The Five Giants [New Edition]: A Biography of the Welfare State

Preface

There are undeniable structural difficulties in writing a narrative account of five or six not always closely related subjects across seventy years. The approach here has broadly been to break the story up by government and divide it again by subject – education, health, social security, for example. But a word of warning is necessary. Narrative thrust has been given precedence over organisational tidiness. Bits of subjects therefore crop up in places other than under their specific headings, particularly in the later chapters, where themes as well as the story are pulled together. They also appear out of their strict chronology. So to take just one example, the development of second pensions is dealt with in the late 1950s but not mentioned again in detail until the mid-1970s when what happened to failed schemes from the sixties and early seventies is discussed. Anyone, therefore, attempting to follow a particular subject rather than read the whole book would need to combine section headings with both a reading of the top and tail of each chapter, and judicious use of the index.

A note about titles is needed. I have used what felt right, which means inconsistency. Later knighthoods and peerages are therefore frequently ignored (I know who Ted Short is, but struggle to place Lord Glenamara). Conversely, where someone has long been ‘Sir’ or ‘Lady’ somebody I have tended to use the title even ahead of their elevation to it. I hope no individual feels insulted. Scotland, Wales and Northern Ireland will, alas, because like so many British histories this is effectively England’s story with both the wrinkles and the larger differences elsewhere largely avoided. I offer as a poor excuse lack of space and the way the British government assembles its statistics.

Any book like this is the work of many hands and even more brains. Aside from the primary debts listed in the introduction I have incurred many more. Well over fifty people, from current and former politicians and civil servants to ministerial advisers and actors in the welfare state’s drama, have given me time for interviews. Most are acknowledged in the end notes. Some, because they are serving civil servants, cannot be named. A few provided help knowing they might not emerge too happily from the process. To all of them I am grateful. There were others to whom I should have talked, but I simply ran out of time. To these I apologise.

Then there are debts to journalistic colleagues, particularly a string of past education editors of the Independent, Peter Wilby, Ngaio Crequer and Colin Hughes. Along with David Walker of the BBC, Malcolm Dean of the Guardian, and Tony Bevins of the Observer, they lent me their brains, their time and their books, while many others have lent me their copy, conversation and company over the years. Sue Johnson at the Policy Studies Institute library rapidly met requests for the oddest books and articles without raising an eyebrow.

At crucial moments three professorial Peters, Peter Scott of Leeds University, Peter Kemp of York University, and Peter Hennessy of Queen Mary and Westfield College, London University, rescued me by providing references, as did Tony Lynes, Ronnie Bedford and Charles Webster, the official historian of the National Health Service.

As a journalist rather than a historian, I have chiefly relied on others’ gutting of the Public Record Office for the period for which such records are available. Alistair Cooke at Conservative Central Office was, however, generous enough to let me loose in the party’s records in the Bodleian Library up to and including the crucial period of policy formation ahead of the 1979 general election. I am grateful to him for both the access and the permission to refer to documents, and to Dr Sarah Street and Dr Martin Moore for helping me find my way around them.

A dozen or so authors deserve special mention as well as being listed in the bibliography. Nobody can write about Beveridge without owing a huge debt to José Harris’s wonderful, multi-faceted biography of him. David Donnison’s works, but particularly his Politics of Poverty, are inspirational: object lessons in how to write about social policy. I doubt I could have managed to cover education without Brian Simon’s mighty and passionate Education and the Social Order, or Harry Judge’s illuminating A Generation of Schooling, or the sharp analysis and easy writing of Stuart Maclure and Maurice Kogan. Brian Ellis’s official history of pensions from 1955 to 1975 is a starred first example of how to make a horrendously complex subject seem simple and interesting. Nobody should write about the NHS without reading Enoch Powell, Rudolf Klein, and Charles Webster. And anything written by Nicholas Deakin is always stimulating, particularly his 1987 version of The Politics of Welfare. On a broader front, the 1940s are brilliantly served by Peter Hennessy’s Never Again, Paul Addison’s The Road to 1945 and Now the War is Over, and Angus Calder’s The People’s War, while Kenneth O. Morgan’s works, and particularly The People’s Peace, his history of Britain 1945–90, are indispensable – as is Hugo Young’s study of Margaret Thatcher, One of Us.

When I started work on this book in 1993, there was really no substantial modern post-war history available to match Derek Fraser’s fine work The Evolution of the British Welfare State, which takes the story up to Beveridge. Shortly after I started, Rodney Lowe’s The Welfare State in Britain since 1945 appeared. It is completely different in character from this work, much more academic and analytical, concentrating on what he dubs the ‘classic’ welfare state up to 1976 and then moving on to 1990 in less depth. It is an excellent book. But it is not this one. I hope in some small way this will complement that.

Finally there are more personal cheques to sign. Three people – Tony Bevins, David Walker and Julian Le Grand, the Richard Titmuss Professor of Health Policy at the London School of Economics – suffered the whole book in draft. David Willetts read chapters sixteen to nineteen. David Donnison read the housing sections, Dr Gordon Macpherson those on health, Sir George Godber the NHS material up to 1974, and Stuart Maclure the education sections. Frank Field, Sir Patrick Nairne, Sir Geoffrey Otton, Norman Warner, Robin Wendt and (as a prelude to an interview) Shirley Williams all read chapters, or parts of chapters, within their competence, as did two, by convention anonymous, civil servants. All saved me from errors of both fact and judgement, large, small and downright embarrassing. All made it a better book. Some provided criticisms I have not been able to answer. If there is credit, they deserve much of it. The undoubted remaining errors of fact, judgement and tone remain all mine.

Much is due also to John Pawsey, my agent, to Betty Palmer, my copy editor, and to Philip Gwyn Jones, Caroline Hotblack and Kate Harris at HarperCollins for various forms of faith and aid, some beyond the call of duty.

