Unemployment - can we avoid this again?

The Office of National Statistics (ONS) has estimated that UK unemployment in July had risen to 2.47m, the highest level in 14 years. Measuring unemployment has always been a difficult business - infact the 'claimant count', the number of people actually claiming unemployment benefit has been put at only 1.61m, the rest simply being unaccounted for.

More interesting perhaps is the regional balance of the figures. Last year in Policy Exchange's Cities Unlimited report Tim Leunig and James Swaffield argued that people in high unemployment districts in the north, many of which had first been declared 'distressed areas' in the 1930s, should be given the opportunity to move south to seek work. Leunig and Swaffield argued that these areas had declined relatively (that is, not grown as quickly) since the 1930s because they were in the wrong places to attract modern business, usually being on the coast and distant from the motorway system and airports. However, today's statistics suggest that moving workers to the south may not necessarily be the great solution that Leunig and Swaffield suggested. According to the ONS, in the twelve months ending in December 2008 workers in Tower Hamlets, which directly borders the City of London, includes Canary Wharf and which is a short DLR ride from City Airport, as well as a single change on the tube to Heathrow, suffered the highest rate of unemployment in the UK at 11.7%. At the other end of Britain Shetland suffered the lowest unemployment rate at just 2%, while other coastal places well off the motorway such as Aberdeenshire, the Orkneys and Purbeck, as well as the better connected Eden Valley in Cumbria all suffered unemployment levels of 2.6% and under. Leicester and Birmingham, also well towards the south, and very well connected by motorway, were the second largest victims of unemployment at 11.4% and 10.9% respectively.

More globally the highest level of unemployment found in Scotland was half that of London's highest, and the highest levels in the North East and North West still below 10%. The well connected East and West Midlands both found their worst districts above 10%. These figures suggest that perhaps the simple logic of 'South good, north bad' is not as universal as Leunig and Swaffield imply, and that simply encouraging people to move to wealthy areas for employment, as many in Tower Hamlets have, does not guarantee them employment. Instead there is no substitute for an advantage, whether comparative, such as the Shetland's oil based wealth, or competitive, such as workers possessing suitable skills for their jobs, such as the agricultural workers of Cumbria. It is these skills which Britain must work on improving in the workers of tomorrow if we are to avoid cyclical recessions, which can throw large numbers of low skilled workers out of work, having a serious impact on us again.