Can the Tories abolish the welfare state?

Issue: 141
Posted: 9 January 14

Iain Ferguson

There is a scene in The Spirit of ‘45, director Ken Loach’s documentary about the achievements of the 1945-51 Labour government in Britain, where a general practitioner tells of visiting a poor family where a child was very ill with a hacking cough. Medicine was provided and the GP returned to the house the following day to check on the child’s progress. At the foot of the stairs he could clearly hear the sound of a child coughing violently. “Did the medicine not work then?” he asked the child’s mother. “Oh yes, it did”, she replied “but that’s one of my other children and I can’t afford medicine for him too.” “You can now”, said the doctor.

The date was 5 July 1948 and the doctor could make his promise because on that day a system of universal healthcare was introduced in Britain based neither on ability to pay nor on previous national insurance contributions but free for all at the point of delivery. The National Health Service transformed the lives of millions of working class people. At the most basic level it meant that for the first time, working class people could obtain basic healthcare, including dentures, glasses and free prescriptions, as of right without having to pay or to resort to charities or quack practitioners.

The NHS was the centrepiece of a raft of reforms introduced by the post-war Labour government under Clement Attlee that made up what became known as the “welfare state”. The reforms were based on the recommendations of the 1942 Beveridge Report, named after its author, the Liberal civil servant Sir William Beveridge. On the same day on which the NHS came into existence, two other acts were passed which also improved the lives of working class people, though to a much lesser degree. The National Insurance Act introduced a state-run insurance system which, in return for flat rate contributions, made possible a range of new or increased benefits including unemployment and sickness benefits, maternity grants and allowances, retirement pensions and a death grant which made possible a basic funeral (family allowances, or child benefit, had already been introduced in 1945). The self-declared aim of the National Assistance Act was “to terminate the existing Poor Law” by nationalising responsibility for cash payments to those in need and removing them from the control of the hated local Public Assistance Committees.1

Other reforms introduced by the Attlee government included the building of a million new homes and the passing of an act which led to the creation of 25 new towns, such as Basildon in Essex and East Kilbride in Scotland, housing around two million people in total. And in the area of education, the 1944 Education Act (introduced under the wartime coalition government by the Conservative minister Rab Butler but implemented under the Attlee government) provided free secondary education for all and raised the school leaving age to 15.

The content of these new services and the ways in which they were implemented often fell far short of their promise, for reasons to be explored below. However, in coalition Britain in 2013 where the term “welfare reform” is a euphemism for privatisation, cuts in services and attacks on benefits—what Chris Harman called “anti-reforms”2—and where the leader of the Labour Party has sought to invoke the “Spirit of ‘45” as a cover for New Labour’s embrace of austerity and its retreat from universal benefits, it is important to emphasise that many of the reforms introduced by the 1945-51 Labour government were real reforms, in the most basic sense that they substantially improved the lives (and the life chances) of millions of people. As Tony Cliff and Donny Gluckstein observe in their history of the Labour Party, “whatever the myths regarding the Labour Government of 1945-51 there is no doubt it was the most effective reformist Labour government of them all”.3

But 65 years after its foundation, under the Conservative-Liberal Democrat coalition government elected in 2010, every aspect of that welfare state is under attack. The 2012 Health and Social Care Act will remove the duty on the Secretary of State for Health to provide a comprehensive health service, while the requirement in the act that up to 49 percent of services can be tendered out to “any qualified provider” will rapidly lead to the privatisation of the NHS in England and Wales. Already between a quarter and a half of all community services are now run by VirginCare.4

In social care, a combination of cuts of around 30 percent to local authority budgets since 2010, increasingly restrictive eligibility criteria for services, and inadequate personal budgets will leave millions without the support they need and increasingly dependent on the family, and in particular women family members.5

And in place of what was once called social security, unprecedented cuts across all areas of benefits, especially disability benefits, the introduction of sanctions regimes which have contributed to 500,000 people being forced to use food banks, and a bedroom tax affecting around 600,000 people will increase the number of children living in poverty by 200,000,6 undermine families and force tens of thousands of people to uproot and move to other areas of the country or face eviction. All of this has been underpinned by a brutal ideological offensive against people on benefits which has contributed to a significant increase in levels of disability hate crime, increased rates of depression and anxiety, and an increase in the rate of suicide among those on benefits.

This article will explore the different rationales—economic, political and ideological—behind the current coalition assault on the welfare state. Clearly one important driver in Britain and elsewhere is the desire to shift the costs of a global crisis of capitalism onto the working class. To what extent, however, does the rhetoric of debt reduction also mask a more long-term ruling class objective of rolling back the post-war welfare settlement? And how far can a modern capitalist state, even one in the midst of what the former governor of the Bank of England has described as “the worst crisis at least since the 1930s”,7 do without some kind of welfare state? Answering these questions involves addressing the role of welfare provision within capitalism, which is what the next section of this article will attempt to do.

Assessing the past, present and future of the post-war welfare state, however, is also important for another reason. The emergence of Syriza in Greece has led to a reawakening of interest across Europe in the possibility of creating left electoral formations and left governments that can pose an alternative to austerity and neoliberalism. That interest is reflected in Britain in the People’s Assembly in 2013, the emergence of the Jimmy Reid Foundation, a left wing think tank in Scotland,8 and in the Left Unity Project, initiated by Ken Loach himself.9 As has been argued in this journal,10 the revival of such left reformist ideas and movements (in the sense of approaches which want radical change but which blur or reject the distinction between reform and revolution) following two decades in which the social democratic parties across the globe have been caught in the grip of neoliberalism is a very welcome development. However, it also carries dangers.

