Welfare state in the United Kingdom

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This article is about the Welfare state of the United Kingdom. For the general concept, see Welfare state.
Pie chart of UK central government expenditure, 2009-10. Social Protection is shown in orange, health in red, education in grey, and personal services in light blue. The welfare state represents around two thirds of total government spending.

The Welfare State comprises expenditures by the government of the United Kingdom intended to improve health, education, employment and social security. The British system has been classified as a liberal welfare state system (Esping-Andersen 1990; Ferragina and Seeleib-Kaiser, 2011).

History[edit]

The United Kingdom, as a welfare state in the modern sense, was anticipated by the Royal Commission into the Operation of the Poor Laws 1832 which found that the old poor law (a part of the English Poor laws) was subject to widespread abuse and promoted squalor, idleness and criminality in its recipients, compared to those who received private charity. Accordingly, the qualifications for receiving aid were tightened up, forcing many recipients to either turn to private charity or accept employment.

Opinions began to be changed late in the century by the reports drawn up by men such as Seebohm Rowntree and Charles Booth into the levels of poverty in Britain. These reports indicated that in the massive industrial cities, between one-quarter and one-third of the population were living below the poverty line.

After the United Kingdom general election, 1906, the Labour Party became a serious competitor to the Liberal Party. The resulting Liberal welfare reforms laid the foundations of the modern welfare state. The reforms were greatly extended over the next forty years. Certainly, governments which had seen the wave of communist revolts after the First World War were keen to ensure that deeper reforms reduced the risk of mass social unrest. In addition, modern, complex industry had more need for a healthy and educated workforce than older industries had. Crucially, the experience of almost total state control during the Second World War had inured the population to the idea that the state might be able to solve problems in wide areas of national life. Finally, it seems likely that the social mixing involved in mass evacuation of children, and of service in the armed forces, had increased support for welfare among the middle classes.

The Beveridge Report of 1942, (which identified five "Giant Evils" in society: squalor, ignorance, want, idleness and disease) essentially recommended a national, compulsory, flat rate insurance scheme which would combine health care, unemployment and retirement benefits. Beveridge himself was careful to emphasize that unemployment benefits should be held to a subsistence level, and after six months would be conditional on work or training, so as not to encourage abuse of the system.[1] After its victory in the United Kingdom general election, 1945 the Labour Party pledged to eradicate the Giant Evils, and undertook policy measures to provide for the people of the United Kingdom "from the cradle to the grave."

Included among the laws passed were the National Assistance Act 1948, National Insurance Act 1946, and National Insurance (Industrial Injuries) Act 1946.

Results[edit]

This policy resulted in increased expenditure and a widening of what was considered to be the state's responsibility. In addition to the central services of education, health, unemployment and sickness allowances, the welfare state also included the idea of increasing redistributive taxation, increasing regulation of industry, food, and housing (better safety regulations, weights and measures controls, etc.)

The foundation of the National Health Service (NHS) did not involve building new hospitals but nationalisation of existing municipal provision and charitable foundations. The aim was not to substantially increase provision but to standardise care across the country; indeed Beveridge believed that the overall cost of medical care would decrease, as people became healthier and so needed less treatment. Instead the cost rose steadily, from £9 billion in 1948 (accounting for inflation) to £106 billion in 2011,.[2] Charges for dentures, and spectacles were introduced in 1951 by the Labour government that had founded the NHS three years earlier and prescription charges by the Conservative Government in 1952.[3] The principle of health care "free at the point of use" became a central idea of the welfare state, which later Conservative governments, critical of the Welfare State, were unable to reverse.

The classic Welfare State period lasted from approximately 1945 until the Thatcher government began to privatise public institutions in the 1980s, although many features remain today, including compulsory National Insurance contributions, and the provision of old age pensions.

The Labour Party, standing in 1945 on a programme of establishing a Welfare State, won a clear victory. However, since the 1980s the British government has begun to reduce some provisions in England: for example, free eye tests for all have now been stopped and prescription charges for drugs have constantly risen since they were first introduced in 1951. Policies differ in different countries of the United Kingdom, but the provision of a welfare state is still a basic principle of government policy in the United Kingdom today.

