Labour Exchanges Act 1909

• At the beginning of the 20th century, people were beginning to understand that within a capitalist economy, there were bound to be periods of trade depression when people couldn't find work. The problems too, was underemployment, as men and women doing casual work competed with each other on a daily basis.
• The Liberal government broke down the problem into 2 main parts:

  • finding work
  • insuring against the loss of that work due to illness and unemployment
• Winston Churchill's principal adviser at the Board of Trade was William Beveridge. He was influenced by the work of Beatrice and Sidney Webb and believed that workers needed help finding work and support when it wasn't available, rather than the punishment of the workhouse. He therefore heavily influenced the Labour Exchanges Act.
• The Labour Exchanges Act was aimed at the decasualisation of labour. It set up a series of labour exchanges that were intended to help the unemployed find work. In February 1910, 83 labour exchanges were opened, and by 1914, there were over 450 throughout England and Wales. Although employers were worried they would provide an excuse for those unwilling to work because they were 'still looking' and workers afraid it would be used to recruit blackleg labour during a strike, it was a great success.
• The Webbs wanted to make labour exchanges compulsory, believing it would allow the government to organise the labour market to benefit workers and the economy. They then believed that unemployment insurance could be voluntary. However, Churchill and Lloyd George approached it the other way around, wanting to make labour exchanges voluntary but unemployment insurance compulsory.
• However, only by 'signing on' at a labour exchange would it be known that a person was unemployed and could qualify for unemployment payments. This connected the Labour Exchanges Act (1909) with the National Insurance Act (1911).