The New Liberal Reforms 1906-1914

1. The New Liberal Reforms 1906-1914 The Old & The Sick

2. Problems Faced By The Old • Living in poverty in the prime of their lives, growing old meant even more dire poverty for many people during the early 1900’s. • Simply becoming too old to work was now not seen as the fault of the individual – New Liberalism believed in help for those who had grown old in poverty.

3. The Old Age Pensions Act - 1908 • Lloyd George believed the best way to aid the elderly was to guarantee an income for those who were too old to work. • Everyone over 70 was given between 1 shilling and 5 shillings (5-20 pence) per week depending on any previous or current income they may have. • Married couples over 70 were given 7 shillings and 6 pence (37 pence). • Once a person was earning more than 12 shillings (60 pence) a week, their entitlement to a pension stopped.

4. Positives of The Act • By 1914, 1 million people had received these pensions. • This extra money removed the fear of the workhouse from many of the elderly. • It removed dependency on family for old people. • It allowed those who claimed it pride and independence.

5. However……. • The amount given to pensioners was still relatively low. Rowntree's study had proved that to stay above the poverty line, a person needed a bare minimum of 7 shillings (35p) a week. The Old-Age Pension Act came nowhere near meeting the basic needs of Britain’s elderly poor. • In addition, it was argued that very few of the elderly poor would genuinely live until their 70th birthday. Average life expectancy was around 50. The ageing effects of harsh working and living conditions took it’s toll, and by their early 50’s, most were to ill and worn to continue hard physical work. • Many of the elderly poor were exempt from the law: people who had been in receipt of the Poor Law in the past year; people who had failed to work regularly; people who had been in prison in the past two years, and people who had not lived in the UK for the past 20 years.

6. It is clear to see that there were many obvious problems with the Old Age Pensions Act of 1908, and it definitely did not solve the problem of poverty. • However it did make life slightly better for those who became too old to work.

7. Problems Faced by The Sick • In 1911 there was no free NHS. • People living in poverty who fell ill simply lost their jobs, and consequently fell into a downward spiral of having no money whatsoever. • There was no way they could regain their jobs; to do this they would have to get better, and to do that they needed to pay for medical attention. But because they were ill, they had no job, and therefore no money to do so.

8. The National Insurance Act - 1911 • Lloyd George ‘took a slice of Bismarckianism’ after visiting Germany and seeing for himself the benefits of the German insurance system. He argued the need to assist workers who had fallen on hard times through no fault of their own. • The National Insurance Act was a system of insurance against illness and unemployment, and consisted of two parts: 1. A scheme of unemployment insurance and a Labour Exchange Scheme. 2. A health insurance scheme.

9. Part 1 Part One of the Act provided insurance against sickness. It applied those aged from 16-70 in manual and ‘white-collar’ workers earning up to £160 per year. It worked through contributions: • The worker paid 4d a week from his salary, • The employer contributed 3d, • And the government gave 2d. In return, workers received 10 shillings (50p) a week in sick pay, should they become ill and unable to work, for up to 26 weeks. They also got a free medical examination from a panel of doctors.

10. Women received less – only 35p, and after 13 weeks the benefit was reduced to only 5 shillings (25p). Also available was a maternity grant of 30 shillings (£1.50) and free medical treatment including medicines. These benefits were paid at recently opened Labour Exchanges, where the pubic could also find details on any job vacancies in their area.

11. Positives Of The Act Illness and absence from work was the major cause of poverty, so any money coming into a household during unemployment would help a family during hard times. The scheme allowed maintenance of an income during sickness of the breadwinner, whilst also helping their recovery to fitness and back into the workplace.

12. However…… The income of 10 shillings a week was still relatively low. The sick-pay was limited to 26 weeks, and many people were sick for longer than this. This meant that after using their 26 weeks entitlement, the only other option was to seek the help of the poor law. The Act did not offer hospital treatment, nor that of a dentist, optician, or other specialist services. The scheme only provided for the insured worker, and not their families – no matter how ill they were. Nor did it provide for the slightly better paid or the self-employed. Moreover, the self-contributory aspect of the scheme decreased it’s popularity. Many families could not afford to give up the 4 pennies a week, even in case of emergencies.

13. Part 2 Part Two of the act provided insurance against unemployment. It applied to those in trades liable to periodic spells of unemployment, for example – in transport or construction, and also to those who earned less than £160 a year. It was financed through the worker, the employer, and the government each paying 2d a week into a fund. In return, an insured worker who was made unemployed would receive 7 shillings a week for 15 weeks.

14. Positives Of The Act The unemployment insurance fund prospered – by 1914, it had a surplus of £23 million in it. The scheme was useful to the workers of applicable industries, as it gave them a small amount of funding should they suddenly become unemployed. Within the 15 weeks, it gave them a chance to find new work, without having the stress of being completely desperate.

15. However…… The amount of benefit received was still relatively low and only offered the workers 15 weeks funding – this meant the poor house for workers who did not succeed in finding new employment. It offered a lifebelt to those in sudden and temporary trouble, yet it did not solve the problem of the long-term employed. In addition, the majority of working class people were not covered by this section of the act, and therefore most people would suffer without income should they lose their job.