Unit 2: Topic 1:
The needs of the people:
Liberal welfare and social
reforms,
1906-11
Introduction
• This topic covers the major welfare and social
reforms introduced by the Liberals in response to
the needs of society at the start of the twentieth
century. It looks at the main categories of people
in need, at how their problems were publicised,
and at why and how the Liberals responded.
• Particular attention is given to the introduction of
old age pensions in 1908, and to the sickness and
unemployment insurance schemes introduced
under the National Insurance Act of 1911.
People in need
• For many people, a consequence of Britain’s industrial growth
during the nineteenth century had been prosperity. However, for a
substantial minority it had been poverty, exploitation, squalor and
disease. Governments had already accepted limited duties to help
the needy, (eg. in a series of factory acts, notably in the period 183350).
• During the late nineteenth century these governments had
increasingly come to accept a responsibility to monitor conditions
of work, to fight ill health, to give people a better and fuller life
through improvements in such utilities and amenities as gas and
electricity, and to give better educational opportunities.
• In 1905, not long before they fell from power, the Conservatives had
set up a Royal Commission to look into the final safety net for the
needy - the Poor Law. Its report would come out in 1909.
People in need
Consequently, by the time the Liberals came to power in 1905,
laissez-faire (non intervention) had already given way to
collectivism (increased Government intervention) on a number of
fronts. However, there was nothing remotely approaching the
twentieth-century welfare state.
Self-help, charity or poor law relief, either in the notorious
workhouse or via outdoor relief (that is, relief in money or in kind,
allowing recipients to live in their own homes), were often all that
were available to the least fortunate in society. As the Liberals took
office, industrial developments, the growth of towns and cities, and
pressures from trades unionists and socialists were providing an
extra urgency to find a solution to these well-publicised and deeprooted problems.
Measuring the extent of Poverty
•
Serious attempts to measure the extent of poverty began in the 1880s. Case
studies of poor families were produced in large numbers, revealing with increasing
frankness to other sections of the population the way of life of the poor along with
details of their standard of living. Two books revealed the extent of poverty. that
generated discussion and debate. These publications were Life and Labour of the
People in London, by Charles Booth (the first volume of which appeared in 1889
and the last in 1903), and Poverty, A Study of Town Life, by Seebohm Rowntree,
which appeared in 1901. Rowntree defined living below the poverty line as lacking
the means of buying the minimum of food, clothing and shelter needful of the
maintenance of merely physical health.
BOOTH
• Booth’s book made an examination of London. He discovered that 30 per cent of the
population of London fell below the poverty line.
ROWNTREE
• Rowntree, showed that Booth’s conclusions applied equally to provincial York, he
suggested that more than 40 per cent of all the urban wage-earners in York, with
their wives and children, were living below the poverty line. London was not a
special case a poverty was a national problem in all cities. He wrote of families below
the poverty line being unable to purchase a newspaper or postage stamps to send
letters. They couldn’t save money or join a trade union because they couldn’t afford
the subscriptions.
Investigating Further
•
Investigators in other parts of the country, such as Reading, Northampton and
Warrington, corroborated the findings of Booth and Rowntree. More research than
ever before was being carried out on the pattern of economic equality in relation to
such social indicators as birth rates and death rates, infant mortality, housing
conditions and education.
•
Even as late as 1909, after the first legislation of the Liberal government had been
enacted to tackle some of these problems of poverty, Charles Masterman, a Liberal
MP and journalist, could still write that ‘poverty is the foundation of the present
industrial order’ (The Condition of England, 1909). The message from these
investigations was that one-third of Britain’s population was living on the edge of
starvation.
•
More evidence was collected and published about what Rowntree had called the
poverty cycle. This meant that there were phases in the lives of almost all workingclass families when income was insufficient to meet the basic cost of living.
Therefore, national figures relating to primary poverty at any given moment would
include only a fraction of those in primary poverty at some stage of their lives.
Childhood, early middle age, when the number of family dependants was at its height,
and old age were stages of privation for large numbers of people.
