Mass unemployment is the next problem that Boris Johnson should have seen coming

Callous and cynical Conservatives could say that high unemployment never did them any harm electorally, but that is not a risk they should take

John Rentoul
Saturday 22 August 2020 15:52 BST
Rishi Sunak confirms the furlough scheme will not be extended

The next problem that Boris Johnson saw coming and failed to prepare for is mass unemployment. After the A-level grades, the end of the evictions ban and the certainty that his holiday location would be on the front pages of the newspapers, he knows that the jobless total is likely to rise to three million when the furlough scheme ends in two months.

This is the sort of level of unemployment the country endured in the mid-1980s, when it scarred lives and depressed whole towns and cities. Historians and economists still argue about how necessary it was, as Britain modernised, but it was a terrible price to pay. It could be argued that Margaret Thatcher didn’t see it coming, although there were plenty of warnings that putting interest rates up and keeping them high would price Britain out of world markets.

But Johnson can see it coming, because he knows there are still a lot of people on furlough, and he knows they won’t all have jobs to go back to. Most forecasts expect total unemployment to rise to between 2.5 million and 3.5 million. He must hope for an outcome at the lower end of that range, and some of the statistics for the bounce-back of consumer spending have been quite hopeful, but even 2.5 million would be bad. That would take us back to the level of the last peak, in 2012, four years after the financial crash.

Callous and cynical Conservatives could say that high unemployment never did them any harm, electorally. It was a striking paradox of the 1983 and 1987 elections that Thatcher won huge majorities despite jobless queues far longer than at the time of the 1979 poster, “Labour Isn’t Working”, when one million out of work was considered a national failure and a good reason to change the government.

Of course, there was a lot else going on in the Eighties. The Labour Party had gone on a journey to what might now be called proto-Corbynism, although it is more accurate to describe Jeremy Corbyn as a disciple of neo-Bennism, and was having difficulty getting back to where the voters were. The SDP/Liberal Alliance advanced, but failed to break through to replace Labour, giving Thatcher the advantage of a divided opposition.

The other big thing that was happening was that, despite unemployment, the economy was growing. From 1982, incomes were rising strongly for those in work. For most people, unemployment had ceased to be a measure of an economy in trouble, or a threat to their own living standards.

Much the same happened after the financial crash. Most of the rise in unemployment happened under Labour, while Gordon Brown was coordinating the policies that would “save the world”, as he inadvertently put it. So when the jobless total peaked under David Cameron’s coalition government, Cameron wasn’t blamed for it. By the time of the 2015 election, the economy was growing and unemployment was falling.

The other postwar peak of joblessness happened under John Major in 1993, at a lower level than in 1984 but higher than in 2012. Again, by the time of the following election in 1997, the economy was growing and unemployment was falling, but that time Major suffered the biggest peacetime defeat. It is almost as if the level of unemployment on its own tells us nothing about governments’ political fortunes.

That does not mean, though, that Johnson can be complacent about the coming crisis. How his government responds to challenges still matters. Admittedly, Rishi Sunak is a more competent minister than Gavin Williamson, who accepted Ofqual’s assurances that the Scottish exams fiasco wouldn’t happen in England, or Robert Jenrick, who left it until the last moment yesterday to extend the ban on evictions.

No doubt Sunak will have schemes and slogans to create jobs and help people adjust to the post-coronavirus dislocation in the autumn Budget, but the prime minister ought to worry about whether they will convince working-class former Labour voters that he is doing enough to deliver the brighter Brexit future he promised.

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