How Churchill Built the Welfare State in Britain

In 1900 Churchill began the career he was evidently fated for. His background—the grandson of a duke and son of a famous Tory politician—got him into the House of Commons as a Conservative. At first he seemed to be distinguished only by his restless ambition, remarkable even in parliamentary ranks. But in 1904, he crossed the floor to the Liberals, supposedly on account of his free-trade convictions. However, Robert Rhodes James, one of Churchill’s admirers, wrote: “It was believed [at the time], probably rightly, that if Arthur Balfour had given him office in 1902, Churchill would not have developed such a burning interest in free trade and joined the Liberals.” Clive Ponting notes that: “as he had already admitted to Rosebery, he was looking for an excuse to defect from a party that seemed reluctant to recognise his talents,” and the Liberals would not accept a protectionist.

Tossed by the tides of faddish opinion, with no principles of his own and hungry for power, Churchill soon became an adherent of the “New Liberalism,” an updated version of his father’s “Tory Democracy.” The “new” liberalism differed from the “old” only in the small matter of substituting incessant state activism for laissez-faire.

Although his conservative idolaters seem blithely unaware of the fact—for them it is always 1940—Churchill was one of the chief architects of the welfare state in Britain. The modern welfare state, successor to the welfare state of 18th-century absolutism, began in the 1880s in Germany, under Bismarck. In England, the legislative turning point came when Asquith succeeded Campbell-Bannerman as Prime Minister in 1908; his reorganized cabinet included David Lloyd George at the Exchequer and Churchill at the Board of Trade.

Of course, “the electoral dimension of social policy was well to the fore in Churchill’s thinking,” writes a sympathetic historian—meaning that Churchill understood it as the way to win votes. He wrote to a friend:

Churchill “had already announced his conversion to a collectivist social policy” before his move to the Board of Trade. His constant theme became “the just precedence” of public over private interests. He took up the fashionable social-engineering clichés of the time, asserting that: “Science, physical and political alike, revolts at the disorganisation which glares at us in so many aspects of modern life,” and that “the nation demands the application of drastic corrective and curative processes.” The state was to acquire canals and railroads, develop certain national industries, provide vastly augmented education, introduce the eight-hour work day, levy progressive taxes, and guarantee a national minimum living standard. It is no wonder that Beatrice Webb noted that Churchill was “definitely casting in his lot with the constructive state action.”

Following a visit to Germany, Lloyd George and Churchill were both converted to the Bismarckian model of social insurance schemes. As Churchill told his constituents: “My heart was filled with admiration of the patient genius which had added these social bulwarks to the many glories of the German race.” He set out, in his words, to “thrust a big slice of Bismarckianism over the whole underside of our industrial system.” In 1908, Churchill announced in a speech in Dundee: “I am on the side of those who think that a greater collective sentiment should be introduced into the State and the municipalities. I should like to see the State undertaking new functions.” Still, individualism must be respected: “No man can be a collectivist alone or an individualist alone. He must be both an individualist and a collectivist. The nature of man is a dual nature. The character of the organisation of human society is dual.” This, by the way, is a good sample of Churchill as political philosopher: it never gets much better.

But while both “collective organisation” and “individual incentive” must be given their due, Churchill was certain which had gained the upper hand:

The statist trend met with Churchill’s complete approval. As he added:

This grandson of a duke and glorifier of his ancestor, the arch-corruptionist Marlborough, was not above pandering to lower-class resentments. Churchill claimed that “the cause of the Liberal Party is the cause of the left-out millions,” while he attacked the Conservatives as “the Party of the rich against the poor, the classes and their dependents against the masses, of the lucky, the wealthy, the happy, and the strong, against the left-out and the shut-out millions of the weak and poor.” Churchill became the perfect hustling political entrepreneur, eager to politicize one area of social life after the other. He berated the Conservatives for lacking even a “single plan of social reform or reconstruction,” while boasting that he and his associates intended to propose “a wide, comprehensive, interdependent scheme of social organisation,” incorporated in “a massive series of legislative proposals and administrative acts.”

At this time, Churchill fell under the influence of Beatrice and Sidney Webb, the leaders of the Fabian Society. At one of her famous strategic dinner parties, Beatrice Webb introduced Churchill to a young protégé, William—later Lord—Beveridge. Churchill brought Beveridge into the Board of Trade as his advisor on social questions, thus starting him on his illustrious career. Besides pushing for a variety of social insurance schemes, Churchill created the system of national labor exchanges: he wrote to Prime Minister Asquith of the need to “spread … a sort of Germanized network of state intervention and regulation” over the British labor market. But Churchill entertained much more ambitious goals for the Board of Trade. He proposed a plan whereby:

Finally, well aware of the electoral potential of organized labor, Churchill became a champion of the labor unions. He was a leading supporter, for instance, of the Trades Disputes Act of 1906. This Act reversed the Taff Vale and other judicial decisions, which had held unions responsible for torts and wrongs committed on their behalf by their agents. The Act outraged the great liberal legal historian and theorist of the rule of law, A.V. Dicey, who charged that it

It is ironic that the immense power of the British labor unions, the bête noire of Margaret Thatcher, was brought into being with the enthusiastic help of her great hero, Winston Churchill.

[This article was adapted from “Rethinking Churchill. ” See the original for full annotation.