1. The Thatcher Administration, the Bailey Report and the Welfare State, 1979-1990.
This essay will consider how the Thatcher administration of 1979-1990 intended to dismantle the
welfare state but only managed to chip away at the provisions and began to undermine the welfare
state. This is also reflected in the current Conservative governments approach to the welfare state.
This essay will look at what the Central Policy Review Staff Report on Longer-Term Options of
September 1982 proposed1. This essay will mainly focus on the events of 1982 and the policies
which followed the Report under the Thatcher administration, as well as some examples from the
current Conservative government. This essay will discuss the extreme nature of the Report as well
as why it was subsequently shelved. It will also discuss how the Report is reflected in Thatcher’s
policies and will critically discuss how the Report’s ideology is reflected in the current government’s
approach to the welfare state and how the Thatcher administration has influenced the current
government’s handling of welfare policies. This essay is primarily based around the Bailey Report
which can be found in Appendix A. The Report was not intended to be circulated to ministers prior
to the cabinet discussion on 9th
September 19822. The discussion of the Report was not provided
in the minutes of the meeting, and little was written about it in the conclusions of the meeting. The
original document was held in the archives and was not intended to be seen by the public before
the thirty year rule. However, parts of the revised version of the Bailey Report were leaked to
reporters at The Economist3.
Other sources that will be used in this essay include legislation such as the Housing Act 19804, a
number of articles on the Central Policy Review Staff, Thatcher and her welfare policies as well as
newspaper articles from The Economist, The Guardian and The Independent as well as archival
material such as the Bailey Report, cabinet discussions and correspondence between MPs. It will
also include a family paper, The Intimidation Powers of Arthur Scargill5. The family papers will be
utilised as context to show a public view of Margaret Thatcher and her party according to an
independent voter from the Yorkshire area. However, it is important to note that these views do not
represent the whole country. Although many of the views presented were popular at the time. A
number of books are also used to consider the welfare changes introduced between 1979 and
1990, such as Peter Clarke’s Hope and Glory.
The Bailey Report will be critically analysed and will also be used to illustrate the extreme policies
suggested by the Central Policy Review Staff and considered by Thatcher and some members of
the Conservative party in 1982. The key drafter of the Bailey Report was Mr Alan Bailey, a
1 Central Policy Review Staff, Longer Term Options Memorandum (1982) Public Record Office, Kew, Hereafter
“Bailey Report”
2 Cabinet Discussion Conclusions: 9th
September 1982 (1982) Public Record Office, Kew
3 “Thatcher’s think-tank takes aim at the welfare state.” The Economist, 18th September 1982
4 Housing Act 1980
5 K, Bonsyl, The Intimidation Powers of Arthur Scargill (Family Papers, Unpublished)
2. Treasury deputy secretary on loan to the Central Policy Review Staff. He was an expert on public
spending and was also deputy to the head of the Central Policy Review Staff, Mr John Sparrow6, at
the time the Report was presented to Cabinet. During Sparrow’s term as head of the Central Policy
Review Staff, the Staff was plagued with a number of leaks. Sparrow was adamant that these
leaks were not done by the Think-Tank staff7, although it is unsure who leaked the documents. The
Report will also be compared to the policies introduced throughout the Thatcher administration.
This essay will argue that although the Bailey Report was shelved, its lethal plan to dismantle the
welfare state could be seen in following Thatcher policies, although in an extremely diluted form.
As well as this, both the plans of the Think Tank, and the views shared by Thatcher on the welfare
state are reflected in many policies introduced and suggested by David Cameron under the current
Conservative administration and the previous coalition government also headed by Cameron. This
essay will argue that the Thatcher administration had vicious plans to dismantle the welfare state
but due to the nature of the welfare state, understood that in order to dismantle it, the process
would have to be a slow one and would require a constant chipping away of the long standing
provisions and institutions of the welfare state. The plans suggested in the Bailey Report had the
potential to completely dismantle key components of the welfare state. Social security provisions
would have been minimal, the NHS would have become a private institution with only absolute
minimum rebate from the government for the neediest. As well as this, extreme education policies
would have been introduced which would have potentially seen privatisation of the education
sector. These changes would only provide help for those who really needed help. Thatcher was
also a great supporter of individuals relying on family and voluntary organisations and so those
who really needed help would have been encouraged to use such help before applying for
government help. By looking at the state of welfare provisions today, it seems that even the
neediest would not receive sufficient help from the government. The Report was not well received
by a number of Conservative MPs and was venomously rejected upon its discussion. Peter Shaw,
the shadow Chancellor of the Exchequer, also warned Thatcher’s Chancellor of the Exchequer,
Geoffrey Howe, of public protest if he were to pursue the “wrecking and destructive policies” of the
Bailey Report8. Following its discussion, it was immediately shelved. The aim of the Report to
dismantle the welfare state would only leave minimal provisions only as an absolute last resort for
the poorest in society.
It is expected that the research will find that the Thatcher administration, in an attempt to roll back
the state and create a more individualistic state with absolute minimal reliance on state
intervention, changed the dynamics of the welfare state with her changes still being felt today. It is
also expected that it will be found that Thatcher and Howe supported more sinister plans to
dismantle the welfare state by the Bailey Report but this was only halted due to the resistance of
6 N3
7 James, S., “The Central Policy Review Staff: 1970-1983.” (1986) Political Studies, XXXIV, 423
8 Letter from Peter Shaw to Geoffrey Howe: 24th September 1982 (1982) Public Record Office, Kew
3. the ‘wets’, the Opposition and the public. Her attempts to destroy the ‘nanny state’ created by the
post-war Labour government, essentially failed however her influence is still strong in the current
Conservative party and some members of the party are still committed to dismantling the welfare
state.
