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February 16, 2005

Mrs Thatcher, the Voluntary Sector and Victorian Values

Posted by Frank Prochaska

In its rhetoric the Thatcher government embraced voluntarism and linked it with enterprise and liberty. Its record as regards the voluntary sector - argues Frank Prochaska, Lecturer in History at Yale University and leading historian of British philanthropy - was, however, much more ambivalent. Under the Thatcher government there was an increasing, and unhelpful, blurring of the boundaries between charitable and statutory bodies. The increasing reliance of charities on government funding was also accelerated during these years.

The strategic planning in welfare provision that characterized the post-war decades ended in doubts, reassessment, and recrimination. After the oil crisis in the mid 1970s, the shortcomings of the state social services and a waning of collectivist ideals propelled a revival of interest in the charitable sector. Innovation and cost effectiveness were thought to be among the principal virtues of charity, and these became increasingly apparent against the background of government economies and the spiralling costs and bureaucratic inefficiencies of the welfare state. By the time Margaret Thatcher came to power in 1979, social engineering was out of fashion. Under her leadership, central government became a reluctant patron of the welfare state, and the emphasis in health and social services shifted to the pursuit of efficiency, private-sector expansion and pluralism. The New Right, with its reversion to the language of the minimal state and the need for voluntary endeavour, echoed sentiments that had been little commended since the heyday of Victorian liberalism. [Geoffrey Finlayson, Citizen, State, and Social Welfare in Britain 1830-1990 (Oxford, 1994), p. 366].

As an admirer of Victorian values, Mrs Thatcher often spoke in glowing terms of voluntarism and its links with enterprise and liberty. In an important speech to the Zurich Economic Society while in opposition in 1977, she told her audience that "the Victorian era the heyday of free enterprise in Britain was also the era of the rise of selflessness and benefaction". And in a telling comment, she remarked that a "free society is morally better . . . because it entails dispersal of power away from the center to a multitude of smaller groups and individuals". Collectivism, on the other hand, concentrated power "in the hands of the state at the centre", which reminded her of Lord Acton's dictum about the corruption of power. [The Collected Speeches of Margaret Thatcher, ed. Robin Harris ((London, 1997), pp. 53-4].

In an address to the Women's Royal Voluntary Service in 1981, she saw "the voluntary movement . . . at the heart of all our social welfare provision" and told her audience that "we politicians and administrators must not forget that the state has a limited role" and that "the willingness of men and women to give service is one of freedom's greatest safeguards. It ensures that caring remains free from political control". [Quoted in Maria Brenton, The Voluntary Sector in British Social Services (London, 1985), pp. 143-4].

Given Mrs Thatcher's tributes to the voluntary sector for promoting freedom and benevolence, one might have expected her administrations to offer rather more inducements to giving. Many in the voluntary sector looked forward to changes in the tax system to encourage charitable contributions. It was not until 1987 that the Conservative government introduced a 'give as you earn' scheme. But with tax relief set at a ceiling of 240 on donations, it was far too modest to make much of a difference. For all the upbeat talk about a return to charitable giving, Mrs Thatcher's support for reducing the tax burden on the sector had strict limits. While pressure to provide relief to the voluntary sector grew year by year, the Treasury worried lest leakage of the tax base threaten government spending. "Widespread tax deductibility for charitable donations would be a voyage into the fiscal unknown" [Simon Jenkins, Accountable to None: The Tory Nationalization of Britain (London, 1995), p. 214]. The grocer's daughter, ever watchful over the purse strings, was not inclined to make the voyage.

Though the payroll scheme was modest, government grants to the voluntary sector increased in the Thatcher years, up from 93 million in 1979/80 to 293 million in 1987/8 [The Independent, 7 November 1989]. At the same time, state funding became more selective, while the cuts imposed on local government reduced the money available for local institutions [Finlayson, Citizen, State, and Social Welfare in Britain 1830-1990, pp. 375-6]. State support for the voluntary sector, which favoured 'pump-priming' over long-term funding, led to greater oversight. Though happy to work with voluntarists when it suited them, the Thatcher governments were not always reliable allies, as shifts in political fortune and fluctuations in the economy dictated changes of policy. The experience of voluntary bodies working with the Manpower Services Commission on training and job-creation schemes was a case in point. Programme changes and sudden cutbacks in their funding in 1984 created confusion and some bitterness, as voluntarists discovered that their aims were not in line with government thinking. Charitable campaigners found government a volatile partner under Mrs Thatcher. As it transpired, her desire for political control outweighed her enthusiasm for the freedom of voluntary associations.

In the 1980s, some critics feared for the independence of those voluntary institutions in receipt of government funding. Digby Anderson of the Social Affairs Unit argued that there was a case for "stopping the hidden expansion of the welfare state through the permanent subsidy of 'voluntary' bodies by the central and local state" [Quoted in Finlayson, p. 376]. Voluntary bodies were caught in the middle, damned if they fed from the government trough and damned if they did not. Nineteenth-century philanthropists, who pioneered the pattern of relations between public and private bodies, would have recognized the problem. But Victorians were more confident that they retained their independence even when they went cap in hand to government. On occasion, they severed relations with the state and made do without its money. The latter-day reliance of charities on government funding, which Mrs Thatcher accelerated, brought into question the independence of many a society. And the more they took, the more they proclaimed their independence.

