State (public) social services in Britain:

• social security

• healthcare

• personal social services

• council (social) housing

State institutions responsible for social services:

• Department of Work and Pensions (social security)

• Department of Health

• National Insurance

• devolved and local authorities

Private social services:

• personal insurance schemes

• company occupational plans

• charities

Historical outline of social services in Britain:

The Poor Law - system of social security in England and Wales (16^th-20^th century)

For most history social services were a competence of local authorities

1834 - the Poor Law Amendment Act (England and Wales) - creation of workhouses (abolished in 1930)

1845 - the Poor Law Act (Scotland)

1942 the Beveridge Report “on social insurance and allied services”

A comprehensive system of social security and free healthcare “from the cradle to the grave”

The beginning of the British Welfare State (1945-1951)

Until the 1970s:

• apparent commitment to full employment

• steady economic growth

• expansion of welfare services

After the 1970s

• overloading

• growing unemployment

• recession

SOCIAL SECURITY

• UK's government single most expensive program (about 28% of public spending)

• Financing:

• general taxation (income tax)

• National Insurance (contributions)

• Contributory benefits:

• state retirement pensions - retirement age: women over 60; men over 65 (to be equalized to 65 for all from 2010)

• maternity allowances: 39 weeks (6 weeks at 90% of full pay and the next 33 weeks at a flat rate (as of 2007 = £112.75) or 90% of your salary if that is less than the flat rate)

• sick pay/incapacity benefit

• Income-related benefits:

• Income Support (e.g. one-parent families, the elderly, long-term sick and unemployed)

• Housing Benefit (covering costs of rented accommodation)

• Jobseeker's Allowance (JSA) - “the dole”

NATIONAL HEALTH SERVICE (est. 1948)

Healthcare in Britain is a responsibility of devolved governments

Two-tier structure with private service option:

1. devolved level

1. Department of Health - England

2. devolved governments - Scotland, Wales and Northern Ireland

2. local level

1. local health authorities - England and Wales

2. health councils - Scotland and Northern Ireland

The NHS is financed by:

• 95% by National Insurance contributions and income tax

• 5% by patient charges (prescriptions, dental care, eye tests)

Every patient gets an NHS number

Emergency services: 999 (est. 1937!)

• Primary Care Trusts are now at the centre of the NHS and control 80 per cent of the total NHS budget. 

• NHS Walk in Centres give quick and easy access to health advice and treatment for minor illnesses and injuries.

• NHS Direct is a 24-hour confidential nurse-led health service over the phone. It is a trusted first point of contact for patients seeking medical help both inside and outside normal GP surgery hours. 

• NHS Trusts make sure that hospitals provide high quality health care and that they spend their money efficiently.

• Ambulance Trusts are local organisations responsible for responding to 999 calls; transporting patients; and increasingly providing out-of-hours care.

BRITISH ECONOMY

The United Kingdom is:

• a major trading nation and finance center

• the world's fifth largest economy (after the USA, Japan, Germany and China)

• the EU's second largest economy

• the world's second largest exporter of services

• the world's sixth largest exporter of goods

Sectors of economic activity in Britain (2006)

Primary sector (agriculture, fishing, mining): 1% of GDP, 1.4% of workforce

Secondary sector (manufacturing and construction): 25.6% of GDP, 18.2% of workforce

Tertiary sector (services): 73.4% of GDP, 80.4% of workforce

• 1/3 - state-run industries and services

• 10% of British economy controlled by foreign corporations (about 10% of workforce)

Natural resources in Britain

Geological: coal, petroleum, natural gas, limestone, chalk, gypsum, silica, rock salt, china clay, iron ore, tin, silver, gold, lead.

Agricultural: arable land, wheat, barley, sheep

Agriculture

• 77% of the UK land area

• rich soils in southern and eastern England - poor soils in highland Britain

• 304,000 farm units (2/3 owner-occupied)

• 1/3 - arable crops; 2/3 - livestock

• 64% of the UK's food needs

• outbreaks of diseases, e.g.

• foot-and-mouth disease

• BSE (Bovine Spongiform Encephalopathy) or mad cow disease

- constant problems with the Common Agricultural Policy (CAP) of the European Union

Agriculture: economic geography

• dairy farming, beef cattle, sheep flocks - northern and south-western England, Scotland, Northern Ireland, Wales.

• pig production - eastern and northern England, Northern Ireland

• poultry meat and eggs (“factory farming”) - all over the UK

• arable crops and horticulture - southern and eastern England (Kent - the Garden of England), eastern Scotland

Fisheries

• a leading European fishing nation - 20% of EU's catch

• fish catches: cod, haddock, whiting, herring, mackerel, plaice, sole

• fish farming in Scotland: salmon, trout, shellfish

• main fishing ports:

• Plymouth, Falmouth, Lowestoft, Grimsby, Hull, Whitby, Aberdeen, Peterhead, Fraserburgh, Ullapool, Fleetwood, Newlyn

Forestry

• 12% of the UK land area (17% of Scotland)

• 35% of forests managed by the Forestry Commission, of which 60% are in Scotland (the rest is private)

Energy

Major primary energy sources in Britain (2005):

Natural gas: 40%

Oil: 33%

Coal: 17%

Nuclear power: 8%

Renewable: 2%

• Atlantic and North Sea gas and oil fields

• discovered in 1965 and 1969, respectively

• exploited commercially from 1967 and 1975 respectively.

