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Home , John Burns, The Spectator

The Old Age Pensions Act, 1908

A hundred years ago this year, H. H. Asquith’s Liberal government legislated to introduce state pensions. The Old Age Pensions Act, 1908, has rightly been seen as one of the foundation-stones of the modern British welfare state. It was just one of a series of remarkably enduring institutions initiated by the post-1906 Liberal governments, which created a decisive break between the deterrent and stigmatising Poor Law principles of state social welfare ld age pensions twenty-one should be compelled were continu- to contribute in order to provide and serious attempts ously debated in old age pensions for the lower- at more humane and Britain from 1878. paid.2 They were first Blackley had spent twenty- positive forms of placedO on the political agenda three years in rural parishes in by Canon William Blackley,1 southern and discovered provision. Pat Thane who proposed, in an article in the extent of poverty in old age. examines the story of Nineteenth Century, that every- He noted that Friendly Societies, the 1908 Act. one aged between eighteen and the voluntary mutual savings

4 Journal of Liberal History 60 Autumn 2008 The Old Age Pensions Act, 1908

institutions, which supported Committee on National Provi- give rise to international debate most skilled urban workers in dent Insurance in 1885–87. and, in Britain, a succession of sickness and old age, provided This made clear that very many further official investigations less assistance in the countryside. younger people, especially which offered more evidence For this he blamed the financial women, did not earn enough of the scale of the problem. In instability of the societies. In to save, and also that prevailing 1889 Bismarck introduced in reality the greater problem was interest rates were unlikely to Germany the first-ever state the difficulty of low-paid rural yield the level of benefits Black- pensions. Blackley was con- workers and their wives afford- ley had envisaged, even when he vinced that he had inspired this ing the required regular con- cut back his proposals to include innovation, though there is no tributions. Blackley believed, pensions only. But evidence to evidence to support this. Bis- however, that the one stage of the Select Committee made marck’s scheme formed part of life at which all workers could clear that the problem of poverty a pioneering contributory social save was when they were young, in old age was real. The only insurance system which the Ger- in their first years of work before publicly funded ‘welfare’ avail- man government had initiated in they faced the costs of marriage able was the long-established 1884. In return for regular con- and parenthood. He also felt that Poor Law, which was structured tributions, workers were entitled young workers wasted money to stigmatise and deter appli- to a pension at age seventy, or that they should be encouraged cants. Those most likely to be sooner if they became incapaci- to save, citing ‘instances as I can deterred were those who had tated for work. The weakness of give from my personal knowl- led respectable, hard-working the system was that it covered edge, of young labourers by lives, avoiding the shame of poor only regularly and better-paid, the dozen, without a change of relief, but never earning enough mainly male, industrial work- decent clothes, continually and to save for old age. Most of them ers, thus excluding many of brutally drinking, living almost were women, who earned least those at greatest risk of poverty like savages while earning fully during working life but lived in old age: women and low-paid £1 a week’3. He proposed that longer than men. The Poor casual and agricultural work- all young people should contrib- Law insisted that children had ers. Bismarck was concerned to ute a maximum of £10 which an obligation to support their win the electoral support of the would accumulate in a savings ageing parents – but, at a time male trade unionists in the bet- fund, controlled and invested of high infant mortality, many ter-paid trades and to stimulate by the state. This would deliver older people had no surviving economic growth by increasing to all ‘wage-earners’ (as distinct children. Or they might have the security of workers in devel- from wage-payers and leisured migrated far away (perhaps to oping industries.5 In Britain, by and salary earners, who would Canada or Australia) in search contrast, the debate about pen- contribute but not benefit), a of security; or they might them- sions focused upon how best to weekly sickness payment until selves be too poor to help. There support the very poor, who had age seventy, and four shillings is every sign that close relatives fewest opportunities to save dur- per week pension thereafter. did help older people when they ing their working life. The type This elegantly logical pro- could.4 Left: one of the of better-paid worker who ben- posal was widely debated and The issue of aged poverty was original old age efited from the German scheme then investigated by a Select prominent enough at this time to pension books. was normally covered in Britain

