533 



trenchment was justified. As the revenue was elastic, and the wastage of the war had 

 been great, it was wise to fortify the position by reducing debt and thus to aid, if only to 

 aid, recovery. It is probable that the still expanding imports and exports owed some- 

 thing to this, though they dropped again in 1908, as compared with the bounteous year, 

 1907. Still, amid undoubtedly great commercial prosperity Consols were only at 83^ 

 in December 1908, and they had been as low as 82yj in prosperous 1907. During the 

 war years, however, the progress of social reform was checked, and while Mr. Asquith 

 was strengthening the finances the demand for amelioration in the condition of the work- 

 ing-classes became insistent. Hence the institution of the Old Age Pension system by 

 Mr. Asquith in 1908, followed by the provision of Labour Exchanges in 1909 and later 

 measures. Mr. Asquith had left 1,200,000 to meet the cost of the Old Age Pensions 

 during the first quarter of 1909, but it was found that 2.1 millions were required. 



The Old Age Pensions scheme was designed to supplement the Poor Law by giving 

 pensions to qualified persons of 70 years of age and upwards. As originally passed it 



did not extend to persons who had been in receipt of poor relief, but after 

 Pens/ofls. I 9 IO > by an amending Act, they were included. The chief qualification is 



that a pensioner shall not possess means above 31.105. a year (or 123. id. 

 per week) when a shilling a week will 'be payable, and a further shilling for every shilling 

 per week by which the means are shown to be less up to 53. each person, when the means 

 do not exceed 21 a year (or 8s. id. per week). A weekly 53. is the highest pension per 

 person. Up to March 1912 there were about 942,160 who had been awarded a pension; 

 but from the first the number awarded in Ireland was relatively much higher than in 

 other parts of the Kingdom. The total cost has been much higher than the original 

 estimates, and apart altogether from the extension of the Act. The first quarter cost 

 about 2,000,000, the year 1909-10 8.7 millions; 1910-11 9.8 millions; 1911-12 11.7 

 millions; and 1912-13 about 12.2 millions. It is reckoned that the services rendered 

 by other State departments to the Pension service cost 450,000 in addition. On the 

 other hand, the reduction in the number of paupers receiving poor relief should be set 

 off against this total, say 200,000 at 17 = 3, 400,000. This scheme of Old Age Pen- 

 sions was the first of the Liberal attempts to realise a constructive social reform pro- 

 gramme, the effect of which upon the finances will be noticed later. 



In April 1908 Mr. Lloyd George went to the Exchequer (though the budget that 

 year was Mr. Asquith's) and the " Social Reform programme " was further developed 

 Mr Lloyd un der him. The season of careful retrenchment was over, and the Pensions 

 George at Act was the harbinger of a still more important reform, involving increased 

 the Ex- expenditure. Under the Unemployed Workmen's Act, 1905, the Local 



Government Board had been entrusted with a sum of money annually to 

 be used in relieving distress by assisting to open relief works. For some years that sum 

 was 200,000, but for 1912 it was only 100,000, as unemployment had decreased sub- 

 stantially. This was partly due to the Labour Exchanges Act, 1909. But, apart from 

 the great reform Mr. Lloyd George had in contemplation, which took shape in the 

 National Insurance Act 1911, it was his task, from the first, to finance a Liberal social 

 programme, and this policy left its mark deeply on the revenue and expenditure from 

 1908-9 to 1912-13. Mr. Asquith had provided only for the first quarter of 1909 for the 

 cost of the Old Age Pensions; and the new Chancellor of the Exchequer had at the out- 

 set to find means to defray an expenditure which was a novelty upon the estimates. 



The total gross expenditure for 1908-9 was 152.3 millions, that for 1911-12 was 

 178.5, and the estimates for 1912-13 186.9 millions, which with a further 900,000 



foi the Navy and other supplementary demands, brought the total to 188 

 ?x7ndt r mn< li ons - Nearly 36 millions of the 38 millions of increase since December 

 1908-13. I 95 f^l therefore to be accounted for under the second Chancellorship of 



the Liberal Administration. Just as 2 millions were for postal purposes in 

 Mr. Asquith's period, so may 5.8 millions be accounted for, as the Post Office required 

 23.8 millions in 1912-13, a sum including the administration of the newly acquired 

 telephones. This comparison requires correction on the other hand; for though Mr. 