The most personal cheques of all go to Tony for his energising encouragement and superbly pedantic reading of texts and to Jerry, both of whom at times had more faith in this project than I did; to Audrey Maxwell for organisation and memories; to Zoe, Jonathan and Robert for their wonderful forbearance; but most of all and for all of those to Elaine, sans qui…

Preface to the Third Edition

This fills in the missing sixteen years since the second edition of The Five Giants ended. It is probably the last edition. If not, it probably should be.

Not because, however battered parts of it feel at the time of writing, and now at age seventy, the welfare state is at death’s door. That seems less than likely any time soon, given that it is still consuming £500bn of government expenditure, or very roughly a quarter of the country’s income.

Rather, it will probably be the last edition because if this book has any value, some of it lies in the fact that for a fraction over half of its life since 1948 I was lucky enough to report not on all of it, but on key parts of it, as they happened, while working for the Press Association, The Times, the Independent and finally for the Financial Times.

I was never in the room, but I was often outside, eavesdropping, or pressing my nose up against the window. I had a ringside seat. And when I did not, I was working with journalist colleagues who did, including a whole string of excellent political, economic, education, employment, and even housing correspondents, when they existed, over the years.

So not only did I – and I hope the readers – gain hugely from the unending education provided by practitioners, recipients, civil servants, politicians, lobbyists, academics, think-tankers, special advisers and journalistic colleagues, but those relationships allowed me to go back later to query, improve, reshape and, sometimes by anecdote, illuminate parts of the account.

Since 2012 – and the reason this edition should probably be the last – I have still had a seat at the circus. But it has been a few rows further back, as I’ve turned from a journalist into a chronicler – though not a proper historian. And, as time goes by, it will be from a few rows further back, in the cheaper seats. I will know well fewer of the people, inside and outside government, who shape it.

This edition seeks again to find that fine balance between 1066 and All That and Gibbon’s Decline and Fall of the Roman Empire, with enough space in there for readers to stand at least a chance of making up their own minds. Among my favourite moments since the first edition have been when I’ve been approached by foam-flecked young Tory researchers and profoundly over-earnest young Labour ones who have both told me how wonderful it is. The former because ‘it tells you everything that is wrong with the welfare state’ and the latter because ‘it shows exactly why we must defend it’.

As the third edition was being written, some of the same motivations that drove the first edition piled back in. Not least the return to the streets of the homeless who had largely been absent, and largely to at least some level cared for, for the previous decade and more. If we are all in this together, for them at least, it does not show. And because if the first edition was written in part for those who did not know life before Margaret Thatcher, this one is in part written for those who, if they remember him at all, believe only that Tony Blair was a war criminal.

It comes at a most opportune time, and a most inopportune one. It is opportune because it is just ahead of the seventy-fifth anniversary of the Beveridge report and of the seventieth anniversary of two of the key pillars of Britain’s modern welfare state: its social security system and its National Health Service. A good time to bring the story up to date, and thus to reflect.

It is inopportune because on 23 June 2016 Britain voted to leave the European Union. The impact of Brexit on the welfare state, for good or ill, may well be profound, though in ways we can only guess. For that and other reasons this edition ends full of question marks. But there have been plenty of other occasions over the years when the welfare state has been called into question – as I hope its biography shows.

This edition, like the first, remains the work of many more people than me.

In addition to all those who gave up time for interviews and who – where they can be – are acknowledged in the endnotes, there remain many additional IOUs. A completely comprehensive list would run to many more than these pages.

For the second edition, my primary debts include my professorial Peters, Peter Kemp at Glasgow University, and Peter Scott, then vice-chancellor of Kingston University, who rescued me with references and lessons on housing and higher education, as did Richard Layard of the London School of Economics on the labour market and employment policy. John Perry of the Chartered Institute for Housing and Stuart Maclure, along with John Carvel and David Brindle of the Guardian, also provided important compasses. Andrew Dilnot, at the time director of the Institute for Fiscal Studies, bullied me into giving a lunchtime seminar on where I had got to, even before I had: an excellent discipline. Along with Richard Layard, John McTernan, Alan Langlands, John Perry and Julian Le Grand, he read drafts of the additional text for the second edition, as did two civil servants who, even now, I cannot thank, much as I would like to.

Between the second and third editions I also owe thanks to an emeritus professor of classics at Durham, whose name I have alas long since lost, who wrote a very sweet note pointing out that the famous words of Petronius on p. 290 are in fact a cod quote. He had, he said, traced it to occupied Berlin after the war, where a presumably classically trained and deeply frustrated British officer had pinned it to a bulletin board from whence, in the days before the internet, it had, so to speak, gone viral.

The second edition – and indeed the third – owe a great deal to the members of the public policy team at the Financial Times who taught me much over the years, particularly Jim Kelly, Miranda Green and Chris Cook, successive education correspondents. My debts at the FT go much wider, not least to Richard Lambert, Lionel Barber and Robert Shrimsley, who gave me wings to fly, but also to Robert Chote, Chris Giles and Martin Wolf, each of whom sought to beat some economics into me, and also to Patti Waldmeir, who shouted at me that I did not understand US welfare reform to the point where I finally did; or at least understood it better. Again at the FT, Peter Cheek in the library dug cuttings out of basements and conjured documents out of nowhere. Outside the FT, Andy Cowper of Health Policy Insight has been, variously over the years, both a great editor and an endless source of inspiration and humour. At HarperCollins I also had the immense privilege of being edited again by Philip Gwyn Jones and Georgina Laycock, who have gone on to better things than seeking to sort me out. The second edition, like the first, was also read by Tony Bevins, and was, as is this in part, in his memory. He liked it, and one could not ask for more. He would doubtless have improved this edition. Howard Glennerster’s and Rudolf Klein’s repeatedly updated editions of their British Social Policy since 1945, and The New Politics of the NHS, plus their other writings, were critical guides to both that edition and this.

