Only one in four workers in the UK have successfully managed to escape low-paid employment in the last decade, a new report reveals.
The report – Escape Plan – written by the Resolution Foundation for the Social Mobility and Child Poverty Commission, found that only 25% of low-paid workers were able to permanently escape the low-pay poverty trap over the course of an entire decade.
The majority of workers were hit by an unenviable case of one-step forward and two-steps back, falling back into low-paid employment whenever they managed to escape.
12% were permanently stuck in dead-end low-paid jobs for each and every year over the last decade, forced to survive on low wages with limited opportunity for progression.
Workers who were able to escape the low-pay poverty trap saw their wages grow by an average of 7.5% in real terms over the decade, while those who were unable to escape low paid work saw their wages grow half as fast (3.6%).
The Resolution Foundation used official data to track workers over a decade to find out how far up the employment ladder they were able to progress. The independent think tank also investigated what factors may have played a part in pay progression.
Several factors were identified as being positively associated with escaping low paid employment, such as a higher level of education and a ‘positive outlook’. Businesses who assist with career development and offer greater opportunities for progression into higher-paid positions were are also a major factor, says the Resolution Foundation.
However, the report identifies a number of significant barriers to pay progression including disability, gender, part-time employment, being a single parent or an older worker.
The strong link between part-time employment and poor pay progression will be particularly disconcerting for the 6.8 million people currently working part-time in the UK – three-quarters of whom are women.
Part-time workers are offered fewer opportunities to progress within a company to higher-paid positions than full-time workers, say the Resolution Foundation. The hospitality industry such as restaurants and take-aways were found to have particularly poor escape rates.
Vidhya Alakeson, Deputy Chief Executive at the Resolution Foundation, said:
“Britain has a long-standing low pay problem, with over a fifth of the workforce in poorly paid jobs. But the limited opportunities for escaping low pay is just as big a concern as it has huge consequences for people’s life chances.
“While relatively few workers are permanently trapped in low pay, just one in four are able to completely escape. More permanent escape routes are needed for the huge number of workers who move onto higher wages but fail to stay at that level.
“Some groups clearly find it more of a challenge than others to rise up the pay ladder. Breaking down the barriers to promotion faced by disabled people, single parents, part-time and older workers is crucial to reducing the share of low pay across the workforce.
“We know that even in sectors dominated by low pay it is possible for staff, assisted by employers, to progress their career and earn more. But for this to happen we need more employers to take the issue seriously and have effective plans to promote pay progression.”
The Rt Hon Alan Milburn, Chair of the Social Mobility and Child Poverty Commission, added:
“The majority of Britain’s poorest paid workers never escape the low pay trap. Too many simply cycle in and out of low paying jobs instead of being able to move up the pay ladder.
Any sort of work is better than no work but being in a job does not guarantee a route out of poverty.
> There speaks someone who has never had to do “any sort of work”…
“This research provides compelling evidence for employers and government to do more on pay progression. It is a powerful argument for Britain to become a Living Wage country.”
Source – Welfare Weekly, 11 Nov 2014
This article was written by Patrick Wintour, political editor, for The Guardian on Monday 20th October 2014
Britain is on the brink of becoming a nation permanently divided between rich and poor, according to the Social Mobility and Child Poverty Commission in its second annual state of the nation report.
The 335-page document is likely to be a reference point against which the government’s anti-poverty record will be judged, and to feature strongly in opposition party manifestos for the 2015 general election.
The report says all three main Westminster political parties are lamentably failing to be frank with the electorate about the fact there is no chance of meeting the government’s statutory child poverty target by 2020.
It also predicts that 2010-2020 will be the first decade since records began that saw a rise in absolute poverty – defined as a household in which income is below 60% of median earnings. A rise from 2.6 million households in absolute poverty to 3.5 million is now expected.
The chair of the commission, the former Labour cabinet minister Alan Milburn, said: “Muddling through will not do when the mismatch between needs and anti-poverty government policies are widening.”
Asked whether the government had responded to his first report, he said:
“It is like water from the stone. Our plea is not just to the current parties of government … They are great at talking the talk, the issue is whether they can walk the walk. The policies lack the scale to move the dial.”
Milburn attacked the government for failing to agree a child poverty strategy due to a coalition row.
“You cannot have a situation where government ministers first discredit a target and then fail to agree a new target and then go back to a discredited old target,” he said. “That is beyond a Whitehall farce.”
The report warns that “2020 could mark a watershed between an era in which for decades there have been rising living standards shared by all and a future era where rising living standards bypass the poorest in society.”
