Country Case Studies and Links

United Kingdom

by Nicole Faher

The United Kingdom's current welfare system began to take shape after World War II and has continued to change for the following thirty years. As many other countries in the 1980's, the U.K. encountered serious economic problems. Most important among the changes during the 1980's was of the rise of Margaret Thatcher and the Conservative Party after 1979. Its impact on British politics would be felt for the next 18 years. Having the same political party in power for so many years makes the U.K. a unique case and thus, rather different from other E.U. nations, especially because the Thatcher government left a considerable imprint on the British welfare system.

Eventually Margaret Thatcher was replaced by John Major. During that time, the issue of welfare reform was high on the agenda. The importance of the welfare state in the U.K. can also be gauged when one considers that the government spends two-thirds of its budget on the welfare state and the services provided by it. Since the same political party ran the U.K. for so many years, it had the capacity to pursue its welfare agenda in whatever direction it chose. Yet, the Conservative government also had to keep in mind how popular the existing welfare arrangements were with the voters.

The Conservative political government, during the1980's and 1990's, made several important adjustments:

As in most other western countries, the aging of the population is one of the biggest challenges for the welfare state in the U.K. The government in the U.K. is faced with a growing elderly population requiring more assistance and services. Yet, the demographic problems are not as pronounced as in some other European countries.

Another very important issue affecting social policy is the level of unemployment. It skyrocketed in the 1980's to 13%, but has come down to about 6% in the mid-1990's. The problem of unemployment also coincided with high rates of inflation. The Conservative party responded to these challenges by promoting job training, especially to younger people. The reason was that high unemployment occurred mostly among untrained manual employees.

Following supply side economic policies, the Conservative government relied on cutting taxes, deregulations and privatization to pull the country out of its lasting economic high. Some of their measures "spilled over" in to the welfare sector. The tax cuts often did not help the people most in need of public assistance and income equality increased in the U.K. While the Conservative government did not go as far in terms of privatization as it intended, the idea of relying on the market and self responsibility was taken further in Britain, than anywhere else in Europe. A revived economy and, more favorable demographics and a less expensive social security system places the U.K. in a better position than many of its European competitors. The Labor government of Tony Blair is likely to continue the general course of the previous government.


Vic George and Peter Taylor-Gooby (1996). European Welfare Policy; Squaring the Welfare Circle St.Martin's: New York.

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