This essay will firstly consider the historical development of the welfare state and who and what
influenced its creation as well as the welfare states importance in the modern day society. It will
then go on to critically examine the Bailey Report and the Thatcher government. Following this, will
consider the changes made to the welfare state following the Bailey Report9. The essay will then
finally discuss the reflection of the Bailey Report on present day welfare reform and how the
current Conservative government approach the issue of the welfare state. Before concluding its
overall findings.
This essay will first consider the historical development of the welfare state as a framework for
following discussion.
The welfare state was first anticipated by the Royal Commission into the Operation of the Poor
Law in 183210. The Commission conducted extensive research which included sending out
questionnaires and visiting 3,000 of the 15,000 parishes in England11. Edwin Chadwick, one of the
lead Commissioners, believed that the system needed to be rigorously controlled centrally in
London and also believed that the Poor Law needed to be reformed in order to deter people from
unnecessarily making demand on public funds.12. Following the widespread support from the
government for the Commission, the Poor Law Amendment Act was passed in 183413. This
implemented the Commissions main recommendations. The new poor law ensured that all poverty
was relieved in workhouses and that children in the workhouse received some schooling14. In
return for this, people of the workhouse were expected to work several hours each day. However,
the workhouse was seen as an absolute last resort for people. It was not a comfortable life.
Richard Oastler described workhouses as “prisons for the poor” which punished the poor through
no fault of their own15. Whilst this Commission anticipated the creation of the welfare state, even
during the implementation of the Poor Law Amendment Act 1834, there were people who felt like
more was needed to be done.
9 This essay will not discuss the tax rate system or social security by agreement with tutor, Lorie Charlesworth.
10 Royal Commission into the Operation of the Poor Law, 1832
11 Parliament.uk., “Reforming Society in the 19th Century, Poor Law Reform”, http://www.parliament.uk/about/living-
heritage/transformingsociety/livinglearning/19thcentury/overview/poorlaw/, Last accessed 4th
April 2016
12 ibid
13 Poor Law Amendment Act 1834
14 Lobove, R., Social Welfare in Transition: Selected English Documents: 1834-1909 (University of
Pittsburgh Press, 1996)
15 Ostler, R., The Rights of the Poor to Liberty and Life (Roake and Varty, 1838)
4. Further influences on the creation of the welfare state includes research conducted by Booth and
Rowntree. Charles Booth conducted research between 1889 and 1901 and found that 30% of the
population were living in extreme poverty. This was much more than the 25% suggested by
socialists. He found that only 3% of this 30% were being aided by the poor law and argued that
poverty was a major problem that only interference by the government could really help. He also
introduced the poverty line. This is the level of income needed to prevent a family from living in
starvation16. Following this, Seebohm Rowntree found that at least 20,000 people were living
below the poverty line. He found a similar level of poverty in York as Booth had found in London
and also called for a minimum wage of £1.08 per week17. According to Fraser, “Booth and
Rowntree gave the growing public concern over poverty the statistical evidence on which to build
the case for state aid”18. As a result, their influence over the creation of the welfare state has long
been recognised. Their ideology had transferred through other reports.
The 1906 Liberal government, led by Henry Campbell-Bannerman, tackled a number of welfare
issues and essentially, with the Beveridge Report, paved the way for the introduction of the modern
welfare state. The Liberal government introduced the National Insurance Act 191119, the Children
and Young Person Act 190820 and introduced free school meals in 1906 in order to improve the
health of children, ensuring the poorest received at least one hot meal a day. The 1906 Liberal
government did not aim to create a welfare state to provide for all, rather their primary aim was to
provide provisions for the three groups they deemed most vulnerable and most needy: the elderly,
the young and the sick. The legislation introduced by the Campbell-Bannerman administration was
extremely progressive and improved provisions for the three most vulnerable groups.
The Beveridge Report21 was produced in 1942 by William Beveridge, a poor law lawyer, and was
arguably the most influential report in the creation of the welfare state. Beveridge introduced the
“five giant evils”; want, ignorance, squalor, disease and idleness and suggested a system of a flat-
rate social insurance in order to defeat the five evils22. In order for his scheme to work, he stated
full male employment was needed as well as a national health scheme and family allowance. This
report is often seen as the “blueprints of the welfare state”23. The Beveridge Report was arguably
the most influential Report for the creation of the welfare state. Beveridge identified the most
damning problems leading to poverty and also introduced a proposal to solve this ongoing political
issue.
16 Booth, C., Life and Labour of the People of London (Macmillan, 1901)
17 Rowntree, S., Poverty: A Study of Town Life (2nd
Revised Edn, Policy Press, 2001)
18 Fraser, D., The Evolution of the British Welfare State (4th
Edn, Palgrave Macmillan, 2009)
19 National Insurance Act 1911
20 Children and Young Persons Act 1908
21 Beveridge, W., Social Insurance and Allied Services Report (1942) Public Record Office, Kew
22 Powell, M., and Hewitt, M., Welfare State and Welfare Changes (Open University Press, 2002)
23 ibid
5. The post-war reconstruction began with Churchill's coalition government during the war who
created further provisions which would pave the way for the modern welfare state. The
reconstruction followed the broad outlines of Beveridge's vision, however it did not follow it
completely24. Following a landslide victory of the Labour party in 1945, a number of welfare
initiatives were introduced. The Atlee government aimed to create a system which would support
its citizens “from cradle to grave”25. The legislation introduced aimed to tackle the five giants
identified by Beveridge and legislation needed to create a welfare state was placed high on the
governments political agenda26. One important piece of legislation was the Butler Education Act
194427 which ensured that every child had access to free secondary school education. The welfare
state created by the Atlee government launched a political attack on poverty and is still today seen
by many as one of the greatest British achievements in history. It is extremely important in the
British culture, this was illustrated through the 2012 Olympic opening ceremony which celebrated
the British welfare state from beginning to end.
This essay will now discuss the Thatcher government, its aims and its attitude towards the welfare
state. This will be done primarily by discussing the Conservative party Manifestos.
