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David Lloyd George was one of the 'New Liberals' who passed welfare legislation

The Liberal welfare reforms (1906-1914[1]) collectively describes social legislation passed by the British Liberal Party after the 1906 General Election. It has been argued that this legislation shows the emergence of the modern welfare state in the UK.[1] They shifted their outlook from a laissez-faire system to a more collectivist system. [2] The reforms demonstrate the split that had emerged within liberalism, between progressive liberalism and classical liberalism, and a change in direction for the Liberal Party from liberalism, in general, to a party of progressive liberalism and larger, more active government.

The Liberal welfare reforms took place after a Royal Commission on how the country's Poor Law provision should be altered. Two contrasting reports known as the Majority report and the Minority Report were published, and as they differed so greatly the Liberals were able to ignore both reports and implement their own reforms. By implementing the reforms outside of the Poor Law the stigma attached to claiming relief was also removed.

During the 1906 General Election campaign neither of the two major parties made poverty an important election issue and no promises were made to introduce welfare reforms. Despite this the Liberals led by Henry Campbell-Bannerman won a landslide victory and began introducing wide ranging reforms as soon as they took office.[3]



The influence of Gladstonian liberalism declined with the rise of progressive liberalism.
  • The split within liberalism leading to the rise of progressive liberalism within the Liberal Party, and the de-emphasis of what some refer to as "classical" liberalism, which had allegedly been the dominant ideology within the party. Historically, liberalism emphasized a system of government to protect liberty; historically, liberalism viewed the threat to liberty as mainly coming from the force and coercion of the state; the split within liberalism occurred when many liberals viewed threats to individual liberty arising from sources other than the state, such as from the concentration of money, the amalgamation of power, or in the destitution of the poor, the sick, or the elderly. Progressive liberalism was an ideology which promoted an active government as the best guardian of liberty - both theoretical liberty and effective liberty - through government aid. Several 'New Liberals' such as David Lloyd George and Winston Churchill replaced the earlier ideology apparent in figures such as William Gladstone (see Gladstonian Liberalism) who felt that people should be more trusting of their fate to market forces and the "invisible hand" of capitalism.
  • The writings of Charles Booth and Benjamin Seebohm Rowntree. These writers helped change attitudes towards the causes of poverty. Booth carried out extensive research into the poor living conditions and poverty experienced in London, whilst Rowntree made a social investigation into the problems experienced by the poor in York. These investigations provided statistical evidence for genuine moral concern for the poor. They stated that illness and old age were greater causes of poverty than idleness and moral weakness. Rowntree was himself a close friend of Lloyd George, after the two met in 1907 after Lloyd George became President of the Board of Trade. Rowntree himself hoped that his proposals could influence Liberal policy.[4]
  • The threat from the emerging Labour Party. Socialism was an increasingly popular ideology; if the Liberals did not put forward popular policies, they were in danger of losing votes and handing the House of Commons to the Conservatives.
  • The trade union movement was growing especially during the period 1910-1912. Unless living conditions were improved there were genuine concerns that workers may turn to communism or rebellion.[5]
  • The fact that the Labour Party allowed the Liberals to return to form a government, as they held the seats needed for a majority after the 1910 General Election meant that further legislation was passed, since the Labour Party, which was socially democratic, was allied to workers through their affiliated trade unions.
  • The condition of soldiers during the Boer War was considered unacceptable. The British government had trouble enlisting enough able-bodied recruits to the British army.
  • Germany and the USA were overtaking Britain as economic powers - the success of social legislation in Bismarck's Germany made leading Liberals in the UK such as David Lloyd George and Winston Churchill want to put forward similar legislation.
  • The emergence of public works schemes set up to improve living conditions which were often run by the Liberals raised the possibility that such schemes could occur on a national scale.[6]

Previous social legislation

The Conservative government in office before the Liberals came to power passed the Unemployed Workman's Act in 1905 and the Employment of Children Act in 1905. Slum housing was also cleared for new houses to be built. Much of this legislation was left for local authorities to implement - their attitudes affected whether legislation was fully implemented.[7] The Conservatives also set up a Royal Commission to enquire into the workings of the Poor Law.

Liberal reforms 1906-1914



In 1906 Children were provided with free school meals. However, many local councils ignored this system, as it was not compulsory for them to provide the free meals and the cost to the council was far greater than was subsidized for. The provision of free school meals was made compulsory in 1914- in which year fourteen million were served, most free. In 1912, half of all councils in Britain were offering the scheme. The government realized that they could not fight WW1 with a force of malnourished and ill children, when they had to conscript. In 1908 the Children and Young Person's Act formed part of the Children's Charter which imposed punishments for those neglecting children. It became illegal to sell children tobacco, alcohol and fireworks or to send children begging. Juvenile courts and borstals were created instead for young offenders so they did not have to stand in adult courts and go to adult prisons for most offenses.[8] Medical inspections began in 1907 but many poor families couldn't afford the cost of the doctors fees to get treated; it wasn't until 1912 that medical treatment was provided. Education authorities largely ignored the provision of free medical treatment for school children.[8]


