Cameron: Son of Thatcher? Or Heir to Macmillan?

Over in The First Post, Neil Clark writes:

Britain isn't working. New figures from the Office of National Statistics show that the number of Britons out of work rose by 27,000 in the three months to the end of January to 2.53 million, the highest number of unemployed since 1994. Meanwhile, the unemployment rate for those aged 16 to 24 rose by 0.8 per cent to a new record of 20.6 per cent. Not that we should be so surprised at the figures: Conservative-led governments and high levels of unemployment tend to go hand in hand.

The party was in power - either on its own or in coalition - for all but three of the years from 1918-39 during which time unemployment rose sharply and remained consistently high. In the ship-building town of Jarrow in the North-East in 1934, more than two-thirds of workers were unemployed. Two years later, 200 of the town's jobless made a 291-mile march to London to protest about their predicament and hand in a petition at 10 Downing Street. Tory Prime Minister Stanley Baldwin refused to meet them.

Fifty years later, and another Conservative government, that of Margaret Thatcher, also presided over record levels of unemployment. Using the new method of calculating unemployment introduced by the Conservatives, unemployment rose from 1.25m in May 1979 - the month that James Callaghan's Labour government left office - to 3.02m by 1983. Britain's manufacturing base was destroyed by the government's harsh monetarist policies: in 1983 the UK became a net importer of manufactured goods for the first time since the Industrial Revolution. 'Gizza job', the catchphrase of Yosser Hughes in Alan Bleasdale's TV drama Boys from the Blackstuff, became the slogan of the era.

Unemployment rose to nearly 3m again in late 1992 under John Major's Tory government. It was during that policy-induced recession of the early 1990s, that Chancellor Norman Lamont infamously told Parliament: "Rising unemployment and the recession have been the price that we have had to pay to get inflation down. That price is well worth paying." What is it about Conservative governments and unemployment? Cynics would argue that the Tories are quite relaxed about high levels of unemployment because having a pool of unemployed workers keeps trade unions in their place and exerts a downward pressure on wage levels. But there was a period in their history when the Conservatives were not the natural party of unemployment.

After the war, maintaining full employment became an economic priority for both major parties. Clement Attlee's Labour governments of 1945-51 kept unemployment below two per cent. A new, progressive generation of Conservative politicians were determined to show that they, too, could be trusted on the jobs front. Harold Macmillan, who as MP for the industrial town of Stockton in the 1920s and 30s had seen at first hand the devastating effect that unemployment has on communities, was determined, when he became prime minister in 1957, to avoid any return to the pre-war era.

In 1958, Chancellor of the Exchequer Peter Thorneycroft, a proto-Thatcherite who had wanted to cut public spending even though he acknowledged that doing so would lead to a rise in unemployment, resigned - along with his Treasury team - in protest over Macmillan's spending plans. In 1962, as unemployment headed towards 800,000, Macmillan sacked his deflation-minded Chancellor Selwyn Lloyd and replaced him with Reginald Maudling, who believed in more expansionary policies.

Down the ages we can divide the Conservative attitude towards unemployment into the 'It's a price worth paying' group - which includes Thorneycroft, Thatcher and Lamont - and the more compassionate 'One Nation' Tories like Macmillan, who appreciated unemployment for the social evil it is and did everything they could to keep the jobless total down. The question is - which group does David Cameron belong to?

Dave has promoted himself as a caring conservative - someone who believes that there is such a thing as society. Now he faces the acid test. If Cameron really is a progressive, will he do a Macmillan and act to prevent any further rises in unemployment? That would mean replacing his deflation-minded Chancellor George 'Slasher' Osborne - in the same way that Macmillan replaced Selwyn Lloyd in 1962. It would mean changing course and putting economic growth - and job creation - before government spending cuts.

Is Dave the son of Thatcher – or the heir to Macmillan? If it's the former - and all the evidence so far suggests that is the case - then place your bets on the jobless rate once again hitting the 3m mark by the end of next year.