London in the 1660s

Central London in 1666, with the burnt area shown in pink.

By the 1660s, London was by far the largest city in Britain, estimated at half a million inhabitants, which was more than the next fifty towns in England combined. Comparing London to the Baroque magnificence of Paris, John Evelyn called it a “wooden, northern, and inartificial congestion of Houses,” and expressed alarm about the fire hazard posed by the wood and about the congestion. By “inartificial”, Evelyn meant unplanned and makeshift, the result of organic growth and unregulated urban sprawl. A Roman settlement for four centuries, London had become progressively more overcrowded inside its defensive City wall. It had also pushed outwards beyond the wall into squalid extramural slums such as Shoreditch, Holborn, and Southwark and had reached far enough to include the independent City of Westminster.

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The New Labour government, elected in 1997, has seen it as one of their core aims to reduce long term unemployment, particularly in deprived urban areas in the party’s heartlands.  At the forefront of government policy to increase employment participation has been the New Deal.  The Labour government’s policy did not break with the broad ‘workfarist’ thrust of past Conservative policy with its threats to remove benefit if claimants do not actively seek work, New Labour saw this as a key part of their attempt to construct a welfare state based upon citizens’ responsibilities as well as rights.  Layard, a British economist influential in originating the New Deal wrote that ‘where benefits last for a long time, so does unemployment.  Governments and societies get what they pay for- if they pay for inactivity, that’s what they get’ (1998, pp.24-25).  However, the New Deal, as well as actively helping and encouraging the unemployed to find work, provides training, subsidised employment and volunteer placements to those that do not find unsubsidized employment through the scheme.  The New Deal aims to increase the employability of individuals in the eyes of employers, there have been a number of New Deals for various groups in society such as the young, adults over 25, lone parents and others.  The New Deal for Young People was the first to be put into place and receives the most funding.  The government sees the New Deal for Young People as one of the jewels in its policy crown citing 250,000 young people moving into sustained jobs and, according to one Secretary of State for Unemployment, long term youth unemployment has been virtually eliminated (DfEE, 2001).  However, the government has been less willing to acknowledge that the effectiveness of the programme has varied between locations and that there are large numbers of people who do not get jobs after they participate in the programme, of the 854,000 people who started on the NDYP by March 2003 only 36% were known to have entered unsubsidized employment and nearly one in five of those ended their employment within 13 weeks (Finn, 2003).  Sunley, Martin and Nativel (2001) carried out a study mapping the performance of the New Deal at a local level rather than assessing its performance at a national scale as the government has done.  Mapping the problem faced by the government in 1997 Sunley et al. found, as expected, that the areas youth unemployment as a proportion of the total population was more severe were concentrated in the northern conurbations and old industrial areas rather than in the south of England which has been one of the areas to benefit most in employment from the restructuring of the economy (Turok, 1999).  However, when Sunley et al. mapped the number of people who obtained unsubsidized jobs, the number of people remaining employed for a minimum period after gaining a job and the  areas in which youth employment as a proportion of total employment was worst in 2000 it was clear that the performance of the New Deal had been best in the areas in which it was needed less in the deprived northern conurbations and inner cities.  The areas with the most buoyant local labour markets, in Central and Southern England, were the areas in which most people had gained and held jobs and where youth unemployment as a proportion of the total unemployed had been reduced the most.  Sunley et al. point out that a scheme like the New Deal working on improving employability will succeed in areas where there are sufficient jobs for the increased supply of people coming into the labour market, which by definition are not the areas in which unemployment is the most entrenched.  Sunley et al. explain the poor performance of the New Deal in some areas as partly due to the kinds of jobs available in those areas which could be more insecure at the bottom of the skill structure in the service and construction sectors.  Boosting the supply of labour in depressed labour markets could also have the effect of putting downward pressure on wages leading to increased labour turnover.  Also, the target based need for employment services to place the unemployed in jobs they are unsuited to contributing to the recycling of people through the system and the persistence of long term unemployment in deprived urban areas, to combat this Peck and Theodore (2000) recommend that help for the unemployed continues beyond the first job, helping people to move into better jobs.

The importance of flows into and out of joblessness when determining unemployment level has been a controversial topic among economists.  Writers such as Layard (see Layard et al, 1991) influential in developing the New Deal argue that high unemployment in the 1980s was caused by reduced numbers of people leaving the ranks of the jobless leading to a rise in the average duration that individuals spend unemployed.  Others, such as Burgess (1989) argued that the reduced outflows and increased duration of unemployment during the 1980s were consequences of increased inflows to unemployment due to lack of availability of employment or ‘jobs gap’.  The two perspectives lead to different policy prescriptions.  For Layard it is necessary to target the long term unemployed and increase their job search effectiveness in the way that the New Deal aims to do, this can be described as increasing the supply of labour.  On the other hand, Burgess would advocate stemming the inflows into unemployment in the first place by operating on the demand side of the labour market as well as the supply side through provision of jobs.  Peck and Theodore (2000) argue that where the local labour market is not strong enough to accomodate the increased supply of labour appropriate demand side measures should be used, they criticise the New Deal for being almost completely passive with respect to the demand side of the labour market and also not recognising that jobs will go to the most employable unemployed, meaning that the most likely to be unemployed will be least likely to find jobs.  The National Institute of Economic and Social Research in 1999 discovered that of the 145,000 people who entered jobs via the New Deal since April 1998 79% would have found employment anyway due to the cyclical expansion in the economy (Atkinson, 1999).  Treasury economists argue there is wide availability of employment opportunities in most parts of the country and that buoyant labour markets exist next to areas of high unemployment meaning that the issue is employability and physical access to jobs rather than job creation (ESC, 1999).

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