The beginning of the Welfare State
By the beginning of the 20th century, most areas of Britain had hospital provision of some sort. However, the system was fragmented. Some were private fee-paying hospitals, some were voluntary hospitals run by charities, while others had been set up by local councils. Often the areas which needed hospitals most were least well-provided, eg the first hospital in the Rhondda Valley was not built until 1887 and had only four beds for 100,000 inhabitants.
Gradually this attitude began to change and in the years leading up to World War One, the Liberal governments of 1906–1914 introduced a series of welfare reforms to help people who fell into difficulty because of sickness, old age or unemployment. The beginnings of the modern welfare state can be traced back to this period.
The National Insurance Scheme 1911
In terms of medical care the most important of these reforms was the National Insurance Scheme, established by David Lloyd George, the Chancellor of the Exchequer. Contributions were made by workers, employers and government. Lloyd George promised 9d for 4d which meant that workers received 9d worth of cover for every 4d they paid in.
The scheme provided workers with free medical care and sickness benefits if they became ill. Though this was a major step forward, it had its limitations. It only covered some occupations and did not include the families of those covered, the elderly or the long-term sick.
In 1920, the scheme was extended to cover all workers earning up to £250 a year (except farm workers and domestic servants) though families were still not included. The scheme brought benefits to many people, but during the Depression of the 1930s it came under severe pressure.
As unemployment rose to over 3,000,000, people could not keep up their contributions to the scheme. The government also cut its contributions, further reducing the effectiveness of the scheme.
For many families in the poorer areas of Britain, the quality of healthcare deteriorated in the 1930s, as people could not afford medical care. In areas like the south Wales valleys, for example, there was a rise in infant mortality.