No escape from the poverty trap

Once pitied, the poor are now despised. Roy Hattersley examines a chronicle of Britain's shifting welfare state

The Five Giants

by Nicholas Timmins

Harper Collins, pounds 25

It was the noblest idea of the century. Britain's post-war determination to slay the "five giant evils" of Want, Disease, Ignorance, Squalor and Idleness was built on a rare spout of national altruism. When the Beveridge Report was published, only 16 per cent of British employers believed that they would gain any personal advantage from a comprehensive system of social security. But 73 per cent of them supported its immediate introduction. The reaction of the professional class and upper-income groups was much the same. Less then half thought they would benefit from the creation of a welfare state. Yet more than three quarters wanted it to be created.

In , Nicholas Timmins describes the fluctuating progress of the battle to implement a uniquely popular idea. He is optimistic about the future - though he clearly believes that the welfare state will survive in a form that Lord Beveridge would be unlikely to recognise. But Timmins is inclined to see the best in every situation. "At the end of the Thatcher era'', he writes, "a remarkable paradox was apparent. A woman whose instincts were to unscramble the NHS and to increase charges, to roll back social security and social services and to return schools to selection and fee- paying had, instead, headed a government which found itself promoting reforms that, however controversial, were plainly intended to improve existing education, health and social services."

Whatever Margaret Thatcher intended, she succeeded in undermining the idea of a mutually responsible society. She created a climate which made it difficult (some cautious politicians would say impossible) to appeal to the country's higher instincts. These days, enthusiasts for more social spending argue not that it is right but that it is expedient to invest in a more healthy and a better educated society. We live in the age of political self-interest which is not always enlightened, so there is a problem about arguing that, by helping the poor, we benefit the prosperous. The submerged ten per cent will probably suffer in silence as long as they are thrown the occasional welfare bone. Society will only help those who need help most when those who shape its opinions argue the Samaritans' case. Once upon a time, they did. Cynics who doubt it should read .

Admittedly, the instinct for self-interest has been encouraged by the discovery that being our brothers' keeper is rather more expensive than we once imagined it to be. In 1942 (when the Beveridge Report was published), 1944 (when the Butler Education Act became law) and 1948 (when the National Health Service was created) there was less understanding of the price which had to be paid for a more civilised society. Kingsley Wood, Churchill's Chancellor of the Exchequer, warned that the fight against poverty would add 30 per cent to the basic rate of income tax. But this Prime Minister either did not believe him or thought that it was a price worth paying. Sentimentalists in the Labour Party will not forgive me for saying so, but if the Attlee Government had not been elected in 1945, some form of (admittedly attenuated) welfare state would have been created by the Tories. It was Winston Churchill who made the wartime promise to provide support "from the cradle to the grave" and then - in the year the health service was inaugurated - insisted that "all these schemes were devised and set in motion before the socialists came into office." No doubt Churchill was bending with the prevailing wind. But supporters of every political party were blowing in the same direction. The climate is more variable today.

Over the years, governments have grown more wise and more cautious. The last consciously reckless administration came into office in 1964 and, determined to redeem the failure of "13 wasted years", immediately abolished prescription charges, increased pensions and tripled the payment to the notoriously neglected "ten shilling widows" who were trapped in poverty simply because of the date of their husbands' deaths. Although Harold Wilson survived on a House of Commons majority of four, he seems not even to have considered the electoral consequences of paying for the new benefits by increasing income tax. Sitting behind Peggy Herbison as the Minister of Social Security's PPS, I thought of myself as a spear-carrier in the army of the righteous. Naive was it in that dawn to be alive. But the pensioners had more money to spend.

Ten years after he sanctioned those sudden increases, Harold Wilson ruefully recorded in his memoirs that the tax-and-spend package of 1964 had precipitated "the first of a series of attacks on sterling" which (after expensive attempts to avoid the inevitable) resulted in a forced devaluation. His admission marked the end of innocence. For the first two years of its troubled life, the 1974 minority government spent (in the words of its Chief Secretary) "money that it did not have". But that happened by mistake, not calculated bravado. When Wilson resigned and Jim Callaghan took over, the discipline which had previously been lacking was ruthlessly imposed - with encouragement from the IMF. The spirit of the time was illustrated by the new Prime Minister's first speech to his party's annual conference: "The cosy world which we were told would go on for ever, where full employment would be guaranteed at the stroke of the Chancellor's pen - cutting taxes, deficit spending - that cosy world has gone for ever!" So had the world of limitless investment in health, education, housing and social services.

is an extraordinarily comprehensive account of half a century's welfare policies and programmes. It will be used for years as a quarry from which to mine historical gems. It succeeds in being comprehensive without ever being incomprehensible, contriving to make interesting even the doctors' invariable argument against every proposal for health service reform. But the greatest attraction - particularly for contemporary politicians - is how it records changes in the idea of welfare. The evolution is more than the universally accepted cliche about the need to avoid the "dependency culture". It is a major shift in attitude towards the poor. In 1945, they were deserving. In 1995, they are not. The politics of altruism shows no sign of resurrection. The problem with predicting the future is that politicians have to be judged by what they do rather than say. They rarely make promises they do not intend to keep, but their promises are always generalities. What seems certain is that a new Labour Government, committed to welfare, will not be able to finance an improved programme unless it rekindles the spirit of 1945 and persuades the people that, although the five giants have been forced into retreat, they are not yet slain. It must convince a generally prosperous people that they have a duty to the poor. It will not be easy.

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