I came across a statistic that disquieted me the other day. Some 43 per cent of jobs in my home town of Middlesbrough are in the public sector. This is higher even than the average for the north-east region, where about one in three workers is 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 that 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 healthcare trust. That same day, the council in Redcar, which covers the area where 1000 steelworkers lost their jobs in February, had been instructed to make a further £3.1 million of cuts on the current year’s budget — far in excess of its share of those needed to address the national deficit.
In Middlesbrough itself, where the borough council is the biggest employer in 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 that 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 that many seem to have forgotten in the rush to blame Labour mismanagement for all our woes. Yet Mr Osborne and his colleagues seem intent on cuts that are too fast and too deep, and it is places such as Middlesbrough that will bear the brunt of the cost.
There is much trade-union anger in the air, and talk of a series of strikes to “force the Government to change direction”, as one union leader put it. Other unions are taking a more measured approach, 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 the sensible action at this stage. Union members have expertise to offer on where economies could be made to shield the most vulnerable. But places such as Middlesbrough expose the flaw in the Osborne strategy to shrink the state and assume that the third sector will 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 take-over 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 is not the diversity across the economy here 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 such as the American firm Clipper are part of a growing wind-power industry. Unless a commitment to sparking a low-carbon industrial revolution comes from the Government, then firms will cease to invest in creating the skilled workforce that such places need to compete globally. The region’s talented young people will move away.
Structural damage could be done to the economy in places such as 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 regional imbalances, the future can be only one of foreboding.