The article discusses government policies towards unemployed people in the context of the development of ‘fair employment’ policy in Northern Ireland. It presents results from a survey of long-term unemployed people in West Belfast which challenge the direction and content of existing training and employment schemes, and their capacity to address inequalities in unemployment between Catholics and Protestants. The article argues that current supply side labour market policies are having limited impact in Northern Ireland and goes on to explore policies to influence labour demand. On the basis of interviews with employers, a number of policies are advocated, including giving priority to recruitment of long-term unemployed people in areas of high unemployment by means of making grant aid conditional.