It suggests that the link between effort and reward, on which social mobility relies, has been broken by changes in the housing market – with home ownership rates halving among young people in 20 years – and the labour market – with 5 million workers trapped in low pay.
When combined with cuts in welfare and public spending, these changes put Britain on track to become a permanently divided nation.
The report calls on the next government to supplement the existing targets with new measures to give a more rounded picture of poverty and to amend the legislation to set out a new timescale for achieving them.
The commission made six major recommendations:
• The UK should commit to implementing a living wage by 2025 at the latest.
• The Office of Budget Responsibility should publish an assessment of each Budget for its impact on social mobility and child poverty.
• Half of all workplaces with more than 10 staff should offer quality apprenticeships.
• New forms of housing tenure through expanded shared ownership schemes and reform of the private rented sector.
• The best teachers should be paid more to teach in the worst schools to help end illiteracy and innumeracy in primary schools by 2025 and halve the attainment gap in secondary school by 2025. It suggests teachers should get a 25% pay rise to work in the most challenging schools.
• Unpaid internships to be made illegal and 5,000 more pupils from a free school meals background to be going to university by 2020. It proposes that the extra 100,000 university places by 2020 give universities a unique chance to find the extra 5,000 places, with the Russell group admitting 3,000 more places for state schools, using textual admission processes.
Milburn said internships had become a new rung on the professional ladder and were being abused by the middle classes and people from private educational backgrounds.
The report highlights that child poverty, set against the 2010 Child Poverty Act, was at a historic low in 2012-13.
But it adds:
“The bad news is that real wages are still falling while jobs are becoming less secure. Housing costs are straining the link between effort and reward that should be at the heart of a fair and socially mobile country and different parts of society are having different experiences of the recovery with big variations by income age family type and region.”
It also finds
“a higher proportion of jobs are insecure and low paid and 5 million people earn less than the living wage”.
Milburn also challenged Labour’s promise to commit to a minimum wage of £8 an hour by 2020, saying the number was less ambitious than what has been achieved in the current parliament. Labour said its policy was to raise the minimum wage to 58% of average earnings – higher than the current average.
The report also warns that money will not be available in the next parliament to drive an anti-poverty fight. Milburn said:
“The impact of welfare cuts and entrenched low pay and welfare cuts will bite between now and 2020. The pace of fiscal consolidation has been slower than anticipated, meaning over 40% has been deferred to the next parliament.
“Each of the main parties are committed to eye-wateringly tight spending cuts. None of them have made much effort to reconcile the social ends they say they want with the fiscal means to which they are committed.
“In particular plans, to cut in-work support in real terms in the next parliament can only make the working poor worse off, not better off.”
The report adds:
”The current proposal for tax-free childcare is complicated, with resources focused on those with the highest incomes – the wrong priority at a time austerity.
“In education the attainment gap remains unacceptably wide and static – almost two-thirds of children fail to achieve the basics of five GCSEs including English and maths. Poor children are less likely to be taught by good teachers.”
Source – Welfare Weekly, 24 Oct 2014
Nearly half of children in parts of the North East are living in poverty, shocking new figures show.
In Elswick, Newcastle, more than 47% of children are living below the breadline, making it one of the most deprived areas in the region, according to the Campaign to End Child Poverty.
This is in comparison to just 3.6% of children in Stocksfield, Northumberland, who are living in poverty.
Children from the North East’s most deprived areas have today taken up the fight to end child poverty, by marching on Parliament and thrusting their own manifesto under MP’s noses.
Chair of End Child Poverty David Holmes said:
“These figures reveal just how widely and deeply child poverty reaches into our communities, even those areas generally regarded as well off.
“Far too many children whose parents are struggling to make a living are suffering as a result and missing out on the essentials of a decent childhood that all young people should be entitled to. We can and must do better for our children.
“Poverty ruins childhoods and reduces life chances. Failing to invest properly in children is a false economy: already child poverty costs the country £29bn each year and in the long run taxpayers will foot an even higher bill for correcting the damage.
“We are calling on politicians of all parties to urgently set out a clear roadmap towards ending child poverty which includes the additional actions needed and the measures by which progress will be tracked.”
Today’s figures are based on the proportion of children living in low income households.
Either their families are in receipt of out of work benefits or in receipt of in-work tax credits or their income is less than 60% of median income after housing costs.
On average throughout the UK, nearly one in six children are classified as below the poverty line before housing costs, while one in four are in poverty once housing costs have been deducted from their income.
Alan Milburn, who chairs the Social Mobility and Child Poverty (SMCP) commission said current levels of child poverty in the North are a “moral outrage” and have to change.
