Tucked away in the National Archives is the Treasury’s copy of the Liberal party’s manifesto for the 1929 election. Ostensibly written by David Lloyd George but influenced by John Maynard Keynes, the pamphlet – “We can conquer unemployment” – urges higher government borrowing to shorten Britain’s dole queues. Underneath an image of the former prime minister, an official has scrawled a three-word response: extravagance; inflation; bankruptcy.
Some things don’t change. Unemployment has been central to politics and culture for the best part of a century. DH Lawrence and Alan Bleasdale in Boys from the Blackstuff both wrote about the plight of Britain’s industrial working class. From Winston Churchill in the 1920s to Rishi Sunak, chancellors have been given advice on how to create jobs.
What’s more, the Treasury still frets about the cost, which is why almost every public statement from the chancellor says action will eventually be needed to bring down a budget deficit on course to reach £400bn this year. Up until now, though, the government has been spending and borrowing to prevent firms forcibly shut by lockdown restrictions from going bust and axing jobs.
The furlough – and other business support – has not prevented unemployment from rising by about 1 million, but intervention by the state has prevented much worse damage. For the past year, the Treasury’s wage subsidies have stood between Britain and mass unemployment.
Andy Haldane, the chief economist at the Bank of England, says that without state support, unemployment might already have reached 5 million. Treasury officials from the late 1920s could well be turning in their graves, but no government these days would try to balance the books when faced with a deep recession. As the free-market economist Robert Lucas once noted: “In a foxhole we are all Keynesians.”
Keynes eventually won his battle with the mandarins but it took 15 years – and the second world war – to enshrine the political commitment to full employment. A generation of politicians – including Harold Wilson and Ted Heath – never forgot what it was like growing up during the interwar years.
Post-war baby boomers came of age when jobs were easy to come by. If it’s hard to find a mention of unemployment in the songs of the Beatles or the Rolling Stones during their 1960s heyday, that’s because it was not an issue.
But by 1981 it was possible to sense how much had changed simply by listening to the music on the radio: Ghost Town by the Specials or One in Ten by UB40, a band named after the form that unemployment claimants had to complete to get benefits. On the other side of the Atlantic, Bruce Springsteen was lamenting the end of the American Dream as factories…
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