Expenditure[edit]

The level of public spending on the welfare state by the British Government accounted for £113.1 billion, or 16% of government spending in the fiscal year 2011, with a further 17% (£119.4 bn) being spent on the state pension and 18% (£121 bn) on health.[4] A report published in 2010 by the Government of David Cameron entitled State of the Nation compared the cost of the most expensive benefits and indicated that state pensions were overwhelmingly the largest governmental welfare expense, costing in excess of £50 billion, followed by housing benefit and council tax benefit, which combined accounted for over £20 billion.[5] Expenditure in 2011-12 on benefits included £5.1 billion paid to unemployed people and £41 billion to people on low incomes:[6][7]

Circle frame.svg

UK Government welfare expenditure 2011–12 (percent)

  State pension (46.32%)
  Housing Benefit (10.55%)
  Disability Living Allowance (7.87%)
  Pension Credit (5.06%)
  Income Support (4.31%)
  Rent rebates (3.43%)
  Attendance allowance (3.31%)
  Jobseeker's Allowance (3.06%)
  Incapacity Benefit (3.06%)
  Council Tax Benefit (3%)
  Other (13.03%)
UK Government welfare expenditure 2011–12[8]
Benefit Expenditure (£bn)
State pension £74.2
Housing Benefit £16.9
Disability Living Allowance £12.6
Pension Credit £8.1
Income Support £6.9
Rent rebates £5.5
Attendance Allowance £5.3
Jobseeker's Allowance £4.9
Incapacity Benefit £4.9
Council Tax Benefit £4.8
Other uncategorized expenditure £4.7
Employment and Support Allowance £3.6
Statutory Sick/Maternity pay £2.5
Social Fund £2.4
Carer's Allowance £1.7
Financial Assistance Scheme £1.2
TOTAL £160.2

Criticisms[edit]

Critics of the welfare state claim that, in addition to the vast expense, by relieving citizens of personal responsibility for their own welfare the government has inadvertently promoted irresponsible and immature attitudes, with the result that squalor, ignorance, and idleness are common.[9][10] In 1980, T. E. Utley, wrote that the welfare state was "an arrangement under which we all largely cease to be responsible for our own behaviour and in return become responsible for everyone else's. The temptations which this way of doing things offers to synthetic anger, fraudulent penitence, all other forms of hypocrisy and the sheer evasion of duty are infinitely too strong for fallen man".[11]

In the early 21st century, the Government of David Cameron has argued for a reduction of welfare spending in the United Kingdom as part of their programme of austerity.[12] Government ministers have argued that a growing culture of welfare dependency is perpetuating welfare spending, and claim that a cultural change is required to reduce the welfare bill.[13] Public opinion in the UK appears to support a reduction in welfare spending, however commentators have suggested that negative public perceptions are founded on exaggerated assumptions about the proportion of spending on unemployment benefit and the level of benefit fraud.[14][15]

Figures from the Department for Work and Pensions show that benefit fraud is thought to have cost taxpayers £1.2 billion during 2012-13, up 9 per cent on the year before. [16] This figure is vastly lower than what is lost through tax evasion and lower than what the state saves by underpaying benefits to which people are entitled.

Benefit underpayments save us more money than benefit fraud costs us. By the most conservative estimates, tax avoidance and tax evasion outweighs benefit fraud eightfold. But the constant target of argument – "scroungers", "benefit cheats", and more, isn't the well-heeled middle classes who knock a little off their tax return, or the high-rollers with elaborate offshore schemes. Instead, it's those at the bottom of society – for the government, perhaps, it makes it easier to sell the public swingeing cuts to the safety net that millions of families, both in and out of work, rely on to get by. For the Mail, it's easier to sell papers by buying into the easy preconceptions of their readers than bothering to challenge them. [17]

There are also widespread complaints from church groups and others that the UK welfare state does insufficient work to prevent poverty, deprivation even hunger. [18]

Historical statistics on welfare trends[edit]

Benefit rates as a per cent of industrial earnings of male manual workers aged 21 and over (1948-1971):[19]

