Summary

High inflation, triggered by the oil crises of the 1970s, led to tighter control of public spending and, with the election of the Thatcher government in 1979, an explicit belief that the control of inflation was more important than full employment. The unemployment rate rose to unprecedented levels and did not return to the levels of the early 1970s until 1999. Caseload numbers remain 65% above their 1971 level.

Rising unemployment coexisted with increasing employment over most of the 30-year period. A decline in manufacturing was more than offset by increased employment in the service sector, providing a mix of low and high paid jobs that have been increasingly of a part-time and/or short-term nature. Educational standards have risen, financial returns to qualifications have increased and wage dispersal has grown.

People who become unemployed are disproportionately male, young, poorly qualified, with little experience or with a poor work record. The same groups predominate among the stock of unemployed, although older people and members of ethnic minority groups, who find it more difficult to return to work, are also over-represented.

An increase in the average duration of unemployment was the major determinant of rising caseloads. Older workers, those with health problems, tenants (often an index of material deprivation) and people with dependant children were most at risk of long-term unemployment.

The prevalence of people experiencing repeated spells of unemployment while trapped in a ‘no pay low pay’ cycle may have increased.