The boundaries between the voluntary and the statutory had always been blurred, but in an era when the welfare state was under growing pressure, the Thatcher government threatened to obliterate them. The health services were a case in point. Before 1980, the health authorities had the power to accept and to administer trust funds, but they did not have the power to engage in fund-raising - as Minister of Health, Aneurin Bevan had directed that hospitals should be prohibited from making appeals [F. K. Prochaska, Philanthropy and the Hospitals of London: The King's Fund, 1897-1990 (Oxford, 1992), p. 166]. In pursuit of the Thatcher government's policy to encourage further charitable contributions to the NHS, section 5 of the 1980 Health Services Act permitted health authorities to organize their own campaigns. Furthermore, it offered them interest-free Exchequer loans to pay for the costs of appeals. At a stroke, it gave what amounted to charitable status to statutory bodies and turned NHS administrators into fund-raisers with their own appeals offices [Luke FitzHerbert, Charity and the National Health: A Report on the Extent and Potential of Charitable Funds within the NHS (London, 1989), p. 17].

The 1980s Health Services Act stunned the charitable establishment. Those myriad societies that had struggled to find a place alongside the NHS as money-raisers for hospitals and related causes were now in direct competition with "the largest, most heavily financed enterprise in the whole field of social welfare", whose fund-raising drives were to be financed by the Treasury [Quoted in FitzHerbert, p. 6]. By the end of the 1980s, Exchequer expenditure on fund-raising rivaled the money spent on appeals by leading independent charities. The Chairperson of the National Council for Voluntary Organisations, Sara Morrison, wanted to know what was to stop the government from giving the same advantages to education authorities and social services departments. She and the then Director of the NCVO, Nicholas Hinton, declared that the Act represented "the most damaging blow suffered by the voluntary sector for many years" [FitzHerbert, p. 7].

But something more was at stake than statutory bodies competing with traditional charities for funds. Government had created many charitable agents through financial assistance, but it now threatened to distort the meaning of charity itself. "The essence of charity", as one authority puts it, "is . . . independence and autonomy and its fundamental antithesis is statutory action" [F. J. Gladstone, Voluntary Action in a Changing World (London, 1979), p. 3]. It was one thing to turn the state into the single biggest contributor to voluntary causes. It was another to grant charitable status to statutory bodies. During the Heath government, Keith Joseph had further centralized and bureaucratized the NHS through measures that Enoch Powell described as "the formal perfecting of the state monolith" [J. Enoch Powell, Medicine and Politics: 1975 and After (Tunbridge Wells, 1976), pp. 75-6]. Did they now wish to encourage the same trend in the charitable sector by monopolizing it with statutory bodies transformed into quasi-voluntary institutions?

It would appear that the Thatcher government, in an attempt to find additional funds to bail out a debilitated hospital service, did not consider the danger of undermining the meaning of voluntarism as activity free from state control. In the ambiguous welfare-world of the 1980s, it became necessary to use the word 'independent' before the name of a non-governmental agency, for it was no longer obvious that a charitable institution was not a government body. Even the Medical Research Council, set up and funded by government, had charitable status. The idea of the enabling state and the 'mixed economy of care', which coloured Conservative thinking, appealed to many charitable campaigners. But there was more than a note of inconsistency in Mrs Thatcher's Conservative Party, which talked so much about Victorian values in the 1980s.

The Prime Minister failed to recall that the Victorians saw little virtue in the centralization of power for its own sake or in further blurring the boundaries between the state and voluntary sector. To Victorians, the essence of voluntary institutions lay in self-government. Unlike the Victorians, Mrs Thatcher saw little advantage in the Victorian value of government restraint. At a press conference in 1983, she hailed "self reliance, personal responsibility, voluntary help, being prepared to lend a hand to others" not simply as Victorian values, but as "eternal truths" [Quoted in John Campbell, Margaret Thatcher: The Iron Lady (London, 2003), p. 182]. But such appeals, though highly charged, were also highly selective, invoked as often as not for purely symbolic purposes. Their introduction enabled her to cast the welfare state in the guise of 'old corruption' and vilify Labour as ossified, while diverting attention from the greater centralization of power that was taking place during her tenure as Prime Minister [Raphael Samuel, 'Mrs Thatcher's Return to Victorian Values', Victorian Values, ed. T. C. Smout (Oxford, 1992), pp. 22-3..

Mrs Thatcher was just another illustration of the tendency of all post-war Prime Ministers, sometimes consciously sometimes not, to undermine the independence of voluntary institutions. No postwar government, it should be said, has had much regard for charitable independence, in part because voluntary campaigners openly criticize government policy. Tocqueville, it may be recalled, believed that [Alexis de Tocqueville, Democracy in America, (New York, Modern Library edition, 1981), pp. 60, 578]:

among democratic nations it is only by association that the resistance of the people to the government can ever display itself; hence the latter always looks with ill favour on those associations which are not in its own power...

A centralized administration is fit only to enervate the nations in which it exists, by incessantly diminishing their local spirit.

For all her invocations of the political and social virtues of charity, Mrs Thatcher was ill-disposed to criticism from the voluntary sector. Despite her admiration for Frederick Hayek, who warned of the "deadly blight of centralization", she gave little beyond lip service to the proposition that effective social reform might best come from below, from unfettered institutions that derived their energy and legitimacy from openness to the immediate needs of individuals and communities. Simon Jenkins concludes in Accountable to None: The Tory Nationalization of Britain [p. 268]:

Of all the paradoxes of Thatcherism none is greater than this: that more open government should have been used, not to enable the public to participate more fully in democracy, but as a tool of state centralism in its quest for national efficiency.
Under the guise of Victorian liberalism, Mrs Thatcher carried forward the very collectivist agenda that she disavowed.

Dr Frank Prochaska is Lecturer in History, Yale University. Dr Prochaska's other essays on philanthropy for the Social Affairs Unit can be found here.

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