Single pension

1948 October: 18.9

1961 April: 19.1

1962 April: 18.4

1963 May: 20.8

1964 April: 19.2

1964 October: 18.7

1965 April: 21.2

1965 October: 20.4

1966 April: 19.8

1966 October: 19.7

1967 April: 19.4

1967 October: 21.0

1968 April: 20.2

1968 October: 19.6

1969 April: 18.8

1969 November: 20.0

1970 April: 19.0

1970 November: 17.6

1971 March (est): 17.3


Supplementary benefit for single person

1948 October: 17.5

1961 April: 17.8

1962 April: 17.1

1963 May: 19.5

1964 April: 18.1

1964 October: 17.6

1965 April: 20.1

1965 October: 19.4

1966 April: 18.8

1966 October: 20.0

1967 April: 19.7

1967 October: 20.1

1968 April: 19.3

1968 October: 19.8

1969 April: 19.0

1969 November: 19.2

1970 April: 18.3

1970 November: 18.3

1971 March (est): 18.0

Family allowances for four children

1948 October: 10.9

1961 April: 9.3

1962 April: 8.9

1963 May: 8.6

1964 April: 8.0

1964 October: 7.7

1965 April: 7.4

1965 October: 7.1

1966 April: 6.9

1966 October: 6.9

1967 April: 6.8

1967 October: 7.7

1968 April: 11.9

1968 October: 12.6

1969 April: 12.1

1969 November: 11.7

1970 April: 11.3

1970 November: 10.2

1971 March (est): 10.0

Note on source, as quoted in the text: “based on statistics of weekly earnings, Employment and productivity gazette.”

Changes in National Assistance/Supplementary Benefit scale (1963-1969) (a):[20]

Real value single pensioner

May 1963: 100

March 1965: 111

November 1966: 117

October 1967: 122

November 1969: 122

Real value married man with 3 children (b)

May 1963: 100

March 1965: 112

November 1966: 110

October 1967: 115

November 1969: 115

Real take home pay for average worker

May 1963: 100

March 1965: 106

November 1966: 106

October 1967: 108

November 1969: 110

Notes

(a) As quoted in the text: “the scale is calculated using the average discretionary addition (adjusted to spread winter fuel costs throughout the year) for retirement pensioners. It does not include any allowance for rent. The price index used for the single pensioner is that in the Employment and Productivity Gazette.” (b) As quoted in the text: “it is assumed that the children are aged four, six, and eleven.”

Increases in national insurance benefits (1963-69):[21]

Real take home pay for average worker (a)

March/May 1963: 100

January/March 1965: 106

October 1967: 108

November 1969: 110

Real value of single pension (b)

March/May 1963: 100

January/March 1965: 111

October 1967: 114

November 1969: 114

Real value of unemployment benefit (man with wife and 3 children) (c)

March/May 1963: 100

January/March 1965: 110

October 1967: 113

November 1969: 116

Notes:

(a) As quoted by text: “Based on average earnings for adult male manual workers in manufacturing, allowing for income tax and national insurance contributions.

(b) As quoted by text: “Calculated on the special price index for single pensioner households published by the Employment and Productivity Gazette adjusted for housing expenditure using the housing component of the retail price index. Since a disproportionate number of pensioners have controlled tenancies, this may overstate the increase in prices.”

(c) As quoted by text: “This column is deflated by use of the retail price index.”

Social security benefits as a percentage of average earnings for last increases of various governments, 1951-79[22]

Year

Labour (1951)

Sickness/unemployment benefit a: 25.7

a plus earnings related supplement: 25.7

Retirement pensions c: 30.4

Supplementary allowance/benefits d: 30.4

Family allowance/child benefit e: 8.0

Tory (1963)

Sickness/unemployment benefit a: 33.8

a plus earnings related supplement: 33.8

Retirement pensions: 33.0

Supplementary allowance/benefits d: 31.6

Family allowance/child benefit e: 5.3

Labour (1969)

Sickness/unemployment benefit a: 32.4

a plus earnings related supplement: 52.3

Retirement pensions: 32.4

Supplementary allowance/benefits d: 31.4

Family allowance/child benefit e: 3.8

Tory (1973)

Sickness/unemployment benefit a: 29.1

a plus earnings related supplement: 46.2

Retirement pensions: 30.5

Supplementary allowance/benefits d: 28.5

Family allowance/child benefit e: 3.0

Labour (1978) Sickness/unemployment benefit a: 30.5 a plus earnings related supplement: 44.4

Retirement pensions: 37.4

Supplementary allowance/benefits d: 30.2

Family allowance/child benefit e: 3.7

a,b Man plus dependent wife. c Man plus dependent wife on his insurance. d Married couple. e For 1 child.

