Health and unemployment insurance

Discuss the statement that health and unemployment insurance of 1909 may be seen as a partnership between central government and individual persons. Contributory insurance schemes were seen as a major way forward in 1908-1909. Germany was a prime example of how a contributory insurance scheme was running and many agreed it was highly successful. Lloyd George, Chancellor of the Exchequer at the time and a leading liberal found the idea if a contributory scheme very interesting. When his interests were pursued it led to the introduction of the national insurance act in 1911. This act mainly consisted of two parts, health insurance and unemployment insurance. This essay will attempt to describe both health and unemployment insurance and explain the underlying partnership it provided between central government and the individual persons.

There was many concerns in the early 1900’s about unemployment and poverty, although ‘often accused of insincerity, Lloyd George did have a genuine concern for poverty and hoped to be able to give financial security to the sick, the unemployed, the widow and the orphan’, (Fraser D (2003) The evolution of the British welfare state Palgrave Macmillan). It became evident in 1908-1909 that a contributory insurance scheme was the way to go. A model of a contributory insurance system was around in Germany since the 1970’s and seemed to be proving quite successful. Especially to Lloyd George who went over to Germany to study the system in 1908, which was also known as the Bismarck system.

Lloyd George was a liberal and chancellor of the exchequer at the time. To be the one to introduce a new idea like a contributory insurance scheme to Britain, widely suited Lloyd George as he felt he would be making a big impact and statement which would therefore get him known to not only members of society but also the more powerful members of government. The German model however was not exactly run by the state and it did not include or have any insurance scheme for the unemployed. None the less the Bismarck system was one the Lloyd George wanted for Britain. Even as far back as 1908 Winston Churchill was ‘advising the prime minister bluntly to ‘thrust a big slice of Bismarckianism over the whole underside of our industrial system’, (Fraser D (2003) The evolution of the British welfare state Palgrave Macmillan).

Winston Churchill played a huge part in the introduction of the national insurance act, especially the unemployment insurance element of it. However to introduce such schemes as health and unemployment insurance, money had to be found for financing, even though they were contributory. In 1909 it was proposed that income tax would be made bigger and the more money you earn the more you pay. Obviously this was not favourable by the people and did not seem to be the great start of the ‘people’s budget’ which Lloyd George once called it. Although financing the schemes was not the only drawback that liberals faced.

The House of Commons agreed that new proposals however the House of Lords did not. The only way the liberals could introduce the new schemes is if they got the House of Lords to deny itself and allow it. Evidently the House of Lords stance was great weakened by the 1911 parliament act, which stipulated the House of Lords could not deal with or reject a finance bill. Therefore the national insurance act comes out consisting of two parts, health insurance and unemployment insurance.

In many ways peoples themselves believed that these schemes were designed solely to benefit them, perhaps forgetting that they are indeed paying higher income tax’s to finance it. Lloyd gorge himself called it the ‘people’s budget’. He was able to argue that the national insurance act would be widely successful and socially acceptable with reference to the Bismarck model. They also represented a way to avoid big expenditure reports according to Lloyd George.

It seemed that the insurance policies were to be a major step in establishing a relationship between the people and the state. Lloyd George argued it would give people a saving outlook and that it would just make people feel as if they were saving and getting back some when they were in need. He argued that health and unemployment insurance would promote and develop social integration because everyone had to contribute and it was therefore something that all of society had to do together and also that it would promote a saving habit. However the construction of each insurance scheme was very different.

The health insurance scheme was the more complex and diverse of the two. It had a lot of vested interest in it and was seen to be ideologically progressive. Many did not think that the schemes should have been introduced …

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