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

50).

. Governments had already accepted limited duties to help the needy, (eg. in a series of factory acts, notably in the period 1833 • 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 laissez-faire

came to power in 1905, (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 deep rooted 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 population of London

fell below

London

. He discovered that the poverty line.

30 per cent

of the •

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 the poverty line being

unable below

the special case a poverty was a national problem in all cities. He wrote of families below to purchase a

poverty line newspaper

. London was not a 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

conditions and education.

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 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

Therefore, . This meant that there were

national figures phases

in the lives of almost all working class families when income was insufficient to meet the basic cost of living. 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 working class 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

unmatched, it is important to give some serious consideration to this argument.

between 1908 and 1911 on a scale hitherto

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 Campbell Bannerman

(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

can credit them with laying the that we

foundations welfare state.

of the twentieth-century

• • • • • • •

Liberal welfare and social reforms – who led reform?

The reform programme owed much to the more

radical members

notably

Asquith

,

Lloyd George

and

Winston Churchill

of the government, . The pace of reform

quickened

after

Asquith

1908 to 1911

became prime minister in 1908 and it was largely in the three years from 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 school meals

helped were for children in need. It had

not been planned

and was enacted in

response

to an

original private member’s bill

Labour MP. Although the legislation was voluntary, by 1914, 158,000 children annually were being provided with free school meals. Parents of children being

not branded as paupers

by the new government introduced by a 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

needy children

.

was passed in

1906 principle

that the

state

to allow local authorities to provide rather than parents should

feed

• The Free

medical inspections

Act was passed in 1907. Again, this hadn,t been planned and owed more to

civil servants

the Victorian age. It was also voluntary although few local authorities failed to provide medical inspections by 1914.

building on the public health legislation of

|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 a

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 not be expected to make any contributions during their working lives). Under the act,

pension

was to be provided for

non-contributory (

in other words, recipients would

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

(37.5p). There were a number of , 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

moral qualifications

, too; the pensioner had to have been

regularly employed

and

not been in prison

during the previous ten years. This was

qualifications hardly

an

overly generous

measure, hedged with

restrictions

and

Joseph Chamberlain

The Unemployed and the Low Waged

Many new facts were being collected about unemployment and its incidence. In 1908 published his work

William Beveridge

, who was later to play such an important part in the making of the twentieth-century welfare state,

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

second part (Unemployment) of the two-part National Insurance Act (part one related to health). was introduced. This was undertaken under the 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

giving rise to 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

a week, employers 3d (1p) and the state, through taxation, 2d (1p), thus

Lloyd George’s

slogan of ‘ , with workers paying 4d (1.5p)

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

twentieth century welfare state

. I would argue that you are

quite in order

Liberal social reforms as

representing

the in describing these

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 f o • Now that you have finished this topic you should feel confident that you understand the main features of what have been termed ‘

the needs of the people’

able to describe how these needs were publicised by such people as

Seebohm Rowntree

helped to early in the twentieth century. You should be and

push the Liberals

into a o

Charles Booth

e . You will be able to explain how this increasing publicity and other factors, such as pressure from the ballot box and from the infant Labour Party,

comprehensive programme

of

social reform

important reforms such as the introduction of old age pensions, the innovation of labour exchanges, measures to improve the health and fitness of children, and the introduction of insurance against ill health and, in a more limited way, unemployment. You will be aware of the

main detail

x between 1906 and 1911.The topic looked at of these measures, and of their

impact

and

shortcomings

. You will now be familiar with the

concept welfare state

able to

measure

concept.

the , s m the

Liberals

of a against this e a s

Further reading

• Constantine, S,

Lloyd George

, Routledge Lancaster Pamphlets, 1992 • Evans, E J, • Hay, J R,

The Birth of Modern Britain

, 1780?1914 (Chapters 30 and 31), Addison Wesley Longman Advanced History series, 1997

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

Hodder & Stoughton Access to History series, 1995 (Chapter 6),