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We're a long way from crisis over

The shine was quickly taken off the GDP figures announced last week, the 1 per cent growth lauded and possibly leaked by a Prime Minister desperate for good news was dismissed by most commentators as accounted for by a short-term boost from the Olympics (0.7 per cent) and business seeking to 'recover' from extra bank holidays (0.2 per cent). The consensus that we are a long way from meaningful and sustained recovery remains.

The GDP figures followed news that employment was also increasing, with more people now in work than ever and unemployment claimants tumbling. Again, the glimmer of hope from these headlines fades considerably with closer analysis. There are now 1.4 million workers employed on part-time hours contracts who want to work full-time and the majority of new jobs are precarious temporary and agency forms of employment, hardly the basis for a resurgent consumer confidence in the run up to Christmas.

Within the north eastern LEP area the reality underlying the employment picture continues to include some worrying trends. Long-term unemployment keeps rising at a dramatic rate; in the year to September across the seven Local Authority areas long-term unemployment has more than doubled. Youth unemployment (18-24 year olds) is also once again increasing.

There is no surprise in these findings. In the last three years the north east has shed over 45,000 jobs in the public sector, proportionately more than any other region, jobs have been lost in the private sector too and many of those that haven't been affected by redundancy are working fewer hours than pre-2010. This results in massive demand taken out of the regional economy and it is still only the early wave of cuts, with between 70 and 90 per cent of public spending reductions to come. Further declines in employment levels in this region and no significant growth is expected.

The suggestion that the economy is 'healing' belies the experience of most people, for those furthest away from the labour market, those most vulnerable, the impact is most difficult and their view of the immediate future is opposite to any sense of optimism that the government might want to generate.

At the weekend there was a vigil in Sunderland and a march in Newcastle by the 'Hardest Hit' coalition, a group of over 90 disabled people's organisations and charities. A new report by this coalition published last week shows that far from things improving over three quarters of disabled people said their health had got worse due to the stress of the tests to see if they qualify for benefits; a significant majority thought benefit changes would both damage their health and make work and finding work harder.

The government would be quite wrong to believe they're getting it right on the economy, they're not and the sooner they move away from the stubborn adherence to cuts being the only option the sooner the apparent penalisation of the most vulnerable will stop.

Kevin Rowan

Regional Secretary

Northern TUC

Briefing document (600 words) issued 30 Oct 2012