However, the welfare state was not loved by all and seemed to be a political threat to the ideology
of the Conservative party. In 1979, an administrative attack on the welfare state was launched by
Thatcher’s government. A number of controversial changes were made by the Conservative
government headed by Margaret Thatcher between 1979 and 1990. Thatcher’s Conservative party
won the 1979 general election with 339 seats (43.9% of the vote) and a majority of 4428 due to the
previous Labour government's failure to manage the economy and control the unions29. Thatcher
was well known for her uncompromising politics, and as such, she gained the nickname “the Iron
Lady”. Thatcher came into office at a time where Britain was in a state of economic and political
chaos, the Government was close to bankruptcy, conflicts with labour unions were prevalent and
unemployment was rising30. Thatcher intended to roll back the state and wanted to push back the
intervention of the state in order to promote individualism and self-help, and this is clearly identified
in each of her General Election Manifestos of 197931, 198332 and 198733 as well as her numerous
24 ibid
25 N21
26 Clarke, P., Hope and Glory: Britain 1900-1990 (Penguin, 1996)
27 Butler Education Act 1944
28 Electiondeamon.co.uk., “1979 Election Results”, http://www.election.demon.co.uk/genresults.html, Last accessed 6th
March 2016
29 BBC News., “1979: Thatcher Wins Tory Landslide” (2005)
http://news.bbc.co.uk/1/hi/uk_politics/vote_2005/basics/4393311.stm, Last accessed 4th April 2016
30 Biography.com, “Margaret Thatcher Biography” http://www.biography.com/people/margaret-thatcher-9504796, Last
accessed 1st
December 2015
31 Conservative Party (1979) “Conservative Party General Election Manifesto”
http://www.conservativemanifesto.com/1979/1979-conservative-manifesto.shtml Last accessed 1st December 2015
32 Conservative Party (1983) “Conservative Party General Election Manifesto”
http://www.conservativemanifesto.com/1983/1983-conservative-manifesto.shtml Last accessed 1st December 2015
33 Conservative Party (1987) “Conservative Party General Election Manifesto”
6. speeches to the public and during Conservative Party Conferences.
In their 1979 Manifesto, the party made no specific mention of the “welfare state”. Instead, a
section on “helping the family” was created34 in relation to one of the party's five main tasks of
“support[ing] family life, by helping people become home-owners, raising standards of their
children's education, and concentrating welfare services on the effective support of the old, the
sick, the disabled and those who are in real need”35. This aim included the promotion of home
ownership, quality or choice in education, quality of health service and other welfare service
through the better use of other resources. The Manifesto also states that this would be done
through simplifying and decentralising and cutting back bureaucracy.
The 1983 Manifesto, discussion of the welfare state came under the heading, “Responsibility and
the Family”36. The 1983 Manifesto begins by stating that the nations choice is between the
progress made by the current Conservative government or extreme and dangerous policies
suggested by the Opposition, stating these policies were “more extreme and more dangerous than
those ever put forward by any previous Opposition”37. However, it should be noted that the
Opposition policies should not have been the biggest worry for the nation, rather it should be the
dangerous and extreme policies considered by Thatcher only months before the 1983 General
Election in the Bailey Report. As well as this, the Manifesto explicitly defends the need to continue
a high level of defence. What it fails to address is that without cutting the defence budget, the most
logical cuts would have to come from the other major public expenditure programmes: education,
health and social security. This directly reflect the general suggestion of the Bailey Report38 which
included no cuts to defence but cuts to the other programmes. The success of the Conservative
party in 1983 was not due to the policies suggested, and is certainly not due to the provisions
made or suggested for welfare state reform. The success is largely down to the success of
Thatcher dealing with the Falklands War39. This is therefore a reason why cuts to defence were so
obviously missed from cuts in the Manifesto and why voters were happy to re-elect Thatcher even
after the Bailey Report leak.
Again, throughout the 1987 Manifesto, the focus seems to be on independence and choice40. The
Manifesto states that they are “building One Nation free, prosperous and responsible families and
people” with “[a] Conservative dream becoming a reality”41. Its main aims include “greater choice
http://www.conservativemanifesto.com/1987/1987-conservative-manifesto.shtml Last accessed 1st December 2015
34 Clegg, S., “Thatcher and the Welfare State” (1989) International Socialism, 2:44
35 N31
36 N32
37 ibid
38 N1
39 Sanders, D., et al., “Government Popularity and the Falklands War: A Reassessment (1987) Journal
of Political Science, Vol 17, Issue 3, 281
40 N33
41 ibid
7. and responsibility over [the individuals] own lives” and safeguarding those who depend on the
community42. This explicitly implies that the aim of this Government is individualism and self-help
with only minimal provisions for those who really need the help of the welfare state and
government help. The welfare state is, again, not mentioned with only “Wider Ownership and
Greater Opportunity”43 being a heading covering housing, education, social security and health.
Throughout the above mentioned Manifestos, the welfare state focus has been lost and in its place
has been the idea of individualism and self-help. Each manifesto has emphasised greater choice
and better help as a way of disguising the attempt to dismantle the welfare state, or at least chip
away at its provisions.
The essay will now discuss how and why the Bailey Report was produced as well as what the
Report suggested and what these suggestions would mean.
In 1982, the Bailey Report was produced by the Think Tank headed by John Sparrow. The Bailey
Report was a report produced on request from the Treasury after worries were expressed over
public expenditure and public spending. The Report was commissioned to provide suggestions of
longer-term policies which would curb future public expenditure. These policies were extremely
radical and if accepted by cabinet, had the real potential to wholly destroy the welfare state with
absolute minimum provisions for the most needy. The provisions left in place for such people would
likely be unsatisfactory and the Report also acknowledges that the policies suggested would
exasperate poverty to a level which should be deemed unacceptable by ministers44. The Report
was leaked to The Economist following its discussion in cabinet and an article named Thatcher's
Think Tank Takes Aim at Welfare State was produced critiquing the Bailey Report's main
suggestions as well as information on the discussion on the cabinet which was withheld from the
minutes45. The Bailey Report was heavily backed by Geoffrey Howe and Thatcher46, and was
discussed at a special half-day cabinet meeting on the 9th September 198247. Following resistance
from the 'wets', it was promptly shelved. Thatcher later attempted to distance herself from the
papers as much as possible, perhaps in an attempt to lessen the damage to the party.