Journal of Liberal History 60 Autumn 2008 5 the old age pensions act, 1908 for sickness and old age by vol- During the He had strong support for this in approached social policy cau- untary, mutual benefit socie- the growing labour movement, tiously during their first two ties: Friendly Societies and trade 1906 election but his proposal was widely years in office. One reason was unions.6 campaign criticised on grounds of cost. the large Conservative majority Nevertheless, from around Partly in consequence, he modi- in the House of Lords, which 1890, , fifty-nine fied his proposal, suggesting in threatened to reject ‘advanced’ who had been impressed by the 1899 a pension age of seventy, legislation and did reject an German scheme, became inter- per cent but a pension of seven shillings Education Bill in November ested in the issue and sought to per week, since his research 1906. At least as important was devise a ‘practical programme’ of Liberal now suggested that five shillings the problem the Liberals inher- of social reform, including pen- candidates would not provide enough for a ited from their predecessors, sions. For a while he took the pensioner to live on.7 that government revenue could lead in the public debate on the supported barely keep pace with grow- issue. He was reluctant to aban- ing government expenditure, don the contributory insur- pensions in The Liberals in office – still less fund new ventures, ance approach, on the grounds planning pensions despite cuts in defence spend- that fully tax-funded pensions their election The problem of helping the aged ing. An urgent task for Asquith, would encourage dependency addresses. poor continued to be investigated as Chancellor of the Exchequer, and discourage self-help. Yet he by commissions and commit- was to review the taxation sys- opposed compulsion and rec- tees established by Conservative tem in order to increase gov- ognised that the poorest people governments,8 though the costs ernment income. Liberal fiscal could not afford contributions, of the Boer War (1899–1902) policy was constrained by their yet still survived to old age. further diminished any likeli- opposition to tariffs and strong Chamberlain proposed a state- hood of an expensive pension commitment to free trade. Their subsidised voluntary insurance scheme.9 It was still an active, only realistic means to increase scheme for the low-paid, but unresolved issue by the time revenue was to increase direct came to recognise that this could of the general election of 1906. taxation, which was unlikely not help those in greatest need During the election campaign to be electorally popular and so in the foreseeable future. In the fifty-nine per cent of Liberal had to be approached with cau- 1890s he came to believe that candidates supported pensions tion. The social legislation of the only a non-contributory pen- in their election addresses. This Liberals’ first two years in office sion targeted at the respectable was less prominent than free was notable for either placing aged poor could begin to solve trade, which Liberals supported the burden of cost on local rate- the problem. Schemes of this almost universally, amendment payers (such as the introduction kind were introduced in Den- of the Education Act or reform of free school meals in 1906 and mark in 1891, New Zealand in of the government of Ireland, medical inspection in schools in 1898, New South Wales in 1900 but Liberal support was still sub- 1907) or for costing the taxpayer and Victoria in 1901. stantial. Eighty-one per cent of nothing (such as the Miners’ The businessman and poverty Labour Representation Com- Eight Hours Act, 1908).11 researcher Charles Booth reached mittee (LRC, the forerunner Nevertheless, within a year similar conclusions. His research of the Labour Party) candidates of the election, Asquith asked a on poverty in and else- pledged themselves to pensions, Treasury civil servant, Roderick where helped to expose the which came a close fourth in Meiklejohn, to investigate the extent of poverty in old age and their preferences after increased practicability of a state pension convinced him that the poorest working-class representation, scheme. It was highly unusual could not afford contributions. reform of the law for the Treasury, which regarded He was also convinced that tar- and provision for the unem- its role as control of departmen- geted, means-tested schemes ployed. Among Conservative tal spending, to initiate new would not help, because respect- candidates, pensions and Poor expenditure in this way.12 It is able old people in need would Law reform were the most pop- unclear why Asquith took up the identify them with the demean- ular social reforms, supported by issue, though he was under per- ing Poor Law destitution test and twenty-two per cent.10 sistent pressure from the labour refuse to apply. They would also Once in office, having movement and from Liberal be costly to administer. In 1891 achieved a landslide victory in social reformers. he proposed, instead, a univer- the election, the Liberal leaders Meiklejohn surveyed existing sal pension of five shillings per were under pressure from Labour pension provision and propos- week to be paid to everyone at and from the vocal reform- als. Asquith read, and carefully age sixty-five, which would be ing wing of their own party annotated, a detailed report on simpler to administer and which to introduce pensions, among the German scheme. In Decem- the rich would repay in taxation. other social measures. But they ber 1906 the Cabinet discussed a

