Even The Times went graphic. It described:
A young girl, near to tears … [in] the pitifully small room in which she and her husband had to live. There was no water, except for a cold tap in the backyard down three flights of dark rickety stairs. The one lavatory for the 11 people in the building was too filthy to use. Cooking facilities had to be shared. The house was rat-infested and the walls so ridden with bugs and beetles that the girl was afraid to replace the ancient wall-paper which helped to some extent to keep them from crawling into the room.58
Labour went to war. Harold Wilson, recently elected leader of the party, launched into the Tories over Rachman and the rent increases the Act had caused. The government’s response, that Rachman had been at work before the 1957 Rent Act and that housing shortages, not the Act, were the root cause, cut no ice. All ministers could promise was an inquiry, the Milner Holland report which did not emerge until 1965. ‘Rachmanism’ became such an integral part of the language that twenty-five years later, when Nigel Lawson announced that tax breaks in the Business Expansion Scheme could be used to provide new rented housing, Gordon Brown, Labour’s Treasury spokesman, felt only the need to label it ‘state-subsidised Rachmanism’ in order to condemn it.59 It mattered not that Milner Holland finally estimated that only 1 per cent of London tenants were facing abuse and intimidation, or that its surveys showed that well over 80 per cent of tenants and in some cases more than 90 per cent were satisfied with their landlords. As Keith Banting put it, ‘the balance in the housing debate had shifted decisively’.60 Landlords were bad, tenants were exploited. It was one of the messages which helped Labour to its 1964 election victory.
Richard Crossman promptly replaced the Conservative legislation with Labour’s own Rent Act. It restored security of tenure, created ‘fair rents’ with rent tribunals to hold the ring between landlords and tenants, and allowed three-yearly rent rises. After all the Sturm und Drang over the 1957 Act, it was to prove a remarkably bipartisan piece of legislation. Crossman, despite in the 1950s being seen as a firebrand of the left, had in 1960 himself been instrumental in quietly killing off Labour’s policy for the mass municipalisation of rented housing. His Rent Act in the end attempted to strike a real balance between landlord and tenant, rather than deliberately driving the private landlord out of business. As a result housing finally emerged in the mid-1960s as defiantly not a mass social service. Rather it was a firmly mixed economy, with Crossman’s measures including encouragement for home ownership as well as a renewed council housing drive. It remained, however, a mixed economy in which the returns from owning housing for rent remained too small to be attractive. The private rented sector continued remorselessly to shrink.
Meanwhile the Rent Act experience had caused the Ministry of Housing itself to lose faith in the private rented sector. Its civil servants were now headed by the formidable Dame Evelyn Sharp, described by Macmillan as ‘without exception the ablest woman I have ever known’61 and by Crossman as ‘like Beatrice Webb … in the sense of wanting improvement and social justice quite passionately and yet a tremendous patrician and utterly contemptuous and arrogant, regarding local authorities as children which she has to examine and rebuke for their failures.’62 She had wanted no more truck with Labour’s 1959 policy of municipalisation than Crossman. Equally, however, she believed it ‘very doubtful’ whether ‘the growing division of society into council tenants and owner-occupiers can be satisfactory’.63 By the early 1960s her department’s officials were casting around for another private supplier of housing. Their answer after visits to Scandinavia was the non-profit-making housing association. Sir Keith Joseph, ever willing to experiment, invested £25 million in a pilot project in 1961 and in July 1963 a dozen two-bedroom flats in Birmingham became the first housing association homes to take in tenants.64 Publicly funded, but independently provided, housing associations became the very first of a new type of body, neither traditionally state-owned nor strictly in the private sector, but used by the state as its agent: a very early version of a model that by the early 1990s and much adapted would include grant-maintained schools and NHS Trusts. In the dying weeks of the Conservative Government, Sir Keith, battered and bruised by Rachman, announced the first £100 million loan to the newly formed Housing Corporation to expand the idea.
Social Security
Already it is possible to see two nations in old age; greater inequalities in living standards after work than in work.
Richard Titmuss, on the impact of occupational pensions, 1955, in Essays on the Welfare State, p. 74
Too small and far too timid a step forward … a little mouse of a scheme.
Iain Macleod speaking on the new Tory pension scheme in the Commons, Hansard, 27 January 1959, col 1013
If housing generated the most controversy between 1951 and 1964, social security, other than pensions, probably provided the least. Particularly in the earlier years, there was a real sense that the problem of ‘want’ had been cracked. True, the failure to pitch insurance benefits high enough meant that many more people than anticipated ended up supplementing them with national assistance. From 842,000 clients in July 1948, the National Assistance Board found itself with a million on its books by 1949 and 1,800,000 by 1954, a figure which then fluctuated by 200,000 either way until the mid-1960s.65
But many of the claimants were old: full employment saw to that. The stigma and pain of the loathed household means-test had gone. Home visits by local officers armed with discretion to pay extra for special needs formed the core of the service. There was an intellectual understanding by left-inclined social scientists and the more rigorous Tories such as Powell and Macleod that something had gone really rather wrong with Beveridge’s plan for an insurance-based scheme supported by only the smallest of means-tested safety nets; and there was one real attempt in 1955 by the long-forgotten Oliver Peake to float large numbers off the means-test by a 22 per cent rise in insurance benefits. But the Board by the mid-1950s had sunk into a ‘quiet obscurity’. It was believed by its supporters to be delivering a humane and effective service.66
Benefits in those days of low though increasingly worrying inflation were not uprated annually. Between 1948 and 1964 the insurance benefits were raised six times, while the means-tested ones saw ten increases.67 The two thus marched out of step. As a result confusion over objectives was revealed on both sides of the political fence, although a confusion which paradoxically illustrated the practical consensus over social security whatever the remaining differences in political philosophy. As Deacon and Bradshaw describe in their definitive record of the British means-test: ‘Sometimes insurance was increased by more than assistance – at which point the Government claimed that it was reducing the role of the means-test and the opposition complained that help was not going to those who needed it most. On other occasions, assistance was increased more and then exactly the same debate was held in reverse, with the Government extolling the virtues of selectivity and the opposition complaining about the means test.’68
Where consistency was achieved in the mid-1950s was over the joint realisation that the chicken of paying pensions in full from 1948 was about to come home to roost. A large number of the growing army of pensioners who had made only ten years’ contributions were about to retire. The national insurance fund was heading for a horrible deficit. In addition, Richard Titmuss at the London School of Economics, along with others, was drawing attention to a growing gulf in old age between those with occupational pensions and those who had only Beveridge’s subsistence-level state pension which had increasingly to be topped up with national assistance to cover rent. ‘The outlines of a dangerous social schism are clear,’ Titmuss warned in 1955, ‘and they are enlarging.’69 Labour, as part of its increasing attacks on the government over its failure to fund health and education at the levels needed to match demand, focused on pensions to argue that Conservative policies were failing to achieve sufficient redistribution towards the least well-off, among whom pensioners were the largest group.
Later that year, Gaitskell succeeded Attlee as Labour leader. ‘In his hatchet-burying mood,’ Douglas Jay, the economist and former President of the Board of Trade, who was then a senior Labour figure, recalled, ‘Gaitskell laboured