For the third edition – which fills in sixteen missing years, rather than the six between editions one and two – most of those cheques are there to sign again, and many more. Aside from the interviews, I owe huge amounts to the many present and former staff at the institute for Fiscal Studies, but most particularly to Carl Emmerson, Mike Brewer and Paul Johnson, and over the years to many at the London School of Economics, particularly but not only to Nick Barr, Gwyn Bevan and Tony Travers, and most especially to John Hills and his team at the Centre for Analysis of Social Exclusion (CASE). Not just for all their many publications – and an analysis of CASE’s output from The State of Welfare in 1989 to Social Policy in a Cold Climate in 2016 would probably make a PhD thesis in its own right – but for many conversations. At King’s College, London, I am in debt to Alison Wolf.

Countless other academics, think-tank practitioners and special advisers have sought to keep me on the straight and narrow over the years, often from sharply differing viewpoints. Any list is invidious, but those who must be mentioned include in random order Alan Maynard, Paul Gregg, Peter Taylor-Gooby, Alan Smithers, Nick Bosanquet, Tony Culyer, Mike Rawlins, Nick Black, Jane Millar, Nick Mays, Colin Talbot, Simon Burgess, Carol Propper, Bill Morgan, Nick Seddon, Ruth Lister, Fran Bennett, Andrew Haldenby, Olly Grender, Anita Charlesworth, and in earlier days, when they were doing different things, Rick Nye, Danny Finkelstein and Geoff Mulgan.

The third edition was made easier by work already done for the Institute for Government, the King’s Fund and the Health Foundation which helped tell the update to this story. These include Never Again?, Universal Credit and Glaziers and Window Breakers, which are referenced and are now in the bibliography, not as an act of self-aggrandisement, but because they tell parts of this story in more detail and contain the source for many of the quotes.

Those publications would not have been possible without the support of Chris Ham, Andrew Adonis, Peter Riddell, Jennifer Dixon, Jill Rutter, Julian McCrae, John Appleby and Nigel Edwards, and the immense help of, among others, Philippa Stroud, Iain Duncan Smith, David Freud, David Nicholson, Stephen Brien, and a whole clutch of civil servants who, by convention, have to remain anonymous.

Even since the second edition, there has been an explosion in political ‘instant history’, not least Anthony Seldon’s multiple accounts as either author or editor of the Blair, Brown and Cameron years. These helped no end, and in places go into much more of the gory political row around some of the issues than has been possible here. But if I had to recommend just two political histories that cover the third edition, it would be Andrew Rawnsley’s magisterial accounts of the Labour years, Servants of the People and The End of the Party, and Matthew d’Ancona’s excellent In It Together for the coalition period.

For getting this edition to publication my biggest single piece of thanks goes once again to Peter Hennessy, who inspired this in the first place, and who found me a way back into HarperCollins that was defeating me. The next two go to Julian Le Grand of the LSE and Matthew Taylor at the Royal Society of Arts. Julian, as with the earlier editions, suffered all of this in draft, making many helpful suggestions and corrections while also, crucially, solving a major structural problem. Matthew, in conversation, not only donated the core of the final conceit but also, critically, delivered the very last line. Debts don’t get much bigger than that, and to both I am immensely grateful.

But there are many more. Once again I owe thanks over and above the call of duty to Kate Harris, who got me to the incredibly helpful wizards of the Oxford English Dictionary, allowing me to illustrate rather than assert how the language around ‘the welfare state’ has changed. In no particular order, Nick Hillman of the Higher Education Policy Institute was immensely helpful, both in conversation and with sources, and then in reading the drafts on higher education, while Roderick Floud expounded on his Gresham College lecture for me. Ken Jones gave me an early sight of his latest edition of Education in Britain, and Richard Garner, the Independent’s long-standing education editor, did the same with The Thirty Years War, his account of thirty years of education reporting. Richard, along with Conor Ryan, now at the Sutton Trust, found time to read the schools sections. Chris Ham and Richard Humphries at the King’s Fund read health and social care. Adair Turner, Joanne Segars and Steve Webb read the pensions material. John Hills checked references to his and his colleagues’ work. Matthew Whittaker at the Resolution Foundation read and corrected key passages. Gus O’Donnell pointed out a key omission. Chris Giles at the Financial Times put right my account of the financial crash. Gavin Kelly and Dan Corry were extremely helpful. Alistair Darling and John McTernan read the Labour years and David Willetts the account of the succeeding ones. Parts were also read by civil servants, or retired civil servants who either have to, or chose to, remain anonymous. All of these helped immensely. They corrected errors of fact, tone and judgement. And where, despite their best endeavours, undoubted errors remain in all three categories, the responsibility is mine.

For the third edition and at HarperCollins my thanks are due to Arabella Pike, now William Collins publishing director, who happily, from my point of view, remembered the first edition from her most junior days at HarperCollins; to Joe Zigmond and Tom Killingbeck, my editors; to Steve Cox who produced a fine copy edit; and to Iain Hunt, senior project editor, who with good grace and no little wit undertook the heavy lifting.

Immense thanks are once again due to Elaine, Zoe, Jonathan and Robert, and to Arthur, Violet and Effra, along with Audrey, Rick, Frann and Jerry and his family, all of whom made me laugh, and who put up for endless months with a deeply distracted man.

Finally there are remarkably few new ideas in here. Rather, as with the first edition, I have largely been a weaver of other people’s ideas, analysis, dreams and actions into a tapestry: the welfare state’s story.

NICHOLAS TIMMINS

May 2017

Introduction

Theory is so much clearer than history.

E. P. Thompson, The Poverty of Theory (1978), p. 237

Freedom from Want cannot be forced on a democracy or given to a democracy. It must be won by them.

Sir William Beveridge, 20 November 1942

This book started life one September Sunday in 1989 when Peter Hennessy, in one of his more Tigger-ish moods, bounced into the Independent to deliver his ‘Whitehall Watch’ column. He had been working on Never Again, his history of Britain from 1945 to 1951, and had been re-reading the Beveridge report. ‘Someone,’ he said, ‘needs to write a good modern history of the welfare state, and you ought to do it. You can call it The Five Giants. You just start with Beveridge with tears in his eyes and work forwards.’