6 Journal of Liberal History 60 Autumn 2008 the old age pensions act, 1908

Treasury memorandum which speech promised pensions for the report of 1942, Social Insurance focused on poverty in old age following year. In the spirit of and Allied Services, which influ- as a major and possibly grow- Gladstone’s determination that enced Labour’s post-war welfare ing problem. The memorandum the costs of state action should state. He agreed with Booth that pointed out that trade unions fall equally upon all classes, means-tested benefits were both and Friendly Societies could not Asquith announced: ‘If we are inefficient at detecting need and assist low and irregular earners. ready to have social reform we administratively wasteful. He It rejected an insurance scheme must be ready to pay for it … commented, not entirely seri- because it also could not include I mean the whole nation, the ously, that if pensions were to the lower paid. It acknowledged working and consuming classes be limited there was much to the attraction of a universal non- as well as the wealthier class of be said for confining them to contributory pension, but ‘the direct taxpayers.’14 Hence he women; the grounds for quali- difficulty is one of money; all retained the additional taxes on fication were unmistakable and other objections to the scheme tea, sugar and cocoa which had the need undeniable. He was fall into comparative unimpor- been introduced to pay for the attracted to the German system tance beside this one’.13 Hence Boer War, of which working of invalidity pensions which the only possibility was a lim- people paid a high proportion, ‘gave not pensions at a fixed age, ited non‑contributory scheme, and announced that the yield but pensions whenever invalid- similar to one proposed by the would be used to finance pen- ity began’. In 1907 most German Conservative leader Arthur Bal- sions. The Budget was mildly Asquith’s pensioners qualified under this four in 1899. The memorandum redistributive, within the work- heading.16 emphasised the importance of ing class as well as between rich priority was Asquith was impressed by dissociating pensions from the and poor. to find new Beveridge’s well-founded criti- Poor Law. This evidently genu- cism of means‑tests, but was ine desire no longer to stigmatise sources of dissuaded by Meiklejohn from and punish the poorest was a real Drafting the Bill taking the social insurance route change from the discourse on Asquith delegated the drafting revenue to on the grounds, above all, of the poverty which had dominated of the pensions bill to Regi- cost of administration. Detailed the nineteenth century. The nald McKenna, President of the pay for pen- drafting of the bill was referred to aim was to target pensions on Board of Education. He was not sions … his a Cabinet committee consisting the poorest older people without the obvious choice, but Asquith of Asquith, McKenna and John stigmatising them and deterring trusted him and was determined favoured Burns, the former trade union- them from applying. to keep the bill out of the hands ist, now President of the LGB The Cabinet approved the of the Local Government Board alternative and the first working man to sit memorandum, and Asquith (LGB), which he believed was in a British Cabinet. Its main began to prepare his second too closely associated with the was to move task was to fit a pension scheme Budget. His priority was to find Poor Law, which it adminis- from the within the strict budgetar y limits new sources of revenue to pay for tered, and would taint the pen- laid down by the Treasury. They pensions, among other things. sion with the Poor Law stigma. established decided on a five-shilling pen- As already pointed out, the Lib- The Treasury put a strict limit sion (despite Booth’s warning eral commitment to free trade of seven million pounds per year single rate that this would be inadequate) ruled out the option of seeking a on the cost of the pensions.15 to be paid to those with incomes new source of revenue by impos- The likelihood that the gov- of income below ten shillings per week. ing tariffs on imports. Asquith’s ernment was shortly to intro- tax on all The chief saving was achieved favoured alternative was to move duce limited non-contributory by placing the pensionable age from the established single rate pensions brought criticism from, incomes to at seventy, rather than sixty-five, of income tax on all incomes to among others, the young Lib- as had been expected; sixty-five a graduated tax, which would eral correspondent on social a gradu- was generally thought to cor- increase the tax contribution of questions for the Conservative respond with the age at which higher earners. He succeeded Morning Post, William Bev- ated tax, most workers found it difficult in overcoming Treasury resist- eridge. Beveridge was a resident which would to support themselves. They ance to this, but had to move at the East London Settlement, also recommended a reduced cautiously to win parliamentary Toynbee Hall, and already increase pension of seven shillings and and voter acceptance. His 1907 immersed in social work and sixpence per week for married Budget proposed to differentiate social research. A visit to Ger- the tax con- couples. The LGB was anxious for the first time between earned many early in 1907 to investi- to include a test of ‘character’ (or and unearned income (the lat- gate their system of employment tribution respectability) and it was decided ter to be more heavily taxed) exchanges aroused his interest of higher to exclude all who received poor and between incomes below and in national insurance, foreshad- relief after 1 January 1908, and above £2,000 a year. The Budget owing his famous government earners. all those unable to provide proof

Journal of Liberal History 60 Autumn 2008 7 the old age pensions act, 1908 of ‘thrift’ during working life. pension at seventy is too remote The response (workers and employers directly The committee did not suggest to create any very lively feel- through regular contributions, how thrift was to be defined. ings, and so far where it has been was predict- taxpayers indirectly through the ’Criminals, lunatics and aliens’ mentioned at public meetings ably mixed. state’s contribution) contributed were also excluded. ‘Aliens’ were it has been received with ironi- for the good not only of the very all residents who did not possess cal cheers.’17 The Liberal Nation ‘Well begun, poor and of working people but British nationality; the largest and welcomed the of all of society. Society gained group at the time were Jewish announcement. half done’ in stability and productivity refugee immigrants from east- In the Morning Post, Bev- when workers had stable, secure ern and central Europe. eridge pointed out, quite cor- commented lives and felt that the state sup- The scheme would be admin- rectly, that there was no sign that Frederick ported them. At the same time, istered by voluntary local com- the government had planned for an insurance scheme would ena- mittees, composed of people the future costs of a potentially Rogers, ble working people to continue with relevant experience, assisted expensive system, especially as to practice self-help as well as by a paid clerk. At the Treasury’s the proportion of old people in former chair helping others. Beveridge dis- insistence, the responsibilities the population was expected missed the problems of integrat- of the local inspectors of Cus- to increase. He argued that of the LRC ing the poorly and irregularly toms & Excise were extended to an insurance system, however and cam- paid into an insurance system, include supervision of the local costly in the short run, would commenting: ‘surely they waste pension administration, ena- be more efficient and more paigner for more than two pence a week on bling the Treasury to control the cost-effective in the long run, drink, let them contribute that administration at no additional since it would be self‑financing. universal … how can a man better prove cost. John Burns was furious at Beveridge was critical of the ad that he needs and deserves a pen- the appointment of these Treas- hoc nature of the Liberal social non-con- sion than by paying for it?’19 His ury watchdogs. Claims were reforms. He conceived of pen- tributory approach was, however, much to be made and pensions paid sions as the first instalment of a influenced by his assumption through the Post Office, the wider ranging programme of pensions. that ‘their whole working life is only government department remedies for the major causes of one which will not be allowed with offices in every district. need. He was shortly to become to continue permanently in a This scheme was approved by Churchill’s adviser at the Board well-organised state’.20 He was the Cabinet. Through this use of of Trade and the initiator of to devote the next decade, as existing institutions costs were labour exchanges, in 1909, and adviser at the Board of Trade, to kept to a minimum. unemployment insurance, in the reduction of low-paid casual In April 1908 Campbell- 1911. Beveridge’s preference for labour. But a major weakness Bannerman resigned due to social insurance was consistent of his approach was that he had ill‑health and was succeeded as with his wider social and politi- nothing to say about the poverty Prime Minister by Asquith. He cal vision. He wrote: of older women, who had not appointed necessarily been in paid work to succeed him as Chancellor. A non-contributory scheme throughout their adult lives and, took his first sets up the state in the eyes even when employed, had often Cabinet post as President of the of the individual as a source been very low paid and could Board of Trade. Nevertheless, of free gifts. A contributory not easily fit into an insurance Asquith presented the Budget scheme sets up the state as a system – especially if they were which he had prepared and took comprehensive organism to unmarried, as many were.21 the opportunity to outline the which the individual belongs coming Pensions Bill. and in which he, under com- pulsion if need be, plays his Pensions in Parliament part. Each view involves aban- The Old Age Pensions Bill The critics donment of traditional lais- received its second reading in The response was predictably sez-faire. The first, however, the House of Commons on 15 mixed. ‘Well begun, half done’ represents a change for the June 1908. It was introduced commented Frederick Rog- worse which it will be hard to by Lloyd George, who ever ers, former chair of the LRC remove. The second is a natu- after was to receive the credit and campaigner for universal ral recognition of the growing for the scheme actually devised non-contributory pensions. The complexity and interdepend- by Asquith. The pension even LRC pressed on with demands ence of industrial life.18 came to be known popularly as for an age limit of sixty-five ‘the Lloyd George’. It became and a higher means limit, sup- Social insurance, he believed, clear in parliament that claim- ported by the TUC. could assist social integration ants would potentially undergo commented: ‘The promise of a because all sections of society investigation hardly less rigorous

