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Why were family allowances introduced in 1945?

Categories: FamilyWelfare

By 1941 Beveridge grew greatly concerned about state support for families, this led him to writing the influential Beveridge Report of 1942 to deal with increasing poverty and the shortcomings of the social security system. He found that the social security scheme was insufficient; he wanted to alleviate child poverty, as well as women’s poverty, due partly to the gender division of labour. Beveridge also wanted to equalize benefits for men and woman partly because the system had been set up in such a way as to support husbands, while assuming wives were dependents.

Beveridge pushed the view that the family is an economic unit and, he felt that women should be encouraged to care for their children, thus family based benefits should be made available. (Beveridge, 1941, class notes)

Beveridge recommended The Family Allowances Act for all families in need, this allowance would be paid out of state taxation, for every child after the first child. Beveridge believed that benefit levels should cover subsistence at the 1946 level.

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Importantly, Beveridge wanted “to attain and maintain full employment”1, and believed that families required financial aid in order to attain this goal and thereby boost the economy as a whole.

Furthermore, Britain had suffered serious economic problems during the inter-war period. Amongst others this included the effect on the labour force of deaths and casualties sustained in the war, resulting in a significant loss of manpower , and a distortion in the economy as Britain focused on industries that were more relevant to the war, i.

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e. shipbuilding; leading to a loss of customers, employment and diversity. Furthermore, war related industries began to decline, resulting in massive job cuts. Britain had also accumulated 1 billon pounds of debt, owed mainly to the United States2, leading to more job cuts and increased unemployment rates. This caused concerns about poverty and the standard of living, supported by the poverty level findings of Rowntree and Booth.

The Beveridge Report was thus aimed at eradicating the five great evils of the time: want, disease, ignorance, squalor and idleness, all seen to affect families. (Beveridge report, class notes) A series of legislative measures under the postwar Labour government began to translate this vision into concrete action. One of these was the 1945 Family Allowances Act. Aimed at all families, this act moved from a selective to a universalist notion of welfare provision and is often regarded as the blueprint for the modern welfare state3.

Why was the Unemployment Assistance Board set up in 1934?

The sudden growth in unemployment in the aftermath of the war seems to have taken the government by surprise. It was their belief that the problem of unemployment was only temporary and that once international trade was readjusted, the current domestic situation would improve. However as time went by it became obvious that this would not happen.4

Britain’s share of world exports had declined significantly from 14% in 1914 to 9.85% in 1937. Additionally, by 19215 , 14% of the insured workforce was unemployed and the reserves of the fund had shrunk to 1 million pounds. Therefore by the 1920’s there was some recognition that this problem surpassed the normal operation of trade cycles, and companies began to rationalise and amalgamate. Furthermore, the general strike of 1926, the ‘Geddes axa’6 , and the crash of Wall Street, led to the worst unemployment figures in Britain’s history.

The previous unemployment act of 1911: National Insurance Act, had set the framework for relief policy, but the 1920: Unemployment Insurance Act had not raised unemployment sufficiently. Although the latter had included insurances for a larger proportion of manual labourers who earned less than �250 per month, significantly servants and agricultural workers were excluded.

By 1931 insurances were costing the state �37 million per year, equaling a quarter of their social services expenditure. By 1934, the deficit between N.I. contributions and amounts paid out amounted to �75 million. Between 1921 and 1939 unemployment had risen to 1 million, subsequently never falling below the that mark. In 1929 registered unemployment was 10.4% , by 1932 it rose to 22.1%. The 1930s saw unemployment reaching 3.8 million and 6-7 million families “on the dole.” 35% in the coal mining industry, and a whopping 62% in the declining shipbuilding industry were unemployed. Unemployment rates were being exacerbated by the declining post-industrial industries of the north. Thus workers in particular fields were more vulnerable than others, and joined older workers, the unskilled, women and young workers as requiring support. By the 1930’s, government became concerned with stable long-term unemployment, which reached about 16.4% by mid 1932.

