Vol. 10 No. 12 · 23 June 1988

Slums, Unemployment, Strikes and Party Politics

W.G. Runciman

2480 words

Until a few years ago, unemployment would have been the most implausible possible choice for comment on the theme of plus ça change. Not only was it part of the conventional wisdom that the bad old days of the Thirties had been banished for ever. It was also taken for granted that unemployment on that scale would not again be politically tolerable. Yet here we are with a government which succeeded in getting itself re-elected yet again with a rate of unemployment which, even if on a downward trend, was still running at over three million. And less of a fuss, if anything, was being made about it than when Baldwin was winning an overall Conservative majority of 247 seats in the General Election of 1935.

Precise comparison is difficult because of the different bases on which the unemployment statistics are calculated. But there is no doubt that the National Insurance statistics overstate the percentage unemployed during the inter-war period while at the same time understating the total number, since those outside the National Insurance scheme were significantly less likely to be out of work than those in it. The adjustment appropriate to arrive at a percentage figure equivalent to those used today is, as I have been discovering, still a matter of unresolved controversy among the experts. But the conclusion of Sean Glynn, in a recent volume of papers edited by himself and Alan Booth under the title The Road to Full Employment,* is that ‘it can be said with reasonable confidence that unemployment in the 1980s has been much worse than during the inter-war period and has reached levels comparable with the 1930s peak.’

Some will respond to this by arguing that the higher level of benefits provided by the post-war Welfare State has made the unemployment of the Eighties a good deal more tolerable than that of the Thirties. But there are two arguments the other way, the second of which is perhaps less familiar than the first. The first is that the level of needs rises with the general improvement in living standards: if, for example, the only form of heating in the council flat where a family on supplementary benefit has been housed is electric, there is little point in comparing its cost to that of coal picked for economical use in a single tiny grate in a terraced house. The second argument is that the level of benefits in the Thirties was higher than it is sometimes made out to have been: quite a number of unemployed were receiving more in allowances than they had been earning in wages (a third of single men in one study carried out in Wales), and it is argued by one school of economic historians, albeit a minority one, that a fair amount of inter-war unemployment was indeed voluntary. This topic is, predictably, controversial. But the general picture does look pretty much the same then as now: a percentage of involuntarily unemployed unquestionably in excess of 10 per cent, benefits at their highest overlapping wages at their lowest, a hard core of long-term unemployed, marked discrepancies by both industry and region, and an unquantifiable psychological toll in apathy, alienation and despair.

It could, I suppose, be said that there is a significant difference between the active willingness of Margaret Thatcher to tolerate high unemployment for the sake of reining in inflation and Stanley Baldwin’s passive acquiescence in it as something which could only be cured by an upturn in the trade cycle. But it isn’t as if Thatcher either wanted or intended unemployment to stay at three million. Nor is it as if Baldwin didn’t also believe that wage rises at the expense of productivity make unemployment that much harder to bring down, whatever the trade cycle is doing. For all the difference in style between conciliatory, paternalistic, undoctrinaire Baldwin and confrontational, populist, strident Thatcher, and for all the difference between a period when real prices were actually falling and one in which they have merely been rising more slowly than they were, there is not much difference in the vulnerability of British industry and those employed in it to international influences and events over which no British government has any significant influence whatever; and the half-hearted ‘reorganisation’, as it was called, of selected industries in the Thirties is readily paralleled by, for example, the injection of taxpayers’ money into British Steel by none other than Keith Joseph himself when at the Department of Trade and Industry. But in neither case is there any hint of credence being given to the view that government action, of whatever kind, can of itself create jobs for which there is no genuine market demand.

That the sentiments of a Conservative government of the Eighties should echo those of a Conservative government of the Thirties is, however, less surprising than that their justification of their policies should seem to be accepted as broadly now as it was then. After all, there has in between been the post-war era of ‘Butskellism’; and even if (as I suggested a few weeks ago) there was not then the degree of national consensus which David Marquand, in The Unprincipled Society, would have us believe, there was at any rate full employment, or as near to it as a liberal-democratic capitalist society is ever going to get. But just as, in the Thirties, the failure of the previous Labour Government to deal with unemployment was fresh in the recollection of the electorate, so in the Eighties is the failure of the previous Labour Government to deal with the problem of roaring wage-inflation combined with unemployment at (only!) 1¼ million. To be sure, the ‘Winter of Discontent’ was unlike anything which happened, or could conceivably have happened, between the wars. What on earth would Attlee or Bevin – or Bevan – have said if they had looked into the crystal ball and seen a Labour government’s policies being wilfully repudiated by both the industrial and the political wings of the Labour movement? But the effect was that unemployment at Thirties levels became as politically tolerable fifty years later as it had been then.

It so happens that, as I have just found out, I am myself credited by one of the contributors to the Glynn/Booth volume, Alan Deacon, with having argued ‘convincingly’ in a book published in 1966 that the main reason why the mass unemployment of the inter-war years did not give rise to serious political disorder was that it seemed to many people unavoidable – the consequence, as I then put it, ‘not of remediable injustice so much as an Act of God’. This cannot quite be said of the unemployment of the Eighties. But the parallel is in the willingness of many of the electorate to accept that whoever’s fault it may be, it is not the Government’s. Whether blame more properly belongs with rapacious trade unions, or cut-wage Third World competitors, or feather-bedding employers, or cartel-forming oil sheikhs, or merely the old impersonal economic forces (whatever they may be), as many voters seem prepared to absolve Thatcher as absolved Baldwin.

