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Chapter Eleven - Death of a Dream: Liberal Values and the Crisis of the British Welfare State, 1945–2014

Published online by Cambridge University Press:  23 February 2022

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Summary

Bismarck as a non-liberal could do what the liberal democracies found and still find hard: to see the state as the guarantor of justice for the poor.

Social intervention by governments in liberal democracies faces two major problems. The first is that it tends to reward the majority at the expense of the weak; there is no agreed way to trade off the claims of different groups, so it comes down to political muscle. The second is that support for intervention depends on a continuing flow of new resources to fix each new problem while still preserving the interests of existing clients – and as a result, subsidies and controls multiply, despite the fact that they often pursue conflicting goals.

In the last quarter of the twentieth century, there was a widespread perception that the British welfare state was facing a crisis. It came to be seen as underfunded, too big to be sustained and too bureaucratic for its own good. The sense of malaise started early; it was taken up by Mrs Thatcher, but shared by such Old Labour politicians as Prime Minister Jim Callaghan, who pronounced in 1976:

For too long, perhaps ever since the war, we postponed facing up to fundamental choices and fundamental changes in our society and in our economy. That is what I mean when I say we have been living on borrowed time […] We used to think that you could spend your way out of a recession, and increase employment by cutting taxes and boosting Government spending. […] [That] option no longer exists, and that in so far as it ever did exist, it only worked on each occasion since the war by injecting a bigger dose of inflation into the economy, followed by a higher level of unemployment as the next step […] I part company with those who believe we can rely indefinitely on foreign borrowing to provide for greater social expenditure, a better welfare service, better hospitals, better education, the renewal of our inner cities and so on. In the end these things, comrades, are only provided by our own efforts.

New Labour, elected in 1997, represented the culmination of these doubts and an attempt to create a new basis for government action.

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People, Nations and Traditions in a Comparative Frame
Thinking about the Past with Jonathan Steinberg
, pp. 163 - 176
Publisher: Anthem Press
Print publication year: 2021

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