Abstract
Despite its historic achievements, the welfare state in Britain — as elsewhere — was widely perceived to be in crisis in the mid-1970s. The immediate causes were economic. The quadrupling of oil prices after the Arab-Israeli war of October 1973 so accelerated the underlying annual rate of inflation that it reached the unprecedented level of 27 per cent in 1975. Simultaneously, there was a slowing down in the rate of economic growth and an actual fall in GDP in both 1973 and 1975 which pushed the number of people out of work, for the first time since the war, to over one million and to a peak in 1976 of 1.5 million This denied government the rising revenue it required to meet increasing demands for welfare, not least from the unemployed themselves; and in the ensuing ‘fiscal crisis’, it was forced to borrow heavily. This in turn undermined foreign confidence in sterling so that the value of the pound fell below $2 for the first time ever, and then plunged rapidly to $1.55. The Heath (1970–4) and Wilson (1974–6) governments responded to these disasters by implementing a series of public expenditure cuts; by imposing, after November 1975, cash limits on all expenditure programmes to make the cuts effective; and finally, in the battle against inflation, by abandoning reflationary demand management and thus the postwar commitment to ‘full’ employment.
This is a preview of subscription content, log in via an institution.
Preview
Unable to display preview. Download preview PDF.
Notes and References
David Owen, quoted in H. Young, One of Us (1989) p. 294. See also Section 8.2 above.
R. Parry, ‘U.K.’, in P. Flora (ed.), Growth to Limits, vol. 2 (Berlin, 1986) p. 169.
T Raison, Tories and the Welfare State (1990) p. 91.
J. Le Grand in J. Hills (ed.), The State of Welfare (Oxford, 1990) p. 350.
J. Barnett, Inside the Treasury (1982) p. 23.
P. Johnson, ‘The assessment: inequality’, Oxford Review of Economic Policy, 12 (1996) 13.
Conservative Party, You can only be Sure with the Conservatives (1997) pp. 1–3, 7.
P. Wilding, ‘The welfare state and the Conservatives’, Political Studies, 45 (1997) 718.
H. Young, One of Us (1989) p. 367.
N. Lawson, The View from No. 11 (1993) Ch. 49.
D. Willetts, Modern Conservatism (1992) pp. 139–42.
Labour Party, Because Britain Deserves Better (1997) pp. 11–13.
J. Le Grand in J. Hills (ed.), The State of Welfare (Oxford, 1990) p. 351.
H. M. Treasury, Public Expenditure (Cm 3601, 1997) table 3. 3.
N. Barr and E Coulter, ‘Social security’, in J. Hills (ed.), The State of Welfare (Oxford, 1990) p. 284.
N. Timmins, The Five Giants (1995) p. 405.
A. Deacon, ‘Spending more to achieve less?’, in D. Gladstone (ed.), British Welfare Policy (1995) p. 91.
J. Hills, The Future of Welfare (York, 1993) p. 39.
N. Timmins, The Five Giants (1995) p. 401;
N. Barr and E Coulter, ‘Social security’, in J. Hills (ed.), The State of Welfare (Oxford, 1990) p. 329.
R. A. Parker, ‘Child care and the personal social services’, in D. Gladstone (ed.), British Social Welfare (1995) p. 181.
N. Timmins, The Five Giants (1995) p. 417.
J. Hills, The Future of Welfare (York, 1993) pp. 74–5.
D. Donnison, The Politics of Poverty (Oxford, 1982) p. 132.
J. Hills, The Future of Welfare (York, 1993) p. 37.
HM Treasury, Public Expenditure (Cm 3601, 1997) tables 3.2 and 3.3;
J. Hills (ed.), The State of Welfare (Oxford, 1990) p. 147.
DHSS, Report of the NHS Management Inquiry (1983) p. 22.
H. Glennerster, Paying for Welfare (Hemel Hempstead, 1997) p. 42. Chapter 3 of this book is a succinct analysis of internal markets.
N. Timmins, The Five Giants (1995) p. 482.
J. Hills, The Future of Welfare (York, 1993) p. 60.
N. Timmins, The Five Giants (1995) p. 510.
J. Hills, The Future of Welfare (York, 1993).
H. Glennerster and W. Low, ‘Education and the welfare state’, in J. Hills (ed.), The State of Welfare (Oxford, 1990) pp. 55–75.
A. Green and H. Steedman, Education Provision, Education Attainment and the Needs of Industry (1993).
J. Hills, ‘Housing’, in J. Hills (ed.), The State of Welfare (Oxford, 1990) p. 154.
H. Glennerster, British Social Policy since 1945 (Oxford, 1995) p. 196.
J. Hill, The Future of Welfare (York, 1993) p. 79.
H. Glennerster, British Social Policy since 1945 (Oxford, 1995) p. 227.
J. Hills, The Future of Welfare (York, 1993) p. 38.
Quoted in N. Timmins, The Five Giants (1995) p. 514.
Author information
Authors and Affiliations
Copyright information
© 1999 Rodney Lowe
About this chapter
Cite this chapter
Lowe, R. (1999). The Welfare State under Threat. In: The Welfare State in Britain since 1945. Palgrave, London. https://doi.org/10.1007/978-1-349-27012-5_12
Download citation
DOI: https://doi.org/10.1007/978-1-349-27012-5_12
Publisher Name: Palgrave, London
Print ISBN: 978-0-333-72138-4
Online ISBN: 978-1-349-27012-5
eBook Packages: Palgrave Social & Cultural Studies CollectionSocial Sciences (R0)