Search

Britain’s older industrial towns have long been known to face economic problems. However, in the aftermath of the recession triggered by the 2008 financial crisis, recorded unemployment in the towns has fallen to relatively low levels. This paper deploys labour market accounts to measure the contributions of changing levels of employment, population, national and international migration, commuting, and labour market participation to the pattern of change in the towns between 2010 to 2016. The paper also places older industrial towns in their regional context by comparing recent trends in the towns with those in the main regional cities, London, and the UK as a whole. The paper concludes that the reduction in recorded unemployment since 2010 paints an overly positive picture of labour market trends in Britain’s older industrial towns.

Welfare reform has been central to UK government policy since 2010. This article compares initial expectations with key outcomes by 2016. The article shows that although the financial savings to the Treasury have been large, they have been rather less than the government first anticipated, mainly because the reduction in spending on incapacity‐related benefits has proved far smaller than expected. The financial losses have also been spread highly unevenly across the country, and the evidence from a pilot study in Scotland suggests that the reforms have had little impact on levels of worklessness. The article concludes that whilst forecasting the financial savings from welfare reform is an inherently uncertain activity, the United Kingdom's reforms should be understood first and foremost as about reducing public spending in the poorest places.

Key Points - This report challenges the view that the UK economy is operating at or close to full employment. It presents alternative estimates of the level of unemployment, based on a re-working of official statistics, for every local authority district in England, Scotland and Wales. - The report estimates that in 2017 the ‘real level of unemployment’ across Britain as a whole is nearly 2.3 million. This compares with just under 800,000 on the claimant count and 1.5 million on the wider ILO measure of unemployment preferred by the government. - The report estimates that there are some 760,000 ‘hidden unemployed’ on incapacity-related benefits (these days primarily Employment and Support Allowance). These are men and women who might have been expected to be in work in a genuinely fully employed economy. They do not represent fraudulent claims. - The real level of unemployment and the scale of hidden unemployment have both fallen since 2012. However, there remain almost as many unemployed ‘hidden’ on incapacity benefits as ‘visible’ on the unemployment claimant count. - Hidden unemployment is disproportionately concentrated in the weakest local economies, particularly Britain’s older industrial areas and a number of seaside towns. The effect is to mask the true scale of labour market disparities between the best and worst parts of the country. - In a number of local economies, including much of North East England, East Lancashire, Merseyside, the Welsh Valleys and the Birmingham and Glasgow areas, the real level of unemployment remains at or just below 10 per cent of the working age population. Much of southern and eastern England outside London, with real unemployment in the 2-3 per cent range, could however lay claim to operating near full employment.

Key points  - The new money that the UK government has allocated to support its industrial strategy is targeted at R&D in an exceptionally narrow range of sectors – healthcare & medicine, robotics & artificial intelligence, batteries, self-driving vehicles, materials for the future and satellites & space technology.  - Even on a generous definition of the industries that might benefit from the new Industrial Strategy Challenge Fund, these sectors account for little more than 1 per cent of the whole economy (by employment) and 10 per cent of UK manufacturing.  - The jobs in the sectors targeted by the Fund are highly unevenly spread across the country. The pattern is more complex than a simple North-South divide but a number of places in southern England have substantially more jobs in these sectors than industrial cities such as Bradford, Leicester, Manchester, Middlesbrough, Nottingham, Stoke and Swansea.  - The distribution across the country of research and development establishments – along with universities and R&D labs in large companies likely to be first in line for the new R&D funding – is particularly skewed in favour of an arc to the immediate north, west and south of London.  - Even excluding its famous university, the Cambridge area (population just 285,000) has twice as many jobs in scientific research and development establishments as the whole of the Midlands, more than Scotland and Wales combined, and only 2,000 fewer than the whole of the North of England (population 15.2 million).  - The report concludes that the government’s sectoral focus is exceptionally narrow – too narrow alone to provide a base on which to build a revival of British industry.  - The report also concludes that the government’s narrow sectoral focus threatens to widen regional divides. It is Cambridge, Oxfordshire, the Thames Valley, Hertfordshire and London itself that may gain most in the first instance.

In this short paper we aim to explain how the loss of Britain’s industrial base sets the context for present-day public finances. In doing so, we draw in particular on our own research at CRESR over the last three decades. Individual components of this research provide pieces of the jigsaw, but by combining all the pieces and drawing on wider ideas in economics to fill in some of the gaps the overall picture becomes clear. In brief, our argument is that the destruction of industrial jobs, which was so marked in the 1980s and early 90s but has continued on and off ever since, fuelled spending on welfare benefits which in turn has compounded the budgetary problems of successive governments. And with the present government set on welfare reform, the places that bore the brunt of job destruction some years ago are now generally facing the biggest reductions in household incomes. There is a continuous thread linking what happened to British industry in the 1980s, via the Treasury’s budgetary calculations, to what is today happening on the ground in so many hard-pressed communities. In particular, we demonstrate these links by deploying local data. This has been the distinctive contribution of our research (and of CRESR more generally) and its value is that it provides not just a level of detail that would otherwise be missing but, more importantly, it sheds light on the underlying processes at work. The Treasury knows it has a problem balancing public finances, and that the government spends an awful lot on working-age welfare benefits. But it never seems to ask exactly where – which towns and cities – draw so heavily on benefits, or why these communities have become so dependent on welfare spending.