In 1908, pensions were introduced for those over 70. They paid 5s a week (£21 in today's money[9]) to single men and women and 7s 6d to married couples, on a sliding scale. The single persons rate applied to those over 70 earning under £21; this sum could be collected at the local post office.[9] The pensions were means-tested (to receive the pension, one had to earn less than £31.50 annually) and intentionally low to encourage workers to make their own provisions for the future. An example of how low this amount was, is that if an elderly person was to live on thier pension alone they fell below Rowntree's poverty line. It was a struggle for elderly persons to claim their pension as they had to prove that they were not drunkards, for example. Even more, to qualify for the pension scheme, they had to have worked to their "full potential". There were no fixed guidelines as to what "full potential" was, so people who had been briefly unemployed could be penalised. To be eligible, they also had to have lived in the country for 20 years or more, so many immigrants could not claim their pensions, or British people who had worked abroad and returned to Britain to retire. The Labour party argued that most people would not live until their 70th birthday because in the worst industrial slums the average life expectancy was in the mid-40s. [8][10]


In 1909 labour exchanges were set up in order to help unemployed people find work, by providing centres where a large number of employers and the unemployed could post jobs and apply for them respectively. In 1913 these labour exchanges were putting around 3000 people into a job each day. The National Insurance Act (Part I) passed in 1911 gave workers the right to sick pay of 10s a week and free medical treatment in return for a payment for 4d (the payments would last for 26 weeks if the person was off ill). The medical treatment was provided by doctors who belonged to a "panel" in each district. Doctors received a fee from the insurance fund for each "panel" patient they treated. The National Insurance Act (Part II) gave workers the right to unemployment pay of 7s 6d a week for 15 weeks in return for a payment of 2½d a week.

Health Insurance

Under Part 1 of the National Insurance Act 1911 compulsory health insurance was provided for workers earning less than £160 per year. The scheme was contributed to by the worker who contributed fourpence, the employer who contributed threepence and the government who contributed twopence. The scheme provided sickness benefit entitlement of nine shillings (£36), free medical treatment and maternity benefit of 30 shillings (£120).[11]

Unemployment insurance

Under Part 2 of the National Insurance Act 1911 which dealt with unemployment insurance most insured workers were given seven shillings (35p) unemployment benefit which could be claimed for up to 15 weeks a year. This scheme was also financed through the contributions of workers and government.

Reforms after 1910

After 1910 the Liberal Party did not have a majority in the House of Commons and so entered into a coalition with 42 Labour Party MPs who had been elected. This led to further reforms as the Liberals required Labour support and Irish support to remain in office.[5]

The People's Budget (1909)

The Liberal reforms were funded by David Lloyd George passing his Finance Bill (that he called "the People's Budget") which taxed the "rich" in order to subsidize "working" citizens and the ill and injured.

Lloyd George argued that his budget would eliminate poverty, and commended the budget thus:

This is a war Budget. It is for raising money to wage implacable warfare against poverty and squalidness. I cannot help hoping and believing that before this generation has passed away, we shall have advanced a great step towards that good time, when poverty, and the wretchedness and human degradation which always follows in its camp, will be as remote to the people of this country as the wolves which once infested its forests".[12]

The budget met opposition in the House of Lords and, contrary to British constitutional convention, the Conservatives used their large majority in the Lords to vote down the Budget. In response, the Liberals turned to (what they believed to be) the widespread unpopularity of the Lords to make reducing the power of the Lords an important issue of the January 1910 general election.[13]

The Liberals returned in a hung parliament after the election:[14] The Liberals formed a minority government with the support of the Labour and Irish nationalist MPs. The Lords subsequently accepted the Budget when the land tax proposal was dropped. However, as a result of the dispute over the Budget, the new government introduced resolutions (that would later form the Parliament Bill) to limit the power of the Lords.[15] The Prime Minister, Herbert Henry Asquith, asked Edward VII to create sufficient new Liberal peers to pass the Bill if the Lords rejected it. The King assented, provided that Asquith went back to the polls to obtain an explicit mandate for the constitutional change.

