The Classic Welfare State was initiated by the Labour’s Beveridge Report which aimed to eliminate the ‘five giant’ towards post-war reconstruction[1].
This essay will argue to a small extent the classic Welfare State promotes a more egalitarian society. It is because cost and benefit were not often equally shared under the system, within different socio-economic groups (SEGs), throughout the classic era (1945-1975). A welfare state is based on the government’s expenditure; citizens thus can enjoy an equal outcome from it[2].
For example, citizens pay the tax for the NHS, and the rich and the poor could receive the same level of treatment[3]. In this essay, egalitarianism is considered as each individual contributes the same weight of cost and they should acquire the same level of benefit[4].
However, in the classic era costs were not shared but carried mainly by the poor; meanwhile, the benefits were distributed unevenly between different SEGs. Despite the society as a whole were benefit from a higher standard of housing, people who are more affluent had benefited from a regressive tax level, further education, and better quality of healthcare treatment.
Taxation is the way in which government can influence individual welfare and it did not balance the cost to a significant extent throughout the Classic era[5] The income tax, as direct taxation, had become more regressive. Between 1955 and 1974, the percentage of tax raised from firms was dropped by about 75%[6].
A bachelor could have retained £3587 in his £10,000 earned in 1949; by 1974, £6088 can be retained[7]. Thus, the redistribution from the rich to the poor was not substantial comparing the beginning and the end of the classic era[8]. In contrast, the government revenue became more reliant on the poor, partly because of inflation. Even a married worker with two children was liable to tax in mid-1970s [9] and they suffered from the highest marginal rate of taxation[10]. Here we might see that direct taxation had been eroded by the more regressive base.
Together with indirect taxation which pays for the welfare, we should discover the nature of wealth distribution and how much did it share peoples’ cost[11]. The rich, for example, the managers could enjoy various subsidies. They were increasingly benefiting from, for instance, free medical insurance, use of company car, and top hat pension[12].
Moreover, during the 1950s the national pension might no longer be supported by flat-rate contributions. Thus the Labour party developed a new pension scheme that featured earnings-related benefits[13]. However, according to Halsey, wealth inequality was actually decreased between 1961 and 1976 by taxes when taking the Gini coefficient into accounts.[14]. We might argue that the regressive taxation led to an uneven share of cost in short term; on the other hand, the gap was actually closing in a very gradual manner.
There used to be an egalitarian vision of a shared housing benefit from Bevan, the Minister for Health, ‘where the doctor…and the farm laborer all lived in the same street…(as a) mixed community.’[15]. To evaluate how egalitarian society was achieved, we might consider the quantity and quality of housing available to different SEGs.
For the poor who need to rent out, the Conservative government had set and achieved the goal of building 300,000 council housing per year in 1953 and 1954[16]. Between 1945 and 1964, there was an average of 158,000 public houses being built every year[17]. On the other hand, housing had switched to high-rise towers rather than council housing.
This might be seen as a tradeoff of quality for quantity. Those towers were criticized for their lack of consideration in the community sense and create barriers to residents’ interaction[18] as well as for their low quality[19]. Surprisingly, the overall standards of amenities such as WC in-house did undergo an increase, despite property owner could enjoy consistently higher than household which rent from a private person[20]. Interpretation behind this could be both the working and the middle class were taking advantage of the state intervention; while perhaps those living in the tower suffer more.
The state did relieved people from squalor to some extent. However, there was a fluctuation to the extent of a shared benefit. Pressures were put by the Conservatives on local authorities to raise rents, which affected the low-income most[21]. Also, the government actively encouraged people to be a property-owner[22] thus the tax relief granted in this respect had reached £2341 million which was about £900 million more than subsidizing social housing[23].
Tax relief to property owners such as the Schedule A tax had benefited the richest landlord to a substantial proportion[24]. In the late 1970s, the income group who earned £6240 or more had taken 70% more public expenditure than those who earned less than £2080[25]. Although the poor had taken up more of the subsidies for council tenants than the rich, the higher income group had substantially owned more properties thus acquired considerable granting on this respect as well[26]. Thus this essay argues that under the welfare state, every class could enjoy benefits to some extent so everyone was the winner. This did promote a more egalitarian society.
The NHS was initiated by the Labour government after WWII, promising people that they ‘may get the best that modern science can offer’ including hospitals, doctors, and nurses[27]. However, both health and healthcare were unable to be distributed equally from the NHS but largely benefiting the rich. It was found that the higher the patients’ SEGs belong to, the longer consultation time doctor would spend on them[28].