Loach’s The Spirit of ‘45, for example, while both powerful and moving, presents a largely uncritical portrayal of a government which, alongside its considerable achievements, also sent in troops on 18 different occasions to break strikes, left the former bosses in charge of the newly nationalised industries, and reimposed dental and prescription charges in 1951.11 As Marxist critics of the Attlee government such as John Saville and Ralph Miliband argued,12 whatever its achievements, even that government operated very clearly within the framework of capitalism and had no hesitation in putting the needs of capital before those of the working class. There are clearly dangers, then, both in overstating the achievements of such governments and in minimising the pressures they will face to capitulate to the pressures of global capitalism. These issues will be explored later in this article. Before then, however, it is necessary to look more closely at the contradictory role of welfare within capitalism.

Capitalism and Welfare

Given that the essence of the capitalist system is, in Marx’s phrase, “accumulation for accumulation’s sake”,13 the drive to extract as much surplus value as possible from workers, one might ask why capitalists bother to spend any money at all on welfare. And the simple but correct answer is that where they have a choice, they don’t. Consider these two accounts of child labour:

Children of nine or ten years are dragged from their squalid beds at two, three, four o’clock in the morning and compelled to work for a bare subsistence until ten, eleven or twelve at night, their limbs wearing away, their frames dwindling, their faces whitening, and their humanity absolutely sinking into a stone-like torpor, utterly horrible to contemplate.14

[The trafficked children] came from faraway Liangshan in Sichuan and most of them are not yet 16. The overseers sought and recruited them from families mired in poverty, promising them high wages; some were even abducted and sent off in batches to Dongguan and from there distributed by the truckload to factories across the Pearl River Delta. On unfamiliar soil these children are often scolded and beaten and have only one proper meal every few days. Some little girls are even raped. Day after day they undertake arduous labour. Some children think about escape, but the road is blocked. The overseers threaten them and warn them that if they try to run away, there will be a price to pay.15

The first is from a contemporary account, cited by Marx, by a local magistrate of conditions in the lace industry in Nottingham in 1861, the second from a recent study of the conditions of life for rural migrants in China, described in the book’s title as “scattered sand”.

What both examples show is that where there is a plentiful supply of labour power, what Marx called a relative surplus population,16 as there was in the early days of the industrial revolution in Britain and as there is in present day China, the issue of how to preserve and reproduce labour is not a central concern for capitalists or the state. Not surprisingly, then, for the 200 million Chinese migrant workers who have left their homes in search of work in the towns, there is little or no welfare provision of any sort, including healthcare provision. Similarly, while the deaths of more than 1,100 garment workers in a factory building collapse in Dhaka, Bangladesh, in April 2013, most of them women on subsistence wages, is an unspeakable tragedy for their families and friends, it is of much less significance, other than concerns about negative publicity, for companies such as Primark for whom they were producing cheap clothes, simply because there are plenty more desperate workers who will take their place.17

Where, however, the supply of labour is less plentiful or where labour becomes more skilled and consequently more expensive, losing workers through injury or disablement, or through working them to death doesn’t really make economic sense. It’s an issue explored by Marx in his discussion of the length of the working day in volume one of Capital. Ideally, he says, the mill owners would prefer their workers to work for 24 hours:

Time for education, for intellectual development, for the fulfilment of social functions, for social intercourse, for the free play of the vital forces of his body and his mind, even the rest time of Sunday (and that in a country of Sabbatarians!)—what foolishness!... Capital asks no questions about the length of life of labour power. What interests it is purely and simply the maximum of labour power that can be set in motion in a working day. It attains this objective by shortening the life of labour power, in the same way as a greedy farmer snatches more produce from the soil by robbing it of its fertility.18

In the longer term having workers, including small children, working 14 or 16 hours a day is very wasteful—as Marx argues, it’s like over-exploiting the soil. However, given that individual capitalists themselves won’t do anything about it for fear of losing their competitive advantage over their rivals, the state as the representative of the capitalist class as a whole is forced to step in, in this case in the shape of the Factory Acts of the 1830s and 1840s, to set down a maximum length for the working day. Ann Rogers sums it up as follows:

The argument between the mill owners and the rest of the ruling class in the 1840s was the first version of a dilemma which has faced the ruling class ever since. The system as a whole needs to spend money to make profits, yet every individual capitalist wants to spend as little as possible. This dilemma cannot be resolved and it appears constantly in different guises.19

Recent revelations of the lengths to which giant companies like Amazon, Google and Starbucks will go in order to avoid paying tax in the UK shows how that dilemma is played out today.20

So the first reason that welfare is necessary is to ensure the reproduction of labour power at a level that allows capitalists to compete. And that applies not just to economic competition but also to military competition—the welfare reforms introduced by the Liberal governments of 1906-14, for example, which included free school meals, unemployment benefit and old-age pensions were the result of discovering that a third of all men who volunteered to fight in the Boer War in 1900 were physically unfit for military service.21

