Was the National Health Service the greatest achievement of the 1945-50 Labour Government?
The 1945 General Election saw the Labour Party achieve a parliamentary majority for the first time since its formation, winning 61% of the seats contested (Election History). This provided evidence that the electorate had been ‘radicalised as a result of the experience of war’ (Lee, 177), with Labour augmenting its traditional working-class vote with support from the middle class. The result provided Labour with a clear mandate to introduce the reforms that were laid out in its manifesto. Two of the main influences of these promised reforms were The Beveridge Report (1942) and The White Paper on the National Health Service (1944). While these were joint initiatives of all the political parties who participated in the wartime coalition, it was evident voters believed a Labour government was more likely to deliver the promised changes. Voters’ confidence was well founded as the incoming government legislated a host of reforms in its first term, particularly between 1945-48. This was achieved despite financial pressure resulting from the terms of the $3.75billion loan negotiated with the United States in 1946 and defence spending, which remained stubbornly high. As Egerton points out, this meant Labour had to introduce ‘an austerity welfare state’ (Egerton, 244). It is argued that the National Health Service Act (1946) was the flagship legislation of the Labour government between 1945-50. However, to decide whether the creation of the National Health Service (NHS) was its greatest achievement it is helpful to consider other important initiatives, including the creation of a comprehensive social security system, education reform, industrial development and Labour’s nationalisation programme.
In 1948 the Labour government launched the NHS, its architect being the Minister of Health, Aneurin Bevan. The NHS replaced a combination of voluntary and municipal healthcare providers, a system that tended to disadvantage the less well-off. It was founded on three principles. These were that treatment should be comprehensive, universal and very importantly, free at the point of delivery. It was also administered and funded centrally which mirrored the main principles of the new Labour government ‘in that it was national and nationalised’ (Egerton, 243). What is most impressive about the creation of the NHS was the sheer scale of the endeavour, as Bevan consolidated huge numbers of existing medical facilities and practitioners across the country. In addition, despite fierce opposition from both political enemies and those within the medical profession, he ‘made a deal and entrenched the medical elite’ (Egerton, 243) within the NHS, which also facilitated the co-operation of both hospitals and medical schools. Notwithstanding Bevan’s achievements, some historians argue that the NHS was built from a health service that was already well regarded and that it inherited the goodwill that the existing service enjoyed. Furthermore, Bevan was not able to improve the infrastructure that the NHS acquired. It is estimated that government spending on health was running at around 2% of GDP just before the introduction of the NHS but had jumped to 3.4% by 1951 (UK Public Spending). The additional burden this placed on the public spending of a Labour government, that was already financially constrained, meant that the NHS did not build any new facilities during the 1940s and service was ‘delivered in rundown accommodation’ (Tomlinson, 235). Further proof of the challenges posed by the rising cost of spending on healthcare was provided in in 1949, when the government put in place legislation that would enable the NHS to charge for prescriptions as a means of reducing expenditure. This was controversial as it appeared to be linked to an expensive rearmament programme and was seen by some as the start of a retreat from the concept of treatment being free at the point of delivery. The result was that Bevan, the architect of the NHS, resigned from his new cabinet role as Minister of Labour and two of his cabinet colleagues followed suit.
Alongside the introduction of the NHS, the Labour government moved quickly to implement many of the measures that were recommended by The Beveridge Report. Beveridge was an expert on unemployment insurance and laid out a framework for ‘comprehensive social insurance, covering all contingencies “from cradle to grave”’ (Tomlinson, 234). The starting point for implementing Beveridge’s recommendations was the Family Allowances Act (1945). A caretaker Conservative government, that was in office in June 1945, had enacted this legislation and it was adopted by the incoming Labour government and passed into law in 1946. It provided for a weekly payment for each child, apart from the eldest, paid for out of general taxation. In 1946 two more ambitious pieces of legislation were enacted, The National Insurance Act and The National Insurance Industrial Injuries Act. These put in place sickness and employment benefits, retirement pensions for all, compensation for injuries and disability pensions. The aim was to fund this through a flat rate insurance contribution by employees and employers. Labour had opposed this idea before the war, believing this method of funding social security costs as a form of regressive taxation. However, they balanced this against introducing pensions immediately, albeit at subsistence levels and not requiring an initial ‘build-up of contributions, as Beveridge had suggested’ (Egerton, 242). Nevertheless, this did mean that the government would have to make up the shortfall in funding. This saw spending on social security rise from 1.5% of GDP during the Second World War to 3.2% by 1948 (UK Public Spending). Nevertheless, this was still below the peak level of 3.7% reached in 1933 because of the substantial unemployment benefits being paid in the wake of the Great Depression. Importantly, the increased funding that was required in 1946 was more modest than expected. This reflected the fact that while the new Labour government had created an expensive welfare safety net, the success of its policy of pursuing full employment meant an elevated level of unemployment payments did not burden the new Ministry of National Insurance. In parallel with the NHS, the implementation of the Beveridge Report was an enormous and expensive undertaking. However, Egerton argues that it was not as revolutionary as has been suggested. He maintains that in the 1930s a welfare system already existed that served the working class and that what was achieved between 1945-50 was just ‘their extension, not a radical change’ (Egerton, 237). Lee goes further arguing that ‘the real foundations for the welfare state had been laid by the Liberals before 1914’ (Lee, 188).