8 Journal of Liberal History 60 Autumn 2008 the old age pensions act, 1908 than under the Poor Law. Their weakened the moral fibre of rest of whether they will land on income would be assessed. The the country by a system and a solid ground or quagmire’.27 disqualifying ‘character defects’ policy of which this is only the The Bill survived strong were now defined as ‘habitual beginning, then a statesman Conservative opposition in the failure to work according to his who had mentioned this miser- House of Lords, where some ability, opportunity or need, for able backsliding from the fine Conservative peers were evi- his own maintenance or that of statesmanship of Empire would dently rehearsing the revolt his legal relatives’. Receipt of have something to answer for.25 which was to come against poor relief after 1 January 1908 the Budget of 1909. The Lords disqualified, as did imprison- The Labour Party approved the passed a number of amendments, ment for crime without option bill ‘as a beginning’, but pressed which were deleted when the bill of fine or conviction for drunk- for a universal scheme and returned to the lower house, on enness, within ten years of the strongly opposed the disquali- grounds of having contravened claim. ‘Aliens and wives of fication of paupers. Labour suc- Commons privilege by inter- aliens’ were excluded. This was ceeded in winning a review of vening in a financial measure. to prove a shock to many non- this after two years (it was abol- In response the Lords passed an Jewish women who had mar- ished from 31 December 1910, unprecedented measure of cen- ried Jewish immigrants who had when the widows of ‘aliens’ sure against the Commons. The not taken British citizenship. who had themselves been born ageing Lord Rosebery expressed Obtaining citizenship, which as British subjects were also his regret about the ways that had previously been a relatively allowed to qualify for the pen- society and were cheap and simple process, was sion, following vigorous protests changing. He thought this ‘the becoming more difficult in this on their behalf26). Conservative most important Bill … in the period of rising anti-Semitism.22 backbenchers won a modifica- forty years I have sat here’ more One advance on Poor Law prin- tion of the means test to incor- important in its implications ciples in the proposed legislation porate a sliding scale. Old people even than the parliamentary was that pensioners were not to with incomes of up to twenty- reform bills, for, he believed, it be deprived ‘of any franchise, one pounds per year would was a: right or privilege’, though at a receive the full pension; thereaf- time when all women and many Lloyd ter the pension was reduced by … pauperising bill, symbolis- men who were not independent one shilling per week for each ing the final passing of family householders lacked the vote this George’s shilling per week of income pride in caring for their elderly was of limited value. between twenty-one pounds and … it is, of course, socialism Lloyd George’s opening opening a ceiling of thirty-one pounds pure and simple … but … we speech was described in the speech was and ten shillings per year. The have advanced to that period Spectator as ‘halting in tone and minimum pension was one shil- of socialism where some such apologetic in manner’.23 As the described in ling. Those with incomes as low measure as this is required … debate went on, he became ever as twenty-six pounds per year it is part of the almost daily more uneasy about the deficien- the Spectator would receive only three shil- transfer of burdens from the cies of the scheme. He stressed lings a week. In fact, in the first individual to the state … it repeatedly that it was ‘only a as ‘halting ten years of the pension, the per- will absorb money which in beginning … the scheme is nec- in tone and centage of pensioners receiving the past has gone to charity essarily incomplete … this is a less than five shillings never rose … it is the beginning of a long great experiment … we say it is apologetic in above seven. process which will culminate a beginning, but a real begin- The government imposed a in the handing over of hospi- ning.’24 He made clear that the manner’. As closure to avoid further costly tals to the state.28 five-shilling pension was not amendments. In particular, intended to provide an income the debate this prevented debate on the As indeed it was. Rosebery did adequate to live on, but to sup- contentious issue of the age not, however, advise the Lords to plement and encourage sav- went on, he limit. As the bill completed its vote against his fellow Liberals. ing and support from relatives became ever progress through the Commons, and others. The Conservatives The Times, with some justice, had decided not to oppose the more uneasy attacked ‘the vagueness of the Pensions implemented bill in the Commons, though a conceptions underlying the Bill The Bill received the Royal small right-wing group, led by about the and the haphazard way in which Assent on 1 August 1908. It gave Lord Robert Cecil, did so. Cecil its proposals have been flung a pension, which was not on its warned: deficien- together with no coherent the- own enough to live on, prima- cies of the ory or aim … the government rily to the very old, the very War might be approaching, are taking a leap in the dark with poor and the most respectable, and if the government had scheme. no more real knowledge than the provided that they were also

