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Cities under Mrs Thatcher
Cities have long been centres of both employment and deprivation but in the 1970s and 1980s, they were regarded as being economic problems, rather than solutions, and centres of poverty rather than prosperity. However, just as it always has, the picture varied between cities.
Many northern cities saw a big drop in their employment rates…
One of the most well-known images associated with the Thatcher era is miners’ strikes and pictures of northern cities experiencing high unemployment. In fact, the decline in manufacturing jobs and in manufacturing as a share of GDP had started in the decade before Thatcher, with manufacturing declining from 20 per cent of GDP to 18 per cent and jobs falling from 31 per cent to 24 per cent between 1971 and 1981. However, the evidence suggests that manufacturing jobs started to decline more sharply in 1979, and when you look at city level data, it is clear that it hit cities hard.
Sheffield, Newcastle, Sunderland and Liverpool – all cities dependent on traditional industries, entering major decline – are all in the 10 cities with the biggest decrease in employment rate between 1981 and 1991.
It’s interesting to note that London was also in the bottom 10 – this could have been for a whole range of reasons, including London’s economy performing relatively poorly during this time (it only began to grow again in the late 1980s), losing manufacturing jobs (it has a higher proportion of manufacturing employment than widely thought) and London’s population declining.
…While it was often newer towns, especially in the South, that saw rises in employment
As the UK economy as a whole shifted away from employment in manufacturing towards more employment in services, so many newer towns and southern towns benefitted from their emphasis on access to human rather than physical resources. Cities such as Telford, Swindon, Milton Keynes, Worthing and Aldershot all saw significant increases in their employment rate through the 1980s.
Nearly 1 in 3 urban jobs were in manufacturing in 1981; it was just 1 in 8 in 1991
The loss of manufacturing jobs was one of the economic shifts during the 1980s that had the biggest impact on people and places. The data illustrates this starkly. All cities saw their manufacturing employment rates fall, with, on average, manufacturing jobs falling from accounting for 30 per cent of all city jobs in 1981 to 12 per cent of all city jobs in 1991. And while the proportion of GDP accounted for by manufacturing reduced by 2.44 per cent between 1981 and 1991, the proportion of jobs accounted for by manufacturing reduced by seven times that amount, reducing by 18.9 per cent.
The largest drops in manufacturing employment were experienced by Luton, Burnley, Coventry and Derby, and not some of the northern cities with the most media profile during the 1980s. Cambridge, Cardiff, Aldershot and Hastings all experienced lower reductions in manufacturing employment.
Many city populations were shrinking, associated with image problems and the difficult economies
Some cities grew their population rapidly during the 1980s, with Milton Keynes increasing by nearly half as much again. Cambridge, Oxford, Northampton, Peterborough and Reading all grew by more than 15 per cent during the 1980s, with Milton Keynes, Telford, Peterborough, Northampton and Reading growing consistently between 1971 and 1991.
Other cities lost population; Glasgow lost population between 1971 and 1991, with other cities consistently losing people between 1971 and 1991 including Coventry, Manchester, Newcastle, Dundee, Liverpool and Glasgow. This had a long-term impact on the physical fabric of those cities, leaving many struggling with more office space and housing than their population required.
What has the legacy for cities been?
The Thatcher years were a time of enormous economic and social upheaval and cities were amongst the places most affected. Many of the manufacturing jobs lost in the 1980s were concentrated in and around northern cities, which are still recovering from this significant shift today. While long term global trends suggest that manufacturing was always going to become more capital and less labour intensive, one of the long-lasting legacies of Mrs Thatcher’s tenure was lack of investment in the transition that people and places had to make. The Centre’s research looking back to 1901 showed that investment in skills and infrastructure is critical to helping people and places manage big structural transitions; these were not policies pursued under Mrs Thatcher. In addition, lack of investment in building houses and in transport infrastructure contributed to some of the challenges we face today.
Overall, the evidence suggests that Mrs Thatcher’s tenure as prime minister oversaw a significant increase in UK productivity and in deregulation of industries such as financial services. This came with a cost of greater unemployment and inequality, however, with some of these effects most concentrated in northern cities where lack of investment in skills in particular is likely to have had a lasting impact on the resilience of places most affected by industrial decline.
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