Why Middlesbrough will bear a disproportionate share of George Osborne’s cuts
I came across a statistic which disquieted me the other day. Some 43 per cent of jobs in my home town of Middlesbrough are in the public sector. That’s higher even than the average for the North-East region where around one in three workers are employed by the public purse. It brought to me the first inkling of what it might mean in the real world if 600,000 jobs really are to be axed as a result of the cuts which the Chancellor, George Osborne, is intending to bring in over the long months to come.
It has started already. A friend was on the phone this week telling me that 500 jobs were going in the primary healthcare care trust. The same day the local council in Redcar, which covers the area where 1,000 steelworkers lost their jobs in February, had been instructed to make a further £3.1m in cuts on the current year’s budget – far in excess of its share of the cuts needed to address the national deficit. That was in addition to a £9.8m “value for money” savings target the authority is already pursuing.
In Middlesbrough itself, where the borough council is the biggest employer in the town, there are To Let and For Sale signs in the shops all along the main shopping thoroughfare. Things are not looking good in an area which has only recently got over the heavy blows suffered during the Thatcher recession of the 1980s.
Of course some cuts are inevitable. That is the price of bailing out the banks to prevent global financial meltdown, a fact which many seem to have forgotten in the rush to blame Labour mismanagement for all our woes. Yet George Osborne and his colleagues seem intent on cuts which are too fast and too deep and it is places like Middlesbrough which will bear the brunt of the cost.
There is much union anger in the air, with talk of a series of major strikes to “force the Government to change direction,” as one union leader put it. Other unions are taking a more measure approach, with some having already been, we learned last week, in unpublicised talks with senior Tories to lay the groundwork for a meeting between David Cameron and the TUC general secretary Brendan Barber.
Talking is, at this stage, the sensible action. Union members have expertise and insights to offer on where economies could be made to shield the most vulnerable. But places like Middlesbrough expose the basic flaw in the Osborne strategy to shrink the state and assume that the third sector with fill the gap on social needs and that the private sector will fill the vacuum to create jobs. Relying on Big Society volunteers and motivated members of the middle class to takeover from curtailed council services will be very hit and miss. And the private sector has been withdrawing jobs in Teesside rather than creating them. There isn’t the diversity across the economy there that there is in wealthier parts of the country.
Worse still, public spending cuts of 40 per cent could kill off the region’s burgeoning green industries. Nissan is pioneering the building of electric cars in Washington and companies like the American firm Clipper are part of a growing offshore wind power industry. Unless a clearer commitment to sparking a low carbon industrial revolution comes from the government then private firms will cease to invest in creating the skilled workforce such places need to compete globally in the 21st century. The region’s most talented young people will move away.
Structural damage could be done to the economy in places like Middlesbrough which are so dependent on public sector jobs. If cuts are made with across-the-board ruthlessness entire towns may be blighted for decades. Unless the government addresses these major regional imbalances the future can only be one of foreboding.
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