Whether either, or both, or neither, deserves to be absolved is, and will no doubt continue to be, a matter of controversy about which I am unqualified to pronounce. But whatever posterity may decide, what is striking (at least to me) is the similarity between the arguments deployed by both sides then and now. Once the state had accepted, as it did soon after the First World War, the obligation to support the unemployed and their dependents (a move which, incidentally, several of the more prosperous trade unions had opposed), the debate between the proponents of more and less generous provision was irreversibly underway. On the one view, generous provision is not only irresponsible but self-defeating, since by distorting the market-clearing price of labour it perpetuates the very unemployment whose consequences it seeks to alleviate. But on the other, it helps to bring unemployment down by sustaining the purchasing power of the unemployed and the consequent demand for goods and services from which new jobs will be created. And there is no way of settling who’s right without a controlled sociological experiment which is, in the nature of the case, impossible.

In any case, some will argue that however that may be, the state ought itself to provide work instead of maintenance, since it must be better to apply any given amount of taxpayers’ money to subsidising employment rather than idleness – to which the answer is that any temporary benefits from such a policy are nullified by its inflationary effect. So perhaps the debate should instead be centred on the capacity of government to remedy the shortcomings of the market through regional policies which will provide the necessary incentives for jobs to be created where there is an excess of labour rather than where there is a shortage – to which the answer is that the excess labour in the depressed areas lacks the skills which the market needs. But this in turn takes us back to the question whether the fundamental issue is the provision not of unemployment assistance so much as facilities for training and retraining; and this is a matter about which employers, unions and governments have been passing the blame from one to another since well before the First World War.

Meanwhile, from the early Twenties on, the insurance principle on which the justification of assistance had initially been based became steadily less plausible. As the scale and duration of unemployment continued to grow, the fiction that relief was necessary merely to tide paid-up contributors over the intervals between one job and the next was worn threadbare. An open-ended commitment of public funds had, however unwittingly, been made; and from then until now, successive governments have been faced with the two-fold problem of ‘scroungers’ claiming more than they should while genuine claimants either receive less than their entitlement or fail even to claim at all. Just how close the parallels are between then and now I have come to realise thanks to an earlier paper by Alan Deacon which was published in 1977 in the volume Essays in Labour History 1918-1939 edited by Asa Briggs and John Savile. During the Twenties, the scale of unemployment benefit increased dramatically: compared with November 1920, the amount drawn by a man with a dependent wife and two children had risen 240 per cent in real terms by May 1931. But the abandonment of contributory conditions meant not only that governments became increasingly anxious to restrict the amounts of money spent but also that they had to devise new safeguards against abuse. The ‘genuinely seeking work’ test was accepted by Labour as well as Conservative administrations, and during the late Twenties some 10 per cent of applicants for so-called ‘extended’ benefit were refused it on that ground – after which they were debarred from applying again for a further six months. It was only in March 1930 that the then Labour Government finally abolished the test, with the ironic result that some married women and seasonal workers did indeed succeed in drawing benefit even though they were not in fact seeking work at the time.

One of the reasons, Deacon argues, why the Labour movement failed to protest effectively against the use of the ‘seeking work’ test against the unemployed was that with the exception of the Clydeside MPs, few of its spokesmen realised how important it was: they were more concerned to protest against means-testing than to query the arbitrary decisions of local committees on individual ‘seeking work’ cases. But in addition, there was, then as now, the reluctance of Labour spokesmen to mount an all-out challenge to ‘scrounger’ myths. This reluctance was, and is, partly on grounds of political priorities in the competition for support at the polls. But it also reflects workers’ own suspicions about malingering. As Peter Jenkins remarks in his account of the 1984 miners’ strike in Mrs Thatcher’s Revolution, Scargillite Yorkshire pitmen have as little time for ‘idle buggers and dole-wallahs’ as suburban Thatcherite middle-Englanders who don’t know and don’t want to be told what it is like to be genuinely seeking work where no work exists. Of course there are scroungers and always will be, just as there are and always will be tax-evaders. But there is nothing new about the greater enthusiasm of politicians, media and public for hounding the first than the second.

Could it ever have been otherwise? Well – in principle, yes. A government of the left could presumably hand out depreciating public money on a scale which supplied either work or maintenance to anyone who applied for it, and a government of the right could presumably reduce unemployment benefit to the point that claimants would be forced into reliance on charity, vagrancy or subsistence wage-work (if they could get it). But neither was ever on the cards in the inter-war period, any more than it is now. It is only at local, as opposed to national, level that policies closer to the extremes may, at least for a time, be put into effect. Margaret Thatcher’s rage at the profligacy of Liverpool or London in the hands of ‘loony’ councillors is no more than a re-run of Neville Chamberlain’s rage at the profligacy of the Poor Law Guardians of Bedwellty, West Ham and Chester-le-Street in 1926, which led him to replace them with special commissioners. But the prospect of a fundamental alteration of the system in either direction is as remote as ever. No doubt it can make a fundamental difference to the welfare of individual households what unemployment benefits are granted and on what terms. But whatever hardship may be imposed – and it will be – by the operation of the Poll Tax and the Social Fund, we are not going back to the operation of the Poor Law as it was in 1901; and whatever may be expected of an incoming Labour government when – or if – there is one, it is not going to spend on welfare benefits at the rate of Ken Livingstone’s orgiastic bonanza during the last defiant days of the doomed GLC. There will be changes in the system, no doubt, and plenty of them, but not changes of it.

So what sort of system is it? There is no single sociological term which can encapsulate the answer. But Orwell, as you might expect, catches it as well as anyone in The Lion and the Unicorn, published in 1941, where he talks of England as ‘a loose maritime democracy, with its slums and unemployment, its strikes and party politics’. The phrase would do just as well for 1981 or for 1901 as for 1941; and something very surprising will have to happen if we are not still to have our slums, unemployment, strikes and party politics in 2021, however much more generous unemployment benefit will (one hopes) be by then.

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