The former Labour cabinet minister said:
“Poor kids in the region are four times as likely to be poor adults.
“The poorest kids in the region’s schools face a double whammy. They arrive at primary school less ready to learn than their more privileged peers and only a third leave primary school with the required levels of reading and writing.
“Two in three of those kids then leave secondary school without five good GCSEs. The challenge we have in this country is at large in the North.”
According to the North East advisory group on child poverty in the North East figures show that in some areas, noticeable improvements have been made.
Against many indicators the North East is no longer the region with the worst levels, but there is no cause for complacency, says chair of the North East Child Poverty Commission, Murray Rose.
“Child poverty remains a real and serious problem for the North East,” he said. “Worryingly, there are signs that, while ‘relative poverty’ has been falling, this is partly due to falling average incomes, and ‘absolute poverty’ has begun to increase.
“The Institute for Fiscal Studies has suggested that child poverty is likely to increase, rather than decrease, over the next six years, meaning the Government will fall well short of its child poverty reduction targets.
“Another area of real concern is the level of severe poverty experienced by some families and children who are being impacted by changes to the social security and benefits system – the ‘welfare reform’ programme.
“Many of these impacts are not yet showing up in official statistics, and tend to be masked within wider averages.”
Source – Newcastle Evening Chronicle, 15 Oct 2014
Action is needed to tackle “outrageous” levels of child poverty in parts of the region, campaigners have urged.
It comes as figures suggest nine of the 12 North East councils have wards where more than 20% of children live in pockets of severe poverty.
The worst areas were in Middlesbrough (33%), Hartlepool (29%), Newcastle (28%) and South Tyneside (26.5%).
The North East Child Poverty Commission warned inflation, unemployment and cuts could see levels of deprivation spiral.
> Oh wow – they’re on the ball, aren’t they ? What do they think has been happening these last few years ?
The group has produced a map of child poverty for every ward, council and constituency in the region.
The map classes children as living in poverty if they are in families on out of work benefits or work tax credits where income is less than 60% of median – before housing costs.
Alan Milburn, who chairs the Social Mobility and Child Poverty (SMCP) commission said current levels of child poverty in the North are a “moral outrage” and have to change.
> MP for Darlington from 1992 until 2010. He served for five years in the Cabinet, first as Chief Secretary to the Treasury from 1998 to 1999, and subsequently as Secretary of State for Health until 2003.
A strong supporter of Tony Blair‘s policies, especially his continued policy of increased private involvement in public service provision
Following his resignation as Secretary of State for Health (to spend more time with his family), Milburn took a post for £30,000 a year as an advisor to Bridgepoint Capital, a venture capital firm heavily involved in financing private health-care firms moving into the NHS, including Alliance Medical, Match Group, Medica and the Robinia Care Group. He has been Member of Advisory Board of PepsiCo since April 2007.
Another New Labour “socialist” you could trust with your life… if you’re tired of living.
The former Labour cabinet minister said: “Poor kids in the region are four times as likely to be poor adults.
“The poorest kids in the region’s schools face a double whammy. They arrive at primary school less ready to learn than their more privileged peers and only a third leave primary school with the required levels of reading and writing.
“Two in three of those kids then leave secondary school without five good GCSEs. The challenge we have in this country is at large in the North.
“Children post 16 are more likely to drop out of education than anywhere else in the country. The region also has the lowest rate of children going to university.
“It is more clear than ever that effective collaboration at all levels of government is required to help ensure the right conditions for children living in these deprived communities.”
The figures come three days before a group of young people from the region march on Parliament to give MPs their views on how to tackle child poverty.
As reported last week, more than half of the 38-strong cohort of youngsters that have been working on a children’s manifesto hail from the region.
They will present their national findings to an All Party Parliamentary Group on Wednesday.
Source – Sunday Sun, 12 Oct 2014
This article was written by Andrew Sparrow, political correspondent, for theguardian.com on Sunday 8th June 2014
Fresh evidence that the government will fail to hit its child poverty goals has emerged in a report showing 3.5 million children are expected to be in absolute poverty in Britain in 2020 – almost five times as many as the target.
It said there was a credibility gap at the heart of the government child poverty strategy and simply focusing on trying to get more people into work was not the answer.
Under the Child Poverty Act 2010, passed by Labour just before it left office, the government is committed to getting relative child poverty (the proportion of children living in households on below 60% median income) below 10% by 2020 and absolute child poverty (the proportion living in households below what 60% of median income was in 2010-11, uprated for inflation) below 5%.
