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The intrusiveness of the means test and the insensitive manner of officials who carried it out frustrated and offended the workers. The government gave up the Gold Standard in The gold standard was a way of making sure that the pound kept its value and Britain did not suffer from the inflation that had ruined Germany's economy in and Unfortunately, it also made it difficult for businesses to borrow money for expansion because interest rates were high.
Similarly it made British exports expensive, depressing staple industries further. Removing the gold standard helped, but the millions of unemployed in the traditional industries noticed little improvement in their lives. The Unemployment Act separated dole and insurance benefits, and the 10 per cent cut in dole was reversed.
The UAB took over some of the work of the Labour Exchanges and continued to administer the dole and means test. UAB officials were less severe than officials from the Public Assistance Committees , although reports from the Trades Union Congress TUC in the s show that there was still a great deal of discontent with the low levels of benefit.
The UAB set up training schemes and provided help to workers who wanted to move to another area to find work. Older unemployed men were sometimes given allotments to grow vegetables or raise poultry and rabbits.
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Society went some way towards accepting that unemployment was not a failing of the people, dispelling the notion that the poor could work if they really wanted to. In the government passed the Special Areas Act. The Act identified South Wales, Tyneside, West Cumberland and Scotland as areas with special employment requirements, and invested in projects like the new steelworks in Ebbw Vale. Success of the Act was limited because the level of investment was not high enough and it was not until the late s that the shadow of unemployment lifted from Britain, thanks in part to government investment in rearmament.
Despite the failings of government action, few people actually starved to death as a result of unemployment - the dole was intended to keep the unemployed alive and it had done exactly that. Some commentators, such as the novelist George Orwell, believed the limited level of assistance was a key reason why there was no major social unrest in the period, and explained why extremist political parties made little headway in Britain even though they prospered in Germany.
In October there was a large-scale march on London by workers from all over the country. Trade unionists played a major role in organising the march and in arranging food and shelter for the marchers. They presented a petition to Parliament demanding the abolition of the means test and protesting about the 10 per cent cut in benefits.
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Probably the most famous march was the Jarrow Crusade of In October, men chosen from hundreds of volunteers began a mile march to London to present a petition to the Prime Minister, Stanley Baldwin. Again, unions helped to organise the march, providing food and shelter. The government was pressed on why it did not give Jarrow contracts for Royal Navy ships which would have created much needed work but no answer was given.
The marchers returned to Jarrow by train, empty handed.
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The cutbacks went hand in hand with a reform of labour market laws that was supposed to make it easier for jobseekers to get back into employment. The combination of worse conditions for those who had to exist on unemployment benefits and easier entry into the job market was supposed to reduce the high German unemployment rate. But did it work?
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The answer to this question is still the subject of a fierce debate. Yes, say those defending the reforms: just look at the unemployment rate. No, says the opposing camp. The supposed job miracle is a fudge. Instead of being employed full time, people now work in several part-time or so-called "mini jobs".
According to the proponents, thanks to the Hartz reforms real wages in Germany came down and the country became more competitive. Their opponents counter that people are paid so little that often they have to supplement their meagre income through unemployment benefits even if they do have a job.
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In any case, the political fallout for the German Social Democrats will make for an uncomfortable subject for Ed Miliband to study. Germans hated the Hartz reforms. The tradition of Monday demonstrations, which 15 years before had brought the GDR to its knees, was revived.
This time the demonstrators raged against what they called social destruction. Schroeder's SPD not only lost the elections in September , the controversy about the reforms also split the party. Subsequently, Die Linke The Left emerged as an independent party that ever since eats into the electorate of the Social Democrats. Nine years on, though, the Hartz reforms are increasingly seen as a success story.
Germany evolved from the sick man of Europe into the strongest, most stable European economy. The SPD, however, still feels uncomfortable with the legacy.