The idea seemed frankly farcical. I was covering the government’s NHS review and John Moore’s attempt to recast the language of welfare. I had just acquired two more small children. There seemed not enough hours in the day. I was a journalist, not a historian. And there were large parts of the welfare state about which I knew nothing. The idea, however, would not go away. If there was much about which I was ignorant, there were bits of the subject about which I did know something. On and off, I’d spent more than fifteen years reporting them. For some of the more exciting events related here from the mid-1970s on, as Max Boyce would put it, ‘I was there.’ Other motivations piled in. When, in Keith Joseph’s final days as Secretary of State for Social Services, I first started reporting what the academics would call social policy, I had wished for a single volume which simply told the story of how we had got there – the events, ideas, personalities, issues and pressures which had taken the post-1945 welfare state to that point. One that had the best quotes and some of the best jokes all in one place and referenced, and which provided at least a background from which some of the more technical issues could be tackled. Something between Gibbon’s Decline and Fall of the Roman Empire and 1066 and All That — only for the welfare state and all in one volume. There were single-subject accounts, but none which covered the waterfront or provided quite that mix.

Other motives included bemusement at how the Portillos, Redwoods and the other younger Thatcherites of this world – all of them broadly my age, the generation of whom Ian Kennedy, Professor of Medical Law and Ethics at King’s College, London, once said, ‘if you say soixante-huit to them, they don’t think you’ve got a digit wrong’ – could have such heartfelt hostility to an idea for which I had an instinctive sympathy. To me, and for all its myriad faults, some form of collective provision had always seemed, to put it at its lowest, the least bad way of organising education, health care and social security – things we all need, and which not all of us can guarantee to provide for ourselves either all the time or at the time they are needed. The challenge had always seemed how to improve the workings of the welfare state, not how to dismantle it.

Furthermore, as someone who had grown up with the swings and roundabouts of alternating Labour and Conservative governments, I became increasingly aware that most people under forty have only limited adult memories of life before Thatcher. The period before that, despite the way Kenneth Clarke would have it, is now history, not current affairs. Yet a little history can improve understanding of the current debates about the welfare state, and limit the chances of getting carried away by them.

It is quite important to know that virtually every day since 1948 the NHS has been said to be in crisis, and that for the last seventy-five years morale within it has invariably never been lower. It is worth understanding that every time unemployment rises significantly, there is, like a bad dog that has its day, a spell when the unemployed are blamed as work-shy scroungers before unemployment settles at a new plateau. It is worth knowing that in education, yesterday has almost always been better than today, despite rising numbers passing ever more advanced levels of examinations and reaching higher education in ever greater numbers in every year (with two exceptions) since 1945. It can help to put the Conservatives’ stewardship of the NHS into perspective to know that the first Secretary of State to be sued by a patient for failing to provide an operation was a Labour minister, not a Conservative. Such knowledge matters because it can ward off false despair – the sort which in 1987 afflicted the Tories over the NHS, when they felt they would never gain any credit for it and came the closest they ever have to dismantling it.

Then again, there is the need to attack a few myths. For example that before Margaret Thatcher’s arrival in 1979 all was sweetness and light, and that all was well with the welfare state. It wasn’t. Or that there have been no advances to go alongside the reverses in the past fifteen years. There have.

But if the view that there was a Golden Age in which a lavishly funded welfare system operated in a rosy glow of consensus needs challenging, so does the obverse view which has begun to gain currency – that there never was any real agreement about ends and means, and that the Conservatives always did have a blueprint for breaking the thing up. It is an interpretation advanced in triumph by some on the right who believe their schema for the world is about to come to fruition. It is subscribed to on the left by those who want to believe in a conspiracy theory, and by some who now want to blame themselves for not seeing it coming. It is constructed by trawling through past pamphlets, essays and speeches for the source of ideas now in play such as grant maintained schools, or vouchers for training. Such a view misrepresents history. It is the equivalent of arguing that because in today’s Labour Party there are still people who believe in nationalising the top 200 companies, then if a future Labour government did nationalise them, it would prove that always to have been the Labour Party’s secret aim. Such a view is plainly tosh. Its equivalent is to argue that because there were Conservatives in the 1950s and 1960s who pressed for cash-limited vouchers, for privatisation of both supply and demand, and for a drastic rolling back of the welfare state, then that was always the secret Tory agenda. The ideas did exist, but they were not then in the plans of any political party, any more than nationalising the top 200 companies is in Labour’s in 1995.

Equally, attempts to portray repeated Treasury proposals for new NHS charges or the raising of the school starting age as part of the Conservatives’ desire to undermine the welfare state misunderstands the Treasury’s function. It propounds such ideas to governments of all colours because part of the Treasury’s job is to stop governments spending money. The proposals Gaitskell backed in 1951 to scrap the NHS dental service and introduce ‘hotel’ charges for NHS beds were almost as draconian as anything proposed by his Conservative successors. But they were not introduced, any more than a Cabinet majority was ever assembled for the more extreme pieces of surgery proposed for health and education by the Treasury, by Chancellors and even at times by Prime Ministers under the Conservatives between 1951 and 1964. Equally, the Treasury and Treasury ministers proposed loans in place of student grants, and significant benefit cuts, to Labour as well as Conservative governments.¹ In judging how far there was a consensus about the welfare state, one must look at what actually happened, not just at the naughty thoughts each side harboured.

The counter-myth to the conspiracy of the right is that before 1979 satanic socialists set out to control the nation by placing it in some universalist cradle-to-grave feather bed aimed at sapping its moral fibre and taking the Great out of Britain. This doesn’t wash. For a start, from 1945 up to 1979 the Conservatives controlled the welfare state for almost exactly the same period as Labour, and were responsible for some of its most expansionary phases. If the Conservatives at times moved to make services more universal – launching the first great explosion in higher education, for example – Labour, equally, joined Conservative governments in extending means-testing. The welfare state (the phrase has its own problems which we’ll come to in a moment) is after all a living, moving, breathing being, bits of whose boundaries have moved back and forth under both parties in the past fifty years. It is not some fixed nirvana which we either draw nearer to or retreat from.

