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 of the United Kingdom 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.[1][2]


In 1984 historian Derek Fraser told the British story in a nutshell. The welfare state, he said:[3]

germinated in the social thought of late Victorian liberalism, reached its infancy in the collectivism of the pre-and post-Great War statism, matured in the universalism of the 1940s and flowered in full bloom in the consensus and affluence of the 1950s and 1960s. By the 1970s it was in decline, like the faded rose of autumn. Both UK and US governments are pursuing in the 1980s monetarist policies inimical to welfare.

The 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 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.

Liberal reforms[edit]

After the 1906 general election, the Labour Party became a serious competitor to the Liberal Party.[citation needed] The resulting Liberal welfare reforms laid the foundations of the modern welfare state.[4] The reforms were greatly extended over the next forty years.[4] 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.[citation needed] 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.[5] 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.[citation needed] The Liberal government of 1906-1914 implemented welfare policies concerning three main groups in society: the old, the young and working people.[4]

The young
  • In 1906 local authorities were allowed to provide free school meals.[6]
  • The Children and Young Persons Act 1908 introduced a set of regulations that became known as the Children's Charter. This imposed severe punishments for neglecting or treating children cruelly. It was made illegal to sell cigarettes to children or send them out begging. Separate juvenile courts were set up, which sent children convicted of a crime to borstals (a forerunner to modern youth detention centres), instead of prison.[7]
The old
  • In 1908 pensions were introduced for the over 70s.[8]

Working people
  • In 1909 Labour Exchanges were set up to help unemployed people find work.[9]
  • The National Insurance Act 1911 was passed, ensuring free medical treatment, and sick pay of 10 shillings a week for 26 weeks.[4] An estimated 13 million workers came to be compulsorily covered under this scheme.[10]

Beveridge Report and Labour[edit]

The aftermath of the First World War boosted demands for social reform, and led to a permanent increase in the role of the state in British society. The end of the war also brought a slump, particularly in northern industrial towns, that deepened into the Great Depression by the 1930s.[5]

During the war, the government became much more involved in people's lives via governmental organisation of the rationing of foodstuffs, clothing and fuel and extra milk and meals being given to expectant mothers and children.[5] The wartime coalition government also committed itself to full employment through Keynesian policies, free universal secondary education, and the introduction of family allowances.[11] Many people welcomed this government intervention and wanted it to go further.[5]

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.[12] That was however predicated on the concept of the "maintenance of employment" which meant ‘it should be possible to make unemployment of any individual for more than 26 weeks continuously a rare thing in normal times’ [12] and recognised that the imposition of a training condition would be impractical if the unemployed were numbered by the million.[12] After its victory in the 1945 general election, 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.


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.

However, instead of falling, the cost of the NHS has risen by 4% annually on average due to an ageing population,[13] leading to a reduction in provision. 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.[14] In 1988, free eye tests for all were stopped, although they are now free for the over-60s.[15]

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. The principle of health care "free at the point of use" became a central idea of the welfare state, which later Conservative governments, although critical of some aspects of the Welfare State, did not reverse.


In the financial year 2014/15, state pensions were overwhelmingly the largest governmental welfare expense, costing £86.5 billion, followed by housing benefit, which accounted for over £20 billion.[16] Expenditure in 2011-12 on benefits included £5.1 billion paid to unemployed people and £41 billion to people on low incomes:[17][18]

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 (10.03%)
UK Government welfare expenditure 2014–15[16]
Benefit Expenditure (£bn)
State pension 86.5
Tax credits (Working tax credits and Child tax credits) 29.7
Housing Benefit 23.5
Disability Living Allowance 15.4
Incapacity benefits 14.1
Child benefit 11.6
Pension Credit 6.6
Attendance Allowance 5.4
Jobseeker's allowance 3.1
Income Support 2.6
Maternity and paternity pay 2.4
Carer's allowance 2.3
Winter fuel payments 2.1
War pensions 0.8
Universal credit 0.1
Other 5.9
TOTAL 213.9


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.[19][20] 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".[21]

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.[22] 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.[23] 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.[24][25]

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.[26] This is lower than the £1.5bn of benefit underpayment due to error.[27]

There are also widespread complaints from church groups and others that the UK welfare state does insufficient work to prevent hunger.[28]

Historical statistics on welfare trends[edit]

Benefit rates as a percentage of industrial earnings[edit]

