Who Pays for the Welfare State?

Beverley Baxter April 15 1951

Who Pays for the Welfare State?

Beverley Baxter April 15 1951

Who Pays for the Welfare State?


Beverley Baxter

IN MY last letter from London I dealt with some of the causes of the present Socialist decline in Britain and prophesied that unless the international situation made an election impossible this year the Socialists would be heavily defeated by the Conservatives.

You may recall I dealt historically with the element of ill luck which has dogged all three Socialist administrations of 1924, 1929 and 1945. I also pointed out the physical collapse of Sir Stafford Cripps and Mr. Ernest Bevin which has left Mr. Attlee, like a miniature Samson, holding up the pillars of the temple.

Today I propose to carry the story farther and try to show where the psychological miscalculations of the Socialists have assisted in bringing them to the present low level of their fortunes. Not all of these were avoidable.

Basically, Socialism is emotional and evangelical. It expresses the philosophy of the underprivileged, the yearnings of the poor, and the anxieties of the sick. Carlyle wrote that humanity was divided into those who were saddled and those who rode. He argued that periodically there would be attempts on the part of the saddled to do the riding. History has certainly borne him out.

The weakness of this Left-Wing philosophy is that in the battle of life Socialism concentrates too much on the casualties. Wellington did not win the Battle of Waterloo by devoting his energies to looking after the wounded. It is known that when the battle was over he walked among the wounded and the dead and tears streamed down his face. But it was his direction of the men on their feet that had won the victory.

Socialism goes farther than that. In its desire to denounce the wickedness and selfishness of the past it creates self-pity among the people, so much so that truth itself is engulfed in the flood. To hear some

of our Socialists one would think that boots and stockings and doctors, and almost food itself, only arrived with the Socialist dawn. Nor does this philosophy end only with selfpity. It accentuates class distinction and keeps alive a division which would gradually disappear with time. The shareholder, the company director, the manager, the banker—these become the villains of a melodrama. They are all exploiters. In the Socialist heaven conscience and dividends cannot live side by side.

I do not mean this was preached by every Socialist or that it found support by every worker. For example, Northampton is the centre of the boot and shoe industry, which has not had a strike since Queen Victoria’s Jubilee. Where such excellent relations exist between management and workers it is impossible to spread the gospel of tyranny, greed and exploitation. The steel industry, too, had the most admirable industrial relations record. But that did not prevent the State taking it over. The steel workers did not demand nationalization.

What is the Socialist policy of nationalization? In simple terms it is the taking over of the means of essential supply, production and distribution. The emotional approach is that coal, transport, steel, gas, electricity, the docks, food, telephones and cable companies shall be owned by the State and administered for the people. No longer should shareholders claw for profits with their greedy fingers.

An attractive theory, especially in a country which has not tried it. But what the theorists forgot is that the workers remain workers and the consumers remain consumers, a blunt fact which is further emphasized by the obvious realization that the worker himself is a consumer. So we come to our old friend the vicious circle. The miner wants better wages and

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conditions and his claim is strong. But there is only one way to raise wages and that is by increasing the price of coal. So the nationalized coal industry informs the nationalized railways that their coal will cost them more. The railways bow to the inevitable and raise their freight and passenger rates. The nationalized gas industry has to pay a higher price for its coal and for the delivery of the coal, and increases the cost of gas to its clients.

In the end the housewife suddenly finds that coal, gas and railway travel have all gone up at once. She looks at the pound note in her hand and sees it dwindling before her eyes. And the poor badgered British housewife is becoming very, very vocal.

But has she not the benefits of the welfare state? Medicine and doctors and hospitals are free, except for a modest weekly contribution which is a hardship to no one. Surely when the fear of doctors’ bills has been taken away from her and her husband she should realize how greatly the State has eased her mind.

No Favorites, No Hemes

Unhappily someone has to pay for the welfare state just as for the coal. She and her husband buy a package of cigarettes which sold for a shilling before the war. “I am sorry, madam,” says the Chancellor, “but I must charge you three shillings and fourpence now. You see, as Chancellor I am spending five times as much as before the war and someone has to pay. You do see, don’t you? And you, my dear fellow, will I hope drop in at the pub and have a pint, or better still two pints. As Chancellor I don’t know what I would do without the tax I collect on beer. And by all means go to the cinema. I know the film industry is nearly bust but the entertainment tax I take from it is really a jolly sum. And you, sir, and you madam, have to pay the tax. And what about some new clothes or a gramophone or better still a television set? I’ve put a heavy purchase tax on all of them. In fact, my friends, you simply cannot keep my hands out of your pockets. But then someone has to pay for the welfare state, don’t you think?”

