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 and 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.
Employees aged between 16 and 70 years old earning less than £160 (and manual workers) were required to be insured. Contributions were paid on a sliding scale and women were paid less as their benefits package was lower. The insurance provided sickness benefit 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.
In parallel, the act provided for unemployment insurance. Workmen in insured trades such as building, construction and mechanical engineering were required to be insured.