The Report, although apparently disregarded by Cabinet, was a collaboration of which could only
be described as quite possibly the most extreme suggestion to curb public expenditure within the
four major expenditure programmes: education, health, social security and defence as well as
other smaller expenditure programmes which included housing and employment. It was also one of
42 ibid
43 ibid
44 N1
45 N3
46 Travis, A., “Margaret Thatcher’s role in plan to dismantle welfare state revealed” The Guardian, 28th
December 2012
47 N2
8. the most significant paper produced by the Central Policy Review Staff48. Whilst Thatcher
sympathised with the opinions given in the paper, she understood that pursuing the radical
changes would cause a fatal split in the Conservative party which would leave it open to severe
criticism49. However, this did not stop her from being outraged from the hostile attitude of many
members of Cabinet. Due to the resistance of the cabinet ‘wets’ the Report was shelved directly
following the cabinet discussion. The secrecy and extreme nature of the Report is highlighted in
correspondence between the head of the Central Policy Review Staff and Margaret Thatcher dated
2nd
September 198250. This letter not only evidences Thatcher's fears of a leak of the Report, but
also evidences that Sparrow acknowledged that a leak would be damaging regardless of the form
of the Report, implying that even the authors of the Report deemed it controversial. The letter also
notes that the original version of the Report was to be circulated to Thatcher and Howe, with other
ministers receiving the revised version51. This suggest that Thatcher not only understood the
severity of the Report, but also suggests that Thatcher did not trust her cabinet as could
reasonably be expected.
It could be considered naïve to suggest that the Bailey Report truly reflected the absolute
intentions of the Thatcher administration. The Treasury instructed the Central Policy Review Staff
to create a longer-term expenditure plan in order to curtail the public expenditure. Whilst Thatcher
did not oversee the discussion or creation of the document, she commissioned it and the key
drafter, Mr Bailey, was on loan to the Central Policy Review Staff from the Treasury52. Once
Thatcher received the document, she did not waive her support of the document. She order for it to
be circulated separately from the other papers set to be discussed on the 9th
September, the paper
circulated was a revised version. This was initially to prevent any leaks as although Thatcher stood
by the Report, she understood the gravity of its suggestions. She understood that such a Report
and its potential consequences would not be supported by a vast majority of the British public53, or
the opposition and especially those who relied on the welfare state to live their day to day lives as
well as those employed by institutions of the welfare state who would likely lose their jobs and who
would understand the true moral problems with such extreme provisions. For example, there was a
national strike on pay in the NHS in 198254. The suggestions made in the Bailey Report would, in
no way, have ensured that jobs or pay would be safe. A special half-day meeting was created
especially for the discussion of the Report. However, the revised paper was circulated prior to the
meeting and was circulated to all departments. Due to this, it could be argued that Thatcher did
hope for more support, although wary of resistance, and also suggested that she had some serious
48 N3
49 N3
50Letter from John Sparrow to Margaret Thatcher: 2nd September 1982 (1982) Public Record Office, Kew
51 ibid
52James, S., British Government: A Reader in Policy Making (Routledge, 1997)
53 N50
54Clover, B., “Large Scale Nurse Strikes Never Seen” (2010) http://www.nursingtimes.net/news/workforce/large-scale-
nurse-strikes-never-seen/5017572.fullarticle, Last accessed 19th April 2016
9. consideration for taking the Bailey Report suggestions further.
The plans of the Bailey Report, as mentioned above, were shelved promptly after the cabinet
meeting55. These radical options were not enforced in their entirety, however it seems their legacy
lives on in some policies introduced by Thatcher. The Bailey Report also seems to live on in some
of the more modern policies introduced by the current Conservative Prime Minister, David
Cameron.
This essay will now consider the Bailey Report and will compare it to welfare changes introduced
by the Thatcher administration and will consider whether this suggests that Thatcher planned to
dismantle the welfare state. Changes made to social housing will be discussed followed by
education reform and health reforms.
The difference between the suggestions made in the paper and the policies ultimately pursued by
the government are monumental. If these plans had been introduced and had not been met by
immense resistance, it is likely that the Thatcher administration would not have lasted nearly as
long as it did. The welfare state would also have been in jeopardy as these plans had the potential
to completely disband the welfare state, an institution so highly regarded by many British citizens
since its creation. Whilst the public attempted to resist other Thatcherite policies, animosity toward
the government flourished. As a result, even if a single suggestion had been implemented, the
resistance towards the policy would have made it nearly impossible for Thatcher to stay in power.
As mentioned above, the 1979 Conservative manifesto had no specific mention of the welfare
state, rather a section on “helping the family”56. In elaborating the goal of promoting personal
responsibility and helping others to help themselves, stress was primarily laid upon home
ownership in Thatcher’s first tenure. According to Bell, this is where “the really dramatic changes in
social policy has occurred”.57 Whilst ministers implemented severe public expenditure cuts, they
also cut funding for housing, implemented large rent increases, and undermined repair and
improvement programs in the public housing sector of the council58.
As well as this, the most notable housing policy implemented is the “right to buy” scheme
introduced under the Housing Act 198059. This scheme allowed council tenants to purchase their
own property60 with generous discounts. These discounts were based on the length of tenure and
55 Lawson, N., The View From No. 11:Memoirs of A Tory Radical (Bantam Press, 1992)
56 N34
57 Bell, D., The Conservative Government 1979-1984: An Interim Report (Croom Helm, 1985)
58 Scott-Samuel., et al., “The Impact of Thatcherism on Health and Well-Being in Britain” (2014) International British
Journal of Health Services, Vol 44, No 1, 53
59 N4
60 Forrest, R., and Murie, A., Selling the Welfare State: The Privatisation of Public Housing (Routledge, 1988)
10. long-standing tenants could even purchase the property for around half the market value61.
