National Insurance Act 1911

The National Insurance Act 1911 received royal assent in December 1911.

It followed a lengthy national debate and the Royal Commission on the Poor Laws, set up to work out the best way to alleviate the economic and societal hardship faced by the poor. A majority and minority report were published in 1909. The minority report, largely authored by Sidney and Beatrice Webb, had the longer lasting impact. William Beveridge was an adviser.

The National Insurance Act 1911 created a national system of insurance to protect working people against loss of income relating to sickness or unemployment (thereby reducing the demand on Poor Law assistance). This Act is forever linked with the name of Lloyd George, who was Chancellor of the Exchequer.

The provisions relating to health and those relating to the unemployment insurance were provided for separately.

Part 1: Health insurance

Employees aged between 16–70 years earning less than £160 per year (and manual workers earning above this) were required to be insured. Contributions were paid on a sliding scale.

Men earning greater than 2 shillings (s) and 6 pence (d) per week were required to contribute 4d per week and their employers 3d. Women paid less as their benefits package was lower. There were sliding scale rates for those earning less than the threshold, with greater employer contributions and parliamentary subsidies.

The insurance provided sickness benefit (10s per week for men and 7s.6d for women) for a period of 26 weeks, as well as a range of other benefits, including medical treatment and assistance, and treatment in a sanatorium for tuberculosis.

The Act required insurance committees to make a list of doctors willing to attend those in receipt of medical benefit. Insured persons would be able to choose from the doctors on the list.

Part 2: Unemployment

In parallel, the Act provided for unemployment insurance. Workmen in insured trades such as building, construction and mechanical engineering were required to be insured. For each week of employment, a workman would need to contribute 2½d, as would his employer. In periods of unemployment, an insured person would receive 7s a week for up to 15 weeks.