The commission, chaired by the former Labour cabinet minister Alan Milburn, with Gillian Shephard, the former Conservative cabinet minister, as deputy chair, has repeatedly warned that the targets have little or no chance of being met.
On Monday, alongside its formal response to the government’s draft child poverty strategy for 2014-17, it publishes research on how many parents would have to find work for the child poverty targets to be met.
Iain Duncan Smith, the work and pensions secretary, argues that addressing poverty by just increasing benefits is flawed and the root causes must be addressed by getting more parents into jobs. But the commission says “ending poverty mainly through the labour market does not look remotely realistic by 2020″. In too many cases it simply moves children from low income workless households to low income working households.
“The reality is that too many parents get stuck in working poverty, unable to command sufficient earnings to escape low income and cycling in and out of insecure, short-term and low-paid employment with limited prospects.”
To hit the relative child poverty target, parental employment rates would have to reach almost 100% – “far beyond what has ever been achieved anywhere in the world”. Hours being worked would have to increase substantially. Current policies would not enable this to happen.
Even if parental employment reached almost 100%, the absolute poverty target would be unattainable because of the way earnings fell relative to inflation from 2010 to 2013.
The Department for Work and Pensions said it was committed to ending child poverty by 2020 with plans to tackle the root causes of poverty, including worklessness, low earnings and educational failure.
Source – Welfare News Service, 09 June 2014
Until seven years ago, there was a secret room at Darlington station. Just off one of the platforms, between the standard-class waiting room and a cleaners’ storeroom, and set back behind three successive doors, it was small and plain: a desk, a grimy extractor fan and two windows made opaque to passing travellers by reflective material.
Tony Blair used this room when he was prime minister. His constituency, Sedgefield in County Durham, was a short drive away. When he needed to get to London, 260 miles south, he and his entourage would often catch the fast Darlington train, which can take less than two and a half hours.
More usefully still, many other key New Labour figures took the same line, among them Peter Mandelson, Alan Milburn and David Miliband. Altogether, the north-east of England, which contains about a 25th of the UK population, was represented by “a third of Blair’s first cabinet“, noted the veteran anatomist of British power networks, Anthony Sampson, in 2004. (Sampson was himself born in County Durham.) Rarely before had our remotest and often poorest region been such a hub of political influence.
> Of course it could be argued that their only real interest in the region was that it provided safe Labour seats – Mandelson got elected in Hartlepool ! Atriumph of blind devotion over common sense if ever there was one.
When Blair arrived early or his train arrived late, it was felt by Whitehall that the increasingly controversial premier could not just stand on a platform, waiting. Hence the secret room. Now, it is just the station manager’s office. The building around it has gone back to being a market town station with flaking paint and a fragile roof, where isolated passenger footsteps echo in the long middle-of-the-day lull and trains for Scotland and the south of England rattle through without stopping. No current cabinet minister has a north-east seat – only two of its MPs are Tories. Labour’s power base is now in London, Yorkshire and the north-west.
Since the Blair era, the area has slipped in other ways. Between 2007 and 2012, unemployment rose faster than in any other UK region, to more than 10%, the highest in the country. Throughout 2013, as joblessness receded in most of the UK, in the north-east it carried on rising. This year, it has begun to fall a little but remains the worst in the nation.
> And how much of that fall can be attributed to sanctions ? Quite a chunk, I’d guess.
Since 2007, the area’s contribution to national economic growth, measured as gross value added, has shrunk from an already weak 3% in the Blair years to barely 2%. The Northern Rock building society, with roots in the region going back a century and a half, has suffered a humiliating meltdown. The north-east has been, and will probably continue to be, especially harshly treated by the coalition’s spending cuts.
According to the Special Interest Group of Municipal Authorities, a typical council in the region will lose £665 in government funding per inhabitant between 2010 and 2018, the biggest national fall. Meanwhile, public sector employment in the region – the highest in England at more than one job in five – has been falling since 2009, a year before the coalition took office.
At Newcastle United, one of the north-east’s disproportionate number of fiercely followed, rarely successful football clubs, the recent sponsorship of the team shirt tells a similarly dispiriting story: Northern Rock from 2003-2011; Virgin Money, Northern Rock’s current, Edinburgh-based owners, from 2012- 2013; this season, the payday loan company Wonga.
Between 2011 and 2012, child poverty rates in Middlesbrough and Newcastle Central rose to 40% and 38% respectively.
“For as long as anyone alive will remember, this has been a ‘problem region’: a special case, a sick man,” wrote the Newcastle-born novelist Richard T Kelly in a 2011 essay, What’s Left For The North-East?
