Tag Archives: jobless

The Great Depression of 1979 to 1981


Anybody over 50 years of age who lived in the Midlands or North of England and Scotland after 1979 will remember the economic depression that ravaged the industrial heartlands. I went to university in Liverpool in 1981 just after a summer of riots in that city and can recall well the sight of closed factories and decaying docks.

So – what on earth happened at that time? Up until Margaret Thatcher took over in 1979, unemployment had actually been falling for two years. Inflation had been brought to under 10%. Industrial output was finally ticking up as were living standards. The middle of the 70s had been disastrous. The Labour government of James Callaghan had to grovel to the International Monetary Fund for a bail out. But by the end of the decade, the economic indicators were improving. Plus oil from the North Sea was about to provide a bonanza.

However – Thatcher played to a sense that the post-war political consensus had run into the buffers. Even if the economics looked more favourable, the political and social environment in Britain was very volatile. Many people were fed up and looking for decisive leadership. And so Thatcher was elected. Unfortunately, she came into power wedded to what Labour Chancellor of the Exchequer Denis Healey described as “voodoo economics”.

Pursuing a monetarist economic policy turned a global recession into a British depression. Our unemployment sky-rocketed from 1979 to 1981 from about a million to three million – and that was the official statistics. Those stats were constantly revised in the 80s to massage them downwards.

Big rises in interest rates, indirect taxation (VAT), the exchange rate and cuts in public spending depressed demand and accelerated factory closures and bankruptcies. Every evening, the TV broadcast news would announce thousands of job cuts and names of firms now facing closure. These included household name brands and affected all sectors.

I got used to reciting the figures as a young political activist at that time. Manufacturing jobs slid by 22%. In vehicle production, jobs crashed by 28% – nearly a third of those in work. Young people were disproportionately affected with under-25s making up 40% of the jobless total. Two out of every three school leavers couldn’t find work. As the recession continued, it became clear that the number of long-term unemployed was increasing at an alarming rate. Many who had worked in blue-collar manufacturing, mining and dock work were stuck on the dole.

The incredible cost of this level of unemployment was around £17bn in benefits and lost tax revenues. I’d have to calculate the real cost in today’s money. That is a 1981 figure. It didn’t make economic sense. But it made political sense. For Thatcher, inflation was the real demon and fear of losing your job was a weapon against the power of the trades unions.

Newspapers for and by the jobless in the early 1980s


 

After 1979, there was a calamitous rise in unemployment – especially among the youth. In northern cities like Liverpool, Manchester and Newcastle – a kind of dole culture took hold. You could be forgiven for thinking that not having a job was the norm while being in work was some kind of privilege.

Local authorities and trade unions funded unemployment centres. I recall the centre in Liverpool on Hardman Street with a pub attached at the back called The Flying Picket where you might bump into Alexei Sayle at the bar on some nights.

Some of these centres produced cheap newspapers for and by the unemployed. They would normally reflect the opinions of the dominant political group within the centre – often on the ultra-left.

Here are some examples – note the attack on the TUC for not doing enough for the unemployed. A common theme at the time was that the Labour Party and trade union leadership were sadly wanting in the face of the Thatcherite onslaught.

 

County Hall – when Ken Livingstone headed up the GLC


County Hall on the South Bank in London is now a hotel, aquarium, some kind of horror show, a Japanese restaurant and a McDonalds – oh, and a ticket office for the London Eye.  It was once the city hall for London – where the Greater London Council (GLC) was based.

Back in the early 1980s, the GLC was led by a much younger Ken Livingstone. He used to plaster the current unemployment figure across the top of the building. As it pretty much faced on to the Houses of Parliament, on the river bank opposite, Margaret Thatcher couldn’t exactly miss it.

But Thatcher got her revenge – by abolishing the GLC.

County Hall - as seat of the GLC

County Hall – when it was the seat of the GLC

Monotony – the game for the unemployed in 1979


There was a dark humour among the unemployed under Thatcher – many knowing they would never, in all likelihood, work again. These were people thrown out of manufacturing jobs and facing a labour market that was unforgiving if you over 35 – let alone unwilling to up sticks.

Graduates couldn’t even find summer jobs in the early 80s as the unemployed competed for shop and bar work. Dole newspapers sprang up all over the north, Midlands and London. This one developed a game for the jobless called Monotony – a skit on Monopoly.