Since the end of World War II the United Kingdom has been increasingly referred to as a welfare state. This means the government of the day has a responsibility to eliminate the worst causes of poverty by imposing minimum standards of subsistence, medical care, education, housing and nutrition by the means of the social services, minimum wage legislation and government regulations. These minimum standards were established as a floor or safety net below which no one in society would be allowed to sink. As Sir William Beveridge stated, the welfare state should cover one's life from the "cradle to the grave".Although the welfare state is predominantly a post-1945 phenomena, I will argue in this essay that the Liberal Government of 1906-1911 made an enormous contribution in paving the way for its existence. However, I will attempt to place its importance in historical context relative to other key contributors both before and after.
In early 19th century Britain, as for centuries before, poverty was regarded as natural or inevitable. It was assumed that the great majority of people would be born poor and would remain poor, with many becoming destitute.The dominating classical liberal philosophy of the period demanded that individuals should be allowed to pursue their own self-interest free from government intervention [laissez-faire] in the private market. Poor individuals who demonstrated exceptional ability could independently progress but it was generally accepted that, apart from charity and almsgiving, little or nothing could, or should, be done to relieve mass poverty. As the century progressed the existence of widespread need in the midst of great wealth led to philosophical, political and social discomfort.With the French Revolution encouraging "liberty, equality and fraternity", a newly awakening humanitarian or collectivist spirit in Britain led to a redefining of traditional liberal individualist beliefs.
If it could be shown that mass poverty wasn't "natural" but a problem of the society, then it was up to state institutions to do something about destitution. Many writers would argue that is was this point in history where the foundations of the welfare state were laid. If so, then the "father" of the welfare state was the British philosopher, economist and lawyer Jeremy Bentham [1748-1832], the founder of utilitarianism.Paradoxically, Bentham and his followers in the cause of extending laissez-faire and the privatisation of government functions, were inadvertently instrumental in encouraging the state to intervene more in the private market. At the heart of Bentham's utilitarianism is the important proposition or ethical standard that actions are right [useful] if they tend to produce the greatest happiness for the greatest number of people. The utility principle became Bentham's tool he used to promote legislative reform and to criticise most social institutions and practices.
In the interests of practical reform, Utilitarians, unlike the classical liberalists, would argue that, in applying the utility principle, the happiness of the individual could be sacrificed for the happiness of the many. Where Bentham and his followers differ from the classical liberalist view of poverty is in the demand for continuous reform. Utilitarians viewed poverty as a barrier to happiness and consequently completely unacceptable. They maintain that the "greatest happiness" principle requires that everyone should be saved from starvation and the fear of starvation.The government has a duty to intervene when individuals, because of age, sickness, inherited poverty or bad luck, fail to individually self-improve.
Unlike the old poor laws, Bentham and his followers proposed that, in the interests of both the individual and the public, conditions on those receiving relief must be imposed. If this was not the case then people are financially encouraged to leave the class of labourers and enter the more eligible classes of paupers. Laziness and state dependency were certainly not to be encouraged by Utilitarians.Bentham proposed the creation of the National Charity Company [NCC], responsible for the relief of the community's very needy.
The NCC would have contracts with workhouses which would give their poor inhabitants food and shelter in exchange for their labour. The contractor of such a workhouse would be paid an allowance per head by the government to house a certain number of paupers. The conditions of the workhouse poor were not to be better than the conditions of the independent lowest classes who were not living in workhouses.The conditions and the work demanded were there to prevent poor people becoming dependent on government aid.
Together they would encourage the poor to leave and find their own happiness. Once departed the workhouse test would improve the industry and work habits of the worker. In turn he would find an increased demand for his labour which would result in more permanent employment, rising wages and improved social conditions. For the ratepayer, the reduction in the number of paupers should lead to a rate reduction. The Poor Law Amendment Act of 1834 resulted from middle class use of utilitarian principles.
The belief that the old poor laws were demoralising to those who received relief was a primary cause for reform. Equally important was the economic burden produced by the administration of poor laws which had risen from i?? 619,000 to i?? 8 000, 000 in 1818 [Woodward, 1962]. The means of supporting these costs fell on landowners, farmers and the respectable labouring classes who now had sufficient reason to hope for poor law reform. For example, a landowner in a pauperised district the burden of the 'Poor Rate' so discouraged tenants that rents were reduced to half or less.For the small farmer, unable to take advantage of cheap labour, high rates threatened destitution.