Benefit rates as a per cent of industrial earnings of male manual workers aged 21 and over (1948-1971)[29]
Year (month) Single pension Supplementary Benefit for single person Family Allowance for four children
1948 (October) 18.9 17.5 10.9
1961 (April) 19.1 17.8 9.3
1962 (April) 18.4 17.1 8.9
1963 (May) 20.8 19.5 8.6
1964 (April) 19.2 18.1 8.0
1964 (October) 18.7 17.6 7.7
1965 (April) 21.2 20.1 7.4
1965 (October) 20.4 19.4 7.1
1966 (April) 19.8 18.8 6.9
1966 (October) 19.7 20.0 6.9
1967 (April) 19.4 19.7 6.8
1967 (October) 21.0 20.1 7.7
1968 (April) 20.2 19.3 11.9
1968 (October) 19.6 19.8 12.6
1969 (April) 18.8 19.3 12.1
1969 (November) 20.0 19.2 11.7
1970 (April) 19.0 18.3 11.3
1970 (November) 17.6 18.3 10.2
1971 (March) (est.) 17.3 18.0 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[edit]

Changes in National Assistance/Supplementary Benefit scale (1963-1969) (a)[29]
Date of change Real value single pensioner Real value married man with three children (b) Real take home pay for average worker
May 1963 100 100 100
March 1965 111 112 106
November 1966 117 110 106
October 1967 122 115 108
November 1969 122 115 110
  • (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[edit]

Increases in National Insurance benefits (1963–69):[29]
Date of increase Real take home pay for average worker (a) Real value of single pension (b) Real value of unemployment benefit
(man with wife and three children) (c)
March/May 1963 100 100 100
January/March 1965 106 111 110
October 1967 108 114 113
November 1969 110 114 116
  • (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) This column is deflated by use of the Retail Price Index

Social security benefits as a percentage of average earnings[edit]

Social security benefits as a percentage of average earnings for last increases of various governments, 1951-79[30]
Government Sickness/unemployment benefit a a plus earnings related supplement Retirement pensions c Supplementary allowance/benefits d Family allowance/child benefit e
Labour (1951) 25.7 25.7 30.4 30.4 8.0
Conservative (1963) 33.8 33.8 33.0 31.6 5.3
Labour (1969) 32.4 52.3 32.4 31.4 3.8
Conservative (1973) 29.1 46.2 30.5 28.5 3.0
Labour (1978) 30.5 44.4 37.4 30.2 3.7
  • a,b Man plus dependent wife.
  • c Man plus dependent wife on his insurance.
  • d Married couple.
  • e For one child.

Social policy benefits and earnings under the Labour Government 1963-69[edit]

Social policy benefits and earnings under Labour 1963-69:[31]
Year Unemployment, sickness, and retirement benefits (single) Retirement pension (married) National assistance/supplementary benefit (married couple) Adult male manual workers (weekly earnings) Adult male administrative, technical, and clerical employees (weekly earnings)
1963 100 100 100 100 100
1969 148 149 150 154 148

Supplementary benefits rates as a proportion of income[edit]

Supplementary benefit rates as a proportion of gross and net income at average earnings, married couple:[32]
Year End of year (a)
As % of gross average earnings
Ordinary rate Long term rate
1973 28.5 31.4
1974 28.1 33.6
1975 29.8 36.2
1976 30.8 37.1
1977 32.3 38.9
1978 30.6 37.8
As % of net income (b) at average earnings
Ordinary rate Long term rate
1973 37.9 41.8
1974 38.8 46.5
1975 42.4 51.5
1976 43.9 52.9
1977 44.1 53.1
1978 41.6 51.4
Supplementary benefit: long term scale rate as proportion of ordinary rate (%)
Date of introduction Single Married couple
1973 14.0 10.3
1974 23.8 19.8
1975 (April) 25.0 20.4
1975 (November) 25.7 21.4
1976 23.6 20.3
1977 23.4 20.4
1978 28.0 23.5

Households dependent on Supplementary Benefit[edit]

Numbers in households dependent on supplementary benefit or with estimated incomes below SB level, 1974 and 1976 (thousands)
Year Pensioners Under pensionable age family head or single parent
(as % of total) Unemployed Normally in full-time work Sick or disabled Others
1974 2,680 (52%) 450 360 480 1,170
1976 2,800 (44%) 1,080 890 280 1,300

Changes in real terms in social security benefits[edit]

