How effective were the social reforms of the Labour Government of 1945-1951 in dealing with the problems facing Britain at the time?
The Beveridge Report was published in 1942. Written by the Liberal Sir William Beveridge, it had identified what he called the “five giants” – the five gravest problems of British society. They were idleness (unemployment), want (poverty), disease, squalor and ignorance. Beveridge argued for a comprehensive social insurance scheme, universal access to healthcare and new attempts to avoid the mass unemployment of the 30’s. The report was wildly popular amongst the public, who bought 625,000 copies of this rather dry, academic policy document. It seemed that during the worst, least hopeful times of the war, the British public needed something to fight for – and the creation of a full Welfare state was it.
In May 1945, the coalition government that had steered Britain through the perilous days of the Second World War was finished. The Liberals and the Labour Party had withdrawn, deciding that it was time to let the British population choose their government again. A General Election was called for July. Before the campaign had started, or a manifesto had been published, the result had seemed inevitable. Winston Churchill, the feted wartime leader and leader of the Conservative Party would surely be returned as Prime Minister. Instead, the British people surprised everyone – no one more so than Churchill himself – by voting Clement Atlee’s Labour Party into power with a massive majority of 168. Their election manifesto – the optimistically named ‘Let us face the future’ - promised to “fully implement” the recommendations of the Beveridge Report. The Conservatives on the other hand had been non-committal on the matter.
The situation in Britain after the war was not too favourable to a welfare revolution. The cost of a large army, navy and bases across the world; the cost of acquiring nuclear weapons and wartime debts bore down on the country’s finances. Still, the Labour Party went forward, armed with generous loans and debt relief from North America, and introduced a series of social reforms designed to address the major ailments of Britain – how successful were they in this undertaking?
One of Labour’s key promises was to tackle the issue of social insurance provision in Britain. The Liberals’ inadequate National Insurance system from 1911 was still in place at the time. Beveridge recommended its replacement with a system that would cover everybody in Britain ‘from the cradle to the grave’, although he thought the amounts shouldn’t be too generous. The National Insurance Act of 1946 went a long way to implementing Beveridge’s proposals. It covered everyone over school leaving age except married women who were not working and some sections of the self/non employed. It was based on contributions from the state, employers and employees and the system covered everything from unemployment and sickness, to pensions. The unemployment benefit was 26/- for a single adult and 42/- for a couple – modest amounts at the time. The money could only be paid for a maximum of 492 days, meaning that anyone unemployed or sick beyond that point would have to appeal to the Poor Law. The National Insurance Act practically ended absolute poverty (existence below subsistence level) in Britain and it removed the degrading process of means testing. But, there were problems with the act. The amounts to be given were set in 1946, yet the scheme didn’t actually start until 1948, by which time the benefits had lost much of their value. The government tacitly accepted the failures of the N.I Act when they introduced the National Assistance Act in 1948. This removed the last vestiges of the hated poor law and was designed to ‘catch’ those whom the N.I Act hadn’t helped. Nevertheless, for all its faults, the National Insurance system was far superior to anything that had gone before and it succeeded in practically eliminating absolute poverty in Britain.
