Theme 2 a 4 - Challenges to state welfare provision, 1964-79 Flashcards
(36 cards)
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<p>What was one of the main reasons that the welfare state was put under pressure between 1964-79?</p>
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<p>Britains economic decline- which made it seem unaffordable to many right-wing thinkers and MPs who increasingly posed challenges to welfare provision.</p>
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<p>Economic decline</p>
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<p>What did the Labour campaign promise as part of the 1964 General Election?</p>
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<p>Promised to increase welfare spending.</p>
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<p>Economic decline</p>
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<p>Who became prime minister for the 1964 election?</p>
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<p>What did he discover?</p>
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<p>Harold Wilson</p>
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<p>Discovered that Britian had serious economic problems that had been hidden by the previous Conservative chancellor - Reginald Maudling.</p>
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<p>Economic decline</p>
<p><br></br>What did Wilson & his chancellor discover was the budget defecit in Britain?</p>
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<p><br></br>What was it a result from?</p>
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<p><strong>£800 </strong>million.</p>
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<p>Result of Britains <strong>overspending</strong> on its <strong>military & welfare system</strong>- and <strong>too many imports </strong>entering the country during period of <strong>mass consumerism.</strong></p>
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<p>Economic decline</p>
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<p>What did wilsons advisors suggest he should do in order to rescue the economy?</p>
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<p>What was Wilsons response to this?</p>
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<ul> <li>Cut welfare benefits in order to rescue the economy.</li></ul>
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<ul> <li>Refused- due to his commitment to the welfare state & his desire to win the next election.</li></ul>
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<p>Economic decline</p>
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<p>Wilsons decision to stick to his commitments on expanding welfare provision meant what happened throughout his time in office?</p>
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<p>What were his government forced to pay for & how did they pay for this?</p>
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<ul> <li>Successive economic crises!</li></ul>
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<ul> <li>Gov- forced to pay for a growing welfare state in the 1960s by increasing levels of taxation.</li></ul>
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<p>Economic decline</p>
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<p>In order for Wilsons government to pay for the growing welfare state- they had to use increasing levels of taxation. What were individual taxpayers response to this?</p>
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<p>By 1966- what happened to social welfare costs?</p>
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<ul> <li>It led to a <strong>growing resentment</strong> against the cost of welfare!</li></ul>
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<ul> <li>They had risen to <strong>5%</strong> of <strong>GDP</strong> and were continuing to grow!</li></ul>
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<p>National Insurance Act, 1970</p>
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<p>How did Heaths act extend welfare?</p>
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<ul> <li>Gave <strong>pension rights </strong>to <strong>100,000 people </strong>who had not been covered by the<strong> 1948 National Insurance Act.</strong></li> <li>Introduced an <strong>attendance allowance</strong> for people who needed <strong>long- term care </strong>at home.</li> <li>It established <strong>invalidity benefit.</strong></li> <li>It increased the <strong>child allowance</strong> given to mothers.</li> <li>Made <strong>rent subsidies</strong> available for<strong> low-income families </strong>in private accomodation.</li></ul>
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<p>Who introduced the National Insurance Act, 1970?</p>
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<p>Heath</p>
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<p>Right wing challanges</p>
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<p>During the 1970s- what did wight-wing conservatives such as Sir Keith Joseph argue?</p>
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<ul> <li>Welfare state = leading to reduction in individual freedom.</li> <li>Argued state was the enemy of individual freedom & any growth in welfare state- lead to restriction of individual freedom.</li> <li>Advocates of welfare state assumed government had right to take money away from citizens in order to improve lives of poor citizens</li></ul>
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<p>Right-wing challanges</p>
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<p>Who was a right-wing conservative that believed that the welfare state was leading to a reduction of individual freedom?</p>
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<p>Sir Keith Jospeh</p>
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<p>Right-wing challanges</p>
<p><br></br>What did Joseph claim Wilson would time as time went on?</p>
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<ul> <li>He would take more money in taxes to fund an even larger welfare state.</li></ul>
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<ul> <li>The growth of the state & increased taxes restricted the freedom of British citizens and should therefore be stopped.</li></ul>
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<p>Right-wing challenges</p>
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<p>Who was politician Sir Keith Joseph inspired by in his ideas about the welfare state?</p>
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<p>Austrian economist- Friedrich Hayek</p>
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<p>Welfare and efficiency</p>
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<p>What did Joseph & right-wingers at the think-tank Institute of Economic Affairs believe welfare spending led to ?</p>
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<p>What did they argue- also inspired by Hayek?</p>
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<p>Led to <strong>economic inefficiency.</strong></p>
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<ul> <li>Claimed<strong> private businesses</strong> were run to make <strong>profit</strong>- therefore would spend money in the most <strong>efficient way.</strong></li> <li>Government in contrast- did not want to make a profit & had <strong>no reason </strong>to spend its money <strong>efficiently</strong>. So the more money the gov spent- the more inefficient economy would be.</li></ul>
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<p><strong>Welfare and efficiency</strong></p>
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<p>What did Joseph argue was one of the reasons for Britains economic problems?</p>