Pressures from the Labour Party
•
•
•
•
Publicity from social investigators such as Booth and Rowntree was
reinforced by political pressure from an increasing number of workingclass Members of Parliament (MPs). Pressures from new working-class and
socialist political groups and parties’
In 1900, the establishment of the Labour Representation Committee
(LRC), effectively the birth of the Labour Party, brought together trades
unionists and the new working-class parties to fight Parliamentary elections
in future with commonly agreed candidates. The 29 LRC candidates elected
in 1906 formed themselves into the Parliamentary Labour Party (PLP).
There is an argument that the Liberal social reforms were introduced to
entice voters away from the infant Labour Party. In 1906, David Lloyd
George had spoken of Labour as ‘a force that will sweep away Liberalism’
unless the Liberals moved more decisively to social reforms. By-election
results went badly for the Liberals in 1907&1908, leading Lloyd George to
argue that: ‘It is time we did something that appealed straight to the people to stop the electoral rot.’
As his was arguably the key role in pushing his party into constructive
social welfare reforms between 1908 and 1911 on a scale hitherto
unmatched, it is important to give some serious consideration to this
argument.
Pressures from the Labour Party
cont..
•
• While wooing voters from Labour is a consideration you must keep
in mind when looking for reasons to explain the Liberal social reform
programme, it would be quite wrong to dismiss it as originating
solely in political expediency to keep Labour at bay rather than
being based on the principle or conviction that reform was
necessary.
• It is worth pointing out that social reform played little part in the
campaigns of most Liberal candidates in the general election of
January 1906 suggesting that, at that time, the challenge of Labour
was not considered particularly significant. The main election issue
had been the argument about whether the country should abandon
its long-standing commitment to free trade or, as the Conservative
Party was advocating in its proposals for tariff reform, move towards
the introduction of protectionist measures, with special concessions
for food producers in the British Empire.
Liberal welfare and social reforms –
how radical was reform?
• The ministries of Henry CampbellBannerman (from 1905 to 1908) and
Herbert Asquith (from 1908) led Britain into
one of the great eras of reform in modern
times. Arguably, the steps both men took
to combat or alleviate poverty and social
need in that time were so radical that we
can credit them with laying the
foundations of the twentieth-century
welfare state.
Liberal welfare and social reforms –
who led reform?
•
The reform programme owed much to the more radical members of the government,
notably Asquith, Lloyd George and Winston Churchill. The pace of reform quickened
after Asquith became prime minister in 1908 and it was largely in the three years from
1908 to 1911 that the foundations of a welfare state were laid.
•
Direct taxation was increased to pay for the various measures introduced. Most
famously, in 1909 Lloyd George, the Chancellor of the Exchequer, announced to
Parliament that he had framed a ?War Budget? to raise money ‘to wage implacable
warfare against poverty and squalidness’.
Reforms can be categorised under the headings of provision of care and protection
for:
•
•
•
•
•
children
the old
the unemployed and low waged
workers suffering through ill health and injury at work.
Lloyd George, Chancellor in 1909
Reforms for Children
•
The Free School Meals Act was passed in 1906 to allow local authorities to provide
school meals for children in need. It had not been planned by the new government
and was enacted in response to an original private member’s bill introduced by a
Labour MP. Although the legislation was voluntary, by 1914, 158,000 children
annually were being provided with free school meals. Parents of children being
helped were not branded as paupers and, for example, fathers did not lose their
rights to vote (assuming they had a vote), which is what would have happened if they
been obtaining poor law relief. There was keen social debate about the Education
Act, particularly about the principle that the state rather than parents should feed
needy children.
The Free medical inspections Act was passed in 1907. Again, this hadn,t been
planned and owed more to civil servants building on the public health legislation of
the Victorian age. It was also voluntary although few local authorities failed to provide
medical inspections by 1914.
•
|The Children’s Act of 1908 was aimed to give young people better legal protection
for example, by establishing separate juvenile courts.
The Old
•
Joseph Chamberlain, among others, had been pressing for some form of old age
pension for a number of years. In his book entitled The Aged Poor: A Proposal
(1907), Charles Booth set out some of the basic facts about poverty among old
people who, after years of hard work, had no possibility of financial relief. The Old
Age Pensions Act of 1908 was, therefore, the climax of sustained agitation. There
was considerable debate about the proposals for old age pensions from the time
they were announced in the government’s budget of 1908. Some 1.2 million was set
aside for the scheme, which was non-contributory ( in other words, recipients would
not be expected to make any contributions during their working lives). Under the act,
a pension was to be provided for everyone over the age of 70 whose income did
not exceed £31.50 a year provided they were not already in receipt of poor law
relief.