The Lords voted this 1910 Parliament Bill down, so Asquith called a second general election in December 1910, and again formed a minority government. Edward VII had died in May 1910, but George V agreed that, if necessary, he would create hundreds of new Liberal peers to neutralise the Conservative majority in the Lords.[16] The Conservative Lords then backed down, and on 10 August 1911, the House of Lords passed the Parliament Act 1911 by a narrow 131–114 vote.[17]

In his War Memoirs, Lloyd George said of this time that "the partisan warfare that raged around these topics was so fierce that by 1913, this country was brought to the verge of civil war."[18]


While the Liberal reforms were one of Britain's most ambitious welfare reform programmes, there were several limitations to the reforms they passed. Free school meals were not compulsory. Pensions were refused to those who had not been in work most of their life and life expectancy at this time was only 55 so many people never lived long enough to receive a pension. The labour exchange programme often managed to find people only part-time casual work. The poor had to pay National Insurance Contributions out of their wages and the 7s 6d was not enough to live on. Unemployment and sickness pay also only lasted for a limited time. Free medical care was available to only a wage-earner, not the wife or children or grandparents and other relatives.[19]

Contemporary criticism

The National Union of Conservative and Constitutional Associations criticized the reforms of Lloyd George as "socialist".

The Liberal reforms received criticism from those who saw this level of government action to mitigate social evils as interfering with market forces and thus being antithetical to the operations of a free market. One political cartoon of the time criticised the reforms as socialist in nature.[20] The cost of the reforms was also criticised and there were also critics who suggested that the reforms would not work in practise.[21]

There were "classical" liberals who opposed these reforms; this includes Harold Cox, elected as a Liberal in 1906, was almost alone among Liberal MPs in his opposition. He considered them to be "eroding freedom" and "undermining individual responsibility". He lost his seat to a Conservative in January 1910.[22] The Liberal journalist and editor of The Economist (1907-1916), F. W. Hirst, also opposed the reforms and the welfare state in general.[23]

Some workers objected to paying 7d per week to the National Insurance contributions.[24] The chant "Taffy was a Welshman, Taffy was a thief" was chanted at Lloyd George by workers and referred to the suggestion that Welshman Lloyd George was taking their wages away from them.[19] However, Lloyd George responded with his famous phrase "Nine pence for four pence" which referenced to that fact that employers and the government were topping up the workers' contributions.[25]


From 1911 MPs were given a salary of £400 per annum, meaning that it was much easier for working class people to stand for election.[5]

See also

External links

Further reading

Origins of the Liberal Welfare Reforms, 1906-14 (Studies in economic and social history) by James Roy Hay ISBN 978-0333135884


  1. ^ a b "BBC - GCSE Bitesize - History | Modern World History | Britain 1905-1951 | The Liberal reforms 1906-1914". GCSE Bitesize. BBC. Retrieved 2009-02-28. "One government that is often seen as an example of 'reforming' by introducing positive changes that really improve peoples' lives is the Liberal government in Britain of 1906-1914. Many historians label this period the beginning of the welfare state [...]"  
  2. ^
  3. ^ The National Archives Learning Curve | Britain 1906-18 | Liberal Welfare Reforms 1906-11: Gallery
  4. ^ Seebohm Rowntree
  5. ^ a b c BBC - GCSE Bitesize - History | Modern World History | Britain 1905-1951 | Reforms and reasons
  6. ^ BBC - Education Scotland - Higher Bitesize Revision - History - Liberal - Motives: Revision 2
  7. ^ The National Archives Learning Curve | Britain 1906-18 | Liberal Welfare Reforms 1906-11: Gallery Background
  8. ^ a b c BBC - GCSE Bitesize - History | Modern World History | Britain 1905-1951 | The important reforms
  9. ^ a b BBC - Education Scotland - Higher Bitesize Revision - History - Liberal - Impact: Revision 1
  10. ^
  11. ^ BBC - Education Scotland - Higher Bitesize Revision - History - Liberal - Impact: Revision 2
  12. ^ The National Archives Learning Curve | Britain 1906-18 | Achievements of Liberal Welfare Reforms: Gallery 2
  13. ^ "1909 People's Budget". Liberal Democrat History Group. Retrieved 6 October 2006.  
  14. ^ "Government Formation from a Hung Parliament" (PDF). Oxford University Press. Retrieved 8 October 2006.  
  15. ^ "Reform and Proposals for Reform Since 1900". House of Lords. 2000-04-19. Retrieved 6 October 2006.  
  16. ^ "Herbert Henry Asquith 1908-16 Liberal". 10 Downing Street. Retrieved 10 October 2006.  
  17. ^ "Joint Committee on House of Lords Reform First Report - Appendix 1: Historical Background". The Stationery Office. 2002-12-11. Retrieved 11 October 2006.  
  18. ^ The War Memoirs of David Lloyd George (Nicholson and Watson, London, 1933-1938
  19. ^ a b BBC - GCSE Bitesize - History | Modern World History | Britain 1905-1951 | Four Results of the Liberal reforms
  20. ^
  21. ^ The National Archives Learning Curve | Britain 1906-18 | Case Study: Critics
  22. ^ W. H. Greenleaf, The British Political Tradition. Volume Two: The Ideological Heritage (London: Methuen, 1983), pp. 95-7.
  23. ^ Greenleaf, p. 98.
  24. ^ 1911 National Insurance Act
  25. ^ Lords Hansard text for 2 Feb 2000 (200202-03)


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