These points therefore became the basis for the setting up of the unemployment assistance board, whose job it was to oversee the points set out by the Unemployment Assistance Act. The creation of a new body was required to take responsibility for both the former poor law claimants and those in receipt of transitional payments7 (those assumed to be temporarily unemployed).

What were the main causes of poverty in Britain during the year’s c. 1880-1914?

Poverty in Britain has a long history, but was not recognized until the social and economic events of the 18th and 19th centuries led to a dramatic rise in what was labeled by the state as the poverty line. Booth’s definition of poverty in 1882 served as the basis on which contemporary levels were measured: ” …The ‘poor’ are those whose means may be sufficient, but are barely sufficient, for decent independent life; the ‘very poor’ those whose means are insufficient for this according to the usual standard of life in this country.”

Booth, reflecting 18th century thinking, described the cause of poverty as a weakness of character. People who could help themselves were praised, those who could not were seen as failed and regarded with a degree of contempt. Society viewed poverty as a threat, thus when ‘liberals’ came into office, they did not address it but kept a “laissez- faire” attitude: “Laissez-faire, although never systematically applied in the field of social policy, was strongly entrenched as an attitude of mind”.

In the early 18th century, The Old Poor law was established as minimal support for the poor, by the end of the 18th century the system was under great pressure and was failing. Population growth meant more people had to be housed, supported and fed, prices of food also rose, while wages did not, this caused even working class people to experience poverty as they were unable to feed their families. The economy was also undergoing extreme booms and slumps, which they could not control, this meant many jobs were at risk. More competition in industry meant that other counties were supplying goods cheaper.

Overall, poverty was made worse by various factors including;

* Old age – pensions were not given much financial support but where expected to work, no pension scheme was set up.

* Illness- people where not given sick pay, but was left to survive with no wages while sick or dismissed from employment, also no NHS was available.

* Low wags – people where paid minimum wages which where not increasing with state inflation.

* Unemployment- this was because reasons listed above and the loss of major breadwinners.

Word count 362


* Booth, C., Life and Labour of the people in London, Vol. 1, (1982 edition) (class handouts).

* Derrick Murphy, Britain 1914-2000, institute of contemporary British History, university of London.

* Jones, K., the making of the Welfare State.

* Rose, M., The relief of poverty, 1834-1914, (second edition: (1986) (class handouts).

* Oppenheim, C,. (en) an inclusive poverty fifty’s of tackling poverty. (ippr: 1999) (class handouts).


* A policy by which the government cut subsidies and public sector employment.

* Poverty to social exclusion: mass unemployment.

* Poverty to social exclusion Yr1 Nov 2003, week 10.

* Poverty to social exclusion, The ‘Rediscovery of Poverty’ c. 1950s-1980s.

Electronic References:





word count: 1231, excluding footnotes and bibliography.

TINA :350 for each question some question can have less and the other can have more. The assignment most not exceeds 1000 words in total, (excluding footnotes and bibliography).

14, Why were family allowances introduced in 1945?

10, Why was the Unemployment Assistance Board set up in 1934?

4, What were the main causes of poverty in Britain during the year’s c. 1880-1914?

1. Question 14: Why were family allowances introduced in 1945? Pages 1-2

2. Question 10: Why was the Unemployment Assistance Board set up in 1934?

Pages 3-4

3. Question 4: What were the main causes of poverty in Britain during the year’s

c. 1880-1914? Pages 5-6

4. Bibliography, Pages 7-8

5. Word count, page 8.

1 notes taken from lecture

2 Britain 1914-2000 page 36

3 Class notes, poverty to social exclusion: mass unemployment.

4 Class notes :A policy by which the government cut subsidies and public sector employment.

5 K. Jones: the Making of the Welfare State.

6 Class notes: A policy by which the government cut subsidies and public sector employment.

7 Class notes, poverty to social exclusion: mass Unemployment, pg5

8 C. Booth, Life and Labour of the people in London, Vol. l, (1982 edition), p33

9 M.Rose, The relief of poverty, 1834-1914, (second edition : (1986)

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Why were family allowances introduced in 1945?. (2020, Jun 02). Retrieved from

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