thumb|upright=1.3|Pie chart of [[Government spending in the United Kingdom|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 began to evolve in the 1900s and early 1910s, and comprises expenditures by the government of the United Kingdom of Great Britain and Northern Ireland intended to improve health, education, employment and social security. The British system has been classified as a liberal welfare state system.
History
Before the official establishment of the modern welfare state, clear examples of social welfare existed to help the poor and vulnerable within British society. A key date in the welfare state's history is 1563; when Queen Elizabeth I's government encouraged the wealthier members of society to give to the poor, by passing the Poor Act 1562.
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 Poor Relief Act 1601 (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.
A 2022 study linked trade shocks during the first globalization (1870–1914) with increased support for a welfare state and reduced support for the Conservative Party.
Liberal reforms
The late nineteenth century saw the emergence of New Liberalism within the Liberal Party, which advocated state intervention as a means of guaranteeing freedom and removing obstacles to it such as poverty and unemployment. The policies of the New Liberalism are now known as social liberalism.
thumb|Liberal politicians [[David Lloyd George and Winston Churchill enacted the 1909 People's Budget which specifically aimed at the redistribution of wealth.]]
The New Liberals included intellectuals like L. T. Hobhouse, and John A. Hobson. They saw individual liberty as something achievable only under favourable social and economic circumstances. In their view, the poverty, squalor, and ignorance in which many people lived made it impossible for freedom and individuality to flourish. New Liberals believed that these conditions could be ameliorated only through collective action coordinated by a strong, welfare-oriented, and interventionist state.
After the historic 1906 victory, the Liberal Party launched the welfare state with a series of major welfare reforms in 1906–1914. The reforms were greatly extended over the next forty years. In the Liberal camp, as noted by one study, "the Budget was on the whole enthusiastically received." It was the first budget with the expressed intent of redistributing wealth among the public. It imposed increased taxes on luxuries, liquor, tobacco, high incomes, and land – taxation that fell heavily on the rich. The new money was to be made available for new welfare programmes as well as new battleships. In 1911 Lloyd George succeeded in putting through Parliament his National Insurance Act, making provision for sickness and invalidism, and this was followed by his Unemployment Insurance Act.
The minimum wage was introduced in Great Britain in 1909 for certain low-wage industries and expanded to numerous industries, including farm labour, by 1920. However, by the 1920s, a new perspective was offered by reformers to emphasise the usefulness of family allowance targeted at low-income families was the alternative to relieving poverty without distorting the labour market. The trade unions and the Labour Party adopted this view. In 1945, family allowances were introduced; minimum wages faded from view.
The experience of almost total state control during the Second World War had encouraged the belief that the state might be able to solve problems in wide areas of national life.
The Liberal government of 1906–1914 implemented welfare policies concerning three main groups in society: the old, the young and working people.
- 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.
||
- In 1908 pensions were introduced for the over 70s.
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- In 1909 Labour Exchanges were set up to help unemployed people find work.
- The National Insurance Act 1911 was passed, ensuring free medical treatment, and sick pay of 10 shillings a week for 26 weeks.
|}
Beveridge Report and Labour
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 period of unemployment and poverty, particularly in northern industrial towns, that deepened into the Great Depression by the 1930s. Many people welcomed this government intervention and wanted it to go further. believing more people would access healthcare when they need it if they were voluntarily involved in their own healthcare. But it is key to note Beveridge still emphasised that healthcare should be accessible for everyone in the United Kingdom and that people should give what they can according to their means when receiving healthcare in voluntary hospitals. Beveridge himself was careful to emphasise 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. 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' However, the lack of real follow-through on Beveridge's recommended strategies meant that the Labour government ultimately failed to abolish poverty with their welfare reforms. leading to a reduction in provision. Charges for dentures, and spectacles were introduced in 1951 by the same Labour government that had founded the NHS three years earlier, and prescription charges by the successive Conservative Government were introduced in 1952. In 1988, free eye tests for all were abolished, although they are now free for the over-60s.
After 1979, Margaret Thatcher had laid the post-war Keynesian consensus to rest, in favour of an Individualist and Monetarist Welfare policy, guided by the economy. This Thatcherite consensus was characterised by policies such as Privatisation, driven by her belief in Individualism and Competition. Therefore, her main focus was to attempt to control public spending, privatisation, targeting and rising inequality, so much of the 1980s was focused on cutting public spending in the UK.