Timmins argues that this was “the biggest single privatisation of the Thatcher era, raising £28
billion over thirteen years – more than the sale of gas, electricity and British Telecom put
together”62. Thatcher stated that Anthony Eden had chosen the goal of a home owning democracy
for the British people and by the refusal to sell council housing many people were “denied the right
to the most basic ownership of all – the homes in which they live”63. However, whilst the sale of
council housing did help some people get onto the property ladder, it failed in other ways and
produced stark inequalities.
Whilst the richer council house tenants bought the best housing, it was usually the oldest and
poorest who were left in often degenerating housing64. Because of this, it produced a
“residualisation effect whereby the remaining properties tended to be houses or flats in the least
desirable areas housing the poorest people”65. Whilst the best houses were sold off, the local
council was left to deal with a smaller housing stock which was increasingly poor quality66. Not only
did this create areas of mass crime and unemployment67, it also contributed to the housing market
crash in 1989 which left many home-owners stuck by negative equity68, produced growing wealth
inequalities69 and “produced a mushroom of homelessness due to a chronic shortage of affordable
social housing” and created preconditions for the emergence of “buy-to-let” landlords who charge
“market rents”70.
In 1985, the rate of discount on the Right to Buy scheme increased71, but the operation had now
switched from a retail concept to that of a wholesale one and ranged from individual sales to
transfers of blocks. Now, landlords were able to take over estates and even the whole stock of
local authority housing72. Housing Action Trusts also began to take over properties in the most run
down estates. After fixing these estates, they would then sell it73.
The cuts to the housing sector meant that new houses could not be rebuilt to replenish the social
housing stock of local authorities. As a result, social housing became seen as emergency housing
for the poorest and neediest. As a result, Thatcher did chip away at the public housing sector to a
point where, even today, social housing is seen as an absolute last resort. However, in the process
61 N57
62 Timmins, N., The Five Giants (Fortana, 1996)
63 Thatcher’s speech at the 1980 Conservative Party Conference, Brighton
64 N58
65 N57
66 Dorling, A., All That is Solid (Penguin, 2014)
67 N57
68 N58
69 N66
70 N58
71 N22
72 N57
73 ibid
11. of creating self-sufficiency in this area, the Conservative government left a trail of destruction,
raising levels of homelessness, wealth inequalities, mass crime and unemployment.
Within the 1979 Conservative Manifesto, the party identified another of its main tasks as supporting
“family life, by…raising the standards of their children’s education…”with quality and choice of
education being tackled by the party74. The Manifesto emphasised parental rights and
responsibilities including those relating to the choice and quality of their children’s education75.
Within the manifesto, the Conservative party played on the hostile comments of the Yellow Book76.
The Yellow Book was produced by the Labour government’s Department of Education and the
Inspectorate. This was supposed to be a secret document produced under the Callaghan
administration. Its proper title is School Education in England: Problems and Initiatives, and was
leaked to the press in 1967. The Yellow Book was critical of the education system and distributed
blame on shortcomings without admitting the Department of Education’s own responsibilities77. The
manifesto states that due to the Labour party’s focus on structure rather than quality of education,
the system in place has often failed to provide children with “the means of communication and
understanding” at quite a substantial cost to the taxpayer of over £8 billion per year78. The party
promised to “restore to every child” the chance to gain such skills as far as their abilities would
allow them79.
When the Conservative party came to power in 1979, the Education Act 197980 was passed,
removing the compulsory reorganisation of secondary schools on the comprehensive principle
which was placed on the Local Education Authorities by the previous Labour government. The Act
also allowed proposals to be withdrawn81. As well as this, in 1988, measures reforming the
education system were again introduced82. The Education Reform Act 1988 introduced the
National Curriculum83 and control over what was taught in state schools were becoming more and
more centralised84. For example, s.28 of the Local Government Act 1988 prevented circulation of
materials and teaching of “the acceptability of homosexuality as a pretended family relationship”
within state schools85.
Following the 1987 election victory of Thatcher, education reform was again considered by
74 N31
75 ibid
76 School Education in England: Problems and Initiatives
77 N57
78 N31
79 N57
80 Education Act 1979
81 N57
82 Vlad, C., “Margaret Thatcher, Baroness Thatcher, The Iron Lady of British Politics During the Second Half of the
20th
Century” (2014) Journal of Research in Gender Studies Vol 4, Issue 1, 600
83 Education Reform Act 1988
84 N58
85 Local Government Act 1988
12. Kenneth Baker. The Great Education Bill” or GERBIL contained a number of sweeping changes.
The proposals introduced in this Bill were a national curriculum, reduced power and expenditure of
local education authorities, ability for grant-maintained schools to opt out of local education
authority control, as well as education expenditure being devolved to schools86. Timmins explained
how no other legislation had received so much professional opposition since Bevan’s introduction
of the NHS87.
The Bailey Report argued that education was potentially more important in terms of public
expenditure than health88. This is perhaps because more expenditure in education will improve the
quality of the education of the next generation of workers and taxpayers and as a consequence will
likely improve the living standards of that generation. Consequently, they would be able to pay for
private health care and would be less likely to rely on other government handouts or the welfare
state in general. However, whilst this at first seems like a radical, yet not so problematic argument,
the statement contains huge flaws. Firstly, this view seems to be a strong view which can be seen
throughout Thatcherite policies. This view seems to ignore the “lost generation” of young people
who left school in the early 1980s and went straight onto the dole89. Not only does this view seem
to ignore a whole generation, but it fails to acknowledge that public expenditure in education in
order to improve future living standards would also mean a drastic improvement in the quality of
education. International comparisons of education standards during Thatcher's tenure reveal that
Britain held a poor record in education over sixteen’s90 and inequalities in educational outcomes
increased following policies implemented under Thatcher’s leadership91. As well as this, the Bailey
Report suggested the complete privatisation of education. However, they suggested that failing
this, minimum privatisation would mean the wholesale privatisation of universities92. This would not
aid the improvement of education standards of over 16's.
