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

early period provisions for the poor:

• the Victorian poor laws

• Liberal welfare reforms of the 20th century

What was Unemployment insurance early period

1911 - provided 7 shillling a week to some unemployed men for up too 15 weeks a year

Covered 10% of British men

Which women were covered by unemployment benefits?

• Working women and wives of working men

• Maternity allowance

What did the Unemployment Insurance Act 1920 do?

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

• Benefits increased to 75p for unemployed men (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

• Popular desire to support ex soldiers

What did The national economy act 1931 do?

• 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

• felt in most deprived areas Tyneside/South Wales as most were short time workers

What did The national economy act 1931 change about the system?

Benefits could only be claimed for 6 months - then reapply

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

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

What did the Unemployment act 1934 do?

Reversed 10% cut in benefits for short term unemployed - after 6 months then long term unemployed 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

Squalor, ignorance, want, idleness and disease

What did the beveridge report want?

• universal benefits

• Flat rate of contributions 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

• Improved status of non-working mothers as gave independent income

What did the National Insurance Act 1946 do?

• 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

Which 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

What did The Industrial Injuries Act 1946 do? Why was it introduced?

• 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

What did the National Assistance Act 1948 do?

• offer welfare to those not covered by NI

• The homeless, disabled, impoverished pensioners and unmarried mothers

• Introduced centralised National Assistance 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

3% 4%

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

Heath’s govt 1970

• (Selsdon meeting break from economic consensus)

• Heath would increase spending on welfare stare and pensions

What did the National Insurance Act 1970 do?

• pensions to 100,000 more people

• attendance allowance for people needing long-term care

• Established invalidity benefit

• Increased the child allowance

• Rent subsidies for low income families in private accommodation

Keith Joseph MP Cons

• 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 cons argued that welfare = dependency culture - promoted economic decline - perpetuated relative poverty

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