Journal of Liberal History 60 Autumn 2008 9 the old age pensions act, 1908

British subjects. In effect it was after the removal of the pauper administration. The ‘character an amendment of the Poor Law disqualification in March 1911. clause’ seems to have proved and operated on similar princi- The LGB had estimated 572,000 almost unworkable and hardly ples. Yet it was not the Poor Law. pensioners in the first year. The ever to have been applied. The government and its admin- undercount was greatest in Ire- The process of claiming a istrators were careful to protect land (by 70,000 compared with pension began with completing a pensioners from the language 10,000 on the mainland); the form at the post office. This was of opprobrium which had char- government appears to have sent to the local pension officer, acterised the poor relief system underestimated the extent of who investigated the claim. He since 1834 – successfully, it seems, rural poverty, though there may reported to the local committee, in view of the much larger num- also have been some audacious which made a decision and noti- bers of impoverished old people claims, in view of the difficulty fied both the claimant and the who were prepared to apply for of proving the age of older peo- pension officer. The voluntary the pension than for poor relief, ple in Ireland, since compulsory local pension committees were and of their reactions to it, as we registration of births had been made up members of Friendly will see. Also, entitlement and introduced only in 1865, and also Societies, trade unions, clergy- administration were uniform perhaps a temptation for nation- men and others with relevant throughout the country, which alists to extract some illicit ben- experience or interest in social had never been true of poor efit from the English Treasury.32 issues. Where the officer and relief. For the first time, the state In consequence, Lloyd George the committee disagreed, there gave a cash payment to a group had to request an additional could be a further investigation in need as a right (if they met the £900,000 to finance the first and a hearing which both officer criteria), without deterrent pen- year of the scheme. and claimant might attend. If alties.29 The dockers’ leader, Ben On 1 March 1906 about disagreement persisted, each Tillett, greeted it joyfully as ‘the 168,100 people age seventy and had a right of appeal to the LGB. first piece of socialism Britain over were receiving outdoor Claimants seem, on the whole, has entered upon’.30 However, he relief. This fell in 1910 to 138,200 to have been well treated. The soon changed his mind and sup- with the abolition of pauper dis- system seems to have worked ported a resolution at the annual qualification and to only 9,500 harmoniously, with few appeals conference of the TUC shortly in 1912. Increasingly also, Poor and generally good relations afterwards, that: Law guardians granted five shil- between pensions committees Yet it was not lings a week to paupers believed and officials. The Act will not be satisfactory to be ‘old’ whether they were Where a pension was until amended so as to provide the Poor Law. above or below the age of sev- approved, the pension was pay- for a minimum pension of five The govern- enty. The numbers of people able each Friday at the local shillings per week, without aged seventy or above in work- post office. Grateful pensioners condition, to men and women ment and its houses were much less affected. were said to have offered flow- of sixty; in the case of persons These mainly housed people ers, apples, and even rashers of who by reason of their afflic- administra- who needed residential care or bacon to the postmasters and tion by blindness are rendered who could not survive outside -mistresses who handed them incapable of earning their liv- tors were on the minimal pension. The their first pension. For years ing, the age limit to be entirely careful to total of aged workhouse inmates they showered their gratitude removed.31 on 1 March 1906 was 61,400; in on Lloyd George who had done protect pen- 1910, 57,700; in 1912, 49,300.33 no more than to steer the legis- A similar resolution was passed In the first years, about 40 lation doubtfully through the annually for the next sixteen sioners from per cent of the over-seventy age Commons.35 years. group qualified for the strin- For all its inadequacy, the The first old age pensions the language gently means-tested pension, impact of the pension upon the were paid to 490,000 people on whereas only about 24.5 per immense poverty of Edwardian 1 January 1909, the great major- of oppro- cent of the same age group had Britain should not be underesti- ity at the maximum rate. Most brium which received poor relief in 1906.34 mated. As John Burns reported of the pensioners were women; This suggests the extent of the to Asquith after the first pen- 37.4 per cent were men. At the had charac- severe need which had been sions were paid: time of the 1911 census men going unmet before the intro- accounted for 41.4 per cent of terised the duction of the pension; and I visited the shopping places the over-seventy population, poor relief also that the pension may have where most of the poor do con- but were only 36.7 per cent of been less plagued by the prob- gregate. After chats with the pensioners. The total number system since lem of non-take-up than later butcher, the cheesemonger and of pensioners rose to 650,000 means-tested schemes, per- the police the general view was in March 1909 and to 1,070,626 1834. haps due to sympathetic local that the five shillings to one