In terms of education, the new Labour government inherited The Education Act (1944), which had been passed by the wartime coalition. Its recommendations were fully implemented and included raising the school leaving age to 15, with the longer-term aim of this moving up to 16. It also sought to provide free compulsory education from 5-15 and that secondary schools would no longer be allowed to levy fees. The Local Education Authorities were also required to provide both free milk and medical care and there would be substantial investment in infrastructure. Despite these good intentions, given the financial commitments already being made by the government and the shortage of building materials, the latter was not achieved. Furthermore, Labour’s hands were tied to a certain extent by the existing legislation, which supported the tripartite system of grammar, secondary modern and technical schools. In Watson’s view, this made it ‘difficult to create a nationally coherent system of education’ (Watson, 356). This reflected the views of a number of members of the government who favoured the idea of comprehensive schools. Regardless of this, the Labour government did implement the tripartite system, but then ‘spent the next twenty years seeking to undo this’ (Lee, 192).
The Barlow Report (1940) was another document that provided traction for the new Labour government. It addressed the legacy of The Great Depression and ‘visualised a complete overhaul of the stagnant depressed areas’ (Morgan, 54). The Barlow Report provided the framework for the Distribution of Industry Act (1945) that was designed to stimulate recovery in industrially deprived areas such as South Wales or the Northeast of England. It had two main provisions. First, the creation of development areas where the government could build factories that could be rented to the private sector. Second, that the site of any larger factories would be agreed between the developer and the Board of Trade. The Act played an important part in the government’s vision of ‘full employment based on government intervention’ (Cronin, 112). Westminster assumed a role in the construction of almost one thousand industrial developments between 1945-50. These created 200,000 jobs, which facilitated a reduction in unemployment in depressed regions from 550,000 before the war to 100,000 by 1950. Nevertheless, this apparent success was not without a cost. Many council houses were built between 1945-50 to address the growing population and the poor quality of much of the housing stock, an issue that had been exacerbated by the destruction caused by the Blitz. The problem was that the ‘provision lagged behind the growth in demand’ (Tomlinson, 235) as a substantial amount of building materials were diverted to commercial construction.
The incoming government also launched a programme of nationalisation. This was a longstanding policy of the party and was enshrined in Clause IV of the Labour Constitution that was adopted in 1918. Clause IV advocated ‘the common ownership of the means of production, distribution and exchange’ (Lee, 187). The Bank of England, civil aviation, coal, cable and wireless were nationalised in 1946 and in 1948 this was followed by the nationalisation of electricity, gas and inland transport. A fierce political argument broke out over the nationalisation of iron and steel, which Lee argues reflected the fact that it ‘was the most effectively run’ (Lee, 187) of those entities slated for nationalisation. Regardless of this, the strength of Labour’s nationalisation ideology was such that it invoked a constitutional crisis to ensure the measure eventually passed through the House of Lords and the nationalisation of the steel industry was finally completed in 1951. However, with the exception of the Bank of England, the programme of nationalisation did not include ‘the financial sector or the manufacturing industry’ (Tomlinson, 235), limiting the ability of the government to directly manage the country’s broader commercial base. It is also not clear if the government did substantially influence the industries it did own, as management continued to enjoy a high level of autonomy. More pertinently, nationalisation created another challenge as the focus of trade union complaints shifted from private shareholders to the government, something that had ‘ominous implications for the future’ (Lee, 186). Labour’s privatisation initiatives in the 1940s were an important statement of the party’s socialist credentials. Despite this fact, the trend was short-lived. By the 1990s most of the industries that were nationalised in the 1940s had been privatised. Furthermore, in 1995 New Labour considerably watered-down Clause IV, as it sought to widen the party’s appeal.
In conclusion, the scale of the Labour government’s accomplishments between 1945-50 was impressive. While some argue that the creation of the NHS and a comprehensive social security system were not as innovative as they appear, they remain enormous achievements and are institutions that have stood the test of time. Other initiatives were less successful. The creation of development areas provided a short-term stimulus to the economy, while education policies and the nationalisation programme stored up problems for the future. Nonetheless, when the Labour party took office in 1945, perhaps surprisingly, it managed to obtain the ‘co-operation of Britain’s administrative and business elites’ (Cronin, 111), which despite the new government’s financial constraints enabled it to implement a raft of legislation. While the birth of the NHS is seen as the landmark of the post-war Labour administration, its greatest achievement was getting the British people to assume ownership of the new welfare state. This was illustrated by the fact that when the Conservative party regained power in 1951, it did not tamper with the mechanisms put in place, ‘because the British people would not tolerate otherwise’ (Cronin, 131).
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