The pension was issued on a sliding scale, with a maximum of five shillings (25p)
for an individual payable if that person’s annual income was less than £21. The
maximum amount payable to a married couple was seven shillings and sixpence
(37.5p). There were a number of moral qualifications, too; the pensioner had to
have been regularly employed and not been in prison during the previous ten
years. This was hardly an overly generous measure, hedged with restrictions and
qualifications
Joseph Chamberlain
The Unemployed and the Low
Waged
Many new facts were being collected about unemployment and its
incidence. In 1908 William Beveridge, who was later to play such an
important part in the making of the twentieth-century welfare state,
published his work Unemployment, A Problem of Industry. This
exposed the social plight of the casual labourer and showed how
the trade cycle, governed by shortage and surplus, supply and
demand, affected the security of large numbers of workers in
particular industries. Beveridge argued that unemployment was an
inevitable by-product of trade depressions in a capitalist industrial
system and should therefore be treated more sympathetically.
The state, he argued, had a responsibility to:
• help the unemployed to find work
• support the unemployed while out of work
• set up job creation schemes.
The Unemployed and the Low
Waged cont…
•
Between 1909 and 1911, and against a background of about 800,000 unemployed
(7.2 per cent of the total workforce), the Liberals responded to Beveridge’s arguments
by introducing a number of measures to help the unemployed.
•
In 1909 labour exchanges, the forerunners of Job Centres, were set up to help the
unemployed find work. Beveridge was now a civil servant at the Board of Trade, and
he and his minister, Winston Churchill, were responsible for launching this new
venture. The exchanges had a marked, if limited, success. In the year leading up to
the First World War, some two million people registered and it has been estimated
that, overall, about 25 per cent of those people were offered jobs. In 1911, an
unemployment insurance scheme was introduced. This was undertaken under the
second part (Unemployment) of the two-part National Insurance Act (part one related
to health).
•
The rationale behind this innovation was based, in part, on surveys into the problem
of unemployment in trades particularly susceptible to casual unemployment or
seasonal unemployment - for example, building and shipbuilding.
The Unemployed and the Low
Waged cont…
• Unlike old age pensions, unemployment insurance was a
contributory scheme. Each insured worker paid a
compulsory contribution of 2 1/2 d (1p) a week.
Employers paid the same and the state contributed
another 1.7d (0.5p) to the insurance fund. Benefits paid
out from the fund could reach as much as seven shillings
(35p) a week, payable for a maximum of 15 weeks in a
year, provided claimants could prove they had been in
insured work for at least six months in the previous five
years. The scheme was compulsory only for workers in
the trades identified and, initially, about 2.25 million
workers were covered. However, many of these were
skilled workers, which means they couldn’t really claim to
be in the category of the truly needy. In the last year
before the First World War, some 23 per cent of those
covered made a claim.
Workers suffering through ill
health and injury at work cont..
•
Concerns about the health of the nation had been growing, as you have
seen. About 6-7 million people probably already had some form of
insurance against illness, often through friendly societies and private
insurance schemes. However, this did not include many really poor people
and the decision was taken to introduce a compulsory insurance scheme
against illness for virtually all low-paid workers. Part one of the 1911
National Insurance Act (Health) provided this. As with unemployment
insurance, this was a contributory scheme, with workers paying 4d (1.5p)
a week, employers 3d (1p) and the state, through taxation, 2d (1p), thus
giving rise to Lloyd George’s slogan of ‘9d for 4d’. This was much more
comprehensive than unemployment insurance in its coverage. All workers
between the ages of 16 and 70 who were earning up to £160 a year were
compulsorily included. By 1913, these workers numbered over 13 million.
•
The benefit for a sick worker was 10 shillings (50p) a week for a man and 7s
6d (37.5p) for a woman. In addition, the insured worker was entitled to free
treatment from a doctor and to approved medicines. Women were entitled
to 30 shillings (&1.50) maternity benefit. Lloyd George was the minister with
most responsibility for the scheme, which was modelled on the German
system introduced in the 1880s by the German Chancellor, Otto von
Bismarck.