Changes in real terms in social security benefits, 1964-79 (in 1981 prices, 1951= 100):[30]
Year Supplementary benefits (a) Sickness/unemployment benefit (b) Retirement pensions (c) Family allowance/child benefit (d)
1964 146 176 149 85
1965 166 199 168 85
1966 165 199 168 82
1967 173 318 173 80
1968 173 318 173 77
1969 172 329 172 72
1970 173 329 172 69
1971 178 354 177 80
1972 187 356 183 75
1973 186 342 191 68
1974 191 345 216 78
1975 187 327 215 69
1976 189 323 219 72
1977 190 326 221 69
1978 189 321 228 82
1979 190 308 232 102
  • (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[edit]

Percentage change in social security benefits, prices, and earnings since previous updating (1974-1978):[32]
Date Unemployment and sickness benefit (a) Retirement pension (b) Prices (c) Average earnings (d)
July 1974 17.0 29.0 13.5 12.9
April 1975 14.0 16.0 17.7 17.4
November 1975 13.3 14.7 11.7 10.7
November 1976 16.2 15.0 15.0 12.8
November 1977 14.0 14.4 13.0 9.6
November 1978 7.1 11.4 8.1 14.6
Total increase October 1973–1978 114.3 151.6 109.6 107.9
  • (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.

Unemployment and sickness benefits as a percentage of income[edit]

Unemployment or sickness benefits as percentage of net income (a) at average earnings (b):[32]
Year Single person Married couple Married couple with two children
Excl. ERS Inc. ERS (c) Excl. ERS Inc. ERS (c) Excl. ERS Inc. ERS (c)
1965 27.0 27.0 41.2 41.2 49.3 49.3
1970 25.0 53.3 38.4 65.2
1973 24.8 48.4 38.7 61.5
1974 25.6 48.6 39.5 61.6
1975 24.5 45.9 38.0 58.4
1976 24.9 46.7 38.3 59.1
1977 25.8 47.9 39.1 59.9
1978 25.4 45.1 38.8 57.4 49.6 66.9
Married couple with two children
1970 48.3 72.7
1973 49.5 70.6
1974 50.2 70.3
1975 48.3 67.0
1976 48.4 67.3
1977 49.7 68.8
  • (a) After allowing for income tax and national insurance contributions.
  • (b) Average earnings of adult male manual workers.
  • (c) Earnings Related Supplement calculated using average earnings in October of the relevant tax year.

The real value of social security benefits, 1948-75 (£s, 1981 prices)[edit]

Unemployment benefit[33]

July 1948: 19.64

April 1961: 26.88

September 1971: 34.96

November 1975: 36.47

Retirement pension[33]

July 1948: 19.64

April 1961: 26.88

September 1971: 34.96

November 1975: 42.96

Supplementary benefit[33]

July 1948: 17.93

April 1961: 25.31

September 1971: 33.39

November 1975: 35.10

Child support: one child[33]

July 1948: 4.87

April 1961: 4.36

September 1971: 4.27

November 1975: 3.67

Child support: three children[33]

July 1948: 17.60

April 1961: 16.62

September 1971: 15.36

November 1975: 13.81

See also[edit]



