THE ROLE OF THE EMPLOYMENT SERVICE IN REDEPLOYMENT*
| Date | 01 July 1971 |
| DOI | http://doi.org/10.1111/j.1467-8543.1971.tb00853.x |
| Published date | 01 July 1971 |
THE ROLE
OF
THE EMPLOYMENT SERVICE
IN REDEPLOYMENT*
GRAHAM
L.
RE ID^
INTRODUCTION
IN
the third quarter of
1966
the Government, faced by a persistent balance
of payments problem, introduced a series of deflationary policy measures.
These included, in July, a
10
per cent increase in purchase tax and excise
duties, and a considerable tightening of the credit arrangements for the
hire-purchase of motor vehicles. Though the primary purpose
of
these
‘July measures’
was
deflation, they were also intended to accelerate the
process of redeployment in the labour market. Throughout the
1960s,
productivity had been growing only slowly, and the Labour Government’s
National Plan of 1964 had pinpointed labour supply
as
a bottleneck in
the achievement of a faster rate of growth. In addition, the evidence of
a
few productivity agreements was being taken to suggest poor utilization
of manpower and overmanning in most of British industry. Some believed
that there was
a
vast pool
of
under-used labour and that
a
short sharp
burst of deflation would force companies to release surplus manpower
which could then be redeployed into the essential export industries, with
beneficial effects on both productivity and the balance
of
payments. The
Prime Minister, in announcing the July measures, put it thus:
What
is
needed
is
a
shakeout which will release the nation’s manpower,
skilled and unskilled, and lead
to
a more purposive
use
of
labour
for
the
sales
of
increasing exports and giving
effect
to
other national priorities. This
redeployment can be achieved only by cuts in the present inflated level
of
demand.
At the time, some doubts were expressed as to how far the shakeout
would release the right kind of worker, and how far the labour market
was capable
of
such purposive redeployment as was pr0posed.l In any
case, though,
a
shakeout and redeployment policy clearly presupposed
a
considerable increase in redundancy and transitional unemployment,
and posed a severe test for labour market policy.
*
An earlicr version
of
this paper was presented
at
the Congress
of
the International Industrial
Relations Association in Septcmber 1970. Valuable comments on previous drafts were made by
Hilda Kahn,
L.
C.
Hunter, Brenda Thomas, and a number of oficials of the Department of
Employment: none
of
them are responsible
for
errors
and
omissions. The other members
of
the
research team,
D.
I.
MacKay and
F.
Herron, have similarly contributed comments, but they
must accept
a
share
of
credit and blame. Our joint thanks
go
to the Social Science Research
Council, who financed the study.
t
Senior Lecturer in Applied Economics, University
of
Glasgow.
See
G.
L. Reid,
The
Times,
5
September 1966
160
THE
ROLE
OF
THE
EMPLOYMENT
SERVICE
IN
REDEPLOYMENT
16 1
The study of which this paper is the first result set out to examine the
process
of
labour market operations and redeployment in the West
Midlands in the period 1966-68. Four areas were of particular interest.
First, what actually caused the redundancies
?
Were the deflationary
policies responsible for
a
cyclical increase in redundancies; were com-
panies purposely cutting back overmanning in order to increase produc-
tivity; or were the redundancies
a
result of rationalization and ‘normal’
structural change
?
Secondly, how did companies manage the redun-
dancies, in terms of the manpower policies they themselves used
?
Thirdly,
how had redundant workers looked for work, how had they found work,
what kind of jobs had they found, and how efficiently
had
they been
redeployed
?
Fourthly, how effective had the various elements of Govern-
ment manpower policy been in assisting workers to find new jobs?
A
number
of
research methods were used, including interviews with
companies and
D.E.P.
officials, and analysis of published
data
and data
made available specially by the
D.E.P.
However the information pre-
sented here comes largely from
a
household survey of
a
sample of 658 male
workers made redundant from
23
plants in the engineering and metal-
using trades2 during the period 1966-68. This paper analyses the results
of this survey to assess the success and effectiveness
of
the Government
employment service in dealing with redundant job-seekers.
THE
BACKGROUND
TO
THE
STUDY
The West Midlands region is dominated by the large population mass
of the Birmingham conurbation, with Wolverhampton and West Brom-
wich on the west and Coventry on the east (W-B-C). There is in addition
a
rural fringe on the west side
of
the region, and
a
number of smaller
industrial centres outside the main W-B-C axis, notably Stoke-on-Trent,
Worcester, Stafford and Rugby. Three characteristics of the region are
worth noting.
i) The region has generally experienced very low unemployment. The
West Midlands percentage of wholly unemployed has remained below
2
per cent over the years up to 1970, and has always been well below the
national average
:
percentages for the W-B-C area have normally been
lower than the West Midlands average.
ii) The employment structure of the area
is
heavily committed to
engineering and the metal-using trades. Table
1
shows for the West
Midlands and Great Britain the percentage distribution of employment by
industry group in June 1966, just before the July deflationary measures
were announced.
These trades comprise the following Main Order Headings under the
1958
Standard
Industrial Classification: V Metal Manufacture;
VI
Engineering and Electrical Goods;
VIlI
Vehicles and Aircraft;
IX
Other Metal Goods.
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