Policies differ in different regions 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.
Welfare spending on poor people dropped by 25% under the United Kingdom government austerity programme of 2010 - 2019, cuts to benefits that disabled people receive were significant, Personal Independence Payments and Employment and Support Allowance have both dropped by 10%. Over half of families living below the breadline have at least one relative with a disability. Cuts include, tax credits (£4.6bn), universal credit (£3.6bn), child benefit (£3.4bn), disability benefits (£2.8bn), Employment and Support Allowance and Incapacity Benefit (£2bn) and housing benefit (£2.3bn). Frank Field said, "A £37bn attack has been mounted on the living standards of many of our fellow citizens to such an extent that possibly millions struggle to keep on top of their rent, pay the bills and buy adequate food. Likewise, an unknown number are unable to clothe their children properly before sending them to school where all too many of these children not only rely on free school dinners as a cornerstone of their diet, but on breakfast and supper clubs as well."
Expenditure
In the financial year 2014/15, state pensions were overwhelmingly the largest governmental welfare expense, costing £86,500,000,000 followed by housing benefit, which accounted for over £20,000,000,000 Expenditure in 2015–16 on benefits included: £2,300,000,000 paid to unemployed people and £27,100,000,000 to people on low incomes, and £27,600,000,000 for personal tax credits.
In 2023/24, it is expected that government health spending, which is the biggest element of public spending, will reach £176,200,000,000. Other welfare expenses include education, which is predicted to reached £81,400,000,000, and state pensions, for which expenditure will be £124,300,000,000. Also suggesting that the welfare state at times does not eliminate the causes of individual contingencies and needs. Economically, the net losers of the welfare state are often more against its values and role within society.
In 2010, the Conservative-Lib Dem coalition government led by David Cameron argued for a reduction of welfare spending in the United Kingdom as part of their programme of austerity. 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. 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.
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% on the year before. This was lower than the £1.5 billion of benefit underpayment due to error.
In some cases, relatives who bring up a child when the parents cannot bring up the child face sanctions and financial penalties, they can be left poor and homeless. There are also widespread complaints from church groups and others that the UK welfare state does insufficient work to prevent poverty, deprivation and even hunger. In 2018, food bank usage in the UK reached its highest point on record, with the UK's main food bank provider, The Trussell Trust, stating that welfare benefits do not cover basic living costs. The Trussell Trust's figures showed that 1,332,952 three-day emergency food supplies were delivered to people from March 2017 to March 2018. This represented a 13% increase from the previous year.
In 2018 support for raising taxes to finance more provision on health, education and social benefits was the highest it had been since 2002 according to NatCen Social Research. Two-thirds of Labour supporters favoured tax rises and 53% of Conservatives also favoured that.
In 2018 the House of Commons library estimated that by 2021, £37bn less would be spent on working-age social security than in 2010. Cuts to disability benefits, Personal Independence Payments (PIP) and employment and support allowance (ESA) are noteworthy, they will have fallen by 10%, since 2010. Over half of families with income below the breadline include at least one person with a disability. There are also cuts to tax credits Universal Credit child benefit disability benefits ESA and incapacity benefit and housing benefit. Alison Garnham of the Child Poverty Action Group said, "Cuts and freezes have taken family budgets to the bone as costs rise and there is more pain to come as the two-child limit for tax credits and universal credit, the bedroom tax, the benefit cap and the rollout of universal credit push families deeper into poverty."
Numerous negative consequences have been attributed to benefit sanctions imposed by the Department for Work and Pensions (DWP), the UK Government department that runs the welfare state in the UK. These include "increased debt and rent arrears, food poverty, crime and worsening physical and mental health. Statistics indicate that in the period of 2011 to 2015 benefit sanctions on people with mental health problems increased by 668%. 19,259 people with mental health problems had benefits stopped in the period of 2014 to 2015, compared to 2,507 people in the period of 2011 to 2012. In 2020, the UK Government admitted that it had made no assessment of the impact that benefit sanctions made on mental health. At the same point in time the Government also refused to assess the impact benefit sanctions have on people's mental health, which came after repeated warnings on the long-term damage they can cause to people that use the welfare state and to these people's families. Also in 2020, it was reported that at least 69 suicides were linked to the DWP's handling of benefit claims. The National Audit Office (NAO) said the actual number of deaths linked to claims could be much higher than this. It was also reported that the DWP were not looking into information from coroners or families, nor investigating all the reports of suicide made aware to it. In the same year the DWP were accused of a "cover-up" due to destroying approximately 50 reports connected to benefits being stopped. Officials blamed data protection laws for the actions, though the data watchdog denied there was any requirement to destroy the documents by any date. In March 2022, an academic study into whether benefit sanctions are linked to claimant ill-health, including mental illness and suicide was stopped after the DWP and Government ministers refused to release their recorded data on sanctions.
