The Edwardians
Page 16
The selection of the Royal Commission’s members, discussed at the Cabinet on 23 June 1905, was ‘the subject of most anxious deliberations’.3 The result was the appointment of genuine experts in the subject but, with three exceptions, experts who held the view that the principal object of organised charity should be the moral improvement of those who received it. C. S. Lock, Helen Bosanquet and Octavia Hill were all prominent in the Charity Organisation Society which formally espoused that philosophy The minority was led by Beatrice Webb. She conducted what at first was a single-handed campaign against the Local Government Board’s attempt to persuade the Commission that it should ‘recommend reversion to the principles of 1834 … [in order] to stem the tide of philanthropic impulse that was sweeping away the old embankment of deterrent tests for the receipt of relief’.4 Eighteen thirty-four was the year of the Poor Law Act. The evidence given to the Commission by J. S. Davy, the head of the Poor Law division of the Local Government Board, confirmed the Establishment’s determination to retain the principles of punitive relief. Asked whether the deterrent tests, laid down by the Poor Law Amendment Act, were suitable to a pauper who had lost his job because of a trade depression, he replied in a paraphrase of the 1834 report: ‘A man must stand by his accidents. He must suffer for the general good of the body politic.’5
That view was wholly consistent with the philosophy on which the Poor Law had been based. To be eligible for ‘relief’, a pauper must suffer ‘first the loss of personal reputation (which is understood by the stigma of pauperism itself), second the loss of personal freedom (which is secured by detention in a workhouse) and third the loss of political freedom (which is secured by disenfranchisement)’.6
The success with which the workhouses had pursued those aims was confirmed by evidence to the Women’s Local Government Society* in 1909.
Women nosed around (often literally so) those sanitary facilities and ‘parts of the hospitals and workhouses which the gentlemen very rarely visit’ … Mrs Evans suspected that the ophthalmia and ringworm she noted spread because fifty-six girls bathed in one tub of water, shared half a dozen towels, five dirty brushes and two and a half broken combs between them. Another workhouse, they found, had two small hand basins for 120 and WCs without paper which were locked at night … Dunmore in 1904 swarmed with rats … Billericay sick, in 1905, were still sleeping on the floor. Louisa Twining found euphemistically described ‘dust heaps’ and stained and dirty linen lying around the wards.7
By the time that the Royal Commission reported in 1909, the great Liberal landslide had swept away the Unionist government and put in its place an administration more likely to be sympathetic to the inevitable outcome of Beatrice Webb’s disagreements with the bureaucrats of the Local Government Board – a minority report. The majority report, signed by the chairman and fourteen other members, wanted, in effect, a more compassionate Poor Law. Some of the stigma should be removed, it argued, by a change of name as well as a change in attitude towards the types of social need which did not, under the 1834 Act, qualify for relief. The minority report – signed by Beatrice Webb, George Lansbury and Francis Chancellor, a future bishop of Birmingham – wanted to replace the old Poor Law with a completely new system of ‘assistance’. The underlying principle of its recommendations was that poverty was more likely to be the result of the way in which the economy was organised than of the moral failings of the unemployed. There is no doubt that the three Fabian Socialists wanted ‘better people’. But they believed that improvement was more likely to come about by changes in society than by individual exhortations and intimidation.
Both the minority and majority reports proposed what amounted to the creation of new institutions for the distribution of ‘assistance’. The elected boards of guardians – which defined destitution in a variety of different ways and judged ‘need’ against criteria which varied only in degrees of severity – should be abolished. Their duties ought to be assumed by local authorities which distributed help – no longer to be thought of as ‘relief’ – according to nationally determined standards. The minority report also recommended a more radical organisation. Separate departments within the national government should accept responsibility for supervising the assault on the different causes of social distress – ill health, old age and fluctuations in the labour market. The notion that able-bodied men should, during periods of economic depression, receive government help in the search for jobs was near to revolutionary. The minority report went further. It advocated a Ministry of Labour which, as well as supervising labour exchanges and organising retraining programmes, actually invested in public works. Four million pounds should be provided each year to spend as necessary to see the economy through periods of slump.
It is not surprising that the minority report – anticipating both Keynesian theories of cyclical management and what amounted to some of the administrative structure of the mid-century welfare state – should have been unacceptable to the Edwardian Liberal Party and the government which it formed in 1906. But the rejection of the majority report – or at least its neglect – needs some explanation. It is provided by the character and career of John Burns, President of the Local Government Board and the first working man to become a Cabinet Minister.
John Burns was by trade an engineer and, by early conviction, a Marxist Socialist. In 1884 he had joined the Social Democratic Federation, but four years later formed the Independent Battersea Labour League and, as its nominee, became a member of the London County Council. Eight years later, he became Battersea’s Member of Parliament but refused either to be called ‘Labour’ or to be associated with the trade union group in the House of Commons. When Campbell-Bannerman formed his government in 1905, he offered Burns the Presidency of the Local Government Board. Burns replied, ‘Well done, Sir ‘Enry. That’s the most popular thing you’ve done yet.’8 Lord George Hamilton, the chairman of the Royal Commission, believed that, had the Board of Local Government been led by any other Liberal of the day, the majority report (certainly) and the minority report (possibly) would have been implemented.