10 Journal of Liberal History 60 Autumn 2008 the old age pensions act, 1908

was a boon, but where a cou- more humane and positive forms The Old Age workers, intended to contribute ple received the joint pension it of provision. These included the to reduction of the high rates of meant a great deal to the hon- Education (Provision of Meals) Pensions Act infant mortality by improving est and provident poor. So far Act, 1906, which enabled local was just one the resources of working-class there was no evidence of waste authorities to provide free meals mothers. After a campaign by or spending on drink and from for under-nourished schoolchil- of a series of women, the benefit was paid many sources there were really dren; this was made compulsory directly to the mothers rather grateful thanks for those who for all local authorities, with remarkably than, as originally intended, to had brought this boon to the an Exchequer subsidy in 1914. the insured men. deserving poor. In 1907 local authorities were enduring At least as important as the required to inspect the health of institutions social legislation, which gradu- Lloyd George commented to children in state schools and to ally increased social expenditure Parliament in 1909, in the course provide for their medical care; initiated by under the Liberals, were the tax of defending the additional cost in 1912 this work also received changes which made the spend- of pensions: a subsidy from the Exchequer. the post-1906 ing possible. The introduction by The Children Act, 1908, estab- Asquith of a graduated income Pensions officers and pensions lished a separate system of justice Liberal gov- tax was taken further by Lloyd committees … have all told me for minors under age sixteen, ernments, George in the controversial 1909 the same story of people facing withdrawing them from adult Budget, finally passed in 1910, poverty and privation for years courts and prisons, and shifted which cre- which increased tax on earned with resignation, with forti- much responsibility for the care income, introduced a super-tax tude and with uncomplaining of children in need from the ated a deci- on incomes above £5000 per patience; they all ask the same Poor Law to local authorities. year, increased death duties and, question and they ask it in In 1909 the modern proba- sive break for the first time, introduced tax vain – how on earth these poor tion service was introduced between the relief for each child of taxpayers people could have managed to as an alternative to prison for earning £500 per year or less. keep body and soul together offenders, aimed at rehabilita- deterrent This was a remarkable series on such slender resources. It is tion. In the same year the Trade of changes in a short time. not that they have understated Boards Act introduced an effec- and stigma- Equally remarkable is how long their resources; on the contrary tive minimum wage for women many of them have lasted. The there are cases where they have in some of the worst-paid tising Poor principles established in the 1908 overstated them with a sort of trades, and Beveridge’s labour Law princi- Old Age Pensions Act have cer- pride … what strikes you is exchanges began to be estab- tainly long survived, for good their horror of the Poor Law lished throughout the coun- ples of state and ill. British state pensions … this Pension Act has dis- try, funded by the Treasury, remained wholly non-contrib- closed the presence amongst us designed to reduce unemploy- social wel- utory, with minor amendments of over 600,000 people, the vast ment by matching unemployed to the scheme, until 1925. In majority of whom were living workers to jobs by gathering and fare and seri- 1925 the Old Age, Widows and in circumstances of great pov- disseminating information about ous attempts Orphans Contributory Pensions erty, yet disclaimed the charity vacancies. Then Act introduced pensions at age of the public … it has cost more Insurance Act, 1911, introduced at more 65 for contributors to National than was anticipated, but the social insurance to Britain. Part Health Insurance and to the greatness of the cost shows the 1 of the Act, masterminded humane widows and orphans of male depth of the need.36 by Lloyd George, introduced contributors, in return for addi- National Health Insurance; Part and positive tional contributions. The non- 2, the work of Beveridge and forms of contributory pension continued Churchill, concerned unem- to be paid at age seventy to those Conclusion ployment insurance. This was provision. who did not qualify for National The Old Age Pensions Act, designed, unlike pensions but Insurance. The rate of pen- 1908, has rightly been seen as like the German scheme, to sion (now ten shillings , but still one of the foundation-stones provide security and health care inadequate for survival with- of the modern British welfare for regularly employed man- out a supplement) was the same state. It was just one of a series ual workers (white-collar and, for both forms of pension. The of remarkably enduring institu- also, agricultural workers were change was a response to wide- tions initiated by the post-1906 excluded) rather than to relieve spread conviction that too many Liberal governments, which cre- poverty. The great majority of needy people became incapaci- ated a decisive break between the beneficiaries were male. How- tated, or died, before the age of deterrent and stigmatising Poor ever the scheme did include a seventy and to the particularly Law principles of state social maternity benefit for insured high rates of unemployment welfare and serious attempts at women and wives of insured among older workers during the