The Bailey Report’s main suggestion regarding education reform can be found under Annex C of
the original Report. It states that “[p]arents able to afford it would be required to pay the cost of
their children’s education, whether in the State system…or in competing private schools….those
with incomes too low to afford to pay would either have fees rebated or (preferably) would be
subsidised via some form of income support.”93 Whilst, at first glance this may seem reasonable, a
number of issues arise here. Firstly, schools would be able to charge different prices for different
schools. As a result, the better education standards would likely be found in the more expensive
schools. As a result, the richer parents would be able to afford better education compared to poorer
86 N22
87 N62
88 N1
89 N58
90 N34
91 N58
92 N1
93 ibid
13. families. This would exacerbate the class divides and would prevent social mobility. As well as this,
the Report itself points out that there would be a huge re-distribution of income from families to
people without children94. As well as this, the subsidy discussed in the proposal of Annex C would
likely not cover the higher priced schools. This could potentially reverse the progress made in
education and would mean that poorer children would only gain the education that their parents
could afford.
Health was another main public expenditure area which the Bailey Report intended to make
significant changes95. The Bailey Report argued that whilst there was some social gain from a
nationalised health service, it is mainly a matter of “individual wants and choices”96. Perhaps the
Report understood that a nationalised health service for all provides a generally healthier
population? However, this seems not to be a good enough reason to continue with the National
Health Service (NHS).
In 1983, Thatcher stated that the NHS was safe with the Conservative and only the
Conservatives97. However, this is a brave statement to make considering that only a year prior to
this, she had taken serious consideration of a Report which suggested a quasi-privatisation of the
NHS over a period of time, with medical facilities being privately owned and run98. With only some
reimbursement or rebate provision for those who could not afford and provisions allowing
institutional care for long stay patients such as the elderly and mentally handicapped to stay in
government run facilities99. Furthermore, Thatcher did not seem to care much for the NHS. Rather
than preserving and supporting the NHS, a nationalised institution which has, since its introduction,
been one of Britain’s most popular socialist creations100, Thatcher introduced a quasi-market into
health care. This imitative centred around competition and choice101. Thatcher introduced
contracting out and outsourcing of non-clerical services such as laundry, catering and cleaning
services. Following this, other non-clerical services were added102. Whilst this was not the
privatisation described in the Bailey Report, the initiatives put forward by Thatcher's closely run
government, meant that the predecessors of government such as Blair and the current
Conservative administration led by Cameron, were able to implement further policies and
legislation which could eventually lead to the wholesale privatisation of the NHS.
Thatcher's government also introduced private-sector management principles for the NHS. This
94 ibid
95 ibid
96 ibid
97 Margaret Thatcher, Speech to Conservative Party Conference, Blackpool, 1983 [Accessed 15/04/2016]
http://www.margaretthatcher.org/document/105454
98 N1
99 ibid
100 N58
101Hunter, D., The Health Debate (Policy Press, 2008)
102 N58
14. was following the Griffiths report by former chair of Sainsbury's, Roy Griffiths. Griffiths had been
asked to conduct a review of NHS management103. The results of this review led to “the most
important single change to the NHS since 1948”104 . Griffiths himself led the introduction of general
management to the NHS after his 24-page letter to ministers in 1981105. He argued that the NHS
needed “clearer management” and “more attention to the needs of patients or 'customers'”106.
Optical and dentist services were later pushed into the market, with those once entitled to receive
free glasses on the NHS being given vouchers to spend on the market. As well as this, people
found it difficult to find an NHS dentist and were encouraged to take dental insurance plans. Again,
with the Conservatives encouraging private health insurance, many felt as though they had been
pushed into the private sector107. An aim discussed at length in Annex D of the Bailey Report108,
although not as severe, the Report called for a replacement of the NHS by a health insurance
system which would inevitably lead to the dismantling of the NHS and also the welfare state109.
The Report discussed “remaining broadly as it is now” however with certain costs being paid by
patients. These changes, although subtle, paved the way for subsequent NHS privatisation from
the following governments of Blair, Brown and Cameron110.
An argument used for little change in defence policies, and refusal to cut the defence budget
revolved around the failure to keep up with NATO commitments111, and it is likely that the Falklands
War of April-June 1982 also had some influence. However, during the whole of the Thatcher's
tenure, the UK was failing to consider the World Health Organisation's Health for All Strategy112 of
which it was a signatory113. This discussed a strategy to remove health inequalities. Yet, this did not
seem to be a reason to prevent certain NHS cuts and changes being made.
This essay will now briefly consider how much of the original Bailey Report can be seen in the
current political and economic approach to the welfare state.
Firstly, it is important to note that the changes made by Thatcher were built on, and in some
respect, their scope was extended by successive governments114. This is illustrated mostly by the
current Conservative party leader, David Cameron. He has been Prime Minister since the 2010
103 N22
104 N62
105 Harrison, S., et al, Just Managing: Powers and Culture in the National Health Service (Macmillan, 1992)
106 N22
107 ibid
108 N1, Annex D
109 N58
110 Davis, J., and Tallis, R., (eds.) NHS SOS; How the NHS was Betrayed and How We can Save It. (Oneworld, 2013)
111 N1
112 World Health Organization, Targets for Health for All, World Health Organisation Regional Office for Europe,
Copenhagen, 1985
113 N58
114 N82
15. Coalition and has often been compared to Thatcher and her policies and ideology is clearly
reflected in his political and economic approach to the welfare state. McEnhill argues that both
administrations see danger “in an expanded state and share the same ideological foundation”115.
