perception that the welfare state is dying, however, and you make it easier to lop off further chunks without anyone asking where they went.
And then it just seemed fun. The story of the welfare state is a great adventure – a story worth telling, particularly when all its fiftieth anniversaries were looming.
And so in the end the book got written. It did so only because Andreas Whittam-Smith was generous enough to provide in 1993 a six-month sabbatical from the Independent. In turn I was lucky enough to be able to spend that time at the Policy Studies Institute as a Distinguished Visiting Fellow, funded by money from the Joseph Rowntree Foundation. The PSI’s monastic cells, learned but practical inmates and good library made it an ideal place to be. These, along with what is owed to Peter Hennessy for donating the idea, are my primary debts. There are many other listed in the Preface.
The finished book may not be what any of those who helped so much envisaged. Nor does it answer all the challenges given as motives for writing it. What it does represent is a perhaps over-ambitious stab at twisting the kaleidoscope of the post-war history of Britain. In most versions, the welfare state, certainly after 1945–51, plays only a walk-on part. This one attempts to put the welfare state centre stage while allowing economic, political and even cultural events to play the walk-on roles. They are, however, there and they are crucial to the story, because they do so much to define and limit what can be done. The welfare state, after all, is itself a key cog in the economy. Too much discussion of social policy, too much measurement of its success and failure, appears at times to take place in a vacuum, untainted by the realities of the world at the time.
One theme which repeatedly emerges is the law of unintended consequences: that decisions taken for the best of motives will often go awry. This applies to governments seeking expansion, for example by providing larger subsidies to high-rise flats to produce more housing. But it applies equally to governments trying to draw back: for example, by withholding benefits from sixteen- and seventeen-year-olds because they should be in education, work or training, not on the dole. It is a lesson the right would do as well to remember as the left.
One issue should perhaps be dealt with here because it stands outside the narrative. In the mid-1980s, Correlli Barnett’s brilliant and detailed polemic The Audit of War helped influence Tory hostility to the welfare state. Barnett saw the ‘New Jerusalem’ of the welfare state itself, along with the historic and continuing failure to organise high-grade technical education, as the twin causes of Britain’s relative economic decline. His thesis has been widely debated elsewhere and by others far better informed than I. But while the second half of his argument has force, the first seems overstated. Other Western countries also developed modern and much more extensive welfare states after the Second World War, most ended up spending appreciably higher shares of their income on them than Britain did – and almost all achieved higher growth rates.2
Britain, physically less scarred by war, had laid the foundations of its welfare state earlier. But to argue that it crippled the economy seems, in Sir Alec Cairncross’s phrase, ‘badly out of focus’. Cairncross calculates that spending on education, health, housing, pensions and unemployment benefit reached about £1.5 billion in 1950 – half as much again in real terms as before the war. But defence expenditure never ran below £750 million after 1945, roughly twice as much in real terms as in 1938, and reached more than £1400 million again in 1952. Food subsidies, which are arguably a part of the welfare state but are also an economic regulator put in place to keep prices down, cost approaching £500 million in 1949 – more than any single social service.3 Almost £2.5 billion in cash compensation or commitments to interest-bearing stock went through the national accounts after 1945 to pay for nationalisation.4 To argue that any one of those caused Britain’s relative post-war decline would be as logical or illogical as to argue that the welfare state did. The causes are complex, not singular or bipolar. They involve such measurables as the loss of markets and capital base during the war, and Britain’s post-Imperial role after 1945 as the world’s third largest military power and international policeman. They equally involve such immeasurables as to how far the country felt it needed to strive, having just won the war, and why labour relations, and hence productivity, were so bad. Indeed, to argue that the welfare state should not have been established, or should not have been established yet, is to ignore political reality. A country which had covered large tracts of East Anglia in concrete to launch bomber fleets, and the south coast in Nissen huts to launch the largest invasion the world had ever seen, could hardly turn round to its citizenry and say it was unable to organise a national health service; that it couldn’t house its people; or that it would not invest in education. Furthermore, compared to pre-war levels, the big surge in welfare state spending started in the late 1950s, not in the immediate post-war period which Barnett rightly identifies as one of the critical periods when Britain failed to invest in its industrial base. But that begins to jump ahead in the story.
Before we start, a word about definitions is needed. There is no agreement about what constitutes ‘the welfare state’. Even the origin of the phrase is the subject of learned dispute.5 It was popularised in Britain in 1941 by an Archbishop of York and only adopted by Clem Attlee in time for the 1950 election. The Oxford English Dictionary used to be a little slow, but the phrase only reached the dictionary’s addenda in 1955 and with a definition we would now use in 1964.6 At times its boundaries have been drawn so tightly as to exclude most of the social security budget, limiting it to what the Americans call ‘welfare’: payments to the poor plus what we, in the national accounts, still call ‘welfare foods’. At others, as in Pauline Gregg’s 1967 book The Welfare State, it has been drawn to embrace virtually the whole of the economic and social history of Britain from 1945, including nationalisation, the neo-corporatism of NEDO, and beer and sandwiches at Number Ten – the aspects of Britain as a welfare state that Baroness Thatcher plainly did want to roll back in 1979, and over which she was largely successful.
The phrase also suffers the drawback of being static, as though ‘the welfare state’ were a perfect work, handed down in tablets of stone in 1945, never to be tampered with. Even to use the phrase is to set artificial frames. As an entity it does not exist – it is a collection of services and policies and ideas and taxes, including tax reliefs, whose boundaries expand and contract over time. It can never, at any one moment, be said to have been assembled or dismantled. Beveridge hated the phrase and refused to use it, disliking its ‘Santa Claus’ and ‘brave new world’ connotations.7 I would rather not have had to.
For this book it is defined in the strictly limited sense of representing the antonyms to the ‘five giants on the road of reconstruction’ which Beveridge identified, the policies and services created to combat Want, Disease, Ignorance, Squalor and Idleness. Even here, boundary problems proliferate. Is legal aid part of the welfare state or not? Is planning, given that the New Towns clearly were? Is training, given that much of it has always been employer-funded, and yet it is a subject closely linked to education and one in which governments inevitably get involved?
The imperfect solution to these quandaries has been to be deliberately eclectic and to write about what most interests me. This decision extends to the book’s coverage of the mainstream services of health, education, social security, housing, social services, and, in lesser detail, employment policy. Thus it is possible to read The Five Giants and scarcely know that nurses exist or that Commonwealth immigration, which greatly affected the welfare state and was greatly affected by it, took place. The development of family planning – a profoundly controversial subject at the time – rates only a sentence or two. Social work is covered, but sketchily, it being one of those subjects where if you scratch too far below the surface you fall into an extremely large hole. The book distorts by omission. Welfare foods and food subsidies which at times consumed large sums of taxpayers’ money are barely mentioned; nor is the tobacco concession of two shillings and fourpence a week that, up to 1957, went to those pensioners who were prepared to swear that they smoked, in order to compensate them for a hike in tobacco tax in the 1940s. School examinations are only touched on. By no means all changes to benefits or housing subsidies have been charted, and training receives the lightest of looks. The list could go on. The excuse is twofold. First, even in a book this size, not everything can go in. As one former permanent secretary put it: ‘You