ABSTRACT
Britain’s survival in the Second World War was bought at such an enormous cost that the new government faced an economic crisis in 1945. Economic and financial worries not only absorbed much of the energy of ministers but threatened their whole programme of reform. It is sometimes said that Labour’s welfare plans, based on a universal insurance scheme, were self-financing, involving merely a redistribution of wealth within British society. But this is not wholly true. Family allowances, for instance, were to be paid as a universal right, regardless of insurance contributions, and similarly old age pensions were to be paid in full immediately, against Beveridge’s advice. Furthermore, a National Health Service was to be financed primarily from taxation and nationalisation proposals would involve the compensation of previous owners. Intractable economic realities might therefore prevent Labour from constructing even the foundations of the New Jerusalem.