From a contemporary perspective, in practice, social welfare in the United Kingdom is very different from the ideal version of the welfare state that people may carry. Coverage is extensive, but benefits and services are delivered at a low level. The social protection provided is patchy, and services are tightly rationed." This opinion appears to be growing in popularity amongst the general population of the UK. This argument does stand when you compare certain statistics with some of Europe's biggest nations. The UK has tax revenue, as a share of GDP, of 35.3%. This compares with France's 45.6%, Germany's 40.3%, and Italy's 41.7%. It was also found, in a 2021 study by The Health Foundation, that Britain spends the 6th most money on health care amongst "developed countries." This figure sits below the EU average and explains why some believe the welfare state is not so successful. It is also a fact that "The UK dedicates roughly one-fifth of its GDP to social spending. That places us 17th – roughly in the middle – of OECD countries" (Whiteford, 2022).
Over the course of the COVID-19 pandemic, it became clear that there was a distinct shortage of provisions available to support public health, including a lack of beds in the NHS and a lack of personal protective equipment (PPE). In the closing statement of the British Medical Association (BMA) in July 2023, it was noted that this lack of pandemic preparedness manifested in four key areas; failure to protect healthcare workers, lack of capacity and resources, failings of the test and trace system, and failings in government structures and processes. The statement also claimed that the "UK was bottom of the table on numbers of doctors, nurses, beds, intensive care units, respirators and ventilators", During the COVID-19 crisis, food insecurity impacted 16% of the population, and some critics argue that government food aid was instigated too late for the elderly and vulnerable. There have also been criticisms of the food parcels given, as reports stated that the parcels lacked nutritional food and instead contained an abundance of processed foods.
Historical statistics on welfare trends
Benefit rates as a percentage of industrial earnings
{| class="wikitable sortable"
|+ Benefit rates as a per cent of industrial earnings of male manual workers aged 21 and over (1948–1971)
|-
! 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
{| class="wikitable sortable"
|+ Changes in National Assistance/Supplementary Benefit scale (1963–1969) (a)
|-
! colspan="2" | Government !! Sickness/unemployment benefit a !! a plus earnings related supplement !! Retirement pensions c !! Supplementary allowance/benefits d !! Family allowance/child benefit e
|-
| style="background:#dc241f; width:20px;"| || Labour (1951)
| 25.7
| 25.7
| 30.4
| 30.4
| 8.0
|-
| style="background:#0087dc; width:20px;"| || Conservative (1963)
| 33.8
| 33.8
| 33.0
| 31.6
| 5.3
|-
| style="background:#dc241f; width:20px;"| || Labour (1969)
| 32.4
| 52.3
| 32.4
| 31.4
| 3.8
|-
| style="background:#0087dc; width:20px;"| || Conservative (1973)
| 29.1
| 46.2
| 30.5
| 28.5
| 3.0
|-
| style="background:#dc241f; width:20px;"| || 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 1964–1969
{| class="wikitable sortable"
|+ Social policy benefits and earnings under Labour 1963–1969:
|-
! 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
{| class="wikitable"
|+ Supplementary benefit rates as a proportion of gross and net income at average earnings, married couple:
|-
! Year
! colspan="2" | End of year (a)
|-
! rowspan="2" |
! colspan="2" | 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
|-
! rowspan="2" |
! colspan="2" | 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
|}
{| class="wikitable"
|+ 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
{| class="wikitable"
|+ Numbers in households dependent on supplementary benefit or with estimated incomes below SB level, 1974 and 1976 (thousands)
|-
! rowspan="2" | Year
! colspan="2" | Pensioners
! colspan="4" | 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
{| class="wikitable sortable"
|+ Changes in real terms in social security benefits, 1964–1979 (in 1981 prices, 1951= 100): !! Retirement pension