The Five Giants [New Edition]: A Biography of the Welfare State. Nicholas Timmins

Wealth and welfare are partners. They both rose under Attlee’s socialism, Macmillan’s opportunity society and Butskell’s consensus.

A. H. Halsey, ‘A Sociologist’s View of Thatcherism’ in Skidelsky, ed., Thatcherism, p. 186

The memory of massive unemployment began to haunt me then and for many years to come.

Harold Macmillan, recalling Stockton in the 1920s, quoted in Horne, p. 71

Let’s be frank about it, most of our people have never had it so good.

Macmillan at party rally in Bedford, 1957

FROM 1948 TO 1973 Britain enjoyed a sustained period of economic growth, averaging around 2.8 per cent a year. With growth the welfare state expanded, and at times expanded rapidly. More could be afforded, more could be and was done.

There were of course economic ups and downs, some much sharper than others. The two and a half decades saw the arrival of ‘stop-go’ – or perhaps more accurately ‘go-stop’, in which economic stimulus led to overheating in the form of inflation or big balance of payments deficits, to be followed by contraction and then expansion again. But it was not until the early 1970s that the bedrock of the welfare state, full employment, first cracked. Even then the fissure was relatively small: in 1971–2, when for the first time unemployment averaged more than 3 per cent over the year, it did so by only the finest of margins. Such figures were to be low by the standards of the 1980s and 1990s, but what now seem minor shifts in the jobless total stimulated intense controversy; and there was continuing concern at levels of structural unemployment in some parts of Britain that were often double the national average.

None the less, after the initial, painful hiccup over rearmament during the Korean War, the late fifties and early sixties became dubbed the age of affluence. In the mid-1950s, Conservative economic policy was dubbed by the Economist ‘Butskellism’,¹ combining the names of the present and previous Chancellors, Butler and Gaitskell. Neither liked the label. Butler was to cavil in his autobiography that ‘both of us spoke the language of Keynesianism. But we spoke it with different accents and with a differing emphasis.’² After 1955 the cross-party conflict over the handling of the economy sharpened noticeably. None the less, the phrase did capture what in retrospect looks like a broad economic consensus.

This did not mean that there was a consensus on spending on the welfare state. Housing was put top of the Conservatives’ list of priorities and everything else – hospitals, health centres, schools, books – languished for some years a long way behind, a fact made much of by Labour. But there was still perpetual alarm within the government at the apparently inexorable growth in social spending. Repeated attempts at retrenchment in health, social security and education were made by successive Chancellors and the Treasury, but these met with only the most limited of success and were to culminate with the resignation of Peter Thorneycroft as Chancellor of the Exchequer in January 1958. A proto-monetarist faced with inflation and a sterling crisis, Thorneycroft had proposed curbing the money supply and freezing public spending through a package of measures with options including ending the family allowance for the second child, reducing the NHS ophthalmic service, increasing the NHS element in the national insurance contribution, introducing a ‘boarding fee’ or hotel charge in hospitals, and raising the price of school milk. After three Cabinet meetings Macmillan summed up strongly against him, arguing that the family allowance proposal was ‘contrary to the traditions of the Conservative Party’ and that the other measures would create disaffection and fresh wage claims. Only the increase in NHS contributions was allowed through. When Thorneycroft resigned, taking his junior ministers Enoch Powell and Nigel Birch with him, Macmillan, soon to be ironically characterised by the left-wing cartoonist Vicky as ‘Supermac’, insouciantly dismissed the loss of his Treasury team as ‘a little local difficulty’. Social priorities, which included the impact on employment and the housing programme, and the fear of higher wage demands, had taken priority over the fear of inflation. This was, in a small way, a turning point for the welfare state. As Kenneth Morgan has put it: ‘The battle fought out over ROBOT in 1952 was again won by the consensus, one-nation party, with the significant difference that Butler was now chief among the doves.’³

The economy continued to expand and Macmillan’s retort to a heckler in Bedford, in fact delivered at one of the rockier moments for the economy, came to dominate the 1959 general election; helped along by the first recognisably ‘give-away’ pre-election Budget, it turned into the slogan ‘You’ve never had it so good’.

That Budget was to lead to another dose of ‘stop’ and a mild recession in 1962. But it remains true that over the whole of the Conservatives’ tenure up to 1964 there were unmistakable indicators of growing personal wealth and comfort. Production of television sets exceeded a million a year in 1953. The number of cars on the roads rose from 2.5 million in 1951 to more than 6 million by 1964. The proportion of households owning a refrigerator rose from 5 to 37 per cent, those owning washing machines from 11 to 52 per cent. As the 1950s moved into the 1960s the baby-boom generation of the war produced a new word, ‘teenagers’, bringing skiffle and Teddy Boys in Edwardian drapes. Max Bygraves charted the changing times with ‘Fings ain’t what they used to be’ (‘They’ve changed our local palais into a bowling alley’ and ‘… Paris is where we spend our outings’). Coffee bars and rock and roll gave way to the twist and Dansette record players which played LPs made of plastic rather than black acetates which smashed when dropped. As the Macmillan era closed four lads in Liverpool were sending small but heaving audiences mad in a place called the Cavern.

It was only from the middle 1950s onward that it become apparent that although the economy was expanding and Britain was becoming more affluent, its industries were making do with obsolete equipment while the rest of Europe re-equipped. Europe’s prosperity was increasing at roughly twice the rate of Britain’s as the post-war version of relative decline set in. Each period of ‘stop’ and ‘go’ affected the welfare state. Equally, some of the welfare state policies were affecting the economy. Chief of these was housing. And it was housing which first and most clearly showed the party divide over the boundaries of the public and private sectors in welfare.

Housing

The Ministry of Housing was like cricket, you could see the runs, the houses were being built.

Harold Macmillan, quoted in Hennessy, Whitehall, p. 438

This is my moment and I intend to ram it home.

Ben Parkin, speaking in the Commons at the height of the Rachman scandal, Hansard, 22 July 1963, col 1119

A drama of optimism turning into arrogance and ending in disaster … if lifts and security [had] worked, the story would be very different.

Patrick Nuttgens on high-rise housing, The Home Front, 1989, p. 95

Politically, we had to remember that raising the rents of nearly two-thirds of the total houses, affecting anything between 16 and 20 million people, was not exactly an easy operation.

Harold Macmillan, Tides of Fortune, p. 444

Labour’s departure in 1951 saw the end of a six-year period (twelve, if the war is taken into account) when the building of new homes had come close to being a state service. Three-quarters of all new building had been council houses, publicly financed through central government grant and rates; and all of it had been state controlled: private houses, and even repairs above the most minor, had required licences. Bevan had, however, turned down the idea of nationalising housing, and first he and then Dalton had gradually eased

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