Leading Article: Luddite fears old and new

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NED LUDD must be turning in his grave at British Telecom's announcement yesterday that it has cut 40,000 jobs over the past year. He would recognise how new technology in the form of digitisation and the replacement of old-fashioned exchanges will mean redundancies. For General Ludd was the inspiration for the 'Luddite' workers during the Napoleonic Wars who smashed machinery in the Midlands and the North of England which they felt was threatening their livelihoods. In their view new technology, requiring fewer workers, would throw them on the scrapheap.

There may be those who share those fears today. The chillingly arrogant attitude displayed by BT's chairman, Iain Vallance (salary plus bonus pounds 535,000 in 1991-92), gave the impression that he regards redundant staff as little more than units of production that are no longer useful, although BT's redundancy package can be pleaded in mitigation.

The fearful might also look around modern industry in trepidation. It is said that in a Japanese electronics factory one could fire a shotgun and not hit anyone, such is the nature of these labour-free units. Telecommunications and manufacturing will continue to develop technologies that mean fewer people can produce more. Are many Britons therefore destined to languish in unemployment, cut off from prosperity like black South Africans in Bantustans?

Fortunately, history offers a more optimistic picture. Despite two centuries of industrial revolution, an increase in jobs rather than higher unemployment has accompanied the change. New technology has transformed the costs of production, allowing industries to be established that could not otherwise have been set up and generating new wealth. Although Britain's population has risen from 11 million in the days of the Luddites to 58 million today, there has not been a corresponding rise in unemployment. The arrival of millions of new workers on the labour market does not need to be accompanied by lengthening dole queues, as demobilisation after the Second World War proved.

However, adjusting to new technologies can be painful. The benefits of change are rarely enjoyed by those who pay the price, prompting understandable anger. Lord Liverpool, the Tory prime minister for 15 years during and after the Napoleonic Wars, faced riots for failing to sympathise with displaced workers.

As the Conservatives next month begin their 15th year in government, they would be well advised to learn from Lord Liverpool's unfortunate myopia and do more to help those hit by structural change. The Japanese, despite their mastery of new technology, have managed the process with unemployment still below 2 1/2 per cent.

The key is helping former employees to develop new skills. This is as true for victims of new technology as it will be for shipyard workers at Swan Hunter, who face the sack through no fault of their own because military orders have dried up. Poor programmes for retraining, not new technology, lie at the heart of Britain's abysmal record in dealing with long-term unemployment and structural change.