Towards the end of the 19th century the socialist ideas outlined by the Fabian Society, an intellectual group founded in Britain in 1884, have been credited as a major influence on the origins of the welfare state. Fabians wanted to influence politicians and others into small, incremental change towards a more equal society. They were much influenced by what they saw in late 19th century Britain - high unemployment and low standards of living in places like London.Fabians believed that government should take a central role in helping to change or reform the unfair and unjust capitalist system and make it better - bringing more equality and freedom. They saw the creation of a welfare state as one way this could be achieved - protecting and expanding the rights of the less well off in society [old, poor, sick, disabled etc.
] They saw the need for the government to provide more "public goods" - roads, hospitals, schools - facilities that help those in greater need but which the private sector would not normally provide [i. e. o profit in them]. The government should set an example for the country and show an unselfish concern for the welfare of others [altruism].
More extreme Fabians would claim that social policy and reform should be more dominant than economic policy. We should strive to give capitalism, and the search for individual profit, a more caring face by the taking on board more socialist values. They would argue that these social reforms can best be carried out in a decentralised way - more local decision-making - because local people know what change is really needed in their area.If the Utilitarians and the Fabians provided the first theoretical foundations of the British welfare state, it was the Liberal Government of 1906-11 that provided the first political building blocks. The Liberals had won the 1906 General Election committed to a number of social innovations.
H. H. Asquith played a vital role, first as Chancellor of the Exchequer in preparing pensions and taxation reforms and then as Prime Minister by giving support to Lloyd George's controversial budget. Winston Churchill, a Conservative turned Liberal, worked closely with Lloyd-George in mapping out the new series of reforms.The early reforms of the Liberal Government concentrated on children - school meals, medical inspection, compulsory registration of births and the Children's Act of 1908. Local authorities could now feed children in need but it was not until 1914 when the government made the provision of school meals compulsory.
In Lloyd-George's first budget in 1908 a modest but widely supported scheme for old-age pensions was introduced. The weekly pension was set at five shillings, with eventually the full rate paid to married couples. Elderly people aged seventy years with under ten shillings weekly income were eligible.Initially those in receipt of poor relief were excluded but this restriction was abandoned in 1911. The 1911 National Insurance Act was forced through despite much opposition by commercial and professional bodies.
In return for weekly payments of three pence by the worker, two pence from the state and four pence from the employer, the insured person received ten shillings for each of thirteen weeks and five shillings for each of thirteen subsequent weeks in any one year. The worker also enjoyed free treatment from the doctor, but this did not include children nor the majority of women.Lloyd-George did, however, introduce a maternity benefit of thirty shillings - at least recognising the vital contribution of women and the hardship they endured. Unemployment was tackled in several stages - the first in 1908 with the introduction of labour exchanges and the second in 1911 in the form of unemployment insurance. The latter was again based on contributions from the worker, state and employer in return for benefits of 7s 6d for each of fifteen weeks in any one year. The scheme only covered engineers, shipbuilders and building workers and was supposed to be self-supporting.
Consequently, this reform was not providing a safety net for the poorest elements of society but was to save skilled, respectable, highly paid men from being forced onto the poor law. Because the proposals for the unemployed ignored the recommendations of the minority report of the Royal Commission on the Poor Law they provoked criticism from those who considered that attendance at labour exchanges ought to be compulsory, not voluntary, in order to enable the idlers to be distinguished from those genuinely seeking work.The actual creation of the welfare state in Britain must be credited with the reforms introduced by the Labour government of 1945. It involved the willingness of the community to accept universal responsibility for insuring its citizens against the perils of sickness, unemployment, injury and old age as well as providing decent education and housing. Based on the famous report of Sir William Beveridge, December 1942, the measures that compose what we know as the "welfare state" were enacted between 1945 and 1948.
The Family Allowances Act brought weekly payments of 5s. for all children, after the first, to nearly three million families. 1946 brought the Industrial Injuries Act, the National Insurance Act and the National Health Service [NHS]. In 1948, when the NHS came into operation, the whole population enjoyed for the first time free medical treatment, medicines, spectacles, false teeth and a national system of hospital provision.
Access to medical services was now based on need, not ability to pay.In conclusion, the Edwardian social reforms of 1906-1911, must be seen relative to the 19th century groundwork performed by the Utilitarians, the Fabians, and many contemporary writers. Taken as a whole, the measures introduced by the Liberal Government were in no sense a welfare state. They were not intended to create a uniform, comprehensive system of welfare provision. They were targeted at certain discrete parts of the poverty problem.
Those not covered continued to require the poor law safety net, though it had a diminished role to play.However, the Liberal Government innovations had an overall long-term and important significance in the evolution of the modern day welfare state. The introduction of the insurance principle was the most important link with the post-1945 scheme. They represented a marked departure from the individualist principles governing welfare and poverty in the Victorian era. The reforms led the state into a position of responsibility from which no political party has been able to remove it.