Two years before he joined the Cabinet, Burns had set out his personal social philosophy. It might have been designed to prepare the way for the Royal Commission’s minority report. ‘Individual effort is almost relatively impossible to cope with the big problem of poverty as we see it. I want the municipality to be a helping hand to the man with a desire of sympathy, to help the fallen when it is not in their power to help themselves. I believe the proper business of the Municipality is to do for the individual, merged in the mass, what the individual cannot do so well alone.’9
The syntactical inadequacy of that declaration cannot obscure its progressive message. But office changed Burns’s view of life. He became absolutely certain that the institutions of the state should not ‘supersede the mother and they should not, by over-attention, sterilise her initiative and capacity to do what every mother should be able to do for herself’. The practical result of his conversion was an enthusiasm for the workhouse in preference to outdoor relief. Beatrice Webb had no doubt about its cause. ‘Burns is a monstrosity, an enormous personal vanity feeding on the deference of flattery yielded to patronage and power. He talks incessantly and never listens to anyone except the officials to whom he must listen in order to accomplish the routine work of his office. Hence he is completely in their hands and is becoming the most hidebound of departmental chiefs.’10
Fortunately, other members of the Cabinet were of a more independent turn of mind. Prominent among them was Winston Churchill – aristocratic by origin and Conservative by initial political conviction but, by nature, an active rather than a passive minister. In the early years of the century, as he adjusted his personal philosophy to accommodate the Liberal Party which he had joined, he defined himself as ‘both a collectivist and an individualist … The existing organisation of society is driven by one mainspring – competitive selection … I do not want to see impaired the vigour of competition, but w
e can do much to mitigate the consequences of failure … We want to have free competition upwards. We decline to allow free competition to run downwards.’11
In 1908, Winston Churchill had been promoted from Undersecretary of State for the Colonies to President of the Board of Trade. A year earlier he had shown an interest in domestic issues by his support for the Eight Hour Bill. That proposal to limit the coalminers’ working day was welcomed as much by the small colliery owners – who wanted to restrict the big pits’ output of coal – as it was by the miners. But Churchill chose to represent it as a triumph of the working man:
The general march of industrial democracy is not towards inadequate hours of work but towards sufficient hours of leisure … Working people, all over the country, are not content that their lives should remain an alternative between bed and the factory. They demand time to look around them, time to see their homes by daylight, time to see their children, time to think and read and water their gardens – time, in short, to live.12
That speech, improbably enough made to a miners’ gala in the Rhondda Valley, set the tone of his two years at the Board of Trade. Inclination and necessity coincided. Because of adverse movements in the terms of trade, exports, and therefore employment, were in decline. The Tory solution was a tariff to protect domestic industry. Labour talked windily about ‘the right to work’. The Liberals needed a more practical alternative.
The progressive fashion of the time was to examine and benefit from the experience of Imperial Germany. Thirty years earlier, the Foster Education Act had been profoundly influenced by the German example, and Balfour’s attempts to create a national network of secondary schools (which culminated in the 1902 Act*) was prompted by the knowledge that Berlin promoted training with an enthusiasm which London would have dismissed as dangerously collectivist. As the Royal Commission on the Poor Law trudged through its weary weeks of evidence, social scientists naturally looked to Germany to see if it offered yet another example of how progressive governments behaved.
In many ways, Germany was so far ahead that its example disheartened rather than encouraged emulation. Germany protected twelve million of its citizens against the perils of sickness disability and old age through schemes in which the potential beneficiary contributed towards the cost. The majority report of the Royal Commission was agnostic about financing social policy through the insurance principle, and the minority report was strongly antipathetic. But insurance was not the only policy with which Germany combated unemployment. The Germans believed in labour exchanges matching supply to demand. William Beveridge, an Oxford social scientist and Morning Post journalist, went to Germany to find out what Britain had to learn. He was confirmed in his view that periods of unemployment reduced the quality of the labour force. National efficiency required the government to improve the working of the labour markets. Germany also taught him another lesson. What he saw there made him a complete convert to the idea of national insurance as protection against every social emergency. It was the principle on which he built the report which, forty years later, became the foundation of the welfare state.
During the autumn of 1907, Beveridge had related the German example to British experience by analysing the unemployment statistics which were collected under the provisions of the 1905 Unemployed Workmen’s Act. The results made new converts in the Board of Trade. On 6 April 1908, officials of that department gave evidence to the Royal Commission ‘in favour of a voluntary system of labour exchanges combined with experimental schemes of compulsory unemployment insurance’.13 It took the new President three months to make up his mind that he shared the view which Beveridge had made irresistible to his officials. In July 1908 Churchill told Hubert Llewellyn Smith, his permanent secretary, that he proposed to promote a network of voluntary labour exchanges – in advance of the Royal Commission’s report. Beveridge wrote an explanatory memorandum which was circulated to the Cabinet over Churchill’s name. The President of the Board of Trade was not altogether motivated by ideological and intellectual conviction. The recently formed Labour Party had introduced an Unemployed Workers Bill in 1907 which the government had opposed and defeated. Churchill wanted the trade unions to be on the side of the Liberal Party.