Workers suffering through ill
health and injury at work cont..
• However, the scheme in Britain had considerable
opposition, which came from a broad cross-section of
people and organisations. Doctors were reluctant to
become effectively state employees. Friendly societies
and insurance companies resented competition that
might put them out of business. Employers saw their
contributions as a burden. Workers themselves,
particularly those on the lowest pay, were unhappy at
having to pay weekly contributions, whatever the insured
benefit. Opposition from doctors and friendly societies
was eventually overcome, with the latter sharing
administration of the scheme with insurance companies
and trades unions.
Workers suffering through ill
health and injury at work cont..
• The National Insurance Act, particularly
the health insurance element, was
arguably the most important social
reform of the period, equivalent to the
Parliament Act (to be looked at in detail in
the next topic) in the Constitutional sphere.
It was a radical reform in its own right
and also pointed the way to future
legislation.
Achievements of the social reforms
• It is possible to summarise the social reforms introduced
by the Liberal ministries in this period as follows.1906
Trades Disputes Act; school medical services set
up.1907 School Medical Service was set up.1908
Childrens Act; eight-hour day for miners; Old Age
Pensions Act. 1909 Labour Exchanges set up; Trade
Boards Act. 1911 National Insurance Act.
Although this is an impressive list, it would be wrong to
assume that potential beneficiaries were universally
satisfied with the Liberal administrations. In fact, they
were attacked from all sides, and the years 1910 to 1914
were disturbed and even violent.
Conclusion: foundations of a
welfare state?
•
Measures to improve the diets and health of children, the introduction of old age
pensions, the establishment of labour exchanges and the establishment of trade
boards to fix wage rates in ‘sweated industries’ were, without doubt, innovative.
Possibly most important, both in its radical innovation and implications for future
developments, was the National Insurance Act, introducing health insurance and
limited unemployment insurance, thus starting a process central to the twentiethcentury welfare state. I would argue that you are quite in order in describing these
Liberal social reforms as representing the origins of a welfare state. Of course,
there were considerable shortcomings when measured against, for example, the
Beveridge NHS blueprint of 1942 . Radical attention to provision of better housing
and education, for example, are two glaring omissions from the pre-war legislation.
•
One final consideration should be made here: the Liberal Party’s reform programme
arguably ran out of steam after 1911. This could be attributed, in part, to the
problems it faced in the immediate pre-war years, which included the Constitutional
Crisis with the House of Lords and the Problem of Home Rule for Ulster.
t
i
o
n
o
f
l
Now that you have finished this topic you should feel confident that
a what have been termed ‘the
you understand the main features of
b
needs of the people’ early in the twentieth
century. You should be
o
able to describe how these needs were
publicised by such people
as Seebohm Rowntree and Charlesu Booth. You will be able to
explain how this increasing publicityr and other factors, such as
pressure from the ballot box and from
e the infant Labour Party,
helped to push the Liberals into a xcomprehensive programme of
social reform between 1906 and 1911.The
topic looked at
c
important reforms such as the introduction of old age pensions, the
h
innovation of labour exchanges, measures
to improve the health and
a
fitness of children, and the introduction of insurance against ill health
n
and, in a more limited way, unemployment.
You will be aware of the
main detail of these measures, andg of their impact and
shortcomings. You will now be familiar
with the concept of a
e
welfare state as defined later in thes twentieth century and should be
able to measure the achievements, of the Liberals against this
concept.
m
e
a
Summery
•
Further reading
• Constantine, S, Lloyd George, Routledge Lancaster Pamphlets,
1992
• Evans, E J, The Birth of Modern Britain, 1780?1914 (Chapters 30
and 31), Addison Wesley Longman Advanced History series, 1997
• Hay, J R, The Origins of the Liberal Welfare Reforms, 1906?14,
Macmillan Studies in Economic and Social History, 1975
• O?Day, A (ed.), The Edwardian Age: Conflict and Stability, 1900?14,
London, Macmillan Problems in Focus, 1979
• Pugh, M, Lloyd George, Longman Profiles in Power, 1988
• Watts, D, Whigs, Liberals and Radicals, 1815?1914 (Chapter 6),
Hodder & Stoughton Access to History series, 1995