Ups and downs in job numbers in the northeast

Georgia Lewis

Image © Colin

People who probably had no idea the Geneva Motor Show was even happening this week were made well aware of it after a surprise announcement by Nissan. A new compact car is to be manufactured at Nissan’s Sunderland plant, a rare beacon of economic hope and employment in the beleaguered northeast of England.

Sky News was first to jump on the bandwagon with the declaration that it was great news for the job market and they fitted in a spot of Cameron cheerleading because this happened partly because of £9.3 million in support from the government. Never mind that it mostly happened because of £125 million in investment from Nissan – through the Sky News prism, this was irrefutable proof that the Con-Dems are serious about job creation.

First, the good news – this means about 600 new jobs at the plant and when you add in jobs created along the supply chain, up to 2,000 new jobs. Not only are there new positions being created but, for the current employees at the plant, they can enjoy a greater sense of job security. This is great news indeed and will make for many happy households in the northeast.

But let’s not get too excited about an economic revival of the northeast just yet. Last November, multinational mineral resource processing company Rio Tinto announced the closure of an aluminium smelter in Lynemouth, near Newcastle-upon-Tyne. Blaming carbon taxes for the closure, this has resulted in the loss of 515 jobs. Last May, Indian company Tata Steel cut 1,500 jobs in nearby Teesside and Scunthorpe, a bit further south, again citing the costs involved in reducing emissions. So that’s 2,515 people looking for work many miles north of Westminster.

That’s not great news. But to add insult to injury, this week government announced the closure of two-thirds of the Remploy factories, which were set up after WWII to provide employment to disabled people. That’s another 1,752 people out of work, 1,518 of whom are disabled. While there are sound arguments against the sheltered workshop model of employment for disabled people, there are plenty of sound arguments for keeping such places open for those who do benefit from the financial and social independence. And where are the factories that have been deemed non-viable? Well, they are all over the UK, including the north-east – Spennymoor, Gateshead and Newcastle all earmarked for closure.

The big issue here is that the factories weren’t profitable. Would it be outrageous to suggest a new business model for these factories whereby they are run as non-profit organisations? Indeed, perhaps this is what Stephen Hester should be doing at RBS. Rather than trying to get a dead dog of a bank ready for sale, why not look at restructuring the bank so it’s a non-profit and all money made can go back to account holders? This is how my journalism union pension fund works in my native Australia – all profits made go back to the members, not towards bonuses and the like. It’s a simple model and the only people who wouldn’t be keen would be those who get giant bonuses.

Then there’s the decentralisation elephant in the room. Where are the incentives for businesses to relocate their headquarters to cities up north and out of London? In this age of communication that was unimaginable 20 years ago, there are so many businesses that actually don’t need to be based in London – and surely the bean counters would appreciate not paying London rent on their premises? It’s such an obvious way to create jobs – although perhaps this is a hard sell after the mass whining of BBC employees who would have to move up north to Salford, near Manchester.

The cost of living is generally cheaper in the north, especially when it comes to property. The London budget for a flat could easily buy a house in many parts of the north – take a look on Rightmove if you’re unsure. And the homogenised high streets of the UK mean the shops in cities up north means the shops are the same as London – hey, I’ve heard people complain about that without ever having been shopping outside of London or maybe Bicester Village on an adventurous day.

But when there’s a Prime Minister who actually said out loud that his biggest priority was making sure Boris Johnson remains as the mayor of London, it makes any government crowing about spunking £9.3 million on 600 jobs in Sunderland sound pretty hollow indeed.

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