In this chapter we shall explore our final criterion for an ideal benefits system:

We shall begin with a discussion of the ways in which the employment market has changed during the past half century, and then ask what kind of benefits system today's employment market requires, and how that compares with the benefits system constructed in an era with a very different employment market.

The changing workplace

I grew up in Dartford, on the edge of London, and for most of the time since then have lived close to the South Bank of the Thames: a microcosm of our changing economy and changing labour market during the past sixty years.

By the 1930s, the whole of the South Bank, the Central London area from Battersea to Erith, was dominated by manufacturing: heavy and electrical engineering, food processing, brewing, ship repairers, and printing; and the South Bank at Dartford and beyond by paper making, cement manufacture, and Littlebrook Power Station. What brought all of these industries to the area was a navigable river for the transport of heavy raw materials and finished products, and a growing population to provide labour. During the Second World War, in the engineering factories, as well as at the Royal Arsenal in Woolwich, much of the manufacturing capacity was given over to weapons manufacture, and during that period women frequently undertook work previously undertaken only by men.

After the war, many of the firms had not updated their methods or machinery, and they became industrial dinosaurs; the large labour forces gave trade union leaders considerable power in relation to managers, enabling workforces to resist change; and managers were either authoritarian or unrealistically benevolent, and showed little interest in innovation or in the competition building up around the world. Industries began to close. From 1961 to 1966 there was a decline of 20 per cent in the number of people employed in manufacturing in South London, while office and service industry jobs increased slightly. During the late 1960s, warehouses and factories closed and remained empty, and a particularly traumatic event was the loss of 5,000 jobs at AEI in 1968.