In recent years, some rightwingers have begun to throw up their hands. “It is at least as hard to buck geography as it is to buck the market,” said the influential Tory thinktank Policy Exchange in 2008. “It is time to stop pretending that there is a bright future for Sunderland.”
And last year the Tory peer Lord Howell suggested the region had “large uninhabited and desolate areas… where there’s plenty of room for fracking“. Weeks later, the Economist described Middlesbrough and Hartlepool as part of “Britain’s rust belt“; “Despite dollops of public money and years of heroic effort… [these] former industrial heartlands are quietly decaying.“
The magazine concluded with an unlikely but ominous comparison: “The Cotswolds were the industrial engines of their day. One reason they are now so pretty is that, centuries ago, huge numbers of people fled them.”
From Darlington, an old and scuzzy two-carriage train chugs east along a branch line towards Middlesbrough. Along the way, it stops at Thornaby-on-Tees, an ex-industrial town beside the river Tees. From the 1840s until the 1980s, the Head Wrightson ironworks here made everything from parts for bridges to parts for nuclear power stations; then foreign competition closed it.
In 1987, Margaret Thatcher visited the site and took a much-photographed walk across a yellowing wasteland of weeds and factory remnants, wearing an inappropriate smart suit but looking unusually pensive. Shortly afterwards, her government, seeking to soften its reputation as the hammer of the north, created the Teesside Development Corporation, and the wasteland was turned into the Teesdale Business Park, a US-style landscape of corporate lawns, car parks and low office blocks.
The blocks are still there, neat and anonymous except for the corporate logos: Barclaycard, the NHS, the privatised services firm Serco. The car parks are full of mid-range vehicles. For three decades, the north-east has been a centre for modestly paid clerical work, such as call centres and the “back office” administrative processes of companies based elsewhere. But at the Teesdale Business Park, “To Let” is the most common logo; some are so old, they have rotted and snapped off.
As with Thornaby, Middlesbrough is a flat riverside town that once grew fast because of iron foundries: from only 25 inhabitants in 1801 to 165,000 in the 1960s. The Victorian centre was built to a grid pattern, like a US boom town, with docks just to the north for exporting iron and coal.
But in 1980 the docks closed, the population began to fall, and a void opened between the town and the river. It is still there, starting a few yards from the town centre; a great windswept triangle of rubble and rust, boarded-up houses, Dickensian wall fragments and roads to nowhere. Derelict waterfront warehouses stand in the distance. A middle-aged security man in a peeling wood cabin guards them. “There’s lots of steel cable in those sheds,” he says. “And lots of people try to steal it.” When asked how long it has been so run-down, he shrugs and says without emotion: “As long as I can remember.“
The town’s population is around 138,000. To a visitor, the long, straight streets of the town centre seem eerily empty of pedestrians. At the sizable railway station, the weekday rush hour sometimes barely exists: at 8.30 on a Friday morning, I counted fewer than a dozen other people on the platforms. The station cafe had not bothered to open.
“If things carry on as they are now,” says Alex Niven, a leftwing writer from Northumberland, “in five years the situation will get somewhere like Detroit.” Several other authorities in the north-east that I interviewed invoked the long-imploding American city, unprompted.
He left the area 10 years ago, aged 18, and now lives in London. “Almost all my friends from school live in London now. When you go back to the north-east, the landscape’s kind of crumbling. There is this sort of sadness. It feels like a people who’ve been weakened, who’ve just been cut loose.”
Geography does not help. “The north-east is at the far corner of the country, but it is separated by more than just miles,” writes Harry Pearson, born near Middlesbrough, in his 1994 book The Far Corner.
“There is the wilderness of the Pennines to the west, the emptiness of the North York Moors to the south, and to the north, the Scottish border… Sometimes the north-east [seems] more like an island than a region.”
It is an island that the HS2 rail project is not currently intended to reach. Meanwhile, the prospect of Scottish independence and the near-certainty of more Scottish devolution threatens to marginalise the region further. “Scotland can already do more to attract inward investment than we can,” says Chi Onwurah, Labour MP for Newcastle Central. “More power for Scotland, in that sense, would not be a benefit for us.”
Pinned to a board in her constituency office is a list of Newcastle food banks. Outside, contrastingly, the grand city centre streets are much busier than in Middlesbrough, full of prosperously dressed people and big branches of the same upmarket chainstores as in richer places.
