Be afraid: Fly boys are back

By THIS IS MONEY
Updated:

 

Forty-odd years ago, the prospect of public spending cuts was sweetened by Labour Ministers for their backbenchers by swinging the axe at things they disliked, such as the F-111 supersonic bomber and some British military bases abroad.

After Thursday's dreadful figures for the public finances in May brought the need for deep savings into sharper focus, the betting has to be on a similar manoeuvre this time round.

Put it this way, any contractor to the Trident nuclear missile upgrade or the identity card scheme should not count on getting rich.

Another echo from the late Sixties, when unemployment returned to the agenda after a long absence, came with last week's labour market figures.

Not that you would have thought so from some of the commentary, which stressed that the rise in the claimant count to 1.5 million-was less than expected.

Well, fine. Presumably, the jobless much prefer to stand in a slowly lengthening dole queue than in one that is growing more rapidly. Or perhaps not.

More sensibly, analysis of the labour market data has tried to work out whether this recession resembles that of the Eighties or early Nineties or neither.

In the Nineties, job losses were concentrated between June 1990 and December 1992. In the Eighties, unemployment rose from December 1979 to July

1986. The totals were very different as well - in the Eighties, more than two million people joined the dole, while in the Nineties it was 1.4m.

Furthermore, in both recessions there was a feeling that you could put a face to the unemployed.

Blue-collar workers and school leavers in the Eighties, the self-employed and retail and services workers in the Nineties.

We have yet to identify today's jobless in the same way, though some rummaging in last week's numbers supplies a few clues. First, the private sector is taking the brunt of job losses. Employment here shrank 1.2% in first quarter, while public sector jobs grew by 0.2%.

Second, full-time work is in the steepest decline, both in terms of employees and, interestingly, the self-employed.

Third, unemployment among workers aged 18 to 24 is rising less markedly than among the workforce as a whole, which may or may not be significant. Fourth, the sectors suffering the worst job losses are agriculture, manufacturing and services other than finance and business services.

This last category actually showed a small rise in employment in the three months to 31 March. Given the role finance played in bringing us to our present plight, that news could well fall into The Fly category. Remember? That was the horror film that coined the phrase: 'Be afraid. Be very afraid.'

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