theme 2: creating a welfare state - 2a provision of healthcare

1918 government provision for the poor:

• the Victorian poor laws

• Liberal welfare reforms of the 20th century

Unemployment insurance

Pre war liberal govt introduced 1911 - provided 7 shillling a week to some unemployed men for up too 15 weeks a year

Covered 10% of British men

Were women covered by unemployment benefits?

• Workeing women and wives of working men

• Maternity allowance

Unemployment Insurance Act 1920

• national insurance was extended from 4mill workers in 1919 to 11.4mill 1921

• Benefits increased to 75p for unemployed men and 60p for women. (Still low - low paid workers earned £3 a week)

Was the 1920 unemployment insurance act means tested?

No - it created a state funded dole

The extension of state spending was justified by

• the need to support the high unemployment

• Fears that extreme and widespread poverty might lead to revolution like 1917 Russia

• Popular desire to support ec soldiers

The national economy act 1931:

• introduced a means test for unemployment benefits to limit the overall benefits bill

• Disqualified short time workers - meant full unemployment was better then part time work - poverty trap

• Impact felt in most deprived areas Tyneside and South Wales were most workers had reduced hours

What did The national economy act 1931 change about the system

Benefits could only be claimed for 6 months - then people would need to reapply

Transitional payments - had to register at labour exchange, couldn’t have any savings or valuables to receive payments

Consequences of the The national economy act 1931:

Unemployed parents with working children would lose benefits if they lived together

Forced some children of working age to leave home - the single most unpopular legislation passed by Nat Govt

Poor protests in London

Unemployment act 1934

Reversed 10% cut in benefits for short term unemployed - after 6 months long term unemployed could apply for further benefits - payments were made at a lower rate than 1930

Results of The Unemployment Act 1934

• 300,000 people demonstrated in south wales

• January 1935 govt introduced ‘standstill regulations’ which suspended the cuts

• Popular pressure protected welfare provisions in 1930s

Unemployment by 1939

• worst of depression was over - unemployment dropped sharply

• 3 million in 1933 to 1.4mill in 1939

The Beveridge report 1942 - 5 evils S,I,W,I,D

Squalor, ignorance, want, idleness and disease

What did the beveridge report want

• universal benefits - rejected means testing

• Flat rate of constitutions from all earners for welfare

Reactions to the Beveridge Report

• extremely popular

• Sold several hundred thousand copies

• Used a propaganda for British troops over seas

• Popular in newspapers

Family allowance act 1945

• created child benefits

• From late 1965 gave 5 shillings a week for each child excluding the eldest

• Payable to the mother rather than the father

• Improved status of non-working mothers as they had independent income

National Insurance Act 1946

• levied a 25p weekly charge on all wages

• Made unemployment and sickness benefits available to all workers

• State pension to all men over 65 and women over 60 - pensions were £1.30 a week and £2.10 for a married couple

What act abolished means testing

The National Insurance Act 1946

Problem with the NIA 1946

Rich and poor paid the same into the scheme - poor paid a higher % of income

The Industrial Injuries Act 1946

• extended welfare by giving workers compensation for accidents in the workplace

• Paid by National insurance fund

• 2,425 people killed at work a year in 1940s

• Mining accounts for ¼ deaths and injuries

National Assistance Act 1948

• offers welfare to those not covered by national insurance

• The homeless, disabled, impoverished pensioners and unmarried mothers

• Abolished Public Assistance Committee and replaced with centralised National Assitance Board

• Delegated social welfare to local authorities - finding housing, encouraging voluntary groups etc

When was the NHS created

July 1946

During 1950s the cost of social welfare increased from —— to —- of GDP with pensions taking a further ——

3% 4% 3%

In 1965 the Child Poverty Action Group claimed that —— children lived in poverty

720,000

Economic decline 1964-79

• 1964 Gen Elect - Labour promised to increase welfare spending

• Elected - found £800 million budget deficit

• Wilson’s advisors recommended he cut welfare benefits

• Successive economic crises - increasing taxation to pay for welfare

• Resentment of cost of welfare - 1966 welfare cost was 5% of GDP

Healths govt 1970

• (Selsdon meeting break form economic consensus)

• Health would increase spending on welfare stare and pensions

National Insurance Act 1970

• gave pensions to 100,000 more people

• Introduced attendance allowance for people who needed long-term care

• Established invalidity benefit

• Increased the child allowance given to mothers

• Made rent subsidies for low income families in private accommodation

Keith Joseph 1918-94

• conservative MP

• Concerned with welfare of Britain’s poor

• 1974 views shifted away from welfare

• Believed that the welfare state perpetuated poverty

• Cutting welfare would help poor people escape of cycle of poverty

Belief of Institute of Economic Affairs (think tank)

Welfare spending led to economic inefficiency - govt spent less efficiently that a private company would - cutting spending would make Britain richer

Welfare and inflation:

welfare required huge govt borrowing - increased money in the economy without new goods

Welfare and dependency

Radical conservatives argued that welfare created a dependency culture - promoted economic decline - perpetuated relative poverty - welfare created a class with no aspirations or self-respect

End of consensus

Heaths failure to win 1974 general election led to him being replaced by Thatcher as party leader.

1976 IMF cuts

IMF insisted the govt cut spending in return for a $4billion loan.

Govt made £2.5billion in cuts - housing and education budgets were cut - pensions and other benefits were widely unaffected