I have used the simile before but it is worth repeating. A Socialist chancellor of the exchequer is like a farmer who takes his basket and throws the grain to the chickens, and then rushes among the chickens to see how much of the grain he can get back. If he gets it all back he isa 100% success.

Yet there are deeper causes of discontent even than these—houses and Food. As Minister of Health, Mr. Aneurin Bevan was so determined there would be no favoritism in the building of houses that his total was tragically inadequate.

Let me explain by referring to my own constituency in North London. My local council is empowered to grant one private building license (and then only for a very limited cost) when four council houses have been built. Now in this constituency the ex-soldier, the young businessman, and young married couples do not want council houses. They wish for a modest house with a bit of garden which is not just one of a long row. But because the five unwanted council houses have not been erected no one else can build.

This is one of the less important exasperations of Socialist control but the final result is that across the



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country many young married couples either have to live with their parents or live apart. The break-up of normal family life has been, and is, tragic. Not long ago Bevan was removed and we are hoping for better things.

And now I come to food which is the blackest shadow of all upon the horizon. Great Britain is a foodimporting country and always will be. Therefore, as any theorist could tell you, Britain is in a strong position in relation to food-exporting countries. Therefore, said the Socialists, let the State take over food imports from the wicked hands of private enterprise and secure the lowest price by the method of bulk purchase.

Now that would be an admirable theory if we could only be sure that the world would always have an overproduction of foodstuffs. Then the mighty British State Purchasing Commission could dictate its price. But even then there is a catch in it. The food-exporting nation is a goods-importing nation and if it does not get an adequate price for its food it cannot and will not pay a high price for manufactured imports.

The Women Got Angry

This situation reached its climax when Mr. Maurice Webb, our Minister of PYod, refused to pay the Argentine the meat price which the Perón Administration demanded. Rubber and tin had soared in price and Britain was the gainer thereby. But Mr. Webb was not interested; he was buying meat, forgetting that the Argentine had to buy rubber and tin.

Webb is a fine young fellow but inexperienced. He would not pay the Argentine price and announced that the weekly ration of carcass meat to the British housewife would be reduced to the value of eightpence. He thought and hoped that the nation would support this patriotic defiance of the wicked foreigner.' Instead of that the women of Britain got very, very angry.

The Socialists, looking crushed and miserable, ask what more could private enterprise have done? We answer that under private enterprise there would be firms of long standing which had established cordial relations with the Argentine over a period of years and there would have been a deep desire on both sides to keep those relations cordial. When the State steps in and






becomes the sole buyer, the producers must come under State control. It may well be that the Argentine was trying to profiteer, but it is a fact that, with inflation spreading everywhere, the world price of meat rose, within a month after the breakdown of the negotiations, considerably beyond the Argentine price.

Is it any wonder the public’s enthusiasm for nationalization has waned?

Finally there is a more subtle but even more dangerous process of disillusionment. When Mr. Attlee formed his first administration in 1945 he appointed as Ministers a number of sturdy trade unionists—and there is nothing better in this country than the good-humoured decent trade unionist. But somehow they could not accustom themselves to the niceties and perplexities of political office. Perhaps they had come to parliament too late in life. Perhaps their experience had been too grooved. At any rate most of them were quietly removed, one by one, and replaced by intellectuals.

The Socialist front bench bristles today with youngish men who went to exclusive boarding schools and then to Oxford. In fact Oxford has replaced the London School of Economics as the nursery of Socialist politicians. One of these young men, Kenneth Younger, is the grandson of a rich brewer who was chairman of the Tory Party. Every day these intellectuals rise to answer questions for their departments while the ex-miners and ex-trade union secretaries look on from behind and wonder what has happened to their dream.

“Equality Cannot Exist”

Intellectuals have always played a part in revolutions. They did in France, they did in Russia and they did in the bloodless Socialist revolution of Britain. But no one loves them, not even the poor whose name they so often invoke. The intellectual lacks simplicity of motive, and such a man cannot command the affections of the people or even his own associates.

The honest, simple, straightforward worker had “a dream born in a herdsman’s shed,” and he believed in “the simple scripture of the poor.” But he has found that life is complex and that a nation must have leaders. He has learned that the mob cannot lead the mob, and that the man at the factory bench must look to the management for guidance just as soldiers in battle must look to their commander.

Therefore, I predict that unless the international situation takes an unexpectedly favorable turn the Socialists will lose the next election. I have some ideas of my own as to their ultimate future but we can leave that for another day.

They have foundered on the rock of human nature. Equality does not and cannot exist among men any more than among horses. Nor can good intentions take the place of good management. The Socialist dream is declining. ★