Tory ministers from 1980s fear return to mass unemployment
Two grandees of the Thatcher era have urged the government to learn lessons from the mass unemployment of the 1980s, as the Treasury draws up plans to limit a collapse in the jobs market caused by the coronavirus pandemic.
Tom King, who was employment secretary in 1983 when the grim milestone of 3 million unemployed people was reached, told the Guardian that ministers should be prepared to consider propping up potentially viable companies wherever possible, mindful that the economic crisis is a global one and thus harder to resolve.
Norman Fowler, who took the same post in 1987 when there was a significant fall in unemployment levels, said the government should be wary of seeking to control job creation measures centrally and should instead pass responsibilities to mayors and others with local knowledge.
With the coronavirus employment retention scheme currently supporting 9m jobs, but due to end in October, there are fears the UK could see joblessness soar to greater levels even than under Margaret Thatcher.
King, who is now a Conservative peer, said he was particularly worried about the prospects for young people, whether those losing jobs in industries such as hospitality, or school and university leavers.
“A lot of people who aren’t really prepared are going to be pitchforked out on to the market,” he said. “This concentration on young people is an important part of it, as we did then with the youth training scheme. That was a hell of a commitment at the time.”
The challenges would be particularly great, King said, with Covid-19 affecting countries around the world, prompting a global battle for resources that would help people to return to work, such as vaccines.
“Certainly, to try and buy some time for businesses is important,” he said. “I don’t think it’s realistic to prop up everything. But, for everything that has a prospect of returning to good activity, then it’s right to do something.”
After less than two years as employment secretary, King was moved to the Northern Ireland office, where he saw unemployment rates of up to 20% – and the social consequences this brought.
“One of the factors that underpinned the sectarianism and terrorism then was the level of unemployment,” King said. “Among the things that pleased me most is that we managed to get a lot more people into jobs in Northern Ireland. There was no question that idle hands are too easily recruited into terrorism or crime of one sort or another.”
Fowler, who is now Lord Speaker, said one of the lessons he took from his time as employment secretary, from 1987 to the start of 1990, was the need for training to help as many people as possible.
“We were very concerned, obviously, about young people getting jobs. But in fact, when it came to it, it wasn’t the young people who were the problem, so much. The problem was the long-term unemployed, who had been displaced from shipbuilding, steel and all the other traditional areas of work,” he told the Guardian.
Related: The British government is about to sleepwalk into an unemployment crisis | Larry Elliott
Fowler helped set up local training and enterprise councils but said the plans were hampered by “all the old jealousies inside government, between departments”.
The government should learn from this, he said: “With any luck we should be past that point now. We’ve got local mayors, powerful people, who can knock heads together and get the whole thing moving on a local basis. There’s a great opportunity there, if only we have the wit to take it.
“There’s more chance of success if you try and organise it with local knowledge, rather than if you try and do it from Whitehall.”