“Newcastle is the economic capital of the north-east,” she says, “but the centre, especially, is not representative of the region.” A few minutes’ walk farther out, cheap cafes offer soup of the day for a pound, and other scruffy businesses have long ceased to offer anything. “Every time I see a building boarded up,” Onwurah says, “it strikes fear into my heart.”
Onwurah grew up on a Newcastle council estate in the 60s and 70s. It was then a smoky, clattering centre for shipbuilding and other heavy industry, but these were in terminal decline. In 1984, she left to study electrical engineering, then worked away from Newcastle for a quarter of a century, until she was elected as MP in 2010. In the interim, the city reshaped its economy around tourism and nightlife, as an internationally hyped “party city“; around sport, with the 90s resurgence of Newcastle United; and around culture, with the opening in Gateshead of the Baltic art gallery in 2002 and the Sage music centre in 2004.
“It was a very heady time,” says Niven, who supports Newcastle United and as a teenager often travelled into the city from rural Northumberland. “The north-east has a brash, confident side. There’s also often a sense of slumbering potential, that one day a messiah or a revival will come.”
In the 90s and noughties, optimism was most concrete along the river Tyne, which separates Gateshead and Newcastle. Decaying canyons of quayside buildings filled with flash new bars, expensive flats, high-end office space and public art. It was easy to visit Newcastle – which I often did then – and think it was becoming a swaggering, economically self-sufficient provincial city, such as those you find in less centralised countries: another Marseille or Hamburg.
The quaysides are slightly less uplifting now. On the Newcastle side, several bars have shut down. Bridge Court, an enormous, empty office block, has a plaque that reads, “The foundation stone was laid by Mr Eddie George, governor of the Bank of England, on 22 September 1994“; another sign says, “Demolition. Keep Out“.
Niven sees the north-east’s revival under the Blair government as “largely superficial. In the long term, it didn’t lead to better jobs and infrastructure. You can’t base the revival of a region on nightlife and football.“
Onwurah, whose grandfather worked in the shipyards and whose mother grew up on the quayside, is less scathing: “Labour did a lot in the north-east, to stop the concentration of economic power elsewhere getting much worse, but we didn’t overcome the underlying issue. We haven’t got the previous sources of economic growth. And we haven’t got enough skills and entrepreneurs.” A successful region, she says, has a “critical mass” economically. “If you don’t have critical mass, to attract people and investment, you go into decline. We’re on the edge of that.” She holds up her hands and makes a flat, wobbling gesture: “We’re teetering.“
In Middlesbrough, the riverside wasteland has been earmarked for regeneration – as a new area called Middlehaven – for almost 30 years. Recessions, anxious developers and the town’s wider economic struggles have confined most construction to the area’s fringe. Yet there is one exception: an incongruous silvery curve of a building in the centre of the emptiness. Middlesbrough College opened in 2008; it houses engineering workshops, training kitchens, hair and beauty salons, and other vocational course facilities for 16- to 18-year-olds. In 2011, it was rated “good with outstanding features” by Ofsted. Walking down the college’s bright and warm internal street, seconds after being out in the dereliction, and seeing students at work in the glass-walled rooms or rushing back and forth, it seems absurd to think that Middlesbrough does not have a long-term future. But in the window of the in-house Jobs Shop, only half a dozen positions are offered. One is at a local seaside care home for the elderly: the successful applicant will earn £107.20 for a 40-hour week.
Further education is one of the north-east’s few growth industries. “Without it, I dread to think what some of the cities would be doing,” says Andy Pike, director of Newcastle University’s Centre for Urban and Regional Development Studies. “A lot of people want to come and study in the north-east” – academic standards are high, living costs low and the nightlife boisterous. But, Pike adds, “We have a problem with graduate retention: not as many stay as could do. It’s a thin labour market. The people who stay typically will not end up in graduate jobs. And then local non-graduates will be bumped out of the labour market altogether.”
> But the influx of students also puts a strain on rented accommodation. Certainly in Sunderland (which seems to be ignored in this article) its noticable that streets near to the university appear to becoming student-only ghettos – private landlords presumably looking to maximise profits by packing them in.
In the north-east, the increasingly de-skilled, low-paid labour market of Britain under the coalition is at its meanest. Full-time wages are the lowest of any UK region.
In 2007, the Middlesbrough Institute of Modern Art, or Mima, cheekily echoing New York’s Moma gallery, opened on a redeveloped square in the town centre. It looks the part: slick, glassy exterior; high-ceilinged interior; dozens of attentive young staff in Mima T-shirts. It offers an ambitious programme of community events and exhibitions – currently, Art And Optimism In 1950s Britain. Yet a gallery cannot make a town centre vibrant by itself. On Thursday evenings, it opens late, but on the Thursday I visited I saw four other visitors in half an hour.
