secretary in 1964 was
totally committed to the abolition of 11 exam
and of the tripartite school system.
27
However, this did not happen overnight, and by
the 1980s only 88 of pupils were educated in
comprehensive schools.
What all of this represents however, is that
despite the flaws there were far greater
educational opportunities by the end of the 1970s
than ever before. Moreover, education has led to
more working class children moving into
professional, managerial and clerical classes,
and the increasing adoption of middle class
elements of attitude and lifestyle. Studies by
A.H. Halsey and J.H. Goldthorpe have illustrated
a degree of fluidity, with upward and downward
movement, even though there is still a strong
element of self perpetuation by 1970s.
28

• During our period of study,
• the school leaving age increased twice to 15 in
  1945, and to 16 in 1972
• Educational expenditure as a of GDP has risen
  from 3 in the 1950s to 6 in the 1970s, before
  falling back to 5 in the 1980s. Educational
  expenditure overtook defence in 1969, and has
  remained ahead.
• Opportunities have expended in higher education,
  with the number of students quadrupling,
  including a higher proportion of women.

29

• However,
• The proportion of working class students in
  higher education remained low at roughly 3.1.
• The increase in the number of graduates has led
  to lower expectations of employment, and with
  huge increases in arts students, a shortage in
  essential technological fields.
• The system of reward for high achievement, rather
  than encouragement for the broad majority has
  left Britain behind her industrial neighbours,
  where education has consistently been given a
  higher priority and status.

30
Has housing policy contributed to a higher
standard of living.
Remember that the aim was to provide more good
quality housing in a well planned environment, at
a reasonable price.

• Certainly more homes were built, and by 1988 66
  of people owned or were buying their own homes.
• By 1986 the housing shortage had been reduced to
  0.5 million, renovation rather than demolition
  was increasingly encouraged.
• However
• The number of officially homeless families
  increased, partly because some people owned two
  homes there were 40,000 homeless families in
  1989.
• More and more people were sleeping rough.
• The quality of homes provided in the early 1960s
  was often very poor concrete tower blocks,
  which did not last long, but which destroyed
  community life.

31
The main beneficiaries have been owner occupiers,
who have been encouraged by government grants in
the form of tax relief on mortgages. Council
house rents increased, though help was available
through means tested benefits.
32
The historian Rodney Lowe points out that there
were 3 driving forces behind the creation of the
welfare state

• The need for greater standardisation of public
  services.
• The desire to use the resources of the country,
  including labour more effectively, removing
  potentially harmful market forces which can
  misallocate resources and underprovide services
  which are in the general interest of the whole
  country.
• The desire for greater equality of treatment by
  the government, of opportunity, of outcome.
• The desirability of state support and
  intervention was accepted by all parties until
  1976, when the Welfare State appeared to be in
  crisis.

33
Since then a number of debates have emerged.
How effective has the Welfare State been?

• Marxists have argued that the development of the
  welfare state was marred by the ulterior motives
  behind it.
• They believe that the changes were designed not
  to foster equality and justice, but to create
• Social capital a healthy and trained workforce
  that would make more profits for those at the
  top
• Social expenses giving capitalism a human face
  by removing some of the worst iniquities.
• Central to this idea is the debate over whether
  Labour betrayed or advanced its supporters
  interests.

The New Right has questioned the efficiency and
objectives of the state. They believe that only
the free market can respond to the needs of
consumers and that state welfare simply creates a
dependency culture institutionalised proletariat
hanging on ..etc, and restricts freedom, whilst
building up a huge bureacracy.
Feminists have argued that the Welfare State has
made women more dependent on men and entrenched
the traditional role of women.