Journal of Liberal History 60 Autumn 2008 11 the old age pensions act, 1908 depression of the inter-war years. average live longer than men, Pensions and the Aged Poor – a Pro- Resistance to the cost of a more contribute further to the relative posal (London, 1899). inclusive non-contributory pen- poverty of older women.37 Many 8 Report of the Royal Commission on the sion remained strong. of the problems that were identi- Aged Poor (1898); Report of the Select The pension system was more fied one hundred years ago have Committee on the Aged Deserving Poor substantially reformed by the not disappeared. (1899); Report of the Departmental post-war Labour government The Old Age Pensions Act, Committee on Financial Aspects of the in 1946, inspired by Beveridge’s 1908, was an important founda- Proposals made by the Select Committee 1942 report, though Labour tion-stone in the building of the of the House of Commons of 1899 about modified his recommendations British welfare state, embodying the Aged Deserving Poor (1900). in important respects. In partic- some of its weaknesses as well as 9 Thane, Old Age, pp. 177–212. ular the basic state pension still its strengths. 10 A. K. Russell, Liberal Landslide: The did not provide a living income. General Election of 1906 (David & Despite Beveridge’s desire to Dr Pat Thane has been Profes- Charles, 1973), p. 64. avoid the means tests he had sor of Contemporary British His- 11 For details of social legislation at always opposed, from the begin- tory at the Institute of Historical this time see Pat Thane, The Foun- ning, large numbers of the poor- Research, , dations of the Welfare State (Long- est pensioners had to supplement since 2001. Her publications include man, 2nd ed., 1996), pp. 6–48. the pension with means-tested The Foundations of the Wel- 12 George Peden, The Treasury and National Assistance: 648,000 of fare State (Longman, 1982; 2nd British Public Policy, 1900–59 (OUP, them in 1948, almost a million ed., 1996); Old Age from Antiq- 2000), Ch. 2. by 1951. It has continued to be uity to Post-Modernity (co-ed. 13 TNA CAB 37/85 1906 Memorandum the case, to the present, that the with ; Routledge, on Old Age Pensions, 14 Dec. 1906. basic state pension is inadequate 1998); Old Age in England. 14 Hansard (4th series) House of Com- for survival. Pensioners have Past Experiences, Present Issues mons, vol.172, col.1195. been required to supplement it (OUP, 2000); Women and Age- 15 For details of the background to the with occupational pensions, pri- ing in Britain since 1500 (co-ed. legislation, see Thane, Old Age, pp. vate savings or, in the case of the with Lynne Botelho; Longman, 217–22. poorest, means-tested state wel- 2001);The Long History of Old 16 On Beveridge, see Jose Harris, fare, currently known as Pension Age (ed.; Thames and Hudson, William Beveridge. A Biography’ Credit. Throughout this time a 2005); Britain’s Pensions Crisis: (OUP, 2 nd ed., 1997). On German high proportion of the poorest History and Policy (co-ed. with pensions see E. P. Hennock British pensioners have failed to apply Hugh Pemberton and Noel White- Social Reform and German Precedents, for the supplement for which side; OUP/British Academy, 1880–1914 (OUP,1987), and The Ori- they would qualify (currently up The Old Age 2005). She is a convenor of History gin of the Welfare State in England and to 30 per cent of eligible pension- and Policy (www.historyandpolicy. Germany. ers), due either to pride or igno- Pensions Act, org) which seeks to raise the quality 17 The Times, 12 May 1908. rance. The concerns of Booth of contemporary policy-making and 18 Hennock British Social Reform, p. and Beveridge about the exclu- 1908, was an understanding of important issues 136. sionary effects of means-testing by communicating relevant work by 19 Morning Post , 11 May 1908. have proved justified. Most of important historians into the public arena. 20 Ibid. these poorest pensioners are foundation- 21 Harris, Beveridge, pp. 138–95. female for the same reasons that 1 Pat Thane ‘Blackley, Willliam Lew- 22 D. Feldman, Englishmen and Jews: women were most of the aged stone in the ery (1830–1902) Oxford Dictionary of Social Relations and Political Culture, poor in 1908: women do not fit National Biography (OUP 2004–08). 1840–1914 (Yale University Press, comfortably into a pension sys- building 2 W. L. Blackley ‘National Provi- 1994), pp. 268ff. tem based upon contributory dent Insurance’, Nineteenth Century, 23 Spectator, 20 June 1908. state insurance, income-related of the Brit- November 1878, pp. 834–57. 24 Hansard (4th series), House of Com- occupational pensions and pri- ish welfare 3 Ibid., p. 850. mons, Vol. 190, col. 585. vate saving because so many of 4 Ibid., pp. 287–307. 25 Ibid., col. 624. them have interrupted work state, 5 E. P. Hennock, The Origin of the 26 Feldman, Englishmen and Jews, p. records due to caring respon- Welfare State in England and Ger- 376. P. Thane, ‘The British Impe- sibilities, and when they work embodying many, 1850–1914 (CUP, 2007). rial State and the Construction of they earn less than men and so 6 Paul Johnson Spending and Saving. National Identities’ in B. Melman qualify for lower pensions and some of its The Working Class Economy in Brit- (ed.), Borderlines: Gender and Identities have less opportunity to save. weaknesses ain, 1870–1939 (OUP, 1985). in War and Peace, 1870–1930 (London High rates of partnership break- 7 C. Booth Pauperism – a Picture, and and New York, 1998), pp. 38-41. up, like high rates of widowhood as well as its Endowment of Old Age, an Argument 27 The Times, 8 July 1908. in the late nineteenth century, (London, 1892); The Aged Poor – 28 Hansard (4th series), House of Lords, and the fact that women on strengths Condition (London, 1896); Old Age Vol. 192 (20 July 1908), col. 1383.

