The welfare state: from hung, drawn and quartered to Tory privatisation

Thatcher scary

The mess that Thatcher left in her wake is verified by several longitudinal studies. Dr. Alex Scott-Samuel and colleagues from the Universities of Durham, West of Scotland, Glasgow and Edinburgh, sourced data from over 70 existing research papers, which concludes that as a result of unnecessary unemployment, welfare cuts and damaging housing policies, the former prime minister’s legacy:

includes the unnecessary and unjust premature death of many British citizens, together with a substantial and continuing burden of suffering and loss of well-being. 

The article also cites evidence including the substantial increase in income inequality under Thatcher – the richest 0.01% of society had 28 times the mean national average income in 1978 but 70 times the average in 1990, and there was a rise in UK poverty rates from 6.7% in 1975 to 12% in 1985.

The research article concludes that:

Thatcher’s governments wilfully engineered an economic catastrophe across large parts of Britain by dismantling traditional industries such as coal and steel in order to undermine the power of working class organisations, such as unions.This ultimately fed through into growing regional disparities in health standards and life expectancy, as well as greatly increased inequalities between the richest and poorest in society.

New Right Conservatives have a curiously evidence-resistant conviction that the “big state” has somehow stymied our society: that the “socialist relic” – our NHS and our Social Security system, which supports the casualties of Tory free markets, have somehow created those casualties. But we know from history and recent events that competitive individualism and market choice-driven Tory policies create a few haves and many have-nots.

Tory rhetoric is designed to have us believe there would be no poor if the welfare state didn’t somehow “create” them. If the Conservatives must insist on peddling the myth of meritocracy, then surely they must also concede that whilst such a system has some beneficiaries, it also creates situations of insolvency and poverty for others.

In a wealthy so-called first world democracy, it is profoundly uncivilised and anti-democratic to simply dismiss people experiencing poverty and hardship effectively as collateral damage, and terribly cruel and irresponsible to blame those people for the situations of difficulty and deprivation created by policies and the socio-economic framework itself.

This wide recognition that the raw “market forces” of stark laissez faire cause casualties is why the welfare state came into being, after all – because when we allow such competitive economic dogmas to manifest – as the stormy present – there are winners and losers. That is the nature of competitive individualism, and along with inequality, it’s an implicit, undeniable and fundamental part of the meritocracy script.

And that’s before we consider the fact that whenever there is a Conservative-led government, there is no such thing as a “free market”: in reality, all markets are rigged to favour elites.

Cameron is continuing to build on Thatcher’s legacy. We know from the Central Policy Review Staff (CPRS) report, which was encouraged and commissioned by Margaret Thatcher and Geoffrey Howe in 1982, that there was a radical, politically toxic plan to dismantle the welfare state, to introduce education vouchers, ending the state funding of higher education; to freeze welfare benefits and to introduce an insurance-based health service, ending free health care provision of the NHS. One of the architects of the report was Lord Wasserman, he  was one of Cameron’s advisors until 2012.

A confidential cabinet memorandum by the Central Policy Review Staff in September 1982, said: “This would of course mean the end of the National Health Service.” The report was declassified and released in 2012 by the National Archives under the 30-year rule.

But the fear of the scale of opposition to the plan meant the grand dismantling of the welfare state didn’t happen. Instead the Conservatives have planned and worked to take it apart a piece at a time.

In 1982 unemployment rose above three million. Yet the Tories were happy with further increases to try and drive down wages. John Sparrow of the Cabinet Office’s Central Policy Review Staff think-tank, wrote in a June memo to Thatcher that the youth training scheme, introduced in 1983, would be “likely to displace some older workers”.

He continued:

Displacement is not necessarily a bad thing, since it puts downward pressure on wage rates.” Sparrow noted that government plans to end out-of-work benefits for 16 year olds would remove them from the unemployment figures.

Fast-forward to the present: David Cameron is prepared to consider making workers pay into flexible saving accounts to self-fund periods of illness and unemployment benefits, Downing Street has confirmed.

The idea was first floated by Iain Duncan Smith who said he was “very keen” to have a debate about encouraging people to use personal accounts to save for unemployment or illness, even though it is not “official” government policy.

Duncan Smith told the Sunday Telegraph:

We need to support the kind of products that allow people through their lives to dip in and out when they need the money for sickness or care or unemployment.