Social policy benefits and earnings under Labour 1963-69:[23]

Unemployment, sickness, and retirement benefits (single)

1963: 100

1969: 148

Retirement pension (married)

1963: 100

1969: 149

National assistance/supplementary benefit (married couple)

1963: 100

1969: 150

Adult male manual workers (weekly earnings)

1963: 100

1969: 154

Adult male administrative, technical, and clerical employees (weekly earnings)

1963: 100

1969: 148

Supplementary benefit rates as a proportion of gross and net income at average earnings, married couple:[24]

End of year (a)

As % of gross average earnings

1973

Ordinary rate: 28.5 Long term rate: 31.4

1974

Ordinary rate: 28.1 Long term rate: 33.6

1975

Ordinary rate: 29.8 Long term rate: 36.2

1976

Ordinary rate: 30.8 Long term rate: 37.1

1977

Ordinary rate: 32.3 Long term rate: 38.9

1978

Ordinary rate: 30.6 Long term rate: 37.8

As % of net income (b) at average earnings

1973

Ordinary rate: 37.9 Long term rate: 41.8

1974

Ordinary rate: 38.8 Long term rate: 46.5

1975

Ordinary rate: 42.4 Long term rate: 51.5

1976

Ordinary rate: 43.9 Long term rate: 52.9

1977

Ordinary rate: 44.1 Long term rate: 53.1

1978

Ordinary rate: 41.6 Long term rate: 51.4

Supplementary benefit: long term scale rate as proportion of ordinary rate (%)

Date of introduction

1973

Single: 14.0 Married couple: 10.3

1974

Single: 23.8 Married couple: 19.8

1975 (April)

Single: 25.0 Married couple: 20.4

1975 (November)

Single: 25.7 Married couple: 21.4

1976

Single: 23.6 Married couple: 20.3

1977

Single: 23.4 Married couple: 20.4

1978

Single: 28.0 Married couple: 23.5

Numbers in households dependent on supplementary benefit or with estimated incomes below SB level, 1974 and 1976 (thousands)

Pensioners (as % of total)

1974: 2,680 (52) 1976: 2,800 (44)

Under pensionable age family head or single parent

Unemployed

1974: 450 1976: 1,080

Normally in full-time work

1974: 360 1976: 890

Sick or disabled

1974: 480 1976: 280

Others

1974: 1,170 1976: 1,300

Changes in real terms in social security benefits, 1964-79 (in 1981 prices, 1951= 100):[25]

Supplementary benefits (a)

1964 146

1965 166

1966 165

1967 173

1968 173

1969 172

1970 173

1971 178

1972 187

1973 186

1974 191

1975 187

1976 189

1977 190

1978 189

1979 190

Sickness/unemployment benefit (b)

1964 176

1965 199

1966 199

1967 318

1968 318

1969 329

1970 329

1971 354

1972 356

1973 342

1974 345

1975 327

1976 323

1977 326

1978 321

1979 308

Retirement pensions (c)

1964 149

1965 168

1966 168

1967 173

1968 173

1969 172

1970 172

1971 177

1972 183

1973 191

1974 216

1975 215

1976 219

1977 221

1978 228

1979 232

Family allowance/child benefit (d)

1964 85

1965 85

1966 82

1967 80

1968 77

1969 72

1970 69

1971 80

1972 75

1973 68

1974 78

1975 69

1976 72

1977 69

1978 82

1979 102

Notes:

(a) Refers to married couple. (b) Refers to man plus dependent wife. (c) Refers to man plus wife on his insurance. After 1971 refers to recipients under 80 years old. (d) Includes family allowance and tax allowance combined for second child up to 1977, when these were unified into the child benefit.