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<ul> <li>Since <strong>1945</strong> governments had been spending <strong>large amounts of money</strong> on <strong>welfare.</strong></li></ul>
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<ul> <li>Therefore Conservatives should seek to <strong>cut government spending</strong> in order to make the economy more <strong>efficient</strong> & <strong>Britain richer</strong>.</li></ul>
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<p><strong>Welfare & inflation</strong></p>
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<p>What did Joseph argue that welfare spending required high amounts of?</p>
<p>What did this do to the economy and what were the consequences?</p>
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<ul> <li>Required high levels of government borrowing.</li></ul>
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<ul> <li>This increased the amount of money in the economy without increasing the amount of goods available.</li></ul>
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<ul> <li>Consequence- too much money chasing too few goods, which led to inflation: a general rise in the level of prices.</li></ul>
<p><br></br>Welfare & inflation</p>
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<p>What did Jospeh argue that the governmentdid in response to inflation rising & what were the consequences?</p>
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<p>What was the only way Jospeh thought would end the cycle?</p>
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<ul> <li>Governments tried to make things better with increased welfare spending- which in turn led to even worse inflation.</li></ul>
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<ul> <li>Only way to break cycle = cut government spending- particularly in areas such as welfare.</li></ul>
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<p>What link did radicals in the Conservative party believe was present with welfare?</p>
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<p>Link between <strong>welfare</strong> and <strong>dependency.</strong></p>
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<p>Towards the end of the 1970s- what culture did radical conservatives such as Margaret Thatcher & Keith Josephs claim that the welfare state created?</p>
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<p>What did they claim that welfare payments encouraged people to do?</p>
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<p>Dependency culture.</p>
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<p>Encouraged people to live on benefits rather than gets jobs.</p>
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<p>Welfare & dependency</p>
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<p>What consequences did the 'culture of dependency' have?</p>
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<ul> <li>Promoted economic decline- more and more people gave up work and therefore contributed nothing to the economy.</li></ul>
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<ul> <li>Perpetuated relative poverty, because people preferred to to live on relatively small handouts rather than earning a decent wage.</li></ul>
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<p><strong>Welfare & dependency</strong></p>
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<p>According to the Conservative right- they believed that the dependency culture resulted in moral problems. What did they claim?</p>
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<ul> <li>Welfare robbed recipients of self-respect that people gained through hard work.</li></ul>
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<ul> <li>Robbed people of their<strong> initiative</strong> & <strong>independence.</strong> </li></ul>
<ul> <li>Created a class of people with no aspirations, goals or self-respect who contributed nothing to society but demanded even larger handouts from the state.</li></ul>
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<p>An end to consensus</p>
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<p>Why did the consensus on welfare come under increasing strain?</p>
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<p>Following Heaths failure to win the election of 1974.</p>
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<p>An end to consensus</p>
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<p>Following Heaths defeat- what did his critics on the right sieze the opportunity to do?</p>
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<p>Replace him as a Conservative leader with Thatcher- a right wing candidate who was less sympathetic towards the welfare state.</p>
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<p>An end to consensus</p>
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<p>What generation of conservatives did Thatcher lead?</p>
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<p>Generation of Conservatives who no longer believed in the post-war consensus and felt that cuts to welfare would encourage people to be more <strong>self-reliant </strong>and less dependent on the state.</p>
Welfare policies, 1974-79
What did policies did the new Conservative leadership attack?
Wilsons Labour welfare policies.
Welfare policies, 1974-79
What policies of Wilsons did the new Conservative leadership attack?
- A 25% rise in pension rates & a freeze of council house rents in the budget of 1974.
- Invalid Care Allowance, 1975.
- Universal Child Benefit, 1975 for all children including the firstborn; the number of children under its remit doubled.
Welfare policies, 1974-79
How did Wilson sought to pay for the welfare policies he introduced?
Taxing high- income earners and people who had an income from investments and property.
Welfare policies, 1974-79
What did James Callaghan, who had succeeded Wilson as Labour prime minister in 1976 continue to do & give example?
Continued to develop welfare policies including new pension rights in the Supplementary Benefits Act, 1976.
What was the economic theory of monetarism?
It argued that it was excessive state spending and too much money in the economy that led to both inflation & unemployment.
In 1976 why did the first major cuts begin?
Began as the International Monetary Fund (IMF) insisted that the government cut its spending in return for a loan of $4 billion.
IMF cuts
What was the value of the cuts made?
What did it affect & what was unaffected?
£2.5 billion.
- Housing & education budgets were cut but pensions and other benefits were largely unaffected.
The opponents of welfare
In the 1970s- who became extremely critical of the way they saw excessive welfare spending?
Much of the press- particularly the Telegraph, The Times & The Financial Times.
A growing number of affluent working class & middle class people saw welfare as a problem not a solution- and looked to politicans who shared these same views.
The opponents of welfare
What did the 1970s see the beginning of?
- A general shift which had an impact on welfare.
- The Generation that had grown up in the 1970s were less inclined to endorse the collectivist ways of thinking- that had emerged from the Depression & WW2.
The opponents of welfare
What were the attitudes of the working class?
They were 'aspirational' - their goal was to grow rich rather than defend the rights of their class.
Therefore many had less time or sympathy for policies that meant higher taxes.
The opponents of welfare
Who appealed to the new generation fo the working class?
What did they want?
Thatcher!
Lower taxes & less welfare spending!
The opponents of welfare
How did the Conservatives enter the 1979 election?
Presented welfare as bad for the recipient, bad for the economy, bad for society & a burden on the taxpayer.
