The word 'unemployment' was not particularly prominent in new labour's vocabulary during its first decade in government. The phenomenon still existed but numbers weren't rising, so the issue's political salience was low. In its place there was a greater focus on 'social exclusion'.
Now unemployment is back with a vengeance. predictions that the claimant count could reach 3 million this year evoke powerful memories of the Thatcher years. even before the credit crunch, there were concerns. In late 2007 it emerged that nearly all the increase in employment since 1997 had come from foreign workers taking up jobs in the uK. The proportion of the uK's working-age population actually working had hardly changed over the entire period.
The promise of welfare reform ran into trouble very early in Tony Blair's government. with some fanfare, Frank Field was appointed welfare reform minister but was sacked a year later. Attempts to reform lone parent benefit were watered down by a labour rebellion. attempts to reform Incapacity Benefit were more or less abandoned after people with disabilities chained themselves to the railings of downing street.
People knew that the government was serious about tackling long-term, entrenched unemployment. yet it wasn't clear how much its initiatives, such as the new deal for young people or Brown's tax credit systems, had contributed to the limited progress made or whether that would have happened anyway in conditions of prolonged economic growth. Now that unemployment is rising again, the argument among welfare reformers has acquired a new urgency and a different focus.
Iain Duncan Smith, the Conservative MP who has devoted himself to the issue since being forced out as party leader, points out that there are two kinds of unemployment. "The sort of people cascading out of jobs today will mostly go back into work when things pick up," he told me. What worries him most is the minority that won't go back into the labour market unless there is radical reform - "the residual unemployed". Field puts their number at about 5 million; Duncan Smith says it is "just over" 4 million excluding full-time carers.
The point Duncan Smith makes, in a startlingly bipartisan way for a former party leader, is that the "base" of residual unemployment has risen under Tory and Labour governments alike - as has the cost of welfare. "Looking back over 30 years at periods of recession and growth, each government has come in with the same promise to cut welfare costs and departed leaving them higher than before. The Tories increased the cost between 1979 and 1997; Labour have done it again since."
The downturn has lent even greater urgency to Duncan Smith's project. His Centre for Social Justice is working on a new computer model of the benefits system in an attempt to change its incentives to avoid, or at least lessen, the pattern of higher "base" unemployment after this recession.