A second reason for welfare spending is to mould the workforce to meet the needs of capital. The Poor Law Amendment Act 1834, for example, was one of the earliest measures aimed at instilling labour discipline in the new working class. The core principle of the Poor Law, the principle of less eligibility, was aimed at disciplining the working class by ensuring that the alternative to working—the Workhouse, or Poor House—was so awful that workers would accept any jobs and any conditions. As one of the Poor Law Commissioners, Sir George Nicholls, put it at the time, “I wish to see the Poor House looked to with dread by the labouring classes and the reproach for being an inmate of it extend down from father to son… For without this, where is the stimulus to industry?”.22 Similarly, the philosopher Jeremy Bentham, who developed the concept of “less eligibility”, according to which poor relief should always be set at below the level of income of the worst paid, argued that “only the cheapest fare should be served in the house: an ample fare might be served only if it did not ‘render the condition of the burdensome poor more desirable than that of the self-maintaining poor’”.23

Later in this article I will discuss the parallels between Poor Law ideology and the coalition’s current demonisation of the poor. It does not, however, take great political insight to see that the modern equivalent of less eligibility in Britain—and the current “stimulus to industry”—is provided by measures such as the Atos Work Capability Assessment test, the brutal sanctioning regime introduced in April 2013 for those who fail to meet every appointment, and a cap on benefits which means that those on benefits can never receive more than the national average wage, regardless of circumstances.

That need to mould the workforce shapes even the positive forms in which welfare is provided. The introduction in Britain of mass education in 1870, for example, can be seen as a gain for the working class in that it produced literate workers who had access to great literature and ideas, including socialist ideas. It was also, however, about instilling values of deference and obedience to their masters into working class children, in the same way that the division between grammar schools and secondary moderns in 1944 was a way of reminding working class kids of their place. Again, there are clear parallels with contemporary debates in England over the content of education, how it is taught, and also the proposed reintroduction of a ranking system that will brand working class children as failures from the age of 11.

But if welfare provision is driven by capital’s need to ensure the reproduction of labour power and to mould the working class to meet the needs of capital, a third factor is also of great importance—pressure on the ruling class from below, above all from the struggle of working class men and women to obtain a better life for themselves and their families, or more often, simply to survive. That struggle has taken a myriad of forms over the past 200 years, both local and national, from the fight for a shorter working day in the 1840s, rent strikes during the First World War which forced the government to bring in rent restriction legislation which remained in place for more than 30 years, through to present-day battles against hospital closures in Lewisham and day centre closures in Glasgow. As Marx noted in relation to the first of these movements: “The establishment of a normal working day is therefore the product of a protracted and more or less concealed civil war between the capitalist class and the working class”.24

Without such struggles and the reforms to which they have contributed, many of which in recent years have also involved an ideological challenge to the negative and demeaning way in which particular groups, including people with disabilities, are constructed,25 there would be no social progress. The key role that such struggles play in building working class self-confidence and self-organisation is why Rosa Luxemburg insisted that revolutionaries should be the best fighters for reforms.26

At the same time, what these gains also highlight is the contradictory nature of reforms under capitalism. For as the more far-sighted representatives of the ruling class have always recognised, limited welfare reform can also play a key role in offsetting social discontent and in averting a much more profound revolutionary challenge to the existing order.27 Many will be familiar with the statement by the Tory MP (and later minister in Thatcher’s government) Quintin Hogg in 1943 that: “We must give them reform or they will give us revolution”28 but much the same point had been made more than half a century earlier by Tory Joseph Chamberlain when he posed the question: “What ransom will property pay for the security it enjoys?”29 The “ransom”, he argued, was an early version of the welfare state, in the form of municipalisation of services.

From a ruling class perspective, then, welfare provision can play an important role in stabilising the system, especially during periods of heightened class struggle. Even then, however, such reforms have never been conceded willingly. As the Marxist historian John Saville observed:

Reforms, whether large or small, have always been opposed by some section or group within the ruling class; and it has been rare for any reform to be achieved without modification in the interests of the propertied class or within a short period of time… When faced with a challenge to any part of their privileged position, the ruling class in Britain have at all times retreated fighting.30

And in periods like the present, when the system is in deep crisis and the level of class struggle is at a low level, that class will go on the offensive to recoup whatever reforms they have conceded in earlier periods.

The post-war welfare state

The welfare state that emerged in Britain following the end of the Second World War was a huge gain for working class people in two main respects. Materially, it saw the extension for the first time of a range of social security benefits to the whole population. These included the raising of the school leaving age, the establishment of a comprehensive health service, retirement pensions and family allowances. Whatever their limitations, these were real reforms. But the welfare state was also a gain, albeit a contradictory one, in a second sense. For the fact that the reforms were introduced in Britain under a Labour government which had been elected with a massive majority on the back of the defeat of fascism meant that working class people felt a real sense of ownership of these reforms. They were the product of their struggles, and they therefore had a right to these new services (a view given respectable support in the notion of “social rights” put forward by one of the welfare state’s main theoreticians).31

In that respect, as Cliff and Gluckstein argue, the result was a strengthening of reformist consciousness within the working class. Reformist consciousness is double-edged. Negatively, it means that workers think they can improve their lives without the need to overthrow capitalism; positively, however, it means that workers believe that not only is reform possible but that they have a right to the fruits of these reforms: “Many of the gains of 1945-51 were not especially due to Labour’s efforts, yet the period planted the idea in the working class that workers had a right to a job, a right to decent housing and a right to health. It was society’s duty to provide them”.32 The extent to which that view of welfare as a right continues to pose real problems for the ruling class will be discussed later in this article.

