Nicola M Sneddon Interest groups and policy-making: the welfare state, 1942-1964 Submittedto the Faculty of Social Sciences,University of Glasgow, in ftilfilment of the degreeof Doctor of Philosophy - Department of Economic and Social History September1999 Abstract This study explores the views of the peak level industrial and labour organisations towards government social policy after the publication of the Beveridge Report in 1942. The reform of statewelfare in the 1940smeant that employers and trade unions becamemore involved in the administration than in the provision of social services. The process entailed a greater role for the Trades Union Congress, the British Employers' Confederation and the Federation of British Industries in the formulation of state social policy. This is a hitherto neglected aspect of their relations with government. Labour and businesshistorians have paid little attention to trade union and industrial views on social policy after the second world war while historians of the welfare state have neglected the participation of these particular interest groups in the formation of welfare policy. This thesis explores the attitudes of these groups towards the post-1945 welfare state from 1942 until 1964. It does so in the context of two widely-discussed approaches to government policy making that hold the potential to explain the influences behind policy after the war: namely corporatism and consensus. These concepts are herein applied to a range of areasof welfare - social security, pensions,the National Health Service and state education - in which the TUC, BEC and FBI demonstrateda level of interest. While being of some relevancein relation to particular areas of policy and and specific points in time, these approacheshave a limited ftinction in explaining government consultation of primarily industrial interests on social policy matters. Corporate bias may help to explain why consultation took place but offers little understandingin those instanceswhere it did not. A searchfor a wider welfare consensusreaching outside the political party arena is similarly flawed as the theory seeks to generalise and impose uniform patterns of policy-making where none existed. If the consenualists continue to adhere to the notion that the involvement of economic interests in policy making was a product of consensuspolitics, it must now seek to examine the impact of these interests on the policy-making process. In the same vein, corporate theorists might look to other policy areasoutwith the industrial and economic sphere in order to explore the wider application of their findings. Contents page Acknowledgments i Abbreviations ChapterOne: Introduction I ChapterTwo: Social Security 25 ChapterThree: Retirement Pensions 66 ChapterFour: Health Policy 98 ChapterFive: Education 136 Chapter Six: Conclusions 184 Bibliography 197 Acknowledgments Firstly, I would like to thank my supervisors,Neil Rollings and Anne Crowther for their advice and guidanceduring the past four years. I have also been assistedby the archivists of the Modem Records Centre at the University of Warwick, the Public Record Office, the Labour Party archives in Manchester,the British Library of Political and Economic Science,and the Guildhall Library. Of these, I am particularly grateful to Christine Woodland and her colleaguesat the Modem Records Centre since I spent so much time there, and received so much help. My department, Economic and Social History, has also provided me with practical and financial support, and I am further indebted to the Economic and Social ResearchCouncil for the studentship,which financed this PhD. On a personal note, I am extremely gratefid to my parents for moral support and also financial assistance:little could they have known that my university education would be quite so prolonged. Other membersof my family and my friends have also been the sourceof considerablesupport, and have been wonderfully understanding. These include my grandparents,Karen McGuire, Sally Maclean, TheresaMcGrattan, Caroline levers and Paulyne Sheridan.The company of Ian Anderson and Matt Egan has also been much valued. Many thanks to Mark Freemanand Graeme Hendry who have read some of my drafts and offered very useftil comments and corrections. NonethelessI am wholly responsiblefor any errors of fact or interpretation contained herein. Abbreviations" ABCC Association of British Chambersof Commerce BEC British Employers' Confederation CACE(E) Central Advisory Council for Education (England) CEA Council for Educational Advance CHSC Central Health ServicesCouncil FBI Federationof British Industries HMCs Hospital Managment Committees NAB National AssistanceBoard NACEIC National Advisory Council for Education in Industry and Commerce NIAC National