• important contributor to the economy

• 24 nuclear reactors - all on the coast

Industry and manufacturing

Traditional industries have been greatly reduced in the 20^th century:

• textiles

• steel

• coal mining (the oldest industry in Britain)

• ship-building

Industrial decline has affected:

• northern England

• English Midlands

• Scotland

• Northern Ireland

• South Wales

Industry and manufacturing: economic geography

Historically:

• Birmingham, (automotive)

• Glasgow (shipbuilding),

• London (everything),

• Manchester (textiles),

• Newcastle (shipbuilding and steel),

• Nottingham (apparel, medicine),

• Sheffield (steel and steel products).

• Leeds (textiles and engineering)

Today:

Coal mining:

• many mines closed, e.g. South Wales

• active coalfields still in Yorkshire, West Midlands, Scotland

North Sea oil reserves:

• off the east coast of Scotland

• near the Shetland Islands

Natural gas:

• North Sea

Oil industry:

• Aberdeen region

Car industry:

• London, Birmingham, Coventry

Engineering industries:

• Midlands, West Yorkshire, Northeast of England, Central Lowlands

Shipbuilding:

• Clydebank, Tyneside, Belfast, Greenock

Automobile industry:

Car manufacturers present in Britain:

• BMW (MINI, Rolls Royce)

• Premier Automotive Group (Ford, Jaguar, Land Rover)

• General Motors (Vauxhall Motors)

• Honda

• Nissan

• Toyota

• Volkswagen (Bentley)

• Austin Martin

Sports cars: Lotus, Morgan

Trucks and vans: Leyland Trucks, LDV

Buses: Alexander Dennis (double deckers)

Taxis: Manganese Bronze holdings (London black cabs)

railways, road transport, water, gas, electricity, ship-building, coal-mining, iron and steel industry, airlines, health service, the Post Office and telecommunications

After WWII - nationalization of the above by Labour governments

1979-1997 - privatization or deregulation by Conservative governments

After 1997 - Labour government accepting privatization

LECTURE 6 ATTACHMENT 1 Business entities in the British Isles

BRITISH FINANCIAL INSTITUTIONS

London is Europe's largest financial centre, with financial services based around two districts:

• The City (the City of London) (“the square mile”)

• the Docklands (around Canary Wharf)

The City

The Docklands

There are more than 500 banks with offices in the City and the Docklands

Main institutions in the City:

• the London Stock Exchange,

• Lloyds of London,

• the Bank of England.

Main institutions in the Docklands (Canary Wharf):

• the Financial Services Authority

• Barclays Bank,

• Citigroup

• HSBC

• Credit Suisse

• Reuters

• Morgan Stanley

• Bank of America

BANKING SYSTEM

Bank of England (est. 1694)

“The Old Lady of Threadneedle Street” - central bank of the United Kingdom

Bank of England, Threadneedle Street, City of London

History:

- 1694 - founded as a private bank by shareholders

- 1946 - nationalized and made part of the UK government

- 1997 - state-owned but independent of government

Organization:

• Governor of the Bank of England - a civil servant appointed by the PM

• Monetary Policy Committee - meeting every month to decide interest rates

Functions:

• setting interest rates

• the government's banker

• the agent for British commercial and foreign and central banks

• printing money for England and Wales

• management of national debt and gold reserves

• lender of last resort

Independent (commercial) banks

BIG FIVE of the United Kingdom (central clearing banks, high street banks) (80% of British capital):

HSBC Bank (incl. Midland)

Royal Bank of Scotland (incl. National Westminster, Ulster Bank)

Barclays Bank (incl. Woolwich)

Lloyds TSB (incl. Lloyds Bank, Trustee Savings Bank [TSB]

HBOS (incl. Bank of Scotland, Halifax) - taken over by Lloyds TSB in 2008

Big Four of Scotland:

Bank of Scotland (part of HBOS)

Royal Bank of Scotland

Clydesdale Bank

Lloyds TSB Scotland

Big Four of Northern Ireland:

Ulster Bank (owned by Royal Bank of Scotland)

Bank of Ireland

Northern Bank (owned by Danske Bank)

First Trust Bank (part of AIB UK)

*Historical BIG FOUR of England and Wales* before the mergers and takeovers:

Lloyds Bank

NatWest

Barclays

Midland

Other independent banks:

Standard Chartered

Alliance & Leicester

Northern Rock

Co-operative Bank

Bradford & Bingley

Abbey (owned by Banco Santander)

Egg Banking (owned by Citigroup) - the largest Internet bank in the world

Merchant (investment) banks

• long-established, originally merchants trading all over the world

• located mainly in London with no branch networks

• give advice and finance to commercial and industrial businesses

• advise companies on takeovers and mergers

• provide financial assistance for foreign transactions

Building societies

• organizations owned by its members (depositors), i.e. mutual companies

• offer financial services and mortgage lending

• higher rates of interest on deposits than commercial banks

• 60 all over Britain, e.g. Nationwide, Britannia

The London Stock Exchange (LSE)

• founded in 1801

• from 1997 transactions organized from computer screens in corporate offices rather than traditional dealing on the floor (like the NYSE)

• indexes:

• FTSE (Financial Times Stock Exchange) 100 Index

• FTSE 250 Index

• FTSE 350 Index

Lloyd's of London

• British insurance market (not a company)

• began in Edward Lloyd's coffee house in 1688

Lloyd's Building (One Lime Street)- seat of the Lloyd's of London (completed in 1986)

QUESTIONS

1. What are the British state institutions responsible for social services?

2. What are the three contributory benefits in the United Kingdom?

3. How is the NHS financed?

4. Name three natural resources in the United Kingdom.

5. Where are the coal and oil reserves located in Britain?

6. Name four functions of the Bank of England.

7. Name four British commercial banks.

8. Provide some characteristics of London merchant banks.

Dr Tomasz Skirecki

Wiedza o krajach angielskiego obszaru językowego: WIELKA BRYTANIA

LECTURE 6: Socio-economic issues in Britain

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