Since the 1930s, governments have tested regeneration projects in the region. Edward Twiddy is one of the latest reformers to be despatched from London. Since 2012, he has been head of the North-East Local Enterprise Partnership (Nelep), a typically optimistic coalition creation, which aims to get business and local councils – almost all Labour – to work together for the area’s economic benefit.
Twiddy previously worked at the Treasury and for the Foreign Office in Iraq. He is slight and cerebral-looking, and speaks mostly in fluent Whitehall jargon. “The region’s still going through some fairly big structural changes,” he tells me. “The north-east was over-specialised – in coal, for example. Nowadays, people need to be able to approach life differently. You’ve got to be able to travel, to be competitive… Economic activity will move [away] if you cannot convince the market that yours is the right place to work.” But even Twiddy is off: he is set to leave Nelep for Atom, a new digital bank to be based “in the north-east“.
I ask how many staff Nelep has. Twiddy pauses: “The core is four. Then there are people doing discrete pieces of work for us, people loaned to us, people I’ve scrabbled around for, got a few pennies for… There are about 11 or 12 of us in all.” Nelep replaced One North-East, a regional development agency created by the Blair government that had 400 staff.
Yet there is a more economically independent side to the region. A few miles east of the centre of Newcastle, a side road leads steeply downhill to a half-hidden stretch of the Tyne. In the early 1980s, the quays here were a rotting ladder of derelict docks and slipways. Then two local property developers, Freddy and Bruce Shepherd, began to buy the land, clean it up, reuse the old cranes and rent out the quaysides: first to companies involved in North Sea oil, then to others involved in undersea cable-laying and offshore wind power.
Shepherd Offshore now stretches along the Tyne for miles. In its riverside boardroom, with giant reels of cable as tall as tugboats looming outside the windows, Twiddy makes the introductions over coffee served in Versace mugs. The Shepherds are heavyset men with fierce handshakes and slightly loose tongues. “We are the raggy end of the couch up here in the north-east,” Bruce says. Freddy interjects: “We get nothing easy. Not off the government. Without us, there would be nothing here but two abandoned shipyards.” “Up and down the river, we’re close knit,” Bruce says. “There are more than 2,500 jobs. We’re a manufacturing base. We train people. But we’re forgotten down here.”
How many jobs were there in the days of the shipyards? “Six and a half thousand,” Freddy says. “I was an apprentice in the shipyard here. You’re never going to get back to those numbers.”
Bruce offers a tour of the quay in his spotless Range Rover. As we drive, he points out other cars parked nose to tail at the roadside: “There’s never enough parking. The number of people working here keeps growing.” We leave the road and enter a muddy construction site, scheduled to house a new national research centre for offshore and undersea technology, a collaboration between the Shepherds, Newcastle city council and Newcastle University. Bruce ploughs through puddles, his property developer’s patter in full flow, then stops his spattered Range Rover at a fence that faces the famous old Swan Hunter shipyard. It is still a wasteland, but new developments are encroaching from all directions.
Another sign of entropy reversed would be to attract more southerners; not just to study but to work. Twiddy is one. Tony Trapp is another. Raised in London, he has been one of the area’s handful of legendary entrepreneurs since the 70s. Then, he helped invent an undersea plough for laying seabed pipes and cables by driving a specially adapted tractor up and down a beach in Northumberland. Several companies and clever products later, he now runs Osbit Power, which makes self-stabilising gangways to connect offshore wind turbines to maintenance vessels.
The enterprise is based in a previously derelict hotel in sweeping Northumberland countryside. Behind its unkempt walls, purposeful-looking young employees cluster at desks or in front of whiteboards, while Trapp, a creased man of 68 with a murmuring voice but an intoxicating can-do aura, briefs them and holds court. “I’ve always based my businesses on clever graduates,” he says later. “I’ve taken on hundreds, some from Newcastle University, from Northumbria University. For offshore engineering, the north-east is the best place in Europe.“
But in other ways he sees the local economy as still underpowered. “Persuading clever people from the south to come here is quite hard. It’s not just the image they have of the north-east – it does have the worst statistics, in health, in booze… If you look at many CEOs of big companies here, they don’t live up here. They live in Surrey, London. It’s insulting, in a way.” For a second, he looks his age. “I don’t have the solution to the north-east.”
