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Social justice
26 March 2013

Labour’s post-war settlement is alive and well in the 21st century

Veteran lefty Ken Loach has new film out called The Spirit of ’45, a far from balanced documentary about the Attlee government.

In a thought-provoking post for the Royal Society of the Arts, Adam Lent takes issue with the idea that Labour’s post-war settlement is dead and buried, killed off by wicked Thatcherites:

  • “...the narrative behind the longing for the ‘Spirit of 1945’ is wrong. Political values may have shifted unrecognisably from that period but in terms of cold hard cash, Beveridge and Attlee remain the towering figures of our age.  In fact, their importance has only grown.
  • The three areas that the Attlee Government hard-wired into the fabric of state provision were pensions, healthcare and social security. A brief look at the change in the share of public spending going to these areas reveals why, far from fading, the ‘Spirit of 1945’ is in the sort of health that would make Nye Bevan proud.

The overall trend over the last fifty years is clear – public spending as a share of GDP is up and so is spending on health, pensions and welfare as a share of public spending.

The trouble is that while political support for the welfare state remains strong and broad-based, we’re finding it increasingly difficult to pay for it:

  • “So the real challenge is not how we return to some lost world of pre-Thatcher glory but how we maintain a civilised and just society when the mechanism established under Attlee to do this has become unsustainable.”

Lent argues that a new guiding principle is required, but what does he have in mind? Not the Big Society, that’s for sure: 

  • “...the idea that a half-baked marketing concept might genuinely recast seventy years of the Beveridge behemoth was always ludicrous.”

He also point out that while Thatcherism changed a lot of things, it too failed to slay the “Beveridge behemoth”:

  • “...the right has tilted constantly at the extra role [welfarism] gives to government. Their alternative guiding principle has been the notion that the state is a malign interference in the beneficial operation of the market and its cornerstone of individual responsibility. However, despite eighteen years of Conservative Government inspired by this view… the figures above show how ineffective this has been as a mobilising ideal.”

Indeed, the reduction in public spending as a percentage of GDP achieved under Margaret Thatcher did not last and most public services were barely reformed.

So what could replace the ‘spirit of ’45’ in British hearts? Lent begins by identifying what he sees as the fundamental flaw in the post-war settlement:

  • “...its deeply remedial nature: the notion that the role of the state is to pick up the pieces resulting from the failure of the market and the individual.  In short, the state steps in when things go wrong. The obvious alternative view that the state may have a role in stopping things going wrong in the first place has always been the less favoured sibling despite the fact that it is potentially just as powerful and fruitful as the remedial conceptualisation.”

The result of this, he says, is “a state state that spends more on welfare than on education... commits only 2% of the healthcare budget to prevention and public health and spends £1.5 billion on a hotchpotch of benefits for better off pensioners.

He therefore calls for a state that  is “designed to generate success rather than ameliorate failure.” Most Conservatives would be agree with him on that. But what he doesn’t acknowledge is the possibility that it is the monolithic, top-down structure of the state that predisposes it to follow the failure model.

We will not have a “success state” until resources are radically decentralised and placed under the stewardship of those who see the state as a means of achieving the common good and not as end in itself.


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