By 1940 Arnold was desperate for money. Through Mr Jowett, the principal at the RCA, he had been previously engaged to do a small amount of work for Wedgwood. Knowing this, Gordon Forsyth got in touch with Josiah Wedgwood to inform him of Arnold's situation. Josiah was sympathetic and asked Arnold to see their Art Director, Victor Skellern, who employed Arnold as a designer.

Tom Wedgwood, Josiah's cousin, let Arnold have an annexe that had been built onto his house in the late 19^th century, and Arnold used this as a studio. It also had a curtained off area where he could eat and sleep if he wished. As well as designing for Wedgwood, Arnold was also free to undertake his own projects, and he worked on terracottas which Wedgwood fired for him and stored at their factory. At this time, Arnold produced terracotta busts of the Wedgwood family and of allegorical figures, and then developed portraits in bas relief which became very popular. Two of the most successful bas reliefs were of Winston Churchill and Franklin Roosevelt which in 1942 were incorporated as lavender-embossed designs on white Queen's ware mugs.

As the war progressed, Arnold decided to return to London and joined the International Voluntary Service. However eventually he received his call-up papers, and when they arrived he refused to accept them and to also have a medical examination. On 20^thJanuary 1943 he was sent to Wormwood Scrubs for 12 months. During this time, the Wedgwoods remained sympathetic to Arnold, and Lady Wedgwood, herself a conscientious objector, wrote him occasional letters. Victor Skellern also showed Arnold kindness at this time, paying the rent on his small cottage. After nine months of his sentence, Arnold was released for good behaviour.

During that Christmas period, Arnold received a letter from Victor Skellern. The Director of the Tate Gallery, John Rothenstein, had visited the Wedgwood factory and was very impressed with Arnold's works and terracottas. He wanted to have some of the terrocottas on show at the Tate as he was anxious to know of sculptors prepared to take commissions for churches. Rothensein also wished “subject to the approval of the Trustees” to purchase Arnold's St John the Baptist for the Tate, which he finally did in 1944, along with The Annunciation.

On returning to the Potteries, Arnold was appointed as full-time figure modeller at Wedgwood. As the factory had to employ untrained women because the skilled labourers were going to war, Arnold had to design items which could be produced mechanically and decorated easily. One of his designs, 'Taurus' the bull, was an enormous success and sold for well over thirty years, giving Wedgwood a great deal of publicity at the time. There is a model of 'Taurus' in the V & A museum today. Around 1945, Arnold had thoughts of becoming an art teacher and taught part-time at Burslem School of Art.