In addition, in a very real sense the welfare state was a product of class struggle that changed the balance of class forces in Britain. For while it is true that the strike level in Britain in the immediate post-war period was much lower than it had been at the end of the First World War, different types of pressure from below were nevertheless crucially important in shaping the new welfare state. These included the perception that the Second World War had been a “People’s War” against fascism,33 the widespread determination that there should be no return to the poverty and the means-testing of the 1930s, and a series of mutinies in the army at the end of the war which brought back memories for the ruling class of the year 1919 when Britain was closer to revolution that at any time in the 20th century.34

The organisation Mass Observation, for example, found that as early as August 1942 one in three people had changed their political views, overwhelmingly to the left.35 It was a change in consciousness that was reflected in the ecstatic reception given to the Beveridge Report (the blueprint for the welfare state) when it was published in 1942, with over 600,000 copies being sold.36 Some 65 years after its foundation, the NHS in particular continues to hold a very special place within the consciousness of the British working class, reflected, for example, in its depiction as a key component of “Britishness” in the opening ceremony of the London 2012 Olympics devised by Danny Boyle (a classic Old Labour fusion of nation and class).

In the face of the most wide-ranging attack on the welfare state since its foundation, defending the material and ideological gains of the post-war period continues to be a central, if not the central, task, of socialists in the current period.

Having said that, it is important also to acknowledge the limitations of the welfare state created under the 1945-51 Labour government and the actual extent to which it challenged the structures of capitalism, let alone involved the achievement of socialism. For if the creation of the welfare state can with justification be seen as representing the high point of British social democracy, it also vividly highlights its weaknesses and limitations.

These weaknesses and limitations were cogently identified in an article written less than ten years after the creation of the NHS by John Saville. Identifying the relation of the welfare state to the achievement of socialism as “a central problem of contemporary Labour politics”, Saville challenged the arguments of those such as the (right wing) Labour intellectual Anthony Crosland who argued that the creation of the welfare state (alongside the “managerial revolution” and full employment) meant the end of capitalism. Against this, Saville argued that, while working class struggle had been one key factor in creating the welfare state, two other factors were also important, namely the requirements of industrial capitalism “and in particular the need for a highly productive labour force” and also the price the ruling class was prepared to pay for political security.37 Underestimating these two factors, he argued, would be “to accept the illusion that the changes are of greater significance than they are, as well as to misread the essential character of contemporary capitalism”.38

In relation to the first point, Saville highlighted “the relative ease with which social legislation was passed after 1945, largely because the proposals represented a minimum which the Tories had already accepted in principle”.39 In similar terms, the most influential mainstream history of the welfare state refers to its introduction as “a very British revolution” with the Tory Hogg describing the Beveridge Report as “a relatively Conservative document”.40 This reflected a growing acceptance by the more progressive sections of the ruling class of the need for state involvement in the economy and society. In part, that recognition stemmed from the failure of neoclassical economic policies in the Great Depression of the 1930s, in part from the experience of Roosevelt’s New Deal, of state regulation of the British economy during the war (including rationing) and of the increasing popularity of Keynesianism as an economic theory in both of the main parties.

Secondly, Saville argued, far from the welfare state being a unique product of British socialism, advanced capitalism’s need for welfare was reflected in the fact that many other Western states had similarly developed welfare states in the post-war period, often with more generous provision than in Britain:

If Britain is compared with the countries of Western Europe—most of which not even the Fabian Society would classify as socialist—the techniques and the essential structure of social security systems will be found to be comparable in all important respects.

Saville did not dispute the central role of class struggle in shaping welfare provision. On the contrary, he argued that:

In the last resort the determining factor in the evolution of the welfare state will be the degree of organisation, and the determination to insist upon change, on the part of the working people themselves.41

His concern, however, was to highlight the contradictory nature of welfare, including the extent to which it also benefited the ruling class, and to challenge the idea that the welfare state could be equated with the achievement of socialism.

For much of the 1950s and 1960s the argument did not seem of central importance. As long as the system was expanding and living standards were rising, as they did in the long boom between the late 1940s and the early 1970s, it was possible for governments in most advanced capitalist countries (including Japan)42 not only to maintain many of these reforms but also to extend them, regardless of whether social democratic or conservative governments were in office. However, as Chris Harman observed:

Once the upward dynamic of the boom began to weaken, the costs of welfare became a crucial problem. The two functions—of increasing productivity and buying consent—were no longer complementary. Capital had to try to reduce the cost of maintaining and increasing productivity, even if it upset its old mechanisms for keeping control over the working class.43

Thus the first serious attacks on the welfare state in Britain came not in 2008, or even with the election of Margaret Thatcher in 1979, but several years previously, with that of a Labour government in 1974. Labour took office following the re-emergence of a world economic crisis the previous year that had resulted in high levels of unemployment and rampant inflation. Despite having been elected on the back of a miners’ strike which brought down the Tory government of Ted Heath, the new government’s first priority was to restore the health of capitalism. In response to pressure from the International Monetary Fund, it imposed unprecedented cuts on public spending, in what Nicholas Timmins identifies as “the first great fissure in Britain’s welfare state”.44 To quote Cliff and Gluckstein:

Public spending levels were reduced in 1976-8 by an incredible 9.5 percent in real terms after allowing for inflation. No area of welfare was safe. Tens of hospitals closed and schools, houses and roads suffered. Nothing Thatcher did later matched the carnage wrought by Labour in 1977.45

As Peter Riddell, the Political Editor of the Financial Times, commented a few years later, “if there has been a Thatcher experiment, it was launched by Denis Healey [Chancellor of the Exchequer in the 1974-9 Labour government]”.46 These remained the most severe cuts to welfare until the coalition government’s cuts in 2010.