In the UK, the increasingly dominant assumption is that the big cities are the motor of regional economic growth. This city-centric view stands in marked contrast to the pre-2000 assumption that Britain’s largest cities were actually the main focus of declining employment and population. Drawing on a range of theoretical ideas and evidence, this article questions the view that the big cities are the key drivers of UK regional growth. It recognises that there have been important changes in trends, notably in London, but argues that the geography of recent economic trends in the UK is largely one of regional divergence. There is scant evidence that the big provincial cities perform better than other places—in fact, rather the opposite. The relationship between the big cities and their hinterlands is one of interdependence. The article also argues that the performance of UK cities is deeply intertwined with the structure of UK economic growth.

Welfare reform has become a defining feature of contemporary UK government policy. The impact of welfare reforms varies enormously from place to place and for different types of household. This report quantifies the impact of welfare reforms since 2010. It shows that the reforms have contributed to a widening of the prosperity gap between different regions of the UK, with families and working age adults worst affected, and knock-on effects to local economies. In total, 83 percent of the loss from the post-2015 reforms can be expected to fall on families. Parallel changes related to tax, the minimum wage, social sector rents and childcare are unlikely to offset these financial losses.

Cities and their hinterlands have always had economic, social and cultural links. However, the governance arrangements vary enormously, from fully integrated administrations to separate and often competing political units. Today, with Britain’s cities widely viewed as the main motors of regional economic growth, there are moves towards new structures of city region governance across the UK. These involve increased coordination between existing government bodies and interest groupings, though there are marked geographical variations in progress towards such collaboration. This paper considers whether these variations in governance structures really matter. It is based on new research into the relationship between the UK coalfields and their neighbouring cities. The coalfields are one of the principal areas of industrial restructuring in the UK, having lost virtually all the jobs in the coal industry itself since the early 1980s. In theory, neighbouring cities might offer economic salvation for such areas, which could develop a new future as residential and ancillary service hinterlands. But is this really the emerging trajectory, or are the former coalfields experiencing a revival independent of their neighbouring cities? And do governance structures make a difference to what is happening? Research evidence from three coalfields (Lothian, South Yorkshire and South Wales) and their neighbouring cities (Edinburgh, Sheffield and Cardiff) reveals that collaborative governance structures spanning these areas vary markedly, as do the economic trends. Overall there appears to be no close relationship between the existence of collaborative governance and the strength of coalfield-city economic links. On the contrary, cross-boundary collaboration appears to have greatest relevance in reconciling the competing claims of rival localities and hence in fostering polycentric development, rather than in promoting city-focused growth. Key factors driving area regeneration are underlying economic strengths and weaknesses, the operation of the market, the availability of funding, and the suite of policy tools through which it is allocated.

Almost the whole of the British coal industry has closed since the early 1980s. The authors assess the extent to which the areas once dependent on coalmining have adapted to this job loss. A ‘labour-market accounting’ approach is employed to document the principal changes in employment, unemployment, commuting, and activity rates among men in the English and Welsh coalfields over the period to 2004, building on previous similar research covering the period 1981–91. The authors point to a strong recovery of employment among men in these areas, though this is not yet on a scale to offset all the coal job losses and there is important variation between areas. There is also evidence of extensive and continuing ‘hidden unemployment’.

Beatty C. and Fothergill S. (2005) The diversion from ‘unemployment’ to ‘sickness’ across British regions and districts, Regional Studies 39 , 837–854. Around 2.7 million non‐employed adults of working age in the UK claim sickness‐related benefits, and the numbers have risen steeply over time. The very large variation in the numbers across districts and regions points strongly to extensive hidden unemployment, especially in older industrial areas affected by job losses. This paper builds on two previous papers by the same authors – one dealing with the theoretical framework and the other with a local case study – to present wholly new estimates of the scale of the diversion across all parts of the country. It also questions contemporary perceptions of the UK labour market and the validity of current approaches to re‐engaging sickness claimants with employment.

Beatty C. and Fothergill S. (2004) Economic change and the labour market in Britain’s seaside towns, Reg. Studies 38, 461–480. For thirty years, Britain’s seaside towns have faced the challenge of the rising popularity of foreign holidays. This paper explores how their economies have adapted, and in particular the extent to which high claimant unemployment in many of the towns is rooted in local job loss. By deploying ‘labour market accounts’ for 1971 to 2001, the paper shows that in fact the continuing imbalance in seaside labour markets owes more to high levels of in-migration than to job loss, and even the sectors of the local economy most closely linked to tourism show growth in employment.

