The Expansion of Industrial Assistance (1960s)

Economic growth resumed in 1959, but after heady growth and a trade imbalance in 1960, a credit squeeze followed from July 1961, and UK unemployment rose sharply, from around 300 000 in June 1961 to just over 515 000 in June 1963. The rise in unemployment was felt across all sectors of the economy, but was most severe in the engineering and metal industries, and in coal-mining, where supply had caught up with demand and pits were closed, particularly in North East England and Scotland (Table 4.1). Pockets of high unemployment once again appeared, and the hope expressed by the Treasury that spending on local employment measures would soon cease was dashed.1 The measures taken in April 1963, both through the Budget and through legislation to extend the provisions of the 1960 Local Employment Act, were significant in two respects. First, they represented the beginnings of large-scale industrial assistance, separate from the depreciation allowances and the support afforded to agriculture. Second, spatially-based employment policy was to become as much concerned with inducements as with controls, so that the balance of policy shifted away from the ‘stick’ and towards the ‘carrot’. Prior to 1963, local employment policy had operated largely through the mechanisms of Industrial Development Certificates to restrict development outside scheduled areas, and through various physical planning measures to ease the location of firms into these areas, and while financial assistance was available, this was relatively small in scale.