As a result, it is clear that her policies and ideology is reflected in the current approach to the
welfare state.
Cameron, at the Conservative Party Conference in 2012 stated that “welfare isn't working, and this
is a tragedy”116. He then goes on to compare himself to Beveridge and his five evil giants.
Cameron argues that the Conservative welfare reforms are “just as profound” as those produced in
the Beveridge Report and brings forward his own “giant evils”: unfairness, injustice and
bureaucracy. However, his arguments to fight these giants seem less like a promise to help the
neediest in society, but more of a warning and potentially placing blame on the neediest as being
lazy. He argued that housing benefit caps would ensure more fairness, and an end at housing
benefits for those under twenty-one would prevent injustice. However, these reforms seem to take
away more independence for those under twenty-one and will create a struggle for those who rely
on housing benefit.
Although this essay has not discussed tax rates, it may be important to note that under the
Thatcher administration, a 40% marginal rate on tax was seen as a tax rate for the richer
individuals in society. However, in 2013, under David Cameron, if you had a taxable income of
£32,000, you would face a marginal rate of 42%117. To many, £32,000 would not seem like a lot of
money, and as a result, this marginal rate seems excessive.
Following the global financial crisis, in 2007, worries about public spending arose. In Cameron's
2010 Coalition government, welfare spending was cut by and justified by a moral critique of the
welfare state and its recipients118. Cameron reflected Thatcher's welfare ideology by encouraging
“individual responsibility”, as Thatcher did throughout her time as head of the Conservative party.
This is reflected by policies such as the housing benefit cap, as discussed above, as well as a
huge overhaul of the health system in order to provide “greater choice”. However, these plans were
slow moving due to “deep rooted suspicions that the progressive Conservatives were intent on
privatising rather than modernising the NHS”119.
115McEnhill, L., “David Cameron and Welfare: A Change in Rhetoric Should not be Mistaken for Change of Ideology”
http://eprints.lse.ac.uk/48615/1/blogs.lse.ac.uk-
David_Cameron_and_welfare_a_change_of_rhetoric_should_not_be_mistaken_for_a_change_of_ideology.pdf, Last
accessed 4th April 2016
116BBC News, “Conservative Party Conference: David Cameron: “Welfare Isn’t Working”” (2012)
http://www.bbc.co.uk/news/uk-politics-19896546 , Last accessed 4th
April 2016
117Sunday Politics, “Grant Sharpp on Welfare, Cameron and Thatcher” (2013) http://www.bbc.co.uk/news/uk-politics-
22153044, Last accessed 4th April 2016
118 N117
119Page, R., “The Coming of Age of Progressive Neo-Liberal Conservative “Welfareism” under the Coalition
Government of 2010-2015, http://www.social-policy.org.uk/wordpress/wp-content/uploads/2015/04/14_page.pdf, Last
16. Clearly, the changes introduced by Cameron reflect the ideology of Thatcher's government and her
policies have encouraged Cameron to create welfare cuts which would seem to affect the poor
working families who rely on the aid of the welfare state to survive. As well as this, it is clear that
the welfare state and government is not sufficiently providing the most necessary help for its
citizens. Food bank usage has increased dramatically since 2008/9. In 2008/9, 25,889 people were
given a three-day emergency food supply from Trussell Trust Foodbanks. This has increased over
the years and between 1015/16, 1,109,309 people were given the same help120. This is an
unacceptable situation considering that the Cameron government insist that they are helping
people provide for themselves, however the issue of food banks has not been properly addressed.
In education, there has been recent proposals to turn all schools into academies within the next
five years121. An academy receives funding directly from central government rather than local
authorities and is an independent school overseen by academy trusts122. However, this proposal
has been met by wide resistance and “tory rebellion”123. Teachers unions have criticised
academies, claiming that they are used as a method of privatising education and the Ofsted Chief,
Sir Michael Wilshaw, criticised seven academy chains for failing to improve results of many of their
schools whilst at the same time, paying board members large salaries124. The original legislation
proposed by Osbourne’s 2016 budget was to force all schools to become academies. This has
since been revised and now the legislation will only force schools to be academies if the local
authority has a consistent history of poor results across their schools and where there are so few
schools under local authority control that the council cannot support the remaining schools125. If the
teachers unions are correct, the potential legislation heavily reflects the ideology of the Bailey
Report under the Thatcher administration, and again, the proposal was met with huge resistance.
This emphasises that reform to dismantle the welfare state would need to move at an extremely
slow pace in order to be accepted. The resistance of the Cameron administration also reflects the
resistance in the Thatcher administration. It highlights that there is still some respect for the welfare
state within the Conservative party and the resistance from the Teachers unions and criticism from
the Ofsted chief also suggests that there is strong support for the welfare state from professionals.
In conclusion, this essay considered how the Thatcher administration of 1979-1990 intended to
dismantle the welfare state and how it only managed the chip away at the provisions. It also
accessed 15th April 2016
120Trussell Trust Foodbanks, “Latest Statistics” (2016) https://www.trusselltrust.org/news-and-blog/latest-stats/ Last
accessed 3rd
May 2016
121 Stone, J., “David Cameron Says he will Turn Every School into an Academy” The Independent, 7th
October 2015
122 BBC News, “What does it mean to be an Academy School?” (2016) http://www.bbc.co.uk/news/education-
13274090, Last accessed 8th May 2016
123Swinford, S., “David Cameron Announces U-Turn on Academies Following Tory Rebellion”, The Telegraph, 7th
May 2016
124 N122
125 N123
17. considered how when chipping away at the provisions, the Thatcher administration began the
undermining of the welfare state and how it reflects in the current Conservative government's
approach to the welfare state. Whilst it may seem that Thatcher did not reach her aim of
dismantling the welfare state, and only managed to chip away at small pieces of the state with
seemingly limited changes and even increased expenditure within the NHS, it is important to note
that increased expenditure does not mean an increased support for the programme. The changes
made by the Thatcher administrations are extremely relevant to the slow demise of the welfare
state. As the welfare state is entrenched into British nature, any attempt at destroying or
dismantling the welfare state needs to be executed at an extremely slow pace in order for it to have
any success. The policies and legislation introduced by the Thatcher administrations paved the
way for further changes to be made by other administrations such as Blair and Cameron. For
example, there has been more extensive reform within the NHS and the benefits system, and
administrations have taken more individualistic approaches. Blair provided a “rights and
responsibilities” approach126 and Cameron has a seemingly parallel approach to that implemented
by Thatcher127. As a result, Thatcher's changes are still contributing to the reforms of the welfare
state providing a more “self-help” ideology.