Whereas the patients from lower SEGs tend to receive a lower level and less frequent consultation or treatment despite their demand was higher in certain aspects, for instance, hip replacement[29]. Furthermore, infant mortality and stillbirth rate of lowest SEG was the highest[30]. According to Hill’s statistics, the welfare state had failed to tackle this class inequality in the distribution of health but had worsened the situation instead[31].
The HNS expenditure per unit of need is rather unequal. Le Grand argued that the upper two SEGs had consumed at least 40% more expenditure than the lowers by using data in 1972[32]. However, the study of O’Donnell and Propper claimed that in fact the poor people acquired more healthcare than the rich by measuring the frequency of visiting GP[33].
They were aware of the methodology used by others such as Le Grand’s work; and the use of the 1980s, in the age of Thatcherism, data might further reinforce the argument that the poor were benefiting more from the NHS. However, this essay had argued that the rich were taking advantage of a longer consultation time as well as the standard of treatment. In general, Hill had presented that the higher the patients’ socio-economic group belongs to, the more the health care system would spend[34]. To sum up, the better-off had obtained more benefits, including health and healthcare from the system.
In 1944 education had essentially meant ‘equality of opportunity and ‘parity of esteem’ implied the equal distribution of resources[35]. However, the opportunity of pupils from the higher social class was greater than their fellow students. The streaming of children was depended on the 11-plus exam which measured the IQ of pupils and was found to favoring the middle-class and the professionals’ group[36][37]. Apart from the examination, parental factors also played a part.
As working-class families might not recognize the benefit behind further education, while perhaps the father did not receive much, so the money forgone from being hired might be perceived as more costly than continuing education[38]. Moreover, the resource available for children was significantly unequal. According to Hart et al, there was a positive relationship between the number of books at home and income[39]. As a result, the working-class found it hard to move upward in the social ladder, and the situation had actually worsened in the classic era[40]. It was not hard to argue that the benefit for education was mainly occupied and consolidated only by the better-off.
Considering expenditure used, the higher SEGs had acquired more resources in higher education. Le Grand had demonstrated that in the late 1970s, the richest fifth of households received about 150% more public expenditure than the poorest counterpart[41]. If we measured by occupation, the expenditure enjoyed by a professional was in fact lower than unskilled labor in primary school age; but the situation reversed in and after secondary school and the former could enjoy 50% more than the latter[42][43].
It might because of the higher possibility for a high social class pupil to enjoy university life than a working class[44]. Although the imbalance in the input of expenditure did not create a more egalitarian society, it was notable that there is no controversy here to put more resources on those who might be the future professional and help sustain the states prosper. The poor pupils did benefit from the state in early school age, and the data from the 1970s suggested an unchanged inequality among the social class.
To conclude, to a large extent the British welfare state in 1945-75 did not create a more egalitarian society. This was because the cost and benefits of the welfare state were not equally shared among different socio-economic-groups. The wealthier and higher SEGs could have enjoyed a lower responsibility in contributing to the state by an increasingly regressive tax base; as well as taking advantage of higher levels of healthcare and health and further education.
In general, everyone perhaps was benefited from the state in housing, as public housing and the private market had both received certain grants and help. This essay had argued that an egalitarian society could not be achieved by a base built on over-dependence and exploitation of the poor. However, the essay had only discussed the issue on very few topics, further research on pension or transportation could be done. Also, the previous argument is mainly focused on wealth and its relationship to equality, the argument on gender or race could help to broaden the discussion into different respect.