Coupled with policies of wage restraint that resulted in the biggest fall in living standards for more than a century, these attacks on welfare by a Labour government produced profound bitterness and demoralisation within the working class and paved the way for the return of the Tories under Thatcher. However, they were not, it should be noted, the first occasion on which Labour had put the priorities of capitalism above the health and social care needs of working class people. As early as 1951 the then Labour government had reintroduced prescription charges and charges for dentures and spectacles in order to help fund the Korean War. As Timmins comments, “Within three years of its birth, the completely comprehensive and free health service had ceased to be”.47

Thatcher, neoliberalism and welfare

Contrary to popular belief, dismantling the welfare state was not a key priority for Thatcher following her election in 1979.48 There were three reasons for this. First, she had bigger fish to fry, in the form of the trade unions. Second, with British Social Attitudes surveys showing very high levels of popular support for the welfare state, and especially the NHS, throughout her term of office, attacking them directly carried huge electoral risks. Third, contrary to the myths of “Thatcherism” as a coherent ideology cultivated by some on the left in the 1980s, Thatcher had no clear idea about what to do with the welfare state.

It was not until her third term of office in 1987, then, that Thatcher and her advisers (notably the Sainsbury’s chief executive Sir Roy Griffiths) began to develop the ideas which were to be picked up and developed by New Labour under Tony Blair—the state as purchaser rather than provider of services; the outsourcing and privatisation of health and social care services; the introduction of competition and a business ethos into public services in the form of managerialism and New Public Management; and the recasting of patients and clients as customers.

As Chris Harman argued, the purpose of these changes was at least as much political as economic:

The competitive extraction of surplus value demands the continuation of part of the welfare state. The political realities of maintaining power through bourgeois democracy rule out dismantling the rest of it. This is where internal markets, market testing, contracting out, privatisation, encouraging private pensions and all the rest come in. They are mechanisms that are meant to depoliticise the process of social provision, so making it easier to refuse it to those deemed not to deserve it on the one hand, and to clamp down on the workers in the welfare sector on the other.49

It would be foolish to understate the changes that more than two decades of neoliberalism have wrought on the welfare state. Here I shall focus solely on the example of social care.50

Areas such as residential care are now overwhelmingly located in the private sector, with one study suggesting that “the privatisation of social care services is arguably the most extensive outsourcing of a public service yet undertaken in the UK”.51 In stark contrast, however, to neoliberal pretensions to increasing choice and control, the introduction of competition into residential social care has resulted in the domination of the market by a small number of very powerful multinational corporations (including, for example, the Royal Bank of Scotland and the Qatar Investment Fund) whose primary concern is not the welfare of the residents in the homes which they own but rather with maximising their profits. When they fail to do so sufficiently or where there are larger profits to be made elsewhere, then they will simply pull out, creating massive instability in the sector and undermining the continuity of care which is a key element of good quality social care. The collapse in 2011 of Southern Cross, until then the largest provider of residential care for older people in the UK, is simply the most glaring example.52

Nor has the increased role of the private sector in social care resulted in the promised improved quality of care. An investigation by the Financial Times in 2011 showed that the quality of care in one in seven privately run homes in England was rated “poor” or “adequate” by the government regulator. The low ratings indicate potentially serious problems such as a failure adequately to feed or clean residents. By contrast, the low ratings applied to only one in 11 homes run by non-profit organisations or local authorities. The report cited an inspector from the regulatory body, the Care Quality Commission, who wished to remain anonymous, as saying: “Fundamentally, it’s now got to a point of being dangerous [for residents]—and it’s going to get worse. If I had a relative who needed to go to a care service, I’d be concerned”.53

An inquiry carried out by the Equality and Human Rights Commission into the human rights of older people receiving home care expressed similar concerns. While around half of the older people, friends and family members who gave evidence to the inquiry expressed satisfaction with their care, the inquiry also revealed many examples of older people’s human rights being breached, including physical or financial abuse, disregarding their privacy and dignity, failing to support them with eating or drinking, treating them as if they were invisible, and paying little attention to what they want. Some were surprised that they had any choice at all as they thought they had little say in how their care was arranged.54

While historically social care workers have always experienced poor conditions and low rates of pay, the introduction of competition into social care over the past 20 years has led to a “race to the bottom” in which staff pay, conditions and training have undoubtedly deteriorated.55 The Financial Times investigation showed that the private sector pays lower wages on average than the non-profit and public sectors and has higher staff turnover rates.