  1. ^ Gøsta Esping-Andersen (1998). The Three Worlds of Welfare Capitalism. Princeton, New Jersey: Princeton University Press; Polity Press. ISBN 9780745607962.  https://books.google.com/books/about/?id=zW2ungEACAAJ
  2. ^ Ferragina, Emanuele, and Martin Seeleib-Kaiser. "Thematic Review: Welfare regime debate: past, present, futures?." Policy & Politics 39.4 (2011): 583-611. http://www.ingentaconnect.com/content/tpp/pap/2011/00000039/00000004/art00010
  3. ^ Derek Fraser, The evolution of the British welfare state: a history of social policy since the Industrial Revolution (2nd ed. 1984) p 233.
  4. ^ a b c d "Britain 1905–1975: The Liberal reforms 1906–1914". GCSE Bitesize. BBC. 
  5. ^ a b c d Steve Schifferes (26 July 2005). "Britain's long road to the welfare state". BBC News. 
  6. ^ "Why were school dinners brought in?". National Archives. 
  7. ^ "1908 Children's Act was created to protect the poorest children in society from abuse". Intriguing History. 12 January 2012. 
  8. ^ Gazeley, Ian (17 July 2003). Poverty in Britain 1900–1945. Palgrave Macmillan. ISBN 978-0333716199. 
  9. ^ "Case Study: Working People" (PDF). National Archives. Retrieved 30 August 2015. 
  10. ^ David Taylor (1988). Mastering Economic and Social History. Macmillan Education. ISBN 978-0-333-36804-6. 
  11. ^ Spicker, Paul. "Social policy in the UK". spicker.uk.  http://www.spicker.uk/social-policy/uk.htm
  12. ^ a b c "The Beveridge Report and the postwar reforms" (PDF). Policy Studies Institute. Retrieved 9 June 2012. 
  13. ^ "A history of NHS spending in the UK". 
  14. ^ "A brief history of health and care funding reform in England". Socialist Health Association. Retrieved 21 December 2013. 
  15. ^ http://www.publications.parliament.uk/pa/cm200506/cmselect/cmhealth/815/815-i.pdf
  16. ^ a b "Welfare spending p.132" (PDF). 4 December 2012. Retrieved 8 January 2016. 
  17. ^ "Benefits for unemployed people" (PDF). A Survey of the UK Benefit System. Institute for Fiscal Studies. November 2012. p. 16. 
  18. ^ "Benefits for people on low incomes" (PDF). A Survey of the UK Benefit System. Institute for Fiscal Studies. November 2012. p. 25. 
  19. ^ Bartholomew, James (2013). The Welfare State We're In (3 ed.). Biteback. p. 320. ISBN 978-1849544504. 
  20. ^ 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. 
  21. ^ Peter Oborne (June 30, 2011). "Britain would be a better place if families looked after their own". The Daily Telegraph. Retrieved July 1, 2011. 
  22. ^ "David Cameron: 'Don't complain about welfare cuts, go and find work'". 23 Jan 2012. Retrieved 5 January 2013. 
  23. ^ "Conservative conference: Welfare needs 'cultural shift'". 8 October 2012. Retrieved 5 January 2013. 
  24. ^ Grice, Andrew (4 January 2013). "Voters 'brainwashed by Tory welfare myths', shows new poll". The Independent. Retrieved 5 January 2013. 
  25. ^ "Support for benefit cuts dependent on ignorance, TUC-commissioned poll finds". TUC. Retrieved 5 January 2013. 
  26. ^ Dixon, Hayley (13 December 2013). "Majority of benefit cheats not prosecuted, official figures show". The Telegraph. Retrieved 24 February 2014. 
  27. ^ https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/271654/fraud-and-error-in-the-benefit-system-2012-13_estimates-160114.pdf
  28. ^ Church of England bishops demand action over hunger
  29. ^ a b c Labour and inequality: sixteen fabian essays edited by Peter Townsend and Nicholas Bosanquet
  30. ^ a b The Labour Party in Crisis by Paul Whiteley
  31. ^ Taxation, Wage Bargaining and Unemployment by Isabela Mares
  32. ^ a b c Labour and Equality : A Fabian Study of Labour in Power, 1974-79 edited by Nick Bosanquet and Peter Townsend
  33. ^ a b c d e The Welfare State in Britain since 1945 by Rodney Lowe


  • Béland, Daniel, and Alex Waddan. "Conservatives, partisan dynamics and the politics of universality: reforming universal social programmes in the UK and Canada." Journal of Poverty and Social Justice 22#2 (2014): 83-97.
  • Calder, Gideon, and Jeremy Gass. Changing Directions of the British Welfare State (University of Wales Press, 2012).
  • Esping-Andersen, Gosta; The Three Worlds of Welfare Capitalism, Princeton NJ: Princeton University Press (1990).
  • Ferragina, Emanuele and Seeleib-Kaiser, Martin. "Welfare Regime Debate: Past, Present, Futures?" Policy & Politics 39#4 pp. 583–611 (2011).http://www.ingentaconnect.com/content/tpp/pap/2011/00000039/00000004/art00010.
  • Fraser, Derek. The evolution of the British welfare state: a history of social policy since the Industrial Revolution (2nd ed. 1984).
  • Gilbert, Bentley B. The Evolution Of National Insurance In Great Britain: The Origins of the Welfare State (1966).
  • Harris, Bernard. The origins of the British welfare state: social welfare in England and Wales, 1800-1945 (Palgrave, 2004).
  • Häusermann, Silja, Georg Picot, and Dominik Geering. "Review article: Rethinking party politics and the welfare state–Recent advances in the literature." British Journal of Political Science 43#
  • Slater, Tom. "The myth of “Broken Britain”: welfare reform and the production of ignorance." Antipode 46.4 (2014): 948-969. online
  • Welshman John. Underclass: A History of the Excluded, 1880–2000 (2006) excerpt

External links[edit]