InsuranceAdvisory Committee NCEO National Confederation of Employers' Organisations NHI National Health Insurance NIAC National InsuranceAdvisory Committee NUM National Union of Manufacturers RHBs Regional Hospital Boards TUC Trades Union Congress ii ChqpterOne: Introduction This is a study of the social policies of the peak level representative groups of the trade union movement and organised industry in Britain between 1942 and 1964 and their relationship with government in this sphere of policy-making. The Trades Union Congress (TUC), founded in 1868, was the'central organisation for trade unions, while industrial representation was divided fourfold. The Federation of British Industries (FBI), established in 1916, was, according to Stephen Blank, the ' foremost industrial body. Its capacity to represent industry, however, was shared with the National Union of Manufacturers (NUM), the National Confederation of Employers' Organisations(NCEO) which was set up by the employers' federations in 1919, and later changed its name to the British Employers' Confederation (BEC) in 1939, and the Association of British Chambersof Commerce (ABCC) which was, in fact, the first of these organisations,having been formed in 1860. In terms of activity in the social policy arena, the BEC was most important, having responsibility for monitoring provision in social security, pensionsand certain aspectsof education, and the FBI was also interested in education policy. Otherwise, there is no indication that the NUM paid any attention to social policy, while the Chambers of Commerce's involvement was iffegular. Co-operation between government, industry and the trade union movement, together with the impetus offered to social policy, are widely regarded as important featuresof the years 1939-1945.' The connection between the two has received little 1S Blank, Industry andgovernment, p. 6. 2K Middlemas, Power, competition and the state, vol. 1, ch. 1; K Morgan, Thepeople's peace, p. 13; D Dutton, British politics since 1945 (1997), p. 16; GC Peden,British economic and socialpolicy (199 1), p. 119; S Blank, Industiy and government,p. 32 have highlighted improvements in relations. R I detailed attention even though substantial welfare reform looked likely to impinge upon the objectives of occupational and trade union welfare schemes: labour discipline and the retention of workers/members. During the war trade union membership grew substantially as did government recognition of the labour movement.3 Ernest Bevin, the General Secretaryof the Transport and General Workers Union was appointed Minster of Labour when Churchill invited the Labour Party to fonn a Coalition government, and the Trades Union Congresswas consulted on a par with the Federation of British Industries and the British Employers' Confederation after 1941. In 1945, collaboration with, and consultation of, these interest groups was viewed positively, and certain govermnent policies, such as the employment policy outlined in the 1944 White Paper, presumed that co-operation would continue in order to ensuretheir effectiveness.4 A substantial number of monographs have examined the evolution of both state- interest group relations and the postwar welfare state, but there are no detailed studies of the relationship betweenthese two phenomena.' As Noel Whiteside notes, '[s]ocial Titmuss, Problems ofsocial policy, D Fraser, The evolution ofthe British weý(arestate (1984), p. 207; P Addison, The road to 1945 (1998), p. 121 identify the stimulating effects of war on social policy. 3S Beer, Modern British politics, p. 214; L Minkin, The contentious alliance, p. 54; H Pelling, The history ofBritish trade unionism (1985), p. 211; Membership reached8.8m in 1945, and increased further to 9.53m in 1951. Figures from H Clegg, A history ofBritish trade unions since 1889, vol. 111, r. 293. L Minkin, 'Radicalism and reconstruction', p. 179; W Paynter, British trade unions, p. 84; H Pefling, The history ofBritish trade unionism (1985), p. 211; M Sullivan, Thepolitics ofsocialpolicy, p. 8; K0 Morgan, Thepeople's peace, pp. 114; S Beer, British politics in the collectivist age (1965), pp. 189- 200. ' There are several comprehensivestudies of the postwar welfare state including R Lowe, The welfare state in Britain since 1945; H Glennerster,British socialpolicy since 1945; M Sullivan, The developmentofthe British we4(arestate; M Hill, The welfare state in Britain, J Brown, The British wel(are state; P Gregg, The welfare state; N Timmins, Thefive giants. State relations with industry and trade unions are explored in the following: P Barberis &T May, Government, industry andpolitical economy,D Barnes &E Reid, Governmentsand trade unions; S Beer, Modern British politics; S Blank Industry andgovernment,