Introduction

The Conservative government elected in the summer of 1979 openly challenged the fundamental assumptions upon which the British postwar welfare state had been founded. The relationship between social and economic policies changed, calling into question the commitment to full employment that both Keynes and Beveridge believed was an essential underpinning of a social democratic welfare state. As Jessop (2002, p 61) much later wrote, reflecting on what he called the “Keynesian national welfare state”:

In this model, public expenditure and the growth of the public sector is desirable because the ‘social wage’, funded by progressive taxation, guaranteed all citizens access to the health, education and welfare services when needed, irrespective of their capacity to pay at the time of their use. Thus inequalities in money income are less important, money wage increases can be restrained and inflation kept within bounds. The risks that individuals face over their lifetime, such as unemployment, sickness and old age are collectivised.

This chapter will follow the transformation over the past quarter of a century from a ‘Keynesian national welfare state’ to one based on supply side economics and a fundamental distrust of public and collective provision, that is, a residual liberal welfare model in Esping-Andersen’s typology (Esping-Andersen, 1990) or a Schumpeterian competitive welfare model in Jessop’s terms. I will look, in particular, at how privatisation shaped not only the development of social policies but also their very function and meaning. Privatisation can mean returning collective responsibilities to the family – ‘re-commodification’ (O’Connor et al, 1999; Jessop, 2002) as well as moving activities from the public sector to the market – ‘marketisation’ (see, for example, Ungerson, 1997; Knijn, 2000).