One aspect of this—and a theme that recurs throughout the EHRC Report—is the very limited amount of time that carers are permitted to spend with their clients. The report cites one example from the daughter of an older woman with Huntington’s disease who described the serious consequences of her mother receiving no help with eating or drinking (treatment which, the report’s authors argue, might well amount to inhuman and degrading treatment within Article 3 of the European Convention on Human Rights):

Carers were supposed to feed and give drinks but simply left them beside a person who was physically unable to feed herself because the carers had to go to their next client. My mother went down to seven stone. Someone with Huntington’s needs an hour per meal to swallow food/drink, and special care when it all falls out of their mouth, and they get very damp and dirty. They also need 4,000 calories per day to maintain body weight due to the chorea movements that constantly burn energy—Daughter of older woman, South of England.56

This was not, however, an issue of uncaring workers. The report quotes several workers who shared their clients’ frustration at the lack of time they were permitted to carry out their caring tasks. For one:

The least satisfying is not having enough time, you try not to hurry them [older people] (or to let them know you haven’t enough time) but you are aware that your next client is watching the clock and waiting for you to arrive—Home care worker, voluntary sector provider, South West.57

The end of the welfare state? 2008 and after

Even before the onset of the financial crisis of 2008, then, large parts of the welfare state had already been transformed by the application of neoliberal policies under both Conservative and New Labour governments. The period since the election of the Con-Dem coalition government in 2010, however, has seen the most severe assault on the welfare state since its foundation, beginning with Chancellor George Osborne’s Comprehensive Spending Review of 2010.58 That review cut £80 billion from public sector spending, £18 billion of which came from welfare spending. In June 2013 a further £11.5 billion was cut, including £2.6 billion from local authority budgets.

There have been three main elements to that assault. Firstly, there are the cuts to local authority services. In contrast to the NHS where, for the most part, services have been provided free at the point of need (and funded through general taxation), social care services are provided on a means-tested or discretionary basis. Faced with coalition-imposed cuts of 33 percent over a three-year period on the one hand and rising demand as a result of people facing cuts in benefits, an ageing population and other factors, the response of councils throughout the UK has been to ration services through ever tighter eligibility criteria (usually invoking “substantial” or “critical” criteria). The result is that many people who would previously have received a service are now simply refused or are directed towards voluntary sector organisations, such as Citizens Advice Bureaux or food banks.

In addition, the shift towards personalisation or self-directed support, a policy with progressive origins in the disability movement and aimed at giving disabled people greater choice and control over services, is being used by many councils as a pretext for cutting services and providing people with individual budgets. These budgets often do not allow them to purchase even the day centre services they previously used.59

Then there are the attacks on welfare benefits. On top of earlier changes to disability benefits, April 2013 saw the introduction of a “bedroom tax”, forcing thousands of people to pay an extra £60 to £80 a month just to stay in their homes, cuts to council tax benefits, a cap on the total amount claimants can receive in benefits regardless of their circumstances, and the introduction of Universal Credit, which will replace a number of other benefits.60 While the government claims no one will lose out, an impact assessment has revealed 2.8 million people will receive less under Universal Credit than under current arrangements; it has already started to replace existing benefits and is due to be rolled out nationally by 2017.61 In June, Osborne imposed a total cap on overall spending on benefits as well as barring unemployed workers from claiming any benefit in the first week of unemployment.

Finally, there is increased privatisation. The privatisation of the NHS, made possible by the 2012 Health and Social Care Act, poses the most immediate threat62 but the aim of the coalition’s Open Public Services Programme is to open up all public services (other than the court system and the security services) to competition from “any qualified provider”; outsourcing of services, in other words, will become the default position.63

Taken together, what these attacks show is that the coalition is indeed exploiting the crisis to push through changes which would have been more difficult in “normal” times and, in Charlie Kimber’s words, “to force the market even deeper into society, increase privatisation, weaken workers’ collective strength, and make the welfare state serve capital rather than fulfil any of the needs of the majority”.64 And the clearest indication that they are driven by ideology rather than the pressures of deficit reduction is the fact that on the very same day that the bedroom tax was announced in parliament (estimated to “save” the Treasury £480 million) the top rate of tax in the UK was cut from 50 percent to 45 percent, resulting in a loss of revenue of £1 billion.65

The sheer scale of the assault has led some on the left, including former Bennite Labour health minister Michael Meacher, to argue that it signals the end of the welfare state and the realisation of a long held dream of the Thatcherite right of the Tory Party:

The financial crash of 2008-9 gave them the chance they’d been waiting 70 years for to wind up our post-war social democracy and replace it by their ultimate objective: a fully market state. Since Osborne must know as well as anybody that his policy is utterly failing, the only rational reason he persists with it must be that it provides a cover for shrinking the state and minimising or eliminating the welfare safety net, and that task is not yet finished.66

Meacher’s argument is flawed on two counts. First, he ignores the high degree of continuity between the coalition’s welfare reforms and those of the previous New Labour governments. The promotion of the private sector in the NHS, the dogma that “work is the route out of poverty” and the introduction of workfare (and its outsourcing to companies such as Serco and G4S), the assault on disability benefits (including the hated Work Capability Assessment) were all measures introduced under Tony Blair and Gordon Brown. And as Shadow chancellor Ed Balls’s response to Osborne’s 2013 Spending Review showed, it is a continuity which now extends to a commitment to keep in place all the cuts in services and benefits imposed by Cameron and Osborne.67 New Labour in government then, laid the foundations for the coalition’s current assault on welfare while the inability of Miliband and Balls to offer a coherent alternative to austerity is one of the main reasons that Cameron and Osborne are having such an easy ride.

