One of the main criticisms of Beveridge’s proposals and of the concept of a welfare state is that a number of important assumptions have to be made for it to function successfully. For example, within the report, Beveridge makes the assumption that married women would be full time housewives and that for most of their lives women would not be employed. Therefore, married women would only receive benefits through men, thus, creating a culture which encourages women’s reliance on men. Because of this feminists have argued that the British welfare state relied on a “familial ideology” and treated women as second class citizens. This example of the role of women within the welfare state illustrates the point that any welfare system is not neutral that is based on ideological assumptions. These assumptions will influence the way that different members of the public will respond to state provision of welfare. Another example of these ideological assumptions would be the 17th century belief that only the “impotent poor” deserve state welfare.
The economics of Britain’s state welfare system have also come under a lot of criticism. These critics argue there are some fundamental flaws with the economic ideology underpinning the system. Firstly, for the welfare state to operate properly and fairly their must be nearly full employment in the country where it is based as, in theory, this will maximize tax revenue and minimize unemployment benefits. This system worked relatively effectively until the early 1970’s. However, due to the relative decline of the UK economy, Britain suffered an economic crisis and unemployment started rising rapidly. Since then mass unemployment has been a serious problem within British society. Critics suggest that this is proof of how dependent a welfare state is on a prosperous economy. Basically this meant that the welfare state was reliant on capitalism – rather than contributing to the undermining or softening of its most brutal aspects .
The New Right have made strong arguments against state welfare provision. The 1979 election brought into power a conservative government that had a new and radical approach to public expenditure and the welfare state as a whole. Probably the most notable change in policy brought in by the New Right was the end of the commitment to full employment that previous governments had encouraged. The New Right believed in a “natural level of employment”. They felt that this “natural level of employment” was being undermined by wages being too high due to the actions of trade unions. Therefore, they argued that the market would solve unemployment by creating downward pressure on wages. Because of this, the differential between wages and benefits was increased by creating downward pressure on benefit levels and therefore welfare expenditure. However, despite this right wing shift in political thinking, there was no major change in welfare expenditure until the late 1980’s.
The year 1988 was an important one in terms of implications for the welfare state as it represented a far more radical application of New Right thinking towards the welfare state. Firstly, the New Right introduced a shift from the previous system of universal provision towards a system based more upon selective provision. For example, some of the benefits that were previously available to everyone (universal) became only available to some via a “means test” (selective). This was a big move that completely contradicted the universal method employed by previous more left wing governments. Another change made by the New Right was the introduction of privatization and marketization. An example of this is the case of the sale of council houses. The public housing stock was privatized and sold off in an attempt to create a market for the council housing which had originally in Beveridge’s thinking, been intended for public ownership and private rent.
Another major shift made by the Conservative government was towards community care. There was a trend for mentally ill, elderly and disabled people to be moved from institutions to care in the community. However, what this basically meant was that rather than institutional care the responsibility was shifted onto the family. It is also very important to note that care in the community was considerably cheaper for the state to maintain than institutional care. The New Right also consciously made an effort to change the public’s perception of welfare – shifting away from the view that the state is the only provider of welfare. The responsibility of the state was reduced through the encouragement of private provision and by emphasizing the importance of the charitable and voluntary sector. This is one of the central strands of the argument against state welfare provision.
At this juncture it is important to consider the effect privatization has had on society and the welfare state. Since the New Right introduced new policy pertaining to welfare in 1979 there have been a number of examples of the UK government seeking to encourage private provision of welfare. People have been encouraged to take out private insurance plans for their welfare needs and the number of people covered by private health insurance rose from 2.2 million to 5.2 million between 1976 and 1986 (Julian Le Grand, 1990). In the mid 1980’s the Conservative government tried to shift sickness insurance and pension insurance into the private sector also. These plans, however, never came to fruition owing to major criticism and insurance companies expressing a reluctance to take up policies for all employees
Hutton (1996) strongly criticizes the New Rights welfare expenditure policy. He argues against the belief that public expenditure should be reduced during troubled times for the economy. Hutton believes that the cuts are spurred by political ideology rather then by economic need. In Hutton’s words “apart from Iceland, Britain runs the meanest, tightest, lowest-cost social security system in the world”. Hutton alleges that the twenty-first century will see a large rise in the amount of tax revenue available to fund welfare payments.
The voluntary sector must also be discussed when considering arguments for and against the state taking on responsibility for the welfare state. Organizations such as Barnados, the Salvation Army and the NSPCC provide voluntary care. They serve a different role to statutory bodies set up by Parliament, but the views of these voluntary providers are respected and need to be taken into account as well. These organizations tend to have specialized expertise and experience in certain areas and the government can benefit from this knowledge. A major bonus of voluntary provision is that they are often very cost effective as unpaid volunteers are often used. It is estimated by Knapp (1989) that the total amount of public-sector support for voluntary provision between 1983 and 1986 was £3151 million.
However, there are also inherent weaknesses in voluntary provision. The biggest and most blatant problem stems from the nature of voluntary work as it cannot be guaranteed. Critics also point to the fact that voluntary work may be unequally provided across the country. The service can therefore be inconsistent and the advice from the voluntary sector to government might differ depending on the region. It is also suggested that due to financial restrictions the voluntary sector will never be anything more than a secondary level service that relies on the state or private sector provision.
Social security benefits are the most redistributive aspect of the welfare state as they distribute income to the poorest people in the country. A point in favour of a social welfare system, from a socialist or social democratic perspective, is that the social security benefits can be used to redistribute wealth to make society economically fairer by heavily taxing the rich and giving it to the poorest people in society. On the other hand, opponents see this as a Robin Hood aspect of state social welfare which demotivates both the richest and the poorest people in the country – encouraging idleness (one of the “five giants” beveridge was trying to eradicate) amongst the poor and encouraging the rich to leave the country. The New Right when in power, therefore, cut back on the redistributive aspects of welfare provision. The one-off grant system that was previously in effect was replaced in the 1986 and 1988 security acts and 16 to 18 year olds entitlement to income support was revoked.
In current political debates the Conservative party, now in opposition frequently accuse the Labour party of redistributing wealth from the rich to the poor via “underhand” or “stealthy” methods. This is an indication that the argument about the extent to which the state should take responsibility for social welfare remains highly contested. Where you stand on this issue is fundamental to your political beliefs and how you will vote.
