Monday, 10 March 2008

The Liberals 1911-14

Strange Death?
George Dangerfield has famously written of the ‘strange death of Liberal England’, Roy Jenkins in his biography of Asquith about the government's ‘strange ailments’. The extent of the government’s problems can be seen from the summer of 1911. The government was in the middle of the Agadir crisis (to be looked at later) and a railway strike which paralysed the North and the Midlands. This is symptomatic of a rash of troubles that beset the Asquith government in the years before 1914.

To make matters worse, during 1912 and 1913 the authority of the government was diminished by the Marconi scandal, which involved four ministers: Lloyd George, Rufus Isaacs the Attorney General, Herbert Samuel, the Post-Master General, and the Master of Elibank, the Chief Whip. Both Lloyd George and Isaacs had engaged in share transactions in the American Marconi Company, which while not dishonest, were unwise, as the government later awarded contracts to the British Marconi Company. Because two of the ministers involved were Jewish, the investigation was unpleasantly tinged with anti-Semitism.

But perhaps these should not detract too much from the government’s impressive record on social reform. [The information below is indebted to G.R. Searle, A New England? Peace and War, 1886-1918 (Oxford, 2004).]

Further Social reform
Labour exchanges: Both Lloyd George and Churchill claimed the credit for having introduced the principle of social insurance. In July 1908 Churchill appointed William Beveridge (left), a temporary civil servant in his department to assist in the setting up of labour exchanges. In February 1909 he announced in the Commons that he would introduce a national system of voluntary labour exchanges. These came into operation in 1910 controlled by a department in the Board of Trade of which Beveridge was the director.

The National Insurance Act of 1911 was really two separate Bills which for technical reasons had been amalgamated:

(a) Health insurance was an ambitious and controversial scheme. Lloyd George conceived it as a way of reducing one of the great causes of poverty, ill-health in the bread-winner. The Poor Law provided a major element in the medical services available to the five sixths of the population living in households of less than £160 pa. More than half the beds in public hospitals were in Poor Law infirmaries. To do away with the existing system meant complex negotiations with the Prudential Insurance, the Friendly Societies and the BMA. When the scheme was introduced in May 1911 it covered all insured workers between the ages of 16 and 70 earning £160 pa (the income tax threshold) or less. In return for contributions of 4d a week from men and 3d from women (as well as 3d from the employer and 2d from the state) it provided sickness benefit at 10s a week for men, 7/6d for women for the first thirteen weeks of sickness then 5s for the next thirteen weeks. In addition the Act covered the cost of medical treatment from a panel doctor. For the long-term sick there was a disability benefit of 5s. Two further fringe benefits were a maternity benefit of 30s and admission to sanatoria for TB sufferers.

The Conservatives opposed the scheme and made some political capital out of the unpopularity of stamp-licking. It was also unpopular with the socialist Left, who objected to the contributory principle as a tax on poverty, though the Parliamentary Labour Party was divided.

Over 12 million contributors started to buy stamps, 14,000 out of 20,000 GPs accepted panel practice. The claims for sickness benefit, particularly from women, turned out to be much higher than anticipated. This all involved an unprecedented involvement of the State in the lives of individuals and a consequent increase in bureaucracy. It went profoundly against the tenor of traditional Liberalism and led to Hilaire Belloc’s resignation from the party. Many middle-class people were profoundly alienated and National Insurance split the Labour and socialist ranks with many objecting to the element of compulsion.

(b) Unemployment insurance: This was created by Churchill and was a compulsory scheme, largely based on the German model, and applied to a limited range of trades particularly exposed to cyclical fluctuations, mainly building and construction. It was contributory, with payments of 2 ½ d each from workers, employers, and the State. In their final form they amounted to 7s a week payable for up to 5 weeks in any one year. The scheme was largely administered through the trade unions but it also made use of the Labour Exchanges which supplied the mechanisms which could test whether the applicant was genuinely seeking work.

The first contributions under the Act were paid in on 1 July 1912 and six months later the first benefits were paid out. As the scheme was limited to about 2 ¼ million men employed in only a few trades it could not have dealt with cyclical unemployment over the economy as a whole and in the inter-year years it proved inadequate to deal with the higher number of jobless consistently experienced.

Trade union militancy
An element in the Liberal espousal of welfarism had been the desire to pre-empt socialism. But parliamentary measures cut little ice with many on the left. From 1906 membership of socialist bodies rose and there were many tensions between these bodies and the Labour Party in Parliament, which worked in tandem with the Liberals. This Lib-Lab alliance was weakening in the constituencies, where the Miners’ Federation was becoming increasingly influential, and Liberals and Labour began to fight each other in by-elections.

The Trade Disputes Act:As a concession to Labour, Lloyd George provided for the payment of a salary of £400 go MPs in his 1911 budget. The Trade Disputes Act of 1913 enabled unions to raise a distinct fund for political purposes, subject to contracting out by individual members (in other words relying on apathy!). In March 1914 when a general election appeared imminent, MacDonald and Lloyd George began to discuss the possibility of another electoral pact, but they would have had difficulty selling this to their respective grass-roots.

Strikes: Between 1910 and 1914 an increasing number of days were lost through strike action. One of the most militant areas was South Wales. The implementation of the Eight Hour Day in 1908 added to tensions. During rioting at Tonypandy in the autumn of 1910 a man died from injuries sustained in hand-to-hand fighting with the local police. It was at this point that Churchill, now Home Secretary, ordered troops into the district to assist the police. In 1912 there was a national miners’ strike over a minimum wage. This was the most serious strike the Liberal government faced. Grey said during a cabinet meeting:
‘We are dealing with a condition of Civil War’.
South Wales, and especially its mining communities, was also an area where syndicalism made headway. The home of syndicalism was France and the central idea of the movement was to put economic or ‘direct’ action in place of the political action of the proletariat postulated by Marx.

In 1911 there were the great dockers/seamen’s, and railwaymen’s strikes. The militancy of the rank and file, and the (limited) rioting and looting, took union leaders by surprise. In Liverpool soldiers deployed in support of the police opened fire, killing two people. For four days in 1911 there was a national railway strike, which was only ended by Lloyd George’s formidable powers of persuasion. But the strike established the railway workers became along with the miners the most powerful element in the trade union movement.

The Triple Alliance: The final phase in the development of the trade union movement came in 1914 with the proposal for a Triple Alliance of miners, railwaymen and the National Transport Workers’ Federation. The main proposal for co-ordination was that the three unions should arrange to terminate their contracts at the same time. Although this looked like a move to the syndicalist idea of a general strike, in fact it was as much a move to pre-empt uncontrolled action from below.

Between 1910 and 1914 trade union membership had increased from 2.5 to over 4 million, and this was to form merely a base for a remarkable expansion during the war years.