Percentage change in social security benefits, prices, and earnings since previous updating (1974-1978):[26]

Unemployment and sickness benefit (a)

July 1974

17.0

April 1975

14.0

November 1975

13.3

November 1976

16.2

November 1977

14.0

November 1978

7.1

Retirement pension (b)

July 1974

29.0

April 1975

16.0

November 1975

14.7

November 1976

15.0

November 1977

14.4

November 1978

11.4

Prices (c)

July 1974

13.5

April 1975

17.7

November 1975

11.7

November 1976

15.0

November 1977

13.0

November 1978

8,1

Average earnings (d)

July 1974

12.9

April 1975

17.4

November 1975

10.7

November 1976

12.8

November 1977

9.6

November 1978

14.6

Total increase October 1973-1978

Unemployment and sickness benefit (a)

114.3

Retirement pension (b)

151.6

Prices (c)

109.6

Average earnings (d)

107.9

(a) Single person. (b) Single pensioner under age 80. (c) General index of retail prices. (d) Average gross weekly earnings of full time adult male manual workers. For November 1978, October 1977 to October 1978 increase used.

See also[edit]

Housing:

References[edit]

  1. ^ "The Beveridge Report and the postwar reforms". Policy Studies Institute. Retrieved 9 June 2012. 
  2. ^ "About the NHS". Department of Health. Retrieved 9 June 2012. 
  3. ^ "A brief history of health and care funding reform in England". Socialist Health Association. Retrieved 21 December 2013. 
  4. ^ "Public Spending Details for 2011". UK Public Spending. Retrieved 5 January 2013. 
  5. ^ "The cost of the most expensive benefits and tax credits relative to selected other departmental expenditure". State of the nation report: poverty, worklessness and welfare dependency in the UK. HM Government. May 2010. p. 36. Retrieved 5 January 2013. 
  6. ^ "Benefits for unemployed people". A Survey of the UK Benefit System. Institute for Fiscal Studies. November 2012. p. 16. 
  7. ^ "Benefits for people on low incomes". A Survey of the UK Benefit System. Institute for Fiscal Studies. November 2012. p. 25. 
  8. ^ Rogers,Simon; Blight, Garry (4 December 2012). "Public spending by UK government department 2011-12: an interactive guide". The Guardian. Retrieved 2 April 2013. 
  9. ^ Bartholomew, James (2013). The Welfare State We're In (3 ed.). Biteback. p. 320. ISBN 978-1849544504. 
  10. ^ Dalrymple, Theodore (2007). Our Culture, What's Left of It: The Mandarins and the Masses. Ivan R. Dee. p. 360. ISBN 978-1-56663-721-3. 
  11. ^ Peter Oborne (June 30, 2011). "Britain would be a better place if families looked after their own". The Daily Telegraph. Retrieved July 1, 2011. 
  12. ^ "David Cameron: 'Don’t complain about welfare cuts, go and find work'". 23 Jan 2012. Retrieved 5 January 2013. 
  13. ^ "Conservative conference: Welfare needs 'cultural shift'". 8 October 2012. Retrieved 5 January 2013. 
  14. ^ Grice, Andrew (4 January 2013). "Voters 'brainwashed by Tory welfare myths', shows new poll". The Independent. Retrieved 5 January 2013. 
  15. ^ "Support for benefit cuts dependent on ignorance, TUC-commissioned poll finds". TUC. Retrieved 5 January 2013. 
  16. ^ Dixon, Hayley (13 December 2013). "Majority of benefit cheats not prosecuted, official figures show". The Telegraph. Retrieved 24 February 2014. 
  17. ^ Welfare fraud is a drop in the ocean compared to tax avoidance
  18. ^ Church of England bishops demand action over hunger
  19. ^ Labour and inequality: sixteen fabian essays edited by Peter Townsend and Nicholas Bosanquet
  20. ^ Labour and inequality: sixteen fabian essays edited by Peter Townsend and Nicholas Bosanquet
  21. ^ Labour and inequality: sixteen fabian essays edited by Peter Townsend and Nicholas Bosanquet
  22. ^ The Labour Party in Crisis by Paul Whiteley
  23. ^ Taxation, Wage Bargaining and Unemployment by Isabela Mares
  24. ^ Labour and equality : a Fabian study of Labour in power, 1974-79 edited by Nick Bosanquet and Peter Townsend
  25. ^ The Labour Party in Crisis by Paul Whiteley
  26. ^ Labour and equality : a Fabian study of Labour in power, 1974-79 edited by Nick Bosanquet and Peter Townsend

Bibliography[edit]

External links[edit]