The Liberals in Power: III Old Age Pensions

Pensions were the main plank of the 1908 budget. The pensions bill received its second reading in the Commons on 15 June 1908. It was introduced by Lloyd George (though Asquith had devised the scheme) and came to be popularly known as ‘the Lloyd George’. The measure was a disappointment to those who had wanted universal pensions. It was finally agreed that: British citizens over 70 with incomes of up to £21 pa would receive the full non-contributory pension of £13 p.a. (5s per week) for single persons and of £19.10.00 (7s. 6d. per week) for married couples. Incomes of up to £31.10s would qualify for a pension reduced by one shilling a week for each shilling of income above £21. The minimum pension would be one shilling. Those with incomes as low as £26 p.a. would receive only 3s a week (this caused Labour members to vote against the amendment). Asquith estimated that about half a million persons would qualify for the pensions and that the annual cost would be £6m; but by 1912 the government was spending £11.7m. and by 1914 £12.5m.

The pensions provisions reduced some peers to paroxyms of anger. The former Liberal leader, Lord Rosebery described them as

'so prodigal of expenditure as likely to undermine the whole fabric of the Empire'.

The scheme’s main defect in the eyes of its critics was the high qualifying age. The Labour Party began campaigning for improved pensions: a minimum of 5s non-means-tested and applied to men and women of 60. But for all its inadequacy it was a milestone in social legislation, since it made it easier for the aged poor to avoid the workhouse and avoided the language of opprobrium associated with the poor law.

On 1 January 1909 ('Pensions Day') c. 490,000 people drew a pension – a relatively low number because of those disqualified from entitlement (paupers, some criminals, aliens and the wives of aliens and those deemed guilty of ‘habitual failure to work’). Most of the recipients were women. All had to learn the new procedure of completing forms available at the post office. The costs rapidly escalated and the numbers of pensioners rose after the removal of the pauper disqualification in March 1911.

Other social legislation
Between them Lloyd George and Churchill made major social innovations: the establishment of labour exchanges and trade boards (Churchill), the introduction of health and unemployment insurance (Lloyd George). The Board of Trade also produced the Trade Boards Act of 1909, which set up boards for the four trades in which, largely owing to the lack of trade unions, ‘sweated’ labour was found to be prevalent. The boards were to fix minimum wages, which then had to be confirmed by the Board of Trade. In 1908 the Coal Mines Act had established a statutory eight-hour day for miners, the first occasion in which the working hours of adult males had been limited by statute. However this was poorly received in some collieries where the miners were already working less than eight hours.