Now more than ever, the welfare state is failing the citizens of Britain. At this time, the welfare state
is failing to provide adequate care for its users. For example, during the past few years, the welfare
state has been plagued with failures such as worsening waiting times for accident and emergency
departments128, and a food bank crisis which Church leaders blame the current prime minister,
David Cameron for129. Clearly the system has been void of any love for too long and the five giant
evils identified by Beveridge are beginning to rear their ugly heads again. Poverty is not being
exacerbated by the current welfare system with many not being able to afford the most basic
necessities.
Stacey Parkinson
126Schifferes, S., “The Future of Welfare Reform” (2005) http://news.bbc.co.uk/1/hi/business/4720727.stm, Last
accessed 19th April 2016
127 N117
128Triggle, N., “A&E Waiting Times ‘Getting Worse’” (2015) http://www.bbc.co.uk/news/health-34939034, Last
accessed 19th April 2016
129Watt, N., “Bishops Blame David Cameron for Food Bank Crisis” The Guardian, 20th February 2014
18. Bibliography
Books
Andrews, K., and Jacobs, J., Punishing the Poor: Poverty under Thatcher (Macmillan, 1990)
Bell, D., The Conservative Government 1979-1984: An Interim Report (Croom Helm, 1985)
Berlinski, C., There is No Alternative (Basic Books, 2008)
Booth, C., Life and Labour of the People of London (Macmillan, 1901)
Clarke, P., Hope and Glory: Britain 1900-1990 (Penguin, 1996)
Davis, J., and Tallis, R., NHS SOS: How the NHS was Betrayed and How We Can Save It
(Oneworld, 2013)
Dorling, A., All that is Solid (Penguin, 2014)
Forrest, R., and Murie, A., Selling the Welfare State: The Privatisation of Public Housing
(Routledge, 1988)
Fraser, D., The Evolution of the British Welfare State (4th
Edn, Palgrave Macmillan, 2009)
Harrison, S., et al., Just Managing: Powers and Culture in the National Health Service (Macmillan,
1992)
Hunter, D., The Health Debate (Policy Press, 2008)
James, S., British Government: A Reader in Policy Making (Routledge, 1997)
Lawson, N., The View from No. 11: Memoirs of a Tory Radical (Bantam Press, 1992)
Lobove, R., Social Welfare in Transition: Selected English Documents: 1834-1909 (University of
Pittsburgh Press, 1996)
Ostler, R., The Rights of the Poor to Liberty and Life (Roake and Varty, 1838)
19. Pierson, C., and Castles, F.G., The Welfare State Reader (2nd
Edn, Polity Press, 2007)
Powell, M., and Hewitt, M., Welfare State and Welfare Changes (Open University Press, 2002)
Rowntree, S., Poverty: A Study of Town Life (2nd
Revised Edn, Policy Press, 2001)
Timmins, N., The Five Giants (Fortana, 1996)
Family Papers
Bonsyl, K., The Intimidation Powers of Arthur Scargill (Family Papers, Unpublished)
Archived Material
Central Policy Review Staff, Longer Term Options Memorandum (1982) Public Record Office, Kew
Beveridge, W., Social Insurance and Allied Services Report (1942) Public Record Office, Kew
Cabinet Discussion Conclusions: 9th
September 1982 (1982) Public Record Office, Kew
Letter from Peter Shaw to Geoffrey Howe: 24th
September 1982 (1982) Public Record Office, Kew
Letter from John Sparrow to Margaret Thatcher: 2nd
September 1982 (1982) Public Record Office,
Kew
Journal Articles
Clegg, S., “Thatcher and the Welfare State” (1989) International Socialism, 2:44
James, S., “The Central Policy Review Staff: 1970-1983” (1986) Political Studies, XXXIV, 423
Sanders, D., et al., “Government Popularity and the Falklands War: A Reassessment (1987)
Journal of Political Science, Vol 17, Issue 3, 281
Scott-Samuel., et al., “The Impact of Thatcherism on Health and Well-Being in Britain” (2014)
International British Journal of Health Services, Vol 44, No 1, 53
Vlad, C., “Margaret Thatcher, Baroness Thatcher, the Iron Lady of British Politics during the
20. Second Half of the 20th
Century” (2014) Journal of Research in Gender Studies Vol 4, Issue 1, 600
Newspapers
“Thatcher’s think-tank takes aim at the welfare state.” The Economist, 18th
September 1982
Kirkup, J., “David Cameron’s Plan to Make Every School and Academy is now in Real Trouble”
The Telegraph, 20th
April 2016
Stone, J., “David Cameron Says he will Turn Every School into an Academy” The Independent, 7th
October 2015
Swinford, S., “David Cameron Announces U-Turn on Academies Following Tory Rebellion”, The
Telegraph, 7th
May 2016
Travis, A., “Margaret Thatcher’s role in plan to dismantle welfare state revealed” The Guardian, 28th
December 2012
Watt, N., “Bishops Blame David Cameron for Food Bank Crisis” The Guardian, 20th
February 2014