It is not Twiddy’s job to voice such doubts. Instead, he takes me to the coast, not far from where Trapp tested his undersea plough. It is a brilliant blue day, and the often luminous north-east light is at its most seductive. We drive into the small town of Blyth, where there has been a port since the 12th century, which suggests the region has more staying power than the doom-mongers claim. We approach a cluster of shiny, towering blue-grey sheds, where the National Renewable Energy Centre tests blades for offshore wind farms. In December, the government increased its subsidy for this source of electricity, a rare gift from Whitehall to the north-east in the age of austerity. Twiddy sounds like a small boy for a moment: “The crane for lifting the blades is just amazing!“
We walk to one of the windowless sheds. Inside, spot-lit, suspended above an expanse of polished concrete floor, a single pale grey blade, with weights and cables attached to it, flexes slowly up and down, vast and stately as the tail of a whale. The only sound is the hum of the air-conditioning. In a space the size of a small cathedral, but clean and tidy as a science lab, only two employees are visible: distant, purposeful figures in dust coats.
Working here looks much better than working in a chilly shipyard, a call centre or a nightclub, or for most of the region’s previous economic saviours. But Mill says the centre has a staff of 69. The north-east will need an awful lot more workplaces like it this if it is going to stop teetering.
Source – The Guardian 10 May 2014
The number of children whose parents cannot find full-time work and are forced to work one or more part-time jobs has soared by 46% since the coalition government came to office, latest figures show.
Figures obtained by Newcastle Labour MP Catherine McKinnell show that between 2010 to 2013 the number of children whose parents were working part-time hours rose from 443,000 to 646,000, which Labour claim is a significant blow to the government’s child poverty strategy.
“While Ministers have been squabbling about how poverty is defined, these figures show how much tougher life is for families under David Cameron’s government.
“Getting parents into work should be the key step towards increasing their standard of living and reducing the number of children living in poverty. But for far too many families at the moment being in work just isn’t enough to meet the basic cost of living.
“Labour will back families and help to make work pay. We will expand free childcare for working parents, strengthen the minimum wage and crack down on exploitative use of zero-hours contracts. And we also want to introduce a lower 10p starting rate of tax, to help 24 million people on middle and low incomes.
“But while ordinary families are struggling with a cost-of-living crisis, David Cameron has given a £3 billion tax cut to the top one per cent of earners. We’d reverse that after the election as part of our plan to get the deficit down in a fairer way.”
The government has been forced to shelve plans to redefine the definition of child poverty which is currently defined by a households income. Children are said to be living in poverty if their parents total income is less than 60% of the national average.
Secretary of State for Work and Pensions, Iain Duncan Smith MP, wanted to change the way child poverty is measured, by taking a child’s family life into account as well as a family’s income, such as a child’s education and whether or not they come from a workless household.
Iain Duncan Smith was close to securing a deal with the Liberal Democrats, but it is understood that the plans were vetoed by George Osborne at the Treasury Department.
Liberal Democrat Education Minister David Laws, told the BBC:
“I can’t get into the entrails of why the Conservatives have been unable to agree and come forward with a serious set of measures. They will have to explain that.
“What I’m not willing to do is to allow this key debate over measures which are so important in driving the right policies in future to simply be vetoed by one party.”
> “I can’t get into the entrails…” That’s a weird and rather unpleasent scenario. Bet that’ll be appearing in a future edition of Private Eye.
He added: “The Liberal Democrats have a very clear idea of what the new measures should be, and we’re not going to allow the Conservative Party simply to end discussion of this.”
Shadow Work and Pensions Secretary Rachel Reeves MP said:
“Child poverty is set to rise by 400,000 under David Cameron’s government, while ministers squabble over the way poverty is defined.
“The row between George Osborne and Iain Duncan Smith does nothing to help working people who are £1,600 worse off a year because of the cost-of-living crisis.
“If David Cameron was serious about cutting child poverty he would scrap the bedroom tax, introduce a compulsory jobs guarantee, strengthen the minimum wage, incentivise the living wage and extend free childcare for working parents.”
The former Labour MP who chairs the current government’s Social Mobility and Child Poverty Commission, Alan Milburn, said: “A strategy which cannot be measured is meaningless.
“Despite taking more than a year to think about it, the government has drawn a blank, apparently unable to reach agreement on what a new set of measures should look like.
“The government has ended up in a no-man’s land where it has effectively declared its lack of faith in the current measures but has failed to produce an alternative set. This is beyond Whitehall farce.”
> The last few years have been a Whitehall farce… it’s just a pity Labour didn’t feel the need to start kicking up before. I’m sure the proximity to the next General Election is purely coincidental…
Source – Welfare News Service, 04 March 2014