The Act was introduced by Sir Robert Peel, who had become concerned in the issue after a 1784 outbreak of a "malignant fever" at one of his cotton mills, which he later blamed on 'gross mismanagement' by his subordinates.

Regulating the way masters treated their apprentices was a recognised responsibility of Parliament and hence the act itself was non-contentious, but coming between employer and employee to specify on what terms a man might sell his labour (or that of his child) was highly contentious.

[3] In 1784 it was brought to the attention of the magistrates of the Salford Hundred that an outbreak of "low, putrid fever, of a contagious nature" had "prevailed many months in the cotton mills and among the poor, in the township of Radcliffe".

[4]As a result of this report the magistrates decided not to allow parish apprentices to be indentured to cotton mills where they worked at night or more than ten hours in the day.

Conditions at the Radcliffe mill were improved; in 1795 John Aikin's A Description of the Country from thirty to forty miles round Manchester[5] said of Peel's mills: "The peculiar healthiness of-the people employed may be imputed partly to the judicious and humane regulations put in practice by Mr. Peel, and partly to the salubrity of the air and climate.

In doing so Peel said that he was convinced of the existence of gross mismanagement in his own factories, and having no time to set them in order himself, was getting an Act of Parliament passed to do it for him [7] but (given his dealings with the Manchester Board of Health) this may well have been a pleasantry, rather than the whole truth.

In 1816 Peel introduced a further Factory Bill; his explanation to the consequent Select Committee of the need for further legislation included this account of the origins of the 1802 Act: The house in which I have a concern gave employment at one time to near one thousand children of this description.

Having other pursuits, it was not often in my power to visit the factories, but whenever such visits were made, I was struck with the uniform appearance of bad health, and, in many cases, stinted growth of the children; the hours of labour were regulated by the interest of the overseer, whose remuneration depending on the quantity of the work done, he was often induced to make the poor children work excessive hours, and to stop their complaints by trifling bribes.

Finding our own factories under such management, and learning that the like practices prevailed in other parts of the kingdom where similar machinery was in use, the children being much over-worked, and often little or no regard paid to cleanliness and ventilation of the buildings; having the assistance of Dr Percival and other eminent medical gentlemen of Manchester, together with some distinguished characters both in and out of Parliament, I brought in a Bill in the 42nd year of the King, for the regulation of such parish apprentices.

The hours of work allowed by that Bill being fewer in number than those formerly practised, a visible improvement in the health and general appearance of the children soon became evident, and since the complete operation of the Act contagious diseases have rarely occurred.

Improvements in the generation of rotary motion by steam engines made steam-powered cotton mills a practical proposition; they were already operating in Manchester in 1795, using free children drawn from the local population.

Apprentices were mostly found in the larger mills, which had somewhat better conditions; some even worked a 12-hour day or less (the Grant brothers' mill at Tottington worked an 11.5-hour day: "This establishment has perfect ventilation; all the apprentices, and in fact all the children, are healthy, happy, clean, and well clothed; proper and daily attention is paid to their instruction; and they regularly attend divine worship on Sundays.

Some scholars have linked the Act to a move away from laissez-faire capitalism,[20] or see it as marking the point where the state began to recognise its responsibility for very poor children, and to address the conditions in which they were living;[21] it has also been seen as presaging subsequent legislation regarding the health of towns.

[22] Others see it as at heart one of the last manifestations of the old Elizabethan Poor Law, which directed that destitute children should be apprenticed in a trade; (more accurately of the Statute of Artificers of 1562 which set up systems for regulating apprenticeships): during Parliamentary debates on the Bill that interpretation was successfully urged against any attempt to widen its applicability.