Secondly, draconian as these cuts are, to talk of “eliminating the welfare safety net” underestimates the huge difficulties, both economic and political, that the Tories face in cutting welfare. Spending on the NHS under the coalition, for example, while not involving the annual 4 percent increases of previous decades, has remained constant (and was even increased slightly in Osborne’s June 2013 Spending Review).68 According to the Institute for Fiscal Studies (IFS): “even if the health service budget was frozen beyond 2014/15, by 2017/18 it would still represent a similar share of national income as it did in 2007/08”.69

Similarly, again according to the IFS, health, long-term care and social security accounted for a third of all public spending in 1978-9. They now account for half of spending. Include education and the “core” welfare state—education, health, social security and social care—accounts for nearly two thirds of spending, up from a half at the end of the 1970s.70 The reason for that gap between neoliberal rhetoric of “shrinking the state” and reality is, as argued earlier, that however much neoliberal governments in advanced capitalist countries might want to cut spending, the need to compete with their rivals leaves them with no option but to spend money on the maintenance and reproduction of the labour force. The fact, for example, that a recent OECD study has shown that young adults in England have scored among the lowest results in the industrialised world in international literacy and numeracy tests is something that no government can afford to ignore.71

The need to spend on core areas of welfare, however, is still compatible with savage attacks on service provision for particular groups, such as disabled people. For as Harman has argued, the history of welfare provision over the last 180 years has been “a history of attempts to separate that provision which is necessary for capital in the same way that wage payments are and that which is unnecessary but forced on it by its need to contain popular discontent”.72

In periods of crisis the need for states to restructure their operations to accord with the law of value means:

Trying to impose work measurement and payment schemes on welfare sector employees similar to those within the most competitive industrial firms. On the other side it means cuts in welfare provision so as to restrict it as much as possible to servicing labour power that is necessary for capital accumulation—and doing it in such a way that those who provide this labour power are prepared to do so at the wages they are offered.73

In the current context that involves cutting services and benefits for sick and disabled people, forcing them into poorly paid or non-existent jobs (even when the Workfare figures show it makes no economic sense to do so) and driving down the costs of labour power by creating a climate of fear in which workers will be prepared to accept cuts in wages and conditions in order to remain in employment. This is the 21st century equivalent of the 19th century Poor Law “stimulus to industry”. The fact that British workers have suffered an unprecedented fall in their average hourly wages of 5.5 percent since mid-2010 (adjusted for inflation), the fourth worst decline in 27 European countries, shows that it is clearly a strategy which is enjoying some success.74

Where Meacher is right is in pointing to the fact that these cuts in benefits form part of a wider ideological assault on the whole idea of the welfare state. As noted earlier, the post-war welfare state implanted in the heads of millions of working class people that they had a right to housing, to health, to education—in other words, that they were worth it. It is that conviction that Cameron is seeking to undermine when he argues against what he has called “the culture of entitlement”, spelled out in a speech in 2012:

We have, in some ways, created a welfare gap in this country—between those living long term in the welfare system and those outside it. Those within it grow up with a series of expectations: you can have a home of your own, the state will support you whatever decisions you make, you will always be able to take out no matter what you put in. This has sent out some incredibly damaging signals. That it pays not to work. That you are owed something for nothing. It gave us millions of working-age people sitting at home on benefits even before the recession hit. It created a culture of entitlement.75

There is, of course, no substance whatsoever in any of this. The government’s claim, for example, that most of Britain’s social problems stem from the behaviour of 120,000 “troubled” families has been exposed by leading social policy academic Ruth Levitas as “policy-making by anecdote, more akin to tabloid journalism than serious research” that conflates a tiny number of dysfunctional families with much larger numbers who are simply poor.76 Secondly, far from people on benefits not wanting to work, the “in-work poor”, those working but receiving benefits because their pay is so low, now exceed those who are unemployed.77 And thirdly, the fact that just 5.3 percent of people on incapacity benefit were helped into employment for at least six months by the government’s work programme in its second year of operation, well below the government’s minimum performance benchmark of 16.5 percent, shows that the issue is lack of jobs, not unwillingness to work. None of which, of course, prevents Cameron and Osborne from demonising those on benefits, including presenting child-killer and wife-beater Mick Philpott as emblematic of those on benefits. If Cameron wins the argument, and that notion of a right to welfare is lost, then we are indeed back to the Poor Law ethos of deserving and undeserving poor, of charities, servility and food banks (already relied on by half a million people).

Conclusion

The post-war welfare state in Britain and in other European countries was a huge gain for working class people. With all its limitations, it provided them with a degree of security they had never previously enjoyed and removed much of the fear associated with what Beveridge called the “five giants” of “Want, Disease, Ignorance, Squalor and Idleness”. Defending these gains, including the notions of collectivism and universalism, at a time when they are under attack as never before, is a key priority for socialists. But if we are to defend them successfully—and move beyond them—the history of the welfare state shows us that there are three key lessons we must learn.

First, welfare under capitalism is always provisional. As Saville argued almost 60 years ago, “reforms, whether large or small, have always been opposed by some section of or group within the ruling class; and it has been rare for any reform to be achieved without modification in the interests of the propertied classes or within a short period of time”.78 While the system is expanding, reforms can be conceded. When, however, the system moves into crisis, the ruling class will do its utmost to recoup whatever concessions it has made in earlier periods.

