Nick Pearce on the welfare state

Nick Pearce is director of the Institute for Public Policy Research

The 1940s were a period of enormous innovation in public policy.

The Attlee generation thought deeply about the future. It rejected pre-war economic policy and the inevitability of mass unemployment.

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It refused to accept that poverty was inescapable and that strong public services were unaffordable.

The two intellectual giants of the era, Keynes and Beveridge, were not afraid to imagine the practical utopias of a new society.

The sweeping changes needed to slay Beveridge's famous five giants of want, ignorance, disease, squalor and idleness were made possible by the common purpose created by the experience of war.

People crossed social class boundaries, serving together in the armed forces and Home Guard, sharing refuge in air raid shelters and caring for evacuated children.

Strong bonds of social solidarity were forged during these years.

Labour push

The Attlee government was also riding a tide of historical change, just as Thatcher was to do in the 1980s.

These were the early years of welfare capitalism across Europe, in which major social advances were made.

Organised labour wielded its muscle in full employment reconstruction economies, backed up by Marshall Aid.

It won a settlement that was to last over thirty years, until it was challenged in turn by new economic and political forces.

It has become a commonplace that social change has unpicked the founding assumptions of the Beveridge welfare state.

Rising life expectancy, the breakdown of the traditional family, increased participation of women in the workforce and long term economic inactivity have forced social policymakers to rethink welfare provision.

Familiar problems

Yet the terms of contemporary social policy debate would have been familiar to Beveridge.

He wrestled with the balance between a state-backed minimum and incentives for individuals to save for themselves, just as Adair Turner and David Blunkett are doing today.

He worried about work incentives and argued for job search and training obligations. He argued about the definition of poverty and basic subsistence, debates that still rage today. The Beveridge report also represented a Very British Revolution, as the biographer of the welfare state, Nick Timmins has put it.

It yoked together liberal and socialist thinking and went with the grain of some earlier reforms.

His radicalism was matched with a gradualism that drew on British historical traditions, and this path dependency is an important consideration when thinking about the welfare state.

US lessons

Rarely is reform successful when it seeks to import models wholesale from overseas. Lasting change is often secured when the ship is steered in a new direction, not abandoned altogether.

Interestingly, this is precisely what has happened under New Labour.

It has retained successful elements of the liberal political economy inherited from Thatcher but added new social programmes drawn from a mixture of US and Scandinavian experience.

The British welfare state has become less Anglo-Saxon, as it Continental critics would describe it, than "Anglo-Social", with big investments in public services, tax credits and welfare-to-work programmes.

Today's goals

Will New Labour leave a legacy as profound as that of the Attlee government?

This partly depends on the institutions it leaves. Nye Bevan's NHS remains Labour's finest example of progressive institution-building and has become part of the fabric of the country.

Today's equivalent would be a universal system of early years education and childcare, although we are still a long way from achieving that goal.

Labour has successfully reduced poverty, but Britain remains a very unequal society.

Millions of people are economically inactive. These are challenges that require new thinking as well as old-fashioned increases in public spending.

And it is in the nature of these things that welfare states are never complete and radical ambitions never satisfied.

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