12 Journal of Liberal History 60 Autumn 2008 29 See Martin Pugh ‘Working col. 1174. Class Experience and State 33 Thane, Old Age, pp. 226–31. GREAT LIBERAL DOCUMENTS Social Welfare, 1908–1914: Old 34 K. Williams, From Pauperism to Included free with this issue of the Journal of Liberal History is our latest Age Pensions Reconsidered’ Poverty (London, 1981), p. 207. pamphlet , Great Liberal Documents. Historical Journal, 45, 4 (2002), 35 The Times, 2 January 1909. This is a guide to key texts by British and foreign authors which pp. 775–96, for a discussion of 36 Hansard (5th series), House of have informed, influenced and inspired British liberal thought and the impact of pensions. How- Commons, 1909 Vol. 1 col. politics. The earliest of these documents is from 1644, John Milton’s Areopagitica, his great polemic against censorship and in favour of ever, Pugh (p. 791) overstates 1174, 1 March. free speech. The newest is Make It Happen, the latest statement of the the proportion of over-70 year 37 Pat Thane ‘The “Scandal” of vision and values of the Liberal Democrats, the first under Nick Clegg’s olds receiving the pension, per- Women’s Pensions in Britain: leadership. haps due to misunderstanding How Did it Come About?’, Through these documents readers can gain access to fundamental the sources cited (fn 83), which Jay Ginn ‘Gender Inequali- liberal ideas, theories and policy programmes as they were originally do not support his estimate. ties: Sidelines in British Pen- written. The guide provides a brief contextualisation of each one and 30 F. Rogers, Labour, Life and Lit- sion Policy’ in H. Pemberton, indicates where it can be found. erature (London, 1913), p. 140. P. Thane, N. Whiteside (eds.), Additional copies of Great Liberal Documents can be purchased at a 31 TUC Annual Conference Report Britain’s Pensions Crisis: History cost of £1.50 for Journal subscribers, or £2 for anyone else, either from (1908), 57, 194. and Policy (OUP/British Acad- the History Group’s stand at the Bournemouth Lib Dem conference 32 Hansard (5th series), House of emy, 2005), pp. 77–111. (see back page) or from LDHG, 38 Salford Road, London SW2 4BQ Commons, vol. 1 (1 Mar. 1909), (cheques should be made out to ‘Liberal Democrat History Group’; add 50p postage per copy (UK)).

Hastings facts (1) In his article on the 1908 had been involved in both Hastings by-election ( Jour- the 1906 general election Letters nal 59, summer 2008), Ian and the 1908 by-election. Ivatt incorrectly refers to the He would sometimes sing Pensions and the working young Liberal candidate, the 1906 song in support of class Robert Vernon Harcourt, Freeman Freeman-Thomas, Barry Doyle (‘The rank and scheme. The Post Office as ‘Sir Robert’; and does not the sitting Liberal MP file and the Liberal govern- was an economical means mention the interesting fact (1900–06) and against du ment crisis of 1912’, Journal of administering the reform that, later in the same year, Cros, the Tory candidate: 59, summer 1908) may be and, by freeing the elderly the thirty-year-old candidate correct in claiming that our from the humiliations of went on to succeed John Vote, vote, vote for Free- understanding of the impact the Poor Law system, it pro- Morley as Liberal Member man Thomas, of Edwardian social welfare moted a high take-up rate. for the Montrose Burghs, a Throw old du Cros in the reform has been limited It is in fact easy to under- seat which he held until 1918. sea. by evidence dominated by stand popular responses by Robert’s half-brother, Du Cros, he is no good, middle-class responses, but studying local newspapers, Lewis Vernon Harcourt, his He’ll want to tax your this is largely because his- which reported freely on senior by about fifteen years, food, torians have not properly what the new pensioners said was a colleague of Morley’s Freeman Thomas is the exploited the resources that on collecting their first pen- in the Liberal cabinet, and it one for you and me! throw light on the reac- sions and on how they coped would have been interesting tions and experiences of the with the system, and to fol- to be told whether he played Readers of the Journal might working-class beneficiaries. low the interaction between any part in the Hastings by- also be interested to learn His example of a letter by a the recipients and the system election campaign. that the by-election scenes middle-class physician only in the Post Office archives at Patrick Jackson in The Ragged-Trousered Phi- reinforces the conventional Mount Pleasant in London lanthropists, Robert Tressell’s inadequate perspective. and in the Scottish National great novel of working-class The crucial case of the Archives (better known as Hastings facts (2) life (recently dramatised on 1908 old age pensions, for the Scottish Record Office) I much enjoyed Ian Ivatt’s BBC Radio 4), are drawn example, is very revealing in Edinburgh. For details, article analysing the Hast- from the 1908 Hastings of the immense popularity see my article, ‘Working- ings by-election of 1908. by-election. The only dif- of some of the innovations, Class Experience and State From 1981 to 1986 I was ference is that in the novel and of the shrewdness and Social Welfare, 1908–1914: the constituency agent for the newly elected MP for humanity of the Liberal gov- Old Age Pensions Reconsid- the Hastings & Rye Liberal Mugsborough (Hastings) is a ernment in using the Post ered’, The Historical Journal, Association, and we had Liberal. The changed result Office as the key element in 45, 2002, 775–96. a member (a Mr Daniel the implementation of the Martin Pugh Pilcher), then aged 100, who continued on page 55

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