The Labour Party was elected in 1964 under Harold Wilson. In this extract the Chancellor, James Callaghan, sets out the government's spending plans from 1965 to 1970. He provides useful background on previous spending and gives a very clear sense of how the government tried to fund welfare measures. The 'income guarantee' referred to in the document was a promise to old age pensioners, made in Labour's 1964 election manifesto. The income guarantee ensured that all retired persons and widows received a certain level of income by right, without having to apply for assistance or other benefits.
Benefits and Assistance
22. The basic programme increases from £2,120 million in 1964-65 to £2,860 million in 1969-70, an increase of £740 million or 35 per cent. The proposed additional programme for 1969-70 is £185 million; of which the main elements are the income guarantee (£100 million), wage-related sickness benefit (£30 million), improvements in widows' benefits and family allowances (£45 million), and a contingency allowance for other improvements (£10 million).
23. The basic programme provides for an uprating of benefits and assistance at the same rate as the increase in average earnings. The increase of benefits in April, 1965 was significantly more than would have been required by this formula, and the Minister pointed out that in the previous thirteen years the increase had been slightly more than the formula.
24. The Committee considered first the problem of 1966-67. The issue is one of selection between three projects:-