3

• Labour and the Welfare State

  1945
• Main features of the welfare state introduced under Attlee

  • The National Insurance Act (1946)
  • The Industrial Injuries Act (1948)
  • The National Health Service Act (1946)
  • The National Assistance Act (1948)
  • The Education Act (1944)
  • The Family Allowances Act (1945)
• Attlee's Labour government had an overwhelming victory (148 overall)
• Reasons for Labour's victory

  • Imbalance electoral favored Labour
  • Conservatives associated with grim depression years
  • Failure of Conservative-dominated National Government to prevent war
  • Labour's progressive image
  • Impressive wartime record of leading Labour figures
  • Conservatives' poor electioneering: Churchill's blunders
  • Zeitgeist favored Labour's reforming ideas
• Quality of Labour's leaders: Attlee, Cripps, Bevin, Morrison, Dalton, Bevan
• Beveridge's Report in 1942 had an eager response from Labour
• Basic objectives of the welfare state were accepted by all parties as a post-war necessity, reflecting the principle of collectivism in Britain
• For Churchill, the Beveridge Report was not a socialist report, and he had reluctance because of the cost
• In 1945, Labour government applied the main proposals of the Beveridge Report
• The introduction of the welfare state was described as a social revolution, built upon what was already there, with the nation ready for such a revolution, and as a responsible act of social reconstruction
• Bevin's speech faced resounding criticism from the conservative opposition
• Churchill and the Conservatives opposed the welfare state measures, but were committed to their preservation and extension in the future
• The British Medical Association resisted the introduction of the NHS, fearing a loss of privileges and reduction in income for consultants and senior doctors
• Aneurin Bevan, as Minister of Health, was responsible for the introduction of the NHS
• Bevan had to 'buy off' the BMA by 'stuffing their mouths with gold' to get them to agree to enter the NHS
• The introduction of the NHS led to fewer workers being absent, increased efficiency and wages, and higher tax yields, allowing the state to finance its welfare provision
• Forerunners to the welfare state

  • Family Allowances Act
  • Education Act
  • National Insurance
  • Industrial Injuries
  • National Assistance
  • National Health Service
• There was a debate over whether the principles behind the creation of the welfare state were liberal or socialist
• The Labour government had an extensive restructuring of the economy, including the nationalisation of Britain's major industries
• Industries nationalised by Labour

  • Coal
  • Civil aviation
  • Cable and wireless
  • The Bank of England (1946)
  • Road transport
  • Electricity (1947)
  • Gas (1948)
  • Iron and steel (1947)
• The rationale for nationalisation was to achieve greater safety, productivity, efficiency, and improve the quality of the nation's essential services
• The nationalisation of iron and steel was opposed, as it was seen as a public utility but privately owned manufacturing industry that was already successful and profitable
• The row over iron and steel proved a godsend to the Conservatives
• The Labour government experienced serious financial difficulties, including a debt of 4.198 million pounds and a balance of payments deficit of nearly 1 billion pounds
• Exports of manufacturers had dropped by 60% during the war, and the shrinkage of invisible exports from 248 million pounds in 1938 to 120 million pounds in 1946 contributed to the financial difficulties
• The costs of maintaining overseas military commitments had quintupled between 1938 and 1946
• The Labour government obtained a loan of 6 billion dollars from the USA and Canada, but the strong US dollar dominated international commerce, creating a 'dollar gap' that drained part of the loan
• Britain's agreement with the USA as a Cold War ally made the financial situation worse, as did the development of an independent nuclear deterrent
• The Labour government adopted a policy of austerity, using rationing and tight economic controls to prevent inflation and keep employment high while continuing the welfare program
• This led to further rationing and shortages, and in 1949 the pound sterling was devalued from 4.03 pounds to 2.80 pounds
• The severe winter of 1946-47, with freezing cold and heavy snowfalls, led to fuel shortages and regular cuts in domestic and industrial electricity supplies, with 4 million workers laid off
• The country was poorly prepared for dealing with this situation
• The Labour government was forced to accept the Marshall Plan, which provided 15 billion dollars to Europe, but this tied Britain to the USA in a relationship of 'beggar and master' and denied the government any chance of acting independently in the post-war period
• Main achievements of the Attlee governments

  • Implemented a large-scale nationalisation programme
  • Created the Welfare State
  • Helped convince the USA of the need for the Marshall Plan
  • Granted Indian Independence (1947)
  • Carried out a major housing program, resulting in one million new homes being built
  • Played a key role in the formation of the North Atlantic Treaty Organisation
  • Stated the program that turned Britain into a nuclear power
• The policies of Attlee's governments were considered radical, representing a 'total change' from the pre-war period
• The outbreak of World War II was a foundational moment in the British psyche, with the experience of 'total war' and the 'home front' shaping expectations for social change
• The 'Blitz spirit' and 'Blitz democracy' exemplified by the shelter community organized by Mickey Davis in Spitalfields reflected a sense of shared experience and collective effort during the war
• The narrative of Britain standing alone against Hitler and being the savior of Europe shaped British perceptions of their world status and the role of the Empire and Commonwealth
• The economic effects of the war, including disruption to overseas trade and exports, depletion of gold reserves, and huge debts, contributed to the financial difficulties faced by the Labour government
• The war led to increased social solidarity and changing attitudes towards the role of government, with expectations of 'collective effort, collective reward' and 'never again' going back to the pre-war conditions