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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.