A further motivation to write this book was anger – anger that it is impossible now to travel on the London underground or walk the streets of our big cities without finding beggars, or, more often, without beggars finding us. That, in my lifetime, did not happen before the late 1980s. There were the down-and-outs on the Embankment. There were the spikes, the left-over remnants of the Poor Law workhouses, which housed the alcoholics and schizophrenics who avoided all the ropes in the safety net. But there were no young people, their lives blighted, sleeping in doorways in the Strand.

Then – and despite that anger – there was the perverse need to declare that, even after well over a decade of ideological assault, the welfare state still exists. Almost everyone to whom the idea of the book was mentioned instantly cracked a joke about the need to be quick about it before the thing disappeared. Most publishers wanted to call it From Cradle to Grave. Yet when welfare state services still take two-thirds of an annual government expenditure totalling £262 billion, the animal, whatever strains it may be under, can hardly be said to be dead. Create a strong enough perception that the welfare state is dying, however, and you make it easier to lop off further chunks without anyone asking where they went.

And then it just seemed fun. The story of the welfare state is a great adventure – a story worth telling, particularly when all its fiftieth anniversaries were looming.

And so in the end the book got written. It did so only because Andreas Whittam-Smith was generous enough to provide in 1993 a six-month sabbatical from the Independent. In turn I was lucky enough to be able to spend that time at the Policy Studies Institute as a Distinguished Visiting Fellow, funded by money from the Joseph Rowntree Foundation. The PSI’s monastic cells, learned but practical inmates and good library made it an ideal place to be. These, along with what is owed to Peter Hennessy for donating the idea, are my primary debts. There are many other listed in the Preface.

The finished book may not be what any of those who helped so much envisaged. Nor does it answer all the challenges given as motives for writing it. What it does represent is a perhaps over-ambitious stab at twisting the kaleidoscope of the post-war history of Britain. In most versions, the welfare state, certainly after 1945–51, plays only a walk-on part. This one attempts to put the welfare state centre stage while allowing economic, political and even cultural events to play the walk-on roles. They are, however, there and they are crucial to the story, because they do so much to define and limit what can be done. The welfare state, after all, is itself a key cog in the economy. Too much discussion of social policy, too much measurement of its success and failure, appears at times to take place in a vacuum, untainted by the realities of the world at the time.

One theme which repeatedly emerges is the law of unintended consequences: that decisions taken for the best of motives will often go awry. This applies to governments seeking expansion, for example by providing larger subsidies to high-rise flats to produce more housing. But it applies equally to governments trying to draw back: for example, by withholding benefits from sixteen- and seventeen-year-olds because they should be in education, work or training, not on the dole. It is a lesson the right would do as well to remember as the left.

One issue should perhaps be dealt with here because it stands outside the narrative. In the mid-1980s, Correlli Barnett’s brilliant and detailed polemic The Audit of War helped influence Tory hostility to the welfare state. Barnett saw the ‘New Jerusalem’ of the welfare state itself, along with the historic and continuing failure to organise high-grade technical education, as the twin causes of Britain’s relative economic decline. His thesis has been widely debated elsewhere and by others far better informed than I. But while the second half of his argument has force, the first seems overstated. Other Western countries also developed modern and much more extensive welfare states after the Second World War, most ended up spending appreciably higher shares of their income on them than Britain did – and almost all achieved higher growth rates.²

Britain, physically less scarred by war, had laid the foundations of its welfare state earlier. But to argue that it crippled the economy seems, in Sir Alec Cairncross’s phrase, ‘badly out of focus’. Cairncross calculates that spending on education, health, housing, pensions and unemployment benefit reached about £1.5 billion in 1950 – half as much again in real terms as before the war. But defence expenditure never ran below £750 million after 1945, roughly twice as much in real terms as in 1938, and reached more than £1400 million again in 1952. Food subsidies, which are arguably a part of the welfare state but are also an economic regulator put in place to keep prices down, cost approaching £500 million in 1949 – more than any single social service.³ Almost £2.5 billion in cash compensation or commitments to interest-bearing stock went through the national accounts after 1945 to pay for nationalisation.⁴ To argue that any one of those caused Britain’s relative post-war decline would be as logical or illogical as to argue that the welfare state did. The causes are complex, not singular or bipolar. They involve such measurables as the loss of markets and capital base during the war, and Britain’s post-Imperial role after 1945 as the world’s third largest military power and international policeman. They equally involve such immeasurables as to how far the country felt it needed to strive, having just won the war, and why labour relations, and hence productivity, were so bad. Indeed, to argue that the welfare state should not have been established, or should not have been established yet, is to ignore political reality. A country which had covered large tracts of East Anglia in concrete to launch bomber fleets, and the south coast in Nissen huts to launch the largest invasion the world had ever seen, could hardly turn round to its citizenry and say it was unable to organise a national health service; that it couldn’t house its people; or that it would not invest in education. Furthermore, compared to pre-war levels, the big surge in welfare state spending started in the late 1950s, not in the immediate post-war period which Barnett rightly identifies as one of the critical periods when Britain failed to invest in its industrial base. But that begins to jump ahead in the story.

Before we start, a word about definitions is needed. There is no agreement about what constitutes ‘the welfare state’. Even the origin of the phrase is the subject of learned dispute.⁵ It was popularised in Britain in 1941 by an Archbishop of York and only adopted by Clem Attlee in time for the 1950 election. The Oxford English Dictionary used to be a little slow, but the phrase only reached the dictionary’s addenda in 1955 and with a definition we would now use in 1964.⁶ At times its boundaries have been drawn so tightly as to exclude most of the social security budget, limiting it to what the Americans call ‘welfare’: payments to the poor plus what we, in the national accounts, still call ‘welfare foods’. At others, as in Pauline Gregg’s 1967 book The Welfare State, it has been drawn to embrace virtually the whole of the economic and social history of Britain from 1945, including nationalisation, the neo-corporatism of NEDO, and beer and sandwiches at Number Ten – the aspects of Britain as a welfare state that Baroness Thatcher plainly did want to roll back in 1979, and over which she was largely successful.