Bibliography
Archive of Labour Party Manifestos, 2001, 1945 Labour Party Election Manifesto, Retrieved January 26th, 2015 from: http://www.labour-party.org.uk/manifestos/1945/1945-labour-manifesto.shtml
Fraser, D., 2009, The Evolution of the British Welfare State, Fourth edition, Basingstoke: Palgrave Macmillan, p298
Greener, I., Simmons, R., Powell, M., 2009, The Consumer in Public Services: Choice, Values and Difference, Bristol: Policy Press
Halsey A.H., Heath A.F., Ridge, J.M., 1980, Origins and destinations: family, class and education in modern Britain, Oxford: Clarendon Press, p188
Halsey, A.H., 1988, British social trends since 1900: a guide to the changing social structure of Britain, Basingstoke: Palgrave Macmillan
Harrison, R., 2009, Towards an archaeology of the welfare state in Britain, 1945–2009. Archaeologies, Vol.5(2), pp238–262
Hart, R., Moro, M. and Roberts, J. 2012, Date of birth, family background, and the 11 plus exam: short– and long–term consequences of the 1944 secondary education reforms in England and Wales, Stirling Economics Discussion Paper, no.2012(10),p3, 4
Hill, M., 1993, The Welfare State in Britain: A Political History Since 1945, Aldershot: Edward Elgar, p37
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Sinfield, A., 1966, ‘Poverty, privilege and welfare’, in P. Bean and D. Whynes (eds), Barbara Wootton: social science and public policy: essays in her honour, London: Tavistock, p112
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FOOTNOTES
[1] Harrison, R., 2009, Towards an archaeology of the welfare state in Britain, 1945–2009. Archaeologies, Vol.5(2), pp239
[2] Le Grand, J., 1982, The Strategy of Equality, London: George Allen & Unwin, p14, 15
[3] Le Grand, J., The Strategy, p15
[4] Stanford Encyclopedia of Philosophy, 2013, Egalitarianism, Retrieved January 25th, 2015 from: http://plato.stanford.edu/entries/egalitarianism/
[5] Peter Scott, ‘The Household Economy since 1870’ in R. Floud, J. Humphries and P. Johnson, (eds.), The Cambridge Economic History of Modern Britain, Volume II 1870 to the Present, Cambridge: Cambridge University Press, 2014, p366
[6] Lowe, R., 2005, The Welfare State in Britain since 1945, Third edition, Palgrave Macmillan: New York, p297, 298
[7] Rubinstein, W.D., 1986, Wealth and Inequality in Britain, London: Faber and Faber, p82
[8] Halsey, A.H., 1988, British social trends since 1900: a guide to the changing social structure of Britain, Basingstoke: Palgrave Macmillan
p147, 152
[9] Scott, The Household Economy, p367
[10] Lowe, The Welfare State, P297, 298
[11] Sinfield, A., 1966, Poverty, privilege and welfare, in P. Bean and D. Whynes (eds), Barbara Wootton: social science and public policy: essays in her honour, London: Tavistock, p112
[12] Sinfield, Poverty, privilege and welfare, p113
[13] Fraser, D., 2009, The Evolution of the British Welfare State, Fourth edition, Basingstoke: Palgrave Macmillan p298
[14] Halsey, British social trends, p154
[15] Hill, M., 1993, The Welfare State in Britain: A Political History Since 1945, Aldershot: Edward Elgar, p37
[16] Fraser, The Evolution, p295
[17] Hill, The Welfare State, p51
[18] Harrison, Towards an archaeology, p4
[19] Hill, The Welfare State, p51
[20] Halsey, British social trends, p380
[21] Malpass, P., 1990, Reshaping Housing Policy: Subsidies, Rents and Residualisation. London: Routledge
[22] Greener, I., Simmons, R., Powell, M., 2009, The Consumer in Public Services: Choice, Values and Difference, Bristol: Policy Press, p138
[23] Halsey, British social trends, p376
[24] Titmuss, R.M., 1962, Income Distribution and Social Change, London: George Allen & Unwin, p129
[25] Le Grand, J., The Strategy, p88
[26] Le Grand, J., The Strategy, p88
[27] Archive of Labour Party Manifestos, 2001, 1945 Labour Party Election Manifesto, Retrieved January 26th, 2015 from:http://www.labour-party.org.uk/manifestos/1945/1945-labour-manifesto.shtml
[28] Jenkin, P., 1980, Black Report 4 The Evidence for Inequality in Health Service Availability and Use, Retrieved January 26th, 2015 from: http://www.sochealth.co.uk/resources/public-health-and-wellbeing/poverty-and-inequality/the-black-report-1980/the-black-report-4-the-evidence-for-inequality-in-health-service-availability-and-use/
[29] Le Grand, J., 2012, Inequality, choice and public service, in A. Giddens and P. Diamond, (eds), The New Egalitarianism, London: Policy Network
[30] Jenkin, Black Report 4
[31] Hill, The Welfare State, P419, 421
[32] Le Grand, J., 1978, The distribution of public expenditure: The case of health care, Economica, Vol.45, p132
[33] O’Donnell, O. and Propper, C., 1991, Equity and the distribution of UK National Health Service resources, Journal of Health Economics, Vol. 10(1), p9
[34] Le Grand, The Strategy, p26
[35] Lowe, The Welfare State,P215
[36] Hart, R., Moro, M. and Roberts, J., 2012, Date of birth, family background, and the 11 plus exam: short– and long–term consequences of the 1944 secondary education reforms in England and Wales, Stirling Economics Discussion Paper, no.2012(10), p3,4
[37] Lowe, The Welfare State,P228
[38] Le Grand, The Strategy, p63
[39] Hart, Moro and Roberts, Date of birth, p37
[40] Le Grand, The Strategy, p76
[41] Le Grand, The Strategy, p57
[42] Halsey, British social trends, p293
[43] Le Grand, The Strategy, p58
[44] Halsey A.H., Heath A.F., Ridge, J.M., 1980, Origins and destinations: family, class and education in modern Britain, Oxford: Clarendon Press, p188
