National Insurance Act 1911

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The National Insurance Act 1911 is an Act of Parliament of the United Kingdom. The Act is often regarded as one of the foundations of modern social welfare in the United Kingdom and forms part of the wider social welfare reforms of the Liberal Government of 1906-1914. The increasing influence of the Labour Party among the population had put the Liberals under pressure to enact social legislation.

The Act was passed in two stages. The National Insurance Act Part I provided for a National Insurance scheme with provision of medical benefits and the National Insurance Act Part II provided for time-limited unemployment benefit . The scheme was to be based on actuarial principles and it was planned that it would be funded by a fixed amount each from workers, employers and the government. The scheme from Part II was restricted to particular industries and neither made any provision for dependants. By 1913 2.3 million were insured under the scheme for unemployment benefit and almost 15 million insured for sickness benefit.

A key assumption of the Act was an unemployment rate of 4.6%. At the time the Act was passed unemployment was at 3% and the fund was expected to quickly build a surplus. Under the Act, employees contributions to the scheme were to be compulsory and taken by the employer before the workers salary was paid.

Britain was not the first country to provide insured benefits; Germany had provided compulsory national insurance against sickness from 1884. Sections of the Conservative party opposed the Act considering that it was not for taxpayers to pay for such benefits. Some trade unions who operated their own insurance schemes and friendly societies were also opposed.

The Act was important as it removed the need for unemployed workers, who were insured under the scheme, to rely on the stigmatised social welfare provisions of the Poor Law. This led to the end of the primacy of the Poor Law as a social welfare provider, resulting in the Poor Law finally being abolished in 1926.

A key figure in the implementation of the Act was Robert Laurie Morant.

[edit] References

• Gazeley, I., Poverty in Britain 1900-1945, Palgrave, (2003).

Text of the Act

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