The phrase also suffers the drawback of being static, as though ‘the welfare state’ were a perfect work, handed down in tablets of stone in 1945, never to be tampered with. Even to use the phrase is to set artificial frames. As an entity it does not exist – it is a collection of services and policies and ideas and taxes, including tax reliefs, whose boundaries expand and contract over time. It can never, at any one moment, be said to have been assembled or dismantled. Beveridge hated the phrase and refused to use it, disliking its ‘Santa Claus’ and ‘brave new world’ connotations.⁷ I would rather not have had to.

For this book it is defined in the strictly limited sense of representing the antonyms to the ‘five giants on the road of reconstruction’ which Beveridge identified, the policies and services created to combat Want, Disease, Ignorance, Squalor and Idleness. Even here, boundary problems proliferate. Is legal aid part of the welfare state or not? Is planning, given that the New Towns clearly were? Is training, given that much of it has always been employer-funded, and yet it is a subject closely linked to education and one in which governments inevitably get involved?

The imperfect solution to these quandaries has been to be deliberately eclectic and to write about what most interests me. This decision extends to the book’s coverage of the mainstream services of health, education, social security, housing, social services, and, in lesser detail, employment policy. Thus it is possible to read The Five Giants and scarcely know that nurses exist or that Commonwealth immigration, which greatly affected the welfare state and was greatly affected by it, took place. The development of family planning – a profoundly controversial subject at the time – rates only a sentence or two. Social work is covered, but sketchily, it being one of those subjects where if you scratch too far below the surface you fall into an extremely large hole. The book distorts by omission. Welfare foods and food subsidies which at times consumed large sums of taxpayers’ money are barely mentioned; nor is the tobacco concession of two shillings and fourpence a week that, up to 1957, went to those pensioners who were prepared to swear that they smoked, in order to compensate them for a hike in tobacco tax in the 1940s. School examinations are only touched on. By no means all changes to benefits or housing subsidies have been charted, and training receives the lightest of looks. The list could go on. The excuse is twofold. First, even in a book this size, not everything can go in. As one former permanent secretary put it: ‘You have to remember that every minister who went through here wanted to leave his or her mark on the system and very few of them failed entirely.’⁸ He was speaking of social security; but his remark could apply to any of the government departments or subjects covered. And second, I had a tale to tell. There is a lot of detail here. But too much detail, too many by-ways and sub-plots, can spoil a story worth telling. The Five Giants, then, is not a book of accounting, or even of analysis, though there is a little of each within it. It is primarily a biography of a subject still very much alive. I hope it proves worth reading.

NICHOLAS TIMMINS

January 1995

PART I

THE PIPERS AT THE GATE OF DAWN

CHAPTER 1

‘Thank you, Sir William’

In every country it is unfortunate not to be rich; in England it is a horrible misfortune to be poor.

Alexis de Tocqueville, Voyages en Angleterre et en Irlande en 1835

‘They used to tell me I was building a dream …’

E. Y. Harburg, ‘Brother can you spare a dime’, American song of the Great Depression, opening line

At this stage of the war, the main ideas of reconstruction were in their first bloom, but largely, also in a state of suspended animation. Like the sleeping beauty, they awaited the prince’s kiss. In almost every field of reconstruction, Beveridge’s report of December 1942 was to be the decisive breath of life.

Paul Addison, The Road to 1945, p. 171

IN JUNE 1941, Sir William Beveridge was called in by Arthur Greenwood to be offered a job. Greenwood was the Labour Minister for Reconstruction in Britain’s wartime coalition government. Beveridge was an egotistical sixty-two-year-old civil servant who believed his destiny was to organise key parts of Britain’s war effort. He was asked instead to chair an interdepartmental committee on the co-ordination of social insurance. The task hardly sounded inspiring. With tears, not of joy but of bitter disappointment, in his eyes, he accepted.¹ It was the strangest of starts to one of the greatest of adventures – the founding of Britain’s modern welfare state.

Beveridge’s reaction was perhaps not surprising, for he was no ordinary civil servant. He was already well known as a radio broadcaster, academic, public servant and newspaper columnist; a man with more careers behind him than most ever enjoy. He was also by any standard, despite his detractors (of whom there were plenty), a member of the Great and the Good, at a time when such a class was perhaps more easily defined than at the start of the twenty-first century.

Born the son of a British judge in India in 1879 into a house staffed by twenty-six servants, he was schooled at Charterhouse. At Oxford he read mathematics and classics before, in 1903 at the age of twenty-four, he became in effect an Edwardian social worker and researcher at Toynbee Hall, the university foundation for the poor in the East End. It was there that ‘he learned the meaning of poverty and saw the consequences of unemployment’.² The impoverishment of this part of London was to affect others in the tale of Britain’s welfare state, including Clement Attlee and Sir Keith Joseph, even if the conclusions each was to draw from the experience were to be rather different.

At Balliol, Beveridge recalled, the Master, Edward Caird, used to urge his charges ‘to go and discover why, with so much wealth in Britain, there continues to be so much poverty and how poverty can be cured’.³

Oxford and Toynbee Hall triggered in Beveridge a lifelong interest in unemployment and broader social questions, turning the young man into a social reformer, but one whose academic training convinced him that policy should be based on exhaustive research and detailed analysis. In his autobiography, Beveridge characterised his own progress at the time as being from ‘Oxford to Whitechapel, Whitechapel to Fleet Street, Fleet Street to Whitehall’.⁴ On the way, however, there had been a visit early in 1907 to Germany, where he had studied the systems of compulsory social insurance for pensions and sickness, though not yet for unemployment, which Bismarck had introduced in the 1890s. It was an important and fitting lesson, for Bismarck’s is the only name to rank above Beveridge’s as a welfare state designer, although of a rather different model.