Secondly, the commitment of social democratic parties to working within the framework of capitalism means that such parties cannot be trusted to defend the welfare state. This is as true of Old Labour as New Labour, left as well as right, Nordic social democracy as much as British Labour. In refusing to defend welfare, Miliband and Balls stand in a long and (dis)honourable tradition. As early as 1948 Sir Stafford Cripps, a Labour chancellor who came from the left of the party and had been expelled in the 1930s by the right wing leadership, told the TUC: “There is only a certain sized cake. If a lot of people want a larger slice they can only get it by taking it from others”.79 He then introduced an austerity budget that shifted taxation from income tax to the forerunner of VAT which disproportionately hits workers and the poor.

Nor does the “Nordic model” offer a way forward. As one recent article on the riots in Sweden noted:

When it comes to privatising public services, Stockholm is way out in front of Westminster. Which is why Michael Gove adores their free school and voucher system; and why George Osborne enjoys being photographed alongside his Swedish counterpart Anders Borg. The Economist...recently wrote “The streets of Stockholm are awash with the blood of sacred cows”.80

Finally, even at its very best, the welfare state can do no more than offer protection against the ravages of a system based on exploitation, oppression and war. That protection is vital and defending it in the current period means above all refusing to allow the ruling class to divide and rule through their scapegoating of the unemployed, immigrants, the sick and the disabled. We need to go further, however. Reviewing the experience of the new welfare state in 1957, John Saville argued that “the relation of the welfare state to the achievement of socialism is a central problem of contemporary Labour politics”. Similarly today, our horizons need to extend beyond the experience of either the 1945-51 Labour government or of Scandinavian social democracy. And in understanding that relationship between welfare and socialism, we could do worse than look to Bertolt Brecht’s poem “A Bed for the Night” written in the early 1930s, a time when, like today, global capitalism was in crisis, the far right was on the rise and people were fearful for the future of themselves and their families: “It won’t improve relations among men/ It will not shorten the age of exploitation/ But a few men have a bed for the night.”


Notes

1: Timmins, 1996 provides a useful narrative account.

2: Harman, 2008.

3: Cliff and Gluckstein, 1988, p218.

4: Davis and Tallis, 2013; Gosling, 2013.

5: Humphries, 2013.

6: Butler and Gentleman, 2013.

7: Interview with Mervyn King, 2011, Sky News, http://tinyurl.com/pvvqc5z

8: Go to http://reidfoundation.org/

9: Go to http://leftunity.org/

10: Blackledge, 2013.

11: Cliff and Gluckstein, 1988, chapter 11.

12: Saville, 1957; Miliband, 1972.

13: Marx, 1976, p742.

14: Cited in Marx, 1976, p353.

15: Cited in Hsiao-Hung Pai, 2012, p52.

16: Marx, 1976, pp782-798.

17: Go to www.bbc.co.uk/news/world-asia-22526786

18: Marx, 1976, pp375-376.

19: Rogers, 1993, p29.

20: Huffington Post, 2013.

21: Rogers, 1993, pp11-12. The recent, and wholly uncharacteristic, promotion of universal free school meals by Education Secretary Michael Gove is best understood as an example of this same concern.

22: Cited in O’Brien, 2000, p26.

23: Cited in O’Brien, 2000, p27.

24: Marx, 1976, p412.

25: Slorach, 2011.

26: Luxemburg, 1989.

27: Harvey, 2010, p158

28: Hansard, 17 February, 1943.

29: Cited in Saville, 1957, p14.

30: Saville, 1957, p10.

31: Marshall, 2006.

32: Cliff and Gluckstein, 1988, p254.

33: Gluckstein, 2012.

34: Gluckstein, 2012; Rosenberg, 1995.

35: Timmins, 1996, p37.

36: Timmins, 1996, p23.

37: Saville, 1957, p6.

38: Saville, 1957, p6.

39: Saville, 1957, p16.

40: Cited in Timmins, 1996, p47.

41: Saville, 1957, p9.

42: Gould, 1993.

43: Harman, 1984, p107.

44: Timmins, 1996, p315.

45: Cliff and Gluckstein, 1988, pp325-326.

46: Cited in Cliff and Gluckstein, 1988, p322.

47: Timmins, 1996, p158.

48: Timmins, 1996, p372.

49: Harman, 2008, p116.

50: This section draws heavily on Ferguson and Lavalette, 2013.

51: Gosling, 2011, p8.

52: BBC News, 2011.

53: O’Connor and O’Murchu, 2011.

54: EHRC, 2011.

55: Cunningham, 2008

56: EHRC, 2011, p45.

57: EHRC, 2011, p72.

58: Yeates and others, 2011; Lapavitsas and others, 2012.

59: Beresford, 2013.

60: Dunk, 2013.

61: Ramesh, 2012.

62: Davis and Tallis, 2013.

63: TUC, 2011.

64: Kimber, 2011.

65: Eaton, 2013.

66: Meacher, 2013.

67: Ferguson, 2013.

68: Guardian, 2013.

69: Crawford and Emmerson, 2012.

70: Crawford and Johnson, 2011.

71: OECD, 2013.

72: Harman, 2009, p138.

73: Harman, 2009, pp137-8.

74: Press Association, 2013.

75: Cameron, 2012.

76: Levitas, 2012.

77: Aldridge, 2012.

78: Saville, 1957, p10.

79: Cited in Basketter, 2007.

80: Chakrabortty, 2013.


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