Great Depression in The United Kingdom - Welfare State During The 1930s

Welfare State During The 1930s

In the 1920s and 1930s, Britain had a relatively advanced welfare system compared to many of the industrialised countries. In 1911, a compulsory national unemployment and health insurance scheme had been put in place by the Liberal government of Herbert Henry Asquith (see Liberal reforms). This scheme had been funded through contributions from the government, the employers and the workers. At first, the scheme only applied to certain trades but, in 1920, it was expanded to include most manual workers.

However, the scheme only paid out according to the level of contributions made rather than according to need, and was only payable for 15 weeks. Anyone unemployed for longer than that had to rely on poor law relief paid by their local authority. In effect, millions of workers who had been too poorly paid to make contributions, or who had been unemployed long term, were left destitute by the scheme. With the mass unemployment of the 1930s, contributions to the insurance scheme dried up, resulting in a funding crisis.

In August 1931, the 1911 scheme was replaced by a fully government-funded unemployment benefit system. This system, for the first time, paid out according to need rather than the level of contributions. This unemployment benefit was subject to a strict means test, and anyone applying for unemployment pay had to have an inspection by a government official to make sure that they had no hidden earnings or savings, undisclosed source(s) of income or other means of support. For many poor people, this was a humiliating experience and was much resented.