In order to understand the capacity for state action we need also to consider the way in which the state responds to different forms of dissent. The paper approaches this question through a study of the state’s response to the National Unemployed Workers’ Movement (NUWM) during the inter-war period in Britain. It draws on archival research from across the United Kingdom in order to argue that the governing strategy of interwar British administrations viewed the NUWM as a form of political activity that it was necessary to exclude in order to ensure political stability and governability. The case study also provides important insights into the question of the role of the state and the degree to which economic necessity translates into political necessity. In addition, the case study discusses the role of stigma as a disciplining mechanism deployed through the welfare state process, as part of a more general attempt to divide the working class between those (unionised) workers who benefited from the welfare policies adopted and those (un-unionized, unemployed) workers who were harmed as a result of the welfare policies. Additional disciplining mechanisms included the banning of Hunger Marches, the prosecution of movement leaders, and the active discouragement of those who sought to assist unemployed workers in their applications for unemployment insurance. The paper therefore contributes to ongoing debates regarding the role and function of the state and its capacity to deliver progressive policy outcomes.