Late in 1905 the twenty-six-year-old Beveridge, on a recommendation from Caird, was installed as a leader writer at the Tory Morning Post, a newspaper which eventually merged with the Daily Telegraph. There he was given licence to write on social policy and advocate labour exchanges and unemployment insurance, drawing on the forms of social insurance he saw in Germany. That work brought him to the attention of the thirty-three-year-old Winston Churchill, who four years earlier had crossed the floor of the Commons from the Conservative to the Liberal benches. In July 1908, Churchill brought Beveridge into the Board of Trade as a fulltime civil servant. Over the next three years, Beveridge played a crucial role in the creation of a national network of labour exchanges of which he became the first director; and then in the formation of the world’s first, if initially highly limited, statutory insurance scheme against unemployment. The measure was introduced in 1911 by David Lloyd George and by Churchill, who by 1906 had become so imbued with the cause of social reform that he declared Liberalism to be ‘the cause of the left-out millions’.⁵

In government service, Beveridge had seen Lloyd George as Chancellor introduce the first state pensions, dubbed by their grateful recipients ‘the Lord George’ (because only a Lord could afford to be so generous), and had seen the spectacular row over the 1909 ‘People’s Budget’ which raised the money to pay for them. The pensions, Lloyd George declared, lifted ‘the shadow of the workhouse from the homes of the poor’. Churchill, more temperately, declared of the first relatively meagre means-tested payments: ‘We have not pretended to carry the toiler on to dry land. What we have done is to strap a lifebelt about him.’

The first unemployment insurance in 1911 covered only about 2.75 million men, or roughly one in six of the workforce, in industries at high risk of cyclical unemployment such as iron and steel and shipbuilding. It ran out after fifteen weeks. But with it came the first state-backed insurance scheme for health. Lloyd George’s famous ‘Ninepence for Fourpence’ was more comprehensive, covering all male workers earning less than £160 a year. For the worker’s compulsory fourpence (just under 2p) a week, the employer had to add threepence and the state twopence. The scheme was administered by ‘approved societies’ and provided the services of a ‘panel’ family doctor, but no right to hospital care or medicine; with that came sick pay of ten shillings (50p) a week, but no cover for wives and children other than a maternity grant. What marked out the health and unemployment measures of the 1911 National Insurance Act from anything that went before was that both were contributory, compulsory and state organised, with employers, employees and the taxpayer each contributing: the so-called tripartite system. What they were not was comprehensive.

The same Liberal Government had also introduced the first tentative legislation on free school meals (for large families only), school medical inspections, and the first overtly redistributive budget – the ‘People’s Budget’ – to pay for it all. The House of Lords, then still the power-base of the landed aristocracy, was faced by a new supertax and what were, in effect, wealth taxes. They threw out what Lloyd George had declared to be ‘a war budget’ – one ‘for raising money to wage implacable warfare on poverty and squalidness’. He added the hope, which he almost lived to see realised, that ‘before this generation has passed away we shall have advanced a great step towards that good time when poverty and wretchedness and human degradation which always follow in its camp will be as remote to the people of this country as the wolves which once infested its forests’.⁶ The result, after a long battle, was the 1911 Parliament Act which removed for ever the right of the Lords to delay financial legislation.

Beveridge was thus not only a close Whitehall observer but a key player in the formation of what has been dubbed the ‘ambulance state’ – the lifebelt precursor to the modern welfare state which thirty years on he was to do so much to help create.

With the arrival of the First World War, Beveridge moved in to the Ministry of Munitions, where he was involved in deeply controversial moves to mobilise manpower and where he worked directly with Lloyd George. In 1916 he went to the Ministry of Food, becoming one of the chief architects of rationing and price control. He finished his first Whitehall career in 1919 at the age of thirty-nine as the ministry’s Permanent Secretary.

Peace saw him leave the civil service to become director of the London School of Economics, transforming it into a great base for the social sciences. During a spell as Vice Chancellor of London University he commissioned its massive and Teutonic Senate House (the building Hitler earmarked to be his London headquarters). In 1937 he went back to Oxford as Master of University College. His academic appointments did not, however, to use the title of his autobiography, remove him entirely from power and influence. In 1934 he was appointed chairman of the Unemployment Insurance Statutory Committee, whose job it was to keep the insurance fund solvent, and in 1936 he was brought back to Whitehall to help devise the rationing that operated from 1940. In 1941, when Greenwood called him in, Beveridge had a knowledge of the origins and scope of social services in Britain that was probably unequalled.

He was connected everywhere. R. H. Tawney, the great Christian socialist thinker, was his brother-in-law and friend. He knew well Sidney and Beatrice Webb, founders of the Fabian Society, who in fact had introduced him to Churchill. (Churchill’s aside,’I refuse to be shut up in a soup kitchen with Mrs Beatrice Webb’,⁷ appears to have been no barrier to the appointment.) It was in fact Mrs Webb who had first proposed a free health service for all in her minority report of the Poor Law inquiry of 1909. Clement Attlee and Hugh Dalton, two men to whom would fall the job of finding the cash for Beveridge’s plan, had been lecturers on his staff at the LSE. Dalton was to be Attlee’s first Chancellor of the Exchequer in 1945. As well as having worked with Churchill, Beveridge was a friend of John Maynard Keynes, whose new economics were to make the welfare state possible, and he knew Seebohm Rowntree, whose landmark studies of poverty in York in 1899 had first helped drive the 1906 Liberal Government into its reforming zeal and whose follow-up study in 1936 was to influence Beveridge’s own report. In a line to the future, his research assistant at Oxford was a bright young economist called Harold Wilson.

