National Insurance Act 1911

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The National Insurance Act 1911 is an Act of Parliament of the United Kingdom, passed in 1911. The Act is often regarded as one of the foundations of modern social welfare in the United Kingdom and forms part of the wider social welfare reforms of the Liberal Government of 1906-1914.

The Act provided for a National Insurance scheme with provision for time-limited unemployment and medical benefits. The scheme was to be based on actuarial principles and it was planned that it would be funded by a fixed amount each from workers, employers and the government. The scheme was restricted to particular industries and made no provision for dependents. By 1914 2.3 million were insured under the scheme.

A key assumption of the Act was an unemployment rate of 4.6%. At the time the Act was passed unemployment was at 3% and the fund was expected to quickly build a surplus. Under the Act, employees contributions to the scheme were to be compulsory and taken by the employer before the workers salary was paid.

Britain was not the first country to provide insured benefits; Germany had provided compulsory national insurance against sickness from 1884. The Act was broadly welcomed by all political parties. It was, however, initially opposed by some trade unions who operated their own insurance schemes and friendly societies.

The Act was significant as it removed the need for unemployed workers, who were insured under the scheme, to rely on the stigmatised social welfare provisions of the Poor Law. This led to the end of the primacy of the Poor Law as a social welfare provider.

A key figure in the implementation of the Act was Robert Laurie Morant.