We need to encourage people to save from day one but they need to know that they can get some of the money out when their circumstances change. This is not government policy but I am very keen to look at it, as a long-term way forward for the 21st century.

Duncan Smith seems to be suggesting that benefits are replaced with a kind of unemployment insurance scheme as seen in the US or products known as “fortune accounts”, which are used in Singapore.

Asked about the idea of workers saving up for their sickness and unemployment benefits, Cameron’s official spokeswoman confirmed he was prepared to consider such a model. She said:

I think the PM shares the work and pensions secretary’s view that we should be doing more to encourage people to take personal responsibility for how they manage their affairs.

The proposal of fortune accounts for the UK was examined in depth in a paper by the Right-wing libertarian Adam Smith Institute thinktank in 1995, which considered how people could go to a single private provider for an account that gave them long-term care insurance, disability cover, health insurance, savings fund management and unemployment insurance.

The paper suggested:

Many other things that we often regard as ‘welfare’ today are also insurable and will be part of the fortune account package. Cover against incapacity to work, long-term care services, and disability, will all be in the package.

A report from Civitas argued (preemptively) that National Insurance is “no longer fit for purpose” and that everyone in work should be forced to save into a private pension to help shoulder the burden of the rising costs of old age.

Civitas professorial research fellow Peter Saunders argued in the report, titled Beyond Beveridge, that the principle that those who are able to should pay into the system has been eroded and “taxpayer-funded hand-outs” have increasingly replaced contributions-based benefits.

He goes on to say that whilst the main purpose of the proposed personal welfare accounts would be for retirement saving, they could also provide cover for when times are tough during periods of short-term unemployment, sickness and parental leave.

It reads like Daily Mail dogma to me.

The report reviews Britain’s National Insurance system and
proposes that it be replaced by compulsory “personal welfare

accounts.”

The introduction of personal insurance schemes would mark the end of welfare provision as we know it. Furthermore, those least likely to be able to afford the premiums are those most at risk of losing their jobs.

The Tories fully intended that the welfare “reforms” were the beginning of the end of our welfare state. The welfare cuts were ushered in strictly because of the despotic use of “financial privilege” by Cameron to bypass the widespread and vehement opposition to the Bill.

At the time, such was my dismay at the proposed welfare “reform” Bill that I emailed the entire House of Lords, imploringly. After using a reasoned approach, my second email simply said: the welfare reforms must not happen. Many of the peers and members replied, and many responded with “agreed.” But Cameron made the “reforms” happen anyway and apparently felt no obligation to observe the niceties of democratic process.

The Tories clearly have no intention of ensuring a safety net for citizens and have plotted to dismantle our welfare state since the Thatcher era. This is a long-planned outcome for the Tories. Social security and public services are in serious jeopardy.

Cameron’s rhetoric is full of references to “rolling back the state”, the “re-awakening of community spirit”, and a restoration of the kind of “intermediate civic institutions” that preceded the welfare state. The whole idea of Cameron’s “big society” is that private charities fill the holes created by public spending cuts.

Food banks have increasingly replaced welfare, for example, yet the point of post-1945 European welfare states was to free those in need from dependence on the insecurity of private generosity, which tends to miss out the socially marginalised, and to be least available when times are hardest.

Welfare, or social security, if you prefer, has provided a sense of security and dignity that we never previously enjoyed, it established a norm of decency, mutuality of our social obligations and created a parity of esteem and worth which was, until fairly recently, universal, regardless of wealth and status.

The “big bad state” is comprised of civilised and civilising institutions. It is such stable and enduring institutions and subsequently secure individuals that are raised above a struggle for basic survival which provide a frame for coherent communities. The Conservatives, with their anti-humanist, anti-enlightenment demagoguery of rigid class division, and policies that engineer steep social stratification, tend to create ghettoes, not communities.

The paternalism of traditional Tories and the authoritarianism of the current New Right are profoundly undemocratic: neither design can reflect the needs of the public since both frameworks are imposed on a population, reflecting only the needs of the ruling class, to preserve social order.

Conservative small-state ideology has led to depopulated social policies, which have dehumanised people, and indicate that the Tory policy-makers see the public as objects of their policies, and not as human subjects.

