Britain keeps up appearances Worried but proud: British taxes are soaring and social services are showing strain, but few people want to cut the welfare state deeply.

Sun Journal

November 21, 1995|By Bill Glauber | Bill Glauber,SUN FOREIGN STAFF

LONDON -- They are smoking less and living longer. They own more cars, television sets, microwave ovens and computers than ever before. Unemployment is down. Wages are up.

So why are the British feeling so uncertain about their quality of life? Why does the long list of government services seemed smudged and tattered? The cradle-to-grave welfare state that covers 58.2 million people simply isn't what it used to be.

The typical Briton sees a National Health Service that appears to be in decline, rides trains and subways that are aging and overcrowded, and walks streets that are viewed as increasingly unsafe.

People are worried about their jobs. More than a million unlucky homeowners are saddled with mortgages that exceed the value of their properties.

And workers pay taxes that would make Americans apoplectic.

In many ways, the British are like employees in a company undergoing constant restructuring. All the old certainties have been transformed. Long gone are the days when state-owned coal, steel and power companies employed workers for life. Prime Minister Margaret Thatcher sold those firms during the 1980s in a push to bring the free market to Britain.

George Gaskell, a sociologist at the London School of Economics, ticks off a list of common British concerns, a list that sounds familiar to Americans.

"People who have elderly parents are wondering if they will have to pay money if their parents come in need of care," he says. "People are worried about the downsizing of companies. What was experienced by the working classes -- the threat of unemployment -- spread among groups who thought they were in jobs for life."

The British worker, like his American counterpart, is under increasing pressure to produce on the job. The unemployment rate has declined -- to 8.1 percent, compared to 5.5 percent in the United States.

Part-time work is on the rise and there is no minimum wage. Workers at a fast-food burger chain in Glasgow, Scotland, became symbols of this new, flexible work force. They had to punch out on a time clock during mandatory breaks, bringing down their pay to the equivalent of $1.58 an hour.

Taxes remain ingrained in the British system. The basic income tax rate has declined to 20 percent, from 33 percent in 1978. For those in the highest income bracket, the rate is 40 percent, down from 83 percent.

But the government tax machine doesn't stop there. The British are taxed on property and water, whether they own or rent their residences. Those with cars pay a yearly tax of $213 to maintain roads. Those households with television sets pay an annual license fee to fund the British Broadcasting Corp. -- $133.50 for color, and $44.24 for black and white. Those who skip the fee can be fined, and, in some cases, jailed.

Everyone pays into National Insurance, which funds retirement and unemployment.

There's also the 17.5 percent value added tax placed on goods and services ranging from attorneys fees to furniture to liquor. Home heating and electricity are also hit with an 8 percent VAT. Yet newspapers and books come tax-free.

So what does the British worker get for his taxes?

Seventy-six percent of all households receive some type of government financial benefit -- and the public isn't in such a hurry to change things. A recent poll of Conservative Party voters -- the party of Prime Minister John Major -- found they preferred that the government ditch a proposed income tax cut and spend more on education and health.

In Britain, senior citizens receive pensions, men at age 65 and women at 60. The unemployed receive cash and the poor are given housing aid. Parents even receive weekly stipends for their children: $16 for the eldest child and $13 for each other child.

But the benefits are being trimmed in a push to drive down government spending.

Still, by American standards, the benefits remain luxurious. College students pay no tuition, even if they attend Oxford and Cambridge. Only recently have some been forced to take out loans to supplement the stipends provided by the government. But the colleges themselves have suffered from government budget cuts.

Nowhere is the tension between the marketplace and the welfare state greater than in health care. Britons are truly proud and possessive of their National Health Service, which covers the entire population.

But the system -- employing nearly a million persons -- is under sustained stress. Like most industrialized nations, Britain has an aging population, one requiring ever greater levels of health care. The possible rationing of health care has become a hotly debated topic, with at least one local health-care authority threatening to stop paying for several elective procedures.

For perhaps a decade, the National Health Service has seemed a home for frustration and demoralizing inefficiency -- overworked or seemingly indifferent physicians, run-down facilities, plus long waits for operations. More than 3 million Britons have bought private insurance, enabling them to get faster, and in some cases, better care.

In many ways, though, the health system is extremely effective. The waiting lists for hospital admissions are shrinking. Nearly 90 percent of the country's children are immunized by their second birthday against major diseases.

The population is also eating better, and exercising more, though, Great Britain will never be confused with California when it comes to fitness. The country's favorite leisure-time activity is going to a pub.

In Britain, the welfare state may be fading. But it continues to cost a lot to keep up appearances that all is well.

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