In December 1909 a second memorandum, again the work of Beveridge, set out the outline of a bill which would simultaneously encourage the creation of labour exchanges and introduce unemployment insurance. Churchill had become convinced that the two policies must go hand in hand.
The establishment of Labour Exchanges is necessary for the efficient working of the insurance scheme. For all foreign experiments have shown that a fund for insurance against unemployment needs to be protected against unnecessary or fraudulent claims by the power of notifying situations to men on benefit as soon as those situations become vacant.14
On the other hand:
Labour exchanges will always be most seriously hampered in their work as long as they have any apparent association with the direct relief of distress. As instruments of industrial organisation, they need industrial management. The central supervising authority should be the Board of Trade.15
Churchill, as well as proposing a revolutionary new social strategy, was suggesting that he assume powers which were naturally the preserve of the Local Government Board. And he was also trespassing on territory which Lloyd George, at the Treasury, intended to occupy. But the two men, despite the disparity in their origins and temperaments, were, in effect, to become the partnership that provided the emotional energy that drove on the social revolution.
Lloyd George set out his principles in the clearest possible terms. ‘I should like to see the state embark on various novel and adventurous experiments … I look forward to the establishment of minimum standards of life and labour. I do not think that Liberalism can cut itself off from this fertile field of social effort.’16
Churchill was clearly the junior member of the partnership. After discussion with the Chancellor of the Exchequer, he beat an uncharacteristic but strategic retreat. Unemployment insurance would be left for inclusion in Lloyd George’s general scheme of comprehensive social insurance. But that did not prevent Churchill from bombarding Mr Asquith, the Prime Minister, with his ideas.
The need is urgent and the moment ripe. Germany, with a harder climate and less accumulated wealth, has managed to establish tolerable conditions for her people. She is organised not only for war but peace. We are organised for nothing except party politics. The Minister who will apply to this country the successful experience of Germany in social organisation may or may not be supported at the polls, but he will at least have a memorial which time will not deface.17
He went on to set out ‘the series of measures’ which he regarded as bipartisan. Since they included ‘railway amalgamation with state control and guarantee’ it is unlikely that his ‘big slice of Bismarckianism’ would have received the bipartisan welcome for which he hoped. Indeed – since their result, whatever their object, would have been an increase in the power of the state – there is no reason to believe that they were welcomed by Asquith. For the time being, the Prime Minister was content for the President of the Board of Trade to promote the creation of labour exchanges. Indeed he probably realised that resistance was not within his power. Winston Churchill, with all the impetuosity of youth – he was thirty-four – had written to Lloyd George: ‘If we stand together we ought to be strong enough either to impart a progressive character to policy or, by our withdrawal, to terminate an administration which has failed in its purpose.’18 We do not know how the Chancellor of the Exchequer reacted to the notion that he should be ready to resign and bring the government down. Fortunately such extreme action was not necessary. The social revolt drove on.
Churchill encouraged the bipartisan acceptance of that part of his grand design by describing it in one way to the employers and another to the trade unions. The employers feared that labour exchanges would give their workers an undesirable degree of independence by demonstrating
that if they lost one job they could quickly obtain another. They were assured that men who were discharged because of misconduct would not receive sympathetic treatment. The trade unions suspected that the state would become an agency for recruiting blackleg labour to replace striking workers. They were placated by an amendment to the bill which guaranteed that no worker would be penalised by a labour exchange for refusing to accept a vacancy created by a trade dispute or for rejecting an offer of employment at lower rates than those which had been negotiated by the appropriate trade union. The technique of giving ‘answers to the employers which were directly contrary to those given to the unions’ worked.19 When the time came for Churchill to announce his proposals to Parliament, the House of Commons was bitterly divided over Lloyd George’s budget and the general scheme for social insurance which it contained. But F. E. Smith, one of the most rebarbative members of the Conservative front bench, welcomed Churchill’s scheme and promised an easy passage to the bill, which gave it legislative effect. The first labour exchanges were opened on 31 January 1910.
Winston Churchill, with all the enthusiasm of a recent convert, had become not only a Liberal but a ‘new Liberal’. The phase did not last for long. But for his two years at the Board of Trade and at least part of his time at the Home Office after his second promotion, he was the main exponent of the ‘constructive radicalism’ which Gladstone – ten years after his death, still a major influence on Liberal thinking – so deplored. Churchill’s enthusiasm for active intervention in the economy was confirmed by his determination to improve wage levels in what was called ‘sweated industries’ – an initiative concurrent with the proposals to encourage the creation of labour exchanges and one which, although less prominent in the Churchill biographies, was more important in terms of the government’s acceptance of social responsibilities.