A suite of newly-published papers at the National Archives underscore the extent of the first Thatcher government’s interest in shaking up the welfare state.
Included in a tranche of papers released from Geoffrey Howe’s tenure as chancellor of the exchequer is a briefing note from a 1981 pre-budget meeting at the government’s Chevening country retreat in Kent.
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Among the long-term issues up for discussion were the privatisation of health services, then under consideration as part of the “Omega Project”.
The notes from the December 1981 meeting are sceptical about a free-market model for providing healthcare but add: “This is not to say there are no sensible alternatives to the NHS, nor that market disciplines, and consumer choice, cannot be increased”.
On welfare, the notes suggest an interest in moving to a more European-influenced model of employer and employee co-funded support, but recognises issues surrounding its acceptability with the electorate.
“This may be one of the strategic issues which an outside study might consider: would this be a politically acceptable way of funding? Or would it, like [National Insurance contributions], be seen just as another tax,” the document says.
“The social insurance option for health is one that the [Department for Health and Social Services] are now looking into.]
The notes conclude: “For now, we have decided not even to mention the idea of a ‘third sector’ for fear that DHSS would make too much of it. But worth a thought perhaps for the future.”