The debate about the extent of hidden unemployment is central to understanding the contemporary UK labour market. This paper provides a detailed case study of one area - Barrow-in-Furness - where major industrial job losses have co-existed with falling claimant unemployment among men. Using aggregate statistics and new survey evidence, it argues that these trends mask extensive hidden unemployment, especially among men on sickness-related benefits. Comparisons are also made with areas covered by similar surveys. The paper concludes that the claimant and International Labour Organization measures of unemployment both appear deeply flawed in the UK context because of the diversion from unemployment to sickness benefits. Le debat sur l'importance du chomage cache est essentiel a la comprehension du marche du travail contemporain au Royaume-Uni. Cet article cherche a fournir une etude de cas detaillee d'une zone - Barrow-in-Furness - ou d'importantes suppressions d'emplois ont coexiste avec une baisse du nomb...

This article argues that the scale of unemployment in the UK, and the differences between regions, are severely understated by claimant unemployment data. It explains how unemployment becomes 'hidden', in particular by a major diversion of older and less healthy workers from unemployment-related benefits, and how this process is especially marked in the traditional industrial parts of northern Britain. The true scale of regional differences in joblessness is also underlined by employment rates in different parts of the country.

This book provides a new perspective on joblessness among men. During the last twenty years vast numbers of men of working age have moved completely out of the labour market into 'early retirement' or 'long-term sickness' and to take on new roles in the household. These trends stand in stark contrast to rising labour market participation among women. Based on an unprecedented range of new research on the detached male workforce in the UK, and located within an international context, the book offers a detailed exploration of the varied financial, family and health circumstances 'detached men' are living in. It also challenges conventional assumptions about the boundaries between unemployment, sickness and retirement and the true health of the labour market. Work to Welfare represents an important contribution to debates about the labour market and benefit systems and will be of interest to readers and practitioners in social policy, economics and geography.

Gudgin G. and Fothergill S. (1984) Geographical variation in the rate of formation of new manufacturing firms, Reg. Studies 18, 203–206. This paper examines the proposition advanced by Gould and Keeble in this issue of Regional Studies that in East Anglia geographical differences in company formation rates are strongly influenced by local proportions of non-manual employees. We conclude that the observed association may be influenced by the measure used to define formation rates, and that local employment in small firms is probably an influence of more general applicability. The fact that rural formation rates are commonly observed to be above those for urban areas is probably also partly a statistical artifact caused by an inappropriate measure of the formation rate.

Fothergill S., Kitson M. and Monk S. (1983) The impact of the New and Expanded Town programmes on industrial location in Britain, 1960–78, Reg. Studies 17, 251–260. Between 1960 and 1978 manufacturing employment in the New and Expanded Towns rose by nearly a quarter of a million relative to the national trend in this sector. Part of the increase resulted from the urban-rural shift in manufacturing which occurred throughout Britain, but 120–140,000 jobs can be attributed to public policy. Policy was most effective in the early 1960s, especially in the New Towns, though the expansion in the New and Expanded Towns was small compared to the decline in the conurbations. Since the mid 1970s both programmes have had little discernible impact on industrial location.

The paper argues that criticisms of shift-share techniques are insufficiently strong to affect its application to the analysis of regional growth in the United Kingdom. Evidence for the 11 British regions for 1952-75 is used to demonstrate the robustness of the technique in the context of differing levels of sectoral disaggregation and choice of base years and the technique is then extended to incorporate multiplier and linkage effects. Finally its utility is compared with that of analysis of variance techniques for standardising for industrial structure.

BEATTY C. and FOTHERGILL S. (1996) Labour market adjustment in areas of chronic industrial decline: the case of the UK coalfields, Reg. Studies 30, 627–640. The paper explores the labour market consequences of the near-terminal decline of employment in the UK coal industry. Despite the job loss, registered unemployment has not risen. Using labour market accounts derived mainly from Census of Population data, the paper examines the roles of migration, commuting, job creation and changes in labour force participation as mediating influences. Substantial ‘hidden’ male unemployment is exposed, and rates of ‘real’ unemployment are also calculated. BEATTY C. et FOTHERGILL S. (1996) L'ajustement du marche du travail dans les zones serieusement touchees par le declin industriel: cas d'etude des bassins houillers au Royaume-Uni, Reg. Studies 30, 627–640. Cet article cherche a examiner l'impact sur le marche du travail du declin quasi-terminal de l'emploi dans l'industrie houillere au Royaume-Uni. En depit des supp...

BEATTY C., FOTHERGILL S. and MACMILLAN R. (2000) A theory of employment, unemployment and sickness, Reg. Studies 34, 617-630. This paper explains how the measurement of unemployment is distorted by the way that 'sickness' is defined and counted by social security systems. Drawing on the concepts of 'hidden sickness', 'the queue for jobs' and 'hidden unemployment', and on empirical observations from the UK, it shows how job loss can result in increased recorded sickness rather than recorded unemployment. It also shows how this process may vary between localities and countries. The argument has profound implications for perceptions of the true extent of unemployment and of labour market disparities between regions. BEATTY C., FOTHERGILL S. et MACMILLAN R. (2000) L'emploi, le chomage et la maladie: une theorie, Reg. Studies 34, 617-630. Cet article chercheaexpliquer comment la mesure du chomage s'avere fausseeacause de la fac¸on dont la Secu definit 'maladie' et la comptabilise. Puisant dans des notions de '...