By Kenny Farquharson: Is Britain in line for the dole queue?

Published on 26/01/2008 16:56

A FRIEND was recently driving a car-load of relatives through his home town in the north of England when someone pointed out the location of the old dole office. "What's the dole?" asked his eight-year-old niece. My friend explained it was where people went to get a handout of money when they couldn't get a job.

"Why couldn't they get a job?" she asked, her brow furrowing. My friend patiently explained that 20-odd years ago millions of people in Britain couldn't get a job, and that some of them were "on the dole" for years, even though they really wanted to work. It was, he told his niece, called "unemployment".

She took some convincing. To her, the very idea of so may adults without jobs seemed absurd. I suspect the average 20-year-old might be similarly puzzled. Not so long ago, 'full employment' was an economic Holy Grail, something that seemed an unattainable utopian dream. These days it is taken for granted.

Earlier this month, data from the Office for National Statistics showed the number of people claiming unemployment benefit in the UK had fallen to 807,700, the lowest level in 33 years. Meanwhile, employment stands at 29.4 million, the highest level since records began in 1971. When the self-employed are factored in, the total number of jobs in the UK is now at a record high of more than 31 million. The number of vacancies is at its highest since 2001.

And yet all this could so easily change. Last week's collapse in the London stock market wiped 80bn off the value of shares, the biggest fall since the panic that followed the 9/11 terror attacks. It prompted fears of a recession the likes of which Britain has not seen for a generation, and for which we are psychologically ill-prepared.

On Friday, at the World Economic Forum in Davos, Prime Minister Gordon Brown warned there was worse to come and cautioned against being "over-optimistic" about the economy. Opinion among economists is split, but if we are indeed heading for a global recession, a new era of unemployment will be the inevitable consequence as belts are tightened and businesses go to the wall.

In most households, tales of unemployment are part of family lore. My father, a time-served toolmaker, was made redundant when Timex closed one of its Dundee factories. He hated the idea of enforced idleness so much he took the first job he could find, selling the Encyclopaedia Britannica door-to-door before eventually, to his great relief, finding another toolroom to work in. Some years later he was again paid off and took a job driving an ice-cream van. This ended in regrettable circumstances after a robust altercation with an argumentative customer over change from a 20 note.

Other families, of course, fared far worse. The evidence is still plain to see in former mining villages, or small towns that relied on a smelter or a construction yard that long ago closed down. There, the impact of 1980s unemployment is still being felt in family breakdown, deprivation, ill-health and nihilism. This newspaper last week reported the jaw-dropping fact that a sustained period of unemployment had the same effect on someone's health as smoking 200 cigarettes a day.

So how would 21st-century Britain cope with a couple of million people on the dole? In some ways, perhaps, better than the country coped in the 1980s. At that time many of those who lost their jobs were in heavy manufacturing. They were men who had been brought up to expect a life in the same job, working 40 hours a week for 40 years in the same trade and often in the same place. For these individuals, unemployment was a bewildering dislocation.

Today, with the decline of trade union power and the rise of globalisation, we've become used to a greater flexibility in the job market. We know the world of work requires us to be capable of a variety of tasks. We know we have to be constantly updating our skills. The idea that you might hold down the same job for most of your working life seems antiquated. So a period of unemployment, although still an alien notion to the under-40s, might not be quite the bombshell it once was. It might be more survivable than it used to be.

Yet even if individuals are better equipped to deal with it, a recession will still exact a heavy human price. Unemployment will bring social pressures unseen for a generation. Antagonism towards immigrants who "take British jobs" is depressingly likely. So is increased gang violence between rival groups of idle youths. And, perhaps most damaging of all in the longer term, there will be the domestic tensions in families as parents try to cope with stress and financial troubles.

The alarming thing about the current economic uncertainty, caused by the sub-prime lending chaos in the US, is that no one is quite sure how it will play out. It's new territory. This weekend there are some credible economists urging calm, saying a global recession can be avoided if the US Federal Reserve holds its nerve and the Bank of England manages to work out a way to deal with rising inflation and falling growth. They say all is not yet lost. Let's just hope they're right, and that "the dole" remains, for most of us, as much a part of 1980s nostalgia as deely boppers, Kajagoogoo and Yosser Hughes.

Join Scotland on Sunday assistant editor Kenny Farquharson from 5pm GMT today for an online chat about the issues of the day. Add your questions or comments below – now – and visit here later today for the live discussion.