But Beveridge was not an easy man. José Harris, in her biography, is reduced to summing him up as ‘rather baffling’. To some, she says:

he seemed wise and loveable, to others overbearing and vain. To some he was a man of dazzling intellect, to others a tedious bore. To some he was endlessly generous and sympathetic, to others harsh and self-centred to the point of complete insensitivity. By some he was seen as a humane, radical and visionary reformer, by some as a dangerous bureaucrat, by some as a sentimental idealist with his ‘head in the clouds and his feet in the pond’. He has been described to me personally as ‘a man who wouldn’t give a penny to a blind beggar’ and as ‘one of the kindest men who ever walked the earth’.⁸

Others have been terser and harsher. Angus Calder in The People’s War describes him as ‘the outstanding combination of public servant and social scientist’, but adds: ‘He was also vain, humourless and tactless.’⁹

He tried to run the LSE as an autocracy, inducing a mutiny by the staff in favour of a constitution. Lionel Robbins, a young lecturer at the school who would later produce the Robbins report of 1963 which initiated the great post-war expansion of British universities, once said: ‘I doubt if it ever occurred to him to regard the great men of those days as his equals, let alone, what some of them certainly were from the academic point of view, his superiors.’¹⁰

Arrogance, brilliance and a belief in statistical evidence did not prevent him from espousing unlikely ideas. Harold Wilson, when Prime Minister, would recall having to talk him out of a firm belief that fluctuations in unemployment were linked to the price of wheat which was in turn affected by a sun-spot cycle.¹¹ The weather, it seemed for a time, was all that there was to blame. He drove himself and others hard. Wilson, staying with him in his pre-war days at Oxford, recalls him rising at six to take an icy bath, following it with a couple of hours’ work before breakfast. If he was far from easy either to know or to work with, he was also no more consistent than the rest of us. Over his lifetime his views varied from strong support for the free market to a dirigiste view of the advantages of central control and planning during the First and Second World Wars, via a distinct if intermittent sympathy with Fabian socialism. At times he favoured generous social welfare, at others he believed ‘the whip of starvation’ was a necessary precondition for economic advance.¹² After his report was published he was to become briefly a Liberal MP, and it is as a liberal and indeed Liberal document that his great work is best read: an attempt to bridge the desire for security and an end to poverty on one bank with encouragement for individuals to stand on their own two feet on the other.

A mere four years before his clarion call for full employment, social security from cradle to grave, a national health service, and a war against ignorance and squalor, he had been for two long walks with Beatrice Webb, then in her eighties, over the downs near her Hampshire home. Her diary records:

His conclusion is that the major if not the only remedy for unemployment is lower wages … if this does not happen the capitalist will take his money and his brains to other countries where labour is cheap … he admitted almost defiantly that he was not personally concerned with the condition of the common people.¹³

If his desire for reform appeared to have waned, the war was to change that. But its arrival in 1939 left him bitter and frustrated. His talent and past experience, he felt, demanded a role in government. He bombarded government departments with offers of assistance, stringent criticism and unsolicited advice. He complained bitterly that ‘the present crew have no conception at all of how to plan for war.’ Along with other veterans of First World War administration, he gravitated to Keynes’s Bloomsbury house during the autumn and winter of 1939. The ‘ancient warhorses’, to use José Harris’s phrase, denounced Chamberlain’s incompetence to each other and devised alternative strategies.¹⁴

When Churchill became Prime Minister in May 1940, Beveridge wrote to remind the old bulldog of their ‘old association’ and to offer his talents. He followed up with letters to Attlee, Ernest Bevin and Herbert Morrison, the key Labour ministers in the newly formed coalition government. None wanted the awkward and arrogant ex-Permanent Secretary around. Bevin, whom Beveridge was later to feel had betrayed him, did offer him charge of a new welfare department in the Ministry of Labour. ‘I didn’t feel that welfare was up my street,’ Beveridge said. ‘… organisation of manpower was my goal.’

One by one, Keynes and the others were absorbed into Whitehall as part of the flood of academics whose presence was to do so much to help win the war against Nazi Germany. But Beveridge, who hardly helped his case by the style in which he proffered advice and sought work, remained outside. Finally, in July 1940, Bevin asked him to carry out a brief survey – in a firmly non-executive capacity – of wartime manpower requirements. At last Beveridge was doing the work he wanted to do. The survey done, in December he again became a full-time civil servant as under-secretary for the military service department at the Ministry of Labour. There he drew up the list of reserved occupations exempt from call-up; but he continued to demand from Bevin an ever larger role in running manpower.

The two, however, did not get on. Beveridge, condemned by so many as autocratic, in turn applied the same adjective to Bevin’s mountainous personality. The bull-necked ‘tsar’ of the Transport and General Workers Union, in Kenneth Morgan’s memorable epithet,¹⁵ had been brought in from the general secretaryship of the union to provide the sound base for labour relations in wartime that the First World War had so notably lacked. Bevin saw his remit coming firmly from ‘my people’. And while he used a range of Beveridge’s ideas during the months they worked together, it seems plain he did not trust with any executive responsibility a man he almost certainly associated with the coercive and at times damaging manpower policies that Beveridge had helped draw up in 1914–18.¹⁶

At the beginning of June 1941 someone else got the job Beveridge wanted: Godfrey Ince, who went on to become the department’s permanent secretary, was made Director General of Manpower. Beveridge was taken off administrative work and put in charge of a study on the way skilled manpower was being deployed into the forces. Four months before, however, in February, the Trades Union Congress had been to government to lobby about the hopelessly untidy mess of sickness and disability schemes by which workers were then covered. An inter-departmental committee was proposed to Cabinet in April. Bevin, having initially opposed the idea, suddenly saw it as a way of getting rid of someone whom he had clearly come to see as a pain in the neck.¹⁷ It was Greenwood who formally made the job offer, but Beveridge recorded twenty years later that it was Bevin who ‘pushed me as chairman of the Social Insurance Committee by way of parting with me … my removal from the Ministry of Labour … was a kicking upstairs’¹⁸ away from the work he believed he was cut out to do. Hence the tears that started to his eyes.

Indeed, so disillusioned was Beveridge that he appears for some