II.

Reasons for the Liberal Reforms

The Liberals had not come to power on the issue of social reform and poverty relief but on a number of other issues, such as popular outrage at the use of Chinese slaves in British-owned gold mines in South Africa. Nonetheless, social reform became the hallmark of the Liberal administrations of 1905 to 1915. The reason for this development has been subject to intense debate, with the suggestions ranging from the impact of the emergent Labour Party (founded in 1900 by trade unionists and socialists) on New Liberalism, the need to deal effectively with the failings of the Victorian Poor Law, and the rising concern about those whose needs were not being met by voluntary help.

A.

The Victorian Poor Law

At the beginning of the 20th century the Victorian Poor Law, as established by the 1834 Poor Law Amendment Act (see Poor Laws), was faced with enormous financial pressures. According to the 1834 Act, those seeking assistance had to submit themselves to the discipline of the workhouse. The workhouses were overseen by unions of parishes, on which sat local magistrates, Church ministers, and representatives of local ratepayers. By the beginning of the 20th century, more than two million people were falling on the Poor Law for relief during the winter months, mainly seeking indoor rather than outdoor relief, at a time when the Poor Law unions were attempting to move children out of institution buildings and into supervised cottage accommodation.

B.

New Liberalism

The influence of New Liberalism has assumed immense importance in the debate about the rise of the Labour Party and the decline of the Liberals. It is argued that Leonard Trelawney Hobhouse, John Atkinson Hobson, and David Lloyd George attempted to retain working-class support within the Liberal Party by offering a variety of social reforms and compromises to the working classes that became known as New Liberalism. It is further maintained that their prime concern was to reconcile the demands of labour with the need for Liberal Party unity, an equation that was never going to be easily arranged given Liberal reliance upon industrial and capitalist wealth. They offered conciliation for industrial conflict, public ownership to serve the demands of efficiency, and communal responsibility over sectional interests. The distinctive feature of these and other New Liberal policies is that they offered a framework whereby harmony, rather than class or sectional conflict, would be promoted. Indeed, Lloyd George stressed to the National Reform Union in 1914 that “it is better that you should have a party which combined every section and every shade of opinion, taken from all classes of the community, rather than one which represents one shade of opinion alone or one class of community alone”. (Manchester Guardian, November 7, 1914).

C.

The Failure of Philanthropy

Historians have been divided over the scale of impact that the Labour challenge had on the New Liberalism: P. F. Clarke emphasizes its importance in Lancashire and the New Liberalism (1971), and G. R. Searle and Pat Thane have thrown doubt on the importance of social reform as an ambition of the Liberals. Instead it has been argued that it was the rising level of poverty in Britain and the failure of philanthropy to tackle it that forced the state to take action. Indeed, one contemporary writer suggested in 1908 that “in the course of the last two generations the State has been forced again and again to take over the tasks for which private philanthropy had found its resources insufficient” (B. Kirkman Gray, Philanthropy and the State, or Social Politics, 1908). Yet it was the Poor Law in combination with philanthropy that presented the biggest problem. The 1834 New Poor Law offered a solution to destitution, not to poverty, and there was increasing evidence, from Seebohm Rowntree and others, that between 25 and 30 per cent of the population of England and Wales were living in a state of poverty. The revelation came at a time when the Poor Law was in serious crisis, soon to become the subject of a royal commission. Thus, concerned by the failures of philanthropy, threatened by a burgeoning Labour Party, and faced with obvious concerns about the health and well-being of the nation, David Lloyd George, Winston Churchill, and others, took the expedient step not to solve poverty but to reduce its virulence.

D.

The Royal Commission on the Poor Laws

The 1904 Inter-Departmental Committee on Physical Deterioration had already indicated its concern about poverty when it stated that “in the last resort the State acting in conjunction with the Local Authority would have for its own sake to take charge of the lives of whose who, for whatever cause, are incapable of independent existence up to the standard of decency which it imposes”. This need became even more obvious when the Poor Law was struggling to deal with the burden of destitution and poverty in Edwardian Britain. The Royal Commission on the Poor Laws (1905-1909) had been set up to examine how the Poor Law could deal with the two million people falling upon it as a result of rising unemployment. When the Royal Commission reported to the Liberal government in February 1909 it produced two reports. The Majority Report sought to retain the Poor Law as it was and to create local Public Assistance Committees, composed of elected councillors, co-opted members from philanthropic agencies, to run its services in the place of the old poor law guardians. The Minority Report suggested that the Poor Law should be broken up and run by specialist local committees or by central government, in the case of the unemployed. Neither of these reports offered a solution to the problem and it would have taken several years for anything to have been implemented. As a result the Liberal government effectively dismantled the Poor Law by removing the needy groups by a series of measures including old-age pensions, the creation of employment exchanges, the introduction of the National Insurance Act of 1911, and legislation on children. The process had begun before the Royal Commission produced its final reports, the Liberal government being fully aware of the failings of their solutions.