The moralising scrutiny and control of the poor is a quintessential element of tory narrative. Tory ideology never changes. They refuse the lessons of history, and reject the need for coherence and rationality. Tories really are stuck in the Feudal era. They have never liked the idea of something for everyone, yet everyone has paid for welfare provision:

“The [financial] crisis is an opportunity to sweep away the rotten postwar settlement of British politics. Labour is moribund. But David Cameron has a chance to develop a “red Tory” communitarianism, socially conservative but sceptical of neoliberal economics.” Phillip Blond, The Rise of the Red Tories, 2009.

Cameron was never sceptical of neoliberalism: like Thatcher, he has extended it without restraint. Neoliberalism entails a charismatic ideology – what sociologist Pierre Bourdieu calls a doxa: an unquestionable orthodoxy that operates as if it were the objective truth – that facilitates an uncompromising attack on public welfare; inevitable, growing inequality, and the individualization of all social actions, all in the name of private “enterprise”, the accummulation of private wealth for a minority and “global competitiveness.”

Unsurprisingly, then, unemployment, inequality, and poverty are increasingly blamed on the individuals experiencing these conditions rather than on the structural constraints that create the conditions.

We are being turned away from the role of the community and instead our attention is being purposefully diverted and re-focused solely on the “responsibilities” of individuals (and those responsiblities are inversely proportional to how much wealth a person has), common social values such as cooperation, mutual support, reciprocal altruism are being eroded, and the interdependent and intersubjective nature of social life is flatly denied: mutual relationships and common bonds are being dissolved and replaced by a social Darwinist narrative – founded on the mantra of competitive individualism.

The policies, practices and irrational beliefs of the state are distorting the perceptions of social groups and individuals, the colonisation of public language and space with neoliberal narratives – facilitated by a largely complicit media – delivers a distinctive anti-rationalist epistemology that restructures public ontological understandings.

Those understandings have become profoundly anti-collectivist and increasingly, antisocial, ultimately undermining social cohesion, stability and social security.

___


Related

The welfare debate and the end of reason

The welfare state – can we afford it?

Can we afford the welfare state?

Britain can still afford the welfare state

We can’t afford to lose the welfare state.

Images courtesy of Robert Livingstone

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22 thoughts on “The welfare state: from hung, drawn and quartered to Tory privatisation

  1. As usual there is a huge credibility gap between the rhetoric and reality. Just how could a person on zero hours save into a personal insurance scheme when they can’t even make their living costs week from week.

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  2. These are politicians who don’t care a fig for the majority of the population. They don’t care how many are homeless, or how many die from their cruel social experiments. As long as they don’t have to contribute to society – that’s all they car about.

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  3. An excellent article. Sadly Tory and Labour Right wing policy has indeed eroded the immediate post war values that brought about the NHS. If the Tories remain in power over the next five years we will become a totally fractured society. One from which there can be no return except through social upheaval by means of united action by the people (those who still can see what is happening). Ultimately dividing society still further until “class war” erupts not as a perception of status, but as a reality of historical and relentless persecution and it will likely be violent.

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  4. “the principle that those who are able to should pay into the system has been eroded and “taxpayer-funded hand-outs” have increasingly replaced contributions-based benefits….” – “It reads like Daily Mail dogma to me.”

    That’s not Daily Mail dogma, that’s a needs-based benefits system which is what we have in the UK. Unfortunately such systems are vulnerable to political attack when the recipients aren’t “people like us”. A recent arrival from Syria with six children is in greater need than a just-married 25 year old forced by lack of housing to stay with the inlaws – but his parents and in-laws won’t be too impressed when he’s been on the council waiting list for four years.

    Some “libertarian” free-marketers are actually looking to greater diversity as the solvent which will rupture the bonds of social solidarity of which the welfare state is an expression. Professor Bryan Caplan :
    http://econlog.econlib.org/archives/2011/09/ethnic_diversit.html

    “The claim isn’t that open borders will “destroy” solidarity or the welfare state, but merely that open borders will undermine both. And while free-marketers may well agree that some degree of solidarity is good, it’s also hard for free-marketers to deny that current levels of solidarity are excessive. Solidarity stands in the way of free-market reforms in pensions, education, health care, taxation, agricultural policy, and much more.”

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